2018 Annual Comprehensive Financial Report (18-001)15
City of Federal Way, WA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR YEAR ENDED DECEMBER 311 2018
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City of Federal Way History —
The earliest recorded accounts of the Federal Way area tell of Native American families who resided in the area of the
Muckleshoot Reservation on the east side of the Green River Valley and traveled west to the shores of Puget Sound for the
plentiful fisheries resources. Generations of Muckleshoot Indians wore a westward trail across the heavily forested plateau to the
area which is now Saltwater State Park. The arrival of the white man in the nineteenth century resulted in a steady decline in the
Indian population and by 1890, nearly the entire population had disappeared from the area. Isolated on a triangular shaped plateau
rising steeply from Puget Sound, the Federal Way area had little waterfront access or roadways and accordingly, was sparingly
developed compared to Tacoma and Seattle. As late as the turn of the century, the original settlers at Dash Point and Dumas Bay
had to row to Tacoma for supplies and mail. Old Military Road, constructed around 1856 and extending north from Fort
Steilacoom, past Star Lake to Seattle and Fort Lawton, was the first road through the area.
Over time, narrow dirt roads were added to provide east/west access and by 1900, a road was constructed between Star Lake and
Redondo. The second crossroad, the "Seattle Road," connected old Military Road and Kent. The Seattle -Tacoma Interurban Line,
completed in 1901, provided a fast and easy way to reach these urban cities. Improved access brought many visitors to the area
and Star Lake became a popular summer recreation site.
By the 1920s, Federal Highway 99, the interstate that linked the western states from north to south, was complete. At this time,
Federal Way was still primarily forest and farmland. Fred Hoyt had a cabin on Dumas Bay and started a road to Tacoma (still
called Hoyt Road). The timber companies, which had a major logging operation going, built an early railroad line and were
instrumental in getting Marine View Highway (now Dash Point Road) built in the early 1920s. This roadway spurred
development along the coastline. Soon thereafter, Peasley Canyon Road was built to connect Military Road with the Auburn
Valley. This road later became known as South 320th Street. In these early days, roadways set the stage for development in the
area and they still play an important role in the City today.
By the start of World War II, a number of small, thriving communities made up the area that is now Federal Way. Some
communities were clustered around lakes, such as Steel Lake, Star Lake, and Lake Geneva. Others were sited to take advantage of
the view of Puget Sound, like Adelaide and Buenna. As each of these communities grew, residents built small schoolhouses for
their children. By the late 1940s, King County consolidated the many individual red schoolhouses into the Federal Way School
District, from which the City gets its name. During this same period, a library was built along the edge of Highway 99, and
between 308th Street and 320th Street, a small "downtown" developed with a general store, lumber yard, realty office, beauty
parlor, feed store, and gas station. By the end of the 1950s, the ten blocks between 308th and 320th Streets became the first
roadside commercial district. One of the more unique developments was Santa Faire, a family oriented theme park. New shopping
areas were added around the park, helping to create a "community focus" for the residents of the area.
As this commercial area developed, the rest of Federal Way was changing as well. The Boeing Company expanded their
operations in Renton and the Kent Valley and began advertising nationally for engineers. Those engineers in turn began roaming
the wooded acreage in Federal Way in search of housing. One of the earliest residential developments was Marine Hills, built in
1958 overlooking Puget Sound. Weyerhaeuser, one of the early timber companies, had large land holdings in the area and began
to develop their land into high quality housing with amenities like golf courses.
Weyerhaeuser's development company also began developing commercial property, creating the West Campus business park.
The plan was to integrate offices and businesses with lush landscaping. Though initially the corporate office market was not
strong, West Campus has grown almost to capacity, providing space for many civic buildings such as City Hall, the police station,
the area's major health care centers, and higher density housing.
Another major landmark in the area is SeaTac Mall (now The Commons), built in the mid- 1970s on what was farmland south of
320th Street. The Mall is one of the largest in South King County and is the anchor for retail development in the area. The Mall
was a result of population growth in the region and its location was determined by the 320th Street intersection with Interstate 5.
The Interstate supplanted Highway 99 as the main artery for commuter traffic in the County.
By the mid 1980s, South King County was growing quickly. Retail growth occurred along Highway 99, especially at the 320th
Street intersection. Roads and office space were developed to accommodate the increased growth. Residential growth was also
prominent, following plans developed by King County, with a large number of apartment homes. The changes to the community,
with increased housing and traffic, created a movement for greater self-determination. In 1989, the citizens of this area voted for
incorporation and the City of Federal Way was born, incorporating on February 28, 1990 with 58,000 residents.
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CITY OF
Federal Way
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2018
City of Federal Way
33325 8th Avenue South
Federal Way, Washington 98003
(253) 835-2520
www.ciiyoffederalwgy.com
Prepared by the Finance Department
Finance Director
Ade' Ariwoola
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2018
Table of Contents
Page
INTRODUCTORY SECTION
Letterof Transmittal...........................................................................................................................
City Officials and Administrative Officers.......................................................................................
City Functional Organization Chart ....................................................................................................
GFOA Certificate of Achievement.....................................................................................................
FINANCIAL SECTION
Independent Auditor's Report ............................................................................................................
9
Management's Discussion and Analysis............................................................................................
13
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position................................................................................................
27
Statement of Activities...................................................................................................
28
Fund Financial Statements:
Balance Sheet — Governmental Funds.............................................................................
29
Statement of Revenues, Expenditures, and Changes in Fund Balances —
GovernmentalFunds.................................................................................................
31
Reconciliation of the Statement of Revenues, Expenditures, and Change
In Fund Balances of Governmental Funds to the Statement of Activities ...............
33
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
GeneralFund...........................................................................................................
34
StreetFund...............................................................................................................
35
UtilityTax Fund......................................................................................................
36
Performing Arts & Event Center Operations Fund ..................................................
37
Statement of Net Position — Proprietary Funds.................................................................
38
Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds
39
Statement of Cash Flows — Proprietary Funds..................................................................
40
Statement of Fiduciary Net Position.................................................................................
41
Private -Purpose Trust Funds Statement of Changes in Fiduciary Net Position ................
42
Notes to the Basic Financial Statements............................................................................................
43
Required Supplementary Information:
Schedule of Proportionate Share of Net Pension Liability.....................................................
80
Schedule of Employer Contributions......................................................................................
82
Combining and Individual Fund Statements and Schedules — Nonmajor Governmental Funds:
FundDescription....................................................................................................................... 83
CombiningBalance Sheet......................................................................................................... 84
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................... 88
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
ArterialStreet Fund................................................................................................. 92
Solid Waste & Recycling Fund................................................................................ 93
Special Contracts/Studies Fund............................................................................... 94
Hotel/Motel Lodging Tax Fund............................................................................... 95
Federal Way Community Center Fund.................................................................... 96
TrafficSafety Fund.................................................................................................. 97
Community Development Block Grant Fund.......................................................... 98
Paths& Trails Fund................................................................................................. 99
Individual Fund Statements and Schedules — Debt Service Fund:
FundDescription........................................................................................................................ 101
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ...... 102
Combining and Individual Fund Statements and Schedules — Internal Service Funds:
FundDescription....................................................................................................................
103
Combining Statement of Net Position.....................................................................................
104
Combining Statement of Revenues, Expenses and Changes in Fund Net Position .................
106
Combining Statement of Cash Flows.....................................................................................
108
Supplemental Information:
Schedule of State Financial Assistance..................................................................................
112
Schedule of Expenditures of Federal Awards........................................................................
113
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source.........................................................................................
116
Schedule by Function and Activity........................................................................................
117
STATISTICAL SECTION
NetPosition by Component............................................................................................................
120
Changesin Net Position..................................................................................................................
121
Government -wide Revenues by Source and Expenditures by Function .........................................
122
Fund Balances of Governmental Funds..........................................................................................
123
Changes in Fund Balances, Governmental Funds..........................................................................
124
Assessed and Estimated Actual Value of Taxable Property ...........................................................
125
Property Tax Rates and Levies, Direct and Overlapping Governments .........................................
126
PrincipalTaxpayers........................................................................................................................
127
Property Tax Levies and Collections..............................................................................................
128
Ratio of Outstanding Debt by Type................................................................................................
129
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita .....................................................
130
Computation of Direct and Overlapping Debt................................................................................
131
Computation of Limitation of Indebtedness....................................................................................
132
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures Net of Debt Service Expense ................
133
DemographicStatistics...................................................................................................................
134
PrincipalEmployers.......................................................................................................................
135
Property Value and Construction...................................................................................................
136
CapitalAssets by Function.............................................................................................................
137
Operating Indicators by Function...................................................................................................
138
City Government Employees Full -Time Equivalent - History .......................................................
139
Salaries and Surety Bonds of Principal Officials............................................................................
140
Miscellaneous Statistical Information............................................................................................
141
Principal Taxpayers — Sales Taxes.................................................................................................
142
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Page 1
CITY OF
Federal Way
June 14, 2019
People of the City of Federal Way
Honorable Mayor and City Council
I am pleased to submit to you the 2018 Comprehensive Annual Financial Report (CAFR) of the City of Federal Way,
Washington. This report is published annually as the official annual financial report and complies with state law (RCW
43.09.230) requiring annual report for Washington municipal governments to be certified and filed with the Washington State
Auditor's Office in a timely manner. The accuracy of the data, completeness and fairness of the presentation, including all
disclosures rests with the City management. All disclosures necessary to enable the reader to gain an understanding of the
City's financial activities have been included.
The City operates under a system of accounting and internal controls that are concerned with safeguarding of assets and the
reliability of financial records. The definition of accounting control assumes reasonable, but not absolute assurance that the
objectives expressed in it will be accomplished by the system. The concept of reasonable assurance recognizes that the cost of
internal control should not exceed the benefits expected to be derived.
This transmittal letter is designed to complement the Management Discussion & Analysis (MD&A) and should be read in
conjunction with it. The City's MD&A can be found immediately following the Independent Auditor's Report.
REPORTING ENTITY
The City is a noncharter Optional Code City with a Mayor -Council form of government. It was incorporated on February 28,
1990, and is governed under the provisions of the Optional Municipal Code of the Revised Code of Washington. Optional
Code City status increases the City's operating authority by extending it to the powers of all four city classifications which
exist in Washington Law.
The City Council consists of seven council members, all of whom are elected at large by citizens of Federal Way to serve four-
year terms. In November 2009, the citizens of Federal Way approved Proposition 1 to change the form of government from a
City Manager -Council run government to an elected Mayor -Council government. Federal Way voters elected former City
Councilmember and King County Senior Deputy Prosecuting Attorney Jim Ferrell as Mayor on November 5, 2013 and was re-
elected November 7, 2017.
City services provided include: police protection, construction and maintenance of streets, building inspection, municipal court
services, jail services, planning and zoning, park services, emergency management services, surface water management and
general administration, including finance. Services for a land use hearing examiner are contracted. The City has nine major
departments consisting of (1) Mayor's Office; (2) City Council; (3) Law; (4) Finance; (5) Municipal Court, (6) Parks and
Recreation; (7) Public Works; (8) Police; (9) and Community Development. Fire protection and emergency medical services
are provided by South King Fire & Rescue. Lakehaven Utility District delivers water and sewer services. King County Metro
provides public transportation services. Public housing services are the primary focus of the King County Housing Authority.
The King County Library System engages City residents through its library and reference services. School District No. 210
offers educational programs for kindergarten through high school students, in addition to vocational training.
ECONOMIC FACTORS AFFECTING FINANCIAL CONDITION
The current economic condition has made considerable strides since the post Great Recession era as employment and inflation
levels are consistent with the Federal Reserve's mandate for maximum sustainable employment and price stability. Consumer
confidence levels are at its best since pre -Great Recession levels.
Page 2
Nationally, according to Bureau of Labor Statistics, the CPI rose 1.9 percent in 2018, slightly less comparable to 2016 and
2017. It was still larger than the 1.6-percent average annual increase over the past 10 years.
The food index increased 1.6 percent from December 2017 to December 2018, the same as the previous year. The index for
food at home rose 0.6 percent in 2018, after rising 0.9 percent in 2017. From December 2017 to December 2018, the index rose
for four of the six major grocery store food groups. Prices declined over the year in the other two groups. The index for fruits
and vegetables rose 1.6 percent in 2018, after rising 1.5 percent in 2017. The index for cereals and bakery products increased
1.7 percent in 2018, while the index for nonalcoholic beverages and beverage materials increased 1.4 percent. The index for
other food at home increased 0.2 percent in 2018. The index for meats, poultry, fish, and eggs fell 0.4 percent in 2018,
following a 2.8 percent increase in 2017. The index for dairy and related products fell 0.1 percent in 2018, the fourth straight
yearly decline.
The energy index fell 0.3 percent in 2018, after a 6.9 percent increase in 2017. The gasoline index decreased 2.1 percent in
2018, following a 10.7-percent increase in 2017. The index for natural gas increased for the third straight year in 2018, rising
2.3 percent, compared with 4.7 percent in 2017. The index for electricity increased 1.1 percent in 2018, after rising 2.6 percent
in 2017. The index for medical care increased 2.0 percent in 2018, following a 1.8 percent increase in 2017. Prescription drug
index fell 0.6 percent in 2018, while index rose 3.7 for hospital services and 0.6 percent for physicians' services.
The Seattle -Tacoma -Bellevue, WA's CPI for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.7% in December
2018 compared to increase of 4.0% in 2017. The national CPI-W increased 2.3% % for 2018. The Seattle -Tacoma -Bellevue,
WA annual unemployment rate for 2018 was 3.9% down from 4.1% in 2017. The last time Seattle -Tacoma -Bellevue annual
unemployment rate was below 4.0% was 2007 which was at 3.7% just before the "mortgage market" crash in 2008.
ECONOMIC TRENDS
Federal Way is the tenth most populated city in the state of Washington according to U.S. Census.gov with 97,442 people after
City of Spokane Valley with 99,703 and closely followed by Yakima at 93,884 then Bellingham at 90,665. In 2017, King
County median household income was $83,571; Federal Way $62,086, Renton $70,661, Spokane Valley $48,015, and Yakima
$42,092. The City of Federal Way is located on a plateau adjacent to Puget Sound in King County, eight miles north of
downtown Tacoma and 25 miles south of downtown Seattle. The City occupies approximately 22.5 square miles and is served
by Interstate 5 and state highways 99 and 509.
In 2018, there were 37,085 housing units in Federal Way, a slight increase over 2017 of 36,938 housing units. Of these units,
54.5% or 20,226 were single family homes, 42% or 15,573 were multi -family units, and 3.5% or 1,286 were mobile homes and
trailers.
The community is residential and commercial, with the populace employed locally and in the neighboring cities such as
SeaTac, Kent, Tacoma, Bellevue, and Seattle. Employment in Federal Way is highly concentrated in retail and services sectors
which respond primarily to the needs of the local market area population. Major employers are; Federal Way Public Schools,
St. Francis Community Hospital, World Vision, Wild Waves, U.S. Postal Services, and Davita. The top twenty employers
report 10,139 employees in 2018.
Sales tax collected in 2018 total $14.7 million which was $532,000 more than $14.2 million of 2017. The retail sector of the
local economy is anchored by the following areas; the first is South 348th and State Highway 99 including Wal-Mart Super
Center, Wholesale Sports, Costco, Lowe's Home Improvement Center, and Home Depot. The second is The Commons
regional mall including Target, TJ Max, Kohls, Dicks Sporting Goods and many other small businesses adjacent to the
area. According to a listing of businesses registered with the City of Federal Way and sorted by the Standard Industrial
Classification, the business economy appears to be configured as follows: retail trade 50%; services 26%; construction 11%;
information 4%; wholesale trade 4%, manufacturing 1%, and other 4%.
In 2018, the total assessed value of property in Federal Way was $11.4 billion, which was approximately 10.7% 8.4% higher
than the 2017 assessed valuation of $10.3 billion.
Real Estate sales increased by 2.7% to approximately $841 million in 2018 as compared to $819 million in 2017. A total of
580 building permits in 2018 compared to 649 in 2017 and 3,464 other building related permits compared to 3,425 that were
issued in 2017. Estimated market value for permits in 2018 was $96 million and in $72 million in 2017. Significant building
Page 3
permits include: Pacific Dental Building, Starbucks at Pacific Dental Building, Pecos Pit BBQ, StorQuest, Northshore Heated
Storage, Federal Way Self -Storage, NW Kidney Center, NWCC Center Plaza Demo and Rebuild, and DiagnosTechs.
LONG-TERM PLANNING
The City's fiscal policy requires the City to prepare long-range projections for six years beyond the current budget period. The
projection extends current operations to the future to see if the services are sustainable and determine the magnitude of future
financing gaps, if any. This glimpse into the future allows the City to proactively plan and implement corrective measures over
time to avoid sudden drastic changes in service levels or in revenue/tax policies. In addition, the City's fiscal policy requires
the City to balance its ongoing services with ongoing revenues.
MAJOR INITIATIVES AND ACCOMPLISHMENTS
During 2018, the City of Federal Way completed construction of several hot -mix asphalt overlays totaling over $1.3M.
Construction started on two grant funded projects: 1) 2018 National Highway System (NHS) Preservation Project that was over
70% grant funded and approximately 47% complete at the end of 2018; and 2) Military Road S / S 298th Street Roundabout
that was over 80% grant funded and approximately 52% complete at the end of 2018.
Construction continued on Pacific Hwy HOV Phase 5 (S 359th to S 340th Street) Project which will extend the 7-lane Pacific
Highway urban cross section. This project reached approximately 95% completion in 2018 and will be physically complete in
2019.
In addition, 2018 continued the city's success in securing grant funding including a $500,000 Transportation Improvement
Board (TIB) grant for a sidewalk project on Dash Point Road in front of Lakota Middle School; a $390,000 Federal Grant for a
preservation grant on Campus Drive SW between 19th Ave SW and 1st Ave S; a $110,000 Federal Grant for a preservation
grant on 16`' Avenue S between S 348th Street and Pacific Hwy S; a $810,000 Federal Grant for preservation of SW 3561h
Street between 15`' Ave SW and 4`' Place SW; a $170,000 Federal Grant for design of Adaptive Traffic Control System Phase
3; and a $550,000 Federal Grant for design of a non -motorized corridor parallel to Pacific Hwy on 16th Ave S between S 308th
Street and S 288th Street.
The City Council passed resolution 18-741 on September 4t", 2018 to separate from the SCORE interlocal agreement effective
on the year following the date of notice.
OUTLOOK FOR THE FUTURE
Council identified the following set of goals for the City which was adopted on March 7, 2006.
L Integrate the public safety strategy in all facets of City operations, building on a strong community -based approach.
2. Create a multi -use urban city center that is pedestrian friendly, linked to neighborhoods and parks, and services as the
social and economic hub of the City.
3. Establish Federal Way as an economic leader and job center in South King County by attracting regional market for
high quality office and retail businesses.
4. Maintain the capital facilities plan and provide financing options for transportation and surface water improvements,
parks, recreation, and cultural arts and public facilities.
5. Ensure a responsive service culture within the City organization where employees listen carefully, treat citizens and
each other respectfully and solve programs creatively, efficiently, and proactively.
6. Position Federal Way as a regional leader by working collaboratively with other local and regional jurisdictions in
order to leverage resources.
INDEPENDENT AUDIT
State law requires an annual audit of all City books of account, financial records, and transactions by the State Auditor, an
independently elected state official. In addition to meeting the requirements set forth under state law, the audit was also
designed to meet the requirements of the Federal Single Audit Act of 1984 and related OMB Circular A-133. The 2018 audit
of the City has been completed in conformance with generally accepted auditing standards. The financial statements of all City
funds have been included in this audit. The City has been given an unmodified opinion in 2018; which is the 29th consecutive
year receiving a clean audit. The State Auditor's report on the basic financial statements is included in the financial section of
this report.
AWARDS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement
for Excellence in Financial Reporting to the City of Federal Way for its comprehensive annual financial report (CAFR) for the
year ended December 31, 2017. The City of Federal Way has received a Certificate of Achievement for the last twenty-eight
years (fiscal years ended 1990 — 2017). In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial
report continues to meet Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to
determine its eligibility for another certificate.
The City of Federal Way also received the Government Finance Officers Association Distinguished Budget Presentation
Award for its biennial budget for the years beginning January 1, 2017 and 2018. In order to receive this award, a governmental
unit must publish a budget document that meets program criteria as a policy document, a financial plan, an operations guide,
and a communications medium.
ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of
the finance department. In addition, staff in all City departments should be recognized for responding so positively to the
requests for detailed information which accompany each audit. A special note of thanks is given to Chase Donnelly,
Accounting Manager who served as the coordinator for the CAFR preparation. The role of the State Auditor's Office should
also be acknowledged as a significant contribution to a fine product. Finally, we wish to express our appreciation to the Mayor
and City Council for their ongoing support and for providing the firm foundation for the pursuit of excellence in all realms of
professional endeavors.
Respectfully submitted,
Ademola A. Ariwoola, MBA, CGFM
Finance Director
Page 5
2018
CITY OFFICIALS
EXECUTIVE & LEGISLATIVE BODY
SUSAN HONDA
Deputy Mayor
HOANG V. TRAN
Councilmember #4
JIM FERRELL
Mayor
LYDIA ASSEFA-DAWSON
Councilmember #1
MARK KOPPANG
Councilmember #5
JESSE E. JOHNSON
Councilmember #2
MARTIN A. MOORE
Councilmember #6
DINI DUCLOS
Councilmember #7
Elected/
Position
Elected/Appointed
Term
Appointed
Email
Mayor
Jim Ferrell
1/l/18-12/31/21
11/28/17
Jim.Ferrell&cityoffederalwa,
Position#1
Lydia Assefa-Dawson
1/1/16-12/31/19
11/24/15
Lydia.Assefa-Dawson(a),cityoffederalwa,
Position #2
Jesse E. Johnson
11/28/17-12/31/21
11/28/17
Jesse.Johnson(acityoffederalway.com
Position #3
Susan Honda
1/l/16-12/31/19
11/24/15
Susan.Honda(q
cityoffederalway.com
Position #4
Hoang V. Tran
1/l/18-12/31/21
11/28/17
Hoanjz.Tran@cityoffederaIwqy.com
Position #5
Mark Koppang
1/l/16-12/31/19
11/24/15
Mark.Koppan
,cityoffederalway.com
Position #6
Martin A. Moore
1/l/18-12/31/21
11/28/17
Martin.Moore(a)cityoffederalway.com
Position #7
Dim Duclos
1/l/16-12/31/19
11/24/15
Dini.Ducloskcityoffederalwa,
Phone
(253)835-2402
(253) 835-2401
(253)835-2401
(253)835-2401
(253)835-2401
(253) 835-2401
(253)835-2401
(253)835-2401
JUDICIAL BRANCH
Elected/
Elected/
Position
Employee
Appointed
Term
Appointed
Contact Information
Presiding
David Larson
Elected
N/A
3/3/2008
David.Larson@cityoffederalway.com
Judge
(253)835-3012
Judge
Rebecca
Elected
N/A
1/1/2010
Rebecca. Robertson@cityoffederalway.com
Robertson
(253)835-3025
Court
Susanne White
Appointed
N/A
2/22/2010
Susanne.White@cityoffederalway.com
Administrator
(253) 835-3000
CITY ADMINISTRATION (In alphabetical order)
Emy Contact Information
City Attorney
Ryan Call
3/9/2017
Ryan.Call@cityoffederalway.com
(253)835-2572
City Clerk
Stephanie
10/7/2014
Stephanie.Courtney@cityoffederalway.com
Courtney
(253) 835-2540
Community Development
Brian Davis
11/1/2016
Brian.Davis@cityoffederalway.com
Director
(253) 835-2612
Economic Development
Tim Johnson
9/15/2014
Tim.Johnson@cityoffederalway.com
Director
(253) 835-2412
Finance Director
Ade Ariwoola
4/1/2014
Ade.Ariwoola@cityoffederalway.com
(253)835-2520
Human Resources Manager
Jean Stanley
1/1/2011
Jean.Stanley@cityoffederalway.com
(253)835-2532
IT Manager
Thomas
7/1/2011
Thomas.Fichtner@cityoffederalway.com
Fichtner
(253)835-2547
Parks Director
John Hutton
7/23/2014
John.Hutton@cityoffederalway.com
(253)835-6910
Police Chief
Andy Hwang
3/18/2014
Andy.Hwang@cityoffederalway.com
(253)835-6716
Public Works Director
EJ Walsh
8/18/2018
EJ.Walsh@cityoffederalway.com
(253)835-2713
Page 7
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Federal Way
Washington
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2017
Executive Director/CEO
Office of the Washington State Auditor
Pat McCarthy
June 14, 2019
Mayor and City Council
City of Federal Way
Federal Way, Washington
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of Federal Way, as
of and for the year ended December 31, 2018, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (360) 902-0370 • Pat.McCarthy@sao.wa.gov
Page 10
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the City's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the City's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fund information of the City of Federal Way, as of December 31, 2018, and
the respective changes in financial position, and, where applicable, cash flows thereof, and the respective
budgetary comparison for the General, Street, Utility Tax, and Performing Arts & Events Center
Operations funds for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Matters of Emphasis
As discussed in Note 18 to the financial statements, in 2018, the City adopted new accounting guidance,
Governmental Accounting Standards Board No. 77, Tax Abatement Disclosures. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and required supplementary information listed in the table of contents be
presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board who considers
it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
Page 11
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary and Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The combining and individual fund statements and
schedules and other supplementary information are presented for the purposes of additional analysis and
are not a required part of the basic financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the financial statements. This information has been subjected to auditing procedures
applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used
to prepare the financial statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America.
In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
Our audit was conducted for the sole purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements as a whole. The Introductory and Statistical
Sections are presented for purposes of additional analysis and are not a required part of the basic financial
statements of the City. Such information has not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on it.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we will also issue our report dated June 14, 2019,
on our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. That report will be issued under separate cover in the City's Single Audit Report. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on internal control over financial
Page 12
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
Sincerely,
Pat McCarthy
State Auditor
Olympia, WA
Page 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Federal Way, we offer readers of our annual financial report a narrative overview, and an
analysis of the financial activities of the City of Federal Way for the fiscal year ended December 31, 2018. We encourage
readers to consider the information in conjunction with the preceding letter of transmittal, the financial statements and notes to
the financial statements that follow.
FINANCIAL HIGHLIGHTS
• The total assets plus deferred outflows of the City of Federal Way exceeded its liabilities plus deferred inflows at
December 31, 2018 by $597.9 million (Net Position). Capital Assets (net of depreciation and related debt) account for
88.6% of this amount with a value of $529.9 million. Of the remaining net position of $67.9 million, $47.0 million may be
used to meet the government's ongoing obligations to citizens and creditors, without legal restriction while the $21.0
million are restricted for specific use. (See page 27).
• The City's total net position increased by $12.1 million, or 2.1% above 2017 as referenced on page 15. Governmental
activities increased by $11.4 million or 2.2% while business -type activities increased by $0.6 million or 1.0%. The
increase in governmental and business -type activities is primarily due to the increase in capital assets (See note 8 on page
59). More detail is described in the analysis below.
• Net investment in capital assets increased by $6.8 million (See page 15) and unrestricted net position increased by $4.8
million respectively over 2017 as referenced on page 15.
• Restricted Net Position of $21.0 million increased by $0.5 million or 2.5% primarily due to LIFT funding received for
capital projects not yet spent. Restricted Net Position is for funding of capital projects and debt service. (See page 16 &
52).
• Long term liabilities decreased by $4.1 million or 9.0% primarily due to the reduction of $2.4 million in governmental -
type and $0.5 million in business -type GASB 68 net pension liability (see note 11 on page 70), long term debt reduction of
$1.1 million for General obligation debt, and a $0.1 million reduction of public works trust fund loans. (See Note 11 on
page 70).
• Governmental fund balances at year-end were $37.9 million, a $0.5 million or 1% decrease from the prior year. Of the
$37.9 million, $7.2 million, or 19.0% of the governmental fund balance is unassigned and available to fund ongoing
activities. The remaining $30.7 million is earmarked for debt service, paths & trails reserve, hotel/motel lodging tax,
police special funds, petty cash/change funds, court trust fund, advance travel, strategic opportunities reserve, streets
maintenance and capital projects. (See page 30 and page 52).
• Unrestricted or Unassigned fund balance in the General Fund was $15.0 million, which increased by $1.6 million or 12.0%
from the prior year, primarily due to a prior period adjustment for state shared revenue of $2.02M comprised of $1.5M in
sales tax, $0.3M is local criminal justice sales tax, $0.2M in Motor Vehicle Fuel Tax, and $0.1M in other taxes. (See note
15 on page 76)
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of Federal Way's basic financial statements.
The basic financial statements are comprised of three components:
1) government -wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.
In addition to the required components, the City's annual report also includes other supplementary information. The first set
of supplementary information is the Combining Statements. These provide Balance Sheets, Statement of Revenues,
Expenditures, and Changes in Fund Balances with Budget to Actual Comparisons, Statement of Net Position, and Cash Flows
for all proprietary and internal service funds. The other set of supplementary information is the Statistical Section. This
section provides a one to ten-year view of the City's revenues, expenditures, debt obligations and capacity, the City's largest
taxpayers, and those entities with the largest employment within the City of Federal Way. This section provides a long-term
perspective on the City's economy.
Page 14
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the City of Federal
Way's finances, in a manner similar to a private -sector business.
A) The statement of net position presents information on all of the City of Federal Way's assets plus deferred outflows
and liabilities plus deferred inflows, with the difference between the two reported as net position. This statement
serves a purpose similar to that of a balance sheet in private business. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
B) The statement of activities presents information showing how the City's net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave).
Both of the government -wide financial statements distinguish functions of the City of Federal Way that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover
all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities
of the City of Federal Way include law enforcement and public safety, construction and maintenance of streets, building
inspection, municipal court services, jail services, community planning and development services, parks and recreation
facilities, other community services and general administration. The business -type activities of the City include surface water
management and the control and operation of Dumas Bay Centre, a multi -use facility that offers business and retreat
accommodations, recreation and cultural arts classes, and a performing arts facility.
The City has no separately identified component units included in the government -wide financial statements. The City has
reported its investment in two governmental joint ventures: Valley Communications Center and South Correctional Entity
(SCORE). Descriptions of these joint ventures are found in Note 14 of the notes to the financial statements.
The government -wide financial statements can be found immediately following this MD&A
Fund Financial Statements
The annual financial report includes fund financial statements in addition to the government -wide financial statements. While
the government -wide statements present the City's finances based on the type of activity, general government versus business -
type, the fund financial statements are presented by fund type such as the general fund, special revenue funds, proprietary
funds, and fiduciary funds. This is the first year the City is reporting a fiduciary fund. A fund is a specific fiscal and
accounting entity with a self -balancing set of accounts used to account for specific activities or to meet certain objectives.
Funds are often set up in accordance with special regulations, restriction or limitations. The City of Federal Way uses fund
accounting to ensure and show compliance with finance -related legal requirements. The City's funds are divided into three
categories: governmental fund, proprietary funds, and fiduciary funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions as are reported in governmental activities in the
government -wide financial statements. However, unlike the government -wide financial statements, governmental fund
financial statements focus on near -term inflows and outflows of spendable resources as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term
financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to
compare the information presented for governmental funds with similar information presented for government -wide financial
statements. By doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City of Federal Way maintains twenty individual governmental funds. The City's seven major governmental funds, the
general fund, street fund, utility tax fund, debt service fund, performing arts and event center operations fund, transportation
fund, and performing arts & events center fund are presented separately in the governmental fund balance sheet and the
governmental fund statement of revenues, expenditures, and changes in fund balances. The remaining governmental funds are
combined into a single column labeled non -major governmental funds. Individual fund data for each of the non -major
governmental funds can be found in combining statements later on in this report.
Page 15
The City maintains control over its operating funds through the adoption of the biennial budget. Budgets are adopted at the
fund level and according to state law. A budgetary comparison statement is presented for the General, Street, and Utility Tax
Fund as a basic financial statement. The basic governmental fund financial statements can be found on pages after the
government -wide statements of this report.
Proprietary Funds
The City of Federal Way maintains two types of proprietary funds. Enterprise funds are used to report the same functions
presented as business -type activities in the government -wide statements. The City uses enterprise funds to account for its
Surface Water Management and the Dumas Bay Centre. Internal service funds are an accounting device used to accumulate
and allocate costs internally among the City's various functions. The City uses internal service funds to account for its risk
management, information systems, mail and duplication services, fleet of vehicles and motorized equipment, facilities
management, health insurance, and unemployment services.
Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The
proprietary fund financial statements provide separate information for the Surface Water Management fund and for the Dumas
Bay Centre. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data is provided in the form of combining statements elsewhere in this report.
The proprietary fund financial statements can be found following the governmental fund statements in this report.
Fiduciary Funds
The City of Federal Way maintains one fiduciary fund. Resources in this fund are held for the benefit of parties outside the
government. These funds are not available to support City programs so are not reflected in the government -wide financial
statements. The accounting for fiduciary funds is similar to that of proprietary funds. This is the first year the City has
reported a fiduciary fund.
Notes to the Financial Statements
The notes provide additional information that is essential to the full understanding of the data provided in the government -wide
and fund financial statements. The notes to the financial statements can be found immediately following the fund financial
statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents the combining statements for
non -major governmental funds, internal service funds, and capital assets of governmental funds. The City Council passed
resolution 18-741 on September 41h, 2018 to separate from the SCORE interlocal agreement effective on the year following the
date of notice. At the April 16, 2019 council meeting the City Council decided to bond the City portion of the SCORE debt
separately from the SCORE entity. The City currently owes 12,891,600 in principal payments as of 12/31/2018.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
This section provides analysis of the government -wide financial statements including long-term and short-term information
about the City's overall financial condition. The following tables address the financial results of the City as a whole.
Current and other assets
Capital assets and CIP,
net ofaccum depreciation
Total assets
CONDENSED STATEMENT OF NET POSITION
As of December 31, 2018 and 2017
Gowrnmental Activities Business -Type Activities Total
2018 2017 2018 2017 2018 2017
$ 94,949,966 $91,707,136 $ 7,847,840 $8,067,357 $ 102,797,806 $ 99,774,493
486,461,096 481,042,371 62,422,174 61,865,439 548,883,270 542,907,810
581,411,062 572,749,507 70,270,014 69,932,796 651,681,076 642,682,303
Deferred ouflows ofresources 2,467,799 2,215,367 168,933 226,900 2,636,732 2,442,267
Total deferred outflows ofresource 2,467,799 2,215,367 168,933 226,900 2,636,732 2,442,267
Long-term liabilities
Other liabilities
Total liabilities
40,499,660 44,030,949 1,117,846 1,674,958 41,617,506 45,705,907
8,138,161 9,318,671 830,505 759,603 8,968,666 10,078,274
48,637,821 53,349,620 1,948,351 2,434,561 50,586,172 55,784,181
Deferred inflows ofresources 5,508,557 3,318,127 344,891 227,081 5,853,448 3,545,208
Total deferred inflows ofresources 5,508,557 3,318,127 344,891 227,081 5,853,448 3,545,208
Net position:
Net investment in:
capital assets
Restricted
Unrestricted
Total net position
467,610,817 461,491,598
20,916,203 20,412,211
41,205,463 36,393,318
62,326,054 61,673,201
39,867 33,440
5,779,784 5,791,413
529,936,871 523,164,799
20,956,070 20,445,651
46,985,247 42,184,731
$ 529,732,483 $ 518,297,127 $ 68,145,705 $ 67,498,054 $ 597,878,188 $ 585,795,181
Page 16
Analvsis of Net Position
Total net position of the primary government of $597.9 million at December 31, 2018 increased by $12.1 million or 2.1%
compared to December 31, 2017. The increase is due to governmental type activities increase of $11.4 million, and business -
type activities increase of $0.7 million. More detail on the changes in net position are described below under Governmental
and Business -Type activities.
The largest component of the City's net position, 89% or $529.9 million, is net investment in capital assets. These capital
assets such as land, streets, trails, parks, police vehicles, and parks equipment are used to provide services to the citizens.
Consequently, these assets are not available to sell and convert to cash for future spending.
Approximately 2.4% or $14.5 million (page 27) of the total net position of the city are restricted for use on capital projects or
are earmarked for current approved capital projects. Some of the major capital projects the funds are being used for include the
panther lake trail and pedestrian access improvements, SR99 HOV Lanes Phase V project, City Center Access Phase I, and
Grand staircase project. The City attempts to fund capital construction projects on a pay-as-you-go basis, aggressively
pursuing grant funding and cost sharing with developers to construct large projects in the City that impact the economy and
transportation systems.
The remaining balance of restricted net position of $6.5 million are for: $0.58 million for police special funds, and court trust,
$0.04 million for steel lake and north lake management districts, $0.04 million for prepaid insurance/debt and flex plan, $0.69
million for peg and franchise fees for educational and governmental access services, $1.20 million for lodging tax, $0.96
million for paths and trails, $0.03 million for Community Development Block Grant, and $3.00 million for debt service.
