Grays Harbor Public Facilities District Regular Board Meeting

Agenda Gray Harbor Public Facilities District Regular Board Meeting Join Zoom Meeting Online Click Here Join Zoom Meeting by Phone Phone Number: 1.253.215.8782 Meeting ID: 861 9808 1013 Passcode: 580279 Wednesday Ocean Shores Library February 25, 2026 573 Point Brown Ave NW 2:00PM Ocean Shores, Washington Page Call to Order Approval of Meeting Agenda Public Communication - 3 Minutes 1. The Grays Harbor County Public Facilities District is providing opportunities for public comments, by submitting written comments to the City Clerk's office via email at publiccomment@osgov.com no later than 1:00 PM on Wednesday, February 25, 2026. Consent Agenda 3 2. Approval of minutes from the Grays Harbor Public Facilities District Meeting on June 24, 2025. Staff Report 4 3. Public Facilities District Sales Tax Report  Presented by: Finance Director, Sara D. Logan Old Business New Business Page 1 of 22 Page Discussion 5 - 22 4. 2024 Washington State Accountability Audit  Presented by: Finance Director, Sara D. Logan Board Member Reports Adjourn _________________________________________________________ Public Notice:  Persons requiring auxiliary aids or special arrangements in order to participate in meetings should call 360.940.7498 at least two business days prior to the scheduled meeting. Page 2 of 22  GRAYS HARBOR PFD MEETING MINUTES June 24, 2025 Call to order: Board Member Shay called the meeting to order at 9:00am via Zoom. Board Members present: Brian Shay, Sharon Skorick, Rich Hartman, and Pat Brunstad. Board Members absent: None Board Staff present: Finance Director, Sara D. Logan Board Report: None Consent: Board Member Brunstad moved to approve minutes of the February 8, 2024, meeting. Board Member Skorick seconded the motion, the motion passed unanimously. Staff Reports: Finance Director, Sara D. Logan presented the 2024 Public Facilities District Sales Tax Revenue. Old Business: None New Business: It was discussed that the meeting is set by Resolution to be held on the second Thursday in February, and that a placeholder invite will be sent out. Discussion: There was discussion on the Board positions and the 2024 financial audit report. Public Comment: None. Adjourn: Meeting adjourned at 11:07 AM 2. Approval of minutes from the Grays Harbor Public Facilities District ... Page 3 of 22 3. Public Facilities District Sales Tax Report Presented by: Finance Dir... PFD Sales Tax Receipts % Chnge Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Pr Yr 2004 - - - - - - - - - - - 19,496 19,496 2005 18,992 26,719 18,384 20,180 18,061 23,109 22,718 28,278 25,664 26,889 30,862 23,306 283,160 2006 21,331 29,960 19,890 21,441 25,999 29,546 20,237 27,636 26,157 27,717 29,558 23,879 303,352 7.1% 2007 21,279 30,015 17,478 22,169 27,753 24,972 26,159 31,361 30,356 32,755 34,768 27,330 326,395 7.6% 2008 29,431 34,478 24,355 24,808 30,111 25,992 25,554 28,764 29,496 28,365 30,436 25,206 336,997 3.2% 2009 20,192 27,644 19,679 19,510 22,620 21,347 21,737 25,873 25,646 25,433 28,333 22,716 280,731 -16.7% 2010 20,578 27,480 20,053 19,441 25,212 21,211 20,571 28,717 26,033 26,101 28,031 23,783 287,212 2.3% 2011 21,589 27,160 19,832 20,354 25,361 27,253 24,134 32,170 29,845 30,392 29,574 24,688 312,351 8.8% 2012 23,374 27,975 20,316 21,220 21,840 22,239 23,394 23,646 25,655 27,520 25,641 23,456 286,275 -8.3% 2013 20,806 25,477 19,797 20,283 22,638 21,588 25,093 24,059 26,668 27,573 27,754 25,122 286,858 0.2% 2014 21,424 26,683 21,557 21,982 25,213 24,011 25,286 27,547 30,207 30,895 29,295 25,432 309,532 7.9% 2015 24,795 27,929 21,465 22,861 27,123 24,477 25,769 30,183 30,874 31,302 32,016 25,598 324,392 4.8% 2016 22,491 28,414 22,038 25,601 27,358 25,479 27,014 30,743 32,475 32,939 32,052 26,601 333,204 2.7% 2017 25,991 33,131 24,944 24,179 29,723 27,471 28,992 32,738 33,356 36,490 34,913 29,548 361,477 8.5% 2018 26,861 32,705 26,188 27,233 30,996 29,671 33,784 36,437 36,509 37,868 36,952 33,385 388,588 7.5% 2019 32,638 35,306 30,386 28,194 34,843 33,464 35,140 39,563 40,832 43,067 39,295 34,227 426,953 9.9% 2020 31,520 36,774 29,481 29,725 28,954 28,616 36,800 41,886 42,917 42,643 47,419 38,455 435,189 1.9% 2021 35,498 42,049 34,812 35,860 52,363 48,738 49,885 54,192 50,921 51,152 49,656 42,237 547,363 25.8% 2022 41,341 45,163 40,208 42,025 50,005 48,163 49,674 53,778 55,738 57,885 54,324 50,182 588,485 7.5% 2023 45,013 50,358 42,526 42,399 49,756 46,228 50,010 62,649 56,006 63,810 57,480 48,851 615,087 4.5% 2024 45,669 50,274 40,911 41,135 51,587 49,937 52,336 52,393 59,268 61,429 55,697 53,206 613,842 -0.2% Page 4 of 22  Financial Statements