2020 Annual Comprehensive Financial Report (20-001),41k
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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 3081 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 i§i�
Federal Way
ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Year Ended December 31, 2020
City of Federal Way
33325 8th Avenue South
Federal Way, Washington 98003
(253) 835-2520
www.cityoffederalwa.
Prepared by the Finance Department
Finance Director
Ade' Ariwoola, MBA, CGFM
ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Year Ended December 31, 2020
Table of Contents
Page
INTRODUCTORY SECTION
Letterof Transmittal........................................................................................................................... 1
City Officials and Administrative Officers....................................................................................... 5
City Functional Organization Chart .................................................................................................... 7
GFOA Certificate of Achievement..................................................................................................... 8
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
Affordable & Supportive Housing Sales & Use Tax Fund ......................................
95
Solid Waste & Recycling Fund................................................................................
96
Special Contracts/Studies Fund...............................................................................
97
Hotel/Motel Lodging Tax Fund...............................................................................
98
Federal Way Community Center Fund....................................................................
99
TrafficSafety Fund..................................................................................................
100
Community Development Block Grant Fund..........................................................
101
Paths& Trails Fund.................................................................................................
102
TechnologyFund.....................................................................................................
103
Individual Fund Statements and Schedules — Debt Service Fund:
FundDescription........................................................................................................................ 105
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ...... 106
Combining and Individual Fund Statements and Schedules — Internal Service Funds:
FundDescription.................................................................................................................... 107
Combining Statement of Net Position..................................................................................... 108
Combining Statement of Revenues, Expenses and Changes in Fund Net Position ................. 110
Combining Statement of Cash Flows..................................................................................... 112
Supplemental Information:
Schedule of State Financial Assistance.................................................................................. 116
Schedule of Expenditures of Federal Awards........................................................................ 117
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source.........................................................................................
120
Schedule by Function and Activity ........................................................................................
121
STATISTICAL SECTION
NetPosition by Component............................................................................................................
124
Changesin Net Position..................................................................................................................
125
Government -wide Revenues by Source and Expenses by Function ...............................................
126
Fund Balances of Governmental Funds..........................................................................................
127
Changes in Fund Balances of Governmental Funds.......................................................................
128
Assessed and Estimated Actual Value of Taxable Property ...........................................................
129
Property Tax Rates and Levies, Direct and Overlapping Governments .........................................
130
PrincipalTaxpayers........................................................................................................................
131
Property Tax Levies and Collections..............................................................................................
132
Ratio of Outstanding Debt by Type................................................................................................
133
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita .....................................................
134
Computation of Direct and Overlapping Debt................................................................................
135
Computation of Limitation of Indebtedness....................................................................................
136
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures Net of Debt Service Expense ................
137
DemographicStatistics...................................................................................................................
138
PrincipalEmployers.......................................................................................................................
139
Property Value and Construction...................................................................................................
140
CapitalAssets by Function.............................................................................................................
141
Operating Indicators by Function...................................................................................................
142
City Government Employees Full -Time Equivalent - History .......................................................
143
Salaries and Surety Bonds of Principal Officials............................................................................
144
Miscellaneous Statistical Information............................................................................................
145
Principal Taxpayers — Sales Taxes.................................................................................................
146
11
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Page 1
CITY OF
Federal Way
June 29, 2021
People of the City of Federal Way
Honorable Mayor and City Council
I am pleased to submit to you the 2020 Annual Financial Report (AFR) of the City of Federal Way, Washington. This report is
published annually as the official annual financial report and complies with state law (RCW43.09.230) 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 ten 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) Community Development; (10) and Information Technology. 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. Although the economic condition is still holding steady in the
City of Federal Way due to the economic stability of retail, grocery, and construction material businesses in Federal Way, it is
still unknown the impact that the Covid-19 impact could have on the city.
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Nationally, according to Bureau of Labor Statistics, the CPI rose 1.4 percent in 2020, the lowest since 2016. It was less than the
1.7 percent average annual increase over the past 10 years.
The food index increased 3.9 percent in 2020, a larger increase than the 2019 rise of 1.8 percent. The index for food at home also
increased 3.9 percent in 2020, a larger increase than the 0.7 percent increase reported for 2019. All six major grocery store food
group indexes rose in 2020. The index for meats, poultry, fish, and eggs rose 4.6 percent in 2020 after rising 2.3 percent in 2019.
Similarly, the dairy and related products index increased 4.4 percent in 2020 after increasing 2.4 percent in 2019. The index for
nonalcoholic beverages also increased by 4.4 percent in 2020, while the index for other food at home rose 3.9 percent over the
year. The cereals and bakery products and the fruits and vegetables indexes both increased 3.2 percent in 2020. The index for
food away from home rose 3.9 percent in 2020, a somewhat larger increase than the 3.1 percent increase in 2019 and the largest
December -to -December rise since 2008.
The energy index decreased 7.0 percent in 2020 after increasing 3.4 percent in 2019. The index for gasoline fell 15.2 percent in
2020 after rising 7.9 percent the previous year. The index for fuel oil fell 20.0 percent in 2020, after rising 4.6 percent in 2019.
These declines more than offset increases in the other energy component indexes. The index for natural gas rose 4.1 percent in
2020 after falling 3.5 percent in 2019, while the index for electricity increased 2.2 percent over the year after declining 0.4 percent
in the previous year. The medical care index increased 1.8 percent in 2020, a smaller increase than the 4.6-percent increase
reported for 2019. The index for prescription drugs, in contrast, fell 2.4 percent in 2020 after rising 3.0 percent in 2019.
The Seattle -Tacoma -Bellevue, WA's CPI for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.6% in December
2020 compared to increase of 2.0% in December 2019. The national CPI-W increased 1.4% for 2020. The Seattle -Tacoma -
Bellevue, WA annual unemployment rate for 2020 was 8.1% compared to 3.2% in 2019. This is primarily due to the Covid-19
pandemic. 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.
The City is still assessing the impact of this pandemic. 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 98,340 people after
City of Renton with 105,500 and closely followed by Spokane Valley at 97,490 then Yakima at 95,490. In 2020, King
County median household income was $94,974; Federal Way $67,347, Renton $77,739, Spokane Valley $51,961, and Yakima
$44,950. 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 18, 99 and 509.
In 2020, there were 37,356 housing units in Federal Way, a slight increase over 2019 of 37,257 housing units. Of these units,
54% or 20,348 were single family homes, 42% or 15,678 were multi -family units, and 4% or 1,330 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 fifteen employers report
8,110 employees in 2020.
