Washington State Auditor’s Office

Financial Statements and Federal Single Audit Report

City of Gold Bar
Snohomish County
Audit Period
January 1, 2012 through December 31, 2012
Report No. 1010604

Issue Date
September 30, 2013

Washington State Auditor
Troy Kelley
September 30, 2013

Mayor and City Council
City of Gold Bar
Gold Bar, Washington

Report on Financial Statements and Federal Single Audit
Please find attached our report on the City of Gold Bar’s financial statements and compliance
with federal laws and regulations.
We are issuing this report in order to provide information on the City’s financial condition.
Sincerely,

TROY KELLEY
STATE AUDITOR

Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (360) 902-0370  TDD Relay (800) 833-6388

Table of Contents
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
Federal Summary ...................................................................................................................... 1
Schedule of Federal Audit Findings and Questioned Costs ........................................................ 3
Status of Prior Audit Findings ..................................................................................................... 6
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 ..................................................................... 7
Independent Auditor’s Report on Compliance For Each Major Federal Program and on
Internal Control Over Compliance in Accordance with OMB Circular A-133 ............................... 9
Independent Auditor’s Report on Financial Statements .............................................................12
Financial Section.......................................................................................................................15

Federal Summary
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
The results of our audit of the City of Gold Bar are summarized below in accordance with U.S.
Office of Management and Budget Circular A-133.

FINANCIAL STATEMENTS
An unmodified opinion was issued on the financial statements.
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
City.

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:
weaknesses.

We identified deficiencies that we consider to be material

We issued an unmodified opinion on the City’s compliance with requirements applicable to its
major federal program.
We reported a finding that is required to be disclosed under section 510(a) of OMB
Circular A-133.

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Washington State Auditor's Office
1

Identification of Major Programs:
The following was a major program during the period under audit:
CFDA No.
20.205

Program Title
Highway Planning and Construction Cluster - Highway Planning and
Construction

The dollar threshold used to distinguish between Type A and Type B programs, as prescribed
by OMB Circular A-133, was $300,000.
The City did not qualify as a low-risk auditee under OMB Circular A-133.

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Washington State Auditor's Office
2

Schedule of Federal Audit Findings and
Questioned Costs
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
1. The City’s internal controls were inadequate to ensure compliance with
requirements of its Highway Planning and Construction Grant.
CFDA Number and Title:
Federal Grantor Name:
Federal Award/Contract Number:
Pass-through Entity Name:
Pass-through Award/Contract
Number:
Questioned Cost Amount:

20.205 Highway Plannng and Construction
Federal Highway Administration, Department of
Transportation
STPE-00002(8002)
NA
LA7406
$0

Description of Condition
In fiscal year 2012, the City spent $344,265 in Highway Planning and Construction grant
funds. Of this, it paid $221,000 to one vendor for constructing a sidewalk along U.S.
Highway 2. The City relied on its engineering consulting firm to procure this contract
without adequate oversight and monitoring internal controls in place to ensure it met all
federal requirements.

Davis-Bacon Act
Contractors and subcontractors are required to follow labor standards, pay prevailing
wages and submit certified payroll records weekly. The City did not inform the contractor
of these requirements in its contract language. The City also did not obtain weekly
certified payroll records.

Suspension and debarment
Federal grant regulations prohibit the City from contracting with parties suspended or
debarred from doing business with the federal government. For vendor contracts of
$25,000 or more, the City must ensure the vendor is not suspended or debarred. The
City paid $221,000 for services under this contract without verifying the vendor’s status.

Cause of Condition
The City hired an engineering consulting firm to oversee the sidewalk construction
project. The City used a contract form provided by the engineering consultant without
ensuring it contained all of the required federal provisions.
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Washington State Auditor's Office
3

Effect of Condition and Questioned Costs
Without proper controls, the City cannot ensure:

Contractors are paid prevailing wages. This could result in underpaid workers
and the City responsible to pay the higher of state or federal wage to workers on
the project.
Vendors that are paid with federal funds are not suspended or debarred from
participating in federal programs. Any payments made to an ineligible party are
unallowable and would be subject to recovery by the grantor.

Even though the City didn’t include language about prevailing wage requirements in the
contract, we confirmed the engineering consultant obtained certified payrolls from the
vendor. Further, we were able to verify the vendor was not suspended or
debarred. Therefore, we are not questioning these costs.

Recommendation
We recommend the City establish appropriate oversight and monitoring internal controls
to ensure all future projects paid with federal funding meet federal Davis-Bacon Act and
suspension and debarment requirements.

City’s Response
The City complied with all the federal requirements under the Certified Acceptance
authority of WSDOT N.W. Region Local Programs who monitored our consultant and
contractor for compliance. Both the hired consultant, WH Pacific, and the Washington
State Department of Transportation Assistant Local Programs Engineer have stated that
the project met all federal requirements. The City does not have the specific expertise
in-house to state otherwise.

Auditor’s Remarks
We reaffirm our finding. We will follow-up on its status during the next audit.

Applicable Laws and Regulations
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, Subpart C, Section 300 states in part,
The auditee shall:
(b) Maintain internal control over Federal programs that provides
reasonable assurance that the auditee is managing Federal awards in
compliance with laws, regulations, and the provisions of contracts or grant
agreements that could have a material effect on each of its Federal
programs.
(c) Comply with laws, regulations, and the provisions of contracts or grant
agreements related to each of its Federal programs
Title 29, code of federal Regulations, Section 5.5(a) states in part:
§ 5.5 Contract provisions and related matters.

