CITY OF BELLINGHAM, WASHINGTON - cob.org

CITY OF BELLINGHAM,

WASHINGTON

Boulevard Park

Comprehensive Annual Financial Report

For the Fiscal Year Ended December 31, 2009

City of Bellingham, Washington Comprehensive Annual Financial Report

For the Fiscal Year Ended December 31, 2009

Finance Director John Carter Prepared by: Accounting Manager Kipp Drummond [email protected] Accountants Melanie Aliverti, CPA Eden Rockenbach Daniel Heverling Technicians Terrie Pilkington Stephen Kirk For comments or questions, contact: City of Bellingham, Finance Department (360) 778-8000

City Website: http//www.cob.org

Financial Reports Website:http://www.cob.org/government/departments/finance/reports.aspx

City of Bellingham CAFR 2009 Introductory Section

TABLE OF CONTENTS

INTRODUCTORY SECTION Table of Contents ______________________________________________________________________ i

Letter of Transmittal _________________________________________________________________ 1-1 Certificate of Achievement ____________________________________________________________ 1-6 Organization Chart __________________________________________________________________ 1-7 List of Elected and Appointed Officials ___________________________________________________ 1-8

FINANCIAL SECTION Independent Auditor's Report __________________________________________________________ 2-1 Management's Discussion and Analysis - Unaudited ________________________________________ 3-1

Basic Financial Statements Government-wide Financial Statements

Statement of Net Assets ______________________________________________________________ 4-2 Statement of Activities _______________________________________________________________ 4-3

Governmental Funds Balance Sheet _____________________________________________________________________ 4-4

Reconciliation of the Balance Sheet to the Statement of Net Assets ________________________ 4-5 Statement of Revenues, Expenditures and Changes in Fund Balances _________________________ 4-6

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities ____________________________________________________________ 4-7

Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual GAAP Basis General Fund ___________________________________________________________________ 4-8 Street Fund ____________________________________________________________________ 4-9 HUD Grant Fund ________________________________________________________________ 4-10 2004 PFD/Civic Fld LTGO Bond ____________________________________________________ 4-11

Proprietary Funds Statement of Net Assets ______________________________________________________________ 4-12 Statement of Revenues, Expenses and Changes in Fund Net Assets __________________________ 4-14 Statement of Cash Flows _____________________________________________________________ 4-16

Fiduciary Funds Statement of Net Assets ______________________________________________________________ 4-18 Statement of Changes in Net Assets ____________________________________________________ 4-19

Notes to the Financial Statements__________________________________________________________ 4-21

Required Supplementary Information _______________________________________________________ 5-1

Combining and Individual Fund Statements Nonmajor Governmental Funds

Combining Balance Sheet ____________________________________________________________ 6-2 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ________________ 6-3

Nonmajor Special Revenue Funds Descriptions _______________________________________________________________________ 6-5 Combining Balance Sheet ____________________________________________________________ 6-8 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ________________ 6-10 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual GAAP Basis

Arterial Street Construction Fund ___________________________________________________ 6-12 Paths and Trails Reserve Fund _____________________________________________________ 6-13 Park Site Acquisition Fund _________________________________________________________ 6-14 Technology Replacement and Reserve Fund __________________________________________ 6-15

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Capital Maintenance Fund_________________________________________________________ 6-16 Library Gift Fund ________________________________________________________________ 6-17 Olympic Pipeline Incident Fund _____________________________________________________ 6-18 Squalicum Park/Olympic Fund _____________________________________________________ 6-19 Olympic Restoration Fund _________________________________________________________ 6-20 Olympic – Whatcom Falls Park Addition Fund _________________________________________ 6-21 Little Squalicum Oeser Settlement Fund ______________________________________________ 6-22 First ¼% Real Estate Excise Tax Fund _______________________________________________ 6-23 Second ¼% Real Estate Excise Tax Fund ____________________________________________ 6-24 Police Federal Equitable Fund _____________________________________________________ 6-25 Asset Forfeiture/Drug Enforcement Fund _____________________________________________ 6-26 Criminal Justice Fund ____________________________________________________________ 6-27 Public Safety Dispatch Fund _______________________________________________________ 6-28 Beyond Greenway Levy Fund ______________________________________________________ 6-29 Greenway III Levy Fund __________________________________________________________ 6-30 Park Impact Fees Fund ___________________________________________________________ 6-31 Sportsplex Fund ________________________________________________________________ 6-32 Tourism Fund __________________________________________________________________ 6-33 Nonmajor Special Revenue Funds __________________________________________________ 6-34

Nonmajor Debt Service Funds Descriptions _______________________________________________________________________ 6-35 Combining Balance Sheet ____________________________________________________________ 6-36 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ________________ 6-37 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual GAAP Basis

2001 Fire UTGO Bond Fund _______________________________________________________ 6-38 1999 Municipal Court LTGO Bond Fund ______________________________________________ 6-39 1996 Refund LTGO Bond Fund ____________________________________________________ 6-40 2004 Sportsplex Acq. LTGO Bond Fund ______________________________________________ 6-41 Drake Note Fund ________________________________________________________________ 6-42 PW Trust Fund Loan – Street Overlay Fund ___________________________________________ 6-43 LID Guaranty Fund ______________________________________________________________ 6-44 LID Assessment Fund ____________________________________________________________ 6-45 Nonmajor Debt Service Funds _____________________________________________________ 6-46

Nonmajor Capital Project Funds Descriptions – Civic Field Improvement Fund _____________________________________________ 6-47 Statement of Revenues, Expenditures and Changes in Fund Balances _________________________ 6-48 Schedule of Revenues, Expenditures and Changes in Fund Balance __________________________ 6-49

Nonmajor Permanent Funds Descriptions _______________________________________________________________________ 6-51 Combining Balance Sheet ____________________________________________________________ 6-52 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ________________ 6-53 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual GAAP Basis

Greenways Maintenance Endowment Fund ___________________________________________ 6-54 Natural Resource Protect and Restore Fund __________________________________________ 6-55 Nonmajor Permanent Funds _______________________________________________________ 6-66

Nonmajor Enterprise Funds Descriptions _______________________________________________________________________ 6-57 Combining Statement of Net Assets ____________________________________________________ 6-58 Combining Statement of Revenues, Expenses and Changes in Net Assets ______________________ 6-59 Combining Statement of Cash Flows ____________________________________________________ 6-60

Nonmajor Internal Service Funds Descriptions _______________________________________________________________________ 6-61 Combining Statement of Net Assets ____________________________________________________ 6-62 Combining Statement of Revenues, Expenses and Changes in Net Assets ______________________ 6-64

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Combining Statement of Cash Flows ____________________________________________________ 6-66

Nonmajor Fiduciary Funds Descriptions _______________________________________________________________________ 6-69 Combining Statement of Net Assets – Pension Trust Funds __________________________________ 6-70 Combining Statement of Net Assets – Agency Funds _______________________________________ 6-71 Combining Statement of Changes in Plan Net Assets – Pension Trust Funds ____________________ 6-72 Combining Statement of Changes in Assets and Liabilities – Agency Funds _____________________ 6-73

STATISTICAL SECTION Table of Contents - Descriptions _______________________________________________________ 7-1 Schedule 1 – Net Assets by Component _________________________________________________ 7-2 Schedule 2 – Change in Net Assets _____________________________________________________ 7-3 Schedule 3 – Fund Balances, Governmental Funds ________________________________________ 7-6 Schedule 4 – Changes in Fund Balances, Governmental Funds _______________________________ 7-7 Schedule 5 – Tax Revenues by Source, Govermental Funds _________________________________ 7-8 Schedule 6 – Assessed Value of Taxable Property _________________________________________ 7-9 Schedule 7 – Direct & Overlapping Property Tax Rates _____________________________________ 7-10 Schedule 8 – Principal Property Tax Payers ______________________________________________ 7-11 Schedule 9 – Property Tax Levies and Collections _________________________________________ 7-12 Schedule 10 – Ratios of Outstanding Debt by Type _________________________________________ 7-13 Schedule 11 – Ratios of General Obligation Bonded Debt Outstanding _________________________ 7-14 Schedule 12 – Direct and Overlapping Governmental Activities Debt ___________________________ 7-15 Schedule 13 – Legal Debt Margin Information _____________________________________________ 7-16 Schedule 14 – Pledged-Revenue Coverage ______________________________________________ 7-17 Schedule 15 – Demographic and Economic Statistics _______________________________________ 7-18 Schedule 16 – Principal Employers _____________________________________________________ 7-19 Schedule 17 – Full-time Equivalent City Government Employees by Groups _____________________ 7-20 Schedule 18 – Operating Indicators by Function/Performance Measures ________________________ 7-21 Schedule 19 – Capital Asset Statistics by Function _________________________________________ 7-22

SINGLE AUDIT SECTION Schedule of Expenditures of Federal Awards _____________________________________________ 8-1 Notes to the Schedule of Expenditures of Federal Awards ___________________________________ 8-3 Schedule of State and Local Financial Assistance __________________________________________ 8-4

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FINANCE DEPARTMENT City Hall, 210 Lottie Street Bellingham, Washington 98225 John Carter, Director

June 28, 2010 Honorable Mayor Pike, Council Members, and the Citizens of the City of Bellingham: I am pleased to submit the City of Bellingham’s 2009 Comprehensive Annual Financial Report (CAFR).

State law requires that cities with populations of 25,000 or more publish financial statements in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards (GAAS) by the Washington State Auditor’s Office under the Revised Code of Washington (RCW) 43.09.020. Pursuant to that requirement, we hereby issue the City’s CAFR for the fiscal year ended December 31, 2009.

Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City’s management. To the best of my knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various City and agency funds. All disclosures necessary to enable the reader to gain an understanding of Bellingham’s financial activities have been included.

The CAFR includes all City and agency funds. In addition, the CAFR reports on the City’s discrete component units, the Bellingham-Whatcom Public Facilities District (PFD) and the Bellingham Public Development Authority (BPDA), separately from City activities in the government-wide statement of net assets, statement of activities, and the notes to the financial statements.

As an aid to the reader, the major sections of this report have been separated by divider pages. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This transmittal letter is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditors.

GOVERNMENT PROFILE

Incorporated in 1904, Bellingham is the 12th largest of the 281 cities in the State of Washington with a population of 76,130. Located in the northwest corner of Washington State in Whatcom County, it is 54 miles south of Vancouver, British Columbia, and 88 miles north of Seattle on the Interstate 5 corridor. The city encompasses approximately 28 square miles and serves as the county seat.

Bellingham is a first-class, charter city with a mayor-council form of government operating under the laws of the State of Washington. Bellingham has an elected mayor, seven-member city council and municipal court judge.

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The City provides a full range of local government services, including general government, public safety, culture and recreation, street, water, wastewater and storm utilities and other enterprise services.

Discrete Component Units

Bellingham has two discrete component units that are separate legal entities from the City with their own boards of directors.

The Bellingham-Whatcom Public Facilities District was established in 2002 with the mission to create a regional center in the city that would enhance economic development in the business core, funded by a state rebate of .033% of locally collected sales tax.

The Bellingham Public Development Authority was established in 2008 to undertake, assist with, otherwise facilitate, and advocate for the redevelopment of the Bellingham waterfront, the downtown core, and the old town historic district and to undertake other such projects throughout the city as required. While the City will financially support the BPDA in its initial stages, the expectation is that it will eventually become operationally self-supporting.

ECONOMIC CONDITION AND OUTLOOK

Over the past three decades, the economy of Bellingham and Whatcom County has transitioned from a resource-based to a retail and service-based economy. Older industries, such as agriculture, timber, and fishing have declined in importance. Until recently retail, services, and manu-facturing activities have expanded at a steady pace. In the last several years Bellingham has suffered the same economic downturns in real estate, construction, and financial services experienced both nationally and internationally.

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500

1,000

1,500

2,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Taxable Retail Sales($ millions)

Tourism, education, and healthcare have a significant impact on the local economy. Our geographical location, including Bellingham Bay, the San Juan Islands, and Mt. Baker, offers significant recreational opportunities. A study by the Washington State Department of Community, Trade, and Economic Development shows that visitors spent $479 million in Whatcom County in 2008. This ranks fifth in visitor spending among the state’s 39 counties. This same study reported that travel spending across Washington is down 7.9% from 2008.

Western Washington University (the city’s second largest employer), Whatcom Community College and Bellingham Technical College host more than 28,000 students. St. Joseph Hospital, a 253-bed medical center and Level III Trauma Center serving Northwest Washington, is the city’s largest employer.

Bellingham’s population has increased 13% since 2000. The city’s annual per capita income of $34,292 (2008 figure) has increased 47% since 1999.

Since the first signs of change in the growth rates, and subsequent real declines in some of the City’s key revenue sources, the City has been closely monitoring its revenues and costs. The Mayor, Chief

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Administrative Officer, Finance Director, and Department Heads are working to develop short, medium, and long-term responses to this decline in fiscal resources. Starting mid-year 2008, City staff worked to reduce spending during the balance of the year. During the creation of the 2009 budget, departments were directed to keep expenses at 2008 levels. In early 2009, an additional $2.2 million dollars was cut from the 2009 budget. The 2010 total adopted expense budget was reduced by $28.1 million from the 2009 adopted budget.

Bellingham/Whatcom County’s 2009 unemployment rate of 8%, has again increased from the prior year and reflects the ongoing slowdown in the national and local economy. As reported by the Bureau of Labor Statistics, for the Bellingham Metrolopolitan Stastical Area, total non-farm employment (not seasonally adjusted) has dropped 9.6% from a November 2007 high of 86.7 thousand to 78.4 thousand in April 2010.

Due to the continuing decline in both commercial and residential building, the value of projects for which the City issued residential and commercial building permits dropped for the second year in a row, down from $200.2 million in 2007 to $127.5 million in 2009.

In 2009, all four of the City’s primary revenue generators: sales and use, property, business, and utility taxes continued to experience significant downturns that began in 2008.

Sales and use tax collections, the City’s largest single revenue source, which had increased at an annual average of 6.8% from 2005 through 2007, dropped 13% in 2009 for a cumulative two year drop of 19%.

Business tax, a key source of general fund revenue, which had increased at an annual average of 8.3% from 2005 through 2007, dropped 12% in 2009 for a cumulative two year drop of 13%.

Property tax, which had increased at an annual average of 11.8% from 2005 through 2007, and utitlity tax at an annual average of 10.4%, increased 1% and 0% respectively in 2009, after experiencing a combined 5% growth in 2008.

MAJOR INITIATIVES

Waterfront Redevelopment / New Whatcom Special Development Area

In 2004, the Port of Bellingham acquired the Georgia-Pacific 140 acre waterfront site and agreed to conduct environmental cleanup of the property. The property includes sites for which the City has been named as a potentially responsible party by the Washington State Department of Ecology. In 2005, the City paid $3.7 million to the Port for its share of environmental cleanup expenses.

During 2010, the City hopes to substantially complete a master plan and environmental impact statement for the New Whatcom Special Development area. The City will provide infrastructure to the property including utilities, streets, parks, and trails as determined in a development agreement to be negotiated with the Port of Bellingham. Project development goals include rebuilding the tax base, providing commercial development opportunities, accommodating some of the city’s expected residential growth, and providing public access to the waterfront. Full development is expected to be completed over the next 20+ years.

Downtown Redevelopment

Redevelopment of the downtown core is dynamic and a result of multiple efforts. Private developers, with City assistance, are creating new and refurbishing existing structures. Strategic improvements include a permanent shelter for the local Farmer’s Market and urban art sculpture. The Bellingham-Whatcom Public Facilities District (PFD) is spearheading a Cultural Arts District. In 2007, the PFD issued a bond to pay for a major capital renovation of the historic Mount Baker Theatre and for the construction of a new Whatcom Museum. The Mount Baker Theatre renovation was completed in 2008 and the Whatcom Museum opened November 2009. In 2008, the City created the Bellingham Public Development Authority to support existing city businesses and support new business development throughout the city with a special emphasis on downtown, old town, and the waterfront.

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Annexations

The City completed three annexations in the last year. There are currently three additional annexation proposals under consideration. Each City department has identified potential future operational and capital needs based on these pending annexations. The impact of each annexation or combination of annexations to the city will be determined by the following factors: current and future population, assessed valuation, current and future land use patterns, and capital infrastructure and equipment needed to provide City services to the area. Incremental cost increases to provide City services to these areas would likely be covered by increases in tax revenues. However, capital expenses such as road improvements, utility upgrades, parks, trails, fire equipment, etc. would most likely require additional funding sources.

Bond Issues

On April 23, 2010, the City’s bond rating was ‘recalibrated’ by Moody’s, as were most other U.S. municipal and public entities. Moody’s now assigns Aa2 to the City’s voted general obligation and revenue bonds. The City’s unvoted general obligation bonds are now assigned an Aa3. The City did not issue any new bonds in 2009.

FINANCIAL MANAGEMENT AND CONTROLS

Internal Controls

City management is responsible for establishing, implementing, and maintaining a framework of internal controls designed to ensure that City assets are protected from loss, theft or misuse, and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with GAAP. Internal accounting controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by management.

Budgetary Controls

The City maintains budgetary controls in accordance with State legal requirements. The objective of these budgetary controls is to ensure compliance with legal provisions established by the budget appropriations of City Council. The annual operating budget, or financial plan, is proposed by the Mayor and adopted by the City Council after a public process. Management control for the operating budget is maintained at the fund level and at the departmental level for the general fund.

Cash Management

The City invests temporarily idle cash in investments authorized by State law including U.S. agency issues and the Washington State Local Government Investment Pool. The average yield on investments during 2009 was 2.95%, which produced earnings of $4.5 million on all of the City’s investments for the year. This was a drop of $1.9 million or 29% from 2008. The City structures its investments to provide necessary liquidity and to minimize risk while achieving reasonable yields on its portfolio.

Risk Management

The City maintains various insurance policies and self-insurance funds to protect itself from risk.

AWARDS AND ACKNOWLEDGEMENTS

Independent Audit

State law requires an annual audit of all City financial records and transactions by the State Auditor, an independent elected State official. The 2009 audit of the City has been completed and was performed in conformance with GAAS. The financial statements of all City and agency funds have been included in this audit. Please refer to the Auditor’s Opinion letter at the beginning of the Financial Section of this report.

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Awards

The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Bellingham for its 2008 CAFR. This was the ninth consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an efficiently organized and clearly discernable CAFR. This report must satisfy both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

Additionally, in 2009 the City has also received its sixth consecutive GFOA Distinguished Budget Presentation Award.

Acknowledgements

Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of Finance Department staff and other employees throughout the City who assisted in and contributed to its preparation. Further appreciation is extended to the Mayor and City Council for their encouragement, interest and support in conducting the financial operations of the City in a responsible manner.

Respectfully submitted,

John Carter Finance Director

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City of Bellingham CAFR 2009 Introductory Section City of Bellingham CAFR 2009 Introductory Section

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Organization Chart

CITIZENS OF BELLINGHAM

LEGISLATIVE ELECTED COUNCIL

EXECUTIVE ELECTED MAYOR

MUNICIPAL COURT ELECTED JUDGE

LEGAL

PFD PFD BOARD

PDA BOARD BELLINGHAM PDA

HEARING EXAMINER

EXECUTIVE

MUNICIPAL COURT ADMIN.

JUDICIAL SUPPORT SERVICES

FIRE POLICE PUBLIC WORKS

HUMAN RESOURCES

MUSEUM

PLANNING & COMMUNITY

DEVELOPMENT

PARKS & RECREATION

INFORMATION TECHNOLOGY

SERVICES

FINANCE LIBRARY

LIBRARY BOARD

MUSEUM BOARD

CITIZEN PARTICIPATION BOARDS, COMMITTEES, COMMISSIONS

DISCRETE COMPONENT

UNIT

TEXT BOX

A text box indicates a department or elected official within the City organization. A dotted line indicates an indirect or advisory

relationship.

A solid line indicates a formal and direct relationship. TEXT

BOX A divided box indicates dual function and responsibility within the same department.

PDA Public Development Authority

TEXT BOX

PFD Public Facilities District A box with shadow indicates an entity outside the City organization.

PDA and PFD are a separate Washington municipal corporation reported as a discrete component unit

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Elected Officials Term Expiration Mayor Dan Pike 4 years December 31, 2011

Municipal Court Judge Deborah Lev 4 years December 31, 2013

1st Ward Council Member Jack Weiss 4 years December 31, 2011

2nd Ward Council Member Gene Knutson 4 years December 31, 2013

3rd Ward Council Member Barry Buchanan 4 years December 31, 2011

4th Ward Council Member Stan Snapp 4 years December 31, 2013

5th Ward Council Member Terry Bornemann 4 years December 31, 2011

6th Ward Council Member Michael Lilliquist 4 years December 31, 2013

At Large Council Member Seth Fleetwood 2 years December 31, 2011

Appointed Officials

Deputy Administrator David Webster

Finance Director John Carter

City Attorney Joan Hoisington

Hearing Examiner Dawn Sturwold

Museum Director Patricia Leach

Library Director Pam Kiesner

Director of Human Resources Michelle Barrett

Director of Information Systems Marty Mulholland

Director of Judicial & Support Services Linda Storck

Director of Parks & Recreation Paul Leuthold

Director of Planning & Community Dev. Tim Stewart

Interim Dir of Public Works (1/1/09 - 6/30/09) Tom Rosenberg

Director of Public Works (7/1/09 - forward) Ted Carlson

Fire Chief Bill Boyd

Police Chief Todd Ramsay

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Washington State Auditor Brian Sonntag

INDEPENDENT AUDITOR'S REPORT

June 28, 2010

Mayor and City Council City of Bellingham Bellingham, Washington

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Bellingham, Whatcom County, Washington, as of and for the year ended December 31, 2009, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Bellingham, Whatcom County, Washington, as of December 31, 2009, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the General, Street, HUD Grant and 2004 PFD/Civic Field L TGO Bond funds for the year then ended in conformity with accounting principles generally accepted in the United States of America.

As described in Note SC, during the year ended December 31, 2009, the City has implemented the Governmental Accounting Standards Board Statement No. 49 - Accounting and Financial Reporting for Pollution Remediation Obligations.

Insurance Building. PO Box 40021 •Olympia. Washington 98504-0021 • (360) 902-0370 •TDD Relay (800) 833-6388 FAX (360) 753-0646 •http: \\ \\\\.sao.wa.gm

In accordance with Government Auditing Standards, we will also issue our report dated June 28, 2010, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report will be issued under separate cover in the City's Single Audit Report. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The management's discussion and analysis on pages 3-1 through 3-11, pension trust fund on page 5-1 and information on postemployment benefits other than pensions on page 5-2 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying information listed as combining and individual fund statements on pages 6-2 through 6-73 is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

The information identified in the table of contents as the Introductory Section, Statistical Section, and Single Audit Section is presented for purposes of additional analysis and is not a required part of the basic financial statements of the City. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it.

Sincerely,

BRIAN SONNTAG, CGFM STATE AUDITOR

City of Bellingham CAFR 2009 Financial Section

MANAGEMENT’S DISCUSSION AND ANALYSIS

The City of Bellingham (City) presents this discussion and analysis as part of the financial statements for the fiscal year ending December 31, 2009. The information presented should be read in conjunction with the transmittal letter, the financial statements and the notes to the financial statements.

Financial highlights

• The City’s overall financial position improved in 2009 as compared to 2008. Government‐wide net assets improved by $3.4 million. Governmental activities provided $4.5 million of this increase and business‐type decreased by $1.1 million.

• The government‐wide assets exceed liabilities at December 31, 2009, by $598.1 million. Of this amount, the use of $61.4 million is unrestricted and may be used to meet the City’s ongoing obligations.

• The governmental funds ending balance decreased $9 million from 2008, ending 2009 at $52.6 million. Of this amount, the use of $43.8 million is unreserved and available for spending at the City’s discretion.

• At the end of the current fiscal year the general fund’s unreserved fund balance is $12.8 million. This unreserved fund balance would cover 21% or 2.5 months of 2009 general fund operating expenditures. This is a decrease of $1.7 million from 2008.

• Total governmental activity revenues decreased by $7.9 million, or 7.5%. Tax revenues declined by $3.2 million, or 5.1%, a direct reflection of the economic downturn.

• The proprietary funds total net assets decreased $1.1 million from 2008, ending 2009 at $220.8 million. Of this amount, the use of $14.8 million is unrestricted.

• The total bonded debt at December 31, 2009, is $51.5 million. This consists of $27.6 million in general obligation bonds, $23.7 million in revenue bonds, and $286 thousand in special assessment bonds. This is a $5.2 million reduction in government‐wide bonded debt from 2008.

Overview of the financial statements

This discussion and analysis serves as an introduction to the financial statements and is intended to assist users in interpretation of the basic financial statements. These basic statements consist of three parts:

• government‐wide financial statements • fund financial statements • notes to the financial statements

Government‐wide financial statements present the financial condition in a manner similar to private sector statements. They distinguish between functions that are primarily supported by tax reveue and intergovernmental revenues (governmental activities) and other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business‐type activities). The two government‐wide statements provide both short‐term and long‐term information about the overall financial status of the City. All funds are represented except fiduciary types.

• The statement of net assets presents information on assets and liabilities similar to a private sector balance sheet. The difference between assets and liabilities becomes the “net” asset. The statement of activities reports the change in net assets for the report year. The accounting basis used is full accrual. Revenues are reported when earned, expenses are reported when incurred.

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The government‐wide financial statements also present information for the City’s two discrete component units, the Bellingham‐Whatcom Public Facility District (PFD) and the Bellingham Public Development Agency (BPDA). The operations of the PFD and the BPDA are legally separate from the City and governed by interlocal agreements between the City and these organizations. Discussion in the MD&A does not include the revenues, expenses, assets, or liabilities of these discrete component units.

Fund financial statements provide detailed information about the City’s most significant funds, not the City as a whole, and are used to track specific sources of funding and spending. Major funds are separately reported while all others are combined into a single, aggregated presentation. Individual fund data for non‐major funds are provided in the form of combining statements in a later section of this report. There are three types of funds, described as follows:

Governmental funds represent most of the City’s basic services such as police, fire, parks, a portion of public works and general administration. Governmental fund statements include balance sheets and statements of revenues, expenditures and changes in fund balance. Unlike the government‐wide statements, these statements provide only a detailed short‐term view of the financial resources available for spending. The accounting basis used is modified accrual and there are no capital assets or long‐term debt included in these reports. Budgetary comparisons are included with the financial statements. These statements demonstrate compliance with the City’s adopted and final revised budget.

Proprietary funds represent activities the City operates similar to private business wherein customers (either outside customers or internal funds or departments of the City) are charged fees for service. The City has both enterprise and internal service types of proprietary funds. The statements provide both long‐term and short‐term financial information. The accounting basis used is full accrual. The statements include all assets and liabilities and all revenues and expenses. Also included is cash flow information. Proprietary fund statements provide the same type of information as the government‐wide financial statement, since both apply the full accrual method of accounting.

Enterprise funds account for the operations of five major funds; water, wastewater, storm and surface water, solid waste and medic one, as well as four other non‐major enterprise funds.

Internal service funds are used to report activities that provide supplies and services for many City programs. The internal service funds account for fleet maintenance, purchasing, facilities, telecommunications, claims and litigation, and employee benefits. Because these services benefit governmental operations more than business‐type functions, they have been included within governmental activities in the government‐wide financial statements.

Fiduciary funds are used to account for resources where the City acts as trustee or agent and is responsible for ensuring that the assets reported in these funds are used for their intended purpose such as police and firefighters pension funds. The accounting used for these funds is similar in nature to proprietary fund reporting since it includes both short‐term and long‐term information and employs the full accrual method. Reports include a statement of net assets and a statement of changes in net assets. These funds are excluded from the government‐wide financial statements because these assets cannot be used to finance City operations.

Notes to the financial statements provide information essential to a full understanding of the government‐wide and fund financial statements. The notes to the financial statements begin immediately following the basic financial statements.

In addition to the basic financial statements and accompanying notes, this report also presents comparative budget statements for major governmental funds.

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In 2009, at the request of the Washington State Auditor’s Office, changes have been made in the accounting treatment of municipal court accounts receivable that result in the $5.9 million reduction in the government‐wide governmental funds accounts receivable, unrestricted funds, and net assets. These changes are immaterial (see note V‐K). Caution should be used when making comparisons with similar 2008 numbers where this accounting treatment has not been changed.

Government‐wide financial analysis

Net assets

The City’s net assets total $598.1 million at December 31, 2009, an increase of .6% over December 31, 2008.

Incr (Decr)

2009 from 2008

Capital assets, net of related debt $ 487.3 million $ 27.2 million

Restricted assets 49.4 mill ion (13.2) million

Unrestricted assets 61.4 mill ion (10.6) million

Total net assets $ 598.1 million $ 3.4 million

Capital assets, net of related debt, consisting of land, buildings, streets, and other significant investments, represent 81.5% of net assets, which is an increase of 4.1% from 2008. This amount is not considered liquid and not available for future spending.

Resources subject to a variety of external constraints including; bond covenants, construction requirements, levy agreements, endowment terms, settlement agreements, the Revised Code of Washington, restricted 8.3% of net assets, a decrease from the prior year. The remaining balance of unrestricted net assets are available to meet ongoing obligations. In 2009, this comprises 10.3% of net assets, a decrease of 1.8% from the prior year.

Net assets (in thousands)

2009 2008 2009 2008 2009 2008AssetsCurrent 79,586$ 98,095$ 35,908$ 35,835$ 115,494 133,930$ Noncurrent 25,844 22,393 13,481 20,854 39,325 43,247 Capital assets (net of depr) 307,889 291,136 213,684 207,426 521,573 498,562

Total assets 413,319 411,624 263,073 264,115 676,392 675,739

LiabilitiesCurrent 7,943 8,510 3,820 3,841 11,763 12,351 Current portion long-term 6,338 5,922 4,869 4,856 11,207 10,778 Long-term noncurrent 21,746 24,367 33,614 33,578 55,360 57,945

Total liabilities 36,027 38,799 42,303 42,275 78,330 81,074

Net assetsInvested in capital assets,net of related debt 294,336 275,563 192,943 184,550 487,279 460,113 Restricted 36,300 42,022 13,055 20,482 49,355 62,504 Unrestricted 46,656 55,240 14,772 16,808 61,428 72,048

Total net assets 377,292$ 372,825$ 220,770$ 221,840$ 598,062$ 594,665$

Governmental activities Business-type activities Total

3-3


Changes in net assets

In 2009, government‐wide net assets increased by $3.5 million, of which $4.5 million are attributable to governmental activities. The increase consists of $4.7 million in revenues over expenses, and $220 thousand in net transfers out.

Business‐type activities’ net assets decreased $942 thousand. The decrease consists of $1.2 million of expenses over revenues, $4 thousand loss on sale of capital assets, and $220 thousand net transfers in from governmental activities. Prior period adjustments are not included in the above numbers.

Change in net assets (in thousands)

Net Assets (in thousands)

2009 2008 2009 2008 2009 2008Program revenues:Charges for services 16,887$ 20,385$ 47,585$ 50,366$ 64,472$ 70,751$ Operating grants and contributions 6,195 4,655 4 6 6,199 4,661 Capital grants and contributions 9,921 8,277 1,845 2,369 11,766 10,646 General revenues:Property tax 16,684 16,561 - - 16,684 16,561 Retail sales and use taxes 18,764 21,603 - - 18,764 21,603 Interfund tax 3,895 4,022 - - 3,895 4,022 Business tax 20,818 21,208 1,187 1,271 22,005 22,479 Other unrestricted revenues 4,348 7,605 784 2,844 5,132 10,449 Micellaneous sources/(uses) 120 1,140 - - 120 1,140

Total revenues 97,632 105,456 51,405 56,856 149,037 162,312 Program expenses:General government 14,627 15,255 - - 14,627 15,255 Public safety 37,101 38,120 - - 37,101 38,120 Physical environment 7,276 6,910 - - 7,276 6,910 Transportation 10,851 10,096 - - 10,851 10,096 Economic environment 6,016 5,495 - - 6,016 5,495 Mental and physical health 47 77 - - 47 77 Culture and recreation 15,949 15,720 - - 15,949 15,720 Interest & other debt service costs 1,078 1,146 - - 1,078 1,146 Water - - 15,131 14,190 15,131 14,190 Wastewater - - 15,355 14,394 15,355 14,394 Storm & surface water - - 4,769 4,566 4,769 4,566 Solid waste - - 5,439 985 5,439 985 Medic one - - 7,682 9,045 7,682 9,045 Other business type activities - - 4,187 4,849 4,187 4,849

Total expenses 92,945 92,819 52,563 48,029 145,508 140,848 Excess or deficiency before any transfers or gain (loss) on sale of capital assets 4,687 12,637 (1,158) 8,827 3,529 21,464 Gain (loss) on sale of capital assets - - (4) 587 (4) 587 Transfers (220) (480) 220 480 - -

Change in net assets 4,467 12,157 (942) 9,894 3,525 22,051 Net assets - beginning 372,825 351,951 221,840 211,946 594,665 563,897 Prior period adjustments - 8,717 (128) - (128) 8,717

Net assets - ending 377,292$ 372,825$ 220,770$ 221,840$ 598,062$ 594,665$

Governmental activities Business-type activities Total

3-4


Program revenues and expenses – government‐wide

In 2009, overall government‐wide revenues decreased 8.5% from 2008 to $149 million. $5.9 million of this decrease is attributable to the 2009 change in accounting procedure for municipal court receivables (see note V‐K). As with the continued decline in the national economy, the local economy and construction activity experienced similar declines which led to decreases in retail sales and use tax and business tax. As was noted in 2008, sales tax, business tax, and property tax revenues had been experiencing significant growth in the immediate years prior to 2008. In 2009, government‐wide property tax revenues increased .7% to $16.7 million while retail sales and use tax decreased 13.1% to $18.8 million and business tax decreased 2.1% to $22 million (see fund level analysis).

In 2009, overall government‐wide expenses increased 3.3% from 2008 to $145.5 million. This increase in expenses is down significantly from the 2008 increase of expenses from 2007 of 8.3%.

Program revenues and expenses – governmental activities

Charges for services program revenue for governmental funds decreased overall by $3.5 million in 2009 from 2008. The largest decrease in charges for services is $5.8 million in general government due primarily to the accounting method change in municipal court of $5.9 million (see note V‐K). This decrease is offset by increases in charges for services of $379 thousand in public safety, $794 thousand in transportation, $577 thousand in economic environment, $411 thousand in culture and recreation, and $126 thousand in physical environment. Overall expenses for governmental programs slightly increased by $126 thousand from 2008 to 2009. General government decreased $590 thousand, and public safety $1 million. Physical environment expenses increased $363 thousand, transportation expenses $718 thousand, economic environment $520 thousand, and culture and recreation $229 thousand. Public safety is the largest governmental activity with 40% of all governmental activity expenses.

Program revenues and expenses – business‐type activities

Charges for services revenue for the business‐type funds decreased $2.8 million in 2009 from 2008. Wastewater revenues decreased significantly by $1.3 million due to a 71% drop in demand charges as construction activity declined. Overall expenses for business‐type activities increased by $4.5 million in 2009 from 2008. Solid waste expenses increased dramatically reflecting a GASB 49 required booking of an estimated pollution remediation liability of $4.5 million as a current year expense (see note V‐C). Other business‐type activities that experienced overall expense increases are wastewater at $960 thousand, water at $940 thousand, parking at $345 thousand, and surface and stormwater at $204 thousand. Much of these increases are due to contractually required labor and benefit costs. Development services expenses decreased $962 thousand as a result of staff cutbacks corresponding to the decrease in need for services as construction activity declined. Golf and cemetery expenses both decreased approximately $22 thousand. Medic one, which as an enterprise fund is shown separately from the governmental components of public safety, comprises 14% of business‐type activity expenses and 5% of total government‐wide expenses.

3-5


Charges for services

43%

Business tax15%

Sales & use tax13%

Grants & contributions

12%

Property tax11%

Other6%

Government-wide revenues 2009$149,031,597

Water, wastewater, ssw, solid

waste28%

Public safety26%Culture &

recreation11%

General govt10%

Other govt10%

Transport7%

Medic one5%

Other business

3%

Government-wide expenses 2009 $145,507,773

Fund level financial analysis

Governmental activities

Revenues

Fund balance in governmental funds decreased $9 million (including transfers) in 2009, to $52.6 million. Overall governmental revenues decreased 2.1% in 2009 while non‐capital and non‐debt related expenditures decreased 3.3%. The decrease in governmental fund balance is due to a number of factors including:

• Revenues coming in under budget, most notability the general fund (tax revenue of $1.6 million), street fund (tax revenue of $587 thousand), REET funds (tax revenue of $922 thousand), and the tourism fund (lodging tax of $108 thousand).

• REET funds expenditures exceed revenues by $879 thousand. • Greenways funds expenditures exceed revenues by $3.2 million.

Tax revenue is the most significant source of governmental revenue, representing 60% of total governmental revenue and 78.8% of general fund revenue. Tax revenue supports services such as fire, police and parks which are basic to the City’s mission; although they do not generate substantial revenue. The major tax categories are retail sales and use, business and occupation, property and utility tax. Tax collections overall in these major categories decreased 5.3% from 2008 to 2009:

• Sales tax revenue decreased 13.1% to $18.8 million. • Business and occupation tax decreased 10.7% to $10.8 million. • Property tax collections rose .2% to $16.7 million. • Utility tax collected from both private and City owned utilities increased 5.6% to $13.5 million.

3-6


Public safety32%

Capital outlay18%

General government

13%

Culture & recreation

13%

Physical environment

6%

Economic environment

6%

Transportation 5%

Other 4% Debt3%

Governmental activities expenditures 2009$114,126,414

Charges, fines, & permits

22%

Sales tax18%

Property tax16%

Grants14%

Utility tax13%

Business tax10%

Other7%

Governmental activities revenues 2009$105,121,375

Expenditures

Public safety consisting of fire, police and municipal court accounts for 32% of governmental expenditures. Capital accounts for 18% of governmental expenditures. General government type expenditures are typically overhead in nature, providing management, accounting, legal, personnel and technical services required by operating programs. They comprise 13% of governmental expenditures. Culture and recreation services include most parks and recreation programs, the museum and the library. They represent another 13% of governmental expenditures. Additionally, physical environment 6%, transportation 5%, economic environment 6%, other miscellaneous 4%, and finally debt service accounts for 3% of total governmental expenditures.

Business‐type activities

Net assets decreased by $1.1 million, for a total of $220.8 million in business‐type funds. Operating revenues decreased by 7%, and operating expenses increased by 10%.

The financial position of the City’s business‐type funds is largely influenced by the water and wastewater funds. Together they comprise 70% of operating revenues, 57% of expenses, and 84% of net assets.

Medic one and the cemetery are the only business‐type activities that require support from the general fund. In 2009, the cemetery received $221 thousand and medic one received $1 million cash operating subsidies. Additionally, Medic one receives a subsidy from Whatcom County and a portion of the voted EMS local sales tax (see note V‐D).

3-7


Charges for services

75%

Non-operating

14%

Rents, parking and concessions

5%

Other operating

3%

Capital contributions

3%

Business-type revenues 2009$53,153,177

Wastewater28%

Water26%

Medic one14%

Solid waste9%

Storm & surface

9%

Other business

funds8%

Non-operating

6%

Business-type expenses 2009$54,095,890

Financial analysis of City funds

At the end of 2009, the City has 38 governmental funds. Based on GASB criteria, four of these funds are classified as major funds. The general fund is the primary governmental fund. The street fund is responsible for maintenance of streets and engineering services. The 2004 PFD/Civic Field LTGO Bond fund accounts for the debt service of this bond. The HUD grant fund manages major federal grant activity.

The following comparisons do not include prior period adjustments in order to focus on current operations.

The general fund balance decreased $1.9 million in part to decreases in sales and business tax revenues due to the ongoing downturn in the local and national economy. The street, HUD, and 2004 PFD/Civic Field LTGO Bond funds are all relatively flat with minimal change from 2008.

The fund balance for non‐major governmental funds decreased by $7.1 million, largely due to spending increases of $3.3 million in the greenway levy funds, and $2.7 million in the capital maintenance fund.

The City has nine business‐type funds. The five major business‐type funds are water, wastewater, storm and surface water, solid waste and medic one. The water and wastewater funds continue their recent decline in the rate of growth of their assets with modest increases of $679 thousand in water and $643 thousand in wastewater from 2008. In 2009, storm and surface water assets increased $1.3 million, reflecting a similar increase experienced in 2008. The net assets of the solid waste fund decreased by $3.9 million in 2009 due to the GASB 49 required booking of an estimated pollution remediation liability of $4.5 million for future environmental remediation expenses (see note V‐C). The City has four non‐major enterprise funds; cemetery, golf, parking services, and development services. The net assets of the cemetery declined 14% reflecting an ongoing imbalance between revenues and costs. The golf and parking funds experienced modest increases in their net assets. Operating expenses of the parking fund increased by $349 thousand. Development services experienced significant increases in net assets of 49% due in large part to a decrease of $962 thousand in operating expenses from 2008.

3-8


The City has eight internal service funds: fleet, purchasing, facilities administration, telecommunications, claims & litigation, unemployment compensation, workers compensation, and health benefits. Facilities administration has a $824 thousand decrease in net assets resulting mainly from an increase in general operation expenses of $795 thousand. Claims & litigation experienced another decrease in net assets of $505 thousand; however, this is an improvement from the $891 decrease in net assets in 2008. The unemployment compensation fund increased its net assets by $371 thousand due to increased contributions in anticipation of greater future needs. All of the other internal service funds are relatively stable.

