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Agenda Pkt 09152020 VirtualBOTHE LL CITY COUNCIL ***VIRTUAL MEETING*** AGENDA September 15, 2020 6:00 PM BOTHELL CITY HALL 18415 101st AVE NE BOTHELL, WA 98011 Public Notice: Pursuant to Governor Inslee’s Stay Home, Stay Healthy Proclamation 20-25 extension and the extension of Proclamation 20-28 regarding open public meetings through October 1, 2020, and in an effort to curtail the spread of the COVID -19 virus, this City Council meeting will be conducted remotely. We encourage members of the public to attend and participate in the meeting remotely, as described in more detail below. To a ttend the meeting : •Watch the meeting LIVE online on the City of Bothell YouTube Channel. •Watch the meeting live on BCTV Cable Access Channels 21/26 (must have Frontier/Comcast Cable) •Listen to the meeting live by phone: +1-510-338-9438 USA Toll / Access code: 126-969-0403 •Council meetings are also recorded and available the next day on the City of Bothell YouTube Channel. To provide written or verbal comments: •Sign-up HERE to give your comment (submissions must be received by 3:00 PM, day of meeting). MEMBERS OF THE CITY COUNCIL Mayor Liam Olsen Deputy Mayor Jeanne Zornes Councilmember Tom Agnew Councilmember Davina Duerr Councilmember Rosemary McAuliffe Councilmember James McNeal Councilmember Mason Thompson REGULAR SESSION Call to Order & Roll Call Meeting Agenda Approval During this item, the City Council may identify agenda items to be continued, withdrawn, or added. 1.Presentations, Reports, & Briefings A.Public Engagement Opportunities B.Proclamations -Bruce Blackburn Recognition -Pollution Prevention Week C.Spe cial Presentations -None at this time. D.Sta ff Briefings -State of the Streets – Jack Bartman, Senior Capital Projects Engineer E.City Manager Reports -None at this time. F.Council Committee Reports 2.Vis itor Comment If you wish to comment (either in writing or verbally) please submit a form HERE prior to 3PM (day of meeting). Verbal comments will be allowed 3 minutes to speak via phone. All comments will be made part of the record. 3.Consent Agenda All items under this section will be passed with a single motion and vote. These items are of a routine nature. Prior to approval, City Council may request items be withdrawn from the consent agenda for separate discussion. Approval of the consent agenda authorizes the City Manager to implement each item in accordance with the staff recommendation. A.AB # 20-112 – Approval of July 2020 Vouchers Recommended Action: Approve vouchers for July 2020 $2,795,018.09 B.AB # 20-113 – Approval of August 2020 Vouchers Recommended Action: Approve vouchers for August 2020 totaling $6,322,263.39. C.AB # 20-114 - Approval of a Professional Services Agreement with K & L Gates, LLP, for Continued Legal Services in Connection with Downtown Revitalization Project Recommended Action: Authorize the City Manager to enter into a Professional Services Agreement with K & L Gates, LLP, in the amount of $150,000 and in substantially the same form as presented, for legal services related to City’s downtown revitalization project. D.AB # 20-115 - Approval to Ratify Amendment to the Existing Water Resource Inventory Area (WRIA) 8 Interlocal Agreement Recommended Action: Approve the amendment with WRIA 8 approving Snohomish County to rejoin the ILA as a cost share partner contributing $64,053 annually to further salmon habitat protection and restoration planning and implementation. E.AB # 20-116 - Approval of System Access Fund Project Agreement with Sound Transit for the 102nd Ave NE Downtown Access Project Recommended Action: Approve a System Access Fund Project Agreement with Sound Transit to Accept Funding for the 102nd Ave NE Downtown Non-Motorized Access Improvements in the amount of $825,000. September 15, 2020 Agenda Packet Page 2 of 294 Pgs. 5-6 Pgs. 7-8 Pgs. 9-10 Pgs. 11-12 Pgs. 13-26 Pgs. 27-34 Pgs. 35-56 4.Public Hearings A.AB # 20-117 – Public Hearing and Consideration of Extending Interim Ordinance (Ordinance 2312) Temporarily Suspending Development Application and Permit Timelines Recommended Action: Approve an Ordinance extending Interim Ordinance No. 2312 to continue temporary suspension of development application a nd permit timelines. 5.Ordinances & Resolutions -None at this time. 6.Contracts and Agreements A.AB # 20-118 – Consideration of Contract with Gordon Thomas Honeywell Governmental Affairs (GTH) for State Government Relations Services from October 1, 2020 – September 30, 2021 Recommended Action: Authorize the City Manager to execute, in substantially the same form as presented, the Professional Services Agreement with Gordon Thomas Honeywell Government Affairs for 2020-2021 State Government Relations Services and, if approved, authorize use of $57,620 from various City funds. 7.Oth er Items A.AB # 20-119 – Second Quarter 2020 Financial Report and Audited 2019 Comprehensive Annual Financial Report (CAFR) Recommended Action: Presentation Only B.AB # 20-120 – Receive a Report on Diversity, Equity, and Inclusion Research, Consider Providing Direction to the City Manager, and Consider Approval of a Resolution Reaffirming its Commitment to be a Safe, Welcoming and Equitable Community for all and Denouncing Hatred, Intolerance and Discrimination Recommended Action: 1.Provide direction to the City Manager to come back to the Council with (1) a formal process to adopt a City-wide Diversity, Equity, and Inclusion goal, and (2) options to consider as part of the 2021-22 budget process in regard to expanding community engagement and developing a DEI initiative, and; 2.Consider approval of a Resolut ion reaffirming its commitment to be a safe, welcoming and equitable community for all and denouncing hatred, intolerance and discrimination 8.Study Session/Update/Discussion Items - None at this time. 9.Council Conversations During this item, Council members have the opportunity to informally discuss topics of city interest. 10.Executive Session/Closed Session -None at this time. 11.Adjourn September 15, 2020 Agenda Packet Page 3 of 294 Pgs. 57-62 Pgs. 63-80 Pgs. 81-260 Pgs. 261-294 CERTIFICATE I hereby certify that the above agenda was posted on September 10, 2020 by 6:00 P.M., on the official website and bulletin board at Bothell City Hall, 18415 101st Avenue NE, Bothell, WA, 98011, in accordance with RCW 42.30.077, at least 24 hours in advance of the published start time of the meeting. Laura Hathaway, City Clerk SPECIAL ACCOMODATIONS : The City of Bothell strives to provide accessible meetings for people with disabilities. If special accommodations are required, please contact the ADA Coordinator at (425) 806- 6151 at least one day prior to the meeting. Copies of agenda bills and attachments listed in this agenda may be obtained from the City Clerk's Office the Friday before the meeting. B othell City Council meetings are aired live on Bothell Community Television (BCTV) Channel 21/26 (Comcast/Frontier) (available to Comcast and Frontier Cable customers within Bothell City limits). Meetings are generally replayed according to the following schedule (subject to change): Wednesday following the meeting at 10 a.m.; Friday, Saturday and Sunday following the meeting at 10 a.m. and 7 p.m. City Council and Planning Commission meetings and the BCTV schedule are viewable online at www.bothellwa.gov September 15, 2020 Agenda Packet Page 4 of 294 Bruce Blackburn Appreciation WHEREAS, Bruce Blackburn joined the City of Bothell as an Assistant Planner on March 23, 1987, when the City’s population was 9,495; and WHEREAS, Bruce has honorably served the citizens of Bothell for over 33 years during which time the population has increased to 48,400; and WHEREAS, Bruce has distinguished himself throughout his career through the quality of his work, the breadth and depth of his knowledge, and the respect he has earned from his colleagues, managers, elected officials, applicants and members of the public; and WHEREAS, Bruce’s dedication to a consistently high level of customer service, thorough staff work and quality development has made a significant contribution to the Bothell community; and WHEREAS, Bruce has been a friend and mentor to his colleagues, encouraging their own professional growth; and WHEREAS, Bruce was a major contributor to development of the first Imagine Bothell…Comprehensive Plan in 1994 under the state Growth Management Act; and WHEREAS, Bruce led a major rewrite of the Bothell Municipal Code, creation of the City’s first tree retention ordinance, major updates of the Shoreline Master Program and Critical Areas Regulations and, most recently, the major update of the Canyon Park Subarea Plan; and WHEREAS, we celebrate Bruce’s invaluable contributions of service and friendship; and WHEREAS, we wish Bruce all the best as he retires from the City and enjoys the next chapter of his life. NOW, THEREFORE I, Liam Olsen, Mayor of the City of Bothell, do hereby proclaim the City of Bothell’s appreciation to Bruce Blackburn for his many contributions to the City of Bothell and our greater community. Signed this 15th Day of September, 2020 _____________________________ Liam Olsen, Mayor September 15, 2020 Agenda Packet Page 5 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 6 of 294 National Pollution Prevention Week WHEREAS, the United States Environmental Protection Agency acknowledges “National Pollution Prevention Week” in honor of the United States Congress passing the Pollution Prevention Act in 1990; and WHEREAS, the Pollution Prevention Act encourages pollution prevention by reducing or eliminating waste at the source by modifying production processes, promoting the use of nontoxic or less toxic substances, implementing conservation techniques, and reusing materials rather than adding them to the waste stream; and WHEREAS, the City Council’s Environment Goal is to protect the natural environment through integrated natural resource management; and WHEREAS, the City of Bothell implements programs that aim to reduce and prevent pollution generated by businesses, residents, and municipal operations by partnering with the community to protect our environment, including our wetlands, streams, lakes, and rivers. NOW, THEREFORE, I, Liam Olsen, Mayor of Bothell, do hereby proclaim the week of September 21 – 27, 2020 as “National Pollution Prevention Week” in the City of Bothell, Washington, and call upon all citizens to protect natural resources by reducing and eliminating sources of pollution. Signed this 15th Day of September, 2020 ___________________________ Liam Olsen, Mayor September 15, 2020 Agenda Packet Page 7 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 8 of 294 City Council Agenda Bill AB # 20-112 TO: Mayor Olsen and Members of the Bothell City Council FROM: Chris Bothwell, Finance Director Maureen Schols, Deputy Finance Director (Presenter) DATE: September 15, 2020 SUBJECT: Approve July 2020 Vouchers POLICY CONSIDERATION: This item asks the City Council to consider approval of vouchers for the period of July 1-31, 2020 totaling $2,795,018.09 that were approved and paid for by the City Auditor. Check transactions # 213674-213970 Wire transactions #479, 480, 483 & 728 HISTORY: DATE ACTION JUNE 5, 2000 Ordinance 1810 appointed Finance Director/City Treasurer as City Auditor In accordance with state statues, vouchers approved by the City Auditor are required to be ratified by the City Council and notated in the minutes. DISCUSSION: None. FISCAL IMPACTS: Expenditure funding included in the Adopted 2019-2020 Budget. ATTACHMENTS: Att-1. July 2020 Voucher Listing. (For Council distribution only. Voucher listings are available for review in the Finance Department.) RECOMMENDED ACTION: Approve vouchers for July 2020 $2,795,018.09 $3,718,165.98. September 15, 2020 Agenda Packet Page 9 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 10 of 294 City Council Agenda Bill AB # 20-113 TO: Mayor Olsen and Members of the Bothell City Council FROM: Chris Bothwell, Finance Director Maureen Schols, Deputy Finance Director (Presenter) DATE: September 15, 2020 SUBJECT: Approve August 2020 Vouchers POLICY CONSIDERATION: This item asks the City Council to consider approval of vouchers for the period of August 1-31, 2020 totaling $6,322,263.39 that were approved and paid for by the City Auditor. Check transactions # 213971-214471 Wire transactions #484, 485, 486, 487, 488, & 489 HISTORY: DATE ACTION JUNE 5, 2000 Ordinance 1810 appointed Finance Director/City Treasurer as City Auditor In accordance with state statues, vouchers approved by the City Auditor are required to be ratified by the City Council and notated in the minutes. DISCUSSION: None. FISCAL IMPACTS: Expenditure funding included in the Adopted 2019-2020 Budget. ATTACHMENTS: Att-1. August 2020 Voucher Listing. (For Council distribution only. Voucher listings are available for review in the Finance Department.) RECOMMENDED ACTION: Approve vouchers for August 2020 totaling $6,322,263.39. 3,718,165.9 September 15, 2020 Agenda Packet Page 11 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 12 of 294 City Council Agenda Bill AB # 20-114 TO: Mayor Olsen and Members of the Bothell City Council FROM: Jennifer Phillips, Executive Department DATE: September 15, 2020 SUBJECT: Approval of a Professional Services Agreement with K & L Gates, LLP, for Continued Legal Services in Connection with Downtown Revitalization Project POLICY CONSIDERATION: The policy consideration is whether or not to continue utilizing K & L Gates, LLP, as the City’s legal representative for the completion of the environmental cleanup project downtown and the sale of the remaining City-owned parcels. This is directly connected to the Council’s Economic Development Goal, as well as the goal to complete the downtown revitalization project as quickly as possible. HISTORY: DATE ACTION JANUARY 15, 2019 Council approved previous contract with K&L Gates in the amount of $225,000. The law firm of K & L Gates, LLP, has been advising and representing the City on all property transactions within the Downtown Revitalization Project since the year 2006 when the City purchased 18.5 acres of property from the Northshore School District. Their expertise has been utilized in the negotiations on Purchase & Sale Agreements, environmental clean-up issues and negotiating with the Washington State Department of Ecology, boundary line adjustments, litigation matters, and all other aspects requiring legal assistance. DISCUSSION: Staff advises continuing to utilize the services of K & L Gates through the completion of the downtown revitalization project as K & L’s historic knowledge of the project and expertise in this area would be difficult to replace in a timely manner. FISCAL IMPACTS: Expenses incurred are incorporated with the Capital Projects budget. ATTACHMENTS: Att-1. Proposed Professional Services Agreement with K&L Gates, LLP September 15, 2020 Agenda Packet Page 13 of 294 City Council Agenda Bill AB # 20-114 RECOMMENDED ACTION: Authorize the City Manager to enter into a Professional Services Agreement with K & L Gates, LLP, in the amount of $150,000 and in substantially the same form as presented, for legal services related to City’s downtown revitalization project. September 15, 2020 Agenda Packet Page 14 of 294 Att-1 Bothell Professional Services Agreement 1 of 12 Last Legal Update: January 2018 CITY OF BOTHELL PROFESSIONAL SERVICES AGREEMENT Contract No. _________ 1.Parties. This Professional Services Agreement, Contract No. __________ (“Agreement”), is entered into as of the Effective Date specified below between the City of Bothell, a Washington municipal corporation having its principal place of business at 18415 101st Avenue N.E., Bothell, Washington 98011 (“City”), and K & L Gates, LLP, a corporation organized under the laws of the State of Washington, located and doing business at 925 Fourth Avenue, Suite 2900, Seattle, WA 98104 (“Consultant”). 2.Recitals. 2.1 City desires to obtain legal services related to the downtown revitalization project. 2.2 City has solicited for such professional services as required by law, including chapter 39.80 RCW if applicable. 2.3 Consultant represents that it is available and able to provide qualified personnel and facilities necessary for the work and services contemplated herein, and Consultant further represented that it can accomplish the work and services within the required time period and in accordance with City’s specifications and professional standards. 2.4 Consultant agrees to perform the work and services specified herein in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual benefits and promises set forth herein, it is agreed by and between the parties as follows: 3.Terms and Conditions. 3.1 Services. City hereby retains Consultant, and Consultant agrees, to perform in accordance with this Agreement the work and services as set forth in the Scope of Services/Scope of Work, which is attached and incorporated by this reference as Exhibit A (“Services”). 3.2 Payment. 3.2.1 City shall pay the Consultant for Services rendered based upon the Schedule of Charges, which is attached and incorporated by this reference as Exhibit B (“Schedule of Charges”). In no event shall the amount paid by City exceed the sum of $150,000, including applicable sales taxes. This amount is the maximum amount to be paid under this Agreement and shall not be exceeded without prior written authorization from City in the form of a negotiated and executed supplemental agreement. September 15, 2020 Agenda Packet Page 15 of 294 Att-1 Bothell Professional Services Agreement 2 of 12 Last Legal Update: January 2018 3.2.2 Consultant shall submit periodic invoices (but not more frequently than monthly) to City for the portion of the Services that has been completed under the terms of payments as described in Exhibit B. City shall pay Consultant within forty-five (45) days of the receipt of a correct invoice in accordance with City’s usual payment procedures. If City objects to all or any portion of any invoice, it shall so notify Consultant within twenty (20) days from the date of receipt but shall pay the undisputed portion of the invoice. The parties shall immediately make every effort to settle the disputed portion of any invoice. 3.2.3 Acceptance of any payment by Consultant shall constitute a release of all payment claims against City arising under this Agreement as to such portion of the Services. No payment to Consultant, whether periodic or final, shall constitute a waiver or release by City of any claim, right, or remedy it may have against Consultant regarding performance of the Services as required by this Agreement. 3.3 Time of Performance. Consultant agrees that the Services shall begin immediately upon the Effective Date or City’s issuance of a Notice to Proceed, whichever is applicable, and Consultant shall continue to perform the Services with due diligence. This Agreement is for Services completed not later than December 31, 2021. The Schedule of Charges and time for performance of the Services shall not be increased because of any delays or costs attributable to Consultant. In the event of a delay not attributable to Consultant, which could not be reasonably anticipated and which results in an increase in costs to perform the Services, City may at its discretion, through the execution of an amendment or supplemental agreement, increase the Schedule of Charges and/or time for performance of the Services. 3.4 Relationship of Parties. Consultant is an independent contractor under this Agreement, and the parties intend that an independent contractor-client relationship is the only relationship created by this Agreement. No employee, agent, representative, or subconsultant of Consultant shall be or shall be deemed to be the employee, agent, representative, or subconsultant of City. Consultant has no authority, and will not represent itself to have authority, to legally bind City or otherwise act for City or on City’s behalf. None of the compensation or other benefits provided by City to its employees shall be available to Consultant’s employees, agents, representatives or subconsultants. Consultant shall be solely responsible for all compensation, taxes, withholding, and other benefits due to its employees, agents, representatives, and subconsultants. Consultant shall be solely responsible for its acts and omissions and for the acts and omissions of Consultant’s agents, employees, representatives, and subconsultants during performance of this Agreement. 3.5 Services Performed at Consultant’s Risk. Consultant shall take all precautions reasonably necessary to perform the Services and shall be responsible for the safety of its employees, agents and subconsultants in the performance of the Services. 3.6 Supervision, Inspection and Performance. Consultant represents that it has or will obtain all personnel necessary to perform the Services and that such personnel shall be qualified, experienced, and licensed as may be necessary or required September 15, 2020 Agenda Packet Page 16 of 294 Att-1 Bothell Professional Services Agreement 3 of 12 Last Legal Update: January 2018 by applicable laws and regulations to perform the Services. All Services shall be performed by Consultant Consultant shall be responsible for the professional quality, of work it provides within the scope of the Services. Consultant shall perform the Services in accordance with the standard of care of its profession in the same or similar localities at the time services are performed. 3.7 Termination of Agreement. 3.7.1 Termination by City for Consultant’s Default. City may terminate this Agreement, in whole or in part and at any time, in writing if Consultant substantially fails to fulfill any or all of its material obligations through no fault of City. If City terminates all or part of this Agreement for default, City shall determine the amount of Services satisfactorily performed to the date of termination and the amount owing to Consultant for such work. Under no circumstances shall payments made under this provision exceed the Schedule of Charges. This provision shall not preclude City from filing claims and/or commencing litigation to secure compensation for damages incurred beyond that covered by withheld payments. 3.7.2 Termination by City for Convenience. City may terminate this Agreement, in whole or in part and at any time, for the convenience of City. City shall terminate by delivery to Consultant a notice of termination specifying the extent of the termination and the effective date of termination. If City terminates this Agreement for convenience, City shall pay Consultant the amount otherwise due in accordance with this Agreement for Services satisfactorily performed to the date of termination. 3.7.3 Termination by Consultant. Consultant may terminate this Agreement in the case of a material breach and upon failure of City to remedy said breach within ten (10) days of written notice by Consultant of such breach. Consultant may also terminate the Agreement if key personnel and/or facilities are lost due to an act of God or other catastrophe creating a situation under which Consultant is physically unable to perform. Consultant’s notice of termination shall be in writing. 3.8 Discrimination. When hiring of employees to perform Services, and in any subcontract arising hereunder, Consultant, its subconsultants, or any person acting on behalf of Consultant or subconsultant shall not, by reason of race, religion, color, age, sex, national origin or the presence of any sensory, mental or physical handicap, veteran status, or sexual orientation, discriminate against any person who is qualified and available to perform the Services to which the employment relates. 3.9 Indemnification and Compliance with Law. 3.9.1. The indemnification and defense obligations specified in this Section 3.9 (“Indemnity Obligations”) have been mutually negotiated and shall survive the expiration, abandonment, or termination of this Agreement. The Indemnity Obligations shall extend to claims that are not reduced to a suit and to any claims that may be compromised prior to the culmination of any litigation or the institution of any litigation. Inspection, acceptance or payment by City of September 15, 2020 Agenda Packet Page 17 of 294 Att-1 Bothell Professional Services Agreement 4 of 12 Last Legal Update: January 2018 or for any Services performed by Consultant shall not be grounds for avoidance of any Indemnity Obligations. 3.9.2 Consultant’s duty to indemnify the City under this Agreement varies, as more particularly set forth below, depending on the circumstances that give rise to the obligation of indemnity. 3.9.2.1 General Indemnity. Except to the extent that one of the more specific indemnity obligations set forth below applies, Consultant shall defend, indemnify, and hold harmless the City from any and all losses and claims including any and all claims for personal injury, bodily injury, including death, or damage to property that are incurred by the City solely as a result of Consultant’s own acts, omissions or negligence The obligation of indemnity under this Subparagraph does not extend to losses caused by the negligence of the City. 3.9.2.2 Professional Errors and Omissions. For any losses that arise from the exercise of Consultant’s professional judgment in the performance of legal services such that RCW 4.24.115 would apply, Consultant shall defend, indemnify, and hold harmless the City from all such losses caused solely by Consultant’s or alleged to be caused by any violation of law, including state, federal, or municipal law or ordinance, or by any negligent act, omission, breach of contract, or willful or intentional misconduct of Consultant. The obligation of indemnity under this Subparagraph does not, however, extend to losses caused by the negligence (whether sole, concurrent, or contributory) of the City. 3.9.3 The parties recognize that one party may have unique knowledge or involvement in the acts that certain claims are based on; therefore, the parties agree that upon receipt or service of a claim arising out of or related to the work or project which is the subject of this Contract, the parties hereto will cooperate in good faith in the defense of any claim. The intent and purpose of this subsection is to ensure the good faith cooperation of both parties in the defense of any claim initially so that all necessary knowledge and personnel are made available to each other in order achieve the best claim defense possible. 3.9.3.1 The parties agree that they each have the right to tender the defense of any third party claims to the other party without violating the provisions of this section. However, notwithstanding any other provision in this section, in the event that either party fails to accept tender from the other party, the parties agree that it is their intent that they will cooperate and initially defend any claims arising out of, in connection with, or incident to their own acts, regardless of the type or characterization of the act(s) and each party is free to assert such defenses, claims, counterclaims and third party claims as they deem appropriate. 3.9.3.2 At the time that liability for any disputed claim is ultimately determined by agreement, as a result of any agreed or mandatory dispute resolution process, or by final order of a court of competent jurisdiction, the parties will reimburse each other for any defense costs and claims costs and payments or judgment satisfaction that may have been incurred pursuant to the provisions of this subsection and which would not have been required of that party September 15, 2020 Agenda Packet Page 18 of 294 Att-1 Bothell Professional Services Agreement 5 of 12 Last Legal Update: January 2018 under the provisions of subsections 3.9.1 through 3.9.2 if their initial tender of defense had not been improperly rejected. 3.10 Insurance. The following insurance requirements shall apply. 3.10.1 Insurance. The Consultant shall procure and maintain for the duration of the Agreement, the insurance described below. Consultant’s maintenance of insurance as required by the Agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City’s recourse to any remedy available at law or in equity. A. Workers’ Compensation coverage as required by the Industrial Insurance laws of the State of Washington. B. Professional Liability insurance appropriate to the Consultant’s profession. 3.10.4 Minimum Amounts of Insurance. Consultant shall maintain the following insurance limits: A. Professional Liability insurance shall be written with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. 3.10.5 Other Insurance Provisions. The insurance policies are to contain, or be endorsed to contain, the following provisions for Automobile Liability, Professional Liability and Commercial General Liability insurance: A. Any insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant’s insurance and shall not contribute with it. B. Consultant shall be responsible for providing notice to City of any cancellation of the insurance described herein in accordance with the terms of this provision. 3.10.6 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. September 15, 2020 Agenda Packet Page 19 of 294 Att-1 Bothell Professional Services Agreement 6 of 12 Last Legal Update: January 2018 3.10.7 Verification of Coverage. Consultant shall furnish the City with confirmation from its insurer of its professional liability insurance . 3.11 Records, Documents, and Audits. 3.11.1 Original documents, drawings, designs and reports developed under this Agreement, whether in written or electronic format, shall belong to and become the property of City, and shall be promptly delivered to City as required by the Services or at the termination of this Agreement. All written information submitted by City to Consultant in connection with the Services will be safeguarded by Consultant to at least the same extent as Consultant safeguards like information relating to its own business. If such information is publicly available, is already in Consultant’s possession or known to it, or is rightfully obtained by Consultant from third parties, Consultant shall bear no responsibility for its disclosure, inadvertent or otherwise. 3.11.2 City acknowledges that the documents prepared by Consultant are prepared specific to the project described herein. If City modifies or uses any of said documents for other projects or purposes without the written approval of Consultant, City releases Consultant from all responsibility for any errors or omissions therein with respect to such modification or other use. 3.11.3 Consultant and its subconsultants shall maintain books, records, documents, and other evidence directly pertinent to performance of the Services in accordance with generally accepted accounting principles and practices consistently applied. City or any duly authorized representative shall have access to and be permitted to inspect such books, records, documents, and other evidence for the purpose of audit, examination and copying for a period of six (6) years after completion or termination of the Agreement, whichever is later. Audits conducted under this Section 3.11 shall be in accordance with generally accepted auditing standards and established procedures and guidelines of the reviewing or auditing agency. 3.12 Disputes and Remedies. 3.12.1 Choice of Law; Venue. This Agreement shall be interpreted in accordance with the laws of the State of Washington. The Superior Court of King County, Washington, shall have exclusive jurisdiction and venue over any legal action arising under this Agreement. 3.12.2 Dispute Resolution. All claims, counterclaims, disputes, and other matters in question between City and Consultant arising out of or relating to this Agreement shall be referred to the City Manager or a designee for determination, together with all pertinent facts, data, contentions, and so forth. The City Manager shall consult with Consultant’s representative and make a determination within thirty (30) calendar days of such referral. Should the claims, counterclaims, or disputes not be resolved by the City Manager’s decision, the parties shall refer the matter to professional mediation in Seattle, Washington, which shall be conducted within thirty (30) calendar days of the City Manager’s decision. The cost of mediation shall be shared equally. No civil action on any claim, counterclaim, or dispute may be commenced until thirty (30) days following such mediation. In the event of litigation between Consultant and City to enforce the rights under this Agreement, reasonable attorney fees and expenses shall be allowed to the prevailing party. September 15, 2020 Agenda Packet Page 20 of 294 Att-1 Bothell Professional Services Agreement 7 of 12 Last Legal Update: January 2018 3.12.3 Remedies. City’s rights and remedies in this Agreement are in addition to all other rights and remedies provided by law. City may exercise such rights and remedies in any order and at any time as it determines necessary or appropriate. 3.13 Notice. All communications regarding this Agreement shall be sent to the parties at the addresses listed below, or at such other address as given pursuant to this Section, and shall be effective on the next business day if sent by registered or certified mail or deposited with an overnight delivery service. City of Bothell Executive Department Attention: Jennifer Phillips 18415 101st Ave. NE Bothell, WA 98011 K & L Gates, LLP Attention: Shannon Skinner 925 Fourth Ave., Suite 2900 Seattle, WA 98104 3.14 Entire Agreement. The written terms and provisions of this Agreement, together with all referenced Exhibits, supersede all prior verbal statements of any officer or other representative of City, and such statements shall not be effective or be construed as entering into or forming a part of, or altering in any manner whatsoever, this Agreement. The entire agreement between the parties with respect to the subject matter hereunder is contained in this Agreement and the referenced Exhibits. 3.15 Priority of Documents. In the event that the language and provisions of this Agreement are contrary to or conflict with any language or provisions set forth in any exhibit to this Agreement, the language and provisions of this Agreement shall control, and the contrary or conflicting language or provisions of the exhibit(s) shall be disregarded and shall be considered void. 3.16 Modification. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of City and Consultant. 3.17 Assignment. Any assignment of this Agreement by Consultant without the prior written consent of City shall be void. 3.18 Waiver. A waiver of any breach by either party shall not constitute a waiver of any subsequent breach. 3.19 Third-Party Beneficiaries. There are no third-party beneficiaries to this Agreement. 3.20 Counterparts. This Agreement shall be signed in duplicate or triplicate and may not be signed in counterparts. September 15, 2020 Agenda Packet Page 21 of 294 Att-1 Bothell Professional Services Agreement 8 of 12 Last Legal Update: January 2018 3.21 Authorized Signatures. By their signatures below each party represents that it has taken all necessary steps and is fully authorized to sign for and on behalf of the named principal above. 3.22 Effective Date. This Agreement shall be effective on the last date entered by the parties below. SIGNATURE PAGE FOLLOWS IMMEDIATELY September 15, 2020 Agenda Packet Page 22 of 294 Att-1 Bothell Professional Services Agreement 9 of 12 Last Legal Update: January 2018 CITY OF BOTHELL By: Jennifer Phillips Date Its: City Manager ATTEST/AUTHENTICATED: Laura K. Hathaway Date City Clerk APPROVED AS TO FORM: Paul Byrne Date City Attorney CONSULTANT: K&L Gates LLP By: Date Its: September 15, 2020 Agenda Packet Page 23 of 294 Att-1 Bothell Professional Services Agreement 10 of 12 Last Legal Update: January 2018 EXHIBIT A Scope of Services / Scope of Work Consultant is engaged to act as legal counsel solely for the City for representation in connection with the City’s downtown redevelopment project (including related work with the Washington State Department of Ecology on environmental cleanup of the downtown parcels). September 15, 2020 Agenda Packet Page 24 of 294 Att-1 Bothell Professional Services Agreement 11 of 12 Last Legal Update: January 2018 EXHIBIT B Schedule of Charges The City shall pay Consultant at the hourly rate set forth below, but not more than One Hundred Fifty Thousand Dollars ($150,000). These rates reflect a 10% discount from the Firm’s standard rates. This discount will be applied to the rates of any other professionals doing work for the City of Bothell. These rates will be updated in January of each year. Timekeeper 2020 Rates w/10% Discount Applied Shannon Skinner $598.50 Craig Trueblood $544.50 Paulina Wu $319.50 Leslie Berkseth $283.50 September 15, 2020 Agenda Packet Page 25 of 294 Att-1 Bothell Professional Services Agreement 12 of 12 Last Legal Update: January 2018 EXHIBIT C Certificate of Insurance (Please see attached.) September 15, 2020 Agenda Packet Page 26 of 294 City Council Agenda Bill AB # 20-115 TO: Mayor Olsen and Members of the Bothell City Council FROM: Erin Leonhart, Director of Public Works Janet Geer, Surface Water Supervising Engineer DATE: September 15, 2020 SUBJECT: Approval to Ratify Amendment to the Existing Water Resource Inventory Area (WRIA) 8 Interlocal Agreement POLICY CONSIDERATION: This item asks the City Council to consider if the City should ratify the amendment to the existing WRIA 8 Interlocal Agreement allowing Snohomish County back as a cost share partner and an active participating member organization. If approved, this will maintain our existing cost share for WRIA 8 participation and keep our structure in place by bringing Snohomish County back as a regional partner in salmon recovery. HISTORY: DATE ACTION 1999 Federal government listed Puget Sound Chinook salmon as threatened under the Endangered Species Act 2001 The first Interlocal Agreement established WRIA 8 partnership for salmon recovery. MARCH 2018 City Council ratified the current ILA which is in effect until December 2025 In 1999, the federal government listed Puget Sound Chinook salmon as threatened under the Endangered Species Act. This prompted the 27 local governments in our watershed, known as Water Resource Inventory Area (WRIA) 8, to coordinate a watershed-scale partnership to recover Chinook salmon in our area. This partnership, under an interlocal agreement, provides funding and support to improve habitat and coordinate salmon recovery through the development and implementation of a conservation plan. The Conservation Plan (Plan) was originally created in 2005 with a 10 year implementation period. In late 2015, WRIA 8 staff worked with the implementation and technical committees, and other regional and local September 15, 2020 Agenda Packet Page 27 of 294 City Council Agenda Bill AB # 20-115 stakeholders to inform a Plan update. The WRIA 8 Salmon Recovery Council, comprised of elected representatives from 26 local cities and counties, concerned citizens, scientists, and representatives from environmental interests and state agencies, received regular briefings and informed the update process. The Salmon Recovery Council approved the 10-year update to the Plan and Bothell ratified the Plan in March 2018. This Plan is an addendum to the original plan and incorporates new scientific information and lessons learned during the first ten years of implementation. The Plan is also intended to serve as a stand-alone document and is available online: http://www.govlink.org/watersheds/8/planning/chinook-conservation- plan.aspx Major updates to the Plan include: •Revised and updated list of habitat acquisition and restoration projects to improve project definitions, reduce duplication, and add new projects. •New habitat goals for five key habitat elements to better evaluate and report progress towards achieving habitat restoration efforts. •Twenty new and updated habitat recovery strategies. •Revised and updated list of recommended land use actions and education and outreach actions. •New monitoring and assessment plan that improves tracking and reporting on the Plan’s implementation, and clearly defines adaptive management responses should the level of implementation fall below identified benchmarks. DISCUSSION: Snohomish County terminated their participation as a WRIA 8 cost share partner in 2019 due to budget constraints. This placed a burden on the surrounding partners to move progress forward without Snohomish County and forced WRIA 8 to use reserve funds to cover the Snohomish County portion of the existing cost share agreement. The attached amendment to the WRIA 8 Interlocal Agreement enables Snohomish County to rejoin the WRIA 8 ILA as a cost share partner in 2020. The amendment has been signed by Snohomish County and now needs to be signed by all other parties to the WRIA 8 ILA. FISCAL IMPACTS: This item is included in the Adopted 2019-2020 Budget, the budgeted value of $17,203 is sufficient to fund this item. This item obligates the City to annual expenditures of $17,203 until the contract is cancelled. September 15, 2020 Agenda Packet Page 28 of 294 City Council Agenda Bill AB # 20-115 ATTACHMENTS: Att-1. Snohomish County ILA Acknowledgment Letter Att-2. WRIA 8 Map RECOMMENDED ACTION: Approve the amendment with WRIA 8 approving Snohomish County to rejoin the ILA as a cost share partner contributing $64,053 annually to further salmon habitat protection and restoration planning and implementation. September 15, 2020 Agenda Packet Page 29 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 30 of 294 Amendment to WRIA 8 ILA 2016-2025 December 2019 1 FIRST AMENDMENT TO 2 INTERLOCAL AGREEMENT 3 For the Watershed Basins within Water Resource Inventory Area 8 4 5 PREAMBLE 6 THIS FIRST AMENDMENT ("Amendment") to the lnterlocal Agreement ("Agreement") for the 7 Watershed Basins within Water Resource Inventory Area 8 ("WRIA 8") is entered into by the 8 Parties and Snohomish County ("County") to authorize the County to rejoin the Agreement as a 9 member of the WRIA 8 Salmon Recovery Council ("Council"}. The County terminated its 10 participation effective December 31, 2018, and now wishes to rejoin. 11 12 AMENDMENT 13 14 Upon the effective date of this Amendment, the County shall be a member of the Council, and 15 shall have all of the rights, privileges, duties and obligations afforded the Parties under the terms 16 of the Agreement. Per Section 7 of the Agreement, the County agrees to pay its annual cost 17 share for 2020 and future years. 18 19 IN WITNESS WHEREOF, Snohomish County and the Parties have executed this Amendment as of the 20 last date of signature below: 21 22 23 25 26 27 28 29 37 Att-1 September 15, 2020 Agenda Packet Page 31 of 294 City of Bothell By: ____________________________ Title: _________________________ Date: __________________________ September 15, 2020 Agenda Packet Page 32 of 294 Lake Washington/Cedar/Sammamish Watershed (WRIA 8)Att-2September 15, 2020 Agenda Packet Page 33 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 34 of 294 City Council Agenda Bill AB # 20-116 TO: Mayor Olsen and Members of the Bothell City Council FROM: Erin Leonhart, Public Works Director Ryan Roberts, Supervising Capital Engineer DATE: September 15, 2020 SUBJECT: Approval of a System Access Fund Project Agreement with Sound Transit to Accept Funding for the 102nd Ave NE Downtown Access Project POLICY CONSIDERATION: The City Council previously provided policy direction on this matter. If this item is approved, staff is implementing the direction given by the City Council. HISTORY: DATE ACTION NOVEMBER 13, 2018 Council approved the 2019-2025 Capital Facilities Plan The Council approved the 2019-2025 Capital Facilities Plan which included the project #T86 Downtown Non-Motorized Access Improvements. DISCUSSION: In 2019, the City was successfully awarded $825,000 in Sound Transit System Access grant funding for the construction of the Downtown Non-Motorized Access Improvements on 102nd Ave NE. This project will replace existing damaged sidewalks on the east and west side of 102nd Street NE from NE 185th and 102nd Ave NE Bridge, including reconstructing curb and gutter, curb ramps, tree wells, pavement delineation, signage; and installing pedestrian lighting. The project design is scheduled to start in late 2020 and be constructed in 2023/2024. FISCAL IMPACTS: The expenditures and grant revenues are included in the 2019-2020 Adopted Budget, the current draft Capital Facilities Plan, and the draft 2021-2022 budget based on the current project timeline. The City will seek reimbursement of project expenditures until the grant award of $825,000 has been exhausted; the remaining project expenditures of approximately $300,000, will be funded with REET 2 sometime in 2023. ATTACHMENTS: Att-1. System Access Fund Project Agreement September 15, 2020 Agenda Packet Page 35 of 294 City Council Agenda Bill AB # 20-116 RECOMMENDED ACTION: Approve a System Access Fund Project Agreement with Sound Transit to Accept Funding for the 102nd Ave NE Downtown Non-Motorized Access Improvements in the amount of $825,000. September 15, 2020 Agenda Packet Page 36 of 294 System Access Fund Project Agreement Page 1 of 20 GA 0078-20 SYSTEM ACCESS FUND PROJECT AGREEMENT BETWEEN CITY OF BOTHELL AND THE CENTRAL PUGET SOUND REGIONAL TRANSIT AUTHORITY FOR DOWNTOWN BOTHELL NON -MOTORIZED ACCESS IMPROVEMENTS GA 0078-20 This Agreement, made and entered on_________________, between the City of Bothell (hereinafter “City”), and the Central Puget Sound Regional Transit Authority, (hereinafter "Sound Transit"); WHEREAS, the Sound Transit 3 (“ST3”) high capa city transit system expansion plan was approved by the voters in November 2016 and includes a $100 million System Access Program to “fund such projects as safe sidewalks and protected bike lanes, shared use paths, improved bus - rail integration, and new pick-up and drop-off areas that provide convenient access so that more people can use Sound Transit services;” WHEREAS, Sound Transit opened the System Access Fund 2019 Call for Projects in February 2019 and subsequently evaluated applications from local governments against evaluation criteria identified by the Sound Transit Executive Committee; WHEREAS, at the conclusion of the public comment period and online open house in August 2019, the Sound Transit Board of Directors approved 30 applications from 27 local governments on September 26, 2019; WHEREAS, Sound Transit and the City have a joint interest in delivering on downtown Bothell non-motorized access improvements , (hereinafter the “Project”), which was duly approved by the Sound Transit Board as part of the System Access Program by virtue of M2019-97; NOW THEREFORE, in consideration of the terms, conditions, covenants, and performances contained herein, or attached and incorporated and made a part hereof, it is mutually agreed as follows: 1. GE NERAL 1.1. Purpose . The intent of this Agreement is to establish the terms and conditions for the eligible work to be performed for the Project during the duration of this Agreement. Attached hereto as Exhibit A, is the Scope of Work and Deliverables , which outlines the activities, products and general capital improvements eligible for funding by Sound Transit , as presented to Sound Transit in the City’s application for Project funding. Funds may be expended on eligible elements listed in Exhibit A up to the not to exceed amount outlined in Section 1.2 below. September 15, 2020 Agenda Packet Page 37 of 294 System Access Fund Project Agreement Page 2 of 20 GA 0078-20 1.2. Agreement Not-to-Exceed Amount. The total amount of the Agreement shall not exceed $825,000.00. No payments will be made in excess of the established not -to-exceed amount according to the Project Description outlined in Section 2.1 below . The funding amount provided by Sound Transit does not include federal funding. 2. PROJECT DESCRIPTION 2.1. The Project is non-motorized access improvements along 102nd Ave NE as identified in Exhibit A, Scope of Work and Deliverables. Sound Transit funding will support two Phases: 2.1.1. Design Phase. The City will design the improvements. The Design P hase is expected to require $171,000.00 of the total Not-to-Exceed amount noted in Section 1.2. Any work in the Design Phase exceeding $171,000.00 must be approved by Sound Transit. It is understood that this amount is expected to cover 100% of Design Phase costs. To be reimbursed for the Design Phase, the City must provide the following: 1) Exhibit B , Project Funding Plan; 2) Exhibit C, Project Schedule, 4) Exhibit D, Engineer’s Estimate . 2.1.2. Construction Phase. The City will construct the Project. To be reimbursed for the Construction Phase, the City must provide the following: 1) completed design plans for Sound Transit review, 2) updated Exhibit B , Project Funding Plan; 2) Exhibit E, Funding Certification Letter for the Construction Phase; 3) updated Exhibit C, Project Schedule; 4) Exhibit F, Environmental Review Certification; 5) Exhibit G, ROW Certification; 6) updated Exhibit D, Engineer’s Estimate . It is understood that the City will seek reimbursement for costs associated with the Construction Phase up to the Not-to-Exceed amount identified in Section 1.2 before paying the remaining costs to complete the Project. 3. PROJECT MANAGEMENT 3.1. Designated Representatives . The City and Sound Transit have designated formal points of coordination for this Agreement. The Designated Representatives shall communicate regularly to discuss the status of the tasks to be performed, to identify upcoming decisions related to the Project, to provide any information or input necessary to inform those decisions, and to resolve any issues or disputes related to the Project consistent with this Agreement. The Designated Representatives are: CITY Ryan Roberts City of Bothell 18415 101st Ave NE Bothell, WA 98011 425-806-6823/425-471-1837 SOUND TRANSIT Alex Krieg Deputy Director, Access & Integration 401 S Jackson St Seattle WA 98104 206-903-7663 September 15, 2020 Agenda Packet Page 38 of 294 System Access Fund Project Agreement Page 3 of 20 GA 0078-20 Ryan.roberts@bothellwa.gov Alex.Krieg@soundtransit.org The Parties may change designated representatives by written notice to the other Party during the term of the Agreement. 3.2. Reporting Requirements. The City is required to submit a Quarterly Progress Report to Sound Transit’s Designated Representative to include the below elements (Exhibit H: Template for Reporting Requirements). The report may include supporting documentation (photos, C ity documentation, financial information, etc.). 3.2.1. Project Update. Status of major activities including, Phase 1-Design and Phase 2- Construction, in the reporting period, both current and upcoming. 3.2.2. Assessment of on-going risks. The City will notify Sound Transit of any issues that may affect the Project Schedule and overall implementation of the Project. 3.2.3. Project Funding. Summary of expenditures during reporting period, and expected expenditures in the subsequent reporting period. 3.3. Eligible Costs. Eligible costs include actual costs identified in Exhibit A, Scope of Work and Deliverables. 3.4. Additional Project Funding. The Not-to-Exceed funding amount in Paragraph 1.2 represents approximately seventy-three percent (73%) of the total Project cost. The City is responsible for obtaining the balance of the Project funding described in the Funding Plan attached as Exhibit B . 3.5. Project Schedule. The parties agree to the project schedule identified in Exhibit C, Project Schedule. The City shall complete all work and deliverables of the Project by one year after the expected project completion date shown in Exhibit C, Project Schedule , unless otherwise mutually agreed in writing by both Parties. The City is responsible for notifying Sound Transit of any material changes to the Project Schedule and rationale for the change in writing as part of its quarterly reporting requirements. 3.6. City Work. The City is solely responsible for the environmental review, design, permitting, construction, project and construction management of all applicable Project elements including, but not limited to, procurement and construction administration. The City is responsible for all costs relating to the operations or maintenance of service and capital improvements related to the Project upon its completion. The City will be the owner of the completed Project. Sound Transit is not responsible for funding any service operations or for maintenance of any improvements implemented under this Agreement. 3.7. Signage . Any identification signage that is used during the Project shall identify Sound Transit as a funding partner. 3.8. Design Review. The City shall provide Sound Transit the opportunity to review design plans at milestones identified in Exhibit C, Project Schedule. September 15, 2020 Agenda Packet Page 39 of 294 System Access Fund Project Agreement Page 4 of 20 GA 0078-20 3.9. Project Closeout. Before payment of the final invoice, the City and Sound Transit will meet to ensure final deliverables are complete per Exhibit A, Scope of Work and Deliverables. 4. INVOICING 4.1. The City will submit quarterly invoices and supporting documentation that align with the Scope of Work and Deliverables for payment (See Exhibit I, Invoice Template). The invoices must include the Sound Transit purchase order number provided by Sound Transit. 4.2. The City will submit its invoices with the required documentation, in two .pdf file s, via email to accountspayable@soundtransit.org (and carbon copying Sound Transit’s Designated Representative). Invoices will be paid within thirty (30) calendar days of Sound Transit’s receipt of the invoice and acceptable and complete supporting documentation. 4.3. The City agrees that within forty-five (45) calendar days of the City’s acceptance of work for each Phase to submit a final (closing) invoice for that phase. 4.4. If Sound Transit determines that an invoice lacks sufficient documentation to support payment, Sound Transit will notify the City of its determination a nd request that the City provide additional documentation. Sound Transit may withhold payment of the invoice until supporting documentation is provided, however such approval shall not be unreasonably withheld. 5. TERM, SUSPENSION, AND TERMINATION 5.1. Term. This Agreement shall take effect upon the last date of signature by the Parties as set forth below. This Agreement shall remain in effect until 180 consecutive days following Project completion, unless extended by mutual written agreement of the Parties, superseded by a future agreement, or suspended or terminated in accordance with this Section 5. 5.2. Termination by Sound Transit. Sound Transit may terminate this Agreement by written notice under the following circumstances: 5.2.1. If work as defined in Exhibit A is not completed by one year after the expected project completion date shown in Exhibit C, Project Schedule , unless otherwise agreed to by the Parties. 5.2.2. If the City fails to make progress towards completing the Project and the City has not provided adequate assurances of its desire or ability to complete the Project and commence operations. If the Agreement is terminated under this Section 5.2, the City shall reimburse Sound Transit the full amount of all payments it made to the City under this Agreement within ninety (90) calendar days of the date of termination. The City may ask for an extension of time to September 15, 2020 Agenda Packet Page 40 of 294 System Access Fund Project Agreement Page 5 of 20 GA 0078-20 complete the Project for good cause. Sound Transit’s agreement to extend the completion will not be unreasonably withheld. 5.3. Termination by Either Party. Either Party may terminate this Agreement for cause in the event that the other Party fails to fulfill its material obligations under this Agreement in a timely manner or breaches any material provision of this Agreement and the Dispute Resolution Process has failed to reach resolution within the timelines described therein. The Party wishing to terminate this Agreement for cause will provide the other Party with written notice of its intent to terminate and will give the other Party an opportunity to corre ct the failure to perform or breach within thirty (30) calendar days of the notice or within such longer period as may be necessary in the event that correction cannot reasonably be accomplished within thirty (30) calendar days. If the failure or breach is not corrected or cured, this Agreement may be terminated by the aggrieved Party by giving ninety (90) calendar days’ notice to the other Party. 5.4. Except as provided in this Section, a termination by either Party will not extinguish or release either Party from liability for costs or obligations existing as of the date of termination. Any costs incurred prior to proper notification of termination will be borne by the Parties in accordance with the terms of this Agreement. 6. INDEMNITY 6.1. To the maximum extent permitted by law, the City will hold harmless from, and indemnify and defend Sound Transit (including its board members, officers, directors and employees) (the “Indemnified Parties”) from and against any and all claims, demands, loss es, lawsuits, actions, or liability of any kind or nature, arising out of or relating to the City’s design, construction, maintenance or operation of the Project, including claims by the City’s employees. THE CITY SPECIFICALLY ASSUMES POTENTIAL LIABILITY FOR ACTIONS BROUGHT BY THE CITY’S OWN EMPLOYEES OR FORMER EMPLOYEES AGAINST ANY INDEMNIFIED PARTY, AND FOR THAT PURPOSE THE CITY SPECIFICALLY WAIVES ALL IMMUNITY AND LIMITATIONS ON LIABILITY UNDER THE WORKERS COMPE NSATION ACT, RCW TITLE 51, OR ANY INDUSTRIAL INSURANCE ACT, DISABILITY BENEFIT ACT OR OTHER EMPLOYEE BENEFIT ACT OF ANY JURISDICTION THAT WOULD OTHERWISE BE APPLICABLE IN THE CASE OF SUCH CLAIM. THIS INDEMNITY OBLIGATION SHALL NOT BE LIMITED BY ANY LIMITA TION ON THE AMOUNT OR TYPE OF DAMAGES, COMPENSATION OR BENEFITS PAYABLE BY OR FOR THE CITY OR A CONTRACTOR UNDER WORKERS’ COMPENSATION, DISABILITY BENEFIT OR OTHER EMPLOYEE BENEFITS LAWS. THE CITY RECOGNIZES THAT THIS WAIVER WAS SPECIFICALLY ENTERED INTO A ND WAS THE SUBJECT OF MUTUAL NEGOTIATION. PROVIDED, HOWEVER, THE CITY’S WAIVER OF IMMUNITY BY THE PROVISIONS OF THIS PARAGRAPH EXTENDS ONLY TO CLAIMS AGAINST THE CITY BY SOUND TRANSIT, AND DOES NOT INCLUDE, OR EXTEND TO, ANY CLAIMS BY THE CITY’S EMPLOYEE(S) DIRECTLY AGAINST THE CITY. The foregoing indemnity applies only to the extent of the City’s negligence. September 15, 2020 Agenda Packet Page 41 of 294 System Access Fund Project Agreement Page 6 of 20 GA 0078-20 6.2. The City further agrees to assume the defense of the Indemnified Parties with legal counsel acceptable to Sound Transit, whose acceptance shall not be unreasonably withheld. In all legal or claim proceedings arising out of, in connection with, or incidental to the City’s work or that of its contractors, subcontractors of any tier, suppliers, consultants and sub-consultants. The City shall pay all defe nse expenses, including attorney’s fees, expert fees, and costs incurred directly or indirectly on account of such litigation or claims, and shall satisfy any judgment rendered in connection therewith. The City may settle any suit, claim, action cost, loss penalty or damages, subject to the approval of Sound Transit, whose approval shall not be unreasonably withheld, if such settlement completely and forever extinguishes any and all liability of the Indemnified Parties. In the event of litigation between t he Parties hereto to enforce the rights under this provision, reasonable attorney fees shall be allowed to the prevailing party. 6.3. Each Party agrees to bear full responsibility for any and all tax liabilities owed that may arise in relation to this Agreement, and each Party will fully indemnify and hold the other Party, its officers, agents and employees harmless from any tax liability owed by the other Party arising from or related to the transactions set forth herein, including, but not limited to, any tax es, penalties, fines, and/or interest that are assessed by any tax authority against the indemnifying Party and further including all attorneys’ fees and costs incurred in response to any claims or assessments by any tax authority against indemnifying Part y, its officers, agents and employees. 6.4. The obligations in this Section will survive termination or completion of this Agreement as to any claim, loss or liability arising from events occurring prior to such termination or completion. 7. AUDITS 7.1. Each Party will maintain accounts and records, including contract and financial records that sufficiently and properly reflect all direct and indirect costs of any nature expended for work performed under this Agreement so as to ensure proper accounting for all monies paid to the City by Sound Transit. These records will be maintained for a period of six (6) years after termination or expiration of this Agreement unless permission to destroy the records is granted by the Office of the Archivist pursuant to RCW Chapter 40.14 and agreed to by the Parties. 7.2. The City will make all Project records available for Sound Transit inspection upon prior written reasonable request. Audits may be performed by Sound Transit or its independent public accountants to ensure compliance with and enforcement of this Agreement. Should the audit determine that funds from Sound Transit have been used for expenses that were ineligible, then Sound Transit shall provide a copy of the auditor’s determination to the City . If the City agrees with the determination, then the City will reimburse Sound Transit the amounts found to have been ineligible. If the City disputes the auditor’s determination, then the matter shall be referred to the Dispute R esolution P rocess set forth in Section 9. 8. INSURANCE September 15, 2020 Agenda Packet Page 42 of 294 System Access Fund Project Agreement Page 7 of 20 GA 0078-20 8.1. Coverage. During the construction phase of any eligible elements within the Project, the City shall provide primary insurance coverage in the amounts that it deems necessary for construction projects of similar size and cost. If the City is self-insured, it shall provide to Sound Transit's risk manager a certificate of self -insurance. The City shall require their contractor(s) and sub-contractors to obtain and maintain insurance in amounts and types suitable to protect Sound Transit and the City from exposures presented by the work performed under this Agreement. The minimum insurance requirements during the entire term of this Agreement are set forth below: a) Commercial General Liability in the amount of two million dollars ($2,000,000) each occurrence limit, two million dollars ($2,000,000) general aggregate limit, covering bodily injury including death, personal injury, property damage, Employers' Liability and contractual coverage endorsements, and utilize insurers and coverage forms acceptable to Sound Transit. b) Commercial Auto Liability coverage for bodily injury and property damage utiliz ing insurers and coverage forms acceptable to Sound Transit, with a limit of at least one million dollars ($1,000,000) combined single limit. c) Worker's Compensation insurance coverage, where applicable, shall comply with State of Washington Labor and Industries requirements. d) Builders Risk coverage will be the responsibility of all contractors and subcontractors. e) Pollution Liability (if there is any potential environmental liability exposure) in the amount of one million dollars ($1,000,000) each occurrence and two million dollars ($2,000,000) aggregate. f) Professional Liability (if there is a potential professional liability exposure) in the amount of one million dollars ($1,000,000) per claim. 