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Washington State Auditor's Office
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(a) The Agency head shall cause or require the contracting officer to insert in
full in any contract in excess of $2,000 which is entered into for the actual
construction, alteration and/or repair, including painting and decorating, of
a public building or public work, or building or work financed in whole or in
part from Federal funds or in accordance with guarantees of a Federal
agency or financed from funds obtained by pledge of any contract of a
Federal agency to make a loan, grant or annual contribution (except
where a different meaning is expressly indicated), and which is subject to
the labor standards provisions of any of the acts listed in §5.1, the
following clauses . . .
(8) Compliance with Davis-Bacon and Related Act requirements. All rulings
and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR
parts 1, 3, and 5 are herein incorporated by reference in this contract.
Title 29, Code of Federal Regulations, Section 3.3, Weekly statement with respect to
payment of wages, states in part:
(b) Each contractor or subcontractor engaged in the construction,
prosecution, completion, or repair of any public building or public work, or
building or work financed in whole or in part by loans or grants from the
United States, shall furnish each week a statement with respect to the
wages paid each of its employees engaged on work covered by this part
3 and part 5 of this chapter during the preceding weekly payroll period.
This statement shall be executed by the contractor or subcontractor or by
an authorized officer or employee of the contractor or subcontractor who
supervises the payment of wages, and shall be on form WH 348,
"Statement of Compliance'', or on an identical form on the back of
WH347, "Payroll (For Contractors Optional Use)'' or on any form with
identical wording.
Title 2, Code of Federal Regulations, Section 180.220, states in part, – Are any
procurement contracts included as covered transactions?:
(b) Specifically, a contract for goods or services is a covered transaction if
any of the following applies:
(1) The contract is awarded by a participant in a nonprocurement transaction
that is covered under Sec. 180.210, and the amount of the contract is
expected to equal or exceed $25,000.
Title 2, Code of Federal Regulations, Section 180.300 – What must I do before I enter
into a covered transaction with another person at the next lower tier?
When you enter into a covered transaction with another person at the
next lower tier, you must verify that the person with whom you intend to
do business is not excluded or disqualified. You do this by:
(a) Checking the EPLS; or
(b) Collecting a certification from that person if allowed by this
rule; or
(c) Adding a clause or condition to the covered transaction with
that person.

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Washington State Auditor's Office
5

Status of Prior Audit Findings
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
The status of findings contained in the prior years’ audit reports of the City of Gold Bar is
provided below:
1.

The City’s financial condition puts it at risk of not being able to meet financial
obligations and maintain current service levels.
Report No. 1008486, dated September 28, 2012
Background
During the prior audit, we communicated financial condition concerns to the City.
Although the City has taken steps to reduce expenses, including a reduced budget for
streets, parks and storm water maintenance, its financial condition continues to decline.
Status
We reviewed this recommendation in the current accountability audit and reissued a
finding in a separately issued accountability audit report.

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Washington State Auditor's Office
6

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
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
Mayor and City Council
City of Gold Bar
Gold Bar, 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 City of Gold Bar, Snohomish County, Washington, as of and for the year ended
December 31, 2012, and the related notes to the financial statements, which collectively
comprise the City’s
financial statements, and have issued our report thereon dated
September 20, 2013. Our report includes information about the status of the City’s financial
condition.

INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit of the financial statements, we considered the City’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 opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s
internal control. Accordingly, we do not express an opinion on the effectiveness of the City’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 City'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.

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Washington State Auditor's Office
7

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.
In addition, we noted certain matters that we have reported to the management of the City in a
separate letter dated September 23, 2012.

COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City’s financial statements are
free from material misstatement, we performed tests of the City’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 City’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 City’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.

TROY KELLEY
STATE AUDITOR
September 20, 2013

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Washington State Auditor's Office
8

Independent Auditor’s Report on Compliance
For Each Major Federal Program and on
Internal Control Over Compliance in
Accordance with OMB Circular A-133
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
Mayor and City Council
City of Gold Bar
Gold Bar, Washington

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM
We have audited the compliance of the City of Gold Bar, Snohomish County, Washington, with
the types of compliance requirements described in the U.S. Office of Management and Budget
(OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on
each of its major federal programs for the year ended December 31, 2012. The City’s major
federal programs are identified in the accompanying Federal Summary.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts
and grants applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’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
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.
Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the City’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 City’s
compliance.

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Washington State Auditor's Office
9

Opinion on Each Major Federal Program
In our opinion, the City 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, 2012.

REPORT ON INTERNAL CONTROL OVER COMPLIANCE
Management of the City 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 City’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 OMB Circular A-133, 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 City's
internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in
the preceding paragraph and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that were not identified. However, as
discussed below, we identified certain deficiencies in internal control over compliance that we
consider to be material weaknesses.
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. We consider the deficiencies in internal control over compliance described in the
accompanying Schedule of Federal Audit Findings and Questioned Costs as Finding 1 to be a
material weakness.
City’s Response to Findings
The City's response to the internal control over compliance findings identified in our audit is
described in the accompanying Schedule of Federal Audit Findings and Questioned Costs. The
City's response was not subjected to the auditing procedures applied in the audit of compliance
and, accordingly, we express no opinion on the response.

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Washington State Auditor's Office
10

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 OMB Circular A-133. 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.

