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1992 Annual Comprehensive Financial Report (92-006)CITY OF FEDERAL WAY WASHINGTON PERMANENT RECORD DO NOT DESTROY GS50-03D-02, Rev. 1 (CAFR) 1Ion 01- oos Comprehensive Annual Financial Report :Year Ended December 31; 1992 Comprehensive Annual Financial Report Year Ended December 31, 1992 City of Federal Way Washington CRY OF Prepared by Management Services Department CITY OF � COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 1992 Table of Contents Statement Reference Page INTRODUCTORY SECTION Letter of Transmittal .......................................... iii City Officials and Administrative Officers .......................... ... 1 City Functional Organization Chart ................................. 2 GFOA Certificate of Achievement .................................. 3 FINANCIAL SECTION Auditor's Opinion ............................................ 5 Combined Financial Statements - Overvie ("Liftable" General Purpose Finance Statements) ...................... . ..... 7 Combined Balance Sheet - All Fund Types and Account Groups ............... 1 8 Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - All Governmental Fund Types and Expendable Trust Funds ................. 2 11 Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General, Special Revenue and Debt Service Fund Types ...... 3 12 Combined Statement of Revenues, Expenses, and Changes in Retained Earnings - All Proprietary Fund Types ..................................... 4 14 Combined Statement of Cash Flows - All Proprietary Fund Types 5 15 Notes to the Financial Statements .................................. 17 Combining, Individual Fund and Account Grow Statements and Schedules General Fund .............................................. 45 Balance Sheet ............................................ 45 Statement of Revenues, Expenditures, and Changes in Fund Balance ........... 46 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual ........................................ 47 Schedule of Expenditures Compared to Budget 48 Special Revenue Funds ........................................ 54 Combining Balance Sheet ..................................... 54 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ... 56 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual ........................................ 58 Debt Service Fund ........................................... 65 Balance Sheet ............................................ 65 Statement of Revenues, Expenditures, and Changes in Fund Balance ........... 66 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual .................. . . ................... 67 Table of Contents (Cont'd) Table Page Combining, Individual Fund and Account gaup Statements and Schedules (continued) Capital Project Funds ........................................ 69 Combining Balance Sheet ..................................... 69 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ... 70 Internal Service Funds ........................................ 71 Combining Balance Sheet ..................................... 71 Combining Statement of Revenues, Expenses, and Changes in Retained Earnings ... 72 Combining Statement of Cash Flows .............................. 73 Trust and Agency (Fiduciary) Funds ............................... 75 Combining Balance Sheet ...................................... 75 Federal Way Retirement System Expendable Trust Fund Balance Sheet .......................................... 76 Statement of Revenues, Expenditures, and Changes in Fund Balance ....... , . 77 Combining Statement of Changes in Assets and Liabilities - AllAgency Funds ........................... ........... 78 General Fixed Assets Account Group ............................... 79 Schedule of General Fixed Assets - By Source ........................ 79 Schedule of General Fixed Assets - By Function and Activity ............... 80 Schedule of Changes in General Fixed Assets - By Function and Activity ........ 81 STATISTICAL SECTION General Governmental Expenditures and Other Uses by Function - General, Special Revenue and Debt Service Funds ...................... 1 83 Schedule of Major Revenues and Other Financing Sources by Source - General, Special Revenue and Debt Service Funds ...................... 2 84 Tax Revenue by Source - General, Special Revenue and Debt Service Funds ........ 3 85 Property Tax Levies and Collections ....... 4 ........ ....... 4 86 Assessed and Estimated Actual Value of Taxable Property ................... 5 87 Property Tax Rates - Direct and Overlapping Governments .................. 6 88 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita . 7 89 Computation of Limitation of Indebtedness ............................ 8 90 Computation of Direct and Overlapping Debt ........................... 9 91 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government Expenditures ................................ 10 92 Demographic Statistics ..................................... , ... 11 93 Property Value, Construction, and Bank Deposits ........................ 12 94 Principal Taxpayers ........................................... 13 95 Schedule of Insurance in Force .................................... 14 96 Salaries and Surety Bonds of Principal Officials ......................... 15 98 Miscellaneous Statistical Data ................................. . ... 16 99 CITY OF A Rr�-j 33530 1ST ',.1VAY SOUTH May 25, 1993 People of the City of Federal Way Honorable Mayor and City Council (206) 661-4000 FEDERAL WAY, WA 98003-6210 THE COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF FEDERAL WAY The comprehensive annual financial report of the City of Federal Way for the year ended December 31, 1992 is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the various funds and account groups of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. FINANCIAL REPORTING STANDARDS AND FORMAT The comprehensive annual financial report is presented in three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, the City's organizational chart and a list of principal officials. The financing section includes the general purpose financial statements and the combining and individual fund and account group financial statements and schedules, as well as the State Auditor's report on the general purpose financial statements. The statistical section includes selected financial and demographic information, generally presented on a multiyear basis. This report includes all funds and account groups of the City. There were no other governmental organizations and activities for which the City exercised oversight responsibility during the reporting period. As an aid to the reader, the major sections of this report have been segregated by divider pages which provide introductions to the sections. In the same manner, fund categories are segregated within the Combining/Individual Financial Statements section of this report. The fund types are presented in the combined general purpose statements in the same sequence in which they appear in the combining section. REPORTING ENTITY The City is a noncharter Optional Code City with a Council -Manager form of government. The City Council consists of seven councilmembers, all of whom are elected at large. The Council elects the Mayor from its members. All seven seats held by the interim City Council were succeeded as a result of the November 5, 1991 election. Effective January 1, 1992, four members were elected to serve four- year terms and three members were elected to serve two-year terms. After January 1, 1993, the four- year terms will be staggered to provide for Council elections every two years. The City Manager, who serves as the chief executive officer, is responsible for day -today administration of personnel, policies and programs. He is appointed by, reports directly to, and serves at the pleasure of the City Council. In response to direction given by the City Council, the number of staff members has been kept low and many services are contracted through private entities. The services provided include: police protection, construction and maintenance of streets, building inspection, jail services, planning and zoning, park maintenance, recreation programs, public health services, surface water management, municipal court services, and general administration, including finance. Services for a land use hearing examiner are contracted. Effective March 15, 1993, the City reorganized into seven major departments including City Manager; Law; Management Services; Parks and Recreation; Community Outreach and Policy Planning; Public Works; and Community Development. Fire protection and emergency medical services are provided by Fire District No. 39. The Federal Way Water and Sewer District delivers water and sewer services. 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 TRENDS The City of Federal Way incorporated on February 28, 1990. It is the sixth largest city in Washington State with a population of 72,350 as of April 1, 1992. Federal Way is located on a plateau adjacent to the Puget Sound in King County, eight miles north of downtown Tacoma and 25 miles south of downtown Seattle. The City o c c u p i e s approximately 19 square miles, and is served by Interstate 5 and state highways 99 and 509. The population in the area now known as the City of Federal Way continues to grow at a moderate pace, with the population as of April 1, 1993 estimated to be 72,532. The 1992 population figure of 72,350 is an increase of 2.4% over the 1991 figure of 70,600, provided by the State Office of Financial Management. Extending similar assumptions, the City is projected to reach a population base of 79,000 by the year 2000. iv In 1992, there were 29,850 housing units in Federal Way. Of these units, 60% were single family and 40 % were multi- family units. These statistics for housing units show a 6.9 % increase over 1990 and a 0.5% increase over 1991, with projections for the year 2000 reaching the 34,000 level. The community is residential and commercial, with the populace employed locally and in neighboring cities such as SeaTac, Kent, Tacoma, Bellevue, and Seattle. Employment in Federal Way is highly concentrated (83 %) in the retail and service sectors which respond primarily to the needs of the local market area population. Employment was estimated at 10,349 in 1988, 21,884 in 1991, and is projected to grow to 27,859 by the year 2000 - a 266% increase over 12 years. Major employers are the SeaTac Mall, Weyerhaeuser, the School District, St. Francis Community Hospital and Virginia Mason Clinic. The City's 1992 taxable retail sales were $812.5 million, a 5.5% increase over the annualized estimate ($770.1 million) for 1991. The retail sector of the local economy is anchored by the SeaTac regional mall, Costco, Fred Meyer, Eagle Hardware, and many other businesses adjacent to the City center. According to a listing of businesses registered with the City of Federal Way and sorted by Standard Industrial Classification, the business economy appears to be configured as follows: construction 8.4%; manufacturing 8.2%; transportation and public utilities 1.8%; wholesale trade 0.2%; retail trade 18.2%; services 61.6%; nonclassified 1.6%. In 1992, new improvements to real estate totalled approximately $65.5 million or 1.7% of the City's assessed valuation. The total assessed value of taxable property in Federal Way increased 13.4%, from $3.2 to $3.6 billion between 1991 and 1992. Real estate sales increased 9.7 %, from $265.7 million in 1991 to $291.6 million in 1992. A total of 1,865' building permits were issued in 1992 with a total valuation of $60.7 million. These figures were higher than 199l's results by 17 % and 37 %, respectively. Permits for single family residential housing totalled 400 and were valued at $36 million - an average of $96,300 each, or 21% below 1991. Commercial permits totalled 175 and had a value of $17 million which reflects a 54% increase from 1991. The Boeing Company announced on February 19, 1993 that up to 19,000 jobs will be lost over the next 18 months. This massive layoff is the result of the airline industry losses of an estimated $8 to $9 billion during the last three years. Airline companies are in serious financial trouble and to keep operating, they v must cut costs, reduce employment, postpone aircraft deliveries and cancel aircraft orders, with the latter two directly affecting the Boeing Company. City staff prepared an analysis which concluded that the realistic economic growth in the Puget Sound Region for 1993 will be approximately 0.62%. The analysis revealed that the bottom line affect on Federal Way could be minimal, resulting in a loss of $71,485 in sales tax revenues. The City's 1993 sales tax projections do not take into consideration the sales tax revenues which will be generated by Eagle Hardware and other new businesses. This revenue could be the economic shock absorber needed to shield a dramatic decrease in sales tax revenue. Other revenues are not expected to be affected dramatically because of the conservative projections used in estimating 1993 revenues. While the overall employment outlook for the State of Washington is cautious - two years of slow job growth ahead - the bright spots in the picture appear to be service -sector jobs, which are expected to dominate nationally and in Washington through the year 2000. Experts predict that the growth in services in the state will outpace aerospace and manufacturing through 1995. The fastest -growing occupations appear to be in the fields of health care and computer technology, with retail clerks the number one category. Given the strong retail base and significant service sector in the local economy as discussed above, Federal Way is well positioned to climb those growth curves. SIGNIFICANT EVENTS AND ACCOMPLISHMENTS Since the City officially incorporated on February 28, 1990, 1992 was the second full year of service to the community. Specific events or accomplishments in this dynamic year include the following: The City developed and appointed the City's Youth and Diversity Commissions, formed the City's Economic Development Board in cooperation with the Chamber of Commerce, enhanced community involvement through the offsite Council meeting, strengthened regional relationships, initiated action for the merger of the Federal Way Water and Sewer District into the city government, reviewed and analyzed contracting options for the provision of city services, and developed and implemented a Community Policing and Neighborhood Traffic Safety program. A total of 1,824 building permits were issued, 146 major discretionary land use permits and 312 code compliance complaints were received, and a number of carryover projects vested with King County were completed. - - The City instituted the Tidemark permit tracking system, increased outreach to Korean -speaking permit applicants, extended service hours for development services, initiated the "City Shape" project, developed three alternative visions of Federal Way's future, and compiled and reviewed a Capital Facilities Element and a Private Utilities Element for inclusion in the Comprehensive Plan as required by the state's Growth Management Act. ® Over 2,900 business registrations were processed, the codification of all City ordinances was completed, and posters, pins and bumper stickers were designed for the Neighborhood Safety Campaign. ® The first systematic, collaborative budget process was completed in 1992. Certificates of Participation were issued to acquire the Financial Center Building (City Hall), and the GFOA recognized the City through its awards for the Comprehensive Annual Financial Report and Budget documents. A The City thoroughly reviewed its existing insurance coverage, conferred with a loss control representative to set up facility inspections and a defensive driver training class, restructured its Risk Management/Purchasing programs, processed nearly twice as many purchase orders for payment than in 1991, reformatted the monthly financial report to enhance comprehension, implemented a new consolidated check request form, brought the budget module in the automated financial system on-line, and devised a method for transmitting payroll information which saved hours of work each pay period. The City's geographic information system began to be developed and computer networks were extended to remote sites. A full time System Manager was hired to replace two part time consulting contracts at a savings of $10,000 per year, and staff "trainers" received training on various software applications. • The City retained work-study legal interns, successfully defended the City's .08 DWI Standard, processed a 72% increase in traffic infraction filings over 1991, realized a 60% increase in filings of criminal citations over 1991, and coordinated all areas associated with the enforcement of the City's Criminal Code. ® In the area of surface water management, preparation of a GIS overlay began and the Panther Lake Surface Water Study was completed, as were multiple small capital improvement projects. The program itself was rounded out by hiring a maintenance crew, acquiring equipment and providing an enhanced level of service. The City eliminated the need for contracted inspection services by hiring three public works inspectors, reduced response time in the plan review process by adding two additional design staff, assumed responsibility for issuance and inspection of right-of-way permits from King County, assumed records of roadway and storm drainage construction from King County, began offering curbside collection of recyclables, held a citywide recycling event, hosted a yard waste recycling and chipping event, obtained State, Metro and developer funding, obtained over $400,000 in ISTEA Federal grants, began work on the City's Pavement Management System, completed the 1992 Pavement Overlay program, worked on three major street and signal improvements, and reduced the 1992 King County maintenance contract through the use of crews and private contractors. Human resource concerns received intense focus by conducting organizational training, analyzing health and dental coverage and the feasibility of self -funding, administering the employee recognition program, developing and implementing a program for complying with the requirements of the Americans with Disabilities Act, developing and publishing a hiring handbook, and developing and implementing a Community Involvement Program. The City developed multiple facilities at various park locations, completed design and began construction of Alderdale neighborhood park, acquired 78 acres under the King County Open Space Bond Program, submitted two park grant applications for $300,000 each, worked with 15 service organizations to complete park improvements, operated the City's first full year of recreation services, provided lifeguards at Steel Lake Beach, facilitated 10 Federal Way Arts Commission projects, implemented 21 human service contracts, developed and implemented CARES (an after school childcare program), and initiated Community Development Block Grant projects. vii OUTLOOK FOR THE FUTURE Long Term The blueprint for Federal Way's future is found in its adopted Comprehensive Plan. Key economic development goals in the plan include: Housin.2 and Population • Preserve the predominantly single-family character and appearance of the community by establishing population densities consistent with neighborhood and citywide objectives. m Create a diverse population by encouraging residential development with a mix of housing types at affordable costs, particularly for senior citizens and lower income families. • Assure the high quality of new and existing housing by consistent enforcement of reasonable housing and building standards that do not unnecessarily increase housing costs. ® Maintain safe, economically stable and attractive neighborhoods by providing a high level of public services, including utilities, streets, sidewalks, parks and recreation facilities. • Produce new housing that is planned and developed to protect natural systems and meet community design and landscaping standards. Commercial /Industrial e Provide employment opportunities within the community by attracting new industries and professional offices. • Establish well-defined and limited neighborhood business centers to provide convenience services to adjacent neighborhoods without adversely impacting neighborhood quality. a Control strip development on major arterials while maintaining existing vital businesses. • Define and implement a development and design concept for the City Center that establishes a vibrant focal point and identity for the community. • Build a transportation system that adequately serves commercial areas, encourages use of alternative modes of transportation for work trips, and allows commercial and industrial growth without creating additional congestion. 