2009 Annual Comprehensive Financial Report (09-003)cl')O&A
City of Federal, Way,
WASHINGTON
2009
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR YEAR ENDED DECEMBER 31, 2009
PREPARED BY:
The Finance Department
PERMANENT RECORD
DO NOT DESTROY
GS50-03D-02, Rev. 1 (CAFR)
City of Federal Way History -
The earliest recorded accounts of the Federal Way area tell of Native American families who resided in the area of
the Muckleshoot Reservation on the east side of the Green River Valley and traveled west to the shores of Puget
Sound for the plentiful fisheries resources. Generations of Muckleshoot Indians wore a westward trail across the
heavily forested plateau to the area which is now Saltwater State Park. The arrival of the white man in the nineteenth
century resulted in a steady decline in the Indian population and by 1890, nearly the entire population had
disappeared from the area. Isolated on a triangular shaped plateau rising steeply from Puget Sound, the Federal Way
area had little waterfront access or roadways and accordingly, was sparingly developed compared to Tacoma and
Seattle. As late as the turn of the century, the original settlers at Dash Point and Dumas Bay had to row to Tacoma
for supplies and mail. Old Military Road, constructed around 1856 and extending north from Fort Steilacoom, past
Star Lake to Seattle and Fort Lawton, was the first road through the area.
Over time, narrow dirt roads were added to provide east/west access and by 1900, a road was constructed between
Star Lake and Redondo. The second crossroad, the "Seattle Road," connected old Military Road and Kent. The
Seattle -Tacoma Interurban Line, completed in 1901, provided a fast and easy way to reach these urban cities.
Improved access brought many visitors to the area and Star Lake became a popular summer recreation site.
By the 1920s, Federal Highway 99, the interstate that linked the western states from north to south, was complete.
At this time, Federal Way was still primarily forest and farmland. Fred Hoyt had a cabin on Dumas Bay and started
a road to Tacoma (still called Hoyt Road). The timber companies, which had a major logging operation going, built
an early railroad line and were instrumental in getting Marine View Highway (now Dash Point Road) built in the
early 1920s. This roadway spurred development along the coastline. Soon thereafter, Peasley Canyon Road was
built to connect Military Road with the Auburn Valley. This road later became known as South 320th Street. In
these early days, roadways set the stage for development in the area and they still play an important role in the City
today.
By the start of World War II, a number of small, thriving communities made up the area that is now Federal Way.
Some communities were clustered around lakes, such as Steel Lake, Star Lake, and Lake Geneva. Others were sited
to take advantage of the view of Puget Sound, like Adelaide and Buenna. As each of these communities grew,
residents built small schoolhouses for their children. By the late 1940s, King County consolidated the many
individual red schoolhouses into the Federal Way School District, from which the City gets its name. During this
same period, a library was built along the edge of Highway 99, and between 308'h Street and 320th Street, a small
"downtown" developed with a general store, lumber yard, realty office, beauty parlor, feed store, and gas station. By
the end of the 1950s, the ten blocks between 308th and 320th Streets became the first roadside commercial district.
One of the more unique developments was Santa Faire, a family oriented theme park. New shopping areas were
added around the park, helping to create a "community focus" for the residents of the area.
As this commercial area developed, the rest of Federal Way was changing as well. The Boeing Company expanded
their operations in Renton and the Kent Valley and began advertising nationally for engineers. Those engineers in
turn began roaming the wooded acreage in Federal Way in search of housing. One of the earliest residential
developments was Marine Hills, built in 1958 overlooking Puget Sound. Weyerhaeuser, one of the early timber
companies, had large land holdings in the area and began to develop their land into high quality housing with
amenities like golf courses.
Weyerhaeuser's development company also began developing commercial property, creating the West Campus
business park. The plan was to integrate offices and businesses with lush landscaping. Though initially the corporate
office market was not strong, West Campus has grown almost to capacity, providing space for many civic buildings
such as City Hall, the police station, the area's major health care centers, and higher density housing.
Another major landmark in the area is SeaTac Mall, built in the mid-1970s on what was farmland south of 320th
Street. The Mall is one of the largest in South King County and is the anchor for retail development in the area. The
Mall was a result of population growth in the region and its location was determined by the 320th Street intersection
with Interstate 5. The In�erstate supplanted Highway 99 as the main artery for commuter traffic in the County.
By the mid 1980s, South King County was growing quickly. Retail growth occurred along Highway 99, especially
at the 320th Street intersection. Roads and office space were developed to accommodate the increased growth.
Residential growth was also prominent, following plans developed by King County, with a large number of
apartment homes. The changes to the community, with increased housing and traffic, created a movement for greater
self-determination. In 1989, the citizens of this area voted for incorporation and the City of Federal Way was born,
incorporating on February 28, 1990.
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2009
Table of Contents
INTRODUCTORY SECTION
Page
Letterof Transmittal..................................................... .................... ....._.................................. iii
City Officials and Administrative Officers .... ................ ........................... ..... ................. ....... ................ 1
CityFunctional Organization Chart............................................................................................................ 2
GFOA Certificate of Achievement............................................................................................................. 3
FINANCIAL SECTION
IndependentAuditor's Report....................................................................................................................
Management's Discussion and Analysis.....................................................................................................
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Assets.......................................................................................................... 18
Statementof Activities ................................. .............................. ......................... ........... :........ 19
Fund Financial Statements:
Balance Sheet — Governmental Funds.................................................................................... 20
Statement of Revenues, Expenditures, and Changes in Fund Balances —
GovernmentalFunds......................................................................................................... 22
Reconciliation of the Statement of Revenues, Expenditures, and Change
In Fund Balances of Governmental Funds to the Statement of Activities ._..................... 24
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
GeneralFund................................................................................................................... 25
StreetFund ....... :........... :................................................ .................................................. 26
UtilityTax Fund.............................................................................................. 27
Statement of Net Assets — Proprietary Funds................................................................................... 28
Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary Funds ..... 29
Statement of Cash Flows — Proprietary Funds........................................................................ 30
Notes to the Financial Statements.................................................................................................... 31
Combining and Individual Fund Statements and Schedules — Nonmajor Governmental Funds:
FundDescription............................................................................................................................. 61
CombiningBalance Sheet............................................................................................................... 63
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................ 67
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
ArterialStreet Fund .............................................. ............. .................. .--- --- -- -- ........... 71
Solid Waste & Recycling Fund ........................... ............................. ....----------- ................ 72
Hotel/Motel Lodging Tax Fund........................._._...._...._................................................. 73
Federal Way Community Center Fund ........... :........................................ ........................ 74
TrafficSafety Fund.......................................................................................................... 75
Paths& Trails Fund......................................................................................................... 76
Individual Fund Statements and Schedules — Debt Service Fund:
Fund Description ........................................................ ...._................ 77
.......... ........... ....................._...._
BalanceSheet..........................................................................................................................
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ............ 79
Combining and Individual Fund Statements and Schedules — Internal Service Funds:
FundDescription.............................................................................................................................. 81
Combining Statement of Net Assets.........................................................................................
Combining Statement of Revenues, Expenditures and Changes in Fund Net Assets ...................... 83
Combining Statement of Cash Flows ................................................ :.............................................. 84
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source................................................................................................... 88
Schedule by Function and Activity.................................................................................................. 89
Schedule of Changes by Function and Activity.............................................................................. 90
STATISTICAL SECTION
NetAssets by Component.............................................................................................................I.......
92
Changesin Net Assets .................. ................. ........ .... ..................................................................................
93
Government -wide Revenues by Source and Expenditures by Function ............... :................................
94
Fund Balances, Governmental Funds......................................................................................„............
95
Changes in Fund Balances, Governmental Funds._-. ............................................
96
Taxable Sales by Category .......................................... ..................................
Assessed and Estimated Actual Value of Taxable Property ...................... ..:..... :.....:.... :.......................
98
Property Rates and Levies, Direct and Overlapping Governments........................................................
99
PrincipalTaxpayers........................_.-......,.............................................................................................
100
Property Tax Levies and Collections.....................................................................................................
101
Ratioof Outstanding Debt by Type.......................................................................................................
102
Ratio of General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita.............................................................
103
Computation of Direct and Overlapping Debt.......................................................................................
104
Computation of Limitation of Indebtedness..........................................................................................
105
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures Net of Debt Service Expense ........................
106
DemographicStatistics ............. :.....:...... :....................................... :................................ ......
107
PrincipalEmployers..............................................................................................................................
108
Property Value, Construction and Bank Deposits ....................... „....................................................... .
109
CapitalAssets by Function........................._........................................................................._................
110
Operating Indicators by Function..........................................................................................................
ill
City Government Employees Full -Time Equivalent - History...............................................................
112
Salaries & Surety Bonds of Principal Officials .................................... .............................. „.................
113
Miscellaneous Statistical Information....................................................................................................
114
OF 4A
Federal Way
June 15, 2009
People of the City of Federal Way
Honorable Mayor and City Council
THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF FEDERAL WAY
The Comprehensive Annual Financial Report (CAFR) of the City of Federal Way for the year ended December 31,
2009 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 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 officials. The financial
section includes the basic financial statements, and the combining statements of nonmajor funds, internal service funds,
and schedules of capital assets of governmental funds, as well as the State Auditor's report on the basic financial
statements. The statistical section includes selected financial and demographic information, generally presented on a
multi -year basis.
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, divider pages have been used to separate the various components of
the financial section. Generally Accepted Accounting Principles (GAAP) require that management provide narrative
introduction, overview, and analysis to accompany the basic financial statements in the form of MD&A. This
transmittal letter is designed to compliment the MD&A and should be read in conjunction with it. The City's MD&A
can be found immediately following the Independent Auditor's Report.
REPORTING ENTITY
The City is a noncharter Optional Code City with a Council -Manager form of government. It was incorporated on
February 28, 1990, and is governed under the provisions of the Optional Municipal Code of the Revised Code of
Washington. Optional Code City status increases the City's operating authority by extending it to the powers of all four
city classifications which exist in Washington Law.
The City Council consists of seven council members, all of whom are elected at large by citizens of Federal Way to
serve four-year terms. The City Manager/Police Chief, who serves as the chief executive officer, is responsible for day-
to-day administration of personnel, policies and programs. He is appointed by, reports directly to, and serves at the
pleasure of the City Council.
iH
City services provided include: police protection, construction and maintenance of streets, building inspection,
municipal court services, jail services, planning and zoning, park services, emergency management services, surface
water management and general administration, including finance. Services for a land use hearing examiner are
contracted. The City continues to have nine major departments consisting of City Manager; Law; Finance; Human
Resources; Information Technology; Municipal Court, Parks & Public Works; Police; and Community Development.
Fire protection and emergency medical services are provided by South King Fire & Rescue. Parks and Public Works
became one department in mid 2009. The Lakehaven Utility 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 FACTORS AFFECTING FINANCIAL CONDITION
Domestic and global financial markets remain severely depressed but are beginning to show signs of stabilization. King
County lagged the nation falling into recession but was not spared the severity. Still subdued consumer demand follows
historic declines in asset and real property values and local employment.
A massive federal intervention into the economy appears to have boosted confidence of investors and businesses.
Guarded lending to consumers, businesses, and among banks has resumed but at lower levels. The two-year old housing
market crisis appears to be nearing an end as home prices begin to rebound but concern is heightened about the
commercial real estate market, as the deep recession has crippled some businesses' ability to meet financial obligations.
Seattle -based Washington Mutual is one such example and is the largest bank to have ever collapsed.
The nation entered one of the most severe recessions on record in December 2007. This recession has been
characterized by turmoil in the value of assets, fear among consumers and lenders, and record breaking declines in
employment. By late 2006, King County employment had only just returned to levels achieved prior to the previous
national recession, which ended in November 2001. Locally, employment peaked in June 2008, lagging the nation as a
whole by seven months, and began a gradual decline. Large job losses in late 2008 and early 2009 pulled the region into
the recession that the rest of the country was already enduring, and resulted in an unemployment rate double that of a
year prior (8.5 percent versus 4.1 percent). Local employment growth experienced over the previous five years has been
completely reversed. The previous peak annual unemployment experienced in King County was 6.2 percent in 2003, the
highest rate seen since 1986.
The decline in the rate of unemployment through 2007 was driven less by job growth than by the relative decline in the
total labor force — the proportion of the population seeking or holding jobs. The labor force participation rate during
2004-2007 was a full percentage point lower than in 2000. Recent increases in the unemployment rate have been muted
by a further decline in the labor force participation rate. In November 2008, labor force participation fell to 65.8 percent,
falling again to F.0 S percent in January 2MO where it remains. Thiss is the !owes,, level ; 21n . ,. T .,1,,.,- .-....a.,....
........b .,g.........,...� t. e......... ... ...........y �.....� v...vJ.., .v ..,,........,. .�..0 au ui�. !owes,, .�.v�.a iu v`v'ei c,v yCaro. i auui uiai n�.i�
continue to contract. Over the previous 12 months, an average of 486,000 jobs have been lost each month.
After rising by over 3.6 percent in both 2000 and 2001, growth in the Puget Sound region Consumer Price Index was
just 1.9 percent and 1.7 percent in 2002 and 2003, respectively, driven by unchanged housing costs. In the first half of
2005, however, the CPI was up more than 2.4 percent, before rising another 2.6 percent in the third quarter alone due to
the aftermath of Hurricanes Katrina and Rita. Even so, the CPI spike resulting from these hurricanes falls short of the
2.9 percent growth experienced in the second quarter of 2008, following a run up in energy and food prices. For the first
six months of 2008, the CPI grew at the fastest rate experienced since 1982. Surges in energy prices have begun to
impact broader prices, although subsequent price movements reinforce the sector's volatility. Local prices remain
dependent on global energy prices, as well as movement in agricultural goods, but core inflation — excluding energy and
food — in the Puget Sound region should return to relatively low levels for the next two to three years, in part as a result
of temporarily ebbing pressure from housing costs
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ECONOMIC TRENDS
Federal Way is the eighth largest city in Washington State with a population of 88,578 as of April 1, 2009. The City is
located on a plateau adjacent to Puget Sound in King County, eight miles north of downtown Tacoma and 25 miles
south of downtown Seattle. The City occupies approximately 22.5 square miles and is served by Interstate 5 and state
highways 99 and 509.
In 2009 there were 35,329 housing units in Federal Way, an increase of approximately less than 1% over 2008. Of
these units, 56% were single family homes, 40% multi -family units, and 4% mobile homes and trailers.
The community is residential and commercial, with the populace employed locally and in the neighboring cities such as
SeaTac, Kent, Tacoma, Bellevue, and Seattle. Employment in Federal Way is highly concentrated in retail and services
sectors which respond primarily to the needs of the local market area population. The employment figure for 2009 is
estimated at 29,227. Major employers are; Weyerhaeuser, World Vision, St. Francis Community Hospital, U.S. Postal
Bulk Mail Center, Wild Waves Theme Park, and Livebridge Incorporated.
Sales tax collected in 2009 total $10.6 million, and is below 2008 by $1.6 million. The retail sector of the local
economy is anchored by two areas; the first is South 348th and Pacific Highway 99 including Wal-Mart Super Center,
Wholesale Sports, Costco, Lowe's Home Improvement Center, and Home Depot. The second is The Commons
regional mall including Target, TJ Max, Best Buy, and many other small businesses adjacent to the area. According to
a listing of businesses registered with the City of Federal Way and sorted by the Standard Industrial Classification, the
business economy appears to be configured as follows: retail trade 55%; services 22%; construction 8%; wholesale
trade 4%; information 5%, manufacturing 2%, and other 6%.
In 2009, new improvements to real estate totaled $84.8 million or approximately 0.1% of the City's 2009 assessed
valuation. The total assessed value of taxable property in Federal Way was $8.6 billion, which is approximately 12.7%
lower than the 2008 assessed valuation of $9.8 billion. Real Estate sales decreased 49.4% to approximately $271
million in 2009 as compared to $536 million in 2008. A total of 483 building permits and 2,209 other building related
permits were issued in 2009. Estimated valuation was $79.2 million and $5.6 million respectively. Significant building
permits include: Wild Waves Cabanas, Midway Game Shelter and Hooks Lagoon Pool, Steel Lake Maintenance Shed,
Cottages West Housing, Campus Grove/Arcadia Townhomes, Discount Tire, Federal Way Community Center Kinetic
Art Relocation, Chase Bank at Federal Way Marketplace and SeaTac Village, Wendy's, and Pain Center of Western
Washington.
LONG-TERM PLANNING
The City's fiscal policy requires the City to prepare long-range projections for six years beyond the current budget
period. The projection extends current operations to the future to see if the services are sustainable and the magnitude
of, if any, future financing gaps. This glimpse into the future allows the City to proactively plan and implement
corrective measures over time to avoid sudden drastic changes in service levels or in revenue/tax policies. In addition,
the City's fiscal policy requires the City to balance its ongoing services with ongoing revenues.
MAJOR INITIATIVES AND ACCOMPLISHMENTS
During late 2008 to early 2009 — the City of Federal Way joined 6 other South King County cities to form the South
Correctional Entity Public Development Authority (SCORE) to house misdemeanant inmates. King County had
notified cities in 2000 that they will not longer house these inmates after 2012. The site for the jail facility is located at
20817 17th Ave South in Des Moines, Washington. The Jail facility is estimated to be built by late 2011.
The Police Department implemented an automated license plate reader in 2009 which allowed Federal Way police to
run more than 35,000 license plates, leading to the recovery of six stolen vehicles and one stolen gun. The department
also created a new Special Operations Unit to cover the downtown and Federal Way Transit Center which was planned
in 2009 and implemented in early 2010.
V
SafeCities has been up and running since 2008. This program was implemented in downtown with new signs, cameras
operational, officers' trained and active on equipment has already showed results in 2009. Crime reduction was noted
across a variety of sectors in 2009.
In addition to public safety, economic development in Federal Way has been flourishing during these economic hard
times. Economic development in Federal Way included the Hampton Inn which is under construction, the Korean
Women's Association mixed -use low-income senior housing project, state funding for Federal Way Village, and
increased potential for foreign investment through programs such as green card deal for investors who spend at least $1
million in Federal Way.
The City has also secured fundings for first-time buyers to negotiate on foreclosed homes in the amount of $641
thousand, $12 million in grant funding for three major transportation projects: S. 320'h and 1-5 off -ramps, S. 3481h and
First, and Phase 4 of SR 99 HOV Project, used CDBG capital funds to partner with non -project agency to help with
energy -saving retrofits to approximately 300 residential homes and businesses, renegotiated the Waste management
contract for garbage and recycling services including a very low rate increase with increased commercial recycling
options/incentives and the City continuing have some of the lowest garbage and recycling rates in the region
Federal Way Community Center which opened in early 2007 had implemented improvements to attract more
participants which include but not limited to opening of the Splash Cafe, pool retrofit, full-scale marketing efforts
including new logo, website, brochures and advertising/marketing plan.
OUTLOOK FOR THE FUTURE
At the January 2010 planning retreat, Council identified the following set of goals for the City.
1) To establish a City Council training/involvement program that includes working with AWC, attending AWC
conferences, working with National League of Cities, testifying on bills before the legislature etc.
2) To keep current lobbying efforts going at the state and federal level in an attempt to obtain more funds for the
city.
3) To build two community gardens in the city.
4) To create community partnerships to establish community events such as the summer parade and the MLK
event.
5) Explore the development of a Seniors Commission.
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.
Budgetary Control
The City maintains budgetary controls in accordance with the Revised Code of Washington (RCW 35A.33). The
objectives of these budgetary controls are to ensure compliance with legal provisions embodied in the annual
appropriated budget approved by the City Council. Activities of the General Fund, some Special Revenue Funds, and
Debt Service Fund are included in the annual appropriated budget. The level of budgetary control at which
expenditures cannot legally exceed the appropriated amount is established at the individual fund level. The project -
length based Special Revenue Funds, and the Capital Projects, Enterprise and Internal Service funds are management
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budgets only and therefore these budgets are not represented in the CAFR. The City also maintains an encumbrance
accounting system as one technique of accomplishing budgetary control. All appropriations lapse at year-end.
Basis of Accounting
All governmental 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 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.
Cash Management
The City began investing outside the State Investment Pool in November 1994. Based on an adopted investment policy
the City operates a conservative cash management program, investing surplus cash as determined by anticipated cash
flow needs. Investment decisions are based on established investment policies in compliance with Washington State
statutes, with consideration given first to safety, secondly to liquidity, and lastly to yield. The City had $1 million
invested in US Government Agency Securities which matured April 30, 2009. The City's portfolio at December 31,
2009 consisted entirely of investments in the Local Government Investment Pool, with immediate maturities.
The Washington State Treasurer manages a State Investment Pool for use by any city, county, town, municipal
corporation, or special taxing district within the state. Municipalities determine the amount and length of investment in
the pool based on individual cash flow needs. Interest is earned on the pool's actual experience for the month, less an
administrative fee equivalent to 3'/z basis points (.035%). At December 31, 2009, the City had $58.9 million invested in
the State Investment Pool. In 2009, the average monthly earnings rate for the entire portfolio was approximately 0.78%
as compared to the average monthly earnings rate for the State Investment Pool of 0.70%.
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 2008, the City purchased commercial
insurance policies from commercial insurers. 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.
Independent Audit
State law requires an annual audit of all City books of account, financial records, and transactions by the State Auditor,
an independently elected state official. In addition to meeting the requirements set forth under state law, the audit was
also designed to meet the requirements of the federal Single Audit Act of 1984 and related OMB Circular A-133. The
2009 audit of the City has been completed in conformance with generally accepted auditing standards. The financial
statements of all City funds have been included in this audit. The City has been given an unqualified opinion for 2009;
which is the 16t' consecutive year receiving a clean audit. The State Auditor's report on the basic financial statements is
included in the financial section of this report.
vii
AWARDS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Federal Way for its comprehensive annual financial
report (CAFR) for the year ended December 31, 2008. The City of Federal Way has received a Certificate of
Achievement for the last nineteen years (fiscal years ended 1990 — 2008). In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial
report. This report must satisfy both generally accepted accounting principals and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual
financial report continues to meet Certificate of Achievement Program's requirements, and we are submitting it to the
GFOA to determine its eligibility for another certificate.
The City of Federal Way also received the Government Finance Officers Association Distinguished Budget
Presentation Award for its biennial budget for the years beginning January 1, 2009 and 2010. In order to receive this
award, a governmental unit must publish a budget document that meets program criteria as a policy document, a
financial plan, an operations guide, and a communications medium.
ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the efficient and dedicated services of the entire
staff of the finance division, in particular Phung Huynh (Lead Financial Analyst), Heidi Hudson (Accounting
Supervisor), and Chase Donnelly (Financial Analyst). In addition, staff in all City departments should be recognized for
responding so positively to the requests for detailed information which accompany each 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,
'rho Kraus
Finance Director
Viii
Citv o f Federal Way / I
CITY OFFICIALS
JACK DOVEY ERIC FAISON
Mayor Deputy Mayor
DINI DUCLOS
Council member
JIM FERRELL
Council member
JEANNE BURBIDGE
Council member
LINDA KOCHMAR
Council member
BRIAN WILSON
City Manager/Police Chief
OTHER ADMINISTRATIVE OFFICERS
MICHAEL PARK
Council member
AssistantPolice Chief......................................................................................................................................Andy Hwang
City Attorney..........,....................................:................................................ ....... .. Patricia Richardson
Community Development Director.................................................................................................................. Greg Fewins
Economic Development Director...,.....,....,..,.:............................................................................................._. Patrick Doherty
FinanceDirector...................................:.................................:...........:..............................................................Tho Kraus
Financial Services Administrator....................................................................... .......Bryant Enge
Human Resources Director ... :.............................. ::................................ ................. .... Mary McDougal
............... ..................
Information Technology Director......................................................................................................................Mehdi Sadri
Parks, Recreation and Cultural Services Director/Public Works Director.............................................................Cary Roe
INFORMATION SYSTEMS
• DP/Computer Technology
• Institution Tech. (I -Net)
• GIS Services
• Telecommunications
• Staff Services and Training
CITY OF FEDERAL WAY ORGANIZATION CHART
CITIZENS OF FEDERAL WAY MUNICIPAL COURT
MAYOR/CITY COUNCIL
• Represent the People of Federal Way
• Adopt Ordinances and Resolutions
• Grant Franchises
Levy Taxes and Appropriate Funds
■ Establish Policy Guidelines
CITY MANAGER/POLICE CHIEF
■ Administer City-wide Operations and Budget
■ Implementation of Council Policy
■ Duection/Coordination City-wide
■ Misdemeanors and Gross
Misdemeanors
• Traffic & Non -traffic Infractions
■ Probation Services
• Crime Analysis and Prevention
' Traffic Safety Education and
Enforcement
■ Investigation
' Patrol
■ Emergency Comms.
■ Community Safety and Education
Programs
COMMUNITY
HUMAN RESOURCES
FINANCE
LAW
PARKS/PUBLIC
DEVELOPMENT
WORKS
■ Recruitment
■ Accounting
' Civil Legal Services and
• Economic Development
■ Training
* Budgeting
Litigation
R FW Community Center
* Land Use Mgmt
■ Benefits Administration
■ Financial Planning
' Legislative Support
■ Recreation and Athletic
• Permit Process
■ Employee Safety
_
Financial Reporting
■Prosecution
Programs
• Legislation
*
■ Employee Wellness
■ Cash Mgmt
■ Provide legal Counsel
R Park Maintenance, Operation
p
and Development
Bldg Permits & Inspections
■ Code Compliance
• Civil Service
■ Payroll
y
■ Draft Contracts and
� Community Arts and Events
■ Human Services
' City Clerk
• Audit Coordination
■
Ordinances
Negotiate Contracts and Real
■ Public Facilit M mt and
y g
■ Community Dev. Block
Business Licensing'
Estate Transaction
Development
Grant
•Purchasing
■ Dumas Bay Centre and
* Neighborhood Development
Knutzen Family Theatre
■ Volunteer Program
Operations and Mgmt.
■ Development Services
Permitting
Inspections
Legislation
• Maintenance and Operations
Public Right -of -Way
Traffic Systems Mgmt
Surface Water Mgmt
■ Solid Waste and Recycling
' Emergency Mgmt Program
Coordination
'r General Fleet Maintenance
ti
City o f federal Way / 3
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Federal Way
Washington
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2008
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.
W mti°stA
CU��RAMR �
a� sir. �y
President
Executive Director
City of Federal Way / 4
CITY Of
Federal Way
It's all within reach
THIS PAGE IS LEFT' INTENTIONALLY BLANK
City o Federal Way / 5
INDEPENDENT AUDITOR'S REPORT
June 15, 2010
Mayor and City Council
City of Federal Way
Federal Way, Washington
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the
City of Federal Way, King County, Washington, as of and for the year ended December 31,
2009 which collectively comprise the City's basic financial statements as listed in the table of
contents. These financial statements are the responsibility of the City's management. Our
responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City of Federal Way, King
County, Washington, as of December 31,2009, and the respective changes in financial position
and, where applicable, cash flows thereof, and the respective budgetary comparison for the
General, Street, and Utility Tax funds, for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we will also issue our report dated June
15, 2010, on our consideration of the City's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. That report will be issued under separate cover in the City's
CityofFederal Wav/6
Single Audit Report. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on the internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
The management's discussion and analysis on pages 7 through 16 is not a required part of the
basic financial statements but is supplementary information required by the Governmental
Accounting Standards Board. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation
of the required supplementary information. However, we did not audit the information and
express no opinion on it.
Our audit was performed for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying information listed
as combining and individual fund statements and schedules on pages 61 through 90 is
presented for purposes of additional analysis and is not a required part of the basic financial
statements. This information has been subjected to auditing procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
The information identified in the table of contents as the Introductory Section and the Statistical
Section is presented for purposes of additional analysis and is not a required part of the basic
financial statements of the City. Such information has not been subjected to the auditing
procedures applied in the audit of the basic financial statements and, accordingly, we express
no opinion on it.
Sincerely,
BRIAN SONNTAG, CGFM
STATE AUDITOR
City o Federal W / 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the City of Federal Way's annual financial report provides a narrative overview of the City's financial
activities for the fiscal year ended December 31, 2009. This information should be read in conjunction with the
preceding letter of transmittal, the financial statements and notes to the financial statements that follow.
FINANCIAL HIGHLIGHTS
• The total assets of the City of Federal Way exceeded its liabilities at December 31, 2009 by $570.2 million. Capital
Assets (net of depreciation and related debt) account for 87% of this amount with a value of $493.3 million. Of the
remaining net assets, $49.4 million or 9% may be used to meet the government's ongoing obligations to citizens and
creditors, without legal restriction.
• The City's total net assets increased by $4.8 million, or 1% in 2009. Governmental activities provided $4.7 million
or 98% with the remainder being provided by the business -type activities.
• Governmental fund balances at year-end were $40.3 million, a 3% decrease over the prior year. Of this amount, a
total of $35.4 million, or 88% of the governmental fund balance is unreserved and available to fund ongoing
activities. The remaining $4.8 million is earmarked for debt service, paths & trails reserve, hotel/motel lodging tax,
police special funds, petty cash/change funds, court trust fund, and advance travel.
