2019 Annual Comprehensive Financial Report (19-004)19-004
Ci"ty of Federal Way, WA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR YEAR ENDED DECEMBER 31, 2019
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City of Federal Way History —
The earliest recorded accounts of the Federal Way area tell of Native American families who resided in the area of the
Muckleshoot Reservation on the east side of the Green River Valley and traveled west to the shores of Puget Sound for the
plentiful fisheries resources. Generations of Muckleshoot Indians wore a westward trail across the heavily forested plateau to the
area which is now Saltwater State Park. The arrival of the white man in the nineteenth century resulted in a steady decline in the
Indian population and by 1890, nearly the entire population had disappeared from the area. Isolated on a triangular shaped plateau
rising steeply from Puget Sound, the Federal Way area had little waterfront access or roadways and accordingly, was sparingly
developed compared to Tacoma and Seattle. As late as the turn of the century, the original settlers at Dash Point and Dumas Bay
had to row to Tacoma for supplies and mail. Old Military Road, constructed around 1856 and extending north from Fort
Steilacoom, past Star Lake to Seattle and Fort Lawton, was the first road through the area.
Over time, narrow dirt roads were added to provide east/west access and by 1900, a road was constructed between Star Lake and
Redondo. The second crossroad, the "Seattle Road," connected old Military Road and Kent. The Seattle -Tacoma Interurban Line,
completed in 1901, provided a fast and easy way to reach these urban cities. Improved access brought many visitors to the area
and Star Lake became a popular summer recreation site.
By the 1920s, Federal Highway 99, the interstate that linked the western states from north to south, was complete. At this time,
Federal Way was still primarily forest and farmland. Fred Hoyt had a cabin on Dumas Bay and started a road to Tacoma (still
called Hoyt Road). The timber companies, which had a major logging operation going, built an early railroad line and were
instrumental in getting Marine View Highway (now Dash Point Road) built in the early 1920s. This roadway spurred
development along the coastline. Soon thereafter, Peasley Canyon Road was built to connect Military Road with the Auburn
Valley. This road later became known as South 320th Street. In these early days, roadways set the stage for development in the
area and they still play an important role in the City today.
By the start of World War II, a number of small, thriving communities made up the area that is now Federal Way. Some
communities were clustered around lakes, such as Steel Lake, Star Lake, and Lake Geneva. Others were sited to take advantage of
the view of Puget Sound, like Adelaide and Buenna. As each of these communities grew, residents built small schoolhouses for
their children. By the late 1940s, King County consolidated the many individual red schoolhouses into the Federal Way School
District, from which the City gets its name. During this same period, a library was built along the edge of Highway 99, and
between 308th Street and 320th Street, a small "downtown" developed with a general store, lumber yard, realty office, beauty
parlor, feed store, and gas station. By the end of the 1950s, the ten blocks between 308th and 320th Streets became the first
roadside commercial district. One of the more unique developments was Santa Faire, a family oriented theme park. New shopping
areas were added around the park, helping to create a "community focus" for the residents of the area.
As this commercial area developed, the rest of Federal Way was changing as well. The Boeing Company expanded their
operations in Renton and the Kent Valley and began advertising nationally for engineers. Those engineers in turn began roaming
the wooded acreage in Federal Way in search of housing. One of the earliest residential developments was Marine Hills, built in
1958 overlooking Puget Sound. Weyerhaeuser, one of the early timber companies, had large land holdings in the area and began
to develop their land into high quality housing with amenities like golf courses.
Weyerhaeuser's development company also began developing commercial property, creating the West Campus business park.
The plan was to integrate offices and businesses with lush landscaping. Though initially the corporate office market was not
strong, West Campus has grown almost to capacity, providing space for many civic buildings such as City Hall, the police station,
the area's major health care centers, and higher density housing.
Another major landmark in the area is SeaTac Mall (now The Commons), built in the mid- 1970s on what was farmland south of
320th Street. The Mall is one of the largest in South King County and is the anchor for retail development in the area. The Mall
was a result of population growth in the region and its location was determined by the 320th Street intersection with Interstate 5.
The Interstate supplanted Highway 99 as the main artery for commuter traffic in the County.
By the mid 1980s, South King County was growing quickly. Retail growth occurred along Highway 99, especially at the 320th
Street intersection. Roads and office space were developed to accommodate the increased growth. Residential growth was also
prominent, following plans developed by King County, with a large number of apartment homes. The changes to the community,
with increased housing and traffic, created a movement for greater self-determination. In 1989, the citizens of this area voted for
incorporation and the City of Federal Way was born, incorporating on February 28, 1990 with 58,000 residents.
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CITY OF
Federal Way
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2019
City of Federal Way
33325 8th Avenue South
Federal Way, Washington 98003
(253) 835-2520
www.ciiyoffederalwgy.com
Prepared by the Finance Department
Finance Director
Ade' Ariwoola, MBA, CGFM
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2019
Table of Contents
Page
INTRODUCTORY SECTION
Letterof Transmittal...........................................................................................................................
City Officials and Administrative Officers.......................................................................................
City Functional Organization Chart....................................................................................................
GFOA Certificate of Achievement.....................................................................................................
FINANCIAL SECTION
Independent Auditor's Report ............................................................................................................
9
Management's Discussion and Analysis............................................................................................
13
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position................................................................................................
27
Statement of Activities...................................................................................................
28
Fund Financial Statements:
Balance Sheet — Governmental Funds.............................................................................
29
Statement of Revenues, Expenditures, and Changes in Fund Balances —
Governmental Funds.................................................................................................
31
Reconciliation of the Statement of Revenues, Expenditures, and Change
In Fund Balances of Governmental Funds to the Statement of Activities ...............
33
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
GeneralFund...........................................................................................................
34
StreetFund...............................................................................................................
35
UtilityTax Fund......................................................................................................
36
Performing Arts & Event Center Operations Fund ..................................................
37
Statement of Net Position — Proprietary Funds.................................................................
38
Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds
39
Statement of Cash Flows — Proprietary Funds..................................................................
40
Statement of Fiduciary Net Position.................................................................................
41
Private -Purpose Trust Funds Statement of Changes in Fiduciary Net Position ................
42
Notes to the Basic Financial Statements............................................................................................
43
Required Supplementary Information:
Schedule of Proportionate Share of Net Pension Liability..................................................... 82
Schedule of Employer Contributions...................................................................................... 84
Combining and Individual Fund Statements and Schedules — Nonmajor Governmental Funds:
FundDescription....................................................................................................................... 85
CombiningBalance Sheet......................................................................................................... 86
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................... 90
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
ArterialStreet Fund................................................................................................. 94
Solid Waste & Recycling Fund................................................................................ 95
Special Contracts/Studies Fund............................................................................... 96
Hotel/Motel Lodging Tax Fund............................................................................... 97
Federal Way Community Center Fund.................................................................... 98
TrafficSafety Fund.................................................................................................. 99
Community Development Block Grant Fund.......................................................... 100
Paths& Trails Fund................................................................................................. 101
TechnologyFund..................................................................................................... 102
Individual Fund Statements and Schedules — Debt Service Fund:
FundDescription........................................................................................................................ 103
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ...... 104
Combining and Individual Fund Statements and Schedules — Internal Service Funds:
FundDescription.................................................................................................................... 105
Combining Statement of Net Position..................................................................................... 106
Combining Statement of Revenues, Expenses and Changes in Fund Net Position ................. 108
Combining Statement of Cash Flows..................................................................................... 110
Supplemental Information:
Schedule of State Financial Assistance.................................................................................. 114
Schedule of Expenditures of Federal Awards........................................................................ 115
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source......................................................................................... 118
Schedule by Function and Activity........................................................................................ 119
STATISTICAL SECTION
NetPosition by Component............................................................................................................
122
Changesin Net Position..................................................................................................................
123
Government -wide Revenues by Source and Expenses by Function ...............................................
124
Fund Balances of Governmental Funds..........................................................................................
125
Changes in Fund Balances of Governmental Funds.......................................................................
126
Assessed and Estimated Actual Value of Taxable Property...........................................................
127
Property Tax Rates and Levies, Direct and Overlapping Governments .........................................
128
PrincipalTaxpayers........................................................................................................................
129
Property Tax Levies and Collections..............................................................................................
130
Ratio of Outstanding Debt by Type................................................................................................
131
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita .....................................................
132
Computation of Direct and Overlapping Debt................................................................................
133
Computation of Limitation of Indebtedness....................................................................................
134
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures Net of Debt Service Expense ................
135
DemographicStatistics...................................................................................................................
136
PrincipalEmployers.......................................................................................................................
137
PropertyValue and Construction...................................................................................................
138
CapitalAssets by Function.............................................................................................................
139
Operating Indicators by Function...................................................................................................
140
City Government Employees Full -Time Equivalent - History.......................................................
141
Salaries and Surety Bonds of Principal Officials............................................................................
142
Miscellaneous Statistical Information............................................................................................
143
Principal Taxpayers — Sales Taxes.................................................................................................
144
ii
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Page 1
CITY OF
Federal Way
July 29, 2019
People of the City of Federal Way
Honorable Mayor and City Council
I am pleased to submit to you the 2019 Comprehensive Annual Financial Report (CAFR) of the City of Federal Way,
Washington. This report is published annually as the official annual financial report and complies with state law (RCW
43.09.230) requiring annual report for Washington municipal governments to be certified and filed with the Washington State
Auditor's Office in a timely manner. The accuracy of the data, completeness and fairness of the presentation, including all
disclosures rests with the City management. All disclosures necessary to enable the reader to gain an understanding of the
City's financial activities have been included.
The City operates under a system of accounting and internal controls that are concerned with safeguarding of assets and the
reliability of financial records. The definition of accounting control assumes reasonable, but not absolute assurance that the
objectives expressed in it will be accomplished by the system. The concept of reasonable assurance recognizes that the cost of
internal control should not exceed the benefits expected to be derived.
This transmittal letter is designed to complement the Management Discussion & Analysis (MD&A) and should be read in
conjunction with it. The City's MD&A can be found immediately following the Independent Auditor's Report.
REPORTING ENTITY
The City is a noncharter Optional Code City with a Mayor -Council form of government. It was incorporated on February 28,
1990, and is governed under the provisions of the Optional Municipal Code of the Revised Code of Washington. Optional
Code City status increases the City's operating authority by extending it to the powers of all four city classifications which exist
in Washington Law.
The City Council consists of seven council members, all of whom are elected at large by citizens of Federal Way to serve four-
year terms. In November 2009, the citizens of Federal Way approved Proposition 1 to change the form of government from a
City Manager -Council run government to an elected Mayor -Council government. Federal Way voters elected former City
Councilmember and King County Senior Deputy Prosecuting Attorney Jim Ferrell as Mayor on November 5, 2013 and was
reelected November 7, 2017.
City services provided include: police protection, construction and maintenance of streets, building inspection, municipal court
services, jail services, planning and zoning, park services, emergency management services, surface water management and
general administration, including finance. Services for a land use hearing examiner are contracted. The City has nine major
departments consisting of (1) Mayor's Office; (2) City Council; (3) Law; (4) Finance; (5) Municipal Court, (6) Parks and
Recreation; (7) Public Works; (8) Police; (9) and Community Development. Fire protection and emergency medical services are
provided by South King Fire & Rescue. Lakehaven Utility District delivers water and sewer services. King County Metro
provides public transportation services. Public housing services are the primary focus of the King County Housing Authority.
The King County Library System engages City residents through its library and reference services. School District No. 210 offers
educational programs for kindergarten through high school students, in addition to vocational training.
ECONOMIC FACTORS AFFECTING FINANCIAL CONDITION
The current economic condition has made considerable strides since the post Great Recession era as employment and inflation
levels are consistent with the Federal Reserve's mandate for maximum sustainable employment and price stability. Consumer
confidence levels are at its best since pre -Great Recession levels.
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Nationally, according to Bureau of Labor Statistics, the CPI rose 2.3 percent in 2019, slightly more comparable to 2017 and
2018. It was larger than the 1.8-percent average annual increase over the past 10 years.
The food index increased 1.8 percent in 2019, a slightly larger increase than the 2018 rise of 1.6 percent. The index for food at
home rose 0.7 percent in 2019, continuing a trend of modest increases; it rose 0.6 percent in 2018 and 0.9 percent in 2017.
Five of the six major grocery store food group indexes increased in 2019. The index for dairy and related products rose 2.4
percent after falling 0.1 percent in 2018. Similarly, the index for meats, poultry, fish, and eggs rose 2.3 percent in 2019 after
falling in 2018. The index for nonalcoholic beverages increased 1.0 percent in 2019 after a 1.4 percent increase in 2018. The
indexes for cereals and bakery products and for other food at home both rose 0.3 percent in 2019. The index for fruits and
vegetables declined in 2019, falling 1.3 percent after rising in 2018 and 2017. The indexes for fresh fruits and for fresh vegetables
both declined over the year. The index for food away from home rose 3.1 percent in 2019. This was larger than the 2.8 percent
increase in 2018 and the largest December -to -December rise since 2008.
The energy index rose 3.4 percent in 2019 after falling slightly in 2018. The gasoline index rose 7.9 percent over the year after
falling 2.1 percent in 2018. The index for fuel oil rose 4.6 percent in 2019. These increases more than offset declines in the other
major energy component indexes. The index for natural gas fell 3.5 percent in 2019 after rising in each of the prior 3 years. The
electricity index declined 0.4 percent under the prior year, its first decline since 2015. The medical care index rose 4.6 percent in
2019, well above its 2.0 percent rise in 2018 and the largest December -to -December advance since 2007. The index for
prescription drugs rose 3.0 percent after falling 0.6 percent in 2018.
The Seattle -Tacoma -Bellevue, WA's CPI for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.8% in December
2019 compared to increase of 2.7% in 2018. The national CPI-W increased 2.6% for 2019. The Seattle -Tacoma -Bellevue,
WA annual unemployment rate for 2019 was 3.6% compared to 3.9% in 2018. The last time Seattle -Tacoma -Bellevue annual
unemployment rate was below 4.0% was 2007 which was at 3.7% just before the "mortgage market" crash in 2008.
On March 9, 2020 Mayor Ferrell issued a Proclamation of Emergency in order to prevent the spread of coronavirus disease
(COVID-19). Then, on March 23, 2020, Governor Jay Inslee issued a statewide two week stay at home order and closed all
businesses except essential services. On April 3, 2020 the stay at home order was extended through May 4th.
This coronavirus shock could be more severe than the Great Financial Crisis of 2007-08, as it will hit households, businesses,
financial institutions, and markets all at the same time locally, nationally and globally. In this historical widespread pandemic,
the city is carefully considering all the options to adjust its budget as sales tax revenue and economic activity decline.
ECONOMIC TRENDS
Federal Way is the ninth most populated city in the state of Washington according to U.S. Census.gov with 97,840 people after
City of Renton with 104,700 and closely followed by Spokane Valley at 96,720 then Yakima at 94,440. In 2019, King
County median household income was $89,675; Federal Way $66,011, Renton $74,756, Spokane Valley $49,510, and Yakima
$44,266. The City of Federal Way is located on a plateau adjacent to Puget Sound in King County, eight miles north of downtown
Tacoma and 25 miles south of downtown Seattle. The City occupies approximately 22.5 square miles and is served by Interstate
5 and state highways 99 and 509.
In 2019, there were 37,257 housing units in Federal Way, a slight increase over 2018 of 37,085 housing units. Of these units,
54.4% or 20,274 were single family homes, 42% or 15,678 were multi -family units, and 3.5% or 1,305 were mobile homes and
trailers.
The community is residential and commercial, with the populace employed locally and in the neighboring cities such as SeaTac,
Kent, Tacoma, Bellevue, and Seattle. Employment in Federal Way is highly concentrated in retail and services sectors which
respond primarily to the needs of the local market area population. Major employers are; Federal Way Public Schools,
St. Francis Community Hospital, World Vision, Wild Waves, U.S. Postal Services, and DaVita. The top twenty employers report
9,023 employees in 2019.
Sales tax collected in 2019 total $16.1 million which was $1.4 million more than $14.7 million of 2018. The retail sector of the
local economy is anchored by the following areas; the first is South 348th and State Highway 99 including Wal-Mart Super Center,
Wholesale Sports, Costco, Lowe's Home Improvement Center, and Home Depot. The second is The Commons; a
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regional mall including Target, TJ Max, Kohls, Dicks Sporting Goods and many other small businesses adjacent to the area.
According to a listing of businesses registered with the City of Federal Way and sorted by the Standard Industrial
Classification, the business economy appears to be configured as follows: retail trade 51%; services 24%; construction 11%;
information 4%; wholesale trade 4%, manufacturing 1%, and other 5%.
In 2019, the total assessed value of property in Federal Way was $11.4 billion, which was approximately 8.4% higher than the
2018 assessed valuation of $10.3 billion.
Real Estate sales were $1,043 million in 2019, an increase of 24%, compare to $843 million in 2018. A total of 567 building
permits in 2019 compared to 580 in 2018, and 2906 other building related permits compared to 3,464 that were issued in 2018.
Estimated market value for permits in 2019 was $232 million and $96 million in 2018. Significant building permits include:
DaVita Healthcare office park, Traditions at Federal Way, Federal Way Elementary Schools - #24: Wildwood Elementary; Lake
Grove Elementary; and Mirror Lake Elementary, Panattoni Development, Premier Storage buildings, Multicare Park Assisted
Living and Memory Care, Fred Meyer, Bank of America and Valvoline instant oil change.
Washington State Supreme Court decided in favor of the city's right to levy excise tax on provider of utility services within the
city limit. This judgement allows the City of Federal Way to generate about one million dollars annually in new revenue which
will help in the years ahead with revenue shortfall due to COVID-19.
LONG-TERM PLANNING
The City's fiscal policy requires the City to prepare long-range projections for six years beyond the current budget period. The
projection extends current operations to the future to see if the services are sustainable and determine the magnitude of future
financing gaps, if any. This glimpse into the future allows the City to proactively plan and implement corrective measures over
time to avoid sudden drastic changes in service levels or in revenue/tax policies. In addition, the City's fiscal policy requires the
City to balance its ongoing services with ongoing revenues.
MAJOR INITIATIVES AND ACCOMPLISHMENTS
During 2019, the City of Federal Way completed construction of several hot -mix asphalt overlays totaling over $1.6M.
The city also received approximately $3.1 million in state and federal grant funding for transportation related capital projects in
2019. Projects that received these grant funds included Military Rd. & S. 278th St. Compacted Roundabout, SR99 HOV Lanes
Phase V, 211t Avenue South Pedestrian Connection, Traffic Control System projects, Street Light LED Conversion projects, and
SW Campus Preservation project.
Construction continued on Downtown Staircase Project which will connect the Performing Arts &Event Center to the downtown
city center. This project reached at least 95% completion in 2019 and will be physically completed in
2020.
The City completed Saghalie Field Turf replacement in 2019, which was paid for primarily by a $250K King County grant, a
$21 OK contribution from the Federal Way School District, and a $50K donation from the Federal Way Soccer Association.
On September 4th, 2018 the City Council decided to withdraw from the SCORE interlocal agreement effective January 1 st, 2020
per city resolution 18-741 in 2019. At the April 16, 2019 council meeting the City Council decided to bond the City portion of
the SCORE debt separately from the SCORE entity. The City of Federal Way is still responsible for paying their proportionate
share of SCORE debt service in the amount of $10,945,000 as of 12/31/2019.
OUTLOOK FOR THE FUTURE
Council identified the following set of goals for the City which was adopted on March 7, 2006.
1. Integrate the public safety strategy in all facets of City operations, building on a strong community -based approach.
2. Create a multi -use urban city center that is pedestrian friendly, linked to neighborhoods and parks, and services as the
social and economic hub of the City.
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3. Establish Federal Way as an economic leader and job center in South King County by attracting regional market for
high quality office and retail businesses.
4. Maintain the capital facilities plan and provide financing options for transportation and surface water improvements,
parks, recreation, and cultural arts and public facilities.
5. Ensure a responsive service culture within the City organization where employees listen carefully, treat citizens and
each other respectfully and solve problems creatively, efficiently, and proactively.
6. Position Federal Way as a regional leader by working collaboratively with other local and regional jurisdictions in order
to leverage resources.
INDEPENDENT AUDIT
State law requires an annual audit of all City books of account, financial records, and transactions by the State Auditor, an
independently elected state official. In addition to meeting the requirements set forth under state law, the audit was also designed
to meet the requirements of the Federal Single Audit Act of 1984 and related OMB Circular A-133. The 2019 audit of the City
has been completed in conformance with generally accepted auditing standards. The financial statement of all City funds has
been included in this audit. The city has been given an unmodified opinion in 2019; which is the 30t' consecutive year receiving
a clean audit. The State Auditor's report on the basic financial statements is included in the financial section of this report.
AWARDS
The Government Financial 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, 2018. The City of Federal Way has received a Certificate of Achievement for the last twenty-nine
years (fiscal years ended 1990 — 2018). In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial
report continues to meet Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine
its eligibility for another certificate.
The City of Federal Way also received the Government Financial Officers Association Distinguished Budget Presentation Aware
for its biennial budget for the years beginning January 1, 2019 and 2020. 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 off the
finance department. In addition, staff in all City departments should be recognized for responding so positively to the requests
for detailed information which accompany each audit. A special note of thanks is given to Chase Donnelly, Accounting Manager
who served as the coordinator for the CAFR preparation. The role of the State Auditor's Office should also be acknowledged as
a significant contribution to a fine product. Finally, we wish to express our appreciation to the Mayor and City Council for their
ongoing support and for providing the firm foundation for the pursuit of excellence in all realms of professional endeavors.
Respectfully submitted,
Ademola A. Ariwoola, MBA, CGFM
Finance Director
Page 5
2019
CITY OFFICIALS
EXECUTIVE & LEGISLATIVE BODY
SUSAN HONDA
Deputy Mayor
HOANG V. TRAN
Councilmember #4
JIM FERRELL
Mayor
LYDIA ASSEFA-DAWSON
Councilmember #1
MARK KOPPANG
Councilmember #5
JESSE E. JOHNSON
Councilmember #2
MARTIN A. MOORE
Councilmember #6
DINI DUCLOS
Councilmember #7
Elected/
Position
Elected/Appointed
Term
Appointed
Email
Mayor
Jim Ferrell
1/l/18-12/31/21
11/28/17
Jim.Ferrell@cityoffederalwa,
Position#1
Lydia Assefa-Dawson
1/1/16-12/31/19
11/24/15
Lydia.Assefa-Dawson(a),cityoffederalwa,
Position #2
Jesse E. Johnson
11/28/17-12/31/21
11/28/17
Jesse.Johnson(acityoffederalway.com
Position #3
Susan Honda
1/l/16-12/31/19
11/24/15
Susan.Honda(q
cityoffederalway.com
Position #4
Hoang V. Tran
1/l/18-12/31/21
11/28/17
Hoanjz.Tran@cityoffederaIwqy.com
Position #5
Mark Koppang
1/l/16-12/31/19
11/24/15
Mark.Koppan
,cityoffederalway.com
Position #6
Martin A. Moore
1/l/18-12/31/21
11/28/17
Martin.Moore(a)cityoffederalway.com
Position #7
Dim Duclos
1/l/16-12/31/19
11/24/15
Dini.Duclos@cityoffederalwa,
Phone
(253)835-2402
(253) 835-2401
(253)835-2401
(253)835-2401
(253)835-2401
(253) 835-2401
(253)835-2401
(253)835-2401
Page 6
JUDICIAL BRANCH
Elected/
Elected/
Position
Employee
Appointed
Term
Appointed
Contact Information
Presiding
David Larson
Elected
N/A
3/3/2008
David.Larson@cityoffederalway.com
Judge
(253)835-3012
Judge
Rebecca
Elected
N/A
1/1/2010
Rebecca. Robertson@cityoffederalway.com
Robertson
(253)835-3025
Court
Susanne White
Appointed
N/A
2/22/2010
Susanne.White@cityoffederalway.com
Administrator
(253) 835-3000
CITY ADMINISTRATION (In alphabetical order)
Emp Contact Information
City Attorney
Ryan Call
3/9/2017
Ryan.Call@cityoffederalway.com
(253)835-2572
City Clerk
Stephanie
10/7/2014
Stephanie.Courtney@cityoffederalway.com
Courtney
(253) 835-2540
Community Development
Brian Davis
11/1/2016
Brian.Davis@cityoffederalway.com
Director
(253) 835-2612
Economic Development
Tim Johnson
9/15/2014
Tim.Johnson@cityoffederalway.com
Director
(253) 835-2412
Finance Director
Ade Ariwoola
4/1/2014
Ade.Ariwoola@cityoffederalway.com
(253)835-2520
Human Resources Manager
Jean Stanley
1/1/2011
Jean.Stanley@cityoffederalway.com
(253)835-2532
IT Manager
Thomas
7/1/2011
Thomas.Fichtner@cityoffederalway.com
Fichtner
(253)835-2547
Parks Director
John Hutton
7/23/2014
John.Hutton@cityoffederalway.com
(253)835-6910
Police Chief
Andy Hwang
3/18/2014
Andy.Hwang@cityoffederalway.com
(253)835-6716
Public Works Director
EJ Walsh
8/18/2018
EJ.Walsh@cityoffederalway.com
(253)835-2713
Page 7
CITY OF FEDERAL WAY ORGANIZATION CHART AND OPERATION SUMMARY
CITIZENS OF FEDERAL WAY
Municipal Court City Council
* Misdemeanors & Gross Misdemeanors MAYOR'S OFFICE * Represents the People of FW
* Traffic & Non -traffic Infractions * Administer City-wide Operations and Budget * Adopt Ordinances and Resolutions
* Probation Services * Coordinate Regional Affairs * Grant Franchises
* Civil Impounds * Economic Development * Levy Taxes and Appropriate Funds
* Code Compliance * Emergency Management * Establish Policies & Guidelines
* Information Technology
*Human Resources
*City Clerk
* Performine Arts and Event Center
Community Development
Finance
Police
Public Works
* Land Use Management
* Payroll
* Crime Analysis/Prevention
* Development Services
--Permit process
* Accounts Payable
* Traffic Safety Educ. & Enfrc.
--Permitting
* Building Permits & Inspection
* Purchasing
* Investigation
--Inspection
* Code Compliance
* Accounts Receivable
* Patrol
* Major, Operating, &
* Health & Human Services
* Business License
* Community Safety and
Development of
* Comm. Dev. Block Gmt
* General Accounting
Education Programs
--Public Right -of -Way
* Neighborhood Development
* Budget
* Field Operation
--Traffic Systems
* Passport Services
* Banking and Investments
* Support Services
--Surface Water Mgmt.
* Monthly Financial Report
* Animal Control Services
* Solid Waste/Recycling
* Audit Coordination
* Civilian Operation
* Fleet Management
* Internal Controls
* Financial Planning/Analysis
Law I I Parks, Recreation & Cultural Services
* Civil Legal Services
* Recr & Athletic Progs
and Litigation
* Park maint/opemtion
* Legislative Support
& Development
* Prosecution
* Comm Events & Arts
* Provide Legal Counsel
* Public Facility Mgt
* Draft Contracts
& Development
and Ordinances
* Open Space Mgmt
* Negotiate Contracts
and Real Estate
Transactions
* Risk Management
M
N
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Federal Way
Washington
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2018
Executive Director/CEO
Page 9
Office of the Washington State Auditor
Pat McCarthy
July 29, 2020
Mayor and City Council
City of Federal Way
Federal Way, Washington
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of Federal Way, as
of and for the year ended December 31, 2019, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the City's
preparation and fair presentation of the financial statements in order to design audit procedures that are
Page 10
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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, as of December 31, 2019, and
the respective changes in financial position and, where applicable, cash flows thereof, and the respective
budgetary comparison for the General, Street, Utility Tax and Performing Arts & Events Center
Operations funds for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Matters of Emphasis
As discussed in Note 19 to the financial statements, in March 2020, a state of emergency was declared
that could have a negative financial effect on the City. Our opinion is not modified with respect to this
matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and required supplementary information listed in the table of contents be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Page 11
Supplementary and Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements as a whole. The combining financial statements and
schedules are presented for the purposes of additional analysis and are not a required part of the basic
financial statements. Such information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the financial statements.
This information has been subjected to auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the financial statements or to the
financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the information is fairly stated, in all
material respects, in relation to the basic financial statements taken as a whole.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements as a whole. The Introductory and Statistical Sections are
presented for purposes of additional analysis and are not a required part of the basic financial statements
of the City. Such information has not been subjected to the auditing procedures applied in the audit of
the basic financial statements and, accordingly, we do not express an opinion or provide any assurance
on it.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we will also issue our report dated July 29, 2020,
on our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. That report will be issued under separate cover in the City's Single Audit Report. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
Sincerely,
Pat McCarthy
State Auditor
Olympia, WA
Page 12
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Federal Way, we offer readers of our annual financial report a narrative overview, and an
analysis of the financial activities of the City of Federal Way for the fiscal year ended December 31, 2019. We encourage
readers to consider the information in conjunction with the preceding letter of transmittal, the financial statements and notes to
the financial statements that follow.
IW6M.W[y1F.1011[":IN[ei:YV
• The total assets plus deferred outflows of the City of Federal Way exceeded its liabilities plus deferred inflows at
December 31, 2019 by $588.3 million (Net Position). Capital Assets (net of depreciation and related debt) account for
89.5% of this amount with a value of $526.3 million. Of the remaining net position of $62.0 million, $43.0 million may be
used to meet the government's ongoing obligations to citizens and creditors, without legal restriction while the $18.9
million are restricted for specific use. (See page 27).
The City's total net position decreased by $9.6 million, or 1.6% below 2018 as referenced on page 28. Governmental
activities decreased by $10.3 million or 1.9% while business -type activities increased by $0.7 million or 1.0%. The
decrease of $10.3 million in governmental activities is primarily due to a $16.4 million loss on investment in SCORE joint
venture, offset by an increase of $1.2 million in sales tax, $1.0 million increase in real estate excise tax, and $2.4 million
increase in community development and public works permits and fees, receivables increase of $0.3 million due to taxes
accrued but not yet received, net pension asset increase of $1.0 million, and other liabilities decrease of $0.2 million. The
increase of $0.7 million in business -type activities is primarily due to capitals assets and construction in progress, net of
accumulated depreciation increased by $0.7 million. More detail is described in the analysis below.
• Net investment in capital assets decreased by $3.7 million (See page 16) and unrestricted net position decreased by $3.9
million respectively under 2018 as referenced on page 16.
• Restricted Net Position of $18.9 million decreased by $2.0 million or 9.8% primarily due to real estate excise tax being
spent on transportation projects for the city's streets and roads. Restricted Net Position is for funding of capital projects
and debt service. (See page 16 & 52).
• Long term liabilities increased by $1.7 million or 4.1 % due to the addition of $4.8 million in LTGO tax bond for
Performing Arts & Event Center, offset by reduction of $1.7 million net pension liability for GASB 68 state sponsored
pension plan, long term debt decrease of $1.0 million for General obligation debt, and a reduction of $0.4 million in
business -type GASB 68 net pension liability and pay -down of Public Works trust fund loan (see note 11 on page 71). On
page 71 $1.7 million of 2019A Bond premium is included in the note to the debt table.
• Governmental fund balances at year-end were $44.6 million, a $6.7 million or 18% increase from the prior year. Of the
$44.6 million, $15.8 million or 35.5% of the governmental fund balance is unassigned and available to fund ongoing
activities. The remaining $28.8 million is earmarked for debt service, paths & trails reserve, hotel/motel lodging tax,
police special funds, petty cash/change funds, court trust fund, advance travel, strategic opportunities reserve, streets
maintenance and capital projects. (See page 30 and page 52).
• Unrestricted or Unassigned fund balance in the General Fund was $15.9 million, which increased by $1.0 million or 6.6%
from the prior year, primarily due to a $1.2 million sales tax increase, offset by cost of living adjustments, health insurance
and pension cost increases.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of Federal Way's basic financial statements.
The basic financial statements are comprised of three components:
1) government -wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.
In addition to the required components, the City's annual report also includes other supplementary information. The first set
of supplementary information is the Combining Statements. These provide Balance Sheets, Statement of Revenues,
Expenditures, and Changes in Fund Balances with Budget to Actual Comparisons, Statement of Net Position, and Cash Flows
for all proprietary and internal service funds. The other set of supplementary information is the Statistical Section.
Page 14
The statistical section provides a one to ten-year view of the City's revenues, expenditures, debt obligations and capacity, the
City's largest taxpayers, and those entities with the largest employment within the City of Federal Way. This section provides
a long-term perspective on the City's economy.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the City of Federal
Way's finances, in a manner similar to a private -sector business.
A) The statement of net position presents information on all of the City of Federal Way's assets plus deferred outflows
and liabilities plus deferred inflows, with the difference between the two reported as net position. This statement
serves a purpose similar to that of a balance sheet in private business. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
B) The statement of activities presents information showing how the City's net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave).
Both of the government -wide financial statements distinguish functions of the City of Federal Way that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover
all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities
of the City of Federal Way include law enforcement and public safety, construction and maintenance of streets, building
inspection, municipal court services, jail services, community planning and development services, parks and recreation
facilities, other community services and general administration. The business -type activities of the City include surface water
management and the control and operation of Dumas Bay Centre, a multi -use facility that offers business and retreat
accommodations, recreation and cultural arts classes, and a performing arts facility.
The City has no separately identified component units included in the government -wide financial statements. The City has
reported its investment in one governmental joint venture: Valley Communications Center. A description of the joint venture
can be found in Note 14 of the notes to the financial statements.
The government -wide financial statements can be found immediately following this MD&A.
Fund Financial Statements
The annual financial report includes fund financial statements in addition to the government -wide financial statements. While
the government -wide statements present the City's finances based on the type of activity, general government versus business -
type, the fund financial statements are presented by fund type such as the general fund, special revenue funds, proprietary
funds, and fiduciary funds. A fund is a specific fiscal and accounting entity with a self -balancing set of accounts used to
account for specific activities or to meet certain objectives. Funds are often set up in accordance with special regulations,
restriction or limitations. The City of Federal Way uses fund accounting to ensure and show compliance with finance -related
legal requirements. The City's funds are divided into three categories: governmental fund, proprietary funds, and fiduciary
funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions as are reported in governmental activities in the
government -wide financial statements. However, unlike the government -wide financial statements, governmental fund
financial statements focus on near -term inflows and outflows of spendable resources as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term
financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to
compare the information presented for governmental funds with similar information presented for government -wide financial
statements. By doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City of Federal Way maintains twenty-one individual governmental funds. The City's seven major governmental funds,
the general fund, street fund, utility tax fund, debt service fund, performing arts and event center operations fund,
transportation fund, and performing arts & events center capital fund are presented separately in the governmental funds
balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances. The remaining
Page 15
governmental funds are combined into a single column labeled non -major governmental funds. Individual fund data for each
of the non -major governmental funds can be found in combining statements later on in this report.
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, Utility Tax, and
Performing Arts & Event Center Funds as a basic financial statement. The basic governmental fund financial statements can
be found on pages after the government -wide statements of this report.
Proprietary Funds
The City of Federal Way maintains two types of proprietary funds. Enterprise funds are used to report the same functions
presented as business -type activities in the government -wide statements. The City uses enterprise funds to account for its
Surface Water Management and the Dumas Bay Centre. Internal service funds are an accounting device used to accumulate
and allocate costs internally among the City's various functions. The City uses internal service funds to account for its risk
management, information systems, mail and duplication services, fleet of vehicles and motorized equipment, facilities
management, health insurance, and unemployment services.
Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The
proprietary fund financial statements provide separate information for the Surface Water Management fund and for the Dumas
Bay Centre. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data is provided in the form of combining statements elsewhere in this report.
The proprietary fund financial statements can be found following the governmental fund statements in this report.
Fiduciary Funds
The City of Federal Way maintains one fiduciary fund. Resources in this fund are held for the benefit of parties outside the
government. These funds are not available to support City programs so are not reflected in the government -wide financial
statements. The accounting for fiduciary funds is similar to that of proprietary funds. (see pages 41 and 42).
Notes to the Financial Statements
The notes provide additional information that is essential to the full understanding of the data provided in the government -wide
and fund financial statements. The notes to the financial statements can be found immediately following the fund financial
statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents the combining statements for
non -major governmental funds, internal service funds, and capital assets of governmental funds. The City Council passed
resolution 18-741 on September 4`h, 2018 to walk away from the SCORE interlocal agreement effective January I'`, 2020. At
the April 16, 2019 council meeting the City Council decided to bond the City portion of the SCORE debt separately from the
SCORE entity. The City currently owes 10,945,000 in principal payments as of 12/31/2019.
