Washington State Auditor’s Office
Financial Statements Audit Report
Soos Creek Water and Sewer District
King County
Audit Period
January 1, 2007 through December 31, 2007
Report No. 1000341
Issue Date
December 29, 2008
Washington State Auditor
Brian Sonntag
December 29, 2008
Board of Commissioners
Soos Creek Water and Sewer District
Renton, Washington
Report on Financial Statements
Please find attached our report on the Soos Creek Water and Sewer District’s financial statements.
We are issuing this report in order to provide information on the District’s financial condition.
In addition to this work, we look at other areas of our audit client’s operations for compliance with state
laws and regulations. The results of that audit will be included in a separately issued accountability
report.
Sincerely,
BRIAN SONNTAG, CGFM
STATE AUDITOR
Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (360) 902-0370 TDD Relay (800) 833-6388
FAX (360) 753-0646 http://www.sao.wa.gov
Table of Contents
Soos Creek Water and Sewer District
King County
January 1, 2007 through December 31, 2007
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance
and Other Matters in Accordance with Government Auditing Standards ........................................ 1
Independent Auditor’s Report on Financial Statements ............................................................................... 3
Financial Section ........................................................................................................................................... 5
Independent Auditor’s Report on Internal
Control over Financial Reporting and on
Compliance and Other Matters in Accordance
with Government Auditing Standards
Soos Creek Water and Sewer District
King County
January 1, 2007 through December 31, 2007
Board of Commissioners
Soos Creek Water and Sewer District
Renton, Washington
We have audited the basic financial statements of the Soos Creek Water and Sewer District, King
County, Washington, as of and for the year ended December 31, 2007, and have issued our report
thereon dated November 7, 2008. The prior year partial comparative information has been derived from
the District’s 2006 basic financial statements that we issued our report thereon dated October 15, 2007.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to the financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered the District’s internal control over financial reporting
as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
District’s internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control
deficiencies, that adversely affects the District's ability to initiate, authorize, record, process or report
financial data reliably in accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the District's financial statements that is more than
inconsequential will not be prevented or detected by the District's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the entity’s internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal
control over financial reporting that we consider to be material weaknesses, as defined above.
_________________________________________________________________________________________________________
Washington State Auditor's Office
1
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the District’s financial statements are free of
material misstatement, we performed tests of the District’s compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit, and accordingly, we do not express such an
opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
This report is intended for the information and use of management and the Board of Commissioners.
However, this report is a matter of public record and its distribution is not limited. It also serves to
disseminate information to the public as a reporting tool to help citizens assess government operations.
BRIAN SONNTAG, CGFM
STATE AUDITOR
November 7, 2008
_________________________________________________________________________________________________________
Washington State Auditor's Office
2
Independent Auditor’s Report on Financial
Statements
Soos Creek Water and Sewer District
King County
January 1, 2007 through December 31, 2007
Board of Commissioners
Soos Creek Water and Sewer District
Renton, Washington
We have audited the accompanying basic financial statements of the Soos Creek Water and Sewer
District, King County, Washington, as of and for the year ended December 31, 2007, as listed on page 5.
These financial statements are the responsibility of the District’s management. Our responsibility is to
express an opinion on these financial statements based on our audit. The prior year partial comparative
information has been derived from the District’s 2006 financial statements and, in our report dated
October 15, 2007, we expressed an unqualified opinion on the basic financial statements.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Soos Creek Water and Sewer District, as of December 31, 2007, and the changes
in financial position and, where applicable, cash flows thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
The financial statements include partial prior year comparative information. Such information does not
include all of the information required for a presentation in conformity with accounting principles generally
accepted in the United States of America. Accordingly, such information should be read in conjunction
with the District’s financial statements for the year ended December 31, 2006, from which such partial
information was derived.
In accordance with Government Auditing Standards, we have also issued our report on our consideration
of the District’s internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal control over financial reporting
or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.
The management’s discussion and analysis on pages 6 through 10 is not a required part of the basic
financial statements but is supplementary information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of
_________________________________________________________________________________________________________
Washington State Auditor's Office
3
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
BRIAN SONNTAG, CGFM
STATE AUDITOR
November 7, 2008
_________________________________________________________________________________________________________
Washington State Auditor's Office
4
Financial Section
Soos Creek Water and Sewer District
King County
January 1, 2007 through December 31, 2007
REQUIRED SUPPLEMENTAL INFORMATION
Management Discussion and Analysis – 2007
BASIC FINANCIAL STATEMENTS
Balance Sheets – 2007
Statements of Revenues, Expenses and Changes in Net Assets – 2007
Statements of Cash Flows – 2007
Notes to Financial Statements – 2007
_________________________________________________________________________________________________________
Washington State Auditor's Office
5
SOOS CREEK WATER AND SEWER DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
INTRODUCTION
The following Management Discussion and Analysis is an introduction to the Soos Creek Water and Sewer District
(the District) financial statements and the notes to the financial statements. The District is a Special Purpose
District organized under the laws of the State of Washington, Revised Code of Washington, Title 57, to provide water
and sewer services to specific areas in southeast King County, Washington. The District is not a segment or
component of any other local government. The District reports its activities as an enterprise fund, which presents
financial statements in a style similar to a private -sector business. The District is not legally required to formally
adopt a budget; however, the District does so as a tool for monitoring and controlling revenues and expenses.
The Balance Sheet presents information on all the District’s assets and liabilities, with the difference between the
two reported as Net Assets. Over time, changes in Net Assets can serve as an indicator of whether t he financial
position of the District is improving or deteriorating.
The Statement of Revenues, Expenses, and Changes in Net Assets, like a traditional income statement, show s the
impact of revenues and expenses on the most recent fiscal year. Except for interest and penalties on ULID
assessments (See Note 1), c hanges to net assets are reported as the underlying event occurs, regardle ss of the
timing of related cash flows.
The Statement of Cash Flows presents cash flow f rom operations, from capital and re lated financing activities, and
from investing activities.
COMPARATIVE FINANCIAL INFORMATION
Increase %
2007 2006 (Decrease) Change
Assets
Current assets $ 23,062,720. $ 22,072,482. $ 990,238. 4.5%
Restricted assets 19,832,746. 17,256,352. 2,576,394. 14.9%
Non-current assets
Contract receivable and deferred assets 1,692,663. 2,131,985. (439,322.) -20.6%
Capital assets and construction
in progress (net of depreciation) 155,751,207. 147,842,551. 7,908,656. 5.3%
Total Assets 200,339,336. 189,303,370. 11,035,966. 5.8%
Current liabilities 3,926,309. 3,694,006. 232,303. 6.3%
Liabilities on Restricted Assets 1,955,666. 1,914,633. 41,033. 2.1%
Long term liabilities 9,109,552. 11,579,804. (2,470,252.) -21.3%
Total Liabilities 14,991,527. 17,188,443. (2,196,916.) -12.8%
Net assets:
Invested in capital assets,
net of related debt 144,872,523. 134,874,400. 9,998,123. 7.4%
Restricted 20,519,100. 17,999,260. 2,519,840. 14.0%
Unrestricted 19,956,187. 19,241,267. 714,920. 3.7%
Total Net Assets $ 185,347,810. $ 172,114,927. $ 13,232,883. 7.7%
_________________________________________________________________________________________________________
Washington State Auditor's Office
6
SOOS CREEK WATER AND SEWER DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
COMPARATIVE FINANCIAL INFORMATION (Continued)
Increase %
2007 2006 (Decrease) Change
Operating Revenues:
Sewer $ 18,011,400. $ 16,634,413. $ 1,376,987. 8.3%
Water 6,764,536. 6,913,668. (149,132) -2.2%
Other 2,033,383. 2,078,584. (45,201) -2.2%
Non-operating Revenues 1,213,054. 1,623,633. (410,579) -25.3%
Total Revenues 28,022,373. 27,250,298. 772,075. 2.8%
Operating Expenses 26,925,788. 25,399,157. 1,526,631. 6.0%
Non-operating Expenses 569,990. 665,345. (95,354.) -14.3%
Total Expenses 27,495,778. 26,064,501. 1,431,277. 5.5%
Income Before Contributions
and Extraordinary Item 526,595. 1,185,797. (659,202) -55.6%
Capital Contributions 12,335,063. 8,944,224. 3,390,839. 37.9%
Extraordinary Income 371,225. 0. 371,225.
Change in Net Assets 13,232,883. 10,130,021. 3,102,862. 30.6%
Net Assets, Jan. 1 172,114,927. 161,984,906. 10,130,021.