The unrestricted business -type activities portion of $5.8 million; $4.4 million can only be spent on surface water management
and the remaining $1.4 million on improvements to Dumas Bay Centre and Knutzen Family Theatre. Maintenance of catch
basins, pump stations, storm drain flushing, and other capital construction projects such as Marine Hills Conveyance System
pipe upgrades and Lakota Wetland Berm Repair are examples of utility activities.
Other functions of the City may access the remaining $41.2 million in governmental activities unrestricted net position to meet
ongoing obligation to citizens and creditors. Examples of other City obligations which net position may be used for are public
safety, economic development, parks maintenance, ongoing street maintenance, and committed funds for capital projects.
At the end of the fiscal year, the City of Federal Way reported positive balances in all three categories of net position, for the
government as a whole, as well as for the separate governmental and business -type activities.
Governmental Activities:
Current and other assets increased by $3.2 million or 3.5% primarily due to a net pension asset increase of $2.0 million, a $2.1
million increase in due from other governments from a prior period adjustment for state shared revenue of $2.02M comprised
of $1.5M in sales tax, $0.3M is local criminal justice sales tax, $0.2M in Motor Vehicle Fuel Tax, and $0.1M in other taxes, a
$1.4 million increase in investment in joint venture for SCORE and Valleycomm, and $0.3 million increase in receivables due
to grants accrued but not yet received; offset by a decrease of $2.7 million in cash and cash equivalents and investments due to
$1.5 million real estate excise tax used for street capital projects, and $1.2 million used for payment of debt service.
Capitals assets and CIP, net of accumulated depreciation increased by $5.4 million or 1.1% primarily due to the net addition of
assets in the current year of $5.6 million, offset by a prior period adjustment of $0.2 million (See Note 8 on page 59). This is
primarily due to a net addition of $30.8 million in buildings/structures primarily for the PAEC building, and $3.5 million in
land for donated developer contributions and purchase of target property. Construction in progress decreased by $26.7 million
due to the completion of the $32.8 million PAEC building, and completion of transportation projects such as 21't Ave S
Sidewalks, and Citywide Pedestrian Crossing Improvements for roads, sidewalks, streetlights, and traffic signals totaling $2.8
million; offset by construction in progress additions of $8.9 million for transportation projects such as SR99 HOV Lanes Phase
5, City Center Access Phase I, and panther lake parks trails improvements. Infrastructure decreased by $1.3 million and
improvements other than building decreased by $1.0 million primarily due to current year depreciation of assets exceeding the
completion of projects.
Deferred outflows of resources increased by $0.3 million for governmental activities due to higher than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans. (See Note 9 on page 61).
Page 17
Long-term liabilities decreased by $3.5 million or 8.0% due to the reduction of $2.4 million net pension liability for GASB 68
state sponsored pension plan, and long term debt decrease of $1.1 million for General obligation debt. (See Note 11 on page
70).
Other liabilities decreased by $1.2 million or 12.7% primarily due to decreased liabilities at the end of the year of $0.9 million
in accrued vouchers payable for transportation construction for roads, sidewalks, streetlights, and traffic signals.
Deferred inflows of resources increased by $2.2 million for governmental activities due to a prospective change on the average
remaining service life calculation used for the GASB 68 state sponsored pension plan (See Note 9 on page 61).
Net investments in capital assets increased by $6.1 million or 1.3% primarily due to an increase capital assets and CIP, net of
accumulated depreciation explained in the above capital assets description (See note 8 and note 15 on pages 59 and 76), and a
decrease in long-term liabilities for capital related debt .
Restricted net position represents amounts that must be used in accordance with external restrictions, and increased by $0.5
million or 2.5% from the prior year primarily due to LIFT funding received for capital projects not yet spent. Other restricted
funding is comprised of debt service, peg fees for government access channel under contracts and studies fund (page 52), paths
& trails funding, and lodging tax.
The remaining Unrestricted net position increased by $4.8 million or 13.2% primarily due to a prior period adjustment for state
shared revenue of $2.OM comprised of $1.5M in sales tax, $0.3M is local criminal justice sales tax, $0.2M in Motor Vehicle
Fuel Tax, and $0.1M in other taxes,a net pension asset increase of $2.OM increase, and a $1.4 million increase in investment in
joint venture for SCORE and Valleycomm.
Business -Type Activities:
Current and other assets decreased by $0.2 million or 2.7% primarily due to a decrease in cash and cash equivalents of $0.4
million from surface water management operations, offset by $0.2 million increase in cash and cash equivalents and
receivables for Dumas Bay Centre operation and rentals.
Capitals assets and CIP, net of accumulated depreciation increased by $0.6 million or 0.9% primarily due an increase of $2.0
million in infrastructure additions due to the completion of projects such as Marine Hills Conveyance System and Lakota
Wetland Berm Repair. In the current year, this was offset by the addition of accumulated depreciation of $0.7 million, and net
reduction of $0.8 million in construction in progress for completed projects. (See Note 8 on page 59).
Deferred outflows of resources decreased by $0.06 million for business -type activities due to higher than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans. (See Note 9 on page 61).
Long-term liabilities decreased by $0.6 million due to current year GASB 68 adjustment to pension liability of $0.5 million and
paying down of Public works trust fund loans. (See Note 9 and 11 on pages 61 and 70).
Other liabilities increased by $0.07 million or 9.3% primarily due to an increased in unearned revenue for the Dumas Bay
Centre for future rentals at the facility.
Deferred inflows of resources increased by $0.1 million for business -type activities due to a prospective change on the average
remaining service life calculation used for the GASB 68 state sponsored pension plan (See Note 9 on page 61).
Net investments in capital assets increased $0.7 million or 1.1% primarily due to a $0.6 million increase in surface water
management construction in progress and infrastructure described above, and a low outstanding balance in Public Works trust
fund loan.
Unrestricted net position decreased by $0.01 million or 0.2% primarily due to the decreases in current and other assets
described above.
CHANGES IN NET POSITION
For the Years Ended December 31, 2018 and 2017
Governmental Activities
Business -Type
Activities
Total
2018
2017
2018
2017
2018
2017
Revenues:
Programs revenues:
Charges for services
$ 18,444,808
$ 17,113,413
$ 5,035,591
$ 4,997,202
$ 23,480,399
$ 22,110,615
Operating grants & contrib.
6,099,833
6,238,698
48,504
53,282
6,148,337
6,291,980
Capital grants & contrib.
8,549,593
14,864,266
622,735
1,078,904
9,172,328
15,943,170
General revenues:
Property taxes
10,937,481
10,718,060
-
-
10,937,481
10,718,060
Sales tax
14,731,318
14,199,460
-
-
14,731,318
14,199,460
Local criminal justice sales tax
2,934,354
2,616,306
-
-
2,934,354
2,616,306
Utility tax
11,719,589
12,425,975
-
-
11,719,589
12,425,975
Real estate excise tax
4,240,825
4,226,344
-
-
4,240,825
4,226,344
Other taxes
1,392,982
1,063,079
-
-
1,392,982
1,063,079
Other
2,405,133
3,836,850
132,692
60,544
2,537,825
3,897,394
Total Revenue
81,455,916
87,302,451
5,839,522
6,189,932
87,295,438
93,492,383
Expenses:
General government
4,457,083
4,179,619
-
-
4,457,083
4,179,619
Security of persons & property
35,513,749
36,632,272
-
-
35,513,749
36,632,272
Transportation
15,227,484
13,681,482
-
-
15,227,484
13,681,482
Physical environment
487,104
415,771
-
-
487,104
415,771
Economic environment
4,739,077
4,074,379
-
-
4,739,077
4,074,379
Health and human services
1,432,259
1,714,311
-
-
1,432,259
1,714,311
Culture and recreation
9,280,828
9,329,314
-
-
9,280,828
9,329,314
Interest on long-term debt
542,802
502,721
-
-
542,802
502,721
Surface Water Management
-
-
4,620,161
4,385,355
4,620,161
4,385,355
Dumas Bay Centre
-
-
921,839
1,179,967
921,839
1,179,967
Total Expenses
71,680,386
70,529,869
5,542,000
5,565,322
77,222,386
76,095,191
Change in net position before
9,775,530
16,772,582
297,522
624,610
10,073,051
17,397,192
transfers
Transfers
(123,502)
(942,000)
123,502
942,000
-
-
Change in net position
9,652,028
15,830,582
421,024
1,566,610
10,073,052
17,397,192
Net position - beginning
518,297,127
504,763,318
67,498,054
64,220,825
585,795,181
568,984,143
Prior period adjustment Note 15
1,783,328
(2,296,773)
226,627
1,710,618
2,009,955
(586,155)
Adjusted net position - beginning
520,080,455
502,466,545
67,724,681
65,931,443
587,805,136
568,397,988
Net position - ending
$529,732,483
$518,297,127
$ 68,145,705
$ 67,498,053
$597,878,188
$585,795,180
Page 19
Analysis of the change in net position:
Total government -wide revenues of the primary government decreased by $6.2 million or 6.6% and total expenses increased by
$1.1 million or 1.5% over the prior year. These changes are discussed in more detail below.
Governmental Activities:
Governmental activities contributed $9.7 million or 95.8% of the total change in net position of $10.1 million. The prior year
change in net position was $17.4 million. The primary increase over 2017 is due to the following revenues, and expenses
described below. There was also an increase of $1.8 million due to prior period adjustment for capital assets and state shared
revenue described in note 15 on page 76.
Total revenues for governmental activities decreased by $5.8 million or 6.7% due to capital grants & contributions decrease of
$6.3 million from transportation capital projects receiving less reimbursement from state and federal grants, other revenue
decrease of $1.4 million primarily due to new market tax credits received for PAEC last year, offset by charges for services
increase of $1.3 million comprised of $0.8 million in revenue from transportation impact fees and utility work performed by
the City for local utilities on Transportation capital projects, inspection and plan checking fees of $0.3 million, use passes for
Federal Way Community Center of $0.1 million, contracted police overtime revenue of $0.1 million; and taxes and general
revenue increase of $0.7 million comprised of sales and criminal justice sales tax of $0.8 million, property tax of $0.2 million,
utility tax decrease of $0.7 million, other taxes of $0.3 million (admissions tax).
Total expenses for governmental activities increased by $1.2 million or 1.6%. The net increase is due to increases in the
following expense categories: A $1.5 million increase in "Transportation" is due to $1.5 million increase in asphalt overlay of
streets, and street and traffic maintenance. A $0.7 million increase in "Economic Environment" is due to: $0.6 million in
salaries and wages and professional services related to the operation of the new Performing Arts and Event Center, and $0.1
million in economic development professional services and salaries and wages. A $0.3 million increase in "General
government" is due to an increase in outside legal services of $0.1 million, and $0.2 million in cost of living adjustments,
health insurance and pension cost increases. A $1.1 million decrease in "Security of persons & property" is due to: $0.5
million reduction in pension expense for GASB 68 reporting, $1.0 million current year investment in joint venture for
Valleycomm and SCORE resulting in reduction in expense, offset by cost of living adjustments, health insurance and pension
cost increases, and vacation payouts. A $0.3 million decrease in "Health and human services" is due to: $0.2 million decrease
in Community Development Block Grant expenditures for low income housing acquisition, and $0.1 million decrease in
human services Department of Commerce reimbursed expenditures.
Governmental Activities - Revenues
Oft
othertaxm
24.9%
Sales
�tingarants
trlhutions,
7.5%
a nts and
utiorr.
i%
Governmental Activities - Expenses
I
Page 20
Business -Type Activities:
Business -type activities of the City's Surface Water Management system and Dumas Bay Centre increased the City's net
position by $0.4 million. There was also an addition of $0.2 million for prior period adjustment for capital assets described in
note 15. The primary change compared to 2017 is due to the following revenues and expenses described below.
Total revenues decreased by $0.4 million or 5.7% under 2017, due to a decrease in grant revenue and developer contributions
for Surface Water Management capital projects. Transfers net change of $0.8 million is primarily due to a reduction of
transfers in to Dumas Bay Centre of $0.8 million.
Total expenses decreased by $0.02 million or 0.4% due to a $0.3 million decrease in Dumas Bay Centre depreciation expense
of $0.1 million for assets that are fully depreciated and a $0.2 million decrease in temporary help, materials and supplies, and
services for the operation of the facility rentals, offset by an increase in Surface Water Management maintenance services of
$0.2 million.
Business -Type Activities - Revenues
rants
Ions,
rants &
jtions,
7%
2.3%
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Business -Type Activities - Expenses
Ou nnas bay
Centre. 16.69
As noted earlier, the City of Federal Way uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements.
Governmental funds
The focus of the City of Federal Way's governmental funds is to provide information on near -term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
unrestricted fund balance may serve as a useful measure of a government's net resources available for spending at the end of
the fiscal year.
As of the end of 2018, the City's governmental funds had a combined ending fund balance of $37.9 million which is a decrease
of $0.5 million from the prior year. Approximately 39% or $15.0 million of the fund balance amount is unrestricted General
Fund balance, which is available for spending at the City Council's discretion. Non -spendable fund balance of $0.2M is
comprised of court trust and prepaid insurance/flex plan of $0.2M. Restricted fund balance of $20.7M is comprised of $7.OM
in transportation capital project funding sources including real estate excise tax (BEET), mitigation impact fees, surface water
management fees, and gas tax; $3.OM for future debt service payments; $1.4M in parks capital project funding sources
including BEET, mitigation impact fees, and paths and trails funding; $1.5M LIFT sales tax for downtown redevelopment
infrastructure and parks projects; $1.2M in hotel/motel lodging tax for promotion of tourism; $1.0M in paths & trails parks
levy dedicated for paths & trails projects; $0.7M for special contracts/studies, $0.03M in REET for city facilities capital
projects, $4.6M in REET for future capital projects and debt service payments, $0.4M in Police seizure funds, and $0.03M for
Community Development Block Grant funds. Committed fund balance of $9.8M includes amounts that can be used only for
the specific purposes determined by a formal action of the government's highest level of decision -making authority. The
committed fund balance is detailed by fund under the fund balance classification in Note 1.
The General Fund is the chief operating fund of the City. Revenues and other sources totaling $51.1M and expenditures and
other uses totaling $51AM, resulted in a total fund balance decrease by $0.06 million or 0.4%. Total ending fund balance of
$15.6M, is $3.76M above the budgeted ending fund balance in the fund of $11.8M. Fund balance policy resolution 18-732 set
the General Fund and strategic reserve policy at $12M. The City had a prior period adjustment for state shared revenue of
$1.78M. The remaining $1.98M of $3.76M increase in ending fund balance compared to budget is made up of $1.26 million
Page 21
increase in revenues/other sources and a decrease of $0.72 million in expenditures/other uses. The detail of these
increases/decreases is explained under General Fund budgetary and actual highlights below.
The Street Fund has a total fund balance of $0.6 million which decreased by $0.08 million from 2017 primarily due to
increased cost of street and traffic maintenance.
The Utility Tax Fund was established to account for the 6% utility tax receipts collected by State statute for capital, debt, and
other maintenance & operations as determined by Council and the remaining 1.75% is for Voter Approved enhanced Police
and Community Safety in 2007. Total fund balance of $2.6 million decreased by $0.4 million or 15% from $3.0 million due to
additional need for support of General Fund operations, Performing Arts & Event Center (PAEC) operations, reserve for
strategic economic opportunity, and reserve for future maintenance of City buildings. In addition, there has been an increase in
pay for Police positions paid out of the fund.
The Debt Service Fund has a total fund balance of $3.0 million, a $1.1 million decrease below the $4.1 million 2017 fund
balance, due to payment of PAEC construction interfund loan and servicing its annual debt payments. The City has adequate
funds to service its annual debt payments.
The Performing Arts and Event Center Operations Fund was established to account for receipts and disbursements of the
operation of the new Performing Arts & Event Center facility. The ending fund balance was negative $447,382 due to
operations of the facility costing more than the revenue generated from events. Operations were subsidized by utility tax and
general fund in the amount of $0.6 million in 2018.
The Transportation Fund is used to account for the City's expenditures incurred to improve existing traffic signals, install new
signalization, improve major roadways and arterials involving the design and construction of new sections of streets, the
widening of roadways to provide additional vehicle lanes, and the installation of sidewalks and landscaping. The major source
of revenue for this fund is grants from other agencies and contributions from other funds. Total ending fund balance decreased
by $1.12 million from $10.1 million in 2017 to $8.94 million in 2018 due to spending on large projects such as the Grand
Staircase project, City Center Access Phase I, and Military Road & S 298t' Street Compacted Roundabout.
The Performing Arts & Event Center Fund was used to accumulate the cost for the construction of the arts & event center.
Ending fund balance increased by 0.8 million due to paying for a portion of the interfund loan.
Proprietary funds
The City of Federal Way's proprietary funds provide the same type of information found in the government -wide, but in more
detail. Unrestricted net assets of the Surface Water Management Fund at the end of the year amounted to $4.4 million, and
those for Dumas Bay Centre amounted to $1.4 million. The total changes in net position for both funds were $0.6 million
increase and $0.09 million increase, respectively. Other factors concerning the finances of these two funds have already been
addressed in the discussion of the City of Federal Way's business -type activities.
GENERAL FUND BUDGETARY AND ACTUAL HIGHLIGHTS
The City of Federal Way budgets on a biennial basis with each budget beginning in an odd numbered year. Appropriations for
operating funds are authorized for two years, but must be reviewed and reauthorized by the City Council in the middle of the
biennial period. In 2018, the City made budget adjustments. The following discussion is reflective only of the current year of
the biennium.
The General Fund operating expenditure and other financing use budgets increased by $1.3 million and $0.4 million
respectively between the original adopted budget and the adjusted budget for the 2018 fiscal year. The following is the major
changes for the 2018 budget:
• Added $2.21 million primarily for the purchase of target property land.
• Redistributed $2.21 million in the budget from savings for salaries and wages and contract expenditures to purchase of
target property land.
• Added $0.02 million for outside human service agencies contract expenditures.
• Added $0.68 million in SCORE jail contract expenditures.
• Added $0.20 million in Police contracted overtime expenditures.
• Added $0.16 million in Parks seasonal and full-time wage increases.
• Added $0.09 million in Parks maintenance supplies and services.
Page 22
• Added $0.13 million in Economic Development temporary help and contracted services
• Added $0.40 million for transfer out to street fund to subsidize street maintenance operations.
Budget adjustments to revenues and other sources include: Adjustments to beginning balance of $0.79 million; increase in
criminal justice sales tax of $0.10 million; increase in property tax revenue of $0.24 million; increase in admissions tax revenue
of $0.26 million; increase in Police overtime contracted revenue of $0.25 million; increase in state and local grants of $0.09
million; increase in Parks recreation rental revenue of $0.07 million; increase in utility tax transfer in of $0.30 million; decrease
in sales tax of $0.44 million; and decrease in court revenue of $0.11 million.
The General Fund ending fund balance of $15.59 million is $3.76 million above the projected $11.83 million for 2018 year-
end. A prior period adjustment of $1.78 million for state shared revenue accounts for 47% of this increase.
The $1.98 million increase in ending fund balance compared to budget is made up of $1.26 million increase in revenues/other
sources and a decrease of $0.72 million in expenditures/other uses.
The $1.26 million increase in revenues/other sources is primarily attributed to an increase of $0.62 million in taxes, $0.27
million in licenses and permits, $0.31 million in intergovernmental revenues, $0.39 million in service charges and fees, $0.10
million in interest, and $0.39 million in other revenues, offset by a decrease in court fines and forfeitures of $0.32 million, and
a reduction of utility tax transfers in of $0.51 million.
The $0.72 million unspent expenditures/other uses are primarily attributable to:, $0.72 million in various savings and timing of
payments in General Fund departments such as Economic Development, Community Development, Municipal Court, and the
hiring delay of Police Officers.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City of Federal Way's investment in capital assets for its governmental and business -type activities as of December 31,
2018 amounts to $548.9 million (net of accumulated depreciation). This investment in capital assets includes land, buildings,
improvements, machinery and equipment, infrastructure, park facilities and construction in progress. For more details, please
see Note 8, and prior period adjustment Note 15, pages 59 and 76.
CAPITAL ASSETS AT YEAR-END, NET OF DEPRECIATION
Governmental Business -Type
Activities Activities
Total
2018 2017
Land $
283,651,518 $
11,340,293 $
294,991,811 $
291,492,905
Building and improvements
57,444,975
4,430,367
61,875,342
32,197,664
Machinery and equipment
6,728,315
76,173
6,804,488
6,682,464
Infrastructure
109,260,056
46,514,191
155,774,247
155,633,795
Construction in progress
29,376,231
61,151
29,437,382
56,900,982
Total Capital Assets $
486,461,096 $
62,422,174 $
548,883,270 $
542,907,810
Major capital asset events during the current fiscal year included the following amounts: Construction in progress added
for expanding and improving the city streets, traffic corridors, and surface water management totaled $8.7 million and
Performing Arts and Event Center and various park improvements for $1.0 million; offset by a $37.2 million reduction
due to the completion of the Performing Arts & Event Center, and street, traffic and surface water management related
projects. Additionally there was land purchased and donated of $3.5 million. Other improvements, and machinery and
equipment decrease of $0.8 million is primarily due to current year depreciation on assets. Remaining commitments for
capital assets is described in Note 8.
Long-term debt
At the end of 2018, the City of Federal Way had total debt principal balance outstanding of $31.6 million. The future principal
and interest payments which are backed by the full faith and credit of the government will be $41.6 million, and average annual
debt service of $1.4 million (See Note 11 pages 69 thru 72). The remainder of the City's debt represents Public Works Trust
Fund Loans.
Page 23
LONGTERM DEBT (FUTURE PRINCIPAL AND INTEREST PAYMENTS)
Governmental Business -Type
Activities Activities Total
General obligation bonds $ 41,491,930 $ - $ 41,491,930
Public works trust fund loan - 97,081 97,081
Total $ 41,491,930 $ 97,081 $ 41,589,011
The City's total debt decreased by $1.2 million due to net of annual debt service payments of the 2013 Refunded Community
Center Bond, 2016 Section 108 loan, 2009 SCORE bond, and Public Works Trust Fund Loan.
In February 2017, Moody's Investors Service upgraded from Aa3 to Aa2 rating for the City's 2013 Limited Tax General
Obligation Refunding Bonds.
Washington State statutes limit the amount of debt a government entity may issue to 7.5% of its total assessed valuation,
subject to 60% majority vote of qualified electors. Of the 7.5% limit, 2.5% is for general purposes, 2.5% for open space/park
facilities, and 2.5% for utilities. Non -voted general purpose indebtedness is limited to 1.5% of assessed valuation and the
combination of voted and non -voted general purpose indebtedness cannot exceed 2.5% of assessed valuation.
The City's taxable assessed valuation for 2018 was $11.316 billion and the total amount of debt the City may issue is $819.5
million. Remaining legal debt capacities as of December 31, 2018 are:
General government (no vote required)
General government (3/5 majority vote required)
Parks and open space (3/5 majority vote required)
Utilities (3/5 majority vote required)
Total Capacity
$140,578,148 (1.5% X 11.316) +$2.3M - $31.5M
$113,160,811 (1.0%X 11.316)
$282,902,026 (2.5% X 11.316)
$282,902,026 (2.5%X11.316)
$819,543,011 (See page 132)
Additional information on the City of Federal Way's long-term debt can be found in Note 11 on pages 69 thru 72 and in the
Statistical Section of this report.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Federal Way's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to Finance Department, City of Federal Way, 33325 8`1' Avenue South,
Federal Way, Washington 98003, telephone 253-835-2527, or visit the City's website at www.cityoffederalwao.
Page 24
,41k
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page 25
BASIC FINANCIAL STATEMENTS
Page 26
Government -Wide Financial Statements
Statement of Position
This statement provides information on all city assets and deferred outflows of resources and liabilities and deferred inflows
of resources, with the difference between the two reported as net position.
Statement of Activities
This statement is focused on both the gross and net costs of various functions, including both governmental and business -type
activities, which are supported by the City's general tax and other revenues.
Page 27
STATEMENT OF NET POSITION
December 31, 2018
ASSETS
Cash & cash equivalents
Investments
Receivables (net)
Due from other governments
Prepaid items
Restricted assets:
Seizure funds/covert funds/municipal trust/retainage
Investment in joint venture
Capital assets not being depreciated:
Land
Construction in progress
Capital assets net of accumulated depreciation:
Buildings/structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Net Pension Asset
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS
LIABILITIES
Accounts payable and accruals
Unearned revenue
Retainage payable
Customer deposits
Noncurrent Liabilities:
Due within one year
Due in more than one year
Net Pension Liability
Other Long -Term Liabilities
Total Liabilities
DEFERRED INFLOW OF RESOURCES RELATED
TO PENSIONS
NET POSITION
Net investment in capital assets
Restricted for:
Debt service
Capital projects
Steel Lake & North Lake Mgmt District
Other
Unrestricted
Total Net Position
Governmental
Business -type
Activities
Activities
Total
$ 44,888,981
$ 6,418,468
$ 51,307,449
8,515,503
1,178,974
9,694,477
2,845,850
221,220
3,067,070
7,426,003
29,178
7,455,181
43,489
-
43,489
1,875,296
-
1,875,296
21,281,560
-
21,281,560
283,651,518
11,340,293
294,991,811
29,376,231
61,151
29,437,382
50,019,417
833,300
50,852,716
7,425,558
3,597,067
11,022,625
6,728,315
76,173
6,804,488
109,260,056
46,514,191
155,774,247
8,073,284
-
8,073,284
581,411,062
70,270,014
651,681,076
2,467,799
168,933
2,636,732
5,111,828
319,149
5,430,977
225,948
473,160
699,108
1,381,156
29,296
1,410,452
1,419,229
8,900
1,428,129
1,437,644
104,162
1,541,806
39,062,016
1,013,684
40,075,700
6,767,594
911,562
7,679,156
32,294,422
102,122
32,396,544
48,637,821
1,948,351
50,586,172
5,508,557
344,891
467,610,817 62,326,054
2,956,848 -
14,460,267 -
- 39,867
3,499,088 -
41,205,463 5,779,784
$ 529,732,483 $ 68,145,705
5,853,448
529,936,871
2,956,848
14,460,267
39,867
3,499,088
46,985,247
$ 597,878,188
The notes to the financial statements are an integral part of this statement.
STATEMENT OF ACTIVITIES
For the Year ended December 31, 2018
Program Revenues
Net (Expense) Revenue & Changes in Net Position
Operating
Capital
Charges for Grants and
Grants and
Governmental
Business -type
Expenses
Services Contributions
Contributions
Activities
Activities
Total
Functions/Programs
Governmental Activities:
General government
$ 4,457,083
$ 3,429,034 $ 2,129,151
$ -
$ 1,101,102
$
$ 1,101,102
Security ofpersons & property
35,513,749
5,897,781 1,057,751
-
(28,558,217)
(28,558,217)
Transportation
15,227,484
3,322,357 1,918,225
6,960,223
(3,026,680)
(3,026,680)
Physical environment
487,104
319,480 123,675
-
(43,949)
(43,949)
Economic environment
4,739,077
2,806,982 -
1,589,370
(342,725)
(342,725)
Health
1,432,259
- 778,535
-
(653,724)
(653,724)
Culture & recreation
9,280,828
2,669,174 92,496
(6,519,158)
(6,519,158)
Interest on long-term debt
542,802
- -
(542,802)
(542,802)
Total governmental activities
71,680,386
18,444,808 6,099,833
8,549,593
(38,586,152)
-
(38,586,152)
Business -type Activities:
Surface Water Management
4,620,161
4,173,577 48,504
622,735
224,655
224,655
Dumas Bay Centre
921,839
862,014 -
-
(59,825)
(59,825)
Total business -type activities
5,542,000
5,035,591 48,504
622,735
164,830
164,830
Total
$ 77,222,386
$ 23,480,399 $ 6,148,337
$ 9,172,328
(38,586,152)
164,830
(38,421,322)
General revenues:
Property tax
10,937,481
10,937,481
Sales tax
14,731,318
14,731,318
Local criminal justice sales tax
2,934,354
2,934,354
Utility tax
11,719,589
11,719,589
Real estate excise tax
4,240,825
4,240,825
Gambling tax
229,524
229,524
Hotel/motel tax
291,671
291,671
Admissions Tax
867,169
867,169
Leasehold excise tax
4,618
4,618
Other revenue
1,459,062
1,459,062
Investment earnings
946,071
132,692
1,078,763
Transfers
(123,502)
123,502
-
Total general revenues and transfers
48,238,180
256,194
48,494,374
Change in net position
9,652,028
421,024
10,073,052
Net position at beginning of year
518,297,127
67,498,054
585,795,181
Prior period adjustment (See Note
15)
1,783,328
226,627
2,009,955
Adjusted beginning net position
520,080,455
67,724,681
587,805,136
Net position at end of year
$ 529,732,483
$68,145,705
$ 597,878,188
The notes to the financial statements are an integral part of this statement.
Page 29
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2018
Debt
General
Street
Utility Tax
Service
ASSETS
Cash and Cash Equivalents
$ 8,813,551
$ 1,155,680
$ 1,315,739
$ 2,335,532
Investments
3,819,806
198,140
280,502
621,316
Prepaid insurance/debt service
38,489
-
-
-
Receivables (net):
Taxes
288,117
-
1,127,504
Accounts and contracts
383,361
82,756
-
Restricted cash
580,667
-
-
Due from other governments
4,103,875
172,699
-
-
Interfund loans receivable
724,818
-
-
-
TOTAL ASSETS
18,752,684
1,609,275
2,723,745
2,956,848
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
971,703
384,706
2,725
-
Accounts/payroll payable
1,153,605
98,706
118,449
-
Retainage payable
-
-
-
-
Deposits payable
827,555
449,275
-
Interfund loans payable
-
-
Unearned revenue
24,637
73,893
-
TOTAL LIABILITIES
2,977,500
1,006,580
121,174
-
DEFERRED INFLOWS OF RESOURCES
FOR UNAVAILABLE PROPERTY TAXES
182,435
-
-
-
Fund Balance:
Nonspendable
229,870
-
-
-
Restricted
389,286
-
-
2,956,848
Committed
19,350
602,695
2,602,571
-
Unassigned
14,954,243
-
-
-
TOTAL FUND BALANCES
15,592,749
602,695
2,602,571
2,956,848
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 18,752,684 $ 1,609,275 $ 2,723,745 $ 2,956,848
The notes to the financial statements are an integral part of this statement.
Page 30
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2018
Performing Arts
& Event Center
Performing Arts
Nonmajor
Operations
Transportation
& Event Ctr
Governmental
Total
ASSETS
Cash and Cash Equivalents
$ 236,424
$ 5,998,183
$ 853,629
$ 12,688,557 $
33,397,295
Investments
-
1,324,670
-
2,271,069
8,515,503
Prepaid insurance/debt service
-
-
38,489
Receivables (net):
-
Taxes
-
-
729,777
2,145,398
Accounts and contracts
99,689
73,855
-
60,791
700,452
Restricted Cash
-
195,917
1,098,712
-
1,875,296
Due from other governments
2,203,463
-
699,111
7,179,148
Interfund loans receivable
-
-
-
-
724,818
TOTAL ASSETS
336,113
9,796,088
1,952,341
16,449,304
54,576,398
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
160,604
652,793
68,810
847,123
3,088,463
Accounts/payroll payable
4,402
10,698
-
184,113
1,569,973
Retainage payable
-
196,813
1,113,618
70,725
1,381,156
Deposits payable
112,689
-
-
29,710
1,419,229
Interfund loans payable
500,000
-
8,121,469
224,818
8,846,287
Unearned revenue
5,800
-
-
121,618
225,948
TOTAL LIABILITIES
783,495
860,304
9,303,897
1,478,107
16,531,057
DEFERRED INFLOWS OF RESOURCES
FOR UNAVAILABLE PROPERTY TAXES
-
-
-
-
182,435
Fund Balance:
Nonspendable
-
-
229,870
Restricted
7,016,571
10,323,628
20,686,333
Committed
1,919,213
4,647,569
9,791,398
Unassigned
(447,382)
-
(7,351,556)
-
7,155,305
TOTAL FUND BALANCES
(447,382)
8,935,784
(7,351,556)
14,971,197
37,862,906
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 336,113 $ 9,796,088 $ 1,952,341 $ 16,449,304
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not
reported in the funds. See Note 8, difference is the Internal Service fund amount of $11.41M on page 38 475,055,015
Investment in joint venture is not a financial resource and, therefore, not reported in the funds. See Note 14 $21.28M. 21,281,560
Other long-term and non -current assets are not available to pay for current -period expenditures and, therefore,
are not reported in the funds: includes deferred inflows, and net pension asset. See Note 6 $182K & Note 9 $8.07M (page 61) 8,255,719
Internal service funds are used to charge the costs of insurance, unemployment, information systems, mail and duplication,
fleet, and building to individual funds. The assets and liabilities of the internal service funds are included in governmental
activities in the statement of net position. Page 38 Internal Svc Net Position $30.34M - Adj $61.9K + $58.OK LT Comp Abs
+ $398AK Net Pension Liability (NPL) + $150.7K Def Infl Rel to Pensions - $72AK Def Outfl Rel to Pensions 30,817,702
Long-term liabilities, including bonds payable, pension liability, and inflows/outflows related to pensions are not due and
payable in the current period and, therefore, are not reported in the funds. See Note 11-$31.5M -$2.OM - $0.24M,
In Govt Wide - $6.77M NPL - $5.51M Def Infl Rel to Pensions + $2.47M Def Outfl Rel to Pensions (43,540,418)
Net position of governmental activities $ 529,732,483
The notes to the financial statements are an integral part of this statement.
Page 31
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2018
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
Debt
General Street Utility Tax Service
$ 29,566,642
$ -
4,370,952
244,556
2,364,813
1,367,606
4,181,465
368,158
785,588
-
305,628
11,044
828,948
40,687
42,404,036 2,032,051
$ 11,719,589 $ -
48,134 61,643
11,767,723 61,643
4,674,607 - - -
33,181,145 197,605 2,727,611 -
979,721 3,902,742 -
2,921,233 - 90,001
884,748 - -
4,705,313 - 115,147
- - - 500,000
- - - 524,490
2,213,551 127,677 - -
49,560,318 4,228,024 2,932,759 1,024,490
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (7,156,282) (2,195,973) 8,834,964 (962,847)
OTHER FINANCING SOURCES (USES)
Transfers in
8,734,621
2,117,563
-
813,473
Transfers out
(1,515,366)
-
(9,216,861)
(1,000,000)
TOTAL OTHER FINANCING
SOURCES (USES)
7,219,255
2,117,563
(9,216,861)
(186,527)
NET CHANGE IN FUND BALANCES
62,973
(78,410)
(381,897)
(1,149,374)
FUND BALANCES - BEGINNING
13,746,391
588,269
2,984,468
4,106,222
Prior Period Adjustment
1,783,385
92,836
-
-
ADJUSTED FUND BALANCES -
BEGINNING
15,529,776
681,105
2,984,468
4,106,222
FUND BALANCES - ENDING
$ 15,592,749
$ 602,695
$ 2,602,571
$ 2,956,848
The notes to the financial statements are an integral part of this statement.
Page 32
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2018
Performing Arts
& Event Center
Performing Arts
Nonmajor
Operations
Transportation
& Event Ctr
Governmental
Total
$ -
$ -
$ -
$ 4,724,558
$ 46,010,789
-
-
-
-
4,615,508
-
4,845,744
80,440
2,522,991
11,181,594
211,588
2,693,210
-
2,125,852
9,580,273
-
-
-
3,463,439
4,249,027
45,611
84,907
-
204,577
761,544
296,330
-
-
293,096
1,459,061
553,529
7,623,861
80,440
13,334,513
77,857,796
- - - 5,393
4,680,000
- - - 1,926,854
38,033,215
- 3,316,923 - 1,792,023
9,991,409
- - - 486,418
486,418
1,627,169 - 163,964 90,665
4,893,032
- - - 554,774
1,439,522
- - 2,376,964
7,197,424
- - - 159,000
659,000
981 - - 67,091
592,562
- 8,081,612 143,081 1,241,576
11,807,497
1,628,150 11,398,535 307,045 8,700,758
79,780,079
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,074,621) (3,774,674) (226,605) 4,633,755 (1,922,283)
OTHER FINANCING SOURCES (USES)
Transfers in
626,762
3,060,277
1,000,000
1,892,474
18,245,170
Transfers out
-
(402,656)
-
(6,733,789)
(18,868,672)
TOTAL OTHER FINANCING
SOURCES (USES)
626,762
2,657,621
1,000,000
(4,841,315)
(623,502)
NET CHANGE IN FUND BALANCES
(447,859)
(1,117,053)
773,395
(207,560)
(2,545,785)
FUND BALANCES - BEGINNING
477
10,025,118
(8,124,951)
15,065,790
38,391,784
Prior Period Adjustment
-
27,719
-
112,967
2,016,907
ADJUSTED FUND BALANCES -
BEGINNING
477
10,052,837
(8,124,951)
15,178,757
40,408,691
FUND BALANCES - ENDING
$ (447,382)
$ 8,935,784
$ (7,351,556)
$ 14,971,197
$ 37,862,906
The notes to the financial statements are an integral part of this statement.