General fund budgetary highlights

For 2009, the adopted general fund budget for expenditures was $69.3 million, the final budget is $67.5 million and the actual expenditures are $60.9 million. Amendments to the budget are made for the following purposes:

• Supplemental appropriations approved after the beginning of the year to reflect actual beginning account balances and to correct the estimated amounts in the budget adopted December, 2008.

• Increases and decreases in appropriations to recognize actual program costs. • New appropriations to acknowledge unanticipated revenues and corresponding expenditures.

Actual revenues are $2.5 million below budget, or 96%, of the final projected budget. Most notable areas where 2009 actual revenues are less than budget include property tax of $343 thousand, retail sales tax of $584 thousand, interfund tax of $207 thousand, business tax of $835 thousand, inter‐governmental revenue of $514 thousand, charges for services of $181 thousand, and investment income of $348 thousand.

Actual expenditures are $6.6 million below budget, or 90% of the final budgeted amounts. See below for explanation.

The general fund balance of $13.8 million is greater than the general fund projected budgetary fund balance of $11.3 million due to the following factors:

• As declining revenues became apparent, department heads were instructed by the Mayor to find savings in their 2009 budgets. Capital projects were delayed, 13 vacant positions were eliminated and 50 other positions were either reduced or eliminated in order to achieve cost savings.

• Insurance recovery revenues of $120 thousand were not budgeted. • General fund expenditure re‐appropriations of $1.6 million from the 2009 budget to the 2010

budget.

Capital asset and debt administration

Capital assets

At December 31, 2009, the City has invested $521.6 million in a wide range of capital assets throughout governmental and business‐type activities, an increase of $23 million from the previous year.

More detailed information about capital assets is presented in note IV‐D.

3-9


The 2010 adopted capital budget includes $23.5 million for capital projects, primarily in parks, street, wastewater and water funds. The 2010 budget is amended to include $52 million of incomplete capital projects re‐appropriated from 2009.

Capital assets (net of depreciation, in thousands)

2009 2008 2009 2008 2009 2008 2009 ‐ 2008Land 119,642$ 112,613$ 34,423$ 31,850$ 154,065$ 144,463$ 6.6%Buildings 33,790 31,399 51,056 50,887 84,846 82,286 3.1%Improvements and infrastructu 114,509 110,252 113,624 111,542 228,133 221,794 2.9%Machinery and equipment 13,724 13,432 3,940 3,284 17,664 16,716 5.7%Construction in progress 26,223 23,440 10,641 9,863 36,864 33,303 10.7%

Total 307,888$ 291,136$ 213,684$ 207,426$ 521,572$ 498,562$ 4.6%

Governmental activities Business‐type activities TotalPercentage Change

Long‐term debt

At year end, the City has $66.5 million in long‐term liabilities, a decrease of $1.97 million from 2008.

More detailed information about long‐term liabilities is presented in note IV‐H.

The City’s revenue bond rating from Moody’s is ‘Aa2’ for all bonds. The City’s general obligation bond issue is ‘Aa2’ for non‐voted bonds and ‘Aa2’ for voted bonds.

Outstanding debt (in thousands)

PercentageChange

2009 2008 2009 2008 2009 2008 2009‐2008General obl igation bonds 19,717$ 21,543$ 7,860$ 8,265$ 27,577$ 29,808$ ‐7.5%Revenue bonds ‐ ‐ 23,651 26,415 23,651 26,415 ‐10.5%Specia l assessment bonds 286 514 ‐ ‐ 286 514 ‐44.4%Notes and settlements 153 160 ‐ 1,000 153 1,160 ‐86.8%Government loans 2,053 2,211 1,985 2,178 4,038 4,389 ‐8.0%Cla ims and l i tigation 1,110 991 ‐ ‐ 1,110 991 12.0%Compensated absences 4,569 4,590 490 576 5,059 5,166 ‐2.1%Pol lution remediation 106 ‐ 4,497 ‐ 4,603 ‐ 100.0%

Tota l 27,994$ 30,009$ 38,483$ 38,434$ 66,477$ 68,443$ ‐2.9%

TotalactivitiesactivitiesGovernmental Business‐type

State law limits the amount of general obligation debt the City can issue to a percentage of the total assessed value of the taxable property. The limits are:

• 1.5% non‐voted • 2.5% voted and non‐voted • 7.5% voted if excess over 2.5% is for utilities, parks or open space development

3-10


Calculation of legally available debt at December 31, 2009 (in thousands)

Total assessed property value 8,596,998$

Allowable general purpose indebtedness (legal l imit 2.5%) 214,925 Unvoted indebtedness incurred (less assets available) 26,874 Voted indebtedness incurred (less assets available) 562

Total debt incurred 27,436

Legally available debt capacity for general purpose 187,489$

Economic factors and the 2009 budget

The unemployment rate on December 31, 2009 in Whatcom County compares favorably with its benchmarks, especially considering the impact of 28,600 resident college students.

• Bellingham, WA Metropolitan Statistical Area 2009 rate is 8% • Bellingham, WA Metropolitan Statistical Area 2008 rate was 4.9% • Washington Statewide 2009 rate is 8.9% • National rate 2009 is 9.2%

The Seattle Metropolitan Statistical Area (MSA) is the closest proximity to Bellingham for inflation rate indication. In 2009, the Seattle MSA inflation rate is .6%, above the national rate of ‐.4%.

Over the last ten years net bonded debt per capita has increased from $147 to $358.

In a comparison of 2008 data conducted by the Washington State Auditor’s Office with ten other peer Washington State cities in the population range of 44,800 to 119,200, Bellingham’s per capita revenues for general and special revenue funds of $1,138, is above the overall average of $1,058.

The City’s assessed value per capita has increased from $107 thousand in 2008 to $113 thousand in 2009. The ratio of the number of City employees is 12 per one thousand of the City’s population.

The general fund adopted budget for 2010 has $74.8 million of resources available for appropriation. General fund adopted budget expenditures for 2010 are $64 million. The City continues to evolve and respond positively to the changing economic, social and environmental requirements impacting the community.

Contacting the City’s financial management

This financial report is designed to provide those with an interest in the City’s financial condition with a general overview of the City’s finances and to demonstrate accountability for the money it receives. Questions concerning any of the information contained herein or requests for additional information should be addressed to the Finance Director, City of Bellingham, 210 Lottie Street, Bellingham, WA 98225.

3-11

PublicGovernmental Business-type Public Facilities Development

Activities Activities Total District AuthorityASSETSCash and cash equivalents 11,894,882$ 5,774,194$ 17,669,076$ 350,991$ 6,091$ Investments 56,967,483 27,739,670 84,707,153 1,685,696 29,264 Receivables, net 2,376,331 2,386,015 4,762,346 16,358 212 Due from other governments 2,510,780 28,416 2,539,196 160,727 - Due from component units 11,455,000 - 11,455,000 - - Inventories 723,304 - 723,304 - - Prepaid items 1,238,073 8,282 1,246,355 - - Deferred charges 1,241,405 241,016 1,482,421 223,608 - Notes and contracts receivable 10,637,092 - 10,637,092 - - Net pension asset 6,386,373 - 6,386,373 - - Restricted assets:

Restricted cash and cash equivalents - 2,276,302 2,276,302 118,324 - Restricted investments - 10,935,537 10,935,537 568,440 -

Capital assets, not being depreciated:Land 119,642,365 34,423,026 154,065,391 1,329,860 - Construction in progress 26,223,424 10,641,292 36,864,716 14,518,024 -

Capital assets, net of depreciation:Buildings 33,790,454 51,055,628 84,846,082 1,436,959 - Improvements 114,509,495 113,623,806 228,133,301 8,679,935 - Machinery and equipment 13,723,725 3,940,433 17,664,158 - -

Total assets 413,320,186 263,073,617 676,393,803 29,088,922 35,567

LIABILITIESAccounts payable 2,295,659 1,795,798 4,091,457 48,703 30,127 Accrued wages and benefits 2 768 798 394 025 3 162 823

Primary Government Component Units

CITY OF BELLINGHAM

Statement of Net AssetsDecember 31, 2009

Government Wide

Accrued wages and benefits 2,768,798 394,025 3,162,823 - - Internal balances (603) 603 - - - Due to other governments 90,215 - 90,215 - - Other current liabilities 2,880,724 1,630,315 4,511,039 67,057 - Noncurrent liabilities (see note IV-H):

Due within one year 6,247,716 4,869,165 11,116,881 210,000 - Due in more than one year 21,459,693 33,613,506 55,073,199 21,203,116 - Special assessment bonds with

government commitment, net 286,110 - 286,110 - - Total liabilities 36,028,312 42,303,412 78,331,724 21,528,876 30,127

NET ASSETSInvested in capital assets, net of related debt 294,335,598 192,943,450 487,279,048 4,551,663 - Restricted for:

ExpendablePublic safety 3,138,386 - 3,138,386 - - Physical environment 1,437,418 237,980 1,675,398 - - Economic environment 48,126 - 48,126 - - Culture and recreation 7,450,778 - 7,450,778 - - Capital projects 15,787,755 8,449,337 24,237,092 - - Debt service 503,289 4,367,874 4,871,163 686,764 - Permanent 857,725 - 857,725 - -

NonexpendablePermanent 7,076,747 - 7,076,747 - -

Unrestricted 46,656,052 14,771,564 61,427,616 2,321,619 5,440 Total net assets 377,291,874$ 220,770,205$ 598,062,079$ 7,560,046$ 5,440$

4-2The notes to the financial statements are an integral part of this statement

Func

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2004PFD/Civic Other Total

HUD Grant Fld LTGO Governmental Governmental General Street Fund Bond Funds Funds

ASSETS Cash and cash equivalents 2,904,906$ 1,895,652$ -$ -$ 4,435,223$ 9,235,781$ Investments 13,778,959 9,106,856 - - 21,307,151 44,192,966 Receivables, net 1,691,120 91 - - 224,631 1,915,842 Due from other funds 497,908 603 - - - 498,511 Due from other governments 636,135 485,160 672,236 - 717,249 2,510,780 Due from component units - - - 8,655,000 2,800,000 11,455,000 Prepaid items 1,062,649 2,000 - - - 1,064,649 Special assessments - deferred - - - - 1,241,405 1,241,405 Notes and contracts receivable - - 10,637,092 - - 10,637,092

Total assets 20,571,677 11,490,362 11,309,328 8,655,000 30,725,659 82,752,026

LIABILITIES AND FUND BALANCESLIABILITIESAccounts payable 733,053 438,312 123,755 - 771,488 2,066,608 Accrued wages and benefits 2,180,292 304,424 - - 154,281 2,638,997 Due to other funds - - 497,908 - - 497,908 Interfund loans payable 2,073,534 - - - - 2,073,534 Other liabilities 154,631 384,577 2,447 - 143,072 684,727 Deferred revenue 1,580,230 - 10,637,092 8,655,000 1,354,799 22,227,121

Total liabilities 6,721,740 1,127,313 11,261,202 8,655,000 2,423,640 30,188,895

CITY OF BELLINGHAMBalance Sheet

December 31, 2009Governmental Funds

FUND BALANCESReserved for:

Prepaid items 1,062,649 2,000 - - - 1,064,649 Permanent funds - - - - 7,076,747 7,076,747 Debt service funds - - - - 587,923 587,923

Unreserved reported in:General fund 12,787,288 - - - - 12,787,288 Special revenue funds - 10,361,049 48,126 - 19,779,624 30,188,799 Permanent funds - - - - 857,725 857,725

Total fund balances 13,849,937 10,363,049 48,126 - 28,302,019 52,563,131 Total liabilities and fund balances 20,571,677$ 11,490,362$ 11,309,328$ 8,655,000$ 30,725,659$ 82,752,026$


Total fund balances of governmental funds 52,563,131$

Amounts reported for governmental activities in the government-wide statementof net assets due to the following:

Capital assets used in governmental activities are not financial resourcesand therefore not reported as assets in the funds. 293,913,584

Long-term assets not available to pay for current period expendituresand therefore deferred in the funds. 22,227,121

Pre-paid bond issuance cost not shown in modified accrual governmental funds. 122,424

Net pension asset not shown in modified accrual governmental funds. 6,386,373

Internal service funds are used to charge the cost of services to other funds.Assets and liabilities of internal service funds are included in governmentalactivities in the statement of net assets. 28,486,429

Interest income from investments not shown in modified accrual governmental funds. 320,698

December 31, 2009to the Statement of Net Assets

CITY OF BELLINGHAMReconciliation of the Balance Sheet

of Governmental Funds

Accounts receivable income not shown in modified accrual governmental funds. 47,088

Accrued interest payable on governmental activities long-term debt. (84,634)

Long-term liabilities that are not due and payable in the current period arenot reported in the funds. (26,690,340)

Net assets of governmental activities 377,291,874$


2004PFD/Civic Other Total

HUD Grant Fld LTGO Governmental GovernmentalGeneral Street Fund Bond Funds Funds

REVENUESTaxes 48,691,141$ 7,125,595$ -$ -$ 7,234,492$ 63,051,228$ Licenses and permits 923,157 43,780 - - 966,937 Intergovernmental revenue 2,730,154 7,348,643 2,743,842 590,662 4,212,090 17,625,391 Charges for services 6,179,225 7,135,813 216,353 - 2,439,948 15,971,339 Fines and forfeits 1,245,620 - - - - 1,245,620 Investment income 503,934 216,236 63,657 - 632,883 1,416,710 Miscellaneous revenues 507,011 97,899 2,841 - 913,099 1,520,850

Total revenues 60,780,242 21,967,966 3,026,693 590,662 15,432,512 101,798,075

EXPENDITURESCurrent:

General government services 11,466,007 3,256,807 - - 784,518 15,507,332 Public safety 32,390,844 - - - 4,184,259 36,575,103 Physical environment 349,346 5,106,910 - - 1,934,772 7,391,028 Transportation - 5,767,047 - - - 5,767,047 Economic environment 3,545,463 - 2,379,391 - 14,763 5,939,617 Mental and physical health 47,087 - - - 47,087 Cultural and recreation 12,681,056 - - - 2,333,983 15,015,039

Debt service:Redemption of general long-term debt - - - 625,000 1,594,918 2,219,918 Interest and other debt service cost 103,322 - - 617,490 370,930 1,091,742

Capital outlay 302,227 7,525,031 668,290 - 12,025,517 20,521,065

CITY OF BELLINGHAMStatement of Revenues, Expenditures and Changes in Fund Balances

Governmental FundsFor the Year Ended December 31, 2009

Total expenditures 60,885,352 21,655,795 3,047,681 1,242,490 23,243,660 110,074,978 Excess (deficiency) of revenuesover (under) expenditures (105,110) 312,171 (20,988) (651,828) (7,811,148) (8,276,903)

OTHER FINANCING SOURCES (USES)Insurance recoveries 119,800 - - - - 119,800 Transfers in 885,529 - - 651,828 1,666,143 3,203,500 Transfers out (2,801,398) (261,537) - - (988,501) (4,051,436)

Total other financing sources and (uses) (1,796,069) (261,537) - 651,828 677,642 (728,136) Net change in fund balances (1,901,179) 50,634 (20,988) - (7,133,506) (9,005,039)

Fund balances - beginning 15,751,116 10,312,415 69,114 - 35,435,525 61,568,170 Fund balances - ending 13,849,937$ 10,363,049$ 48,126$ -$ 28,302,019$ 52,563,131$


Net change in fund balances of total governmental funds (9,005,039)$

Amounts reported for governmental activities in the government-wide statementof activities due to the following:

Governmental funds report capital outlays as expenditures. However, in thestatement of activities the cost of those assets are allocated over their estimated useful lives and reported as depreciation expense. This is theamount by which capital outlays of $20,521,065 exceeded depreciation of($6,135,562) in the current period. 14,385,503 Donated assets 1,765,900

Current year retirements and abandonments (135,081)

Current year amortization charges 242

Revenues in the statement of activities that do not provide current financialresources are not reported as revenues in the funds. (4,043,371)

Repayment of bond principal is an expenditure in the governmental funds,

For the Year Ended December 31, 2009

CITY OF BELLINGHAMReconciliation of the Statement of Revenues, Expenditures

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities

p y p p p g ,but the repayment reduces long-term liabilities in the statement of netassets. 2,219,915

Some expenses reported in the statement of activities do not require the useof current financial resources and therefore are not reported as expenditures in governmental funds. (92,124)

Internal service funds are used by management to charge costs of certainactivities, such as fleet, warehouse, facilities, telecommunications, etc. to individual funds. The net revenue (expense) of these funds is reported with governmental activities. (629,408)

Change in net assets of governmental activities 4,466,537$


Variance withActual Final Budget -

Amounts PositiveOriginal Final GAAP Basis (Negative)

REVENUESTaxes:

Property 12,296,000$ 12,296,000$ 11,953,381$ (342,619)$ Retail sales and use 12,858,750 11,574,871 10,990,907 (583,964) Interfund 4,101,500 4,101,500 3,894,999 (206,501) Business 21,652,381 21,652,381 20,817,581 (834,800) Other 642,000 642,000 1,034,273 392,273

Licenses and permits 886,008 886,008 923,157 37,149 Intergovernmental revenue 1,692,846 3,243,715 2,730,154 (513,561) Charges for services 6,362,580 6,360,680 6,179,225 (181,455) Fines and forfeits 1,213,235 1,215,135 1,245,620 30,485 Investment income 851,652 851,652 503,934 (347,718) Miscellaneous revenue 488,980 488,980 507,011 18,031 Total revenues 63,045,932 63,312,922 60,780,242 (2,532,680) EXPENDITURES

Office of the mayor 2,147,152 2,136,752 1,375,719 761,033 City council 461,742 459,742 421,007 38,735 Hearing examiner 197,433 197,433 184,200 13,233 Museum 1,759,637 1,754,266 1,560,708 193,558 Library 7 046 169 3 939 790 3 785 728 154 062

CITY OF BELLINGHAM

Budgeted Amounts


Budget and Actual GAAP BasisStatement of Revenues, Expenditures and Changes in Fund Balance

General Fund

Library 7,046,169 3,939,790 3,785,728 154,062 Finance 2,033,231 1,996,908 1,863,497 133,411 Human resources 1,511,937 1,503,258 1,177,415 325,843 Information technology services 2,588,920 2,588,920 2,349,773 239,147 Legal 1,544,346 1,544,346 1,272,847 271,499 Judicial and support services 3,160,832 3,160,832 2,835,489 325,343 Parks and recreation 7,932,648 7,862,593 7,334,621 527,972 Planning and community development 3,119,176 4,276,147 3,410,551 865,596 Fire 14,387,559 14,576,890 13,289,977 1,286,913 Police 20,468,957 20,774,923 19,603,023 1,171,900 Non departmental 891,327 741,327 420,797 320,530

Total expenditures 69,251,066 67,514,127 60,885,352 6,628,775 Excess of revenues over (under) expenditures (6,205,134) (4,201,205) (105,110) 4,096,095 OTHER FINANCING SOURCES (USES)Face amount of general long-term debt 3,000,000 - - - Insurance recoveries - - 119,800 119,800 Transfers in 1,196,290 1,213,730 885,529 (328,201) Transfers out (2,942,247) (3,052,247) (2,801,398) 250,849

Total other financing sources (uses) 1,254,043 (1,838,517) (1,796,069) 42,448 Net change in fund balances (4,951,091) (6,039,722) (1,901,179) 4,138,543

Fund balance - beginning 12,689,183 17,326,870 15,751,116 (1,575,754) Fund balance - ending 7,738,092$ 11,287,148$ 13,849,937$ 2,562,789$


Variance with Actual Final Budget -


REVENUESTaxes 8,114,799$ 7,712,762$ 7,125,595$ (587,167)$ Licenses and permits 53,000 53,000 43,780 (9,220) Intergovernmental revenue 8,869,797 26,472,759 7,348,643 (19,124,116) Charges for services 7,127,954 7,249,954 7,135,813 (114,141) Investment income 500,720 500,720 216,236 (284,484) Miscellaneous revenues 49,790 49,790 97,899 48,109

Total revenues 24,716,060 42,038,985 21,967,966 (20,071,019)


General government 3,539,191 3,584,375 3,256,807 327,568 Physical environment 5,770,228 6,508,016 5,106,910 1,401,106 Transportation 6,547,404 6,642,462 5,767,047 875,415

Capital outlay 9,500,000 33,861,211 7,525,031 26,336,180 Total expenditures 25,356,823 50,596,064 21,655,795 28,940,269

Excess (deficiency) of revenues Over (under) expenditures (640,763) (8,557,079) 312,171 8,869,250

Budgeted Amounts

Budget and Actual GAAP BasisStatement of Revenues, Expenditures and Changes in Fund Balance

CITY OF BELLINGHAM

For the Year Ended December 31, 2009Street Fund

OTHER FINANCING SOURCES (USES)Transfers out (265,490) (265,490) (261,537) 3,953

Total other financing sources (uses) (265,490) (265,490) (261,537) 3,953 Net change in fund balances (906,253) (8,822,569) 50,634 8,873,203

Fund balance - beginning 2,086,883 10,151,432 10,312,415 160,983 Fund balance - ending 1,180,630$ 1,328,863$ 10,363,049$ 9,034,186$




REVENUESIntergovernmental revenue 1,454,000$ 3,777,481$ 2,743,842$ (1,033,639)$ Charges for services 192,681 188,484 216,353 27,869 Investment income 84,777 72,720 63,657 (9,063) Miscellaneous revenues 2,500 2,500 2,841 341

Total revenues 1,733,958 4,041,185 3,026,693 (1,014,492)


Economic environment 1,733,958 3,386,033 2,379,391 1,006,642 Capital outlay - 665,508 668,290 (2,782)

Total expenditures 1,733,958 4,051,541 3,047,681 1,003,860 Excess (deficiency) of revenues Over (under) expenditures - (10,356) (20,988) (10,632)

OTHER FINANCING SOURCES (USES)Total other financing sources (uses) - - - -

Net change in fund balances - (10,356) (20,988) (10,632) Fund balance - beginning 302,214 59,558 69,114 9,556

Budgeted Amounts


CITY OF BELLINGHAMStatement of Revenues, Expenditures and Changes in Fund Balance

Budget and Actual GAAP BasisHUD Grant Fund

Fund balance - beginning 302,214 59,558 69,114 9,556 Fund balance - ending 302,214$ 49,202$ 48,126$ (1,076)$




REVENUESIntergovernmental revenue 590,736$ 590,736$ 590,662$ (74)$

Total revenues 590,736 590,736 590,662 (74)

EXPENDITURESDebt service:

Redemption of general long-term debt 625,000 625,000 625,000 - Interest and other debt service cost 617,613 617,613 617,490 123 Total expenditures 1,242,613 1,242,613 1,242,490 123

Excess (deficiency) of revenues over (under) expenditures (651,877) (651,877) (651,828) 49

OTHER FINANCING SOURCES (USES)Transfers in 651,877 651,877 651,828 (49) Transfers out - - - -

Total other financing sources (uses) 651,877 651,877 651,828 (49) Net change in fund balances - - - -

Budgeted Fund Amounts

CITY OF BELLINGHAMSchedule of Revenues, Expenditures and Changes in Fund Balances

Budget and Actual GAAP Basis2004 PFD/Civic Fld LTGO Bond


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84,8

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t

4-14

of 2 GovernmentalOther Activities

Storm and Business-type InternalWater Wastewater Surface Water Solid Waste Medic One Activities Total Service Funds

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 14,599,431$ 14,988,940$ 4,645,874$ (74,237)$ 3,682,576$ 4,972,863$ 42,815,447$ 547,465$ Receipts from interfund services provided 582,975 720,614 256,750 34,046 - - 1,594,385 20,627,368 Payments for merchandise - - - - - - - (1,022,434) Payments for wages (1,757,084) (2,073,615) (883,497) (102,725) (3,739,169) (1,490,400) (10,046,490) (1,969,410) Payments for operating expenses (10,007,257) (9,902,294) (3,261,114) (413,610) (3,782,024) (2,616,352) (29,982,651) (16,964,667)

Net cash provided (used) by operating activities 3,418,065 3,733,645 758,013 (556,526) (3,838,617) 866,111 4,380,691 1,218,322

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESTransfers in 66,715 - - - 1,026,110 271,480 1,364,305 - Transfers out (7,968) - - - - (637,293) (645,261) - Payments for interest - - - - - (8,179) (8,179) - Principal paid on interfund loans - - - - - (77,472) (77,472) - Payments to other governmental units - 140 - - - - 140 - Receipts from other governmental units - 1,860 - 116,045 2,502,629 - 2,620,534 - Receipts for taxes - - - 1,186,561 - - 1,186,561 -

Net cash provided (used) by noncapital financing activities 58,747 2,000 - 1,302,606 3,528,739 (451,464) 4,440,628 -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESPrincipal payment on bonds (815,000) (1,960,000) - (300,000) - (110,000) (3,185,000) - Payments for interest (828,752) (263,322) - (397,514) - (18,140) (1,507,728) - Principal payments on notes (1,000,000) - - - - - (1,000,000) - Purchases of capital assets (5,288,678) (5,115,690) (391,526) - (214,902) - (11,010,796) (2,637,170) Proceeds from the sale of capital assets - - - - 15,000 - 15,000 403,743 Principal paid on loans (169,326) (23,447) - - - - (192,773) -

Net cash provided (used) by capital financing activities (8,101,756) (7,362,459) (391,526) (697,514) (199,902) (128,140) (16,881,297) (2,233,427)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales and maturity of investments 12,242,767 12,614,940 2,130,287 4,257,070 1,171,894 1,458,595 33,875,553 9,702,887 Purchase of investments (8 388 805) (9 607 189) (2 445 827) (4 318 575) (753 847) (1 699 037) (27 213 280) (8 988 616)

Business-type Activities - Enterprise Funds

CITY OF BELLINGHAMStatement of Cash Flows

Proprietary FundsFor the Year Ended December 31, 2009

Purchase of investments (8,388,805) (9,607,189) (2,445,827) (4,318,575) (753,847) (1,699,037) (27,213,280) (8,988,616) Interest and dividends received 539,767 596,771 129,876 246,726 58,586 83,211 1,654,937 496,133 Receipts of principal loan payments - - - - - - - 146,025 Net cash provided (used) in investment activities 4,393,729 3,604,522 (185,664) 185,221 476,633 (157,231) 8,317,210 1,356,429

Net increase (decrease) in cash and equivalents (231,215) (22,292) 180,823 233,787 (33,147) 129,276 257,232 341,324 Cash and cash equivalents - beginning of year 2,712,872 2,864,384 542,726 1,043,775 256,158 373,349 7,793,264 2,317,777 Cash and cash equivalents - end of year 2,481,657 2,842,092 723,549 1,277,562 223,011 502,625 8,050,496 2,659,101

Cash at end of year consists ofCash and cash equivalents 935,236 2,196,037 723,549 1,267,520 223,011 428,841 5,774,194 2,659,101 Restricted cash 1,546,421 646,055 - 10,042 - 73,784 2,276,302 - Total cash at end of year 2,481,657$ 2,842,092$ 723,549$ 1,277,562$ 223,011$ 502,625$ 8,050,496$ 2,659,101$

4-16

of 2 GovernmentalOther Activities

Storm and Business-type InternalWater Wastewater Surface Water Solid Waste Medic One Activities Total Service Funds

Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating income (loss) 929,176$ 644,836$ 3,560$ (4,926,709)$ (4,086,563)$ 827,126$ (6,608,574)$ (615,427)$ Adjustments to reconcile operating income to net cash provided (used) by operating activities:Depreciation 2,176,358 2,497,646 623,127 21,374 160,630 177,727 5,656,862 1,413,743 Other non-operating receipts (payments) 109,212 172,300 177,997 (147,235) - 5,535 317,809 316,099 Accumulated long-term leave liability (3,330) (5,072) (5,004) - 4,127 (9,279) (5,100) Change in assets and liabilities:

(Increase) decrease in accounts receivable other (69,610) (99,658) (37,366) - 87,458 (21,462) (140,638) - (Increase) decrease in due from other funds - - 20,661 - - - 20,661 - (Increase) decrease in due from other governmental units - - - - - - - 73,602 (Increase) decrease in inventory of supplies - - - - - - - (800) Increase (decrease) in accounts payable 127,872 555,516 (13,197) 350 (142) (52,885) 617,514 (77,084) Increase (decrease) in revenues collected in advance 44,086 904 - - - (22,975) 22,015 - Increase (decrease) in due to other funds - - - - - (81) (81) - Increase (decrease) in other accrued liabilities (12,896) (36,258) - (399) - - (49,553) - Increase (decrease) in other fees and taxes 3,801 4,385 (185) - - (846) 7,155 - Increase (decrease) in other current liabilities 113,396 (954) (11,580) (500) - (50,155) 50,207 113,289 Increase (decrease) in other liabilities - - - 4,496,593 - - 4,496,593 -

Net cash provided (used) by operating activities 3,418,065$ 3,733,645$ 758,013$ (556,526)$ (3,838,617)$ 866,111$ 4,380,691$ 1,218,322$

Non-cash investing, capital, and financing activities:Net change in fair value of investments (241,692) (250,937) (43,999) (86,803) (23,038) (30,174) (676,643) (196,163) Contributions from developers 296,579 263,885 1,108,248 - - - 1,668,712 - Fleet donations - - - - - - - 128,892

Business-type Activities Enterprise Funds

CITY OF BELLINGHAMStatement of Cash Flows

Proprietary FundsFor the Year Ended December 31, 2009

4-17

Pension Trust AgencyFunds Funds

ASSETSCash and cash equivalents 1,697,483$ 146,373$ Investments:

Government securities 8,154,838 - Receivables, net 103,495 - Interfund receivables 2,153,958 -

Total assets 12,109,774 146,373

LIABILITIESAccounts payable 22,703 32,843 Accrued wages and benefits 65,957 - Other liabilities 44,888 113,530

Total liabilities 133,548 146,373

NET ASSETSHeld in trust for pension and other post

employment long-term care benefits 11,976,226$ -$

CITY OF BELLINGHAMStatement of Net Assets

Fiduciary FundsDecember 31, 2009

4-18

Pension TrustFunds

ADDITIONSContributions:

Taxes 1,908,170$ Unclaimed property - auction 17,559 Employer 1,032,399 Total contributions 2,958,128

Investment income:Interest 385,579 Net appreciation (depreciation) in fair value (107,916) Total investment income 277,663 Total additions 3,235,791

DEDUCTIONSBenefits 2,699,793 Administration expense 25,899

Total deductions 2,725,692

CHANGE IN NET ASSETSPension Benefits 426 523

CITY OF BELLINGHAMStatement of Changes in Net Assets

Fiduciary FundsFor the Year Ended December 31, 2009

Pension Benefits 426,523 Long-term care benefits 83,576

Net assets pension benefits - beginning 7,977,776 Net assets long-term care benefits - beginning 3,488,351

Net assets pension benefits - ending 8,404,299$

Net assets long-term care benefits - ending 3,571,927$

4-19


Notes to the Basic Financial Statements December 31, 2009 Index to the Notes

NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4‐22I‐A Reporting entity 4‐22I‐B Government‐wide and fund financial statements 4‐23I‐C Measurement focus, basis of accounting and financial statement presentation 4‐24I‐D Assets, liabilities and net assets or equity 4‐25 NOTE II. RECONCILIATION OF GOVERNMENT‐WIDE AND FUND FINANCIAL STATEMENTS 4‐20II‐A Explanation of certain differences between the governmental fund balance sheet and the

government‐wide statement of net assets 4‐29 II‐B Explanation of certain differences between the governmental fund statement of revenues,

expenditures and changes in fund balances and the government‐wide statement of activities 4‐29 NOTE III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY 4‐30III‐A Budgetary information 4‐30III‐B Deficit fund equity 4‐30III‐C Excess of expenditures over appropriations 4‐31 NOTE IV. DETAILED NOTES ON ALL FUNDS 4‐31IV‐A Deposits and investments 4‐31IV‐B Receivables 4‐33IV‐C Property taxes 4‐34IV‐D Capital assets 4‐36IV‐E Interfund receivables, payables and transfers 4‐38IV‐F Operating leases 4‐40IV‐G Significant construction commitments 4‐40IV‐H Long‐term debt 4‐40IV‐I Segment information 4‐50 NOTE V. OTHER INFORMATION 4‐51V‐A Risk management 4‐51V‐B Contingencies 4‐53V‐C GASB 49 pollution remediation obligations 4‐54V‐D Interlocal agreements 4‐55V‐E Post employment benefits other than pension benefit 4‐56V‐F Other post employment benefits (OPEB) 4‐63V‐G Endowments 4‐68V‐H Restricted assets 4‐69V‐I Closed funds 4‐69V‐J Prior period adjustments 4‐69V‐K Accounting and reporting changes 4‐69

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NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the City of Bellingham have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. Significant accounting policies and their application in Bellingham are described below.

I‐A Reporting entity

The City of Bellingham was incorporated on July 29, 1904. It operates under the laws of the State of Washington applicable to a first class, home rule, Charter City with a mayor‐council form of government.

The City is a general‐purpose government and provides public safety, fire prevention, street improvement, parks and recreation, judicial administration, planning, economic development and general administrative services. The City owns and operates water and sewer utilities, a golf course (currently operated by lessee), a museum, three libraries, a parking enterprise, a cemetery and an aquatic facility. The City operates an ambulance service (medic one), police and fire dispatch centers that are jointly funded by local entities. The City’s financial statements include all of these operations that are controlled by or are dependent on the City.

For financial reporting purposes, in conformance with GASB 14, the City of Bellingham considered for inclusion all governmental activities, organizations and functions for which the City is financially accountable. Relevant criteria for including an organization as a component unit within the City's reporting entity, as set forth in Section 2100 of GASB's Codification of Governmental Accounting and Financial Reporting Standards, include whether or not:

• The City appoints a voting majority of the organization’s governing body and is able to impose its will on that organization

• There is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the City

• The organization is fiscally dependent on the City

The accompanying financial statements present the City and its component units, entities for which the City is considered financially accountable. The discretely presented component units are reported in separate columns in the government‐wide financial statements to emphasize that they are legally separate from the City.

Discretely presented component units

The Bellingham‐Whatcom Public Facilities District (PFD), established in 2002, is a separate Washington municipal corporation and an independent taxing authority created under RCW 35.57, Bellingham Municipal Code Chapter 2.94 and Whatcom County Code Chapter 1.17. The PFD was created in order to receive a state sales tax rebate for the purpose of creating a regional center. The City, through an interlocal agreement with the PFD, provides administrative services and financial management. Separately issued financial statements can be obtained from the City of Bellingham at 210 Lottie, Bellingham, WA 98225.

The Bellingham Public Development Authority (BPDA), established in 2008, is a separate Washington municipal corporation under RCW 35.21.730 through 35.21.755. The BPDA was created to undertake redevelopment projects throughout the City with a special focus on the City’s downtown, Old Town, and waterfront areas. The BPDA is expected to work in partnership with other public entities, nonprofits, and the private sector on these projects. The City, through an interlocal agreement with the BPDA, provides administrative services and financial management. Separately issued financial statements can be obtained from the City of Bellingham at 210 Lottie, Bellingham, WA 98225.

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I‐B Government‐wide and fund financial statements

The government‐wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business‐type activities, which rely to a significant extent on fees and charges for support. Fiduciary funds are not resources that are available to the City and are not included in the government‐wide statements.

The statement of activities shows the degree that the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental, proprietary and fiduciary funds, even though the latter are excluded from the government‐wide financial statement. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

The government reports the following major governmental funds:

The general fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The street fund is responsible for maintenance of all City streets. This fund’s revenues are derived from state sales tax, grants and interfund payments for administrative and engineering services.

The HUD block grant fund accounts for federal block grant revenue used to upgrade neighborhoods and expand affordable housing choices, assist community social service agencies, address human needs and create employment opportunities for individuals with low and moderate incomes, and home investment partnership program revenue used to expand the supply of affordable housing.

The 2004 PFD/Civic Field LTGO bond fund accounts for the resources accumulated and payments made for principal, interest and related costs on long‐term general obligation debt of the 2004 LTGO improvement and refunding bond. The bond financed a portion of the cost of development of a regional center, improvements to the City‐owned civic field complex and the refunding of the 1996 aquatic facility bonds.

The government reports the following major proprietary funds:

The water and wastewater funds account for the activities of the City’s two largest utilities. Their revenues are received from the sales of materials, supplies and services. Expenses are for maintenance and extension of water and sewer service systems. These funds also reflect the accounting of revenue bonds outstanding, the funds available for redemption of bonds, cumulative reserve and construction funds.

The surface and storm water fund accounts for the activities of the utility. The primary source of revenue is a service charge for impervious surface runoff. Expenses are for construction, improvements and maintenance of the City’s storm water facilities, updates of the storm water master plan and acquisition of additional wetland and open space.

The solid waste fund accounts for litter compliance expenses and the operations of the Clean Green site where City and County residents bring grass, shrub and tree trimmings. This fund also accounts for remediation costs of cleaning up several landfill sites. The City has issued two general obligation bonds for the City’s share of remediation costs to be repaid primarily by net revenues from the solid waste fund. These revenues are generated principally by tax revenues paid by the City’s garbage contractor.

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The medic one fund accounts for countywide ambulance service governed by an interlocal agreement between the City and Whatcom County. Revenues are generated by fees for service and are supplemented by a voter approved sales tax and by contributions from the City and County.

Additionally, the government reports the following fund types:

Special revenue funds account for revenues derived from specific taxes, grants or other sources. They are legally restricted to financing specific activities of the City.

Debt service funds account for the resources accumulated and payments made for principal and interest and related costs on long‐term general obligation debt of governmental funds.

Capital projects funds account for financial resources that are designated for the acquisition or construction of general government capital improvements.

Permanent funds account for resources that are restricted to the extent that only earnings, not principal, may be used in support of an established purpose. Activities of the fund must benefit the government or its citizenry.

Enterprise funds account for activities that operate in a manner similar to private business enterprises where the intent is to provide goods or services to the general public and be reimbursed primarily through user charges.

Internal service funds account for fleet administration, purchasing and materials, facilities administration, telecommunications, claims and litigation and employee benefits. These funds provide services to other departments or agencies of the government, or to other governments, on a cost reimbursement basis. Because these services benefit governmental operations more than business‐type functions, they have been included within governmental activities in the government‐wide financial statements.

Pension trust funds account for the activities of the police pension funds and the firefighter’s pension funds, which accumulate resources for pension benefit payments and post‐employment health care benefits. They are accounted for in essentially the same manner as enterprise funds because of the need for determining periodic income of the trust.

Agency funds are custodial in nature and represent assets held in a trustee or agency capacity for others. These funds do not report results of operation. Agency funds consist of the guaranty deposit and school impact fee funds.

I‐C Measurement focus, basis of accounting and financial statement presentation

Basis of accounting refers to the point at which revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied.

The government‐wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and trust fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Agency funds report only assets and liabilities and have no measurement focus. They do, however, use the accrual basis of accounting to recognize receivables and payables.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers all revenues except

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for grant revenues to be available if they are collected within 60 days of the end of the current fiscal period. Grant revenues are considered available if they can be collected with 90 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is made. Certain indirect costs have been included as part of the program expenses reported for the various functional activities.

Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered measurable and available only when cash is received by the City.

Private‐sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government‐wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private‐sector guidance for their business‐type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private‐sector guidance.

As a general rule the effect of interfund activity has been eliminated from the government‐wide financial statements. Exceptions to this general rule include charge back of services, such as utilities or vehicle maintenance and charges for central administration. The City allocates indirect cost charges as reimbursement for services provided by the general fund in support of those functions based on levels of service provided. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. These charges are included in direct program expenses. Internal service fund activity is also eliminated to avoid duplicate activity in making the transition from the fund level financial statements to the government‐wide financial statements.

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes, including those levied for specific programs.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of latecomers’ fees intended to recover the cost of connecting new customers to the existing system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s usual procedure to spend restricted funds first and then unrestricted funds.

I‐D Assets, liabilities and net assets or equity

Deposits and investments

The City’s cash and cash equivalents are considered to be cash on hand, demand deposits and short‐term investments.

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Investments for the City as well as for its component units are reported at fair value, based on the fair market value at fiscal year‐end. The State Treasurer’s Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares. Investments are reported separately on the balance sheet. For purposes of the statement of cash flows, the City considers cash on hand and the state investment pools to be cash equivalents. Excess cash balances of all City funds are pooled and invested. The annual change in investment balances is shown net of “Proceeds from sales and maturity of investment securities” and “Purchase of investments” on the statement of cash flows.

Interest income is distributed monthly to the funds based on the average daily fund balance. Interest from the following funds is assigned to the general fund:

• Library gift • HUD grant funds • Special assessment (LID) funds • Guaranty deposit • Clearing funds

Receivables and payables

Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as “interfund loans receivable/interfund loans payable.” All other outstanding balances between funds are referred to as “due to/from other funds” in the basic and combining statements. Residual balances outstanding between the governmental activities and business‐type activities are reported in the government‐wide financial statements as “internal balances.”

Property tax is recorded as a receivable when levied, offset by deferred revenue. During the year, property tax revenues are recognized when received. There is no allowance for uncollectible taxes. The City considers delinquent taxes fully collectible.

Accounts receivable consist of amounts owed from private individuals or organizations for goods and services, including amounts owed for which billings have not been prepared. Receivables have been recorded net of an allowance for uncollectible amounts. Allowances for uncollectible amounts are calculated as either a write‐off of bad debt expense, or a write‐down for reduction in service charge due to contract limit.

Interest receivable consists of amounts earned, but not received, on investments and notes and contracts at the end of the year. Notes and contracts receivable consists of amounts owed on open accounts from private individuals or organizations for goods and services rendered.