Page 16
GOVERNMENT -WIDE FINANCIAL ANALYSIS
This section provides analysis of the government -wide financial statements including long-term and short-term information
about the City's overall financial condition. The following tables address the financial results of the City as a whole.
Current and other assets
Capital assets and CIP,
net of accum. depreciation
Total assets
CONDENSED STATEMENT OF NET POSITION
As of December 31, 2019 and 2018
Governmental Activities Business -Type Activities Total
2019 2018 2019 2018 2019 2018
$ 87,153,689 $94,949,966 $ 7,421,932 $7,847,840 $ 94,575,621 $ 102,797,806
485,942,156 486,461,096 63,106,023 62,422,174 549,048,180 548,883,270
573,095,845 581,411,062 70,527,956 70,270,014 643,623,801 651,681,076
Deferred ouflows ofresources 2,790,503 2,467,799 172,610 168,933 2963113 2,636,732
Total deferred outflows of resources 2,790,503 2,467,799 172,610 168,933 2:963:113 2,636,732
Long-term liabilities
Other liabilities
42,582,328 40,499,660 754,671 1,117,846 43,336,999 41,617,506
7,719,810 8,138,161 725,376 830,505 8,445,186 8,968,666
Total liabilities 50,302,138 48,637,821 1,480,047 1,948,351 51,782,185 50,586,172
Deferred inflows ofresources 6,129,025 5,508,557 376,412 344,891 6505437 5,853,448
Total deferred inflows of resources 6,129,025 5,508,557 376,412 344,891 6:505:437 5,853,448
Net position:
Net investment in:
capital assets
Restricted
Unrestricted
Total net position
Analysis of Net Position
463,177,653 467,610,817
18,878,459 20,916,203
37,399,073 41,205,463
63,106,022 62,326,054
33,261 39,867
5,704,824 5,779,784
526,283,675 529,936,871
18,911,720 20,956,070
43,103,897 46,985,247
$ 519,455,185 $ 529,732,483 $ 68,844,107 $ 68,145,705 $ 588,299,292 $ 597,878,188
Total net position of the primary government of $588.3 million at December 31, 2019 decreased by $9.6 million or 1.6%
compared to December 31, 2018. The decrease is due to governmental type activities decrease of $10.3 million, offset by
business -type activities increase of $0.7 million. More detail on the changes in net position are described below under
Governmental and Business -Type activities.
The largest component of the City's net position, 89% or $526.3 million, is net investment in capital assets. These capital
assets such as land, streets, trails, parks, police vehicles, and parks equipment are used to provide services to the citizens.
Consequently, these assets are not available to sell and convert to cash for future spending.
Approximately 1.9% or $11.0 million (page 27) of the total net position of the city are restricted for use on capital projects or
are earmarked for current approved capital projects. Some of the major capital projects the funds are being used for include
Adaptive Traffic Control System Project, SR99 HOV Lanes Phase V project, City Center Access Phase I, and Grand staircase
project. The City attempts to fund capital construction projects on a pay-as-you-go basis, aggressively pursuing grant funding
and cost sharing with developers to construct large projects in the City that impact the economy and transportation systems.
The remaining balance of restricted net position of $7.9 million are for: $0.64 million for police special funds, and court trust,
$0.03 million for steel lake and north lake management district, $0.75 million for peg and franchise fees for educational and
governmental access services, $1.35 million for lodging tax, $1.19 million for paths and trails, $0.03 million for Community
Development Block Grant, and $3.93 million for debt service.
The unrestricted business -type activities portion of $5.7 million; $4.2 million can only be spent on surface water management
and the remaining $1.5 million on improvements to Dumas Bay Centre and Knutzen Family Theatre. Maintenance of catch
basins, pump stations, storm drain flushing, and other capital construction projects such as Marine Hills Conveyance System
pipe upgrades and Lakota Wetland Berm Repair are examples of utility activities. The unrestricted net position can only be
spent within the fund it is in, and cannot benefit another fund within the city.
Other functions of the City may access the remaining $37.4 million in governmental activities unrestricted net position to meet
ongoing obligation to citizens and creditors. Examples of other City obligations which net position may be used for are public
safety, economic development, parks maintenance, ongoing street maintenance, and committed funds for capital projects.
At the end of the fiscal year, the City of Federal Way reported positive balances in all three categories of net position, for the
government as a whole, as well as for the separate governmental and business -type activities.
Page 17
Governmental Activities:
Current and other assets decreased by $7.8 million or 8.2% primarily due to $16.4 million loss on investment in SCORE joint
venture, restricted retainage asset decrease of $1.1 million due to completion of Performing Arts & Event Center, a $1.1
million decrease of due from other governments due to less transportation grants accrued, and an increase of $0.5 million in
general fund expenditures, offset by $4.8 million in bond funding received for the Performing Arts & Event Center capital
project, $1.2 million increase in sales tax, $1.0 million increase in real estate excise tax, $2.4 million increase in community
development and public works permits and fees, Valleycomm joint venture increase of $0.5 million, receivables increase of
$0.3 million due to taxes accrued but not yet received, and a net pension asset increase of $1.0 million.
Capitals assets and CIP, net of accumulated depreciation decreased by $0.5 million or 0.1 % primarily due to a prior period
reduction of $1.8 million (See Note 15 on page xx), offset by the net addition of assets in the current year of $1.3 million (See
Note 8 on page 59). The prior period adjustment is due to construction in progress of $0.97 million classified as governmental -
type activity when it should have been business -type activity, and $0.83 million in maintenance for S 356t}' St SR99-SR161 that
was classified as construction in progress. The net addition of assets of $1.3 million is primarily due to construction in
progress increase of $6.9 million for projects in ongoing construction including SR99 HOV Lanes Phase 5, Downtown
staircase project, Streetlight LED conversion project, and City Center Access Phase I, buildings and improvements other than
buildings increase of $0.8 million primarily for Saghalie park field turf, infrastructure increase of $3.3 million primarily for
completed street construction project S 356"' Street SR99 to SR161, machinery and equipment increase of $1.1 million for fleet
and information technology capital purchases, offset by current year depreciation of capital assets of $10.9 million.
Deferred outflows of resources increased by $0.3 million for governmental activities due to changes in actuarial assumptions
for GASB 68 state sponsored pension plans including 2.75% total economic inflation, 3.50% salary inflation, salary increases,
7.4% investment rate of return, and updated modeling changes. (See page 16).
Long-term liabilities increased by $2.1 million or 5.1 % due to the addition of $4.8 million in LTGO tax bond for Performing
Arts & Event Center, offset by reduction of $1.7 million net pension liability for GASB 68 state sponsored pension plan, and
long term debt decrease of $1.0 million for General obligation debt. (See Note 11 on page 71).
Other liabilities decreased by $0.4 million or 5.1% primarily due to retainage payable decrease of $0.9 million from the
completion of the Performing Arts & Event Center, offset by unearned revenue increase of $0.3 million from Federal Way
Community Center and Performing Arts & Event Center operations, and customer deposits increase of $0.2 million due to
more developer projects occurring within the city.
Deferred inflows of resources increased by $0.6 million for governmental activities due to higher than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans (See page 16).
Net investments in capital assets decreased by $4.4 million or 0.9% primarily due to the addition of $4.8 million in Performing
Arts & Event Center related debt, offset by a decrease of $0.5 million in capital assets and CIP, net of accumulated
depreciation explained in the above capital assets description (See page 16), and a decrease in other long-term liabilities for
capital related debt.
Restricted net position represents amounts that must be used in accordance with external restrictions, and decreased by $2.0
million or 9.7% from the prior year primarily due to a reduction in the Transportation fund due to real estate excise tax being
spent on projects for the city's streets and roads. Other restricted funding is comprised of debt service, peg fees for
government access channel under contracts and studies fund (page 52), paths & trails funding, and lodging tax.
The remaining Unrestricted net position decreased by $3.8 million or 9.2% primarily due to loss on investment in SCORE joint
venture, offset by increases in taxes described above.
Page 18
Business -Type Activities:
Current and other assets decreased by $0.4 million or 5.4% primarily due to a decrease in cash and cash equivalents of $0.4
million from surface water management operations.
Capitals assets and CIP, net of accumulated depreciation increased by $0.7 million or 1.1% primarily due an increase of $1.1
million in infrastructure additions due to the completion of projects such as S 356th Street SR99 to SR 161, and $0.3 million
increase due to the completion of West Hylebos Wetlands Trail. This was offset by the addition of accumulated depreciation
of $0.7 million (See Note 8 on page 60).
Deferred outflows of resources increased by $0.004 million for business -type activities due to changes in actuarial assumptions
for GASB 68 state sponsored pension plans including 2.75% total economic inflation, 3.50% salary inflation, salary increases,
7.4% investment rate of return, and updated modeling changes. (See page 16).
Long-term liabilities decreased by $0.4 million due to current year GASB 68 adjustment to pension liability of $0.3 million and
paying down of Public works trust fund loans of $0.1 million. (See page 71).
Other liabilities decreased by $0.11 million or 12.7% primarily due to a decrease in unearned revenue for Dumas Bay Centre
future rentals at the facility, and surface water management unearned fees.
Deferred inflows of resources increased by $0.03 million for business -type activities due to higher than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans (See page 16).
Net investments in capital assets increased $0.8 million or 1.3% primarily due to a $1.4 million increase in surface water
management infrastructure and improvement other than buildings additions, offset by $0.7 million in accumulated
depreciation, and no outstanding balance in Public Works trust fund loan of $0.1 million.
Unrestricted net position decreased by $0.07 million or 1.3% primarily due to the decreases in current and other assets
described above.
Page 19
CHANGES IN NET POSITION
For the Years Ended December 31, 2019 and 2018
Governmental Activities
Business -Type
Activities
Total
2019
2018
2019
2018
2019
2018
Revenues:
Programs revenues:
Charges for services
$ 20,618,894
$ 18,444,808
$ 5,325,584
$ 5,035,591
$ 25,944,478
$ 23,480,399
Operating grants & contrib.
6,082,363
6,099,833
31,718
48,504
6,114,081
6,148,337
Capital grants & contrib.
6,201,345
8,549,593
144,577
622,735
6,345,922
9,172,328
General revenues:
Property taxes
11,095,263
10,937,481
-
-
11,095,263
10,937,481
Sales tax
16,051,779
14,731,318
-
-
16,051,779
14,731,318
Local criminal justice sales tax
3,056,010
2,934,354
-
-
3,056,010
2,934,354
Utility tax
11,102,083
11,719,589
-
-
11,102,083
11,719,589
Real estate excise tax
5,171,643
4,240,825
-
-
5,171,643
4,240,825
Other taxes
1,356,978
1,392,982
-
-
1,356,978
1,392,982
Other
2,867,900
2,405,133
192,598
132,692
3,060,498
2,537,825
Total Revenue
83,604,258
81,455,916
5,694,478
5,839,522
89,298,736
87,295,438
Expenses:
General government
4,620,477
4,457,083
-
-
4,620,477
4,457,083
Security of persons & property
38,010,778
35,513,749
-
-
38,010,778
35,513,749
Transportation
14,145,856
15,227,484
-
-
14,145,856
15,227,484
Physical environment
519,163
487,104
-
-
519,163
487,104
Economic environment
7,304,691
4,739,077
-
-
7,304,691
4,739,077
Health and human services
1,540,723
1,432,259
-
-
1,540,723
1,432,259
Culture and recreation
9,438,271
9,280,828
-
-
9,438,271
9,280,828
Interest on long-term debt
347,437
542,802
-
-
347,437
542,802
Surface Water Management
-
-
4,864,902
4,620,161
4,864,902
4,620,161
Dumas Bay Centre
-
-
880,135
921,839
880,135
921,839
Total Expenses
75,927,396
71,680,386
5,745,037
5,542,000
81,672,433
77,222,386
Change in net position before
7,676,862
9,775,530
(50,559)
297,522
7,626,303
10,073,052
transfers
Loss on investment in joint venture
(16,377,170)
-
-
-
(16,377,170)
-
Transfers
225,307
(123,502)
(225,307)
123,502
-
Change in net position
(8,475,001)
9,652,028
(275,866)
421,024
(8,750,867)
10,073,052
Netposition- beginning
529,732,483
518,297,127
68,145,705
67,498,054
597,878,188
585,795,181
Prior period adjustment Note 15
(1,802,297)
1,783,328
974,268
226,627
(828,029)
2,009,955
Adjusted net position - beginning
527,930,186
520,080,455
69,119,973
67,724,681
597,050,159
587,805,136
Netposition- ending
$519,455,185
$529,732,483
$ 68,844,107
$ 68,145,705
$588,299,292
$597,878,188
Page 20
Analysis of the change in net position:
Total government -wide revenues of the primary government increased by $2.1 million or 2.6% and total expenses increased by
$4.2 million or 5.9% over the prior year. These changes are discussed in more detail below.
Governmental Activities:
Governmental activities contributed $8.5 million or 96.8% of the total change in net position of negative $8.8 million. The
prior year change in net position was positive $10.1 million. The primary decrease under 2018 is due to the following
revenues, and expenses described below. There was also a decrease of $0.8 million due to prior period adjustment for capital
assets described in note 15. (See page 19).
Total revenues for governmental activities increased by $2.1 million or 2.6% due to taxes and general revenue increase of $2.3
million comprised of sales and criminal justice sales tax of $1.4 million, property tax of $0.2 million, real estate excise tax of
$0.9 million, investment earnings of $0.3 million, other miscellaneous revenue of $0.1 million, offset by utility tax decrease of
$0.6 million. In addition, charges for services increased by $2.1 million primarily due to an increase in community
development and public works permits and fees. Capital grants & contributions decreased by $2.3 million from transportation
capital projects receiving less reimbursement from state and federal grants, and less capital contributions from developers.
Total expenses for governmental activities increased by $4.2 million or 5.9%. The net increase is due to increases in the
following expense categories: A $0.2 million increase in "General government' is due to an increase in election and hearing
examiner services $0.1 million, and $0.1 million in cost of living adjustments, health insurance and pension cost increases. A
$2.5 million increase in "Security of persons & property" is due to: $1.2 million increase in cost of living adjustments, health
insurance and pension cost increases, and vacation payouts, $0.4 million increase in pension expense for GASB 68 reporting,
$0.9 million increase in expense due to leaving SCORE investment in joint venture. A $2.6 million increase in "Economic
Environment' is due to: $1.6 million depreciation expense for Performing Arts and Event Center, $0.9 million in salaries and
wages and professional services related to the operation of the Performing Arts and Event Center, and $0.1 million in economic
and community development professional services and salaries and wages. A $0.2 million increase in "Culture and recreation"
is due to: $0.2 million increase in cost of living adjustments, health insurance and pension cost increases, and repairs and
maintenance expenditures at the Federal Way Community Center. A $0.1 million increase in "Health and human services" is
due to: $0.1 million increase in human services Department of Commerce reimbursed expenditures. The increase is offset by a
$1.1 million decrease in "Transportation" due to $1.1 million decrease in asphalt overlay of streets, and street and traffic
maintenance.
A loss on investment in joint venture of $16.4 million was reported due to leaving SCORE as of 12/31/2019 and having no
equity interest in the facility. On September 4th, 2018 the City Council decided to withdraw from the SCORE interlocal
agreement effective January 1st, 2020 per city resolution 18-741 in 2019. At the April 16, 2019 council meeting the City
Council decided to bond the City portion of the SCORE debt separately from the SCORE entity. Although the city will not
maintain ownership of the facility, the City of Federal Way is still responsible for paying their proportionate share of SCORE
debt service in the amount of 10,945,000 as of 12/31/2019.
Governmental Activities - Revenues
Chargesfor
Other. 3.4% services, 24.7%
Operating grants
& contrlhutlens.
Other taxes,. 7A%
24.7%
Capital grants and
cantrihutlon. 7.4%
Sales tax,
Governmental Activities - Expenses
! Rhandhuman
services, 2.0%
Cultureand
reatiw, 12.4%
Interest on long-
term deht, a5%
Page 21
Business -Type Activities:
Business -type activities of the City's Surface Water Management system and Dumas Bay Centre decreased the City's net
position by $0.3 million. There was an addition of $0.97 million for prior period adjustment for capital assets described in
note 15. The primary change compared to 2019 is due to the following revenues and expenses described below.
Total revenues decreased by $0.1 million or 2.5% under 2018, due to a decrease in grant revenue and developer contributions
for Surface Water Management capital projects. Transfers net change of $0.3 million is primarily due to a reduction of
transfers in to Dumas Bay Centre of $0.1 million, and a $0.2 million additional transfer out from Surface Water Management
to the Transportation CIP Fund.
Total expenses increased by $0.2 million or 3.7% due to a $0.2 million increase in Surface Water Management maintenance
services. Dumas Bay Centre expenditures decreased minimally from the prior year.
F_ Business -Type Activities - Revenues
chargesfo
semces,93.
grants
Mons,
fi
;rants &
utfons,
3.4%
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Business -Type Activities - Expenses
uumas o
Centre, 15
As noted earlier, the City of Federal Way uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements.
Governmental funds
The focus of the City of Federal Way's governmental funds is to provide information on near -term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
unrestricted fund balance may serve as a useful measure of a government's net resources available for spending at the end of
the fiscal year.
As of the end of 2019, the City's governmental funds had a combined ending fund balance of $44.6 million which is a increase
of $6.7 million from the prior year. Approximately 36% or $15.9 million of the fund balance amount is unrestricted General
Fund balance, which is available for spending at the City Council's discretion. Non -spendable fund balance of $0.2M is
comprised of court trust and prepaid insurance/flex plan of $0.2M. Restricted fund balance of $18.6M is comprised of $2.6M
in transportation capital project funding sources including real estate excise tax (BEET), mitigation impact fees, surface water
management fees, and gas tax; $3.9M for future debt service payments; $1.5M in parks capital project funding sources
including REET, mitigation impact fees, and paths and trails funding; $2.5M LIFT sales tax for downtown redevelopment
infrastructure and parks projects; $1.3M in hotel/motel lodging tax for promotion of tourism; $1.2M in paths & trails parks
levy dedicated for paths & trails projects; $0.7M for special contracts/studies, $0.03M in REET for city facilities capital
projects, $4.3M in REET for future capital projects and debt service payments, $0.4M in Police seizure funds, and $0.03M for
Community Development Block Grant funds. Committed fund balance of $9.9M includes amounts that can be used only for
the specific purposes determined by a formal action of the government's highest level of decision -making authority. The
committed fund balance is detailed by fund under the fund balance classification in Note 1.
The General Fund is the chief operating fund of the City. Revenues and other sources totaling $53AM and expenditures and
other uses totaling $52AM, resulted in a total fund balance increase by $1.01 million or 6.5%. Total ending fund balance of
$16.6M, is $3.70M above the budgeted ending fund balance in the fund of $12.9M. Fund balance policy resolution 18-732 set
the General Fund and strategic reserve policy at $12M. The City had a beginning balance adjustment of $1.79M. The
Page 22
remaining $1.91M of $3.70M increase in ending fund balance compared to budget is made up of a decrease of $2.45 million in
expenditures/other uses, offset by a $0.54 million decrease in revenues/other sources. The detail of these increases/decreases is
explained under General Fund budgetary and actual highlights below.
The Street Fund has a total fund balance of $0.6 million which minimally decreased from 2018 primarily due to increased cost
of street and traffic maintenance.
The Utility Tax Fund was established to account for the 6% utility tax receipts collected by State statute for capital, debt, and
other maintenance & operations as determined by Council and the remaining 1.75% is for Voter Approved enhanced Police
and Community Safety in 2007. Total fund balance of $2.7 million increased by $0.1 million or 4% from $2.6 million due to a
decrease in transfer out from the fund for operation of other funds such as the General Fund.
The Debt Service Fund has a total fund balance of $3.9 million, a $1.0 million increase above the $3.0 million 2018 fund
balance, due transfer in from utility tax, offset by servicing its annual debt payments. The City has adequate funds to service
its annual debt payments.
The Performing Arts and Event Center Operations Fund was established to account for receipts and disbursements of the
operation of the Performing Arts & Event Center facility. The ending fund balance was negative $110,546 due to operations of
the facility costing more than the revenue generated from events. Operations were subsidized by general fund in the amount of
$1.5 million in 2019.
The Transportation Fund is used to account for the City's expenditures incurred to improve existing traffic signals, install new
signalization, improve major roadways and arterials involving the design and construction of new sections of streets, the
widening of roadways to provide additional vehicle lanes, and the installation of sidewalks and landscaping. The major source
of revenue for this fund is grants from other agencies and contributions from other funds. Total ending fund balance decreased
by $4.10 million from $8.94 million in 2018 to $4.84 million in 2019 due to spending on large projects such as the Adaptive
Traffic Control system Project, City Center Access Phase I, Street Light LED Conversion project, and Military Road & S 298 b
Street Compacted Roundabout.
The Performing Arts & Event Center Construction Project Fund was used to accumulate the cost for the construction of the arts
& event center. Ending fund balance increased by 7.4 million due to paying off the interfund loan, and bonding $4.84 million.
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 $4.2 million, and
those for Dumas Bay Centre amounted to $1.5 million. The total changes in net position for both funds were $0.6 million
increase and $0.05 million increase, respectively. Other factors concerning the finances of these two funds have already been
addressed in the discussion of the City of Federal Way's business -type activities.
GENERAL FUND BUDGETARY AND ACTUAL HIGHLIGHTS
The City of Federal Way budgets on a biennial basis with each budget beginning in an odd numbered year. Appropriations for
operating funds are authorized for two years, but must be reviewed and reauthorized by the City Council in the middle of the
biennial period. In 2019, the City made budget adjustments. The following discussion is reflective only of the current year of
the biennium.
The General Fund operating expenditure and other financing use budgets increased by $1.3 million and $1.5 million
respectively between the original adopted budget and the adjusted budget for the 2019 fiscal year. The following is the major
changes for the 2019 budget:
• Added $0.14 million for public defender contract expenditures.
• Added $0.13 million for outside human service agencies contract expenditures.
• Added $0.09 million for community development nuisance abatement, and supplies expenditures.
• Added $0.19 million in parks maintenance services and supplies expenditures.
• Added $0.05 million in clerk election and hearing examiner expenditures.
• Added $0.13 million in Police contracted overtime expenditures and equipment purchases.
• Added $0.30 million in Finance, IT, and Community Development positions and temporary help.
• Added $0.12 million in general government appraisal and miscellaneous services.
Page 23
• Added $0.10 million in Human Resources for salary and workload study.
• Added $0.37 million for transfer out to street fund to subsidize maintenance operations.
• Added $1.06 million for transfer out to performing arts & event center fund to subsidize operations.
Budget adjustments to revenues and other sources include: Adjustments to beginning balance of $3.09 million; increase in
community development permits and fees of $1.48 million; increase in sales tax of $0.32 million; increase in criminal justice
sales tax of $0.32 million; increase in property tax revenue of $0.18 million; increase in admissions tax revenue of $0.12
million; increase in gambling tax of $0.06 million; increase in state shared revenue of $0.26 million; increase in state and local
grants of $0.21 million; increase in Parks recreation program rental revenue of $0.06 million; increase in leasing fees of $0.11
million; increase in interest earnings $0.10 million; decrease in utility tax transfer in of $0.41 million; decrease in business
license fees of $0.09 million; and decrease in court revenue of $0.18 million.
The General Fund ending fund balance of $16.60 million is $3.70 million above the projected $12.90 million for 2019 year-
end. A $1.79 million increase in the beginning fund balance accounts for 48% of this increase in the ending fund balance.
The $3.70 million increase in ending fund balance compared to budget is made up of $1.79 million increase in beginning fund
balance, a decrease of $2.45 million in expenditures/other uses, offset by a decrease of $0.54 million in revenues/other sources.
The $0.54 million decrease in revenues/other sources is primarily attributed to a decrease in utility tax transfer in of $1.84
million, offset by an increase of $0.35 million in taxes, $0.44 million in licenses and permits, $0.08 million in
intergovernmental revenues, $0.19 million in service charges and fees, $0.06 million in fines and forfeitures, $0.10 million in
interest, and $0.07 million in other revenues.
The $2.45 million unspent expenditures/other uses are primarily attributable to: $2.45 million in various savings and timing of
payments in General Fund departments such as Economic Development, Finance, Information Technology, Community
Development, Public Works, and the hiring delay of Police Officers.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City of Federal Way's investment in capital assets for its governmental and business -type activities as of December 31,
2019 amounts to $549.0 million (net of accumulated depreciation). This investment in capital assets includes land, buildings,
improvements, machinery and equipment, infrastructure, park facilities and construction in progress. For more details, please
see Note 8, and prior period adjustment Note 15, pages 60 and 77.
CAPITAL ASSETS AT YEAR-END, NET OF DEPRECIATION
Land
Building and improvements
Machinery and equipment
Infrastructure
Construction in progress
Total Capital Assets
Governmental Business -Type
Activities Activities
283,686,722 $ 11,340,293 $
53,659,510 4,653,452
6,800,270 69,045
107,324,414 47,004,843
Total
2019 2018
295,027,015 $ 294,991,811
58,312,962 61,875,342
6,869,315 6,804,488
154,329,257 155,774,247
34,471,239 38,391 34,509,630 29,437,382
$ 485,942,156 $ 63,106,023 $ 549,048,180 $ 548,883,270
Major capital asset events during the current fiscal year included the following amounts: Construction in progress added
for expanding and improving the city streets, traffic corridors, and surface water management totaled $8.9 million and
Performing Arts and Event Center and various park improvements for $0.2 million; offset by a $4.0 million reduction
due to the completion of various park projects, and street, traffic and surface water management related projects.
Additionally there was land purchased and donated of $0.03 million. Other improvements, buildings, infrastructure, and
machinery and equipment decrease of $4.9 million is primarily due to current year depreciation on assets. Remaining
commitments for capital assets is described in Note 8.
Page 24
Long-term debt
At the end of 2019, the City of Federal Way had total debt principal balance outstanding of $33.5 million. The future principal
and interest payments which are backed by the full faith and credit of the government will be $42.6 million, and average annual
debt service of $1.9 million (See Note 11 pages 70 thru 73).
LONGTERM DEBT (FUTURE PRINCIPAL AND INTEREST PAYMENTS)
Governmental Business -Type
Activitie s Activitie s Total
General obligation bonds $ 42,593,024 $ - $ 42,593,024
Total $ 42,593,024 $ - $ 42,593,024
The City's principal debt increased by $1.9 million due to the addition of $4.8 million in PAEC debt, offset by reduction of
$1.9 million in SCORE debt due to refinancing, and annual debt service payments of $1.0 million for 2017 Target Property
Bond, 2013 Refunded Community Center Bond, 2019 Section 108 loan, and Public Works Trust Fund Loan.
In February 2017, Moody's Investors Service upgraded from Aa3 to Aa2 rating for the City's 2013 Limited Tax General
Obligation Refunding Bonds.
Washington State statutes limit the amount of debt a government entity may issue to 7.5% of its total assessed valuation,
subject to 60% majority vote of qualified electors. Of the 7.5% limit, 2.5% is for general purposes, 2.5% for open space/park
facilities, and 2.5% for utilities. Non -voted general purpose indebtedness is limited to 1.5% of assessed valuation and the
combination of voted and non -voted general purpose indebtedness cannot exceed 2.5% of assessed valuation.
The City's taxable assessed valuation for 2019 was $11.972 billion and the total amount of debt the City may issue is $868.1
million. Remaining legal debt capacities as of December 31, 2019 are:
General government (no vote required)
General government (3/5 majority vote required)
Parks and open space (3/5 majority vote required)
Utilities (3/5 majority vote required)
Total Capacity
$149,759,386 (1.5% X 11.972B) +$3.7M - $33.5M
$119,724,092 (1.0%X 11.972B)
$299,310,231 (2.5% X 11.972B)
$299,310,231 (2.5%X11.972B)
$868,103,940 (See page 132)
Additional information on the City of Federal Way's long-term debt can be found in Note 11 on pages 70 thru 73 and in the
Statistical Section of this report.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Federal Way's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to Finance Department, City of Federal Way, 33325 8"' Avenue South,
Federal Way, Washington 98003, telephone 253-835-2527, or visit the City's website at www.cityoffederalway.com.
Page 25
BASIC FINANCIAL STATEMENTS
Page 26
Government -Wide Financial Statements
Statement of Net Position
This statement provides information on all city assets and deferred outflows of resources and liabilities and deferred inflows
of resources, with the difference between the two reported as net position.
Statement of Activities
This statement is focused on both the gross and net costs of various functions, including both governmental and business -type
activities, which are supported by the City's general tax and other revenues.
Page 27
STATEMENT OF NET POSITION
December 31, 2019
ASSETS
Cash & cash equivalents
Investments
Receivables (net)
Due from other governments
Prepaid items
Inventories
Restricted assets:
Seizure funds/covert funds/municipal trust/retainage
Investment in joint venture
Capital assets not being depreciated:
Land
Construction in progress
Capital assets net of accumulated depreciation:
Buildings/structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Net Pension Asset
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS
LIABILITIES
Accounts payable and accruals
Unearned revenue
Retainage payable
Customer deposits
Noncurrent Liabilities:
Due within one year
Due in more than one year
Net Pension Liability
Other Long -Term Liabilities
Total Liabilities
DEFERRED INFLOW OF RESOURCES RELATED
TO PENSIONS
NET POSITION
Net investment in capital assets
Restricted for:
Debt service
Capital projects
Steel Lake & North Lake Mgmt District
Other
Unrestricted
Total Net Position
Governmental
Business -type
Activities
Activities
Total
$ 58,065,297
$ 6,522,726
$ 64,588,023
4,213,896
739,769
4,953,665
3,117,458
139,271
3,256,729
6,318,080
20,166
6,338,246
47,612
-
47,612
9,339
-
9,339
813,924
-
813,924
5,451,595
-
5,451,595
283,686,722
11,340,293
295,027,015
34,471,240
38,391
34,509,631
46,531,870
782,557
47,314,427
7,127,640
3,870,895
10,998,535
6,800,270
69,046
6,869,316
107,324,414
47,004,842
154,329,256
9,116,488
-
9,116,488
573,095,845
70,527,956
643,623,801
2,790,503
172,610
2,963,113
5,151,623
302,453
5,454,076
500,230
393,901
894,131
435,937
22,235
458,172
1,632,020
6,787
1,638,807
2,038,786
7,547
2,046,333
40,543,542
747,124
41,290,666
5,122,430
659,859
5,782,289
35,421,112
87,265
35,508,377
50,302,138
1,480,047
51,782,185
6,129,025
376,412
6,505,437
463,177,653
63,106,022
526,283,675
3,933,732
-
3,933,732
10,979,414
-
10,979,414
-
33,261
33,261
3,965,313
-
3,965,313
37,399,073
5,704,824
43,103,897
$ 519,455,185
$ 68,844,107
$ 588,299,292
Page 28
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
STATEMENT OF ACTIVITIES
For the Year ended December 31, 2019
Program Revenues
Net (Expense) Revenue & Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business -type
Expenses Services Contributions Contributions Activities Activities Total
S 4,620,477
S 3,005,077
S 1,633,378
S -
38,010,778
6,142,776
1,355,498
-
14,145,856
3,440,597
1,908,297
3,827,852
519,163
431,901
115,332
-
7,304,691
5,385,727
79,374
1,913,789
1,540,723
-
894,226
-
9,438,271
2,212,816
96,258
459,704
347,437
-
-
-
75,927,396
20,618,894
6,082,363
6,201,345
S 17,978 S
S 17,978
(30,512,504)
(30,512,504)
(4,969,111)
(4,969,111)
28,070
28,070
74,199
74,199
(646,497)
(646,497)
(6,669,493)
(6,669,493)
(347,437)
(347,437)
(43,024,794)
(43,024,794)
Business -type Activities:
Surface Water Management 4,864,902 4,439,775 31,718 144,577 (248,832) (248,832)
Dumas Bay Centre 880,135 885,809 - - 5,674 5,674
Total business -type activities 5,745,037 5,325,584 31,718 144,577 (243,158) (243,158)
Total S 81,672,433 S 25,944,478 S 6,114,081 S 6,345,922 (43,024,794) (243,158) (43,267,952)
General revenues:
Property tax
Sales tax
Local criminal justice sales tax
Utility tax
Real estate excise tax
Gambling tax
Hotel/motel tax
Admissions Tax
Leasehold excise tax
Other revenue
Investment earnings
Loss on investment in joint venture
Transfers
Total general revenues (loss) and transfers
Change in net position
Net position at beginning of year
Prior period adjustment (See Note 15)
Adjusted beginning net position
Net position at end of year
11,095,263 11,095,263
16,051,779 16,051,779
3,056,010 3,056,010
11,102,083 11,102,083
5,171,643 5,171,643
232,942 232,942
290,601 290,601
827,537 827,537
5,898 5,898
1,581,470 1,581,470
1,286,430 192,598 1,479,028
(16,377,170) - (16,377,170)
225,307 (225,307) -
34,549,793 (32,709) 34,517,085
(8,475,001) (275,866) (8,750,867)
529,732,483 68,145,705 597,878,188
(1,802,297) 974,268 (828,029)
527,930,186 69,119,973 597,050,159
S 519,455,185 $68,844,107 $ 588,299,292
Page 29
ASSETS
Cash and Cash Equivalents
Investments
Prepaid items
Receivables (net):
Taxes
Accounts and contracts
Restricted cash
Due from other governments
Interfund loans receivable
Inventories
TOTAL ASSETS
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2019
General Street
$ 11,381,742 $ 1,209,620
1,369,078 147,660
7,541 -
251,079 -
409,623 125,087
637,939 -
4,145,080 307,146
1,732,790 -
Debt
Utility Tax Service
$ 1,518,812 $ 3,698,800
208,447 270,440
1,117,995
19,934,872 1,789,513 2,845,254 3,969,240
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
993,297
286,832 2,200 35,508
Accounts/payroll payable
1,230,116
105,134 128,426 -
Retainage payable
-
5,738 - -
Deposits payable
879,076
720,191 -
Interfund loans payable
-
-
Unearned revenue
89,061
73,893 - -
TOTAL LIABILITIES
3,191,550
1,191,788 130,626 35,508
DEFERRED INFLOWS OF RESOURCES
FOR UNAVAILABLE PROPERTY TAXES
142,296 - -
Fund Balance:
Nonspendable
232,353 - -
Restricted
413,128 - - 3,933,732
Committed
19,350 597,725 2,714,628 -
Unassigned
15,936,195 - - -
TOTAL FUND BALANCES
16,601,026 597,725 2,714,628 3,933,732
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 19,934,872 $ 1,789,513 $ 2,845,254 $ 3,969,240
Page 30
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2019
Performing Arts
& Event Center
Performing Arts
Nonmajor
Operations
Transportation & Event Ctr
Governmental
Total
ASSETS
Cash and Cash Equivalents
$ 87,280
$ 5,585,951 $
$ 13,954,632 $
37,436,837
Investments
32,716
619,006
1,566,549
4,213,896
Prepaid items
35,071
-
-
42,612
Receivables (net):
Taxes
-
-
935,763
2,304,837
Accounts and contracts
46,419
113,524
117,968
812,621
Restricted Cash
-
175,985
-
813,924
Due from other governments
1,281,466
583,495
6,317,187
Interfund loans receivable
-
-
-
1,732,790
Inventories
9,339
-
-
9,339
TOTAL ASSETS
210,825
7,775,932
17,158,407
53,684,043
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
211,540
950,942
447,224
2,927,543
Accounts/payroll payable
42,007
28,677
198,960
1,733,320
Retainage payable
-
376,659
53,540
435,937
Deposits payable
-
32,753
1,632,020
Interfund loans payable
-
1,507,972
224,818
1,732,790
Unearned revenue
67,824
75,712
193,740
500,230
TOTAL LIABILITIES
321,371
2,939,962
1,151,035
8,961,840
DEFERRED INFLOWS OF RESOURCES
FOR UNAVAILABLE PROPERTY TAXES
-
-
-
142,296
Fund Balance:
Nonspendable
-
-
232,353
Restricted
2,642,669
11,656,577
18,646,106
Committed
2,193,301
4,350,795
9,875,799
Unassigned
(110,546)
-
-
15,825,649
TOTAL FUND BALANCES
(110,546)
4,835,970
16,007,372
44,579,907
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 210,825 $ 7,775,932 $ - $ 17,158,407
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not
reported in the funds. See Note 8, difference is the Internal Service fund amount of $10.73M on page 38 475,207,691
Investment in joint venture is not a financial resource and, therefore, not reported in the funds. See Note 14 $5.45M on page 77. 5,451,595
Other long-term and non -current assets are not available to pay for current -period expenditures and, therefore,
are not reported in the funds: includes deferred inflows, and net pension asset. See Note 6 $142K & Note 9 $9.12M (page 62) 9,258,784
Internal service funds are used to charge the costs of insurance, unemployment, information systems, mail and duplication,
fleet, and building to individual funds. The assets and liabilities of the internal service funds are included in governmental
activities in the statement of net position. Page 38 Internal Svc Net Position $30.52M - Adj $64.8K + $56.OK LT Comp Abs
+ $276.9K Net Pension Liability (NPL) + $158.OK Def Infl Rel to Pensions - $71.2K Def Outfl Rel to Pensions 30,878,058
Long-term liabilities, including bonds payable, pension liability, and inflows/outflows related to pensions are not due and
payable in the current period and, therefore, are not reported in the funds. See Note 11-$33.53M-$2.04M - $0.18M-$1.71M,
In Govt Wide - $5.12M NPL - $6.13M Def Infl Rel to Pensions + $2.79M Def Outfl Rel to Pensions (45,920,851)
Net position of governmental activities $ 519,455,185
Page 31
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2019
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
Debt
General Street Utility Tax Service
$ 31,091,595 $ - $ 11,102,083 $ -
5,436,535 272,699 - -
2,619,996 1,364,709 - -
4,561,036 853,270 - -
899,864 - - -
387,031 24,626 61,177 67,690
718,987 33,436 - -
45,715,044 2,548,740 11,163,260 67,690
4,841,004 - - -
34,031,215 200,641 2,957,986 -
988,356 4,413,605 - -
3,186,803 - 96,088 -
985,529 - - -
4,749,135 - 116,328 -
12,882,847
- 1,031,100
44,066 7,149
48,826,108 4,621,395 3,170,402 13,913,947
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (3,111,064) (2,072,655) 7,992,858 (13,846,257)
OTHER FINANCING SOURCES (USES)
Bond proceeds
-
-
-
10,995,000
Bond premium
-
-
-
1,714,668
Transfers in
7,684,134
2,067,685
20,000
2,113,473
Transfers out
(3,564,793)
-
(7,900,801)
-
TOTAL OTHER FINANCING
SOURCES (USES)
4,119,341
2,067,685
(7,880,801)
14,823,141
NET CHANGE IN FUND BALANCES
1,008,277
(4,970)
112,057
976,884
FUND BALANCES - BEGINNING
15,592,749
602,695
2,602,571
2,956,848
FUND BALANCES - ENDING
$ 16,601,026
$ 597,725
$ 2,714,628
$ 3,933,732
Page 32
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2019
Performing Arts
& Event Center
Performing Arts
Nonmajor
Operations
Transportation
& Event Ctr
Governmental
Total
$ -
$ -
$ -
$ 5,680,217
$ 47,873,895
-
-
-
-
5,709,234
100,000
3,346,125
813,789
2,953,610
11,198,229
839,295
1,545,744
-
2,633,202
10,432,547
-
-
-
3,577,248
4,477,112
50,722
139,075
785
311,431
1,042,537
420,360
4,152
-
404,532
1,581,467
1,410,377
5,035,096
814,574
15,560,240
82,315,021
-
13,267
4,854,271
-
- 2,063,200
39,253,042
- 1,597,999
- 2,091,561
9,091,521
- -
- 515,766
515,766
2,475,025 -
19,687 67,984
5,845,587
- -
- 564,498
1,550,027
-
- 2,577,193
7,442,656
- -
- 159,000
13,041,847
10,611 -
- 72,988
1,114,699
103,905 9,415,218
52,302 989,831
10,612,471
2,589,541 11,013,217
71,989 9,115,288
93,321,887
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,179,164) (5,978,121) 742,585 6,444,952 (11,006,866)
OTHER FINANCING SOURCES (USES)
Bond proceeds
-
-
4,790,000
-
15,785,000
Bond premium
-
-
-
-
1,714,668
Transfers in
1,516,000
2,028,307
1,818,971
1,565,926
18,814,496
Transfers out
-
(150,000)
-
(6,974,703)
(18,590,297)
TOTAL OTHER FINANCING
SOURCES (USES)
1,516,000
1,878,307
6,608,971
(5,408,777)
17,723,867
NET CHANGE IN FUND BALANCES
336,836
(4,099,814)
7,351,556
1,036,175
6,717,001
FUND BALANCES - BEGINNING
(447,382)
8,935,784
(7,351,556)
14,971,197
37,862,906
FUND BALANCES -ENDING
$ (110,546)
$ 4,835,970
$ -
$ 16,007,372
$ 44,579,907
Page 33
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2019
Amounts reported for governmental activities in the statement of activities (page 28) are
different because:
Net change in fund balances --total governmental funds (page 32)
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. (page 53)
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. (page 53)
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however,
has any effect on net position. Also, governmental funds report the issuance
proceeds of new debt as current financial resources and payment as the use
of current resources, whereas these amounts reduce the net position. (page 53)
Internal service funds are used by management to charge costs of risk management,
information systems, mail & duplication, fleet, and building systems to the funds.