• Unreserved fund balance in the general fund was $8.1 million, an increase of $2.6 million or 48% from the prior
year.
• The City debt decreased by $4.9 million during the current fiscal year. General obligation debt decreased by $4.7
million while public works trust fund loan decreased by $191 thousand. The decreases reflect the annual debt
service payments and compensated absences.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City of Federal Way's basic financial
statements. The basic financial statements are comprised of three components:
1) government -wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.
In addition to the required components, the City's annual report also includes other supplementary information. The
first set of supplementary information is the Combining Statements. These provide Balance Sheets, Statement of
Revenues, Expenditures, and Changes in Fund Balances with Budget to Actual Comparisons, Statement of Net Assets,
and Cash Flows for all Non -Major Funds. The other set of supplementary information is the Statistical Section. This
section provides a four to ten-year view of the City's revenues, expenditures, debt obligations and capacity, the City's
largest taxpayers, and those entities with the largest employment within the City of Federal Way. This section provides a
long-term perspective on the City's economy.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the City of Federal
Way's finances, in a manner similar to a private -sector business.
The statement of net assets presents information on all of the City of Federal Way's assets and liabilities, with the
difference between the two reported as net assets. This statement serves a purpose similar to that of a balance sheet in
private business. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial
position of the City is improving or deteriorating
City o f Federal Way / 8
The statement of activities presents information showing how the City's net assets changed during the most recent fiscal
year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless
of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that
will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the City of Federal Way that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to
recover all or a significant portion of their costs through user fees and charges (business -type activities). The
governmental activities of the City of Federal Way include law enforcement and public safety, construction and
maintenance of streets, building inspection, municipal court services, jail services, community planning and development
services, parks and recreation facilities, other community services and general administration. The business -type
activities of the City include surface water management and the control and operation of Dumas Bay Centre, a multi -use
facility that offers business and retreat accommodations, recreation and cultural arts classes and a performing arts
facility.
The City has no separately identified component units included in the government -wide financial statements. The City
has reported its investment in two governmental joint ventures: Valley Communications Center and South Correctional
Entity (SCORE). A description of these joint ventures are found in note 14 of the notes to the financial statements.
The government -wide financial statements can be found immediately following this MD&A.
Fund Financial Statements
The annual financial report includes fund financial statements in addition to the government -wide financial statements.
While the government -wide statements present the City's finances based on the type of activity, general government
versus business -type, the fund financial statements are presented by fund type such as the general funds, special revenue
funds, and proprietary funds. A fund is a specific fiscal and accounting entity with a self -balancing set of accounts used
to account for specific activities or meet certain objectives. Funds are often set up in accordance with special regulations,
restriction or limitations. The City of Federal Way uses funds accounting to ensure and show compliance with finance -
related legal requirements. The City's funds are divided into two categories: governmental funds and proprietary funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions as are reported in governmental activities in
the government -wide financial statements. However, unlike the government -wide financial statements, governmental
fund financial statements focus on near -term inflows and outflows of spendable resources as well as on balances of
spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's
near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful
to compare the information presented for governmental funds with similar information presented for government -wide
financial statements. By doing so, readers may better understand the long-term impact of the government's near -term
financing decisions. Both the expenditures and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City of Federal Way maintains seventeen individual governmental funds. The City's six major governmental funds,
the general fund, street fund, utility tax fund, debt service fund, downtown redevelopment fund, and the transportation
fund, are presented separately in the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures, and changes in fund balances. The remaining governmental funds are combined into a single column
labeled nonmajor governmental funds. Individual fund data for each of the nonmajor governmental funds can be found
in combining statements later on in this report.
The City maintains control over its operating funds through the adoption of the biennial budget. Budgets are adopted at
the fund level and according to state law. A budgetary comparison statement is presented for the General, Street, and
Utility Tax Fund as a basic financial statement.
The basic governmental fund financial statements can be found on pages after the government -wide statements of this
report.
City o Federal Way / 9
Proprietary Funds
The City of Federal Way maintains two types of proprietary funds. Enterprise funds are used to report the same
functions presented as business -type activities in the government -wide statements. The City uses enterprise funds to
account for its surface water management and control and the Dumas Bay Centre. Internal service funds are an
accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses
internal service funds to account for its risk management and self-insurance program, information systems, mail and
duplication services, fleet of vehicles and motorized equipment, and facilities management.
Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail.
The proprietary fund financial statements provide separate information for the Surface Water Management fund and for
the Dumas Bay Centre. The internal service funds are combined into a single, aggregated presentation in the proprietary
fund financial statements. Individual fund data is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found following the governmental fund statements of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to the full understanding of the data provided in the
government -wide and fund financial statements. The notes to the financial statements can be found immediately
following the basic financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents the combining statements
for nonmajor governmental funds, internal service funds, and capital assets of governmental funds.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Statement of Net Assets
The statement of net assets can serve as a useful indicator of the City's financial position. The City of Federal Way's net
assets at December 31, 2009 total $570.2 million. The following is a condensed version of the government -wide
statement of net assets.
The largest component of the City's net assets, 87% or $493.3 million, in its investment in capital assets net any related
outstanding debt issued to acquire those assets. These capital assets such as streets, trails, parks, police vehicles, and
parks equipment are used to provide services to the citizens. Consequently, these assets are not available to sell and
convert to cash for future spending.
CONDENSED STATEMENT OF NET ASSETS
Governmental Activities Business -Type Activities Total
2009 2008 2009 2008 2009 2008
Current and other assets $ 77,184,439 $ 61,519,862 $ 5,585,975 $ 5,504,817 $ 82,770,414 $ 67,024,679
Capital assets and CEP,
net of accumulated depreciation 471,917,351 473,048,373 51,971,043 52,069,343 523,888,394 525,117,716
Total assets 549,101,790 534,568,235 57,557,018 57,574,160 606,658,808 592,142,395
Long-term liabilities 30,719,470 20,657,450 1,471,696 1,638,335 32,191,166 22,295,785
Other liabilities 3,918,567 4,102,776 375,032 327,060 4,293,599 4,429,836
Total liabilities 34,638,037 24,760,226 1,846,728 1,965,395 36,484,765 26,725,621
Net assets:
Invested in capital assets,
net of related debt
442,704,401
456,600,030
50,578,649
50,494,590
493,283,050
507,094,620
Restricted
27,476,530
28,434,066
16,366
42,558
27,492,896
28,476,624
Unrestricted
44,282,822
24,773,913
5,115,275
5,071,617
49,398,097
29,845,530
Total net assets
7 514,463,753 $
509,808,009
$ 55,710,290 $
55,608,765
$ 570,174,043 $
565,416,774
City of Federal Way / 10
Approximately 4% or $22.9 million of the total net assets of the city are earmarked for construction improvement
projects. Some of the major projects include the Annual Transportation System Safety Improvements, S 356th St at
SR99, S 348th St at 1st Ave S, SR99 Phase III, SW Camp Dr - 21st Ave SW, S 352nd St Ext from SR99-SR161, S 320th
St at 1-5 S Ramp, SR99 HOV Lanes PH IV, S 356th/BPA Trail Signal, and Downtown Redevelopment. During the year,
the City funded renovation and improvement of neighborhood parks and open space parks such as Celebration Park,
Saghalie Park, Laurelwood Park, Sacajawea Sports Field, and various playground improvements. The City attempts to
fund capital construction projects on a pay-as-you-go basis, aggressively pursuing transportation grant funding and cost
sharing with developers to construct large projects in the City that impact the transportation system.
The remaining balance of restricted net assets is divided among restrictions for: debt service prefunding $4.2 million;
$45.5 thousand for police special funds, petty cash/change funds and advance travel, $61.2 thousand for Municipal Court
Trust Fund, $201.3 thousand for Hotel/Motel lodging tax, $133.5 thousand for Path and Trails Reserve, and $271.1
thousand for Special Contracts/Studies. The business -type activities portion of $4.9 million may only be spent on surface
water management activities and the remaining $159.1 thousand on improvements to Dumas Bay Centre and Knutzen
Family Theatre. Maintenance of catch basins, pump stations, storm drain flushing, and other capital construction
projects such as West Branch Lakota Creek Restoration are examples of utility activities. Other functions of the City
may access the remaining $44.3 million to meet ongoing obligation to citizens and creditors. Examples of other City
obligations which these net assets may be used for are public safety, parks maintenance, and ongoing street maintenance.
At the end of the fiscal year, the City of Federal Way reported positive balances in all three categories of net assets, for
the government as a whole, as well as for the separate governmental and business -type activities.
Changes in Net Assets
The changes in net assets table illustrates the increases or decreases in net assets of the City resulting from its operating
activities. The City's net assets increased approximately $4.8 million in 2009. The increase was split between the
governmental activities ($4.7 million or 98%) and business -type activities ($101.5 thousand or 2%).
The following is a condensed version of the City's changes in net assets. The table shows the revenues, expenses, and
related changes in net assets in tabular form for the governmental activities separate from the business -type activities.
The graphs that follow compare program revenues to program expenses and illustrate the revenues by source separately
for the governmental and business -type activities.
Governmental activities contributed $4.7 million ui 98% of the total change in net assets of $4.8 million. Key elements
of this increase are as follows:
Total revenues decrease of $6.9 million or 10% from 2008. Attributing factors to the decrease in revenues are as
follows:
■ Sales tax decreased $1.9 million or 13%. Construction and contracting activity for the City of Federal Way
had decreased significantly from 2008; approximately $379 thousand or 30%. This is attributable to the
decrease in building activity starting in early in 2008 and continued into 2009. Another contributing factor
is the decrease in retail sales which accounted for $689 thousand or 11 % decrease and decrease in
wholesaling of $214 thousand or 35% from 2008.
■ Real estate excise tax decreased $1.2 million or 45%. Total real estate transactions valued $208 million
which is $328 million or 61 % decrease from 2008.
■ Other Revenues decrease of $4.5 million or 69%. In 2008, $4.3 million for general governmental land right-
of-way related to infrastructure was capitalized as capital contributions. In 2009, $283 thousand was
capitalized as capital contributions.
Ci o Federal Way / 11
Total expenditures increase of $3.5 million or 7% from 2008. Attributing factors to the increase in expenditures are as
follows:
■ Security of Persons & Property increase of $1.6 million or 6% due to the City's participating in SCORE
(South Correction Entity) in which the City paid one-time related expenses of $934.5 thousand, increase jail
costs of $257.2 thousand, increase in salarylbenefits $1.1 million offset by savings in overtime and other pay
of $378.6 thousand.
■ Transportation increase of $1.6 million or 20%. The increase noted is mainly due to the prior period
adjustment of $2.2 million of infrastructure that was not reported for 2008. If this was included in 2008,
transportation would report a decrease of $612 thousand.
IF Culture and recreation increase of $1.1 million or 16% due to depreciating the Federal Way Community
Center starting in 2009.
CHANGES IN NET ASSETS RESULTING FROM CHANGES IN REVENUES AND EXPENSES
Governmental Activities
Business -Type
Activities
Total
2009
2008
2009
2008
2009
2008
Revenues:
Program revenues:
Charges for services
$ 10,180,139 $
9,923,841
$ 4,183,012
$ 4,473,453
$ 14,363,151 $
14,397,294
Operating grants & contributions
2,172,168
1,538,476
-
-
2,172,168
1,538,476
Capital grants and contributions
8,452,149
8,933,154
8,452,149
8,933,154
General revenues:
Property tax
9,443,649
9,397,456
-
-
9,443,649
9,397,456
Sales tax
12,327,191
14,195,800
--
12,327,191
14,195,800
Utility tax
13,549,472
13,469,136
-
13,549,472
13,469,136
Real estate excise tax
1,428,985
2,590,310
-
1,428,985
2,590,310
Other taxes
1,496,238
1,454,328
-
-
1,496,238
1,454,328
Other
2,045,381
6,502,869
46,736
3,447,458.
2,092,117
9,950,327
Total Revenue
61,095,372
68,005,370
4,229,748
7,920,911
65,325,120
75,926,281
Expenses:
General government
4,591,087
5,606,797
-
-
4,591,087
5,606,797
Security of Persons & Property
26,341,614
24,745,284
-
26,341,614
24,745,284
Transportation
9,448,397
7,891,298
-
-
9,448,397
7,891,298
Physical environment
450,914
370,718
-
--
450,914
370,718
Economic environment
3,560,620
3,382,572
-
-
3,560,620
3,382,572
Health and human services
776,954
705,976
-
-
776,954
705,976
Culture and recreation
8,089,242
6,955,442
-
-
8,089,242
6,955,442
Interest on long-term debt
811,124
901,161
=
-
811,124
901,161
Surface Water Management
-
-
3,345,027
4,060,440
3,345,027
4,060,440
Dumas Bay Center
-
—
984,103
1,045,250
984,103
1,045,250
Total Expenses
54,069,952
50,559,248
4,329,130
5,105,690
58,399,082
55,664,938
Change in net assets before transfers
7,025,420
17,446,122
(99,382)
2,815,221
6,926,038
20,261,343
Transfers
(200,907)
123,518
200,907
12( 3,518)
-
Change in net assets
6,824,513
17,569,640
101,525
2,691,703
6,926,038
20,261,343
Net assets - beginning
509,808,009
495,048,308
55,608,765
51,830,061
565,416,774
546,878,369
Adjustment for retroactive capitalization of infrastructure
under GASB 34 and other adjustments
(2,168,769)
(2,809,940)
-
1,087,001
(2,168,769)
(1,722.939)
Net Assets at beginning of the year, restated
507,639,240
492,238,368
55,608,765
52,917,062
563,248,005
545,155,430
Net assets - ending
$ 514,463,753 $
509,808,009 $
55,710,290 $
55,608,765
$ 570,174,043 $
565,416,774
City of Federal Way / 12
Governmental Activities - Revenues
Other taxes, Other, 4.4% Charges for
3.2% services, Operating
Sales tax, 22.1% grants &
lot
gpcptalgrants
tributions,
26.7% 4.7%
and
Property tax, contributions,
20.5% 18.3%
Security of
Persons &
Property
48.6%
Physical
environment
0.8%
Governmental Activities - Expenditures
General II Interest tan
nm goveren f ung-term. deb t
8.57o 2.3%
Culture and
recreation
15.0%
Health and
human services
1.4%
Transportation
�� •.� 17.5%
Economic
environment
6.6%
Business -type activities of the City's Surface Water Management system and Dumas Bay Centre increased the City's
net assets by $101.5 thousand, accounting for 2% of the total growth in the government's net assets. Surface Water
Management Fund increased by $365.2 thousand which was offset by a decrease in Dumas Bay Centre Fund net assets
by $227.1 thousand. Key elements of the increase are as follows:
Total revenues decrease of $3.7 million or 47% from 2008. Attributing factors to the decrease in revenues are as
follows:
is Other revenue decrease of $3.4 million or 99%. In 2008, $3.4 million for general business -type land right-
of-way related to infrastructure was capitalized as capital contributions. In 2009, $500 was capitalized as
capital contributions.
■ Net transfer out of $201 thousand which consists of $3 thousand transfer in for Surface Water Management
from Internal Service for the purchase of a gas detector. Transfer in of $430 thousand for Dumas Bay was
from General fund for $70 thousand (Dumas Bay Marketing Plan), $128 thousand from Utility for
subsidizing the Knutzen Family Theatre, and $232 thousand for Dumas Bay Center operations. Transfer out
of $232 thousand from Dumas Bay Center to Debt Service for return of unspent capital monies.
Internal service funds consolidation make up the remaining $72 thousand increase.
Rneinaec-Tonne A rtmAinc - Anvnnnne
—Other, 1.1%
Charges for
services,
98.8%
Raciness j mn A nf;vifinc _ 7L'vnn--Iifnnuo
Dumas Bay
Center
23 %
Surface Water
Management
77%
City o Federal Way / 13
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City of Federal Way uses fund accounting to ensure and demonstrate compliance with finance
related legal requirements.
Governmental funds
The focus of the City of Federal Way's governmental funds is to provide information on near -term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In
particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending
at the end of the fiscal year.
As of the end of 2009, the City's governmental funds had a combined ending fund balance of $40.3 million which is a
decrease of $1.2 million from the prior year. Approximately 19% or $7.6 million of this amount constitutes unreserved
General Fund balance, which is available for spending at the City Council's discretion. The remainder of the fund
balance is reserved to indicate that it is not available for new spending because it has already been committed for debt
service payments, capital projects, police special funds and petty cash/change fund/advance travel.
The General Fund is the chief operating fund of the City. Total fund balance increase of $2.7 million or 49% is mainly
due to transfer in of $600 thousand from capital project savings redirected back to the General Fund and an increase of
$2.9 million transfer in from Utility tax for General Fund baseline support. The increase in transfer in is to accumulate
ending fund balance is to set aside to fund the 2010 budget year. The General Fund's main sources of revenues are taxes
which have decreased by $1.8 million or 7%. With the increasing of expenditures and the deteriorating conditions of the
General Fund revenues, increase in transfer in from Utility tax to fund the chief operating fund is crucial.
The Utility Tax fund was established to account for the utility tax receipts which include 6% collected for capital, debt,
and other maintenance & operations as determined by Council and the remaining 1.75% is for Voter Approved enhanced
Police and Community Safety in 2007. Total fund balance decreased $3.3 million or 52% from 2008. The decrease in
the ending balance is due to increase in transfer out to fund General Fund operations and Capital Related Projects.
Overall utility tax revenues decreased $80K or less than 1% and with the increase in transfer out in 2009 this
consequently decreased the Utility Tax fund balance.
The Debt Service Fund has a total fund balance of $4.2 million which is an increase of $2.4 million from 2008. The
increase in fund balance is due to return of unspent Real Estate Excise Tax from capital project savings of $730 thousand
and $820K was redirected from Camp Kilworth back to Debt Service Fund to fund SCORE expenditures in 2010.
The Downtown Redevelopment fund was established to accumulate resources and set aside funding for downtown
projects. Overall decrease in ending fund balance of $3.6 million or 54% is mainly due to paying off the 2006 GO Bonds
for the AMC Theatre Site in the amount of $4.1 million offset by decrease in transfers in of $1.0 million from 2008. The
$1.0 million transfer in 2008 was the for RDA Lift Match requirement.
The Transportation Fund is used to improve existing traffic signals, new signalization, major roadways and arterials
involving the design and construction of new sections of streets, the widening of roadways to provide additional vehicle
lanes, the installation of sidewalks and landscaping. The major source of revenue for this fund is grants from other
agencies and contributions from other funds. Total ending fund balance increased $2.9 million or 21 % which is due to a
transfer in from utility tax of $3.OM to a major capital project which is slated to be spent in 2010.
Proprietary funds
The City of Federal Way's proprietary funds provide the same type of information found in the government -wide, but in
more detail. Unrestricted net assets of the Surface Water Management Fund at the end of the year amounted to $4.9
million, and those for Dumas Bay Centre amounted to $179 thousand. The total change in net assets for both funds was
$329 thousand increase and $227 thousand decrease, respectively. Other factors concerning the finances of these two
funds have already been addressed in the discussion of the City of Federal Way's business -type activities.
City o f Federal Way / 14
GENERAL FUND BUDGETARY AND ACTUAL HIGHLIGHTS
The City of Federal Way budgets on a biennial basis with each budget beginning in an odd numbered year.
Appropriations for operating funds are authorized for two years, but must be reviewed and reauthorized by the City
Council in the middle of the biennial period. In 2009, the City made four budget adjustments due to the economic
climate. The following discussion is reflective only of the current year of the biennium.
The General Fund expenditure budget decrease of $708 thousand between the original budget for the fiscal year 2009
and the final budget are explained as follows:
o The following positions were eliminated in 2009 which amounted to $494 thousand decrease in the
general fund:
Building Inspector 1.0 FTE
■ Development Specialist 1.0 FTE
Administrative Assistant 0.38 FTE
■ Assistant City Manager/Chief Operating Officer 1.0 FTE
Y ICMA Intern 1.0 FTE
• Deputy City Attorney 1.0 FTE
■ Police Records Specialist 2.0 FTE
■ Parks Athletic Assistance 0.50 FTE
■ Parks Office Technician 0.80 FTE
• Recreation Superintendent 1.0 FTE
■ Park Planner 1.0 FTE (partial capital funded)
o The following positions were frozen in 2009 which amounted to $245 thousand decrease in the general
fund
■ Court Clerk 1.0 FTE
■ Police Officer 1.0 FTE
■ Police Lieutenant Overhire 1.0 FTE
o Added $491 thousand for various Police Grants
o Added $75 thousand for Medical Incubator
u Deefeased budget by $530 thousand for estimated year-end savings
o Eliminated Camp Kilworth budget of $100 thousand
o Added $49 thousand to Street Subsidy Transfer for the elimination of the Street Manager, $100
thousand year-end estimated savings, offset by decrease in permits/fees and fuel tax revenues.
o Added $75 thousand for added election costs
o Added $50 thousand for Public Defender costs
o Moved $500 thousand from 2009 to 2010 for City Manager Contingency
o Added $368 thousand for one-time funded programs for Community Development that continued from
2008 into 2009 such as unfit structure, Human Service contract, and Shoreline Master Plan.
Adjustments to revenues and other sources budget include: 2008 ending fund balance carry forward of $1.1 million,
decrease in taxes of $2.7 million, decrease in franchise fees of $35 thousand, decrease in building and electrical permits
of $242 thousand, increase in intergovernmental revenues of $138 thousand, increase in grant revenues of $742 thousand,
increase in charges for services revenues of $42 thousand, increase in miscellaneous receipts of $473 thousand, increase
in recreation revenues of $174 thousand, decrease in interest earnings of $292 thousand, and increase in interfund
transfers of $2.4 million.
Year-end actual revenues exceeded budget by $129 thousand or 0.40%. The positive variance compared to the annual
budget is mainly due to fines/forfeitures, interest, license/permits, taxes, other misc revenues exceeding budget offset by
intergovernmental and services charges/fees which was below annual projections.
Year-end expenditures were under budget by $1.0 million or 2.5%. The positive variance is due to under -spending of
security of persons/property, economic environment, health, culture/recreation offset by overspending in general
City of Federal Way / 15
government and capital outlay. The under -spending of security of persons/property contributed 88.8% of the positive
variance and is mainly due to vacancy savings, fuel savings, under spending of overtime, grant related expenditures
offset by overage in education, miscellaneous expenditures, and non -budgeted grant expenditures.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City of Federal Way's investment in capital assets for its governmental and business -type activities as of December
31, 2009 amounts to $523.9 million (net of accumulated depreciation). This investment in capital assets includes land,
buildings, improvements, machinery and equipment, infrastructure, park facilities and construction in progress. For more
details, please see Note 8.
CAPITAL ASSETS AT YEAR-END, NET OF DEPRECIATION
Governmental
Business -Type
Total
Activities
Activities
2009
2008
Land
$ 294,568,473
$ 10,077,203 $
304,645,676 $
302,739,274
Building & Improvements
45,350,274
37,986,208
83,336,482
86,866,821
Machinery and equipment
5,281,835
24,117
5,305,952
5,293,866
Infrastructure
94,506,838
1,854,335
96,361,173
98,437,593
Construction in progress
32,209,930
2,029,180
34,239,110
31,780,163
Total Capital Assets
$ 471,917,351
$ 51,971,042 $
523,888,393 $
525,117,717
Major capital asset events during the current fiscal year included the following: expanding and improving the city streets
and traffic corridors for a total of $5.2 million and general capital and various park improvements for $733.5 thousand.
Additional information on the City of Federal Way's capital assets can be found in Note 8 of the Notes to the Financial
Statements.
Long-term debt
At the end of 2009, the City of Federal Way had total bonded debt outstanding of $48.6 million which is backed by the
full faith and credit of the government. The remainder of the City's debt represents Public Works Trust Fund Loans.
LONG-TERM DEBT (FUTURE PRINCIPLE AND INTEREST PAYMENTS)
Governmental Business -Type
Activities Activities Total
General obligation bonds $ 48,631,931 $ - $ 48,631,931
Public works trust fund loan - 1,458,196 1,458,196
Total $ 48,631,931 $ 1,458,196 $ 50,090,127
The City's total debt increased by $19.3 million due to inclusion of the South Correction Entity (SCORE) debt offset by
decrease of $4.1 for the payoff of the 2006 GO Bonds for the AMC Theatre Site during 2009. The remaining decrease
represents annual debt service payments.
The City of Federal Way maintains an Al rating from Moody's as of August 2009 for its general obligation bonds. In
2010, Moody underwent its migration from its municipal scale ratings to its new global scale ratings, in which the City's
Long Term Go Bond ratings went from Al to AA3.
Washington State statutes limit the amount of debt a government entity may issue to 7.5% of its total assessed valuation,
subject to 60% majority vote of qualified electors. Of the 7.5% limit, 2.5% is for general purposes, 2.5% for open
space/park facilities, and 2.5% for utilities. Non -voted general purpose indebtedness is limited to 1.5% of assessed
valuation and combination of voted and non -voted general purpose indebtedness cannot exceed 2.5% of assessed
valuation.
City of Federal Way / 16
The City's assessed valuation for 2009 was $9.882 billion and the total amount of debt the City may issue is $732.9
million. Remaining legal debt capacities as of December 31, 2009 are:
General Government (no vote requirement) $ 139,967,234
General Government (3/5 majority vote required) 98,816,476
Parks & Open Space (3/5 majority vote required) 247,041,191
Utilities (3/5 majority vote required) 247,041,191
Total Capacity $_DIM5.091
Additional information on the City of Federal Way's long-term debt can be found in Note 11 and in the Statistical
Section of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The 2009/2010 Adopted Budget was developed under challenging and uncertain economic conditions. Revenue
forecasts for both years were based on the first half of 2008 in which the housing market was slowly softening but did
not plummet until the second half of 2008. With the mortgage crisis, large declines in revenues, and increasing fixed
costs, the City is continues to reevaluating expenditures and revenues to make adjustments as necessary.
Out of the City's nearly $40M General Fund operating budget, sales tax accounts for 31 % of the revenues, utility taxes
24%, and property taxes 23%. Over the last several years, Federal Way's annual reoccurring revenue growth has
averaged nearly 8%. However, in 2009, those same reoccurring revenues were down over 4%. Aggregate tax revenue
growth is expected to be minimal through 2011.
Even with the projected revenue recovery after 2011, overall city revenue growth is not expected to keep pace with
inflation. Two of the city's main revenue generators, sales tax receipts are expected to remain flat through the out years
and utility taxes are expected to decrease. Projected revenues for the forecast period are expected to grow at lower
overall levels than have been experienced recently. It is this conclusion which leads to the expectation that during the
plan years, revenue growth will not cover a moderate growth in operating expenditures resulting in additional budget cuts
in the 2011/2012 biennial budget and relying less on utility tax due to decrease in overall tax revenues.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Federal Way's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to Tho Kraus, Finance Director, City of Federal Way, P.O. Box
9718, Federal Way, WA 98063-9718, telephone 253-835-2520, or visit the City's website at www.cityoffederalway.com.
City ofFederal Way / 17
BASIC FINANCIAL STATEMENTS
City of Federal Way / 18
STATEMENT OF NET ASSETS
December 31, 2009
Governmental
Business -type
Activities
Activities
Total
ASSETS
Cash & cash equivalents and investments
$ 53,714,899
$ 5,304,094
$ 59,018,993
Receivables (net)
2,249,264
45,879
2,295,143
Due from other governments
2,166,646
236,002
2,402,648
Prepaid items
19,414
-
19,414
Restricted assets:
Cash with escrow agent
381,337
-
381,337
Restricted Cash
106,728
-
106,728
Investment in joint venture
18,546,151
-
18,546,151
Capital assets not being depreciated:
Land
294,568,473
10,077,203
304,645,676
Construction in progress
32,209,930
2,029,180
34,239,110
Capital assets net of accumulated depreciation:
Buildings/structures
12,787,494
1,337,342
14,124,836
Improvements other than buildings
32,562,780
36,648,866
69,211,646
Machinery and equipment
5,281,835
24,117
5,305,952
Infrastructure
94,506,839
1,854,335
96,361,174
Total Assets
549,101,790
57,557,018
606,658,808
LIABILITIES
Accounts payable and accruals
1,636,889
5,232
1,642,121
Unearned revenue
497,525
325,863
823,388
Retainage payable
282,382
-
282,382
Retainage payable - with escrow agent
-
21,141
21,141
Due to other governments
139,672
18,423
158,095
Customer deposits
1,362,099
4,373
1,366,472
Noncurrent Liabilities:
Due within one year
602,226
182,359
784,585
Due in more than one year
30,117,244
1,289,337
31,406,581
Total Liabilities
34,638,037
1,846,728
36,484,765
NET ASSETS
Invested in capital assets, net of related debt
442,704,401
50,578,649
493,283,050
Restricted for:
Customer deposit
-
4,373
4,373
Debt service prefunding
4,164,479
-
4,164,479
Capital projects
22,934,356
-
22,934,356
Steel Lake Management District
-
11,993
11,993
Other
377,695
-
377,695
Unrestricted
44,282,822
5,115,275
49,398,097
Total Net Assets $ 514,463,753 $ 55,710,290 $ 570,174,043
The notes to the financial statements are an integral part of this statement.
