Report of Independent Auditors and Financial
Statements with Required Supplementary
Information and Other Information
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
December 31, 2023 and 2022
Table of Contents
Page
Report of Independent Auditors 1
Management’s Discussion and Analysis 5
Financial Statements
Statements of Net Position 15
Statements of Revenues, Expenses, and Changes in Net Position 17
Statements of Cash Flows 18
Notes to Financial Statements 20
Required Supplementary Information
Schedule of Seattle Public Utilities’ Proportionate Share of the Net Pension Liability 49
Schedule of Seattle Public Utilities’ Pension Contributions 49
Schedule of Seattle Public Utilities’ Proportionate Share of the OPEB Liability and
Related Ratios 50
Other Information (Unaudited)
Solid Waste Debt Service Coverage Calculation 2023 52
Solid Waste Customers by Class 53
Solid Waste Tonnage 54
Solid Waste Rate Schedule and Transfer Station Fees 55
1
Report of Independent Auditors
To the Director of Seattle Public Utilities
Solid Waste Fund
Seattle, Washington
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Seattle Public Utilities – Solid Waste Fund (the Fund),
which comprise the statements of net position as of December 31, 2023 and 2022, and the related
statements of revenues, expenses, and changes in net position, and cash flows for the years then
ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of Seattle Public Utilities – Solid Waste Fund as of December 31, 2023 and 2022,
and the changes in its net position and its cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United
States of America (GAAS) and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of the Fund and to
meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to
our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Emphasis of Matter
As discussed in Note 1 to the financial statements, the Fund adopted the provisions of Governmental
Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology
Arrangements, effective January 1, 2022. Our opinion is not modified with respect to this matter.
Financial Reporting Entity
As discussed in Note 1, the financial statements present only the Fund and do not purport to, and do
not, present fairly the financial position of City of Seattle, Washington, as of December 31, 2023 and
2022, the changes in its financial position, or, where applicable, its cash flows for the years then
ended in accordance with accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
2
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and 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 Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based
on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 Fund’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings and certain internal
control–related matters that we identified during the audit.
3
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, schedule of Seattle Public Utilities’ proportionate share of the
net pension liability, schedule of Seattle Public Utilities’ pension contributions, and the schedule of
Seattle Public Utilities’ proportionate share of the OPEB liability and related ratios (collectively,
required supplementary information) be presented to supplement the basic financial statements. Such
information is the responsibility of management and, although not a part of the basic financial
statements, is required by the GASB 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.
Other Information
Management is responsible for the other information as listed in the table of contents. The other
information comprises the debt service coverage calculation, solid waste customers by class, solid
waste tonnage, and solid waste rate schedule and transfer station fees but does not include the
financial statements and our auditor’s report thereon. Our opinion on the financial statements does
not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and
the financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated April 26,
2024, on our consideration of the Fund’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 solely to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion
on the effectiveness of the Fund's 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 Fund’s internal control over financial reporting and compliance.
Seattle, Washington
April 26, 2024
Management’s Discussion and Analysis
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
5
Management’s Discussion and Analysis
As management of Seattle Public Utilities (SPU), a department of the City of Seattle (the City), we offer
readers of SPU’s financial statements this narrative overview and analysis of the financial activities of the
Solid Waste Fund (the Fund) for the fiscal years ended December 31, 2023 and 2022. The revenues,
expenses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the City
of Seattle’s solid waste system are recorded in the Fund, the functions of which are primarily supported
by user fees and charges billed to customers. The financial situation of other aspects of Seattle City
government, including other utility services and general government operations, are reported elsewhere.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Fund’s financial statements.
The financial statements include management’s discussion and analysis and basic financial statements
with accompanying notes.
Basic financial statements – The basic financial statements of the Fund report information similar to the
presentation used by private sector companies. These statements offer short-term and long-term financial
information about its activities. The basic financial statements begin on page 15 of this report and are
comprised of three components: (1) statements of net position, (2) statements of revenues, expenses,
and changes in net position, and (3) statements of cash flows.
The statement of net position presents information, as of December 31, 2023 and 2022, on all of the
Fund’s assets, deferred outflows of resources, liabilities and deferred inflows of resources. The difference
between assets combined with deferred outflows of resources and liabilities combined with deferred
inflows of resources is reported as net position. They also provide information about the nature and
amounts of investments in resources (assets and deferred outflows of resources), obligations to the
Fund’s creditors (liabilities and deferred inflows of resources) and provide the basis for assessing the
liquidity and financial flexibility of the Fund.
The statements of revenues, expenses, and changes in net position present changes in the Fund’s net
position for the years ended December 31, 2023 and 2022. All changes in net position are reported when
the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
These statements reflect the results of the Fund’s operations for the years identified to provide
information about the Fund’s creditworthiness and its ability to successfully recover all its costs through
service fees and other charges.
The statements of cash flows are required to provide information about the Fund’s cash receipts and cash
payments during the years ended December 31, 2023 and 2022. To provide answers to questions about
sources, uses, and impacts to cash, these statements report cash receipts, cash payments, and net
changes in cash resulting from operations, investing, and financing activities for the reporting period.
Notes to the financial statements – The notes are an integral part of the financial statements. They
provide additional disclosures that are essential to a full understanding of the data provided in the
financial statements, such as for certain estimates and financing details. The notes to the financial
statements begin on page 20 of this report.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
6
Financial Analysis
Increases or decreases in net position may serve over time as a useful indicator of whether the Fund’s
financial position is improving or deteriorating. On December 31, 2023, the Fund had a surplus in total net
position of $213.3 million compared to a surplus of $167.0 million in 2022. In 2023, the Fund’s net
position increased $46.3 million (27.7%), as compared to 2022 which increased $39.7 million (31.2%).
The following summary statement of net position presents the assets and deferred outflows of resources
of the Fund and shows the mix of liabilities and deferred inflows of resources and net position used to
acquire these assets.
Summary Statements of Net Position
2023 2022 2021
ASSETS
Current assets 248,170,860$ 201,769,202$ 168,134,716$
Capital assets, net 189,153,592 194,645,965 198,202,806
Other 69,816,645 70,007,051 65,475,667
Total assets 507,141,097 466,422,218 431,813,189
DEFERRED OUTFLOWS OF RESOURCES 10,794,494 7,799,094 6,109,839
Total assets and deferred outflows
of resources 517,935,591$ 474,221,312$ 437,923,028$
LIABILITIES
Current liabilities 37,336,252$ 30,481,615$ 29,780,609$
Revenue bonds 160,685,018 170,136,850 179,188,683
Other 62,841,944 56,303,263 54,096,737
Total liabilities 260,863,214 256,921,728 263,066,029
DEFERRED INFLOWS OF RESOURCES 43,782,078 50,325,775 47,628,542
NET POSITION
Net investment in capital assets 30,443,855 27,085,021 22,035,859
Restricted 2,974,707 3,713,964 3,433,268
Unrestricted 179,871,737 136,174,824 101,759,330
Total net position 213,290,299 166,973,809 127,228,457
Total net position, liabilities and
deferred inflows of resources 517,935,591$ 474,221,312$ 437,923,028$
2023 Compared to 2022
Assets – Current assets increased by $46.4 million (23.0%) from the prior year mostly due to a
$39.7 million increase in operating cash, a $6.0 million increase in accounts receivable, and a $0.8 million
increase in unbilled receivables. These increases were offset by a $0.1 million decrease in amounts due
from other governments. The increase in operating cash was primarily the result of operating activities.
The increase in accounts receivable consisted of an increase of $0.6 million in residential accounts and
an increase of $5.2 million in commercial accounts.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
7
Capital assets decreased $5.5 million (-2.8%) over the prior year. This change is mostly due to
depreciation of $11.1 million. This decrease was offset by an increase in plant in service of $4.8 million
and an increase in construction in progress of $0.7 million.
Other assets decreased $0.2 million (-0.3%) from the prior year. This change consisted of a decrease of
$1.3 million in accrued landfill closure/postclosure costs, and a decrease of $0.1 million in regulatory
assets, offset by an increase of $1.2 million in restricted cash and equity in pooled investments.
Deferred outflows of resources – Deferred outflows of resources increased by $3.0 million (38.4%)
from 2022. This increase is mostly attributed to changes in deferred outflows related to pension
accounting in 2022, including differences between expected and actual experience, changes of
assumptions, differences between projected and actual earnings, and contributions made subsequent to
the measurement date.
Liabilities – Current liabilities increased $6.9 million (22.5%) from the prior year. This is mostly attributed
to an increase in environmental liabilities of $2.5 million, an increase in accounts payable of $4.0 million,
an increase in the current portion of accrued landfill closure/postclosure costs of $2.0 million, an increase
in other current liabilities of $0.7 million, and an increase in the current portion of revenue bonds payable
of $0.4 million. These increases were offset by a decrease in taxes payable of $2.7 million and a
decrease in interest payable of $0.1 million.
Noncurrent and other liabilities decreased $3.0 million (-1.3%) from 2022. This decrease is mostly
attributed to a decrease of $9.5 million in revenue bonds and related liabilities, a decrease of $2.5 million
in the noncurrent portion of accrued landfill closure/postclosure costs, a decrease of $1.0 million in
environmental liabilities, a decrease of $0.3 million in the noncurrent portion of compensated absences
payable, and a decrease of $0.1 million in the liability related to unfunded other post-employment
benefits. These decreases were offset by a $10.2 million increase in net pension liability and a $0.2
million increase in other noncurrent liabilities.
Deferred inflows of resources – Deferred inflows of resources decreased by $6.5 million (-13.0%) from
2022 mostly due to a $7.7 million decrease attributed to changes in deferred inflows related to pension
accounting, including differences between expected and actual experience, differences between
projected and actual earnings, changes of assumptions, and changes in proportion and differences
between employer contributions and proportionate share of contributions. There was also a decrease of
$0.1 million in unamortized gain on refunded debt. These decreases were offset by an increase of
$1.3 million in the Rate Stabilization Account as a result of interest earned in 2023.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
8
Net position – Net position increased $46.3 million (27.7%) from 2022.
A portion of the Fund’s net position of $30.4 million (14.3%) reflects the Fund’s investment in capital
assets such as land, buildings, and equipment, less accumulated depreciation and any related
outstanding debt used to acquire those assets. The Fund uses these assets to provide services to
customers. Consequently, these assets are not available for future spending. Although the Fund’s
investment in its capital assets is reported net of related debt, the resources needed to repay the debt are
provided by fees paid by customers for services provided by these assets. During 2023, net position
invested in capital assets increased $3.4 million mainly due to a decrease in debt related to investment in
capital offset by a decrease in capital assets.
The restricted portion of the Fund’s net position of $3.0 million (1.4%) mostly consists of unamortized
landfill closure/postclosure costs related to the Midway and Kent-Highlands landfills (see Note 11).
The primary remaining portion of the Fund’s net position of $179.9 million (84.3%) represents resources
that are unrestricted. The unrestricted portion of net position increased $43.7 million from the prior year
primarily as a result of operating income.
2022 Compared to 2021
Assets – Current assets increased by $33.6 million (20.0%) from the prior year mostly due to a
$32.4 million increase in operating cash, a $1.4 million increase in accounts receivable, a $0.3 million
increase in amounts due from other funds, and a $0.1 million increase in amounts due from other
governments. These increases were offset by a $0.6 million decrease in unbilled receivables. The
increase in operating cash was primarily the result of operating activities. The increase in accounts
receivable consisted of an increase of $1.7 million in residential accounts offset by a decrease of
$0.3 million in commercial accounts.
Capital assets decreased $3.6 million (-1.8%) over the prior year. This change is mostly due to
depreciation ($10.2 million), a decrease in construction in progress ($1.2 million) and retirements of
assets, net of accumulated depreciation of $0.3 million. These decreases were offset by an increase in
plant in service of $8.1 million.
Other assets increased $4.5 million (6.9%) from the prior year. This change consisted of an increase of
$3.8 million in accrued landfill closure/postclosure costs, an increase of $0.6 million in restricted cash and
equity in pooled investments, and an increase of $0.2 million in other charges, offset by a decrease of
$0.1 million in regulatory assets.