Special assessments are recorded when levied. Special assessments receivable consists of current and delinquent assessments and related interest and penalties. Deferred assessments consist of unbilled special assessments that are liens against the property benefited.

Inventories and prepaid items

Inventories in governmental funds consist of expendable supplies held for consumption. The cost is recorded as an expenditure at the time individual inventory items are purchased.

Inventories in proprietary funds are valued on a cost basis using the weighted average method.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government‐wide and fund financial statements.

Capital assets

Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business‐type activity columns in the government‐wide financial statements.

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Assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.

Major outlays for capital and improvements are capitalized as projects are constructed. Street infrastructure assets are entered into the system on a “network” basis since these assets consist of several different components of road and street construction. The project plans maintained in the engineering division of public works provide details regarding these components.

Capital assets are defined by the City as assets with an estimated useful life in excess of one year and individual cost for each asset category as follows:

Asset category

Land

Fleet‐replacement equipment $5,000

Machinery and equipment $10,000

Network equipment $25,000

Land improvements, infrastructure,

buildings and improvements, intangibles,

improvements other than buildings,

capital leases, leasehold improvements $50,000

Asset threshold

capitalize all

All property, plant and equipment of governmental or business‐type activities are depreciated using the straight line method with the following estimated useful lives:

Asset category Useful life (years)

Buildings 50

Improvements other than buildings

Infrastructure 20‐40

Leasehold improvements 10

Other improvements 5‐50

Software 7

Machinery and equipment

Information technology equipment 4

Equipment 5‐20

The City has acquired certain assets with funding provided by federal financial assistance programs. Depending on the terms of the agreements involved, the federal government could retain an equity interest in these assets. These assets are identified in the asset system as partially grant funded for tracking purposes in the event of a sale or surplus of the item.

Compensated absences

It is the City’s policy to permit employees to accumulate earned but unused vacation. Vacation pay is earned at rates established in individual bargaining units’ agreements. Each employee may accumulate up to double their established annual accrual rate. All earned but unused vacation is payable upon termination of employment. Upon retiring, contractual limitations have been imposed on PERS employees to limit vacation payout to a

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maximum of 240 hours. Vacation liabilities are recorded at year‐end in full accrual funds and in the government‐wide statements.

There is no liability for unpaid accumulated sick leave. The City policy is not to pay accumulated sick leave when employees separate from service. Sick leave may accumulate to a maximum of 1040 hours. Effective January 1, 1997, an optional sick leave cash out program was established for employees with accumulated banks of at least 50% of the maximum. These employees have the option of cashing out 24 to 48 hours of sick leave accumulated and not used in the twelve months prior to December 15 of each year. Employee banks will be reduced by the number of hours cashed out. If an employee’s bank is at 960 hours or more, no reduction to their bank balance is made for cashed out hours.

Long‐term obligations

In government‐wide financial statements and proprietary fund types in the fund financial statements, long‐term debt and other long‐term obligations are reported as liabilities in the applicable governmental activities, business‐type activities or proprietary fund statements of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Restricted assets

Enterprise funds have accounts that contain resources for construction and debt services. Certain proceeds of the water and sewer funds’ revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net assets in compliance with applicable bond covenants. The amount of these restricted assets is reported in the long‐term debt note.

Fund equity

In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for a specific purpose.

Contribution of capital

Contributions of capital in proprietary fund financial statements arise from outside contributions of capital assets (e.g. developers), and grants or outside contributions of resources restricted to capital acquisition and construction.

Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

Comparative date/reclassifications

Comparative data for the prior year have been presented throughout the financial statements in order to provide an understanding of the changes in the financial position and results of operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year presentation.

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NOTE II. RECONCILIATION OF GOVERNMENT‐WIDE AND FUND FINANCIAL STATEMENTS

II‐A Explanation of certain differences between the governmental fund balance sheet and the government‐wide statement of net assets

The governmental fund balance sheet includes a reconciliation between total fund balances of governmental funds and net assets of governmental activities as reported in the government‐wide statement of net assets. One element of that reconciliation explains that “long‐term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.” The detail of this ($26,690,340) difference is as follows:

Bonds (net of unamortized premium/discount), notes payable, governmental loans (21,922,755)$ Special assessment bonds with governmental commitment (net of unamortized discount) (286,110) Gasb 49 pollution remediation l iabil ity (106,250) Compensated absences (4,375,225)

(26,690,340)$ Net adjustment to reduce total fund balance of governmental funds to arrive at net assets of governmental activities

II‐B Explanation of certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government‐wide statement of activities

The governmental fund statement of revenues, expenditures and changes in fund balance includes a reconciliation between net change in fund balances of governmental funds and changes in net assets of governmental activities as reported in the government‐wide statement of activities. One element of that reconciliation states that “Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.” The detail of this $(4,043,371) difference is as follows:

Accounts receivable* (7,050,587)$

Deferred property taxes 21,141

Deferred assessments 1,016,259

Deferred notes 1,341,714

Capital contribution treated as a transfer 499,121

Net pension obligation 360,981

Accrued investment interest (232,000)

(4,043,371)$ Net adjustment to increase net change in fund balances of governmental funds to arrive at change in net assets of governmental activities

*See note V‐K for a discussion on a change in accounting estimates with accounts receivable.

Another element of that reconciliation states that “Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The detail of this ($92,124) difference is as follows:

Compensated absences (106,884)$

Accrued interest on debt 14,760

(92,124)$ Net adjustment to reduce net change in fund balance of total governmental funds to arrive at change in net assets of governmental activities

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NOTE III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

III‐A Budgetary information

Annual appropriated budgets are adopted for the general, special revenue and debt service funds on a basis consistent with generally accepted accounting principles (GAAP). Budgets are not adopted for the special assessment debt sub‐funds of the debt service fund type. Capital project funds adopt budgets on an individual project basis. Proprietary and fiduciary funds are budgeted for management purposes only. National Council on Governmental Accounting Statement No. 1 does not require and the financial statements do not present, budgetary comparisons for proprietary or fiduciary fund types.

Annual appropriated budgets are adopted at the fund level. Legal budgetary control is established at the fund level, except for the general fund, which is at the department level. Subsidiary revenue and expenditure ledgers are used to compare the budgeted amounts with actual revenues and expenditures. As a management control device, the subsidiary ledgers monitor expenditures for individual functions and activities by object class. Appropriations for all funds lapse at year‐end.

The City’s budget procedures are mandated by RCW 35.33. On or before November 1, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council and estimates provided by City departments during the preceding months. They are balanced with revenue estimates made by the Budget Manager. Council conducts public hearings on the proposed budget on or before the first Monday in December. The Council makes its adjustments to the proposed budget and adopts by ordinance a final balanced budget no later than December 31. Within 30 days of adoption, the final budget is available to the public.

The Mayor is authorized to transfer budgeted amounts between accounts. However, any revisions that alter the total expenditures of a fund or department within the general fund, or affect the number of authorized employee positions, salary ranges, hours or other conditions of employment must be approved by the City Council. The City Council may determine that it is in the best interest of the City to increase or decrease the appropriation for a particular fund or department. It must do so by ordinance approved by a simple majority after first holding public meetings providing the public the opportunity to speak.

Encumbrances are committed amounts for goods and services ordered or contracted. Encumbrances do not constitute expenditures or liabilities. The City reappropriates current year encumbrances in the following year as an amendment to the budget. Encumbrances outstanding as of December 31, 2009 were reappropriated in the following year by Ordinance 2010‐03‐017.

Encumbrances outstanding as of December 31, 2009

Fund type Amount

General fund 819,666$

Special revenue funds 6,371,310

Endowment funds 4,275

Enterprise funds 7,093,832

Internal service funds 34,241

Total encumbrances 14,323,324$

III‐B Deficit fund equity

As of December 31, 2009 the solid waste fund had deficit net assets of $3,955,794. This deficit is due to 1) Issuing bonds in 2005 to finance the City’s share of the environmental clean up by the Port of Bellingham, WA, of the Cornwall Avenue and Central Waterfront landfill sites in the amount of $3.7 million and the Holly Street landfill site in the amount of $1.5 million. These remediation expenses did not increase assets. The deficit will be

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eliminated as the bonds payable liability is reduced. The utility tax received by the solid waste fund was increased from 7% to 11.5% effective May 1, 2005, in order to accommodate the debt service requirements for the projects funded from bond proceeds. 2) Per GASB 49 the City recorded a pollution remediation liability in 2009 in the amount of $4,496,594 in the solid waste fund (see note V‐C).

III‐C Excess of expenditures over appropriations

There has been no material violation of finance related legal or contractual provisions in any major City fund.

NOTE IV. DETAILED NOTES ON ALL FUNDS

IV‐A Deposits and investments

Deposits

The City’s deposits and certificates of deposit are entirely covered by the Federal Depository Insurance Commission (FDIC) or by collateral held in a multiple financial institution collateral pool administered by the Public Deposit Protection Commission (PDPC). The FDIC insures the City’s deposits up to $250,000; the PDPC covers amounts over $250,000. Numbers in section IV‐A are obtained from the year‐end GASB 31 report provided by the City’s securities custodian and primary banker, U.S. Bank.

Total deposits and investments at December 31, 2009

Classification CityPublic Facilities

District

Public Development Authority Total

Investments at fair value 103,797,528$ 2,254,136$ 29,264$ 106,080,928$ Petty cash 36,625 100 ‐ 36,725 Washington State Investment Pool 19,989,040 433,479 5,627 20,428,146 Cash in bank 1,763,569 35,736 464 1,799,769

Total deposits and Investments 125,586,762$ 2,723,451$ 35,355$ 128,345,568$

Component units

Investments

All municipal corporations in Washington State, including the City of Bellingham, are empowered by statute to invest in the following securities (the enabling legislation is contained in RCW 36.29.020, as amended and as limited by RCW 39.58.080, as amended, RCW’s 35.39.030, 39.59.020, 39.59.030, 39.60.010, 43.84.080 and 43.250):

• Investment deposits including certificates of deposit, with qualified public depositories as defined in Chapter 39.58 RCW.

• Certificates, notes, or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States (such as the Government National Mortgage Association).

• Obligations of government sponsored corporations which are eligible as collateral for advances to member banks, as determined by the Board of Governors of the Federal Reserve System. These include but are not limited to Federal Home Loan Bank notes and bonds, Federal National Mortgage Association notes, debentures and guaranteed certificates of participation.

• Bankers' acceptance purchased on the secondary market. • Repurchase agreements, if the transaction is structured so that the City of Bellingham obtains control over

the underlying securities.

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• Bonds of the State of Washington and any local government in the State of Washington, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency.

• General obligation bonds of a state other than the State of Washington and general obligation bonds of a local government of a state other than the State of Washington, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency.

• State Investment Pool. • Other investments authorized by law.

The City’s investments are in compliance with all applicable state investment laws and City investment policies.

The State Treasurer’s Office administers the Washington State Local Government Investment Pool (LGIP) authorized under Chapter 43.250 RCW. The LGIP operates in a manner consistent with the SEC Rule 2a‐7. It is a $8.7 billion dollar fund that invests money on behalf of over 600 cities, counties, colleges and special taxing districts. In its management of LGIP the State Treasurer adheres, at all times, to the principles appropriate for the prudent investment of public funds. In priority order, they are the safety of principal, the assurance of sufficient liquidity to meet cash flow demands and attainment of the highest possible yield within the constraints of the first two goals.

All investments are valued at fair value as of December 31, 2009. The fair value of the position in the LGIP is the same as the value of the pool shares. All of the City’s investments are defined as being insured or registered in the name of the City, or held by the City or by its agent in the City’s name.

The LGIP is reported on the balance sheet as cash and cash equivalents. Investments in the LGIP and other investments with a purchase life of less than one year are reported at cost. Management intends to hold securities, bonds and certificates of deposit until maturity.

Fair value at December 31, 2009

Investment Type City

Public Facilities District

Public Development Authority Total

Moody's rating

Federal Farm Credit Bank 15,114,453$ 328,235$ 4,261$ 15,446,949$ AaaFederal Home Loan Bank 36,333,046 789,033 10,244 37,132,323 AaaFederal Home Loan Mtg Corp. 18,622,796 404,425 5,250 19,032,471 AaaFederal National Mortgage Assn 12,348,661 268,172 3,482 12,620,315 AaaMunicipal Bonds 8,680,169 188,504 2,447 8,871,120 AaaBanker's Acceptances 4,870,604 105,773 1,373 4,977,750 AaaCertificate of Deposit 7,827,799 169,994 2,207 8,000,000 A1

Total Investments 103,797,528 2,254,136 29,264 106,080,928

Rule 2a‐7 l ike pools per GASB 31Washington State Investment Pool 19,989,040 433,479 5,627 20,428,146 Unrated

Total Investments and 2a‐7 l ike pools 123,786,568$ 2,687,615$ 34,891$ 126,509,074$

Interest rate risk ‐ To minimize risk of loss arising from interest rate fluctuations the City purchases a combination of short and longer term investments and staggers their maturities. City Investment Policy requires that unless matched to a specific cash flow (for Reserve and CIP funds); the City will not directly invest in securities maturing more than five years from the date of purchase. The City is in compliance with this policy. At year‐end, December 31, 2009 the overall average maturity for all of the City’s investments was 1.2847 years. The average maturity of the basic investment categories of the City are as follows:

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Average maturity of the basic investment categories

Bank CD's & Banker's Acceptances 0.16670U.S. Government Agencies 1.73019Municipal Bonds 1.68518Rule 2a-7 like pools per GASB 31 0.00274Weighted average maturity of all investments 1.28470

Average maturity in years

Credit risk ‐ Per the City’s Investment Policy, “Safety of principal is the foremost objective of the City of Bellingham. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses in individual securities do not exceed the income generated from the remainder of the portfolio.” The City’s policy further states, “Investments shall be made with judgment and care—under circumstances then prevailing—which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.” Per RCW 39.59.020, state law requires that the City only invest in bonds which at the time of purchase have one of the three highest credit ratings of a nationally recognized rating agency. Per RCW 39.59.030, state law requires that the City only invest in mutual funds with portfolios consisting of only United States government bonds or United States government bonds issued by federal agencies with average maturities of less than four years and possessing one of the four highest credit ratings of a nationally recognized rating agency. The City’s investments and deposit accounts are in compliance with its own investment policy and all applicable state laws including RCW 36.29.020, as amended, and as limited by RCW 39.58.080, as amended, RCW’s 35.39.030, 39.59.020, 39.59.030, 39.60.010, 43.84.808 and 43.250.

Concentration of credit risk ‐ Per the City’s Investment Policy the City is directed to “diversify its investments by security type and institution. With the exception of U.S. Treasury securities and the State Investment Pool, no more than 50% of the City’s total investment portfolio will be invested in a single security type or with a single financial institution.” The City is in compliance with this policy.

Custodial credit risk ‐ Custodial credit risk is the risk that in the event of a bank failure, the City will not be able to recover deposits or collateral securities that are in the possession of an outside party. For this reason per the City’s Investment Policy, “All security transactions, including collateral for repurchase agreements, entered into by the City of Bellingham shall be conducted on a delivery‐verses‐payment (DVP) basis. Securities will be held by a third party custodian designated by the Finance Director.” The City’s securities custodian is U.S. Bank Safe Keeping. The City is in compliance with its DVP and safe keeping policies.

IV‐B Receivables

Receivables as of year‐end for the City’s individual major and nonmajor funds, internal service and fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:

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Receivables as of December 31, 2009

2004 PFD / Nonmajor

HUD Civic Fld Storm & Solid and other

Receivables: General Street Grant LTGO Water surface water waste funds Total

Interest ‐$ ‐$ ‐$ ‐$ 86,516$ 99,081$ 25,224$ 44,538$ 7,775$ 169,402$ 432,536$

Taxes 308,371 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 157,712 466,083

Accounts 14,796,596 91 ‐ ‐ 602,875 641,714 289,666 ‐ 699,016 154,309 17,184,267

Special assmts ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 111,237 111,237

Due from other

governments 636,135 485,160 672,236 ‐ ‐ 422 27,994 ‐ ‐ 717,249 2,539,196

Due from

component units ‐ ‐ ‐ 8,655,000 ‐ ‐ ‐ ‐ ‐ 2,800,000 11,455,000

Gross receivables 15,741,102 485,251 672,236 8,655,000 689,391 741,217 342,884 44,538 706,791 4,109,909 32,188,319

Less: allowance for

uncollectibles (13,413,847) ‐ ‐ ‐ ‐ ‐ ‐ ‐ (282,221) ‐ (13,696,068)

Net total receivables 2,327,255$ 485,251$ 672,236$ 8,655,000$ 689,391$ 741,217$ 342,884$ 44,538$ 424,570$ 4,109,909$ 18,492,251$

Wastewater Medic one

As of December 31, 2009, $27,690 of the special assessment receivable is delinquent.

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. Special assessments not yet due and notes and contracts receivable represent long‐term debt agreements of the City. Taxes receivable are comprised of property taxes combined with utility taxes.

Deferred revenue reported in the governmental funds as of December 31, 2009

Special Debt

Deferred revenue: General revenue service Permanent Total

Delinquent property taxes receivable 308,371$ 94,605$ 9,424$ 9,365$ 421,765$

Notes/contracts receivable ‐ 10,637,092 8,655,000 ‐ 19,292,092

Fines/forfeitures receivable 1,271,859 ‐ ‐ ‐ 1,271,859

Special assessments not yet due ‐ ‐ 1,241,405 ‐ 1,241,405

Total deferred revenue for governmental funds 1,580,230$ 10,731,697$ 9,905,829$ 9,365$ 22,227,121$

IV‐C Property taxes

RCW 84.55 is the governing legislation for property tax in the State of Washington. In 1997 the RCW was modified by Referendum No. 47 which allows the “banking” of unused levy capacity. The difference between the levy increase and the allowed maximum accumulates in a “bank.” Any, or all, of this bank may be added to future levies. For the 2009 tax levy the City’s bank was $234,206.

In November 2001 the state voters approved Initiative 747, again modifying the RCW, reducing the maximum levy increase from 6% to 1%, or the Implicit Price Deflator (IPD), whichever is less. The IPD for 2009 was 4.527%. Council authorized a 0% increase for 2009.

The City may levy up to $3.60 per $1,000 of assessed valuation for general governmental services, subject to two limitations:

• Increases in non‐voted property taxes are limited to the lesser of 1% per year, or the IPD. Adjustments for new construction are excluded from this calculation. The 1% limitation may be exceeded by a “lid lift” if the levy is below the $3.60 limit and is approved by a simple majority of the voters.

• The Washington State Constitution limits total regular property taxes to 1% of assessed valuation or $10 per $1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the 1% limit.

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The City's regular levy for 2009 was $2.23575 per $1,000, based on the 2009 assessed valuation of $8,079,556,522, for a total regular levy of $18,063,868. This amount includes the fire pension levy of $.225 per $1,000 for a total of $1,817,900 and also the 2007 Greenways III levy lid lift, an additional $.51163 per $1,000, a total of $4,133,744. Greenways III levy has a term of ten years.

Special levies approved by the voters are not subject to the limitations listed above. In 2009 the City levied an additional $.04516 per $1,000 to redeem and make interest payments on the 2001 UTGO fire station bonds for a total additional levy of $361,162. The fire station bonds mature in 2011.

The 2006 Legislature passed Engrossed Second Substitute House Bill (E2SHB) 2673 creating the Local Infrastructure Financing Tool (LIFT) Demonstration Program. Bellingham was one‐of‐three selected local governments to utilize this form of tax increment financing to pay for public improvements within the Revenue Development Area (RDA). Incremental increases in revenue from local sales/use tax and property taxes generated within the RDA must be used to repay bonds used to finance public infrastructure improvements that encourage economic development in the RDA. Incremental revenue increases within the RDA and revenue from other local public sources will be used to match state money, which will be distributed through a local sales/use tax that is credited against the state’s sales/use tax. The property tax for the RDA LIFT is levied at $.00021 for a total amount of $1,697 in 2009.

Taxes are levied annually in November for the next fiscal year beginning January 1, on property values listed with the County Assessor as of May 31. The Assessor establishes assessed values at 100% of fair market value. A revaluation of all property is required at least once every four years. On January 1 of each year taxes become an enforceable lien against properties. Tax bills are mailed on February 15 and taxes are due in two equal installments on April 30 and October 31. The Whatcom County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities. Collections are distributed monthly on cumulative balances less than $10,000, or weekly on balances exceeding $10,000.

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IV‐D Capital assets

Capital asset activity for the year ended December 31, 2009 is summarized as follows:

Primary government

Beginning Ending

balance balance

Governmental activities: 1/1/2009 Additions Reductions 12/31/2009

Capital assets not depreciated:

Land 112,612,786$ 7,029,579$ ‐$ 119,642,365$

Construction in progress 23,440,353 13,858,478 11,075,407 26,223,424

Total assets not depreciated 136,053,139 20,888,057 11,075,407 145,865,789

Capital assets being depreciated:

Buildings 43,895,152 3,278,607 ‐ 47,173,759

Improvements other than buildings 178,576,726 9,264,384 ‐ 187,841,110

Machinery and equipment 22,649,352 3,094,976 3,681,730 22,062,598

Total assets being depreciated 245,121,230 15,637,967 3,681,730 257,077,467

Less accumulated depreciation for:

Buildings 12,496,326 886,979 ‐ 13,383,305

Improvements other than buildings 68,324,683 5,006,932 ‐ 73,331,615

Machinery and equipment 9,217,596 1,655,394 2,534,117 8,338,873

Total accumulated depreciation 90,038,605 7,549,305 2,534,117 95,053,793

Total capital assets being depreciated, net 155,082,625 8,088,662 1,147,613 162,023,674

Governmental activities capital assets, net 291,135,764$ 28,976,719$ 12,223,020$ 307,889,463$

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Beginning Ending

balance balance

Business‐type activities: 1/1/2009 Additions Reductions 12/31/2009


Land 31,849,840$ 2,573,186$ ‐$ 34,423,026$



Capital assets depreciated:

Buildings 92,552,992 1,933,575 ‐ 94,486,567

Improvements other than buildings 181,675,184 5,623,030 64,244 187,233,970

Machinery and equipment 5,940,868 1,152,956 275,672 6,818,152

Total depreciated assets 280,169,044 8,709,561 339,916 288,538,689


Buildings 41,665,711 1,765,228 ‐ 43,430,939

Improvements other than buildings 70,133,148 3,541,260 64,244 73,610,164

Machinery and equipment 2,656,747 350,374 129,402 2,877,719

Total accumulated depreciation 114,455,606 5,656,862 193,646 119,918,822

Total capital assets, net of accumulated depreciation 165,713,438 3,052,699 146,270 168,619,867

207,425,986$ 12,762,164$ 6,503,965$ 213,684,185$

Depreciation expense was charged to functions of the primary government as follows:

Governmental activities:

General governmental 304,335$

Public safety 547,812

Public works 4,268,330

Economic environment 970,170

Cultural and recreational 44,915

Internal service fund capital assets are charged to the 1,413,743

various functions based on their usage of the assets

Total depreciation expense ‐ governmental activities 7,549,305$

Business‐type activities:

Cemetery 6,565$

Water 2,176,358

Wastewater 2,497,646

Storm and surface water 623,127

Solid waste 21,374

Golf 33,881

Parking 107,777

Medic one 160,630

Development services 29,504

Total depreciation expense ‐ business‐type activities 5,656,862$

Total business‐type activities capital assets, net accumulated depreciation

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Discretely presented component unit

Capital asset activity year ended December 31, 2009 is summarized as follows: Capital asset activity year ended December 31, 2009 is summarized as follows:

Bellingham‐Whatcom Public Facilities DistrictBellingham‐Whatcom Public Facilities District

Beginning Endingbalance balance

1/1/2009 Additions Reductions 12/31/2009


Land 1,329,860$ -$ -$ 1,329,860$



Capital assets being depreciated:

Buildings 4,069,247 - - 4,069,247

Improvements other than buildings 3,657,340 5,412,738 - 9,070,078

Total assets being depreciated 7,726,587 5,412,738 - 13,139,325


Buildings 2,470,724 161,564 - 2,632,288

Improvements other than buildings 278,678 111,465 - 390,143

Total accumulated depreciation 2,749,402 273,029 - 3,022,431

Total capital assets being depreciated, net 4,977,185 5,139,709 - 10,116,894

Component unit capital assets, net 23,394,408$ 7,887,904$ 5,317,534$ 25,964,778$

IV‐E Interfund receivables, payables and transfers

Loans between funds are classified as interfund loans receivable and payable on the statement of net assets. Loans between funds must be authorized by City Council. All loans are authorized with specific repayment terms at a reasonable interest rate.

Due to other funds and due from other funds result from goods issued, work performed, or services rendered to or for the benefit of another fund of the same government when cash is not immediately moved between the funds.

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Interfund balances at December 31, 2009

Interfund Interfund Due from Due toloans receivable loans payable other funds other funds

General ‐$ 2,073,534$ 497,908$ ‐$

Street ‐ ‐ 603 ‐

HUD Grant Fund ‐ ‐ ‐ 497,908

Solid Waste ‐ ‐ ‐ 603

Nonmajor enterprise ‐ 80,424 ‐ ‐

Fiduciary 2,153,958 ‐ ‐ ‐

Total government‐wide 2,153,958$ 2,153,958$ 498,511$ 498,511$

(497,908)

603$

Less eliminations to government‐wide statements

The interfund loan receivable and payable balances shown above includes one loan that is not scheduled to be collected in the subsequent year.

• Firefighter’s pension fund made a $2,250,000 loan to the general fund in 2008 for the purpose of buying new fire trucks. There is $2,073,534 remaining on this loan at year‐end, $1,896,826 will not be repaid in 2010.

Transfers in/out include transfers to support the operations of other funds, contributions to the capital of enterprise or internal service funds and transfers to establish or reduce working capital in funds.

Transfers

Nonmajor NonmajorTransfers In General Street governmental Water enterprise Total

General ‐$ ‐$ 248,236$ ‐$ 637,293$ 885,529$

Street ‐ ‐ ‐ ‐ ‐ ‐

2004 PFD/Civic Fld LTGO ‐ ‐ 651,828 ‐ ‐ 651,828

Water 66,715 ‐ ‐ ‐ ‐ 66,715

Nonmajor governmental 1,312,139 258,990 88,437 6,577 ‐ 1,666,143

Medic one 1,026,110 ‐ ‐ ‐ ‐ 1,026,110

Nonmajor enterprise 271,480 ‐ ‐ ‐ ‐ 271,480

Internal service 124,954 2,547 ‐ 1,391 ‐ 128,892

Total 2,801,398$ 261,537$ 988,501$ 7,968$ 637,293$ 4,696,697$

Transfers Out

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IV‐F Operating leases

The City leases two office space facilities, two storage units, one off‐site data servicing facility, three fiber optic agreements for bandwidth connectivity and 13 copier leases under non‐cancelable operating lease agreements. Operating leases do not give rise to property rights or lease obligations and therefore the results of the lease agreements are not reflected in the City’s statement of net assets. Total operating lease expenditures for 2009 were $301,371.

Future minimum lease payments year ending December 31

2010 265,074$ 2011 235,460 2012 184,153 2013 23,676

Total 708,363$

IV‐G Significant construction commitments

The City’s outstanding significant construction commitments by fund type are summarized below:

Construction commitments as of December 31, 2009

Governmental activities 5,106,177$ Enterprise activities 5,136,715

Total 10,242,892$

IV‐H Long‐term debt

General obligation bonds

The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business‐type activities.

General obligation bonds are direct obligations and pledge the full faith and credit of the City. These bonds generally are issued as 20‐year serial bonds. General obligation bonds are created by a 60% majority vote of the people and, therefore, financed by a special tax levy; or created by ordinance, adopted by the City Council and normally financed from general fund revenues (councilmanic bonds).

The original amount of general obligation bonds issued in prior years was $40,845,000. No new general obligation bonds were issued in 2009. The City currently has eight outstanding general obligation bond issues.

1996 LTGO Roeder refunding bonds were issued May 1, 1996 in the amount of $4,195,000. These bonds are tax exempt and the proceeds of this issue refunded the 1988 Roeder Avenue and 1992 Police bond issues. The 1988 Roeder Avenue bonds financed a portion of the construction of a connector on Roeder Avenue south to Chestnut Street. The 1992 Police bonds financed part of the cost of constructing new facilities and renovating existing facilities for the City’s police department. The Roeder Avenue portion of this issue was financed from street fund revenues and matured in 2008. The Police portion of the issue is financed from general fund revenues and will mature in 2012.

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1999 LTGO Municipal Court bonds were issued May 15, 1999 in the amount of $3,420,000. These bonds are tax exempt and the proceeds of this issue had two purposes, $2,920,000 for the purchase and remodel of the City Hall Annex (Municipal Court building), and $500,000 towards the construction of the new Harris Street Fire Station. The proceeds were deposited in accordance with the bond ordinance into the City Hall Annex construction fund and the Fire construction fund. These bonds are financed from general fund revenues and will mature in 2010.

2001 UTGO Fire bonds were issued April 1, 2001 in the amount of $2,800,000. These bonds are tax exempt and the proceeds of this issue financed the acquisition of land and construction of the City's sixth fire station on Deemer Road. The issue also provided for new fire apparatus to equip the facility. The proceeds were deposited in accordance with the bond ordinance into the fire construction fund. These bonds are financed by a voted general obligation levy and will mature in 2011.

2002 LTGO Parking refunding bonds were issued August 8, 2002 in the amount of $1,045,000. These bonds are tax exempt and the proceeds of this issue refunded the 1992 parking revenue bond which financed a portion of the costs of constructing, equipping and installing improvements and additions to the existing off‐street parking facilities of the city. The proceeds were deposited in accordance with the bond into the parking fund. This issue is financed by the parking fund, a business‐type activity and will mature in 2012.

2004 LTGO Sportsplex acquisition bonds were issued February 5, 2004 in the amount of $4,315,000. These bonds are tax exempt and the proceeds of this issue were used to purchase the Sportsplex ice arena and indoor soccer complex and pay bond issuance costs. The proceeds were deposited in accordance with the bond ordinance into the Sportsplex construction fund. These bonds are financed from lease revenues received for the Sportsplex complex, a governmental activity and will mature in 2028.

2004 LTGO PFD/Civic/Aquatic refunding bonds were issued November 1, 2004 in the amount of $16,375,000. These bonds are tax‐exempt and the proceeds of this bond issue funded three purposes. $9,370,000 was for the development of a regional center and is financed by the Bellingham‐Whatcom Public Facilities District (PFD) with a state sales tax rebate. These issue proceeds were deposited in accordance with the bond ordinance into the public facilities fund. $6,015,000 was used for improvements to the City‐owned civic field complex and is financed with REET funds. These issue proceeds were deposited in accordance with the bond ordinance into the civic field construction fund. $990,000 was used to refund outstanding callable bonds of the 1994 aquatic facility bond issue that financed the construction of the Arne Hanna Aquatic Center and is also financed with REET funds. These issue proceeds were deposited in accordance with the bond ordinance into the 1994 aquatic facility debt service fund. These bonds are financed by governmental activities and will mature in 2026.

2005 LTGO Solid Waste Series A bonds were issued December 8, 2005 in the amount of $1,545,000. These bonds are tax‐exempt and the proceeds were used for the purpose of providing a portion of the funds for financing the environmental cleanup of the Holly Street landfill site. The proceeds were deposited in accordance with the bond ordinance into the solid waste fund. These bonds are financed by the solid waste fund, a business‐type activity, and will mature in 2025.

2005 LTGO Solid Waste Series B bonds were issued December 8, 2005 in the amount of $7,150,000. These bonds are taxable and the proceeds were used for the purpose of financing the City’s share of the environmental clean up by the Port of Bellingham, Washington, of the Cornwall Avenue and Central Waterfront landfill sites and to finance the acquisition of the Colony Wharf property adjacent to the Roeder Avenue landfill site. The proceeds were deposited in accordance with the bond ordinance into the solid waste fund. These bonds are financed by the solid waste fund, a business‐type activity, and will mature in 2023.

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General obligation bonds currently outstanding

Issue Maturity Interest Debt Name of issuance Purpose date date rates outstanding

1996 LTGO Roeder refunding Governmental activities 05/01/96 12/01/12 4.20 ‐ 5.65% 930,000$

1999 LTGO Municipal Court Governmental activities 05/15/99 08/01/10 4.25 ‐ 4.75% 525,000

2001 UTGO Fire bond Governmental activities 04/01/01 12/01/11 4.00 ‐ 4.40% 655,000

2002 LTGO Parking refunding Business‐type activities 08/08/02 10/01/12 3.74% 375,000

2004 LTGO Sportsplex acquisition Governmental activities 02/05/04 12/01/28 2.00 ‐ 4.625% 3,700,000

2004 LTGO PFD/Civic/Aquatic ref Governmental activities 11/01/04 12/01/26 3.00 ‐ 5.00% 13,735,000

2005 LTGO Solid Waste Series A Business‐type activities 12/08/05 12/01/25 4.15 ‐ 5.40% 1,545,000

2005 LTGO Solid Waste Series B Business‐type activities 12/08/05 12/01/23 4.15 ‐ 5.40% 6,025,000

Total general obligation bonds outstanding 27,490,000$

General obligation bond annual debt service requirements to maturity

Year ending Total TotalDecember 31 Principal Interest requirements Principal Interest requirements

2010 1,935,000$ 857,401$ 2,792,401$ 435,000$ 396,145$ 831,145$

2011 1,510,000 777,860 2,287,860 455,000 375,970 830,970

2012 1,245,000 719,355 1,964,355 480,000 354,762 834,762

2013 990,000 672,086 1,662,086 365,000 331,980 696,980

2014 1,070,000 635,299 1,705,299 385,000 313,073 698,073

2015‐2019 5,415,000 2,454,619 7,869,619 2,245,000 1,238,477 3,483,477

2020‐2024 4,470,000 1,371,175 5,841,175 2,910,000 575,802 3,485,802

2025‐2028 2,910,000 269,375 3,179,375 670,000 28,140 698,140

Total 19,545,000$ 7,757,170$ 27,302,170$ 7,945,000$ 3,614,349$ 11,559,349$

Governmental activities Business‐type activities

Notes payable

Drake property note payable ‐ the City issued a note for the acquisition of Big Rock Garden Nursery property on December 31, 1992. The note was issued in the amount of $225,000 without an option for early redemption. This debt is for general governmental activities, financed from general fund revenues, and will mature in 2022.

Notes payable debt currently outstanding

Name of issuance Purpose Issue dateMaturity date

Interest rates

Debt outstanding

Drake property note payable Governmental activities 12/31/92 12/31/22 7.00% $ 153,045 Total notes payable $ 153,045

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Notes payable annual debt service requirements to maturity

Year ending TotalDecember 31 Principal Interest requirements

2010 7,487$ 10,476$ 17,963$ 2011 8,029 9,935 17,964 2012 8,609 9,354 17,963 2013 9,231 8,732 17,963 2014 9,899 8,065 17,964 2015‐2019 61,319 28,497 89,816 2020‐2022 48,471 5,407 53,878

Total 153,045$ 80,466$ 233,511$


Government loans

The City has Public Work Trust Fund construction loan agreements with the State Department of Community Development. There are currently four Public Work Trust Fund loans and the original amount of loans entered into in prior years was $6,038,500. Loans for governmental activity purposes are financed through the street fund and loans for business‐type activity purposes are financed through the water and wastewater funds.

Silverbeach PWTF loan was issued in 1991 through 1992 in amounts totaling $445,500. The loan was authorized for a 20 year period with interest at 2%. The proceeds were deposited into the wastewater fund for the purpose of replacing and upgrading the Silverbeach trunk sewer which is a major line. The loan is for a business‐type activity and matures in 2011.

Street Resurfacing PWTF loan was issued in 2002 through 2005 in amounts totaling $2,975,000. The loan was authorized for a 20 year period with interest at .5%. The proceeds were deposited into the street fund for the purpose of street surface repaving throughout the city. The loan is for a governmental activity and matures in 2022.

Water Main Replacement PWTF loan was issued in 2002 through 2005 in amounts totaling $1,938,000. The loan was authorized for a 20 year period with interest at .5%. The proceeds were deposited into the water fund for the purpose for the citywide water main replacement. The loan is for a business‐type activity and matures in 2022.

Middle Fork Diversion PWTF loan was issued beginning in 2006 in the amount $680,000. The total loan will be $3,400,000. The loan was authorized for a 20 year period with interest at .5%. The proceeds were deposited into the water fund to finance a project that will allow for the passage of fish through the Middle Fork diversion dam. The loan is for a business‐type activity and matures in 2026.

Government loan debt currently outstanding

Issue Maturity Interest Debt

Name of issuance Purpose date date rate outstanding

Silverbeach PWTF loan Business‐type activities 06/06/91 07/01/11 2.00% 46,895$

Street Resurfacing PWTF loan Governmental activities 07/25/02 07/01/22 0.50% 2,053,154

Water Main Repl PWTF loan Business‐type activities 07/25/02 07/01/22 0.50% 1,329,684

Middle Fork Div. PWTF loan Business‐type activities 11/30/06 07/01/26 0.50% 608,421

Total governmental loans outstanding 4,038,154$

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Government loan annual debt service requirements to maturity

Year ending Total Total

December 31 Principal Interest requirements Principal Interest requirements

2010 157,935$ 10,266$ 168,201$ 161,520$ 10,628$ 172,148$

2011 157,935 9,476 167,411 161,520 9,469 170,989

2012 157,935 8,686 166,621 138,073 8,310 146,383

2013 157,935 7,897 165,832 138,073 7,619 145,692

2014 157,935 7,107 165,042 138,073 6,929 145,002

2015‐2018 789,675 23,690 813,365 690,364 24,290 714,654

2019‐2023 473,804 4,738 478,542 485,797 7,542 493,339

2024‐2026 ‐ ‐ ‐ 71,580 537 72,117

Total 2,053,154$ 71,860$ 2,125,014$ 1,985,000$ 75,324$ 2,060,324$

Governmental activities Business‐type activities

Special assessment bonds

The City also issues special assessment debt to provide funds for the construction of water and sewer utilities in residential areas without existing infrastructure. Special assessment bonds are created by ordinance, adopted by council and financed by assessment on property owners. Debt service requirements for local improvement district (LID) assessment bonds are met by assessments levied against property owners. The City has no financial obligation for defaults by property owners on special assessment debt, except for insuring the funding of the guaranty fund. The assessments are liens against the property and subject to foreclosure.

Local Improvement District No. 1106 bonds were issued December 30, 1996 in the amount of $4,357,957. These bonds are tax exempt and the proceeds of this issue were used to pay the LID portion of Bakerview Road LID (I‐5 to Deemer Road) project. The project consists of road, sidewalk, traffic signal, storm, sewer, water, and sanitary sewer improvements. These bonds will mature in 2018.

Special assessment bonds currently outstanding

Name of issuance Purpose Issue dateMaturity date Interest rates

Debt outstanding

LID 1106 Bakerview Road Governmental activities 12/30/96 12/30/18 4.10%‐6.00% $ 335,000

Total special assessment outstanding $ 335,000

Special assessment bonds are serial bonds but are called “yearly based on assessments received.” As of December 31, 2009 the City has called bonds ahead of the estimated schedule of redemption.

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Special assessment bond estimated annual debt service requirements to maturity


2010 ‐$ 20,100$ 20,100$ 2011 ‐ 20,100 20,100 2012 ‐ 20,100 20,100 2013 ‐ 20,100 20,100 2014 35,000 20,100 55,100 2015‐2016 300,000 189,000 489,000

Total 335,000$ 289,500$ 624,500$


Revenue bonds

The City also issued bonds where the government pledged income derived from the acquired or constructed assets to pay debt service. Revenue bonds are created by ordinance, adopted by the City Council and financed from enterprise fund revenues. The City currently has four revenue bonds and the original amount issued was $36,280,000. The water/sewer revenue bonds are issued to finance capital projects and watershed property acquisitions. No new revenue bonds were issued in 2009.

1999 Water and Sewer Refunding bonds were issued May 1, 1999 in the amount of $8,220,000. These bonds are tax exempt and the proceeds were used to advance refund outstanding callable bonds for the 1992 Water and Sewer bond issues. The 1992 bonds were used to finance the construction of a secondary sewage treatment plant by additions and modification to the existing City Wastewater Treatment Plant. The bonds are financed by business‐type activities and will mature in 2011.

2004 Water and Sewer Revenue Improvement and Refunding bonds were issued May 1, 2004 in the amount of $10,690,000. These bonds are tax exempt and the proceeds of this issue had two purposes. $4,545,000 was used to pay a portion of projects including the construction of a 2.5 million gallon reservoir with offsite piping, on the lower portion of King Mountain that will serve the south Cordata area, and preliminary engineering for five other transmission mains which include Yew Street, Meridian Street, Academy Road, June Road and 21st Street. $6,145,000 was used to refund the remaining callable portion of the 1994 Water and Sewer Refunding bonds. The 1994 bonds were used for three purposes, to finance the water chlorination facility; refund outstanding bonds issued in 1979 for the Georgia‐Pacific transmission line; refund the outstanding callable bonds for the 1990 bonds issued for the secondary treatment plant. The bonds are financed by business‐type activities and will mature in 2024.

2006 Water and Sewer Revenue bonds were issued June 15, 2006 in the amount of $11,330,000. These bonds are tax exempt and the proceeds were used to finance projects including construction of improvements to the City’s water system and acquisition of real property in the Lake Whatcom Watershed in order to preserve water quality. The bonds are financed by business‐type activities and will mature in 2026.