City o Federal Way / 19
Functions/Programs
Governmental Activities:
General Government
Security of Persons & Property
Transportation
Physical Environment
Economic Environment
Health
Culture & Recreation
Interest on long-term debt
Total governmental activities
Business -type Activities:
Surface Water Management
Dumas Bay Centre
Total business -type activities
Total
STATEMENT OF ACTIVITIES
For the Year ended December 31, 2009
Program Revenues Net (Expense) Revenue & Changes in Net Assets
Operating Capital
Charges for Grants and Grants and Governmental Business -type
Expenses Services Contributions Contributions Activities Activities Total
$ 4,591,087
$ 877,562
$ 154,242 $ -
$ (3,559,283) $
- $ (3,559,283)
26,341,614
5,035,058
1,784,994 -
(19,521,562)
- (19,521,562)
9,448,397
1,806,010
- 8,452,149
809,762
- 809,762
450,914
86,190
221,172 -
(143,552)
- (143,552)
3,560,620
680,593
- -
(2,880,027)
- (2,880,027)
776,954
148,511
- -
(628,443)
- (628,443)
8,089,242
1,546,215
11,760
(6,531,267)
- (6,531,267)
811,124
-
- -
(811,124)
- (811,124)
54,069,952
10,180,139
2,172,168 8,452,149
(33,265,496)
- (33,265,496)
3,345,027
3,631,129 -
- 286,102
286,102
984,103
551,883 - -
- (432,220)
(432,220)
4,329,130
4,183,012 - -
- 1�, 461118)
(146,118)
$58,399,082
$ 14,363,151 $ 2,172,168 $ 8,452,149
(33,265,496) (146,118)
(33,411,614)
General revenues:
Utility tax
13,549,472
-
13,549,472
Sales tax
12,327,191
12,327,191
Property tax
9,653,537
-
9,653,537
Real estate excise tax
1,428,985
-
1,428,985
Gambling tax
1,127,203
-
1,127,203
Hotel/Motel tax
154,148
-
154,148
Leasehold Excise Tax
4,999
-
4,999
Other revenue
1,421,791
1,421,791
Investment earnings
339,740
46,236
385,976
Contributed capital
283,850
500
284,350
Transfers
(200,907)
200,907
-
Total general revenues and transfers
40,090,009
247,643
40,337,652
Change in net assets
6,824,513
101,525
6,926,038
Net assets at beginning of year
509,808,009
55,608,765
565,416,774
Prior period adjustment
(2,168,769)
2,168,769)
Net assets at beginning of year, as restated
507,639,240
55,608,765
563,248,005
Net assets at end of year
$514,463,753
$55,710,290
$ 570,174,043
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 20
BALANCESHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2009
Debt
General Street Utility Tax Service
ASSETS
Equity in pooled cash & investments $ 8,013,539 $ 1,035,335 $ 1,520,198 $ 4,225,463
Prepaid insurance/debtservice 14,414 - - -
Retainage in escrow - - - -
Receivables (net):
Taxes 517,588 - - 127,236
Accounts and contracts 60,787 - 1,507,302 -
Restricted cash 106,728 - -
Due from other governments 1,272,825 85,178 3,261
Interfund loans receivable 15,415 - -
TOTAL ASSETS 10,001,296 1,120,513 3,030,761 4,352,699
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Due to other governments
Deposits payable
Interfund loans payable
Deferred revenue
TOTAL LIABILITIES
724,275
133,838 135
20,332
- -
-.
1,045 -
133,084
-
416,238
828,880
462,171
56,750 - 188,220
1,756,100
1,020,513 135 188,220
Fund balance:
Restricted:
Nonspendable 61,211 - - -
Restricted 45,517 - - 4,164,479
Unrestricted:
Committed 500,000 3,030,626
Assigned - 100,000 - -
Unassigncd 7,638,468 - - -
TOTAL FUND BALANCES 8,245,196 100,000 3.030,626 4,164,479
TOTAL LIABILITIES AND
FUND BALANCE $ 10,001,296 $ 1,120,513 $ 3,030,761 $ 4,352,699
The notes to the financial statements are an integral part of this statement.
Citv of Federal Wav / 21
ASSETS
Equity in pooled cash & investments
Prepaid insurance/debt service
Retainage in escrow
Receivables (net):
Taxes
Accounts and contracts
Restricted cash
Due from other governments
Interfund loans receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Due to other governments
Deposits payable
Interfund loans payable
Deferred revenue
TOTAL LIABILITIES
BALANCESHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2009
(continued)
Downtown Nonmajor
Redevelopment Transportation Governmental TOTAL
$ 3,051,345 $ 15,929,960 $ 5,388,353 $ 39,164,193
- - 14,414
100,000 137,854 143,483 381,337
30 - 644,854
- 36,321 1,604,410
- - 106,728
- 637,455 167,927 2,166,646
- 15,415
3,151,375 16,741,590 5.699,763 44,097,997
- 218,938 126,061
1,203,247
- - -
20,332
137,854 143,483
282,382
- - 6,588
139,672
100,000 16,981
1,362,099
- 15,415
15,415
27 - 106,493
813.661
100,027 356,792 415,021 3,836,808
Fund balance:
Restricted:
Nonspendable
- 61,211
Restricted
- 605,920 4,815,916
Unrestricted:
Committed
3,051,348 16,384,798 4,678,822 27,645,594
Assigned
- - 100,000
Unassigned
- 7,638,468
TOTAL FUND BALANCES
3.051.348 16,384,798 5,284,742 40,261,189
TOTAL LIABILITIES AND
FUND BALANCE $ 3,151,375 $ 16,741,590 $ 5,699,763
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets are used in governmental activities are not financial resources and, therefore,
are not reported in the funds.
453,975,904
Investment in joint venture is not a financial resource and, therefore, not reported in the funds
18,546,151
Other long-term assets are not available to pay for current -period expenditures and, therefore,
are deferred in the funds
342,386
Internal service funds are used by management to charge the costs of insurance, information systems,
mail and duplication, fleet, and building management to individual funds. The assets and liabilities
of the internal service funds are included in governmental activities in the statement of net assets
32,083,843
Long-term liabilities, including bonds payable, are not due and payable in the current period
and, therefore, are not reported in the funds.
(30,745,720)
Net assets of governmental activities $
514,463,753
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 22
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDl1 URES
Debt
General Street Utility Tax Service
$ 22,903,042
$ - $ 13,549,472 $ 1,428,985
2,051,986
111,998 - -
1,784,994
1,195,196 - -
2,693,737
243,330 - -
1,350,815
- -
121,206
6,466 30,380 16,076
1,108,333
18,083 - -
32,014,113
1,575,073 13,579,852 1,445,061
4,291,163 - 62,136
27,051,814 - -
- 4,223,015 -
3,353,705 - -
772,151 - -
3,741,827 - -
458,750
- - 674,537
95,218 84,330 - -
39,305,878 4,307,345 62,136 1,133,287
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (7,291,765) (2,732,272)
OTHER FINANCING SOURCES (USES)
Interfund Loan Paid
Interfund Loan Received
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
13,517,716 311,774
65,000 - - -
11,842,867 2,732,272 904,695 2,695,722
(1,913,215) - (17,731,973) (606,684)
9,994,652 2,732,272 (16,827,278) 2,089,038
2,702,887 - (3,309,562) 2,400,812
5,542,307 100,000 6,340,188 1,763,667
$ 8,245,196 $ 100,000 $ 3,030,626 $ 4,164,479
The notes to the financial statements are an integral part of this statement.
'Federal Wav / 23
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
(continued)
Downtown
Redevelopment Transportation
REVENUES
Nonmajor
Governmental
TOTAL
Taxes
$ 1,038 $
$
310,315 $
38,192,852
Licenses and permits
-
-
2,163,984
Intergovernmental
-
7,256,953
890,575
11,127,718
Service charges and fees
962,946
1,673,634
5,573,647
Fines and forfeitures
-
-
849,277
2,200,092
Interest
42,455
8,469
46,548
271,600
Other
150,828
-
321,964
1,599,208
TOTALREVENUES
194,321
8,228,368
4,092,313
61,129,101
EXPENDITURES
Current:
General government
-
165,522
4,518,821
Security of persons and property
-
-
-
27,051,814
Transportation
-
1,942,525
6,165,540
Physical environment
-
-
448,873
448,873
Economic environment
151,062
3,504,767
Health
-
-
772,151
Culture and recreation
-
2,103,849
5,845,676
Debt service:
Principal
4,100,000
-
4,558,750
Interest/fiscal charges/admin fees
136,587
811,124
Capital outlay
(4.272)
7,360,327
907,920
8,443,523
TOTAL EXPENDITURES
4,232,315
7,360,327
5,719,751
62,121,039
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (4,037,994) 868,041 (1,627,438) (991,938)
OTHER FINANCING SOURCES (USES)
Interfund Loan Paid
Interfund Loan Received
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
(65,000)
(65,000)
-
-
65,000
500,000
4,000,000
2,944,122
25,619,678
(26,083)
(1,995,924)
(3,543,978)
(25,817,857)
473,917
2,004,076
(664,856)
(198,179)
(3,564,077)
2,872,117
(2,292,294)
(1,190,117)
6,615,425
13,512,681
7,577,037
41,451,305
$ 3,051,348 $
16,384,798 $
5,284,743 $
40,261,189
The notes to the financial statements are an integral part of this statement.
City o f Federal Way / 24
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2009
Amounts reported for governmental activities in the statement of activities (page 19) are 2009
different because:
Net change in fund balances --total governmental funds $ (1,190,116)
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which
capital outlays exceeded depreciation in the current period. 2,963,015
Revenues in the statement of activities that do not provide current financial resources 52,683
are not reported as revenues in the funds.
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however,
has any effect on net assets. Also, governmental funds report the issuance
proceeds of new debt as current financial resources and payment as the use
of current resources, whereas these amounts reduce the net assets. 4,558,750
Internal service funds are used by management to charge costs of risk management,
information systems, mail & duplication, fleet, and building systems to the funds. 356,333
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in the funds. 83,848
Change in net assets of governmental activities $ 6,824,513
The notes to the financial statements are an integral part of this statement.
'Federal Wav / 25
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Taxes
$ 25,422,000 $
22,719,000 $
22,903,042 $
184,042
Licenses and permits
2,236,000
1,959,000
2,051,986
92,986
Intergovernmental
1,229,000
2,078,913
1,784,994
(293,919)
Service charges and fees
2,673,759
2,803,831
2,693,737
(110,094)
Fines and forfeitures
1,223,000
1,252,101
1,350,815
98,714
Interest
408,000
116,000
121,206
5,206
Other
461,239
956,369
1,108,333
151,964
TOTALREVENUES
33,652,998
31,885,214
32,014,114
128,900
EXPENDITURES
Current:
General government
Security of persons and property
Economic environment
Health
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Interfund Loan Received
Transfers in
Transfers out
5,952,285
3,976,396
4,291,163
(314,767)
26,719,737
27,955,018
27,051,814
903,204
3,308,717
3,697,787
3,353,705
344,082
694,843
858,573
772,151
86,421
4,145,916
3,805,775
3,741,827
63,948
-
30,000
95,218
(65,218)
40,821,498 40,323,549 39,305,878 1,017,670
(7,168,500) (8,438,335) (7,291,765) 1,146,570
65,000 65,000
9,587,811 12,021,267 11,842,867 (178,400)
(2,557,816) (2,347,973) (1,913.215) 434,758
TOTAL OTHER FINANCING SOURCES (USES)
7,029,995
9,738,294
9,994,652 256,358
NET CHANGE IN FUND BALANCES
(138,505)
1,299,959
2,702,888 1,402,929
FUND BALANCES - BEGINNING
4,444,738
5,542,307
5.542.307 -
FUND BALANCES - ENDING
$ 4,306,233 $ 6,842,266 $ 8,245,195 $ 1,402,929
The notes to the financial statements are an integral part of this statement.
City of Federal Way/ 26
STREET FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
REVENUES
Licenses and permits
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
MW OIJYR-11"1*7
Current:
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 144,000 $
111,000 $
111,998 $
998
1,196,000
1,260,677
1,195,196
(65,481)
385,000
230,000
243,330
13,330
31,000
1,250
6,466
5,216
27,000
27,000
18,083
(8,917)
1,783,000 1,629,927 1,575.072 (54.855)
4,791,924 4,789,567 4.307.345 482,222
4,791,924 4,789,567 4,307,345 482,222
(3,008,924) (3,159,640) (2,732,272) 427,367
3,008,924 3,159,640 2,732,272 (427.368)
TOTAL OTHER FINANCING SOURCES (USES)
3,008,924
3,159,640
2,732,272 (427,368)
NET CHANGE IN FUND BALANCES
0
0
(0) (1)
FUND BALANCES - BEGINNING
100,000
100,000
100,000 -
FUND BAT ,ANC'FS - FNDTNG
$ 100,001 $ 100,000 $ 100,000 $ (1)
The notes to the financial statements are an integral part of this statement.
Federal Wav / 27
UTILITY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
REVENUES
Taxes
Interest
TOTAL REVENUES
EXPENDITURES
Current:
General government
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfer in
Transfers out
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 14,752,515 $ 13,738,294 $ 13,549,472 $ (188,822)
64,376 64,644 30,380 (34,264)
14,816,891 13,802,938 13,579,853 (223,085)
62,137 62,137 62,137 -
62,137 62,137 62,137 -
14,754,754 13,740,801 13,517,716 (223,085)
904,695 904,695 -
(19,288,414) (17,835,037) (17,731,973) 103,064
TOTAL OTHER FINANCING SOURCES (USES)
(19,288,414)
(16,930,342)
(16,827,278) 103,064
NET CHANGE IN FUND BALANCES
(4,533,660)
(3,189,541)
(3,309,562) (120,021)
FUND BALANCES - BEGINNING
6,635,710
6,340,188
6,340,188
FUND BALANCES - ENDING $ 2,102,050 $ 3,150,647 $ 3,030,626 $ (120,021)
The notes to the financial statements are an integral part of this statement.
City o f Federal Way/ 28
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2009
ASSETS
Current Assets
Equity in pooled cash and investments
Prepaid items
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL CURRENT ASSETS
Property, plant and equipment:
Land
Building/structures
Machinery/furniture/equipment
Infrastructure
Construction in progress
Less accumulated depreciation
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
Current liabilities:
Vouchers/payroll payable
Retainage payable - with escrow agent
Due to other governments
Deposits payable
Deferred revenue
Public works trust fund loan payable
Compensated absences payable
TOTAL CURRENT LIABILITIES
Long-term liabilities:
Public works trust fund loan payable
Compensated absences payable
TOTAL LONG-TERM LIABILTIES
Governmental
-Business-type Activities - Enterprise Funds_ Activities
Surface Water Dumas Bay Internal
Management Centre TOTAL Service
$ 5,000,895 $ 303,199 $ 5,304,094 $ 14,550,706
- - - 5,000
- 45,879 45,879
236,002 - 236,002
5,236,897 349,078 5,585,975 14,555,706
7,967,563 2,109,640 10,077,203
19,849 3,576,592 3,596,441 16,193,560
48,012,197 106,643 48,118,840 13,890,656
1,916,645 - 1,916,645 -
1,645,949 383,231 2,029,180 -
11,432,081 2,335,185 (13,767,266) (12,143,415)
48,130,122 3,840,921 51,971,043 17,940,801
53,367,019 4,189,999 57,557,018 32,496,507
55,813 21,133
76,946 341,746
21,141 -
21,141 -
18,423 -
18,423
- 4,373
4,373 -
199,029 126,834
325,863 -
182,359 -
182,359 -
3,268 -
3,268 -
480,033 152,340 632,373 341,746
1,210,035 - 1,210,035 -
58,987 17,047 76,034 70,918
1,269,022 17,047 1,286,069 70,918
TOTAL LIABILITIES
1,749,055
169,387
1,918,442
412,664
Invested in capital assets, net of related debt
46,737,728
3,840,921
50,578,649
17,940,801
Restricted for:
Customer deposits
4,373
4,373
-
Steel Lake Management District
11,993
-
11,993
-
Unrestricted
4,868,243
175,318
5,043,561
14,143,042
TOTAL NET ASSETS
$51,617,964
$4,020,612
55,638,576
$ 32,083,844
Adjustment to reflect the consolidation of internal service fund activities related
to enterprise funds
71,714
NET ASSETS OF BUSINESS -TYPE ACTIVITIES $ 55,710,290
The notes to the financial statements are an integral part of this statement.
of Federal
29
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
OPERATING REVENUES:
Service charges and fees
Intergovernmental
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personal services
Materials and supplies
Services and charges
Intergovernmental
Depreciation
Interfund charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES)
Governmental
Business -type Activities - Enterprise Funds Activities
Surface Water Dumas Bay Internal
Management Centre TOTAL Service
$ 3,415,266 $ 551,883 $ 3,967,149 $ 4,931,975
200,793 - 200,793 -
15,070 - 15,070 163,449
3,631,129 551,883 4,183,012 5,095,424
1,622,130
390,101
2,012,231
1,044,216
71,729
104,521
176,250
447,477
634,419
244,730
879,149
1,994,198
182,360
7,863
190,223
126,062
499,442
181,999
681,441
2,119,749
282,256
50,319
332,575
3,292,336 979,533 4,271,869 5,731,702
338,793 (427,650) (88,857) (636,278)
Gain (Loss) from disposal of capital assets
- -
-
(24,630)
Interest income
38,951 2,331
41,282
73,094
Interest expense
(15,748) -
(15,748)
-
TOTAL NON -OPERATING REVENUES (EXPENSES)
23,203 2,331
25,534
48,464
INCOME (LOSS) BEFORE OPERATING TRANSFERS
361,996 (425,319)
(63,323)
(587,814)
Capital contributions
Operating transfers in
Operating transfers out
CHANGE IN NET ASSETS
TOTAL NET ASSETS - BEGINNING
TOTAL NET ASSETS - ENDING
Adjustment to reflect the consolidation of internal service fund
activities related to enterprise funds
CHANGE IN NET ASSETS OF BUSINESS -TYPE ACTIVITIES
500 - 500 956,940
2,728 429,863 432,591 -
- (231,684) (231,684) (2,728)
365,224 (227,140) 138,084 366,398
51,252,740 4,247,752 31,717,446
$ 51,617,964 $ 4,020,612 $ 32,083,844
(38,052)
$ 100,032
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 30
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
Governmental
Business -type Activities - Enterprise
Funds
Activities
Surface Water
Dumas Bay
Internal
CASH FLOWS FROM OPERATING ACTIVITIES:
Management
Centre
TOTAL
Service
Cash received from users
$ 3,780,582
$ 564,695
$ 4,345,277
$ 4,931,975
Cash payments to claimants
-
-
-
(331,835)
Cash payments to suppliers for goods/services
(724,528)
(362,082)
(1,086,610)
(1,643,836)
Cash payments to employees
(1,600,856)
(395,655)
(1,996,511)
(1,045,966)
Cash payments to other funds for goods and services
(282,256)
(50,319)
(332,575)
-
Cash payments for other services/charges
-
-
-
(387,008)
Cash payments to other governments for goods and services
(182,360)
(7,863)
(190,223)
(124,805)
Cash payments for damage deposits
-
(4,864)
(4,864)
-
Other operating receipts
146,970
8,000
154,970
163,449
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
1,137,552
(248,088)
889,464
1,561,974
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating transfers in
2,728
429,863
432,591
-
Operating transfers out
-
(231,684)
(231,684)
(2,728)
NET CASH PROVIDED BY NONCAPITAL FINANCING
2,728
198,179
200,907
(2,728)
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Principal paid on debt service
(182,359)
-
(182,359)
-
Interest paid on debt service
(15,748)
(15,748)
-
Acquisition of capital asset/construction work in progress
(583,140)
(583,140)
(535,598)
Proceeds from the sale of capital assets
-
-
26,626
Cash contributions for capital acquisition
500
500
-
NET CASH USED FOR CAPITAL
AND CAPITAL -RELATED FINANCING ACTIVITIES
(780,747)
(780,747)
(508,972)
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
38,950
2,331
41,281
73,094
NET CASH PROVIDED BY INVESTING ACTIVTTES
38,950
2,331
41,281
73,094
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
398,483
(47,578)
350,905
1,123,368
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
4,602,412
350,777
4,953,189
13,427,338
CASH AND CASH EQUIVALENTS AT END OF YEAR
5,000,895
303,199
5,304,094
14,550,706
RECONCILIATION OF OF RA'11NG INCOATE ]TO
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss)
338,793
(427,650)
(88,857)
(636,278)
Adjustments to reconcile operating income to
net cash provided (used) by operating activities:
Depreciation expense
499,442
181,999
681,441
2,119,749
(Increase)/decrease in accounts receivable
304,685
25,955
330,640
-
(Increase)/decrease in taxes receivable
144,600
-
144,600
-
(Increase)/decrease in due from other governments
(213,493)
8,000
(205,493)
-
Increase/(decrease) in vouchers/accounts payable
(32,175)
(12,831)
(45,006)
30,086
Increase/(decrease) in due to other governments
18,423
-
18,423
-
Increase/(decrease) in retainage payable
(4,628)
-
(4,628)
-
Increase/(decrease) in deposits payable
-
(4,864)
(4,864)
-
Increase/(decrease) in deferred revenue
60,631
(13,143)
47,488
-
Increase/(decrease) in accrued payroll/compensated absences payable
21,274
(5,554)
15,720
(1,750)
TOTAL ADJUSTMENTS
798,759
179,562
978,321
2,148,085
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
$ 1,137,552
$ (248,088)
$ 889,464
$ 1,511,807
Non -cash investing, capital, and financing activities:
Other contributions of capital assets
$ 956,940
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 31
NOTES TO THE BASIC FINANCIAL STATEMENTS
December 31, 2009
INDEX
Note
Page
1
Summary of Significant Accounting Policies..........................................................._...................
32
ReportingEntity..................................................................................................................
32
Government -wide and Fund Financial Statements...............................................................
32
Measurement Focus, Basis of Accounting, and Financial Statement Presentation ...............
33
BudgetaryInformation.................................................................................•--..........,..........
36
Assets, Liabilities and Equities................•--.....................................................--...................
38
Cash and Investments...................................................................................................
38
Receivables..................................................................................................................
38
Amounts Due to and from Other Funds; Interfund Loans ...........................................
38
Inventories....................................................................................................................
39
....... .............. ..... .. .....
Capital Assets...........................•----......................... ...... ....................�.... .
39
Compensated Absences Payable..................................................................................
40
Long -Term Liabilities..................................................................................................
40
Deferred Revenue.......................................................... ..................... ................
.... ..,..... ..,..
40
Fund Equity -Reserves and Designation.......................................................................
40
Interfund Transactions.................................................................................................
41
2
Reconciliation of Government -wide & Fund Financial Statements ..............................................
41
3
Stewardship, Compliance and Accountability ..... ............... .......... ...,.......
42
4
Supplemental Appropriations ......................... ...... ... ... ........._........ ........................
42
5
Deposits and Investments .....................................................................................................
42
6
Receivables and Due from Other Governments............................................................................
45
7
Due To Other Governments .......................... ............................. ........................ ...........
45
8
Capital Assets................................................................................................................................
46
9
Pension Plans................................................................................................................................
47
10
Risk Management...............................................................................................................
51
11
Long -Term Liabilities ............................................. .............. .......... .............. —...... ... .......
52
12
Interfund Transactions ................................... .................... ..............................................................
55
13
Contingencies and Litigation......................................................................................................
56
14
Joint Ventures...............................................................................................................................
56
15
Prior Period Restatement...............................................................................................................
59
16
Subsequent Events .... ...... .................................................. ................................... ......... I..I..-.....-..
60
City of Federal Way / 32
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended December 31, 2009
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Federal Way have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted
standard setting body for establishing governmental accounting and financial reporting principles. The significant accounting
policies are described below.
REPORTING ENTITIES
The City's Comprehensive Annual Financial Report (CAFR) includes the funds, agencies and boards controlled by or
dependent on the City. In conformance with Governmental Accounting Standards Board (GASB) Statement 14, "The
Financial Reporting Entity", the primary basis of determining whether outside agencies and organizations should be
considered component units of the City is Financial Accountability. Financial Accountability is dependence on the City's
obligation to redeem the organization's debts, to finance the organization's deficits, and the extent to which subsidies from the
City constitute a major portion of the organization's total resources. Applying these criteria, as outlined in GASB Statement
14, the City has no relationships that qualify as component units.
Financial Accountability
Financial accountability is defined as appointment of a voting majority of an agency's or organization's board, and either the
City's ability to impose will on the agency or organization or the possibility that the agency or organization will provide a
financial benefit to or impose a financial burden on the City.
Joint Ventures
A joint venture is a legal entity or organization which results from a contractual arrangement that is owned, operated, or
governed by two or more participants as a separate activity subject to joint control, in which participants retain an ongoing
financial interest or an ongoing financial responsibility. The City participates in two joint ventures: Valley Communications
Center and South Correctional Entity (SCORE). See Note 14, Joint Venture, which more fully describes these organizations.
ACCOUNTING STANDARDS
The City implemented GASB Statement 34 ("Basic Financial Statements and Management's Discussion and Analysis for
State and Local Governments"), GASB 37 ("Basic Financial Statements — and Management's Discussion and Analysis- for
Qtata. anti T.nral nnvP.rnmPntc• Omnihnc") i;ARR iR ("( P.rtain Financial QtAtP.mP.nt NntP Tlicrincnra.c"1 and (:A.QR SA ("Fnnrl
Balance and Governmental Fund Types). These new standards substantially change the financial reporting basis and format.
Some of these changes are:
• Management's Discussion and Analysis (MD&A) section providing analysis of the City's overall position and results
of operations
• Financial statements prepared using full accrual accounting for all government -wide City activities, including current
year infrastructure. Pursuant to GASB Statement 34, the City included capitalized retroactive infrastructure assets
owned prior to 2003.
• Change in the individual fund financial statements focusing on the major funds
• Balance Sheet of Government Funds has the following fund balance allocation: Unspendable, Restricted, Committed,
Assigned, and Unassigned.
GOVERNMENTAL -WIDE AND FUND FINANCIAL STATEMENTS
The government -wide financial statements (i.e. the statement of net assets and the statement of activities) report information
on all activities of the primary government. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business -type activities, which rely to a significant extent on fees and charges for support.
City o Federal Way/ 33
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Our policy is to
allocate indirect costs to specific function or segment. Program revenues include 1) charges to customers or applicants who
purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grant and
contributions that are restricted to meeting the operational or capital requirements or a particular function or segment. Taxes
and other items not properly included among program revenues are reported instead as general revenues. Separate fund
financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and
major individual enterprise funds are reported as separate columns in the fund financial statements.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING, FINANCIAL STATEMENT PRESENTATION
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis
of accounting, as are the proprietary fund statements. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for
which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by
the provider have been met.
Governmental Funds
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues
are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of
the current period. For this purpose, the City of Federal Way considers revenues to be available if they are collected within 30
days of the end of the current fiscal period with an exception to Utility Taxes in which we extend this period to 60 days.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when
payment is due.
Property taxes, licenses, and interest associated within the current period are all considered to be susceptible to accrual and so
have been recognized as revenues of the current fiscal period. Only the portion of special assessment receivable due within
the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
The City reports the following major governmental funds:
General Fund
This is the City's general operating fund. It accounts for all financial resources of the general government, except
those required to be accounted for in another fund.
Street Fund
This fund accounts for receipt and disbursement of State -levied "unrestricted" motor vehicle fuel taxes which must
be accounted for in a separate fund and expended for street -oriented engineering, construction and maintenance
purposes only.
Utility Tax Fund
This fund was established to account for all utility tax receipts. These receipts will subsequently be distributed to
various funds (Debt Service, Capital Improvement Projects, etc.) for project expenditure as determined by the City
Council.
Debt Service Fund
This fund accounts for the accumulation of resources for the payment of general obligation and assessment bond
principal, interest and related costs.
Downtown Redevelopment CIP Fund
This fund was established to accumulate resources to set aside for downtown projects.
City of Federal Way / 34
Transportation CIP Fund
This fund accounts for receipts and disbursements related to acquisition, design, construction and any other related
street project expenditures.
The City reports the following fund groups as non -major funds:
Special Revenue Funds
These funds are to be used to account for the proceeds of revenues and sources (other than special assessments,
expendable trust or major capital projects) that are legally restricted to expenditures for specified purposes.
Capital Project Funds
These funds account for the acquisition or construction of major capital facilities with the exception of those facilities
financed by the proprietary and trust funds. The major sources of revenues for this fund are general obligation bond
proceeds, grants from other agencies, local taxes and contributions from other 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 the related balance sheets.
Private sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both
the government -wide and proprietary fund financial statements to the extent that those standards to not conflict with or
contradict guidance of the Governmental Accounting Standards board. Governments also have the option of following
subsequent private -sector guidance for their business -type activities and enterprise funds, subject to the same limitation. The
City of Federal Way has elected not to follow subsequent private -sector guidance.