TROY KELLEY
STATE AUDITOR
September 20, 2013

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Washington State Auditor's Office
11

Independent Auditor’s Report on Financial
Statements
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
Mayor and City Council
City of Gold Bar
Gold Bar, Washington

REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the City of Gold Bar, Snohomish
County, Washington, for the year ended December 31, 2012, and the related notes to the
financial statements, which collectively comprise the City’s financial statements, as listed on
page 15.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with the basis of accounting that demonstrates compliance with
Washington State statutes and the Budgeting, Accounting and Reporting System (BARS)
manual prescribed by the State Auditor described in Note 1. This includes determining that the
basis of accounting is acceptable for the presentation of the financial statements in the
circumstances.
Management is also responsible for 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 an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free 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 City’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the City’s internal control.
Accordingly, we express no such opinion.
An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting

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Washington State Auditor's Office
12

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 opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position and results of operations of the City of Gold Bar, for the year ended
December 31, 2012, on the basis of accounting described in Note 1.
Mater of Emphasis
As discussed in Note 8 to the financial statements, the City’s financial position continues to
decline. The City has had to borrow from restricted funds in order to pay for operations and to
address cash flow shortages. The City’s cash flow constraints are expected to continue in the
near future. As a result, there exists uncertainty about the City’s ability to maintain services at
present levels under these conditions. Our opinion is not modified with respect to this matter.
Basis of Accounting
We draw attention to Note 1 of the financial statements, which describes the basis of
accounting. As described in Note 1 to the financial statements, the financial statements are
prepared in accordance with the basis of accounting that demonstrates compliance with
Washington State statutes and the Budgeting, Accounting and Reporting System (BARS)
manual prescribed by the State Auditor, which is a basis of accounting other than accounting
principles generally accepted in the United State of America. Our opinion is not modified with
respect to this matter.
Other Matters
Supplementary and Other Information
Our audit was performed for the purpose of forming an opinion on the financial statements taken
as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for
purposes of additional analysis as required by U.S. Office of Management and Budget Circular
A-133, Audits of States, Local Governments, and Non-Profit Organizations. The accompanying
Schedule of Liabilities is also presented for purposes of additional analysis as required by the
prescribed BARS manual. These schedules are not a required part of the financial statements.
Such information is the responsibility of management and was derived from and relates directly
to the underlying accounting and other records used to prepare the financial statements. The
information has been subjected to the auditing procedures applied in the audit of the financial
statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our
opinion, the information is fairly stated, in all material respects, in relation to the financial
statements taken as a whole.
Purpose of this Report
The report is intended for the information and use of the management, the Council, federal
awarding agencies and pass-through entities of the City. However, this report is a matter of

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Washington State Auditor's Office
13

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.

OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated
September 20, 2013 on our consideration of the City’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, 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 City’s internal control over financial reporting and compliance.

TROY KELLEY
STATE AUDITOR
September 20, 2013

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Washington State Auditor's Office
14

Financial Section
City of Gold Bar
Snohomish County
January 1, 2012 through December 31, 2012
FINANCIAL STATEMENTS
Fund Resources and Uses Arising from Cash Transactions – 2012
Fiduciary Fund Resources and Uses Arising from Cash Transactions – 2012
Notes to Financial Statements – 2012

SUPPLEMENTARY AND OTHER INFORMATION
Schedule of Liabilities – 2012
Schedule of Expenditures of Federal Awards – 2012
Notes to the Schedule of Expenditures of Federal Awards – 2012

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Washington State Auditor's Office
15

MCAG NO.

STATEMENT C-4

Gold Bar, City of

0671

FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For the Year Ended December 31, 2012
BARS Code

Total for All funds*

001 General
Government

301 Capital
Projects Fund

101 City Street

Beginning Cash and Investments
30810

Beg Fund Bal-Reserved

201,692

0

8,798

91,585

30880

Beg Fund Bal-Unreserved

534,218

60,113

0

0

38880/58880

Prior Period Adjustments, net

0

0

0

0

497,070

482,596

0

14,474

10,625

10,625

0

0

Operating Revenues
310

Taxes

320

Licenses & Permits

330

Intergovernmental Revenues

483,688

74,567

42,098

0

340

376,919

727

0

0

350

Charges for Goods and
Services
Fines & Penalties

6,761

3,049

0

0

360

Miscellaneous Revenues

130,934

11,949

6

0

1,505,997

583,513

42,104

14,474

Total Operating Revenues:
Operating Expenditures
510

General Government

237,185

237,185

0

0

520

Public Safety

390,880

390,880

0

0

530

Utilities And Environment

396,389

5,548

0

0

540

Transportation

42,388

0

37,444

4,944

550

Economic Environment

28,677

28,677

0

0

560

Mental & Physical Health

537

537

0

0

570

Culture And Recreation

22,139

22,139

0

0

598

Intergovernmental Payments

Total Operating Expenditures:
Net Operating Increase (Decrease):

0

0

0

0

1,118,195
387,802

684,966
-101,453

37,444
4,660

4,944
9,530

84,193

77,000

0

0

2,046,406

0

0

0

Nonoperating Revenues
370, 380, 395, 398

Other Financing Sources

391-393

Debt Proceeds

397

Transfers-In

Total Nonoperating Revenues:

26,862

11,349

2,173

0

2,157,461

88,349

2,173

0

249,036

16,283

1,798

13,829

1,769,787

817

0

0

578,027

0

0

4,559

26,862

0

6,685

18,177

2,623,712

17,100

8,483

36,565

-78,449

-30,204

-1,650

-27,035

Nonoperating Expenditures
580, 596, 599

Other Financing Uses

591-593

Debt Service

594-595

Capital Expenditures

597

Transfers-Out

Total Nonoperating Expenditures:
Increase (Decrease) in Cash and Investments
Ending Cash and Investments
50810

End Fund Bal-Reserved

155,036

0

7,148

64,550

50880

End Fund Balance-Unreserved

502,425

29,909

0

0

The accompanying notes are an integral part of this Statement.