Deferred outflows of resources – Deferred outflows of resources increased by $1.7 million (27.6%)
from 2021. This increase is mostly attributed to changes in deferred outflows related to pension
accounting in 2022, including differences between expected and actual experience, changes of
assumptions, differences between projected and actual earnings, and contributions made subsequent to
the measurement date.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
9
Liabilities – Current liabilities increased $0.7 million (2.4%) from the prior year. This is mostly attributed
to an increase in taxes payable of $2.8 million and an increase in the current portion of revenue bonds
payable of $0.5 million. These increases were offset by a decrease in the current portion of accrued
landfill closure/postclosure costs of $1.6 million, a decrease in salaries, benefits and payroll taxes payable
of $0.4 million, a decrease in accounts payable of $0.3 million, and a decrease in interest payable of
$0.2 million.
Noncurrent and other liabilities decreased $6.8 million (-2.9%) from 2021. This decrease is mostly
attributed to a decrease of $9.1 million in revenue bonds and related liabilities, a $2.7 million decrease in
net pension liability, a $0.2 million decrease in the liability related to unfunded other post-employment
benefits, a $0.1 million decrease in claims payable. These decreases were offset by a $5.2 million
increase in the noncurrent portion of accrued landfill closure/postclosure costs.
Deferred inflows of resources – Deferred inflows of resources increased by $2.7 million (5.7%) from
2021 mostly due to a $2.1 million increase attributed to changes in deferred inflows related to pension
accounting, including differences between expected and actual experience, differences between
projected and actual earnings, changes of assumptions, and changes in proportion and differences
between employer contributions and proportionate share of contributions. There was also an increase of
$0.7 million in the Rate Stabilization Account as a result of interest earned in 2022 and a decrease of
$0.1 million in unamortized gain on refunded debt.
Net position – Net position increased $39.7 million (31.2%) from 2021.
A portion of the Fund’s net position of $27.1 million (16.2%) reflects the Fund’s investment in capital
assets such as land, buildings, and equipment, less accumulated depreciation and any related
outstanding debt used to acquire those assets. The Fund uses these assets to provide services to
customers. Consequently, these assets are not available for future spending. Although the Fund’s
investment in its capital assets is reported net of related debt, the resources needed to repay the debt are
provided by fees paid by customers for services provided by these assets. During 2022, net position
invested in capital assets increased $5.0 million mainly due to a decrease in debt related to investment in
capital offset by a decrease in capital assets.
The restricted portion of the Fund’s net position of $3.7 million (2.2%) mostly consists of unamortized
landfill closure/postclosure costs related to the Midway and Kent-Highlands landfills (see Note 11).
The primary remaining portion of the Fund’s net position of $136.2 million (81.6%) represents resources
that are unrestricted. The unrestricted portion of net position increased $34.4 million from the prior year
primarily as a result of operating income.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
10
The following summary statements of revenues, expenses, and changes in net position present the
annual surplus (or deficit) of revenues over expenses (the change in net position):
Summary Statements of Revenues, Expenses, and Changes in Net Position
2023 2022 2021
Operating revenues 267,905,077$ 256,808,441$ 238,260,883$
Operating expenses (226,075,955) (205,607,188) (195,566,995)
Operating income 41,829,122 51,201,253 42,693,888
Other revenues (expenses), net 4,320,796 (12,695,801) (7,700,355)
Fees, contributions, and grants 166,572 1,239,900 1,489,320
Change in net position 46,316,490$ 39,745,352$ 36,482,853$
2023 Compared to 2022
Current year operating revenues increased $11.1 million (4.3%) compared to the prior year. There were
several key factors affecting this change. There was an approximate 1.5% rate increase for residential
and commercial garbage, and composting services effective April 1, 2023. This resulted in a residential
and commercial solid waste collection service revenue increase of $7.7 million. There were also
increases of $1.9 million in transfer station revenue, and $2.9 million for commercial disposal charges.
These increases were offset by decreases of $0.9 million in revenues from fluctuations in pricing of
recycling commodities, and $0.5 million in other utility operating revenues.
Seattle City Council enacted legislation in 2012 (ordinance 124056) allowing the Fund to make
contributions to a Rate Stabilization Account if the balance of operating cash on hand at year-end met
certain targets. With sufficient funds in the Rate Stabilization Account, no transfers were made in 2023.
Operating expenses in 2023 increased $20.5 million (10.0%) compared to 2022. This increase included a
$12.6 million increase in services, a $2.6 million increase in other operating expenses, a $1.8 million
increase in depreciation and amortization, a $1.4 million increase in salaries and wages, a $1.1 million
increase in City and State taxes, a $0.7 million increase in personnel benefits, and a $0.2 million increase
in supplies.
Nonoperating revenues and expenses experienced a net increase of $15.9 million (139.2%). Investment
income increased $15.7 million, other nonoperating revenue increased $0.9 million, interest expense
decreased by $0.3 million, and contributions and grants decreased $1.1 million.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
11
2022 Compared to 2021
Current year operating revenues increased $18.5 million (7.8%) compared to the prior year. There were
several key factors affecting this change. There was an approximate 2.9% rate increase for residential
and commercial garbage, and composting services effective April 1, 2022. This resulted in a residential
and commercial solid waste collection service revenue increase of $16.3 million. There were also
increases of $1.3 million in transfer station revenue, $0.5 million for commercial disposal charges,
$0.3 million in revenues from fluctuations in pricing of recycling commodities, and $0.2 million in revenues
from miscellaneous fines and penalties.
Seattle City Council enacted legislation in 2012 (ordinance 124056) allowing the Fund to make
contributions to a Rate Stabilization Account if the balance of operating cash on hand at year-end met
certain targets. With sufficient funds in the Rate Stabilization Account, no transfers were made in 2022.
Operating expenses in 2022 increased $10.0 million (5.1%) compared to 2021. This increase included a
$7.5 million increase in services, a $3.0 million increase in City and State taxes, a $1.0 million increase in
salaries and wages, a $0.4 million increase in personnel benefits, and a $0.2 million increase in supplies.
These increases were offset by decreases of $1.9 million in other operating expenses, and $0.3 million in
depreciation and amortization.
Nonoperating revenues and expenses experienced a net decrease of $5.2 million (-84.4%). Investment
income decreased $5.5 million, interest expense decreased by $0.9 million, other nonoperating revenue
decreased $0.3 million, contributions and grants decreased $0.2 million, and other nonoperating
expenses increased $0.1 million.
Capital Assets
The following table summarizes capital assets, net of accumulated depreciation, by major asset category
as of December 31, 2023, 2022, and 2021:
Summary of Capital Assets, Net of Accumulated Depreciation and Amortization
2023 2022 2021
Land and land rights 26,882,856$ 26,882,856$ 26,882,856$
Buildings 104,554,516 108,070,641 111,586,767
Structures 10,427,251 10,880,838 11,334,424
Machinery and equipment 27,102,965 27,060,231 26,008,729
Computer systems 11,153,302 13,547,497 13,013,142
Construction in progress 6,076,834 5,330,853 6,531,946
Artwork 1,358,666 1,315,436 1,276,701
Intangible right-to-use 67,220 27,631 38,259
Property held for future use 1,529,982 1,529,982 1,529,982
Capital assets, net of
accumulated depreciation and amortization 189,153,592$ 194,645,965$ 198,202,806$
Additional information about the Fund’s capital assets can be found in Note 3 of this report.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
12
2023 Compared to 2022
The Fund’s capital assets (net of accumulated depreciation) for the year ended December 31, 2023, is
$189.2 million. This represents a decrease of approximately $5.5 million (-2.8%) compared to 2022.
Highlights of the Fund’s capital assets placed in service during 2023 include the following:
$2.8 million for heavy equipment purchases
The Fund’s construction in progress at year end included $2.5 million for a new facility at the prior site of
South Transfer Station.
2022 Compared to 2021
The Fund’s capital assets (net of accumulated depreciation) for the year ended December 31, 2022, is
$194.6 million. This represents a decrease of approximately $3.5 million (-1.8%) compared to 2021.
Highlights of the Fund’s capital assets placed in service during 2022 include the following:
$4.2 million for heavy equipment purchases
$1.9 million for the CCB & MDM upgrade
The Fund’s construction in progress at year end did not include any projects over $2 million.
Debt Administration
The Fund’s debt primarily consists of bonded debt. Bonded debt is secured solely by solid waste
revenues and provides financing for capital improvements. Loans issued by the Washington State
Agencies for certain capital improvements are unsecured. The Fund’s credit ratings on its bonds were
Aa3 and AA+ by Moody’s Investors Service Inc. and Standard & Poor’s Rating Services, respectively.
Additional details about the Fund’s revenue bonds and loans are in Note 4 of this report.
2023 Compared to 2022
At the end of 2023, the Fund had $149.6 million in bonded debt, as compared to $157.4 million in 2022,
all of which was secured solely by solid waste revenues. This decrease of $7.8 million is attributed to
scheduled principal payments for existing bond debt. The Fund has used bond proceeds mostly for the
purchase of heavy equipment, the redevelopment of South Transfer Station and other miscellaneous
projects. The Fund retains bond reserves of $8.1 million.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Management’s Discussion and Analysis
13
2022 Compared to 2021
At the end of 2022, the Fund had $157.4 million in bonded debt, as compared to $164.7 million in 2021,
all of which was secured solely by solid waste revenues. This decrease of $7.3 million is attributed to
scheduled principal payments for existing bond debt. The Fund has used bond proceeds mostly for the
purchase of heavy equipment, the Utilities CSS Portal and other miscellaneous projects. The Fund
retains bond reserves of $8.1 million.
Economic Factors Affecting Next Year
Effective April 1, 2024, the Fund will adopt a rate increase of approximately 2.6% for residential and
commercial services. This rate increase is expected to bring an additional $6.9 million in operating
revenues to the Fund in 2024.
Requests for Information
The Fund’s financial statements are designed to provide a general overview of the Fund’s finances, as
well as to demonstrate the Fund’s accountability to its customers, investors, creditors, and other
interested parties. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to Seattle Public Utilities, Finance and Administration
Branch, Accounting Division, PO Box 34018, Seattle, WA 98124-4018, telephone: (206) 684-3000.
Financial Statements
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
See accompanying notes.
15
Statements of Net Position
December 31, 2023 and 2022
2023 2022
ASSETS
CURRENT ASSETS
Operating cash and equity in pooled investments 198,363,789$ 158,692,821$
Receivables
Accounts, net of allowance 29,237,830 23,224,971
Unbilled revenues 18,491,006 17,735,683
Due from other funds 728,980 760,363
Due from other governments 1,107,331 1,174,311
Materials and supplies inventory 213,269 156,990
Prepayments and other current assets 28,655 24,063
Total current assets 248,170,860 201,769,202
NONCURRENT ASSETS
Restricted cash and equity in pooled investments 48,523,219 47,300,427
Prepayments long-term 162,273 180,301
Regulatory landfill closure and postclosure costs 18,625,932 19,939,304
Regulatory assets 1,531,297 1,644,323
Other charges 973,924 942,696
Capital assets
Land and land rights 26,882,856 26,882,856
Plant in service, excluding land 251,605,595 248,559,579
Less accumulated depreciation and amortization (96,941,675) (87,657,305)
Construction in progress 6,076,834 5,330,853
Other property, net 1,529,982 1,529,982
Total noncurrent assets 258,970,237 264,653,016
Total assets 507,141,097 466,422,218
DEFERRED OUTFLOWS OF RESOURCES
Unamortized loss on refunded debt 1,588,717 1,755,950
Pension and OPEB contributions and changes
in assumptions 9,205,777 6,043,144
Total deferred outflows of resources 10,794,494 7,799,094
Total assets and deferred outflow of resources 517,935,591$ 474,221,312$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
See accompanying notes.