8.2. Certificates. With the exception of self-insurance, c ertificates of insurance must name Sound Transit as an "Additional Insured," and shall reference the number and title of this Agreement. All insurance coverage obtained by the City or its contractors and subcontractors must name Sound Transit, its office rs and employees as "additional insured's" and contain "severability of interest" (cross liability) provisions. The City’s and the contractor's insurance policies shall be primary to and not contributing with any insurance or self-insurance that may be car ried by Sound Transit and waive their right of Subrogation against Sound Transit. Certificates of Insurance, including the Additional Insured Endorsements, Waiver of Subrogation Endorsements and Primary and Non- Contributory Endorsements, will be provided to Sound Transit before the start of any work performed under this Agreement. September 15, 2020 Agenda Packet Page 43 of 294 System Access Fund Project Agreement Page 8 of 20 GA 0078-20 9. DISPUTE RESOLUTION 9.1. Any disputes or questions of interpretation of this Agreement or the performance of either Party under this Agreement that may arise between Sound Transit and the City shall be governed under the dispute resolution provisions in this Section 9. The Parties agree that neither Party may take or join any action in any judicial or administrative forum to challenge the other Party’s performance under this Agreement until the dispute resolution process in this Section 9 has been exhausted. 9.2. The Parties agree that cooperation and communication are essential to resolving issues efficiently. The Parties agree to use their best efforts to prevent and resolve potential sources of conflict at the lowest level possible. 9.3. Either Party may refer a dispute to the dispute resolution process by providing written notice of such referral to the other Party’s Designated Representative. The Parties agree to use their best efforts to resolve disputes arising out of or related to this Agreement using good faith negotiations by engaging in the following dispute resolution process should any such disputes arise: a. Level One - Sound Transit’s Designated Representative and the City’s Designated Representative shall meet to discuss and attempt to resolve the dispute in a time ly manner. If they cannot resolve the dispute within fourteen (14) calendar days after referral of that dispute to Level One, either party may refer the dispute to Level Two. b. Level Two - Sound Transit’s Project Director of Planning & Integration, Office of Planning & Innovation and the City’s Departmental Leads shall meet to discuss and attempt to resolve the dispute in a timely manner. If they cannot resolve the dispute within fourteen (14) calendar days after referral of that dispute to Level Two, either Party may refer the dispute to Level Three. c. Level Three - Sound Transit’s Executive Director, Office of Planning & Innovation, or Designee and the City’s Department Directors or Designee shall meet to discuss and attempt to resolve the dispute in a timely manner. 9.4. In the event the dispute is not resolved at Level Three within fourteen (14) calendar days after referral of that dispute to Level Three, the Parties are free to file suit, seek any available legal remedy, or agree to alternative dispute resolution methods such as mediation. At all times prior to resolution of the dispute, the Parties shall continue to perform any undisputed obligations and make any undisputed required payments under this Agreement in the same manner and under the same terms as existed prior to the dispute. Notwithstanding anything in this Agreement to the contrary, neither Party has any obligation to participate in mediation or any other form of alternative dispute resolution following completion of Level Three of the process described herein. A Party may decline to participate in such proceeding for any reason or no reason. September 15, 2020 Agenda Packet Page 44 of 294 System Access Fund Project Agreement Page 9 of 20 GA 0078-20 10. LEGAL PROVISIONS 10.1. Warranties. By execution of this Agreement, both Parties warrant that they have the full right and authority to enter into and perform this Agreement, and that by entering into or performing this Agreement, they are not in violation of any law, regulation, or agreement; and that the execution, delivery and performance of the Agreement has been duly authorized by all requisite corporate action, and that the signatories hereto, which have signed on each Parties behalf, are authorized to sign this Agreement. 10.2. No waiver. Neither Party will be relieved of its obligations to comply promptly with any provision of this Agreement by reason of any failure by the other Party to enforce prompt compliance, and such failure to enforce will not constitute a waiver of rights or acquiescence in the other Party’s conduct. 10.3. Costs. Each Party will be responsible for its own costs, including legal fees, incurred in negotiating or finalizing this Agreement, unless otherwise agreed in writing by the Parties. If either Party brings any claim or lawsuit arising from this Agreement, each Party will pay all its legal costs and attorney’s fees and expenses incurred in de fending or bringing such claim or lawsuit, including all appeals, in addition to any other recovery or award provided by law; however, nothing in this paragraph will be construed to limit the Parties’ rights to indemnification. 10.4. Public Records. Each Party shall be responsible for its own public records and public records requests. 10.5. Notices. All notices required under this Agreement must be in writing and addressed to the Designated Representative. All notices must be either: (i) delivered in person, (ii) deposited postage prepaid in the certified mails of the United States, return receipt requested, (iii) delivered by a nationally recognized overnight or same -day courier service that obtains receipts, or (iv) delivered electronically to the other Party’s D esignated Representative. However, notice under Section 5, termination, must be delivered in person or by certified mail, return receipt requested. 10.6. The parties may not unreasonably withhold requests for information, approvals or consents provided for in this Agreement; provided, however, that approvals or consents required to be given by vote of the Sound Transit Board or the City Council are recognized to be legislative actions. The parties will take further actions and execute further documents, either jointly or within their respective powers and authority, to implement the intent of this Agreement. The City and Sound Transit will work cooperatively with each other to achieve the mutually agreeable goals as set forth in this Agreement. 10.7. Time is of the es sence in every provision of this Agreement. Unless otherwise set forth in this Agreement, the reference to “days” shall mean calendar days unless otherwise noted. Any reference to “working days” shall exclude any legal holidays and weekend days. If any September 15, 2020 Agenda Packet Page 45 of 294 System Access Fund Project Agreement Page 10 of 20 GA 0078-20 time for action occurs on a weekend or legal holiday, then the time period shall be extended automatically to the next business day. 10.8. No joint venture or partnership is formed as a result of this Agreement. No employees, agents or subcontractors of one Party shall be deemed, or represent themselves to be, employees of any other Party. 10.9. This Agreement has been reviewed and revised by legal counsel for both Parties and no presumption or rule that ambiguity shall be construed against the Party drafting the document applies to the interpretation or enforcement of this Agreement. The Parties intend this Agreement to be interpreted to the full extent authorized by applicable law. 10.10.This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all counterparts together shall constitute but one and the same instrument. 10.11. Severability. In case any term of this Agreement is held invalid, illegal, or unenforceable in whole or in part, by a court of law, the Parties will reform the a greement to satisfy the original intent of the Parties. IN WITNESS WHEREOF, each of the Parties has executed this Agreement by having its authorized representative affix her/his name in the appropriate space below: SOUND TRANSIT By: Kimberly Farley, Deputy CEO Date: CITY By: Jennifer Phillips, City Manager Date: Approved as to form: By: Sound Transit Legal Counsel Approved as to form: By: Paul Byrne, City Attorney September 15, 2020 Agenda Packet Page 46 of 294 System Access Fund Project Agreement Page 11 of 20 GA 0078-20 Exhibit List: Exhibit A: Scope of Work and Deliverables Exhibit B: Project Funding Plan Exhibit C: Project Schedule Exhibit D: Engineer’s Estimate Exhibit E: Funding Certification Letter for Construction Phase Exhibit F: Environmental Review Certification Exhibit G: ROW Certification Exhibit H: Template for Reporting Requirements Exhibit I: Invoice Form September 15, 2020 Agenda Packet Page 47 of 294 System Access Fund Project Agreement Page 12 of 20 GA 0078-20 Exhibit A: Scope of Work and Deliverables 1.0 PROJECT SCOPE The project scope will include replacing existing damaged sidewalks on the east and west side of 102nd Street NE from NE 185th and 102nd Ave NE Bridge. The work will consist of reconstructing curb and gutter, sidewalks, curb ramps, tree wells, pavement delineation, signage; and installing pedestrian lighting. 2.0 DELIVERABLES  Complete thirty (30), ninety (90) percent and one hundred (100) percent complete plans, specifications and estimate (PS&E).  Provide a hard copy of plans and estimate at each to Sound Transit at each design stage. September 15, 2020 Agenda Packet Page 48 of 294 System Access Fund Project Agreement Page 13 of 20 GA 0078-20 Exhibit B: Project Funding Plan September 15, 2020 Agenda Packet Page 49 of 294 System Access Fund Project Agreement Page 14 of 20 GA 0078-20 Exhibit C: Project Schedule Start Design…………………………………………………………………………………January 2021 30% PS&E……………………………………………………………………………......…October 2021 90% PS&E…………………………………………………………………………………...…..July 2022 100% PS&E………………………………………………………………………………December 2022 Construction Advertisement……………………………………………………………....January 2023 Project Completion .……………..…………………………………………………..…..December 2024 September 15, 2020 Agenda Packet Page 50 of 294 System Access Fund Project Agreement Page 15 of 20 GA 0078-20 Exhibit D: Engineer’s Estimate September 15, 2020 Agenda Packet Page 51 of 294 System Access Fund Project Agreement Page 16 of 20 GA 0078-20 Exhibit E: Funding Certification Letter for Construction Phase The City to provide Funding Certification Letter September 15, 2020 Agenda Packet Page 52 of 294 System Access Fund Project Agreement Page 17 of 20 GA 0078-20 Exhibit F: Environmental Review Certification The City of _______________, as lead agency for purposes of the State Environmental Policy Act (SEPA), hereby certifies that the proposal described herein has undergone environmental review in accordance with all applicable SEPA rules pursuant to Chapter 197 -11 Washington Administrative Code. The City of _______________ has completed the following project -level environmental review documentation and submitted to Sound Transit for review: ☐Letter of exemption from SEPA pursuant to WAC 197-11-800 ☐SEPA Environmental Checklist/Determination of Non-significance (DNS) or Mitigated DNS ☐Environmental Impact Statement ☐SEPA Addendum ☐Other: ________________________________________________________ Signature of Authorized Local Government SEPA Responsible Official Sound Transit’s office of Environmental Affairs and Sustainability has reviewed the provided documents checked above and authorizes the following: ☐Payment for construction (Design and Construction Agreements) ☐Environmental approval to execute agreement for construction of project (Construction Only Agreement) Signature of Corridor Environmental Manager September 15, 2020 Agenda Packet Page 53 of 294 System Access Fund Project Agreement Page 18 of 20 GA 0078-20 Exhibit G: ROW Certification The City to provide ROW Certification September 15, 2020 Agenda Packet Page 54 of 294 System Access Fund Project Agreement Page 19 of 20 GA 0078-20 Exhibit H: Template for Reporting Requirements DOWNTOWN BOTHELL NON -MOTORIZED ACCESS IMPROVEMENTS PROJECT REPORT GA 0078 -20 Reporting Period: _______________ Submitted By:___________________ 1. Project Update . Status of major activities in the reporting period, both current and upcoming. 2. Assessment of on-going risks . The City will notify Sound Transit of any issues that may affect the Project Schedule and overall implementation of the Project. 3. Summary of expenditures during reporting period. Summary of expenditures during reporting period, and expected expenditures in the subsequent reporting period. September 15, 2020 Agenda Packet Page 55 of 294 System Access Fund Project Agreement Page 20 of 20 GA 0078-20 Exhibit I: Sound Transit Invoice Form Invoice No. _____ Dated: _________ TO: accountspayable@soundtransit.org Attention: Accounts Payable and Alex Krieg Re: DOWNTOWN BOTHELL NON -MOTORIZED ACCESS IMPROVEMENTS GA 0078 -20, System Access Fund Project The City’s authorized representative certifies that Sound Transit’s pro rata share of costs under this invoice is $_______, and is due and payable to the City in accordance with the provisions of the Agreement, and is supported by the attached invoice and supporting documentation. [Identify the elements(s), and the amounts by element, for which the amount due applies ] The City makes the following representations and warranties to Sound Transit in connection with the Invoice:  All work performed to date has been, unless otherwise specifically stated by the City , performed in accordance with the terms and conditions of this Agreement.  The amount specified above has been computed in accordance with, and is due and payable under, the terms and conditions of the Agreement, has not been the subject of any previous invoice (unless disputed or rejected for payment) and is not the subject of any pending invoice from the City. Any liability of Sound Transit arising from these representations and warranties are governed by the terms and conditions of the Agreement. City By: __________________________________ Date: _________________ [Name, Position ] September 15, 2020 Agenda Packet Page 56 of 294 City Council Agenda Bill AB # 20-117 TO: Mayor Olsen and Members of the Bothell City Council FROM: Michael Kattermann, Community Development Director Paul Byrne, City Attorney DATE: September 15, 2020 SUBJECT: Public Hearing and Consideration of Extending Interim Ordinance (Ordinance 2312) Temporarily Suspending Development Application and Permit Timelines POLICY CONSIDERATION: The Council is being asked to consider whether to extend the Interim Ordinance adopted April 7, 2020, that suspends timelines related to development applications and permits as currently specified in several titles of the Bothell Municipal Code (BMC). The Interim Ordinance will expire October 7, 2020, unless Council holds a public hearing and acts to extend the ordinance for another six months. Development applications and projects continue to face potential and actual delays due to the impacts of COVID-19. The suspension of these timelines is beneficial for applicants by removing any concern that an application or permit may expire due to inactivity as a result of the pandemic. Staff also benefits by reducing the number of requests for and processing of renewals or extensions. HISTORY: DATE ACTION MARCH 5, 2020 Mayor declared state of emergency due to COVID-19 Virus outbreak MARCH 16, 2020 City Manager directed as many city staff as possible to work remotely MARCH 23, 2020 Governor issued stay-at-home order, causing some development projects to stop operations APRIL 7, 2020 Council adopted emergency ordinance suspending permit timelines for six months JUNE 2, 2020 Council conducted public hearing on emergency ordinance adopted April 7, 2020, allowing ordinance to remain in effect At the time the Interim Ordinance was adopted the effects of the pandemic on development was not known. Almost six months have passed since the adoption of the Interim Ordinance and the action has not created any issues for applicants or staff. September 15, 2020 Agenda Packet Page 57 of 294 City Council Agenda Bill AB # 20-117 DISCUSSION: Bothell continues to have numerous active development projects, including several new projects, in various stages of review, approval, and construction that typically are subject to expiration or lapsing dates by which action must be taken or a renewal/extension is required. These time limitations were temporarily suspended and/or tolled by Council passage of Ordinance No. 2312 in April 2020. With the continued uncertainty about the duration and economic impacts of the COVID-19 pandemic and the Governor’s limitations on various activities, there may be a number of applications and permits that will languish and/or expire due to inactivity by applicants and contractors. Under the provisions of state law (RCW 36.70A.390), cities may enact interim ordinances for a period of six months and may extend the interim ordinance for an additional six months, subject to another public hearing. Council can also repeal the ordinance at any time by a simple motion and affirmative vote. If adopted by Council, the provisions of the Interim Ordinance will continue to be in effect until March 15, 2021. In order to assist sectors of the local economy by encouraging projects to continue permitting and construction and to minimize the number of individual extension requests, staff is recommending adoption of an ordinance (Attachment 1) extending Interim Ordinance No. 2312 that temporarily suspended the expiration of applications and permits and that tolled permit processing time periods to provide additional time for application processing by the City. The suspension and tolling will continue to apply to all applications deemed complete and permits active as of January 1, 2020. Given the uncertainty about the economic impacts and duration of this crisis, staff believes extending the interim ordinance for an additional six months is warranted and prudent. FISCAL IMPACTS: None ATTACHMENTS: Att-1. Proposed Ordinance extending Interim Ordinance No. 2312 RECOMMENDED ACTION: Approve an Ordinance extending Interim Ordinance No. 2312 to continue temporary suspension of development application and permit timelines. September 15, 2020 Agenda Packet Page 58 of 294 ORDINANCE NO. (2020) AN ORDINANCE OF THE CITY OF BOTHELL, WASHINGTON, EXTENDING FOR AN ADDITIONAL SIX MONTHS INTERIM ORDINANCE NO. 2312 TEMPORARILY POSTPONING EXPIRATION OF DEVELOPMENT APPLICATIONS AND PERMITS AND TOLLING PROCEDURAL DEADLINES. WHEREAS, in response to the COVID-19 pandemic and related emergency declarations and proclamation, the City Council passed interim Ordinance No. 2312 temporarily postponing expiration of development applications and approved land use actions and construction permits and temporarily tolling procedural deadlines for a period of six months; and WHEREAS, interim Ordinance No. 2312 assisted sectors of the local economy, Bothell residents, and City staff by encouraging projects to resume as soon as possible and by minimizing the number of individual extension requests; and WHEREAS, the pandemic, related emergency orders, and the economic impacts continue to impact or delay in the construction, inspection, and review of development projects with an active application or permit with the City of Bothell and may cause delays with any project or permit applications filed during the state of emergency; and WHEREAS, the City Council wishes to encourage a continuation of construction activity delayed by the continuing emergency restrictions and by the economic impacts of the pandemic through further postponement of the deadlines and expiration dates for applications and permits; and WHEREAS, RCW 36.70A.390 authorizes the interim ordinance to be renewed for one or more six-month periods if a subsequent public hearing is held and findings of fact are made prior to each renewal; and WHEREAS, a public hearing was held on September 15, 2020, to allow for public testimony on the extension of Ordinance No. 2312; and WHEREAS, the COVID-19 public health and economic crisis requires the use of this interim ordinance extending development application processing and permit expiration time periods; and Page 1 of 4 Att-1 September 15, 2020 Agenda Packet Page 59 of 294 WHEREAS, this Ordinance is exempt from the requirements of a threshold determination under the State Environmental Policy Act pursuant to WAC 197-11-800(19) and does not require transmittal to the Washington State Department of Commerce for comment because it is intended to be temporary until public health and economic conditions improve and the provisions of this Ordinance are procedural in nature, in that they only modify the amount of time an application or an issued permit remains viable; and WHEREAS, the City Council finds that it is in the public interest to extend the interim Ordinance. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BOTHELL, WASHINGTON, DOES ORDAIN AS FOLLOWS: Section 1. FINDINGS OF FACT. The Recitals set forth above and the Recitals included in interim Ordinance No. 2312 are adopted as the Findings of Fact required pursuant to RCW 36.70A.390 in support of extending interim Ordinance No. 2312. Section 2. EXTENSIONS OF DEVELOPMENT APPLICATIONS AND PERMITS. This interim ordinance shall serve to extend the expiration date of Ordinance No. 2312, and all provisions of Ordinance No. 2312 shall remain in effect until the expiration of this interim ordinance and, as a result, a development permit, approval, or application shall not lapse, terminate, or otherwise expire prior to the expiration of this interim ordinance. Section 3. PUBLIC HEARING. Pursuant to RCW 35A.63.220 and RCW 36.70A.390, Section 4. SEVERABILITY. If any section, sentence, clause, or phrase of this ordinance should be held to be invalid by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause, or phrase of this ordinance. Section 5. EFFECTIVE DATE AND EXPIRATION. The effective date of the interim controls adopted in Ordinance No. 2312 remain unchanged and, by this extension, shall be extended in effect for a period of six (6) months from the date this Ordinance is passed and shall automatically expire after a period of six months, on March 15, 2020, unless again extended as provided in RCW 36.70A.390 or otherwise superseded by action of Council, whichever occurs first. Section 6. CORRECTIONS. The City Clerk and the codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener’s/clerical errors, references, ordinance numbering, section/subsection numbers, and any references thereto. Page 2 of 4 September 15, 2020 Agenda Packet Page 60 of 294 Page 3 of 4 APPROVED: _____________________________________ LIAM OLSEN MAYOR ATTEST/AUTHENTICATED: LAURA HATHAWAY CITY CLERK APPROVED AS TO FORM: PAUL BYRNE CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO.: (2020) September 15, 2020 Agenda Packet Page 61 of 294 Page 4 of 4 SUMMARY OF ORDINANCE NO. (2020) City of Bothell, Washington On the day of , 2020, the City Council of the City of Bothell passed Ordinance No. __ (2020). A summary of the content of said Ordinance, consisting of the title, is provided as follows: AN ORDINANCE OF THE CITY OF BOTHELL, WASHINGTON, EXTENDING FOR AN ADDITIONAL SIX MONTHS INTERIM ORDINANCE NO. 2312 TEMPORARILY POSTPONING EXPIRATION OF DEVELOPMENT APPLICATIONS AND PERMITS AND TOLLING PROCEDURAL DEADLINES. The full text of this Ordinance will be mailed upon request. LAURA HATHAWAY CITY CLERK FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO.: (2020) September 15, 2020 Agenda Packet Page 62 of 294 City Council Agenda Bill AB # 20-118 TO: Mayor Olsen and Members of the Bothell City Council FROM: Jennifer Phillips, Executive Department DATE: September 15, 2020 SUBJECT: Consideration of Contract with Gordon Thomas Honeywell Governmental Affairs (GTH) for State Government Relations Services from October 1, 2020 – September 30, 2021 POLICY CONSIDERATION: The City Council should consider if use of City funds to hire a government relations consultant at the cost of $57,620 is a continued priority at this time. This item directly supports City Council’s Fiscal Responsibility and Stability Goal by enhancing the City’s chances of obtaining State funding. HISTORY: DATE ACTION APRIL 27, 2018 Council expressed interest in expanding regional presence and enhancing legislative communication at a budget and goals retreat SEPTEMBER 4, 2018 Council approved a one-year contract with GTH for lobbying services SEPTEMBER 3, 2019 Council approved renewing contract with GTH for another year. DISCUSSION: Maintaining regular, positive relationships with State elected representatives, whose decisions often directly impact cities, is of particular importance for Washington cities. Beyond regulatory implications, through its grants and budget allocations, the State of Washington transfers a large amount of funding each year to cities for a variety of local projects and programs. In order to maximize potential for receiving such State funding, the City has benefited from hiring a state government relations consultant and could continue that practice with the approval of the proposed contract. Beyond the traditional advocacy role, a state government relations consultant conducts activities such as coalition building and planning, strategic messaging, support network outreach, and on-going monitoring of opportunities for direct City involvement in Olympia. Overall, contracting this service is a cost-effective September 15, 2020 Agenda Packet Page 63 of 294 City Council Agenda Bill AB # 20-118 way to provide City representation in Olympia given the time required to do it correctly, the value of prior established expertise and relationships, as well as reduction in staff and Council time spent travelling between Bothell and Olympia. Moreover, having consistent City representation in Olympia is an investment toward securing additional State funds for the City in a highly competitive and resourced limited environment. Scope of work for the 2020-2021 contract is proposed to remain similar to the prior contract, including an update to the City’s legislative agenda and policy. The policy manual states the City’s positions on issues and the legislative agenda is used to elevate the City’s immediate top priorities and requests of the legislature. GTH has been working with staff to develop draft documents for the Council to receive at a meeting in October. Feedback from the Council will be incorporated into final documents and ready for adoption in November. Following adoption of the legislative platform, the consultant will begin communication frequently throughout the State’s budget and legislative sessions advocating on behalf of Bothell. FISCAL IMPACTS: The 2020-2021 contract with GTH continues the scope of work and pay structure from the current contract. GTH is not requesting any rate increases. This expenditure was unfunded for the 2019-2020 biennium. Payment for the first three months of this contract will be included in the 2019-2020 budget amendment. The remainder of the contract has been included in the 2021-2022 proposed budget. Both budget items will be going before Council later this year. ATTACHMENTS: Att-1. Proposed 2021-2022 contract with GTH. RECOMMENDED ACTION: Authorize the City Manager to execute, in substantially the same form as presented, the Professional Services Agreement with Gordon Thomas Honeywell Government Affairs for 2020-2021 State Government Relations Services and, if approved, authorize use of $57,620 from various City funds. September 15, 2020 Agenda Packet Page 64 of 294 Bothell Professional Services Agreement 1 of 13 Last Legal Update: January 2018 CITY OF BOTHELL PROFESSIONAL SERVICES AGREEMENT Contract No. _________ 1.Parties. This Professional Services Agreement, Contract No. __________ (“Agreement”), is entered into as of the Effective Date specified below between the City of Bothell, a Washington municipal corporation having its principal place of business at 18415 101st Avenue N.E., Bothell, Washington 98011 (“City”), and Gordon Thomas Honeywell Governmental Affairs, a corporation organized under the laws of the State of Washington, located and doing business at 1201 Pacific Ave., Suite 2100, Tacoma, WA 98401 (“Consultant”). 2.Recitals. 2.1 City desires to obtain professional services for assistance with State government relations and lobbying efforts. 2.2 City has solicited for such professional services as required by law, including chapter 39.80 RCW if applicable. 2.3 Consultant represents that it is available and able to provide qualified personnel and facilities necessary for the work and services contemplated herein, and Consultant further represented that it can accomplish the work and services within the required time period and in accordance with City’s specifications and professional standards. 2.4 Consultant agrees to perform the work and services specified herein in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual benefits and promises set forth herein, it is agreed by and between the parties as follows: 3.Terms and Conditions. 3.1 Services. City hereby retains Consultant, and Consultant agrees, to perform in accordance with this Agreement the work and services as set forth in the Scope of Services/Scope of Work, which is attached and incorporated by this reference as Exhibit A (“Services”). 3.2 Payment. 3.2.1 City shall pay the Consultant for Services rendered based upon the Schedule of Charges, which is attached and incorporated by this reference as Exhibit B (“Schedule of Charges”). In no event shall the amount paid by City for services rendered exceed the sum of $57,620, including applicable sales taxes and expenditures. This amount is the maximum amount to be paid under this Agreement and shall not be exceeded without prior written authorization from City in the form of a negotiated and executed supplemental agreement. 3.2.2 Consultant shall submit periodic invoices (but not more frequently than monthly) to City upon completion of the Services under the terms of payments as described in Att-1 September 15, 2020 Agenda Packet Page 65 of 294 Bothell Professional Services Agreement 2 of 13 Last Legal Update: January 2018 Exhibit B. City shall pay Consultant within forty-five (45) days of the receipt of a correct invoice in accordance with City’s usual payment procedures. If City objects to all or any portion of any invoice, it shall so notify Consultant within twenty (20) days from the date of receipt but shall pay the undisputed portion of the invoice. The parties shall immediately make every effort to settle the disputed portion of any invoice. 3.2.3 Acceptance of any payment by Consultant shall constitute a release of all payment claims against City arising under this Agreement as to such portion of the Services. No payment to Consultant, whether periodic or final, shall constitute a waiver or release by City of any claim, right, or remedy it may have against Consultant regarding performance of the Services as required by this Agreement. 3.3 Time of Performance. Consultant agrees that the Services shall begin immediately on October 1, 2020, or City’s issuance of a Notice to Proceed, whichever is applicable, and Consultant shall continue to perform the Services with due diligence. In no event shall completion of the Services be delayed beyond September 30, 2021. The Schedule of Charges and time for performance of the Services shall not be increased because of any delays or costs attributable to Consultant. In the event of a delay not attributable to Consultant, which could not be reasonably anticipated and which results in an increase in costs to perform the Services, City may at its discretion, through the execution of an amendment or supplemental agreement, increase the Schedule of Charges and/or time for performance of the Services. 3.4 Relationship of Parties. Consultant is an independent contractor under this Agreement, and the parties intend that an independent contractor-client relationship is the only relationship created by this Agreement. No employee, agent, representative, or subconsultant of Consultant shall be or shall be deemed to be the employee, agent, representative, or subconsultant of City. Consultant has no authority, and will not represent itself to have authority, to legally bind City or otherwise act for City or on City’s behalf. None of the compensation or other benefits provided by City to its employees shall be available to Consultant’s employees, agents, representatives or subconsultants. Consultant shall be solely responsible for all compensation, taxes, withholding, and other benefits due to its employees, agents, representatives, and subconsultants. Consultant shall be solely responsible for its acts and omissions and for the acts and omissions of Consultant’s agents, employees, representatives, and subconsultants during performance of this Agreement. On or before the Effective Date, Consultant shall file, maintain, and/or open all necessary records with the Internal Revenue Service and the State of Washington, and as may be required by RCW 51.08.195, to establish Consultant’s status as an independent contractor. 3.5 Services Performed at Consultant’s Risk. Consultant shall take all precautions reasonably necessary to perform the Services and shall be responsible for the safety of its employees, agents and subconsultants in the performance of the Services. 3.6 Supervision, Inspection and Performance. 3.6.1 Even though Consultant is an independent contractor with the authority to control and direct the performance and details of the Services, the Services must meet the approval of City and shall be subject to City’s general right of inspection and supervision to secure the satisfactory completion of this Agreement. September 15, 2020 Agenda Packet Page 66 of 294 Bothell Professional Services Agreement 3 of 13 Last Legal Update: January 2018 3.6.2 Consultant represents that it has or will obtain all personnel necessary to perform the Services and that such personnel shall be qualified, experienced, and licensed as may be necessary or required by applicable laws and regulations to perform the Services. All Services shall be performed by Consultant, its employees, or by subconsultants whose selection has been authorized by City; provided that City’s authorization shall not relieve Consultant or its subconsultants from any duties or obligations under this Agreement, or at law, to perform the Services in a satisfactory and competent manner. Consultant shall ensure that all contractual duties, requirements and obligations that Consultant owes to City shall also be owed to City by Consultant’s subconsultants retained to perform the Services. 3.6.3 Consultant shall be responsible for the professional quality, technical adequacy, accuracy, timely completion, and coordination of the Services and all plans, designs, drawings, specifications, reports, and other work performed pursuant to this Agreement. Consultant shall perform the Services in accordance with the standard of care of its profession in the same or similar localities at the time services are performed. Consultant shall be responsible for the professional standards, performance, and actions of all persons and firms performing the Services under this Agreement. Consultant shall, without additional compensation, correct any specific breach of a contractual obligation in the Services and revise any errors or omissions in any plans, designs, drawings, specifications, reports, and other products prepared under this Agreement. 3.7 Termination of Agreement. 3.7.1 Termination by City for Consultant’s Default. City may terminate this Agreement, in whole or in part and at any time, in writing if Consultant substantially fails to fulfill any or all of its material obligations through no fault of City. If City terminates all or part of this Agreement for default, City shall determine the amount of Services satisfactorily performed to the date of termination and the amount owing to Consultant using the criteria set forth below; provided that (a) no amount shall be allowed for anticipated profit on unperformed Services or other work, and (b) any payment due to Consultant at the time of termination may be adjusted to the extent of any additional costs City incurs or will incur because of Consultant’s default. In such event, City shall consider the actual costs incurred by Consultant in performing the Services to the date of termination, the amount of Services originally required which was satisfactorily completed to the date of termination, whether the Services or deliverables were in a form or of a type which is usable and suitable to City at the date of termination, the cost to City of either completing the Services itself or employing another firm to complete the Services in addition to the inconvenience and time which may be required to do so, and other factors which affect the value to City of the Services performed to the date of termination. Under no circumstances shall payments made under this provision exceed the Schedule of Charges. This provision shall not preclude City from filing claims and/or commencing litigation to secure compensation for damages incurred beyond that covered by withheld payments. 3.7.2 Termination by City for Convenience. City may terminate this Agreement, in whole or in part and at any time, for the convenience of City. City shall terminate by delivery to Consultant a notice of termination specifying the extent of the termination and the effective date of termination. If City terminates this Agreement for convenience, City shall pay Consultant the amount otherwise due in accordance with this Agreement for Services satisfactorily performed to the date of termination. September 15, 2020 Agenda Packet Page 67 of 294 Bothell Professional Services Agreement 4 of 13 Last Legal Update: January 2018 3.7.3 Termination by Consultant. Consultant may terminate this Agreement in the case of a material breach and upon failure of City to remedy said breach within ten (10) days of written notice by Consultant of such breach. Consultant may also terminate the Agreement if key personnel and/or facilities are lost due to an act of God or other catastrophe creating a situation under which Consultant is physically unable to perform. Consultant’s notice of termination shall be in writing. 3.8 Discrimination. When hiring of employees to perform Services, and in any subcontract arising hereunder, Consultant, its subconsultants, or any person acting on behalf of Consultant or subconsultant shall not, by reason of race, religion, color, age, sex, national origin or the presence of any sensory, mental or physical handicap, veteran status, or sexual orientation, discriminate against any person who is qualified and available to perform the Services to which the employment relates. 3.9 Indemnification and Compliance with Law. 3.9.1 The indemnification and defense obligations specified in this Section 3.9 (“Indemnity Obligations”) have been mutually negotiated and shall survive the expiration, abandonment, or termination of this Agreement. The Indemnity Obligations shall extend to claims that are not reduced to a suit and to any claims that may be compromised prior to the culmination of any litigation or the institution of any litigation. Inspection, acceptance or payment by City of or for any Services performed by Consultant shall not be grounds for avoidance of any Indemnity Obligations. 3.9.2 Consultant’s duty to indemnify the City under this Agreement varies, as more particularly set forth below, depending on the circumstances that give rise to the obligation of indemnity. However, the Consultant’s indemnity obligation shall extend – under any and all such circumstances – to all liability, claims, damages, losses, and expenses incurred by the City, whether direct, indirect, consequential, and specifically including (but not limited to) any attorneys’ and consultants’ fees and other expenses of litigation or arbitration (for convenience, these are collectively referred to as “losses”) that arise from the particular act or omission giving rise to the indemnity obligation. 3.9.2.1 General Indemnity. Except to the extent that one of the more specific indemnity obligations set forth below applies, Consultant shall defend, indemnify, and hold harmless the City, including its officers, employees, agents, and volunteers, from any and all losses and claims including any and all claims for personal injury, bodily injury, including death, or damage to property that are caused or alleged to be caused, in whole or in part, by any act or omission of Consultant. This obligation of indemnity includes negligent acts (whether concurrent, contributory, or both) by the City. The obligation of indemnity under this Subparagraph does not, however, extend to losses caused by the sole negligence of the City. 3.9.2.2 Professional Errors and Omissions. For any losses that arise from the exercise of Consultant’s professional judgment in the performance of architectural, landscape architectural, engineering, or land surveying services such that RCW 4.24.115 would apply, Consultant shall defend, indemnify, and hold harmless the City from all such losses to the extent caused or alleged to be caused by any violation of law, including state, September 15, 2020 Agenda Packet Page 68 of 294 Bothell Professional Services Agreement 5 of 13 Last Legal Update: January 2018 federal, or municipal law or ordinance, or by any negligent act, omission, breach of contract, or willful or intentional misconduct of Consultant. The obligation of indemnity under this Subparagraph does not, however, extend to losses caused by the negligence (whether sole, concurrent, or contributory) of the City. 3.9.2.3 Construction Claims. In the event that this Agreement is relative to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of any building, highway, road, excavation, or other structure, project, development, or improvement attached to real estate (specifically including moving or demolition in connection therewith) and therefore subject to RCW 4.24.115, Consultant shall defend, indemnify, and hold harmless the City from all losses to the extent caused or alleged to be caused by any violation of law, including state, federal, or municipal law or ordinance, or by any negligent act or omission of Consultant. The obligation of indemnity under this Subparagraph does not, however, extend to losses caused by the negligence (whether sole, concurrent, or contributory) of the City. 3.9.3 In any and all claims against the City by any employee of Consultant, the indemnification obligations set forth above shall not be limited in any way by any limitation on the amount or type of damages or compensation benefits payable by or for Consultant under the applicable worker’s or workmen’s compensation, benefit, or disability laws (including but not limited to the Industrial Insurance laws, Title 51 of the Revised Code of Washington). Consultant expressly waives any immunity Consultant might have under such laws and, by entering into this Agreement, acknowledges that this waiver has been mutually negotiated. 3.9.4 The obligations of this Paragraph shall not be construed to negate, abridge, or otherwise reduce any other right or obligation which would otherwise exist as to any person or entity described in this paragraph. 3.9.5 For purposes of this Paragraph only, the term “City” shall mean and include the City and its council members and other elected officials, other officers, employees, and agents, and the term “Consultant” shall mean and include Consultant, all of its Subconsultants and suppliers at all tiers, agents, and any other person directly or indirectly employed by any of them, or anyone for whose acts any of them may be liable. 3.9.6 The parties recognize that one party may have unique knowledge or involvement in the acts that certain claims are based on; therefore, the parties agree that upon receipt or service of a claim arising out of or related to the work or project which is the subject of this Contract, the parties hereto will cooperate in good faith in the defense of any claim. The intent and purpose of this subsection is to ensure the good faith cooperation of both parties in the defense of any claim initially so that all necessary knowledge and personnel are made available to each other in order achieve the best claim defense possible. 3.9.6.1 The parties agree that they each have the right to tender the defense of any third party claims to the other party without violating the provisions of this section. However, notwithstanding any other provision in this section, in the event that either party fails to accept tender from the other party, the parties agree that it is their intent that they will cooperate and initially defend any claims arising out of, in connection with, or incident to their own acts, regardless of the type or characterization September 15, 2020 Agenda Packet Page 69 of 294 Bothell Professional Services Agreement 6 of 13 Last Legal Update: January 2018 of the act(s) and each party is free to assert such defenses, claims, counterclaims and third party claims as they deem appropriate. 3.9.6.2 At the time that liability for any disputed claim is ultimately determined by agreement, as a result of any agreed or mandatory dispute resolution process, or by final order of a court of competent jurisdiction, the parties will reimburse each other for any defense costs and claims costs and payments or judgment satisfaction that may have been incurred pursuant to the provisions of this subsection and which would not have been required of that party under the provisions of subsections 3.9.1 through 3.9.5 if their initial tender of defense had not been improperly rejected. 3.10 Insurance. Unless otherwise stated in Exhibit C, the following insurance requirements shall apply. 3.10.1 Insurance. The Consultant shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. 3.10.2 No Limitation. Consultant’s maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City’s recourse to any remedy available at law or in equity. 3.10.3 Minimum Scope of Insurance. Consultant shall obtain insurance of the types described below: A.Automobile Liability insurance covering all owned, non-owned, hired and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01 or a substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability coverage. B.Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors and personal injury and advertising injury. The City shall be named as an additional insured under the Consultant’s Commercial General Liability insurance policy with respect to the work performed for the City. C.Workers’ Compensation coverage as required by the Industrial Insurance laws of the State of Washington. 3.10.4 Minimum Amounts of Insurance. Consultant shall maintain the following insurance limits: A.Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. September 15, 2020 Agenda Packet Page 70 of 294 Bothell Professional Services Agreement 7 of 13 Last Legal Update: January 2018 B. Commercial General Liability insurance shall be written with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. C. Professional Liability insurance shall be written with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. 3.10.5 Other Insurance Provisions. The insurance policies are to contain, or be endorsed to contain, the following provisions for Automobile Liability, Professional Liability and Commercial General Liability insurance: A. The Consultant’s insurance coverage shall be primary insurance as respect the City. Any insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant’s insurance and shall not contribute with it. B. The Consultant’s insurance shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. In the event that such endorsement cannot be obtained from Consultant’s insurance carrier, Consultant shall be responsible for providing notice in accordance with the terms of this provision. 3.10.6 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. 3.10.7 Verification of Coverage. Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Consultant before commencement of the work, which is attached and incorporated by this reference as Exhibit C (“Consultant’s Certificate(s) of Insurance”). 3.11 Records, Documents, and Audits. 3.11.1 Original documents, drawings, designs and reports developed under this Agreement, whether in written or electronic format, shall belong to and become the property of City, and shall be promptly delivered to City as required by the Services or at the termination of this Agreement. All written information submitted by City to Consultant in connection with the Services will be safeguarded by Consultant to at least the same extent as Consultant safeguards like information relating to its own business. If such information is publicly available, is already in Consultant’s possession or known to it, or is rightfully obtained by Consultant from third parties, Consultant shall bear no responsibility for its disclosure, inadvertent or otherwise. 3.11.2 City acknowledges that the documents prepared by Consultant are prepared specific to the project described herein. If City modifies or uses any of said documents for other projects or purposes without the written approval of Consultant, City releases Consultant from all responsibility for any errors or omissions therein with respect to such modification or other use. September 15, 2020 Agenda Packet Page 71 of 294 Bothell Professional Services Agreement 8 of 13 Last Legal Update: January 2018 3.11.3 Consultant and its subconsultants shall maintain books, records, documents, and other evidence directly pertinent to performance of the Services in accordance with generally accepted accounting principles and practices consistently applied. City or any duly authorized representative shall have access to and be permitted to inspect such books, records, documents, and other evidence for the purpose of audit, examination and copying for a period of six (6) years after completion or termination of the Agreement, whichever is later. Audits conducted under this Section 3.11 shall be in accordance with generally accepted auditing standards and established procedures and guidelines of the reviewing or auditing agency. 3.12 Disputes and Remedies. 3.12.1 Choice of Law; Venue. This Agreement shall be interpreted in accordance with the laws of the State of Washington. The Superior Court of King County, Washington, shall have exclusive jurisdiction and venue over any legal action arising under this Agreement. 3.12.2 Dispute Resolution. All claims, counterclaims, disputes, and other matters in question between City and Consultant arising out of or relating to this Agreement shall be referred to the City Manager or a designee for determination, together with all pertinent facts, data, contentions, and so forth. The City Manager shall consult with Consultant’s representative and make a determination within thirty (30) calendar days of such referral. Should the claims, counterclaims, or disputes not be resolved by the City Manager’s decision, the parties shall refer the matter to professional mediation in Seattle, Washington, which shall be conducted within thirty (30) calendar days of the City Manager’s decision. The cost of mediation shall be shared equally. No civil action on any claim, counterclaim, or dispute may be commenced until thirty (30) days following such mediation. In the event of litigation between Consultant and City to enforce the rights under this Agreement, reasonable attorney fees and expenses shall be allowed to the prevailing party. 3.12.3 Remedies. City’s rights and remedies in this Agreement are in addition to all other rights and remedies provided by law. City may exercise such rights and remedies in any order and at any time as it determines necessary or appropriate. 3.13 Notice. All communications regarding this Agreement shall be sent to the parties at the addresses listed below, or at such other address as given pursuant to this Section, and shall be effective on the next business day if sent by registered or certified mail or deposited with an overnight delivery service. City of Bothell Executive Department Attn: Catherine Jansen 18415 101st Ave. NE Bothell, WA 98011 Gordon Thomas Honeywell Governmental Affairs Attn: Shelly Helder 1201 Pacific Ave., Suite 2100 Tacoma, WA 98401 3.14 Entire Agreement. The written terms and provisions of this Agreement, together with all referenced Exhibits, supersede all prior verbal statements of any officer or other representative of City, and such statements shall not be effective or be construed as entering into September 15, 2020 Agenda Packet Page 72 of 294 Bothell Professional Services Agreement 9 of 13 Last Legal Update: January 2018 or forming a part of, or altering in any manner whatsoever, this Agreement. The entire agreement between the parties with respect to the subject matter hereunder is contained in this Agreement and the referenced Exhibits. 3.15 Priority of Documents. In the event that the language and provisions of this Agreement are contrary to or conflict with any language or provisions set forth in any exhibit to this Agreement, the language and provisions of this Agreement shall control, and the contrary or conflicting language or provisions of the exhibit(s) shall be disregarded and shall be considered void. 3.16 Modification. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of City and Consultant. 3.17 Assignment. Any assignment of this Agreement by Consultant without the prior written consent of City shall be void. 3.18 Waiver. A waiver of any breach by either party shall not constitute a waiver of any subsequent breach. 3.19 Third-Party Beneficiaries. There are no third-party beneficiaries to this Agreement. 3.20 Counterparts. This Agreement shall be signed in duplicate or triplicate and may not be signed in counterparts. 3.21 Authorized Signatures. By their signatures below each party represents that it has taken all necessary steps and is fully authorized to sign for and on behalf of the named principal above. 3.22 Effective Date. This Agreement shall be effective on the last date entered by the parties below. SIGNATURE PAGE FOLLOWS IMMEDIATELY September 15, 2020 Agenda Packet Page 73 of 294 Bothell Professional Services Agreement 10 of 13 Last Legal Update: January 2018 CITY OF BOTHELL By: Jennifer Phillips Date Its: City Manager ATTEST/AUTHENTICATED: Laura K. Hathaway Date City Clerk APPROVED AS TO FORM: Paul Byrne Date City Attorney CONSULTANT: By: Date Its: September 15, 2020 Agenda Packet Page 74 of 294 Bothell Professional Services Agreement 11 of 13 Last Legal Update: January 2018 EXHIBIT A Scope of Services / Scope of Work Consultant will assist City in development of its 2021-2022 Legislative Agenda and Policy Manual (revised for the 2022 Legislative Session) to include the following steps:  Work with City Council and staff to finalize a legislative agenda that advances the City’s interests and accounts for the political climate.  Develop a strategy to advance the City’s legislative agenda items and funding request(s)  Assist with creation of one pagers for City’s top legislative priorities  Participate in the Association of WA Cities Legislative Priorities Committee to ensure City’s priorities are considered in development of the Association’s legislative agenda  Engage the City’s legislative delegation and key committee members to inform them on the City’s funding request(s) and legislative priorities.  Schedule meetings with state agencies, the Governor's Office, as necessary to best position the City's legislative agenda items and funding request(s) for success.  Identify key opportunities for City staff and/or Councilmembers to travel to Olympia and advance the City's interests.  Schedule meetings with legislators, prepare materials associated with trips to Olympia and brief City staff and/or Councilmembers prior to trip.  Meet with lobbyists from other interested stakeholders to garner support for the City's agenda items.  Coordinate pre-session meetings with legislators and prepare Councilmembers for those meetings  Support City staff to identify and convene stakeholder meetings to bolster the City’s legislative priorities  Support City staff to complete funding request forms for capital budget and transportation budget requests  Brief City staff on legislative activity and attend City Council meetings as requested by the City Manager  Depending on City priorities, submit a funding request to the Governor’s Office for potential inclusion in the Governor’s proposed budget  During the legislative session, provide weekly reports on GTHGA activities in support of the City’s legislative priorities  During the legislative session, complete bill tracking for City identified policy priorities  During the legislative session, testify in support/opposition of proposed legislation on behalf of the City when given direction (as a backup to when a Councilmember or staff cannot attend)  During the legislative session, conduct routine check in calls with City staff and/or Councilmembers to discuss the status of the City’s legislative priorities and other legislative activities September 15, 2020 Agenda Packet Page 75 of 294 Bothell Professional Services Agreement 12 of 13 Last Legal Update: January 2018 EXHIBIT B Schedule of Charges Consultant shall invoice City monthly for services performed at a rate of $4,635 per month. In addition to service fees, Consultant may bill expenses such as communication and travel. Expenses shall not exceed $2,000 for the term of the contract. The maximum amount to be paid under the agreement is $57,620. This amount shall not be exceeded without written consent from City in the form of a supplemental agreement. September 15, 2020 Agenda Packet Page 76 of 294 Bothell Professional Services Agreement 13 of 13 Last Legal Update: January 2018 EXHIBIT C Consultant’s Certificate(s) of Insurance [See Attached] September 15, 2020 Agenda Packet Page 77 of 294 CERTIFICATE HOLDER ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? (Mandatory in NH) If yes, describe under SPECIAL PROVISIONS below © 1988- 2009 ACORD CORPORATION. All rights reserved. ACORD 25 (2009/09) AUTHORIZED REPRESENTATIVE CANCELLATION DATE (MM/DD/YYYY)CERTIFICATE OF LIABILITY INSURANCE LOCJECT PRO-POLICY GEN'L AGGREGATE LIMIT APPLIES PER: OCCURCLAIMS-MADE COMMERCIAL GENERAL LIABILITY GENERAL LIABILITY PREMISES (Ea occurrence)$DAMAGE TO RENTED EACH OCCURRENCE $ MED EXP (Any one person)$ PERSONAL & ADV INJURY $ GENERAL AGGREGATE $ PRODUCTS - COMP/OP AGG $ $RETENTION DEDUCTIBLE CLAIMS-MADE OCCUR $ $ AGGREGATE $ EACH OCCURRENCE $UMBRELLA LIAB EXCESS LIAB DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (Attach ACORD 101, Additional Remarks Schedule, if more space is required) INSR LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFF (MM/DD/YYYY) POLICY EXP (MM/DD/YYYY)LIMITS WC STATU- TORY LIMITS OTH- ER E.L. EACH ACCIDENT E.L. DISEASE - EA EMPLOYEE E.L. DISEASE - POLICY LIMIT $ $ $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON-OWNED AUTOS $ COMBINED SINGLE LIMIT (Ea accident) BODILY INJURY (Per person) BODILY INJURY (Per accident) PROPERTY DAMAGE (Per accident)$ $ $ $ THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADDL WVD SUBR N / A $ $ THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). The ACORD name and logo are registered marks of ACORD COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: INSURED PHONE (A/C, No, Ext): PRODUCER PRODUCER CUSTOMER ID #: ADDRESS: E-MAIL FAX (A/C, No): CONTACT NAME: NAIC # INSURER A : INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : INSURER(S) AFFORDING COVERAGE SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. A 1001486 132849.4 02-11-2010 Tony Brooks Insurance Agency Inc 12001 Pacific Ave S Ste 103 Tacoma, WA 98444 Tony Brooks 253-537-1444 253-539-2439 tony.brooks.lxn3@statefarm.com Gordon, Thomas, Honeywell Governmental Affairs PO Box 1677 Tacoma, WA 98401 25143 25178 A Y Y 98-GY-1097-9 11/20/2019 11/20/2021 1,000,000 250,000 5,000 100,000 2,000,000 2,000,000 B ENOL Auto Y Y 378 6064-A08-47 07/08/2019 02/08/2021 Combined Single Limit 1,000,000 A 98-B7-M555-8 07/08/2019 07/08/2021 1,000,000 2,000,000 A N 98-GY-1097-9 (stop gap)11/20/2019 11/20/2021 1,000,000 1,000,000 1,000,000 1,000,000 Additional Insured: City of Bothell 18415 – 101st Ave. NE Bothell, WA 98011 City of Bothell 18415 – 101st Ave. NE Bothell, WA 98011 Tony Brooks, Agent State Farm Fire and Casualty Company State Farm Mutual Automobile Insurance Company 08/31/2020 September 15, 2020 Agenda Packet Page 78 of 294 September 15, 2020 Agenda Packet Page 79 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 80 of 294 City Council Agenda Bill AB # 20-119 TO: Mayor Olsen and Members of the Bothell City Council FROM: Chris Bothwell, Finance Director DATE: September 15, 2020 SUBJECT: Second Quarter 2020 Financial Report and Audited 2019 Comprehensive Annual Financial Report (CAFR) POLICY CONSIDERATION: Presentation only HISTORY: DATE ACTION NOVEMBER 27, 2018 City Council adopted the 2019-2020 biennial budget DISCUSSION: The City Council adopted a budget for the 2019-2020 biennium. Staff has a responsibility to provide periodic financial updates to the City Council to ensure that the City Council is kept abreast of the City’s financial performance and other matters affecting the City’s finances. This is the second quarter 2020 financial report to the City Council. The audited 2019 Comprehensive Annual Financial Report (CAFR) is also attached. FISCAL IMPACTS: None ATTACHMENTS: Att-1. Second Quarter 2020 Financial Report Att-2. Audited 2019 CAFR RECOMMENDED ACTION: Presentation only September 15, 2020 Agenda Packet Page 81 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 82 of 294 Page 1 Second Quarter 2020 Financial Report September 15, 2020 SECOND QUARTER 2020 FINANCIAL OVERVIEW The second quarter of 2020 is the first period to be impacted by the COVID-19 pandemic from beginning to end. As such, the second quarter results are our first meaningful look at how the pandemic is affecting city revenues. In the early days of the pandemic staff forecasted the expected impact of the pandemic on General Fund revenues, the result was an estimated $5 million General Fund deficit in 2020. Immediate measures were taken to reduce expenditures to ensure the financial stability of the organization. The second quarter results demonstrate the success of those effort: while revenues were significantly impacted by the pandemic, expenditures were also significantly reduced and the net impact to the financial health of the General Fund was nominal, given the circumstances. Staff continues to monitor the current economic event and financial results and is periodically updating the pandemic revenue forecast. Based on current conditions it appears that the financial stability of the organization will be maintained through the end of 2020 without additional measures, provided the feared second wave does not lead to a second total shutdown of the economy before year end. The current iteration of the pandemic forecast shows an operating deficit of less than $1 million in 2020. It should be noted that Bothell currently maintains a low level of operating reserves and does not have a rainy-day fund. As such, Bothell should continue to be poised to act quickly if some of the assumptions in the pandemic forecast prove to be too optimistic or economic conditions change dramatically. Below are second quarter highlights, followed by challenges and concerns, an economic update can be found at the end of this report. SECOND QUARTER 2020 FINANCIAL HIGHLIGHTS Measures taken to curtail spending in response to the early pandemic forecast were effective and resulted in significant savings compared to budgeted expenditures in the General Fund. Property tax payments were received timely in most cases; slow payments and defaults did not affect cash flow. Utility tax collections reflect the seasonal nature of many of these revenues, but are generally consistent with budgeted amounts. Development revenues were better than the early pandemic forecast signaling that development and construction activity is continuing, albeit at a reduced pace. Bothell revenues fared better overall than the broader economy and slightly better than expectations. Att-1 September 15, 2020 Agenda Packet Page 83 of 294  The City is eligible to recoup some of its costs associated with the COVID-19 response from the CARES Act, this will be an unbudgeted inflow of resources.  