0 Establish design standards for commercial areas that are closely related to their functions but encourage attractive appearance and protection of the environment. • Protect industrial areas from encroachment by other uses and upgrade the quality of existing industrial areas. Open Space • Open spaces should be identified and preserved to maintain the natural beauty of the community and to provide views, protection of sensitive areas, recreation and other benefits. viii ■ Natural systems and natural features recognized for their sensitivity to urban development should be protected as open space when development occurs. Transportation • Develop a transportation system that provides mobility, and emphasizes safety and aesthetics as well as capacity concerns. • Plan and design transportation improvements in a regional context that integrates land use and circulation systems. Natural Envir nment ■ Preserve the natural character of sensitive areas, habitats, wetlands, stream corridors, lakes and aquifer recharge areas in order to protect public health, safety and welfare, and maintain the beauty of the community. • Protect the quality of surface and groundwater, and maintain an adequate public water supply. Overlaid upon these goals is the Growth Management Act of 1990, which requires that all cities within counties planning under the Act adopt a comprehensive land use plan on or before July 1, 1993. Mandatory elements in the comprehensive plan are the following: 1) land use, 2) housing, 3) capital facilities, 4) utilities, and 5) transportation. Short Term The City's immediate objectives continue to be to maintain its relative fiscal strength, facilitate the maturation of its municipal corporation, make city government easier to access, understand, and participate in, realize the community's values and preferences, and improve the quality of life for its people as well as the climate for business activities. In 1993, the City of Federal Way has managed to conservatively plan for the following enhancements to City services and facilities: • Funding has been provided to contract for two additional motorcycle police officers for reactive patrol, as well as for the Neighborhood Safety Program. a Resources will continue to be devoted to the City Center Land Use and Transportation studies along with the Public Involvement program. m Service delivery will be enhanced by hiring one Plans Examiner/Inspector, one Senior Planner, and one Water Quality Engineer. • Work will be completed to synchronize traffic signals on SR 99 and on 320th Street in the City Center area. • The initial implementation of the City's Geographic Information System is anticipated to be completed in 1993. • The Transportation Demand Management program will be developed through a contract with Metro. • Construction will begin on the Panther Lake Regional Detention Pond project. ix An innovative venture entered into by the City and the School District will come to fruition as construction begins on the 36-acre joint development of Campus Drive Park/School Site #6 in anticipation of a September 1994 opening. ■ Monies have been allocated to implementing a Special Populations program, including hiring one Recreation Coordinator. ® Funding has been provided to support the establishment and operation of a community/senior center, including hiring one Recreation Manager, one Recreation Coordinator, and one Administrative Assistant I. ■ From fund balance (General Fund), $300,000 has been set aside for a potential 1994 Steel Lake Park development grant match. ■ Appropriations have increased over $600,000 over 1992 for police, jail, contracted or mandated services such as State Auditor, and health services. ■ Salary and fringe benefit costs as a percentage of total expenditures will remain remarkably low at about 17 % - a little over half of the percentage allocated by all cities in the state. FINANCIAL INFORMATION The City of Federal Way is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the evaluation of relative costs and benefits of the control system requires estimates and judgments by management. Singie Audit As -a recipient of federal, --state and county financial assistance,_ the City is responsible for maintaining an _ adequate internal control structure to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management and the State Auditor's Office. As part of the City's single audit, tests are made to determine the adequacy of the internal control structure, including that portion related to federal financial assistance programs, as well as to determine that the government has complied with applicable laws and regulations. The results of the City's single audit for the year ended December 31, 1992 indicated that there were no material weaknesses in the internal control structure. Budgetary Controls The City maintains budgetary controls in accordance with the Revised Code of Washington (RCW 35A.33). The objectives of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund, Special Revenue Funds, Debt Service Fund and Internal Service Funds are included in the annual appropriated budget. The level of budgetary control at which expenditures cannot legally exceed the x appropriated amount is established at the individual fund level. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. All appropriations lapse at year end. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. Basis of Accounting All governmental funds, the expendable trust fund and agency funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when received in cash, except for revenues susceptible to accrual. Revenues considered susceptible to accrual are those that are measurable and available to finance the government operation during the current period. Expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred. All proprietary funds, non -expendable trust funds and pension trust funds use the accrual basis of accounting. Under the accrual basis, revenues are recorded when they are earned and expenses are recorded as soon as they result in liabilities for benefits received. GENERAL GOVERNMENT FUNCTIONS Overview The general governmental analysis will include the General Fund, all Special Revenue Funds and the Capital Project Fund. The City added three new special revenue funds during 1992, which has an effect of artificially inflating the 1992 financial performance as compared to 1991. These funds were the Solid Waste/Recycling Fund, Special Contracts/Studies Fund, and the Impact Fee Fund. The following presentation shows the operations for these funds during 1992: ATEl11ENT OPERATING STATEMENT ALL NEW SPECIAL REVENUE. FUNDS - 1992 Solid; Wastcl Spcaial =>irti-; Item Rvuycling Contractl5tudies;:;::::.:. l ripacf Fee Total Beginning Fund Balance $ --- $ --- $ --- $ Revenues: Services/Charges --- --- 548,335 548,335 Other Financing Sources 122,722 57,500 --- 180,222 Subtotal Revenues $ 122,722 $ 57,500 $ 548,335 $ 728,557 Expenditures: Other Services & Charges --- --- 196,562 196,562 Capital Outlay --- -- 27,500 27,500 Subtotal Transportation Expenditures $ — $ --- $ 224,062 $ 224,062 Ending Fund Balance $ 122,722 $ 57,500 $ 324,273 $ 504,495 Xi Overall financial performance in the General Fund, Special Revenue Funds and Debt Service Fund was very positive in 1992. Revenues and other sources of funds totalled almost $32.6 million as compared to $26.3 million for 1991. This results in an increase of 24.2 % (21.5 % excluding the new funds). Expenditures and other uses of funds totalled $28.9 million as compared to $22.8 million for 1991, an increase of 26.9 % . Excluding the new funds, expenditures increased by 25.9 % . Aggregate fund balances for these funds ended the year totalling $13.5 million, a $3.8 million increase over the year's beginning balance. The General Fund ended 1992 with a $3,484,753 fund balance. This was a $1.77 million increase over the fund balance at the end of 1991. General Fund revenues increased by $649,000 over 1991 and expenditures decreased by $268,000 although during 1991 the City transferred $2 million to a strategic reserve fund. Eliminating this transfer for 1991 would result in an increase in expenditures in 1992 of $1.732 million over 1991 reflecting the implementation of a modest range of City programs which were not yet operational in 1991. Revenue Summary The following charts present a summary of General, Special Revenue, and Debt Service Fund revenues, including other financing sources, for the 1992 calendar year as compared to 1991. A comparison of major revenue classifications for 1992 is also presented. For comparison purposes, the certificates of participation issued in 1991 have been eliminated from Other Financing Sources. xii 1992 REVENUES AND OTHER SOURCES: General, Special Revenue and Debt Service Funds Interest/Miscellaneaous (2.6%) Intergovernmental (28.6%) Flnes/Forfeltures (1.3%) Servlces/Charges (1 Lleensesj Taxes (44.0%) :)urces (9.0%) GENERAL. SPECIAL REVENUE, AND DEBT SERVICE FUNDS Revenues and Diller R1E➢1LnCiug Sj ur Revenues I g0L 195�1 change ,.: A��sounr Pereetzt Taxes $ 14,351,929 $ 13,359,964 $ 991,965 7.42% Licenses/Permits 771,568 720,363 51,205 7.11% Intergovernmental 9,349,850 5,467,866 3,881,984 71.00% Services/Charges 3,936,975 1,615,171 2,321,804 143.75% Fines/Forfeitures 414,178 288,254 125,924 43.69% Interest Earnings 512,702 677,120 (164,418) -24.28% Miscellaneous 344,958 44,869 300,089 668.81% Other Financing Sources 2,957,298 4,100,770 (1,143,472) -27.88% Total Revenues $ 32,639,458 $ 26,274,377 $ 6,365,081 24.23% Taxes, intergovernmental revenues, service charges, and miscellaneous were the revenue categories with the best performance during 1992. Taxes increased by 7.4% over 1991 based on increased sales tax ($350,000), local criminal justice sales taxes ($50,000) and property taxes ($500,000). Positive intergovernmental revenue performance was attributable to a $2.8 million Transportation Improvement Board grant, $815,000 from King County and $463,000 from Federal Way Water and Sewer District for the S. 356th Arterial Street project. These additions were offset by a $400,000 decrease in miscellaneous grants (in 1991 the City received an IAC grant for park acquisition). The City Council approved an increase in surface water fees for 1992. This accounted for $1.4 million increase in other services and charges. The receipt of $548,000 mitigation fees in the new impact fee fund also contributed to this growth. The decrease in other financing sources is the result of the transfer of $2 million from the general fund to the strategic reserve fund during 1991, although there were other miscellaneous transfers that occurred in 1992 and not in 1991. Interest earnings also decreased during 1992 due to the drop in the Washington State Investment Pool earnings rate from 6.21% in 1991 to 3.94% in 1992. Expenditure Summary The following charts present a summary of the General, Special Revenue, and Debt Service Fund expenditures for the year ending December 31, 1992. For comparison purposes in 1991 the $1.450 million certificates of participation have been eliminated. 1992 EXPENMURFS BY FUNCTION/OTHER USES General, Special Revenue and Debt Service Funds Other Financing Uses (11.7%) Debt Service (7.z Capital Outlay (1.4%) Economlc Environment (6.9%) - Health (3. Culture & Recreation (8.3%) General Government (8.5%) Equity Transfers (1.4%) ,,_.,—Public Safety (22.9%) Physical Environment (0.4%) Transportation (27.5%) ............. GENE RAL. SPECIAL REVENUE, AIN 3 € EMT SERVICE %'[1 S . . ...:...:.....:..: EWndltnres By Funetl U ter . . .. . . An ow �'ercent General Government $ 2,459,407 $ 2,124,780 $ 334,627 15.75 % Public Safety 6,602,857 6,623,270 (20,413) -0.31 % Physical Environment 121,866 18,755 103,111 549.78% Transportation 7,924,118 4,530,747 3,393,371 74.90% Economic Environment 2,000,947 2,283,794 (282,947) -12.39% Health 1,069,470 468,430 601,040 128.31% Culture & Recreation 2,406,194 1,908,171 498,013 26.10% Capital Outlay 401,998 --- 401,998 N/A Debt Service -Principal 365,000 300,000 65,000 21.67% Debt Service -Interest 1,736,319 1 161,418 1,574,901 975.76%b Other Financing Uses 3,394,980 4,121,343 (736,363) -17.87% Residual Equity Transfer Out 404,420 221,320 183,100 82.73% Total Expenditures $ 28,877,466 $ 22,762,028 $ 6,115,438 26.87% AV GI NERAL, SPECIAL. RE5'ENUE, AND DEBT S i . ,. .. Fxper;ditures By Object ... CJbject.,.. 1992 �'hrai e tli7t Amo .. Percent:: Personal Services $ 4,828,615 $ 3,408,259 $ 1,420,356 41.67% Supplies 434,561 230,673 203,888 88.39% Other Services and Charges 2,820,023 2,893,192 (73,169) -2.53% Intergovernmental 12,535,476 13,080,778 (545,302) -4.17% Capital Outlay 4,724,663 1,750,503 2,974,160 169.90% Debt Service Principal 365,000 300,000 65,000 21.67% Debt Service Interest 1,733,819 161,418 1,572,401 974.12% Interfiind Services 1,435,309 937,205 498,104 53.15% Total Expenditures $ 28,877,466 $ 22,762,028 $ 6,115,438 26.87% 1992 EXPENDITURES BY OBJECT General, Special Revenue and Debt Service Funds Debt Service (7.3%) Capital Outlay (16.3%) Intergovernmental (43.4%) Services (16.7%) Supplies (1.5%) Services/Charges (9.8%) nterfuncl Services (5.0%) Transportation and Capital Outlay both increased during 1992 due to the S. 356th Arterial Street project that was partially funded by a grant and intergovernmental revenues. Debt Service interest increased due to a full year of interest on the February 1991 general obligation bond issue and the September 1991 Certificates of Participation issue. The increase in Health is the result of increased health services contract costs with King County. This also represents a reclassification of human service contracts from economic environment to human service during 1992. During 1992, the second full year of operations, the City implemented a modest range of City programs that were not operational in 1991. This resulted in increased personal service and supply expenditures. Fund Balance Overall fund balances in the General and Special Revenue Funds totalled $12.1 million in 1992 compared to $7.7 million in 1991. This represents an increase of 57.8%. The fund balance in the Debt Service xv Fund reflects revenues set aside to pre -fund the debt service on outstanding general obligation debt. GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS sis of Fund Balance:' Analysis Change Anwuns::'; Peromf Fund $lance 1992 1991 General $ 3,494,753 $ 1,712,553 $ 1,772,200 103.48 % Special Revenue Street 833,975 1,488,059 (654,094) -43.96% Arterial Street 2,116,367 972,674 1,143,693 117.58% 1st lk % Real Estate Tax 128,507 112,115 16,392 14.62% 2nd 'k % Real Estate Tax 101,212 87,479 13,733 15.70% Solid WastelRecycling 122,722 --- 122,722 N/A Special Contracts/Studies 57,500 — 57,500 N/A Grants -Miscellaneous Governmental 286,252 499,274 (213,022) -42.67% Community Development Block Grant --- -- N/A Paths and Trails Reserve 19,395 10,817 8,578 79.30% Surface Water Management 2,550,008 788,737 1,761,271 233.30% Impact Fee 324,273 -- 324,273 N/A Strategic Reserve 2,078,894 2,000,000 78,894 3.94% Subtotal Special Revenue 8,619,105 5,959,155 2,659,950 44.64% Debt Service 1,434,785 2,104,943 (670,158) -31.4% Total Fund Balance $ 13,538,643 $ 9,776,651 $ 3,761,992 38.48% PROPRIETARY OPERATIONS In 1992 the City utilized five internal service funds to account for activities related to risk management, data processing/telecommunications, support services, fleet and equipment, and buildings and furnishings. Operation and depreciation related replacement charges to users are based on office staff counts, equipment used and specific depreciation schedules. Residual equity transfers are recorded from other City funds to finance first time asset acquisition. The City currently does not have enterprise'funds. PENSION TRUST FUND OPERATIONS The City of Federal Way exercised its option as a newly incorporated municipality to create a substitute retirement plan in lieu of participating in the Social Security program. Under the City's defined contribution retirement plan, the City matches employee contributions equivalent to 6.2 % of gross taxable earnings up to Social Security earnings limits. As a part of its matching contribution, the City pays insurance premiums for survivors, accidental death and dismemberment, disability, and lump sum death benefits. The remaining portion of the City's contribution (approximately 5.2% of gross taxable earnings) constitutes cash payments to the expendable trust fund. The plan design uses the institutional method for investments. The trust fund assets were placed in the State Investment Pool until October 1991 and then invested through a financial advisor. Investment policies and an asset allocation strategy were determined by the City's Retirement System Board in conjunction with an employee advisory group. xvi DEBT ADMINISTRATION During 1992, the City issued $2,330,000 in certificates of participation, a financing lease obligation to purchase the Financial Center property, the City's current City Hall. The City's outstanding debt is .48% of its taxable assessed valuation. As of December 31, 1992, the City's remaining debt capacities are summarized below: Use ® General Government Use Ca aci • Non -voted: $ 14,867,454 • Certificates of Participation: 23,601,799 • Voted: 3fi 2� 6 Subtotal General $ 74,708,899 Park and Open Space Use • Voted: 90,599,114 Utility System Use • Voted: 90.599.1 i4 Total Capacity $255 Non -voted (councilmanic) general obligation bonds and certificates of participation are reductions in the general government debt capacity. To the extent that such debt is issued, the City's voted debt capacity is reduced. CASH MANAGEMENT On December 31, 1992 the City had $15,310,601 invested in the State Local Government Investment Pool. The Pool investments included bankers acceptances (6.2%), repurchase agreements (46.4%), U.S. Agency securities (9.3%), U.S. Treasury securities (34.9%), and certificates of deposit (3%). Pool investments had an average term to maturity of 62 days. The state charges an administrative fee equivalent to five basis points (.05 %). The 1992 average monthly earnings rate was approximately 3.94% after deducting the administrative fee. Investments were fully guaranteed by federal insurance or state collateral programs. RISK MANAGEMENT The City maintains insurance against most normal hazards except for unemployment insurance, for which it has elected to become fully self -insured. Related premiums received by the Risk Management Fund are 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. Through its Risk Management Fund, the City is also recovering insurance premium costs for general liability coverage and building reserves for a future general liability self-insurance program. During 1992, the City purchased commercial insurance policies from commercial insurers. xvii During 1992, the City used the Risk Management Internal Service Fund to account for its risk financing activities. It is the opinion of the City's legal staff that at year end there were no outstanding claims that met expenditure accrual or loss disclosure criteria. The City's industrial insurance is provided by Washington State and is administered by the Department of Labor and Industries. 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. SUBSEQUENT EVENTS Following the year ended December 31, 1991 and prior to the publication of this CAFR, the following subsequent events occurred and are disclosed in the notes to the financial statements: The City purchased a Community/Senior Center facility for $695,941. The City issued $2.39 million in general obligation bonds to finance Campus Drive Park. The City also refunded 1991 general obligation bonds in the amount of $12.105 million, resulting in a net present value saving of $356,000. In conjunction with these two bond issues, the City received an upgraded bond rating from Moody's Investors Service from A to Al. 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-128. The 1992 audit of the City has been completed in conformance with generally accepted auditing standards. The financial statements of all City funds and account groups have been included in this audit. The City has been given an unqualified opinion for 1992. The State Auditor's report on the general purpose 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 Excellence in Financial Reporting to the City of Federal Way for its comprehensive annual financial report (CAFR) for the year ended December 31, 1991. In order to be awarded a Certificate of Achievement, a governmental entity must publish an easily readable and efficiently organized CAFR, the contents of which conform to program standards. Such reports 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 report continues to conform to the Certificate of Achievement Program 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 annual budget for the year beginning January 1, 1992. 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. xviii ACKNOWLEDGMENTS The preparation of this comprehensive annual financial report represents the culmination of months of concerted teamwork by the entire staff of the Management Services Department. Many members of the department demonstrated unswerving personal determination and dedicated many long days of focused attention to produce this unique and exemplary document. Very special thanks are due to Marie Mosley, John Caulfield, Demy Alcantara, Alexis McAlpine, Tam Swett, Becky Metcalf, and Terri Mendenhall. In addition, staff in all City departments should be recognized for responding so positively to the requests for detailed information which accompany each annual audit. 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, J. Brent McFall City Manager Deborah S. Larson - Director of Management Services xix Cmr OF G City of Federal Way / 1 CITY OFFICIALS ROBERTSTEAD Mayor JOEL MARKS MARY GATES Deputy Mayor Councilmember RON GINTZ MAHLON'SKIP' PRIEST LYNN TEMPLETON Councilmember Councilmember Councilmember J. BRENT McFALL City Manager OTHER ADMINISTRATIVE OFFICERS RAY TOMLINSON Councilmember Assistant City Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stephen L. Anderson Assistant City Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kenneth E. Nyberg City Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carolyn Lake CityClerk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maureen Swaney Management Services Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deborah S. Larson Parks Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Erik Joe Stevens Public Works Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Phillip Keightley City of Federal Way PEOPLE OF FEDERAL WAY MAYOR R CITY COUNCIL BOARDS AND COMMISSIONS -----------------------------------------r----------------------- ----------------------r-------------------------------------------- PLANNING 1 T. COMMISSION i HUMAN I DivERSITy- SERVICESCOMMISSION i GON1M6516N I YOUrH i COMMISSION ETHICS t ARTS ] PARKS • BOARD I COMMISSION I OCAMiM�aJ ti.........r........ I ------------a - - _ l— 1--=----�---i .......