16
Statements of Net Position
December 31, 2023 and 2022
2023 2022
LIABILITIES
CURRENT LIABILITIES
Accounts payable 18,068,926$ 14,067,437$
Salaries, benefits, and payroll taxes payable 757,133 750,007
Compensated absences payable 78,735 94,935
Due to other funds - 2,715
Interest payable 1,586,213 1,678,005
Taxes payable 969,965 3,634,481
Revenue bonds, due within one year 8,160,000 7,760,000
Claims payable 296,007 277,900
Environmental liabilities 2,810,000 316,000
Landfill closure and postclosure liability 3,873,733 1,880,797
Lease liabilities, due within one year 31,711 10,617
Other 703,829 8,721
Total current liabilities 37,336,252 30,481,615
NONCURRENT LIABILITIES
Compensated absences payable 1,495,969 1,803,759
Claims payable 556,271 536,249
Environmental liabilities 16,921,553 17,939,983
Landfill closure and postclosure liability 12,180,845 14,704,578
Total OPEB liability 899,459 979,853
Net pension liability 30,515,947 20,321,284
Lease liabilities, net of current portion 46,900 17,557
Other noncurrent liabilities 225,000 -
Revenue bonds 149,625,000 157,385,000
Less bonds due within one year (8,160,000) (7,760,000)
Bond premium 19,220,018 20,511,850
Total noncurrent liabilities 223,526,962 226,440,113
Total liabilities 260,863,214 256,921,728
DEFERRED INFLOWS OF RESOURCES
Unamortized gain on refunded debt 1,584,664 1,715,978
Deferred inflows - pension and OPEB 1,648,001 9,315,464
Rate stabilization 40,549,413 39,294,333
Total deferred inflows of resources 43,782,078 50,325,775
NET POSITION
Net investment in capital assets 30,443,855 27,085,021
Restricted 2,974,707
3,713,964
Unrestricted 179,871,737 136,174,824
Total net position 213,290,299 166,973,809
Total liabilities, deferred outflows, and net position 517,935,591$ 474,221,312$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
See accompanying notes.
17
Statements of Revenues, Expenses, and Changes in Net Position
Years Ended December 31, 2023 and 2022
2023 2022
OPERATING REVENUES
Charges for services and other revenues 267,905,077$ 256,808,441$
OPERATING EXPENSES
Salaries and wages 19,144,392 17,733,086
Personnel benefits 6,764,360 6,045,458
Supplies 1,568,180 1,356,408
Services 145,527,214 132,958,137
Intergovernmental payments 35,582,877 34,491,835
Depreciation and amortization 13,822,831 12,001,683
Other operating expenses 3,666,101 1,020,581
Total operating expenses 226,075,955 205,607,188
OPERATING INCOME 41,829,122 51,201,253
NONOPERATING REVENUES (EXPENSES)
Other nonoperating revenue 876,695 -
Investment income (loss) 8,802,827 (6,880,944)
Interest expense (5,358,726) (5,670,646)
Other nonoperating expenses - (144,211)
Contributions and grants 166,572 1,239,900
Total nonoperating revenues (expenses) 4,487,368 (11,455,901)
CHANGE IN NET POSITION 46,316,490 39,745,352
NET POSITION
Beginning of year 166,973,809 127,228,457
End of year 213,290,299$ 166,973,809$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
See accompanying notes.
18
Statements of Cash Flows
Years Ended December 31, 2023 and 2022
2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 262,828,181$ 256,040,415$
Cash paid to suppliers (143,793,139) (134,984,557)
Cash paid to employees (29,665,083) (29,518,258)
Cash paid for taxes (38,023,881) (31,488,083)
Net cash provided by operating activities 51,346,078 60,049,517
CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES
Operating grants received 166,724 1,239,900
Net cash provided by noncapital
and related financing activities 166,724 1,239,900
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal payments on long-term debt (7,648,375) (7,183,172)
Capital expenditures and other charges (5,618,893) (6,909,006)
Interest paid on long-term debt (6,874,631) (7,345,360)
Proceeds from sale of capital assets 720,030 77,622
Net cash used in capital and related
financing activities (19,421,869) (21,359,916)
CASH FLOWS FROM INVESTING ACTIVITIES
Net change on investments held 8,802,827 (6,885,134)
NET INCREASE IN CASH AND EQUITY IN
POOLED INVESTMENTS 40,893,760 33,044,367
CASH AND EQUITY IN POOLED INVESTMENTS
Beginning of year 205,993,248 172,948,881
End of year 246,887,008$ 205,993,248$
CASH AT THE END OF THE YEAR CONSISTS OF
Operating cash and equity in pooled investments 198,363,789$ 158,692,821$
Noncurrent restricted cash and equity in
pooled investments 48,523,219 47,300,427
Total cash at the end of the year 246,887,008$ 205,993,248$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Statements of Cash Flows
December 31, 2023 and 2022
See accompanying notes.
19
2023 2022
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income 41,829,122$ 51,201,253$
Adjustments to reconcile operating income to net
cash provided by operating activities
Adjustment for net pension liability (635,433) (2,427,874)
Depreciation and amortization 13,822,831 12,001,683
Other cash receipts 74,824 39,231
Changes in operating assets and liabilities
Accounts receivable (6,012,859) (1,355,422)
Unbilled revenues (754,413) 559,166
Due from other City funds 31,383 (313,890)
Due from other governments 66,980 (147,394)
Materials and supplies inventory (56,279) 32,768
Other assets (1,165,605) (5,549,743)
Accounts payable 4,001,489 (297,050)
Salaries, benefits, and payroll taxes payable 7,126 (432,576)
Taxes payable (2,664,516) 2,794,704
Compensated absences payable (323,990) 8,314
Due to other City funds (2,715) 2,715
Claims payable 38,129 (129,828)
Accrued landfill closure and post-closure costs (530,797) 3,585,415
Environmental liability 1,475,570 13,488
Rate stabilization 1,255,080 688,924
Other liabilities 890,151 (224,367)
Total adjustments 9,516,956 8,848,264
NET CASH PROVIDED BY OPERATING ACTIVITIES 51,346,078$ 60,049,517$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
20
Notes to Financial Statements
Note 1 – Operations and Summary of Significant Accounting Policies
Operations – The City of Seattle, Seattle Public Utilities – Solid Waste Fund (the Fund) is a public utility
enterprise fund of the City of Seattle (the City). The Fund was established to account for the solid waste
activities of Seattle Public Utilities (SPU). These activities include the collection and disposal of residential
and commercial garbage, recycling, and organic material, operation of the City’s two transfer stations and
two household hazardous waste facilities, and management of the post closure maintenance and
environmental monitoring of the City’s two closed landfills. The collection, disposal and/or processing of
garbage, recycling, and organic materials is performed by private contractors, under contract with the
Fund.
On January 1, 1997, the City created SPU, which brought together under one administrative umbrella the
water, solid waste, and drainage and wastewater functions of the City. The Fund (as well as SPU’s other
funds) remains separate for accounting purposes.
SPU receives certain services from other departments and agencies of the City, including information
technology and others that are normally considered to be general and administrative. The Fund is
charged a share of these costs and during 2023 and 2022, paid $7,441,560 and $7,420,694, respectively,
to the City for its share of these services. Additionally, the Fund pays a business and occupation utility tax
to the City’s General Fund. The Fund paid $27,595,987 and $24,876,049 for these taxes in 2023 and
2022, respectively, as well as $5,618,425 and $4,918,592, respectively, in tonnage taxes on waste
collected and transferred in the City for disposal.
Solid waste collection and disposal services provided to other City departments and agencies are billed at
rates prescribed by City ordinances. The Fund collected $713,724 in 2023 and $634,170 in 2022 from the
City for solid waste services provided.
The utility billing function is co-managed by SPU, Seattle City Light (SCL), and the Seattle Information
Technology Department (ITD). SPU provides customer service through the call center and walk-in center.
ITD maintains the Customer Information System (CIS). SPU and SCL bill and reimburse each other for
these services. SPU reimburses ITD for the information technologies services mentioned above. Within
SPU, the costs and reimbursements were shared among its three utility funds (Water, Drainage and
Wastewater, and Solid Waste). The Fund received reimbursements related to the call center and walk-in
center of $2,280,537 and $2,229,900 in 2023 and 2022, respectively. The Fund paid $72,805 and
$78,261 for the utility billing services in 2023 and 2022, respectively.
The City’s Clean City program, administered by SPU staff, reduces public blight including illegal dumping,
litter, graffiti, community cleanup, rat abatement, and abandoned vehicles services. Until 2016, the
Program was funded by tonnage tax revenues with additional general fund support to maintain service
levels. In the 2016 budget process, the City made an accounting adjustment that remits all tonnage tax
revenues to the general fund and then funds the Program using only general funds.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
21
The Fund is subject to regulation by the City and the State of Washington. Service rates are authorized
by ordinances passed by the Seattle City Council. Financial reporting is reviewed by the Washington
State Auditor’s Office and conforms to accounting principles generally accepted in the United States of
America as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the
accepted standard-setting body for establishing governmental accounting and financial reporting
principles.
Basis of accounting – The Fund is accounted for on a flow of economic resources measurement focus.
Its financial statements are prepared in accordance with accounting principles generally accepted in the
United States of America as applied to governmental units using the accrual basis of accounting. With the
flow of economic resources measurement focus, all assets, deferred outflows of resources, liabilities, and
deferred inflows of resources associated with the Fund’s operations are included on the Statement of Net
Position. The operating statements present increases (revenues) and decreases (expenses) in total net
position.
Cash and equity in pooled investments – Cash resources of the Fund are combined with cash
resources of the City in a pooled investment portfolio that is managed by the City’s Finance and
Administration Services Department. The City’s investment portfolio consists of fixed income securities
authorized by the Revised Code of Washington and other applicable laws. The pool operates like a
demand deposit account in that all City departments may deposit cash at any time and withdraw cash out
of the pool without prior notice or penalty. Interest earned on the pooled investments is prorated to
individual funds at the end of each month on the basis of their average daily cash balances during the
month when interest was earned. Cash and equity in pooled investments are reported at fair market value
in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments
and for External Investment Pools, and GASB Statement No. 72, Fair Value Measurement and
Application. The Fund’s share of the pool is included in the accompanying statement of net position under
the caption “cash and equity in pooled investments.” Accordingly, the statements of cash flows reconcile
to cash and equity in pooled investments. The restricted cash and equity in pooled investments are
comprised of unexpended bond proceeds, bond reserve funds and a Rate Stabilization Account.
Receivables and unbilled revenues – Customer accounts receivable consist of amounts owed by
private individuals and businesses for goods delivered or services rendered in the regular course of
business operations. Receivables are shown net of allowances for doubtful accounts. The Fund also
accrues an amount for services that have been provided but not billed.
Allowance for doubtful accounts – A reserve has been established for uncollectible accounts
receivable based on actual historical write-off trends and knowledge of specific circumstances that
indicate collection of an account may be unlikely. As of December 31, 2023 and 2022, the Fund’s
allowance for doubtful accounts was $1,843,838 and $1,837,235, respectively.
Due from/to other funds and governments – Activity between other funds and governments that is
outstanding at the end of the year, not related to the provision of utility services, is reported as due from
other funds and governments.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
22
Materials and supplies inventory – The Fund values its inventory based on a moving average method.
The most recent total cost of an inventory item is divided by the total units of the item that remain in
inventory to determine the moving average cost of the item. The moving average cost is then applied to
all the units of the inventory item.
Regulatory assets – GASB Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, allows for certain
costs to be capitalized as a regulatory asset instead of charged to expense. A regulatory asset is
recorded when it is probable that future revenue in an amount at least equal to the capitalized costs will
be recovered through customer rates over some future period. The Fund uses regulatory accounting for
debt issuance costs because these costs are consistent with the rate methodology and, as such, will
continue to be amortized over the life of the associated bond issues. GASB Statement No. 65, Items
Previously Reported as Assets and Liabilities, would have required these costs to be expensed in the
period incurred unless the Fund executed GASB 62. The Fund uses regulatory accounting for interest
costs incurred during the construction of capital assets because these costs are consistent with the rate
methodology and, as such, will continue to be amortized over the life of the associated capital assets.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period,
would have required these costs to be expensed in the period incurred if the Fund had not utilized
regulatory accounting for these costs. In addition, the Fund also uses regulatory accounting for future
reasonably estimable landfill post closure costs and cleanup costs related to remediation of the South
Park Bus Barn site located near the South Park Landfill.
Other charges – Other charges primarily include costs related to the Comprehensive Solid Waste plan
which directs the Fund’s future operations. The Fund amortizes these charges over a 5 to 30-year period.
Capital assets – Capital assets are stated at cost or, if contributed, at fair value at the date of
contribution. Costs include direct materials, labor, and indirect costs such as engineering, supervision,
payroll taxes, pension benefits, and interest relating to the financing of projects under construction. The
cost of current repairs and maintenance is charged to expense, while the cost of improvements is
capitalized. SPU’s policy is to capitalize assets with a cost of $5,000 or more.
Construction in progress – Capitalizable costs incurred on projects that are not in use or ready for use
are held in construction in progress. When the asset is ready for use, related costs are transferred to
capital assets. Upon determining that a project will be abandoned, the related costs are charged to
expense.