(page 39) $178K - $2.9K
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in the funds.
Includes adjustment for GASB 68 pension reporting. (page 53) $2.28M - $39K
2019
$ 6,717,001
(13, 874,994)
(40,138)
(3,690,559)
175,301
2,238,388
Change in net position of governmental activities (page 28) $ (8,475,001)
Page 34
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Economic environment
Health
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 29,758,810
$ 30,744,601
$ 31,091,595
$ 346,994
4,281,048
5,000,700
5,436,535
435,835
2,039,500
2,539,963
2,619,996
80,033
3,834,014
4,367,716
4,561,036
193,320
943,401
838,401
899,864
61,463
185,616
283,016
387,031
104,015
440,246
640,883
718,987
78,104
41,482,635 44,415,280 45,715,044 1,299,764
5,376,656
5,806,896
4,841,004
965,892
34,727,029
35,000,045
34,031,215
968,830
1,105,746
1,105,746
988,356
117,390
3,238,930
3,452,571
3,186,803
265,768
962,801
1,108,748
985,529
123,219
4,598,466
4,800,558
4,749,135
51,423
-
-
44,066
(44,066)
50,009,628 51,274,564 48,826,108 2,448,456
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (8,526,993) (6,859,284) (3,111,064) 3,748,220
OTHER FINANCING SOURCES (USES)
Transfers in
9,941,849
9,528,455
7,684,134
(1,844,321)
Transfers out
(2,114,823)
(3,568,572)
(3,564,793)
3,779
TOTAL OTHER FINANCING
SOURCES (USES)
7,827,026
5,959,883
4,119,341
(1,840,542)
NET CHANGE IN FUND BALANCES
(699,967)
(899,401)
1,008,277
1,907,678
FUND BALANCES - BEGINNING
10,715,002
13,801,429
15,592,749
1,791,320
FUND BALANCES - ENDING
$ 10,015,035
$ 12,902,028
$ 16,601,026
$ 3,698,998
Page 35
STREET FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
REVENUES
Licenses and permits
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Security of persons and property
Transportation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
$ 200,000
$ 200,000
$ 272,699
$ 72,699
1,300,003
1,300,001
1,364,709
64,708
500,752
500,752
853,270
352,518
5,516
5,516
24,626
19,110
215,500
215,500
33,436
(182,064)
2,221,771 2,221,769 2,548,740 326,971
202,353 202,353 200,641
1,712
4,079,708 4,601,610 4,413,605
188,005
- - 7,149
(7,149)
4,282,061 4,803,963 4,621,395
182,568
OVER (UNDER) EXPENDITURES (2,060,290) (2,582,194) (2,072,655) 509,539
OTHER FINANCING SOURCES (USES)
Transfers in 2,060,968 2,579,808 2,067,685 (512,123)
Transfers out - - - -
TOTAL OTHER FINANCING
SOURCES (USES) 2,060,968 2,579,808 2,067,685 (512,123)
NET CHANGE IN FUND BALANCES 678 (2,386) (4,970) (2,584)
FUND BALANCES - BEGINNING 500,000 588,269 602,695 14,426
FUND BALANCES - ENDING $ 500,678 $ 585,883 $ 597,725 $ 11,842
Page 36
UTILITY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 12,307,891 $ 11,784,026
$ 11,102,083
$ (681,943)
Interest
20,000 20,000
61,177
41,177
TOTAL REVENUES
12,327,891 11,804,026
11,163,260
(640,766)
EXPENDITURES
Current:
Security of persons and property
3,251,818
3,251,818
2,957,986
293,832
Economic environment
91,119
91,119
96,088
(4,969)
Culture and recreation
103,437
103,437
116,328
(12,891)
TOTAL EXPENDITURES
3,446,374
3,446,374
3,170,402
275,972
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
8,881,517
8,357,652
7,992,858
(364,794)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
20,000 20,000 -
(8,881,516) (8,468,122) (7,900,801) 567,321
(8,881,516) (8,448,122) (7,880,801) 567,321
1 (90,470) 112,057 202,527
2,500,000 2,602,572 2,602,571 (1)
FUND BALANCES - ENDING $ 2,500,001 $ 2,512,102 $ 2,714,628 $ 202,526
Page 37
PERFORMING ARTS & EVENT CENTER OPERATIONS FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
REVENUES
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Economic environment
Debt service:
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ -
$ -
$ 100,000 $
100,000
1,081,780
550,000
839,295
289,295
45,605
45,605
50,722
5,117
290,746
509,967
420,360
(89,607)
1,418,131
1,105,572
1,410,377
304,805
1,871,986 2,078,407 2,475,025
(396,618)
- - 10,611
(10,611)
- - 103,905
(103,905)
1,871,986 2,078,407 2,589,541
(511,134)
OVER (UNDER) EXPENDITURES (453,855) (972,835) (1,179,164) (206,329)
OTHER FINANCING SOURCES (USES)
Transfers in 453,855 1,516,855 1,516,000 (855)
TOTAL OTHER FINANCING
SOURCES (USES) 453,855 1,516,855 1,516,000 (855)
NET CHANGE IN FUND BALANCES - 544,020 336,836 (207,184)
FUND BALANCES - BEGINNING - (447,382) (447,382) -
FUND BALANCES - ENDING $ - $ 96,638 $ (110,546) $ (207,184)
Page 38
ASSETS
Current Assets
Cash and Cash Equivalents
Investements
Prepaid items
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL CURRENT ASSETS
Property, plant and equipment
Land
Building/structures
Improvements other than buildings
Machinery/furniture/equipment
Infrastructure
Construction in progress
Less accumulated depreciation
TOTAL ASSETS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2019
Governmental
Business -type
Activities - Enterprise
Funds
Activities
Surface Water
Dumas Bay
Internal
Management
Centre
TOTAL
Service
$ 4,685,311
$ 1,772,649
$ 6,457,960
$ 20,693,226
540,310
199,459
739,769
$ -
-
-
-
5,000
99,631
39,640
139,271
893
20,166
-
20,166
-
5,345,418
2,011,748
7,357,166
20,699,119
9,230,653
2,109,640
11,340,293
-
832,086
3,673,262
4,505,348
16,545,121
3,915,030
314,901
4,229,931
-
52,946
145,848
198,794
19,660,314
63,938,189
-
63,938,189
-
38,391
38,391
(17,426,716)
(3,718,206)
(21,144,922)
(25,470,970)
60,580,579
2,525,445
63,106,024
10,734,465
65,925,997
4,537,193
70,463,190
31,433,584
DEFERRED OUTFLOWS RELATED TO
PENSIONS 145,697 26,913 172,610 71,168
LIABILITIES AND FUND EQUITY
Current Liabilities:
Vouchers/payroll payable
Unearned revenue
Retainage payable
Deposits payable
Compensated absences payable
TOTAL CURRENT LIABILITIES
Long-term liabilities:
Compensated absences payable
Net Pension Liability
TOTAL LONG-TERM LIABILITIES
TOTAL LIABILITIES
DEFERRED INFLOWS RELATED TO
PENSIONS
224,060
78,393
302,453
490,760
94,790
299,111
393,901
-
17,623
4,612
22,235
200
6,587
6,787
5,797
1,750
7,547
-
342,470
390,453
732,923
490,760
67,027
20,238
87,265
56,107
554,699
105,160
659,859
276,926
621,726
125,398
747,124
333,033
964,196
515,851
1,480,047
823,793
316,409
60,003
376,412
157,991
Net investment in capital assets 60,580,579 2,525,445 63,106,024 10,734,465
Restricted for:
Steel Lake & North Lake Mgmt District 33,261 - 33,261 -
Unrestricted 4,177,249 1,462,807 5,640,056 19,788,503
TOTAL NET POSITION $ 64,791,089 $ 3,988,252 68,779,341 $ 30,522,968
Adjustment to reflect the consolidation of internal service fund activities related to
enterprise funds 64,766
NET POSITION OF BUSINESS -TYPE ACTIVITIES $ 68,844,107
Page 39
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For Year Ended December 31, 2019
OPERATING REVENUES:
Service charges and fees
Intergovernmental
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personnel services
Materials and supplies
Services and charges
Depreciation
Interfund charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES):
Business -type Activities - Enterprise Funds
Surface Water Dumas Bay
Management Centre TOTAL
Governmental
Service
$ 4,370,049 $ 885,809 $ 5,255,858 $ 11,084,465
31,718 - 31,718 20,901
69,726 - 69,726 121,531
4,471,493 885,809 5,357,302 11,226,897
2,000,262
416,131
2,416,393
1,042,382
165,507
230,553
396,060
868,938
1,156,442
182,783
1,339,225
7,468,275
708,463
16,769
725,232
2,077,986
814,987
33,111
848,098
-
4,845,661
879,347
5,725,008
11,457,581
(374,168)
6,462
(367,706)
(230,684)
Gain (Loss) from disposal of capital assets
-
-
-
13,290
Interest income
130,513
40,111
170,624
265,865
Interest expense
(961)
-
(961)
-
TOTAL NON -OPERATING REVENUES (EXPENSES)
129,552
40,111
169,663
279,155
INCOME (LOSS) BEFORE TRANSFERS
(244,616)
46,573
(198,043)
48,471
Capital contributions
144,577
-
144,577
128,629
Transfers in
-
-
-
1,108
Transfers out
(225,307)
-
(225,307)
-
CHANGE IN NET POSITION
(325,346)
46,573
(278,773)
178,208
NET POSITION - BEGINNING
64,142,167
3,941,679
68,083,846
30,344,760
Prior period adjustment
974,268
-
974,268
-
ADJUSTED NET POSITION - BEGINNING
65,116,435
3,941,679
69,058,114
30,344,760
NET POSITION - ENDING
$ 64,791,089
$ 3,988,252
$ 68,779,341
$ 30,522,968
CHANGE IN NET POSITION
(278,773)
Adjustment to reflect the consolidation of internal service fund
activities related
to enterprise
funds
2,907
CHANGES IN NET POSITION OF BUSINESS -TYPE ACTIVITIES
$ (275,866)
Page 40
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For Year Ended December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - outside
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other funds for goods and services
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
Transfers out
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Principal paid on debt service
Interest paid on debt service
Acquisition of capital asset/construction work in progress
Advances (to)/from other funds
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Increases/(decrease)in depreciation expense
(Increases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pensions
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease)in retainage payable
Increases/(decrease) in deposits payable
Increases/(decrease)in deferred revenue
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assets
Business -type Activities - Enterprise Funds
Surface Water Dumas Bay
Management Centre TOTAL
$ 4,373,791 $ 884,756 $ 5,258,547 $
(1,135,322) (386,717) (1,522,039)
(2,191,740) (463,863) (2,655,603)
(814,987) (33,111) (848,098)
(238,193) (921) (239,114)
1 1 n A<7 1 1 n A<7
Governmental
11,083,572
(747,969)
(6,634,453)
(1,157,327)
(649,665)
111 c11
1,108
(225,307) (225,307) -
(96,120)
(96,120)
(961)
(961)
(290,236)
(290,236)
(1,299,770)
8,121,469
35,321
(387,317)
-
(387,317)
6,857,020
130,511
40,108
170,619
265,865
130,511
40,108
170,619
265,865
(378,107)
40,252
(337,855)
9,139,682
5,603,728
1,931,856
7,535,584
11,553,544
5,225,621
1,972,108
7,197,729
20,693,226
(374,168)
6,462
(367,706)
(230,684)
708,465
16,769
725,234
2,077,986
55,968
25,981
81,949
(893)
9,011
-
9,011
246,855
(4,850)
1,173
(3,677)
1,191
(44,505)
27,810
(16,695)
37,367
(7,061)
-
(7,061)
-
(2,113)
(2,113)
(52,226)
(27,035)
(79,261)
(15,598)
246
(15,352)
(1,884)
(201,377)
(50,326)
(251,703)
(121,498)
30,347
1,174
31,521
7,249
478,174
(6,318)
471,856
2,246,373
$ 104,006 $
144 $
104,150 $
2,015,689
$ 144,577
$
128,629
Page 41
STATEMENT OF FIDUCIARY NET POSITION
PRIVATE -PURPOSE TRUST FUND
December 31, 2019
ASSETS
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
TOTAL LIABILITIES
NET POSITION
Reserved for Specific Program Use
TOTAL NET POSITION
Auto Theft
Task Force
Fund
$ 274,784
274,784
274,784
274,784
Page 42
STATEMENT OF CHANGES
IN FIDUCIARY NET POSITION
PRIVATE -PURPOSE TRUST FUND
For Year Ended December 31, 2019
Auto Theft
Task Force
Fund
ADDITIONS:
Intergovernmental $ 1,266,270
TOTAL ADDITIONS 1,266,270
DEDUCTIONS:
Current:
Security of persons & property 1,266,270
TOTAL DEDUCTIONS 1,266,270
CHANGE IN NET POSITION
NET POSITION - BEGINNING NET POSITION - ENDING $ -
Page 43
NOTES TO THE BASIC FINANCIAL STATEMENTS
December 31, 2019
Ieel 1]WI
Note
Page
1
Summary of Significant Accounting Policies...............................................................................
44
ReportingEntity...................................................................................................................
44
Basis of Presentation - Government -wide and Fund Financial Statements ..........................
44
Measurement Focus, Basis of Accounting...........................................................................
46
BudgetaryInformation.........................................................................................................
47
Assets, Liabilities, Fund Balance and Net Position..............................................................
49
Cash and Investments..................................................................................................
49
Receivables..................................................................................................................
49
Amounts Due to and from Other Funds; Interfund Loans ...........................................
49
Inventories and prepaids..............................................................................................
50
CapitalAssets..............................................................................................................
50
Deferred Inflow of Resources......................................................................................
50
Compensated Absences Payable..................................................................................
50
Pensions.......................................................................................................................
51
Unearned Revenues.....................................................................................................
51
Long -Term Liabilities..................................................................................................
51
Fund Balance Classification........................................................................................
51
InterfundTransactions.................................................................................................
53
2
Reconciliation of Government -wide & Fund Financial Statements .............................................
53
3
Stewardship, Compliance and Accountability..............................................................................
54
4
Supplemental Appropriations.......................................................................................................
54
5
Deposits and Investments.............................................................................................................
55
6
Property Taxes..............................................................................................................................
58
7
Unearned Revenues and Receivables...........................................................................................
59
8
Capital Assets...............................................................................................................................
60
9
Pension Plans................................................................................................................................
62
10
Risk Management.........................................................................................................................
69
11
Long -Term Liabilities...................................................................................................................
70
12
Interfund Transactions..................................................................................................................
74
13
Contractual Obligations, Contingencies, and Litigation...............................................................
75
14
Joint Ventures...............................................................................................................................
75
15
Prior Period Adjustments...................................................................................................
77
16
Leases................................................................................................................
78
17
Self-Insurance...............................................................................................................................
78
18
Accounting and Reporting Changes.............................................................................................
79
19
Subsequent Event..........................................................................................................................
79
Page 44
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended December 31, 2019
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Federal Way have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted
standard setting body for establishing governmental accounting and financial reporting principles. The significant accounting
policies are described below.
REPORTING ENTITY
The City of Federal Way was incorporated on February 28, 1990. Federal Way is a non -charter code city, operating under
Section 35A.03 of the Revised Code of Washington. It has a Mayor/Council form of government. The Council is composed of
seven councilmembers elected to four-year terms on a non -partisan ballot and are elected at -large. Members of the City
Council are responsible for establishing the general direction and policies for the City and for providing the resources
necessary to carry out those policies. As the City's chief administrator, the City Mayor is responsible for carrying out the
policy and direction set by the City Council. This includes the enforcement of laws and ordinances, the execution of contracts
and agreements, and maintenance of peace and order in the City. The City of Federal Way provides a full range of municipal
services, including policing, planning and zoning, street maintenance and construction, parks and recreation, and general
administrative services. The City operates enterprise funds for Storm Water Management and Dumas Bay Centre.
The City's Comprehensive Annual Financial Report (CAFR) includes the funds, agencies and boards controlled by or
dependent on the City. In conformance with Governmental Accounting Standards Board (GASB) Statement 14, "The
Financial Reporting Entity", the primary basis of determining whether outside agencies and organizations should be
considered component units of the City is Financial Accountability. Financial Accountability is dependent on the City's
obligation to redeem the organization's debts, to finance the organization's deficits, and the extent to which subsidies from the
City constitute a major portion of the organization's total resources. Applying these criteria, as outlined in GASB Statement
14, the City has no relationships that qualify as component units.
Financial Accountability
Financial accountability is defined as an appointment of a voting majority of an agency's or organization's board, and either the
City's ability to impose its will on the agency or organization or the possibility that the agency or organization will provide a
financial benefit to or impose a financial burden on the City.
Joint Ventures
A joint venture is a legal entity or organization which results from a contractual arrangement that is owned, operated, or
governed by two or more participants as a separate activity subject to joint control, in which participants retain an ongoing
financial interest or an ongoing financial responsibility. The City participates in one joint venture: Valley Communications
Center. On September 4th, 2018 the City Council decided to withdraw from the SCORE interlocal agreement effective on
January 1st, 2020 per city resolution 18-741 in 2019. See Note 14, Joint Venture, which more fully describe these
organizations.
BASIS OF PRESENTATION - GOVERNMENTAL -WIDE AND FUND FINANCIAL STATEMENTS
The government -wide financial statements (i.e. the statement of net position and the statement of activities) report information
on all non -fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed
from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business -type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Our policy is to
allocate indirect costs to specific functions or segments. Program revenues include 1) charges to customers or applicants who
purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements, or a particular function or segment. Taxes
and other items not properly included among program revenues are reported instead as general revenues.
Page 45
As a general rule the effect of the interfund activity has been eliminated for the government -wide financial statements
Interfund services provided and used are not eliminated in the process of consolidation.
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial
statements.
The City reports the following major governmental funds:
General Fund — This is the City's general operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
Street Fund — This fund accounts for the receipt and disbursement of State -levied motor vehicle fuel taxes which
must be accounted for in a separate fund and expended for street -oriented engineering, maintenance and operations.
Utility Tax Fund — This fund was established to account for all utility tax receipts. These receipts will subsequently
be distributed to various funds to provide for debt service, capital projects, maintenance and operations expenditures,
etc. as determined by the City Council.
Debt Service Fund — This fund accounts for the accumulation of resources for the payment of general obligation and
assessment bond principal, interest and related costs.
Performing Arts & Event Center Operations Fund — This fund was established to account for receipts and
disbursements related to the operation of the Performing Arts & Event Center facility.
Transportation CIP Fund — This fund accounts for receipts and disbursements related to acquisition, design,
construction and any other related street project expenditures.
Performing Arts & Event Center Construction Project Fund — This fund was established to account for receipts and
disbursements related to the construction of the Performing Arts and Event Center (PAEC). The construction of this
building has been completed.
The City reports the following fund groups as non -major funds:
Special Revenue Funds — These funds are to be used to account for the proceeds of revenues and sources (other than
special assessments, expendable trust or major capital projects) that are committed or legally restricted to
expenditures for specified purposes.
Capital Project Funds — These funds account for the acquisition or construction of major capital facilities with the
exception of those facilities financed by the proprietary fund. The major sources of revenues for these funds are
general obligation bond proceeds, grants from other agencies, local taxes, contributions from other funds, utility tax,
and real estate excise tax.
The City reports the following major enterprise funds:
Surface Water Management Fund — This fund was established to administer and account for all receipts and
expenditures related to the City's surface and storm water management system.
Dumas Bay Centre Fund — This fund was established to account for revenues and expenses related to the acquisition,
capital improvements maintenance and operations of the City -owned Dumas Bay Centre and Knutzen Family
Theatre. The Dumas Bay Centre is primarily used for meetings, events, lodging, and catering services.
Additionally, the City reports following internal service funds:
Risk Management Fund — This fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, and worker's compensation claims. Both risk control (to
minimize the losses that strike an organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is also currently recovering costs and building reserves for
general liability including property, casualty, errors and omissions and fidelity coverage.
Page 46
Information Systems Fund — This fund was established to account for all costs associated with data processing,
telecommunications and the Geographical Information System (GIS). This fund owns and depreciates all non-
proprietary fund assets related to these functions, and charges equipment/software users for both maintenance and
operating costs and equipment replacement charges based on depreciation schedules.
Mail & Duplication Fund — This fund accounts for duplication, graphics and other general support services provided
to departments and funds throughout the City.
Fleet and Equipment Fund — This fund accounts for the cost of maintaining City vehicles and other motorized
equipment. Rates charged to user departments are based on the full cost of maintaining equipment items, including
the recovery of related depreciation expense.
Buildings and Furnishings Fund — This fund accounts for all costs associated with the operation and maintenance of
specified City buildings. City building facilities and furnishings are owned by this Fund. Both maintenance/operating
costs and depreciation recovery are charged to City departments and funds.
Health Insurance Fund — The City is currently self -insuring for medical insurance. The premiums paid by the City
and employees are deposited into this fund. Medical service for medical coverage and pharmaceutical reimbursement
are paid out of this fund. Also, the fund has established reserves for the payment of estimated future claims.
Unemployment Insurance Fund - The City is currently self -insuring State Unemployment Compensation. Related
premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability.
Internal Service Funds account for goods and services provided to other departments or agencies of City of Federal Way, or to
other governments, on a cost -reimbursement basis.
The City reports the following fiduciary fund:
Auto Theft Task Force Fund — This fund is a private -purpose trust fund that acts as an agent on behalf of other
governments. This fund accounts for contributions held in a fiduciary capacity for the Puget Sound Auto Theft Task -
Force.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING
Government -Wide and Governmental Funds
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis
of accounting, similar to the proprietary fund financial statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the City of Federal Way considers revenues to be available if they are collected within 60
days of the end of the current fiscal period. The City considers property tax as available if they are collected within 60 days
after year end. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
Property taxes, licenses, and interest associated within the current period are all considered to be susceptible to accrual and
have been recognized as revenues of the current fiscal period. Only the portion of property tax receivable due within the
current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
Page 47
Major revenues recorded on the modified accrual basis are:
Property Taxes - King County acts as the City's collection agent for these taxes. Upon receipt, the County electronically
transmits to the City the taxes which it has collected on the City's behalf in the prior day. On this basis, property taxes received
in January are considered both measurable and available and are therefore recognized as revenue in the current year.
Other Locally Levied Taxes - King County also acts as the City's collection agent for the 0.25% and optional 0.25% 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 by the State, but not remitted by an intermediary collection agency to
the City, are considered measurable and available.
Other Revenue Sources - Other items recognized as revenue in the current year on the modified accrual basis include
investment interest earned but not received at year end; inter -fund, and intergovernmental service billings related to services
provided in the current year which are outstanding at year end; and any other material revenue amounts determined to be both
measurable and available under current modified accrual accounting practices. Revenues not considered to meet the criteria for
recognition on the modified accrual basis include licenses and permits, fines and forfeitures, and other miscellaneous revenues
which are generally not measurable until received.
Proprietary Funds
The proprietary fund statements are reported using the economic resources measurement focus and full -accrual basis of
accounting. Revenues are recorded when earned and expenses are recorded when liability is incurred regardless of the timing
of the cash flows.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary f ind's principal
ongoing operations. The principal operating revenues of the City are primarily user charges, and the cost of providing goods
or services to the general public on a continuing basis. Operating expenses for enterprise and internal service funds includes
the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as non -operating revenues and expenses.
Other Disclosure
The City was neither the lessor nor lessee in capital leases; has not been the recipient of an endowment; did not engage in
short-term debt activity during the year; has not issued special assessment debt; does not benefit from on -behalf payment; has
not pledged future revenues; has not incurred an obligation for pollution remediation; had no hedging derivatives; is not the
transferor or operator in a service concession arrangement; and does not provide other post -employment benefits (OPEB), and
was not the transferor or continuing government in a merger, transfer of operation, etc.
BUDGETARY INFORMATION
Scope of Budget
Annual appropriated budgets are adopted for the general, some special revenue, and debt service funds on the modified accrual
basis of accounting. For governmental funds, there are no differences between the budgetary basis and generally accepted
accounting principles. Budgets for debts service and capital project funds are adopted at the level of the individual debt issue
or project and for fiscal periods that correspond to the lives of debt issues or projects.
Legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the total appropriation
amount. Any unexpended appropriation balances for annually budgeted funds lapse at the end of the year. Appropriations for
other special purpose funds that are non -operating in nature are adopted on a "project -length" basis and, therefore, are carried
forward from year to year without re -appropriation until authorized amounts are fully expended or the designated purpose of
the fund has been accomplished.
The individual funds within each fund type which are included in the City's biennial operating budget (funds budgeted on an
annual basis) are:
General Fund Special Revenue Funds Debt Service Fund
- Street Fund - Debt Fund
- Arterial Street
- Utility Tax (including Prop 1)
- Solid Waste & Recycling
- Special Contracts /Studies
- Hotel/Motel Lodging Tax
- Federal Way Community Center
- Traffic Safety
- Community Development Block Grant
-Paths & Trails
-Performing Arts & Event Center
-Technology
Capital Project Funds
-Downtown Redevelopment
-City Facilities
-Parks
-Transportation
-Capital Project Reserve
-Performing Arts & Event Center
-Surface Water Management
-Real Estate Excise Tax
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at
year end do not constitute expenditure or liabilities because the commitments will be re -appropriated and honored during the
subsequent year.
Procedures for Adopting the Biennial Budget
The City's budget process and the time limits under which the budget must be prepared are defined by the Revised Code of
Washington (RCW) 35A.33. The procedures followed in establishing the biennial budget are described below:
By late May the official budget call is made by the Finance Director for current level service budgets and a preliminary
financial forecast.
By late June, departments submit their preliminary expenditure estimates and the Finance department updates the
preliminary revenue estimates to define resources available to finance coming year expenditure programs.
By the first Tuesday in September, the Mayor submits a proposed budget to the City Council. This budget is based on
priorities established by the Council and estimates provided by City departments during the preceding months, and
balanced with revenue estimates made by the Finance Director. Copies of the preliminary budget are provided to the City
Council and made available to staff and the public.
City Council conducts workshops and public hearings on the proposed budget between mid -September and mid -October.
No later than the third Monday in November, the City Council must adopt an ordinance to establish the amount of
property taxes to be levied in the coming year.
No later than the first two weeks of November, the City Clerk publishes a notice of the filing of the preliminary budget
and notices of public hearings to be held during preliminary budget deliberations.
Two public hearings on the proposed budget are also held during October and November. Final hearings on the budget
must begin on or before the first Monday of December, and may continue until the 25th day prior to beginning of the next
fiscal year.
By December 31, the City Council makes its adjustments to the proposed budget and adopts a final budget by ordinance.
The final operating budget, as adopted, is published and distributed within the first three months of the following year.
Copies of the adopted budget are made available to the public.
Page 49
Amending the Budget
The Mayor is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter
the total expenditures of a fund or that affect the number of authorized employee positions, salary ranges, hours, or other
conditions of employment must be approved by the City Council.
When the City Council determines that it is in the best interest of the City to increase or decrease the appropriation for a
particular fund, it may do so by ordinance approved by one or more than the majority after holding public hearing(s).
The budget amounts shown in the financial statements are the final authorized amounts as revised during the year.
The financial statements contain the original and final budget information. The original budget is the first complete
appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental
appropriations, and other legally authorized changes applicable for the fiscal year.
ASSETS, LIABILITIES, FUND BALANCE, NET POSITION
Cash and Cash Equivalents
The City follows the practice of pooling cash and investments of all funds for investment purposes, except for cash held in
escrow, which is disclosed separately on the balance sheet. Each fund's portion of total cash and investments is summarized
by fund type in the combined balance sheet as cash and cash equivalents and investments.
It is the City's policy to invest all cash not immediately required for disbursement. At December 31, 2019, the State Treasurer
was holding $39,757,807 in the Local Government Investment Pool. The amount is classified on the balance sheet as cash and
cash equivalents in various funds. The interest on these investments is prorated to the various funds based on the average
monthly balance for each fund.
The amounts reported as cash and cash equivalents also include compensating balances maintained with certain banks in lieu
of payments for services rendered. The average compensating balances maintained during the 2019 were approximately $16
million.
For purposes of the statement of cash flows, the City considers all highly liquid investments with a maturity of three months or
less when purchased, to be cash equivalents. At December 31, 2019, the total cash and cash equivalents were $65,225,962.
In accordance with GASB Statement 79, LGIP investments are measured at amortized cost. See (Note 5 - Deposits and
Investments). Cash with escrow agent was $175,985.
Investments
The City as of December 31, 2019, had $4,953,665 in authorized investments, and was in compliance with the investment
policy of the City. See (Note 5 - Deposits and Investments).
Receivables
Taxes receivable consists of property taxes and related interest and penalties (see Note 6 - Property Tax). Accrued interest
receivable consists of amounts earned on investments, notes, and contracts at the end of the year.
Customer accounts receivable consist of amounts owed from private individuals or organizations for goods and services
including amounts owed for which billing have not been prepared. Notes and contracts receivable consist of amounts owed on
open accounts from private individuals or organizations for goods and services rendered.
Amounts Due to and from Other Funds; Interfund Loans
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as interfund loans receivable/payable or advances to/from other funds. All other outstanding balances between
funds are reported as due toffrom other funds. A separate schedule of inter -fund loans receivable and payable is furnished in
Note 12, Interfund Transactions.
Page 50
Inventories and Prepaids
Inventories in the governmental funds are recorded as expendable supplies held for consumption. The cost is typically
recorded as expenditure at the time individual inventory items are purchased. Amounts remaining at year-end are immaterial
and, therefore, are not reflected on the balance sheets of those funds except for the Performing Arts & Event Center. There
were no material inventories at year-end in the Internal Service or Enterprise Funds. The City currently uses the consumption
method of accounting for prepaids.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure (e.g., roads, bridges, sidewalks, and similar items),
are reported in the applicable governmental or business -type activities columns in the government -wide financial statements.
Capital assets are defined by the City of Federal Way as assets with an initial, individual cost of more than $5,000 and an
estimated useful life in excess of one or more years. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. See Note 8, Capital
Assets.
Cost of normal maintenance and repairs are not capitalized. However, cost for additions or improvements to capital assets are
capitalized when they increase the effectiveness or efficiency of the asset, or capital asset's estimated useful life.
Depreciation on all capital assets is recorded as an allocated expense in the government -wide Statement of Activities and in
the proprietary fund statements. Property, plant, and equipment of the primary government are depreciated using the straight
line method over the following estimated useful lives:
Asset Class
Life in Years
Computers.................................................................5-6
Printers &Faxes.............................................................7
Teleconn wnications Equipment........................................7
Police Radio Equipment.................................................11
Other Office Equipment ...................................
............4-10
Office Furniture and Fixtures...........................................10
Recreation Equipment....................................................10
Parks Equipment ...........................................
.............. 6-10
Police Equipment.......................................................9-11
Shop/Miscellaneous Equipment..................................10-12
Heavy Work Equipment.............................................10-16
Non -Police Vehicles........................................................7
Police Patrol Vehicles .....................................
.............. 5-7
Police Non -Patrol Vehicles ..............................
HeavyTrucks ...............................................
............ 8-10
Land Improvements......................................................20
Buildings.....................................................................20
Infrastructure ...............................................
.......... 15-100
Deferred Inflows of Resources
A deferred inflow of resources is an acquisition of net assets by the government that is applicable to a future reporting period.
See (Note 6 — Property Tax) and (Note 9 — Pension Plans)
Compensated Absences Payable
The City records a liability for all outstanding vacation pay and accrued compensatory time. In governmental funds, vacation
pay and compensatory time is recorded as expenditures when paid which occurs when used or upon termination. In the entity -
wide statements and the proprietary fund statements, vacation pay and compensatory time is recorded as a liability and
expense in the year earned.
