Snohomish County - SAO Online Services

Financial Statements and Federal Single Audit

Report

Snohomish County

For the period January 1, 2019 through December 31, 2019

Published September 24, 2020

Report No. 1027002

Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (564) 999-0950 [email protected]

Office of the Washington State Auditor

Pat McCarthy

September 24, 2020

County Council and Executive

Snohomish County

Everett, Washington

Report on Financial Statements and Federal Single Audit

Please find attached our report on Snohomish County’s financial statements and compliance with

federal laws and regulations.

We are issuing this report in order to provide information on the County’s financial condition.

Sincerely,

Pat McCarthy

State Auditor

Olympia, WA

Americans with Disabilities

In accordance with the Americans with Disabilities Act, we will make this document available in

alternative formats. For more information, please contact our Office at (564) 999-0950, TDD

Relay at (800) 833-6388, or email our webmaster at [email protected].

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TABLE OF CONTENTS

Schedule of Findings and Questioned Costs ................................................................................... 4

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed in Accordance with

Government Auditing Standards..................................................................................................... 6

Independent Auditor's Report on Compliance for Each Major Federal Program and Report on

Internal Control Over Compliance in Accordance With the Uniform Guidance ........................... 9

Independent Auditor's Report on Financial Statements ................................................................ 12

Financial Section ........................................................................................................................... 16

About the State Auditor's Office ..................................................................................................129


SCHEDULE OF FINDINGS AND QUESTIONED COSTS

Snohomish County

January 1, 2019 through December 31, 2019

SECTION I – SUMMARY OF AUDITOR’S RESULTS

The results of our audit of Snohomish County are summarized below in accordance with Title 2

U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost

Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Financial Statements

We issued an unmodified opinion on the fair presentation of the financial statements of the

governmental activities, the business-type activities, the aggregate discretely presented component

units and remaining fund information and each major fund in accordance with accounting

principles generally accepted in the United States of America (GAAP).

Internal Control over Financial Reporting:

Significant Deficiencies: We reported no deficiencies in the design or operation of internal

control over financial reporting that we consider to be significant deficiencies.

Material Weaknesses: We identified no deficiencies that we consider to be material

weaknesses.

We noted no instances of noncompliance that were material to the financial statements of the

County.

Federal Awards

Internal Control over Major Programs:

Significant Deficiencies: We reported no deficiencies in the design or operation of internal

control over major federal programs that we consider to be significant deficiencies.

Material Weaknesses: We identified no deficiencies that we consider to be material

weaknesses.


We issued an unmodified opinion on the County’s compliance with requirements applicable to

each of its major federal programs.

We reported no findings that are required to be disclosed in accordance with 2 CFR 200.516(a).

Identification of Major Federal Programs

The following programs were selected as major programs in our audit of compliance in accordance

with the Uniform Guidance.

CFDA No. Program or Cluster Title

14.267 Continuum of Care Program

93.044 Aging Cluster – Special Programs for the Aging, Title III, Part B,

Grants for Supportive Services and Senior Centers

93.045 Aging Cluster – pecial Programs for the Aging, Title III, Part C,

Nutrition Services

93.053 Aging Cluster – Nutrition Services Incentive Program

93.563 Child Support Enforcement

The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by

the Uniform Guidance, was $1,320,193.

The County qualified as a low-risk auditee under the Uniform Guidance.

SECTION II – FINANCIAL STATEMENT FINDINGS

None reported.

SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED

COSTS

None reported.


INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

Snohomish County



Snohomish County

Everett, Washington

We have audited, 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, the financial statements of the

governmental activities, the business-type activities, the aggregate discretely presented component

units and remaining fund information and each major fund of Snohomish County, as of and for the

year ended December 31, 2019, and the related notes to the financial statements, which collectively

comprise the County’s basic financial statements, and have issued our report thereon dated

June 30, 2020.

As discussed in Note 1 to the financial statements, during the year ended December 31, 2019, the

County implemented Governmental Accounting Standards Board Statement No. 84, Fiduciary

Activities.

As discussed in Note 9 to the financial statements, in February 2020, a state of emergency was

declared that could have a negative financial effect on the County. Management’s plans in response

to this matter are also described in Note 9.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing our audit of the financial statements, we considered the County’s

internal control over financial reporting (internal control) to determine the audit procedures that

are appropriate in the circumstances for the purpose of expressing our opinions on the financial

statements, but not for the purpose of expressing an opinion on the effectiveness of the County’s

internal control. Accordingly, we do not express an opinion on the effectiveness of the County’s

internal control.


A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to prevent,

or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a

combination of deficiencies, in internal control such that there is a reasonable possibility that a

material misstatement of the County’s financial statements will not be prevented, or detected and

corrected on a timely basis. A significant deficiency is a deficiency, or a combination of

deficiencies, in internal control that is less severe than a material weakness, yet important enough

to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph

of this section and was not designed to identify all deficiencies in internal control that might be

material weaknesses or significant deficiencies. Given these limitations, during our audit we did

not identify any deficiencies in internal control that we consider to be material weaknesses.

However, material weaknesses may exist that have not been identified.

COMPLIANCE AND OTHER MATTERS

As part of obtaining reasonable assurance about whether the County’s financial statements are free

from 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,

providing an opinion on compliance with those provisions was not an objective of our audit, and

accordingly, we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance or other matters that are required

to be reported under Government Auditing Standards.

PURPOSE OF THIS REPORT

The purpose of this report is solely to describe the scope of our testing of internal control and

compliance and the results of that testing, and not to provide an opinion on the effectiveness of the

County’s internal control or on compliance. This report is an integral part of an audit performed in

accordance with Government Auditing Standards in considering the County’s internal control and

compliance. Accordingly, this communication is not suitable for any other purpose. However, this


report is a matter of public record and its distribution is not limited. It also serves to disseminate

information to the public as a reporting tool to help citizens assess government operations.

Pat McCarthy

State Auditor

Olympia, WA

June 30, 2020


INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR

EACH MAJOR FEDERAL PROGRAM AND REPORT ON

INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE

WITH THE UNIFORM GUIDANCE

Snohomish County



Snohomish County

Everett, Washington

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL

PROGRAM

We have audited the compliance of Snohomish County, with the types of compliance requirements

described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could

have a direct and material effect on each of the County’s major federal programs for the year ended

December 31, 2019. The County’s major federal programs are identified in the accompanying

Schedule of Findings and Questioned Costs.

Management’s Responsibility

Management is responsible for compliance with federal statutes, regulations, and the terms and

conditions of its federal awards applicable to its federal programs.

Auditor’s Responsibility

Our responsibility is to express an opinion on compliance for each of the County’s major federal

programs based on our audit of the types of compliance requirements referred to above. We

conducted our audit of compliance in accordance with auditing standards generally accepted in the

United States of America; the standards applicable to financial audits contained in Government

Auditing Standards, issued by the Comptroller General of the United States; and the audit

requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative

Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Those standards and the Uniform Guidance 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 on compliance for each major

federal program. Our audit does not provide a legal determination on the County’s compliance.

Opinion on Each Major Federal Program

In our opinion, the County complied, in all material respects, with the types of compliance

requirements referred to above that could have a direct and material effect on each of its major

federal programs for the year ended December 31, 2019.

REPORT ON INTERNAL CONTROL OVER COMPLIANCE

Management of the County is responsible for establishing and maintaining effective internal

control over compliance with the types of compliance requirements referred to above. In planning

and performing our audit of compliance, we considered the County’s internal control over

compliance with the types of requirements that could have a direct and material effect on each

major federal program in order to determine the auditing procedures that are appropriate in the

circumstances for the purpose of expressing an opinion on compliance for each major federal

program and to test and report on internal control over compliance in accordance with the Uniform

Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control

over compliance. Accordingly, we do not express an opinion on the effectiveness of the County’s

internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control

over compliance does not allow management or employees, in the normal course of performing

their assigned functions, to prevent, or detect and correct, noncompliance with a type of

compliance requirement of a federal program on a timely basis. A material weakness in internal

control over compliance is a deficiency, or combination of deficiencies, in internal control over

compliance, such that there is a reasonable possibility that material noncompliance with a type of

compliance requirement of a federal program will not be prevented, or detected and corrected, on

a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a

combination of deficiencies, in internal control over compliance with a type of compliance

requirement of a federal program that is less severe than a material weakness in internal control

over compliance, yet important enough to merit attention by those charged with governance.


Our consideration of internal control over compliance was for the limited purpose described in the

first paragraph of this section and was not designed to identify all deficiencies in internal control

that might be material weaknesses or significant deficiencies. We did not identify any deficiencies

in internal control over compliance that we consider to be material weaknesses. However, material

weaknesses may exist that have not been identified.

Purpose of this Report

The purpose of this report on internal control over compliance is solely to describe the scope of

our testing of internal control over compliance and the results of that testing based on the

requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other

purpose. However, this report is a matter of public record and its distribution is not limited. It also

serves to disseminate information to the public as a reporting tool to help citizens assess

government operations.

Pat McCarthy

State Auditor

Olympia, WA

September 17, 2020


INDEPENDENT AUDITOR’S REPORT ON

FINANCIAL STATEMENTS

Snohomish County



Snohomish County

Everett, Washington

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of the governmental activities, the

business-type activities, the aggregate discretely presented component units and remaining fund

information and each major fund of Snohomish County, as of and for the year ended December 31,

2019, and the related notes to the financial statements, which collectively comprise the County’s

basic financial statements as listed on page 16.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements

in accordance with accounting principles generally accepted in the United States of America; this

includes the design, implementation, and maintenance of internal control relevant to the

preparation and fair presentation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We

conducted our audit in accordance with auditing standards generally accepted in the United States

of America and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States. Those standards require that

we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,


including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the County’s preparation and fair presentation of the financial statements in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the County’s internal control. Accordingly, we

express no such opinion. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of significant accounting estimates made by management, as

well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects,

the respective financial position of the governmental activities, the business-type activities, the

aggregate discretely presented component units and remaining fund information and each major

fund of Snohomish County, as of December 31, 2019, and the respective changes in financial

position and, where applicable, cash flows thereof, and the respective budgetary comparison for

the General, County Roads and Human Services funds, for the year then ended in accordance with

accounting principles generally accepted in the United States of America.

Matters of Emphasis

As discussed in Note 1 to the financial statements, in 2019, the County adopted new accounting

guidance, Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities. Our

opinion is not modified with respect to this matter.

As discussed in Note 9 to the financial statements, in February 2020, a state of emergency was

declared that could have a negative financial effect on the County. Management’s plans in response

to this matter are also described in Note 1. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the

management’s discussion and analysis and required supplementary information listed on page 16

be presented to supplement the basic financial statements. Such information, although not a part

of the basic financial statements, is required by the Governmental Accounting Standards Board


who considers it to be an essential part of financial reporting for placing the basic financial

statements in an appropriate operational, economic or historical context. We have applied certain

limited procedures to the required supplementary information in accordance with auditing

standards generally accepted in the United States of America, which consisted of inquiries of

management about the methods of preparing the information and comparing the information for

consistency with management’s responses to our inquiries, the basic financial statements, and

other knowledge we obtained during our audit of the basic financial statements. We do not express

an opinion or provide any assurance on the information because the limited procedures do not

provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that

collectively comprise the County’s basic financial statements as a whole. The accompanying

Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as

required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative

Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

This schedule is not a required part of the basic financial statements. Such information is the

responsibility of management and was derived from and relates directly to the underlying

accounting and other records used to prepare the basic financial statements. The information has

been subjected to the auditing procedures applied in the audit of the basic financial statements and

certain additional procedures, including comparing and reconciling such information directly to

the underlying accounting and other records used to prepare the basic financial statements or to

the basic financial statements themselves, and other additional procedures in accordance with

auditing standards generally accepted in the United States of America. In our opinion, the

information is fairly stated, in all material respects, in relation to the basic financial statements

taken as a whole.

OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING

STANDARDS

In accordance with Government Auditing Standards, we have also issued our report dated June 30,

2020 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 internal control over financial reporting or on compliance. That report is an integral


part of an audit performed in accordance with Government Auditing Standards in considering the

County’s internal control over financial reporting and compliance.

Pat McCarthy

State Auditor

Olympia, WA

June 30, 2020


FINANCIAL SECTION

Snohomish County


REQUIRED SUPPLEMENTARY INFORMATION

Management’s Discussion and Analysis – 2019

BASIC FINANCIAL STATEMENTS

Statement of Net Position – 2019

Statement of Activities – 2019

Balance Sheet – Governmental Funds – 2019

Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position –

2019

Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental

Funds – 2019

Reconciliation of Governmental Funds Statement of Revenues, Expenditures and

Changes in Fund Balance to the Statement of Activities – 2019

Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual

– General Fund – 2019


– County Roads Fund – 2019


– Human Services Fund – 2019

Statement of Net Position – Proprietary Funds – 2019

Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds

– 2019

Statement of Cash Flows – Proprietary Funds – 2019

Statement of Net Position – Fiduciary Funds – 2019

Statement of Changes in Fiduciary Net Position – Fiduciary Funds – 2019

Notes to Financial Statements – 2019

REQUIRED SUPPLEMENTARY INFORMATION

Schedule of Proportionate Share of Net Pension Liability – PERS 1, PERS 2/3, PSERS 2,

LEOFF 1, LEOFF 2 – 2019


Schedule of Employer Contributions – PERS 1, PERS 2/3, PSERS 2, LEOFF 1, LEOFF 2

– 2019

Schedule of Changes in Total OPEB Liability and Related Ratios – 2019

SUPPLEMENTARY AND OTHER INFORMATION

Schedule of Expenditures of Federal Awards and Notes – 2019

Snohomish County, Washington - MD&A For the Year Ended December 31, 2019

Our discussion and analysis of Snohomish County’s f inancial performance provides an overview of the County’s f inancial activi t ies for the year ended December 31, 2019. Please read i t in conjunction with the transmitta l let ter at the front of this report, the County’s f inancial statements and the notes to the f inancial statements that fol low.

FINANCIAL HIGHLIGHTS

As of December 31, 2019, total assets plus deferred outf lows of resources of the County exceeded total l iabi l i t ies plus deferred inf lows of resources by $1.6 bi l l ion (net posit ion). Nearly $1.4 bi l l ion, or 85.3%, of this amount is net investment in capital assets.

In 2019 , the County’s total net posi t ion increased by 9.4% or $137.1 mil l ion from the

prior year. The governmental net posit ion increased by 10.6% or $125.3 mil l ion from the prior year. The business type net posi t ion increased 4.3% or $11.8 mil l ion.

As of December 31, 2019 , the County’s governmental funds reported combined ending

fund balances of $302.9 mil l ion. Approximately 13.6% or $41 mi l l ion is unassigned and avai lable for spending at the government’s discretion within the purposes specif ied for the County’s funds.

As of December 31, 2019 , the County’s business-type funds reported a combined net

posit ion of $291.1 mil l ion. Of that amount, 17.7% or $51.3 mil l ion is unrestr icted.

At the end of 2019, the general fund total assigned fund balance was $5.9 mil l ion and the unassigned fund balance was $41 mil l ion. The fund balance amounts to 19.1% of total general fund detai l revenues for 2019. Total fund balance of the general fund increased by 19.6% or $8.1 mil l ion from the prior year.

During 2019, the county issued a $35.1 mil l ion BAN for the Snohomish County

Emergency Radio System upgrade, issued general obl igation bonds in the amount of $52.9 mil l ion to refund the BAN and a 2009 bond issue as wel l as provide addit ional new monies for the county courthouse project and purchase of a new property tax col lection system.

A union labor contract wi th the county’s Corrections Guild was in negotiation at the end of 2019. The contract was sett led in Apri l 2020 . The agreement results in retroactive wage payments currently estimated to be $1.8 mil l ion to be paid f rom the General Fund in June 2020.

USING THIS ANNUAL REPORT This annual report consists of a series of f inancial statements. The Basic Financial Statements include the Government -wide Financial Statements, Fund Financial Statements and Notes to the Financial Statements. Within the Government -wide Financial Statements, the Statement of Net Posit ion and the Statement of Activi t ies provide information about the activi t ies of the County as a whole and present a longer -term view of the County’s f inances. Fund Financial Statements for governmental funds tel l how these funds’ services were f inanced in the short term as well as what remains for future spending. Fund Financial Statements also report the County’s operations in more detai l than the Government-wide

Snohomish County MD&A For the Year Ended December 31, 2019

Statements by providing information about the County’s most signif icant funds. The remaining Basic Financial Statements provide f inancial informat ion about activi t ies for which the County acts solely as a trustee or agent fo r the benef i t of those outside of the primary government. The Comprehensive Annual Financial Report (CAFR) also includes a Supplemental Schedules section that provides more detai led information about the County.

Reporting the County as a Whole - Countywide Financial Statements The Countywide f inancial statements are designed to provide readers wi th a broad overview of the County’s f inances, in a manner simi lar to a private -sector business.

Statement of Net Position and Statement of Activities The Statement of Net Position presents information on al l of the County’s assets plus deferred outf lows of resources , l iabi l i t ies plus deferred inf lows of resources, and the dif ference reported as net posit ion. The Statement of Activit ies presents information showing how the County’s net posit ion changed during the current year. These statements are prepared using the accrual basis of accounting similar to the accounting method used by private sector companies. This basis of accounting tak es into consideration al l of the current year’s revenues and expenses, regardless of when the cash is received or paid. These two statements report the County’s net posit ion and changes in net posi t ion. Over t ime, increases or decreases in the County’s ne t posit ion may be one indicator of whether i ts f inancial health is improving or deteriorating. Readers of these statements should also consider other non- f inancial factors, such as changes in the County’s property tax base and the condi t ion of the County’s roads, to assess the overal l health of the County. Within the Statement of Net Posi t ion and the Statement of Activi t ies, the County ’s f inancial information is divided into three types of activi t ies:

Governmental Activities: Most of the County’s functions are reported here, including general government, judicial, publ ic safety, physical environment, transportation , heal th and human services, economic environment, and cul ture and recreation . Governmental activi t ies are primari ly supported by property taxes, charges for services, sales taxes, federal and state grants, and state shared revenues.

Business-Type Activit ies: These functions are intended to recover al l , or a signif icant portion of , thei r costs through user fees and charges to external users of goods and services. User fees are charged for surface water management, sol id waste disposal, and the Paine Field Airport.

Discretely Presented Component Units: The County’s f inancial statements include f inancial information of the Pi lchuck Development Corporation (PDC) and the Snohomish County Publ ic Faci l i t ies Distr ic t (PFD). These component units are described in the notes to the f inancial statements. The component uni ts are separate legal enti t ies that may buy, sel l , lease, and mortgage property in their own name and can sue or be sued in thei r own name.


Reporting the County’s Most Significant Funds

Fund Financial Statements: The fund f inancial statements provide detai led information about the most signif icant funds. Some funds are required to be establ ished by state law or by bond covenants. The County Counci l establ ishes funds to help i t control and manage money for particula r purposes (an example would be the Snohomish County Road Fund) or to show that i t is meeting legal responsibi l i t ies for using certain taxes, grants, and other funding sources (an example would be grants received from the federal government for various ser vices provided by the Human Services Department). The County’s governmental and propr ietary funds use dif ferent accounting methods, which are described in the fol lowing sections .

Governmental funds: Most of the County’s basic services are reported in governmental funds, which focus on how money f lows into and out of the funds and the balances lef t at year -end that are avai lable for spending. These funds are reported using an accounting method cal led m odif ied accrual accounting, which measures cash and al l other f inancial assets that can be readi ly converted to cash. The governmental fund statements provide a detai led short -term view of the County’s general government operations and the basic services i t provides. Governmental fund information assists in determining i f fewer f inancial resources can be spent in the near future to f inance the County’s programs. Because the focus of governmental funds is narrower than that of the government -wide f inancial statements, i t is useful to compare the information presented for governmental funds with similar information presented for governmental activi t ies in the government -wide f inancial statements. By doing so, readers may better understand the long-term impac t of the government’s near - term f inancing decisions. Reconci l iat ion Statements are provided to describe the relationship (or dif ferences) between governmental activi t ies (reported in the Statement of Net Posit ion and the Statement of Act ivi t ies) and governmental funds. The County’s major governmental funds are the General Fund, the County Road Fund , the Human Services Fund and the Capital Projects Fund. Individual fund data for each of the non -major funds is provided in the form of combining statements i n the supplemental schedules section.

Proprietary funds: Proprietary funds are general ly used to account for services for which the County charges customers a fee. Proprietary funds are reported using the accrual method of accounting, which is the same method used for reporting the Statement of Net Posit ion and the Statement of Activi t ies. The proprietary fund statements provide addit ional types of information as compared to the governmental fund statements, such as cash f low information.

Reporting the County’s Fiduciary Responsibilities: The County is the trustee, or f iduciary, for several enti t ies such as ci t ies, school distr icts, f i re distr icts, hospi tals and ports among others , which are considered Custodial Funds. The County also reports an Investment Trust Fund and Pension (and Other Employment Benef i t) Trust Fund as f iduciary. Al l of the County’s f iduciary activi t ies are reported in a separate Statement of Fiduciary Net Posit ion and Statement of Changes in Fiduciary Net Posit ion. There are combin ing statements that report the separate components of the Custodial funds and Investment Trust fund in the supplement schedules section. Fiduciary activi t ies are excluded from the County’s other f inancial statements because the County cannot use the assets of those separate enti t ies to f inance i ts operations.

Notes to the Financial Statements The notes provide addit ional information that is essential to a ful l understanding of the data provided in the government-wide and fund f inancial statements.


Other Information – Combining Statements The combining statements, which provide detai l information for non -major governmental funds, internal service funds, component units, and f iduciary funds, are presented in the supplemental schedules section.

FINANCIAL ANALYSIS As noted earl ier, the County’s net posit ion, when reviewed over t ime, may serve as a useful indicator of the County’s long-term f inancial health. The fol lowing schedule provides a summary of the assets, deferred outf lows of resources, l iabi l i t ies, deferred inf lows of resources and net posit ion of the County.

Snohomish County’s overal l f inancial posit ion improved f rom 2018 to 2019. For the year ended December 31, 2019, net posit ion changed as fol lows: Total Net Posit ion of the County increased by $137.1 mil l ion or 9.4% from the prior year. Governmental Activi t ies’ Total Net Posi t ion increased by $125.3 mil l ion or 10.6% from the prior year. The Governmental Activi t ies ’ increase was primari ly due to increases in charges for services, capital grants and contr ibutions, and sales/use tax revenue sources. The revenue increases were partial ly of fset by corresponding increases in several categories of functional expenses, primari ly those within the Publ ic Safety and Transportation functions. Business-Type Activi t ies’ Total Net Posit ion increased by $11.8 mil l ion or 4.3% from the prior year. The change was primari ly due to posit ive operating results in the Sol id Waste, Airport and Surface Water Funds. Total assets plus deferred outf lows of resources of the County exceeded total l iabi l i t ies plus deferred inf lows of resources by $1.6 bi l l ion (net posi t ion). The increase in net posit ion in 2019 ref lects the County’s abi l i ty, on an annual basis, to meet i ts current obl igations in those activi t ies including debt service requirements. The unrestr icted net posi t ion for governmental activi t ies was ($27.5) mil l ion and for business -type activi t ies was $51.3 mil l ion. A factor in the balance of unrestr icted net posi t ion is long -term commitments that are greater than currently avai lable resources. Specif ical ly, the County’s governmental

2019 2018 2019 2018 2019 2018AssetsCurrent 448,560,223$ 392,081,563$ 78,744,596$ 72,433,503$ 527,304,819$ 464,515,066$ Noncurrent 56,187,809 51,784,696 1,483,206 835,143 57,671,015 52,619,839 Capital Assets 1,380,971,600 1,287,473,921 313,953,640 319,878,730 1,694,925,240 1,607,352,651 Total Assets 1,885,719,632 1,731,340,180 394,181,442 393,147,376 2,279,901,074 2,124,487,556

Deferred Outflow of Resources 22,386,803 20,063,415 3,105,906 2,327,223 25,492,709 22,390,638

LiabilitiesCurrent Liabilities 120,881,390 116,070,164 17,349,283 17,917,215 138,230,673 133,987,379 Noncurrent Liabilities 436,944,477 414,304,663 83,757,863 93,942,592 520,702,340 508,247,255 Total Liabilities 557,825,867 530,374,827 101,107,146 111,859,807 658,933,013 642,234,634

Deferred Inflow of Resources 40,993,026 37,061,190 5,059,396 4,282,878 46,052,422 41,344,068

Net PositionNet Investment in Capital Assets 1,125,791,511 1,046,905,613 239,565,911 236,213,525 1,365,357,422 1,283,119,138 Restricted 211,005,271 191,162,964 228,208 184,009 211,233,479 191,346,973 Unrestricted (27,509,240) (54,100,999) 51,326,687 42,934,380 23,817,447 (11,166,619) Total Net Position 1,309,287,542$ 1,183,967,578$ 291,120,806$ 279,331,914$ 1,600,408,348$ 1,463,299,492$

Activities Total

Net PositionBusiness-TypeGovernmental

Activities


activi t ies include general obl igation debt for which no correspondi ng capital assets are currently recorded but for which future revenues are obl igated. Governmental act ivi t ies restricted net posit ion was $211 mil l ion. The restric ted net posit ion of business-type activi t ies was $228 thousand. Amounts reported in restric ted net posit ion are subject to external legal or contractual restr ict ions, such as those imposed by the Revised Code of Washington or by contractual agreements with parties outside the County. The County’s total assets were $2.3 bi l l ion as of December 31, 2019. Capital assets represent $1.7 bi l l ion of this amount. As required by GASB Statement No. 34, the County reports i ts infrastructure assets as a component of total capi tal assets; infrastructure assets amounted to $858.7 mil l ion, net of depreciation, at December 31, 2019 . The County’s current assets consist of $433 mil l ion of cash and investments, $92.8 mil l ion of receivables, net of al lowance for uncol lectible accounts, and miscel laneous other current assets of $ 1.5 mil l ion. Other non-current non-capital assets include $5.7 mil l ion for the County’s equity interest in the Snohomish County 911 joint venture, $28.2 mil l ion of notes/contracts receivable and $23.8 mil l ion of net pension assets . The largest portion of the County’s net posi t ion, $1.4 bi l l ion, or 85.4%, ref lects i ts investment in capital assets (e.g., land and improvements, bui ldings and bui lding improvements, improvements other than bui ldings, machinery and equipment, vehicles, and infrastructure) less any related debt used to acquire those assets that is sti l l outstanding. The County uses these capital assets for operations and to provide services to ci t izens; consequently, these assets are not avai lable for future spending. Althou gh the County’s investment in i ts capital assets is reported net of related debt, i t should be noted that the resources needed to repay this debt must be provided f rom other sources since the capital assets themselves cannot be used to l iquidate these l iab i l i t ies. At December 31, 2019, the County had total outstanding l iabi l i t ies of $ 659 mil l ion. General obl igation bonds and other long-term loans payable were $415.3 mil l ion, of which $24.9 mil l ion was due wi thin one year. Other current l iabi l i t ies consist of accounts payable of $36.9 mil l ion, due to other governments in the amount of $22.2 mil l ion, unearned revenues of $15.8 mil l ion, accrued l iabi l i t ies of $18.6 mil l ion and current portion of landfi l l c losure costs of $436.8 thousand. A l iabi l i ty of $25.5 mil l ion is recorded for general l iabi l i ty and workers’ compensation claims, of which $5.4 mil l ion was due within one year. Other signif icant non-current l iabi l i t ies include net pension l iabi l i ty of $67.1 mil l ion, compensated absences of $22.9 mil l ion, other post-employment benefi ts of $11.6 mil l ion and future landf i l l c losure costs of $7.1 mil l ion. The fol lowing schedule provides a summary of the changes in net posi t ion:


The Total Change in Net Posit ion was an increase of 9.4% or $137.1 mil l ion from the prior year. Of that total , Governmental Activi t ies ’ most signif icant revenue increases came from capital grants and contr ibutions as well as sales/use tax revenues. Governmental Activi t ies’ expense increased from the prior year by 7.2%, result ing in an Excess Before Transfers of $126.8 mil l ion. In total , governmental activi t ies ’ change in net posit ion ref lects an increase of $125.3 mil l ion or 10.6% f rom the prior year ’s net posi t ion . Business- type Activi t ies’ change in net posi t ion ref lects an increase of $11.8 mil l ion or 4.3% from the prior year ’s net posit ion primari ly due to improved operating resul ts of the Surface Water Fund . Total 2019 revenues for the County were $771.5 mil l ion, an increase of $108.9 mil l ion or 16.5% from the prior year. Of the total County revenues, governmental activi t ies provided 84%, or $648.8 mil l ion, whi le business-type activi t ies provided 16%, or $122.8 mil l ion. The majori ty of revenues for governmental activi t ies were derived from p roperty taxes, charges for services, capital grants and contributions, sales/use taxes and operating grants

2019 2018 2019 2018 2019 2018RevenuesProgram RevenuesCharges for Services 132,815,338$ 123,093,270$ 117,564,518$ 109,853,732$ 250,379,856$ 232,947,002$ Operating Grants and Contributions 74,887,812 73,649,207 1,749,989 1,709,647 76,637,801 75,358,854 Capital Grants and Contributions 115,230,554 43,820,774 2,322,262 10,803,749 117,552,816 54,624,523 Total Program Revenues 322,933,704 240,563,251 121,636,769 122,367,128 444,570,473 362,930,379

General RevenuesProperty Taxes 161,647,314 157,980,216 - - 161,647,314 157,980,216 Sales/Use Taxes 102,025,894 81,919,777 - - 102,025,894 81,919,777 Real Estate Excise Tax 24,502,410 21,939,624 - - 24,502,410 21,939,624 Business and Other Taxes 15,973,852 16,088,073 - - 15,973,852 16,088,073 Intergovernmental Revenues 6,118,250 6,317,764 - - 6,118,250 6,317,764 Interest and Investment Earnings 15,406,599 14,161,351 1,128,392 1,263,235 16,534,991 15,424,586 Miscellaneous Revenues 175,021 13,301 - - 175,021 13,301 Total General Revenues 325,849,340 298,420,106 1,128,392 1,263,235 326,977,732 299,683,341 Total Revenues 648,783,044 538,983,357 122,765,161 123,630,363 771,548,205 662,613,720

ExpensesGeneral Government 65,963,681 61,649,898 - - 65,963,681 61,649,898 Judicial 34,646,558 37,712,123 - - 34,646,558 37,712,123 Public Safety 167,327,906 149,020,174 - - 167,327,906 149,020,174 Physical Environment 2,505,408 3,007,737 - - 2,505,408 3,007,737 Transportation 109,699,557 96,019,019 - - 109,699,557 96,019,019 Health and Human Services 84,734,490 81,163,886 - - 84,734,490 81,163,886 Economic Environment 24,847,672 27,722,944 - - 24,847,672 27,722,944 Culture and Recreation 20,048,643 19,306,291 - - 20,048,643 19,306,291 Interest on Long-Term Debt 12,231,838 11,399,901 - - 12,231,838 11,399,901 Airport - - 27,788,248 25,881,798 27,788,248 25,881,798 Solid Waste - - 61,105,189 57,963,292 61,105,189 57,963,292 Surface Water - - 23,540,159 24,495,390 23,540,159 24,495,390 Total Expenses 522,005,753 487,001,973 112,433,596 108,340,480 634,439,349 595,342,453

Excess (Deficiency) Before Transfers 126,777,291 51,981,384 10,331,565 15,289,883 137,108,856 67,271,267 Transfers In (Out) (1,457,327) (1,783,715) 1,457,327 1,783,715 - - Change in Net Position 125,319,964 50,197,669 11,788,892 17,073,598 137,108,856 67,271,267 Net Position, Beginning of Year 1,183,967,578 1,138,228,096 279,331,914 262,258,316 1,463,299,492 1,400,486,412 Change in Accounting Principal - (4,458,187) - - - (4,458,187) Net Position, End of Year 1,309,287,542$ 1,183,967,578$ 291,120,806$ 279,331,914$ 1,600,408,348$ 1,463,299,492$

Changes in Net Position

Total Activities Business-Type Governmental

Activities


and contr ibutions. Together those revenue sources accounted for 90.5% of total governmental activi ty revenues. Property taxes provided 25% or $161.6 mil l ion, charges for services provided 20.5% or $132.8 mil l ion, capital grants and contributions provided 17.8% or $115.2 mil l ion, sales/use taxes provided 15.8% or $102 mil l ion, and operating grants and contributions provided 11.6% or $74.9 mil l ion of total governmental activi ty revenues. Most of the governmental activi t ies' resources were spent for Publ ic Safety, 32.1%, Transportation, 21.1%, Health and Human Services, 16.3%, General Government, 12.7%, and Judicial , 6.7%, services. Interest on long-term debt and amortization of debt related i tems totaled $12.2 mil l ion, which was 2.4% of governmental activi t ies expenses for 2019. Revenues for business-type activi t ies consisted primari ly of charges for services of $ 117.6 mil l ion, which were 95.8% of total business-type activi t ies revenues. Operating expenses for Sol id Waste Management represented 54.8% of total expenses for business -type activi t ies, Airport expenses were 23.7% and Surface Water Management expenses were 21.5%.

FUND FINANCIAL INFORMATION

Governmental Funds The General Fund, County Road Fund, Human Services Fund and Capital Projects Fund are the County’s 2019 major funds. These funds account for 56.8% of total governmental fund assets and 48.2% of total governmental fund balances. Governmental funds’ total assets amounted to $388.2 mil l ion and total l iabi l i t ies were $70.2 mil l ion. The governmental funds’ sources of funds exceeded the uses of funds, resul t ing in a net increase in fund balance of $40.8 mil l ion. This was largely due to a variety of revenue and expenditure changes within most funds as well as receipt of bond proceeds . The most signif icant changes being revenue increases in sales /use taxes and charges for services as well as expenditure decreases in general government that were offset by signif icant expendi ture increases in publ ic safety. Principal debt payment increases were primari ly the result of a BAN and bond refunding. The total fund balance for al l governmental funds at December 31, 2019 was $302.9 mil l ion.


General Fund The County’s General Fund is the primary operating fund of the County used to account for al l f inancial resources other than the resources that are required to be accounted for separately. As of December 31, 2019, total assets were $69.5 mi l l ion, total l iabi l i t ies were $17.9 mil l ion and deferred inf lows of resources were $2 mil l ion. The ending fund balance of $49.7 mil l ion represents approximately 18.5% of the 2020 budgeted uses of funds for the 2020 f iscal year. The net change in fund balance for the general fund in 2019 was an increase of $8.1 mil l ion or 19.6%. Detai l revenues increased $12.5 mil l ion and detai l expenditures increased $9.5 mil l ion. The revenue increase was primari ly due to increased sales/use tax and charges for services revenues. The most signif icant increase in general fund expenditures w as in Publ ic Safety. Increases of $2 mil l ion in salaries and benefi ts and $1 mil l ion in Corrections insurance premiums accounted for the most signif icant individual increases in Publ ic Safety expenditures.

