The Basic Financial Statements
Statement of Net Position
Governments report proprietary fund assets, liabilities, and net position in a Statement of Net Position. Proprietary fund statements draw a distinction between major and non-major proprietary funds. Bothell is unique in that it did not have any non-major proprietary funds. There are only three funds – Water, Sewer, and Storm and Surface Water.
Total assets in Water ($25.9 million), Sewer ($23.5 million), and Storm and Surface Water ($42.2 million) add up to the total assets reported under business-type activities ($91.5 million). Again, the difference between the government-wide statement of Net Position and the proprietary fund Statement of Net Position is the detailed reporting of assets, liabilities, revenues, and expenses by fund type – Water, Sewer, and Storm and Surface Water.
The proprietary fund Statement of Net Position reports current assets ($26.3 million) separately from non-current assets ($65.2 million). Governments are not required to report current assets separately from their non-current assets in the government-wide statements, but that breakdown is required in the proprietary fund statements.
Like most local governments, revenue bonds make up a large proportion of liabilities ($13.5 million). A large proportion of the city’s proprietary fund liabilities are in the Storm and Street Water fund ($10.9 million).
Like the government-wide Statement of Net Position, the proprietary fund Statement of Net Position classifies the position as either Net Investment in Capital Assets, Restricted Net Position, or Unrestricted Net Position.
- Net Investment in Capital Assets in the historical cost of
capital improvements – net of depreciation – and debt associated with
the acquisition, construction, or improvement of capital In the Water
Fund, net investment in capital assets is equal to $16,634,885 – i.e.,
Capital Assets not being depreciated plus capital assets being
depreciated minus depreciation ($19,670,033) minus the current portion
of revenue bonds payable, net ($183,345) minus non-current revenue bonds
payable ($2,851,803).
- The restricted net position represents assets restricted by
a third party or law. Governments are frequently required to establish
restricted reserve funds following a revenue bond issue to ensure
payments occur on time and in full. Revenue bond reserve funds are often
the lesser of (a) maximum annual debt service, (b) 125 percent of
average annual debt service, or (c) 10 percent of original bond
proceeds.
- The remainder is reported as the unrestricted net position. Each business-type activity reports a positive unrestricted net position.
| CITY OF BOTHELL | |||||
|---|---|---|---|---|---|
| STATEMENT OF NET POSITION PROPRIETARY FUNDS, DECEMBER 31, 2021 |
|||||
| Business-Type Activities, Enterprise Funds | Governmental Activities | ||||
| Water | Sewer | Storm & Surface Water | Total | Internal Service Funds | |
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | $303,342 | $744,901 | $2,049,875 | $3,098,118 | $2,390,973 |
| Investments | $4,190,215 | $6,307,503 | $8,464,320 | $18,962,038 | $2,300,000 |
| Accounts receivable | $859,474 | $1,817,087 | – | $2,676,561 | $53,396 |
| Due from other governments | $357 | $56,256 | $211,575 | $268,188 | $5,522 |
| Reserved assets | |||||
| Deposit held in trust | – | – | – | – | $277,395 |
| Investment-revenue bond reserve | $109,785 | $292,497 | $914,086 | $1,316,369 | – |
| Total current assets | $5,463,173 | $9,218,244 | $11,639,857 | $26,321,274 | $5,027,286 |
| Non-current assets | |||||
| Net pension assets | $724,367 | $547,655 | $1,303,964 | $2,575,986 | $38,766 |