Sales tax collected in 2020 total $16.1 million which was equivalent to 2019. 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,
Page 3
Lowe's Home Improvement Center, and Home Depot. The second is The Commons; a regional mall including Target, TJ Maxx,
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 19%; construction 18%; information 4%; wholesale trade 4%, manufacturing 1%, and other
4%.
In 2020, the total assessed value of property in Federal Way was $12.7 billion, which was approximately 5.6% higher than the
2019 assessed valuation of $12.1 billion.
Real Estate sales were $895 million in 2020, a decrease of 14%, compared to $1,043 million in 2019. A total of 516 building
permits in 2020 compared to 566 in 2019, and 2,522 other building related permits compared to 2,927 that were issued in 2019.
Estimated market value for permits in 2020 was $70 million and $271 million in 2019. Significant building permits include:
DaVita Healthcare office park, King County Aquatic Center improvements, Woodbridge Building A apartments, and Grocery at
the Commons.
Washington State Supreme Court decided in favor of the city's right to levy excise tax on provider of water/sewer utility services
within the city limit. This judgement allowed 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. In addition, the City passed an additional
10% utility tax on solid waste activities to be used on arterial street overlay of residential streets.
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 2020, the City of Federal Way completed construction of several hot -mix asphalt overlays totaling over $1.9M.
The city also received approximately $2.2 million in state and federal grant funding for transportation related capital projects in
2020. Projects that received these grant funds included Adaptive Traffic Control System Project, SR 509 SW 3121h Street to 2111
Project, SR 509 91h Pl. S. to I Ith Pl. S Pedestrian Improvement Project, Citywide Variable Lane Use Control Signal Project, SW
356t' Street Preservation Project, and 47t' Ave SW & SW Dash Point Rd. Compact Roundabout Project.
The city also managed approximately $5 million in Covid-19 grant funding supporting businesses, citizens, and the City during
the pandemic.
Completion of construction of Downtown Staircase Project connecting the Performing Arts &Event Center to the downtown city
center was completed in 2020.
Eyes on Federal Way, the city's new service request application was launched in December 2020 for citizens to be able to submit
any non -emergency request to the City. City Department's follow up on these requests on a daily basis.
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.
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 2020 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 2020; which is the 31st 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 annual financial report (AFR) for the year ended
December 31, 2019. The City of Federal Way has received a Certificate of Achievement for the last thirty years (fiscal years
ended 1990 — 2019). In order to be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized 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 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 Award
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, Deputy Finance
Director who served as the coordinator for the AFR 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
2020
CITY OFFICIALS
EXECUTIVE & LEGISLATIVE BODY
SUSAN HONDA
Council President
HOANG V. TRAN
Councilmember #4
JIM FERRELL
Mayor
LYDIA ASSEFA-DAWSON GREGORY A. BARUSO
Councilmember #1 Councilmember #2*
LEANDRA CRAFT
Councilmember #5**
MARTIN A. MOORE
Councilmember #6
LINDA KOCHMAR
Councilmember #7
Elected/
Position
Elected/Appointed*
Term
Appointed
Email
Phone
Mayor
Jim Ferrell
1/l/18-12/31/21
11/28/17
Jim.Ferrellp_cityoffederalway.com
(253) 835-2402
Position #1
Lydia Assefa-Dawson
1/l/20-12/31/23
11/26/19
Lydia.Assefa-Dawsonkcityoffederalway.com
(253) 835-2401
Position #2
Gregory A. Baruso
3/7/20-12/31/21
3/7/20
Greg.Baruso(ii)cityoffederalway.com
(253) 835-2401
Position #3
Susan Honda
1/l/20-12/31/23
11/26/19
Susan.Honda(a
cityoffederalwU.com
(253) 835-2401
Position #4
Hoang V. Tran
1/l/18-12/31/21
11/28/17
Hoang Tran&ityoffederalway.com
(253) 835-2401
Position #5
Leandra Craft
10/15/20-12/31/23***
10/15/2020
Leandra.Craft@cityoffederalway.com
(253) 835-2401
Position #6
Martin A. Moore
1/l/18-12/31/21
11/28/17
Martin.Moore(&cityoffederalwU.com
(253) 835-2401
Position #7
Linda Kochmar
1/1/20-12/31/23
11/26/19
Linda.Kochmar(a
cityoffederalwU.co
(253) 835-2401
*Councilmember Gregory Baruso was elected to fill appointed position #2 that was filled by Councilmember Jesse Johnson on 31712020.
**Councilmember Leandra Craft was appointed on 10115120 to fill unexpired term vacated on 07131120 by Councilmember Koppang.
* * * Councilmember position will be added to 2021 general election for unexpired "short-term" through 1213112023.
JUDICIAL BRANCH
Elected/
Office
Position
Employee
Appointed
Term
Date
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/l/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)
Information
City Attorney
City Clerk
Community Development
Director
Economic Development
Director
Finance Director
Human Resources Manager
IT Director
Parks Director
Police Chief
Ryan Call
3/9/2017 Ryan.Call@cityoffederalway.com
(253) 835-2572
Stephanie
10/7/2014 Stephanie.Courtney@cityoffederalway.com
Courtney
(253) 835-2540
Brian Davis
11/1/2016 Brian.Davis@cityoffederalway.com
(253) 835-2612
Tim Johnson
9/15/2014 Tim.Johnson@cityoffederalway.com
(253) 835-2412
Ade Ariwoola 4/1/2014
Jean Stanley
Thomas
Fichtner
John Hutton
Andy Hwang
Public Works Director EJ Walsh
1/1/2011
3/23/2020
7/23/2014
Ade.Ariwoola@cityoffederalway.com
(253) 835-2520
Jean. Stanley@cityoffederalway.com
(253)835-2532
Thomas.Fichtner@cityoffederalway.com
(253) 835-2547
John.Hutton@cityoffederalway.com
(253)835-6910
3/18/2014 Andy.Hwang@cityoffederalway.com
(253) 835-6716
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 I d City Council
* Misdemeanors & Gross Misdemeanors
* Traffic & Non -traffic Infractions
* Probation Services
* Civil Impounds
* Code Compliance
Community Development
* Land Use Management
--Permit process
* Building Permits & Inspection
* Code Compliance
* Health & Human Services
* Comm. Dev. Block Grnt
* Neighborhood Development
* Passport Services
Economic Development
* Business Recruitment
MAYOR'S OFFICE
* Administer City-wide Operations and Budget
* Coordinate Regional Affairs
* Emergency Management
*Human Resources
*City Clerk
Finance
* Payroll
* Accounts Payable
* Purchasing
* Accounts Receivable
* Business License
* General Accounting
* Budget
* Banking and Investments
* Monthly Financial Report
* Audit Coordination
* Internal Controls
* Financial Planning/Analysis
Law
* Civil Legal Services
and Litigation
* Legislative Support
* Prosecution
* Provide Legal Counsel
* Draft Contracts
and Ordinances
* Negotiate Contracts
and Real Estate
Transactions
* Risk Management
Police
Crime Analysis/Prevention
Traffic Safety Educ. & Enfrc.