Audit Report Grays Harbor Public Facilities District For the period January 1, 2024 through December 31, 2024 Published December 18, 2025 Scan to see another great way we’re helping advance Report No. 1038643 #GoodGovernment 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 5 of 22  Office of the Washington State Auditor Pat McCarthy December 18, 2025 Board of Directors Grays Harbor Public Facilities District Ocean Shores, Washington Report on Financial Statements Please find attached our report on the Grays Harbor Public Facilities District’s financial statements. We are issuing this report in order to provide information on the District’s financial activities and condition. Sincerely, Pat McCarthy, State Auditor Olympia, WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at (564) 999-0950, TDD Relay at (800) 833-6388, or email our webmaster at webmaster@sao.wa.gov. Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (564) 999-0950  Pat.McCarthy@sao.wa.gov 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 6 of 22  TABLE OF CONTENTS Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ..................................................................................................... 4 Independent Auditor's Report on the Financial Statements ............................................................ 7 Financial Section........................................................................................................................... 11 About the State Auditor's Office ................................................................................................... 18 Office of the Washington State Auditor sao.wa.gov Page 3 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 7 of 22  INDEPENDENT AUDITOR’S REPORT Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Grays Harbor Public Facilities District January 1, 2024 through December 31, 2024 Board of Directors Grays Harbor Public Facilities District Ocean Shores, Washington We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Grays Harbor Public Facilities District, as of and for the year ended December 31, 2024, and the related notes to the financial statements, which collectively comprise the District’s financial statements, and have issued our report thereon dated December 15, 2025. We issued an unmodified opinion on the fair presentation of the District’s financial statements in accordance with its regulatory basis of accounting. We issued an adverse opinion on the fair presentation with regard to accounting principles generally accepted in the United States of America (GAAP) because the financial statements are prepared by the District using accounting practices prescribed by state law and the State Auditor’s Budgeting, Accounting and Reporting System (BARS) manual described in Note 1, which is a basis of accounting other than GAAP. The effects on the financial statements of the variances between the basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. Office of the Washington State Auditor sao.wa.gov Page 4 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 8 of 22  A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the District’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described above and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. REPORT ON COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. However, Office of the Washington State Auditor sao.wa.gov Page 5 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 9 of 22  this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. Pat McCarthy, State Auditor Olympia, WA December 15, 2025 Office of the Washington State Auditor sao.wa.gov Page 6 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 10 of 22  INDEPENDENT AUDITOR’S REPORT Report on the Audit of the Financial Statements Grays Harbor Public Facilities District January 1, 2024 through December 31, 2024 Board of Directors Grays Harbor Public Facilities District Ocean Shores, Washington REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Unmodified and Adverse Opinions We have audited the financial statements of the Grays Harbor Public Facilities District, as of and for the year ended December 31, 2024, and the related notes to the financial statements, as listed in the financial section of our report. Unmodified Opinion on the Regulatory Basis of Accounting (BARS Manual) As described in Note 1, the District has prepared these financial statements to meet the financial reporting requirements of state law and accounting practices prescribed by the State Auditor’s Budgeting, Accounting and Reporting System (BARS) Manual. Those accounting practices differ from accounting principles generally accepted in the United States of America (GAAP). The differences in these accounting practices are also described in Note 1. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the cash and investments of the Grays Harbor Public Facilities District, and its changes in cash and investments, for the year ended December 31, 2024, on the basis of accounting described in Note 1. Adverse Opinion on U.S. GAAP The financial statements referred to above were not intended to, and in our opinion, they do not, present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Grays Harbor Public Facilities District, as of December 31, 2024, or the changes in financial position or cash flows thereof for the year then ended, because of the significance of the matter discussed below. Office of the Washington State Auditor sao.wa.gov Page 7 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 11 of 22  Basis for Unmodified and Adverse Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and Government Auditing Standards. 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 District, 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 unmodified and adverse opinions. Matter Giving Rise to Adverse Opinion on U.S. GAAP Auditing standards issued by the American Institute of Certified Public Accountants (AICPA) require auditors to formally acknowledge when governments do not prepare their financial statements, intended for general use, in accordance with GAAP. As described in Note 1 of the financial statements, the financial statements are prepared by the District in accordance with state law using accounting practices prescribed by the BARS Manual, which is a basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between the regulatory basis of accounting and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material and pervasive. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of state law and the BARS Manual described in Note 1. This includes determining that the basis of accounting is acceptable for the presentation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Office of the Washington State Auditor sao.wa.gov Page 8 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 12 of 22  Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. 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. Performing an audit in accordance with GAAS and Government Auditing Standards includes the following responsibilities: • 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 District’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; • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time; and • 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. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated December 15, 2025 on our consideration of the District’s internal control over financial reporting and on the tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of Office of the Washington State Auditor sao.wa.gov Page 9 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 13 of 22  internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’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 District’s internal control over financial reporting and compliance. Pat McCarthy, State Auditor Olympia, WA December 15, 2025 Office of the Washington State Auditor sao.wa.gov Page 10 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 14 of 22  FINANCIAL SECTION Grays Harbor Public Facilities District January 1, 2024 through December 31, 2024 FINANCIAL STATEMENTS Fund Resources and Uses Arising from Cash Transactions – 2024 Notes to Financial Statements – 2024 Office of the Washington State Auditor sao.wa.gov Page 11 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 15 of 22  Grays Harbor Public Facilities District Fund Resources and Uses Arising from Cash Transactions For the Year Ended December 31, 2024 Beginning Cash and Investments 308 Beginning Cash and Investments - 388 / 588 Net Adjustments - Revenues 310 Taxes 611,867 320 Licenses and Permits - 330 Intergovernmental Revenues - 340 Charges for Goods and Services - 350 Fines and Penalties - 360 Miscellaneous Revenues 1,975 Total Revenues: 613,842 Expenditures 510 General Government - 520 Public Safety - 530 Utilities - 540 Transportation - 550 Natural/Economic Environment - 560 Social Services - 570 Culture and Recreation 613,842 Total Expenditures: 613,842 Excess (Deficiency) Revenues over Expenditures: - Other Increases in Fund Resources 391-393, 596 Debt Proceeds - 397 Transfers-In - 385 Special or Extraordinary Items - 381, 382, 389, Other Resources - 395, 398 Total Other Increases