Business license renewal counts were generally consistent with prior years.  CONCLUSION: Disruptions to revenue from the pandemic were significant, but were largely offset by expenditure savings. The financial stability was maintained during the quarter. SECOND QUARTER 2020 FINANCIAL CHALLENGES AND CONCERNS  Sales tax revenue was down approximately five percent compared to 2019, year-to-date collections and are on track to under perform relative to the adopted budget by $4 million for the biennium.  The pandemic will continue to negatively impact sales tax collections for the third quarter and beyond.  Telephone utility tax collections continue to lag budgeted amounts, this is the continuation of a trend that we have been monitoring for the past eighteen months.  Real Estate Excise Tax receipts were significantly below budgeted amounts and the revenue trend is likely to continue into the next biennium.  The Real Estate Excise Tax trend will likely require the General Fund to make significant unbudgeted contributions to fund debt service payments in the future.  The City must continue to be vigilant in its efforts to contain costs for the rest of the biennium as revenues are not likely to rebound in the near term. ECONOMIC UPDATE It was noted earlier in this report that second quarter data is the first meaningful data providing actual insight into the economic impacts of the pandemic; while the data is helpful it does little to provide clarity for what to expect going forward as the pandemic is evolving and there hasn’t been a similar event in modern history. Also, there is very little consensus among economists regarding what to expect in the near term. A recession is defined as two consecutive quarters of decline in the Gross Domestic Product (GDP). In the second quarter of 2020 GDP declined by a staggering 31.7%. With such an enormous single quarter drop its possible that the economy will see growth in the third quarter relative to the second quarter results. A more meaningful measure of the health of the economy going forward is likely to be a comparison of September 15, 2020 Agenda Packet Page 84 of 294 economic results relative to the same period in the prior year, which is almost certain to be declining for several quarters. For the purposes of budget development staff is modeling declining revenues compared to the same period in the prior year for the duration of an average recession (11 months). It was noted in the early pandemic forecast that, due to a number of factors that are specific to Bothell, the City is likely to fare better than many cities during the current economic event. Some evidence of this materialized in the second quarter and this is believed to be the case going forward as well. September 15, 2020 Agenda Packet Page 85 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 86 of 294 Att-2 September 15, 2020 Agenda Packet Page 87 of 294 How We Make a Difference ETHICS SERVICE SAFETY INNOVATION TEAMWORK 18415 101st Ave NE, Bothell, WA 98011 425.806.6100 www.ci.bothell.wa.us September 15, 2020 Agenda Packet Page 88 of 294 CHRIS BOTHWELL Finance Director MAUREEN SCHOLS Deputy Finance Director LINLI MOAT Senior Financial Analyst TED REIJONEN Senior Financial Analyst GRETCHEN ZUNDEL Senior Financial Analyst RICKY LEUNG Senior Financial Analyst LUZ MANGASER Graphic Designer Prepared by theFinance Team For the Fiscal Year Ended December 31, 2019 September 15, 2020 Agenda Packet Page 89 of 294 i Comprehensive Annual Financial Report For The Fiscal Year Ended December 31, 2019 City of Bothell A. INTRODUCTORY SECTION LETTER OF TRANSMITTAL ....................................................................................................................................................................I-V CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING ...............................................................................VI CITY OF BOTHELL ORGANIZATIONAL CHART .....................................................................................................................................VII CITY OF BOTHELL ELECTED OFFICIALS...............................................................................................................................................VIII B. FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT ....................................................................................................................................................I-III MANAGEMENT’S DISCUSSION AND ANALYSIS ..................................................................................................................................1-9 BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Position ...........................................................................................................................................................................1 Statement of Activities .................................................................................................................................................................................2 GOVERNMENTAL FUND STATEMENTS Balance Sheet ..............................................................................................................................................................................................3 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position.....................................................................4 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds ...................................................................5 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities ........................................................................................................................................................6 PROPRIETARY FUND STATEMENTS Statement of Net Position ...........................................................................................................................................................................7 Statement of Revenues, Expenses, and Changes in Fund Net Position .....................................................................................................8 Statement of Cash Flows .............................................................................................................................................................................9 NOTES TO FINANCIAL STATEMENTS......................................................................................................................................................10-60 September 15, 2020 Agenda Packet Page 90 of 294 ii Comprehensive Annual Financial Report For The Fiscal Year Ended December 31, 2019 City of Bothell REQUIRED SUPPLEMENTAL INFORMATION SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL General Fund ...............................................................................................................................................................................................1 Arterial Street Fund .....................................................................................................................................................................................2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PERS 1 .........................................................................................................................................................................................................3 PERS 2/3 ......................................................................................................................................................................................................4 PSERS 2 .......................................................................................................................................................................................................5 LEOFF 1 .......................................................................................................................................................................................................6 LEOFF 2 .......................................................................................................................................................................................................7 SCHEDULE OF EMPLOYER CONTRIBUTIONS PERS 1 .........................................................................................................................................................................................................8 PERS 2/3 ......................................................................................................................................................................................................9 PSERS 2 .....................................................................................................................................................................................................10 LEOFF 1 .....................................................................................................................................................................................................11 LEOFF 2 .....................................................................................................................................................................................................12 Firefighters’ Pension Fund .........................................................................................................................................................................13 SCHEDULE OF CHANGES IN NET PENSION LIABILITY Firefighters’ Pension Fund .........................................................................................................................................................................14 SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS Single Employer OPEB Plan ......................................................................................................................................................................15 COMBINING FINANCIAL STATEMENTS NON-MAJOR FUNDS – OTHER GOVERNMENTAL FUNDS Combining Balance Sheet ...........................................................................................................................................................................1 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..................................................................................2 BUDGET TO ACTUAL COMPARISONS SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL Street Fund ..................................................................................................................................................................................................3 Park Cumulative Reserve Fund ....................................................................................................................................................................4 Drug Forfeitures Fund .................................................................................................................................................................................5 Fire Impact Fees Fund .................................................................................................................................................................................6 September 15, 2020 Agenda Packet Page 91 of 294 iii Comprehensive Annual Financial Report For The Fiscal Year Ended December 31, 2019 City of Bothell Public Safety Levy Fund ...............................................................................................................................................................................7 Cemetery Endowment Fund .......................................................................................................................................................................8 General Obligation Public Safety Bond Fund .............................................................................................................................................9 Lift GO Bond Redemption Fund ...............................................................................................................................................................10 2013 GO Bond Fund .................................................................................................................................................................................11 Capital Improvements Fund ......................................................................................................................................................................12 Public Safety Capital Fund .........................................................................................................................................................................13 INTERNAL SERVICE FUNDS Combining Statement of Net Position ......................................................................................................................................................14 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position .................................................................................15 Combining Statement of Cash Flows ........................................................................................................................................................16 SUPPLEMENTAL INFORMATION BUDGET TO ACTUAL COMPARISONS FOR THE OPERATING ACCOUNTS OF THE ENTERPRISE AND INTERNAL SERVICE FUNDS OF THE PRIMARY GOVERNMENT Schedule of Operations – Combined Utility System Fund ..........................................................................................................................1 Schedule of Operations – Water Fund ........................................................................................................................................................2 Schedule of Operations – Sewer Fund ........................................................................................................................................................3 Schedule of Operations – Storm & Surface Water Fund .............................................................................................................................4 Schedule of Operations – Equipment Rental Fund .....................................................................................................................................5 Schedule of Operations – Self Insurance Fund ............................................................................................................................................6 Schedule of Operations – Asset Replacement Fund ...................................................................................................................................7 SCHEDULES Schedule of Expenditures of Federal Awards .............................................................................................................................................8 Schedule of State and Local Financial Assistance .......................................................................................................................................9 General Obligation LIFT Bond 2014 .........................................................................................................................................................10 General Obligation Bonds 2013 B ............................................................................................................................................................11 Utility Revenue Bonds 2014 .......................................................................................................................................................................12 Public Works Trust Fund Loan PC12-951-022 ...........................................................................................................................................13 Public Works Trust Fund Loan Horse Creek PC13-961-060 .......................................................................................................................14 City Hall Lease Revenue Bonds .................................................................................................................................................................15 Snohomish County Public Work Assistance Loan ......................................................................................................................................16 General Obligation Public Safety Bonds ..................................................................................................................................................17 September 15, 2020 Agenda Packet Page 92 of 294 iv Comprehensive Annual Financial Report For The Fiscal Year Ended December 31, 2019 City of Bothell C. STATISTICAL SECTION STATISTICAL SECTION TABLE OF CONTENTS FINANCIAL TRENDS Net Position by Component ........................................................................................................................................................................1 Change in Net Position ...............................................................................................................................................................................2 Fund Balances of Governmental Funds .......................................................................................................................................................3 Changes in Fund Balances of Governmental Funds ....................................................................................................................................4 REVENUE CAPACITY Assessed Value of Taxable Property ............................................................................................................................................................5 Direct and Overlapping Property Tax Rates ................................................................................................................................................6 Principal Property Tax Payers .......................................................................................................................................................................7 Property Tax Levies and Collections ............................................................................................................................................................8 Sales Tax Revenue by Category ...................................................................................................................................................................9 Direct and Overlapping Sales Tax Rates ....................................................................................................................................................10 DEBT CAPACITY Ratios of Outstanding Debt by Type .........................................................................................................................................................11 Ratios of General Bonded Debt Outstanding ...........................................................................................................................................12 Computation of Direct and Overlapping Debt..........................................................................................................................................13 Legal Debt Margin Information .................................................................................................................................................................14 Pledged-Revenue Coverage - Water, Sewer, Storm & Surface Water Fund ..............................................................................................15 Utility Revenue Bond Statistics - Water, Sewer, Storm & Surface Water Fund...........................................................................................16 DEMOGRAPHIC AND ECONOMIC INFORMATION Demographic and Economic Statistics ......................................................................................................................................................17 Principal Employers ...................................................................................................................................................................................18 OPERATING INFORMATION Full-time Equivalent City Government Employees by Function/Program .................................................................................................19 Operating Indicators by Function/Program ...............................................................................................................................................20 Capital Asset Statistics by Function/Program ............................................................................................................................................21 September 15, 2020 Agenda Packet Page 93 of 294 INTRODUCTORYSECTION September 15, 2020 Agenda Packet Page 94 of 294 i Introductory Section August 31, 2020 HONORABLE MAYOR, MEMBERS OF THE CITY COUNCIL, AND CITIZENS OF THE CITY OF BOTHELL: It is my pleasure to present to you the Comprehensive Annual Financial Report (CAFR) of the City of Bothell for the fiscal year ended December 31, 2019. This report is published annually as the official annual financial report, and complies with State law (RCW 43.09.230) requiring annual reports for Washington municipal governments to be certified and filed timely with the State Auditor’s Office. The management of the City is responsible for both the accuracy of the data and the completeness and fairness of the presentation, including all related disclosures. The City operates under a system of accounting internal controls that are concerned with the safeguarding of assets and the reliability of financial records. The definition of accounting control assumes reasonable, but not absolute, assurance that the objectives expressed in it will be accomplished by the system. The concept of reasonable assurance recognizes that the cost of internal control should not exceed the benefits expected to be derived. Cities and counties of the State of Washington use the Budgeting, Accounting and Reporting System (BARS) developed and prescribed by the Office of the State Auditor. State law provides for an annual independent audit to be conducted by the Office of the State Auditor. This report includes the auditor’s opinion with respect to the City’s financial statements. The City is a recipient of more than $750,000 in federal assistance, and is therefore required to undergo an annual independent single audit in accordance with generally accepted auditing standards. The standards applicable to financial audits are contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The State Auditor’s Office conducted Bothell’s single audit in conjunction with the City’s annual independent audit. The City’s single audit for the fiscal year ended December 31, 2019 cited zero deficiencies in the design or operation of internal controls over major federal programs. Generally Accepted Accounting Principles (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 letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Bothell’s MD&A can be found immediately following the independent auditor’s report. PROFILE OF THE GOVERNMENT Originally populated by the Native American Sammamish people, the City of Bothell was incorporated in 1909, and for many years was a center for the logging industry, then a farming community, and then a bedroom suburb for people working in the greater Puget Sound area. Today, the municipality with a population of 46,750 straddles both King and Snohomish Counties, encompasses September 15, 2020 Agenda Packet Page 95 of 294 ii Introductory Section City of Bothell 14.38 square miles, and is ranked number 26 among the largest cities in the State of Washington. The City of Bothell is a non-charter optional code city, operating under Section 35A of the Revised Code of Washington. It has a Council-City Manager form of government. The seven members of the City Council are elected by voters and serve four-year terms. The Council elects the Mayor and Deputy Mayor from within its ranks, and contracts with a professional City Manager to carry out their established goals, policies and directives. The City Manager appoints eight department heads and an Assistant City Manager. At the end of 2019, the City of Bothell had 387.6 authorized full-time equivalent positions. Bothell’s full and part-time employees provide a full range of municipal services, including general government administration, police, fire, emergency medical services, planning and zoning, street maintenance and construction, and parks and recreation. Bothell’s proprietary operations consist of water, sewer, and storm and surface water utilities. The City also operates three internal service funds – Equipment Rental (Fleet), Self-Insurance, and Asset Replacement. The City has one blended component unit, COB Properties, which accounts for the City Hall lease. Garbage service is provided by an independent contractor, while library services are provided by the King County Library System. The City prepares a biennial budget based upon established Council goals, and in accordance with the Revised Code of Washington (RCW 35A.34). The budget also includes the first two years of the adopted seven-year Capital Facilities Plan (CFP). The City Council adopts Bothell’s biennial budget appropriation at the fund level prior to the first day of each odd-numbered calendar year. Reviews are conducted at the mid-biennium, and any changes for the second half of the biennium are adopted by City Council. In accordance with state law, budget status reports are provided to the Council and City management for each fiscal quarter. The adopted budget serves as a financial planning and policy document for use by the community, City Council and staff. LOCAL ECONOMY Bothell is an affluent community with a healthy economy and tax base. The median family income is 57.5% above the US median income (Moody’s Issuer Comment March 2019). Bothell is home to University of Washington-Bothell and Cascadia College, which share a common campus within Bothell’s historic downtown. In addition, the Northshore School District, the school district that serves Bothell, is consistently recognized among the state’s top school districts. Bothell is home to three business parks; key industries within Bothell’s the business parks include biotech and biomedical firms, wireless communications, medical device manufacturing, medical research and a state-designated innovation partnership zone facilitated by University of Washington-Bothell, Cascadia College, and private sector businesses. Major firms include: AT&T (the largest communications holding company in the world based on revenue generation), Philips Medical Systems (a global leader September 15, 2020 Agenda Packet Page 96 of 294 iii Introductory Section City of Bothell in diagnostic imaging systems, patient monitoring and cardiac devices), Sonosite Inc. (a world leader and specialist in hand-carried and mounted ultrasound) and T-Mobile (a national provider of wireless voice, messaging, and data services). The City does not levy a business and occupation tax, unlike many Puget Sound communities, thereby giving Bothell a competitive advantage with employers. LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES In March 2019, Moody’s Annual Issuer Comment Report reaffirmed Bothell’s Aa2 rating, stating that Bothell’s credit position is very good, exceeding the median rating of Aa3 for US cities. In October of the same year, however, Moody’s reevaluated the City’s credit rating in conjunction with a new bond issue to rebuild two aging fire stations. At the conclusion of the reevaluation, Moody’s upgraded the City’s credit rating to Aa1 for the new bond issue and all of the City’s outstanding general obligation debt. Notable credit factors leading to the upgrade include a large tax base with strong wealth and income, improving financial position, manageable debt and pension burdens, and location and socioeconomic factors. While Bothell’s financial position is solid, fund balance as a percent of operating revenues (17.6%) is materially lower than the US median. Since 2006, the City has utilized unreserved fund balance to invest in the revitalization of its historic downtown, which included environmental cleanup of properties acquired by the City as part of the revitalization efforts. Environmental cleanup has proven to be a costly endeavor and is required prior to the sale of the surplus properties. The City Council and staff are dedicated to replenishing reserves with the eventual proceeds of sale of the surplus properties. Major accomplishments in 2019 included: implementation of Safe and Secure Bothell, an operating levy and bond sale, increasing public safety resources within the City and rebuilding two aging fire stations; the groundbreaking of an interagency project to widen State Route 522 to accommodate bus rapid transit, plus measurable progress on other transportation projects; and, the final environmental cleanup and marketing for sale of city owned properties in the City’s revitalized downtown. Bothell voters approved a nine-year Safe Streets & Sidewalks Levy in November 2016. In 2019, the City received $4.7 million in levy revenue for the City’s transportation network. Funding priorities include improving condition of major streets and payment, constructing sidewalks and crosswalks around schools, patching local streets, repairing and replacing sidewalks, and fully funding the street operations division. In 2019, voters approved Proposition 1 (a levy lid lift to fund public safety operations and equipment) and Proposition 2 (a bond measure to rebuild two aging fire stations). The passage of both propositions will enhance the City’s public safety services, mental health support for those in need, and proactive policing to better protect the community. In 2019, the City received $4.7 million in public safety levy revenue. The City’s utility funds remain financially stable due to sound operational and project management, coupled with Council’s continued adoption of annual rate increases that keep pace with inflation and capital demands. Collected impact fees are being used to fund planned infrastructure projects. September 15, 2020 Agenda Packet Page 97 of 294 iv Introductory Section City of Bothell RELEVANT FINANCIAL POLICIES The City recently completed an update to its comprehensive financial management policies. The following is a summary of the noteworthy financial policies. A review of the policies and consideration of updates is required at least every two years. Fund Balance. The City strives to maintain sufficient fund balance to ensure funding for continuity of operations and to provide a buffer for revenue fluctuations. Fund balance targets are established for all funds that support operations and are based on fund specific factors. Fund balance targets range from thirty-days of operating expenditures to ninety-days of operating expenditures. If fund balance targets are not met in any given year, then staff must communicate a plan to replenish the fund balance within four years. Budget Development and Monitoring. Policy dictates that prudent and conservative revenue and expenditures assumptions should be used in the development of a balanced budget. Budget monitoring is noted as a responsibility of department heads. One-Time Revenues. One-time revenues should be used to fund one-time expenditures and not ongoing operations. Order of Funding. Policy states that restricted funding should be utilized first to fund qualifying expenditures before unrestricted resources are considered. Long Range Financial Planning. A six-year financial forecast shall be drafted and periodically updated as the City’s long-range financial planning tool. User Fees-Full Cost Recovery. Policy describes how and when user fees are established including an acknowledgement that certain fees are set at a rate that recovers the full cost of providing the services. Capital Facilities Plan. A Capital Facilities Plan (CFP) is required. The CFP shall plan major infrastructure projects for a seven-year period and shall account for the maintenance and operating costs associated with projects. The first two years of the CFP are to be incorporated into the biennial budget. September 15, 2020 Agenda Packet Page 98 of 294 v Introductory Section City of Bothell AWARDS AND ACKNOWLEDGMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Bothell for its CAFR for the fiscal year ended December 31, 2018. This was the 18th consecutive year Bothell has received this prestigious award. To receive a Certificate of Achievement award, a government must publish an easily readable and efficiently organized CAFR that satisfies all generally accepted accounting principles and adheres to all applicable legal requirements. A Certificate of Achievement represents the highest standards in government accounting and financial reporting. Bothell is submitting the City’s 2019 CAFR to the GFOA to determine this report’s eligibility for a certificate. Staff believes the City’s 2019 CAFR again meets the requirements of the GFOA Certificate of Achievement for Excellence in Financial Reporting Program. The City was also pleased to receive the GFOA Distinguished Budget Presentation Award for the City’s 2019-2020 biennial budget document. GFOA presents this award to governments whose budget document meets the GFOA’s criteria as an effective policy document, a financial plan, an operations guide, and a communication device. Successful preparation of Bothell’s 2019 CAFR could not have been accomplished without the technical expertise and dedication of the City’s Finance staff. Appreciation is also extended to the Mayor, Council, and City management for their steadfast encouragement in conducting Bothell’s fiscal operations in a sound and prudent manner. The support and assistance from the State Auditor’s Office is also appreciated. We would be happy to respond to any questions or comments about the information contained in this report. Respectfully submitted, Chris Bothwell Finance Director September 15, 2020 Agenda Packet Page 99 of 294 vi Introductory Section City of Bothell Certificate of Presented to City of Bothell For its Comprehensive Annual December 31, 2018 Executive Director/CEO Financial Report for the Fiscal Year Ended Reporting in Financial for Excellence Achievement Text38:Washington Government Finance Officers Association September 15, 2020 Agenda Packet Page 100 of 294 vii Introductory Section City of Bothell ORGANIZATIONAL CHART Bothell Citizens Mayor & City CouncilLegislative Board & Comissions Municipal Court Judge City Manager Legal Department Administration Human ResourceSafety Public Works Administration & Sustainability Administration • Safety & Support Services • Administrative Support • PIO Engineering • Capital • Development Review • Transportation • Utilities • Surface Water Maintenance & Operations • Streets • Water & Sewer • Storm • Utility Billing Fleet & Facilities Community Development Department Fire Department Parks & RecreationDepartment ExecutiveDepartment Assistant City Manager InformationServices FinanceDepartment Police Department Administration Fire Prevention/ Community Risk Reduction • Code Compliance • Public Education Support Response Operations • Suppression & EMS • Training • Special Operations Building & Code Enforcement Permit Services Planning & Development Long-Range Planning Customer Service Center Recreation Planning & Grants Maintenance & Operations Administration AdministrationOffice of the City Manager City Clerk Economic Development Communications Tourism Emergency Management Operations Application Services GIS Services Accounting & Financial Reporting Payroll & Position Budgeting Budget & Fiscal Strategy Capital Facilities Plan Administration • Risk Management • Professional Standards • Evidence Support Services • Dispatch • Records Operations • Patrol Special Operations • Traffic • Training • Animal Control • Detention & Correctionss Investigations • Major Crimes • Crime Analysis • School Resource Officer September 15, 2020 Agenda Packet Page 101 of 294 viii Introductory Section City of Bothell COUNCIL MEMBERS L to R back row, Jeanne Zornes, Mason Thompson, James McNeal, Tom Agnew, Liam Olsen, Rosemary McAuliffe, Davina Duerr COUNCIL MEMBER Liam Olsen, Mayor Jeanne Zornes, Deputy Mayor Mason Thompson, Council Member Rosemary McAuliffe, Council Member James McNeal, Council member Davina Duerr, Council Memner Tom Agnew, Council Member EXECUTIVE STAFF (OFFICIALS AS OF DECEMBER 31, 2019) Jennifer Phillips, City Manager Kellye Mazzoli, Assistant City Manager Chris Bothwell, Finance Director Mathew Pruitt, Human Resources Director Paul Byrne, City Attorney Michael Kattermann, Community Development Director Bruce Kroon, Fire Chief Kenneth Seuberlich, Police Chief Erin Leonhart, Public Works Director Nik Stroup, Parks & Recreation Director September 15, 2020 Agenda Packet Page 102 of 294 September 15, 2020 Agenda Packet Page 103 of 294 AUDITOR’S LETTER September 15, 2020 Agenda Packet Page 104 of 294 Office of the Washington State Auditor Pat McCarthy INDEPENDENT AUDITOR’S REPORT ON FINANCIA L STATEMENTS August 31, 2020 Mayor and City Council City of Bothell Bothell, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Bothell, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounti ng principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing September 15, 2020 Agenda Packet Page 105 of 294 Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the f inancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion s In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Bothell, as of December 31, 2019, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Matters of Emphasis As discussed in Note 23 to the financial statements, in February 2020, a state of emergency was declared that could have a negative financial effect on the City. Management’s plans in response to this matter are also described in Note 23. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information September 15, 2020 Agenda Packet Page 106 of 294 Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements as a whole. The combining financial statements and supplemental information are presented for the purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including co mparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the Uni ted States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements as a whole. The Introductory and Statistical Sections are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we will also issue our report dated August 31, 2020, 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, co ntracts and grant September 15, 2020 Agenda Packet Page 107 of 294 agreements and other matters. That report will be issued under separate cover in the City’s Single Audit Report. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Sincerely, Pat McCarthy State Auditor Olympia, WA September 15, 2020 Agenda Packet Page 108 of 294 MANAGEMENT'SDISCUSSION AND ANALYSIS September 15, 2020 Agenda Packet Page 109 of 294 1 Management's Discussion & Analysis City of Bothell The discussion and analysis section of the City of Bothell’s Comprehensive Annual Financial Report (CAFR) is prepared by City management to provide CAFR users an overview of the City’s financial activity and performance for the fiscal year ended December 31, 2019. Users are encouraged to consider Management’s Discussion and Analysis in conjunction with additional information furnished in the letter of transmittal (Introductory Section) and the City’s financial statements (Financial Section). 2019 FINANCIAL HIGHLIGHTS „The City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the end of year by $660,354,740 (net position). Of this amount, $9,893,181 represents unrestricted net position, which may be used to meet the government’s ongoing obligations to citizens and creditors. „The City’s total net position decreased $16,101,536 mainly because of the substantial depreciation generated in governmental capital assets. „At the close of the fiscal year, the City’s governmental funds reported combined fund balances of $55,063,553 an increase of $28,273,859 compared to the prior year as result of the issuance of $25,754,362 in public safety bonds. Approximately 13% of this amount ($7,281,206) is available for spending at the City’s discretion (unassigned fund balance). „At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) for the general fund was $9,009,086, or approximately 16.7% of total general fund expenditures. „The City’s total outstanding long-term debt increased by $21,885,240 due to the issuance of public safety bonds. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis provided here are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) the notes to the financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves. GOVERNMENT-WIDE FINANCIAL STATEMENTS The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The statement of net position presents financial information on all of the City’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). For the City of Bothell, both of the government-wide statements distinguish functions that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). Governmental activities include most of the City’s basic services such as general government, public safety, highways and streets, parks and recreation, September 15, 2020 Agenda Packet Page 110 of 294 2 Management's Discussion & Analysis City of Bothell and development services. Sales, business, and property taxes finance most of these activities. Business-type activities, on the other hand, are services the City provides for a fee. Customers pay based on their actual usage. Business-type activities include water, sewer, and storm & surface water. The government-wide financial statements include not only the City of Bothell itself, but also its blended component unit COB Properties, a nonprofit corporation, which accounts for the activities of the city hall lease revenue bond issuance, debt services, and maintenance. Government-wide financial statements are located in Financial Section of this report. FUND FINANCIAL STATEMENTS A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Bothell, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in assessing a government’s near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains twelve individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Capital Improvements Fund, Public Safety Capital Fund, and the Arterial Street Fund, which are considered to be major funds. Data from the other eight governmental funds are combined into a single aggregated presentation. Individual fund data for each of these governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report. The basic governmental fund financial statements can be found in the Financial Section of this report. Proprietary Funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, sewer, and storm and surface water activities. Internal service funds are an accounting method used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its Equipment Rental, Self Insurance, and Asset Replacement functions. The internal service funds predominately benefit governmental rather than business-type functions, and therefore they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for each of the enterprise funds. Conversely, internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds are provided in the form of combining statements in the combining September 15, 2020 Agenda Packet Page 111 of 294 3 Management's Discussion & Analysis City of Bothell and individual fund statements and schedules section of this report. The fiduciary fund financial statements are eliminated in 2019, due to the implementation of GASB 84 Fiduciary Activities (Refer to Note 22). Notes to the Financial Statements. The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statement are presented in the Financial Section of this report immediately following the basic financial statements. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information concerning the City’s progress in funding its obligation to provide pension and OPEB benefits to its employees, and a schedule of revenues, expenditures, and changes in fund balance for the City’s general fund. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds, and a statistical section containing ten years of economic condition reporting are presented immediately following the required supplementary information. GOVERNMENT-WIDE OVERALL FINANCIAL ANALYSIS STATEMENT OF NET POSITION The statement of net position serves as a useful indicator of the City’s financial position. As of December 31, 2019, the City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $660,354,740 Net investments in capital assets (e.g. land, buildings, machinery, and equipment) are by far the largest portion of the City’s net position (93%), less any debt used to acquire those assets that is still outstanding. The City uses capital assets to provide services to citizens - consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The following is a condensed version of the government-wide statement of net position for 2019 compared to 2018. The City’s ($9,884,774) in unrestricted governmental net position is the result of net OPEB liabilities of $6,092,981. September 15, 2020 Agenda Packet Page 112 of 294 4 Management's Discussion & Analysis City of Bothell City of Bothell's Net Position 2019 2018 2019 2018 2019 2018 Current and other assets $75,456,736 $44,475,183 $22,391,565 $22,367,914 $97,848,301 $66,843,097 Capital assets 658,597,128 688,410,322 62,327,861 61,252,267 720,924,989 749,662,589 Total assets 734,053,864 732,885,505 84,719,426 83,620,181 818,773,292 816,505,686 Deferred outflows of resources 3,845,701 2,813,571 300,548 264,555 4,146,249 3,078,126 Long-term liabilities 129,921,951 110,878,573 17,102,691 18,136,171 147,024,643 129,014,744 Other liabilities 6,247,725 5,620,566 581,188 826,717 6,828,912 6,447,283 Total liabilities 136,169,676 116,499,139 17,683,880 18,962,888 153,853,555 135,462,028 Deferred inflows of resources 8,141,888 7,116,288 569,356 549,322 8,711,244 7,665,610 Net position Net investment in capital assets 571,700,385 598,724,468 45,672,414 43,768,023 617,372,799 642,492,492 Restricted 31,772,391 28,308,719 1,316,369 1,316,369 33,088,760 29,625,088 Unrestricted (9,884,774)(14,949,438) 19,777,955 19,288,134 9,893,181 4,338,696 Total net position $593,588,002 $612,083,749 $66,766,738 $64,372,526 $660,354,740 $676,456,275 Total Primary Government Business-Type Activities Governmental Activities At the end of the current fiscal year, the City is able to report positive balances in all reported categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Net investment in capital assets Restricted Unrestricted Thousands City of Bothell Net Position 2018 2019 September 15, 2020 Agenda Packet Page 113 of 294 5 Management's Discussion & Analysis City of Bothell The City’s overall net position decreased $16,101,536 from the prior fiscal year including the change in net position for operational reasons and for the implementation of GASB 73 and GASB 84. The reasons for this overall decrease are discussed in the following sections for governmental activities and business-type activities. An additional portion of the City’s net position (5%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $9,893,181 is unrestricted and may be used to meet the government’s ongoing obligations to its citizens and creditors. CHANGES IN NET POSITION The following table reflects increases or decreases in net position resulting from the City’s operating activities. The table shows revenues, expenses, and related changes in net position for the governmental activities separate from the business-type activities for 2019 and 2018. Bothell’s net position from operations decreased citywide by $16,445,947 during 2019. The reasons for this overall decrease are discussed in the following sections for governmental activities and business-type activities. Governmental Activities. Governmental activities from operations decreased the City’s net position by $18,840,160. The ending net position was increased by $344,413 due to the implementation of GASB 73 Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and 84 Fiduciary Activities (Refer to Note 22). Governmental activities account for 90.5% of the City’s net position. The decrease in the overall net position of governmental activities is the result of depreciation (Refer to Note 6), and increased public safety personnel costs. Changes in Net Position Governmental Activities Business-Type Activities Total Primary Government Governmental Activities Business-Type Activities Total Primary Government Revenues Program revenues Charges for services $22,052,440 $21,577,950 $43,630,390 $26,171,701 $21,739,505 $47,911,206 Operating grants and contributions 1,427,294 113,714 1,541,008 466,712 114,516 581,228 Capital grants and contributions 10,305,181 426,278 10,731,460 7,261,623 738,591 8,000,214 General revenues Property tax 23,179,428 23,179,428 17,500,847 17,500,847 Excise tax 23,107,676 23,107,676 21,868,524 21,868,524 Business tax 7,570,286 7,570,286 7,560,793 7,560,793 Interest and investment earnings 1,448,679 7,998 1,456,677 740,880 80,482 821,362 Miscellaneous 785,683 785,683 793,665 793,665 Transfers 412,566 412,566 Total revenues 90,289,234 22,125,940 112,415,174 82,364,747 22,673,094 105,037,840 Program expenses including indirect expenses General government 18,481,329 18,481,329 15,736,695 15,736,695 Security of persons and property 31,280,308 31,280,308 27,382,168 27,382,168 Physical environment 2,656,681 2,656,681 2,750,098 2,750,098 Transportation 47,442,708 47,442,708 46,463,697 46,463,697 Economic environment 3,493,273 3,493,273 8,577,058 8,577,058 Culture and recreation 2,238,693 2,238,693 2,616,511 2,616,511 Interest and fiscal charges 3,536,401 3,536,401 2,948,818 2,948,818 Transfers 412,566 412,566 Water 5,445,506 5,445,506 4,862,936 4,862,936 Sewer 8,084,249 8,084,249 7,088,546 7,088,546 Storm & surface water 5,789,406 5,789,406 5,696,172 5,696,172 Total expenses 109,129,394 19,731,727 128,861,122 106,475,044 17,647,653 124,122,697 Excess (deficiency)(18,840,160)2,394,213 (16,445,947)(24,110,297)5,025,441 (19,084,857) Transfers Change in net position ($18,840,160)$2,394,213 ($16,445,947)($24,110,297)$5,025,441 ($19,084,858) Net position beginning $612,083,749 $64,372,526 $676,456,275 $640,217,064 $59,347,085 $699,564,150 Restatement per GASB 75 implementation (see note 9)(4,023,017)($4,023,017) Restatement per GASB 73 & 84 implementation (see note 22)344,413 $344,413 Net position ending $593,588,002 $66,766,738 $660,354,740 $612,083,750 $64,372,526 $676,456,275 20182019 September 15, 2020 Agenda Packet Page 114 of 294 6 Management's Discussion & Analysis City of Bothell $500,000 $5,500,000 $10,500,000 $15,500,000 $2 0,500,000 $25,500,000 $3 0,500,000 $35,500,000 $40,500,000 $45,500,000 General Government Security of Persons & Property Physical Environment Transportation Economic Environment Culture and Recreation Interest on Long Term Debt Expenses and Program Revenues - Governmental Activities Revenues Expenses Business-Type Activities. For the City’s business-type activities, the results for the current fiscal year were positive in that overall net position increased to reach an ending balance of $66,766,738. The total increase in net position for business-type activities was $2,394,213 or 3.72% higher than the prior fiscal year. The growth, in large part, is attributable to an average 3% rate increase throughout all three utility funds - Water, Sewer, and Storm and Surface Water. FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use, as they represent the portion of fund balance which has not yet been limited for use for particular purposes by the City Council. At end of 2019, the City’s governmental funds reported combined fund balances of $55,063,553 an increase of $28,273,859 compared to the prior year. This increase is due mainly to the issuance of Public Safety Bonds (25,754,362) and property tax revenue, which was up 32% ($5,678,581) over 2018. Approximately 13% of fund balance ($7,281,206) constitutes unassigned fund balance, which is available for spending at the government’s discretion. The remainder of the fund balance is either restricted, committed, or assigned to indicate that it is 1) restricted for particular purposes ($45,986,774), 2) committed for particular purposes ($84,442), or 3) assigned for particular purposes ($1,711,130). September 15, 2020 Agenda Packet Page 115 of 294 7 Management's Discussion & Analysis City of Bothell 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 Restricted Committed Assigned Unassigned: General Fund Components of Fund Balance 2018 2019 The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the general fund was $7,281,206, while total fund balance increased by $104,276 due to the merge of Firefighter’s Pension Fund previously reported in Fiduciary Fund (Refer Note 22). As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total General Fund expenditures. Unassigned fund balance represents 89% of total General Fund balance and 16.7% of total General Fund expenditures. The Capital Improvements Fund, a major fund, decreased $10,110 in fund balance as a result of the decline in real estate sales. In comparison with 2018, real estate excise tax revenue dropped by 4,068,086 or 41.6%. The Public Safety Capital Fund, created in 2019 as the result of a voter-approved bond measure to fund construction of two new fire stations, ended the year with a fund balance of $25,281,015. The project is currently under the design phase, and scheduled to be completed in 2024. The Arterial Street Fund, the remaining major governmental fund, decreased fund balance by $252,582 during the current year, bringing the year-end fund balance to $5,357,161. This decrease was a result of reduced impact and mitigation fee revenues. All other governmental funds experienced an increase in fund balance of $3,151,260. The increase was due mainly to the creation of the Public Safety Levy Fund, which was the result of a voter-approved 2018 levy to increase financial resources for public safety operations 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000 Restricted Committed Assigned Unassigned: Other Governmental Funds Components of Fund Balance 2018 2019 September 15, 2020 Agenda Packet Page 116 of 294 8 Management's Discussion & Analysis City of Bothell Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the Water Fund at the end of the year was $4,667,211 the Sewer Fund was $7,729,912 and the Storm & Surface Water Fund was $7,380,832. The total growth in net position for all three funds was $465,079, $223,305 and $1,705,829, respectively. As noted earlier in the discussion of business-type activities, the increase for water, sewer, and storm & surface water rates resulted in the growth of the unrestricted net position. GENERAL FUND BUDGETARY HIGHLIGHTS The City of Bothell adopts a biennial budget for its General Fund. During the 2019 fiscal year, the Council modified the City’s adopted general fund budget on two occasions, as a recipient of grant funding, resulting in a net increase of $12,000 to the General Fund. Despite sales tax collections lagging behind budgeted amounts, sales tax revenue ended the year 6% higher than 2018. Utility taxes were 2.5% lower than 2018, and building permits were 27.4% lower in 2019. The City is estimating an $800,000 shortfall in utility tax revenues for the biennium. In 2019, the City received unbudgeted revenue of $723,000 as the result of a new program, Ground Emergency Medical Transport (GEMT), and is expected to receive a total of $1,250,000 by the end of the biennium. General Fund expenditures ended the year less than projected (1.9%) mainly due to unfilled vacant positions. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of December 31, 2019, amounts to $720,976,753 (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery, equipment, vehicles, park facilities, roads, highways, bridges, utility structures and construction in progress. The total decrease in capital assets for 2019 was 3.82%. Major capitalization and additional information on the City’s capital assets can be found in the Financial Section, Note 6 of the Basic Financial Statements. City of Bothell's Capital Assets (net of depreciation) 2019 2018 2019 2018 2019 2018 Land and land improvements $71,978,308 $67,456,592 $285,302 $285,302 $72,263,609 $67,741,894 Infrastructure right-of-way 81,888,608 81,833,639 1,935,868 1,935,868 83,824,476 83,769,507 Buildings 12,087,383 12,464,987 6,895,825 6,712,218 18,983,207 19,177,206 Capital lease - City Hall 46,842,644 47,872,153 46,842,644 47,872,153 Improvements 48,818,682 51,609,783 49,926,835 49,813,452 98,745,517 101,423,235 Infrastructure 364,486,722 400,691,624 364,486,722 400,691,624 Vehicles 4,132,761 4,505,192 88,466 79,137 4,221,227 4,584,328 Machinery & equipment 1,698,296 1,696,334 1,061,620 1,186,827 2,759,917 2,883,162 Construction in progress 23,252,205 16,549,318 2,133,946 1,239,464 25,386,151 17,788,782 Work of art 121,519 127,366 121,519 127,366 Intangible asset 3,290,000 3,603,333 3,290,000 3,603,333 Total $658,597,128 $688,410,322 $62,327,861 $61,252,267 $720,924,989 $749,662,589 TotalGovernmental Activities Business-Type Activities September 15, 2020 Agenda Packet Page 117 of 294 9 Management's Discussion & Analysis City of Bothell Long-term Debt. In 2019, the City’s total debt increased by $21,885,240 (20.4%). The City paid debt principal of $3,673,810 in accordance with debt schedules, and amortized bond premiums of $249,699 using the straight-line method. In addition, the City had a major new debt issuance of $25,754,362 for Public Safety Bonds approved by voters in 2018. Washington State statute limits the amount of general obligation debt issued by a unit of government to 7.5% of the total assessed value of taxable property located within that government’s boundaries. As of January 1, 2019, the City’s outstanding net debt was $112,399,891. At the end of 2019, the City’s total long-term debt was $129,055,338, including bonded debt outstanding of $76,370,621 (general obligation bonds and utility revenue bonds). Of this amount, $60,307,219 of the debt is backed by the full faith and credit of the government. The remainder of the City’s long-term obligations is comprised of public trust fund loans, capital leases, and utility revenue bonds. Additional information regarding the City’s long-term debt is located in the Financial Section, Note 13. Looking Forward to 2020 and BeyondIn December 2019, City Council approved a 1% property tax increase for 2020. State law (Initiative 747) limits the increase of property tax from the actual amount collected in the previous year to 1%. Effective January 1, 2020, fees increased by 1.7%. City fees increase annually on January 1 of each year. Fees are increased based upon the June-to-June Consumer Price Index (CPI-W), or by the amount required to continue to ensure full cost recovery. For 2020, City Council approved a 3% utility rate increase in each of the City’s utility funds to pay for utility expenses and capital projects identified in the City’s 2019-2025 Capital Facilities Plan. The City’s utility funds remain financially stable due to sound operational and project management, coupled with continued adoption of annual rate increases that keep pace with inflation and capital demands. Fiscal priorities for the upcoming year will include: addressing the structural General Fund deficit during the 2021-2022 budget development; proceeding with the construction of two new fire stations; and continued focus on selling the remaining five City-owned downtown parcels. The effect of the coronavirus pandemic on the City’s operations will also be a top priority in evaluating the impact and taking steps to mitigate effect of lost revenues. Requests for InformationThis financial report is designed to provide a general overview of the City of Bothell’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: City of Bothell Finance Director, 18415 101st Avenue NE, Bothell, WA 98011. City of Bothell's Outstanding Debt 2019 2018 2019 2018 2019 2018 General obligation debt $60,307,219 $35,801,104 $60,307,219 $35,801,104 Capital lease 46,623,437 48,016,609 $46,623,437 48,016,609 Loans 5,469,235 5,868,142 592,046 637,562 $6,061,281 6,505,704 Utility revenue bonds 16,063,401 16,846,683 $16,063,401 16,846,683 Total $112,399,891 $89,685,854 $16,655,447 $17,484,245 $129,055,338 $107,170,098 TotalGovernmental Activities Business-Type Activities September 15, 2020 Agenda Packet Page 118 of 294 September 15, 2020 Agenda Packet Page 119 of 294 BASIC FINANCIALSTATEMENTS September 15, 2020 Agenda Packet Page 120 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 1 Statement of Net PositionDecember 31, 2019 Governmental Activities Business-Type Activities Total ASSETS Cash and cash equivalents 7,652,904$ 3,291,940$ 10,944,844$ Investments 44,773,693 14,712,038 59,485,730 Receivables (net)11,185,655 3,071,218 14,256,873 Taxes receivable 277,882 277,882 Reserved assets:Deposit held in trust 277,837 277,837 Investment 1,316,369 1,316,369 Capital assets: Non-depreciable 177,119,121 4,355,115 181,474,236 Depreciable, net 481,478,007 57,972,746 539,450,753 Net pension asset 11,288,765 11,288,765 Total assets 734,053,864 84,719,426 818,773,291 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows - pension 3,769,366 300,548 4,069,914 Deferred outflows - other postemployment benefits (OPEB)76,335 76,335 Total deferred outflows of resources 3,845,701 300,548 4,146,249 LIABILITIES Accounts payable 5,969,888 581,188 6,551,076 Unearned revenue 277,837 277,837 Long-term liabilities (see Note 13) Due within one year 8,745,371 1,048,825 9,794,196 Due in more than one year 108,693,413 15,796,649 124,490,062 Other postemployment benefits (OPEB) Due within one year 197,584 197,584 Due in more than one year 5,895,397 5,895,397 Net pension liability - due in more than one year 6,390,187 257,217 6,647,404 Total liabilities 136,169,676 17,683,880 153,853,555 DEFERRED INFLOWS OF RESOURCES Deferred inflows - pension 7,447,890 569,356 8,017,246 Deferred inflows - advanced grant 693,998 693,998 Total deferred inflows of resources 8,141,888 569,356 8,711,244 NET POSITION Net investment in capital assets 571,700,385 45,672,414 617,372,799 Restricted for: Net pension asset 11,288,765 11,288,765 Transportation 5,357,161 5,357,161 Parks & Recreation 3,373,942 3,373,942 Capital projects 6,375,688 6,375,688 Street maintenance 1,521,086 1,521,086 Drug forfeitures 119,549 119,549 Fire impact fees 272,264 272,264 Public safety levy 2,343,353 2,343,353 Debt service 1,316,369 1,316,369 Firefighter's Pension 350,154 350,154 Cemetery (permanently restricted)16,321 16,321 Other purpose 754,108 754,108 Unrestricted (deficit)(9,884,774) 19,777,955 9,893,181 Total net position 593,588,002$ 66,766,738$ 660,354,740$ Primary Government September 15, 2020 Agenda Packet Page 121 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 2 Statement of ActivitiesFor the Year Ended December 31, 2019 Operating Capital Primary Government Charges for Grants and Grants and Governmental Business-Type Functions/program Expenses Services Contributions Contributions Activities Activities Total Primary government: Government activities: General government 19,081,399$ 7,453,082$ 227,611$ (11,400,706)$ (11,400,706)$ Security of persons and property 29,488,233 6,584,362 1,027,112 (21,876,759) (21,876,759) Physical environment 2,657,249 1,866,979 298 (789,971) (789,971) Transportation 48,597,440 439,050 150,323 10,121,403 (37,886,665) (37,886,665) Economic environment 3,503,314 5,421,780 1,918,465 1,918,465 Culture and recreation 2,265,358 287,188 21,950 183,778 (1,772,442) (1,772,442) Interest 3,536,401 (3,536,401) (3,536,401) Total governmental activities 109,129,394 22,052,440 1,427,294 10,305,181 (75,344,479) (75,344,479) Business-type activities: Water 5,445,506 5,873,078 257 118,028 545,857 545,857 Sewer 8,084,249 8,338,855 278 44,314 299,198 299,198 Storm & surface water 5,789,406 7,366,017 113,179 263,936 1,953,726 1,953,726 Total business-type activities 19,319,161 21,577,950 113,714 426,278 2,798,781 2,798,781 Total primary government 128,448,556 43,630,390 1,541,008 10,731,460 (75,344,479) 2,798,781 (72,545,697) General Revenues: Property tax 23,179,428 23,179,428 Excise tax 23,107,676 23,107,676 Business tax 7,570,286 7,570,286 Interest and investment earnings 1,448,679 7,998 1,456,677 Miscellaneous 785,683 785,683 Transfers 412,566 (412,566) Total general revenues and transfers 56,504,319 (404,568) 56,099,750 Change in net position (18,840,160) 2,394,213 (16,445,947) Net position - beginning 612,083,749 64,372,526 676,456,275 Restatement per GASB 73 & 84 implementation (see note 22)344,413 344,413 Net position - ending 593,588,002$ 66,766,738$ 660,354,740$ Program Revenues Changes in Net Position Net (Expense) Revenues and September 15, 2020 Agenda Packet Page 122 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 3 Balance SheetGovernmental FundsDecember 31, 2019 Special Revenue Fund General Arterial Street Capital Improvements Public Safety Capital Other Governmental Funds Total Governmental Funds ASSETS Current cash & cash equivalents 3,245,683$ 576,694$ 1,940,561$ 285,504$ 1,121,929$ 7,170,372$ Investments 5,572,735 4,800,000 1,600,000 25,026,778 6,674,179 43,673,693 Receivables (net of allowances) Taxes 277,882 277,882 Accounts receivable 1,874,205 95,041 1,170 1,970,416 Due from other governmental units 3,381,875 5,533,221 150,602 9,065,697 Total assets 14,352,381$ 5,376,694$ 9,168,823$ 25,312,282$ 7,947,880$ 62,158,059$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 775,186.62 1,846,418.39 31,266.27 59,767.04 2,712,638.32 Deposits payable 591,906 591,906 Due to other governmental units 140,079 30,586 170,665 Payroll payable 2,039,977 184,941 2,224,918 Total liabilities 3,547,148 1,877,005 31,266 244,708 5,700,127 Deferred Inflows of Resources Unavailable revenue-property tax, service fees & impact fees 680,849 19,533 700,382 Unavailable revenue-advanced grant 693,998 693,998 Total deferred inflows of resources 680,849 19,533 693,998 1,394,379 Fund balances: Restricted 1,115,298 5,357,161 6,597,820 25,281,015 7,635,479 45,986,774 Committed 16,750 67,692 84,442 Assigned 1,711,130 1,711,130 Unassigned 7,281,206 7,281,206 Total fund balances 10,124,384 5,357,161 6,597,820 25,281,015 7,703,172 55,063,553 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 14,352,381$ 5,376,694$ 9,168,823$ 25,312,282$ 7,947,880$ 62,158,059$ Capital Projects Fund September 15, 2020 Agenda Packet Page 123 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 4 Reconciliation of the Governmental Funds Balance Sheet To the Statement of Net PositionDecember 31, 2019 Total fund balances for the governmental funds 55,063,553$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources, and therefore are not reported in the governmental funds. Non-depreciable assets 177,119,121 Depreciable assets (net)481,478,007 658,597,128 Deferred inflows of resources in the governmental funds are unavailable revenue in the governmental activities in the statement of net position. Unavailable revenue-property tax & impact fees 700,382 Pension fund used in governmental activities are not financial resources, and therefore are not reported in the governmental funds. Pension assets 11,288,765 Deferred outflows - pension 3,769,366 Deferred outflows - OPEB 76,335 Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Internal service fund net position are:1,462,315 Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period, and accordingly are not reported as fund liabilities. Compensated absences (2,942,892) Other post-employment benefits payable (6,092,981) Pollution remediation liability (2,096,000) Pension liability (6,390,187) Bonds and loan payable (112,399,891) (129,921,951) Pension fund used in governmental activities are not financial resources, and therefore are not reported in the governmental funds. Deferred inflows - pension (7,447,890) Total net position of governmental activities 593,588,002$ September 15, 2020 Agenda Packet Page 124 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 5 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental FundsFor the Year Ended December 31, 2019 Special Revenue Fund General Arterial Street Capital Improvements Public Safety Capital Other Governmental Funds Total Governmental Funds REVENUES Taxes 36,146,359$ 5,707,008$ 10,589,939$ 52,443,307$ Licenses and permits 3,765,483 496,552 60,518 4,322,553 Intergovernmental revenues 1,896,589 8,606,845 1,052,510 11,555,943 Charges for services 10,581,044 2,171,233 714,764 13,467,041 Fines and forfeitures 200,325 17,050 217,375 Interest earnings 1,421,901 26,778 1,448,679 Contributions 32,841 130,137 162,978 Other revenue 566,419 5,000 3,804 575,223 Total revenue 54,610,961 2,171,233 14,945,542 26,778 12,438,586 84,193,100 EXPENDITURES Current General government 12,986,607 725,112 13,711,719 Security of persons and property 28,578,492 1,741,052 30,319,544 Transportation 5,176,935 1,571,336 3,103,324 9,851,596 Physical environment 19,313 19,313 Economic environment 4,679,029 4,679,029 Culture and recreation 2,406,418 2,406,418 Debt service - Debt issue cost 247,466 1,200 248,666 Debt service - principal 1,772,461 1,140,000 2,912,461 Debt service - interest 1,918,440 1,445 1,554,269 3,474,153 Capital outlay 22,019 13,545,330 251,214 5,349 13,823,912 Total expenditures 53,868,814 18,807,567 500,124 8,270,306 81,446,811 Excess (deficiency) of revenue over expenditures 742,147 2,171,233 (3,862,025) (473,346) 4,168,280 2,746,289 OTHER FINANCING SOURCES (USES) Loan 54,388 54,388 Proceeds from public safety bonds 23,235,000 23,235,000 Proceeds from public safety bond premium 2,519,362 2,519,362 Transfer in 55,873 5,548,313 1,694,913 7,299,099 Transfer out (1,038,158) (2,423,815) (1,750,786) (2,711,932) (7,924,691) Total other financing sources (982,285) (2,423,815) 3,851,915 25,754,362 (1,017,020) 25,183,157 Net change in fund balances (240,137) (252,582) (10,110) 25,281,015 3,151,260 27,929,446 FUND BALANCES - JANUARY 1, 2019 10,020,108 5,609,743 6,607,931 4,551,912 26,789,694 Restatement per GASB 73 & 84 implementation (see note 22)344,413 344,413 FUND BALANCES - DECEMBER 31, 2019 10,124,384$ 5,357,161$ 6,597,820$ 25,281,015$ 7,703,172$ 55,063,553$ Capital Projects Fund September 15, 2020 Agenda Packet Page 125 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 6 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of ActivitiesFor The Year Ended December 31, 2019 Net change in fund balances - total governmental funds 27,929,446$ The change in net position reported for governmental activities in the statement of activities is different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets are depreciated over their estimated useful lives. Changes in unavailable revenue (118,810) Donated capital assets 1,570,670 Expenditures for capital assets 13,823,912 Capital asset adjustments (1,785,553) Depreciation (44,248,972) Repayment of bond principal is an expenditure in governmental funds, but the repayment reduces long-term liabilities, resulting in an increase in the net position. Debt principal payments 2,908,294 Debt issued (25,808,749) Premium amortization on the bonds decreases long-term liabilities, resulting in an increase in the net position Capital lease premium 78,172 LIFT bonds premium 85,484 2013 GO bonds premium 22,762 Long-term expenses reported in the statement of activities do not require the use of resources and therefore are not reported as expenditures in governmental funds: Change in compensated absences payable 138,292 Change in other post-employment benefits payable 403,362 Change in pollution remediation liability 1,554,000 Pension liabilities 2,654,009 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net (expense) of the internal service funds and internal balances are reported with governmental activities.1,953,521 Change in net position of governmental activities (18,840,160)$ September 15, 2020 Agenda Packet Page 126 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 7 Statement of Net PositionProprietary FundsDecember 31, 2019 Governmental Activities Water Sewer Storm & Surface Water Total Internal Service Funds ASSETS Current assets Cash and cash equivalents 588,851$ 537,559$ 2,165,531$ 3,291,940$ 482,533$ Investments 3,790,215 5,707,503 5,214,320 14,712,038 1,100,000 Accounts receivable 786,413 1,729,730 364,585 2,880,728 149,542 Due from other governments 257 278 189,955 190,490 Reserved assets: Deposit held in trust 277,837 Investment-revenue bond reserve 109,785 292,497 914,086 1,316,369 Total current assets 5,275,520 8,267,568 8,848,477 22,391,565 2,009,912 Non-current assets Capital assets not being depreciated: Land 122,175 163,126 285,302 Right of way 1,935,868 1,935,868 Construction in progress 161,869 880,475 1,091,601 2,133,946 Capital assets being depreciated: Intangible assets 141,538 122,978 146,663 411,179 Buildings 2,729,301 4,108,586 2,304,125 9,142,012 35,285 Improvements other than buildings 27,582,462 15,798,968 35,339,506 78,720,936 1,566,847 Equipment 10,464 1,812,988 275,951 2,099,404 2,202,841 Vehicles 30,457 30,457 250,920 311,834 9,642,360 Less accumulated depreciation (11,599,579) (9,472,753) (11,640,287) (32,712,619) (7,647,147) Total non-current assets 19,178,687 13,444,826 29,704,348 62,327,861 5,800,187 Total assets 24,454,207 21,712,394 38,552,825 84,719,426 7,810,099 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows - pension 74,601 67,810 158,137 300,548 54,357 Total deferred outflows of resources 74,601 67,810 158,137 300,548 54,357 LIABILITIES Current liabilities Accounts payable 259,033 23,019 54,642 336,693 64,680 Payroll payable 58,124 57,145 129,226 244,495 48,270 Compensated absences 50,030 48,048 91,950 190,028 32,831 Due to other governments Interest payable 156,810 Current portion of loans payable 45,516 45,516 Current portion of revenue bonds payable, net 173,345 76,047 563,890 813,281 Total current liabilities 540,531 204,258 885,224 1,630,013 302,592 Non-current liabilities Loans payable 546,530 546,530 Revenue Bonds Payable, net 3,213,492 1,443,140 10,593,487 15,250,120 Unearned revenue 277,837 Pension Liabilities 64,047 57,128 136,042 257,217 52,369 Total non-current liabilities 3,277,539 1,500,268 11,276,059 16,053,866 330,206 Total liabilities 3,818,071 1,704,527 12,161,282 17,683,880 632,798 DEFERRED INFLOWS OF RESOURCES Deferred inflows - pension 141,891 127,629 299,836 569,356 112,487 Total deferred inflows of resources 141,891 127,629 299,836 569,356 112,487 NET POSITION Net investment in capital assets 15,791,850 11,925,639 17,954,925 45,672,414 5,800,187 Restricted for debt service 109,785 292,497 914,086 1,316,369 Unrestricted 4,667,211 7,729,912 7,380,832 19,777,955 1,318,984 Total net position 20,568,847$ 19,948,048$ 26,249,844$ 66,766,738$ 7,119,171$ Enterprise Funds Business-Type Activities September 15, 2020 Agenda Packet Page 127 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 8 Statement of Revenues, Expenses, and Changes in Fund Net PositionProprietary FundsFor the Year Ended December 31, 2019 Governmental Activities Water Sewer Storm & Surface Water Total Internal Service Funds OPERATING REVENUES Charges for services 5,800,406$ 8,302,201$ 6,620,617$ 20,723,225$ 4,009,788$ Other 72,672 36,654 745,400 854,726 193,273 Total operating revenue 5,873,078 8,338,855 7,366,017 21,577,950 4,203,061 OPERATING EXPENSES Administrative and general 892,691 1,316,497 2,564,502 4,773,690 2,844,939 Purchased water 1,727,957 1,727,957 Metro service 4,552,004 4,552,004 Maintenance and operations 872,235 735,281 1,229,368 2,836,885 566,486 Customer accounts 254,762 254,755 509,517 Taxes 774,039 577,580 334,464 1,686,083 Depreciation 812,736 598,221 1,293,237 2,704,194 1,146,549 Total operating expenses 5,334,420 8,034,340 5,421,571 18,790,331 4,557,974 OPERATING INCOME (LOSS)538,658 304,515 1,944,446 2,787,619 (354,913) NON-OPERATING REVENUES (EXPENSES) Investment income 556 1,445 5,997 7,998 1,818,352 Intergovernmental revenue 257 278 113,179 113,714 (473) Gain (loss) on disposition of capital assets 95,079 Revenue bonds interest (111,086) (49,910) (367,834) (528,830) (1,789,231) Total non-operating revenue (expense)(110,273) (48,187) (248,659) (407,119) 123,727 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS 428,385 256,329 1,695,787 2,380,501 (231,186) Transfers in 2,120,932 Transfers out (81,334) (77,338) (253,894) (412,566) (1,082,774) Capital contributions 118,028 44,314 263,936 426,278 CHANGE IN NET POSITION 465,079 223,305 1,705,829 2,394,213 806,972 NET POSITION - BEGINNING 20,103,768 19,724,744 24,544,014 64,372,526 6,312,199 NET POSITION - ENDING 20,568,847$ 19,948,048$ 26,249,844$ 66,766,738$ 7,119,171$ Enterprise Funds Business-Type Activities September 15, 2020 Agenda Packet Page 128 of 294 Basic Financial Statements City of Bothell The accompanying notes are an integral part of this statement 9 Statement of Cash FlowsProprietary FundsFor the Year Ended December 31, 2019 Governmental Activities Water Sewer Storm & Surface Water Total Internal Service Funds CASH FLOW FROM OPERATING ACTIVITIES Cash received from customers 5,762,862$ 8,155,460$ 7,073,243$ 20,991,566$ 4,099,977$ Cash paid to employees (1,065,196) (1,075,964) (2,255,258) (4,396,419) (1,044,168) Cash paid to suppliers for goods and services (2,789,512) (5,846,707) (1,833,586) (10,469,806) (3,755,978) Cash paid for taxes (774,039) (577,580) (334,464) (1,686,083) Net cash provided by operating activities 1,134,115 655,209 2,649,935 4,439,259 (700,169) CASH FLOW FROM NON-CAPITAL FINANCING ACTIVITIES Transfers out (81,334) (77,338) (253,894) (412,566) (1,082,774) Transfers in 2,120,932 Operating grants 257 278 113,179 113,714 4,233 Net cash provided from non-capital activities (81,077) (77,060) (140,715) (298,852) 1,042,391 CASH FLOW FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (1,791,374) (815,781) (1,172,634) (3,779,788) (845,446) Net capital lease 3,267,622 Construction cost payable Interest paid on capital debt (124,431) (55,956) (411,724) (592,112) (1,926,718) Capital contributions 118,028 44,314 263,936 426,278 Deposit held in trust 3,217 Proceeds from the sale of capital assets 113,777 Paid on revenue bond (150,000) (70,000) (500,000) (720,000) (1,315,000) Paid on capital debt (45,516) (45,516) Debt interest payable - (4,383) Net cash (used) by capital and related activities (1,947,777) (897,423) (1,865,938) (4,711,138) (706,931) CASH FLOW FROM INVESTING ACTIVITIES Purchase investments 600,000 371,593 971,593 400,000 Interest and dividends 556 1,445 5,997 7,998 Net cash provided by investing activities 600,556 1,445 377,590 979,591 400,000 Net increase (decrease) in cash and cash equivalents (294,183) (317,830) 1,020,872 408,860 35,291 Balances - January 1 883,034 855,388 1,144,659 2,883,080 447,242 Balances - December 31 588,851 537,559 2,165,531 3,291,940 482,533 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss)538,658 304,515 1,944,446 2,787,619 (354,913) Adjustments to reconcile operating income to net cash provided (used) by operating activities Depreciation expense 812,736 598,221 1,293,237 2,704,194 1,146,549 Change in assets and liabilities: Decrease (increase) in accounts receivable (110,618) (183,145) (364,585) (658,347) (103,308) Decrease (increase) in due from other governments 402 (250) 71,811 71,962 224 Increase (decrease) in non-capital accounts payable 11,350 (10,489) (201,522) (200,662) (1,421,961) Increase (decrease) in payroll payable 1,605 6,278 12,674 20,557 23,216 Increase (decrease) in due to other governments (65,424) (65,424) 9,315 Increase (decrease) in compensated absences payable 6,467 2,486 5,888 14,842 (18,748) Increase (decrease) in GASB 68 pension adjustments (61,061) (62,408) (112,014) (235,483) 19,457 Net cash provided by operating activities 1,134,115$ 655,209$ 2,649,935$ 4,439,259$ (700,169)$ Noncash investing, capital and financing activities increase (decrease) in fair value of investments Capital contributions from developers 70,130 25,500 227,088 322,718 - Enterprise Funds Business-Type Activities September 15, 2020 Agenda Packet Page 129 of 294 Notes to the Financial Statements 10 Basic Financial Statements City of Bothell Note 1 Summary of Significant Accounting Policies 11-18 Note 2 Compliance and Accountability 18-19 Note 3 Deposits and Investments 20-23 Note 4 Property Taxes 24 Note 5 Deferred Inflows and Outflows of Resources 25 Note 6 Capital Assets and Depreciation 26-28 Note 7 Pension Plans 29-40 Note 8 Other Employee Benefits 40-41 Note 9 Post-Employment Benefits Other than Pensions 41-43 Note 10 Contingencies 44 Note 11 Risk Management 44-45 Note 12 Interfund Activities 45-46 Note 13 Long-Term Debt 46-50 Note 14 Impact Fees 51 Note 15 Pollution Remediation Obligations 51-53 Note 16 Leases 53 Note 17 Blended Component Unit 54 Note 18 Health & Welfare 54-55 Note 19 Joint Ventures & Operations 55-57 Note 20 Governmental Fund Balances and Reconciliation to the Net Position 57-59 Note 21 Tax Abatement 59 Note 22 Accounting and Reporting Changes 59-60 Note 23 Subsequent Event 60 January 1, 2019 through December 31, 2019The accompanying notes are an itegral part of the enclosed financial statements.TABLE OF CONTENTSNOTES TO THE FINANCIAL STATEMENTS September 15, 2020 Agenda Packet Page 130 of 294 Notes to the Financial Statements 11<< BFS Table of Contents Basic Financial Statements City of Bothell January 1, 2019 through December 31, 2019The accompanying notes are an itegral part of the enclosed financial statements. A. DESCRIPTION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS The government-wide financial statements (the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component unit. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. B. REPORTING ENTITY The City is a municipal corporation operating under a Council-Manager form of government. The City’s major operations, as authorized under the laws of the State of Washington applicable to a non-charter code city, include planning & zoning, public safety, public works, recreation & culture, and utilities. The accounting and reporting policies of the City conform to Generally Accepted Accounting Principles (GAAP) and are regulated by the Washington State Auditor's Office. The City’s Comprehensive Annual Financial Report (CAFR) is prepared in accordance with Governmental Accounting Standards Board (GASB) and the following notes detail the City’s significant accounting policies. The City has implemented all GASB statements applicable for implementation in 2019. (Refer to Note 22 Accounting and Reporting Changes). The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended Component UnitThe City has one blended component unit, COB Properties. Blended component units are, in substance, part of the primary government’s operations, even though they are legally separate entities. Thus, blended component units are appropriately presented as funds of the primary government. Each discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the government (Refer to Note 17). C. BASIS OF PRESENTATION – GOVERNMENT-WIDE FINANCIAL STATEMENTS While separate government-wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from governmental funds and internal service funds, while business-type activities incorporate data from the government’s enterprise funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The City’s basic financial statements include both government- wide (reporting the City as a whole) and fund financial statements (reporting the City’s major funds). The government-wide financial statements categorize primary activities as either governmental or business-type. In the government-wide Statement of Net Position, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long- term debt and obligations. NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES September 15, 2020 Agenda Packet Page 131 of 294 Notes to the Financial Statements 12<< BFS Table of Contents Basic Financial Statements City of Bothell The components of the City’s net position are: net investment in capital assets, restricted net position, and unrestricted net position. The City first utilizes restricted resources to finance qualifying activities. Fiduciary funds are excluded from government-wide statements. The government-wide Statement of Activities reports both the gross and net cost of each of the City’s functions and business-type activities - general government, security of persons and property, physical environment, transportation, economic environment, mental and physical health, culture and recreation, water, sewer (wastewater), and storm drain (surface water). General government revenues (property taxes, retail sales & use taxes, business taxes, excise taxes, and other taxes) also support these functions. The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating, and capital grants. Program revenues must be directly associated with the functions or a business-type activity. D. BASIS OF PRESENTATION – FUND FINANCIAL STATEMENTS The fund financial statements provide information about the government’s funds, including its fiduciary funds and blended component unit. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. The following is a description of the governmental funds of the City: Governmental Funds „General fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. „Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes other than debt service or capital projects. „Capital project fund accounts for financial resources that are restricted, committed, or assigned for capital outlays (other than those financed by business- type/ proprietary funds). „Debt service funds are used to account for financial resources that are restricted, committed, or assigned to expenditures for principle and interest for debt. Proprietary Funds Proprietary fund measurement focuses on determining operating income, changes in net position, financial position, and cash flows. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services, and from producing and delivering goods in connection with a proprietary fund’s principle ongoing operation. The principal operating revenues of the City’s Water, Sewer, and Storm & Surface Water Funds are derived from charges to customers for sales and services. The Water, Sewer, and Storm & Surface Water Funds also recognize fees (operating revenue) intended to recover the cost of connecting new customers to the City’s utility systems. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and overhead, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The applicable, generally accepted accounting principles are similar to those used by businesses in the private sector. The following is a description of the proprietary funds of the City: September 15, 2020 Agenda Packet Page 132 of 294 Notes to the Financial Statements 13<< BFS Table of Contents Basic Financial Statements City of Bothell „Enterprise funds are required to be used (to account for operations) where a fee is charged to external users for goods or services and where the activity (a) is financed with debt that is solely secured by a pledge of the revenues; (b) has third party requirements that the cost of providing services, including capital costs, be recovered with fees and/ or charges; or (c) establishes fees and/ or charges based on a pricing policy designed to recover similar costs. „Internal service funds are used to account for the financing of goods or services provided to other City funds on a cost-reimbursement basis. Fiduciary FundsIn 2019, the City adopted GASB Statement 84, Fiduciary Activities. The objective to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. The Statement establishes criteria for identifying fiduciary activities: (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. Fiduciary activities should be based on the requirements of GASB 84 paragraphs 15-18. After conducting a thorough analysis, the City concluded that no current activity met the fiduciary criteria, and therefore, fiduciary fund reporting has been eliminated (Refer to Note 22 Accounting and Reporting Changes). MAJOR FUNDS Governmental ActivitiesGeneral FundThe City of Bothell’s General Fund accounts for all receipt and disbursement transactions of operations that are not accounted for in another fund. The General Fund includes police, fire, health and social services, parks and recreation, finance and administration, planning, building inspection, community development, parks maintenance, public works and engineering management, and services contracted to other agencies. The Firefighters Pension Fund is now reported in the General Fund, as referenced in Note 22 – Accounting and Reporting Changes. Arterial Street FundThe Arterial Street Fund is a special revenue fund used to account for proceeds of restricted revenues dedicated to street construction and transportation improvement projects. The main source of revenue is impact fees. Impact fees are transferred to the Capital Improvement Fund in a reimbursement manner for right-of-way acquisition, design and construction of roadways, sidewalks, street lighting, traffic signals, and landscaping. Capital Improvement FundThe Capital Improvement Fund accounts for special revenue dedicated to capital projects. The main sources of revenue are real estate excise taxes, mitigation fees, and grants. Public Safety Capital FundIn 2019, the City created the Public Safety Capital Fund to account for the proceeds of the 2019 Unlimited Tax General Obligation Bonds to construct, reconstruct, renovate and equip two fire stations, and to pay the costs of issuance and sale of the bonds. Business-Type ActivitiesWater FundThis fund is used to account for the provision of water service to a portion of the City. The City does not have its own water supply, but purchases water from the City of Seattle. All activities necessary to provide such service are accounted for in this fund, including administration, maintenance and operations, financing and debt service, and billing and collection. Funding for these activities is provided for by charges to residential and commercial water customers, permit fees, interest earnings, and rental fees. Water system construction was originally financed by revenue bonds and contributed capital. September 15, 2020 Agenda Packet Page 133 of 294 Notes to the Financial Statements 14<< BFS Table of Contents Basic Financial Statements City of Bothell Sewer FundThis fund is used to account for the provision of sanitary sewer service to a portion of the City. The City of Bothell does not operate a sewage treatment plant, but is connected to the King County Wastewater Treatment System for service on a contract basis. All activities necessary to provide service are accounted for in this fund, including administration, maintenance, financing and related debt service, and billing and collection. Funding for these activities is provided for by charges to residential and commercial customers, permit fees, interest earnings, and rentals. Sewer system construction was financed originally by a local improvement district, contributed capital, and revenue bonds. Storm & Surface Water FundThis fund is used to account for the provision of storm drain and surface water services throughout the City. This utility was established to promote public health, safety, and welfare with a comprehensive approach to surface and storm water problems. This comprehensive approach includes basin planning, land use regulation, facility construction, maintenance, and public education. Because the most cost-effective and beneficial approach to surface and storm water management is through preventative actions and protection of the natural drainage system, the utility gives priority to methods which provide protection or enhancement of the natural surface water drainage system over means primarily involving construction of new drainage facilities or systems. Funding for these activities comes from charges to real property within the service area. The amount of each charge is based on the degree to which the property contributes to an increase in surface and storm water runoff. Other Governmental FundsStreet FundThe Public Works Street Division is responsible for evaluating, maintaining, and repairing all roadways, traffic control devices, drainage systems, sidewalks, and roadsides. This division is also responsible for street cleaning, snow and ice removal, and the removal of road debris from traffic lanes. Park Cumulative Reserve FundThe Park Cumulative Reserve Fund is used for the acquisition and development of parks. Funding is derived from park fees paid by developers. Drug Forfeiture FundThis fund accounts for monies seized from drug policing activities. Fire Impact Fees FundFunds collected from developers used solely for the purpose of making capital improvements to accommodate new growth. Public Safety Levy FundIn 2019, the City created Public Safety Levy Fund to account exclusively for the public safety levy lid lift passed in November 2018 to improve and enhance various public safety resources. Cemetery Endowment FundThis permanent trust fund was established in 1993 to account for Bothell Pioneer Cemetery plot sales, donations, and investment earnings. September 15, 2020 Agenda Packet Page 134 of 294 Notes to the Financial Statements 15<< BFS Table of Contents Basic Financial Statements City of Bothell General Obligation (GO) Bond FundsGO Bond Funds are created to provide for the retirement of general purpose bonds issued for City facilities and various capital projects. When capital expenditures are funded by debt authorized by voter approval, the revenues generated to retire these debts come from property taxes. Debt issued that is not guaranteed by property tax revenue depends on other sources of general City revenue in order to retire debt. In 2019, the City created the Public Safety GO Bond Fund to collect revenue from the Public Safety Levy passed in November 2018, providing funding to pay the bond debt. Internal Service FundsEquipment Rental Fund The Equipment Rental Fund is an internal service fund created to provide for maintenance and replacement of City-owned vehicles and equipment. The Finance Department provides administrative and accounting services, while the Public Works Department performs maintenance and repairs. Self Insurance FundThe Self Insurance Fund accounts for the costs of administering the City’s self-insurance liability, property insurance risks, and employee benefits. Asset Replacement FundThe Asset Replacement Fund accounts for monies set aside over the useful life of a major asset, to be used for future replacement of the asset. COB Properties FundThe COB Properties Fund accounts for the activities of the City Hall lease revenue bond issuance, debt services, and maintenance. COB Properties is a blended component unit of the City. E. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or vents for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds 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. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 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 due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. September 15, 2020 Agenda Packet Page 135 of 294 Notes to the Financial Statements 16<< BFS Table of Contents Basic Financial Statements City of Bothell Property taxes, sales taxes, 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. Entitlements are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). All other revenue items are considered to be measurable and available only when cash is received by the government. F. BUDGETARY INFORMATION Budgetary basis of accountingWashington State law requires governments to adopt a balanced budget. Biennial appropriations are limited to total estimated revenues for the upcoming biennium, plus any unencumbered fund balance estimated to be available at the close of the current fiscal biennium. The City Council’s adopted biennial budget constitutes legal authority for expenditure at the fund level. Three of these are internal service funds, whose costs are allocated (based on usage) to the funds that utilize their services. Budget transfers or revisions within funds are allowed, however, other budget modifications must be by ordinance, and approved in the same manner as other ordinances of the city - including making the proposed amendments available to the public and providing time for public input. G. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION/FUND BALANCE Cash and Cash EquivalentsThe City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and all highly liquid investments (including restricted assets) with a maturity of three months or less from date of acquisition. InvestmentsInvestments for the City are reported at fair value (generally based on quoted market prices) except for the position in the State Treasurer’s Local Government Investment Pool (LGIP). The LGIP manages a portfolio of securities that meet the maturity, quality, diversification and liquidity and market value calculation requirements set forth by the Governmental Accounting Standard Board (GASB) for external investment pools that elect to measure, for financial reporting purposes, investments at amortized cost. Investments are reported on trade date basis in accordance with generally accepted accounting principles (GAAP). (Refer to Note 3.) ReceivablesTaxes receivable consist of property taxes and related interest and penalties (Refer to Note 4). Accrued interest receivable consists of amounts earned on investments, notes, and contracts at the end of the year. Customer accounts receivable consist of amounts owed from private individuals or organizations for goods and services including amounts owed for billings that have not yet been prepared. Special assessments are recorded when levied. Special assessments receivables consist of current and delinquent assessments and related interest and penalties. Deferred assessments consist of unbilled special assessments that are liens against the property benefited. Receivables have been reported net of estimated uncollectible accounts. Because property taxes, special assessments, and utility billings are considered liens on property, no estimated uncollectible amounts are established. September 15, 2020 Agenda Packet Page 136 of 294 Notes to the Financial Statements 17<< BFS Table of Contents Basic Financial Statements City of Bothell Court receivables consist of transactions handled by the Court in a fiduciary capacity such as a restitution, bail and state portion of certain fines and penalties and is reported as an asset, net of estimated uncollectible amounts with an offsetting liability. InventoriesAll City inventories are maintained on a consumption basis of accounting, where items are purchased for inventory and charged to the budgetary accounts as the items are consumed. Any material inventories at year-end are included in the balance sheet of the appropriate fund. Inventories are carried at cost on the first in, first out (FIFO) basis. Capital Assets and DepreciationCapital assets include land and land improvements, easements, building and building improvements, vehicles, and equipment. The straight-line method is used for depreciating assets (Refer to Note 6). Compensated AbsencesThe City accrues accumulated unpaid vacation and associated employee-related costs when earned (or estimated to be earned) by the employees. The non-current portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained as long term liabilities and represents a reconciling item between the balance sheet of the governmental funds and the governmental activities in the statement of net position. Other Post-Employment BenefitsThe City provides post-retirement health care benefits for members of the Law Enforcement Officers and Fire Fighters (LEOFF) retirement system hired prior to October 1, 1977 under a defined benefit healthcare plan administered by the City. As a single employer defined benefit plan, the City is required to recognize a liability equal to the net OPEB liability measured as of a date no earlier than the employer’s prior fiscal year and no later than the end of the current fiscal year (the measurement date). (Refer to Note 9). Interfund ActivityInterfund activities include reciprocal activities or interfund services provided and used; and, nonreciprocal activities or interfund transfers (Refer to Note 12). Deferred Outflows/Inflows of ResourcesIn addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has only one item that qualifies for reporting in this category in the Statement of Net Position. It is the amount related to pensions. In addition to liabilities, the Statement of Net Position/Balance Sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one item that qualifies for reporting in this category in the Statement of Net Position. It is the amount related to pensions. Unavailable revenues in the Balance Sheet, such as property taxes, are deferred and recognized as an inflow of resources in the period that the amounts become available. Long-Term ObligationIn government-wide financial statements and proprietary funds 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 type Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount.September 15, 2020 Agenda Packet Page 137 of 294 Notes to the Financial Statements 18<< BFS Table of Contents Basic Financial Statements City of Bothell 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 issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Net Position Flow AssumptionSometimes the government will fund outlays for a particular purpose for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. Flow AssumptionsWhen the option is available to use restricted or unrestricted resources for any purpose, the City expends restricted resources first. When the option is available to use committed, assigned, or unassigned resources for any purpose, the City expends committed resources before assigned resources, and assigned resources before unassigned resources. However, prior to the commencement of any project, the flow assumption is reviewed to ensure that the proper resources are being used. Fund BalanceFund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The government itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). Fund balance classifications from the most restrictive to no restrictions are as follows: „Nonspendable – Fund resources that are not in a spendable form (such as inventory), or that are required to be maintained intact (such as the corpus of an endowment fund). „Restricted – Fund resources that are subject to restrictions legally enforceable by outside parties (such as grantors, bondholders, or higher levels of government) through constitutional provisions, or by enabling legislation. „Committed – Fund resources that are legally limited by the government’s highest level of decision-making authority (City Council). These resources cannot be used for any other purpose unless the government takes the same highest-level action (Resolution by City Council) to modify or eliminate those limitations. „Assigned – Fund resources that are limited by a government for its intended use. Intent can be expressed by the governing body (Council, City Manager, or Directors) to which the governing body delegates the authority. Little or no formal action is required to modify or eliminate those limitations. „Unassigned – Unrestricted fund resources that are not committed or assigned in the General Fund. Only positive unassigned fund balances are reported in the General Fund. Negative fund balances in any other governmental fund are considered unassigned. NOTE 2 - COMPLIANCE AND ACCOUNTABILITY The City of Bothell budgets its funds in accordance with the Revised Code of Washington (RCW) 35A.34. There have been no material violations of finance-related legal or contractual provisions, and no expenditures have exceeded legal appropriations in any City funds. GAAP serves as the budgetary basis of accounting. September 15, 2020 Agenda Packet Page 138 of 294 Notes to the Financial Statements 19<< BFS Table of Contents Basic Financial Statements City of Bothell AMENDING THE BUDGETThe budget, as adopted, constitutes the legal authority for expenditures. The City’s budget is adopted at the fund level, so that expenditures may not legally exceed appropriations at that level of detail. Transfers or revisions within funds are allowed, but the City Council (following a hearing) must approve supplemental or additional appropriations. The City’s budget was amended on six occasions during the fiscal year. The accompanying supplementary information presents both the original and amended budgetary information as approved. All appropriations, except for capital projects and restricted revenues, lapsed 20 days following the end of the biennium. Unexpended resources must be re-appropriated in a subsequent period. PROCEDURES FOR ADOPTING THE ORIGINAL BUDGETThe City’s biennial budget procedures are mandated by the Revised Code of Washington, Chapter 35A.34. Steps in the budget process are as follows: 1) Prior to October 1, the City Manager submits a proposed operating budget to the Council or the fiscal year commencing the following January 1. The operating budget includes proposed expenditures/ expenses and the means of financing them. 2) A public hearing is conducted to obtain taxpayer comments. 3) During the month of December, the budget is legally enacted through the passage of an ordinance. 4) Revisions that alter any fund’s appropriation must be approved by the City Council. 2019-2020 Final Budget Inflows and Outflows Fund Original Inflows Original Outflows Final Inflows Final Outflows General Fund 110,830,580 111,262,007 111,375,580 111,795,007 Street Fund 12,061,100 12,264,880 12,061,100 12,264,880 Arterial Street Fund 7,404,438 5,105,192 7,404,438 5,105,192 Park Cumulative Reserve Fund 2,184,000 153,000 2,184,000 153,000 Drug Seizure Fund 115,000 28,800 115,000 28,800 Fire Impact Fee Fund 360,000 360,000 Public Safety Levy Fund 10,847,000 8,811,314 LIFT General Obligation Bond 3,995,100 3,995,100 3,995,100 3,995,100 2013 GO Bond 1,393,926 1,393,926 1,393,926 1,393,926 Public Safety GO Bond 25,500,000 25,500,000 Capital Improvements Fund 65,486,124 70,695,623 69,535,124 75,830,623 Public Safety Capital Fund 26,500,000 25,500,000 Water Fund 11,934,398 14,937,192 11,934,398 15,937,192 Sewer Fund 16,605,575 20,603,686 16,605,575 21,603,686 Storm & Surface Water Fund 14,140,451 19,199,295 14,140,451 20,314,295 Equipment Rental Fund 4,697,604 4,697,598 4,697,604 4,697,598 Self Insurance Fund 3,640,054 3,640,055 3,640,054 3,640,055 Asset Replacement Fund 3,606,165 6,356,941 3,606,165 6,356,941 Firemen's Pension Reserve Fund 128,950 128,950 128,950 128,950 Total 258,583,465 274,462,245 326,024,465 343,056,559 September 15, 2020 Agenda Packet Page 139 of 294 Notes to the Financial Statements 20<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 3 - DEPOSITS AND INVESTMENT DEPOSITSThe City’s deposits and certificates of deposit are entirely covered by the Federal Depository Insurance Corporation (FDIC), or by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (PDPC). The PDPC is a statutory authority established under Chapter 39.58 of the Revised Code of Washington. INVESTMENTSThe City’s policy is to invest in a manner that provides maximum security, while meeting daily cash flow demands, conforming to all state and local statues governing the investment of public funds, while providing a market rate of return through budgetary and economic cycles. All municipal corporations in Washington State are empowered to invest in securities authorized by the Revised Code of Washington Chapter 39.59 and 35.39. As required by state law, authorized investments of the City’s funds are: „obligations of the United States or its agency, or any corporation wholly owned by the government of the United States; „obligations of the State of Washington, general obligations of Washington State municipalities; „the State Treasurer’s Local Government Investment Pool (LGIP); „certificates of deposit with Washington State banks and savings and loan institutions; „banker’s acceptances, commercial paper and corporate notes purchased on the secondary market. Investing in corporate notes, the City must adhere to the investment policies and procedures adopted by Washington State Investment Board. The LGIP manages a portfolio of securities that meet the maturity, quality, diversification and liquidity and market value calculation requirements set forth by the Governmental Accounting Standard Board (GASB) for external investment pools that elect to measure, for financial reporting purposes, investments at amortized cost. The funds are limited to high quality obligations with regulated maximum and average maturities to minimize both market and credit risk. Investments are reported on trade date basis in accordance with generally accepted accounting principles (GAAP). The City measures and records its investments except for LGIP within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The guidelines in GASB 72 recognize a three-tiered fair value hierarchy as follows: „Level 1: Quoted prices in active markets for identical assets or liabilities that the government can access at the measurement date. Observable markets include exchange markets, dealer markets, brokered markets and principal-to-principal markets. „Level 2: These are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (such as interest rates, yield curves, volatilities, credit spreads). Inputs are derived from or corroborated by observable market data through correlation including quoted prices for similar assets or liabilities in active markets or inactive markets. „Level 3: Unobservable inputs for an asset or liability. Only should be used when relevant Level 1 and 2 inputs are unavailable. As of December 31, 2019, the City’s investments, excluding the Local Government Investment Pool (LGIP) are classified as Level 2. September 15, 2020 Agenda Packet Page 140 of 294 Notes to the Financial Statements 21<< BFS Table of Contents Basic Financial Statements City of Bothell As of December 31, 2019, the City-wide’s cash and investments are as follows: Governmental Funds Internal Service Funds Enterprise Funds Total Cash on hand $1,750 $1,750 Deposits with financial institutions 7,168,622 482,533 3,291,940 10,943,094 Deposits in trust 277,837 277,837 Local Government Investment Pool 35,973,693 35,973,693 All other investments 7,700,000 1,100,000 16,028,407 24,828,407 Total cash and investments $50,844,064 $1,860,370 $19,320,347 $72,024,781 Cash and investments listed by fund type: Special Revenue Fund Capital Project Fund Capital Project Fund Other Capital Public Safety Governmental Governmental Funds General Fund Arterial Street Improvement Capital Funds Total Cash on hand $1,750 $1,750 Deposits with financial institutions 3,243,933 576,694 1,940,561 285,504 1,121,929 7,168,622 Investments 5,572,735 4,800,000 1,600,000 25,026,778 6,674,179 43,673,693 Total cash and investments $8,818,419 $5,376,694 $3,540,561 $25,312,282 $7,796,109 $50,844,064 Internal Storm & Surface Service Proprietary Funds Water Sewer Water Total Funds Deposits with financial institutions $588,851 $537,559 $2,165,531 $3,291,940 $482,533 Deposits held in trust 277,837 Investments 3,790,215 5,707,503 5,214,320 14,712,038 1,100,000 Investments-reserved 109,785 292,497 914,086 1,316,369 Total cash and investments $4,488,851 $6,537,559 $8,293,937 $19,320,347 $1,860,370 Internal Service Funds Equipment Rental Self Insurance Asset Replacement COB Properties Total Deposits with financial institutions $142,287 $119,198 $221,048 $482,533 Investments 1,100,000 $1,100,000 Deposits held in trust 277,837 $277,837 Total cash and investments $142,287 $119,198 $1,321,048 $277,837 $1,860,370 Enterprise Funds September 15, 2020 Agenda Packet Page 141 of 294 Notes to the Financial Statements 22<< BFS Table of Contents Basic Financial Statements City of Bothell Business-Type Activities Primary Government Primary Government Governmental Funds Internal Service Funds Total Enterprise Funds Total Cash on hand $1,750 $1,750 -$ $1,750 Deposits with financial institutions 7,168,622 482,533 $7,651,154 3,291,940 10,943,094 Deposits held in trust 277,837 277,837 277,837 Investments 43,673,693 1,100,000 44,773,693 14,712,038 59,485,730 Investments-reserved 1,316,369 1,316,369 Total Cash, Deposit and Investments $50,844,064 1,860,370$ $52,704,434 19,320,347$ 72,024,781 Governmental Activities Interest Rate Risk: Interest rate risk is the risk that changes in the interest rates of debt instruments that adversely affect the fair value of an investment. The City does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. It does have a policy whereby the City cannot invest in securities maturing more than five (5) years from date of purchase. Not Measured at Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Level 1 Level 2 Level 3 Amortized Cost U.S. Agencies $4,277,790 -$ $4,277,790 -$ -$ Supranational Agency 7,961,405 7,961,405 Municipal Bonds 6,062,730 6,062,730 Corporate Bonds 6,526,482 6,526,482 Local Government Investment Pool 35,973,693 35,973,693 Total investments $60,802,099 -$ $24,828,407 -$ $35,973,693 Fair Value Measurements Using Investment Fair Value MeasurementAs of December 31, 2019 IInnvveessttmmeenntt PPoorrttffoolliioo aanndd MMaattuurriittyy AAss ooff DDeecceemmbbeerr 3311,, 22001199 Book Fair Market Weighted Avg. Portfolio Value Value Year 1 Year 2 Year 3 Year 4 Year 5 Maturity in Years Allocation Supranational Agency $7,712,996 $7,961,405 $2,008,516 $2,842,771 $3,110,118 2.53 13.09% Municipal Bonds 5,974,321 6,062,730 3,018,820 1,003,470 2,040,440 1.84 9.97% Corporate Bonds 6,420,888 6,526,482 3,999,057 1,007,012 1,520,412 2.13 10.73% U.S. Agencies 4,194,381 4,277,790 1,350,918 923,137 2,003,734 2.62 7.04% Local Government Investment Pool 35,973,693 35,973,693 35,973,693 1.00 59.17% Total investments $60,276,279 $60,802,099 $46,351,005 $5,776,391 $3,560,852 $5,113,852 - 1.46 100.00% Fair Value Investment Maturity (Year) Investment Portfolio and Maturity As of December 31, 2019 September 15, 2020 Agenda Packet Page 142 of 294 Notes to the Financial Statements 23<< BFS Table of Contents Basic Financial Statements City of Bothell Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment may not fulfill its obligations. State law limits investments in commercial paper, corporate bonds, and mutual bond funds to the top two ratings issued by nationally recognized statistical rating organizations. The City has no investment policy that would further limit its investment choices. Concentration of Credit Risk: Concentration of risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City diversifies its investments by security type and issuer. With the exception of US Treasury securities and authorized state pools, no more than 50% of the City’s total investment portfolio will be invested in any one security issue. As of December 31, 2019, the City’s investment portfolio is as follows: Investment List by Issuer: Investment Type Fair Market Value % of Investment Portfolio Credit Rating Corporate Bonds: Apple 1,999,224 3.29%Aa1/AA+/AA+ Costco 1,999,834 3.29%A1/A+/A+ Wells Fargo Bank Notes 1,007,012 1.66%Aa2/A+ Microsoft 1,520,412 2.50%Aaa/AAA Total Corporate Bonds 6,526,482 10.73% Municipal Bonds: Seattle WA Txbl Ref-Ser B 1,000,000 1.64%Aa1/AAA Washing St GO Bonds 1,000,450 1.65%Aa1/AA+ Monroe WA Txbl-Ref 640,115 1.05%AA- Baltimore MD Txbl-Consol Pub Impt-Ser B 378,255 0.62%Aa2/AA Washing St GO Bonds 1,003,470 1.65%Aa1/AA+ Connecticut St Txbl - Ser A 2,040,440 3.36%A+ Total Municipal Bonds 6,062,730 9.97% US Agency Securities FANNIE MAE 1,350,918 2.22%AAA FNMA GEN STRI 923,137 1.52%NR FFCB 2,003,734 3.30%AAA Total Agency Securities 4,277,790 7.04% Supranational Agency: Intl-American Dev Bk 999,424 1.64%Aaa/AAA/AAA Intl Fin. Corp. 1,009,092 1.66%Aaa/AAA/AAA European Bk Recon & Dev 2,842,771 4.68%Aaa/AAA/AAA Intl-American Dev Bk 1,023,801 1.68%Aaa/AAA/AAA Intl Fin. Corp.1,039,421 1.71%Aaa/AAA/AAA Intl Bk Recon & Dev. (IBRD/World Bk)1,046,896 1.72%Aaa/AAA/AAA Total Supranational Agency Securities 7,961,405 13.09% Local Government Inbestment Pool 35,973,693 59.17% GRAND TOTAL 60,802,099 100.00% September 15, 2020 Agenda Packet Page 143 of 294 Notes to the Financial Statements 24<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 4 - PROPERTY TAXES The county treasurer acts as an agent to collect property taxes levied in the county for all taxing authorities. Taxes are levied annually on January 1 on property values listed as of the prior May 31. Assessed values are established by the county assessor at 100% of fair market value. A revaluation of all property is required every four years. Taxes are due in two equal installments on April 30 and October 31. Tax liens are automatic at the point the taxes are levied. No allowance for uncollectible taxes is established, since delinquent taxes are considered fully collectible. The county treasurer remits collections monthly to the appropriate district. The City is permitted by law to levy up to $3.60 per $1,000 of assessed valuation for general governmental services, minus a library rate of $0.50. This amount may be reduced for any of the following three reasons: 1) Washington State law (RCW 84.55.010) limits the growth of regular property taxes to 1% per year, after adjustments for new construction. If the as- sessed valuation increases by more than 1% due to revaluation, the levy rate will be decreased. 2) 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 dis- tricts exceed this amount, each is proportionately reduced until the total is at or below the 1% limit. 3) The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. In 2019, the City’s levy rate was $1.91 per $1,000, which included a $0.46 per $1,000 for Safe Streets and Sidewalks levy, and $0.43 per $1,00 for Public Safety levy. Bothell’s total assessed valuation was $11,415,273,674. Snohomish County $4,686,873,729 King County 6,728,399,945 Total $11,415,273,674 2019 Assessed Valuation January 01 Taxes are levied and become an enforceable lien against properties. February 14 Tax bills are mailed. April 30 First of two equal installment payments is due. May 31 Assessed value of property established for next year's levy at 100% of market value. October 31 Second installment is due. Property Tax Calendar September 15, 2020 Agenda Packet Page 144 of 294 Notes to the Financial Statements 25<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 5 - DEFERRED INFLOWS AND OUTFLOWS OF RESOURCES Deferred Outflows of Resources at December 31, 2019 are as follows: Governmental Business-Type Description Activities Activities Pension $3,769,366 $300,548 Other Postemployment Benefits (OPEB)76,335 Total $3,845,701 $300,548 Pension $7,447,890 $569,356 Advanced Grant 693,998 Total $8,141,888 $569,356 Deferred Outflows of Resources - Government-Wide Statement of Net Position Deferred Inflows of Resources - Government-wide Statement of Net Position Deferred Inflows and Outflows of Resources Deferred inflows of resources in the governmental funds balance sheet were recognized as revenue sources except for advanced grants, as consolidating into government-wide statements based upon accrual basis of accounting. Description Governmental Funds Court services $319,706 Deferred EMS services 142,354 Deferred property tax 218,788 Deferred revenue-impact fees 19,533 Advanced grant 693,998 Total $1,394,379 Deferred Inflows of Resources - Governmental Funds Balance Sheet September 15, 2020 Agenda Packet Page 145 of 294 Notes to the Financial Statements 26<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 6 - CAPITAL ASSETS AND DEPRECIATION GENERAL POLICIESMajor expenditures for property including land, buildings, or equipment having an initial value of more than $5,000 are capitalized. Assets may be acquired through donation, annexation, gift, purchase, capital lease, or self-construction work in progress with a life expectancy of more than one year. All capital assets are valued at historical cost, or estimated cost where historical cost is not known, or acquisition value for donated assets, or the lower of cost or fair market value when transferred between proprietary and governmental funds. 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. However, the City has sufficient legal interest to accomplish the purposes for which the assets were acquired, and has included such assets within the applicable statements. GOVERNMENTAL CAPITAL ASSETSGovernmental long-lived assets of the City (purchased, leased, or constructed) are recorded as expenditures in the governmental funds and are capitalized, net of depreciation, in the government-wide statements. This includes current year purchases of governmental infrastructure assets. PROPRIETARY FUND CAPITAL ASSETSCapital assets of proprietary funds are capitalized in their respective statement of net position. DEPRECIATIONDepreciation on all assets is provided on the straight-line basis over the following estimated useful lives: Government Activities Amount General government $2,681,556 Security of persons & property 846,143 Transportation 37,466,507 Physical environment 2,637,936 Culture & recreation 616,830 Total Governmental Activities Depreciation Expense $44,248,972 Business-Type Activities Amount Water $812,736 Sewer 598,221 Storm & Surface Water 1,293,237 Total Business-Type Activities Depreciation Expense $2,704,194 Major Project: Crosswalk Projects & 228th St SE Pavement Project Governmental Fund $209,994 Total Crosswalk Projects & 228th St SE Pavement Project $209,994 2019 Curb Ramps Governmental Fund $581,547 Total 2019 Curb Ramps $581,547 Water Main Replacement Project Water Fund 1,902,800 Total Water Main Replacement Project $1,902,800 Storm & Surface Water Projects Storm & Surface Water Fund 523,462 Total Storm & Surface Water Main Projects $523,462 Total Governmental and Enterprise Capital Costs $3,217,802 Depreciation expense was charged to government and business-type activities as follows: In 2019, the City completed major projects and capital acquisitions which increased capital assets over $3 million. The capitalization is as follows:  Building and structures 30-50 years  Other improvements 20-60 years  Machinery and equipment 5-20 years  Vehicles 5-20 years  Infrastructure 20-50 years September 15, 2020 Agenda Packet Page 146 of 294 Notes to the Financial Statements 27<< BFS Table of Contents Basic Financial Statements City of Bothell Construction in Remaining Construction in Remaining Government Activities Progress Commitment Business-Type Activities Progress Commitment 1st Lt Nicholas Memorial Park $193,936 $8,320 Bloomberg Reservoir Painting $13,131 7th Ave SE/88th Ave NE Non-Motorized Imp 401,969 370,317 Downtown Revitalization Utility - Water 1,698 19th Ave NE & 232nd St SE Ped & Bike Imp 2,622,534 231,900 Morningside Booster Station Retrofit 111,460 130th Pl NE & 132nd Ave NE Sidewalk 199 Water Main Replacement 35,581 228th St SE Pavement Preservation 2,000 Sewer Main Replacement Program 872,463 167,453 228th St SE Widening (from 35th to 39th)3,407 Lift Station #4 8,012 Adaptive Signal Control Phase 1 23,633 236th St & 35th Ave Culvert Replace 43,848 Annual Arterial Overlay Program 112,660 503,167 Annual Stormwater Capital Projects 119,777 Beardslee Widening Campus to I405 3,182 Blyth Creek Erosion Control 55,332 Bicycle Program 36,429 12,431 Downtown Revitalization Utility - Storm 866 17,664 Blyth Park Improvements 66,825 Monte Villa Drainage Improvements 95,097 Bothell Way Widening 1,314 Parr Creek Flood Mitigation 474,816 16,941 Bridge Rehab & Seismic retrofit 105,843 Perry Creek & 228th St SE Culverts 301,865 16,029 Canyon Park Subarea Update 36,017 43,983 Total Business-Type Activities $2,133,946 $218,087 Citywide Child Ped School & Park Zone Safety 10,992 Crosswalk Program 54,000 Downtown Soil/Ground Cleanup 7,871,183 1,846,928 East Norway Hill Improvements 44,274 394 Fire Station 42 - Downtown 124,108 109,482 Fire Station 45 - Canyon Park 127,106 109,482 Horse Creek Plaza 196,817 85,349 Joint Fire Services 1,779 Juanita-Woodinville Way/NE 160th Overlay 45,160 Main Street Extension 270,035 NE 185th Improvements 233,606 NE 188th St Non-Motorized Imp 421,005 56,372 North Creek Field 3 74,950 North Creek Trail Section 4 671,107 228,489 Park at Bothell Landing 143,117 Park at Bothell Landing Bridge Replacement 566,643 1,765,148 Park Master Planning 32,687 Pop Keeney Road 225,449 Safety Upgrade & Replacement Program 9,750 Sammamish River Bridge Retrofit 235,952 41,243 SR 522 Stage 2B Improvements 102,672 SR 522 Stage 3 Improvements Phase 1 8,263,773 18,321,187 Stream Rockery Repair 21,935 46,956 Total Governmental Activities $23,252,205 $23,886,991 Construction Commitments as of December 31, 2019 September 15, 2020 Agenda Packet Page 147 of 294 Notes to the Financial Statements 28<< BFS Table of Contents Basic Financial Statements City of Bothell Summary of Changes to Capital Assets Description Beginning Balance Increases Decreases Ending Balance Governmental activities: Capital assets not being depreciated: Land and improvements $67,456,592 $4,521,716 $71,978,308 Infrastructure right-of-way 81,833,639 54,969 81,888,608 Construction in progress 16,549,318 9,403,967 2,701,081 23,252,205 Total capital not being depreciated $165,839,550 $13,980,652 $2,701,081 $177,119,121 Other capital assets: Buildings $18,187,999 $20,910 $18,167,089 Capital lease - City Hall 51,475,433 51,475,433 Improvements 88,251,663 1,814,373 204,731 89,861,305 Infrastructure 1,608,771,963 564,665 1,609,336,628 Intangible Asset 4,700,000 4,700,000 Work of art 140,936 140,936 Vehicles 10,422,129 579,269 661,260 10,340,138 Equipment 4,406,775 412,242 469,635 4,349,382 Total other capital assets at historical cost $1,786,356,898 $3,370,549 $1,356,537 $1,788,370,910 Less accumulated depreciation for: Buildings $5,723,011 $364,013 $7,319 $6,079,706 Capital lease - City Hall 3,603,280 1,029,509 4,632,789 Improvements 36,641,880 4,527,437 126,695 41,042,623 Infrastructure 1,208,080,339 36,769,567 1,244,849,906 Intangible Asset 1,096,667 313,333 1,410,000 Work of art 13,570 5,847 19,417 Vehicles 5,916,938 940,680 650,241 6,207,377 Machinery & equipment 2,710,441 298,585 357,940 2,651,086 Total accumulated depreciation $1,263,786,126 $44,248,972 $1,142,194 $1,306,892,904 Governmental activities capital assets, net $688,410,322 ($26,897,771)$2,915,423 $658,597,128 Business-type activities: Capital assets not being depreciated: Construction in progress $1,239,464 $3,815,749 $2,921,267 $2,133,946 Infrastructure right-of-way 1,935,868 1,935,868 Land and improvements 285,302 285,302 Total capital not being depreciated $3,460,633 $3,815,749 $2,921,267 $4,355,115 Other capital assets: Buildings $8,109,199 $437,313 $8,546,512 Intangible plant 411,179 411,179 Improvements 76,924,656 2,829,093 437,313 79,316,436 Vehicles 290,437 21,396 311,834 Machinery & equipment 2,092,738 35,509 28,842 2,099,404 Total other capital assets at historical cost $87,828,209 $3,323,311 $466,155 $90,685,365 Less accumulated depreciation for: Buildings $1,396,980 $253,707 $1,650,687 Intangible plant 411,179 411,179 Improvements 27,111,204 2,278,397 29,389,601 Vehicles 211,301 12,067 223,368 Machinery & equipment 905,910 160,024 28,150 1,037,784 Total accumulated depreciation $30,036,574 $2,704,194 $28,150 $32,712,619 Business-type activities capital assets, net $61,252,267 $4,434,866 $3,359,272 $62,327,861 September 15, 2020 Agenda Packet Page 148 of 294 Notes to the Financial Statements 29<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 7 - PENSION PLANS The following table represents the aggregate pension amounts for all plans subject to the requirements of the GASB Statement 68, Accounting and Financial Reporting for Pensions, for the year 2019: Pension liabilities ($6,592,168) Pension assets $11,288,765 Deferred outflows of resources $4,069,914 Deferred inflows of resources ($8,017,246) Pension expense/expenditures $946,091 Aggregate Pension Amounts – All Plans State Sponsored Pension PlansSubstantially, the City’s full-time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing, multiple-employer public employee defined benefit and defined contribution retirement plans. The state Legislature establishes, and amends, laws pertaining to the creation and administration of all public retirement systems. 