-- € ---- - ---------------- CITY MANAGER COMMUNITY OUTREACH & POLICY PLANNING —� I I II POLICY RESEARCH R DEVELOPMENT I • Lang Range Planning 3 • CltyShape • Capltd Facilities Plan • LeplslalNe/Reglonai Affairs r COMMUNITY OUTREACH --� • Community hvotvement • Neighborhood Safety • Human Services POLICE • Drug Aware Resistance Education • Crime Anaiyls/Prevention • Traffic Enforcement • hvesllgattan • Proactive/Reactive Patrol _ FIRE • Rre Suppreslon/Prevention • Emergency Medical Services • Public Education • Hazardous Materials • Dispatch/Communications • Disaster Preparedness MANAGEMENT SERVICES o City CIerWHea*V Examiner • Accounting/Treasrxy • Data Processing • Purchasing • Risk Management • Fhalclai Plamklg • Budgeting • Human Renounces CITY ATTORNEY • Advise Council, Community Councils, Boards and Commhlons • Advice and DPW" • Prosecution • CIW Lltlgallon PARKS ! RECREATION • Recreation • Grounds Maintenance • PadWOpen Space Requisition • Park Operatiorx/Development • Cultural/Performing Art COMMUNITY DEVELOPMENT SERVICES PUBLIC WORKS • Traffic • Street$ • Surface Water • Development Review • Solid Waste/Recycling DEVELOPMENT SERVICES • Current Planning • Building ...... -• WATER/SEWER DISTRICT • Water Supply/P mping/Dlshibutlon • Sewage C. d ocillon/Pumping • Trrxzmms�lon • Sewage Treatment • System Maintenance/Construction City of Federal Way / 3 Certificate of Achievement The Government Finance Officers Association of the United States and Canada for Excellence (GFOA) awarded a Certificate of Achievement for Excellence in Financial in Financial Reporting to the City of Federal Way for its comprehensive annual financial Reporting report for the fiscal year ended December 31, 1990. The Presented to Certificate of Achievement is a prestigious national award recognizing conformance with City of Federal Way the highest standards for � preparation of state and local Washington government financial reports. For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 1991 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. NGe LI,rFFjI UU terSYe MM 6k cIWM.MN President SMAL �'oa as CHICASS Y�� zerme Executive Director In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Federal Way has received a Certificate of Achievement for the last two consecutive years. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA. CITY FEM OF i � r STAT E AU QITOR'S OFFICE Brian Sonntag STATE AUDITOR Jack. Heinricher ASSISTANT STATE AUDITOR INDEPENDENT AUDITOR'S REPORT May 17, 1993 The Honorable Mayor and City Council City of Federal Way King County, Washington We have audited the general-purpose financial statements of the City of Federal Way, King County, Washington, as of and for the fiscal year ended December 31, 1992, as listed in the table of contents. These financial statements are the responsibility of the city's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was performed pursuant to the Revised Code of Warshipigron 43.09.260, under which a full report on the results of this audit will be issued. This report may include findings and recommendations on compliance matters, internal control procedures, and questionable costs or contingencies that would not be material in relation to the general-purpose financial statements taken as a whole. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the City of Federal Way, King County, Washington, at December 31, 1992, and the results of its operations and cash flows of its proprietary fund type for the fiscal year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general-purpose financial statements taken as a whole. The combining, individual fund, and account group financial statements and schedules listed in the table of contents are presented for purposes of additional analysis, and are not a required part of the general-purpose financial statements of the City of Federal Way, King County, Washington. The information has been subjected to the procedures applied in the audit of the general-purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general-purpose financial statements taken as a whole. The other data included in this report, designated as the statistical section in the table of contents, has not been audited by us and, accordingly, we express no opinion on such data. Ver ly y s, Brian Sonntag State Auditor LEGISLATIVE BUILDING o PO BOX 40021 o OLYMPIA W A 98504-0021 ® (206) 753-5277 . FAX (206) 753-0646 CITY OF CITY (W Y� R� General Purpose Financial Statements 8 / City of Federal Way COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1992 ASSETS Cash and cash equivalents (Note 4) Cash with escrow agent Cash - deferred compensation (Note 9) Investments with plan administrator Receivables (net) (Note 5): Taxes Accounts and contracts Interest Due from other governments (Note 5) Due from other funds/interfund loans receivable (Note 13) Property/equipment/improvements (net) (Note 7) Amount available in debt service funds Amount to be provided for retirement of long-term debt TOTAL ASSETS LIABILITIES AND FUND EQUITY Liabilities: Vouchers payable Accounts/payroll payable Retalnage payable Retainage payable - with escrow agent Interest payable Due to other governments - (Note 6) Due to other funds/interfund loans payable (Note 13) Deferred compensation payable (Note 9) Custodial accounts Deposits payable General obligation bonds (Note 12) Certificates of participation payable (Note 12) Compensated absenses payable (Note 12) Deferred -revenues -(Note 5)_ TOTAL LIABILITIES Statement 1 Governmental Fund Types Special Debt Capital General Revenue Service Projects $ 3,912,904 $ 8,859,597 $ 1,438,177 $ 404,463 394,906 107 88,973 1,186,143 1,074,909 60,000 - - $ 5,554,060 $ 10,023,479 $ 1,438,177 $ 404,463 $ 1,675,950 $ 924,252 $ 1,315 $ - 25,352 13,101 2,077 4,000 339,215 - 14,702 60,000 - - 4,706 3,610 344,597 64,196 2,069,307 1,404,374 3,392 Fund equity and other credits: Contributed capital (Note 14) - - Investment In general fixed assets - - Retained earnings - unreserved - - - Fund balance: Reserved for: Interfund bans 60,000 - Employee retirement - - Debt service - 1,434,785 Paths and trails - 19,395 - Petty cash/change fund/travel advance 6,720 - Unreserved: Undesignated 3,418,033 8,599,710 404,463 TOTAL FUND EQUITY AND OTHER CREDITS 3,484,753 8,619,105 1.434,785 404,463 TOTAL LIABILITIES & FUND EQUITY & OTHER CREDITS $ 5,554,060 $ 10,023,479 $ 1,438,177 $ 404,463 See accompanying notes to financial statements. Page 1 of 2 City of Federal Way / 9 Statement 1 (continued) Proprietary_ Fiduciary Account Groups Totals Internal Trust and General General Long- (Memorandum Only) Service Agency Fixed Assets term Debt 1992 1991 $ 658,562 $ 193,898 $ $ $ 15,467,601 $ 10,750,600 165,880 165,880 - 283,727 283,727 224,971 885,316 885,316 479,656 - 394,906 294,063 89,080 23,932 4,179 4,179 4,480 _ - 2,261,052 1,453,565 - 14,702 - 74,702 60,000 4,213,842 - 24,438,325 - 28,652,167 24,769,885 - 1,434,785 1,434,785 2,104,943 _ - 13,688,533 13,688,533 13,340,202 $ 4,872,404 $ 1,547,702 $ 24,438,325 $ 15,123,318 $ 63,401,928 $ 53,506,297 $ 231,161 $ 7,327 $ - $ - $ 2,840,005 $ 1,865,934 37,119 - 77,649 195,235 - 8,008 8,008 - 165,880 165,880 - - 42,980 95,169 438,384 39,491 - 74,702 60,000 283,727 283,727 224,971 12,530 12,530 12,530 6,034 78,191 - 92,541 68,759 - _ 13,590,000 13,590,000 13,910,000 2,330,000 1,405,000 3,735,000 1,450,000 4,486 128,318 132,804 87,233 408,793 256,983 2,608,800 650,832 15,123,318 21,860,023 18,214,116 2,136,961 - - 2,136,961 1,326,890 - 24,438,325 24,438,325 23,522,754 126,643 126,643 127,340 _ _ 60,000 60,000 896,870 896,870 537,782 _ 1,434,785 2,104,943 - 19,395 5,000 6,720 600 - - _ 12,422,206 7,606,872 2,263,604 896,870 24,438,325 41,541,905 35,292,181 $ 4,872,404 $ 1,547,702 $ 24,438,325 $ 15,123,318 $ 63,401,928 $ 53,506,297 Page 2 of 2 CITY OF City of Federal Way / 11 Statement 2 COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS For the Year Ended December 31,1992 Fiduciary Governmental Fund Types Fund T7e Totals Special Debt Capital Expendable (Memorandum only) General Revenue Service Projects Trust 1992 1991 REVENUES: Taxes $ 12,893,826 $ 1,458,103 $ - $ - $ - $ 14,351,929 $ 13,359,964 Licenses and permits 737,071 34,497 - - - 771,568 720,363 Intergovernmental 2,540,096 6,809,754 - - - 9,349,850 5,467,866 Service charges and fees 666,194 3,270,781 - - 3,936,975 1,615,171 Fines and forfeitures 414,178 - - - - 414,178 288,254 Miscellaneous Interest 203,761 308,941 - - 27,181 539,883 694,583 Other 106,214 238,744 - 411,257 756,215 488,534 TOTAL REVENUES 17,561,340 12,120,820 - 438,438 30,120,598 22,634,735 EXPENDITURES: Current: General government 2,451,514 7,893 103,333 2,562,740 2,162,794 Security of persons and property 6,602,685 172 - - 6,602,857 6,623,270 Physical environment 18,960 102,906 - 121,866 18,755 Transportation - 7,924,118 7,924,118 4,530,747 Economic environment 1,850,900 149,947 2,000,847 2,283,794 Health 1,064,820 4,650 - 1,069,470 468,430 Culture and recreation 2,377,847 28,337 - - 2,406,184 1,908,171 Capital outlay: General government 401,998 - - - 401,998 12,633,622 Certificates of participation - - - 1,450,000 Debt Service: Principal - 365,000 - 365,000 300,000 Interest and fiscal charges - 1,736,319 - 1,736,319 161,418 TOTAL EXPENDITURES 14,768,724 8,218,023 2,101,319 - 103,333 25,191,399 32,541,001 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 2,792,616 3,902,797 ,101,319 - 335,105 4,929,199 (9,906,266) OTHER FINANCING SOURCES (USES): Proceeds from certificates of participation - - - - - - 1,450,000 Bond proceeds - - - - - 12,500,764 Operating transfers in (Note 13) - 1,526,137 1,431,161 403,699 23,983 3,384,980 4,121,343 Operating transfers out (Note 13) 63,673 (2,621,307) - (3,384,980) (4,121,343) TOTAL OTHER FINANCING SOURCES (USES) (763,673) 1,095,170 1,431,161 403,699 23,983 13,950,764 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES 2,028,943 2,807,627 (670,158) 403,699 359,088 4,929,199 4,044,498 FUND BALANCES AT BEGINNING OF YEAR 1,712,553 5,959,155 2,104,943 764 537,782 10,315,197 6,492,019 Residual equity transfers out (Note 13) (256,743) (147,677) - - (404.420) (221,320) FUND BALANCES AT END OF YEAR $ 3,484,753 $ 8,619,105 $ 1,434,785 $ 404,463 $ 896.870 $ 14,839,976 $ 10,315,197 See accompanying notes to financial statements. 12 / City of Federal Way Statement 3 COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUND TYPES FOR WHICH ANNUAL BUDGETS HAVE BEEN LEGALLY ADOPTED REVENUES: Taxes Licenses and permits Intergovernmental Service charges and fees Fines and forfeitures Miscellaneous: Interest Other TOTAL REVENUES For the Year Ended December 31, 1992 General Fund Budget Actual $ 12,814,894 $ 12,893,826 $ 838,936 737,071 2,393,868 2,540,096 671,458 666,194 506,320 414,178 Special Revenue Fund Types Variance Variance Favorable Favorable (Unfavorable) Budget Actual (Unfavorable) 78,932 $ 1,422,512 $ (101,865) 182,617 146,228 5,344,851 (5,264) 3,370,073 (92,142) - 1,458,103 $ 35,591 34,497 (148,120) 6,436,887 1,092,036 2,722,446 (647,627) 480,000 203,761 (276,239) 138,944 224,573 85,629 84,387 106,214 21,827 - 238,744 238,744 17,789,863 17,561,340 (228,523) 10,458,997 11,115,250 656,253 EXPENDITURES: Current: General government 3,497,905 2,451,514 1,046,391 Security of persons and property 7,000,000 6,602,685 397,315 - - - Physical environment 18,755 18,960 (205) 67,001 64,105 2,896 Transportation - - - 10,381,178 7,700,056 2,681,122 Economic environment 2,267,929 1,850,900 417,029 - - - Health 1,076,505 1,064,820 11,685 - - - Culture and recreation 2,969,466 2,377,847 591,619 33,278 28,337 4,941 Capital outlay 1,437,300 401,998 1,035,302 - - - Debt service: Principal - - - Interest and fiscal charges - - - - TOTAL EXPENDITURES 18,267,860 14,768,724 3,499,136 10,481,457 7,792,498 2,688,959 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (477.997) 2,702,616 3,270,613 (22,460) 3,322,752 3,345,212 OTHER FINANCING SOURCES (USES): Operating transfers in - 1,371,150 1,451,968 80,818 Operating transfers out (759,690) (763,673) 3,983 (1,629,323) (2,214,738) (585,415) TOTAL OTHER FINANCING SOURCES (USES) (759.690) (763,673) (3,983) (258,173) (762,770) (504,597) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES (1,237,687) 2,028,943 3,266,630 (280,633) 2,559,982 2,840,615 FUND BALANCES AT BEGINNING OF YEAR 1,237,687 1,712,553 474,866 2,551,143 3,459,881 908,738 Residual equity transfers out - (256.743) (256.743) (147,677) (147,677) FUND BALANCES AT END OF YEAR $ - $ 3,484,753 $ 3,484,753 $ 2,270,510 $ 5,872,186 $ 3,601,676 See accompanying notes to financial statements. Page 1 of 2 City of Federal Way / 13 Statement 3 (Continued) Totals Debt Service Fund Types Memorendum Onl WI Variance Variance Favorable 1992 Favorable 1991 Budget Actual (Unfavorably) Budget Actual (Unfavorable) Actual $ $ $ 14,237,406 $ 14,351,929 $ 114,523 $ 13,359,964 1,021,553 771,568 (249,985) 720,363 _ 7,738,719 8,976,983 1,238,264 4,760,713 4,041,531 3,388,640 (652,891) 1,615,171 506,320 414,178 (92,142) 288,254 618,944 428,334 (190,610) 677,352 84,387 344,958 260,571 44,868 28,248,860 28,676,590 427,730 21,466,685 3,497,905 2,451,514 1,046,391 2,124,780 7,000,000 6,602,685 397,315 6,605,948 85,756 83,065 2,691 18,755 10,381,178 7,700,056 2,681,122 4,530,746 2,267,929 1,850,900 417,029 2,093,469 1,076,505 1,064,820 11,685 468,430 3,002,744 2,406,184 596,560 1,908,171 1,437,300 401,998 1,035,302 - 365,000 365,000 365,000 365,000 - 300,000 1,772,360 1,736,319 36.041 1,772,360 1,736,319 36,041 161,418 2,137,360 2,101,319 36,041 30,886,677 24,662,541 6,224,136 18,211,717 (2,137,362L(2,101,319) 36,041 (2,637,817) 4,014,049 6,651,866 3,254,968 1,466,702 1,431,161 (35,541) 2,837,852 2,883,129 45,277 2,100,770 (2,389,013) (2,978,411) (589,398) (4,121,343) 1.466,702 1,431,161 (35,541) 448,839 (95,282) (544.121) _ (2,020,573) (670,658) (670,158) 500 (2,188,978) 3,918,767 6,107,745 1,234,395 2,104,943 2,104,943 5,893,773 7,277,377 1,383,604 6,264,303 (404,420) (404,420) (221,320) 1,434,285 $ 1.434,785 $ 500 $ 3,704,795 $ 10,791,724 $ 7,086,929 $ 7,277,378 Page 2of2 14 / City of Federal Way COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES Statement 4 IN FUND EQUITY - ALL PROPRIETARY FUND TYPES For the Year Ended December 31, 1992 Internal Service Funds Totals (Memorandum only 1992 1991 OPERATING REVENUES: Service charges and fees $ 1,299,809 $ 989,908 Miscellaneous 40,625 387 TOTAL OPERATING REVENUES 1,340,434 990,295 OPERATING EXPENSES: Personnel services 136,248 71,769 Services and charges 673,858 484,008 Materials and supplies 174,669 178,996 Insurance 126,084 61,681 Claims 35,253 6,388 Depreciation 173,356 79,759 TOTAL OPERATING EXPENSES 1,319,468 882,601 OPERATING INCOME (LOSS) 20,966 107,694 NON -OPERATING REVENUES (EXPENSES): Interest income 18,693 19,646 Interest expense (28,968) - —TOTAL NON -OPERATING REVENUES (EXPENSES) (10,275) 19,646 NET INCOME (LOSS) 10,691 127,340 RETAINED EARNINGS, January 1 127,340 Residual equity transfers out (Note 13) (11 ,38S) _ RETAINED EARNINGS, December 31 126,643 127,340 CONTRIBUTED CAPITAL, January 1 1,326,890 - Increases to contributed capital (Note 14) 810.071 1,326,890 CONTRIBUTED CAPITAL, December 31 2,136,961 1,326,890 FUND EQUITY AT END OF YEAR $ 2,263,604 $ 1,454,230 See accompanying notes to financial statements. City of Federal Way / 15 COMBINED STATEMENT OF CASH FLOWS Statements ALL PROPRIETARY FUND TYPES For the Year Ended December 31, 1992 Internal Service Funds Totals (Memorandums only) 1992 1991 CASH FLOWS FROM OPERATING ACTIVITIES: $ 1,299,809 $ 989,909 Cash received from users (136,248) ( Cash payments to suppliers for goods/services (135,253) (66,306) (66,114) Cash payments to employees (46,340) (2,287) Cash payments to claimants (46,659 (22,387) Cash payments to other funds for services 46,659 387 Other operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 384,iB9 279,81 Q CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: NET CASH PROVIDED (USED) BY NON - CAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: (415,808) (225,221) Acquisition of capital assets 8 225,221 Cash contributions for capital acquisitions (28,968) (1 Interest paid on debt service (11,388) Residual equity transfers out NET CASH PROVIDED (USED) FOR CAPITAL AND RELATED FINANCING ACTIVITIES (40,356) CASH FLOWS FROM INVESTING ACTIVITIES: 18,693 19,646 Receipts of interest NET CASH PROVIDED (USED) IN INVESTING 18,693 19,646 ACTIVITIES NET INCREASE (DECREASE) IN CASH AND CASH 359,106 299,456 EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 299,456 - CASH AND CASH EQUIVALENTS AT END OF YEAR $ 858,562 $ 299,456 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES $ 20,966 $ 107,694 Operating income Adjustments to reconcile operating income to net cash provided by operating activities: 181,389 759 Depreciation expense 181,389 86,894 86,894 Increase in vouchers/accounts payable Increase in accrued payroll/ (976) 5,483 compensated absences payable - Increase in deposits payable , TOTAL ADJUSTMENTS 359,803 03 172.110 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 384,769 $ 279,810 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Contributions of capital assets $ 394,263 $ 1,1 D2,264 In 1992, the City Issued $2,330,000 in Certificates of Participation to pay the cost of acquiring a City Hall by a means of a lease with the option to purchase. See accompanying notes to financial statements. CITY OF G r r City of Federal Way / 17 NOTES TO THE FINANCIAL STATEMENTS December 31, 1992 INDEX Note Page 1 Summary of Significant Accounting Policies ....................... 18 Reporting Entity ...................................... 18 Basis of Presentation --Fund Accounting ....................... 19 Basis of Accounting .................................... 20 Budgets and Budgetary Accounting .......................... 21 Assets, Liabilities and Equities ............................. 22 Cash and Cash Equivalents ............................ 22 Temporary Investment ............................... 23 Receivables...................................... 23 Amounts Due to and from Other Governments; Interfund Loans ..... 23 Inventories ...................................... 23 Fixed Assets ..................................... 23 Depreciation ..................................... 24 Compensated Absences Payable ......................... 24 Long -Term Debt ....... . ........................... 25 Deferred Revenues ................................. 25 Fund Equity -Reserves and Designation ..................... 25 Interfund Transactions .................................. 25 Comparative Data ..................................... 25 Total Columns on Combined Statements - Overview 25 2 Stewardship, Compliance and Accountability ....................... 26 3 Supplemental Appropriations ................................. 26 4 Cash and Investments ...................................... 27 5 Receivables and Due From Other Governmental Units ................ 28 6 Due To Other Governmental Units ............................. 29 7 Fixed Assets and Depreciation ................................ 30 8 Pension Plans .......................................... 31 9 Other Employee Benefits ............................ . ...... 34 10 Risk Management ........................................ 34 11 Estimated Arbitrage Rebate .................................. 36 12 Long -Term Debt ......................................... 36 13 Interfund Transactions ..................................... 40 14 Contributed Capital ....................................... 42 15 Contingencies and Litigation ................................. 42 16 Fund Additions and Changes ................................. 43 17 Reporting Change .............. ........................ 43 18 Subsequent Events ................ . ....................... 43 18 / City of Federal Way For the Year Ended December 31, 1992 NOTE 1: Summary of Significant Accounting Policies The City of Federal Way, King County, Washington was incorporated on February 28, 1990 and operates under the laws of the State of Washington applicable to an Optional Municipal Code City (RCW 35A) with a Council -Manager form of government. Under the Council -Manager form of government, the voters elect, at large, a seven -member City Council, and the Council elects one of its members to serve as Mayor. The first council served a two-year term ending December 31, 1991, with all seven positions up for re-election for staggered terms of two and four years. In the future, all terms will be for a period of four years allowing for council member consistency and staggered elections. The City Manager is appointed by the Council to act as the chief executive officer of the City and is responsible to the Council for proper administration of all City affairs. The City of Federal Way is a general purpose government with its fiscal year ending December 31. The City provides a broad range of general government services. 