in Fund Resources: - Other Decreases in Fund Resources 594-595 Capital Expenditures - 591-593, 599 Debt Service - 597 Transfers-Out - 585 Special or Extraordinary Items - 581, 582, 589 Other Uses - Total Other Decreases in Fund Resources: - Increase (Decrease) in Cash and Investments: - Ending Cash and Investments 50821 Nonspendable - 50831 Restricted - 50841 Committed - 50851 Assigned - 50891 Unassigned - Total Ending Cash and Investments - The accompanying notes are an integral part of this statement. Page 12 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 16 of 22  Grays Harbor Public Facilities District Notes to the Financial Statements For the year ended December 31, 2024 Note 1 - Summary of Significant Accounting Policies The Grays Harbor County Public Facilities District was created on July 15, 2002 pursuant to RCW 36.100.010 by the Grays Harbor County Board of Commissioners Resolution No. 02-60 and operates under the laws of the State of Washington applicable to a Public Facilities District. The District is a municipal corporation and a legal entity formed for the purpose of acquiring, constructing, and maintaining a regional center. The District reports financial activity in accordance with the Cash Basis Budgeting, Accounting and Reporting System (BARS) Manual prescribed by the State Auditor’s Office under the authority of Washington State law, Chapter 43.09 RCW. This manual prescribes a financial reporting framework that differs from generally accepted accounting principles (GAAP) in the following manner: x Financial transactions are recognized on a cash basis of accounting as described below. x Component units are required to be disclosed, but are not included in the financial statements. (see Note 2 – Component Unit(s), Joint Ventures, and Related Parties) x Government-wide statements, as defined in GAAP, are not presented. x All funds are presented, rather than a focus on major funds. x The Schedule of Liabilities is required to be presented with the financial statements as supplementary information. x Supplementary information required by GAAP is not presented. x Ending balances for proprietary and fiduciary funds are presented using classifications that are different from the ending net position classifications in GAAP. A. Fund Accounting Financial transactions of the government are reported in individual funds. Each fund uses a separate set of self-balancing accounts that comprises its cash and investments, revenues and expenditures. The government’s resources are allocated to and accounted for in individual funds depending on their intended purpose. Each fund is reported as a separate column in the financial statements, except for fiduciary funds, which are presented by fund types. The total column is presented as “memo only” because any interfund activities are not eliminated. The following fund type is used: GOVERNMENTAL FUND TYPE: General Fund This fund is the primary operating fund of the government. It accounts for all financial resources except those required or elected to be accounted for in another fund. B. Basis of Accounting and Measurement Focus Financial statements are prepared using the cash basis of accounting and measurement focus. Page 13 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 17 of 22  Revenues are recognized when cash is received and expenditures are recognized when paid. Note 2 – Joint Ventures, Component Unit(s) and Related Parties Joint Venture - City of Ocean Shores All assets of the District are received and held by Grays Harbor County and coordinated by the Grays Harbor County Treasurer, the ex officio treasurer of the District. Prior to the District issuing any bonds, the County Treasurer remitted fifty percent (50%) of all Sales Tax collected, on behalf of the district, to the City of Ocean Shores on a monthly basis within ten working days from receipt of the funds from the State Department of Revenue. The City applied these sales taxes received from the District to the cost of feasibility studies, design, permitting, and other predevelopment activities with respect to the regional center. On February 18, 2004, the District issued Limited Sales Tax bonds in the Principal amount of $10,000,000. The bonds beared interest payable semiannually, on each June 1 and December 1, commencing December 1, 2004. These bonds were issued in fully registered form as to both principal and interest in the denomination of $5,000 each. The bonds were issued pursuant to section 36.100.060 and 39.46 RCW. Proceeds of the bonds, together with other funds of the City of Ocean Shores, were used by the District and the City to construct