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STATE OF WASHINGTON
COUNTY OF JEFFERSON
A Resolution of the Board
of County Commissioners
of Jefferson County retaining
Foster Pepper PLLC as bond
Counsel for the County
)
)
)
)
)
RESOLUTION NO. 33-07
WHEREAS, it is deemed necessary and in the best interests of Jefferson County,
Washington (the "County"), and its inhabitants that the County issue and sell its Limited Tax
General Obligation Bonds in the estimated proposed amount of $2,555,000 (the "Bonds") for
proper County purposes, specifically to finance capital improvements for a 911 Dispatch Center;
and
WHEREAS, it is deemed necessary and advisable that attorneys who are experienced in
such matters be employed as bond counsel to provide advice and draft the resolutions and other
documents necessary for the issuance and sale of such Bonds, that firm to furnish its approving
legal opinion on the validity of those Bonds, of the County at the time of their issuance and sale;
and
WHEREAS, the law firm of Foster Pepper PLLC of Seattle, Washington, is experienced
in providing legal advice and documentation with respect to governmental financing of this type,
and the legal opinions of that firm are nationally recognized by investors in municipal securities;
and
WHEREAS, it is deemed in the best interests of the County that counsel experienced in
such matters be retained to provide special bond counsel services; and
50788419.2
Resolution No. 33-07 re: To Retain Bond Counsel for E911 Bond
WHEREAS, RCW 36.32.200 requires a written contract of employment between the
County's legislative authority and special counsel to be executed by the parties, and approved by
the presiding superior court judge of the County, for such employment, and it is intended that the
engagement letter attached hereto as Exhibit A, and made a part hereof shall constitute that written
contract; NOW, THEREFORE,
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
JEFFERSON COUNTY, WASHINGTON, as follows:
Section 1. The law firm of Foster Pepper PLLC of Seattle, Washington should be and is
employed by the County as bond counsel to provide advice and draft the resolutions and other
documents required by the County in connection with the issuance and sale of the Bonds and to
furnish its legal opinion on the validity of such Bonds and the exclusion from gross income for
federal income tax purposes of the interest thereon at the time of their .delivery to the purchasers
thereof upon the terms and conditions set forth in Exhibit A which are approved and accepted.
Section 2. . The Chairman of the Board of County Commissioners is authorized and
directed to execute and deliver on behalf of the County the engagement letter in substantially the
form of Exhibit A, contingent upon approval of this engagement by the Superior Court Judge.
Section 3. The Board of County Commissioners requests that the Prosecuting Attorney's
Office undertake the steps necessary to have the retention and contract of Foster Pepper PLLC for
the purposes listed above approved by the Superior Court Judge for Jefferson County.
50788419.2
2
Resolution No. :i:i-07 re: To Retain Bond Counsel for E911 Bond
ADOPTED by the Board of County Commissioners of Jefferson County, Washington, at a
regular open public meeting, held this 2nd day of April, 2007.
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ATTEST:
(}Afu.m~ eM C
~li;-M~tth~s,
Deputy Clerk ofthe Board
50788419.2
BOARD OF COUNTY COMMISSIONERS
JEFFERSON COUNTY, WASHINGTON
'"
3
Resolution No. 33-07 re: To Retain Bond Counsel for E911 Bond
EXHIBIT A
April 2, 2007
Honorable Board of County Commissioners
Jefferson County
1820 Jefferson Street
P.O. Box 1220
, Port Townsend, W A 98368
Re: Issuance of$2,555, 000 (est.) Limited Tax General Obligation Bonds, 2007
Honorable Commissioners:
We greatly appreciate the opportunity to again serve as bond counsel to Jefferson County,
Washington (the "County" or "Issuer"). The purpose of this engagement letter is to set forth
certain matters concerning our duties as bond counsel to the Issuer in connection with the issuance
of the above-referenced bonds (the "Bonds"). RCW 36.32.200 requires a written contract of
employment between the County's legislative authority and special counsel to be executed by the
parties, and approved by the presiding judge of the County. It is intended that this writing shall
constitute such written contract.
We understand that the Bonds will be issued to finance capital improvements for a 911
Dispatch Center. We also understand that the Bonds will be purchased at negotiated sale by
Martin Nelson & Company, (the "Purchaser").
SCOPE OF ENGAGEMENT
In this engagement, our duties as bond counsel include the following for the issuance of
the Bonds: (i) subject to the completion of proceedings to our satisfaction, render our legal opinion
(the "Bond Opinion") regarding the validity and binding effect of the Bonds, the source of
payment and security for the Bonds, and the excludability of interest on the Bonds from gross
income for federal income tax purposes; (ii) prepare and review documents necessary or
appropriate to the authorization, issuance and delivery of the Bonds, and coordinate the
authorization and execution of such documents; (iii) review legal issues relating to the structure of
the Bond issue; and (iv) review the section of the official statement, private placement
memorandum or other form of offering or disclosure document to be disseminated in connection
with the sale ofthe Bonds involving the federal income tax treatment of interest on the Bonds.
Our Bond Opinion will be addressed to the Issuer and will be delivered by us on the date
the Bonds are exchanged for their purchase price (the "Closing"). The Bond Opinion will be based
on facts and law existing as of its date. In rendering our Bond Opinion, we will rely upon the
certified proceedings and other certifications of public officials and other persons furnished to us
without undertaking to verify the same by independent investigation, and we will assume
50788419.2
Resolution No. 33-07 re: To Retain Bond Counsel for E911 Bond
continuing compliance by the Issuer after the Bonds are issued with applicable laws relating to
such Bonds. During the course of this engagement, we will rely on the Issuer to provide us with
complete and timely information on all developments pertaining to any aspect of the Bonds and
their security. We understand that officials and employees of the Issuer will cooperate with us in
this regard.
ATTORNEY-CLIENT RELATIONSHIP
Upon execution of this engagement letter, the Issuer will be our client and an attorney-
client relationship will exist between us. In this transaction we represent only the Issuer, we are
not counsel to any other party, and we are not acting as an intermediary among the parties. Our
services as bond counsel regarding the Projects are limited to those contracted for in this letter.
The Issuer's execution of this engagement letter will constitute an acknowledgment of those
limitations. Our representation of the Issuer regarding the Projects will be concluded upon
issuance of the Bonds. Nevertheless, subsequent to Closing, we will mail the appropriate Internal
Revenue Service Form 8038, and prepare and distribute to the participants in the transaction a
transcript of the proceedings pertaining to the Bonds.
CONFLICTS
Bond Financing and Purchaser. Foster Pepper PLLC ("Foster Pepper") will represent the
Issuer as its bond counsel in connection with the Bonds. Foster Pepper presently represents (and
has from time to time represented) the Purchaser (including certain of its affiliates and related
entities) as underwriter's counsel on financings by other issuers. Our representation of the
Purchaser, however, is unrelated to the issuance of the Bonds. Foster Pepper will represent the
Issuer in negotiating a bond purchase agreement regarding the sale of the Bonds to the Purchaser.
The Washington Rules of Professional Conduct prohibit an attorney, and all members of
that attorney's firm, from representing a client in a matter which is adverse to the interests of
another client of the firm. This is called a conflict of interest. The conflict of interest arises
because a lawyer has a duty of loyalty to every client, even if the lawyer is not representing the
client in a particular matter. Since Foster Pepper will be representing the Issuer as bond counsel
with regard to the Bonds and the Purchaser as special counsel, a conflict of interest is presented.
The Rules of Professional Conduct allow clients to waive conflicts of interest when: (a) the
lawyer reasonably believes the representation of the one client will not adversely affect the
relationship with the other client, and (b) all clients consent in writing after full disclosure of the
material facts. We have considered the conflicts presented here, and we believe that it is
appropriate to ask the Issuer to waive the conflicts. We have obtained a written waiver from the
Purchaser for any conflicts that may arise from our representation of borrowers who borrow
money from the Purchaser or who issue bonds underwritten by the Purchaser.
The primary risk associated with waivers of conflicts of interest in circumstances like this
is the risk that confidential information of one client will be disclosed to the other client, to the
disadvantage of the first client. We believe that risk will not be present for the Issuer and the
Purchaser in this matter for the following reasons: (i) the Purchaser will be separately represented
by independent counsel, and (ii) material financial information learned about the Issuer that the
50788419.2
Resolution No. 33-07 re: To Retain Bond Counsel for E911 Bond
attorneys in our firm working on this transaction obtain, must in any event be made available to
the Purchaser under securities laws.
Another risk associated with waivers of conflicts of interest is the risk that a lawyer will
not zealously represent one client out of fear of offending another client. We assure you that we
will represent the Issuer's interests fully and to the best of our abilities. We anticipate that
issuance of the Bonds will proceed amicably and all parties will be satisfied with the results.
However, it is always possible that disputes or even litigation between the Issuer and/or the
Purchaser may arise in the future. In that event, we will not be able to represent any party in that
dispute.
Execution of this letter will confirm that the Issuer has consented to our representation of
the Purchaser consistent with the circumstances described in the foregoing paragraphs, and that the
Issuer has waived the conflicts of interest identified herein.
Regarding Other Foster Pepper Clients. Our firm represents many political subdivisions,
companies, financial institutions and individuals. It is possible that during the time that we are
representing the Issuer, one or more of our present or future clients will have transactions with the
Issuer. It is also possible that we may be asked to represent, in an unrelated matter, one or more of
the entities involved in the issuance of the Bonds. We do not foresee that any such representation,
if it occurs, will adversely affect our ability to represent the Issuer as provided in this letter, either
because such matters will be sufficiently different from the issuance of the Bonds so as to make
such representations not adverse to our representation of you, or because the potential for such
adversity is remote or minor and outweighed by the consideration that it is unlikely that advice
given to the other client will be relevant to any aspect of the issuance of the Bonds. Execution of
this letter will signify the Issuer's consent to our representation of others consistent with the
circumstances described in this paragraph. To the extent we believe any future representation may
adversely affect our representation of the Issuer, we will disclose such representation to the Issuer
and, if required by ethical rules, seek the appropriate Issuer consent.
FEES
Based upon: (i) our current understanding of the terms, structure, size and schedule of the
financing represented by the Bonds; (ii) the duties we will undertake pursuant to this engagement
letter; (iii) the time we anticipate devoting to the financing; and (iv) the responsibilities we will
assume in connection therewith, our fee (including out-of-pocket costs) will be $10,400. Our fees
may increase if: (a) material changes in the structure, size or schedule of the financing occur (e.g.,
the addition of a refunding or defeasance component to the Bonds); or (b) unusual or unforeseen
circumstances arise that require a significant increase in our time or responsibility. If, at any time,
we believe that circumstances require an adjustment of our fee, we will advise you. Our fee will
be paid at the time of Closing of the Bonds. The Board hereby authorizes the Purchaser to deduct
such fee from the price paid to the Issuer for the Bonds and to pay such fee directly to us via wire
transfer. The Board consents to payment of our fee in this manner. Payment of our fee is
contingent on a successful Closing. If for any reason, however, the financing represented by the
Bonds is completed without the delivery of our Bond Opinion as bond counsel, or our services are
otherwise terminated, we will expect to be compensated at our normal hourly rates for time
actually spent on your behalf in this matter.
50788419.2
Resolution No. 33-07 re: To Retain Bond Counsel for E911 Bond
RECORDS
Upon request, papers and property furnished by you will be returned promptly. Our own
files, including lawyer work product, pertaining to the transaction will be retained by us. For
various reasons, including the minimization of unnecessary storage expenses, we reserve the right
to dispose of any documents or other materials retained by us after the termination of this
engagement.
If the foregoing terms are acceptable to the Board, please approve this letter at an open
public meeting, and have two duplicate copies of this letter executed by the Chairman of the
Board, and approved by the Superior Court Judge, and return one original to me. Please retain one
original for the County's files. We look forward to working with you. Thank you.
FOSTER PEPPER PLLC
Lee Voorhees
50788419.2
Resolution No. 33-07 re: To Retain Bond Counsel for E911 Bond
The terms of engagement set forth herein are accepted and approved by the Board of County
Commissioners this _ day of April, 2007.
JEFFERSON COUNTY, WASHINGTON
By:
Chairman of the Board of County Commissioners
The firm accepts employment as bond counsel as of April 2, 2007, in accordance with the
provisions of the foregoing Engagement Letter which is Exhibit A to the approving resolution of
the Board of County Commissioners, which shall be a contract with the County when approved by
the Superior Court Judge.
FOSTER PEPPER PLLC
By
The foregoing contract is approved this _ day of April, 2007.
Judge of the Superior Court of the State of Washington for
Jefferson County
50788419.2
Resolution No. 33-07 re: To Retain Bond Counsel for E9l1 Bond
CERTIFICATION
I, the undersigned, Deputy Clerk of the Board of County Commissioners of Jefferson
County, Washington (the "County"), hereby certify as follows:
The attached copy of Resolution No. 83-0? (the "Resolution") is a full, true and correct
copy of a resolution duly passed at a regular meeting of the Board of County Commissioners on
April 2, 2007, as that resolution appears on the minute book of the County; and the resolution is
now in full force and effect.
2. A quorum of the Commissioners of the Board was present throughout the meeting and a
majority of those Commissioners present voted in the proper manner for the passage of the
Resolution.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of April, 2007.
BOARD OF COUNTY COMMISSIONERS
JEFFERSON COUNTY, WASHINGTON
~1~;; Cm(
ijtilie Matthes,
Deputy Clerk of the Board
50788419.2
~ F 0 S T E R PEP PER rLLe
Direct Phone (206) 447-8968
Direct Facsimile (206) 749-2025
E-Mail voorl@foster.com
April 2, 2007
Honorable Board of County Commissioners
Jefferson County
1820 Jefferson Street
P.O. Box 1220
Port Townsend, W A 98368
Re: Issuance of$2,555, 000 (est.) Limited Tax General Obligation Bonds, 2007
Honorable Commissioners:
We greatly appreciate the opportunity to again serve as bond counsel to Jefferson County,
Washington (the "County" or "Issuer"). The purpose of this engagement letter is to set forth
certain matters concerning our duties as bond counsel to the Issuer in connection with the
issuance of the above-referenced bonds (the "Bonds"). RCW 36.32.200 requires a written
contract of employment between the County's legislative authority and special counsel to be
executed by the parties, and approved by the presiding judge of the County. It is intended that
this writing shall constitute such written contract.
We understand that the Bonds will be issued to finance capital improvements for a 911
Dispatch Center. We also understand that the Bonds will be purchased at negotiated sale by
Martin Nelson & Company, (the "Purchaser").
SCOPE OF ENGAGEMENT
In this engagement, our duties as bond counsel include the following for the issuance of
the Bonds: (i) subject to the completion of proceedings to our satisfaction, render our legal
opinion (the "Bond Opinion") regarding the validity and binding effect of the Bonds, the source
of payment and security for the Bonds, and the excludability of interest on the Bonds from gross
income for federal income tax purposes; (ii) prepare and review documents necessary or
appropriate to the authorization, issuance and delivery of the Bonds, and coordinate the
authorization and execution of such documents; (iii) review legal issues relating to the structure
of the Bond issue; and (iv) review the section of the official statement, private placement
memorandum or other form of offering or disclosure document to be disseminated in connection
with the sale of the Bonds involving the federal income tax treatment of interest on the Bonds.
TEhi~2~.t4 7.4400 FAX 206.447,9700 1111 THIRD AVENUE, SUITE 3400 SEATTLE, WASHINGTON 981013299 WWWFOSTERCOM
SEATTLE WASHINGTON SPOKANE WASHINGTON PORTLAND OREGON
Honorable Board of County Commissioners
April 2, 2007
Page 2
Our Bond Opinion will be addressed to the Issuer and will be delivered by us on the date
the Bonds are exchanged for their purchase price (the "Closing"). The Bond Opinion will be
based on facts and law existing as of its date. In rendering our Bond Opinion, we will rely upon
the certified proceedings and other certifications of public officials and other persons furnished
to us without undertaking to verify the same by independent investigation, and we will assume
continuing compliance by the Issuer after the Bonds are issued with applicable laws relating to
such Bonds. During the course of this engagement, we will rely on the Issuer to provide us with
complete and timely information on all developments pertaining to any aspect of the Bonds and
their security. We understand that officials and employees of the Issuer will cooperate with us in
this regard.
ATTORNEY-CLIENT RELATIONSHIP
Upon execution of this engagement letter, the Issuer will be our client and an attorney-
client relationship will exist between us. In this transaction we represent only the Issuer, we are
not counsel to any other party, and we are not acting as an intermediary among the parties. Our
services as bond counsel regarding the Projects are limited to those contracted for in this letter.
The Issuer's execution of this engagement letter will constitute an acknowledgment of those
limitations. Our representation of the Issuer regarding the Projects will be concluded upon
issuance of the Bonds. Nevertheless, subsequent to Closing, we will mail the appropriate Internal
Revenue Service Form 8038, and prepare and distribute to the participants in the transaction a
transcript of the proceedings pertaining to the Bonds.
CONFLICTS
Bond Financing and Purchaser. Foster Pepper PLLC ("Foster Pepper") will represent
the Issuer as its bond counsel in connection with the Bonds. Foster Pepper presently represents
(and has from time to time represented) the Purchaser (including certain of its affiliates and
related entities) as underwriter's counsel on financings by other issuers. Our representation of
the Purchaser, however, is unrelated to the issuance of the Bonds. Foster Pepper will represent
the Issuer in negotiating a bond purchase agreement regarding the sale of the Bonds to the
Purchaser.
The Washington Rules of Professional Conduct prohibit an attorney, and all members of
that attorney's firm, from representing a client in a matter which is adverse to the interests of
another client of the firm. This is called a conflict of interest. The conflict of interest arises
because a lawyer has a duty of loyalty to every client, even if the lawyer is not representing the
client in a particular matter. Since Foster Pepper will be representing the Issuer as bond counsel
with regard to the Bonds and the Purchaser as special counsel, a conflict of interest is presented.
The Rules of Professional Conduct allow clients to waive conflicts of interest when: (a)
the lawyer reasonably believes the representation of the one client will not adversely affect the
relationship with the other client, and (b) all clients consent in writing after full disclosure of the
material facts. We have considered the conflicts presented here, and we believe that it is
appropriate to ask the Issuer to waive the conflicts. We have obtained a written waiver from the
50788371.1
Honorable Board of County Commissioners
April 2, 2007
Page 3
Purchaser for any conflicts that may arise from our representation of borrowers who borrow
money from the Purchaser or who issue bonds underwritten by the Purchaser.
The primary risk associated with waivers of conflicts of interest in circumstances like this
is the risk that confidential information of one client will be disclosed to the other client, to the
disadvantage of the first client. We believe that risk will not be present for the Issuer and the
Purchaser in this matter for the following reasons: (i) the Purchaser will be separately
represented by independent counsel, and (ii) material financial information learned about the
Issuer that the attorneys in our firm working on this transaction obtain, must in any event be
made available to the Purchaser under securities laws.
Another risk associated with waivers of conflicts of interest is the risk that a lawyer will
not zealously represent one client out of fear of offending another client. We assure you that we
will represent the Issuer's interests fully and to the best of our abilities. We anticipate that
issuance of the Bonds will proceed amicably and all parties will be satisfied with the results.
However, it is always possible that disputes or even litigation between the Issuer and/or the
Purchaser may arise in the future. In that event, we will not be able to represent any party in that
dispute.
Execution of this letter will confirm that the Issuer has consented to our representation of
the Purchaser consistent with the circumstances described in the foregoing paragraphs, and that
the Issuer has waived the conflicts of interest identified herein.
Regarding Other Foster Pepper Clients. Our firm represents many political subdivisions,
companies, financial institutions and individuals. It is possible that during the time that we are
representing the Issuer, one or more of our present or future clients will have transactions with
the Issuer. It is also possible that we may be asked to represent, in an unrelated matter, one or
more of the entities involved in the issuance of the Bonds. We do not foresee that any such
representation, if it occurs, will adversely affect our ability to represent the Issuer as provided in
this letter, either because such matters will be sufficiently different from the issuance of the
Bonds so as to make such representations not adverse to our representation of you, or because
the potential for such adversity is remote or minor and outweighed by the consideration that it is
unlikely that advice given to the other client will be relevant to any aspect of the issuance of the
Bonds. Execution of this letter will signify the Issuer's consent to our representation of others
consistent with the circumstances described in this paragraph. To the extent we believe any
future representation may adversely affect our representation of the Issuer, we will disclose such
representation to the Issuer and, if required by ethical rules, seek the appropriate Issuer consent.
5078837I.1
Honorable Board of County Commissioners
April 2, 2007
Page 4
FEES
Based upon: (i) our current understanding of the terms, structure, size and schedule of the
financing represented by the Bonds; (ii) the duties we will undertake pursuant to this engagement
letter; (iii) the time we anticipate devoting to the financing; and (iv) the responsibilities we will
assume in connection therewith, our fee (including out-of-pocket costs) will be $10,400. Our
fees may increase if: (a) material changes in the structure, size or schedule of the financing occur
(e.g., the addition of a refunding or defeasance component to the Bonds); or (b) unusual or
unforeseen circumstances arise that require a significant increase in our time or responsibility.
If, at any time, we believe that circumstances require an adjustment of our fee, we will advise
you. Our fee will be paid at the time of Closing of the Bonds. The Board hereby authorizes the
Purchaser to deduct such fee from the price paid to the Issuer for the Bonds and to pay such fee
directly to us via wire transfer. The Board consents to payment of our fee in this manner.
Payment of our fee is contingent on a successful Closing. If for any reason, however, the
financing represented by the Bonds is completed without the delivery of our Bond Opinion as
bond counsel, or our services are otherwise terminated, we will expect to be compensated at our
normal hourly rates for time actually spent on your behalf in this matter.
RECORDS
Upon request, papers and property furnished by you will be returned promptly. Our own
files, including lawyer work product, pertaining to the transaction will be retained by us. For
various reasons, including the minimization of unnecessary storage expenses, we reserve the
right to dispose of any documents or other materials retained by us after the termination of this
engagement.
If the foregoing terms are acceptable to the Board, please approve this letter at an open
public meeting, and have two duplicate copies of this letter executed by the Chairman of the
Board, and approved by the Superior Court Judge, and return one original to me. Please retain
one original for the County's files. We look forward to working with you. Thank you.
S078837U
Honorable Board of County Commissioners
April 2, 2007
Page 5
The terms of engagement set forth herein are accepted and approved by the Board of County
Commissioners this ~ day of April, 2007.
SHINGTON
By:
The firm accepts employment as bond counsel as of April 2, 2007, in accordance with the
provisions of the foregoing Engagement Letter which is Exhibit A to the approving resolution of
the Board of County Commissioners, which shall be a contract with the County when approved
by the Superior Court Judge.
FOSTER PEPPER P
By
The foregoing contract is approved this 2- day of April, 2007.
e uperior Court of
for Jefferson County
50788371.1
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.::1 ..8"5; i;; The Bonds are offered by Martin Nelson & Co., Inc., the Underwriter, when, as and if issued, subject to the final approving legal
~ -9 ~ i2 opinion of Foster Pepper PLLC of Seattle, Washington, Bond Counsel. It is anticipated that the Bonds will be ready for delivery
c;., ~ ;0... ~ through DTC by Fast Automated Securities Transfer on or about May I, 2007.