Page 33
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2018
Amounts reported for governmental activities in the statement of activities (page 28) are 2018
different because:
Net change in fund balances --total governmental funds (page 32) $ (2,545,785)
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which 7,683,233
capital outlays exceeded depreciation in the current period. (page 53)
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. (page 53) (54,240)
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however,
has any effect on net position. Also, governmental funds report the issuance
proceeds of new debt as current financial resources and payment as the use
of current resources, whereas these amounts reduce the net position. (page 53) 1,124,560
Internal service funds are used by management to charge costs of risk management,
information systems, mail & duplication, fleet, and building systems to the funds.
(page 39) $1.04M - $2.6K 1,033,197
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in the funds.
Includes adjustment for GASB 68 pension reporting. (page 53) $2.40M + $11K 2,411,063
Change in net position of governmental activities (page 28) $ 9,652,028
The notes to the financial statements are an integral part of this statement.
Page 34
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Economic environment
Health
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 28,874,131
$ 28,943,205
$ 29,566,642
$ 623,437
4,099,910
4,099,900
4,370,952
271,052
1,874,500
2,056,500
2,364,813
308,313
3,669,457
3,795,112
4,181,465
386,353
1,163,500
1,103,500
785,588
(317,912)
143,800
202,700
305,628
102,928
357,900
440,900
828,948
388,048
40,183,198 40,641,817 42,404,036 1,762,219
5,386,026
5,020,122
4,674,607
345,515
34,309,880
33,422,652
33,181,145
241,507
1,038,049
1,038,049
979,721
58,328
2,895,248
3,021,718
2,921,233
100,485
910,802
925,802
884,748
41,054
4,392,234
4,637,734
4,705,313
(67,579)
-
2,213,551
2,213,551
-
48,932,239 50,279,628 49,560,318 719,310
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (8,749,041) (9,637,811) (7,156,282) 2,481,529
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
Prior Period Adjustment
ADJUSTED FUND BALANCES -
BEGINNING
8,940,778 9,240,778 8,734,621 (506,157)
(1,121,511) (1,515,366) (1,515,366) -
7,819,267 7,725,412 7,219,255 (506,157)
(929,774) (1,912,399) 62,973 1,975,372
12,952,047 13,746,393 13,746,391 (2)
- - 1,783,385 1,783,385
12,952,047 13,746,3 93 15, 529,776 1,783,3 83
FUND BALANCES - ENDING $ 12,022,273 $ 11,833,994 $ 15,592,749 $ 3,758,755
The notes to the financial statements are an integral part of this statement.
Page 35
STREET FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Licenses and permits
$ 115,000
$ 195,000
$ 244,556
$ 49,556
Intergovernmental
1,259,507
1,259,505
1,367,606
108,101
Service charges and fees
257,728
435,233
368,158
(67,075)
Interest
2,000
2,000
11,044
9,044
Other
34,000
209,000
40,687
(168,313)
TOTAL REVENUES
1,668,235
2,100,738
2,032,051
(68,687)
EXPENDITURES
Current:
Security of persons and property
199,031
199,031
197,605
1,426
Transportation
4,056,476
4,521,519
3,902,742
618,777
Capital outlay
-
-
127,677
(127,677)
TOTAL EXPENDITURES
4,255,507
4,720,550
4,228,024
492,526
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (2,587,272) (2,619,812) (2,195,973) 423,839
OTHER FINANCING SOURCES (USES)
Transfers in 2,531,544 2,531,544 2,117,563 (413,981)
Transfers out - - - -
TOTAL OTHER FINANCING
SOURCES (USES) 2,531,544 2,531,544 2,117,563 (413,981)
NET CHANGE IN FUND BALANCES (55,728) (88,268) (78,410) 9,858
FUND BALANCES - BEGINNING 555,728 588,269 588,269 -
Prior Period Adjustment - - 92,836 92,836
ADJUSTED FUND BALANCES -
BEGINNING 555,728 588,269 681,105 92,836
FUND BALANCES - ENDING $ 500,000 $ 500,001 $ 602,695 $ 102,694
The notes to the financial statements are an integral part of this statement.
Page 36
UTILITY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 11,571,925 $ 11,977,891
$ 11,719,589
$ (258,302)
Interest
6,000 6,000
48,134
42,134
TOTAL REVENUES
11,577,925 11,983,891
11,767,723
(216,168)
EXPENDITURES
Current:
Security of persons and property
2,872,703
2,872,703
2,727,611
145,092
Economic environment
100,652
100,652
90,001
10,651
Culture and recreation
101,583
101,583
115,147
(13,564)
TOTAL EXPENDITURES
3,074,938
3,074,938
2,932,759
142,179
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
8,502,987
8,908,953
8,834,964
(73,989)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
415,938 415,938 - (415,938)
(8,918,924) (9,809,359) (9,216,861) 592,498
(8,502,986) (9,393,421) (9,216,861) 176,560
(484,468) (381,897) 102,571
2,500,001 2,984,468 2,984,468 -
S 2,500,002 S 2,500,000 S 2,602,571 S 102,571
The notes to the financial statements are an integral part of this statement.
Page 37
PERFORMING ARTS & EVENT CENTER OPERATIONS FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
REVENUES
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Economic environment
Debt service:
Interest/fiscal charges/admin fees
TOTAL EXPENDITURES
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
$ 659,567
$ 578,362
$ 211,588
$ (366,774)
-
45,605
45,611
6
413,650
620,780
296,330
(324,450)
1,073,217
1,244,747
553,529
(691,218)
986,820 1,871,986 1,627,169 244,817
- - 981 (981)
986,820 1,871,986 1,628,150 243,836
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 86,397 (627,239) (1,074,621) (447,382)
OTHER FINANCING SOURCES (USES)
Transfers in
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
181,317 626,762 626,762 -
181,317 626,762 626,762 -
267,714 (477) (447,859) (447,382)
- 477 477 -
FUND BALANCES - ENDING $ 267,714 $ - $ (447,382) $ (447,382)
The notes to the financial statements are an integral part of this statement.
ASSETS
Current Assets
Cash and Cash Equivalents
Investements
Prepaid items
Receivables (net):
Accounts and contracts
Due from other governments
Interfund loans receivable
TOTAL CURRENT ASSETS
Property, plant and equipment
Land
Building/structures
Improvements other than buildings
Machinery/furniture/equipment
Infrastructure
Construction in progress
Less accumulated depreciation
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2018
Business -type Activities - Enterprise Funds
Surface Water Dumas Bay
Management Centre TOTAL
Governmental
Service
$ 4,699,654
$ 1,656,956
$ 6,356,610
$ 11,553,544
904,074
274,900
1,178,974
$ -
-
-
-
5,000
155,599
65,621
221,220
-
29,178
-
29,178
246,855
-
-
-
8,121,469
5,788,505
1,997,477
7,785,982
19,926,868
9,230,653
2,109,640
11,340,293
-
832,086
3,673,262
4,505,348
16,545,121
3,602,033
314,901
3,916,934
-
52,946
145,848
198,794
18,546,186
62,819,346
-
62,819,346
-
61,151
61,151
-
(16,718,255)
(3,701,437)
(20,419,692)
(23,685,224)
59,879,960
2,542,214
62,422,174
11,406,083
65,668,465
4,539,691
70,208,156
31,332,951
DEFERRED OUTFLOWS RELATED TO
PENSIONS 140,847 28,086 168,933 72,359
LIABILITIES AND FUND EQUITY
Current Liabilities:
Vouchers/payroll payable
Unearned revenue
Retainage payable
Deposits payable
Public Works trust fund loan payable
Compensated absences payable
TOTAL CURRENT LIABILITIES
Long-term liabilities:
Compensated absences payable
Net Pension Liability
TOTAL LONG-TERM LIABILITIES
TOTAL LIABILITIES
DEFERRED INFLOWS RELATED TO
PENSIONS
268,566
50,583
319,149
453,391
147,015
326,146
473,161
-
24,684
4,612
29,296
200
8,700
8,900
96,120
-
96,120
6,455
1,587
8,042
-
543,040
391,628
934,668
453,391
81,967
20,155
102,122
57,991
756,076
155,486
911,562
398,424
838,043
175,641
1,013,684
456,415
1,381,083
567,269
1,948,352
909,806
286,062
58,829
344,891
150,744
Net investment in capital assets 59,783,840 2,542,214 62,326,054 11,406,083
Restricted for:
Steel Lake & North Lake Mgmt District 39,867 - 39,867 -
Unrestricted 4,318,460 1,399,465 5,717,925 18,938,677
TOTAL NET POSITIOIS $ 64,142,167 $ 3,941,679 68,083,846 $ 30,344,760
Adjustment to reflect the consolidation of internal service fund activities related to
enterprise funds 61,858
NET POSITION OF BUSINESS -TYPE ACTIVITIE! $ 68,145,704
The notes to the financial statements are an integral part of this statement.
Page 39
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For Year Ended December 31, 2018
OPERATING REVENUES:
Service charges and fees
Intergovernmental
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personnel services
Materials and supplies
Services and charges
Intergovernmental
Depreciation
Interfund charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
Interest income
Interest expense
Business -type Activities - Enterprise Funds
Surface Water Dumas Bay
Management Centre TOTAL
Governmental
n ,.. +i-
rmernat
Service
$ 4,172,341 $ 862,014 $ 5,034,355 $ 10,787,464
48,504 - 48,504 235,471
1,236 - 1,236 149,426
4,222,081 862,014 5,084,095 11,172,361
1,926,814
440,669
2,367,483
995,242
132,216
189,355
321,571
760,595
712,326
228,975
941,301
7,333,522
329,042
895
329,937
137,398
688,156
16,769
704,925
2,118,960
815,085
44,213
859,298
-
4,603,639
920,876
5,524,515
11,345,717
(381,558)
(58,862)
(440,420)
(173,356)
-
-
-
15,396
90,113
24,379
114,492
202,726
(1,922)
-
(1,922)
-
TOTAL NON -OPERATING REVENUES (EXPENSES) 88,191 24,379 112,570 218,122
INCOME (LOSS) BEFORE TRANSFERS (293,367) (34,483) (327,850) 44,766
Capital contributions
Transfers in
CHANGE IN NET POSITION
622,735 - 622,735 491,067
- 123,502 123,502 500,000
329,368 89,019 418,387 1,035,833
NET POSITION - BEGINNING 63,586,172 3,852,660 67,438,832 29,308,927
Prior period adjustment 226,627 - 226,627 -
ADJUSTED NET POSITION - BEGINNING 63,812,799 3,852,660 67,665,459 29,308,927
NET POSITION - ENDING $ 64,142,167 $ 3,941,679 $ 68,083,846 $ 30,344,760
CHANGE IN NET POSITION 418,387
Adjustment to reflect the consolidation of internal service fund activities related to enterprise 2,636
CHANGES IN NET POSITION OF BUSINESS -TYPE ACTIVITIES $ 421,023
The notes to the financial statements are an integral part of this statement.
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For Year Ended December 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - outside
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other funds for goods and services
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Principal paid on debt service
Interest paid on debt service
Acquisition of capital asset/construction work in progress
Cash received from grants
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
hncreases/(decrease)in depreciation expense
(hncreases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
(hncreases)/decrease in deferred outflows related to pensions
Increases/(decrease) in vouchers/accounts payable
Increases/(decrease)in retainage payable
Increases/(decrease)in deposits payable
Increases/(decrease)in deferred revenue
Increases/(decrease) in accrued payroll/compensated absences payable
hncreases/(decrease) in net pension liability
hncreases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assets
Governmental
Business -type Activities - Enterprise Funds
Activities
Surface Water
Dumas Bay
Internal
Management
Centre
TOTAL
Service
$ 4,176,477
$ 909,072
$ 5,085,548
$
10,787,464
-
-
-
(571,554)
(869,255)
(432,017)
(1,301,273)
(6,900,886)
(2,187,726)
(464,971)
(2,652,697)
(1,093,812)
(815,090)
(44,213)
(859,303)
(329,042)
(895)
(329,937)
(639,113)
73,649
-
73,649
399,537
49,013
(33,025)
15,988
1,981,637
-
123.501
123.501
500.000
(96,120)
(96,120)
(1,922)
(1,922)
(619,624)
(619,624)
(3,945,055)
207,327
207,327
-
-
-
15,396
(510,339)
-
(510,339)
(3,929,659)
90,113
24,378
114,491
202,726
90,113
24,378
114,491
202,726
(371,213)
114,854
(256,359)
(1,245,296)
5,974,941
1,817,002
7,791,943
12,798,841
5,603,728
1,931,856
7,535,584
11,553,544
(381,558)
(58,862)
(440,420)
(173,356)
688,151
16,769
704,920
2,118,960
(5,702)
(52,407)
(58,109)
250,114
23,906
-
23,906
(246,855)
51,049
6,918
57,967
20,904
(12,690)
(12,766)
(25,456)
131,343
(12,021)
-
(12,021)
-
-
(920)
(920)
9,841
99,464
109,305
4,293
5,033
9,326
(1,036)
(410,601)
(59,718)
(470,319)
(174,962)
94,345
23,464
117,809
56,524
430,572
25,837
456,408
2,154,993
$ 49,014 $
(33,025) $
15,988
$ 1,981,637
$ 415,408
$ 491,067
The notes to the financial statements are an integral part of this statement.
Page 41
STATEMENT OF FIDUCIARY NET POSITION
PRIVATE -PURPOSE TRUST FUND
December 31, 2018
ASSETS
Cash and Cash Equivalents
Receivables (net):
Accounts and contracts
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
TOTAL LIABILITIES
NET POSITION
Reserved for Specific Program Use
TOTAL NET POSITION
Auto Theft
Task Force
Fund
$ 83,367
543,794
627,161
627,161
627,161
The notes to the financial statements are an integral part of this statement.
Page 42
STATEMENT OF CHANGES
IN FIDUCIARY NET POSITION
PRIVATE -PURPOSE TRUST FUND
For Year Ended December 31, 2018
Auto Theft
Task Force
Fund
ADDITIONS:
Intergovernmental $ 1,791,475
TOTAL ADDITIONS 1,791,475
DEDUCTIONS:
Current:
Security of persons & property 1,791,475
TOTAL DEDUCTIONS 1,791,475
CHANGE IN NET POSITION
NET POSITION - BEGINNING NET POSITION - ENDING $ -
The notes to the financial statements are an integral part of this statement.
Page 43
NOTES TO THE BASIC FINANCIAL STATEMENTS
December 31, 2018
Ieel 1]WI
Note
Page
1
Summary of Significant Accounting Policies...............................................................................
44
ReportingEntity...................................................................................................................
44
Basis of Presentation - Government -wide and Fund Financial Statements ..........................
44
Measurement Focus, Basis of Accounting...........................................................................
46
BudgetaryInformation.........................................................................................................
47
Assets, Liabilities, Fund Balance and Net Position..............................................................
49
Cash and Investments..................................................................................................
49
Receivables..................................................................................................................
49
Amounts Due to and from Other Funds; Interfund Loans ...........................................
49
Inventories and prepaids..............................................................................................
49
CapitalAssets..............................................................................................................
50
Deferred Inflow of Resources......................................................................................
50
Compensated Absences Payable..................................................................................
50
Pensions.......................................................................................................................
51
Unearned Revenues.....................................................................................................
51
Long -Term Liabilities..................................................................................................
51
Fund Balance Classification........................................................................................
51
InterfundTransactions.................................................................................................
53
2
Reconciliation of Government -wide & Fund Financial Statements .............................................
53
3
Stewardship, Compliance and Accountability..............................................................................
54
4
Supplemental Appropriations.......................................................................................................
54
5
Deposits and Investments.............................................................................................................
54
6
Property Taxes..............................................................................................................................
57
7
Unearned Revenues and Receivables...........................................................................................
58
8
Capital Assets...............................................................................................................................
59
9
Pension Plans................................................................................................................................
61
10
Risk Management.........................................................................................................................
68
11
Long -Term Liabilities...................................................................................................................
69
12
Interfund Transactions..................................................................................................................
72
13
Contractual Obligations, Contingencies, and Litigation...............................................................
73
14
Joint Ventures...............................................................................................................................
73
15
Prior Period Adjustments...................................................................................................
76
16
Leases................................................................................................................
77
17
Self-Insurance...............................................................................................................................
78
18
Accounting and Reporting Changes.............................................................................................
78
19
Subsequent Event..........................................................................................................................
78
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended December 31, 2018
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Federal Way have been prepared in conformity with generally accepted accounting
principles (GAAP) 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. The significant accounting
policies are described below.
REPORTING ENTITY
The City of Federal Way was incorporated on February 28, 1990. Federal Way is a non -charter code city, operating under
Section 35A.03 of the Revised Code of Washington. It has a Mayor/Council form of government. The Council is composed of
seven councilmembers elected to four-year terms on a non -partisan ballot and are elected at -large. Members of the City
Council are responsible for establishing the general direction and policies for the City and for providing the resources
necessary to carry out those policies. As the City's chief administrator, the City Mayor is responsible for carrying out the
policy and direction set by the City Council. This includes the enforcement of laws and ordinances, the execution of contracts
and agreements, and maintenance of peace and order in the City. The City of Federal Way provides a full range of municipal
services, including policing, planning and zoning, street maintenance and construction, parks and recreation, and general
administrative services. The City operates enterprise funds for Storm Water Management and Dumas Bay Centre.
The City's Comprehensive Annual Financial Report (CAFR) includes the funds, agencies and boards controlled by or
dependent on the City. In conformance with Governmental Accounting Standards Board (GASB) Statement 14, "The
Financial Reporting Entity", the primary basis of determining whether outside agencies and organizations should be
considered component units of the City is Financial Accountability. Financial Accountability is dependent on the City's
obligation to redeem the organization's debts, to finance the organization's deficits, and the extent to which subsidies from the
City constitute a major portion of the organization's total resources. Applying these criteria, as outlined in GASB Statement
14, the City has no relationships that qualify as component units.
Financial Accountability
Financial accountability is defined as appointment of a voting majority of an agency's or organization's board, and either the
City's ability to impose its will on the agency or organization or the possibility that the agency or organization will provide a
financial benefit to or impose a financial burden on the City.
Joint Ventures
A joint venture is a legal entity or organization which results from a contractual arrangement that is owned, operated, or
governed by two or more participants as a separate activity subject to joint control, in which participants retain an ongoing
financial interest or an ongoing financial responsibility. The City participates in two joint ventures: Valley Communications
Center and South Correctional Entity (SCORE). See Note 14, Joint Ventures, which more fully describe these organizations.
I117..yk1Ye]a9kg0WYl/:rY[IJeQKe]•/D19001oleo 1F.11R IA10W.1117a11e17y1er:\ecolElI&II/.%0040iWoV
The government -wide financial statements (i.e. the statement of net position and the statement of activities) report information
on all non -fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed
from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business -type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Our policy is to
allocate indirect costs to specific functions or segments. Program revenues include 1) charges to customers or applicants who
purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements, or a particular function or segment. Taxes
and other items not properly included among program revenues are reported instead as general revenues.
As a general rule the effect of the interfund activity has been eliminated for the government -wide financial statements.
Interfund services provided and used are not eliminated in the process of consolidation.
Page 45
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial
statements.
The City reports the following major governmental funds:
General Fund — This is the City's general operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
Street Fund — This fund accounts for the receipt and disbursement of State -levied motor vehicle fuel taxes which
must be accounted for in a separate fund and expended for street -oriented engineering, maintenance and operations.
Utility Tax Fund — This fund was established to account for all utility tax receipts. These receipts will subsequently
be distributed to various funds to provide for debt service, capital projects, maintenance and operations expenditures,
etc. as determined by the City Council.
Debt Service Fund — This fund accounts for the accumulation of resources for the payment of general obligation and
assessment bond principal, interest and related costs.
Performing Arts & Event Center Operations Fund — This fund was established to account for receipts and
disbursements related to the operation of the new Performing Arts & Event Center facility.
Transportation CIP Fund — This fund accounts for receipts and disbursements related to acquisition, design,
construction and any other related street project expenditures.
Performing Arts & Event Center Fund — This fund was established to account for receipts and disbursements related
to the construction of the Performing Arts and Event Center (PAEC).
The City reports the following fund groups as non -major funds:
Special Revenue Funds — These funds are to be used to account for the proceeds of revenues and sources (other than
special assessments, expendable trust or major capital projects) that are committed or legally restricted to
expenditures for specified purposes.
Capital Project Funds — These funds account for the acquisition or construction of major capital facilities with the
exception of those facilities financed by the proprietary fund. The major sources of revenues for these funds are
general obligation bond proceeds, grants from other agencies, local taxes, contributions from other funds, utility tax,
and real estate excise tax.
The City reports the following major enterprise funds:
Surface Water Management Fund — This fund was established to administer and account for all receipts and
expenditures related to the City's surface and storm water management system.
Dumas Bay Centre Fund — This fund was established to account for revenues and expenses related to the acquisition,
capital improvements maintenance and operations of the City -owned Dumas Bay Centre and Knutzen Family
Theatre. The Dumas Bay Centre is primarily used for meetings, events, lodging, and catering services.
Additionally, the City reports following internal service funds:
Risk Management Fund — This fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, and worker's compensation claims. Both risk control (to
minimize the losses that strike an organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is also currently recovering costs and building reserves
for general liability including property, casualty, errors and omissions and fidelity coverage.
Information Systems Fund — This fund was established to account for all costs associated with data processing,
telecommunications and the Geographical Information System (GIS). This fund owns and depreciates all non-
proprietary fund assets related to these functions, and charges equipment/software users for both maintenance and
operating costs and equipment replacement charges based on depreciation schedules.
Mail & Duplication Fund — This fund accounts for duplication, graphics and other general support services provided
to departments and funds throughout the City.
Fleet and Equipment Fund — This fund accounts for the cost of maintaining City vehicles and other motorized
equipment. Rates charged to user departments are based on the full cost of maintaining equipment items, including
the recovery of related depreciation expense.
Buildings and Furnishings Fund — This fund accounts for all costs associated with the operation and maintenance of
specified City buildings. City building facilities and furnishings are owned by this Fund. Both maintenance/operating
costs and depreciation recovery are charged to City departments and funds.
Health Insurance Fund — The City is currently self -insuring for medical insurance. The premiums paid by the City
and employees are deposited into this fund. Medical service for medical coverage and pharmaceutical reimbursement
are paid out of this fund. Also, the fund has established reserves for the payment of estimated future claims.
Unemployment Insurance Fund - The City is currently self -insuring State Unemployment Compensation. Related
premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability.
Internal Service Funds account for goods and services provided to other departments or agencies of City of Federal Way, or to
other governments, on a cost -reimbursement basis.
The City reports the following fiduciary fund:
Auto Theft Task Force Fund — This fund is a private -purpose trust fund that acts as an agent on behalf of other
governments. This fund accounts for contributions held in a fiduciary capacity for the Puget Sound Auto Theft Task -
Force.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING
Government -Wide and Governmental Funds
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis
of accounting, similar to the proprietary fund financial statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the City of Federal Way considers revenues to be available if they are collected within 60
days of the end of the current fiscal period. The City considers property tax as available if they are collected within 60 days
after year end. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
Property taxes, licenses, and interest associated within the current period are all considered to be susceptible to accrual and
have been recognized as revenues of the current fiscal period. Only the portion of property tax receivable due within the
current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
Major revenues recorded on the modified accrual basis are:
Property Taxes - King County acts as the City's collection agent for these taxes. Upon receipt, the County electronically
transmits to the City the taxes which it has collected on the City's behalf in the prior day. On this basis, property taxes received
in January are considered both measurable and available and are therefore recognized as revenue in the current year.
Other Locally Levied Taxes - King County also acts as the City's collection agent for the 11/4% and optional 1/4% real estate
excise taxes. Although a time lag occurs in payment of these taxes to the City, since the taxes are actually collected by King
County in December and receipted to the City within 10 days after the end of the year, they are considered to be both
Page 47
measurable and available, and are, therefore, accrued as revenue at year end. The State of Washington acts as the City's
collection agency for the locally levied sales tax. The sales tax is distributed monthly and remitted to the City in the following
month. The Sales Tax remittance in January is considered both measurable and available and is therefore accrued as revenue at
year-end.
Grant Revenues - Under Section G60.109 of the Codification of Governmental Accounting and Financial Reporting
Standards, revenues for cost reimbursement grants are determined to be earned and, therefore, available at the time related
expenditures are incurred. For this reason, grant revenues to be received as reimbursement for expenditures incurred in the
current year are also recognized as revenue in that year.
Shared Revenues - Revenues that have been collected by the State, but not remitted by an intermediary collection agency to
the City, are considered measurable and available.
Other Revenue Sources - Other items recognized as revenue in the current year on the modified accrual basis include
investment interest earned but not received at year end; inter -fund, and intergovernmental service billings related to services
provided in the current year which are outstanding at year end; and any other material revenue amounts determined to be both
measurable and available under current modified accrual accounting practices. Revenues not considered to meet the criteria for
recognition on the modified accrual basis include licenses and permits, fines and forfeitures, and other miscellaneous revenues
which are generally not measurable until received.
Proprietary Funds
The proprietary fund statements are reported using the economic resources measurement focus and full -accrual basis of
accounting. Revenues are recorded when earned and expenses are recorded when liability is incurred regardless of the timing
of the cash flows.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the City are primarily user charges, and the cost of providing goods
or services to the general public on a continuing basis. Operating expenses for enterprise and internal service funds includes
the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as non -operating revenues and expenses.
Other Disclosure
The City was neither the lessor nor lessee in capital leases; has not been the recipient of an endowment; did not engage in
short-term debt activity during the year; has not issued special assessment debt; does not benefit from on -behalf payment; has
not pledged future revenues; has not incurred an obligation for pollution remediation; had no hedging derivatives; is not the
transferor or operator in a service concession arrangement; and does not provide other post -employment benefits (OPEB), and
was not the transferor or continuing government in a merger, transfer of operation, etc.
BUDGETARY INFORMATION
Scope of Budget
Annual appropriated budgets are adopted for the general, some special revenue, and debt service funds on the modified accrual
basis of accounting. For governmental funds, there are no differences between the budgetary basis and generally accepted
accounting principles. Budgets for debts service and capital project funds are adopted at the level of the individual debt issue
or project and for fiscal periods that correspond to the lives of debt issues or projects.
Legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the total appropriation
amount. Any unexpended appropriation balances for annually budgeted funds lapse at the end of the year. Appropriations for
other special purpose funds that are non -operating in nature are adopted on a "project -length" basis and, therefore, are carried
forward from year to year without re -appropriation until authorized amounts are fully expended or the designated purpose of
the fund has been accomplished.
The individual funds within each fund type which are included in the City's biennial operating budget (funds budgeted on an
annual basis) are:
General Fund Special Revenue Funds Debt Service Fund
Capital Project Funds
- Street Fund - Debt Fund
-Downtown Redevelopment
- Arterial Street
-City Facilities
- Utility Tax (including Prop 1)
-Parks
- Solid Waste & Recycling
-Transportation
- Special Contracts /Studies
-Capital Project Reserve
- Hotel/Motel Lodging Tax
-Performing Arts & Event Center
- Federal Way Community Center
-Surface Water Management
- Traffic Safety
-Real Estate Excise Tax
- Community Development Block Grant
-Paths & Trails
-Performing Arts & Event Center
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at
year end do not constitute expenditure or liabilities because the commitments will be re -appropriated and honored during the
subsequent year.
Procedures for Adopting the Biennial Budget
The City's budget process and the time limits under which the budget must be prepared are defined by the Revised Code of
Washington (RCW) 35A.33. The procedures followed in establishing the annual budget are described below:
By late May the official budget call is made by the Finance Director for current level service budgets and a preliminary
financial forecast.
By late June, departments submit their preliminary expenditure estimates and the Finance department updates the
preliminary revenue estimates to define resources available to finance coming year expenditure programs.
By the first Tuesday in September, the Mayor submits a proposed budget to the City Council. This budget is based on
priorities established by the Council and estimates provided by City departments during the preceding months, and
balanced with revenue estimates made by the Finance Director. Copies of the preliminary budget are provided to the City
Council and made available to staff and the public.
City Council conducts workshops and public hearings on the proposed budget between mid -September and mid -October.
No later than the third Monday in November, the City Council must adopt an ordinance to establish the amount of
property taxes to be levied in the coming year.
No later than the first two weeks of November, the City Clerk publishes a notice of the filing of the preliminary budget
and notices of public hearings to be held during preliminary budget deliberations.
Two public hearings on the proposed budget are also held during October and November. Final hearings on the budget
must begin on or before the first Monday of December, and may continue until the 25th day prior to beginning of the next
fiscal year.
By December 31, the City Council makes its adjustments to the proposed budget and adopts a final budget by ordinance.
The final operating budget, as adopted, is published and distributed within the first three months of the following year.
Copies of the adopted budget are made available to the public.
Amending the Budget
The Mayor is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter
the total expenditures of a fund or that affect the number of authorized employee positions, salary ranges, hours, or other
conditions of employment must be approved by the City Council.
When the City Council determines that it is in the best interest of the City to increase or decrease the appropriation for a
particular fund, it may do so by ordinance approved by one or more than the majority after holding public hearing(s).
The budget amounts shown in the financial statements are the final authorized amounts as revised during the year.
The financial statements contain the original and final budget information. The original budget is the first complete
appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental
appropriations, and other legally authorized changes applicable for the fiscal year.
ASSETS, LIABILITIES, FUND BALANCE, NET POSITION
Cash and Cash Equivalents
The City follows the practice of pooling cash and investments of all funds for investment purposes, except for cash held in
escrow, which is disclosed separately on the balance sheet. Each fund's portion of total cash and investments is summarized
by fund type in the combined balance sheet as equity in pooled cash and investments.
It is the City's policy to invest all cash not immediately required for disbursement. At December 31, 2018, the State Treasurer
was holding $41,152,905 in the Local Government Investment Pool. The amount is classified on the balance sheet as cash and
cash equivalents in various funds. The interest on these investments is prorated to the various funds based on the average
monthly balance for each fund.
The amounts reported as cash and cash equivalents also include compensating balances maintained with certain banks in lieu
of payments for services rendered. The average compensating balances maintained during the 2018 were approximately $15
million.
For purposes of the statement of cash flows, the City considers all highly liquid investments with a maturity of three months or
less when purchased, to be cash equivalents. At December 31, 2018, the total cash and cash equivalents were $51,868,586.
In accordance with GASB Statement 79, LGIP investments are measured at amortized cost. See (Note 5 - Deposits and
Investments).
Investments
The City as of December 31, 2018, had $9,694,477 in authorized investments, and was in compliance with the investment
policy of the City. See (Note 5 - Deposits and Investments).
Receivables
Taxes receivable consists of property taxes and related interest and penalties (see Note 6 - Property Tax). Accrued interest
receivable consists of amounts earned on investments, notes, and contracts at the end of the year.
Customer accounts receivable consist of amounts owed from private individuals or organizations for goods and services
including amounts owed for which billing have not been prepared. Notes and contracts receivable consist of amounts owed on
open accounts from private individuals or organizations for goods and services rendered.
Amounts Due to and from Other Funds; Interfund Loans
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as either interfund loans receivable/payable or advances to/from other funds. All other outstanding balances
between funds are reported as due toffrom other funds. Any other outstanding balances between the governmental activities
and business -type activities are reported in the government -wide financial statements as internal balances. A separate
schedule of inter -fund loans receivable and payable is furnished in Note 12, Interfund Transactions.
Inventories and Prepaids
Inventories in the governmental funds are recorded as expendable supplies held for consumption. The cost is recorded as
expenditure at the time individual inventory items are purchased. Amounts remaining at year-end are immaterial and,
therefore, are not reflected on the balance sheets of those funds. There were no material inventories at year-end in the Internal
Service or Enterprise Funds. The City currently uses the consumption method of accounting for prepaids.
Page 50
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure (e.g., roads, bridges, sidewalks, and similar items),
are reported in the applicable governmental or business -type activities columns in the government -wide financial statements.
Capital assets are defined by the City of Federal Way as assets with an initial, individual cost of more than $5,000 and an
estimated useful life in excess of one or more years. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. See Note 8, Capital
Assets.
Cost for additions or improvements to capital assets are capitalized when they increase the effectiveness or efficiency of the
asset.
Cost of normal maintenance and repairs are not capitalized.
Depreciation on all capital assets is recorded as an allocated expense in the government -wide Statement of Activities and in
the proprietary fund statements. Property, plant, and equipment of the primary government are depreciated using the straight
line method over the following estimated useful lives:
Asset Class
Life in Years
Computers.................................................................5-6
Printers & Faxes.............................................................7
Telecorumunications Equipment........................................7
Police Radio Equipment.................................................I
I
Other Office Equipment ..................................
............ 4-10
Office Furniture and Fixtures...........................................10
Recreation Equipment ....................................
,............... 10
Parks Equipment ...........................................
............. 6-10
Police Equipment.......................................................9-11
Shop/Miscellaneous Equipment..................................10-12
Heavy Work Equipment.............................................10-16
Non -Police Vehicles........................................................7
Police Patrol Vehicles...................................................5-7
Police Non -Patrol Vehicles ..............................
.............. 7-10
Heavy Trucks ...............................................
............ 8-10
Land Improvements......................................................20
Buildings.....................................................................20
Infrastructure ...............................................
.......... 15-100
Deferred Inflows of Resources
A deferred inflow of resources is an acquisition of net assets by the government that is applicable to a future reporting period.
See (Note 6 — Property Tax) and (Note 9 — Pension Plans)
Compensated Absences Payable
The City records a liability for all outstanding vacation pay and accrued compensatory time. In governmental funds, vacation
pay and compensatory time is recorded as expenditures when paid which occurs when used or upon termination. In the entity -
wide statements and the proprietary fund statements, vacation pay and compensatory time is recorded as a liability and
expense in the year earned.
Employee vacation leave is accumulated monthly at rates ranging from 12 to 27 days per year depending on term of
employment. Employees may accumulate up to a maximum of 240 hours of vacation leave, except the Police Guild, who can
accrue up to a maximum of 360 hours. Outstanding vacation leave is payable upon termination of employment at the
following rate: City Employees up to 240 hours and Police Guild members will be paid out up to two years of their monthly
vacation accrual rate.
A non-exempt employee may request compensatory time off in lieu of overtime payment. Compensatory time is accrued at a
rate of one and one-half hours for each hour of overtime worked, to a maximum of eighty hours for both City employees and
Police Guild members.
Page 51
Sick leave may be accumulated up to a maximum of 720 hours for regular City employees per City policy and 1,040 hours for
the Police Guild, per their contract. The monthly accrual rate for City employees is 8 hours per month. Accumulated sick
leave is not payable upon termination of employment. Outstanding sick leave at year-end is not accrued due to the difficulty
in estimating the portion of existing balances likely to result in expenditures in future periods. Compensated Absences Payable
outstanding at year-end is outlined in Note 11.
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 all state sponsored pension plans and additions
to/deductions from those plans' fiduciary net position have been determined on the same basis as they are reported by the
Washington State Department of Retirement Systems. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair
value. See (Note 9 — Pension Plans).
Long -Term Liabilities
In the government -wide financial statements and the proprietary fund financial statements, long-term debt and other long-term
obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund
statement of net position. See (Note 11 - Long -Tenn Debt).
Unearned Revenues
Unearned revenue is a liability account that reports amounts received in advance of providing goods or services. For detailed
information, See (Note 7 — Unearned Revenues and Receivables).
Fund Balance Classification
Fund balance is a measurement of available financial resources and is the difference between total assets and total liabilities in
each fund.
Beginning with the most restrictive constraints, fund balance amounts will be reported in the following categories:
Nonspendable — amounts that are not in a spendable form or are legally or contractually required to be maintained
intact.
Restricted — amounts that can be spent only for the specific purposes stipulated by external parties either
constitutionally or through enabling legislation.
Committed — amounts that can be used only for the specific purposes determined by formal action of the City Council
through an ordinance or resolution. Commitments may be changed or lifted by the action of the City Council using
the same formal action of ordinance or resolution that was used to create the commitment.
Assigned — amounts intended to be used by the government for specific purposes. Intent can be expressed by the City
Council or the Mayor. In governmental funds other than the general fund, assigned fund balance represents the
amount that is not restricted or committed. This indicates that resources in other government funds, at a minimum,
are intended to be used for the purpose of that fund.