Significant General Fund Balance Sheet Changes:

Description 2019 2018 $ Change % ChangeTotal Assets 69,539,241$ 52,239,922$ 17,299,319$ 33.1%Total Liabilities 17,892,691$ 6,379,996$ 11,512,695$ 180.4%Fund Balance 49,664,019$ 41,533,369$ 8,130,650$ 19.6%

Significant General Fund Revenue Increases:

Description 2019 2018 $ Change % ChangeSales/Use Tax 70,403,240$ 65,159,923$ 5,243,317$ 8.0%Charges for Services 51,356,455$ 46,153,449$ 5,203,006$ 11.3%

Significant General Fund Expenditure Increases:

Description 2019 2018 $ Change % ChangePublic Safety 135,443,832$ 130,877,787$ 4,566,045$ 3.5%

County Road Fund The County Road Fund accounts for the construction, maintenance and inspection of county streets, roads, and br idges and other countywide publ ic works projects. The fund reported total assets of $33.6 mil l ion, total l iabi l i t ies of $2.7 mil l ion and an ending fund balance of $29.2 mil l ion, a decrease of $3.9 mil l ion or 11.8% from the pr ior year. Detai l revenues increased by 3.5% or $3.5 mil l ion and expenditures increased by 2.3% or $2.3 mil l ion during 2019.

Significant Road Fund Balance Sheet Changes:Description 2019 2018 $ Change % Change

Total Assets 33,566,504$ 36,927,422$ (3,360,918)$ -9.1%Total Liabilities 2,678,263$ 3,210,294$ (532,031)$ -16.6%Fund Balance 29,197,016$ 33,090,334$ (3,893,318)$ -11.8%

The most s ignif icant change in total assets resul ted from a decrease of $2.4 mil l ion in cash and investment balances, which was a direct resul t of increased expenditures in the road maintenance program’s transportation function.


Significant Road Fund Revenue & Other Financial Sources Changes:Description 2019 2018 $ Change % Change

Intergovernmental Revenue 23,568,419$ 19,664,119$ 3,904,300$ 19.9%

The most signif icant change in revenues was an increase in intergovernmental revenues associated with grant revenues from the Department of Transportation .

Significant Road Fund Expenditure Changes:Description 2019 2018 $ Change % Change

Transportation 74,308,739$ 63,726,151$ 10,582,588$ 16.6%General Government 4,385,624$ 12,278,145$ (7,892,521)$ -64.3%

Signif icant expenditure changes were pr imari ly the result of increased transportation expenditures related to in -k ind services projects and decreased general government expenditures resul t ing from less reimbursable work provided to other local enti t ies.

The Human Services Fund The Human Services Fund accounts for the administration, p lanning, development and provision of the fol lowing services: energy assistance; long term care and aging; developmental disabi l i t ies; mental health; alcohol and other dru g treatments ; community services; chi ldren and youth; veteran's rel i ef ; and other human services in Snohomish County. Total assets for this fund were $71.6 mil l ion and total l iabi l i t ies were $30.6 mil l ion. The ending fund balance of $30 mil l ion was an increase of $1.8 mil l ion, or 6.3% from the prior year.

Significant Human Services Fund Balance Sheet Changes:Description 2019 2018 $ Change % Change

Total Assets 71,641,058$ 71,800,690$ (159,632)$ -0.2%Total Liabilities 30,579,627$ 43,532,135$ (12,952,508)$ -29.8%Fund Balance 29,999,565$ 28,227,576$ 1,771,989$ 6.3%

Changes in total assets resulted from increased cash balances and increased notes/contracts receivable , which were offset by decreases in amounts due from other funds and other governments. Total l iabi l i t ies decreased primari ly due to decreases in accounts payable balances ( t iming) and the reclassif ication of Sales Tax, Affordable Housing Trust Fund, and Ending Homelessness loan balances from long term l iabi l i t ies (unearned revenue) to a deferred inf low (unavai lable revenue) total ing $11 mil l ion. Changes in total detai l revenues were primari ly due to increased grant revenues reported as intergovernmental revenues and increased charges from services earned from recording fees for housing/homelessness, mental health services and various other service fees .

Significant Human Services Revenue Changes:Description 2019 2018 $ Change % Change

Intergovernmental 51,468,391$ 49,283,810$ 2,184,581$ 4.4%Charges for Services 26,507,359$ 23,150,409$ 3,356,950$ 14.5%

Detai l expenditures increased $3.7 mil l ion or 4%. This was primari ly due to increases in homelessness expenditures, and pass through grants that faci l i tate programs run by other enti t ies.


The Capital Projects Fund The Capital Projects Fund accounts for major bui lding construct ion projects throughout the County. I t does not include construction projects related to proprietary fund programs. The current major project is a remodel/expansion of the County’s courthouse. The funding source is primari ly bond proceeds received in 2013. During 2019, assets and fund balance decreased primari ly due to expenditures related to the courthouse project. Expenditures increased from the pr ior year due to capi ta l outlay for construction.

Other Governmental Funds The County has 25 other special revenue funds, one debt service fund and six other capital projects funds. These funds reported total assets of $ 167.7 mil l ion, total l iabi l i t ies of $10.4 mil l ion and fund balances of $157 mil l ion. $129.5 mil l ion of the ending fund balance was restr icted and $27.5 mil l ion was committed.

Proprietary Funds The County reported three major enterprise funds that represent the business -type activi t ies in the government-wide f inancial statements. Eight internal service funds account for the operation of services provided to the dif ferent departments of the County. The principal users of internal service fund services are the County’s g overnmental activi t ies; therefore, the internal service funds are consol idated into the governmental column in the Government -wide Financial Statements.

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018AssetsCurrent Assets 46,760,645$ 45,124,714$ 15,468,543$ 13,728,530$ 16,515,408$ 13,580,259$ 78,744,596$ 72,433,503$ 74,021,499$ 67,388,012$ Noncurrent Assets - - 1,483,206 835,143 - - 1,483,206 835,143 72,975 63,407 Capital Assets 53,455,422 57,033,046 182,544,268 187,206,140 77,953,950 75,639,544 313,953,640 319,878,730 49,028,806 45,580,821 Total Assets 100,216,067 102,157,760 199,496,017 201,769,813 94,469,358 89,219,803 394,181,442 393,147,376 123,123,280 113,032,240

Deferred Outflow of Resources 988,150 827,366 1,135,941 648,803 981,815 851,054 3,105,906 2,327,223 2,073,298 1,617,254

LiabilitiesCurrent Liabilities 7,320,944 7,155,300 7,454,415 8,289,072 2,573,924 2,472,843 17,349,283 17,917,215 27,515,537 26,695,025 Noncurrent Liabilities 22,848,340 27,529,731 55,970,800 59,162,304 4,938,723 7,250,557 83,757,863 93,942,592 43,665,836 44,179,003 Total Liabilities 30,169,284 34,685,031 63,425,215 67,451,376 7,512,647 9,723,400 101,107,146 111,859,807 71,181,373 70,874,028

Deferred Inflow of Resources 2,173,295 1,856,106 1,375,570 952,493 1,510,531 1,474,279 5,059,396 4,282,878 3,915,675 3,411,051

Net PositionNet Investment in Capital Assets 39,247,566 39,896,205 125,101,015 124,806,513 75,217,330 71,510,807 239,565,911 236,213,525 45,811,640 41,998,412 Restricted - - - - 228,208 184,009 228,208 184,009 9,887,303 8,716,964 Unrestricted 29,614,072 26,547,784 10,730,158 9,208,234 10,982,457 7,178,362 51,326,687 42,934,380 (5,599,413) (10,350,961) Total Net Position 68,861,638$ 66,443,989$ 135,831,173$ 134,014,747$ 86,427,995$ 78,873,178$ 291,120,806$ 279,331,914$ 50,099,530$ 40,364,415$

Net Position - Proprietary Funds

Enterprise FundsWaste Water FundsSolid Airport Surface Total Internal Service

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018Operating Income (Loss) 2,615,095$ 2,479,084$ 2,394,633$ 2,635,972$ 2,650,594$ (732,911)$ 7,660,322$ 4,382,145$ 8,770,177$ 18,068,221$ Non-Operating Revenues (Expenses) 792,194 592,788 (1,233,441) (1,225,170) 790,228 736,371 348,981 103,989 2,703,901 2,565,353 Contributions and Transfers (989,640) (30,732) 655,234 9,483,071 4,113,995 3,135,125 3,779,589 12,587,464 (1,738,963) (3,728,296)

Changes in Net Position 2,417,649 3,041,140 1,816,426 10,893,873 7,554,817 3,138,585 11,788,892 17,073,598 9,735,115 16,905,278

Changes in Net Position – Proprietary Funds

Enterprise FundsWaste Water FundsSolid Airport Surface Total Internal Service


a 2 01 8 am o u n t s h av e be e n r e s ta t ed t o re p o r t m i s c e l l a n eo u s r ev e nu e a s C as h F l o ws f r om Op e r a t i n g A c t i v i t i es ra t he r t h a n Ca s h F l o ws f r om No n -C a p i t a l F i n a nc i n g A c t i v i t i e s .

Solid Waste Management Fund This fund accounts for sol id waste disposal operations, capital improvements and debt service. Restricted investments of $7.5 mil l ion represent funds set aside to f inance long -term landfi l l post -closure care costs. Total assets as of December 31, 2019 were $100.2 mil l ion, total l iabi l i t ies were $30.2 mil l ion, and net posit ion was $68.9 mil l ion. Net Posit ion increased $2.4 mil l ion or 3.7% from the prior year , which is consistent wi th the prior year’s increase. Charges for service revenue increased at a similar rate to waste export expenses .

Airport Fund This fund accounts for the operation, capi tal improvements and debt service of Pai ne Field, Snohomish County’s Airport . Total assets were $ 199.5 mil l ion, total l iabi l i t ies were $63.4 mil l ion, and net posit ion was $135.8 mil l ion. The increase in net posi t ion of $1.8 mil l ion is ref lective of the start of commercial air service at Paine Field.

Surface Water Management Fund This fund accounts for the operations of the Surface Water Management Division. The purpose of this division is to protect and enhance water qual i ty and aquatic habi tats, and to minimize damage from f looding and erosion. Total assets as of December 31, 2019 were $94.5 mil l ion, total l iabi l i t ies were $7.5 mil l ion, and net posi t ion was $86.4 mil l ion. The 2019 increase in operating income was largely due to decreases in interfund services and contractual services. Increases to in -k ind service revenue and in -k ind expense net to zero and so did not af fect the change to operating income.

Internal Service Funds The County’s internal service funds provide f leet management, information services, r isk management, road surface materials (p i ts and quarries), employee benefi ts, faci l i ty services, employee training and securi ty services. Total assets as of December 31, 2019 were $123.1 mil l ion, total l iabi l i t ies were $71.2 mil l ion and net posi t ion was $50.1 mil l ion. Internal service funds' operating income of $8.8 mil l ion was a decrease of $9.3 mil l ion from the prior year ’s operating income. The decrease in total internal service funds operating income was primari ly the result of increases in contract services expense in both the Insurance Fund and the Employee Benef i ts Fund, which resul ted in both funds experiencing reductions in operating income (loss).

2019 2018a 2019 2018a 2019 2018a 2019 2018a 2019 2018a

Cash Flow from Operating Activities 2,894,503$ 4,214,597$ 8,785,482$ 10,868,995$ 4,157,587$ 1,828,060$ 15,837,572$ 16,911,652$ 15,856,708$ 18,481,972$ Cash Flow from Capital and Related Financing Activities (4,539,930) (3,439,269) (8,544,595) (20,266,594) (4,527,401) (7,330,633) (17,611,926) (31,036,496) (6,091,263) (6,707,239) Cash Flow from Non-Capital Financing Activities 728,037 1,034,146 579,064 1,343,867 3,223,420 3,094,215 4,530,521 5,472,228 (3,201,853) (4,631,954) Cash Flow from Investing Activities 1,254,551 (148,507) 853,528 4,104,562 238,891 1,512,048 2,346,970 5,468,103 790,310 (8,057,833)

Net Increase (Decrease) in Cash and Cash Equivalents 337,161 1,660,967 1,673,479 (3,949,170) 3,092,497 (896,310) 5,103,137 (3,184,513) 7,353,902 (915,054)

Cash and Cash Equivalents, January 1 6,659,917 4,998,950 1,150,447 5,099,617 3,938,398 4,834,708 11,748,762 14,933,275 32,301,016 33,216,070 Cash and Cash Equivalents, December 31 6,997,078$ 6,659,917$ 2,823,926$ 1,150,447$ 7,030,895$ 3,938,398$ 16,851,899$ 11,748,762$ 39,654,918$ 32,301,016$

Non-Cash Investing, Capital and Related Financing Activities -$ -$ -$ -$ 53,875$ -$ 53,875$ -$ 1,184,148$ 991,623$

Statement of Cash Flow – Proprietary Funds

Waste Water FundsSolid Airport Surface Total Internal Service

Enterprise Funds


GENERAL FUND BUDGETARY HIGHLIGHTS The 2019 General Fund budget was craf ted with the anticipation that departments would continue to manage tightly within their budgets and achieve a level of vacancy savings. In aggregate, departments were able to achieve their budgeted targets by expending less than the 98.5% target of thei r 2019 appropr iations. Revenues overal l were higher than anticipated due to the robust local economy, particularly the County’s Sales and Use Tax revenues. The 2019 budget original ly did include a decrease in fund balance, however “actuals ” resul ted in an increase in fund balance, which was achieved due to the posit ive revenue performance and departments achieving their budgeted targets .

CAPITAL ASSETS AND DEBT ADMINISTRATION The fol lowing schedule provides a summary of the County’s capital assets activi ty. Snohomish County’s total investment in capital assets, including construction in progress and intangibles, amounts to $1.7 bi l l ion. Infrastructure assets, net of accumulate d depreciation, represent $858.7 mil l ion of capital assets. More detai led information on the County’s capital assets can be found in Note 3D of this f inancial report .

Governmental Activities - Capital Assets Governmental Activi t ies reported an overal l increase of $93.5 mil l ion, or 7.3%, in capital assets primari ly due to contr ibuted roadways and parks and the courthouse construction/remodel projects that are currently in progress.

Business-Type Activit ies - Capital Assets Business-type activi t ies reported an overal l decrease in capi tal assets of $5.9 mil l ion, or 1.9%, primari ly due to depreciation offset by increases in Airport and Surface Water infrastructure.

Governmental Activities – Debt Principal payments made during 2019 for governmental activi t ies’ debt totaled $51.3 mil l ion, which included $35.1 mil l ion BAN payment, $15.8 mil l ion for general obl igation bond debt and $400 thousand for loans. Interest expense for 2019 was $12.2 mil l ion. See Note 3F to the f inancial statements for addi t ional information on long -term debt.

Business-Type Activit ies – Debt Total principal payments made during 2019 for business-type act ivi t ies were $10.2 mil l ion, of which $9 mil l ion was for general obl igation bond debt and $1.3 mil l ion repaid loans. Interest expense for 2019 was $2.6 mil l ion.

2019 2018 2019 2018 2019 2018Capital AssetsLand 298,957,093$ 290,090,976$ 45,687,513$ 45,145,078$ 344,644,606$ 335,236,054$ Building and Structures, Net 141,789,290 145,401,467 89,361,196 91,928,538 231,150,486 237,330,005 Other Improvements, Net 53,794,684 57,329,064 32,721,558 35,796,762 86,516,242 93,125,826 Machinery and Equipment, Net 47,461,011 43,553,785 10,131,356 10,900,776 57,592,367 54,454,561 Infrastructure Assets, Net 727,842,708 671,053,662 130,876,128 130,632,683 858,718,836 801,686,345 Construction in Progress 102,921,674 69,408,917 4,841,224 5,025,587 107,762,898 74,434,504 Intangibles, Net 8,205,140 10,636,050 334,665 449,306 8,539,805 11,085,356 Total Capital Assets 1,380,971,600$ 1,287,473,921$ 313,953,640$ 319,878,730$ 1,694,925,240$ 1,607,352,651$

Capital AssetsTotal

Activities ActivitiesGovernmental Business-type


See Note 3F to the f inancial statements for addi t ional information on long -term debt.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES National and local data suggest that economic condit ions in 2020 wi l l be chal lenging for al l due to the COVID-19 health emergency. In i ts advance estimate of real gross domestic product (GDP), the U.S. Bureau of Economic Analysis showed that GDP increased at an annual rate of 2.6 percent in the fourth quarter of 2019, af ter growing 1.7% in the third quarter. Consistent with the data at the national level , the Washington economy had continued to grow through 2019 and the f irst part of the f irst quarter of 2020. In December 2019, the state’s unemployment rate was 3.9%, compared to 4.7% in December of the prior year . Local ly, Snohomish County’s unemployment rate was better than the state, estimated to be 2.4%. At the close of 2019, Snohomish County had the second lowest unemployment rate in the state.

The 2020 budget took into consideration and adjusted upward the Sales and Use Tax revenues due to i ts experience of strong growth in 2019. The prel iminary look at 2020 to date seems posit ive, however this does not take into consideration the effects of the COVID-19 health emergency. We anticipate 2020 Sales and Use Tax and many other actual revenue sources wi l l be signif icantly less than projections. The County is currently developing plans how i t wi l l address the addit ional unantic ipated costs and revenue reductions due to the COVID-19 health emergency. Due to the COVID-19 health emergency and al l the unanticipated effects the County wi l l be required to constrain i ts growth in the 2021 budget.

CONTACTING THE COUNTY’S FINANCIAL MANAGEMENT TEAM This f inancia l report is designed to provide our ci t izens, taxpayers, customers, and creditors with a general overview of the County’s f inances and to demonstrate the County’s accountabi l i ty for the money i t receives. I f you have questions about this report or need addit ional f inancial information, contact the Finance Department, at the fol lowing address: Snohomish County, 3000 Rockefel ler, M/S 610, Everett , WA 982 01 or by cal l ing 425-388-3401 or by visi t ing our website: http: //snohomishcountywa.gov/ .

Governmental Activities

Business-type Activities Total Component Units

ASSETSCurrent AssetsCash and Equivalents 210,580,251$ 16,633,459$ 227,213,710$ -$ Cash and Equivalents, Restricted 38,730,364 218,440 38,948,804 1,453,823Investments 100,807,924 43,886,104 144,694,028 -Investments, Restricted 14,565,344 7,549,119 22,114,463 -Taxes Receivables 4,039,519 - 4,039,519 -Other Receivables, Net 14,180,075 7,537,920 21,717,995 -Interest Receivable 12,014,904 551,916 12,566,820 -Due from Other Governments 52,096,406 2,367,638 54,464,044 638,725Inventories 1,545,436 - 1,545,436 -Total Current Assets 448,560,223 78,744,596 527,304,819 2,092,548

Non-Current AssetsNotes/Contracts Receivable 28,173,659 - 28,173,659 -Investment in Joint Venture 5,650,951 - 5,650,951 -Land 298,957,093 45,687,513 344,644,606 -Buildings and Structures, Net 141,789,290 89,361,196 231,150,486 -Other Improvements, Net 53,794,684 32,721,558 86,516,242 -Machinery and Equipment, Net 47,461,011 10,131,356 57,592,367 -Infrastructure Assets, Net 727,842,708 130,876,128 858,718,836 -Construction in Progress 102,921,674 4,841,224 107,762,898 -Intangible Assets, Net 8,205,140 334,665 8,539,805 -Net Pension Asset 22,363,199 1,483,206 23,846,405 -Total Non-Current Assets 1,437,159,409 315,436,846 1,752,596,255 -

Total Assets 1,885,719,632 394,181,442 2,279,901,074 2,092,548

DEFERRED OUTFLOWS OF RESOURCESDeferred Outflows Related to AROs 905,176 606,850 1,512,026 -Deferred Outflows Related to Pensions 18,237,768 2,189,363 20,427,131 -Deferred Loss on Refunding 3,243,859 309,693 3,553,552 -Total Deferred Outflows of Resources 22,386,803 3,105,906 25,492,709 -

LIABILITIESCurrent LiabilitiesAccounts Payable 31,972,949 4,915,303 36,888,252 1,463Payable from Restricted Assets - 198,675 198,675 -Claims and Judgments Payable 5,404,195 - 5,404,195 -Due to Other Governments 21,696,213 482,903 22,179,116 -Accrued Liabilities 16,200,883 2,436,513 18,637,396 -Unearned Revenue 14,854,448 986,164 15,840,612 -Employee Benefits Payable 13,726,056 20,669 13,746,725 -Bonds, Notes and Loans Payable 17,026,646 7,872,286 24,898,932 -Landfill Closure Costs - 436,770 436,770 -Total Current Liabilities 120,881,390 17,349,283 138,230,673 1,463

Primary Government

Snohomish County, WAStatement of Net PositionDecember 31, 2019


Business-type Activities Total Component Units

Primary Government

Snohomish County, WAStatement of Net PositionDecember 31, 2019

Non-Current LiabilitiesEmployee Benefits Payable 20,854,938 2,046,237 22,901,175 -Other Post-Employment Benefits 11,581,115 - 11,581,115 -Bonds, Notes and Loans Payable 324,571,484 65,845,384 390,416,868 -Asset Retirement Obligation 905,176 606,850 1,512,026 -Claims and Judgments Payable 20,125,898 - 20,125,898 -Landfill Closure Costs - 7,112,349 7,112,349 -Net Pension Liability 58,905,866 8,147,043 67,052,909 -Total Non-Current Liabilities 436,944,477 83,757,863 520,702,340 -

Total Liabilities 557,825,867 101,107,146 658,933,013 1,463

DEFERRED INFLOWS OF RESOURCESDeferred Service Concession Arrangement Receipts 763,284 - 763,284 -Grants Received in Advance 169,093 - 169,093 -Deferred Inflows Related to Pensions 39,971,139 4,949,555 44,920,694 -Deferred Gain on Refunding 89,510 109,841 199,351 -Total Deferred Inflows of Resources 40,993,026 5,059,396 46,052,422 -

NET POSITIONNet Investment in Capital Assets 1,125,791,511 239,565,911 1,365,357,422 -Restricted for:General Government 5,362,511 - 5,362,511 -Judicial 1,862,727 - 1,862,727 -Public Safety 9,451,359 - 9,451,359 -Physical Environment 2,785,788 228,208 3,013,996 -Transportation 25,651,804 - 25,651,804 -Health and Human Services 27,304,148 - 27,304,148 -Economic Environment 8,834,807 - 8,834,807 1,976,387Culture and Recreation 3,243,423 - 3,243,423 114,698Capital Purposes 126,508,704 - 126,508,704 -Total Restricted Net Position 211,005,271 228,208 211,233,479 2,091,085

Unrestricted (27,509,240) 51,326,687 23,817,447 -

Total Net Position 1,309,287,542$ 291,120,806$ 1,600,408,348$ 2,091,085$

The notes to the financial statements are an integral part of this statement.

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General FundCounty Road

FundHuman

ServicesCapital Projects

Fund

Other Governmental

Funds TotalASSETSCash and Cash Equivalents 38,566,247$ 15,465,096$ 19,891,562$ 16,243,886$ 80,824,978$ 170,991,769$ Cash and Cash Equivalents, Restricted - 88,676 - 14,910,575 23,664,678 38,663,929Investments - 10,975,230 6,200,788 - 51,531,372 68,707,390Investments Restricted - - - 14,565,344 - 14,565,344Taxes Receivable 2,377,243 1,535,045 40,501 - 86,729 4,039,518Other Receivables, Net 6,523,433 69,073 165,520 978 431,501 7,190,505Interest Receivable 2,259,309 102,430 917,928 12,748 579,266 3,871,681Due From Other Governments 19,813,009 5,330,954 16,251,100 - 10,586,923 51,981,986Notes / Contracts Receivable - - 28,173,659 - - 28,173,659Total Assets 69,539,241$ 33,566,504$ 71,641,058$ 45,733,531$ 167,705,447$ 388,185,781$

LIABILITIESAccounts Payable 12,974,127 1,775,237 6,109,088 5,499,003 2,586,175 28,943,630Due To Other Governments 46,502 - 21,044,262 - 605,450 21,696,214Accrued Liabilities 4,778,077 901,898 479,574 966,031 2,206,515 9,332,095Unearned Revenue 93,985 1,128 2,946,703 2,254,860 4,981,114 10,277,790Total Liabilities 17,892,691 2,678,263 30,579,627 8,719,894 10,379,254 70,249,729

DEFERRED INFLOWS OF RESOURCESDeferred Service Concession Arrangement Receipts 763,284 - - - - 763,284Unavailable Revenue-Property Taxes 413,985 1,269,585 40,501 - 68,100 1,792,171Unavailable Revenue 636,169 421,640 11,021,365 - 247,447 12,326,621Grants Received in Advance 169,093 - - - - 169,093Total Deferred Inflows of Resources 1,982,531 1,691,225 11,061,866 - 315,547 15,051,169

FUND BALANCESRestricted - 9,703,134 27,304,148 34,649,827 129,460,859 201,117,968Committed 2,777,106 19,493,882 2,695,417 2,363,810 27,549,787 54,880,002Assigned 5,906,158 - - - - 5,906,158Unassigned 40,980,755 - - - - 40,980,755Total Fund Balance 49,664,019 29,197,016 29,999,565 37,013,637 157,010,646 302,884,883

Total Liabilities, Deferred Inflows of Resources, and Fund Balances 69,539,241$ 33,566,504$ 71,641,058$ 45,733,531$ 167,705,447$ 388,185,781$

The accompanying notes are an integral part of this financial statement.

Snohomish County, WABalance SheetGovernmental FundsDecember 31, 2019

Total fund balance as shown on the Governmental Funds Balance Sheet 302,884,883$

Amounts reported for governmental activities in the statement of activities are different because:

Capital Assets used in governmental activities are not financial resources and are therefore not reported in the fund statement. This includes Investment in Joint Venture of $5.7 million. 1,337,593,746

Long-term debt is not due and payable in the current period and is therefore not reported in the fund statement. This includes the current and noncurrent portion of the long-term debt, and accrued interest payable. (339,484,475)

Internal service funds are used by the County to charge the costs of certain activities, like insurance and fleet services, to individual funds. The assets, deferred ouflow of resources, liabilities, and deferred inflow of resources of these funds are included in governmental activities in the Statement of Net Position. 50,099,530

Full accrual adjustments to the governmental funds, such as to record compensated absences payable, to record allowance for doubtful accounts, and to reclassify unavailable revenues for property taxes. (41,806,142)

Net Position of Governmental Activities as shown on the Statement of Net Position 1,309,287,542$

The accompanying notes are an integral part of the financial statements.

ReconciliationGovernmental Funds BalanceSheet to the Statement of Net PositionDecember 31, 2019

___________________________________________________________________________________________________

General FundCounty Road

FundHuman

ServicesCapital Projects

Fund

Other Governmental

Funds TotalDetailed RevenuesProperty Taxes 89,915,886$ 64,884,685$ 1,875,964$ -$ 3,896,300$ 160,572,835$ Sales/Use Taxes 70,403,240 - 17,667,478 - 13,955,176 102,025,894Real Estate Excise Taxes - - - - 24,461,619 24,461,619Business and Other Taxes 3,384,356 905,338 16,550 - 11,667,608 15,973,852Licenses and Permits 4,268,532 - - - 9,739,331 14,007,863Charges for Services 51,356,455 14,146,735 26,507,359 653,575 23,251,334 115,915,458Operating Assessments 21,294 - - - - 21,294Intergovernmental Revenues 16,706,958 23,568,419 51,468,391 - 12,985,009 104,728,777Fines and Forfeitures 4,965,491 - 65,550 - 1,032,359 6,063,400Interest and Investment Earnings 12,100,542 428,251 408,317 477,971 2,283,327 15,698,408Rents, Leases, and Concessions 5,502,358 102,198 566 - 3,068,951 8,674,073Contributions and Donations - 22,215 1,055,428 - 722,306 1,799,949Miscellaneous Revenues 2,475,844 351,505 27,531 161,887 123,346 3,140,113Total Detail Revenues 261,100,956 104,409,346 99,093,134 1,293,433 107,186,666 573,083,535

Detailed Expenditures CurrentGeneral Government 61,878,995 4,385,624 2,598,844 863,661 8,180,788 77,907,912Judicial 31,839,445 - 3,334,010 2,139,430 645,017 37,957,902Public Safety 135,443,832 221,380 2,676,814 34,969 35,613,109 173,990,104Physical Environment 1,681,466 - - - 697,067 2,378,533Transportation - 74,308,739 - - 132,325 74,441,064Health and Human Services 3,300,662 - 82,715,479 - - 86,016,141Economic Environment 4,666,596 - 5,534,054 - 18,063,367 28,264,017Culture and Recreation 11,972,977 - 458,000 - 4,422,892 16,853,869 Debt ServicePrincipal Payments - 368,421 - - 47,980,216 48,348,637Interest and Other Charges 172 18,457 - 79,905 12,781,768 12,880,302 Capital Outlay 252,100 25,349,401 62,822 27,828,152 12,050,566 65,543,041Total Detail Expenditures 251,036,245 104,652,022 97,380,023 30,946,117 140,567,115 624,581,522

Excess (deficiency) of revenues over (under) expenditures 10,064,711 (242,676) 1,713,111 (29,652,684) (33,380,449) (51,497,987)

Other Financial Sources (Uses)Disposition Of Capital Assets 485,434 1,003,350 12,355 - 36,909 1,538,048Transfers In 5,417,492 3,364,839 2,849,810 4,704,688 35,572,900 51,909,729Transfers Out (7,836,987) (8,018,831) (2,803,287) (220,000) (32,549,339) (51,428,444)Issuance of Debt - - - 12,445,000 70,650,000 83,095,000Issuance of Refunding Bonds - - - - 2,305,720 2,305,720Payment to Refunded Bond Escrow Agent - - - - (2,659,627) (2,659,627)Issuance Premium on Long Term Debt - - - 1,581,541 5,974,919 7,556,460Total Other Financial Sources (Uses) (1,934,061) (3,650,642) 58,878 18,511,229 79,331,482 92,316,886

Net Change in Fund Balance 8,130,650 (3,893,318) 1,771,989 (11,141,455) 45,951,033 40,818,899

Fund Balance - Beginning 41,533,369 33,090,334 28,227,576 48,155,092 111,059,613 262,065,984Fund Balance - Ending 49,664,019$ 29,197,016$ 29,999,565$ 37,013,637$ 157,010,646$ 302,884,883$

The accompanying notes are an integral part of this financial statement.