Employee vacation leave is accumulated monthly at rates ranging from 12 to 27 days per year depending on term of
employment. Employees may accumulate up to a maximum of 240 hours of vacation leave, except the Commissioned staff,
who can accrue up to a maximum of 440 hours. Outstanding vacation leave is payable upon termination of employment at the
following rate: City Employees up to 240 hours and Commissioned staff members will be paid out up to two times their
annual accrual rate.
Page 51
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 all non-exempt employees.
Sick leave may be accumulated up to a maximum of 740 hours for regular City employees per City policy and 1,080 hours for
Commissioned staff. The monthly accrual rate for City employees is 8 hours per month. Accumulated sick leave is not
payable upon termination of employment for City employees. For Commissioned staff upon retirement into LEOFF II,
twenty-five percent of unused sick leave will be cashed out up to a maximum of 270 hours; 100% will be cashed out if death
occurs in the line of duty. Outstanding sick leave at year-end is not accrued due to the difficulty in estimating the portion of
existing balances likely to result in expenditures in future periods. Compensated Absences Payable outstanding at year-end is
outlined in Note 11.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of all state sponsored pension plans and additions
to/deductions from those plans' fiduciary net position have been determined on the same basis as they are reported by the
Washington State Department of Retirement Systems. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair
value. See (Note 9 — Pension Plans).
Long -Term Liabilities
In the government -wide financial statements and the proprietary fund financial statements, long-term debt and other long-term
obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund
statement of net position. See (Note 11 - Long -Term Debt).
Unearned Revenues
Unearned revenue is a liability account that reports amounts received in advance of providing goods or services. For detailed
information, See (Note 7 — Unearned Revenues and Receivables).
Fund Balance Classification
Fund balance is a measurement of available financial resources and is the difference between total assets and total liabilities in
each fund.
Beginning with the most restrictive constraints, fund balance amounts will be reported in the following categories:
Nonspendable — amounts that are not in a spendable form or are legally or contractually required to be maintained
intact.
Restricted — amounts that can be spent only for the specific purposes stipulated by external parties either
constitutionally or through enabling legislation.
Committed — amounts that can be used only for the specific purposes determined by formal action of the City Council
through an ordinance or resolution. Commitments may be changed or lifted by the action of the City Council using
the same formal action of ordinance or resolution that was used to create the commitment.
Assigned — amounts intended to be used by the government for specific purposes. Intent can be expressed by the City
Council or the Mayor. In governmental funds other than the general fund, assigned fund balance represents the
amount that is not restricted or committed. This indicates that resources in other government funds, at a minimum,
are intended to be used for the purpose of that fund.
Unassigned — includes all amounts not contained in other classifications and is the residual classification of the
general fund only. Unassigned amounts are available for any legal purpose.
The council can use a resolution to modify or rescind a fund balance commitment. When an expenditure is incurred for which
both restricted and unrestricted resources are available, it is the City's policy to use restricted resources first. When
unrestricted (committed, unassigned) resources are available, it is the City's policy to spend committed resources first, and
then unassigned, in that order. The minimum fund balance established by the Reserve Policy, and passed by resolution from
the City Council, states "The City shall have an operating cash flow reserve of seventeen percent of the City's General Fund
operating expenditures or $9 million. In addition, the City shall have a contingency for unanticipated cost of $1 million to
cover revenue shortfalls resulting from unexpected economic change or recessionary periods, or to provide funds in the event
Page 52
of major unplanned expenditures the City could face as a result of natural disasters. The policy shall also include a strategic
opportunities reserve of $2 million to provide liquidity to respond to economic opportunity that is not budgeted for that may
provide a long term economic benefit to the City. In the event that any of the Contingency or Strategic Opportunities Reserve
is used, such appropriation shall be repaid to the fund annually over the next three years. The purpose of the ending fund
balance is to provide financial stability, cash flow for operations and the assurance that the City will be able to respond to
revenue shortfalls with fiscal strength." General fund expenditures on December 31, 2019 were $48.8 million and Unassigned
General fund balance at year -ended 2019 was $15.9 million or (33%).
Other funds that have a significant minimum fund balance policy are: Street Fund - $0.5 million; Arterial Street Fund - $0.1
million; Utility Tax Fund - $2.5 million, REET Fund - one year revenue reserve; Park Equipment and Infrastructure Reserve
Fund - $1.125 million; Hotel/Motel Lodging Tax Fund - $0.2 million; Community Center Fund - $1.5 million; Traffic Safety
Fund - $1.2 million; Debt Service Fund - adequate reserve in accordance with bond ordinance or minimum of one year debt
service amount; Dumas Bay Centre Fund - $1.5 million; and Surface Water Management Fund - $0.5 million.
The Government -wide statement of net position reports $588.3 million of net position, of which $18.9 million is restricted by
the enabling legislation, and $526.3 is for net investment in capital assets there are no unspent proceeds of debt).
2019 FUND BALANCE CLASSIFICATION
Fund Balance
General
Street Utility
Debt Performing Transport-
Performing Nonmajor
Total
Fund
Tax
Service Arts & Event ation
Arts & bent Gov't
Ctr Oper.
Ctr
Nonspendable:
Court trust
$ 224,812
$ $
$ $ $
$ $
$ 224,812
Prepaid items/Inventory
7,541
- -
- - -
- -
7,541
Restricted for:
Police covert/seizure
413,128
413,128
Future debt payments
-
3,933,732
3,933,732
Special Contracts/Studies
-
748,927
748,927
Hotel/Motel Lodging Tax
1,349,483
1,349,483
Path & Trails Reserves
1,191,437
1,191,437
Downtown Redevelopment
2,526,754
2,526,754
City Facilities CIP
30,342
30,342
Parks CIP
1,479,771
1,479,771
Transportation CIP
2,642,669
-
2,642,669
Performing Arts & Event Ctr
-
-
-
Real Estate Excise Tax
4,299,878
4,299,878
Community Development Block Grant
29,985
29,985
Committed to:
Capital, debt, and operations
-
1,569,984
-
1,569,984
Petty cash/advance travel
19,350
-
-
19,350
Community Development Block Grant
-
-
5,298
5,298
Proposition 1
1,144,644
-
-
1,144,644
Transportation CIP
-
2,193,301
2,193,301
Downtown Redevelopment
-
-
City Facilities CIP
258,253
258,253
Arterial Street
662,267
662,267
Solid Waste/Recycling
194,471
194,471
Federal Way Comimnity Center
1,208,268
1,208,268
Traffic Safety
-
1,389,469
1,389,469
Snow/ice removal
597,725
-
597,725
Parks CIP
-
261,820
261,820
Performing Arts & Event Ctr
-
-
Capital Project Reserve
367,936
367,936
Technology
3,013
3,013
Unassigned:
General Fund
15,936,195
-
15,936,195
Performing Arts & Event Center
-
-
(110,546) -
-
(110,546)
Total Fund Balance: $16,601,026
$ 597,725 $ 2,714,628
S 3,933,732 $ (110,546) $ 4,835,970
$ $16,007,372
$ 44,579,907
Page 53
Interfund Transactions
There are three types of transactions between funds: inter -fund loans, inter -fund services provided and used, and inter -fund
transfers. Interfund loans are temporary borrowings of cash which do not affect operating statements, but which may incur
interest expense or expenditure to the borrowing fund. Interfund services provided and used are equivalent to buying goods or
services from an outside vendor, and are accounted for by the related funds as revenues, expenditures or expenses. The inter -
fund transfers are accounted for as 'other financing sources and uses" and are therefore included in the operating statements
(see Note 12).
NOTE 2 — RECONCILIATION OF GOVERNMENT -WIDE & FUND FINANCIAL STATEMENTS
Explanation of Certain Differences between the Governmental Funds Balance Sheet and the Government -Wide
Statement of Net Position
The governmental funds' balance sheet includes reconciliation between fund balance — total governmental funds and net
position — governmental activities as reported in the government -wide statement of net position. One element of the
reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period, and,
therefore, are not reported in the funds." The details of this $45,920,851 difference are as follows:
Bonds Payable & Premium at beginning of year $ 31,733,611
Plus: Inclusion of compensated absences 2,035,728
Plus: Current year addition/reduction of principal portion of debt & premium 3,690,559
Plus: Net Pension Liability 5,122,430
Plus: Deferred Inflows of Resources Related to Pensions 6,129,025
Less: Deferred Outflows of Resources Related to Pensions (2,790,503)
Net Adjustment to reduce fund balances -total governmental
funds to arrive at net position - governmental activities $ 45,920,851
Explanation of Certain Differences between the Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances and the Government -Wide Statement of Activities
The governmental funds' statement of revenues, expenditure, and changes in fund balances includes reconciliation between
net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in
the government -wide statement of activities. One element of that reconciliation explains that "Governmental funds report
capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense." The details of this $(13,874,994) difference are as follows:
Capital outlay $ 10,612,471
Plus: Contributed Capital 476,400
Less: Governmental depreciation expense (9,133,901)
Less: Net Decrease in investment in joint venture (15,829,965)
Net adjustment to increase net changes in fund balances -
Total governmental funds to arrive at changes in net position
ofgovernmental activities
$ (13,874,994)
Another element of the reconciliation states that "Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds." This item presents:
Property taxes earned reported as deferred inflow of resources in the fund statements $ (40,138)
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 $ (39,157)
Accrual adjustment for GASB 68 pension reporting $ 2,277,543
Page 54
NOTE 3 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
There have been no material violations of finance -related legal or contractual provisions, and there have been no expenditures
exceeding legal appropriations in any of the funds of the City.
NOTE 4 — SUPPLEMENTAL APPROPRIATIONS
Operating Budget Funds
Appropriations established during 2019 for the City's operating budget funds are provided below. As explained in Note 1,
both original and supplemental appropriations are adopted by the City Council by ordinance. Both original and final budget
appropriations are shown on the accompanying financial statements. The final budget values include all adopted adjustments
to original budget amounts. This table does not include transfers out or Proprietary Funds.
2019 Operating Budget Funds
Fund
Original Budget
Supplemental
Final Budget
Appropriations
General Fund
$ 50,009,628 $
1,264,936 $
51,274,564
Special Revenue Funds:
Street Fund
4,282,061
521,902
4,803,963
Arterial Street Fund
1,515,064
110,000
1,625,064
Utility Tax Fund
3,446,374
-
3,446,374
Solid Waste/Recycling Fund
491,549
64,000
555,549
Special Contracts / Studies
13,200
86,800
100,000
Hotel/Motel Lodging Tax
294,700
-
294,700
Federal Way Community Center
2,312,036
19,500
2,331,536
Traffic Safety
2,627,732
(41,529)
2,586,203
Performing Arts & Event Center Oper.
1,871,986
206,421
2,078,407
Community Development Block Grant
692,410
544,500
1,236,910
Paths & Trails
-
-
-
Technology
-
15,986
15,986
Strategic Reserve
-
-
-
Subtotal Special Revenue Funds:
17,547,112
1,527,580
19,074,692
Debt Service Fund
2,152,510
13,000,000
15,152,510
Capital Project Funds:
Real Estate Excise Tax
-
720,000
720,000
Downtown Redevelopment
-
-
-
City Facilities
-
-
-
Parks
1,425,480
25,000
1,450,480
Transportation
13,248,000
9,754,401
23,002,401
Capital Project Reserve
-
-
-
Performing Arts & Event Center
-
-
-
Subtotal Capital Project Funds:
14,673,480
10,499,401
25,172,881
Total:
$ 84,382,730 $
26,291,917 $
110,674,647
Page 55
NOTE 5 — DEPOSITS AND INVESTMENTS
As required by state law, all deposits and investments of the City's funds are obligations of the U.S. Government, the Local
Government Investment Pool (LGIP), bankers' acceptances, or deposits with Washington State banks and savings and loan
institutions. In 2019 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, 2019, the equity in pooled cash and
investments was $70,355,612.
At year-end, the City had $70,179,627 in cash, cash equivalents, and investments which consisted of investments with the
LGIP of $39,757,807; U.S. Treasury Agency of $4,953,665; the City's checking account bank balance prior to outstanding
checks was $24,914,057; deposit account of $250, Performing Arts & Event Center checking account and change fund totaling
$280,486, petty cash, change fund, advance travel, and investigative fund totaling $48,550, and Court Trustee Fund of
$224,812. Cash held with an escrow agent is $175,985. No deposits were uninsured or uncollateralized. Insurance coverage
up to $250,000 is through federal depository insurance and the Washington Public Deposit Protection Commission (WPDPC)
covers amounts over $250,000. Under State statute, members of WPDPC, a multiple -financial institution collateral pool, may
be assessed on a prorated basis if the pool's collateral is insufficient to cover a loss. Investments are presented on balance
sheet in the basic financial statements at fair value.
In accordance with GASB Statement 79, LGIP is reported on amortized cost basis. Furthermore, the City can invest and
withdraw their investments on a daily basis with a limit of one transaction per business day and minimum transaction amount
of five thousand dollars. There is no maximum transaction amount, but an investment or withdrawal of ten million dollars or
more, a one -day notification prior to the transfer date is requested, but not required.
The State Treasurer's Office administers the Washington State LGIP authorized under Chapter 43.250 RCW. In its
management of LGIP, the State Treasurer adheres to the principles appropriate for the prudent investment of public funds. In
priority order, they are the safety of principal, the assurance of sufficient liquidity to meet cash flow demands.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of a failure of a depository financial institution, the City would
not be able to recover deposits or will not be able to recover collateral securities that are in possession of an outside party. As
of December 31, 2019, the City is not exposed to custodial credit risk as there are not investments held with a brokerage firm
or counterparty. City resolution number 13-633 directs that the assets of the City shall be secured through a third party
custodian in the form of a Safekeeping Agreement to guard against potential fraud and embezzlement. The City has
investments safekeeping and custody with Key Bank National.
Foreign Currency Risk
Foreign currency risk for deposits is the risk that changes in exchange rates that will adversely affect the deposit. The
exposure to foreign currency risk for deposits as of December 31, 2019 does not exist for the city.
Investments
Investments are subject to the following risks.
Interest Rate Risk
Interest rate risk is the risk the city may face should interest rate variances affect the fair value of investments. As a means of
limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy states that "no more
than 20% of the portfolio may be invested beyond 12 months, and average maturity of the portfolio may not exceed 2 years."
Page 56
As of December 31, 2019 the City had the following investments and maturities:
SC IN OFPWESTMEVTS BYMATURrrIES
AS OF DECEMBER 31, 2019
Investment maturities
Less than 1 to 2 Greater than
Investment Type Fair Value 1 year years 3 years
State Investment Pool $ 39,757,807 $ 39,757,807 $ - $ -
US Treasury Stripped Principal $ 4,953,665 $ 4,953,665 $ - $ -
$ 44,711,472 $ 39,757,807 $ - $ -
Reconciliation of Government -Wide Statement ofNet Position:
Key Bank checking account per books $
24,914,057
Key Bank deposit account
250
Key Bank PAEC checking account & change fund
1,200
Bank of America PAEC checking account
279,286
Petty cash/change fund/advance travel/investigative fund
48,550
Local Government Investment Pool
39,757,807
US Treasury Stripped Principal
4,953,665
Municipal Court Trust on books
224,812
Subtotal cash, cash equivalents, and investments
70,179,627
Cash with escrow agent
175,985
Total cash and investments, Government -Wide
Statement of Net Position $
70,355,612
Total Cash & Investments $
70,355,612
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: Local Government Investment Pool (LGIP); repurchase agreements; U.S.
treasury obligations; U.S. government agencies; U.S. government -sponsored corporations/instrumentalities; bankers'
acceptances (secondary market domestic and foreign); commercial paper (secondary market); insured certificates of deposit
(banks and savings & loans); and uninsured/collateralized certificates of deposit (banks and savings & loans).
The credit risk of the State Investment Pool is limited to obligations of the US Government, government sponsored
enterprises, or insured demand deposit accounts and certificates of deposit.
The LGIP is unrated. U.S. Treasury Agency is rated Aaa by Moody's rating service.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a failure of the counterparty to an investment transaction the City would not
be able to recover the value of the investment of collateral securities. As of December 31, 2019, the City is not exposed to
custodial credit risk as there are not investments held with a brokerage firm or counterparty. City resolution number 13-633
directs that the assets of the City shall be secured through a third party custodian in the form of a Safekeeping Agreement to
guard against potential fraud and embezzlement. The City has investments safekeeping and custody with Key Bank National.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The investment
policy states: "no more than 5% of the portfolio may be invested in the securities of a single issuer, except for the U.S.
Treasury, to which no limits apply, and commercial paper, which is limited to 3% of the portfolio in accordance with state law.
No more than 30% of the portfolio may be invested in bankers' acceptances and certificates of deposit."
As of December 31, 2019 City investments were 89% in LGIP and 11% in U.S. Treasury Agency.
Foreign Currency
Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair market value of an investment.
The city does not have a formal policy for foreign currency risk, and does not invest in foreign currency.
Page 57
Investments Measured at Amortized Cost
As of December 31, 2019, the City had the following investments at amortized cost:
S CBEDULE OF 1NVES TMENTS AT AMORTIZED COST
AS OF DECEMBER 31, 2019
Weighed Average
Investment Type Maturities (Days) Investments Total
State Treasur's Investment Pool 51 Days $ 39,757,807 $ 39,757,807
$ 39,757,807 $ 39,757,807
Investments Measured at Fair Value
The City measures and reports investments at fair value using the valuation input hierarchy established by generally accepted
accounting principles, as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities,
Level 2: These are quoted market prices for similar assets or liabilities, quoted prices for identical or similar assets or
liabilities in markets that are not active, or other than quoted prices that are not observable;
Level 3: Unobservable inputs for asset or liability.
At December 31, 2019, the City had the following investments measured at fair value:
SCIIEDULE OF INVESTMENTS AT FAIR VALUE OF DECEMBER 31, 2019
Quoted Prices in
Active Markets for Significant Other Significant
Identical Assets Observable Inputs Unobservable
Investment Type 12/31/2019 (Level 1) (Lewl 2) Inputs (Level 3)
U.S. Treasury Agency 4,953,665 4,953,665
Total By Fair Value Level $ 4,953,665 $ - $ 4,953,665 $ -
Other Information
Below is a schedule of investments by fund type:
S CB EDULE OF INVFS TMINTS BY FUND CATEGORY AND INVES TNHNT
TYPE
AS OF DECEMBER 31, 2019
Fund Type
SIP
Investments
Total
General Fund
$ 7,741,857
$ 1,369,078
$ 9,110,935
Other Major Funds
7,486,931
1,278,269
8,765,200
Special Revenue Funds
4,140,813
727,711
4,868,524
Capital Projects Funds
4,712,467
838,838
5,551,305
Enterprise Funds
4,108,191
739,769
4,847,960
Internal Services Funds
11,567,548
-
11,567,548
Total:
$ 39,757,807
$ 4,953,665
$ 44,711,472
Page 58
NOTE 6 — PROPERTY TAXES
The King County Treasurer is responsible for collecting property taxes levied in the County by all taxing districts. Amounts
collected by the County on the City's behalf are remitted daily.
PROPERTY TAX CALENDAR:
January 1 Taxes are levied and become an enforceable lien against properties
February 14 Tax bills are mailed
April 30 First of two equal installment payments is due
May 31 Assessed value of property established for next year's levy at 100% of market value
October 31 Second installment is due
As described in Note 1, taxes are levied and become an enforceable lien against properties as of January 1. Annual tax billings
may be paid in two equal installments, due April 30 and October 31. At December 31, 2019, the balance of property taxes
receivable recorded by the City was $162,992. Of this, $142,296 is recorded as deferred inflow of resources, since it was not
collected within the first 60 days of the end of 2019.
Property taxes are recorded as a receivable when levied, offset by deferred inflow of resources. During the year, property tax
revenues are recognized when cash is collected. At year-end, property tax revenues are recognized for collections expected to
occur within 60 days. No allowance for uncollectible taxes is established because delinquent taxes are considered fully
collectible.
Under State law, the maximum levy (for general governmental services) is up to $3.60 per $1,000 of assessed valuation,
subject to two limitations, set forth below. Since the City of Federal Way is not a full service city, the City is only allowed
$1.60. The remaining $2.00 is for the fire district ($1.50) and library district ($0.50).
Chapter 84.55 of the State RCW was amended by Initiative No. 747 (which was passed by voters on November 6,
2001), limits the total dollar amount of regular property taxes levied by the City to the amount of such taxes levied in
the three most recent years multiplied by a limit factor, plus an adjustment to account for taxes on new construction,
improvements and state -assessed property at the previous year's rate. As amended by Initiative No. 747, the limit
factor is the lesser of 101% or 100% plus the percent change in the Implicit Price Deflator, unless a greater amount is
approved by a simple majority of the voters; and
2. The Washington State Constitution limits the total regular property taxes to 1% of assessed valuation or $10 per
$1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or
below the 1 % limit.
For levy year received in 2019, the City's regular tax levy was $0.97350 per $1,000 on a 2018 assessed valuation of
$11,393,138,728 for a total regular levy of $11,016,216.
Deferred Inflow of Resources
The table below provides details of the deferred inflow of resources as reported on the fund financial statements.
DEFMRED INFLOW OF RES OURCES
AS OF DECEMBER 31, 2019
Deferred Inflow
General Total
General Govt
Property tax
$ 142,296 $ 142,296
Total by Fund:
$ 142,296 $ 142,296
Page 59
NOTE 7 - UNEARNED REVENUES AND RECEIVABLES
Unearned Revenues
The table below provides details of the unearned revenues as reported on the statement of net position.
UNEARNED REVENUES
AS OF DECEMBER 31, 2019
1lnearnedRevenues
General
PAEC Nonmajor
Street Oper. Transportation Godt
Total
General
Govt
Surface
Water
N%mt
Dumas
Bay
Centre
Total
Proprietary
SWM fees
-
-
94,789
94,789
Commute Trip Reduction Grant
73,893 -
73,893
-
-
PAEC Fees
- 67,824
67,824
T113 Grant
- 75,712 -
75,712
-
99,111
;29
Recreation programs / facility
rentals/ other
89,061 - - - 193,740 282,801
299,111
Total by Fund:
S 89,061
$ 73,893 $ 67,824 S 75,712 $193,740
$ 500,230
$ 94,789
S9,111
S 393,901
Receivables & Due from Other Governments
The receivables for the fiscal year ended December 31, 2019 on the government -wide statement of net position are detailed in
the following schedule.
RECEIVABLES & DUE FROM OTHER GOVERNMENTS AS OF DECEMBER 31, 2019
Receivable
General
Street
Utility Tax
Performing Arts &
EtentCtr.Oper.
Transport-
ation
Nonmajor
Gov't
Proprietary
Total
Property tax
$ 162,992
$
$
$
$
$
$
$ 162,992
Admissions tax
48,417
48,417
Real Estate Excise tax
-
935,728
935,728
Utility tax
-
1,117,575
-
-
1,117,575
Gambling tax
39,671
-
-
39,671
Franchise Fee
267,128
-
-
-
-
267,128
Recreation programs/
Facilities
31,618
46,419
-
53,680
39,640
171,357
Grants/contributions/utility
construction contract receivable
366,749
345,218
-
1,369,007
370,915
20,167
2,472,056
Off Duty security & Other
receivable
166,754
-
-
-
18,788
893
186,435
State Shared revenue
3,722,455
87,015
421
25,983
258,115
-
4,093,988
Surface Water Management fees
-
-
-
-
-
99,631
99,631
Total by Fund:
$ 4,805,782
S 432,233
S 1,117,995
S 46,419
$1,394,990
$1,637,226
$ 160,330
$ 9,594,975
Page 60
NOTE 8 — CAPITAL ASSETS
ipital assets activity for the year ended December 31, 2019 is as follows:
CAPITAL AS SETS
AS OF DECEM BER 31, 2019
Adjusted Beginning
1�rBalance
Governmental Activity
Balance
Additions
Deletions
12/3/31/2019
1/1/2019
Capital Assets, not being depreciated:
Land
$283,651,518
$35,204
$ -
$283,686,722
Construction in progress
27,573,934
9,650,029
(2,752,724)
34,471,239
Total capital assets, not being depreciated:
$311,225,452
$9,685,233
$ (2,752,724)
$318,157,961
Capital assets, being depreciated:
Buildings
72,778,190
109,251
-
72,887,441
Improvements other than buildings
26,510,478
719,409
-
27,229,887
Infrastructure
184,065,346
3,333,031
(7,831)
187,390,546
Machinery & equipment
19,338,378
1,428,399
(314,271)
20,452,506
Total capital assets, being depreciated:
302,692,392
5,590,090
(322,102)
307,960,380
Less accumulated depreciation for:
Buildings
(22,758,773)
(3,596,798)
-
(26,355,571)
Improvements other than buildings
(19,084,920)
(1,017,327)
-
(20,102,247)
Infrastructure
(74,805,290)
(5,263,345)
2,503
(80,066,132)
Machinery & equipment
(12,610,063)
(1,334,413)
292,240
(13,652,236)
Total accumulated depreciation:
(129,259,046)
(11,211,883)
294,743
(140,176,186)
Total assets being depreciated, net
173,433,346
(5,621,793)
(27,359)
167,784,194
Governmental activities capital assets, net $484,658,799 $4,063,440 ($2,780,083) $485,942,155
Business -Type Activities
Adjusted Beginning
Balance
1/1/2019
Additions
Deletions
E Balance
2/3 1
2/31/2019
Capital Assets, not being depreciated:
Land
$11,340,293
$ -
$ -
$11,340,293
Construction in progress
1,035,419
290,237
(1,287,265)
38,391
Total capital assets, not being depreciated:
$12,375,712
290,237
(1,287,265)
11,378,684
Capital assets, being depreciated:
Buildings
4,505,348
-
-
4,505,348
Improvements other than buildings
3,916,934
312,997
-
4,229,931
Infrastructure
62,819,344
1,118,845
-
63,938,189
Machinery & equipment
198,794
-
-
198,794
Total capital assets, being depreciated:
71,440,420
1,431,842
-
72,872,262
Less accumulated depreciation for:
Buildings
(3,672,048)
(50,743)
-
(3,722,791)
Improvements other than buildings
(319,867)
(39,169)
-
(359,036)
Infrastructure
(16,305,154)
(628,193)
-
(16,933,347)
Machinery & equipment
(122,621)
(7,127)
-
(129,748)
Total accumulated depreciation:
(20,419,690)
(725,232)
-
(21,144,922)
Total assets being depreciated, net
51,020,730
706,610
-
51,727,340
Business -Type activities capital assets, net
$63,396,442
$996,847
($1,287,265)
$63,106,024
Page 61
At the end of 2019, 21 projects comprise the Construction in Progress for Governmental Activities. Upon completion, the
projects will be capitalized in the Government -wide statements in their appropriate categories. Construction commitments for
Governmental Activities as of December 31, 2019, are as follows:
AS OF DECEMBER 31, 2019
Construction
Remaining
Governmental Activities Projects
in progress
Commitment
W edgewood Park - Plagrounds
$ 147,678
$ -
Trail and pedestrian access improvements
$ 1,263,443
$ 223,795
loth Avenue SW / SW 344th St: SW Campus Drive - 21st Ave SW
318,532
-
SR99HOVLanes Phase 5
22,486,210
1,117,714
SW 336th Way / SW 340th St: 26th PI SW - Hoyt Rd
255,948
-
S 344th Way @ Weyerhaeuser Way S
281,685
-
21st Ave S Pedestrian Connection Project
3,143,693
471,458
Adaptive Traffic Control System Project Ph I
731,938
486,877
City Center Access Ph I Project
2,053,990
446,010
Street Light LED Conversion Project
2,448,024
801,976
Military Rd & S 298th St Compacted Roundabout Project
953,007
125,580
SR509 9th PI South to I1th PI S Pedestrian Improvement Project
78,403
890,192
SR509 SW 312th Street - 21st
21,155
-
Adaptive Traffic Control Ph I1I
140,453
97,506
47th Ave SW & SW Dash Point Rd Compact
6,754
14,325
Horizontal Curve Warning Signs
24,043
7,279
Pac Hwy Non -Motorized Corr - 16th Ave S
8,186
32,052
Citywide Greenway Plan
15,574
331,007
S 348th Variable Message Sign
10,702
89,298
S 314th St Improvements
2,948
-
Citywide Variable Lane Use Control Signal
78,873
121,141
Total Governmental Activities
$ 34,471,239
$ 5,256,210
Depreciation expense was charged to functions/programs of the primary government as follows:
CAPITAL ASSETS DEPRECIATION BY TYPE
AS OF DECEMBER 31, 2019
Governmental and Internal Service Activities
General Government
$142,350
Security of Persons & Property
1,222,462
Transportation
5,538,312
Physical Environment
13,809
Economic Environment
1,777,917
Health
55,779
Culture & Recreation
2,461,254
Total Depreciation - Governmental Activities
$11,211,883
Business -Type Activities
Utilities - Surface Water Management
Culture & Recreation - Dumas Bay Centre
$708,463
16,769
Total Depreciation -Bus ines s -Type Activities
$ 725,232
Page 62
NOTE 9 — PENSION PLANS
The following table represents the aggregate pension amounts for all plans subject to the requirements of the GASB Statement
68, Accounting and Financial Reporting for Pensions for the year 2019:
Aggregate Pension Amounts — All Plans
Pension liabilities
($5,782,289)
Pension assets
$9,116,488
Deferred outflows of resources
$2,963,113
Deferred inflows of resources
($6,505,437)
Pension expense/expenditures
$654,663
State Sponsored Pension Plans
Substantially all City of Federal Way full-time and qualifying part-time employees participate in one of the following
statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost -sharing,
multiple -employer public employee defined benefit and defined contribution retirement plans. The state Legislature
establishes, and amends, laws pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington,
issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required
supplementary information for each plan. The DRS CAFR may be obtained by writing to:
Department of Retirement Systems
Communications Unit
P.O. Box 48380
Olympia, WA 98540-8380
Or
downloaded from the DRS website at www.drs.wa.gov.
Public Employees' Retirement System (PERS)
PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts;
employees of the legislature; employees of district and municipal courts; employees of local governments; and higher
education employees not participating in higher education retirement programs. PERS is comprised of three separate pension
plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with
a defined contribution component.
PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation (AFC) times the member's years of service. The AFC is the average of the member's
24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years
of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from
active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to
reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost -of -
living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and
Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new
entrants on September 30, 1977.
Page 63
Contributions
The PERS Plan 1 member contribution rate is established by State statute at 6 percent. The employer contribution rate is
developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18
percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1
required contribution rates (expressed as a percentage of covered payroll) for 2019 were as follows:
PERS Plan 1
Actual Contribution Rates
Employer
Employee*
January — June 2019
PERS Plan 1
7.52%
6.00%
PERS Plan 1 UAAL
5.13%
Administrative Fee
0.18%
Total
12.83%
6.00%
Jul — December 2019
PERS Plan 1
7.92%
6.00%
PERS Plan 1 UAAL
4.76%
Administrative Fee
0.18%
Total
12.86%
6.00%
* For employees participating in Judicial Benefit Multiplier (JBM), the contribution rate was 12.26%.
The City of Federal Way's actual PERS plan contributions were $811,218 to PERS Plan 1 for the year ended December 31,
2019.
PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation (AFC) times the member's years of service for Plan 2 and 1 percent of AFC for Plan 3.
The AFC is the average of the member's 60 highest -paid consecutive service months. There is no cap on years of service
credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement before
age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years
of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each
year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can
retire under one of two provisions:
• With a benefit that is reduced by three percent for each year before age 65; or
• With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work rules.
PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of five percent
for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30
years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor
benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the
CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of Labor
and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested in the
defined benefit portion of their plan after ten years of service; or after five years of service if 12 months of that service are
earned after age 44.
PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on those
contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change
rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a minimum of 5
percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined contribution
benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan.
Page 64
Contributions
The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1
UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council
adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required
contribution rates (expressed as a percentage of covered payroll) for 2019 were as follows:
PERS Plan 2/3
Actual Contribution Rates
Employer 2/3
Employee 2*
January — June 2019
PERS Plan 2/3
7.52%
7.41%
PERS Plan 1 UAAL
5.13%
Administrative Fee
0.18%
Employee PERS Plan 3
Varies
Total
12.83 %
7.41 %
Jul — December 2019
PERS Plan 2/3
7.92%
7.90%
PERS Plan 1 UAAL
4.76%
Administrative Fee
0.18%
Employee PERS Plan 3
Varies
Total
12.86%
7.90%
* For employees participating in JBM, the contribution rate was 18.53% to 19.75%.
The City of Federal Way's actual PERS plan contributions were $811,218 to PERS Plan 1 and $1,247,242 to PERS Plan 2/3
for the year ended December 31, 2019.
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF)
LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and
as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans.
LEOFF Plan 1 City of Federal Way does not have LEOFF Plan 1.
LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible
for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53
receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is three percent for each
year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement
benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty
disability payments, a cost -of -living allowance (based on the CPI), capped at three percent annually and a one-time duty -
related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the
completion of five years of eligible service.
Contributions
The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2. The employer rate includes an administrative expense component set at 0.18 percent. Plan 2 employers and
employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board.
Effective July 1, 2017, when a LEOFF employer charges a fee or recovers costs for services rendered by a LEOFF 2 member
to a non-LEOFF employer, the LEOFF employer must cover both the employer and state contributions on the LEOFF 2 basic
salary earned for those services. The state contribution rate (expressed as a percentage of covered payroll) was 3.44% as of
July 1, 2019.
Page 65
The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2018 were as follows:
LEOFF Plan 2
Actual Contribution Rates
Employer
Employee
January — June 2019
State and local governments
5.25%
8.75%
Administrative Fee
0.18%
Total
5.43%
8.75%
Jul — December 2019
State and local governments
5.15%
8.59%
Administrative Fee
0.18%
Total
5.33%
8.59%
The City of Federal Way's actual contributions to the plan were $735,539 for the year ended December 31, 2019.
The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement
the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension
Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state
constitution and could be changed by statute. For the state fiscal year ending June 30, 2019, the state contributed $72,959,897
to LEOFF Plan 2. The amount recognized by the City of Federal Way as its proportionate share of this amount is $475,123.
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation
completed in 2019 with a valuation date of June 30, 2018. The actuarial assumptions used in the valuation were based on the
results of the Office of the State Actuary's (OSA) 2007-2012 Experience Study and the 2017 Economic Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2018 actuarial valuation report. The TPL
was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2019. Plan liabilities were
rolled forward from June 30, 2018, to June 30, 2019, reflecting each plan's normal cost (using the entry -age cost method),
assumed interest and actual benefit payments.
Inflation: 2.75% total economic inflation; 3.50% salary inflation
Salary increases: In addition to the base 3.50% salary inflation assumption, salaries are also expected to grow by
promotions and longevity.
Investment rate of return: 7.4%
Mortality rates were based on the RP-2000 report's Combined Healthy Table and Combined Disabled Table, published by the
Society of Actuaries. The OSA applied offsets to the base table and recognized future improvements in mortality by
projecting the mortality rates using 100 percent Scale BB. Mortality rates are applied on a generational basis; meaning, each
member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime.
There were changes in methods and assumptions since the last valuation.
OSA updated modeling to reflect providing benefit payments to the date of the initial retirement eligibility for
terminated vested members who delay application for retirement benefits.
OSA updated COLA programming to reflect legislation signed during the 2018 legislative session that provides
PERS and TRS Plan 1 annuitants who are not receiving a basic minimum, alternate minimum, or temporary disability
benefit with a one-time permanent 1.5% increase to their monthly retirement benefit, not to exceed a maximum of
$62.50 per month.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.4 percent.
To determine that rate, an asset sufficiency test included an assumed 7.5 percent long-term discount rate to determine funding
liabilities for calculating future contribution rate requirements. (All plans use 7.5 percent except LEOFF 2, which has
assumed 7.4 percent). Consistent with the long-term expected rate of return, a 7.4 percent future investment rate of return on
invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue being
made at contractually required rates (including PERS 2/3, PSERS 2, SERS 2/3, and TRS 2/3 employers, whose rates include a
component for the PERS 1, and TRS 1 plan liabilities). Based on these assumptions, the pension plans' fiduciary net position
Page 66
was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return of 7.4 percent was used to determine the total liability.