Unassigned — includes all amounts not contained in other classifications and is the residual classification of the
general fund only. Unassigned amounts are available for any legal purpose.
The council can use a resolution to modify or rescind a fund balance commitment. When an expenditure is incurred for which
both restricted and unrestricted resources are available, it is the City's policy to use restricted resources first. When
unrestricted (committed, unassigned) resources are available, it is the City's policy to spend committed resources first, and
then unassigned, in that order. The minimum fund balance established by the Reserve Policy, and passed by resolution from
the City Council, states "The City shall have an operating cash flow reserve of seventeen percent of the City's General Fund
operating expenditures or $9 million. In addition, the City shall have a contingency for unanticipated cost of $1 million to
cover revenue shortfalls resulting from unexpected economic change or recessionary periods, or to provide funds in the event
of major unplanned expenditures the City could face as a result of natural disasters. The policy shall also include a strategic
opportunities reserve of $2 million to provide liquidity to respond to economic opportunity that is not budgeted for that may
provide a long term economic benefit to the City. In the event that any of the Contingency or Strategic Opportunities Reserve
is used, such appropriation shall be repaid to the fund annually over the next three years. The purpose of the ending fund
balance is to provide financial stability, cash flow for operations and the assurance that the City will be able to respond to
Page 52
revenue shortfalls with fiscal strength." General fund expenditures at 12/31/2018 were $49.6 million and Unassigned General
fund balance at year -ended 2018 was $15.6 million or (31 %).
Other funds that have a significant minimum fund balance policy are: Street Fund - $0.5 million; Arterial Street Fund - $0.1
million; Utility Tax Fund - $2.5 million, REET Fund - one year revenue reserve; Park Equipment and Infrastructure Reserve
Fund - $1.125 million; Hotel/Motel Lodging Tax Fund - $0.2 million; Community Center Fund - $1.5 million; Traffic Safety
Fund - $1.2 million; Debt Service Fund - adequate reserve in accordance with bond ordinance or minimum of one year debt
service amount; Dumas Bay Centre Fund - $1.5 million; and Surface Water Management Fund - $0.5 million.
The Government -wide statement of net position reports $597.9 million of net position, of which $21.0 million is restricted by
the enabling legislation, and $529.9 is for net investment in capital assets (there are no unspent proceeds of debt).
2018 FUND BALANCE CLASSIFICATION
Fund Balance
General
Fund
Performing
Utility Debt Transport-
Street Arts & Event
Tax Service Ctr Oper. anon
Performing
Nonmajor
Arts & E tnt
Ctr Gov t
Total
Nonspendable:
Court trust $
191,381
$ $ $ $ $
$ $
$ 191,381
Prepaid insurance/debt service
38,489
38,489
Restricted for:
Police covert/seizure
389,286
389,286
Future debt payments
-
2,956,848
2,956,848
Special Contracts/Studies
-
686,209
686,209
Hotel/Motel Lodging Tax
1,200,742
1,200,742
Path & Trails Reserves
962,996
962,996
Downtown Redevelopment
1,468,847
1,468,847
City Facilities CIP
29,731
29,731
Parks CIP
1,375,386
1,375,386
Transportation CIP
7,016,571
-
7,016,571
Real Estate Excise Tax
-
4,569,732
4,569,732
Community Development Block (it
29,985
29,985
Committed to:
Capital, debt, and operations
-
1,600,471
-
1,600,471
Petty cash/advance travel
19,350
-
-
19,350
Comm. Development Block Grant
-
-
7,558
7,558
Proposition 1
1,002,101 -
-
1,002,101
Transportation CIP
- 1,919,213
1,919,213
Downtown Redevelopment
-
-
City Facilities CIP
253,049
253,049
Arterial Street
134,471
134,471
Solid Waste/Recycling
154,581
154,581
Federal Way Community Center
1,566,460
1,566,460
Traffic Safety
1,909,111
1,909,111
Snow/ice removal
602,695
-
602,695
Parks CIP
-
261,820
261,820
Performing Arts & Event Ctr
-
-
Capital Project Reserve
360,520
360,520
Unassigned:
General Fund
14,954,243
-
14,954,243
Performing Arts & Event Ctr
-
- (447,382) -
(7,351,556) -
(7,798,939)
Total Fund Balance: $15,592,749
$ 602,695 $ 2,602,571 $ 2,956,848 $ (447,382) $ 8,935,784
$ (7,351,556) $14,971,198
$ 37,862,906
Page 53
Interfund Transactions
There are three types of transactions between funds — inter -fund loans, inter -fund services provided and used, and inter -fund
transfers. Interfund loans are temporary borrowings of cash which do not affect operating statements, but which may incur
interest expense or expenditure to the borrowing fund. Interfund services provided and used are equivalent to buying goods or
services from an outside vendor, and are accounted for by the related funds as revenues, expenditures or expenses. The inter -
fund transfers are accounted for as 'other financing sources and uses" and are therefore included in the operating statements
(see Note 12).
NOTE 2 — RECONCILIATION OF GOVERNMENT -WIDE & FUND FINANCIAL STATEMENTS
Explanation of Certain Differences between the Governmental Funds Balance Sheet and the Government -Wide
Statement of Net Position
The governmental funds' balance sheet includes reconciliation between fund balance — total governmental funds and net
position — governmental activities as reported in the government -wide statement of net position. One element of the
reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period, and,
therefore, are not reported in the funds." The details of this $43,540,418 difference are as follows:
Bonds Payable & Premium at beginning of year $ 32,858,171
Plus: Inclusion of compensated absences 1,998,455
Plus: Current year addition/reduction of principal portion of debt & premium (1,124,560)
Plus: Net Pension Liability 6,767,594
Plus: Deferred Inflows of Resources Related to Pensions 5,508,557
Less: Deferred Outflows of Resources Related to Pensions (2,467,799)
Net Adjustment to reduce fund balances -total governmental
funds to arrive at net position - governmental activities $ 43,540,418
Explanation of Certain Differences between the Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances and the Government -Wide Statement of Activities
The governmental funds' statement of revenues, expenditure, and changes in fund balances includes reconciliation between
net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in
the government -wide statement of activities. One element of that reconciliation explains that "Governmental funds report
capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense." The details of this $7,683,233 difference are as follows:
Capital outlay
$11,807,497
Plus: Contributed Capital
2,114,473
Less: Governmental depreciation expense
(7,636,379)
Plus: Increase in investment in joint venture
1,397,642
Net adjustment to increase net changes in fund balances -
Total governmental funds to arrive at changes in net position
ofgovernmental activities
$ 7,683,233
Another element of the reconciliation states that "Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds." This item presents:
Property taxes earned reported as deferred inflow of resources in the fund statements $ (54,240)
Another element of the reconciliation states that "Some expenses reported in the statement of activities do not require the use
of current financial resources and, therefore, are not reported as expenditures in the funds." This item represents:
Compensated absences $ 11,407
Accrual adjustment for GASB 68 pension reporting $ 2,399,656
Page 54
NOTE 3 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
There have been no material violations of finance -related legal or contractual provisions, and there have been no expenditures
exceeding legal appropriations in any of the funds of the City.
NOTE 4 — SUPPLEMENTAL APPROPRIATIONS
Operating Budget Funds
Appropriations established during 2018 for the City's operating budget funds are provided below. As explained in Note 1,
both original and supplemental appropriations are adopted by the City Council by ordinance. Both original and final budget
appropriations are shown on the accompanying financial statements. The final budget values include all adopted adjustments
to original budget amounts. This table does not include transfers out or Proprietary Funds.
FUND
ORIGINAL
BUDGET
2018
SUPPLEMENTAL
APPROPRIATIONS
FINAL BUDGET
General Fund $
48,932,239
$ 1,347,389 $
50,279,628
Special Revenue Funds:
Street Fund
4,255,507
465,043
4,720,550
Arterial Street Fund
1,517,272
(283,279)
1,233,993
Utility Tax Fund
3,074,938
-
3,074,938
Solid Waste/Recycling Fund
504,818
22,000
526,818
Special Contracts / Studies
-
467,073
467,073
Hotel/Motel Lodging Tax
224,700
-
224,700
Federal Way Community Center
2,254,429
90,000
2,344,429
Traffic Safety
2,296,443
724,605
3,021,048
Performing Arts & Event Center Oper.
986,820
885,166
1,871,986
Community Development Block Grant
1,237,103
-
1,237,103
Paths & Trails
-
-
-
Subtotal Special Revenue Funds:
16,352,030
2,370,608
18,722,638
Debt Service Fund
1,747,863
230,200
1,978,063
Capital Project Funds:
Real Estate Excise Tax
-
-
-
Downtown Redevelopment
-
-
-
City Facilities
-
-
-
Parks
300,000
1,895,887
2,195,887
Transportation
12,663,000
15,286,821
27,949,821
Capital Project Reserve
-
-
-
Performing Arts & Event Center
-
1,000,000
1,000,000
Subtotal Capital Project Funds:
12,963,000
18,182,708
31,145,708
Total: $ 79,995,132 $ 22,130,905 $ 102,126,037
NOTE 5 — DEPOSITS AND INVESTMENTS
As required by state law, all deposits and investments of the City's funds are obligations of the U.S. Government, the Local
Government Investment Pool (LGIP), bankers' acceptances, or deposits with Washington State banks and savings and loan
institutions. In 2018 the City utilized all the above with the exception of bankers' acceptances as legal authorized investment
instruments. The City's investment policies are described in Note 1.
Page 55
Cash and Deposits
The City follows the practice of pooling cash and investments of all funds, except restricted funds and funds held with a
trustee or in escrow, for investment purposes as disclosed in Note 1. At December 31, 2018, the equity in pooled cash and
investments was $62,960,589.
At year-end, the City had $61,563,063 in cash and cash equivalents which consisted of investments with the LGIP of
$41,152,905; U.S. Treasury Agency of $9,694,477; the City's checking account bank balance prior to outstanding checks was
$10,147,667; deposit account of $250, petty cash and change funds, Performing Arts & Event Center checking account and
change fund totaling $46,041, advance travel fund and investigative fund totaling $48,760, and Court Trustee Fund of
$191,381. Cash held with an escrow agent is $1,314,159. No deposits were uninsured or uncollateralized. Insurance
coverage up to $250,000 is through federal depository insurance and the Washington Public Deposit Protection Commission
(WPDPC) covers amounts over $250,000. Under State statute, members of WPDPC, a multiple -financial institution collateral
pool, may be assessed on a prorated basis if the pool's collateral is insufficient to cover a loss. Investments are presented on
balance sheet in the basic financial statements at fair value.
In accordance with GASB Statement 79, LGIP is reported on amortized cost basis. Furthermore, the City can invest and
withdraw their investments on a daily basis with a limit of one transaction per business day and minimum transaction amount
of five thousand dollars. There is no maximum transaction amount, but an investment or withdrawal of ten million dollars or
more, a one -day notification prior to the transfer date is requested, but not required.
The State Treasurer's Office administers the Washington State LGIP authorized under Chapter 43.250 RCW. In its
management of LGIP, the State Treasurer adheres to the principles appropriate for the prudent investment of public funds. In
priority order, they are the safety of principal, the assurance of sufficient liquidity to meet cash flow demands.
As of December 31, 2018 the City had the following investments and maturities:
SCIIFDULEOFINVESTNUNTS BYMATURITIFS
AS OF DECEMBER 31, 2018
Investment maturities
Less than 1 to 2 Greater than
Investment Type Fair Value 1 year years 3 years
State Investment Pool $ 41,152,905 $ 41,152,905 $ $
US Treasury Stripped Principal 4,896,711
US Treasury Stripped Principal 4,797,766
4,896,711
766
$ 50,847,382 $ 41,152,905 $ 4,896,711 $ 4,797,766
Reconciliation of Government -Wide Statement ofNet Position:
Key Bank checking account per books $
10,147,667
Key Bank deposit account
250
Key Bank PAEC checking account & change fund
46,041
Bank ofAmerica PAEC checking account
281,582
Petty cash/change fund/advance travel/investigative fund
48,760
Local Government Investment Pool
41,152,905
US Treasury Stripped Principal
9,694,477
Municipal Court Trust on books
191,381
Subtotal cash, cash equivalents, and investments
61,563,063
Cash with escrow agent
1,314,159
Total cash and investments, Government -Wide
Statement of Net Position $ 62,877,222
Fiduciary fund account per books 83,367
Total Cash & Investments $ 62,960,589
Page 56
Investments
Investments Measured at Amortized Cost
As of December 31, 2018, the City had the following investments at amortized cost:
S CIIEDULE OF PWES TMENTS AT AMORTIZED COST
AS OF DECEMBER 31, 2018
Weighed Average
Investment Type Maturities (Days) Investments Total
State Treasur's Investment Pool 37 Days $ 41,152,905 $ 41,152,905
$ 41,152,905 $ 41,152,905
Investments Measured at Fair Value
The City measures and reports investments at fair value using the valuation input hierarchy established by generally accepted
accounting principles, as follows:
• Level 1: Quoted prices in active markets for identical assets or liabilities;
• Level 2: These are quoted market prices for similar assets or liabilities, which are not active, or not readily
observable.
• Level 3: Unobservable inputs for asset or liability.
At December 31, 2018, the City had the following investments measured at fair value:
SCIIEDULE OF PWES TMEINTS AT FAIR VALUE OF DECEMBER 31, 2018
Quoted Prices in
Actiw Marekts for Significant Other Significant
Identical Assets Observable Inputs Unobservable
Investment Type 12/31/2018 (Level 1) (Lewl 2) Inputs (Level 3)
U.S. Treasury Agency $ 4,896,711 $ 4,896,711
U.S. Treasury Agency 4,797,766 4,797,766
Total By Fair Value Level $ 9,694,477 $ - $ 9,694,477 $ -
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a failure of the counterparty to an investment transaction the City would not
be able to recover the value of the investment of collateral securities. As of December 31, 2018, the City is not exposed to
custodial credit risk as there are not investments held with a brokerage firm or counterparty. City resolution number 13-633
directs that the assets of the City shall be secured through a third party custodian in the form of a Safekeeping Agreement to
guard against potential fraud and embezzlement. The City has investments held by U.S Bank and resolution number 15-683
authorized the opening of this safekeeping account.
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy states
that "no more than 20% of the portfolio may be invested beyond 12 months, and average maturity of the portfolio may not
exceed 2 years."
Credit Risk
Credit risk is the risk that an issuer or other counter -party has to an investment in not fulfilling its obligations. This is
measured by the assignment of a rating by a nationally recognized statistical rating organization. State law and the City's
investment policy limits the instruments in which the City may invest. The following are categories of investments authorized
under the City's policy, in general order of safety and liquidity: Local Government Investment Pool (LGIP); repurchase
agreements; U.S. treasury obligations; U.S. government agencies; U.S. government -sponsored corporations/instrumentalities;
bankers' acceptances (secondary market domestic and foreign); commercial paper (secondary market); insured certificates of
deposit (banks and savings & loans); and uninsured/collateralized certificates of deposit (banks and savings & loans).
The credit risk of the State Investment Pool is limited to obligations of the US Government, government sponsored
enterprises, or insured demand deposit accounts and certificates of deposit.
The LGIP is unrated. U.S. Treasury Agency is rated Aaa by Moody's rating service.
Page 57
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The investment
policy states: "no more than 5% of the portfolio may be invested in the securities of a single issuer, except for the U.S.
Treasury, to which no limits apply, and commercial paper, which is limited to 3% of the portfolio in accordance with state law.
No more than 30% of the portfolio may be invested in bankers' acceptances and certificates of deposit."
As of December 31, 2018 City investments were 8 1 % in LGIP and 19% in U.S. Treasury Agency.
Other Information
Below is a schedule of investments by fund type:
SCIIFDUl OFINVESTMENTS BY FUND CATEGORY AND INVESTMENT TYPE
AS OF DECEMBER 31, 2018
Fund Type
SIP Investments
Total
General Fund
$ 8,846,824 $
3,695,482
$ 12,542,307
Other Major Funds
9,419,477
2,548,954
11,968,431
Special Revenue Funds
4,979,845
1,103,094
6,082,939
Capital Projects Funds
5,081,027
1,167,974
6,249,000
Enterprise Funds
5,055,023
1,178,974
6,233,997
Internal Services Funds
7,770,708
-
7,770,708
Total: S 41,152,905 $
9,694,477
$ 50,847,382
NOTE 6 — PROPERTY TAXES
The King County Treasurer is responsible for collecting property taxes levied in the County by all taxing districts. Amounts
collected by the County on the City's behalf are remitted daily.
PROPERTY TAX CALENDAR
January 1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100% of market value.
October 31 Second installment is due.
As described in Note 1, taxes are levied and become an enforceable lien against properties as of January 1. Annual tax billings
may be paid in two equal installments, due April 30 and October 31. At December 31, 2018, the balance of property taxes
receivable recorded by the City was $199,053. Of this, $182,435 is recorded as deferred inflow of resources, since it was not
collected within the first 60 days of the end of 2018.
Property taxes are recorded as a receivable when levied, offset by deferred inflow of resources. During the year, property tax
revenues are recognized when cash is collected. At year-end, property tax revenues are recognized for collections expected to
occur within 60 days. No allowance for uncollectible taxes is established because delinquent taxes are considered fully
collectible.
Under State law, the maximum levy (for general governmental services) is up to $3.60 per $1,000 of assessed valuation,
subject to two limitations, set forth below. Since the City of Federal Way is not a full service city, the City is only allowed
$1.60. The remaining $2.00 is for the fire district ($1.50) and library district ($0.50).
1. Chapter 84.55 of the State RCW was amended most recently by Initiative No. 747 (which was passed by voters on
November 6, 2001), limits the total dollar amount of regular property taxes levied by the City to the amount of such
taxes levied in the three most recent years multiplied by a limit factor, plus an adjustment to account for taxes on new
construction, improvements and state -assessed property at the previous year's rate. As amended by Initiative No.
747, the limit factor is the lesser of 101% or 100% plus the percent change in the Implicit Price Deflator, unless a
greater amount is approved by a simple majority of the voters; and
2. The Washington State Constitution limits the total regular property taxes to 1% of assessed valuation or $10 per
$1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or
below the 1 % limit.
For levy year received in 2018, the City's regular tax levy was $1.06161 per $1,000 on a 2017 assessed valuation of
$10,298,806,059 for a total regular levy of $10,859,759.
Deferred Inflow of Resources
The table below provides details of the deferred inflow of resources as reported on the fund financial statements.
DEFERRED INFLOW OF RESOURCES
AS OF DECEMBER 31, 2018
Total
Downtown General
Deferred Inflow
General Redev. Govt
Property tax
$ 182,435 $ - $ 182,435
Total by Fund:
$ 182,435 $ - $ 182,435
NOTE 7 - UNEARNED REVENUES AND RECEIVABLES
Unearned Revenues
The table below provides details of the unearned revenues as reported on the statement of net position.
UNEARNED REVENUES
AS OF DECEMBER 31, 2018
Total
Surface
Dumas
PAEC Nonmajor
General
Water
Bay
Total
Unearned Revenues
General
Street Oper. Gov't
Govt
Mgmt
Centre
Proprietary
SWM fees
-
- -
-
147,015
147,015
Commute Trip Reduction Gaunt
-
73,893 - -
73,893
-
-
-
PAEC Fees
-
- 5,800 -
5,800
-
-
Recreation programs / facility
24,637
- - 121,618
146,255
-
326,146
326,146
rentals/ other
Total by Fund:
$ 24,637
$ 73,893 $ 5,800 $121,618
$ 2259948
$ 1479015
$ 326,146
$ 473,160
Receivables & Due from Other Governments
The receivables for the fiscal year ended December 31, 2018 on the government -wide statement of net position are detailed in
the following schedule.
RECEIVABLES & DUE FROM OTHER GOVERNMENTS AS OF DECEMBER 31, 2018
Receivable
General
Street
Performing Arts &
Utility Tax Event Ctr. Oper.
Transport-
ation
Nonmajor
Govt
Proprietary
Total
Property tax
$ 199,053
$
$ $
$
$
$
$ 199,053
Admissions tax
54,709
54,709
Real Estate 1 Keise tax
-
729,735
729,735
Utility tax
-
1,127,504
-
1,127,504
Gambling tax
34,355
-
34,355
Franchise Fee
281,707
-
281,707
Recreation programs/
Facilities
24,565
99,689
23,091
65,621
212,966
Grants/contributions/utility
construction contract receivable
130,080
85,003
-
2,222,120
412,803
29,178
2,879,183
Off Duty security & Other
receivable
458,312
-
-
280,704
-
739,017
State Shared revenue
Surface Water Management fees
3,592,572
-
170,452
-
55,199
-
290,201
-
-
155,599
4,108,423
155,599
Totalbyftnd:
$4,775,353
$ 255,455
S 1,127,504 $ 99,689
$2,277,318
$1,736,534
$ 250,398
$10,522,251
Page 59
NOTE 8 — CAPITAL ASSETS
�apital assets activity for the year ended December 31, 2018 is as follows:
CAPITAL ASS EFS
AS
OF DECEMBER 31, 2018
Adjusted Beginning
Ending Balance
Governmental Activity
Balance
Additions
Deletions
1 2/3
2/31/2018
1/1/2018
Capital Assets, not being depreciated:
Land
$280,152,612
$3,498,906
$ -
$283,651,518
Construction in progress
55,840,085
9,117,594
(35,581,448)
29,376,231
Total capital assets, not being depreciated:
$335,992,697
$12,616,501
$ (35,581,448)
$313,027,750
Capital assets, being depreciated:
Buildings
39,992,538
32,785,652
-
72,778,190
Improvements other than buildings
26,510,478
-
-
26,510,478
Infrastructure
179,967,577
4,097,769
-
184,065,346
Machinery & equipment
19,488,093
1,485,672
(1,635,387)
19,338,378
Total capital assets, being depreciated:
265,958,686
38,369,093
(1,635,387)
302,692,392
Less accumulated depreciation for:
Buildings
(20,787,849)
(1,970,924)
-
(22,758,773)
Improvements other than buildings
(18,037,782)
(1,047,138)
-
(19,084,920)
Infrastructure
(69,424,532)
(5,380,758)
-
(74,805,290)
Machinery & equipment
(12,888,930)
(1,356,520)
1,635,387
(12,610,063)
Total accumulated depreciation:
(121,139,093)
(9,755,340)
1,635,387
(129,259,046)
Total assets being depreciated, net
144,819,593
28,613,753
-
173,433,346
Governmental activities capital assets, net
$480,812,290
$41,230,254
($35,581,448)
$486,461,096
Adjusted Beginning
Ending Balance
Business -Type Activities
Balance
Additions
Deletions
12/3/31/2018
1/1/2018
Capital Assets, not being depreciated:
Land
$11,340,293
$ -
$ -
$11,340,293
Construction in progress
1,057,444
619,625
(1,615,918)
61,151
Total capital assets, not being depreciated:
$12,397,737
619,625
(1,615,918)
11,401,444
Capital assets, being depreciated:
Buildings
4,505,348
-
-
4,505,348
Improvements other than buildings
3,916,934
-
-
3,916,934
Infrastructure
60,788,019
2,031,326
-
62,819,345
Machinery & equipment
198,794
-
-
198,794
Total capital assets, being depreciated:
69,409,094
2,031,326
-
71,440,420
Less accumulated depreciation for:
Buildings
(3,621,305)
(50,743)
-
(3,672,048)
Improvements other than buildings
(280,698)
(39,169)
-
(319,867)
Infrastructure
(15,697,269)
(607,885)
-
(16,305,154)
Machinery & equipment
(115,493)
(7,128)
-
(122,621)
Total accumulated depreciation:
(19,714,765)
(704,925)
-
(20,419,690)
Total assets being depreciated, net
49,694,329
1,326,401
-
51,020,730
Business -Type activities capital assets, net
$62,092,066
$1,946,026
($1,615,918)
$62,422,174
At the end of 2018, 13 projects comprise the Construction in Progress for Governmental Activities. Upon completion, the
projects will be capitalized in the Government -wide statements in their appropriate categories. Construction commitments for
Governmental Activities as of December 31, 2018, are as follows:
AS OF DECEMBER 31, 2018
Governmental Activities Projects Construction Remaining
in progress Commitment
Trail and pedestrian access improvements
$ 1,248,480
$ 188,761
Celebration Park Maintenance Building
37,084
10,003
loth Avenue SW / SW 344th St: SW Campus Drive - 21st Ave SW
318,532
-
South 356th St: SR99 - SR161
4,445,770
510,262
SR99 HOV Lanes Phase 5
20,691,777
595,433
SW 336th Way / SW 340th St: 26th PI SW - Hoyt Rd
255,948
-
S 344th Way @ Weyerhaeuser Way S
281,685
-
21st Ave S Pedestrian Connection Project
291,397
2,555,305
Adaptive Traffic Control System Project Ph I
152,196
239,302
City Center Access Ph I Project
949,538
1,550,462
Street Light LID Conversion Project
115,178
3,134,819
Military Rd & S 298th St Compacted Roundabout Project
566,086
19,434
SR509 9th PI South to I lth PI S Pedestrian Improvement Project
22,560
532,844
Total Governmental Activities
$ 29,376,231
$ 9,336,625
Depreciation expense was charged to functions/programs of the primary government as follows:
CAPITAL ASSETS DEPRECIATION BY TYPE
AS OF DECEMBER 31, 2018
Governmental and Internal Service Activities
General Government
$145,161
Security of Persons & Property
1,246,566
Transportation
5,661,147
Physical Environment
14,081
Economic Environment
138,702
Health
56,879
Culture & Recreation
2,492,805
Total Depreciation - Governmental Activities
$9,755,340
Business -Type Activities
Utilities - Surface Water Management
Culture & Recreation - Dumas Bay Centre
$688,156
16,769
Total Depreciation - Business -Type Activities
$ 704,925
Page 61
NOTE 9 — PENSION PLANS
The following table represents the aggregate pension amounts for all plans subject to the requirements of the GASB Statement
68, Accounting and Financial Reporting for Pensions for the year 2018:
Aggregate Pension Amounts — All Plans
Pension liabilities
($7,679,156)
Pension assets
$8,073,284
Deferred outflows of resources
$2,636,732
Deferred inflows of resources
($5,853,443)
Pension expense/expenditures
$304,174
State Sponsored Pension Plans
Substantially all City of Federal Way full-time and qualifying part-time employees participate in one of the following
statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost -sharing,
multiple -employer public employee defined benefit and defined contribution retirement plans. The state Legislature
establishes, and amends, laws pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington,
issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required
supplementary information for each plan. The DRS CAFR may be obtained by writing to:
Department of Retirement Systems
Communications Unit
P.O. Box 48380
Olympia, WA 98540-8380
Or
downloaded from the DRS website at www.drs.wa.gov.
Public Employees' Retirement System (PERS)
PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts;
employees of the legislature; employees of district and municipal courts; employees of local governments; and higher
education employees not participating in higher education retirement programs. PERS is comprised of three separate pension
plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with
a defined contribution component.
PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation (AFC) times the member's years of service. The AFC is the average of the member's
24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years
of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from
active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to
reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost -of -
living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and
Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new
entrants on September 30, 1977.
Page 62
Contributions
The PERS Plan 1 member contribution rate is established by State statute at 6 percent. The employer contribution rate is
developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18
percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1
required contribution rates (expressed as a percentage of covered payroll) for 2018 were as follows:
PERS Plan 1
Actual Contribution Rates
Employer
Employee*
January — August 2018
PERS Plan 1
7.49%
6.00%
PERS Plan 1 UAAL
5.03%
Administrative Fee
0.18%
Total
12.70%
6.00%
September — December 2018
PERS Plan 1
7.52%
6.00%
PERS Plan 1 UAAL
5.13%
Administrative Fee
0.18%
Total
12.83 %
6.00%
* For employees participating in Judicial Benefit Multiplier (JBM), the contribution rate was 12.26%.
The City of Federal Way's actual PERS plan contributions were $792,384 to PERS Plan 1 for the year ended December 31,
2018.
PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation (AFC) times the member's years of service for Plan 2 and 1 percent of AFC for Plan 3.
The AFC is the average of the member's 60 highest -paid consecutive service months. There is no cap on years of service
credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement before
age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years
of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each
year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can
retire under one of two provisions:
• With a benefit that is reduced by three percent for each year before age 65; or
• With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work rules.
PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of five percent
for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30
years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor
benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the
CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of Labor
and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested in the
defined benefit portion of their plan after ten years of service; or after five years of service if 12 months of that service are
earned after age 44.
PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on those
contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change
rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a minimum of 5
percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined contribution
benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan.
Page 63
Contributions
The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1
UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council
adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required
contribution rates (expressed as a percentage of covered payroll) for 2018 were as follows:
PERS Plan 2/3
Actual Contribution Rates
Employer 2/3
Employee 2*
January — August 2018
PERS Plan 2/3
7.49%
7.38%
PERS Plan 1 UAAL
5.03%
Administrative Fee
0,18%
Employee PERS Plan 3
Varies
Total
12.70%
7.38%
September — December 2018
PERS Plan 2/3
7.52%
7.41%
PERS Plan 1 UAAL
5.13%
Administrative Fee
0.18%
Employee PERS Plan 3
Varies
Total
12.83 %
7.41 %
* For employees participating in JBM, the contribution rate was 18.45% to 18.53%.
The City of Federal Way's actual PERS plan contributions were $792,384 to PERS Plan 1 and $1,154,906 to PERS Plan 2/3
for the year ended December 31, 2018.
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF)
LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and
as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans.
LEOFF Plan 1 City of Federal Way does not have LEOFF Plan 1.
LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible
for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53
receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is three percent for each
year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement
benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty
disability payments, a cost -of -living allowance (based on the CPI), capped at three percent annually and a one-time duty -
related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the
completion of five years of eligible service.
Contributions
The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2. The employer rate includes an administrative expense component set at 0.18 percent. Plan 2 employers and
employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board.
Effective July 1, 2017, when a LEOFF employer charges a fee or recovers costs for services rendered by a LEOFF 2 member
to a non-LEOFF employer, the LEOFF employer must cover both the employer and state contributions on the LEOFF 2 basic
salary earned for those services.
The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2018 were as follows:
LEOFF Plan 2
Actual Contribution Rates
Employer
Employee
State and local governments
5.25%
8.75%
Administrative Fee
0.18%
Total
5.43%
8.75%
Ports and Universities
8.75%
8.75%
Administrative Fee
0.18%
Total
8.93%
8.75%
The City of Federal Way's actual contributions to the plan were $702,132 for the year ended December 31, 2018.
The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement
the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension
Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state
constitution and could be changed by statute. For the state fiscal year ending June 30, 2018, the state contributed $68,152,127
to LEOFF Plan 2. The amount recognized by the City of Federal Way as its proportionate share of this amount is $446,485.
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation
completed in 2018 with a valuation date of June 30, 2017. The actuarial assumptions used in the valuation were based on the
results of the Office of the State Actuary's (OSA) 2007-2012 Experience Study and the 2017 Economic Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2017 actuarial valuation report. The TPL
was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2018. Plan liabilities were
rolled forward from June 30, 2017, to June 30, 2018, reflecting each plan's normal cost (using the entry -age cost method),
assumed interest and actual benefit payments.
Inflation: 2.75% total economic inflation; 3.50% salary inflation
Salary increases: In addition to the base 3.50% salary inflation assumption, salaries are also expected to grow by
promotions and longevity.
Investment rate of return: 7.4%
Mortality rates were based on the RP-2000 report's Combined Healthy Table and Combined Disabled Table, published by the
Society of Actuaries. The OSA applied offsets to the base table and recognized future improvements in mortality by
projecting the mortality rates using 100 percent Scale BB. Mortality rates are applied on a generational basis; meaning, each
member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime.
There were changes in methods and assumptions since the last valuation.
• Lowered the valuation interest rate from 7.70% to 7.50% for all systems except LEOFF 2. For LEOFF 2 the
valuation interest rate was lowered from 7.50% to 7.40%.
• Lowered the assumed general salary growth from 3.75% to 3.50% for all systems.
• Lowered assumed inflation from 3.00% to 2.75% for all systems.
• Modified how the valuation software calculates benefits paid to remarried duty -related death survivors of LEOFF 2
members.
• Updated the trend that the valuation software uses to project medical inflation for LEOFF 2 survivors of a duty -
related death, and for certain LEOFF 2 medical -related duty disability benefits.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.4 percent.
To determine that rate, an asset sufficiency test included an assumed 7.5 percent long-term discount rate to determine funding
liabilities for calculating future contribution rate requirements. (All plans use 7.5 percent except LEOFF 2, which has
assumed 7.4 percent). Consistent with the long-term expected rate of return, a 7.4 percent future investment rate of return on
invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue being
made at contractually required rates (including PERS 2/3, PSERS 2, SERS 2/3, and TRS 2/3 employers, whose rates include a
component for the PERS 1, and TRS 1 plan liabilities). Based on these assumptions, the pension plans' fiduciary net position
Page 65
was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return of 7.4 percent was used to determine the total liability.
Long -Term Expected Rate of Return
The long-term expected rate of return on the DRS pension plan investments of 7.4 percent was determined using a building-
block -method. In selecting this assumption, the Office of the State Actuary (OSA) reviewed the historical experience data,
considered the historical conditions that produced past annual investment returns, and considered capital market assumptions
and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the
capital market assumptions and their target asset allocation to simulate future investment returns over various time horizons.
Estimated Rates of Return by Asset Class
Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation
as of June 30, 2018, are summarized in the table below. The inflation component used to create the table is 2.2 percent and
represents the WSIB's most recent long-term estimate of broad economic inflation.
Asset Class
Target Allocation
% Long -Term Expected
Real Rate of Return
Arithmetic
Fixed Income
20%
1.70%
Tangible Assets
7%
4.90%
Real Estate
18%
5.80%
Global Equity
32%
6.30%
Private Equity
23%
9.30%
100 %
Sensitivity of the Net Pension Liability/(Asset)
The table below presents the City of Federal Way's proportionate share* of the net pension liability calculated using the
discount rate of 7.4 percent, as well as what the City of Federal Way's proportionate share of the net pension liability would be
if it were calculated using a discount rate that is 1-percentage point lower (6.4 percent) or 1-percentage point higher (8.4
percent) than the current rate.
1% Decrease
(6.4%)
Current Discount
Rate
7.4%
1% Increase
(8.4%)
PERS 1
$5,488,477,000
$4,466,034,000
$3,580,392,000
PERS 2/3
$7,809,738,000
$1,707,411,000
$ 3,295,816,000
LEOFF 2
$ 269,981,000
$ 2,030,218,000
$ 3,465,896,000
Pension Plan Fiduciary Net Position
Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial
report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
At June 30, 2018, the City of Federal Way's reported a total pension liability of $7,679,156 and total pension net asset of
$8,073,284 for its proportionate share of the net pension liabilities as follows:
Liability or Asset)
PERS 1
$5,174,213
PERS 2/3
$2,504,943
LEOFF 2
$(8,073,284)
The amount of the asset reported above for LEOFF Plan 2 reflects a reduction for State pension support provided to the City of
Federal Way. The amount recognized by the City of Federal Way as its proportionate share of the net pension asset, the
related State support, and the total portion of the net pension asset that was associated with the City of Federal Way were as
follows:
LEOFF 2 Liability (or
Asset
LEOFF 2 — employer's proportionate share
$ 8,073,284
LEOFF 2 — State's proportionate share of the net pension
liability/(asset) associated with the employer
$(5,227,299)
TOTAL
1 $ 13,300,583
At June 30, the City of Federal Way proportionate share of the collective net pension liabilities was as follows:
Proportionate
Share 6/30/17
Proportionate
Share 6/30/18
Change in
Proportion
PERS 1
0.114547%
0.115857%
0.0013110%
PERS 2/3
0.147025%
0.146710%
(0.000315)%
LEOFF 2
0.434711%
0.397656%
(0.037055)%
Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis
for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules
of Employer and Nonemployer Allocations for all plans except LEOFF 1.
In fiscal year 2018, the state of Washington contributed 39.30 percent of LEOFF 2 employer contributions pursuant to RCW
41.26.725 and all other employers contributed the remaining 60.70 percent of employer contributions.
The collective net pension liability (asset) was measured as of June 30, 2018, and the actuarial valuation date on which the
total pension liability (asset) is based was as of June 30, 2017, with update procedures used to roll forward the total pension
liability to the measurement date.