Net Assets, Dec. 31 $ 185,347,810. $ 172,114,927. $ 13,232,883. 7.7%
FINANCIAL POSITION AND RESULTS OF OPERATIONS
The District posted a small operating loss of $116,469 in 2007, only the second operating loss in the past fourteen
years. Growth in sewer and water connections, however, helped keep the District on sound financial footing. At
yearend 2007 the District served 33,624 sewer equivalent residential units (ERUs) and 21,784 water ERUs , an
increase of 781 sewer and 255 water ERUs during 2007.
Financial highlights for 2007 include:
Ø At the end of the year the assets of the District exceeded liabilities by $ 185,347,810. Of this amount
$144,872,523 was invested in capital assets (net of related debt) , $19,956,187 was unrestricted assets and
available for meeting the District’s ongoing obligations , and $20,519,100 was restricted assets. The
restricted asset amount was compos ed of $18,110,933 set aside for capital project s related to District
growth and $2,408,167 reserved for bond payments.
Ø The District’s total net assets increased $13,232,883. Contributions from developers , called Contributions in
Aid of Construction, were the biggest component of this increase. Developers installed $ 9,367,450 of water
and sewer infrastructure. These capital contributions are water and sewer lines and associated
appurtenances that are constructed by private developers , according to the Dist rict’s strict construction
standards, and upon project completion are donated to the District. The District then maintain s these water
and sewer lines in perpetuity. An additional $2,967,613 in system connection fees was collected. District
income before contributions and extraordinary income contributed $526,595 and $371,225 respectively to
the increase in net assets.
_________________________________________________________________________________________________________
Washington State Auditor's Office
7
SOOS CREEK WATER AND SEWER DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FINANCIAL POSITION AND RESULTS OF OPERATIONS (Continued)
Ø District liabilities decreased by $2,196,916. This decrease is chiefly the result of paying down long term
debt.
Ø Total District revenues increased $772,075 over the prior year . The $1,376,987 increase in sewer revenue
was created primarily by a 9% increase in the King County rate for sewage treatment . Water revenue
decreased $149,132, the result of a 4% decrease in the quantity of water sold partially offset by a 3%
increase (average) in water rates. The $410,576 decrease in Non-operating revenue was the result of an
unrealized loss on investments of $737,222 (See Note 16) offset by a $341,469 increase in interest revenue
and a reduction in gain on the sale of surplus property.
Ø The District recorded a $1,526,631 year-over-year increase in operating expen ses. The key component s of
this increase were a $1,198,511 increase in sewage treatment charges paid to King County and a $224,323
increase in depreciation charges.
Ø The $95,354 decrease in non-operating expenses was composed of a $66,642 scheduled reduction in
interest payments on long term debt and a $28,713 drop in charges relat ed to abandoned infrastructure.
CAPITAL ASSETS AND LONG-TERM DEBT
Capital Assets
The District’s total capital asset s at yearend 200 7, including work in pro gress, exceeded $155.7 million (net of
accumulated depreciation). This total includes land, sew er collection and transmission mains and lines, water
transmission and distribution mains and lines, buildings, sewer and water pump stations, and construction work in
progress on the sewer and water systems. Significant capital asset activity during the y ear included:
Ø The District added $8,342,739 (net) in sewer infrastructure. Of this total, $7,960,829 represented 33
completed developments that connected to the District’s sewer system. Major sewer construction projects
completed by the District in 2007 included the Lift Station 5B Third Pump for $29,810.
Ø The District added $3,036,683 (net) in water infrastructure. Of this total, $ 1,612,892 represented 11
completed developments that connected to the District’s water system. Major water construction pro jects
completed by the District in 2007 included SE 168th AC Replacement for $700,623 and Cascade Hills AC
Replacement for $514,846.
Ø The District constantly works to improve its sewer and water systems through the comprehensive planning
process and through the installation of automated system monitoring equipment. To this end, $ 67,590 in
related projects was completed in 2007.
Ø At yearend 2007, work in progress totaled $2,499,535. Of this total, $225,312 was for sewer system
projects and $2,274,223 was water system projects.
_________________________________________________________________________________________________________
Washington State Auditor's Office
8
SOOS CREEK WATER AND SEWER DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
CAPITAL ASSETS AND LONG-TERM DEBT (Continued)
Capital Assets
Work in progress at yearend included:
Expended Required
Project through Future
Authorization Dec. 31, 2007 Committed Financing
Lake Desire Main Replacement $ 2,049,350. $ 103,176. $ 1,946,174. None
Lift Station 11 Replacement 1,740,000. 504. 1,739,496. None
Pump Station 2 Replacement 1,603,000. 186,376. 1,416,624. None
Westview Terrace Main Replacement 1,390,000. 1,092,684. 297,316. None
Lake Desire Sewer 951,550. 60,566. 890,984. None
Pump Station 2 Pipe Upgrade 641,440. 588,112. 53,328. None
Tank 5 Recoating 545,000. 33,445. 511,555. None
187th Ave Main Replacement 263,750. 22,074. 241,676. None
Lift Station 10 Removal 195,000. 19,679. 175,321. None
Office Fence Replacement 172,203. 172,203. 0. None
Various Projects under $100,000 374,127. 220,716. 153,411. None
$ 9,925,420. $ 2,499,535. $ 7,425,885.
Long-term Debt
At yearend 2007, the District’s long-term debt , including current portion, stood at $11,469,348, composed of
$6,550,294 in revenue bonds (net of bond premium and discount) and $4,919,054 in loans from the Washington
State Public Works Trust Fund . These borrowed funds were used to complete projects that expanded, upgraded,
and replaced sewer and water infrastructure. During 2007 long-term debt was reduced $2,371,790 through the
scheduled repayment of principal on existing outstanding debt. No new borrowing oc curred in 2007 and the District
has no immediate plans for additional borrowing. The District is obligated to pay a total of $11,861,277 in principal
and interest from 2008 through 2121.
Annual Debt Service
3,000,000
2,500,000
Expenditure ($)
2,000,000
1,500,000
1,000,000
500,000
-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Year
_________________________________________________________________________________________________________
Washington State Auditor's Office
9
SOOS CREEK WATER AND SEWER DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
ECONOMIC CONDITION AND OUTLOOK
The District is in sound financial condition. At yearend 2007, the District’s current assets exceeded its current
liabilities by $19.1 million. The District’s bond holders are protected by a reserve fund equal to one year’s principal
and interest payments. That said, however, recent activity indicates a slow down in the growth of new connections to
the sewer and water systems. Sewer and water availability applications – a leading indicator of growth – began
slowing in the fourth quarter of 2007. Through the first quarter of 2008 availability applications were down 40% from
the same period in 2007.
The District’s ongoing capital improvement plan calls for the expenditure of $7.4 million through 2011. It is the
District’s intent to fund these capital expenditures through a combination of sewer and water system connection fees
and assets currently on hand.
_________________________________________________________________________________________________________
Washington State Auditor's Office
10
SOOS CREEK WATER AND SEWER DISTRICT
BALANCE SHEETS
December 31, 2007 and 2006
2007 2006
ASSETS
CURRENT ASSETS
Cash - Note 3, Note 16
Cash on hand $ 3,100. $ 2,800.
Maintenance fund 18,264,066. 17,629,386.
Travel fund 10,000. 10,000.
Revolving working fund 22,500. 22,500.
Medical benefits fund 30,821. 0.
Cafeteria plan 2,000. 2,000.
Accounts receivable - Note 1 4,074,294. 3,733,694.
Inventories - Note 1 226,208. 206,995.
Prepaid expenses 142,252. 142,301.
Accounts receivable - developers 189,501. 214,207.
Current portion of contractual obligation
receivable - Note 18 31,542. 31,542.
Accrued interest receivable - Maintenance fund 66,435. 77,058.
Restricted Assets - Note 2, Note 16
Capital Improvement fund cash 17,342,252. 14,227,950.
Revenue Bond fund cash 356,597. 877,330.
Revenue Bond fund investments 2,028,903. 2,041,323.
Accrued interest receivable:
Repair and Replacement fund 82,327. 82,314.
Revenue Bond fund 22,667. 27,436.
TOTAL CURRENT ASSETS 42,895,466. 39,328,834.
LONG TERM ASSETS, net of current portion
Contractual obligation receivable - Note 18 410,040. 441,581.
The accompanying notes are an integral part of this financial statement.
_________________________________________________________________________________________________________
Washington State Auditor's Office
11
SOOS CREEK WATER AND SEWER DISTRICT
BALANCE SHEETS
December 31, 2007 and 2006
2007 2006
UTILITY PLANT - Notes 1 & 4
Capital assets not being depreciated
Land 698,614. 698,614.
Construction Work in Progress - Note 6 2,499,535. 1,234,600.
Capital assets being depreciated
Utility plant in service 216,324,338. 205,139,665.