1992 marks its second full year of existence as a municipality. Its services are in transition and are expanding to meet both the public's needs and those related to infrastructure. During its transition period, the City's management has continued to contract with King County, the local Fire District and other agencies to provide specific services, such as law enforcement, fire protection, storm and surface water utility billings, court services, garbage collection and various public works services. The accounting and reporting policies of the City conform to generally accepted accounting principles for governments, and are regulated by the Washington State Auditor's Office, Division of Municipal Corporations. The City's significant accounting policies are described below. Reporting Entity The City's Comprehensive Annual Financial Report (CAFR) includes all funds, account groups, agencies and boards controlled by or dependent on the City. Under Section 2100 of the Codification of Governmental Accounting and Financial Reporting Standards, the primary basis of determining whether outside agencies and organizations should be considered component units of the City and included in the City's financial statements is a manifestation of oversight authority. Criteria used in making a determination of oversight authority include whether the City has the authority to adopt the organization's budget, approve expenditures, appoint the governing body, approve selection of key management staff, significantly influence aperating-decisions or whetherrthe City can be-heldaccountablefor related-fiscaimatters and-oLits.,�ndir,g debit obligations. Component unit status may also be assigned to organizations having a special financing relationship with the City or conducting activities benefitting the City and/or its citizens within the City's geographic boundaries that are generally available to all residents. There are no instances in which factors other than oversight responsibility are so significant in the relationship between a particular organization and the City that the exclusion of such organization would be misleading. Based on application of the above criteria for a component unit, and the criteria for defining joint ventures set forth under section J50.101 of the Codification of Governmental Accounting and Financial Reporting Standards, none of the privately - owned and government entities listed below meet the criteria for inclusion as component units or joint ventures and, therefore, are not reported in the accompanying financial statements. Although these organizations have a common name and provide services to residents generally within the City's geographic boundaries, the City does not have the ability to influence their daily operations and does not approve their budgets, provide funding for their activities or have any responsibility for their outstanding financial obligations. Federal Way Community Center Federal Way District Pool Federal Way Fire District #39 Federal Way Library System Federal Way Medical Center Federal Way School District #210 Federal Way Senior Center Federal Way Water and Sewer District Federal Way Youth and Family Services City of Federal Way / 19 Basis of Presentation - Fund Accounting The accounts of the City are organized on the basis of funds and account groups. Each fund is a separate accounting entity with a self -balancing set of accounts. The account groups are financial reporting devices used to provide accounting control for certain assets and liabilities not recorded in the funds because they do not directly affect net expendable available financial resources. Under the current governmental accounting model, there are three broad fund categories, seven generic fund types within those categories and two account groups. A description of the three fund categories and the generic fund types included in each category is provided below. Governmental Funds T es Governmental funds are used to account for activities typically associated with state and local government operations. All governmental fund types are accounted for on a spending or "financial flows" measurement focus, which means that typically only current assets and current labilities are included on related balance sheets. The operating statements for governmental funds measure changes in financial position, rather than net income. They present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. The four generic fund types in this category are described in the following paragraphs. The General Fund is the general ape rating fund of the City and accounts for all activities not required to be accounted for in some other fund. Special revenue funds account for the proceeds of specific revenue sources, other than expendable trusts or revenues designated for major capital projects, that are legally restricted to expenditures for specific purposes. Debt service funds account for the accumulation of resources for and the payment of general long-term debt, principal, interest and related costs. Capital projects funds account for the acquisition or construction of major capital facilities except those financed by proprietary funds and trust funds. Proprietary Funds Proprietary funds are used to account for activities similar to those found in the private sector where the intent of the governing body is to finance the full cost of providing services, including depreciation, primarily through user charges. The measurement focus for these funds is based on the commercial model which uses a flow of economic resources approach. Under this approach, the operating statements for the proprietary funds focus on a measurement of net income (revenues and expenses) and both current and non -current assets and liabilities are reported on related balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. As described below, there are two generic fund types in this category. Enterprise funds account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the City is to finance or recover, primarily through user charges, the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis. Currently the City does not have enterprise funds. Internal service funds account for business -like activities where related goods or services are primarily provided to other departments or funds of the City on a cost -reimbursement basis. Fiduciary Funds Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments or other funds. These funds share characteristics with both the governmental and proprietary funds and therefore, as described below, use the measurement focus and basis of accounting most appropriate to their specific operations. This fund category includes expendable trust, nonexpendable trust, pension trust, and agency funds. The City uses funds in two of these subclassifications to account for its current financial activities: 1) an expendable 20 / City of Federal Way trust fund, where both the principal and revenues earned on that principal may be expended for purposes designated by the trust agreement; and 2) three agency funds which account for assets that the City holds for other funds, governments or individuals. Expendable trust funds are accounted for in essentially the same manner as governmental funds, having a flow of current financial resources measurement focus and using the modified accrual basis of accounting. Agency funds are custodial in nature (assets equal liabilities) and do not measure the results of operations. Account Groups To facilitate the measurement of the sources and uses of current financial resources in the governmental funds, separate account groups are used to account for related non -current or non -financial resources, such as general fixed assets and unmatured general long-term debt. On this basis, the City uses the following account groups to establish accounting control over related assets and liabilities not recorded in the governmental funds. The General Fixed Assets Account Group accounts for all fixed assets of the City other than those accounted for in the proprietary funds. The General Long-term Debt Account Group accounts for all long-term debt of the City other than debt accounted for in the proprietary funds. Basis of Accounting Basis of accounting refers to when revenues, expenditures, expenses, transfers and the related assets and liabilities are recognized and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The accrual basis of accounting is used by proprietary fund types, pension trust funds and nonexpendable trust funds. Under this method, revenues are recognized when earned, and expenses are recognized when incurred. The modified accrual basis of accounting is used by governmental, expendable trust and agency funds. Revenues and other financial resources are recognized when they become susceptible to accrual, i.e., when the related funds become both measurable and available to finance expenditures of the current period. To be considered "available", revenue must be collected during the current period or soon enough thereafter to pay current liabilities. Expenditures are recognized when the related fund liability is incurred. Since the recognition of depreciation does not reduce net financial resources, it is not considered an expenditure. Other exceptions include (1) inventories of materials and prepaid items are reported as expenditures when purchased, (2) interest on long-term debt is not accrued but is recorded as an expenditure when due, (3) accumulated unpaid vacation and sick pay are considered expenditures when paid. Major revenues recorded on the modified accrual basis are: Property Taxes - King County acts as the City's collection agent for these taxes. Each day, 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 and February 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 'A % and optional 'k % 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 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. It is both measurable and available and is therefore accrued as revenue at year end. City of Federal Way / 21 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 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; operating transfers, interfund, 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 the business and occupation tax, licenses and permits, fines and forfeitures, and other miscellaneous revenues which are generally not measurable until received. Budgets and Budgetary Accounting Scope of Budget - Annual appropriated budgets are adopted for the general, some special revenue, debt service, and for all proprietary 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 project/grant related special revenue funds and capital project funds are adopted at the level of the individual project and for fiscal periods that correspond to the lives of projects. Since these funds are not budgeted on an annual basis, budgetary comparisons are not presented. NCGA Statement 1 does not require, and the financial statements do not present, budgetary comparisons for proprietary fund types. 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 reappropriation 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 annual operating budget are listed below. Funds Budgeted on an Annual Basis_ General Fund Debt Service Fund Special Revenue Funds: Street Fund Arterial Street Fund 1st '/a % Real Estate Excise Tax Fund 2nd '/a % Real Estate Excise Tax Fund Solid Waste/Recycling Paths and Trails Reserve Fund Surface Water Management Fund Procedures for Adopting the Annual 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 Management Services Director for current level service budgets and a preliminary financial forecast. 22 / City of Federal Way • By late July, 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. ■ Prior to the first Tuesday in September, the City Manager 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. • City Council conducts workshops and public hearings on the proposed budget between mid -September and mid - December. No later than the first Monday in October, the City Council must adopt an ordinance to establish the amount of property taxes to be levied in the coming year. • By October 31, the City Manager files a preliminary budget with the City Clerk. Copies of the preliminary budget are provided to staff and the City Council and made available to the public. • During 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 November and December. 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 City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of a fund 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 a simple majority. The budget amounts shown in the financial statements are the final authorized amounts as revised during the year. Encumbrances An encumbrance system is used for budgetary control purposes to record commitments resulting from approved purchase orders. During the year, encumbrances are recorded in the accounting system at the time purchase orders are issued for goods and services. Upon payment, the encumbrance is reversed and the actual cost of related item is recorded as a fund expenditure. Outstanding encumbrances at year end are cancelled and must be re-established in the following year. Therefore, these amounts have not been recorded as current year expenditures unless considered to be susceptible to accrual at the end of the year. Assets, Liabilities and Equities Cash and Cash Equivalents It is the City's policy to invest all cash not immediately required for disbursement. At December 31, 1992, the State Treasurer was holding $15,310,601 in short-term investments of cash. This amount is classified on the balance sheet as cash and cash equivalents. The interest earnings on these investments are allocated to all funds based on the average monthly balance for each fund. City of Federal Way / 23 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. The City's deposits are entirely covered by federal depository insurance (FDIC and FSLIC) or by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (PDPC). Temporary Investments The City is authorized by State law to purchase certificates of deposit issued by Washington State depositories that participate in a state insurance pool managed by the Washington Public Deposit Protection Commission; securities purchased by the Washington State Investment Pool; U.S. Treasury and Agency securities, banker's acceptances trading in the secondary market; and repurchase agreements with dealers that use authorized securities as collateral. All investments, except assets in the deferred compensation plan, are recorded on an amortized cost basis, unless there is a significant and permanent decrease in market value, in which case, market value should be used. Assets in the City's deferred compensation plan are reported at market value because the employer's liability to each participant is measured by the participants share of the market value of the plan assets. Receivables Taxes receivable consist of measurable and available locally levied taxes and related interest and penalties. Included are property taxes, the local option sales tax, the local real estate excise tax, and motor vehicle fuel taxes. Due From Other Governmental Units receivable reflects measurable and available intergovernmental grants, entitlements, or State shared revenues (taxes/charges levied and collected by an intermediary collecting government and distributed on some basis); loans; and charges for services rendered by the City for another government unit. A separate schedule of Due From Other Governmental. Units is disclosed in Note 5. Amounts Due to and from Other Funds,• Interfund Loans These accounts include all interfund receivables and payables. A separate schedule of interfund loans receivable and payable is furnished in Note 13. Loans between funds must be specifically authorized by Council resolution. In the governmental funds, loans to other funds are offset by a corresponding reservation of fund balance to indicate that the outstanding loan amounts do not constitute "available spendable resources" and are, therefore, not available for appropriation. Inventories Inventories in the governmental funds are recorded as expenditures at the time of purchase. 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 Funds. Fixed Assets The accounting and reporting treatment of fixed assets is determined by the measurement focus used by the fund which acquires them. Fixed assets purchased or constructed by a governmental fund are recorded as expenditures in that fund at the time related purchases are made; however, the associated fixed asset is recorded in the General Fixed Assets Account Group. All purchased fixed assets are valued at cost. Donated fixed assets are valued at their estimated fair market value on the date received. The City does not capitalize "infrastructure" assets such as roads, bridges, curbs and gutters, streets and sidewalks, and lighting systems. 24 / City of Federal Way Costs of normal maintenance and repair for general fixed assets are also not capitalized. However, any improvement that increases an asset's value, or materially extends its life or potential uses is added to that asset's capitalized cost. Equipment items and real property acquired through capital lease agreements or conditional sales contracts are recorded in the General Fixed Assets Account Group or proprietary fund, as appropriate, at the inception of the agreement and in accordance with criteria established in section L20 of the Codification of Governmental Accounting and Financial Reporting Standards. Fixed assets acquired or constructed by the proprietary funds are capitalized in those funds at historical cost. Contributed assets are recorded at their estimated market values as of the date they are acquired. The estimated fair market value of donated assets is recorded as contributed capital by the fund which receives them. Depreciation No depreciation is recorded on the fixed assets in the General Fixed Assets Account Group. Annual depreciation for the proprietary fixed assets is shown as an expense in the proprietary fund. Related depreciation is computed on a straight-line basis, using varying estimated service lives for individual assets and asset classifications depending on particular characteristics of an asset and factors surrounding its anticipated use. The average service lives used to calculate depreciation for specific categories of assets in the City's internal service funds are summarized below. Estimated Service Asset Class Life in 'Years Office Furniture & Fixtures 10 Computer/Data Handling Equipment 6 Communications Equipment 10 Recreation Equipment 10 Parks Equipment 12 Automobiles 5 Light Trucks 5 Heavy Trucks 8 Heavy Work Equipment 10 Shop/Miscellaneous Equipment 10 Land Improvements_ 20 Buildings 40 Com ens ted Absences Payable The City records a liability for all outstanding vacation pay. Accrued vacation pay for governmental fund employees is recorded in the General Long -Term Debt Account Group, since it is not considered due and payable at year end from expendable available financial resources. Accrued vacation pay for proprietary fund employees is recorded as an expense and liability in the appropriate proprietary fund. Employee vacation leave is accumulated monthly at rates ranging from 10 to 15 days per year depending on term of employment. Employees may accumulate up to a maximum of 180 hours of vacation leave. All outstanding vacation leave is payable upon termination of employment. Sick leave may be accumulated up to a maximum of 720 hours, per City policy. 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 by the governmental funds due to the difficulty in estimating the portion of existing balances likely to result in expenditures in future periods. During 1992, City employees were not represented by bargaining units and therefore no exceptions to the above policies exist. City of Federal Way / 25 Lona-term Debt Long-term liabilities expected to be paid by the governmental funds are recorded in the General Long-term Debt Account Group. Long-term debt for proprietary funds will be recorded as a liability by the fund responsible for the related debt repayment. Long-term debt outstanding at year end is outlined in Note 12. Deferred Revenues The deferred revenues account is used to offset receivables established in the governmental funds for certain revenues that are measurable but not considered available to finance payment of current obligations and, therefore, are not susceptible to accrual on the modified accrual basis. When the receivable amounts are collected in future periods, this liability account is reduced and corresponding revenue is recorded. Revenues presented in this manner on the accompanying financial statements are delinquent property taxes and housing rehabilitation loans. See Note 5 for further details. Fund Eouity-Reserves and Designations Reserves represent portions of fund equity that are legally restricted for a specific future purpose or not available for appropriation because they do not represent a current expendable resource. Designations of fund balance identify amounts set aside by management for tentative future purposes or administrative convenience. In governmental and fiduciary funds, fund balance that is legally restricted for future purposes include reserves for: a) future employee retirement payments and b) future debt service. Fund equity not available for expenditure in the governmental funds consists of the outstanding balances of current interfund loans. On December 31, 1991, $60,000 in non -interest bearing loans from the General Fund to the City's two grant funds were authorized by the City Council as interim financing. In addition, the General Fund had reserves for Petty Cash and Travel Advance purposes. The Special Revenue Path and Trails Reserve fund balance is also legally restricted for construction and maintenance of paths and trails within City right-of- way. Interfund Transactions There are four types of transactions between funds - interfund loans, quasi -external transactions, interfund reimbursements, and interfund 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. Quasi -external transactions are equivalent to buying goods or services from an outside vendor. They are accounted for by the related funds as revenues, expenditures or expenses. Interfund reimbursements are repayments to a fund for expenditures or expenses which belong to another fund. They involve only expenditure or expense accounts. Interfund transfers are either residual equity in nature or operating transfers. Operating transfers are the equivalent of operating subsidies. They are accounted for as "other financing sources and uses" in all funds and are therefore included in the operating statements. Residual equity transfers are used to close out a discontinued fund or make one-time contributions to a new fund, to record the interfund equivalent to a capital grant or its repayment (involving a proprietary fund), or to make contributions to an internal service fund to establish or increase its working capital or make repayments of such contributions. In 1992 the City recorded a number of such transfers to internal service funds to fund the acquisition of new assets. A schedule of interfund transfers is furnished in Note 13, Interfund Transactions. Comparative Data Comparative totals for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative data has not been presented by fund type in each of the statements since their inclusion would make the statements unduly complex and difficult to read. Total Columns on Combined Statements - Overview Total columns on the general purpose financial statements are provided to facilitate financial analysis. This data, however, 26 / City of Federal Way is captioned "Memorandum Only" to indicate that it does not present financial position, results or operations or reporting of cash flows for the governrnental unit as a whole in accordance with generally accepted accounting principles. Data contained in these columns is not comparable to a consolidation, and interfund eliminations have not been made in aggregating reported values. NOTE 2: Stewardship, Compliance and Accountability Legal Budgetary Compliance 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. There exists no City fund having a negative fund balance or negative equity at year end. NOTE 3: Supplemental Appropriations Operating Budget Funds Appropriations established during 1992 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. Appropriation amounts shown on the accompanying financial statements reflect final budget values, including all adopted adjustments to original budget amounts. 1992 1992 SUPPLEMENTAL 1992 ORIGINAL BUDGET APPROPRIATIONS FINAL BUDGET General Fund S 19,027,550 S --- $19,027,550 Special Revenue Funds: — Street Fund-- 4,588,132 --- 4;588,1-322— Arterial Street Fund 1,564,822 2,067,226 3,632,048 1st y.