a new regional center on the site of the City’s existing Ocean Shores Convention Center. All sales taxes collected as of February 2004 remained with the County for debt service on the bonds. Section 4.05 of the February 24, 2004 Contingent Loan Agreement signed by the City, in conjunction with the issuance of the PFD revenue bonds issued to finance the Convention Center, stated that the full faith, credit and resources of the City are pledged irrevocably to the payment of the PFD debt. On March 10th 2014 the City Council of Ocean Shores passed Ordinance 939 authorizing the sale of City of Ocean Shores LTGO bonds to refund all of the outstanding Grays Harbor County Public Facilities District (PFD) bonds related to the City of Ocean Shores Convention Center. On April 10, 2014, the City sold $9,370,000 of new bonds. The closing occurred on April 24, 2014 and retired all of the outstanding PFD bonds. As part of the transaction an O&M reserve of $250,000 for the Convention Center was funded. A revised Financing and Operating Agreement was signed with the District pledging its sales taxes to the payment of the new debt. The PFD receives a portion of the state Sales & Use tax collected within Grays Harbor County. The County transfers these funds to the City in order for the City to meet the debt service on the LTGO bonds issued by the City. The City also uses funds received from the Hotel and Motel taxes collected within the City to meet this obligation and tracks the financial activity within its Debt Service Fund 206. In 2024 the City paid $400,000 of principal on the debt issue. The outstanding principal at the end of 2024 was $5,690,000. The City’s 2024 revenues and other financing sources were $32,263,399. The PFD remitted $613,842 in 2024. The City files separate annual reports and obtains separate audits. The annual reports and audits can be found at www.sao.wa.gov Note 3 - Risk Management The PFD is a member of the Enduris Washington (the Pool). Chapter 48.62 RCW provides the exclusive source of local government entity authority to individually or jointly self-insure risks, jointly purchase insurance or reinsurance, and contract for risk management, claims, and administrative services. The Pool Page 14 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 18 of 22  was formed on July 10, 1987, under the provisions of Chapter 48.62 RCW, Chapter 200-100 WAC, and Chapter 39.34 RCW when two counties and two cities in the State of Washington joined together by signing an interlocal governmental agreement to fund their self-insured losses and jointly purchase insurance and administrative services. During the Pool’s fiscal year ending August 31, 2024, there were 507 Enduris members representing a broad array of special purpose districts throughout the state. The Enduris program provides various forms of joint self-insurance and reinsurance coverage for its members: Liability coverage, which includes General Liability, Automobile Liability, Public Officials’ Errors and Omissions liability, Terrorism liability and Employment Practices liability; Property coverage, which includes Building and Contents, Mobile Equipment, Boiler and Machinery, and Business Interruption/Extra Expense; Automobile Physical Damage coverage; Cyber coverage; Crime blanket coverage; Named Position coverage; and an Identity Fraud reimbursement policy. Pollution and Cyber coverage are provided on a claims-made and reported coverage form. Crime coverage is provided on a discovery form. All other coverage is provided on an occurrence coverage form. Members are responsible for a coverage deductible or co-pay on each covered loss. Each policy year, members receive a Memorandum of Coverage (MOC) outlining the specific coverage, limits, and deductibles/co-pays that apply to them. In some instances, the Pool may allow members to elect to participate in the programs at limits, coverage, deductibles, and co-pays specific to their needs. Enduris is responsible for payment of all covered losses above the member deductible or copay up to the Pool self- insured retention (SIR). Enduris acquires excess/reinsurance from unrelated insurance companies to cover losses above the Pool’s SIR up to the coverage maximum limit of liability. The tables below reflect the Pool’s SIR, reinsurance limits, and member deductibles/co-pays by coverage type. Coverage Coverage Type Pool Excess/ Member Self-Insured Reinsurance Deductibles/ Retention Limits Co-Pays (1) Liability: General Liability Per Occurrence $1 million $20 million $1,000 - $100,000 Automobile Liability Per Occurrence $1 million $20 million $1,000 - $100,000 Public Officials