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Washington State Auditor's Office
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302 Street
Improvement
Fund

BARS Code

401 Water
Operating

410 Recycling
Fund

415 Stormwater
Fund

Beginning Cash and Investments
30810

Beg Fund Bal-Reserved

19,420

81,889

0

0

30880
38880/58880

Beg Fund Bal-Unreserved

0

442,882

31,223

0

Prior Period Adjustments, net

0

0

0

0
0

Operating Revenues
310

Taxes

0

0

0

0

320

Licenses & Permits

0

0

0

0

330

Intergovernmental Revenues

333,023

34,000

0

0

340

0

303,223

41,061

31,908

350

Charges for Goods and
Services
Fines & Penalties

0

3,585

0

127

360

Miscellaneous Revenues

0

118,977

2

0

333,023

459,785

41,063

32,035

Total Operating Revenues:
Operating Expenditures
510

General Government

0

0

0

0

520

Public Safety

0

0

0

0

530

Utilities And Environment

0

335,729

32,787

22,325

540

Transportation

0

0

0

0

550

Economic Environment

0

0

0

0

560

Mental & Physical Health

0

0

0

0

570

Culture And Recreation

0

0

0

0

598

Intergovernmental Payments

0

0

0

0

0
333,023

335,729
124,056

32,787
8,276

22,325
9,710

Total Operating Expenditures:
Net Operating Increase (Decrease):
Nonoperating Revenues
370, 380, 395, 398

Other Financing Sources

0

7,193

0

0

391-393

Debt Proceeds

0

2,046,406

0

0

397

Transfers-In

0

11,340

0

2,000

0

2,064,939

0

2,000

3,224

204,009

7,941

1,952

Total Nonoperating Revenues:
Nonoperating Expenditures
580, 596, 599

Other Financing Uses

591-593

Debt Service

594-595

Capital Expenditures

597

Transfers-Out

Total Nonoperating Expenditures:
Increase (Decrease) in Cash and Investments

0

1,768,970

0

0

336,406

237,062

0

0

0

0

0

2,000

339,630

2,210,041

7,941

3,952

-6,607

-21,046

335

7,758

Ending Cash and Investments
50810

End Fund Bal-Reserved

50880

End Fund Balance-Unreserved

12,813

70,525

0

0

0

433,200

31,558

7,758

The accompanying notes are an integral part of this Statement.

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Washington State Auditor's Office
17

MCAG NO.

STATEMENT C-5

Gold Bar, City of

0671

FIDUCIARY FUND RESOURCES AND USES ARISING FROM CASH TRANSACTIONS
For the Year Ended December 31, 2012
Total for All funds

BARS Code
308
388 and 588

Beginning Cash and
Investments
Prior Period Adjustments, net

310-360

Revenues

370-390

Other Increases and Financing
Sources
Expenditures

510-570

633 Agency Fund

868

868

0

0

0

0

3,002

3,002

0

0

Other Decreases and
Financing Uses
Increase (Decrease) in Cash and Investments

2,287

2,287

715

715

508

1,583

1,583

580-590

Ending Cash and Investments

The accompanying notes are an integral part of this Statement.

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Washington State Auditor's Office
18

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Gold Bar reports financial activity using the revenue and expenditure
classifications, statements, and schedules contained in the Cash Basis Budgeting,
Accounting and Reporting System (BARS) manual. This basis of accounting and
reporting is another comprehensive basis of accounting (OCBOA) that is prescribed by
the State Auditor’s Office under the authority of Washington State law, Chapter 43.09
RCW.
The City of Gold Bar was incorporated in 1910 and operates under the laws of the state
of Washington applicable to a non-charter code city with a Mayor-Council form of
Government. The City of Gold Bar is a general purpose government and provides public
safety through contract with Snohomish County, street maintenance and improvement,
parks and recreation, and general administrative services. In addition the City owns and
operates a water utility system, and contracts for recycling services. The City of Gold
Bar uses single-entry, cash basis accounting which is a departure from generally
accepted accounting principles (GAAP).
a.

Fund Accounting
The accounts of the City of Gold Bar are organized on the basis of funds, each of
which is considered a separate accounting entity. Each fund is accounted for
with a separate set of single-entry accounts that comprises its cash, investments,
revenues and expenditures, as appropriate. The City of Gold Bar resources are
allocated to and accounted for in individual funds depending on their intended
purpose. The following are the fund types used by the City of Gold Bar:
GOVERNMENTAL FUND TYPES:
General (Current Expense) Fund
This fund is the primary operating fund of the City of Gold Bar. It accounts for
all financial resources except those required or elected to be accounted for in
another fund.
Special Revenue Funds
These funds account for specific revenue sources that are restricted or
committed to expenditures for specified purposes of the City of Gold Bar.
Debt Service Funds
These funds account for the financial resources that are restricted, committed, or
assigned to expenditures for principal, interest and related costs on general longterm debt.
Capital Projects Funds

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Washington State Auditor's Office
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These funds account for financial resources which are restricted, committed, or
assigned for the acquisition or construction of capital facilities or other capital
assets.
Permanent Funds
These funds account for financial resources that are legally restricted to the
extent that only earnings, and not principal, may be used for purposes that
support programs for the benefit of the government or its citizenry.
PROPRIETARY FUND TYPES:
Enterprise Funds
These funds account for operations that provide goods or services to the general
public and are supported primarily through user charges.
Internal Service Funds
These funds account for operations that provide goods or services to other
departments or funds of the City of Gold Bar on a cost-reimbursement basis.
FIDUCIARY FUND TYPES:
Fiduciary funds account for assets held by the City of Gold Bar in a trustee
capacity or as an agent on behalf of others.
Agency Funds
These funds are used to account assets that City of Gold Bar holds for others in
an agency capacity.
b.

Basis of Accounting
Basis of accounting refers to when revenues and expenditures are recognized in
the accounts and reported in the financial statements. Revenues are recognized
only when cash is received and expenditures are recognized when paid, including
those properly chargeable against the report year(s) budget appropriations as
required by state law.
In accordance with state law the City of Gold Bar also recognizes expenditures
paid during twenty days after the close of the fiscal year for claims incurred
during the previous period.
Purchases of capital assets are expensed during the year of acquisition. There is
no capitalization of capital assets, nor allocation of depreciation expense.
Inventory is expensed when purchased.