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 UnitP.O. Box 48380Olympia, WA 98540-8380 The DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov/. PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (PERS) PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts; employees of the legislature; employees of district and municipal courts; employees of local governments; and higher education employees not participating in higher education retirement programs. PERS is comprised of three separate pension plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with a defined contribution component. PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member’s average final compensation (AFC) times the member’s years of service. The AFC is the average of the member’s 24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non-duty disability payments, an optional cost-of-living adjustment (COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977.September 15, 2020 Agenda Packet Page 149 of 294 Notes to the Financial Statements 30<< BFS Table of Contents Basic Financial Statements City of Bothell ContributionsThe PERS Plan 1 member contribution rate is established by State statute at 6 percent. The employer contribution rate is developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1 required contribution rates (expressed as a percentage of covered payroll) for 2019 were as follows: PERS Plan 1 *For employees participating in JBM, the contribution rate was 12.26% PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member’s average final compensation (AFC) times the member’s years of service for Plan 2 and 1 percent of AFC for Plan 3. The AFC is the average of the member’s 60 highest- paid consecutive service months. There is no cap on years of service credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions: „With a benefit that is reduced by three percent for each year before age 65; or „With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return-to-work rules. PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of five percent for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30 years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other PERS Plan 2/3 benefits include duty and non- duty disability payments, a cost-of-living allowance (based on the CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of Labor and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service if 12 months of that service are earned after age 44. PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on those contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a minimum of 5 percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan. Actual Contribution Rates Employer Employee* January - June 2019: PERS Plan 1 7.52%6.00% PERS Plan 1 UAAL 5.13% Administrative Fee 0.18% Total 12.83%6.00% June - December 2019: PERS Plan 1 7.92%6.00% PERS Plan 1 UAAL 4.76% Administrative Fee 0.18% Total 12.86%6.00% September 15, 2020 Agenda Packet Page 150 of 294 Notes to the Financial Statements 31<< BFS Table of Contents Basic Financial Statements City of Bothell ContributionsThe PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1 UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required contribution rates (expressed as a percentage of covered payroll) for 2019 were as follows: PERS Plan 2/3 *For employees participating in JBM, the contribution rate was 18.53% to 19.75%. The City actual contributions were $948,008 to PERS Plan 1 and $1,448,655 to PERS Plan 2/3 for the year ended December 31, 2019. PUBLIC SAFETY EMPLOYEES’ RETIREMENT SYSTEM (PSERS) PSERS Plan 2 was created by the 2004 Legislature and became effective July 1, 2006. To be eligible for membership, an employee must work on a full-time basis and: „Have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington, and carry a firearm as part of the job; or „Have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or „Function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or „Have primary responsibility to supervise eligible members who meet the above criteria. PSERS membership includes: „PERS 2 or 3 employees hired by a covered employer before July 1, 2006, who met at least one of the PSERS eligibility criteria and elected membership during the period of July 1, 2006 to September 30 2006; and „Employees hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. Actual Contribution Rates Employer 2/3 Employee 2* January - June 2019: PERS Plan 2/3 7.52%7.41% PERS Plan 1 UAAL 5.13% Administrative Fee 0.18% Employee PERS Plan 3 varies Total 12.83%7.41% June - December 2019: PERS Plan 2/3 7.92%7.90% PERS Plan 1 UAAL 4.76% Administrative Fee 0.18% Employee PERS Plan 3 varies Total 12.86%7.90% September 15, 2020 Agenda Packet Page 151 of 294 Notes to the Financial Statements 32<< BFS Table of Contents Basic Financial Statements City of Bothell PSERS covered employers include: „Certain State of Washington agencies (Department of Corrections, Department of Natural Resources, Gambling commission, Liquor Control Board, Parks and Recreation Commission, and Washington State Patrol), „Washington State Counties, „Washington State Cities (except for Seattle, Spokane, and Tacoma), „Correctional entities formed by PSERS employers under the Interlocal Cooperation Act. PSERS Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the average final compensation (AFC) for each year of service. The AFC is based on the member’s 60 consecutive highest creditable months of service. Benefits are actuarially reduced for each year that the member’s age is less than 60 (with ten or more service credit years in PSERS), or less than 65 (with fewer than ten service credit years). There is no cap on year of service credit. Members are eligible for retirement at the age of 65 with five years of service; or at the age of 60 with at least ten years of PSERS service credit; or at age 53 with 20 years of service. Retirement before age 60 is considered an early retirement. PSERS members who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. PSERS Plan 2 retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non-duty disability payments, an optional cost-of living adjustment (COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. PSERS Plan 2 members are vested after completing five years of eligible service. ContributionsThe PSERS Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The Plan 2 employer rates include components to address the PERS Plan 1 unfunded actuarial accrued liability and administrative expense currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates. The PSERS Plan 2 required contribution rates (expressed as a percentage of current-year covered payroll) for 2019 were as follows: PSERS Plan 2 The City actual contributions were $17,786 to PSERS Plan 2 and $12,246 to PERS Plan 1 for the year ended December 31, 2019. Actual Contribution Rates Employer 2/3 Employee 2* January - June 2019: PSERS Plan 2 7.07%7.07% PERS Plan 1 UAAL 5.13% Administrative Fee 0.18% Total 12.38%7.07% June - December 2019: PSERS Plan 2 7.20%7.20% PERS Plan 1 UAAL 4.76% Administrative Fee 0.18% Total 12.14%7.20% September 15, 2020 Agenda Packet Page 152 of 294 Notes to the Financial Statements 33<< BFS Table of Contents Basic Financial Statements City of Bothell LAW ENFORCEMENT OFFICERS’ AND FIRE FIGHTERS’ RETIREMENT SYSTEM (LEOFF) LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans. LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined per year of service calculated as a percent of final average salary (FAS) as follows: „20+ years of service – 2.0% of FAS „10-19 years of service – 1.5% of FAS „5-9 years of service – 1% of FAS The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months’ salary within the last ten years of service. Members are eligible for retirement with five years of service at the age of 50. Other benefits include duty and non-duty disability payments, a cost-of living adjustment (COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977. ContributionsStarting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as long as the plan remains fully funded. The LEOFF Plan I had no required employer or employee contributions for fiscal year 2019. Employers paid only the administrative expense of 0.18 percent of covered payroll. LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53 receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non-duty disability payments, a cost-of-living allowance (based on the CPI), capped at three percent annually and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the completion of five years of eligible service. ContributionsThe LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The employer rate included an administrative expense component set at 0.18 percent. Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. September 15, 2020 Agenda Packet Page 153 of 294 Notes to the Financial Statements 34<< BFS Table of Contents Basic Financial Statements City of Bothell The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2019 were as follows: LEOFF Plan 2 The City actual contributions to the plan were $863,232 for the year ended December 31, 2019. The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state constitution and could be changed by statute. For the state fiscal year ending June 30, 2019, the state contributed $72,959,897 to LEOFF Plan 2. The amount recognized by the City as its proportionated share of this amount is $551,855. Actuarial AssumptionsThe total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed in 2019 with a valuation date of June 30, 2018. The actuarial assumptions used in the valuation were based on the results of the Office of the State Actuary’s (OSA) 2007-2012 Experience Study and 2017 Economic Experience Study. Additional assumptions for subsequent events and law changes are current as of the 2018 actuarial valuation report. The TPL was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2019. Plan liabilities were rolled forward from June 30, 2018 to June 30, 2019, reflecting each plan’s normal cost (using the entry-age cost method), assumed interest and actual benefit payments. „Inflation: 2.75% total economic inflation; 3.50% salary inflation „Salary increases: In addition to the base 3.50% salary inflation assumption, salaries are also expected to grow by promotionsand longevity. „Investment rate of return: 7.4% Mortality rates were based on the RP-2000 report’s Combined Healthy Table and Combined Disabled Table, published by the Society of Actuaries. The OSA applied offsets to the base table and recognized future improvements in mortality by projecting the mortality rates using 100 percent Scale BB. Mortality rates are applied on a generational basis; meaning, each member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime. Actual Contribution Rates Employer Employee January - June 2019: State and Local Governments 5.25%8.75% Administrative Fee 0.18% Total 5.43%8.75% July - December 2019: State and Local Governments 5.15%8.59% Administrative Fee 0.18% Total 5.33%8.59% September 15, 2020 Agenda Packet Page 154 of 294 Notes to the Financial Statements 35<< BFS Table of Contents Basic Financial Statements City of Bothell There were changes in methods and assumptions since the last valuation. „OSA updated modeling to reflect providing benefit payments to the date of the initial retirement eligibility for terminated vested members who delay application for retirement benefits. „OSA updated COLA programming to reflect legislation signed during the 2018 legislative session that provides PERS and TRS Plan 1 annuitants who are not receiving a basic minimum, alternate minimum, or temporary disability benefit with a one-time permanent 1.5% increase to their monthly retirement benefit, not to exceed a maximum of $62.50 per month. Discount RateThe discount rate used to measure the total pension liability for all DRS plans was 7.4 percent.To determine that rate, an asset sufficiency test included an assumed 7.5 percent long-term discount rate to determine funding liabilities for calculating future contribution rate requirements. (All plans use 7.5 percent except LEOFF 2, which has assumed 7.4 percent). Consistent with the long-term expected rate of return, a 7.4 percent future investment rate of return on invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue being made at contractually required rates (including PERS 2/3, PSERS 2, SERS 2/3, and TRS 2/3 employers, whose rates include a component for the PERS 1, and TRS 1 plan liabilities). Based on these assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return of 7.4 percent was used to determine the total liability. Long-Term Expected Rate of ReturnThe long-term expected rate of return on the DRS pension plan investments of 7.4 percent was determined using a building- block-method. In selecting this assumption, the Office of the State Actuary (OSA) reviewed the historical experience data, considered the historical conditions that produced past annual investment returns, and considered capital market assumptions and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the capital market assumptions and their target asset allocation to simulate future investment returns over various time horizons. Estimated Rates of Return by Asset ClassBest estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2019, are summarized in the table below. The inflation component used to create the table is 2.2 percent and represents the WSIB’s most recent long-term estimate of broad economic inflation. % Long-Term Expected Real Asset Class Target Allocation Rate of Return Fixed Income 20%2.20% Tangible Assets 7%5.10% Real Estate 18%5.80% Global Equity 32%6.30% Private Equity 23%9.30% Total 100% September 15, 2020 Agenda Packet Page 155 of 294 Notes to the Financial Statements 36<< BFS Table of Contents Basic Financial Statements City of Bothell Sensitivity of the Net Pension Liability / (Asset)The table below presents the City proportionate share of the net pension liability calculated using the discount rate of 7.4 percent, as well as what the City proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.4 percent) or 1-percentage point higher (8.4 percent) than the current rate. Pension Plan Fiduciary Net PositionDetailed information about the State’s pension plans’ fiduciary net position is available in the separately issued DRS financial report. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2019, the City reported a total pension liability of $6,592,168 for its proportionate share of the net pension liabilities and a total pension asset of $11,288,765 for its proportionate share of the net pension assets as follows: The amount of the liability / (asset) reported above for LEOFF Plan 1 and 2 reflects a reduction for State pension support provided to the City. The amount recognized by the City as its proportionate share of the net pension liability/(asset), the related State support, and the total portion of the net pension liability/(asset) that was associated with the City were as follows: Current 1% Decrease Discount Rate 1% Increase Pension Plan (6.4%)(7.4%)(8.4%) PERS 1 $6,256,006 $4,995,539 $3,901,918 PERS 2/3 12,245,521 1,596,630 (7,141,488) PSERS 2 58,718 (5,688)(56,283) LEOFF 1 (567,962)(694,285)(803,352) LEOFF 2 (1,968,903)(10,588,793)(17,624,596) Pension Plan Liability (or Asset) PERS 1 $4,995,537 PERS 2/3 1,596,630 PSERS 2 (5,688) LEOFF 1 (694,285) LEOFF 2 (10,588,793) September 15, 2020 Agenda Packet Page 156 of 294 Notes to the Financial Statements 37<< BFS Table of Contents Basic Financial Statements City of Bothell At June 30, 2019, the City proportionate share of the collective net pension liabilities was as follows: Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis for determining each employer’s proportionate share of the collective pension amounts reported by the DRS in the Schedulesof Employer and Non-employer Allocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2019. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2019, the State of Washington contributed 87.12 percent of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 is fully funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term contribution effort based on historical data. In fiscal year 2019, the state of Washington contributed 39.57 percent of LEOFF 2 employer contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 60.43 percent of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2019, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2018, with update procedures used to roll forward the total pension liability to the measurement date. Pension Plan LEOFF 1 Asset LEOFF 2 Asset Employer's proportionate share (694,285) (10,588,793) State's proportionate share of the net pension asset associated with the employer (4,696,124)(6,934,241) Total ($5,390,408)($17,523,033) Proportionate Proportionate Change in Pension Plan Share 6/30/2019 Share 6/30/2018 Proportion PERS 1 0.129911%0.127456%0.002455% PERS 2/3 0.164374%0.158377%0.005997% PSERS 2 0.043737%0.054126%-0.010389% LEOFF 1 0.035125%0.036077%-0.000952% LEOFF 2 0.457065%0.495674%-0.038609% September 15, 2020 Agenda Packet Page 157 of 294 Notes to the Financial Statements 38<< BFS Table of Contents Basic Financial Statements City of Bothell Pension ExpenseFor the year ended December 31, 2019, the City recognized pension expense as follows: Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Pension Plan Pension Expense PERS 1 $345,588 PERS 2/3 419,702 PSERS 2 9,349 LEOFF 1 (20,504) LEOFF 2 191,956 Total $946,091 Deferred Outflows Deferred Inflows PERS 1 of Resources of Resources Differences between expected and actual experience Net difference between projected and actual investment earnings on pension plan investments ($333,744) Changes of assumptions Changes in proportion and differences between contributions and proportionate share of contributions Contributions subsequent to the measurement date 466,854 Total $466,854 ($333,744) Deferred Outflows Deferred Inflows PERS 2/3 of Resources of Resources Differences between expected and actual experience $457,438 ($343,267) Net difference between projected and actual investment earnings on pension plan investments (2,324,044) Changes of assumptions 40,885 (669,893) Changes in proportion and differences between contributions and proportionate share of contributions 548,829 (157,363) Contributions subsequent to the measurement date 758,172 Total $1,805,324 ($3,494,566) Deferred Outflows Deferred Inflows PSERS 2 of Resources of Resources Differences between expected and actual experience $4,803 (503) Net difference between projected and actual investment earnings on pension plan investments (9,877) Changes of assumptions 46 (3,057) Changes in proportion share 882 (1,868) Contributions subsequent to the measurement date 10,220 Total $15,951 ($15,305) September 15, 2020 Agenda Packet Page 158 of 294 Notes to the Financial Statements 39<< BFS Table of Contents Basic Financial Statements City of Bothell LEOFF 1 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience Net difference between projected and actual investment earnings on pension plan investments (71,976) Changes of assumptions Changes in proportion and differences between contributions and proportionate share of contributions Contributions subsequent to the measurement date Total $0 ($71,976) LEOFF 2 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $761,958 (190,415) Net difference between projected and actual investment earnings on pension plan investments (2,171,034) Changes of assumptions 17,444 (1,191,578) Changes in proportion and differences between contributions and proportionate share of contributions 568,587 (548,630) Contributions subsequent to the measurement date 433,795 Total $1,781,784 (4,101,656) Total of All Plans Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $1,224,201 ($534,184) Net difference between projected and actual investment earnings on pension plan investments (4,910,674) Changes of assumptions 58,376 (1,864,528) Changes in proportion and differences between contributions and proportionate share of contributions 1,118,297 (707,861) Contributions subsequent to the measurement date 1,669,042 Total $4,069,914 ($8,017,246) Deferred outflows of resources related to pensions resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended December 31 PERS 1 PERS 2/3 PSERS 2 LEOFF 1 LEOFF 2 Total 2020 ($73,676)($648,730)($1,639)($16,718)($572,948)($1,313,711) 2021 (174,517)(1,128,808)(3,192)(36,848)(1,091,260)($2,434,626) 2022 (62,278)(465,012)(1,993)(13,371)(498,713)($1,041,367) 2023 (23,273)(219,136)(1,168)(5,039)(268,474)($517,090) 2024 (41,798)(255)(94,517)($136,570) Thereafter 56,069 (1,326)(227,756)($173,013) Total ($333,744) ($2,447,415)($9,574)($71,976) ($2,753,667) ($5,616,377) September 15, 2020 Agenda Packet Page 159 of 294 Notes to the Financial Statements 40<< BFS Table of Contents Basic Financial Statements City of Bothell Fire Fighter’s Pension FundThe Fire Fighter’s Pension is a closed single-employer defined benefit pension plan system operated by the City in accordance with Revised Code of Washington Chapter 41.18. Membership is limited to firefighters employed prior to March 1, 1970. The City’s obligation under the system is composed of excess benefits over LEOFF for fire fighters retired after March 1, 1970, who are members of the system. Benefits and refunds of the Plan are recognized when due and payable in accordance with the terms of the Plan. There are three inactive plan members currently receiving benefits, and there are no active plan members. Under State law, the Plan is provided an allocation of 25% of all moneys received by the State from taxes on fire insurance premiums, interest earnings, member contributions made prior to the inception of LEOFF, and the City contributions required to meet projected future pension obligations. In 2019, the fire insurance premium receipts amounted to $66,452, which was sufficient to cover the 2019expenses of $60,711. It is the City’s opinion that it will be able to meet any future funding requirements.Beginning in 2019 the financial activity of the Firefighters’ Pension Plan is reported in the City’s general fund in governmental statements, as a result of GASB Statement No. 73 and No 84 (Refer Note 22). The City administers the pension plan, but it is funded 100% by a percentage of the tax on fire insurance premiums received annually from the state. Future fire insurance premium tax revenues are assumed to increase at the rate of 2.5% per year. The City performed a non-standard study for the purpose of determining net pension liability of the Plan. The study assumed post-retirement benefit salary increase of 3.0% and mortality rates using the 2015 Social Security Life Table. As of December 31, 2019, the City had a net pension liability of $55,236 as shown below which is included in the net pension liability of $6,390,187 for governmental activities: Firefighter Pension Trust (LEOFF) As of 12/31/2019 NOTE 8 - OTHER EMPLOYEE BENEFITS COMPENSATED ABSENCESThe City has vacation and sick leave policies. Vacation pay may accumulate up to 240 hours at December 31. It is payable upon resignation, retirement, or death. Sick leave may accumulate up to 960 hours, or as provided by contract. Sick leave does not vest until retirement. Liquidation of the liability for compensated absences in prior years has been used by the General Fund and enterprise funds. Age at Life Expectancy 2016 City's Portion Annual Total Payments Total Payments Current Net Pension Name 12/31/19 Social Security Life Table Annual Payments Increase Rate At Expectancy Present Value Assets Asset (Liabilities) Retiree A 74 11.8 $21,099 2.5% ($285,487) ($213,327) Retiree B 96 2.66 23,680 2.5%(64,304)(60,216) Retiree C 76 10.58 14,337 2.5%(171,211)(131,848) Total $59,117 ($521,002)($405,390)$350,154 ($55,236) Government Activities 1/1/19 Increases Decreases 12/31/19 Governmental funds 3,071,869 4,080,506 4,209,483 2,942,892 Total Compensated Absences $3,071,869 $4,080,506 $4,209,483 $2,942,892 Business-Type Activities 1/1/19 Increases Decreases 12/31/19 Enterprise funds 175,186 312,051 297,210 190,028 Total Compensated Absences $175,186 $312,051 $297,210 $190,028 September 15, 2020 Agenda Packet Page 160 of 294 Notes to the Financial Statements 41<< BFS Table of Contents Basic Financial Statements City of Bothell DEFERRED COMPENSATIONThe City offers its employees two deferred compensation plans, created in accordance with the Internal Revenue Code Section 457. The International City Manager’s Association (ICMA) plan is available to all eligible employees. The Nationwide Retirement Solutions plan is available to all eligible International Association of Firefighters (IAFF). These plans allow participants to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or in the event of an unforeseeable emergency. The City contributes a 3% match to the Police Officer’s Guild and Police Captain’s Union. Starting 2019, the City matches the contribution to Non-Represented employees based on a schedule of completed years of service. In 2019, the City’s contributions totaled $334,744, and employee contributions totaled $1,871,186. NOTE 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) In 2019, the City continued to comply GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions for the second year. This statement replaces the requirements of Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. Plan DescriptionThe City provides post-retirement health care benefits for members of the Law Enforcement Officers and Firefighters (LEOFF) retirement system hired before October 1, 1977, under a single-employer defined benefit healthcare plan administered by the City, as required by the Revised Code of Washington (RCW Chapter 41.26). Most medical coverage for eligible retirees is provided by one of the City’s medical insurance programs (AWC Benefits Trust and Northwest Firefighters Benefits Trust). Life insurance is provided by Unum Life Insurance. Under the authorization of the LEOFF Disability Board, reimbursements are made for other retiree medical expenses not covered by standard medical plan benefit provisions. MembershipAs of December 31, 2019, there were 15 LEOFF I retirees receiving these benefits. This is considered a closed group with no new eligible members. Inactive employees or beneficiaries currently receiving benefits 15 Inactive employees entitled to but not yet receiving benefits - Active employees - Total 15 Funding PolicyFunding for LEOFF I retiree healthcare costs is provided entirely by the City as required by RCW. The City’s funding policy is based upon pay-as-you-go financing requirements. It is not administered through a qualifying trust, and therefore, no assets are accumulated. An internal service fund (Self-Insurance) accounts for the contributions and payments related to OPEB. September 15, 2020 Agenda Packet Page 161 of 294 Notes to the Financial Statements 42<< BFS Table of Contents Basic Financial Statements City of Bothell Actuarial Methods and Assumptions Specific assumptions using the AMM Tool: „Assumed any remaining active members will retire immediately following the measurement date. This assumption considered that over 99 percent of LEOFF 1 members are already retired and the remaining members are eligible to retire. This approach assumes that all liabilities are fully earned and the Service Cost equals zero. In other words, the Entry Age Normal Total OPEB Liability is by definition equal to the Present Value of Future Benefits, and therefore, there is no need to make an assumption with respect to Projected Salary Changes. „Each cohort is assumed to be 100 percent male. As of the measurement date, over 98 percent of the eligible LEOFF 1 population is male. This assumption will be monitored in future versions of the AMM Tool. „Selected four age-based cohorts for the AMM Tool based upon the overall distribution of the LEOFF 1 eligible population. „Medical and long-term care costs were projected from June 30, 2018 to the measurement date of June 30, 2019 using the healthcare trend rates detailed in the 2018 LEOFF 1 Medical Benefits Actuarial Valuation Report. In 2019, the amount of benefit payment related to the participating retirees totaled $143,953. In implementing GASB Statement No. 75, the following changes since the prior valuation were implemented: The City employed the Alternative Measurement Method (AMM) developed by the Office of the State Actuary (OSA) to measure the total OPEB liability. The AMM Tool was designed for local government entities in Washington State and covered members must be active in or retired from LEOFF 1. Employers must have less than 100 total LEOFF 1 members. The federal Patient Protection and Affordable Care Act levies a 40% excise tax on employers for the value of health plan costs that exceed certain thresholds. The excise tax impacts the medical inflation trend for these plans. The AWC actuarial study projects reaching the excise tax threshold in 2028. Under AMM, only the OPEB liability is calculated. There are no deferred outflows and inflows other than the deferred outflow for payments subsequent to the measurement date. The following table represents the OPEB amounts subject to the requirements of GASB Statement 75 for the year 2019: The total OPEB liabilities are allocated between current and non-current liabilities in the Statement of Net Position of the basic financial statements. The amount of $197,584, expected to be due within one year, is a current liability. Methodology Actuarial Valuation Date 6/30/19 Actuarial Measurement Date 6/30/19 Acturaial Cost Method Entry Age Amortization Method Recognized Immediately Asset Valuation Method N/A Assumptions Discount Rate Beginning of Measurement Year 3.87% End of Measurement Year 3.50% Inflation (Based on the CPI: Urban Wage Earners & Clerical Workers, Seattle-Tacoma-Bremerton, WA - All Items.)2.75% Healthcare Trend Rates: Medical Cost Initial rate is about 6% trends down to about 5% in 2020's Long-Term Care 4.50% Medicare Part B Premimus Approximately 5%, varies by year. Mortality Rates (assume 100% male population) Bsdr Mottslity Table PP-2000 Mortality Table +1 year Healthy/-2 years Disabled Age Setback Blended 50%/50% Healthy/Disabled Mortality Improvements 100% Scale BB Projection Period Generational Medicare Participation Rate 100% Total OPEB liabilities ($6,092,981) Deferred outflows of resources 76,335 OPEB expense/expenditures (271,783) OPEB Amounts – Single Plan September 15, 2020 Agenda Packet Page 162 of 294 Notes to the Financial Statements 43<< BFS Table of Contents Basic Financial Statements City of Bothell Deferred Outflows of Resources Payments subsequent to the measurement date $76,335 Total $76,335 Total OPEB Liability 1% Decrease (2.5%) Current Rate (3.5%) 1% Increase (4.5%) Discount Rate $6,769,291 $6,092,981 $5,517,112 Total OPEB Liability 1% Decrease Current Rate 1% Increase Healthcare Trend $5,541,302 $6,092,981 $6,726,023 Net adjustment to OPEB Expense at 12/31/2019 Beginning OPEB liability (GASB 75)(6,508,717) Deferred outflows - reverse 2018 subsequent to the measurement date 7/1/18-12/31/18 88,709 Total OPEB liability at 6/30/2019 6,092,981 Deferred outflows - 2018 subsequent to the measurement date 7/1/18-12/31/18 (76,335) Net adjustment to OPEB expense at 12/31/2019 (403,362) OPEB Expense for Fiscal Year Ending Net adjustment to OPEB expense at 12/31/2019 (403,362) Deferred outflows - reverse 2018 subsequent to the measurement date 7/1/18-12/31/18 (88,709) Deferred outflows - 2019 subsequent to the measurement date 7/1/19-12/31/19 76,335 Benefit payments for year 2019 143,953 OPEB expense (271,783) A Single-Employer Defined Benefit - No Qualifying TrustPlan Name Changes of assumptionsFor OPEB plans without trust, GASB 75 requires the discount rate to be based on a yield for 20-year tax-exempt, high–quality municipal bond rate with an average rating of AA/Aa or higher. This resulted in a 3.87 percent discount rate as of June 30, 2018 and 3.5 percent measured June 30, 2019. Sensitivity of the total OPEB liability to changes in the discount rate and healthcare trend The following table represents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1- percentage-point higher than the current discount rate. The following table represents the total OPEB liability of the City for healthcare is based upon assumptions in the 2018 LEOFF 1 Medical Benefits Actuarial Valuation Report. Change in Total OPEB Liability At December 31, 2019, the City reported deferred outflows of resources related to OPEB from the following source: The deferred outflows of resources amount of $76,335 will be recognized as an expense in the period ending December 31, 2020. September 15, 2020 Agenda Packet Page 163 of 294 Notes to the Financial Statements 44<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 10 - CONTINGENCIES In the government-wide statements, arbitrage earnings liability is accrued as it is earned, and is expensed at year-end. In 2019, the City had no arbitrage excess earnings liability. LitigationThe City presented (in its financial statements) all material liabilities, including an estimate for any unresolved situations where (based on available information) management believes it is probable that the City will incur the expense. In the opinion of management, the City’s insurance policies and/or self-insurance reserves are adequate to pay all known or pending claims. Contingencies under Grant ProvisionsThe City participates in a number of federal and state assisted programs. These grants are subject to audit by the grantors of their representatives. Such audits could inherently result in requests for reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. City management does not anticipate any such allowances, but should a disallowance occur management believes a reimbursement would will be immaterial. Bond IndenturesThe City is in compliance with all significant bond indentures and restrictions. Rebate ArbitrageArbitrage occurs when the City invests funds borrowed at tax- exempt rates of interest in higher yielding taxable securities. These interest earnings in excess of interest expense must be remitted to the federal government. At the fund level, the City recognizes this liability (arbitrage earnings payable) only when it is due and payable. NOTE 11 - RISK MANAGEMENT The City of Bothell is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self-insuring, and / or jointly contracting for risk management services. WCIA has a total of 160 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, errors or omissions, stop gap, employment practices and employee benefits liability. Limits are $4 million per occurrence in the self-insured layer, and $16 million in limits above the self-insured layer is provided by reinsurance. Total limits are $20 million per occurrence subject to aggregates and sublimits. The Board of Directors determines the limits and terms of coverage annually. Insurance for property, automobile physical damage, fidelity, inland marine, and boiler and machinery coverage are purchased on a group basis. Various deductibles apply by type of coverage. Property coverage is self-funded from the members’ deductible to $750,000, for all perils other than flood and earthquake, and insured above that to $300 million per occurrence subject to aggregates and sublimits. Automobile physical damage coverage is self-funded from the members’ deductible to $250,000 and insured above that to $100 million per occurrence subject to aggregates and sublimits. In-house services include risk management consultation, loss control field services, and claims and litigation administration. WCIA contracts for certain claims September 15, 2020 Agenda Packet Page 164 of 294 Notes to the Financial Statements 45<< BFS Table of Contents Basic Financial Statements City of Bothell investigations, consultants for personnel and land use issues, insurance brokerage, actuarial, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, reinsurance and other administrative expenses. As outlined in the interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA’s assets in financial instruments which comply with all State guidelines. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. In the past 13 years insurance settlements have not exceeded insurance coverage. NOTE 12 - INTERFUND ACTIVITIES Interfund Transfers are recorded transactions that support the operations of other funds and are classified as “other financing sources or uses” in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide financial statements. Transfers are used to: 1) Move revenues from the fund with collection authorization to the Debt Service Fund as debt service principal and interest payments become due. 2) Move restricted debt proceeds to the Debt Service Fund to establish mandatory reserve accounts. 3) Move unrestricted General Fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations, including amounts provided as subsidies or matching funds for various grant programs. Interfund Services are services provided by one fund to other and are considered as reciprocal interfund activities because payment is made for services received. The City records and reports these transactions as “charges for service revenues and expenditures” in the appropriate funds. Interfund Loans provide a mechanism for one fund to borrow from another and must be approved by the legislative body. Reciprocal in activity, interfund loans are reported as interfund receivables by the lender fund and interfund payables by the borrower fund. Interfund loans are not treated as capital-related for purposes of classifying net position.In 2019, the City did not authorize budgetary transfer between governmental activities and business activities. September 15, 2020 Agenda Packet Page 165 of 294 Notes to the Financial Statements 46<< BFS Table of Contents Basic Financial Statements City of Bothell Interfund Transfers NOTE 13 - LONG-TERM DEBT General Long-Term DebtThe City typically issues general obligation to finance land acquisitions and construction of major capital infrastructure projects. General obligation bonds pledge the full faith and credit of the City. The City issues two types of general obligation bonds:limited tax general obligation (LTGO) bonds and unlimited tax general obligation (UTGO) bonds. 2013 A (Taxable) & B Limited Tax GO BondsIn 2012 the Bothell City Council authorized a $7,000,000 short- term Limited Tax General Obligation Bond Anticipation Note (2012 BAN) to pay the final balance owed to the Northshore School District for property purchased and to carry out public improvements related to the downtown revitalization. In 2013, Council authorized extension of the BAN maturity date through May 31, 2013. The BAN extension provided time for staff identify longer-term financing to accommodate the timetable necessary to sell surplus City properties. Staff determined that 20-year, bank qualified (BQ), General Obligation (GO) Bonds would provide the most advantageous financing option, given the current unprecedentedly low interest rates and the City’s capital strategy. In June 2013, the City issued Limited Tax GO Bond without a vote 2013A (taxable) $1,520,000, and GO Bond 2013B $8,145,000 to retire the 2012 BAN. Bond 2013A was paid off in 2017. The 2013B’s outstanding balance at the end of 2019 is $7,355,000. 2014 Limited Tax GO Bonds (LIFT) BondsIn 2006, the City was awarded LIFT funding for downtown revitalization. The program funding consists of future rebates of state property and sales taxes up to $1,000,000 per year for a maximum of 25 years and is allocated by the Department of Revenue (DOR) based on the State’s portion of tax collected from within the City’s designated Revenue Development Area (RDA). These rebated tax monies are restricted for debt service associated with the LIFT Bond. 2019 Unlimited Tax GO Bonds (Public Safety Bonds)In December 2019, the City issued 20-year Unlimited Tax General Obligation Bonds for principal of $23,235,000 and premium of $2,519,316. The Bonds are for the purpose of paying the costs of constructing, reconstructing, renovating and equipping two fire stations and related capital improvements. 2014 Lease Revenue BondsIn 2014, COB Properties (COB), a Washington nonprofit corporation, issued $49,625,000 COB Properties Lease Revenue Bonds for the City of Bothell City Hall Arterial LIFT 2013 Capital Self Asset Total General Street Street GO Bond GO Bond Improvements Insurance Replacement Transferred Description Fund Fund Fund Fund Fund Fund Fund Fund Out General Fund 143,953 894,205 1,038,158 Street Fund 2,683,508 2,683,508 Arterial Street Fund 2,423,815 2,423,815 Park Cumulative Reserve Fund 2,001 2,001 Public Safety Levy Fund 26,424 26,424 Capital Improvement Fund 55,873 998,850 696,063 1,750,786 Water Fund 81,334 81,334 Sewer Fund 77,338 77,338 Storm & Surface Water Fund 253,894 253,894 Equipment Rental Fund 1,082,774 1,082,774 Total Transferred In $55,873 $0 $0 $998,850 $696,063 $5,548,313 $143,953 $1,976,979 $9,420,031 September 15, 2020 Agenda Packet Page 166 of 294 Notes to the Financial Statements 47<< BFS Table of Contents Basic Financial Statements City of Bothell Project. The bonds were issued by COB on behalf of City of Bothell pursuant to IRS Revenue Ruling 63-20 and 82-26. The City leased land to COB for construction of the new City Hall and the COB leases the premises to the City. Proceeds of the bonds were used for construction of the City Hall and parking garage. Bond principal and interest payments are the responsibility of COB. Lease payments made by the City will pay debt service of the Bonds. COB is a single purpose entity and not a governmental unit. It has no taxing power and no source of funds to pay debt service on the bonds other than the lease payments from the City of Bothell. Public Works Trust Fund (PWTF) Construction LoanIn 2011, the City was awarded an $8,000,000 PC12-951-022 construction loan and is allocated to the Bothell Crossroads SR- 522 realignment construction project. This loan is considered the general government obligation and is being paid from Capital Improvement Fund with an annual principal payment of $447,123. Public Works Assistance (PWA) LoanBothell has a PWA loan 98-791-007 $1,890,000 that is an obligation of the City’s Water Fund. The loan stems from water improvement projects located within Snohomish County and the City of Bothell. Under an agreement made in 1998, the City makes an annual payment to Snohomish County, who then makes payment to the State of Washington for PWA loan 98-791-007. In 2019, the 20-year loan was paid off. Public Works Trust Fund (PWTF) Construction LoanIn 2012, the City was awarded an $800,000 construction loan (PC13-961-060) with 20-year maturity for Horse Creek enhancement project. The City finalized the project in 2016. This loan is a revenue obligation of the Storm & Surface Water Fund. The City began spending down the monies in 2014 and annual principal payment is $45,516. Public Works Assistance (PWA) LoanIn 2017, the City was received a loan of $125,000 from Snohomish County to fund installation of crosswalks with rectangular rapid flashing beacons within the City’s various locations. The outstanding balance at the end of 2019 was $103,758. Revenue BondsIn 2014, the City issued $18,355,000 in revenue bonds to finance Water, Sewer and Storm & Surface Water utility projects. The bonds are payable from revenues generated by user fees. A cash reserve is maintained in an amount equal to the lesser of (i) maximum annual debt service, (ii) 125% of average annual debt service, or (iii) 10% of the original proceeds of the bonds. The outstanding balance at the end of 2019 was $15,130,000. Interfund Loans In November 2018, voters approved two proposition measures, Public Safety Levy and Public Safety Capital Bond, to increase public safety service levels and replace two aging fire stations. In February 2019, City Council authorized an interfund loan in the amount of $2,000,000 to provide interim financing until property tax levy and bond proceeds could be collected. The Water and Sewer Funds provided the short-term financing. Interfund Loan Borrower Fund Lender Fund Principal Amount Interest Public Safety Levy Fund Water Fund 95,506 556 Public Safety Capital Fund Sewer Fund 194,310 1,445 The interfund loans bore interest at the Washington State Local Government Investment Pool (LGIP) rate until repaid. The loans were redeemed by end of 2019. September 15, 2020 Agenda Packet Page 167 of 294 Notes to the Financial Statements 48<< BFS Table of Contents Basic Financial Statements City of Bothell Debt Service requirements to maturity Debt Limit CapacitiesState law dictates that City debt cannot be incurred in excess of the following taxable percentages: 1.5% without a vote of the people; 2.5% with a vote of 2.5% is for utilities; and 7.5% with a vote of the people provided the indebtedness in excess of 2.5% is for utilities, parks, or open space development. Debt limits were based on assessed property totaling $11,415,273,674. Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Totals Governmental Activities 2020 415,000 283,463 765,000 1,231,850 447,123 13,414 740,000 879,139 12,970 1,158 1,365,000 1,888,115 8,042,230 2021 425,000 271,013 795,000 1,200,650 447,123 12,296 780,000 847,050 12,970 1,362 1,510,000 1,813,844 8,116,308 2022 440,000 258,263 835,000 1,163,875 447,123 11,178 820,000 808,050 12,970 1,167 1,590,000 1,737,594 8,125,219 2023 450,000 245,063 875,000 1,121,125 447,123 10,060 860,000 767,050 12,970 973 1,665,000 1,658,468 8,112,831 2024 470,000 227,063 920,000 1,076,250 447,123 8,942 905,000 724,050 12,970 778 1,750,000 1,575,427 8,117,603 2025-2029 2,080,000 837,313 5,355,000 4,623,875 2,235,615 27,945 5,245,000 2,895,250 38,909 1,167 10,125,000 6,506,403 39,971,478 2030-2034 3,075,000 367,125 6,875,000 3,102,625 894,246 3,353 6,430,000 1,708,650 12,245,000 4,380,721 39,081,720 2035-2039 8,835,000 1,668,875 7,455,000 684,150 14,810,000 1,546,463 34,999,488 Subtotal $7,355,000 $2,489,301 $25,255,000 $15,189,125 $5,365,477 $87,190 $23,235,000 $9,313,389 $103,758 $6,606 $45,060,000 $21,107,034 $154,566,877 Principal Interest Principal Interest Totals Business-Type Activities 2020 750,000 561,719 45,516 1,479 1,358,714 2021 780,000 531,719 45,516 1,365 1,358,600 2022 815,000 492,719 45,516 1,252 1,354,487 2023 855,000 451,969 45,516 1,138 1,353,623 2024 900,000 409,219 45,516 1,024 1,355,759 2025-2029 5,090,000 1,461,038 227,581 3,415 6,782,034 2030-2034 5,940,000 611,881 136,885 683 6,689,449 Subtotal $15,130,000 $4,520,265 $592,046 $10,355 $20,252,666 Total $174,819,543 Year 2014 Revenue Bond PWTF Loan CH Lease Revenue Bonds Year GO Bond 2013 B GO 2014 LIFT Bond PWTF Loan Snohomish County PWAFPublic Safety Bonds Regular levy assessed value less annexations $11,415,273,674 Item Without a Vote With a Vote of the People Total Capacity 1.5%1.0%2.5%2.5%7.5% Legal limit $171,229,105 $114,152,737 $285,381,842 $285,381,842 $856,145,526 Outstanding net debt 86,645,530 25,754,362 112,399,891 Margin available $84,583,576 $88,398,375 $285,381,842 $285,381,842 $743,745,634 Total September 15, 2020 Agenda Packet Page 168 of 294 Notes to the Financial Statements 49<< BFS Table of Contents Basic Financial Statements City of Bothell Changes in Long-Term Liabilities Beginning Ending Balance Balance Due Within Description 1/01/2019 Additions Reductions 12/31/2019 One Year Governmental Activities GO 2013 B Bond $7,755,000 $400,000 $7,355,000 $415,000 GO 2013 A&B Bond Premium 341,427 22,762 318,665 22,762 GO 2014 LIFT Bond 25,995,000 740,000 25,255,000 765,000 GO 2014 LIFT Bond Premium 1,709,676 85,484 1,624,193 85,484 GO Public Safety Bonds 23,235,000 23,235,000 740,000 GO Public Safety Bonds Premium 2,519,362 2,519,362 125,968 PWTF Loan PC12-951-022 5,812,600 447,123 5,365,477 447,123 Sno. County Safe School Crossing Loan 55,542 54,388 6,171 103,758 12,970 COB Lease Revenue Bonds 46,375,000 1,315,000 45,060,000 1,365,000 COB Lease Revenue Bonds Premium 1,641,609 78,172 1,563,437 78,172 OPEB/LEOFF 6,508,717 415,736 6,092,981 197,584 Compensated Absences 3,071,869 4,080,506 4,209,483 2,942,892 2,942,892 Pension 7,962,133 6,348,358 7,920,304 6,390,187 Pollution Remediation 3,650,000 1,554,000 2,096,000 1,745,000 Subtotal $110,878,573 $36,237,613 $17,194,234 $129,921,951 $8,942,955 Business-Type Activities PWTF Loan PC 13-961-060 $637,562 $45,516 $592,046 $45,516 Combined Utility Revenue Bonds 2014 15,850,000 720,000 15,130,000 750,000 Combined Utility Revenue Bonds 2014 Premium 996,683 63,281 933,401 63,281 Pension 476,741 257,217 476,741 257,217 Compensated Absences 175,186 312,051 297,210 190,028 190,028 Subtotal $18,136,171 $569,268 $1,602,748 $17,102,691 $1,048,825 Total $129,014,744 $36,806,881 $18,796,983 $147,024,643 $9,991,779 September 15, 2020 Agenda Packet Page 169 of 294 Notes to the Financial Statements 50<< BFS Table of Contents Basic Financial Statements City of Bothell Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the above totals for governmental activities. At year end, $32,831 of internal service funds compensated absences are included in the above amounts. Also, for the governmental activities, compensated absences are generally liquidated by the general fund and internal service funds respectfully and pollution remediation paid by capital project fund. Capital Related Long-Term Liability Date of Final Interest Amount of Balance Balance Due Within Description Date of Issue Maturity Rates Original Issue 1/1/2019 Issued Redeemed 12/31/2019 One Year Governmental Activities GO 2013 B Bond 6/25/13 12/1/33 3.0-4.5% $8,145,000 $7,755,000 $400,000 $7,355,000 $415,000 GO 2013 A&B Bond Premium 6/25/13 12/1/33 3.0-4.5% 455,236 341,427 22,762 318,665 22,762 GO 2014 LIFT Bond 1/3/14 3/1/39 2.0-5.0% 28,210,000 25,995,000 740,000 25,255,000 765,000 GO 2014 LIFT Bond Premium 1/3/14 3/1/39 2.0-5.0% 2,137,096 1,709,676 85,484 1,624,193 85,484 GO 2019 Public Safety Bonds 12/3/19 12/1/39 3.0-5.0% 23,235,000 23,235,000 23,235,000 740,000 GO 2019 Public Safety Bonds Premium 12/3/19 12/1/39 3.0-5.0% 2,519,362 2,519,362 2,519,362 125,968 PWTF Loan PC12-951-22 6/1/12 6/1/31 0.25% 8,000,000 5,812,600 447,123 5,365,477 447,123 COB City Hall Lease Revenue Bonds 7/1/14 12/31/39 3.6-5.0% 49,625,000 46,375,000 1,315,000 45,060,000 1,365,000 COB City Hall Lease Revenue Bonds Premium 7/1/14 12/31/39 3.6-5.0% 1,954,296 1,641,609 78,172 1,563,437 78,172 Sno. County Safe School Crossing Loan 2/27/17 2/26/27 1.50% 125,000 55,542 54,388 6,171 103,758 12,970 Subtotal $124,405,989 $89,685,854 $25,808,749 $3,094,712 $112,399,891 $4,057,478 Business-Type Activities Combined Utility Revenue Bonds 2014 10/8/14 10/8/34 2.63-5.0% 18,355,000 15,850,000 720,000 15,130,000 750,000 Combined Utility Revenue Bonds 2014 Premium 10/8/14 10/8/34 2.63-5.0% 1,265,629 996,683 63,281 933,401 63,281 PWTF Loan PC13-961-060 6/1/13 6/1/32 0.25% 800,000 637,562 45,516 592,046 45,516 Subtotal $20,420,629 $17,484,245 $828,798 $16,655,447 $858,797 Total $144,826,618 $107,170,098 $25,808,749 $3,923,509 $129,055,338 $4,916,276 September 15, 2020 Agenda Packet Page 170 of 294 Notes to the Financial Statements 51<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 14 - IMPACT FEES Park Impact FeesSince 1997, per the City’s Municipal Code, Park impact fees have been accounted for separately in a Special Revenue Fund titled Park Cumulative Reserve. The monies remain in the Special Revenue Fund until they are transferred to the City’s Capital Improvements Fund for appropriation towards park capital projects. Park impact fees are recognized as revenue when the development commences. As of December 31, 2019, park impact fee fund balance totaled $3,373,942. Traffic Impact FeesTraffic impact fees are recognized as revenue when an enforceable legal claim to the fee exists. The enforceable claim has been defined as when the local government receives the fee and development commences. Traffic impact fees are held in the Arterial Street Fund until the City Council appropriates the monies toward approved capital improvement projects. As of December 31, 2019, traffic impact fund balance totaled $5,357,161. Fire Impact Fees In 2017, fire impact fees were enacted to ensure new development bears a share of the cost of capital facilities to accommodate new growth. Funds are used solely for capital improvements within the fire impact fee service areas. Funds are expended on a “first in/first out” accounting basis. At end of 2019, the City has cumulated fire impact fees $272,264 to support capital project needs. NOTE 15 - POLLUTION REMEDIATION OBLIGATIONS In 2010, the City implemented GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations. This statement requires disclosure of “obligations to address current or potential detrimental effects of existing pollution by participating in pollution remediation activities”, and identifies five distinct “obligating events” that require the City to disclose the potential future outlays associated with remediation of contaminated sites. Once any of the five events occurs, the City documents the components of expected pollution remediation outlays that are reasonably estimable. The City then determines if some or all of the future outlays are subject to capitalization under GASB StatementNo. 49 and records those expenditures accordingly. Pollution remediation outlays should be capitalized when goods and services are acquired to prepare property in anticipation of a sale, or to prepare property for use when the property was acquired with known or suspected pollution that was expected to be remediated. Beginning in 2010, the City purchased properties for a downtown revitalization plan. As of December 31, 2019, the City has seven sites that constitute pollution remediation obligations. All sites are subject to capitalization, and all expenditures have been recorded according to GASB Statement No. 49. The sites that constitute pollution remediation obligations are: 1) Bothell Landing* – Contaminated with petroleum in soil and groundwater. 2) Bothell Riverside* – Contaminated with petroleum in soil and groundwater, as well as chlorinated solvents in groundwater. 3) Bothell Paint & Decorating* – Contaminated with petroleum in soil and groundwater, as well as heavy metals in soil. September 15, 2020 Agenda Packet Page 171 of 294 Notes to the Financial Statements 52<< BFS Table of Contents Basic Financial Statements City of Bothell 4) Former Hertz* – Contaminated with petroleum in soil and groundwater. 5) Bothell Ultra Custom Cleaners (aka Case) – Contaminated with chlorinated solvents in soil and groundwater. 6) Northshore School District – Contaminated with petroleum in soil and groundwater. The City is enrolled in Department of Ecology’s Voluntary Clean- up Program. The City performed petroleum remediation in 2010 and partnered with the Northshore School District in 2014 to clean up the off-site contamination that was found on adjacent private property. Additional cleanup may be pursued under The Pollution Liability Insurance Agency (PLIA), as directed by the City manager. 7) Bothell Service Center (aka BSC)** – Contaminated with chlorinated solvents in soil and groundwater. 8) Schuck’s/O’Reilly (aka Wexler) – Contaminated with petroleum in soil+ groundwater and chlorinated solvents groundwater (comingled BSC plume). *Four of these sites lie in the pathway of the Crossroads realignment project and were acquired with known or suspected pollution that was expected to be remediated. These four parcels are enrolled in Agreed Orders (AO) under the Department of Ecology’s remedial oversight program. **One of the sites lies in the pathway of the Main Street extension and was acquired with known or suspected pollution that was expected to be remediated. This parcel was initially enrolled in the Voluntary Clean-Up Program and was consequently enrolled in a consent decree for clean-up. The Wexler site is commingled with BSC site, and was thus incorporated into the BSD CD via an amendment Site Beginning Balance 2019 Costs FuturePetroleum FutureSolvents Total *Bothell Landing 1,289,784 27,049 112,000 1,428,833 *Bothell Riverside 1,335,130 96,931 385,000 1,817,061 *Bothell Paint & Decorating 943,537 32,124 192,000 1,167,662 *Former Hertz 885,877 46,686 224,000 1,156,563 McDonald's 11,116 52,531 63,647 Northshore School District 2,708,824 2,477,064 258,000 5,443,887 Bothell Ultra Custom Cleaners (Case)1,471,691 109,197 650,000 2,230,888 **Bothell Service Center(Up-gradient Solvent Sources)4,483,868 1,429,345 1,368,000 7,281,213 Other Sites 263,204 16,956 280,160 116th Partners Group 35,659 1,934 37,593 Schuck's/O'Reilley (Wexler)260,527 206,208 1,310,000 1,776,735 Unassigned (overall program review)218,062 13,543 231,605 Total 13,907,278 4,509,568 2,096,000 2,403,000 22,915,847 In accordance with GASB Statement 49, future petroleum costs are presented as long-term liabilities. Future solvents, which require longer cleanup time, do not meet the criteria of pollution and remediation obligation under GASB Statement 49, and therefore, are not considered long-term liabilities. (See Note 13.) September 15, 2020 Agenda Packet Page 172 of 294 Notes to the Financial Statements 53<< BFS Table of Contents Basic Financial Statements City of Bothell Site *Bothell Landing *Bothell Riverside *Bothell Paint & Decorating *Former Hertz 116th Partners Group (Clean) McDonald's Northshore School District Safeway Schuck's/O'Reilley (Wexler) Total 4,488,121 2,096,000 46,686 224,000 1,934 52,531 2019 Capitalized Costs 2019 Future Costs (Liabilities) 1,310,000 4,213,909 258,000 16,956 27,049 112,000 96,931 32,124 192,000 NOTE 16 - LEASES Operating LeasesThe City has one operating lease, the Northshore School District Operational Facility Lease. The City leases bay area from the Northshore School District’s Operational Facility for the purpose of maintenance and repair of city-owned vehicles and equipment. As of December 2019, the monthly lease payment was $6,799. Capital LeaseThe City leases Bothell City Hall from COB Properties (COB) under a capital lease arrangement. In 2015, in compliance with GAAP, the City recorded capital lease asset at the present value of future minimum lease payments as of the inception date. The asset (City Hall) acquired through capital lease is as follows Governmental Asset Activities City Hall Building $51,475,433 Less: Accumulated depreciation (4,632,789) Total $46,842,644 The present value of the future minimum lease obligations: Years Ending December 31 Capital Lease 2020 3,253,115 2021 3,323,844 2022 3,327,594 2023 3,323,615 2024 3,325,427 Thereafter 49,613,440 Total $66,167,035 September 15, 2020 Agenda Packet Page 173 of 294 Notes to the Financial Statements 54<< BFS Table of Contents Basic Financial Statements City of Bothell NOTE 17 - BLENDED COMPONENT UNIT COB is a non-profit corporation created in 2014 pursuant to Internal Revenue Service Ruling 63-20, and issued $49,625.000 lease revenue bonds for the City Hall Project. Its sole purpose was to finance, construct and lease the city hall and parking garage to the City under a capital lease arrangement. Capital lease payments from the City are the single source to pay debt service on the bonds. As part of the capital lease agreement, the City pays monthly maintenance and asset management fees to COB. In accordance with GAAP, the audited financial statements of this blended component unit are reported as an internal service fund in the City’s combining financial statements. NOTE 18 - HEALTH & WELFARE The City of Bothell is a member of the Association of Washington Cities Employee Benefit Trust Health Care Program (AWC Trust HCP). Chapter 48.62 RCW provides that two or more local government entities may, by Interlocal agreement under Chapter 39.34 RCW, form together or join a pool or organization for the joint purchasing of insurance, and/or joint self-insurance, to the same extent that they may individually purchase insurance or self-insure. An agreement to form a pooling arrangement was made pursuant to the provisions of Chapter 39.34 RCW, the Interlocal Cooperation Act. The AWC Trust HCP was formed on January 1, 2014 when participating cities, towns, and non-city entities of the AWC Employee Benefit Trust in the State of Washington joined together by signing an Interlocal Governmental Agreement to jointly self-insure certain health benefit plans and programs for participating employees, their covered dependents and other beneficiaries through a designated account within the Trust. As of December 31, 2019, 257 cities/towns/non-city entities participate in the AWC Trust HCP. The AWC Trust HCP allows members to establish a program of joint insurance and provides health and welfare services to all participating members. The AWC Trust HCP pools claims without regard to individual member experience. The pool is actuarially rated each year with the assumption of projected claims run-out for all current members. The AWC Trust HCP includes medical, dental and vision insurance through the following carriers: Kaiser Foundation Health Plan of Washington, Kaiser Foundation Health Plan of Washington Options, Inc., Regence BlueShield, Asuris Northwest Health, Delta Dental of Washington, and Vision Service Plan. Eligible members are cities and towns within the state of Washington. Non-City Entities (public agency, public corporation, intergovernmental agency, or political subdivision within the state of Washington) are eligible to apply for coverage into the AWC Trust HCP, submitting application to the Board of Trustees for review as required in the Trust Agreement.Participating employers pay monthly premiums to the AWC Trust HCP. The AWC Trust HCP is responsible for payment of all covered claims. In 2019, the AWC Trust HCP purchased stop loss insurance for Regence/Asuris plans at an Individual Stop Loss (ISL) of $1.5 million through Life Map, and Kaiser ISL at $1 million with Companion Life through ASG Risk Management. The aggregate policy is for 200% of expected medical claims. Participating employers’ contract to remain in the AWC HCP for a minimum of three years. Participating employers with over 250 employees must provide written notice of termination of all coverage a minimum of 12 months in advance of the termination date, and participating employers with under 250 employees must provide written notice of termination of all coverage a minimum of 6 months in advance of termination date. When all coverage is being terminated, termination will only occur on December 31. Participating employers terminating a group or line of coverage must notify the HCP a minimum of 60 days prior to termination. A participating employer’s termination will not obligate that member to past debts, or further contributions to the HCP. Similarly, the terminating member forfeits all rights and interest to the HCP Account. The operations of the Health Care Program are managed by the Board of Trustees or its delegates. The Board of Trustees is comprised of four regionally elected September 15, 2020 Agenda Packet Page 174 of 294 Notes to the Financial Statements 55<< BFS Table of Contents Basic Financial Statements City of Bothell officials from Trust member cities or towns, the Employee Benefit Advisory Committee Chair and Vice Chair, and two appointed individuals from the AWC Board of Directors, who are from Trust member cities or towns. The Trustees or its appointed delegates review and analyze Health Care Program related matters and make operational decisions regarding premium contributions, reserves, plan options and benefits in compliance with Chapter 48.62 RCW. The Board of Trustees has decision authority consistent with the Trust Agreement, Health Care Program policies, Chapter 48.62 RCW and Chapter 200-110-WAC. The accounting records of the Trust HCP are maintained in accordance with methods prescribed by the State Auditor’s office under the authority of Chapter 43.09 RCW. The Trust HCP also follows applicable accounting standards established by the Governmental Accounting Standards Board (“GASB”). In 2019, the retiree medical plan subsidy was eliminated, and is noted as such in this report. Year-end financial reporting is done on an accrual basis and submitted to the Office of the State Auditor as required by Chapter 200-110 WAC. The audit report for the AWC Trust HCP is available from the Washington State Auditor’s office. NOTE 19 - JOINT VENTURES AND OPERATIONS A Regional Coalition for Housing (ARCH)In November 1992, the City of Bothell joined the Cities of Kirkland, Bellevue, Redmond, and King County to establish A Regional Coalition for Housing (ARCH). The agreement was recently amended in 2010. Since its inception, King County, the Cities of Redmond, Bellevue, Kirkland, Bothell, Clyde Hill, Hunts Point, Issaquah, Kenmore, Mercer Island, Newcastle, Sammamish, Woodinville, Yarrow Point, and Beaux Arts Village joined ARCH. ARCH’s purpose is to cooperatively formulate affordable housing goals and policies and to foster efforts to provide affordable housing for low and moderate-income households by combining public funding with private sector resources. ARCH assists member governments in developing housing policies, strategies, programs, and development regulations; identifies and prioritizes projects which the member cities fund directly through their own grants, Community Development Block Grants and US Department of Housing and Urban Development’s (HUD) grants. ARCH is governed by an Executive Board composed of a Chief Executive Officer from each member. The Executive Board is responsible for review and approval of all budgetary, financial, policy and contractual matters. The Board is assisted by an administrative staff and a Citizen Advisory Board. Each member city provides operating funding and contributes operating revenues as specified in the annual budget for ARCH. Contributions from the member cities are based on each member’s population. Contributions by member agencies are held in the ARCH Housing Trust Fund Account and dispersed by the Administering Agency for approved projects. Members may withdraw from the ARCH agreement by giving one year’s written notice to the Executive Board, by December 31st of any year, of its intention to terminate, effective December 31st of the following year. Members remain legally and financially responsible for any obligation incurred while a member of ARCH. Upon dissolution, the agreement provides for distribution of all property and assets among the members based on the percentage of the total annual contributions during the period of the agreement paid by each member. The City’s share of assets is deemed immaterial and thus is not reflected in the financial statements.In 2019, the City’s contributions totaled $136,811. Budget monitoring information can be obtained from ARCH, c/o Art Sullivan, 16225 NE 87th Street, A-3, Redmond, WA 98052. 