...."1:l ;:: <:>
~ ~ ~ ~ This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to
.;: ~ - ~ the making of an informed investment decision.
Iii: \,,) :...........
~ ~ ~.~ *Preliminary, subject to change.
Q., J5 l:: 'E:
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E::~'o--~
"
..
PRELIMINARY OFFICIAL STATEMENT (Dated March 21, 2007)
INSURANCE: "Applied For"
NEW ISSUE - "BANK QUALIFIED" STANDARD & POOR'S RATING: "Applied For"
BOOK-ENTRY ONLY STANDARD & POOR'S UNDERLYING RATING: "Applied For"
In the opinion of Bond Counsel, under existing federal law and assuming compliance with applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code'), that
must be satisfied subsequent to the issue date of the Bonds, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for
purposes of the alternative minimum tax applicable to individuals. However, while interest on the Bonds also is not an item of tax preference for purposes of the alternative minimum tax
applicable to corporations, interest on the Bonds received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax
applicable to corporations, interest on the Bonds received by certain S corporations may be subject to tax, and interest on the Bonds received by foreign corporations with United States
branches may be subject to a foreign branch profits tax. Receipt of inter est on the Bonds may have other federal tax consequences for certain taxpoyers_ See the captions "Tax Exemption"
and "Certain Other Federal Tax Consequences_ "
$2,555,000*
JEFFERSON COUNTY, WASHINGTON
LIMITED TAX GENERAL OBLIGATION BONDS, 2007
DATED: Date ofInitial Delivery DUE: December 1. as shown below
Jefferson County, Washington, (the "County"), Limited Tax General Obligation Bonds, 2007 (the "Bonds") will be issued in fully
registered form in the denomination of $5,000 each or integral multiples thereof within a single maturity. The Bonds will be registered
in the name of Cede & Co., as bond owner and nominee for The Depository Trust Company ("DTC"). DTC will act as securities
depository for the Bonds. Purchasers will not receive certificates representing their interest in the Bonds purchased. Interest on the
Bonds will be paid on December 1, 2007 and semiannually thereafter on December 1 and June 1 of each year to the maturity or earlier
redemption of the Bonds, Principal of and interest on the Bonds will be payable by the fiscal agent of the State of Washington in New
York, New York, currently The Bank of New York, New York, New York, as further described herein. For so long as the Bonds
remain in a "book-entry only" transfer system, the fiscal agent will make such payments only to DTC, which will in turn remit such
principal and interest to the DTC Participants for subsequent disbursement to Beneficial Owners of the Bonds as further described
herein in Appendix B.
MATURITY SCHEDULE *
Due
Dec. 1
2007
2008
2009
2010
2011
2012
2013
Interest
Rate
%
Due
Dec. 1
2014
2015
2016
2017
2018
2019
2020
2021
Interest
Rate
%
Amount
$125,000
90,000
95,000
95,000
100,000
105,000
110,000
Price
CUSIP
Amount
$110,000
115,000
120,000
125,000
130,000
135,000
140,000
145,000
Price
CUSIP
$815,000 Term Bonds due December 1, 2026, _% (priced at
The Bonds maturing on or after December 1, 2017 are issued with the right or option of the District to redeem the Bonds prior to their
stated maturity dates. See the heading "DESCRIPTION OF THE BONDS -- Redemption of Bonds Prior to Maturity" herein.
The County has designated the Bonds as "Qualified Tax-Exempt Obligations" for banks, thrift institutions and other financial
institutions. See the heading "UNDERWRITING AND LEGAL -- Tax Exemption" herein.
Payment of the principal of and interest on the Bonds when due will be insured by a financial guaranty insurance policy to be issued by
simultaneously with the delivery of the Bonds. See the heading "MUNICIPAL BOND INSURANCE"
herein,
For as long as any of the Bonds are outstanding, the County has irrevocably pledged to budget and levy taxes annually within the
constitutional and statutory tax limitations provided by law without a vote of the electors of the County on all taxable property within
the County in an amount sufficient, together with other money of the County legally available for such purposes, to pay when due the
principal and interest on the Bonds, . The full faith, credit and resources of the County have been pledged irrevocably for the annual
levy and collection of those taxes and the prompt payment of that principal of and interest on the Bonds. The Bonds do not constitute a
debt or indebtedness of the State of Washington or any political subdivision thereof other than the County, See the heading
"SECURITY" herein.
.
Martin
Nelson &
Company
I
I
I
I
No dealer, broker, sales representative or other person has been authoriz~d by the County or Martin Nelson & Co., Inc. (the
"Underwriter") to give any information or to make any representations 'ith respect to the Bonds other than those contained
herein and, if given or made, such other information or representations ust not be relied upon as having been authorized by
any of the foregoing. This Official Statement does not constitute an 0 er to sell or the solicitation of an offer to buy, nor
shall there be any sale of the Bonds by any person, in any juI'isdiction i which it is unlawful for such person to make such
offer, solicitation or sale.
...
..
The information set forth herein has been obtained from County officials and other sources, which are believed to be reliable,
but is not guaranteed as to accuracy or completeness, and is not to be co strued as a representation, by the Underwriter. The
information and expression of opinions herein are subject to change wi hout notice and neither the delivery of this Official
Statement nor any sale made hereunder shall, under any circumstances, reate any implication that there has been no change
in the affairs of the County or any other person described herein since the date thereof.
In connection with the offering of the Bonds, the Underwriter may effe t transactions that stabilize or maintain the market
price of such Bonds at a level above that which might otherwise prevail . n the open market. Such stabilizing, if commenced,
may be discontinued at any time.
The Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon a specific exemption
contained in such act. The exemption from registration or quali lcation of the Bonds cannot be regarded as a
recommendation thereof. No state or any of their agencies have passe upon the merits of the Bonds nor the accuracy or
completeness of this Official Statement. Any representation to the contr may be a criminal offense.
The CUSIP numbers are included on the cover of this Official Statement I for convenience of the holders and potential holders
of the Bonds. No assurance can be given that the CUSIP numbers for the Bonds will remain the same after the date of
issuance and delivery of the Bonds. I
ii
JEFFERSON COUNTY, WASHINGTON
1820 Jefferson Street
PO Box 571
Port Townsend, W A 98368
Phone: (360) 385-9154
Fax: (360) 385-9149
Board of County Commissioners
Phil Johnson (Chairman)
David W. Sullivan
John Austin
District No.1
District No.2
District No.3
County Officials
John F. Fischbach
JudiMorris
Ruth Gordon
Jack Westerman 1II
Donna M. Eldridge
Mike Brasfield
County Administrator
Treasurer
County Clerk
Assessor
Auditor
Sheriff
Bond Counsel
B0 FOSTER PEPPER
Foster Pepper PLLC
Seattle, Washington
Underwriter
.~ Martin
~... Nelson &
Company
Public Finance Department
Seattle, Washington
iii
TABLE OFCONTE~TS
SUMMARY STATEMENT................................. ............................. ............... ........................ '" .............. ....... .... v
INTRODUCTION ......................,...................................................... .......... ..... ........... ................................. ........ 1
DESCRIPTION OF THE BONDS ................................................... ....................................................,..............1
Principal Amount, Dates, Interest Rates and Maturities ................. ...................................................................1
Registration Features and Fiscal Agent .............,............................ ...................................................................1
Authorization of Issuance......................................................... ..... .~........... ........................... ............................. 1
Redelllption of Bonds.................,....... .............. .............,..... ..... .... ..~....... .... ......................................... ...............2
Notice of Redemption............................... ...................................... J... ........... .................................... ..........,......2
I
Open Market Purchase................................... .......... ............... ......... ......... .......................................................... 2
Book-Entry Bonds.. ....... ...... .................... ........................ .......... ..... ... ............ ...... .............. ................. ...............2
PURPOSE AND USE OF PROCEEDS .........,.....,........................... ...................................................................3
Purpose.............................. .......... ......................................... .......... ............. ................. ........ ....... ...................,.. 3
Sources and Uses of Funds........................ ........,.......................................................... .................. ........ ............3
Debt Payment Record ...... ................ ........... ............................. ............... .............................. ................,....... ......3
Future Financings ......... .......,.......................................................... ....,....... ....... .........................,............,. ........ 3
MUNICIPAL BOND INSURANCE.............,.......................... ,..... ........ ...... ..................... ....... ....... .........................3
SECURITy...... ..........................,...........,..,......................................... +......... .....................................................,... 3
INITIATIVES,.,.......,.........,...........,.............,.,................. ........... ..... ...1................. .......................... ........................4
COUNTY DEBT AND TAX LIMITATIONS .................................................................. .................,.......... ....... 4
General Obligation Debt and Taxing Powers .....................................................................................................4
Debt Limitation and Outstanding Indebtedness .................... .................,............... ,......................................,..... 4
COMPUTATION OF STATUTORY DEBT CALCULATION......................................,................................. 6
ESITMA TED DEBT SERVICE SCHEDULE ..., ............................................,........................................,..........7
TAX VALUATION AND COLLECTIONS ..,.......,.........................+.................................................................. 8
Assessed Va1uation Detennination...,. ...................,....................... .f... ......................................... ...................... 8
Tax Collection Procedure..,..........".......................,........... ..........., .f... .... ............,.................... ......................,... 9
Collection of Other Taxes........ ,.... ...,....."................................ ......+...,.......................... ................................ ,. 10
TH~e~~~~~::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::r:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: ~;
Government Organization..,...... .....,... ............................... ............... ,............ ................ ....... ............................ 12
Labor Relations....,...................................,... ................. ........... ........ .......,..... ................................................... 12
Pension System........ ............................ .......................... ........... ....... .... ...... ..........,........................................... 13
~~::r:c~~~ i~i~~~i~~.::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::f:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: ~;
Authorized Investments.................. ... ........................... ................... . ........ ....................................................... 14
Local Government Investment Pool................................................ .............. .................................................. 14
Authorized Investments for Bond Proceeds ...................................+...............................................................15
FINANCIAL STATEMENTS..... .................................... ........ ...........' .. ............... ............. ........ ..... .............. ....... 16
ECONOMIC AND DEMOGRAPHIC INFORMA nON ............... ................................................................ 20
UNDERWRITING AND LEGAL.... ......................... ...... .".. .............. ......... ................................... .... ............,...22
Underwriting Agreement... .......,....... ........................... .,.... .............. .... .......,. ...... ...................... ....................... 22
Description of Ratings ................................................ ... ....... ....... ..... '" ............ ................,.,..............................22
Absence of Material Litigation........... ..... ....................,...... ......... .... ........ ................. ...... ................ ................. 22
Legal Opinion............... .......... .................,........... .......... .......... ......... ..... ....................... ........ ....... ...... ....... ........ 22
Conflicts of Interest... ............................................ ....... ........... .... ..... .......... .......,.. ........... .......... .... ................... 22
Tax Exelllption.......... ........ ........................... ...,.,.......... ......... ..... ..... .1.........., ......... ........ ..... ............... ................23
Certain Other Federal Tax Consequences................ ...... ........ ........ ..;...... ............. ....... .................. ........ ............23
Undertaking to Provide Continuing Disclosure ....... .......................... ..................,............................................. 24
Miscellaneous...... .............. ..................... ..............,...... ......... ........... ......... ....................................................,.. 25
Preliminary Official Statement.... ......,.....................,.... .............., .... ... .................... ............. ............................25
Official Statement Certificate....... ................. ..... ......... .......... ........... ........ .............,..... ...... ............................... 25
FORM OF THE LEGAL OPINION ................................................. ................................................Appendix A
BOOK-ENTRY ONLY SySTEM.......... ..... ........ .....,..... .................... ......... ............... ............. ....... .... Appendix B
AUDIT REPORT .......,.... ...................... ......, ..................... ,;.. ...... ........ ...... ... ..... .... ........... ............. ......Appendix C
iv
SUMMARY STATEMENT
THE FOLLOWING SUMMARY STATEMENT IS FURNISHED SOLELY TO PROVIDE LIMITED INTRODUCTORY
INFORMATION REGARDING THE TERMS OF THE BONDS AND DOES NOT PURPORT TO BE
COMPREHENSIVE. ALL SUCH INFORMATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MORE DETAILED DESCRIPTION APPEARING IN THE OFFICIAL STATEMENT. THE OFFERING OF THE BONDS
TO POTENTIAL INVESTORS IS MADE ONLY BY MEANS OF THE ENTIRE OFFICIAL STATEMENT.
The Bonds:
Purpose:
Optional
Redemption:
Mandatory
Redemption:
Security:
Tax Exemption:
The Bonds are being issued by Jefferson County, Washington, in the aggregate principal amount of
$2,555,000* and are dated their date of initial delivery. The Bonds will mature on the dates, in the
principal amounts and at the respective rates per annum set forth on the cover of this Official Statement.
Interest on the Bonds will be payable on December 1, 2007 and semiannually thereafter on December 1 and
June 1 to maturity or earlier redemption of the Bonds. The Bonds initially will be issued in book-entry
form in the denominations of $5,000 or any integral multiples thereof within a single maturity. See the
heading "DESCRIPTION OF BONDS -- Principal Amount, Date, Interest Rate and Maturities" herein.
Proceeds of the Bonds will be used to ffiance capital improvements for a 911 Dispatch Center. In addition,
a portion of the proceeds of the Bonds will be used to pay the costs of issuance of the Bonds. See the
heading "PURPOSE AND USE OF PROCEEDS" herein.
The County reserves the right and option to redeem the Bonds maturing on or after December 1,2017*,
prior to their stated maturity dates at any time on or after June 1, 2017*, as a whole or in part (within one
or more maturities selected by the County and randomly within a maturity in such manner as the Bond
Registrar shall determine) at par plus accrued interest to the date fixed for redemption. See the heading
"DESCRIPTION OF THE BONDS--Redemption of Bonds Prior to Maturity" herein.
In addition to optional redemption, the Bonds maturing on December 1,2026* are Term Bonds and if not
previously redeemed as described above or purchased under the provisions set forth in the Bond
Resolution, the Term Bonds will be called for mandatory sinking fund redemption at a price of par, plus
accrued interest on December.l in the years and amounts as set forth in the schedule herein under the
heading "DESCRIPTION OF THE BONDS -- Redemption of Bonds Prior to Maturity."
For as long as any of the Bonds are outstanding, the County has irrevocably pledged to budget and levy
taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the
electors of the County on all taxable property within the County in an amount sufficient, together with
other money of the County legally available for such purposes, to pay when due the principal and interest
on the Bonds. The full faith, credit and resources of the County have been pledged irrevocably for the
annual levy and collection of those taxes and the prompt payment of that principal of and interest on the
Bonds. The Bonds do not constitute a debt or indebtedness of the State of Washington (the "State") or any
political subdivision thereof other than the County. See the heading "SECURITY" herein.
In the opinion of Bond Counsel, under e-xisting federal law and assuming compliance with applicable
requirements of the Code that must be satisfied subsequent to the issue date of the Bonds, interest on the
Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference
for purposes of the alternative minimum tax applicable to individuals. However, while interest on the
Bonds also is not an item of tax preference for purposes of the alternative minimum tax applicable to
corporations, interest on the Bonds received by corporations is taken into account in the computation of
adjusted current earnings for purposes of the alternative minimum tax applicable to corporations, interest
on the Bonds received by certain S corporations may be subject to tax, and interest on the Bonds received
by foreign corporations with United States branches may be subject to a foreign branch profits tax. Receipt
of interest on the Bonds may have other federal tax consequences for certain taxpayers. See the heading
"UNDERWRITING AND LEGAL -- Tax Exemption" and "Certain Other Federal Tax Consequences"
herein.
*Preliminary, subject to change
v
Bank Qualified
Obligations:
Ratings:
Insurance:
I
The County ha, de,igoated the Bond, :.. '.quali lod tax-exempt obligation," fo, certain fmanei.1
institutions. See the heading "UNDERWRITING A~ LEGAL -- Tax Exemption" herein.
I
Standard & Poor's Ratings Services has assigned a rting of" " with the understanding that upon
delivery of the Bonds a policy insuring the payment w en due of the principal of and interest on the Bonds
will be issued by . The County has also received an underlying rating of
"_" from Standard & Poor's. The ratings reflect otuY the view of the rating agency and an explanation
of the significance of the ratings may b~ obtained from the rating agency. There
is no assurance that the ratings will be retained forl an iven period of time or that the ratings will not be
revised downward or withdrawn entirely bY. the rating gency if, in its judgment, circumstances so warrant.
Any such downward revision or withdrawal of the ra . gs will be likely to have an adverse effect on the
market price of the Bonds. See the heading "UN DE RITING AND LEGAL -- Description of Ratings"
herein. I
I
Payment of the principal of and interest on the Bon~ when due will be insured by a financial guaranty
insurance policy to be issued by ; simultaneously with the delivery of
the Bonds. See the heading "MUNICIPAL BOND IN URANCE" herein.
VI
OFFICIAL STATEMENT
JEFFERSON COUNTY, WASHINGTON
$2,555,000*
LIMITED TAX GENERAL OBLIGATION BONDS, 2007
INTRODUCTION
Jefferson County, Washington, a public body corporate duly organized and existing under and by virtue of the laws of the
State, furnishes this Official Statement in connection with the offering of $2,555,000* principal amount of its Limited Tax
General Obligation Bonds, 2007. This Official Statement, which includes the cover page and appendices, provides
information concerning the County and the Bonds.
DESCRIPTION OF THE BONDS
Principal Amount, Dates, Interest Rates and Maturities
The Bonds will be issued in the aggregate principal amount of $2,555,000* and will be dated and bear interest from their date
of initial delivery. The Bonds will mature on the dates and in the principal amounts and will bear interest (payable
commencing on December 1, 2007, and semi-annually thereafter on each December I and June 1) at the respective rates set
forth on the cover of this Official Statement, until maturity or earlier redemption of the Bonds. Interest on the Bonds will be
calculated on the basis of a 360-day year consisting of twelve 30-day months. Principal of and interest on the Bonds will be
payable in lawful money of the United States of America.
Registration Features and Fiscal Agent
The Bonds will be fully registered as to both principal and interest, and will be in the denomination of $5,000 each or any
integral multiple thereof within a single maturity. The Bonds, when issued, will be registered in the name of Cede & Co., as
registered owner and nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as
securities depository for the Bonds. Individual purchases may be made in book-entry form only. Purchasers will not receive
certificates representing their interest in the Bonds purchased. So long as Cede & Co. is the registered owner of the Bonds,
as nominee of DTC, references herein to registered owners or bond owners will mean Cede & Co. and will not mean the
"Beneficial Owners" of the Bonds. In this Official Statement, the term "Beneficial Owner" will mean the person for whom a
DTC participant acquires an interest in the Bonds.
Principal of and interest on the Bonds will be payable by the State fiscal agent in New York, New York, currently The Bank
of New York (or such other fiscal agency or agencies as the Jefferson County Treasurer (the "Treasurer") may from time to
time designate). So long as Cede & Co. is the registered owner of the Bonds, principal of and interest on the Bonds are
payable by wire transfer by the State fiscal agency to DTC, which, in turn, is obligated to remit such principal and interest to
the DTC participants for subsequent disbursement to Beneficial Owners of the Bonds, as further described under "Book-
Entry Only System" in Appendix B.
Authorization of Issuance
The Bonds are being issued pursuant to Resolution No. _ (the "Bond Resolution"), adopted on ,2007 by the
Board of County Commissioners (the "Board") under and in accordance with the Constitution and the laws of the State and
the authority of chapters 39.36, 39.46, and 39.53 Revised Code of Washington ("RCW"). Capitalized terms used herein, if
not specifically defined herein, are used as dermed in the Bond Resolution.
*Preliminary, subject to change
1
Redemption of Bonds I
Ovtional Redemption. The County reserves the right and optiion to rede m Bonds maturing on or after December 1,2017*,
prior to their stated maturity dates at any time, on or after June. 1, 2017*, as a whole or in part (within one or more maturities
selected by the County and randomly within a maturity in such manne as the Bond Registrar shall determine), at par plus
accrued interest to the date fixed for redemption. I
Mandatory Redemption. If not previously rede emedas describ.ed above~r purchased in the open market under the provisions
set forth in the Bond Ordinance, the Term Bonds due on December 1,2 26* will be called for redemption randomly (in such
manner as the Bond Registrar shall determine) at a price of par, plus accrued interest, on December 1 in the years and
amounts as follows: . I.
2026 Term Bond
I
Mandatory Sinking Fund Ma datory Sinking Fund
Redemption Dates* R de tion Amounts*
2022 $150,000
2023 155,000
2024 165,000
2025 170,000
2026 (Final Maturity) 175,000
Partial Redemption. Portions of the principal amount of any Bond,' installments of $5,000 or any integral multiple of
$5,000, may also be redeemed. If less than all of the principal amoun of any Bond is redeemed, upon surrender of such
Bond at either of the principal corporate trust offices of the Bond Regi trar, there shall be issued to the Registered Owner,
without charge therefor, for the then unredeemed balance of the principal amount thereof, a new Bond or Bonds, at the option
of the registered owner, with like maturity and interest rate, in any denon1IDation authorized by the Bond Resolution.
I
Notice of Redemption
The Bond Registrar shall give, or cause to be given, notice of a call tl r redemption of any Bonds in accordance with the
Letter of Representations. Notice of any such redemption will be given not less than 30 nor more than 60 days prior to the
date fixed for redemption by fITst-class mail, postage prepaid, to the re istered owner of each Bond to be redeemed at the
address appearing on the Bond Register on the day notice is mailed. The actual receipt by the registered owner of such notice
of redemption shall. not be a condition precedent thereto and neither th failure to receive nor a defect in such notice shall
affect the validity of the proceedings for redemption. ,
I
I
Open Market Purchase I
The County reserves the right and option to purchase any or all of the B nds in the open market at any time and at any price, .
plus accrued interest to the date of purchase. All Bonds so pUIlChased wil be canceled.
Book-Entry Bonds
DTC will act as securities depository for the Bonds, The ownership 0 one fully registered Bond for each maturity of the
Bonds, as set forth on the cover of this Official Statement, each in the tgregate principal amount of such maturity, will be
registered in the name of Cede & Co., as nominee for DTC. See Ap endix B attached hereto for additional information
regarding the Book-Entry System.
Procedure in the Event of Revisions of Book-Entry Transfer Svstem. f DTC resigns as the securities depository and the
County is unable to retain a qualified successor to DTC, or the County has determined that it is in the best interest of the
County not to continue the book-entry system of transfer or that intere of the Beneficial Owners of the Bonds might be
adversely affected if the book-entry system of transfer is continued, the County will execute, authenticate and deliver at no
cost to the Beneficial Owners of the Bonds or their nominees, Bonds in ly registered form, in the denomination of $5,000
or any integral multiple thereof within a maturity. In the event the Bo ds are transferred by the County to fully registered
*Preliminary, subject to change
2
form, the Bonds may be payable by the Bond Registrar, The Bank of New York, New York. Thereafter, the principal of the
Bonds will be payable upon due presentment and surrender thereof at the principal office of the Bond Registrar; interest on
the Bonds will be payable by check or draft mailed or by electronic transfer on the interest payment date (electronic transfer
will be made only if so requested in writing and if costs of such electronic transfer will be paid by the requesting registered
owner) to the persons in whose names such Bonds are registered, at the address appearing upon the registration books on the
15th day of the month preceding the interest payment date, and the Bonds will be transferable as provided in the Bond
Resolution.