Snohomish County, WAStatement of Revenues, Expendituresand Changes In Fund BalancesGovernmental FundsFor the Year Ended December 31, 2019

Net change in fund balances of Governmental Funds 40,818,899$

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlay as expenditures. However, in the statement of activities the cost of these assets is allocated over their estimated useful lives and is reported as depreciation expense. 4,018,970

Capital contributions, donations, and equity adjustment to the investment in joint venture do not provide current financial resources and therefore are not reported as revenues in governmental funds. 85,087,305

Amounts transferred to escrow for bond refunding are reported as expenditures in the funds statement and as a reduction of long-term liabilities in the statement of net position. 2,659,627

Repayment of bond principal are reported as expenditures in the fund statements and as a reduction of long-term liabilities in the statement of net position. 48,348,637

Debt proceeds are reported as current financial resources in the funds statement and as increases long-term liabilities in the statement of net position. (92,957,180)

Accrued interest expense and amortization of premiums, discounts, and deferred amounts on refunding are not recorded on the fund statements. 747,555

Internal service funds are used by the County to charge the costs of certain activities, such as insurance and fleet management services, to individual funds. The net cost of the internal service funds are reported as governmental activities in the statement of activities. 9,735,115

Some expenses and revenues reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures and revenues in governmental funds. 26,861,036

Change in net position of governmental activities on the statement of activities 125,319,964$


_________________________________________________________________________________________________

ReconciliationGovernmental Funds StatementOf Revenues, Expenditures, andChanges in Fund Balances to theStatement of ActivitiesFor the Year Ended December 31, 2019

Changes in Fund Balance - Budget and Actual

Original Final Actual Variance

Budgeted Fund Balance, January 1 4,652,028$ 5,345,620$ 41,533,369$ 36,187,749$

Resources (inflows)

Property Taxes 89,077,988 89,077,988 89,915,886 837,898

Sales/Use Taxes 67,558,819 67,558,819 70,403,240 2,844,421

Business and Other Taxes 3,935,126 3,935,126 3,384,356 (550,770)

License and Permits 4,590,130 4,590,130 4,268,532 (321,598)

Charges for Services 48,298,709 48,298,709 51,356,455 3,057,746

Operating Assessments 20,923 20,923 21,294 371

Intergovernmental Revenues 17,560,675 17,560,675 16,706,958 (853,717)

Fines and Forfeitures 4,945,116 4,945,116 4,965,491 20,375

Interest and Investment Earnings 10,664,614 10,664,614 12,100,542 1,435,928

Rents, Leases, and Concessions 5,194,573 5,194,573 5,502,358 307,785

Miscellaneous Revenues 1,005,322 1,005,322 2,475,844 1,470,522

Transfers In 5,443,922 5,443,922 5,417,492 (26,430)

Disposition of Capital Assets 650,000 650,000 485,434 (164,566)

Total Resources (inflows) 258,945,917 258,945,917 267,003,882 8,057,965

Amounts Available for Appropriation 263,597,945 264,291,537 308,537,251 44,245,714

Charges to Appropriations (outflows)

ExecutiveAdministration 2,337,763 2,375,038 2,322,580 52,458 Economic Development 613,106 624,006 587,304 36,702

LegislativeLegislative Svs. 4,213,053 4,264,917 4,115,363 149,554 Performance Auditing 142,500 142,500 74,316 68,184

Human ServicesHuman Services Administration 1,200,418 1,243,065 1,199,044 44,021 Human Services Support 1,837,810 1,837,810 1,837,810 -

Planning and Development ServicesCounty Fire Marshal 657,320 666,372 613,196 53,176 Long Range Planning 3,117,297 3,162,950 2,818,073 344,877 Code Enforcement 1,024,209 1,039,032 954,609 84,423

Hearing ExaminerBoard Of Equalization 165,310 167,248 156,629 10,619 Hearing Examiner 688,256 697,523 650,987 46,536

Parks and RecreationAgriculture 316,961 321,073 276,880 44,193 Youth and Family 377,224 381,249 337,752 43,497 Natural Resources 158,086 158,300 135,114 23,186

Budgeted Amounts

Snohomish County, WAStatement of Revenues, Expenditures, and

General FundFor the Year Ended December 31, 2019



Original Final Actual VarianceBudgeted Amounts



Administration 267,304 270,186 243,858 26,328 Division Management 742,719 752,933 748,740 4,193 Parks Maintenance 2,078,184 2,099,792 2,073,979 25,813 Fair Administration General 2,810,647 2,820,999 2,817,700 3,299 Fairgrounds Maintenance 1,570,676 1,591,211 1,588,887 2,324 Fair Operations General 1,162,193 1,168,011 1,157,603 10,408 Routine Maint & Operation 3,252,479 3,287,705 3,242,585 45,120

AssessorTax Assessments 8,063,626 8,194,254 7,915,097 279,157

AuditorAdministration 739,074 746,652 701,859 44,793 Records Services 974,319 966,761 838,532 128,229 Licensing 1,330,513 1,323,689 1,253,189 70,500 Animal Control Services 1,571,716 1,691,710 1,681,466 10,244 Election Services 2,827,833 2,935,831 2,803,004 132,827 Voter Registration Service 967,743 979,138 933,039 46,099

FinanceBudget And Systems Service 936,955 954,864 951,631 3,233 Finance Operations 2,827,946 2,876,833 2,717,229 159,604 Purchasing Services 754,917 768,158 747,796 20,362

Human ResourcesAdministration 2,411,969 2,450,888 2,019,393 431,495 Equal Employ Opportunity 303,840 309,865 173,614 136,251

NondepartmentalPublic Health 2,226,618 2,226,618 2,101,618 125,000 Public Advocate 246,470 251,099 235,950 15,149 Miscellaneous 16,197,654 10,442,326 9,745,208 697,118

TreasurerAdministration 3,958,260 4,011,798 3,379,629 632,169

District CourtDistrict Court 8,862,441 8,955,339 8,953,896 1,443 Probation & Parole Services 2,013,117 2,049,232 2,046,055 3,177 Dispute Resolution Center 150,000 150,000 119,690 30,310

SheriffAdministration 3,598,044 3,773,494 3,773,452 42 Administrative Services 1,921,000 2,237,800 2,237,786 14 Field Operations 7,231,684 7,262,284 7,262,227 57 Technical Operations 1,017,437 1,047,487 1,047,442 45 Investigation 4,952,398 4,836,598 4,836,578 20 Patrol 21,786,754 23,389,754 23,389,708 46 Narcotics Enforcement 1,174,886 1,114,886 1,114,834 52






Civil 433,356 422,706 422,694 12 Law Enforcement - Contract 8,918,238 8,669,788 8,669,765 23 Training 1,187,138 988,563 988,529 34 Traffic Policing 2,050,283 1,565,533 1,565,504 29 Technical Services 2,124,554 2,001,654 2,001,614 40 Evidence 717,995 742,620 742,592 28 Search And Rescue 919,212 1,129,812 1,129,800 12

Prosecuting AttorneyAdministration 891,729 902,235 902,075 160 Criminal 13,324,204 13,602,972 13,052,063 550,909 Civil 3,139,339 3,158,732 3,006,161 152,571 Op Transfers 260,329 260,329 260,329 -

Office of Public DefenseOffice of Public Defense 12,439,263 12,459,329 12,389,491 69,838

Medical ExaminerMedical Examiner Services 3,055,426 3,098,819 3,058,782 40,037

Superior CourtJuvenile Court Operations 10,177,421 9,630,672 9,553,237 77,435 Superior Court Operations 7,151,547 7,949,508 7,959,993 (10,485) Administrative Services 5,896,324 5,932,086 5,926,425 5,661

ClerkAdministration 1,825,353 1,849,259 1,772,142 77,117 Judicial Acctg/Judgmts 1,109,291 1,192,644 1,125,953 66,691 Case Management 897,503 976,275 970,505 5,770 Courtroom Operations 2,302,880 2,509,880 2,337,399 172,481 Customer Service 1,548,325 1,657,662 1,588,379 69,283

CorrectionsAdministration 9,388,500 9,743,500 9,734,950 8,550 Special Detention 1,170,667 1,160,667 1,155,918 4,749 Detention 36,732,336 37,691,639 37,679,103 12,536 Food Service 1,597,148 1,422,148 1,417,093 5,055 Medical Services 5,398,159 7,375,863 7,363,504 12,359

Department of Emergency ManagementDEM Operations 1,160,696 1,177,364 1,166,301 11,063

Amount Charged to Appropriations (outflows) 263,597,945 264,291,537 258,873,232 5,418,305

Budgeted Fund Balance, December 31 -$ -$ 49,664,019$ 49,664,019$





Resources (inflows)

Property Taxes 65,500,000 65,500,000 64,884,685 (615,315)

Business and Other Taxes 900,000 900,000 905,338 5,338

Charges for Services 19,907,418 19,907,418 14,146,735 (5,760,683)

Operating Assessments 10,000 10,000 - (10,000)

Intergovernmental Revenues 28,966,000 28,966,000 23,568,419 (5,397,581)

Interest and Investment Earnings 275,000 275,000 428,251 153,251

Rents, Leases, and Concessions 42,700 42,700 102,198 59,498 Contributions and Donations - - 22,215 22,215

Miscellaneous Revenues 125,000 125,000 351,505 226,505

Transfers In 4,834,570 4,834,570 3,364,839 (1,469,731)

Disposition of Capital Assets 2,814,000 2,814,000 1,003,350 (1,810,650)

Bond Proceeds 2,906,000 2,906,000 - (2,906,000)

Total Resources (inflows) 126,280,688 126,280,688 108,777,535 (17,503,153)



Public WorksTES Operations 7,274,006 7,274,006 6,549,808 724,198 TES Maintenance 2,619,214 2,619,214 1,501,780 1,117,434 TES Capital 3,845,637 3,845,637 2,354,052 1,491,585 TES Reimbursables 1,019,814 769,814 427,822 341,992 RM Operations 1,739,171 1,489,171 1,187,166 302,005 RM Maintenance 29,238,798 32,408,798 32,046,105 362,693 RM Capital 1,467,000 1,467,000 896,333 570,667 RM Reimbursables 3,216,040 1,796,040 1,391,826 404,214 ES Operations 5,292,137 5,492,137 5,387,555 104,582 ES Maintenance 813,377 798,377 527,948 270,429 ES Capital 36,344,127 36,219,127 26,148,669 10,070,458 ES Reimbursables 8,001,366 7,941,366 2,565,975 5,375,391 Administration 794,300 794,300 70,480 723,820 Admin Operations 33,034,876 32,684,876 31,478,013 1,206,863 Admin Operations Capital 236,236 236,236 137,321 98,915



Budgeted Amounts

Snohomish County, WA

County Roads FundFor the Year Ended December 31, 2019

Statement of Revenues, Expenditures, and





Resources (inflows)

Property Taxes 1,859,980 1,859,980 1,875,964 15,984

Sales/Use Taxes 16,779,509 16,779,509 17,667,478 887,969

Business and Other Taxes 17,270 17,270 16,550 (720)

Charges for Services 31,260,662 31,260,662 26,507,359 (4,753,303)

Intergovernmental Revenues 58,434,881 58,434,881 51,468,391 (6,966,490)

Fines and Forfeitures 76,824 76,824 65,550 (11,274)

Interest and Investment Earnings 50,000 50,000 408,317 358,317

Rents, Leases, and Concessions - - 566 566

Contributions and Donations 769,294 1,153,937 1,055,428 (98,509)

Miscellaneous Revenues 6,154,444 5,769,801 27,531 (5,742,270)

Transfers In 3,249,810 3,249,810 2,849,810 (400,000)

Disposition of Capital Assets 10,127 10,127 12,355 2,228

Total Resources (inflows) 118,662,801 118,662,801 101,955,299 (16,707,502)



Human ServicesFamily Support Services 292,000 292,000 275,335 16,665 Community Information Line 19,600 19,600 19,600 - ECEAP Administration 540,207 510,207 480,437 29,770 ECEAP Operations 1,369,380 1,606,357 1,368,052 238,305 Early Head Start Admin 171,620 201,620 192,803 8,817 Early Head Start Ops 1,084,211 1,084,211 1,060,018 24,193 Energy Administration 185,759 175,759 155,876 19,883 Energy Program Support 387,486 352,486 338,512 13,974 Energy Consumer Education 90,259 119,259 105,058 14,201 Energy Dir Svcs - EAP/ECIP 1,764,027 1,780,027 1,779,421 606 Weatherization Administration 159,154 159,154 118,622 40,532 Weatherization Program Support 792,702 792,702 544,181 248,521 Weatherization Labor 1,213,547 1,213,547 602,864 610,683 Veterans Relief 1,086,715 1,086,715 875,923 210,792 Behavioral Health 6,516,110 6,516,110 4,761,197 1,754,913 Housing, Homeless, Comm Dev 8,005,881 8,005,881 5,823,302 2,182,579 Housing, Homeless Services 6,530,850 6,530,850 5,727,785 803,065 Involuntary Treatment Admin 4,097,358 4,097,358 3,219,760 877,598 Resource Management 372,948 372,948 343,652 29,296 Aging Administration 1,951,675 1,951,675 1,848,588 103,087

Budgeted Amounts


Human Services FundFor the Year Ended December 31, 2019





Human Services FundFor the Year Ended December 31, 2019

Aging Services Programs 157,028 157,028 155,428 1,600 Transportation 110,000 110,000 110,000 - Case Management 8,182,556 8,182,556 7,695,330 487,226 Senior Center Operations 465,500 465,500 458,000 7,500 Dev Dis Program Admin 1,719,652 1,719,652 1,225,185 494,467 Infant Toddler Early Intervent 722,797 722,797 640,436 82,361 Human Serv Ops CD/MH Enhan Svs 2,091,984 2,091,984 1,864,514 227,470 Contracted CD/MH Enhanced Srvs 12,002,311 12,002,311 8,450,862 3,551,449 Pass-Through Grants 53,927,358 53,690,381 41,297,838 12,392,543

District CourtMH/Community Court 321,237 321,237 292,042 29,195

SheriffTraining 112,507 112,507 112,434 73 Detention 2,081,461 2,081,461 2,081,419 42

Prosecuting AttorneyCriminal 531,339 491,339 383,931 107,408 Civil 222,826 262,826 259,180 3,646 TAP 576,809 576,809 573,017 3,792

Office of Public DefenseOffice of Public Defense 1,382,805 1,382,805 1,382,716 89

Medical ExaminerMedical Examiner Services 70,500 70,500 70,256 244

Superior CourtSuperior Court Operations 3,242,784 3,242,784 2,947,923 294,861

ClerkCourtroom Operations 513,249 513,249 508,530 4,719

Department of Emergency ManagementDEM Planning Assistance 45,238 45,238 33,283 11,955




GovernmentalActivities

Solid Waste Airport Surface Water

Total Enterprise

FundsInternal Service

FundsASSETSCurrent AssetsCash and Cash Equivalents 6,798,403$ 2,823,926$ 7,011,130$ 16,633,459$ 39,588,482$ Cash and Cash Equivalents, Restricted 198,675 - 19,765 218,440 66,436Investments 25,536,345 10,159,759 8,190,000 43,886,104 32,100,535Investments, Restricted 7,549,119 - - 7,549,119 -Other Receivables, Net 5,729,665 1,155,281 652,974 7,537,920 249,416Interest Receivable 342,662 116,834 92,420 551,916 356,775Due From Other Governments 605,776 1,212,743 549,119 2,367,638 114,419Inventories - - - - 1,545,436 Total Current Assets 46,760,645 15,468,543 16,515,408 78,744,596 74,021,499

Non-Current AssetsCapital assets Land 12,186,598 22,108,409 11,392,506 45,687,513 392,678 Buildings and Structures, Net 17,217,850 72,143,346 - 89,361,196 8,716,007 Other Improvements, Net 17,165,862 - 15,555,696 32,721,558 1,612,314 Machinery and Equipment, Net 6,639,972 3,410,332 81,052 10,131,356 35,132,961 Infrastructure Assets, Net 245,140 81,505,862 49,125,126 130,876,128 - Construction in Progress - 3,041,654 1,799,570 4,841,224 3,120,870 Intangibles, Net - 334,665 - 334,665 53,976Net Pension Asset - 1,483,206 - 1,483,206 72,975Total Non-Current Assets 53,455,422 184,027,474 77,953,950 315,436,846 49,101,781

Total Assets 100,216,067 199,496,017 94,469,358 394,181,442 123,123,280

DEFERRED OUTFLOW OF RESOURCESDeferred Outflow Related to ARO's 37,500 390,000 179,350 606,850 244,971Deferred Loss on Refunding - 184,716 124,977 309,693 63,815Deferred Outflows Related to Pensions 950,650 561,225 677,488 2,189,363 1,764,512Total Deferred Outflow of Resources 988,150 1,135,941 981,815 3,105,906 2,073,298

Business Type Activities

Snohomish County, WAStatement of Net PositionProprietary FundsDecember 31, 2019



Total Enterprise


Funds


Snohomish County, WAStatement of Net PositionProprietary FundsDecember 31, 2019

LIABILITIESCurrent Liabilities:Accounts Payable 3,190,073 1,227,993 497,237 4,915,303 3,029,315Claims and Judgments Payable - - - - 5,404,195Due to Other Governments - - 482,903 482,903 -Accrued Liabilities 394,399 1,779,878 262,236 2,436,513 609,100Unearned Revenue - 986,164 - 986,164 4,576,657Employee Benefits Payable 8,508 6,197 5,964 20,669 13,535,870Bonds, Notes and Loans Payable 3,092,519 3,454,183 1,325,584 7,872,286 360,400Landfill Closure Costs 436,770 - - 436,770 -Payable from Restricted Assets 198,675 - - 198,675 -Total Current Liabilities 7,320,944 7,454,415 2,573,924 17,349,283 27,515,537

Non-Current LiabilitiesEmployee Benefits Payable 842,323 613,463 590,451 2,046,237 2,026,451Landfill Closure Costs 7,112,349 - - 7,112,349 -Other Post-Employment Benefits - - - - 11,581,115Bonds, Notes, and Loans Payable 10,957,607 53,497,193 1,390,584 65,845,384 2,517,469Asset Retirement Obligation 37,500 390,000 179,350 606,850 244,971Claims and Judgments Payable - - - - 20,125,898Net Pension Liability 3,898,561 1,470,144 2,778,338 8,147,043 7,169,932Total Non-Current Liabilities 22,848,340 55,970,800 4,938,723 83,757,863 43,665,836

Total Liabilities 30,169,284 63,425,215 7,512,647 101,107,146 71,181,373

DEFERRED INFLOW OF RESOURCESDeferred Gain on Refunding 60,733 49,108 - 109,841 -Deferred Inflows Related to Pensions 2,112,562 1,326,462 1,510,531 4,949,555 3,915,675Total Deferred Inflow of Resources 2,173,295 1,375,570 1,510,531 5,059,396 3,915,675

NET POSITIONNet Investment in Capital Assets 39,247,566 125,101,015 75,217,330 239,565,911 45,811,640

Restricted for: Capital Purposes - - - - 9,887,303 Physical Environment - - 228,208 228,208 -Total Restricted Net Position - - 228,208 228,208 9,887,303

Unrestricted 29,614,072 10,730,158 10,982,457 51,326,687 (5,599,413)

Total Net Position 68,861,638$ 135,831,173$ 86,427,995$ 291,120,806$ 50,099,530$




Total Enterprise


FundsOperating RevenuesCharges for Services 62,668,163$ 9,705,935$ 670,458$ 73,044,556$ 121,569,901$ Special Assessments - - 25,826,545 25,826,545 -Rents, Leases, and Concessions 705,255 18,966,632 - 19,671,887 12,862,893Total Operating Revenues 63,373,418 28,672,567 26,497,003 118,542,988 134,432,794

Operating ExpensesPersonnel Services 14,140,773 8,242,362 8,833,562 31,216,697 26,667,050Supplies 809,874 1,077,382 133,843 2,021,099 8,982,410Interfund-Intergovernmental Payments for Service 8,001,948 3,646,140 10,753,524 22,401,612 7,062,533Depreciation 3,704,375 8,270,231 2,390,882 14,365,488 4,155,591Contractual Services 34,101,353 5,041,819 1,734,598 40,877,770 78,795,033Total Operating Expenses 60,758,323 26,277,934 23,846,409 110,882,666 125,662,617

Operating Income (Loss) 2,615,095 2,394,633 2,650,594 7,660,322 8,770,177

Non-Operating Revenues (Expenses)Intergovernmental Revenues 315,026 763,338 671,625 1,749,989 6,990Interest and Investment Earnings 847,967 280,426 270,594 1,398,987 972,528Miscellaneous Revenues 16,858 15,406 51,513 83,777 1,364,521Disposition of Capital Assets - (259,983) - (259,983) 458,955Interest and Other Charges (387,657) (2,032,628) (203,504) (2,623,789) (99,093)Total Non-Operating Revenues (Expenses) 792,194 (1,233,441) 790,228 348,981 2,703,901

Income (Loss) Before Contributions and Transfers 3,407,289 1,161,192 3,440,822 8,009,303 11,474,078

Capital Contributions - 655,234 1,667,028 2,322,262 -Transfers In - - 2,654,187 2,654,187 1,490,024Transfers Out (989,640) - (207,220) (1,196,860) (3,228,987)Change in Net Position 2,417,649 1,816,426 7,554,817 11,788,892 9,735,115

Net Position, Beginning 66,443,989 134,014,747 78,873,178 279,331,914 40,364,415Net Position, Ending 68,861,638$ 135,831,173$ 86,427,995$ 291,120,806$ 50,099,530$



Snohomish County, WAStatement of Revenues, Expensesand Changes in Net PositionProprietary FundsFor the Year Ended December 31, 2019

Snohomish County, WAStatement of Cash Flows Proprietary FundsFor the Year Ended December 31, 2019


Solid Waste Airport Surface Water Total Internal Service

Funds

Cash Flows from Operating ActivitiesReceipts from Operations 61,247,151$ 28,987,650$ 26,581,227$ 116,816,028$ 135,494,966$ Payments to Employees (14,911,683) (8,741,791) (9,942,784) (33,596,258) (27,883,923) Payments of Claims (35,455,875) (7,829,643) (1,806,896) (45,092,414) (86,056,323) Internal Activity - Payment to Other Funds (8,001,948) (3,646,140) (10,725,473) (22,373,561) (7,062,533) Miscellaneous Revenue 16,858 15,406 51,513 83,777 1,364,521

Total Cash Flows from Operating Activities 2,894,503 8,785,482 4,157,587 15,837,572 15,856,708

Cash Flows from Capital and Related Financing ActivitiesCapital Acquisition and Construction (1,116,390) (3,922,892) (4,728,910) (9,768,192) (6,863,585) Capital Grants - 606,073 1,613,153 2,219,226 -Capital Contributions - 49,160 - 49,160 305,876 Sale of Capital Assets - 54,549 - 54,549 903,110 Principal Paid on Debt (2,899,818) (3,218,864) (1,219,198) (7,337,880) (295,290) Interest Paid on Debt (523,722) (2,112,621) (192,446) (2,828,789) (141,374)

Total Cash Flows from Capital and Related Financing Activities (4,539,930) (8,544,595) (4,527,401) (17,611,926) (6,091,263)

Cash Flows from Non-Capital Financing ActivitiesIntergovernmental Revenue 728,037 579,064 776,453 2,083,554 27,134 Transfers In - - 2,654,187 2,654,187 -Transfers Out - - (207,220) (207,220) (3,228,987)

Total Cash Flows from Non-Capital Financing Activities 728,037 579,064 3,223,420 4,530,521 (3,201,853)

Cash Flows from Investing ActivitiesInterest on Investments 697,857 262,891 238,891 1,199,639 790,310 Purchase of Investments 556,694 590,637 - 1,147,331 -

Total Cash Flows from Investing Activities 1,254,551 853,528 238,891 2,346,970 790,310

Net Increase (Decrease) in Cash and Cash Equivalents 337,161 1,673,479 3,092,497 5,103,137 7,353,902 Cash and Cash Equivalents, January 1, 2019 6,659,917 1,150,447 3,938,398 11,748,762 32,301,016

Cash and Cash Equivalents, December 31, 2019 6,997,078$ 2,823,926$ 7,030,895$ 16,851,899$ 39,654,918$

Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities

Net Operating Income (loss) 2,615,095$ 2,394,633$ 2,650,594$ 7,660,322 8,770,177$ Depreciation Expense 3,704,375 8,270,231 2,390,882 14,365,488 4,155,591 Changes in Receivables, Net (2,118,367) (538,351) 177,827 (2,478,891) 1,100,157 Changes in Inventories - - - - (217,673) Changes in Accounts Payable & Other Liabilities (1,323,458) (1,439,426) (1,019,626) (3,782,510) 683,935 Changes in Prepaid Items and Operating Assessments - 82,989 (93,603) (10,614) -Miscellaneous Revenue 16,858 15,406 51,513 83,777 1,364,521

Net Cash Provided (Used) by Operating Activities 2,894,503$ 8,785,482$ 4,157,587$ 15,837,572$ 15,856,708$

Non-Cash Investing, Capital and Related Financing Activities:Contributions of Capital Assets -$ -$ 53,875$ 53,875$ 1,184,148$ Issuance of Refunding Bonds 1,318,868 1,245,415 - 2,564,283 -Payment to Refunded Bond Escrow Agent (1,437,030) (1,464,906) - (2,901,936) -Issuance Premium on Long Term Debt 126,996 231,099 - 358,095 -Bond Expense (8,834) (11,608) - (20,442) -

Non-Cash Investing, Capital and Related Financing Activities -$ -$ 53,875$ 53,875$ 1,184,148$



Snohomish County, WAStatement of Fiduciary Net PositionDecember 31, 2019

Custodial FundsInvestment Trust

Fund

Pension (and Other Employee

Benefit) Trust Funds

ASSETSCurrent AssetsCash and Cash Equivalents 113,841,744$ -$ -$ Investments in State Pool - 494,917,061 -Investments County Pool - 134,059,982 -Investments 2,091,000 - 199,237,907Taxes Receivable 24,733,334 - -Special Assessment Receivable 907,058 - -Interest Receivable 71,976 1,499,571 -Other Receivables, Net 1,136,817 - -Due From Other Governments 11,807 - -Total Current Assets 142,793,736 630,476,614 199,237,907

Total Assets 142,793,736 630,476,614 199,237,907

LIABILITIESCurrent Liabilities:Accounts Payable 21,790,696 - -Due to Other Governments 7,797,307 - -Accrued Liabilities 6,797,613 - -Total Current Liabilities 36,385,616 - -

Total Liabilities 36,385,616 - -

NET POSITIONRestricted for:Pensions - - 199,237,907Pool Participants - 630,476,614 -Individuals, Organizations and Other Governments 106,408,120 - -Total Restricted Net Position 106,408,120 630,476,614 199,237,907

Total Net Position 106,408,120$ 630,476,614$ 199,237,907$


Snohomish County, WAStatement of Changesin Fiduciary Net PositionFor the Year Ended December 31, 2019

Custodial FundsInvestment Trust

Fund

Pension (and Other Employee

Benefit) Trust Funds

ADDITIONS:Contributions

Plan Contributions -$ -$ 12,628,053$ Plan Earnings - - 33,135,958 Investment Purchases - 900,781,150 -

Total Contributions - 900,781,150 45,764,011 Investment Earnings Investment Earnings - 17,845,131 - Less Investment Fees - (111,044) -Net Investment Earnings - 17,734,087 -Trust Fund Investment Sales 1,075,386,553 - -School Apportionment 1,405,006,793 - -Property Taxes 874,161,371 - -Collected for the State 503,544,224 - -Agency Deposits 280,494,527 - -Shared Revenue 38,239,989 - -Interest 18,364,698 - -School Mitigation 4,972,888 - -Special Assessments 4,151,332 - -Total Additions 4,204,322,375 918,515,237 45,764,011

DEDUCTIONS:Investment Sales - 1,075,386,553 -Payment of Claims/Distributions 2,749,291,486 - 10,974,900 Remitted to the State 497,791,373 - -Trust Fund Investment Purchases 918,515,236 - -Total Deductions 4,165,598,095 1,075,386,553 10,974,900

Change in Net Position 38,724,280 (156,871,316) 34,789,111

Net Position - January 1, 2019 67,683,840 787,347,930 164,448,796 Net Position - December 31, 2019 106,408,120$ 630,476,614$ 199,237,907$


Notes to the Financial Statements December 31, 2019

Note 1 Summary of Significant Accounting Policies

General

The County of Snohomish, Washington (the “County”), was incorporated in 1861 and operates under the laws of the State of Washington appl icable to a home rule charter county. The charter was adopted by a vote of the cit izens of Snohomish County in 1979 and can be amended through the charter review process every ten years. The executive branch of the county government is elected at large and consists of the county executive, the prosecuting attorney, the sheriff , the auditor, the clerk, the treasurer, and t he assessor. Fif teen superior court judges and eight distr ict court judges are also elected at large. A f ive-member counci l, elected by distr ict , const itutes the legislat ive body. Snohomish County is a general -purpose government and provides services suc h as public safety, f ire prevent ion, road construct ion and maintenance, parks and recreation, judicial administrat ion, health and social programs and general administrat ion. The County also operates an airport, a fairground, is responsible for the disposa l of sol id waste, and the control of surface water runoff .

The County’s f inancial statements have been prepared in accordance with generally accepted account ing principles (GAAP) as applied to governmental units . The Governmental Accounting Standards Board (GASB) is the accepted standard sett ing body for establishing governmental accounting and f inancial report ing principles. The County implemented the provisions of the following GASB Statement s for 2019: Statement No. 83, Certain Asset Retirement Obligat ions - see note 3.K for further disclosure; Statement No. 84 Fiduciary Activit ies – which resulted in report ing a net posit ion for custodial funds and report ing a statement of changes in net posit ion for custodial funds; Statement No. 88 Certain Disclosures Related to Debt - Including Direct Borrowings and Direct Placements ; and Statement No. 90 Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61 . Statement No. 88 and No. 90 have no impact in the 2019 report ing year. The signif icant accounting pol icies are described below.

1.A Reporting Entity

These f inancial statements present the County (the primary government) and its component units, the Pilchuck Development Corporat ion (“PDC”) and Snohomish County Publ ic Faci l i t ies Distr ict (“PFD”). The component units are combined and presented in a single column on the government -wide f inancial statements.

In determining the f inancial report ing ent ity, the County complies with the provisions of GASB Statement No. 14, “The Financial Report ing Entity, ” GASB Statement No. 39, “Determining Whether Certain Organizations Are Component Units ,” and GASB Statement No. 61 “The Financial Report ing Entity: Omnibus ”. Accordingly, the County reports as component units those entit ies where the County appointed a vot ing majority of the board of directors, and the County is either able to impose its wi l l , or where a f inancial benef it or burden relat ionship exists.

The County created the PDC in 1983 to promote and f inance industr ial development. The Snohomish County Counci l appoints the Corporat ion's board of directors. The


Corporation may issue industr ial revenue bonds to f inance industr ial development facil i t ies upon approval of the County Counci l; however, the County has no f inancial responsib i l i ty for such bonds.

Snohomish County establ ished the PFD in July 2001 for the sole purpose of pursuing joint ownership, f inancing, or operat ional relat ionships with any other publ ic agency within the County for the development of regional center project s and/or with a nonprof it ent ity for the development of a regional center project at Paine Field. A f ive -member board of directors appointed by the County Counci l governs the PFD. The PFD cannot enter into contracts or agreements greater than $50 thousand without Snohomish County Counci l approval.

The PFD has formalized support for four regional centers: the City of Everett Publ ic Facil i t ies Distr ict ’s Arena and Parking Garage, the South Snohomish County Publ ic Facil i t ies Distr ict ’s Regional Convention Center in Lynnwood, the City of Edmonds Publ ic Facil i t ies Distr ict ’s remodel of the Puget Sound Chr ist ian College for use as a Performing Arts and Convent ion Center, and the Future of Flight in conjunction with Snohomish County Paine Field Airport.

Financial statements for the Pi lchuck Development Corporat ion and Snohomish Publ ic Facil i t ies Distr ict can be obtained by wr it ing to the Snohomish County Finance Department, MS 610, 3000 Rockefeller Ave., Everett, WA 98201.

1.B Measurement Focus, Basis of Accounting, and Financial StatementPresentation

Government-Wide Financial Statements The statement of net posit ion and statement of act ivit ies present f inancial information about the County as a whole on a ful l accrual basis with an economic resour ce measurement focus. They include al l funds except for the f iduciary funds, which are reported separately. The statements dist inguish between governmental and business -type act ivit ies. Governmental act iv it ies generally are f inanced through taxes, intergovernmental revenues, and other non-exchange revenues. Business-type act iv it ies are f inanced in whole or in part by fees charged to external part ies for goods or services. Program revenues as reported on the statement of act ivit ies include charges to customers and users of goods or services provided by that program, and grants or contr ibut ions that are restr icted for use by that program. Taxes and other revenues that are not specif ic to a part icular program are reported as general revenues.

The expenses and program revenues of governmental act ivit ies are reported on the statement of act ivit ies by function/program. Fund f inancial statements also report governmental fund expenditures by function/program. The County reports the following functions/programs:

General Government - Legislat ive and administrat ive services, including expenses for recording and elect ions, f inancial services, legislat ive, personnel administrat ion, administrat ion and faci l i ty management.


Judicial - Court system for civi l , cr iminal, and juvenile cases, including jury and witness fees and other judicial and legal costs.

Public Safety - Protect ion and safety of the cit izenry at large, including expenses for law enforcement, f ire protect ion services, inspect ions and regulator y enforcements, detent ion and correct ions, emergency services and juvenile services.

Physical Environment - Conservat ion and preservat ion of the environment .

Transportat ion - Programs to ensure safe and adequate f low of vehicles and pedestr ians in the County, including costs for road and street preservat ion, construct ion, and maintenance.

Health and Human Services - Programs that provide prevention, intervention, and rehabi l i tat ive human services for County cit izens with an emphasis on serving those most in need. They include costs associated with programs such as veterans ’ services, mental health, substance abuse prevent ion and treatment, publ ic health, services for the disabled and aging, homeless services, chi ldren’s services, and other general welfare and assistance.

Economic Environment - Community planning and development services, housing programs, and promotion of tourism.

Culture and Recreation - Costs primar i ly associated with the maintenance and general operat ions of County parks, trai ls, nat ural land and recreational facil i t ies, and fairgrounds, along with other educat ional and recreat ional act ivit ies for youth, famil ies, and seniors.

Interfund Activity Interfund act ivity can be classif ied into two general categories:

Reciprocal interfund act ivit ies are transfers similar to exchange and exchange -l ike transactions (quasi -external). Interfund services provided and used are reported as revenues in the sel ler funds and expenditures/expenses in the purchaser funds.

Nonreciprocal interfund act ivit ies are nonexchange transact ions – no equivalent value is received for the assets transferred and there is no requirement for repayment. They include interfund transfers and interfund reimbursements. Interfund transfers have been el imina ted within the governmental act ivit ies and business-type act ivit ies categories. Transfers between these two act ivit ies are reported on the statement of act ivit ies. Interfund reimbursements have been el iminated f rom the statement of act ivit ies. See Note 3I for detai ls of interfund balances and transfers .

Fund Financial Statements The fund f inancial statements individual ly present major funds and present non -major funds in total. A fund is considered major if i t is the pr imary operating fund of the enti ty or if i ts assets plus deferred outf lows, l iabil i t ies plus deferred inf lows, revenues, or expenditures/expenses equal at least 10% of the corresponding total for al l funds of that

Notes to the Financial Statements December 31, 2019 category or type, and at least 5% of the corresponding total for all gover nmental and enterpr ise funds combined. Separate f inancial statements are provided for governmental, proprietary, and f iduciary funds. The governmental fund f inancial statements are prepared using a modif ied accrual accounting basis with a current f inancial resources measurement focus. The modif ied accrual basis differs f rom the full accrual basis in the following ways:

Purchases of capital assets are considered expenditures. Redemptions of long-term debt are considered expenditures when due. Proceeds f rom long-term debt are considered "other f inancing sources" when

received. Revenues are recognized as soon as they become both measurable and avai lable

to f inance expenditures of the current per iod. Revenues are considered avai lable if received within 60 days , however, grant revenue is recognized when earned .

Interest on long-term debt is not accrued, but is recorded as an expenditure when due.

Accumulated unpaid vacation, sick pay, and other employee benef its ar e considered expenditures when paid.

The governmental funds are accounted for with a f low of current f inancial resources measurement focus, which emphasizes the current sources and uses of resources. The County reports the fol lowing governmental funds: The general fund is the primary operat ing fund of the County. I t is used to account for al l f inancial resources except those funds required to be accounted for separately. Special revenue funds account for revenues which are to be ut i l ized for specif ic purposes and/or expenditures incurred in the performance of specif ic act ivit ies. Major special revenue funds include the County Road Fund and the Human Services Fund.

The County Road Fund accounts for the construct ion, maintenance, and inspect ion of county streets, roads, and bridges and the design and coordinat ion of countywide public works projects. Revenue is pr imar i ly f rom road and other taxes and from state and federal grants.

The Human Services Fund is for the administrat ion, planning, develop ment, and provision of the fol lowing services: energy and weather izat ion assistance, long -term care and aging, developmental disabil i t ies, mental health, chemical dependency, community services, chi ldren and family, housing, homelessness and community development, and veteran's rel ief . Revenue comes from sales and other taxes, state and federal grants, state and county mandated charges for services, general County revenues, as wel l as f rom a tax levy for mental health, developmental disabil i t ies, and veterans’ assistance.

The debt service funds account for the accumulat ion of resources for the payment of general and special assessment long -term debt.

Notes to the Financial Statements December 31, 2019 Capital projects funds account for the resources and expenditures relat ing to the acquisit ion and deve lopment of capital improvements other than those accounted for in the propr ietary funds.

The Capital Projects Fund is a major fund for 2019 and accounts for major building projects that are done throughout the County. Major projects in 2019 included the renovat ion of both the courthouse and the Carnegie building among others. The courthouse is st i l l undergoing renovat ion and the Carnegie bui lding renovation completed in 2019. Revenues are primar ily obtained f rom bond proceeds.