0911, Bellevue. WA 98015-0911. eCityGov AllianceOn March 25, 2002, the City of Bellevue City Council unanimously adopted a resolution establishing the eCityGov Alliance between the City of Bellevue and the Cities of Bothell, Issaquah, Kenmore, Kirkland, Mercer Island, Sammamish and Snoqualmie. Since then, additional cities and agencies have joined. The Alliance establishes on-line services through a jointly operated internet portal. In 2014 eCityGov Alliance became a non-profit corporation. Expenditures consist of September 15, 2020 Agenda Packet Page 175 of 294 Notes to the Financial Statements 56<< BFS Table of Contents Basic Financial Statements City of Bothell capital and operations costs as specified in the budget adopted by the eCityGov Alliance Executive Board, and Bellevue’s administrative costs associated with performing duties as the Alliance’s fiscal agent. Revenues consist of annual membership fees from the members of the eCityGov Alliance. In 2019, the City of Bothell paid dues totaling $42,654. The interlocal agreement may be terminated if Principals holding at least 66% of the weighted vote of all of the Principals are in concurrence. Upon termination, all property acquired shall be disposed of as follows: (1) property contributed without charge by any member shall revert to the contributor; (2) all property purchased after the effective date of the interlocal agreement shall be distributed to the Principals based upon each Principal’s proportional ownership interest at the time of the sale of the property. The City’s share of assets is deemed immaterial and thus not reflected in the financial statements. Budget monitoring information may be obtained from City of Bellevue, Information Technology Department, c/o Tarik Rahmani, P.O. Box 90012, Bellevue, WA 98009. North East King County Regional Public Safety Communications Agency (NORCOM)In November 2007, the City of Bothell, with the Cities of Bellevue, Kirkland, Clyde Hill, Medina, Mercer Island, and Snoqualmie, along with Eastside Fire and Rescue, King County Fire Protection Districts 27 and 45, King and Kittitas County Fire Protection District 51, Northshore Fire Department, Shoreline Fire Department, and Woodinville Fire and Life Safety District entered into an interlocal agreement to establish and maintain a consolidated emergency service communications center to the public for emergency medical services, fire and law enforcement. Prior to the interlocal agreement, the formation efforts were carried out under a Joint Powers Agreement originally approved in 2005 and amended in 2006 and 2007. On July 1st, 2009, the separate dispatch operations of the Cities of Bellevue and Kirkland were combined and began operating as the North East King County Regional Public Safety Communications Agency (or NORCOM). The Bothell Police Department provides emergency service communications and dispatching services for its law enforcement personnel. Bothell and NORCOM are each Public Safety Answering Points (PSAP) for the purposes of the E9-1-1 system, which requires that each PSAP have a backup agency to provide emergency communications and dispatch services in the event of a disruption in the PSAP’s abilities to provide those services at its own primary facility. NORCOM serves as backup facilities for the Bothell Police Department. NORCOM includes 911 telephone answering, computer aided dispatch of fire, police and EMS resources, public safety field technology and a records management system. Operating revenues are provided by user fees charged to each member based on average call volume. In 2019, the City of Bothell paid $367,660 for NORCOM services. Additional financial information can be obtained from NORCOM, c/o Gwen Pilo, Finance Manager, P.O. Box 50911, Bellevue. WA 98015-0911. Hazardous Materials Unit and Response Team (HazMat)In January 1984, the City of Bothell joined the cities of Bellevue, Kirkland, Redmond, and King County Fire Protection Districts 16 and 36 to form a Hazardous Materials Unit and Response Team (HazMat). In December 1991, the agreement was modified to designate the City of Bellevue as the lead agency. Current members are the cities of Bellevue, Kirkland, Redmond, Bothell, Snoqualmie, and Duvall along with Eastside Fire & Rescue, Woodinville Fire & Life Safety, and King County Fire District 27. The HazMat unit provides equipment and personnel for the management of hazardous material incidents as a normal function of fire protection services. The HazMat team is governed by a Joint Board comprised of the Fire Chiefs of the member agencies plus one member from the HazMat team. The Joint Board is responsible for formulating policy, establishing annual budgets, and acquiring, holding, and disposing of real and personal property. With the exception of the member from the HazMat team, each representative on the Joint Board has a vote on all matters. September 15, 2020 Agenda Packet Page 176 of 294 Notes to the Financial Statements 57<< BFS Table of Contents Basic Financial Statements City of Bothell The City of Bellevue has the administrative authority for operations conducted pursuant to the agreement and provides administrative and secretarial support to the Joint Board. Members withdrawing from the agreement relinquish all rights to any reserve funds, equipment, or material purchased. Upon dissolution, the agreement provides for distribution of assets among the members based on the percentage of the total annual charges paid by each member over the life of the agreement. The City’s share of assets is deemed immaterial and thus is not reflected in the financial statements. Operating revenues are provided by an annual change assessed each member’s property values and number of emergency incidents. The City of Bothell’s assessment was $10,210 in 2019. Budget monitoring information can be obtained from Eastside Hazardous Materials Joint Board, c/o Babette Bechtold, Bellevue Fire Department, 450 110th Ave NE, Bellevue, WA 98004. Sound Cities Association (SCA) In 1970, Sound Cities Association (SCA) was formed to help cities act locally and partner regionally to create vital, livable communities through advocacy, education, leadership, mutual support and networking. The City of Bothell is among 38 cities represented by SCA having a population less than 150,000. The SCA Board of Directors oversees the general activities of the Association, and governs the organization by establishing broad policies and objectives for SCA. Operating revenues are provided by membership dues based on population. Upon dissolution of SCA, any funds or assets shall be distributed to member cities and towns pursuant to the same formula used to determine membership dues. The City’s share of assets is deemed immaterial and thus is not reflected in the financial statements. The City of Bothell’s dues were $17,979 in 2019. For additional information contact Deanna Dawson, Executive Director, deanna@soundcities.org. North Sound Metro SWAT In 2013, City of Bothell joined the North Sound Metro Special Weapons and Tactics (SWAT) Crisis Negotiating Team, which is a regional team made up of the following cities: Edmonds, Kirkland, Lake Forest Park, Lynnwood, Mill Creek, Monroe, Mountlake Terrace, Redmond, and Mukilteo. The Executive Board is comprised of the Police Chiefs of all participating cities. The Board reviews and approves changes and updates to the SWAT Policy and Procedures Manual and gives approval and direction on operational matters. Operating revenues are provided by contributions from the participating cities based on population. Upon termination of the SWAT team, any funds or jointly purchased assets will be distributed to the participating cities. The City’s share of assets is deemed immaterial and thus is not reflected in the financial statements. The City of Bothell’s dues were $4,868 for 2019. Budget monitoring information can be obtained from Assistant Chief Jim Lawless, City of Edmonds, 250 5th Ave North, Edmonds, WA 98020. NOTE 20 - GOVERNMENTAL FUND BALANCES AND RECONCILIATION TO THE NET POSITION Governmental fund balances are classified as either spendable or non-spendable. Spendable fund balances are further categorized as restricted, committed, assigned, and unassigned. Restricted amounts are constrained to specific purposes by higher levels of government (such as Federal or State), grantors, bondholders, constitutional provisions or enabling legislation. Committed amounts are amounts specified by the government itself (City Council), and cannot be used for any other purpose than specified by the City Council through resolution. Assigned amounts reflect an intent by the local government (City Council), to use for a specific purpose and delegates the authority to an official or body of the government. Unassigned amounts are available for any purpose of the government with only positive amounts that should be reported in the General Fund. An itemization of designated fund balance categories from the Governmental Funds Balance Sheet is shown below: September 15, 2020 Agenda Packet Page 177 of 294 Notes to the Financial Statements 58<< BFS Table of Contents Basic Financial Statements City of Bothell Fund Balance for Governmental Funds December 31, 2019 The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. The elements of the reconciliation consist of all the noncurrent financial resources and therefore are not reported in the governmental funds as below: „Capital assets „Long-term outstanding debts „Pension/OPEB assets/liabilities/deferred outflows/inflows „Pollution remediation liabilities „Compensated absences liabilities „The assets and liabilities of internal service funds include in governmental activities in the statement of net position Special Revenue Fund Nonmajor Total Arterial Capital Public Safety Governmental Governmental General Street Improvements Capital Funds Funds Fund Balances: Restricted for: Parks donations $10,772 $10,772 Police donations 53,707 53,707 Fire donations 55,701 55,701 Tourism 361,458 361,458 Tourism capital 272,471 272,471 Fire Pension (from Fund 604)350,154 350,154 Transportation 5,357,161 5,357,161 Parks and recreation 3,373,942 3,373,942 Capital projects 6,597,820 25,281,015 31,878,836 Street maintenance 1,521,086 1,521,086 Drug forfeitures 11,035 108,514 119,549 Fire impact fees 272,264 272,264 Public safety levy 2,343,353 2,343,353 Cemetery services 16,321 16,321 Committed to: Advance travel 15,000 15,000 Imprest funds 1,750 1,750 Cemetery services 67,692 67,692 Assigned to: Capital projects 1,711,130 1,711,130 Unassigned:7,281,206 7,281,206 Total $10,124,384 $5,357,161 $6,597,820 $25,281,015 $7,703,172 $55,063,553 Major Capital Projects Fund September 15, 2020 Agenda Packet Page 178 of 294 Notes to the Financial Statements 59<< BFS Table of Contents Basic Financial Statements City of Bothell Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position NOTE 21 - TAX ABATEMENT Tax abatement is a reduction in tax revenues that result from an agreement between one or more governments and an individual or entity in which: a) one or more governments promise to forgo tax revenues to which they are otherwise entitled, and b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. The City of Bothell, itself, does not have any tax abatement agreements with other entities or individuals. However, the State of Washington provides various tax abatement programs that reduce the amount of tax revenues that flow through to the local jurisdictions. In 2019, the Department of Revenue provided tax abatement programs to biotechnology and high-technology entities within the city limits which reduced the City’s sales tax revenues by $151,840 and $327,508 respectively. The Department of Revenue’s reported figures are estimates based upon calendar year 2017 as a proxy for fiscal year 2019. Additional information regarding the state tax abatement programs can be found on the Department of Revenue’s website: https://dor.wa.gov/doing-business/information-local-governments/governmental-accounting-standards-board-gasb-statement-no-77 NOTE 22 - ACCOUNTING AND REPORTING CHANGES Change in accounting principleBeginning in 2019, the Firefighter’s Pension Fund is reported in the City’s general fund in governmental statements as a result of GASB Statement No. 73. It was previously reported in the fiduciary fund statements under GASB Statement No. 68. The pension standards in GASB Statement No. 68 are applicable only to pension plans that are administered through trusts or equivalent arrangements in which: a. Contributions from employers to the pension plan and earnings on those contributions are irrevocable. b. Pension plan assets are dedicated to providing pensions to plan members in accordance with benefit terms. c. Pension plan assets are legally protected from the creditors of employers, the plan administrator and plan members. Gov fund bal convert to Arterial Capital Public Safety Capital Comp Pollution Pension Deferred Outflows/Net Position Gov wide net position General Street Improvements Capital Assets absences Liability Assets/Liabilities Inflows - Pension Invest in capital net of debt 658,597,128.04 (81,427,508.30)(5,469,234.86)571,700,384.88 Restricted Net pension assets 11,288,765.00 11,288,765.00 General 754,108.28 754,108.28 754,108.28 Pension 350,154.38 350,154.38 350,154.38 Transportation 5,357,161.42 5,357,161.42 5,357,161.42 Parks and recreation 3,373,942.08 3,373,942.08 3,373,942.08 Capital projects 6,597,820.46 25,281,015.35 31,878,835.81 (25,503,147.98)6,375,687.83 Street maintainance 1,521,086.49 1,521,086.49 1,521,086.49 Drug Forfeitures 11,035.00 108,513.81 119,548.81 119,548.81 Fire impact fees 272,263.52 272,263.52 272,263.52 Public safety levy 2,343,352.53 2,343,352.53 2,343,352.53 Cemetery services 16,321.00 16,321.00 16,321.00 Unrestricted 9,009,086.31 67,692.33 9,076,778.64 (2,942,892.41) (6,092,981.00) (2,096,000.00) (6,390,186.62) (2,901,807.60) 1,462,314.84 (9,884,774.15) Total 10,124,383.97 5,357,161.42 6,597,820.46 25,281,015.35 7,703,171.76 55,063,552.96 658,597,128.04 (106,930,656.28) (5,469,234.86) (2,942,892.41) (6,092,981.00) (2,096,000.00) 4,898,578.38 (2,901,807.60) 1,462,314.84 593,588,002.07 Fund Balance for Governmental funds Net Position of Governmental Activities Other Governmental Total Governmental Funds GO bond PWTF Loan OPEB Internal Service Funds September 15, 2020 Agenda Packet Page 179 of 294 Notes to the Financial Statements 60<< BFS Table of Contents Basic Financial Statements City of Bothell In re-evaluation of the Firefighter’s Pension Plan, the Plan does not meet the requirement “a” that the contributions and earning on the contributions are irrevocable and “c” that assets be legally protected from the creditors of employers, the plan administrator and plan members. Therefore, the assets are not accumulated in a qualifying trust or equivalent arrangement as required for GASB 68 reporting purposes. In 2019, complying with GASB 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the scope of GASB Statement No. 68, the financial activities are merged within the General Fund. As result of the change, the Statement of Activities reflects a restatement of $344,413 for the Firemen’s Pension Reserve. GASB implementationEffective for fiscal year 2019 reporting, the City adopted GASB Statement No. 84 Fiduciary Activities. The primary objective of this Statement is to enhance the consistency and comparability for fiduciary activity reporting by state and local governments. Also, it is intended to improve the usefulness of information for assessing the accountability of governments in their roles as fiduciaries. Activities that should be reported in fiduciary funds consist of the following (GASB 84 paragraph 15-18): „Pension/OPEB „Investment trust funds „Private-purpose trust funds „Custodial funds The City conducted a thorough research and concluded that no activity meets the fiduciary fund reporting. The pension trust and agency fund that were previously reported as fiduciary funds are now combined in the General Fund. NOTE 23 - SUBSEQUENT EVENT In February 2020, the Governor of the State of Washington declared a state of emergency in response to the spread of a deadly new strain of coronavirus (COVID-19). In the weeks following the declaration, precautionary measures to slow the spread of the virus had been ordered. These measures included closing schools, colleges and universities, cancelling public events, prohibiting public and private gatherings, and requiring people to stay home unless they were leaving for an essential function. The City is currently evaluating the impact and taking steps to mitigate the effects of lost revenues, including: „Pausing all hiring and overtime, with specific position exceptions „Scrutinizing operational budget to cut spending and look for efficiencies „Freezing all travel and training „10% furlough for management, non-union and AFSCME union employees „Laying off 14 positions as of June 1, 2020 „Cancelling various public events While it is reasonably possible that the virus will have a negative effect on the City’s operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements therefore, do not include any adjustments that might result from the outcome of this uncertainty.September 15, 2020 Agenda Packet Page 180 of 294 September 15, 2020 Agenda Packet Page 181 of 294 REQUIRED SUPPLEMENTALINFORMATION September 15, 2020 Agenda Packet Page 182 of 294 Required Supplemental Information 1 Required Supplemental Information City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual General Fund For the Year Ended December 31, 2019 2019 Actual 2020 Actual Variance with Amounts Amounts Total Final Budget Budgetary Budgetary 2019-2020 Positive Original Final Basis Basis Actuals (Negative) REVENUES Taxes 77,577,768$ 77,577,768$ 36,146,359$ 36,146,359$ (41,431,409)$ Licenses and permits 7,805,000 7,805,000 3,765,483 3,765,483 (4,039,517) Intergovernmental revenues 2,223,700 2,768,700 1,896,589 1,896,589 (872,111) Charges for services 18,392,362 18,392,362 10,581,044 10,581,044 (7,811,318) Fines and forfeitures 830,100 830,100 200,325 200,325 (629,775) Interest earnings 1,325,400 1,325,400 1,421,901 1,421,901 96,501 Contributions 112,000 112,000 32,841 32,841 (79,159) Other revenue 1,166,250 1,166,250 566,419 566,419 (599,831) Total revenues 109,432,580 109,977,580 54,610,961 54,610,961 (55,366,619) EXPENDITURES Current General government 26,822,984 26,822,984 12,986,607 12,986,607 13,836,377 Security of persons and property 56,026,229 56,026,229 28,578,492 28,578,492 27,447,737 Transportation 11,278,436 11,278,436 5,176,935 5,176,935 6,101,501 Physical environment 47,500 47,500 19,313 19,313 28,187 Economic environment 10,151,374 10,684,374 4,679,029 4,679,029 6,005,345 Culture and recreation 5,069,036 5,069,036 2,406,418 2,406,418 2,662,618 Debt service Debt service - interest Capital outlay 150,000 150,000 22,019 22,019 127,981 Total expenditures 109,545,559 110,078,559 53,868,814 53,868,814 56,209,745 Excess of revenues over (under) expenditures (112,979) (100,979) 742,147 742,147 843,126 OTHER FINANCING SOURCES (USES) Transfers in 1,398,000 1,398,000 55,873 55,873 (1,342,127) Transfers out (1,716,448) (1,716,448) (1,038,158) (1,038,158) 678,290 Total other financing sources (318,448) (318,448) (982,285) (982,285) (663,837) Net change in fund balances (431,427)$ (419,427)$ (240,137)$ (240,137)$ 179,290$ FUND BALANCES - JANUARY 1, 2019 10,529,222 10,529,222 10,020,108 10,020,108 (509,114) Restatement per GASB 73 & 84 implementation (see note 22)344,413 344,413 344,413 FUND BALANCES - DECEMBER 31, 2019 10,097,795$ 10,109,795$ 10,124,384$ 10,124,384$ 14,589$ 2019-2020 Budgeted Amounts September 15, 2020 Agenda Packet Page 183 of 294 Required Supplemental Information 2 Required Supplemental Information City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Arterial Street Fund For the Year Ended December 31, 2019 2019 2020 Actual Amounts Actual Amounts Total Final Budget Budgetary Budgetary 2019-2020 Positive Original Final Basis Basis Actuals (Negative) REVENUES Intergovernmental revenues Charges for services 7,404,438$ 7,404,438$ 2,171,233$ 2,171,233$ (5,233,205)$ Interest earnings Other revenue Total revenues 7,404,438 7,404,438 2,171,233 2,171,233 (5,233,205) EXPENDITURES Current Construction projects Capital outlay Debt service - principal Debt service - interest Total expenditures Excess of revenues over (under) expenditures 7,404,438 7,404,438 2,171,233 2,171,233 (5,233,205) OTHER FINANCING SOURCES (USES) Transfers in - Transfers out (5,105,192)(5,105,192)(2,423,815)(2,423,815)2,681,377 Total other financing sources (5,105,192)(5,105,192)(2,423,815)(2,423,815)2,681,377 Net change in fund balances 2,299,246$ 2,299,246$ (252,582)$ (252,582)$ (2,551,828)$ FUND BALANCES - JANUARY 1, 2019 6,725,859 6,725,859 5,609,743 5,609,743 (1,116,116) FUND BALANCES - DECEMBER 31, 2019 9,025,105$ 9,025,105$ 5,357,161$ 5,357,161$ (3,667,944)$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 184 of 294 Required Supplemental Information 3 Required Supplemental Information City of Bothell Schedule of Proportionate Share of the Net Pension Liability PERS 1 As of June 30, 2019 Last 10 Fiscal Years* 2015 2016 2017 2018 2019 Employer's Proportion of the Net Pension Liability (Asset)0.121450%0.122680%0.117383%0.127456%0.129991% Employer's Proportionate Share of the Net Pension Liability $6,352,964 $6,588,494 $5,569,915 $5,692,228 $4,995,537 TOTAL $6,352,964 $6,588,494 $5,569,915 $5,692,228 $4,995,537 Covered Payroll $13,786,742 $14,498,305 $14,618,695 $16,801,936 $18,137,865 Employer's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 46.08%45.44%38.10%33.88%27.54% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 59.10%57.03%61.24%63.22%67.12% *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 185 of 294 Required Supplemental Information 4 Required Supplemental Information City of Bothell Schedule of Proportionate Share of the Net Pension Liability PERS 2/3 As of June 30, 2019 Last 10 Fiscal Years* 2015 2016 2017 2018 2019 Employer's Proportion of the Net Pension Liability (Asset)0.151904%0.150951%0.145687%0.158377%0.164374% Employer's Proportionate Share of the Net Pension Liability $5,427,617 $7,650,613 $5,061,927 $2,704,146 $1,596,630 TOTAL $5,427,617 $7,650,613 $5,061,927 $2,704,146 $1,596,630 Covered Payroll $13,515,966 $14,191,416 $14,283,210 $16,465,729 $17,933,897 Employer's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 40.16%53.91%35.44%16.42%8.90% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 89.20%85.82%90.97%95.77%97.77% *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 186 of 294 Required Supplemental Information 5 Required Supplemental Information City of Bothell 2015 2016 2017 2018 2019 Employer's Proportion of the Net Pension Liability (Asset)0.042517%0.051392%0.054591%0.054126%0.043737% Employer's Proportionate Share of the Net Pension Liability $7,760 $21,841 $10,767 $671 ($5,688) TOTAL $7,760 $21,841 $10,767 $671 ($5,688) Covered Payroll $129,922 $166,553 $194,556 $212,416 $203,968 Employer's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 5.97%13.11%5.53%0.32%-2.79% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 95.08%90.41%96.26%99.79%101.85% Schedule of Proportionate Share of the Net Pension Liability PSERS 2 As of June 30, 2019 Last 10 Fiscal Years* *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 187 of 294 Required Supplemental Information 6 Required Supplemental Information City of Bothell Schedule of Proportionate Share of the Net Pension Liability LEOFF 1 As of June 30, 2019 Last 10 Fiscal Years* 2015 2016 2017 2018 2019 Employer's Proportion of the Net Pension Liability (Asset)0.037398% 0.037459% 0.036842% 0.036077%0.035125% Employer's Proportionate Share of the Net Pension Liability ($450,729) ($385,935) ($558,974) ($654,979) ($694,285) State's Proportionate Share of the Net Pension Liability (Asset) Associated with the Employer ($3,067,869) ($2,610,454) ($3,780,888) ($4,430,259) ($4,696,124) TOTAL ($3,518,598) ($2,996,389) ($4,339,862) ($5,085,238) ($5,390,408) Covered Payroll Employer's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 127.36%123.74%135.96%144.42%148.78% *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 188 of 294 Required Supplemental Information 7 Required Supplemental Information City of Bothell 2015 2016 2017 2018 2019 Employer's Proportion of the Net Pension Liability (Asset)0.446157%0.442168%0.433695%0.495674%0.457065% Employer's Proportionate Share of the Net Pension Liability ($4,585,602)($2,571,782)($6,018,281)($10,063,263)($10,588,793) LEOFF 2 Employers Only - State's Proportionate Share of the Net Pension Liability (Asset) Associated with the Employer ($3,032,006)($1,676,615)($3,903,947)($6,515,773)($6,934,241) TOTAL ($7,617,608)($4,248,397)($9,922,228)($16,579,036)($17,523,034) Covered Payroll $13,047,275 $13,395,080 $13,567,101 $16,202,202 $16,015,195 Employer's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll -58.38%-31.72%-73.13%-102.33%-109.42% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 111.67%106.04%113.36%118.50%119.43% Schedule of Proportionate Share of the Net Pension Liability LEOFF 2 As of June 30, 2019 Last 10 Fiscal Years* *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 189 of 294 Required Supplemental Information 8 Required Supplemental Information City of Bothell Schedule of Employer Contributions PERS 1 As of December 31, 2019 Last 10 Fiscal Years* 2015 2016 2017 2018 2019 Statutorily or Contractually Required Contributions $630,678 $701,167 $769,301 $892,390 $948,008 Contributions in Relation to the Statutorily or Contractually Required Contributions ($630,678)($701,167)($769,301)($892,390)($948,008) Contribution Deficiency (Excess) Covered Payroll $14,176,738 $14,322,135 $15,527,021 $17,521,949 $19,075,356 Contributions as a Percentage of Covered Payroll 4.45%4.90%4.95%5.09%4.97% *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 190 of 294 Required Supplemental Information 9 Required Supplemental Information City of Bothell 2015 2016 2017 2018 2019 Statutorily or Contractually Required Contributions $784,160 $883,523 $1,035,078 $1,292,595 $1,448,655 Contributions in Relation to the Statutorily or Contractually Required Contributions ($784,160)($883,523)($1,035,078)($1,292,595)($1,448,655) Contribution Deficiency (Excess) Covered Payroll $13,898,168 $14,181,934 $15,178,196 $17,242,855 $18,755,650 Contributions as a Percentage of Covered Payroll 5.64%6.23%6.82%7.50%7.72% Schedule of Employer Contributions PERS 2/3 As of December 31, 2019 Last 10 Fiscal Years* *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 191 of 294 Required Supplemental Information 10 Required Supplemental Information City of Bothell Schedule of Employer Contributions PSERS 2 As of December 31, 2019 Last 10 Fiscal Years* 2015 2016 2017 2018 2019 Statutorily or Contractually Required Contributions $8,910 $12,814 $13,654 $13,646 $17,786 Contributions in Relation to the Statutorily or Contractually Required Contributions ($8,910)($12,814)($13,654)($13,646)($17,786) Contribution Deficiency (Excess) Covered Payroll $137,513 $194,445 $205,096 $199,465 $248,953 Contributions as a Percentage of Covered Payroll 6.48%6.59%6.66%6.84%7.14% *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 192 of 294 Required Supplemental Information 11 Required Supplemental Information City of Bothell 2015 2016 2017 2018 2019 Statutorily or Contractually Required Contributions -$ -$ -$ -$ -$ Contributions in Relation to the Statutorily or Contractually Required Contributions -$ -$ -$ -$ -$ Contribution Deficiency (Excess) Covered Payroll -$ -$ -$ -$ -$ Contributions as a Percentage of Covered Payroll NA NA NA NA NA Schedule of Employer Contributions LEOFF 1 As of December 31, 2019 Last 10 Fiscal Years* *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 193 of 294 Required Supplemental Information 12 Required Supplemental Information City of Bothell Schedule of Employer Contributions LEOFF 2 As of December 31, 2019 Last 10 Fiscal Years* 2015 2016 2017 2018 2019 Statutorily or Contractually Required Contributions $689,895 $674,658 $769,582 $851,004 $863,232 Contributions in Relation to the Statutorily or Contractually Required Contributions ($689,895)($674,658)($769,582)($851,004)($863,232) Contribution Deficiency (Excess) Covered Payroll $13,175,218 $13,364,894 $14,792,634 $16,079,675 $16,514,920 Contributions as a Percentage of Covered Payroll 5.24%5.05%5.20%5.29%5.23% *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 194 of 294 Required Supplemental Information 13 Required Supplemental Information City of Bothell 2016 2017 2018 2019 Statutorily or Contractually Required Contributions $42,705 $57,336 $64,902 $66,452 Contributions in Relation to the Statutorily or Contractually Required Contributions ($40,946)($67,108)($54,257)($60,711) Contribution Deficiency (Excess)$1,759 ($9,772)$10,645 $5,742 Covered Payroll -$ -$ -$ -$ Contributions as a Percentage of Covered Payroll N/A N/A N/A N/A Schedule of Employer Contributions Firefighters’ Pension Fund As of December 31, 2019 Last 10 Fiscal Years* *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 195 of 294 Required Supplemental Information 14 Required Supplemental Information City of Bothell Schedule of Changes in Total Pension Liability and Related Ratios Firefighters’ Pension Fund As of December 31, 2019 Last 10 Fiscal Years* 2016 2017 2018 2019 Total Pension Liability Employer's total pension liability $330,775 $452,534 $386,242 $405,390 TOTAL $330,775 $452,534 $386,242 $405,390 Plan Fiduciary Net Position Employer's contribution $56,151 $57,257 $64,902 $66,452 Benefit payments ($40,946)($67,108)($54,257)($60,711) Net change in plan fiduciary net position $15,205 ($9,851)$10,645 $5,742 Plan fiduciary net position - beginning $328,414 $343,619 $333,768 $344,413 Plan fiduciary net position - ending $343,619 $333,768 $344,413 $350,154 Net pension liability (asset) ending ($12,844)$118,766 $41,829 $55,236 Plan fiduciary net position as a percentage of the total pension liability 103.88%73.76%89.17%86.37% Covered payroll -$ -$ - - Net pension liability as a % of covered payroll N/A N/A N/A N/A *Until a full 10-year trend is compiled, information is presented only for those years for which information is available. September 15, 2020 Agenda Packet Page 196 of 294 Required Supplemental Information 15 Required Supplemental Information City of Bothell 2018 2019 Total OPEB liability - beginning $6,768,799 $6,508,717 Service cost Interest 237,014 245,480 Changes in benefit terms Differences between expected and actual experience (197,865)(326,896) Changes of assumptions Benefit payments (299,231)(334,320) Other changes Total OPEB liability - ending $6,508,717 $6,092,981 Covered-employee payroll -$ -$ Total OPEB liability as a % of covered payroll N/A N/A Schedule of Changes in Total OPEB Liability and Related Ratios Single Employer OPEB Plan For the year ended June 30, 2019 Last 10 Fiscal Years* Until a full 10-year trend is compiled, information is presented only for those years for which information is available. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB 75. September 15, 2020 Agenda Packet Page 197 of 294 September 15, 2020 Agenda Packet Page 198 of 294 COMBININGFINANCIALSTATEMENTS September 15, 2020 Agenda Packet Page 199 of 294 Combining Financial Statement City of Bothell NON-MAJOR OTHER GOVERMENTAL FUNDS Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. • Street Funds - This fund is used to account for all maintenance & operation functions for the City’s transportation system. • Park Cumulative Reserve Fund - This fund is used for the acquisition & development of parks. • Drug Forfeiture Fund - This fund is used to account for monies sezed during drug policing activities. • Fire Impact Fees Fund - This fund is used for capital improvements to accomodate new growth. • Public Safety Levy Fund – This fund is used to account for public safety operational functions for the public safety levy lid lift. Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. • Cemetery Endowment Fund - This fund account for cemetery plot sales, donations, and investment earnings. Debt Service Funds funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. • 2013 General Obligation Bond Fund - This fund accounts for the retirement of general purpose bonds issued for public improvements related to the Downtown Revitalization. • 2014 Local Infrastructure Financing Tool (LIFT) Bond Fund – This fund accounts for the retirement of general purpose bonds issued for public improvements related to LIFT funding for the City’s designated Revenue Development Area (RDA). September 15, 2020 Agenda Packet Page 200 of 294 Combining Financial Statement 1 Combining Financial Statement City of Bothell Combining Balance Sheet Other Governmental Funds December 31, 2019 ASSETS Current cash & cash equivalents 180,505$ 374,274$ 108,067$ 272,264$ 102,807$ 1,037,916$ 84,013$ 1,121,929$ Investments 1,300,000 3,000,000 2,374,179 6,674,179 6,674,179 Receivables (net of allowances): Taxes Accounts receivable 1,170 1,170 1,170 Due from other governmental units 149,803 799 150,602 150,602 TOTAL ASSETS 1,631,477$ 3,374,274$ 108,866$ 272,264$ 2,476,987$ 7,863,866$ 84,013$ 7,947,880$ Accounts payable 47,080 331 352 12,004 59,767 59,767 Payroll payable 63,310 121,631 184,941 184,941 Total liabilities 110,391 331 352 133,634 244,708 244,708 DEFERRED INFLOWS OF RESOURCES Unavailable revenue Total deferred inflows of resources FUND BALANCES Restricted 1,521,086 3,373,942 108,514 272,264 2,343,353 7,619,158 16,321 7,635,479 Committed 67,692 67,692 Total fund balances 1,521,086 3,373,942 108,514 272,264 2,343,353 7,619,158 84,013 7,703,172 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 1,631,477 $ 3,374,274 108,866$ 272,264$ 2,476,987$ 7,863,866$ 84,013$ 7,947,880$ Permanent Fund Street Park Cumulative Reserve Drug Forfeitures Special Revenue Funds Fire Impact Fees Total Special Revenue Funds Cemetery Endowment Public Safety Levy LIABILITIES 2013 GO Bond Lift GO Bond Total Debt Service Funds Total Other Governmental Funds September 15, 2020 Agenda Packet Page 201 of 294 Combining Financial Statement 2 Combining Financial Statement City of Bothell Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds For the Year Ended December 31, 2019 REVENUES Taxes 4,723,479$ 72,787$ 4,793,673$ 9,589,939$ 1,000,000$ 1,000,000$ 10,589,939$ Licenses and permits 60,518 60,518 60,518 Intergovernmental revenue 1,026,128 26,382 1,052,510 1,052,510 Charges for services 21,438 643,938 49,388 714,764 714,764 Fine and forfeitures 17,050 17,050 17,050 Other revenue 3,804 3,804 3,804 Total revenues 5,835,368 716,725 17,050 49,388 4,820,055 11,438,586 1,000,000 1,000,000 12,438,586 EXPENDITURES Current General government 725,112 725,112 725,112 Security 16,442 1,724,610 1,741,052 1,741,052 Transportation 3,103,324 3,103,324 3,103,324 Capital Outlay 5,349 5,349 5,349 Other expenditures 600 600 1,200 1,200 Debt service Principal retirement 400,000 740,000 1,140,000 1,140,000 Interest 556 556 295,463 1,258,250 1,553,713 1,554,269 Total expenditures 3,108,674 16,442 2,450,278 5,575,394 696,063 1,998,850 2,694,913 8,270,306 Excess of revenues over (under) expenditures 2,726,694 716,725 609 49,388 2,369,777 5,863,192 (696,063) (998,850) (1,694,913) 4,168,280 Transfers in 696,063 998,850 1,694,913 1,694,913 Transfers out (2,683,508) (2,001) (26,424) (2,711,932) (2,711,932) Total other financing sources (2,683,508) (2,001) (26,424) (2,685,508) 696,063 998,850 1,694,913 (1,017,020) Net change in fund balances 43,187 714,724 609 49,388 2,343,353 3,151,260 3,151,260 Fund balance - beginning 1,477,900 2,659,218 107,905 222,875 4,467,899 84,013 4,551,912 Fund balance - ending 1,521,086$ 3,373,942$ 108,514$ 272,264$ 2,343,353$ 7,619,158$ 84,013$ 7,703,172$ OTHER FINANCING SOURCES (USES) Special Revenue Funds Permanent Fund Total Other Governmental Funds Street Park Cumulative Reserve Drug Forfeitures Fire Impact Fees Public Safety Levy Total Special Revenue Funds Cemetery Endowment 2013 GO Bond Lift GO Bond Total Debt Service Funds September 15, 2020 Agenda Packet Page 202 of 294 Combining Financial Statement 3 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Street Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Taxes 9,679,068$ 9,679,068$ 4,723,479$ 4,723,479$ (4,955,589)$ Licenses and permits 250,000 250,000 60,518 60,518 (189,482) Charges for services 21,438 21,438 21,438 Intergovernmental revenue 2,132,032 2,132,032 1,026,128 1,026,128 (1,105,904) Miscellaneous 3,804 3,804 3,804 Total revenues 12,061,100 12,061,100 5,835,368 5,835,368 (6,225,732) EXPENDITURES Current Personnel services 3,275,793 3,275,793 1,521,665 1,521,665 1,754,128 Operating supplies 558,250 558,250 180,811 180,811 377,439 Taxes 1,000 1,000 775 775 225 Other services and charges 3,182,237 3,182,237 1,400,074 1,400,074 1,782,163 Capital outlay 5,600 5,600 5,349 5,349 251 Total expenditures 7,022,880 7,022,880 3,108,674 3,108,674 3,914,206 Excess of revenues over (under) expenditures 5,038,220 5,038,220 2,726,694 2,726,694 (2,311,526) OTHER FINANCING SOURCES (USES) Transfers in Transfers out (5,242,000) (5,242,000) (2,683,508) (2,683,508) 2,558,492 Total other financing sources (5,242,000) (5,242,000) (2,683,508) 2,558,492 Net change in fund balances (203,780) (203,780) 43,187 43,187 246,967 Fund balance - beginning 2,347,559 2,347,559 1,477,900 1,477,900 (869,659) Fund balance - ending 2,143,779$ 2,143,779$ 1,521,086$ 1,521,086$ (622,693)$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 203 of 294 Combining Financial Statement 4 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Park Cumulative Reserve Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Taxes 64,000$ 64,000$ 72,787$ 72,787$ 8,787$ Charges for services 2,120,000 2,120,000 643,938 643,938 (1,476,062) Total revenues 2,184,000 2,184,000 716,725 716,725 (1,467,275) EXPENDITURES Current Construction projects Total expenditures Excess of revenues over (under) expenditures 2,184,000 2,184,000 716,725 716,725 (1,467,275) OTHER FINANCING SOURCES (USES) Transfers out (153,000) (153,000) (2,001) (2,001) 150,999 Total other financing sources (153,000) (153,000) (2,001) (2,001) 150,999 Net change in fund balances 2,031,000 2,031,000 714,724 714,724 (1,316,276) Fund balance - beginning 2,036,340 2,036,340 2,659,218 2,659,218 622,878 Fund balance - ending 4,067,340$ 4,067,340$ 3,373,942$ 3,373,942$ (693,398)$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 204 of 294 Combining Financial Statement 5 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Drug Forfeitures Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Charges for services 115,000$ 115,000$ 17,050$ 17,050$ (97,950)$ Total revenues 115,000 115,000 17,050 17,050 (97,950) EXPENDITURES Current Personnel services 3,000 3,000 3,000 Operating supplies 7,000 7,000 3,748 3,748 3,252 Other services and charges 12,800 12,800 12,694 12,694 106 Capital outlay 6,000 6,000 6,000 Total expenditures 28,800 28,800 16,442 16,442 12,358 Excess of revenues over (under) expenditures 86,200 86,200 609 609 (85,591) OTHER FINANCING SOURCES (USES) Total other financing sources Net change in fund balances 86,200 86,200 609 609 (85,591) Fund balance - beginning 120,027 120,027 107,905 107,905 (12,122) Fund balance - ending 206,227$ 206,227$ 108,514$ 108,514$ (97,713)$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 205 of 294 Combining Financial Statement 6 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Fire Impact Fees Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Charges for services 360,000$ 360,000$ 49,388$ 49,388$ (310,612)$ Total revenues 360,000 360,000 49,388 49,388 (310,612) EXPENDITURES Total expenditures Excess of revenues over (under) expenditures 360,000 360,000 49,388 49,388 (310,612) OTHER FINANCING SOURCES (USES) Total other financing sources Net change in fund balances 360,000 360,000 49,388 49,388 (310,612) Fund balance - beginning 192,858 192,858 222,875 222,875 30,017 Fund balance - ending 552,858$ 552,858$ 272,264$ 272,264$ (280,594)$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 206 of 294 Combining Financial Statement 7 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Public Safety Levy Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Taxes 9,847,000$ 4,793,673$ 4,793,673$ (5,053,327)$ Intergovernmental revenue 26,382$ 26,382$ 26,382$ Total revenues - 9,847,000 4,820,055 4,820,055 (5,026,945) EXPENDITURES General government 958,251 725,112 725,112 233,139 Security 7,853,063 1,724,610 1,724,610 6,128,453 Interest 556 556 (556) Total expenditures 8,811,314 2,450,278 2,450,278 6,361,036 Excess of revenues over (under) expenditures - 1,035,686 2,369,777 2,369,777 1,334,091 OTHER FINANCING SOURCES (USES) Interfund loan 1,000,000 (1,000,000) Transfer out (26,424) (26,424) (26,424) Total other financing sources 1,000,000 (26,424) (26,424) (1,026,424) Net change in fund balances - 2,035,686 2,343,353 2,343,353 307,667 Fund balance - beginning - - Fund balance - ending -$ 2,035,686$ 2,343,353$ 2,343,353$ 307,667$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 207 of 294 Combining Financial Statement 8 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Cemetery Endowment Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Total revenues EXPENDITURES Total expenditures Excess of revenues over (under) expenditures Net change in fund balances Fund balance - beginning 84,013 84,013 84,013 84,013 Fund balance - ending 84,013$ 84,013$ 84,013$ 84,013$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 208 of 294 Combining Financial Statement 9 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual General Obligation Public Safety Bond Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Bond Proceeds 25,500,000$ (25,500,000)$ Total revenues 25,500,000 (25,500,000) EXPENDITURES Current Principal retirement Interest Miscellaneous Total expenditures Excess of revenues over (under) expenditures 25,500,000 (25,500,000) OTHER FINANCING SOURCES (USES) Transfer out (25,500,000) 25,500,000 Total other financing sources (25,500,000) 25,500,000 Net change in fund balances Fund balance - beginning Fund balance - ending Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 209 of 294 Combining Financial Statement 10 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Lift GO Bond Redemption Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Taxes 2,000,000$ 2,000,000$ 1,000,000$ 1,000,000$ (1,000,000)$ Total revenues 2,000,000 2,000,000 1,000,000 1,000,000 (1,000,000) EXPENDITURES Current Principal retirement 1,505,000 1,505,000 740,000 740,000 765,000 Interest 2,490,100 2,490,100 1,258,250 1,258,250 1,231,850 Miscellaneous 600 600 (600) Total expenditures 3,995,100 3,995,100 1,998,850 1,998,850 1,996,250 Excess of revenue over (under) expenditures (1,995,100) (1,995,100) (998,850) (998,850) 996,250 OTHER FINANCING SOURCES (USES) Transfers in 1,995,100 1,995,100 998,850 998,850 (996,250) Total other financing sources 1,995,100 1,995,100 998,850 998,850 (996,250) Net change in fund balances Fund balance - beginning Fund balance - ending Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 210 of 294 Combining Financial Statement 11 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual 2013 GO Bond Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Total revenues EXPENDITURES Current Principal retirement 815,000$ 815,000$ 400,000$ 400,000$ 415,000$ Interest 578,926 578,926 295,463 295,463 283,464 Miscellaneous 600 600 (600) Total expenditures 1,393,926 1,393,926 696,063 696,063 697,864 Excess of revenue over (under) expenditures (1,393,926) (1,393,926) (696,063) (696,063) 697,864 OTHER FINANCING SOURCES (USES) Transfers in 1,393,926 1,393,926 696,063 696,063 (697,864) Total other financing sources 1,393,926 1,393,926 696,063 696,063 (697,864) Net change in fund balances Fund balance - beginning Fund balance - ending Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 211 of 294 Combining Financial Statement 12 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Capital Improvements Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Taxes 11,114,000$ 11,114,000$ 5,707,008$ 5,707,008$ (5,406,992)$ Licenses and permits 826,846 826,846 496,552 496,552 (330,294) Intergovernmental revenues 39,817,895 42,751,895 8,606,845 8,606,845 (34,145,050) Contributions 552,121 552,121 130,137 130,137 (421,984) Miscellaneous revenue 308,000 308,000 5,000 5,000 (303,000) Total revenues 52,618,862 55,552,862 14,945,542 14,945,542 (40,607,320) EXPENDITURES Current: Transportation 1,571,336 1,571,336 (1,571,336) Capital outlay 58,463,256 63,598,256 13,545,330 13,545,330 50,052,926 Debt principal 3,599,246 3,599,246 1,772,461 1,772,461 1,826,785 Interest expense 3,846,095 3,846,095 1,918,440 1,918,440 1,927,655 Total expenditures 65,908,597 71,043,597 18,807,567 18,807,567 52,236,030 Excess of revenue over (under) expenditures (13,289,735) (15,490,735) (3,862,025) (3,862,025) 11,628,710 OTHER FINANCING SOURCES (USES) Proceeds from sales of capital assets 2,281,520 2,281,520 - (2,281,520) Loans 85,550 1,200,550 54,388 54,388 (1,146,162) Transfers in 10,500,192 10,500,192 5,548,313 5,548,313 (4,951,879) Transfers out (4,787,026) (4,787,026) (1,750,786) (1,750,786) 3,036,240 Total other financing sources 8,080,236 9,195,236 3,851,915 3,851,915 (5,343,321) Net change in fund balances (5,209,499) (6,295,499) (10,110) (10,110) 6,285,389 Fund balance - beginning 6,001,439 6,001,439 6,607,931 6,607,931 606,492 Fund balance - ending 791,940$ (294,060)$ 6,597,820$ 6,597,820$ 6,891,880$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 212 of 294 Combining Financial Statement 13 Combining Financial Statement City of Bothell Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual Public Safety Capital Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) REVENUES Taxes Intergovernmental revenues Licenses and permits Investment interest 26,778$ 26,778$ 26,778$ Miscellaneous revenue Contributions Total revenues 26,778 26,778 26,778 EXPENDITURES Current: Economic environment Culture and recreation Capital outlay 25,500,000 251,214 251,214 25,248,786 Debt issuance costs 247,466 247,466 (247,466) Debt principal Interest expense 1,445 1,445 (1,445) Total expenditures 25,500,000 500,124 500,124 24,999,876 Excess of revenue over (under) expenditures (25,500,000) (473,346) (473,346) 25,026,654 OTHER FINANCING SOURCES (USES) Proceeds from sales of capital assets Safety bond proceeds 23,235,000 23,235,000 23,235,000 Safety bond premium 2,519,362 2,519,362 2,519,362 Loans 1,000,000 (1,000,000) Transfers in 25,500,000 (25,500,000) Transfers out Total other financing sources 26,500,000 25,754,362 25,754,362 (745,638) Net change in fund balances 1,000,000 25,281,015 25,281,015 24,281,015 Fund balance - beginning Fund balance - ending 1,000,000$ 25,281,015$ 25,281,015$ 24,281,015$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 213 of 294 Combining Financial Statement 14 Combining Financial Statement City of Bothell Combining Statement of Net Position Internal Service Funds December 31, 2019 ASSETS Current assets Cash and cash equivalents 142,287$ 119,198$ 221,048$ 482,533$ Investments 1,100,000 1,100,000 Accounts receivable 166 98,989 50,387 149,542 Due from other governments Restricted assets: Deposit held in trust 277,837 277,837 Total current assets 142,453 218,187 1,321,048 328,224 2,009,912 Non-current assets Capital assets: Building 35,285 35,285 Equipment - shop 114,990 2,087,851 2,202,841 Equipment - vehicles 32,138 9,610,222 9,642,360 Improvements 6,984 1,559,863 1,566,847 Less accumulated depreciation (63,542) (4,017) (7,579,588) (7,647,147) Total non-current assets 58,432 28,121 5,713,634 5,800,187 Total assets 200,885 246,308 7,034,682 328,224 7,810,099 DEFERRED OUTFLOWS Deferred outflows - pension 31,750 22,607 54,357 LIABILITIES Current liabilities Accounts payable 50,609 8,669 1,822 3,580 64,680 Payroll payable 32,953 15,317 48,270 Interest payable 156,810 156,810 Due to other governments Compensated absences 13,900 18,931 32,831 Total current liabilities 97,462 42,918 1,822 160,390 302,592 Non current liabilities Pension liability 30,191 22,178 52,369 Unearned revenue 277,837 277,837 Total non-current liabilities 30,191 22,178 277,837 330,206 Total liabilities 127,653 65,096 1,822 438,227 632,798 DEFERRED INFLOWS Deferred inflows - pension 65,223 47,264 112,487 NET POSITION Net investment in capital assets 58,432 28,121 5,713,634 5,800,187 Unrestricted (18,673) 128,434 1,319,226 (110,003) 1,318,984 Total net position 39,759$ 156,555$ 7,032,860$ (110,003)$ 7,119,171$ Governmental Activities Internal Service Funds Equipment Rental Self Insurance Asset Replacement COB Properties Total September 15, 2020 Agenda Packet Page 214 of 294 Combining Financial Statement 15 Combining Financial Statement City of Bothell Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds For the Year Ended December 31, 2019 Equipment Rental Self Insurance Asset Replacement COB Properties Total Operating revenues Charges for services 2,301,353$ 1,640,025$ 68,410$ 4,009,788$ Other revenues 1,467 154,149 37,657 193,273 Total operating revenues 2,302,820 1,794,174 37,657 68,410 4,203,061 Operating expenses Maintenance and operations 240,976 325,510 566,486 Administration 938,740 1,837,786 68,412 2,844,939 Depreciation and amortization 5,987 2,678 1,137,884 1,146,549 Total operating expenses 1,185,703 1,840,464 1,463,394 68,412 4,557,974 Operating income (loss)1,117,117 (46,291) (1,425,737) (2) (354,913) Non-operating revenue (expense) Gain (loss) on disposition of capital assets 95,079 95,079 Intergovernmental revenue (473) (473) Interest earnings 1,818,352 1,818,352 Interest expense (1,789,231) (1,789,231) Total non-operating revenues (expenses)94,606 29,121 123,727 Income (loss) before transfers 1,117,117 (46,291) (1,331,131) 29,119 (231,186) Transfers in 143,953 1,976,979 2,120,932 Transfers out (1,082,774) (1,082,774) Change in net position 34,343 97,662 645,848 29,119 806,972 Net position - beginning 5,416 58,893 6,387,012 (139,122) 6,312,199 Net position - ending 39,759$ 156,555$ 7,032,860$ (110,003)$ 7,119,171$ Governmental Activities Internal Service Funds September 15, 2020 Agenda Packet Page 215 of 294 Combining Financial Statement 16 Combining Financial Statement City of Bothell Combining Statement of Cash Flows Internal Service Funds For the Year Ended December 31, 2019 Equipment Rental Self Insurance Asset Replacement COB Properties Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers 2,303,044$ 1,716,476$ 37,657$ 42,800$ 4,099,977$ Cash paid to employees for services (540,892) (503,276) (1,044,168) Cash paid to suppliers for goods and services (616,951) (1,324,552) (1,746,937) (67,538) (3,755,978) Net cash provided (used) by operating activities 1,145,202 (111,352) (1,709,280) (24,738) (700,169) CASH FLOWS FROM NON-OPERATING ACTIVITIES Transfers out (1,082,774) (1,082,774) Transfers in 143,953 1,976,979 2,120,932 Intergovernmental revenue 4,233 4,233 Net cash provided (used) by non-operating activities (1,082,774) 143,953 1,981,212 1,042,391 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (40,546) (804,900) (845,446) Capital lease 3,267,622 3,267,622 Proceeds from sale of capital assets 113,777 113,777 Bond principal paid (1,315,000) (1,315,000) Deposit held in trust 3,217 3,217 Bond interest expenses (1,926,718) (1,926,718) Bond interest payable (4,383) (4,383) Net cash provided (used) by capital and (40,546) (691,123) 24,738 (706,931) related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales and maturities of investments 400,000 400,000 Net cash provided by investing activities 400,000 400,000 Net increase (decrease) in cash and cash equivalents 21,882 32,600 (19,191) 35,291 Balances - beginning 120,405 86,598 240,238 447,242 Balances - ending 142,287 119,198 221,048 482,533 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss)1,117,117 (46,291) (1,425,737) (2) (354,913) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense 5,987 2,678 1,137,884 1,146,549 Change in assets and liabilities: Decrease (increase) in accounts receivable (77,698) (25,610) (103,308) Decrease (increase) in due from other governments 224 224 Increase (decrease) in accounts payable 12,045 (13,453) (1,421,427) 874 (1,421,961) Increase (decrease) in payroll payable 16,182 7,033 23,216 Increase (decrease) in compensated absences payable 6,525 2,790 9,315 Increase (decrease) in due from other governments (18,748) (18,748) Increase (decrease) in GASB 68 pension adjustments 5,870 13,587 19,457 Net cash provided by operating activities 1,145,202$ (111,352)$ (1,709,280)$ (24,738)$ (700,169)$ Noncash investing, capital, and financing activities: Increase (decrease) in fair value of investments Governmental Activities Internal Service Funds September 15, 2020 Agenda Packet Page 216 of 294 September 15, 2020 Agenda Packet Page 217 of 294 SUPPLEMENTALINFORMATION September 15, 2020 Agenda Packet Page 218 of 294 This schedule is presented as supplemental information 1 Supplemental Information City of Bothell Schedule of Operations - Budget to Actual Combined Utility Statement For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) OPERATING REVENUES Intergovernmental revenues Other Charges for services Total operating revenues OPERATING EXPENSES Administrative and general Purchase water Maintenance and operation Customer accounts Taxes Capital outlay Debt Depreciation and amortization Total operating expenses OPERATING INCOME (LOSS) NON-OPERATING REVENUES (EXPENSES) Investment earnings Issuance cost Interest expense Total non-operating revenue (expense) Income (loss) before contributions and transfers Transfers in Transfers out Net position - beginning, January 1, 2019 Net position - ending, December 31, 2019 2019-2020 Budgeted Amounts September 15, 2020 Agenda Packet Page 219 of 294 This schedule is presented as supplemental information 2 Supplemental Information City of Bothell Schedule of Operations - Budget to Actual Water Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) OPERATING REVENUES Charges for services 11,864,398$ 11,864,398$ 5,800,406$ 5,800,406$ (6,063,992)$ Other 70,000 70,000 72,672 72,672 2,672 Total operating revenues 11,934,398 11,934,398 5,873,078 5,873,078 (6,061,320) OPERATING EXPENSES Administrative and general 1,885,682 1,885,682 892,691 892,691 992,991 Purchase water 3,544,971 3,544,971 1,727,957 1,727,957 1,817,014 Maintenance and operation 2,086,775 2,086,775 872,235 872,235 1,214,540 Customer accounts 479,287 479,287 254,762 254,762 224,525 Taxes 1,444,867 1,444,867 774,039 774,039 670,828 Capital outlay 3,376,200 3,376,200 3,376,200 Debt 310,000 310,000 310,000 Depreciation and amortization 1,566,548 1,566,548 812,736 812,736 753,812 Total operating expenses 14,694,330 14,694,330 5,334,420 5,334,420 9,359,910 OPERATING INCOME (LOSS)(2,759,932) (2,759,932) 538,658 538,658 3,298,590 NON-OPERATING REVENUES (EXPENSES) Investment earnings 556 556 556 Intergovernmental revenues 257 257 257 Interfund loan (1,000,000) 1,000,000 Interest expense (242,862) (242,862) (111,086) (111,086) 131,776 Total non-operating revenue (expense)(242,862) (1,242,862) (110,273) (110,273) 1,132,589 Income (loss) before contributions and transfers (3,002,794) (4,002,794) 428,385 428,385 4,431,179 Transfers in Transfers out (81,334) (81,334) (81,334) Contributions 118,028 118,028 118,028 Net position - beginning, January 1, 2019 18,533,498 18,533,498 20,103,768 20,103,768 1,570,270 Net position - ending, December 31, 2019 15,530,704$ 14,530,704$ 20,568,847$ 20,568,847$ 6,038,143$ 2019-2020 Budgeted Amounts September 15, 2020 Agenda Packet Page 220 of 294 This schedule is presented as supplemental information 3 Supplemental Information City of Bothell Schedule of Operations - Budget to Actual Sewer Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) OPERATING REVENUES Charges for services 16,605,575$ 16,605,575$ 8,302,201$ 8,302,201$ (8,303,374)$ Other 36,654 36,654 36,654 Total operating revenues 16,605,575 16,605,575 8,338,855 8,338,855 (8,266,720) OPERATING EXPENSES Administrative and general 2,665,921 2,665,921 1,316,497 1,316,497 1,349,424 Metro service 9,015,494 9,015,494 4,552,004 4,552,004 4,463,490 Maintenance and operation 1,424,698 1,424,698 735,281 735,281 689,417 Customer accounts 462,287 462,287 254,755 254,755 207,532 Taxes 1,116,011 1,116,011 577,580 577,580 538,431 Capital outlay 4,429,200 4,429,200 4,429,200 Debt 140,000 140,000 140,000 Depreciation and amortization 1,240,963 1,240,963 598,221 598,221 642,742 Total operating expenses 20,494,574 20,494,574 8,034,340 8,034,340 12,460,234 OPERATING INCOME (LOSS)(3,888,999) (3,888,999) 304,515 304,515 4,193,514 NON-OPERATING REVENUE (EXPENSE) Investment earnings 1,445 1,445 1,445 Intergovernmental revenues 278 278 278 Interfund loan (1,000,000) 1,000,000 Interest expense (109,112) (109,112) (49,910) (49,910) 59,202 Total non-operating revenue (expense)(109,112) (1,109,112) (48,187) (48,187) 1,060,925 Income (loss) before contributions and transfers (3,998,111) (4,998,111) 256,328 256,328 5,254,439 Transfers in Transfers out (77,338) (77,338) (77,338) Contributions 44,314 44,314 44,314 Net position - beginning, January 1, 2019 7,416,987 7,416,987 19,724,744 19,724,744 12,307,757 Net position - ending, December 31, 2019 3,418,876$ 2,418,876$ 19,948,048$ 19,948,048$ 17,529,172$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 221 of 294 This schedule is presented as supplemental information 4 Supplemental Information City of Bothell Schedule of Operations - Budget to Actual Storm & Surface Water Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) OPERATING REVENUES Charges for services 13,745,451$ 13,745,451$ 6,620,617$ 6,620,617$ (7,124,834)$ Other 745,400 745,400 745,400 Total operating revenues 13,745,451 13,745,451 7,366,017 7,366,017 (6,379,434) OPERATING EXPENSES Administrative and general 5,221,827 5,221,827 2,564,502 2,564,502 2,657,325 Maintenance and operation 3,676,685 3,676,685 1,229,368 1,229,368 2,447,317 Taxes 156,764 156,764 334,464 334,464 (177,700) Capital outlay 8,229,653 8,229,653 8,229,653 Debt service 1,111,032 1,111,032 1,111,032 Depreciation and amortization - 1,293,237 1,293,237 (1,293,237) Total operating expenses 18,395,961 18,395,961 5,421,571 5,421,571 12,974,390 OPERATING INCOME (LOSS)(4,650,510) (4,650,510) 1,944,446 1,944,446 6,594,956 NON-OPERATING REVENUE (EXPENSE) Intergovernmental revenues 395,000 395,000 113,179 113,179 (281,821) Interfund loan (1,115,000) 1,115,000 Investment earnings 5,997 5,997 5,997 Interest expense (803,334) (803,334) (367,834) (367,834) 435,500 Total non-operating revenue (expense)(408,334) (1,523,334) (248,659) (248,659) 1,274,675 Income (loss) before contributions and transfers (5,058,844) (6,173,844) 1,695,787 1,695,787 7,869,631 Transfers out (253,894) (253,894) (253,894) Contributions 263,936 263,936 263,936 Net position - beginning, January 1, 2019 5,834,284 5,834,284 24,544,014 24,544,014 18,709,730 Net position - ending, December 31, 2019 775,440$ (339,560)$ 26,249,844$ 26,249,844$ 26,589,404$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 222 of 294 This schedule is presented as supplemental information 5 Supplemental Information City of Bothell 2019 2020 Total Variance with Actual Amounts Actual Amounts 2017-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) OPERATING REVENUES Charges for services 4,697,604$ 4,697,604$ 2,301,353$ 2,301,353$ (2,396,251)$ Other revenues 1,467 1,467 1,467 Total operating revenues 4,697,604 4,697,604 2,302,820 2,302,820 (2,394,784) OPERATING EXPENSES Administrative and general 2,059,841 2,059,841 938,740 938,740 1,121,101 Maintenance and operation 458,209 458,209 240,976 240,976 217,233 Depreciation 14,000 14,000 5,987 5,987 8,013 Total operating expenses 2,532,050 2,532,050 1,185,703 1,185,703 1,346,347 OPERATING INCOME (LOSS)2,165,554 2,165,554 1,117,117 1,117,117 (1,048,437) NON-OPERATING REVENUES (EXPENSES) Total non-operating revenue (expense) Income (loss) before contributions and transfers 2,165,554 2,165,554 1,117,117 1,117,117 (1,048,437) Transfers out (2,165,548) (2,165,548) (1,082,774) (1,082,774) 1,082,774 Transfers in Net position - beginning, January 1, 2019 22,833 22,833 5,416 5,416 (17,417) Net position - ending, December 31, 2019 22,839$ 22,839$ 39,759$ 39,759$ 16,920$ Budgeted Amounts 2019-2020 Schedule of Operations - Budget to Actual Equipment Rental Fund Fore the Year Ended December 31, 2019 September 15, 2020 Agenda Packet Page 223 of 294 This schedule is presented as supplemental information 6 Supplemental Information City of Bothell Schedule of Operations - Budget to Actual Self Insurance Fund For the Year Ended December 31, 2019 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) OPERATING REVENUES Insurance recovery 100,000$ 100,000$ 154,149$ 154,149$ 54,149$ Charges for insurance premiums 3,154,323 3,154,323 1,640,025 1,640,025 (1,514,298) Total operating revenues 3,254,323 3,254,323 1,794,174 1,794,174 (1,460,149) OPERATING EXPENSES Health insurance services 385,731 385,731 143,953 143,953 241,778 Administrative and general 3,254,324 3,254,324 1,693,834 1,693,834 1,560,490 Depreciation 2,678 2,678 (2,678) Total operating expenses 3,640,055 3,640,055 1,840,464 1,840,464 1,799,591 OPERATING INCOME (LOSS)(385,732) (385,732) (46,291) (46,291) 339,441 NON-OPERATING REVENUES (EXPENSES) Total non-operating revenue (expense) Income (loss) before contributions and transfers (385,732) (385,732) (46,291) (46,291) 339,441 Transfers in 385,731 385,731 143,953 143,953 (241,778) Net position - beginning, January 1, 2019 30,860 30,860 58,893 58,893 28,033 Net position - ending, December 31, 2019 30,859$ 30,859$ 156,555$ 156,555$ 125,696$ Budgeted Amounts 2019-2020 September 15, 2020 Agenda Packet Page 224 of 294 This schedule is presented as supplemental information 7 Supplemental Information City of Bothell 2019 2020 Total Variance with Actual Amounts Actual Amounts 2019-2020 Final Budget Original Final Budgetary Basis Budgetary Basis Actuals Positive (Negative) OPERATING REVENUES Other 37,657$ 37,657$ 37,657$ Total operating revenues 37,657 37,657 37,657 OPERATING EXPENSES Capital outlay 3,249,972 3,249,972 3,249,972 Maintenance and operations 67,055 67,055 325,510 325,510 (258,455) Administrative and general 1,176,789 1,176,789 1,176,789 Depreciation 1,863,125 1,863,125 1,137,884 1,137,884 725,241 Total operating expenses 6,356,941 6,356,941 1,463,394 1,463,394 4,893,547 OPERATING INCOME (LOSS)(6,356,941) (6,356,941) (1,425,737) (1,425,737) 4,931,204 NON-OPERATING REVENUES (EXPENSES) Intergovernmental revenues - - Gain (loss) on disposition of capital assets 95,079 95,079 95,079 Intergovernmental revenues (473) (473) (473) Proceeds from the sale of capital assets 109,900 109,900 - (109,900) Total non-operating revenue (expense)109,900 109,900 94,606 94,606 (15,294) Income (loss) before contributions and transfers (6,247,041) (6,247,041) (1,331,131) (1,331,131) 4,915,910 Transfers in 3,496,265 3,496,265 1,976,979 1,976,979 (1,519,286) Net position - beginning, January 1, 2019 4,406,007 4,406,007 6,387,012 6,387,012 1,981,005 Net position - ending, December 31, 2019 1,655,231$ 1,655,231$ 7,032,860$ 7,032,860$ 5,377,629$ Budgeted Amounts 2019-2020 Schedule of Operations - Budget to Actual Asset Replacement Fund For the Year Ended December 31, 2019 September 15, 2020 Agenda Packet Page 225 of 294 This schedule is presented as supplemental information 8 Supplemental Information City of Bothell Schedule 16 Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2019 Grantor/Pass Through Grantor CFDA Program Title Number Direct Pass-Through Total Note Structural Collapse & Heavy Rescue Training 97.025 EMW-2018-CA-00034 5,324 5,324 1,2,4 Emergency Management Performance Grant 97.042 E19-065 24,898 24,898 1,2,4 Structural Collapse & Heavy Rescue Training (via City of Seattle Fire Department)97.067 EMW-2018-SS-00066-S01 1,904 1,904 1,2,4 State Homeland Security Program (via Washington State Military Department/King County/City of Seattle Police Department)*97.067 EMW-2018-SS-00088-S01 53,206 53,206 1,2,3,4 (Equipment valued at $53,206 received in lieu of cash funding.) CFDA 97.067 Total 55,110 55,110 Complex Coordinated Terrorist Attack (CCTA) Training & Exercise Program 97.133 EMW-2016-GR-00145-S01 1,410 1,410 1,2,4 $86,741 $86,741 Department of Transportation/Washington State DOT 7th Ave SE/88th Ave NE Non-Motorized Improvements 20.205 HLP-SR17(013)56,118 56,118 1,2,4 19th Ave SE/232nd St SE Non-Motorized Improvements 20.205 SRTS-2449(001)647,200 647,200 1,2,4 228th Street, 35th to 39th 20.205 STPUL-2570(012)1,355 1,355 1,2,4 Beardslee Blvd Widening 20.205 STPUL-2458(003)2,139 2,139 1,2,4 Bothell Way Widening - 240th to Reder 20.205 STPUL-9999(845)491 491 1,2,4 NE 188th St Non-Motorized Improvements 20.205 SRTS-0110(015)2,115 2,115 1,2,4 Non-Motorized Bridge over Sammamish River 20.205 CM-0110(013)54,139 54,139 1,2,4 North Creek Trail - Section 4 20.205 CM-0110(014)107,324 107,324 1,2,4 Sammamish River Bridge Seismic Retrofit 20.205 BHM-2201(009)103,758 103,758 1,2,4 SR522 Multi-Modal Corridor - Stage 3 20.205 STPUL-0522(057)138,462 138,462 1,2,4 Highway Planning & Construction Cluster Total $1,113,101 $1,113,101 Department of Transportation/Washington Traffic Safety Commission Distracted Driving Emphasis Patrols 20.600 NA 1,386 1,386 1,2,4 Target Zero Emphasis Program 20.600 NA 236 236 1,2,4 CFDA 20.600 Total 1,623 1,623 Click It or Ticket Program 20.616 NA 1,144 1,144 1,2,4 Motorcycle Safety Program 20.616 NA 1,851 1,851 1,2,4 CFDA 20.616 Total 2,995 2,995 $4,618 $4,618 $1,117,718 $1,117,718 Local Source Control Partnership 66.123 C1800019 62,406 62,406 1,2,4 $62,406 $62,406 $1,266,865 $1,266,865 Note 1 - Basis of Accounting Note 2 - Program Costs Note 3 - Noncash Awards - Equipment Note 4 - Indirect Cost Rate The accompanying notes are an integral part of this schedule. The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the City's portion, are more than shown. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Department of Transportation Totals Environmental Protection Agency/Washington State Department of Ecology Puget Sound Action Agenda: Tech Investigations/Implementation Assistance Program Department of Homeland Security/King County Preparing For Emerging Threats and Hazards Department of Homeland Security Total Department of Transportation Highway Safety Cluster Total Highway Planning and Construction Cluster Highway Safety Cluster State & Community Highway Safety National Priority Safety Programs Department of Homeland Security/Washington State Military Department Emergency Management Performance Grants Department of Homeland Security/Washington State Military Department/King County/City of Seattle Homeland Security Grant Program National Urban Search & Rescue (US&R) Response System Other Identification Number Current Year Expenditures Pass Through to Subrecipients Department of Homeland Security/Pierce County Emergency Management/Washington State Task Force The City has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Environmental Protection Agency Total Total Federal Awards Expended This schedule is prepared on the same basis of accounting as the City's financial statements. The City uses full accrual basis of accounting in government-wide financials and modified accrual basis in governmental fund financials. The City received equipment that was purchased with federal Homeland Security funds by the State of Washington. The amount reported on the Schedule is the value of the property on the date it was received by the City and priced by the State of Washington. September 15, 2020 Agenda Packet Page 226 of 294 This schedule is presented as supplemental information 9 Supplemental Information City of Bothell Grantor/Pass Through Grantor BARS Account Other Identification Current Year Program Title Number Number Expenditures 4Culture (Cultural Development Authority of King County) 2019 Creative Consultancies LAA 337.07.04 119573A 15,000 Arts Sustained Support 337.07.04 119196A 5,500 Bothell Summer Concerts 337.07.04 n/a 1,450 Preservation Special Projects - Downtown Bothell Landmark & Historic District Feasibility Study 337.07.04 118554P 6,200 Preservation Sustained Support 337.07.04 119024P 5,000 4Culture Total 33,150 King County Local Hazardous Waste Management Program 337.07.00 4004EHS 12,741 Parr Creek Flood Control 337.07.00 4.15.003 31,673 Response Awareness, De-Escalation, & Referral (RADAR) Program 337.07.00 n/a 48,559 Waste Reduction & Recycling 337.07.00 6059942 34,492 King County Total 127,465 Port of Seattle Economic Development Partnership Agreement 337.00.00 S-00319830 18,000 Port of Seattle Total 18,000 Sound Transit SR522 Multi-Modal Corridor 337.00.00 GA 0259-18 4,440,032 Sound Transit Total 4,440,032 Washington State Administrative Office of the Courts Legal Financial Obligation (LFO)334.01.20 NA 5,090 Washington State Administrative Office of the Courts Total 5,090 Washington State Department of Ecology 2017-2019 Biennial Stormwater Capacity Grant 334.03.10 WQSWCAP01719-BothPW-00059 28,154 Local Source Control Partnership 334.03.10 C2000012 24,898 Shorelands Shoreline Master Program 334.03.10 SEASMP-1719-BothPW-00056 20,000 Toxics Cleanup Remedial Action Grant - Bothell Landing 334.03.10 TCPRA-2015-BothPW-00002 11,876 Toxics Cleanup Remedial Action Grant - Bothell Paint 334.03.10 TCPRA-2015-BothPW-00029 10,015 Toxics Cleanup Remedial Action Grant - Bothell Service Center 334.03.10 TCPRA-1921-BothPW-00011 716,705 Toxics Cleanup Remedial Action Grant - Former Riverside 334.03.10 TCPRA-2015-BothPW-00025 28,732 Toxics Cleanup Remedial Action Grant - Ultra 334.03.10 TCPRA-2015-BothPW-00039 48,616 Waste 2 Resources Local Solid Waste Financial Assistance (LSWFA)334.03.10 W2RLSWFA-1719-BothPW-00002 17,647 Waste 2 Resources Local Solid Waste Financial Assistance (LSWFA)334.03.10 SWMLSWFA-2019-BothPW-00086 9,462 Washington State Dept of Ecology Total 916,105 Washington State Department of Health EMS Prehospital Participation Grant 334.04.90 SFY19 1,266 Washington State Dept of Health Total 1,266 Washington State Recreation & Conservation Office (RCO) Non-Motorized Bridge over Sammamish River 334.02.70 18-1355D 51,113 Washington State Patrol Total 51,113 Washington State Transportation Improvement Board TIB Complete Streets Award 334.03.80 C-P-114(002)-1 126,821 126,821 Total State & Local Financial Assistance for 2019 $5,719,043 Note 1 - Basis of Accounting Note 2 - Program Costs The accompanying notes are an integral part of this schedule. This schedule is prepared on the same basis of accounting as the City's financial statements. The City uses full accrual basis of accounting in government-wide financials and modified accrual basis in governmental fund financials. Washington State Transportation Improvement Board Total The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the City's portion, are more than shown. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Schedule 15 Schedule of State and Local Financial Assistance For the Year Ended December 31, 2019 September 15, 2020 Agenda Packet Page 227 of 294 This schedule is presented as supplemental information 10 Supplemental Information City of Bothell General Obligation LIFT Bond 2014 December 31, 2019 Year Ended Interest Total Debt December 31, 2019 Rate Interest Principal Service 2020 1,231,850 765,000 1,996,850 2021 1,200,650 795,000 1,995,650 2022 1,163,875 835,000 1,998,875 2023 1,121,125 875,000 1,996,125 2024 1,076,250 920,000 1,996,250 2025-2029 4,623,875 5,355,000 9,978,875 2030-2034 3,102,625 6,875,000 9,977,625 2035-2039 1,668,875 8,835,000 10,503,875 Total 2.0-5.0%15,189,125$ 25,255,000$ 40,444,125$ September 15, 2020 Agenda Packet Page 228 of 294 This schedule is presented as supplemental information 11 Supplemental Information City of Bothell Year Ended Interest Total Debt December 31, 2019 Rate Range Interest Principal Service 2020 283,463 415,000 698,463 2021 271,013 425,000 696,013 2022 258,263 440,000 698,263 2023 245,063 450,000 695,063 2024 227,063 470,000 697,063 2025-2029 837,313 2,080,000 2,917,313 2030-2033 367,125 3,075,000 3,442,125 Total 0.60-4.5%2,489,301$ 7,355,000$ 9,844,302$ General Obligation Bonds 2013 B December 31, 2019 September 15, 2020 Agenda Packet Page 229 of 294 This schedule is presented as supplemental information 12 Supplemental Information City of Bothell Utility Revenue Bond 2014 December 31, 2019 Year Ended Interest Total Debt December 31, 2019 Rate Interest Principal Service 2020 561,719 750,000 1,311,719 2021 531,719 780,000 1,311,719 2022 492,719 815,000 1,307,719 2023 451,969 855,000 1,306,969 2024 409,219 900,000 1,309,219 2025-2029 1,461,038 5,090,000 6,551,038 2030-2034 611,881 5,940,000 6,551,881 Total 2.63-5.0%4,520,265$ 15,130,000$ 19,650,264$ September 15, 2020 Agenda Packet Page 230 of 294 This schedule is presented as supplemental information 13 Supplemental Information City of Bothell Public Works Trust Fund Loan PC12-951-022 December 31, 2019 Year Ended Interest Total Debt December 31, 2019 Rate Interest Principal Service 2020 0.25%13,414 447,123 460,537 2021 0.25%12,296 447,123 459,419 2022 0.25%11,178 447,123 458,301 2023 0.25%10,060 447,123 457,183 2024 0.25%8,942 447,123 456,065 2025-2029 0.25%27,945 2,235,615 2,263,560 2030-2031 0.25%3,353 894,246 897,599 Total 87,190$ 5,365,477$ 5,452,667$ September 15, 2020 Agenda Packet Page 231 of 294 This schedule is presented as supplemental information 14 Supplemental Information City of Bothell Public Works Trust Fund Loan Horse Creek PC13-961-060 December 31, 2019 Year Ended Interest Total Debt December 31, 2019 Rate Interest Principal Service 2020 0.25%1,479 45,516 46,995 2021 0.25%1,365 45,516 46,881 2022 0.25%1,252 45,516 46,768 2023 0.25%1,138 45,516 46,654 2024 0.25%1,024 45,516 46,540 2025-2029 0.25%3,414 227,581 230,995 2030-2032 0.25%683 136,885 137,568 Total 10,355$ 592,046$ 602,401$ September 15, 2020 Agenda Packet Page 232 of 294 This schedule is presented as supplemental information 15 Supplemental Information City of Bothell Year Ended Interest Total Debt December 31, 2019 Rate Range Interest Principal Service 2020 5.0%1,888,115 1,365,000 3,253,115 2021 5.0%1,813,844 1,510,000 3,323,844 2022 5.0%1,737,594 1,590,000 3,327,594 2023 5.0%1,658,468 1,665,000 3,323,468 2024 3.6-5%1,575,427 1,750,000 3,325,427 2025-2029 3.6-3.9%6,506,403 10,125,000 16,631,403 2030-2034 4.0%4,380,721 12,245,000 16,625,721 2035-2039 4.0%1,546,463 14,810,000 16,356,463 Total 21,107,034$ 45,060,000$ 66,167,034$ City Hall Lease Revenue Bonds December 31, 2019 September 15, 2020 Agenda Packet Page 233 of 294 This schedule is presented as supplemental information 16 Supplemental Information City of Bothell Snohomish County Public Works Assistance Loan December 31, 2019 Year Ended Interest Total Debt December 31, 2019 Rate Range Interest Principal Service 2020 1.50%1,158 12,970 14,127 2021 1.50%1,362 12,970 14,332 2022 1.50%1,167 12,970 14,137 2023 1.50%973 12,970 13,942 2024 1.50%778 12,970 13,748 2025-2028 1.50%1,167 38,909 40,077 Total 6,606$ 103,758$ 110,364$ September 15, 2020 Agenda Packet Page 234 of 294 This schedule is presented as supplemental information 17 Supplemental Information City of Bothell General Obligation Public Safety Bonds December 31, 2019 Year Ended Interest Total Debt December 31, 2019 Rate Interest Principal Service 2020 879,139 740,000 1,619,139 2021 847,050 780,000 1,627,050 2022 808,050 820,000 1,628,050 2023 767,050 860,000 1,627,050 2024 724,050 905,000 1,629,050 2025-2029 2,895,250 5,245,000 8,140,250 2030-2034 1,708,650 6,430,000 8,138,650 2035-2039 684,150 7,455,000 8,139,150 Total 3.0-5.0%9,313,389$ 23,235,000$ 32,548,389$ September 15, 2020 Agenda Packet Page 235 of 294 September 15, 2020 Agenda Packet Page 236 of 294 STATISTICAL INFORMATION September 15, 2020 Agenda Packet Page 237 of 294 Statistical Information City of Bothell Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement No. 34 in 2002; schedules presenting government-wide information include information beginning in that year. TABLE OF CONTENTSSTATISTICAL SECTION This part of the City of Bothell’s comprehensive annual financial report presents detailed data as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. 1-4 Financial Trends These schedules contain trend information to help the reader understand how the City’s financial performance and well-beng have changed over time. 5-10 Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City’s ability to generate its property and sales taxes. 11-16 Debt Capacity 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. 17-18 Demographic & Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place and to help make comparisons over time and with other governments. 19-21 Operation Information These schedules contain information about the City’s operations and resources to help the reader understand how the City’s financial information relates to the services the City provides and the activities it performs. September 15, 2020 Agenda Packet Page 238 of 294 Statistical Information 1 Statistical Information City of Bothell Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Governmental activities Net investment in capital assets $797,260,030 $772,845,492 $746,225,080 $720,584,679 $709,089,935 $677,138,001 $645,750,647 $623,606,770 $598,724,468 $571,700,385 Restricted 7,754,246 9,780,831 7,578,092 12,554,203 15,409,677 17,584,435 25,939,390 22,700,029 28,308,719 31,772,391 Unrestricted 6,887,300 4,879,019 3,614,460 3,262,857 1,729,590 (5,769,209) (9,553,063) (6,089,735) (14,949,438) (9,884,774) Total governmental activities net position 811,901,576 787,505,342 757,417,631 736,401,739 726,229,202 688,953,226 662,136,973 640,217,064 612,083,749 593,588,002 Business-type activities Net investment in capital assets 32,408,696 32,660,784 33,185,063 34,892,575 37,917,645 39,266,084 43,249,528 42,785,330 43,768,023 45,672,414 Restricted 1,316,369 1,316,369 1,316,369 1,316,369 1,316,369 1,316,369 Unrestricted 2,658,185 1,771,470 3,074,506 4,531,648 4,435,715 7,451,903 10,476,648 15,245,386 19,288,134 19,777,955 Total business-type activities net position 35,066,881 34,432,254 36,259,569 39,424,223 43,669,729 48,034,356 55,042,545 59,347,085 64,372,526 66,766,738 Primary government Net investment in capital assets 829,668,726 805,506,276 779,410,143 755,477,254 747,007,580 716,404,085 689,000,175 666,392,100 642,492,491 617,372,799 Restricted 7,754,246 9,780,831 7,578,092 12,554,203 16,726,046 18,900,804 27,255,759 24,016,398 29,625,088 33,088,760 Unrestricted 9,545,485 6,650,489 6,688,966 7,794,505 6,165,305 1,682,694 923,584 9,155,651 4,338,696 9,893,181 Total primary government net position $846,968,458 $821,937,596 $793,677,200 $775,825,961 $769,898,931 $736,987,582 $717,179,518 $699,564,149 $676,456,275 $660,354,740 Fiscal Year September 15, 2020 Agenda Packet Page 239 of 294 Statistical Information 2 Statistical Information City of Bothell Change in Net Position Last Ten Fiscal Years (accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Expenses - Governmental activities General government $9,442,611 $9,877,418 $10,969,744 $10,073,570 $22,655,176 $12,868,567 $16,501,329 $16,389,961 $15,736,695 $18,481,329 Security of persons and property 22,005,979 21,575,204 22,078,983 23,098,903 22,723,613 23,376,244 23,953,206 25,973,285 27,382,168 31,280,308 Physical environment 6,354,100 6,398,497 4,914,790 5,972,811 2,196,908 2,548,539 2,757,415 2,763,405 2,750,098 2,656,681 Transportation 39,919,102 34,044,668 36,833,751 35,896,052 41,362,523 42,686,251 43,696,700 43,851,764 46,463,697 47,442,708 Economic environment 3,347,504 3,298,490 2,860,182 2,882,941 4,770,995 4,067,230 4,318,103 4,028,902 8,577,058 3,493,273 Culture and recreation 1,613,519 2,005,064 1,852,966 2,205,709 2,243,434 2,459,788 2,616,511 2,238,693 Interest on long-term debt 303,378 581,295 517,471 686,700 2,064,923 2,756,555 3,063,168 3,502,614 2,948,818 3,536,401 Total governmental activities 81,372,674 75,775,571 79,788,440 80,616,039 97,627,104 90,509,095 96,533,353 98,969,719 106,475,044 109,129,394 Business-type activities Water 3,234,985 3,708,205 3,369,337 3,947,670 4,045,439 4,471,061 4,312,430 4,855,578 4,862,936 5,445,506 Sewer 4,809,616 5,454,241 4,976,045 5,136,854 5,865,582 6,045,555 6,331,025 6,986,948 7,088,546 8,084,249 Storm & Surface Water 2,381,009 2,864,914 2,938,653 2,985,040 3,793,237 4,099,932 4,462,068 5,418,301 5,696,172 5,789,406 Total business-type activities 10,425,610 12,027,360 11,284,035 12,069,565 13,704,258 14,616,548 15,105,523 17,260,827 17,647,653 19,319,161 Total primary government expenses $91,798,284 $87,802,932 $91,072,475 $92,685,604 $111,331,362 $105,125,643 $111,638,876 $116,230,546 $124,122,697 $128,448,556 Program Revenues - Governmental activities Charges for services General government $2,687,935 $4,810,917 $4,841,692 $5,795,890 $4,949,225 $7,083,683 $9,956,908 $6,978,338 $8,099,979 $7,453,082 Security of persons and property 2,743,162 2,273,740 2,663,755 3,243,837 3,368,962 4,456,563 4,392,999 5,317,863 5,720,408 6,584,362 Physical environment 3,566,661 1,376,855 2,078,244 1,352,480 937,303 933,754 986,097 1,393,217 1,345,692 1,866,979 Transportation 1,185,102 607,870 1,818,764 349,447 268,215 1,375,389 1,896,846 1,747,125 1,299,326 439,050 Economic environment 1,594,278 1,338,169 1,961,284 4,218,724 4,176,516 3,924,331 5,406,921 6,355,160 9,395,950 5,421,780 Culture and recreation 328,879 457,981 268,711 266,648 288,713 354,039 280,506 294,786 310,346 287,188 Operating grants and contributions 383,325 360,152 969,659 1,566,336 541,291 364,737 334,328 337,028 466,712 1,427,294 Capital grants and contributions 8,068,251 10,650,614 4,324,101 11,102,307 8,153,286 4,451,573 8,684,810 9,679,544 7,261,623 10,305,181 Total governmental activities program revenues 20,557,594 21,876,297 18,926,210 27,895,669 22,683,511 22,944,069 31,939,415 32,103,061 33,900,036 33,784,916 Business-type activities Charges for services Water 3,098,581 3,210,573 3,656,582 4,371,380 4,247,227 6,053,287 5,722,568 5,686,533 5,723,140 5,873,078 Sewer 4,421,861 5,012,251 5,639,707 6,088,614 6,601,973 7,556,241 7,998,203 7,879,956 8,284,176 8,338,855 Storm & Surface Water 2,605,276 2,927,059 3,645,575 4,255,802 5,147,336 5,462,436 6,284,605 6,269,635 7,732,189 7,366,017 Operating grants and contributions 149,637 568,848 114,516 113,714 Capital grants and contributions 757,700 241,500 164,800 501,000 1,951,300 1,105,654 1,923,454 1,093,277 738,591 426,278 Total business-type activities program revenue 10,883,418 11,391,383 13,106,664 15,216,797 17,947,836 20,177,618 22,078,467 21,498,249 22,592,612 22,117,943 Total primary government program revenues $31,441,012 $33,267,680 $32,032,874 $43,112,466 $40,631,347 $43,121,687 $54,017,882 $53,601,310 $56,492,648 $55,902,858 Net (Expense)/Revenue Government activities ($60,815,080)($53,899,274)($60,862,229)($52,720,370)($74,943,593)($67,565,026)($64,593,938)($66,866,658)($72,575,008)($75,344,479) Business-type activities 457,808 (635,977)1,822,629 3,147,232 4,243,578 5,561,070 6,972,944 4,237,421 4,944,958 2,798,781 Total primary government net expense (60,357,272)(54,535,251)(59,039,600)(49,573,138)(70,700,015)(62,003,956)(57,620,994)(62,629,237)(67,630,049)(72,545,697) General Revenue and Other Changes in Net Position Governmental activities Taxes Property tax 10,190,952 10,963,812 11,128,474 12,506,112 15,501,155 12,402,051 12,644,299 17,417,803 17,500,847 23,179,428 Excise tax 10,482,416 9,960,281 10,341,621 11,071,149 12,889,402 17,053,937 16,804,847 18,610,037 21,868,524 23,107,676 Business tax 6,832,556 6,795,259 6,972,159 6,759,484 7,945,069 7,686,370 7,659,567 7,315,916 7,560,793 7,570,286 Unrestricted grants and contributions 0 Investment earnings 123,457 310,195 512,991 164,714 116,931 441,188 229,685 504,584 740,880 1,448,679 Special item 23,858,356 0 Miscellaneous 454,842 516,090 540,813 1,033,726 4,682,318 438,912 439,287 1,098,410 793,665 785,683 Transfers (17,422)37,103 412,566 Total governmental activities 28,084,224 28,545,636 29,496,058 31,517,764 64,993,231 38,059,561 37,777,685 44,946,749 48,464,709 56,504,319 Business-type activities Investment earnings 4,259 1,350 4,685 1,928 20,233 35,244 67,119 80,482 7,998 Miscellaneous Transfers 17,422 (37,103)0 (412,566) Total business-type activities 4,260 1,350 4,685 17,422 1,928 (16,870)35,244 67,119 80,482 (404,568) Total primary government $28,088,483 $28,546,986 $29,500,743 $31,535,186 $64,995,159 $38,042,691 $37,812,929 $45,013,868 $48,545,191 $56,099,750 Change in Net Position Government activities ($32,730,857)($25,353,638)($31,366,171)($21,202,606)($9,950,362)($29,505,465)($26,816,253)($21,919,909)($24,110,298)($18,840,160) Business-type activities 462,066 (634,627)1,827,315 3,164,654 4,245,507 5,544,200 7,008,188 4,304,540 5,025,441 2,394,213 Total primary government ($32,268,791)($25,988,265)($29,538,856)($18,037,952)($5,704,855)($23,961,265)($19,808,065)($17,615,369)($19,084,858)($16,445,947) Fiscal Year September 15, 2020 Agenda Packet Page 240 of 294 Statistical Information 3 Statistical Information City of Bothell Fund Balances of Government Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 General Fund Reserved Unreserved 4,052,527 Committed 16,750 16,750 16,750 22,250 22,250 22,250 16,750 16,750 16,750 Restricted 391,930 526,522 602,871 738,694 867,549 1,307,401 967,611 888,584 1,115,298 Assigned 1,711,130 1,711,130 1,711,130 1,711,130 1,711,130 1,711,130 1,711,130 1,711,130 1,711,130 Unassigned 1,587,189 870,296 1,446,023 1,316,482 1,381,675 258,069 6,336,136 7,403,645 7,281,206 Prior Period Adjustment 11,035 Total general fund $4,052,527 $3,706,999 $3,124,698 $3,787,810 $3,788,556 $3,982,604 $3,298,850 $9,031,627 $10,020,108 $10,124,384 All Other Governmental Funds Unreserved Special revenue funds $2,410,436 $2,268,368 $3,916,223 $4,709,781 $7,290,304 $7,392,924 $8,118,902 $12,060,158 $8,268,961 $12,976,320 Debt service funds 669 55,295 142,231 120,129 29,739 396 (928) 88,030 0 0 Capital projects funds 5,266,801 7,065,239 2,976,365 6,917,958 7,594,931 9,307,244 13,883,596 2,990,654 6,607,931 31,878,836 Permanent funds 16,321 16,321 16,321 16,321 16,321 16,321 Restricted 9,388,902 7,034,819 11,747,868 14,914,974 16,700,564 22,001,569 15,138,842 1,808,681 0 Committed 68,153 67,692 67,692 67,692 67,692 67,692 67,692 67,692 67,692 Prior Period Adjustment 175,679 (222,175) Total all other governmental funds $7,677,906 $9,457,055 $7,102,511 $11,991,239 $14,776,812 $16,784,577 $22,085,583 $15,222,856 $16,769,586 $44,939,169 Fiscal Year Note: Prior year amounts have not been restated for the implementation of Statement 54. September 15, 2020 Agenda Packet Page 241 of 294 Statistical Information 4 Statistical Information City of Bothell Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenues Taxes $27,505,967 $27,719,352 $28,442,253 $30,413,113 $34,443,409 $36,521,449 $36,673,875 $43,325,131 $47,036,991 $52,443,307 Licenses and permits 1,128,293 1,081,549 1,761,220 2,953,512 2,837,610 3,404,797 4,055,011 4,008,628 5,060,444 4,322,553 Intergovernmental 10,748,505 13,700,129 8,015,234 11,647,160 8,816,626 6,226,412 9,996,150 11,516,083 8,706,558 11,555,943 Charges for services 5,587,104 4,703,004 6,467,279 9,037,134 9,137,788 9,121,997 10,872,110 11,826,883 15,231,494 13,467,041 Fines and forfeitures 431,188 387,550 421,304 381,258 371,011 377,964 406,083 356,979 323,931 217,375 Interest earnings 120,261 306,511 509,634 162,427 115,776 113,568 245,754 477,436 712,123 1,448,679 Proceeds from the sale of capital assets Contributions 68,260 50,930 45,605 890,862 397,021 49,271 604,887 540,930 103,840 162,978 Other revenue 347,338 445,398 435,486 330,305 2,560,223 443,354 393,242 943,349 705,094 575,223 Total revenues 45,936,917 48,394,423 46,098,016 55,815,771 58,679,464 56,258,812 63,247,111 72,995,419 77,880,476 84,193,100 Expenditures General government 8,248,773 8,702,807 8,248,283 8,651,252 8,134,152 9,024,948 10,318,936 11,528,616 12,204,936 13,111,650 Security of persons and property 20,223,188 19,958,652 20,292,352 20,829,840 22,072,891 23,695,773 23,474,573 26,548,790 28,132,684 32,111,619 Transportation 1,567,865 1,732,338 1,725,232 1,688,875 5,449,765 5,960,100 6,936,056 7,044,039 7,789,025 8,696,864 Physical environment 3,984,208 4,183,070 4,185,398 3,450,807 20,409 20,455 48,026 18,330 22,471 18,746 Cultural environment 1,334,713 1,535,044 1,720,662 1,609,254 1,886,405 6,197,131 2,379,754 Economic environment 3,129,153 2,864,765 2,860,182 2,882,941 4,391,995 3,696,718 3,997,153 4,257,381 2,081,195 4,668,988 Bond issue costs 79,488 41,603 170,753 125,039 311,422 1,577 248,666 Debt service Interest 223,890 539,692 517,471 686,700 1,753,501 1,767,419 3,222,695 2,222,123 2,057,011 2,912,461 Principal 545,000 23,301,611 11,272,161 5,258,421 31,479,922 1,460,527 2,172,123 3,688,178 3,135,235 3,474,153 Other expenditures 15,777 28,645 2,436 10,474 21,136 1,959 1,200 853 Capital outlay 38,541,728 16,982,124 12,124,363 21,441,381 13,477,686 58,858,361 15,878,284 18,113,770 13,731,986 13,823,912 Total expenditures 76,559,071 78,335,307 61,398,630 66,360,442 88,647,923 106,208,500 67,658,300 75,308,485 75,351,672 81,446,811 Excess of revenue over (under) expenditures (30,622,154) (29,940,884) (15,300,615) (10,544,671) (29,968,459) (49,949,688) (4,411,189) (2,313,066) 2,528,804 2,746,289 Other Financing Sources (Uses) Refunding bonds issued Premium on refunding bonds Bond anticipation note 12,741,611 30,000,000 6,550,000 2013 GO bonds 9,665,000 2013 GO bond premium 455,236 LIFT GO bonds 28,210,000 LIFT GO bond premium 2,137,096 Capital lease 51,475,433 Proceeds from sales of capital assets 4,607,525 15,088 1,800,000 761,483 9,337,640 1,431,042 Public safety bonds 23,235,000 Public safety bond premium 2,519,362 Loan proceeds 18,750,000 5,953,936 1,819,279 226,786 39,450 16,092 54,388 Transfers in 1,880,598 2,348,144 2,406,488 1,889,311 2,052,217 2,609,009 5,840,299 13,632,421 8,742,180 7,299,099 Transfers out (2,218,278) (1,931,044) (2,478,701) (2,068,775) (3,041,638) (2,921,209) (6,149,499) (13,919,797) (8,751,865) (7,924,691) Total other financing sources uses 31,153,931 30,417,100 11,085,311 15,909,796 32,976,954 52,151,501 9,028,440 1,183,115 6,408 25,183,157 Net change in fund balances $531,776 $476,216 ($4,215,304) $5,365,125 $3,008,495 $2,201,813 $4,617,251 ($1,129,950) $2,535,212 $27,929,446 Debt service as a percentage of noncapital expenditures 2.0% 38.9% 23.9% 13.2% 44.2%6.8% 10.4% 10.3%8.4%9.4% Fiscal Year September 15, 2020 Agenda Packet Page 242 of 294 Statistical Information 5 Statistical Information City of Bothell Assessed Value of Taxable Property Last Ten Fiscal Years Year Real Property Personal Property Total Taxable Assessed Value Total Direct Tax Rate* 2010 5,448,364,635 1,135,077,757 6,583,442,392 1.40 2011 5,170,948,110 1,166,946,298 6,337,894,408 1.49 2012 4,765,234,231 1,142,409,091 5,907,643,322 1.62 2013 4,788,399,900 1,016,236,063 5,804,635,963 1.67 2014 5,226,252,184 902,744,249 6,128,996,433 1.60 2015 6,756,976,860 894,227,150 7,651,204,010 1.50 2016 7,223,612,278 1,072,446,159 8,296,058,437 1.43 2017 8,097,355,849 686,091,405 8,783,447,254 1.90 2018 9,214,882,284 686,001,760 9,900,884,044 1.64 2019 10,697,535,110 717,738,564 11,415,273,674 1.91 Source: King and Snohomish County Assessors Office Note: *Tax rate is per $1,000 of assessed value. Real and personal property have been assessed at 100% of the estimated value. September 15, 2020 Agenda Packet Page 243 of 294 Statistical Information 6 Statistical Information City of Bothell Direct and Overlapping Property Tax Rates Last Ten Fiscal Years The combined property tax rate excluding excess levies cannot exceed $10 per $1,000 of assessed valueThe rates presented above include excess levies Source: King and Snohomish County Assessors Office Note: The City of Bothell is split equally between King and Snohomish Counties Year Regular Levy Street Levy GO Bond Public Safety Levy Total Direct Rate WA State King County School District County Port Hospital District Library Emergency Medical Services Park/Rec District Flood District Ferry District RTA Total Direct & Overlapping Rate 2010 1.29 0.11 1.40 2.20 1.28 4.04 .22 .46 .49 .30 .02 .11 .010 10.53 2011 1.37 0.12 1.49 2.28 1.34 4.60 .22 .48 .57 .30 .15 .11 .004 11.55 2012 1.48 0.13 1.62 2.42 1.42 4.75 .23 .49 .57 .30 .02 .12 .004 11.94 2013 1.54 0.13 1.67 2.57 1.54 5.30 .23 .52 .57 .30 .02 .13 .004 12.85 2014 1.49 0.11 1.60 2.38 1.52 4.93 .22 .47 .56 .29 .02 .15 .003 12.13 2015 1.41 0.09 1.50 2.29 1.35 4.44 .19 .40 .50 .30 .01 .14 11.12 2016 1.33 0.10 1.43 2.17 1.48 4.22 .17 .38 .48 .28 .01 .13 10.75 2017 1.29 0.50 0.11 1.90 2.03 1.39 4.01 .15 .36 .45 .26 .01 .12 .25 10.93 2018 1.18 0.46 1.64 2.92 1.33 3.66 .14 .33 .41 .24 .01 .11 .23 11.02 2019 1.02 0.46 0.43 1.91 2.63 1.22 3.49 .12 .29 .37 .22 .01 .10 .21 10.57 Year Regular Levy Street Levy GO Bond Public Safety Levy Total Direct Rate WA State Snohomish County School District County Port Hospital District Library Emergency Medical Services Park/Rec District Flood District Ferry District RTA Total Direct & Overlapping Rate 2009 1.18 0.09 1.27 1.91 0.72 3.48 .16 .42 .19 .01 8.16 2010 1.29 0.11 1.40 1.99 0.78 4.04 .18 .49 .20 .02 9.10 2011 1.37 0.12 1.49 2.21 0.87 4.60 .15 .57 .21 .02 10.11 2012 1.48 0.13 1.62 2.38 0.98 4.75 .11 .50 .30 .02 10.65 2013 1.54 0.13 1.67 2.43 1.08 5.30 .11 .57 .30 .02 11.47 2014 1.49 0.11 1.60 2.38 1.08 4.93 .56 .29 .02 10.85 2015 1.41 0.09 1.50 2.28 1.00 4.44 .50 .27 .01 10.00 2016 1.33 0.10 1.43 2.12 0.93 4.22 .09 .48 .26 .01 9.55 2017 1.29 0.50 0.11 1.90 2.03 0.88 4.01 .45 .25 .01 .25 9.78 2018 1.18 0.46 1.64 2.85 0.79 3.66 .42 .33 .01 .23 9.93 2019 1.02 0.46 0.43 1.91 2.57 0.72 3.49 .37 .30 .01 .21 9.58 Overlapping Tax Rates - Snohomish County Overlapping Tax Rates - King CountyCity Direct Rates City Direct Rates September 15, 2020 Agenda Packet Page 244 of 294 Statistical Information 7 Statistical Information City of Bothell Principal Property Tax Payers Current and Ten Years Ago Snohomish County Taxpayers Taxpayer Taxable Assessed Value Rank Percentage of Total Assessed Valuation Taxable Assessed Value Rank Precentage of Total Assessed Valuation Seattle Genetics Inc 121,565,083 1 2.59% Canyon Park Owner 107,001,500 2 2.28% Philips Ultrasound Inc 85,575,310 3 1.83%86,840,309 3 1.85% BRE Properties Inc 85,000,000 4 1.81%41,908,000 5 0.89% LIPT 27th Ave SE LLC 63,000,000 5 1.34% Essex Portfolio LP 57,500,000 6 1.23% DS Canyon Park LP 50,873,100 7 1.09% EQR-Fanwell 48,000,000 8 0.95% BRE WA Office Owner LLC 44,717,000 9 0.88% Monte Villa Farms LLC 41,074,070 10 1.02%40,507,635 6 0.86% Arden Realty Inc/Thompson Prop Tax Svc 143,719,000 1 3.07% Teachers Insurance & Annuity Assn 140,188,000 2 2.99% AT&T Mobility LLC 75,077,397 4 1.60% Diamond Canyon Park LLC 37,000,000 7 0.79% Immunex Mfg Corp 35,560,800 8 0.76% LBA Realty/Thompson Prop Tax Service 35,052,000 9 0.75% Stonemeadow Farm Apartments Inc 34,949,929 10 0.75% Total Assessed Valuation - Largest Taxpayers 704,306,063 15.03%670,803,070 20.58% Total Assessed Valuation - All Other 3,982,567,666 84.97%2,588,807,113 79.42% Total Assessed Value $4,686,873,729 100.00%$3,259,610,183 100.00% King County Taxpayers Taxpayer Taxable Assessed Value Rank Precentage of Total Assessed Valuation Taxable Assessed Value Rank Precentage of Total Assessed Valuation AT&T Mobility LLC $259,605,155 1 3.86% Grosvenor International Ltd (formerly Schnitzer West)150,781,621 2 2.24% Village at Beardslee (formerly Gateway Apartments LLC)148,426,743 3 2.21% 1DP Bothell TIC 147,044,000 4 2.19% Belkorp Holdings Inc.72,287,000 5 1.07% Willina LLC 51,453,000 6 0.76% Essex Property Trust 50,646,000 7 0.75%27,458,400 8 0.83% MSPT X LLC 48,646,000 8 0.72% North Creek Facility LLC 48,114,500 9 0.72% Puget Sound Energy 45,296,943 10 0.67%21,954,946 9 0.66% T-Mobile 289,746,236 1 8.72% Schnitzer Northwest 166,548,100 2 5.01% Seattle Times 77,324,483 3 2.33% Arden Realty Inc. (formerly Allstate Ins.)42,936,300 4 1.29% Tishman Speyer Archstone-SM 42,015,000 5 1.26% KPS Realty 35,549,491 6 1.07% Archstone Communities Trust 27,661,000 7 0.83% S/I North Creek VIII LLC 20,050,900 10 0.60% Total Assessed Valuation - Largest Taxpayers 1,022,300,962 15.19%751,244,856 22.60% Total Assessed Valuation - All Other 5,706,098,983 84.81%2,572,587,353 77.40% Total Assessed Value $6,728,399,945 100.00%$3,323,832,209 100.00% 2019 2010 2019 2010 Sources: Snohomish County Assessor King County Levy AdministrationCity of Bothell is split between Snohomish and King Counties September 15, 2020 Agenda Packet Page 245 of 294 Statistical Information 8 Statistical Information City of Bothell Property Tax Levies and Collections Last Ten Fiscal Years Collections Taxes Levied in Subsequent Year for the Year Amount % of Levy Years Amount % of Levy 2010 4,639,863 4,603,679 99.22%104,876 4,603,679 99.22% 2011 4,837,689 4,793,177 99.08%54,797 4,793,177 99.08% 2012 5,015,207 4,903,054 97.76%52,236 4,903,054 97.76% 2013 5,006,353 4,963,964 99.15%35,007 4,963,964 99.15% 2014 4,950,243 4,885,315 98.69%23,343 4,885,315 98.69% 2015 6,476,342 6,417,312 99.09%48,388 6,417,319 99.09% 2016 6,791,598 6,754,809 99.46%59,746 6,759,618 99.53% 2017 9,606,199 9,469,463 98.58%74,539 9,475,686 98.64% 2018 9,380,133 9,236,077 98.46%64,597 9,300,674 99.15% 2019 12,781,677 12,679,392 99.20%12,679,392 99.20% Collections Taxes Levied in Subsequent Year for the Year Amount % of Levy Years Amount % of Levy 2010 5,214,713 5,124,092 98.26%56,516 5,180,548 99.34% 2011 5,234,385 5,159,574 98.57%57,068 5,216,583 99.66% 2012 5,331,158 5,260,360 98.67%74,392 5,330,453 99.99% 2013 5,470,860 5,416,398 99.00%20,901 5,437,241 99.39% 2014 5,678,750 5,629,993 99.14%53,282 5,683,242 100.00% 2015 5,775,353 5,713,365 98.93%42,486 5,753,749 99.63% 2016 5,862,819 5,806,545 99.04%51,113 5,850,665 99.79% 2017 7,760,704 7,704,520 99.28%87,808 7,711,125 99.36% 2018 8,183,374 8,089,388 98.85%63,340 8,152,728 99.63% 2019 10,367,079 8,820,992 85.09%10,236,238 98.74% Year of Levy Total Collections to Date King County Collected Within the Year of Levy Total Collections to Date Snohomish County Collected Within the September 15, 2020 Agenda Packet Page 246 of 294 Statistical Information 9 Statistical Information City of Bothell Sales Tax Revenue by Category Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Retail trade $2,660,629 $2,679,046 $2,483,071 $2,285,820 $2,459,483 $2,813,968 $3,515,580 $3,253,940 $3,276,788 $3,817,433 Wholesale trade 1,057,129 914,654 1,247,453 1,133,400 1,231,411 1,152,732 1,003,675 1,012,938 1,072,780 1,108,085 Construction 2,038,018 1,433,788 1,370,608 2,176,732 2,022,908 2,176,682 2,265,917 2,801,526 2,951,610 3,424,461 Information 403,623 344,136 545,752 704,458 655,963 589,189 627,239 444,910 377,662 266,864 Professional, scientific, technical services 561,669 534,827 533,135 302,826 371,777 463,557 606,318 629,583 609,313 1,016,751 Accommodation and food services 697,014 724,495 779,264 820,289 904,148 1,058,599 1,416,027 1,246,141 1,206,461 1,364,542 Real estate, rental, leasing 179,855 171,944 166,304 199,154 491,200 570,635 599,020 723,113 605,407 621,072 Manufacturing 149,227 187,089 267,381 260,679 318,465 490,391 461,910 578,907 479,526 507,363 Admin, supp, remed services 233,155 233,104 228,612 240,316 250,973 282,831 317,043 460,863 439,480 640,006 Other services 223,163 278,395 413,643 459,074 495,436 162,927 189,596 175,003 159,424 195,535 Other 558,650 630,764 230,837 668,765 730,573 364,861 446,420 428,507 390,828 442,715 Total $8,762,132 $8,132,242 $8,266,060 $9,251,513 $9,932,337 $10,126,372 $11,448,745 $11,755,431 $11,569,279 $13,404,827 City direct sales tax rate is 0.85% King County 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% Snohomish County 0.85%0.85%0.85%0.85%0.85%0.85%0.85%0.85%0.85%0.85% Source: Washington State Department of Revenue September 15, 2020 Agenda Packet Page 247 of 294 Statistical Information 10 Statistical Information City of Bothell Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years Rapid Total Transit Sales Tax 2010 2.5%6.5%.5%9.5% 2011 2.5%6.5%.5%9.5% 2012 2.5%6.5%.5%9.5% 2013 2.5%6.5%.5%9.5% 2014 2.5%6.5%.5%9.5% 2015 2.5%6.5%.5%9.5% 2016 2.5%6.5%.5%9.5% 2017 2.5%6.5%1.0%10.0% 2018 2.5%6.5%1.0%10.0% 2019 2.5%6.5%1.0%10.0% Rapid Total Transit Sales Tax 2010 2.5%6.5%.5%9.5% 2011 2.5%6.5%.5%9.5% 2012 2.5%6.5%.5%9.5% 2013 2.5%6.5%.5%9.5% 2014 2.5%6.5%.5%9.5% 2015 2.5%6.5%.5%9.5% 2016 2.8%6.5%.5%9.8% 2017 2.8%6.5%1.0%10.3% 2018 2.8%6.5%1.0%10.3% 2019 2.9%6.5%1.0%10.4% Year Local State King County Year Local State Snohomish County Source: Washington State Department of Revenue September 15, 2020 Agenda Packet Page 248 of 294 Statistical Information 11 Statistical Information City of Bothell Ratios of Outstanding Debt by Type Last Ten Fiscal Years Total Percentage Debt General Capital Term Loan Water Sewer Combined Term Loan Primary Per Capita of Personal Per Year Obligation Lease Payable Bonds Bonds Utility Bonds Payable Government Income*Income Population Capita 2010 17,106,611 18,750,000 900,787 36,757,398 59,198 1.86 33,430 1,100 2011 33,749,705 8,750,000 788,188 43,287,893 49,115 2.61 33,720 1,284 2012 37,832,839 675,589 38,508,428 50,559 2.24 34,000 1,133 2013 48,193,354 562,992 48,756,346 52,943 2.67 34,460 1,415 2014 39,375,000 7,367,710 18,355,000 1,014,416 66,112,126 58,402 2.72 41,630 1,588 2015 40,730,841 51,475,433 7,153,969 19,021,527 1,024,715 119,406,485 61,021 4.59 42,640 2,800 2016 38,897,595 50,422,952 6,706,846 18,323,246 953,791 115,304,430 64,553 4.06 43,980 2,622 2017 37,014,349 49,344,780 6,299,173 17,594,964 795,676 111,048,942 69,214 3.62 44,370 2,503 2018 35,801,103 48,016,609 5,868,142 16,846,683 637,562 107,170,099 74,620 3.17 45,260 2,368 2019 60,307,219 46,623,437 5,469,235 16,063,401 592,046 129,055,338 NA NA 46,750 2,761 Government Activities Business-Type Activities *Bureau of Economic Analysis September 15, 2020 Agenda Packet Page 249 of 294 Statistical Information 12 Statistical Information City of Bothell Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Percentage of General Total Taxable Actual Taxable Year Obligation Bonds Assessed Value Value of Property Population Per Capita 2010 17,106,611 6,583,442,392 0.26 33,430 512 2011 33,749,705 6,337,894,408 0.53 33,720 1,001 2012 37,732,759 5,907,643,322 0.64 34,000 1,110 2013 48,193,354 5,804,635,963 0.83 34,460 1,399 2014 39,375,000 6,128,996,433 0.64 41,630 946 2015 92,206,274 7,651,204,010 1.21 42,640 2,162 2016 89,320,547 8,296,058,437 1.08 43,980 2,031 2017 86,359,129 8,783,447,254 0.98 44,370 1,946 2018 83,817,712 9,900,884,044 0.85 45,260 1,852 2019 106,930,656 11,415,273,674 0.94 46,750 2,287 September 15, 2020 Agenda Packet Page 250 of 294 Statistical Information 13 Statistical Information City of Bothell Computation of Direct and Overlapping Debt December 2019 Worksheet Only - Do not print this section in CAFR! Governmental Unit Net Debt Outstanding Estimated Percentage Applicable Estimated Share of Overlapping Debt King County $637,704,694 1.88%$12,000,147 Snohomish County 341,598,131 8.59%29,357,177 Northshore School District 543,319,567 53.13%288,651,431 King County Hospital #2 171,543,495 14.72%25,251,010 Port of Seattle 335,470,000 1.88%6,312,780 Northshore Parks & Rec 404,810 53.17%215,233 King County Library System 66,743,220 3.18%2,122,837 Total overlapping debt $2,096,783,917 $363,910,616 City of Bothell $112,399,891 100.00%$112,399,891 Total direct and overlapping debt $2,209,183,808 $476,310,507 Direct Debt Overlapping Debt Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Bothell. This process recognizes that, when considering the government’s ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. The information shown above regarding outstanding debt of various governmental units and estimated percentage overlap has been provid- ed by King County and Snohomish County and has not been independently verified by the City. September 15, 2020 Agenda Packet Page 251 of 294 Statistical Information 14 Statistical Information City of Bothell Legal Debt Margin Information Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Assessed value $6,583,442,392 $6,337,894,408 $5,907,643,322 $5,804,635,963 $6,128,996,433 $7,651,204,010 $8,296,058,437 $8,783,447,254 $9,900,884,044 $11,415,273,674 Debt limit (7.5% of assessed value)493,758,179 475,342,081 443,073,249 435,347,697 459,674,732 573,840,301 622,204,383 658,758,544 742,566,303 856,145,526 Debt applicable to limit General obligation bonds 17,106,611 33,805,000 37,832,839 48,193,354 46,742,710 99,360,243 96,027,393 92,658,302 89,685,854 112,399,891 Less: amount set aside for repayment 669 55,295 100,080 103,808 29,738 396 (928)88,030 0 0 Total net debt applicable to limit 17,105,942 33,749,705 37,732,759 48,089,546 46,712,972 99,359,847 96,028,321 92,570,272 89,685,854 112,399,891 Legal debt margin 476,652,237 441,592,376 405,340,490 387,258,151 412,961,760 474,480,454 526,176,061 566,188,272 652,880,449 743,745,634 Total net debt applicable to the limit as a percentage of debt limit 15.43%14.05%12.08%13.13%3.46%7.10%8.52%11.05%10.16%17.31% September 15, 2020 Agenda Packet Page 252 of 294 Statistical Information 15 Statistical Information City of Bothell Pledged-Revenue Coverage Last Ten Fiscal Years Utility Less Net Service Operating Available Year Charges Expenses Revenue Principal Interest Coverage 2014 $15,996,535 $13,332,786 $2,663,749 $520,000 $794,301 2.03 2015 $19,071,965 $13,913,731 $5,158,234 $635,000 $676,769 3.93 2016 $20,005,376 $14,487,888 $5,517,488 $665,000 $651,369 4.19 2017 $19,836,124 $16,671,040 $3,165,084 $665,000 $651,369 2.40 2018 $21,739,505 $17,136,580 $4,602,924 $685,000 $624,769 3.51 2019 $21,577,950 $18,790,331 $2,787,619 $720,000 $590,519 2.13 Combined Utility System Bonds Debt Service Notes: - Details regarding the City’s outstanding debt can be found in the notes to the financial statements - Operating expenses do not include interest and depreciation expenses - 2014 Combined Utility Bonds debt service requirement is maximum annual debt service of $1,316,369 Operating Operating Operating Debt Coverage Year Revenue Expense Income Service Ratio 2014 $4,247,227 $3,963,237 $283,990 2015 $6,053,287 $4,320,189 $1,733,098 $277,473 6.25 2016 $5,722,568 $4,180,760 $1,541,808 $277,681 5.55 2017 $5,686,533 $4,730,981 $955,552 $277,281 3.45 2018 $5,723,140 $4,754,634 $968,506 $276,681 3.50 2019 $5,873,078 $5,334,420 $538,658 $274,431 1.96 Operating Operating Operating Debt Coverage Year Revenue Expense Income Service Ratio 2014 $6,601,973 $5,830,950 $771,023 2015 $7,556,241 $5,979,353 $1,576,888 $125,380 12.58 2016 $7,998,203 $6,273,035 $1,725,168 $124,206 13.89 2017 $7,879,956 $6,931,407 $948,549 $126,806 7.48 2018 $8,284,176 $7,040,320 $1,243,856 $124,206 10.01 2019 $8,338,855 $8,034,340 $304,515 $125,956 2.42 Operating Operating Operating Debt Coverage Year Revenue Expense Income Service Ratio 2014 $5,147,336 $3,538,598 $1,608,738 1.77 2015 $5,462,436 $3,614,189 $1,848,247 $911,448 2.03 2016 $6,284,605 $4,034,093 $2,250,512 $909,881 2.47 2017 $6,269,634 $5,008,652 $1,260,982 $912,281 1.38 2018 $7,732,189 $5,341,626 $2,390,563 $908,881 2.63 2019 $7,366,017 $5,421,571 $1,944,446 $910,131 2.14 Utility Revenue Bond (Water) Debt Service Coverage Ratios Utility Revenue Bond (Sewer) Debt Service Coverage Ratios Utility Revenue Bond (Storm & Surface Water) Debt Service Coverage Ratios September 15, 2020 Agenda Packet Page 253 of 294 Statistical Information 16 Statistical Information City of Bothell Utility Revenue Bond Statistics Notes: See the BMC Title 18 for utility rates on the City’s Website Approximately 94% of Sewer Utility customers are residential and the remainder are commercial or non-residential Residential Commercial Irrigation Volume Volume Volume Residential Commercial Irrigation Year (CCF)1 (CCF)2 (CCF)Revenue Revenue Revenue 2014 449,900 153,098 101,396 $2,068,377 $766,624 $767,292 2015 431,743 159,648 136,363 $2,842,981 $891,066 $1,027,296 2016 443,516 175,473 121,815 $2,407,187 $956,181 $920,974 2017 456,067 153,945 121,580 $2,657,446 $909,992 $1,036,958 2018 448,612 144,179 118,492 $2,834,251 $894,790 $1,023,423 2019 462,326 146,177 106,199 $2,971,814 $977,465 $893,613 Water Total Volume Commercial/ Year Residential Nonresidential Total 2014 3,494 502 3,996 2015 3,580 505 4,085 2016 3,656 519 4,175 2017 4,079 580 4,659 2018 3,776 512 4,288 2019 3,786 506 4,292 Water Utility Customers Consumption Number of Average Year (CCF)Accounts GPD/Account 2014 715,943 4,031 363.98 2015 754,601 4,085 378.56 2016 753,195 4,175 371.04 2017 745,366 4,230 367.00 2018 711,283 4,288 339.94 2019 714,905 4,292 341.35 Water Total Consumption 1 Residential includes apartments and mobile home parks 2 Commercial volume includes government/education Commercial/ Year Residential Nonresidential Total 2014 4,764 333 5,097 2015 4,795 333 5,128 2016 4,867 333 5,200 2017 5,373 343 5,716 2018 4,977 309 5,286 2019 4,747 637 5,384 Sewer Utility Customers Residential Commercial Residential Commercial Volume Volume Revenue Revenue Year (CCF)(CCF)(CCF)(CCF) 2014 449,900 153,098 $5,140,586 $1,028,971 2015 431,743 159,648 $5,526,670 $1,183,067 2016 443,516 175,473 $5,732,613 $1,363,537 2017 456,067 153,945 $6,021,440 $1,240,531 2018 249,216 144,179 $6,259,635 $1,194,226 2019 240,893 295,857 $6,810,922 $1,214,667 Sewer Total Consumption Commercial/ Year Residential Condominiums Seniors Nonresidential Total 2014 9,528 1,613 491 805 12,437 2015 N/A N/A N/A N/A N/A 2016 N/A N/A N/A N/A N/A 2017 N/A N/A N/A N/A N/A 2018 10,040 2,556 395 773 13,764 2019 11,008 2,845 295 916 15,064 Storm & Surface Water Utility Customers Approximately 73% of Storm & Surface Water Utility customers are residential and the remain- der are commercial or non-residential. September 15, 2020 Agenda Packet Page 254 of 294 Statistical Information 17 Statistical Information City of Bothell Demographic and Economic Statistics Last Ten Fiscal Years Personal Per Capita Education Income Personal Median Level in Years School Unemployment Year Population (in thousands)Income Age of Schooling Enrollment Rate 2010 33,430 1,641,914 49,115 38 13.7 27,521 9.10% 2011 33,720 1,704,849 50,559 38 13.7 27,598 7.90% 2012 34,000 1,800,062 52,943 38 13.7 28,390 6.50% 2013 34,460 1,890,053 65,131 38 13.7 25,548 5.30% 2014 41,630 2,460,526 59,105 40 13.7 29,140 4.60% 2015 42,640 2,683,704 61,021 40 13.7 30,995 5.00% 2016 43,980 2,839,041 64,553 40 13.7 31,984 3.70% 2017 44,370 3,089,084 69,621 38 13.7 31,528 4.10% 2018 45,260 3,377,301 74,620 38 13.7 32,286 3.30% 2019 46,750 NA NA 38 13.7 33,608 4.30% Sources: -Washington State - Office of Financial Management (OFM) -US Department of Labor - Bureau of Labor Statistics (BLS) -US Department of Commerce - Bureau of Economic Analysis (BEA) -Northshore School District (NSSD), University of Washington-Bothell (UW-B), Cascadia College -US Census Bureau 2010 Demographic Profile Data -Northshore School District (NSSD), University of Washington-Bothell (UW-B), Cascadia College NA = Not Available September 15, 2020 Agenda Packet Page 255 of 294 Statistical Information 18 Statistical Information City of Bothell Principal Employers Current Year and Ten Years Ago 2019 Percentage Percentage of Total City of Total City Employer Product or Service Rank Employees Employment Rank Employees Employment Northshore School District Education 1 2,284 7.85% 2 1,793 22.86% Phillips Ultrasound Diagnostic imaging manufacturer 2 1,668 5.74% 3 1,187 15.13% AT&T Mobile Telecommunications 3 1,551 5.33% 1 2,079 26.50% Seattle Genetics Manufacturer 4 1,053 3.62% University of Washington-Bothell Education 5 728 2.50% 8 367 4.68% T-Mobile West LLC Telecommunications 6 568 1.95% 4 466 5.94% Puget Sound Energy Utility services - electric/gas 7 554 1.90% 5 451 5.75% Panasonic (Matsushita) Avionics Aviation manufacturer 8 466 1.60% 6 423 5.39% Molina Healthcare of WA Inc Insurance 9 386 1.33% City of Bothell Municipal government 10 357 1.23% Vertafore Inc Insurance technology 7 402 5.12% Phillips Electric No American Corp Electric manufacturer 9 364 4.64% Seattle Times Newspaper 10 313 3.99% Total 9,615 33.05%7,845 39.00% 2010 Sources: -City of Bothell Business License System -City of Bothell Human Resources Department -Northshore School District (NSSD) -University of Washington-Bothell (UW-B) September 15, 2020 Agenda Packet Page 256 of 294 Statistical Information 19 Statistical Information City of Bothell Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Full-Time Equivalent Employees as of December 31 Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Executive Legislative 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 City Manager 7.00 7.00 7.00 7.00 6.00 6.00 6.00 6.00 6.00 6.00 City Clerk 2.75 2.75 2.75 2.75 2.75 2.75 3.00 3.00 3.00 3.00 Information Technology 10.00 10.00 10.00 10.00 10.00 10.00 10.00 14.00 15.00 17.50 Judicial 4.00 4.50 4.50 4.50 4.50 4.50 4.50 6.35 6.85 7.85 Non-Dept/Tourism 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.20 1.20 3.05 Finance 8.25 8.25 8.25 8.65 8.65 8.85 9.20 12.20 12.75 9.75 Legal 3.56 3.56 3.56 4.15 4.15 4.15 4.15 5.75 5.75 5.75 Human Resources 6.00 6.00 6.00 6.00 6.00 6.00 6.00 5.00 6.00 5.00 Police Officers 58.00 58.00 58.00 58.00 58.00 57.00 57.00 57.00 55.00 81.00 Civilians 25.75 25.75 25.75 26.75 32.00 32.00 32.00 32.00 39.00 31.00 Fire Firefighters and officers 57.00 57.00 57.00 57.00 57.00 57.00 57.00 57.00 62.00 68.00 Civilians 7.75 7.75 7.75 7.75 9.75 9.75 9.75 9.25 7.25 7.25 Community Development 22.50 21.00 21.00 21.00 22.00 23.50 23.50 24.00 24.00 25.00 Parks & Recreation 10.42 10.42 10.42 9.45 11.45 11.50 11.50 15.80 15.80 16.50 Public Works Facilities 4.71 4.71 4.71 4.55 5.30 5.30 5.30 7.60 7.60 8.65 Engineering 26.27 26.27 26.27 25.20 25.20 25.71 25.71 24.80 25.80 25.85 Street 7.80 7.80 7.80 7.30 8.60 10.71 10.71 13.30 13.30 13.75 Water 8.83 8.83 8.83 8.81 8.83 8.94 8.94 9.86 9.58 9.48 Sewer 8.41 8.41 8.41 8.43 9.43 9.54 9.54 9.46 9.18 8.98 Storm & Surface Water 13.31 13.31 13.31 15.06 17.24 18.35 18.35 20.49 20.49 20.15 Fleet 2.72 2.72 2.72 2.55 2.80 2.80 2.80 2.80 2.80 4.85 Self-Insurance/Risk Mgmt .70 .70 .70 1.35 1.35 1.35 1.35 1.25 1.25 2.25 Totals 303.73 302.73 302.73 304.25 319.00 323.70 324.30 345.10 356.60 387.60 Source: Human Resources Department September 15, 2020 Agenda Packet Page 257 of 294 Statistical Information 20 Statistical Information City of Bothell Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Police Calls for service 26,909 25,071 26,417 25,188 26,891 25,865 29,758 27,923 27,491 26,524 Physical arrests 1,975 1,568 1,565 NA NA NA 682 1,133 1,221 1,631 Traffic violations 5,188 3,828 3,625 2,472 2,388 2,512 2,791 2,914 2,237 2,369 Fire Emergency alarms 4,788 4,975 4,946 5,300 5,870 6,196 6,253 6,341 6,350 6,641 Inspections 1,231 1,193 1,422 1,324 2,210 1,174 1,799 569 885 1,342 Community Development Building permits issued 392 464 529 633 519 607 709 1,590 1,739 1,609 Building inspections 3,772 3,132 3,177 4,223 5,428 5,241 6,089 5,445 9,819 7,024 Parks and Recreation Field & shelter bookings 2,437 2,332 2,444 2,703 2,394 2,808 2,764 1181* 2,434 2,518 Water Units served 3,945 3,950 3,944 3,950 3,996 4,083 4,175 4,659 4,337 4,292 Water main breaks 5 2 2 3 3 1 Average daily consumption 1,376 1,287 1,324 1,360 1,470 1,499 1,496 1,552 1,478 1,575 (thousands of gallons) Sources: City Departments NA = Not Available * Incomplete data due to software conversion. Data from July-December 2017. September 15, 2020 Agenda Packet Page 258 of 294 Statistical Information 21 Statistical Information City of Bothell Capital Asset Statistics by Function/Program Last Ten Fiscal Years Sources: City Departments N/A = Not Available Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Public Safety Police stations 1 1 1 1 1 1 1 1 1 1 Fire stations 3 3 3 3 3 3 3 3 3 3 Public Works - Streets Streets (miles)326 326 326 262.7* 302 303.4 303.9 306.4 304.7 308.3 Street lights 1,957 1,957 1,957 2,100 2,100 2,100 2,100 NA NA NA Parks and Recreation Acreage 201.02 237.23 237.23 247.62 262.7 262.7 297.07 400.54 405.54 403.09 Parks 23 23 23 23 24 24 27 28 28 26 Water Water mains (miles)72.5 72.5 79.5 94.9 96.9 97.8 115.3 116.5 117.5 120 Sewer/Storm & Surface Water Sanitary sewers (miles)58.2 58.6 62.4 62.8 63.9 65.00 69.20 69.60 70.1 70.5 Storm sewers (miles)110 110 119.9 119.9 139.7 143.0 145.7 143.4 145.4 145.9 September 15, 2020 Agenda Packet Page 259 of 294 September 15, 2020 Agenda Packet Page 260 of 294 City Council Agenda Bill AB # 20-120 TO: Mayor Olsen and Members of the Bothell City Council FROM: Mathew Pruitt, Human Resources Director Becky Range, Assistant to the City Manager Christian Stark, Executive Intern (Presenter) Members of the Diversity and Inclusion Committee (Presenters) DATE: September 15, 2020 SUBJECT: Receive a Report on Diversity, Equity, and Inclusion Research , Consider Providing Direction to the City Manager, and Consider Approval of a Resolution Reaffirming its Commitment to be a Safe, Welcoming and Equitable Community for all and Denouncing Hatred, Intolerance and Discrimination POLICY CONSIDERATION: Bothell is growing and diversifying dramatically. Today, the proportion of City residents of color is an estimated 4.5 times more than the proportion in 1990. Many other city and county governments in the region have established a formal initiative to prio ritize and guide work focused on diversity, equity, and inclusion. The City of Bothell is poised to formalize a similar commitment. This item asks the City Council to review research conducted by Executive Intern Christian Stark and the Diversity and Inclusion Committee (Dive -in), consider establishing a council goal in regard to promoting Diversity, Equity, and Inclusion (DEI), and provide direction to the City Manager to bring back funding options regarding community engagement and a DEI initiative as part of the 2021-22 budget process. In addition, Resolution No. __ is provided for Council’s consideration that reaffirms its commitment to be a safe, welcoming and equitable community for all and denouncing hatred, intolerance and discrimination. HISTORY: In 2018, City Council supported the creation of an internal committee focused on diversity, equity, and inclusion. Known internally as the DiveIn Committee, this group has focused its efforts in 2020 on listening and learning from Diversity, Equity, and Inclusion (DEI) Initiatives at nearby cities and counties and thinking critically about the specific needs of Bothell. September 15, 2020 Agenda Packet Page 261 of 294 City Council Agenda Bill AB # 20-120 The Cities and Counties included in the research were: 1. King County – Equity and Social Justice Initiative 2. City of Shorel ine, WA – Diversity & Inclusion Initiative 3. City of Renton, WA – Building an Inclusive City Initiative 4. City of Bellevue, WA – Bellevue Diversity Advantage Initiative The four jurisdictions above were chosen because they represented a range between well -developed programs with significant resources dedicated to DEI (King County, Renton, and Bellevue) and programs with resource levels more comparable to Bothell (Shoreline). DISCUSSION: All of the DEI Initiatives researched were guided by direction from the City or County Council. Staff recommends that the Council create a goal that reflect s a commitment to advancing diversity and inclusion among City staff, equity in the outcomes of City policy and decision making, and inclusion in City engagement with, and accessibility for, all members of the community. Once Council sets the goal to guide the organization, staff would then create a work plan to serve as a detailed road map, trickling down to Department programs while also offering a means to measure progress along the way. The attached report offers a high-level overview of what our staff believes would be foundational elements of a DEI work plan, organized in order of the work that could be done at escalating levels of staff ing resource s and commitment of funding. The options provide d i n the report cover three key focus areas that were themes at all four City and County jurisdictions were included in the research and in the feedback received from other City staff: 1. Intentional and inclusive community engagement 2. Comprehensive staff trai ning on topics of diversity, equity, and inclusion 3. Department-specific accountability for DEI work FISCAL IMPACTS: There are currently no funds in the 2019-20 budget to expand community engagement or develop a DEI initiative. The budget of the Dive -in Committee is $5,000 annually. Future financial impact will depend on what level of commitment the council makes as part of the 2021-22 budget process. The cost of 1 FTE to perform functions as outlined in the report would be approximately $120,000 annually or $240,000 over the 2021-22 biennium. September 15, 2020 Agenda Packet Page 262 of 294 City Council Agenda Bill AB # 20-120 ATTACHMENTS: Att-1. Diversity, Equity, and Inclusion Research Report Att-2. Resolution reaffirming the City of Bothell City Council’s commitment to be a safe, welcoming and equitable community for all and denouncing hatred, intolerance and discrimination RECOMMENDED ACTION: 1. Provide direction to the City Manager to come back to the Council with (1) a formal process to adopt a City -wide Diversity, Equity, and Inclusion goal, and (2) options to consider as part of the 2021-22 budget process in regard to expanding community engagement and developing a DEI initiative , and; 2. Consider approval of a Resolution reaffirming its commitment to be a safe, welcoming and equitable community for all and denouncing hatred, intolerance and discrimination September 15, 2020 Agenda Packet Page 263 of 294 (This page intentionally left blank) September 15, 2020 Agenda Packet Page 264 of 294 DIVERSITY, EQUITY, AND INCLUSION: RESEARCH AND RECOMMENDATIONS FOR A CITY OF BOTHELL INITIATIVE Authored by DiveIn Committee Members: Christian Stark, Carly Joerger, Aimee Rosse, Laural Cyrus, and Ann Bouzigard September 2020 Att-1 September 15, 2020 Agenda Packet Page 265 of 294 Page 2 of 28 Contents Executive Summary ...................................................................................................................................... 3 Background .................................................................................................................................................. 4 Community Demographics ....................................................................................................................... 4 Staff Demographics .................................................................................................................................. 5 The DiveIn Committee ............................................................................................................................. 5 Research Results .......................................................................................................................................... 7 King County – Equity and Social Justice Initiative .................................................................................... 7 City of Shoreline – Diversity & Inclusion Initiative ................................................................................... 8 City of Renton – Building an Inclusive City Initiative ................................................................................ 9 City of Bellevue – Bellevue Diversity Advantage Initiative ....................................................................... 9 City of Bothell ......................................................................................................................................... 10 Staff Survey Results ............................................................................................................................ 10 Staff Focus Group Results .................................................................................................................. 11 Recommendations ..................................................................................................................................... 11 #1 - Create a Council Goal ...................................................................................................................... 