PURPOSE AND USE OF PROCEEDS
Purpose
Proceeds of the Bonds will be used to fmance capital improvements for a 911 Dispatch Center. In addition, a portion of the
proceeds of the Bonds will be used to pay the costs of issuance of the Bonds.
Sources and Uses of Funds
The proceeds of the Bonds are estimated to be applied as follows:
Sources of Funds:
Par Amount of Bond Issue
Net Original Issue Premium/(Discount)
Net Sources of Funds
$
$
*
*
$
*
Uses of Funds:
Deposit to Project Account
Costs ofIssuance (1)
Net Uses of Funds
$
$
*
*
$
*
(J) Includes Underwriter's discount, Bond Counsel fee, bond insurance premium, bond rating fee, and Official Statement
printing and mailing.
Debt Payment Record
The County has always promptly met principal and interest payments on outstanding bonds, notes and warrants when due.
Additionally, no refunding bonds have been issued for the purpose of preventing an impending default.
Future Financings
The County has no plans to issue general obligation bonds in the next 12 months.
MUNICIPAL BOND INSURANCE
{Applied For}
SECURITY
For as long as any of the Bonds are outstanding, the County has irrevocably pledged to budget and levy taxes annually within
the constitutional and statutory tax limitations provided by law without a vote of the electors of the County on all taxable
property within the County in an amount sufficient, together with other money of the County legally available for such
purposes, to pay when due the principal and interest on the Bonds. The full faith, credit and resources of the County have
been pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal of and
interest on the Bonds. The Bonds do not constitute a debt or indebtedness of the State or any political subdivision thereof
other than the County.
*Preliminary, subject to change
3
Limitation on Sources of Payment for tbe Bonds
Limited tax general obligation bonds, such as the Bonds, are payable s ely from amounts in the County's Current Expense
Fund, together with any other money of the County legally available to pay debt service on such bonds. The County is not
authorized to levy any additional or excess tax for purposes of repaying i s limited tax general obligation bonds. The primary
source of funds to repay such bonds are the County's regular property tax and various excise taxes, to the extent not paid
from other sources. See "The Bonds - Property Tax Levy Procedure" he ein for a discussion of the County's regular property
tax collection procedures. Because regular property tax revenues are us' d to operate County government, a pledge to repay
limited tax general obligation bonds directly affects a County's operatin budget. Consequently, any money budgeted to pay
debt service on limited tax general obligation bonds is necessarily div rted from other County services. (See "COUNTY
DEBT AND TAX LIMITATIONS -- Property Tax Levy Limitations" he ein.)
INITIATIVES
i
General I
i
Under the State constitution, the voters of the state have the ability t~initiate legislation and to modify existing statutes
through the powers of initiative and referendum. Initiatives and refer nda are submitted to the voters upon receipt of a
petition signed by at least eight percent (initiatives) and four percent (refi renda) of the number of voters registered and voting
for the office of Governor at the preceding regular gubernatorial election~AnY law approved in this manner by a majority of
the voters may not be amended or repealed by the legislature within a p riod of two years following enactment, except by a
vote of two-thirds of all the members elected to each house of the legisla e, but thereafter is subject to amendment or repeal
by the legislature in the same manner as other laws. i
i
COUNTY DEBT AND TAX LIl~lITATIONS
i
I
The power of the County to contract debt of any kind is controlled and limited by State law. All debt must be set forth in
accordance within detailed budget procedures and paid for out of idenffiable receipts and revenues. The budget must be
balanced for each fiscal year. It is unlawful for an officer or employee of the County to incur liabilities in excess of
budgetary appropriations. i
Jefferson County, Wasbi~gton
Historical Current Expense and Road pistrict Levy Rates
i
Ro,d District
!&!I
1.2444
1.3049
1.2991
11.3429
11.4197
i
i
I
The principal of and interest on limited tax general obligations, such as th~ Bonds, must be paid from these taxes unless funds
are available from other sources. r
Debt Limitations and Outstanding Indebtedness 1
Without voter approval, the County may incur indebtedness for general ounty pwposes in an amount not to exceed 1.50%
of the assessed value of all taxable property within the County. With vdter approval, the County may incur indebtedness in
an amount not to exceed 2.50% of the County's assessed value. Such lJ9nds require an approving vote, and any election to
validate general obligation bonds must have a voter turnout of at leaS140% of those who voted in the last State general
election. Of those voting, 60% must vote in the atrmnative. No combi ation oflimited or unlimited tax bonds may exceed
2.50% of the assessed valuation.
General Obligation Debt and Taxing Powers
Collection
Year
2007
2006
2005
2004
2003
Current Expense
!&!I
$1.5225
1.6191
1.7801
1.8192
1.8904
Source: Washington State Department of Revenue
4
Combined
!&!I
$2.7669
2.9240
3.0792
3.1621
3.3101
The County currently has limited tax general obligation debt outstanding (including bonds, leases, installment purchase
contracts and other forms of debt) in the principal amount of $4,820,000. The County currently has no outstanding unlimited
tax general obligation debt. When the Bonds are issued, the County will have limited tax general obligation debt outstanding
in the principal amount of approximately $7,375,000.
5
2007 Assessed Valuation ("A V") (1)
I
I
I
Jefferson County, WaShingtonl
Computation of Statutory Debt Limitations
(as of March 21, 2007) !
I
I
$ 4,096,006,237
Limited Tax General Obligation Debt Capacity (Non-Voted):
Limited Tax General Obligation Debt Capacity (1.50% of A V)
Less: Outstanding Limited Tax General Obligation Debt (2)
Less: This Issue Limited Tax General Obligation Bonds
Remaining Non-Voted General Obligation Debt Capacity
$ 61,440,094
(4,820,000)
(2,555,000) *
$ 54,065,094
Percent of Limited Tax Debt Capacity Used
12.00%
Unlimited Tax General Obligation Debt Capacity (Voted):
Total General Obligation Debt Capacity (2.50% of A V)
Less: Outstanding Unlimited Tax General Obligation Debt
Less: Outstanding Limited Tax General Obligation Debt (2)
Less: This Issue Limited Tax General Obligation Bonds .l
Remaining General Obligation Debt Capacity (Voted and Non-Votj)
i
Percent of Total Debt Capacity Used I
Net Direct and EstimatedOverlappi~ Debt
$ 102,400,156
(4,820,000)
(2,555,000) *
$
95,025,156
7.20%
Net Direct Debt:
Outstanding General Obligation Debt:
Outstanding Unlimited Tax General Obligation Debt
Outstanding Limited Tax General Obligation Debt a)
This Issue of Limited Tax General Obligation Bonds
Total Net Direct Debt
$
4,820,000
2,555,000 *
$ 7,375,000
$ 2,207,401
6,850,000
7,555,063
865,000
17,950,000
$ 35,427,463
$ 42,802,463
Estimated Overlapping Debt:
City of Port Townsend
Port of Port Townsend
Hospital District No.2
Fire Districts
School Districts
Total Estimated Overlapping Debt
Total Net Direct and Estimated Overlapping Debt
Bonded Debt Ratios
2007 Assessed Valuation ("A V") (1)
Estimated 2007 Population
Ratio of: j
Net Direct Debt to Assessed Value .
Net Direct Debt and Estimated Overlapping Debt to Assessed Val e
Per Capita: I
Net Direct Debt I
Net Direct Debt and Estimated Overlapping Debt I
Assessed Value i
(1) For 2007 tax collections. assessed value usedfor regular levies Jus TA Y.
(2) Consists of the County's outstanding 1998 LTGO RefUnding Bo;~ in the principal amount of$1.215.000
and the 2003 LTGO Bonds in the principal amount of$3.605,000,
$ 4,096,006,237
28,500
0.18%
1.04%
$
$
$
259
1,502
143,720
Source.- Jefferson County Assessors and Treasurers Office
*Preliminary, subject to change
6
Jefferson County, Washington
Estimated Debt Service Requirements
(For Year Ending December 31)
Outstandin~ Debt Service
Limited Tax G.O. Bonds (1) Total
Year Principal Interest Debt Service
2007 $ 465,000 $ 189,790 $ 654,790
2008 485,000 174,620 659,620
2009 500,000 157,485 657,485
2010 520,000 139,195 659,195
2011 415,000 119,380 534,380
2012 425,000 109,160 534,160
2013 300,000 86,115 386,115
2014 315,000 73,965 388,965
2015 325,000 60,893 385,893
2016 340,000 47,080 387,080
2017 355,000 32,120 387,120
2018 375,000 16,500 391,500
2019
2020
2021
2022
2023
2024
2025
2026
This Bond Issue
Limited Tax G.O. Bonds *
Principal * Interest * Total *
$ 125,000 $ 57,958 $ 182,958
90,000 94,744 184,744
95,000 91,414 186,414
95,000 87,890 182,890
100,000 84,356 184,356
105,000 80,626 185,626
1 10,000 76,699 186,699
110,000 72,552 182,552
115,000 68,383 183,383
120,000 63,990 183,990
125,000 59,370 184,370
130,000 54,520 184,520
135,000 49,437 184,437
140,000 44,131 184,131
145,000 38,601 183,601
150,000 32,845 182,845
155,000 26,800 181,800
165,000 20,553 185,553
170,000 13,904 183,904
175,000 7,053 182,053
$ 2,555,000 $ ],125,819 $ 3,680,819
Total $ 4,820,000 $ 1,206,303 $ 6,026,303
(1) Includes the County's outstanding 1998 LTGO Refunding Bonds in the principal amount 01$1,215,000
and the 2003 LTGO Bonds in the principal amount 01$3,605,000.
Property Tax Levy Limitations
Total
Combined
Debt Service
$ 837,748
844,364
843,899
842,085
7]8,736
719,786
572,814
571,517
569,275
57] ,070
57],490
576,020
184,437
184,131
183,60]
182,845
181,800
185,553
183,904
182,053
$ 9,707,12]
The Bonds are secured, in part, by money received by the County from its regular property tax levy. There is no authority for
the County to levy taxes in excess of the regular property tax levy to pay the principal of and interest on the Bonds. Non-
voted regular property tax levies are subject to four limitations more specifically described below. Regular property tax levy
receipts may be used for the payment of the principal of and interest on non-voted general obligations for any lawful County
purpose. Under existing laws and circumstance, none of the property tax limitations presently affect the ability of the County
to levy regular property taxes at rates sufficient to pay the debt service on its outstanding obligations. Information relating to
regular property tax limitations is based on currently existing statutes, constitutional provisions and circumstances. Changes
in the same could alter adversely the impact of other interrelated tax limitations on the County.
Countv Maximum Rate Limitations. In the State of Washington, a county may levy taxes at a maximum rate of $1.80 per
$1,000 of assessed value against all the real and personal property in the county subject to taxation for general county
purposes, including the payment of principal of and interest on bonds issued by the county without a vote of the people, such
as the Bonds. This rate, however, can be increased to a rate not to exceed $2.475 per $1,000 of assessed value for general
county purposes if the total levies for both the county and any road district within the county do not exceed $4.050 per $1,000
of assessed value and no other taxing district has its levy reduced as a result of the increased county levy. The County's 2007
combined regular property tax levy is $2.7669 per $1,000 of assessed value.
The 101% Limitation. Chapter 84.55 RCW places a limitation on the amount of tax levies by individual taxing districts,
including the County, defmed by a statutorily defined "limit factor". All municipal "regular property tax" levies are subject
*Preliminary, subject to change
7
to this limitation. The law limits a municipality's regular tax levy to an amount equal to the highest property tax levy of the
three most recent years multiplied by a "limit factor" plus a full value djustment for new construction. Substantively, this
means that the regular property tax levy of a County must be Set so that e property taxes payable in a given year (excluding
new construction, improvements and State-assessed property) will not e ceed the amount levied by the County in the highest
of the three most recent years multiplied by the limit factor. Revenue generated by the regular property tax levy on new
construction is not affected by the levy limit. i
The limit factor for the County is defmed to be the lesser of 101% or 1~0% plus the previous year's inflation rate, but if the
inflation rate is less than 1 %, the County Commissioners could increase e limit factor to 101 % upon a finding of substantial
need. The limit factor may also be increased, regardless of inflati n, if such increase is authorized by the County
Commissioners upon a finding of substantial need and is also approved by the voters at a general or special election within
the County. Such election must be held less than twelve months before e date on which the proposed levy will be made and
any tax increase cannot be greater than described under the heading " ounty Maximum Rate Limitations." A majority of
those voting would be required for approval. The new limit factor will effective for taxes collected in the following year
only. (See "INITIATIVES" herein.) I
The One Percent Agf!regate Ref!Ular Levv Limitation. Article VII, Sectibn 2 of the Washington Constitution limits aggregate
regular property tax levies by the State of Washington and all taxing disfcts, except port districts and public utility districts,
to one percent (1.00%) of the true and fair value of property. RCW 4.52.050 provides the same limitation by statute.
W"hington law .1'0 permits the creation of allport di,tricts, which, if created, could levy laxe, .1 the mle of $,75/$1,000
with approval of their electors. The $.75/$1,000, if levied, would als count against the One Percent Limitation, but not
against the $5.90/$1,000 Limitation.
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$5.90/$1.000 Af!f!regate Non-Voted Levv Limitation. RCW $4.52.043d) imposes an aggregate limitation on non-voted tax
levies by all taxing districts, except the State, ports and public utility I districts, of $5.90/$1,000 of assessed value. RCW
84.52.010 provides, in general, that if aggregate levies certified by all rXing districts exceed the aggregate levy limitation,
levies certified by junior taxing districts are reduced or eliminated in or er to bring the aggregate levy into compliance with
statutory maximums.
TAX VALUATION AND CO~ECTIONS
Assessed Valuation Determination I
In the State, the County Assessor ("Assessor") determines the value of II real and personal property throughout the County,
which is subject to ad valorem taxation with the exception of cert . n public service properties for which values are
determined. by the State Department of Revenue. The Assessor is an elected official whose duties and methods of
determining value are prescribed and controlled by statute and by detail d regulations promulgated by the State Department
of Revenue. For tax purposes the assessed value of property is 10 % of its actual value. All property is subject to
revaluation every four years. The revaluation occurs in cycles, and the i tention is that one-fourth of the property be revalued
every year. The property is listed by the Assessor on a roll at its current assessed value and the roll is filed in the Assessor's
office. The Assessor's determinations are subject to revisions by the Co nty Board of Equalization and, for certain property,
subject to further revisions by the State Board of Equalization, After all dministrative procedures are completed, the County
Commissioners receive the Assessor's fmal certificates ofass~ssed value I of property within the County.
Jefferson Comity, Washi~gton
Assessed Value HistOl (1)
Collection Year Assessed Value
2007 $3,892,893,177
2006 3,617,709,202
2005 3,137,724,380
2004 2,940,009,880
2003 2,724,796,840
(1) Regular values
Source: Jefferson County Assessor's Office
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Tax Collection Procedure
Property taxes are levied in specific amounts, and the rates for all taxes levied for all taxing districts in the County are
determined, calculated and fixed by the Assessor based upon the assessed valuation of the property within the various taxing
districts. The Assessor extends the taxes to be levied within each taxing district upon a tax roll, which contains the total
amount of taxes to be so levied and collected. The tax roll is delivered to the Treasurer by January 15 of each year, and an
abstract of the tax roll, showing the total amount of taxes collectible in each of the taxing districts for the year, is delivered to
the County Auditor ("Auditor") at the same time. The Auditor issues to the Treasurer his/her warrant authorizing the
collection of taxes listed on the Assessor's certified tax roll. The Treasurer creates a tax account for each taxpayer and is
responsible for the collection of taxes due to each account. All such taxes are due and payable on the 30th of April of each
year, but if the amount due from a taxpayer exceeds fifty dollars, one-half may be paid then and the balance no later than
October 31, of each year. The entire tax or fIrst half must be paid on or before April 30, or else the total amount becomes
delinquent on May 1. The second half of the tax is payable on or before October 31, becoming delinquent November 1.
The method of giving notice of payment of taxes due, the Treasurer's accounting for the money collected, the division of the
taxes among the various taxing districts, notices of delinquency, and collection procedures are all covered by detailed
statutes. Subject to U.S. Internal Revenue Service liens on personal property filed prior to the levy of taxes by the County
and possibly the "Homestead Exemption," the lien for property taxes is prior to all other liens or encumbrances of any kind
on real or personal property subject to taxation. By law the Treasurer may commence foreclosure of a tax lien on real
property after three (3) years have passed since the fIrst delinquency.
Washington State courts have not made a determination whether or not the homestead law (chapter 6.13 RCW) gives the
occupying homeowner a right to retain the fIrst $40,000 proceeds of forced sale of a family residence for delinquent general
property taxes. In Algona vs. Sharp, 30 Wn. App. 837,638 P. 2d 627 (1982), the State Court of Appeals held the homestead
right superior to liens for local improvement district asSessments but was silent regarding liens for property taxes. The U.S.
Bankruptcy Court for the Western District of Washington has held that the Homestead Exemption applies to the liens for
property taxes, while the State Attorney General has taken the position that it does not.
Delinquent taxes are subject to twelve percent per annum interest computed on a monthly basis from the date of delinquency
until paid. Interest is calculated at the rate in effect at the time of payment of tax, regardless of when the taxes were first
delinquent. Additional penalties are: 1) a three percent penalty on amounts delinquent on May 31 of the year in which the tax
is due; and 2) beginning with taxes levied for collection in 1982, an additional eight percent penalty ofthe total amount of tax
delinquent on November 30 of the year in which the tax is due. Penalties are not assessed on taxes that were fIrst delinquent
prior to 1982.
Jefferson County, Washington
2007 Representative Levy Rates (1)
State Schools
Jefferson County
County Roads
Conservation Futures
Fire Protection District No.3 - Regular
Fire Protection District No.3 - EMS
School District No. 49
Hospital District No.2
Library District No. 1
Port of Port Townsend
Public Utility District No. 1
TOTAL
(1) Includes regular and excess levies
Source: Jefferson County Assessor's Office
9
$2.35345
1.52245
1.24437
0.04752
1.38881
0.46321
2.65451
0.34282
0.41492
0.20334
0.10498
$10.74039
(1) Data through third quarter 2006
Source: Washington State Department of Revenue I
Jefferson County, waShifgton
Tax Levy Collection Re ord
For the General (C..rrent Exp nse) Fund
Collected in the
Year of the Levy I
Amount Perc nt
nla nla
$5,603,234 98. 5%
5,235,486 98. 1 %
5,010,038 98. 6%
5,197,946 99. 1%
Year
2007
2006
2005
2004
2003
Original
Tax Lev
$5,926,735
5,680,021
5,314,639
5,088,340
5,233,828
Year
2006 (1)
2005
2004
2003
2002
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Taxable Retail sale,
City of
Port Townsend
$ 49,807,187
180,221,075
161,409,306
152,468,178
139,431,588
Jefferson
County
$104,095,262
368,922,892
337,651,428
293,689,926
270,874,697
Collection As of
February 28. 2007
Amount Percent
$ 107,562 1.81%
5,617,069 98.89%
5,285,275 99.45%
5,076,076 99.76%
5,233,828 100.00%
Source: Jefferson County Treasurer's Office
Name of Owner
Port Townsend Paper
Puget Sound Energy
Port Ludlow Associates
Beckett Point Fisherman's Club
Broders Family
MWSH Port Townsend LLC
Safeway
Qwest
Port Townsend Plaza / Freeland Invest.
Sprint-United Telephone
TOTAL
Jefferson County, Washiftgton
Ten Largest Taxpayers
2007 ~ollection Year
Asses ed Value (1)
$ 8,280,740
f9,031,295
2,390,955
7,602,390
1,192,755
0,127,925
17,761,880
17,097,900
6,243,120
6.119.975
Percent of
County A. V.
1.24%
0.75%
0.58%
0.45%
0.29%
0.26%
0.20%
0.18%
0.16%
0.16%
Type of Business
Paper Mill
Utility
Resort/Developer
Homeowner's Assoc.
Family Holdings
Apartments
Retail
Utility
Mall / Hotel
Utility
4.27%
(1) Assessed values for 2007 tax collection year
Source: Jefferson County Assessor's Office
Collection of Other Taxes
,
In addition to its regular property tax levy, the County also collects v10us other taxes, including a taxable retail sales tax
(also known as a "local sales and use tax"), Criminal Justice Tax, Real Estate Excise Tax, Rural County Tax, Hotel/Motel
Tax and an Additional Hotel/Motel Tax, among others. State law limits t e County's ability to use the revenues derived from
many of these taxes for general County purposes.
1
Local Sales and Use Tax Distributions. The County imposes a general 1. % sales and use tax as a percent of the selling price
for value on any retail sale or use of tangible personal propertY within e County, upon which the State of Washington also
10
imposes a sales and use tax. (A portion of the total sales and use tax collected is a local tax and is returned to the city or
county or certain other local jurisdictions where the sales transaction took place.) The County's sales and use tax is collected
by the State Department of Revenue (the "Department") under a contract with the County that provides for a deduction by the
Department of one percent (not exceeding 2 percent of the tax collected) for the Department's administration costs. The
Department of Revenue distributes the County's portion of the retail sales and use tax on a monthly basis. In 2006, the
amount of County's distribution was approximately $4,048,690.
Criminal Justice Sales Distributions. The Criminal Justice Tax is an additional local sales and use tax of 0.1 percent for
funding criminal justice programs. The criminal justice sales tax distribution is based on population. This tax is levied only
by the County and is imposed County-wide, but the receipts are shared with the cities. (The adoption of this tax does not
require a vote of the people.) Of the revenue collected for criminal justice, 1.0 percent is retained for administration. Of the
amount remaining, 10 percent is distributed to the County and 90 percent to cities and counties on a per capita basis based on
their official April I populations. The annual distribution for the County in 2006 was approximately $404,850.
Real Estate Excise Tax Distributions. Another source of tax revenue for the County is a real estate sale excise tax, which is
levied on each sale of real property within the County at the rate of 0.50 percent of the selling price. The Jefferson County
Treasurer collects this tax and retains a percentage of the gross proceeds. The remaining proceeds are placed into the
County's current expense fund. The annual distribution for the County in 2006 was $2,003,680. Approximately half of the
County's Real Estate Excise Tax money is designated for capital improvements.
Rural County Tax Distribution. The local option sales and use tax authorized by RCW 82.14.370, is another source of tax
revenue for the County. Currently, the tax may be imposed by counties that have a population density of less than 100
persons per square mile, as determined annually by the State's office of financial management. The local option sales and
use tax cannot exceed eight one-hundredths of one percent (0.08%). During 2006, the total amount distributed to the County
was $163,213.