Investigation
Patrol
Community Safety and
Education Programs
Field Operation
Support Services
Animal Control Services
Civilian Operation
Parks, Recreation & Cultural Services
' Recr & Athletic Progs
° Park maint/operation
& Development
' Comm Events & Arts
* Public Facility Mgt
& Development
* Open Space Mgmt
' Performing Arts and Event Center
* Represents the People of FW
* Adopt Ordinances and Resolutions
* Grant Franchises
* Levy Taxes and Appropriate Funds
* Establish Policies & Guidelines
Public Works
Development Services
--Permitting
--Inspection
Maint., Operating, &
Development of
--Public Right -of -Way
--Traffic Systems
--Surface Water Mgmt.
Solid Waste/Recycling
Fleet Management
Information Technology
Recr & Athletic Progs
Park maint/operation
& Development
Comm Events & Arts
Public Facility Mgt
& Development
Open Space Mgmt
Performing Arts and Event Center
a 0 k
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, 2019
Executive Director/CEO
Office of the Washington State Auditor
Pat McCarthy
Mayor and City Council
City of Federal Way
Federal Way, Washington
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of basic, 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, 2020, 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
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
Page 10
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 basic, 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,
2020, and the respective changes in financial position and cash flows thereof, and the respective
budgetary comparison for the General, Street, Utility Tax, and Performing Arts and Events Center
Operations funds for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Matter of Emphasis
As discussed in Note 19 to the financial Statements, the full extent of the COVID-19 pandemic's direct
or indirect financial impact on the City is unknown. 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.
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 is not a required part of the basic
financial statements. Such information is the responsibility of management and was derived from and
Page 11
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.
The Introductory and Statistical Sections are presented for purposes of additional analysis and are not a
required part of the basic financial statements of the City. Such information has not been subjected to
the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not
express an opinion or provide any assurance on it.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we will also issue our report dated June 29, 2021,
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
June 29, 2021
Page 12
,41k
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, 2020. We encourage
readers to consider the information in conjunction with the preceding letter of transmittal, the financial statements and notes to
the financial statements that follow.
FINANCIAL HIGHLIGHTS
• The total assets plus deferred outflows of the City of Federal Way exceeded its liabilities plus deferred inflows at
December 31, 2020 by $585.9 million (Net Position). Capital Assets (net of depreciation and related debt) account for
88.2% of this amount with a value of $516.5 million. Of the remaining net position of $69.3 million, $49.4 million may be
used to meet the government's ongoing obligations to citizens and creditors, without legal restriction while the $19.9
million are restricted for specific use. (See page 27).
The City's total net position decreased by $2.4 million, or 0.4% below 2019 as referenced on page 28. Governmental
activities decreased by $5.6 million or 1.1% while business -type activities increased by $3.2 million or 4.7%. The
decrease of $5.6 million in governmental activities is primarily due to a $6.9 million prior period adjustment for SR99
HOV Lanes Phase V (see note 15), $2.9 million decrease in in community development and public works permits and
fees, offset by $3.6 million increase in utility tax primarily due to receiving $2.9 million in water and sewer utility tax due
to Supreme Court deciding in favor of the city on taxing water and sewer providers, and $0.8 million in solid waste utility
tax due to the addition of 10% utility tax on solid waste services for arterial street overlay of residential streets. In
addition, Valleycomm joint venture increased by $0.6 million. The increase of $3.2 million in business -type activities is
primarily due to an increase of $3.9 million in infrastructure additions from the completion of projects such as SRR HOV
Lanes Phase V and Millitary and 298' Compact Roundabout. This was offset by the addition of accumulated depreciation
of $0.7 million (See Note 8 on page 60). More detail is described in the analysis below.
• Net investment in capital assets decreased by $9.7 million (See page 16), but unrestricted net position increased by $6.3
million respectively compared to 2019 as referenced on page 16.
• Restricted Net Position of $19.96 million increased by $1.0 million or 5.5% primarily due to increased real estate excise
tax in arterial street overlay and 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 decreased by $1.7 million or 4.1% due to the long term debt decrease of $1.7 million for payment of
General obligation debt (see note 11 on page 71).
• Governmental fund balances at year-end were $47.6 million, a $3.1 million or 7% increase from the prior year. Of the
$47.6 million, $16.4 million or 34.4% of the governmental fund balance is unassigned and available to fund ongoing
activities. The remaining $31.2 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 $16.4 million, which increased by $0.5 million or 2.8%
from the prior year, primarily due to lower jail service expenditures, while maintaining adequate tax revenue.
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 six major governmental funds, the
general fund, street fund, utility tax fund, debt service fund, performing arts and event center operations fund, and
transportation 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 governmental funds are combined into a single column
Page 15
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 two fiduciary funds. 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.
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 4th.
The City is still assessing the impact of this pandemic. 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.
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 ofaccuxn. depreciation
Total assets
CONDENSED STATEMENT OF NET POSITION
As of December 31, 2020 and 2019
Governmental Activities Business -Type Activities Total
2020 2019 2020 2019 2020 2019
$ 87,285,012 $87,153,689 $ 7,043,648 $7,421,932 $ 94,328,660 $ 94,575,621
473,125,047 485,942,156 66,321,655 63,106,023 539,446,703 549,048,180
560,410,059 573,095,845 73,365,303 70,527,956 633,775,362 643,623,801
Deferred ouflows ofresources 3,627,563 2,790,503 185,088 172,610 3,812,651 2,963,113
Total deferred outflows ofresource 3,627,563 2,790,503 185,088 172,610 3,812,651 2,963,113
Long-term liabilities
Other liabilities
Total liabilities
40,894,330 42,582,328 719,186 754,671 41,613,516 43,336,999
6,270,861 7,719,810 599,628 725,376 6,870,489 8,445,186
47,165,191 50,302,138 1,318,814 1,480,047 48,484,005 51,782,185
Deferred inflows ofresources 3,057,237 6,129,025 183,557 376,412 3,240,794 6,505,437
Total deferred inflows ofresources 3,057,237 6,129,025 183,557 376,412 3,240,794 6,505,437
Net position:
Net investment in:
capital assets
Restricted
Unrestricted
Total net position
Analysis of Net Position
450,219,346 463,177,653
19,922,486 18,878,459
43,673,363 37,399,073
$ 513,815,194 $ 519,455,185
66,321,652
63,106,022
35,295
33,261
5,691,073
5,704,824
$ 72,048,020
$ 68,844,107
516,540,998 526,283,675
19,957,781 18,911,720
49,364,436 43,103,897
$ 585,863,214 $ 588,299,292
Total net position of the primary government of $585.9 million at December 31, 2020 decreased by $2.4 million or 0.4%
compared to December 31, 2019. The decrease is due to governmental type activities decrease of $5.6 million, offset by
business -type activities increase of $3.2 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, 88% or $516.5 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 $11.1 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, City Center Access Phase I, and SR509 9' PI South to 11' PI S Pedestrian
Improvements 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 $8.9 million are for: $0.30 million for police special funds, and court trust,
$0.03 million for steel lake and north lake management district, $0.82 million for peg and franchise fees for educational and
governmental access services, $1.45 million for lodging tax, $1.49 million for paths and trails, $1.06 million for arterial street
overlay, $0.14 million for affordable and supportive housing, $0.03 million for Community Development Block Grant, and
$3.57 million for debt service.