Other property – Other property is stated at cost, or if contributed, the fair value at the date of
contribution. In 1990, the Fund purchased 350 acres of land surrounding the Kent-Highlands landfill,
which became part of the landfill area. Other property also includes artwork acquired through the City’s
“One Percent for Art” program, which supports the City ordinance established to direct the inclusion of
works of art in public spaces within the City.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
23
Depreciation – Capital assets are depreciated on the straight-line method over estimated useful lives as
follows:
Buildings 10–75 years
Transfer stations, scale houses, and related improvements 5–33 years
Machinery and equipment 3–20 years
Structures 10–15 years
Computer systems 3–11 years
Asset depreciation begins in the month the asset is placed in service.
Deferred outflows/inflows of resources – In addition to assets, the statement of net position, when
applicable, will report a separate section for deferred outflows of resources. It represents a consumption
of net position that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense) until then. The Fund has deferred loss on refunding debt, which qualifies for reporting in this
category. A deferred loss on refunding debt results from the difference in the carrying value of refunded
debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the
refunded or refunding debt. The Fund has also recorded deferred outflows/inflows of resources for certain
pension and other post-employment benefit activities including, the difference between projected and
actual experience, the difference between projected and actual earnings on investments, and
contributions made subsequent to the measurement date (Notes 5 and 8).
In addition to liabilities, the statement of net position, when applicable, will report a separate section for
deferred inflows of resources. It represents an acquisition of net position that applies to a future period(s)
and so will not be recognized as an inflow of resources (revenue) until then. The Fund has deferred gain
on refunding debt, which qualifies for reporting in this category. A deferred gain on refunding debt results
from the difference in the carrying value of refunded debt and its reacquisition price. This amount is
deferred and amortized over the shorter of the life of the refunded or refunding debt. In 2022, the Rate
Stabilization Account earned interest totaling $0.7 million. However, the Fund did not deposit any
additional funds into the rate stabilization account in 2023 or 2022. The Fund has also recorded deferred
inflows of resources for changes in proportion and differences between employer contributions and
proportionate share of contributions (Notes 5 and 8).
Environmental liabilities – The Fund has accrued a liability for pollution remediation activities in
accordance with GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation
Obligations. GASB 49 outlines five specific obligating events that give rise to estimating expected
pollution remediation outlays. These outlays may be accrued as a liability and expensed or, if appropriate,
capitalized.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
24
The Fund will accrue a liability if any of the following obligating events occurs:
The Fund is compelled to take pollution remediation action because of an imminent endangerment.
The Fund violates a pollution prevention-related permit or license.
The Fund is named, or evidence indicates it will be named, by a regulator as a potentially
responsible party (PRP) for remediation.
The Fund is named, or evidence indicates that it will be named, in a lawsuit to compel participation
in pollution remediation.
The Fund commences or legally obligates itself to commence pollution remediation.
Most pollution remediation outlays do not qualify for capitalization and the Fund does not anticipate
significant capitalized costs in the future. More information about environmental liabilities can be found in
Note 10 of this report.
Pensions – For purposes of measuring the net pension liability, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about the fiduciary
net position of the Seattle City Employees’ Retirement System (SCERS) are reported on the same basis
as reported by SCERS. For this purpose, benefit payments are recognized when due and payable in
accordance with the benefit terms. Investments are reported at fair value.
Postemployment Benefits Other Than Pensions (OPEB) – For purposes of measuring the OPEB
liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB
expense, information about the benefit have been determined on the same basis as they are reported by
the City. For this purpose, benefit payments are recognized when due and payable in accordance with
the benefit terms.
Compensated absences – Employees earn vacation based upon their date of hire and years of service
and may accumulate earned vacation up to a maximum of 480 hours. Unused vacation at retirement or
normal termination is considered vested and payable to the employee. Earned but unused vacation is
accrued as a liability of the Fund. Employees also earn up to 12 days of sick leave per year and may
accumulate sick leave balances without limit.
Employees who submit the required documentation when represented by the Coalition of City Unions are
paid 35% of the value of unused sick leave upon retirement as part of the Health Reimbursement
Arrangement – Voluntary Employees’ Beneficiary Association (HRA-VEBA) program. If the employee fails
to submit the required documentation by their last working day of employment, their sick leave balance is
forfeited.
Retiring employees who are ineligible to participate in the HRA-VEBA program may elect to receive 25%
of the value of unused sick leave upon retirement or defer receipt of 35% of the value of their sick leave
balance to the City’s 457 Plan and Trust, subject to the year-to-date or life-to-date limitations on deferrals
and contributions. If the 35% value of the sick leave balance exceeds the maximum amount deferred to
the City’s 457 Plan and Trust, the employee shall receive a taxable cash payment. The cash payment is
equal to the amount by which the 25% value of the sick leave balance exceeds the 35% that was allowed
to be deferred. The Fund records a liability for estimated sick leave payments.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
25
Operating revenues – Revenues are recorded through cycle billings rendered to customers monthly or
bimonthly. Amounts billed but not earned at year-end are recorded as unearned revenues on the Fund’s
statement of net position. The Fund accrues and records unbilled collection service revenues in the
financial statements for services provided from the date of the last billing to year end.
Other operating revenues include revenues generated from the Fund’s two transfer stations. Transfer
station revenues are collected from self-haul customers who deliver their garbage, yard waste, wood
waste, appliances, and tires for a fee to the two transfer stations.
Operating expenses – The Fund’s operating expenses include the cost of sales and services,
administrative expenses, depreciation on capital assets and amortization of deferred assets.
Taxes – The Fund paid 14.2% City utility tax on residential and commercial revenues, net of yard waste,
recycling, and other costs related to waste reduction. The Fund also is charged a tax by the City based on
solid waste tonnage for operating transfer stations and for collecting garbage within the City of Seattle.
The City tonnage tax rate of $13.27 per ton remained the same as 2021. In addition, the Fund paid a
1.75% business and occupation tax, a 0.484% wholesale tax, and a 0.471% retail tax to the state on the
services provided to residential, commercial, and transfer station customers. The rates remained the
same as 2022. The state refuse tax rate of 3.60% remained the same as 2022.
Nonoperating revenues and expenses – This includes the nonoperating revenues and expenses that
arise from transactions not related directly to the major income-earning operations of the utility and are of
a recurring nature. Major items are the investment and interest income, interest expense, amortization of
debt expenses, amortization of debt discounts, premiums and refunding losses, sale of capital assets,
and rental income.
Net position – The statement of net position reports all financial and capital resources. Assets and
deferred outflows of resources minus liabilities and deferred inflows of resources is net position. There
are three components of net position: net investment in capital assets, restricted, and unrestricted. Net
investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the
outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the
acquisition, construction, or improvement of those assets. Net position is restricted when constraints
placed on net position use are either (1) externally imposed by creditors (such as through debt
covenants), grantors, contributors, or laws or regulations of other governments, or (2) imposed by law
through constitutional provisions or enabling legislation.
The Fund’s restricted net position relates to certain restricted assets that are offset by related liabilities.
Unrestricted net position is the portion that is not “net investment in capital assets” or “restricted.”
Arbitrage rebate requirement – The Fund is subject to the Internal Revenue Code (IRC), Section 148(f),
related to its tax-exempt revenue bonds. The IRC requires that earnings on gross proceeds of any
revenue bonds that are in excess of the amount prescribed be surrendered to the Internal Revenue
Service. As such, the Fund would record such a rebate as a liability. The Fund had no arbitrage liability as
of December 31, 2023 and 2022.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
26
Accounting standard changes – In May 2020, GASB issued Statement No. 96 (GASB 96),
Subscription-Based Information Technology Arrangements (SBITA), and it was effective for the Fund for
reporting periods beginning after June 15, 2022. Under this standard, software subscriptions are treated
as right-to-use subscription assets, as intangible assets, with a corresponding subscription liability. The
Fund adopted the provisions of this statement retroactively during 2023; as the impact to the 2022
financial statements was immaterial, the prior year financial statements were not restated. Adoption of
this standard increase lease liabilities by $59,360 and right to use assets by $72,484 in 2023.
In March 2020, GASB issued Statement No. 94 (GASB 94), Public-Private and Public-Public Partnerships
and Availability Payment Arrangements, and it was effective for the Fund for reporting periods beginning
after June 15, 2022. This standard provides accounting and financial reporting guidance related to a wide
variety of arrangements between a government(s) and another party that are engaged in providing
services to a government’s constituents as well as guidance on accounting and financial reporting for
availability payment arrangements. In 2023, Seattle Public Utilities has no arrangements that fall under
this standard.
Use of estimates – The preparation of the financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect amounts reported in the financial statements. Estimates and assumptions are
used to record landfill closure and post closure costs, unbilled collection services, allowance for doubtful
accounts, fair market value of cash and equity in pooled investments, accrued sick leave, capitalized
interest, depreciation, environmental liabilities, risk liabilities, pension liability, and other contingencies.
Changes in these estimates and assumptions may have a material impact on the financial statements.
Significant risks and uncertainty – The Fund is subject to certain business risks that could have a
material impact on future operations and financial performance. These risks include, but are not limited to,
weather and natural disaster-related disruptions, collective bargaining labor disputes, Environmental
Protection Agency regulations, and federal government regulations or orders concerning the operation,
maintenance, and licensing of facilities.
Reclassifications – Certain reclassifications have been made to the financial statements and related
footnote presentations. These reclassifications had no effect on the operating results of the Fund.
Note 2 – Cash and Equity in Pooled Investments
Per Seattle Municipal Code, SMC 5.06.010 Investment Authority, the City’s Director of Finance and
Administrative Services (FAS) is authorized to invest all moneys in the City Treasury. Cash resources of
the Department are combined with cash resources of the City to form a pool of cash that is managed by
the City’s Department of FAS. Under the City’s investment policy, all temporary cash surpluses in the pool
are invested. The Fund’s share of the pool is included on the balance sheets as Cash and Equity in
Pooled Investments or as restricted assets. The pool operates like a demand deposit account in that all
departments, including the Fund, may deposit cash at any time and can also withdraw cash, out of the
pool, up to the amount of the Fund’s balance, without prior notice or penalty. Accordingly, the statements
of cash flows reconcile to cash and equity in pooled investments.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
27
Custodial credit risk – deposits – Custodial credit risk of deposits is the risk that in the event of bank
failure for one of the City’s depository institutions, the City’s deposits or related collateral securities may
not be returned in a timely manner.
As of December 31, 2023 and 2022, the City did not have custodial credit risk. The City’s deposits are
covered by insurance provided by the Federal Deposit Insurance Corporation (FDIC) and the National
Credit Union Association (NCUA) as well as protection provided by the Washington State Public Deposit
Protection Commission (PDPC) as established in RCW 39.58. The PDPC makes and enforces
regulations and administers a program to ensure public funds deposited in banks and thrifts are protected
if a financial institution becomes insolvent. The PDPC approves which banks, credit unions, and thrifts
can hold state and local government deposits and monitors collateral pledged to secure uninsured public
deposits. This secures public treasurers' deposits when they exceed the amount insured by the FDIC or
NCUA by requiring banks, credit unions, and thrifts to pledge securities as collateral.
As of December 31, 2023 and 2022, the City held sufficient cash in its vault for operations. Additional
small amounts of cash were held in departmental revolving fund accounts with the City’s various custodial
banks, all of which fell within the NCUA/FDIC’s $250,000 standard maximum deposit insurance amount.
Any of the City’s cash not held in its vault, or a local depository, was held in the City’s Consolidated Cash
Pooled Investment Portfolio (investment pool), and at the close of every business day, any cash
remaining in the operating fund is swept into an overnight repurchase agreement that matures the next
day.
Custodial credit risk – investments – Custodial credit risk for investments is the risk that, in the event of
failure of the counterparty, the City will not have access to, or be able to recover, its investments or
collateral securities that are in the possession of an outside party. The City mitigates custodial credit risk
for its investments by having its investment securities held by the City’s contractual custodial agent. The
City maintains a custody relationship with Principal Custody Solutions under the State of Washington’s
statewide custody provider program arranged by the State Treasurer’s Office. The City mitigates
counterparty risk by settling trades through its custodian on a delivery-versus-payment method.
By investment policy, the City maintains a list of approved securities dealers for transacting business. The
City also conducts its own due diligence as to the financial wherewithal of its counterparties.