Propr ietary funds are accounted for with a f low of economic resources measurement focus, which emphasizes the measurement of costs and determinat ion of net income. They consist of enterprise fund types and internal service fund types . Al l assets and al l l iabil i t ies are reported on the balance sheet. Revenues and expenses are reported on a ful l accrual basis - revenues are recorded when earned, expenses are recorded when a measurable l iabi l i ty has been incurred. Propr ietary funds disclose the composit ion of cash f lows on a separate statement of cash f lows. Operat ing income for the proprietary funds includes al l revenues der ived in the normal course of operat ions except for interest and investment earnings, gain or loss on the sale of capital assets, capital grants and contr ibut ions, and some miscellaneous non-recurring revenues which are accounted for as non-operat ing. Operating expenses include all expenses derived in the normal course of operat ion. Non-operating expenses include interest expense and any other expenses not incurred as a result of the normal operat ion and purpose of the fund. Enterprise funds account for operat ions of business -type act ivit ies, which are f inanced primari ly by user charges. The accounting focus is on the measurement of costs and the determinat ion of net income. The County maintains three enterpr ise funds: sol id waste management, airport operat ion and maintenance, and surface water management.

The Sol id Waste Management Fund, administered by the department of public works, accounts for the operations, capital improvements, and debt service of the County’s sol id waste facil i t ies. Revenue comes from the collect ion of fees at the facil i t ies.

The Airport Fund accounts for the operations, capital improvements, and debt

service of Paine Field, Snohomish County's airport. The fund is supported by fees for services. Addit ional capi tal funding is received f rom federal grants, and bond issues may be used to f inance capital improvements.

The Surface Water Management Fund, administered by the department of publ ic works, accounts for operat ions relat ing to the management of storm draina ge and surface water. Revenue comes from the col lect ion of charges to property owners.

Internal service funds account for central ized operat ions related to providing goods or services to various County departments on a cost -reimbursement basis. The County’s internal service funds are presented in the proprietary fund f inancial statements. In the government-wide f inancial statements, interfund transactions relat ing to internal service fund act ivity have been el iminated. Any residual act ivity and net posit ion are reported as governmental act ivit ies. The County maintains eight internal service funds:

Notes to the Financial Statements December 31, 2019 equipment rental and revolving fund, information services fund, Snohomish County insurance fund, pits and quarries fund, employee benef it fund, facil i ty serv ices fund, training fund, and the secur ity services fund. Fiduciary Funds The County’s f iduciary funds consist of an investment trust fund , pension (and other employee benef it) trust fund, and custodial funds. The investment trust fund holds the investments of the entit ies in which the County is act ing as custodian. The pension (and other employee benef it) trust fund reports the County ’s 457 deferred compensation plan. The custodial funds are ut i l ized to account for cash received and disbursed in Snohomish County’s capacity as ex-off icio treasurer, col lect ion agent, or custodian for special purpose distr icts, other governments, and individuals. 1.C Assets, Deferred Outflows, Liabilit ies, Deferred Inflows, and Equity Cash and Cash Equivalents Cash and cash equivalents (original maturit ies of 3 months or less) include funds held by the County Treasurer, the Washington State Treasurer ’s Local Government Investment Pool, and bank accounts not administered by the County Treasurer. These are primari ly depository accounts, revolving accounts, and change funds. The Washington State Treasurer ’s Local Investment Pool is considered to be cash equivalent as funds held within the pool can be l iquidated on demand to meet daily cash f low needs. Investments The County Investment Pool is classif ied as i nvestments as the pools average maturity is greater than a year. Addit ional cash and investment disclosures are presented in Note 3A. Interfund Receivables and Payables Occasional ly, transactions for goods and services between County funds may result in amounts which are due but not yet paid. These are reported as “due to/f rom other funds” on the balance sheet. Short -term interfund loans are reported as “due to/f rom other funds.” Long-term interfund loans (non-current port ion) are reported as “advances to/ f rom other funds.” Receivables Property taxes levied for the current year are recorded as taxes receivable and deferred inf low. As tax payments are col lected, the taxes receivable and deferred inf low balances are reduced and revenue is recognized in the fund statement s. See Note 3B-Taxes Receivable. Other receivables include amounts due f rom private individuals and organizat ions for goods or services rendered. Amounts reported as due from other governments represent receivables f rom other governments for goods and services rendered, grant reimbursements , or entit lements. Amounts due for grant reimbursements are recorded in the period in which the authorized disbursements are made.

Notes to the Financial Statements December 31, 2019 Inventories and Prepaid Items Governmental funds use the purchase method whereby inventory items are considered expenditures when purchased. Propr ietary funds value inventories using average cost method. Certain other purchases representing costs applicable to future accounting periods are recorded as prepaid items in both government -wide and fund f inancial statements. Capital Assets Capital assets are recorded at actual cost. Donated capital assets are recorded at acquisit ion value on the date of donation. Capital costs in the governmental funds are reported as expenditures of the current period in the fund f inancial statements and as assets in the government -wide f inancial statements. Individual assets (except infrastructure and sof tware) with a total cost of less than $5 thousand are reported as expenses in the per iod in which they were incurred. Infrastructure expenditures (roads, bridges, traff ic signals, and other public property) and sof tware expenditures in excess of $100 thousand are capital ized and depreciated over their est imated useful l i fe in the government-wide f inancial statements. Depreciat ion of capital assets is reported as an al located expense in the statement of act ivit ies. Depreciat ion is calculated using the straight - l ine method based on the est imated useful l i fe of the asset. Generally, bui ldings and other l and improvements are assigned est imated useful l ives of 5 to 50 years, machinery and equipment 3 to 20 years, and infrastructure 5 to 100 years. Restricted Assets and Liabilit ies Restricted assets include cash and investments that are subject to legal restr ict ions and other assets which are considered to be restr icted for a part icular purpose such as unspent bond proceeds. Related l iabi l i t ies are reported as payable f rom restr icted assets. Investment in Joint Ventures AHA – Alliance for Housing Affordability: In September 2013, Snohomish County joined the cit ies of Edmonds, Everett, Granite Falls, Lake Steve ns, Lynnwood, Marysvi l le, Mil l Creek, Mount lake Terrace, Muki lteo, Snohomish, and the Town of Woodway to establ ish the Al l iance for Housing Affordabil ity (AHA). The agreement was amended in May 2014 to add the City of Arl ington and in June 2014 to add the City of Stanwood. The purpose of AHA is to cooperat ively formulate affordable housing goals and pol ic ies and to foster efforts to provide affordable housing by providing expert ise and information to member jurisdict ions. Operating funding is provided by the member s. AHA is governed by a Joint Board composed of an elected off icial f rom each member. The Joint Board is responsible for review and approval of al l budgetary, f inancial, pol icy, and contractual matters. The Board is assisted by an administrat ive staff housed at the Housing Author ity for Snohomish County (HASCO). Fiscal agent duties were transferred to HASCO dur ing f iscal year 2018.

Notes to the Financial Statements December 31, 2019 Each member is responsible for contr ibut ing operating revenues as determined from the AHA annual budget. Contr ibut ions f rom the member s are based on each member's populat ion. A grant from the Gates Foundation provided $50 thousand to assist with the f irst two years of organizational start -up. Snohomish County ’s equity share for 2019 is:

Fiscal Year 7/1/19-6/30/20

AHA’s Total Fiscal Year

Budget Snohomish County’s

Share of Budget

Snohomish County’s Share as % of Total

AHA Budget 2020 $112,408 $36,831 32.77%

Members withdrawing from the agreement relinquish all r ights to any reserve funds, equipment, or material purchased. Upon dissolut ion, the agreement provides for distr ibut ion of net posit ion among the members based on the percentage of the total annual contr ibut ions during the period of the Agreement paid by each member. Addit ional f inancial information can be obtained f rom HASCO, 12711 4 t h Ave W, Everett, WA 98204 or f rom All iance for Housing Affordabi l i ty, 12711 4 t h Ave W, Everett, WA 98204. Snohomish County 911 , a cash basis special purpose distr ict, was establ ished via an inter local agreement between Snohomish County, the cit ies, towns, f ire distr icts, pol ice distr icts, and other service distr icts to joint ly establ ish, maintain and operate a support communications center. Snohomish County 911 takes 911 cal ls, and performs emergency dispatch services for local governmental agencies including pol ice, f ire and medical aid. Control of Snohomish County 911 is with a 16 member Board of Directors as specif ied in the Interlocal Agreement. In the event of the dissolut ion of Snohomish County 911, any remaining equity shall be returned to the part ies to this Agreement in proport ion to their c ontr ibut ion dur ing the f iscal year of dissolut ion. Before deducting the payment of al l costs, expenses and charges val idly incurred, Snohomish County ’s equity share is $5.7 mil l ion as of December 31, 2019. The County ’s equity interest increased part ial ly due to the 2019 merger of Snohomish County Emergency Radio System (SERS) into Snohomish County 911 in which Snohomish County ’s equity interest in SERS transferred to Snohomish County 911. Complete f inancial statements for Snohomish County 911 can be obtained f rom Snohomish County 911’s administrat ive off ice at 1121 SE Everett Mall Way, Suite 200, Everett, WA 98208 . Deferred Outflows A deferred outf low of resources is a consumption of net posit ion that is applicable to a future report ing per iod. Deferred outf lows are recorded for pensions, asset ret irement obl igat ions and deferred loss on refunding. Long-Term Debt Long-term debt incurred by the governmental funds is not reported as a l iabi l i ty in the governmental fund f inancial statements, but is reported in the government -wide statement. The debt proceeds ( including any bond premium or discount) are reported as other f inancing sources and payment of principal, interest, and debt issuance costs

Notes to the Financial Statements December 31, 2019 are reported as expenditures in the fund f inancial statements. Propr ietary fund debt is reported on the same basis in both the government -wide and fund f inancial statements. Bond premiums, discounts, and deferred amounts on refunding are deferred and amort ized over the l i fe of the bonds. Employee Benefits Payable The County’s policies regarding vacation, sick leave and compensatory t ime permit employees to be compensated for earned but unused vacat ion leave, compensatory t ime, and a port ion of their sick leave. The l iabil i ty for such compensated a bsences in governmental funds is recorded as expenditures when taken and as long-term debt in the government-wide statements. Proprietary fund report ing is the same in both the fund statements and the government -wide statements. The current port ion of th is debt is est imated based on histor ical trends. Also see Notes 3G Compensated Absences and 3H Accrued Liabi l i t ies. Pensions For purposes of measuring the net pension l iabil i ty, deferred outf lows of resources and deferred inf lows of resources related to p ensions, and pension expense, information about the f iduciary net posit ion of al l state sponsored pension plans and addit ions to/deduct ions f rom those plans ’ f iduciary net posit ion have been determined on the same basis as they are reported by the Washingt on State Department of Retirement Systems. For this purpose, benef it payments ( including refunds of employee contr ibut ions) are recognized when due and payable in accordance with the benef it terms. Investments are reported at fair value. Unearned Revenue Unearned revenues are recorded for certain grant related advances and prepaid revenues. Deferred Inflows A deferred inf low of resources is an acquisit ion of net posit ion that is appl icable to a future report ing period. Deferred inf lows are recorded for property taxes, special assessments, pensions, service concession arrangements, and deferred gain on refunding. There are differences between certain deferred inf lows reported on the fund statements and those reported on the entity-wide statements. Deferred inf lows for property taxes and special assessments , for example, are reclassif ied to revenue on the entity-wide statements. Equity Classifications The government-wide f inancial statements present equity as net posit ion and are displayed in three components:

Net investment in capital assets: Consists of capital assets, net of accumulated depreciat ion and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attr ibutable to the acquisit ion, construct ion, or improvement of those assets.

Restricted net posit ion: Consists of net posit ion with constraints placed on the use either by (1) external groups such as creditors, grantors, and contr ibutors; or (2) legal restr ict ions result ing f rom constitut ional provisions or enabl ing legislat ion.


Unrestr icted net posit ion: Al l other net posit ion that does not meet the def init ion of “restr icted” or “net investment in capital assets.”

The governmental funds ’ f inancial statements present equity as fund balance. Fund balance is further classif ied as nonspendable, restr icted, committed, assigned, or unassigned. Unless otherwise directed by the County Counci l, County Executive, or Director of Finance and committed to writ ing, resources shal l be ut i l ized in the following order: restr icted, committed, assigned, and unassigned. Committed fund balance is committed for a specif ic purpose pursuant to constraints imposed by a formal act ion such as a County ordinance adopted by the County ’s highest level of decision-making author ity, the County Counci l with approval of the County Executive. Similar formal act i on is required to create, modify, or rescind an ordinance. Assigned fund balance are resources intended to be used for a specif ic purpose. Per pol icy, assignments are expressed by the governing body or an off icial authorized by the governing body. No formal act ion is required to real locate assigned fund balance. Propr ietary fund equity is classif ied the same as in the government -wide statements. Note 2 Stewardship, Compliance, And Accountability 2.A Budgetary Data Budget Policies and Controls In accordance with the Snohomish County Charter, the County Council is required to adopt annual budgets for al l budgeted funds for the next f iscal year no later than thirty days pr ior to the end of the current f iscal year. Each quarter during the f iscal year, the Execut ive must submit a writ ten report to the Counci l explaining the relat ionship between the est imated income and expenses and actual income and expenses to date. I f income is est imated to be less than ant icipated, the Counci l may reduce appropr iat ions as necessary to keep expenditures within income. The County Council may also modify the budget on an emergency basis by appropriat ing contingency funds, revenues received in excess of budgeted revenues, or funds f rom any other legally available so urce. Al l appropr iat ions lapse at the end of the year with the except ion of project - length budgets for capital project funds. The legal level of budgetary control, the level at which expenditures may not legally exceed appropr iat ions, is at the fund/depa rtment/program level for al l budgeted funds. For example, the Sherif f ’s Off ice’s budget that is included in the General Fund may have mult iple programs that cannot be individual ly exceeded. Three special revenue funds were not budgeted for the f iscal year ended December 31, 2019. Per RCW 84.56.020, no budget is required for the Treasurer ’s Operations and Maintenance Special Revenue Fund . The Law Library is governed by a Board separate f rom the County Counci l. That Board is responsible for sett ing and monitoring the Law Library’s annual budget. Due to another entity being separately responsible for the Law Library’s budget, that budget is not included in the County ’s annual f inancial statements. The River Management Fund was not budgeted as there were no expenditures ant ic ipated for 2019.

Notes to the Financial Statements December 31, 2019 Basis of Budgeting Annual appropr iated budgets are adopted for the general, special revenue, debt service, and propr ietary funds on the modif ied accrual basis of accounting . Budgets for capital project funds are adopted at the level of the individual project for f iscal periods that correspond to the l ives of the projects. Annual appropriated budgets are adopted at the program level within each fund ("appropriat ion unit"). Encumbrances An encumbrance system is maintained to account for commitments result ing f rom approved purchase orders and contracts. Al l appropr iat ions lapse at the end of the year with the except ion of Capital Project Funds . Accordingly, encumbrances outstanding at year-end must be absorbed within budget appropr iat ions for the next year. 2.B Deficit Fund Equity At December 31, 2019 the fol lowing internal service funds had a def icit net posit ion:

The Insurance Fund def icit has resulted f rom major claims that were sett led along with the implementat ion of GASB 68. The county is in the process of adjust ing rates to departments to address the def ic it related to claims. Information Services Fund def icit is due to the implementat ion of GASB 68 . Note 3 Detail Notes on Transaction Classes/Accounts The following notes present detai l information to support the amounts reported in the basic f inancial statements for i ts var ious assets, l iabil i t ies, equity, revenues, and expenditures/expenses. 3.A Deposits and Investments Deposits RCW 39.58.130 authorizes the investment of municipal funds in deposits in qual if ied public depositar ies, provided, that in no case, shal l the aggregate of demand and investment deposits of public funds by any such treasurer in any one publ ic depositary exceed at any t ime the net worth of that depositary. Custodial Credit Risk Custodial credit r isk for deposits is the r isk that, in the event of a fai lure of a depository f inancial inst itut ion, the County wi l l not be able to recover deposits or wi l l not be able to recover col lateral securit ies that are in the possession of an outs ide party. The County’s deposits and cert if icates of deposits are mostly covered by the federal deposit insurance (FDIC) or by col lateral held in a mult iple f inancial inst itut ion col lateral pool administered by the Washington Publ ic Deposit Protect ion Comm ission (PDPC). Al l deposits are held

Insurance Fund 20,263,847$ Information Services Fund 1,837,042 22,100,889$

Internal Service Funds

Notes to the Financial Statements December 31, 2019 by the County’s agent, in the name of the County. Washington State restr icts deposits of funds in f inancial inst itut ions physically located in the State of Washington unless otherwise expressly permitted by statute and author ized by the PDPC. No deposit amounts were exposed to custodial credit r isk as uninsured or uncol lateralized . Investments Interest Rate Risk Interest rate r isk is the r isk the County may face should interest rate var iances affect the fair value of investments. In accordance with its investment pol icy, the County manages its exposure to investments that are highly sensit ive to changes in fair value due to interest rate change by l imit ing the weighted average maturity of its investments. In accordance with the County’s investment policy, 20% of the County ’s portfol io must be comprised of investments maturing within one year. Satisfying this requirement, remaining funds may be invested in authorized secur it ies not to exceed f ive years in maturity. The weighted average matur ity and durat ion of the portfolio shall not exceed three years. Presented below are the County ’s investments and matur it ies as of December 31, 2019:

Credit Risk Credit r isk is the r isk that an issuer or other counterparty to an investment wi l l not fulf i l l i ts obl igat ions. Snohomish County ’s investment pol icy addresses credit r isk by l imit ing the amount that can be invested in any one issuer. As of December 31, 201 9, there was no concentrat ion of credit r isk exceeding the pol icy guidel ines. Presented below is the credit quality rat ings for securit ies with credit exposure as of December 31, 201 9.

Investment Type Fair Value Less than 1 1 to 5U.S. Agency Notes 200,384,936$ 85,485,246$ 114,899,690$ U.S. Treasury Notes 21,110,415 - 21,110,415 Municipal Bonds 78,902,302 21,266,061 57,636,241 Supranationals 22,654,570 2,522,725 20,131,845 Total 323,052,223$ 109,274,032$ 213,778,191$

Other SecuritiesLocal Government Investment Pool 678,323,842$ Municipal Investor Accounts 43,791,633 Certificates of Deposit 100,500,000

1,145,667,698$

Investments and Maturities (In Years)


Custodial Credit Risk Custodial credit r isk for investments is the r isk that in the event of the failure of the counterparty, the County wil l not be able to recover the value of its investments or col lateral securit ies that are in the possession of an outside party. The County ’s investment pol icy requires that al l investments be held by the County’s third party safekeeping agent in the County ’s name. Concentration of Credit Risk Concentrat ion of credit r isk is the r isk of loss attr ibuted to the magnitude of the government ’s investment in a single issuer. The County investment pol icy minimizes concentrat ion r isk by diversifying the investment portfol io so that the impact of potential losses f rom any one type of security or f rom any one individual issuer wi l l be minimized. Detailed information on concentrat ion r isk is covered in the Snohomish County investment pol icy. Presented below is the maximum al lowed by pol icy and the actual as of December 31, 2019.

Investment Type Fair Value Amortized

Cost AAA/Aaa AA/Aa A Not Rated U.S. Agency Notes 200,384,936$ -$ -$ 200,384,936$ -$ -$ U.S. Treasury Notes 21,110,415 - 21,110,415 - - - Municipal Bonds 78,902,302 - - 78,902,302 - - Supranationals 22,654,570 - 22,654,570 - - - Local Government Investment Pool - 678,323,842 - - - 678,323,842 Municipal Investor Accounts - 43,791,633 - - - 43,791,633 Certificates of Deposit - 100,500,000 - - - 100,500,000 Total 323,052,223$ 822,615,475$ 43,764,985$ 279,287,238$ -$ 822,615,475$

Investment Type Fair Value Amortized Cost Total % of

Portfolio

Maximum Allowed Per Investment

PolicyU.S. Agency Notes $200,384,936 $ - $ 200,384,936 17.5% 90.0%U.S. Treasury Notes 21,110,415 - 21,110,415 1.8% 100.0%Municipal Bonds 78,902,302 - 78,902,302 6.9% 15.0%Supranationals 22,654,570 - 22,654,570 2.0% 15.0%Local Government Investment Pool - 678,323,842 678,323,842 59.2% 100.0%Municipal Investor Accounts - 43,791,633 43,791,633 3.8% 30.0%Certificates of Deposit - 100,500,000 100,500,000 8.8% 30.0%Total $323,052,223 $ 822,615,475 $ 1,145,667,698

Notes to the Financial Statements December 31, 2019 Fair Value of Total Investments In the f inancial statements, Snohomish County investments are recorded at par which is materially equivalent to fair market value. As of December 31, 2019, the change in fair value of total investments was a n increase of $1,671,089 or 0.15% of the total portfol io. This gain would only be real ized if every investment held needed to be immediately l iquidated. The unrealized gain associated with the fair market value change has not been recorded due to immaterial ity. Investments in Local Government Investment Pool (LGIP) The County is a part icipant in the Local Government Investment Pool (LGIP) which is managed and operated by the Washington State Treasurer. The State Finance Committee is the administrator of the statute that created the pool and adopts rules. The State Treasurer is responsible for establishing the investment pol icy for the pool and reviews the policy annual ly and proposed changes are reviewed by the LGIP advisory committee. Investments in the LGIP, a qual if ied external investment pool, are reported at amor t ized cost which approximates fair value. The LGIP is an unrated external investment pool. The pool portfol io is invested in a manner that meets the matur ity, qual ity, diversif icat ion and l iquidity requirements set forth by GASB 79 for external investmen t pools that elect to measure, for f inancial report ing purposes, investments at amort ized cost. The LGIP does not have any legally binding guarantees of share values. The LGIP does not impose l iquidity fees or redemption gates on part ic ipant withdrawals. The Off ice of the State Treasurer prepares a stand -alone LGIP f inancial report. A copy of the report is avai lable f rom the Off ice of the State Treasurer, PO Box 40200, Olympia, Washington 98504-0200, onl ine at http:/ /www.tre.wa.gov. External Investment Pool The Snohomish County Investment Pool (SCIP ) is the external investment pool sponsored by the County and was establ ished in 2006. The SCIP is not registered with the SEC. The Revised Code of Washington (RCW) 36.29.010, 36.29.020, 36.29.022 and 36.29.024 state the Treasurer ’s dut ies related to investments. Oversight of the SCIP is provided by the Snohomish County Finance Committee pursuant to RCW 36.29.020. The County Finance Committee consists of the County Trea surer, County Execut ive and Chairman of the County Council. The County Finance Committee meets at a minimum, semi-annual ly. Reports are provided to the Committee on a quarterly basis. The County Finance Committee approves investment pol ic ies for the County. The County’s investment pol icy has been cert if ied by the Washington Publ ic Treasurers ’ Associat ion and is in compliance with state law. Voluntary pool part ic ipants manage their own cash and direct the County Treasurer by wr it ten request to deposi t or withdraw monies f rom their funds for investment purposes. Voluntary pool part icipants consist of Junior Taxing Distr icts, Cit ies, Hospitals and a Health Distr ict. The col lect ive pool earnings, net of administrat ive fees, are distr ibuted to part ic ipants based on their average pooled balances for the per iod. Earnings are calculated based on 1) real ized investment gains and losses 2) interest income based

Notes to the Financial Statements December 31, 2019 on an accrual basis; and 3) amort izat ion of discounts and premiums on a straight l ine basis. The part icipants ’ shares in the pool are purchased and redeemed at face value. The aggregate value of al l part ic ipants ’ investments equal the total face value of the pool at al l t imes. The SCIP does not have any legally binding guarantees of share values. RCW 36.29.020 authorizes the County Treasurer to invest its surplus cash and any funds of municipal corporat ions which are not required for immediate expenditure and are in the custody or control of the County Treasurer. The interest earnings f rom these fund s is deposited into the County general fund per the RCW. The total amount of income from the SCIP assigned to the County ’s general fund for the year was $3,913,393. These invested surplus funds represent on average 28.9% of the SCIP. Snohomish County Treasurer ’s Off ice has retained the services of an outside f irm to evaluate, provide compliance oversight and issue a quarterly report analysis of the SCIP. The SCIP does not have a credit rat ing and had a weighted average maturity of 2.01 years as of December 31, 2019. Investments in the SCIP are disclosed at fair value in accordance with GASB Statement No 72. Fair value is determined using quoted market prices f rom the County’s safekeeping agent. The pricing is provided to our safekeeping agent by Interact ive Data Corporat ion (IDC). The market values are uploaded into the County’s investment sof tware on a monthly basis. Presented below is the l ist of investments as of December 31 , 2019 in the SCIP, ref lect ing the average interest rate and the we ighted average maturity (WAM).

Fair Value of Investments in the Snohomish County Investment Pool (SCIP) In the f inancial statements, Snohomish County investments are recorded at par which is materially equivalent to fair market value.

Investment Type Principal Amount Fair Value Amortized Cost

Average Interest

Rate

Weighted Average

Maturity (Years)U.S. Agency Notes 199,125,000$ 200,384,936$ -$ 2.01% 2.27U.S. Treasury Notes 21,000,000 21,110,415 - 1.76% 2.82Municipal Bonds 63,950,000 64,818,848 - 2.03% 1.96Supranationals 22,500,000 22,654,570 - 2.25% 3.47Local Government Investment Pool 9,579,989 - 9,579,989 1.77% 0.00Municipal Investor Accounts 43,791,633 - 43,791,633 1.83% 0.00Certificates of Deposit 100,500,000 - 100,500,000 2.57% 2.19Total 460,446,622$ 308,968,769$ 153,871,622$ 2.11% 2.01

Notes to the Financial Statements December 31, 2019 As of December 31, 2019, the change in fair value of investments held in t he SCIP was an increase of $1,557,635 or 0.34% of the portfol io. This gain would only be real ized if every investment held needed to be immediately l iquidated. The unreal ized gain associated with the fair market value change has not been recorded due to immateriality. Investments Held Outside External Pool Distr icts not part ic ipat ing in the SCIP can have the County Treasurer manage their cash invested outside of the SCIP. Monies can be invested i nto the LGIP or individual investments. Writ ten request notices specifying f ixed maturity dates and the amounts to be invested must be submitted to the Treasurer. Purchases are made under the same guidelines as SCIP purchases and in accordance with the Co unty’s investment pol icy and governing statutes. County Funds can also be invested outs ide of the SCIP. Presented below is a summary of investments outside of the Snohomish County Investment Pool (SCIP) as of December 31, 201 9.

Fair Value of Investments Held Outside the External Pool In the f inancial statements, Snohomish County investments are recorded at par which is materially equivalent to fair market value. As of December 31, 2019, the change in fair value of investments held outside the External Pool was an increase of $113,454 or 0.81% of the portfol io. This gain would only be realized if every investment held needed to be immediately l iquidated. The unreal ized gain associated with the fair market value change has not been recorded due to immaterial ity. Investments Measured at Fair Value The County measures and reports investments at par in the f inancial statements and discloses investments at fair value using the valuation input hierarchy established by general ly accepted account ing p rinciples, as fol lows: Level 1 : Quoted pr ices in act ive markets for identical assets or l iabil i t ies. Level 2: These are quoted market prices for similar assets or l iabi l i t ies, quoted prices for identical or similar assets or l iabi l i t ies in markets which are not act ive, or other quoted prices that are not observable.

Investment Type Principal Amount Fair Value Amortized Cost

Average Interest

Rate

Weighted Average

Maturity (Years)U.S. Agency Notes -$ -$ -$ 0.00% 0.00Municipal Bonds 13,970,000 14,083,454 - 1.40% 1.26Municipal Investor Accounts - - - 0.00% 0.00Certificates of Deposit - - - 0.00% 0.00Total 13,970,000$ 14,083,454$ -$ 1.40% 1.26

Notes to the Financial Statements December 31, 2019 Level 3 : Unobservable inputs for assets or l iabil i ty

In accordance with GASB 31 the following is a Condensed Statement of Net Posit ion and Condensed Statement of Changes in Net Posit ion for the Internal and External Pooled investments:

Investments by Fair Value Level 12/31/2019 Level 1 Level 2 Level 3

U.S. Agency Notes 200,384,936$ -$ 200,384,936$ -$ U.S. Treasury Notes 21,110,415 21,110,415 - - Supranationals 22,654,570 - 22,654,570 - Municipal Bonds 78,902,302 - 78,902,302 - Total 323,052,223$ 21,110,415$ 301,941,808$ -$

Investments Measured at

Amortized Cost

Local Government Investment Pool (LGIP) 678,323,842$ Certificate of Deposits 100,500,000 Municipal Investor Accounts 43,791,633 Total 822,615,475

Total Investments 1,145,667,698$


3.B Taxes Receivable Taxing Authority The County is authorized to levy both “regular” property taxes and “excess” property taxes. Regular property taxes are subject to l imitat ions as to rates and amounts, and are imposed for general municipal purposes, including the payment of debt service on l imited tax general obl igat ion bonds. The Coun ty also may impose “excess” property taxes that are not subject to l imitat ion when authorized by a 60 % majority popular vote, as provided in Art ic le VII, Section 2, of the State Const itut ion and Revised Code of Washington (RCW), RCW 84.52.052. To be val id , such popular vote must have a minimum voter turnout of 40% of the number who voted at the last County general elect ion. Excess levies may be imposed without a popular vote when necessary to prevent the impairment of the obligat ion of contracts. Property Tax Rates and Limitations The Washington State Const itut ion and Washington State law (RCW 84.55.010) al low count ies to l imit the rate of property taxes. A county may levy taxes at a maximum rate of $1.80 per $1,000 of assessed value against al l real and personal property subject to taxation for general county purposes. This includes payment of principal and interest on bonds issued by the County without a vote of the people, including l imited tax general bond obligat ions (RCW 84.52). The County ’s regular levy for 2019 was $0.69 per $1,000 on an assessed valuation of $133 bi l l ion for a total regular tax levy of $91.2 mil l ion.

Condensed Statement of Net Position (SCIP and LGIP)

External Internal TotalAssetsLocal Government Investment Pool (LGIP) & Other Investments 494,917,061$ 174,783,456$ 669,700,517$ External Investment Pool (SCIP) 135,559,553 330,335,564 465,895,117 Total Assets 630,476,614$ 505,119,020$ 1,135,595,634$

Equity/Held in Trust for External Pool Participants 630,476,614$ 505,119,020$ 1,135,595,634$

Condensed Statement of Changes in Net Position

External Internal TotalNet Position January 1, 2019 787,347,930$ 407,531,636$ 1,194,879,566$ Net Change in Investments (156,871,316) 97,587,384 (59,283,932) Net Position December 31, 2019 630,476,614$ 505,119,020$ 1,135,595,634$

FMV Change 453,508$ 1,104,127$ 1,557,635$

Notes to the Financial Statements December 31, 2019 The County is also authorized to levy $2.25 per $1,000 of assessed valuat ion in unincorporated areas for road construct ion and ma intenance. This levy is subject to the same l imitat ions as the levy for general government services. The County ’s road levy for 2019 was $1.17 per $1,000 on assessed valuation of $56.3 bi l l ion for a total road levy of $66 mil l ion. A county may increase its levy f rom $1.80 to $2.48 for general county purposes i f the total levies for both county and road purposes do not exceed $4.05 per $1,000 of assessed value and no other taxing distr ict has had its levy reduced as a result of the increased county levy. The $1.80 per $1,000 l imitat ion on the general purposes levy is exclusive of certain regular property taxes: ( i) a voted levy for emergency medical services, l imited to $0.50 per $1,000 (authorized by RCW 84.52.069); ( i i) a voted levy to f inance affordab le housing for very low income households, l imited to $0.50 per $1,000 (authorized by RCW 84.52.105); and ( i i i) a non-voted levy for conservat ion futures, l imited to $0.0625 per $1,000 (authorized by RCW 84.34.230). The County current ly is levying $0. 03 per $1,000 for conservat ion futures. Aggregate regular property tax levies by the State and al l taxing distr icts except port distr icts and public ut i l i ty distr icts are subject to a rate l imitat ion of 1% of the true and fair value of property (or $10.00 pe r $1,000) by Art ic le VI I, Section 2 of the State Const itut ion and by RCW 84.52.050. Within the 1% limitat ion, aggregate regular property tax levies by al l taxing distr icts except the State, port distr icts and publ ic ut i l i ty distr icts are subject to a rate l imitat ion of $5.90 per $1,000 of assessed value (or 0.59%) by RCW 84.52.043(2). This l imitat ion is exclusive of levies for emergency medical services, affordable housing for very low- income households and acquir ing conservat ion futures. I f aggregate regular property tax levies exceed the 1% or $5.90 per $1,000 l imitat ions, levies requested by “ junior” taxing distr icts within the area affected are reduced or el iminated according to a detai led prior it ized l ist (RCW 84.52.010), in order to bring the aggregate levy into compliance. Junior taxing distr icts are def ined by RCW 84.52.043 as al l taxing distr icts other than the State, count ies, c it ies, towns, road distr icts, port distr icts, and public ut i l i ty distr icts. Property Tax Calendar The County Treasurer acts as an agent to col lect property taxes levied in the county for al l taxing author it ies. The following is an annual t imel ine for tax col lect ions:

Property Tax Calendar

January 1 Taxes are levied and become an enforceable l ien against propert ies.

February 14 Tax bi l ls are mailed.

Apri l 30 First of two equal instal lment payments is due.

May 31 Assessed value of property establ ished for next year’s levy at 100% of market value.

October 31 Second installment is due.