As a general rule the effect of the interfund activity has been eliminated for the government -wide financial statements.
Amounts reported as program revenue include 1) charges to customers, 2) operating grants and contributions, and 3) capital
grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather
than program revenues. General revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
onuoinu nperations. The nrincinal oneratinu revenues of the enternrise and internal service fiords are nrimarilv imer rharuec
the cost of providing goods or services to the general public on a continuing basis. Operating expenses for enterprise funds
and internal service funds includes the cost of sales and services, administrative expenses, and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses.
The City reports the following major proprietary funds:
Enterprise Funds
The City uses enterprise funds to account for government activities that are financed and operated in a manner similar to
private business. Costs of providing services to the general public are primarily financed by user fees.
Surface Water Management Fund
This fund was established to administer and account for all receipts and expenditures related to the City's surface and
storm water management system.
Dumas Bay Centre Fund
This fund was established to account for the revenues and expenses related to the acquisition, capital improvements
maintenance and operations of the City -owned Dumas Bay Centre and Knutzen Family Theatre.
City o Federal Way / 35
Internal Service Funds
The City uses Internal Service Funds to account for the financing of goods or services provided by one department or agency
to other departments or agencies of a government, or to other governments, on a cost -reimbursement basis.
A description of each individual Internal Service Fund included in the Comprehensive Annual Financial Report is provided
below:
Risk Managtment Fund
This fund accounts for the City's risk financing activities established to minimize adverse effects of losses associated
with property and casualty, medical and dental, unemployment and worker's compensation claims. Both risk control
(to minimize the losses that strike and organization) and risk financing (to obtain finances to provide for or restore
the economic damages of those losses) are involved. The City is currently self -insuring only State Unemployment
Compensation. Related premiums received by the fund are used to reimburse the unemployment benefits paid to
eligible individuals and to establish reserves for the payment of estimated future unemployment claims liability. The
City is also currently recovering costs and building reserves for general liability including property, casualty, errors
and omissions and fidelity coverage.
Information Systems Fund
This fund was established to account for all costs associated with data processing, telecommunications and the
Geographical Information System (GIS). This fund will own and depreciate all non-proprietary fund assets related to
these functions, and will charge equipment/software users for both maintenance and operating costs and equipment
replacement charges based on depreciation schedules.
Support Servim Fund
This fund accounts for duplication, graphics and other general support services provided to departments and funds
throughout the City.
Fleet and Equipment Fund
This fund accounts for the cost of maintaining City vehicles and other motorized equipment. Rates charged to user
departments are based on the full cost of maintaining equipment items, including the recovery of related depreciation
expense.
Buildings and Furnishings Fund
This fund accounts for all costs associated with the operation and maintenance of specified City buildings. City
building facilities and furnishings will be owned by this Fund, and both maintenance/operating costs and depreciation
recovery will be charged City departments and funds.
Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized and reported in the financial
statements.
The accrual basis of accounting is used by proprietary 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 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. The City uses thirty days when evaluating the available criteria.
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 as 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.
City of Federal Wav / 36
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 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 '/a% 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. The Sales Tax remittance in January is considered both measurable and available and is therefore accrued as revenue
at year-end.
Grant Revenues - Under Section G60.109 of the Codification of Governmental Accounting and Financial Reporting
Standards, revenues for cost reimbursement grants are determined to be earned and, therefore, available at the time related
expenditures are incurred. For this reason, grant revenues to be received as reimbursement for expenditures incurred in the
current year are also recognized as revenue in that year.
Shared Revenues - Revenues that have been collected, 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; 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 licenses and permits, fines
and forfeitures, and other miscellaneous revenues which are generally not measurable until received.
FINANCIAL STATEMENT PRESENTATION
In order to obtain an understanding of changes in the City's position and the results of the City's operations, the financial
statements for year end of 2009 should be read in conjunction with the government's financial statements for the year ended
December 31, 2008.
BUDGETARY INFORMATION
Scope of Budget
Annual appropriated budgets are adopted for the general, some special revenue, and debt service funds on the modified
accrual basis of accounting. For governmental funds, there are no differences between the budgetary basis and generally
accepted accounting principles. Budgets for project and 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 (funds budgeted on an
annual basis) are:
'Federal Wav / 37
General Fund
Special Revenue Funds
Street Fund
Arterial Street
Utility Tax
Solid Waste & Recycling
Federal Way Community Center
Traffic Safety
HotellMotel Lodging Tax
Paths & Trails
Debt Service Fund
Procedures for Adopting the Biennial Budget
The City's budget process and the time limits under which the budget must be prepared are defined by the Revised Code of
Washington (RCW) 35A.33. The procedures followed in establishing the annual budget are described below:
By late May the official budget call is made by the Finance Director for current level service budgets and a preliminary
financial forecast.
By late June, departments submit their preliminary expenditure estimates and the Finance department updates the
preliminary revenue estimates to define resources available to finance coming year expenditure programs.
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 third Monday in November, the City Council must adopt an ordinance to establish the amount of
property taxes to be levied in the coming year.
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. During 2009, the budget was amended four times.
The budget amounts shown in the financial statements are the final authorized amounts as revised during the year.
City of Federal Way / 38
The financial statements contain the original and final budget information. The original budget is the first complete
appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental
appropriations, and other legally authorized changes applicable for the fiscal year.
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 the related item is recorded as a fund
expenditure. Outstanding encumbrances lapse at year end, are canceled and rolled over to the next fiscal 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. The total encumbrances at year-end for the City were $4,586,531.
ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY
Cash and Investments
The City follows the practice of pooling cash and investments of all funds for investment purposes, except for cash held in
escrow, which is disclosed separately on the balance sheet. Each fund's portion of total cash and investments is summarized
by fund type in the combined balance sheet as equity in pooled cash and investments.
It is the City's policy to invest all cash not immediately required for disbursement. At December 31, 2009, the State Treasurer
was holding $58,930,580 in the State Investment Pool. The State Investment Pool is considered a cash equivalent. The
interest earnings on these investments are allocated to all funds based on the average monthly balance for each fund.
For purposes of the Statement of Cash Flows, the City considers all highly liquid investments with a maturity of three months
or less when purchased, to be cash equivalents. At December 31, 2009, the total cash and cash equivalents were $59,155,504.
The City's deposits are entirely covered by federal depository insurance (FDIC) or by collateral held in a multiple financial
institution collateral pool administered by the Washington Public Deposit Protection Commission (PDPC).
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.
In accordance with GASB 31, investments in money market investments and participating interest -earning investment
contracts with a remaining maturity of one year or less at the time of purchase are stated at amortized cost. All other
investments are stated at fair value. There was no material deviation from fair value quoted at year-end.
Receivables
Taxes receivable consists of property taxes and related interest and penalties (see Property Tax Note 6). Accrued interest
receivable consists of amounts earned on investments, notes, and contracts at the end of the year.
Due From Other Governments 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
Governments is disclosed in Note 6.
Amounts Due to and from Other Funds; Interfund Loans
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are
referred to as either "interfund loans receivable/payable" or "advances to/from other funds." All other outstanding balances
between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental
activities and business -type activities are reported in the government -wide financial statements as "internal balances."
Citv ofFederal Wav / 39
Loans between funds must be authorized by the City Manager. 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. A separate schedule of interfund loans receivable and payable is
furnished in Note 12.
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 or Enterprise Funds.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure, are reported in the applicable governmental or
business -type activities columns in the government -wide financial statements.
Pursuant to GASB Statement 34, the City included capitalized retroactive infrastructure assets owned prior to 2003, such as
roads, bridges, curbs and gutters, streets and sidewalks, bridges, and lighting systems, in the year end 2007 financial
statement. The City compiled an inventory of the retroactive infrastructure and recorded these capital assets for year end
2007. The City inventoried current infrastructure assets; performed a condition assessment on the infrastructure assets and
summarized the results using a measurement scale. To arrive at the retroactive infrastructure assets value, the City used a
deflationary factor of the change from the City's assessed value during 1990 through 2006 and multiplied this factor to the
infrastructure to determine the historical cost. The City elected to capitalize all infrastructure assets including pre- 1990 assets
when the City incorporated from unincorporated King County. The City has determined that this method would accurately
reflect capital assets. Infrastructure is the largest asset class of the City and has historically not been reflected nor a measure
of its consumption been charged.
Major expenditures for capital 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 capital asset capitalization policy where an item's cost must equal or exceed $1,000. All capital assets are valued at
historical cost (or estimated cost, where historical cost is not known/or estimated market value for donated assets).
Depreciation on all capital assets is recorded as an allocated expense in the government -wide Statement of Activities and in
the proprietary fund statements. Capital assets are reported net of depreciation. The City uses a combination of group
depreciation and straight-line depreciation over the life of the assets.
The following summarizes the average service lives used to calculate depreciation for specific categories of assets in the City's
Assets:
Asset Class Life in Years
Computers................................................................................... •. 5-6
Printers & Faxes................................................................................7
Telecommunications Equipment.......................................................7
Police Radio Equipment..................................................................
I I
Other Office Equipment..............................................................
4-10
Office Furniture and Fixtures ............
........ ..... ....... I ....... :................. 10
Recreation Equipment.....................................................................10
ParksEquipment.........................................................................
6-10
PoliceEquipment...... ..................................................................
9-11
Shop/Miscellaneous Equipment ................................................
10-12
Heavy Work Equipment................
........................................... 10-16
Non -Police Vehicles..........................................................................7
Police Patrol Vehicles.......................................................................5
Police Non -Patrol Vehicles.........................................................
7-10
HeavyTrucks..............................................................................
8-10
Land Improvements........................................................................20
Buildings.........................................................................................20
Storm Drainage Systems.................................................................20
Infrastructure...........................................................................
15-100
City o Federal Wav / 40
Compensated Absences
The City records a liability for all outstanding vacation pay and accrued compensatory time. In governmental funds, vacation
pay and compensatory time is recorded as expenditures when paid which occurs when used or upon termination. In the entity -
wide statements and the proprietary fund statements, vacation pay and compensatory time is recorded as a liability and
expense in the year earned.
Employee vacation leave is accumulated monthly at rates ranging from 12 to 22.5 days per year depending on term of
employment. Employees may accumulate up to a maximum of 240 hours of vacation leave, except the Police Guild, who can
accrue up to a maximum of 360 hours. Outstanding vacation leave is payable upon termination of employment at the
following rate: City Employees up to 240 hours and Police Guild members is at two years of their accrued rate at the time of
termination.
The differences between the governmental fund statements and the entity -wide statements represent reconciling items between
the fund level and government -wide financial statements. The reconciliations are included as part of the financial statements.
A non-exempt employee may request compensatory time off in lieu of overtime payment. Compensatory time is accrued at a
rate of one and one-half hours for each hour of overtime worked, to a maximum of eighty hours for both City employees and
Police Guild members.
Sick leave may be accumulated up to a maximum of 720 hours for regular City employees per City policy and 1,040 hours for
the Police Guild, per their contract. The monthly accrual rate for City employees is 8 hours per month. Accumulated sick
leave is not payable upon termination of employment. Outstanding sick leave at year-end is not accrued due to the difficulty
in estimating the portion of existing balances likely to result in expenditures in future periods.
Long-term Liabilities
In the government -wide financial statements and the proprietary fund financial statements, long-term debt and other long-term
obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund
statement of net assets. Long-term debt outstanding at year-end is outlined in Note 11.
Deferred Revenues
The deferred revenue 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. The portions of Property Taxes that do not meet the available criteria are recorded as
defter ed revenue.
Fund Equity -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 funds, fund balance that is legally restricted for future purposes include reserves for: a) future employee
retirement payments and b) future debt service. The City of Federal Way does not have fiduciary funds. Fund balance not
available for expenditure in the governmental funds consists of the outstanding balances of current interfund loans. On
December 31,1991, $10,000 in a non -interest bearing loan from the General Fund to the City's CDBG grant fund was
authorized by the City Manager as interim financing. On December 31, 2009, an additional $5,415 was added to the loan to
increase the interim financing to CDBG for a total of $15,415. In addition, the General Fund had reserves for Petty Cash,
prepaid insurance, police special funds and Travel Advance purposes. The Special Revenue Path and Trails Reserve fund
balance is legally restricted for construction and maintenance of paths and trails within City right-of-way. The Special
Revenue Hotel/Motel Lodging Tax fund balance is also legally restricted for solely paying for tourism promotion and for the
acquisition and/or operation of tourism -related facilities.
City o Federal Wav / 41
Pursuant to GASB Statement No. 54, the City has classified their fund balances using the following categories and criteria:
Nonspendable — cannot ever or currently be spent and or has to be legally or contractually kept intact.
Restricted — use of fund balance is subjected to externally enforceable legal restrictions
Committed — use of fund balance are constrained by limitations that the Council imposes upon the City
Assigned — use of fund balance are constrained by intended use of the fund
Unassigned — unassigned fund balance can only be residual of the general fund
Interfund Transactions
There are four types of transactions between funds - interfund loans, interfund services provided and used, 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. Interfund services provided and used
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 that belong to
another fund. They involve only expenditure or expense accounts.
Except for the Enterprise Fund, transfers are accounted for as "other financing sources and uses" and are therefore included in
the operating statements.
NOTE 2 — RECONCILIATION OF GOVERNMENT -WIDE & FUND FINANCIAL STATEMENTS
Explanation of Certain Differences Between the Governmental Funds Balance Sheet and the Government -Wide
Statement of Net Assets
The governmental funds' balance sheet includes reconciliation between fund balance — total governmental funds and net
assets — governmental activities as reported in the government -wide statement of net assets. One element of that
reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period, and,
therefore, are not reported in the funds." The details of this $30,745,720 difference are as follows:
Bonds Payable at beginning of year $19,138,000
Plus: Inclusion of compensated absences 1,506,520
Plus: Joint Venture — SCORE 14,659,950
Less: Current year reduction of principal portion of debt (4.558,750)
Net adjustment to reducefund balance -total governmental
funds to arrive at net assets — governmental activities 530.745,720
Explanation of Certain Differences Between the Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances and the Government -Wide Statement of Activities
The governmental funds' statement of revenues, expenditure, and changes in fund balances includes reconciliation between
net changes in fund balances — total governmental funds and changes in net assets of governmental activities as reported in
the government -wide statement of activities. One element of that reconciliation explains that "Governmental funds report
capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense." The details of this $2,963,015 difference are as follows:
Capital outlay
$6,992,314
Plus: Developer/Private contributions
183,229
Less: Governmental depreciation expense
(5,409,072)
Plus: Investment in Joint Venture
1,196,544
Net adjustment to increase net changes in fund balances —
Total governmental funds to arrive at changes in net assets
of governmental activities
$2.963.015
City of Federal Way / 42
Another element of the reconciliation states that "Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds." This item presents:
Property taxes earned reported as deferred in the fund statements $ 52,683
Another element of the reconciliation states that "Some expenses reported in the statement of activities do not require the use
of current financial resources and, therefore, are not reported as expenditures in the funds." This item represents:
Compensated absences 83 848
NOTE 3 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
There have been no material violations of finance -related legal or contractual provisions, and there have been no expenditures
exceeding legal appropriations in any of the funds of the City.
NOTE 4 — SUPPLEMENTAL APPROPRIATIONS
Operating Budget Funds
Appropriations established during 2009 for the City's operating budget funds are provided below. As explained in Note 1,
both original and supplemental appropriations are adopted by the City Council by ordinance. Both original and final budget
appropriations are shown on the accompanying financial statements. The final budget values include all adopted adjustments
to original budget amounts.
2009
ORIGINAL
SUPPLEMENTAL
FINAL
FUND
BUDGET
APPROPRIATIONS
BUDGET
General Fund
$ 43,379,320
$ (707,788) $
42,671,532
Special Revenue Funds:
Street Fund
4,791,924
(2,357)
4,789,567
Arterial Street Fund
1,968,000
82,407
2,050,407
Utility Tax Fund
19,350,550
(1,453,377)
17,897,173
Solid Waste/Recycling Fund
489,234
-
489,234
Special Contracts/Studies
-
272,788
272,788
Hotel/Motel Lodging Tax
215,470
165,425
380,895
2% for the Arts
-
293
293
Federal Way Community Center
J
2,066,702
105;157
2.171.859
Traffic Safety
-
880,000
880,000
CDBG
456,408
845,257
1,301,665
Subtotal Special Revenue Funds
29,338,288
895,593
30,233,881
Debt Service Fund 4,562,078 (2,752,010) 1,810,068
Total S 77 279,686 $ (2,564,205) S 74,715,481
NOTE 5 — DEPOSITS AND INVESTMENTS
As required by state law, all deposits and investments of the City's funds are obligations of the U.S. Government, the State
Treasurer's Investment Pool, bankers' acceptances, or deposits with Washington State banks and savings and loan institutions.
In 2009 the City utilized all the above with the exception of bankers' acceptances as legal authorized investment instruments.
The City's investment policies are described in Note 1.
Cash and Deposits
The City follows the practice of pooling cash and investments of all funds, except restricted funds and funds held with a
trustee or in escrow, for investment purposes as disclosed in Note 1. At December 31, 2009, the equity in pooled cash and
investments was $59,507,057.
City o Federal Wav / 43
At year-end, the City had $59,155,504 in cash and cash equivalents which consisted of investments with the State Pool of
$58,930,580; the City's checking account bank balance prior to outstanding checks was $114,253; and petty cash and change
funds, advance travel fund and investigative fund totaling $49,560, and Court Trust of $61,211. No deposits were uninsured
or uncollateralized. Insurance coverage up to $250,000 is through federal depository insurance and the Washington Public
Deposit Protection Commission (WPDPC) for amounts over $250,000. Under State statute, members of WPDPC, a multiple -
financial institution collateral pool, may be assessed on a prorated basis if the pool's collateral is insufficient to cover a loss.
Investments are carried at cost or book value because the City holds all investments until maturity. The fair value of the
positions in the State Investment Pool is the same as the value of the pool shares. The State Investment Pool is managed by
the Treasurer of the State of Washington.
As of December 31, 2009 the City had the following investments and maturities:
SCHEDULE OF INVESTMENTS BY MATURITIES
AS OF DECEMBER 31, 2009
Book
Reconciliation to Governmental -Wide Statement of Net Assets:
BofA, checking account per books
$ 114,253
Petty cash/change fund/Advance travel/Investigative fund
49,460
State Investment Pool
58,930,580
Municipal Court Trust on books
61,211
Subtotal Cash and Cash Equivalents
59,155,504
Cash with escrow agent
351,553
Total cash and investments, Governmental -Wide
Statement of Net Assets
$ 59,507,057
Investments
Investment maturities
Less than 1 to 2 Greater than
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rate, the City's investments policy states
that "no more than 20% of the portfolio may be invested beyond 12 months, and average maturity of the portfolio may not
exceed 2 years."
Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. This is measured by
the assignment of a rating by a nationally recognized statistical rating organization.
State law and the City's investment policy limits the instruments in which the City may invest. The following are categories
of investments authorized under the City's policy, in general order of safety and liquidity: State Investment Pool; repurchase
agreements; U.S. treasury obligations; U.S. government agencies; U.S. government -sponsored corporations/instrumentalities;
bankers' acceptances (secondary market domestic and foreign); commercial paper (secondary market); insured certificates of
deposit (banks and savings & loans); and uninsured/collateralized certificates of deposit (banks and savings & loans).
The credit risk of the State Investment Pool is limited to obligations of the US Government, government sponsored
enterprises, or insured demand deposit accounts and certificates of deposit.
As of December 31, 2009, all City investments were in the State Local Government Investment Pool.
City of Federal Way / 44
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City
diversifies its investments by security type and institution. The investment policy states: "no more than 5% of the portfolio
may be invested in the securities of a single issuer, except for the U.S. Treasury, to which no limits apply, and commercial
paper, which is limited to 3% of the portfolio. No more than 30% of the portfolio may be invested in Bankers' Acceptances
and Certificates of Deposit."
Other Information
Below is a schedule of investments by fund type:
CHEDULE OF INVESTMENTS BY FUND CATEGORY AND INVESTMENT TYP
AS OF DECEMBER 31, 2009
State
Investment
Fund Type
Pool
Total
General Fund
$ 8,059,533 $
8,059,53.3
Special Revenue Funds
8,610,378
8,610,378
Capital Projects Funds
26,235,592
26,235,592
Enterprise Funds
1,517,566
1,517,566
Internal Service Funds
14,507,511
14,507,511
Total
$ 58,930,580 $
58,930,580
NOTE 6 — RECEIVABLES AND DUE FROM OTHER GOVERNMENTS
Property Taxes
The King County Treasurer is responsible for collecting property taxes levied in the County by all taxing districts. Amounts
collected by the County on the City's behalf are remitted daily.
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, 2009, the total balance of
property taxes receivable recorded by the City was $367,505. Of this, $342,386 is recorded as deferred revenue, since it was
not collected within the first 30 days of 2009. The property tax levy calendar in 2009 was:
PROPERTY TAX CALENDAR
January 1 Taxes are levied and become an enforceable lien against properties.
rculualy 14 lax uuib are iliaucu.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100% of market value.
October 31 Second installment is due.
Property taxes are recorded as a receivable when levied, offset by 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 30 days. No allowance for uncollectible taxes is established because delinquent taxes are considered fully collectible.
Under State law, the maximum levy (for general governmental services) is up to $3.60 per $1,000 of assessed valuation,
subject to two limitations, set forth below. Since the City of Federal Way is not a full service city, the City is only allowed
$1.68. The remaining $1.92 is for the fire district ($1.50) and library district ($0.42).
1. Chapter 84.55 of the State RCW was amended most recently by Initiative No. 747 (which was passed by voters on
November 6, 2001), limits the total dollar amount of regular property taxes levied by the City to the amount of such
taxes levied in the three most recent years multiplied by a limit factor, plus an adjustment to account for taxes on new
construction, improvements and state -assessed property at the previous year's rate. As amended by Initiative No.
747, the limit factor is the lesser of 101% or 100% plus the percent change in the Implicit Price Deflator, unless a
greater amount is approved by a simple majority of the voters; and
01j7 a Federal W / 45
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 2009 was $0.97 per $1,000 on an assessed valuation of $9,881,647,631 for a total regular levy of
$9,551,027.
Deferred Revenue
Deferred revenue reported on the governmental funds balance sheet is in the schedule below. Grant reimbursements and
refuse collection fees are receivable within one year of the end of the fiscal period.
Downtown Federal Way Debt
GeneralStreet Redevelopment Community Center Service ProgrietTz Total
Property Tax $ 342,386 $ - $ 27 $ - $ - $ 342,413
SWM Fees - - - 199,029 199,029
Energy Grant (ARRA) 75,150 - - - - - 75,150
Public Defender Grant 10,000 - - - - - 10,000
Commute Trip Reduction Grant - 56,750 - - - 56,750
Federal Way Community Center Use
Fees - - - 106,493 - - 106,493
Federal Way Fire Department Buy -In
of ValleyCom - - - - 188,220 - 188,220
Recreation Programs/Facility Rentals 34,635 - - - 126.834 161.469
Total by Fund S 462.171 S 56.750 $ 27 S 106,493 $ 188.220 $ 325,963 $ 1.139.523
Receivables & Due from Other Governments
The receivables for the fiscal year ended December 31, 2009 on the government -wide statement of net assets are detailed in
the following schedule.
General Street
Utility Tax
Debt
Service
Downtown Transport-
Redevelopment ation
Nonmajor
Govt'l
Proprietary
Total
Property Tax
$ 367,475 $ -
$ -
$ -
$ 30 $ -
$ -
$ -
$ 367,505
Real Estate Excise Tax
- -
-
127,237
- -
-
-
127,237
Utility Tax
- -
1,507,302
-
- -
-
-
1,507,302
Gambling Tax
150,113 -
-
-
- -
-
-
150,113
Recreation Programs/
Facilities
35,005 -
-
-
- -
-
-
35,005
Grants & Contributions
106,185 -
-
-
- 612,048
118,689
-
836,921
Other Reimbursement
44,196 -
-
-
- 36,321
-
28,713
109,230
Recreation/Facility
Registration
- -
-
-
- -
-
45,879
45,879
State Shared Revenue
Surface Water
Management Fees
1,148,226 85,178
- -
3,261
-
- 25,407
-
49,239
-
-
207,292
1,311,311
207,292
Total by Fund
$ 1,851,200 $ 85,178
$ 1,510,563
$127,237
$ 30 $673,776
$ 167,928
$ 281,884
$ 4,697,795
NOTE 7 - DUE TO OTHER GOVERNMENTS
At December 31, 2009, the City recorded $158,095 as due to other governmental units as follows:
King County - Jail Services $ 50,084
King County - Drainage Utility Collection Fee 18,423
King County - 2009 Primary/General Election Cost 83,000
Lakehaven Utility 6,588
Total Due to Other Governments: $ 158,095
Citv o f Federal Way / 46
NOTE 8 — CAPITAL ASSETS
Capital assets activity for the year ended December 31, 2009 was as follows:
Beginning Balance
Ending Balance
Governmental Activity
1/1/2009
Additions
Deletions
12/31/2009
Capital assets, not being depreciated.:
Land
$ 292,669,494 $
1,898,979 $
-
$ 294,568,473
Construction in progress
30,322,365
5,903,115
(4,015,550)
32,209,930
Total capital assets, not being depreciated:
322,991,859
7,802,094
(4,015,550)
326,778,403
Capital assets, being depreciated
Buildings
16,698,395
-
-
16,698,395
Improvements other than buildings
42,995,883
170,252
43,166,135
Infrastructure
116,631,203
4,028,527
-
120,659,730
Machinery and equipment
14,028,388
752,633
(706,365)
14,074,656
Total capital assets, being depreciated:
190,353,869
4,951,412
(706,365)
194,598,916
Less accumulated depreciation for :
Buildings
(3,023,610)
(887,291)
-
(3,910,901)
Improvements other than buildings
(8,445,048)
(2,158,307)
-
(10,603,355)
Infrastructure
(22,927,368)
(3,225,524)
-
(26,152,892)
Machinery and equipment
(8,070,098)
(1,257,705)
534,982
(8,792,821)
Total accumulated depreciation:
(42,466,123)
(7,528,827)
534,982
(49,459,968)
Total assets being depreciated, net
147,887,746
(2,577,415)
(171,383)
145,138,948
Governmental activities capital assets, net
$ 470,879,605 $
5,224,679 $
(4,186,933)
$ 471,917,351
Beginning Balance
Ending Balance
Business -Type Activities
1/1/2009
Additions
Deletions 12/31/2009
Capital assets, not being depreciated:
Land
$ 10,069,780 $
7,423 $
- $ 10,077,203
Construction in progress
1,457,798
575,717
(4,335) 2,029,180
Total capital assets, not being depreciated:
11,527,578
583,140
(4,335) 121106,383
Capital assets, being depreciated
Buildings
3,596,441
-
- 3,596,441
Improvements other than buildings
48,007,862
4,335
- 48,012,197
Infrastructure
1,916,645
-
- 1,916,645
Machinery and equipment
106,643
-
- 106,643
Total capital assets, being depreciated:
53,627,590
4,335
- 53,631,925
Less accumulated depreciation for :
Buildings
(2,079,849)
(179,250)
- (2,259,099)
Improvements other than buildings
(10,883,253)
(480,078)
(11,363,331)
Infrastructure
(43,144)
(19,166)
- (62,310)
Machinery and equipment
(79,579)
(2,947)
- (82,526)
Total accumulated depreciation:
(13,085,825)
(681,441)
- (13,767,266)
Total assets being depreciated, net
40,541,765
(677,106)
- 39,864,659
Business Type activities capital assets, net
$ 52,069,343 $
(93,966) $
(4,335) $ 51,971,042
Citv o Federal Wav / 47
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental and Internal Service Activities
General Government
$ 238,260
Security of Persons & Property
1,135,552
Transportation
3,532,676
Physical Environment
7,419
Economic Environment
200,105
Health
17,170
Culture & Recreation
2,397,644
Total Depreciation - Governmental Activities
$ 7,528.827
Busines-Type Activites
Utilities - Surface Water Management
Culture & Recreation - Dumas Bay Centre
$ 499,442
181,999
Total Depreciation - Business -Type Activities
$ 681,441
NOTE 9 — PENSION PLANS
Washington State Department of Retirement Systems
Substantially all City full-time and qualifying part-time employees participate in one of the following statewide retirement
systems administered by the Washington State Department of Retirement Systems, under cost -sharing multiple -employer
public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems (DRS), a
department within the primary government of the State of Washington, issues a publicly available comprehensive annual
financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS
CAFR may be obtained by writing to: Department of Retirement Systems, Communications Unit, P.O. Box 48380, Olympia,
WA 98504-8380
The following disclosures are made pursuant to GASB Statement 27, Accounting for Pensions by State and Local Government
Employers.