2008 Water and Sewer Revenue bonds were issued August 21, 2008 in the amount of $6,040,000. These bonds are tax exempt and the proceeds are being used to finance the acquisition of real property in the Lake Whatcom Watershed in order to preserve water quality, to pay the cost of other capital projects of the system that may be authorized by the Council and to pay cost of issuance of the bonds. The bonds are financed by business‐type activities and will mature in 2018.

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Revenue bonds currently outstanding

Issue Maturity Interest Debt Name of issuance Purpose date date rates outstanding1999 Water/sewer refunding Business‐type activities 05/01/99 08/01/11 3.70%‐4.60% 3,265,000$ 2004 Water/sewer impr & ref Business‐type activities 05/01/04 08/01/24 2.25%‐5.00% 4,945,000 2006 Water/sewer revenue Business‐type activities 06/15/06 08/01/26 2.25%‐5.00% 9,410,000 2008 Water/sewer revenue Business‐type activities 08/21/08 08/01/18 3.00%‐4.25% 6,040,000 Total revenue bonds outstanding 23,660,000$

Revenue bond annual debt service requirements to maturity


2010 3,605,000$ 978,820$ 4,583,820$

2011 3,755,000 843,465 4,598,465

2012 1,530,000 685,475 2,215,475

2013 1,590,000 628,700 2,218,700

2014 1,665,000 568,150 2,233,150

2015‐2019 6,825,000 1,842,056 8,667,056 2020‐2024 3,790,000 750,873 4,540,873

2025‐2026 900,000 60,760 960,760

Total 23,660,000$ 6,358,299$ 30,018,299$


To service revenue debt, $2,351,923 is available in the reserve accounts of the water and wastewater enterprise funds as of December 31, 2009 in compliance with applicable bond covenants.

Water and sewer revenue bond covenants require that revenue available for debt service (defined as operating and nonoperating revenues less expenses requiring payment to outside entities) exceed the annual debt payment of both principal and interest by a ratio of 1.25 times the maximum annual debt service (see statistical section). The City complies with bond covenants, maintaining a current ratio coverage of 1.89. There are numerous limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions.

In propriety funds, unamortized debt issue costs are recorded as deferred charges and bonds are displayed net of premium or discount; annual interest expense is decreased by amortization of debt premium and increased by the amortization of debt issue costs and discount.

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Summary of changes in long‐term liabilities for the year ending December 31, 2009

Beginning Ending Due within

Debt type balance Additions Reductions balance one year


Bonds payable: General obligation bonds 21,365,000$ ‐$ 1,820,000$ 19,545,000$ 1,935,000$

Less deferred amounts: for issuance premiums 338,847 ‐ 20,881 317,966 ‐ for issuance discounts (160,935) ‐ (14,525) (146,410) ‐ Total general obligation bonds 21,542,912 ‐ 1,826,356 19,716,556 1,935,000

Special assessment bonds 570,000 ‐ 235,000 335,000 ‐ with government commitment

Less deferred amounts: for issuance discounts (55,515) ‐ (6,625) (48,890) ‐

Total special assessment bonds 514,485 ‐ 228,375 286,110 ‐

Total bonds payable 22,057,397 ‐ 2,054,731 20,002,666 1,935,000

Notes payable 160,028 ‐ 6,983 153,045 7,487

Government loans 2,211,089 ‐ 157,935 2,053,154 157,935

Claims and l itigation 990,662 741,441 622,300 1,109,803 566,600

Pollution remediation obligation ‐ 106,250 ‐ 106,250 53,125

Compensated absences 4,589,879 61,635 82,913 4,568,601 3,527,569

Governmental activities long‐term liabilties 30,009,055 909,326 2,924,862 27,993,519 6,247,716


Bonds payable:

Revenue bonds 26,435,000 ‐ 2,775,000 23,660,000 3,605,000

General obligation bonds 8,355,000 ‐ 410,000 7,945,000 435,000

Less deferred amounts: for issuance premiums 192,841 ‐ 29,245 163,596 ‐ for issuance discounts (302,743) ‐ (44,732) (258,011) ‐

Total bonds payable 34,680,098 ‐ 3,169,513 31,510,585 4,040,000

Notes payable 1,000,000 ‐ 1,000,000 ‐ ‐

Government loans 2,177,772 ‐ 192,772 1,985,000 161,520

Pollution remediation obligation ‐ 4,496,594 ‐ 4,496,594 265,667

Compensated absences 576,291 4,454 90,253 490,492 401,978

Total business‐type activities long‐term liabilites 38,434,161$ 4,501,048$ 4,452,538$ 38,482,671$ 4,869,165$

Internal service funds predominantly serve the governmental funds. Accordingly, long‐term and short‐term liabilities are included as part of the above totals for governmental activities. At year‐end, long‐term liabilities of $44,565 and short‐term liabilities of $148,811 for internal service fund compensated absences are included in the above amounts. Also for the governmental activities, compensated absences are generally liquidated by the general fund.

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The government‐wide statement of net assets includes $4,040,000 of long‐term liabilities due within one year for business‐type activities in bonds payable, net of unamortized premium/discount. The remaining amount of $161,520 is displayed as other long‐term liabilities in that section.

All bond issues comply with arbitrage regulations as verified by an outside consultant. Five year reports are prepared as required.


Bellingham‐Whatcom Public Facilities District issued a limited sales tax obligation bond in the amount of $9,995,000 on December 20, 2007 The issue funds a portion of the cost of constructing the Whatcom Museum and to pay a portion of the cost of Phase II renovations to the Mount Baker Theatre as part of the regional center owned and operated by the PFD, and to pay costs of issuance of the bonds. These bonds are financed by state sales tax rebate revenue and will mature in 2027.

Limited sales tax obligation bonds currently outstanding

Issue Maturity Interest Debt Name of issuance date date rates outstanding

2007 Limited sales tax obligation 12/20/07 12/01/27 4.00%‐4.20% 9,995,000$

Total bonds outstanding 9,995,000$

Limited sales tax annual debt service requirements to maturity


2010 ‐$ 409,173$ 409,173$

2011 ‐ 409,173 409,173

2012 ‐ 409,173 409,173

2013 ‐ 409,173 409,173

2014 ‐ 409,173 409,173

2015‐2019 860,000 2,037,462 2,897,462

2020‐2024 4,535,000 1,546,863 6,081,863

2025‐2027 4,600,000 419,560 5,019,560

Total 9,995,000$ 6,049,750$ 16,044,750$


The PFD entered into an agreement with the City of Bellingham to borrow funds from the City’s 2004 LTGO PFD/Civic Field/Aquatic Refunding bond. Of the total $16,375,000 bond issue, $9,370,000 was for the PFD to fund the construction of the Whatcom Museum. The PFD pays the debt service costs on its portion of the bond. The PFD portion of the bond matures in 2026.

The PFD entered into an loan agreement with the City of Bellingham in 2008 to borrow $2,800,000 for the purpose of funding the construction of the Whatcom Museum. This loan has a term of 10 years and is interest only payments for the first five year. The loan matures in 2018.

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Intergovernmental loan currently outstanding

Issue Maturity Interest Debt Name of issuance date date rates outstanding

2004 City of Bellingham loan 11/01/04 12/01/26 3.00%‐5.00% 8,655,000$

2008 City of Bellingham loan 12/31/08 12/31/18 4.23% 2,800,000

Total bonds outstanding 11,455,000$

Intergovernmental loan annual debt service requirements to maturity


2010 210,000$ 492,918$ 702,918$

2011 240,000 486,093 726,093

2012 265,000 478,894 743,894

2013 290,000 470,612 760,612

2014 842,095 459,737 1,301,832

2015‐2019 4,457,905 1,762,643 6,220,548

2020‐2024 3,370,000 958,950 4,328,950 2025‐2027 1,780,000 135,250 1,915,250

Total 11,455,000$ 5,245,097$ 16,700,097$


Summary of long‐term debt changes for the year ending December 31, 2009

Beginning Ending Due within

Debt type balance Additions Reductions balance one year

General obligation bonds 9,995,000$ ‐$ ‐$ 9,995,000$ ‐$

Less deferred amounts

for issuance discounts (38,933) ‐ (2,049) (36,884) ‐

Total bonds payable 9,956,067 ‐ (2,049) 9,958,116 ‐

Notes payable 11,645,000 ‐ 190,000 11,455,000 210,000

Compensated absences 4,785 434 5,219 ‐ ‐

Total long‐term l iabil ites 21,605,852$ 434$ 193,170$ 21,413,116$ 210,000$

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IV‐I Segment information

The City has one nonmajor enterprise fund that meets the criteria established for segment information, the parking fund. The parking system operates parking facilities throughout the City. The covenants of the 2002 LTGO parking system refunding bond pledge the revenues of the parking system to pay the principal and interest on the bond.

Condensed statement of net assets

Assets:

Current assets 1,399,532$

Restricted assets 33,618

Capital assets 5,377,970

Total assets 6,811,120

Liabil ities:

Current 249,615

Noncurrent 261,180

Total l iabil ities 510,795

Net assets:

Invested in capital assets, net of related debt 5,002,969

Restricted 33,618

Unrestricted 1,263,738

Total net assets 6,300,325$

Condensed statement of revenues, expenses and changes in net assets

Operating revenues (pledged against bond) 2,351,236$

Depreciation expense (107,777)

Other operating expenses (1,416,792)

Operating income 826,667

Nonoperating revenues (expenses):

Investment earnings 19,514

Interest expense (17,111)

Other nonoperating expenses (153,201)

Transfers out (637,293)

Change in net assets 38,576

Beginning net assets 6,389,252

Prior period adjustment (127,503)

Ending net assets 6,300,325$

Condensed statement of cash flows

Net cash provided (used) by:

Operating activities 858,554$

Noncapital financing activities (637,293)

Capital and related financing activities (128,140)

Investing activities (40,922)

Net increase (decrease) 52,199

Beginning cash and cash equivalents 170,590

Ending cash and cash equivalents 222,789$

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NOTE V. OTHER INFORMATION

V‐A Risk management

The City is exposed to various risks of losses related to torts, theft, damage and destruction of assets; errors and omissions; injuries to employees; and natural disasters. In 1977 the City decided to limit commercial insurance coverage because of its prohibitive costs and also because the City wished to maintain control over claim settlements. Since then the City has established the following four internal service funds to account for and finance its uninsured risks of loss:

The claims, litigation and property loss fund is the source for payment of third party claims and judgments, excess liability insurance premiums and property insurance premiums. Currently the City maintains commercial property insurance for fire and other hazards including limited earthquake and flood coverage on City properties having an estimated total replacement value of $162 million in 2009 and $184 million in 2010. The current policy includes a $50 thousand deductible with a loss limit per occurrence of $200 million (except for earthquake and flood). The City carries a $0 deductible liability policy to cover emergency medical services, with a limit of $1 million. During the current and preceding two years, no City property losses exceeded the City’s insurance coverage. In 2008, a City fire station experienced a fire, resulting in a loss which is being adjusted under the property policy. During the current and preceding two years, no other property losses exceeded the deductible.

Departments of the City contribute premiums based on claims history, department size and other factors. The level of contributions is established to pay prior and current year claims and to provide a reserve for future losses, including catastrophic losses. For 2009 department contributions, judgments and settlements flowing into the fund totaled $990,767. For this same year, the City purchased excess liability insurance with a retained self‐insurance limit of $1 million and $10 million in policy limits. The City Council has established by ordinance a goal of $5 million as the minimum amount to be made available to cover losses. There is a sub‐limit for earthquake and flood of $15 million.

In the normal course of its various operations, the City of Bellingham is involved in lawsuits and receives claims for damages alleging City responsibility for damage incurred by third parties. Claims and/or litigation arise in such areas as police civil liability (false arrest), street and sidewalk design and/or maintenance, utility maintenance, zoning, building and other land‐use regulations, equipment operation and other areas. These claims or lawsuits are a natural consequence of conducting the City’s business. The City of Bellingham self‐insures to cover most of its liability risk as reflected in the retained self‐insurance limit.

The City has recorded in its financial statements all other material liabilities, including an estimate for all known claims liabilities. Claims expenditures and liabilities are accrued when the amount of that loss can be reasonably estimated. This estimate includes non‐incremental claims adjustment expenses.

Changes in estimated claims liabilities, probable and possible losses for the past two years

2007‐2008 456,982$ 882,940$ 349,260$ 990,662$

2008‐2009 990,662$ 741,441$ 622,300$ 1,109,803$

The City complies with GASB Statement 10, Accounting and Reporting for Risk Financing and RelatedInsurance Issues.

Beginning

liability

Actual claims

payments

Ending

liabilityClaims and litigation

Current year

claims and

changes in

estimates

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The unemployment compensation fund was established to reimburse the State of Washington Employment Security Department on a quarterly basis, for claims paid by them to former employees. State statutes mandate that most employers pay a tax or contribution to support the unemployment insurance system. City department contributions for 2009 totaled $546,020. In 2009 the City paid $185,314 in unemployment claims and $1,770 in administrative costs. At December 31, 2009, the total estimated liability is $450,000.

The worker's compensation fund is the source for payment of employee injury claims and other related costs. The City is self insured for this program and administers its claims by retaining the services of a third party administrator. Currently, the City uses Eberle Vivian, Inc. for these services. Claims are administered within the guidelines established by the State of Washington. The workers’ compensation program has reinsurance with a $500,000 per occurrence deductible.

Premiums are assessed to City departments based upon the number of hours worked by covered employees. Rates are revised annually to generate revenues sufficient to cover anticipated expenditures and provide a reserve for incurred but unreported future expenses. City department contributions for 2009 totaled $562,591. The department contribution rates are based on an internal formula derived from Washington State standard rates. In 2009 the City paid $422,489 in worker’s compensation claims and $302,620 in administrative and reinsurance costs. At December 31, 2009, the total estimated liability is $437,198.

The health benefits fund is the source for payment of employee health care and related costs. Medical insurance for employees is provided through premium paid plans, purchased through the Association of Washington City’s Employee Benefit Trust. Both the City and employees contribute to the cost of medical insurance premiums. Dental insurance benefits for non‐uniformed employees are provided through the Association of Washington City’s Employee Benefits Trust. The self‐insured vision plan for non‐uniformed employees is administered through an independent Third Party Administrator. For uniformed employees dental and vision insurance, the City provides funding to the employees’ unions who purchase this insurance on behalf of the employees.

City departments pay monthly premiums to the health benefits fund to cover premiums paid to third parties, administrative overhead and other obligations. Department contributions for 2009 totaled $8,909,283 for the medical program, $1,170,973 for the dental program, $47,747 for the vision program, and $5,250 for the flexible benefit program. At December 31, 2009, $1,899,032 was available for all purposes.

Claims expenditures and liabilities are disclosed and net assets are reserved for an estimate of the possible loss when the amount of that loss cannot be reasonably estimated.

Estimated changes in reserves

Beginning

reserve

Actual

claims

payments

Ending

reserve

Unemployment compensation2007‐2008 75,000$ 60,940$ 90,000$ 2008‐2009 90,000 185,314 450,000 Workers' compensation2007‐2008 249,495 453,057 368,381 2008‐2009 368,381$ 422,489$ 437,198$ 491,306$

Fund

Current year

claims

and changes in

estimates

75,940$ 545,314

571,943

In the opinion of management, the City’s insurance policies and self insurance are adequate to pay all known or pending claims.

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V‐B Contingencies

Cleanup contingencies ‐ The City of Bellingham (the City) has been named as a Potentially Liable Party (PLP) (as that term is defined in the Model Toxics Control Act) by the Washington State Department of Ecology (DOE) with respect to several cleanup sites. Cleanup at these sites is in a variety of stages, from no action to completion, with several at the remedial investigation phase. For most of these sites, the City is eligible for, and has received or hopes to receive, matching funds from DOE for the cleanups. At several of the sites, the City is not the only PLP and is in negotiation with the other PLPs as to each party’s responsibility to fund the remedial actions. The City has issued two general obligation bonds for the City’s share of remediation costs to be repaid primarily by net revenues from the solid waste fund. These revenues are generated principally by tax revenues paid by the City’s garbage contractor. The solid waste fund’s projected cash flow indicates sufficient net revenue to repay the estimated principal and interest costs over a twenty‐year period.

New Whatcom Waterfront Development project ‐ In 2004, the City entered into an interlocal agreement with the Port of Bellingham to redevelop 137 acres of heavy industrial property located in the center of the City’s downtown waterfront. The 20‐year vision is to create a new city neighborhood with homes, shops, offices and light industry, as well as parks and promenades, a healthy shoreline habitat along Bellingham Bay, and a new marina. The City has agreed to provide essential new roads, utilities, parks and trails. The specific elements of the public infrastructure to be provided by the City will be delineated in the Development Agreement. The Port agreed to purchase the Georgia‐Pacific property, conduct a comprehensive environmental cleanup of the site and the waterway in keeping with goals defined by the Bellingham Bay Pilot Project, and to develop new visitor and permanent moorage. In addition, the project has received support from the state for railroad track relocation, demolition, planning, and environmental cleanup. The federal government has awarded funds for major transportation improvements needed to access this site. In 2006, the State Legislature approved the New Whatcom Waterfront Development Project as one of the demonstration projects for the Local Infrastructure Financing Tool (LIFT). LIFT is a type of tax incremental financing that will provide up to $1 million per year for capital projects in the redevelopment area for twenty‐five years.

Bellingham‐Whatcom Public Facilities District (PFD) contingent loan agreement – The City of Bellingham has signed a contingent loan and bridge loan agreement (contract 2007‐0552) with the PFD providing for three separate loans. The City made one of these three loans in 2008.

• Contingent loan commitment for bonds ‐ In 2007 the PFD issued $9,995,000 of limited sales tax obligation bonds. The issue funds a portion of the cost of constructing the Whatcom Museum and to pay a portion of the cost of Phase II renovations to the Mount Baker Theatre as part of the regional center owned and operated by the PFD, and to pay costs of issuance of the Bonds. The contingent loan agreement provides that the City is to make a loan to the PFD in the event that the PFD is unable to provide for the payment of principal or interest on any of its Bonds.

• Bridge loan – The Campaign for the Arts (CFA) has committed to raising $4,000,000 for PFD projects. The City shall make a bridge loan to the PFD, at the PFD’s request, in an amount up to the $2,800,000 with a term of five years.

Grant contingencies ‐ The City participates in certain federal and state assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives. Any liability for reimbursement which may arise as the result of these audits is not believed to be material.

Home rehabilitation program loan guarantee ‐ The City has an agreement with Key Bank of Washington to guarantee Bellingham Home Rehabilitation Program loans. The City is committed to reimburse the bank for 90% of the outstanding balance of defaulted program loans. At December 31, 2009 the outstanding balance of these loans are $54,564 and the resultant contingent liability is $49,108.

Housing Authority loan contingent agreements ‐ The City of Bellingham has signed two contingent loan agreements with the Housing Authority of the City of Bellingham (Housing Authority). The agreements obligate

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the City, upon request from the Housing Authority, to restore the reserve accounts to the reserve requirement (1998 issue ‐105%, 2001 issue ‐ 110%) or to pay regularly scheduled debt service if Authority funds are insufficient. The Housing Authority and the City would agree on repayment terms at that time. Rental income is applied to bond repayment and maintenance of reserve accounts. During the life of the agreements and earlier agreements with the Housing Authority, the Housing Authority has not utilized this loan provision. The City estimates no potential loss from the agreements.

• In 1998, the Housing Authority issued $20,755,000 of housing refunding revenue bonds. The issue refunds the 1994 Cascade Meadows bonds and 1992 Pacific Rim bonds. The agreement is authorized by Ordinance 10925.

• In 2001, the Housing Authority issued $5,350,000 of revenue bonds. The issue funds the acquisition and rehabilitation of a 91‐unit apartment complex known as Varsity Village. The agreement is authorized by Ordinance 2001‐11‐083.

Affordable housing program ‐ The City of Bellingham has made surplus land available to non‐profit agencies and individuals as part of its affordable housing program. The City conveyed the properties by quit claim deeds conditioned by liens foreclosable as mortgages if the properties cease to be used for low‐income housing. The City considers it improbable that these liens may be invoked in the future.

Executed agreements as of December 31, 2009

Fund Agency AmountGeneral fund Alternatives to Hunger May 2008 150,000$ CDBG Opportunity Council ‐ Harborview Apts. December 1990 145,000 CDBG Bellingham Housing Authority ‐ Harborview Apts. October 1991 46,000 General fund Bell ingham Housing Authority October 1991 84,000 LID guaranty Habitat for Humanity June 1992 5,000 LID guaranty Ted and Laurie Scherrer July 1993 5,000

Total affordable housing agreements 435,000$

Initiated

V‐C GASB 49 pollution remediation obligations

The City recorded the following pollution remediation obligations as other liabilities in its solid waste major enterprise fund statements and in its greenways fund in the governmental section of the government wide statements. All sites are overseen by the Washington Department of Ecology. The City has been named a PLP by the Washington Department of Ecology for each of the four sites listed below. The City does not expect to make any new recoveries related to these projects. To determine the City’s remediation liability, project estimates were used from engineers and other remediation specialists. In each case Finance staff determined that a single project option was the best representation of the City’s future liability. The City will review each of these liabilities annually and make any changes that may be required.

Pollution remediation obligations

SiteGovernmental

activitiesBusiness‐type

activities

S. State St Man. Gas Plant (FKA Boulevard Park) 106,250$ ‐$

Cornwall Ave Landfil l Site ‐ 1,243,594

RG Haley Site ‐ 2,643,000

Eldridge Municipal Landfil l ‐ 610,000

Total 106,250$ 4,496,594$

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South State Street Manufactured Gas Plant Site (FKA Boulevard Park) – Remediation is required to clean up contamination from the manufacture of gas from coal. The City is entering into an agreed order with the Washington State Department of Ecology and Puget Sound Energy to conduct a remedial investigation/feasibility study (RI/FS). The estimated cost is $850,000. There are no estimates of the actual cleanup cost at this time. The City’s share of the RI/FS cost is $106,250.

Cornwall Ave Landfill Site – Remediation is required to clean up contamination from the use of this site as a landfill for garbage. In 2005 the City and the Port of Bellingham entered into an agreement to clean up this site with an original cost estimate of $3 million plus oversight costs. The City has funded its share of that original estimate. These original estimates have been subsequently updated and clean‐up costs are now expected to double to a total of $6 million. The City’s portion of these additional costs is expected to be $1,243,594.

RG Haley Site ‐ Remediation is required to clean up contamination from the use of this site as a wood treatment facility. Studies done in the course of the sale of this property to the City estimated clean up costs at $5 million. It is estimated that $286,000 will be required for a RI/FS to cover testing and developing a clean‐up plan. The City’s estimated share is $2,643,000.

Eldridge Avenue Municipal Landfill ‐ Remediation is required to clean up contamination from the use of this site as a landfill for garbage. Current cost estimate for clean‐up is $510,000 with an additional $100,000 for administrative costs. The City is responsible for the full amount $610,000.

V‐D Interlocal agreements

Whatcom Medic One

The City of Bellingham and Whatcom County have entered into an agreement to provide countywide basic and advanced life support ambulance service. The City operates and manages the service under advisement of a cooperative board composed of four City officials, three County officials and three officials from related associations. The City is responsible for setting fees, preparing annual budgets and providing accounting and reporting information. The County reviews this information for mutual acceptability.

In November 2005, Whatcom County voters approved a ballot proposition authorizing the County to collect 1/10th of one percent sales tax for the purposes of supporting countywide emergency medical and law enforcement services. 1/3rd or this new tax remains with the cities for law enforcement and 2/3rds of this new tax is remitted to the County to be used for countywide emergency medical services. The 2007 interlocal agreement between the County and City reflect a higher County monetary contribution, with the City matching this amount with an in‐kind contribution of city resources assigned to provide administrative services support. Per the interlocal agreement the contribution amounts stated for 2007 will increase at the rate of 1% per year. In 2009, Whatcom County contributed $1,376,688 to Whatcom Medic One operations and the City contributed $1,026,110. Beginning in 2007 the EMS sales tax is being used to fund the unfunded portion of Whatcom Medic One’s budget. In 2009 the EMS sales tax funded $1,602,733 of Whatcom Medic One’s operations. Responsibility for legal liability is determined by the location to which an aid unit responds. In the event either party gives notice of termination, the City will pay the County its appropriate share of the appraised value of existing equipment. The City would continue to operate Whatcom Medic One within the City limits if the agreement were to expire. The City accounts for financial data in the medic one enterprise fund as required by contract.

What‐Comm/Prospect Communications Center

The City of Bellingham participates with Whatcom County and other local governmental jurisdictions to provide two communication centers; the first is for law enforcement and is the primary public safety answering point. The other is for fire and emergency medical services and serves as the secondary public safety answering point. Each center is capable of providing back up support for the other.

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City police department personnel operate “What‐Comm Communications Center” and administration is the responsibility of the Bellingham Police Chief. City fire department personnel operate “Prospect Communications Center” and administration is the responsibility of the Bellingham Fire Chief. The City is responsible for maintaining records and statistics regarding the two operations.

The City operates and manages the communications centers under advisement of an administrative board composed of eight voting members and one nonvoting member. The voting members consist of three members from the County, three from the City, one representing County fire districts and one elected official to be selected by the other members. The City of Bellingham Fire Chief serves as the nonvoting member. The Administrative board has the authority to establish broad policy guidelines and for establishing the annual financial contributions to be made by the member jurisdictions. In 2009, the City contributed $1,706,877 to the public safety dispatch fund as its share of operations, approximately 42% of total revenues.

V‐E Employee retirement systems and pension plans

Substantially all City full‐time and qualifying part‐time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost‐sharing multiple‐employer public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems (DRS), 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, Communications Unit, P.O. Box 48380, Olympia, WA 98504‐8380; or it may be downloaded from the DRS website at www.drs.wa.gov. The following disclosures are made pursuant to GASB Statements No. 27, Accounting for Pensions by State and Local Government Employers and No. 50, Pension Disclosures, an Amendment of GASB Statements No. 25 and No. 27.

Public Employees’ Retirement System (PERS) Plans 1, 2 and 3

Plan description:

PERS is a cost‐sharing multiple‐employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component.

Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges currently in a judicial retirement system); employees of legislative committees; community and technical colleges, college and university employees not participating in national higher education retirement programs; judges of district and municipal courts; and employees of local governments.

PERS participants who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 and by either, February 28, 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if terminally ill, with less than five years to live.

PERS Plan 1 and Plan 2 defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature.

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PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement after 30 years of service, or at the age of 60 with five years of service, or at the age of 55 with 25 years of service. The annual benefit is two percent of the average final compensation (AFC) per year of service, capped at 60 percent. (The AFC is based on the greatest compensation during any 24 eligible consecutive compensation months.) This annual benefit is subject to a minimum for PERS Plan 1 retirees who have 25 years of service and have been retired 20 years, or who have 20 years of service and have been retired 25 years. Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. If a survivor option is chosen, the benefit is further reduced. A cost‐of living allowance (COLA) is granted at age 66 based upon years of service times the COLA amount, which is increased three percent annually. Plan 1 members may also elect to receive an optional COLA amount that provides an automatic annual adjustment based on the Consumer Price Index. The adjustment is capped at three percent annually. To offset the cost of this annual adjustment, the benefit is reduced.

PERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 65 with five years of service with an allowance of two percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60‐month period.) Plan 2 members who retire prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost‐of‐living allowance is granted (based on the Consumer Price Index), capped at three percent annually.

Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculated at one percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60‐month period.) Effective June 7, 2006, Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service, if twelve months of that service are earned after age 44; or after five service credit years earned in PERS Plan 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or they may retire at age 55 with ten years of service. PERS Plan 3 members who retire prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit, and Plan 3 provides the same cost‐of‐living allowance as Plan 2.

The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board.

Judicial Benefit Multiplier

Beginning January 1, 2007 through December 31, 2007, judicial members of PERS were given the choice to participate in the Judicial Benefit Multiplier Program (JBM) enacted in 2006. Justices and judges in PERS Plan 1 and 2 were able to make a one‐time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5 percent multiplier. The benefit would be capped at 75 percent of AFC. Judges in PERS Plan 3 could elect a 1.6 percent of pay per year of service benefit, capped at 37.5 percent of average compensation.

Members who chose to participate in JBM would: accrue service credit at the higher multiplier beginning with the date of their election, be subject to the benefit cap of 75 percent of AFC, pay higher contributions, stop contributing to the Judicial Retirement Account (JRA), and be given the option to increase the multiplier on past judicial service. Members who did not choose to participate would: continue to accrue service credit at the

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regular multiplier, continue to participate in the JRA, if applicable; never be a participant in the JBM Program; and continue to pay contributions at the regular PERS rate.

Newly elected or appointed justices and judges who chose to become PERS members on or after January 1, 2007, or who had previously opted into PERS membership, were required to participate in the JBM Program. Members required to be in the JBM program would: return to prior PERS Plan if membership had previously been established; be mandated into Plan 2 and not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute to JRA; and not have the option to increase the multiplier for past judicial service.

There are 1,192 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2008:

Retirees and beneficiaries receiving benefits $ 73,122

Terminated plan members entitled to but not yet receiving benefits 27,267

Active plan members vested 105,212

Active plan members non‐vested 56,456

Total $ 262,057

Funding policy:

Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer and employee contribution rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan 1 are established by statute at six percent for state agencies and local government unit employees, and at 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS Plan 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee’s age. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that participate in the program. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.40 and 41.45 RCW.

The required contribution rates expressed as a percentage of current‐year covered payroll, as of December 31, 2009, were as follows:

Members not participating in JBM:

PERS Plan 1 PERS Plan 2 PERS Plan 3

Employer* 5.31%** 5.31%** 5.31%***

Employee 6.00%**** 3.9%**** *****

* The employer rates include the employer administrative expense fee currently set at 0.16%. ** The employer rate for state elected officials is 7.89% for Plan 1 and 5.31% for Plan 2 and Plan 3. ***Plan 3 defined benefit portion only. ****The employee rate for state elected officials is 7.5% for Plan 1 and 3.9% for Plan 2. ***** Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member.

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Members participating in JBM:


Employer‐State Agency* 7.81% 7.81% 7.81%

Employer‐Local Gov.* 5.31% 5.31% 5.31%

Employee‐State Agency 9.76% 7.25% 7.50%

Employee‐Local Gov. 12.26% 9.75% 7.50%

* The employer rates include the employer administrative expense fee currently set at 0.16%. **Plan 3 defined benefit portion only. *** Minimum rate.

Both the City and the employees made the required contributions. The City’s required contributions for the years ended December 31 were as follows:


2009 169,547$ 1,360,454$ 469,801$

2008 183,162 1,407,240 470,140

2007 146,409$ 1,136,923$ 326,349$

Law Enforcement Officers and Fire Fighters Retirement System (LEOFF) Plans 1 and 2

LEOFF is a cost‐sharing multiple‐employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 are Plan 2 members. Membership in the system includes all full‐time, fully compensated, local law enforcement commissioned officers, firefighters and, as of July 24, 2005, those emergency medical technicians who were given the option and chose LEOFF Plan 2 membership. LEOFF membership is comprised primarily of non‐state employees, with Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception.

Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board’s duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan.

LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature.

LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows:

Term of service

Percent of

final average

20 or more years 2.0%

10 but less than 20 years 1.5%

5 but less than 10 years 1.0%

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The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months’ salary within the last ten years of service. A cost‐of‐living allowance is granted (based on the Consumer Price Index).

LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 50 with 20 years of service, or at the age of 53 with five years of service, with an allowance of two percent of the FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2 members who retire prior to the age of 53 receive reduced benefits. Benefits are actuarially reduced for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. There is no cap on years of service credit; and a cost‐of‐living allowance is granted (based on the Consumer Price Index), capped at three percent annually.

There are 375 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2008:

Retirees and Beneficiaries Receiving Benefits 9,268

Terminated Plan Members Entitled to but not yet Receiving Benefits 650

Active Plan Members Vested 13,120

Active Plan Members Non‐vested 3,927

Total 26,965

Funding policy:

Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. LEOFF Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to contribute at the level required by state law. The Legislature, by means of a special funding arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior service costs of LEOFF Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change of statute.

The required contribution rates expressed as a percentage of current‐year covered payroll, as of December 31, 2009, were as follows:

LEOFF Plan 1 LEOFF Plan 2

Employer* 0.16% 5.24%**

Employee 0.00% 8.46%

State N/A 3.38%

*The employer rates include the employer administrative expense fee currently set at 0.16%. **The employer rate for ports and universities is 8.99%.

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Both the City and the employees made the required contributions. The City’s required contributions for the years ended December 31 were as follows:

LEOFF Plan 1 LEOFF Plan 2

2009 1,694$ 1,131,723$

2008 1,999 1,104,947

2007 2,697$ 927,388$

Firefighters’ and Police Officers’ Pension Funds

Plan description:

The City is also the administrator of the firefighters’ and police officers’ pension plans shown as trust funds in the City’s financial reports. Separate financial statements are not issued. Both systems are closed single‐employer defined benefit plans that were established in conformance with RCW 41.18 and 41.20. These plans provide retirement benefits, disability benefits, annual cost‐of‐living adjustments, and death benefits to plan members and beneficiaries.

Membership and eligibility:

Membership is limited to firefighters’ and police officers’ employed prior to March 1, 1970 when the DRS LEOFF retirement system was established.

Firefighter plan membership as of December 31, 2009, consisted of 56 retirees and beneficiaries of which 51 were receiving benefits.

Police officer plan membership as of December 31, 2009, consisted of 34 retirees and beneficiaries of which 25 were receiving benefits.

Firefighters’ pension members are eligible for retirement after completing 5 years of service and attaining the age of 50. A member is eligible for disability benefits if disabled for a minimum of 6 months. An individual becomes vested after 5 years of service. All members are fully vested.

Police officers’ pension plan members are eligible for benefits after completing 25 years of service. A member is eligible for disability benefits if disabled for a minimum of 6 months. An individual becomes vested after 5 years of service. All members are fully vested.

Benefit obligations:

The City’s obligation under the plans consists of paying full benefits, including payment to beneficiaries, for members who retired prior to March 1, 1970 and excess benefits over LEOFF for covered members who retired or will retire after March 1, 1970.

Pension benefits are tied to the current pay rates and/or the cost of living index. Benefits are calculated based on length of service (a percentage for each year of service) and on the AFC for the last two years of credited service.

Each member in service on March 1, 1970, receives the greater of benefit payable under the DRS LEOFF system and the benefits available under the old law. Where benefits under the old law exceed those under LEOFF, the excess benefits are paid by the pension fund of the City employing them on March 1, 1970.

There were no changes in benefit provisions in the current year.

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Summary of significant accounting policies:

The financial statements are prepared using the accrual basis of accounting. Employer contributions are recognized as revenues in the period in which they are due and the City has made a formal commitment to provide the contributions. Benefits and refunds are recorded when due and payable in accordance with the terms of each plan.

Investments:

Details of plan investments are included in Note IV‐A. The fair value of investments in these funds are determined by their market value.

Funding policy and contributions:

The general fund is responsible for ensuring that each of the pension funds have adequate cash to pay their benefit obligations and administrative expenses each year. There have been no required employee contributions to the firefighters’ or police officers’ pension plans since March 1, 1970.

The firefighters’ pension plan employer contributions for 2009 consisted of $838,478 of City levied property tax, $103,440 of state fire insurance premium tax, and $86,483 of general fund contribution for an annual total of $1,028,401.

The police officers’ pension plan employer contributions for 2009 consisted solely of $17,559 of unclaimed property auction proceeds.

Funding status and progress:

Actuarial valuations of these plans are performed every two years, with the most recent valuation being performed to determine the funded status as of December 31, 2008. The actuarial assumptions involving investment earnings and salary growth for both police officers’ and firefighters' pension plans have been determined in accordance with the recommendation of the system’s retained actuary. Under LEOFF, the benefit is adjusted after retirement in proportion to the change in the Consumer Price Index (CPI). Most adjustments are based on the change in salary for the rank the members held at retirement. The salaries are based on salary and benefits surveys collected by the Association of Washington Cities (AWC) for an upper‐level police officer and firefighter. The CPI figures are for Urban Wage Earners and Clerical Worker, Seattle‐Everett, Washington, which is the basis of LEOFF increases. The amortization period is “30 year closed” beginning January 1, 1997. As of December 31, 2009 there are 17 years remaining.

While assumptions are made regarding mortality, inflation and wage rates, our actuary presents a cash flow projection rather than an actuarial funding plan to liquidate any unfunded liabilities. The City uses this cash flow projection to budget annual amounts to transfer to these plans for benefits. The ARC is computed using the entry age normal cost method. Under this method the projected benefits are allocated on a level basis as a percentage of salary over the earnings of each individual between entry age and assumed exit age. The actuarial value of assets is the market value. The amortization period used for unfunded obligations is 20 years.

The following assumptions are used in the most current study:

• 5.5% investment return on present and future assets • 4.0% per year salary inflation compounded annually • CPI increases of 3.0% per year

As of the last valuation date, December 31, 2008, the firefighters’ pension plan is 64.5% funded and the police officers’ pension plan is 145.9% funded.

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Annual Pension Cost (APC) and Net Pension Obligation (NPO)

Firefighters' Police Officers'12/31/09 12/31/09

Annual required contribution (ARC) 219,490$ (84,599)$ Interest on net pension obligation (NPO) (188,625) (141,137) Actuarial adjustment to ARC 272,019 203,536

Annual pension cost (APC) 302,884 (22,200) Employer contributions (1,028,402) (17,559)

Increase / (decrease) in net pension obligation (725,518) (39,759) Net pension obligation (asset) at beginning of year (3,429,538) (2,566,121)

Net pension obligation (asset) at end of year (4,155,056)$ (2,605,880)$

Three‐year pension trend information

Year ending

Annual pension

cost (APC)

Employer

contributions

Contribution as

a % of APC

Net pension

obligation

(NPO)

Firefighters' 12/31/07 418,229$ 891,820$ 213.2% (2,704,383)$ 12/31/08 432,966 1,158,121 267.5% (3,429,538) 12/31/09 302,884$ 1,028,402$ 339.5% (4,155,056)$

Police Officers' 12/31/07 (1,058)$ 447,709$ ‐42316.5% (2,514,119)$

12/31/08 12,813 64,815 505.9% (2,566,121)

12/31/09 (22,200)$ 17,559$ ‐79.1% (2,605,880)$

The trend information is intended to provide an indication of the progress being made in accumulating sufficient assets to pay benefits when due. A negative net pension obligation is the result of the City overpaying its annual required pension cost.

V‐F Other post employment benefits (OPEB)

Firefighters’ and Police Officers’ Medical and Long‐Term Care Plans

Plan description:

In addition to the pension benefits described in Note V‐E, the City is also the administrator of the Firefighters’ and Police Officers’ defined benefit post‐employment medical and long‐term care plans. Both plans are closed single‐employer defined benefit plans shown as trust funds in the City’s financial reports. Separate financial statements are not issued. In accordance with RCW 41.26 the City provides lifetime health care benefits for firefighters’ and police officers’ who established membership after June 8, 1961 and before October 1, 1977.

Membership and eligibility:

As of December 31, 2009, there are 135 LEOFF I employees and former employees of the City who have established membership after June 8, 1961 and before October 1, 1977. Of these 135 employees, 75 firefighters’ and 49 police officers’ currently meet the retirement eligibility requirements.

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Benefit obligations:

The City’s obligation under the plans consists of paying retired LEOFF I members’ lifetime usual and customary medical and long‐term care services not payable from another source. The Bellingham Fire and Police Pension Boards’ review claims and designate the health care services and expenses to be covered.

Summary of significant accounting policies:

The financial statements are prepared using the accrual basis of accounting. Employer contributions are recognized as revenues in the period in which they are due and the City has made a formal commitment to provide the contributions. Benefits and refunds are recorded when due and payable in accordance with the terms of each plan.

Investments:

Details of plan investments are included in Note IV‐A. The fair value of investments in these funds are determined by their market value.

Funding policy and contributions:

The general fund is responsible for ensuring that the fund has adequate cash to pay its benefit obligations and administrative expenses each year. The medical care benefits are funded on a pay‐as‐you‐go basis. The long‐term care benefits are being pre‐funded.

The firefighters’ medical and long‐term care plan employer contributions for 2009 consisted of $966,252 of City levied property tax and $92,959 of general fund contribution.

The police officers’ medical and long‐term care plan employer contributions for 2009 consisted solely of $852,957 of general fund contribution.

Member benefits and expenses:

In 2009, the City purchased group insurance from Association of Washington Cities (AWC) to provide comprehensive medical coverage for LEOFF I retirees under the age of 65 and supplemental medical coverage for LEOFF I retirees over the age of 65. The City reimburses Medicare Part B premiums for eligible LEOFF I retirees over the age of 65.

The fixed AWC insurance premiums paid in 2009 were $1,136 per month for retirees not enrolled in Medicare and $787 per month for retirees enrolled in Medicare. The Medicare Part B insurance premiums paid in 2009 were $96 per month.

OPEB medical and long‐term care benefit and expenses paid in 2009

Firefighters' Police Officers'

Medical insurance premiums 898,784$ 587,970$ Prescriptions 31,022 21,736 Medical and rehabilitation equipment 12,946 4,976 Medical services 15,624 4,840 Long‐term care 167,999 136,863 Administrative expenses 7,876 15,100

Total 1,134,251$ 771,485$

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Funding status and progress:

Actuarial valuations of these plans are performed every two years, with the most recent valuation being performed to determine the funded status as of December 31, 2008. The actuarial assumptions involving investment earnings and salary growth for both police officers’ and firefighters' long‐term care plans have been determined in accordance with the recommendation of the system’s retained actuary.