Pension Expense
For the year ended December 31, 2018, the City of Federal Way recognized pension expense as follows:
Pension Expense
PERS 1
$517,580
PERS 2/3
$67,312
LEOFF 2
$ 280,718
TOTAL
$304,174
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2018, the City of Federal Way reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
PERS 1
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$0
$0
Net difference between projected and actual investment
earnings on pension plan investments
$0
$(205,620)
Changes of assumptions
$0
$0
Changes in proportion and differences between
contributions and proportionate share of contributions
$0
$0
Contributions subsequent to the measurement date
$403,220
$0
TOTAL
$403,220
$ 205,620
Page 67
PERS 2/3
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$307,040
$(438,569
Net difference between projected and actual
investment earnings on pension plan investments
$0
$(1,537,149)
Changes of assumptions
$29,304
$ 712,886
Changes in proportion and differences between
contributions and proportionate share of contributions
$100,610
$(11,192)
Contributions subsequent to the measurement date
$583,451
$
TOTAL
$1,020,405
$(2,699,797)
LEOFF 2
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$432,470
$ 187,463
Net difference between projected and actual
investment earnings on pension plan investments
$0
$(1,412,933)
Changes of assumptions
$4,570
$ 1,158,662
Changes in proportion and differences between
contributions and proportionate share of contributions
$412,999
$(188,968)
Contributions subsequent to the measurement date
$363,068
$0
TOTAL
$1,213,107
$ 2,948,026
Deferred outflows of resources related to pensions resulting from the City of Federal Way's contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other
amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Year ended
December 31:
PERS 1
2019
$8,996
2020
$ 44,950
2021
$ 134,882
2022
$ 34,785
2023
$0
Thereafter
$0
Total
$ 205,620
Year ended
December 31:
PERS 2/3
2019
$ 176,603
2020
$ 499,004
2021
$ 933,240
2022
$ 340,777
2023
$ 121,323
Thereafter
$ 191,895
Total
$ 2,262,842
Year ended
December 31:
LEOFF 2
2019
$ 154,867
2020
$ 368,793
2021
$ 801,893
2022
$(293,508)
2023
$(93,195)
Thereafter
$(385,731)
Total
$(2,097,987
Other Local Government Pension Systems - City of Federal Way
Employees' Retirement System
Effective June 1, 1990, the Federal Way City Council established the Federal Way Employees' Retirement System, per City
Ordinance 90-74 and as authorized by the Federal Social Security Act (42 USCA, Section 418 (g)). The Retirement System is
a defined contribution pension plan established as an alternative to the Federal Social Security System.
During 2018 on average, there were a total of 320 individuals covered by this system. As of the end of the year, there were
323 active employees of the City and four were drawing retirement benefits. During the year 41 employees left the City's
employment and either had been reimbursed their contributions, reimbursement was pending, or they elected to have their
contributions remain in the plan if the balance was $1,000 or greater.
All regular employees of the City of Federal Way are required to participate in the system, with the City matching the
employee's required contribution. The employee pays 6.2% and this is matched by the composite of a cash match
(approximately 5.2%) and insurance payments (1%) for disability, survivor, accidental death and dismemberment, and lump
sum death benefit coverage. Contributions into the plan are tax deferred.
Employees are entitled to make voluntary contributions to the plan, assuming that highly compensated and non -highly
compensated employees are treated equally. Each payroll period, employees may make a voluntary contribution equal to a
minimum of 1 % of the participant's compensation, not to exceed 10% of the participant's compensation.
Covered payroll for 2018 was $28,629,102 and excluding PERS, LEOFF, FWRS, deferred comp, flex plan, and section 125
covered payrolls was $25,431,485. Total City payroll was $30,607,203. Actual City contributions for the year were
$1,454,429. Actual employee contributions were $1,734,127. All contributions were invested in instruments arranged
through independent investment advisors selected by the Municipal Employers Benefit Trust (MEBT) committee comprised of
the entities of Bellevue, Kirkland, Redmond, Edmonds, Mill Creek, Woodinville, Federal Way, and North East King County
Regional Public Safety Communication Agency (NORCOM) but administered by Northwest Plan Services (NWPS).
Retirement System assets are not the property of the City and are not subject to the claims of the City's general creditors. The
Federal Way Retirement System assets are with Security Trust Company, N.A. who invests Plan assets. MEBT can be
contacted for additional information at (877)-690-5410.
In July 1995, the City implemented the hardship withdrawal and loan provision program that allow participants to have limited
access to their contributions while still employed by the City. Hardship withdrawals are available in the event of financial
necessity resulting from uninsured medical expenses, tuition expenses, purchasing one's primary residence, or to prevent
foreclosure on one's primary residence. Loans receivable as of December 31, 2018 were $1,491,890. After 5 years an
employee becomes 100% vested in their employer contributions. Also an employee becomes 100% vested when they reach
their normal retirement date (the earlier of age 65 or the earliest service retirement date under any other retirement benefit
program to which the City contributes on the employees behalf).
The consulting actuary firm of Northwest Plan Services (N WPS) has been contracted to provide record keeping,
administrative and consulting services related to the Plan Actuarial determinations are not required because accidental death
and dismemberment insurance, long-term disability, survivor income insurance and the lump sum death benefit are provided
by a group insurance policy with Standard Insurance Company; and benefits paid to participants upon retirement are limited
to: (a) a nonforfeitable, nontransferable annuity contract purchased by the plan's trustee, (b) retirement benefits payable from
the employee's account to which no contributions by the City or the participant can be added after retirement, or a single
lump -sum payment equal to the accumulated balance in the employee's account as of his retirement date.
NOTE 10 —RISK MANAGEMENT
The City uses the Risk Management Internal Service Fund to account for its risk financing activities. The City maintains
insurance against most normal hazards. The City faces most of the risks faced by similar sized cities including general liability
for bodily injury, law enforcement, and property liability.
Through its Risk Management Fund, the City records insurance premium costs for general liability coverage and builds
reserves for future claims, self -insured retention, and a future general liability self-insurance program.
There were no settlements in excess of insurance for commercially insured activities for 1996 through 2018. The fund balance
for the Risk Fund as of 12/31/2018 is $1.60 million.
Cyber Security Program
The City of Federal Way employs 1) computer workstation endpoint virus protection on all network connected PC's that is
updated as soon as new definitions are released, 2) system network "next generation" firewall for perimeter protection. In
addition the City has cyber liability insurance of $1 million with a $50K deductible for each single event for fund transfer
fraud, extortion, computer fraud, or business interruption. Also the Council authorized $20,000 in 2018 for a cyber security
audit that will be done in 2019.
The following is a summary of coverage in force in 2018.
S C1>EDULE OF INS URANCE IN FORCE
AS OF DECEMBER 31, 2018
Company Policy Period Details of Coverage Liability Limits
Argonaut
12/31/17-12/31/18
General liability (auto, general, police, e &
$250,000 self -insured retention (SIR) with
o, employment practices, & stop gap)
aggregate limits of $10,000,000.
Arch
$10,000,000in excess of$10,000,000with
Insurance
12/31/17-12/31/18
Excess liability
aggregate limits of$10,000,000.
Coan
Crime/fidelity (employee theft, forgery or
alternation, on premises, in transit, money
Deductible ranges from $5,000 to $25,000
Travelers
1/l/18-1/l/19
orders and counterfeit money, computer
with single loss limits ranging from$50,000
crime, fund transfer fraud and claims
to $1,000,000.
expense)
$25,000 deductible with single loss limits of
Philadelphia
1/l/18-1/l/19
Property coverage
$61,500,577 for buildings and $5,401,565 in
contents.
The City's industrial insurance is provided by the Association of Washington Cities and is administered by the Workers' Comp
Retro Program. Coverage is purchased by means of standard rates per working hour and is computed by the total number of
hours worked by employees multiplied by the basic premium rate assigned to the business risk classification. The following
are benefits provided by industrial insurance: medical services, damaged clothing, travel expenses, time -loss payments,
vocational rehabilitation, partial disability awards, pension awards and survivor benefits.
NOTE 11— LONG-TERM LIABILITIES
The various categories of long-term debt reflected on the City's financial statements are briefly described in the following
paragraphs. Ratings are issued on the bond at the time of issuance. The ratings issued on City bonds are shown on page 70.
General obligation bonds are backed by the City's full faith and credit. Proceeds are typically used for the acquisition or
construction of major capital facilities or equipment. "Councilmanic Bonds" are general obligation bonds issued by City
Council without voter approval. Under State law, repayment of these bonds must be financed from general City revenues
because no additional property taxes can be levied to support related debt service payments. General Obligation bonds
approved by the voters are typically repaid through an annual "excess" property tax levy authorized for this purpose by State
statute. At year-end 2018 the City had no voter -approved bonds outstanding. All principal and interest payments on general
obligation debts are recorded as expenditures by the City's Debt Service Fund.
A) On November 17, 2017, the City issued $6,000,000 of limited tax general obligation bond with an interest rate of
2.17 percent, maturity due date of 11/27/2037 which contains mandatory tender option date of 11/17/2022. Proceeds
were used to pay off the 2014 KeyBank Bond Anticipation Note which was scheduled for maturity on 12/01/2017.
There was no significant economic gain or loss on the transaction.
B) On November 26, 2014 the City issued $8,209,906 of general obligation three year bond anticipation note with
KeyBank to acquire the Target property with an interest only rate of 1.51 percent. The maturity date of this note was
12/01/2017. The funds were used to purchase the old Target property for downtown development. The bond was
partially paid down on 10/13/2017 for $2,209,906 with partial sale of the land on August 7, 2017. The three year
bond was paid in full on 11/17/2017.
C) On March 4, 2013 the City issued $12,415,000 of general obligation refunding bonds with an average interest rate of
2.67 percent to provide resources to purchase U.S. Government and State and Local Government Series security that
were placed in an irrevocable trust for the purpose of generating resources to advance refund on $12,310,000 of
outstanding 2003 GO Federal Way Community Center debt on December 1, 2013. As a result the 2003 GO FWCC
bonds are considered to be defeased and the liability has been removed from the governmental activities column of
the statement of net position. This advance refunding was undertaken to reduce total debt service payments over the
next twenty one years by $2,322,943 and resulted in an economic gain of $1,740,458. (Economic gain is the net
present value of future savings between old and the new debt).
D) On June 28, 2016 the City entered into a Contract Loan Guarantee with Housing Urban Development for
development of the Federal Way Performing Arts and Events Center. This loan, referred to as Section 108 Loan is
authorized up to $3,030,000 with advances of $3,030,000 as of 12/31/2018 with a variable rate of 3M LIBOR plus 20
Page 70
basis points. The Section 108 Loan contains a 20 year term with provisions to convert to a fixed rate loan at a future
date.
E) The City in conjunction with several other South King County cities (Auburn, Burien, Renton, SeaTac, Tukwila,)
agreed to build a facility to hold its inmates. The total bond in 2009 was $86.325 million and the City of Federal
Way's portion at that time was $15.522 million. In 2018 the facility was able to use its excess revenue from excess
space rented to non-member cities to pay the bond in 2018. The City Council decided to withdraw from the SCORE
interlocal agreement on September 4th, 2018 effective on the year following the date of notice. At the April 16, 2019
council meeting the City Council decided to bond the City portion of the SCORE debt separately from the SCORE
entity. SCORE and Valley Communications joint venture information can be found on pages 73 thru 76.
The following schedules detail the long-term debt activity and balances of the City for GO Bonds, SCORE and Section 108
HUD Loan, Public Works Trust Fund Loans, Compensated Absences, and Net Pension Liability. Typically we have used the
governmental funds on pages 29 and 30 to liquidate the net pension liability, with the General Fund being the primary fund.
OUTSTANDING GENERAL OBLIGATION DEBT AND LONGTERM LIABILITIES - BYTYPE
DECEMBER 31, 2018
Amount
Beginning
Ending
BondRafing
Description
Issue Maturity
Interest
Originally
Outstanding
Amount
Amount
atlssuance
Date Date
Rate
Issued
Debt
Issued
Issued
Redeemed
Debt
Governmental Activities:
General Obligation Bonds:
A) 2017 Ltd Tax GO Bond t -
Nov 17, 17 Nov 27, 37
2.17
$ -
$ 6,000,000
$
$ 6,000,000
C)2013 Refund Ltd/Connanity Center Aa3
Dec 01,13 Dec 01,33
2.67
12,415,000
10,395,000
500,000
9,895,000
Subtotal GO Bonds:
- -
12,415,000
16,395,000
500,000
15,895,000
Other Miscellaneous Debt -Intergovernmental:
D) 2016 Section 108 HUD Loan
Aug 01, 16 Aug 01, 35
1.14
3,030,000
2,871,000
159,000
2,712,000
E) 2009 SCORF/Special Obligation Bond Al/AA
Nov 04, 09 Jan 01, 39
3.00-6.62
15,522,300
13,307,400
415,800
12,891,600
Subtotal miscellaneous:
- -
18,552,300
16,178,400
574,800
15,603,600
Subtotal GO Bonds plus Misc.
30,967,300
32,573,400
1,074,800
31,498,600
Compensated absences
-
2,010,898
2,240,598
2,253,041
1,998,455
Net Pension Liability (NPL) for Pers 1,2, & 3
-
9,161,880
2,394,286
6,767,594
Subtotal GO bonds, misc., comp. absences, & NPL
30,967,300
43,746,178
2,240,598
5,722,127
40,264,649
Business -Type Activities:
Public Works Trust Fund Loan (PWTFL):
PWTL - SeaTac Mall Drain Imp
May 31, 00 Jul 01, 19
1.00
412,500
32,040
16,020
16,020
PWTL- SeaTacMallDrainImp
Aug 14,00 Jul 01,19
1.00
2,062,500
160,201
80,100
80,101
Subtotal PWTFL
- -
2,475,000
192,241
96,120
96,121
Compensated absences
-
100,838
125,507
116,181
110,164
Net Pension Liability (NPL) for Pers 1,2, & 3
-
1,381,881
470,319
911,562
Subtotal PW TFL, comp. absences, & NPL:
2,475,000
1,674,960
125,507
682,620
1,117,847
Grand Total All Long -Term Debt:
$ 33,442,300
$ 45,421,138
$ 2,366,105
$ 6,404,747
$41,382,496
I On November 17, 2017 the City issued $6, 000, 000 of Ltd Tax GO Bond with an interest rate of 2.17 percent, maturity date of] 112712037, mandatory tender
option date of 11/1712022. Bond proceeds were used to pay off the 2014 KeyBank Bond Anticipation Note. 2 The ending 2017 refunding Community bond
premium is $235, 010 with current year amortization of $49, 760. 3 Contract Loan Guarantee Assistance via Housing Urban Development with variable rate;
3 month Libor plus 20 basis points. ° Currently the City has an inter -local agreement with Des Moines where they contribute 1 % to the City of Federal Way
SCORE Debt.
S CHFDULE OF CHANGES IN LONGTERM L1L BII.ITIES
PERIOD ENDED DECEMBER 31, 2018
Beginning
Ending
Outstanding
Additions
Reductions
Outstanding
Debt
Debt
Governmental Activities:
General Obligation Bonds
$ 16,395,000
$ -
$ (500,000) $
15,895,000
Other-intergovemrnental debt
16,178,400
-
(574,800)
15,603,600
Compensated absences
2,010,898
2,240,598
(2,253,041)
1,998,455
Net Pension Liability (NPL) for Pers 1,2, & 3
9,161,880
-
(2,394,286)
6,767,594
Total Governmental Activities
43,746,178
2,240,598
(5,722,127)
40,264,649
Business -Type Activities:
Enterprise Funds
Public Works Trust Fund Loan
192,241
-
(96,120)
96,121
Compensated absences
100,838
125,507
(116,181)
110,164
Net Pension Liability (NPL) for Pers 1,2, & 3
1,381,881
-
(470,319)
911,562
Total Business -Type Activities
1,674,960
125,507
(682,620)
1,117,847
Total All Funds
$ 45,421,138
S 2,366,105
$ 6 404 747 $
41,382,496
Page 71
OUTS TANDING GENERAL OBLIGATION DEBT AND LONGTERM LIABILMES - BY FUND
DECEMBER 31, 2018
Amount
Beginning
Ending
Description
Originally
Outstanding
Amount
Amount
Outstanding
Due within
Issued
Debt
Issued
Redeemed
Debt
one year
Governmental Long -Term Debt:
General Obligation Bonds:
A) 2017 Ltd Tax GO Bond 1
$ -
$ 6,000,000 $
$ -
$ 6,000,000
$ 192,447
C) 2013 Refund I-td/Cornmnity Center 2
12,415,000
10,395,000
500,000
9,895,000
515,000
Subtotal GO Bonds:
12,415,000
16,395,000
500,000
15,895,000
707,447
Other Miscellaneous Debt -Intergovernmental:
D) 2016 Section 108 HUD Loan3
3,030,000
2,871,000
159,000
2,712,000
159,000
E) 2009 SCORE/Special Obligation Bond4
15,522,300
13,307,400
415,800
12,891,600
429,300
Subtotal miscellaneous:
18,552,300
16,178,400
574,800
15,603,600
588,300
Subtotal GO Bonds plus Misc.
30,967,300
32,573,400
1,074,800
31,498,600
1,295,747
Compensated absences
-
2,010,898
2,240,598
2,253,041
1,998,455
141,897
Net Pension Liability (NPL) for Pers 1,2, & 3
-
9,161,880
-
2,394,286
6,767,594
na
Subtotal GO bonds, misc., comp. absences, & NPL:
30,967,300
43,746,178
2,240,598
5,722,127
40,264,649
1,437,644
Business -Type Activities:
Enterprise Funds:
Public Works Trust Fund Loan
2,475,000
192,241
-
96,120
96,121
96,120
Subtotal Bus -Type Long -Tenn Debt
2,475,000
192,241
-
96,120
96,121
96,120
Compensated absences
-
100,838
125,507
116,181
110,164
8,042
Net Pension Liability (NPL) for Pers 1,2, & 3
-
1,381,881
-
470,319
911,562
na
SubtotalPWTFL comp. absences, &NPL:
2,475,000
1,674,960
125,507
682,620
1,117,847
104,162
Grant Total All Long -Term Debt:
$ 33,442,300
$ 45,421,138 $
2,366,105
$ 69404,747
$ 41,382,496
$ 1,541,806
SCHEDULEOFDEBTSERVICE REQUIREMENTS TOMATURITY
AS OF DECEMBER 31, 2018
Go,mrnmentActivities
Business -Type Activities
General Gowrnmental Debt
Public Work Trust Fund
Grand Total
Principal
Interest
Principal
Interest
Principal
Interest
P&I
Year
2019
1,295,747
1,019,871
96,120
961
1,391,867
1,020,832
2,412,699
2020
1,523,881
981,262
-
-
1,523,881
981,262
2,505,143
2021
1,574,916
931,453
1,574,916
931,453
2,506,369
2022
6,233,956
876,620
6,233,956
876,620
7,110,576
2023
1,259,400
730,077
1,259,400
730,077
1,989,477
2024-2028
6,893,500
3,055,710
6,893,500
3,055,710
9,949,210
2029-2033
9,063,400
2,012,999
-
9,063,400
2,012,999
11,076,399
2034-2038
3,653,800
385,338
-
3,653,801
385,338
4,039,139
Totall
$ 31,498,600
1 $ 9,993,330
1 $ 969120
1 $ 961
1 $ 31,594,721
1 $ 99994,291
1 $ 41,589,012
Computation of Legal Debt Margin
Under Washington State law (RCW 39.36.020), a City may incur general obligation debt for general city purposes in an
amount not to exceed 2'/2 percent of the value of all taxable property within the City. State law requires all property to be
assessed at 100 percent of its true and fair value. Unlimited tax general obligation debt requires an approving vote of the
people, and any election to validate such general obligation debt must have a voter turnout of at least 40 percent of those who
voted in the last State general election and of those voting; 60 percent must be in the affirmative. The City Council may, by
ordinance, authorize the issuance of limited tax general obligation debt in an amount up to 1.5% of the valuation within the
City without a vote of the people. No combination of limited or unlimited tax debt may exceed 7'/2 percent of the valuation.
The debt service on unlimited tax debt is secured by excess property tax levies, whereas the debt service on limited tax debt is
secured by property taxes collected with the City's councilmanic levy. See page 132 for a detailed calculation of the valuation.
The City's legally remaining debt capacities as of December 31, 2018 are:
Computation of Limitation of Indebtedness
General government (no vote required)
General government (3/5 majority vote required)
Parks and open space (3/5 majority vote required)
Utilities (3/5 majority vote required)
Total
2018
$ 140,578,148
113,160,811
282,902,026
282,902,026
$ 819,543,011
Page 72
Compensated Absences
The City's liability for accrued vacation and compensatory time balances is recorded in the schedule below. Accrued
compensated absences for proprietary fund employees are recorded as liabilities in those funds expected to incur the related
future expense. Typically the General Fund has been used to liquidate compensated absences for the General Government.
Governmental Activities:
Current portion
$ 141,897
Noncurrent portion
1,856,558
Business -Type Activities:
Current portion
8,042
Noncurrent portion
102,122
Total Compensated absences $ 2,108,619
Estimated Arbitrage Rebate
The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt of over $5 million to make payments to the United
States Treasury of investment interest received at yields that exceed the issuer's tax-exempt borrowing rates. Payments of
arbitrage rebate amounts due under these regulations must be made to the U.S. Treasury every five years. The City's estimated
rebatable arbitrage amount as of December 31, 2018 is $-0- for its tax-exempt general obligation bond issues subject to the
Tax Reform Act issued through that date. No arbitrage applies to any of City of Federal Way bonds.
NOTE 12 — INTERFUND TRANSACTIONS
Interfund transfers for the year ended December 31, 2018 were as follows:
Interfund Transfers In Out
Governmental Funds:
General Fund
Street Fund
Utility Tax Fund
Debt Service
Performing Arts & Event Center
Operations
Transportation
Performing Arts & Event Center
Nonmajor Governmental Funds
Proprietary Funds:
Surface Water Management
Dumas Bay Centre
Internal Service Funds
$ 8,734,621 $ 1,515,366
2,117,563 -
9,216,861
813,473 1,000,000
626,762 -
3,060,277 402,656
1,000,000 -
1,892,474 6,733,788
123,501
500,000
Total: $18,868,671 $18,868,671
The following describes the amounts transferred out during 2018:
General Fund:
• $1,061,511 to Street Fund to subsidize street maintenance and operations.
• $453,855 to Performing Art & Event Center to subsidize operations.
Utility Tax Fund:
• $5,387,582 to General Fund for operation support.
• $579,474 to Federal Way Community Center for maintenance and operations.
• $653,396 to Street Fund for maintenance and operations of City streets.
• $500,000 to Building & Furnishings Fund for future capital needs of city buildings.
• $123,501 to Dumas Bay Center to subsidize maintenance and operations and establish a reserve for future capital
needs of the building.
• $172,907 to Performing Art & Event Center for maintenance and operations of operating the facility.
• $1,800,000 to Strategic Reserve Fund for establishing a reserve for future strategic needs.
Transportation CIP Fund:
0 $402,656 to Street Fund for maintenance and operations of City streets.
Page 73
Nonmajor Funds:
• $1,547,039 from Traffic Safety Fund to General Fund for Police related services.
• $544,621 from Arterial Street Overlay Fund to Transportation CIP Fund for street preservation projects.
• $813,473 from Real Estate Excise Tax (BEET) Fund to Debt Service Fund for debt payments.
• $1,013,000 from REET Fund to Arterial Street for street overlay.
• $100,000 from REET Fund to Parks CIP Fund for major maintenance of parks facilities.
• $100,000 from REET Fund to Parks CIP Fund for playground equipment.
• $50,000 from REET Fund to Parks CIP Fund for trail and pedestrian access improvements.
• $50,000 from REET Fund to Parks CIP Fund for Lakota Soccer Field upgrade project.
• $402,656 from REET Fund to Street Construction Project SR99 Phase V.
• $1,613,000 from REET Fund to Street Construction Project New City Center Access Phase I.
• $500,000 from Downtown Redevelopment Fund -LIFT to Street Construction Project 21't Ave S Pedestrian
Connection.
Interfund loans for the year ended December 31, 2018 were as follows:
Interfund Loans Receivable Payable
General Fund $ 724,818 $ -
Special Revenue Funds:
Performing Arts & Event Center Ops. 500,000
Community Development Block Grant - 224,818
Capital Project Funds:
Performing Arts & Event Center - 8,121,469
Internal Service Funds:
Information Technology Fund 2,222,319 -
Fleet & Equipment Fund 5,899,150 -
Total Interfund Loans $ 8,846,287 $ 8,846,287
NOTE 13 — CONTRACTUAL OBLIGATIONS, CONTINGENCIES AND LITIGATION
As of December 31, 2018 there were several minor claims for damages and 8 lawsuits pending against the City. With TWO
exceptions noted below, in the opinion of the City Attorney, none of these lawsuits or claims exposes the City to potential
liability, either singly or in the aggregate, that materially affect the financial condition of the City. One exception to this
statement is a claim for $10,777,440.22 filed by a contractor, Graham Construction, Inc., in relation to Phase 5 of the Pacific
Highway improvement project. While the City disputes this claimed amount and is vigorously defending the City's position, it
is possible that the liability for the City may exceed the original contract budget by a significant amount. The other exception
is a personal claim for damages of $1,000,000. The extent of injuries is unknown at this time; however, the demand appears to
be excessive. The State Patrol investigated the accident, and documented minor injuries to plaintiff. No support for medical
injuries has been provided to the City as of this date. The City will await an updated claim package or the filing of a lawsuit
before further action is taken.
NOTE 14 — JOINT VENTURES
Valley Communication Center
The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by
the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way
was formally admitted as an addition in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal
Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter was
automatically extended for a consecutive five year -period.
The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency
communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing
agencies, which include King County Fire Districts 2, 20, 26, 40, 43, 44, and 47; City of Pacific Police and Fire Departments,
City of Algona Police Department, City of Des Moines Police Department, City of Black Diamond Police and Fire
Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire
Page 74
Department. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth
conditions of services and rates charged.
The allocation of prorated financial participation among the five member cities is the percentage of dispatched calls attributed
to each jurisdiction compared to the total estimated dispatched calls, for the current twelve month period ending December 31.
The percentages are applied to the current approved budget, less revenue from all other sources. Distribution of the current
year net income is based on the same percentages. The 2018 cost distributions for the five member cities are as follows:
Dispatchable Percent
City
Calls
of Total
Kent
117,948
26.92%
Renton
90,329
20.62%
Auburn
101,199
23.10%
Tukwila
36,799
8.40%
Federal Way
91,883
20.97%
Total 438,158 100.00%
Valley Com is governed by an Administration Board, composed of the Mayors or designated representatives from the five
participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Administration Board is authorized to establish
bylaws that govern procedures of the Board and Valley Com's general operations for the following functions: 1) Budget
review and recommendations to the legislative bodies of the member cities, and budget adoption after each legislative body
has approved the required financial participation for the ensuing year; 2) Approve appointment and/or discharge of the
Director; 3) Approve personnel policy and make final decisions on all major policy changes; and 4) Review and approves all
contracts.
In addition, an Operating Board was established and consists of two members of each participating City's Public Safety
Departments, including the heads of such departments or their designees. The Operating Board performs the following
functions: 1) Oversees the general operation of Valley Com, and advises and makes recommendations to the Administration
Board; 2) Make recommendations on Director selection; 3) Presents proposed policies and budgets to the Administration
Board; and 4) Reviews disbursements of funds by the Director.
The Director presents a proposed budget to the Operating Board on or before August 15 of each year. Said budget is then
presented to the Administrative Board by September 1 of each year. The Administration Board can make changes to the
proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each member city, in
accordance with the provisions of the interlocal agreement.
In May 1993 Valley Com entered into an agreement with King County to provide joint project management for the acquisition
and installation of 800-MHz emergency radio communications system approved by the voters of King County in conjunction
with a $57 million levy. In August 1993 Valley Com also entered into an Interlocal Cooperation Agreement with the sub-
regions of King County, Seattle, and Eastside Public Safety Communications, which governs the development and installation
of the new 800-MHz emergency radio system. Valley Com now provides emergency communication dispatch services to a
population of approximately 570,000.
Valley Com operates as an enterprise fund and is totally self-supporting through the implementation of user fees, and the
primary source of revenue is provided by charges for calls for service. The 800-MHz emergency radio communications
system operated by the agreement with King County is operated as a separate enterprise fund, and the Member Cities have no
equity interest in the contributed capital from this system.
The share of equity belonging to the five participating cities is shown below. Liabilities are the responsibility of the five
participating cities in direct proportion to their equity position.
Balances in 2018
Kent Renton Auburn Tukwila Federal Way Total
Equity @ January 1, 2018 $ 7,215,101 $ 5,212,721 $ 5,290,138 $ 2,677,983 $ 4,222,771 $ 24,618,714
Prior period adjustment $ - $ - $ - $ - $ - $ -
Current year increase 874,974 670,091 750,724 272,987 681,619 3,250,395
Equity @ December 31, 2018 $
8,090,075 $
5,882,812 $
6,040,862 $
2,950,970 $
4,904,390
$ 27,869,109
Percent of equity
29.03%
21.11%
21.68%
10.59%
17.60%
100.00%
Prior year's percent of equity
29.31%
21.17%
21.49%
10.88%
17.15%
100.00%
A complete set of financial statements is available from:
Valley Communications Center, 27519 108'b Avenue SE, Kent, WA 98030.
Page 75
South Correction Entity
The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an
Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments,
the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the
"Interlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009
and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This interlocal
agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated October 1,
2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host
City fulfills all of its obligations as outlined in the Host City Agreement. Pursuant to SCORE financial policies, all
unexpected funds or reserve funds shall be distributed based on the percentage of the Member City's average daily population
at the SCORE Facility for the last three (3) years regardless of its Owner City or Host City status.
SCORE, a governmental administrative agency pursuant to RCW 39.34.030(3), has the power to acquire, construct, own,
operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional
services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of
public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member
Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall
be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement.
Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility was provided by bonds issued
by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development authority
chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755. The SCORE PDA issued $86 million in
special obligation bonds in 2009 (the "Bonds") to construct, develop, acquire and equip the SCORE Facility. Pursuant to the
Formation Interlocal Agreement and the ordinances of each city, each Owner City (which includes the Cities of Auburn,
Burien Federal Way, Renton, SeaTac, and Tukwila) is obligated to budget for and pay its share, and only its share, of the
principal of and interest on the Bonds as the same become due and payable. Each Owner City's obligation to pay its portion is
an irrevocable, unconditional full faith and credit obligation of such Owner City, payable from property taxes levied within the
constitutional and statutory authority provided without a vote of the electors of the Owner City on all of the taxable property
within the Owner City and other sources of revenues available therefor. The following is a summary of the debt service
requirements for the Bonds:
Summary of Debt Service Requirements
Debt Service Schedule
Debt Service Allocation to Owner Cities
35 % BABs
Auburn
Burien
Federal Way
Renton
SeaTac
Tukwila
Year
Principal
Interest
Subsidy
Total
31%
4%
18%
36 %
3 %
8%
2019
2,310,000
4,602,229
(1,478,317)
5,433,912
1,684,513
217,356
978,104
1,956,208
163,017
434,713
2020
2,385,000
4,484,854
(1,440,560)
5,429,294
1,683,081
217,172
977,273
1,954,546
162,879
434,344
2021
2,465,000
4,363,604
(1,401,577)
5,427,027
1,682,378
217,081
976,865
1,953,730
162,811
434,162
2022
2,590,000
4,233,250
(1,500,618)
5,322,632
1,650,016
212,905
958,074
1,916,148
159,679
425,811
2023-2027
14,485,000
18,727,798
(6,710,481)
26,502,317
8,215,718
1,060,093
4,770,417
9,540,834
795,070
2,120,185
2028-2032
17,725,000
13,590,870
(4,959,695)
26,356,175
8,170,414
1,054,247
4,744,112
9,488,223
790,685
2,108,494
2033-2037
21,855,000
7,082,263
(2,731,829)
26,205,434
8,123,685
1,048,217
4,716,978
9,433,956
786,163
2,096,435
2038-2039
10,115,000
676,321
(353,824)
10,437,497
1 3,235,624
417,500
1,878,749
3,757,499
313,125
835,000
Total
$ 73,930,000
$57,761,189
$(20,576,901) $ 111,114,288
1 $ 34,445,429
$ 4,444,571
$ 20,000,572
$40,001,144
$3,333,429
$ 8,889,143
*Of the $20,000,572 allocation to Federal Way, $12,891,600 is for the principal portion and the remainder is for interest. At the April 16, 2019 council
meeting the City Council decided to bond the City portion of the SCORE debt separately from the SCORE entity.
On September 4th, 2018 the City Council decided to withdraw from the SCORE interlocal agreement effective on the year
following the date of notice per city resolution 18-741. The City of Federal Way will still be responsible for paying their
proportionate share of debt service in the amount of 12,891,600 as of 12/31/2018.
Page 76
The City of Federal Way reports its share of equity interest in the Governmental Activities column within the Government -
wide financial statements under non -current assets. The following is condensed (unaudited) financial information as of
December 31, 2018 related to SCORE:
South Correction Entity (SCORE)
2018 Owner Cities Equity Allocation
Member
Percent of
2017
2018
city
i
i Balance
Apportionment Equity Balance
Auburn
29.00%
$ 3,147,747
$ 949,658 $ 4,097,405
Burien
4.00%
346,865
179,397 526,262
Des Moines
2.00%
163,335
178,510 341,845
Federal Way
24.00%
2,353,747
1,131,823 3,485,570
Renton
29.00%
3,016,168
1,141,371 4,157,539
SeaTac
5.00%
456,976
262,464 719,440
Tukwila
7.00%
719,422
311,686 1,031,108
Total
100.00%
$ 10,204,260
$ 4,154,909 $ 14,359,169
Completed financial statements for SCORE and SCORE PDA can be obtained at SCORE, Attn: Finance Manager, 20817 17'
Avenue South, Des Moines, WA 98198.
Joint Venture Reconciliation to Government Wide Financial Statements
Balance Balance
1/1/2018 Additions Reductions 12/31/2018
Valley Communications Public Development Authority $ - $ - $ - $ -
SCORE Public Development Authority 13,307,400 - (415,800) $ 12,891,600
Total Due to Other Governmental Units 13,710,600 - (415,800) 12,891,600
Valley Communications Center
South Correctional Entity (SCORE)
Total Joint Venture Capital Assets
4,222,771 681,619
4,904,390
2,353,747 1,131,823 - 3,485,570
5,776,832 1,813,442 - 8,389,960
Total Investment in Joint Ventures $19,487,432 $1,813,442 $ (415,800) $ 21,281,560
NOTE 15 — PRIOR PERIOD ADJUSTMENTS
City of Federal Way considers revenues to be available if they are collected within 60 days of the end of the current fiscal
period. There is usually a two month lag in state shared revenue, amounts collected for November and December 2018 are
paid to the City in January and February 2019. In 2017, the City was only accruing one month of state shared revenue
amounts, versus two months this year.
The prior period adjustment of $2.02M accounts for $1.5M in sales tax, $0.3M is local criminal justice sales tax, $0.2M in
Motor Vehicle Fuel Tax, and $0.1M in other taxes.
Page 77
Governmental -type capital asset activity prior period adjustment of $0.23M is for Construction in progress that was
incorrectly classified as business -type activity.
Beg. Bal Prior Period Adj. Beg. Ending Bal.
Governmental Activity 1/1/2018 Adjustment Balance Additions Deletions 12/31/2018
Capital assets, not being depreciated:
Land
$ 280,152,612
$ -
$ 280,152,612
$ 3,498,906
$ -
$ 283,651,518
Construction in progress
56,070,165
(230,080)
55,840,085
9,117,594
(35,581,448)
29,376,231
Total capital assets, not being depreciated:
336,222,777
(230,080)
335,992,697
12,616,501
(35,581,448)
313,027,750
Capital assets, being depreciated
Buildings
39,992,538
39,992,538
32,785,652
72,778,190
Improvements other than buildings
26,510,478
26,510,478
-
26,510,478
Infrastructure
179,967,577
179,967,577
4,097,769
184,065,346
Machinery and equipment
19,488,093
19,488,093
1,485,672
(1,635,387)
19,338,378
Total capital assets, being depreciated:
265,958,686
-
26599589686
38,369,093
(1,635,387)
302,692,392
Less accumulated depreciation for:
Buildings
(20,787,849)
(20,787,849)
(1,970,924)
(22,758,773)
Improvements other than buildings
(18,037,782)
(18,037,782)
(1,047,138)
(19,084,920)
Infrastructure
(69,424,532)
(69,424,532)
(5,380,758)
(74,805,290)
Machinery and equipment
(12,888,930)
(129888,930)
(1,356,520)
1,635,387
(129610,063)
Total accumulated depreciation:
(121,139,093)
(121,139,093)
(9,755,340)
1,635,387
(129,259,046)
Total assets being depreciated, net
144,819,593
-
144,819,593
28,613,753
-
173,433,346
Governmental activities capital assets, net
$ 481,042,370
$ (230,080) $ 48098129290
$ 41,230,254
$ (35,581,448) $ 486,461,096
Business -type capital asset activity prior period adjustment
of $0.23M is for Construction
in progress that was
incorrectly
classified as governmental -type activity.
Beg. Bal
Prior Period
Adj. Beg.