Public Employees' Retirement System (PERS) Plan I, 2 and 3
Plan Description
PERS is a cost -sharing multiple -employer retirement system comprised of three separate plans for membership purposes:
Plans 1 and 2 are defined benefit plans and Plan 3 is a combination defined benefit/defined contribution plan. Membership is
mandatory for all City employees working 70 hours per month for 5 months out of the twelve month period_ Membership in
the system includes elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than
judges in judicial retirement system); employees of legislative committees; community and technical colleges, college and
university employees (not in national higher education retirement programs); judges of district and municipal courts; and
employees of local government. The PERS system includes three plans. Participants who joined the system by September 30,
1977 are Plan 1 members. Those who joined on or after October 1, 1977 and by either, February 28, 2002 for state and higher
education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option
to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher
education employees, or September 1, 2002 for local government employees have the option of choosing membership in
either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in
Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. PERS defined benefit
retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS
retirement benefit provisions are established in state statute and may be amended only by the State Legislature.
Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1 members are eligible
for retirement at any age after 30 years of service, or at age 60 with five years of service, or at age 55 with 25 years of service.
Federal Wav / 48
The annual pension is 2 percent of the average final compensation per year of service, capped at 60 percent. The average final
compensation is based on the greatest compensation during any 24 eligible consecutive compensation months. If qualified,
after reaching age 66 a cost -of -living allowance is granted based on years of service credit and is capped at three percent
annually.
Plan 2 retirement benefits are vested after an employee completes five years of eligible service. Plan 2 members may retire at
age 65 with five years of service, or at age 55 with 20 years of service, with an allowance of 2 percent per year of service of
the average final compensation per year of service. The average final compensation is based on the greatest compensation
during any eligible consecutive 60-month period. Plan 2 retirements prior to 65 receive reduced benefits. If retirement is at
age 55 or older with at least 30 years of service, a 3 percent per year reduction applies; otherwise an actuarial reduction will
apply. There is no cap on years of service credit; and a cost -of -living allowance is granted (indexed to the Seattle Consumer
Price Index), capped at 3 percent annually.
Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions
finance a defined contribution component. The defined benefit portion provides a benefit calculated at 1 percent of the average
final compensation per year of service. The average final compensation is based on the greatest compensation during any
eligible consecutive 60-month period. Plan 3 members become eligible for retirement if they have: at least ten years of
service; or five years including twelve months that were earned after age 54; or five service credit years earned in PERS Plan
2 prior to June 1, 2003. Plan 3 retirements prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older
with at least 30 years of service, a 3 percent per year reduction applies; otherwise an actuarial reduction will apply. There is no
cap on years of service credit; and Plan 3 provides the same cost -of -living allowance as Plan 2. The defined contribution
portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other
options authorized by the Employee Retirement Benefits Board.
There are 1,192 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial
valuation date for the plans of June 30, 2008:
Retirees and Beneficiaries Receiving Benefits
73,122
Terminated Plan Members Entitled to But Not Yet Receiving Benefits
27,267
Active Plan Members Vest
105,212
Active Plan Members Nonvested
56,456
Total
262.057
FundingPnucy
Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates and Plan 2 employer and
employee contribution rates and Plan 3 employer contribution rates. Employee contribution rates for Plan 1 are established by
•,.r.. r.. .. ..♦ ,....1 A— --, . F..-- . « — 'Pl+o o ..1....0.- .....1 employee .. „r..:l1u-1 on r.,t.,.. for Plan 1) --A ♦1...
J LaLUW aL OLA �llilcVlll a11U UV 11VL Valy' 11 Vlll veal LV yea1. 11 VILI11Vy— a11U 1�1AIF—y'L.�Li L.V11U 1V UL1 L-3 1V1 l 1a11 L a11U L1
employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined
benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. PERS Plan 3
defined contribution is a non-contributing plan for employers. Employees who participate in the defined contribution portion
of PERS Plan 3 do not contribute to the defined benefit portion of PERS Plan 3. The Employee Retirement Benefits Board
sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are
graduated rates dependent on the employee's age. The methods used to determine the contribution requirements are
established under state statute in accordance with Chapters 41.40 and 41.45 RCW.
The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2009, were:
PERS Plan 1 PERS Plan 2 PERS Plan 3
Employer* 5.31%* 5.31% 5.31%**
Employee 6.00% 3.9% ***
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** Plan 3 defined benefit portion only.
*** Variable from 5.0% to 15.0% maximum based on rate selected by the PERS 3 member.
Citv of Federal Wav / 49
Both the City and employees made the required contributions. The City's required contributions for the years ended
December 31 were:
PERS Plan I PERS Plan II PERS Plan III
2009 $13,646 $745,549 $137,774
2008 $11,410 $764,933 $152,238
2007 $10,251 $573,471 $109,776
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 and 2
Plan Description
LEOFF is a cost -sharing multiple -employer retirement system comprised of two separate defined benefit plans. Membership
in the system includes all full time, fully compensated, local law enforcement officers and fire fighters. LEOFF is comprised
primarily of non -state employees, with the Department of Fish and Wildlife enforcement officers, who were first included
prospectively effective July 27, 2003 being an exception. LEOFF participants who joined the system by September 30, 1977
are Plan 1 members. Those who joined on or after October 1, 1977 are Plan 2 members. LEOFF retirement benefits are
financed from a combination of investment earnings, employee and employer contributions, and a special funding situation in
which the state pays the remainder through state legislative appropriations. LEOFF retirement benefit provisions are
established in state statute and may be amended only by the State Legislature.
Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1 members are eligible
for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final
average salary is as follows:
Term of Service Percent of Final Average
20 or more years 2.0%
10 but less than 20 years 1.5%
5 but less than 10 years 1.0%
The final average salary is the basic monthly salary received at the time of retirement, provided a member has held the same
position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24
months' salary within the last 10 years of service. If membership was established in LEOFF after February 18, 1974, the
service retirement benefit is capped at 60 percent of final average salary. A cost -of -living allowance is granted (indexed to the
Seattle Consumer Price Index).
Plan 2 retirement benefits are vested after an employee completes five years of eligible service. Plan 2 members may retire at
age 50 with 20 years of service, or at age 53 with five years of service, with an allowance of 2 percent of the final average
salary per year of service. The final average salary is based on the highest consecutive 60 months. Plan 2 retirements prior to
the age of 53 are reduced 3 percent for each year that the benefit commences prior to age 53. The benefit is two percent of
average salary per year of service. There is no cap on years of service credit and a cost -of -living allowance is granted
(indexed to the Seattle Consumer Price Index), capped at three percent annually.
There are 375 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial
valuation date for the plans of June 30, 2008:
Retirees and Beneficiaries Receiving Benefits
9,268
Terminated Plan Members Entitled to But Not Yet Receiving Benefits
650
Active Plan Members Vest
13,120
Active Plan Members Nonvested
3,927
Total
26,965
City of Federal Way / 50
Funding Policy
Starting on July 1, 2000, Plan 1 employers and employees will contribute zero percent as long as the plan remains fully
funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan.
Plan 2 employers and employees are required to pay at the level adopted by the Department of Retirement Systems in
accordance with 41.45 RCW.
All employers are required to contribute at the level required by state law. The Legislature, by means of a special funding
arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior
service costs of Plan 1 in accordance with the requirements of the Pension Funding Council. However, this special funding
situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a
change of statute. The methods used to determine the contribution rates are established under state statute in accordance with
Chapters 41.26 and 41.45 RCW.
The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2009 were:
LEOFF Plan I LEOFF Plan II
Employer 0.16% * 5.24% **
Employee 0.00% 8.46%
State N/A 3.45%
* The employer rates do not include the employer administrative expense fee currently set at 0.19%.
** The employer rate for ports and universities is 7.18%.
Both the City and employees made the required contributions. The City's required contributions for the years ended December
31 were:
LEOFF Plan I LEOFF Plan 11
2009 $0 $598,194
2008 $0 $586,236
2007 $0 $520,625
Other Local Government Pension Systems - City of Federal Way
Employees' Retirement System
Effective June 1, 1990, the Federal Way City Council established the Federal Way Employees' Retirement System, per City
Ordinance 90-74 and as authorized by the Federal Social Security Act (42 USCA, Section 418 (g)). The Retirement System is
a defined contribution pension plan established as an alternative to the Federal Social Security System.
During 2009, there were a total of 372 individuals covered by this system. As of the end of the year, 324 remained as active
employees of the City and two were drawing retirement benefits. The 32 inactive had left the City's employment and either
had been reimbursed their contributions, or the reimbursement was pending, or they elected to have their contributions remain
in the plan if the balance was $1,000 or greater.
All regular employees of the City of Federal Way are required to participate in the system, with the City matching the
employee's required contribution. The employee pays 6.2% and this is matched by the composite of a cash match
(approximately 5.2%) and insurance payments (1%) for disability, survivor, accidental death and dismemberment, and lump
sum death benefit coverage. Contributions into the plan are tax deferred.
Employees are entitled to make voluntary contributions to the plan, assuming that highly compensated and non -highly
compensated employees are treated equally. Each payroll period, employees may make a voluntary contribution equal to a
minimum of I % of the participant's compensation, not to exceed 10% of the participant's compensation.
Covered payroll for 2009 was $23,970,864 and total City payroll was $25,953,071. Actual City contributions for the year
were $1,246,488. Actual employee contributions were $1,486,197. All contributions were invested in instruments arranged
through independent investment advisors selected by the Municipal Employers Benefit Trust (MEBT) committee comprised
of the entities of Bellevue, Kirkland, Redmond, Edmonds, Mill Creek, Woodinville, Federal Way, and North East King Conty
Regional Public Safety Communication Agency (NORCOM) but administered by Trautmann Maher & Associates.
City o Federal Way / 51
Retirement System assets are not the property of the City and are not subject to the claims of the City's general creditors. The
Federal Way Retirement System assets are with Security Trust Company, N.A. who invests Plan assets.
In July 1995, the City implemented the hardship withdrawal and loan provision program. Loans receivable as of December
31, 2009 were $1,111,590.
The consulting actuary firm of Trautmann, Maher & Associates has been contracted to provide record keeping, administrative
and consulting services related to the Plan Actuarial determinations are not required because accidental death and
dismemberment insurance, long-term disability, survivor income insurance and the lump sum death benefit are provided by a
group insurance policy with Standard Insurance Company; and benefits paid to participants upon retirement are limited to: (a)
a nonforfeitable, nontransferable annuity contract purchased by the plan's trustee, (b) retirement benefits payable from the
employee's account to which no contributions by the City or the participant can be added after retirement, or a single lump -
sum payment equal to the accumulated balance in the employee's account as of his retirement date.
NOTE 10 — RISK MANAGEMENT
The City uses the Risk Management Internal Service Fund to account for its risk financing activities. The City maintains
insurance against most normal hazards 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. The City faces most of the risks faced by similar sized cities.
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. The City's insurance coverage in 2009 remained
relatively similar to the coverage for 2008. Effective September 1, 2008, the City moved from the Cities Insurance
Association of Washington to the Washington Cities Insurance Authority for premium savings in the next year. There were
no settlements in excess of insurance for commercially insured activities for 1996 through 2009.
The following is a summary of coverage in force in 2009.
COMPANY
POLICY PERIOI
DETAILS OF COVERAGE
LIABILITY LIMITS
General Liability (Auto, General,
Police E & 0, Employment
$20,000,000 per Occurrence subject to Annual Aggregates and Sublimits.
WCIA
1/l/09-12/31/09
Practices, & Stop Gap)
Deductible: $100,000
Crime/Fidelity (Employee
Dishonesty, Faithful Performance
of Duty, Forgery or Alternation,
Theft, Disappareance and
Destruction, Robbery and Safe
WCIA
1/l/09-12/31/09
Burglary, and Computer Fraud)
$2,500,000. Deductible $10,000.
Limit $250,000,000 per occurence. Sub -limits: $150,000,000 Earthquake per
Occurrence; $100,000,000 Flood per Occurrence. Deductible: Earthquake 2%
of the values involved, subject to $100,000 min per occurence. Flood
WCIA
I/l/09-12/31/09
Property Coverage
$250,0000 per occurrence. All other Rerils $25,000
Automobile Physical Damage for
Actual Cash Value. Deductible $5,000 per occurrence for scheduled
WCIA
1/l/09-12/31/09
Scheduled Automobiles
automobiles
$100,000,000 Maximum Limit; Sub -limits: $10,000,000 Business Interruption;
$1,000,000 Extra Expense; $500,000 Hazardous Waste. Deductilbe $10,000
Combined All Coverge Expect. Turbine Gnerator Unites, KP Motors, Pumps,
and Deep Water Wells, KVA Transformers, HP A/C and Refrigeration Systems
WCIA
1/l/09-12/31/09
Equipment Breakdown Coverage
adn HP ICE's and Gernerators >=500 PH
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.
City of Federal Way / 52
The City is self -insured for unemployment compensation. At December 31, 2009 the City had $1,318,338 in reserve.
2008 2009
Unemployment Reserve, Jan. 1st $ 1,077,366 $ 1,275,903
Unemployment compensation benefits 237,575 224,096
Claim payments during the year (39,038) (181,661)
Unemployment Reserve, Dec. 31st $ 1,275,903 $ 1,318,338
NOTE 11— LONG-TERM LIABILITIES
The various categories of long-term debt reflected on the City's financial statements are briefly described in the following
paragraphs.
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 2009 the City had no voter -approved bonds outstanding. With the exception of the 2006 GO Bond, all principal and
interest payments on general obligation debts are recorded as expenditures by the City's Debt Service Fund. The compensated
absences liability will be liquidated approximately 90 percent by the General Fund, and 10 percent by the Street fund.
Payoff of 2006 Go Bonds/AMC Theatre Site and South Correctional Entity Debt
In December of 2009, the City paid off the 2006 General Obligation Bond with a lower interest rate of 3.35%. The original
bond was issued on December 28, 2006. The City borrowed $4,100,000 on a two-year tax-exempt bond for the purchase of
the AMC Theatre site. The interest rate on the bonds was 3.53% and maturity was December 28, 2008. Interest payments on
the bond are funded by interest earned from the $6 million Downtown Redevelopment set aside funds.
The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an
Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments,
the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the
"Interlocal Cooperation Act" (RCW 39.34). The Authority issued Bonds on November 4, 2009 for a face amount of
$86,235,000. Of this amount, Federal Way portion is $14,659,950.
The following schedules detail the long-term debt activity and balances of the City.
OUTSTANDING GENERAL OBLIGATION DEBT AND LONG-TERM LIABILITIES - BY TYPE
December 31, 2009
Aiuuuut
Beginning
Ending
Bond Rating
Issue
Maturity
Interest
Originally
Outstanding
Amount
Amount
Outstandint
Description
at Issuance
Date
Date
Rate
Issued
Debt
Issued
Redeemed
Debt
Governmental Activities:
General Obligation Bonds:
2000 LimitedNalley Comm. PDA
Al
12-Sep-00
1-Dec-15
5.31
2,551,600
1,428,000
-
175,000
1,253,00,
2003 Limited/Community Center
AAA -insured
15-Nov-03
1-Dec-33
4.676
15,000,000
13,610,000
-
310,000
13,300,00(
2006 GO Bonds/AMC Theatre Site
Nonrated
28-Dec-06
28-Dec-09
3.53
4,100,000
4,100,000
-
4,100,000
2009 SCORE/Special Obligation Bond
Al/AA
4-Nov-09
1-Jan-39
3.00-6.62
14,659,950
-
14,659,950
-
14,659,951?
Subtotal GO Bonds
36311,550
[9,138,000
14.659,950
4,595,000
29,212,95,
Compensated Absences
1.519,450
128,327
141257
1.506,52,
Subtotal GO Bonds pius Com nsated
36,311,550
20,657,450
14.788.277
4,7?6,257
30,719,470
Business -Type Activities:
Public Works Trust Fund Loan:
PWTL- Kitts Corner Drain Imp
31-Aug-94
1-Jul-14
1.00
233,316
66,375
12,936
53,43,
PWTI.- Kitts Corner Drain Imp
24-Jul-96
1-Jul-14
1.00
1,166,580
391,553
64,680
326,873
PWTL - Kitts Corner Drain Imp
4-Sep-97
1-Jul-14
1.00
155,544
59,509
8,624
50,885
PWTL.- SeaTac Mall Drain Imp
31-May-00
1-Jul-19
1.00
412,500
176,220
-
16,020
160,20,
PWTL- SeaTac Mall Drain Ira
.14--Au . 0
1-Jul-19
1.00
2,062,500
881,096
90,099
800;J9.
Subtotal PWTFL
4,030.440
I,574.753
-
182,359
1,392.39 .
Com omated Absences
63,582
24,322
8 602
79,302
u total W I pus CompensatedAbsences
6
1, f%
Grand Total All Long -Term Debt
$40,341,990
$22,295.785
$ 14,812,599
$ 4.917,218
$32,191.16,
Citv of Federal Wav /53
OUTSTANDING GENERAL OBLIGATION DEBT AND LONG-TERM LIABILITIES - BY FUND
December 31, 2009
Amount
Beginning
Ending
Originally
Outstanding
Amount
Amount
Outstanding
Due within
Description
Issued
Debt
Issued
Redeemed *
Debt
one year
Governmental Long -Term Debt:
2000 Limited/Valley Comm. PDA
2,551,600
1,428,000
-
175,000
1,253,000
184,000
2003 Limited/Community Center
15,000,000
13,610,000
-
310,000
13,300,000
320,000
2006 GO Bonds/AMC Theatre Site
4,100,000
4,100,000
-
4,100,000
2009 SCORE
14,659,950
-
14,659,950
-
14,659,950
Sub -total Governmental Long -Term Debt
36,311,550
19,138,000
14,659,950
4,585,000
29,212,950
504,000
Compensated Absences
1,519,450
128,327
141,257
1,506,520
98,226
Total Gov Long -Term Debt plus Comp Abs
36,311,550
20,657,450
14,788,277
4,726,257
30,719,470
602,226
Business -Type Long -Term Debt:
Enterprise Funds:
Public Works Trust Fund Loan
4,030,440
1,574,753
-
182,359
1,392,394
182,359
Sub -total Bus -Type Long -Term Debt
4,030,440
1,574,753
-
182,359
1,392,394
182,359
Compensated Absences
63,582
24,322
8,602
79,302
3,268
Total Bus -Type plus Comp Abs LTD
4,030,440
1,638,335
24,322
190,961
1,471,696
185,627
Grand Total All Long -Term Debt
$ 40,341,990
$ 22,295,785 $
14,812,599
$ 4,917,218 $
32,191,166
$ 787,853
* Debt service principal payments in Debt Service Fund include credits of $26,250 from Interlocal agreement with Federal Way Fire District to participate
in capital cost obligations with Valley Communications joint venture with the City of Federal Way.
SCHEDULE OF CHANGES IN LONG-TERM LIABILITIES
Period Ended December 31, 2009
Beginning
Ending
Outstanding Debt
Additions
Reductions
Outstanding Debt
Governmental Activities:
General Obligation Bonds
$ 19,138,000
$ 14,659,950
$ (4,585,000)
$ 29,212,950
Compensated Absences
1,519,450
128,327
(141,257)
1,506,520
Total Governmental Activities
20,657,450
14,788,277
(4,726,257)
30,719,470
Business -Type Activities:
Enterprise Funds
Public Works Trust Fund Loan
1,574,753
-
(182,359)
1,392,394
Compensated Absences
63,582
24,322
(8,602)
79,302
Total Business -Type Activities
1,638,335
24,322
(190,961)
1,471,696
Total All Funds
$ 22,295,785
$ 14.8 t2,599
$ (4,917,218)
S 32,191,166
SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY
As of December 31, 2009
Governmental Activities
Business -Type Activities
G. O. Bonds
PW Trust Fund
Grand Total
Year
Principal
Interest
Principal
Interest
Principal
Interest
P&I
2010
504,000
661,913
182,359
13,924
686,359
675,837
1,362,196
2011
523,000
642,793
182,359
12,100
1 705,359
654,893
1,360,252
2012
542,000
917,777
182,359
10,277
724,359
928,054
1,652,413
2013
900,550
1,188,117
182,359
8,453
1,082,909
1,196,570
2,279,479
2014
922,500
1,156,301
182,359
6,630
1,104,859
1,162,931
2,267,790
2015-2019
4,170,500
5,236,959
480,598
14,418
4,651,098
5,251,377
9,902,475
2020-2024
4,848,850
4,344,556
-
4,848,850
4,344,556
9,193,406
2025-2029
6,069,750
3,172,550
-
6,069,750
3,172,550
9,242,300
2030-2034
6,690,050
1,648,864
-
-
6,690,050
1,648,864
8,338,914
2035-2039
4,041,750
449,151
-
-
4,041,750
449,151
1 4,490,901
Total
$ 29,212,950
$ 19,418,981
$ 1,392,394
$ 65,802
$ 30,605,344
$ 19,484,783
1 $ 50,090,127
City of Federal Way / 54
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 21/2 percent of the value of all taxable property within the City. State law requires all property to be
assessed at 100 percent of its true and fair value. Unlimited tax general obligation debt requires an approving vote of the
people, and any election to validate such general obligation debt must have a voter turnout of at least 40 percent of those who
voted in the last State general election and of those voting, 60 percent must be in the affirmative. The City Council may, by
ordinance, authorize the issuance of limited tax general obligation debt in an amount up to 1.5% of the valuation within the
City without a vote of the people. No combination of limited or unlimited tax debt may exceed 71/2 percent of the valuation.
The debt service on unlimited tax debt is secured by excess property tax levies, whereas the debt service on limited tax debt is
secured by property taxes collected with the City's councilmanic levy.
The City's legally remaining debt capacities as of December 31, 2009 are:
General Government (no vote required) $ 139,967,234
General Government (3/5 majority vote required) 98,816,476
Parks and Open space (3/5 majority vote required) 247,041,191
Utilities (3/5 majority vote required) 247,041,191
Total Capacity 732,866,091
Compensated Absences
The City's liability for accrued vacation and compensatory time balances is recorded in the schedule below. Accrued
compensated absences for proprietary fund employees are recorded as liabilities in those funds expected to incur the related
future expense.
Governmental Activities:
Current portion $ 98,226
Noncurrent portion 1,408,294
Bi Siltas -Tvpe Activities. -
Current portion 3,268
Noncurrent portion 76,034
Total Compensated Absences $ 1,585,822
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, 2009 is $-0- for its tax-exempt general obligation bond issues subject to the
Tax Reform Act issued through that date.
Leases
The City of Federal Way leases office buildings and land which are accounted for as operating leases. Operating leases do not
give rise to property rights or lease obligations, and therefore the results of the lease agreements are not reflected in the City's
capital assets. Total Cost for the leases was $3,300 for the year ended December 31, 2009. The current year lease payments
included the site lease for the City's WiFi Project. Federal Way WiFi project is to provide free broadband Internet service to
Federal Way citizens, businesses and visitors in the downtown business corridor, City parks, Community Center, Dumas Bay
Centre and City Hall. The site lease will expire in July of 2010 and the City currently does not have an extension of the
contract as of year end 2009. The future minimum lease payments for the WiFi Project are as follows:
2010 $ 1,860
$ 1,860
City o Federal W / 55
NOTE 12 — INTERFUND TRANSACTIONS
Interfund transfers for the year ended December 31, 2009 were as follows:
Interfund Transfers
In
Out
Governmental Funds:
General Fund
$ 11,842,867
$ 1,913,215
Street Fund
2,732,272
-
Utility Tax Fund
904,695
17,731,974
Debt Service
2,695,722
606,684
Downtown Redevelopment
500,000
26,083
Transportation
4,000,000
1,995,924
Nonmajor Governmental Funds
2,944,122
3,543,978
Proprietary Funds:
Surface Water Management
2,728
-
Dumas Bay Centre
429,863
231,684
Internal Service Funds
2,728
$ 26,052,269
$ 26,052,269
The following describes the amounts transferred out during 2009:
General Fund:
■ $1,842,786 to Street Fund to subsidize street maintenance and operations.
• $70,000 to Dumas Bay Center from Parks Recreation for marketing plan
• $429 to CDBG for support of Administration
Utility Tax Fund:
• $3,318,164 to General Fund for Proposition 1 for Public Safety and Community Programs Funding
• $914,332 to Federal Way Community Center Debt Service
• $1,126,316 to Arterial Street Fund overlay program
■ $3,700,000 to Transportation CIP for various capital projects
• $952,168 to General Fund for Public Safety Positions
• $500,000 to Downtown Redevelopment CIP Fund for RDA Lift Match.
• $279,300 to General Fund for Celebration Park maintenance & operations
• $337,671 to Street Fund for maintenance and operations on bond projects
• $359,863 to Dumas Bay Centre Fund for Knutzen Family Theatre subsidy
• $121,815 to Street Fund for new street lights maintenance and operations.
• $86,625 to General Fund for Arts Commission
• $26,775 to General Fund for Red, Whites & Blues Festival
• $65,100 to General Fund for new Parks maintenance and operations
• $866,693 to Federal Way Community Center for maintenance/operations and capital reserves
• $4,632,152 to General Fund for ongoing support of operations
• $75,000 to General Fund for Medical Incubator
• $370,000 to Parks CIP for various capital projects
Debt Service Fund:
• $306,684 of Real Estate Excise Tax to Arterial Street Fund overlay program
• $300,000 of Real Estate Excise Tax to Transportation CIP for various projects
Downtown Redevelopment:
• $26,083 to General Fund for support of Economic Development Consultant
Transportation CIP Fund:
• $51,523 to General Fund for Federal Lobbyist
• $129,706 to Debt Service for return of unspent Real Estate Excise tax
0 $910,000 to General Fund for SCORE funding
City of Federal Way / 56
a $904,695 to Utility Tax Fund for closeout of project/unspent utility tax
Proprietary Funds:
• $231,684 from Dumas Bay CIP top Debt Service for return of unspent Real Estate Excise Tax
Internal Service:
• $2,728 to Surface Water Management Operations for Gas Detector funding
Nonmajor Fund:
• $50,000 from Traffic Safety Fund to General Fund for support of Municipal Court
• $450,000 from Traffic Safety Fund to General Fund for support of Police Department
• $330,000 from Traffic Safety Fund to Street Fund for support of Traffic Services
• $224,000 from Path & Trails Fund to Parks CIP for Levy Transfer
• $75,611 from City Facilities CIP to General Fund for project closeouts
$100,000 from City Facilities CIP to Street Fund for Community Preparation Grant
• $50,000 from City Facilities CIP to Community Center for Marketing Plan
a $844,368 from Park CIP to General Fund for closeout projects/unspent capital money
• $1,420,000 from Park CIP to Debt Service for return of unspent Real Estate Excise Tax
Interfund loans for the year ended December 31, 2009 were as follows:
Interfund Loans Receivable Payable
General Fund $ 15,415 $ -
Special Revenue Funds:
Community Development Block Grant - 15,415
Total Interfund Loans $ 15,415 $ 15,415
NOTE 13 — CONTINGENCIES AND LITIGATION
As of December 31, 2009 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.
NOTE 14 — JOINT VENTURE
Vallev Communication Center
The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by
the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila, and Federal
Way which was formally admitted during 2000. The agreement is sanctioned by the provisions and terms of the Interlocal
Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter is automatically
extended for consecutive five year -periods.
The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency
communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing
agencies, which include King County Fire Districts 2, 20, 26, 40, 43, 44, and 47; City of Pacific Police and Fire Departments,
City of Algona Police Department, City of Des Moines Police Department, City of Black Diamond Police and Fire
Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire
Department. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth
conditions of services and rates charged.
City o Federal Way / 57
The allocation of prorated financial participation among the five member cities is the percentage of dispatched calls attributed
to each jurisdiction compared to the total estimated dispatched calls, for the current twelve month period ending December 31.
The percentages are applied to the current approved budget, less revenue from all other sources. Distribution of the current
year net income is based on the same percentages. The 2009 cost distributions for the five member cities are as follows:
Dispatchable
Percent
City
of Total
Kent
_Calls
102,449
27.38%
Renton
79,997
21.38%
Auburn
69,752
18.64%
Tukwila
36,382
9.72%
Federal Way
85,633
22.88%
Total
374,213
100.00%
Valley Com is governed by an Administration Board, composed of the Mayors or designated representatives from the five
participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Administration Board is authorized to establish
bylaws that govern procedures of the Board and Valley Com's general operations for the following functions: 1) Budget
review and recommendations to the legislative bodies of the member cities, and budget adoption after each legislative body
has approved the required financial participation for the ensuing year; 2) Approve appointment and/or discharge of the
Director; 3) Approve personnel policy and make final decisions on all major policy changes; and 4) Review and approves all
contracts.
In addition, an Operating Board was established and consists of two members of each participating City's Public Safety
Departments, including the heads of such departments or their designees. The Operating Board performs the following
functions: 1) Oversees the general operation of Valley Com, and advises and makes recommendations to the Administration
Board; 2) Make recommendations on Director selection; 3) Presents proposed policies and budgets to the Administration
Board; and 4) Reviews disbursements of funds by the Director.
The Director presents a proposed budget to the Operating Board on or before August 15 of each year. Said budget is then
presented to the Administrative Board by September 1 of each year. The Administration Board can make changes to the
proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each member city, in
accordance with the provisions of the interlocal agreement.