While assumptions are made regarding mortality, inflation and wage rates, our actuary presents a cash flow projection rather than an actuarial funding plan to liquidate any unfunded liabilities. The City uses this cash flow projection to budget annual amounts to transfer to these plans for benefits. The ARC is computed using the entry age normal cost method. Under this method the projected benefits are allocated on a level basis as a percentage of salary over the earnings of each individual between entry age and assumed exit age. The actuarial value of assets is the market value of assets. The amortization period used for unfunded obligations is 28 years.

The following assumptions are used in the most current study:

• 5.5% investment return on present and future assets • 4.5 % long‐term care expense inflation

As of the last valuation date, December 31, 2008 the firefighters’ OPEB long‐term care plan is 7.1% funded and the police officers’ OPEB long‐term care plan is 13.6% funded.

Annual OPEB cost (AOC) and net OPEB obligation

Firefighters' Police Officers'

12/31/09 12/31/09Annual required contribution (ARC) 1,400,119$ 915,952$ Interest on net OPEB obligation 15,407 (17,042)

Actuarial adjustment to ARC (19,105) 21,133

Annual OPEB cost (AOC) 1,396,421 920,043 Employer contributions (1,059,211) (852,957)

Increase / (decrease) in net OPEB obligation 337,210 67,086 Net OPEB obligation (asset) at beginning of year 280,123 (309,856)

Net OPEB obligation (asset) at end of year 617,333$ (242,770)$

Three‐year OPEB trend information

Year endingAnnual OPEB

(AOC)Employer

contributionsContribution as a % of AOC

Net OPEB obligation

Firefighters' 12/31/07 1,308,512$ 1,025,822$ 78.4% 67,953$ 12/31/08 1,305,298 1,093,128 83.7% 280,123 12/31/09 1,396,421$ 1,059,211$ 75.9% 617,333$

Police Officers' 12/31/07 929,670$ 760,982$ 81.9% (141,168)$

12/31/08 927,933 1,096,621 118.2% (309,856)

12/31/09 920,043$ 852,957$ 92.7% (242,770)$

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The trend information is intended to provide an indication of the progress being made in accumulating sufficient assets to pay benefits when due. A negative net OPEB obligation is the result of the City overpaying its annual required OPEB cost.

The statement of net assets and the statement of changes in plan net assets for the trust funds are presented below with separation between the pension, medical care, and long‐term care plans.

Long‐termPension Medical Care Total

ASSETSCash and cash equivalents 567,836$ ‐$ 227,638$ 795,474$ Investments: Governments securities 2,616,592 ‐ 1,204,926 3,821,518 Receivables, net 63,306 ‐ 8,743 72,049 Interfund loans receivable 2,153,958 ‐ ‐ 2,153,958

Total assets 5,401,692 ‐ 1,441,307 6,842,999

LIABILITIESAccounts payable 14,154 ‐ ‐ 14,154 Accrued pension benefits 52,397 ‐ ‐ 52,397 Other liabilities 44,888 ‐ ‐ 44,888

Total liabilities 111,439 ‐ ‐ 111,439

NET ASSETSHeld in trust for employees' pension and OPEB benefits 5,290,253$ ‐$ 1,441,307$ 6,731,560$

December 31, 2009

Statement of Net AssetsFirefighters' Pension & OPEB

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Long‐termPension Medical Care Care Totals

ADDITIONSContributions:Taxes 941,918$ 966,252$ ‐$ 1,908,170$ Employer contributions 86,483 ‐ 92,959 179,442

Total trust contributions 1,028,401 966,252 92,959 2,087,612

Investment income:Interest 174,995 ‐ 54,585 229,580 Net increase in fair value of investments (26,504) ‐ (18,367) (44,871)

Net investment income 148,491 ‐ 36,218 184,709

Total additions 1,176,892 966,252 129,177 2,272,321

DEDUCTIONSBenefits 646,970 958,376 167,999 1,773,345 Administration expense 2,010 7,876 ‐ 9,886

Total deductions 648,980 966,252 167,999 1,783,231

NET INCREASEIncrease (decrease) in net assets held in trust for employees' pension & OPEB benefits 527,912 ‐ (38,822) 489,090 Net assets held in trust for emmployees'

pension & OPEB benefits, January 1, 2009 4,762,341 ‐ 1,480,129 6,242,470

Net assets held in trust for employees' pension & OPEB benefits, December 31, 2009 5,290,253$ ‐$ 1,441,307$ 6,731,560$

Firefighters' Pension & OPEBDecember 31, 2009

Statement of Changes in Plan Net Assets

Long‐termPension Medical Care Total

ASSETSCash and cash equivalents 563,035$ ‐$ 338,974$ 902,009$ Investments: Governments securities 2,554,582 ‐ 1,778,738 4,333,320 Receivables, net 18,538 ‐ 12,908 31,446

Total assets 3,136,155 ‐ 2,130,620 5,266,775

LIABILITIESAccounts payable 8,549 ‐ ‐ 8,549 Other liabilities 13,560 ‐ ‐ 13,560

Total liabilities 22,109 ‐ ‐ 22,109

NET ASSETSHeld in trust for employees 'pension & OPEB benefits 3,114,046$ ‐$ 2,130,620$ 5,244,666$

December 31, 2009

Statement of Net AssetsPolice Officer's Pension & OPEB

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Long‐termPension Medical Care Care Totals

ADDITIONSContributions:Auction Proceeds 17,559$ ‐$ ‐$ 17,559$ Employer contributions ‐ 634,622 218,335 852,957

Total trust contributions 17,559 634,622 218,335 870,516

Investment income:Interest 90,889 ‐ 65,110 155,999 Net increase in fair value of investments (38,861) ‐ (24,184) (63,045)

Net investment income 52,028 ‐ 40,926 92,954

Total additions 69,587 634,622 259,261 963,470

DEDUCTIONSBenefits 170,063 619,522 136,863 926,448 Administration expense 913 15,100 ‐ 16,013

Total deductions 170,976 634,622 136,863 942,461

NET INCREASEIncrease (decrease) in net assets held in trust for employees' pension & OPEB benefits (101,389) ‐ 122,398 21,009 Net assets held in trust for employees'

pension & OPEB benefits, January 1, 2009 3,215,435 ‐ 2,008,222 5,223,657

Net assets held in trust for employees' pension & OPEB benefits, December 31, 2009 3,114,046$ ‐$ 2,130,620$ 5,244,666$

Police Officers' Pension & OPEBDecember 31, 2009

Statement of Changes in Plan Net Assets

V‐G Endowments

Greenways maintenance endowment fund – This endowment was created internally by ordinance 1998‐02‐004. In November 1997 the voters passed a ballot issue to levy increased property taxes in the amount of $20,000,000 over nine years to provide funds for continuing acquisition, improvement and maintenance of current and future open space, greenways, parks, athletic fields, recreation facilities, trails and wetlands. The City created two funds to account for this levy. The first was the beyond greenways fund with 90% of the levy property tax receipts, to be used for acquisition and development/improvement of property. The second was the beyond greenways endowment fund with 10% of the levy property tax receipts, interest earned but not yet needed for operation purposes and any principal donations that are intended to be kept in a nonexpendable trust.

On May 16, 2006 the voters passed a ballot issue authorizing the City to increase its regular property tax in the levy to $2.49 per thousand (representing a continuation of $.057 per thousand from the beyond greenways levy) of assessed valuation on all of the taxable property within the City, for collection in 2007 and to increase such levy for each of the nine succeeding years as allowed by RCW 84.55 to be used for the costs of parks, greenways, trail, and open space property acquisition, development, and maintenance. The City created the greenways III fund to account for 91% of the levy property tax receipts, to be used for acquisition and development/improvement of property. 9% of the levy property tax receipts, interest earned but not yet needed for operation purposes, are deposited into the endowment fund.

Ordinance 2007‐04‐034 changed the name of the beyond greenways endowment fund to greenways maintenance endowment fund. This ordinance also expanded the scope of the fund to include revenues from the greenways III levy and maintenance activities for properties acquired or developed with any greenway levy funds.

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The interest earned within the greenways maintenance endowment fund is directly credited to the general fund or transferred when needed. It helps pay for parks and recreations department maintenance of properties acquired and developed with beyond greenways funds.

As of December 31, 2009, a total of $3,076,747 in property taxes and donations has been receipted into the endowment fund. Interest in the amount of $315,073 remains unspent.

Natural resource protect and restore fund – As a result of the Olympic Pipeline disaster occurring in June 1999, an agreement was reached in December 2003 between the City of Bellingham and the Department of Ecology, State of Washington, establishing an endowment fund to be used solely for (a) the purchase of conservation easements or (b) restoration of damaged ecological processes. Ordinance 2004‐01‐001 incorporated the agreement and its governing rules and regulations. The $4,000,000 endowment was received December 16, 2003.

According to the terms of the agreement, the corpus (or original lump revenue) cannot be expended for fifty (50) years. Only the interest earned by that corpus or any other outside revenues received (such as donations) may be expended for (a) or (b) as defined above. As of December 31, 2009, interest in the amount of $525,809 remains unspent.

The fund balance of the endowment fund is reflected in the governmental portion of the statement of net assets and the statement of activities. Washington State authorizes the spending of net appreciation on investments of endowments in RCW 24.44. Investments for the endowment funds meet the same criteria as other City funds. The City’s investment risk is described in note IV‐A.

V‐H Restricted net assets

The government‐wide statement of net assets reports $49,355,415 of restricted net assets, of which $12,907,887 is restricted by enabling legislation.

V‐I Closed funds

Fund 112 – In 2009 the City finished projects that were budgeted in the arterial street fund. All funding was expended and the fund was closed.

Fund 264 – In 2009 the City made the final bond payment on the LID 1099 LID Barkley Blvd and the debt service fund was closed into the LID guaranty fund.

Fund 271 – In 2009 the City made the final bond payment on the LID 1107/08 LID Telegraph/Barkley and the debt service fund was closed into the LID guaranty fund.

Fund 341 – In 2009 the City finished the Civic Field improvement project that was accounted for in this construction fund. All funding was expended and the fund was closed.

V‐J Prior period adjustments

In 2009, the parking fund includes a prior period adjustment of $127,503 for network electronic pay station equipment that was previously booked as assets. During 2007 the City changed its capital asset policy and increased its capitalization threshold amounts. Capital assets that were below the new thresholds were retired accordingly. Because the City classifies network equipment as standalone capital assets, this pay station equipment in the parking fund asset accounts do not meet the new threshold amounts.

V‐K Accounting and reporting changes

In years past, the City has reported the portion of Municipal Court account receivables (parking and criminal traffic fines, forfeits, etc.) due directly to the City in the government‐wide statements. The estimate for uncollectable was 56% and 50% respectively. At the direction of the Washington State Auditors Office, in 2009,

4-69


the City is reporting these receivables in the general fund and with an allowance for uncollectable of 90.8%. The revised uncollectable number is based on the average collections for these fines, forfeits, etc. over the last three years as calculated by the Washington State Administrator of Courts. This change in accounting procedure (specifically the increase in the estimate for uncollectable to 90.8%) resulted in a reduction of governmental unrestricted net assets of $5.9 million.

4-70

City of Bellingham CAFR 2009 Required Supplementary Information

REQUIRED SUPPLEMENTARY INFORMATION

Actuarial valuations for the following pension and OPEB long‐term care plans are performed every two years using the Entry Age Normal Cost Method. The most recent valuation was performed December 31, 2008 and the next scheduled valuation date is December 31, 2010. OPEB long‐term care funding began in year 2004 therefore only 4 years of data are available.

Schedule of funding progress for pension funds

Valuationdate

Actuarialvalue ofassets

Actuarialliabilitiesentry age

Unfundedactuarialliabilities(UAL)

Fundedratio

Firefighters' 12/31/2004 3,176,000$ 8,381,000$ 5,205,000$ 37.9%12/31/2006 3,512,000 8,204,000 4,692,000 42.8%12/31/2008 4,762,000 7,385,000 2,623,000 64.5%

Police Officers' 12/31/2004 1,298,000 2,626,000 1,328,000 49.4%12/31/2006 2,684,000 2,142,000 (542,000) 125.3%12/31/2008 3,216,000$ 2,205,000$ (1,011,000)$ 145.9%

Schedule of employer contributions for pension funds

Year ending

Annual required

contribution Employer

contributionsPercentage contributed

Firefighters' 12/31/2004 371,524$ 479,515$ 129.1%12/31/2005 395,775 534,883 135.1%12/31/2006 395,775 744,634 188.1%12/31/2007 372,881 891,820 239.2%12/31/2008 372,881 1,158,121 310.6%12/31/2009 219,490 1,028,401 468.5%

Police Officers' 12/31/2004 125,523 269,412 214.6%12/31/2005 100,937 178,774 177.1%12/31/2006 100,937 1,416,813 1403.7%12/31/2007 (43,044) 447,709 ‐1040.1%12/31/2008 (43,044) 64,815 ‐150.6%12/31/2009 (84,599)$ 17,559$ ‐20.8%

5-1

City of Bellingham CAFR 2009 Required Supplementary Information

Schedule of funding progress for OPEB long‐term care

Valuationdate

Actuarialvalue ofassets

Actuarialliabilitiesentry age

actuarialliabilities

(UAL)Funded

ratio

Firefighters' 12/31/2006 1,228,000$ 21,255,000$ 20,027,000$ 5.8%12/31/2008 1,480,000 20,939,000 19,459,000 7.1%

Police Officers' 12/31/2006 1,298,000 15,500,000 14,202,000 8.4%12/31/2008 2,008,000$ 14,738,000$ 12,730,000$ 13.6%

Unfunded

Schedule of employer contributions for OPEB long‐term care

Year endingAnnual required contribution

Employer contributions

Percentage contributed

Firefighters' 12/31/2006 1,306,122$ 1,520,859$ 116.4%12/31/2007 1,306,122 1,025,822 78.5%12/31/2008 1,306,122 1,093,128 83.7%12/31/2009 1,400,119 1,059,211 75.7%

Police Officers' 12/31/2006 926,221 1,236,077 133.5%12/31/2007 926,221 760,982 82.2%12/31/2008 926,221 1,096,621 118.4%12/31/2009 915,952$ 852,957$ 93.1%

5-2

TotalSpecial Debt Nonmajor

Revenue Service Permanent GovernmentalASSETS Funds Funds Funds FundsCash and cash equivalents 3,468,421$ 82,149$ 884,653$ 4,435,223$ Investments 16,662,563 394,651 4,249,937 21,307,151 Receivables, net 94,605 120,661 9,365 224,631 Due from other governments 717,249 - - 717,249 Due from component units - - 2,800,000 2,800,000 Special assessments - deferred - 1,241,405 - 1,241,405

Total assets 20,942,838 1,838,866 7,943,955 30,725,659

LIABILITIES AND FUND BALANCESLIABILITIESAccounts payable 771,488 - - 771,488 Accrued wages and benefits 154,281 - - 154,281 Other liabilities 142,840 114 118 143,072 Deferred revenue 94,605 1,250,829 9,365 1,354,799

Total liabilities 1,163,214 1,250,943 9,483 2,423,640

FUND BALANCESReserved fund balances - 587,923 7,076,747 7,664,670 Unreserved fund balances 19,779,624 - 857,725 20,637,349

CITY OF BELLINGHAMCombining Balance Sheet

Nonmajor Governmental FundsDecember 31, 2009

, , , , ,

Total fund balances 19,779,624 587,923 7,934,472 28,302,019 Total liabilities and fund balances 20,942,838$ 1,838,866$ 7,943,955$ 30,725,659$

6-2

TotalSpecial Debt Capital Nonnmajor

Revenue Service Projects Permanent GovernmentalFunds Funds Funds Funds Funds

REVENUESTaxes 6,506,599$ 358,328$ -$ 369,565$ 7,234,492$ Intergovernmental revenue 4,212,090 - - - 4,212,090 Charges for services 2,439,948 - - - 2,439,948 Investment income 459,367 12,512 646 160,358 632,883 Miscellaneous revenues 307,406 605,693 - - 913,099

Total revenues 13,925,410 976,533 646 529,923 15,432,512


General government services 784,518 - - - 784,518 Public safety 4,184,259 - - - 4,184,259 Physical environment 1,915,346 - - 19,426 1,934,772 Economic environment 14,763 - - - 14,763 Cultural and recreation 2,333,983 - - - 2,333,983

Debt service:Redemption of general long-term debt - 1,594,918 - - 1,594,918 Interest and other debt service cost - 370,930 - - 370,930

Capital outlay 11,883,405 - 140,618 1,494 12,025,517 Total expenditures 21,116,274 1,965,848 140,618 20,920 23,243,660

CITY OF BELLINGHAMCombining Statement of Revenues, Expenditures and Changes in Fund Balances

For the Year Ended December 31, 2009Nonmajor Governmental Funds

Excess (deficiency) of revenues Over (under) expenditures (7,190,864) (989,315) (139,972) 509,003 (7,811,148)

OTHER FINANCING SOURCES (USES)Transfers in 496,577 1,169,566 - - 1,666,143 Transfers out (895,064) (88,437) - (5,000) (988,501)

Total other financing sources (uses) (398,487) 1,081,129 - (5,000) 677,642 Net change in fund balances (7,589,351) 91,814 (139,972) 504,003 (7,133,506)

Fund balances - beginning 27,368,975 496,109 139,972 7,430,469 35,435,525 Fund balances - ending 19,779,624$ 587,923$ -$ 7,934,472$ 28,302,019$

6-3

City of Bellingham Financial SectionCAFR 2009

SPECIAL REVENUE FUNDS 112 – Arterial Street Construction Responsible for upgrading arterial roadways. Recurring revenue comes from state shared fuel tax.Project funding is supplemented by street related grants. Established by Ordinance 7727. This fundwas closed in 2009. 113 – Paths & Trails Reserve Establishes and maintains paths and trails for bicyclists, equestrians and pedestrians. The source ofrevenue is one‐half of one percent of motor vehicle fuel taxes received by the street fund. Fundsmust be expended for the purpose required within ten years of receipt. Established in the 1975Budget by Ordinance 8356. 123 – Park Site Acquisition Acquisition of land for parks, playgrounds, open space or greenbelts in areas deemed appropriate bythe City Council. The source of revenue is a charge of $50 per lot in subdivisions that do not dedicateor set aside property for park purposes. Established by Ordinance 8414. 124 – Technology Replacement and Reserve Created to fund the acquisition or replacement of computer system hardware and software.Amounts approved by City Council are transferred from other funds. Originally established byOrdinance 9961 and modified by Ordinance 2007‐11‐091. Goal for ending fund balance is $300,000for use in the event of an emergency as determined by Council in their sole discretion involvingtechnology resource. 125 – Capital Maintenance A cumulative reserve to meet needs for repairs, maintenance, non‐capital remodeling and non‐

SPECIAL REVENUE FUNDS 112 – Arterial Street Construction Responsible for upgrading arterial roadways. Recurring revenue comes from state shared fuel tax.Project funding is supplemented by street related grants. Established by Ordinance 7727. This fundwas closed in 2009. 113 – Paths & Trails Reserve Establishes and maintains paths and trails for bicyclists, equestrians and pedestrians. The source ofrevenue is one‐half of one percent of motor vehicle fuel taxes received by the street fund. Fundsmust be expended for the purpose required within ten years of receipt. Established in the 1975Budget by Ordinance 8356. 123 – Park Site Acquisition Acquisition of land for parks, playgrounds, open space or greenbelts in areas deemed appropriate bythe City Council. The source of revenue is a charge of $50 per lot in subdivisions that do not dedicateor set aside property for park purposes. Established by Ordinance 8414. 124 – Technology Replacement and Reserve Created to fund the acquisition or replacement of computer system hardware and software.Amounts approved by City Council are transferred from other funds. Originally established byOrdinance 9961 and modified by Ordinance 2007‐11‐091. Goal for ending fund balance is $300,000for use in the event of an emergency as determined by Council in their sole discretion involvingtechnology resource. 125 – Capital Maintenance A cumulative reserve to meet needs for repairs, maintenance, non‐capital remodeling and non‐capital improvements to facilities. Established in the 1987 Budget by Ordinance 9629. 126 – Library Gift Accumulates cash gifts to the library from private sources. Expenditures are made to provide booksor other materials for the library. Established by Ordinance 7573 and transferred to special revenueclassification by Ordinance 2001‐11‐086. 131 – Olympic Pipeline Incident Created for the purpose of accounting for funds to implement maintenance and monitoring tasks onWhatcom Creek pursuant to the Olympic Pipeline Whatcom Creek Restoration Plan. Established byOrdinance 2005‐10‐082. 132 – Squalicum Park/Olympic Created to account for the proceeds of a portion of the settlement from Olympic Pipeline to be usedfor Squalicum Park. This fund will be closed after all proceeds placed in the fund have beendisbursed. Established by Ordinance 2004‐01‐002.

6-5


133 – Olympic Restoration Created for the purpose of accounting for funds to complete restoration projects on Whatcom Creekpursuant to the Olympic Pipeline Whatcom Creek Restoration Plan. Established by Ordinance 2005‐10‐083. 134 – Olympic‐Whatcom Falls Park Addition Created for the purpose of accounting for the settlement funds from the Olympic‐Whatcom FallsPark Addition property settlement. This fund will be closed after all proceeds placed in the fund havebeen disbursed. 135 – Little Squalicum – Oeser Settlement Created to account for the settlement funds from the Oeser property settlement. Established byOrdinance 2006‐01‐001. 141 – First ¼% Real Estate Excise Tax Proceeds from this tax fund construction, repair, replacement, rehabilitation, or improvementprojects as authorized by RCW 82.46.010. Established by Ordinance 9270 and amended byOrdinance 10273.

142 – Second ¼% Real Estate Excise Tax Proceeds from the second ¼% real estate tax are used solely for financing capital projects specifiedin a capital facilities plan element of the comprehensive plan as authorized by RCW 82.46.035.Established by Ordinance 1027. 151 – Police Federal Equitable Sharing Created when the City entered into agreement with the Department of the Treasury to participate inthe program for federally forfeited property or proceeds. Money received under the program is

133 – Olympic Restoration Created for the purpose of accounting for funds to complete restoration projects on Whatcom Creekpursuant to the Olympic Pipeline Whatcom Creek Restoration Plan. Established by Ordinance 2005‐10‐083. 134 – Olympic‐Whatcom Falls Park Addition Created for the purpose of accounting for the settlement funds from the Olympic‐Whatcom FallsPark Addition property settlement. This fund will be closed after all proceeds placed in the fund havebeen disbursed. 135 – Little Squalicum – Oeser Settlement Created to account for the settlement funds from the Oeser property settlement. Established byOrdinance 2006‐01‐001. 141 – First ¼% Real Estate Excise Tax Proceeds from this tax fund construction, repair, replacement, rehabilitation, or improvementprojects as authorized by RCW 82.46.010. Established by Ordinance 9270 and amended byOrdinance 10273.

142 – Second ¼% Real Estate Excise Tax Proceeds from the second ¼% real estate tax are used solely for financing capital projects specifiedin a capital facilities plan element of the comprehensive plan as authorized by RCW 82.46.035.Established by Ordinance 1027. 151 – Police Federal Equitable Sharing Created when the City entered into agreement with the Department of the Treasury to participate inthe program for federally forfeited property or proceeds. Money received under the program isspent pursuant to federal guidelines. Established by Ordinance 10623. 152 – Asset Forfeiture/Drug Enforcement Proceeds of seizures are deposited into this fund. Used exclusively for expansion of narcoticsenforcement services. Established by Ordinance 9894 and amended by Ordinance 10624. 153 – Criminal Justice Funded by state entitlements. Supplements staffing costs and capital equipment purchases.Established by Ordinance 1999‐07‐045. 160 – Public Safety Dispatch Provides communication services for Bellingham’s police, fire and EMS units, and participating publicsafety agencies in the surrounding County. This separate fund facilitates reporting financialoperations to user agencies and to the 911 Center’s Board of Administration. Funded by useragencies. Established by Ordinance 9165.

6-6


172 – Beyond Greenway Levy Funded by increased property tax of $.57 per thousand of assessed valuation, to be collected overnine years, not to exceed $20 million. Continues the acquisition, improvement and maintenance ofgreenways areas begun by the original greenway levy. Voter approved levy passed in 1997. The fundwas established by Ordinance 1998‐02‐004. 173 – Greenway III Levy Funded by increased property tax of $.57 per thousand of assessed valuation, to be collected overten years. Continues the acquisition, improvement and maintenance of greenways areas begun bythe original greenway levy. Voter approved levy passed in 2006. The fund was established byOrdinance 2007‐01‐004. 177 – Park Impact Fee Park impact fees, as authorized by Ordinance 2006‐02‐012, are placed in this fund. Funds areinvested until needed, and the interest income remains with the park impact fee fund until the feesand interest are either refunded to the property owner or utilized as part of the resources for anapproved project. Established by Ordinance 2006‐02‐012. 178 – Sportsplex Created as a repository for the security deposit and the accumulated interest on the security depositfor the Whatcom Soccer Commission lease of the Sportsplex. The lease agreement requires that anyinterest accrued on the deposited monies be added to and become part of the security deposit.Established by Ordinance 2006‐01‐001. 180 – Tourism Pays costs of tourism promotion or acquisition and operation of tourism‐related facilities. Thesource of revenue is a special excise tax of four percent on transient lodging of less than onemonth

172 – Beyond Greenway Levy Funded by increased property tax of $.57 per thousand of assessed valuation, to be collected overnine years, not to exceed $20 million. Continues the acquisition, improvement and maintenance ofgreenways areas begun by the original greenway levy. Voter approved levy passed in 1997. The fundwas established by Ordinance 1998‐02‐004. 173 – Greenway III Levy Funded by increased property tax of $.57 per thousand of assessed valuation, to be collected overten years. Continues the acquisition, improvement and maintenance of greenways areas begun bythe original greenway levy. Voter approved levy passed in 2006. The fund was established byOrdinance 2007‐01‐004. 177 – Park Impact Fee Park impact fees, as authorized by Ordinance 2006‐02‐012, are placed in this fund. Funds areinvested until needed, and the interest income remains with the park impact fee fund until the feesand interest are either refunded to the property owner or utilized as part of the resources for anapproved project. Established by Ordinance 2006‐02‐012. 178 – Sportsplex Created as a repository for the security deposit and the accumulated interest on the security depositfor the Whatcom Soccer Commission lease of the Sportsplex. The lease agreement requires that anyinterest accrued on the deposited monies be added to and become part of the security deposit.Established by Ordinance 2006‐01‐001. 180 – Tourism Pays costs of tourism promotion or acquisition and operation of tourism‐related facilities. Thesource of revenue is a special excise tax of four percent on transient lodging of less than one month,pursuant to RCW 67.28.180 and Ordinances 8319 and 10915.

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6-11

of 23 Variance with Actual Final Budget -


REVENUESInvestment income 30,382$ 30,382$ 302$ (30,080)$

Total revenues 30,382 30,382 302 (30,080)

EXPENDITURESCapital outlay - 154,232 301,893 (147,661)

Total expenditures - 154,232 301,893 (147,661) Excess (deficiency) of revenues over (under) expenditures 30,382 (123,850) (301,591) (177,741)


Net change in fund balances 30,382 (123,850) (301,591) (177,741) Fund balance - beginning 128,036 296,934 301,591 4,657 Fund balance - ending 158,418$ 173,084$ -$ (173,084)$

Budgeted Amounts


Budget and Actual GAAP BasisArterial Street Construction Fund


6-12



REVENUESIntergovernmental revenue -$ -$ 8,303$ 8,303$ Investment income 1,104 1,104 981 (123)

Total revenues 1,104 1,104 9,284 8,180

EXPENDITURESTotal expenditures - - - -

Excess (deficiency) of revenues over (under) expenditures 1,104 1,104 9,284 8,180

OTHER FINANCING SOURCES (USES)Transfers in 6,500 6,500 - (6,500)

Total other financing sources (uses) 6,500 6,500 - (6,500) Net change in fund balances 7,604 7,604 9,284 1,680

Fund balance - beginning 45,502 45,114 45,820 706 Fund balance - ending 53,106$ 52,718$ 55,104$ 2,386$

Budgeted Amounts


Budget and Actual GAAP BasisPaths and Trails Reserve Fund


6-13



REVENUESInvestment income 9,480$ 9,480$ 5,083$ (4,397)$

Total revenues 9,480 9,480 5,083 (4,397)

EXPENDITURESCapital outlay - 211,239 - 211,239

Total expenditures - 211,239 - 211,239 Excess (deficiency) of revenues over (under) expenditures 9,480 (201,759) 5,083 206,842


Net change in fund balances 9,480 (201,759) 5,083 206,842 Fund balance - beginning 57,027 240,403 244,174 3,771 Fund balance - ending 66,507$ 38,644$ 249,257$ 210,613$

Budgeted Amounts


Budget and Actual GAAP BasisPark Site Acquisition Fund


6-14



REVENUESInvestment income 92,282$ 92,282$ 36,019$ (56,263)$ Miscellaneous revenues - - 67,075 67,075

Total revenues 92,282 92,282 103,094 10,812


General government services 76,000 76,000 260,826 (184,826) Capital outlay 855,000 1,007,597 309,490 698,107

Total expenditures 931,000 1,083,597 570,316 513,281 Excess (deficiency) of revenues over (under) expenditures (838,718) (991,315) (467,222) 524,093

OTHER FINANCING SOURCES (USES)Transfers in 190,000 90,000 90,000 -

Total other financing sources (uses) 190,000 90,000 90,000 - Net change in fund balances (648,718) (901,315) (377,222) 524,093

F d b l b i i 1 485 206 1 925 629 1 957 044 31 415

Budgeted Amounts


Budget and Actual GAAP BasisTechnology Replacement and Reserve Fund


Fund balance - beginning 1,485,206 1,925,629 1,957,044 31,415 Fund balance - ending 836,488$ 1,024,314$ 1,579,822$ 555,508$

6-15




Total revenues 94,382 94,382 43,330 (51,052)


General government services 855,000 1,136,244 479,431 656,813 Public safety 40,010 67,014 21,909 45,105 Physical environment - 2,136,483 1,808,412 328,071 Economic environment - 14,763 14,763 - Culture and recreation 50,000 1,103,260 925,686 177,574 Total expenditures 945,010 4,457,764 3,250,201 1,207,563

Excess (deficiency) of revenues over (under) expenditures (850,628) (4,363,382) (3,206,871) 1,156,511

OTHER FINANCING SOURCES (USES)Transfers in 415,000 415,000 406,577 (8,423)

Total other financing sources (uses) 415 000 415 000 406 577 (8 423)

Budgeted Amounts


Budget and Actual GAAP BasisCapital Maintenance Fund


Total other financing sources (uses) 415,000 415,000 406,577 (8,423) Net change in fund balances (435,628) (3,948,382) (2,800,294) 1,148,088

Fund balance - beginning 1,215,516 4,056,369 4,122,329 65,960 Fund balance - ending 779,888$ 107,987$ 1,322,035$ 1,214,048$

6-16



REVENUESIntergovernmental revenue -$ -$ 2,522$ 2,522$ Investment income - - (271) (271) Miscellaneous revenues 15,000 45,500 43,890 (1,610)

Total revenues 15,000 45,500 46,141 641


Culture and recreation 15,000 45,500 25,764 19,736 Total expenditures 15,000 45,500 25,764 19,736

Excess (deficiency) of revenues over (under) expenditures - - 20,377 20,377


Net change in fund balances - - 20,377 20,377 Fund balance - beginning 25,148 27,904 28,341 437

Budgeted Amounts


Budget and Actual GAAP BasisLibrary Gift Fund


g g , , ,Fund balance - ending 25,148$ 27,904$ 48,718$ 20,814$

6-17




Total revenues 26,339 26,339 14,910 (11,429)


Physical environment - 795,964 106,934 689,030 Total expenditures - 795,964 106,934 689,030

Excess (deficiency) of revenues over (under) expenditures 26,339 (769,625) (92,024) 677,601


Net change in fund balances 26,339 (769,625) (92,024) 677,601 Fund balance - beginning 223,594 796,605 809,104 12,499 Fund balance - ending 249,933$ 26,980$ 717,080$ 690,100$

Budgeted Amounts


Budget and Actual GAAP BasisOlympic Pipeline Incident Fund


6-18



REVENUESInvestment income -$ -$ 2,128$ 2,128$

Total revenues - - 2,128 2,128

EXPENDITURESCapital outlay - 103,294 13,332 89,962

Total expenditures - 103,294 13,332 89,962 Excess (deficiency) of revenues over (under) expenditures - (103,294) (11,204) 92,090


Net change in fund balances - (103,294) (11,204) 92,090 Fund balance - beginning 5,805 112,307 114,068 1,761 Fund balance - ending 5,805$ 9,013$ 102,864$ 93,851$

Budgeted Amounts


Budget and Actual GAAP BasisSqualicum Park/Olympic Fund


6-19



REVENUESInvestment income 27,615$ 27,615$ 828$ (26,787)$

Total revenues 27,615 27,615 828 (26,787)


Excess (deficiency) of revenues over (under) expenditures 27,615 27,615 828 (26,787)


Net change in fund balances 27,615 27,615 828 (26,787) Fund balance - beginning 37,507 39,078 39,739 661 Fund balance - ending 65,122$ 66,693$ 40,567$ (26,126)$

Budgeted Amounts


Budget and Actual GAAP BasisOlympic Restoration Fund


6-20




Total revenues 12,848 12,848 5,217 (7,631)


Excess (deficiency) of revenues over (under) expenditures 12,848 12,848 5,217 (7,631)


Net change in fund balances 12,848 12,848 5,217 (7,631) Fund balance - beginning 247,114 246,716 250,586 3,870 Fund balance - ending 259,962$ 259,564$ 255,803$ (3,761)$

Budgeted Amounts


Budget and Actual GAAP BasisOlympic - Whatcom Falls Park Addition Fund


6-21



REVENUESIntergovernmental revenue -$ 45,920$ 44,720$ (1,200)$ Investment income 11,172 11,172 6,576 (4,596)

Total revenues 11,172 57,092 51,296 (5,796)


Culture and recreation - 298,728 40,463 258,265 Total expenditures - 298,728 40,463 258,265

Excess (deficiency) of revenues over (under) expenditures 11,172 (241,636) 10,833 252,469


Net change in fund balances 11,172 (241,636) 10,833 252,469 Fund balance - beginning 41,730 296,715 301,419 4,704 Fund balance - ending 52,902$ 55,079$ 312,252$ 257,173$

Budgeted Amounts


Budget and Actual GAAP BasisLittle Squalicum Oeser Settlement FundFor the Year Ended December 31, 2009

6-22



REVENUESTaxes 1,400,000$ 1,400,000$ 939,145$ (460,855)$ Intergovernmental revenue - - 904 904 Charges for services 300 300 - (300) Investment income 159,736 159,736 70,361 (89,375) Miscellaneous revenues - 69,704 109,705 40,001

Total revenues 1,560,036 1,629,740 1,120,115 (509,625)


General government services 60,000 73,897 20,172 53,725 Culture and recreation 141,600 155,823 104,566 51,257


Excess (deficiency) of revenues over (under) expenditures 270,238 (1,395,931) (259,225) 1,136,706


Net change in fund balances 270,238 (1,395,931) (259,225) 1,136,706 Fund balance - beginning 1,555,856 3,359,666 3,416,006 56,340 Fund balance - ending 1,826,094$ 1,963,735$ 3,156,781$ 1,193,046$

Budgeted Amounts


Budget and Actual GAAP BasisFirst 1/4% Real Estate Excise Tax FundFor the Year Ended December 31, 2009

6-23



REVENUESTaxes 1,400,000$ 1,400,000$ 939,145$ (460,855)$ Intergovernmental revenue 1,610,000 3,676,202 913,621 (2,762,581) Charges for services 300 300 - (300) Investment income 198,313 198,313 42,824 (155,489)

Total revenues 3,208,613 5,274,815 1,895,590 (3,379,225)


Culture and recreation 50,000 136,166 30,771 105,395 Capital outlay 2,360,000 7,471,243 2,484,910 4,986,333

Total expenditures 2,410,000 7,607,409 2,515,681 5,091,728 Excess (deficiency) of revenues over (under) expenditures 798,613 (2,332,594) (620,091) 1,712,503

OTHER FINANCING SOURCES (USES)Transfers out (651,877) (651,877) (651,828) 49

Total other financing sources (uses) (651 877) (651 877) (651 828) 49

Budgeted Amounts


Budget and Actual GAAP BasisSecond 1/4% Real Estate Excise Tax Fund


Total other financing sources (uses) (651,877) (651,877) (651,828) 49 Net change in fund balances 146,736 (2,984,471) (1,271,919) 1,712,552

Fund balance - beginning 107,822 3,428,995 3,484,740 55,745 Fund balance - ending 254,558$ 444,524$ 2,212,821$ 1,768,297$

6-24



REVENUESIntergovernmental revenue -$ -$ 381,057$ 381,057$ Investment income 6,879 6,879 8,470 1,591

Total revenues 6,879 6,879 389,527 382,648


Public safety 25,000 25,000 22,917 2,083 Total expenditures 25,000 25,000 22,917 2,083

Excess (deficiency) of revenues over (under) expenditures (18,121) (18,121) 366,610 384,731


Net change in fund balances (18,121) (18,121) 366,610 384,731 Fund balance - beginning 137,082 201,051 204,238 3,187 Fund balance - ending 118,961$ 182,930$ 570,848$ 387,918$

Budgeted Amounts


Budget and Actual GAAP BasisPolice Federal Equitable Fund


6-25



REVENUESInvestment income 12,382$ 12,382$ 2,548$ (9,834)$ Miscellaneous revenues 50,000 50,000 33,849 (16,151)

Total revenues 62,382 62,382 36,397 (25,985)


Public safety 82,208 107,208 97,317 9,891 Capital outlay 18,000 18,000 - 18,000

Total expenditures 100,208 125,208 97,317 27,891 Excess (deficiency) of revenues over (under) expenditures (37,826) (62,826) (60,920) 1,906


Net change in fund balances (37,826) (62,826) (60,920) 1,906 Fund balance - beginning 99,313 148,143 150,513 2,370

Budgeted Amounts


Budget and Actual GAAP BasisAsset Forfeiture/Drug Enforcement FundFor the Year Ended December 31, 2009

Fund balance - ending 61,487$ 85,317$ 89,593$ 4,276$

6-26



REVENUESIntergovernmental revenue 270,709$ 276,709$ 306,870$ 30,161$ Investment income 17,894 17,894 10,603 (7,291)

Total revenues 288,603 294,603 317,473 22,870


Public safety 140,992 146,992 81,376 65,616 Total expenditures 140,992 146,992 81,376 65,616


OTHER FINANCING SOURCES (USES)Transfers out (267,926) (267,926) (133,963) 133,963

Total other financing sources (uses) (267,926) (267,926) (133,963) 133,963 Net change in fund balances (120,315) (120,315) 102,134 222,449

Fund balance - beginning 482,764 485,614 493,458 7,844 $ $ $ $

Budgeted Amounts


Budget and Actual GAAP BasisCriminal Justice Fund



6-27



REVENUESIntergovernmental revenue 2,308,078$ 2,308,078$ 2,317,986$ 9,908$ Charges for services 1,672,738 1,672,738 1,707,504 34,766 Investment income 78,854 78,854 28,861 (49,993)

Total revenues 4,059,670 4,059,670 4,054,351 (5,319)


General government services - 24,089 24,089 - Public safety 4,030,642 4,084,170 3,960,740 123,430

Capital outlay 126,000 136,355 32,003 104,352 Total expenditures 4,156,642 4,244,614 4,016,832 227,782

Excess (deficiency) of revenues over (under) expenditures (96,972) (184,944) 37,519 222,463


Net change in fund balances (96 972) (184 944) 37 519 222 463

Budgeted Amounts


Budget and Actual GAAP BasisPublic Safety Dispatch Fund


Net change in fund balances (96,972) (184,944) 37,519 222,463 Fund balance - beginning 1,764,781 1,813,305 1,844,834 31,529 Fund balance - ending 1,667,809$ 1,628,361$ 1,882,353$ 253,992$

6-28



REVENUESTaxes -$ -$ 2,221$ 2,221$ Intergovernmental revenue - 505,240 66,635 (438,605) Charges for services 1,200 1,200 - (1,200) Investment income 70,034 70,034 37,231 (32,803)

Total revenues 71,234 576,474 106,087 (470,387)


Culture and recreation - 80,876 70,888 9,988 Capital outlay 50,000 2,566,164 910,077 1,656,087

Total expenditures 50,000 2,647,040 980,965 1,666,075 Excess (deficiency) of revenues over (under) expenditures 21,234 (2,070,566) (874,878) 1,195,688


Net change in fund balances 21 234 (2 070 566) (874 878) 1 195 688

Budgeted Amounts


Budget and Actual GAAP BasisBeyond Greenway Levy Fund


Net change in fund balances 21,234 (2,070,566) (874,878) 1,195,688 Fund balance - beginning 507,787 2,650,131 2,688,838 38,707 Fund balance - ending 529,021$ 579,565$ 1,813,960$ 1,234,395$

6-29



REVENUESTaxes 3,677,410$ 3,677,410$ 3,734,208$ 56,798$ Intergovernmental revenue 2,133,183 2,133,183 169,472 (1,963,711) Charges for services 1,200 1,200 50 (1,150) Investment income 127,526 127,526 90,864 (36,662) Miscellaneous revenues - - 50,778 50,778

Total revenues 5,939,319 5,939,319 4,045,372 (1,893,947)


Culture and recreation 56,562 225,779 121,299 104,480 Capital outlay 5,210,369 9,272,672 6,252,814 3,019,858

Total expenditures 5,266,931 9,498,451 6,374,113 3,124,338 Excess (deficiency) of revenues over (under) expenditures 672,388 (3,559,132) (2,328,741) 1,230,391

OTHER FINANCING SOURCES (USES)f ( )

Budgeted Amounts


Budget and Actual GAAP BasisGreenway III Levy Fund


Total other financing sources (uses) - - - - Net change in fund balances 672,388 (3,559,132) (2,328,741) 1,230,391

Fund balance - beginning 229,279 4,597,386 4,669,510 72,124 Fund balance - ending 901,667$ 1,038,254$ 2,340,769$ 1,302,515$

6-30



REVENUESCharges for services 500,000$ 500,000$ 732,394$ 232,394$ Investment income 77,566 77,566 43,880 (33,686)

Total revenues 577,566 577,566 776,274 198,708


Culture and recreation 20,000 20,000 5,641 14,359 Capital outlay 1,750,000 2,054,058 324,284 1,729,774

Total expenditures 1,770,000 2,074,058 329,925 1,744,133 Excess (deficiency) of revenues over (under) expenditures (1,192,434) (1,496,492) 446,349 1,942,841


Net change in fund balances (1,192,434) (1,496,492) 446,349 1,942,841 Fund balance - beginning 1,335,830 1,706,200 1,733,263 27,063 Fund balance ending 143 396$ 209 708$ 2 179 612$ 1 969 904$

Budgeted Amounts


Budget and Actual GAAP BasisPark Impact Fees Fund


Fund balance - ending 143,396$ 209,708$ 2,179,612$ 1,969,904$

6-31




Total revenues 5,909 5,909 5,617 (292)


Excess (deficiency) of revenues over (under) expenditures 5,909 5,909 5,617 (292)


Net change in fund balances 5,909 5,909 5,617 (292) Fund balance - beginning 30,661 25,956 27,800 1,844 Fund balance - ending 36,570$ 31,865$ 33,417$ 1,552$

Budgeted Amounts


Budget and Actual GAAP BasisSportsplex Fund


6-32



REVENUESTaxes 1,000,000$ 1,000,000$ 891,880$ (108,120)$ Investment income 13,432 13,432 5,114 (8,318)

Total revenues 1,013,432 1,013,432 896,994 (116,438)


Culture and recreation 1,007,344 1,103,067 1,008,905 94,162 Total expenditures 1,007,344 1,103,067 1,008,905 94,162

Excess (deficiency) of revenues over (under) expenditures 6,088 (89,635) (111,911) (22,276)

OTHER FINANCING SOURCES (USES)Transfers out (109,273) (109,273) (109,273) -

Total other financing sources (uses) (109,273) (109,273) (109,273) - Net change in fund balances (103,185) (198,908) (221,184) (22,276)

Fund balance - beginning 300,000 433,247 441,560 8,313

Budgeted Amounts


Budget and Actual GAAP BasisTourism Fund


Fund balance - ending 196,815$ 234,339$ 220,376$ (13,963)$

6-33



REVENUESTaxes 7,477,410$ 7,477,410$ 6,506,599$ (970,811)$ Intergovernmental revenue 6,321,970 8,945,332 4,212,090 (4,733,242) Charges for services 2,175,738 2,175,738 2,439,948 264,210 Investment income 1,074,129 1,074,129 459,367 (614,762) Miscellaneous revenues 65,000 165,204 307,406 142,202

Total revenues 17,114,247 19,837,813 13,925,410 (5,912,403)


General government services 991,000 1,310,230 784,518 525,712 Public safety 4,236,644 4,430,384 4,184,259 246,125 Physical environment - 2,932,447 1,915,346 1,017,101 Economic environment - 14,763 14,763 - Culture and recreation 1,340,506 3,169,199 2,333,983 835,216


Excess (deficiency) of revenues

Budgeted Amounts


Budget and Actual GAAP BasisNonmajor Special Revenue Funds


over (under) expenditures (911,470) (17,810,015) (7,190,864) 10,619,151

OTHER FINANCING SOURCES (USES)Transfers in 611,500 511,500 496,577 (14,923) Transfers out (1,029,076) (1,029,076) (895,064) 134,012

Total other financing sources (uses) (417,576) (517,576) (398,487) 119,089 Net change in fund balances (1,329,046) (18,327,591) (7,589,351) 10,738,240

Fund balance - beginning 10,063,360 26,933,468 27,368,975 435,507 Fund balance - ending 8,734,314$ 8,605,877$ 19,779,624$ 11,173,747$

6-34


DEBT SERVICE FUNDS

214 – 2001 Fire UTGO Bond $2,800,000 voted for land, construction and equipping of fire station #6 in the northern part of theCity. Established by Ordinance 2001‐03‐016.