The unrestricted business -type activities portion of $5.7 million; $4.3 million can only be spent on surface water management
and the remaining $1.4 million on improvements to Dumas Bay Centre and Knutzen Family Theatre. Maintenance of catch
basins, pump stations, storm drain flushing, and other capital construction projects such as Cold Creek culvert rehab and
Outfall 256 erosion prevention 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.
Page 17
Other functions of the City may access the remaining $43.7 million in governmental activities unrestricted net position to meet
ongoing obligation to citizens and creditors. Examples of other City obligations which net position may be used for are public
safety, economic development, parks maintenance, ongoing street maintenance, and committed funds for capital projects.
At the end of the fiscal year, the City of Federal Way reported positive balances in all three categories of net position, for the
government as a whole, as well as for the separate governmental and business -type activities.
Governmental Activities:
Current and other assets increased by $0.1 million or 0.2% primarily due to $3.6 million increase in utility tax, $0.2 million
increase in sales tax, Valleycomm joint venture increase of $0.6 million, receivables increase of $0.8 million due to taxes
accrued but not yet received, offset by $0.7 million decrease in real estate excise tax, $2.9 million decrease in in community
development and public works permits and fees, and a net pension asset decrease of $1.5 million.
Capitals assets and CIP, net of accumulated depreciation decreased by $12.8 million or 2.6% primarily due to a prior period
reduction of $10.7 million (See Note 15 on page 77), depreciation of $9.7 million, offset by the net addition of assets in the
current year of $7.6 million (See Note 8 on page 60). The prior period adjustment is due to construction in progress of $3.78
million classified as governmental -type activity when it should have been business -type activity, and $6.91 million in
maintenance for SR99 HOV Lanes Phase V that was classified as construction in progress. The net addition of assets of $7.6
million is primarily due to construction in progress increase of $5.8 million for projects in ongoing construction including City
Center Access Ph I, SR509 9"' PI S to I I" PI S Pedestrian Improvements, Adaptive Traffic Control Systems, addition of $1.5
million for IT equipment and vehicle purchases, and donated infrastructure from private development projects of $0.3 million.
Deferred outflows of resources increased by $0.8 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 decreased by $1.7 million or 4.0% due to long term debt decrease of $1.7 million for General obligation
debt. (See Note 11 on page 71).
Other liabilities decreased by $1.4 million or 18.8% primarily due to 0.21 million of liabilities held for judgement being moved
to a fiduciary custodial fund, retainage payable decrease of $0.33 million from the completion of street capital projects, and
accounts payable decrease of $0.82 million primarily due to less street capital projects occurring within the city.
Deferred inflows of resources decreased by $3.1 million for governmental activities due to lower than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans (See page 16).
Net investments in capital assets decreased by $13.0 million or 2.8% primarily due to decrease of $12.8 million in capital
assets and CIP, net of accumulated depreciation explained in the above capital assets description (See page 16), and an increase
in other long-term liabilities for capital related debt.
Restricted net position represents amounts that must be used in accordance with external restrictions, and increased by $1.0
million or 5.5% from the prior year primarily due to real estate excise tax not being spent on overlay 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 increased by $6.3 million or 16.8% primarily due to $3.6 million increase in utility tax
from receiving $2.9 million in water and sewer utility tax due to Supreme Court deciding in favor of the city on taxing water
and sewer providers, and $0.8 million increase in solid waste utility tax due to the addition of 10% utility tax on solid waste
services for arterial street overlay of residential streets. The remaining $2.7 million is primarily due to the reduction in
liabilities described above.
Business -Type Activities:
Current and other assets decreased by $0.4 million or 5.1% primarily due to a decrease in cash and cash equivalents of $0.4
million from Dumas Bay Centre operations.
Capitals assets and CIP, net of accumulated depreciation increased by $3.2 million or 5.1 % primarily due an increase of $3.9
million in infrastructure additions from the completion of projects such as SRR HOV Lanes Phase V and Millitary and 2981
Compact Roundabout. 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 $0.01 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 $0.04 million due to current year GASB 68 adjustment to pension liability of $0.04 million.
(See page 71).
Other liabilities decreased by $0.13 million or 17.3% primarily due to a decrease in unearned revenue and vouchers for Dumas
Bay Centre rentals at the facility.
Deferred inflows of resources decreased by $0.19 million for business -type activities due to lower than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans (See page 16).
Net investments in capital assets increased $3.2 million or 5.1% primarily due to capital assets and CIP, net of accumulated
depreciation explained in the above capital assets description.
Unrestricted net position decreased by $0.01 million or 0.2% primarily due to the decreases in current and other assets
described above.
Page 19
CHANGES IN NET POSITION
For the Years Ended December 31, 2020 and 2019
Governmental Activities
Business -Type
Activities
Total
2020
2019
2020
2019
2020
2019
Revenues:
Programs revenues:
Charges for services
$ 13,623,255
$ 20,618,894
$ 4,572,984
$ 5,325,584
$ 18,196,239 $
25,944,478
Operating grants & contrib.
11,195,427
6,082,363
42,348
31,718
11,237,775
6,114,081
Capital grants & contrib.