In May 1993 Valley Com entered into an agreement with King County to provide joint project management for the acquisition
and installation of 800-MHz emergency radio communications system approved by the voters of King County in conjunction
with a $57 million levy. In August 1993 Valley Com also entered into an Interlocal Cooperation Agreement with the sub-
regions of King County, Seattle, and Eastside Public Safety Communications, which governs the development and installation
of the new 800-MHz emergency radio system. Valley Com now provides emergency communication dispatch services to a
population of approximately 570,000.
Valley Com operates as an enterprise fund and is totally self supporting through the implementation of user fees and the
primary source of revenue is provided by charges for calls for service. The 800-MHz emergency radio communications
system operated by the agreement with King County is operated as a separate enterprise fund, and the Member Cities have no
equity interest in the contributed capital from this system.
The share of equity belonging to the five participating cities is shown below. Liabilities are the responsibility of the five
participating cities in direct proportion to their equity position.
BALANCES IN 2009
Kent
Renton
Auburn
Tukwila
Federal Way
Total
Equity @ January 1, 2009
$ 6,372,363 $
4,454,176 S
4,234,611 $
2,570,406
$ 2,689,657 $
20,321,213
Current Year Decrease
255,808
199,747
174,166
90,843
213,819
934,383
Equity @ December 31, 2009
$ 6.628,171 $
4,653,923 $
4,408,777 $
2,661,249
$ 2,903,476 $
21,255,596
Percent of Equity
31.18%
21.90%
20.74%
12.52%
13.66%
100.00%
Percent of 2008 Distribution
31.36%
21.92%
20.84%
12.65%
13.24%
100.00%
City o Federal Way / 58
During 2000, the Valley Communications Center Development Authority was created to issued $12,758,000 in General
Obligation Bonds to finance construction, equipment, and land for a new facility completed in 2002. Each of the five
participating cities is responsible for one -fifth of the debt obligation, which is $2,551,600. The basic agreement shall not be
terminated until all bonds issued by Valley Communications Center Development Authority have been paid and retired. The
City of Federal Way includes its one -fifth share of the bond issue with its general long-term debt. The balance of the City of
Federal Way's obligation was $1,253,000 at 12/31/2009.
A complete set of financial statements is available from: Valley Communications Center, 27519 108t1i Avenue SE, Kent, WA
98030.
South Correction Entity (SCORE)
The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an
Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments,
the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the
"Interlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009
and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This interlocal
agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated October
1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host
City fulfills all of its obligations as outlined in the Agreement.
SCORE, an governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own,
operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional
services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of
public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member
Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall
be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement.
Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility will be provided by bonds
issued by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development
authority chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755 and secured by the full faith and
credit of the Cities of Auburn, Burien Federal Way, Renton, SeaTac, and Tukwila (the "Owner Cities"). The SCORE PDA
issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following is a
summary of the debt service requirements for the bond issue:
Summary of Debt Service Requirements
Debt Service Schedule
Debt Service Allocation to Owner Cities
35%BABs
Auburn
Burien
Federal Way
Renton
SeaTac
Tukwila
Year
Principal
Interest
Subsidy
Total
31%
4%
18%
36%
3%
8%
2010
$
$ 3,394,191
$ (265,223) $
3,128,968
$ 969,980
$ 125,159
$ 563,214
$ 1,126,428
$ 93,869
$ 250,317
2011
5,155,732
(1,675,089)
3,480,643
1,078,999
139,226
626,516
1,253,031
104,419
278,451
2012
5,155,732
(1,675,089)
3,480,643
1,078,999
139,226
626,516
1,253,031
104,419
278,451
2013
1,915,000
5,126,998
(1,675,089)
5,366,909
1,663,742
214,676
966,044
1,932,087
161,007
429,353
2014
1,950,000
5,066,566
(1,654,975)
5,361,591
1,662,093
214,464
965,086
1,930,173
160,848
428,927
2015-2019
10,750,000
24,045,404
(8,092,315)
26,703,089
8,277,958
1,068,124
4,806,556
9,613,112
801,093
2,136,247
2020-2024
12,905,000
21,102,168
(7,405,227)
26,601,941
8,246,602
1,064,078
4,788,349
9,576,699
798,058
2,128,155
2025-2029
15,675,000
16,833,706
(6,067,796)
26,440,910
8,196,682
1,057,636
4,759,364
9,518,728
793,227
2,115,273
2030-2034
19,265,000
11,158,380
(4,128,483)
26,294,897
8,151,418
1,051,796
4,733,081
9,466,163
788,847
2,103,592
2035-2039
23,775,000
4,064,705
(1,697,914)
26,141,791
8,103,955
1,045,672
4,705,522
9,411,045
784,254
2,091,343
Totals
$ 86,235,000
$ 101,103,582
$ (34,337,200) $
153,001,382
$ 47,430,428
$ 6,120,057
$ 27,540,248
$ 55,080,497
$ 4,590,041
$ 12,240,109
Note: Interest is to be paid from bond proceeds during the construction period (2010-2011).
*Of the $27,540,248 allocation to Federal Way, $14,659,950 is for the principle portion and the remainder is for interest.
City o Federal Wav / 59
The City of Federal Way reports its share of equity interest in the Governmental Activities column within the Government -
wide financial statements under Investment in Joint Venture. The following is condensed (unaudited) financial information as
of December 31, 2009 related to SCORE:
South Correctional Entity (SCORE)
2009 Owner Cities Equity Allocation
Member City
Percent of Equity 2008 Equity Balance 2009 Disbribution
2009 Equity Balance
Auburn
31.00% $ - $ 1,692,471
$ 1,692,471
Burien
4.00% - 218,383
218,383
Federal Way
18.00% - 982,725
982,725
Renton
36.00% - 1,965,450
1,965,450
SeaTac
3.00% - 163,787
163,787
Tukwila
8.00% 436,767
436,767
Total
100.00% $ $ 5,459,583
$ 5,459,583
Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE office, City of Renton, 1055
South Grady Way, Renton, WA 98057.
NOTE 15 — PRIOR PERIOD RESTATEMENT
The following governmental activities have been restated to reflect the retroactive reporting of depreciation in regards to
infrastructure per GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for
State and Local Government.
Beginning
Prior
Adjusted
Ending
Balance
Period
Beginning
Balance
Governmental Activity
1/1/2009
Adjustment
Balance
Additions
Deletions
IV3112009
Capital assets, not being depreciated:
Land
$ 292,669,494
$
$ 292,669,494
$ 1,898,979
$ -
$ 294,568,473
Construction in progress
30,322.365
30,322.365
5,903,115
4,015,550
32,209,930
Total capital assets, not being depreciated:
32' 991,859
322,991.859
7,802,094
4.015,550
326.718,403.
Capital assets, being depreciated
Buildings
16,698,395
-
16,698,395
-
-
16,698,395
Improvements other than buildings
42,995,883
42,995,883
170,252
-
43,166,135
Infrastructure
116,631,203
116,631,203
4,028,527
-
120,659,730
Machinery and equipment
13.336,900
691,488
14,U28.388
752,633
706,365
14,074,656
Total capital assets, being depreciated:
199,662,381
691,488
190,353;$69
4,951,412
706,365
194,598,916
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Infrastructure
Machinery and equipment
Total accumulated depreciation:
Total assets being depreciated, net
Governmental activities capital assets, net
(3,023,610)
-
(3,023,610)
(887,291)
-
(3,910,901)
(8,445,048)
-
(8,445,048)
(2,158,307)
-
(10,603,355)
(20,067,111)
(2,860,257)
(22,927,368)
(3,225,524)
-
(26,152,892)
(9,070,098)
-
(8,07.0.098)
(1,257,705)
534,982
(3,70 821)
(39,6U5,866)
(2,860.257)
(42,466,123)
(7,529,827)
534,982
(49,459.9.68)
150.056,515
(2,168,769)
147,887,746
(2,577,415)
1.241,347
145,138,948
$ 473,048,374 $
(2,168,769) $
470,879,605 $
5,224,679 $
5,256,897
$ 471,917,351
City of Federal Way / 60
NOTE 16 — SUBSEQUENT EVENT
In 2000, the Valley Communication Center Development Authority (ValleyCom) was created to issue $12,758,000 in General
Obligation Bonds to finance construction, equipment, and land for a new emergency radio communication system. Five
participating cities are each responsible for one -fifth of the debt obligation. The current economy has created a favorable
interest rate climate whereby refunding the outstanding bonds would result in potential debt service savings to the Authority
and Member Cities. The outstanding debt at the time of issuance of the refunding bonds will be $5,345,000. The projected
savings from refunding the outstanding bonds is $389,613. The potential savings to the City is $77,923.
City o Federal Wav / 61
Combining Statement — Nonmajor Governmental Funds' Description
For the Year Ended December 31, 2009
Special Revenue Funds
Special Revenue funds are used to account for the proceeds of revenue sources (other than special assessments, expendable
trusts or major capital projects) that are legally restricted to expenditures for specified purposes.
The Arterial Street Fund accounts for the receipt and expenditure of the State -levied motor vehicle fuel tax distributed to the
City in accordance with State R.C.W. 82.36.020. These revenues are to be used for the construction, improvement, chip
sealing, seal -coating, and repair of arterial highways and city streets, or for the payment of related municipal indebtedness.
The Solid Waste/Recycling Fund was established to account for special refuse collection fees used to manage the Solid Waste
and Recycling program.
The Special Contracts/Studies Fund accounts for receipts and disbursements related to special contracts and special projects
where completion will extend beyond the calendar year.
The Hotel/Motel Lodging Tax Fund was established to account for all lodging tax receipts and disbursements related to
tourism promotion and acquisition and/or operation of tourism -related facilities.
The 2% Percent for Arts Fund was established for the purpose of providing funding for arts projects. The funds are to be
used to create a variety of cultural opportunities for citizens and to enhance the cultural environment in the community by
encouraging and promoting the creation and placement of art in public places and the incorporation of art into project design.
The Federal Way Community Center Fund was established to account for the operation of the community center. The fund
is supported by user fees and designated utility tax transfers.
The Traffic Safety Fund was established to account for the penalties and fines collected in criminal traffic violations and
those related to the operation of the Red Light Photo Enforcement Program. Funds collected for traffic safety shall be used
for, but not limited to prevention, education, and enforcement effectors related to traffic safety and compliance with traffic
control devices within the city, including maintenance and operation costs.
The Community Development Block Grant Fund accounts for the receipt and disbursement of federal grant revenue received
through the Department of Housing and Urban Development's Community Development Block Grant Program. Separate
subsidiary records are maintained to administer the individual projects accounted for in this fund.
The Path and Trails Reserve Fund was established in accordance with State law to accumulate unexpended proceeds of the
City's'/2% motor vehicle fuel tax receipts which are restricted in use to the construction and maintenance of paths and trails
within City right-of-way. In August 2007, King County voters approved a new $0.05, six -year, inflation adjusted property tax
lid lift to expand park and recreation opportunities. One cent of the five -cent acquisition levy proceeds will be distributed to
cities for acquisition and development of open space and natural lands and city trail projects that support connections to the
regional trail system.
Capital Projects Funds
The Capital Project Funds account for the acquisition or construction of major capital facilities with the exception of those
facilities financed by proprietary and trust funds. The major sources of revenue for this fund are general obligation bond
proceeds, grants from other agencies, local taxes and contributions from other funds.
The Parks CIP Fund was established to account for receipts and disbursements related to acquisition, design, construction
and any other related parks capital project expenditures.
The City Facilities CIP Fund accounts for receipts and disbursements related to acquisition, design, construction and any
other related municipal facility and community/senior capital project expenditures.
City of Federal Way / 62
CITY OF
Federal 'Way
It's all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
City o f Federal Way_ / 63
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2009
ASSETS
Equity in pooled cash and investments
Retainage in escrow
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
Due to other governments
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Fund balance:
Restricted:
Restricted
Unrestricted:
Committed
TOTAL FUND BALANCES
Special Capital
Revenue Proiects TOTAL
$ 1,867,533 $ 3,520,820 $ 5,388,353
93,795 49,688 143,483
167,927 - 167.927
2,129,255 3,570,508 5,699,763
103,451
22,610 126,061
93,795
49,688 143,483
6,588
- 6,588
16,981
16,981
15,415
- 15,415
106,493
- 106,493
342,723 72,298 415,021
605,920 - 605,920
1,180,612 3,498,210 4,678,822
1.786,532 3,498,210 5,284,742
TOTAL LIABILITIES AND FUND BALANCE $ 2,129,255 $ 3,570,508 $ 5,699,763
City of Federal Way / 64
COMBMNG BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
DECEMBER 31, 2009
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel 2% for the
Street
Recycling
Studies
Lodging Tax Arts
ASSETS
Equity in pooled cash & investments
$593,676
$ 78,784
$271,062
$ 203,164 $ 293
Retainage in escrow
93,795
-
-
- -
Due from other governments
39,824
80,134
-
8,787 -
TOTAL ASSETS
727,295
158,918
271,062
211,951 293
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
121
7,280
-
10,604 -
Retainage payable
93,795
-
Due to other governments
-
- -
Deposits payable
-
- -
Interfund loans payable
-
-
Unearned revenue
-
-
-
TOTAL LIABILITIES
93,916
7,280
10,604
Fund balance:
Restricted:
Restricted
Unrestricted:
- 271,062 201,347 -
Committed 633,379 151,638 - 293
TOTAL FUND BALANCES 633,379 151,638 271,062 201,347 293
TOTAL LIABILITIES & FUND
BALANCE $727,295 $ 158,918 $271,062 $ 211,951 $ 293
Citv o f Federal Wav / 65
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
DECEMBER 31, 2009
(continued)
Federal Way Community Paths and
Community Traffic Development Trails
Center Safety Block Grant Reserve TOTAL
ASSETS
Equity in pooled cash & investments $ 416,691 $ 170,980 $ - $ 132,883 $ 1,867,533
Retainage in escrow - - - - 93,795
Due from other governments - 38,554 628 167,927
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
Due to other governments
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
416,691 170,980 38,554 133,511 2,129,255
46,615 15,692 23,139
- 103,451
- - -
- 93,795
6,588 -
- 6,588
16,981 -
- 16,981
- 15,415
- 15,415
106,493 -
- 106,493
176,677 15,692 38,554 - 342,723
Fund balance:
Restricted:
Restricted - - - 133,511 605,920
Unrestricted:
Committed 240,014 155,288 - - 1,180,612
TOTAL FUND BALANCES 240,014 155,288 - 133,511 1,786,532
TOTAL LIABILITIES & FUND
BALANCE $ 416,691 $ 170,980 $ 38,554 $133,511 $ 2,129,255
City of federal Wav / 66
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
DECEMBER 31, 2009
ASSETS
Equity in pooled cash and investments
Retainage in escrow
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
TOTAL LIABILITIES
Fund balance:
Unrestricted:
Committed
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCE
City
Parks Facilities TOTAL
$ 2,591,003 $ 929,817 $ 3,520,820
- 49,688 49,688
2,591,003 979,505 3,570,508
8,752 13,858
22,610
- 49,688
49,688
8,752 63,546
72,298
2,582,251 915,959 3,498,210
2,582,251 915,959 3,498,210
$ 2,591,003 $ 979,505 $ 3,570,508
'Federal Wav / 67
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Physical environment
Transportation
Economic environment
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
Special Capital
Revenue Projects TOTAL
$ 310,315 $
- $ 310,315
830,704
59,871 890,575
1,673,634
- 1,673,634
849,277
- 849,277
10,363
36,185 46,548
246,704
75,258 321,963
3,920,997 171,314 4,092,312
165,522
- 165,522
448,873
- 448,873
1,942,525
- 1,942,525
151,062
- 151,062
2,103,849
- 2,103,849
6,706
901,214 907,920
4,818,537 901,214 5,719,751
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (897,540) (729,900) (1,627,439)
OTHER FINANCING SOURCES (USES)
Interfund Loan Paid
Transfers in
Transfers out
(65,000) - (65,000)
2,350,122 594,000 2,944,122
(1,054,000) (2,489,978) (3,543,978)
TOTAL OTHER FINANCING SOURCES (USES
1,231,122
(1,895,978)
(664,856)
NET CHANGE IN FUND BALANCES
333,582
(2,625,878)
(2,292,295)
FUND BALANCES - BEGINNING
1,452,950
6,124,088
7,577,037
FUND BALANCES - ENDING
$ 1,786,532 $ 3,498,210 $ 5,284,742
City of Federal Way / 68
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2009
Solid
Special
Hotel/Motel
Arterial
Waste/
Contracts/
Lodging
2% for the
Street
Recycling
Studies
Tax
Arts
REVENUES
Taxes $
-
$ -
$ -
$ 154,148
$
Intergovernmental
505,110
152,533
-
-
Service charges and fees
149,731
272,640
-
-
Fines
-
-
-
-
Miscellaneous:
Interest
3,398
809
1,734
1,038
Other
-
1,210
-
3,078
-
TOTAL REVENUES
658,239
4217.19_1
1,734
158,264
-
EXPENDITURES
Current:
General government
-
-
-
-
Physical environment
-
448,873
-
Transportation
1,940,267
-
-
Economic environment
-
151,062
Culture and recreation
-
-
-
-
Capital outlay
-
-
3,460
-
TOTAL EXPENDITURES
1,940,267
448,873
3,460
151.062
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(1,282,028)
(21,681)
(1,726)
7,202
-
OTHER FINANCING SOURCES (USES)
Intefund Loan Paid
-
-
-
-
Transfers in
1,433,000
-
-
-
-
Transfers out
-
-
-
TOTAL OTHER FINANCING SOURCES
(USES)
1,433,000
-
-
NET CHANGE IN FUND BALANCES
150,972
(21,681)
(1,726)
7,202
-
FUND BALANCES - BEGINNING
482,407
173,319
272,788
194,145
293
FUND BALANCES - ENDING $
633,379
$ 151,638
$271,062
$ 201,347
$ 293
Citv of Federal Wav / 69
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2009
(continued)
Federal Way
Community
Paths and
Community
Traffic
Development
Trails
Center
Safety
Block Grant
Reserve
TOTAL
REVENUES
Taxes
$ -
$
$ -
$ 156,167
$ 310,315
Intergovernmental
-
165,093
7,968
830,704
Service charges and fees
1,251,263
-
-
1,673,634
Fines
-
849,277
-
-
849,277
Miscellaneous:
Interest
753
2,450
-
181
10,363
Other
242,416
-
-
-
246,704
TOTAL REVENUES
1,494,432
851,727
165,093
164,316
3,920,997
EXPENDITURES
Current:
General government
-
-
165,522
-
165,522
Physical environment
-
-
448,873
Transportation
-
2,258
-
-
1,942,525
Economic environment
-
-
151,062
Culture and recreation
2,103,849
-
2,103,849
Capital outlay
3,246
-
-
6,706
TOTAL EXPENDITURES
2,107,095
2,258
165,522
4,818,537
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(612,663)
849,469
(429)
164,316
(897,540)
OTHER FINANCING SOURCES (USES)
Intefund Loan Paid
(65,000)
-
-
-
(65,000)
Transfers in
916,693
429
-
2,350,122
Transfers out
-
(830,000)
-
(224,000)
(1,054,000)
TOTAL OTHER FINANCING SOURCES
(USES)
851,693
(830,000)
429
(224,000)
1,231,122
NET CHANGE IN FUND BALANCES
239,030
19,469
-
(59,684)
333,582
FUND BALANCES - BEGINNING
984
135,819
193,195
1,452,950
FUND BALANCES - ENDING
$ 240,014
$ 155,288
$
$ 133,511
$ 1,786,532
Federal Wav / 70
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For the Year Ended December 31, 2009
REVENUES
Intergovernmental
Miscellaneous:
Interest
Other
TOTAL REVENUES
EXPENDITURES
Capital Outlay
TOTAL EXPENDITURES
City
Parks Facilities TOTAL
$ 3,792 $ 56,079 $ 59,871
27,539
8,646
36,185
35,008
40,250
75,258
66,339
104,975
171,314
385,020 516,194 901,214
385,020 516,194 901,214
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(318,681)
(411,219)
(729,900)
OTHER FINANCING SOURCES (USES)
Transfers in
594,000
-
594,000
Transfers out
(2,264,367)
(225,611)
(2,489,978)
TOTAL OTHER FINANCING SOURCES (USES)
(1,670,367)
(225,611)
(1,895,978)
NET CHANGE IN FUND BALANCES
(1,989,048)
(636,830)
(2,625,878)
FUND BALANCES - BEGINNING
4,571,299
1,552,789
6,124,088
FUND BALANCES - ENDING
$ 2,582,251 $
915,959
$ 3,498,210
Federal Wav / 71
ARTERIAL STREET FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
REVENUES
Intergovernmental
Service charges and fees
Interest
TOTAL REVENUES
EXPENDITURES
Transportation
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 552,000 $
519,000 $
505,110 $
(13,890)
11,000
11,000
149,731
138,731
5,000
5,000
3,398
(1,602)
568,000 535,000 658,239 123,239
1,968,000 2,050,407 1,940,267 110,140
1,968,000 2,050,407 1,940,267 110,140
(1,400,000) (1,515,407) (1,282,028) 233,379
1,400,000 1,433,000 1,433,000 -
TOTAL OTHER FINANCING SOURCES (USES) 1,400,000 1,433,000 1,433,000
NET CHANGE IN FUND BALANCES (82,407) 150,972 233,379
FUND BALANCES - BEGINNING 15,106 482,407 482,407 -
FUND BALANCES - ENDING $ 15,106 $ 400,000 $ 633,379 $ 233,379
City of Federal Way / 72
SOLID WASTE AND RECYCLING FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Intergovernmental $ 138,000 $ 138,000 $ 152,533 $ 14,533
Service charges and fees 270,732 270,732 272,641 1,909
Interest - - 809 809
Other - - 1,210 L210
TOTAL REVENUES 408,732 408,732 427,193 18,461
EXPENDITURES
Utilities and Environment 489,233 489,233 448,872 40,361
TOTAL EXPENDITURES
489,233
489,233
448,872
40,361
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(80,501)
(80,501)
(21,679)
58,822
NET CHANGE IN FUND BALANCES
(80,501)
(80,501)
(21,679)
58,822
FUND BALANCES - BEGINNING
187,555
173,318
173,319
1
FUND BALANCES - ENDING $ 107,054 $ 92,817 $ 151,640 $ 58,823
Citv of Federal Way / 73
HOTEL/MOTEL LODGING TAX FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
REVENUES
Taxes
Interest
Other
TOTAL REVENUES
EXPENDITURES
Utilities and Environment
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
Variance with
Bud eted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 209,470 $ 180,000 $ 154,148 $ (25,852)
6,000 2,500 1,038 (1,462)
- 4,250 3,077 (1,173)
215,470 186,750 158,263 (28,487)
215,470 380,895 151,062 229,833
215,470 380,895 151,062 229,833
- (194,145) 7,201 201,346
(194,145) 7,201 201,346
194,145 194,145
FUND BALANCES - ENDING $ - $ - $ 201,346 $ 201,346
City o Federal Way / 74
FEDERAL WAY COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
REVENUES
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Culture and recreation
Capital Outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Interfund Loan Paid
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 1,375,407 $ 1,264,093 $ 1,251,263 $ (12,830)
- - 753 753
263,000 238,000 242,416 4,416
1,638,407 1,502,093 1,494,432 (7,661)
2,053,702 2,106,859 2,103,849 3,010
13,000 - 3,246 (3,246)
2,066,702 2,106,859 2,107,095 (236)
428,295) (604,766) (612,663) 7,897
990,004 916,693 916,693 -
- (65,000) (65,000) -
TOTAL OTHER FINANCING SOURCES (USES)
990,004
851,693
851,693
NET CHANGE IN FUND BALANCES
561,709
246,927
239,030 (7,897)
FUND BALANCES - BEGINNING
111,483
984
984 -
FUND BALANCES - ENDING $ 673,192 $ 247,911 $ 240,014 $ (7,897)
Citv o f Federal Wav / 75
TRAFFIC SAFETY FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
REVENUES
Fines and Forfeitures
Interest
TOTAL REVENUES
EXPENDITURES
Security of Persons and Property
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Variance with
Budzeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ $ 830,000 $ 849,277 $ 19,277
2,450 2,450
830,000 851,727 21,727
50,000 2,258 47,742
50,000 2,258 47,742
- 780,000 849,469 69,469
- (830,000) (830,000)
TOTAL OTHER FINANCING SOURCES (USES) - (830,000) (830,000)
NET CHANGE IN FUND BALANCES (50,000) 19,469 69,469
FUND BALANCES - BEGINNING - 135,819 135,819 -
FUND BALANCES - ENDING $ - $ 85,819 $ 155,288 $ 69,469
Federal Wav / 76
PATHS AND TRAILS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
REVENUES
Taxes
Intergovernmental
Interest
TOTAL REVENUES
EXPENDITURES
General government
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Variance with
Budzeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 149,205 $
149,205 $
156,167 $
6,962
8,715
8,215
7,967
(248)
500
500
181
(319)
158,420 157,920 164,315 6,395
158,420 157,920 164,315 6,395
(224,000) (224,000) (224,000) -
TOTAL OTHER FINANCING SOURCES (USES)
(224,000)
(224,000)
(224,000)
NET CHANGE IN FUND BALANCES
(65,580)
(66,080)
(59,685) 6,395
FUND BALANCES - BEGINNING
191,585
193,195
193,195 -
FUND BALANCES - ENDING $ 126,005 $ 127,115 $ 133,510 $ 6,395
City o Federal Wav / 77
Budget and Actual — Debt Service Fund Description
For the Year Ended December 31, 2009
The Debt Service Fund accounts for the accumulation of resources for the payment of general obligation and special
assessment bond principal, interest and related costs. Revenues for this fund consist of the City's real estate excise tax,
transfers from the Utility Tax Fund, and/or other revenues designated by the City Council.
ON of Federal Wav / 78
BALANCESHEET
DEBT SERVICE FUND
DECEMBER 31, 2009
Debt
Service
ASSETS
Equity in pooled cash & investments $ 4,225,463
Receivables (net):
Taxes 127,236
TOTAL ASSETS 4,352,699
LIABILITIES AND FUND BALANCES
Liabilities:
Deferred revenue 188,220
TOTAL LIABILITIES 188,220
Fund balance:
Restricted:
Restricted 4,164,479
TOTAL FUND BALANCES 4,164,479
TOTAL LIABILITIES AND
FUND BALANCE $ 4,352,699
City o Federal Wav / 79
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For the Year Ended December 31, 2009
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Ne¢ative)
REVENUES
Taxes
$ 2,800,000 $ 1,175,000
$ 1,428,985
$ 253,985
Interest
60,000 60,000
16,076
(43,924)
TOTAL REVENUES
2,960,000 1,235,00.0
IA45.061
210,061
EXPENDITURES
Debt Service:
Principal
458,750
458,750
458,750
-
Interest
744,635
744,635
674,537
70,098
TOTAL EXPENDITURES
1,203,385
1,203,385
1,133,287
70,098
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
1,656,615
31,615
311.774
280,159
OTHER FINANCING SOURCES (USES)
Transfers in
914,332
2,695,722
2,695,722
-
Transfers out
(3,358,694)
(606,684)
(606,684)
TOTAL OTHER FINANCING SOURCES (USES)
(2,444,362)
2,089,038
2.089.038
NET CHANGE IN FUND BALANCES
(787,747)
2,120,653
2,400,812
280,159
FUND BALANCES - BEGINNING
1,927,159
1,763,667
1,763,667
-
FUND BALANCES - ENDING $
1,139,412 $
3,884,320 $
4,164,479 $
280,159
Citv of Federal Way / 80
4k
CITY OF
Federal Way
It"s all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
City of Federal Way / 81
Combining Statement — Internal Service Fund's Description
For the Year Ended December 31, 2009
Internal Service Funds
Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to
other departments or agencies of a government, or to other governments, on a cost -reimbursement
basis.
The Risk Management Fund accounts for the City's risk financing activities established to minimize adverse effects of losses
associated with property and casualty, medical and dental, unemployment and worker's compensation claims. Both risk
control (to minimize the losses that strike and organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is currently self -insuring only State Unemployment Compensation.
Related premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability. The City is also currently recovering
costs and building reserves for general liability including property, casualty, errors and omissions and fidelity coverage.
The Information Systems Fund was established to account for all costs associated with data processing, telecommunications
and the Geographical Information System (GIS). This fund will own and depreciate all non-proprietary fund assets related to
these functions, and will charge equipment/software users for both maintenance/operating costs and equipment replacement
charges based on depreciation schedules.
The Support Services Fund will account for duplication, graphics and other general support services provided to departments
and funds throughout the City.
The Fleet and Equipment Fund accounts for the cost of maintaining City vehicles and other motorized equipment. Rates
charged to user departments are based on the full cost of maintaining equipment items, including the recovery of related
depreciation expense.
The Buildings and Furnishings Fund accounts for all costs associated with the operation and maintenance of specified City
buildings. City building facilities and furnishings will be owned by this Fund, and both maintenance/operating costs and
depreciation recovery will be charged City departments and funds.