% Real Estate Excise Tax Fund 729,749 729,749 2nd %% Real Estate Excise Tax Fund 729,749 --- 729,749 Paths and Trails Reserve Fund 16,102 --- 16,102 Surface Water Management Fund 2,415,000 --- 2,415,000 Total Special Revenue Funds 10,043,554 2,067,226 12,110,780 Debt Service Fund 2,100,769 36,591 2,137,360 Total $31,171,873 $ 2,103,817 $33,275,690 Funds Budgeted on a Project -Length Basis During 1992, the City Council adopted appropriations for some special revenue funds and the Capital Project fund budgeted on a "project -length" basis. As explained in Note 1, appropriations for these funds are continuing in nature and do not lapse at the end of the year. The special revenue funds budgeted on a "project length" basis are Grants -Miscellaneous Governmental, Community Development Block Grant and Impact Fee. These funds are therefore not included in the Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual. City of Federal Way / 27 NOTE 4: Cash and Investments As required by state law, all deposits and investments of the City's funds are obligations of the U.S. Government, the State Treasurer's Investment Pool, bankers' acceptances, or deposits with Washington State banks and savings and loan institutions. In 1992 the City utilized the State Investment Pool and deposits in Washington State banks. The City's investment policies are described in Note 1. Cash and Deposits At December 31, 1992, the carrying amount of the City's fully insured temporary investments with the State Pool was $15,310,601. The City's checking account balance was $150,280. No deposits were uninsured or uncollateralized. Insurance coverage up to $100,000 is through federal depository insurance and the Washington Public Deposit Protection Commission (WPDPC) for amounts over $100,000. 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. At December 31, 1992, the City's total deposits and investments consisted of the following: Puget Sound Bank, Checking Account Petty Cash/Change Fund/Advance Travel Cash Equivalents with State Treasurer's Investment Pool Cash With Escrow Agent Assets with FWRS Plan Administrator Assets in ICMA Deferred Compensation Plan Total Cash and Investments Investments $ 150,280 6,720 15,310,601 165,880 885,316 283,727 $16,802,524 Categorization of the City's investments is applicable only to investments held for the City's Federal Way Retirement System Plan, which reflects a replacement of Federal Social Security (see Note 8). The City's investments are categorized to give an indication of the risk assumed at year-end. The following summary shows the City's investments at year-end categorized by risk. Category 1 includes investments that are either insured, registered or held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments which are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or its trust department or agent, but not in the City's name. Risk Category Carrying Market Amount Value 1 2 3 U.S. Government Securities -Treasury Notes $ $ 210,033 $ --- $ 210,033 $ 205,405 Equity Securities 551,204 — 551,204 617,329 Total S --- $761,237 $ --• $ 761,237 $ 822,734 Money Market Funds 124,079 124,079 Total Federal Way Retirement System Assets $ 885,316 $ 946,813 Investment in State Treasurer's Investment Pool 15,310, 601 15,310, 601 28 / City of Federal Way Risk Category 2 Investment in Deferred Compensation Total Investments NOTE 5: Carrying Amount 283,727 $ 16,479,644 Receivables and Due From Other Governmental Units Property Taxes Market Value 283,727 $16,541,141 The King County Treasurer is responsible for collecting all property taxes levied in the County by taxing districts. Amounts collected by the County on the City's behalf are remitted daily. 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, 1992, the total balance of property taxes receivable recorded by the City was $394,906. Of this, $344,597 is recorded as a deferred revenue, since it was not collected within the first 60 days of 1993. The property tax levy calendar in 1992 was: 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 percent of market value. October 31 Second installment is due. Property taxes are recorded as a receivable when levied, offset by a deferred revenue. 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, cities may levy up to $3.60 per $1,000 of assessed valuation for general governmental services, subject to two limitations: 1. Washington State law in RCW 84.55.010 limits the growth of regular property taxes to 6 percent per year, after adjustments for new construction. If the assessed valuation increases by more than 6 percent due to revaluation, the levy rate will be decreased. 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. The City's regular levy for 1992 was $1.572 per $1,000 on an assessed valuation of $3,213,952,495 for a total regular levy of $5,031,533. City of Federal Way / 29 Housing Rehabilitation Loans Receivable These loans are issued to individuals meeting designated income criteria through funds provided by the City's annual block grant program. The loans are secured by property liens and are not required to be repaid until the property is sold or otherwise changes ownership. The total amount of loans outstanding at December 31, 1992 was $64,196. This amount is not considered available and is therefore offset by deferred revenue. Due From Other Governmental Units At December 31, 1992 the City recorded the following receivables from other governmental units: Description Amount General Fund: Washington State -State Shared Revenue $ 1,186,143 Special Revenue Funds: Washington State -State Shared Revenue 167,938 Washington State DOT -Heliport Grant 6,820 Washington State TIB Grant 355,114 King County -Real Estate Excise Tax 108,949 Coordinated Prevention Grant 25,003 U.S. Dept. of HUD-CDBG Grant 17,108 Federal Way Water & Sewer District 363,883 King County -Surface Water Mgmt Fees 30,094 Subtotal Special Revenue Funds 1,074,909 Total $ 2,261,052 NOTE 6: Due To Other Governmental Units At December 31, 1992, $438,384 was due to other governmental units as follows: Description Amount General Fund: King County -Contract $ 4,000 Special Revenue Funds: King County -Public Works Contracts 339,215 Agency Funds: Washington State -Taxes and Fees 74,824 King County -License and Fees 2,760 Fire Permits 17,585 Subtotal Agency Funds 95,169 Total $ 438,384 30 / City of Federal Way NOTE 7: Fixed Assets and Depreciation General Policies Major expenditures for fixed assets, including capital leases and major repairs that increase useful lives, are capitalized. Maintenance, repairs, and minor renewals are accounted for as expenditures or expenses when incurred. The City has adopted a general fixed asset capitalization policy where an item's cost must equal or exceed $1,000. All fixed assets are valued at historical cost (or estimated cost, where historical cost is not known/or estimated market value for donated assets). General Fixed Assets General fixed assets are long-lived assets of the City as a whole. When purchased, leased, or constructed, such assets are recorded as expenditures in the governmental funds and capitalized in the general fixed assets account group. No depreciation has been provided on general fixed assets, nor has interest been capitalized. General fixed assets that are infrastructure assets (such as roads, bridges, curbs, and sidewalks) are considered public property and are not accounted for in the general fixed assets account group. A summary of changes in general fixed assets follows: BALANCE JANUARY 1, 1992 Land $ 22,004,861 Other Improvements 180,171 Machinery & Equipment --- Buildings 334,000 —A s sets-Under-C-ap i tal Lease- Land 1,450,000 Total $ 23,969,032 Proprietary Fund Fixed Assets BALANCE ADDITIONS DELETIONS DECEMBER 31, 1992 $ 196,000 $ $ 22,200,861 273,293 --- 453,464 394,263 394,263 - --- - 334,000 1,450,000 $ 863,556 $ 394,263 $ 24,438,325 Proprietary fund fixed assets are long-lived assets acquired by the City's Internal Service Funds. The City depreciates these assets at the straight-line rate. The following is a summary of the City's proprietary fund fixed assets at December 31, 1992: Data Processing Support Fleet & Buildings & Telecommunications Services Equipment Furnishings Total DP/Telecommunications Equipment $ 844,095 $ --- $ --- $ --- $ 844,095 Heavy Equipment •-- --- 313,448 -- 313,448 Transportation Equipment --- 398,677 --- 398,677 Buildings & Furnishings --- --- --- 2,842,537 2,842,537 Other Equipment -- 35,507 32,697 — 68,204 Total Fixed Assets $ 844,095 $ 35,507 $ 744,822 $ 2,842,537 $ 4,466,961 City of Federal Way / 31 Less Accumulated Depreciation Net Fixed Assets Data Processing Support Fleet & Telecommunications Services Equipment Buildings & Furnishings Total (101,985) (4,460) (73,113) (73,561) (253,119) $ 742,110 $ 31,047 $ 671,709 $ 2,768,976 $ 4,213,842 NOTE 8: Pension Plans Substantially all City full-time and qualifying part-time employees participate in the Public Employees Retirement System (PERS) administered by the Department of Retirement Systems, under cost -sharing multiple -employer public employee retirement systems. Total Pension Benefit Obligation Less Net Assets Available for Benefits SUMMARY OF SYSTEMS' ACTUARIAL DATA (In Millions of Dollars) As of December 31, 1991 PERS LEOFF $8,881 $3,942 7,938 3,051 VOLUNTEER FIREFIGHTERS $ 48 53 Unfunded (Surplus) Actuarial Present Value of Accumulated Plan Benefits $ 943 $ 891 $(5) The amount shown as total pension benefit obligation is the actuarial present value of credited projected benefits, adjusted for the effects of projected salary increases and any step -rate benefits (LEOFF only) estimated to be payable in the future as a result of employee service to date. Use of the standardized measure enable readers of Washington's financial statements to: (a) assess on an ongoing basis the funding status of each system; (b) assess progress made in accumulating sufficient assets to pay benefits when due; and (c) make comparisons among other states or other retirement systems. The standardized disclosure method is independent of the actuarial funding method used to determine contributions to the retirement system. Historical trend information showing each system's progress in accumulating sufficient assets to pay benefits when due is presented in the State of Washington's June 30, 1992 comprehensive annual financial report. Please refer to said report for detailed trend information. Public Employees' Retirement System (PERS) The state legislature established PERS in 1947 under Chapter 41.40 RCW. PERS is a cost -sharing multiple -employer system. Membership is mandatory for all City employees working 90 hours per month for five months out of any twelve month period. Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges); employees of legislative committees; college and university employees not in national higher education retirement programs; judges of district and municipal courts; noncertificated employees of school districts; and employees of local government. Approximately 50 percent of PERS members are state employees. PERS contains 2 "plans". (As used in this context, the term "plans" refers to tiers within PERS. The actual plan is PERS.) Participants who joined the system by September 30, 1977, are Plan I members. Those joining thereafter are enrolled in Plan H. Retirement benefits are financed from employee and employer contributions and investment earnings. Retirement benefits in both Plan I and Plan II are vested after completion of 5 years of eligible service. 32 / City of Federal Way Plan I members are eligible for retirement after 30 years of service, or at the age of 60 with 5 years of service, or at the age of 55 with 25 years of service. The annual pension is 2 percent of the final average salary per year of service, capped at 60 percent. Plan II members may retire at the age of 65 with 5 years of service, or at 55 with 20 years of service, with an allowance of 2 percent per year of service of the final average salary. Plan lI retirements prior to 65 are actuarially reduced. There is no cap on years of service credit and a cost -of -living allowance is granted, capped at 3 percent annually. During the 1992 Washington Legislative session, SHEI 2947 was passed. This bill opened a window for early retirement for PERS I members. To provide required resources, the employer annual contribution rate increased to .02 percent. The City's covered payroll for year ending December 31, 1992 was $3,649,338. The City's total current -year payroll for all employees was $4,208,864. Each biennium the legislature establishes Plan I employer contribution rates and Plan II employer and employee contribution rates. Employee contribution rates for Plan I are established by legislative statute and do not vary from year to year. Employer rates for Plan I are not necessarily adequate to fully fund the system. The employer and employee contribution rates for Plan H are developed by the Office of State Actuary to fully fund the system. All employers are required to contribute at the level established by the legislature. The methods used to determine the contribution requirements were established under state statute. The City's contribution rates expressed as a percentage of covered payroll, as of December 31, 1992 were: PERS Plan I REQUIRED ACTUAL Employer 7.19% 7.29% Employee 6.00% 6.00% Total 13.19% 13.29% REQUIRED 7.19% 4.98% 12.17% PERS Plan II ACTUAL 7.29% 4.85% 12.14% The City's actuarially -determined contribution requirement and actual contribution for the year ending December 31, 1992 were: PERS Plan I - PERS plan II REQUIRED ACTUAL REQUIRED ACTUAL Employer $38,600 $41,522 $223,787 $244,776 Employee 32,212 32,212 155,001 151,154 Total $70,812 $73,734 $378,788 $395,930 The City's actuarially determined employer contribution requirement represents approximately .0794 percent of the total for all employers covered by PERS. Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) As of December 31, 1992, the City had no LEOFF Plan employees since it purchased police services from King County and its residents voted to annex to Fire District #39 for fire services. LEOFF Plan information is therefore provided as supplemental information to the reader, as those entities providing police and fire services to Federal Way have LEOFF Plan employees. LEOFF was established in 1970 by the legislature under Chapter 41.26 RCW. LEOFF is a cost -sharing multiple -employer retirement system. Membership includes all full-time, fully compensated, local law enforcement officers and fire fighters. City of Federal Way / 33 Retirement benefits are financed by employee and employer contributions, investment earnings and legislative appropriation. LEOFF is comprised solely of non -State employees. LEOFF system contains 2 plans. Participants who joined the system by September 30, 1977, are Plan I members. Those who joined thereafter are enrolled in Plan II. Retirement benefits are vested after completion of 5 years of eligible service. Plan I participants are eligible to retire with 5 years of service at age 50. The benefit per year of service is as follows: TERM OF SERVICE PERCENT OF FINAL AVERAGE 20 + 2.0% 10-20 1.5 5-10 1.0 The final average salary is based on salary received during the last 2 years of service. Substantial disability and death benefits are provided by the plan. Retirement benefits are indexed to the Seattle area consumer price index. Plan II participants are eligible to retire at the age of 50 with 20 years of service or at 58 with 5 years of service. Retirement benefits prior to age 58 are actuarially reduced. The benefit is 2 percent of average salary per year of service. The average salary is based on the highest 5-year period. Retirement benefits are indexed to the consumer price index with a cap of 3 percent annually. Death and disability benefits are also provided. These benefit provisions were established under the authority of legislative statute. LEOFF had no material changes in benefit provisions for this year. Employer and employee contribution rates for Plan II are developed by the Office of State Actuary to fully fund the system. Plan H employers and employees are required to pay at the level established by the legislature. Plan I employers and employees are required to contribute at a rate of 6 percent and the State is responsible for the balance of the funding. The methods used to determine the contribution requirements were established under the authority of legislative statute. Other Local Government Pension Systems - City of Federal Way Employees' Retirement System The City is also administrator of a defined contribution pension retirement system called the Federal Way Retirement System. The system has been classified as an expendable trust fund in the financial reports of the City. It is classified as such because 1) it is a defined contribution plan, not a defined benefit plan; and 2) the plan does not call for any predetermined funds to be available for benefits at a particular time (no actuarial requirements regarding benefits or city requirements exist). During 1992, there were a total of 184 individuals covered by this system. As of the end of the year, 134 remained as active employees of the City and none were drawing retirement benefits. The 50 inactive had left the City's employment and either had been reimbursed their contributions or the reimbursement was pending. 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 which was established as an alternative to the Federal Social Security System. All 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 coverages. The City's contribution mix is actuarially determined annually. Contributions into the plan are tax deferred until such time as withdrawal. 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 14 % of the participant's compensation. Covered payroll for 1992 was $3,728,805 and total City payroll was $4,208,964. Actual City contributions for the year were 34 / City of Federal Way $184,449. Actual employee contributions were $226,808. All contributions were invested in instruments arranged through independent investment advisors selected by the City but administered through Dean Witter Reynolds, Inc.. 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 Dean Witter Reynolds Incorporated who invests Plan assets. At year end these assets amounted to $885,316 and were comprised of U.S. Treasury Notes ($210,033), stock ($551,204), and money market securities ($124,079). The consulting actuary firm of Milliman & Robertson, Inc. 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 paid from the employee's account to which no contributions by the City or the participant can be added after retirement, or (c) a single lump -sum payment equal to the accumulated balance in the employee's account as of his retirement date. NOTE 9: Other Employee Benefits Deferred Compensation The City offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. This multi jurisdictional plan administered by the ICMA Retirement Corporation permits employees to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, or unforeseeable emergency; or upon death, to their beneficiaries. Compensation deferred under the plan and all income attributable to the plan are solely the property of the City. The City's rights to this property are subject only to the claims of the City's general creditors until paid to the employee or other beneficiary and are not restricted to the benefit provisions under the plan. It is the opinion of the City's legal counsel that the City has no liability for losses under the plan but does have the duty of —due care that would be required of an ordinary prudent investor: The City believes that it isdzighlyzmiikely-thatzt Will use the assets to satisfy the claims of general creditors in the future. At December 31, 1992, $283,727 of the plan's balance was applicable to the City. Deferred compensation plan investments are recorded at market value, along with the corresponding liability, in the Deferred Compensation agency fund. NOTE 10: Risk Management The City maintains insurance against most normal hazards except for unemployment insurance where it has elected to become fully self -insured. Related premiums received by the Risk Management Fund are 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. Through its Risk Management Fund, the City is also recovering insurance premium costs for general liability coverage and building reserves for a future general liability self-insurance program. During 1992 the City purchased commercial insurance policies from commercial insurers. A summary of coverages in force during 1992 is presented below: City of Federal Way / 35 NAME OF COMPANY COVERAGE LIABILITY LIMITS Hartford Casualty Insurance Excess liability for general liability, law $5,000,000/claim enforcement, auto, and public officials. $5,000,000 aggregate Deductible - $0 Auto liability with limited physical $2,000,000/occurrence damage and no medical $2,000,000 aggregate Deductible - $1,000 collision $ 250 comp $60,000 underinsured/ uninsured motorist $5,000 medical payments Hartford Steam Boiler & Boiler and machinery $350,000/accident Inspection $5,000/extra expense $25,000 ea for identified costs Deductible - $1,000 to $2,500 Hartford Insurance Company Inland marine $100,000 valuable papers of the Midwest $70,276 contractor's equipment $136,593 computer equipment $25,000 ea for identified costs Deductible - $250 Personal property $3,964,000 Deductible - $2,500/occurrence Nutmeg Insurance Public officials liability $2,000,000/occurrence $2,000,000 aggregate Deductible - $5,000 Twin City Fire Insurance General liability $2,000,000/occurrence $5,000/10,000 medical payments per person/occurrence Deductible - $5,000 Law Enforcement $2,000,000/occurrence $2,000,000 aggregate Deductible - $2,000 Fidelity & Deposit Company of Public Official Bonds: Maryland Finance Director $250,000 Chief of Police $ 50,000 City Clerk $ 50,000 City Manager $250,000 Public Employee Dishonesty: City employees $250,000 City Council & Purchasing Manager $250,000 The City uses the Risk Management internal service fund to account for its risk financing activities. 36 / City of Federal Way The City's industrial insurance is provided by Washington State and is administered by the Department of Labor and Industries. 