2,994,083
6,201,345
122,032
144,577
3,116,115
6,345,922
General revenues:
Property taxes
11,449,581
11,095,263
-
-
11,449,581
11,095,263
Sales tax
16,099,037
16,051,779
-
-
16,099,037
16,051,779
Local criminal justice sales tax
2,799,244
3,056,010
-
-
2,799,244
3,056,010
Utility tax
14,672,457
11,102,083
-
-
14,672,457
11,102,083
Real estate excise tax
4,467,111
5,171,643
-
-
4,467,111
5,171,643
Other taxes
341,083
1,356,978
-
-
341,083
1,356,978
Other
1,767,417
2,867,900
54,138
192,598
1,821,555
3,060,498
Total Revenue
79,408,695
83,604,258
4,791,502
5,694,478
84,200,196
89,298,736
Expenses:
General government
8,094,395
4,620,477
-
-
8,094,395
4,620,477
Security of persons & property
34,792,577
38,010,778
-
-
34,792,577
38,010,778
Transportation
13,469,874
14,145,856
-
-
13,469,874
14,145,856
Physical environment
708,031
519,163
-
-
708,031
519,163
Economic environment
6,317,075
7,304,691
-
-
6,317,075
7,304,691
Health and human services
1,774,097
1,540,723
-
-
1,774,097
1,540,723
Culture and recreation
7,607,707
9,438,271
-
-
7,607,707
9,438,271
Interest on long-term debt
1,015,414
347,437
-
-
1,015,414
347,437
Surface Water Management
-
-
4,989,139
4,864,902
4,989,139
4,864,902
Dumas Bay Centre
-
-
565,369
880,135
565,369
880,135
Total Expenses
73,779,171
75,927,396
5,554,507
5,745,037
79,333,678
81,672,433
Change in net position before
5,629,524
7,676,862
(763,006)
(50,559)
4,866,518
7,626,303
transfers
Loss on investment in joint venture
-
(16,377,170)
-
-
(0)
-
Transfers
(183,453)
225,307
183,453
(225,307)
-
-
Change in net position
5,446,071
(8,475,001)
(579,553)
(275,866)
4,866,518
(8,750,867)
Netposition- beginning
519,455,185
529,732,483
68,844,107
68,145,705
588,299,292
597,878,188
Prior period adjustment Note 15
(10,690,600)
(1,802,297)
3,783,466
974,268
(6,907,134)
(828,029)
Effect of change in accounting
(395,462)
-
(395,462)
-
principle
-
-
Adjusted net position -beginning
508,369,123
527,930,186
72,627,573
69,119,973
580,996,696
597,050,159
Net position - ending
$ 513,815,194
$ 519,455,185
$ 72,048,020 $
68,844,107
$ 585,863,214
$ 588,299,292
Page 20
Analysis of the change in net position:
Total government -wide revenues of the primary government decreased by $5.1 million or 5.7% and total expenses decreased
by $2.3 million or 2.9% under the prior year. These changes are discussed in more detail below.
Governmental Activities:
Governmental activities contributed $5.4 million of the total change in net position of positive $4.9 million. The prior year
change in net position was negative $8.8 million. The increase over 2019 is due to the following revenues, and expenses
described below. There was a reduction of $10.69 million for prior period adjustment for capital assets described in note 15,
and $0.40 million effect of change in accounting principle described in note 18.
Total revenues for governmental activities decreased by $4.2 million or 5.0% due to charges for services decrease of $7.0
million comprised of $2.9 million decrease in in community development and public works permits and fees, $1.4 million
decrease in red light photo revenue, $0.9 million decrease in Federal Way Community Center (FWCC) fees, $0.8 million
decrease in parks and general recreation fees, $0.6 million decrease in Performing Arts & Event Center (PAEC) fees, $0.2
million decrease in court revenue, $0.2 million decrease in arterial street mitigation impact fee revenue; offset by taxes and
general revenue increase of $0.9 million comprised of increases in property tax of $0.4 million, and utility tax of $3.6 million,
and reductions in real estate excise tax of $0.7 million, admissions and other taxes of $1.0 million, local criminal justice sales
tax of $0.3 million, investment earnings of $0.6 million, and miscellaneous revenue for FWCC & PAEC of $0.5 million. In
addition grants & contributions increased by $1.9 million from received COVID-19 grants, offset by transportation capital
projects receiving less reimbursement from state and federal grants.
Total expenses for governmental activities decreased by $2.1 million or 2.8%. The net decrease is due to decreases in the
following expense categories: A $3.2 million decrease in "Security of persons & property" is due to a decrease in jail service
costs due to leaving SCORE and contracting with other jails. A $1.0 million decrease in "Economic Environment" is due to
less operational expenditures for the Performing Arts and Event Center due to COVID-19 closure of the facility. A $1.8
million decrease in "Culture and recreation" is due to $1.8 million decrease in Federal Way Community Center and recreation
operational expenditures due to COVID-19 closure of the facility. A $0.7 million decrease in "Transportation" due to $0.7
million decrease in asphalt overlay of streets, and street and traffic maintenance. The decrease is offset by a $0.2 million
increase in "Health and human services" is due to $0.2 million increase in COVID-19 Community Development Block Grant
programs. A $3.5 million increase in "General government" is primarily due to the grant funding spent on COVID-19 business
grants for Federal Way businesses. Interest on long-term debt increase of $0.7 million is primarily due to interest payments for
SCORE and Performing Arts and Event Center bonds.
There was no loss on investment in joint venture in the current year, because the city left SCORE in 2019, and is now
contracting with various agencies for jail services.
Governmental Activities - Expenses
Security o
persons 8
property, 47
Health and human
services, 2.4%
Culture and
recreation, 10.3%
Interest on long-
term debt, 1.4'%
3eneral
,mment,
11.0%
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 $0.6 million. There was an addition of $3.78 million for prior period adjustment for capital assets described in
note 15. The primary change compared to 2020 is due to the following revenues and expenses described below.
Total revenues decreased by $0.9 million or 15.9% under 2019, due to a decrease in revenue for Dumas Bay Centre from the
facility being closed during the COVID-19 pandemic. Transfers net change of $0.4 million is primarily due to an increase in
transfers in to Dumas Bay Centre of $0.4 million.
Total expenses decreased by $0.2 million or 3.3% due to a $0.2 million decrease in Dumas Bay Centre expenses due to facility
being closed during the COVID-19 pandemic.
Business -Type Activities - Expenses
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City of Federal Way uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements.
Governmental funds
The focus of the City of Federal Way's governmental funds is to provide information on near -term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
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 2020, the City's governmental funds had a combined ending fund balance of $47.6 million which is an
increase of $3.1 million from the prior year. Approximately 34% or $16.4 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 $0.3M
is comprised of court trust and prepaid insurance/flex plan. Restricted fund balance of $19.7M is comprised of $1.9M in
transportation capital project funding sources including real estate excise tax (BEET), mitigation impact fees, surface water
management fees, and gas tax; $3.6M for future debt service payments; $1.7M in parks capital project funding sources
including BEET, mitigation impact fees, and paths and trails funding; $3.5M LIFT sales tax for downtown redevelopment
infrastructure and parks projects; $1.4M in hotel/motel lodging tax for promotion of tourism; $1.5M in paths & trails parks
levy dedicated for paths & trails projects; $1.1M in REET for arterial street overlay, $0.8M for special contracts/studies,
$0.03M in REET for city facilities capital projects, $4.OM in REET for future capital projects and debt service payments,
$0.03M in Police seizure funds, $0.14M for affordable and supportive housing, and $0.03M for Community Development
Block Grant funds. Committed fund balance of $11.3M 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 I.