City of Federal Way / 82
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET ASSETS
December 31, 2009
Risk Information Support Fleet and Buildings and
Management Systems Services Equipment Furnishings TOTAL
ASSETS
Current assets:
Equity in pooled cash & investments $ 5,491,107 $ 3,212,851 $ 296,740 $ 4,321,399 $ 1,228,609 $ 14,550,706
Prepaid postage - - 5,000 - - 5,000
TOTAL CURRENT ASSETS 5,491,107 3,212,851 301,740 4,321,399 1,228,609 14,555,706
Noncurrent assets
Capital assets:
Buildings / Structures - - - - 16,193,560 16,193,560
Machinery/fumiture/equipment - 6,031,883 264,064 7,586,217 8,492 13,890,656
Less accumulated depreciation - (4,432,734) (203,774) (3,960,478) (3,546,429) (12,143,415)
TOTAL NONCURRENT ASSETS - 1,599,149 60,290 3,625,739 12,655,623 17,940,801
TOTAL ASSETS 5,491,107 4,812,000 362,030 7,947,138 13,884,232 32,496,507
LIABILITIES
Current liabilities:
Vouchers/payroll payable 153,534 129,831 7,696 27,305 23,380 341,746
TOTAL CURRENT LIABILITIES 153,534 129,831 7,696 27,305 23,380 341,746
Long-term liabilities:
Compensated absences payable - 67,484 2,968 466 70,918
TOTAL LONG TERM LIABILITIES - 67,484 - 2,968 466 70,918
TOTAL LIABILITIES 153,534 197,315 7,696 30,273 23,846 412,664
NET ASSETS
Invested in capital assets 1,599,149 60,290 3,625,739 12,655,623 17,940,801
Unrestricted 5,337,573 3,015,536 294,044 4,291,126 1,204,763 14,143,042
TOTAL NET ASSETS $ 5,337,573 $ 4,614,685 $ 354,334 $ 7,916,865 $ 13,860,386 $ 32,083,844
City o Federal Wav / 83
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET ASSETS
For the Year Ended December 31, 2009
Risk
Information
Support
Fleet and
Buildings and
Management
Systems
Services
Equipment
Furnishings
TOTAL
OPERATING REVENUES:
Service charges and fees
$ 602,066
$ 1,919,250
$ 168,763
$ 1,838,831
$ 403,065
$ 4,931,975
Miscellaneous
112,260
36,935
4,400
-
9,854
163,449
TOTAL OPERATING REVENUES
714,326
1,956,185
173,163
1,838,831
412,919
5,095,424
OPERATING EXPENSES:
Personal services
- 984,767
- 37,139
22,310
1,044,216
Materials and supplies
- 40,765
20,608 362,750
23,354
447,477
Services and charges
32,148 494,639
121,131 286,171
340,366
1,274,455
Intergovernmental
- 126,036
- 26
-
126,062
Insurance
387,008 -
- -
-
387,008
Claims
332,735 -
- -
-
332,735
Depreciation
- 410,707
24,101 822,892
862,049
2,119,749
TOTAL OPERATING EXPENSES
751,891
2,056,914
165,840
1,508,978
1,248,079
5,731,702
OPERATING INCOME (LOSS)
(37,565)
(100,729)
7,323
329,853
(835,160)
(636,278)
NON -OPERATING REVENUES (EXPENSES)
Interest income
20,268
20,013
1,824
23,401
7,588
73,094
Gains (losses) from disposal of capital assets
-
(1,655)
-
(22,975)
(24,630)
TOTAL NON -OPERATING
REVENUES NET OF EXPENSES
20,268
18,358
1,824
426
7,588
48,464
INCOME (LOSS) BEFORE
CONTRIBUTIONS & TRANSFERS (17,297) (82,371) 9,147 330,279 (827,572) (587,814)
Transfers out - - - (2,728) - (2,728)
Capital contributions - 73,709 - 883,231 - 956,940
CHANGE IN NET ASSETS (17,297) (8,662) 9,147 1,210,782 (827,572) 366,398
TOTAL NET ASSETS, BEGINNING 5,354,870 4,623,348 345,187 6,706,083 14,687,958 31,717,446
TOTAL NET ASSETS, ENDING $ 5,337,573 $ 4,614,686 $ 354,334 $ 7,916,865 $ 13,860,386 $ 32,083,844
City o Federal Way / 84
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
Risk Information Support
Management Systems Services
CASH FLOWS FROM OPERATING ACTIVITIES -
Cash received from users
$ 602,066 $
1,920,100 $
168,763
Cash payments to claimants
(331,835)
-
-
Cash payments to suppliers for goods/services
77,487
(537,386)
(143,828)
Cash payments to employees
-
(985,745)
-
Cash payments for other services/charges
(387,008)
-
-
Cash payments to other governments for goods and services
-
(124,779)
-
Other operating receipts
112,260
36,935
4,400
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
72,970
309,125
29,335
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating transfers out - NET CASH PROVIDED BY NONCAPITAL FINANCING - - -
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress - (285,552) -
Proceeds from the sale of capital assets - NET CASH USED FOR CAPITAL
AND CAPITAL -RELATED FINANCING ACTIVITIES - (285,552) -
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
20,268
20,013
1,824
NET CASH PROVIDED BY INVESTING ACTIVITES
20,268
20,013
1,824
NET INCREASE (DECREASE) IN LASH AND LASH EQUIVALENTS
93,238
43,58b
31,159
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 5,397,869 3,169,265 265,581
CASH AND CASH EQUIVALENTS AT END OF YEAR 5,491,107 3,212,851 296,740
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss)
(37,565)
(100,729)
7,323
Adjustments to reconcile operating income to
net cash provided (used) by operating activities:
Depreciation expense
-
410,707
24,101
Increase/(decrease) in vouchers/accounts payable
110,535
(724)
(2,089)'
Increase/(decrease) in accrued payroll/compensated absences payable
-
(978)
TOTAL ADJUSTMENTS
110,535
409,005
22,012
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
$ 72,970 $
308,276 $
29,335
Non -cash investing, capital, and financing activities:
Other contributions of capital assets
$
73,709
City o Federal Wav / 85
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
(continued)
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments for other services/charges
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating transfers out
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL
AND CAPITAL -RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITES
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income to
net cash provided (used) by operating activities:
Depreciation expense
Increase/(decrease)in vouchers/accounts payable
Increase/(decrease) in accrued payroll/compensated absences payable
TOTAL ADJUSTMENTS
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Fleet and Buildings and
Equipment Furnishings TOTAL
$ 1,837,981 $
403,065
$ 4,931,975
-
-
(331,835)
(670,658)
(369,451)
(1,643,836)
(37,286)
(22,935)
(1,045,966)
-
-
(387,008)
(26)
-
(124,805)
-
9,854
163,449
1,130,011 20,533 1,561,974
(2,728) - (2,728)
(2,728) (2,728)
(250,046) (535,598)
26,626 - 26,626
(223,420) (508,972)
23,401 7,588 73,094
23,401 7,588 73,094
927,264 28,121 1,123,368
3,394,135 1,200,488 13,427,338
4,321,399 1,228,609 14,550,706
329,853 (835,160) (636,278)
822,892
862,049
2,119,749
(71,905)
(5,731)
30,086
(147)
(625)
(1,750)
750,840
855,693
2,148,085
$ 1,080,693 $ 20,533 $ 1,511,807
s
Non -cash investing, capital, and financing activities:
Other contributions of capital assets $ 883,231 $ 956,940
Citv o f Federal Wav / 86
CITY OF
Federal Way
It's all within reach
rr:ff.YvT91;m y0:3a11QIORO0cM1.11ON&.]W. M11
Citv of Federal Wav / 87
CAPITAL ASSETS USED IN THE
OPERATION
OF GOVERNMENTAL FUNDS
Citv of Federal Way / 88
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
December 31, 2009
GOVERNMENTAL FUNDS CAPITAL ASSETS
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS
INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY SOURCE:
General Fund
Special Revenue Funds
Capital Project Funds
Donations
TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS
2009 2008
$ 294,568,474
$ 292,669,494
504,835
504,835
43,166,135
42,995,993
184,000
302,296
120, 659,730
104, 660,450
32,209,930
30,322,365
491,293,104 471,455,323
125, 244, 871
125, 244, 871
252,375,395
252,375,395
99, 808,431
80,364,552
13, 864,407
13,470, 505
$ 491,293,104 $ 471,455,323
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net assets.
City o Federal Way / 89
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2009
Improvements
Machinery
Construction
Other than
and
in
Total
Function and Activity
Land
Buildings Buildings
Equipment
Infrastructure
Progress
2009
GENERAL GOVERNMENT
Miscellaneous general government $
15,825,651
$ - $ 19,973
$ 184,000
$ 5,959,317
$ 864,517 $
22,853,458
Total General Government:
15,825,651
- 19,973
184,000
5,959,317
864,517
22,853,458
CULTURE AND RECREATION
Culture and Recreation
115,626,390
504,835 43,146,162
-
94,474,128
2,786,531
256,538,046
Total Culture and Recreation:
115,626,390
504,835 43,146,162
-
94,474,128
2,786,531
256,538,046
TRANSPORTATION
Streets and Traffic
163,116,432
- -
-
20,226,285
28,558,882
211,901,599
Total Transportation:
163,116,432
-
-
20,226,285
28,558,882
211,901,599
Total General Fixed Asset by Function: $ 294,568,474 $ 504.835 $ 43,166,135 $ 184,000 $ 120,659,730 $ 32,209,930 $ 491,293,104
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to governmental funds. Accordingly,
the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of the internal service
funds are included as governmental activities in the statement of net assets.
City o f Federal Wav / 90
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2009
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
CULTURE AND RECREATION
TOTAL CULTURE AND RECREATION
TRANSPORTATION
Streets and traffic
TOTAL TRANSPORTATION
Governmental Governmental
Funds Funds
Capital Assets Capital Assets
1/1/2009 Additions Deductions 12/31/2009
$ 22,673,815 $ 297,939 $ 118,296 $ 22,853,458
22,673,815 297,939 118,296 22,853,458
255,890,817 647,229 - 256,538,046
255,890,817 647,229 - 256,538,046
192,890,691 19,010,908 - 211,901,599
192,890,691 19,010,908 - 211,901,599
TOTAL GENERAL FIXED ASSETS $ 471,455,323 $ 19,956,076 $ 118,296 $ 491,293,104
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net assets.
City o f federal Way / 91
Statistical Section
The statistical section presents detailed information as a context for understanding what the information in the financial
statements and note disclosures say about the City's overall financial health. The following are the five categories of
information presented in this section.
Financial Trends — These schedules contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity — These schedules contain information to help the reader assess the City's most significant local revenue
sources, property tax and sales tax.
Debt Capacity — These schedules present information to help the reader assess the affordability of the City's current levels of
outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information — These schedules offer demographic and economic indicators to help the reader
understand the environment within which the City's financial activities take place.
Operating Information — These schedules contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the city provides and the activities it performs.
NET ASSETS BY COMPONENT
Last Seven Fiscal Years
2003 2004 2005 2006 2007 2008
Governmental activities
2009
Invested in capital assets, net of related debt $ 43,162,298 $ 60,746,134 $ 70,138,350 $ 93,835,163 $ 439,127J22 $ 456,600,030 $ 442,704,401
Restricted 37,806,176 37,262,541 45,017,742 38,359,454 32,269,512 28,434,066 27,476,530
Unrestricted 15,686,213 11,052,383 13,292,837 15,051,966 23765L674 24,773,913 44,282,822
Total governmental activities net assets
Business -type activities
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total business -type activities net assets
Primary government
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total primary government net assets
Source: City of Federal Way Finance
96,654,687 109,061,058 128,448,929 147,246,583 495,048308 509,808,009 514,463,753
39,559,494
41,735,500
42,294,741
43,697,633
45,264.105
50,494,590
50,578,649
14,148
20,289
18,880
26,439
15,777
42,558
16,366
7,794,729
7,032,804
7,206,807
7,467,417
6,550.179
5,071,617
5,115,275
47,3158,371
48,788,593
49,520,428
51,191,489
51,830.061
55,608,765
55,710,290
82,721,792 102,481,634 112,433,091 137,532,796 484,391,227 507,094,620 493,283,050
37,820,324 37,282,830 45,036,622 38,385,893 32,285,289 28,476,624 27,492,896
23,480,942 18,085,187 20,499,644 22,519,383 30,20L853 29,845,530 49,398,097
$ 144,023,058 $ 157,849,651 $ 177,969,357 $ 198,438,072 $ 546,878.369 $ 565,416,774 $ 570,174,043
Note: All amounts are reported on the accrual basis.
Amounts presented from year of implementation of GAS13-34 (2003) forward.
b
ti
City o f Federal Way / 93
Expenses
Governmental activities:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health and human svcs
Culture and recreation
Interest on long-term debt
Total governmental activities expenses
Business -type activities:
Surface Water Mgmt
Dumas Bay Center
Total business -type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:
Charges for services
General Government
Security of Persons & Property
Transportation
Physical Environment
Economic Environment
Health
Culture & Recreation
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities:
Charges for services
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Net(Expense)/Revenue
Governmental activities
Business -type activities
CHANGES IN NET ASSETS
Last Seven Fiscal Years
2003 2004 2005 2006 2007 2008 2009
$ 5,601,311
$ 6,304,256
$ 5,539,682
$ 4,364,710
$ 4,506,800
$5,606,797
$4,566,457
15,597,612
17,374,845
16,825,123
19,906,722
23,107,683
24,745,284
26,341,614
5,389,975
4,098,790
5,451,324
5,628,100
9,986,067
7,891,298
9,448,397
351,023
295,537
322,151
313,388
336,588
370,718
450,914
2,923,756
2,953,073
3,095,391
3,162,089
3,319,955
3,382,572
3,560,620
607,199
683,804
631,133
622,761
684,984
705,976
776,854
4,455,865
4,914,348
4,789,920
5,172,663
6,506,137
6,955,442
8,089,242
1,683,028
1,764,077
1,541,930
1,420,691
1,122,358
901,161
811,124
36,609,769
38,388,730
38,196,654
40,591,124
49,570,572
50,559,248
54,045,222
3,380,690 3,282,427 2,995,074 3,142,613 3,454,193 4,060,440 3,345,027
935.422 979.970 919.515 925.825 980.588 1.045.250 984.103
4,316,112 4.162,297 3.814,589 4.068.438 4,434.781 5.105,690 4,329,I30
1,082,088
1,509,973
1,372,270
1,052,641
3,510,339
$2,313,939
$873,258
3,012,210
4,203,315
4,780,082
4,800,920
2,110,164
2,309,406
5,037,388
1,041,261
1,453,002
1,351,596
1,357,333
3,119,637
513,340
1,806,846
67,812
94,627
88,222
75,580
-
262,847
86,230
564,825
788,171
847,686
762,603
1,009,707
1,962,624
680,908
117,302
163,686
172,838
150,192
-
-
148,579
860,805
1,201,189
1,322,962
1,247,495
531,041
2,561,685
1,546,931
360,000
32,415
1,228,979
1,512,394
22,858
1,538,476
2,172,168
10,069,756
7,214,776
4,250,635
5,973,071
11,457,030
8,933,154
8,452,149
17,176,059
16,661,154
15,415,270
16,932,229
21,760,776
20,395,471
20,804,457
$4,041,063 $ 4,249,020 4,100,623 4,130,179 3,667,168 4,473,453 4,183,012
168,555 535,645 - 1,113,010 632,185 -
757,578 478,030 - 222,474 -
n nAC inG G nAG cnC .1 1nn Gnl C nA3 1On A Cif1 OIY7 .1 .1111 .1G7 :I 102 Al
(19,433,710) (21,727,576) (22,781,384) (23,658,895) (27,809,796) (30,163,777) (33,240,765)
651,084 1,100,398 286,034 1,174,751 87,046 (632,237) (146,118)
General Revenues and Other Changes in
Net Assets
Governmental activities:
Taxes
Sales tax
12,148,779
12,194,264
13,123,518
14,363,541
15,194,007
14,195,800
12,327,191
Utility tax
7,072,758
7,554,580
8,292,520
9,043,449
12,796,461
13,469,136
13,549,472
Property tax
8,200,955
8,121,088
8,442,172
8,892,558
9,059,734
9,397,456
9,653,537
Real estate excise tax
2,851,866
3,078,898
4,695,984
5,499,911
4,898,537
2,590,310
1,428,985
Gambling Tax
1,767,545
1,443,150
1,501,065
1,363,468
1,489,952
1,259,783
1,127,203
Hotel/Motel Tax
138,975
142,030
158,117
175,219
191,691
188,833
154,148
Leasehold tax
1,929
19,292
2,026
4,592
7,254
5,712
4,999
Other
3,879,863
1,717,362
6,080,222
3,221,392
6,971,413
6,502,869
2,020,751
Transfers
-
(203,190)
(126,369)
(107,581)
(185,495)
123,518
(200,907)
Total governmental activities
36,062,670
34,067,474
42,169,255
42,456,549
50,423,554
47,733,417
40,065,379
Business -type activities
Other
141,980
116,634
319,432
388,729
366,031
3,447,458
46,736
Transfers
-
203,190
126,369
107,581
185,495
(123,518)
200,907
Total business -type activities
141.990
319,824
445.801
496,310
551,526
3,323,949
247,643
Total primary government
$ 361204,650
$ 34,187 298
$ 42,6 15.056
$ 42.952.959
$ 5.0,975,080
$ 51,057.357.
$ 40,313,022
Change in Net Assets
Governmental activities
$ 16,628,960
$ 12,339,898
$ 19,387,871
$ 18,797,654
$ 22,613,758
$ 17,569,640
$ 6,824,613
Business -type activities
793,064
1,420,222
731,835
1,671,061
638,572
2,691,703
101,525
Prior Period Adjustment
(1)
-
-
-
-
(1,722,939)
(2,168,769)
Total primary government
$ 17,422,023
$ 13,760,120
$ 20,119,706
$ 20,468,715
$ 23,252,330
$ 18,538,404
$ 4,757,370
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Amounts presented from year of implementation of GASB-34 (2003) forward.
City of Federal Way / 94
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General fund
Reserved
Unreserved
Total general fund
All Other Governmental Funds
Reserved
Unreserved, reported in:
Special revenue funds
Capital projects funds
Debt service funds
Total all other governmental funds
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Seven Fiscal Years
2003 2004 2005 2006 2007 2008 2009
$ 430,890
$ 187,011
$ 14,510
$ 278,778
$ 125,184
$ 418,207
$ 106,728
7,578,723
2,658,031
4,522,705
6,492,057
7,783,868
5,511,440
8,138,468
$ 8,009,613
$ 2,845,042
4,537,215
6,770,835
7,909,052
5,929,647
8,245,196
$ 278,130 $ 180,825 147,901 194,463 2,323,184 1,763,667 4,770,399
1,578,817 1,740,228 1,652,622 2,772,153 4,392,623 7,505,799 4,311,238
33,324,511 32,542,775 39,805,812 31,863,330 30,054,670 26,252,192 22,934,356
2,599,653 2,826,228 3,195,705 6,217,346 - - -
$ 37,781,111 $ 37,290,056 $ 44,802,040 $ 41,047,292 $ 36,770,477 $ 35,521,658 $ 32,015,993
Source: City of Federal Way Finance
Note: Amounts presented from year of implementation of GASB-34 (2003) forward.
c�
City of Federal Way / 96
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Seven Fiscal Years
Revenues
Taxes
Licenses, fees and permits
Intergovernmental
Charges for services
Development Fees
Fines and Forfeitures
Investment earnings
Other revenues
Total revenues
Expenditures
General government
Security of persons and property
Transportation
Physical Environment
Economic Environment
Health
Culture and Recreation
Debt Service
Principal
Interest/fiscal charges/admin fei
Capital Outlay
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources (Uses)
GO bond proceeds
Sale of capital assets
Transfers in
Transfers out
2003 2004 2005 2006 2007 2008 2009
$32,022,334 $ 32,553,302 $ 36,310,754 $ 39,334,751 $ 43,584,824 $ 41,071,781 $ 38,192,852
1,000,250 1,235,039 2,247,651 2,089,844 2,939,328 2,195,068 2,163,984
12,313,459 10,111,537 5,479,614 8,047,243 15,494,887 10,520,570 11,127,718
3,965,992 4,200,528 4,927,163 6,355,262 6,327,552 6,246,207 5,573,647
2,565,215 3,167,605 2,040,378 196,060 - - -
887,071 810,793 720,464 805,598 1,005,293 1,433,628 2,200,092
701,311 744,435 1,557,935 2,447,996 2,463,670 1,274,955 271,600
1,093,109 751,025 1,065,664 717,922 630,966 875,389 1,599,207
54,548,741 53,574,264 54,349,623 59,994,676 72,446,520 63,617,598 61,129,100
5,492,123
6,107,564
5,462,633
3,944,288
4,364,750
5,197,032
4,518,821
15,463,833
16,982,135
16,988,412
19,909,858
24,183,913
25,470,722
27,051,814
5,358,543
4,788,954
5,080,577
5,373,983
6,631,030
6,634,548
6,165,540
351,456
289,921
322,151
313,388
336,588
370,718
448,873
2,883,079
2,944,584
3,119,831
3,055,426
3,326,986
3,344,987
3,504,767
603,184
679,655
634,061
613,800
677,536
700,876
772,151
3,507,392
3,927,933
3,859,465
4,108,813
5,300,455
5,871,288
5,845,676
14,159,881
3,768,044
2,933,231
2,197,357
9,953,505
440,900
4,558,750
1,703,165
1,764,077
1,518,384
1,420,691
1,122,358
901,161
811,124
22,779,620
17,609,080
8,228,486
24,412,303
19,162,067
18,037,109
8,443,523
72,302,276
58,861,947
48,147,231
65,349,907
75,059,188
66,969,341
62,121,039
(17,753,535) (5,287,683) 6,202,392 (5,355,231) (2,612,668) (3,351,743) (991,939)
21,168,599 - - 4,100,000 - -
209,527 - 3,618,512 20,000 (23,786) - -
21,037,023 15,615,639 15,650,064 13,231,785 22,688,136 16,232,916 25,619,678
(20,390,141) (15,983,582) (16,266,811) (13,517,681) (23,190,280) (16,109,398) (25,817,857)
Total other financing sources (uses) 2_ 0,025,008 (367,943) 3,001,765 3,834,104 (525,930) L23,518 (198.179)
Net change in fund balances $ 4,271,473 $ (5,655,626) $ 9,204,157 $ (1,521,127) $ (3,138,598) $ (3,228,225) $ (1,190,118)
Debt service as a percentage of
noncapital expenditures 47.1% 15.5% 12.6% 9.7% 24.7% 2.8% 11.1%
Source: City of Federal Way Finance
Note: Amounts presented from year of implementation of GASB-34 (2003) forward.
Accommodation and Food Svcs
Admin, Supp, Remed Svcs
Agriculture, Forestry, Fishing
Arts, Entertain, Recreation
Company Management
Construction
Educational Services
Finance and Insurance
Health Care Social Assistance
Information
Manufacturing
Mining
Other Services
Prof, Sci, Technical Svcs
Public Administration
Real Estate, Rental, Leasing
Retail Trade
Transportation and Warehousing
Unknown
Utilities
Wholesale Trade
TAXABLE SALES BY CATEGORY
Last Ten Fiscal Years
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
120,856,357
120,886,818
123,542,545
125,236,574
131,057,207
139,256,190
147,464,635
170,754,055
172,336,596
161,656,544
20,828,796
28,112,139
31,635,709
32,292,668
31,855,764
32,521,639
23,796,653
25,202,780
23,285,051
23,989,198
236,350
190,917
235,350
116,481
186,395
279,688
196,678
563,627
174,571
99,907
16,068,413
22,102,073
34,817,467
29,441,915
28,601,771
33,416,416
19,364,073
15,898,253
17,769,325
16,244,594
(3,000)
102,851
32,028
34,334
4,451
35,853
221,233
501,671
127,477
28,870
127,375,804
144,069,063
143,569,453
116,671,439
132,186,499
191,476,403
256,655,702
213,216,740
147,652,627
105,372,864
2,431,393
3,612,600
2,312,275
2,329,638
2,232,256
2,081,425
2,170,754
2,516,022
2,487,015
3,054,167
11,327,639
11,293,995
14,314,466
21,334,384
13,943,553
12,855,387
13,752,698
12,795,964
10,426,093
7,921,100
3,255,872
3,326,219
5,131,421
5,425,838
4,796,427
4,080,451
6,250,812
6,193,370
5,342,504
5,612,490
46,983,251
54,185,996
65,713,358
64,966,268
69,861,905
71,936,131
63,746,061
63,218,235
70,578,046
62,112,491
15,881,203
12,835,977
18,560,838
13,779,409
12,333,001
18,549,951
19,845,265
32,336,606
25,872,050
24,193,672
1,323,061
1,010,226
2,213,631
1,736,743
1,520,579
2,098,237
1,963,909
1,994,597
1,699,300
1,341,478
29,519,423
32,359,162
31,603,126
31,432,796
32,464,044
32,453,303
34,861,423
38,713,357
38,169,579
37,317,191
23,859,790
34,662,731
24,132,269
23,276,337
23,593,203
34,278,076
38,463,408
45,110,196
36,310,677
27,410,760
16,397,768
15,719,168
16,850,457
18,052,898
16,067,380
17,388,331
18,520,714
19,370,515
14,858,844
11,456,288
28,750,480
20,039,967
21,067,387
22,350,732
23,194,989
28,846,250
29,046,116
30,541,290
26,728,671
24,648,187
692,310,412
676,897,027
670,932,962
673,820,056
667,413,427
684,657,717
734,665,452
799,193,903
753,483,183
692,296,559
1,156,593
1,173,347
1,204,127
3,473,820
1,308,585
1,281,763
1,253,647
1,183,415
1,251,568
1,246,300
662,708
540,302
1,738,761
812,357
1,618,555
1,633,108
1,032,221
1,249,062
860,373
318,381
324,366
340,861
587,892
945,172
470,300
419,820
349,874
-115,973
1,349,464
541,307
59,104,189
56,794,205
53,992,471
55,923,920
60,505,731
55,771,629
56,900,436
66,306,761
67,553,891
45,478,266
Total $1,218,650,866
$ 1,240,255,646
$1,264,187,991
$ 1,243,453,779
$1,255,216,019
$1,365,317,769
$1,470,521,763 $
1,546,744,447
$1,418,316,906 $
1,252,340,615
City direct sale tax rate 0.085%
Source: City of Federal Way Finance
M
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ASSESSED APM ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY*
Last Ten Fiscal Years
Total City Percent
Fiscal Personal State Public Direct Increase
Year Real Property Property Service Property Total Tax Rate (Decrease)
2000
4,932,362,526
187,812,046
93,021,743
5,213,196,315
1.49
9.7%
2001
5,322,237,420
226,854,474
101,339,376
5,650,431,270
1.41
8.4%
2002
5,604,164,978
227,961,155
107,761,209
5,939,887,342
1.38
5.1%
2003
5,992,899,727
193,519,890
105,924,009
6,292,343,626
1.34
5.9%
2004
6,218,643,830
181,366,723
102,350,559
6,502,361,112
1.30
3.3%
2005
6,937,653,592
225,118,781
89,220,328
7,251,992,701
1.27
11.5%
2006
7,689,395,358
235,157,554
87,062,687
8,011,615,599
1.22
10.5%
2007
8,644,609,276
262,048,562
103,698,540
9,010,356,378
1.14
12.5%
2008
9,527,060,585
257,152,954
97,434,092
9,881,647,631
1.04
9.7%
2009
8,294,282,076
236,445,351
92,287,195
8,623,014,622
0.97
-12.7%
* Real, personal, and state public; service property has been assessed at 100% of the estimated value.
Source: King County Assessor's Office.
Note: These figures 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 $57,904,074 and prior year omits of
$1,540,000 yielding a regular levy value of $8,563,964,852. These assessed valuations are the basis for the
following year's tax levy.