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Washington State Auditor's Office
20

The basis of accounting described above represents a comprehensive basis of
accounting other than accounting principles generally accepted in the United
States of America.
c.

Budgets
The City of Gold Bar adopts Annual appropriated budgets for General, Special
Revenue, Capital Project, and Enterprises funds.
These budgets are
appropriated at the fund level. The budget constitutes the legal authority for
expenditures at that level. Annual appropriations for these funds lapse at the
fiscal year end.
Annual appropriated budgets are adopted on the same basis of accounting as
used for financial reporting.
The appropriated and actual expenditures for the legally adopted 2012 budgets
were as follow:
Fund

Appropriated

Actual 
Expenditure

Variance

001  ‐ General Fund Group
101 ‐ City Streets
110 ‐ Public Works Equipment Reserve
301 ‐ Capital Projects Fund
302 ‐ Street Improvement Fund
401 ‐ Water Operating Fund
403 ‐ Water Capital Improvement Fund
404 ‐ Fmha Reserve Fund
405 ‐ Water Emergency Reserve Fund
407 ‐ Water Debt Service Fund
409 ‐ Water Debt Booster Pump Station
410 ‐ Recycling Fund
415 ‐ Stormwater Fund
633 ‐ Agency Fund

        763,536.69
          53,070.70
          18,175.87
          83,408.73
        479,418.94
    1,012,725.94
        299,450.11
          19,384.00
          68,889.19
        403,329.37
    1,889,887.01
          72,222.80
          35,000.00
            3,867.62

         737,365.22
           45,928.21
           18,175.87
           23,333.32
         339,630.94
         795,307.38
           74,210.96
              3,897.32
           13,850.75
         403,329.37
     1,889,887.01
           40,728.83
           26,277.90
              2,287.26

      26,171.47
        7,142.49
                   ‐
      60,075.41
    139,788.00
    217,418.56
    225,239.15
      15,486.68
      55,038.44
                   ‐
                   ‐
      31,493.97
        8,722.10
        1,580.36

$  5,202,366.97

$   4,414,210.34

$ 788,156.63

Total City Funds

Budgeted amounts are authorized to be transferred by the Clerk/Treasurer between
departments within any fund/object classes within departments; however, any revisions
that alter the total expenditures of a fund, or that affect the number of authorized
employee positions, salary ranges, hours, or other conditions of employment must be
approved by the City of Gold Bar legislative body.
d.

Cash

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Washington State Auditor's Office
21

It is the City of Gold Bar’s policy to invest all temporary cash surpluses. The
amount is included in the cash and investments shown on the statements of fund
resources and uses arising from cash transactions. The interest on these
investments is prorated to the various funds.
e.

Deposits
The City of Gold Bar deposits and certificates of deposit are covered by the
Federal Deposit Insurance Corporation and/or the Washington Public Deposit
Protection Commission.

f.

Investments. See Investment Note No.3.

g.

Derivatives and Similar Transactions
The City does not use, hold or sell any derivatives or similar instruments during
the period covered by the financial statements.

h.

Capital Assets
Capital assets are long-lived assets of the City of Gold Bar and are recorded as
expenditures when purchased.

i.

Compensated Absences
Vacation leave may be accumulated up to 30 days and is payable upon
separation or retirement.
Sick leave may accumulate up to 480 hours. Upon separation or retirement
employees do not receive payment for unused sick leave. After accumulating
thirty (30) days, employees may convert sick leave into vacation leave on a two
to one ratio.

j.

Long-Term Debt. See Long-Term Debt Note No. 6.

k.

Other Financing Sources or Uses
The City of Gold Bar’s Other Financing Sources or Uses consist of operating
transfers in and out, general obligation bond proceeds, and capital purchases for
land and equipment and debt payments.

l.

Risk Management

The City of Gold Bar is a member of the Association of Washington Cities Risk
Management Service Agency (AWC RMSA). Chapter 48.62 RCW authorizes the

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Washington State Auditor's Office
22

governing body of any one or more governmental entities to form together into or join a
pool or organization for the joint purchasing of insurance, and/or joint self-insuring,
and/or joint hiring or contracting for risk management services to the same extent that
they may individually purchase insurance, self-insure, or hire or contract for risk
management services. An agreement to form a pooling arrangement was made
pursuant to the provisions of Chapter 39.34 RCW, the Inter-local Cooperation Act. The
AWC RMSA was formed on January 1, 1989 when 32 municipalities in the State of
Washington joined together by signing an Inter-local Governmental Agreement to pool
their self-insured losses and jointly purchase insurance and administrative services. As
of December 31, 2011, 86 municipalities/entities participate in the RMSA Pool.
The AWC RMSA allows members to establish a program of joint insurance and provides
risk management services to all members. All coverage is on an occurrence basis. The
AWC RMSA provides all risk property, comprehensive crime, general liability, automobile
liability, police liability, public officials’ liability, employee fidelity and faithful
performance, and boiler and machinery insurance coverage. Boiler and machinery is
included with the property reinsurance carrier and employee fidelity coverage is a standalone policy that the AWC RMSA arranges for its members. The AWC RMSA also allows
members to group purchase airport liability coverage.
Members pay an annual assessment to the AWC RMSA. The AWC RMSA is responsible
for payment of all covered causes of loss against the jurisdiction above the stated
retention. AWC RMSA, itself, pays out of its own funds all claims up to $250,000 for
liability and $50,000 for property, and thereafter purchases excess liability insurance
through ACE Insurance Company up to $1 million, and CV Starr, from $1 million to $10
million. The excess property coverage is purchased through Lexington with limits up to
$250 million, using the Pool’s broker, Arthur J. Gallagher Risk Management Services.
AWC RMSA is a cooperative program; the members of the AWC RMSA are jointly liable.
Members contract to remain in the RMSA Pool a minimum of one year and must give a
one-year notice before terminating participation. Even after termination, a member is
still responsible for contributions to the Pool for any unresolved, unreported, and inprocess claims for the period they were signatory to the Inter-local Governmental
Agreement.
The Inter-local Governmental Agreement was revised in 2009 and approved by
membership in 2010. In accordance with WAC 82.60.02023, the Pool elected its first
Board of Directors, comprised of elected officials that are members of AWC RMSA,
elected at large.
The AWC RMSA establishes a loss fund for both reported and unreported insured events,
which includes estimates of both future payments of losses and related claim
adjustment expenses.
The specific financials of the AWC RMSA can be obtained from the AWC RMSA Annual
Report on file with the City of Gold Bar.