The General Fund is the chief operating fund of the City. Revenues and other sources totaling $53.2M and expenditures and
other uses totaling $52.7M, resulted in a total fund balance increase by $0.49 million or 3.0%. Total ending fund balance of
$16.7M, is $4.07M above the budgeted ending fund balance in the fund of $12.6M. Fund balance policy resolution 18-732 set
the General Fund and strategic reserve policy at $12M. The City had a beginning balance adjustment of $1.93M. The
remaining $2.14M of $4.07M increase in ending fund balance compared to budget is made up of a decrease of $6.34 million in
Page 22
expenditures/other uses, offset by a $3.81 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 2019 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 1.75% is for Voter Approved enhanced Police and Community
Safety in 2007. An additional 10% utility tax per City ordinance 19-874 was added on solid waste services effective
September 1, 2020. Total fund balance of $3.5 million increased by $0.8 million or 30% from $2.7 million in 2019 due to a
decrease in transfer out from the fund for operation of other funds such as the General Fund, adding water/sewer utility tax, and
additional 10% utility tax on solid waste services.
The Debt Service Fund has a total fund balance of $3.6 million, a $0.4 million decrease below the $3.9 million 2019 fund
balance, due to 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 $0. Operations were subsidized by
general and utility tax funds in the amount of $1.0 million in 2020.
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 $0.05 million from $4.84 million in 2019 to $4.79 million in 2020 due to spending on large projects such as Adaptive
Traffic Control System Project, City Center Access Phase I, and SR509 9' PI South to 11' PI S Pedestrian Improvements
project.
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 $4.3 million, and
those for Dumas Bay Centre amounted to $1.4 million. The total changes in net position for both funds were $0.3 million
decrease 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 2020, 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 $3.6 million and $3.0 million
respectively between the original adopted budget and the adjusted budget for the 2020 fiscal year. The following is the major
changes for the 2020 budget:
• Added $4.47 million for COVID-19 supplies, equipment and services.
• Added $0.85 million for condemnation of property services.
• Added $0.47 million for contracted police security services.
• Added $0.33 million in Finance, IT, and Community Development positions and temporary help.
• Reduced $2.30 million in jail services.
• Added $1.00 million for transfer out to debt fund to for SCORE debt service.
• Added $0.96 million for transfer out to performing arts and event center fund to subsidize operations.
• Added $0.57 million for transfer out to federal way community center fund to subsidize operations.
• Added $0.26 million for transfer out to dumas bay centre fund to subsidize operations.
• Added $0.18 million for transfer out to traffic fund to subsidize operations.
Page 23
Budget adjustments to revenues and other sources include: Adjustments to beginning balance of $4.65 million; increase in
COVID-19 grants of $4.54 million; increase in police contracted revenue of $0.47 million; increase in criminal justice sales tax
of $0.21 million; increase in community development grants of $0.21 million; increase in property tax revenue of $0.20
million; increase in state shared revenue of $0.13 million; increase in admissions tax revenue of $0.12 million; increase in cell
tower rental of $0.10 million; increase in gambling tax of $0.04 million; increase in interest earnings $0.09 million; increase in
utility tax transfer in of $0.32 million; decrease in sales tax of $1.39 million; decrease in court revenue of $0.27 million; and
decrease in community development permits and fees of $0.18 million.
The General Fund ending fund balance of $16.69 million is $4.07 million above the projected $12.62 million for 2020 year-
end. A $1.54 million increase in the beginning fund balance accounts for 38% of this increase in the ending fund balance.
The $4.07 million increase in ending fund balance compared to budget is made up of $1.54 million increase in beginning fund
balance, a decrease of $6.34 million in expenditures/other uses, offset by a decrease of $3.81 million in revenues/other sources.
The $3.81 million decrease in revenues/other sources is primarily attributed to a decrease in utility tax and traffic safety fund
transfer in of $2.29 million, decrease of $1.55 million in service charges and fees, decrease of licenses and permits of $0.73
million, decrease of $0.20 million in fines and forfeitures and interest, offset by an increase of $0.44 million in taxes, $0.33
million in intergovernmental revenue, and $0.19 million in other revenues.
The $6.34 million unspent expenditures/other uses are primarily attributable to: $6.34 million in various savings and timing of
payments in General Fund departments such as Economic Development, Finance, Information Technology, Community
Development, Public Works, Jail Services, 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,
2020 amounts to $539.4 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
Governmental Business -Type Total
Activities Activities 2020 2019
Land $
283,707,109 $
11,340,293 $
295,047,402 $
295,027,015
Building and improvements
50,875,980
4,570,260
55,446,240
58,312,962
Machinery and equipment
7,862,617
78,249
7,940,865
6,869,316
Infrastructure
115,481,964
50,270,959
165,752,922
154,329,256
Construction in progress
15,197,378
61,895
15,259,273
34,509,631
Total Capital Assets $
473,125,047 $
66,321,655 $
539,446,703 $
549,048,180
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 $5.6 million and
various park improvements for $0.2 million; offset by a $25.0 million reduction due to the completion of various park
projects, and street, traffic and surface water management related projects, and prior period adjustment for SR99 Phase V
project. Additionally, there was land purchased and donated of $0.02 million. Other improvements, buildings,
infrastructure, and machinery and equipment increase of $9.6 million is primarily due to infrastructure for SR99 Phase V
project, offset current year depreciation on assets. Remaining commitments for capital assets is described in Note 8.