222 – 1999 Municipal Court LTGO Bond $3,420,000 to purchase the city hall annex and remodel the facility for use as a municipal court.$500,000 of this amount paid a portion of the costs on the Fairhaven fire station replacement.Established by Ordinance 1999‐05‐029.

223 – 1996 Refunding LTGO Bond $4,195,000 for refunding portions of the outstanding Limited Tax General Obligation bonds, 1988and 1992. Established by Ordinance 10734.

224 – 2004 Sportsplex LTGO Bond $4,315,000 to finance the cost of acquiring the Sportsplex building, an indoor ice‐rink and soccerfacility. These facilities are leased to the Whatcom Soccer Commission. Established by Ordinance2004‐02‐011.

231 – Drake Note $225,000 for the Big Rock Garden Nursery. Established by Ordinances 10347, 48, 49 and 10378.

235 – PW Trust Fund Loan – Street Overlay Funding for approximately eight miles of street resurfacing and rehabilitation. Loan agreement PW 02‐691‐004.

245 – Local Improvement District (LID) Guaranty The guaranty fund assures that payments on individual LID’s will be made on time if collections

DEBT SERVICE FUNDS

214 – 2001 Fire UTGO Bond $2,800,000 voted for land, construction and equipping of fire station #6 in the northern part of theCity. Established by Ordinance 2001‐03‐016.

222 – 1999 Municipal Court LTGO Bond $3,420,000 to purchase the city hall annex and remodel the facility for use as a municipal court.$500,000 of this amount paid a portion of the costs on the Fairhaven fire station replacement.Established by Ordinance 1999‐05‐029.

223 – 1996 Refunding LTGO Bond $4,195,000 for refunding portions of the outstanding Limited Tax General Obligation bonds, 1988and 1992. Established by Ordinance 10734.

224 – 2004 Sportsplex LTGO Bond $4,315,000 to finance the cost of acquiring the Sportsplex building, an indoor ice‐rink and soccerfacility. These facilities are leased to the Whatcom Soccer Commission. Established by Ordinance2004‐02‐011.

231 – Drake Note $225,000 for the Big Rock Garden Nursery. Established by Ordinances 10347, 48, 49 and 10378.

235 – PW Trust Fund Loan – Street Overlay Funding for approximately eight miles of street resurfacing and rehabilitation. Loan agreement PW 02‐691‐004.

245 – Local Improvement District (LID) Guaranty The guaranty fund assures that payments on individual LID’s will be made on time if collectionsfrom district property holders are insufficient. Property in arrears is foreclosed and the proceedsdeposited to the guaranty fund. The balance in the guaranty fund is maintained at twelve percentof the combined assessments in the LID funds. The LID guaranty fund was established byOrdinance 4764. In 2009 debt service for LID 1099 and LID 1107/08 were paid off ahead ofschedule. These LIDs were moved to the guaranty fund until the remainder of collections fromdistrict property holders are complete. 270 – Local Improvement District (LID) Bonds $4,357,957 to finance Bakerview Road LID (I‐5 to Deemer Rd.) project. Established by ordinance10795.

6-35

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6-37



REVENUESTaxes 350,000$ 350,000$ 358,328$ 8,328$ Investment income 5,584 5,584 4,226 (1,358)

Total revenues 355,584 355,584 362,554 6,970


Redemption of general long-term debt 305,000 305,000 305,000 - Interest and other debt service cost 41,735 41,735 41,613 122 Total expenditures 346,735 346,735 346,613 122



Net change in fund balances 8,849 8,849 15,941 7,092 Fund balance - beginning 28,156 66,625 67,674 1,049



Budget and Actual GAAP Basis2001 Fire UTGO Bond Fund


Fund balance - beginning 28,156 66,625 67,674 1,049 Fund balance - ending 37,005$ 75,474$ 83,615$ 8,141$

6-38



REVENUESTotal revenues -$ -$ -$ -$




OTHER FINANCING SOURCES (USES)Transfers in 547,075 547,075 546,650 (425)


Fund balance - beginning - - - - Fund balance - ending -$ -$ -$ -$



Budget and Actual GAAP Basis1999 Municipal Court LTGO Bond FundFor the Year Ended December 31, 2009

Fund balance - ending -$ -$ -$ -$

6-39



REVENUESInvestment income -$ -$ (5)$ (5)$

Total revenues - - (5) (5)





Total other financing sources (uses) 347,648 347,648 347,526 (122) Net change in fund balances - - (5) (5)

Fund balance - beginning - - 5 5



Budget and Actual GAAP Basis1996 Refund LTGO Bond Fund


Fund balance - beginning - - 5 5 Fund balance - ending -$ -$ -$ -$

6-40



REVENUESInvestment income 2,393$ 2,393$ 2,313$ (80)$ Miscellaneous revenues 265,308 265,308 264,993 (315)

Total revenues 267,701 267,701 267,306 (395)



Excess (deficiency) of revenues over (under) expenditures 176 176 (98) (274)


Net change in fund balances 176 176 (98) (274) Fund balance - beginning 22,259 22,258 22,607 349



Budget and Actual GAAP Basis2004 Sportsplex Acq. LTGO Bond FundFor the Year Ended December 31, 2009

Fund balance - beginning 22,259 22,258 22,607 349 Fund balance - ending 22,435$ 22,434$ 22,509$ 75$

6-41












Budget and Actual GAAP BasisDrake Note Fund



6-42












Budget and Actual GAAP BasisPW Trust Fund Loan - Street Overlay Fund



6-43




Total revenues 9,375 9,375 59,259 49,884


Total expenditures - - - - Excess (deficiency) of revenues over (under) expenditures 9,375 9,375 59,259 49,884

OTHER FINANCING SOURCES (USES)Transfers in - - 88,437 88,437

Total other financing sources (uses) - - 88,437 88,437 Net change in fund balances 9,375 9,375 147,696 138,321

Fund balance - beginning 290,793 268,694 272,908 4,214 Fund balance - ending 300 168$ 278 069$ 420 604$ 142 535$



Budget and Actual GAAP BasisLID Guaranty Fund



6-44



REVENUESInvestment income -$ -$ (100)$ (100)$ Miscellaneous revenues - - 287,519 287,519

Total revenues - - 287,419 287,419


Redemption of general long-term debt - - 235,000 (235,000) Interest and other debt service cost - - 35,702 (35,702) Total expenditures - - 270,702 (270,702)

Excess (deficiency) of revenues over (under) expenditures - - 16,717 16,717

OTHER FINANCING SOURCES (USES)Transfers out - - (88,437) (88,437)

Total other financing sources (uses) - - (88,437) (88,437) Net change in fund balances - - (71 720) (71 720)



Budget and Actual GAAP BasisLID Assessment Fund


Net change in fund balances - - (71,720) (71,720) Fund balance - beginning - - 132,915 132,915 Fund balance - ending -$ -$ 61,195$ 61,195$

6-45



REVENUESTaxes 350,000$ 350,000$ 358,328$ 8,328$ Investment income 17,352 17,352 12,512 (4,840) Miscellaneous revenues 265,308 265,308 605,693 340,385

Total revenues 632,660 632,660 976,533 343,873


Redemption of general long-term debt 1,359,918 1,359,918 1,594,918 (235,000) Interest and other debt service cost 336,020 336,020 370,930 (34,910) Total expenditures 1,695,938 1,695,938 1,965,848 (269,910)

Excess (deficiency) of revenues over (under) expenditures (1,063,278) (1,063,278) (989,315) 73,963

OTHER FINANCING SOURCES (USES)Transfers in 1,081,678 1,081,678 1,169,566 87,888 Transfers out - - (88,437) (88,437)



Budget and Actual GAAP BasisDebt Service Funds


( , ) ( , )Total other financing sources (uses) 1,081,678 1,081,678 1,081,129 (549)

Net change in fund balances 18,400 18,400 91,814 73,414 Fund balance - beginning 341,208 357,577 496,109 138,532 Fund balance - ending 359,608$ 375,977$ 587,923$ 211,946$

6-46


CAPITAL PROJECT FUNDS 341 – Civic Field Improvements Created to account for the multi‐year project to remodel and improve the civic field complex. Theprimary resources for the project are transfers from other funds and a general obligation bond issue.Established by Ordinance 2003‐11‐076. This fund was closed in 2009.

6-47

Civic FieldImprovement

REVENUESInvestment income 646$

Total revenues 646

EXPENDITURESCapital outlay 140,618

Total expenditures 140,618

Excess (deficiency) of revenues over (under) expenditures (139,972)

Net change in fund balances (139,972) Fund balance - beginning 139,972 Fund balance - ending -$


Civic Field Improvement FundFor the Year Ended December 31, 2009

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Prior Current TotalProject Years' Year To Date

Authorized Actual Actual ActualREVENUESIntergovernmental revenue -$ 42,062$ -$ 42,062$ Charges for services 1,000 3,780 - 3,780 Investment income 42,302 546,650 646 547,296

Total revenues 43,302 592,492 646 593,138


Culture and recreation 48,800 95 - 95 Debt service:

Interest and other debt service cost 90,567 87,145 - 87,145 Capital outlay 14,129,173 11,799,688 140,618 11,940,306

Total expenditures 14,268,540 11,886,928 140,618 12,027,546 Excess (deficiency) of revenues over (under) expenditures (14,225,238) (11,294,436) (139,972) (11,434,408)

OTHER FINANCING SOURCES (USES)Bond issue proceeds 11,169,330 6,028,553 - 6,028,553 Premium on bond 170,091 170,092 - 170,092

CITY OF BELLINGHAMSchedule of Revenues, Expenditures and Changes in Fund Balance

Civic Field Improvement FundFrom Inception and For the Year Ended December 31, 2009

Premium on bond 170,091 170,092 170,092 Transfers in 7,793,565 5,281,455 - 5,281,455 Transfers out (45,694) (45,694) - (45,694)

Total other financing sources (uses) 19,087,292 11,434,406 - 11,434,406 Net change in fund balances 4,862,054$ 139,970$ (139,972) (2)$

Fund balance - beginning 139,972 Fund balance - ending -$

6-49


PERMANENT FUNDS 701 – Greenways Maintenance Endowment Revenue is derived from the interest earnings on principal donations for the purpose of maintainingproperties acquired and developed with greenway funds. Originally established by Ordinance 1998‐02‐004, transfer authorized by Ordinance 2001‐11‐086 to replace non‐expendable trust fund (601)in preparation of GASB 34 implementation and reporting in 2002, and modified by Ordinance 2007‐04‐034 for inclusion of the Greenways III Levy. 702 – Natural Resource Protection and Restoration This permanent fund was created in 2004 to account for the $4 million settlement passed on by theState as a part of the Olympic Pipeline Settlement. The principal cannot be spent for 50 years.Interest earnings will be spent on protection and restoration projects. Established by Ordinance2004‐01‐001.

6-51

Greenways Natural ResourceMaintenance Protection &Endowment Restoration Totals

ASSETSCash and cash equivalents 586,323$ 298,330$ 884,653$ Investments 2,816,738 1,433,199 4,249,937

9,365 - 9,365 Due from component units - 2,800,000 2,800,000

Total assets 3,412,426 4,531,529 7,943,955

LIABILITIES AND FUND BALANCESLIABILITIESOther liabilities 118 - 118 Deferred revenue 9,365 - 9,365

Total liabilities 9,483 - 9,483

FUND BALANCESReserved fund balance 3,076,747 4,000,000 7,076,747 Unreserved fund balance 326,196 531,529 857,725

Total fund balances 3,402,943 4,531,529 7,934,472 Total liabilities and fund balances 3,412,426$ 4,531,529$ 7,943,955$

CITY OF BELLINGHAMCombining Balance Sheet

Nonmajor Permanent FundsFor the Year Ended December 31, 2009

Receivables, net

6-52

Greenways Natural ResourceMaintenance Protection &Endowment Restoration Totals

REVENUESTaxes 369,565$ -$ 369,565$ Investment income 7,827 152,531 160,358

Total revenues 377,392 152,531 529,923

EXPENDITURESPhysical environment - 19,426 19,426 Capital outlay - 1,494 1,494

Total expenditures - 20,920 20,920 Excess (deficiency) of revenues over (under) expenditures 377,392 131,611 509,003

OTHER FINANCING SOURCES (USES)Transfers out (5,000) - (5,000)

Total other financing sources (uses) (5,000) - (5,000) Net change in fund balances 372,392 131,611 504,003

Fund balance - beginning 3,030,551 4,399,918 7,430,469 Fund balance - ending 3,402,943$ 4,531,529$ 7,934,472$


Nonmajor Permanent FundsFor the Year Ended December 31, 2009

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REVENUESTaxes 363,600$ 363,600$ 369,565$ 5,965$ Investment income 102,034 102,034 7,827 (94,207)

Total revenues 465,634 465,634 377,392 (88,242)


Excess (deficiency) of revenues over (under) expenditures 465,634 465,634 377,392 (88,242)

OTHER FINANCING SOURCES (USES)Transfers out - (5,000) (5,000) -

Total other financing sources (uses) - (5,000) (5,000) - Net change in fund balances 465,634 460,634 372,392 (88,242)

Fund balance - beginning 3,010,973 2,983,748 3,030,551 46,803 Fund balance - ending 3,476,607$ 3,444,382$ 3,402,943$ (41,439)$



Budget and Actual GAAP BasisGreenways Maintenance Endowment Fund


6-54



REVENUESInvestment income 85,807$ 213,807$ 152,531$ (61,276)$ Miscellaneous revenues 128,000 - - -

Total revenues 213,807 213,807 152,531 (61,276)

EXPENDITURESPhysical environment 183,000 402,123 19,426 382,697 Capital outlay - 1,113 1,494 (381)

Total expenditures 183,000 403,236 20,920 382,316 Excess (deficiency) of revenues over (under) expenditures 30,807 (189,429) 131,611 321,040


Net change in fund balances 30,807 (189,429) 131,611 321,040 Fund balance - beginning 1,277,890 1,573,604 4,399,918 2,826,314 Fund balance - ending 1,308,697$ 1,384,175$ 4,531,529$ 3,147,354$



Budget and Actual GAAP BasisNatural Resource Protection and Restoration Fund


6-55



REVENUESTaxes 363,600$ 363,600$ 369,565$ 5,965$ Investment income 187,841 315,841 160,358 (155,483) Miscellaneous revenues 128,000 - - -

Total revenues 679,441 679,441 529,923 (149,518)

EXPENDITURESPhysical environment 183,000 402,123 19,426 382,697 Capital outlay - 1,113 1,494 (381)

Total expenditures 183,000 403,236 20,920 382,316 Excess (deficiency) of revenues over (under) expenditures 496,441 276,205 509,003 232,798

OTHER FINANCING SOURCES (USES)Transfers out - (5,000) (5,000) -

Total other financing sources (uses) - (5,000) (5,000) - Net change in fund balances 496,441 271,205 504,003 232,798

Fund balance - beginning 4,288,863 4,557,352 7,430,469 2,873,117 Fund balance - ending 4,785,304$ 4,828,557$ 7,934,472$ 3,105,915$



Budget and Actual GAAP BasisNonmajor Permanent Funds


6-56


ENTERPRISE FUNDS 456 – Cemetery Operates and maintains Bayview Cemetery. Revenue is derived from the sale of lots, intermentcharges, sale of concrete boxes and interest. Perpetual care for upkeep of graves and cemeteryproperty is funded from sale of gravesites. Pre‐arrangement contracts on sales of interments andliners are also available. Established by Ordinance 2001‐11‐086. 460 – Golf Course Lake Padden Golf Course was constructed in 1970 as part of Lake Padden Park with funding from abond issue and additional City funding. The parks and recreation department leases out theoperation of the golf course. Established in the 1971 Budget by Ordinance 7967. 465 – Parking Services Operates and maintains the municipal parking system consisting of parking garages, surface lots, on‐street parking and commercial space rental. Revenue is primarily derived from fees and rentals.Established by Ordinances 7747 and 10367. 475 – Development Services Primary source of revenue is fees for inspection services. Ensures compliance with state and localcodes. Established by Ordinance 10035. Goal for ending fund balance is fifty percent of annualoperating budget.

ENTERPRISE FUNDS 456 – Cemetery Operates and maintains Bayview Cemetery. Revenue is derived from the sale of lots, intermentcharges, sale of concrete boxes and interest. Perpetual care for upkeep of graves and cemeteryproperty is funded from sale of gravesites. Pre‐arrangement contracts on sales of interments andliners are also available. Established by Ordinance 2001‐11‐086. 460 – Golf Course Lake Padden Golf Course was constructed in 1970 as part of Lake Padden Park with funding from abond issue and additional City funding. The parks and recreation department leases out theoperation of the golf course. Established in the 1971 Budget by Ordinance 7967. 465 – Parking Services Operates and maintains the municipal parking system consisting of parking garages, surface lots, on‐street parking and commercial space rental. Revenue is primarily derived from fees and rentals.Established by Ordinances 7747 and 10367. 475 – Development Services Primary source of revenue is fees for inspection services. Ensures compliance with state and localcodes. Established by Ordinance 10035. Goal for ending fund balance is fifty percent of annualoperating budget.

6-57

Golf Parking DevelopmentCemetery Course Services Services Totals

Operating revenues:Customer sales and service fees 239,642$ -$ -$ 2,207,915$ 2,447,557$ Rents, parking and concessions - 183,958 2,343,286 - 2,527,244 Other operating revenues - 6,041 7,950 - 13,991

Total operating revenues 239,642 189,999 2,351,236 2,207,915 4,988,792

Operating expenses:General operations 353,262 85,908 1,414,674 830,354 2,684,198 General administration 228,065 - - 1,066,820 1,294,885 Depreciation 6,565 33,881 107,777 29,504 177,727 Taxes 2,725 13 2,118 - 4,856

Total operating expenses 590,617 119,802 1,524,569 1,926,678 4,161,666

Operating income (loss) (350,975) 70,197 826,667 281,237 827,126

Nonoperating revenues (expenses):Investment interest 15,369 4,120 33,433 25,049 77,971

(7,046) (943) (13,919) (8,266) (30,174) Interest expense and related charges - (8,179) (17,111) - (25,290) Other non-operating revenues (expenses) 5,066 - (153,201) 100 (148,035)

Total nonoperating revenues (expenses) 13,389 (5,002) (150,798) 16,883 (125,528)

Income (loss) before contributions and transfers (337,586) 65,195 675,869 298,120 701,598

Transfers in 221,480 - - 50,000 271,480 Transfers out - - (637 293) - (637 293)

Net increase (decrease) in fair value of investments

CITY OF BELLINGHAMCombining Statement of Revenue, Expenses and Changes in Net Assets

Nonmajor Enterprise FundsFor the Year Ended December 31, 2009

Transfers out - - (637,293) - (637,293)

Change in net assets (116,106) 65,195 38,576 348,120 335,785 Total net assets - beginning 826,967 716,348 6,389,252 710,864 8,643,431

Prior period adjustments - - (127,503) - (127,503) Total net assets - ending 710,861$ 781,543$ 6,300,325$ 1,058,984$ 8,851,713$

6-59

Golf Parking DevelopmentCemetery Course Services Services Totals

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 262,022$ 188,966$ 2,328,142$ 2,193,733$ 4,972,863$ Payments for wages (235,790) (11,205) (281,938) (961,467) (1,490,400)

Payments for operating expenses (353,748) (84,071) (1,187,650) (990,883) (2,616,352)

Net cash provided (used) by operating activities (327,516) 93,690 858,554 241,383 866,111

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers in 221,480 - - 50,000 271,480 Transfers out - - (637,293) - (637,293) Payments for interest - (8,179) - - (8,179) Principal paid on interfund loans - (77,472) - - (77,472)

Net cash provided (used) by noncapital financing activities 221,480 (85,651) (637,293) 50,000 (451,464)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Principal payment on bonds - - (110,000) - (110,000) Payments for interest - - (18,140) - (18,140) Purchases of capital assets - - - - -

Net cash provided (used) by capital financing activities - - (128,140) - (128,140)

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sales and maturity of investments 354,485 45,512 676,112 382,486 1,458,595 Purchase of investments (267,203) (53,654) (753,101) (625,079) (1,699,037) Interest and dividends received 17,508 4,280 36,067 25,356 83,211

Net cash provided (used) in investment activities 104,790 (3,862) (40,922) (217,237) (157,231)

Net increase (decrease) in cash and equivalents (1,246) 4,177 52,199 74,146 129,276 Cash and cash equivalents - beginning of year 80,293 11,695 170,590 110,771 373,349

CITY OF BELLINGHAMCombining Statement of Cash Flows

Nonmajor Enterprise FundsFor the Year Ended December 31, 2009

q g g y , , , , ,

Cash and cash equivalents - end of year 79,047 15,872 222,789 184,917 502,625

Cash at end of year consists ofCash and cash equivalents 11,055 15,872 216,997 184,917 428,841

Restricted cash 67,992 - 5,792 - 73,784

Total cash at end of year 79,047$ 15,872$ 222,789$ 184,917$ 502,625$

Reconciliation of operating income (loss) to net cash provided (used) by operating activities:Operating income (loss) (350,975)$ 70,197$ 826,667$ 281,237$ 827,126$ Adjustments to reconcile operating income to net cash provided (used) by operating activities:

Depreciation 6,565 33,881 107,777 29,504 177,727 Other non-operating receipts (expenses) 5,070 - 365 100 5,535 Accumulated long-term leave liability (326) - 643 3,810 4,127

Change in assets and liabilities:(Increase) decrease in accounts receivable other 17,310 (1,033) (23,457) (14,282) (21,462) Increase (decrease) in accounts payable (3,032) (9,355) (23,586) (16,912) (52,885) Increase (decrease) in revenues collected in advance 6,038 - (29,013) - (22,975) Increase (decrease) in due to other funds - - (81) - (81) Increase (decrease) in other current liabilities (5,767) - (2,320) (42,068) (50,155) Increase (decrease) in other fees and taxes (2,399) - 1,559 (6) (846)

Net cash provided (used) by operating activities (327,516)$ 93,690$ 858,554$ 241,383$ 866,111$

Non-cash investing, capital, and financing activities:Net change in fair value of investments (7,046) (943) (13,919) (8,266) (30,174)

6-60

INTERNAL SERVICE FUNDS 510 – Fleet Administration Consolidates vehicles and equipment under one fund for acquisition, repair, maintenance andreplacement. Revenue is derived from renting these assets to user funds and mechanical shopservices to other funds and other government agencies. Established by Ordinance 7684. Goal forending fund balance fluctuates based on the replacement cycle. 520 – Purchasing and Materials Management Consolidates the functions of purchasing, warehousing and issuing supplies to various departmentsof the City. Revenue is derived from inventory sales and overhead charges. Established by Ordinance8929 and 8976. 530 – Facilities Administration Consolidates custodial services and facility maintenance under one fund. Established by Ordinance10269. 540 – Telecommunications Purchases telecommunications equipment and recovers the costs from the user departments.Provides a source for centralized payment of telecommunication expenses. Excess funding is usedfor future acquisitions. Established by Ordinance 9747. 550 – Claims and Litigation Established in 1977 to pay expenses for claims, litigation, administrative costs and settlements andjudgments on behalf of all City departments. Departments pay insurance premiums into this fundfor future contingencies. Costs over $500,000 are covered by excess liability insurance. Establishedby Ordinance 8616 Minimum goal for ending fund balance is $5 million


INTERNAL SERVICE FUNDS 510 – Fleet Administration Consolidates vehicles and equipment under one fund for acquisition, repair, maintenance andreplacement. Revenue is derived from renting these assets to user funds and mechanical shopservices to other funds and other government agencies. Established by Ordinance 7684. Goal forending fund balance fluctuates based on the replacement cycle. 520 – Purchasing and Materials Management Consolidates the functions of purchasing, warehousing and issuing supplies to various departmentsof the City. Revenue is derived from inventory sales and overhead charges. Established by Ordinance8929 and 8976. 530 – Facilities Administration Consolidates custodial services and facility maintenance under one fund. Established by Ordinance10269. 540 – Telecommunications Purchases telecommunications equipment and recovers the costs from the user departments.Provides a source for centralized payment of telecommunication expenses. Excess funding is usedfor future acquisitions. Established by Ordinance 9747. 550 – Claims and Litigation Established in 1977 to pay expenses for claims, litigation, administrative costs and settlements andjudgments on behalf of all City departments. Departments pay insurance premiums into this fundfor future contingencies. Costs over $500,000 are covered by excess liability insurance. Establishedby Ordinance 8616. Minimum goal for ending fund balance is $5 million. 561 – Unemployment Compensation Established to reimburse the State on a quarterly basis for unemployment claims paid to formeremployees. State law requires that municipalities participate in the State UnemploymentCompensation Plan. Effective January 1, 1978, to finance this fund, a percentage of payroll istransferred each payroll period as required. Established in the 1978 Budget by Ordinance 8627. Goalfor ending fund balance is seventy five percent of budgeted annual claims payments to the state. 562 – Worker’s Compensation Self Insurance Covers the cost of claims resulting from injuries on the job or job‐related illnesses, and relatedpreventive, safety and disability programs. Established and amended by Ordinances 8616 and 1999‐02‐005. Goal for ending fund balance is twice the projected annual claims expense. 565 – Health Benefits Covers the costs of providing medical, dental, vision and employee wellness benefits to Cityemployees. Revenue is derived from employer (paid by City Departments on a per employee basis)and employee premium charges. Established by Ordinance 8942.

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of 2 PurchasingFleet Materials Facilities Tele- Claims &

ASSETS Administration Management Administration Communications Litigation

Current assets:Cash and cash equivalents 979,381$ 130,361$ 126,436$ 88,619$ 759,561$ Investments 4,705,016 626,266 607,408 425,736 3,648,985 Receivables, net 34,144 4,545 4,408 3,089 26,480 Inventories - 723,304 - - - Prepaid items - - - - -

Total current assets 5,718,541 1,484,476 738,252 517,444 4,435,026

Noncurrent assets:Capital assets, not being depreciated:

Land - - 40,102 - - Capital assets, net of depreciation:

Buildings - - 1,744,832 - - Improvements - 99,490 - - - Machinery and equipment 11,454,936 - - 636,519 - Total noncurrent assets 11,454,936 99,490 1,784,934 636,519 -

Total assets 17,173,477 1,583,966 2,523,186 1,153,963 4,435,026

LIABILITIESCurrent liabilities:

Accounts payable 45,731 56,541 90,682 6,746 3,581 Accrued wages and benefits 31,655 33,585 45,827 - - Other current liabiities - - 3,173 - -

Current portion:Compensated absences 37,265 39,403 58,793 - - Due to other governments - - - - -

CITY OF BELLINGHAMCombining Statement of Net Assets

Internal Service FundsDecember 31, 2009

Claims and judgements payable - - - - 566,600 Total current liabilities 114,651 129,529 198,475 6,746 570,181

Noncurrent liabilities:Compensated absences 16,830 16,655 11,080 - - Claims and judgements payable - - - - 543,203

Total noncurrent liabilities 16,830 16,655 11,080 - 543,203 Total liabilities 131,481 146,184 209,555 6,746 1,113,384

NET ASSETS

net of related debt 11,454,936 99,490 1,784,934 636,519 - Unrestricted 5,587,060 1,338,292 528,697 510,698 3,321,642

Total net assets 17,041,996$ 1,437,782$ 2,313,631$ 1,147,217$ 3,321,642$

Invested in capital assets,

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of 2 Worker'sUnemployment Compensation Health

ASSETS Compensation Self-Insurance Benefits Totals

Current assets:Cash and cash equivalents 118,261$ 123,862$ 332,620$ 2,659,101$ Investments 568,133 595,043 1,597,930 12,774,517 Receivables, net 4,123 4,318 11,596 92,703 Inventories - - - 723,304 Prepaid items - 40,000 11,000 51,000

Total current assets 690,517 763,223 1,953,146 16,300,625

Noncurrent assets:Capital assets, not being depreciated:

Land - - - 40,102 Capital assets, net of depreciation:

Buildings - - - 1,744,832 Improvements - - - 99,490 Machinery and equipment - - - 12,091,455 Total noncurrent assets - - - 13,975,879

Total assets 690,517 763,223 1,953,146 30,276,504

LIABILITIESCurrent liabilities:

Accounts payable - 20,977 4,793 229,051 Accrued wages and benefits - 7,962 10,772 129,801 Other current liabiities - - 34,656 37,829

Current portion:Compensated absences - 9,457 3,893 148,811 Due to other governments 90,215 - - 90,215 Cl i d j d bl 566 600


Internal Service FundsDecember 31, 2009

Claims and judgements payable - - - 566,600 Total current liabilities 90,215 38,396 54,114 1,202,307

Noncurrent liabilities:Compensated absences - - - 44,565 Claims and judgements payable - - - 543,203

Total noncurrent liabilities - - - 587,768 Total liabilities 90,215 38,396 54,114 1,790,075

NET ASSETS

net of related debt - - - 13,975,879 Unrestricted 600,302 724,827 1,899,032 14,510,550

Total net assets 600,302$ 724,827$ 1,899,032$ 28,486,429$

Invested in capital assets,

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PurchasingPage 1 of 2 Fleet Materials Facilities Tele- Claims &

Administration Management Administration Communications Litigation

Operating revenues:Sales of merchandise -$ 2,217,632$ 1,913,736$ -$ -$

Less: cost of goods sold - (1,013,754) - - - Charges for services 1,759,147 39,822 - 319,860 - Insurance premium contributions - - - - 890,767 Other operating revenues 1,579,863 - 97,558 15,778 100,000

Total operating revenues 3,339,010 1,243,700 2,011,294 335,638 990,767

Operating expenses:Operations:General operations 1,885,951 1,064,750 2,764,094 357,177 - General administration - 29,469 128 - 334,690 Depreciation 1,131,958 33,164 77,911 169,738 - Taxes - 84 - - - Risk transfer payment - - - - 502,406

- - - - 743,638

Total operating expenses 3,017,909 1,127,467 2,842,133 526,915 1,580,734

Operating income (loss) 321,101 116,233 (830,839) (191,277) (589,967)

Nonoperating revenues (expenses):Investment interest 161,407 19,742 29,332 14,774 142,073 Net increase (decrease) in fair value of investments (74,864) (7,145) (20,645) (6,575) (57,131) Gain (loss) on sale of capital assets (710,325) - - - - Other nonoperating revenues (expenses) 298,092 16,747 (1,908) - -

Total nonoperating revenues (expenses) (325,690) 29,344 6,779 8,199 84,942

Payments to claimants and beneficiaries

CITY OF BELLINGHAMCombining Statement of Revenues, Expenses and Changes in Net Assets

Internal Service FundsFor the Year Ended December 31, 2009

Income (loss) before transfers (4,589) 145,577 (824,060) (183,078) (505,025) Transfers in 128,892 - - - -

Change in net assets 124,303 145,577 (824,060) (183,078) (505,025) Total net assets - beginning 16,917,693 1,292,205 3,137,691 1,330,295 3,826,667

Total net assets - ending 17,041,996$ 1,437,782$ 2,313,631$ 1,147,217$ 3,321,642$

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Worker'sPage 2 of 2 Unemployment Compensation Health

Compensation Self-Insurance Benefits Totals

Operating revenues:Sales of merchandise -$ -$ -$ 4,131,368$

Less: cost of goods sold - - - (1,013,754) Charges for services - - - 2,118,829 Insurance premium contributions 546,020 562,591 10,802,618 12,801,996 Other operating revenues - - - 1,793,199

Total operating revenues 546,020 562,591 10,802,618 19,831,638$

Operating expenses:Operations:General operations - - - 6,071,972 General administration 1,770 258,843 294,212 919,112 Depreciation - - 972 1,413,743 Taxes - - 700 784 Risk transfer payment - 43,777 9,991,022 10,537,205

185,314 422,489 152,808 1,504,249

Total operating expenses 187,084 725,109 10,439,714 20,447,065

Operating income (loss) 358,936 (162,518) 362,904 (615,427)

Nonoperating revenues (expenses):Investment interest 13,103 20,751 46,334 447,516 Net increase (decrease) in fair value of investments (1,505) (11,005) (17,293) (196,163) Gain (loss) on sale of capital assets - - - (710,325) Other nonoperating revenues (expenses) 3 168 316 099

CITY OF BELLINGHAMCombining Statement of Revenues, Expenses and Changes in Net Assets


Payments to claimants and beneficiaries

Other nonoperating revenues (expenses) - - 3,168 316,099

Total nonoperating revenues (expenses) 11,598 9,746 32,209 (142,873)

Income (loss) before transfers 370,534 (152,772) 395,113 (758,300) Transfers in - - - 128,892

Change in net assets 370,534 (152,772) 395,113 (629,408) Total net assets - beginning 229,768 877,599 1,503,919 29,115,837

Total net assets - ending 600,302$ 724,827$ 1,899,032$ 28,486,429$

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of 2 PurchasingFleet Materials Facilities Tele- Claims &

Administration Management Administration Communications LitigationCASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 298,092$ 16,747$ 108,994$ 20,464$ 100,000$ Receipts from interfund services provided 3,339,009 2,257,453 1,913,736 315,174 890,767 Payments for merchandise - (1,022,434) - - - Payments for wages (473,205) (463,286) (647,973) (68,605) (131,722) Payments for operating expenses (1,415,379) (669,900) (2,152,140) (298,272) (1,338,186)

Net cash provided (used) by operating activities 1,748,517 118,580 (777,383) (31,239) (479,141)


Net cash provided (used) by noncapital financing activities - - - - -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Purchases of capital assets (2,637,170) - - - - Proceeds from the sale of capital assets 403,743 - - - -

Net cash provided (used) by capital financing activities (2,233,427) - - - -

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sales and maturity of investments 3,715,910 341,285 1,076,749 325,408 2,831,287 Purchase of investments (3,310,622) (440,664) (427,395) (299,563) (2,567,557) Interest and dividends received 180,808 20,712 38,115 16,416 156,587 Receipts of principal loan payments - - - - 146,025

Net cash provided (used) in investment activities 586,096 (78,667) 687,469 42,261 566,342

Net increase (decrease) in cash and equivalents 101,186 39,913 (89,914) 11,022 87,201 Cash and cash equivalents - beginning of year 878,195 90,448 216,350 77,597 672,360

Cash and cash equivalents - end of year 979,381 130,361 126,436 88,619 759,561



Cash at end of year consists ofCash and cash equivalents 979,381 130,361 126,436 88,619 759,561

Total cash at end of year 979,381$ 130,361$ 126,436$ 88,619$ 759,561$

Reconciliation of operating income (loss) to net cash provided (used) by operating activities:Operating income (loss) 321,101$ 116,233$ (830,839)$ (191,277)$ (589,967)$ Adjustments to reconcile operating income to net cash provided (used) by operating activities:

Depreciation 1,131,958 33,164 77,911 169,738 - Other non-operating receipts 298,092 16,747 (1,908) - - Accumulated long-term leave liability (193) (1,326) (3,581) - -

Change in assets and liabilities:(Increase) decrease in due from other governmental units - - - - - (Increase) decrease in inventory of supplies - (800) - - - Increase (decrease) in accounts payable 9,207 (44,638) (21,898) (9,700) (8,315) Increase (decrease) in other current liabilities (11,648) (800) 2,932 - 119,141

Net cash provided (used) by operating activities 1,748,517$ 118,580$ (777,383)$ (31,239)$ (479,141)$

Non-cash investing, capital, and financing activities:Net change in fair value of investments (74,864) (7,145) (20,645) (6,575) (57,131)

Fleet donations 128,892 - - - -

6-66

of 2 Worker'sUnemployment Compensation HealthCompensation Self-Insurance Benefits Totals

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers -$ -$ 3,168$ 547,465$ Receipts from interfund services provided 546,020 562,591 10,802,618 20,627,368 Payments for merchandise - - - (1,022,434) Payments for wages - (90,963) (93,656) (1,969,410) Payments for operating expenses (113,482) (632,132) (10,345,176) (16,964,667)

Net cash provided (used) by operating activities 432,538 (160,504) 366,954 1,218,322


Net cash provided (used) by noncapital financing activities - - - -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESPurchases of capital assets - - - (2,637,170) Proceeds from the sale of capital assets - - - 403,743

Net cash provided (used) by capital financing activities - - - (2,233,427)

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sales and maturity of investments 38,973 553,498 819,777 9,702,887 Purchase of investments (399,759) (418,694) (1,124,362) (8,988,616) Interest and dividends received 11,137 24,086 48,272 496,133 Receipts of principal loan payments - - - 146,025

Net cash provided (used) in investment activities (349,649) 158,890 (256,313) 1,356,429

Net increase (decrease) in cash and equivalents 82,889 (1,614) 110,641 341,324 Cash and cash equivalents - beginning of year 35,372 125,476 221,979 2,317,777

Cash and cash equivalents - end of year 118,261 123,862 332,620 2,659,101

Cash at end of year consists ofCash and cash equivalents 118,261 123,862 332,620 2,659,101

Total cash at end of year 118,261$ 123,862$ 332,620$ 2,659,101$

Reconciliation of operating income (loss) to net cash provided (used) by operating activities:Operating income (loss) 358,936$ (162,518)$ 362,904$ (615,427) Adjustments to reconcile operating income to net cash provided (used) by operating activities:

Depreciation - - 972 1,413,743 Other non-operating receipts - - 3,168 316,099 Accumulated long-term leave liability - - - (5,100)

Change in assets and liabilities:(Increase) decrease in due from other governmental units 73,602 - - 73,602 (Increase) decrease in inventory of supplies - - - (800) Increase (decrease) in accounts payable - 1,615 (3,355) (77,084) Increase (decrease) in other current liabilities - 399 3,265 113,289

Net cash provided (used) by operating activities 432,538$ (160,504)$ 366,954$ 1,218,322

Non-cash investing, capital, and financing activities:Net change in fair value of investments (1,505) (11,005) (17,293) (196,163)

Fleet donations - - - 128,892



6-67


FIDUCIARY FUNDS

Pension Trust 612 – Firefighters Pensions Pension payments for pre March 1, 1970 firefighters or surviving spouses, and medical and long‐term care benefits for firefighters hired prior to October 1, 1977. Revenue is derived from propertytax, fire insurance premium tax, and general fund contributions. Authorized by City Council July 26,1909 and by Ordinance 1999‐12‐083. 613 – Police Officers Pensions Pension payments for pre March 1, 1970 police officers or surviving spouses, and medical and long‐term benefits for police officers hired prior to October 1, 1977. Revenue is derived from general fundcontributions and sales of unclaimed property. Authorized by City Council July 26, 1909 and byOrdinances 1489 and 1999‐12‐083.