Hotel/Motel Tax Distributions. The "regular" or state-shared hotel/motel tax distrIbutions are for a local option tax of 2
percent on the sales of hotel/motel rooms. The regular hotel/motel tax is not paid in addition to other state and local sales
taxes. Instead, it is credited against the State's 6.5 percent retail sales tax (thus shifting the impact to the State's general
fund). Cities can levy the regular hotel/motel tax within their corporate limits and counties can levy the tax in unincorporated
areas and within cities that do not levy the tax. In 2006, the total amount distributed to the County was approximately
$310,410.
Additional Hotel/Motel Tax Distribution. Additional (also referred to as "special") hotel/motel taxes were previously
authorized by statute for specific cities and counties for specific purposes. Starting in 1997, any city, town or county was
eligible to levy an additional hotel/motel tax at a rate of up to 4 percent (unless a higher rate was previously authorized). Up
to one-half, or a maximum of 2 percent of this amount can be credited against the state sales tax, as under the existing state-
shared hotel/motel tax. These taxes are paid in addition to all other state and local sales taxes. In 2006, the total amount
distributed to the County was approximately $307,814.
Jefferson County, Washington
2006 Excise Tax Distribution Record
Amount Distributed
Local Sales and Use Tax
Criminal Justice Sales Tax
Real Estate Excise Tax
Rural County Tax
Hotel/Motel Tax
Additional Hotel!Motel Tax
$4,048,690
404,850
2,003,680
163,213
310,410
307.814
TOTAL
$7.238.657
11
Jefferson County, Wash ngton
Historical Timber Excise Tax Distnbution Record
2006
2005
2004
2003
2002
Amount r.: istributed
$1,23 ,788
91 ,5II
48 ,422
57 ,759
50 ,846
THE COUNTY
General
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Jefferson County operates under the laws of the State applicable to co~ties. As a general purpose government, the County
provides public safety, street improvement, parks, health and social servifes, and general administrative services.
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Government Organization
The Board of County Commissioners serves as the County'slegislative body. The Commissioners also serve as executives
for several County operations and have some quasi judicial duties. Tl ey are responsible for: County facilities, roads and
public works programs, public health and human services, building, land and other community development programs for the
unincorporated areas, emergency and risk management services, central data processing and property management; indigent
defense; and the County park and recreation system. They also must If view and adopt a balanced budget for each calendar
year. The County is divided into three commissioner districts on the basis of population and the County Commissioners are
elected to four-year terms. I
The following are the Commissioners currently serving the County and t[1e expiration dates of their current terms.
Commissioner
Phil Johnson (Chairman)
David W. Sullivan
John Austin
District
No.1
No.2
No.3
Term Exniration
December 31, 2008
December 31,2008
December 31,2010
Labor Relations -
The County currently employs 284 full-time employees and 130 casual I bor employees. The majority of employees who are
eligible under State laws to be represented by a labor organization are employed under provisions of negotiated contracts
with two labor organizations. The County enters into written ba gaining agreements with each of the bargaining
organizations; agreements contain provisions on such matters as salarie , vacation, medical leave, health and life insurance,
working conditions, and grievance procedures.
Bare:ainine: Unit
Teamsters Union Local 760:
- Sheriffs
- Officers
- Public Works
- JeffCo Com & Sheriff Admin
- Corrections 1 Animal Service & Security
- Central Services
United Food and Commercial Works
Non Union:
Appointed
Elected
Management
Numberlof
Erqplovees C~
3 I
16 1
56
16
17
10
233
Expiration Date
of Contract
December 31, 2008
December 31,2008
December 31,2008
December 31, 2006
December 31, 2007
December 31,2006
December 31, 2007
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The County strives to be fair with all employees, consistent with all applicable State laws, to ensure equity, and promote
labor relation policies mutually beneficial to management and employees. County officials consider all current labor
relations to be satisfactory.
Pension System
Substantially all County full-time and qualifying part-time employees participate in one of the following statewide local
government retirement systems administered by the Department of Retirement Systems, under cost-sharing multiple-
employer public employee defined benefit and defined contribution retirement plans. Employees are covered by either the
Public Employees Retirement System (PERS I and PERS II) or the Law Enforcement Officers and Firefighters System
(LEOFF I and LEOFF II).
The last actuarial value of assets in the State's administered retirement systems was done for the year ended September 30,
2004, which showed accrued liability of PERS Plan I exceeded the net actuarial value of assets available for benefits by
$2,254,000,000. In response to the current under funding, the Washington State legislature adopted a bill that, beginning on
July 1, 2006, will phase in over a three-year period additional employer contribution rates dedicated to decreasing the
unfunded liability in PERS Plan I. Employer contribution rates will increase from 3.69% (including a 0.18% administration
fee) effective July 1, 2006 to approximately 8.20% effective July 1, 2008. The State legislature also passed a bill that,
beginning on July 1, 2009, establishes an additional minimum 2.68% employer contribution rate to be used for the sole
purpose of amortizing the unfunded actuarial accrued liability in PERS Plan I.
Historical trend and other information regarding each plan are presented in the State Department of Retirement Systems
annual financial report. A copy ofthis report may be obtained at the Department of Retirement Systems, Capital Plaza
Building, 1025 E. Union Street, PO Box 48380, Olympia, W A 98504-8380.
Insurance
Jefferson County is a member of the Washington Counties Risk Pool (the "Pool"). Chapter 48.62 RCW authorizes the
governing body of anyone or more governmental entities to form together into or join a pool or organization for the joint
purchasing of insurance, and/or joint self-insuring, and/or joint hiring or contracting for risk management services to the
same extent that they may individually purchase insurance, self-insure, or hire or contract for risk management services. An
agreement to form a pooling arrangement was made pursuant to the provisions of Chapter 39.34 RCW, the Interlocal
Cooperation Act. The Risk Pool was formed on August 18, 1988 when counties in the State of Washington joined together
by signing an interlocal agreement to pool their self-insured losses and jointly purchase insurance and administrative
services. Twenty-five counties make up the Risk Pool.
The Pool allows members to establish a plan of self-insurance, jointly purchase excess or reinsurance and provide related
services. All Risk Pool joint self-insurance liability coverages, including public officials' errors and omissions, are on an
"occurrence" basis. The Pool also provides special events/concessionaires optional group purchased insurance coverages for
its members.
Members make an annual contribution to fund the Risk Pool. The Pool acquires reinsurance from unrelated underwriters that
are subject to a pool per-occurrence self-insured retention of $100,000. Members may elect deductible amounts ranging from
$10,000 per occurrence to $250,000. Members are responsible for the fIrst deductible amounts of each claim, while the pool
is responsible for the remaining difference up to the Pool's $100,000 self-insured retention. Reinsurance carriers cover all
losses over $100,000 to the maximum limits of each policy.
Members contract to remain in the Pool for a minimum of five years, and must give notice one year before terminating
participation. The Interlocal agreement is renewed automatically each year until terminated. Even after termination, a
member is still responsible for contributions to the Pool for any unresolved, unreported, and in-process claims for the period
that it was a signatory to the Interlocal agreement.
Financial Information
Basis of Accounting. The accounting and reporting policies of the County conform to the Budgeting. Accounting and
Reporting System (BARS) as prescribed by the State Auditor. The County Auditor maintains the accounting system for the
13
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County. The accounts of the County are organized by fund and aCCft group, each of which is considered a separate
accounting entity. Each fund has a separate set of self-balancing acco ts that comprise its assets, liabilities, fund equity,
revenues and expenditures or expenses, as appropriate. Tl)e County' resources are allocated to, and accounted for. in,
individual funds according to the purposes for which they are spen and the means by which spending activities are
controlled. !
The Budget Process. The fmal budget for each calendar year is to be a!opted before the end of the previous year. Prior to
October of each year, the compiled budgets for each departqlent are pr sented to the Commissioners for review. With the
assistance of the Treasurer and Auditor, the compiled budget$ are analy ed and developed into the expenditure program for
the ensuing year. The budget includes all funds, revenues and reserves; s divided into programs and objects of expense; and
includes all supporting data deemed advisable by the Commissioners or ~equired by resolution. The expenditures included in
the budget for the ensuing year may not exceed the estimated revenue~ The Commissioners hold public hearings prior to
budget adoption. I
The County Treasurer receives all money on behalf of the County.
direction from the County Finance Committee.
e Treasurer also invests the County's funds, with
Auditing of County Finances. The State Auditor is required tQ examine e affairs of counties at least once every three years.
The examination must include, among other things, the finamcial condi 'ons and resources of the county, whether the laws
and constitution of the state are being complied with, and the methods an accuracy of the accounts and reports of the county.
Reports of the auditor's examinations are required to be filed in the offic of the State Auditor and in the auditing department
of the county. The most recent audit of the County covers the period January 1, 2005 through December 31, 2005. No
significant discrepancies or irregularities were found.
Authorized Investments
Chapter 39.59 RCW limits the investment of public funds to the follo 'ng authorized investments: bonds of the State and
any local government in the State, which bonds are rated at the time of' estrnent in one of the three highest credit ratings by
a nationally recognized rating agency; general obligation bonds of 0 r states and subdivisions thereof so long as those
bonds are rated in one of the three highest categories of a nationally rec gnized rating agency; registered warrants of a local
government within the same county as the entity making the investment and any investment authorized by law for the State
Treasurer or any local government exclusive of certificates of deposit f banks or bank branches not located in the State.
Under chapter 43.84 RCW, the State Treasurer may invest in non-neg 'able certificates of deposit in designated qualified
public depositories; in obligations of the U.S. government, its agen ies and wholly owned corporations; in bankers'
acceptances; in commercial paper; in repurchase agreements; in the bligations of the federal home loan bank, federal
national mortgage association and other government corporations subje to statutory provisions. Utility revenue bonds and
warrants of any city and bonds or warrants of a local improvement distri are also eligible investments (RCW 35.39.030).
Any municipal corporation, including the County, may aulhorize th~ investment of funds not required for immediate
expenditure by the County Treasurer. Such funds of the County, incl ing debt service funds, have been invested by the
County Treasurer. The County Treasurer may, upon the request of one or more units of local government that invest their
money with the county, combine those moneys for the purposes of inve tment. The office of the County Treasurer receives
up to five percent of the earnings on such investments, subje!:t to a ma imum of $50 on each transaction, as its investment
service fee. The County Treasurer may reimburse its office for any ex ses incurred in the establishment and maintenance
of such a county investment pool.
Local Government Investment Pool
The State Treasurer's Office administers the Washington Stiate Local overnment Investment Pool (the "LGIP"), a $2.2
billion dollar fund that invests money on behalf of more than 350 cities counties, towns and special taxing districts. In its
management of LGIP, the State Treasurer is required to adhere, at all 'mes, to the principles appropriate for the prudent
investment of public funds. These are, in priority order, (i) th: safety of principal; (ii) the assurance of sufficient liquidity to
meet cash flow demands; and (iii) to attain the highest possible yi Id within the constraints of the fIrst two goals.
Historically, the LGIP has had sufficient liquidity to meet aU cash flow demands. The LGIP, authorized by chapter 43.250
RCW, is a voluntary pool, which provides its participants the opporttmi to benefit from the economies of scale inherent in
pooling.
14
It is also intended to offer participants increased safety of principal and the ability to achieve a higher investment yield than
would otherwise be available to them. The pool is restricted to investments with maturities of one year or less, and the
average life typically is less than 90 days. Investments permitted under the pool's guidelines include U.S. government and
agency securities, bankers' acceptances, high quality commercial paper, repurchase and reverse repurchase agreements,
motor vehicle fund warrants, and certificates of deposit issued by qualified Washington State depositories.
Authorized Investments for Bond Proceeds
In addition to the eligible investments discussed above, Bond proceeds may also be invested in mutual funds with portfolios
consisting of U.S. government and guaranteed agency securities with average maturities of less than four years; municipal
securities rated in one of the four highest categories; and money market funds consisting of the same, so long as municipal
securities held in the fund(s) are in one of the two highest rating categories of a nationally recognized rating agency. Bond
proceeds may also be invested in shares of money market funds with portfolios of securities otherwise authorized by law for
investment by local governments (RCW 39.59.030).
15
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Jefferson lunty, Washington
Fund Resources and Uses Arising from Cash Transactions
For the General (CurrentExpense) nd (For the Fiscal Year End December 31)
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Unaudite4
200
Budgeted
2007
Audited
2005
Audited
2004
Audited
2003
Revenues
Taxes $ 9,730,400 $ 9,584,10 $ 9,10],990 $ 8,458,806 $ 7,746,669
Licenses and Permits 18,140 27,32 19,214 17,8] 4 21,916
Intergovernmenta] 1,50],598 I ,680,01 ] ,695,087 1,276,465 1,140,775
Charges for Services 925,803 875,75 898,210 942,358 979,295
Fines and Forfeits 461,700 471,79 466,743 448,289 509,664
Miscellaneous Revenues 811,375 1,007,16 (I) 622,593 285,067 ]85,837
Other Financing Sources 200,000 254,64 637,492 360,603 ]89,772
Total Revenues $ 13,649,016 $ 13,900,78 $ 13,441,329 $ 11,789,402 $ ]0,773,928
I
Expenditures i
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General Government $ 6,072,777 $ 5,703,52$ $ 5,681,493 $ 5,]82,456 $ 5,]07,667
Security of Persons & Property 4,979,039 4,909,72~ 4,594,931 3,941,697 3,79] ,453
Physical Environment 8,485 6,92 6,855 6,808 6,630
Transportation - - - -
Economic Environment I 77 ,290 156,.of ]53,934 10,643 ] 0,278
Menta] & Physic a] Health 23,152 32,81. 22,90 I ] 9, 182 25,674
Culture & Recreation - ~ - - -
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Debt Service - 191,40t - - -
Capita] Outlay 113,726 - 112,783 69,462
Other Financing Uses 2,274,547 2,336,95 2,359,275 2,153,811 3,026,377
Total Expenditures $ 13,649,016 $ 13,338,24 $ 12,819,389 $ 11,427,380 $ 12,037,541
Excess of Revenues
Over (Under) Expenses $ - $ 562,54 $ 621,940 $ 362,022 $ (1,263,613)
Non-revenues $ - $ 1,51 $ 19,565 $ 18,929 $ 39,048
Non-expenditures - (5] 1,147 - - -
Total Other Financing Sources (Uses) $ - $ (509,636 $ 19,565 $ 18,929 $ 39,048
i
Excess of Revenues & Other Sources $ - $ 52,9~ $ 64] ,505 $ 380,951 $ (1,224,565)
Over (Under) Expenditures & Other I
Uses 2,406,651
Beginning Fund Balance, Jan. I $ 2,459,56] $ $ 1,765,150 $ 1,384,]99 $ 2,608,764
Other Changes to Fund Balance - 2,459,56t - - -
Ending Fund Balance, Dec. 31 $ 2,459,561 $ $ 2,406,655 $ 1,765,]50 $ ] ,384,] 99
I
(I) I."""" ;. M;,,,lIa",o~ R~""as d" primarily la Mgh" ial'"'' "lUas.
Source: Washington State Audit Reports and Jeffirson County
16
Jefferson County, Washington
Combined Balance Sheet
For the General (Current Expense) Fund
(For the Fiscal Year End December 31)
Unaudited Audited Audited Audited
2006 2005 2004 2003
Current Assets
Cash and Cash Equivalents $ 3,248,606 $ 3,108,285 $ 2,342,143 $ 2,082,675
Investments
Petty Cash 6,145 6,145 6,145 6,145
Advance Travel 10,000 10,000 10,000 10,000
Receivables, net of allowance for uncollectibles:
Taxes Receivable 130,033 138,132 147,853 371,086
Accounts Receivable
Special Assessments Receivable 4,145 4,170 4,209
Accrued Interest Receivable
Due from Other Funds
Due From Other Governments 60,000 71,125 82,250 104,500
Prepayments
Interfund Loan Receivable 500,000
Total Assets $ 3,954,784 $ 3,337,832 $ 2,592,561 $ 2,578,615
Liabilities
Salaries, Taxes and Benefits Payable $ 582,839 $ 514,793 $ 375,157 $ 492,357
Warrants Payable 206,204 205,070 217,950 135,402
Retainage Payable
Accounts Payable
Due to Other funds 980 86,730
Due to other governments
Custodial Accounts
Deferred Revenue 130,033 142,277 152,023 375,295
Total Liabilities $ 919,076 $ 863,120 $ 745,130 $ 1,089,784
Fund Equity and Other Credits
Fund Balance Reserved for Petty Cash $ 16,145 $ 16,145 $ 16,145 $ 16,015
Special Revenue Funds Balance 3,019,563 2,458,527 1,831,256 1,472,686
Total Equity and Other Credits $ 3,035,708 $ 2,474,672 $ 1,847,401 $ 1,488,701
Total Liabilities, Equity and Other Credits $ 3,954,784 $ 3,337,792 $ 2,592,531 $ 2,578,485
Source: Jefferson County, Washington
17
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~offenon lnnty, W,"'ngtnn
Fnnd Reonn..... .nd U... "'.n. '<om Cuh Tnn..""""
For th Road Fund
(For the Fiscal ear End December 31)
Budgeted Unaudite Audited Audited Audited
2007 200 2005 2004 2003
Revenues
Taxes $ 3,042,500 $ 3,068,49 $ 2,970,838 $ 2,733,929 $ 2,608,144
Licenses and Permits 8,750 4,96j 3,928 28,449 9,084
Intergovernmental 4,272,102 (I) 2,902,15 3,547,524 3,531,677 3,174,]64
Charges for Services 5,500 lJ,13 , 31,173 3,985 ]5,430
Fines and Forfeits
Miscellaneous Revenues 5,000 28,5] 6,645 1,248 5,207
Other Financing Sources ]62,606 169,10 913,523 257,368 189,154
Total Revenues $ 7,496,458 $ 6,184,37 $ 7,473,631 $ 6,556,656 $ 6,001,183
Expenditures !
General Government $ 153,750 (2) $ 30,60. $ 30,492 $ $ 64,201
Security of Persons and Property I
f
Physical Environment 5,461,44t
Transportation 6,042,606 5,068,597 5,214,602 5,029,101
Economic Environment t
Mental & Physical Health
Culture & Recreation t
Debt Service 42,166 42,10 16,842 44,21 ] 45,263
Capital Outlay 2,186,047 1,747,25 (3) 912,482 1,098,345 304,659
Other Financing Uses ]2,000 20,451 47,698 81,7] 7 138,626
Total Expenditures $ 8,436,569 $ 7,301,84 $ 6,076, III $ 6,438,875 $ 5,581,850
I
Excess of Revenues I
Over (Under) Expenses $ (940,]11) $(1,] 17,471~ $ 1,397,520 $ 117,781 $ 419,333
Non-revenues $ d $ 1,322 $ (64,793) $ 71,34]
Non-expenditures
Total Other Financing Sources (Uses) $ $ ],322 $ (64,793) $ 7],34]
I
Excess of Revenues & Other Sources I
Over (Under) Expenditures & Other 1
Uses $ (940,111) $ (1,117,471?_ $ 1,398,842 $ 52,988 $ 490,674
Beginning Fund Balance, Jan. I $ 3,019,749 $ 4,137,2]( $ 2,713,58] $ 2,660,593 $ 2,169,919
Other Changes to Fund Balance I. 24,793
Ending Fund Balance, Dec. 31 $ 2,079,638 $ 3,019,74< $ 4,137,2]6 $ 2,713,58] $ 2,660,593
(I) Increase in Intergovernmental Revenues due to grants for disaster recove ry and federal transportation projects.
(2) Increase in General Government Expenditures due to an increase in proj cted operating supplies for disaster recovery.
(3) Increase in Capital Outlay due to established construction projects for 2l 07.
I
Source: Washington State Audit Reports and Jefferson County
18
....'
Assets
Cash and Cash Equivalents
Investments
Petty Cash
Advance Travel
Receivables, net of allowance for uncollectibles:
Taxes Receivable
Accounts Receivable
Special Assessments Receivable
Accrued Interest Receivable
Due from Other Funds
Due From Other Govemments
Prepayments
Interfund Loan Receivable
Total Assets
Liabilities
Salaries, Taxes and Benefits Payable
Warrants Payable
Retainage Payable
Accounts Payable
Due to Other funds
Due to other governments
Custodial Accounts
Deferred Revenue
Total Liabilities
Fund Equity and Other Credits
Fund Balance Reserved for Petty Cash
Special Revenue Funds Balance
Total Equity and Other Credits
Total Liabilities, Equity and Other Credits
Source: Jefferson County, Washington
Jefferson County, Washington
Comparative Balance Sheet
For the Road Fund
(For the Fiscal Year End December 31)
Unaudited Audited Audited Audited
2006 2005 2004 2003
$3,583,794 $4,328,595 $3,438,371 $2,951,487
34,118 16,571 20,787
500 500 500 500
65,591
88,735
76,118
91,782
]2,523 85,343
50,000
$3,684,003 $4,446,924 $3,514,989 $3,] 99,899
$ 200,433 $ 186,321 $ 149,103 $ 209,470
210,566 34,647 552,580 139,115
187,663 23,600
368,421 394,737 421,052 447,368
65,591 88,735 76,118 91,782
$1,032,674 $ 704,440 $1,222,453 $ 887,735
$ 500 $ 500 $ 500 $ 500
2,650,829 3,741,984 2,292,036 2,311 ,664
$2,651,329 $3,742,484 $2,292,536 $2,312,164
$3,684,003 $4,446,924 $3,514,989 $3,199,899
19
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ECONOMIC AND DEMOGRAPill4 INFORMATION
General 1
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The County was established in 1852 as one of the fIrst counties organ~ed by the Washington Territorial Legislature. The
County is located in the northwest corner of the State and is bordered b the Pacific Ocean on the west, the Puget Sound on
the east and the Straight of Juan de Fuca, the major waterway which se es as a national boundary between the United States
and Canada, to the north. The County covers approximately 1,805 sq e miles with over fifty percent of the area occupied
by the Olympic National Park. I
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The County Seat is located in the City of Port Townsend (the f. 'City"), *the Strait of Juan de Fuca on State Highway 20, off
of U.S. Highway 101 on the Olympic Peninsula, approximately a 75- ute drive and ferry ride from Seattle. The City of
Port Townsend is the only incorporated community in the County. Th historical population of the City and the County is
shown below: i
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Historical Populatio
Year
2007
2006
2005
2004
2003
City of
Port Townsend
8,925
8,820
8,745
8,535
8,430
Jefferson
County
28,500
28,200
27,600
27,000
26,700
Source: Washington State Office of Financial Management (Forecastin~ Division)
I
Jefferson County, wash+gton
Major Employers I
Product ~r Service
Craft Pa r
Governm t
Education
Healthcar
Education
Grocery Sore
Governm t
Gove~t
Correctio~s Facility
. Resort I
Grocery st' ore
Resort
Convalesc nt Home
I
Source: Economic Development Council of Jefferson County and Individtal Employers
Emplover
Port Townsend Paper
Jefferson County
Chimacum School District
Jefferson General Hospital
Port T.ownsend School District
Safeway
US Navy Indian Island
City of Port Townsend
Olympic Correction Center
Port Ludlow Associates
Quality Food Centers
Kalaloch Ocean Lodge
Kah Tai Care Center
No. of Full-Time
Emplovees
312
273
243
217
173
135
132
114
101
75
75
70
59
20
Jefferson County, Washington
Building Permit Activity
New Residential Construction
Year
2006
2Q05
2004
2003
2002
Value
$49,139,214
53,189,877
51,260,984
31,511,327
28,357,104
Number
of Permits
220
256
250
184
176
Source: Jeffirson County Community Development -Building Permits
2004
2003
2002
2001
2000
Comparative Per Capita Personal Income
Jefferson
County
$32,722
30,902
30,536
30,195
28,418
Washinf!ton State
MetropOlitan Non-Metro
$36,415 $25,459
34,094 24,404
33,783 23,901
33,504 23,797
33,071 22,787
MetrOpOlitan
$34,668
33,047
32,414
32,196
31,486
Source: United States Bureau of Economic Analysis
State of Washington
Civilian Labor Force
Total Employed
Total Unemployed
% Unemployed
Jefferson County
Civilian Labor Force
Total Employed
Total Unemployed
% Unemployed
Washington State and Jefferson County
Resident Civilian Labor Force and Employment Data
(Annual Averages)
2007 (1)
2006
3,335,700
3,140,300
195,300
5.9%
3,339,700
3,174,500
165,200
4.9%
13,680
12,860
810
5.9%
13,570
12,930
690
4.7%
(1) Through January 2007
Source: Washington State Department of Employment Security
2005
2004
3,292,200
3,109,900
182,300
5.5%
3,224,000
3,022,300
201,700
6.3%
13,670
12,950
720
5.3%
13,490
12,690
800
5.9%
21
Nation
Non-Metro
$25,104
23,853
23,024
22,762
22,013
2003
3,159,300
2,925,300
234,000
7.4%
12,940
12,010
930
7.2%
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Non-Agricultural Wage and sa~ary Workers
Employed in Jefferson ~ounty
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(1) Through January 2007 I
Sou,,,,, Wa,hing/ou State Depamnent af Employment SecW'ity t
UNDERWRITING AND EGAL
Underwriting Agreement
,
i
Total Nonagricultural Wage & Salary Workers
Natural Resources, Mining & Construction
Manufacturing
Trade, Transportation & Utilities
Information & Financial Activities
Government
2007 (1)
9,440
800
770
1,420
570
2,100
2006
9,600
830
750
1,440
550
2,120
2005
9,450
820
720
1,430
500
2,120
2004
9,290
770
780
1,390
500
2,130
2003
8,960
730
740
1,310
600
2,080
The Bonds are being purchased by Martin Nelson & Co., Inc.; acting as e Underwriter. The purchase contract provides that
the Underwriter will purchase all of the Bonds, if any are purehased, at price of % of the par value of the Bonds,
plus accrued interest. The Bonds will be reoffered at an average pri e of % of the par value of the Bonds,
resulting in an underwriting spread of %. After the initial public offering, the public offering prices may be
varied from time to time.