Page 24
Long-term debt
At the end of 2020, the City of Federal Way had total debt principal balance outstanding of $31.6 million. The future principal
and interest payments which are backed by the full faith and credit of the government will be $39.6 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 $ 39,643,878 $ - $ 39,643,878
Total $ 39,643,878 $ - $ 39,643,878
The City's principal debt decreased by $1.9 million due to annual debt service payments of $1.9 million for 2017 Target
Property Bond, 2013 Refunded Community Center Bond, 2019 SCORE Bond, 2019 PAEC Bond, and 2019 Section 108 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 2020 was $12.645 billion and the total amount of debt the City may issue is $920.3
million. Remaining legal debt capacities as of December 31, 2020 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
$161,614,264 (1.5% X 12.645B) +$3.6M - $31.6M
$126,453,260 (1.0% X 12.645B)
$316,133,150 (2.5% X 12.645B)
$316,133,150 (2.5%X12.64513)
$920,333,825 (See page 136)
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, 2020
Governmental
Business -type
Activities
Activities
Total
ASSETS
Cash & cash equivalents
$ 63,023,121
$ 6,868,673
$ 69,891,794
Receivables (net)
3,931,639
133,324
4,064,963
Due from other governments
6,326,882
41,651
6,368,533
Prepaid items
33,987
-
33,987
Inventories
8,480
-
8,480
Restricted assets:
Seizure funds/covert funds/municipal trust/retainage
289,314
-
289,314
Investment in joint venture
6,022,544
-
6,022,544
Capital assets not being depreciated:
Land
283,707,109
11,340,293
295,047,402
Construction in progress
15,197,378
61,895
15,259,273
Capital assets net of accumulated depreciation:
Buildings/structures
42,935,068
741,664
43,676,732
Improvements other than buildings
7,940,912
3,828,596
11,769,508
Machinery and equipment
7,862,617
78,249
7,940,865
Infrastructure
115,481,964
50,270,959
165,752,922
Net Pension Asset
7,649,045
-
7,649,045
Total Assets
560,410,059
73,365,303
633,775,362
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS
3,627,563
185,088
3,812,651
LIABILITIES
Accounts payable and accruals
4,336,471
237,507
4,573,979
Unearned revenue
351,637
351,109
702,746
Retainage payable
107,488
8,173
115,661
Customer deposits
1,475,264
2,838
1,478,103
Noncurrent Liabilities:
Due within one year
2,127,529
9,206
2,136,735
Due in more than one year
38,766,801
709,980
39,476,781
Net Pension Liability
5,043,226
597,236
5,640,462
Other Long -Term Liabilities
33,723,575
112,744
33,836,319
Total Liabilities
47,165,191
1,318,814
48,484,005
DEFERRED INFLOW OF RESOURCES RELATED
TO PENSIONS
3,057,237
183,557
3,240,794
NET POSITION
Net investment in capital assets
450,219,346
66,321,652
516,540,998
Restricted for:
Debt service
3,569,746
-
3,569,746
Capital projects
11,069,922
-
11,069,922
Steel Lake & North Lake Mgmt District
-
35,295
35,295
Other
5,282,818
-
5,282,818
Unrestricted
43,673,363
5,691,073
49,364,436
Total Net Position
$ 513,815,194
$ 72,048,020
$ 585,863,214
The notes to the financial statements are an integral part of this statement.
Functions/Programs
Governmental Activities:
General government
Security of persons & property
Transportation
Physical environment
Economic environment
Health
Culture & recreation
Interest on long-term debt
Total governmental activities
Business -type Activities:
Surface Water Management
Dumas Bay Centre
Total business -type activities
Total
STATEMENT OF ACTIVITIES
For the Year ended December 31, 2020
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
$ 8,094,395
$ 2,956,619
$ 7,305,858 $ -
34,792,577
4,019,723
946,650 -
13,469,874
3,192,519
1,641,565 1,994,083
708,031
509,311
89,277 -
6,317,075
2,215,856
125,126 1,000,000
1,774,097
-
1,029,126 -
7,607,707
729,227
57,825
1,015,414
-
- -
73,779,171
13,623,255
11,195,427 2,994,083
4,989,139
4,454,422 42,348 122,032
565,369
118,562 - -
5,554,507
4,572,984 42,348 122,032
$79,333,678
$ 18,196,239 $11,237,775 $ 3,116,115
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
Transfers
Total general revenues (loss) and transfers
Change in net position
Net position at beginning of year
Prior period adjustment (See Note 15)
Effect of change in accounting principle
Adjusted beginning net position
Net position at end of year
$ 2,168,082 $
$ 2,168,082
(29,826,204)
(29,826,204)
(6,641,706)
(6,641,706)
(109,443)
(109,443)
(2,976,093)
(2,976,093)
(744,971)
(744,971)
(6,820,655)
(6,820,655)
(1,015,414)
(1,015,414)
(45,966,406)
(45,966,406)
(370,337) (370,337)
(446,807) (446,807)
(817,144) (817,144)
(45,966,406) (817,144) (46,783,549)
11,449,581
11,449,581
16,099,037
16,099,037
2,799,244
2,799,244
14,672,457
14,672,457
4,467,111
4,467,111
147,533
147,533
120,482
120,482
67,732
67,732
5,336
5,336
1,269,811
-
1,269,811
497,606
54,138
551,744
(183,453)
183,453
-
51,412,477
237,591
51,650,068
5,446,071
(579,553)
4,866,518
519,455,185
68,844,107
588,299,292
(10,690,600)
3,783,466
(6,907,134)
(395,462)
-
(395,462)
508,369,123
72,627,573
580,996,696
$ 513,815,194
$72,048,020
$ 585,863,214
The notes to the financial statements are an integral part of this statement.
Page 29
ASSETS
Cash and Cash Equivalents
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, 2020
General Street
$ 13,100,152 $ 1,221,359
8,458 -
227,381 -
370,395 24,796
289,314 -
4,531,268 223,159
1,620,568 -
Debt
Utility Tax Service
$ 2,015,209 $ 3,569,746
1,693,470
20,147,536 1,469,314 3,708,679 3,569,746
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
1,132,594
106,407
56,546 -
Accounts/payroll payable
1,192,888
122,867
121,618 -
Retainage payable
-
7,969
- -
Deposits payable
872,033
566,567
-
Interfund loans payable
-
-
Unearned revenue
65,280
73,893
-
TOTAL LIABILITIES
3,262,795
877,703
178,164 -
DEFERRED INFLOWS OF RESOURCES
FOR UNAVAILABLE PROPERTY TAXES
191,049
-
- -
Fund Balance:
Nonspendable
270,772
-
-
Restricted
27,000
-
- 3,569,746
Committed
9,350
591,611
3,530,515 -
Unassigned
16,386,570
-
- -
TOTAL FUND BALANCES
16,693,692
591,611
3,530,515 3,569,746
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 20,147,536 $ 1,469,314 $ 3,708,679 $ 3,569,746
The notes to the financial statements are an integral part of this statement.