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: 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, 1992 is $-0- for its tax-exempt general obligation bond issues subject to the Tax Reform Act issued through that date. NOTE 12: Long -Term Debt The various categories of long-term debt reflected on the City's financial statements are briefly described in the following paragraphs. 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 since 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 1992 the City had no voter approved bonds outstanding. The City issued Certificates of Participation in 1992 for the purchase of City Hall. They are accounted for in the internal service fund established for buildings and furnishings. All other general obligation debt is recorded in the General Long-term Debt Account Group and annual principal and interest payments are recorded as expendituresb_y_the City's debt service -fund. — Debt Issued During 1992 On August 26, 1992 the City issued $2,330,000 in certificates of participation, a financing lease obligation to purchase the Financial Center property, the City's current City Hall, located at 33530 1st Way South in the City of Federal Way. These certificates are comprised of the $2,150,000 tax exempt Series A, and the $180,000 taxable Series B. The last of the Series A certificates have a scheduled redemption date of December 1, 2002. The last of the Series B certificates have a scheduled redemption date of December 1, 1993. These certificates were issued at par with Series A carrying a face interest rate ranging from 3.0 % to 5.45 %, and Series B at 4.25 %. The net interest cost (NIC) on Series A and B was 5.100199 % and 4.816250 %, respectively. The certificates carried an "A" rating with Moody's Investors Service. The following is a schedule of outstanding general obligation debt as of December 31, 1992: City of Federal Way / 37 OUTSTANDING GENERAL OBLIGATION DEBT DECEMBER 31, 1992 (In Thousands of Dollars) Amount Beginning Ending Date of Issue Maturity Date Interest Rate Originally Outstanding Amount Amount Outstanding Description Issued Debt Issued Redeemed Debt Genial Obligation Bonds: 1990 Limited 01-Nov-90 01-Dec-95 5.90-6.30 $ 1,710 S 1,410 S S 320 S 1,090 1991 Limited 01-Feb-91 01-Dec-21 6.00-6.85 12,500 12,500 12,500 Subtotal GO Bonds 14,210 13,910 320 13,590 Certificates of Participation: 1991 Issue 25-Sep-91 01-Dec-06 4.75-6.80 1,450 1,450 --- 45 1,405 1992 Issue - Series A 26-Aug-92 01-Dec-02 3.00-5.45 2,150 2,150 --- 2,150 1992 Issue - Series B 26-Aug-93 01-Dec-02 4.25 180 --- 180 --- 180 Subtotal COP's 3,780 1,450 2,330 45 3,735 Grand Total All L-T Debt $ 17,990 $ 15,360 S 2,330 S 365 $ 17,325 PRORATED DEBT SERVICE SCHEDULE DECEMBER 31, 1992 (In Thousands of Dollars) Beginning Ending Amount Outstanding Amount Outstanding Description Originally Issued Debt Amount Issued Redeemed Debt General Long -Term Debt Group: 1990 Limited GO Bonds S 1-710 $ 1,410 $ $ 320 $ 1,090 1991 Limited GO Bonds 12,500 12,500 12,500 1991 COP Issue 1,450 1,450 45 1,405 Total General L-T Debt 15,660 15,360 365 14,995 Internal Service Funds: 1992 COP -Series A 2,150 - 2,150 - 2,150 1992 COP -Series B 180 180 180 Total Internal Service 2,330 --- 2,330 --- 2,330 Total All L-T Debt $ 17,990 $ 15,360 $ 2,330 $ 365 $ 17,325 The following statement of long-term debt provides the City's outstanding debt for 1992 and 1991. As explained in Note 17, in 1991 the City incorrectly recorded the Certificates of Participation at present value of future minimum lease payments ($1,003,722) rather than at face amount ($1,450,000). This change is reflected in the statements below. 38 / City of Federal Way STATEMENT OF GENERAL LONG-TERM DEBT December 31, 1992 With Comparative Totals for December 31, 1991 Amounts Available to be Provided for the Payment of General Long -Term Debt Amount to be Provided for the Retirement of: 1992 1991 G.O. Bonds $ 12,155,215 $ 11,805,057 Compensated Absences 128,318 85,145 Certificates of Participation 1,405,000 1,450,000 Amount Available in Debt Service Funds 1,434,785 2,104,943 Total Amount Available and to be Provided $ 15.123,318 $ 15,445,145 General Long -Term Debt Payable General Obligation Bonds $ 13,590,000 $ 13,910,000 Compensated Absences - Vacation 128,318 85,145 Certificates of Participation 1,405.000 1,450,000 Total General Long -Term Debt $ t 5.123,3.18 $ 15.445.145 Outstanding at December 31, 1991 Additions: New Debt Issued or Acquired: Capitalized Lease Obligations Increase in Accrued Vacation Total Additions Reductions: G.O. Bonds Capitalized Lease Obligations Total Reductions Outstanding at December 31, 1992 STATEMENT OF CHANGES IN LONG-TERM DEBT Period Ended December 31, 1992 (In Thousands of Dollars) General Obligation Certificates of Participation Bonds General General Long -Term Long-term Internal Debt Debt Service S 13,910.0 $ 1,450.0 S Accrued Vacation, Claims & Judgments Total General Long-term Internal Debt Service i 85.2 $ 2.1 $ 15,447.3 ---- 2,330.0 2,330.0 43.1 2.4 45.5 $ ---- $ -- $ 2,330.0 S 43.1 $ 2.4 $ 2,375.5 (320.0) - - ---- (320.0) — (45.0) ---- - (45.0) $ (320.0) (45.0) $ --- $ — $ -- S (365.0) $ 13,590.0 $ 1,405.0 $ 2,330.0 $ 128.3 $ 4.5 $ 17,457.8 City of Federal Way / 39 Presented below is a summary of the City's debt service requirements to maturity by year for all outstanding debt other than compensated absences: 1993 1994 1995 1996 1997 Thereafter TOTALS ANNUAL DEBT SERVICE PAYMENTS TO MATURITY (in Thousands of DoOars) GENERAL OBLIGATION BONDED DEBT 1,267.2 1,271.5 1,413.9 1,025.9 1,025.4 24,836.7 $ 30,840.6 CERTIFICATES OF PARTICIPATION 456.8 460.4 454.5 457.1 458.4 2,887.8 $ 5,175.0 SCHEDULE OF ANNUAL DEBT SERVICE REQUBRF]MENTS TO MATURITY GENERAL OBLIGATION BONDS TOTAL DEBT 1,724.0 1,731.9 1,868.4 1,483.0 1,483.8 27,724.5 $ 36,016.6 Year Principal Interest Total 1993 $ 600,000 $ 1,124,057.50 $ 1,724,057.50 1994 640,000 1,091,867.50 1,731,867.50 1995 810,000 1,058,300.00 1,868,300.00 1996 470,000 1,013,020.00 1,483,020.00 1997 495,000 988,755.00 1,483,755.00 1998 520,000 956,825.00 1,476,825.00 1999 550,000 922,595.00 1,472,595.00 2000 585,000 885,602.50 1,470,602.50 2001 615,000 845,582.50 1,460,582.50 2002 655,000 809,350.00 1,464,350.00 2003 395,000 770,212.50 1,165,212.50 2004 430,000 744,752.50 1,174,752.50 2005 460,000 716,757.50 1,176,757.50 2006 485,000 686,520.00 1,171,520.00 2007 375,000 654,415.00 1,029,415.00 2008 400,000 629,665.00 1,029,665.00 2009 430,000 603,065.00 1,033,065.00 2010 465,000 574,255.00 1,039,255.00 2011 500,000 542,867.50 1,042,867.50 2012 535,000 509,117.50 1,0",117.50 2013 575,000 472,737.50 1,047,737.50 2014 620,000 433,637.50 1,053,637.50 2015 665,000 391,477.50 1,056,477.50 2016 715,000 345,925.00 1,060,925.00 2017 765,000 296, 947.50 1,061,947.50 2018 825,000 244,545.00 1,069,545.00 2019 885,000 188,032.50 1,073,032.50 2020 950,000 127,410.00 1,077,410.00 2021 910,000 62,335.00 972,335.00 Total S 17,325,000 $ 18,690,630.00 $ 36,015,630.00 40 / City of Federal Way 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 2-1/2 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 3A % of the valuation within the City without a vote of the people. In addition, debt up to Ya % of the valuation may be approved by the Council for capital leases. No combination of limited or unlimited tax debt may exceed 71h 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. The City's legally remaining debt capacities as of December 31, 1992 are: General Government (no vote required) $14,867,454 General Government Capital Leases (no vote required) $23,601,799 General Government (3/5 majority vote required) $36,239,646 Parks and Open Space (3/5 majority vote required) $90,599,114 Utilities (3/5 majority vote required) Compensated Absences As explained in Note 1, the City's liability for accrued employee vacation balances for governmental fund employees is recorded in the General Long-term Debt Account Group. Balances for proprietary funds are recorded as liabilities in the specific fund expected to incur the related future expense. The total liability by fund type for accrued employee vacation as of December 31, 1992, is provided below: Governmental Funds (recorded in the General Long-term Debt Account Group) $128,318 Internal Service Funds 4,486 Total Compensated Absences $132,804 NOTE 13: Interfund Transactions Interfund transactions represent reductions in the expendable financial resources of the transferring fund, but the transaction may or may not be accounted for as an expenditure of the transferring fund. Transactions between funds may be classified as (1) quasi -external transactions, (2) loans and advances, (3) reimbursements, (4) residual equity transfers, and (5) operating transfers. During 1992, the City recorded all of the above with the exception of reirnbarsements. Quasi -external Transactions Quasi -external transactions reflect the existence of a more -or -less normal buyer/seller relationship between City funds. During 1992, these involved transactions between internal service funds and other funds for the purpose of recovering operating and maintenance costs and to build replacement reserves. City of Federal Way / 41 Interfund Receivables/Payables The following schedule presents interfund loans and due to/due from other funds outstanding at December 31, 1992: Interfund Loans General Fund Special Revenue Funds: Grants - Miscellaneous Governmental Community Development Block Grant Total Interfund Loans Due to/Due From Other Funds General Fund Expendable Trust Fund - Federal Way Retirement System Total Due To/from Other Funds Total Interfund RecolvableslPagable Residual Equity Transfers Interfund Loans Interfund Loans Receivable Payable $ 60,000 $ --- 50,000 --- 10,000 $ 60,000 $ 60,000 Due From Due To Other Funds Other Funds $ --- $ 14,702 14,702 - $ 14,702 $ 14,702 $ 74,702 $ $74,702 Residual equity transfers are nonrecurring or non -routine transfers of equity between funds. They do not represent expenditures of the transferring fund but a change in a fund balance. In govemmental funds, they are reported as an increase or decrease in the beginning fund balance. For a proprietary fund, they are presented as an increase or decrease in the fund's contributed capital or retained earnings. The following residual equity transfers were recorded in 1992: Fund Cateaory Transfers In Transfers Out General Fund $256,743 Special Revenue Funds --- 147,677 Internal Service Funds $415,808 11,388 Total City Funds S415Ra08 $41808 Of the above amounts, the entire $415,808 was transferred from either governmcntal funds ($404,420) or internal service funds ($11,388) to other internal service funds, which record related transactions as additions to contributed capital. Operating Transfers Operating transfers are legally authorized contributions of resources from one fund to another to subsidize designated activities or expenditures. These amounts are classified as "other financing sources and uses" on governmental fund type operating statements. The following operating transfers were recorded during 1992: 42 / City of Federal Way Fund Category Transfers In Transfers Out General Fund $ 763,673 Special Revenue Funds $ 1,526,137 2,621,307 Debt Service Funds 1,431,161 Capital Project Funds 403,699 Fiduciary Funds 23,983 — Total City Funds $ 3,384,980 $ 3,384,980 NOTE 14: Contributed Capital Contributed capital in internal service funds records the amounts of working capital and fixed assets received from other funds. Contributed capital forms one of two classifications of equity found on the balance sheet of a proprietary fund. Contribute-d capital is created when a residual equity transfer is received by a proprietary fund, when a general fixed asset is "transferred" to a proprietary fund or when a grant is received that is externally restricted to capital acquisition or construction. Contributions restricted to capital acquisition and construction and fixed assets received from developers and customers, as well as amounts of tap fees in excess of related costs, also would be reported in this category. During 1992 various transactions impacted the contributed capital of internal service funds. These transactions have been identified in the following presentation: Data Buildings Risk Processing Fleet & and Manage- Telecomm- Support Equip- Furn- ment unications Services ment ishings Totals Beginning Contributed Capital S 0 $ 530,793 $ 18,529 $ 367,665 $ 409,903 $ 1,326,890 Additions: Residual Equity Transfers --- 311,668 1,506 — 102,634 415,808 Equipment/ Furniture Donations --- 1,634 15,472 377,157 --- 394,263 Total Additions: 0 313,302 16,978 377,157 102,634 810,071 Deductions: --- --- Ending Contributed Capital $ 0 $ 844,095 $ 35,507 $ 744,822 $ 512,537 $ 2,136,961 City of Federal Way / 43 NOTE 15: Contingencies and Litigation As of December 31, 1992, there were a small number of claims for damages and lawsuits pending against the City. In the opinion of the City Attorney, however, neither the potential liability for any single claim or lawsuit, nor the aggregate potential liability arising from all actions currently pending would materially affect the financial condition of the City. Due to both their uncertainty and immateriality, no liabilities or estimated liabilities have been included in the City's financial statements. Approximately $600,000 was unpaid at year end on the construction contract for the SW 356th Street project. This amount will be paid to the contractor during 1993 from a special revenue fund. NOTE 16: Fund Additions and Changes During 1992, the City added three special revenue funds. The three new special revenue funds include the Solid WastL/Recycling Fund established to account for special refuse collection fees used to manage the solid waste and recycling program; the Special Coatracts/Studies Fund accounts for receipts and disbursements related to special contracts and special projections; the Impact Fee Fund established to account for revenue from development impact fees, authorized by State law and designated for transportation, park and other improvements. NOTE 17: Reporting Change During 1992 the City discovered the Certificates of Participation issued in 1991 for $1,450,000 were accounted for incorrectly. During 1991 the City treated the issue as a capital lease and accounted for it at the present value of future lease payments of $1,003,722. The City has corrected this and is now accounting for it at face value which is reflected in the 1991 totals. This change resulted in the balance sheet for 1991 increasing by $446,278 as follows: Original 1991 Correction Adjusted 1991 Amount to be provided $ 12,893,924 $ 446,278 $ 13,340,202 Certificates of Participation Payable 1,003,722 446,278 1,450,000 The general fund operating statement, certificates of participation and the resulting other financing source also changed by $446,278, but this change had no effect on ending fund balance for 1991. NOTE 18: Subsequent Events In March 1993, the City purchased a facility in the amount of $695,941 to be used for the City's Community/Senior Center. 44 / City of Federal Way In May 1993, the Council approved a $2.39 million general obligation bond issue to fund the development of Campus Drive Park. This project is to be jointly developed by the Federal Way School District 112.10 and the City. The City will develop the Park to include several sports fields, basketball and tennis courts, walking trails and bike paths. The School District will be building a junior high school on adjacent land owned by the School District. Both are scheduled to open in the fall of 1994. The City is also in the process of refunding a 1991 bond issue in the amount of $12.105 million. In conjunction with these two bond issues, Moodys has upgraded the City's rating from A to Al. Moodys noted that the upgrade occurred in part due to strong financial operations, supported by favorable and conservative financial planning practices, together with the strength of the area economy and the absence of substantial future debt plans. City of Federal Way / 45 GENERAL FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 1992 1991 ASSETS Cash and cash equivalents $ 3,912,904 $ 1,159,222 Receivables (net): 394,906 294,063 Taxes 143 14 Accounts and contracts 1,160,100 127 1,060,000 Due from other governments Interfund loans receivable 60,000 60,000 TOTAL ASSETS $ 5,554,060 $ 2,587,426 LIABILITIES AND FUND BALANCE Liabilities: Vouchers payable $ 1,675,950 $ 450,111 Accounts/payroll payable 25,352 162,796 Due to other governments 4,000 - Due to other funds 14,702 - Deposits payable 4,706 4,983 Deferred revenues 344.597 256,983 TOTAL LIABILITIES 2,069,307 874,873 Fund balance: Reserved for: Reserved for interfund loans 60,000 60,000 Reserved for petty cash/change fund 1,720 600 Reserved for travel advance 5,000 5,000 Unreserved: Undesignated 3,418,033 1,646,953 TOTAL FUND BALANCE 3,484,753 1,712,553 TOTAL LIABILITIES AND FUND BALANCE $ 5,554,060 $ 2,587,426 46 / City of Federal Way GENERAL FUND COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For the Years Ended December 31, 1992 and 1991 1992 1991 REVENUES: Taxes $ 12,893,826 $ 11,965,254 Licenses and permits 737,071 638,967 Intergovernmental 2,540,098 2,881,220 Service charges and fees 666,194 466,318 Fines and forfeitures 414,178 288,254 Miscellaneous: Interest 203,761 627,760 Other 106,214 44,775 TOTAL REVENUES 17,561,340 16,912,548 EXPENDITURES: Current: General government 2,451,514 2,124,780 Security of persons and property 6,602,685 6,605,948 Physical environment 18,960 18,755 Economic environment 1,850,900 2,093,469 Health 1,064,820 468,430 Culture and recreation 2,377,847 1,680,884 Capital Outlay: General government 401,998 - Certificates of participation - 1,450,000 Debt Service: Interest and fiscal charges - 49,592 TOTAL EXPENDITURES 14,768,724 14,491,858 EXCESS OF REVENUES OVER EXPENDITURES 2,792,616 2,420,690 OTHER FINANCING SOURCES (USES). - Proceeds from certificates of participation - 1,450,000 Operating transfers out (763,673) (2,845,018) TOTAL OTHER FINANCING SOURCES (USES) (763,673) (1,395,018) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES 2,028,943 1,025,672 FUND BALANCE AT BEGINNING OF YEAR 1,712,553 856,648 Residual equity transfers out (256,743) (169,767) FUND BALANCE AT END OF YEAR $ 3,484,753 $ 1,712,553 City of Federal Way / 47 GENERALFUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Years Ended December 31, 1992 and 1991 REVENUES: Taxes Licenses and permits Intergovernmental Service charges and fees Fines and forfeitures Miscellaneous: Interest Other TOTAL REVENUES EXPENDITURES: Current: General government Security of persons and property Physical environment Economic environment Health Culture and recreation Capital Outlay Debt service: Interest and fiscal charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCE AT BEGINNING OF YEAR Residual equity transfers out FUND BALANCE AT END OF YEAR Variance Favorable 1991 Budget Actual (Unfavorable) Actual $ 12,814,894 $ 12,893,826 $ 78,932 $ 11,965,254 838,936 737,071 (101,865) 638,967 2,393,868 2,540,096 146,228 2,881,220 671,458 666,194 (5,264) 466,318 506,320 414,178 (92,142) 288,254 480,000 203,761 (276,239) 627,760 84,387 106,214 21,827 44,775 17,789,863 17,561,340 (228,523) 16,912,548 3,497,905 2,451,514 1,046,391 2,124,780 7,000,000 6,602,685 397,315 6,605,948 18,755 18,960 (205) 18,755 2,267,929 1,850,900 417,029 2,093,469 1,076,505 1,064,820 11,685 468,430 2,969,466 2,377,847 591,619 1,680,884 1,437,300 401,998 1,035,302 49,592 18,267,860 14,768,724 3,499,136 (477,997) 2,792,616 3,270,613 3,870,690 (759,690) (763,673) (3,983) (2,845,018) (759,690) (763,673) (3,983) (2,845,018) (1,237,687) 2,028,943 3,266,630 1,025,672 1,237,687 1,712,553 474,866 856,648 (256,743) (256,743) (169,767) $ $ 3,484,753 $ 3,484,753 1,712,553 48 / City of Federal Way GENERAL FUND SCHEDULE OF EXPENDITURES COMPARED TO BUDGET GENERAL GOVERNMENT LEGISLATIVE: Personal services Supplies Other services and charges Intergovermental services Interfund services TOTAL LEGISLATIVE JUDICIAL: Intergovermental services TOTAL JUDICIAL EXECUTIVE: Personal services Supplies Other services and charges Interfund services TOTAL EXECUTIVE FINANCIAL, RECORDS, AND CENTRAL SERVICES: Personal services Supplies Other sarvices and charges Intergovermental services Interfund services TOTAL FINANCIAL, RECORDS, AND CENTRAL SERVICES LEGAL: Personal services Supplies Other services and charges Interfund services TOTAL LEGAL PERSONNEL: Personal services Supplies Other services and charges Interfund services TOTAL PERSONNEL Year Ended December 31, 1992 VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ 70,360 $ 65,732 $ 4,628 1,000 6,228 (5,228) 139,270 97,463 41,807 30,000 10,098 19,902 42,405 33.077 9,328 283,035 212,598 70,437 336,8W 257,360 79,440 336,800 257,360 79,440 205,766 182,856 22,910 4,041 4,688 (647) 71,190 53,564 17,626 47,947 34,019 13,928 328,944 275,127 53,817 452,542 411,591 40.951 16,135 11,405 4,730 105,896 123,698 (17,802) 80,453 99,292 (18,839) 146,008 94,039 51,969 801,034 740,025 61,009 315,591 283,226 32,365 17,083 11,312 5,771 237,917 251,024 (13,107) 96,645 57,692 38,953 667,236 603,254 63,982 169,154 179,475 (10,321) 5,316 4,198 1,118 84,909 58,596 26,313 48,827 28,938 19,889 308,206 271,207 36,999 Page 1 of 4 City of Federal Way / 49 GENERAL FUND SCHEDULE OF EXPENDITURES COMPARED TO BUDGET Year Ended December 31, 1992 (Continued) OTHER GENERAL GOVERNMENTAL SERVICES: Personal services Supplies Other services and charges Interfund services TOTAL OTHER GENERAL GOVERNMENTAL SERVICES TOTAL GENERAL GOVERNMENT SECURITY OF PERSONS AND PROPERTY LAW ENFORCEMENT: Supplies Other services and charges Intergovermental services TOTAL LAW ENFORCEMENT DETENTION AND/OR CORRECTION: Intergovermental services TOTAL DETENTION AND/OR CORRECTION TOTAL SECURITY OF PERSONS AND PROPERTY PHYSICAL ENVIRONMENT NATURAL RESOURCES: Intergovernmental services TOTAL NATURAL RESOURCES TOTAL PHYSICAL ENVIRONMENT ECONOMIC ENVIRONMENT CHILD CARE SERVICES: Personal services Supplies Other services and charges TOTAL CHILD CARE SERVICES PLANNING AND COMMUNITY DEVELOPMENT: Personal services Supplies Other services and charges Intergovermental services Interfund services TOTAL PLANNING AND COMMUNITY DEVELOPMENT VARIANCE FAVORABLE BUDGET ACTUAL UNFAVORABLE 62,478 50,489 11,989 1,317 3,226 (1,909) 692,773 28,962 663,811 16,082 9,266 6,816 772,650 91,943 680,707 3,497,905 2,451,514 1,046,391 6,216 (6,216) 1,135 (1,135) 6,840,000 6,326,511 513,489 6,840,000 6,333,862 506,138 160.000 268,823 (108,823) 160,000 268,823 (108,823) 7,000,000 6,602,685 397,315 18,755 18,960 (2051_ 18,755 18,960 (205) 18,755 18,960 (205) 20,188 15,397 4,791 2,050 