Long -Term Expected Rate of Return
The long-term expected rate of return on the DRS pension plan investments of 7.4 percent was determined using a building-
block -method. In selecting this assumption, the Office of the State Actuary (OSA) reviewed the historical experience data,
considered the historical conditions that produced past annual investment returns, and considered capital market assumptions
and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the
capital market assumptions and their target asset allocation to simulate future investment returns over various time horizons.
Estimated Rates of Return by Asset Class
Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation
as of June 30, 2019, are summarized in the table below. The inflation component used to create the table is 2.2 percent and
represents the WSIB's most recent long-term estimate of broad economic inflation.
Asset Class
Target Allocation
% Long -Term Expected
Real Rate of Return
Arithmetic
Fixed Income
20%
2.20%
Tangible Assets
7%
5.10%
Real Estate
18%
5.80%
Global Equity
32%
6.30%
Private Equity
23%
9.30%
100 %
Sensitivity of the Net Pension Liability/(Asset)
The table below presents the City of Federal Way's proportionate share* of the net pension liability calculated using the
discount rate of 7.4 percent, as well as what the City of Federal Way's proportionate share of the net pension liability would be
if it were calculated using a discount rate that is 1-percentage point lower (6.4 percent) or 1-percentage point higher (8.4
percent) than the current rate.
1% Decrease
(6.4%)
Current Discount
Rate
7.4%
1% Increase
(8.4%)
PERS 1
$5,482,860
$4,378,167
$3,419,701
PERS 2/3
$10,769,047
$1,404,122
$ 6,280,420
LEOFF 2
$ 1,695,140
$ 9,116,488
$ 15,174,007
Pension Plan Fiduciary Net Position
Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial
report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
At June 30, 2019, the City of Federal Way's reported a total pension liability of $5,782,289 and total pension net asset of
$9,116,488 for its proportionate share of the net pension liabilities as follows:
Liability or Asset)
PERS 1
$4,378,167
PERS 2/3
$1,404,122
LEOFF 2
$(9,116,488)
Page 67
The amount of the asset reported above for LEOFF Plan 2 reflects a reduction for State pension support provided to the City of
Federal Way. The amount recognized by the City of Federal Way as its proportionate share of the net pension asset, the
related State support, and the total portion of the net pension asset that was associated with the City of Federal Way were as
follows:
LEOFF 2 Asset
LEOFF 2 — employer's proportionate share
$ 9,116,488
LEOFF 2 — State's proportionate share of the net pension
liability/(asset) associated with the employer
$(5,970,078)
TOTAL
$ 15,086,566
At June 30, the City of Federal Way proportionate share of the collective net pension liabilities was as follows:
Proportionate
Share 6/30/18
Proportionate
Share 6/30/19
Change in
Proportion
PERS 1
0.115857%
0.113856%
(0.002001)%
PERS 2/3
0.146710%
0.144555%
(0.002155)%
LEOFF 2
0.397656%
0.393513%
0.004143)%
Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis
for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules
of Employer and Nonemployer Allocations for all plans except LEOFF 1.
In fiscal year 2019, the state of Washington contributed 39.57 percent of LEOFF 2 employer contributions pursuant to RCW
41.26.725 and all other employers contributed the remaining 60.43 percent of employer contributions.
The collective net pension liability (asset) was measured as of June 30, 2019, and the actuarial valuation date on which the
total pension liability (asset) is based was as of June 30, 2018, with update procedures used to roll forward the total pension
liability to the measurement date.
Pension Expense
For the year ended December 31, 2019, the City of Federal Way recognized pension expense as follows:
Pension Expense
PERS 1
$110,369
PERS 2/3
$358,403
LEOFF 2
$185,890
TOTAL
$654,663
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2019, the City of Federal Way reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
PERS 1
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$0
$0
Net difference between projected and actual investment
earnings on pension plan investments
$0
$(292,502)
Changes of assumptions
$0
$0
Changes in proportion and differences between
contributions and proportionate share of contributions
$0
$0
Contributions subsequent to the measurement date
$394,904
$0
TOTAL
$394,904
$ 292,502
PERS 2/3
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$402,284
$(301,878
Net difference between projected and actual
investment earnings on pension plan investments
$0
$(2,043,828)
Changes of assumptions
$35,955
$ 589,122
Changes in proportion and differences between
contributions and proportionate share of contributions
$29,557
$(70,684)
Contributions subsequent to the measurement date
$646,301
$
TOTAL
$1,114,137
$(3,005,512)
LEOFF 2
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$656,013
$ 163,939
Net difference between projected and actual
investment earnings on pension plan investments
$0
$(1,869,165)
Changes of assumptions
$15,019
$ 1,025,897
Changes in proportion and differences between
contributions and proportionate share of contributions
$412,542
$(148,423)
Contributions subsequent to the measurement date
$370,499
$0
TOTAL
$1,454,072
$ 3,207,423
Deferred outflows of resources related to pensions resulting from the City of Federal Way's contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Other
amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Year ended
December 31:
PERS 1
2020
$ 64,571
2021
$ 152,949
2022
$ 54,581
2023
$ 20,397
2024
$0
Thereafter
$0
Total
$(292,498)
Year ended
December 31:
PERS 2/3
2020
$ 627,451
2021
$ 1,055,394
2022
$ 471,634
2023
$ 255,404
2024
$ 125,845
Thereafter
$ 1,948
Total
$ 2,537,676
Year ended
December 31:
LEOFF 2
2020
$ 472,455
2021
$ 900,834
2022
$ 397,864
2023
$(199,638
2024
$ 49,869
Thereafter
$ 103,190
Total
$(2,123,850
Page 69
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 2019 on average, there were a total of 350 individuals covered by this system. As of the end of the year, there were
335 active employees of the City and three were drawing retirement benefits. During the year 48 employees left the City's
employment and either had been reimbursed their contributions, reimbursement was pending, or they elected to have their
contributions remain in the plan if the balance was $1,000 or greater.
All regular employees of the City of Federal Way are required to participate in the system, with the City matching the
employee's required contribution. The employee pays 6.2% and this is matched by the composite of a cash match
(approximately 5.2%) and insurance payments (1%) for disability, survivor, accidental death and dismemberment, and lump
sum death benefit coverage. Contributions into the plan are tax deferred.
Employees are entitled to make voluntary contributions to the plan, assuming that highly compensated and non -highly
compensated employees are treated equally. Each payroll period, employees may make a voluntary contribution equal to a
minimum of 1 % of the participant's compensation, not to exceed 10% of the participant's compensation.
Covered payroll for 2019 was $31,216,314 and excluding PERS, LEOFF, FWRS, deferred comp, flex plan, and section 125
covered payrolls was $26,538,971. Total City payroll was $32,166,183. Actual City contributions for the year were
$1,531,949. Actual employee contributions were $1,826,556. All contributions were invested in instruments arranged
through independent investment advisors selected by the Municipal Employers Benefit Trust (MEBT) committee comprised of
the entities of Bellevue, Kirkland, Redmond, Edmonds, Mill Creek, Woodinville, Federal Way, and North East King County
Regional Public Safety Communication Agency (NORCOM) but administered by Northwest Plan Services (NWPS).
Retirement System assets are not the property of the City and are not subject to the claims of the City's general creditors. The
Federal Way Retirement System assets are with Security Trust Company, N.A. who invests Plan assets. MEBT can be
contacted for additional information at (877)-690-5410.
In July 1995, the City implemented the hardship withdrawal and loan provision program that allow participants to have limited
access to their contributions while still employed by the City. Hardship withdrawals are available in the event of financial
necessity resulting from uninsured medical expenses, tuition expenses, purchasing one's primary residence, or to prevent
foreclosure on one's primary residence. Loans receivable as of December 31, 2019 were $1,371,451. After 5 years an
employee becomes 100% vested in their employer contributions. Also an employee becomes 100% vested when they reach
their normal retirement date (the earlier of age 65 or the earliest service retirement date under any other retirement benefit
program to which the City contributes on the employees behalf).
The consulting actuary firm of Northwest Plan Services (N WPS) has been contracted to provide record keeping,
administrative and consulting services related to the Plan Actuarial determinations are not required because accidental death
and dismemberment insurance, long-term disability, survivor income insurance and the lump sum death benefit are provided
by a group insurance policy with Standard Insurance Company; and benefits paid to participants upon retirement are limited
to: (a) a nonforfeitable, nontransferable annuity contract purchased by the plan's trustee, (b) retirement benefits payable from
the employee's account to which no contributions by the City or the participant can be added after retirement, or a single
lump -sum payment equal to the accumulated balance in the employee's account as of his retirement date.
NOTE 10 —RISK MANAGEMENT
The City uses the Risk Management Internal Service Fund to account for its risk financing activities. The City maintains
insurance against most normal hazards. The City faces most of the risks faced by similar sized cities including general liability
for bodily injury, law enforcement, and property liability.
Through its Risk Management Fund, the City records insurance premium costs for general liability coverage and builds
reserves for future claims, self -insured retention, and a future general liability self-insurance program.
There were no settlements in excess of insurance for commercially insured activities for 1996 through 2019. The fund balance
for the Risk Fund as of 12/31/2019 is $1.50 million.
Cyber Security Program
The City of Federal Way employs 1) computer workstation endpoint virus protection on all network connected PC's that is
updated as soon as new definitions are released, 2) system network "next generation" firewall for perimeter protection. In
Page 70
addition the City has cyber liability insurance of $1 million with a $50K deductible for each single event for fund transfer
fraud, extortion, computer fraud, or business interruption. "Also the Council authorized $20,000 in 2018 for a cyber security
audit that was commissioned in 2019. It is currently underway; the audit and review of systems has been completed and a
draft report has been produced which is currently being reviewed. The Council will receive the final report in Q2 2020 for
review and action."
The following is a summary of coverage in force in 2019.
S CHEDULE OF INS URANCE IN FORCE
AS OF DECEMBER 31, 2019
Company Policy Period Details of Coverage Liability Limits
Argonaut
12/31/18-12/31/19
General liability (auto, general, police, e &
$250,000 self -insured retention (SIR) with
o, employment practices, & stop gap)
aggregate limits of $10,000,000.
Arch
in of$0,000. 00with
Insurance
12/31/18-12/31/19
Excess liability
l itsofexcess
aggregatelimits of$10,000,000.
Companyaggregate
Crime/fidelity (employee theft, forgery or
alternation, on premises, in transit, money
Deductible ranges from$5,000 to $25,000
Travelers
1/l/19-1/l/20
orders and counterfeit money, computer
with single loss limits ranging from$50,000
crime, fund transfer fraud and claims
to $1,000,000.
expense)
$25,000 deductible with single loss limits of
Philadelphia
1/1/19-1/1/20
Property coverage
$63,222,577 for buildings and $5,552,803 in
contents.
The City's industrial insurance is provided by the Association of Washington Cities and is administered by the Workers' Comp
Retro Program. Coverage is purchased by means of standard rates per working hour and is computed by the total number of
hours worked by employees multiplied by the basic premium rate assigned to the business risk classification. The following
are benefits provided by industrial insurance: medical services, damaged clothing, travel expenses, time -loss payments,
vocational rehabilitation, partial disability awards, pension awards and survivor benefits.
NOTE 11— LONG-TERM LIABILITIES
The various categories of long-term debt reflected on the City's financial statements are briefly described in the following
paragraphs. Ratings are issued on the bond at the time of issuance. The ratings issued on City bonds are shown on page 71.
General obligation bonds are backed by the City's full faith and credit. Proceeds are typically used for the acquisition or
construction of major capital facilities or equipment. "Councilmanic Bonds" are general obligation bonds issued by City
Council without voter approval. Under State law, repayment of these bonds must be financed from general City revenues
because no additional property taxes can be levied to support related debt service payments. General Obligation bonds
approved by the voters are typically repaid through an annual "excess" property tax levy authorized for this purpose by State
statute. At year-end 2019 the City had no voter -approved bonds outstanding. All principal and interest payments on general
obligation debts are recorded as expenditures by the City's Debt Service Fund.
A) On November 17, 2017, the City issued $6,000,000 of limited tax general obligation bond with an interest rate of
2.17 percent, maturity due date of 11/27/2037 which contains mandatory tender option date of 11/17/2022. Proceeds
were used to pay off the 2014 KeyBank Bond Anticipation Note which was scheduled for maturity on 12/01/2017.
There was no significant economic gain or loss on the transaction.
B) On March 4, 2013 the City issued $12,415,000 of general obligation refunding bonds with an average interest rate of
2.67 percent to provide resources to purchase U.S. Government and State and Local Government Series security that
were placed in an irrevocable trust for the purpose of generating resources to advance refund on $12,310,000 of
outstanding 2003 GO Federal Way Community Center debt on December 1, 2013. As a result the 2003 GO FWCC
bonds are considered to be defeased and the liability has been removed from the governmental activities column of
the statement of net position. This advance refunding was undertaken to reduce total debt service payments over the
next twenty one years by $2,322,943 and resulted in an economic gain of $1,740,458. (Economic gain is the net
present value of future savings between old and the new debt).
C) On December 11, 2019, the City issued $10,945,000 of limited tax general obligation bond with interest rates ranging
from 2.75 percent to 5.00 percent, and a maturity due date of December 1, 2038. Proceeds were used to pay off the
outstanding 2009 SCORE Bond of $12,891,600. As a result, the 2009 SCORE Bond is considered defeased and the
liability was removed from governmental activities column of statement of net position. This payoff was undertaken
to reduce the total debt service payments over the next twenty years by $2,309,077 and resulted in economic gain of
$1,992,140 (Economic gain is the present value of future savings between old and new debt).
Page 71
D) On December 11, 2019, the City issued $4,840,000 of limited tax general obligation bond with interest rates ranging
from 1.95 to 2.65 percent, and a maturity due date of December 1, 2029. Proceeds were used to pay for a portion of
the Performing Arts and Events Center and to pay costs of issuing 2019B Bonds. There was no significant economic
gain or loss on the transaction.
E) On June 28, 2016 the City entered into a Contract Loan Guarantee with Housing Urban Development for
development of the Federal Way Performing Arts and Events Center. This loan, referred to as Section 108 Loan is
authorized up to $3,030,000 with advances of $3,030,000 with a variable rate of 3M LIBOR plus 20 basis points.
The Section 108 Loan contains a 20 year term with provisions to convert to a fixed rate loan at a future date. This
loan converted to a fixed rate on March 28, 2019 with outstanding balance of $2,712,000.
F) On March 28, 2019 the City converted Contract Loan Guarantee with Housing Urban Development to a fixed rate,
ranging from 2.54 to 3.49 percent, and a maturity due date of August 1, 2035. The conversion resulted into an
issuance of $2,712,000 of U.S. Department of HUD Section 108 Government Guaranteed Participation Certificates,
Series HUD 2019-A.
G) The City in conjunction with several other South King County cities (Auburn, Burien, Renton, SeaTac, Tukwila,)
agreed to build a facility to hold its inmates. The total bond in 2009 was $86.325 million and the City of Federal
Way's portion at that time was $15.522 million. In 2019 the facility was able to use its excess revenue from excess
space rented to non-member cities to pay the bond in 2019. The City Council decided to withdraw from the SCORE
interlocal agreement on September 4th, 2018 effective on the year following the date of notice. At the April 16, 2019
council meeting the City Council decided to bond the City portion of the SCORE debt separately from the SCORE
entity. On December 11, 2019, the City issued a $10,945,000 of general obligation bond and used the proceeds to
pay off the outstanding 2009 SCORE bond of $12,891,600. SCORE and Valley Communications joint venture
information can be found on pages 75 thru 76.
The following schedules detail the long-term debt activity and balances of the City for GO Bonds, SCORE and Section 108
HUD Loan, Public Works Trust Fund Loans, Compensated Absences, and Net Pension Liability. Typically we have used the
governmental funds on pages 29 and 30 to liquidate the net pension liability, with the General Fund being the primary fund.
OUTSTANDING GENERAL OBLIGATION DEBT AND LONGTERM LIABILITIES - BY TYPE
DECEMBER31,2019
Bond Rating
Issue Maturity
Interest
Amount
Beginning
Amount
Amount
Ending
Description
Originally
Outstanding
Outstanding
at Issuance
Date Date
Rate
Issued
Debt
Issued
Redeemed
Debt
Governmental Activities:
General Obligation Bonds:
A) 2017 Ltd Tax GO Bond t
Nov 17, 17 Nov 27, 37
2.17
$ 6,000,000
$ 6,000,000
$
$ 192,447
$ 5,807,553
B) 2013 Refund Ltd/Connnunity Center 2
Aa3
Dec 01, 13 Dec 01, 33
2.67
12,415,000
9,895,000
515,000
9,380,000
C) 2019A LTGO Bond (SCORE) °
Aa2
Dec 11, 19 Dec 01, 38
2.75-5.00
10,945,000
10,945,000
D) 2019B LTGO Tax Bond (PAEC) 5
Aa2
Dec 11, 19 Dec 01, 29
1.95-2.65
4,840,000
4,840,000
Subtotal GO Bonds:
-
- -
-
18,415,000
15,895,000
15,785,000
707,447
30,972,553
Other Miscellaneous Debt -Intergovernmental:
E) 2016 Section 108 HUD Loan
Aug 01, 16 Aug 01, 35
1.14
3,030,000
2,712,000
-
2,712,000
-
F) 2019-A Section 108 BUD CP3
Mar 28, 19 Aug 01, 35
2.54 - 3.49
2,712,000
159,000
2,553,000
G) 2009 SCORE/Special Obligation Bond
Al/AA
Nov 04, 09 Jan 01, 39
3.00-6.62
15,522,300
12,891,600
-
12,891,600
-
Subtotal miscellaneous:
-
- -
-
18,552,300
15,603,600
2,712,000
15,762,600
2,553,000
Subtotal GO Bonds plus Misc.
36,967,300
31,498,600
18,497,000
16,470,047
33,525,553
Compensated absences
-
1,998,455
2,119,827
2,082,554
2,035,728
Net Pension Liability (NPL) for Pets 1,2, & 3
-
6,767,594
1,645,164
5,122,430
Subtotal GO bonds, trsc., comp. absences, & NPL
36,967,300
40,264,649
20,616,827
20,197,765
40,683,711
Business -Type Activities:
Public Works Trust Fund Loan (PWTFL):
PW TL - SeaTac Mall Drain Imp
-
May 31, 00 Jul 01, 19
1.00
412,500
16,020
-
16,020
-
PWTL- SeaTac Mall Drain Imp
Aug 14, 00 Jul 01, 19
1.00
2,062,500
80,100
80,100
SubtotalPWTFL
-
- -
-
2,475,000
96,120
-
96,120
-
Compensated absences
-
- -
-
-
110,164
91,929
107,281
94,812
Net Pension Liability (NPL) for Pets 1,2, & 3
-
- -
-
-
911,562
251,703
659,859
Subtotal PWTFL, comp. absences, & NPL:
-
- -
-
2,475,000
1,117,846
91,929
455,104
754,671
( rand Total All Long -Term Debt:
-
- -
-
$ 39,442,300
$ 41,382,495
$ 20,708,756
$ 20,652,869
$41,438,382
1 On November 17, 2017 the City issued $6,000,000 of Ltd Tax GO Bond with an interest rate of 2.17 percent, maturity date of 11/27/2037, mandatory tender
opton date of 11/17/2022. Z The ending 2019 Refund Community bond premium is $183,948 with current year amortization of $51,062.25. 3 Contract Loan
2016 Guarantee Assistance via HUD converted with variable rate to 2019-A HUD Certificate of Participation fixed rate. °The City has issued 2019A Bond to
defease 2009 SCORE Bond. The ending 2019A Bond premium is $1,714,668. 5The City has issued 2019B Bond on December 11, 2019 to pay for a portion of
PAEC construction.
Page 72
S CIIEDULE OF CHANGES IN LONGTERM LIABI ITIHS
PERIOD ENDED DECEMBER 31, 2019
Beginning
Ending
Outstanding
Additions
Reductions
Outstanding
Debt
Debt
Governmental Activities:
General Obligation Bonds
$ 15,895,000 $
15,785,000
$ (707,447) $
30,972,553
Other -intergovernmental debt
15,603,600
2,712,000
(15,762,600)
2,553,000
Compensated absences
1,998,455
2,119,827
(2,082,554)
2,035,728
Net Pension Liability (NPL) for Pers 1,2, & 3
6,767,594
1,645,164
5,122,430
Total Governmental Activities
40,264,649
20,616,827
(20,197,765)
40,683,711
Business -Type Activities:
Enterprise Funds
Public Works Trust Fund Loan
96,120
-
(96,120)
-
Compensated absences
110,164
91,929
(107,281)
94,812
Net Pension Liability (NPL) for Pers 1,2, & 3
911,562
-
(251,703)
659,859
Total Business -Type Activities
1,117,846
91,929
(455,104)
754,671
Total All Funds
$ 41,382,495 $
20,708,756
$ 20,652,869) $
41,438,382
OUTSTANDING GENERAL OBLIGATION DEBT AND LONG-TERMLIABILITIES - BYFUND
DECEMBER 31, 2019
Amount
Beginning
Ending
Description
Originally
Outstanding
Amount
Amount
Outstanding
Due within
Issued
Debt
Issued
Redeemed
Debt
one year
Governmental Long -Term Debt:
General Obligation Bonds:
A) 2017 Ltd Tax GO Bond'
$ 6,000,000
$ 6,000,000
$ -
$ 192,447
$ 5,807,553
$ 391,181
B) 2013 Refund Ltd/Commiunity Center
12,415,000
9,895,000
-
515,000
9,380,000
530,000
C) 2019A LTGO Bond (SCORE) 4
-
-
10,945,000
-
10,945,000
380,000
D) 2019B LTGO Tax Bond (PAEC) 5
-
-
4,840,000
-
4,840,000
430,000
Subtotal GO Bonds:
18,415,000
15,895,000
15,785,000
707,447
30,972,553
1,731,181
Other Miscellaneous Debt-Intergovemrental:
E) 2016 Section 108 IUD Loan3
3,030,000
2,712,000
-
2,712,000
-
-
F) 2019-A Section 108 HUD CP3
-
-
2,712,000
159,000
2,553,000
159,000
G) 2009 SCORE/Special Obligation Bond
15,522,300
12,891,600
-
12,891,600
-
-
Subtotal miscellaneous:
18,552,300
15,603,600
2,712,000
15,762,600
2,553,000
159,000
Subtotal GO Bonds plus Misc.
36,967,300
31,498,600
18,497,000
16,470,047
33,525,553
1,890,181
Compensated absences
-
1,998,455
2,119,827
2,082,554
2,035,728
148,605
Net Pension Liability (NPL) for Pers 1,2, & 3
-
6,767,594
-
1,645,164
5,122,430
na
Subtotal GO bonds, misc., comp. absences, & NPL:
36,967,300
40,264,649
20,616,827
20,197,765
40,683,711
2,038,786
Business -Type Activities:
Enterprise Funds:
Public Works Trust Fund Loan
2,475,000
96,120
-
96,120
-
-
Subtotal Bus -Type Long -Tenn Debt
2,475,000
96,120
-
96,120
-
-
Compensated absences
-
110,164
91,929
107,281
94,812
7,547
Net Pension Liability (NPL) for Pers 1,2, & 3
-
911,562
-
251,703
659,859
na
Subtotal PWTFL, comp. absences, & NPL:
2,475,000
1,117,846
91,929
455,104
754,671
7,547
Grant Total All Long -Term Debt:
$ 39,442,300
$ 41,382,495
$ 20,708,756
$ 20,652,869
$ 41,438,382
$ 2,046,333
Page 73
SCBEDULE OF DEBT SERVICEREQ"RElVIINTS TO MATURITY
AS OF DECEMBER 31, 2019
Government Activities
General Governmental Debt
Grand Total
Principal
Interest
Principal Interest
P&I
Year
2020
1,890,181
1,058,965
1,890,181
1,058,965
2,949,146
2021
1,948,716
1,019,543
1,948,716
1,019,543
2,968,258
2022
6,620,656
952,173
6,620,656
952,173
7,572,829
2023
1,654,000
792,368
1,654,000
792,368
2,446,368
2024
1,704,000
742,458
1,704,000
742,458
2,446,458
2025-2029
9,318,000
2,867,108
9,318,000
2,867,108
12,185,108
2030-2034
7,155,000
1,356,905
7,155,001
1,356,905
8,511,906
2035-2038
3,235,000
277,951
3,235,000
277,951
3,512,951
Total
$ 33,525,553
$ 9,067,471
$ 33,525,553
$ 9,067,471
$ 42,593,024
Computation of Legal Debt Margin
Under Washington State law (RCW 39.36.020), a City may incur general obligation debt for general city purposes in an
amount not to exceed 2'/z percent of the value of all taxable property within the City. State law requires all property to be
assessed at 100 percent of its true and fair value. Unlimited tax general obligation debt requires an approving vote of the
people, and any election to validate such general obligation debt must have a voter turnout of at least 40 percent of those who
voted in the last State general election and of those voting; 60 percent must be in the affirmative. The City Council may, by
ordinance, authorize the issuance of limited tax general obligation debt in an amount up to 1.5% of the valuation within the
City without a vote of the people. No combination of limited or unlimited tax debt may exceed 7'h percent of the valuation.
The debt service on unlimited tax debt is secured by excess property tax levies, whereas the debt service on limited tax debt is
secured by property taxes collected with the City's councilmanic levy. See page 133 for a detailed calculation of the valuation.
The City's legally remaining debt capacities as of December 31, 2019 are:
Computation of Limitation of Indebtedness 2019
General government (no vote required) $ 149,759,386
General government (3/5 majority vote required) 119,724,092
Parks and open space (3/5 majority vote required) 299,310,231
Utilities (3/5 majority vote required) 299,310,231
Total Capacity $ 868,103,940
Compensated Absences
The City's liability for accrued vacation and compensatory time balances is recorded in the schedule below. Accrued
compensated absences for proprietary fund employees are recorded as liabilities in those funds expected to incur the related
future expense. Typically the General Fund has been used to liquidate compensated absences for the General Government.
Governmental Activities:
Current portion
$ 148,605
Noncurrent portion
1,887,123
Business -Type Activities:
Current portion
7,547
Noncurrent portion
87,265
Total Compensated absences
$ 2,130,540
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, 2019 is $-0- for its tax-exempt general obligation bond issues subject to the
Tax Reform Act issued through that date. No arbitrage applies to any of City of Federal Way bonds.
Page 74
NOTE 12 — INTERFUND TRANSACTIONS
Interfund transfers for the year ended December 31, 2019 were as follows:
Interfund Transfers In Out
Governmental Funds:
General Fund
Street Fund
Utility Tax Fund
Debt Service
Performing Arts & Event Center
Operations
Transportation
Performing Arts & Event Center
Nonmajor Governmental Funds
Proprietary Funds:
Surface Water Management
Dumas Bay Centre
Internal Service Funds
$ 7,684,134 $ 3,564,793
2,067,685
20,000 7,900,801
2,113,473 -
1,516,000 -
2,028,307 150,000
1,818,971 -
1,565,926 6,974,703
225,307
1,108
Total: $18,815,604 $18,815,604
The following describes the amounts transferred out during 2019:
General Fund:
• $2,027,685 to Street Fund to subsidize street maintenance and operations.
• $1,516,000 to Performing Art & Event Center to subsidize operations.
• $20,000 to Prop 1 Utility Tax Fund to subsidize operations.
• $1,108 to Fleet & Equipment Fund for a portion of a replacement of a mower.
Utility Tax Fund:
• $6,713,801 to General Fund for operation support.
• $300,000 to Debt Service Fund for debt service payments.
• $387,000 to Federal Way Community Center Fund for operation support.
• $500,000 to Strategic Reserve Fund for establishing a reserve for future strategic needs.
Transportation CIP Fund:
• $40,000 to Street Fund for speed bumps.
• $110,000 to Arterial Street Fund for overlay of streets program.
Nonmajor Funds:
• $1,470,333 from Traffic Safety Fund to General Fund for Police related services.
• $90,000 from Traffic Safety Fund to Transportation CIP Fund for adaptive traffic control system project.
• $100,000 from Lodging Tax Fund to Transportation CIP Fund for S 348t" variable message sign board.
• $813,473 from Real Estate Excise Tax (BEET) Fund to Debt Service Fund for debt payments.
• $1,013,000 from REET Fund to Arterial Street for street overlay.
• $125,000 from REET Fund to Parks CIP Fund for major maintenance of parks facilities.
• $100,000 from REET Fund to Parks CIP Fund for playground equipment.
• $50,000 from REET Fund to Parks CIP Fund for trail and pedestrian access improvements.
• $50,000 from REET Fund to Parks CIP Fund for Lakota Soccer Field upgrade project.
• $1,549,897 from REET Fund to Performing Arts & Event Center CIP Fund for construction project.
• $1,613,000 from REET Fund to Street Construction Projects SR99 HOV Lanes Phase V and Military Rd & S 298t'
Street Compacted Roundabout
Page 75
Interfund loans for the year ended December 31, 2019 were as follows:
InterfundLoans Receivable Payable
General Fund $ 1,732,790 $ -
Special Revenue Funds:
Performing Arts & Event Center Ops. -
Coirnrninity Development Block Grant - 224,818
Capital Project Funds:
Street
1,507,972
Total Interfund Loans $1,732,790 $1,732,790
NOTE 13 — CONTRACTUAL OBLIGATIONS, CONTINGENCIES AND LITIGATION
As of December 31, 2019 there were minimal minor claims for damages and 11 lawsuits pending against the City. With one
exception noted below, in the opinion of the City Attorney, none of these lawsuits or claims exposes the City to potential
liability, either singly or in the aggregate, that materially affect the financial condition of the City. One exception to this
statement is a claim for $10,777,440.22 filed by a contractor, Graham Construction, Inc., in relation to Phase 5 of the Pacific
Highway improvement project. While the City disputes this claimed amount and is vigorously defending the City's position, it
is possible that the liability for the City may exceed the original contract budget by a significant amount.
While not material in the opinion of the City Attorney, two significant police civil rights — use of force lawsuits are also of
note. The first is the Hunter case, in which the court has entered judgement in the amount of $400,000 plus attorney's fees.
Insurance coverage is likely to be denied in this matter as the bulk of the judgment is in the form of punitive damages. The
second is the Hernandez case, where the initial claim was for $25 million, and a subsequent demand was $4 million. Litigation
council believes that we have a strong defense in the Hernandez matter, and the City has already reached the City's self -
insured retention limit in the matter. Our insurance carrier is heavily involved in the Hernandez matter and should cover any
future costs associated with this lawsuit.
NOTE 14 — JOINT VENTURES
Valley Communication Center
The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by
the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way
was formally admitted as an addition in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal
Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter was
automatically extended for a consecutive five year -period.
The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency
communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing
agencies, which include King County Fire Districts 2, 20, 26, 40, 43, 44, and 47; City of Pacific Police and Fire Departments,
City of Algona Police Department, City of Des Moines Police Department, City of Black Diamond Police and Fire
Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire
Department. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth
conditions of services and rates charged.
The allocation of prorated financial participation among the five member cities is the percentage of dispatched calls attributed
to each jurisdiction compared to the total estimated dispatched calls, for the current twelve month period ending December 31.
The percentages are applied to the current approved budget, less revenue from all other sources. Distribution of the current
year net income is based on the same percentages. The 2019 cost distributions for the five member cities are as follows:
Dispatchable Percent
City Calls of Total
Kent 117,225 27.08%
Renton 90,760 20.96%
Auburn 98,169 22.68%
Tukwila 36,163 8.35%
Federal Way 90,616 20.93%
Total 432,933 100.00%
Page 76
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-M11z 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 2019
Kent Renton Auburn Tukwila Federal Way Total
Equity @ January 1, 2019 $ 8,090,075 $ 5,882,812 $ 6,040,862 $ 2,950,970 $ 4,904,390 $ 27,869,109
Prior period adjustment $ - $ - $ - $ - $ - $ -
Current year increase 707,890 548,074 592,819 218,376 547,205 2,614,364
Equity @ December 31, 2019 $
8,797,965 $
6,430,886 $
6,633,681 $
3,169,346 $
5,451,595 $
30,483,473
Percent of equity
28.86%
21.10%
21.76%
10.40%
17.88%
100.00%
Prior year's percent of equity
29.03%
21.11%
21.68%
10.59%
17.60%
100.00%
A complete set of financial statements is available from:
Valley Communications Center, 27519 108th Avenue SE, Kent, WA 98030.
South Correction Entity
On September 4th, 2018 the City Council decided to withdraw from the SCORE interlocal agreement effective on January lst
2020 per city resolution 18-741 in 2019. At the April 16, 2019 council meeting the City Council decided to bond the City
portion of the SCORE debt separately from the SCORE entity. Although the city will not maintain ownership of the facility,
the City of Federal Way is still responsible for paying their proportionate share of SCORE debt service in the amount of
10,945,000 as of 12/31/2019.
Page 77
Joint Venture Reconciliation to Government Wide Financial Statements
Balance Balance
1/1/2019 Additions Reductions 12/31/2019
Valley Communications Public Development Authority $ - $ - $ - $ -
SCORE Public Development Authority 12,891,600 - (12,891,600) $ -
Total Due to Other Governmental Units 12,891,600 - (12,891,600) -
Valley Communications Center 4,904,390 547,205 - 5,451,595
South Correctional Entity (SCORE) 3,485,570 (3,485,570) - -
Total Joint Venture Capital Assets 8,389,960 (2,938,365) - 5,451,595
Total Investment in Joint Ventures $ 21,281,560 $ (2,938,365) $ (12,891,600) $ 5,451,595
NOTE 15 — PRIOR PERIOD ADJUSTMENTS
Governmental -type capital asset activity prior period adjustment of $0.97M of $1.8M is for Construction in progress that
was incorrectly classified as governmental -type activity, and should be business -type activity. In addition $0.83M of $1.8M
was for S 356th St SR99-SR161 maintenance, and not subject to capitalization.
Beg. Bal Prior Period Adj. Beg. Ending Bal.
Governmental Activity 1/1/2019 Adjustment Balance Additions Deletions 12/31/2019
Capital assets, not being depreciated:
Land
$ 283,651,518
$ -
$ 283,651,518
$ 35,204 $
-
$ 283,686,722
Construction in progress
29,376,231
(1,802,297)
27,573,934
9,650,029
(2,752,724)
34,471,239
Total capital assets, not being depreciated:
313,027,749
(1,802,297)
311,225,452
9,685,233
(2,752,724)
318,157,961
Capital assets, being depreciated
Buildings
729778,190
729778,190
109,251
729887,441
Improvements other than buildings
269510,478
269510,478
719,409
27,229,987
Infrastructure
184,065,346
184,065,346
3,333,031
(7,831)
187,390,546
Machinery and equipment
19,338,378
19,338,378
1,428,399
(314,271)
20,452,506
Total capital assets, being depreciated:
302,692,392
-
302,692,392
5,590,090
(322,102)
307,960,380
Less accumulated depreciation for:
Buildings
(22,758,773)
(229758,773)
(3,596,798)
(269355,571)
Improvements other than buildings
(199084,920)
(199084,920)
(1,017,327)
(209102,247)
Infrastructure
(74,805,290)
(74,805,290)
(5,263,345)
2,503
(80,066,132)
Machinery and equipment
(12,610,063)
(12,610,063)
(1,334,413)
292,240
(13,652,236)
Total accumulated depreciation:
(129,259,046)
(129,259,046)
(11,211,883)
294,743
(140,176,186)
Total assets being depreciated, net
173,433,346
173,433,346
(5,621,793)
(27,359)
167,784,194
Governmental activities capital assets, net
$ 486,461,096
$ (1,802,297) $ 484,658,799
$ 4,063,440 $
(2,780,083) $ 485,942,155
Business -type capital asset activity prior period adjustment
of $0.97M is for Construction in progress that was incorrectly
classified as governmental -type activity.
Beg. Bal
Prior Period
Adj. Beg.
Ending Bal.