Description of Ratings j
Standard & Poor's Ratings Services has assigned the Bonds a rating of' " with the understanding that upon delivery
of the Bonds a policy insuring the payment when due of the princi 1 of and interest on the Bonds will be issued by
. The County has also received an under! 'ng rating of "_" from Standard & Poor's. The
ratings reflect only the view of the rating agency and an explanation of e significance of the ratings may be obtained from
the rating agency. There is no assurance that the ratings will be retaine for any given period of time or that the ratings will
not be revised downward or withdrawn entirely by the rating agency if,' its judgment, circumstances so warrant. Any such
downward revision or withdrawal of the ratings will be likely to have an dverse effect on the market price of the Bonds.
Absence of Material Litigation
I
There is no litigation pending questioning the validity of the Bonds, orl the power and authority of the County to issue the
Bonds. I
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Legal Opinion
Legal matters incident to the authorization, issuance and sale of the Bo ds by the County are subject to the approving legal
opinion of Foster Pepper PLLC, Seattle, Washington, Bond Counsel. form of the opinion of Bond Counsel with respect to
the Bonds is attached as Appendix A. The opinion of Bond Counsel is 'ven based on factual representations made to Bond
Counsel, and under existing law, as of the date of initial delivery of the Bo ds, and Bond Counsel assumes no obligation to revise
or supplement its opinion to reflect any facts or circumstances that may th eafter come to its attention, or any changes in law that
may thereafter occur. The opinion of Bond Counsel is an expression its professional judgment on the matters expressly
addressed in its opinion and does not constitute a guarantee of result. Bon Counsel will be compensated only upon the issuance
and sale of the Bonds. I
Conflicts of Interest ~
Some of or all of the fees of the Underwriter and Bond COliUlSel are c ntingent upon the issuance and sale of the Bonds.
None of the Board Members or other officials of the County have interes s in the issuance of the Bonds that are prohibited by
applicable law. I
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Tax Exemption
Exclusion From Gross Income. In the opinion of Bond Counsel, under existing federal law and assuming compliance with
applicable requirements of the Code that must be satisfied subsequent to the issue date of the Bonds, interest on the Bonds is
excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the alternative
minimum tax applicable to individuals.
Continuing ReQuirements. The County is required to comply with certain requirements of the Code after the date of issuance of
the Bonds in order to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes,
including, without limitation, requirements concerning the qualified use of Bond proceeds and the facilities financed or refinanced
with Bond proceeds, limitations on investing gross proceeds of the Bonds in higher yielding investments in certain circumstances,
and the requirement to comply with the arbitrage rebate requirement to the extent applicable to the Bonds. The County has
covenanted in the Bond Resolution to comply with those requirements, but if the County fails to comply with those requirements,
interest on the Bonds could become taxable retroactive to the date of issuance of the Bonds. Bond Counsel has not undertaken
and does not undertake to monitor the County's compliance with such requirements.
Corporate Alternative Minimum Tax. While interest on the Bonds also is not an item of tax preference for purposes of the
alternative minimum tax applicable to corporations, under Section 55 of the Code, tax-exempt interest, including interest on the
Bonds, received by corporations is taken into account in the computation of adjusted current earnings for purposes of the
altemative minimum tax applicable to corporations (as defined for federal income tax purposes). Under the Code, altemative
minimum taxable income of a corporation will be increased by 75% of the excess of the corporation's adjusted current earnings
(including any tax-exempt interest) over the corporation's altemative minimum taxable income determined without regard to such
increase. A corporation's altemative minimum taxable income, so computed, that is in excess of an exemption of $40,000, which
exemption will be reduced (but not below zero) by 25% of the amount by which the corporation's alternative minimum taxable
income exceeds $150,000, is then subject to a 20% minimum tax.
A small business corporation is exempt from the corporate alternative minimum tax for any taxable year beginning after
December 31, 1997, if its average annual gross receipts during the three-taxable-year period beginning after December 31,
1993, did not exceed $5,000,000, and its average annual gross receipts during each successive three-taxable-year period
thereafter ending before the relevant taxable year did not exceed $7,500,000.
Tax on Certain Passive Investment Income of S Corporations. Under Section 1375 of the Code, certain excess net passive
investment income, including interest on the Bonds, received by an S corporation (a corporation treated as a partnership for most
federal tax purposes) that has Subchapter C earnings and profits at the close of the taxable year may be subject to federal income
taxation at the highest rate applicable to corporations if more than 25% of the gross receipts of such S corporation is passive
investment income.
Foreign Branch Profits Tax. Interest on the Bonds may be subject to the foreign branch profits tax imposed by Section 884 of the
Code when the Bonds are owned by, and effectively connected with a trade or business of, a United States branch of a foreign
corporation.
Possible Consequences of Tax Compliance Audit. The Internal Revenue Service (the "IRS") has established a general audit
program to determine whether issuers of tax-exempt obligations, such as the Bonds, are in compliance with requirements of the
Code that must be satisfied in order for interest on those obligations to be, and continue to be, excluded from gross income for
federal income tax purposes. Bond Counsel cannot predict whether the IRS would commence an audit of the Bonds. Depending
on all the facts and circumstances and the type of audit involved, it is possible that commencement of an audit of the Bonds could
adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of its ultimate outcome.
Certain Other Federal Tax Consequences
Bonds "Qualified Tax-Exemvt Obligations" for Financial Institutions. Section 265 of the Code provides that 1 00% of any interest
expense incurred by banks and other fmancial institutions for interest allocable to tax-exempt obligations acquired after August 7,
1986, will be disallowed as a tax deduction. However, if the tax-exempt obligations are obligations other than private activity
bonds, are issued by a governmental unit that, together with all entities subordinate to it, does not reasonably anticipate issuing
more than $10,000,000 of tax-exempt obligations (other than private activity bonds and other obligations not required to be
included in such calculation) in the current calendar year, and are designated by the governmental unit as "qualified tax-exempt
obligations," only 20% of any interest expense deduction allocable to those obligations will be disallowed.
23
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The County is a governmental unit that, together with all subordinate entiti~, reasonably anticipates issuing less than $10,000,000
of tax-exempt obligations (other than private activity bonds and other obli ations not required to be included in such calculation)
during the current calendar year, and has designated the Bonds as "quali ed tax-exempt obligations" for purposes of the 80%
financial institution interest expense deduction. Therefore, only 20% of e interest expense deduction of a fmancial institution
allocable to the Bonds will be disallowed for federal income tax purposes. I
Reduction 0 Loss Reserve Deductions or Pro e and Casual Insuranc Com anies. Under Section 832 of the Code, interest
on the Bonds received by property and casualty insurance companies 'll reduce tax deductions for loss reserves otherwise
available to such companies by an amount equal to 15% of tax-exempt inte est received during the taxable year.
Effect on Certain Social Securitv and Retirement Benefits. Sedtion 86 of e Code requires recipients of certain Social Security
and certain Railroad Retirement benefits to take receipts or accruals of interest on the Bonds into account in determining gross
income. I
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Other Possible Federal Tax ConseQuences. Receipt of interest on the Bon$ may have other federal tax consequences as to which
prospective purchasers of the Bonds may wish to consult their own tax advi~ors.
I
Undertaking to Provide Continuing Disclosure
Basic Undertakin to Provide Annual Financial In ormatio and Not ce 0 Material Events. To meet the conditions of
paragraph (d)(2) of United States Securities and Exchange Commissio ("SEC") Rule 15c2-12 (the "Rule") as required to
qualify for the limited exemption from paragraph (b)(5) of the Rule, s applicable to a participating underwriter for the
Bonds, the County will undertake (the "Undertaking") for the benefit tf holders of the Bonds to provide or cause to be
provided, either directly or through a designated agent, to any persofI upon request, or annually to a state information
depository, ifany, established in the state of Washington (the "SID"), a uaI financial information and operating data of the
type included in this Official Statement for the Bonds that is customari y prepared by the County and is otherwise publicly
available ("annual financial information"); and to each nationally rec gnized municipal securities information repository
designated by the SEC in accordance with the Rule ("NRMSIR") or the Municipal Securities Rulemaking Board ("MSRB"),
and to the SID, timely notice of the occurrence of any of the followi g events with respect to the Bonds, if material: (i)
principal and interest payment delinquencies; (ii) non-payment relate defaults; (iii) unscheduled draws on debt service
reserves reflecting financial difficulties; (iv) unscheduled draws on cre it enhancements reflecting fmandal difficulties; (v)
substitution of credit or liquidity providers, or their failure to perform; vi) adverse tax opinions or events affecting the tax-
exempt status of the Bonds; (vii) modifications to rights of holders 0 the Bonds; (viii) Bond calls (other than scheduled
mandatory redemptions of Term Bonds); (ix) defeasances; (x) release, s bstitution, or sale of property securing repayment of
the Bonds; and (xi) rating changes.
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The annual financial information that the County undertakes to provide may be requested from Clerk of the Board of
Jefferson County whose current address and telephone number are 1820 Jefferson Street, PO Box 1220, Port Townsend,
Washington 98368; telephone number (360) 385-9100. r
I
Amendment of Undertaking. The Undertaking is subject to amendmentlafter the primary offering of the Bonds without the
consent of any holder of any Bond, or of any broker, dealer, municip I securities dealer, participating underwriter, rating
agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the Rule.
I
The County will give notice to each NRMSIR or the MSRB, and th SID, of the substance (or provide a copy) of any
amendment to the Undertaking and a brief statement of the reasons for e amendment. If the amendment changes the type
of annual financial information to be provided, the annual financial info tion containing the amended financial information
will include a narrative explanation ofthe effect of that change on the of information to be provided.
Termination ofUndertakinf!. The County's obligations underthe Unde aking will terminate upon the legal defeasance of all
of the Bonds. In addition, the County's obligations under the Unde 'ng shall terminate if those provisions of the Rule
which require the County to comply with the Undertaking become legall inapplicable in respect of the Bonds for any reason,
as confIrmed by an opinion of nationally recognized bond counselor other counsel familiar with federal securities laws
delivered to the County, and the County provides timely notice of such termination to each NRMSIR or the MSRB and the
SID.
24
Remedv for Failure to Comvlv with Undertaking. If the County or any other obligated person fails to comply with the
Undertaking, the County will proceed with due diligence to cause such noncompliance to be corrected as soon as practicable
after the County learns of that failure. No failure by the County or other obligated person to comply with the Undertaking
will constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond will be to take such actions as that
holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the County
or other obligated person to comply with the Undertaking.
Centralized Dissemination Agent. To the extent authorized by the SEC, the County may satisfy the Undertaking by
transmitting the required filings using http://www.disclosureusa.org (or such other centralized dissemination agent as may be
approved by the SEC).
Miscellaneous
References to certain provisions of the Bond Resolution and other documents and agreements which are included in this
Official Statement are intended to be solely summary in nature and do not purport to be comprehensive or defmitive.
References should be made to each of such documents in their entirety for further information in connection therewith. A
copy of the aforementioned documents are available from the Clerk of the Board of County Commissioners, Jefferson
County, 1820 Jefferson Street, PO Box 1220, Port Townsend, Washington 98368, upon request and payment to the County
for charges of copying and mailing.
This Official Statement is not to be construed as a contract or agreement between the County and Registered Owners of any
of the Bonds. Any statements made in this Official Statement or any Appendices hereto involving matters of opinion,
whether or not expressly so stated, and any estimates are intended as such and not as representations of fact. All estimates
assumptions, statistical information and other statements contained herein, while taken from sources considered reliable, are
not guaranteed as to accuracy or completeness by the Underwriter.
Preliminary Official Statement
Pursuant to Securities and Exchange Commission Rule 15c2-12(b)(I), the County will deem this Preliminary Official
Statement "final", except for the omission of information dependent upon the pricing of the issue and the completion of the
underwriting agreement, such as offering prices, interest rates, selling compensation, aggregate principal amount, and other
terms dependent on the foregoing matters.
Official Statement Certificate
At the time of delivery of the Bonds, one or more officials of the County will furnish a Certificate stating that to the best of
his, her or their knowledge, the Official Statement, as of its date and as of the date of delivery of the Bonds, does not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein, in
light of the circumstances under which they were made, not misleading.
Jefferson County, Washington has authorized the delivery of this Official Statement.
JEFFERSON COUNTY, WASHINGTON
By:
Chairman, Board of County Commissioners
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[This Page Intentionally
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Appendix A
FORM OF LEGAL OPINION
[This Page Intentionally L~ft Blank]
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~ FOSTER PEPPERmc
[FORM OF APPROVING LEGAL OPINION]
Jefferson County, Washington
Re: Jefferson County, Washington, $2,555,000
Limited Tax General Obligation Bonds, 2007
We have served as bond counsel to Jefferson County, Washington (the "County"), in connection
with the issuance of the above referenced bonds (the "Bonds"), and in that capacity have examined such
law and such certified proceedings and other documents as we have deemed necessary to render this
opinion. As to matters of fact material to this opinion, we have relied upon representations contained in the
certified proceedings and other certifications of public officials furnished to us, without undertaking to
verify the same by independent investigation.
The Bonds are issued by the County pursuant to Resolution No. (the "Bond Resolution")
for general County purposes to provide the funds to pay for capital improvements for a 911 Dispatch
Center and to pay the costs of issuance and sale of the Bonds, all as set forth in the Bond Resolution.
For as long as any of the Bonds are outstanding, the County irrevocably has pledged to include in
its budget and to levy taxes annually within the constitutional and statutory tax limitations provided by law
without a vote of the electors of the County on all of the taxable property within the County in an amount
sufficient, together with other money legally available and to be used therefor, to pay when due the
principal of and interest on the Bonds, and the full faith, credit and resources of the County have been
pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that
principal and interest.
Reference is made to the Bonds and the Bond Resolution for the definitions of capitalized terms
used and not otherwise defined herein.
We have not been engaged to review and thus express no opinion concerning the completeness or
accuracy of any official statement, offering circular or other sales or disclosure material relating to the
issuance of the Bonds or otherwise used in connection with the Bonds.
Under the Internal Revenue Code of 1986, as amended (the "Code"), the County is required to
comply with certain requirements after the date of issuance of the Bonds in order to maintain the exclusion
of the interest on the Bonds from gross income for federal income tax purposes, including, without
limitation, requirements concerning the qualified use of Bond proceeds and the facilities financed or
refinanced with Bond proceeds, limitations on investing gross proceeds of the Bonds in higher yielding
investments in certain circumstances and the arbitrage rebate requirement to the extent applicable to the
Bonds. The County has covenanted in the Bond Resolution to comply with those requirements, but if the
County fails to comply with those requirements, interest on the Bonds could become taxable retroactive to
PHONE: 206.447.4400 FAX: 206.447.9700 1111 THIRD AVENUE, SUITE 3400, SEATTLE, WASHINGTON 98101-3299 WWW.FOSTER.COM
SEATTLE WASHINGTON SPOKANE WASHINGTON PORTLAND OREGON
50787222.1
Jefferson County, Washington
[Date]
Page 2
the date of issuance of the Bonds. We have not undertaken Jd do not undertake to monitor the County's
compliance with such requirements. I
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Based upon the foregoing, as of the date of initial del very of the Bonds to the purchaser thereof
and full payment therefor, it is our opinion that under iexisting 1 w:
1. The County is a duly organized and legally ex sting municipal corporation under the laws
of the State of Washington;
2. The Bonds have been duly authorized and ex cuted by the County and are issued in full
compliance with the provisions of the Constitution anti laws of he State of Washington and the Resolutions
of the County relating thereto;
3. The Bonds constitute valid and binding gen al obligations of the County payable from
annual ad valorem taxes to be levied within the constitutional d statutory tax limitations provided by law
without a vote of the electors of the County on all of the taxabl property within the County, except only to
the extent that enforcement of payment may be limited by ba kruptcy, insolvency or other laws affecting
creditors' rights and by the application of equitable principle and the exercise of judicial discretion in
appropriate cases; and I
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4. Assuming compliance by the County after Ithe date of issuance of the Bonds with
applicable requirements of the Code, the interest on the Bond~ is excluded from gross income for federal
income tax purposes and is not an item of tax preference fo purposes of the alternative minimum tax
applicable to individuals; however, while interest on the Bon s also is not an item of tax preference for
purposes of the alternative minimum tax applicable to corpo ations, interest on the Bonds received by
corporations is to be taken into account in the computation of ~usted current earnings for purposes of the
alternative minimum tax applicable to corporatiolls, intere t on the Bonds received by certain S
corporations may be subject to tax, and interest on tht Bonds r ceived by foreign corporations with United
States branches may be subject to a foreign branch profits tax. We express no opinion regarding any other
federal tax consequences of receipt of interest on the Bonds.
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This opinion is given as of the date hereof, and we as,ume no obligation to revise or supplement
this opinion to reflect any facts or circumstances that may her after come to our attention, or any changes
in law that may hereafter occur.
We bring to your attention the fact that the foregoing Jpinions are expressions of our professional
judgment on the matters expressly addressed and do not constinlte guarantees of result.
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Respeqtfully submitted,
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50787222.\
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Appendix B
BOOK-ENTRY ONLY SYSTEM
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SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY -ONLY ISSUANCE
(Prepared by DTC--bracketed material may apply only to certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the
securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede &
Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative ofDTC. One
fully-registered Security certificate will be issued for [each issue of] the Securities, [each} in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any} issue
exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount and an
additional certificate will be issued with respect to any remaining principal amount of such issue.]
2. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC
holds and provides asset servicing for over 2.2 million issues ofU .S. and non- U.S. equity, corporate and municipal debt
issues, and money market instrument from over 100 countries that DTC's participants ("Direct Participants") deposit
with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct
Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants
include both U.S. and non-U.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC").
DTCC, in turn, is owned by a number of Direct Participants ofDTC and Members ofthe National Securities Clearing
Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, FICC, and
EMCC, also subsidiaries ofDTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange
LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such
as both U.S. and non-U.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear
through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on
file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and
www.dtc.org.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which
will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however. expected to
receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from
the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an
authorized representative ofDTC. The deposit of Securities with DTC and their registration in the name of Cede & Co.
or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Securities; DTe's records reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants
.
to Indirect Participants, and by Direct Participants and Indirect ParticiJants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory req rements as may be in effect from time to time.
[Beneficial Owners of Securities may wish to take certain steps to augm nt transmission to them of notices of significant
events with respect to the Securities, such as redemptions, tenders, def; ults, and proposed amendments to the security
documents. For example, Beneficial Owners of Securities may wish to certain that the nominee holding the Securities
for their benefit has agreed to obtain and transmit notices to Beneficia Owners, in the alternative, Beneficial Owners
may wish to provide their names and addresses to the registrar and requ st that copies of the notices be provided directly
to them.]
[6. Redemption notices shall be sent to DTC. IfIess th all of the Securities within an issue are being
redeemed, DTC's practice is to determine by lot the amount of the inte st of each Direct Participant in such issue to be
redeemed.]
7. Neither DTC nor Cede & Co. (nor such other DTC n minee) will consent or vote with respect to the
Securities unless authorized by a Direct Participant in accordance with TC's Procedures. Under its usual procedures,
DTC mails an Omnibus Proxy to Issuer as soon as possible after the r ord date. The Omnibus Proxy assigns Cede &
CO.'s consenting or voting rights to those Direct Participant~ to whose a counts the Securities are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and tiividend pa ments on the Securities will be made to Cede &
Co., or such other nominee as may be requested by an authorized rep sentative ofDTe. DTC's practice is to credit
Direct Participants' accounts, upon DTC' s receipt of ftmds and correspo ding detail infonnation from Issuer or Agent on
payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instruction$ and custo ary practices, as is the case with securities held
for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such
Participant and notofDTC[nor its nominee], Agent, or Issuer, subject any statutory or regulatory requirements as may
be in effect from time to time. Payment of redemption proceeds, distrib tions, and dividend payments to Cede & Co. (or
such other nominee as may be requested by an authorized re(lresentativ ofDTe) is the responsibility ofIssuer or Agent,
disbursement of such payments to Direct Participants will be the res nsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have ts Securities purchased or tendered, through its
Participant, to [T ender/Remarketing] Agent, and shall effect delivery of uch Securities by causing the Direct Participant
to transfer the Participant's interest in the Securities, on DTC's r cords, to [Tender/Remarketing] Agent. The
requirement for physical delivery of Securities in connection with an ptional tender or a mandatory purchase will be
deemed satisfied when the ownership rights in the Securities are transfe ed by Direct Participants on DTC's records and
followed by a book-entry credit of tendered Securities to [Tender/Rem keting] Agent's DTC account.]