| Capital assets not being depreciated | |||||
| Land | $122,175 | $163,126 | – | $285,302 | – |
| Right of way | – | – | 1,935,868 | $1,935,868 | – |
| Construction in progress | $405,339 | $997,494 | $1,757,076 | $3,159,909 | – |
| Capital assets being depreciated | |||||
| Intangible assets | $141,538 | $122,978 | $146,663 | $411,179 | – |
| Buildings | $2,729,301 | $3,513,086 | $2,304,125 | $8,546,512 | $35,285 |
| Improvements other than buildings | $29,514,840 | $17,760,228 | $36,850,875 | $84,125,944 | $1,042,450 |
| Equipment | $59,048 | $1,806,274 | $275,951 | $2,141,273 | $1,829,336 |
| Vehicles | $30,457 | $30,457 | $250,920 | $311,834 | 9,562,936 |
| Less accumulated depreciation | ($13,332,666) | ($10,711,077) | ($14,284,192) | ($38,327,935) | ($8,960,868) |
| Total non-current assets | $20,394,400 | $14,230,221 | $30,541,250 | $65,165,871 | $4,047,905 |
| Total assets | $25,857,573 | $23,448,464 | $42,181,107 | $91,487,144 | $9,075,191 |
| DEFERRED OUTFLOWS OF RESOURCES | |||||
| Deferred outflows-pension | $80,511 | $64,930 | $152,126 | $297,567 | $55,324 |
| Total deferred outflows of resources | $80,511 | $64,930 | $152,126 | $297,567 | $55,324 |
| LIABILITIES | |||||
| Current liabilities | |||||
| Accounts payable | $355,435 | $28,875 | $174,040 | $558,349 | $59,031 |
| Payroll payable | $66,558 | $51,260 | $119,130 | $236,948 | $43,504 |
| Compensated absences | $87,001 | $86,807 | $111,987 | $285,795 | $42,112 |
| Due to other governments | $1,166 | – | $593 | $1,759 | $39,488 |
| Interest payable | – | – | – | – | $144,831 |
| Current portion of loans payable | – | – | $45,516 | $45,516 | – |
| Current portion of revenue bonds payable, net | $183,345 | $86,047 | $608,890 | $878,281 | – |
| Total current liabilites | $693,504 | $252,988 | $1,060,157 | $2,006,648 | $328,966 |
| Non-current liabilities | |||||
| Loans payable | – | $56,250 | $455,497 | $511,747 | – |
| Revenue bonds payable, net | $2,851,803 | $1,276,047 | $9,400,707 | $13,528,557 | – |
| Unearned revenue | – | – | – | – | $277,395 |
| Total non-current liabilities | $2,851,803 | $1,332,297 | $9,856,204 | $14,040,304 | $277,395 |
| Total liabilities | $3,545,307 | $1,585,285 | $10,916,361 | $16,046,952 | $606,361 |
| DEFERRED INFLOWS OF RESOURCES$606,361 | |||||
| Deferred inflows – advance grant | – | – | $12,909 | $12,909 | – |
| Deferred inflow – pension | $678,978 | $515,295 | $1,223,171 | $2,417,444 | $502,186 |
| Total deferred inflows of resources | $678,978 | $515,295 | $$1,236,080 | $2,430,353 | $502,186 |
| NET POSITION | |||||
| Net investment in capital assets | $16,634,885 | $12,264,222 | $18,726,676 | $47,635,783 | $3,509,139 |
| Restricted for pension assets | $125,900 | $97,290 | $220,010 | $443,200 | $91,904 |
| Restricted for debt service | $109,785 | 292,497 | $914,086 | $1,316,369 | – |
| Unrestricted | $4,843,229 | $8,758,806 | $10,320,020 | $23,922,054 | $4,420,925 |
| Total net position | $21,713,799 | $21,412,814 | $30,180,793 | $73,307,406 | $8,021,968 |
Internal service funds are reported in the proprietary fund statements. They account for programs in government that serve other parts of the government. The city of Bothell has three internal service funds – Equipment Rental (Fleet), Self-Insurance, and Asset Replacement. Internal service funds are designed to be self-supporting. They bill the receiving department at rates intended to cover the costs of goods or services provided. Keep in mind that these funds are not reported in government-wide statements, as internal service accounts are canceled once we aggregate governmental activities with proprietary activities.