Credit risk – Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. Some of the City’s pooled investments have credit risk from holdings in commercial paper,
corporate notes, and taxable municipal bonds. The City may not hold more than 50% of the Pool’s total
assets in these credit sensitive sectors.
State statute defines the investments in commercial paper and corporate notes as a “credit portfolio”. The
credit portfolio may not exceed 25 percent of the Pool’s market value. Credit investments must be
diversified by sector and industry. No single issuer shall exceed 3 percent of the Pool’s market value.
Commercial Paper investments may not have maturities exceeding 270 days and must hold the highest
short-term credit rating by all the major credit rating agencies that rate the issuer at the time of purchase.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
28
Corporate notes must mature within 5.5 years from the time of purchase and must be rated at least weak
single-A or better by all the major rating agencies that rate the note at the time of purchase. No single
issuer rated AA or better may exceed 3 percent of the Pool’s market value. No single issuer rated in the
single-A category may exceed 2 percent of the Pool’s market value.
Municipal bonds must have a credit rating of weak single-A or better by all the major rating agencies that
rate the issuer at the time of purchase. No single issuer may exceed 5 percent of the Pool’s market value.
Interest rate risk – Interest rate risk is the risk that changes in interest rates over time will adversely
affect the fair value of an investment. To mitigate interest rate risk, the City intentionally immunizes its
known and expected cash flow needs. To best accomplish meeting its investment objectives, the City has
divided the Pool into two separate portfolios: Operating and Strategic.
The Operating Portfolio is invested to meet reasonably expected liquidity needs over a period of twelve to
eighteen months. This portfolio has low duration and high liquidity. Consistent with this profile, and for the
purpose of comparing earnings yield, its benchmark is the net earnings rate of the State of Washington’s
Local Government Investment Pool (LGIP).
The Strategic Portfolio consists of cash that is in excess of known and expected liquidity needs.
Accordingly, this portfolio is invested in debt securities with longer maturities than the Operating Portfolio,
which over a market cycle, is expected to provide a higher return and greater investment income.
Consistent with this profile, and for the purpose of comparing duration, yield and total return, the
benchmark for the Strategic portfolio is the Barclays U.S. Government 1–7-year index. The duration of the
Strategic Portfolio is targeted between 75% and 125% of the benchmark.
To further mitigate interest rate risk a minimum of 60% of the Operating Portfolio and 30% of the Strategic
Portfolio must be invested in asset types with high liquidity, specifically U.S. Government obligations, U.S.
Government Agency obligations, LGIP, Demand Accounts, Repo, Sweep, and Commercial Paper.
Investments – The Fund’s cash resources may be invested by FAS separate from the cash and
investments pool. Investments are managed in accordance with the City’s Statement of Investment
Policy, with limits and restrictions applied at the City-wide level rather than to specific investments of the
Fund. As of December 31, 2023 and 2022, the Fund did not have any dedicated investments. The City’s
Statement of Investment Policy was modified on January 1, 2018, with an effective date of March 8, 2018.
There have been no subsequent changes to the policy.
The City of Seattle has three objectives in managing its investments that define its risk profile and guide
implementation of its investment strategy. In order of importance, they are Safety of Principal,
Maintenance of Liquidity, and Return on Investment.
The City follows a set of Standards of Care when it comes to its investments that include the following:
Social Policies: A City social policy shall take precedence over furthering the City’s financial
objectives when expressly authorized by City Council resolution, except where otherwise provided
by law or trust principles.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
29
Ethics and Conflict of Interest: Investment officers shall comply with the City’s Ethics Code (SMC
4.16.080) and annually submit a Financial Interest Statement to the City’s Ethics & Elections
Commission that identifies any potential financial interest that could be related to the performance
of the City’s investment portfolio.
Delegation of authority – The Director of Finance and Administrative Services has delegated
management responsibility for the City’s investment program to the Director of Finance who has
designated day to day management responsibility to investment officers under the supervision of the
City’s Treasury Services Director. No persons may engage in an investment transaction except as
provided under the terms of the City Statement of Investment Policy and the procedures established
therein.
Fair value of pooled investments – The City reports investments at fair value and categorizes its fair
value measurements within the fair value hierarchy established by GASB Statement No. 72, Fair Value
Measurement and Application. Fair value of the City’s pooled investments fluctuates with changes in
interest rates and the underlying size of the pooled investment portfolio. To mitigate interest rate risk in
the City’s pooled investment portfolio, the City typically holds its investments to maturity and manages its
maturities to ensure sufficient monthly cash flow to meet its liquidity requirements.
As of December 31, 2023, the City held $406.4 million on deposit in the Washington State LGIP managed
by the Office of the Washington State Treasurer. The City’s investments in the LGIP are reported at
amortized cost which approximates fair value. It is overseen by the Office of the State Treasurer, the
State Finance Committee, the Local Government Investment Pool Advisory Committee, and the
Washington State Auditor’s Office.
The City reports its investments at fair value and categorizes its fair value measurements within the fair
value hierarchy established by U.S. GAAP. Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction amongst market participants at the
measurement date (an exit price). Fair value is a market-based measurement for a particular asset or
liability based on assumptions that market participants would use in pricing the asset or liability. Such
assumptions include observable and unobservable inputs of market data, as well as assumptions about
risk and the risk inherent in the inputs to the valuation technique.
Valuation techniques to determine fair value should be consistent with one or more of three approaches:
the market approach, cost approach, and income approach. The City uses a combination of the market
and cost approach for the valuation of pooled investments.
The City’s overnight repurchase agreement with Wells Fargo Bank, N.A., and investment in the State of
Washington (LGIP) are accounted for at cost. The LGIP is an external investment pool and is measured
at a net asset value (NAV) per share of $1. The remainder of the City’s investments are purchased in the
over-the-counter U.S. bond market and accounted for at market.
The City uses market pricing for its over-the-counter investments as provided by its contractual custodial
agent, Wells Fargo Institutional Retirement & Trust.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
30
As a basis for considering market participant assumptions in fair value measurements, GASB Statement
No. 72 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value into three broad levels as follows:
Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the Fund can access at the measurement date.
Level 2 – inputs are inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3 – inputs are unobservable inputs for the asset or liability. Valuation adjustments such as for
nonperformance risk or inactive markets could cause an instrument to be classified as Level 3 that
would otherwise be classified as Level 1 or Level 2.
As of December 31, 2023, the City’s pooled investments were categorized within the fair value hierarchy
as follows (in thousands):
Fair Value Weighted
as of Average
December 31, Level 1 Level 2 Level 3 Maturity
2023 Inputs Inputs Inputs (Days)
U.S. Government Agency Securities 1,417,009$ -$ 1,417,009$ -$ 404
U.S. Treasury and U.S. Government-Backed Securities 1,240,539 1,240,539 - - 679
Local Government Investment Pool 406,431 406,431 - - -
U.S. Government Agency Mortgage-Backed Securities 312,777 - 312,777 - 1,754
Municipal Bonds 150,811 - 150,811 - 772
Corporate Bonds 67,267 - 67,267 - 537
International Bank for Reconstruction and Development 48,924 - 48,924 - 247
Repurchase Agreements 17,297 17,297 - - 9,497
3,661,055$ 1,664,267$ 1,996,788$ -$
Weighted Average Maturity of the City’s Pooled Investments 626
Fair Value Measurements Using
Investments
The City’s investments in US Treasuries are valued as Level 1. The City’s remaining investments are
valued as Level 2 or measured at amortized cost. The City does not invest in securities that require
Level 3 inputs.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
31
As of December 31, 2022, the City’s pooled investments were categorized within the fair value hierarchy
as follows (in thousands):
Fair Value Weighted
as of Average
December 31, Level 1 Level 2 Level 3 Maturity
2022 Inputs Inputs Inputs (Days)
U.S. Government Agency Securities 1,204,123$ -$ 1,204,123$ -$ 662
U.S. Treasury and U.S. Government-Backed Securities 1,182,412 1,182,412 - - 765
Local Government Investment Pool 415,588 415,588 - - -
U.S. Government Agency Mortgage-Backed Securities 274,968 - 274,968 - 2,126
Municipal Bonds 164,470 - 164,470 - 840
Commercial Paper 78,983 78,983 16
Corporate Bonds 72,116 - 72,116 - 810
International Bank for Reconstruction and Development 47,993 - 47,993 - 1,165
Repurchase Agreements 46,391 46,391 - - -
3,487,044$ 1,644,391$ 1,842,653$ -$
Weighted Average Maturity of the City’s Pooled Investments 729
Fair Value Measurements Using
Investments
As of December 31, 2023 and 2022, the Fund’s share of the City Pool was as follows:
2023 2022
Cash and equity in pooled investments 198,363,789$ 158,692,821$
Restricted cash and equity in pooled investments 48,523,219 47,300,427
246,887,008$ 205,993,248$
Balance as a percentage of City Pool cash and investments 6.7% 5.9%
Concentration of credit risk – Concentration risk is the risk of loss attributed to the magnitude of
investments in a single issuer. The City manages concentration risk by limiting its investments in any one
issuer in accordance with the City’s investment policy and state statutes. The policy limits vary for each
investment category. State statute and the City’s Statement of Investment Policy do not stipulate
concentration limits for holdings of U.S. Government or U.S. Government Agency Obligations. However,
as noted under credit risk, the City’s Statement of Investment Policy outlines maximum percentage
allocations for municipal securities, commercial paper as well as bank notes and corporate notes.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
32
The City’s investments in which five percent or more is invested in any single issuer, as of December 31
are as follows (in thousands):
Percent of Percent of
Total Total
Issuer Fair Value Investments Fair Value Investments
United States Government 1,240,539$ 34% 1,182,412$ 34%
Federal Home Loan Bank 572,730 16% 355,558 10%
Local Government Investment Pool 406,431 11% 415,588 12%
Federal National Mortgage
Association 293,713 8% 331,923 10%
Federal Farm Credit Bank 291,404 8% 299,433 9%
Federal Home Loan Mortgage Corp 287,136 8% 191,788 6%
Federal Agriculture Mortgage Corp 248,019 7% 263,760 8%
2023 2022
Note 3 – Capital Assets
Capital assets activity for the year ended December 31, 2023, consisted of the following:
Beginning Additions and Retirements and Ending
Balance Transfers In Transfers Out Balance
Buildings 140,220,629$ -$ -$ 140,220,629$
Structures 13,837,233 - - 13,837,233
Machinery and equipment 59,345,014 3,596,884 (1,875,492) 61,066,406
Computer systems 33,795,552 1,210,064 (27,470) 34,978,146
Intangible right-to-use 45,715 98,800 - 144,515
Total capital assets, excluding land 247,244,143 4,905,748 (1,902,962) 250,246,929
Less accumulated depreciation
and amortization (87,657,305) (11,185,574) 1,901,204 (96,941,675)
159,586,838 (6,279,826) (1,758) 153,305,254
Construction in progress 5,330,853 6,365,860 (5,619,879) 6,076,834
Land and land rights 26,882,856 - - 26,882,856
Artwork 1,315,436 43,230 - 1,358,666
Property held for future use 1,529,982 - - 1,529,982
Capital assets, net 194,645,965$ 129,264$ (5,621,637)$ 189,153,592$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
33
Capital assets activity for the year ended December 31, 2022, consisted of the following:
Beginning Additions and Retirements and Ending
Balance Transfers In Transfers Out Balance
Buildings 140,220,629$ -$ -$ 140,220,629$
Structures 13,837,233 - - 13,837,233
Machinery and equipment 71,621,743 4,191,821 (16,468,550) 59,345,014
Computer systems 32,926,055 3,861,529 (2,992,032) 33,795,552
Intangible right-to-use 45,715 - - 45,715
Total capital assets, excluding land 258,651,375 8,053,350 (19,460,582) 247,244,143
Less accumulated depreciation
and amortization (96,670,054) (10,180,118) 19,192,867 (87,657,305)
161,981,321 (2,126,768) (267,715) 159,586,838
Construction in progress 6,531,946 7,245,631 (8,446,724) 5,330,853
Land and land rights 26,882,856 - - 26,882,856
Artwork 1,276,701 38,735 - 1,315,436
Property held for future use 1,529,982 - - 1,529,982
Capital assets, net 198,202,806$ 5,157,598$ (8,714,439)$ 194,645,965$
During 2023 and 2022, the Fund capitalized interest costs as a regulatory asset relating to construction of
$169,601 and $252,727, respectively.