Errors Each Wrongful Act $1 million $20 million $1,000 - and Omissions Liability Member Aggregate $20 million $100,000 Terrorism Liability(2) Per Occurrence $500,000 None $1,000 - Pool Aggregate $1 million $100,000 Employment Practices Per Occurrence $1 million $20 million 20% Copay(3) Liability Member Aggregate $20 million Property (4): Buildings and Contents Per Occurrence $500,000 $1 billion $1,000 - $250,000 Mobile Equipment Per Occurrence $500,000 $1 billion $1,000 - $250,000 Boiler and Machinery Per Occurrence $500,000 $100 million $1,000 - $250,000 Page 15 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 19 of 22  Coverage Coverage Type Pool Excess/ Member Self-Insured Reinsurance Deductibles/ Retention Limits Co-Pays (1) Business Interruption Per Occurrence $500,000 $100 million (BI)/ $1,000 - (BI)/ Extra Expense $50 million (EE) $250,000 (EE) (5) Sublimit (6): Flood Per Occurrence $500,000 $50 million $1,000 - (shared by Pool $250,000 members) Earthquake Per Occurrence 5% of indemnity, $10 million $1,000 - subject to a (shared by Pool $250,000 $500,000 members) minimum Terrorism Primary Per Occurrence $250,000 $100 million per $1,000 - Pool Aggregate occurrence $250,000 $200 million aggregate Terrorism Excess Per Occurrence $500,000 $600 million/ $0 Pool aggregate APIP Per $1.1 billion/ Occurrence per occurrence APIP program APIP Aggregate $1.4 billion/ APIP program aggregate Automobile Physical $500,000 with Damage (7) Per Occurrence exceptions $1 billion $250 - $1,000 (8) Cyber Each Claim $50,000 to $2 million 20% Copay APIP Aggregate $100,000 with $45 million waiting period Pollution (9) Each Claim $250,000 $2 million $1,000 - APIP Aggregate with exceptions $25 million $250,000 Crime Blanket (10) Per Occurrence $50,000 $1 million $1,000 Named Position (11) Per Occurrence $50,000 $1 million $1,000 Identity Fraud Member Aggregate $0 $25,000 $0 Expense Reimbursement (12) (1) Members may request or be required to pay a higher deductible than the minimum for certain coverage, and certain types of losses require a specific co-pay or deductible. (2) Terrorism liability is fully funded by the Pool, i.e., no excess/reinsurance is procured. (3) Members are responsible for a 20% co-pay for Employment Practices Liability coverage claim costs. However, the co-pay may be waived if they meet established guidelines. Page 16 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 20 of 22  Coverage Coverage Type Pool Excess/ Member Self-Insured Reinsurance Deductibles/ Retention Limits Co-Pays (1) (4) Property coverage for each member is based on a detailed property schedule. Scheduled items are covered to the extent of the cost of repair or replacement according to the excess/reinsurance policy terms. Under the Alliant Property Insurance Program (APIP), reinsurance carriers cover insured losses over $500,000 to the limit of $1 billion, except for certain types of sub-limited property losses such as floods, earthquakes, and terrorism. (5) Business Interruption(BI)/Extra Expense (EE) coverage is based on scheduled revenue-generating locations/operations. A limited number of members are scheduled; the rest are limited to $500,000 of coverage with a $2.5 million Pool maximum for undeclared exposure. The waiting period (deductible) is typically 24 hours, but there are exceptions specific to the type of exposure covered. (6) This Property Program sub-limit list is simplified and is not all-inclusive. In addition, sub-limits are often shared or aggregated by all pool members and, in a few cases, are shared by all APIP members. Deductibles often vary by coverage sub-limit. (7) Auto Physical Damage coverage includes comprehensive, collision, and additional coverage (i.e., rental reimbursement, towing, and personal property). Each member's coverage is based on a detailed vehicle schedule. The Pool’s Auto Physical Damage coverage deductible is $500,000 per occurrence with certain exceptions: $25,000 for on-premises comprehensive and collision; a $100,000 minimum for emergency vehicles and all other vehicles with an RCV of $250,000 to $750,000; $250,000 for all vehicles with an RCV above $750,000. (8) Cyber coverage is included under the Pool’s Property program on an optional basis. Members are subject to a 20% co-pay per loss and the Pool’s SIR is tiered between $50,000 and $100,000 depending on the insured/member’s property TIV with an 8-hour waiting period. By meeting established guidelines, the co-pay may be waived. The reinsurance maximum limit of liability is $2 million, with various declared sub-limits. (9) Pollution coverage is included under the Pool’s Property program on an