Ending Bal.
Busines s-Type Activities
1/1/2018
Adjustment
Balance
Additions
Deletions
12/31/2018
Capital assets, not being depreciated:
Land
$11,340,293
$ -
$11,340,293
$ -
$ -
$11,340,293
Construction in progress
830,817
226,627
1,057,444
619,625
(1,615,918)
61,151
Total capital assets, not being depreciated:
12,171,110
226,627
129397,737
6199625
(1,615,918)
11,4019444
Capital assets, being depreciated
Buildings
4,505,348
-
4,505,348
-
4,505,348
Improvements other than buildings
3,916,934
39916,934
-
39916,934
Infrastructure
60,788,019
60,788,019
2,031,326
62,819,345
Machinery and equipment
198,794
198,794
-
198,794
Total capital assets, being depreciated:
69,409,095
-
699409,095
2,031,326
-
71,440,421
Less accunnilated depreciation for:
Buildings
(3,621,305)
(3,621,305)
(50,743)
(3,672,048)
Improvements other than buildings
(280,698)
(280,698)
(39,169)
(319,867)
Infrastructure
(15,697,269)
(15,697,269)
(607,885)
(16,305,154)
Machinery and equipment
(115,493)
(115,493)
(7,128)
(122,621)
Total accumulated depreciation:
(19,714,765)
(19,714,765)
(704,926)
(20,419,691)
Total assets being depreciated, net
499694,330
-
499694,330
1,3269400
-
51,0209730
Business Type activities capital assets, net
$ 61,865,440
$ 226,627
$ 62,092,067
$ 1,946,025
$ (1,615,918)
$ 62,422,174
NOTE 16 — LEASES
Operating Leases
Starting February 1, 2014, the City of Federal Way started leasing the office buildings for the downtown Police substation.
Total cost for the leases was $36,000 for the year ended December 31, 2018. The future minimum lease payment for the
downtown Police substation lease is as follows:
The lease of the substation expires December 31, 2020. This lease does not automatically renew.
Year Boling December 31, 2018
Amount
2019
36,000
2020
36,000
Total:
$ 72,000
NOTE 17 — SELF-INSURANCE
The City's unemployment insurance, where it has elected to become fully self -insured. Related premiums received by the
Unemployment Insurance Fund is used to reimburse the State Employment Security Department for unemployment benefits
paid to eligible individuals, and to establish reserves for the payment of estimated future unemployment claims liability. The
City is self -insured for unemployment compensation. The weekly payments to an employee range from $169 - $713
depending upon the wages earned. At December 31st, 2018 the City had $279,116 in reserve.
Unemployment compensation benefits
2017
2018
Unemployment reserve, Jan. 1st
$ 1,377,809 $
359,328
Unemployment compensation benefits
35,413
34
Unemployment compensation interest
3,924
3,757
Claim payments during the year
(57,818)
(84,004)
Operating Transfer to General Fund
(1,000,000)
-
Unemployment reserve, Dec. 31st
$ 359,328 $
279,116
The City's also elected to self -insure for medical. Related premiums are received by the Health Insurance Fund and are used
to reimburse weekly claims to the Group Health Corporation for medical benefits paid the eligible individuals, and establish
reserves for the payment of estimated future medical benefits claims liability. At December 3l't, 2018 the City had $2,940,232
in reserve.
Health Insurance benefits
2017
2018
Health Insurance reserve, Jan. 1st
$ 2,020,466
$ 2,550,138
Health Insurance benefits
4,238,581
4,284,099
Health Insurance Employee Contributions
216,562
209,633
Health Insurance COBRA Contributions
10,026
21,805
Health Insurance interest
13,247
31,992
Health Insurance Recovery -Stop Loss
306,963
482,308
Prescription Claim payments during the year
(461,723)
(876,391)
Medical Claim payments during the year
(2,944,877)
(2,747,675)
Insurance -Stop Loss
(464,184)
(642,805)
Other services and charges
(384,922)
(372,872)
Health Insurance reserve, Dec. 31st
$ 2,550,138
$ 2,940,232
NOTE 18 — ACCOUNTING AND REPORTING CHANGES
Requirements for GASB Statement 77 have been met for tax abatement disclosures. Due to confidential tax information we
cannot disclose the amount for exemptions on RCW 82.08.975 and 82.12.975 computer hardware, software, and peripherals.
NOTE 19 — SUBSEQUENT EVENT
At the April 16, 2019 council meeting the City Council decided to bond the City portion of the SCORE debt separately from
the SCORE entity. The City currently owes 12,891,600 in principal payments as of 12/31/2018.
Starting in 2020, Washington will be the fifth state in the nation to offer paid family and medical leave benefits to workers.
The program is funded by premiums paid by both employees and employers, and is administered by the Employment Security
Department (ESD). This insurance program will allow workers to take up to 12 weeks, as needed, when they welcome a new
child into their family, are struck by a serious illness or injury, need to take care of an ill or ailing relative and for certain
military -connected events. If workers experience multiple events in a given year, they may be eligible to receive up to 16
weeks, or up to 18 weeks if the employee experiences a serious health condition with a pregnancy that results in incapacity.
As directed by the Legislature, premium assessment began on January 1, 2019 and benefits can be taken starting January 1,
2020.
Page 79
REQUIRED SUPPLEMENTARY
INFORMATION
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability
PERS 1
As of June 30, 2018
Last 10 Fiscal Years*
2015
2016
2017
2018
Employer's proportion of the net pension liability
(asset)
% 0.110831%
0.114008%
0.114547%
0.115857%
Employer's proportionate share of the net pension
liability
$ 5,797,492
6,122,767
5,435,344
5,174,213
TOTAL
$ 5,797,492
6,122,767
5,435,344
5,174,213
Covered payroll
$ 12,744,440
13,650,352
14,496,336
15,317,923
Employer's proportionate share of the net pension
liability as a percentage of covered payroll
% 45.49%
44.85%
37.49%
33.78%
Plan fiduciary net position as a percentage of the
total pension liability
% 59.10%
57.03%
61.24%
63.22%
to Schedule:
loyer's covered payroll increased by $822K,
Eereased
but net pension liability
by $261K Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability
PERS 2 - 3
As of June 30, 2018
Last 10 Fiscal Years*
2015
2016
2017
2018
Employer's proportion of the net pension liability
(asset)
% 0.143122%
0.146079%
0.147025%
0.146710%
Employer's proportionate share of the net pension
liability
$ 5,113,831
7,354,962
5,108,416
2,504,943
TOTAL
$ 5,113,831
7,354,962
5,108,416
2,504,943
Covered payroll
$ 12,744,440
13,650,352
14,496,336
15,317,923
Employer's proportionate share of the net pension
liability as a percentage of covered payroll
% 40.13%
53.88%
35.24%
16.35%
Plan fiduciary net position as a percentage of the
total pension liability
% 89.20%
85.82%
90.97%
95.77%
to Schedule:
loyer's covered payroll increased by $822K,
Eeeased
but net pension liability
by $2.60 million. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability (Asset)
LEOFF 2
As of June 30, 2018
Last 10 Fiscal Years*
2015
2016
2017
2018
Employer's proportion of the net pension liability (asset) % 0.427847%
0.415772%
0.434711%
0.397656%
Employer's proportionate share of the net pension
liability (asset) $ (4,397,411)
(2,418,255)
(6,032,380)
(8,073,284)
LEOFF 2 - State's proportionate share of the net pension
liability (asset) associated with the employer $ (2,907,569)
(1,576,526)
(3,913,092)
(5,227,229)
TOTAL $ (7,304,980)
(3,994,781)
(9,945,472)
(13,300,513)
Covered payroll $ 12,477,707
12,625,740
13,610,662
13,157,989
Employer's proportionate share of the net pension
liability as a percentage of covered payroll %-35.24%
-19.15%
-44.32%
-61.36%
Plan fiduciary net position as a percentage of the total
pension liability % 111.67%
106.04%
113.36%
118.50%
Notes to Schedule:
* Employer's covered payroll decreased by $453K and net pension asset
increased by $2.OM. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contributions
PERS1
As of December 31, 2018
Last 10 Fiscal Years*
2015
2016
2017
2018
Statutorily or contractually required contributions
$ 584,359
663,133
745,500
792,384
Contributions in relation to the statutorily or contractually required
contributions $ (584,359)
(663,133)
(745,500)
(792,384)
Contribution deficiency (excess)
$ -
-
-
-
Covered Payroll
$ 13,309,318
13,887,684
15,134,713
15,255,177
Contributions as a percentage of covered payroll
% 4.39%
4.77%
4.93%
5.19%
Notes to Schedule:
* Employer's covered payroll increased by $120K. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contributions
PERS 2-3
As of December 31, 2018
Last 10 Fiscal Years*
2015
2016
2017
2018
Statutorily or contractually required contributions
$ 750,485
866,073
1,034,441
1,154,906
Contributions in relation to the statutorily or contractually required
contributions $ (750,485)
(866,073)
(1,034,441)
(1,154,906)
Contribution deficiency excess
$
Covered Payroll
$ 13,309,318
13,887,684
15,134,713
15,255,177
Contributions as a percentage of covered payroll
% 5.64%
6.24%
6.83%
7.57%
Notes to Schedule:
* Employer's covered payroll increased b $120K. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contributions
LEOFF2
As of December 31, 2018
Last 10 Fiscal Years*
2015
2016
2017
2018
Statutorily or contractually required contributions
$ 625,331
669,609
688,577
702,132
Contributions in relation to the statutorily or contractually required
contributions
$ (625,331)
(669,609)
(688,577)
(702,132)
Contribution deficiency (excess)
$ -
-
-
-
Covered Payroll
$ 12,382,722
13,274,725
13,365,190
13,373,925
Contributions as a percentage of covered payroll
% 5.05%
5.04%
5.15%
5.25%
Notes to Schedule:
* Employer's covered payroll increased by $9K Additional years information will be displayed as it becomes available.
Combining Statement — Nonmajor Governmental Funds' Description
For the Year Ended December 31, 2018
Special Revenue Funds
Special Revenue funds are used to account for the proceeds of revenue sources (other than special assessments, expendable
trusts or major capital projects) that are legally restricted to expenditures for specified purposes.
The Arterial Street Fund accounts for the receipt and expenditure of the State -levied motor vehicle fuel tax distributed to the
City in accordance with State R.C.W. 82.36.020. These revenues are to be used for the construction, improvement, chip
sealing, seal -coating, and repair of arterial highways and city streets, or for the payment of related municipal indebtedness.
The Solid Waste/Recycling Fund was established to account for special refuse collection fees used to manage the Solid
Waste and Recycling program.
The Special Contracts/Studies Fund accounts for receipts and disbursements related to special contracts and special projects
where completion will extend beyond the calendar year.
The Hotel/Motel Lodging Tax Fund was established to account for all lodging tax receipts and disbursements related to
tourism promotion and acquisition and/or operation of tourism -related facilities.
The Federal Way Community Center Fund was established to account for the operation of the community center. The fund
is supported by user fees and designated utility tax transfers.
The Traffic Safety Fund was established to account for the penalties and fines collected in criminal traffic violations and
those related to the operation of the Red Light Photo Enforcement Program. Funds collected for traffic safety shall be used
for, but not limited to prevention, education, and enforcement effectors related to traffic safety and compliance with traffic
control devices within the city, including maintenance and operation costs.
The Community Development Block Grant Fund accounts for the receipt and disbursement of federal grant revenue
received through the Department of Housing and Urban Development's Community Development Block Grant Program.
Separate subsidiary records are maintained to administer the individual projects accounted for in this fund.
The Path and Trails Reserve Fund was established in accordance with State law to accumulate unexpended proceeds of the
City's '/2% motor vehicle fuel tax receipts which are restricted in use to the construction and maintenance of paths and trails
within City right-of-way. In August 2013, King County voters approved a new $0.1877, six -year, inflation adjusted property
tax lid lift to expand park and recreation opportunities. Seven percent of the County levy proceeds will be distributed to
cities for acquisition and development of open space and natural lands and city trail projects that support connections to the
regional trail system.
Capital Proiects Funds
The Capital Project Funds account for the acquisition or construction of major capital facilities with the exception of those
facilities financed by proprietary and trust funds. The major sources of revenue for this fund are general obligation bond
proceeds, grants from other agencies, local taxes and contributions from other funds.
The Real Estate Excise Tax Fund was established to account for the City's real estate excise tax and the transfers to pay for
debt and capital projects.
The Downtown Redevelopment CIP Fund accounts for receipts of Local Infrastructure Financing Tool (LIFT), and
downtown redevelopment projects.
The City Facilities CIP Fund accounts for receipts and disbursements related to acquisition, design, construction and any
other related municipal facility and community/senior capital project expenditures.
The Parks CIP Fund was established to account for receipts and disbursements related to acquisition, design, construction
and any other related parks capital project expenditures.
The Capital Project Reserve Fund accounts for receipts and disbursements related to acquisition, design, construction and
any other related municipal facility and community/senior capital project expenditures.
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2018
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net):
Taxes
Accounts and contracts
Restricted Cash
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interf ind loans payable
Unearned revenue
TOTAL LIABILITIES
Fund Balance:
Restricted
Committed
TOTAL FUND BALANCES
Special
Capital
Revenue
Projects
Total
$ 6,302,025
$ 6,386,532
$ 12,688,557
1,103,095
1,167,974
2,271,069
-
729,777
729,777
46,388
14,403
60,791
526,773
172,338
699,111
7,978,280
8,471,024
16,449,304
733,035
114,088 847,123
184,113
- 184,113
32,873
37,852 70,725
29,710
- 29,710
224,818
- 224,818
121,618
- 121,618
1,326,167
151,940 1,478,107
2,879,932 7,443,696 10,323,628
3,772,181 875,388 4,647,569
6,652,113 8,319,084 14,971,197
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 7,978,280 $ 8,471,024 $ 16,449,304
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2018
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Arterial Solid Waste
Street Recycling
Special
Contracts/
Studies
Hotel/Motel
Lodging Tax
$ 26,366 $
141,323 $
580,822
$ 1,019,829
49,594
19,606
91,997
145,192
3,851
-
19,446
-
79,693
35,083
-
37,371
159,504
196,012
692,265
1,202,392
31,503 - 1,650
5,931 9,928 6,056 -
19,102 - - -
25,033 41,431 6,056 1,650
Fund Balance:
Restricted - - 686,209 1,200,742
Committed 134,471 154,581 - -
TOTAL FUND BALANCES 134,471 154,581 686,209 1,200,742
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 159,504 $ 196,012 $ 692,265 $ 1,202,392
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2018
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Fund Balance:
Restricted
Committed
TOTAL FUND BALANCES
Federal way
Community
Paths and
Community
Traffic
Development
Trails
Center
Safety
Block Grant
Reserve
Total
$ 1,644,070
$ 2,001,268
$ 41,219
$ 847,127
$ 6,302,025
272,462
409,132
-
115,112
1,103,095
23,091
-
-
-
46,388
59,643
-
314,226
757
526,773
1,999,266
2,410,400
355,445
962,996
7,978,280
190,914 424,501
84,467
76,793 76,788
8,617
13,771 -
-
29,710 -
-
- -
224,818
121,618 -
-
432,806 501,289
317,902
- 733,035
- 184,113
- 32,873
- 29,710
- 224,818
- 121,618
- 1,326,167
- - 29,985 962,996 2,879,932
1,566,460 1,909,111 7,558 - 3,772,181
1,566,460 1,909,111 37,543 962,996 6,652,113
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 1,999,266 $ 2,410,400 $ 355,445 $ 962,996 $ 7,978,280
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net):
Taxes
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
TOTAL LIABILITIES
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2018
Real Estate
Excise Tax
Downtown
City
Capital Project
Fund
Redevelopment
Facilities
Parks
Reserve
Total
$ 3,214,827
$ 1,179,949 $
240,453 $
1,444,591
$ 306,712
$ 6,386,532
625,170
116,518
42,326
330,152
53,808
1,167,974
729,735
42
-
-
-
729,777
-
-
14,403
14,403
-
172,338
-
172,338
4,569,732
1,468,847
282,779
1,789,146
360,520
8,471,024
114,088
114,088
37,852
37,852
151,940
151,940
Fund Balance:
Restricted 4,569,732 1,468,847
29,731
1,375,386
- 7,443,696
Committed - -
253,048
261,820
360,520 875,388
TOTAL FUND BALANCES 4,569,732 1,468,847
282,779
1,637,206
360,520 8,319,084
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 4,569,732 $ 1,468,847
$ 282,779
$ 1,789,146
$ 360,520 $ 8,471,024
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For Year Ended December 31, 2018
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
Special
Capital
Revenue
Projects
Total
$ 471,058
$ 4,253,500
$ 4,724,558
1,522,992
999,999
2,522,991
1,998,623
127,229
2,125,852
3,463,439
-
3,463,439
98,660
105,917
204,577
293,096
-
293,096
7,847,868
5,486,645
13,334,513
-
5,393
5,393
1,926,854
-
1,926,854
1,792,023
-
1,792,023
486,418
-
486,418
90,047
618
90,665
554,774
-
554,774
2,358,892
18,072
2,376,964
159,000
-
159,000
67,091
-
67,091
342,499
899,077
1,241,576
7,777,598
923,160
8,700,758
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 70,270 4,563,485 4,633,755
OTHER FINANCING SOURCES (USES)
Transfers in 1,592,474 300,000 1,892,474
Transfers out (2,091,660) (4,642,129) (6,733,789)
TOTAL OTHER FINANCING
SOURCES (USES) (499,186) (4,342,129) (4,841,315)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
Prior Period Adjustment
ADJUSTED FUND BALANCES -
BEGINNING
(428,916) 221,356 (207,560)
7,020,709 8,045,081 15,065,790
60,320 52,647 112,967
7,081,029 8,097,728 15,178,757
FUND BALANCES - ENDING $ 6,652,113 $ 8,319,084 $ 14,971,197
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2018
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel
Street
Recycling
Studies
Lodging Tax
REVENUES
Taxes $
-
$ -
$ -
$ 291,671
Intergovernmental
550,619
123,675
-
-
Service charges and fees
16,432
319,480
75,420
-
Fines and forfeitures
-
-
-
-
Interest
8,424
2,263
8,843
14,456
Other
-
-
-
-
TOTAL REVENUES
575,475
445,418
84,263
306,127
EXPENDITURES
Current:
Security of persons and property
-
-
-
-
Transportation
1,325,508
-
-
-
Physical environment
-
486,418
-
-
Economic environment
-
-
-
90,047
Health
-
-
-
-
Culture and recreation
-
-
-
-
Debt service:
Principal
-
-
-
-
Interest/fiscal charges/admin fees
-
-
-
-
Capital outlay
-
-
6,056
-
TOTAL EXPENDITURES
1,325,508
486,418
6,056
90,047
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(750,033)
(41,000)
78,207
216,080
OTHER FINANCING SOURCES (USES)
Transfers in
1,013,000
-
-
-
Transfers out (544,621)
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
468,379
-
-
-
NET CHANGE IN FUND BALANCES
(281,654)
(41,000)
78,207
216,080
FUND BALANCES - BEGINNING
372,721
195,581
608,002
967,746
Prior Period Adjustment
43,404
-
-
16,916
ADJUSTED FUND BALANCES -
BEGINNING
416,125
195,581
608,002
984,662
FUND BALANCES - ENDING $
134,471
$ 154,581
$ 686,209
$ 1,200,742
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2018
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Federal way Community Paths and
Community Traffic Development Trails
Center Safety Block Grant Reserve Total
$ - $ - $ - $ 179,387 $ 471,058
59,643 - 778,534 10,521 1,522,992
1,587,291 - - - 1,998,623
- 3,463,439 - - 3,463,439
23,906 29,226 - 11,542 98,660
293,096 - - - 293,096
1,963,936 3,492,665 778,534 201,450 7,847,868
1,926,854 - - 1,926,854
- 466,515 - - 1,792,023
- - - 486,418
- - - - 90,047
554,774 - 554,774
2,358,892 - - - 2,358,892
159,000 - 159,000
- - 67,091 - 67,091
115,144 221,299 - - 342,499
2,474,036 2,614,668 780,865 7,777,598
OVER (UNDER) EXPENDITURES (510,100) 877,997 (2,331) 201,450 70,270
OTHER FINANCING SOURCES (USES)
Transfers in 579,474 - - 1,592,474
Transfers out - (1,547,039) - - (2,091,660)
TOTAL OTHER FINANCING
SOURCES (USES) 579,474 (1,547,039) - - (499,186)
NET CHANGE IN FUND BALANCES 69,374 (669,042) (2,331) 201,450 (428,916)
FUND BALANCES - BEGINNING 1,497,086 2,578,153 39,874 761,546 7,020,709
- - - - 60,320
ADJUSTED FUND BALANCES -
BEGINNING 1,497,086 2,578,153 39,874 761,546 7,081,029
FUND BALANCES - ENDING $ 1,566,460 $ 1,909,111 $ 37,543 $ 962,996 $ 6,652,113
Page 91
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For Year Ended December 31, 2018
Real Estate
Excise Tax
Downtown
City
Capital Project
Fund
Redevelopment
Facilities
Parks
Reserve
Total
REVENUES
Taxes
$ 4,240,825
$ 12,675
$
$ -
$
$ 4,253,500
Intergovernmental
-
999,999
-
999,999
Service charges and fees
-
-
127,229
127,229
Interest
60,537
7,105
3,667
29,698
4,910
105,917
TOTAL REVENUES
4,301,362
1,019,779
3,667
156,927
4,910
5,486,645
EXPENDITURES
Current:
General government
-
5,393
-
-
-
5,393
Economic environment
-
618
-
618
Culture and recreation
-
-
18,072
18,072
Capital outlay
-
-
899,077
899,077
TOTAL EXPENDITURES
-
5,393
618
917,149
-
923,160
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
4,301,362
1,014,386
3,049
(760,222)
4,910
4,563,485
OTHER FINANCING SOURCES (USES)
Transfers in
-
-
-
300,000
-
300,000
Transfers out
(4,142,129)
(500,000)
-
(4,642,129)
TOTAL OTHER FINANCING
SOURCES (USES)
(4,142,129)
(500,000)
-
300,000
(4,342,129)
NET CHANGE IN FUND BALANCES
159,233
514,386
3,049
(460,222)
4,910
221,356
FUND BALANCES - BEGINNING
4,410,499
901,814
279,730
2,097,428
355,610
8,045,081
Prior Period Adjustment
-
52,647
-
-
-
52,647
ADJUSTED FUND BALANCES -
BEGINNING
4,410,499
954,461
279,730
2,097,428
355,610
8,097,728
FUND BALANCES - ENDING
$ 4,569,732
$ 1,468,847
$ 282,779
$ 1,637,206
$ 360,520
$ 8,319,084
Page 92
ARTERIAL STREET
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Intergovernmental $ 504,272 $ 504,272 $ 550,619 $ 46,347
Service charges and fees - - 16,432 16,432
Interest - - 8,424 8,424
TOTAL REVENUES 504,272 504,272 575,475 71,203
EXPENDITURES
Current:
Transportation 1,517,272 1,233,993 1,325,508 (91,515)
TOTAL EXPENDITURES 1,517,272 1,233,993 1,325,508 (91,515)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,013,000) (729,721) (750,033) (20,312)
OTHER FINANCING SOURCES (USES)
Transfers in 1,013,000 1,013,000 1,013,000 -
Transfers out - (556,000) (544,621) 11,379
TOTAL OTHER FINANCING
SOURCES (USES) 1,013,000 457,000 468,379 11,379
NET CHANGE IN FUND BALANCES
- (272,721)
(281,654)
(8,933)
FUND BALANCES - BEGINNING
100,000 372,721
372,721
-
Prior Period Adjustment
- -
43,404
43,404
ADJUSTED FUND BALANCES -
BEGINNING
100,000 372,721
416,125
43,404
FUND BALANCES - ENDING $
100,000 $ 100,000 $
134,471 $
34,471
Page 93
SOLID WASTE & RECYCLING
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 126,600
$ 126,600
$ 123,675
$ (2,925)
Service charges and fees
304,517
304,517
319,480
14,963
Interest
-
-
2,263
2,263
TOTAL REVENUES
431.117
431.117
445.418
14.301
EXPENDITURES
Current:
Physical environment 504,818 526,818 486,418 40,400
TOTAL EXPENDITURES 504,818 526,818 486,418 40,400
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (73,701) (95,701) (41,000) 54,701
NET CHANGE IN FUND BALANCES
(73,701)
(95,701)
(41,000) 54,701
FUND BALANCES - BEGINNING
103,348
195,581
195,581 -
FUND BALANCES - ENDING $
29,647 $
99,880 $
154,581 $ 54,701
SPECIAL CONTRACTS/STUDIES
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Service charges and fees $ - $ - $ 75,420 $ 75,420
Interest - - 8,843 8,843
TOTAL REVENUES - - 84,263 84,263
EXPENDITURES
Current:
Capital outlay - 467,073 6,056 461,017
TOTAL EXPENDITURES - 467,073 6,056 461,017
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - (467,073) 78,207 545,280
NET CHANGE IN FUND BALANCES - (467,073) 78,207 545,280
FUND BALANCES - BEGINNING 408,356 608,002 608,002 -
FUND BALANCES - ENDING $ 408,356 $ 140,929 $ 686,209 $ 545,280
Page 95
HOTEL/MOTEL LODGING TAX
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 225,000 $ 300,000
$ 291,671
$ (8,329)
Interest
700 5,200
14,456
9,256
TOTAL REVENUES
225,700 305,200
306,127
927
EXPENDITURES
Current:
Economic environment 224,700 224,700 90,047 134,653
TOTAL EXPENDITURES 224,700 224,700 90,047 134,653
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
1,000
80,500
216,080
135,580
NET CHANGE IN FUND BALANCES
1,000
80,500
216,080
135,580
FUND BALANCES - BEGINNING
502,765
967,746
967,746
-
Prior Period Adjustment
-
-
16,916
16,916
ADJUSTED FUND BALANCES -
BEGINNING
502,765
967,746
984,662
16,916
FUND BALANCES - ENDING $ 503,765 $ 1,048,246 $ 1,200,742 $ 152,496
FEDERAL WAY COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
REVENUES
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
$ -
$ -
$ 59,643
$ 59,643
1,516,500
1,516,500
1,587,291
70,791
-
10,000
23,906
13,906
290,000
300,000
293,096
(6,904)
1,806,500
1,826,500
1,963,936
137,436
2,254,429 2,344,429 2,358,892 (14,463)
- - 115,144 (115,144)
2,254,429 2,344,429 2,474,036 (129,607)
(447,929) (517,929) (510,100) 7,829
447,930 447,930 579,474 131,544
447,930 447,930 579,474 131,544
1 (69,999) 69,374 139,373
1,500,000 1,497,086 1,497,086 -
FUND BALANCES - ENDING $ 1,500,001 $ 1,427,087 $ 1,566,460 $ 139,373
Page 97
TRAFFIC SAFETY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Fines and forfeitures
$ 3,137,000 $ 3,487,000
$ 3,463,439
$ (23,561)
Interest
3,500 13,500
29,226
15,726
TOTAL REVENUES
3,140,500 3,500,500
3,492,665
(7,835)
EXPENDITURES
Current:
Security of persons and property
1,799,882
2,409,882
1,926,854
483,028
Transportation
496,561
611,166
466,515
144,651
Capital outlay
-
-
221,299
(221,299)
TOTAL EXPENDITURES
2,296,443
3,021,048
2,614,668
406,380
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
844,057
479,452
877,997
398,545
OTHER FINANCING SOURCES (USES)
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
(1,547,039) (1,547,039) (1,547,039) -
(1,547,039) (1,547,039) (1,547,039) -
(702,982) (1,067,587) (669,042) 398,545
2,202,984 2,578,153 2,578,153 -
$ 1,500,002 $ 1,510,566 $ 1,909,111 $ 398,545
COMMUNITY DEVELOPMENT BLOCK GRANT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
REVENUES
Intergovernmental
TOTAL REVENUES
EXPENDITURES
Current:
Health
Debt service:
Principal
Interest/fiscal charges/admin fees
TOTAL EXPENDITURES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 1,237,105 $ 1,237,105 $ 778,534 $ (458,571)
1,237,105 1,237,105 778,534 (458,571)
1,028,103 1,028,103 554,774 473,329
159,000 159,000 159,000 -
50,000 50,000 67,091 (17,091)
1,237,103 1,237,103 780,865 456,238
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 2 2 (2,331) (2,333)
NET CHANGE IN FUND BALANCES 2 2 (2,331) (2,333)
FUND BALANCES - BEGINNING - 39.874 39.874 -
FUND BALANCES - ENDING $ 2 $ 39,876 $ 37,543 $ (2,333)
PATH & TRAILS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
REVENUES
Taxes
Intergovernmental
Interest
TOTAL REVENUES
EXPENDITURES
Current:
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 160,000 $ 160,000 $ 179,387 $ 19,387
9,000 9,000 10,521 1,521
- - 11,542 11,542
169,000 169,000 201,450 32,450
169,000 169,000 201,450 32,450
169,000 169,000 201,450 32,450
722,356 761,546 761,546 -
$ 891,356 $ 930,546 $ 962,996 $ 32,450
Page100
,41k
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page 101
Budget and Actual — Debt Service Fund Description
For the Year Ended December 31, 2018
The Debt Service Fund accounts for the accumulation of resources for the payment of general obligation and special
assessment bond principal, interest and related costs. Revenues for this fund consist of transfers from Real Estate Excise Tax
Fund, transfers from the Utility Tax Fund, and/or other revenues designated by the City Council.
Page102
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2018
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts (Negative)
REVENUES
Interest
$ - $ 25,000
$ 61,643 $ 36,643
Other
934,389 934,390
- (934,390)
TOTAL REVENUES
934,389 959,390
61,643 (897,747)
EXPENDITURES
Current:
Debt service:
-
-
Principal
862,700
862,700
500,000
362,700
Interest/fiscal charges/admin fees
885,163
1,115,363
524,490
590,873
TOTAL EXPENDITURES
1,747,863
1,978,063
1,024,490
953,573
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(813,474)
(1,018,673)
(962,847)
55,826
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
813,473 813,473 813,473 -
- (1,000,000) (1,000,000) -
813,473 (186,527) (186,527) -
(1) (1,205,200) (1,149,374) 55,826
2,763,646 4,106,222 4,106,222 -
FUND BALANCES - ENDING $ 2,763,645 $ 2,901,022 $ 2,956,848 $ 55,826
Page103
Combining Statement — Internal Service Fund's Description
For the Year Ended December 31, 2018
Internal Service Funds
Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to
other departments or agencies of a government, or to other governments, on a cost -reimbursement basis.
The Risk Management Fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, and worker's compensation claims. Both risk control (to
minimize the losses that strike an organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is also currently recovering costs and building reserves
for general liability including property, casualty, errors and omissions and fidelity coverage.
The Information Systems Fund was established to account for all costs associated with data processing, telecommunications
and the Geographical Information System (GIS). This fund will own and depreciate all non-proprietary fund assets related to
these functions, and will charge equipment/software users for both maintenance/operating costs and equipment replacement
charges based on depreciation schedules.
The Support Services Fund will account for duplication, graphics and other general support services provided to departments
and funds throughout the City.
The Fleet and Equipment Fund accounts for the cost of maintaining City vehicles and other motorized equipment. Rates
charged to user departments are based on the full cost of maintaining equipment items, including the recovery of related
depreciation expense.
The Buildings and Furnishings Fund accounts for all costs associated with the operation and maintenance of specified City
buildings. City building facilities and furnishings will be owned by this Fund, and both maintenance/operating costs and
depreciation recovery will be charged City departments and funds.
The Health Insurance Fund accounts for all self -insuring for medical insurance. The premiums paid by the City's
medical benefit contributions and employee medical deductions reimburse the medical and pharmaceutical
reimbursements. Also, establish reserves for the payment of estimated future claims.
The Unemployment Insurance Fund is currently self -insuring State Unemployment Compensation. Related
premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability.
Page104
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2018
Risk
Information
Support
Fleet and
Management
Systems
Services
Equipment
ASSETS
Current Assets
Cash and Cash Equivalents
$ 1,629,211
$ 1,570,667
$ 203,886
$ 1,818,097
Prepaid items
-
-
5,000
-
Due from other governments
246,855
-
-
Interfund loans receivable
-
2,222,319
-
5,899,150
TOTAL CURRENT ASSETS
1,629,211
4,039,841
208,886
7,717,247
Noncurrent assets
Capital assets:
Building/structures
-
-
-
-
Machinery/furniture/equipment
6,449,962
280,719
11,815,505
Less accumulated depreciation
(4,798,585)
(115,523)
(7,593,363)
TOTAL NONCURRENT ASSETS
1,651,377
165,196
4,222,142
TOTAL ASSETS
1,629,211
5,691,218
374,082
11,939,389
DEFERRED OUTFLOWS RELATED TO
PENSIONS
-
61,580
-
2,003
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
33,733
228,241
9,818
89,054
TOTAL CURRENT LIABILITIES
33,733
228,241
9,818
89,054
Long-term liabilities
Compensated absences payable
57,991
-
Net Pension Liability
335,295
9,942
TOTAL LONG-TERM LIABILITIES
- 393,286
9,942
TOTAL LIABILITIES
33,733 621,527
9,818
98,996
DEFERRED INFLOWS RELATED TO
PENSIONS
126,859
-
3,762
NET POSITION
Net Investment in capital assets
- 1,651,377
165,196
4,222,142
Unrestricted
1,595,478 3,353,035
199,068
7,616,492
TOTAL NET POSITION
$ 1,595,478 $ 5,004,412
$ 364,264
$ 11,838,634
Page105
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2018
Buildings and
Self Health
Unemployment
Furnishings
Insurance
Insurance
TOTAL
ASSETS
Current Assets
Cash and Cash Equivalents
$ 3,054,061
$ 2,990,867
$ 286,755
$ 11,553,544
Prepaid items
-
-
-
5,000
Due from other governments
246,855
Interfund loans receivable
-
-
-
8,121,469
TOTAL CURRENT ASSETS
3,054,061
2,990,867
286,755
19,926,868
Noncurrent assets
Capital assets:
Building/structures
16,545,121
-
-
16,545,121
Machinery/furniture/equipment
-
18,546,186
Less accumulated depreciation
(11,177,753)
(23,685,224)
TOTAL NONCURRENT ASSETS
5,367,368
-
11,406,083
TOTAL ASSETS
8,421,429
2,990,867
286,755
31,332,951
DEFERRED OUTFLOWS RELATED TO
PENSIONS
8,776
-
-
72,359
LIABILITIES
Current Liabilities:
Vouchers/payroll payable 34,271 50,635 7,639 453,391
TOTAL CURRENT LIABILITIES 34,271 50,635 7,639 453,391
Long-term liabilities
Compensated absences payable
-
57,991
Net Pension Liability
53,187
398,424
TOTAL LONG-TERM LIABILITIES
53,187
456,415
TOTAL LIABILITIES
87,458 50,635 7,639
909,806
DEFERRED INFLOWS RELATED TO
PENSIONS
20,123
150,744
NET POSITION
Net Investment in capital assets
5,367,368 - -
11,406,083
Unrestricted
2,955,256 2,940,232 279,116
18,938,677
TOTAL NET POSITION
$ 8,322,624 $ 2,940,232 $ 279,116
$ 30,344,760
Page106
INTERNAL SERVICE FUNDS
COMBINING STATEMENT
OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2018
Risk
Information
Support
Fleet and
Management
Systems
Services
Equipment
OPERATING REVENUES:
Service charges and fees
$ 1,035,343
$ 2,147,817
$ 171,506
$ 1,945,220
Intergovernmental
-
235,471
-
-
Miscellaneous
113,003
1,632
2,030
TOTAL OPERATING REVENUES
1,148,346
2,384,920
171,506
1,947,250
OPERATING EXPENSES:
Personnel services
-
812,143
-
38,847
Materials and supplies
-
251,641
17,571
454,686
Services and charges
69,410
646,194
97,158
374,878
Intergovernmental
-
135,213
-
565
Insurance
502,280
-
-
Claims
571,554
-
-
-
Depreciation
-
358,113
51,786
893,808
TOTAL OPERATING EXPENSES
1,143,244
2,203,304
166,515
1,762,784
OPERATING INCOME (LOSS)
5,102
181,616
4,991
184,466
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
15,396
Interest income
16,787
41,067
2,213
77,264
TOTAL NON -OPERATING REVENUES (EXPENSES) 16,787
41,067
2,213
92,660
INCOME (LOSS) BEFORE TRANSFERS
21,889
222,683
7,204
277,126
Capital contributions
-
172,202
-
318,865
Transfers in
Transfers out
CHANGE IN NET POSITION
NET POSITION - BEGINNING
ADJUSTED NET POSITION - BEGINNING
NET POSITION - ENDING
21,889
394,885
7,204
595,991
1,573,589
4,609,527
357,060
11,242,643
1,573,589
4,609,527
357,060
11,242,643
$ 1,595,478
$ 5,004,412 $
364,264
$ 11,838,634
Page107
INTERNAL SERVICE FUNDS
COMBINING STATEMENT
OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2018
Buildings and
Self Health
Unemployment
Furnishings
Insurance
Insurance
TOTAL
OPERATING REVENUES:
Service charges and fees
$ 489,696 $
4,997,846
$ 36
$ 10,787,464
Intergovernmental
-
-
-
235,471
Miscellaneous
32,761
149,426
TOTAL OPERATING REVENUES
522,457
4,997,846
36
11,172,361
OPERATING EXPENSES:
Personnel services
144,252
-
-
995,242
Materials and supplies
36,697
-
-
760,595
Services and charges
349,920
4,638,124
84,004
6,259,688
Intergovernmental
-
1,620
-
137,398
Insurance
-
502,280
Claims
-
571,554
Depreciation
815,253
2,118,960
TOTAL OPERATING EXPENSES
1,346,122
4,639,744
84,004
11,345,717
OPERATING INCOME (LOSS)
(823,665)
358,102
(83,968)
(173,356)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
15,396
Interest income
29,646
31,992
3,757
202,726
TOTAL NON -OPERATING REVENUES (EXPENSES) 29,646
31,992
3,757
218,122
INCOME (LOSS) BEFORE TRANSFERS
(794,019)
390,094
(80,211)
44,766
Capital contributions
-
-
491,067
Transfers in
500,000
500,000
Transfers out
-
-
CHANGE IN NET POSITION
NET POSITION - BEGINNING
ADJUSTED NET POSITION - BEGINNING
NET POSITION - ENDING
(294,019)
390,094
(80,211)
1,035,833
8,616,643
2,550,138
359,327
29,308,927
8,616,643
2,550,138
359,327
29,308,927
$ 8,322,624
$ 2,940,232
$ 279,116
$ 30,344,760
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Increases/(decrease)in depreciation expense
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pensions
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital asset.