Less accumulated depreciation (63,771,280.) (59,230,328.)
NET UTILITY PLANT 155,751,207. 147,842,551.
DEFERRED ASSETS
Assessments receivable - Note 6 223,121. 264,782.
Unamortized debt discount and expense - Note 6 12,027. 17,632.
Accreted capital appreciation on long term bonds -
Note 10 581,994. 928,056.
Accounts receivable general facility and
connection charges - Note 8 465,482. 479,934.
TOTAL DEFERRED ASSETS 1,282,623. 1,690,404.
TOTAL ASSETS $ 200,339,336. $ 189,303,370.
The accompanying notes are an integral part of this financial statement.
_________________________________________________________________________________________________________
Washington State Auditor's Office
12
SOOS CREEK WATER AND SEWER DISTRICT
BALANCE SHEETS
December 31, 2007 and 2006
2007 2006
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable - Maintenance fund $ 1,863,794. $ 1,840,993.
Current portion of Public Works Trust Fund loans 531,665. 531,665.
Accrued interest payable on Public Works Trust
fund loans 22,354. 24,854.
Fees and deposits of developers - Note 7 1,361,613. 1,222,943.
Contractors retainage - Note 9 146,882. 73,551.
Payables from Restricted Assets
Accounts payable - Capital Improvement Fund 2,249. 1,808.
Current portion of revenue and refunding bonds 1,950,061. 1,890,125.
Accrued interest payable on revenue and refunding
bonds 3,356. 22,700.
TOTAL CURRENT LIABILITIES 5,881,975. 5,608,639.
LONG TERM LIABILITIES
Accrued vacation and sick leave - Note 1 121,929. 110,455.
Revenue and refunding bonds, net of current portion,
bond discount and premium - Notes 10 and 11 4,600,233. 6,550,294.
Public Works Trust Fund loans, net of current
portion - Note 12 4,387,389. 4,919,054.
TOTAL LONG TERM LIABILITIES 9,109,552. 11,579,804.
TOTAL LIABILITIES 14,991,527. 17,188,443.
NET ASSETS
Invested in capital assets, net of related debt 144,872,523. 134,874,400.
Restricted 20,519,100. 17,999,260.
Unrestricted 19,956,187. 19,241,267.
TOTAL NET ASSETS 185,347,810. 172,114,927.
TOTAL LIABILITIES AND NET ASSETS $ 200,339,336. $ 189,303,370.
The accompanying notes are an integral part of this financial statement.
_________________________________________________________________________________________________________
Washington State Auditor's Office
13
SOOS CREEK WATER AND SEWER DISTRICT
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
Years ended December 31, 2007 and 2006
2007 2006
OPERATING REVENUES
Sewer $ 18,011,400. $ 16,634,413.
Water 6,764,536. 6,913,668.
Street lights 287,041. 286,679.
Services and other 1,746,342. 1,791,905.
TOTAL OPERATING REVENUES 26,809,319. 25,626,666.
OPERATING EXPENSES
Sewage treatment 11,074,936. 9,876,425.
Water 3,167,950. 3,379,209.
Street light power 259,042. 255,639.
Operations - labor and expense 1,133,618. 1,060,701.
Repairs and maintenance - labor and expense 1,751,314. 1,980,927.
Pumping power 294,714. 343,362.
Meter reading expense 126,669. 121,364.
Business and accounting 1,473,407. 1,155,755.
Administrative office expense 556,228. 524,895.
Property insurance 94,475. 109,269.
Maintenance contracts - office equipment 44,110. 43,364.
Outside services
Engineering 795,316. 620,415.
Attorney 154,564. 136,472.
Financial 62,688. 59,357.
Computer systems 83,998. 54,405.
Commissioner compensation and expense 221,503. 248,954.
Business and payroll taxes 762,974. 797,930.
Miscellaneous 129,775. 116,531.
OPERATING EXPENSES BEFORE DEPRECIATION 22,187,281. 20,884,973.
Depreciation expense 4,738,507. 4,514,184.
TOTAL OPERATING EXPENSES 26,925,788. 25,399,157.
OPERATING INCOME (LOSS) BEFORE NON-
OPERATING REVENUES AND EXPENSES (116,469.) 227,509.
The accompanying notes are an integral part of this financial statement.
_________________________________________________________________________________________________________
Washington State Auditor's Office
14
SOOS CREEK WATER AND SEWER DISTRICT
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
Years ended December 31, 2007 and 2006
2007 2006
NON-OPERATING REVENUES
Assessment interest 18,419. 20,306.
Investment interest - Note 16 1,174,224. 1,569,977.
Gain on sale of surplus property 20,411. 33,350.
TOTAL NON-OPERATING REVENUE 1,213,054. 1,623,633.
NON-OPERATING EXPENSES
Interest on revenue bonds 455,238. 510,569.
Interest on Public Works Trust loans 44,842. 49,683.
Amortization of debt discount and expense 5,606. 12,076.
Loss on abandonment of utility plant 64,304. 93,017.
TOTAL NON-OPERATING EXPENSES 569,990. 665,345.
INCOME (LOSS) BEFORE CONTRIBUTIONS
AND EXTRAORDINARY ITEMS 526,595. 1,185,797.
Contributions in aid of construction 12,335,063. 8,944,224.
Extraordinary income - Note 15 371,225. 0.
CHANGE IN NET ASSETS 13,232,882. 10,130,021.
NET ASSETS, JANUARY 1 172,114,927. 161,984,906.
NET ASSETS, DECEMBER 31 $ 185,347,810. $ 172,114,927.
The accompanying notes are an integral part of this financial statement.
_________________________________________________________________________________________________________
Washington State Auditor's Office
15
SOOS CREEK WATER AND SEWER DISTRICT
STATEMENTS OF CASH FLOWS
Years ended December 31, 2007 and 2006
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers $ 26,524,966. $ 25,316,096.
Payments to suppliers (18,501,260.) (17,487,666.)
Payments to employees (3,458,909.) (3,194,850.)
Other receipts - extraordinary income 371,225. 0.
NET CASH FROM OPERATING ACTIVITIES 4,936,022. 4,633,580.
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets (3,336,365.) (2,439,595.)
Principal and interest paid on revenue bonds (2,018,520.) (1,968,520.)
Principal and interest paid on other capital debt (581,373.) (586,370.)
Proceeds from assessments, principal and interest 60,081. 98,188.
Proceeds from deferred facility and connection charges,
principal and interest 180,821. 129,665.
Proceeds from sale of capital assets 20,411. 33,350.
Cash contributed in aid of construction 2,839,101. 3,371,617.
NET CASH PROVIDED (USED BY) CAPITAL
AND RELATED FINANCING ACTIVITIES (2,835,844.) (1,361,665.)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest on investments 1,885,416. 1,483,419.
Unrealized loss on investments - Note 16 (737,222.) 0.
(Purchase) sale of investments 11,000. (20,000.)
NET CASH FROM INVESTING ACTIVITIES 1,159,194. 1,463,419.
NET CHANGE IN CASH BALANCES 3,259,372. 4,735,334.
CASH BALANCES AT BEGINNING OF YEAR 32,771,965. 28,036,630.
CASH BALANCES AT END OF YEAR $ 36,031,337. $ 32,771,965.
CASH BALANCES AT END OF YEAR CONSIST OF:
Restricted 17,698,849. 15,105,279.
Unrestricted 18,332,487. 17,666,686.
TOTAL CASH BALANCE $ 36,031,337. $ 32,771,965.
NON-CASH CAPITAL FINANCING ACTIVITIES:
Developer contributed capital $ 9,367,450. $ 5,501,044.
accompanying notes are an integral part of this financial statement.
The_________________________________________________________________________________________________________
Washington State Auditor's Office
16
SOOS CREEK WATER AND SEWER DISTRICT
STATEMENTS OF CASH FLOWS
Years ended December 31, 2007 and 2006
2007 2006
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income (loss) $ (116,469.) $ 227,509.
Other receipts - extraordinary income 371,225. 0.
TOTAL OPERATING AND OTHER INCOME (LOSS) 254,756. 227,509.
ADJUSTMENTS TO RECONCILE OPERATING INCOME
(LOSS) TO CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation expense 4,738,507. 4,514,184.
Change in assets and liabilities:
(Increase) decrease in accounts receivable (315,894.) (314,141.)
(Increase) decrease in contractual receivable 31,542. 31,542.
(Increase) decrease in inventory (19,213.) (20,005.)
(Increase) decrease in prepaid expenses 48. (7,966.)
Increase (decrease) in accounts payable 22,802. 172,265.
Increase (decrease) in accrued vacation and
sick leave 11,474. (21,700.)
Increase (decrease) in fees and deposits
of developers 138,670. (9,889.)