The Fund, as lessee, has entered into various leases for building and equipment with lease terms
expiring in 2025. Leases that have a maximum possible lease term that are noncancelable by both lessee
and lessor, have a term of more than 12 months, and a present value greater than $5,000 are considered
to be “right to use” assets. Unless explicitly stated in the lease agreement, the discount rate used to
calculate lease right-of-use assets and liabilities in which the Fund acts as lessee is the City’s incremental
borrowing rate based on the expiring date. The rate used for leases during the years ended
December 31, 2023 and 2022 was 0.38% .
Effective January 1, 2022, SPU adopted GASB 96, as discussed in more detail in Note 1. The Fund has
one software agreement with the term ending in 2026. Any software agreement that is negotiated by
Seattle IT that is for the benefit of multiple departments, will be accounted for at the City level by Seattle
IT and is excluded by the Fund. The discount rate used for the software agreement during the year ended
December 31, 2023 was 2.70%.
Minimum payments under the leases are as follows:
Years Ending December 31,
Principal Interest Total
2024 31,711$ 1,384$ 33,095$
2025 27,763 677 28,440
2026 19,137 43 19,180
78,611$ 2,104$ 80,715$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
34
Note 4 – Revenue Bonds
The Fund issues bonds to provide financing for capital improvements. Payment of debt service on the
bonds is derived solely from the revenues generated by the Fund. The Fund has set aside $8,096,580 in
a debt service reserve fund and has obtained reserve insurance policies to meet the remainder of its
reserve requirements. The total bonds outstanding as of December 31, 2023, were $149,625,000.
Revenue bonds outstanding as of December 31, 2023 and 2022, consisted of the following Solid Waste
bonds:
Issuance Maturity Interest Original Issue
Name of Issue
Date Years Rates Amount 2023 2022
2014 Improvement and Refunding Bonds 6/12/2014 2015-2039 2.0 - 5.0% 95,350,000$ 65,435,000$ 70,345,000$
2015 Improvement Bonds 6/25/2015 2016-2040 2.0 - 5.0% 35,830,000 28,645,000 29,725,000
2016 Improvement and Refunding Bonds 6/30/2016 2017-2041 4.0 - 5.0% 35,335,000 32,245,000 32,755,000
2021 Improvement and Refunding Bonds 7/1/2021 2021-2036 4.0 - 5.0% 25,670,000 23,300,000 24,560,000
192,185,000$ 149,625,000$ 157,385,000$
Bonds Outstanding
Minimum debt service requirements to maturity on revenue bonds are as follows:
Year Ending December 31, Principal Interest Total
2024 8,160,000$ 6,478,256$ 14,638,256$
2025 8,585,000 6,061,381 14,646,381
2026 9,020,000 5,623,006 14,643,006
2027 9,470,000 5,172,181 14,642,181
2028 9,935,000 4,707,094 14,642,094
2029 - 2033 56,175,000 16,239,734 72,414,734
2034 - 2038 36,950,000 6,057,106 43,007,106
2039 - 2043 11,330,000 449,000 11,779,000
149,625,000$ 50,787,758$ 200,412,758$
The following table shows the revenue bond activity during the year ended December 31, 2023:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Bonds payable, revenue bonds 157,385,000$ -$ (7,760,000)$ 149,625,000$ 8,160,000$
Add (deduct) deferred amounts
Issuance premiums 20,511,851 - (1,291,833) 19,220,018 -
Total bonds payable 177,896,851$ -$ (9,051,833)$ 168,845,018$ 8,160,000$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
35
The following table shows the revenue bond activity during the year ended December 31, 2022:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Bonds payable, revenue bonds 164,680,000$ -$ (7,295,000)$ 157,385,000$ 7,760,000$
Add (deduct) deferred amounts
Issuance premiums 21,803,684 - (1,291,833) 20,511,851 -
Total bonds payable 186,483,684$ -$ (8,586,833)$ 177,896,851$ 7,760,000$
Financial covenants – The revenue bonds contain certain financial covenants, the most significant of
which requires the Fund to maintain Reserve Subaccount at the least of (i) Maximum Annual Debt
Service on all parity bonds outstanding at the time of calculation, (ii) 1.25 times adjusted annual debt
service on all parity bonds outstanding at the calculation, or (iii) the sum of 10% of the proceeds of each
series of parity bonds then outstanding. Management believes the Fund was in compliance with all debt
covenants as of December 31, 2023. For more information, see Other Information (page 52).
Defeasance of debt – Subsequent to year end, on April 1, 2024, the Fund used $61.5 million in
operating cash to defease the remaining 2014 bonds.
Note 5 – Postemployment Benefit Plans
Deferred compensation – The City offers all of its employees a deferred compensation plan (the Plan)
created in accordance with IRC Section 457. The Plan permits employees to defer a portion of their
salaries until future years. The deferred compensation is paid to employees upon termination, retirement,
death, or unforeseen emergency.
The Plan is an eligible deferred compensation plan under Section 457 of the IRC of 1986, as amended,
and a trust exempt from tax under IRC Sections 457(g) and 501(a). The Plan is operated for the exclusive
benefit of participants and their beneficiaries. No part of the corpus or income of the Plan shall revert to
the City or be used for, or diverted to, purposes other than the exclusive benefit of participants and their
beneficiaries. The Plan is not reported in the financial statements of the City or the Fund.
It is the opinion of the City’s legal counsel that the City has no liability for investment losses under the
Plan. Under the Plan, participants select investments from alternatives offered by the Plan Administrator,
who is under contract with the City to manage the Plan. Investment selection by a participant may be
changed from time to time. The City does not manage any of the investment selections. By making the
selection, participants accept and assume all risks inherent in the Plan and its administration.
Other postemployment benefits plan description – Health care plans for active and retired employees
are administered by the City of Seattle as single-employer defined benefit public employee health care
plans.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
36
Employees retiring under the City may continue their health insurance coverage under the City’s health
insurance plans for active employees. When a retired participant dies, the spouse remains fully covered
until age 65 and covered by the Medicare supplement plan thereafter. Employees that retire with disability
retirement under the City may continue their health coverage through the City with same coverage
provisions as other retirees. Eligible retirees self-pay 100 percent of the premium based on blended rates
which were established by including the experience of retirees with the experience of active employees
for underwriting purposes. The postemployment benefit provisions are established and may be amended
by ordinance of the Seattle City Council and as provided in Seattle Municipal Code 4.50.020. The City
provides an implicit subsidy of the post-retirement health insurance costs and funds the subsidy on a pay-
as-you-go basis.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events far into the future. Actuarially determined amounts are subject to continual revision
as actual results are compared to past expectations and new estimates are made about the future.
Calculations are based on the types of benefits provided under the terms of the substantive plan at the
time of each valuation and on the pattern of sharing of costs between the employer and plan members to
that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the
potential effects of legal or contractual funding limitations on the pattern of cost sharing between the
employer and plan members in the future. Actuarial calculations reflect a long-term perspective.
Consistent with that perspective, actuarial methods and assumptions used include techniques that are
designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets.
Based on the latest biennial actuarial valuation date, the significant methods and assumptions are as
follows:
Actuarial data and assumptions – The demographic assumptions of mortality, termination, retirement,
and disability are set equal to the assumptions used for City pension actuarial valuations based on a
Seattle City Employees’ Retirement System Experience Report for the period 2018–2021.
Actuarial data and assumptions 2023
Valuation and measurement date January 1, 2023
Actuarial cost method Entry age normal
Amortization method Level dollar
Discount rate 3.72%
Health care cost trend rates – medical
6.75% in 2023, increasing to 6.47% in 2024, and
decreasing by varying amounts until 2030 thereafter
Health care cost trend rates – Rx 8.00% in 2023 and 7.56% in 2023, and
decreasing by varying amounts until 2030 thereafter
Participation 25% of active employees who retire participate
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
37
Mortality
General Service (Actives)
PubG-2010 Employee Table multiplied by 95%
Rates are projected generationally using Scale MP-2021 ultimate rates
General Service (Retirees)
PubG-2010 Retired Mortality Table multiplied by 95%
Rates are projected generationally using Scale MP-2021 ultimate rates
Marital status – 25% of members electing coverage: married or have a registered domestic partner. Male
spouses two years older than their female spouses.
Health care claims development – The sample per capita claim cost assumptions shown below by age,
benefit, and plan represent the true underlying baseline experience estimated for the City of Seattle’s
sponsored postretirement benefits and costs.
Age
Aetna
Preventive
Plan
Aetna
Traditional
Kaiser
Standard
Kaiser
Deductible
50 14,137$ 12,657$ 8,212$ 6,639$
55 17,449 15,622 10,136 8,195
60 21,640 19,375 12,571 10,163
Pre-65 Medical, RX, and Admin Combined
The average medical and prescription drug per capita claims costs were developed from 2023 calendar
year self-funded premium rates. Premium-equivalent rates were provided by City of Seattle‘s health
pricing actuary. The average medical and prescription drug per capita “adult-equivalent” claims costs
were based on the respective pre-65 enrollment weighted average of the 2023 four-tier rate structure
including the add-on cost of dependent children and trended back from 2023 to 2022 to be centered at
the mid-point of the annual period following the valuation date. Average medical/Rx per capita claims
costs were then age-adjusted based on the demographics of the rating population, and the assumed
health care aging factors shown in the table below.
Models are used to estimate underlying per capita medical and drug claims costs, subsequently utilized
as assumption inputs for valuation models used to develop the liabilities for the 2022 and future
valuations. The Aon consulting team leveraged expertise of Health experts within Aon as it relates to
reviewing the models used for development of the per capita claims costs and future trend rates.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
38
Morbidity factors – The claim costs for medical and prescription drugs were assumed to increase with
age according to the table below.
Age Medical Rx Composite
40–44 3.0% 4.8% 3.3%
45–49 3.7% 4.7% 3.8%
50–54 4.2% 4.7% 4.3%
55–59 4.4% 4.6% 4.4%
60–64 3.7% 4.6% 3.8%
Other considerations – Active employees with current spouse and/or dependent coverage elect same
plan and coverage. After retirement, it is assumed that children will have aged off coverage and will have
$0 liability.
OPEB liability – The Fund reported an OPEB liability of approximately $0.9 million in 2023 and
$1.0 million in 2022. The Fund’s proportionate share of the change in the OPEB liability was 1.26% and
1.51% for the years ended December 31, 2023 and 2022, respectively. Based on the actuarial valuation
date of January 1, 2023, details regarding the Fund’s Total OPEB Liability as of December 31, are shown
below.
2023
2022
Changes recognized for the fiscal year:
Service cost 44,996$ 68,197.00$
Interest on the total OPEB liability 15,102 23,461
Differences between expected and actual experience - (242,098)
-
Changes of assumptions (101,150) (23,511)
Benefit payments (30,765) (45,919)
Other changes (8,577) 6,393
Net changes (80,394) (213,477)
Balance recognized at December 31, 2022 979,853 1,193,330
Balance recognized at December 31, 2023 899,459$ 979,853$
Total OPEB Liability at
December 31,
The Fund recorded an expense for OPEB of $11,556 in 2023 and $46,916 in 2022. The Health Care
Subfund of the General Fund is reported in The City of Seattle’s Comprehensive Annual Financial Report.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
39
Discount rate and healthcare cost trend rates – The discount rate used to measure the total OPEB
liability is 3.72% for 2023 and 2.06% for 2022. The following tables present the sensitivity of OPEB
liability calculation to a 1% increase and a 1% decrease in the discount rate used to measure the total
OPEB liability:
2023 2022
Discount rate
1% decrease 958,391$ 1,058,321$
Current discount rate 899,459 979,853
1% increase 846,073 907,851
Discount Rate Sensitivity
OPEB Liability at
December 31,
The following table presents the sensitivity of net Health Plan OPEB liability calculation to a 1% increase
and a 1% decrease in the healthcare cost trend rates used to measure the total Health Plan OPEB
liability:
2023 2022
Discount rate
1% decrease 825,998$ 882,509$
Trend rate 899,459 979,853
1% increase 986,952 1,096,119
Healthcare Cost Trend Rate Sensitivity
OPEB Liability at
December 31,
Deferred outflows of resources and deferred inflows of resources related to OPEB – The following
table presents information about the OPEB-related deferred outflows of resources and deferred inflows of
resources for the Fund at December 31, 2023.