Notes to the Financial Statements December 31, 2019 Property taxes are recorded as a receivable and deferred inf low when levied. Property tax col lect ions are recorded as a reduction of the receivable. Also, upon col lect ion, the related deferred inf low is reclassif ied to revenue, on the modif ied accrual ba sis. For the statement of act ivit ies, property taxes are revenue in the year they are levied. No al lowance for uncol lect ible taxes is establ ished because del inquent taxes are considered ful ly col lect ible. Pr ior year tax levies were recorded using the sa me principle, and delinquent taxes are evaluated annually. Property Tax Levy Procedures In the State of Washington, the county assessor (the “Assessor”) determines the value of al l real and personal property throughout the county that is subject to ad valorem taxation. The Assessor ’s dut ies and methods of determining value are prescribed and control led by statute and by detai led regulat ions promulgated by the Department of Revenue of the State of Washington. For tax purposes, the assessed value of pro perty is set at 100% of its actual value. Al l property is subject to revaluation every year. The Assessor l ists the property on a tax rol l at i ts current assessed value and the tax rol l is f i led in the Assessor ’s off ice. The Assessor ’s determinat ions are subject to revis ion by the County Board of Equal izat ion and, for certain property, subject to further revis ion by the State Board of Equal izat ion. Af ter all administrat ive procedures are completed, the County receives the Assessor ’s f inal cert i f icate of assessed value of property with in the county. Property taxes are levied in specif ic amounts, and the rates for all taxes levied for all taxing distr icts in the county ( including the County) are determined, calculated, and f ixed by the Assessor based upon the assessed valuat ion of the property within the various taxing distr icts. The Assessor extends the taxes to be levied within each taxing distr ict upon a tax rol l, which contains the total amount of taxes to be levied and collected. The tax roll is del ivered to the County Treasurer by January 15 of each year, and an abstract of the tax rol l showing the total amount of taxes col lect ible in each of the taxing distr icts for the year, is del ivered to the County Auditor at the same t ime. The Treasurer creat es a tax account for each taxpayer and is responsible for the col lect ion of taxes due on each account. Al l such taxes are due and payable on the 30th of Apri l of each year, but i f the amount due f rom a taxpayer exceeds $50, one -half may be paid then, and the balance no later than October 31 of that year. The method of giving notice of payment of taxes due, the Treasurer ’s account ing for the money col lected, the divis ion of the taxes among the var ious taxing distr icts, not ices of del inquency, and col lect ion procedures are al l covered by detai led statutes. Tax Liens and Foreclosure Property taxes, and al l charges and expenses relat ing to the taxes, const itute a statutory l ien on the property taxed. The l ien attaches to the property, f rom and including Janu ary 1 in the year in which the tax is levied, and is discharged only when the taxes are paid. By law, the Treasurer may commence foreclosure of a tax l ien on real property af ter three years have passed since the f irst delinquency. The County Treasurer ma y commence foreclosure proceedings in Super ior Court upon al l tax l iens embraced by the cert i f icate of delinquency. The County Treasurer must immediately sel l the property to the highest and best bidder for cash upon entry of the order of foreclosure. Th e minimum bid

Notes to the Financial Statements December 31, 2019 al lowable is the total amount of the taxes, interest, penalty, and costs due. To the extent property is str icken to the County at a foreclosure sale, that property is exempt f rom taxation for so long as the County holds it . A property owner may redeem their property at any t ime prior to the foreclosure sale by paying the County Treasurer the amount of the cert if icate of del inquency and al l taxes, interest, and costs accruing af ter the cert if icate of del inquency is issued. 3.C Other Receivables Other receivables consist pr imari ly of customer accounts receivable. These are reported net of allowance for uncol lect ible accounts as follows:

3.D Capital Assets The following is a summary of changes in capital assets for the County pr imary government:


Business-type Activities

Total Primary Government

Other Receivables 64,915,350$ 8,193,741$ 73,109,091$ Allowance for Uncollectibles (50,735,275) (655,821) (51,391,096) Other Receivables, Net 14,180,075$ 7,537,920$ 21,717,995$

Other ReceivablesAs of December 31, 2019


Beginning EndingBalance Increases Decreases Balance

Governmental Activities:Capital assets not depreciated:

Land 290,090,976$ 8,968,832$ (102,715)$ 298,957,093$ Construction in progress 69,408,917 52,748,698 (19,235,941) 102,921,674

Total capital assets not depreciated 359,499,893 61,717,530 (19,338,656) 401,878,767

Other capital assets:Buildings 280,742,104 3,394,389 (34,973) 284,101,520 Other improvements 117,236,249 1,804,755 - 119,041,004 Equipment 102,314,614 10,143,372 (4,636,682) 107,821,304 Infrastructure 1,247,900,235 102,498,534 (4,457,135) 1,345,941,634 Intangible assets 14,611,385 272,103 (1,222,926) 13,660,562

Total other capital assets at historical cost 1,762,804,587 118,113,153 (10,351,716) 1,870,566,024

Less accumulated depreciation for:Buildings (135,340,637) (6,998,600) 27,007 (142,312,230) Other improvements (59,907,185) (5,339,135) - (65,246,320) Equipment (58,760,829) (5,784,956) 4,185,492 (60,360,293) Infrastructure (576,846,573) (42,913,429) 1,661,076 (618,098,926) Intangible assets (3,975,335) (1,901,393) 421,306 (5,455,422)

Total accumulated depreciation (834,830,559) (62,937,513) 6,294,881 (891,473,191) Other capital assets, net 927,974,028 55,175,640 (4,056,835) 979,092,833

Governmental activities capital assets, net 1,287,473,921$ 116,893,170$ (23,395,491)$ 1,380,971,600$

Business-type ActivitiesCapital assets not depreciated:

Land 45,145,078$ 542,435$ -$ 45,687,513$ Construction in progress 5,025,587 1,211,499 (1,395,862) 4,841,224

Total capital assets not depreciated 50,170,665 1,753,934 (1,395,862) 50,528,737

Other capital assets:Buildings 151,471,955 1,315,135 (601,775) 152,185,315 Other improvements 86,889,882 5,878 - 86,895,760 Equipment 19,034,639 429,268 (1,455,461) 18,008,446 Infrastructure 238,598,239 6,646,578 - 245,244,817 Intangible assets 3,388,162 - - 3,388,162

Total other capital assets at historical cost 499,382,877 8,396,859 (2,057,236) 505,722,500

Less accumulated depreciation for:Buildings (59,543,417) (3,570,445) 289,743 (62,824,119) Other improvements (51,093,120) (3,081,082) - (54,174,202) Equipment (8,133,863) (1,196,187) 1,452,960 (7,877,090) Infrastructure (107,965,556) (6,403,133) - (114,368,689) Intangible assets (2,938,856) (114,641) - (3,053,497)

Total accumulated depreciation (229,674,812) (14,365,488) 1,742,703 (242,297,597) Other capital assets, net 269,708,065 (5,968,629) (314,533) 263,424,903

Business-type activities capital assets, net 319,878,730$ (4,214,695)$ (1,710,395)$ 313,953,640$

Changes to assets and accumulated depreciation may appear skewed due to reclassification of assets between categories.

CAPITAL ASSETSFor the year ended December 31, 2019


Depreciation Amounts posted in the accumulated depreciat ion account include ret irement of assets sold or transferred and current period depreciat ion expense. Amounts of depreciat ion expense charged to capital assets by funct ion are as follows:

3.E Short-Term Debt Short-term activit ies for the year ended December 31, 2019 was as follows:

3.F Long-Term Debt The County’s long-term debt consists pr imarily of general obl igat ion bonds, Washington State Publ ic Works Trust Fund (PWTF) loans, and Community Economic Revital izat ion Board (CERB) loans. General obl igat ion bonds are issued for general governmen tal and business-type act ivi t ies. General government long -term debt is repaid f rom the applicable resources using the debt service fund, with the exception of PWTF loans are

Governmental ActivitiesGeneral Government 9,204,527$ Judicial 2,751,160 Public Safety 1,836,523 Physical Environment 38,539 Transportation 44,585,826 Health and Human Services 20,176 Economic Environment 19,237 Culture and Recreation 4,481,525 Total Governmental Activities 62,937,513

Business-type ActivitiesAirport 8,270,231 Solid Waste Management 3,704,375 Surface Water Management 2,390,882 Total Business-type Activities 14,365,488

Total Primary Government 77,303,001$

Depreciation ExpenseFor the Year Ended December 31, 2019

Debt Purpose Beginning

Balance Issued Redeemed Ending Balance


2019 Bond Anticipation NoteEmergency Public Radio Replacement -$ 35,100,000$ 35,100,000$ -$

Total Primary Government -$ 35,100,000$ 35,100,000$ -$

Notes to the Financial Statements December 31, 2019 paid direct ly f rom the County Road. Business-type act ivit ies pay their own long -term debt. In 2019, Snohomish County issued $48 mil l ion of general obl igat ion bonds to f inance an addit ion to the County Courthouse , repay the 2019 BAN, and f inance a new property tax sof tware system. Refunded Debt In 2019, Snohomish County issued $4.9 mil l ion of general obligat ion bonds to provide resources to an escrow agent to refund $5.6 mil l ion of the 2009B bond issue . The aggregate difference in debt service between the refunding debt and the refunded debt resulted in a decrease of $700 thousand. The net carrying value of the old debt exceeded the refunding debt by $188 thousand. This amount wi l l be amort ized over the l i fe of the new bonds. The new bonds have the same l i fe as the old bonds. The refunding resulted in an economic gain of $765 thousand. With the 2019 refunding, the County defeased the general obl igat ion bonds by placing the new bonds net proceeds of $6.3 mil l ion in an irrevocable trust to provide for al l future debt service payments on the old bonds. Payments of principal and interest on these bonds are the responsibi l i ty of the escrow agent. Accordingly, the trust account assets and the l iabi l i ty for the defeased bonds are not included in the County ’s f inancial statements. The following table summarizes the long -term debt issued and outstanding as of December 31, 2019:

2019 Schedule of Long Term Debt

Purpose Original Issue

Amount *

Beginning Outstanding

Balance

2019 Redemptions (Additions)

Ending Outstanding

Balance Scheduled Payoff Date

2020 Redemption

Interest Rate


1997 Bond Issue Memorial Stadium Series B 1,134,775$ 1,134,775$ 146,419$ 988,356$ 2026 145,589$ 4.5-6.0%

2009B Bond Issue Animal Shelter 3,376,502 2,094,346 2,094,346 - 2028 - 2.0-5.0%Facilities HVAC 2,144,566 896,335 896,335 - 2023 - 2.0-5.0%

Total 2009B Issue 5,521,068 2,990,681 2,990,681 - -

2010A Bond Issue 800 MHZ Radio Project Phase 2 - Rfndg 8,708,214 2,737,929 883,138 1,854,791 2021 909,427 3.0-4.3%Parks - Rfndg 4,102,635 1,289,902 416,060 873,842 2021 428,451 3.0-4.3%County Campus Redevelopment - Rfndg 98,799,570 78,174,971 3,173,799 75,001,172 2035 3,267,409 3.0-4.3%

Total 2010A Issue 111,610,419 82,202,802 4,472,997 77,729,805 4,605,287

2010B Bond Issue Roads 3,932,708 2,559,716 185,278 2,374,438 2030 189,315 1.0-5.9%Fairgrounds 7,058,844 5,300,596 231,872 5,068,724 2040 241,139 1.0-5.9%Emergency Operations Center 2,218,448 1,644,686 77,850 1,566,836 2035 79,546 1.0-5.9%

Total 2010B Issue 13,210,000 9,504,998 495,000 9,009,998 510,000

2011B Bond Issue Gun Range - Rfndg 475,000 195,000 45,000 150,000 2022 50,000 2.0-5.0%County Campus Redevelopment - Rfndg 37,875,000 36,715,000 165,000 36,550,000 2036 165,000 2.0-5.0%

Total 2011B Issue 38,350,000 36,910,000 210,000 36,700,000 215,000

2011C Bond Issue Cathcart - Refunding 23,725,000 13,610,000 1,870,000 11,740,000 2025 1,930,000 0.5-3.6%

2012A Bond Issue County Campus Redevelopment - Rfndg 2,495,000 1,740,000 170,000 1,570,000 2027 170,000 2.0-4.0%Park Imprvmnts/Willis Tucker Park - Rfndg 1,160,000 625,000 115,000 510,000 2023 120,000 2.0-4.0%Facilities Projects 12 yr 1,810,000 1,005,000 155,000 850,000 2024 160,000 2.0-4.0%Facilities Projects 20 yr 3,610,000 2,795,000 155,000 2,640,000 2032 160,000 2.0-4.0%

Total 2012A Issue 9,075,000 6,165,000 595,000 5,570,000 610,000

Notes to the Financial Statements December 31, 2019 2019 Schedule of Long Term Debt


Amount *


Balance


Ending Outstanding


2020 Redemption

Interest Rate


2013 Bond Issue Justice Center 73,730,000 73,710,000 180,000 73,530,000 2043 345,000 3.0-5.0%Sheriff Precinct 2,765,000 2,385,000 85,000 2,300,000 2037 90,000 3.0-5.0%Conservation Futures 22,470,000 21,355,000 1,160,000 20,195,000 2032 1,205,000 3.0-5.0%Roads 4,710,000 3,780,000 205,000 3,575,000 2032 215,000 3.0-5.0%Parks 3,285,000 2,115,000 255,000 1,860,000 2032 270,000 3.0-5.0%

Total 2013 Issue 106,960,000 103,345,000 1,885,000 101,460,000 2,125,000

2015 Bond Issue Memorial Stadium - Rfndg 427,671 417,476 3,461 414,015 2027 3,634 3.0-5.0%Fairgrounds Property - Rfndg 339,941 281,312 10,414 270,898 2030 19,576 3.0-5.0%Sheriff Storage/Gun Range - Rfndg 261,493 216,394 8,011 208,383 2030 15,059 3.0-5.0%County New Admin Building - Rfndg 1,961,150 1,622,915 60,082 1,562,833 2030 112,937 3.0-5.0%Existing Admin Building Rmdl - Rfndg 2,087,055 1,727,555 64,938 1,662,617 2030 120,795 3.0-5.0%Mission Building - Rfndg 326,866 270,492 10,014 260,478 2030 18,823 3.0-5.0%Other Campus Remodel Projects - Rfndg 653,733 540,985 20,028 520,957 2030 37,647 3.0-5.0%County Campus Redvlpmnt - Jail - Rfndg 1,242,091 1,027,870 38,053 989,817 2030 71,529 3.0-5.0%Various County Rmdl/Bldg Projects - Rfndg 367,861 187,013 187,013 - 2019 - 3.0-5.0%Snohomish County Radio Project - Rfndg 1,414,936 326,983 326,983 - 2019 - 3.0-5.0%City of Edmonds Radio Project - Rfndg 472,051 103,257 103,257 - 2019 - 3.0-5.0%City of Lynnwood Radio Project - Rfndg 571,631 131,588 131,588 - 2019 - 3.0-5.0%City of Marysville Radio Project - Rfndg 381,842 83,524 83,524 - 2019 - 3.0-5.0%City of Mill Creek Radio Project - Rfndg 144,093 31,518 31,518 - 2019 - 3.0-5.0%City of Mtlk Terrace Radio Project - Rfndg 112,319 49,043 49,043 - 2019 - 3.0-5.0%City of Woodway Radio Project - Rfndg 19,354 4,233 4,233 - 2019 - 3.0-5.0%Fire District No. 1 Radio Project - Rfndg 115,750 56,343 56,343 - 2019 - 3.0-5.0%Snocom 800 MHz/Edmonds - Rfndg 129,189 28,258 28,258 - 2019 - 3.0-5.0%Snocom 800 MHz/Mtlk Terrace - Rfndg 68,865 15,064 15,064 - 2019 - 3.0-5.0%Snocom 800 MHz/Other - Rfndg 288,803 63,173 63,173 - 2019 - 3.0-5.0%PW Cathcart Roads - Rfndg 2,569,971 1,999,450 209,220 1,790,230 2026 219,808 3.0-5.0%PW Cathcart Fleet - Rfndg 3,627,218 2,821,992 295,290 2,526,702 2026 310,233 3.0-5.0%Sheriff Gun Range/Impound Lot - Rfndg 1,100,857 856,472 89,620 766,852 2026 94,155 3.0-5.0%Roads - Rfndg 13,481,099 10,515,146 1,098,947 9,416,199 2026 1,157,961 3.0-5.0%

Total 2015 Issue 32,165,839 23,378,056 2,988,075 20,389,981 2,182,157

2018A Bond Issue McKinstry Project 3,170,000 3,170,000 150,000 3,020,000 2033 155,000 3.4-5.0%

2019 Bond Issue Courthouse Addition 12,445,000 - (12,445,000) 12,445,000 2039 450,000 3.0-5.0%SERS Bond Anticipation Note - Rfndg 30,940,000 - (30,940,000) 30,940,000 2034 1,390,000 3.0-5.0%Property Tax Collection System 4,610,000 - (4,610,000) 4,610,000 2027 475,000 3.0-5.0%Facilities HVAC - Rfndg 672,773 - (672,773) 672,773 2023 154,861 3.0-5.0%Animal Shelter - Rfndg 1,632,947 - (1,632,947) 1,632,947 2028 136,309 3.0-5.0%

Total 2019 Issue 50,300,720 - (50,300,720) 50,300,720 2,606,170

Total G.O. Bonds - Governmental Activities 395,222,821 282,411,312 (34,497,548) 316,908,860 15,084,203

Public Works Trust Fund Loans Granite Falls Alternate Route 7,000,000 3,684,211 368,421 3,315,790 2028 368,421 1.0%

Other Loans Airport CERB Loan 468,214 405,786 31,214 374,572 2031 31,214 0.0%

Total Debt - Governmental Activities 402,691,035$ 286,501,309$ (34,097,913)$ 320,599,222$ 15,483,838$

Business-Type Activities

2009A Bond Issue Surface Water - 2001 Rfndg 11,075,000$ 3,050,000$ 965,000$ 2,085,000$ 2021 1,015,000$ 3.0-5.0%Surface Water - 2006 Rfndg 2,745,000 765,000 245,000 520,000 2021 255,000 3.0-5.0%

Total 2009A Issue 13,820,000 3,815,000 1,210,000 2,605,000 1,270,000

2009B Bond Issue Solid Waste 4,204,079 1,757,119 1,757,119 - 2023 - 2.0-5.0%Airport - Private 2,331,885 1,407,429 1,407,429 - 2028 - 2.0-5.0%Airport - Public 297,968 184,773 184,773 - 2028 - 2.0-5.0%

Total 2009B Issue 6,833,932 3,349,321 3,349,321 - -

2010A Bond Issue Airport Debt Service 20 Year - Rfndg 8,003,197 6,332,201 257,003 6,075,198 2035 264,713 3.0-4.3%

2010C Bond Issue Airport 2009 BAN - Rfndg 4,950,000 3,810,000 160,000 3,650,000 2035 170,000 2.0-4.4%


2019 Schedule of Long Term Debt


Amount *


Balance


Ending Outstanding


2020 Redemption

Interest Rate

Business-Type Activities

2011B Bond Issue Paine Field Various - Rfndg 1,775,000 1,425,000 55,000 1,370,000 2036 60,000 2.0-5.0%Solid Waste Facility Construction - Rfndg 12,175,000 4,990,000 1,175,000 3,815,000 2022 1,225,000 2.0-5.0%Paine Field Museum - Rfndg 20,555,000 1,700,000 655,000 1,045,000 2021 685,000 4.0%

Total 2011B Issue 34,505,000 8,115,000 1,885,000 6,230,000 1,970,000

2012B Bond Issue Airport 30,815,000 23,075,000 1,395,000 21,680,000 2032 1,420,000 2.0-3.6%Solid Waste 7,860,000 6,420,000 260,000 6,160,000 2037 265,000 2.0-3.6%

Total 2012B Issue 38,675,000 29,495,000 1,655,000 27,840,000 1,685,000

2015 Bond Issue Surface Water Projects 55,266 27,664 9,198 18,466 2021 9,233 3.0-5.0%Various Airport Projects 5,069,736 3,944,278 412,725 3,531,553 2026 433,610 3.0-5.0%

Total 2015 Issue 5,125,002 3,971,942 421,923 3,550,019 442,843

2018B Bond Issue Paine Field Museum - Rfndg 15,425,000 15,425,000 35,000 15,390,000 2036 30,000 2.8-4.3%

2019 Bond Issue Solid Waste - Rfndg 1,318,865 - (1,318,865) 1,318,865 2023 303,580 3.0-5.0%Airport - Private - Rfndg 1,100,886 - (1,100,886) 1,100,886 2028 92,456 3.0-5.0%Airport - Public - Rfndg 144,529 - (144,529) 144,529 2028 12,794 3.0-5.0%

Total 2019 Issue 2,564,280 - (2,564,280) 2,564,280 408,830

Total G.O. Bonds - Business-Type Activities 129,901,411 74,313,464 6,408,967 67,904,497 6,241,386

Public Works Trust Fund Loans Recycling & Transfer Station Construction 10,000,000 2,117,648 529,412 1,588,236 2022 529,412 0.5%

Recycling & Transfer Station Construction 1,000,000 157,893 52,631 105,262 2021 52,631 0.5%Recycling & Transfer Station Reconstruction 10,000,000 1,124,560 562,281 562,279 2020 562,281 1.0%

Total PWTF Loans 21,000,000 3,400,101 1,144,324 2,255,777 1,144,324

Other Loans Airport CERB Loan 1,700,000 1,335,714 121,429 1,214,285 2029 121,429 2.0%Airport CERB Loan 496,257 496,257 - 496,257 2034 - 2.0%

Total Other Loans 2,196,257 1,831,971 121,429 1,710,542 121,429

Total Debt - Business-Type Activities 153,097,668$ 79,545,536$ 7,674,720$ 71,870,816$ 7,507,139$

* Original issue amounts for PWTFL and CERB loans are adjusted to reflect additional loan draws

Notes to the Financial Statements December 31, 2019 The following table summarizes the changes in long -term debt during 2019:

Debt service requirements at December 31, 2019 are as fol lows:

Beginning Balance Additions Reductions

Ending Balance

Current Portion

Non-Current Portion

Governmental Activities:General Obligation Bonds 282,411,312$ 50,300,720$ 15,803,172$ 316,908,860$ 15,084,203$ 301,824,657$ Loans Payable 4,089,997 - 399,635 3,690,362 399,635 3,290,727 Total Bonds, Notes, and Loans Payable 286,501,309 50,300,720 16,202,807 320,599,222 15,483,838 305,115,384 Net Premiums/Discounts 14,618,722 7,556,461 1,176,274 20,998,909 1,542,807 19,456,102 Total Governmental Activities Debt 301,120,031$ 57,857,181$ 17,379,081$ 341,598,131$ 17,026,645$ 324,571,486$

Business-type Activities:G.O. Bonds/Solid Waste 13,167,119$ 1,318,865$ 3,192,120$ 11,293,864$ 1,793,580$ 9,500,284$ G.O. Bonds/Airport 57,303,681 1,245,415 4,561,929 53,987,167 3,168,573 50,818,594 G.O. Bonds/Surface Water 3,842,664 - 1,219,198 2,623,466 1,279,233 1,344,233 Loans Payable/Solid Waste 3,400,101 - 1,144,324 2,255,777 1,144,324 1,111,453 Loans Payable/Airport 1,831,971 - 121,429 1,710,542 121,429 1,589,113 Total Bonds, Notes, and Loans Payable 79,545,536 2,564,280 10,239,000 71,870,816 7,507,139 64,363,677 Net Premiums/Discounts 1,905,163 358,095 416,407 1,846,851 365,147 1,481,704 Total Business-type Activities Debt 81,450,699$ 2,922,375$ 10,655,407$ 73,717,667$ 7,872,286$ 65,845,381$

Total Primary Government: 382,570,730$ 60,779,556$ 28,034,488$ 415,315,798$ 24,898,931$ 390,416,867$

Changes in Long-term DebtFor the Year Ended December 31, 2019

Principal Interest Principal Interest2020 15,084,203$ 13,783,902$ 399,635$ 16,579$ 2021 15,953,575 13,087,932 399,635 14,737 2022 15,351,067 12,404,053 399,635 12,895 2023 15,919,118 11,751,677 399,635 11,053 2024 16,506,718 11,056,684 399,635 9,211 2025-2029 85,563,156 42,310,972 1,629,756 18,420 2030-2034 87,001,023 23,168,647 62,431 - 2035-2039 41,000,000 8,938,010 - - 2040-2044 24,530,000 2,526,389 - - Total 316,908,860$ 139,028,266$ 3,690,362$ 82,895$

General Obligation Other DebtGovernmental Activities

Debt Service RequirementsFor the Year Ended December 31, 2019


Debt Limitation Voted Debt - The County may issue general obl igat ion bonds for general county purposes in an amount not to exceed 2.5% of the assessed value of al l taxable property. Unl imited tax general obl igat ion bonds require an approving vote, and any elect ion to validate general obl igat ion bonds must have a voter turnout of at least 40 % of those who voted in the last State general elect ion. Of those voting, 60 % must be in the af f irmative. The principal and interest on voted general obl igat ion bonds is payable f rom property taxes in excess of regular property taxes, without l imitat ion as to rate or amount. Non-voted Debt - The County Counci l may, by ordinance, author ize the issu ance of l imited tax general obl igat ion bonds in an amount up to 1.5 % of the assessed valuation within the County without author izat ion of the voters. No combination of l imited and unl imited tax bonds may exceed 2.5% of the assessed valuation. The princip al and interest on non-voted debt is payable f rom regular property tax levies or f rom other available revenues of the County. The computat ion of the County ’s general obl igat ion debt capacity is displayed in the stat ist ical sect ion of this report. Arbitrage The County issues tax-exempt bonds that are subject to IRS arbitrage regulat ions. The County contracts with a consultant to analyze arbitrage requirements. For the year ended December 31, 2019, there is no arbitrage l iabil i ty. 3.G Compensated Absences The compensated absences l iabi l i ty attr ibutable to the governmental act ivit ies wi l l be l iquidated pr imari ly by the general fund. Each fund pays its proport ionate share based on employees’ assignments.

Principal Interest Principal Interest Principal Interest Principal Interest2020 1,793,580$ 433,448$ 3,168,573$ 1,985,132$ 1,279,233$ 131,173$ 1,265,753$ 102,559$ 2021 1,862,057 360,672 3,269,729 1,880,450 1,344,233 67,212 738,919 37,340 2022 1,938,160 287,694 3,382,258 1,769,628 - - 686,287 31,292 2023 640,068 198,486 3,486,655 1,656,158 - - 156,876 25,507 2024 290,000 173,607 3,628,216 1,535,619 - - 156,876 22,370 2025-2029 1,600,000 735,350 18,137,758 5,668,725 - - 784,377 64,786 2030-2034 1,875,000 449,245 15,353,977 2,372,005 - - 177,231 10,633 2035-2039 1,295,000 97,125 3,560,000 208,754 - - - - Total 11,293,865$ 2,735,627$ 53,987,166$ 17,076,471$ 2,623,466$ 198,385$ 3,966,319$ 294,487$

Debt Service RequirementsFor the Year Ended December 31, 2019

Other DebtSolid Waste Airport Surface WaterBusiness-Type Activities


3.H Accrued Liabilit ies The County’s accrued l iabi l i t ies include the following:

3.I Interfund Balances and Transfers Transfers represent subsidies and contr ibut ions provided to operat ing funds and capital project funds with no corresponding debt or promise to repay. Most recurr ing transfers are for the purpose of funding debt service payments. Transfers for general operat ing purposes and transfers of assets are also done on a routine basis. The fol lowing table summarizes the transfers made between funds and act ivit ies:

Beginning Ending Amounts DueBalance Earned Used Balance Within One Year

Governmental Activities 20,117,082$ 27,732,887$ (26,784,375)$ 21,065,594$ 210,656$

Business-type ActivitiesSolid Waste 767,269$ 1,226,443$ (1,142,881)$ 850,831$ 8,508$ Airport 433,121 750,166 (563,628) 619,659 6,197 Surface Water 589,277 1,016,544 (1,009,406) 596,415 5,964 Subtotal Business-type 1,789,667 2,993,153 (2,715,915) 2,066,905 20,669 Total Primary Government 21,906,749$ 30,726,040$ (29,500,290)$ 23,132,499$ 231,325$

Compensated AbsencesFor the Year Ended December 31, 2019

Governmental Business-type Total PrimaryActivities Activities Government

Retainage Payable 1,438,819$ 50,981$ 1,489,800$ Interest Payable 3,864,932 295,850 4,160,782 Wages Payable 5,638,976 575,603 6,214,579 Taxes Payable 645,631 833,724 1,479,355 Customer Deposits 2,181,839 680,355 2,862,194 Pollution Remediation 2,404,938 - 2,404,938 Other 25,748 - 25,748 Total 16,200,883$ 2,436,513$ 18,637,396$

Accrued LiabilitiesAs of December 31, 2019


Disbursing Funds


General Fund

County Road Fund

Human Services Fund

Capital Projects Fund

Other Governmental

Funds

Total Governmental

Funds Airport

Fund Surface

Water Fund

Subtotal Business-type

Activities Internal

Service Funds

Full Accrual Activity*

Total Fund Statements - Transfers Out

Governmental Funds General Fund -$ 63,570$ 1,837,810$ 2,000,000$ 3,644,356$ 7,545,736$ -$ -$ - 291,251$ -$ 7,836,987$ County Road Fund 4,553,823 - 112,000 - 2,805,063 7,470,886 - 547,945 547,945 - - 8,018,831 Human Services Fund - - - 2,704,688 98,599 2,803,287 - - - - - 2,803,287 Capital Projects Fund - - - - 220,000 220,000 - - - - - 220,000 Other Governmental Funds 656,449 3,301,269 900,000 - 25,585,379 30,443,097 - 2,106,242 2,106,242 - - 32,549,339

Total Governmental Funds 5,210,272 3,364,839 2,849,810 4,704,688 32,353,397 48,483,006 - 2,654,187 2,654,187 291,251 - 51,428,444

Proprietary FundsBusiness-type Activities

Solid Waste Fund - - - - - - - - - 989,640 - 989,640 Airport Fund - - - - - - - - - - - - Surface Water Fund 207,220 - - - - 207,220 - - - - 207,220

Subtotal Business-type Activities 207,220 - - - - 207,220 - - - 989,640 - 1,196,860 Governmental Activities

Internal Service Funds - - - - 3,219,503 3,219,503 - - - 9,484 - 3,228,987

Full Accrual Activity* - - - - - - - - - 199,649 - 199,649

Total Fund Statements - Transfers In 5,417,492$ 3,364,839$ 2,849,810$ 4,704,688$ 35,572,900$ 51,909,729$ -$ 2,654,187$ 2,654,187$ 1,490,024$ -$ 56,053,940$


Total transfers in-governmental funds 51,909,729$ Less total transfers out-governmental funds (51,428,444) Total transfers in-internal service funds 1,490,024 Less total transfers out-internal service funds (3,228,987) Full Accrual Activity* (199,649) Net transfers out to business-type activities (1,457,327)$

Business-type ActivitiesTotal transfers in 2,654,187$ Less total transfers out (1,196,860) Net transfers in from governmental activities 1,457,327$

*Due to the different basis of accounting and measurement focus between the governmental fund statements and the entity-wide statements, not all transfer activity, such as transfers of assets, are reflected in the governmental fund statements.

Total Transfers on Statement of Activities

Schedule of TransfersFor the Year Ended December 31, 2019

Receiving FundsGovernmental Funds Proprietary Funds

Business-type Activities

Notes to the Financial Statements December 31, 2019 3.J Governmental Fund Balance The County reported $201.1 mil l ion in restr icted fund balance in the governmental funds. Restr icted fund balance/net posit ion are subject to external restr ict ions such as those imposed by state and federal law or by contractual agreements with third part ies. Committed fund balance is committed for a specif ic purpose pursuant to constraints imposed by a formal act ion such as a County ordinance adopted by the County ’s highest level of decision-making authority, the County Counci l with approval of the County Execut ive. Similar formal act ion is required to create, modify, or rescind an ordinance. Assigned fund balance are resources intended to be used for a specif ic purpose. Per pol icy, assignments are expressed by the governing body or an off icial authorized by the governing body. No formal act ion is required to real locate assigned fund balance. Unless otherwise directed by the County Council, County Execut ive, or Director of Finance and committed to writ ing, resources shal l be ut i l ized in the following order: restr icted, committed, assigned, and unassigned. The governmental fund balance is summarized below:

General Fund

County Road Fund

Human Services

Capital Projects

Fund

Other Governmental

Funds TotalRestricted Purpose:Animal Benefit -$ -$ -$ -$ 8,235$ 8,235$ Artwork - - - - 207,385 207,385 Blanche Miller - - - - 515,778 515,778 Capital Purposes - - - 34,649,827 19,927,306 54,577,133 Court Purposes - - - - 1,862,727 1,862,727 Data Processing Systems - - - - 5,379,698 5,379,698 Emergency Svcs Comm System - - - - 39,362,663 39,362,663 Facilitate Victims/Witnesses - - - - 537,228 537,228 Health & Human Services - - 27,304,148 - - 27,304,148 Historical Preservation - - - - 475,161 475,161 Inmate Benefit - - - - 275,897 275,897 Investigation/Prosecution of Antiprofiteering - - - - 79,641 79,641 Law Enforcement - - - - 473,482 473,482 Law Library - - - - 33,475 33,475 Parks - - - - 33,918,478 33,918,478 Program Administration/Enforcement - - - - 1,623,067 1,623,067 Prosecuting Attorney - - - - 236,914 236,914 Refunds - - - - 311,880 311,880 Roads - 9,703,134 - - 15,948,671 25,651,805 Tourism - - - - 7,325,829 7,325,829 Treasurer - - - - 956,431 956,431 Water Quality Control - - - - 913 913 Total Restricted Fund Balance - 9,703,134 27,304,148 34,649,827 129,460,859 201,117,968


3.K Asset Retirement Obligations (AROs) Snohomish County ’s Asset Retirement Obligat ions include legal ly enforceable l iabi l i t ies associated with the ret irement of a tangible capital asset. The ARO l iabi l i ty is offset with a deferred outf low of resources, which is amort ized over the asset ’s useful l i fe. There are currently no assets restr icted for the use of payment related to the ARO l iabi l i t ies. The County has identif ied the following AROs:

The County maintains an inventory of wel ls that have decommissioning requirements per the Department of Ecology. There are three types of wel ls with their related regulat ions including resource monitor ing wel ls (WAC 173 -160-460), Underground Inject ion Control (UIC) wells (WAC 173-218-120), and water wel ls (WAC 173-160-381, WAC 173-162 and RCW Chapter 18.104). The resource monitor ing and water wel ls are indef inite l ived assets and the County has no current plans to decommission these wells. Each UIC wells has an est imated 50 year useful l i fe. Decommissioning of the individual wel ls is est imated to occur between 2024 and 2053. Estimates for the decommissioning of wel ls were based on the experience of County staff using an average well depth of 20 feet to provide an average cost per decommissioning. These est imates also presumed individual abandonments, reasonable accessibi l i ty to the well and the existence of a wel l log for each well. The County believes this to be a reasonable est imate in total and recognizes that the decommissioning of individual wel ls may vary f rom its est imate.