Increase (decrease) in contract retainage 73,331. 61,781.
TOTAL ADJUSTMENTS 4,681,266. 4,406,071.
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 4,936,022. $ 4,633,580.
The accompanying notes are an integral part of this financial statement.
_________________________________________________________________________________________________________
Washington State Auditor's Office
17
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies of Soos Creek Water and Sewer District (the District) is presented to
assist in understanding the District’s financial statements. The financial statements and notes are representations of
the District’s management who are responsible for their integrity and objectivity.
Reporting Entity
The District is a municipal corporation formed in King County, State of Washington, which is governed by an elected
five-member board. The District’s primary activity is to provide water and sewer services to residential and
commercial customers within the District’s boundaries.
General
The accounting policies of the District conform to generally accepted accounting principles as applicable to
proprietary funds of governmental units, except for interest and penalties earned on utility local improvement district
assessments which are recorded as received. This practice is not in accordance with generally accepted accounting
principles, but does not result in a material difference. The following is a summary of the more significant policies.
Basis of Accounting
The accounting records of the District are maintained in accordance with methods prescribed by the State Auditor
under the authority of RCW Chapter 43.09. The District uses the BARS System of Accounts for governmental units.
The District uses the full-accrual basis of accounting where revenues are recognized when earned and expenses are
recognized when incurred, except that accrued assessment interest is not reflected therein. The District’s financial
statements include the financial position and results of all operations that the District manages.
Cash Flows
The District presents its cash flow statements using the direct method. For purposes of the statements of cash
flows, the District considers all highly liquid investments with maturities of three months or less when purchased to
be cash equivalents.
Cash and cash equivalents at the balance sheet dates consisted of the following:
2007 2006
Cash in bank $ 68,421. $ 37,300.
Cash in bank lockbox facility 2,439,010. 517,947.
Cash in King County Investment Pool 16,189,787. 17,111,439.
Total $18,697,218. $17,666,686.
_________________________________________________________________________________________________________
Washington State Auditor's Office
18
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Accounts Receivable
Unbilled utility service receivables are recorded at yearend.
The District does not provide an allowance for doubtful accounts. All accounts are considered collectible.
Uncollectible accounts are charged directly against earnings when they are determined to be uncollectible. Use of
this method does not result in a material difference from the valuation method required by generally accepted
accounting principles.
The following amounts were due the District at December 31:
2007 2006
Utilities $ 4,048,214. $ 3,635,715.
Developers 189,501. 214,207.
Contractual obligation, current portion 31,542. 31,542.
Other 26,080. 97,979.
Total $ 4,295,337. $ 3,979,443.
Inventories
Inventories are valued at the lower of cost or market using the first-in, first-out method. Inventories consisted of the
following as of December 31:
2007 2006
Materials and supplies $ 97,572. $ 91,937.
Small tools 120,412. 106,111.
Sewer supplies and equipment 8,223. 8,947.
Total $ 226,208. $ 206,995.
Utility Plant and Depreciation
Utility plant in service and other fixed assets are stated at cost where the historical cost is known. Where historical
cost is not known, assets are recorded at the District engineer’s estimated cost. Donations by developers and
customers are recorded at the contract price or donor cost or appraised value.
Expenditures for maintenance, repairs, and minor renewals are accounted for as expenses when incurred. Renewals
and betterments that materially extend the life of the assets are capitalized. At the time property is sold, retired or
otherwise disposed of, the original cost is removed from the utility plant accounts, accumulated depreciation is
charged with the accumulated depreciation related to the property sold, and the net gain or loss on disposition is
credited or charged to income.
_________________________________________________________________________________________________________
Washington State Auditor's Office
19
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Utility Plant and Depreciation
Depreciation is computed on the straight-line method with useful lives of five to fifty years. Initial depreciation on
utility plant is recorded in the year subsequent to purchase. Depreciation expense for the years ended December 31,
2007 and 2006 were $4,738,507 and $4,514,184 respectively. Preliminary costs incurred for proposed projects are
deferred pending construction of the facility. Costs related to projects ultimately constructed are transferred to utility
plant; charges related to abandoned projects are expensed.
Capitalization of Expenses
The District incurs engineering, legal, and other expenses in connection with the design and construction of utility
plant. Labor costs are capitalized and recorded as a cost of utility plant.
Compensated Absences
The District accrues accumulated unpaid vacation and sick leave benefits as earned. Sick leave is accrued at 50%
of the amount due, as that portion would be paid on termination. The liabilities for unpaid vacation and sick leave
benefits at December 31, 2007 and 2006 were $121,929 and $110,455 respectively.
Vacation
Each full-time employee receives vacation benefits as follows:
Years of Continuous Monthly Vacation Equivalent Annual
Service Credit Vacation Earned
First year 1 day 12 working days
After two years 1.083 days 13 working days
After three years 1.167 days 14 working days
After five years 1.25 days 15 working days
After ten years 1.50 days 18 working days
After fifteen years 1.67 days 20 working days
During the first year of employment, an employee is not entitled to take any vacation. If an employee’s
employment with the District terminates prior to completing one year of employment, the employee is not
entitled to any prorated vacation pay. During the second and all subsequent years of employment, vacation
will accrue and be eligible on a continuing basis each month. An employee may not accumulate more than
1.5 times his/her annual vacation days. At the end of the year, or at the time of termination or retirement,
vacation accruals will be adjusted accordingly. Each December 31st, all vacation accruals in excess of the
allowable amount are dropped.
_________________________________________________________________________________________________________
Washington State Auditor's Office
20
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Compensated Absences
Sick Leave
Each fulltime regular employee of the District accrues sick leave benefits at the rate of one day per calendar
month, beginning with the first calendar month following the commencement of employment. The sick leave
accruing each month is credited to the employee at the end of that month. The amount of accumulated sick
leave is limited to 520 hours.
Upon retirement, an employee receives 50% of any remaining unused accumulated sick leave at the
employee’s then current rate of pay.
Upon the death of an employee who leaves a surviving spouse or surviving minor child, the surviving spouse
or surviving minor child, but not both, is entitled to 50% of the employee’s unused accumulated sick leave at
the employee’s then current rate of pay.
An employee who voluntarily terminates, and is not on probation at the time of termination, receives 50% of
the employee’s unused accumulated sick leave at the employee’s then current rate of pay. An employee
terminated by the District without cause receives 50% of the employee’s unused accumulated sick leave at
the employee’s then current rate of pay; terminated with cause receives no sick leave accrual.
Income Tax
The District is a municipal corporation and as such is exempt from income and property taxes.
NOTE 2 - RESTRICTED ASSETS
Cash, investments, and bond funds are maintained by the King County Treasurer’s Office.
Revenue Bond Funds
In accordance with bond resolutions and certain related agreements, separate restricted funds are required to be
established. Assets held in these funds are restricted for specific uses, including debt service and other special
reserve requirements. Restricted bond funds included the following at the balance sheet dates:
2007 2006
Bond fund cash $ 385,685. $ 877,330.
Bond fund investments 2,028,903. 2,041,323.
Accrued interest receivable 22,667. 27,436.
Total $ 2,437,255. $ 2,946,089.
_________________________________________________________________________________________________________
Washington State Auditor's Office
21
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Revenue Bond Funds
These restricted funds are to be used for redemption of revenue and refunding bonds, capital appreciation bonds, and
related interest costs.
Restricted bond fund assets shown on the balance sheets included the following investments:
2007 2006
Cash $ 3. $ 10.
King County Investment Pool 385,682. 877,320.
U.S. Treasury Notes 2,004,000. 1,990,640.
Land 50,683. 50,683.
Total $ 2,440,368. $ 2,918,653.
Special Funds
In accordance with District resolutions, separate restricted funds are required. Assets held in these funds are
restricted for specific uses, including construction and replacement of utility plant.
Restricted funds included the following special funds at the balance sheet dates:
2007 2006
Capital Improvement Fund
Cash $17,685,655. $14,227,950.
Interest receivable 82,327. 82,314.
Total $17,767,982. $14,310,264.
_________________________________________________________________________________________________________
Washington State Auditor's Office
22
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Special Funds
Restricted special fund assets shown on the balance sheets included the following investments:
2007 2006
King County Investment Pool $17,685,655. $14,227,950.
NOTE 3 - DEPOSITS AND INVESTMENTS
Cash and investments are maintained by the District’s ex officio treasurer, King County. In accordance with state
investment laws, the District has entered into a formal inter-local agreement with King County to have some funds
not required for immediate expenditure to be invested in the King County Investment Pool (Pool).