12 #2 – Development of a Workplan .......................................................................................................... 12 Conclusion .................................................................................................................................................. 14 Appendix .................................................................................................................................................... 15 Appendix A – City of Bothell Demographics Analysis ............................................................................. 15 Appendix B – King County Brief .............................................................................................................. 21 Appendix C – Shoreline Brief .................................................................................................................. 23 Appendix D – Renton Brief ..................................................................................................................... 25 Appendix E – Bellevue Brief ................................................................................................................... 27 September 15, 2020 Agenda Packet Page 266 of 294 Page 3 of 28 Executive Summary Bothell is growing and diversifying dramatically. Today, the proportion of City residents of color is an estimated 4.5 times more than the proportion in 1990. Many other city and county governments in the region have established a formal initiative to prioritize and guide work focused on diversity, equity, and inclusion. The City of Bothell has yet to formalize a similar commitment. In 2018, City Council supported the creation of the DiveIn Committee, an internal committee focused on diversity, equity, and inclusion. The Committee has focused its efforts in 2020 on listening and learning from Diversity, Equity, and Inclusion (DEI) Initiatives at nearby cities and counties and thinking critically about the specific needs of Bothell. That research process consisted of three components: • Analysis of current City of Bothell demographics • Research on DEI Initiatives at King County, City of Shoreline, City of Renton, and City of Bellevue • Solicitation of feedback from City staff via a staff survey and a focus group session Research Results: Our research efforts have shown that the governing body is responsible for providing the strategic direction and leadership that is needed to effectively and sustainably serve the community with a focus on diversity, equity, and inclusion. By setting a DEI-related Council Goal, the City Council communicates to the community and the organization that this is a top priority. All of the DEI initiatives we researched were guided by direction from the decision-making body and the City staff we engaged echoed the need for this type of guidance from Bothell leadership to move forward on DEI in their work. Recommendation for City Council: 1. Create a Council Goal a. Staff recommend the Bothell City Council create a new Council Goal reflecting the City’s commitment to advancing diversity in its workplace, inclusion in its engagement with, and accessibility for, all members of the community, and equity in the outcomes of its policy and decision-making 2. Workplan Development a. Staff would then create a workplan with strategic objectives to help guide Department programs while also offering a means to measure progress along the way. Staff have prepared a list components that could fill out a City of Bothell DEI workplan and begin to establish an organizational strategy around implementing that workplan. Along with prioritization of DEI from City Council and City Leadership, the following four key focus areas emerged as foundational components for a strong and sustainable DEI Initiative. They are all reflected in the workplan components included in the last section of this report. 1. Intentional and inclusive community engagement 2. Comprehensive staff training on topics of diversity, equity, and inclusion 3. Department-specific accountability for DEI work & equity-minded decision making 4. Commitment of long-term staff resources September 15, 2020 Agenda Packet Page 267 of 294 Page 4 of 28 Background Bothell is growing and diversifying dramatically. To serve the changing needs of all residents in the Bothell community, the City should create a plan to establish direct engagement relationships with our historically marginalized communities and improve our organizational capacity to work toward equitable outcomes in policy and decision-making. Many other city and county governments in the region have established a formal initiative to prioritize and guide work focused on diversity, equity, and inclusion. The City of Bothell has yet to formalize a similar commitment. This report uses a Bothell demographics analysis, research on other nearby city and county governments, and feedback from Bothell City staff to underline why a community engagement strategy that focuses on Diversity, Equity, and Inclusion (DEI) is prudent and timely for Bothell’s changing needs. The report also explores a set of foundational components that could build toward a workplan organized around a DEI-focused community engagement strategy. Community Demographics Over the last forty years, Bothell has grown from a small suburban town of less than 8,000 to a population today of nearly six times that. Across four decades of growth, Bothell’s population has diversified in race and ethnicity, place of birth, income, ability, and a number of other factors. By 2018, an estimated 32% of the 44,994 residents of Bothell identified as people of color, a proportion 4.5 times that of the proportion of residents of color in 1990. In Northshore School District schools, 43.9% of students enrolled during the 2018-2019 school year identified as students of color. The City of Bothell has also seen a significant increase in its percentage of residents who were born outside of the United States. In 2000, 11.6% of Bothell residents, or an estimated 3,345 residents, were born abroad. By 2018, that proportion had nearly doubled, with foreign born residents making up 19.6% of the city’s overall population, while the total number of foreign-born residents increased by more than 2.5 times to an estimated total of 8,819. September 15, 2020 Agenda Packet Page 268 of 294 Page 5 of 28 An estimated 24.3% of all Bothell residents speak a language other than English. Further, 7.6% of all Bothell residents, or an estimated 3,210 people, indicate that they have limited English proficiency (LEP)1. The six most common native languages spoken among Bothell’s LEP population are Spanish, Chinese (including Mandarin and Cantonese), Korean, Russian, Vietnamese, and Cambodian, Mon- Khmer. See Appendix A for the full community demographics analysis compiled as a part of the research process behind this report. Staff Demographics To understand how reflective City of Bothell staff is of the Bothell community, we analyzed the demographics of City staff. Today, 51 of the 350 people employed at the City of Bothell, or 14.6% of staff, identify as people of color, and the remaining 299 identify as White. Although staff has grown more diverse over the past several years, the proportion of people of color employed by the City remains less than half of the proportion of overall residents of color (32.3%) in the Bothell community. The DiveIn Committee Bothell City Council has taken initial steps toward making diversity, equity, and inclusion a priority. On February 7, 2017, City Council passed a Resolution 1358 reaffirming the City’s commitment to be a safe, welcoming, and equitable community for all. In 2018, City Council supported the creation of a staff-led committee focused on DEI. That committee, known as the DiveIn Committee, began convening monthly meetings in March of 2018. The committee has aimed to bring together one staff member from each City department and is led by a small leadership team chosen from that group of department 1 From the US Office of Civil Rights’ website, “Individuals who do not speak English as their primary language and who have a limited ability to read, speak, write, or understand English can be LEP [Limited English Proficiency]… Title VI of the Civil Rights Act of 1964 requires recipients of Federal financial assistance [the City of Bothell included] to take reasonable steps to make their programs, services, and activities accessible by eligible persons with limited English proficiency.” September 15, 2020 Agenda Packet Page 269 of 294 Page 6 of 28 representatives. The demographics of the DiveIn Committee have fluctuated with staff transitions since the committee was formed. At the time of writing, one committee member identifies as a person of color and the others identify as White. The committee recognizes these demographics are not reflective of the community and that this is an area for improvement for the committee moving forward. Early on, the DiveIn Committee focused on work that would introduce the committee and topics of diversity, equity, and inclusion to City staff. DiveIn released a quarterly newsletter with articles highlighting diverse topics, hosted several “lunch and learns”, and collaborated with other staff on City sponsored functions. With sponsorship from the City Council, the DiveIn Committee organized the installation of the multi-lingual welcome sign that now hangs at City Hall. The DiveIn Committee has worked to promote diversity, equity, and inclusion in the workplace, and to ensure that these conversations move forward to foster a culture that reflects the diversity of the City of Bothell’s staff and community. To support the committee’s work, City Council approved a $10,000 ($5000 per year) budget for the DiveIn Committee in the City’s 2019-2020 biennial budget. The City Council Scorecard was also updated to include “Develop and begin implementing a diversity hiring plan” as a Performance Measure under its City-wide Teambuilding, Training, and Organizational Development goal and the operation of the DiveIn Committee as an ongoing Strategic Objective under its Community Connections goal. Re-focusing DiveIn Efforts in 2020 In December 2019, members of the DiveIn Committee convened for a retreat to reflect on the progress made over the committee’s first two years and think critically about the direction of the committee going forward. By the conclusion of the retreat, the Committee articulated the following vision, mission, and objectives to guide the work in 2020: Vision: An inclusive City culture that values all voices being heard. Mission: Ensure opportunities are created through fair and equitable decision-making. Objectives: 1. Provide educational opportunities for all employees 2. Listen and learn from other Diversity, Equity, and Inclusion (DEI) initiatives 3. Influence equitable decision-making across the organization The ongoing COVID-19 pandemic, and the remote working environment its imposed, have made collaborative staff educational opportunities difficult. Despite these setbacks, the DiveIn Committee has provided several online training opportunities to staff this year in an effort to meet Objective #1. In May, DiveIn Committee members participated in an online racial justice training, and in October, all City staff will attend an online training with Dr. Caprice Hollins of Cultures Connecting focused on cultural competency. The committee has also shared a Ted-talk video featuring a best selling author on anti- racism to City staff along with supporting a “book club” group that is reading and discussing the book featured in the video. Outside of providing educational opportunities for staff, DiveIn’s work thus far in 2020 has largely focused on meeting Objective #2: Listen and learn from other DEI Initiatives. The research process and the writing of this report were developed by a subcommittee of the DiveIn Committee. This subcommittee would like to acknowledge that all of us identify as White and that, as a group, we are not September 15, 2020 Agenda Packet Page 270 of 294 Page 7 of 28 reflective of the demographics of the community we serve. We are also aware that our own biases and privilege influence the research and recommendations presented in this report. Rather than act as a voice of authority on DEI-related topics or the unique needs of the Bothell community, our intention is to strive for better City-wide understanding of the depth of diversity in the Bothell community and identify aspects of government operations that are not currently oriented to incorporate the voices of historically marginalized or under-represented members of our community. We also acknowledge that while we worked hard to incorporate feedback from City staff in the content of this report, we do not speak for all Bothell City staff. The following sections of this report summarize our research process, results, and our recommendations to the City Council. Research Results Through a process that blended online research and interviews with employees at nearby city and county governments, we sought to answer the following research question: What work are other cities and counties in the region doing to formalize a commitment to, and create progress toward, advancing diversity, equity, and inclusion within their workforce and the communities they serve that the City of Bothell could adopt? We chose to focus our research efforts on the initiatives at four jurisdictions in the Puget Sound region: 1. King County – Equity and Social Justice Initiative 2. City of Shoreline, WA – Diversity & Inclusion Initiative 3. City of Renton, WA – Building an Inclusive City Initiative 4. City of Bellevue, WA – Bellevue Diversity Advantage Initiative We chose the four jurisdictions above because they represented a range between well-developed programs with significant resources dedicated to DEI (King County, Renton, and Bellevue) and programs with resource levels more comparable to Bothell (Shoreline). We conducted web research to understand the overall framework of each DEI Initiative and then scheduled subsequent virtual interviews with staff members dedicated to the initiative at Shoreline, Renton, and Bellevue. Guided by our research question, we wanted to learn about the theory of change behind each initiative, the goals that drive progress toward each initiative, and the specific actions taken and staff resources used to achieve success thus far. The next section of this report gives a high-level summary of what we learned from each jurisdiction. See Appendices B-E for more comprehensive summaries. King County – Equity and Social Justice Initiative Guiding Principle/Vision: A King County where all people have equitable opportunities to thrive. Four Strategies: • Invest upstream and where needs are greatest • Invest in community partnerships • Invest in employees • Prioritize accountable and transparent leadership September 15, 2020 Agenda Packet Page 271 of 294 Page 8 of 28 Our Take-aways: King County’s Equity and Social Justice Initiative (ESJ) is comprehensive and a model for working to reorient a county government toward actively addressing systemic racism and governing with equity as a core goal. ESJ was launched by the County Executive in 2008 and strengthened with the passing of an ESJ Ordinance by the County Council in 2010. It is a model of what a DEI initiative can look like when significant time and resources are dedicated to the work. Responsibility for ESJ work is spread across all King County departments. Individual departments dedicate portions of their budget to support community partners and donate non-monetary support to build capacity and skills within the community to strengthen input and collaboration. All County managers, supervisors, deputy directors, and directors receive cultural competency training, 360-style assessments, and coaching to incorporate ESJ core competencies. Members of leadership have ESJ measures incorporated into their performance assessments and professional development work plans, and all departments are required to report progress and areas of improvement in an online dashboard. Finally, King County now utilizes an Equity Impact Review Tool to incorporate equity considerations into policy, planning, budget, and facility siting plans. See Appendix B for a more detailed, two-page brief summarizing our research on King County. City of Shoreline – Diversity & Inclusion Initiative Guiding Principle/Vision: A community in which people from all backgrounds have equitable access to opportunities to live, work, and play. Three Focus Areas: • Increase capacity of staff to promote service equity and inclusion • Increase access to City information and services by diverse communities • Increase community-based support for diverse communities Our Take-aways: Shoreline is comparable to Bothell and many elements of their diversity and inclusion program appear feasible for our level of resources and experience in DEI work. Shoreline’s formalized DEI program began in 2016 when the City Council created a goal for equity and inclusion. The Council reinforced that goal by passing an ordinance declaring the City’s commitment to building a more equitable community and approving the hiring of a 0.5 FTE Diversity and Inclusion Coordinator in their Community Services department. The city dedicates resources to strengthening community engagement and trust and works to ease access to city services, programs, and resources for all members of their community. Internally, Shoreline staff conducted an all staff survey to gauge the level of comfort and discomfort among staff members with DEI related topics. They also created a Foundation Training Curriculum that all staff are required to take at least once and host monthly lunch n’ learns to foster ongoing learning. Today, all members of Shoreline’s leadership team have a diversity-related goal on their performance assessment and each City department sets DEI related goals, ensuring shared accountability and organizational alignment across the City. See Appendix C for a more detailed, two-page brief summarizing our research on Shoreline. September 15, 2020 Agenda Packet Page 272 of 294 Page 9 of 28 City of Renton – Building an Inclusive City Initiative Guiding Principle/Vision: Building an inclusive informed city with opportunities for all. Four Inclusion Goals: • Improve access to city services, programs and employment • Build connections with ALL communities that reflect the breadth and richness of the diversity in our city • Promote understanding and appreciation of our diversity through celebrations and festivals • Provide critical and relevant information on a timely basis and facilitate two-way dialogue between city government and the community Our Take-aways: Although Renton is a considerably bigger city than Bothell, its program is a model for a DEI Initiative centered on robust community engagement. Their initiative began in 2008 as a Community Liaison program connecting city staff with community members from different ethnic communities. In 2012, the City Council and City leadership made inclusion an organizational priority by adding “Building an inclusive city with opportunity for all” as one of the five goals on the Renton City-wide Business Plan. In service of that goal, the City hired an Equity and Inclusion Consultant in 2014 and transitioned its Community Liaisons Program into the Mayor’s Inclusion Task Force. The Task Force is a group of 30 community members representing more than 10 diverse community groups that the Mayor considers as his main policy advisory group. Renton’s inclusion efforts are heavily focused on relationship building in the community. The City has worked to identify who its cultural leaders are and engage with them where they are, through traveling town hall events at various locations in the community, rather than at city hall. To complement its inclusive community engagement work, the City held mandatory inclusion workshops for staff and facilitates ongoing training and workshops on inclusion and equity. Building on increased organizational capacity around equity and inclusion, the City established its own version of a Racial Equity Lens toolkit to incorporate racial equity consideration into policy and decision-making processes across all departments. Since its introduction, the Racial Equity Lens toolkit has been used to create an HR Tactical Plan aimed at improving diversity in hiring outcomes and to analyze utilization of Minority and Women-owned small businesses in city purchasing and contracting policies. See Appendix D for a more detailed, two-page brief summarizing our research on Renton. City of Bellevue – Bellevue Diversity Advantage Initiative Guiding Principle/Vision: Bellevue welcomes the world. Our diversity is our strength. Three Objectives: • To keep growing as a culturally competent organization • To keep growing as a culturally competent city • To keep growing as a culturally competent economy September 15, 2020 Agenda Packet Page 273 of 294 Page 10 of 28 Our Take-aways: Like the Inclusion Initiative at Renton, the Bellevue Diversity Advantage Initiative is firmly rooted in inclusive, robust community engagement backed by strong support from City leadership. The Bellevue City Council and the City’s Executive Leadership Team added cultural competence as a core competency of the organization and adopted the Bellevue Diversity Advantage Plan in 2014. The plan used the results of an internal assessment of cultural competence in its organization and community input via town hall style public events to identify 60 recommendations for improving diversity, equity, and inclusion at the City across six focus areas. To help operationalize work plans around those recommendations, City leadership dedicated resources for a 9-hour “Cultural Competency Foundations” training for all City staff, along with offering additional trainings in “Implicit Bias Awareness” and “Disrupting and Addressing Historical and Institutional Inequities.” The City’s Diversity Liaisons program, an internal committee similar in structure to our DiveIn Committee, consists of representatives from each department who advocate for diversity and equity work within their departments and focus on adapting organization-wide DEI goals into specific goals that align with their own department’s mission. Since the adoption of the Diversity Advantage Plan, Bellevue has incorporated equity considerations across a wide variety of city programs, including its Human Services Grant program, procurement process, small business support programs, and employee recruitment program. See Appendix E for a more detailed, two-page brief summarizing our research on Bellevue. City of Bothell After completing our research on initiatives at other cities and county governments in the region, it was important for our team to think critically about what specific needs we hoped to address at the City of Bothell. To do so, we solicitated feedback from two groups; city employees via an all-staff online survey and city employees responsible for community-facing programs via a virtual focus group session. The following section summarizes the process we used for each of those efforts and the information we collected. Staff Survey Results Our DiveIn sub-committee created a short survey, administered online through the website Survey Monkey, with the intention of engaging City of Bothell staff members about their individual experiences as employees at the city. The survey was designed to take 10 minutes to complete and focused on questions relating to diversity, equity, and inclusion at the city. In total, 145 City employees responded to the survey. The following is a summary of the high-level themes that emerged from initial review of the results of the survey. •The majority of Staff members indicated that the City has a welcoming workplace culture •Staff think it is valuable to examine and discuss the impacts of race on their work at the City and want more opportunities, training, and resources dedicated to doing so •Many staff indicated interest in education about City demographics and how to better engage more members of the Bothell community in communications, programming, and decision- making September 15, 2020 Agenda Packet Page 274 of 294 Page 11 of 28 • Staff are motivated to prioritize equity and inclusion work, but want more guidance from City Council and City leadership in defining what those terms mean for work in Bothell • Many staff are interested in seeing more focus put on incorporating City demographics into employee recruitment to better attract more diverse applicant pools Staff Focus Group Results Furthering city inclusion through a systematic community engagement strategy emerged as a key theme in several of the DEI Initiatives discussed in our research. To complement what we found in our research, we sought feedback from Bothell city staff who work on community-facing programs to learn more about how we, as a City, currently engage and serve under-represented community members. We convened a focus group of six employees for a one-hour, virtual session. The following is a summary of the high-level themes that emerged from the discussion. • Organization-wide Understanding of Bothell Demographics – Staff who do community outreach know there are pockets of the community they do not engage. Who are these groups and how do we build authentic relationships with them that can be sustained over time? • Request for Strategic Direction, Framework, and Tools – Generally, staff are motivated to do more community engagement but were unclear about whether or not this was a priority for City Council and other City leadership. Staff would appreciate having a framework that aligns engagement efforts across City departments and the communications tools needed to do more of this work. • Reduce Barriers to City Services – Staff could easily identify existing forms of current City service delivery that are not accessible for all members of the community and suggested re-examining these through an Equity Lens. • Bothell Community is Welcoming – Staff identified that different community groups within Bothell are incredibly supportive of one another. Staff were curious about the opportunities here and how to better connect with the leaders of the community groups. Recommendations We learned many specific things that other governments in the region are doing to advance diversity, equity, and inclusion in their communities. We also heard some of what Bothell City staff want to see the City do in pursuit of a more diverse, equitable, and inclusive community. Altogether, we saw five key focus areas emerge as foundational components for a strong and sustainable DEI Initiative in Bothell. Those five focus areas are as follows: 1. Prioritization of diversity, equity, and inclusion from City Council and City Leadership 2. Intentional and inclusive community engagement 3. Comprehensive staff training on topics of diversity, equity, and inclusion 4. Department-specific accountability for DEI work & equity-minded decision making 5. Commitment of long-term staff resources The recommendations we present in the remainder of this report are structured around these five focus areas. September 15, 2020 Agenda Packet Page 275 of 294 Page 12 of 28 #1 - Create a Council Goal Staff recommend the Bothell City Council create a new Council Goal reflecting the City’s commitment to advancing diversity in its workplace, inclusion in its engagement with, and accessibility for, all members of the community, and equity in the outcomes of its policy and decision-making. By setting a DEI-related Council Goal, the City Council communicates to the community and the organization that this is a top priority. We heard the importance of this type of commitment from City Council and Leadership emphasized in the interviews we conducted with staff at other cities and in the feedback received from Bothell City staff. At Bellevue, City Council goals serve as a foundation for organizational commitment to improving equity and inclusion. At Renton, all departments use the priorities stated in the Renton Business Plan to create department-specific workplans that guide the work they do and the metrics by which they judge the success of their work. In fact, all of the DEI initiatives we researched were guided by direction from the decision-making body: •King County Council declared commitment to advancing equity through an ESJI Ordinance •Shoreline City Council created a Council Goal for equity and inclusion •The Renton Mayor, Executive Leadership, and City Council added an inclusion goal to the Renton Business Plan •Bellevue City Council added Cultural Competence as a City goal & adopted the Bellevue Diversity Advantage Plan Once Council sets the goal to guide the organization, staff would then create a work plan with strategic objectives to help guide Department programs while also offering a means to measure progress along the way. In order for the Council to understand what may result from setting a DEI-focused Council Goal, staff have prepared a list components that could fill out a City of Bothell DEI workplan and begin to establish an organizational strategy around implementing that workplan. #2 – Development of a Workplan Our research showed that for a DEI-focused program of work to be both meaningful and sustainable, there must be a strong program foundation – something the City of Bothell is currently lacking. Specifically, staff have grouped various DEI and engagement activities together in three different “building blocks” that can be achieved with different levels of resources. Although City Council may choose to pursue any of the individual activities, staff recommend taking a more holistic and strategic approach. With a strong foundation in place, Council can then build momentum at a pace that matches the level of resources Council is interested in dedicating to these efforts. Building Block #1 – Enhanced Status Quo (Possible w/ current staffing levels, but more staff time dedicated) •Clarify scope and purpose of the DiveIn Committee o Strengthen the roles and responsibility of DiveIn Committee Members •Focus DiveIn Committee efforts on staff education and City process improvement o Gauge organizational cultural competency o Maintain set of DEI educational resources o Prepare Proclamations for City Council September 15, 2020 Agenda Packet Page 276 of 294 Page 13 of 28 o Organize cultural celebrations and educational events with staff •Publish City of Bothell Community Demographics Report •Analyze the demographic makeup of Boards and Commissions in comparison to community demographics •Analyze the demographic makeup of City staff in comparison to community demographics •Continue the communications program, but with: o Minimal focus on engagement, minimal improvements or sophistication of tools o Limited ability to target communications to LEP populations or underrepresented groups •Support Council Engagement with the community o Informal, quarterly sessions co-hosted with community partners Building Block #2 – Research and Development (Possible with an additional .5 FTE) All items listed above, plus: •Clarify vision, scope and purpose of city community engagement program resulting in a finalized strategy document •Begin identifying key community stakeholders including cultural leaders •Develop a Customer Relationship Management strategy to ensure community connections •Develop a Community Engagement 101 and DEI training curriculum for City Council and staff o Create an Engagement and Equity Lens toolkit •Support Departments in developing their own work plans to support the Council DEI Goal o Explore possibility of incorporating DEI goals in performance appraisal process •Make basic improvements to web content and user experience on www.bothellwa.gov •Address compliance issues with Title XI Limited English Proficiency Requirements •Support Council Engagement with the community o Host a Traveling Town Hall 3-4 times a year in various locations in Bothell ADDITIONAL FUNDING FOR TOOLS: •Online Engagement Tool – Council receives more consistent surveys with summarized findings of community input on various City topics •Biannual Community Survey - Council receives reliable, consistent data on community experiences, needs, desires, and areas of success Building Block #3 – Full Implementation (Possible with an additional 1.0 FTE) All items above, plus: •Implement more tenets of community engagement strategy •Implement Community Engagement 101 and DEI training for city staff, including how to use the Equity Lens Toolkit •Institute DEI work plans across departments o Incorporate DEI goals into performance appraisal process •Collect and analyze data to track DEI Progress •Revamp Board and Commission philosophy and process o Increase collaboration and cultivate more decision-making and authority September 15, 2020 Agenda Packet Page 277 of 294 Page 14 of 28 o Establish and work toward goals for demographic representation •Consistently examine which City services would benefit from recurring demographic engagement (police, human services, art, recreation, etc.) o Deliver and facilitate focused meetings, conversations, engagement with community groups and residents •Develop parameters for, and manage, any ad-hoc Advisory Committees or targeted focus groups needed for current issues and concerns •Develop and offer a City Government 101 Curriculum for residents either online or in-person •Refresh www.bothellwa.gov to modernize and recalibrate to most commonly searched information and analytics •Host recurring meetings and scheduled engagement with stakeholders (including non-profits, faith-based groups, demographic groups and community leaders) •Develop and implement a process for Council to receive consistent and widespread community input to support biannual priority setting and budget decision-making •Evaluate and potentially implement more advanced public notice for council agendas o Improve agenda notification and plan for improvements to live-streaming meeting process ADDITIONAL FUNDING FOR TOOLS: •Customer Relationship Management Program – City-wide contact information database that improves ability to engage specific segments of the community based on topics such as neighborhood, demographic, areas of interest, etc. •311/Customer Action Request system – Improves customer service to residents by streamlining resident requests and stakeholder management •Agenda Management Software – Improves ability for residents to access Agenda packets in a timelier and more accessible format Conclusion Bothell is growing and diversifying dramatically. Through our research, we’ve shown a snapshot of what the Bothell community looks like today, identified key components of diversity, equity, and inclusion initiatives at nearby city and county governments, and heard from City of Bothell staff about how they think about, and incorporate, those topics in their work. The City of Bothell has yet to formalize a commitment to its own version of a DEI initiative. To meet the evolving needs of the Bothell community, staff recommend the Bothell City Council create a new Council Goal reflecting the City’s commitment to advancing diversity in its workplace, inclusion in its engagement with, and accessibility for, all members of the community, and equity in the outcomes of its policy and decision-making. Should City Council create a new DEI focused goal, staff recommend Council direct the City Manager to create a workplan to meet that new goal using the foundational components we describe in this report. September 15, 2020 Agenda Packet Page 278 of 294 Page 15 of 28 Appendix Appendix A – City of Bothell Demographics Analysis Over the last forty years, Bothell has grown from a small suburban town of less than 8,000 to a population today of nearly six times that. Across four decades of growth, Bothell’s population has diversified in race and ethnicity, place of birth, income, ability, and a number of other factors. By 2018, an estimated 32% of the 44,994 residents of Bothell identify as people of color, a proportion 4.5 times that of the proportion of residents of color in 1990. According to the Northshore School District’s 2018- 2019 Annual Report, 43.9% of students enrolled during the 2018-2019 school year identified as students of color. There is a great deal of diversity within both Bothell’s Asian and Hispanic/Latino populations. Among the estimated 6,898 residents that identify as Asian, 32.5% are Asian Indian, 29.2% are Chinese, 7.1% are Filipino, 3.9% are Japanese, 10.4% are Korean, 3.3% are Vietnamese, and 13.6% identify with another Asian ethnicity. An estimated 4,072 residents in Bothell identify as Hispanic or Latino. Of those, 73.9% are Mexican, 3.7% are Puerto Rican, 2.9% are Cuban, and 19.5% identify with another Hispanic or Latino ethnicity. September 15, 2020 Agenda Packet Page 279 of 294 Page 16 of 28 Place of Birth The City of Bothell has also seen a significant increase in its percentage of residents who were born outside of the United States. In 2000, 11.6% of Bothell residents, or an estimated 3,345 residents, were born abroad. By 2018, that proportion had nearly doubled, with foreign born residents making up 19.6% of the city’s overall population, while the total number of foreign born residents increased by more than 2.5 times to an estimated total of 8,819. September 15, 2020 Agenda Packet Page 280 of 294 Page 17 of 28 Languages Spoken and Limited English Proficiency (LEP) An estimated 24.3% of all Bothell residents speak a language other than English. Further, 7.6% of all Bothell residents, or an estimated 3,210 people, indicate that they have limited English proficiency (LEP). Title VI of the Civil Rights Act of 1964 requires recipients of Federal financial assistance, which includes the City of Bothell, to take reasonable steps to make their programs, services, and activities accessible by eligible persons with limited English proficiency (LEP). Data from the 2020 decennial Census is expected to provide a clearer picture of which native languages among Bothell’s LEP population, however data referenced in this report from the 2018 American Community Survey (ACS) disaggregates LEP data into four broad language categories. Within Bothell LEP population, 39.1% speak an Asian or Pacific island language, 34.1% speak Spanish, 23.7% speak another Indo-European language, and 3.2% speak another language not included in the first three categories. More specifically, ACS data averaged over the last decade estimates that the six most common native languages spoken among Bothell’s LEP population are Spanish, Chinese (including Mandarin and Cantonese), Korean, Russian, Vietnamese, and Cambodian, Mon-Khmer. The Northshore School District’s most recent demographic data further develops a portrait the of Bothell’s growing linguistic and cultural diversity. According to NSD’s Annual Report from the 2018-2019 school year, 94 different languages are spoken among students. The top six languages spoken among NSD students are English, Chinese, Spanish, Korean, Russian, and Telugu while 8.2% of students are identified as “transitional bilingual.” These top six languages are not necessarily indicative of the native languages spoken by Bothell’s LEP population. Many of the NSD students who do speak a language other than English also speak English proficiently and are not included in the LEP population. September 15, 2020 Agenda Packet Page 281 of 294 Page 18 of 28 Ability Bothell has diversity in abilities across its community. 9.8% of Bothell residents, or an estimated 4,390 individuals, self-reported having one or more disabilities. Of those 4,390 residents, 5.4% are under 18 years old, 50.2% are 18-64 years old, and 44.5% are 65 years and older. Among the total populations of those three age groups themselves, 2.3% residents younger than 18 years old, 7.6% residents 18-64 years old, and 34.3% of residents 65 years or older self-identify as having a disability. Additionally, 14% of NSD students are enrolled in special education services. September 15, 2020 Agenda Packet Page 282 of 294 Page 19 of 28 Income and Asset Ownership Despite having a median annual household income above $100,000, Bothell has significant diversity in household income across its community. 4.5% of Bothell households have incomes less than $25,000 a year and another 10% of households have incomes between $25,000 and $49,000. In addition, an estimated 5.7% of residents surveyed in 2018 had incomes at or below the Federal Poverty Level (FPL) at some point in the 12 month period prior to being surveyed. The Federal Poverty Level income level increases with household size, sitting as low as $12,760 for an individual to $26,200 for a household of 5 and up to $44,120 for a household of 8. In addition, 14.8% of students in the Northshore School District qualify for free or reduced-price lunch. About two thirds of Bothell residents, or 65.72% of the city’s population, live in an owner-occupied household. Across the 34.3% of residents who are renters, 47.2% are classified as rent-burdened, which is defined by the US Department of Housing and Urban Development as owing more than 30% of monthly household income on rent. 5.4% of Bothell residents also do not have a vehicle available for personal use. September 15, 2020 Agenda Packet Page 283 of 294 Page 20 of 28 Notes on Sources The timing of this report is such that the most recent decennial Census data for the City of Bothell is 10 years old and new demographic data from the ongoing 2020 Census is not yet available. We expect to update all data used to estimate current City of Bothell demographics when the US Census Bureau releases its 2020 survey data in the summer of 2021. Until then, the data we referenced for this analysis is taken from the US Census Bureau’s annual American Community Survey (ACS). The American Community Survey collects information from US residents on a yearly basis that is used to help allocate more than $675 billion in federal and state funding each year. Though the ACS collects data for each US census tract and block group each year, statistically valid estimates for small-medium size cities (I.e. cities with a population below 60,000, including Bothell) are obtained by averaging sample data over a five-year period. Therefore, 2018 data for the City of Bothell referenced in this report are from the Census Bureau’s published ACS 2014-2018 5-year Estimate. Given the time lag between today and 2014 and Bothell’s rapid population growth over the past 20 years, the numbers presented in this report likely underestimate today’s true population totals. In addition, ACS population data is estimated using a random sampling process. As a result, all reported figures in this report have a margin of error and should be taken as estimates rather than exact totals. The demographic analysis presented here also references City of Bothell demographics data for the year’s 1990 and 2000. These data are from the results of the 1990 US Decennial Census and the 2000 US Decennial Census respectively. Finally, this report specifically references ACS 5-year estimate and Decennial Census data disaggregated by city on the Puget Sound Regional Council’s website. It also includes Northshore School District data taken from their 2018-2019 Annual Report, as published on the district’s website. September 15, 2020 Agenda Packet Page 284 of 294 County Executive Sims launches the Equity and Social Justice Initiative 2008 ESJ Ordinance approved committing to improve "determinants of equity" 2010 Determinants of Equity Baseline Project measures equity outcomes 2014 Office of Equity and Social Justice established2015 ESJ Strategic Plan 2016- 2022 adopted2016 This is the gold standard and required significant time and resources that we likely cannot dedicate. The theory of change is clearly defined, showing comprehensive understanding of equity issues. Scope is massive but the Strategic Plan breaks it down focusing on both the big and small picture. Making progress by aligning with existing processes like the budget and Dept work plan development. Responsibility and accountability is held by those with the most power: Directors and Managers. Started small and over twelve years slowly reorienting the entire org to be "pro-equity". Our Take-Aways: KING COUNTY EQUITY AND SOCIAL JUSTICE Leadership, operations & services Plans, policies & budgets Workplace & workforce Community partnerships Communication & education Facility & system improvements Six Goal Areas:  Invest upstream and where needs are greatest Invest in community partnerships Invest in employees Through accountable and transparent leadership Four Strategies: "Our end goal is for full and equal access to opportunities, power and resources so all people may achieve their full potential...Being “pro-equity” requires us to dismantle deeply en-trenched systems of privilege and oppression that have led to inequitable decision- making processes and the uneven distribution of benefits and burdens in our communities." Office of ESJ under the County Executive 8 FTEs and a $4,074,000 2019-2020 budget 40 designees on the Inter-branch Team A King County where all people have equitable opportunities to thrive. TIMELINE Page 21 of 28 September 15, 2020 Agenda Packet Page 285 of 294 Council adopted an ESJ Ordinance; All supervisors, managers, and directors have ESJ measures in their PAs and professional development work plans; Include ESJ questions and measures in the annual employee engagement survey; Use the Equity Impact Review Tool in no less than 10 major policy, planning, budget, or facility siting plans; 100% of budget decision-making is backed by an equity analysis and tied to ESJ outcomes, where possible; Review disciplinary policies and review processes for alignment with ESJ values; All managers, supervisors, deputy directors, and directors receive cultural competency training, 360-style assessments, and coaching to incorporate ESJ core competencies; By 2022, the top 20% of the salary range in each department will reflect the County's workforce demographics for 2030; By 2022, departments develop school-to-work pipelines from historically disadvantaged communitites; By 2022, employees earning in the bottom 20% of the salary range have access to active employee development plans that follow King County's career development pathways and participate in quarterly "Stay Interviews" focused on the County's role in employee retention and development; Departments dedicate portion of budget to support community partners and donate non-monetary support to build capacity and skills within the community; Departments report progress and areas for improvement on an online dashboard; and many more based on language access, communication, education, and CIP. A Few Tangibles... KING COUNTY EQUITY AND SOCIAL JUSTICE A King County where all people have equitable opportunities to thrive. Page 22 of 28 September 15, 2020 Agenda Packet Page 286 of 294 Council created goal for equity and inclusion, hired Coordinator 2016 Council ordinance declaring equitable and safe community 2017 Created Foundation Training curriculum; 5 one day sessions for 180 staff 2017 Foundation Training re- fresh for all staff, monthly lunch n' learns 2018 Foundation Training provided for new hires2019 Shoreline is comparable to Bothell and many elements of this program seem feasible for our level of resources and experience in DEI work. Heavy emphasis on foundation building through training and determining where DEI fits in the organization's structure. Outside of 0.5 FTE, significant resources are dedicated to consultants and training and $9k for community engagement. Alignment, ownership, and accountability are set through Depts determining their own DEI goals. Committee members have a deeper DEI role and responsibility within their Departments (8 hr/month). Our Take-Aways: CITY OF SHORELINE DIVERSITY & INCLUSION Increase capacity of staff to promote service equity and inclusion Increase access to City information and services by diverse communities Increase community-based support for diverse communities Three Focus Areas: Committee with 2 reps from each Dept Work groups open to all staff: HR and staff support, Policy, and Community Engagement Departments set and own D&I goals "Organizations tend to think of diversity and inclusion as community-facing work. We can foster relationships outside of our agency but that by itself does not do enough to change internal behaviors." - paraphrased from Suni Tolton, Diversity and Inclusion Coordinator D&I Coordinator in the Community Services Dept 0.5 FTE and a $181,915 2019-2020 budget 18+ members on Committee and Work Groups A community in which people from all backgrounds have equitable access to opportunities to live, work, and play. TIMELINE Page 23 of 28 Becoming an anti-racist, multicultural org: September 15, 2020 Agenda Packet Page 287 of 294 Council adopted an Ordinance focused on inclusion; Hired a 0.5 FTE Diversity and Inclusion Coordinator; All leadership has a diversity-related goal on their PA, either personal or professional; Conducted an all staff survey to gauge level of comfort/discomfort with DEI topics; Includes DEI related questions in a biennial community survey; Each Department sets DEI related goals, ensures accountability and alignment; Manages a Community Bridge Program to help multilingual residents better understand Shoreline's programs and resources and how to access them; Leads Shoreline Social Justice Book Discussion to meet neighbors and build community; Manages and evaluates City programs and services for compliance with Title II and VI. Established an ADA grievance procedure; Working on an ADA transition plan for public facilities; Ensure availability and quality for language translation services; Hosts 'Nurturing Trust' workshops to build community partnerships; Reviewed policies and codes that may create barriers for those experiencing houselessness, part of an affordable housing project team; Created a Foundation Training Curriculum that all staff have taken at least once, some twice; Host specific training for different employee groups - Executive Leadership, Supervisors, and all staff; and Hosts monthly lunch n' learns for continued learning after one-time training. A Few Tangibles... Page 24 of 28 CITY OF SHORELINE DIVERSITY & INCLUSION A community in which people from all backgrounds have equitable access to opportunities to live, work, and play. September 15, 2020 Agenda Packet Page 288 of 294 Inclusion is effectively communicated and understood as an organizational priority through the Business Plan. Extremely focused on relationship building and community engagement to be informed about the community they are serving.   Emphasized establishing who cultural leaders in the city are and going to them Mayor is personally invested in inclusion and uses the Inclusion Task Force as his policy advisory group, an example of meaningful engagement. The Racial Equity Lens is simple yet impactful and could easily be applied to Bothell. Now that the program has matured they are transitioning work from the consultant to appropriate staff, focused on action and sustainability. Our Take-Aways: CITY OF RENTON INCLUSION Improve access to city services, programs and employment Build connections with ALL communities that reflect the breadth and richness of the diversity in our city Promote understanding and appreciation of our diversity through celebrations and festivals Provide critical and relevant information on a timely basis and facilitate two-way dialogue between city government and the community Four key inclusion goals: "We want action and we want it to be sustainable." - Benita Horn, Equity & Inclusion Consultant Inclusion & Equity Consultant in the Executive Dept ~70K/yr consultant fee  30 community liaisons from 10+ diverse community groups Building an inclusive informed city with opportunities for all. TIMELINE Page 25 of 28 Revised business plan,  transitioning projects from consultant to various staff 2020 Established Community Liaisons to connect city and community 2008 Inclusion Goal added to City Business Plan2012 Hired consultant, held mandatory Inclusion Workshops with city staff 2014 Mayor issued a proclamation declaring Renton an inclusive city 2017 Established the Renton African American Pastoral Group (RAAP) 2015 Built Racial Equity Lens, Community Liaisons form the Mayor's Inclusion Taskforce 2014 September 15, 2020 Agenda Packet Page 289 of 294 Council and Administrators co-create the Renton Business Plan and continually expand the "Building an inclusive city with opportunity for all" goal; Created a network of community liaisons representing various minority, cultural, and ethnic community groups, Americorps member helped assemble community contacts; Community Liaison program transitioned in the Mayor's Inclusion Taskforce including 30 individuals representing cultural groups in the city, Mayor considers this his main policy advisory group; Hired an Equity and Inclusion Consultant who works onsite; Conducted internal & external inclusion assessment to identify strengths & areas for improvement; Facilitating ongoing training and workshops on inclusion and equity, and built capacity within the city to co-facilitate the workshops through a “trainthetrainer” curriculum; Established a Renton Racial Equity Lens to filter city policy and decision making through; Used Racial Equity Lens to analyzed NeoGov hiring data to identify ways to improve diversity in hiring outcomes, resulted in HR Tactical Plan; Used Racial Equity Lens to analyze utilization of Minority and Women-owned and Disadvantaged Small Businesses in Purchasing and Contracting policies and procedures, resulting in process for these businesses to identify as such on licenses and vendor forms, among other tactics to improve utilization; Partnered with Renton School District to create a summit of local student leaders to discuss relationship with law enforcement; Formed regional group for staff working on DEI "Governing for Racial Equity and Inclusion" Established Renton African American Pastoral Group (RAAP) to connect the Mayor's office, community black faith leaders, and the Renton Police Department; Provided key information to the community by targeting ethnic media – newspapers, radio stations, and the local Hispanic TV station; Established an annual community Career Fair geared to be fully accessible (language, culture ability) A Few Tangibles... Page 26 of 28 CITY OF RENTON - INCLUSION Building an inclusive informed city with opportunities for all. September 15, 2020 Agenda Packet Page 290 of 294 Systematic  community engagement must be a core component - how can you serve a community you don't know? Initiative based on an internal assessment of organizational cultural competence and community input via town hall style public events City Council and leadership declaring this work a priority is crucial Bellevue expects diversity committee members to 'already be at the table', and be able to influence change within their Department. Moves ADA and Title VI beyond compliance and into accessibility. An incredibly empowered team with a strong foundational analysis is why they are doing and leading this work and for who. Our Take-Aways: CITY OF BELLEVUE DIVERSITY ADVANTAGE 60 recommendations in 6 areas "City Council goals have been a backstop to keep organizational pressure on improving equity and inclusion." - Paraphrased from Elaine Acacio, Diversity and Inclusion Administrator Diversity Advantage Team within City Manager's Office 3 FTEs Diversity Advisory Network made up of 19 community members Bellevue welcomes the world. Our diversity is our strength. Page 27 of 28 TIMELINE Staff interviewed community leaders about how to better engage 2011 Interview data & research presented to City Leadership 2012 2013 City Council adopts the Diversity Advantage Plan 2014 Cultural competence training provided for City Leadership Team Formed Diversity Advantage Team with 3 FTEs 2013 To keep growing as a culturally competent organization: Enact and uphold equitable policies and practices Train and hire culturally competent staff Provide programs that are responsive and accessible to all To keep growing as a culturally competent city: Provide safe and welcoming living and working environments Collectively correct systemic inequities Respectfully engage cross-culturally in community life Express diversity through arts and culture To keep growing as a culturally competent economy: Attract a diverse workforce to live here and work in local businesses Empower diverse entrepreneurs to start and grow businesses Provide services that facilitate and support small business growth Make available culturally-specific goods and services Objectives: Cultural Competence Human Services Public Safety Education Economic Development Civic Engagement Diversity Advantage Plan: September 15, 2020 Agenda Packet Page 291 of 294 Obtained City Council and ELT support for adding cultural competence as a core competency of the organization; Diversity Advantage Team includes 3 FTEs: a Diversity and Inclusion Administrator, ADA/Title VI Civil Rights Administrator and Diversity Outreach and Engagement Administrator; Convenes a Diversity Advisory Network made up of 19 community members, appointed by the City Manager, who provide advice on ways to improve the city’s ability to communicate, collaborate and better serve Bellevue’s diverse population; Created Diversity Liaisons program which functions like our DiveIn Committee and is selected by leadership and peers to provide support for diversity and equity work - focused on translating organizational goals into adaptive, department specific goals; ADA Administrator developed and facilitated training on translation & interpretation services; Help organize annual Welcoming Week, an annual joint event called between Eastside cities to provide programming for immigrant and refugee residents; Utilize internal data dashboards to help the city tell stories about DEI progress; Dedicated resources for a 9-hour “Cultural Competency Foundations” training for all city staff; "Implicit Bias Awareness" and "“Disrupting and Addressing Historical and Institutional Inequities” trainings also offered for staff; Designed and implemented Diversity Talent Hiring Initiative, includes creation of “Hiring for Equity: A recruitment guide for hiring managers”, a Supported Employment program which provides employment opportunities for people living with disabilities, and Employee Resource Groups (ERGs) [Affinity Groups]; Procurement Diversity Inclusion (PDI) Plan in an ongoing effort to maximize equity and opportunity in the procurement process to small businesses; Bellevue Essentials is a nine-week program designed to provide participants with information about the structure and inner workings of local government A Few Tangibles... Page 28 of 28 CITY OF BELLEVUE DIVERSITY ADVANTAGE Bellevue welcomes the world. Our diversity is our strength. September 15, 2020 Agenda Packet Page 292 of 294 RESOLUTION NO. _____ (2020) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BOTHELL, WASHINGTON REAFFIRMING ITS COMMITMENT TO BE A SAFE, WELCOMING AND EQUITABLE COMMUNITY FOR ALL AND DENOUNCING HATRED, INTOLERANCE, AND DISCRIMINATION WHEREAS, on February 7, 2017, the Bothell City Council adopted Resolution No. 1358 reaffirming its commitment to be a safe, welcoming, and equitable community for all and thereby resolved that the City Council is committed to standing together with the people of Bothell in opposing hate, violence, and acts of intolerance committed against our community members ; and, WHEREAS, the City Council is committed to continuing our pro-equity work, reaching out and connecting with our community members to ensure that our programs are accessible and open to all individuals; and, WHEREAS, recent national events involving police brutality have further exposed the deeper issue of institutional and systemic racism, which is an undeniable part of this nation’s history and continues to plague our country despite pleas for change; and, WHEREAS, institutional and systemic racism results in inequitable outcomes for Black, Indigenous, and people of color, and other marginalized communities including LGBTQ+ individuals, immigrants, and those with disabilities . Such unjust treatments and biases occur in many areas of society, a few being: the criminal justice system, health care, education, government services, housing, and other economic opportunities ; and WHEREAS, a most basic form of injustice and inequity occurs when a group of people’s fundamental rights to safety and well-being are placed into jeopardy by the very institutions entrusted with protecting and serving them; and WHEREAS, as public officials, it is the City Council’s duty to use its legal and moral authority to protect all members of the Bothell community to foster a community free of fear, intimidation and violence. While free speech is protected under the First Amendment, the Bothell City Council can speak out against and discourage hate speech as contrary to our values; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BOTHELL WILL SPEAK OUT AGAINST AND DISCOURAGE HATE SPEECH, DOES NOT TOLERATE DISCRIMINATION, RACIAL INJUSTICE, OR POLICE BRUTALITY AND DOES RESOLVE AS FOLLOWS: Section 1. The City Council acknowledges the history of institutional racism and biases that exist in America and denounces systemic racism. Att-2 September 15, 2020 Agenda Packet Page 293 of 294 Section 2. The City Council commits to creating a new Council Goal reflecting the City’s commitment to advancing diversity in its workplace, inclusion in its engagement with, and accessibility for, all members of the community, and equity in the outcomes of its policy and decision making. Section 3. The City Council recognizes and respects the value of relationships with our community, acknowledges that connecting with underrepresented communities within Bothell requires more attention and resources and reaffirms its commitment to building positive and productive relationships based on mutual respect, listening and learning. Section 4. The City Council celebrates the diversity of its workforce and encourages efforts to expand employee diversity and provide adequate funding for bias training and policy improvements to best support and serve our employees and community. Section 5. The City Council invites and encourages the community to work together through peaceful exchange and meaningful dialogue to enact change and move forward to achieve a just, equitable and inclusive community for all. Passed this 15th day of September 2020. APPROVED: LIAM OLSEN MAYOR ATTEST/AUTHENTICATED: LAURA HATHAWAY CITY CLERK FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: RESOLUTION NO.: (2020) September 15, 2020 Agenda Packet Page 294 of 294 •September through November is Salmon SEEson Visit North Creek to look for spawning salmon Sign up as a volunteer citizen scientist to help UW Bothell collect information about local salmon at bothellwa.gov/salmonSEEson •Natural Yard Care Online Workshops First one is Sept 30th, 7 –8:30pm “Design a Healthy Yard” bothellwa.gov/nycworkshops Upcoming Public Engagement Opportunities Page 1 of 1 Visitor Comments received for the September 15, 2020 Virtual Council Meeting: Visitor Comment – Written: 1. Julie Rodwell – submitted written comments regarding Lot D questions submitted by Boulevard Place which was forwarded to Council 2. Jenne Alderks - submitted a letter from ARC:Bothell which was forwarded to Council 3. Han Tran – also submitted the same letter from ARC:Bothell which was forwarded to Council Visitor Comment – LIVE: 4. Angela Maeda – requested to speak live regarding AB 20-120 5. Cameron Chapman – requested to speak live regarding AB 20-120 6. Hannah Mendro – requested to speak live regarding AB 20-120 7. Sarah Gustafson – requested to speak live regarding AB 20-120 8. Alma Eyre – requested to speak live regarding AB 20-120