General Fund

County Road Fund

Human Services

Capital Projects

Fund

Other Governmental

Funds TotalCommitted Purpose:Animal Benefit - - - - 92 92 Capital Purposes - - - 2,363,810 11,290,019 13,653,829 Court Purposes - - - - 198,372 198,372 Data Processing Systems - - - - 5,023,514 5,023,514 Debt Service - - - - 523,863 523,863 Emergency Svcs Comm System - - - - 833,258 833,258 Facilitate Victims/Witnesses - - - - 17,265 17,265 Grants - - - - 967,056 967,056 Health & Human Services - - 2,695,417 - - 2,695,417 Investigation/Prosecution of Antiprofiteering - - - - 3,690 3,690 Law Enforcement - - - - 396,228 396,228 Parks - - - - 258,824 258,824 Program Administration/Enforcement - - - - 7,575,764 7,575,764 Prosecuting Attorney - - - - 14,050 14,050 Roads - 19,493,882 - - - 19,493,882 Stabilization 2,777,106 - - - - 2,777,106 Tourism - - - - 341,571 341,571 Treasurer - - - - 103,864 103,864 Water Quality/Control - - - - 2,357 2,357 Total Committed Fund Balance 2,777,106 19,493,882 2,695,417 2,363,810 27,549,787 54,880,002

Assigned For:General Government 5,906,158 - - - 5,906,158 Total Assigned Fund Balance 5,906,158 - - - - 5,906,158

Unassigned 40,980,755 - - - - 40,980,755

Total Fund Balance 49,664,019$ 29,197,016$ 29,999,565$ 37,013,637$ 157,010,646$ 302,884,883$

Notes to the Financial Statements December 31, 2019 The County possesses three pi ts (Darr ington, Kidling, and Engebretson) along with Traf ton Quarry. Reclamation is required at the end of l i fe by the Department of Natural Resources under the Surface Mining Act (RCW 78.44). At this t ime the useful l i fe cannot be est imated and the County has no current plans to decommission these sites. Prior reclamat ion act ivit ies were used to est imate the total ARO l iabi l i ty for the four propert ies. There are septic systems maintained by and located throughout the County. The County is required to make abandonment provisions for the septic systems based on WAC 246 -272A-300. The systems are expected to remain in service through various periods ranging f rom 2022 through 2051. The County appl ied historical experience in abandoning sept ic systems to est imate the l iabi l i ty. The County has a swimming pool with a decommissioning standard per WAC 246-260-141 in the event that the pool is no longer in service. The useful l i fe of the pool is projected through 2025, but could be extended with addit ional maintenance to its l iner system. At present the County has no p lans to decommission the pool. The cost to decommission assumes that the buildings and underground infrastructure can be lef t , the pool l iner is holed, lef t in place, and f i l led with compacted materials. The County obtained a quote for the est imated volume of compacted materials f rom a local provider and appl ied a f ixed markup for the labor necessary to complete the job. The County has underground fuel storage tanks with decommissioning requirements governed by the Department of Ecology (WAC 173 -360A-0810). The tanks are expected to remain in service through per iods ranging f rom 2029 through 2035. The removal est imate is based on a local average removal quote obtained from an onl ine source. The est imates presume no addit ional remediat ion or cleanup is req uired. The County meets its assurance obl igat ions for the tanks required under EPA regulat ions or state programs author ized by EPA under 40 CFR Parts 271 and 145 by use of the f inancial test of self -insurance. Lunds Gulch Regional Storm Water Detention Po nd has decommissioning requirements regulated by the Washington State Department of Ecology. The County plans to maintain the facil i ty in perpetuity, and therefore has no est imated useful l i fe. Decommissioning of the detent ion pond is est imated by using i nternal bil l ing rates as it can be performed internal ly by County employees. At this t ime the County is aware of a number of AROs that are not recorded on the f inancial statements. We believe the impact of these items to be immater ial to the presentat ion of its f inancials and wil l continue to monitor and assess for disclosure in future report ing periods. Note 4 Other Notes 4.A Pension Plans and Other Benefit Plans The following table represents the aggregate pension amounts for al l plans subject to the requirements of GASB Statement 68, Accounting and Financial Report ing for Pensions for the year 2019:


State Sponsored Pension Plans Substantial ly al l Snohomish County ’s ful l- t ime and qual ifying part - t ime employees part ic ipate in one of the following s tatewide ret irement systems administered by the Washington State Department of Retirement Systems, under cost -shar ing, mult iple-employer publ ic employee def ined benef it and def ined contr ibut ion ret irement plans. The state Legislature establ ishes, and amends, laws pertaining to the creation and administrat ion of al l public ret irement systems. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a public ly available comprehensive annual f inancial report (CAFR) that includes f inancial statements and required supplementary information for each plan. The DRS CAFR may be obtained by wr it ing to: Department of Retirement Systems Communicat ions Unit P.O. Box 48380 Olympia, WA 98540-8380 Or the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov. Public employees’ Retirement System (PERS) PERS members include elected off icials; state employees; employees of the Supreme, Appeals and Super ior Courts; employees of the legislature; employees of distr ict and municipal courts; employees of local governments; and higher educat ion employees not part ic ipat ing in higher educat ion ret irement programs. PERS is comprised of three separate pension plans for membership purposes. PERS plans 1 and 2 are def ined benef it plans, and PERS plan 3 is a def ined benef it plan with a def ined contr ibut ion component. PERS Plan 1 provides ret irement, disabi l i ty and death benef its. Retirement benef its are determined as two percent of the member ’s average f inal compensat ion (AFC) t imes the member’s years of service. The AFC is the average of the member ’s 24 highest consecutive service months. Members are el igible for ret irement f rom active status at any age with at least 30 years of service, at age 55 with at least 25 years of service, or at age 60 with at least f ive years of service. Members ret ir ing from active status prior to the age of 65 may receive actuar ial ly reduced benef its. Retirement benef its are actuarial ly reduced to ref lect the choice of a survivor benef it . Other benef its include duty and non-duty disabil i ty payments, an optional cost -of- l iving adjustment (COLA), and

Pension liabilities (67,052,909)$ Pension assets 23,846,405 Deferred outflows of resources 20,427,132 Deferred inflows of resources (44,920,704) Pension expense/expenditures 4,356,246

Aggregate Pension Amounts - All Plans

Notes to the Financial Statements December 31, 2019 a one-t ime duty-related death benef it , i f found el igible by the Department of La bor and Industr ies. PERS 1 members were vested af ter the complet ion of f ive years of el igible service. The plan was closed to new entrants on September 30, 1977. Contr ibut ions The PERS Plan 1 member contr ibut ion rate is establ ished by State statute at 6 percent. The employer contr ibut ion rate is developed by the Off ice of the State Actuary and includes an administrat ive expense component that is current ly set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer cont r ibut ion rates. The PERS Plan 1 required contr ibut ion rates (expressed as a percentage of covered payroll) for 2019 were as follows:

* For employees part ic ipat ing in JBM, the contr ibut ion rate was 12.26%.

PERS Plan 2/3 provides ret irement, disabi l i ty and death benef its. Retirement benef its are determined as two percent of the member ’s average f inal compensation (AFC) t imes the member’s years of service for Plan 2 and 1 percent of AFC for Plan 3. The AFC is the average of the member ’s 60 highest -paid consecut ive service months. There is no cap on years of service credit . Members are el igible for ret irement with a full benef it at 65 with at least f ive years of service credit . Retirement before age 65 is considered an early ret irement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years of age or older, are el igible for early ret irement with a benef it that is reduced by a factor that var ies according to age for each year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can ret ire under one of two provisions:

With a benef it that is reduced by three percent for each year before age 65; or With a benef it that has a smaller (or no) reduction (depending on age) that imposes

str icter return-to-work rules. PERS Plan 2/3 members hired on or af ter May 1, 2013 have the opt ion to ret ire early by accept ing a reduction of f ive percent for each year of ret irement before age 65. This option is avai lable only to those who are age 55 or older and have at least 30 years of

PERS Plan 1Actual Contribution Rates Employer Employee*

January - June 2019:PERS Plan 1 7.52% 6.00%PERS Plan 1 UAAL 5.13%Administrative Fee 0.18%

Total 12.83% 6.00%July - December 2019:PERS Plan 1 7.92% 6.00%PERS Plan 1 UAAL 4.76%Administrative Fee 0.18%

Total 12.86% 6.00%

Notes to the Financial Statements December 31, 2019 service credit . PERS Plan 2/3 ret irement benef its are also actuarial ly reduced to ref lect the choice of a survivor benef it . Other PERS Plan 2/3 benef its include duty and non -duty disabil i ty payments, a cost-of- l iving allowance (based on the CPI), capped at three percent annually and a one-t ime duty related death benef it , i f found el igible by the Department of Labor and Industr ies. PERS 2 members are vested af ter complet ing f ive years of el igible service. Plan 3 members are vested in the def ined benef it port ion of their plan af ter ten years of service; or af ter f ive years of service if 12 months of that service are earned af ter age 44. PERS Plan 3 def ined contr ibut ion benef its are totally dependent on em ployee contr ibut ions and investment earnings on those contr ibut ions. PERS Plan 3 members choose their contr ibut ion rate upon joining membership and have a chance to change rates upon changing employers. As establ ished by statute, Plan 3 required def ined contr ibut ion rates are set at a minimum of 5 percent and escalate to 15 percent with a choice of six opt ions. Employers do not contr ibute to the def ined contr ibut ion benef its. PERS Plan 3 members are immediately vested in the def ined contribut ion port ion of their plan. Contr ibut ions The PERS Plan 2/3 employer and employee contr ibut ion rates are developed by the Off ice of the State Actuary to fully fund Plan 2 and the def ined benef it port ion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1 UAAL and an administrat ive expense that is current ly set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contr ibut ion rates and Plan 3 contr ibut ion rates. The PERS Plan 2/3 req uired contr ibut ion rates (expressed as a percentage of covered payrol l) for 2019 were as fol lows:

* For employees part ic ipat ing in JBM, the contr ibut ion rate was 18.53% to 19.75%.

PERS Plan 2/3Actual Contribution Rates Employer 2/3 Employee 2*

January - June 2019:PERS Plan 2/3 7.52% 7.41%PERS Plan 1 UAAL 5.13%Administrative Fee 0.18%Employee PERS Plan 3 Varies

Total 12.83% 7.41%July - December 2019:PERS Plan 2/3 7.92% 7.90%PERS Plan 1 UAAL 4.76%Administrative Fee 0.18%Employee PERS Plan 3 Varies

Total 12.86% 7.90%

Notes to the Financial Statements December 31, 2019 PERS Plan 1 actual employer contr ibut ions for the year were $217 thousand and employee contr ibut ions were $103 thousand for a total county contr ibut ion of $320 thousand. PERS Plan 2/3 and PERS Plan 1 UAAL actual employer contr ibut ions for the year were $21 mil l ion and employee contr ibut ions were $13 mil l ion for a total county contr ibut ion of $34 mil l ion for the year ended December 31, 2019. Public Safety Employees’ Retirement System (PSERS) PSERS Plan 2 was created by the 2004 Legislature and became effect ive July 1, 2006. To be eligible for membership, an employee must work on a ful l t ime basis and:

Have completed a cert if ied criminal just ice training course with authority to arrest,

conduct cr iminal investigat ions, enforce the criminal laws of Washington, and carry a f irearm as part of the job; or

Have primary responsibi l i ty to ensure the custody and secur ity of incarcerated or probat ionary individuals; or

Funct ion as a l imited author ity Washington peace off icer, as def ined in RCW 10.93.020; or

Have pr imary responsibi l i ty to supervise el igible members who meet the above criteria.

PSERS membership includes:

PERS 2 or 3 employees hired by a covered employer before July 1, 2006, who met at least one of the PSERS el igibi l i ty cr i ter ia and elected membership dur ing the period of July 1, 2006 to September 30 2006; and

Employees hired on or af ter July 1, 2006 by a covered employer, that meet at least one of the PSERS el igibil i ty cr iter ia.

PSERS covered employers include:

Certain State of Washington agencies (Department of Correct ions, Department of Natural Resources, Gambling Commission, Liquor and Cannabis Board, Parks and Recreation Commission, and Washington State Patrol),

Washington State Counties, Washington State Cit ies (except for Seatt le, Spokane, and Tacoma), Correct ional entit ies formed by PSERS employers under the Inter local Cooperation

Act. PSERS Plan 2 provides ret irement, disabi l i ty and death benef its. Retirement benef its are determined as two percent of the average f inal compensati on (AFC) for each year of service. The AFC is based on the member ’s 60 consecut ive highest creditable months of service. Benef its are actuar ial ly reduced for each year that the member ’s age is less than 60 (with ten or more service credit years in PSERS) , or less than 65 (with fewer than ten service credit years). There is no cap on years of service credit . Members are el igible for ret irement at the age of 65 with f ive years of service; or at the age of 60 with at least ten years of PSERS service credit ; or at age 53 with 20 years of service. Retirement before age 60 is considered an early ret irement. PSERS members who ret ire prior to the age of 60 receive reduced benef its. If ret irement is at age 53 or older with

Notes to the Financial Statements December 31, 2019 at least 20 years of service, a three percent per year reduction for each year between the age at ret irement and age 60 appl ies. PSERS Plan 2 ret irement benef its are actuarial ly reduced to ref lect the choice of a survivor benef it . Other benef its include duty and non-duty disabil i ty payments , an optional cost -of l iving adjustment (COLA), and a one-t ime duty-related death benef it , i f found el igible by the Department of Labor and Industr ies. PSERS Plan 2 members are vested af ter complet ing f ive years of el igible service. Contr ibut ions The PSERS Plan 2 employer and employee contr ibut ion rates are developed by the Off ice of the State Actuary to ful ly fund Plan 2. The Plan 2 employer rates include components to address the PERS Plan 1 unfunded actuar ial accrued l iabi l i ty and administrat ive expense currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contr ibut ion rates. The PSERS Plan 2 required contr ibut ion rates (expressed as a percentage of current -year covered payrol l) for 2019 were as fol lows:

PSERS Plan 2 and PERS Plan 1 UAAL actual employer contr ibut ions for the year were $2.4 mil l ion and employee contr ibut ions were $1.4 mil l ion for a total county contr ibut ion of $3.8 mil l ion for the year ended December 31, 2019. Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF) LEOFF membership includes all ful l - t ime, ful ly compensated, local law enforcement commissioned off icers, f iref ighters, and as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate def ined benef it plans. LEOFF Plan 1 provides ret irement, disabi l i ty and death benef its. Retirement benef its are determined per year of service calculated as a percent of f inal average salary (FAS) as follows:

20+ years of service – 2.0% of FAS

PSERS Plan 2Actual Contribution Rates Employer Employee

January - June 2019:PSERS Plan 2 7.07% 7.07%PERS Plan 1 UAAL 5.13%Administrative Fee 0.18%

Total 12.38% 7.07%July - December 2019:PSERS Plan 2 7.20% 7.20%PERS Plan 1 UAAL 4.76%Administrative Fee 0.18%

Total 12.14% 7.20%


10-19 years of service – 1.5% of FAS 5-9 years of service – 1% of FAS

The FAS is the basic monthly salary received at the t ime of ret irement, provided a member has held the same posit ion or rank for 12 months preceding the date of ret irement. Otherwise, i t is the average of the highest consecutive 24 months ’ salary within the last ten years of service. Members are el igible for ret irement with f ive years of service at the age of 50. Other benef its include duty and non -duty disabil i ty payments, a cost-of l iving adjustment (COLA), and a one-t ime duty-related death benef it , i f found el igible by the Department of Labor and Industr ies. LEOFF 1 members were vested af ter the complet ion of f ive years of el igible service. The plan was closed to new entra nts on September 30, 1977. Contr ibut ions Start ing on July 1, 2000, LEOFF Plan 1 employers and employees contr ibute zero percent, as long as the plan remains ful ly funded. The LEOFF Plan I had no required employer or employee contr ibut ions for f iscal yea r 2019. Employers paid only the administrat ive expense of 0.18 percent of covered payroll. LEOFF Plan 2 provides ret irement, disabi l i ty and death benef its. Retirement benef its are determined as two percent of the f inal average salary (FAS) per year of s ervice (the FAS is based on the highest consecutive 60 months). Members are el igible for ret irement with a ful l benef it at 53 with at least f ive years of service credit . Members who ret ire prior to the age of 53 receive reduced benef its. I f the member h as at least 20 years of service and is age 50, the reduct ion is three percent for each year pr ior to age 53. Otherwise, the benef its are actuar ial ly reduced for each year prior to age 53. LEOFF 2 ret irement benef its are also actuar ially reduced to ref lec t the choice of a survivor benef it . Other benef its include duty and non-duty disabil i ty payments, a cost -of- l iving al lowance (based on the CPI), capped at three percent annual ly and a one -t ime duty-related death benef it , i f found eligible by the Departmen t of Labor and Industr ies. LEOFF 2 members are vested af ter the complet ion of f ive years of el igible service. Contr ibut ions The LEOFF Plan 2 employer and employee contr ibut ion rates are developed by the Off ice of the State Actuary to ful ly fund Plan 2. The employer rate includes an administrat ive expense component set at 0.18 percent. Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. Effect ive July 1, 2017, when a LEOFF employer charges a f ee or recovers costs for services rendered by a LEOFF 2 member to a non -LEOFF employer, the LEOFF employer must cover both the employer and state contr ibut ions on the LEOFF 2 basic salary earned for those services. The state contr ibut ion rate (expressed a s a percentage of covered payrol l) was 3.44% as of July 1, 2019. The LEOFF Plan 2 required contr ibut ion rates (expressed as a percentage of covered payroll) for 2019 were as follows:


LEOFF 2 actual employer contr ibut ions for the year were $1.7 mi l l ion a nd employee contr ibut ions were $2.9 mill ion for a total county contr ibut ion of $4.6 mil l ion for the year ended December 31, 2019. The Legislature, by means of a special funding arrangement, appropr iates money f rom the state General Fund to supplement the current service l iabi l i ty and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension Funding Counci l and the LEOFF Plan 2 Retirement Board. This special funding situat ion is not mandated by the state constitut ion and could be changed by statute. For the state f iscal year ending June 30, 2019, the state contr ibuted $72,959,897 to LEOFF Plan 2. The amount recognized by the County as its proport ionate share of this amount is $13.5 mil l ion. Actuarial Assumptions The total pension l iabi l i ty (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed in 2019 with a valuat ion date of June 30, 2018. The actuar ial assumptions used in the valuat ion were based on the results of the Off ice of the State Actuary ’s (OSA) 2007-2012 Experience Study and the 2017 Economic Exper ience Study . Addit ional assumpt ions for subsequent events and law changes are current as of the 2018 actuarial valuation report. The TPL was calculated as of the v aluat ion date and rol led forward to the measurement date of June 30, 2019. Plan l iabil i t ies were rol led forward f rom June 30, 2018, to June 30, 2019, ref lecting each plan ’s normal cost (using the entry-age cost method), assumed interest and actual benef it payments.

Inflation: 2.75% total economic inf lat ion; 3.50% salary inf lat ion Salary increases : In addit ion to the base 3.50% salary inf lat ion assumption,

salar ies are also expected to grow by promotions and longevity. Investment rate of return: 7.4%

Mortality rates were based on the RP-2000 report ’s Combined Healthy Table and Combined Disabled Table, publ ished by the Society of Actuaries. The OSA appl ied offsets to the base table and recognized future improvements in mortality by project ing

LEOFF Plan 2Actual Contribution Rates Employer Employee

January - June 2019:State and local governments 5.25% 8.75%Administrative Fee 0.18%

Total 5.43% 8.75%July - December 2019:State and local governments 5.15% 8.59%Administrative Fee 0.18%

Total 5.33% 8.59%

Notes to the Financial Statements December 31, 2019 the mortal ity rates using 100 percent Scale BB. Mortal ity rates are appl ied on a generational basis; meaning, each member is assumed to receive addit ional mortal ity improvements in each future year throughout his or her l i fet ime. There were changes in methods and assumptions since the last valuation.

OSA updated modeling to ref lect providing benef it payments to the date of the init ial ret irement elig ibil i ty for terminated vested members who delay appl icat ion for ret irement benef its.

OSA updated COLA programming to ref lect legislat ion signed dur ing the 2018 legislat ive session that provides PERS and TRS Plan 1 annuitants who are not receiving a basic minimum, alternate minimum, or temporary disabi l i ty benef it with a one-t ime permanent 1.5% increase to their monthly ret irement benef it , not to exceed a maximum of $62.50 per month.

Discount Rate The discount rate used to measure the total pension l iabil i ty for all DRS plans was 7.4 percent. To determine that rate, an asset suff iciency test included an assumed 7.5 percent long-term discount rate to determine funding l iabi l i t ies for calculat ing future contr ibut ion rate requirements. (All plans use 7.5 percent except LEOFF 2, which has assumed 7.4 percent). Consistent with the long -term expected rate of return, a 7.4 percent future investment rate of return on invested assets was assumed for the test. Contr ibut ions f rom plan members and employers are assumed to cont inue being made at contractual ly required rates ( including PERS 2/3, PSERS 2, SERS 2/3, and TRS 2/3 em ployers, whose rates include a component for the PERS 1, and TRS 1 plan l iabi l i t ies). Based on these assumpt ions, the pension plans ’ f iduciary net posit ion was projected to be avai lable to make all projected future benef it payments of current plan members . Therefore, the long-term expected rate of return of 7.4 percent was used to determine the total l iabi l i ty. Long-Term Expected Rate of Return The long-term expected rate of return on the DRS pension plan investments of 7.4 percent was determined using a bui lding-block-method. In select ing this assumption, the Off ice of the State Actuary (OSA) reviewed the histor ical experience data, considered the histor ical condit ions that produced past annual investment returns, and considered capital market assumptions and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the capital market assumpt ions and their target asset al location to simulate future investment returns over var ious t ime horizons. Estimated Rates of Return by Asset Class Best est imates of ari thmetic real rates of return for each major asset c lass included in the pension plan ’s target asset al location as of June 30, 2019, are summarized in the table below. The inf lat ion component used t o create the table is 2.2 percent and represents the WSIB’s most recent long-term estimate of broad economic inf lat ion.


Sensitivity of the Net Pension Liability/(Asset) The table below presents the County ’s proport ionate share of the net pension l iabi l i ty calculated using the discount rate of 7.4 percent, as wel l as what the County’s proport ionate share of the net pension l iabi l i ty would be if i t were calculated using a discount rate that is 1-percentage point lower (6.4 percent) or 1-percentage point higher (8.4 percent) than the current rate.

Pension Plan Fiduciary Net Position Detailed information about the State ’s pension plans ’ f iduciary net posit ion is available in the separately issued DRS f inancial report. Pension Liabilit ies (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2019, the County reported a total pension l iabil i ty of $67.1 mill ion and total pension assets of $23.9 mil l ion. The County ’s proport ionate share of the net pension l iabil i t ies (assets) are as follows:

Fixed Income 20% 2.20%Tangible Assets 7% 5.10%Real Estate 18% 5.80%Global Equity 32% 6.30%Private Equity 23% 9.30%

100%

Asset ClassTarget

Allocation

% Long-Term Expected Real Rate of Return Arithmetic

1% Decrease(6.4%)

Current Discount Rate

(7.4%)1% Increase

(8.4%)PERS 1 65,293,639$ 52,138,207$ 40,724,140$ PERS 2/3 114,389,843 14,914,702 (66,711,224) PSERS 2 5,404,736 (523,517) (5,180,659) LEOFF 1 (2,227,477) (2,722,900) (3,150,651) LEOFF 2 (3,830,407) (20,599,988) (34,287,804)


The amount of the asset reported above for LEOFF Plans 1 and 2 ref lects a reduction for State pension support provided to the County. The amount recognized by the County as its proport ionate share of the net pension asset, the related State support, and the total port ion of the net pension asset that was associated with the County were as follows:

At June 30, the County ’s proport ionate share of the collect ive net pension l iabi l i t ies was as follows:

Employer contr ibut ion transmittals received and processed by the DRS for the f iscal year ended June 30 are used as the basis for determining each employer ’s proport ionate share of the col lect ive pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Al locat ions for al l plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contr ibut ions to LEOFF 1 f rom 1971 through 2000 and the ret irement benef it payments in f iscal year 2019. Historical data was obtained f rom a 2011 study by the Off ice of the State Actuary (OSA). In f iscal year 2019, the state of Washington contr ibuted 87.12 percent of LEOFF 1 employer contr ibut ions and all other employers contr ibuted the remaining 12.88 percent of employer contr ibut ions. LEOFF 1 is ful ly funded and no further employer contr ibut ions have been required since June 2000. I f the plan becomes underfunded, funding of the remaining l iabi l i ty wi l l require new legislat ion. The a llocation

Liability (or Asset)PERS 1 52,138,207$ PERS 2/3 14,914,702 PSERS 2 (523,517) LEOFF 1 (2,722,900) LEOFF 2 (20,599,988)

LEOFF 1 Asset LEOFF 2 AssetEmployer’s proportionate share (2,722,900)$ (20,599,988)$ State’s proportionate share of the net pension asset associated with the employer (18,417,630) (13,490,232) TOTAL (21,140,530)$ (34,090,220)$

Proportionate Share 6/30/18

Proportionate Share 6/30/19

Change in Proportion

PERS 1 1.388468% 1.355875% -0.032593%PERS 2/3 1.546035% 1.535477% -0.010558%PSERS 2 4.631280% 4.025814% -0.605466%LEOFF 1 0.135824% 0.137756% 0.001932%LEOFF 2 0.868738% 0.889198% 0.020460%

Notes to the Financial Statements December 31, 2019 method the plan chose ref lects the projected long -term contr ibut ion effort based on histor ical data. In f iscal year 2019, the state of Washington contr ibuted 39.57 percent of LEOFF 2 employer contr ibut ions pursuant to RCW 41.26.725 and al l other employers contr ibuted the remaining 60.43 percent of employer contr ibut ions. The col lect ive net pension l iabil i ty (asset) was measured as of June 30, 2019, and the actuarial valuat ion date on which the total pension l iabi l i ty (asset) is based was as of June 30, 2018, with update procedures used to rol l forward the total pension l iabi l i ty to the measurement date. Pension Expense For the year ended December 31, 2019, the County recogni zed pension expense as follows:

Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2019, the County reported deferred outf lows of resources and deferred inf lows of resources related to pensions f rom the fol lowing sources:

Pension ExpensePERS 1 $ 889,913 PERS 2/3 2,369,996 PSERS 2 852,316 LEOFF 1 (174,924)LEOFF 2 418,946 TOTAL $ 4,356,246


PERS 1Deferred Outflows

of ResourcesDeferred Inflows

of ResourcesDifferences between expected and actual experience $ - $ -

Net difference between projected and actual investment earnings on pension plan investments

- (3,483,270)

Changes of assumptions - - Changes in proportion and differences between contributions and proportionate share of contributions

- -

Contributions subsequent to the measurement date

4,684,705 -

TOTAL $ 4,684,705 $ (3,483,270)

PERS 2/3Deferred Outflows


of ResourcesDifferences between expected and actual experience $ 4,273,098 $ (3,206,578)


- (21,709,732)

Changes of assumptions 381,917 (6,257,712)Changes in proportion and differences between contributions and proportionate share of contributions

- (1,091,070)

Contributions subsequent to the measurement date 6,788,676 -

TOTAL $ 11,443,691 $ (32,265,093)


PSERSDeferred Outflows


of ResourcesDifferences between expected and actual experience $ 442,098 $ (46,302)


- (909,111)

Changes of assumptions 4,212 (281,355)Changes in proportion and differences between contributions and proportionate share of contributions

53,820 (136,770)

Contributions subsequent to the measurement date 757,411 -

TOTAL $ 1,257,542 $ (1,373,538)

LEOFF 1Deferred Outflows


of ResourcesDifferences between expected and actual experience $ - $ -


- (282,283)

Changes of assumptions - - Changes in proportion and differences between contributions and proportionate share of contributions

- -


- -

TOTAL $ - $ (282,283)


Deferred outf lows of resources related to pensions result ing f rom the County ’s contr ibut ions subsequent to the measurement date wi l l be recognized as a reduction of the net pension l iabi l i ty in the year ended December 31, 2020. Other amounts re ported as deferred outf lows and deferred inf lows of resources related to pensions wi l l be recognized in pension expense as fol lows:

LEOFF 2Deferred Outflows


of ResourcesDifferences between expected and actual experience $ 1,482,353 $ (370,442)


- (4,223,641)

Changes of assumptions 33,937 (2,318,158)Changes in proportion and differences between contributions and proportionate share of contributions

650,305 (604,279)

Contributions subsequent to the measurement date 874,599 -

TOTAL $ 3,041,194 $ (7,516,521)

All PlansDeferred Outflows


of ResourcesDifferences between expected and actual experience $ 6,197,549 $ (3,623,322)


- (30,608,038)

Changes of assumptions 420,066 (8,857,225)

Changes in proportion and differences between contributions and proportionate share of contributions

704,125 (1,832,119)


13,105,391 -

TOTAL $ 20,427,131 $ (44,920,704)


Snohomish County offers a voluntary Deferred Compensation 457(b) plan that is currently administered by Nat ionwide to regular employees who are employed for 20 or more hours per week. A 457(b) Deferred Compensat ion plan is a ret irement plan, created to serve governmental employees. IRS rules govern how much an employee can contr ibute to the plan each year. The County ha s var ious employee matching requirements based on the different union contract s. The deferred compensation plan author ized by County Code sect ion 3.34.030 is administered by the deferred compensation committee which consists of the Director of Finance, th e Director of Human Resources and the County Prosecuting Attorney or his designee. This plan is reported in the Fiduciary Statements as a pension (and other employee benef it) trust fund. Defined Benefit Other Postemployment Benefit (OPEB) Plans The following table represents the aggregate OPEB amounts for al l plans subject to the requirements of Statement 75 for Postemployment Benef its Other than Pension for the year 2019:

OPEB Plan Description Snohomish County implemented Statement No. 75 of the Governmental Accounting Standards Board (GASB), Financial Report ing for Postemployment Benef its Other than Pension for f iscal year 2018 f inancial report ing. The County is considered a single employer def ined benef it plan based on guidance provided in GASB Statement No. 75. The County has only one qual if ied OPEB plan, Law Enforcement Off icers’ and Fire Fighters’ 1 (LEOFF 1), which is administered through the Snohomish County Disabi l i ty Board. The Board was establ ished pursuant to the authori ty of RCW 41.2 6.110 and Chapter 164, Washington Laws passed in 1988 ; and its powers, dut ies and

Year ended December 31: PERS1 PERS 2/3 PSERS LEOFF 1 LEOFF 2

2020 $ (768,951) $ (6,956,986) $ (165,892) $ (65,566) $ (1,069,793)2021 $ (1,821,425) $(11,350,106) $ (308,849) $ (144,515) $ (2,096,464)2022 $ (649,990) $ (5,149,346) $ (194,002) $ (52,440) $ (969,573)2023 $ (242,904) $ (2,852,530) $ (102,128) $ (19,762) $ (521,653)2024 $ - $ (1,342,491) $ (18,119) $ - $ (183,229)

Thereafter $ - $ 41,381 $ (84,417) $ - $ (509,214)Total Net Deferred (Inflows)/Outflows $ (3,483,270) $(27,610,078) $ (873,407) $ (282,283) $ (5,349,926)

OPEB liabilities $ (11,581,115)OPEB assets - Deferred outflows of resources - Deferred inflows of resources - OPEB expenses/expenditures $ 1,326,068

OPEB Plan Amounts

Notes to the Financial Statements December 31, 2019 responsibi l i t ies are establ ished by state law. In the event of any conf l ict of these rules with State law, the latter apply. The Disabi l i ty Board is composed of f ive member s who serve two year terms. The current rules and regulat ions for administering LEOFF 1 OPEB may be amended, repealed or altered in whole or in part by a majority vote of the total membership of the County’s LEOFF Disabil i ty Board. In June of each year, the rules and regulat ions are reviewed to assure:

Provisions remain in conformance with Washington statutory and administrat ive codes and/or the Snohomish County Code.

Provisions ref lect current phi losophy and intent of the Board. LEOFF 1 Plan closed to new members October 1, 1977. The County’s LEOFF 1 Plan currently has only inactive members. Plan members do not pay any contr ibut ions for benef its provided under the LEOFF 1 Plan and plan members do not share in any costs unless identif ied as not medical ly necessary through the Snohomish County Disabi l i ty Board. The County’s OPEB plan is available to LEOFF 1 members upon ret irement. Coverage for members includes medical, prescr ipt ions, dental, vis ion and long -term care. El igibi l i ty provisions include being a fullt ime employee, and ret ir ing at age 50 with a least 5 years of service. The amount of service credit doesn't affect a member’s el igibil i ty for a medical benef it i f one of the following is true:

Member is on disabil i ty leave or has taken a disabil i ty ret irement. Member’s service ret irement date with LEOFF 1 is the day fol lowing separation

f rom LEOFF 1 employment.

I f a member ends employment before turning 50 and has fewer than 20 years of service credit , the member won’t be el igible for a medical benef it . Pre-65 coverage allows ret irees to remain on County insurance. County pays full insurance premium cost, and any spousal and/or dependent premium cost is paid for by the ret iree. The County wi l l reimburse the ret iree for any out -of-pocket medical expense deemed to be medical ly necessary as approved by the LEOFF 1 Disabil i ty Board. Should ret iree coverage terminate el igible spouse/dependent coverage may cont inue under COBRA provision when an applicable qualifying even t occurs. Post-65 coverage al lows ret irees to remain on County insurance in ret irement past Medicare el igibi l i ty through the Medicare Advantage plan. The County pays for the full insurance premium cost for the ret iree including the Medicare Part D premium cost . Any spousal and/or dependent premium cost is paid for by the ret iree. The County wi l l reimburse the ret iree for any out -of-pocket medical expense that is deemed to be medical ly necessary as approved by the LEOFF 1 Disabi l i ty Board. Should ret iree coverage terminate, eligible spouse/dependent coverage may cont inue under COBRA provision when an appl icable qual ifying even t occurs. Coverage provisions include ret irees not being permitted to remain on County dental, vis ion or long term care insurance in ret irement. The c ounty wi l l reimburse the ret iree for any out-of-pocket insurance expense for dental or vis ion expense that is deemed to be medical ly necessary. This reimbursement includes basic dental, vis ion, hear ing aid, and long-term care costs as approved by the LEOFF Disabi l i ty Board.