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Washington State Auditor's Office
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m.

Reserved Fund Balance
The City has no commitments or restrictions on fund balance. The City does
report on its financial statements as restricted fund balances as follows:
o
o
o
o

o

City Streets Fund 101 due to the sole revenue source being the State
Motor Vehicle Excise Tax.
Capital Projects Fund 301 due to the sole revenue being the Real Estate
Excise Tax that can be used only for capital purposes.
Street Improvement Fund 302 due to the sole revenue being Federal and
State Construction Grants.
Water Fund 401 revenues that are related to debt service payments and
debt service reserves for debt payments and debt covenant requirements
associated with the outstanding Revenue Bonds of the Water Utility.
Agency Fund 633 due to funds collected and due other governmental
agencies.

NOTE (2) - COMPLIANCE AND ACCOUNTABILITY
a. Legal
In February 2010, two lawsuits were filed against the city for non-compliance of
the Public Records Act.
Block v. City of Gold Bar
filed Feb 2, 2010
SnoCo
02355-9;
In process, waiting for trial date to be established.

Superior

#10-2-

Forbes v. City of Gold Bar
filed May 17, 2010
SnoCo Superior #10-204951-5;
Trial and Appellate Court found for the City; Supreme Court denied
Plaintiff’s Petition for Review on April 30, 2013.
In 2011, there were additional lawsuits filed against the city:
Block v. City of Gold Bar
filed April 6, 2011
SnoCo Superior #11-204307-8;
Trial Court stayed any action pending the results of the appeals in the
Forbes v. City of Gold Bar, SnoCo Superior #10-2-04951-5 above.
Block v. City of Gold Bar
09706-2;

filed Nov 10, 2011

SnoCo Superior #11-2-

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Washington State Auditor's Office
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Trial Court found for the City with prejudice. Sanctions were imposed
with the judgment against the Plaintiff. Plaintiff appealed to Appellate
Court for Review.
Block Recall of Mayor
filed Nov 10, 2011
SnoCo Superior #11-209873-5;
Nine charges were made, all of which were found to be factually and
legally insufficient. Plaintiff filed an appeal which was found to be
untimely and ultimately was withdrawn.
In 2012, one lawsuit was filed for violation of the Open Public Meetings Act, one
lawsuit was filed to recover Utility Excise Taxes, and six petitions to recall the
Mayor and City Council were filed. The six recall petitions were all found to be
factually and legally insufficient. Plaintiff appealed the SnoCo Superior Court
decisions. All recalls are now inert.
Block v. City of Gold Bar
filed Jan 17, 2012
SnoCo
Superior
#12-202255-9;
Trial Court found for the City. Plaintiff appealed to Appellate Court for
Review.
New Cingular v. City of Bothell, et al. filed Apr 25, 2012, KingCo Superior#12-215031-1;
This is a lawsuit against all Cities in Washington levying a Utility Excise
Tax for internet services. Court determined that suit must be brought
against the Cities in the County of jurisdiction for each City. As a result,
Gold Bar was dismissed as a defendant in the lawsuit. In order to
prevent a lawsuit being filed in Snohomish County, the City of Gold Bar
made an offer to settle the claims without judicial action.
b. Financial Reporting
In order to comply with the State of Washington Budget and Accounting
Reporting System, the City rolls up several management funds into financial
reporting activities. The table below shows the roll ups that occur for financial
reporting purposes:

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Washington State Auditor's Office
25

Reporting 
Fund
Title
001
General Government

101
301

City Street
Capital Projects Fund

302
401

Street Improvement Fund
Water Operating

410
415
633

Recycling Fund
Stormwater Fund
Agency Fund

Component 
Fund
001
003
006
015
101
103
104
110
301
302
401
403
404
405
407
409
410
415
633

Title
General Fund
Egg Hunt Fund
National Night Out Fund
Litigation Fund
City Street Fund
Park Impact Fee Fund
Street Impact Fee Fund
Public Works Equipment Reserve
Capital Projects Fund
Street Improvement Fund
Water Operating Fund
Water Capital Improvement
FMHA Reserve Fund
Water Emergency Reserve Fund
Water Debt Service Fund
Water Booster Pump Fund
Recycling Fund
Stormwater Fund
Agency Fund

c. New Fund
In April 2012, Ordinance 633 established Chapter 14 of the Gold Bar Municipal
Code creating the Street Stormwater Utility, established the creation of a fund
and authorized the establishment of Stormwater Utility rates. The purpose of
the utility is for the operation and maintenance of street stormwater facilities to
protect property and roadways from stormwater effects. Fund 415 – Stormwater
Utility was established to record the revenues and expenditures for this Utility in
2012. This Utility is separate from the Water Utility and the associated Water
Utility management funds. Its revenues and expenditures are restricted by State
Law to be used only for purposes of the Fund itself.
d. Change in Accounting for Beginning and Ending Fund Balances.
In years prior to 2012, beginning and ending fund balances were reported as
generally un-restricted. This was not in compliance with the BARS manual
governing financial reporting for governmental agencies in the State of
Washington. This was corrected in the 2012 financial statements. Both
beginning and ending fund balances were reported as reserved or unreserved in