Deferred Deferred
Outflows Inflows
Difference between actual and expected experience 157,031$ 191,741$
Assumption changes 38,929 369,697
Contributions made in 2023 after measurement date 31,002 -
Total 226,962$ 561,438$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
40
The following table presents information about the OPEB-related deferred outflows of resources and
deferred inflows of resources for the Fund at December 31, 2022.
Deferred Deferred
Outflows Inflows
Difference between actual and expected experience 186,861$ 215,869$
Assumption changes 44,421 331,267
Contributions made in 2022 after measurement date 36,802 -
Total 268,084$ 547,136$
The Fund’s contributions made in 2023 in the amount of $31,002 are reported as deferred outflows of
resources and will be recognized as a reduction of the net OPEB liability in the year ended December 31,
2024. Other deferred inflows and outflows related to OPEB will be recognized in the future as shown in
the following table. Note that additional future deferred outflows and inflows of resources may impact
these amounts.
Year Ending December 31, Amortization
2024 (59,678)$
2025 (59,678)
2026 (59,678)
2027 (46,259)
2028 (40,110)
Thereafter (100,075)
Total (365,478)$
The Health Care Sub Fund of the General Fund is reported in the City’s Annual Comprehensive Financial
Report, which can be obtained by writing the Department of Finance, City of Seattle, PO Box 94747,
Seattle, Washington 98124-4747 or www.seattle.gov/financial-services/comprehensive-annual-financial-
report.
Note 6 – Claims Payable
The City and the Fund are self-insured for certain losses arising from personal and property damage
claims by third parties and for casualty losses to the Fund’s property. Liabilities for identified claims and
claims incurred but not reported have been recorded by the Fund.
For 2023 and 2022, liabilities for workers’ compensation claims as well as other claims are discounted
over a 15-year period at the City’s rate of return on investments, 3.12% and 1.73%, respectively. Claims
expected to be paid within one year are $296,007 and $277,900 as of December 31, 2023 and 2022,
respectively.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
41
The schedules below present the changes in the liability for workers’ compensation claims and other
claims (risk financing liabilities) as of December 31:
2023 2022
Beginning liability, discounted 814,149$ 943,977$
Payments (346,704) (351,973)
Incurred claims and change in estimate 384,833 222,145
Ending liability, discounted 852,278$ 814,149$
The Fund is involved in litigation from time to time as a result of operations.
Note 7 – Compensated Absences
The Fund has recorded a liability for earned but unused compensatory and vacation leave, as well as
estimated sick leave payments calculated based on the termination payment method. The schedules
below show the compensated absences activity during the years ended December 31:
2023 2022
Beginning liability 1,898,694$ 1,890,380$
Additions 1,336,461 1,767,426
Reductions (1,660,451) (1,759,112)
Ending liability 1,574,704$ 1,898,694$
Note 8 – Pension Benefit Plan
Plan description – The Seattle City Employees’ Retirement System (the System) is a cost-sharing
multiple employer pension plan covering employee of the City of Seattle and is administered in
accordance with Chapter 4.36 of the Seattle Municipal Code.
The System is governed by the Retirement System Board of Administration (the Board). The Board
consists of seven members including the Chair of the Finance Committee of the Seattle City Council, the
City of Seattle Finance Director, the City of Seattle Personnel Director, two active members and one
retired member of the System who are elected by other System members, and one outside board
member who is appointed by the other six board members. Elected and appointed board members serve
for three-year terms.
Beginning with employees with hire dates of January 1, 2017, or later, all new members are enrolled in
SCERS Plan II, which has contribution and benefit calculation rates different than the original SCERS I
Plan. All permanent Fund employees are eligible to participate in the system.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
42
System benefits – Service retirement benefits are calculated on the basis of age, salary, and service
credit.
SCERS I – The System provides retirement, death, and disability benefits. Retirement benefits vest after
five years of credited service, while death and disability benefits vest after ten years of service. Members
are eligible for retirement benefits after 30 years of service; at age 52 after 20 years of service; at age 57
after ten years of service; and at age 62 after five years of service. Annual retirement benefits are
calculated as 2% multiplied by years of creditable service, multiplied by average salary, based on the
highest 24 consecutive months, excluding overtime. Members who retire before meeting the age and/or
years of service requirement receive a 0.1% reduction for each year that retirement precedes the date of
eligibility. Retirement benefits vest after 5 years of credited service.
SCERS II – Members are eligible for retirement benefits at age 55 after 20 years of service, at age 57
after 10 years of service, and at age 60 after 5 years of service. Annual retirement benefits are calculated
as 1.75% multiplied by years of creditable service, multiplied by average salary, based on the highest 60
consecutive months, excluding overtime. Members who retire before meeting the age and/or years of
service requirement receive a 0.1% reduction for each year that retirement precedes the date of eligibility.
Retirement benefits vest after 5 years of credited service.
Member and employer contributions – member and employer contributions are:
YEAR SCERS I SCERS II
Member Contribution 2023 10.03% 7.00%
2022 10.03% 7.00%
Employer Contribution 2023 15.91% 15.56%
2022 16.20% 15.72%
Member and employer rates are established by the Seattle Municipal Code Chapter 4.36. The Fund’s
contributions to the System for the years ended December 31, 2023 and 2022, were $2,691,877 and
$2,679,178, respectively.
The System issues stand-alone financial statements, which may be obtained by writing to the Seattle City
Employees’ Retirement System, 720 Third Avenue, Suite 900, Seattle, Washington, 98104, and
telephone: (206) 386-1293, or email at [email protected] or https://www.seattle.gov/retirement/forms-
and-publications/publications
Pension liabilities, pension expense, and deferred outflows of resources and deferred inflows of
resources related to pensions – At December 31, 2023 and 2022, the Fund reported a liability of
$30,515,947 and $20,321,284, respectively, its proportionate share of the Systems’ net pension liability.
The net pension liability was measured as of December 31, 2022 and 2021, for the years ended
December 31, 2023 and 2022, respectively, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of these dates. The Fund’s proportion of the
net pension liability was based on a projection of the City’s long-term share of contributions to the pension
plan relative to the projected contributions of all participating parties, actuarially determined. At
December 31, 2023 and 2022, the Fund’s proportion was 1.56% and 1.92%, respectively.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
43
For the years ended December 31, 2023 and 2022, the Fund recognized pension expense of
approximately $2,961,000 and $297,000, respectively.
The Fund’s deferred outflows and inflows of resources are as follows at December 31, 2023:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Differences between expected and actual experience 44,939$ 463,750$
Change of assumptions 2,112,286 -
Net difference between projected and actual earnings 4,129,713 -
Contributions made subsequent to measurement date 2,691,877 -
Changes in proportion and differences between
employer contributions and proportionate share of
contributions - 622,813
Total 8,978,815$ 1,086,563$
The Fund’s deferred outflows and inflows of resources are as follows at December 31, 2022:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Differences between expected and actual experience 60,008$ 486,310$
Change of assumptions 2,836,436 -
Net difference between projected and actual earnings - 8,009,820
Contributions made subsequent to measurement date 2,679,178 -
Changes in proportion and differences between
employer contributions and proportionate share of
contributions 199,438 272,198
Total 5,775,060$ 8,768,328$
Other amounts currently reported as deferred outflows of resources relate to the difference in actual
earnings on pension investments from projected earnings and will be recognized in pension expense as
follows for years ending December 31:
2024 80,927$
2025 851,240
2026 1,747,647
2027 2,353,330
2028 167,231
Total 5,200,375$
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
44
Actuarial assumptions – The total pension liability as of December 31, 2023, was determined using the
following actuarial assumptions:
Valuation date January 1, 2022
Measurement date December 31, 2022
Actuarial cost method Individual Entry Age Normal
Amortization method Level Percent, Closed
Remaining amortization period 30 years as of January 1, 2013 valuation
Asset valuation method 5-Year Non-asymptotic
Inflation 2.60%
Investment rate of return 6.75% compounded annually, net of expenses
Discount rate 6.75%
Projected general wage inflation 2.60%
Postretirement benefit increases 1.50%
Mortality
Various rates based on PubG-2010 mortality tables and using
generational projection of improvement using MP-2021 Ultimate
projection scale. See 2022 Investigation of Experience report for details.
The actuarial assumptions that determined the total pension liability as of the measurement date were
based on the results of an actuarial experience study for the period January 1, 2018 – December 31,
2021.
The discount rate used to measure the pension liability is based on a projection of cash flows assuming
that plan member contributions will be made at the current contribution rate and that participating
employer contributions will be made at rates equal to the difference between actuarially determined
contribution rates and the member rate. Based on those assumptions, the System’s fiduciary net position
was projected to be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all periods
on projected benefit payment to determine total pension liability.
The long-term expected rate of return assumption was based on the System’s investments using a
building-block method in which best-estimate ranges of expected future real rates of return (expected
returns, net of investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expect future real rates of
return by the target asset allocation percentage and by adding expected inflation.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
45
Best estimates of geometric real rates of return for each major asset class included in the System’s target
asset allocation as of December 31, 2023, are summarized in the following table:
Asset Class
Long-Term
Expected Real
Rate of Return
Equity: Public 4.90%
Equity: Private 7.50%
Fixed Income: Broad 2.10%
Fixed Income: Credit 5.30%
Real Assets: Real Estate 3.00%
Real Assets: Infrastructure 4.40%
Sensitivity analysis – The following presents the Fund’s proportionate share of the net pension liability
calculated using the discounted rate of 6.75%, as well as what the employer’s proportionate share of the
net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower
(5.75%) or 1 percentage point higher (7.75%) than the current rate.
1% Current 1%
Decrease Discount Rate
Increase
SPU’s proportionate
5.75% 6.75% 7.75%
Share of the
Net Pension Liability
43,580,969$ 30,515,947$ 19,589,214$
Note 9 – Contractual Obligations
The City contracts with Waste Management and Recology of King County for the collection of residential
and commercial garbage, yard waste, food waste, and recycling. In addition, a few independent vendors
provide large scale recycling and food waste for business customers. The collection contracts began in
2019 and are scheduled to end on March 31, 2029, with City options to extend to March 2031 and
March 2033. Total payments under these contracts for residential and commercial collection were
$94,330,244 in 2023 and $89,287,310 in 2022.
The City contracts with Waste Management of Washington, Inc. (formerly known as Washington Waste
Systems), for rail-haul and disposal of nonrecyclable City waste. The disposal contract began in 1990 and
is scheduled to end on March 31, 2028, however the City may terminate this contract at its option without
cause beginning on March 31, 2024. Total payments under the terms of this contract for waste disposal
were $18,758,472 in 2023 and $17,011,306 in 2022.
The City contracts with Lenz Enterprises, Inc., and Cedar Grove Composting, Inc. to process yard and
food waste into marketable products. The Lenz processing contract began in 2014 and the Cedar Grove
processing contract began in 2017. Both contracts are scheduled to end on March 31, 2024. Total
payments under the terms of these contracts were $5,045,159 in 2023 and $4,570,776 in 2022.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
46
The City contracts with Rabanco, LTD., to process recyclables and marketing those commodities. The
Rabanco processing contract began in 2016 and is scheduled to end on March 31, 2024, with a City
option to extend to March 31, 2027. Total payments, net of recycling revenue, were $2,953,319 in 2023
and $2,096,380 in 2022. This variance resulted from fluctuations in recycling commodity pricing.
Note 10 – Environmental Liabilities
The City of Seattle and a private developer are under a Consent Decree with the Washington State
Department of Ecology (Ecology) to implement a Cleanup Action Plan for the historic South Park Landfill
site under the State Model Toxics Control Act. Previously the City was advancing a design based on an
Interim Action Workplan approved by Ecology. SPU delayed the project to re-define the project scope.
The delay and scope changes caused the City to fall behind the schedule in the Consent Decree and
Ecology has determined that the City must amend the existing Consent Decree and Cleanup Action Plan
to reflect the revised project and new timeline.
As of March 2023, a redefined scope has been approved by SPU. Amendments to the Consent Decree
and Cleanup Action Plan have been drafted. Both documents were scheduled to go out for public
comment in November 2023. Following any additional revisions, the documents will be finalized, and the
Consent Decree Amendment will be entered following a public comment period. Design of SPU’s Project
is underway, and construction is anticipated to start in 2025 with completion in 2028.
In 2012, the City executed an agreement regarding the developer’s interim action that settles City
liabilities for the interim cleanup costs but not City liabilities for the permanent cleanup. In 2015, the
developer completed Ecology-approved interim cleanup action on its portion of the site. A similar
agreement is likely between the City and one additional property owner.