561 1,489 26,752 3,560 23.192 48,990 19,518 29,472 967,806 982,916 (15,110) 29,433 14,512 14,921 283,138 200,875 82,263 100 473 (373) 380,516 199,602 180,914 1,660,993 1,398,378 262,615 Page 2of4 50 / City of Federal Way GENERALFUND SCHEDULE OF EXPENDITURES COMPARED TO BUDGET Year Ended December 31, 1992 (Continued) HOUSING AND COMMUNITY DEVELOPMENT: Personal services Supplies Other services and charges Interfund services TOTAL HOUSING AND COMMUNITY DEVELOPMENT TOTAL ECONOMIC ENVIRONMENT HEALTH PUBLIC HEALTH: Personal services Supplies Other services and charges Intergover nental services TOTAL PUBLIC HEALTH TOTAL HEALTH CULTURE AND RECREATION SPECTATOR AND COMMUNITY EVENTS: Personal services Supplies Other services and charges Interfund services TOTAL SPECTATOR AND COMMUNITY EVENTS PARTICIPANT RECREATION: Personal services Supplies Other services and charges Interfund services TOTAL PARTICIPANT RECREATION VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) 378,953 317,305 61,648 9,219 8,287 932 25,681 15,789 9,892 144,093 91,623 52,470 557,946 433.004 124,942 2,267,929 1,850,900 417,029 44,724 35,338 9,386 1,400 662 738 445,710 428,394 17,316 584,671 600,426 (15,755) 1,076,505 1,064,820 11,685 1,076,505 1,064,820 11,685 179,465 162,705 16,760 3,989 2,615 1,374 66,495 55,234 11,261 64,530 34,182 30,348 314.479 254,736 59,743 694,793 505,266 189,527 56,828 43,030 13,798 409,255 208,770 200,485 192,792 122,915 69,877 1,353,668 879,981 473,687 Page 3 of 4 City of Federal Way / 51 GENERALFUND SCHEDULE OF EXPENDITURES COMPARED TO BUDGET Year Ended December 31, 1992 (Continued) PARK FACILITIES: Personal services Supplies Other services and charges Intergovermental services Interfund services TOTAL PARK FACILITIES TOTAL CULTURE AND RECREATION CAPITAL OUTLAY OTHER FINANCING USES Operating transfers out TOTAL OTHER FINANCING USES TOTAL GENERAL FUND VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) 614,399 595,508 18,891 237,339 246,777 (9,438) 301,802 332,661 (30,859) 5,000 1,163 3,837 142,779 67,021 75,758 1.301,319 1,243,130 58,189 2,969,466 2,377,847 591,619 1,437,300 401.998 1,035,302 759,690 763,673 (3,983) 759,690 763.673 (3,983 $ 19,027,550 $ 15,532,397 $ 3,495,153 Page 4 of 4 CITY OF CITY OF \�wY, 56 / City of Federal Way SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Year Ended December 31, 1992 With Comparative Totals for December 31, 1991 REVENUES: Taxes $ Licenses and permits Intergovernmental Service charges and fees Miscellaneous Interest Other TOTAL REVENUES EXPENDITURES: Current: General government Security of persons and property Physical environment Transportation Economic environment Health Culture and recreation TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES 1st 1/4% 2nd 1/4% Solid Arterial Real Estate Real Estate Waste/ Street Street Excise Tax Excise Tax Recycling $ $ 729,285 $ 728,818 $ 34,497 - - - 1,765,147 4,663,162 206,395 - - - 65,153 59,061 15,064 14,664 43,809 - 1,792 - 2,115,001 4,722,223 746,141 743,482 19,669 - 2,975,417 3,578,530 - 28,337 2,995,086 3,578,530 28,337 - (880,085) 1,143,693 717,804 743,482 872,061 (596,576) 275,485 (604,600) (701,412) (729,749) (701,412) (729,749) 1,143,693 16,392 13,733 122,722 122,722 122,722 FUND BALANCES AT BEGINNING OF YEAR 1,488,059 972,674 112,115 87,479 Residual equity transfers out (49,484) - - - - FUND BALANCES AT END OF YEAR $ 833,975 $ 2,116,367 $ 128,507 $ 101,212 $ 122,722 Page 1 of 2 City of Federal Way / 57 Special Grants - Community Paths and TOTALS Contracts/ Miscellaneous Development Trails Surface Water Impact Strategic Studies Governmental Block Grant Reserve Management Fee Reserve 1992 1991 $ $ $ $ $ $ $ $ 1,458,103 $ 1,394,710 34,497 81,396 210,205 162,662 8,578 6,809,754 2,586,646 - - - 2,516,051 548,335 3,270,781 1,148,853 5,474 70,631 78,894 308,941 49,360 _ 193,143 - 238,744 93 215,679 162,662 8,578 2,779,825 548,335 78,894 12,120,820 5,261,059 7,893 7,893 - - 172 172 17,322 38,801 44,436 - 102,906 - - 1,146,109 224,062 7,924,118 4,530,747 149,947 - - 149,947 190,325 4,650 4,650 - 28,337 227,287 38,801 162,662 1,190,545 224,062 8,218,023 4,965,681 - 176,878 - 8,578 1,589,280 324,273 78,894 3,902,797 295,378 57,500 16,669 - 457,185 - - 1,526,137 2,000,000 - (406,569) (187,001) (2,621,307) (1,276,325) 57,500 (389,900) - 270,184 - - (1,095,170) 723,675 57,500 (213,022) 8,578 1,859,464 324,273 78,894 2,807,627 1,019,053 - 499,274 10,817 788,737 - 2,000,000 5,959,155 4,991,655 _ - (98,193) - (147,677) (51,553) $ 57,500 $ 286,252 $ - $ 19,395 $ 2,550,008 $ 324,273 $ 2,078,894 $ 8,619,105 $ 5,959,155 Page 2of2 60 / City of Federal Way SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended December 31, 1992 With Comparative Totals for December 31, 1991 (Continued) REVENUES: Taxes Licenses and permits Intergovernmental Service charges and fees Miscellaneous: Interest Other TOTAL REVENUES EXPENDITURES: Current: Physical environment Transportation Culture and recreation TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Operating transfers in Operating transfers out - TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCES AT BEGINNING OF YEAR Residual equity transfers out FUND BALANCES AT END OF YEAR 2nd 1/4% Real Estate Excise Tax Fund Variance Favorable 1991 Budget Actual (Unfavorable) Actual $ 711,256 $ 728,818 $ 17,562 $ 652,091 18,493 14,664 (3,829) 729,749 743,482 13,733 652,091 729,749 743,482 13,733 652,091 (729,749) (729,749) (564,612) (729,749) (729,749) (564,612) 13,733 13,735 87,479 87,479 87,479 $ $ 101,212 $ 101,212 $ 87,479 Page 3 of 6 City of Federal Way / 61 SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended December 31, 1992 With Comparative Totals for December 31, 1991 (Continued) Solid Waste/Recycling Fund Paths and Trails Reserve Fund Variance Variance Favorable 1991 Favorable 1991 Budget Actual (Unfavorable) Actual Budget Actual (Unfavorable) Actual 5,826 8,578 2,752 8,769 113,159 122,722 9,563 113,159 122,722 9,563 5,826 8,578 2,752 8,769 5,826 8,578 2,752 8,769 16,102 16,102 113,159 122,722 9,563 (10,276) 8,578 18,854 8,769 10,276 10,817 541 2,048 $ 113,159 $ 122,722 $ 9,563 $ $ $ 19,395 $ 19,395 $ 10,817 Page 4 of 6 62 / City of Federal Way SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Years Ended December 31, 1992 With Comparative Totals for December 31, 1991 (Continued) REVENUES: Taxes Licenses and permits Intergovernmental Service charges and fees Miscellaneous: Interest Other TOTAL REVENUES EXPENDITURES: Current: Physical environment Transportation Culture and recreation TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCES AT BEGINNING OF YEAR Residual equity transfers out FUND BALANCES AT END OF YEAR Surface Water Management Fund Variance Favorable 1991 Budget Actual (Unfavorable} Actual 3,250,073 2,516,051 (734,022) 1,129,116 26,793 70,631 43,838 - - 193,143 193,143 - 3,276,866 2,779,825 (497,041) 1,129,116 67,001 44,436 22,565 - 2,160,998 1,146,109 1,014,889 723,391 2,227,999 1,190,545 1,037,454 723,391 1,048,867 1,589,280 540,413 405,725 388,800 457,185 68,385 (187,001) (187,001) 201,799 270,184 68,385 1,250,666 1,859,464 608,798 405,725 788,737 788,737 388,032 (98,193 (98,193) (5,020) $ 1,250,666 $ 2,550,008 $ 1,299,342 $ 788,737 Page 5 of 6 City of Federal Way / 63 SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended December 31, 1992 With Comparative Totals for December 31, 1991 (Continued) Totals Variance Favorable 1991 Budget Actual (Unfavorable) Actual $ 1,422,512 $ 1,458,103 $ 35,591 $ 1,394,710 182,617 34,497 (148,120) 81,396 5,344,851 6,436,887 1,092,036 1,879,493 3,370,073 2,722,446 (647,627) 1,148,853 138,944 224,573 85,629 49,592 - 238,744 238.744 93 10,458,997 11,115,250 656,253 4,554,137 67,001 64,105 2,896 - 10,381,178 7,700,056 2,681,122 4,530,746 33,278 28,337 4,941 227,287 10,481,457 7,792,498 2,688,959 4,758,033 (22,460) 3,322,752 3,345,212 (203,896 1,371,150 1,451,968 80,818 (1,629,323) (2,214,738) (585,415) (1,276,325) (258,173) (762,770) (504,597) (1,276,325) (280,633) 2,559,982 2,840,615 (1,480.220) 2,551,143 3,459,881 908,738 4,991,655 - (147,677) (147,677) (51,553) $ 2,270,510 $ 5,872,186 $ 3,601,676 $ 31459,882 page 6 of 6 CITY OF City of Federal Way / 65 DEBT SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 ASSETS Cash and cash equivalents TOTAL ASSETS LIABILITIES AND FUND BALANCE Liabilities: Vouchers payable Accounts payble Interest payable TOTAL LIABILITIES Fund balance: Reserved for debt service TOTAL FUND BALANCE TOTAL LIABILITIES AND FUND BALANCE 1992 1991 $ 1,438,177 $ 2,147,923 $ 1,438,177 $ 2,147,923 $ 1,315 $ 2,077 - 42,980 3.392 42,980 1,434,785 2,104,943 1,434,785 2,104,943 $ 1,438,177 $ 2,147,923 66 / City of Federal Way DEBT SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For the Years Ended December 31, 1992 and 1991 REVENUES: TOTAL REVENUES EXPENDITURES: Debt Service: Principal Interest and fiscal charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Operating transfers in TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCE AT BEGINNING OF YEAR FUND BALANCE AT END OF YEAR 1992 1991 365,000 1,736,319 2,101,319 300,000 111,826 411,826 (2,101,319) (411,826) 1,431,161 2,100,769 1,431,161 2,100,769 (670,158) 1,688,943 2,104,943 416,000 $ 1,434,785 $ 2,104,943 City of Federal Way / 67 DEBT SERVICE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Years Ended December 31, 1992 and 1991 REVENUES: TOTAL REVENUES EXPENDITURES: Debt Service: Principal Interest and fiscal charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Operating transfers in TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCES AT BEGINNING OF YEAR FUND BALANCES AT END OF YEAR VARIANCE 1992 1992 FAVORABLE 1991 BUDGET ACTUAL (UNFAVORABLE) ACTUAL 365,000 365,000 - 1,772,360 1,736,319 36,041 411,826 2,137,360 2,101,319 36,041 411,826 (2,137,360) (2,101,319) 36,041 (411,826) 1,466,702 1,431,161 (35,541) 2,100,769 1,466,702 1,431,161 (35,541) 2,100,769 (670,658) (670,158) 500 1,688,943 2,104,943 2,104,943 416,000 $ 1,434,285 $ 1,434,785 $ 500 $ 2,104,943 CITY OF City of Federal Way / 69 CAPITAL PROJECT FUNDS COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 1992 1991 ASSETS Cash and cash equivalents $ 404,463 $ 764 TOTAL ASSETS $ 404,463 $ 764 LIABILITIES AND FUND BALANCE Liabllities: $ $ TOTAL LIABILITIES - Fund balance: Unreserved-undesignated 404,463 764 TOTAL FUND BALANCE 404,463 764 TOTAL LIABILITIES AND FUND BALANCE $ 404.463 $ 764 70 / City of Federal Way CAPITAL PROJECT FUNDS COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For the Years Ended December 31, 1992 and 1991 REVENUES: Miscellaneous TOTAL REVENUES EXPENDITURES: Capital outlay: General government Culture and recreation TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Bond proceeds Operating transfers in TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCE AT BEGINNING OF YEAR FUND BALANCE AT END OF YEAR 1992 1991 $ $ 30 30 403,699 403,699 133,622 12,500,000 12,633,622 (12,633,592) 12,500,764 12,500,764 403,699 (132,828) 764 133,592 $ 404,463 $ 764 City of Federal Way / 71 INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET December31, 1992 With Comparative Totals for December 31, 1991 Data Processing Rlsk Telecommun- Support Fleet and Bulldings and Totals Management Icatlons Services Equipment Furnishing a 1992 1991 ASSETS Current Assets: Cash and cash equivalents $ 147,329 $ 305,547 $ 15,541 $ 77,530 $ 112,615 $ 658,562 $ 299,456 TOTAL CURRENT ASSETS $ 147,329 $ 305,547 $ 15,541 $ 77,530 $ 112,615 $ 658,562 $ 299,456 Property, plant and equipment: Data processing/ telecommunication equipment - 844,095 - 844,095 530,793 Transportation equipment 398,677 - 398,677 247,117 Heavy equipment - - 313,448 - 313.448 119,047 Buildings & furnishings - - 2,842,537 2,842,537 409,903 Other equipment - 35,507 32,697 68,204 20,030 844,095 35,507 744,822 2,842,537 4,466,961 1,326,890 Less accumulated depreciation 101,985 4,460 73,113 73,561 253,119 79,759 Net property, plant and equipment - 742,110 31.047 671.709 2,768,976 4.213,842 1,247,131 TOTAL ASSETS $ 147,329 $ 1,047,657 $ 46.588 $ 749,239 $ m 2,881,591 $ 4,872,40044 $ 1,546,587 LIABILITIES AND FUND EQUITY Current liabilities Vouchers payable Accounts payable Payroll payable Deposits payable Certificates of participation payable Compensated absences payable TOTAL CURRENT LIABILITIES Long-term liabilities: Certificates of participation payable TOTAL LONG-TERM LIABILITIES TOTAL LIABILITIES Fund Equity: Contributed Capital Retalned Earnings: unreserved TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY $ 2,649 $ 198,426 $ 10,046 $ 4,417 $ 15,623 $ 231,161 $ 86,894 18,037 1,685 - - 17,397 37,119 - _ - 3,375 6,034 6,034 - 190,000 190,000 - 3,451 1,035 - 4,486 2,088 20,686 203,562 11,081 4,417 229,054 468,800 92,357 - - - - 2,140,000 2,140,000 - 2,140,000 2,140,000 20,686 203,562 11,081 4,417 2,369,054 2,608,800 92,357 844,095 35,507 744,822 512,537 2,136,961 1,326,890 126,643 - 126,643 127,340 126,643 844,095 35,507 744.822 512,537 2,263,604 1,454,230 $ 147,329 $ 1,047,657 $ 46,588 $ 749,239 $ 2,881,591 $ 4,872,404 $ 1,546,587 72 / City of Federal Way INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND EQUITY For the Year Ended December 31, 1992 With Comparative Totals for December 31, 1991 OPERATING REVENUES: Service charges and fees Miscellaneous TOTAL OPERATING REVENUES OPERATING EXPENSES: Personnel services Services and charges Materials and supplies Insurance Claims Depreciation Data Processing Risk Telecommun- Support Fleet and Buildings and Totals Management Ications/GIS Serytces Equipment Furnishings 1992 1991 $ 235,663 $ 538,009 $ 139.494 $ 110,459 $ 276,184 $ 1,299,809 $ 989,908 - 3,361 - - 37,264 40,625 387 235,663 541,370 139,494 110,459 313,448 1,340,434 990,295 - 64,944 71,304 - 136,248 71,769 4,885 328,290 83,310 36,270 221.103 673,858 484,008 - 95,405 34,101 25,137 20,026 174,669 178,996 126,084 - - - - 126,084 61,681 35,253 - - - 35,253 6,388 70,746 3,208 57,734 41,588 173,356 79,759 TOTAL OPERATING EXPENSES 166,222 559,385 192,003 119,141 282,717 1,319,468 882,601 OPERATING INCOME (LOSS) $ 69,441 $ (18,015) $ (52,509) $ (8,682) $ 30,731 $ 20,966 $ 107.694 NON -OPERATING REVENUES (EXPENSES): Interest income $ Interest expense 5,915 $ 4,985 $ 2,309 $ 2,617 $ 2,867 $ 18,693 $ 19,646 - (28,968) (28,988) TOTAL NON -OPERATING REVENUES (EXPENSES) 5,915 4,985 2,309 2,617 (26,101) (10,275) 19,646 NET INCOME (LOSS) 75,356 (13,030) (50,200) (6,065) 4,630 10,691 127,340 RETAINED EARNINGS, January 1 51,287 17,512 57,106 6,065 (4,630) 127,340 - Residual equity transfers out - (4,482) (6,906) - - (11,388) - RETAINED EARNINGS, December 31 126,643 - - - - 126,643 127,340 CONTRIBUTED CAPITAL, January 1 - 530,793 18,529 367,665 409,903 1,326,890 - Increases to contributed capital - 313,302 16,978 377,157 102,634 810,071 1,326,890 CONTRIBUTED CAPITAL, December 31 - 844,095 35,507 744,822 512,537 2.138,961 1,326,890 FUND EQUITY AT END OF YEAR $ 126,643 $ 844,095 $ 35,507 $ 744,822 $ 512,537 $ 2.263.604 $ 1,454,230 City of Federal Way / 73 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS For the Year Ended December 31, 1992 With Comparative Totals for December 31, 1991 Data Processing Risk Telecommun- Support Fleet and Buildings an Management Icatione Services Equipmsnt Furnishings Totals 1992 1991 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from users $ 235,662 $ 538,010 $ 139.494 $ 110,459 $ 276,184 $ 1,299,809 $ 989,909 Cash payments to suppliers for goods/services (116,131) (256,770) (100,483) (61,686) (212,788) (747,858) (615,779) Cash payments to employees (64,944) (71,304) (136,248) (66,306) Cash payments to claimants (35,253) - (35,253) (6,114) Cash payments to other funds for services (30,133) (16,207) - (46,340) (22.287) Other operating receipts 3,361 - 43,298 46,659 387 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 84.278 189,524 (48,500) 48,773 106,694 380,769 279,810 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: - - - - NET CASH PROVIDED (USED) BY NON - CAPITAL FINANCING ACTIVITIES - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets (311,668) (1,506) (102,634) (415,808) (225,221) Cash contributions for capital acquisitions 311,668 1,506 102,634 415,808 225,221 Interest paid on debt service (28,968) (28,968) - Residual equity transfers out (4,482) (6,906) (11,388) NET CASH PROVIDED (USED) FOR CAPITAL AND RELATED FINANCING ACTIVITIES (4,482) (6.906) (28,968) (40,356) CASH FLOWS FROM INVESTING ACTIVITIES: Receipts of interest 5,915 4,985 2,309 2,617 2,867 18,693 19,646 NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 5,915 4,985 2,309 2,617 2,867 18,693 19,646 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 90,193 190,027 (53,097) 51,390 80,593 359,106 299,456 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 57,136 115,520 68,638 26,140 32,022 299,456 - CASH AND CASH EQUIVALENTS AT END OF YEAR $ 147,329 $ 305,547 $ 15,541 $ 77,530 $ 112,615 $ 658,562 $ 299,456 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income $ 69,440 $ (18,014) $ (52,509) $ (8,682) $ 30,731 $ 20,966 $ 107,694 Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense - 70,746 3,288 57,734 41,588 173,356 79,759 Increase in vouchers/accounts payable 14,838 137,150 1,339 (279) 28,341 181.389 86,894 Increase in accrued payroll/ compensated absences payable - (358) (518) - (976) 5,463 Increase in deposits payable - 6,034 6,034 - TOTAL ADJUSTMENTS 14,838 207,538 4.009 57,455 75,963 359,803 172,116 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 84,278 $ 189,524 $ (48.500) $ 48,773 $ 105,694 $ 380,769 $ 279,810 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Contributions of capital assets $ - $ 1,634 $ 15,472 $ 377,157 $ - $ 394,263 $ 1,102,264 In 1992, the City issued $2,330,000 in Certificates of Participation to pay the cost of acquiring a City Hall by a means of a lease with the option to purchase. CITY OF Ac�-- City of Federal Way / 75 ASSETS Cash and cash equivalents Cash - with escrow agent Cash - deferred compensation Investments with plan administrator Receivables (net): Interest Due from other funds TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities: Vouchers payable Retainage payable Retainage payable - with escrow Due to other governments Deferred compensation payable Custodial accounts Deposits payable TOTAL LIABILITIES Fund balances: Reserved for employee retirement TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES s TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET December 31, 1992 With Comparative Totals for December 31, 1991 Expendable Trust Fund Agency Funds Federal Way Fees and Retirement Deferred Taxes Clearing Totals System Compensation Fund 1992 1991 $ $ 193,898 $ 193,898 $ 153,950 165,880 165,880 - - 283,727 - 283,727 224,971 885,316 - 885,316 479,656 4,179 - 4,179 4,480 14.702 14,702 - $ 904,197 $ 283,727 $ 359,778 $ 1,547,702 $ 863,057 7,327 - 7,327 12,604 8,008 8,008 - 165,880 165,880 - - 95,169 95,169 39,491 283,727 - 283.727 224,971 - 12,530 12,530 12,530 - - 78,191 78,191 35,679 7,327 283,727 359,778 650,832 325,275 896,870 896,870 537,782 896,870 - - 896,870 537,782 $ 904,197 $ 283,727 $ 359,778 $ 1,547,702 $ 863,057 76 / City of Federal Way EXPENDABLE TRUST FUND FEDERAL WAY RETIREMENT SYSTEM COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 1992 1991 ASSETS Cash and cash equivalents with plan administrator $ - $ 66,250 Investments with plan administrator 885,316 479,656 Receivables (net): Interest 4,179 4,480 Due from other funds 14,702 - TOTAL ASSETS $ 904,197 $ 550,386 LIABILITIES AND FUND BALANCE LIabllRies: Vouchers payable $ 7,327 $ 12,604 TOTAL LIABILITIES 7,327 12,604 Fund balance: Reserved for employee retirement 896,870 537,782 TOTAL FUND BALANCE 896,870 537,782 TOTAL LIABILITIES AND FUND BALANCE $ 904,197 $ 550,386 City of Federal Way / 77 EXPENDABLE TRUST FUND FEDERAL WAY RETIREMENT SYSTEM COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For the Years Ended December 31, 1992 and 1991 REVENUES: 1992 1991 Miscellaneous: Member contributions Employer contributions $ 184,449 $ 134,589 Employee contributions 226,808 309,047 Investment income 27,181 17,463 TOTAL REVENUES 438,438 461,099 EXPENDITURES: Employee contributions refunded 64,233 15,085 Consultant services 39,100 22,929 TOTAL EXPENDITURES 103,333 38,014 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 335,105 423,085 OTHER FINANCING SOURCES (USES): Operating transfers in 23,983 20,573 TOTAL OTHER FINANCING SOURCES (USES): 23,983 20,573 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES: 359,088 443,658 FUND BALANCE AT BEGINNING OF YEAR 537,782 94,124 FUND BALANCE AT END OF YEAR $ 896,870 $ 537,782 78 / City of Federal Way COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS DEFERRED COMPENSATION FUND ASSETS: Cash with ICMA LIABILITIES: Deferred compensation payable FEES & TAXES CLEARING FUND ASSETS: Cash Cash - with escrow LIABILITIES: Due to other governments Retainage payable Retainage payable - with escrow Custodial accounts Deposits payable SPECIAL DEPOSIT ASSETS: Cash LIABILITIES: Customer deposits TOTAL - ALL AGENCY FUNDS ASSETS: Cash Cash with ICMA Cash with escrow agent TOTAL ASSETS LIABILITIES: Due to other governments Retainage payable Retainage payable - with escrow Deferred compensation payable Custodial accounts Customer deposits TOTAL LIABILITIES For the Year Ended December 31, 1992 BALANCE BALANCE 01/01/92 ADDITIONS DEDUCTIONS 12/31/92 $ 224,971 $ 58,756 $ $ 283,727 $ 224,971 $ 58,756 $ $ 283,727 $ 53,093 $ 444,477 $ 303,672 $ - 165,880 53,093 610,357 303,672 $ 39,491 $ 656,842 $ 601,164 $ 497 10,270 2,759 165,880 - 12,530 - - 575 89,336 11,720 53,093 922,328 615,643 193,898 165,880 359,778 95,169 8,008 165,880 12,530 78,191 359,778 $ 34,607 $ $ 34,607 $ 0 $ 34,607 $ $ 34,607 $ 0 $ 87,700 $ 444,477 $ 338,279 $ 193,898 224,971 58,756 - 283,727 - 165,880 - 165,880 $ 312,671 $ 669,113 $ 338,279 $ 643,505 $ 39,491 $ 656,842 $ 601,164 $ 95,169 497 10,270 2,759 8,008 - 165,880 - 165,880 224,971 58,756 283,727 12,530 - - 12,530 35,182 89,336 46,327 78,191 $ 312,671 $ 981,084 $ 650,250 $ 643,505 City of Federal Way / 79 COMPARATIVE SCHEDULES OF GENERAL FIXED ASSETS BY SOURCE December 31, 1992 and 1991 GENERAL FIXED ASSETS (A) Land Buildings Other improvements Equipment Assets under capital lease TOTAL GENERAL FD(ED ASSETS INVESTMENT IN GENERAL FIXED ASSETS FROM: Capital Projects Funds: General obligation bonds General Fund: General revenues Donations Capital leases Special Revenue Funds: General revenues TOTAL INVESTMENT IN GENERAL FIXED ASSETS 1992 1991 s 22,200,861 $ 22,00401 334,000 334,000 453,464 180,171 1,450,000 1,450,000 $ 24,438,325 $ 23,969,032 $ 12,966,321 $ 12,966,321 244,956 - 9,568,540 9,372,540 1,450,000 1,450,000 208,508 180,171 s 24,438,325 $ 23,969,032 (A) Excludes all public domain assets such as streets, sidewalks, gutters, bridges, drainage facilities and lighting systems. 