Risk Information Support Fleet and
Management Systems Services Equipment
$ 1,035,343
$ 2,147,817 $ 171,506
$ 1,945,220
(571,554)
- -
-
(51,852)
(777,774) (114,470)
(809,731)
-
(903,642) -
(52,145)
(502,280)
(135,213) -
-
113,358
1,629 -
2,030
23,015
332,817 57,036
1,085,374
- (2,579,390) (36,625) (1,329,040)
15,396
- (2,579,390) (36,625) (1,313,644)
16,787 41,067 2,213 77,264
16,787 41,067 2,213 77,264
39,802 (2,205,506) 22,624 (151,006)
1,589,409 3,776,173 181,262 1,969,103
1,629,211 1,570,667 203,886 1,818,097
5,102 181,616 4,991 184,466
- 358,113 51,786
893,808
- (246,855) -
-
- 18,783 -
2,065
17,558 131,444 259
20,395
- (1,036) -
-
- (155,462)
(15,022)
- 46,214 -
(338)
17,913 151,201 52,045
900,908
$ 23,015 $ 332,817 $ 57,036 $ 1,085,374
$ - $ 172,202 $ - $ 318,865
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Increases/(decrease)in depreciation expense
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pensions
Increases/(decrease) in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assetq
Page109
Buildings and Health Unemployment
Furnishings Insurance Insurance TOTAL
$ 489,696
$ 4,997,846 $
36 $ 10,787,464
-
-
- (571,554)
(379,648)
(4,645,763)
(121,648) (6,900,886)
(138,025)
-
- (1,093,812)
-
(1,620)
- (639,113)
32,760
249,761
- 399,537
4,783
600,223
(121,612) 1,981,637
500,000 - - 500,000
500,000 - - 500,000
- - - (3,945,055)
15,396
- - - (3,929,659)
29,646 31,992 3,757 202,726
29,646 31,992 3,757 202,726
534,429 632,215 (117,855) (1,245,296)
2,519,632 2,358,652 404,610 12,798,841
3,054,061 2,990,867 286,755 11,553,544
(823,665) 358,102 (83,968) (173,356)
815,253 -
- 2,118,960
- -
- (246,855)
56 -
- 20,904
6,969 (7,638)
(37,644) 131,343
- -
- (1,036)
(4,478) -
- (174,962)
10,648 -
- 56,524
828,448 242,121
(37,644) 2,154,993
$ 4,783 $ 600,223 $ (121,612) $ 1,981,637
$ 491,067
Page110
,41k
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page111
SUPPLEMENTAL INFORMATION
Page112
MCAG NO. 0711
SCHEDULE 15
CITY OF FEDERAL WAY, WASHINGTON
SCHEDULE OF STATE FINANCIAL ASSISTANCE
For Year Ended December 31, 2018
State Agency
Pass- Thru Agency (if applicable)
Other I.D./
Current Year
Program Title
BARS Account
Grant #
Expenditures
Department of Commerce
LED Street Light Conversion
306-4400-208-334-04-020
17-96608-240
90,794
Safe City
502-0000-046-334-04-020
18-96616-060
209,440
SUBTOTAL DEPARTMENT OF COMMERCE
300,234
Washington Office of Sheriffs and Police Chiefs
WA Auto Theft Prevention Authority Grant
001-0000-090-334-06-090
17-19 WATPA GG-PSATT
140,766
SUBTOTAL WASHINGTON OFFICE OF SHERIFFS AND POLICE CHIEFS
140,766
State Department of Ecology
Shoreline Grant
001-0000-073-334-03-010
SEASM P-1 719-FEDWAY-0033
3,943
Local Solid Waste Financial Assistnace
106-0000-000-334-03-010
W2RLSWFA-1719-FEDWAY-00097
34,721
Stormwater Capacity Grant 2017-2019
401-0000-000-334-03-010
WQSWCAP-1719-FEDWAY-00047
15,622
SUBTOTAL STATE DEPARTMENT OF ECOLOGY
54,286
State Department of Transportation
Commute Trip Reduction
101-0000-000-334-03-060
GCB2157
16,823
S 356th Street Improvements (SR99 to SR161)
306-4400-157-334-03-080
8-1-113(012)-1
329,656
SR 99 HOV Lanes Phase V
306-4400-165-334-03-080
8-1-113(011)-1
1,965,435
SR 509:S Dash Point Road
306-4400-212-334-03-080
P-P-113(P01)-1
6,975
21st Ave S S 314th St - S 316th St Grand Staircase
306-4400-201-334-03-060
KSC-TR-0411
38,969
SUBTOTAL STATE DEPARTMENT OF TRANSPORTATION
2,357,858
State Department of Natural Resources
WA DNR RSRC Cleanup
001-0000-090-334-02-030
KI17-015
1,694
SUBTOTAL STATE DEPARTMENT OF NATURAL RESOURCES
1,694
Office of the Secretary of State
Archives & Records Management
502-0000-046-334-00-030
6-6247
26,031
SUBTOTAL OFFICE OF THE SECRETARY OF STATE
26,031
TOTAL STATE ASSISTANCE:
2 880 869
Page113
MCAG NO. 0711
SCHEDULE 16
CITY OF FEDERAL
WAY, WASHINGTON
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For Year
Ended December
31, 2018
Federal Agency
From
From
Passed
Pass- Thru Agency (if applicable)
CFDA
Other
Pass -Through
Direct
Total
through to
Federal Program Name
BARS Account
#
I.D. #
Awards
Awards
Expenditures
Subrecipients
US Department of Housing and Urban Development Office of Community
Planning and Development
Community Development Block Grants/Entitlement Grants
119-7300-801-331-14-218
14.218
801 B-18-MC-53-0015
-
5,778
5,778
5,778
Community Development Block Grants/Entitlement Grants
119-7300-803-331-14-218
14.218
803 B-14-MC-53-0015
-
152,729
152,729
149,001
Community Development Block Grants/Entitlement Grants
119-7300-951-331-14-218
14.218
951 B-18-MC-53-0015
-
76,000
76,000
-
Community Development Block Grants/Entitlement Grants
119-7300-956-331-14-218
14.218
956 B-18-MC-53-0015
-
6,934
6,934
6,934
Community Development Block Grants/Entitlement Grants
119-7300-961-331-14-218
14.218
961 B-18-MC-53-0015
-
92,021
92,021
-
Community Development Block Grants/Entitlement Grants
119-7300-966-331-14-218
14.218
966 B-18-MC-53-0015
-
35,246
35,246
-
Community Development Block Grants/Entitlement Grants
119-7300-967-331-14-218
14.218
967 B-18-MC-53-0015
-
22,882
22,882
22,882
Community Development Block Grants/Entitlement Grants
119-7300-987-331-14-218
14.218
987 B-18-MC-53-0015
-
10,400
10,400
10,400
Community Development Block Grants/Entitlement Grants
119-7300-900-331-14-218
14.218
900 B-18-MC-53-0015
-
176,700
176,700
-
Community Development Block Grants/Entitlement Grants
119-7300-900-331-14-218
14.218
900 B-17-MC-53-0015
-
47,061
47,061
-
Community Development Block Grants/Entitlement Grants
119-7300-994-331-14-218
14.218
994 B-18-MC-53-0015
-
87,000
87,000
87,000
Community Development Block Grants/Entitlement Grants
119-7300-996-331-14-218
14.218
996 B-18-MC-53-0015
-
14,677
14,677
-
Community Development Block Grants/Entitlement Grants
119-7300-996-331-14-218
14.218
996 B-14-MC-53-0015
-
40,707
40,707
-
Community Development Block Grants/Entitlement Grants
119-7300-997-331-14-218
14.218
997 B-18-MC-53-0015
10,400
10,400
10,400
SUBTOTAL CFDA 14.218 Entitlement Grants Cluster
REFER TO NOTES 13
778,535
778,535
292,395
US Department of Justice Bureau of Justice Assistance
Bulletproof Vest Partnership Program
001-0000-090-331-16-607
16.607
BPV
13,934
13,934
SUBTOTAL CFDA 16.607
REFER TO NOTES 1-3
13,934
13,934
US Department of Justice Bureau of Justice Assistance
Pass-thru City of Seattle
Edward Byrne Memorial Justice Assistance Grant Program
00 1 -0000-090-333-16-738
16.738
2015-DJ-BX-0552
11,377
-
11,377
-
Edward Byrne Memorial Justice Assistance Grant Program
00 1 -0000-090-333-16-738
16.738
2016-DJ-BX-0138
20,052
20,052
Pass-thru Washington State Patrol
Mari'auna Eradication
001-0000-090-333-16-000
16..U01
2018-124
9,206
9,206
SUBTOTAL CFDA 16.738
REFER TO NOTES 1-3
40,635
40,635
US Department of Justice Office of Community Oriented Policing Services
Public Safety Partnership and Community Policing Grants
001-0000-090-331-16-710
16.710
#2017UMWX0104
145,862
145,862
SUBTOTAL CFDA 16.710
REFER TO NOTES 13
145,862
145,862
US Department of Transportation National Highway Traffic Safety Administration
Pass-thru Washington Traffic Safety Commission
State and Community Highway Safety
00 1 -0000-090-333-20-600
20.600
DHGN
24,864
24,864
SUBTOTAL CFDA 20.600 Highway Safety Cluster
REFER TO NOTES 1-3
24,864
24,864
US Department of Transportation Federal Highway Administration
Pass-thru Washington State DOT
Highway Planning and Construction
306-4400-193-333-20-050
20.205
CM-1001(004)
6,897
-
6,897
-
Highway Planning and Construction
306-4400-202-333-20-050
20.205
HSIP-0005(464)
120,018
-
120,018
-
Highway Planning and Construction
306-4400-209-333-20-050
20.205
NHPP-1008(004)
560,482
-
560,482
-
Highway Planning and Construction
306-4400-210-333-20-050
20.205
NHPP-1013(005)
622,432
-
622,432
Highway Planning and Construction
306-4400-211-333-20-050
20.205
HSIP-1031 005
423,565
423,565
SUBTOTAL CFDA 20.205 Highway Planning and Construction Cluster
REFER TO NOTES 1-3
1,733,394
1,733,394
US Department of Homeland Security
Pass-thru Military Department
Emergency Management Performance Grants
101-0000-000-333-97-042
97.042
n/a
37,500
37,500
SUBTOTAL CFDA 97.042
REFER TO NOTES 1-3
37,500
37,500
TOTAL FEDERAL ASSISTANCE:
1,836,393
938,331
2,774,724
292,395
Page114
ote 1.-Basis of Accounting
ie Schedule of Financial Assistance is prepared on the same basis of accounting as the City of Federal Way's financial statements. The City uses the modified accrual basis of accounting, which is the basis
iapted to governmental fund -type measurement focus. All grants reported on this schedule have been accounted for in governmental fund types. Grant revenues are determined to be earned and available at
e time related expenditures are incurred. For this reason, grant revenues to be received as reimbursement for expenditures incurred in the current year are also recognized as revenue in that year.
ote 2: Program Costs
is amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the City of Federal Way's portion, are more than shown. Such
cpenditures are recognized following, as applicable, either the cost principles in the OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or
e limited as to reimbursement.
ote 3: Indirect Cost Rate
is City of Federal Way did not use the new 10 % de minimis indirect cost rate as covered in 200.414 Indirect (F&A) costs,and is currently only charging direct costs to grants received.
ote 4: Federal Loans
is City of Federal Way was approved by the US Department of Housing and Urban Development Office of Community Planning and Development to receive a loan totaling $3,030,000 to finance the Performing Arts
Event Center economic development Droiect. Both the current and prior vear loans are reported on the Citv of Federal Wav's Schedule of Liabilities.
Page115
CAPITAL ASSETS USED IN THE
OPERATION
OF GOVERNMENTAL FUNDS
Page116
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
December 31, 2018
GOVERNMENTAL FUNDS CAPITAL ASSETS
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS
INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY SOURCE:
General Fund
Special Revenue Funds
Capital Project Funds
Donations
TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS
2018 2017
$ 283,651,519
$280,152,613
56,233,072
23,447,416
26,510,478
26,510,478
792,192
792,192
184,065,345
179,967,577
29,376,231
56,070,165
580,628,837 566,940,441
125,244, 871
125,244, 871
252,375,395
252,375,395
128,743,225
128,427,658
74,265,346
60,892,517
$ 580,628,837 $ 566,940,441
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net assets.
Page117
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2018
Improvements
Machinery
Construction
Other than
and
in
Total
Total
Function and Activity
Land
Buildings
Buildings
Equipment
Infrastructure
Progress
2018
2017
GENERAL GOVERNMENT
Miscellaneous general government
$ 26,955,433
$ 32,785,656
$ 19,973
$
$ 6,139,001
$
$ 65,900,063
$63,238,043
Total General Government:
26,955,433
32,785,656
19,973
6,139,001
65,900,063
63,238,043
CULTURE AND RECREATION
Culture and Recreation
113,723,537
23,447,416
26,490,505
792,192
94,474,128
1,285,561
260,213,339
259,505,443
Total Culture and Recreation:
113,723,537
23,447,416
26,490,505
792,192
94,474,128
1,285,561
260,213,339
259,505,443
TRANSPORTATION
Streets and Traffic
142,972,549
-
-
-
83,452,216
28,090,670
254,515,435
244,196,955
Total Transportation:
142,972,549
83,452,216
28,090,670
254,515,435
244,196,955
Total General Fixed Asset by Function: $ 283,651,519 $ 56,233,072 $ 26,510,478 $ 792,192 $ 184,065,345 $ 29,376,231 $ 580,628,837 $ 566,940,441
0
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to governmental
funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally,
the capital assets of the internal service funds are included as governmental activities in the statement of net assets.
Page118
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2018
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
CULTURE AND RECREATION
TOTAL CULTURE AND RECREATION
TRANSPORTATION
Streets and traffic
TOTAL TRANSPORTATION
TOTAL GENERAL FIXED ASSETS
Governmental
Funds
Capital Assets
1/1/2018 Additions Deductions
Governmental
Funds
Capital Assets
12/31/2018
$63,238,043 $ 34,978,315 $ 32,316,295 $65,900,063
63,238,043 34,978,315 32,316,295 65,900,063
259,505,443 899,077 191,181 260,213,339
259,505,443 899,077 191,181 260,213,339
244,196,955 13,392,452 3,073,972 254,515,435
244,196,955 13,392,452 3,073,972 254,515,435
$ 566,940,441 $ 49,269,844 $ 35,581,448 $ 580,628,837
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net assets.
Page119
Statistical Section
The statistical section presents detailed information as a context for understanding what the information in the financial
statements and note disclosures say about the City's overall financial health. The following are the five categories of
information presented in this section.
Financial Trends — These schedules contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity — These schedules contain information to help the reader assess the City's most significant local revenue
sources, property tax and sales tax.
Debt Capacity — These schedules present information to help the reader assess the affordability of the City's current levels
of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information — These schedules offer demographic and economic indicators to help the reader
understand the environment within which the City's financial activities take place.
Operating Information — These schedules contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the city provides and the activities it performs.
Page120
NET POSITION BY COMPONENT
Last Ten Fiscal Years
2009
2010
2011
2012
2013
2014
2015 2016 2017 2018
Governmental activities
Net investment in capital assets
$ 442,704,401
465,671,345
470,074,905
470,597,776
468,628,412
466,078,036
424,245,625
440,815:201
461,491:598
467610,817
Restricted
27,476,530
17,442,323
23,941,601
22,847,077
22,594,884
17,391,272
20,193,214
21,372596
20,412211
20:916,203
Unrestricted
44 282,822
44,613 406
38 602,445
45,027 323
48 829,641
57,837 173
46 012,847
42 575 521
36 393 318
41,205 463
Total governmental activities net positio
514,463,753 527,727,074 532,618,951 538,472,176 540,052,936 541,306,481 490,451,686 504,763,318 518,297,127 529,732,483
Business -type activities
Net investment in capital assets
50,578,649
50,563,097
50,052,887
50,280,880
50,620,091
50,299,229
58,998,176
59,059,646
61,673,201
62,326,054
Restricted
16,366
9,411
18,831
26,496
20,559
20,311
15,906
18,438
33,440
39,867
Unrestricted
5,115,275
1 5,015 367
5,398,786
5,968 302
6,577,269
7,219 403
5,814,364
5,142 741
5,791,413
5,779 784
Total business -type activities net positio
55,710,290 55,587,875 55,470,504 56,275,678 57,217,919 57,538,943 64,828,446 64,220,825 67,498,054 68,145,705
Primary government
Net investment in capital assets
493,283,050
516,234,442
520,127,792
520,878,656
519,248,503
516,377,265
483,243,801
499,874,847
523,164,799
529,936,871
Restricted
27,492,896
17,451,734
23,960,432
22,873,573
22,615,443
17,411,583
20,209,120
21,391,034
20,445,651
20,956,070
Unrestricted
49 398,097
49,628 773
44,001,231
50,995 625
55 406,910
65,056 576
51 827,211
47,718,262
42,184,731
46,985 247
Total primary government net assets 570,174,043 583,314,949 588,089,455 594,747,853 597,270,856 598,845,424 555,280,132 568,984,143 585,795,181 597,878,188
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Page 121
CHANGES IN NET POSITION
Last Ten Fiscal Years
Expenses
Governmental activities:
General government
$4,566,457
$ 4,865,827
$ 4,448,449
$ 4,300,691
$ 4,575,614
$ 4,633,942
$4,743,932
$4,544,037
$4,179,619
$ 4,457,083
Security ofpersons and property
26,341,614
26,842,240
27,222,584
27,604,936
27,894,695
29,703,386
32,017,617
36,018,643
36,632,272
35,513,749
Transportation
9,448,397
9,781,800
13,539,598
9,946,776
9,675,727
11,434,659
13,070,260
12,920,893
13,681,482
15,227,484
Physical environment
450,914
451,470
424,466
415,935
490,916
443,127
476,570
469,237
415,771
487,104
Economic environment
3,560,620
3,175,005
2,782,435
2,645,478
2,191,487
2,785,807
2,973,437
3,206,414
4,074,379
4,739,077
Health and human svcs
776,854
767,108
690,643
754,727
1,683,449
1,056,802
1,618,759
1,501,057
1,714,311
1,432,259
Culture and recreation
8,089,242
8,073,804
8,105,578
8,081,401
8,418,920
8,376,205
8,959,555
9,373,278
9,329,314
9,280,828
Interest on long-term debt
811,124
685,214
614,571
602,572
1,779,833
1,010,406
461,763
433,729
502,721
542,802
Total governmental activities expenses
54,045,222
54,642,468
57,828,324
54,352,517
56,710,640
59,444,335
64 21893
68,467,288
70,529,869
71680 386
Business -type activities:
Surface Water Mgmt
3,345,027
3,384,352
3,527,590
3,272,514
3,234,742
3,653,999
4,093,534
4,408,225
4,385,355
4,620,161
Dumas Bay Center
984,103
849,176
890,738
873,144
844,623
945,705
1,250,161
1,104,971
1,179,967
921,839
Total business -type activities expenses
4,329,130
4,233,528
4,418,328
4,145,658
4,079,365
4,599,703
5,343,695
5,513,196
5,565,322
5,542,000
Total primary government expenses
58,374,352
58,875,996
62,246,652
58 498175
60,790,005
64,044,038
69,665,588
73,980,484
76 095191
77,222386
Program Revenues
Governmental activities:
Charges for services
General Government
$873,258
975,515
816,140
924,966
1,983,033
2,118,896
1,994,674
2,449,406
3,155,863
3,429,034
Security of Persons & Property
5,037,388
5,381,407
4,985,320
5,937,100
5,022,896
4,637,071
5,295,641
5,701,083
6,014,477
5,897,781
Transportation
1,806,846
1,961,083
2,484,058
2,139,292
577,489
1,804,199
1,362,118
1,565,140
2,886,690
3,322,357
Physical Environment
86,230
90,512
77,875
89,457
299,337
305,742
302,083
304,294
314,842
319,480
Economic Environment
680,908
636,534
510,483
568,973
2,201,375
3,059,772
2,698,841
1,766,106
2,171,579
2,806,982
Health
148,579
153,792
126,710
162,322
-
-
-
-
-
-
Culture &Recreation
1,546,931
1,618,659
1,487,099
1,738,098
2,431,603
2,476,383
2,475,852
2,424,129
2,569,962
2,669,174
Operating grants and contributions
2,172,168
9,718,920
4,597,981
5,367,163
6,007,682
5,410,098
6,544,176
5,638,756
6,238,698
6,099,833
Capital grants and contributions
8,452,149
9,044,477
9,716,551
5,225,265
3,892,651
5,632,549
4,508,428
15,863,183
14,864,266
8,549,593
Total governmental activities program revenue
20,804,457
29,580,898
24,802,216
22,152,636
22,416,065
25,444,710
25181813
35,712,097
38,216,377
33,094,234
Business -type activities:
Charges for services
4,183,012
4,246,235
4,020,144
4,222,726
4,096,751
4,174,613
4,662,995
4,900,530
4,997,202
5,035,591
Operating grants and contributions
-
-
265,660
576,182
774,436
177,518
17,108
68,970
53,282
48,504
Capital grants and contributions
430,090
328,130
790,033
1,078,904
622735
Total business -type activities program revenue:
4,183,012
4,246,235
4,285,804
4,798,908
4,871,187
4,782,221
5,008,233
5,759,533
6,129,388
5,706,830
24,987,469
33,827,133
29,088,020
26,951,544
27,287,252
30,226,931
30,190,046
41,471,630
44,345,765
38,801,064
Net(Expense)/Revenue
Governmental activities
(33,240,765)
(25,061,570)
(33,026,108)
(32,199,881)
(34,294,574)
(33,999,625)
(39,140,080)
(32,755,191)
(32,313,492)
(38,586,152)
Business -type activities
(146,118)
12,707
(132,524)
653,250
791,822
182,517
(335,462)
246,337
564,066
164,830
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Sales tax
10,583,298
10,708,951
10,858,381
10,534,147
11,346,338
12,173,281
13,297,086
14,222,497
14,199,460
14,731,318
Local Criminal Justice Sales Tax
1,743,893
1,701,120
1,795,971
1,864,991
1,992,667
2,138,406
2,319,124
2,499,527
2,616,306
2,934,354
Utility tax
13,549,472
12,890,310
13,068,510
13,083,179
12,584,293
12,028,878
11,796,550
11,902,866
12,425,975
11,719,589
Property tax
9,653,537
9,609,740
9,867,614
10,052,109
10,152,114
10,349,905
10,460,136
10,539,623
10,718,060
10,937,481
Real estate excise tax
1,428,985
1,403,361
1,560,395
1,507,313
2,034,033
2,062,722
3,031,159
5,265,138
4,226,344
4,240,825
Gambling Tax
1,127,203
493,486
511,005
114,443
178,696
176,068
177,807
190,051
210,029
229,524
Hotel/MotelTax
154,148
149,058
185,289
193,344
208,839
231,828
266,053
283,220
301,603
291,671
Admissions Tax
-
-
-
-
-
-
-
-
547,229
867,169
Leasehold tax
4,999
5,757
6,259
5,820
5,989
6,693
6,104
3,784
4,218
4,618
Other
2,020,751
1,210,341
1,061,026
838,259
868,261
1,145,798
2,052,748
1,526,995
3,693,915
2,405,133
Gain on sale of capital assets
-
-
-
-
-
-
-
-
142,935
-
Transfers
(200,907)
152,768
(113,000)
(140,500)
(137,419)
(116,000)
(17,959)
633,124
(942,000)
(123,502)
Total governmental activities
40,065,379
38,324,892
38,801,450
38,053,106
39,233,811
40,197,580
43,388,808
47,066,825
48,144,074
48,238,180
Business -type activities:
Other
46,736
17,646
12,405
11,424
13,000
22,507
24,917
45,405
60,544
132,692
Transfers
200,907
(152,768)
113,000
140,500
137,419
116,000
17,959
(633,124)
942,000
123,502
Total business -type activities
247,643
135,122
125,405
151,924
150,419
138,507
42,876
587,719
1,002,544
256,194
Total primary government
$40,313,022
$ 38,189,770
$ 38,926,855
$ 38,205,030
$ 39,384,230
$ 40,336,087
$ 43,431,684
$ 46,479,106
$ 49,146,618
$ 48,494,374
Change in Net Position
Governmental activities
$ 6,824,613
$ 13,263,321
$ 5,775,342
$ 5,853,224
$ 4,939,237
$ 6,197,955
$ 4,248,728
$14,311,632
$15,830,582
$ 9,652,028
Business -type activities
101,525
(122,415)
(7,119)
805,174
942,241
321,025
(292,586)
(341,384)
1,566,611
421,024
Prior Period Adjustment
(2,168,769)
-
(3,358,477)
(4,944,409)
(37,035,737)
(266,237)
(586,155)
2,009,955
Net Effect - Change in Accounting for Pensions
10,485,698
Total primary government
$ 4,757,370
$ 13,140,907
$ 5,768,223
$ 6,658,398
$ 2,523,001
$ 1,574,570
$(43,565,293) $ 13,704,011
$ 16,811,038
$ 12,083,007
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Page122
GOVERNMENT -WIDE REVENUES BY SOURCE AND EXPENSES BY FUNCTION
Last Ten Fiscal Years
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Pro ram Revenues
Charges for Services
$ 14,363,151
15,063,736
14,507,828
15,782,934
16,612,484
18,576,675
18,792,204
19,110,688
22,110,615
23,480,399
Operating Grants and Contributions
2,172,168
9,718,920
4,863,641
5,943,345
6,782,118
5,587,616
6,561,284
5,707,725
6,291,980
6,148,337
Capital Grants and Contributions
8,452,149
9,044,477
9,716,551
5,225,265
3,892,651
6,062,639
4,836,558
16,653,215
15,943,170
9,172,328
General revenues
Sales tax
10,583,298
10,708,951
10,858,381
10,534,147
11,346,338
12,173,281
13,297,086
14,222,497
14,199,460
14,731,318
Local Criminal Justice Sales Tax
1,743,893
1,701,120
11795,971
1,864,991
1,992,667
2,138,406
2,319,124
2,499,527
2,616,306
2,934,354
Utility tax
13,549,472
12,890,310
13,068,510
13,083,179
12,584,293
12,028,878
11,796,550
11,902,866
12,425,975
11,719,589
Property tax
9,653,537
9,609,740
9,867,614
10,052,109
10,152,114
10,349,905
10,460,136
10,539,623
10,718,060
10,937,481
Real estate excise tax
1,428,985
1,403,361
1,560,395
1,507,313
2,034,033
2,062,722
3,031,159
5,265,138
4,226,344
4,240,825
Gambling Tax
1,127,203
493,486
511,005
114,443
178,696
176,068
177,807
190,051
210,029
229,524
Hotel/MotelTax
154,148
149,058
185,289
193,344
208,839
231,828
266,053
283,220
301,603
291,671
Admissions Tax
547,229
867,169
Leasehold tax
4,999
5,757
6,259
5,820
5,989
6,693
6,104
3,784
4,218
4,618
Other revenue
1,421,791
1,063,825
960,012
702,833
624,464
883,549
1,820,868
1,159,347
3,149,057
1,932,423
Unrestricted Grants & Contribution
284,350
Investment Earnings
385,976
179,373
113,419
146,850
256,797
284,757
256,797
413,052
605,402
605,402
Gain on sale of capital assets
(24,630)1
(15,211)1
142,935
Total Revenues
65 00,490 72,016,903 68,014,875 65,156,573 66,671,482 70,563,017 73,621,730 87,950,733 93,492,383 87,295,438
Expenses
General Government
4,566,457
4,865,827
4,448,449
4,300,691
4,575,614
41633,942
4,743,932
41544,037
4,179,619
41457,083
Security of Persons & Property
26,341,614
26,842,240
27,222,584
27,604,936
27,894,695
29,703,386
32,017,617
36,018,643
36,632,272
35,513,749
Transportation
91448,397
9,781,800
13,539,598
9,946,776
9,675,727
11,434,659
13,070,260
12,920,893
13,681,482
15,227,484
Physical Environment
450,914
451,470
424,466
415,935
490,916
443,127
476,570
469,237
415,771
487,104
Economic Environment
3,560,620
3,175,005
2,782,435
2,645,478
2,191,487
2,785,807
21973,437
31206,414
41074,379
41739,077
Health
776,854
767,108
690,643
754,727
1,683,449
1,056,802
1,618,759
1,501,057
1,714,311
1,432,259
Culture & Recreation
8,089,242
8,073,804
8,105,578
8,081,401
8,418,920
8,376,205
8,959,555
9,373,278
9,329,314
9,280,828
Interest on long-term debt
811,124
685,214
614,571
602,572
1,779,833
1,010,406
461,763
433,729
502,721
542,802
Surface Water Management
3,345,027
3,384,352
3,527,590
3,272,514
3,234,742
3,653,999
4,093,534
4,408,225
4,385,355
4,620,161
Dumas Bay Centre
984,103
849,176
890,738
873,144
844,623
945,705
1,250,161
1,104,971
1,179,9
921 839
Total Expenses
$58,374,352 $ 58,875,996 $ 62,246,652 $ 58,498,175 $ 60,790,005 $ 64,044,038 $ 69,665,588 $ 73,980,484 $ 76,095,191 $ 77,222,386
Source: City of Federal Way Finance
Page123
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
General fund
Reserved
106,728
Unreserved
8,138,468
Nons endable
81,146
104,012
69,398
76,538
105,417
136,806
187,284
252,550
229,870
Restricted
168,398
145,524
60,585
39,081
54,526
71,106
108,147
94,452
389,286
Committed
21,893
21,893
21,893
3,403,937
34,513
199,013
19,350
19,350
Assigned
Unassigned
Total general fund
8,188,575
12,372,719
14,783,219
16,003,076
12,480,539
14,362,533
13,794,955
13,380,039
14,954,243
8245,196 8,438,119 12,644,148 14,935,095 16,140,587 16,044,419 14,604,958 14,289,399 13,746,391 15 592 449
All Other Governmental Funds
Reserved
4,770,399
Unreserved, reported in:
Special revenue fund,
4,311,238
Capital projects funds
22,934,356
Debt service funds
Nons
endable
Restricted
17,776,967
19,325,489
18,079,168
17,478,394
17,231,330
19,985,302
21,077,165
20,065,209
20,297,047
Committed
18,611,612
11,642,248
15,813,105
16,371,292
19,530,016
17,114,881
13,932,351
12,705,135
9,772,048
Assigned
1001000
Unassigned
8,124,951
7,798,938
Total all other overnmental funds $ 32,015,993 $ 36,488,580 $ 30,967,736 $ 33,892,273 $ 33,849,686 $ 36 761346 $ 37100 183 $ 35,009,516 $ 24,645,393 $ 22 2,70 157
Source: City of Federal Way Finance
Note: Fund Balance reclassification implementation of GASB 54 for year's 2010 and forwarc
Page124
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2009
2010
2011
1 2012
2013
2014
2015
2016
2017
2018
Revenues
Taxes
$ 38,192,852
$ 37,122,069
$ 37,831,045
$ 37,450,059
$ 38,505,413
$ 39,241,915
$41,387,894
$44,898,868
$45,217,429
$ 46,010,789
Licenses,
fees and permits
2,163,984
2,547,655
2,209,873
2,501,368
2,638,017
3,311,671
3,574,648
3,140,133
4,125,619
4,615,508
Intergovernmental
11,127,718
18,648,749
11,713,248
7,631,014
9,682,511
9,929,833
8,910,603
19,783,107
18,184,915
11,181,594
Charges for services
5,573,647
51486,632
61131,287
51686,962
5,965,726
7,591,795
6,467,528
6,934,789
8,523,064
9,580,273
Development Fees
Fines and Forfeitures
2,200,092
2,783,214
2,146,524
3,371,878
3,911,990
3,498,596
4,087,033
4,135,236
4,464,730
4,249,027
Investment earnings
271,600
139,698
89,338
122,483
172,049
250:439
210,289
308,643
442,466
761,544
Other revenues 1599,207 899,092 960012 702,830 678,850 883,549 1,82Q,867 1I59,348 3,149,057 1,459,061
Total revenues 61 129100 67,627,109 61,081,327 57,466,594 61,554,556 64,707,798 66,458,862 80 60124 84,107,280 77,857,796
Expenditures
Generalgovenment
4,518,821
41857,177
4,234,327
4,402,129
4,495,029
4,444,772
4,707,145
4,541,228
4,390,464
4,680,000
Security of persons and property
27,051,814
26,892,207
28,332,237
26,562,270
29,028,242
31,235,230
32,471,782
35,655,951
37,702,987
38,033,215
Transportation
6,165,540
5,700,274
7,427,408
6,039,183
5,672,769
6,209,000
7,109,395
7,162,201
8,480,485
9,991,409
Physical Environment
448,873
450,971
427,315
409,042
468,220
461,718
478,807
452,720
425,900
486,418
Economic Environment
3,504,767
3,161,820
2,782,537
2,645,215
2,190,502
2,786,542
2,960,841
3,180,808
4,195,093
4,893,032
Health
772,151
765,963
690,824
754,311
1,681,986
1,057,841
1,617,818
1,497,793
1,720,324
1,439,522
Culture and Recreation
5,845,676
5,857,621
5,821,160
5,877,370
6,183,381
6,246,952
6,787,491
7,032,133
7,173,699
7,197,424
Debt Service
Princi al
4,558,750
494,250
457,520
480,760
1,019,698
963,500
640,482
470,000
8,853,960
659,000
InteresUfiscal charges/admin fees
811,124
685,214
614,571
602,572
1,781,778
1,021,945
491,379
471,738
547,501
592,562
Capital
Outlay
1 8,443,523
1 14,249,501
1 11,560,205
1 4,337,758
1 8,987,949
1 17,508,958
1 10,237,386
1 26,745,849
1 29,161,278
1 11,807,497
Total expenditures 62,121,039 63,114,998 62,348,104 52,110,610 61,509,554 71,936,458 67,502,526 87,210,421 102,651,691 79,780,079
Excess of revenues over
(under) expenditures
(991,939)
4,512,111
(1,266,777)
5,355,984
45,002
(7,228,660)
(1,043,664)
(6,850,297)
(18,544,411)
(1,922,283)
Other Financing Sources (Uses)
GO bond proceeds
12,415,000
2,925,000
6,105,000
Bond principal payoff
11,955,000
Sale of capital assets
9,162
5,500
2,187,756
Anticipation Note
8,209,960
Bond prenumn
410,660
Transfers in
25,619,678
1 22,473,128
1 21,453,223
1 16,228,281
1 18,972,853
4Q,440,790
14,422,187
21,043,890
21,606,659
18,245,170
Transfers out
25,817 857
22 319,725
21,510 423
16 368,781
18 731,107
38,606 598
14 479,146
19,524 820
22 262,134
18,868 672
Total other financing sources (uses) (198,179) 153,403 (48,038) (140,500) 1,117,906 10,044,152 (56,959) 4,444,070 7,637,281 (623,502)
Net than a in fund balances $ 1 190 118 $ 4,665,514 $ 1 314 815 $ 5,215,484 $ 1,162,908 $ 2,815,492 $ 1 100 623 $ 2 406 227 $ 10 907 130 $ (2,545,785
Debt service as a percentage of
noncapitalexpenditures 10.0% 2.4% 2.1% 2.3% 5.3% 3.6% 2.0% 1.6% 12.8% 1.8%
Source: City of Federal Way Finance
Page125
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY*
Last Ten Fiscal Years
Fiscal
Year
Real Property
Personal
Property
State Public
Service Property
Total
Total City
Direct
Tax Rate(Decrease)
Percent
Increase
2009
8,294,282,076
236,445,351
92,287,195
8,623,014,622
0.97
-12.7%
2010
7,948,924,766
228,247,721
91,163,299
8,268,335,786
1.13
-4.1%
2011
7,410,324,237
219,890,581
92,768,984
7,722,983,802
1.20
-6.6%
2012
6,832,615,312
213,389,519
96,827,145
7,142,831,976
1.30
-7.5%
2013
7,076,203,165
212,126,219
97,686,143
7,386,015,527
1.42
3.4%
2014
8,043,211,679
223,362,313
109,128,234
8,375,702,226
1.40
13.4%
2015
8,550,055,199
233,032,732
122,206,127
8,905,294,058
1.25
6.3%
2016
9,148,479,809
228,742,814
112,214,847
9,489,437,470
1.19
6.6%
2017
9,969,974,857
214,620,795
114,210,407
10,298,806,059
1.13
8.5%
2018
11,055,217,680
217,489,810
120,431,238
11,393,138,728
1.06
10.6%
* Real, personal, and state public service property has been assessed at 100% of the estimated value.