Notes to the Financial Statements December 31, 2019 Employees covered by benefit terms: At December 31, 2019, the fol lowing employees were covered by the benef it terms:

The County’s LEOFF 1 Plan has no assets accumulated in a qual ifying trust that meets the criter ia in paragraph 4 of GASB 75 and is funded on a pay-as-you-go basis. Requirements of the County to pay OPEB benef its are establ ished, and can be amended, in the Snohomish County Disabi l i ty Board Rules document which is administered by the Snohomish County Disabil i ty Board. The document provides uniform methods of procedure for the conduct of business of the Snohomish County Disabi l i ty Board including approval, payment of claims and a reconsiderat ion process. Payment of OPEB benef its for the period ending December 31, 2019 is was $ 816,693. Assumptions and Other Inputs The County’s total OPEB l iabi l i ty in the December 31, 2019 actuar ial valuation was determined using the following actuar ial assumptions: Assumptions: Economic

Inf lat ion: 2.25%

Discount Rate used for the Total OPEB Liabi l i ty: Beginning of Year: 4.10% End of Year: 2.74%

The discount rate used in the determinat ion of the total OPEB l iabi l i ty is based on a combination of the expected long -term rate of return on plan investments and the municipal bond rate. Because the County does not have a trust dedicated to the payment of OPEB benef its , only the municipal bond rate is used in determining the total OPEB liabil i ty.

High Quality 20 Year Tax-Exempt G.O. Bond Rate

Beginning of Year: 4.10% End of Year: 2.74%

Municipal bond rate assumpt ion is based on The Bond Buyer 20 -Bond GO Index. The 20-Bond Go Index is based on an average of certain general obl igat ion municipal bonds maturing in 20 years and having an average rat ing equivalent of Moody’s Aa2 and Standard & Poor’s AA. The rate shown in the Assumpt ion section is the December 26, 2019 rate.

Inactive employees or beneficiaries currently receiving beneifts 60Inactive employees entitled to but not yet receiving benefits 0Active Employees 0 Total 60


Total Payrol l Increases: 2.25%. The total payrol l increase assumption of 2.25% remained unchanged from the prior valuation.

Annual Blended Premiums: See accompanying table below. Annual c laims were

determined by an analysis of previous claims.

Healthcare Trend Rates: The init ia l trend rate for Medicare Part B and County Insurance plans are based on the 2019 Segal Health Plan Cost Trend Survey, unless the Fiscal Year 2019 premiums were known and a known trend rate could be ut i l ized. The grading period and ult imate tren d rates selected fall within a general ly accepted range. The init ial trend rate for reimbursements is based on the assumed inf lat ion rate with considerat ion given to the fact that these reimbursements are related to medical expenses.

Retiree Contr ibut ion Rates: Ret irees do no contr ibute Assumptions: Demographic

Elect ion at Ret irement: Coverage elect ion for ret irees is assumed at the following rates: LEOFF 1: 100%

Retiree Spouse Retiree SpousePlan B - PPOMedicare Advantage 16,441$ N/A N/A N/AMedicare Advantage N/A N/A 8,124$ N/AMedicare Part B N/A N/A 1,608$ N/A

Annual Blended PremiumsUnder Age 65 Age 65 & Older

Period U65 65+ U65 65+ U65 65+FY 18 to FY 19 1.12% 1.12% 7.10% 7.68% 3.50% 3.50%FY 19 to FY 20 3.20% 3.20% 6.87% 4.00% 3.50% 3.50%FY 20 to FY 21 3.20% 3.20% 6.63% 4.00% 3.50% 3.50%FY 21 to FY 22 3.20% 3.20% 6.40% 4.00% 3.50% 3.50%FY 22 to FY 23 3.20% 3.20% 6.17% 4.00% 3.50% 3.50%FY 23 to FY 24 3.20% 3.20% 5.93% 4.00% 3.50% 3.50%FY 24 to FY 25 3.20% 3.20% 5.70% 4.00% 3.50% 3.50%FY 25 to FY 26 3.20% 3.20% 5.47% 4.00% 3.50% 3.50%FY 26 to FY 27 3.20% 3.20% 5.23% 4.00% 3.50% 3.50%FY 27 to FY 28 3.20% 3.20% 5.00% 4.00% 3.50% 3.50%Ultimate 3.20% 3.20% 5.00% 4.00% 3.50% 3.50%

ReimbursementsCounty InsuranceMedicare Part BHealth Care Trend Rates


The percentage of ret irees receiving medical coverage, assumed to lapse al l coverages at age 65, is based on the plan provision of the county’s postret irement plan.

Spousal Elect ion: Spousal coverage and reimbursement is not offered by the

County. Therefore, spousal costs are not part of this analysis.

Plan Part icipat ion Rate: Retirees are assumed to submit and receive approval for reimbursement by the County for costs at the following rates:

Retiree Lapse Rates: Retirees receiving medical coverage are expected to lapse al l coverages at age 65 at the following rates: LEOFF 1 0% - The percentage of ret irees receiving medical coverage, assumed to lapse al l coverages at age 65, is based on the plan provisions of the County’s postret irement plan, as detailed in the Plan Provisions sect ion of this report.

Mortality Rates: LEOFF 1 Mortal ity fol lows the Sex Dist inct Raw Rates as

developed in the RP-2014 Study, with Blue Col lar Adjustment. These rates are improved generational ly using MP-2016 Improvement Rates.

The mortal ity rates were used to est imate the single age at death per part ic ipant pursuant to the Alternative Measurement Method for GASB 75.

Assumption: Changes

The assumed rate on High Quality 20 -year Tax-Exempt G.O. Bonds was changed from 4.10% to 2.74% for the current year as already ment ioned. The choice of index is unchanged from the prior year. The rate has been updated to f iscal year-end 2019 based on changes in market condit ions as ref lected in the Index. The change was made to ref lect our understanding of the requirements of GASB under Statement 74 and Statement 75. Since we do not have a trust dedicated exclusively to the payment of OPEB benef its, the d iscount rate used in the determinat ion of the Total OPEB Liabi l i ty was also changed from 4 .10% to 2.74%.

LEOFF 1Plan B - PPO 100%Medicare Advantage 100%Medicare Part B 100%Prescriptions 75%Medical Services 60%Medical Supplies 5%Vision 30%Dental 100%Hearing Aids 4%Assisted Living 25%

Notes to the Financial Statements December 31, 2019 Notes on Assumptions

Salary Increases: The Total Payrol l Increase assumption of 2.25% remained unchanged from the prior valuation.

Start ing Per Capita Costs: Rates adjusted for “ implic it ” cost of covering ret irees as dictated by the Alternative Measurement Method of GASB 74/75.

Election at Ret irement: The percentage of act ive employees assumed to cont inue the part ic ipat ion f rom the act ive medical plan into the ret iree medical plan upon ret irement is based on the current populat ion. The percent of the act ive employees whom have a waived act ive coverage but are assumed to elect ret iree coverage upon ret irement is based on the current populat ion.

Plan Part ic ipation: The percentage of act ive employees assumed to elect the

var ious plans avai lable upon ret irement is based on the current populat ion.

Expected Return on OPEB Plan Assets: There is current ly no expectat ion for future returns on OPEB Plan Assets since the OPEB obligat ion is an unfunded obl igat ion. There is no trust dedicated to the payment of OPEB benef its.

Inf lat ion Rate: The Long-Term Inf lat ion Expectat ion used is 2.25%, which is an

under lying component of the discount rate and assum ed health care trend rates. Measure of Total OPEB Liability: Healthcare Trend Rate The following presents the total OPEB l iabi l i ty of the County based on its healthcare trend rates including what the OPEB l iabi l i ty would be using a 1 -percentage point decrease as wel l as what the OPEB l iabi l i ty would be using a 1 -percentage point increase of the current trend rate.

Measure of Total OPEB Liability: Discount Rate The following presents the total OPEB liabi l i ty of the County calculated using the discount rate of 2.74 percent, as well as what the OPEB liabi l i ty would be if i t were calculated using a discount rate that is 1 -percentage point lower (1.74 percent) and a 1-percentage point higher (3.74 percent) than the current discount rate. The end of the

1% Decrease

Current Healthcare Cost Trend Rate 1% Increase

% Varies % Varies % VariesTotal OPEB Liability $10,644,158 $11,581,115 $12,616,290

Notes to the Financial Statements December 31, 2019 year discount rate, 2.74%, is being used and can be found l isted in the Assumption section above.

Changes in the Total OPEB Liability The Total OPEB Liabi l i ty for the current Fiscal Year has been developed based on the Actuar ial Valuation Date of January 1, 2018, and adjusted to the Measurement Date of December 31, 2019, based on procedures that conform to the Alternative Measurement Method and general ly accepted actuar ial principles and pract ices.

Results assumed that no signif icant changes have been made to the ret iree medical program and a ful l valuation is not required. Because of this, the following assumptions given in 2018 are carr ied into 2019. Assumptions or other inputs f rom 2018 that affected measurement of the county’s total OPEB liabil i ty include:

Expected Increase in Liability Each year the accrued l iabil i ty is expected to increase with interest. The increase is part ially offset by decreases in l iabi l i ty due to benef it payments.

In addit ion to the expected increase in l iabi l i ty, addit ional changes in l iabi l i ty occurred between the pr ior valuation and the current year. Below are the key components of those changes.

Census The current valuat ion census contains 60 ret irees whereas the previous valuation census contained 65 ret irees.

County Costs Premium rates are antic ipated to increase each year based on assumed health care trend rates. In the current year, the premium rates were higher than previously anticipated for the Medicare Advantage and Medicare Part B premiums.

1% Decrease

Current Discount Rate 1% Increase

-1.74% -2.74% -3.74%Total OPEB Liability $12,586,675 $11,581,115 $10,685,940

LEOFF 1Total OPEB Liability at 01/01/2019 $ 11,071,740 Service cost - Interest 437,087 Changes of benefit terms - Differences between expected and actual experience - Changes of assumptions 888,981 Benefit payments (Employer Contributions) (816,693) Other changes - Total OPEB Liability at 12/31/2019 $ 11,581,115


However, the premium rates were lower than previously ant ic ipated for the Plan B - PPO premiums.

Expected Claims The expected claims for al l future benef its have been revised based on a three -year analysis of past claims experience. These claims, especial ly those due to long-term care costs, are less than previously ant icipated.

Assumptions The assumed increases in medical costs have been revised to 1.12% for the Medicare Part B plan in the f irst year of the project ion, based on known information, and 3.20% for all future years.

The assumed increases in pre-65 medical costs have been revised to 7.10% for County insurance in the f irst year of the project ion grading uniformly over a 10 -year per iod to an ult imate rate of 5.00%. The assumed increases in post -65 medical costs for County insurance have been revised to 7.68% in the f irst year of the project ion, based on known information, and 4.00% for al l future years.

The assumed increases in all other reimbursement expenses have been revised to 3.50% for al l future years based on an assumed inf lat ion rate and considerat ion given to the fact that these reimbursements are related to medical expenses and wil l be impacted by future increases in medical costs.

As discussed earl ier , the expected rate of return on County assets has changed from 4.10% to 2.74% to better ref lect the current high-qual ity f ixed income environment. The underlying index used is The Bond Buyer 20 -Bond GO Index. The rate has been updated to the current f iscal year end based on changes in market condit ions as ref lected in the Index. The rate used is the December 27, 2019 rate. The change was made to ref lect our understanding of the requirements of GASB under Statement 75. See the Discount Rate section of this report for further details.

The mortality tables have been changed to ref lect more current trends in publ ic safety employee populat ions.

The Net OPEB Liabi l i ty is the excess of the Total OPEB Liabi l i ty over the OPEB Plan Net Posit ion. Because this is a l imited -year report, the only changes in the Net OPEB Liabi l i ty related to changes in assumpt ions is based on the changes in the assumed discount rate.

There are no insurance contracts purchased by the County to cover benef it payments . There are no changes between the measurement date of the County’s total OPEB l iabi l i ty and the County’s report ing date that are expected to have a signif icant ef fect on the total OPEB l iabi l i ty and the amount of the expected resultant change in the total OPEB liabil i ty. The OPEB Expense/( Income) recognized by the County in the curr ent report ing period is $1.3 mil l ion.

Notes to the Financial Statements December 31, 2019 At December 31, 2019, the County reported zero deferred outf lows of resources and zero deferred inf lows of resources related to OPEB because there are no LEOFF 1 act ive members. When there are no act ive members al l i tems must be recognized as an OPEB expense in the current report ing per iod. Because LEOFF is made up of Law Enforcement Off icers and Fire Fighters, both the Sher iff ’s Off ice and Airport are charged their proport ionate share of OPEB l iabi l i ty. 4.B Risk Management Snohomish County is exposed to various r isks of loss, including theft, property damage, or destruct ion of assets, business interruption, errors and omissions, injur ies to employees, and natural disasters. The County uses two internal service funds to account for and f inance property/casualty, worker ’s compensat ion, unemployment, and employee medical and dental benef its self -insurance programs. The County has a professional c laims adjuster posit ion to adjudicate all general l iabi l i ty claims not direct ly handled by the Prosecuting Attorney ’s Off ice, Civi l Divis ion, per County Code 2.90.060. The County contracts with third-party claim administrators to manage workers ’ compensat ion and employee medical benef its claims. Unemployment claims are administered through Washington State Department of Employment Security. The Civi l Divis ion of the County ’s Prosecut ing Attorney ’s off ice handles al l l iabil i ty lawsuits and, when requested, claims. The County is self - insured for $3 mil l ion, and procures $50 mil l ion excess insurance for damages and/or legal act ions sett led for more than $3 mil l ion. There were no sett lements in excess of the insurance coverage in the past three years. Claims sett lements and loss expenses are reported in the Insurance Fund and the Employee Benef it Fund. These funds are responsible for collect ing interfund premiums from insured funds and departments, for paying claims and sett lements, and for purchasing certain excess insurance pol icies. Interfund premiums are assessed on the basis of claims exper ience, insurance pol icy purchases, and r isk management programs. The County's established l iabil i t ies for probable losses for 2018 and 2019 are:

Insurance Fund The Insurance Fund accounts for the County ’s property/casualty insurance program. Established in 1977, this fund accounts for the County ’s exposures to loss due to the tortuous conduct of the County and includes, but is not l imited to, those damages which

2019 2018 2019 2018 2019 2018

Claims Liability, Beginning of Year 4,593,128$ 4,908,756$ 19,550,827$ 18,711,058$ 24,143,955$ 23,619,814$ Incurred Claims and Changes 1,407,462 1,462,212 8,372,080 2,580,033 9,779,542 4,042,245 Payments on Claims (2,044,327) (1,777,840) (6,349,077) (1,740,264) (8,393,404) (3,518,104) Claims Liability, End of Year 3,956,263$ 4,593,128$ 21,573,830$ 19,550,827$ 25,530,093$ 24,143,955$

Claims Liability, Current Portion 1,273,771$ 1,449,072$ 4,130,424$ 3,698,584$ 5,404,195 5,147,656$ Claims Liability, Long term Portion 2,682,492 3,144,056 17,443,406 15,852,243 20,125,898 18,996,299 Claims Liability, End of Year 3,956,263$ 4,593,128$ 21,573,830$ 19,550,827$ 25,530,093$ 24,143,955$

Worker's Compensation General Liability Total

Notes to the Financial Statements December 31, 2019 are commonly covered by commercial general l iabil i ty, business/automobile l iabi l i ty, employment pract ices and publ ic off icial errors and omissions pol ic ies. In addit ion to its general l iabi l i ty insurance coverages and excess l iabi l i ty pol ic ies, the Count y insurance fund, also self - funds Publ ic Records Act violat ion sett lements and has specif ic l iabi l i ty insurance pol ic ies to cover some of i ts other exposures, and coverage for protect ion against other types of losses. The Insurance Fund also funds pol icy deductibles. The fund also accounts for al l Risk Management programs, including safety and worker ’s compensation. The County is self - insured for workers ’ compensation as cert if ied under the Revised Code of Washington, Industr ial Insurance Act, and Tit le 51. Addit ionally, the County purchases an Excess Workers ’ Compensat ion insurance policy with statutory l imits. General l iabi l i ty and worker ’s compensat ion claim estimates are based on an actuarial analysis prepared by AON Actuar ial & Analyt ical Consult i ng in February of each year. The est imate includes al l pending claim reserves and est imates for incurred, but not yet received, c laims (IBNR). The est imated l iabil i ty for unpaid claims that are recorded at present value and discounted at 3.5% in the f ina ncial statements as of December 31, 2019, is $25.5 mil l ion. Unemployment compensat ion benef its are expensed quarterly as claims are bi l led f rom the Washington State Department of Employment Security. Al l interfund premiums are assessed on loss history, and are reported as revenues in the Insurance Fund, and as expenses or expenditures by insured funds. Employee Benefits Program Fund The Employee Benef its Program Fund accounts for medical, dental, vis ion, l i fe, accidental death and dismemberment, long-term-disabi l i ty, and other benef its, including LEOFF1 ret iree medical benef its. The benef its offered by the County include both self -insured medical and vis ion plans, which the County offers to employees, outside distr ict subscr ibers, and COBRA subscr ibers. Snohomish County ret irees may part ic ipate in a self - insured ret iree medical insurance plan. El igible LEOFF 1 ret irees part icipate in a ful ly insured Medicare Advantage Plan. Interfund premiums are calculated on a per subscr iber per month basis and charged to departments through composite rates that include expected claims, expenses, premiums, and administrat ive expenses. In most cases, employees contr ibute towards medical insurance premiums. 4.C Commitments, Contingencies, and Legal Matters Snohomish County has recorded in its f inancial statements all mater ial l iabi l i t ies, including an est imate for situat ions not yet resolved, but where, based on avai lable information, management bel ieves it is probable that the County wi l l have to make payment. Al l known or pending claims are proper ly recognized within the recorded l iabil i t ies of the Snohomish County insurance fund, or are covered by insurance pol icies. Non-Financial Guarantees The County has 3 Contingent Loan Agreements in place with 1 local entity that provides housing for low- income persons/famil ies in Snohomish County. The Contingent Loan agreements were created to assist with debt service payments in the event that the entit y is unable to meet their debt service obl igat ion for certain bond s or loans named in the

Notes to the Financial Statements December 31, 2019 Cont ingent Loan Agreements . RCW 35.83.050 states that a County located in whole or in part within the area of operat ion of a housing author ity may lend or donate money to a housing authority. Each of these agreements remains in effect unti l the debt is paid in ful l or in some cases if the debt is defeased. The agreements note that if the County does make debt service payments on behalf of the entity that the entity is required to pay back the County. In the event that the entity do esn’t repay the County, the County has the opt ion to cal l the bonds ear ly or take over management of the project that the debt relates to. The County does not anticipate that it wil l become necessary to fulf i l l these guarantees. Accordingly, no l iabi l i ty has been recorded for them. The Contingent Loan agreements are as fol lows:

Contracts Regional Disposal In June 1992, Sol id Waste Management entered into a waste export contract with Republic Services (formerly known as Regional Disposal Company), to transport Snohomish County’s solid waste to Republ ic Services’ Kl ickitat County, Washington, landf i l l . The County agrees to deliver 95% of its sol id waste (net of recyclable and construct ion debris) or 150 thousand tons per year, whichever is greater. The new contract with Republ ic Services went into effect May 16, 2018 and concludes on January 15, 2028. At the end of 2019, Snohomish County was paying Republic Services $50.56 per ton for disposal of municipal sol id waste del ivered f rom the County transfer stat ions. The County paid Republic Services $29 mil l ion in 2019. Annual encumbrances related to this contract are establ ished at the beginning of each year. Passenger Terminal On March 4, 2019, Propel ler Airports Paine Field, LLC (Propel ler) opened a new passenger terminal serving two (2) air l ines and over one (1) mi l l ion passengers annual ly. The Airport entered a thirty (30) year land lease with Propel ler and the option to renew for two (2) addit ional periods of t en (10) years each. The land lease is set at fair market value (FMV) and is adjusted every three (3) years to current FMV. In addit ion, the Airport receives 2.5% of annual gross revenues. Propel ler owns and operates the terminal which provides: auto-parking; aircraf t ground handl ing services; concessionaires (food); baggage handl ing services; air l ine common use gates & check in kiosks; and aircraf t parking. Future of Flight Beginning October 17, 2018, Snohomish County leased the Future of Flight Aviat ion Center to the Boeing Company for an init ial term of f ive years . Boeing has one extended

Issuer

Debt Issue Year

Outstanding Principal at

12/31/19

Final Bond

MaturityHousing Authority of Snohomish County 2007 3,070,000$ 4/1/2037Washington State Housing Finance Commission(Housing Authority of Snohomish County)

2010 1,250,000 7/1/2045

Housing Authority of Snohomish County 2012 8,480,000 5/1/2041 $ 12,800,000

Notes to the Financial Statements December 31, 2019 term option of thirteen and a half years for a total of eighteen and a half years to equal the maturity of the ref inanced taxable bonds. The Future of Flight gen eral obl igat ion tax exempt bonds were ref inanced to taxable bonds per the new lease agreement. The leased space is used for Boeing Tour Center related act ivi t ies, including theater and conference presentat ions, special events, educat ional programs, and a gif t shop. Boeing must always keep it as a publ ic facil i ty per their lease agreement. Dreamlif ter Operat ions Center The Dreamlif ter Operations Center was constructed in 2013 and funded with a 20 year bond. The facil i ty is leased to the Boeing Company with a set annual lease amount at fair market value which funds the bui lding ’s debt service. In addit ion, Boeing pays a land rent for the facil i ty and addit ional ramp area, with rent adjusted to fair market value every 3 years. Construction At December 31, 2019, the County had pending construct ion project contracts in progress. The commitments related to the remaining contract balances are summarized as follows:

All s ignif icant encumbrances for construct ion contracts are included in the above amounts and are established at the beginning of each year. Operating Leases The County leases off ice bui ldings under cancel lable operating leases. Total cost for such leases was $690 thousand for the year ended December 31, 2019. The future minimum lease payments for these leases are as fol lows:

Expended Through Remaining 12/31/2019 Commitment

Governmental ActivitiesCounty Roads 61,842,514$ 8,526,753$ Parks Construction 19,316,216 6,251,716 Facilities 28,621,827 6,205,714 Total Governmental Activities 109,780,557 20,984,183

Business-Type ActivitiesAirport 22,053,674 5,907,132 Solid Waste 938,460 671,170 Surface Water 28,763,746 1,607,833 Total Business-type Activities 51,755,880 8,186,135

Total Primary Government 161,536,437$ 29,170,318$


The County leases certain propert ies to var ious tenants under cancel lable operating lease agreements. As one of its enterprise act ivit ies, the Airport Fund leases out bui ldings and grounds to var ious individuals and companies in the aviat ion f ield. The Sol id Waste Fund leases out property to a company that provides operat ions related to the transshipment of sol id waste for disposal at a landf i l l .

Concession Agreements Snohomish County has an agreement with High Road Promotions , LLC under which they wi l l operate and collect user fees f rom the motor sport and mult i -event venue located at the Evergreen State Fai rgrounds unti l November 1, 2026 . High Road Promotions , LLC pays Snohomish County a base instal lment payment six t imes each year. The present value of the future instal lment payments is $763 thousand. They wi l l also pay Snohomish County a t icket revenue sharing payment monthly. Snohomish County reports a receivable and deferred inf low of resources in the amount of $763 thousand at year end pursuant to the service concession arrangement. Grant Program Involvement The County part ic ipates in var ious federal or state grant/ loan programs. The grant/ loan programs are often subject to addit ional audits by agents of the granting or loaning agency, the purpose of which is to ensure compliance with the specif ic condit ions of the grant or loan. Any l iabi l i ty for reimbursement that may arise as a result of these audits cannot be reasonably determined at this t ime, although it is bel ieved the amount, i f any, would not be material. Environmental Liabilit ies Snohomish County maintains and monitors several landf i l ls throughout the County. The level of attention for each landf i l l differs, but at a minimum all sites require visual inspect ions on a routine basis. These landf i l ls , except for the Cathcart landf i l l , were

Year Ending December 31 Amount

2020 911,812$ 2021 443,855 2022 473,655 2023 377,764 2024 180,196

2025-2029 471,839 Total 2,859,121$

Enterprise Activities

Land 15,581,580$ Buildings 106,400,851 Less Depreciation (38,843,306) Total Property Leased to Others, Net 83,139,125$

Property Under Long Term Lease

Notes to the Financial Statements December 31, 2019 closed before October 4, 1988, and are not required to have f inancial assurance plans as identif ied in WAC 173-304-407 and 173-304-467, but st i l l must be managed and monitored on a regular basis. In 2016, under the terms of a sett lement agreement, the County agreed to take ownership of a landf i l l and certain surrounding property necessary to provide an appropriate environmental buffer. The County received a total of $6.6 mil l ion f rom the former owner (through their insurers) and other l iable part ies to pay for the costs of clean -up, closing, and long-term monitoring of the Landf il l which is current ly reported as a l iabi l i ty. The County has contracted with a consultant to obtain reasonable e st imates for closure and post-closure costs, that information is not present ly available. The landf i l l is currently inact ive and the County is in the process of closing the landf i l l in compliance with state, local, and federal requirements. Snohomish County performs certain maintenance and monitoring functions to the closed Cathcart Landf i l l site as required by state, local, and federal laws and regulat ions . These functions are performed for a minimum of twenty years af ter closure or unti l t he site is stabil ized. The landf i l l was closed in 1992; therefore, we consider landf i l l capacity 100% used to date with zero years remaining landf i l l l i fe. The 2007 post -closure plan update resulted in increased est imates in annual maintenance and monito r ing costs as wel l as extended the date that required monitoring wil l cease. In 2011, and again in 2014, the plan was adjusted to more current ly ref lect est imated interest income and expenses. The restr icted landf i l l post -closure investment account established for the purpose of paying the l iabi l i ty is $1.5 mil l ion at December 31, 2019. The current port ion of the post closure l iabi l i ty is $437 thousand. I t is anticipated that future inf lat ion costs wi l l be f inanced in part f rom earnings on the investment account. The actual cost of post -closure care may be further adjusted in the future due to inf lat ion or def lat ion, changes in technology, or changes in appl icable laws and regulat ions.

Litigation The County is a party to var ious legal proceedings which normally occur in the course of governmental operat ions. The f inancial statements include actuarial accruals for loss contingencies that may result f rom these proceedings.

Year Beginning Balance

Interest Income

Annual Expense

Ending Fund Balance

2019 1,918,685 27,437 426,659 1,519,464 2020 1,519,464 21,728 436,770 1,104,422 2021 1,104,422 15,793 447,122 673,093 2022 673,093 9,625 457,719 225,000

Interest Rate 1.43%Inflation Rate 2.37%

Landfill Post-Closure Estimates

Notes to the Financial Statements December 31, 2019 Note 5 Reconciliation of Government -Wide and Fund Financial Statements 5.A Explanation of Differences between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Position Total fund balances for the governmental funds balance sheet differs f rom net posit ion of governmental act ivit ies as reported in the statement of net posit ion due to the accounting methods used to prepare these statements. The governmental funds balance sheet is presented on a modif ied accrual basis and the statement of net posit ion is presented on a ful l accrual basis. In addit ion, net internal service fund act ivity is included in government act ivit ies on the statement of net posit ion. Detai ls of the differences between these two presentat ions are as fol lows: Capital Related Items When capital assets that are to be used in governmental act ivit ies are purchased or constructed, the cost of those assets are reported as expenditures in governmental funds. However, the statement of ne t posit ion included those capital assets among the assets of the County as a whole.

. Long-Term Debt Transactions Long-term l iabil i t ies and related deferred charges applicable to the County ’s governmental debt act ivit ies are not due and payable in the cu rrent period, and accordingly, are not reported at the fund level. Al l debt l iabi l i t ies (both current and long -term) are reported in the statement of net posit ion.

Internal Service Funds The internal service funds are included in governmental act ivit i es in the statement of net posit ion because they pr imari ly serve governmental act ivit ies of the County.

Costs of Capital Assets 2,181,236,868$ Accumulated Depreciation (849,294,073) Capital Assets, Net 1,331,942,795

Investment in Joint Venture 5,650,951 Total Capital Assets 1,337,593,746$

Unamortized Bond Premiums, Discounts, and Deferred Gain/Loss (17,557,208)$ Interest Payable on Long-Term Debt (Accrued Liabilities) (3,854,750) Current Portion of Long-Term Debt (15,173,605) Noncurrent Portion of Long-Term Debt (302,898,912) Total Long-Term Debt (339,484,475)$


Other Full Accrual Adjustments

5.B Explanation of Differences between Governmental Fund Operating Statements and the Statement of Activities Details of the differences between these two presentat ions are as follows: Capital Related Items When capital assets that are to be used in governmental act ivit ies are purchased or constructed, the resources expended for those assets are reported as expen ditures in governmental funds. However, in the statement of act ivit ies, the costs of those assets are allocated over their est imated useful l ives and reported as depreciat ion expense. As a result , fund balance decreases by the amount of f inancial resourc es expended, whereas net posit ion decreases by the amount of depreciat ion expense charged for the year. In addit ion, assets donated or contr ibuted to the County ’s governmental act ivit ies do not provide current f inancial resources and, therefore, are not r eported as revenues in governmental funds.

Internal Service Funds Total Current Assets 74,021,499$ Internal Service Funds Total Non-Current Assets, Net 49,101,781 Internal Service Funds Total Assets 123,123,280

Internal Service Funds Total Deferred Outflow of Resources 2,073,298

Internal Service Funds Total Current Liabilities (27,515,537) Internal Service Funds Total Non-Current Liabilities (43,665,836) Internal Service Funds Total Liabilities (71,181,373)

Internal Service Funds Total Deferred Inflow of Resources (3,915,675)

Internal Service Funds Net Position 50,099,530$

Compensated Absences Payable (19,018,675)$ Pension Related Items (49,027,917) Offset to Unavailable Property Taxes 1,792,171 Interest and Penalties Receivable Property Tax 7,786,446 Offset to Unavailable Revenue 12,326,621 Court Accounts Receivable 47,888,178 Court Allowance for Bad Debts (41,148,025) Other Full Accrual Adjustments (2,404,941) Total (41,806,142)$


Internal Service Funds Revenues and Expenses The revenues and expenses of the internal service funds are included in governmental act ivit ies in the statement of act ivit ies because they pr imari ly serve governmen tal act ivit ies of the County.

Other Full Accrual Adjustments Some revenues and expenses reported in the statement of act ivit ies do not represent a change in current f inancial resources and, therefore, are not reported as revenues and expenditures in the governmental funds. Adjustments to equity relat ing to long -term assets and l iabil i t ies do not require the use of current f inancial resources and, therefore, are not reported as expenditures or revenues in governmental funds.

Note 6 Pollution Remediation Obligations The Roads Divis ion of the County ’s Public Works Department currently has two adjacent parcels of land that may have pol lut ion remediat ion impacts. The Washington State Department of Ecology (DOE) has given concurrence that no further remediat ion is needed on a port ion of the property. However, at this t ime, remediat ion efforts are currently progressing on the remaining port ion. This is being coordinated with DOE. There is current ly no est imate for, nor means to est imate, the range of p ossible costs unti l DOE’s review is complete.

Capital Related Expenditures 62,800,893$ Depreciation Expense (58,781,923)

Subtotal 4,018,970 Contributions and Donations (Capital Donations) 89,766,805 Gain/Loss on Capital Assets (3,736,081) Equity Adjustment in Joint Venture (943,419)

Subtotal 85,087,305 Increase (Decrease) in Net Position 89,106,275$

Internal Service Funds Total Operating Revenues 134,432,794$ Internal Service Funds Total Operating Expenses (125,662,617) Internal Service Funds Total Non-Operating Revenue/Expenses 2,703,901 Internal Service Funds Net Transfers & Contributions (1,738,963) Internal Service Funds Net Income (Loss) 9,735,115$

Recognize Unavailable Property Taxes 1,115,269$ Penalties and Interest on Property Taxes 15,780 Recognize Unavailable Revenue 8,696,657 Adjust Liability for Compensated Absences (924,332) Current portion of Other Governmental 800 MHz debt (382,381) Items related to Pensions 18,063,041 Court Fines (191,950) Other full accrual adjustments 468,952 Total Increase (Decrease) to Net Position 26,861,036$

Notes to the Financial Statements December 31, 2019 In 2018, the County commenced pollut ion remediat ion act ivit ies involving both asbestos abatement and removal and Polychlorinated Biphenyl (PCB) removal and disposal as part of their ongoing remodel pro ject of the County ’s courthouse located at 3000 Rockefeller Avenue in Everett . The est imated pol lut ion remediat ion l iabi l i ty at December 31, 2019 is $2.4 mil l ion. To determine the County ’s remediat ion l iabi l i ty, project est imates were used from engineers and other remediat ion specialists in accordance with al l federal, state, and local laws. This l iabi l i ty is an est imate and is subject to changes result ing f rom price increases or reductions, technology, or changes in appl icable laws and regulat ions. There are no est imated material recoveries at this t ime that wi l l reduce the amount of these obl igat ions. Note 7 Related Party Transactions Three members of the Snohomish County Counci l have been appointed per RCW 27.15.030 as the governing body of our local l i brary capital faci l i ty areas (LCFA) . The legislature found that it is in the interests of the people of the state of Washington to be able to establ ish l ibrary capital faci l i ty areas as quasi -municipal corporat ions and independent taxing units exist ing within the boundar ies of the county for the purpose of f inancing the construct ion of capital l ibrary faci l i t ies. In addit ion to the LCFAs, the County Counci l and Execut ive are appointed to numerous boards and committees. At this t ime those appointed board members do not bel ieve they have the abi l i ty to be the pr imary inf luence in the management or operat ing pol ic ies of the organizations. For example, Snohomish County represents 5 out of 11 County Author it ies Execut ive Committee members on the North Sound Regional Support Network dba North Sound Mental Health Admin istrat ion. Snohomish County entered into an interlocal agreement with Snohomish County Publ ic Facil i t ies Distr ict (PFD) for accounting services including preparation of f inancial statements. Pursuant to this agreement, the PFD pays the County an annual fee of $24 thousand. The County may also receive reimbursements for various minor miscellaneous expenses. Note 8 Tax Abatements As of December 31, 2019, the County has no direct tax abatement agreements. The County is affected indirect ly by several Sta te tax abatement agreements per Washington State RCW. The State property tax abatements that affect the County are:


The State sales, use and B&O tax abatements that affect the County are:

Note 9 Subsequent Events 9.A COVID-19 In February of 2020, the Governor of the State of Washington declared a state of emergency in response to the spread of a deadly new virus. In the weeks following the declarat ion, precautionary measures were ordered to stop the spread of the virus. Those measures included closing schools, colleges and universit ies, cancel l ing public events, prohibit ing publ ic and private gather ings, and requir ing people to stay home unless they were leaving for an essent ial function. In June of 2020, the county was author ized to move to “phase two” of the Governor ’s re-opening plan. That plan al lowed some businesses to re-open provided they meet certain cr iter ia. In Apri l of 2020, the County Execut ive appl ied for a CARES grant to help offset the costs of addressing the publ ic health emergency. On Apr i l 23, 2020, the county received a

State RCW PurposeAmount of Taxes Abated for

Snohomish County84.14.020 Multi-Unit Urban housing exemption 144,443$ 84.36.010 (2) Tribal property used for Economic Development Purposes 334,502 84.36.020 (2) Non-profit churches, parsonages, and convents 1,736 84.36.560 (4) Future nonprofit low-income housing 33,308 39.104 Local Revitalization Financing 45,423

559,412$

State RCW PurposeAmount of Taxes Abated for

Snohomish County82.63 High Technology Sales and Use Tax Deferral 16,959$ *

82.63 High Technology Sales and Use Tax Deferral - PTBA See note A below82.75 Biotechnology and Medical Device Manufacturing Sales

and Use Tax Deferral8,220 *

82.08.975/ 82.12.975 Exemption for Computer Hardware, Software and Peripherals

65,868 *

82.08.975/ 82.12.975 Exemption for Computer Hardware, Software and Peripherals - PTBA

See note A below

82.08.980/ 82.12.980 Manufacture Commercial Airplane Fuselages, or wings of Commercial Airplanes

See note A below

91,047$

* 2019 FY State DOR Estimates

A - The State has identified these abatements applying to Snohomish County, but because there are fewer than 3 taxpayers that received these deferral/exemption categories, the State is not legally allowed to disclose specific information.