Business- Activities
1/1/2019
Adjustment
Balance
Additions
Deletions
12/31/2019
Capital assets, not being depreciated:
Land
$11,340,293
$ -
$11,340,293
$ - $
-
$11,340,293
Construction in progress
61,151
974,268
1,035,419
290,237
(1,287,265)
38,391
Total capital assets, not being depreciated:
11,401,444
974,268
12,375,712
290,237
(1,287,265)
11,378,684
Capital assets, being depreciated
Buildings
4,505,348
-
4,505,348
-
4,505,348
Improvements other than buildings
3,916,934
3,916,934
312,997
4,229,931
Infrastructure
62,819,345
62,819,345
1,118,845
63,938,190
Machinery and equipment
198,794
198,794
-
198,794
Total capital assets, being depreciated:
71,440,420
-
71,440,420
1,431,842
-
72,872,262
Less accumulated depreciation for:
Buildings
(3,672,048)
(3,672,048)
(50,743)
(3,722,791)
Improvements other than buildings
(319,867)
(319,867)
(39,169)
(359,036)
Infrastructure
(16,305,154)
(16,305,154)
(628,193)
(16,933,347)
Machinery and equipment
(122,621)
(122,621)
(7,127)
(129,748)
Total accumulated depreciation:
(20,419,690)
(20,419,690)
(725,232)
-
(21,144,922)
Total assets being depreciated, net
51,020,730
51,020,730
706,610
51,727,340
Business Type activities capital assets, net
$ 62,422,174
$ 974,268
$ 63,396,442
$ 996,847 $
(1,287,265)
$ 63,106,024
Page 78
NOTE 16 — LEASES
Operating Leases
Starting February 1, 2014, the City of Federal Way started leasing the office buildings for the downtown Police substation.
Total cost for the leases was $36,000 for the year ended December 31, 2019. The lease of the substation expires December 31,
2020. The future minimum lease payment for the downtown Police substation lease is $36,000. This lease does not
automatically renew.
NOTE 17 — SELF-INSURANCE
The City's unemployment insurance, where it has elected to become fully self -insured. Related premiums received by the
Unemployment Insurance Fund is used to reimburse the State Employment Security Department for unemployment benefits
paid to eligible individuals, and to establish reserves for the payment of estimated future unemployment claims liability. The
City is self -insured for unemployment compensation. The weekly payments to an employee range from $169 - $713
depending upon the wages earned. At December 31", 2019 the City had $273,701 in reserve.
Unemployment compensation benefits
2018
2019
Unemployment reserve, Jan. 1st
$ 359,328 $
279,116
Unemployment compensation benefits
34
-
Unemployment compensation interest
3,757
4,219
Claim payments during the year
(84,003)
(9,634)
Operating Transfer to General Fund
-
-
Unemployment reserve, Dec. 31st
$ 279,116 $
273,701
The City's also elected to self -insure for medical. Related premiums are received by the Health Insurance Fund and are used
to reimburse weekly claims to the Group Health Corporation for medical benefits paid the eligible individuals, and establish
reserves for the payment of estimated future medical benefits claims liability. At December 3l't, 2019 the City had $3,657,598
in reserve.
Health Insurance benefits
2018
2019
Health Insurance reserve, Jan. 1st
$ 2,550,138
$ 2,940,232
Health Insurance benefits
4,284,099
4,392,860
Health Insurance Employee Contributions
209,633
222,779
Health Insurance COBRA Contributions
21,805
34,319
Health Insurance interest
31,992
50,753
Health Insurance Recovery -Stop Loss
482,308
281,299
Prescription Claimpayments during the year
(876,391)
(772,307)
Medical Claim payments during the year
(2,747,675)
(2,518,705)
Insurance -Stop Loss
(642,805)
(567,344)
Other services and charges
(372,872)
(406,288)
Health Insurance reserve, Dec. 31st
$ 2,940,232
$ 3,657,598
Page 79
NOTE 18 — ACCOUNTING AND REPORTING CHANGES
GASB statement 83, GASB statement 84, GASB statement 88 and GASB statement 90 were not relevant and/or material to
City of Federal Way.
NOTE 19 — SUBSEQUENT EVENT
On March 9, 2020 the City Mayor issued a Proclamation of Emergency in order to prevent the spread of coronavirus disease
(COVID-19). Then, on March 23, 2020, State Gov. Jay Inslee issued a statewide two week stay at home order and closed all
businesses except essential services. On April 3, 2020 the stay at home order was extended through May 4tn
This coronavirus shock could be more severe than the Great Financial Crisis of 2007-08, as it will hit households, businesses,
financial institutions, and markets all at the same time locally, nationally and globally. In this historical widespread pandemic
the city is carefully considering all the options to adjust its budget as sales tax revenue and economic activity decline.
In addition, in response to COVID-19 the council committees and the regular council meetings are being held remotely rather
than in- person meetings. Virtual meetings could be a new normal for the city in the future to do necessary municipal business.
,41k
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page 81
REQUIRED SUPPLEMENTARY
INFORMATION
Page 82
Citv of Federal Wav
Schedule of Proportionate Share of the Net Pension Liability
PERS1
As of June 30, 2019
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
Employer's proportion of the net pension liability (asset) % 0.110831% 0.114008%
0.114547%
0.115857%
0.113856%
Employer's proportionate share of the net pension
liability $ 5,797,492 6,122,767
5,435,344
5,174,213
4,378,167
TOTAL $ 5,797,492 6,122,767
5,435,344
5,174,213
4,378,167
Covered payroll $ 12,744,440 13,650,352
14,496,336
15,317,923
15,564,017
Employer's proportionate share of the net pension
liability as a percentage of covered payroll % 45.49% 44.85%
37.49%
33.78%
28.13%
Plan fiduciary net position as a percentage of the total
pension liability % 59.10% 57.03%
61.24%
63.22%
67.12%
Notes to Schedule:
* Employer's covered payroll increased by $246K, but net pension liability
decreased by $0.80 million. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability
PERS 2 - 3
As of June 30, 2019
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
Employer's proportion of the net pension liability (asset)% 0.143122% 0.146079%
0.147025%
0.146710%
0.144555%
Employer's proportionate share of the net pension
liability $ 5,113,831 7,354,962
5,108,416
2,504,943
1,404,121
TOTAL $ 5,1139831 793549962
591089416
2,504,943
1,4049121
Covered payroll $ 12,744,440 13,650,352
14,496,336
15,317,923
15,564,017
Employer's proportionate share of the net pension
liability as a percentage of covered payroll % 40.13% 53.88%
35.24%
16.35%
9.02%
Plan fiduciary net position as a percentage of the total
pension liability % 89.20% 85.82%
90.97%
95.77%
97.77%
Notes to Schedule:
* Employer's covered payroll increased by $246K, but net pension liability
decreased by $1.10 million. Additional years information will be displayed as it becomes available.
Page 83
Citv of Federal Wav
Schedule of Proportionate Share of the Net Pension Liability (Asset)
LEOFF 2
As of June 30, 2019
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
Employer's proportion of the net pension liability (asset; %
0.427847% 0.415772%
0.434711%
0.397656%
0.393513%
Employer's proportionate share of the net pension liability
(asset) $
(4,397,411) (2,418,255)
(6,032,380)
(8,073,284)
(9,116,488)
LEOFF 2 - State's proportionate share of the net pension
liability (asset) associated with the employer $
(2,907,569) (1,576,526)
(3,913,092)
(5,227,229)
(5,970,078)
TOTAL $
(7,3049980) (399949781)
(999459472)
(13,300,513)
(1590869566)
Covered payroll $
12,477,707 12,625,740
13,610,662
13,157,989
13,865,920
Employer's proportionate share of the net pension liability as
a percentage of covered payroll %
-35.24%-19.15%
-44.32%
-61.36%
-65.75%
Plan fiduciary net position as a percentage of the total
pension liability %
111.67% 106.04%
113.36%
118.50%
119.43%
Notes to Schedule:
* Employer's covered payroll increased by $708K and net pension
asset
increased by $1.OM. Additional years information will be displayed as it becomes available.
9��� -*11
City of Federal Way
Schedule of Employer Contributions
PERS1
As of December 31, 2019
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
Statutorily or contractually required contributions
$
584,359 663,133
745,500
792,384
811,218
Contributions in relation to the statutorily or contractually
required contributions
$
(584,359) (663,133)
(745,500)
(792,384)
(811,218)
Contribution deficiency (excess)
$
- -
-
-
Covered Payroll
$
13,309,318 13,887,684
15,134,713
15,255,177
16,208,573
Contributions as a percentage of covered payroll
%
4.39% 4.77%
4.93%
5.19%
5.00%
Notes to Schedule:
* Employer's covered payroll increased by $953K. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contributions
PERS 2-3
As of December 31, 2019
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
Statutorily or contractually required contributions
$
750,485 866,073
1,034,441
1,154,906
1,247,242
Contributions in relation to the statutorily or contractually
required contributions
$
(750,485) (866,073)
(1,034,441)
(1,154,906)
(1,247,242)
Contribution deficiency excess
$
Covered Payroll
$
13,309,318 13,887,684
15,134,713
15,255,177
16,208,573
Contributions as a percentage of covered payroll
%
5.64% 6.24%
6.83%
7.57%
7.69%
Notes to Schedule:
* Employees covered payroll increased b $953K. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contributions
LEOFF2
As of December 31, 2019
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
Statutorily or contractually required contributions
$
625,331 669,609
688,577
702,132
735,539
Contributions in relation to the statutorily or contractually
required contributions
$
(625,331) (669,609)
(688,577)
(702,132)
(735,539)
Contribution deficiency (excess)
$
Covered Payroll
$
12,382,722 13,274,725
13,365,190
13,373,925
14,142,286
Contributions as a percentage of covered payroll
%
5.05 % 5.04 %
5.15 %
5.25 %
5.20 %
Notes to Schedule:
* Employees covered payroll increased b $768K Additional years information will be displayed as it becomes available.
Page 85
Combining Statement — Nonmajor Governmental Funds' Description
For the Year Ended December 31, 2019
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 HotebMotel Lodging Tax Fund was established to account for all lodging tax receipts and disbursements related to
tourism promotion and acquisition and/or operation of tourism -related facilities.
The Federal Way Community Center Fund was established to account for the operation of the community center. The fund
is supported by user fees and designated utility tax transfers.
The Traffic Safety Fund was established to account for the penalties and fines collected in criminal traffic violations and
those related to the operation of the Red Light Photo Enforcement Program. Funds collected for traffic safety shall be used
for, but not limited to prevention, education, and enforcement effectors related to traffic safety and compliance with traffic
control devices within the city, including maintenance and operation costs.
The Community Development Block Grant Fund accounts for the receipt and disbursement of federal grant revenue
received through the Department of Housing and Urban Development's Community Development Block Grant Program.
Separate subsidiary records are maintained to administer the individual projects accounted for in this fund.
The Path and Trails Reserve Fund was established in accordance with State law to accumulate unexpended proceeds of the
City's ''/z% motor vehicle fuel tax receipts which are restricted in use to the construction and maintenance of paths and trails
within City right-of-way. In August 2013, King County voters approved a new $0.1877, six -year, inflation adjusted property
tax lid lift to expand park and recreation opportunities. Seven percent of the County levy proceeds will be distributed to
cities for acquisition and development of open space and natural lands and city trail projects that support connections to the
regional trail system.
The Technology Fund was established to account for a technology fee collected on business license fees, and parks and
recreation fees to accommodate the high cost and need to continually replace telecommunications, data, network, hardware,
and software systems caused by a continuous and rapidly changing technology environment.
Capital Proiects Funds
The Capital Project Funds account for the acquisition or construction of major capital facilities with the exception of those
facilities financed by proprietary and trust funds. The major sources of revenue for this fund are general obligation bond
proceeds, grants from other agencies, local taxes and contributions from other funds.
The Real Estate Excise Tax Fund was established to account for the City's real estate excise tax and the transfers to pay for
debt and capital projects.
The Downtown Redevelopment CIP Fund accounts for receipts of Local Infrastructure Financing Tool (LIFT), and
downtown redevelopment projects.
The City Facilities CIP Fund accounts for receipts and disbursements related to acquisition, design, construction and any
other related municipal facility and community/senior capital project expenditures.
The Parks CIP Fund was established to account for receipts and disbursements related to acquisition, design, construction
and any other related parks capital project expenditures.
The Capital Project Reserve Fund accounts for receipts and disbursements related to acquisition, design, construction and
any other related municipal facility and community/senior capital project expenditures.
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2019
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net):
Taxes
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Fund Balance:
Restricted
Committed
TOTAL FUND BALANCES
Special Capital
Revenue Projects Total
$ 6,514,154 $ 7,440,478 $ 13,954,632
727,711 83 8, 83 8 1,566,549
- 935,763 935,763
117,968 - 117,968
528,980 54,515 583,495
7,888,813 9,269,594 17,158,407
436,822
10,402 447,224
198,960
- 198,960
19,102
34,438 53,540
32,753
- 32,753
224,818
- 224,818
193,740
- 193,740
1,106,195
44,840 1,151,035
3,319,832 8,336,745 11,656,577
3,462,786 888,009 4,350,795
6,782,618 9,224,754 16,007,372
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 7,888,813 $ 9,269,594 $ 17,158,407
Page 87
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2019
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel
Street
Recycling
Studies
Lodging Tax
$ 437,013
$ 173,889
$ 669,406
$ 1,194,225
49,677
20,345
75,469
134,637
45,500
-
18,788
-
170,912
31,721
-
31,866
703,102
225,955
763,663
1,360,728
5,001 21,326 - 11,245
16,732 10,158 14,736 -
19,102 - - -
40,835 31,484 14,736 11,245
Fund Balance:
Restricted - - 748,927 1,349,483
Committed 662,267 194,471 - -
TOTAL FUND BALANCES 662,267 194,471 748,927 1,349,483
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 703,102 $ 225,955 $ 763,663 $ 1,360,728
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2019
Federal way
Community
Paths and
Community
Traffic
Development
Trails
Technology
Center
Safety
Block Grant
Reserve
Total
ASSETS
Cash and Cash Equivalents
$ 1,392,170
$ 1,512,736
$ 61,991
$ 1,070,016
$ 2,708
$ 6,514,154
Investments
154,247
172,398
-
120,633
305
727,711
Receivables (net):
Accounts and contracts
53,680
-
-
-
-
117,968
Due from other governments
-
-
293,693
788
-
528,980
TOTAL ASSETS
1,600,097
1,685,134
355,684
1,191,437
3,013
7,888,813
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
96,458
216,000
86,792
-
-
436,822
Accounts/payroll payable
68,878
79,665
8,791
-
-
198,960
Retainage payable
-
-
-
-
-
19,102
Deposits payable
32,753
-
-
-
-
32,753
Interfund loans payable
-
-
224,818
-
-
224,818
Unearned revenue
193,740
-
-
-
-
193,740
TOTAL LIABILITIES
391,829
295,665
320,401
-
-
1,106,195
Fund Balance:
Restricted
-
-
29,985
1,191,437
-
3,319,832
Committed
1,208,268
1,389,469
5,298
-
3,013
3,462,786
TOTAL FUND BALANCES
1,208,268
1,389,469
35,283
1,191,437
3,013
6,782,618
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES
$ 1,600,097
$ 1,685,134
$ 355,684
$ 1,191,437
$ 3,013
$ 7,888,813
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2019
Real Estate
Excise Tax
Downtown
City
Capital Project
Fund
Redevelopment
Facilities
Parks
Reserve
Total
ASSETS
Cash and Cash Equivalents
$ 3,052,690
$ 2,221,727
$ 259,355
$ 1,576,048
$ 330,658
$ 7,440,478
Investments
344,160
250,477
29,240
177,683
37,278
838,838
Receivables (net):
Taxes
935,728
35
-
-
-
935,763
Due from other governments
-
54,515
-
-
54,515
TOTAL ASSETS
4,332,578
2,526,754
288,595
1,753,731
367,936
9,269,594
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable -
Retainage payable 32,700
TOTAL LIABILITIES 32,700
10,402
1,738
12,140
10,402
34,438
44,840
Fund Balance:
Restricted 4,299,878 2,526,754
30,342
1,479,771
- 8,336,745
Committed - -
258,253
261,820
367,936 888,009
TOTAL FUND BALANCES 4,299,878 2,526,754
288,595
1,741,591
367,936 9,224,754
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 4,332,578 $ 2,526,754
$ 288,595
$ 1,753,731 $
367,936 $ 9,269,594
Page 90
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For Year Ended December 31, 2019
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
Special
Capital
Revenue
Projects
Total
$ 486,776
$ 5,193,441
$ 5,680,217
1,493,906
1,459,704
2,953,610
2,618,652
14,550
2,633,202
3,577,248
-
3,577,248
143,612
167,819
311,431
349,240
55,292
404,532
8,669,434
6,890,806
15,560,240
13,267
- 13,267
2,063,200
- 2,063,200
2,091,561
- 2,091,561
515,766
- 515,766
67,984
- 67,984
564,498
- 564,498
2,493,844
83,349 2,577,193
159,000
- 159,000
72,988
- 72,988
77,414
912,417 989,831
8,119,522
995,766 9,115,288
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 549,912 5,895,040 6,444,952
OTHER FINANCING SOURCES (USES)
Transfers in
1,240,926
325,000
1,565,926
Transfers out
(1,660,333)
(5,314,370)
(6,974,703)
TOTAL OTHER FINANCING
SOURCES (USES)
(419,407)
(4,989,370)
(5,408,777)
NET CHANGE IN FUND BALANCES
130,505
905,670
1,036,175
FUND BALANCES - BEGINNING
6,652,113
8,319,084
14,971,197
FUND BALANCES - ENDING
$ 6,782,618
$ 9,224,754
$ 16,007,372
Page 91
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2019
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel
Street
Recycling
Studies
Lodging Tax
REVENUES
Taxes $
-
$ -
$ -
$ 290,600
Intergovernmental
543,588
115,332
-
-
Service charges and fees
768,883
431,901
76,376
-
Fines and forfeitures
-
-
-
-
Interest
7,741
3,623
14,345
26,125
Other
-
4,800
-
-
TOTAL REVENUES
1,320,212
555,656
90,721
316,725
EXPENDITURES
Current:
General government
-
-
13,267
-
Security of persons and property
-
-
-
Transportation
1,646,342
-
-
Physical environment
-
515,766
-
-
Economic environment
-
-
-
67,984
Health
-
-
-
-
Culture and recreation
-
-
-
-
Debt service:
Principal
-
-
-
-
Interest/fiscal charges/admin fees
-
-
-
-
Capital outlay
-
-
14,736
-
TOTAL EXPENDITURES
1,646,342
515,766
28,003
67,984
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (326,130)
39,890
62,718
248,741
OTHER FINANCING SOURCES (USES)
Transfers in
853,926
-
-
-
Transfers out
-
-
-
(100,000)
TOTAL OTHER FINANCING
SOURCES (USES)
853,926
-
-
(100,000)
NET CHANGE IN FUND BALANCES
527,796
39,890
62,718
148,741
FUND BALANCES - BEGINNING
134,471
154,581
686,209
1,200,742
FUND BALANCES - ENDING $
662,267
S 194,471
$ 748,927
$ 1,349,483
Page 92
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2019
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
Federal way Community Paths and
Community Traffic Development Trails Technology
Center Safety Block Grant Reserve Total
$ - $ - $ - $ 196,176 $ - $ 486,776
30,458 - 794,226 10,302 - 1,493,906
1,338,501 - - - 2,991 2,618,652
- 3,577,248 - - - 3,577,248
35,253 34,540 - 21,963 22 143,612
344,440 - - - - 349,240
1,748,652 3,611,788 794,226 228,441 3,013 8,669,434
13,267
- 2,063,200 - - - 2,063,200
445,219 - - - 2,091,561
- - - - - 515,766
- - - 67,984
- - 564,498 - - 564,498
2,493,844 - - - - 2,493,844
- - 159,000 - - 159,000
- 72,988 - - 72,988
- 62,678 - - - 77,414
2,493,844 2,571,097 796,486 - - 8,119,522
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (745,192) 1,040,691 (2,260) 228,441 3,013 549,912
OTHER FINANCING SOURCES (USES)
Transfers in
387,000
-
- - - 1,240,926
Transfers out
-
(1,560,333)
- - - (1,660,333)
TOTAL OTHER FINANCING
SOURCES (USES)
387,000
(1,560,333)
- - - (419,407)
NET CHANGE IN FUND BALANCES
(358,192)
(519,642)
(2,260) 228,441 3,013 130,505
FUND BALANCES - BEGINNING
1,566,460
1,909,111
37,543 962,996 - 6,652,113
FUND BALANCES - ENDING
$ 1,208,268
$ 1,389,469 $
35,283 $ 1,191,437 $ 3,013 $ 6,782,618
Page 93
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For Year Ended December 31, 2019
Real Estate
Excise Tax Downtown City
Fund Redevelopment Facilities Parks
REVENUES
Capital Project
Reserve
Total
Taxes $
5,171,643
$ 21,798 $
$ - $
$ 5,193,441
Intergovernmental
459,704
1,000,000
-
1,459,704
Service charges and fees
-
-
14,550
14,550
Interest
82,578
36,109
5,816 35,900
7,416 167,819
Other
50,000
- 5,292
- 55,292
TOTAL REVENUES
5,763,925
1,057,907
5,816 55,742
7,416 6,890,806
EXPENDITURES
Current:
Culture and recreation
-
-
- 83,349
- 83,349
Capital outlay
719,409
-
193,008
912,417
TOTAL EXPENDITURES
719,409
-
- 276,357
- 995,766
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
5,044,516
1,057,907
5,816 (220,615)
7,416 5,895,040
OTHER FINANCING SOURCES (USES)
Transfers in -
Transfers out (5,314,370)
TOTAL OTHER FINANCING
SOURCES (USES) (5,314,370) -
NET CHANGE IN FUND BALANCES (269,854) 1,057,907
FUND BALANCES - BEGINNING 4,569,732 1,468,847
FUND BALANCES - ENDING $ 4,299,878 $ 2,526,754
325,000
- 325,000
5,816 104,385
282,779 1,637,206
$ 288,595 $ 1,741,591
- 325,000
- (5,314,370)
- (4,989,370)
7,416 905,670
360,520 8,319,084
$ 367,936 $ 9,224,754
Page 94
ARTERIAL STREET
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Intergovernmental $ 529,999 $ 529,999 $ 543,588 $ 13,589
Service charges and fees - - 768,883 768,883
Interest 5,000 5,000 7,741 2,741
TOTAL REVENUES 534,999 534,999 1,320,212 785,213
EXPENDITURES
Current:
Transportation
1,515,064
1,625,064
1,646,342
(21,278)
TOTAL EXPENDITURES
1,515,064
1,625,064
1,646,342
(21,278)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(980,065)
(1,090,065)
(326,130)
763,935
OTHER FINANCING SOURCES (USES)
Transfers in
1,013,000
1,123,000
853,926
(269,074)
Transfers out
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
1,013,000
1,123,000
853,926
(269,074)
NET CHANGE IN FUND BALANCES
32,935
32,935
527,796
494,861
FUND BALANCES - BEGINNING
100,001
94,682
134,471
39,789
FUND BALANCES - ENDING S
132,936
S 127,617 S
662,267
S 534,650
Page 95
SOLID WASTE & RECYCLING
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
REVENUES
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Physical environment
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
$ 138,900 $ 113,214
$ 115,332
$ 2,118
312,000 415,496
431,901
16,405
1,200 1,200
3,623
2,423
- -
4,800
4,800
452,100 529,910
555,656
25,746
491,549 555,549 515,766 39,783
491,549 555,549 515,766 39,783
OVER (UNDER) EXPENDITURES (39,449) (25,639) 39,890 65,529
OTHER FINANCING SOURCES (USES)
Transfers out - (40,000) - 40,000
TOTAL OTHER FINANCING
SOURCES (USES) - (40,000) - 40,000
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
(39,449) (65,639) 39,890 105,529
99,880 154,581 154,581 -
FUND BALANCES - ENDING $ 60,431 $ 88,942 $ 194,471 $ 105,529
Page 96
SPECIAL CONTRACTS/STUDIES
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Service charges and fees $ - $ - $ 76,376 $ 76,376
Interest - - 14,345 14,345
TOTAL REVENUES - - 90,721 90,721
EXPENDITURES
Current:
General government - -
13,267
(13,267)
Capital outlay 13,200 100,000
14,736
85,264
TOTAL EXPENDITURES 13,200 100,000
28,003
71,997
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (13,200) (100,000)
62,718
162,718
NET CHANGE IN FUND BALANCES
(13,200)
(100,000)
62,718 162,718
FUND BALANCES - BEGINNING
140,929
686,209
686,209 -
FUND BALANCES - ENDING S
127,729
S 586,209 S
748,927 S 162,718
Page 97
HOTEL/MOTEL LODGING TAX
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 300,000 $ 300,000
$ 290,600
$ (9,400)
Interest
6,000 6,000
26,125
20,125
TOTAL REVENUES
306,000 306,000
316,725
10,725
EXPENDITURES
Current:
Economic environment 294,700 294,700 67,984 226,716
TOTAL EXPENDITURES 294,700 294,700 67,984 226,716
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 11,300 11,300 248,741 237,441
OTHER FINANCING SOURCES (USES)
Transfers out - - (100,000) (100,000)
TOTAL OTHER FINANCING
SOURCES (USES) - - (100,000) (100,000)
NET CHANGE IN FUND BALANCES 11,300 11,300 148,741 137,441
FUND BALANCES - BEGINNING 1,048,246 1,177,880 1,200,742 22,862
FUND BALANCES - ENDING $ 1,059,546 $ 1,189,180 $ 1,349,483 $ 160,303
FEDERAL WAY COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ -
$ -
$ 30,458
$ 30,458
Service charges and fees
1,590,875
1,590,875
1,338,501
(252,374)
Interest
10,000
37,476
35,253
(2,223)
Other
340,000
340,000
344,440
4,440
TOTAL REVENUES
1,940,875
1,968,351
1,748,652
(219,699)
EXPENDITURES
Current:
Culture and recreation
2,312,036
2,324,036
2,493,844
(169,808)
Capital outlay
-
7,500
-
7,500
TOTAL EXPENDITURES
2,312,036
2,331,536
2,493,844
(162,308)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(371,161)
(363,185)
(745,192)
(382,007)
OTHER FINANCING SOURCES (USES)
Transfers in
387,000
387,000
387,000
-
TOTAL OTHER FINANCING
SOURCES (USES)
387,000
387,000
387,000
-
NET CHANGE IN FUND BALANCES
15,839
23,815
(358,192)
(382,007)
FUND BALANCES - BEGINNING
1,563,087
1,566,460
1,566,460
-
FUND BALANCES - ENDING $
1,578,926
$ 1,590,275
$ 1,208,268 $
(382,007)
Page 99
TRAFFIC SAFETY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Fines and forfeitures
$ 3,802,000 $ 3,802,000
$ 3,577,248
$ (224,752)
Interest
13,500 13,500
34,540
21,040
TOTAL REVENUES
3,815,500 3,815,500
3,611,788
(203,712)
EXPENDITURES
Current:
Security of persons and property
1,952,627
1,972,627
2,063,200
(90,573)
Transportation
675,105
585,105
445,219
139,886
Capital outlay
-
28,471
62,678
(34,207)
TOTAL EXPENDITURES
2,627,732
2,586,203
2,571,097
15,106
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
1,187,768
1,229,297
1,040,691
(188,606)
OTHER FINANCING SOURCES (USES)
Transfers out (1,470,333) (1,560,333) (1,560,333) -
TOTAL OTHER FINANCING
SOURCES (USES) (1,470,333) (1,560,333) (1,560,333) -
NET CHANGE IN FUND BALANCES (282,565) (331,036) (519,642) (188,606)
FUND BALANCES - BEGINNING 1,857,566 1,909,111 1,909,111 -
FUND BALANCES - ENDING $ 1,575,001 $ 1,578,075 $ 1,389,469 $ (188,606)
Page100
COMMUNITY DEVELOPMENT BLOCK GRANT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
REVENUES
Intergovernmental
TOTAL REVENUES
EXPENDITURES
Current:
Health
Debt service:
Principal
Interest/fiscal charges/admin fees
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 668,902 $ 1,213,402 $ 794,226 $ (419,176)
668,902 1,213,402 794,226 (419,176)
492,410
1,036,910
564,498
472,412
150,000
150,000
159,000
(9,000)
50,000
50,000
72,988
(22,988)
692,410
1,236,910
796,486
440,424
OVER (UNDER) EXPENDITURES
(23,508)
(23,508)
(2,260)
21,248
NET CHANGE IN FUND BALANCES
(23,508)
(23,508)
(2,260)
21,248
FUND BALANCES - BEGINNING
39,874
37,544
37,543
(1)
FUND BALANCES - ENDING $
16,366 $
14,036 $
35,283 $
21,247
Page 101
PATH & TRAILS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
REVENUES
Taxes
Intergovernmental
Interest
TOTAL REVENUES
EXPENDITURES
Current:
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 160,000 $ 160,000 $ 196,176 $ 36,176
9,000 9,000 10,302 1,302
- 20,000 21,963 1,963
169,000 189,000 228,441 39,441
169,000 189,000 228,441 39,441
169,000
189,000
228,441
39,441
930,546
962,997
962,996
(1)
$ 1,099,546
$ 1,151,997
$ 1,191,437 $
39,440
Page102
TECHNOLOGY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Service charges and fees $
20,000
$ 20,000
$ 2,991
$ (17,009)
Interest
-
-
22
22
TOTAL REVENUES
20,000
20,000
3,013
(16,987)
EXPENDITURES
Current:
General government
-
15,986
-
15,986
TOTAL EXPENDITURES
-
15,986
-
15,986
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
20,000
4,014
3,013
(1,001)
OTHER FINANCING SOURCES (USES)
Transfers out
-
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
-
-
-
-
NET CHANGE IN FUND BALANCES
20,000
4,014
3,013
(1,001)
FUND BALANCES - BEGINNING
-
-
-
-
FUND BALANCES - ENDING $
20,000
$ 4,014
$ 3,013
$ (1,001)
Page103
Budget and Actual — Debt Service Fund Description
For the Year Ended December 31, 2019
The Debt Service Fund accounts for the accumulation of resources for the payment of general obligation and special
assessment bond principal, interest and related costs. Revenues for this fund consist of transfers from Real Estate Excise Tax
Fund, transfers from the Utility Tax Fund, and/or other revenues designated by the City Council.
Page104
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2019
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Interest $
30,000
$ 45,000
$ 67,690
$ 22,690
Other
934,389
934,390
-
(934,390)
TOTAL REVENUES
964,389
979,390
67,690
(911,700)
EXPENDITURES
Current:
Debt service:
Principal
1,055,147
14,055,147
12,882,847
1,172,300
Interest/fiscal charges/admin fees
1,097,363
1,097,363
1,031,100
66,263
TOTAL EXPENDITURES
2,152,510
15,152,510
13,913,947
1,238,563
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(1,188,121)
(14,173,120)
(13,846,257)
326,863
OTHER FINANCING SOURCES (USES)
Bond proceeds
-
13,000,000
10,995,000
(2,005,000)
Bond premium
-
-
1,714,668
1,714,668
Transfers in
813,473
813,473
2,113,473
1,300,000
Transfers out
-
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
813,473
13,813,473
14,823,141
1,009,668
NET CHANGE IN FUND BALANCES
(374,648)
(359,647)
976,884 1,336,531
FUND BALANCES - BEGINNING
2,901,022
2,956,848
2,956,848 -
FUND BALANCES - ENDING
$ 2,526,374
$ 2,597,201
$ 3,933,732 $ 1,336,531
Page105
Combining Statement — Internal Service Fund's Description
For the Year Ended December 31, 2019
Internal Service Funds
Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to
other departments or agencies of a government, or to other governments, on a cost -reimbursement basis.
The Risk Management Fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, and worker's compensation claims. Both risk control (to
minimize the losses that strike an organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is also currently recovering costs and building reserves
for general liability including property, casualty, errors and omissions and fidelity coverage.
The Information Systems Fund was established to account for all costs associated with data processing, telecommunications
and the Geographical Information System (GIS). This fund will own and depreciate all non-proprietary fund assets related to
these functions, and will charge equipment/software users for both maintenance/operating costs and equipment replacement
charges based on depreciation schedules.
The Support Services Fund will account for duplication, graphics and other general support services provided to departments
and funds throughout the City.
The Fleet and Equipment Fund accounts for the cost of maintaining City vehicles and other motorized equipment. Rates
charged to user departments are based on the full cost of maintaining equipment items, including the recovery of related
depreciation expense.
The Buildings and Furnishings Fund accounts for all costs associated with the operation and maintenance of specified City
buildings. City building facilities and furnishings will be owned by this Fund, and both maintenance/operating costs and
depreciation recovery will be charged to City departments and funds.
The Health Insurance Fund accounts for all self -insuring for medical insurance. The premiums paid by the City's
medical benefit contributions and employee medical deductions pay for the medical and pharmaceutical
claims. Also, this fund establishes reserves for the payment of estimated future claims.
The Unemployment Insurance Fund is currently self -insuring State Unemployment Compensation. Related
premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability.