10. DTC may discontinue providing its services as secur ties depository with respect to the Securities at
any time by giving reasonable notice to Issuer or Agent. Under suc circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required 0 be printed and delivered.
11. Issuer may decide to discontinue use of the system fbook-entry-only transfers through DTC (or a
successor securities depository). In that event, Security certificates wi I be printed and delivered to DTC.
12. The information in this section concerning DTC and TC's book-entry system has been obtained from
sources that Issuer believes to be reliable, but Issuer takes no responsi iIity for the accuracy thereof.
Aooendix C
AUDIT REPORT
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Washington State Auditor's Office
Financial Statements and Federal Single Audit Report
Jefferson County
Audit Period
January 1, 2005 through December 31,2005
Report No. 71340
Issue Date
September 1, 2006
Washington
State Auditor
Brian Sonntag
!
Washington State ~uditor
Brian Sonntag
September 1, 2006
Board of Commissioners
Jefferson County
Port Townsend, Washington
Report on Financial Statements and Fed~ral Single Audit
Please find attached our report on Jefferson County's financ~al statements and compliance with federal
laws and regulations. 1
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We are issuing this report in order to provide information on thf County's financial condition.
In addition to this work, we look at other areas of our audit tient's operations for compliance with state
laws and regulations. The results of that audit will be incl ded in a separately issued accountability
report.
Sincerely,
Jiq
BRIAN SONNTAG, CGFM
STATE AUDITOR
Insurance Building, P.O. Box 40021 . Olympia, Washington 98504-0021 . (360) ~2-O370 . (866) 902-3900. TOD Relay (800) 833-6388
FAX (360) 753-0646 · http:ttwww_+o.wa_gov
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Table of Contents
Jefferson County
January 1, 2005 through December 31, 2005
Federal Summary....... ........... ...................... ..................... ........ ...................... ........... ............... ............ ......... 1
Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance
and Other Matters in Accordance with Government Auditing Standards ........................................ 2
Independent Auditor's Report on Compliance with Requirements Applicable to each Major
Program and Internal Control over Compliance in Accordance with OMS Circular A-133.............. 4
Independent Auditor's Report on Financial Statements ...............................................................................6
Financial Section............... 0.......... .........0........0.... .................................................................. ........................ 8
Federal sum~ary
Jefferson courity
January 1, 2005 through Oecjember 31, 2005
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The results of our audit of Jefferson County are summarizejd below in accordance with U.S. Office of
Management and Budget Circular A-133. I
· An unqualified opinion was issued on the County's finfncial statements.
· We noted no instances of noncompliance that were I material to the financial statements of the
County.
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We issued an unqualified opinion on the County's cOfPliance with requirements applicable to its
major federal programs. I
We reported no findings, which are required to be disJlosed under OMB Circular A-133.
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We noted in our Independent Auditor's Report on rinancial Statements that the Schedule of
Expenditures of Federal Awards was fairly presented. I
The dollar threshold used to distinguish between TYP~ A and Type B programs, as prescribed by
OMB Circular A-133, was $300,000. I
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· The County qualified as a low-risk auditee under OM Circular A-133.
· The following were major programs during the period nder audit:
CFDA No.
Prooram Title
10.665
14.228
20.205
Schools and Roads Grants to States I
Community Development Block Grantsl~tate's Program
Highway Planning and Construction
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Washington State Auditor's Jce
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Independent Auditor's Report on Internal
Control over Financial Reporting and on
Compliance and Other Matters in Accordance
with Govemment Auditing Standards
Jefferson County
January 1, 2005 through December 31, 2005
Board of Commissioners
Jefferson County
Port Townsend, Washington
We have audited the financial statements of Jefferson County, Washington, as of and for the year ended
December 31, 2005, and have issued our report thereon dated July 31, 2006.
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 County's intemal control over financial reporting
in order to determine our auditing procedures for the purpose of expressing our opinion on the financial
statements and not to provide an opinion on the internal control over financial reporting.
Our consideration of the internal control over financial reporting would not necessarily disclose all matters
in the internal control that might be material weaknesses. A material weakness is a reportable condition
in which the design or operation of one or more of the intemal control components does not reduce to a
relatively low level the risk that misstatements caused by error or fraud in amounts that would be material
in relation to the financial statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions. We noted no matters involving
internal control over financial reporting and its operation that we consider to be material weaknesses.
COMPLIANCE AND OTHER MA TTERS
As part of obtaining reasonable assurance about whether the County's financial statements are free of
material misstatement, we performed tests of the County'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, the objective of our audit of the
financial statements was not to provide an opinion on overall compliance with these provisions.
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 herein under Government Auditing Standards.
This report is intended for the information and use of management, the Board of Commissioners, federal
awarding agencies and pass-through entities. However, this report is a matter of public record and its
Washington State Auditor's Office
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dialribution is nollimiIed, It also serves 10 dissemin~Ie infonnton 10 the public as a reporting lool to help
citizens assess government operations. !
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BRIAN SONNTAG, CGFM
STATE AUDITOR
July 31, 2006
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Washington Sta~ Auditor's 100
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Independent Auditor's Report on Compliance
with Requirements Applicable to each Major
Program and Internal Control over Compliance
in Accordance with OMB Circular A.133
Jefferson County
January 1, 2005 through December 31,2005
Board of Commissioners
Jefferson County
Port Townsend, Washington
COMPLIANCE
We have audited the compliance of Jefferson County, Washington, with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance
Supplement that are applicable to its major federal programs for the year ended December 31, 2005.
The County's major federal programs are identified in the Federal Summary. Compliance with the
requirements of laws, regulations, contracts and grants applicable to its major federal programs is the
responsibility of the County's management. Our responsibility is to express an opinion on the County's
compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to the financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular
A-133 require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have a direct and
material effect on a major federal program occurred. An audit includes examining, on a test basis,
evidence about the County's compliance with those requirements and performing such other procedures
as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis
for our opinion. Our audit does not provide a legal determination on the County's compliance with those
requirements.
In our opinion, the County complied, in all material respects, with the requirements referred to above that
are applicable to its major federal programs for the year ended December 31, 2005.
INTERNAL CONTROL OVER COMPLIANCE
The management of the County is responsible for establishing and maintaining effective internal control
over compliance with requirements of laws, regulations, contracts and grants applicable to federal
programs. In planning and performing our audit, we considered the County's internal control over
compliance with requirements that could have a direct and material effect on a major federal program in
order to determine our auditing procedures for the purpose of expressing our opinion on compliance and
to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the
internal control that might be material weaknesses. A material weakness is a condition in which the
Washington State Auditor's Office
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design or operation of one or more of the internal control co ponents does not reduce to a relatively low
level the risk that noncompliance with applicable requiremen of laws, regulations, contracts and grants
caused by error or fraud that would be material in relation to major federal program being audited may
occur and not be detected within a timely period by employe s in the normal course of performing their
assigned functions. We noted no matters involving! the intern I control over compliance and its operation
that we consider to be material weaknesses. 1
This report is intended for the information of manag~ment, th~oard of Commissioners, federal awarding
agencies and pass-through entities. However, this ,..eport is a atter of public record and its distribution is
not limited. It also serves to disseminate information to th public as a reporting tool to help citizens
assess government operations.
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BRIAN SONNTAG, CGFM
STATE AUDITOR
July 31, 2006
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_OO~AOO~'t
Independent Auditor's Report on Financial
Statements
Jefferson County
January 1, 2005 through December 31, 2005
Board of Commissioners
Jefferson County
Port Townsend, Washington
We have audited the accompanying financial statements of Jefferson County, Washington, for the year
ended December 31, 2005. These financial statements are the responsibility of the County's
management. Our responsibility is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note 1 to the financial statements, the County prepares its financial statements on the
basis of accounting that demonstrates compliance with Washington State statutes and the Budgeting,
Accounting and Reporting System (BARS) manual prescribed by the State Auditor, which is a
comprehensive basis of accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position and results of operations of Jefferson County, for the year ended December 31, 2005,
on the basis of accounting described in Note 1.
In accordance with Government Auditing Standards, we have also issued our report on our consideration
of the County'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.
Our audit was performed for the purpose of forming an opinion on the financial statements taken as a
whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of
additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. The accompanying Schedule of Long-Term
Debt is also presented for purposes of additional analysis as required by the prescribed BARS manual.
Washington State Auditor's Office
6
These schedules are not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of th financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to th~ financial statements taken as a whole.
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BRIAN SONNTAG, CGFM
STATE AUDITOR
July 31, 2006
Financial Section
Jefferson County
January 1, 2005 through December 31, 2005
FINANCIAL STA TEMENTS
Fund Resources and Uses Arising from Cash Transactions - 2005
Notes to Financial Statements - 2005
SUPPLEMENTAL INFORM A TION
Schedule of Long-Term Debt - 2005
Schedule of Expenditures of Federal Awards - 2005
Notes to the Schedule of Expenditures of Federal Awards - 2005
Washington State Auditor's Office
8
MCAG NO.0125
JEFFERSON COUNT~
FUND RESOURCES AND USES ARI.SING FRO~ CASH TRANSACTIONS
For the Year Ending December 31,2005
und 001 General Fund
Original Revised
BARS Budget Budget Actual
CODE I
Beginning Net Cash and Investments 1,765,1~0 ],765,150 ],765,150
Revenues and Other Sources:
310 Taxes 8,603,717 8,603,717 9,101,990
320 Licenses and Permits 24,7 24,734 19,2]4
330 Intergovernmental ] ,694,8 1,856,434 1,695,087
340 Charges for Goods and Services 928,5 9 995,]9] 898,210
350 Fines and Forfeits 443, 443,000 466,743
360 Miscellaneous 305,6 ,3 305,683 622,593
370 Capital Contributions - I
390 Other Financing Sources 648,4t 648,492 637,492
Total Revenues and Other Sources 12,649,0~ ]2,877,25] 13,44] ,329
Total Resources 14,414,1 14,642,401 15,206,479
Operating Expenditures: 1
510 General Government 5,618,7811 5,796,721 5,681,493
520 Public Safety 4'370'6~ 4,687,070 4,594,931
530 Physical Environment 6,855 6,855 6,855
540 Transportation
550 Economic Environment ]43,8 158,866 153,934
560 Mental and Physical Health 22,35 22,350 22,901
570 Cultural and Recreational i
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Total Operating Expenditures I 0, 162,52~ 10,671,862 10,460,114
591-593 Debt Service _ i
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594-595 Capital Outlay !
- I
Total Expenditures 1O,162,52b 10,671 ,862 ]0,460,114
597-99 Other Financing Uses 2,173,68 2,359,275 2,359,275
Excess of Resources Over Uses 2,077,95 I ,611 ,264 2,387,090
380 Nonrevenues ]9,565
580 Nonexpenditures
Ending Net Cash and Investments 1,611,264 2,406,655
The accompanying notes are an integral part of hese financial statements
I
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Washington Sta~ Auditor's otce
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STATEMENT C-4
MCAG NO.0125 JEFFERSON COUNTY STATEMENT C-4
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For the Year Ended December 31,2005
Fund 108 Coooerative Extension Fund 122 JefTCom E-911
BARS Original Revised Original Revised
CODE Budget Budget Actual Budget Budget Actual
Beginning Net Cash and Investments 88,878 88,878 88,878 349,097 349,097 349,097
Revenues and Other Sources:
310 Taxes 378,639 378,639 435,825
320 Licenses and Permits
330 Intergovernmental 174,070 174,961 117,113 464,237 464,237 690,435
340 Charges for Goods and Services 34,600 34,600 20,136 1,275
350 Fines and Forfeits
360 Miscellaneous 11,820 29,820 8,200 255
390 Other Financing Sources 231,871 241,871 233,117 233,024 233,024 233,024
Total Revenues and Other Sources 452,36] 481,252 378,566 1,075,900 ],075,900 ],360,8]4
Total Resources 541,239 570,130 467,444 1,424,997 1,424,997 ],709,911
Operating Expenditures:
510 General Government
520 Public Safety 861,941 861,941 791,597
530 Physical Environment 198,505 209,396 177,302
540 Transportation
550 Economic Environment
560 Menta] and Physical Health
570 Cultural and Recreationa] 253,802 278,802 207,809
Tota] Operating Expenditures 452,307 488,]98 385,]] I 86],941 86],941 791,597
591-593 Debt Service
594-595 Capita] Outlay 10,000 10,000 10,587 10,000 10,000 77,272
Total Expenditures 462,307 498,198 395,698 871,941 871,941 868,869
597-99 Other Financing Uses
Excess of Resources Over Uses 78,932 71,932 71,746 553,056 553,056 84],042
380 Nonrevenues 488 550
580 Nonexpenditures 157,000
Ending Net Cash and Investments 78,932 71,932 72,234 553,056 553,056 684,592
The accompanying notes are an integral part of these financial statements
Washington State Auditor's Office
10
JEFFERSON COUNT~
FUND RESOURCES AND USES ARISING FRO CASH TRANSACTIONS
For the Year Ended December 311,2005
Fund 123 Grant Manal!1!!W!!
Original Revised I
Budget Budget I Actual
87,689 87,689 87,689
MCAG NO.0125
BARS
CODE
Beginning Net Cash and Investments
Revenues and Other Sources:
310 Taxes
320 Licenses and Permits
330 Intergovernmental
340 Charges for Goods and Services
350 Fines and Forfeits
360 Miscellaneous
390 Other Financing Sources
Total Revenues and Other Sources
Total Resources
Operating Expenditures:
510 General Government
520 Public Safety
530 Physical Environment
540 Transportation
550 Economic Environment
560 Mental and Physical Health
570 Cultural and Recreational
Total Operating Expenditures
59]-593 Debt Service
594-595 Capital Outlay
Total Expenditures
597-99 Other Financing Uses
Excess of Resources Over Uses
380 Nonrevenues
580 Nonexpenditures
Ending Net Cash and Investments
STATEMENT Cc4
Fund 125 HotellMotel
Original
Budget
253,858
Revised
Budget
253,858
Actual
253,858
239,554
239,554
267,028
577,646 577,646 389,373
5,000 5,000 6,068
577,646 577,646 389,373 244,554 244,554 273,096
665,335 665,335 477,062 498,412 498,412 526,954
253,316 273,316 226,830
577 ,646 577,645 378,623
577,646 577,645 378,623 253,3]6 273,316 226,830
]4,549 14,549 ]4,549
577,646 577,645 378,623 267,865 287,865 241,379
87,689 87,690 98,439 230,547 210,547 285,575
87,689 87,690 98,439 230,547 210,547 285,575
The accompanying notes are an integral part of tse financial statements
I
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MCAG NO.0125 JEFFERSON COUNTY STATEMENT C-4
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For the Year Ended December 3 I ,2005
Fund 127 Health & Human Serv Fund 128 Natural Resources
BARS Original Revised Original Revised
CODE Budget Budget Actual Budget Budget Actual
Beginning Net Cash and Investments 551,793 551,793 551,793 78,257 78,257 78,257
Revenues and Other Sources:
310 Taxes 35,187 35,187 36,458
320 Licenses and Permits
330 Intergovernmental 1,227,117 1,311,150 1,297,338 335,102 403,142 323,426
340 Charges for Goods and Services 878,163 878,163 940,870 120,000 120,000 76,935
350 Fines and Forfeits
360 Miscellaneous 12,738 20,238 24,380 1,790
390 Other Financing Sources 502,384 570,359 573,696 130,776 138,137 138,137
Total Revenues and Other Sources 2,655,589 2,815,097 2,872,742 585,878 661,279 540,288
Total Resources 3,207,382 3,366,890 3,424,535 664,135 739,536 618,545
Operating Expenditures:
510 General Government
520 Public Safety
530 Physical Environment 591,632 667,033 557,153
540 Transportation
550 Economic Environment
560 Mental and Physical Health 2,758,507 2,924,015 2,876,719
570 Cultural and Recreational
Total Operating Expenditures 2,758,507 2,924,015 2,876,719 591,632 667,033 557,153
591-593 Debt Service
594-595 Capital Outlay
Total Expenditures 2,758,507 2,924,015 2,876,719 591,632 667,033 557,153
597-99 Other Financing Uses
Excess of Resources Over Uses 448,875 442,875 547,816 72,503 72,503 61,392
380 Nonrevenues (216)
580 Nonexpenditures
Ending Net Cash and Investments 448,875 442,875 547,600 72,503 72,503 61,392
The accompanying notes are an integral part of these financial statements
Washington State Auditor's Office
12
MCAG NO.0125 JEFFERSON COUNT STATEMENT C-4
FUND RESOURCES AND USES ARISING FRO CASH TRANSACTIONS
Forthe Year Ended December 1,2005
Fund vel Fund 174 Parks & Rec
BARS Original Revised Original Revised
CODE Budget Budget Actual Budget Budget Actual
Beginning Net Cash and Investments 386,915 386,915 386,915 65,419 65,419 59,762
Revenues and Other Sources:
310 Taxes
320 Licenses and Permits 641,811 641,811 637,366
330 Intergovernmental 67,421 67,421 54,921
340 Charges for Goods and Services 472,618 472,618 568,989 44,855 56,255 50,894
350 Fines and Forfeits
360 Miscellaneous 10,010 10,010 10,010 20,123 21,123 29,168
390 Other Financing Sources 178,542 256,298 256,298 364,602 392,602 392,602
Total Revenues and Other Sources 1,370,402 1,448,158 1,527,584 429,580 469,980 472,664
Total Resources 1,757,317 1,835,073 1,914,499 494,999 535,399 532,426
Operating Expenditures:
510 General Government
520 Public Safety
530 Physical Environment
540 Transportation
550 Economic Environment 1,427,259 1,575,564 1,440,397
560 Mental and Physical Health
570 Cultural and Recreational 429,572 470,239 446,022
Total Operating Expenditures 1,427,259 1,575,564 1,440,397 429,572 470,239 446,022
591-593 Debt Service
594-595 Capital Outlay 784
Total Expenditures 1,427,259 1,575,564 1,440,397 429,572 470,239 446,806
597-99 Other Financing Uses
Excess of Resources Over Uses 330,058 259,509 474,102 65,427 65,160 85,620
380 Nonrevenues 95
580 Nonexpenditures
Ending Net Cash and Investments 330,058 259,509 474,197 65,427 65,160 85,620
The ,""oompanymg ,.... ... '" """"" part 01 r ....""'" .-
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MCAG NO.0125 JEFFERSON COUNTY STATEMENT C-4
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For the Year Ended December 31,2005
Fund 180 Roads Fund 183 Facilities Ml!'mnt
BARS Origina] Revised Origina] Revised
CODE Budget Budget Actua] Budget Budget Actual
Beginning Net Cash and Investments 2,713,586 2,713,586 2,738,379 268,449 268,449 268,019
Revenues and Other Sources:
3]0 Taxes 2,818,743 2,818,743 2,970,838
320 Licenses and Permits 8,030 8,030 3,928
330 Intergovernmental 4,292,449 4,292,449 3,547,524
340 Charges for Goods and Services 5,350 5,350 31,173
350 Fines and Forfeits
360 M isce lIaneous ],660 ],660 6,645 808,940 808,940 827,224
390 Other Financing Sources ]63,950 163,950 913,523 7,956
Tota] Revenues and Other Sources 7,290,182 7,290,]82 7,473,63] 808,940 808,940 835,180
Total Resources 10,003,768 10,003,768 10,212,010 1,077,389 ],077,389 1,103,199
Operating Expenditures:
510 General Government 86,015 86,015 30,492 811,592 811,592 784,885
520 Public Safety
530 Physical Environment
540 Transportation 5,183,991 5,183,991 5,068,597
550 Economic Environment
560 Mental and Physical Health
570 Cultural and Recreational
Total Operating Expenditures 5,270,006 5,270,006 5,099,089 811,592 811,592 784,885
591-593 Debt Service 43,156 43,158 16,842
594-595 Capital Outlay 1,604,426 1,604,426 912,482
Total Expenditures 6,917,588 6,917,590 6,028,413 811,592 811,592 784,885
597-99 Other Financing Uses 20,450 20,450 47,698
Excess of Resources Over Uses 3,065,730 3,065,728 4,135,899 265,797 265,797 318,314
380 Nonrevenues 1,322
580 Nonexpenditures
Ending Net Cash and Investments 3,065,730 3,065,728 4,137,22] 265,797 265,797 318,314
The accompanying notes are an integral part of these fmancial statements
Washington State Auditor's Office
14
MCAG NO.0125 mffRWN co~ STATEMENT C-4
FUND RESOURCES AND USES ARISING FRO CASH TRANSACTIONS
For the Year Ended December 3 ,2005
Fund 301 Construction & ~ Fund 302 County CaDitallmDrov
BARS Original Revised Original Revised
CODE Budget Budget Actual Budget Budget Actual
Beginning Net Cash and Investments 2,645,821 2,645,821 2,637,115 1,041,321 1,041,321 1,041,321
Revenues and Other Sources:
310 Taxes 900,100 900,100 1,520,358
320 Licenses and Permits
330 Intergovernmental 25,000 25,000
340 Charges for Goods and Services 31,223
350 Fines and Forfeits
360 Miscellaneous 5,000 5,000 93 10,000 10,000
390 Other Financing Sources 425,000 425,000 425,000 50,000
Total Revenues and Other Sources 430,000 430,000 456,316 935,100 935,100 1,570,358
Total Resources 3,075,821 3,075,821 3,093,431 1,976,421 1,976,421 2,611,679
Operating Expenditures:
510 General Government
520 Public Safety
530 Physical Environment
540 Transportation
550 Economic Environment