Notes to the Financial Statements December 31, 2019 $143 mil l ion CARES grant f rom the Federal Department of Treasury. The grant may be used to pay for virus related expenditures, but cannot be used to supplant previously budgeted expenditures or replace re venues lost as a result of the precautionary measures ordered by the Governor of the State of Washington. In Apri l of 2020, the county counci l issued an order for a temporary hir ing f reeze and furloughs. Addit ionally, al l departments and off ices have b een advised to t ight ly control expenditures deemed non-essent ial to ongoing operat ions. Other measures, including lay-offs and curtai lment of certain programs, are being considered for implementat ion as addit ional information regarding the f inancial impac ts of this publ ic health emergency become avai lable. The length of t ime the Governor ’s measures wil l be in place, and the full extent of the f inancial impact on the county are unknown at this t ime. 9.B Corrections Guild Union Contract A union labor contract with the county ’s Correct ions Guild was in negotiat ion at the end of 2019. The contract was sett led in Apr i l 2020. The agreement results in retroactive wage payments currently est imated to be $1.8 mil l ion to be paid f rom the General Fund in June 2020.

Required Supplementary Information December 31, 2019

Schedule of Proport ionate Share of the Col lect ive Net Pension Liabi l i ty As of June 30 Measurement Date

Notes to Schedule: Covered payrol l i s t he payrol l on which cont r i but ion to a pens ion p lan are based. The RSI schedule for Propor t ionate Share of the Col lec t ive Net Pens ion L iabi l i t y wi l l be bui l t prospect i vel y

unt i l i t conta ins ten years of data.

Public Employee's Retirement System (PERS) Plan 1 2019 2018 2017 2016 2015 2014County's proportion of the net pension liability (asset) 1.36% 1.39% 1.38% 1.42% 1.45% 1.50%County's proportionate share of the net pension liability (asset) $ 52,138,207 $ 62,009,453 $ 65,640,277 76,063,753$ 75,995,317$ 75,662,294$ County's covered payroll 187,710,633$ $179,977,979 $171,615,203 165,779,406$ 161,898,566$ 160,440,861$

County's proportionate share of the net pension liability as a percentage of covered payroll 27.78% 34.45% 38.25% 45.88% 46.94% 47.16%Plan fiduciary net position as a percentage of the total pension liability 67.12% 63.22% 61.24% 57.03% 59.10% 61.19%

Public Employee's Retirement System (PERS) Plan 2/3County's proportion of the net pension liability (asset) 1.54% 1.55% 1.55% 1.57% 1.62% 1.65%County's proportionate share of the net pension liability (asset) $ 14,914,702 $ 26,397,172 $ 53,869,337 79,203,889$ 57,848,829$ 33,426,580$ County's covered payroll 167,157,028$ $160,169,512 $152,223,707 147,738,165$ 143,614,259$ 142,065,482$

County's proportionate share of the net pension liability as a percentage of covered payroll 8.92% 16.48% 35.39% 53.61% 40.28% 23.53%Plan fiduciary net position as a percentage of the total pension liability 97.77% 95.77% 90.97% 85.82% 89.20% 93.29%

Public Safety Employee's Retirement System (PSERS) Plan 2County's proportion of the net pension liability (asset) 4.03% 4.63% 4.35% 4.44% 4.97% 5.17%County's proportionate share of the net pension liability (asset) $ (523,517) $ 57,382 $ 852,592 1,887,855$ 907,347$ (748,935)$ County's covered payroll 18,632,770$ $ 17,259,906 $ 16,409,680 14,454,705$ 14,594,968$ 13,914,281$

County's proportionate share of the net pension liability (asset) as a percentage of covered payroll -2.81% 0.33% 5.20% 13.06% 6.22% -5.38%Plan fiduciary net position as a percentage of the total pension liability 101.85% 99.79% 96.26% 90.41% 95.08% 105.01%

Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plan 1County's proportion of the net pension asset 0.14% 0.14% 0.14% 0.14% 0.14% 0.14%County's proportionate share of the net pension liability (asset) $ (2,722,900) $ (2,465,887) $ (2,118,130) (1,452,168)$ (1,716,536)$ (1,680,686)$ State's proportionate share of the net pension liability (asset) associated with the employer $(18,417,630) $(16,679,201) $(14,326,980) (9,822,425)$ (11,610,607)$ (11,368,118)$

TOTAL $(21,140,530) $(19,145,088) $(16,445,110) (11,274,593)$ (13,327,143)$ (13,048,804)$

County's covered payroll 9,388$ $ 42,247 $ 51,635 -$ 20,265$ 165,757$ County's proportionate share of the net pension liability as a percentage of covered payroll -29004.05% -5836.83% -4102.12% 0.00% -8470.45% -1013.95%Plan fiduciary net position as a percentage of the total pension liability 148.78% 144.42% 135.96% 123.74% 127.36% 126.91%

Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plan 2County's proportion of the net pension asset 0.89% 0.87% 0.93% 0.88% 0.90% 0.92%County's proportionate share of the net pension liability (asset) $(20,599,988) $(17,637,275) $(12,949,182) (5,114,360)$ (9,279,708)$ (12,204,854)$ State's proportionate share of the net pension liability (asset) associated with the employer $(13,490,232) $(11,419,803) $ (8,399,892) (3,334,272)$ (6,135,765)$ (7,974,418)$

TOTAL $(34,090,220) $(29,057,078) $(21,349,074) (8,448,632)$ (15,415,473)$ (20,179,272)$

County's covered payroll 31,359,702$ $ 28,809,114 29,241,264$ 26,645,193$ 26,265,067$ 25,621,820$ County's proportionate share of the net pension liability as a percentage of covered payroll -65.69% -61.22% -44.28% -19.19% -35.33% -47.63%Plan fiduciary net position as a percentage of the total pension liability 119.43% 118.50% 113.36% 106.04% 111.67% 116.75%


Schedule of Employer Contr ibut ions For the Year Ended December 31

Notes to Schedule:

Covered payro l l is the payro l l on which cont r ibut ion to a pens ion p lan are based. The RSI schedule for Employer Contr ibut ion wi l l be bui l t prospect ive ly unt i l i t conta ins ten years of

data.

Public Employee's Retirement System (PERS) Plan 1 2019 2018 2017 2016 2015 2014Statutorily or contractually required contributions 9,599,176$ 9,493,124$ 8,824,960$ 8,282,395$ 7,287,628$ 6,768,308$ Contributions in relation to the statutorily or contractually required contributions $ (9,599,176) (9,493,124) (8,824,960) (8,282,395) (7,287,628) (6,768,308) Contribution deficiency (excess) -$ -$ -$ -$ -$ -$ Covered payroll 191,520,532$ 184,213,231$ 176,137,494$ 169,194,388$ 161,386,889$ 162,686,046$ Contributions as a percentage of covered payroll 5.01% 5.15% 5.01% 4.90% 4.52% 4.16%

Public Employee's Retirement System (PERS) Plan 2/3Statutorily or contractually required contributions 13,102,168$ 12,317,780$ 10,716,957$ 9,669,931$ 8,336,907$ 7,463,164 Contributions in relation to the statutorily or contractually required contributions $ (13,102,168) (12,317,780) (10,716,957) (9,669,931) (8,336,907) (7,463,164) Contribution deficiency (excess) -$ -$ -$ -$ -$ - Covered payroll 169,651,711$ 164,246,021$ 156,044,149$ 150,869,349$ 143,388,626$ 144,210,093 Contributions as a percentage of covered payroll 7.72% 7.50% 6.87% 6.41% 5.81% 5.18%

Public Safety Employee's Retirement System (PSERS) Plan 2Statutorily or contractually required contributions 1,438,506$ 1,215,714$ 1,151,285$ 1,016,186$ 959,178$ 944,721 Contributions in relation to the statutorily or contractually required contributions $ (1,438,506) (1,215,714) (1,151,285) (1,016,186) (959,178) (944,721) Contribution deficiency (excess) -$ -$ -$ -$ -$ -$ Covered payroll 20,153,302$ 17,746,645$ 17,280,592$ 15,010,156$ 14,417,157$ 14,501,390 Contributions as a percentage of covered payroll 7.14% 6.85% 6.66% 6.77% 6.65% 6.51%

Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plan 1Statutorily or contractually required contributions -$ -$ -$ -$ -$ 181Contributions in relation to the statutorily or contractually required contributions - - - - - -181Contribution deficiency (excess) -$ -$ -$ -$ -$ Covered payroll -$ 9,388$ 93,883$ -$ -$ 100,374Contributions as a percentage of covered payroll 0.00% 0.00% 0.00% 0.00% 0.00% 0.18%

Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plan 2Statutorily or contractually required contributions 1,714,590$ 1,570,411$ 1,552,239$ 1,388,109$ 1,385,668$ 1,350,939 Contributions in relation to the statutorily or contractually required contributions $ (1,714,590) (1,570,411) (1,552,239) (1,388,109) (1,385,668) (1,350,939) Contribution deficiency (excess) -$ -$ -$ -$ -$ -Covered payroll 32,982,211$ 29,912,605$ 30,172,900$ 26,541,262$ 26,494,598$ 25,830,473 Contributions as a percentage of covered payroll 5.20% 5.25% 5.14% 5.23% 5.23% 5.23%


Schedule of Changes in Total OPEB Liabil i ty and Related Ratios For the Year Ended December 31

Notes to Schedule:

No assets are accumulated in a t rust that meets the cr i ter ia in paragraph 4 of GASB 75. There is no to ta l covered payro l l dur ing the f isca l year because there are no act ive employees . The only change in assumpt ion was to re f lect a change in the d iscoun t ra te. See note 4.A in the

notes to the f inancia l s ta tements for addi t ional in format ion. The RSI schedule for OPEB wi l l be bui l t prospect ive ly unt i l i t conta ins ten years of data.

Law Enforcement Officers' and Fire Fighters'Retirement System(LEOFF) Plan 1 2019 2018Total OPEB Liability - beginning $ 11,071,740 $ 11,922,980 Service cost - - Interest 437,087 396,982 Changes of benefit terms - - Differences between expected and actual experience - - Changes of assumptions 888,981 (465,406) Benefit payments (Employer Contributions) (816,693) (782,816) Other changes - - Total OPEB Liability - ending $ 11,581,115 $ 11,071,740

Covered-employee payroll - -

Total OPEB liability as a % of covered payroll 0.00% 0.00%

2019 Schedule of Expenditures of Federal Awards

From Pass-Through Awards

From Direct Awards Total

FOOD AND NUTRITION SERVICE, AGRICULTURE, DEPARTMENT OF (via Office of Superintendent of Public Instruction)

School Breakfast Program 10.553 660723 3,520 - 3,520 -


School Breakfast Program 10.553 159863 7,813 - 7,813 -

11,333 - 11,333 -FOOD AND NUTRITION SERVICE, AGRICULTURE, DEPARTMENT OF (via Office of Superintendent of Public Instruction)

National School Lunch Program

10.555 660723 6,563 - 6,563 -


National School Lunch Program

10.555 159863 14,086 - 14,086 -

20,649 - 20,649 -31,982 - 31,982 -

FOOD AND NUTRITION SERVICE, AGRICULTURE, DEPARTMENT OF (via WA State Department of Social and Health Services)

Senior Farmers Market Nutrition Program

10.576 1869-31859 18,387 - 18,387 18,067

FOREST SERVICE, AGRICULTURE, DEPARTMENT OF (via WA State Treasurer)

Schools and Roads - Grants to States

10.665 N/A 276,678 - 276,678 -

FOREST SERVICE, AGRICULTURE, DEPARTMENT OF (via WA State Treasurer)

Schools and Roads - Grants to States

10.665 N/A 45,570 - 45,570 -

322,248 - 322,248 -

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, COMMERCE, DEPARTMENT OF (via WA State Recreation and Conservation Office)

Pacific Coast Salmon Recovery Pacific Salmon Treaty Program

11.438 15-1110 95,374 - 95,374 -


Habitat Conservation 11.463 16-1559 300,000 - 300,000 -


Habitat Conservation 11.463 16-2152 85,847 - 85,847 -

385,847 - 385,847 -

ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT, HOUSING AND URBAN DEVELOPMENT, DEPARTMENT OF

Community Development Block Grants/Entitlement Grants

14.218 B-14-UC-53-0003 - 464,660 464,660 463,147



14.218 B-14-UC-53-2003 DII

- 102,905 102,905 -



14.218 B-15-UC-53-0003 - 485,107 485,107 483,565



14.218 B-16-UC-53-0003 - 106,448 106,448 100,888



14.218 B-17-UC-53-0003 - 407,095 407,095 392,626



14.218 B-18-UC-53-0003 - 1,440,289 1,440,289 1,183,038



14.218 B-19-UC-53-0003 - 908,490 908,490 634,469

- 3,914,994 3,914,994 3,257,733

Child Nutrition Cluster

Total CFDA 10.553:

Federal Agency (Pass-Through Agency) Federal Program

CFDA Number

Other Award Number

Expenditures

Total CFDA 10.555: Total Child Nutrition Cluster:

Forest Service Schools and Roads Cluster

Total Forest Service Schools and Roads Cluster:

Total CFDA 11.463: CDBG - Entitlement Grants Cluster

Total CDBG - Entitlement Grants Cluster:

Passed through to Subrecipients

The accompanying notes to the Schedule of Federal Awards is an integral part of this statement


ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT, HOUSING AND URBAN DEVELOPMENT, DEPARTMENT OF (via WA State Department of Commerce)

Emergency Solutions Grant Program

14.231 17-46107-010 279,533 - 279,533 271,906

ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT, HOUSING AND URBAN DEVELOPMENT, DEPARTMENT OF (via WA State Department of Commerce)


14.231 19-46107-010 205,908 - 205,908 205,908



14.231 E-17-UC-53-0003 - 21,886 21,886 10,877



14.231 E-18-UC-53-0003 - 182,921 182,921 158,079



14.231 E-19-UC-53-0003 - 123,920 123,920 90,159

485,441 328,727 814,168 736,929


Home Investment Partnerships Program

14.239 M-14-DC-53-0201 - 346,895 346,895 346,895



14.239 M-15-DC-53-0201 - 265,788 265,788 265,788



14.239 M-16-DC-53-0201 - 2,793 2,793 2,793



14.239 M-17-DC-53-0201 - 69,015 69,015 69,015



14.239 M-18-DC-53-0201 - 1,079,705 1,079,705 1,000,513



14.239 M-19-DC-53-0201 - 208,614 208,614 86,104

- 1,972,810 1,972,810 1,771,108


Continuum of Care Program

14.267 WA0000U0T041703

- 3,434,706 3,434,706 3,081,096



14.267 WA0000U0T041804

- 4,437,698 4,437,698 4,060,489



14.267 WA9002U0T041700

- 22,621 22,621 22,621



14.267 WA9003U0T041800

- 116,671 116,671 116,671

- 8,011,696 8,011,696 7,280,877


Youth Homelessness Demonstration Program

14.276 WA9999Y0T041700

- 33,247 33,247 33,247

OFFICE OF JUSTICE PROGRAMS, JUSTICE, DEPARTMENT OF (via WA State Department of Commerce)

Crime Victim Assistance 16.575 S20-31102-528 2019

40,221 - 40,221 -


Crime Victim Assistance 16.575 S19-31102-528 2019

43,083 - 43,083 -

83,304 - 83,304 -Total CFDA 16.575:

Total CFDA 14.239:

Total CFDA 14.231:

Total CFDA 14.267:


OFFICE ON VIOLENCE AGAINST WOMEN (OVW), JUSTICE, DEPARTMENT OF (via Everett Police Department)

Violence Against Women Formula Grants

16.588 DV STOP 2019 4,036 - 4,036 -

OFFICE ON VIOLENCE AGAINST WOMEN (OVW), JUSTICE, DEPARTMENT OF (via WA State Department of Commerce)

Violence Against Women Formula Grants

16.588 F18-31103-035 32,170 - 32,170 -

36,206 - 36,206 -

OFFICE OF JUSTICE PROGRAMS, JUSTICE, DEPARTMENT OF

State Criminal Alien Assistance Program

16.606 2019-H0122-WA-AP

- 87,848 87,848 -


Edward Byrne Memorial Justice Assistance Grant Program

16.738 F17-31440-012 80,556 - 80,556 -

OFFICE OF JUSTICE PROGRAMS, JUSTICE, DEPARTMENT OF

Edward Byrne Memorial Justice Assistance Grant Program

16.738 2017-DJ-BX-0495 - 11,895 11,895 -

80,556 11,895 92,451 -

FEDERAL AVIATION ADMINISTRATION, TRANSPORTATION, DEPARTMENT OF

Airport Improvement Program

20.106 3-53-0028-057 - 606,073 606,073 -

FEDERAL HIGHWAY ADMINISTRATION, TRANSPORTATION, DEPARTMENT OF (via WA State Department of Transportation)

Highway Planning and Construction

20.205 NHPP-2586(004) 128,298 - 128,298 -



20.205 BROS-2031(111) 3,052 - 3,052 -



20.205 BROS-2031(113) 3,400,999 - 3,400,999 -



20.205 BRS-V310 (002) 9,182 - 9,182 -



20.205 CM-9931(013) 3,205 - 3,205 -



20.205 CM-9931(018) 194,892 - 194,892 -



20.205 ER-0701(063) 56,319 - 56,319 -



20.205 STPUL-2031(114)

549,833 - 549,833 -



20.205 STPUL-2575(003)

3,262,371 - 3,262,371 -



20.205 STPUL-2576(006)

3,641 - 3,641 -



20.205 STPUL-9931(019)

44,702 - 44,702 -



20.205 STPR-31E1(001) 106,219 - 106,219 -



20.205 HSIP-2602(001) 337,437 - 337,437 -



20.205 HSIP-2553(004) 231,723 - 231,723 -



20.205 RAIL-2546(001) 412,620 - 412,620 -

8,744,493 - 8,744,493 -

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, TRANSPORTATION, DEPARTMENT OF (via WA State Traffic Safety Commission)

State and Community Highway Safety

20.600 2019 Traffic 7,260 - 7,260 -

Total CFDA 16.738:

Highway Planning and Construction Cluster

Total Highway Planning and Construction Cluster: Highway Safety Cluster

Total CFDA 16.588:




20.600 Distracted Driving 18-19

3,274 - 3,274 -



20.600 TZ Manager 2017-2020

74,555 - 74,555 -



20.600 18-19 TRP 8,032 - 8,032 -



20.600 Impaired Driving 19-20

4,925 - 4,925 -



20.600 2019-AG-2890 70,664 - 70,664 -

168,710 - 168,710 -NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, TRANSPORTATION, DEPARTMENT OF (via WA State Traffic Safety Commission)

National Priority Safety Programs

20.616 Seat Belt Emphasis 18-19

2,432 - 2,432 -



20.616 2020-AG-3654 24,656 - 24,656 -



20.616 18-19 TZT 8,323 - 8,323 -



20.616 18-19 PSC 9,121 - 9,121 -



20.616 19-20 PSC 2,252 - 2,252 -

46,784 - 46,784 -215,494 - 215,494 -


Minimum Penalties for Repeat Offenders for Driving While Intoxicated

20.608 2019-AG-2890 70,664 - 70,664 -



20.608 2020-AG-3654 24,656 - 24,656 -



20.608 Motorcycle 18-19 4,292 - 4,292 -

99,612 - 99,612 -

ENVIRONMENTAL PROTECTION AGENCY, ENVIRONMENTAL PROTECTION AGENCY (via WA State Department of Health)

Puget Sound Action Agenda: Technical Investigations and Implementation Assistance Program

66.123 GVL22513 (N22513)

104,002 - 104,002 -

ENVIRONMENTAL PROTECTION AGENCY, ENVIRONMENTAL PROTECTION AGENCY (via WA State Department of Health)


66.123 GVL23067 139,074 - 139,074 -

ENVIRONMENTAL PROTECTION AGENCY, ENVIRONMENTAL PROTECTION AGENCY (via WA Dept of Fish & Wildlife)


66.123 17-08325 17,163 - 17,163 -



66.123 19-12953 12,186 - 12,186 -

Total CFDA 20.616:

Total CFDA 20.608:

Total Highway Safety Cluster:

Total CFDA 20.600:




66.123 19-12959 79,004 - 79,004 -

351,429 - 351,429 -

ENVIRONMENTAL PROTECTION AGENCY, ENVIRONMENTAL PROTECTION AGENCY (via Puget Sound Partnership)

National Estuary Program 66.456 2019-15 40,562 - 40,562 -

ENVIRONMENTAL PROTECTION AGENCY, ENVIRONMENTAL PROTECTION AGENCY (via Puget Sound Partnership)

National Estuary Program 66.456 2020-28 15,128 - 15,128 -

ENVIRONMENTAL PROTECTION AGENCY, ENVIRONMENTAL PROTECTION AGENCY (via WA Dept of Ecology)

National Estuary Program 66.456 SEANWS-2018-SnCoPW-00005

42,600 - 42,600 -

98,290 - 98,290 -

ENERGY, DEPARTMENT OF, ENERGY, DEPARTMENT OF (via WA State Department of Commerce)

Weatherization Assistance for Low-Income Persons

81.042 F18-53103-422 59,595 - 59,595 -


Weatherization Assistance for Low-Income Persons

81.042 F19-53103-422 62,389 - 62,389 -

121,984 - 121,984 -


BPA Weatherization Program

81.U01 F17-53104-422 109,824 - 109,824 -


BPA Weatherization Program

81.U01 F19-53104-422 9,064 - 9,064 -

118,888 - 118,888 -

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES, EDUCATION, DEPARTMENT OF (via WA State Department of Children, Youth, and Families)

Special Education-Grants for Infants and Families

84.181 18-1021-2 399,062 - 399,062 217,175

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES, EDUCATION, DEPARTMENT OF (via WA State Department of Children, Youth, and Families)

Special Education-Grants for Infants and Families

84.181 20-1120 203,044 - 203,044 33,307

602,106 - 602,106 250,482

IMMED OFFICE OF THE SECRETARY OF HEALTH AND HUMAN SERVICES, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via National Association of County and City Health Officials)

Medical Reserve Corps Small Grant Program

93.008 MRC-17-0174 9,330 - 9,330 -

ADMINISTRATION FOR COMMUNITY LIVING (ACL), HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via WA State Department of Social and Health Services)

Special Programs for the Aging, Title VII, Chapter 3, Programs for Prevention of Elder Abuse, Neglect, and Exploitation

93.041 1969-41505 1,162 - 1,162 1,162


Special Programs for the Aging, Title III, Part D, Disease Prevention and Health Promotion Services

93.043 1869-21978 3,038 - 3,038 3,038


Special Programs for the Aging, Title III, Part D, Disease Prevention and Health Promotion Services

93.043 1969-41505 42,609 - 42,609 42,609

45,647 - 45,647 45,647


Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers

93.044 1869-21978 173,742 - 173,742 122,466

Total CFDA 66.456:

Total CFDA 81.042:

Total CFDA 81.U01:

Total CFDA 84.181:

Total CFDA 93.043: Aging Cluster

Total CFDA 66.123:




93.044 1869-21978 126,942 - 126,942 -



93.044 1969-41505 672,511 - 672,511 545,727

973,195 - 973,195 668,193ADMINISTRATION FOR COMMUNITY LIVING (ACL), HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via WA State Department of Social and Health Services)

Special Programs for the Aging, Title III, Part C, Nutrition Services

93.045 1869-21978 31,575 - 31,575 28,433



93.045 1969-41505 457,734 - 457,734 416,567



93.045 1869-21978 12,527 - 12,527 11,263



93.045 1969-41505 454,120 - 454,120 412,895

955,956 - 955,956 869,158ADMINISTRATION FOR COMMUNITY LIVING (ACL), HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via WA State Department of Social and Health Services)

Nutrition Services Incentive Program

93.053 1869-21978 128 - 128 128


Nutrition Services Incentive Program

93.053 1969-41505 147,425 - 147,425 147,425

147,553 - 147,553 147,5532,076,704 - 2,076,704 1,684,904


Special Programs for the Aging, Title IV, and Title II, Discretionary Projects

93.048 1869-46640 13,933 - 13,933 12,901


Special Programs for the Aging, Title IV, and Title II, Discretionary Projects

93.048 1969-63869 7,296 - 7,296 6,709

21,229 - 21,229 19,610


National Family Caregiver Support, Title III, Part E

93.052 1869-21978 66,869 - 66,869 59,317


National Family Caregiver Support, Title III, Part E

93.052 1969-41505 181,644 - 181,644 154,782

248,513 - 248,513 214,099


Medicare Enrollment Assistance Program

93.071 1869-42133 15,630 - 15,630 15,630

CENTER FOR DISEASE CONTROL AND PREVENTION, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via Washington State Department of Health)

Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response

93.354 GVS24186 23,975 - 23,975 -

CENTER FOR DISEASE CONTROL AND PREVENTION, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via Snohomish Health District)

Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response

93.354 CLH18261 87,804 - 87,804 -

Total CFDA 93.053: Total Aging Cluster:

Total CFDA 93.048:

Total CFDA 93.052:

Total CFDA 93.044:

Total CFDA 93.045:


111,779 - 111,779 -

ADMINISTRATION FOR CHILDREN AND FAMILIES, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via WA State Department of Social and Health Services)

Child Support Enforcement

93.563 2110-80559 774,919 - 774,919 -



93.563 2110-80559 141,033 - 141,033 -



93.563 2110-80559 2,351,570 - 2,351,570 -



93.563 1663-67354 94,263 - 94,263 -

3,361,785 - 3,361,785 -

ADMINISTRATION FOR CHILDREN AND FAMILIES, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via WA State Department of Commerce)

Low-Income Home Energy Assistance

93.568 18-32606-081 678,726 - 678,726 -



93.568 19-32606-081 1,615,432 - 1,615,432 -



93.568 F17-53101-422 524,418 - 524,418 -



93.568 F19-53101-422 94,478 - 94,478 -

2,913,054 - 2,913,054 -


Community Services Block Grant

93.569 F18-32101-026 380,859 - 380,859 -


Community Services Block Grant

93.569 F19-32101-026 265,827 - 265,827 -

646,686 - 646,686 -

ADMINISTRATION FOR CHILDREN AND FAMILIES, HEALTH AND HUMAN SERVICES, DEPARTMENT OF

Head Start 93.600 10CH0226-05-00 - 1,226,027 1,226,027 -

CENTERS FOR MEDICARE AND MEDICAID SERVICES, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via WA State Department of Social and Health Services)

Medical Assistance Program

93.778 1869-31859 106,065 - 106,065 18,762



93.778 1969-53073 124,228 - 124,228 22,174



93.778 1869-31859 1,744,026 - 1,744,026 -



93.778 1969-53073 1,825,082 - 1,825,082 -

3,799,401 - 3,799,401 40,936


Money Follows the Person Rebalancing Demonstration

93.791 1869-31859 9,140 - 9,140 -


Money Follows the Person Rebalancing Demonstration

93.791 1969-53073 7,246 - 7,246 -

Medicaid Cluster

Total CFDA 93.354:

Total CFDA 93.568:

Total CFDA 93.569:

Total Medicaid Cluster:

Total CFDA 93.563:


16,386 - 16,386 -

SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES ADMINISTRATION, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via North Sound Behavioral Health Organization)

Block Grants for Prevention and Treatment of Substance Abuse

93.959 North Sound BHO - Snohomish County-SABG-19

46,983 - 46,983 -

SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES ADMINISTRATION, HEALTH AND HUMAN SERVICES, DEPARTMENT OF (via North Sound Administrative Services Organization)

Block Grants for Prevention and Treatment of Substance Abuse

93.959 North Sound BH-ASO-Snohomish County-ICCN-19

47,866 - 47,866 -

94,849 - 94,849 -

EXECUTIVE OFFICE OF THE PRESIDENT, EXECUTIVE OFFICE OF THE PRESIDENT (via Educational Service District 105)

High Intensity Drug Trafficking Areas Program

95.001 9001600050 12,493 - 12,493 -



95.001 9001700067 37,728 - 37,728 -



95.001 9001700079-01 44,000 - 44,000 44,000

EXECUTIVE OFFICE OF THE PRESIDENT, EXECUTIVE OFFICE OF THE PRESIDENT


95.001 G18NW0001A - 420,859 420,859 -

EXECUTIVE OFFICE OF THE PRESIDENT, EXECUTIVE OFFICE OF THE PRESIDENT


95.001 G19NW0001A - 224,892 224,892 -

94,221 645,751 739,972 44,000

U.S. COAST GUARD, HOMELAND SECURITY, DEPARTMENT OF (via WA State Parks and Recreation Commission)

Boating Safety Financial Assistance

97.012 2019 Grant 24,407 - 24,407 -

FEDERAL EMERGENCY MANAGEMENT AGENCY, HOMELAND SECURITY, DEPARTMENT OF (via WA State Military Department)

Flood Mitigation Assistance

97.029 E16-223 5,906 - 5,906 -



97.029 E19-130 2,517 - 2,517 -



97.029 E20-185 12,265 - 12,265 -

20,688 - 20,688 -


Disaster Grants - Public Assistance (Presidentially Declared Disasters)

97.036 4418-DR-WA 4,148 - 4,148 -


Disaster Grants - Public Assistance (Presidentially Declared Disasters)

97.036 D16-465 FEMA 4242-DR-WA

7,223 - 7,223 -

11,371 - 11,371 -


Hazard Mitigation Grant 97.039 D16-011 3,786 - 3,786 -





439,514 - 439,514 -


Emergency Management Performance Grants

97.042 E19-156 254,325 - 254,325 -

Total CFDA 97.036:

Total CFDA 97.039:

Total CFDA 97.029:

Total CFDA 93.959:

Total CFDA 93.791:

Total CFDA 95.001:



Emergency Management Performance Grants

97.042 E20-135 53,189 - 53,189 -

307,514 - 307,514 -


Pre-Disaster Mitigation 97.047 E19-171 58,634 - 58,634 -


Homeland Security Grant Program

97.067 E18-174 303,129 - 303,129 -



97.067 E18-169 440,237 - 440,237 198,624



97.067 E19-089 54,689 - 54,689 42,080



97.067 E19-118 94,343 - 94,343 -

892,398 - 892,398 240,704

FEDERAL EMERGENCY MANAGEMENT AGENCY, HOMELAND SECURITY, DEPARTMENT OF

Regional Catastrophic Preparedness Grant Program (RCPGP)

97.111 EMS-2019-GR00005-S01

- 28,617 28,617 -

FEDERAL EMERGENCY MANAGEMENT AGENCY, HOMELAND SECURITY, DEPARTMENT OF (via King County Office of Emergency Management)

Preparing for Emerging Threats and Hazards

97.133 CCTA 19 36,211 - 36,211 -

27,138,754 16,867,685 44,006,439 15,655,135

NOTE 3 – INDIRECT COST RATEFor 2019, Snohomish County has elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Total CFDA 97.067:

Total Federal Awards Expended:

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

NOTE 1 - BASIS OF ACCOUNTINGThe Schedule of Expenditures of Federal Awards is prepared on the same basis of accounting as the County's financial statements. The County uses the modified accrual basis for its governmental fund types and the accrual basis of accounting for the proprietary and fiduciary fund types.

NOTE 2 - PROGRAM COSTSThe amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the County’s portion, are more than shown. Such expenditures are recognized following, as applicable, either the cost principles in the OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Total CFDA 97.042:


ABOUT THE STATE AUDITOR’S OFFICE

The State Auditor’s Office is established in the state’s Constitution and is part of the executive

branch of state government. The State Auditor is elected by the citizens of Washington and serves

four-year terms.

We work with our audit clients and citizens to achieve our vision of government that works for

citizens, by helping governments work better, cost less, deliver higher value, and earn greater

public trust.

In fulfilling our mission to hold state and local governments accountable for the use of public

resources, we also hold ourselves accountable by continually improving our audit quality and

operational efficiency and developing highly engaged and committed employees.

As an elected agency, the State Auditor’s Office has the independence necessary to objectively

perform audits and investigations. Our audits are designed to comply with professional standards

as well as to satisfy the requirements of federal, state, and local laws.

Our audits look at financial information and compliance with state, federal and local laws on the

part of all local governments, including schools, and all state agencies, including institutions of

higher education. In addition, we conduct performance audits of state agencies and local

governments as well as fraud, state whistleblower and citizen hotline investigations.

The results of our work are widely distributed through a variety of reports, which are available on

our website and through our free, electronic subscription service.

We take our role as partners in accountability seriously, and provide training and technical

assistance to governments, and have an extensive quality assurance program.

Contact information for the State Auditor’s Office

Public Records requests [email protected]

Main telephone (564) 999-0950

Toll-free Citizen Hotline (866) 902-3900

Website www.sao.wa.gov

https://www.sao.wa.gov/report-a-concern/how-to-report-a-concern/fraud-program/

https://www.sao.wa.gov/report-a-concern/how-to-report-a-concern/whistleblower-program/

https://www.sao.wa.gov/report-a-concern/how-to-report-a-concern/the-citizen-hotline/

https://www.sao.wa.gov/reports-data/audit-reports/

https://www.sao.wa.gov/about-sao/sign-up-for-news-alerts/

mailto:[email protected]

Snohomish County - SAO Online Services

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