Page106
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2019
Risk
Information
Support
Fleet and
Management
Systems
Services
Equipment
ASSETS
Current Assets
Cash and Cash Equivalents
$ 1,567,219
$ 3,912,794
$ 218,813
$ 7,959,492
Prepaid items
-
-
5,000
-
Receivables (net):
Accounts and contracts
-
-
-
893
TOTAL CURRENT ASSETS
1,567,219
3,912,794
223,813
7,960,385
Noncurrent assets
Capital assets:
Building/structures
-
-
-
-
Machinery/furniture/equipment
6,715,286
309,617
12,635,411
Less accumulated depreciation
(5,161,067)
(159,883)
(8,175,881)
TOTAL NONCURRENT ASSETS
1,554,219
149,734
4,459,530
TOTAL ASSETS
1,567,219
5,467,013
373,547
12,419,915
DEFERRED OUTFLOWS RELATED TO
PENSIONS
-
58,320
-
5,275
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
64,689
137,715
6,445
151,561
TOTAL CURRENT LIABILITIES
64,689
137,715
6,445
151,561
Long-term liabilities
Compensated absences payable
56,107
-
Net Pension Liability
223,779
20,462
TOTAL LONG-TERM LIABILITIES
- 279,886
-
20,462
TOTAL LIABILITIES
64,689 417,601
6,445
172,023
DEFERRED INFLOWS RELATED TO
PENSIONS
- 127,690
-
11,645
NET POSITION
Net Investment in capital assets
- 1,554,219
149,734
4,459,530
Unrestricted
1,502,530 3,425,823
217,368
7,781,992
TOTAL NET POSITION
$ 1,502,530 $ 4,980,042
$ 367,102
$ 12,241,522
Page107
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2019
Buildings and
Self Health
Unemployment
Furnishings
Insurance
Insurance
TOTAL
ASSETS
Current Assets
Cash and Cash Equivalents
$ 3,018,911
$ 3,736,071
$ 279,926
$ 20,693,226
Prepaid items
-
-
-
5,000
Receivables (net):
Accounts and contracts
-
-
-
893
TOTAL CURRENT ASSETS
3,018,911
3,736,071
279,926
20,699,119
Noncurrent assets
Capital assets:
Building/structures
16,545,121
-
-
16,545,121
Machinery/furniture/equipment
-
19,660,314
Less accumulated depreciation
(11,974,139)
(25,470,970)
TOTAL NONCURRENT ASSETS
4,570,982
10,734,465
TOTAL ASSETS
7,589,893
3,736,071
279,926
31,433,584
DEFERRED OUTFLOWS RELATED TO
PENSIONS
7,573
-
-
71,168
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
45,652
78,473
6,225
490,760
TOTAL CURRENT LIABILITIES
45,652
78,473
6,225
490,760
Long-term liabilities
Compensated absences payable
-
56,107
Net Pension Liability
32,685
276,926
TOTAL LONG-TERM LIABILITIES
32,685 -
333,033
TOTAL LIABILITIES
78,337 78,473 6,225
823,793
DEFERRED INFLOWS RELATED TO
PENSIONS
18,656 -
157,991
NET POSITION
Net Investment in capital assets
4,570,982 - -
10,734,465
Unrestricted
2,929,491 3,657,598 273,701
19,788,503
TOTAL NET POSITION
$ 7,500,473 $ 3,657,598 $ 273,701
$ 30,522,968
Page1O8
INTERNAL SERVICE FUNDS
COMBINING STATEMENT
OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31,
2019
Risk
Information
Support
Fleet and
Management
Systems
Services
Equipment
OPERATING REVENUES:
Service charges and fees
$ 1,103,040
$ 2,231,803
$ 142,963
$ 2,167,706
Intergovernmental
-
20,901
-
-
Miscellaneous
113,193
148
TOTAL OPERATING REVENUES
1,216,233
2,252,852
142,963
2,167,706
OPERATING EXPENSES:
Personnel services
-
803,530
-
109,006
Materials and supplies
-
297,739
18,758
501,055
Services and charges
77,021
896,185
80,216
481,107
Insurance
505,945
-
-
-
Claims
747,969
-
-
-
Depreciation
-
362,482
44,360
874,758
TOTAL OPERATING EXPENSES
1,330,935
2,359,936
143,334
1,965,926
OPERATING INCOME (LOSS)
(114,702)
(107,084)
(371)
201,780
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
13,290
Interest income
21,754
44,672
3,209
96,123
TOTAL NON -OPERATING REVENUES (EXPENSES) 21,754
44,672
3,209
109,413
INCOME (LOSS) BEFORE TRANSFERS
(92,948)
(62,412)
2,838
311,193
Capital contributions
38,042
-
90,587
Transfers in
-
1,108
Transfers out
CHANGE IN NET POSITION
(92,948)
(24,370)
2,838
402,888
NET POSITION - BEGINNING
1,595,478
5,004,412
364,264
11,838,634
NET POSITION - ENDING
$ 1,502,530
$ 4,980,042
$ 367,102
$ 12,241,522
Page109
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2019
Buildings and
Self Health
Unemployment
Furnishings
Insurance
Insurance
TOTAL
OPERATING REVENUES:
Service charges and fees
$ 507,696 $
4,931,257
$
$ 11,084,465
Intergovernmental
-
-
20,901
Miscellaneous
8,190
121,531
TOTAL OPERATING REVENUES
515,886
4,931,257
11,226,897
OPERATING EXPENSES:
Personnel services
129,846
-
1,042,382
Materials and supplies
51,386
-
868,938
Services and charges
405,554
4,264,644
9,634
6,214,361
Insurance
-
-
-
505,945
Claims
-
747,969
Depreciation
796,386
2,077,986
TOTAL OPERATING EXPENSES
1,383,172
4,264,644
9,634
11,457,581
OPERATING INCOME (LOSS)
(867,286)
666,613
(9,634)
(230,684)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
13,290
Interest income
45,135
50,753
4,219
265,865
TOTAL NON -OPERATING REVENUES (EXPENSES) 45,135
50,753
4,219
279,155
INCOME (LOSS) BEFORE TRANSFERS
(822,151)
717,366
(5,415)
48,471
Capital contributions
-
128,629
Transfers in
1,108
Transfers out
CHANGE IN NET POSITION
(822,151)
717,366
(5,415)
178,208
NET POSITION - BEGINNING
8,322,624
2,940,232
279,116
30,344,760
NET POSITION - ENDING
$ 7,500,473 $
3,657,598
$ 273,701
$ 30,522,968
Page110
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other funds for goods and services
Cash payments for other services/charges
Cash payments to other governments for goods and services
Cash payments for damage deposit
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
Advances (to)/from other funds
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Increases/(decrease)in depreciation expense
(Increases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pensions
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital asset
Risk Information Support Fleet and
Management Systems Services Equipment
$ 1,103,040 $ 2,231,803 $ 142,963 $ 2,166,813
(747,969) - - -
(46,065) (874,584) (102,347) (919,655)
(912,839) - (93,875)
(505,945) (142,109) - -
113,193 148 - -
(83,746) 302,419 40,616 1,153,283
- - - 1,108
- - - 1,108
- (227,282) (28,898) (1,043,590)
- 2,222,319 - 5,899,150
- - - 35,321
1,995,037 (28,898) 4,890,881
21,754 44,671 3,209 96,123
21,754 44,671 3,209 96,123
(61,992) 2,342,127 14,927 6,141,395
1,629,211 1,570,667 203,886 1,818,097
1,567,219 3,912,794 218,813 7,959,492
(114,702) (107,084) (371) 201,780
- 362,482 44,360
874,758
- -
(893)
246,855
-
3,260
(3,272)
30,956 (90,526) (3,373)
62,505
- (1,884)
-
(111,516)
10,520
831
7,885
30,956 409,503 40,987
951,503
$ (83,746) $ 302,419 $ 40,616 $ 1,153,283
$ - $ 38,042 $ - $ 90,587
Page111
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other funds for goods and services
Cash payments for other services/charges
Cash payments to other governments for goods and services
Cash payments for damage deposit
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
Advances (to)/from other funds
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Increases/(decrease)in depreciation expense
(Increases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pensions
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital asset
Buildings and Health Unemployment
Furnishings Insurance Insurance TOTAL
$ 507,696
$ 4,931,257 $
- $ 11,083,572
-
-
- (747,969)
(445,559)
(4,235,195)
(11,048) (6,634,453)
(150,613)
-
- (1,157,327)
-
(1,611)
- (649,665)
8,190
-
121,531
(80,286)
694,451
(11,048) 2,015,689
- 1,108
- 1,108
- (1,299,770)
8,121,469
- - - 35,321
6,857,020
45,136 50,753 4,219 265,865
45,136 50,753 4,219 265,865
(35,150) 745,204 (6,829) 9,139,682
3,054,061 2,990,867 286,755 11,553,544
3,018,911 3,736,071 279,926 20,693,226
(867,286) 666,613 (9,634) (230,684)
796,386 -
2,077,986
- -
(893)
- -
246,855
1,203
1,191
11,381 27,838
(1,414) 37,367
- -
(1,884)
(20,502)
(121,498)
(1,467) -
7,249
787,000 27,838
(1,414) 2,246,373
$ (80,286) $ 694,451 $ (11,048) $ 2,015,689
$ 128,629
Page112
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page113
SUPPLEMENTAL INFORMATION
Page114
MCAG NO. 0711
SCHEDULE 15
CITY OF FEDERAL WAY, WASHINGTON
SCHEDULE OF STATE FINANCIAL ASSISTANCE
For Year Ended December 31, 2019
State Agency
Pass- Thru Agency (if applicable)
Other I.D./
Current Year
Program Title
BARS Account
Grant #
Expenditures
Department of Commerce
FW Emergency Shelter for Homeless Families with Children
001-0000-083-334-04-020
18-46118-02
100,000
LED Street Light Conversion
306-4400-208-334-04-020
17-96608-240
259,206
Safe City
502-0000-046-334-04-020
18-96616-060
14,339
SUBTOTAL DEPARTMENT OF COMMERCE
373,545
Washington Office of Sheriffs and Police Chiefs
WA Auto Theft Prevention Authority Grant
001-0000-090-334-06-090
17-19 WATPA GG-PSATT
169,100
SUBTOTAL WASHINGTON OFFICE OF SHERIFFS AND POLICE CHIEFS
169,100
State Department of Ecology
Shoreline Grant
001-0000-073-334-03-010
SEASM P-1 719-FEDWAY-0033
12,545
Local Solid Waste Financial Assistnace
106-0000-000-334-03-010
W2RLSWFA-1719-FEDWAY-00097
18,421
Stormwater Capacity Grant 2017-2019
401-0000-000-334-03-010
WQSWCAP-1719-FEDWAY-00047
31,718
SUBTOTAL STATE DEPARTMENT OF ECOLOGY
62,684
State Department of Transportation
Commute Trip Reduction
101-0000-000-334-03-060
GCB2157
20,629
Lakota Middle School / SW Dash Pt Rod - Safety Routes
306-4400-204-334-03-080
P-P-113(P02)-1
4,359
SR 99 HOV Lanes Phase V
306-4400-165-334-03-080
8-1-113(011)-1
62,806
SR 509:S Dash Point Road
306-4400-212-334-03-080
P-P-113(P01)-1
15,708
Complete Street ADA Improvements
306-4400-222-334-03-080
C-P-113(001)-1
24,288
21st Ave S S 314th St - S 316th St Grand Staircase
306-4400-201-334-03-060
KSC-TR-0411
278,298
SUBTOTAL STATE DEPARTMENT OF TRANSPORTATION
406,088
TOTAL STATE ASSISTANCE:
1,011417
Page115
MCAG NO. 0711
SCHEDULE 16
CITY OF FEDERAL
WAY, WASHINGTON
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For Year
Ended December
31, 2019
Federal Agency
From
From
Passed
Pass- Thru Agency (if applicable)
CFDA
Other
Pass -Through
Direct
Total
through to
Federal Program Name
BARS Account
#
I.D. #
Awards
Awards
Expenditures
Subrecipients
US Department of Housing and Urban Development Office of Community
Planning and Development
Community Development Block Grants/Entitlement Grants
119-7300-801-331-14-218
14.218
801 B-19-MC-53-0015
-
8,583
8,583
8,583
Community Development Block Grants/Entitlement Grants
119-7300-951-331-14-218
14.218
951 B-19-MC-53-0015
-
76,000
76,000
-
Community Development Block Grants/Entitlement Grants
119-7300-956-331-14-218
14.218
956 B-19-MC-53-0015
-
10,000
10,000
10,000
Community Development Block Grants/Entitlement Grants
119-7300-961-331-14-218
14.218
961 B-18-MC-53-0015
-
25,000
25,000
-
Community Development Block Grants/Entitlement Grants
119-7300-961-331-14-218
14.218
961 B-19-MC-53-0015
-
104,224
104,224
-
Community Development Block Grants/Entitlement Grants
119-7300-966-331-14-218
14.218
966 B-19-MC-53-0015
-
29,000
29,000
-
Community Development Block Grants/Entitlement Grants
119-7300-967-331-14-218
14.218
967 B-19-MC-53-0015
-
31,287
31,287
31,287
Community Development Block Grants/Entitlement Grants
119-7300-987-331-14-218
14.218
987 B-19-MC-53-0015
-
10,000
10,000
10,000
Community Development Block Grants/Entitlement Grants
119-7300-900-331-14-218
14.218
900 B-14-MC-53-0015
-
218,417
218,417
-
Community Development Block Grants/Entitlement Grants
119-7300-994-331-14-218
14.218
994 B-19-MC-53-0015
-
30,000
30,000
30,000
Community Development Block Grants/Entitlement Grants
119-7300-996-331-14-218
14.218
996 B-18-MC-53-0015
-
26,093
26,093
-
Community Development Block Grants/Entitlement Grants
119-7300-996-331-14-218
14.218
996 B-19-MC-53-0015
-
68,941
68,941
-
Community Development Block Grants/Entitlement Grants
119-7300-997-331-14-218
14.218
997 B-19-MC-53-0015
-
6,681
6,681
6,681
Community Development Block Grants/Entitlement Grants
119-7300-998-331-14-218
14.218
997 B-19-MC-53-0015
150,000
150,000
150,000
SUBTOTAL CFDA 14.218 Entitlement Grants Cluster
REFER TO NOTES 13
794,226
794,226
246,551
US Department of Justice Bureau of Justice Assistance
Bulletproof Vest Partnership Program
001-0000-090-331-16-607
16.607
BPV
11,651
11,651
SUBTOTAL CFDA 16.607
REFER TO NOTES 1-3
11,651
11,651
US Department of Justice Bureau of Justice Assistance
Pass-thru City of Seattle
Edward Byrne Memorial Justice Assistance Grant Program
001-0000-090-333-16-738
16.738
2016-DJ-BX-0138
7,458
-
7,458
-
Edward Byrne Memorial Justice Assistance Grant Program
001-0000-090-333-16-738
16.738
2017-DJ-BX-0496
13,888
13,888
SUBTOTAL CFDA 16.738
REFER TO NOTES 13
21,346
21,346
US Department of Justice Office of Community Oriented Policing Services
Public Safety Partnership and Community Policing Grants
001-0000-090-331-16-710
16.710
#2017UMWX0104
177,167
177,167
SUBTOTAL CFDA 16.710
REFER TO NOTES 13
177,167
177,167
US Department of Transportation National Highway Traffic Safety Administration
Pass-thru Washington Traffic Safety Commission
State and Community Highway Safety
00 1 -0000-090-333-20-600
20.600
DHGN
22,658
22,658
SUBTOTAL CFDA 20.600 Highway Safety Cluster
REFER TO NOTES 1-3
22,658
22,658
US Department of Transportation Federal Highway Administration
Pass-thru Washington State DOT
Highway Planning and Construction
306-4400-202-333-20-050
20.205
HSIP-OOOS(464)
530,318
-
530,318
-
Highway Planning and Construction
306-4400-204-333-20-050
20.205
SRTS-9917(033)
1,784
-
1,784
-
Highway Planning and Construction
306-4400-209-333-20-050
20.205
NHPP-1008(004)
755,125
-
755,125
-
Highway Planning and Construction
306-4400-210-333-20-050
20.205
NHPP-1013(005)
6,859
-
6,859
-
Highway Planning and Construction
306-4400-211-333-20-050
20.205
HSIP-1031(005)
290,936
-
290,936
-
Highway Planning and Construction
306-4400-213-333-20-050
20.205
AID-0443(009)
50,010
-
50,010
-
Highway Planning and Construction
306-4400-215-333-20-050
20.205
STPUL-1000(005)
24,349
-
24,349
-
Highway Planning and Construction
306-4400-216-333-20-050
20.205
CM-9917(031)
117,958
-
117,958
-
Highway Planning and Construction
306-4400-217-333-20-050
20.205
HSIP-00OS(528)
6,079
-
6,079
-
Highway Planning and Construction
306-4400-218-333-20-050
20.205
HSIP-00OS(524)
21,322
-
21,322
-
Hiahwav Plannina and Construction
306-4400-219-333-20-050
20.205
STPUL-0099 145
6,795
6,795
SUBTOTAL CFDA 20.205 Highway Planning and Construction Cluster
REFER TO NOTES 1-3
1,811,535
1,811,535
US Department of Homeland Security
Pass-thru Military Department
Emerq,ency Management Performance Grants
101-0000-000-333-97-042
97.042
n/a
37,500
37,500
SUBTOTAL CFDA 97.042
REFER TO NOTES 13
37,500
37,500
TOTAL FEDERAL ASSISTANCE:
1,893,039
983,044
2,876,083
246,551
Page116
L-Basis of Accounting
The Schedule of Financial Assistance is prepared on the same basis of accounting as the City of Federal Way's financial statements.
The City uses the modified accrual basis of accounting, which is the basis adapted to governmental fund -type measurement focus.
All grants reported on this schedule have been accounted for in governmental fund types. Grant revenues are determined to be earned
and available at 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.
Z- Program Costs
The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including
the City of Federal Way's portion, are more than shown. Such expenditures are recognized following, as applicable, either the cost principles
in the OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code
of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein
certain types of expenditures are not allowable or are limited as to reimbursement.
3.- Indirect Cost Rate
City of Federal Way did not use the new 10% de minimis indirect cost rate as covered in 200.414 Indirect (F&A) costs,and is currently only
charging direct costs to grants received.
4.- Federal Loans
ie City of Federal Way was approved by the US Department of Housing and Urban Development Office of Community Planning and Development
receive a loan totaling $3,030,000 to finance the Performing Arts& Event Center economic development project. Both the current and prior year
loans are reported on the City of Federal Way's Schedule of Liabilities.
Page117
CAPITAL ASSETS USED IN THE
OPERATION
OF GOVERNMENTAL FUNDS
Page118
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
December 31, 2019
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
2019 2018
$ 283,686,723
$283,651,519
56,342,323
56,233,072
27,229,887
26,510,478
792,192
792,192
187,390,545
184,065, 345
34,471,239
29,376,231
589,912,909 580,628,837
125,244,871
125,244, 871
252,375,395
252,375,395
124,044,111
128,743,225
88,248,532
74,265,346
$ 589,912,909 $ 580,628,837
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net assets.
Page119
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2019
Improvements
Machinery
Construction
Other than
and
in
Total
Total
Function and Activity
Land
Buildings
Buildings
Equipment
Infrastructure
Progress
2019
2018
GENERAL GOVERNMENT
Miscellaneous general government
$ 26,955,433
$ 32,837,958
$ 19,973
$
$ 6,139,001
$
$ 65,952,365
$65,900,063
Total General Government:
26,955,433
32,837,958
19,973
6,139,001
65,952,365
65,900,063
CULTURE AND RECREATION
Culture and Recreation
113,734,037
23,504,365
27,209,914
792,192
94,474,128
1,411,121
261,125,757
260,213,339
Total Culture and Recreation:
113,734,037
23,504,365
27,209,914
792,192
94,474,128
1,411,121
261,125,757
260,213,339
TRANSPORTATION
Streets and Traffic
142,997,253
-
-
-
86,777,416
33,060,118
262,834,787
254,515,435
Total Transportation:
142,997,253
86,777,416
33,060,118
262,834,787
254,515,435
Total General Fixed Asset by Function: $ 283,686,723 $ 56,342,323 $ 27,229,887 $ 792,192 $ 187,390,545 $ 34,471,239 $ 589,912,909 $ 580,628,837
0
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to governmental
funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally,
the capital assets of the internal service funds are included as governmental activities in the statement of net assets.
Page120
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2019
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
CULTURE AND RECREATION
TOTAL CULTURE AND RECREATION
TRANSPORTATION
Streets and traffic
TOTAL TRANSPORTATION
TOTAL GENERAL FIXED ASSETS
Governmental
Funds
Capital Assets
1/1/2019 Additions Deductions
Governmental
Funds
Capital Assets
12/31/2019
$65,900,063 $ 52,302 $ - $65,952,365
65,900,063 52,302 - 65,952,365
260,213,339 969,367 56,949 261,125,757
260,213,339 969,367 56,949 261,125,757
254,515,435 12,772,953 4,453,601 262,834,787
254,515,435 12,772,953 4,453,601 262,834,787
$ 580,628,837 $ 13,794,622 $ 4,510,550 $ 589,912,909
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.
Page 121
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.
Page122
NET POSITION BY COMPONENT
Last Ten Fiscal Years
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Governmental activities
Net investmentin capital assets
465,671,345
470,074,905
470,597,776
468,628,412
466,078,036
424,245,625
440,815,201
461,491,598
467,610,817
463,177,653
Restricted
17,442,323
23,941,601
22,847,077
22,594,884
17,391,272
20,193,214
21,372,596
20,412,211
20,916,203
18,878,459
Unrestricted
44,613,406
38,602,445
45,027,323
48,829,641
57,837,173
46,012,847
42,575,521
36,393,318
41,205,463
37,399,073
Total governmental activities net positi
527,727,074 532,618,951 538,472,176 540,052,936 541,306,481 490,451,686 504,763,318 518,297,127 529,732,483 519,455,185
Bus ness-type activities
Net investmentin capital assets
50,563,097
50,052,887
50,280,880
50,620,091
50,299,229
58,998,176
59,059,646
61,673,201
62,326,054
63,106,022
Restricted
9,411
18,831
26,496
20,559
20,311
15,906
18,438
33,440
39,867
33,261
Unrestricted
5,015,367
5,398,786
5,968,302
6,577269
7 ,219,403
5,814,364
5,142 741
5,791,413
5,779 784
5,704,824
Total business -type activities net positi
55,587,875 55,470,504 56,275,678 57,217,919 57,538,943 64,8289446 64,220,825 67,498,054 68,145,705 68,844,107
Primary government
Net investment in capital assets
516,234,442
520,127,792
520 878:656
519:248,503
516,377,265
483,243,801
499,874,847
523,164,799
529:936:871
526,283,675
Restricted
17,451,734
23:960:432
22,873,573
22,615,443
17,411,583
20,209,120
21,391,034
20,445,651
2Q 956,070
18,911,720
Unrestricted
49,628,773
44,001,231
50,995,625
55,406,910
65,056,576
1 51,827,211
47,718,262
42,184,731
1 46,985,247
43,1031897
Total primary government net assets 583,314,949 588,089,455 594,747,853 597,270,856 598,845,424 555,280,132 568,984,143 585,795,181 597,878,188 588,299,292
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Page123
CHANGES IN NET POSITION
Last Ten Fiscal Years
Expenses
Governmental activities:
General government
$ 4,865,827
$ 4,448,449
$ 4,300,691
$ 4,575,614
$ 4,633,942
$4,743,932
$4,544,037
$4,179,619
$ 4,457,083
$ 4,620,477
Security ofpersons and property
26,842,240
27,222,584
27,604,936
27,894,695
29,703,386
32,017,617
36,018,643
36,632,272
35,513,749
38,010,778
Transportation
9,781,800
13,539,598
9,946,776
9,675,727
11,434,659
13,070,260
12,920,893
13,681,482
15,227,484
14,145,856
Physical environment
451,470
424,466
415,935
490,916
443,127
476,570
469,237
415,771
487,104
519,163
Economic environment
3,175,005
2,782,435
2,645,478
2,191,487
2,785,807
2,973,437
3,206,414
4,074,379
4,739,077
7,304,691
Health and human svcs
767,108
690,643
754,727
1,683,449
1,056,802
1,618,759
1,501,057
1,714,311
1,432,259
1,540,723
Culture and recreation
8,073,804
8,105,578
8,081,401
8,418,920
8,376,205
8,959,555
9,373,278
9,329,314
9,280,828
9,438,271
Interest on long-term debt
685,214
614,571
602,572
1,779,833
1,010,406
461,763
433,729
502,721
542,802
347,437
Total governmental activities expenses
54,642,468
57,828,324
54,352,517
56,710,640
59,444,335
64 21893
68,467,288
70,529,869
71680 86
75,927,396
Business -type activities:
Surface Water Mgmt
3,384,352
3,527,590
3,272,514
3,234,742
3,653,999
4,093,534
4,408,225
4,385,355
4,620,161
4,864,902
Dumas Bay Center
849,176
890,738
873,144
844,623
945,705
1,250,161
1,104,971
1,179,967
921,839
880,135
Total business -type activities expenses
4,233,528
4,418,328
4,145,658
4,079,365
4,599,703
5,343,695
5,513,196
5,565,322
5,542,000
5,745,037
Total primary government expenses
58,875,996
62,246,652
58 498175
60,790,005
64,044,038
69,665,588
73,980,484
76 095191
77,222,386
81,672433
Program Revenues
Governmental activities:
Charges for services
General Government
975,515
816,140
924,966
1,983,033
2,118,896
1,994,674
2,449,406
3,155,863
3,429,034
3,005,077
Security of Persons & Property
5,381,407
4,985,320
5,937,100
5,022,896
4,637,071
5,295,641
5,701,083
6,014,477
5,897,781
6,142,776
Transportation
1,961,083
2,484,058
2,139,292
577,489
1,804,199
1,362,118
1,565,140
2,886,690
3,322,357
3,440,597
Physical Environment
90,512
77,875
89,457
299,337
305,742
302,083
304,294
314,842
319,480
431,901
Economic Environment
636,534
510,483
568,973
2,201,375
3,059,772
2,698,841
1,766,106
2,171,579
2,806,982
5,385,727
Health
153,792
126,710
162,322
-
-
-
-
-
-
-
Culture &Recreation
1,618,659
1,487,099
1,738,098
2,431,603
2,476,383
2,475,852
2,424,129
2,569,962
2,669,174
2,212,816
Operating grants and contributions
9,718,920
4,597,981
5,367,163
6,007,682
5,410,098
6,544,176
5,638,756
6,238,698
6,099,833
6,082,363
Capital grants and contributions
9,044,477
9,716,551
5,225,265
3,892,651
5,632,549
4,508,428
15,863,183
14,864,266
8,549,593
6,201,345
Total governmental activities program revenue
29,580,898
24,802,216
22,152,636
22,416,065
25,444,710
25181813
35,712,097
38,216,377
33,094,234
32,902,602
Business -type activities:
Charges for services
4,246,235
4,020,144
4,222,726
4,096,751
4,174,613
4,662,995
4,900,530
4,997,202
5,035,591
5,325,584
Operating grants and contributions
-
265,660
576,182
774,436
177,518
17,108
68,970
53,282
48,504
31,718
Capital grants and contributions
430,090
328,130
790,033
1,078,904
622735
144,577
Total business -type activities program revenue!
4,246,235
4,285,804
4,798,908
4,871,187
4,782,221
5,008,233
5,759,533
6,129,388
5,706,830
5,501,879
33,827,133
29,088,020
26,951,544
27,287,252
30,226,931
30,190,046
41,471,630
44,345,765
38,801,064
38,404,481
Net(Expense)/Revenue
Governmental activities
(25,061,570)
(33,026,108)
(32,199,881)
(34,294,574)
(33,999,625)
(39,140,080)
(32,755,191)
(32,313,492)
(38,586,152)
(43,024,794)
Business -type activities
12,707
(132,524)
653,250
791,822
182,517
(335,462)
246,337
564,066
164,830
(243,158)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Sales tax
10,708,951
10,858,381
10,534,147
11,346,338
12,173,281
13,297,086
14,222,497
14,199,460
14,731,318
16,051,779
Local Criminal Justice Sales Tax
1,701,120
1,795,971
1,864,991
1,992,667
2,138,406
2,319,124
2,499,527
2,616,306
2,934,354
3,056,010
Utility tax
12,890,310
13,068,510
13,083,179
12,584,293
12,028,878
11,796,550
11,902,866
12,425,975
11,719,589
11,102,083
Property tax
9,609,740
9,867,614
10,052,109
10,152,114
10,349,905
10,460,136
10,539,623
10,718,060
10,937,481
11,095,263
Real estate excise tax
1,403,361
1,560,395
1,507,313
2,034,033
2,062,722
3,031,159
5,265,138
4,226,344
4,240,825
5,171,643
Gambling Tax
493,486
511,005
114,443
178,696
176,068
177,807
190,051
210,029
229,524
232,942
Hotel/MotelTax
149,058
185,289
193,344
208,839
231,828
266,053
283,220
301,603
291,671
290,601
Admissions Tax
-
-
-
-
-
-
-
547,229
867,169
827,537
Leasehold tax
5,757
6,259
5,820
5,989
6,693
6,104
3,784
4,218
4,618
5,898
Other
1,210,341
1,061,026
838,259
868,261
1,145,798
2,052,748
1,526,995
3,693,915
2,405,133
2,867,900
Gain on sale of capital assets
-
-
-
-
-
-
-
142,935
-
-
Loss on investment in joint venture
-
-
-
-
-
-
-
-
-
(16,377,170)
Transfers
152,768
(113,000)
(140,500)
(137,419)
(116,000)
(17,959)
633,124
(942,000)
(123,502)
225,307
Total governmental activities
38,324,892
38,801,450
38,053,106
39,233,811
40,197,580
43,388,808
47,066,825
48,144,074
48,238,180
34,549,793
Business -type activities:
Other
17,646
12,405
11,424
13,000
22,507
24,917
45,405
60,544
132,692
192,598
Transfers
152,768
113,000
140,500
137,419
116,000
17,959
633,124
942,000
123,502
225,307
Total business -type activities
(135,122)
125,405
151,924
150,419
138,507
42,876
(587,719)
1002 544
256194
(32,709)
Total primary government
$ 38189 770
$ 38,926,855
$ 38,205,030
$ 39,384,230
$ 40,336,087
$ 43 431684
$ 46 479106
$ 49,146,618
$ 48 494 74
$ 34 51 0085
Change in Net Position
Governmental activities
$13,263,321
$ 5,775,342
$ 5,853,224
$ 4,939,237
$ 6,197,955
$ 4,248,728
$14,311,632
$15,830,582
$ 9,652,028
$(8,475,001)
Business -type activities
(122,415)
(7,119)
805,174
942,241
321,025
(292,586)
(341,384)
1,566,611
421,024
(275,866)
Prior Period Adjustment
-
(3,358,477)
(4,944,409)
(37,035,737)
(266,237)
(586,155)
2,009,955
(828,029)
Net Effect - Change in Accounting for Pensions
10 485 698
Total primary government
$ 13,140,907
$ 5,768,223
$ 6,658,398
$ 2,523,001
$ 1,574,570
43,565,293) $ 13,704,011
$ 16,811,038
$ 12,083,007
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Page124
GOVERNMENT -WIDE REVENUES BY SOURCE AND EXPENSES BY FUNCTION
Last Ten Fiscal Years
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Pro ram Revenues
Charges for Services
15,063,736
14,507,828
15,782,934
16,612,484
18,576,675
18,792,204
19,110,688
22,110,615
23,480,399
25,944,478
Operating Grants and Contributions
9,718,920
4,863,641
5,943,345
6,782,118
5,587,616
6,561,284
5,707,725
6,291,980
6,148,337
6,114,081
Capital Grants and Contributions
9,044,477
9,716,551
5,225,265
3,892,651
6,062,639
4,836,558
16,653,215
15,943,170
9,172,328
6,345,922
General revenues
Sales tax
10,708,951
10,858,381
10,534,147
11,346,338
12,173,281
13,297,086
14,222,497
14,199,460
14,731,318
16,051,779
Local Criminal Justice Sales Tax
11701,120
1,795,971
1,864,991
1,992,667
2,138,406
2,319,124
2,499,527
2,616,306
2,934,354
3,056,010
Utility tax
12,890,310
13,068,510
13,083,179
12,584,293
12,028,878
11,796,550
11,902,866
12,425,975
11,719,589
11,102,083
Property tax
9,609,740
9,867,614
10,052,109
10,152,114
10,349,905
10,460,136
10,539,623
10,718,060
10,937,481
11,095,263
Real estate excise tax
1,403,361
1,560,395
1,507,313
2,034,033
2,062,722
3,031,159
5,265,138
4,226,344
4,240,825
5,171,643
Gambling Tax
493,486
511,005
114,443
178,696
176,068
177,807
190,051
210,029
229,524
232,942
Hotel/MotelTax
149,058
185,289
193,344
208,839
231,828
266,053
283,220
301,603
291,671
290,601
Admissions Tax
547,229
867,169
827,537
Leasehold tax
5,757
6,259
5,820
5,989
6,693
6,104
3,784
4,218
4,618
5,898
Other revenue
1,063,825
960,012
702,833
624,464
883,549
1,820,868
1,159,347
3,149,057
1,932,423
1,581,471
Unrestricted Grants & Contribution
Investment Earnings
179,373
113,419
146,850
256,797
284,757
256,797
413,052
605,402
605,402
1,479,027
Gain on sale of capital assets
15 211
142,935
Total Revenues
72,016,903 68,014,875 65,156,573 66,671 482 70,563,017 73,621,730 87,950,733 93,492,383 87,295,438 89,298,736
Expenses
General Government
4,865,827
41448,449
4,300,691
4,575,614
4,633,942
4,743,932
4,544,037
4,179,619
4,457,083
4,620,477
Security of Persons & Property
26,842,240
27,222,584
27,604,936
27,894,695
29,703,386
32,017,617
36,018,643
36,632,272
35,513,749
38,010,778
Transportation
9,781,800
13,539,598
9,946,776
9,675,727
11,434,659
13,070,260
12,920,893
13,681,482
15,227,484
14,145,856
Physical Environment
451,470
424,466
415,935
490,916
443,127
476,570
469,237
415,771
487,104
519,163
Economic Environment
3,175,005
2,782,435
2,645,478
21191,487
2,785,807
2,973,437
31206,414
41074,379
4,739,077
7,304,691
Health
767,108
690,643
754,727
1,683,449
1,056,802
1,618,759
1,501,057
1,714,311
1,432,259
1,540,723
Culture & Recreation
8,073,804
8,105,578
8,081,401
8,418,920
8,376,205
8,959,555
9,373,278
9,329,314
9,280,828
9,438,271
Interest on long-term debt
685,214
614,571
602,572
1,779,833
11010,406
461,763
433,729
502,721
542,802
347,437
Surface Water Management
3,384,352
3,527,590
3,272,514
3,234,742
3,653,999
4,093,534
4,408,225
4,385,355
4,620,161
4,864,902
Dumas Bay Centre
849,176
890,738
873,144
844,623
945,705
1,250,161
1,104,971
1,179,967
921,839
880,135
Loss on investment in joint venture
16,377,170
Total Ex eases
$ 58,875,996 $ 62,246,652 $ 58,498,175 $ 60,790,005 $ 64,044,038 $ 69,665,588 $ 73,980,484 $ 76,095,191 $ 77,222,386 $ 98,049,603
Source: City of Federal Way Finance
Page125
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
General fund
Reserved
Unreserved
Nons endable
81,146
104,012
69,398
76,538
105,417
136,806
187,284
252,550
229,870
232,353
Restricted
168,398
145,524
60,585
39,081
54,526
71,106
108,147
94,452
389,286
413,128
Committed
21,893
21,893
21,893
3,403,937
34,513
199,013
19,350
19,350
19,350
Assigned
Unassigned
Total general fund
8,188,575
12,372,719
14,783,219
16,003,076
12,480,539
14,362,533
13,794,955
13,380,039
14,954,243
15,936,195
8,438,119 12,644,148 14,935,095 16,140,587 16,044,419 14,604,958 14,289,399 13,746,391 15,592,749 16,601,026
All Other Governmental Funds
Reserved
Unreserved, reported in:
Specialrevenue fund:
Capital projects funds
Debt service funds
Nons
endable
Restricted
17,776,967
19,325,489
18,079,168
17,478,394
17,231,330
19,985,302
21,077,165
20,065,209
20,297,047
18,232,978
Committed
18,611,612
11,642,248
15,813,105
16,371,292
19,530,016
17,114,881
13,932,351
12,705,135
9,772,048
9,856,449
Assigned
1001000
Unassigned
8,124,951
7,798,938
11Q,546
Total all other governmental funds $ 36,488,580 $ 30,967,736 $ 33,892,273 $ 33,849,686 $ 36 761346 $ 37100 183 $ 35,009,516 $ 24,645,393 $ 22,270,157 $ 27,978 881
Source: City of Federal Way Finance
Note: Fund Balance reclassification implementation of GASB 54 for year's 2010 and forwarc
Page126
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2010
2011
1 2012
2013
2014
2015
2016
2017
2018
2019
Revenues
Taxes
$ 37,122,069
$ 37,831,045
$ 37,450,059
$ 38,505,413
$ 39,241,915
$41,387,894
$44,898,868
$45,217,429
$ 46,010,789
$ 47,873,895
Licenses,
fees and permits
2,547,655
2,209,873
2,501,368
2,638,017
3,311,671
3,574,648
3,140,133
4,125,619
4,615,508
5,709,234
Intergovernmental
18,648,749
11,713,248
7,631,014
9,682,511
9,929,833
8,910,603
19,783,107
18,184,915
11,181,594
11,198,229
Charges for services
5,486,632
61131,287
5,686,962
5,965,726
7,591,795
6,467,528
6,934,789
8,523,064
9,580,273
10,432,547
Development Fees
Fines and Forfeitures
2,783,214
2,146,524
3,371,878
3,911,990
3,498,596
4,087,033
4,135,236
4,464,730
4,249,027
4,477,112
Investment earnings
139,698
89,338
122,483
172,049
25Q,439
210,289
308,643
442,466
761:56.
1,042,537
Other revenues 899,092 96Q,012 702,830 678,850 883,549 1,820867 1,159,348 3I49057 1,459,061 1,581,467
Total revenues 67,627,109 61,081,327 57,466,594 61,554,556 64,707,798 66,458,862 80,360,124 84,107,280 77,857,796 82,315,021
Expenditures
General government
4,857,177
4,234,327
4,402,129
4,495,029
4,444,772
4,707,145
4,541,228
4,390,464
41680,000
4,854,271
Security of persons and property
26,892,207
28,332,237
26,562,270
29,028,242
31,235,230
32,471,782
35,655,951
37,702,987
38,033,215
39,253,042
Transportation
5,700,274
7,427,408
6,039,183
5,672,769
6,209,000
7,109,395
7,162,201
8,480,485
9,991,409
9,091,521
Physical Environment
450,971
427,315
409,042
468,220
461,718
478,807
452,720
425,900
486,418
515,766
Economic Environment
3,161,820
2,782,537
2,645,215
2,190,502
2,786,542
2,960,841
3,180,808
4,195,093
4,893,032
5,845,587
Health
765,963
690,824
754,311
1,681,986
1,057,841
1,617,818
1,497,793
1,720,324
1,439,522
1,550,027
Culture and Recreation
5,857,621
51821,160
5,877,370
6,183,381
61246,952
6,787,491
7,032,133
7,173,699
7,197,424
7,442,656
Debt Service
Princi al
494,250
457,520
480,760
1,019,698
963,500
640,482
470,000
8,853,960
659,000
13,041,847
Interes�fiseal charges/admin fees
685,214
614,571
602,572
1,781,778
1,021,945
491,379
471,738
547,501
592,562
1,114,699
Capital
Outlay
1 14,249,501
1 11,560,205
1 4,337,758
1 8,987,949
1 17,508,958
1 10,237,386
1 26,745,849
1 29,161,278
1 11,807,497
1 10,612,471
Total expenditures 63,114,998 62,348,104 52,110,610 61,509,554 71,936,458 67,502,526 87,210,421 102,651,691 79,780,079 93,321,887
Excess of revenues over
(under) expenditures
4,512,111
(1,266,777)
5,355,984
45,002
(7,228,660)
(1,043,664)
(6,850,297)
(18,544,411)
(1,922,283)
(11,006,866)
Other Financing Sources (Uses)
GO bond proceeds
12,415,000
2,925,000
6,105,000
15,785,000
Bond principal payoff
11,955,000
Sale of capital assets
9,162
51500
2,187,756
Anticipation Note
8,209,960
Bond premium
410,660
1,714,668
Transfers in
22,473,128
21,453,223
16,228,281
18,972,853
40,440,790
14,422,187
21,043,890
21,606,659
18,245,170
18,814,496
Transfers out
22 319 725
21 510,423
16,368 781
18,731 107
38 606,598
14,479 146
19 524 820
22,262 134
18 868,672
18,590 297
Total other financing sources (uses) 153,403 (48,038) (140,500) 1,117,906 10,044,152 (56,959) 4,444,070 7,637,281 (623,502) 17,723,867
Net Chan a in fund balances $ 4,665,514 $ 1 314 81 $ 5,215,484 $ 1,162,908 $ 2,815,492 $ 1 100 623 $ 2 406 22 $ 10 907130 $ 2 545 78 $ 6,717,001
Debt service as a percentage of
noncapital expenditures 2.4 % 2.1 % 2.3 % 5.3 % 3.6 % 2.0 % 1.6 % 12.8 % 1.8 % 17.1
Source: City of Federal Way Finance
Page127
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY*
Last Ten Fiscal Years
Fiscal
Year
Real Property
Personal
Property
State Public
Service Property
Total
Total City
Direct
Tax Rate(Decrease)
Percent
Increase
2010
7,948,924,766
228,247,721
91,163,299
8,268,335,786
1.13
-4.1%
2011
7,410,324,237
219,890,581
92,768,984
7,722,983,802
1.20
-6.6%
2012
6,832,615,312
213,389,519
96,827,145
7,142,831,976
1.30
-7.5%
2013
7,076,203,165
212,126,219
97,686,143
7,386,015,527
1.42
3.4%
2014
8,043,211,679
223,362,313
109,128,234
8,375,702,226
1.40
13.4%
2015
8,550,055,199
233,032,732
122,206,127
8,905,294,058
1.25
6.3%
2016
9,148,479,809
228,742,814
112,214,847
9,489,437,470
1.19
6.6%
2017
9,969,974,857
214,620,795
114,210,407
10,298,806,059
1.13
8.5%
2018
11,055,217,680
217,489,810
120,431,238
11,393,138,728
1.06
10.6%
2019
11,742,528,500
220,795,517
112,121,337
12,075,445,354
0.97
6.0%
* Real, personal, and state public service property has been assessed at 100% of the estimated value.