As of December 31, 2007, the District had the following investments in the Pool:
Effective
Fund Par Value Fair Value Duration
Maintenance fund $16,189,787. $15,924,274. 0.55 years
Bond fund 385,682. 379,356. 0.55 years
Capital Improvement fund 17,685,655. 17,395,611. 0.55 years
Total $34,261,124. $33,699,241.
Interest Rate Risk . As of December 31, 2007, the Pool’s low sensitivity to changing markets was reflected in the
‘S1’ volatility rating assigned by Standard & Poor’s Rating Services as measured on a six-point scale ranging from
‘S1’ (lowest volatility) to ‘S6’ (highest volatility). As a means of limiting its exposure to rising interest rates, securities
purchased in the Pool must have a final maturity, or weighted average life, no longer than five years. While the
Pool’s market value is calculated on a monthly basis, unrealized gains and losses are not distributed to participants.
The Pool distributes earnings monthly using an amortized cost methodology.
Credit Risk . As of December 31, 2007, the District’s investment in the Pool was rated ‘AAAf/CWN” by Standard &
Poor’s Rating Services (See Note 18). Standard & Poor’s is a nationally recognized statistical rating organization
(NRSRO). In compliance with state statutes, Pool policies authorize investments in U.S. Treasury securities, U.S.
agency securities and mortgage-backed securities, municipal securities (rated at least “A” by two NRSROs),
commercial paper (rated at least the equivalent of “A-1” by two NRSROs), certificates of deposits issued by qualified
public depositories, repurchase agreements, and the Local Government Investment Pool managed by the
Washington State Treasurer’s office.
_________________________________________________________________________________________________________
Washington State Auditor's Office
23
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE 4 – UTILITY PLANT
Major expenses for capital assets, including major repairs that increase useful lives, are capitalized. Maintenance,
repairs, and minor renewals are accounted for as expenses when incurred. Utility plant in service is recorded at cost.
Donations by developers are recorded at the donor cost.
Utility plant activity for the year ended December 31, 2007, was as follows:
Balance Balance
Dec. 31, 2006 Increase Decrease Dec. 31, 2007
Utility plant not being depreciated:
Land & land rights $ 698,614. $ 0. $ 0. $ 698,614.
Construction in progress 1,234,600. 1,264,935. 0. 2,499,535.
Total 1,933,214. 1,264,935. 0. 3,198,149.
Utility plant being depreciated:
Sewer transmission mains & pipes 124,363,259. 7,413,729. 0. 131,776,988.
Water transmission mains & pipes 40,686,673. 3,141,783. 175,348. 43,653,108.
Pumping stations & reservoirs 24,418,265. 576,910. 0. 24,995,175.
Buildings 4,272,644. 130,818. 0. 4,403,462.
Machinery, equipment, & other 11,398,826. 183,291. 86,511. 11,495,606.
Total 205,139,666. 11,446,532. 261,859. 216,324,340.
Less accumulated depreciation:
Sewer transmission mains & pipes 33,281,319. 2,487,199. 0. 35,768,518.
Water transmission mains & pipes 11,669,494. 809,505. 132,879. 12,346,120.
Pumping stations & reservoirs 6,460,412. 834,230. 0. 7,294,642.
Buildings 1,444,309. 91,058. 0. 1,535,367.
Machinery, equipment, & other 6,374,794. 516,515. 64,675. 6,826,634.
Total 59,230,328. 4,738,507. 197,554. 63,771,281.
Total depreciable assets, net 145,909,338. 6,708,025. 64,305. 152,553,059.
Total capital assets, net $ 147,842,552. $ 7,972,961. $ 64,305. $ 155,751,207.
NOTE 5 - WORK IN PROGRESS
Work in progress represents expenditures to date on projects authorized by the Board of Commissioners. Costs are
accumulated on projects until completed and accepted by the Board. Upon acceptance by the Board the projects
are transferred to Utility Plant. Total work in progress as of December 31, 2007, was $2,499,535 and as of December
31, 2006, was $1,234,600. Of the committed balance of $7,425,885 on December 31, 2007, the District does not
anticipate requiring any future financing.
_________________________________________________________________________________________________________
Washington State Auditor's Office
24
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Work in progress as of December 31, 2007, was composed of the following:
Expended Required
Project through Future
Authorization Dec. 31, 2007 Committed Financing
Lake Desire Main Replacement $ 2,049,350. $ 103,176. $ 1,946,174. None
Lift Station 11 Replacement 1,740,000. 504. 1,739,496. None
Pump Station 2 Replacement 1,603,000. 186,376. 1,416,624. None
Westview Terrace Main Replacement 1,390,000. 1,092,684. 297,316. None
Lake Desire Sewer 951,550. 60,566. 890,984. None
Pump Station 2 Pipe Upgrade 641,440. 588,112. 53,328. None
Tank 5 Recoating 545,000. 33,445. 511,555. None
187th Ave Main Replacement 263,750. 22,074. 241,676. None
Lift Station 10 Removal 195,000. 19,679. 175,321. None
Office Fence Replacement 172,203. 172,203. 0. None
Various Projects under $100,000 374,127. 220,716. 153,411. None
$ 9,925,420. $ 2,499,535. $ 7,425,885.
NOTE 6 - DEFERRED ASSETS
Assessments Receivable
Assessment levies are recorded as filed with the King County Treasurer for Utility Local Improvement District
projects. The following sewer division assessments were outstanding as of the balance sheet dates:
2007 2006
U.L.I.D. No. 73 $ 2,532. $ 3,798.
U.L.I.D. No. 75 0. 6,886.
U.L.I.D. No. 84 0. 232.
U.L.I.D. No. 86 22,549. 24,773.
U.L.I.D. No. 88 0. 1,025.
U.L.I.D. No. 90 22,309. 30,247.
U.L.I.D. No. 93 5,996. 11,991.
U.L.I.D. No. 97 19,623. 26,164.
U.L.I.D. No. 100 33,361. 36,779.
U.L.I.D. No. 101 19,167. 20,000.
U.L.I.D. No. 105 4,088. 5,451.
U.L.I.D. No. 107 93,497. 97,437.
Total $ 223,121. $ 264,782.
The assessments may be paid upon receipt of billing or in equal annual installments plus interest at the option of the
property owner.
_________________________________________________________________________________________________________
Washington State Auditor's Office
25
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Unamortized Debt Discount and Expense
Costs related to the sale of bonds are deferred and amortized over the lives of the various bond issues. Costs are
added as incurred upon issuance of Revenue Bonds. The unamortized balances at December 31, 2007 and 2006
were $12,027 and $17,632 respectively.
NOTE 7 - FEES AND DEPOSITS OF DEVELOPERS
The District requires developers and customers to deposit funds upon beginning a project to which charges for
District services are applied.
The following deposits of developers and customers were on hand at December 31:
2007 2006
Main extension deposits $ 293,706. $ 58,261.
Prepaid sewer area charges 15,315. 15,315.
Prepaid water area charges 1,292. 1,292.
Guaranty deposits 579,403. 639,667.
Developer easement deposits 239,253. 186,462.
Latecomer deposits 159,250. 246,929.
Customer deposits 73,395. 75,017.
Total $ 1,361,613. $ 1,222,943.
NOTE 8 - ACCOUNTS RECEIVABLE GENERAL FACILITY CHARGES AND SPECIAL
CONNECTION CHARGES
The District has recorded as receivable unpaid general facility charges and special connection charges. The various
payment agreements include interest rates ranging from 6.0% to 9.5% with final payments due in 2009 to 2017. The
total general facility and special connection charge balances due December 31, 2007 and 2006 were $465,482 and
$479,934 respectively.
_________________________________________________________________________________________________________
Washington State Auditor's Office
26
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE 9 – CONTRACTOR RETAINAGE
The following amounts were due to contractors for District construction contracts at December 31:
2007 2006
Bonner Brothers $ 78,104. $ 63,252.
VJM Construction 31,226. 0.
Kar-Vel Construction 28,185. 0.
Grant Construction 5,534. 5,534.
Archer Construction 3,832. 0.
Shoreline Construction 0. 1,781.
CD Construction 0. 2,984.
$ 146,882. $ 73,551.
NOTE 10 – REVENUE AND REFUNDING BONDS
Water and Sewer Revenue Bonds, 1999
The District issued Water and Sewer Revenue Bonds, 1999, on May 7, 1999, in the aggregate amount of
$3,200,000. Proceeds of the Bonds were used to pay for sewer trunk line and lift station improvements and to pay
the costs of issuance of the Bonds. The Bonds were dated May 1, 1999, and are fully registered as to both principal
and interest, and are in the denomination of $5,000 each or any integral multiple thereof within a single maturity. The
Bonds bear interest from May 1, 1999, payable semiannually on June 1 and December 1.