The Fund has included in its estimated liability those portions of the environmental remediation work that
are deemed to be reasonably estimable. Cost estimates were developed using the expected cash flow
technique. Estimated outlays were based on current cost and no adjustments were made for discounting
or inflation. Cost scenarios were developed for a given site based on data available at the time of
estimation and will be adjusted for changes in circumstance. Scenarios consider the relevant potential
requirements and are adjusted when benchmarks are met or when new information revises estimated
outlays, such as changes in the remediation plan or operating conditions.
Costs were calculated on a weighted average that was based on the probabilities of each scenario being
selected and reflected cost-sharing agreements in effect. In addition, certain estimates were derived from
independent engineers and consultants. The estimates were made with the latest information available;
as new information becomes available, estimates may vary significantly due to price increases or
reductions, technology, or applicable laws or regulations.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Notes to Financial Statements
47
The following changes in the provision for environmental liabilities at December 31 are:
2023 2022
Beginning environmental liability, net of recoveries 18,255,983$ 18,242,495$
Payments or amortization (3,696,268) (78,147)
Change in estimated liability 5,171,838 91,635
Ending environmental liability, net of recoveries 19,731,553$ 18,255,983$
The following table represents the current and long-term positions of the environmental liability:
2023 2022
Environmental liability, current 2,810,000$ 316,000$
Environmental liability, noncurrent 16,921,553 17,939,983
Ending liability 19,731,553$ 18,255,983$
Note 11 – Landfill Closure and Post Closure Care
In prior years, the Fund delivered its refuse to two leased disposal sites: the Midway and Kent-Highlands
landfills. Subsequent to signing the original lease agreement, federal and state requirements for closure
of landfill sites were enacted. The Fund stopped disposing of municipal waste in the Midway site in 1983
and in the Kent-Highlands site in 1986.
As of December 31, 2023, accrued landfill closure and post closure costs consist primarily of monitoring,
maintenance, and estimated construction costs related to regional transit and I-5 improvement projects. It
is the City Council’s policy to include the Fund’s share of all landfill closure and post closure costs in the
revenue requirements used to set future solid waste rates. Therefore, the Fund uses regulatory
accounting and total estimated landfill closure, and post closure care costs are accrued and also reflected
as a future cost in the accompanying financial statements, in accordance with generally accepted
accounting principles. These costs are being amortized as they are recovered from rate payers and will
be fully amortized in 2030. Actual costs for closure and post closure care may be higher due to inflation,
changes in technology, or changes in regulations. Such amounts would be added to the liability and
accrued when identified. Landfill closure costs were fully amortized in 2009 and landfill postclosure costs
will continue to amortize until 2030.
Required Supplementary Information
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Required Supplementary Information
See report of independent auditors.
49
Schedule of Seattle Public Utilities’ Proportionate Share of the Net Pension Liability
2023 2022 2021 2020 2019 2018 2017 2016 2015
Employer’s proportion of the net pension liability 14.21% 14.76% 14.62% 14.33% 14.55% 14.73% 15.13% 16.37% 16.96%
Employer’s proportionate share of the net pension liability 214,988,644$ 122,309,887$ 143,163,797$ 180,105,232$ 221,049,893$ 163,086,154$ 197,454,529$ 212,671,200$ 187,919,945$
Employer’s covered payroll 127,869,634$ 126,830,347$ 127,584,358$ 112,528,955$ 111,973,027$ 107,715,383$ 106,696,535$ 105,031,141$ 102,783,473$
Employer’s proportionate share of the net pension
liability as a percentage of its covered payroll 168.13% 96.44% 112.21% 160.05% 197.41% 151.40% 185.06% 202.48% 182.83%
Plan fiduciary net position as a percentage of 70.63% 83.31% 78.81% 71.48% 64.14% 72.04% 65.60% 64.03% 67.70%
the total pension liability
Schedule of Seattle Public Utilities’ Pension Contributions
2023 2022 2021 2020 2019 2018 2017 2016 2015
Contractually required employer contribution
20,632,427$ 20,589,068$ 20,654,175$ 17,041,133$ 17,103,559$ 16,466,270$ 16,354,089$ 16,487,154$ 15,170,276$
Contributions in relation to the contractually required
employer contribution
(20,632,427) (20,589,068) (20,654,175) (17,041,133) (17,103,559) (16,466,270) (16,354,089) (16,487,154) (15,170,276)
Employer contribution deficiency (excess)
-$ -$ -$ -$ -$ -$ -$ -$ -$
Employer’s covered payroll
127,869,634$ 126,830,347$ 127,584,358$ 112,528,955$ 111,973,027$ 107,715,383$ 106,696,535$ 105,031,141$ 102,783,473$
Employer contributions as a percentile of covered payroll
16.14% 16.23% 16.19% 15.14% 15.27% 15.29% 15.33% 15.70% 14.76%
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Required Supplementary Information
See report of independent auditors.
50
Schedule of Seattle Public Utilities’ Proportionate Share of the OPEB Liability and Related Ratios
December 31,
2023
December 31,
2022
December 31,
2021
December 31,
2020
December 31,
2019
December 31,
2018
Total OPEB Liability
Normal cost
3,563,210$ 4,514,549$ 4,015,249$ 3,378,925$ 3,842,152$ 3,821,876$
Interest
1,195,910 1,553,119 1,813,401 2,586,942 2,195,238 2,583,105
Differences between expected and actual experience
- (16,026,625) - 6,956,579 - 13,491,865
Changes in assumptions
(8,009,946) (1,556,412) 3,738,597 (7,760,776) (3,886,702) (22,126,128)
Benefit payment
(2,436,239) (3,039,800) (2,933,774) (2,484,320) (2,333,610) (2,289,000)
Total OPEB liability – beginning of year
55,702,565 70,257,734 63,624,261 60,946,911 61,129,833 65,648,115
Total OPEB liability – end of year
50,015,500$ 55,702,565$ 70,257,734$ 63,624,261$ 60,946,911$ 61,129,833$
Covered-employee payroll $ 1,145,862,502 $ 1,145,862,502 $ 1,124,692,046 $ 1,124,692,046 $ 1,015,097,334 $ 1,015,097,334
Net OPEB liability as percentage of covered-employee payroll 4.36% 4.86% 6.25% 5.66% 6.00% 6.02%
Other Information (Unaudited)
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Other Information (Unaudited)
See report of independent auditors.
52
Solid Waste Debt Service Coverage Calculation 2023
Operating Revenue
Residential Collection Services 166,038,496$
Commercial Collection Services 71,038,103
Disposal and Other 30,828,478
Total Operating Revenue 267,905,077
Operating Expense
Solid Waste Contract Expense 128,770,184
Other Operations and Maintenance 45,585,457
City Taxes 33,214,412
State B&O Tax 4,683,072
Total Operating Expense 212,253,125
Net Operating Income 55,651,952
Adjustments
Less: DSRF Earnings (250,182)
Add: City Taxes 33,214,412
Add: Environmental Liability Costs 5,171,838
Add: Investment Interest 6,199,813
Add: Net Proceeds from Sale on Assets 21,853
Add: Net Other Nonoperating Revenues 101,665
Total Adjustments 44,459,399
Net Revenue Available for Debt Service 100,111,351$
Net Revenue Available for Debt Service (w/o City Taxes) 66,896,939$
Annual Debt Service
Annual Debt Service 14,634,631$
Less: DSRF Earnings (250,182)
Adjusted Annual Debt Service 14,384,449$
Coverage 6.96
Coverage without taxes 4.65
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Other Information (Unaudited)
See report of independent auditors.
53
Solid Waste Customers by Class
2019 2020 2021 2022 2023
VARIABLE CANS
No Can/Vacancy 1,959 1,938 2,199 2,456 2,518
12-Gallon Can 21,710 21,587 21,386 21,246 21,281
20-Gallon Can 48,480 49,023 50,021 50,210 50,430
32-Gallon Can 82,932 82,259 81,574 81,501 81,606
64-Gallon Can 8,042 8,348 9,635 10,168 10,835
96-Gallon Can 2,994 3,239 3,822 4,079 4,394
TOTAL VARIABLE CANS 166,117 166,394 168,637 169,660 171,064
Residential Dumpster Accounts 5,245 5,240 5,310 5,326 5,357
Commercial Accounts 8,556 8,214 8,164 8,157 8,917
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Other Information (Unaudited)
See report of independent auditors.
54
Solid Waste Tonnage
2018 2019 2020 2021 2022 2023
GARBAGE
Residential Collection
107,485 109,367 119,903 122,637 126,365 122,755
Self-Haul Garbage
100,828 101,506 97,320 109,046 114,840 118,079
Commercial Collection
138,009 134,816 109,891 113,997 117,061 116,532
Total tons disposed
346,322 345,689 327,114 345,680 358,266 357,366
RECYCLING
Private Recycling
(1)
262,249 257,010 183,659 183,659 200,074 213,588
Residential Curbside Recycling
53,582 50,505 55,133 50,677 49,976 52,235
Apartment Recycling
24,520 24,802 26,852 25,988 24,560 27,522
Residential Curb Yard & Food Waste
88,947 89,105 99,850 87,725 85,366
79,567
Self Haul Yard Waste
6,127 6,957 6,780 6,513 7,147 7,363
Self-Haul Wood Waste
1,040 893 655 655 628 661
Self-Haul Recycling
(1)
4,567 4,879 4,109 3,776 4,593 4,416
Composting
(2)
9,450 9,450 9,450 9,450 9,450 9,450
Total tons recycled
450,482 443,601 386,488 368,443 381,794 394,802
Total tons generated
796,804 789,290 713,602 714,124 740,060 752,168
Garbage as a percentage of
total tons generated
43% 44% 46% 48% 48% 48%
Recycling as a percentage of
total tons generated
57% 56% 54% 52% 52% 52%
(1)
Estimate for 2023
(2)
Composting figures are estimates based on surveys and include grasscycling and backyard food waste and yard
waste composting. Surveys were conducted in 2005, 2010, and 2018.
Seattle Public Utilities – Solid Waste Fund
(An Enterprise Fund of the City of Seattle)
Other Information (Unaudited)
See report of independent auditors.
55
Solid Waste Rate Schedule and Transfer Station Fees
2023 Monthly Residential Rate Schedule
Rates (Effective Rates (Effective
April 1, 2023) April 1, 2024)
Service unit
No can (minimum charge) 6.85 6.85
12-Gallon 26.85 27.55
20-Gallon 32.90 33.75
32-Gallon 42.80 43.9
64-Gallon 85.45 87.65
96-Gallon 128.30 131.65
Recycling No charge No charge
Non-Compacted Dumpster (one cubic yard, once/week,
one container)
(2)
317.03 325.15
Compacted Dumpster (three cubic yards, once/week,
one container)
(2)
915.22 939.15
Yard Waste Mini-Can 7.10 7.30
Yard Waste 32-Gallon Can 10.65 10.95
Yard Waste 96-Gallon Can 13.60 13.95
(1)
(2)
2023 Commercial Collection Rates
2023 Transfer Station Fees
Rates (Effective Rates (Effective
April 1, 2023) April 1, 2024)
Garbage
Sedans, SUVs, and station wagons
$35.00 per trip $35.00 per trip
All other self-haul vehicles with garbage
$165.00 per ton ($35.00
minimum charge)
$165.00 per ton ($35.00
minimum charge)
Yard and wood waste
Sedans, SUVs, and station wagons
$24.00 per trip $24.00 per trip
All other self-haul vehicles with yard waste
$125.00 per ton ($24.00
minimum charge)
$125.00 per ton ($24.00
minimum charge)
Rates listed are for curb/alley service.
Like other solid waste rates, the City sets commercial rates through ordinance. Commercial rates vary with the type and
level of service. A typical commercial customer has 3 cubic yards of garbage collected once per week. As of April 1, 2023
the cost of this service is $573.55 per month, including a monthly account fee of $31.65
Dumpster rates vary based on size and number of containers as well as the frequency of collection. Dumpster rates
shown include a $47.05 monthly account fee.
Regional Comparison of Transfer Station Rates
Garbage Seattle King County Seattle King County
Per Ton 165.00$ 198.00$ 165.00$ 180.80$
Minimum Charge 35.00$ 33.00$ 35.00$ 30.25$
2024 2023