560 Mental and Physical Health
570 Cultural and Recreational
Total Operating Expenditures
591-593 Debt Service 741,180 741,180 740,484
594-595 Capital Outlay 262,503 2,724,157 1,589,091
Total Expenditures 262,503 2,724,157 1,589,091 741,180 741,180 740,484
597-99 Other Financing Uses 4,000 4,000 460,000 460,000 460,000
Excess of Resources Over Uses 2,813,318 347,664 1,500,340 775,241 775,241 1,411,195
380 Nonrevenues
580 Nonexpenditures
Ending Net Cash and Investments 2,813,318 347,664 1,500,340 775,241 775,241 1,411,195
The accompanying notes are an integral part of t~ese financial statements
1
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Wa_'" &~ Aud.".l
15 I
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MCAG NO.0125 JEFFERSON COUNTY STATEMENT C-4
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For the Year Ended December 31,2005
Fund 303 Canital Imnr Courthouse Fund 401 Solid Waste
BARS Original Revised Original Revised
CODE Budget Budget Actual Budget Budget Actual
Beginning Net Cash and Investments 949,576 949,576 947,792 720,508 720,508 716,789
Revenues and Other Sources:
310 Taxes 94,730 35,000 35,000 38,188
320 Licenses and Permits
330 Intergovernmental 35,000 35,000 33,966
340 Charges for Goods and Services 1,980,000 1,980,000 2,295,539
350 Fines and Forfeits 400 400 344
360 Miscellaneous 10,000 10,000 28,905 7,680 7,680 30,533
390 Other Financing Sources 290,000 290,000 294,000 433,687 433,687 6,000
Total Revenues and Other Sources 300,000 300,000 417,635 2,491,767 2,491,767 2,404,570
Total Resources 1,249,576 1,249,576 1,365,427 3,212,275 3,212,275 3,121,359
Operating Expenditures:
510 General Government
520 Public Safety
530 Physical Environment 1,789,605 1,789,605 1,837,410
540 Transportation
550 Economic Environment
560 Mental and Physical Health
570 Cultural and Recreational
Total Operating Expenditures 1,789,605 1,789,605 1,837,410
591-593 Debt Service 157,016 157,016 157,016
594-595 Capital Outlay 2,515,314 2,515,314 115,251 433,687 433,687 16,571
Total Expenditures 2,515,314 2,515,314 115,251 2,380,308 2,380,308 2,010,997
597-99 Other Financing Uses 126,000 126,000 148,000
Excess of Resources Over Uses (1,265,738) (1,265,738) 1,250,176 705,967 705,967 962,362
380 Nonrevenues
580 Nonexpenditures
Ending Net Cash and Investments (1,265,738) (1,265,738) 1,250,176 705,967 705,967 962,362
The accompanying notes are an integral part of these financial statements
Washington State Auditor's Office
16
MCAG NO.0125 JEFfERSON cou1 STATEMENT C-4
fUND RESOURCES AND USES AliIslNG fRO CASH TRANSACTIONS
For the Year Ended December 31,2005
Fund 501 ER&R Fund 506 Information Service
BARS Origina] Revised Origina] Revised
CODE Budget Budget Actual Budget Budget Actual
Beginning Net Cash and Investments 1,533,757 1,533,757 1,533,757 720,596 720,596 713,351
Revenues and Other Sources:
310 Taxes
320 Licenses and Permits
330 Intergovernmental
340 Charges for Goods and Services 283,000 283,000 323,708 48,600 48,600 132,909
350 Fines and Forfeits
360 Miscellaneous 1,378,000 1,378,000 1,528,600 1,053,142 1,053,142 1,074,784
390 Other Financing Sources 25,543 158,000 ] 58,000 158,000
Tota] Revenues and Other Sources 1,661,000 1,661,000 1,877,851 1,259,742 1,259,742 1,365,693
Tota] Resources 3,194,757 3,194,757 3,411,608 1,980,338 1,980,338 2,079,044
Operating Expenditures:
510 General Government 778,524 778,524 727,626
520 Public Safety
530 Physical Environment
540 Transportation 1,228,736 1,228,736 1,361,931
550 Economic Environment
560 Menta] and Physical Health
570 Cultural and Recreational
Total Operating Expenditures 1,228,736 1,228,736 ],361,931 778,524 778,524 727,626
591-593 Debt Service
594-595 Capital Outlay 853,000 853,000 478,511 595,000 685,460 506,254
Total Expenditures 2,081,736 2,081,736 1,840,442 1,373,524 1,463,984 1,233,880
597-99 Other Financing Uses
Excess of Resources Over Uses 1,113,021 1,113,021 1,571,166 606,814 516,354 845,164
380 Nonrevenues 157,1]5 5,716
580 Nonexpenditures
Ending Net Cash and Investments 1,113,021 I,] 13,021 1,728,281 606,814 5]6,354 850,880
Tho a<a>mpa",I", 00'" aM 00 "".,.,.1 part of t.. "",""at _moo"
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17
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MCAG No. 0125
STATEMENT C-5
JEFFERSON COUNTY
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For The Year Ended December 31,2005
SPECIAL REVENUE FUNDS:
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
FUND ]05 Auditor's O&M FUND]06 Courthouse Facilitator
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
89,225 89,225 89,225
53,336 53,336 66,291 11,156
142,561 142,561 155,516 11,156
51,981 51,981 25,943
90,580 90,580 129,573 11,156
90,580 90,580 129,573 11,156
FUND 107 Boating Safety FUND 112 Community Services
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
6,159 6,159 6,159 43,897 43,897 43,897
21,700 26,200 28,721
27,859 32,359 34,880 43,897 43,897 43,897
24,028 28,528 28,374 48,492 48,492 43,897
3,831 3,831 6,506 (4,595) (4,595)
3,831 3,831 6,506 (4,595) (4,595)
FUND] 13 4H After School FUND 120 Crime Victims
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
17,750 17,750 17,840 9,939 9,939 9,939
85,000 85,000 85,500 58,959 58,959 56,508
102,750 ]02,750 103,340 68,898 68,898 66,447
84,070 85,000 71,383 57,476 57,476 47,606
18,680 17,750 31,957 11,422 11 ,422 18,841
18,680 17,750 31,957 11 ,422 11,422 18,841
FUND ]24 Watershed PlaDDing FUND ]29 Animal Services
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
13,9]2 13,912 13,912 53,012 53,012 53,012
100,000 100,000 19,093 182,527 182,527 177,371
113,912 113,912 33,005 235,539 235,539 230,383
100,000 100,000 6,109 178,934 193,546 182,929
13,912 13,912 26,896 56,605 41,993 47,454
13,912 13,912 26,896 56,605 41,993 47,454
The accompanying notes are an integral part of these financial statements
Washington State Auditor's Office
18
JEFFERSON Cf.UNTY
FUND RESOURCES AND USES ARiISINO FR M CASH TRANSACTIONS
For The Year Ended December 31, 2005
FUND 131) Mental Heatb
Original Revised
Budget Budget ctual
I
1,940 1,940 1 1,940
34,975 39,975 39,840
3~915 41~15 41~80
34,975 39,975 39,975
1,940 1,940 1,805
MCAG No. 0125
SPECIAL REVENUE FUNDS:
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
T olal Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
1,940
1,940
1,805
STATEMENT C-5
FUND 135 Jefferson Co Drug
Original Revised
Budget Budget
63,543
20,900
84,443
25,000
59,443
59,443
63,543
20,900
84,443
25,000
59,443
59,443
Actual
63,543
15,221
78,764
12,357
66,407
66,407
FUND 140 Law Library
Original Revised
Budget Budget Actual
23,759
6,900
30,659
14,000
16,659
16,659
23,759
6,900
30,659
14,000
16,659
16,659
23,759
9,096
32,855
14,187
18,668
18,668
FUND 147 Federal Forest Title III
Original Revised
Budget Budget Actual
391,148
180,000
571,148
195,000
376,148
376,148
391,148
180,000
571,148
265,000
306,148
306,148
391,148
208,792
599,940
152,244
447,696
447,696
FUND ISO Treasurer's 0 & M
Original Revised
Budget Budget Actual
23,432 23,432 23,432
27,700 27,700 10,757
51,132 51,132 34,189
24,834 24,834 13,874
26,298 26,298 20,315
26,298 26,298 20,315
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Wa~~oo ~l _00<, t
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FUND 136 Sberiff's Drug l~vest.
Original Revised 1
Budget Budget .f.ctual
11,899
23,210
35,109
26,210
8,899
11,899
23,210
35,109
26,210
8,899
11,899
4,558
16,457
14,157
2,300
I
I
I 2,300
I
FUND 141 Trial Court l~rov
Original Revised i
Budget Budget ~ctual
8,899
8,899
2,842
2,842
2,842
2,842
FUND 148 JefICll Affordable ousing
Original Revised
Budget Budget ctual
28,996 28,996 28,996
60,000 110,000 99,624
88,996 138,996 128,620
50,000 100,000 38,007
38,996 38,996 90,613
38,996 38,996 90,613
MCAG No. 0125
STATEMENT C-5
JEFFERSON COUNTY
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For The Year Ended December 3 1,2005
SPECIAL REVENUE FUNDS:
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total. Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
FUND 151 REET Technology FUND 155 Veterans Relief
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
39,710 39,710 39,710
12,631 35,250 35,250 43,105
12,631 74,960 74,960 82,815
33,550 40,550 33,120
12,631 41,410 34,410 49,695
12,631 41,410 34,410 49,695
FUND 160 Water PollutIon Control Ln FUND 175 County Parks Improv
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
85,206 85,206 85,206 138,407 138,407 133,342
51,000 51,000 4,692 110,560 II 0,560 70,104
136,206 136,206 89,898 248,967 248,967 203,446
70,000 70,000 1,041 155,355 185,355 122, I 49
66,206 66,206 88,857 93,612 63,612 81,297
66,206 66,206 88,857 93,612 63,612 81,297
FUND 177 Special Projects FUND 178 Post Harvest Timber
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
136,551 136,551 137,895 14,817 14,817 14,817
513,945 513,945 140 140 312
650,496 650,496 137,895 14,957 14,957 15,129
513,945 513,945 6,779 3,125 3,125
136,55 I 136,55 I 131,116 11 ,832 11,832 15,129
136,55 I 136,55 I 131,116 11,832 11 ,832 15,129
FUND 181 JC Emergency Road Resv. FUND 185 F1ood1Stormwater
Original Revised Original Revised
Budget Budget Actual Budget Budget Actual
609,201 609,201 609,201 30,909 30,909 27,846
5,600 5,600 14,729 62,491 94,522 90,638
614,801 614,801 623,930 93,400 125,431 118,484
556,458 556,458 83,322 123,322 114,512
614,801 58,343 67,472 10,078 2,109 3,972
614,801 58,343 67,472 10,078 2,109 3,972
The accompanying notes are an integral part of these financial statements
Washington State Auditor's Office
20
i
JEFFERSON CfUNTY
FUND RESOURCES AND USES ARISING FRO CASH TRANSACTIONS
For The Year Ended December 3 ,2005
i
i
FUND 186 Brinnon Flood Cpntrol
Original Revised i
Budget Budget jctual
11,545 11,545 11,545
11,545 11,545 11 ,545
898 898
10,647 10,647 i 11,545
MCAG No. 0125
SPECIAL REVENUE FUNDS:
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
DEBT SERVICE FUNDS
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
CAPITAL FUNDS
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
111,545
FUND 202 RID Bond~
Original Revised
Budget Budget ctual
10,647
10,647
STATEMENT C-S
FUND 187 Quilcene Flood
Original Revised
Budget Budget
106,997
29,702
136,699
178,943
(42,244)
(42,244)
106,997
29,702
136,699
178,943
(42,244)
(42,244)
Actual
104,312
66,097
170,409
23,665
146,744
146,744
FUND 204 Debt Service
Original Revised
Budget Budget
Actual
543,464
1,312,158
1,855,622
1,307,707
547,915
547,915
FUND 306 Public Infrastructure
Original Revised
Budget Budget Actual
834,529
135,500
970,029
200,000
770,029
770,029
834,529
135,500
970,029
269,105
700,924
700,924
834,529
183,129
1,017,658
69,105
948,553
948,553
FUND 308 Conservation Futures
Original Revised
Budget Budget Actual
403,030
178,900
581,930
172,700
409,230
409,230
1
i
The accompanying notes are an integral part of ttse financial statements
i
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""~on Sa~ Aud'~, +
21
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1
I
10,739
1,291
12,030
2,677
9,353
9,353
FUND 304 HJ Carroll pjrk
Original Revised
Budget Budget ctual
40,735 40,735 139,632
35,000 35,000 36,121
75,735 75,735 1 75,753
84,386 84,386 i 7,700
(8,~51) (8,~51) 168,~53
(8,~51) (8,~51) 168'~53
FUND 307 Rural Co Assista e Res
Original Rllvised i
Budget Budget 1ctual
i
182,045
. 818
82,863
80,794
2,069
82,045
.82,045
82,045
80,794
1,251
82,045
80,794
1,251
1,251
1,251
2,069
403,030
178,900
581,930
218,040
363,890
363,890
419,030
212,753
631,783
161,900
469,883
469,883
MCAG No. 0125
JEFFERSON COUNTY
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For The Year Ended December 31, 2005
ENTERPRISE FUNDS
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
INTERNAL SERVICE FUNDS
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
Beginning Net Cash and Investments
Revenues and Other Financing Sources
Total Resources
Expenditures and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Investments
FUND 402 SW Post Closure
Original Revised
Budget Budget Actual
113,103
1,200
114,303
6,000
108,303
I 13,103
1,200
114,303
6,000
108,303
113,103
3,307
116,410
6,000
110,410
STATEMENT C-5
FUND SW Equipment Reserve
Original Revised
Budget Budget Actual
797,074
133,000
930,074
427,687
502,387
502,387
797,074
133,000
930,074
427,687
502,387
502,387
797,074
172,611
969,685
969,685
969,685
FUND 503 JC Unemployment Res
Original Revised
Budget Budget Actual
282,307
105,000
387,307
100,000
287,307
287,307
282,307
105,000
387,307
100,000
287,307
287,307
282,307
119,666
401,973
15,067
386,906
386,906
FUND 50S Employee Benefit Res
Original Revised
Budget Budget Actual
156,323
62,000
218,323
76,500
141,823
141,823
The accompanying notes are an integral part of these financial statements
108,303
108,303
110,410
156,323
62,000
218,323
126,500
91,823
91,823
156,323
59,580
215,903
71,308
144,595
144,595
FUND 405 Tri Area Sewer
Original Revised
Budget Budget Actual
80,794 80,794 149,899
80,794 80,794 149,899
80,000 80,000 33,975
794 794 115,924
794 794 115,924
FUND 562 Risk Management
Original Revised
Budget Budget Actual
142,644
234,000
376,644
234,000
142,644
142,644
234,000
376,644
234,000
142,644
142,644
94,751
237,395
85,251
152,144
142,644
142,644
152,144
FUND 564 Industrial Insurance
Original Revised
Budget Budget Actual
98,559 . 98,559 98,559
20,000 20,000
118,559 118,559 98,559
28,144 28,144 28,324
90,415 90,415 70,235
90,415 90,415 70,235
Washington State Auditor's Office
22
i
JEFFERSON CbUNTY
FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For The Year Ended December 31 ' 2005
FUND 606 JC Dralnfield ltrust
Original Revised 1
Budget Budget Actual
i
1'131,590
3,889
135,479
MCAG No. 0125
TRUST FUNDS
Beginning Net Cash and Investments
Revenues and Other Financing SOllTces
Total ResollTces
ExpenditllTes and Other Financing Uses
Excess (Deficit) ofResollTces Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Invesnnents
Beginning Net Cash and Invesnnents
Revenues and Other Financing SOllTces
Total ResollTces
ExpenditllTes and Other Financing Uses
Excess (Deficit) of Resources Over Uses
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Invesnnents
AGENCY FUNDS
135,479
135,479
I
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FUND 629 Animal Svs Dona11on Tr
Original Revised .
Budget Budget 1ctual
I
i 8,838
15,477
24,315
8,691
15,624
8,838
1,500
10,338
5,500
4,838
8,838
1,500
10,338
5,500
4,838
i
115,624
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FUND 640 County FaiJ
Original Rtvised I
Budget Budget ctual
4,838
4,838
Beginning Net Cash and Investments 37,754 37,754 37,754
Revenues and Other Financing SOllTces 200,000 200,000 41,874
Total ResollTces 237,754 237,754 79,628
ExpenditllTes and Other Financing Uses 200,000 240,000 39,988
Excess (Deficit) of ResollTces Over Uses 37,754 (2,246) 39,640
Nonrevenues (Except 384 and 388.80)
Nonexpenditures (Except 584 and 588.80)
Ending Net Cash and Invesnnents 37,754 (2,246) 39,640
STATEMENT C-5
FUND 625 Inmate Commissary Tr
Original Revised
Budget Budget
Actual
62,959
81,939
144,898
95,142
49,756
49,756
FUND 641 JC Community Network
Original Revised
Budget Budget
28,908
67,854
96,762
93,614
3,148
28,908
67,854
96,762
93,614
3,148
3,148
3,148
The accompanying notes are an integral part of uise financial statements
I
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23
I
Actual
28,908
62,057
90,965
74,928
16,037
16,037
"
.
JEFFERSON COUNTY
NOTES TO FINANCIAL STATEMENTS
JANUARY 1,2005 through DECEMBER 31, 2005
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
The county of Jefferson uses the revenue and expenditure classifications contained in the Budgeting,
Accounting and Reporting System (BARS) manual. The manual is prescribed by the State Auditor's
Office under the authority of Washington State law, Chapter 43.09 RCW.
The county of Jefferson was incorporated on December 22, 1852, and operates under the laws of the
State of Washington applicable to a county with commissioner form of government. The county is a
general-purpose government and provides planning and zoning, public safety, road improvement, parks
and recreation, judicial administration, health and social services, and general administrative services.
a. FUND ACCOUNTING
The accounts of the county are organized on the basis of fund and account groups, each of
which is considered a separate accounting entity. Each fund is accounted for with a separate set
of single-entry accounts that comprise its cash, investments, revenues and expenditures as
appropriate. The county's resources are allocated to and accounted for in individual funds
depending on their intended purpose. The following are the fund types used by the county.
GOVERNMENTAL FUND TYPES:
General (Current Expense) Fund
This fund is the primary operating fund of the county. It accounts for all financial resources
except those required or elected to be accounted for in another fund.
Special Revenue Funds
These funds account for revenues that are legally restricted or designated to finance particular
activities of the county.
Debt Service Funds
These funds account for the accumulation of resources to pay principal, interest and related costs
on general long-term debt.
Capital Proiects Funds
These funds account for financial resources, which are designated for the acquisition or
construction of general government capital improvements.
PROPRIETARY FUND TYPES:
Enterprise Funds
These funds account for operations that provide goods or services to the general public and are
supported primarily through user charges.
Internal Service Funds
These funds account for operations that provide goods or services to other departments or funds
of the county or to other governmental units on a cost reimbursement basis.
FIDUCIARY FUND TYPES:
Fiduciary funds account for assets held by the county on behalf of other governments, and other
funds.
Washington State Auditor's Office
24
b.
i
,
JEFFERSON COU~
NOTES TO FINANCIAL ST TEMENTS
JANUARY 1,2005 through DECE,MBER 31, 2005
i
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Private-Purpose Trust Funds I
These funds report all trust arrangements which PrintiPal and income benefit individuals, private
organizations or other governments.
Aoency Funds t
These funds are used to account assets that Jeffe on County holds for others in an agency
capacity.
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BASIS OF ACCOUNTING
Jefferson County maintains its governmental, fiducia and internal service funds on a modified
cash basis method. The basis of accounting refe to when revenues and expenditures are
recognized in the accounts and reported in the finan ial statements. Revenues are recognized
only when cash is received and expenditures are recognized when paid, including properly
chargeable against the report year budget appro riations as required by state law. This
prescribed cash basis accounting is a dePFlrture fro generally accepted accounting principles
(GAAP).
Purchases of capital assets are expensed durinJ the year of acquisition. There is no
capitalization of capital assets, nor allocation of de9reciation expense. Inventory is expensed
when purchased. .
c. BUDGETS AND BUDGETARY ACCOUNTING
1. Scope of Budoet
Annual appropriated budgets are adopted f r the general, special revenue and for all
proprietary funds. Budgetary accounts are ntegrated in fund ledgers for all budgeted
funds. Budgets for debt service, and special assessment funds are adopted at the level
of the individual debt issue or project and for Iseal periods that correspond to the lives of
debt issues or projects. Since these funds a not budgeted on annual basis, budgetary
comparisons are not presented. .
Annual appropriated budgets are adopted at e level of the fund. Subsidiary revenue
and expenditure ledgers are used to co pare the budgeted amounts with actual
revenues and expenditures. As a manage ent control device, the subsidiary ledgers
monitor expenditures for individual fun tions and activities by object class.
Appropriations lapse at year-end.
,
2. Procedures for Adootino the Orioin~l Budoet I
The county's budget procedures are mandate by RCW 36.40. The steps in the
budget process are as follows:
a.
Prior to the first Tuesday in Novem r the county auditor submits a proposed
budget to the commission. . This bud et is based on priorities established by the
commission and estimates provided b county departments during the preceding
months, and balanced with revenue e timates made by the county treasurer.
1
The commission conducts public hearlngs on the proposed budget in December.
The commission makes its adjustme ts to the proposed budget and adopts by
resolution a final balanced budget no I ter than December 31 s1.
b.
c.
d.
Within 30 days of adoption the final b dget is available to the public.
Washington State Auditor's
2$
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JEFFERSON COUNTY
NOTES TO FINANCIAL STATEMENTS
JANUARY 1, 2005 through DECEMBER 31, 2005
3. AmendinQ the BudQet
The county auditor is authorized by the county commissioners to transfer budgeted
amounts between departments within any fundlobject classes within departments. Any
revisions that: alter the total expenditures of the county, or that affect the number of
authorized employee positions, salary ranges, hours, or other conditions of employment,
must be approved by the county commission.
When the county commission determines that it is in the best interest of the county to
increase or decrease the appropriation for a particular fund or department, it may do so
by resolution approved by a simple majority after advertising for two consecutive weeks,
and holding one public hearing.
The budget amounts shown in the financial statements are the final authorized amounts
as revised during the year.
d. Assets. Liabilities and Eauities
1. Cash and Equivalents
It is the county's policy to invest all temporary cash surpluses. At December 31, 2005,
the treasurer was holding $4,679,247 in short-term residual investments of surplus cash.
This amount is included in the net cash and investments shown on the statements of
fund resources and uses arising from cash transactions. The interest on these
investments is prorated to the various funds.
2. Deposits
The county's deposits and certificates of deposits are covered by the Federal Deposit
Insurance Corporation and/or the Washington Public Deposit Protection Commission.
3. Temporary Investments - See Note #3
4. Amounts Due To and From Other Funds: Interfund Loans and Advances Receivable
These accounts include Solid Waste interfund receivables and payables. A separate
schedule of interfund loans receivable and payable is furnished in Note #5.
5. Inventories
The cost of expendable supplies is recorded as an expenditure at the time individual
items are purchased. These supplies are not inventories.
Inventories in proprietary funds (Solid Waste) are valued by the FIFO method, which
approximates the market value.
6. Accumulated Unpaid Emplovee Leave Benefits
Compensated absences are absences for which employees will be paid.
The county records all accumulated unused vacation and sick leave. The Compensation
time balances at year-end are carried over into the following year.
Washington state Auditor's Office
26
- ,
JEFFERSON COUN
NOTES TO FINANCIAL ST A EMENTS
JANUARY 1, 2005 through DECE BER 31, 2005
8.
Non-represented employees have. Paid Tim~ Off (PTO) in lieu of vacation and sick.
Year-end carry over of PTO can be 30-60 da~s depending on length of service.
Vacation pay, which may be accumulated Ip to 6 weeks maximum, is payable upon
resignation, retirement or death, but. only 3 w eks is allowed to be carried over to a new
year. Sick leave may accumulate up to 2 0 days, and upon retirement, employees
receive 25% of their sick leave.