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Washington State Auditor's Office
26

accordance with the definitions proved in the 2012 BARS Manual. This resulted
in a fundamental alteration of continuity between the ending fund balances in
the 2011 Financial Statements and the beginning fund balances of 2012. While
the overall total of the 2011 ending balance and the 2012 beginning balance did
not change, the component distribution between reserved and unreserved was
different.
NOTE 3 – INVESTMENTS
The City of Gold Bar’s investments are insured, registered or held by the City of Gold Bar
or its agents in the City of Gold Bar’s name.
Investments by type at December 31, 2012 are as follows:

TYPE OF INVESTMENT

CITY OF GOLD 
BAR OWN 
INVESTMENTS

TOTAL

L.G.I.P
Coastal Community CD
Bank of America Savings

           149,805.10
             60,593.16
                        0.02

        149,805.10
           60,593.16
                     0.02

TOTAL

$    210,398.28

$  210,398.28

NOTE 4 - PROPERTY TAX
The county treasurer acts as an agent to collect property tax levied in the county for all
taxing authorities. Collections are distributed after the end of each month.
Property tax revenues are recognized when cash is received by the City of Gold Bar.
Delinquent taxes are considered fully collectible because a lien affixes to the property
after tax is levied.
The City’s regular levy for the year 2012 was $1.60004485 per $1,000 on an assessed
valuation of $132,608,838 for a total regular levy of $212,180.09.
NOTE (5) - INTERFUND LOANS AND ADVANCES
The following table displays interfund loan activity during 2012:
Borrowing
Fund
Street

Lending
Fund
Water

Balance
New
Repayments Balance
1/1/2012
Loans
12/31/2012
$14,000
$0
$4,390
$9,610

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Washington State Auditor's Office
27

General Fund

Water
Totals

$0
$14,000

$77,000
$77,000

$6,341
$10,731

$70,659
$80,269

NOTE 6 - LONG-TERM DEBT
The accompanying Schedule of Long-Term Liabilities (Schedule 09) provides more
details of the outstanding debt and liability of the City of Gold Bar and summarizes the
City of Gold Bar’s debt transactions for 2012. The debt service payment for the fiscal
year being reported and future payment requirements, including interest, are as follows:

Year

2012
2013
2014
2015
2016
2017
2018‐2022
2023‐2027
2028‐2032
2033‐2037
2038‐2042
2043‐2047
2048‐2052
TOTAL

General 
Obligation  Revenue Bonds Other Debt
Bonds

Total Debt

$              ‐
                ‐
                ‐
                ‐
                ‐
                ‐
                ‐
                ‐
                ‐
                ‐
                ‐
                ‐
                ‐

$                   380,017
                       73,360
                       73,360
                       73,360
                       73,360
                       73,360
                     366,800
                     366,800
                     366,800
                     366,800
                     366,800
                     366,800
                     366,800

$                 ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐
                   ‐

$                   380,017
                        73,360
                        73,360
                        73,360
                        73,360
                        73,360
                     366,800
                     366,800
                     366,800
                     366,800
                     366,800
                     366,800
                     366,800

$          ‐

$         3,314,417 $            ‐

$          3,314,417

There is a discrepancy between the actual amount of the final payment of $382,479
paid to the USDA and Schedule 09 and the table above. The table and Schedule show
$380,017 as the beginning balance and pay-off. This discrepancy is the result of the
wrong amortization computation over the life of the old bond issue being used for
reporting purposes and the actual records kept by the USDA.
The City of Gold Bar initiated an interim loan with Cashmere Valley Bank in 2011, to
provide for interim financing of $1,766,000 for the purpose of funding construction of a
booster pump to improve the capabilities of the City’s water system. The interim loan
was issued on July 26, 2011 for the total loan amount is $1,766,000 and is backed by a
loan guarantee from the United States Department of Agriculture (USDA). The loan was
converted to a Revenue Bond in September 2012 with the USDA purchasing the bonds.
The City paid-off the interim loan balance and called the remaining balance of the 1995
Revenue Bond issue through a bond defeasance.
NOTE 7 - PENSION PLANS

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Washington State Auditor's Office
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All City of Gold Bar employees are covered under the Federal Social Security System
plan. In 1997, the City implemented contributions to the ICMA Benefit Trust 457
deferred compensation plan.
The City developed a policy to match employee
contributions up to $100 per employee per month. In 1998, the policy was revised so
that the City would contribute $100 per employee per month if the employee
contributed a minimum of $25. Starting in January 2002, the City increased the
contribution to $125 per employee per month. In January 2008 the council voted to
discontinue the contribution to ICMA starting in February 2008, although employees
could elect to continue and contribute to ICMA in the amount of their choice.
As of February 1, 2008, substantially all City of Gold Bar full-time and qualifying parttime employees participate in the PERS administered by the Washington State
Department of Retirement Systems, under cost-sharing multiple-employer public
employee defined benefit and defined contribution retirement plans.
Actuarial
information is on a system-wide basis and is not considered pertinent to the City of Gold
Bar’s financial statements. Contributions to the system by both employee and employer
are based upon gross wages covered by plan benefits.
Historical trend or other information regarding each plan is presented in the Washington
State Department of Retirement Systems annual financial report. A copy of this report
may be obtained by writing to:
Department of Retirement Systems
Communications Unit
PO Box 48380
Olympia, WA 98504-8380
NOTE 8 – SUBSEQUENT EVENTS
a. Financial condition of the City.
As noted in Note 2 above, the City has been processing numerous Public Record
Requests, several of which have resulted in litigation. The majority of the cases
are filed by a small group of citizen’s seeking “timely compliance” by the City to
their requests. As a result, the City has incurred legal and staff expenditures
which have depleted its General Fund operating reserves. Most of the public
record requests are for email correspondence related to current and former
elected officials and the requesters.
The City placed an excess levy measure on the November 2012 ballot for
$113,000. The proceeds of the excess levy were to assist the General Fund in
covering the legal and staff costs of the Public Records Requests. The levy
failed, and along with declining assessed valuations and static property tax
collections, the City does not have a positive financial outlook. At the present
time, the City is exploring its available options which include bankruptcy and/or
dissolution.
b. Fraud