optional basis. Members are subject to a 20% co-pay per loss. The Pool’s SIR is $250,000, with certain specific deductibles ranging from $250,000 to $1 million. The reinsurance maximum limit of liability is $2 million, with various declared sub-limits. (10) Each member is provided with $2,500 of Crime Blanket coverage (also referred to as "Employee Dishonesty Coverage with Faithful Performance"). Members may elect to "buy up" the coverage from $2,500 to $1 million. (11) Named Position coverage is optional. Members may elect to schedule various employees, directors, and commissioners, with individual limits of between $5,000 and $1 million. (12) Enduris purchases Identity Fraud Expense Reimbursement coverage. Member claims are not subject to a deductible; the limit is $25,000 per member. Members make an annual contribution to fund the Pool. Since Enduris is a cooperative program, there is joint liability among the participating members. No claim settlements were above the insurance coverage in the last three policy years. Upon joining the Pool, members are contractually obligated to remain for at least one year. They must give notice 60 days before renewal to terminate participation. The Interlocal Governmental Agreement (formerly known as the Master Agreement) is automatically renewed each year unless provisions for withdrawal or termination are applied. Any Member terminated or withdrawing from the Pool shall be liable pro-rata for any assessments levied against Members for any year in which that Member belonged to the Pool as if they were still a Member. Its member participants fully fund Enduris. Members file claims with the Pool, which determines coverage and administers the claims. A seven-member Board of Directors governs the Pool. The Pool’s members elect the Board, and the positions are filled on a rotating basis. The Board meets quarterly, oversees Enduris' business affairs, and provides policy direction to the Pool’s Executive Director. Page 17 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 21 of 22  ABOUT THE STATE AUDITOR’S OFFICE The State Auditor’s Office is established in the Washington State Constitution and is part of the executive branch of state government. The State Auditor is elected by the people of Washington and serves four-year terms. We work with state agencies, local governments and the public to achieve our vision of increasing trust in government by helping governments work better and deliver higher value. In fulfilling our mission to provide citizens with independent and transparent examinations of how state and local governments use public funds, we hold ourselves to those same standards by continually improving our audit quality and operational efficiency, and by developing highly engaged and committed employees. As an agency, the State Auditor’s Office has the independence necessary to objectively perform audits, attestation engagements and investigations. Our work is designed to comply with professional standards as well as to satisfy the requirements of federal, state and local laws. The Office also has an extensive quality control program and undergoes regular external peer review to ensure our work meets the highest possible standards of accuracy, objectivity and clarity. Our audits look at financial information and compliance with federal, state and local laws for all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits and cybersecurity audits of state agencies and local governments, as well as state whistleblower, fraud and citizen hotline investigations. The results of our work are available to everyone through the more than 2,000 reports we publish each year on our website, www.sao.wa.gov. Additionally, we share regular news and other information via an email subscription service and social media channels. We take our role as partners in accountability seriously. The Office provides training and technical assistance to governments both directly and through partnerships with other governmental support organizations. Stay connected at sao.wa.gov Other ways to stay in touch • Find your audit team • Main telephone: • Request public records (564) 999-0950 • Search BARS Manuals (GAAP and cash), and find reporting templates • Toll-free Citizen Hotline: • Learn about our training workshops (866) 902-3900 and on-demand videos • Email: • Discover which governments serve you webmaster@sao.wa.gov — enter an address on our map • Explore public financial data with the Financial Intelligence Tool Office of the Washington State Auditor sao.wa.gov Page 18 4. 2024 Washington State Accountability Audit Presented by: Finance Dire... Page 22 of 22