Source: King County Assessor's Office.
Note: These figures include all final tax adjustments, non-taxable, senior citizen exempted property and omits.
The total assessed value was reduced by non-taxable of $103,036,110 yielding a taxable assessed value of
of $11,972,409,244. The taxable assessed valuations are the the basis for the following year's tax levy.
Page128
PROPERTY TAX RATES AND LEVIES, DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
City Direct
Rates*
Overlapping Rates
Fiscal
Year
City of Federal Way
Federal School King
Way District #210 County
Washington
State
King County
Flood Zone
Port of County
Seattle Ferry District
Fire District
#39
Emergency
Medical
Library Services
Sound
Transit Total
TAX RATES PER $1,000 OF ASSESSED VALUATION
2010
1.13
5.11
1.28
2.22
0.11
0.22
0.003
1.50
0.49
0.30
12.36
2011
1.20
5.36
1.34
2.28
0.11
0.22
0.004
1.39
0.57
0.30
12.77
2012
1.30
5.77
1.42
2.42
0.12
0.23
0.004
1.50
0.57
0.30
13.63
2013
1.42
7.55
1.54
2.57
0.13
0.23
0.004
1.82
0.57
0.30
16.14
2014
1.40
7.28
1.52
2.47
0.15
0.22
0.003
1.8 t
0.56
0.34
15.75
2015
1.25
6.42
1.35
2.29
0.14
0.19
1.77
0.50
0.30
14.20
2016
1.19
6.75
1.48
1 .13
0.17
1.91
0.48
0.28
14.55
2017
1.13
6.32
1.38
2.03
0.12
0.15
1.83
0.45
0.26
0.250
13.93
2018
1.06
5.77
1.33
2.92
0.11
0.14
1.73
0.41
0.24
0.230
13.94
2019
0.97
3.63
1.22
2.63
0.10
0.12
1.77
0.37
0.22
0.207
11.24
DETAIL OF TAX RATES FOR 2019
Basic Rate
0.97
0.75
2.63
0.10
0.12
1.50
0.33
6.41
Voted Rate
3.63
0.47
0.27
0.04
0.22
0.21
4.84
TAX LEVIES
2010
9,690,241
61,404,973
437,163,660
756,411,197
35,783,324
73,504,599
1,185,576
20,409,747
97,015,693
102,103,088
102,103,088
1,696,775,186
2011
9,827,398
61,622,347
439,635,095
749,341,420
36,076,405
73,512,887
1,184,924
18,234,001
115,495,462
98,604,471
98,604,471
1,702,138,881
2012
9,967,650
61,493,504
449,642,988
769,672,818
36,904,878
73,014,552
1,182,466
18,291,481
112,332,714
95,287,781
95,287,781
1,723,078,613
2013
10,081,231
74,591,150
482,114,428
803,686,293
41,355,065
73,020,604
1,183,773
20,431,912
109,665,815
93,899,062
93,899,062
1,803,928,395
2014
10,240,148
74,592,913
482,114,428
837,694,800
52,112,348
73,018,695
1,183,251
20,866,842
116,790,442
113,565,682
113,565,682
1,895,745,231
2015
10,379,941
75,700,006
519,943,107
883,333,788
53,576,135
73,003,848
23,587,509
120,007,126
116,779,587
116,779,587
1,993,090,634
2016
10,487,319
85,094,113
626,660,985
921,288,805
55,134,677
72,015,418
26,636,830
123,025,026
119,904,362
119,904,362
2,160,151,897
2017
10,657,115
85,155,041
649,375,369
954,266,653
55,133,687
72,010,667
27,439,155
126,375,001
123,505,903
106,640,644
2,210,559,235
2018
10,859,759
85,330,454
707,011,071
1,552,188,670
57,041,494
72,012,219
28,961,832
129,764,539
127,502,843
110,339,112
2,881,011,993
2019
11,016,216
59,625,680
736,756,333
1,587,836,640
58,405,697
74,161,765
33,104,461
133,159,796
131,551,555
114,223,905
2,939,842,048
Source: King County Assessors Office and King County Department olFi-,
^The Ci of Federal Wa s Direct Aate has ovl o vent which is the ex se let
Page129
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2019
2010
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
KW Club Palisades LLC
Real Estate Management
105,703,000
1
0.880/0
Prime Catalina Campus Dr (formerly
Alliance Tax Advisors)
Real Estate Management
102,041,000
2
0.85%
Prime Woodley Campus Drive
Real Estate Management
99,325,000
3
0.82%
Avanath Federal Way LLC
Real Estate Management
78,629,000
4
0.65%
PRCP-Arcadia LLC (formerly Campus
Drive Fee Owner LLC)
Real Estate Management
75,941,800
5
0.63%
Federal Way Campus LLC (formerly part
Real Estate Management
72,676,700
6
0.60%
CA Reservice Owner LLC
Real Estate Management
71,284,000
7
0.59%
Harsch Investment Properties
Retailer
70,692,700
8
0.59%
53,641,100
2
0.65%
Puget Sound Energy-Elec/Gas
Electric\Gas
68,276,683
9
0.57%
50,769,162
4
0.62%
IRGRA (formerly art of We erhauser)
Real Estate Management
67,113,800
10
0.56%
MGP XI Commons FW LLC (formerly
Retailer
65,244,700
11
0.54%
52,364,199
3
0.64%
Greystone Meadows Apts.
Real Estate Management
62,988,000
12
0.52%
RHB Miro Owner LLC
Real Estate Management
57,604,000
13
0.48%
BMF IV WA Retreast Maple Hill
Real Estate Management
54,998,000
14
0.46%
KNL Vision WA LLC
Real Estate Management
51,998,000
15
0.43%
22,709,000
8
0.28%
Federal Way Crossings Owner ( formerly
Shopping Center
50,075,800
16
0.41%
0.00%
Cove Apartments LLC
Real Estate Management
47,323,000
17
0.39%
24,325,000
7
0.30%
Thrive Communities LLC
Real Estate Management
44,563,000
18
0.37%
Shores at Federal Way LLC
Real Estate Management
39,371,000
19
0.33%
Wal-Mart
Retailer
38,209,671
20
0.32%
Mercury Commons Fee Owner
Real Estate Management
37,142,000
21
0.31%
Weyerhaeuser
Real Estate Investment Trust
131,944,771
1
1.61%
LBA Realty
Real Estate Management
36,271,700
5
0.44%
Qwest Corporation
Telecommunications
27,805,254
6
0.34%
Fred Meyer
Retail/Wholesaler
21,093,737
9
0.26%
Virginia Mason Clinic
Medical Services
19,352,577
10
0.24%
Costco
Retail / Wholesaler
14,752,357
11
0.18%
IA Orchard Hotels Federal Way (formerly
Apple Hospitality Five Inc.)
Real Estate Management
13,520,200
12
0.16%
Campus Business Parks LLC
Real Estate Management
13,209,500
13
0.16%
ANS LLC
Real Estate Management
12,236,600
14
0.15%
$1 361 200 854 11.27% $ 493,9959157 6.02%
Source: King County Assessor's Office.
A 2019 and 2010 assessed valuation for the City of federal Way was $12,075,455,354 and $8,206,354,959, respectively.
Page130
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Fiscal
Year
Taxes Levied
for the
Fiscal Year
Collected within the
Fiscal Year of the Levy
Collections
in Subsequent
Years
Total Collections to Date
Total
Outstanding
Delinquent
Taxes
Ratio of
Delinquent
Taxes to
Total Tax Lev
Current Tax
Amount
Percentage
of Levy
Total Tax
Amount
Percentage
of Levy
2010
9,680,047
9,433,214
97.5%
139,340
9,572,554
98.9%
107,493
1.1%
2011
9,755,022
9,506,527
97.5%
186,036
9,692,563
99.4%
62,459
0.6%
2012
9,919,406
9,739,696
98.2%
(0)
9,739,696
98.2%
179,710
1.8%
2013
10,081,231
9,848,925
97.7%
37,272
10,029,029
99.5%
195,033
1.9%
2014
10,240,148
10,035,433
98.0%
56,371
10,091,805
98.6%
148,343
1.4%
2015
10,379,941
10,188,421
98.2%
39,138
10,227,559
98.5%
152,382
1.5%
2016
10,487,319
10,254,720
97.8%
72,477
10,327,198
98.5%
160,121
1.5%
2017
10,657,115
10,433,533
97.9%
22,380
10,455,913
98.1%
201,202
1.9%
2018
10,859,759
10,651,535
98.1%
9,171
10,660,706
98.2%
199,053
1.8%
2019
11,016,216
10,749,642
97.6%
104,877
10,854,519
98.5%
161,697
1.5%
Source: Data has been derived from the "Annual Tax Receivable Summary" prepared by the King County Finance.
Note: These figures include tax adjustments such as omits, refunds, and senior citizen exempted property.
Page 131
RATIO OF OUTSTANDING DEBT BY TYPE
For the Last Ten Fiscal Years
Fiscal
Year
Governmental
Activities
Business Type Activities
Total Primary
Government
% of Personal
Income (b)
Per Capita (b)
General Obligation
Bonds
Certificates of
Participation
Public Works
Trust Fund Loan
2010
28,683,950
-
1,210,035
29,893,985
0.091%
337
2011
28,157,950
-
1,027,676
29,185,626
0.091%
327
2012
27,616,950
-
845,317
28,462,267
0.093%
318
2013
27,016,400
-
662,958
27,679,358
0.097%
309
2014
34,703,360
-
480,600
35,183,960
0.058%
390
2015
33,656,660
-
384,481
34,041,141
0.080%
375
2016
35,725,560
-
288,361
36,013,921
0.076%
384
2017
32,573,400
-
192,241
32,765,641
0.088%
340
2018
31,498,600
-
96,120
31,594,720
0.096%
327
2019
33,525,553
-
-
33,525,553
0.094%
343
Source: City of Federal Way Finance Division
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
See Demographic Statistics schedule for personal income and population data. These ratios are calculated using
personal income for the prior calendar year.
(b) Per capita income information for Federal Way based on US Census Bureau - Quickfacts.
Page132
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE
AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
For the Last Ten Fiscal Years
Ratio of Net
(B)
(C)
Bonded Debt
Net Bonded
Fiscal
(A)
Assessed
Gross
Less Restricted
Net
To Assessed
Debt Per
Year
Population
Value
Bonded Debt
for Debt
Bonded Debt
Value
Capita
2010
88,760
8,206,354,959
29,893,985
3,379,427
26,514,558
0.0032
298.72
2011
89,370
7,659,569,844
29,185,626
3,866,184
25,319,442
0.0033
283.31
2012
89,460
7,142,831,976
28,462,267
4,182,345
24,279,922
0.0034
271.41
2013
89,718
7,386,015,527
27,679,358
5,248,336
22,431,022
0.0030
250.02
2014
90,147
8,375,702,226
35,183,960
2,136,390
33,047,570
0.0039
366.60
2015
90,764
8,905,294,058
34,041,141
2,283,702
31,757,439
0.0036
349.89
2016
93,670
9,489,437,470
36,013,921
2,508,514
33,505,407
0.0035
357.70
2017
96,350
10,298,806,059
32,765,641
3,492,598
29,273,043
0.0028
303.82
2018
96,690
11,393,138,728
31,594,720
2,335,532
29,259,188
0.0026
302.61
2019
97,840
12,075,445,354
33,525,553
3,698,800
29,826,753
0.0025
304.85
(A) Sources: State of Washington Office of Financial Management Population Estimates.
(B) The final certified Regular Levy assessed valuation of all taxable property by the King County
Assessor's Office for use in calculating levy rates for the following year's tax roll. The total
assessed valuation of $12,075,445,354 has been reduced by non-taxable of $103,036,110
to arrive at taxable assessed valuation of $11,972,409,244.
(C) Includes general obligation debt issued in 2013, 2017, and 2019.
Source: City of Federal Way Finance
Page133
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2019
(A) (B)
Gross General Percentage Amount
Obligation Debt Applicable to Applicable to
Jurisdiction Outstanding Federal Way Federal Way
King County
$ 648,179,000
1.88%
$ 12,182,359
Port of Seattle
335,470,000
1.88%
6,305,073
Federal Way School District #210
443,295,000
68.28%
302,670,570
Fire District # 39
31,360,000
60.25%
18,895,382
Library
68,420,000
3.16%
2,164,650
Total Overlapping Debt
1,526,724,000
342,218,035
CITY OF FEDERAL WAY
33,525,553
(C)
100.00%
33,525,553
Total Direct and Overlapping Debt $ 1,560,249,553 $ 375 743 588
(A) Total general obligation bonds outstanding at the year end, exclusive of available cash in debt service funds,
proprietary -type debt, credit enhancement and hotel/motel debt. Source: King County Financial Management.
(B) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to
valuation of property subject to taxation in reporting unit. Source: King County Assessor's Office
(C) Includes general obligation debt issued in 2013, 2017, and 2019.
Source: City of Federal Way Finance
Page134
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2019
DESCRIPTION
General Debt Capacity
Excess Levy
Open Space
and Park
Excess Levy
Utility
Purposes
Total Debt
Capacity
(Limited)
Councilmanic
(Unlimited)
Excess Levy
Statutory debt limit:
2019 TAV=$11,972,409,244 A
1.50%AV @ 100%
$ 179,586,139
$ (179,586,139)
$ -
$ -
$ -
2.50% AV @ 100%
-
299,310,231
299,310,231
299,310,231
897,930,693
Add:
Cash reserved for
debt redemption (B)
3,698,800
-
-
-
3,698,800
Less:
Bonds and COPS outstanding
33,525,553
-
-
-
33,525,553
Remaining Debt Capacity $ 149,759,386 $ 119,724,092 $ 299,310,231 $ 299,310,231 $ 868,103,940
Total Remaining
"General" Capacity
$269,483,478
(A) This figure represents the City's final total taxable assessed valuation (TAV) for 2019 which was used to determine
the 2020 property tax levy.
(B) Reflects debt service fund balance as of 12/31/2019.
Fiscal Year
Debt limit
Total net debt
applicable
to limit
Legal debt
margin
Total net debt
applicable to
the limit as a
% of debt limit
2010
615,476,622
(22,291,874)
593,184,748
3.62%
2011
579,223,785
(20,964,944)
558,258,841
3.62%
2012
535,712,398
(25,612,462)
510,099,936
4.78%
2013
550,022,093
(25,064,092)
524,958,001
4.56%
2014
623,929,441
(32,566,971)
591,362,470
5.22%
2015
663,674,591
(31,372,958)
632,301,633
4.73%
2016
706,516,822
(33,217,046)
673,299,776
4.70%
2017
767,010,483
(29,080,802)
737,929,681
3.79%
2018
848,706,079
(29,163,068)
819,543,011
3.44%
2019
897,930,693
(29,826,753)
868,103,940
3.32%
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.
Page135
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION
BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES NET OF DEBT SERVICE EXPENSE
Total General Ratio of Debt Service
Fiscal Total Debt Governmental to General Governmental
Year Principal Interest * Service Expenditures Expenditures
2010
525,000
629,419
1,154,419
50,093,838
2.3%
2011
526,000
622,903
1,148,903
49,482,421
2.3%
2012
480,760
1,114,827
1,595,587
47,879,445
3.3%
2013
1,050,430
1,413,862
2,464,292
57,934,989
4.3%
2014
995,300
985,475
1,980,775
48,877,840
4.1%
2015
771,120
495,359
1,266,479
48,845,021
2.6%
2016
566,120
475,073
1,041,193
52,159,793
2.0%
2017
8,950,080
491,866
9,441,946
62,791,020
15.0%
2018
755,120
510,355
1,265,475
57,745,591
2.2%
2019
13,137,967
875,332
14,013,298
70,531,852
19.9%
Source: City of Federal Way Finance
Note: * Interest excludes bond issuance and debt registration costs.
Page136
DEMOGRAPHIC STATISTICS
Fiscal
Personal Income Per Capita Median
Education Level in Years
School
Unemployment
Year
Population Sea-Tac-Bel [D] Income [C] Age [C]
of Formal Schooling Enrollment (A)
Rate (B)
2010
88,760
176,084,963,000
27,307
35.1
13.0
21,630
9.7%
2011
89,370
178,306,642,000
26,668
35.2
13.0
21,608
8.9%
2012
89,460
189,431,079,000
26,514
34.9
13.0
20,665
8.1%
2013
89,718
199,243,414,000
26,740
34.9
13.0
21,554
7.4%
2014
90,147
213,700,152,000
20,481
35.1
13.0
21,772
6.2%
2015
90,764
227,827,122,000
27,145
35.7
13.0
21,979
5.3%
2016
93,670
245,230,664,000
27,483
35.7
13.0
21,673
4.9%
2017
96,350
267,653,500,000
28,947
35.9
13.0
22,522
4.4%
2018
96,690
293,954,143,000
30,288
36.9
13.0
22,309
4.1%
2019
97,840
N/A
31,438
35.9
13.0
23,318
4.0%
(A)
Includes public school enrollment. Kindergarten is included though not State mandated.
(B)
Unemployment rates came from the US Department of Labor, Bureau of Labor Statistics.
(C)
Per Capital Income for Federal Way came from U.S. Census Bureau - Quickfacts.
(D)
Personal income information is for Seattle -Tacoma -Bellevue area provided by the Bureau of Economic Analysis, information
for 2019 not available. 2019 data for Personal Income to be published fall of 2020.
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.
Page137
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2019
2010
Number of
Employees
Rank
% of Total City
Em to went
Number of
Em to ees
Rank
% of Total City
Employment
Federal Way Public Schools
Educational Services
2,229
1
7.88%
1,936
1
6.72%
St Francis Hospital
Medical Services
1,014
2
3.59%
1,050
3
3.64%
World Vision Inc
Christian Relief Agency -Nonprofit
853
3
3.02%
852
4
2.96%
US Postal Service - Bulk Mail
Postal Service
654
4
2.31%
593
7
2.06%
Western WA Corp of Seventh Day Ad
Non -Profit Church Organization
500
5
1.77%
-
-
0.00%
City Of Federal Way
Government Services
489
6
1.73%
476
8
1.65%
Total Renal Care Inc. aka Davila
Health Services
470
7
1.66%
-
-
0.00%
Wal-Mart
Retail
456
8
1.61%
569
9/14
1.98%
Fred Meyer
Retail
342
9
1.21%
208
13
0.72%
Costco Wholesale Corporation
Wholesale
292
10
1.03%
210
11
0.73%
Res Care Home Care
Health Services
247
11
0.87%
208
12
0.72%
Franciscan Medical Group
Medical Services
245
12
0.87%
-
-
0.00%
Virginia Mason Federal Way
Medical Services
235
13
0.83%
235
10
0.82%
Community Integrated Services
Health Services
225
14
0.80%
-
-
0.00%
Korean Women's Assoc
Professional Services
210
15
0.74%
-
-
0.00%
Target Store
Retail
178
15
0.62%
Weyerhauser Company
Lumber Products
1,698
2
5.89%
LifeBridge Inc
Business Services
760
5
2.64%
Wild Waves Theme Park
Amusement Center
632
6
2.19%
Source: (1) City of Federal Way Business License. City of Federal Way Business Licensing was outsourced to State of Washington DOR, effective October 2019.
Note: Principal Employers - includes both full-time and part-time employees.
Page138
PROPERTY VALUE AND CONSTRUCTION
Commercial Construction (A)
Residential Construction (A)
Multi -Family Construction (A)
Year
Permits
Value
(In Thousands)
Permits
Value
(In Thousands)
Permits
Value
(In Thousands)
2010
149
31,043
321
19,676
75
2,686
2011
134
12,724
301
19,455
47
847
2012
160
27,989
346
29,115
92
974
2013
162
22,891
369
33,260
131
5,442
2014
220
35,923
359
30,923
53
61,511
2015
181
73,654
343
20,341
109
104,115
2016
172
18,547
292
19,804
80
18,667
2017
210
26,817
320
24,455
119
10,992
2018
158
54027
310
29612
45
2821
2019
133
157,502
304
27,267
129
34,940
Sources & Notes:
(A) Federal Way Community Development Department. Construction includes alterations.
Other building -related permits (demolition, plumbing, electrical, mechanical, signs, fire systems) numbering 2,927
and valued at $44,414,813 have been excluded.
Page139
CAPITAL ASSETS BY FUNCTION
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018
2019
Transportation
Street (Center Line Miles)
242.90
248.23
248.23
249.25
249.25
249.25
249.25
253.8
253.8
256.52
Signals WSDOT-owned and maintained
5
5
6
6
6
6
6
6
6
6
Signals City -owned & County -maintained
76
76
77
77
77
77
80
80
81
81
Street lights City -owned and maintained
1,509
1,554
1,618
1,705
1,728
1,728
1,785
1,857
1,857
2,098
Street lights City -owned and PSE-maintains
644
644
644
644
644
644
644
644
644
644
Street lights PSE-owned and maintained
1,975
1,975
1,975
1,975
1,978
1,980
1,983
1,986
1,986
2,067
Culture & Recreation
Developed Parks - Acreage
524.49
524.49
579.86
579.86
588.99
588.99
588.99
588.99
620.33
853.03
Developed Parks - # of Parks
32
32
29
29
30
30
32
32
34
34
Undeveloped Parks - Acreage
551.12
551.12
539.43
539.43
539.43
539.43
539.43
539.43
443.76
436.16
Undeveloped Parks - # of Parks
22
22
22
22
22
22
22
22
23
23
Tennis Courts City -Owned
11
11
9
9
9
9
9
9
9
9
Tennis Courts - Public
22
22
25
25
25
25
22
22
17
17
Swimming Pools City -Owned
1
1
2
2
2
2
2
2
2
2
Swimming Pools County -Owned
1
1
3
3
3
3
3
3
2
2
Trails - Miles
6
6
9
9
9
9
9
9
9
12
Trails -# of Trails
3
3
6
6
6
6
6
6
7
7
Community Centers/Recreation Facilities
1
1
1
1
2
2
3
3
3
3
Source: City of Federal Way Public Works and Parks Department
Page140
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
SECURITY OF PERSONS & PROPERTY
Offenses:
Forcible Rape (including attempts)
50
38
48
35
70
47
46
34 44
32
Robbery
152
119
107
107
135
152
191
169 234
156
Criminal Homicide
5
4
3
6
4
4
9
7 1
3
Aggravated Assault
118
99
150
133
148
178
209
226 173
175
Vehicle Theft
741
694
800
778
869
762
1,080
963 805
634
Burglary (commercial & residential)
828
752
931
801
816
635
645
664 672
563
Larceny
3,141
3,067
3,409
3,571
3,912
3,701
4,225
3,699 3,060
3,106
Arson
11
11
9
7
13
14
18
10 14
12
Citations:
Traffic
18,094
17,226
13,023
17,558
13,705
15,466
10,602
10,579 7,619
8,186
Red Light Photo
25,691
15,340
13,455
24,454
24,750
29,812
33,626
38,434 35,781
25,175
ECONOMIC ENVIRONMENT
Building Related Permits & Values
Building Permits
545
482
598
662
632
633
544
649 580
391
Estimated Value (In Millions $)
$ 53
$ 33
$ 58
$ 62
$ 128
$ 198
$ 57
$ 62 $ 86
$ 227
Other Building Related Permits
2,423
2,385
2,960
3,827
3,722
3,868
3,429
3,425 3,464
2,927
Estimated Value (In Millions $)
$ 6
$ 6
$ 5
$ 6
$ 7
$ 8
$ 8
$ 10 $ 10
$ 44
Source: City of Federal Way Police Department and Community Development Department
Page 141
CITY GOVERNMENT EMPLOYEES FULL-TIME EQUIVALENT - HISTORY
Department 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Mayor's Office
7.63
5.00
3.00
3.50
6.00
8.00
12.34
14.34
7.34
7.34
Administration
3.13
4.00
3.00
3.00
5.00
6.00
6.34
6.34
6.34
6.34
Economic Development
1.50
-
-
0.50
1.00
1.00
1.00
1.00
1.00
1.00
Performing Arts & Event Center
-
-
-
1.00
5.00
7.00
-
-
Government Affairs
3.00
-
-
-
-
Human Services
-
1.00
-
-
-
-
-
-
-
-
City Council
4.50
4.50
3.85
4.15
4.15
4.20
4.20
4.20
4.20
4.20
Municipal Court
13.00
13.00
13.00
13.00
13.00
13.00
16.00
16.00
16.00
16.00
Human Resources/City Clerk
5.25
4.50
4.50
4.50
5.13
5.75
6.00
6.00
6.00
6.00
City Clerk
1.75
1.75
1.75
1.75
1.88
2.50
2.50
2.50
2.50
2.50
Human Resources
3.50
2.75
2.75
2.75
3.25
3.25
3.50
3.50
3.50
3.50
Finance
7.60
7.00
7.00
6.00
7.00
8.00
8.00
8.00
8.00
8.00
Administration
-
-
-
-
-
-
-
-
-
-
Finance
7.60
7.00
7.00
6.00
7.00
8.00
8.00
8.00
8.00
8.00
Information System
9.60
7.00
7.00
7.00
6.00
7.00
7.00
7.00
7.00
7.00
Law
12.00
11.00
11.00
12.00
12.00
12.50
12.50
12.50
13.00
13.00
Civil Legal Services
4.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
Criminal Prosecution Services
7.20
6.20
6.20
7.20
7.20
7.70
7.70
7.70
8.20
8.20
Community & Econ Development
28.90
19.00
21.65
21.85
26.25
26.70
26.70
26.70
26.70
27.50
Administration
5.00
3.50
3.50
3.50
3.90
3.90
3.90
3.90
3.90
3.90
Planning
7.00
6.00
6.00
6.00
7.00
7.00
6.00
6.00
6.00
6.80
Building
13.00
9.00
9.00
10.00
12.00
12.00
13.00
13.00
13.00
13.00
Human Services
3.00
-
2.65
2.35
3.35
3.80
3.80
3.80
3.80
3.80
Neighborhood Development
0.90
-
-
-
-
-
-
-
-
-
Economic Development
-
0.50
0.50
-
-
-
-
-
-
-
Police
161.00
135.00
132.00
145.00
146.00
160.00
160.00
160.00
160.00
163.00
Administration
3.00
3.00
3.00
3.00
3.00
3.00
2.00
2.00
2.00
2.00
Support Services
58.00
51.00
52.00
55.00
56.00
57.00
55.00
55.00
55.00
58.00
Field Operations
100.00
81.00
77.00
87.00
87.00
100.00
103.00
103.00
103.00
103.00
Parks, Rec. & Cultural Svcs.
39.75
36.45
36.45
35.45
35.90
34.80
37.46
37.46
38.96
38.46
Administration
1.35
1.35
1.35
1.35
1.80
1.80
1.80
1.80
1.80
1.80
Planning
-
-
-
-
-
Kenneth Jones Pool
-
-
-
-
-
General Recreation
4.80
5.50
5.50
5.50
5.50
5.50
5.83
5.83
5.83
5.83
Community Center
13.35
13.35
13.35
13.35
13.35
11.00
11.33
11.33
11.33
11.33
Dumas Bay Centre
2.75
2.75
2.75
2.75
2.75
3.00
3.00
3.00
3.00
3.00
Knutzen Family Theatre
-
-
-
-
-
-
-
-
-
-
Parks Maintenance
17.00
13.00
13.00
12.50
12.50
13.50
15.50
15.50
16.00
15.50
Performing Arts & Event Center
-
-
-
-
-
-
-
-
1.00
1.00
Building
0.50
0.50
0.50
-
-
-
-
-
-
-
Public Works
41.95
38.95
38.95
39.95
38.95
44.00
43.00
44.00
45.00
49.50
Administration
2.35
2.25
2.20
2.25
2.25
2.75
2.75
2.75
2.75
3.61
Development Services
4.45
4.20
4.20
3.70
3.70
2.20
2.20
2.20
2.20
1.85
Traffic Services
5.10
2.35
2.35
3.85
3.85
4.35
4.35
4.35
5.35
5.28
Street Services
10.50
10.60
10.60
10.60
10.60
11.60
11.60
11.60
11.60
15.10
Emergency Management
1.00
1.00
1.00
1.00
-
-
-
-
-
-
Solid Waste & Recycling
1.70
1.70
1.70
1.70
1.70
2.20
2.20
2.20
2.20
2.41
Surface Water Management
16.35
16.35
16.40
16.35
16.35
20.40
19.40
20.40
20.40
20.75
Fleet & Equipment
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
Total 331.18 281.40 278.40 292.40 300.38 323.95 333.20 336.20
332.20
340.00
Source: City of Federal Way Finance Division
*table does NOT include 1-time positions or frozen positions
Page142
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
DECEMBER 31, 2019
EXECUTIVE BRANCH
POSITION EMPLOYEE ANNUAL SALARY
MAYOR
JIM FERRELL
$137,621
FINANCE DIRECTOR
ADE ARIWOOLA
$153,900
CITY ATTORNEY
RYAN CALL
$146,448
CITY CLERK
STEPHANIE COURTNEY
$100,092
ECONOMIC DEVELOPMENT DIRECTOR
TIM JOHNSON
$147,132
PARKS DIRECTOR
JOHN HUTTON
$142,932
COMMUNITY DEVELOPMENT DIRECTOR
BRIAN DAVIS
$153,012
PUBLIC WORKS DIRECTOR
EJ WALSH IV
$151,836
POLICE CHIEF
ANDY HWANG
$172,644
LEGISLATIVE BRANCH
POSITION EMPLOYEE ANNUAL SALARY
DEPUTY MAYOR
SUSAN HONDA
$14,500
COUNCIL MEMBERS
LYDIA ASSEFA-DAWSON
$14,500
MARK KOPPANG
$14,500
JESSE JOHNSON
$14,500
HOANG V TRAN
$14,500
MARTIN MOORE
$14,500
DINI DUCLOS
$14,500
JUDICIAL BRANCH
POSITION EMPLOYEE ANNUAL SALARY
JUDGE
DAVID LARSON
$172,754
JUDGE
REBECCA ROBERTSON
$172,754
Source: City of Federal Way Finance Department
NOTE: In accordance with Ordinance 90-016, individual fidelity coverage of not less than $50,000 exists for the
Mayor, Finance Director, City Clerk, Police Chief, and Judge.
Page143
MISCELLANEOUS STATISTICAL INFORMATION
LOCAL TAXES ON BUSINESSES
Franchise Tax - Cable TV ........................... 5.00%
Utility Tax - (6% + 1.75% Prop 1).................
7.75%
Admission Tax ........................................
5.00%
Gambling Taxes:
Bingo/Raffles...................................
5.00%
Amusement/Games ............................
2.00 %
Punchboard/Pull Tabs ..........................
3.00%
Cardrooms.......................................
10.00 %
Local Sales Tax (Collected by the State)..........
10.00%
FIRE AND EMERGENCY MEDICAL RESPONSE INFORMATION
Fire and Emergency Medical Response information reflects the greater Federal Way area, which is served by South King Fire & Rescue.
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Fire and Other Responses
1,147
1,041
934
1,363
968
999
1,148
1,019
3,213 1,253
4,278
Emergency Medical
11,077
11,460
11,914
12,571
12,950
13,847
14,193
16,144
17,109 15,968
16,422
PUBLIC EDUCATION
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
23
Elementary Schools
9,594
9,560
9,673
9,229
9,777
10,054
10,253
10,498
10,493 10,241
10,576
6
Middle Schools (Public Academy, TAF)
5,203
5,235
5,205
5,041
5,050
5,034
5,209
5,183
5,238 5,217
4,485
4
High Schools
6,637
6,547
6,409
6,018
6,341
6,299
6,166
5,582
6,382 6,389
6,342
4
Alternative\Int. Academy, Open Doors
266
288
321
377
386
385
351
412
409 462
1,915
Total 21,700 219630 21,608 209665 21554 21,772 21,979 21,673
22,522 22,309
23,318
3,820 Staff members
TAXABLE SALES (in millions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Retail Sales
$1,257
$1,261
$1,277
$1,239
$1,355
$1,432
$1,564
$1,673
$1,671 $1,733
$1,888
Real Estate Sales
$208
$238
$315
$303
$399
$418
$599
$1062
$819 $841
$1,044
Source: South King County Fire and Rescue
Federal Way Public School
WA Office of Superintendent of Public Instruction
City of Federal Way Finance Division
Page144
PRINCIPAL TAXPAYERS -SALES TAXES
Current Year and Nine Years A c
2019
2010
Sales Tax
% of Total City
Sales Tax
Sales Taxes
% of Total City Sales
Received
Sector
Location
Rank
Received
Received
Sector
Location
Rank
Taxes Received
$ 779,877
General Merchandise Stores
S 348th
1
4.90%
$ 758,761
General Merchandise Stores -
S 312th & S 316th
1
7.09%
Grocery & Other
General Merchandise Stores -
725,912
General Merchandise Stores
S 312th & S 316th
2
4.56%
560,080
Wholesale Grocery & Other
S 348th St
2
5.23%
490,209
Building Material and Garden
275,475
Building Material & Garden
2.57%
Equipment and Supplie
S 348th
3
3.08 %
Equipment & Supplies
S 348th St
3
General Merchandise Stores -
293,857
Motor Vehicle and Parts Dealers
S 348th
4
1.85%
268,770
Clothing, Household, & Other
Commons
4
2.51%
291,526
General Merchandise Stores
Other
5
1.83%
268,471
Electronics and Appliance Stores
Pavillion
5
2.51%
273,775
General Merchandise Stores
Commons
6
1.72%
264,738
General
O[h� Merchandise Stores - Grocery
Twin Lakes
6
2.47%
246,681
Miscellaneous Store Retailers
Other
7
1.55%
175,071
Building Material & Garden
S 348th St
7
1.63%
Equipment & Supplies
236,633
But' dmg Material and Garden
S 348th
8
1.49%
147,064
Motor Vehicle and Parts Dealers
S 348th St
8
1.37%
E ui ment and Su lie
215,669
Electronics and Appliance Stores
Pavilhon
9
1.36%
140,244
General Merchandise Stores - Tools,
Commons
9
1.31%
Equipment, Clothing & Other
171,036
Administration of Economic
Other
10
1.08%
121,180
Hospitals
Others
10
L13%
3,725,175
23,42%
2,979,854
2. °
Source: Washington State Department of Revenut
Note: It is illegal to disclose specific taxpayer sales tax information. The above information is being provided without identification
The City received $15.9M in sales and use tax in 2019, and $10.71M in 2010.