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Washington State Auditor's Office
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The City endured an electronic fraud attack against all of its bank accounts with
Bank of America. The attack was initiated in several forms, beginning with
attempts to pass altered and counterfeit checks through the bank. These were
all caught immediately and reversed. In May 2012, minor wire fraud activity was
initiated and continued until October 16, 2012 when the bank accounts were all
frozen and locked. In July 2012 the City noticed the activity and initiated
immediate procedures to secure the accounts. Due to the fact that the
perpetrators had electronic access to the City’s bank accounts, efforts to secure
the accounts were not successful. A police complaint was filed with Gold Bar
Police and through Bank of America, Bank Security, the FBI and the Secret
Service became involved. Portland, Oregon Police also became involved in the
investigation and subsequently in the arrest of the parties involved. The City of
Gold Bar had $382,068.18 stolen and subsequently recovering $216,217. The
remaining $165,851 will be recovered by a claim against the City’s Insurance
carrier.
The loss of $165,851 was distributed to the operating and managerial funds on
the basis of their ending fund balances prior to the distribution. The following
table indicates the loss distribution to the operating and managerial funds:

Fund
001
101
301
302
401
403
404
405
410
415
633

Total

Gross Fraud 
Recovery
Loss
            22,902
              4,143
            31,859
              7,428
          120,567
          130,575
              8,978
            31,908
            18,295
              4,497
                  917

            12,961
              2,345
            18,029
              4,203
            68,230
            73,894
              5,081
            18,057
            10,353
              2,545
                  519

Net Loss
              9,942
              1,799
            13,830
              3,224
            52,336
            56,681
              3,897
            13,851
              7,941
              1,952
                  398

$    382,068 $    216,217 $    165,851

Additionally, the City’s Clerk-Treasurer was terminated for loss of trust on July
23, 2012. There was no financial loss to the City. All unauthorized borrowed
funds were repaid to the City prior to the termination date. A City of Gold Bar
Police complaint was filed in this matter. Additionally, the Washington State
Auditor’s Office investigated this activity and found that there were no additional
funds neither misappropriated nor stolen.

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Washington State Auditor's Office
30

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Washington State Auditor's Office
31

ID. No.

0671

Maturity/Payment
Due Date

1,766,000
1,766,000

380,017
398,011

Total Revenue Obligations:
Total Liabilities:

0
1,766,000

380,017
0

USDA Water Revenue Bond

252.11

5/5/2035

0

17,994

9/1/2040

USDA Water Revenue Bond

0

Additions

17,994

Beginning Balance
January 1, 2012

Schedule of Liabilities
For the year ended December 31, 2012

City of Gold Bar

Total General Obligations:

COMPENSATED ABSENSES

Description

252.11

Revenue Obligations

259.11

General Obligations

Debt Type

MCAG NO.

386,144

380,017

0

380,017

6,127

6,127

58234

58234

58211

Reductions BARS Code for
Redemption of
Debt Only

1,777,867

1,766,000

1,766,000

0

11,867

11,867

Ending Balance
December 31, 2012

Schedule 09

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Washington State Auditor's Office
32

The accompanying notes to the Schedule of Expenditures are an integral part of this schedule

374,377

30,112

Total Federal Awards Expended:

20.205

Federal Highway Administration (fhwa), Highway Planning and
Department Of Transportation/WA State Construction
Dept of Transportation

HCD-06-21-0603225

From PassThrough
Awards

344,265

14.218

Office Of Community Planning And
Community Development
Development, Department Of Housing
Block Grant/Entitlement
And Urban Development/Snohomish Co. Grant
Dept of Housing & Urban Dev.

NA

Other Award
Number

STPE-0002(8002)
LA7406

10.760

Water and Waste Disposal
Systems for Rural
Communities

Rural Utilities Service, Department Of
Agriculture/

CFDA Number

For the Year Ended December 31, 2012

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

City of Gold Bar

Federal Program Name

0671

Federal Agency Name/PassThrough Agency Name

MCAG NO.

204,654

204,654

From Direct
Awards

Expenditures

579,031

344,265

30,112

204,654

Total Amount

Schedule 16

Footnote Ref

SNOHOMISH COUNTY, WASHINGTON
City of Gold Bar
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31, 2012
NOTE 1 - BASIS OF ACCOUNTING
This schedule is prepared on the same basis of accounting as the City of Gold Bar’s financial statements.
The City of Gold Bar uses single-entry, cash basis accounting which is a departure from generally accepted
accounting principles (GAAP).
NOTE 2 - PROGRAM COSTS
The amounts shown as current year expenditures represent only the federal grant portion of the program
costs. Entire program costs, including the City of Gold Bar’s portion, are more than shown.
In 2011, expenditures of $33,386 were incurred that were not reported in either the 2011 or 2012 Schedule
of Expenditures of Federal Awards. These were startup expenditures that were not properly identified in
the City’s Financial System due to failure to correctly set-up the grant in 2011.
NOTE 4 - FEDERAL LOANS
(a) The City of Gold Bar was approved by the USDA Rural Utilities Service to receive a loan totaling
$1,766,000 to build a Reservoir and Booster Pump Station.
The amount listed for each loan includes the proceeds received during the year and the outstanding loan
balance from prior years. Both the current and prior year loans are also reported on the City of Gold Bar’s
Schedule of Long-Term Liabilities.

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Washington State Auditor's Office
33

ABOUT THE STATE AUDITOR'S OFFICE
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