The maturity and interest schedule for the 1999 Bonds is as follows:
Maturity Schedule for 1999 Bonds
Maturity
Year
December 1 Rate Principal Interest Total
2008 $ 0. $ 40,275. $ 40,275.
2009 0. 40,275. 40,275.
2010 4.50% 165,000. 40,275. 205,275.
2011 4.50% 730,000. 32,850. 762,850.
$ 895,000. $ 153,675. $ 1,048,675.
_________________________________________________________________________________________________________
Washington State Auditor's Office
27
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Water and Sewer Revenue Bonds, 1999
Redemption Provisions
Optional Redemption. The District has reserved the right to redeem the Bonds maturing on December 1, 2011, prior
to their stated maturity, on any date on or after June 1, 2009, in whole or in part at the price of par plus accrued
interest to the date of redemption.
Mandatory Redemption of the Term Bonds. The Bonds maturing in 2010 and 2011 are Term Bonds and, if not
redeemed under the optional redemption provisions set forth above or purchased in the open market under “Option to
Purchase” below, shall be called for redemption at par plus accrued interest to the date fixed for redemption on
December 1 in years and amounts as follows:
Term Bonds
Mandatory Mandatory
Redemption Redemption
Year Amount
2010 $ 165,000.
2011 730,000.
Option to Purchase
The District has reserved the right to use surplus funds at any time to purchase any Bonds on the open market and
at any price for retirement only.
Water and Sewer Revenue Bonds, 1991
The District issued $7,410,000 of Water and Sewer Revenue Bonds, 1991, dated October 1, 1991. A portion of the
proceeds were used to finance the construction of sewerage extensions to residential and commercial areas within
the Utility Local Improvement Districts, the West Lake Wilderness Phase I project and the Lift Station No. 5 Outfall
project. The balance of the project costs were paid from investment earnings on the bond proceeds and from other
revenues of the system.
The bonds were issued as fully registered bonds, without coupons, in the denomination of $5,000 each or any
integral multiple of $5,000 for a single maturity. Capital Appreciation Bonds were issued in denominations of $5,000
of Accreted Value at maturity or any integral multiple thereof. The Bonds bear interest from October 1, 1991, until
paid or until payment has been duly provided for, payable as follows:
1991 Capital Appreciation Bonds
Maturity Maturity Original Compounding
Year Amount Principal Amount Rate
2008 $1,950,000. $ 606,392. 7.10%
2009 1,950,000. 555,926. 7.20%
2010 1,755,000. 475,809. 7.30%
Interest on the Capital Appreciation Bonds is accreted and compounded semiannually on February 1 and August 1
of each year.
_________________________________________________________________________________________________________
Washington State Auditor's Office
28
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Summary
Summary of Revenue and Refunding Bonds Outstanding and accrued interest thereon as of December 31:
Bonds:
2007 2006
Accrued Accrued
Issue Principal Interest Principal Interest
1999 $ 895,000. $ 3,356. $ 2,125,000. $ 7,713.
1994 0. 0. 660,000. 14,988.
$ 895,000. $ 3,356. $ 2,785,000. $ 22,700.
1991 Capital Appreciation Bonds:
2007 2006
Par Value $ 5,655,000. $ 5,655,000.
Less accreted value (581,994. ) (928,056. )
Principal balance $ 5,073,006. $ 4,726,944.
The following annual debt service costs will be due on bonds outstanding:
Principal Interest Total
2008 $ 1,950,000. $ 40,275. $ 1,990,275.
2009 1,950,000. 40,275. 1,990,275.
2010 1,920,000. 40,275. 1,960,275.
2011 730,000. 32,850. 762,850.
Total $ 6,550,000. $ 153,677. $ 6,703,677.
NOTE 11 – PREMIUM ON BOND ISSUES
Bond Premium Amortization
The District, upon issuance of the 1999 Revenue Bonds, received $4,243 in re-offering premium. The District is
amortizing the bond premium in a systematic fashion over the life of the bonds. The remaining premium, $294 as of
December 31, 2007, will be recorded as interest on revenue bonds.
_________________________________________________________________________________________________________
Washington State Auditor's Office
29
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE 12 - PUBLIC WORKS TRUST FUND LOANS
2001 Public Works Trust Fund Loan
The District entered into an agreement with the Department of Community Development of the State of Washington
on May 4, 2001, to obtain a loan not to exceed $1,452,650.
The loan bears interest at one-half of one percent (0.5%) per annum on the outstanding principal balance. The term
of the loan is twenty (20) years, with the final payment due July 1, 2021. The loan is being repaid solely from utility
revenues. The first loan repayment under the agreement was due July 1, 2000, and subsequent installments are due
on July 1 of each year during the term of the loan. The first repayment under the agreement consisted of interest
only at the rate of one-half of one percent (0.5%) per annum, calculated on a 360-day year of twelve 30-day months,
applied to funds received. Interest began to accrue from the date the Department issued each warrant to the District.
Subsequent repayments consist of 1/19th of the principal plus interest on the unpaid balance of the loan. The final
payment will be an amount sufficient to bring the loan balance to zero.
The proceeds were used for the construction of the Meridiana Sewer Extension and Water Main Project. Total
estimated project costs were $1,709,000. Actual project costs were $1,462,317. On July 10, 2003, $155,534 was
returned to the Department of Community Development.
The sources of funds for the project were as follows:
Repair and Replacement fund $ 160,170.
King County Water District 111 96,180.
Public Works Trust fund 1,452,650.
Total anticipated funds $ 1,709,000.
Funds loaned to the District as of the balance sheet date are as follows:
First draw - May 16, 2001 $ 217,898.
Second draw - October 7, 2002 1,162,120.
Funds returned to lender (155,534.)
Total draws $ 1,224,484.
_________________________________________________________________________________________________________
Washington State Auditor's Office
30
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
2000 Public Works Trust Fund Loan
The District entered into an agreement with the Department of Community Development of the State of Washington
on March 30, 2000, to obtain a loan not to exceed $1,779,000.
The loan bears interest at one percent (1%) per annum on the outstanding principal balance. The term of the loan is
twenty (20) years, with the final payment due July 1, 2020. The loan is being repaid solely from utility revenues. The
first loan repayment under the agreement was due July 1, 2000, and subsequent installments are due on July 1 of
each year during the term of the loan. The first repayment under the agreement consisted of interest only at the rate
of one percent (1%) per annum, calculated on a 360-day year of twelve 30-day months, applied to funds received.
Interest accrues from the date the Department issues each warrant to the District. Subsequent repayments consist
of 1/19th of the principal plus interest on the unpaid balance of the loan. The final payment will be an amount
sufficient to bring the loan balance to zero.
The proceeds were used for the construction of Lift Station 38 and the Witte Road Conveyance. Total estimated
project costs were $3,299,000.
The sources of funds for the project were as follows:
Capital Improvement fund $ 1,450,000.
Public Works Trust fund 1,779,000.
Total anticipated funds $ 3,229,000.
Funds loaned to the District as of the balance sheet date are as follows:
First draw - April 10, 2000 $ 266,850.
Second Draw - September 18, 2000 1,334,250.
Third draw - March 31, 2002 177,900.
Total draws $ 1,779,000.
1995 Public Works Trust Fund Loan
The District entered into an agreement with the Department of Community Development of the State of Washington
on June 1, 1995, to obtain a loan not to exceed $3,500,000.
The loan bears interest at one percent (1%) per annum on the outstanding principal balance. The term of the loan is
twenty (20) years, with the final payment due July 1, 2015. The loan is being repaid solely from utility revenues,
general obligation revenues, or a combination thereof. The first loan repayment under the agreement was due July 1,
1997, and subsequent installments are due on July 1 of each year during the term of the loan. The first repayment
under the agreement consisted of interest only at the rate of one percent (1%) per annum, calculated on a 360-day
year of twelve 30-day months, applied to funds received. Interest begins to accrue from the date the Department
issues each warrant to the District. Subsequent repayments consist of 1/19th of the principal plus interest on the
unpaid balance of the loan. The final payment will be an amount sufficient to bring the loan balance to zero.
_________________________________________________________________________________________________________
Washington State Auditor's Office
31
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
1995 Public Works Trust Fund Loan
The proceeds were used for lift station/storage replacement or improvements, interceptors, relief sewers and force
main improvements. Total estimated project costs were $5,299,000.
The sources of funds for the project were as follows:
Capital Improvement fund $ 1,107,000.
Kent School District 692,000.
Public Works Trust fund 3,500,000.
Total anticipated funds $ 5,299,000.
Funds loaned to the District as of the balance sheet date are as follows:
First draw - June 7, 1995 $ 525,000.
Second Draw - September 26, 1995 2,625,000.
Third Draw - September 9, 1999 350,000.
Total draws $ 3,500,000.