Agency 637 – Guaranty Deposit Agency fund, serving as a depository for cash collected for outside parties, until its final disposition.Established by Ordinance 2067. 642 – School Impact Fees School impact fees, as authorized by Ordinance 2006‐03‐022, are deposited in this fund. The Citycollects and remits impact fees with interest to the school district.

FIDUCIARY FUNDS

Pension Trust 612 – Firefighters Pensions Pension payments for pre March 1, 1970 firefighters or surviving spouses, and medical and long‐term care benefits for firefighters hired prior to October 1, 1977. Revenue is derived from propertytax, fire insurance premium tax, and general fund contributions. Authorized by City Council July 26,1909 and by Ordinance 1999‐12‐083. 613 – Police Officers Pensions Pension payments for pre March 1, 1970 police officers or surviving spouses, and medical and long‐term benefits for police officers hired prior to October 1, 1977. Revenue is derived from general fundcontributions and sales of unclaimed property. Authorized by City Council July 26, 1909 and byOrdinances 1489 and 1999‐12‐083.

Agency 637 – Guaranty Deposit Agency fund, serving as a depository for cash collected for outside parties, until its final disposition.Established by Ordinance 2067. 642 – School Impact Fees School impact fees, as authorized by Ordinance 2006‐03‐022, are deposited in this fund. The Citycollects and remits impact fees with interest to the school district.

6-69

Police Total

Firefighters' Officers' PensionPension Pension Funds

ASSETSCash and cash equivalents 795,474$ 902,009$ 1,697,483$ Invested in U.S. Government Securities 3,821,518 4,333,320 8,154,838 Receivables, net 72,049 31,446 103,495 Interfund loans receivable 2,153,958 - 2,153,958

Total assets 6,842,999 5,266,775 12,109,774

LIABILITIESAccounts payable 14,154 8,549 22,703 Accrued pension benefits 52,397 13,560 65,957 Other liabilities 44,888 - 44,888

Total liabilities 111,439 22,109 133,548

NET ASSETSHeld in trust for pension and other post

employment long-term care benefits 6,731,560$ 5,244,666$ 11,976,226$


Pension Trust FundsDecember 31, 2009

6-70

TotalGuaranty School AgencyDeposit Impact Fee Funds

ASSETSCash and cash equivalents 113,862$ 32,511$ 146,373$

Total assets 113,862 32,511 146,373

LIABILITIESAccounts payable 332 32,511 32,843 Other liabilities 113,530 - 113,530

Total liabilities 113,862$ 32,511$ 146,373$


Agency FundsDecember 31, 2009

6-71

PoliceFirefighters' Officers'

Pension Pension TotalsADDITIONSContributions:

Taxes 1,908,170$ -$ 1,908,170$ Unclaimed property - auction - 17,559 17,559 Employer contributions 179,442 852,957 1,032,399

Total trust contributions 2,087,612 870,516 2,958,128 Investment income:

Interest 229,580 155,999 385,579 Net appreciation (depreciation) in fair value (44,871) (63,045) (107,916)

Net investment income 184,709 92,954 277,663

Total additions 2,272,321 963,470 3,235,791 DEDUCTIONS

Benefits 1,773,345 926,448 2,699,793 Administration expense 9,886 16,013 25,899

Total deductions 1,783,231 942,461 2,725,692 CHANGE IN NET ASSETS

P i B fit 527 912 (101 389) 426 523

CITY OF BELLINGHAMCombining Statement of Changes in Plan Net Assets

Pension Trust FundsFor the Year Ended December 31, 2009

Pension Benefits 527,912 (101,389) 426,523 Long-term care benefits (38,822) 122,398 83,576

Net assets pension benefits, January 1, 2009 4,762,341 3,215,435 7,977,776 Net assets long-term care benefits, January 1, 2009 1,480,129 2,008,222 3,488,351

Net assets pension benefits, December 31, 2009 5,290,253$ 3,114,046$ 8,404,299$

Net assets long-term care benefits, December 31, 2009 1,441,307$ 2,130,620$ 3,571,927$

6-72

Balance BalanceDecember 31, December 31,

2008 Additions Deductions 2009GUARANTY DEPOSITASSETSCash and cash equivalents 92,342$ 21,520$ -$ 113,862$ Total assets 92,342 21,520 - 113,862

LIABILITIESAccounts payable 2,155 - 1,823 332 Garnishments and deposits 30,615 29,666 - 60,281 Customer deposits 59,572 - 6,323 53,249 Total liabilities 92,342$ 29,666$ 8,146$ 113,862$

SCHOOL IMPACT FEEASSETSCash and cash equivalents 1,291$ 31,220$ -$ 32,511$ Total assets 1,291 31,220 - 32,511

LIABILITIESAccounts payable - 32,511 - 32,511 Impact fees - interest 1,291 - 1,291 - Total liabilities 1,291$ 32,511$ 1,291$ 32,511$

TOTAL ALL AGENCY FUNDSASSETSC h d h i l t 93 633$ 52 740$ $ 146 373$

CITY OF BELLINGHAMCombining Statement of Changes in Assets and Liabilities

Agency FundsFor the Year Ended December 31, 2009

Cash and cash equivalents 93,633$ 52,740$ -$ 146,373$ Total assets 93,633 52,740 - 146,373

LIABILITIESAccounts payable 2,155 32,511 1,823 32,843 Garnishments and deposits 30,615 29,666 - 60,281 Customer deposits 59,572 - 6,323 53,249 Impact fees - interest 1,291 - 1,291 - Total liabilities 93,633$ 62,177$ 9,437$ 146,373$

6-73

City of Bellingham Statistical SectionCAFR 2009

STATISTICAL SECTION

This part of the City of Bellingham’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.

Contents Page Financial Trends 7‐2 These schedules contain trend information to help the reader understand how the

City’s financial performance and well‐being have changed over time. Revenue Capacity 7‐8 These schedules contain information to help the reader assess the City’s most

significant local revenue source, the property tax. Debt Capacity 7‐13 These schedules present information to help the reader assess the affordability of

the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

Demographic and Economic Information 7‐18 These schedules offer demographic and economic indicators to help the reader

understand the environment within which the City’s financial activities take place.

STATISTICAL SECTION

This part of the City of Bellingham’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.

Contents Page Financial Trends 7‐2 These schedules contain trend information to help the reader understand how the

City’s financial performance and well‐being have changed over time. Revenue Capacity 7‐8 These schedules contain information to help the reader assess the City’s most

significant local revenue source, the property tax. Debt Capacity 7‐13 These schedules present information to help the reader assess the affordability of

the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

Demographic and Economic Information 7‐18 These schedules offer demographic and economic indicators to help the reader

understand the environment within which the City’s financial activities take place. Operating Information 7‐21 These schedules contain service and infrastructure data to help the reader

understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.

Data Source: Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial report for the applicable year. The City implemented GASB Statement No. 34 in fiscal year 2002, therefore tables presenting government‐wide financial data include only eight years of information.

7-1

2002

2003

2004

2005

2006

2007

2008

2009

Gov

ernm

enta

l act

iviti

esIn

vest

ed in

cap

ital a

sset

s, n

et o

f rel

ated

deb

t12

9,11

3,18

7$

141,

437,

663

$

19

2,35

0,43

1$

200,

189,

756

$

22

0,10

1,61

4$

251,

023,

811

$

27

5,56

2,77

1$

294,

335,

598

$

R

estri

cted

28,5

74,4

03

31,3

64,6

85

42,7

46,7

69

49,9

00,4

68

43,2

51,1

38

43,3

71,2

59

42,0

22,6

92

36,3

00,2

24

Unr

estri

cted

34,3

99,9

39

41,0

82,7

36

44,9

04,3

78

49,5

26,1

84

56,4

58,7

19

57,5

55,9

47

55,2

39,8

74

46,6

56,0

52

Tota

l gov

ernm

enta

l act

iviti

es n

et a

sset

s19

2,08

7,52

9

213,

885,

084

280,

001,

578

299,

616,

408

319,

811,

471

351,

951,

017

372,

825,

337

377,

291,

874

Busi

ness

-type

act

iviti

esIn

vest

ed in

cap

ital a

sset

s, n

et o

f rel

ated

deb

t12

6,90

1,88

0

139,

147,

818

16

0,44

9,09

9

158,

377,

192

16

2,34

9,64

8

180,

824,

082

18

4,54

9,54

9

192,

943,

450

R

estri

cted

3,12

0,82

2

3,

120,

823

1,83

3,50

0

6,

351,

590

12,4

65,7

69

10,3

78,2

65

20,4

83,2

81

13,0

55,1

91

Unr

estri

cted

41,9

68,1

52

39,7

55,4

05

26,8

59,4

75

27,2

55,7

59

24,7

43,6

75

20,7

44,1

47

16,8

07,5

91

14,7

71,5

64

Tota

l bus

ines

s-ty

pe a

ctiv

ities

net

ass

ets

171,

990,

854

18

2,02

4,04

6

18

9,14

2,07

4

19

1,98

4,54

1

19

9,55

9,09

2

21

1,94

6,49

4

22

1,84

0,42

1

22

0,77

0,20

5

Prim

ary

gove

rnm

ent

Inve

sted

in c

apita

l ass

ets,

net

of r

elat

ed d

ebt

256,

015,

067

28

0,58

5,48

1

352,

799,

530

35

8,56

6,94

8

382,

451,

262

43

1,84

7,89

3

460,

112,

320

48

7,27

9,04

8

Res

trict

ed31

,695

,225

34

,485

,508

44

,580

,269

56

,252

,058

55

,716

,907

53

,749

,524

62

,505

,973

49

,355

,415

U

nres

trict

ed76

,368

,091

80

,838

,141

71

,763

,853

76

,781

,943

81

,202

,394

78

,300

,094

72

,047

,465

61

,427

,616

To

tal p

rimar

y go

vern

men

t net

ass

ets

364,

078,

383

$

39

5,90

9,13

0$

46

9,14

3,65

2$

49

1,60

0,94

9$

51

9,37

0,56

3$

56

3,89

7,51

1$

59

4,66

5,75

8$

59

8,06

2,07

9$

Sche

dule

1N

et A

sset

s by

Com

pone

ntLa

st E

ight

Fis

cal Y

ears

(acc

rual

bas

is o

f acc

ount

ing)

Not

e: B

egin

ning

in y

ear 2

007

the

Publ

ic F

acilit

ies

Dis

trict

(PFD

) is

sepa

rate

ly re

porte

d as

a D

iscr

ete

Com

pone

nt U

nit a

ccou

ntin

g fo

r a

chan

ge in

net

ass

ets

of $

13,5

59,7

51 b

etw

een

2006

and

200

7.

7-2

Pag

e 1

of 3

2002

2003

2004

2005

2006

2007

2008

2009

Expe

nses

Gov

ernm

enta

l act

iviti

es

Gen

eral

gov

ernm

ent

13,2

79,6

80$

14

,159

,375

$

10,9

15,1

42$

11

,089

,032

$

13,8

66,7

95$

14

,284

,854

$

15,9

76,1

49$

15

,385

,834

$

Pub

lic s

afet

y25

,878

,696

26,7

56,3

44

27

,416

,212

29,4

18,3

16

30

,176

,940

35,0

49,1

05

37

,993

,287

36,9

77,8

59

Phy

sica

l env

ironm

ent

3,68

2,28

5

3,89

9,52

1

4,45

7,32

3

3,75

0,15

0

4,23

1,97

6

4,91

0,82

9

6,55

7,78

0

6,92

0,50

0

Tran

spor

tatio

n7,

929,

942

7,

543,

476

7,

841,

862

8,

643,

230

8,

895,

051

9,

335,

399

9,

853,

604

10

,571

,685

Eco

nom

ic e

nviro

nmen

t4,

349,

341

3,

678,

977

4,

053,

125

4,

015,

164

5,

358,

832

5,

645,

655

5,

495,

025

6,

015,

965

M

enta

l and

phy

sica

l hea

lth42

,027

75,7

86

52

,182

60,0

93

60

,093

45,9

29

77

,346

47,0

87

C

ultu

re a

nd re

crea

tion

11,2

98,8

62

11

,574

,675

12,1

39,5

03

12

,654

,783

13,8

68,6

73

13

,477

,767

15,7

19,6

17

15

,949

,086

Red

empt

ion

of g

ener

al lo

ng-te

rm d

ebt

-

1,

289,

390

-

-

-

-

-

-

In

tere

st a

nd o

ther

deb

t ser

vice

cos

ts1,

318,

036

89

3,33

4

1,

268,

721

1,

454,

831

1,

302,

372

1,

192,

772

1,

146,

323

1,

076,

982

Tota

l gov

ernm

enta

l act

iviti

es e

xpen

ses

67,7

78,8

69

69

,870

,878

68,1

44,0

70

71

,085

,599

77,7

60,7

32

83

,942

,310

92,8

19,1

31

92

,944

,998

Bus

ines

s-ty

pe a

ctiv

ities

Wat

er10

,174

,867

10,7

93,9

28

11

,108

,784

10,8

72,8

03

12

,475

,713

13,1

41,4

74

14

,190

,176

15,1

30,7

89

Was

tew

ater

10,5

96,4

98

10

,412

,085

10,6

68,3

20

11

,524

,801

12,7

48,7

73

13

,418

,966

14,3

94,5

72

15

,354

,650

Sche

dule

2C

hang

e in

Net

Ass

ets

Last

Eig

ht F

isca

l Yea

rs(a

ccru

al b

asis

of a

ccou

ntin

g)

Sur

face

and

sto

rmw

ater

-

-

-

3,

740,

021

3,

964,

093

4,

121,

268

4,

565,

706

4,

769,

300

Sol

id w

aste

-

-

-

5,

452,

417

1,

741,

750

1,

865,

236

98

5,05

5

5,

439,

399

Cem

eter

y-

-

-

492,

307

540,

511

634,

208

612,

882

590,

617

Gol

f cou

rse

-

-

-

76

0,38

1

73

6,49

6

74

1,10

3

15

0,96

6

12

7,98

1

Par

king

-

-

-

87

5,40

4

1,

094,

941

98

4,04

3

1,

196,

683

1,

541,

680

Med

ic o

ne6,

572,

659

6,

921,

739

6,

799,

473

6,

831,

349

7,

878,

728

8,

657,

338

9,

044,

577

7,

681,

681

Dev

elop

men

t ser

vice

s-

-

-

2,60

9,13

8

2,74

7,26

8

2,57

4,24

1

2,88

8,84

3

1,92

6,67

8

Oth

er b

usin

ess-

type

act

iviti

es7,

586,

832

7,

694,

819

9,

543,

683

-

-

-

-

-

Tota

l bus

ines

s-ty

pe a

ctiv

ities

exp

ense

s34

,930

,856

35,8

22,5

71

38

,120

,260

43,1

58,6

21

43

,928

,273

46,1

37,8

77

48

,029

,460

52,5

62,7

75

Tota

l prim

ary

gove

rnm

ent e

xpen

ses

102,

709,

725

$

10

5,69

3,44

9$

106,

264,

330

$

11

4,24

4,22

0$

121,

689,

005

$

13

0,08

0,18

7$

140,

848,

591

$

14

5,50

7,77

3$

7-3

o

f 3

2002

2003

2004

2005

2006

2007

2008

2009

Prog

ram

Rev

enue

s

Gov

ernm

enta

l act

iviti

es

Cha

rges

for s

ervi

ces:

Gen

eral

gov

ernm

ent

9,33

9,00

3$

5,89

3,04

1$

5,09

0,98

2$

6,97

8,66

4$

7,37

8,15

4$

8,21

4,12

8$

7,62

9,53

0$

1,84

6,02

8$

Publ

ic s

afet

y5,

582,

699

5,

859,

182

4,

137,

835

4,

832,

625

4,

716,

786

5,

536,

189

4,

652,

808

5,

031,

673

Phys

ical

env

ironm

ent

2,78

3,77

2

3,09

4,96

0

2,60

9,58

8

2,79

7,34

6

2,90

8,57

2

2,86

5,24

1

3,33

2,45

4

3,45

6,75

0

Tran

spor

tatio

n1,

904,

121

95

9,31

2

45

5,45

2

43

7,26

7

82

0,48

9

98

2,66

5

78

0,99

0

1,

575,

309

Econ

omic

env

ironm

ent

790,

480

826,

452

1,22

9,82

8

1,25

2,24

8

1,57

6,66

4

1,34

0,23

4

1,03

1,81

8

1,60

8,88

3

C

ultu

re a

nd re

crea

tion

1,25

5,84

1

1,30

6,93

0

2,41

1,54

7

4,01

5,91

3

1,57

9,05

9

1,65

8,47

3

2,95

7,31

3

3,63

3,70

7

R

edem

ptio

n of

gen

eral

long

-term

deb

t68

,976

74,2

41

-

-

-

-

-

-

Ope

ratin

g gr

ants

and

con

tribu

tions

8,39

9,99

3

11,8

90,7

91

5,

870,

274

3,

902,

310

4,

365,

394

3,

493,

504

4,

654,

983

6,

194,

611

Cap

ital g

rant

s an

d co

ntrib

utio

ns7,

002,

295

4,

019,

672

4,

849,

861

5,

198,

298

8,

240,

714

11

,137

,427

8,27

7,31

7

9,92

1,19

1

Tota

l gov

ernm

enta

l act

iviti

es p

rogr

am re

venu

es37

,127

,180

33,9

24,5

81

26

,655

,367

29,4

14,6

71

31

,585

,832

35,2

27,8

61

33

,317

,213

33,2

68,1

52

Busi

ness

-type

act

iviti

es

Cha

rges

for s

ervi

ces:

Wat

er12

,182

,880

11,6

35,2

63

11

,522

,506

12,6

62,2

09

13

,715

,124

14,4

26,1

24

14

,906

,201

15,2

52,0

14

Was

tew

ater

12,5

65,7

88

12

,990

,049

14,5

93,4

76

14

,007

,723

14,3

27,0

11

15

,269

,074

17,0

76,0

27

15

,809

,211

Sche

dule

2C

hang

e in

Net

Ass

ets

Last

Eig

ht F

isca

l Yea

rs(a

ccru

al b

asis

of a

ccou

ntin

g)

Surfa

ce a

nd s

torm

wat

er-

-

-

3,99

7,06

7

4,42

6,47

3

4,88

4,65

8

4,95

0,17

2

4,74

3,49

0

Solid

was

te-

-

-

197,

220

830,

445

308,

130

233,

471

211,

874

Cem

eter

y-

-

-

286,

095

305,

660

366,

050

346,

156

244,

710

Gol

f cou

rse

-

-

-

75

5,88

1

75

7,04

2

72

9,94

9

18

4,29

7

18

9,99

9

Park

ing

-

-

-

96

9,01

3

1,

106,

119

2,

375,

143

2,

285,

357

2,

351,

599

Med

ic o

ne4,

176,

400

4,

312,

241

5,

559,

733

5,

859,

978

5,

944,

914

7,

291,

514

8,

024,

156

6,

574,

164

Dev

elop

men

t ser

vice

s-

-

-

2,62

2,00

9

2,64

4,05

1

2,86

6,13

3

2,36

0,01

1

2,20

8,01

5

Oth

er b

usin

ess-

type

act

iviti

es6,

013,

345

6,

874,

452

7,

653,

881

-

-

-

-

-

Ope

ratin

g gr

ants

and

con

tribu

tions

5,89

1,29

7

7,82

9,40

1

379,

224

599,

117

49,4

06

45

,593

6,60

7

3,91

9

C

apita

l gra

nts

and

cont

ribut

ions

28,6

45

34

,295

102,

041

344,

615

3,42

6,59

5

1,76

2,31

3

2,36

8,64

4

1,84

4,55

1

Tota

l bus

ines

s-ty

pe a

ctiv

ities

reve

nues

40,8

58,3

55

43

,675

,701

39,8

10,8

61

42

,300

,927

47,5

32,8

40

50

,324

,681

52,7

41,0

99

49

,433

,546

Tota

l prim

ary

gove

rnm

ent p

rogr

am re

venu

es77

,985

,535

$

77,6

00,2

82$

66

,466

,228

$

71,7

15,5

98$

79

,118

,672

$

85,5

52,5

42$

86

,058

,312

$

82,7

01,6

98$

Net

(Exp

ense

) Rev

enue

Gov

ernm

enta

l act

iviti

es(3

0,65

1,68

9)$

(3

5,94

6,29

7)$

(4

1,48

8,70

3)$

(4

1,67

0,92

8)$

(4

6,17

4,90

0)$

(4

8,71

4,44

9)$

(5

9,50

1,91

8)$

(5

9,67

6,84

6)$

Busi

ness

-type

act

iviti

es5,

927,

499

7,

853,

130

1,

690,

601

(8

57,6

94)

3,

604,

567

4,

186,

804

4,

711,

639

(3

,129

,229

)

Tota

l prim

ary

gove

rnm

ent n

et e

xpen

se(2

4,72

4,19

0)$

(2

8,09

3,16

7)$

(3

9,79

8,10

2)$

(4

2,52

8,62

2)$

(4

2,57

0,33

3)$

(4

4,52

7,64

5)$

(5

4,79

0,27

9)$

(6

2,80

6,07

5)$

7-4

o

f 3

2002

2003

2004

2005

2006

2007

2008

2009

Gen

eral

Rev

enue

s an

d O

ther

Cha

nges

in N

et A

sset

s

Gov

ernm

enta

l act

iviti

es:

Taxe

s Prop

erty

taxe

s13

,047

,167

$

12

,461

,078

$

12

,819

,530

$

12

,744

,306

$

13

,092

,773

$

15

,905

,123

$

16

,560

,804

$

16

,683

,534

$

Ret

ail s

ales

and

use

taxe

s15

,788

,358

17

,672

,260

18

,781

,686

19

,974

,866

22

,136

,372

21

,854

,574

21

,603

,021

18

,763

,691

Inte

rfund

taxe

s2,

338,

504

3,04

2,00

9

3,

066,

935

3,35

5,25

1

3,

563,

139

3,76

3,95

9

4,

022,

074

3,89

4,99

9

Busi

ness

taxe

s14

,520

,375

15

,480

,065

16

,098

,324

17

,628

,056

19

,220

,883

20

,972

,718

21

,208

,125

20

,817

,581

Oth

er ta

xes

2,68

1,47

6

3,

450,

518

4,09

9,39

8

4,

534,

052

4,52

2,48

7

4,

085,

034

3,33

0,44

6

2,

912,

563

Inte

rest

and

inve

stm

ent e

arni

ngs

2,63

1,03

2

1,

140,

764

1,02

2,48

6

2,

160,

842

3,87

8,64

6

4,

776,

518

4,27

4,57

7

1,

436,

128

Mis

cella

neou

s so

urce

s (u

ses)

-

(28,

372)

43

2,84

2

-

-

7,20

7,49

7

1,

140,

391

119,

800

Con

tribu

tions

-

1,42

6,56

1

6,

724,

498

1,48

9,22

9

-

-

-

-

Gai

n (lo

ss) o

n sa

le o

f cap

ital a

sset

s-

-

-

(2

78,9

42)

-

-

-

-

Tran

sfer

s(1

,817

,743

)

(1,2

74,4

89)

(1

,216

,211

)

(321

,902

)

(4

4,33

7)

(202

,204

)

(4

80,0

30)

(219

,922

)

Tota

l gov

ernm

enta

l act

iviti

es

49,1

89,1

69

53,3

70,3

94

61,8

29,4

88

61,2

85,7

58

66,3

69,9

63

78,3

63,2

19

71,6

59,4

08

64,4

08,3

74

Busi

ness

-type

act

iviti

es

Ret

ail s

ales

and

use

taxe

s-

-

-

-

35

0,46

5

595,

633

-

-

Inte

rfund

taxe

s55

2 ,52

0

-

-

-

-

-

-

-

Sche

dule

2C

hang

e in

Net

Ass

ets

Last

Eig

ht F

isca

l Yea

rs(a

ccru

al b

asis

of a

ccou

ntin

g)

Inte

rfund

taxe

s55

2,52

0

Busi

ness

taxe

s-

-

-

88

3,84

3

1,16

3,20

3

1,

256,

117

1,27

1,58

5

1,

186,

561

Oth

er ta

xes

-

-

618,

431

-

-

-

-

-

Inte

rest

and

inve

stm

ent e

arni

ngs

(103

)

92

4,44

6

569,

838

1,

125,

536

2,07

5,08

1

2,

709,

735

2,84

3,89

3

78

3,80

0

Mis

cella

neou

s so

urce

s (u

ses)

-

-

64,6

63

-

-

1,00

0,00

0.0

-

-

Con

tribu

tions

-

-

2,95

9,20

8

1,

348,

323

-

-

-

-

Gai

n (lo

ss) o

n sa

le o

f cap

ital a

sset

s-

-

-

20

,557

33

6,89

8

34,7

34

586,

780

(3

,767

)

Tran

sfer

s1,

817,

743

1,27

4,48

9

1,

216,

211

321,

902

44

,337

20

2,20

4

480,

030

21

9,92

2

Tota

l bus

ines

s-ty

pe a

ctiv

ities

2,37

0,16

0

2,

198,

935

5,42

8,35

1

3,

700,

161

3,96

9,98

4

5,

798,

423

5,18

2,28

8

2,

186,

516

Tota

l prim

ary

gove

rnm

ent

51,5

59,3

29$

55,5

69,3

29$

67,2

57,8

39$

64,9

85,9

19$

70,3

39,9

47$

84,1

61,6

42$

76,8

41,6

96$

66,5

94,8

90

Cha

nge

in N

et A

sset

s

Gov

ernm

enta

l act

iviti

es18

,537

,480

$

17

,424

,097

$

20

,340

,785

$

19

,614

,830

$

20

,195

,063

$

29

,648

,770

$

12

,157

,490

$

4,

466,

537

$

Busi

ness

-type

act

iviti

es8,

297,

659

10,0

52,0

65

7,11

8,95

2

2,

842,

467

7,57

4,55

1

9,

985,

227

9,89

3,92

7

(9

42,7

13)

Prio

r per

iod

adju

stm

ents

13,4

10,7

11

4,35

4,58

5

45

,774

,785

-

-

18

,452

,702

8,

716,

830

(127

,503

)

Tota

l prim

ary

gove

rnm

ent

40,2

45,8

50$

31,8

30,7

47$

73,2

34,5

22$

22,4

57,2

97$

27,7

69,6

14$

58,0

86,6

99$

30,7

68,2

47$

3,39

6,32

1$

Not

e: Y

ears

200

2-20

04 h

ave

not b

een

rest

ated

; all

the

busi

ness

-type

fund

s th

at w

ere

not i

ndiv

idua

lly s

tate

d ar

e co

mbi

ned

unde

r "O

ther

bus

ines

s-ty

pe a

ctiv

ities

".

Begi

nnin

g in

yea

r 200

7 th

e Pu

blic

Fac

ilitie

s D

istri

ct (P

FD) i

s se

para

tely

repo

rted

as a

Dis

cret

e C

ompo

nent

Uni

t acc

ount

ing

for a

cha

nge

in n

et a

sset

s of

$13

,559

,751

bet

wee

n 20

06 a

nd 2

007.

7-5

2002

2003

2004

2005

2006

2007

2008

2009

Gen

eral

Fun

dR

eser

ved

35,3

00$

36

,500

$

36,1

00$

1,

682

$

1,63

7,36

8$

1,

453,

257

$

1,26

1,78

2$

1,

062,

649

$

Unr

eser

ved

4,96

1,07

0

6,

966,

500

7,46

0,68

5

10

,438

,803

12,5

73,6

54

24

,242

,434

14,4

89,3

31

12

,787

,288

Tota

l gen

eral

fund

4,99

6,37

0$

7,

003,

000

$

7,49

6,78

5$

10

,440

,485

$

14,2

11,0

22$

25

,695

,691

$

15,7

51,1

13$

13

,849

,937

$

All O

ther

Gov

ernm

enta

l Fun

ds

Res

erve

d, re

porte

d in

:S

peci

al re

venu

e fu

nds

1,00

0$

1,

100

$

1,10

0$

1,

000

$

1,00

0$

1,

000

$

2,00

0$

2,

000

$

Deb

t ser

vice

fund

s2,

683,

498

1,69

3,16

3

1,

025,

176

816,

143

75

8,58

4

475,

591

49

6,11

0

587,

923

P

erm

anen

t fun

ds-

-

-

2,45

0,00

0

5,

982,

770

6,37

2,89

6

6,

673,

126

7,07

6,74

7

U

nres

erve

d, re

porte

d in

:S

peci

al re

venu

e fu

nds

21,3

40,9

70

24

,806

,318

34,1

11,9

90

41

,122

,938

40,1

25,7

31

40

,496

,481

37,7

48,5

00

30

,188

,799

Cap

ital p

roje

ct fu

nds

828,

094

88

2,04

8

6,23

3,09

4

7,

289,

560

1,77

1,84

2

82

8,93

0

139,

972

-

Per

man

ent f

unds

1,17

9,41

0

5,

454,

080

5,80

2,55

4

3,

641,

024

523,

616

74

7,70

4

757,

342

85

7,72

5

Tota

l all

othe

r gov

ernm

enta

l fun

ds26

,032

,972

$

32,8

36,7

09$

47

,173

,914

$

55,3

20,6

65$

49

,163

,543

$

48,9

22,6

02$

45

,817

,050

$

38,7

13,1

94$

Tota

l Gov

ernm

enta

l Fun

ds31

,029

,342

$

39,8

39,7

09$

54

,670

,699

$

65,7

61,1

50$

63

,374

,565

$

74,6

18,2

93$

61

,568

,163

$

52,5

63,1

31$

Sche

dule

3

(mod

ified

acc

rual

bas

is o

f acc

ount

ing)

Last

Eig

ht F

isca

l Yea

rsFu

nd B

alan

ces,

Gov

ernm

enta

l Fun

ds

Not

e: T

he s

peci

al re

venu

e fu

nd "G

ener

al R

eser

ve" w

as m

oved

to th

e G

ener

al F

und

in 2

003.

200

2 ha

s be

en re

stat

ed m

ovin

g "G

ener

al R

eser

ve" i

nto

the

Gen

eral

Fun

d. In

200

7 th

e P

ublic

Fac

ilitie

s D

istri

ct (P

FD) b

egan

repo

rting

sep

arat

ely

as a

Dis

cret

e C

ompo

nent

Uni

t acc

ount

ing

for a

cha

nge

in fu

nd b

alan

ce o

f $4,

761,

339

betw

een

2006

and

200

7.

7-6

Rev

enue

s20

0220

0320

0420

0520

0620

0720

0820

09Ta

xes

(see

sch

edul

e 5)

47,8

53,4

52$

52

,114

,673

$

54

,939

,484

$

58,3

34,8

61$

62

,517

,853

$

66,4

77,0

96$

66

,787

,714

$

63,0

51,2

28$

Li

cens

es a

nd p

erm

its56

1,44

4

664,

696

68

6,05

3

748,

160

83

9,56

1

917,

718

96

2,98

9

96

6,93

7

In

terg

over

nmen

tal r

even

ue10

,842

,978

7,50

5,41

4

10

,701

,346

9,35

2,25

6

10

,839

,504

11,9

80,9

89

12

,338

,995

17,6

25,3

91

C

harg

es fo

r ser

vice

s15

,296

,397

15,9

54,5

48

12,7

96,3

30

13

,635

,249

15,2

82,8

51

18

,728

,092

15,2

05,3

92

15

,971

,339

Fine

s an

d fo

rfeits

1,50

6,19

0

1,

435,

403

1,50

5,71

8

1,

531,

297

1,75

7,92

2

1,

153,

695

1,13

6,33

5

1,24

5,62

0

Inve

stm

ent i

ncom

e-

-

-

-

-

-

-

1,41

6,71

0

Mis

cella

neou

s re

venu

es4,

627,

262

8,13

4,49

8

3,

065,

575

5,83

5,32

4

5,

390,

953

13,1

21,5

64

6,

393,

108

1,

520,

850

Tota

l rev

enue

s80

,687

,723

85,8

09,2

32

83,6

94,5

06

89

,437

,147

96,6

28,6

44

11

2,37

9,15

4

102,

824,

533

10

1,79

8,07

5

Expe

nditu

res

Gen

eral

gov

ernm

ent s

ervi

ces

13,2

54,8

49

14

,333

,409

11

,013

,084

11,2

99,3

97

14

,188

,145

14,0

81,1

46

16

,141

,149

15,5

07,3

32

Pu

blic

saf

ety

25,1

61,6

49

27

,028

,326

26

,995

,761

29,2

26,9

10

31

,616

,600

33,0

44,2

38

37

,662

,623

36,5

75,1

03

Ph

ysic

al e

nviro

nmen

t3,

855,

560

4,06

8,25

1

4,

119,

080

4,01

3,73

9

4,

374,

785

4,93

8,86

8

6,

752,

365

7,

391,

028

Tr

ansp

orta

tion

4,19

0,47

9

4,

166,

516

4,29

7,50

7

4,

963,

151

4,97

5,44

3

5,

234,

218

5,90

4,38

7

5,76

7,04

7

Econ

omic

env

ironm

ent

4,36

2,28

8

3,

762,

357

4,14

0,27

6

4,

066,

829

5,49

4,39

2

4,

976,

102

5,39

8,50

3

5,93

9,61

7

Men

tal a

nd p

hysi

cal h

ealth

42,0

27

70

,045

57,5

29

60

,093

60,0

93

45

,929

77,3

46

47

,087

Cul

tura

l and

recr

eatio

n10

,754

,115

11,1

17,7

28

11,3

46,8

89

11

,825

,657

12,8

96,3

67

12

,880

,007

14,7

27,5

61

15

,015

,039

Deb

t ser

vice

:R

edem

ptio

n of

gen

eral

long

-term

deb

t 3,

048,

816

2,47

9,39

0

2,

816,

311

2,61

1,03

1

2,

633,

025

2,51

9,89

3

2,

664,

430

2,

219,

918

In

tere

st a

nd o

ther

deb

t ser

vice

cos

t 1,

124,

505

962,

322

1,

217,

242

1,47

9,86

4

1,

316,

975

1,20

7,35

5

1,

162,

285

1,

091,

742

C

apita

l out

lay

17,4

15,2

48

10

,273

,780

22

,535

,717

8,72

8,50

6

21

,129

,218

15,8

20,3

42

23

,252

,908

20,5

21,0

65

Tota

l exp

endi

ture

s83

,209

,536

78,2

62,1

24

88,5

39,3

96

78

,275

,177

98,6

85,0

43

94

,748

,098

113,

743,

557

11

0,07

4,97

8

Sche

dule

4C

hang

es in

Fun

d B

alan

ces,

Gov

ernm

enta

l Fun

dsLa

st E

ight

Fis

cal Y

ears

(mod

ified

acc

rual

bas

is o

f acc

ount

ing)

Exce

ss (d

efic

ienc

y) o

f rev

enue

s(2

,521

,813

)

7,

547,

108

(4,8

44,8

90)

11,1

61,9

70

(2

,056

,399

)

17

,631

,056

(10,

919,

024)

(8,2

76,9

03)

over

(und

er) e

xpen

ditu

res

Oth

er F

inan

cing

Sou

rces

(Use

s)

Gen

eral

long

-term

deb

t1,

487,

500

1,19

0,00

0

14

8,75

0

148,

750

-

-

-

-

Cur

rent

refu

ndin

g of

long

-term

deb

t-

-

(9

70,0

00)

-

-

-

-

-

Inte

rest

and

oth

er d

ebt s

ervi

ce c

osts

-

-

(6,4

47)

-

-

-

-

-

Bond

issu

e-

-

20

,690

,000

-

-

-

-

-

Prem

ium

on

bond

s-

-

42

5,31

4

-

-

-

-

-

Gai

n (lo

ss) o

n sa

le o

f cap

ital a

sset

s17

4,36

0

-

1,

021,

934

1

-

-

-

-

Insu

ranc

e re

cove

ries

-

-

-

-

-

-

1,00

8,04

6

119,

800

Tran

sfer

s in

4,22

2,53

1

8,

715,

789

4,29

7,91

7

5,

588,

838

9,89

6,03

6

4,

901,

560

3,54

9,29

1

3,20

3,50

0

Tran

sfer

s ou

t(5

,849

,273

)

(8

,642

,530

)

(5

,934

,020

)

(5

,809

,108

)

(1

0,22

6,22

2)

(6,5

27,5

47)

(6,6

88,4

46)

(4,0

51,4

36)

Tota

l oth

er fi

nanc

ing

sour

ces

and

(use

s)35

,118

1,26

3,25

9

19

,673

,448

(71,

519)

(3

30,1

86)

(1

,625

,987

)

(2

,131

,109

)

(7

28,1

36)

Net

cha

nge

in fu

nd b

alan

ces

(2,4

86,6

95)

$

8,81

0,36

7$

14

,830

,990

$

11,0

90,4

51$

(2

,386

,585

)$

16

,005

,069

$

(13,

050,

133)

$

(9,0

05,0

39)

$

Deb

t ser

vice

as

a pe

rcen

tage

of n

on-c

apita

l6.

3%5.

1%6.

1%5.

9%5.

1%4.

7%4.

2%3.

7%

exp

endi

ture

s

Not

e: In

200

7 th

e Pu

blic

Fac

ilitie

s D

istri

ct (P

FD) b

egan

repo

rting

sep

arat

ely

as a

Dis

cret

e C

ompo

nent

Uni

t acc

ount

ing

for a

cha

nge

in fu

nd b

alan

ce o

f $4,

761,

339

betw

een

2006

and

200

7. In

200

9 in

vest

men

t Inc

ome

reve

nue

was

mov

ed fr

om m

isce

llane

ous

reve

nue

and

plac

ed in

to it

s ow

n ca

tego

ry.

7-7

Fisc

alB

usin

ess

&R

eal e

stat

eye

arP

rope

rtyS

ales

& u

seU

tility

occu

patio

nex

cise

O

ther

Tota

l

2000

11,0

03,6

47$

14

,358

,070

$

9,10

5,31

6$

7,71

7,64

4$

1,76

7,13

3$

58

9,43

2$

44

,541

,242

$

2001

11,8

45,5

18

14

,791

,125

8,98

9,73

3

7,82

8,80

4

1,87

9,59

7

61

6,81

3

45

,951

,590

2002

12,5

10,0

81

15

,788

,357

8,81

1,56

7

8,09

8,18

7

1,99

7,63

0

64

7,63

0

47

,853

,452

2003

12,4

57,2

96

17

,672

,260

9,23

9,96

1

9,34

1,03

3

2,85

7,68

8

54

6,43

5

52

,114

,673

2004

12,8

92,1

61

18

,781

,687

9,64

8,37

2

9,56

7,34

7

3,47

1,14

6

57

8,77

1

54

,939

,484

2005

12,8

41,8

75

19

,974

,866

10,1

87,8

87

10

,878

,402

3,82

8,07

8

62

3,75

3

58

,334

,861

2006

13,0

74,9

70

22

,136

,373

11,1

39,9

16

11

,701

,244

3,85

8,36

2

60

6,98

8

62

,517

,853

2007

15,8

00,8

11

21

,854

,573

12,1

22,0

00

12

,666

,213

3,41

9,60

8

61

3,89

1

66

,477

,096

2008

16,6

20,7

68

21

,603

,021

12,7

95,2

35

12

,586

,101

2,54

0,77

1

64

1,81

8

66

,787

,714

2009

16,4

17,7

02$

18

,763

,691

$

13,5

17,7

85$

11

,563

,715

$

1,87

8,29

1$

91

0,04

4$

63

,051

,228

$

Cha

nge

2000

-200

949

.20%

30.6

8%48

.46%

49.8

3%6.