80 / City of Federal Way FUNCTION/ACTIVITY SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY(A) December31, 1992 OTHER TOTAL LAND BUILDINGS IMPROVEMENTS EQUIPMENT GENERAL GOVERNMENT Misc General Government $ 508,492 $ 508,492 $ $ $ - TOTAL GENERAL GOVERNMENT $ 508,492 $ 508,492 $ $ - $ - CULTURE AND RECREATION 23,929,833 23,142,369 334,000 453,464 TOTAL GENERAL FIXED ASSETS BY FUNCTION $ 24,438,325 $ 23,650,861 $ 334,000 $ 453,464 $ CONSTRUCTION IN PROGRESS $ - TOTAL GENERAL FWED ASSETS $ 24,438,325 (A) Excludes all public domain assets such, as strests, sidewalks, gutters, bridges, drainage facilities and lighting systems. City of Federal Way / 81 SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY(A) For the Year Ended December 31, 1992 GENERAL GENERAL FIXED ASSETS FIXED ASSETS FUNCTION/ACTIVITY 1/31/92 ADDITIONS DEDUCTIONS(B) 12/31/92 GENERAL GOVERNMENT Judicial $ - $ 1,485 $ 1,485 $ - Misc General Government 508,492 508,492 TOTAL GENERAL GOVERNMENT $ 508,492 $ 1,485 $ 1,485 $ 508,492 PHYSICAL ENVIRONMENT 1,634 1,634 - STREET/TRANSPORTATION 159,344 159,344 ECONOMIC ENVIRONMENT - 5,157 5,157 CULTURE AND RECREATION 23,460,540 695,936 226,643 23,929,833 TOTAL GENERAL FIXED ASSETS BY FUNCTION $ 23,969,032 $ 863,556 $ 394,263 $ 24,438,325 TOTAL GENERAL FIXED ASSETS $ 23,969,032 $ 863,556 $ 394,263 $ 24,438,325 (A) Excludes all public domain assets such as streets, sidewalks, gutters, bridges, drainage facilities and lighting systems. JOFEa ADS GENERAL GOVERNMENTAL EXPENDITURES AND OTHER USES BY FUNCTION(A) GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS Table 1 CULTURE OTHER FISCAL GENERAL PUBLIC PHYSICAL TRANS- ECONBOMIC (B) AND CAPITAL DEBT FINANCING TOTAL YEAR GOVERNMENT SAFETY ENVIRONMENT PORTATION ENVIRONMENT HEALTH RECREATION OUTLAY SERVICE USES EXPENDITURES 1990 $1,315,894 $3,836,555 $13,592 $1,637,605 $1,016,869 $321,673 $165,194 $ $39,378 $1,178,248 $9,525,008 1991 2,124,780 6,623,270 18,755 4,530,747 2,283,794 468,430 1,908,171 - 461,418 4,121,343 22,540,708 1992 2,459,407 6,602,857 121,866 7,924,118 2,000,847 1,069,470 2,406,184 401,998 2,101,319 3,384,980 28,473,046 (A) All expenditures are reported on the modified accrual basis. General Government expenditures exclude the book entries for capital leases of $8,300 in 1990 and $1,450,000 in 1991. They also exclude residual equity transfers. (B) During 1992, the human service contracts were reclassified from Economic Environment to Health. NOTE: The City was incorporated on February 28, 1990. Therefore, no history of expenditures exists prior to incorporation. y SCHEDULE OF MAJOR REVENUES AND OTHER FINANCING SOURCES BY SOURCE (A) GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS Table 2 LICENSES INTER- CHARGES OTHER FISCAL AND GOVERNMENTAL FOR FINES AND MISCELLANEOUS FINANCING TOTAL YEAR TAXES (8) PERMITS REVENUE SERVICES FORFEITURES REVENUE SOURCES(C) REVENUE 1990 $9,143,158 $509,541 $3,315,281 $981,768 $117,136 $340,495 $1,178,248 $15,585,627 1991 13,359,964 720,363 5.467,866 1,615.171 288,254 721,989 4,100,770 26,274,377 1992 14,351,929 771,568 91349,850 3,936,975 414,178 857,860 2,957,298 32,639,458 (A) Revenues are recorded on the modifled accrual basis. (8) See Table 3 for further detail. (C) Other Financing Sources does not include capital leases of $1,450,000 In 1991. (D) The City was Incorporated on February 26, 1990. Therefore, no history of expenditure exists prior to Incorporation. City of Federal Way / 85 GENERAL FISCAL PROPERTY YEAR TAXES TAX REVENUE BY SOURCE GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUNDS MISCELLANEOUS BUSINESS AND OTHER GENERAL UTILITY OCCUPATION TAXES AND SALES TAX TAXES TAXES ASSESSMENTS (A) 1990 $3,490,242 $4,529,165 1991 4,457,526 6,468,697 1992 4,908,731 6,824,953 Table 3 TOTAL TAXES $1,123,751 $9,143,158 2,433,741 13,359,964 2,618,245 14,351,929 (A) Includes real estate excise, local criminal justice, gambling excise, and other taxes and related assessments. PROPERTY TAX LEVIES AND COLLECTIONS PERCENT FISCAL TOTAL TAX CURRENT TAX OF LEVY YEAR LEVY COLLECTIONS COLLECTED 1990 $4,298,526 $4,103,478 95.5% 1991 4,582,620 4,371,463 95.4% 1992 5,031,533 4,758,677 94.6% Sources: TOTAL DELINQUENT COLLECTIONS TAX TOTAL TAX AS % OF COLLECTIONS COLLECTIONS CURRENT LEVY $ $4,103,478 95.5% 87,282 4,458,745 97.3% 151,681 4,910,358 97.6% Table 4 TOTAL OUTSTANDING OUTSTANDING DELINQUENT TAXES AS % OF TAXES CURRENT LEVY $190,139 4.4% 294,D63 6.4% 394,906 7.8% 1) In 1990, the total tax levy is the diverted road portion of the property tax levied by King County and transferred to the City upon incorporation. 2) Other data has been derived from the 'Annual Tax Receivable Summary' prepared by the King County Finance Department. City of Federal Way / 87 ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY* FISCAL YEAR REAL PROPERTY 1990 $2,928,672,425 1991 3,027,664,413 1992 3,448,013,318 PERSONAL STATE PUBLIC PROPERTY SERVICE PROPERTY $100,236,709 $72,783,925 110,845,208 75,442,874 120,842,393 75,109,073 TOTAL $3,101,693,059 3,213,952,495 3,643,964,784 Table 5 PERCENT INCREASE (DECREASE) 3.6% 13.4% Real, personal, and state public service property has been assessed at 100% of the estimated value. NOTE: These figures includes all final tax adjustments, omits and senior citizen exempted property. This total assessed value was reduced by senior citizen exemptions (no tax amounts) of $15,693,500 and prior year omits of $4,306,734 yielding a regular levy value of $3,623,964,550. These assessed valuations are the basis for the following year's tax levy. Source: IGng County Assessors Office. PROPERTY TAX LEVIES -ALL OVERLAPPING GOVERNMENTS Table 6 FEDERAL WAY EMERGENCY FISCAL CITY OF SCHOOL KING WASHINGTON GREEN RIVER PORT OF FIRE DISTRICT MEDICAL YEAR FEDERAL WAY DISTRICT #210 COUNTY ` STATE FLOOD ZONE SEATTLE #39 LIBRARY SERVICES TOTAL TAX RATES PER $1,000 OF ASSESSED VALUATION 1990 1.83 4.18 2.05 4.05 - 0.45 1.77 0.58 0.25 15.16 1991 1.48 3.51 1.73 3.38 0.04 0.32 1.50 0.49 0.20 12.65 1992 1.57 4.41 1.80 3.54 0.04 0.34 1.59 0.54 0.25 14.08 DETAIL OF TAX RATES FOR 1992 Basic Rate 1.57 - 1.29 3.54 0.04 0.31 1.38 0.44 - Voted Rate - 4.41 0.51 - - 0.03 0.21 0.10 0.25 TAX LEVIES 1990 $4,298,526 $14,453,576 $148,895,759 $294,742,566 $ - $32,967,034 $5,969,096 $17,407,235 18,169,217 $536,903,009 1991 4,582,620 15,921,245 175,252,520 344,626,681 410,505 32,876,348 6,652,219 23,073,495 20,242,839 623,638,472 1992 5,031,533 20,813,253 187,697,900 369,890,459 430,547 35,898,437 7,272,423 23,199,099 26,073,064 676,306,715 Source: King County Assessor's Office and King County Department of Finance. 00 co n 0 lb m m FISCAL YEAR 1990 1991 1992 (A) (B) (C) RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA (B) (A) ASSESSED POPULATION VALUE 67,304 $3,093,528,051 70,660 3,199,629,123 72,350 3,623,964,550 (C) GROSS BONDED DEBT $1,710,000 15,360,000 17,325,000 LESS DEBT SERVICE FUNDS $416,000 2,104,943 1,434,785 RATIO OF NET BONDED DEBT NET TO ASSESSED BONDED DEBT VALUE Table 7 NET BONDED DEBT PER $1,294,000 0.0004 $19.23 13,255,057 0.0041 187.59 15,890,215 0.0044 219.63 Sources: U.S. Census Bureau; State of Washington Office of Program Planning and Fiscal Management, Population Study Division; and the City's Community Development Department. The final certified Regular Levy assessed value of taxable property which was used 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 $3,623,964,550 has been reduced by senior citizen exemptions of $15,693,500 and prior year omits of $4,306,734 to arrive at taxable assessed valuation. Includes certificates of participation issued In 1901 and 1992. 9 90 / City of Federal Way COMPUTATION OF LIMITATION OF INDEBTEDNESS Decmeber 31, 1992 Table 8 GENERAL DEBT CAPACITY EXCESS LEVY EXCESS LEVY TOTAL (Limited) FINANCING (Unlimited) OPEN SPACE UTILITY DEBT DESCRIPTION COUNCILMANIC LEASES EXCESS LEVY AND PARK PURPOSES CAPACITY Statutory debt limit: (AV=$3,623,964,550) (A) .75%AV@100% $27,179,734 $27,179,734 ($54,359,468) 2.50% AV @ 100% 90,599,114 90,599,114 90,599.114 $271,797,342 Add: Cash on hand for debt redemption (B) 1,277,720 157,065 - 1,434.785 Less: Bonds outstanding (13,590,000) (3,735,000) (17,325,000) Principal on equipment lease/purchase contracts REMAINING DEBT CAPACITY $14,867,454 $23,601,799 $36,239,646 $90,599,114 $90,599,114 $255,907,127 TOTAL REMAINING "GENERAL- CAPACITY (C) $74,708,899 (A) This figure represents the City's final total taxable assessed valuation (AV) for 1992 which was used to determine the 1993 property tax levy. (B) Reflects balance available in the Debt Service Fund as of December 31, 1992. (C) Combined total for Councilmanic, Financing Lease, and Excess Levy capacities. City of Federal Way / 91 COMPUTATION OF DIRECT AND OVERLAPPING DEBT December 31, 1992 JURISDICTION CITY OF FEDERAL WAY KING COUNTY PORT OF SEATTLE SCHOOL DISTRICT #210 GREEN RIVER FLOOD ZONE FIRE DISTRICT #39 LIBRARY TOTAL DIRECT AND OVERLAPPING DEBT (A) (B) GROSS GENERAL PERCENTAGE OBLIGATION DEBT APPLICABLE TO OUTSTANDING FEDERAL WAY $ 17,325,000 (C) 100.00% 493,706,974 3.08% 24,284,300 3.08% 58,849,391 68.08% - 0.93% 3,770,965 70.18% 63,847,542 7.42% Table e AMOUNT APPLICABLE TO 17,325,000 15,206,175 747,956 40,064,665 2,646,463 4,737,488 $ 80,727,747 (A) Total general obligation bonds outstanding on December 31, 1992, exclusive of refunded bonds. Source is King County Department of Finance. (B) Determined by ratio of 1992 assessed valuation of property subject to taxation in overlapping unit to valuation of properly subject to taxation in reporting unit. (C) Includes certificates of participation issued in 1991 and 19W. 92 / City of Federal Way RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR Table 10 GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES FISCAL (A) YEAR PRINCIPAL INTEREST 1990 $ - $ - $ 1991 300,000 111,203 1992 365,000 1,725,325 (B) RATIO OF DEBT TOTAL SERVICE GENERAL TO GENERAL TAL DEBT GOVERNMENTAL GOVERNMENTAL ;ERVICE EXPENDITURES EXPENDITURES 411,203 22,540,708 1.8% 2,090,325 28,473,046 7.3% (A) Excludes bond issuance and debt registration costs. (B) Includes other financing uses for general, special revenue, and debt service funds. See Table 1 for detail. City of Federal Way / 93 DEMOGRAPHIC STATISTICS Table 11 EDUCATION (A) LEVEL IN YEARS (B) (C) FISCAL PER CAPITA MEDIAN OF FORMAL SCHOOL UNEMPLOYMENT YEAR POPULATION INCOME AGE SCHOOLING ENROLLMENT RATE 1990 67,304 $ - 29.0 13.0 18,167 3.4% 1991 70,660 15,750 27.8 13.0 18,827 4.6% 1992 72,350 15,155 30.6 13.0 19,488 5.7% (A) Per capita income for Federal Way was not available for 1990 - the year of incorporation. (B) Includes both public and private school enrollment. Kindergarten is included though not State mandated (C) The unemployment rates for 1990 and 1991 reflect the annual average for Icing County. The unemployment rate for 1992 reflects the annual average for the City of Federal Way. Sources: Population, per capita income, and median age data were obtained from the City's Community Development Department. School data was provided by the Federal Way School District. Unemployment rate data was received from the State of Washington Employment Security Department. Commercial Construction Value Year Permits (In Thousands) 1990 123 $ 8,122 1991 114 6,043 1992 175 16,790 PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS Residential Construction (A) Value Permits (In Thousands) 448 $ 43,102 422 29,872 400 36,101 Multi -Family Construction (A) Bank Deposits (B) Value King County Permits (In Thousands) (In Millions) _ 11 $ 3,500 $ 17,624 19,300 19,347 Table 12 Property Assessed Valuation (C) Total Taxable Exemptions Non -Taxable (In Thousands) (In Thousands) (In Thousands) $ 3,101,693 $ 16,985 $ 8,165 3,213,952 24,062 13,033 3,643,965 38,500 15,694 (A) Source: Federal Way Community Development Department. Commercial construction includes alterations. Other building -related permits (plumbing, mechanical, fire alarm, etc.) numbering 1,058 and valued at $8,265,723 have been excluded. (B) Source: Federal Reserve Bank of San Francisco. The deposits disclosed are for June 30 of the prior year. The FDIC does not publish its annual update until late June. (C) Source: King County Assessor's Office. See Table 5 for further assessed value information. City of Federal Way / 95 PRINCIPAL TAXPAYERS December 31, 1992 1990 Assessed Taxpayer Type of Business Valuation Sea Tao Mall Associates U.S. West Weyerhaeuser Real Estate Co. Puget Power and Light Cushman & Wakefield Quadrant Corporation Flanagan-Bal/Century Square Center Inter Co-op USA/Manpower Virginia Mason Clinic Costco Shopping Center Communications/Telephone Real Estate Power Utility Real Estate Management Real Estate Management Shopping Center Temporary Services Medical Services Food/Merchandise PRINCIPAL EMPLOYERS December 31, 1992 $ 44,022,843 35,604,774 34,570,385 29,124,573 18,570,300 12,125,691 12,069,760 10,458,000 9,903,054 8,759,159 $ 215,208,539 Number of Taxpayer Type of Business Employees Federal Way School District Education 2,045 Weyerhaeuser Company Lumber Products 1,775 St. Francis Hospital Medical Services 550 U.S. Postal Bulk Mail Center Postal Service 550 Safeway Stores Retail Grocery 300 Sears, Roebuck & Company Retail 260 Manpower Temporary Services 250 Fred Meyer Retail 250 Costco Retail 250 Albertsons Stores Retail Grocery 225 (A) 1990 assessed valuations for taxes collected in 1991. Total 1990 assessed valuation for the City is $3,101,693,059. Information for taxes collected in 1992 was not available. Source: King County Assessor - Principal Taxpayers. Federal Way Chamber of Commerce - Principal Employers Table 13 (A) Percentage of Total Assessed Valuation 1.42% 1.15% 1.11% 0.94% 0.60% 0.39% 0.39% 0.34% 0.32% 0.28% 6.94% NAME OF COMPANY ITT Hartford The Fidelity and Deposit Company of Maryland The Fidelity and Deposit Company of Maryland ITT Hartford ITT Hartford The Fidelity and Deposit Company of Maryland ITT Hartford ITT Hartford SCHEDULE OF INSURANCE IN FORCE Table 14 December 31, 1992 ANNUAL POLICY NUMBER POLICY PERIOD DETAILS OF COVERAGE LIABILITY LIMITS PREMIUM WPO39904614000047 1/31/92 Public Officials Per claim - $2,OOO,000 $ 16,000 to Liability Coverage In aggregate - $2,000,000 1 /30/93 Deductible - $5,000 30269606 4/2/92 Public Official Bond Coverage Limit - $250,000 $ 1,250 to Finance Director 4/1/93 30269607 4/16/92 Public Official Bond Coverage Limit - $250,000 $ 1,250 to City Manager 4/15/93 WPO41904614000047 1/31/92 General Liability Per claim - $2,OOO,D00 $ 46,089 to Coverage Deductible - $5,000 1 /30/93 WP0269D4614000047 1/31/92 Municipal Property Buildings - $3,964,000 $ 4,722 to Coverage Extra expense - $2D0,000 1 /30/93 Misc property - $70,276 Valuable papers - $100,000 Deductible on each - $250 Media / Data - $25,000 Computers - $136,593 30268610 & 9/28/92 Public Employee Coverage Limit - $250,000 $ 1,003 30269608 to Dishonesty Coverage Deductible - $ 2,500 9/27/93 (Council Included) WPO269046640000 1/31/92 Auto Liability Per claim - $2,000,000 $ 17,096 to Collision - $1,000 1 /30/93 Comprehensive deductible - $250 52PSSQK8459 1/31/92 Excess Policy Per claim / Aggregate - $ 23,582 to $5,000,000 1 /30/93 page 1 of 2 NAME OF COMPANY ITT Hartford rTT Hartford SCHEDULE OF INSURANCE IN FORCE December 31, 1992 POLICY NUMBER POLICY PERIOD DETAILS OF COVERAGE BMI-CL-892704902 1/31/92 Boiler & Machinery to 1 /30/93 52WEQA0142 1/31/92 Employer Liability to Stop gap 1 /30/93 The Fidelity and Deposit 30381839 11/1/92 Public Official Bond Company of Maryland to City Clerk 10/31 /93 The Fidelity and Deposit 30382079 11/27/92 Public Official Bond Company of Maryland to Chief of Police 11 /26/93 TOTAL COST * Law Enforcement $2,000,000 / Occurence, $2,000,000 / Aggregate, $5,000 deductible is an endorsement of General Liability Coverage. Table 14 (continued) ANNUAL LIABILITY LIMITS PREMIUM Per accident - $350,000 Deductible - $1,000-$2,500 $ 1,012 Coverage Limit - $1,000,000 $ 42 Coverage Limit - $50,000 $ 175 Coverage Limit - $50,000 $ 250 $ 112,471 page 2 of 2 9 98 / City of Federal Way SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS Table 15 December31, 1992 LEGISLATIVE BODY POSITION EMPLOYEE ANNUAL SALARY MAYOR ROBERT STEAD $ 10,800 COUNCILMEMBERS MARY GATES $ 9,000 RONALD GINTZ $ 9,000 JOEL MARKS $ 4,800 MAHLON PRIEST $ 9,000 LYNN TEMPLETON $ 9,000 RAYMOND TOMLINSON $ 9,000 ADMINISTRATIVE STAFF POSITION EMPLOYEE ANNUAL SALARY CITY MANAGER J. BRENT MC FALL $ 87,360 ASSISTANT CITY MANAGER/ PERSONNEL DIRECTOR STEVE ANDERSON $ 54,912 - 82,368 ASSISTANT CITY MANAGER/ COMMUNITY DEVELOPMENT DIRECTOR KEN NYBERG $ 54,912 - 82,368 CITY ATTORNEY CAROLYN LAKE $ 54,912 - 82,368 CITY CLERK MAUREEN SWANEY $ 41,916 - 53,040 FINANCE DIRECTOR DEBORAH LARSON $ 54,912 - 82,368 PARKS, RECREATION & HUMAN SERVICES DIRECTOR ERIK J STEVENS _$ 54,912-_82,_368 PUBLIC WORKS DIRECTOR PHILIP KEIGHTLEY $ 54,912 - 82,368 NOTE: In accordance with State of Washington legal statutes, individual fidelity coverage of not less than $100,000 exists for both the City Manager and Finance Director. City of Federal Way / 99 MISCELLANEOUS STATISTICAL INFORMATION Table 16 December 31, 1992 TYPE OF GOVERNMENT Council - City Manager ORGANIZATION STRUCTURE Legislative Executive Mayor 1 City Manager 6 Councilmembers 2 Assistant City Managers CORPORATE INFORMATION Administrative 4 Organization Directors/City Officials The City of Federal Way is a noncharter optional code City. It was incorporated as an optional code city on February 28, 1990, and will be 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 to it the powers of all four city classifications which exist in Washington law. LOCATION AND AREA Federal Way, the sixth largest city in the State of Washington, encompasses an area of 19.9 square miles. It is located in south King County approximately 25 miles south of downtown Seattle and 8 miles north of downtown Tacoma. The community is residential and commercial, with the populace employed locally and in neighboring cities such as SeaTac, Kent, Tacoma, Bellevue, Seattle. The City has approximately 29,726 housing units. It is 6 miles from the Port of Tacoma and 9 miles south of SeaTac International Airport. The City is served by Interstate 5 and state highways 99 and 509. Frequent Metro public bus service is available to both Seattle and Tacoma throughout Federal Way. Three express park -and -ride lots are provided. POPULATION, REGISTERED VOTERS AND EMPLOYMENT WITHIN CITY LIMITS The population of Federal Way is presently 72,350, of which 37,038 are registered voters. A total of 21,885 (est.) people are employed within the City limits. NUMBER OF CITY EMPLOYEES On December 31, 1992, the City employed 117 full time salaried and 2 part-time hourly employees. There were no commissioned police officers or uniformed firefighters. No unions represented City employees during 1992. 100 / City of Federal Way MISCELLANEOUS STATISTICAL INFORMATION December 31, 1992 (continued) RECREATIONAL FACILITIES 15 Developed park sites covering 220 acres. 7 Undeveloped park sites covering 238 acres. 20 Public courts, eight which are owned by the City and 2 are lighted. 1 Recreation facility. 2 Public swimming pools, both which are owned by King County. 2 Trails including one undeveloped (2.5 miles) and 1 developed (1.2 miles). 15 Open space/greenbelts covering 161 acres. OTHER CITY -OWNED FACILITIES 1 Park maintenance facility. 1 5 acre undeveloped site. PUBLIC EDUCATION 1990 1991 1992 20 Elementary schools with enrollment of ............. 10,528 10,957 11,138 5 Middle schools with enrollment of ................ 3,951 4,153 4,382 3 High schools with enrollment of ................. 3,371 3,417 3,718 3 Alternative schools with enrollment of .............. 317 300 250 TOTAL ENROLLMENT ..................... 18,167 18,827 19,488 1,005 Certified teachers. 62 Certified administrative staff. 868 Full-time college faculty and administrative staff classified employees. 9 Part-time college faculty and administrative staff classified administrators. MILES OF STREETS, ETC. Streets (Center Line Miles) 242 miles SIGNALS/STREET LIGHTS City owned traffic signals maintained by Department of Transportation ............................ 18 City owned traffic signals maintained by King County .............. 17 Street lights owned by City of Federal Way .................... 128 Street lights owned by Puget Power 653 City of Federal Way 1101 MISCELLANEOUS STATISTICAL INFORMATION December 31, 1992 (continued) LOCAL TAXES ON BUSINESS Franchise Tax - Cable TV .......................... 5.00 % Gambling .................................... 10.00 % Local Sales Tax .............. 1.00 % (Collected by the State) POLICE INFORMATION Offenses: 1990 1991 1992 Rape ....................... , .......... 72 96 109 Robbery ................................ 99 127 134 Homicide ............................... 4 1 6 Assault ................................. 134 186 219 Auto Theft .............................. 496 535 603 Burglary ................................ 905 883 906 Larceny ................................ 3,383 3,890 3,840 Citations: Traffic .................... ............. 7,849 10,862 13,159 Judicial System: Handled by District Court 5,681 9,276 12,311 Jail Facility: King County Jail used at $43.49 per day per person, plus $76.61 booking fee per person. Misdemeanor maintenance and bookings in 1992 were 4,209 and 895, respectively. FIRE AND MEDIC 1 INFORMATION 1990 1991 1992 Fire Responses: ........................... 1,757 1,723 1,796 Emergency Medical: ........................ 4,441 4,807 4,956 (Fire and Medic I information reflects the greater Federal Way area, which is served by Fire District #39.) 102 / City of Federal Way MISCELLANEOUS STATISTICAL INFORMATION December 31, 1992 (continued) BUILDING RELATED PERMITS AND VALUES 1990 1991 1992 Building permits ........................... 582 536 575 Estimated Value (In Millions $) .................. $54.7 $35.9 $52.9 Other Building Related Permits .................. 1,164 1,058 1,250 Estimated Value (In Millions $) .................. $1.2 $8.3 $7.9 TAXABLE SALES (in Millions $) 1990 1991 1992 Retail Sales .............................. $538.8 $770.1 $812.5 Real Estate Sales .......................... $317.8 $270.5 $291.6