1994 Public Works Trust Fund Loan
The District entered into an agreement with the Department of Community Development of the State of Washington
on April 11, 1994, to obtain a loan not to exceed $3,500,000.
The loan bears interest at one percent (1%) per annum on the outstanding principal balance. The term of the loan is
exceed twenty (20) years, with the final payment due July 1, 2014. The loan is being repaid solely from utility
revenues, general obligation revenues, or a combination thereof. The first loan repayment under the agreement was
due July 1, 1996, and subsequent installments are due on July 1 of each year during the term of the loan. The first
repayment under the agreement consisted of interest only at the rate of one percent (1%) per annum, calculated on
a 360-day year of twelve 30-day months, applied to funds received. Interest accrues from the date the Department
issues each warrant to the District. Subsequent repayments consist of 1/19th of the principal plus interest on the
unpaid balance of the loan. The final payment will be an amount sufficient to bring the loan balance to zero.
The proceeds were used for the Lift Station 10 & 11 conveyance system replacement project. Total estimated
project costs were $7,000,000.
The sources of funds for the project were as follows:
Capital Improvement fund $ 1,680,000.
Black Diamond escrow account 1,820,000.
Public Works Trust fund 3,500,000.
Total funds $ 7,000,000.
_________________________________________________________________________________________________________
Washington State Auditor's Office
32
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
1994 Public Works Trust Fund Loan
Funds loaned to the District as of the balance sheet date are as follows:
First draw - May 20, 1994 $ 525,000.
Second Draw - August 23, 1994 2,625,000.
Third Draw - October 8, 1997 350,000.
Total draws $ 3,500,000.
Summary
Public Works Trust Fund loans at the balance sheet dates consisted of the following:
2007 2006
Balance $ 4,919,054. $ 5,450,719.
Less: current portion (531,665. ) (531,665. )
Long term debt $ 4,387,389. $ 4,919,054.
Accrued interest payable on loans $ 22,354. $ 24,854.
The following annual debt service costs will be due on Public Works Trust Fund loans outstanding:
Principal Interest Total
2008 $ 531,665. 44,711. $ 576,377.
2009 531,665. 39,714. 571,380.
2010 531,665. 34,718. 566,383.
2011 531,665. 29,721. 561,387.
2012 531,665. 24,724. 556,390.
2013 to 2017 1,723,865. 56,139. 1,780,005.
2018 to 2021 536,862. 8,817. 545,679.
Total $ 4,919,054. $ 238,545. $ 5,157,600.
_________________________________________________________________________________________________________
Washington State Auditor's Office
33
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE 13 – CHANGES IN LONG-TERM LIABILITIES
During the year ended December 31, 2007, the following changes occurred in long-term liabilities:
Balance Balance Due Within
Dec. 31, 2006 Additions Reductions Dec. 31, 2007 One Year
Revenue Bonds Payable $ 8,440,000. $ 0. $ 1,840,000. $ 6,600,000. $ 1,950,000.
Plus Bond Premium 419. 0. 125. 294. 61.
Total Bonds Payable 8,440,419. 0. 1,840,125. 6,600,294. 1,950,061.
Public Works Trust Fund Loans 5,450,721. 0. 531,665. 4,919,056. 531,665.
Compensated Absences 110,455. 11,474. 0. 121,929. 0.
Total Long-term Liabilities $14,001,595. $11,474. $ 2,371,790. $ 11,641,279. $ 2,481,726.
NOTE 14 – PENSION, CAFETERIA, AND HEALTH REIMBURSEMENT ACCOUNT PLANS
Pension Plan
Substantially all of Soos Creek Water and Sewer District’s full-time and qualifying part-time employees participate in
the Public Employees’ Retirement System (PERS). This is a statewide local government retirement system
administered by the Washington State Department of Retirement Systems under a cost sharing, multiple-employer,
defined benefit, public employee retirement plan.
The State Department of Retirement Systems issues a publicly available comprehensive annual financial report
(CAFR) that includes financial statements and supplementary information. A copy of this report may be obtained by
writing to:
Department of Retirement Systems
Communications Unit
PO Box 48380
Olympia, Washington 98504-8380
Description of Plan
PERS is a cost-sharing, multiple-employer retirement system comprised of three separate plans: Plans 1 and 2 are
defined benefit plans and Plan 3 is a combination defined benefit/defined contribution plan. Membership in the
system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior Courts
(other than judges); employees of legislative committees; college and university employees not in national higher
education retirement programs; judges of district and municipal courts; non-certificated employees of school
districts; and employees of local government.
Participants who joined the system by September 30, 1977, are Plan 1 members. Those joining after September 30,
1977, and by August 31, 2002, are enrolled in Plan 2 unless they exercise an option to transfer their membership to
Plan 3. PERS participants joining after August 31, 2002, have the irrevocable option of choosing either Plan 2 or
Plan 3. The option must be exercised within the first 90 days of employment. Employees who fail to choose within
90 days default to Plan 3. PERS defined benefit retirement benefits are financed from employee and employer
contributions and investment earnings. Retirement benefit provisions are established in state statue and may be
amended only by the state legislature.
_________________________________________________________________________________________________________
Washington State Auditor's Office
34
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Pension Plan
Plan 1 members are vested after five years of eligible service. Plan 1 members are eligible for retirement after 30
years of service, or at the age of 60 with 5 years of service, or at the age of 55 with 25 years of service. The average
final compensation is based on the greatest compensation during any 24 eligible consecutive compensation months.
The annual pension is 2 percent of the average final compensation per year of service, capped at 60 percent. If
qualified, after reaching the age of 66 a cost-of-living allowance is granted based on years of service credit and is
capped at 3 percent annually.
Plan 2 members are vested after five years of eligible service. Plan 2 members may retire at the age of 65 with 5
years of service, or at 55 with 20 years of service, with an allowance of 2 percent of the average final compensation
per year of service. The average final compensation is based on the greatest compensation during any eligible
consecutive 60-month period. Plan 2 retirements prior to 65 are actuarially reduced. There is no cap on years of
service credit and a cost-of-living allowance is granted, capped at 3 percent annually.
Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member
contributions finance a defined contribution component. As of December 31, 2007, the District had no employees in
Plan 3.
There are 1,188 participating employers in PERS. Membership in PERS consisted of the following as of the latest
actuarial valuation date for the plans of September 30, 2006:
Retirees and beneficiaries receiving benefits 70,201
Terminated plan members entitled to but not yet receiving benefits 25,610
Active plan members vested 105,215
Active plan members not vested 49,812
Total 250,838
Each biennium the state Pension Funding Council establishes Plan 1 and Plan 3 employer contribution rates and
Plan 2 employer and employee contribution rates. Employee contribution rates for Plan 1 are established by
Legislative statute and do not vary from year to year. Employer rates for Plan 1 are not necessarily adequate to fully
fund the system. The employer and employee contribution rates for Plan 2 are developed by the Office of the State
Actuary to fully fund the system. All employers are required to contribute at the level established by the legislature.
The methods used to determine the contribution requirements were established under state statute.
Contributions
The required contribution rates expressed as percentage of covered payroll as of December 31, 2007, were:
PERS Plan 1 PERS Plan 2 PERS Plan 3
Employer * 6.13% 6.13% 6.13%**
Employee 6.00% 4.15% ***
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** Plan 3 defined benefit portion only.
*** Variable from 5.0% minimum to 15.0% maximum based on rate selected by employee.
_________________________________________________________________________________________________________
Washington State Auditor's Office
35
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Pension Plan
Both the District and the employees made the required contributions. The District’s (employer’s) required
contributions for the years ended December 31, were:
PERS Plan 1 PERS Plan 2 PERS Plan 3
2007 $ 8,447. $ 107,611. $ 0.
2006 4,181. 54,036. 0.
2005 2,350. 31,647. 0.
Cafeteria Plan
Description of the Plan
The District adopted a cafeteria plan, effective December 1, 1989, to recognize the contribution made to the District
by its employees. Its purpose is to reward them by providing benefits for those employees who qualify hereunder and
their dependents and beneficiaries. The concept of this plan is to allow employees to choose among different types
of benefits based on their own particular goals, desires and needs. The plan is known as Soos Creek Water and
Sewer District Cafeteria Plan.
The intention of the District is that the plan qualify as a “Cafeteria Plan” within the meaning of Section 125 of the
Internal Revenue Code of 1986, as amended, and that the benefits which an employee elects to receive under the
plan be includable or excludable from the employee’s income under Section 125(a) and other applicable sections of
the Internal Revenue Code of 1986, as amended.