Source: King County Assessor's Office.
Note: These figures include all final tax adjustments, non-taxable, senior citizen exempted property and omits.
The total assessed value was reduced by non-taxable of $77,057,670 yielding a taxable assessed value of
of $11,316,081,058. The taxable assessed valuations are the the basis for the following year's tax levy.
Page126
PROPERTY TAX RATES AND LEVIES, DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
City Direct
Rates*
Overlapping Rates
Fiscal
Year
City of Federal Way
Federal School King
Way District #210 County
Washington
State
King County
Flood Zone
Port of County
Seattle Ferry District
Fire District
#39
Library
Emergency
Medical
Services
Sound
Transit
Total
TAX RATES PER $1,000 OF ASSESSED VALUATION
2009
0.97
4.20
1.10
1.96
0.09
0.20
0.052
1.50
0.42
0.27
10.76
2010
1.13
5.11
1.28
2.22
0.11
0.22
0.003
1.50
0.49
0.30
12.36
2011
1.20
5.36
1.34
2.28
0.11
0.22
0.004
1.39
0.57
0.30
12.77
2012
1.30
5.77
1.42
2.42
0.12
0.23
0.004
1.50
0.57
0.30
13.63
2013
1.42
7.55
1.54
2.57
0.13
0.23
0.004
1.82
0.57
0.30
16.14
2014
1.40
7.28
1.52
2.47
0.15
0.22
0.003
1.81
0.56
0.34
15.75
2015
1.25
6.42
1.35
1 .14
0.19
1.77
0.50
0.30
14.20
2016
1.19
6.75
1.48
2.17
0.13
0.17
1.91
0.48
0.28
14.55
2017
1.13
6.32
1.38
2.03
0.12
1 0.15
1.83
0.45
0.26
0.250
13.93
2018
1.06
5.77
1.33
2.92
0.11
0.14
1.73
0.41
0.24
0.230
13.94
DETAIL OF TAX RATES FOR 2018
Basic Rate
1.13
1.35
2.03
0.12
0.15
1.50
0.40
6.68
Voted Rate
6.32
0.04
0.33
0.05
0.26
0.25
7.25
TAX LEVIES
2009
9,551,027
58,588,636
422,757,529
756,272,108
35,151,944
75,911,308
19,335,328
23,715,724
95,398,383
105,611,047
105,611,047
1,707,904,081
2010
9,690,241
61,404,973
437,163,660
756,411,197
35,783,324
73,504,599
1,185,576
20,409,747
97,015,693
102,103,088
102,103,088
1,696,775,186
2011
9,827,398
61,622,347
439,635,095
749,341,420
36,076,405
73,512,887
1,184,924
18,234,001
115,495,462
98,604,471
98,604,471
1,702,138,881
2012
9,967,650
61,493,504
449,642,988
769,672,818
36,904,878
73,014,552
1,182,466
18,291,481
112,332,714
95,287,781
95,287,781
1,723,078,613
2013
10,081,231
74,591,150
482,114,428
803,686,293
41,355,065
73,020,604
1,183,773
20,431,912
109,665,815
93,899,062
93,899,062
1,803,928,395
2014
10,240,148
74,592,913
482,114,428
837,694,800
52,112,348
73,018,695
1,183,251
20,866,842
116,790,442
113,565,682
113,565,682
1,895,745,231
2015
10,379,941
75,700,006
519,943,107
883,333,788
53,576,135
73,003,848
23,587,509
120,007,126
116,779,587
116,779,587
1,993,090,634
2016
10,487,319
85,094,113
626,660,985
921,288,805
55,134,677
72,015,418
26,636,830
123,025,026
119,904,362
119,904,362
2160,151,897
2017
10,657,115
85,155,041
649,375,369
954,266,653
55,133,687
72,010,667
27,439,155
126,375,001
123,505,903
106,640,644
2:210,559,235
2018
10,859,759
85,330,454
707,011,071
1,552,188,670
57,041,494
72,012,219
28,961,832
129,764,539
127,502,843
110,339,112
2,881,011,993
Source: King County Assessors Office and King County Department ofFinanc
^The Ci of Federal Wa s Direct Aate has ovl o vent which is the ex se let
Page127
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2018
2009
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
KW Club Palisades LLC
Real Estate Management
92,338,000
1
0.81%
0.00%
Prime Catalina Campus Dr (formerly
Alliance Tax Advisors)
Real Estate Management
82,510,000
2
0.72%
0.00%
Puget Sound Energy-Elec/Gas
Electric\Gas
81,176,472
3
0.71%
47,414,185
4
0.55010
Prime Woodley Campus Drive
Real Estate Management
80,747,000
4
0.71%
0.00%
Federal Way Campus LLC (formerly part
of We erhauser)
Real Estate Management
73,206,400
5
0.64%
IRGRA (formerly part of Weyerhauser)
Real Estate Management
69,375,200
6
0.61%
PRCP-Arcadia LLC (formerly Campus
Drive Fee Owner LLC)
Real Estate Management
67,090,800
7
0.59%
0.00%
Harsch Investment Properties
Retailer
66,730,000
8
0.59%
54,871,000
3
0.64%
Avanath Federal Way LLC
Real Estate Management
66,304,000
9
0.58%
0.00%
MGP XI Commons FW LLC (formerly
Retailer
64,043,600
10
0.56%
55,964,858
2
0.65%
CA Reservice Owner LLC
Real Estate Management
61,759,000
11
0.54%
0.00%
Greystone Meadows Apts.
Real Estate Management
56,274,000
12
0.49%
0.00%
Federal Way Crossings Owner ( formerly
Shopping Center
49,696,000
13
0.44%
0.00%
FPA5 Landings LLC
Real Estate Management
46,739,000
14
0.41%
0.00%
KNL Vision WA LLC
Real Estate Management
45,500,000
15
0.40%
27,720,000
8
0.32%
Cove Apartments LLC
Real Estate Management
42,440,000
16
0.37%
28,594,000
6
0.33%
Fairfield Maple Hill LLC
Real Estate Management
41,921,000
17
0.37%
0.00%
FSC Riverside Associates
Real Estate Management
40,599,000
18
0.36%
0.00%
Waterbury Park Apts.
Real Estate Management
38,097,000
19
0.33%
0.00%
Wal-Mart
Retailer
38,058,833
20
0.33%
0.00%
Shores at Federal Way LLC
Real Estate Management
34,858,000
21
0.31%
0.00%
Weyerhaeuser
Real Estate Investment Trust
0.00%
$ 144,353,970
1
1.69%
Virginia Mason Clinic
Medical Services
0.00%
18,827,027
10
0.22%
Fred Meyer
Retail/Wholesaler
0.00%
22,917,444
9
0.27%
Costco
Retail / Wholesaler
0.00%
15,384,013
11
0.18%
ANS LLC
Real Estate Management
0.00%
13,357,900
13
0.16%
Campus Business Parks LLC
Real Estate Management
0.00%
12,850,000
14
0.15%
Qwest Corporation
Telecommunications
0.00%
27,847,980
7
0.33%
LBA Realty
Real Estate Management
0.00%
38,846,200
5
0.45%
IA Orchard Hotels Federal Way (formerly
Apple Hospitality Five Inc.)12
Real Estate Management
0.00%
14,837,500
0.17/
$1 239 463 305 10.88% $ 523,786,077 6.12%
Source: King County Assessor's Office.
A 2018 and 2009 assessed valuation for the City of Federal Way was $11,393,138,728 and $8,563,964,852, respectively.
Page128
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Fiscal
Year
Taxes Levied
for the
Fiscal Year
Collected within the
Fiscal Year of the Levy
Collections
in Subsequent
Years
Total Collections to Date
Total
Outstanding
Delinquent
Taxes
Ratio of
Delinquent
Taxes to
Total Tax Levy
Current Tax
Amount
Percentage
of Levy
Total Tax
Amount
Percentage
of Levy
2009
9,511,404
9,277,004
97.5%
172,687
9,449,691
99.4%
61,713
0.6%
2010
9,680,047
9,433,214
97.5%
139,340
9,572,554
98.9%
107,493
1.1%
2011
9,755,022
9,506,527
97.5%
186,036
9,692,563
99.4%
62,459
0.6%
2012
9,919,406
9,739,696
98.2%
(0)
9,739,696
98.2%
179,710
1.8%
2013
10,081,231
9,848,925
97.7%
37,272
10,029,029
99.5%
195,033
1.9%
2014
10,240,148
10,035,433
98.0%
56,371
10,091,805
98.6%
148,343
1.4%
2015
10,379,941
10,188,421
98.2%
39,138
10,227,559
98.5%
152,382
1.5%
2016
10,487,319
10,254,720
97.8%
72,477
10,327,198
98.5%
160,121
1.5%
2017
10,657,115
10,433,533
97.9%
22,380
10,455,913
98.1%
201,202
1.9%
2018
10,859,759
10,651,535
98.1%
9,171
10,660,706
98.2%
199,053
1.8%
Source: Data has been derived from the "Annual Tax Receivable Summary" prepared by the King County Finance.
Note: These figures include tax adjustments such as omits, refunds, and senior citizen exempted property.
Page129
RATIO OF OUTSTANDING DEBT BY TYPE
For the Last Ten Fiscal Years
Fiscal
Year
Governmental
Activities
Business Type Activities
Total Primary
Government
% of Personal
Income (b)
Per Capita (b)
General Obligation
Bonds
Certificates of
Participation
Public Works
Trust Fund Loan
2009
29,212,950
-
1,392,394
30,605,344
0.090%
346
2010
28,683,950
-
1,210,035
29,893,985
0.091%
337
2011
28,157,950
-
1,027,676
29,185,626
0.091%
327
2012
27,616,950
-
845,317
28,462,267
0.093%
318
2013
27,016,400
-
662,958
27,679,358
0.097%
309
2014
34,703,360
-
480,600
35,183,960
0.058%
390
2015
33,656,660
-
384,481
34,041,141
0.080%
375
2016
35,725,560
-
288,361
36,013,921
0.076%
384
2017
32,573,400
-
192,241
32,765,641
0.088%
340
2018
31,498,600
-
96,120
31,594,720
0.096%
327
Source: City of Federal Way Finance Division
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
See Demographic Statistics schedule for personal income and population data. These ratios are calculated using
personal income for the prior calendar year.
(b) Per capita income information for Federal Way based on US Census Bureau - Quickfacts.
Page130
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE
AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
For the Last Ten Fiscal Years
Ratio of Net
(B)
(C)
Bonded Debt
Net Bonded
Fiscal
(A)
Assessed
Gross
Less Restricted
Net
To Assessed
Debt Per
Year
Population
Value
Bonded Debt
for Debt
Bonded Debt
Value
Capita
2009
88,578
8,563,964,852
30,605,344
4,225,463
26,379,881
0.0031
297.82
2010
88,760
8,206,354,959
29,893,985
3,379,427
26,514,558
0.0032
298.72
2011
89,370
7,659,569,844
29,185,626
3,866,184
25,319,442
0.0033
283.31
2012
89,460
7,142,831,976
28,462,267
4,182,345
24,279,922
0.0034
271.41
2013
89,718
7,386,015,527
27,679,358
5,248,336
22,431,022
0.0030
250.02
2014
90,147
8,375,702,226
35,183,960
2,136,390
33,047,570
0.0039
366.60
2015
90,764
8,905,294,058
34,041,141
2,283,702
31,757,439
0.0036
349.89
2016
93,670
9,489,437,470
36,013,921
2,508,514
33,505,407
0.0035
357.70
2017
96,350
10,298,806,059
32,765,641
3,492,598
29,273,043
0.0028
303.82
2018
96,690
11,393,138,728
31,594,720
2,335,532
29,259,188
0.0026
302.61
(A) Sources: State of Washington Office of Financial Management Population Estimates.
(B) The final certified Regular Levy assessed valuation of all taxable property by the King County
Assessor's Office for use in calculating levy rates for the following year's tax roll. The total
assessed valuation of $11,393,138,728 has been reduced by non-taxable of $77,057,670
to arrive at taxable assessed valuation of $11,316,081,058.
(C) Includes Public Works Trust Fund Loans issued in 2000 and Section 108 Loan issued in 2016;
general obligation bonds issued in 2009, 2013, 2014, and 2017.
Paqe 131
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2018
(A) (B)
Gross General Percentage
Amount
Obligation Debt Applicable to
Applicable to
Jurisdiction Outstanding Federal Way
Federal Way
King County
$ 652,024,000
1.88%
$
12,245,812
Port of Seattle
362,390,000
1.88%
6,806,130
Federal Way School District #210
292,487,476
68.31%
199,792,511
Fire District # 39
32,190,000
60.51%
19,478,944
Library
79,175,000
3.33%
2,636,930
Total Overlapping Debt
1,418,266,476
240,960,328
CITY OF FEDERAL WAY
32,573,400
(C)
100.00%
32,573,400
Total Direct and Overlapping Debt $ 1,450,839,876 $
273 533 728
(A) Total general obligation bonds outstanding at the year end, exclusive of available cash in debt service funds,
proprietary -type debt, credit enhancement and hotel/motel debt. Source: King County Financial Management.
(B) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to
valuation of property subject to taxation in reporting unit. Source: King County Assessor's Office
(C) Includes general obligation debt issued in 2009, 2013, 2014, 2016, and 2017.
Source: City of Federal Way Finance
Page 132
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2018
DESCRIPTION
General Debt Capacity
Excess Levy
Open Space
and Park
Excess Levy
Utility
Purposes
Total Debt
Capacity
(Limited)
Councilmanic
(Unlimited)
Excess Levy
Statutory debt limit:
2018 TAV=$11,316,081,058 A
1.50%AV @ 100%
$ 169,741,216
$ (169,741,216)
$ -
$ -
$ -
2.50% AV @ 100%
-
282,902,026
282,902,026
282,902,026
848,706,079
Add:
Cash reserved for
debt redemption (B)
2,335,532
-
-
-
2,335,532
Less:
Bonds and COPS outstanding
31,498,600
-
-
-
31,498,600
Remaining Debt Capacity $ 140,578,148 $ 113,160,811 $ 282,902,026 $ 282,902,026 $ 819,543,011
Total Remaining
"General" Capacity
$253,738,958
(A) This figure represents the City's final total taxable assessed valuation (TAV) for 2018 which was used to determine
the 2019 property tax levy.
(B) Reflects debt service fund balance as of 12/31/2018.
Fiscal Year
Debt limit
Total net debt
applicable
to limit
Legal debt
margin
Total net debt
applicable to
the limit as a
% of debt limit
2009
741,123,572
(22,913,431)
718,210,141
3.09%
2010
615,476,622
(22,291,874)
593,184,748
3.62%
2011
579,223,785
(20,964,944)
558,258,841
3.62%
2012
535,712,398
(25,612,462)
510,099,936
4.78%
2013
550,022,093
(25,064,092)
524,958,001
4.56%
2014
623,929,441
(32,566,971)
591,362,470
5.22%
2015
663,674,591
(31,372,958)
632,301,633
4.73%
2016
706,516,822
(33,217,046)
673,299,776
4.70%
2017
767,010,483
(29,080,802)
737,929,681
3.79%
2018
848,706,079
(29,163,068)
819,543,011
3.44%
Source: City of Federal Way Finance
(A) King County Department of Finance
Note: Under state finance law, the city's outstanding general obligation debt should not exceed 15 percent of total assessor's property
value.
By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general
obligation bonds.
Page133
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION
BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES NET OF DEBT SERVICE EXPENSE
Total General Ratio of Debt Service
Fiscal Total Debt Governmental to General Governmental
Year Principal Interest * Service Expenditures Expenditures
2009
4,585,000
824,693
5,409,693
54,585,436
9.9%
2010
525,000
629,419
1,154,419
50,093,838
2.3%
2011
526,000
622,903
1,148,903
49,482,421
2.3%
2012
480,760
1,114,827
1,595,587
47,879,445
3.3%
2013
1,050,430
1,413,862
2,464,292
57,934,989
4.3%
2014
995,300
985,475
1,980,775
48,877,840
4.1%
2015
771,120
495,359
1,266,479
48,845,021
2.6%
2016
566,120
475,073
1,041,193
52,159,793
2.0%
2017
8,950,080
491,866
9,441,946
62,791,020
15.0%
2018
755,120
510,355
1,265,475
57,745,591
2.2%
Source: City of Federal Way Finance
Note: * Interest excludes bond issuance and debt registration costs.
Paqe 134
DEMOGRAPHIC STATISTICS
Fiscal
Personal Income Per Capita Median
Education Level in Years
School
Unemployment
Year
Population Sea-Tac-Bel [D] Income [C] Age [C]
of Formal Schooling Enrollment (A)
Rate (B)
2009
88,578
171,680,771,000
27,638
36.6
13.0
21,700
8.9%
2010
88,760
176,084,963,000
27,307
35.1
13.0
21,630
9.7%
2011
89,370
178,306,642,000
26,668
35.2
13.0
21,608
8.9%
2012
89,460
189,431,079,000
26,514
34.9
13.0
20,665
8.1%
2013
89,718
199,243,414,000
26,740
34.9
13.0
21,554
7.4%
2014
90,147
213,700,152,000
20,481
35.1
13.0
21,772
6.2%
2015
90,764
227,827,122,000
27,145
35.7
13.0
21,979
5.3%
2016
93,670
245,230,664,000
27,483
35.7
13.0
21,673
4.9%
2017
96,350
267,653,500,000
28,947
35.9
13.0
22,522
4.4%
2018
96,690
N/A
30,288
36.9
13.0
22,309
4.1%
(A)
Includes public school enrollment. Kindergarten is included though not State mandated.
(B)
Unemployment rates came from the US Department of Labor, Bureau of Labor Statistics.
(C)
Per Capital Income for Federal Way came from U.S. Census Bureau - Quickfacts.
(D)
Personal income information is for Seattle -Tacoma -Bellevue area provided by the Bureau of Economic Analysis, information
for 2018 not available. 2018 data for Personal Income to be published fall of 2019.
Sources:
Data was obtained from U. S. Census Bureau
US Department of Labor, Bureau of Labor Statistics
US Department of Commerce, Bureau of Economic Analysis
School data was provided by the Federal Way School District.
Page135
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2018
2009
Number of
Employees
Rank
% of Total City
Employment
Number of
Employees
Rank
% of Total City
Employment
Federal Way Public Schools
Educational Services
3,455
1
10.92%
St Francis Hospital
Medical Services
848
2
2.68%
744
3
2.55%
World Vision Inc
Christian Relief Agency -Nonprofit
695
3
2.20%
809
2
2.77%
Wild Waves
Amusement Center
635
4
2.01%
632
5
2.16%
Us Postal Service - Bulk Mail
Postal Service
604
5
1.91%
655
4
2.24%
Davita
Health Services
488
6
1.54%
Wal-Mart
Retail
476
7
1.50%
523
8
1.79%
City Of Federal Way
Government Services
460
8
1.45%
471
7
1.61%
Safeway
Retail
278
9
0.88%
Costco Wholesale Corporation
Wholesale
273
10
0.86%
219
11
0.75%
Virginia Mason Federal Way
Medical Services
253
11
0.80%
235
10
0.80%
Res Care Home Care
Health Services
247
12
0.78%
Community Integrated Services
Health Services
236
13
0.75%
Fred Meyer
Retail
220
14
0.70%
213
12
0.73%
Homestreet Bank
Banking
176
15
0.56%
Home Depost
Retail
171
16
0.54%
Winco Foods
Retail
160
17
0.51%
175
14
0.60%
Macy's
Retail
158
18
0.50%
Garden Terrace Alzheimers Ctr
Retirement Home
155
19
0.49%
BergerABAM Inc
Engineering/Architectural
151
20
0.48%
Livebridge Inc
Business Services
560
6
1.92%
Target Store
Retail
178
13
0.61%
Coldwell Banker Danforth & Assoc. I
Real Estate
246
9
0.84%
Weyerhaeuser Company
Lumber Products
2,580
1
8.83%
Source: City of Federal Way Business License
Note: Principal Employers - includes both full-time and art -time employees.
Page136
PROPERTY VALUE AND CONSTRUCTION
Commercial Construction (A)
Residential Construction (A)
Multi -Family Construction (A)
Year
Permits
Value
(In Thousands)
Permits
Value
(In Thousands)
Permits
Value
(In Thousands)
2009
132
45,343
275
13,057
76
20,802
2010
149
31,043
321
19,676
75
2,686
2011
134
12,724
301
19,455
47
847
2012
160
27,989
346
29,115
92
974
2013
162
22,891
369
33,260
131
5,442
2014
220
35,923
359
30,923
53
61,511
2015
181
73,654
343
20,341
109
104,115
2016
172
18,547
292
19,804
80
18,667
2017
210
26,817
320
24,455
119
10,992
2018
158
54027
310
29612
45
2821
Sources & Notes:
(A) Federal Way Community Development Department. Commercial construction includes alterations.
Other building -related permits (plumbing, electrical, mechanical, fire alarm, etc.) numbering 3,436
and valued at $30,421,714 have been excluded.
Page137
CAPITAL ASSETS BY FUNCTION
Last Ten Fiscal Years
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Transportation
Street (Center Line Miles)
234.72
242.90
248.23
248.23
249.25
249.25
249.25
249.25
253.8
253.8
Signals WSDOT-owned and maintained
5
5
5
6
6
6
6
6
6
6
Signals City -owned & County -maintained
76
76
76
77
77
77
77
80
80
81
Street lights City -owned and maintained
1,467
1,509
1,554
1,618
1,705
1,728
1,728
1,785
1,857
1,857
Street lights City -owned and PSE-maintain
644
644
644
644
644
644
644
644
644
644
Street lights PSE-owned and maintained
1,975
1,975
1,975
1,975
1,975
1,978
1,980
1,983
1,986
1,986
Culture & Recreation
Developed Parks - Acreage
524.49
524.49
524.49
579.86
579.86
588.99
588.99
588.99
588.99
620.33
Developed Parks - # of Parks
32
32
32
29
29
30
30
32
32
34
Undeveloped Parks - Acreage
551.12
551.12
551.12
539.43
539.43
539.43
539.43
539.43
539.43
443.76
Undeveloped Parks - # of Parks
22
22
22
22
22
22
22
22
22
23
Tennis Courts City -Owned
11
11
11
9
9
9
9
9
9
9
Tennis Courts - Public
22
22
22
25
25
25
25
22
22
17
Swimming Pools City -Owned
1
1
1
2
2
2
2
2
2
2
Swimming Pools County -Owned
1
1
1
3
3
3
3
3
3
2
Trails - Miles
6
6
6
9
9
9
9
9
9
9
Trails -# of Trails
3
3
3
6
6
6
6
6
6
7
Community Centers/Recreation Facilities
1
1
1
1
1
2
2
3
3
3
Source: City of Federal Way Public Works and Parks Department
Page138
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
SECURITY OF PERSONS & PROPERTY
Offenses:
Forcible Rape (including attempts)
51
50
38
48
35
70
47
46
34
44
Robbery
198
152
119
107
107
135
152
191
169
234
Criminal Homicide
5
5
4
3
6
4
4
9
7
1
Aggravated Assault
115
118
99
150
133
148
178
209
226
173
Vehicle Theft
561
741
694
800
778
869
762
1,080
963
805
Burglary (commercial & residential)
741
828
752
931
801
816
635
645
664
672
Larceny
3,231
3,141
3,067
3,409
3,571
3,912
3,701
4,225
3,699
3,060
Arson
13
11
11
9
7
13
14
18
10
14
Citations:
Traffic
20,678
18,094
17,226
13,023
17,558
13,705
15,466
10,602
10,579
7,619
Red Light Photo
13,002
25,691
15,340
13,455
24,454
24,750
29,812
33,626
38,434
35,781
ECONOMIC ENVIRONMENT
Building Related Permits & Values
Building Permits
483
545
482
598
662
632
633
544
649
580
Estimated Value (In Millions $)
$ 79
$ 53
$ 33
$ 58
$ 62
$ 128
$ 198
$ 57
$ 62
$ 86
Other Building Related Permits
2,209
2,423
2,385
2,960
3,827
3,722
3,868
3,429
3,425
3,464
Estimated Value (In Millions $)
$ 6
$ 6
$ 6
$ 5
$ 6
$ 7
$ 8
$ 8
$ 10
$ 10
Source: City of Federal Way Police Department and Community Development Department
Page139
CITY GOVERNMENT EMPLOYEES FULL-TIME EQUIVALENT - HISTORY
Department 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Mayor's Office
7.63
7.63
5.00
3.00
3.50
6.00
8.00
12.34
14.34
7.34
Administration
3.13
3.13
4.00
3.00
3.00
5.00
6.00
6.34
6.34
6.34
Economic Development
1.50
1.50
-
-
0.50
1.00
1.00
1.00
1.00
1.00
Performing Arts & Event Center
-
-
-
-
1.00
5.00
7.00
-
Government Affairs
3.00
3.00
-
-
-
-
Human Services
-
-
1.00
-
-
-
-
-
-
-
City Council
3.50
4.50
4.50
3.85
4.15
4.15
4.20
4.20
4.20
4.20
Municipal Court
13.00
13.00
13.00
13.00
13.00
13.00
13.00
16.00
16.00
16.00
Human Resources/City Clerk
5.25
5.25
4.50
4.50
4.50
5.13
5.75
6.00
6.00
6.00
City Clerk
1.75
1.75
1.75
1.75
1.75
1.88
2.50
2.50
2.50
2.50
Human Resources
3.50
3.50
2.75
2.75
2.75
3.25
3.25
3.50
3.50
3.50
Finance
7.60
7.60
7.00
7.00
6.00
7.00
8.00
8.00
8.00
8.00
Administration
-
-
-
-
-
-
-
-
-
-
Finance
7.60
7.60
7.00
7.00
6.00
7.00
8.00
8.00
8.00
8.00
Information System
10.00
9.60
7.00
7.00
7.00
6.00
7.00
7.00
7.00
7.00
Law
12.00
12.00
11.00
11.00
12.00
12.00
12.50
12.50
12.50
13.00
Civil Legal Services
4.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
Criminal Prosecution Services
7.20
7.20
6.20
6.20
7.20
7.20
7.70
7.70
7.70
8.20
Community & Econ Development
30.00
28.90
19.00
21.65
21.85
26.25
26.70
26.70
26.70
26.70
Administration
5.00
5.00
3.50
3.50
3.50
3.90
3.90
3.90
3.90
3.90
Planning
8.00
7.00
6.00
6.00
6.00
7.00
7.00
6.00
6.00
6.00
Building
13.00
13.00
9.00
9.00
10.00
12.00
12.00
13.00
13.00
13.00
Human Services
3.00
3.00
-
2.65
2.35
3.35
3.80
3.80
3.80
3.80
Neighborhood Development
1.00
0.90
-
-
-
-
-
-
-
-
Economic Development
-
-
0.50
0.50
-
-
-
-
-
-
Police
164.00
161.00
135.00
132.00
145.00
146.00
160.00
160.00
160.00
160.00
Administration
3.00
3.00
3.00
3.00
3.00
3.00
3.00
2.00
2.00
2.00
Support Services
61.00
58.00
51.00
52.00
55.00
56.00
57.00
55.00
55.00
55.00
Field Operations
100.00
100.00
81.00
77.00
87.00
87.00
100.00
103.00
103.00
103.00
Parks, Rec. & Cultural Svcs.
39.75
39.75
36.45
36.45
35.45
35.90
34.80
37.46
37.46
38.96
Administration
1.35
1.35
1.35
1.35
1.35
1.80
1.80
1.80
1.80
1.80
Planning
-
-
-
-
-
-
Kenneth Jones Pool
-
-
-
-
-
-
General Recreation
4.80
4.80
5.50
5.50
5.50
5.50
5.50
5.83
5.83
5.83
Community Center
13.35
13.35
13.35
13.35
13.35
13.35
11.00
11.33
11.33
11.33
Dumas Bay Centre
2.75
2.75
2.75
2.75
2.75
2.75
3.00
3.00
3.00
3.00
Knutzen Family Theatre
-
-
-
-
-
-
-
-
-
-
Parks Maintenance
17.00
17.00
13.00
13.00
12.50
12.50
13.50
15.50
15.50
16.00
Performing Arts & Event Center
-
-
-
-
-
-
-
-
-
1.00
Building
0.50
0.50
0.50
0.50
-
-
-
-
-
-
Public Works
42.95
41.95
38.95
38.95
39.95
38.95
44.00
43.00
44.00
45.00
Administration
2.35
2.35
2.25
2.20
2.25
2.25
2.75
2.75
2.75
2.75
Development Services
4.45
4.45
4.20
4.20
3.70
3.70
2.20
2.20
2.20
2.20
Traffic Services
6.10
5.10
2.35
2.35
3.85
3.85
4.35
4.35
4.35
5.35
Street Services
10.50
10.50
10.60
10.60
10.60
10.60
11.60
11.60
11.60
11.60
Emergency Management
1.00
1.00
1.00
1.00
1.00
-
-
-
-
-
Solid Waste & Recycling
1.70
1.70
1.70
1.70
1.70
1.70
2.20
2.20
2.20
2.20
Surface Water Management
16.35
16.35
16.35
16.40
16.35
16.35
20.40
19.40
20.40
20.40
Fleet & Equipment
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
Total 335.68 331.18 281.40 278.40 292.40 300.38 323.95 333.20 336.20
332.20
Source: City of Federal Way Finance Division
*table does NOT include 1-time positions or frozen positions
Page140
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
DECEMBER 31, 2018
LEGISLATIVE BODY
POSITION EMPLOYEE ANNUAL SALARY
MAYOR
JIM FERRELL
$128,020
DEPUTY MAYOR
SUSAN HONDA
$14,214
COUNCIL MEMBERS
LYDIA ASSEFA-DAWSON
$14,356
MARK KOPPANG
$14,356
JESSE JOHNSON
$14,356
HOANG V TRAN
$14,214
MARTIN MOORE
$14,356
DINI DUCLOS
$14,214
ADMINISTRATIVE STAFF
POSITION EMPLOYEE ANNUAL SALARY
FINANCE DIRECTOR
ADE ARIWOOLA
$153,900
CITY ATTORNEY
RYAN CALL
$146,448
CITY CLERK
STEPHANIE COURTNEY
$100,092
ECONOMIC DEVELOPMENT DIRECTOR
TIM JOHNSON
$147,132
PARKS DIRECTOR
JOHN HUTTON
$142,932
COMMUNITY DEVELOPMENT DIRECTOR
BRIAN DAVIS
$153,012
PUBLIC WORKS DIRECTOR
EJ WALSH IV
$151,836
POLICE CHIEF
ANDY HWANG
$172,644
Source: City of Federal Way Human Resources
NOTE: In accordance with Ordinance 90-016, individual fidelity coverage of not less than $50,000 exists for the
Mayor, Finance Director, City Clerk, Police Chief, and Judge.
Page141
MISCELLANEOUS STATISTICAL INFORMATION
LOCAL TAXES ON BUSINESSES
Franchise Tax - Cable TV ........................... 5.00%
Utility Tax - (6% + 1.75% Prop 1).................
7.75%
Admission Tax ........................................
5.00%
Gambling Taxes:
Bingo/Raffles...................................
5.00%
Amusement/Games ............................
2.00 %
Punchboard/Pull Tabs .........................
3.00%
Cardro oms.......................................
10.00 %
Local Sales Tax (Collected by the State)..........
10.00%
FIRE AND EMERGENCY MEDICAL RESPONSE INFORMATION
Fire and Emergency Medical Response information reflects the greater Federal Way area, which is served by South King Fire & Rescue.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Fire and Other Responses
1,083
1,147
1,041
934
1,363
968
999
1,148
1,019
3,213
1,253
Emergency Medical
12,058
11,077
11,460
11,914
12,571
12,950
13,847
14,193
16,144
17,109
15,968
PUBLIC EDUCATION
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
23
Elementary Schools
9,594
9,594
9,560
9,673
9,229
9,777
10,054
10,253
10,498
10,493
10,241
8
Middle Schools (Public Academy, TAF)
5,234
5,203
5,235
5,205
5,041
5,050
5,034
5,209
5,183
5,238
5,217
5
High Schools
6,531
6,637
6,547
6,409
6,018
6,341
6,299
6,166
5,582
6,382
6,389
2
Alternative\Int. Academy, Open Doors
263
266
288
321
377
386
385
351
412
409
462
Total 21,622 21,700 21,630 21,608 20,665 21,554 21,772 21,979 21,673
22,522
229309
3,455 Staff members
TAXABLE SALES (in millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Retail Sales
$1,458
$1,257
$1,261
$1,277
$1,239
$1,355
$1,432
$1,564
$1,673
$1,671
$1,733
Real Estate Sales
$536
$208
$238
$315
$303
$399
$418
$599
$1,062
$819
$841
Source: South King County Fire and Rescue
Federal Way Public School
City of Federal Way Finance Division
Page142
PRINCIPAL TAXPAYERS -SALES TAXES
Current Year and Nine Years Ago
2018
2009
Sales Tax
% of Total City
Sales Tax
Sales Taxes
% of Total City Sales
Received
Sector
Location
Rank
Received
Received
Sector
Location
Rank
Taxes Received
$ 708,077
General Merchandise Sores -
S 348th St
1
4.81 %
$ 750,798
General Merchandise Stores -
S 312th & S 316th
1
7.09%
Wholesale Grocery& Other
Gmce &Other
638,151
Merchandise Stores -
S 312th & S 316th
2
4.33%
543,271
General Merchandise Stores -
S 348th St
2
5.13%
'Gene
Groce &Other
Wholesale Gmc & Other
422,912
Building Material & Garden
S 348th St
3
2.87%
272,694
General Merchandise Stores -
Commons
3
2.58%
E ui ment & Supplies
Clothing, Household, & Other
319,619
Miscellaneious Store Retailers
Other
4
2.17%
270,359
Building Material & Garden
S 348th St
4
2.55%
Equipment & Supplies
283,853
General Merchandise Stores - Grocery
Twin Lakes
5
1.93%
253,189
General Merchandise Stores - Grocery
Twin Lakes
5
2.39%
& Other
& Other
256,312
General Merchandise Stores -
Commons
6
1.74%
247,911
Electronics and Appliance Stores
Pavillion
6
2.34%
Clothin ,Household, & Other
238,337
Motor Vehicle and Parts Dealers
S 348th St
7
1.62%
181,175
Building Material & Garden
S 348th St
7
1.71 %
Equipment & Supplies
Building Material & Garden
General Merchandise Stores - Tools,
225,897
E ui ment & Supplies
S 348th St
8
1.53%
144,301
Equipment, Clothing & Other
Commons
8
1.36
203,594
Electronics and Appliance Stores
Pavilion
9
1.38%
134,457
General Merchandise Stores -
Commons
9
1.27%
Clothing, Household, & Other
126,656
Amusement, Gambling, and
S 348th St
10
0.86%
130,102
Motor Vehicle and Parts Dealers
S 348th St
10
1.23%
Recreation Industries
3 423 4 88
23.24%
$ 2,928,257
27.67°
Source: Washington State Department of Revenue
Note: It is illegal to disclose specific taxpayer sales tax information. The above information is being provided without identification.
The City received $14.7M in sales and use tax in 2018 and $10.6M in 2009.