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Assuming the Powers of Your Transportation Benefit District? Here Are Some Items to Be Aware Of

Last year the 2015 legislative session produced some significant changes for transportation benefit districts (TBDs). 2ESSB 5987 added a new chapter to Title 36, Ch. 36.74 RCW, regarding the assumption of TBDs by cities and counties.

The focus of this blog will be an overview of accounting and reporting requirements as a result of the new legislation. It will address the requirements of the State Auditor’s office (SAO) in the event that your jurisdiction assumes those “rights, powers, functions and obligations,” of the TBD.

Each year the SAO provides BARS manual updates and guidance on the accounting and reporting requirements for local government in Washington State. Through its BARS manuals, the updates and changes to BARS are summarized in the Overview of Significant Changes and this year (2015 reporting year), in addition to several other changes, there are accounting and reporting changes that are specific to TBDs, and more importantly to TBDs that are assumed by cities, towns, and counties.

The SAO has updated the TBD guidance to include three very specific points:

  1. An annual finance report is required for the final year of the existence of the TBD. Whether the city, town, or county assumes the rights, powers, functions, and obligations of the TBD in the first month of the year (January) or the last month, there is a requirement to prepare and submit a final annual report for the TBD. While not specifically addressed within the reporting requirements of BARS, it would be appropriate to include a note disclosure in the notes to financials that indicates the date of the dissolution of the TBD in this final financial report document.

  2. A notification form must be filled out for TBD creations and dissolutions. The SAO has developed a report form for notifying your local audit team of the creation and/or dissolution of governmental entities such as TBDs. The creation of a TBD, and if applicable the dissolution, requires timely completion and electronic submission of this form to the local audit team responsible for performing the audit at your jurisdiction.

  3. Accounting entries (BARS codes) have been prescribed by the SAO for the final entries. Both GAAP and cash basis reporting cities, towns, and counties are to code to “special Items – account code 36950”. (See BARS Manual, Special Topics, Transportation Benefit Districts, Item The BARS manual has prescribed that this account code be used for both the TBD that is disposing of the funds and the city/town/county fund that is receiving the money.  

Over the past few years our office has worked closely with many cities, towns, and counties on the issues of creating and accounting for TBDs. Local government is now looking at assuming the very TBDs that were created, in some cases only a few months ago. Understanding the reporting requirements associated with the assumption of your TBD will assure a successful audit in the future.

While this blog has been all about the assumption of TBD’s it’s important to note that for those cities, towns, and counties that have not created a TBD you would still need to do so in order to access the revenue opportunities provided by Ch. 36.73 RCW. After you have created the TBD then you can assume it. For more information on TBDs, see our transportation benefit districts webpage.

Have questions or comments about TBDs? Write your question in the comments below or email me directly at

MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

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About Toni Nelson

Toni worked with many local governments and authored numerous MRSC publications on budgeting, cash basis accounting and reporting, and the application of Washington State B.A.R.S. requirements. During her time at MRSC, she also conducted multiple trainings annually on similar subjects and was consider an expert in small city finance issues. She retired in 2020.