PROPERTY TAX RATES AND LEVIES, DIRECT AND OVERLAPPING GOVERNMENTS
For the Last Ten Fiscal Years
City
Direct
Rates Overlapping Rates
City of Federal Way Emergency
Fiscal Federal School King Washington Green River Port of Fire District Medical
Year Way District #210 County State Flood Zone Seattle #39 Library Services Total
TAX RATES PER $1,000 OF ASSESSED VALUATION
2000
1.49
4.42
1.69
3.30
0.05
0.22
1.50
0.59
0.27
13.53
2001
1.41
4.44
1.55
3.15
0.05
0.19
1.45
0.56
0.25
13.04
2002
1.38
4.16
1.45
2.99
0.05
0.19
1.50
0.53
0.25
12.50
2003
1.34
4.28
1.35
2.90
0.05
0.26
1.50
0.54
0.24
12.46
2004
1.30
4.20
1.43
2.76
0.05
0.25
1.50
0.53
0.24
12.26
2005
1.27
4.30
1.38
2.69
0.05
0.25
1.50
0.53
0.23
12.21
2006
1.22
4.26
1.33
2.50
0.04
0.23
1.50
0.53
0.22
11.84
2007
1.14
4.19
1.29
2.33
0.04
0.23
1.50
0.50
0.21
11.42
2008
1.04
4.15
1.26
2.13
0.10
0.22
1.50
0.45
0.30
11.16
2009
0.97
4.20
1.15
1.96
0.09
0.20
1.50
0.42
0.27
10.76
DETAIL OF TAX RATES FOR 2008
Basic Rate
0.97
-
1.05
1.96
0.09
0.20
1.50
0.36
-
6.13
Voted Rate
-
4.20
0.10
-
-
-
-
0.06
0.27
4.63
TAX LEVIES
2000
7,030,723
29,878,996
278,515,900
545,390,795
748,642
35,647,430
8,596,565
54,618,346
45,070,501
1,005,497,898
2001
7,305,894
32,859,841
290,369,516
589,103,721
786,904
35,646,678
9,906,591
59,634,503
46,122,721
1,071,736,369
2002
7,764,913
33,552,460
304,062,327
627,772,703
799,554
39,806,235
11,061,131
64,373,926
52,497,313
1,141,690,562
2003
7,941,900
36,639,878
302,100,182
648,995,138
849,988
58,003,521
11,774,814
72,580,170
54,088,854
1,192,974,445
2004
8,117,874
38,051,680
335,853,716
647,490,235
873,826
59,657,092
12,467,237
74,860,405
55,704,127
1,233,076,192
2005
8,248,919
40,744,820
342,395,871
666,827,056
901,356
62,779,505
13,062,586
78,374,467
57,476,670
1,270,811,250
2006
8,800,989
43,672,564
357,240,140
672,185,668
922,666
62,785,749
14,108,124
85,715,008
59,154,623
1,304,585,531
2007
9,098,370
47,315,366
383,039,569
691,250,598
956,482
68,841,070
19,882,637
88,486,309
61,300,276
1,370,170,677
2008
9,300,030
52,730,549
428,433,792
723,908,902
33,945,830
75,908,664
22,288,360
91,371,026
101,861,635
1,539,748,788
2009
9,551,027
58,588,636
442,092,857
756,272,108
35,151,944
75,911,308
23,715,724
95,398,383
105,611,047
1,602,293,034
Source: King County Assessor's Office and King County Department of Finance.
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b
b
PRINCIPAL TAXPAYERS
Current Year and Ten Years Ago
2009
2000
% of Total
% of Total
Assessed
Assessed
Assessed
Assessed
Taxpayer
Type of Business
Valuation
Rank
Valuation (A)
Valuation
Rank
Valuation (A)
Weyerhauser
Real Estate
$144,353,970
1
1.69%
$ 143,648,512
1
2.77%
Steadfast Commons LLC
Shopping Cencer
55,964,858
2
0.65%
55,037,000
3
1.06%
Harsch Investment Properties
Real Estate Management
54,871,000
3
0.64%
23,734,000
6
0.46%
Puget Sound Energy-Elec/Gas
Electric/Gas
47,414,185
4
0.55%
48,030,708
4
0.93%
LBA Realty
Real Estate Management
38,846,200
5
0.45%
-
-
-
Forest Cove LLC
Real Estate Management
28,594,000
6
0.33%
-
-
Qwest Corporation Inc.
Communications/Telephone
27,847,980
7
0.33%
-
-
KNL Vision WA LLC (formerly BRE Properties)
Real Estate Management
27,720,000
8
0.32%
16,141,000
8
0.31%
Fred Meyer
Retailer / Wholesaler
22,917,444
9
0.27%
-
-
Virginia Mason
Medical Services
18,827,027
10
0.22%
11,216,437
10
0.22%
Costco
Retailer / Wholesaler
15,384,013
11
0.18%
-
-
-
IA Orchard Hotels Federal Way (formerly Apple
Hospitality
14,837,500
12
0.17%
-
-
-
Hospitality Five Inc.)
ANS LLC
Retailer
13,357,900
13
0.16%
-
Campus Business Parks LLC
Real Estate Invest/Holding
12,850,000
14
0.15%
13,250,100
9
0.26%
$523,786,077
6.12%
$ 311,057,757
6.01%
PROPERTY TAX LEVIES AND COLLECTIONS
For the Last Ten Fiscal Years
Ratio of Total Ratio of
Percent of Delinquent Total Tax Outstanding Delinquent
Fiscal Total Current Tax Current Tax Tax Total Tax Collections to Delinquent Taxes to
Year Tax Levy Collections Collected Collections Collections Total Tax Levy Taxes Total Tax Levy
2000
7,030,723
6,858,636
97.6%
131,554
6,990,190
99.4%
249,607
3.6%
2001
7,305,894
7,107,918
97.3%
145,498
7,253,416
99.3%
302,374
4.1%
2002
7,700,412
7,471,822
97.0%
163,181
7,635,003
99.2%
342,855
4.5%
2003
7,912,598
7,740,741
97.8%
243,165
7,983,906
100.9%
269,323
3.4%
2004
8,119,460
7,945,659
97.9%
184,756
8,130,415
100.1%
225,762
2.8%
2005
8,248,919
8,082,340
98.0%
160,685
8,243,025
99.9%
230,838
2.8%
2006
8,933,515
8,584,565
96.1%
345,379
8,929,944
100.0%
231,743
2.6%
2007
9,068,740
8,868,895
97.8%
163,121
9,032,016
99.6%
270,171
3.0%
2008
9,265,234
9,037,601
97.5%
183,022
9,220,623
99.5%
314,782
3.4%
2009
9,511,404
9,277,004
97.5%
178,154
9,455,157
99.4%
371,029
3.9%
Source: Most of data has been derived from the "Annual Tax Receivable Summary" prepared by the King County Finance.
Governmental Activities
RATIO OF OUTSTANDING DEBT BY TYPE
For the Last Ten Fiscal Years
Business Type Activities
Percentage
Fiscal
General Obligation
Certificates of
Public Works
Total Primary
of Personal
Year
Bonds
Participation
Trust Fund Loan
Government
Income (b)
Per Capita (b)
2000
33,196,600
_
688,046
3,682,352
37,566,998
0.078%
451
2001
30,515,000
382,423
3,465,849
34,363,272
0.065%
410
2002
27,682,000
59,936
2,668,907
30,410,843
0.074%
363
2003
34,710,026
20,490
2,486,548
37,217,064
0.060%
446
2004
30,802,892
-
2,304,189
33,107,081
0.068%
386
2005
27,701,761
-
2,121,830
29,823,591
0.075%
348
2006
29,581,454
-
1,939,471
31,520,925
0.071%
364
2007
19,605,000
-
1,757,112
21,362,112
0.122%
244
2008
19,138,000
-
1,574,753
20,712,753
0.134%
235
2009
29,212,950
-
1,392,394
30,605,344
0.090%
346
Source: City of Federal Way Finance Division
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
See Demographic Statistics schedule: for personal income and population data. These ratios are calculated using
personal income for the prior calendar year.
(b) Per capita income information for the years 2001 to 2007 are based on 2000 U.S. Census report since this
information is available for individual cities only every ten years when the census is done. 2008-2009
info for Federal Way is based on US Census Bureau, 2006-2008 American Community Survey Three-year Estimates.
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE
AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
For the Last Ten Fiscal Years
Ratio of Net
(B) (C) Bonded Debt Net Bonded
Fiscal (A) Assessed Gross Less Debt Net To Assessed Debt Per
Year Population Value Bonded Debt Service Fund Bonded Debt Value Capita
2000
83,259
5,178,119,377
37,566,992
6,172,926
31,394,066
0.0061
377.07
2001
83,890
5,620,635,267
34,363,272
6,808,657
27,554,615
0.0049
328.46
2002
83,850
5,912,362,755
30,410,844
5,579,129
24,831,715
0.0042
296.14
2003
83,500
6,292,343,626
30,605,344
2,599,653
28,005,691
0.0045
335.40
2004
83,590
6,418,941,601
33,113,539
2,880,857
30,232,682
0.0047
361.68
2005
85,800
7,251,992,701
29,823,591
2,886,785
26,936,806
0.0037
313.95
2006
86,530
8,011,615,599
31,520,925
6,001,415
25,519,510
0.0032
294.92
2007
87,390
9,010,356,378
21,362,112
2,147,282
19,214,830
0.0021
219.87
2008
88,040
9,825,319,904
20,712,753
1,882,041
18,830,712
0.0019
213.89
2009
88,578
8,563,964,852
30,605,344
4,225,463
26,379,881
0.0031
297.82
(A) Sources: U.S. Census Bureau; State of Washington Office of Program Planning and Fiscal Management,
Population Study Division; and the City of Federal Way Community Development Department.
(B) The final certified Regular Levy assessed value of taxable property which was used by the King County n
Assessor's Office for use in calculating levy rates for the following year's tax roll. The total assessed valuation
of $8,623,014,622 has been reduced by senior citizen exemptions of $57,509,770 and prior year omits of $1,540,
to arrive at taxable assessed valuation.
(C) Includes Public Works Trust Fund Loans issued in 1994, 1996, 1997, and 2000;
ti
general obligation bonds issued in 2000, 2003, 2006 and 2009.
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2009
Jurisdiction
King County
Port of Seattle
Federal Way School District #210
Library
Total Overlapping ]Debt
CITY OF FEDERAL. WAY
(A)
(B)
Gross General
Percentage
Amount
Obligation Debt
Applicable to
Applicable to
Outstanding
Federal Way
Federal Way
$ 1,078,489,000
2.52%
$ 27,194,740
357,315,000
2.52%
9,009,910
166,090,000
70.54%
117,155,638
129,925,000
4.17%
5,413,421
1,731,819,000
158,773,708
30,605,344 (C;
Total Direct and Overlapping Debt $ 1,762,424,344
100.00% 30,605,344
$ 189,379,052
(A) Total general obligation bonds outstanding at the year end, exclusive of refunded bonds.
Source is King County Department of Finance.
(B) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to
valuation of property subject to taxation in reporting unit.
(C) Includes Public Wor];cs Trust Fund Loans issued in 1994, 1996, 1997, and 2000;
general obligation bonds issued in 2000, 2003, 2006 and 2009.
Source is City of Federal Way Finance
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COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2009
General Debt Capacity
Excess Levy
Excess Levy
(Limited) (Unlimited)
Open Space
Utility Total Debt
DESCRIPTION
Councilmanic Excess Levy
and Park
Purposes Capacity
Statutory debt limit:
(2009 AV=$9,881,647,631) (A)
1.50% AV @ 100%
$ 148,224,714 $ (148,224,714)
$ -
$ - $ -
2.50%AV @ 100%
- 247,041,191
247,041,191
247,041,191 741,123,572
Add: Cash on hand for
debt redemption (B) 6,295,519 -
6,295,519
Less: Bonds and COPs outstanding (29,208,950) - - (29,208,950)
Remaining Debt Capacity $ 125,311,284 $ 98,816,476 $ 247,041,191 $ 247,041,191 $ 718,210,141
Total Remaining
"General" Capacity $224,127,760
(A) This figure represents the City's final total taxable assessed valuation (AV) for 2009 which was used to determine the
2010 property tax levy.
(B) Reflects ending fund balance in the Debt Service Fund and Utility Tax Fund as of December 31, 2009.
(C) Combined total for Councilmanic, Financing Lease, and Excess Levy capacities.
Total net debt
Total net debt
applicable to
applicable
Legal debt
the limit as a
Fiscal Year—
Debt limit
to limit
margin
% of debt limit
2000
421,547,646
(17,918,011)
403,629,635
4.25%
2001
353,852,494
(28,124,453)
325,728,041
7.95%
2002
443,427,207
(14,289,859)
429,137,348
3.22%
2003
469,715,580
(31,327,803)
438,387,777
6.67%
2004
471,925,773
(26,881,086)
445,044,687
5.70%
2005
487,677,084
(23,478,555)
464,198,529
4.81 %
2006
543,899,454
(21,459,145)
522,440,309
4.32%
2007
600,871,170
(12,012,597)
588,858,573
3.91%
2008
736,889,175
(11,615,105)
725,274,070
1.58%
2009
741,123,572
(22,913,431)
718,210,141
3.09%
Source: City of Federal Way Finance
(A) King County Department of Finance
Note: Under state finance law, the city's outstanding general obligation debt should not exceed 15 percent of total assessor's
property value.
By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general
obligation bonds.
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RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION
BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES NET OF DEBT SERVICE EXPENSE
Ratio of
Debt Service
Total General
to General
Fiscal
Total Debt
Governmental
Governmental
Year
Principal
Interest *
Service
Expenditures
Expenditures
2000
2,498,853
1,729,858
4,228,711
34,217,716
12.4%
2001
2,700,478
1,797,614
4,498,092
34,761,823
12.9%
2002
2,834,084
1,651,197
4,485,281
36,819,618
12.2%
2003
14,159,881
1,703,165
15,863,046
50,550,741
31.4%
2004
3,080,677
1,796,791
4,877,468
40,610,863
12.0%
2005
3,100,546
1,531,364
4,631,910
40,108,790
11.5%
2006
2,219,676
1,418,843
3,638,519
41,086,555
8.9%
2007
9,976,455
1,153,300
11,129,755
56,186,140
19.8%
2008
467,000
841,542
1,308,542
51,278,215
2.6%
2009
4,585,000
824,693
5,409,693
54,585,436
9.9%
Source: City of Federal Way Finance
Note: * Interest excludes bond issuance and debt registration costs.
DEMOGRAPHIC STATISTICS
Education
Personal Level in Years
Fiscal Income Per Capita Median of Formal School Unemployment
Year Population Sea-Tac-Bel [D] Income [C] Age [C] Schooling Enrollment (A) Rate (B)
2000
83,259
115,202,918,000
29,210
32.5
13.0
22,289
4.9%
2001
83,890
117,000,769,000
22,451
32.5
13.0
21,916
6.1%
2002
83,850
119,343,435,000
22,451
32.5
13.0
22,194
7.3%
2003
83,500
121,624,885,000
22,451
32.5
13.0
22,265
7.4%
2004
83,590
133,156,997,000
22,451
32.5
13.0
22,395
6.2%
2005
85,800
136,859,162,000
22,451
32.5
13.0
22,383
5.0%
2006
86,530
149,858,462,000
22,451
32.5
13.0
22,184
4.5%
2007
87,390
162,934,794,000
26,137
37.2
13.0
21,775
4.1%
2008
88,040
169,798,086,000
27,730
37.0
13.0
21,622
5.1%
2009
88,578
N/A
27,638
36.6
13.0
12,700
8.9%
(A) Includes public school enrollment. Kindergarten is included though not State mandated.
(B) Unemployment rates came from the US Department of Labor, Bureau of Labor Statistics.
(C) Per capita income and Median age information for the years 2001 to 2006 are based on 2000 U.S.
Census report since this information is available for individual cities only every ten years when the census is done.
2007 info for Federal Way is based on 2006 US Census American Community Survey.
2008-2009 info for Federal Way is based on 2006-2008 American Community Survey Three-year Estimates.
(D) Personal income information is for Seattle -Tacoma -Bellevue area provided by the Bureau of Economic Analysis, information
is not available for Federal Way. 2009 data for Personal Income was not available at the time of publication.
Sources: Data was obtained from U. S. Census Bureau
US Department of Labor, Bureau of Labor Statistics
US Department of Commerce, Bureau of Economic Analysis
School data was provided by the Federal Way School District.
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PRINCIPAL EMPLOYERS
Current Year and Ten Years Ago
2009
2000
Number of
% of Total City
Number of
% of Total City
Taxpayer
Type of Business
Employees
Rank
Employment
Employees
Rank
Employment
Weyerhaeuser Company
Lumber Products
2,580
1
8.83%
1,592
2
7.22%
World Vision Inc
Christian Relief Agency -Nonprofit
809
2
2.77%
507
6
2.30%
St Francis Hospital
Medical Services
744
3
2.55%
468
7
2.12%
Us Postal Service - Bulk Mail
Postal Service
655
4
2.24%
635
3
2.88%
Wild Waves Theme Park
Amusement Center
632
5
2.16%
536
5
2.43%
Livebridge Inc
Business Services
560
6
1.92%
-
-
-
City Of Federal Way
Government Services
471
7
1.61%
440
8
2.00%
Wal-Mart Supercenter #3794
Retail
339
8
1.16%
225
15
1.02%
Coldwell Banker Danforth & Assoc INC
Real Estate
246
9
0.84%
-
-
-
Virginia Mason Federal Way
Medical Services
235
10
0.80%
235
13
1.07%
Costco Wholesale Corporation
Wholesale
219
11
0.75%
294
9
1.33%
Fred Meyer
Retail
213
12
0.73%
250
11
1.13%
Wal-Mart Store #2571
Retail
184
13
0.63%
-
-
-
Target Store #1947
Retail
178
14
0.61%
130
26
0.59%
Winco Foods #43
Grocery Store:
175
15
0.60%
200
19
0.91%
Source: City of Federal Way Business License
Note: Principal Employers - includes both full-time and part-time employees.
PROPERTY VALUE AND CONSTRUCTION
Commercial Construction (A)
Residential Construction (A)
Multi -Family Construction (A)
Value
Value
Value
Year
Permits
(In Thousands)
Permits
(In Thousands)
Permits
(In Thousands)
2000
250
38,554
185
11,462
12
3,816
2001
291
59,384
166
7,914
6
1,790
2002
393
59,075
318
38,176
1
-
2003
240
25,695
290
37,775
1
1,042
2004
335
64,522
289
82,658
0
-
2005
289
124,985
591
111,504
0
-
2006
332
78,194
455
70,862
1
2,027
2007
370
59,666
388
55,321
33
11,487
2008
256
45,810
258
17,554
91
26,025
2009
132
45,343
275
13,057
76
20,802
Sources & Notes:
(A) Federal Way Community Development Department. Commercial construction includes alterations.
Other building -related permits (plumbing, mechanical, fire alarm, etc.) numbering 2,209
and valued at $5,617,483 have been excluded.
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e
CAPITAL ASSETS BY FUNCTION
Last Ten Fiscal Years
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Transportation
Street (Center Line Miles)
224.48
224.48
224.48
224.48
224.48
230.84
233.84
233.84
234.72
234.72
Signals WSDOT-owned and maintained
-
4
4
4
4
4
5
5
5
5
Signals City -owned & County -maintained
58
65
67
70
71
71
74
74
76
76
Street lights City -owned and maintained
260
668
810
1,038
1,050
1,050
1,214
1,214
1,463
1,467
Street lights City -owned and PSE-maintained
-
-
-
644
644
644
644
644
644
644
Street lights PSE-owned and maintained
648
2,835
2,850
1,975
1,975
1,975
1,975
1,975
1,975
1,975
Culture & Recreation
Developed Parks - Acreage
471
493.5
493.5
500.25
500.25
522.9
522.9
524.49
524.49
524.49
Developed Parks - # of Parks
26
28
28
31
32
32
32
32
32
32
Undeveloped Parks - Acreage
355
352
352
356.24
356.24
543.5
5435
543.46
551.12
551.12
Undeveloped Parks - # of Parks
20
20
20
21
21
21
21
21
22
22
Tennis Courts City -Owned
5
9
9
9
9
11
11
11
11
11
Tennis Courts - Public
20
10
10
10
16
22
22
22
22
22
Swimming Pools City -Owned
0
0
0
1
1
1
1
1
1
1
Swimming Pools County -Owned
2
2
2
1
1
1
1
1
1
1
Trails - Miles
3
4
4
4
4
6
6
6
6
6
Trails -# of Trails
2
2
2
2
2
2
2
2
3
3
Community Centers/Recreation Facilities
2
2
2
2
2
2
2
2
1
1
Source: City of Federal Way Public Works Department
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
SECURITY OF PERSONS & PROPERTY
Police Information
Offenses:
Forcible Rape (including attempts)
43
49
34
50
50
55
64
48
30
51
Robbery
128
124
108
125
121
153
146
129
170
198
Criminal Homicide
7
4
4
2
-
7
1
3
10
6
Aggravated Assault
158
141
120
120
109
101
120
107
115
115
Vehicle Theft
849
1,179
1,206
1,204
1,118
1,573
1,199
939
816
552
Burglary (commercial & residential)
533
521
677
672
759
800
753
739
800
741
Larceny
3,072
3,516
3,347
3,145
3,257
3,786
3,230
3,159
2,933
3,231
Arson
36
17
29
14
23
25
26
18
13
13
Citations:
Traffic
13,340
12,767
13,439
18,411
13,219
11,402
11,931
14,043
19,339
20,678
Red Light Photo
-
-
-
-
-
-
-
-
3,813
13,002
ECONOMIC ENVIRONMENT
Building Related Permits & Values
Building Permits
447
463
712
531
624
880
788
791
605
483
n
Estimated Value (In Millions $)
$53.8
$69.1
$94.8
$64.5
$105.4
$236.5
$151.1
$126.5
$89.4
$79.2
0
Other Building Related Permits
1546
1693
2024
1779
1958
2705
2550
2690
2370
2209
Estimated Value (In Millions $)
$1.5
$2.3
$2.5
$ 2.4
$ 2.5
$ 3.9
$ 4.2 $
5.5 $
7.0 $
5.6
p
ti
Source: City of Federal Way Police Department and
Community
Development Department
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Federal Wav / 112
CITY GOVERNMENT EMPLOYEES FULL-TIME EQUIVALENT - HISTORY
Department 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
City Manager
6.0
5.0
6.0
6.41
6.0
6.11
6.1)
10.11
9.75
7.h2
Administration
6.0
5.0
5.0
5.0
5.0
5.0
5.0
5.5
5.25
3.62
Economic Development
-
-
1.0
1.0
1.0
1.0
1.0
1.5
1.50
1.50
Government Affairs
-
-
-
-
-
-
-
3.0
3.00
2.50
VFdnicipa] Court
11.6
13.6
13.6
13.fi
1z.6
12.fi
12.fi
14.11
14.410
14.00
Management Services.
-U,Q,
a,
24.5
25.0
25.0
22.0
22.0
25.1
23.85
22.85
Administration
2.0
1.5
1.5
1.5
1.5
1.5
1.5
1.5
-
-
Finance
8.0
7.0
7.0
8.0
8.0
7.0
7.0
8.0
8.00
8.00
City Clerk
2.5
2.5
2.5
2.0
2.0
1.5
1.5
1.5
1.75
1.75
Human Resources
5.0
4.0
4.5
4.5
4.5
3.5
3.5
3.5
3.50
3.50
Information System
8.5
9.0
9.0
9.0
9.0
8.5
8.5
10.6
10.60
9.60
Lan'
10.0
11.0
11.0
10.4
10.6
10.6
10.6
13.0
13.00
12.01)
Civil Legal Services
4.1
5.1
5.1
5.8
5.8
5.8
5.8
5.8
5.80
4.80
Criminal Prosecution Services
6.0
6.0
6.0
4.6
4.8
4.8
4.8
7.2
7.20
7.20
1?evelppment
30.1
29.1
28.6
29.6
29.6
28.7
28.7
30.5
32.00
28.90
.(_:vmmuni�
Administration
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.50
4.50
Planning
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.75
7.00
Building
13.3
12.3
11.3
12.3
12.3
12.3
12.3
13.3
14.25
13.00
Human Services
2.5
2.5
3.0
3.0
3.0
2.5
2.5
3.0
3.50
3.50
Neighborhood Development
1.0
1.0
1.0
1.0
1.0
0.7
0.7
1.0
1.00
0.90
Police
138.5
141.5
151.11
155.0
155.0
152.0
155.0
169.41
169.410
I66.00
Administration
2.0
2.0
2.0
2.0
3.0
3.0
3.0
3.0
3.00
3.00
Support Services
56.5
58.5
59.0
55.0
54.0
53.0
55.0
61.0
61.00
58.00
Field Operations
80.0
81.0
90.0
98.0
98.0
96.0
97.0
105.0
105.00
105.00
Parks. Rec. & Cultural Svcs.
26.9
27.0
27.41
30.4
30.4
30.2
31.2
44.3
44.25
39.75
Administration
2.0
2.0
2.0
1.8
1.8
1.8
1.8
1.8
1.80
1.35
Planning
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.00
-
Kenneth Jones Pool
-
-
-
3.0
3.0
3.0
3.0
-
-
-
General Recreation
7.5
6.5
6.5
6.6
6.6
6.6
6.6
7.1
7.10
4.80
Community Center
-
-
-
-
-
-
-
12.4
12.35
13.35
Dumas Bay Centre
2.0
2.0
2.0
2.0
2.0
2.0
3.0
3.0
2.75
2.75
Knutzen Family Theatre
1.0
1.0
1.0
1.5
1.5
1.5
1.5
1.5
1.75
-
Parks Maintenance
13.0
14.0
14.0
14.0
14.0
13.8
13.8
17.0
17.00
17.00
Buildin F
0.4
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.50
0.50
Public Works
.37.5
Mi.S
3515
41.5
41.5
41.5
42.}
4.$)
44.5u
4�41.11u
Administration
2.5
2.1
2.1
2.1
2.1
2.1
1.9
1.9
1.85
2.35
Development Services
6.5
6.5
6.5
6.5
5.8
5.8
6.5
6.5
6.45
4.45
Traffic Services
4.0
4.1
4.1
5.1
5.1
5.1
5.1
6.1
6.10
6.10
Street Services
9.7
10.0
10.0
11.0
11.7
11.7
11.0
11.5
12.00
11.00
Emergency Management
-
-
-
-
-
1.0
1.0
1.00
1.00
Solid Waste & Recycling
1.6
1.6
1.6
1.6
1.6
1.6
1.7
1.7
1.70
1.70
Surface Water Management
13.3
14.3
14.3
15.3
15.3
15.3
15.4
15.4
15.40
15.40
Total
286.5
289.6
300.1
311.4
310.7
303.6
308.6
349.7
35035
333.12
Source: City of Federal Way Finance Division
City o Federal Way / 113
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
DECEMBER 31, 2009
POSITION
MAYOR
DEPUTY MAYOR
COUNCIL MEMBERS
POSITION
CITY MANAGER/POLICE CHIEF
CITY ATTORNEY
CITY CLERK
COMMUNITY DEVELOPMENT DIRECTOR
ECONOMIC DEVELOPMENT DIRECTOR
FINANCE DIRECTOR
FINANCIAL SERVICES ADMINISTRATOR
HUMAN RESOURCES DIRECTOR
INFORMATION TECHNOLOGY DIRECTOR
PARKS AND PUBLIC WORKS DIRECTOR
Source: City of Federal Way Finance Division
LEGISLATIVE BODY
EMPLOYEE
ANNUALSALARY
JACK DOVEY
$18,000
ERIC FAISON
$13,800
JEANNE BURBIDGE
$13,800
DINI DUCLOS
$13,800
JIM FERRELL
$13,800
LINDA KOCHMAR
$13,800
MICHAEL PARK
$13,800
ADMINISTRATIVE STAFF
EMPLOYEE
ANNUAL SALARY
BRIAN WILSON
$148,920
PAT RICHARDSON
$133,158
CAROL MCNEII LY
$72,125
GREG FEWINS
$123,648
PATRICK DOHERTY
$115,680
THO KRAUS
$121,848
BRYANT ENGE
$141,036
MARY MCDOUGAL
$121,848
MEHDI SADRI
$121,848
CARY ROE
$141,036
NOTE: In accordance with State of Washington legal statues, individual fidelity coverage of not less than $100,000
exists for the City Manager/Police Chief, Information Technology Director, Human Resources Director, and Finance Director.
MISCELLANEOUS STATISTICAL INFORMATION
LOCAL TAXES ON BUSINESSES
Franchise Tax - Cable TV ............................. 5.00%
Gambling Taxes:
B ingo/Raffles.................................... 5.00%
Amusement/Games ............................. 2.00 %
Punchboard/Pull Tabs .......................... 5.00%
C ardro o ms....................................... 20.00 %
Local Sales Tax (Collected by the State)............ 9.50%
Food & Beverage Tax (Collected by the State).... 0.50%
FIRE AND EMERGENCY MEDICAL RESPONSE INFORMATION
Fire and Emergency Medical Response information reflects the greater Federal Way area, which is served by South King Fire & Rescue.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fire and Other Responses
2,278
1,920
3,055
3,117
2,896
3,210
865
639
1,083
1,147
Emergency Medical
7,193
7,240
7,422
8,042
8,263
8,636
11,164
11,350
12,058
11,077
PUBLIC EDUCATION
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
23
Elementary Schools
12,242
11,498
11,990
9,854
9,916
9,806
9,733
9,612
9,594
9,594
9
Middle Schools (incl. Public Academy)
5,013
5,331
5,509
5,458
5,476
5,271
5,183
5,139
5,234
5,203
5
High Schools
4,557
4,415
4,316
6,625
6,650
7,004
6,954
6,720
6,531
6,637
1
Internet Academy (K-12)
477
672
379
328
353
302
314
304
263
266
22,289
21,916
22,194
22,265
22,395
22,383
22,184
21,775
21,622
21,700
2,733
Staff members
TAXABLE SALES (in millions)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Retail Sales
$1,212.1
$1,220
$1,298
$1,237
$1,239
$1,331
$1,471
$1,540
$1,458
$1,257
Real Estate Sales
$429.9
$400
$503
$570
$616
$939
$988
$963
$536
$208
n
co
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