Capital Assets I
Capital assets are long-lived assets of the founty, and are recorded as expenditures
when purchased. 1
,
Lona-term Debt - See Note #8. I
Other Financina Sources or Uses 1
The county's "Other Financing Sources" con~' sts of $583,595 in proceeds from the sale
of (timber) assets, and $53,897 transfer from ommunity Service and Law Library funds.
The county's "Other Financing Uses" consist of operating transfers made to other funds
within Jefferson County. A summary is as fol ows:
7.
10.
Receivina Fund
Amount
Health & Human Services
Jeff Com
Cooperative Extension
Crime Victims
Capital Improv Courthouse
Natural Resources
Parks & Recreation
Animal Services
Community Development
Boating Safety
Information Services
Total
570,359
233,024
231,871
23,307
290,000
138,137
372,152
78,427
256,298
7,700
158,000
$2,359,275
NOTE 2 - STEWARDSHIP. COMPLIANCE AND AqCOUNTA~
. !
There have been no material violations of finance-related lega~or contractual provisions.
The Law Library Fund #140-000-010 expenditures exceede legal appropriations by $187 because a
new computer system's over budget function capability was n t tested. The Law Library had $18,668 in
fund balance as of December 31, 2005.
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27 I
JEFFERSON COUNTY
NOTES TO FINANCIAL STATEMENTS
JANUARY 1, 2005 through DECEMBER 31, 2005
NOTE 3 - DEPOSITS AND INVESTMENTS
Deposits
The county's deposits and certificates of deposit are entirely covered by federal depository insurance
(FDIC) or by collateral held in a multiple financial institution collateral pool administered by the
Washington Public Deposit Protection Commission (PDPC).
Investments
As required by state law, all deposits and investments of the county's funds are obligations of the U. S.
Govemment, State Treasurers Investment Pool, bankers' acceptances, or deposits with Washington
State banks and savings and loan institutions.
All temporary investments are stated at cost. Other property and investments are shown on the
combined balance sheet at cost.
The county's investments are categorized to give an indication of the risk assumed at year-end. The
following summary shows the county's investments at year-end categorized by risk. Category 1 includes
investments that are insured, registered or held by the county or its agent in the county's name. Category
2 includes uninsured and unregistered investments, which are held by the broker or dealer, trust
departments or agent in the county's name. Category 3 includes uninsured and unregistered investments
for which the securities are held by the counter party, or its trust department or agent, but not in the
county's name. The county holds no category 2 or category 3 investments.
Category 1 Carrying Market Value I
Amount
$ 10,675,574 $ 10,675,574 $10,675,574
-0- -0- -0-
11,157.451 11,157.451 11,012,180
0 0 0
$ 21.833.025 $ 21.833.025 $21.687.755
$ 34.433.372 $ 31.433,372 $ 31.433,372
1.292 1.292 1.292
$ 56.267 .6~0 $ 56.267.690 $ 53.122.419
Time Deposits
Repurchase Agreements
U.S. Government Securities
Bankers' Acceptances
TOTALS
Investment in State
Treasurer's Investment Pool
Other Investments
(passbook savings/money markets)
TOTAL INVESTMENT
NOTE 4 - PROPERTY TAXES
The county treasurer acts as an agent to collect property taxes levied in the county for all taxing
authorities. Collections are distributed at the end of each month.
Property tax revenues are recognized when cash is received by the county. Delinquent taxes are
considered fully collectible because a lien affixes to the property atter taxes are levied.
Property Tax Calendar
January 1
February 14
April 30
May 31
Taxes are levied and become an enforceable lien against properties.
Tax bills are mailed.
First of two equal installment payments is due.
Assessed value of existing property is listed by the county assessor for
next year's levy at 100 percent of its January 1 market value.
Washington State Auditor's Office
28
,
I
JEFFERSON COUNlrv
NOTES TO FINANCIAL STA~EMENTS
JANUARY 1, 2005 through DECE~BER 31, 2005
I
October 31
I
Last official date to file an tppeal of the property assessment to the
County Board of Equalization
Assessed value of new cons ruction is listed by the county assessor for
next year's levy at 100 perce t of its July 31 market value.
Second installment is due.
July 1
August 31
December 31
Finalized assessment rolls re certified to the county treasurer by the
county assessor for next yea ,s levy.
I
1
Property taxes are recorded as a receivable when levied, offset by deferred revenue. During the year,
property tax revenues are recognized when cash is collected[ The balance of taxes receivable includes
related interest and penalties. ~'
The combined county operations and county road levy rat s shall not exceed $4.05 per $1,000 of
assessed valuation subject to the following limitations:
A. The county road levy rate shall not exceed $2.25 per ~ 1,000.
I
The growth, for County general purpose, to, regular p~operty tax levies in 2004 was limited to 1.0
percent per year based on existing property. Taxfs from new construction property are in
addition to the 1.0 percent limitation. I
I
B.
C. The combined statutory limitation of $5.90 per $1,000 for most regular levy rates within any given
tax code area is not exceeded (Le. county, city, roads, fire, hospital, library, cemetery, park).
D. The Washington State Constitution limits the total reg lar property taxes to 1 percent of assessed
valuation. (exclusive of voter approved bonds and ex ess levies, Port levies, and P.U.D. levies).
,
The county's regular levy for 2005 was $1.72625 per $1,000 on an assessed valuation of $3,137,724,380
for a total regular levy of $5,416,497. I
The county is also authorized to levy $2.25 per $1,0.00 of assf' ssed valuation in unincorporated areas for
road construction and maintenance. This levy is subject to t e same limitations as the levy for general
government services. The county's road levy for 2005 w s $1.29909 per $1,000 on an assessed
valuation of $2,362,427,795 for a total road levy of $3,069,006
Of the $3,069,006 road levy, the county diverted $387,105 to ~e General Fund for Sheriff Traffic Deputy
costs per RCW 84.52.043 (1) (d). '
NOTE 5 - INTERFUND TRANSACTIONS AND BALANCES I
,
A.
1.
Transactions that would be treated as rev nues, expenditures or expenses if they
involved external organizations, such as buyi g goods and services or payments in lieu
of taxes, are similarly treated when they involv other funds of the county.
i
Transfers to support the operations of other fynds are recorded as "Operating Transfers"
and classified with "Other Financing Sources qr Uses."
2.
3.
Interfund loans do not affect total fund equity, ut advances to other funds are offset by a
reservation of fund equity.
Washington State Auditor's Ice
29
JEFFERSON COUNTY
NOTES TO FINANCIAL STATEMENTS
JANUARY 1,2005 through DECEMBER 31, 2005
The following table displays interfund loan activity during 2005:
Borrowing
Fund
Lending
Fund
Balance
1/1/2005
New Loans Reoavments
Balance
12/31/2005
Jeff Com
ER&R
$157,000
-0- $157,000
-0-
NOTE 6 - PENSION PLANS
Substantially all county full-time and qualifying part-time employees participate in one of the following
statewide local government retirement systems administered by the Department of Retirement Systems
(DRS), under cost-sharing multiple-employer public employee retirement systems.
Historical trend and other information regarding each plan are presented in the State Department of
Retirement Systems 2001 annual financial report. A copy of this report may be obtained at:
Department of Retirement Systems
Capital Plaza Building
1025 E. Union Street
P.O. Box 48380
Olympia, WA 98504-8380
The state legislature established PERS in 1947 under Chapter 41.40 RCW. PERS is a cost-sharing
multiple-employer system. 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. Approximately 51 percent of PERS I salaries and 44 percent of PERS 1/ salaries are
paid to state employees
PUBLIC EMPLOYEE'S RETIREMENT SYSTEMS (PERS)
PERS contains three plans. As used in this context, the term plan refers to tiers within PERS. The actual
plan is PERS. Participants who joined the system by September 30, 1977, are Plan I members. Those
who joined atter October 1, 1977 and by either, August 31, 2002, are Plan" members unless they
exercise an option to transfer their membership to Plan III. Retirement benefits are financed from
employee and employer contributions and investment earnings. Retirement benefits in both. Plan I and
Plan II are vested atter completion of five years of eligible service.
Plan I members are eligible for retirement atter 30 years of service, or at the age of 60 with five years of
service, or at the age of 55 with 25 years of service. The annual pension is two percent of the final
average salary per year of service, capped at 60 percent.
Plan II 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 two percent per year of service of the final average salary. Plan II retirements prior to 65
are actuarial reduced. There is no cap on years of service credit and a cost-of-living allowance is granted
capped at three percent annually.
Plan III has a dual benefit structure. Employer contributions finance a defined benefit component, and
member contributions finance a defined contribution component. The defined benefit portion provides a
benefit calculated at 1 percent of the average final contribution for the greatest compensation during any
consecutive 60-month period. Members may retire if they have: at least ten years of service; or five years
including twelve months that were earned atter age 54; or five years of service credit years earned in
Washington State Auditor's Office
30
JEFFERSON COUNE
NOTES TO FINANCIAL ST A EMENTS
JANUARY 1, 2005 Ihro4Qh DECE BER 31, 2005
I
PERS Plan 2 prior to June 1, 2003. There is no cap on year of service credit, and Plan 3 provides the
same cost-of-Iiving allowance as Plan 2.
Each biennium the legislature establishes Plan I employer c ntribution rates and Plan II employer and
employee contribution rates. Employee contribution rates for !Plan I are established by legislative statute
and do not vary from year to year. I
PUBLIC EMPLOYEE'S RETIREMENT SYSTEMS (fERS)
Employer rates for Plan I are not necessarily ad~quate to ully fund the system. The employer and
employee contribution rates for Plan II are developed by th Office of State Actuary to fully fund the
system. All employers are required to contribute at the level e tablished by the legislature. The methods
used to determine the contribution requirements were establis ed under state statute.
The required contribution rates expressed as a percentage o~ covered payroll as of December 31, 2005
~re: I
Plan I
Plan II
Plan III
Employer *
Employee
2.44%
6.00%
2.44%
1.18%
2.44%**
***
* The employer rates do not include the employer administ tive expense fee currently set at 0.19%.
** Plan 3 defined benefit portion only.
*** Variable from 5.0% minimum to 15.0% maxim~m based 1n rate selected by the PERS 3 member.
Both county and the employees made the required tontributio s. The county's required contributions for
the year ended December 31, were:
Plan I Plan II
2005 $14,044 $162,947
2004 $14,724 $116,880
2003 $13,582 $112,326
Plan III
$14,519
$9,171
$7,043
LAW ENFORCEMENT OFFICERS' AND FIRE FIG~TERS' R
LEOFF was established in 1970 by the legislature under Chafer 41.26RCW. LEOFF is a cost-sharing
multiple-employer defined benefit retirement system. embership includes all full-time. fully
compensated, local law enforcement officers and.. fire fight 1'$. Retirement benefits are financed by
employee and employer contributions, investment' earnings and legislative appropriation. LEOFF is
comprised solely of nonstate employees.
LEOFF system contains two plans. Participants who joined th~ system by September 30, 1977, are Plan
I members. Those who joined thereafter are enrolled in Plap II. Retirement benefits are vested after
completion of five years of eligible service.
Plan I participants are eligible to retire with five yeal'$ of servic at age 50. The benefit per year of service
is as follows:
Term of Service
20+
10-20
05-10
Percent of Final Averaae
2.0%
1.5%
1.0%
Washington State Auditor's
31
ce
f,
~
JEFFERSON COUNTY
NOTES TO FINANCIAL STATEMENTS
JANUARY 1,2005 through DECEMBER 31, 2005
The final average salary is based on salary received during the last 2 years of service. Substantial
disability and death benefits are provided by the plan. Retirement benefits are indexed to the Seattle
area consumer price index.
Plan II participants are eligible to retire at the age of 50 with 20 years of service or at 55 with five years of
service. Retirement benefits prior to age 55 are actuarial reduced. The benefit is 2 percent of average
salary per year of service. The average salary is based on the highest five-year period. Retirement
benefits are indexed to the consumer price index with a cap of 3 percent annually. Death and disability
benefits are also provided. These benefit provisions wereestablished under the authority of legislative
statute.
Employer and employee contribution rates for Plan II are developed by the Office of State Actuary to fully
fund the system. Plan II employers and employees are required to pay at the level established by the
legislature. Plan I employers and employees are required to contribute at a rate of 6 percent and the
state is responsible for the balance of the funding. The methods used to determine the contribution
requirements were established under the authority of legislative statue. During the 1997 legislative
session, a portability benefit was provided for members of LEOFF who later established membership in
another system.
The required contribution rates expressed as a percentage of covered payroll as of December 31, 2003
were:
LEOFF I
LEOFF II
Employer
Employee
State
0.19%
0.00%
nla
4.39%
6.99%
2.79%
Both the county and the employees made the required contributions. The county's required contributions
for the years ended December 31, were:
2005
2004
2003
LEOFFI
$213
$128
$130
LEOFF II
$38,438
$33,879
$31,299
NOTE 7 - RISK MANAGEMENT
Jefferson County is a member of the Washington Counties Risk Pool ("Pool") which was formed August
18, 1988 when counties in the State of Washington joined together by signing an interlocal agreement to
pool their self-insured losses and jointly purchase insurance and related administrative services. Chapter
48.62 RCW authorizes the goveming bodies of governmental entities to form together into or join a pool
or organization for the joint purchasing of insurance, and/or joint self-insuring, and/or joint hiring or
contracting for risk management services to the same extent that they may individually purchase
insurance, self-insure, or hire or contract for risk management services. This agreement to form the Pool
was made pursuant to the provisions of Chapter 39.34 RCW, the Interlocal Cooperation Act. The Pool is
presently comprised of twenty-eight of the state's counties.
The Pool allows its member counties to establish a plan of self-insurance, and to jointly purchase excess
insurance and related services. All Pool joint self-insurance liability coverages, including public officials'
errors and omissions. are on an "occurrence" basis. The Pool also provides the counties with a property
insurance program with extraordinary coverage limits, and has arranged for both special
events/concessionaires and environmental insurance coverages to be purchased as group purchase
options for its member counties.
Washington State Auditor's Office
32
i
JEFFERSON COUN~
NOTES TO FINANCIAL ST A EMENTS
JANUARY 1, 2oo5lhrough DECE BER 31, 2005
,
i
I
i
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I
The Risk Pool is governed by a board that is comprised of lone director (and one or more alternates)
appointed by each participating member county from the ~ounty's own officials or employees. An
executive committee is responsible for overseeing the business affairs of the Pool is selected by the
Pool's board of directors from its membership. including alternbte directors, during each annual meeting.
Claims . filed with the Pool are subject tolhe dedU". tible am~nt selected by the filing county. Member
deductibles range from $10,000 to $500,000 per occurrenc. The Pool, which is fully funded by the
annual assessments contributed by its member countie , acquires from unrelated underwriters
reinsurance with a self-insured retention of $100,000 per occ rrence and excess insurance. The member
counties are responsible for amounts within their deductibles 1 for each claim and the Pool is responsible
for any difference remaining up to the $100,000self-insur d retention. The reinsurance an excess
insurance carries cover all losses exceeding the greater of e Pool's retention of the member county's
deductible to the maximum limits of their policies, presently 20 million or $25 million depending on the
member county. Claim reserves are established for the Pol's retention layer for both reported and
unreported insured events and include estimates of undisco nted future cash payments of losses and
related claim adjustment expenses.
.-
Member counties contract initially to remain in the Pool for fi e years and renew annually automatically.
Following the initialS-year commitment, a county mCl3y terminaf its Pool membership at the conclusion of
any Pool fiscal year if the county has timely pro\rided the quired notice. Even after termination. a
member county is responsible for contributions to the Poo for any unresolved, unreported, and in-
process claims for the period(s) that it was a signatory to the i*erlocal agreement.
Under RCW 48.62.141 and the Interlocal Agreement, conting~nt liability of participants in is established if
a program's assets are insufficient to cover the program's Ii bilities. Deficits of the Pool are financed
through retroactive assessments of the member counties. T e Pool's overall reassessments receivable
balance as of December 31,2005 is $1,621,429. Jefferson Co nty's reassessment has been fully paid.
The county maintains insurance against most normal haz~rds. The county joined the Washington
Counties Risk Pool in October 1989. There is $150.000 mai~tainedas a reserve for the risk pool in the
Risk Management Reserve Fund. As of December 31, 200~ the county had $82,002 of loses incurred
but not reported (IBNR). 1
UNEMPLOYMENT i
The county has elected to become self-insured in unemPloym1nt. The claims are processed through the
State of Washington Employment Security Department. Base on the estimates, the county's balance for
probable losses at December 31, 2005 was as follows: I
Unemploym.ent: $386.r05
Claims settlements for the last quarter of 2005 in the amount bf $173 were payable as of December 31,
2005. The State of Washington Employment Security Departfent bills the county quarterly. No estimate
of unpaid claims was available. I
NOTE 8 - LONG-TERM DEBT AND CAPITAL LEA~ES
A. LONG-TERM DEBT 1
The accompanying Schedule of Long-Term Debt I(SChedule 09) provides a listing of the
outstanding debt of the county and summarizes the 1 county's debt transactions for 2005. The
annual requirements to amortize outstanding debt, inqluding interest and capital lease payments,
are as follows: I
I
I
i
-ooroo ~ -~. +
I
I
,
/.
JEFFERSON COUNTY
NOTES TO FINANCIAL STATEMENTS
JANUARY 1, 2005 through DECEMBER 31, 2005
G.O OTHER DEBT
2006
2007
2008
2009-2021
TOTAL
956,655
951,843
955,620
9.348.137
$12.247.543
B. SPECIAL ASSESSMENT DEBT
Assessment debt is excluded from the amortization schedule above because debt service
requirements for special assessment bonds will be met by the collection of assessments
receivable that have been levied against property owners. The assessments are liens against
the property and subject to foreclosure. The County had $4,146 in outstanding assessment debt
as of December 31, 2005.
NOTE 9 - CONTINGENCIES AND LITIGATION
The County has recorded in its financial statements all material liabilities. Estimates for situations which
are not yet resolved or are not yet known are assumed to be covered by Washington Counties Insurance
Risk Pool or Jefferson County Insurance reserves. In the opinion of management, the county has
adequate insurance and reserves to pay all known or pending claims.
As discussed in Note #8, the County is contingently liable for repayment of refunded debt.
The County participates in a number of federal-and state-assisted programs. These grants are subject to
audit by the grantors or their representatives. Such audits could result in requests for reimbursement to
grantor agencies for expenditures disallowed under the terms of the grants. The County management
believes that such disallowance, if any, will be immaterial.
NOTE 10 - FUND EQUITIES DESIGNATED FUND BALANCES AND RETAINED EARNINGS
This category is used to set aside fund equity when county management has plans or tentative
commitments to expend resources for certain purposes in future periods. Further legal action will be
required to authorize the actual expenses or expenditures.
NOTE 11 - POST-RETIREMENT BENEFITS OTHER THAN PENSION BENEFIT
In addition to the pension benefits described in Note 7, Jefferson County provides post-retirement health
care benefits, in accordance with RCW 41.26, for employees who retired under LEOFF I. Currently,
seven retirees meet those eligibility requirements.
For LEOFF I retirees Jefferson County reimburses 100% percent of the amount of validated claims for
medical, dental, and hospitalization costs incurred by pre-Medicare retirees. Jefferson County also
reimburses the Medicare supplement for each retiree eligible for Medicare.
Employer contributions are financed on a pay-as-you-go basis. Expenditures for post-retirement health
care benefits are recognized as retirees report claims and include a provision for estimated claims
incurred but not yet reported to Jefferson County.
During the year, expenditures of $45,448 were recognized for post-retirement health care.
Washington State Auditor's Office
34
".
,
I
JEFFERSON COU;
NOTES TO FINANCIAL ST TEMENTS
JANUARY 1,2005 through DECE BER 31, 2005
1
NOTE 12 - POSTCLOSURE CARE COSTS !
The Solid Waste Post Closure Fund had a balance of $110,l10 at December 31,2005. This allows for
approximately $6,000 per year to be transferred into the o~erating fund to cover annual post closure
costs for 20 years. This is in compliance with WAC Chapter P3-304-467 (financial Assurance for Public
Facilities) for landfills closed after November 27, 1989. 1
I
NOTE 13 - OTHER DISCLOSURES I
A. PRIOR PERIOD ADJUSTMENTS 1
GENERAL FUND: In the General Fund, there was $1P,565 in prior period corrections.
I
SPECIAL REVENUE FUNDS: The prior period cOfrections in Special Revenue Funds were:
Cooperative Extension, $488; Jeff Com, $550; Hea th & Human Services, $216; Community
Development, $95; Roads, $1,322; Equipment Rental $115, and; Infonnation Services, $5,716.
NEW FUND NUMBER ~1
R.C, W, 26,12,240 authorized counties to creale a C rthouse Facilitator Fund. and Fund # 106-
000-010 was established to provide basic services to ro se litigants in family law cases.
Resolution 55-05 created a Trial Court Improvement ~und (141-000-010) for improvements to
district and superior court staffing, programs, facilities pr services.
B.
R.C.W. 82.45.180(2)(c) requires that the Treasurer de sit certain Real Estate Transfer Fees into
a County "real estate tax electronic technology fund". und # 151-000-010 REET Technology
Fund was established for this purpose.
D. OTHER NOTES:
Reconciliation of Statement C-4 and C-5 to Schedule ~ 1 and 12.
Schedules 11 and 12 do not reflect any De, cember Jxpenditures paid January, interfund due to
and due from or petty cash amounts. (See Schedule 111a).
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NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
NOTE 1 - BASIS OF ACCOUNTING
This schedule is prepared on the same basis of accounting as the county's financial statements.
The County uses the cash basis of accounting for all funds.
NOTE 2 - PROGRAM COSTS
The amounts shown as current year expenditures represent only the federal grant portion of the program
costs. Entire program costs, including the county's portion, may be more than shown.
NOTE 3 - NONCASH AWARDS-VACCINATIONS
The amount of vaccine reported on the schedule is the value of vaccine distributed by Jefferson County
during current year and priced as prescribed by Washington State Immunization Program.
* This grant is being managed by Jefferson County Community Counseling - a subrecipient.
** These grants are being managed by Clallam-Jefferson Community Action Council - a subrecipient.
*** This grant is managed by Cascadia Revolving Fund.
Washington State Auditor's Office
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(Note Consent Agenda or Regular Agenda)
(Note Department)
JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
AGENDA REQUEST
TO: Jefferson County Board of Commissioners
THROUGH: John Fischbach, County Administrator
FROM: Judi Morris, Treasurer
DATE: April 2, 2007 10:10 a.m.
SUBJECT: Approval of Bond Counsel; E911 Bond
STATEMENT OF ISSUE:
Approval of Bond Counsel
ANALYSIS:
E-911 commissioners approved a $2,500,000.00 bond for improvements on the E-911 system. Approval for
the bond issuance is scheduled for the April 16, 2007 Commissioner meeting. In preparation of th bond
issuance a Bond Counsel must be hired. The attached resolution and letter approves hiring of Foster Pepper.
FISCAL IMPACT:
E=911 sales tax was approved by voters for this purpose and will cover bond costs and repayment.
RECOMMENDATION:
Approve the resolution for hiring and sign the letter.
REVIEWED BY:
3f2S} 0 7
Date