29%

54.3

9%41

.56%

Sche

dule

5Ta

x R

even

ues

by S

ourc

e, G

over

nmen

tal F

unds

Last

Ten

Fis

cal Y

ears

7-8

Fisc

alR

eal

Per

sona

lTo

tal a

llTo

tal d

irect

year

prop

erty

prop

erty

prop

erty

tax

rate

2000

-$

-

$

3,

932,

604,

474

$

3.09

686

2001

-

-

4,

154,

459,

646

3.13

236

2002

-

-

4,

488,

602,

150

3.02

195

2003

-

-

4,

598,

293,

447

2.92

713

2004

-

-

4,

683,

841,

660

2.96

765

2005

-

-

5,

348,

485,

164

2.62

756

2006

6,22

9,38

2,88

8

40

5,62

2,60

1

6,

635,

005,

489

2.20

442

2007

6,44

3,57

4,16

3

42

5,07

4,37

6

6,

868,

648,

539

2.53

663

2008

6,61

5,26

4,14

4

45

5,42

2,13

4

7,

070,

686,

278

2.56

107

2009

7,61

9,78

5,05

2$

45

9,77

1,47

0$

8,

079,

556,

522

$

2.28

112

Sou

rce:

Wha

tcom

Cou

nty

Ass

esso

r's O

ffice

.

Not

e:

The

brea

kdow

n of

real

and

per

sona

l pro

perty

val

ues

are

not a

vaila

ble

prio

r to

20

Sche

dule

6A

sses

sed

Valu

e of

Tax

able

Pro

pert

y La

st T

en F

isca

l Yea

rs

7-9

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

City

of B

ellin

gham

Gen

eral

fund

2.11

316

2.

1605

3

2.09

114

2.

0919

3

2.12

921

2.

0402

0

1.68

297

1.

6867

7

1.70

899

1.

4991

2

Wha

t RD

A L

IFT

-

-

-

-

-

-

-

-

0.00

018

0.

0002

1

Fire

pen

sion

0.22

500

0.

2250

0

0.22

500

0.

2250

0

0.22

500

0.

2250

0

0.22

500

0.

2250

0

0.22

500

0.

2250

0

Sub

-tota

l non

vote

d le

vy2.

3381

6

2.38

553

2.

3161

4

2.31

693

2.

3542

1

2.26

520

1.

9079

7

1.91

177

1.

9341

7

1.72

433

V

oted

gre

enw

ays

0.57

000

0.

5700

0

0.57

000

0.

5700

0

0.57

000

0.

2974

8

0.24

761

0.

5700

0

0.57

493

0.

5116

3

Tota

l reg

ular

levy

2.90

816

2.

9555

3

2.88

614

2.

8869

3

2.92

421

2.

5626

8

2.15

558

2.

4817

7

2.50

910

2.

2359

6

Vot

ed e

xces

s le

vies

0.18

870

0.

1768

3

0.13

581

0.

0402

0

0.04

344

0.

0648

8

0.04

884

0.

0548

6

0.05

197

0.

0451

6

Tota

l City

of B

ellin

gham

levy

3.09

686

3.

1323

6

3.02

195

2.

9271

3

2.96

765

2.

6275

6

2.20

442

2.

5366

3

2.56

107

2.

2811

2

Ove

rlapp

ing

dist

ricts

Sta

te s

choo

ls3.

3593

9

3.27

641

3.

1429

9

3.11

238

3.

1569

5

3.21

948

2.

9793

7

2.69

846

2.

4270

1

2.21

902

C

ount

y le

vy1.

5251

1

1.49

770

1.

4704

1

1.45

274

1.

5502

3

1.46

589

1.

3253

7

1.14

785

1.

0888

4

1.01

676

C

onse

rvat

ion

futu

res

0.06

250

0.

0625

0

0.06

136

0.

0606

2

0.06

022

0.

0569

4

0.05

148

0.

0445

3

0.04

229

0.

0394

9

Dire

ct a

nd O

verla

ppin

g Pr

oper

ty T

ax R

ates

Sche

dule

7

Last

Ten

Fis

cal Y

ears

(per

$1,

000

of a

sses

sed

valu

e)

Floo

d co

ntro

l-

--

-0.

1937

0

0.18

345

0.

1658

2

0.14

354

0.

1362

5

0.16

598

P

ort o

f Bel

lingh

am0.

3963

4

0.39

634

0.

3901

2

0.38

575

0.

3832

0

0.38

258

0.

3832

0

0.34

220

0.

3246

5

0.30

593

B

ellin

gham

Sch

ool D

istri

ct3.

9583

3

3.91

471

3.

7260

5

3.83

237

3.

7920

8

3.45

964

2.

9779

0

3.27

693

3.

2629

9

2.98

677

Tota

l City

& o

verla

ppin

g le

vy12

.398

5312

.280

0211

.812

8811

.770

9912

.104

0311

.395

54

10.0

8756

10

.190

14

9.84

310

9.

0150

7

Sou

rce:

Wha

tcom

Cou

nty

Ass

esso

r's O

ffice

.N

ote:

A p

ortio

n of

the

City

of B

ellin

gham

lies

with

in th

e M

erid

ian

Sch

ool D

istri

ct. T

he 2

009

levy

rate

for M

erid

ian

is 3

.477

21.

7-10

Taxp

ayer

Ran

kR

ank

Pug

et S

ound

Ene

rgy

(Enc

ogen

)12

5,68

1,71

4$

1

1.56

%11

7,25

1,07

0$

1

2.79

%

Bel

lis F

air M

all -

Bel

lis F

air P

artn

ers

32,8

56,9

40

20.

41%

35,1

45,9

30

40.

83%

PK

II S

unse

t Squ

are

LLC

20,8

91,4

50

30.

26%

-

0

-

Qw

est C

orpo

ratio

n17

,988

,333

4

0.22

%-

0-

Met

ropo

litan

Life

Insu

ranc

e C

o17

,174

,245

5

0.21

%-

0-

Spr

ing

Cre

ek R

etire

men

t Cen

ter -

MW

SH

Bel

lingh

am L

LC15

,863

,025

6

0.20

%-

0-

Fred

Mey

er -

Rou

ndup

Com

pany

15,5

37,9

50

70.

19%

-

0

-

Bel

leau

Woo

ds -

Car

ey N

orth

wes

t LLC

14,6

08,3

00

80.

18%

-

0

-

Cas

cade

Nat

ural

Gas

13,7

01,9

28

90.

17%

-

0

-

Mad

rona

Med

ical

- 45

45 C

orda

ta P

arkw

ay L

LC13

,471

,175

10

0.17

%9

0.00

%

Geo

r gia

-Pac

ific

Wes

t, In

c.-

-

46,2

59,5

25

2

1.10

%

Per

cent

age

of

tota

l city

taxa

ble

asse

ssed

val

ue

Per

cent

age

of

tota

l city

taxa

ble

asse

ssed

val

ue

Sche

dule

8Pr

inci

pal P

rope

rty

Tax

Paye

rsC

urre

nt Y

ear a

nd N

ine

Year

s Pr

ior

2009

2000

Taxa

ble

asse

ssed

va

lue

Taxa

ble

asse

ssed

va

lue

Geo

rgia

Pac

ific

Wes

t, In

c.

46,2

59,5

25

2

1.10

%

Bel

lingh

am C

old

Sto

rage

- Ta

lbot

RE

LLC

-

-

38

,372

,695

3

0.91

%

Trill

ium

Cor

pora

tion

-

-

28

,007

,080

5

0.67

%

Pug

et S

ound

Ene

rgy

-

0.

00%

20,7

87,2

64

60.

49%

Pan

Pac

ific

Dev

elop

men

t Cor

pora

tion

-

-

20

,182

,195

7

0.48

%

Brit

ax C

abin

Inte

riors

, Inc

.-

-

12,9

47,1

00

80.

31%

KIR

Bel

lingh

am L

P-

-

12,9

08,6

30

90.

31%

RV

IP C

A/W

A/O

R P

ortfo

lio L

C-

-

11,1

73,1

50

100.

27%

Tota

l top

ten

prin

cipa

l tax

paye

rs28

7,77

5,06

0$

3.

56%

343,

034,

639

$

8.15

%

Tota

l all

taxp

ayer

s8,

079,

556,

522

$

4,

210,

019,

871

$

Sou

rce:

Wha

tcom

Cou

nty

Ass

esso

r's O

ffice

.

7-11

Del

inqu

ent

Taxe

s le

vied

colle

ctio

ns,

Fisc

alfo

r the

P

erce

ntag

e&

tax

levy

Per

cent

age

year

fisca

l yea

rA

mou

ntof

levy

chan

ges

Am

ount

of le

vy

2000

12,1

65,9

55$

11

,862

,824

$

97.5

%30

3,10

0$

12,1

65,9

24$

99

.999

7%

2001

13,0

01,4

59

12

,547

,663

96.5

%45

3,85

5

13,0

01,5

18

10

0.00

05%

2002

13,5

55,4

13

13

,244

,413

97.7

%31

1,05

0

13,5

55,4

63

10

0.00

04%

2003

13,4

57,1

61

13

,132

,508

97.6

%32

4,60

8

13,4

93,3

84

99

.999

7%

2004

13,9

10,6

30

13

,656

,680

98.2

%25

2,63

4

13,9

45,2

59

99

.990

5%

2005

14,0

50,8

25

13

,767

,756

98.0

%28

1,41

1

14,0

41,0

65

99

.988

2%

2006

14,6

23,2

52

14

,371

,570

98.3

%24

8,92

5

14,6

20,4

94

99

.981

1%

2007

1741

920

717

161

069

985%

213

240

1734

251

299

7423

%

Sche

dule

9Pr

oper

ty T

ax L

evie

s an

d C

olle

ctio

nsLa

st T

en F

isca

l Yea

rs

Col

lect

ed w

ithin

the

fisca

l yea

r of t

he le

vyTo

tal c

olle

ctio

ns to

dat

e

2007

17,4

19,2

07

17,1

61,0

69

98.5

%21

3,24

0

17,3

42,5

12

99.7

423%

2008

18,1

04,4

29

17

,976

,878

99.3

%23

,989

18,0

00,8

67

99

.428

0%

2009

18,4

26,7

28$

18

,187

,142

$

98.7

%-

$

18

,187

,142

$

98.6

998%

Sou

rce:

Wha

tcom

Cou

nty

Trea

sure

r's O

ffice

.N

ote:

Beg

inni

ng in

the

year

200

9 de

linqu

ent p

rope

rty ta

x co

llect

ions

and

cha

nges

to th

e ta

x le

vy a

mou

nts

are

repo

rted

in

t

he y

ear l

evie

d.

7-12

2002

10,9

60,0

00$

3,98

5,00

0$

193,

076

$

2,

684,

617

$

17,3

33,2

93$

1,04

5,00

0$

-$

1,39

8,79

8$

37,5

99,7

84$

2.16

%54

6

2003

9,99

0,00

0

3,

160,

000

18

8,48

3

3,69

4,82

1

15

,307

,399

97

5,00

0

-

2,

216,

198

35

,531

,901

2.

02%

513

2004

28,4

90,0

00

2,39

5,00

0

183,

557

3,

517,

186

17,7

86,7

60

890,

000

3,00

0,00

0

2,

064,

598

58

,327

,101

3.

13%

835

2005

26,7

55,0

00

1,86

5,00

0

178,

275

3,

325,

188

16,0

72,8

72

9,38

3,72

4

2,50

0,00

0

2,

004,

515

62

,084

,574

3.

11%

873

2006

25,0

45,0

00

1,29

5,00

0

172,

612

2,

977,

826

25,5

12,8

05

9,02

4,03

8

2,00

0,00

0

2,

527,

532

68

,554

,813

3.

22%

948

2007

23,2

55,0

00

925,

000

166,

539

2,

624,

007

23,0

06,0

84

8,65

4,35

2

1,50

0,00

0

2,

370,

545

62

,501

,527

2.

70%

851

2008

21,5

42,9

12

514,

485

160,

027

2,

211,

089

26,4

35,0

00

8,24

5,09

8

1,00

0,00

0

2,

177,

772

62

,286

,383

2.

47%

828

2009

19,7

16,5

56$

286,

110

$

153,

045

$

2,

053,

154

$

23,6

60,0

00$

7,85

0,58

5$

-$

1,98

5,00

0$

55,7

04,4

50$

-

73

5

Nt

*N

tbd

bd

tt

ll

tid

id

dit

Gov

ernm

enta

l act

iviti

esB

usin

ess-

type

act

iviti

es

Sche

dule

10

Rat

ios

of O

utst

andi

ng D

ebt b

y Ty

peLa

st E

ight

Fis

cal Y

ears

Tota

l prim

ary

gove

rnm

ent

Per

cent

age

of

pers

onal

in

com

e**

Per

ca

pita

Fisc

al

year

Gen

eral

ob

ligat

ion

bond

s

Spe

cial

as

sess

men

t bo

nds

Not

es

paya

ble

Gov

ernm

ent

loan

s pa

yabl

eR

even

ue b

onds

(n

et)*

Gen

eral

ob

ligat

ion

bond

s (n

et)

Not

es p

ayab

leG

over

nmen

t lo

ans

paya

ble

Not

es:

*

Net

bon

ds a

re b

ond

tota

ls le

ss u

nam

ortiz

ed p

rem

ium

s an

d di

scou

nts.

**

See

Sch

edul

e 15

for p

er c

apita

per

sona

l inc

ome

and

popu

latio

n da

ta.

Loca

l dat

a is

not

yet

ava

ilabl

e fo

r 200

9 pe

rson

al in

com

e.

7-13

Per

cent

age

ofG

ener

al

Deb

t ser

vice

Net

gen

eral

actu

al ta

xabl

eFi

scal

oblig

atio

n fu

nds

oblig

atio

nva

lue

of

Per

year

bond

sav

aila

ble

bond

spr

oper

tyca

pita

2000

10,6

75,0

00$

794,

601

$

9,

880,

399

$

0.23

%14

7

2001

12,3

85,0

00

881,

320

11

,503

,680

0.

28%

167

2002

12,0

05,0

00

275,

148

11

,729

,852

0.

26%

169

2003

10,9

65,0

00

592,

312

10

,372

,688

0.

23%

148

2004

29,3

80,0

00

231,

072

29

,148

,928

0.

54%

410

2005

36,2

45,0

00

184,

183

36

,060

,817

0.

54%

499

2006

34,1

70,0

00

172,

173

33

,997

,827

0.

49%

463

2007

32,0

05,0

00

163,

426

31

,841

,574

0.

45%

423

2008

29,7

20,0

00

191,

001

29

,528

,999

0.

37%

390

2009

27,4

90,0

00$

207,

564

$

27

,282

,436

$

0.

32%

358

Sche

dule

11

Rat

ios

of G

ener

al O

blig

atio

n B

onde

d D

ebt O

utst

andi

ngLa

st T

en F

isca

l Yea

rs

7-14

Estimated Estimated share

Debt percentage of direct and

Governmental unit outstanding applicable overlapping debt

Bellingham School District #501 88,170,000$ 75.2% 66,303,840$

Ferndale School District #502 36,106,979 0.1% 36,107

Port of Bellingham 14,210,000 34.3% 4,874,030

Whatcom County 5,545,000 34.3% 1,901,935

Whatcom County Fire District #4 2,020,000 10.3% 208,060

Subtotal, overlapping debt 73,323,972

City of Bellingham direct debt 100.0% 27,490,000

Total direct and overlapping debt 100,813,972$

Sources: Assessed value data used to estimate applicable percentages is obtained from the Whatcom County

Assessor. Outstanding debt data is obtained from the Whatcom County Treasurer and the Port of Bellingham.

Estimates: The estimated percentage is calculated by dividing the portion of the taxable assessed valuation of the

City that falls within the overlapping unit by the total taxable assessed valuation of the overlapping unit.

As of December 31, 2009

Schedule 12Direct and Overlapping Governmental Activities Debt

7-15

Tota

l ass

esse

d va

lue

$8,5

96,9

97,6

98

Deb

t lim

it:

N

on-v

oted

deb

t lim

it (1

.5%

of a

sses

sed

valu

e)12

8,95

4,96

5

V

oted

deb

t lim

it (1

.0%

of a

sses

sed

valu

e)85

,969

,977

To

tal d

ebt l

imit

214,

924,

942

Deb

t app

licab

le to

lim

it:

Gen

eral

obl

igat

ion

bond

s27

,490

,000

O

ther

deb

t15

3,04

5

Less

: ass

ets

avai

labl

e fo

r rep

aym

ent o

f deb

t(2

07,5

64)

To

tal d

ebt a

pplic

able

to li

mit

27,4

35,4

81

Leg

al d

ebt m

argi

n18

7,48

9,46

1$

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Tota

l ass

esse

d va

luat

ion

4,21

0,01

9,87

1$

4,

154,

459,

646

$

4,48

8,60

2,15

0$

4,

598,

293,

447

$

5,34

8,48

5,16

4$

6,63

5,00

5,48

9$

6,

868,

648,

539

$

7,07

0,68

6,27

8$

8,

079,

556,

522

$

8,59

6,99

7,69

8$

Deb

t lim

it (2

.5%

)10

5,25

0,49

7

103,

861,

491

11

2,21

5,05

4

114,

957,

336

13

3,71

2,12

9

16

5,87

5,13

7

171,

716,

213

17

6,76

7,15

7

201,

988,

913

21

4,92

4,94

2

Tota

l net

deb

t app

licab

le to

lim

it11

,287

,381

12

,539

,020

12

,396

,661

10

,760

,312

29

,262

,019

36,2

39,0

90

34,1

70,3

37

32,0

08,1

13

29,6

89,0

26

27,4

35,4

81

Lega

l deb

t mar

gin

93,9

63,1

16$

91,3

22,4

71$

99,8

18,3

93$

104,

197,

024

$

10

4,45

0,11

0$

12

9,63

6,04

7$

137,

545,

876

$

14

4,75

9,04

4$

172,

299,

887

$

18

7,48

9,46

1$

Tota

l net

deb

t app

licab

le to

lim

it10

.7%

12.1

%11

.0%

9.4%

21.9

%21

.8%

19.9

%18

.1%

14.7

%12

.8%

a

s a

perc

enta

ge o

f deb

t lim

it

Sou

rce:

Ass

esse

d va

luat

ion

data

is o

btai

ned

from

the

Wha

tcom

Cou

nty

Ass

esso

r's O

ffice

.N

ote:

The

lega

l gen

eral

pur

pose

s de

bt li

mit

of 2

.5%

is a

utho

rized

by

RC

W 3

9.36

.020

.

Sche

dule

13

Lega

l Deb

t Mar

gin

Info

rmat

ion

Last

Ten

Fis

cal Y

ears

____

____

____

____

Lega

l Deb

t Mar

gin

Cal

cula

tion

for F

isca

l Yea

r 200

9___

____

____

____

____

7-16

Fisc

alG

ross

Ope

ratin

gN

et a

vaila

ble

Per

cent

age

Spe

cial

ass

essm

ent

Per

cent

age

year

reve

nue

expe

nse

reve

nue

Prin

cipa

lIn

tere

stbo

nd c

over

age

colle

ctio

nsP

rinci

pal

Inte

rest

bond

cov

erag

e

2000

24,7

27,5

36$

14,2

36,9

22$

10,4

90,6

14$

1,

695,

000

$

1,17

4,19

7$

3.

661,

069,

185

$

68

0,00

0$

374,

833

$

1.

01

2001

25,5

26,6

50

14,9

79,2

52

10,5

47,3

98

1,

875,

000

985,

350

3.

6987

9,45

8

53

5,00

0

337,

390

1.

01

2002

25,6

62,7

09

16,0

57,4

01

9,60

5,30

8

1,

965,

000

901,

148

3.

351,

257,

651

94

5,00

0

305,

660

1.

01

2003

25,8

20,1

31

16,3

56,3

59

9,46

3,77

2

2,

050,

000

809,

678

3.

311,

086,

486

82

5,00

0

251,

448

1.

01

2004

25,8

51,2

84

16,8

19,1

39

9,03

2,14

5

2,

150,

000

565,

726

3.

3397

3,06

9

76

5,00

0

202,

048

1.

01

2005

27,9

54,2

10

17,4

44,8

86

10,5

09,3

24

1,

725,

000

830,

794

4.

1169

5,30

5

53

0,00

0

154,

818

1.

02

2006

29,9

79,6

26

19,8

19,8

09

10,1

59,8

17

1,

860,

000

669,

589

4.

0270

2,70

9

57

0,00

0

120,

993

1.

02

2007

32,0

06,3

15

20,9

16,5

27

11,0

89,7

88

2,

520,

000

1,05

8,10

7

3.

1045

3,02

8

37

0,00

0

83,2

13

1.

00

2008

33,9

54,0

48

22,8

16,7

73

11,1

37,2

75

2,

675,

000

967,

095

3.

0641

0,96

7

35

5,00

0

58,9

25

0.

99

2009

31,7

92,0

39$

24,5

31,6

98$

7,26

0,34

1$

2,

775,

000

$

1,07

6,46

4$

1.

8935

5,51

9$

23

5,00

0$

35,2

23$

1.32

Not

es:

Det

ails

rega

rdin

g th

e C

ity's

out

stan

ding

deb

t can

be

foun

d in

the

note

s to

the

finan

cial

sta

tem

ents

. O

pera

ting

expe

nses

do

not i

nclu

de d

epre

ciat

ion

or a

mor

tizat

ion

expe

nses

.

Deb

t ser

vice

Deb

t ser

vice

Spec

ial a

sses

smen

t (LI

D) b

onds

Wat

er-S

ewer

reve

nue

bond

s

Sche

dule

14

Pled

ged-

Rev

enue

Cov

erag

eLa

st T

en F

isca

l Yea

rs

7-17

Cal

enda

r ye

arP

opul

atio

n

Per

sona

l inc

ome

(thou

sand

s of

do

llars

)P

er c

apita

pe

rson

al in

com

eM

edia

n ag

eE

duca

tion

leve

l in

year

s of

sch

oolin

gS

choo

l enr

ollm

ent

Une

mpl

oym

ent r

ate

2000

67,1

711,

627,

352

$

24

,227

$

30.4

14.7

23,3

465.

1%

2001

68,8

901,

744,

708

25

,326

--

-6.

5%

2002

69,2

601,

757,

126

25

,370

--

-6.

9%

2003

69,8

501,

860,

594

26

,637

--

-6.

8%

2004

71,0

801,

996,

566

28

,089

--

-5.

8%

2005

72,3

202,

126,

063

29

,398

30.1

15.1

22,7

265.

0%

2006

73,4

602,

317,

075

31

,542

30.7

15.0

25,6

674.

5%

2007

75,2

202,

518,

892

33

,487

29.7

14.9

29,3

434.

2%

2008

75,7

502,

597,

619

34

,292

30.3

14.9

26,2

765.

0%

2009

76,1

30-

$

-$

-

--

8.0%

Pop

ulat

ion

sour

ce:

Sta

te o

f Was

hing

ton,

Offi

ce o

f Fin

anci

al M

anag

emen

t.

Per

cap

ita p

erso

nal in

com

e so

urce

: Fe

dera

l Res

erve

Ban

k of

St.

Loui

s - E

cono

mic

Res

earc

h. L

ocal

dat

a is

not

yet

ava

ilabl

e fo

r 200

9.

Med

ian

age,

edu

catio

n le

vel,

and

scho

ol e

nrol

lmen

t sou

rce:

U.S

. Cen

sus

Bur

eau,

Am

eric

an F

actF

inde

r. L

ocal

dat

a is

not

yet

ava

ilabl

e fo

r 200

9.

Une

mpl

oym

ent r

ate

sour

ce:

U.S

. Dep

artm

ent o

f Lab

or, B

urea

u of

Lab

or S

tatis

tics.

The

data

in th

is s

ched

ule

is d

eriv

ed fr

om th

e B

ellin

gham

, WA

Met

ropo

litan

Sta

tistic

al A

rea

(MS

A).

Sche

dule

15

Dem

ogra

phic

and

Eco

nom

ic S

tatis

tics

Last

Ten

Cal

enda

r Yea

rs

7-18

Em

ploy

erE

mpl

oyee

sR

ank

Perc

enta

ge o

f tot

al

city

em

ploy

men

tE

mpl

oyee

sR

ank

Perc

enta

ge o

f tot

al

city

em

ploy

men

t

St.

Jose

ph H

ospi

tal

2,71

41

2.70

%1,

800

22.

02%

Wes

tern

Was

hing

ton

Uni

vers

ity1,

664

21.

65%

1,97

01

2.22

%

Bel

lingh

am S

choo

l Dis

trict

1,26

53

1.26

%1,

216

31.

37%

Wha

tcom

Cou

nty

920

40.

91%

828

40.

93%

City

of B

ellin

gham

910

50.

90%

823

60.

93%

Hag

gen

Inc.

866

60.

86%

827

50.

93%

Sod

exho

Ser

vices

760

70.

76%

400

100.

45%

Ste

rling

Hea

lth65

38

0.65

%-

--

Fred

Mey

er's

542

90.

54%

--

-

The

Mar

kets

LLC

487

100.

48%

--

-

Anv

il C

orpo

ratio

n-

--

560

70.

63%

Bro

wn

& C

ole

Sto

res

--

-52

08

0.58

%

T-M

obile

US

A-

--

500

9

0.56

%

Tota

l em

ploy

ed b

y th

e to

p 10

em

ploy

ers

10,7

81

10.7

2%9,

444

10.6

2%

Tota

l city

em

ploy

men

t10

0,55

8

88,9

24

Sou

rces

: W

este

rn W

ashi

ngto

n U

nive

rsity

Col

lege

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7-20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009General Governmental Services

Judicial Parking tickets 50,147 46,235 42,990 49,000 47,633 50,562 43,010 48,560 52,921 50,930 Jury trials set 712 489 276 312 368 479 419 433 342 376 Jury trials held 42 30 7 6 6 11 18 12 10 14 Driving under influence cases 467 396 283 282 260 258 238 214 229 227

FinanceBusiness tax returns 19,753 19,983 20,100 20,300 20,780 21,140 21,300 21,600 21,602 20,544 Receipts issued 26,483 27,268 39,978 40,552 41,705 40,212 38,401 40,005 38,952 39,676 Invoices entered 41,288 41,302 38,469 35,718 37,363 36,028 38,250 37,834 37,341 33,866

Human Resources and PayrollApplications for employment 6,494 4,770 4,350 2,428 1,932 2,205 2,152 2,434 1,845 1,931 Selection processes 113 72 83 52 56 78 84 90 67 44 Average employees paid/mo 918 952 966 968 949 930 947 967 990 958

LegalCriminal filings 4,369 3,993 3,700 4,183 4,015 3,552 3,809 4,138 3,860 4,138 Claims filed 72 65 80 93 70 54 46 62 60 79

Public SafetyPolice

Calls for service 48,207 49,368 53,952 67,390 69,533 65,211 65,148 65,243 63,861 61,428 Calls per patrol officer 927 949 1,037 1,140 1,140 1,069 1,068 1,070 1,047 1,059 Total dispatch incidents/CAD 110,063 117,304 120,080 125,544 128,089 126,709 128,089 128,665 129,048 128,416 Incidents per dispatcher n/a n/a n/a 5,458 5,569 5,509 5,569 5,594 5,611 5,583

FireFire unit responses 8,113 8,538 8,920 9,059 9,802 8,277 8,211 7,735 7,592 7,412 Total fire inspections n/a n/a n/a 981 1,295 1,216 1,036 1,605 1,552 1,586 Fire investigations 35 18 21 11 14 7 16 18 15 16

Physical EnvironmentPublic Works

Million of gallons water treated/day 9 10 10 10 10 10 10 11 10 9 Million of gallons wastewater/day 11 12 11 12 13 12 12 12 12 13

TransportationPublic Works

Street lights maintained 2,837 2,950 3,150 3,173 3,200 3,264 3,314 3,378 3,395 3,442 Traffic signs maintained 7,330 7,740 8,650 9,893 10,237 10,510 9,070 9,612 13,249 13,595

Economic EnvironmentHearing Examiner

Cases heard 29 64 69 75 84 76 55 54 33 32 Planning

Subdivision/short plats 52 54 59 55 47 99 61 40 19 16 New lots created 149 263 201 200 123 130 284 231 81 72 Building permit applications 1,140 1,138 1,140 1,142 1,184 1,140 626 946 776 668

Development Services (Building Services)Plans reviewed 1,290 2,159 2,915 2,000 1,145 2,146 2,123 1,738 1,553 2,070 Total permits issued 4,143 4,080 4,390 4,608 4,770 4,846 4,198 4,372 3,681 3,111

Culture and RecreationLibrary

Circulation per capita 15 16 16 16 17 17 16 17 19 21 Persons visiting n/a n/a n/a 671,822 698,000 702,171 744,856 816,302 893,997 924,286

MuseumTotal attendance 100,620 103,205 107,675 103,299 104,565 111,705 106,001 103,656 90,700 50,445 Child attendance 56,090 57,178 62,146 58,501 60,580 64,586 63,477 43,549 33,127 closed

ParksAquatic center total admissions - - - 192,391 199,277 191,311 197,840 204,665 198,827 217,408 Sports and Enrichment total attendance - - - - - - 19,012 20,543 33,231 19,137 Cum. acres of parks acq-greenway levy 241 330 392 483 499 510 511 525 598 696

Source: City of Bellingham 2000-2009 adopted budgets

Operating Indicators by Function/Performance MeasuresLast Ten Fiscal Years

Schedule 18

7-21

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009General Governmental Services

City Hall 1 1 1 1 1 1 1 1 1 1 Municipal Courts Building 1 1 1 1 1 1 1 1 1 1

Public SafetyPolice

Patrol cars 41 43 47 43 48 45 40 36 39 34 Armored vehicle - - - - - - - - 1 1 Mobile precinct 1 1 1 1 1 1 1 1 1 1

FireFire stations 5 5 6 6 6 6 6 6 6 6 Fire trucks 12 12 13 13 13 13 13 13 13 12 Command vehicle - - - - - - - - 1 1 Ambulances 9 10 10 10 10 10 11 13 13 13

Physical EnvironmentCemetery 1 1 1 1 1 1 1 1 1 1 Public Works

Operations facility complex (Pacific St.) 1 1 1 1 1 1 1 1 1 1 Water mains (miles) 354 361 368 377 383 386 387 392 395 390 Sewer mains (miles) 297 302 305 310 316 319 316 316 316 316 Storm mains (miles) 194 196 202 206 210 212 297 322 328 311 Fire hydrants (total) - - - - - 3,050 3,099 3,119 3,149 3,154 Water storage capacity (millions of gallons) - - - - - 24 24 24 24 24 Wastewater treatment capacity - - - - - 20 20 20 20 20 (millions of gallons)

TransportationParking

Parking garage 1 1 2 2 2 2 2 2 2 2 Surface parking lots 3 3 3 3 3 3 3 3 3 3

Public WorksStreets (miles) 258 259 269 275 280 286 289 280 297 298 Traffic signs maintained - - - - - 110 110 143 143 149

Culture and RecreationLibrary

Libraries (buildings) 2 2 2 2 2 2 2 2 2 2 Museum

Museums (buildings) 2 2 2 2 2 2 2 2 2 2 Parks Department

Parks 38 38 38 40 40 40 40 40 40 40 Civic field complex:

Football stadium 1 1 1 1 1 1 1 1 1 1 Ice rink / indoor soccer - - - 1 1 1 1 1 1 1 Skateboard / bicycle park - 1 1 1 1 1 1 1 1 1

Baseball / softball fields 9 9 9 9 9 9 9 9 9 9 Swimming pool 1 1 1 1 1 1 1 1 1 1 Golf course 1 1 1 1 1 1 1 1 1 1

Public Facilities District (PFD)Theater 1 1 1 1 1 1 1 1 1 1 Museum - - - - - - - - - 1

Source: City of Bellingham 2000-2009 adopted budgets

Schedule 19Capital Asset Statistics by Function

Last Ten Fiscal Years

7-22

MCAG No. 0776 Schedule 16

Page 1 of 2

1 2 3 4 5 6Expenditures

Federal Agency Name / Pass- Through Agency Name

Federal Program Name CFDA Number

Other ID Number From Pass-Through Awards

From Direct Awards Total

Foot-note Ref.

US Department of Agriculture / WA State Dept. of Natural Resources

Cooperative Forestry Assistance 10.664 IAA 08-489 / K244-06-DG-599

$4,133 $4,133US Department of Housing and Urban Development

Community Development Block Grants

14.218 B(07)(08)&(09)-MC-53-0010 $1,997,418 1,997,4183

US Department of Housing and Urban Development / WA St Department of Commerce

Community Development Block Grants-State Grants

14.228 08-F6401-030 5,529 5,529

US Department of Housing and Urban Development

HOME Investment Partnerships Program

14.239 M(07)&(08)-MC-53-0204 1,037,941 1,037,9413


Economic Development Initiative-Special Project Grants

14.251 B-08-SP-WA-0507 228,496 228,496


ARRA-CDBGR Entitlement Grants

14.253 B-09-MY-53-0010 12,319 12,3194

US Department of the Interior Save America's Treasures 15.929 53-07-PA-3042 86,981 86,9812

US Department of the Interior Federal Building Restoration 15.999 Consolidated Appropriation Act, 2004 (H.R.2673)

1,764,617 1,764,617

US Department of Justice / WA State Department of Community Trade and Economic Development / DVSAS of Whatcom County

Violence Against Women Formula Grants

16.588 N/A 15,563

2009-WF-AX-0076 6 950 2

City of Bellingham, WashingtonSchedule of Expenditures of Federal Awards


2009-WF-AX-0076 6,950 2 Sub-Total 22,513 22,513

US Department of Justice The Community-Defined Solutions to Violence Against Women

16.590 2005-WE-AX-0080 139,700 139,700

US Department of Justice Bulletproof Vest Partnership Program

16.607 OMB#1121-0235 10,480 10,4802

US Department of Justice Public Safety Partnership and Community Policing Grants

16.710 2008-CK-WX-0163 227,487 227,487

US Department of Justice / WA State Department of Community Trade and Economic Development / Whatcom County Sheriff's Office

Edward Byrne Memorial Justice Assistance Grant Program

16.738 F07-66201-017 20,706

2

US Department of Justice / WA State Department of Commerce / Whatcom County Sheriff's Office

Edward Byrne Memorial Justice Assistance Grant Program

16.738 M09-34021-017 2,891

2

Sub-Total 23,597 23,597

US Department of Justice / Washington Association of Sheriff's and Police Chiefs

ARRA-Edward Byrne Memorial Justice Assistance Grant

16.803 N/A 48,6114

US Department of Justice / WA State Department of Commerce / Whatcom County Sheriff's Office

ARRA-Edward Byrne Memorial Justice Assistance Grant

F-09-34721-017 42,109

2,4

Sub-Total 90,720 90,720

US Department of Justice ARRA-Edward Byrne Memorial Justice Assistance Grant

16.804 2009-SB-B9-2463 29,425 29,4254

Subtotal Federal Awards Expended $146,492 $5,534,864 $5,681,356

The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.

8-1


Page 2 of 2

1 2 3 4 5 6Expenditures

Federal Agency Name / Pass- Through Agency Name

Federal Program Name CFDA Number

Other ID Number From Pass-Through Awards

From Direct Awards Total

Foot-note Ref.

US Department of Transportation / WA State Department of Transportation

ARRA-Highway Planning and Construction

20.205 ARRA-9937(002)/LA6888 308,596 308,596

2, 4

US Department of Transportation / WA State Department of Transportation

Highway Planning and Construction

20.205

BRM-5511(001)/LA7052 1,907 2 NCPD-STPUS-0542(021)/LA5608 3,637,476 2 HPP-0080(016)/LA6713 169,472 HPP-5508(002)/LA6274 681,590 POMVIP-5548(001)/LA7008 13,405 STPD-0080(011)/(012)/LA6161 28,269 SRTS-0080(015)/LA6661 204,818 STPE-0080(009)/LA6148 48,605 STPE-0080(010)/LA6149 10,167 2 STPE 0080(014)/LA6657 587,857 STPE-5525(005)/LA6330 128,628 2 STPR-5534(001)/LA6329 166,845 2 Sub-Total 5,679,039 5,679,039

US Department of Transportation / WA Traffic Safety Commission

State and Community Highway Safety

20.600 N/A 523 523

US Department of Transportation / WA Traffic Safety Commission

Alcohol Impaired Driving Countermeasures Incentive Grants

20.601 N/A 14,279 14,2792

US Department of Transportation / WA Traffic

Occupant Protection Incentive Grants

20.602 N/A 859 859

City of Bellingham, WashingtonSchedule of Expenditures of Federal Awards


Transportation / WA Traffic Safety Commission

Grants

US National Endowment for the Arts

Promotion of the Arts Grants 45.024 N/A 12,000 12,000 2

US Institute of Museum and Library Services / Washington State Library / Bellingham School District

Grants to States 45.310 08-SSS-c-011 & 09-SSS-c-002 3,744 3,744

US Department of Energy Energy Efficiency and Conservation Block Grant

81.128 DE-SC0002224 129 129

US Department of Education / Western Washington University

Federal Work-Study Program 84.033 students 4,1862

US Department of Education / Whatcom Community College

students 2,6172

Sub-Total 6,803 6,803US Department of Homeland Security / WA State Military Department

Emergency Management Performance Grants

97.042 2008-EM-E8-0028 82,6862

2009-EP-E9-0010 49,363Sub-Total 132,049 132,049

US Department of Homeland Security

Assistance to Firefighters Grant 97.044 EMW-2008-FO-10704 68,255 68,255 2

US Department of Homeland Security / Whatcom County Fire Agency Radio Systems

Interoperable Communications Systems

97.055 N/A 3,000 3,0002

US Department of Homeland Security / Whatcom County Sheriff's Office

Homeland Security Grant Program

97.067 2007-GE-T7-0017 20,653 20,653

US Department of Homeland Security / Whatcom County Sheriff's Office

Law Enforcement Terrorism Prevention Program

97.074 2007-GE-T7-0017 39,212 39,212

Subtotal - page 1 146,492 5,534,864 5,681,356Total Federal Awards Expended $6,367,378 $5,603,119 $11,970,497

The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.

8-2


NOTE 1 - BASIS OF ACCOUNTING

NOTE 2 - PROGRAM COSTS

NOTE 3 - REVOLVING LOAN - PROGRAM INCOME

NOTE 4 - ARRAThe City has expended funds under four separate American Recovery and ReinvestmentAct (ARRA) grant awards.

This schedule is prepared on the same basis of accounting as the City of Bellingham's financial statements. The City uses the accrual basis of accounting for proprietary funds and the modified accrual basis of accounting for governmental funds.

The amounts shown as current year expenditures represent only the federal grant portion of the program costs. The entire program costs, including the City's portion, are more than the amounts shown.

The City has revolving loan programs under the Community Development Block Grant (CDBG) and the HOME Investment Partnership Program Grant for low income housing acquisitions, development, and rehabilitation. Under these federal programs, repayments to the City are considered program revenues (income) and loans of such funds to eligible recipients are considered expenditures. The amount of loan funds disbursed to program participants for the year from the CDBG Grant was $828,442 and from the HOME Grant was $919,624 and are presented in this schedule. The amounts of principal and interest received in loan payments for the year for CDBG loans were $228,676 and for HOME loans were $51,334.

City of Bellingham, WashingtonNotes to Schedule of Expenditures of Federal Awards


8-3


Grantor / Pass-Through Granter / Program Title Other ID Number Current Year Expenditures

Foot-note Ref.

Washington Auto Theft Prevention Agency

Automated License Plate Recognition Device 09-ET-WATPA-002 29,196Washington State Department of Commerce

Building for the Arts Program - Mt. Baker Theatre 10-96102-015 975,000 1Washington State Department of Ecology

Centennial Clean Water - Bellingham Water Quality & Habitat Improvement G0800132 27,327 Centennial Clean Water - Marine Nearshore Water Quality & Habitat G0900085 40,712 Centennial Clean Water - Salmon Habitat Restoration G0500140 42,167 Centennial Clean Water - Urban Streams Restoration G0400200 27,358 Local Source Control Partnership C0800259 101,443 Remedial Action - Little Squalicum G0500154 52,583 Stormwater - Art of Stormwater Management G0800619 368,717 1 Stormwater - Local Government Stormwater G0800297 32,312 Stormwater - Phase II Stormwater Pass-Through G1000198 36,767 Stormwater - Residential Stormwater Retrofit Program G0800614 42,083 Total Washington State Deparment of Ecology 771,469

Washington State Department of Health

EMS Prehospital Participation Grant 37M01 1,726 Total Washington State Department of Health 1,726

Washington State Higher Education / Whatcom Community College

State Work Study Program - Whatcom Community College N/A 4,019 Total Washington State Higher Education Coordinating Board 4,019

Washington State Office of Public Defense

Public Defense Services RCW 10.101.080 137,500

City of Bellingham, WashingtonSchedule of State and Local Financial Assistance


Total Washington State Office of Public Defense 137,500

Washington State Transportation Improvement Board

Urban Arterial Program - Sunset Drive 8-2-156(035)-1 57,036 Urban Arterial Program - Northwest Avenue 8-2-156(036)-1 10,409 Urban Arterial Program - Northwest Avenue Roundabout 8-2-156(038)-1 6,902 Total Washington State Transportation Improvement Board 74,347

Washington Traffic Safety Commission

School Zone Equipment Grant - Kustom Lite Lidars N/A 11,907 Total Washington Traffic Safety Commission 11,907

Total State Assistance $2,005,164Northwest Clean Air Agency

Energy Efficiency Community Challenge 2009-0337 11,150 Economic Development Initiative 200707013-1 59,054

Total Local Assistance $70,204

Total State and Local Assistance $2,075,368

NOTE 1 - Discrete Component UnitThe Bellingham Public Facilities District expended funds received from a Department of Ecology Stormwater grant in the construction of Whatcom Museum.

8-4

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