Any eligible employee who was employed on the effective date of this plan is eligible to participate hereunder as of
such date. Any other eligible employee shall be eligible to participate on the first of the month following completion of
a 90-day training period. If a former participant is rehired during the same plan year in which termination of
employment occurs, and such former participant has revoked existing benefit elections and terminated the receipt of
benefits at the time of termination of employment, then such rehired former participant shall be limited in that same
plan year to those benefit elections made prior to his/her termination, except for changes necessitated by a change
in family status.
Employer Contribution
The District makes available to each participant certain insurance coverage, determined by the employer annually.
The payment of all or a portion of the premiums for the insurance so selected constitutes the District’s contribution.
The District determines the amount of the District’s contribution each year, prior to the enrollment period, to be
effective for the next plan year. The District contribution so determined is set forth in each annual election form and
compensation redirection agreement, and such annual agreements are incorporated as a part of the plan. Each
participant’s District contribution that is not designated by the District to apply to a specific benefit is converted to
cafeteria plan benefit dollars and is available to purchase other benefits. The District’s contribution is made on a pro
rata basis for each pay period of the participant.
In 2007 and 2006 the District made no contributions to the employee cafeteria plan.
_________________________________________________________________________________________________________
Washington State Auditor's Office
36
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Health Reimbursement Account Plan
Description of the Plan
The District adopted a health reimbursement account VEBA plan (HRA/VEBA) effective January 1, 2001. The
intention of the District is that the HRA/VEBA qualify as a tax-exempt trust as authorized by Internal Revenue Code
section 501(c)(9). The HRA/VEBA is a pre- and post-retirement, tax-exempt, medical expense reimbursement
account.
Employer Contributions
The District funds employee accounts two ways, through annual sick leave cash-outs and through medical and
dental benefits equalization.
Sick Leave Cash-outs. In January of each year, annual net sick leave (annual hours earned less hours used) is
deposited to the employees’ HRA/VEBA accounts. The number of sick leave hours and the employees’ rate of pay
are as of December 1 of the prior year. The HRA/VEBA deposit schedule for fulltime employees is as follows:
Accumulated Sick Leave as of December 1 Deposit to HRA/VEBA Account
0 to 95 hours 0
96 to 300 hours 25% of annual net sick leave (24 hours max)
301 to 520 hours 50% of annual net sick leave (48 hours max)
> 520 hours 100% of sick leave accrual over 520 hours
The deposit schedule for regular part-time employees would be on a pro-rated basis.
Benefits Equalization. The District determined that it was prudent to pay all employees the same medical and
dental insurance benefit regardless of marital and/or family status. Those employees that waive medical and/or
dental insurance coverage offered by the District for spouses and/or children receive an amount equal to the
difference between full coverage (employee, spouse, and children) and their elected coverage. This difference is
deposited monthly into the employees’ HRA/VEBA accounts.
The District’s 2007 and 2006 contributions to the employees’ HRA/VEBA accounts totaled $569,394 and $448,639
respectively. Employees are always 100% vested in their HRA/VEBA accounts.
NOTE 15 – EXTRAORDINARY ITEM
In 2007 the District filed a claim with the Washington State Department of Revenue for a refund of excise taxes paid
for the period January 1, 2003, through September 30, 2006. Based upon a change in the classification of sewer
revenues, on June 29, 2007, the District received a refund of $336,087 plus interest due on refunds of $35,138.
_________________________________________________________________________________________________________
Washington State Auditor's Office
37
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE 16 – SUBSEQUENT EVENTS
On December 31, 2007, the King County investment pool held four commercial paper assets that were impaired and
part of enforcement events where a trustee/receiver was appointed to determine the best options for selling assets
and/or restructuring the portfolio. The four impaired investments represented $207 million or 5 percent of the pool’s
total assets. As of December 31, 2007, the unrealized loss on these impaired investments for the District was
$737,222; the maximum risk of loss was $1,827,525. In January 2008 the rating of the King County investment pool
was temporarily suspended by Standard & Poor’s pending further information being available on the outcome of
restructuring proposals associated with each impaired investment. Standard & Poor’s took this action because they
have not been able to receive timely information about the impaired investments due to the confidential nature of the
various enforcement events and related restructuring proceedings. Based on the expectation that restructuring
proposals will be executed during the first half of 2008, King County fully expects the pool’s AAAf rating to be
restored by the third quarter of 2008.
NOTE 17 – RISK MANAGEMENT
The District is an associate member of the Cities Insurance Association of Washington (CIAW). As an associate
member, the District has no ownership in any assets of the CIAW nor is it responsible for any shortfall in claim
reserves. The District maintains the following commercial insurance as of December 31, 2007:
Name of Insurer: Cities Insurance Association of Washington (insurance
association insured by St. Paul Fire and Marine Insurance Co.)
Type of coverage: Property, general and auto liability, crime and theft, equipment
breakdown, earthquake, environmental, flood, employment
practices, and errors and omissions
Deductibles: Per occurrence: $1,000 property, $1,000 general and auto liability,
$1,000 to $5,000 crime and theft, $2,500 to $10,000 equipment
breakdown, $25,000 or 5% earthquake, $5,000 to $10,000
environmental, $25,000 flood, $1,000 employment practices,
$1,000 errors & omissions
NOTE 18 – OTHER DISCLOSURES
Contractual Receivable
On May 17, 2000, the District entered into an inter-local agreement with King County Water District 111 (WD 111)
for the joint construction of the Meridiana project, a District sewer line and a WD 111 water line. As project
administrator, the District borrowed $1,224,484 from the Department of Community Development of the State of
Washington. (See Note 12.) Based upon proportional construction costs, WD 111’s pro-rata share of the loan is
49.29% or $603,548.
_________________________________________________________________________________________________________
Washington State Auditor's Office
38
SOOS CREEK WATER AND SEWER DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
Contractual Receivable
The following schedule depicts the annual obligation WD 111 has to the District:
Due from Water District 111
Year Principal Interest Total
2008 $ 31,542. $ 2,208. $ 33,749.
2009 31,542. 2,050. 33,592.
2010 31,542. 1,892. 33,434.
2011 31,542. 1,735. 33,276.
2012 31,542. 1,577. 33,119.
2013 to 2017 157,708. 5,520. 163,227.
2018 to 2021 126,168. 1,577. 127,745.
$ 441,584. $ 16,559. $ 458,143.
Funds Transfer, Unrestricted Funds to Restricted Funds
Sewer Lift Station 10B (LS 10B), an $8.6 million capital project completed in 2005, was constructed to handle future
growth in sewer connections and to replace existing facilities. District management and engineers determined that
LS 10B should be paid 50% from restricted funds dedicated to growth-related capital projects and 50% from
unrestricted funds. During the course of the project, to facilitate bookkeeping and cost tracking, all expenditures
were paid from one restricted fund. In February 2006, the District made a $4.3 million transfer from unrestricted to
restricted funds to recognize the project’s funding split.
_________________________________________________________________________________________________________
Washington State Auditor's Office
39
ABOUT THE STATE AUDITOR'S OFFICE
The State Auditor's Office is established in the state's Constitution and is part of the executive
branch of state government. The State Auditor is elected by the citizens of Washington and serves
four-year terms.
Our mission is to work in cooperation with our audit clients and citizens as an advocate for
government accountability. As an elected agency, the State Auditor's Office has the independence
necessary to objectively perform audits and investigations. Our audits are designed to comply with
professional standards as well as to satisfy the requirements of federal, state, and local laws.
The State Auditor's Office has 300 employees who are located around the state to deliver our
services effectively and efficiently. Approximately 65 percent of our staff are certified public
accountants or hold other certifications and advanced degrees.
Our regular audits look at financial information and compliance with state, federal and local laws on
the part of all local governments, including schools, and all state agencies, including institutions of
higher education. We also perform fraud and whistleblower investigations. In addition, we have the
authority to conduct performance audits of state agencies and local governments.
The results of our audits are widely distributed through a variety of reports, which are available on
our Web site. We continue to refine our reporting efforts to ensure the results of our audits are
useful and understandable.
We take our role as partners in accountability seriously. We provide training and technical
assistance to governments and have an extensive program to coordinate audit efficiency and to
ensure high-quality audits.
State Auditor Brian Sonntag, CGFM
Chief of Staff Ted Rutt
Chief Policy Advisor Jerry Pugnetti
Director of Administration Doug Cochran
Director of State and Local Audits Chuck Pfeil, CPA
Director of Performance Audit Linda Long, CPA, CGFM
Director of Special Investigations Jim Brittain, CPA
Director for Legal Affairs Jan Jutte
Local Government Liaison Mike Murphy
Communications Director Mindy Chambers
Public Records Officer Mary Leider
Main number (360) 902-0370
Toll-free hotline for government efficiency (866) 902-3900
Web Site www.sao.wa.gov
(SAO FACTS.DOC - Rev. 05/08)