Page 30
ASSETS
Cash and Cash Equivalents
Prepaid items
Receivables (net):
Taxes
Accounts and contracts
Restricted Cash
Due from other governments
Interfund loans receivable
Inventories
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
DEFERRED INFLOWS OF RESOURCES FOR
UNAVAILABLE PROPERTY TAXES
Fund Balance:
Nonspendable
Restricted
Committed
Unassigned
TOTAL FUND BALANCES
TOTAL LIABILITIES, DEFERRED INFLOWS OF
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2020
Performing Arts
& Event Center Nonmajor
Operations Transportation Governmental
$ 94,919 $ 6,131,803
20,529 -
27,460
8,480
151,388
24,673
720,019
$ 16,975,502
1,477,478
85,986
823,186
6,876,495 19,362,152
$ 43,108,690
28,987
3,398,329
533,310
289,314
6,297,632
1,620,568
8,480
55,285,310
84,012 431,096
462,821
2,273,476
- 38,323
150,693
1,626,389
97,781
1,738
107,488
-
36,663
1,475,263
- 1,523,960
96,608
1,620,568
67,376 -
145,088
351,637
151,388 2,091,160
893,611
7,454,821
- -
-
191,049
-
-
270,772
1,900,240
14,154,727
19,651,713
2,885,095
4,313,814
11,330,385
-
-
16,386,570
4,785,335
18,468,541
47,639,440
RESOURCES AND FUND BALANCES $ 151,388 $ 6,876,495 $ 19,362,152
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not
reported in the funds. See Note 8, difference is the Internal Service fund amount of $11.05M on page 38
Investment in joint venture is not a financial resource and, therefore, not reported in the funds. See Note 14 $6.02M on page 76.
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 $191K & Note 9 $7.65M (page 62)
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 $30.07M + Adj $117.6K + $73.5K LT Comp Abs
+ $302.OK Net Pension Liability (NPL) + $92.1K Def Infl Rel to Pensions - $92.OK Def Outfl Rel to Pensions
Long-term liabilities, including bonds payable, pension liability, and inflows/outflows related to pensions are not due and
payable in the current period and, therefore, are not reported in the funds. See Note 11-$31.64M-$2.38M - $0.13M-$1.70M,
In Govt Wide - $5.04M NPL - $3.06M Def Infl Rel to Pensions + $3.63M Def Outfl Rel to Pensions
Net position of governmental activities
462,071,809
6,022,544
7,840,094
30,565,309
(40,324,003)
The notes to the financial statements are an integral part of this statement.
Page 31
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2020
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
$ 30,211,040
$ -
$ 14,672,456
$ -
3,611,569
233,347
-
-
7,168,788
1,179,181
-
-
2,441,947
514,053
737,582
-
-
-
174,232
5,939
56,982
22,909
730,901
23,489
-
-
45,076,059
1,956,009
14,729,438
22,909
8,045,568 - - -
29,583,142 188,786 3,527,394 -
863,865 4,027,939 - -
3,307,711 - 101,472 -
1,067,575 - - -
4,360,635 - 111,084 -
- - - 1,731,181
- - - 984,281
838,006 33,177 - -
48,066,502 4,249,902 3,739,950 2,715,462
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (2,990,443) (2,293,893) 10,989,488 (2,692,553)
OTHER FINANCING SOURCES (USES)
Transfers in
8,146,895
2,287,779
-
2,328,567
Transfers out
(4,668,324)
-
(10,173,601)
-
TOTAL OTHER FINANCING
SOURCES (USES)
3,478,571
2,287,779
(10,173,601)
2,328,567
NET CHANGE IN FUND BALANCES
488,128
(6,114)
815,887
(363,986)
FUND BALANCES - BEGINNING
16,601,026
597,725
2,714,628
3,933,732
Effect of Change in Accounting Principle
(395,462)
-
-
-
ADJUSTED FUND BALANCES -
BEGINNING
16,205,564
597,725
2,714,628
3,933,732
FUND BALANCES - ENDING
$ 16,693,692
$ 591,611
$ 3,530,515
$ 3,569,746
The notes to the financial statements are an integral part of this statement.
Page 32
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2020
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
Performing Arts
& Event Center
Nonmajor
Operations
Transportation
Governmental
Total
$ -
$ -
$ 5,035,041
$ 49,918,537
-
-
-
3,844,916
-
2,541,805
2,501,092
13,390,866
251,031
1,882,417
1,795,104
6,884,552
-
-
2,156,205
2,893,787
45,605
30,492
84,903
421,062
294,516
3,199
78,931
1,131,036
591,152
4,457,913
11,651,276
78,484,756
- -
44,831
8,090,399
- -
1,481,068
34,780,390
- 1,105,096
2,493,701
8,490,601
- -
537,419
537,419
1,452,916 -
28,785
4,890,884
- -
709,868
1,777,443
- -
1,396,521
5,868,240
- -
159,000
1,890,181
- 18,204
76,216
1,078,701
- 5,578,248
194,366
6,643,797
1,452,916 6,701,548
7,121,775
74,048,055
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (861,764) (2,243,635) 4,529,501 4,436,701
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
Effect of Change in Accounting Principle
ADJUSTED FUND BALANCES -
BEGINNING
FUND BALANCES - ENDING
972,310 2,238,000 3,305,715 19,279,266
- (45,000) (5,374,047) (20,260,972)
972,310 2,193,000 (2,068,332) (981,706)
110,546 (50,635) 2,461,169 3,454,995
(110,546) 4,835,970 16,007,372 44,579,907
- - (395,462)
(110,546) 4,835,970 16,007,372 44,184,445
$ - $ 4,785,335 $ 18,468,541 $ 47,639,440
The notes to the financial statements are an integral part of this statement.
Page 33
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2020
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)-$451K+ $182K
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) $2.46M - $327K
Change in net position of governmental activities (page 28)
2020
$ 3,454,995
(1,874,332)
48,752
1,953,468
(268,562)
2,131,749
$ 5,446,071
The notes to the financial statements are an integral part of this statement.
Page 34
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
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)
$ 30,594,693
$ 29,768,093
$ 30,211,040
$ 442,947
4,292,914
4,340,001
3,611,569
(728,432)
2,009,500
6,840,601
7,168,788
328,187
3,834,514
3,994,400
2,441,947
(1,552,453)
943,401
815,189
737,582
(77,607)
185,617
299,619
174,232
(125,387)
440,246
540,246
730,901
190,655
42,300,885 46,598,149 45,076,059 (1,522,090)
4,600,292
10,011,966
8,045,568
1,966,398
35,038,028
31,859,132
29,583,142
2,275,990
1,105,746
1,105,746
863,865
241,881
3,321,076
3,638,708
3,307,711
330,997
2,155,774
2,549,813
1,067,575
1,482,238
4,637,681
4,874,511
4,360,635
513,876
-
369,065
838,006
(468,941)
50,858,597 54,408,941 48,066,502 6,342,439
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (8,557,712) (7,810,792) (2,990,443) 4,820,349
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
Effect of change in accounting principle
ADJUSTED FUND BALANCES -
BEGINNING
10,111,732 10,433,709 8,146,895 (2,286,814)
(1,695,849) (4,668,324) (4,668,324)
8,415,883 5,765,385 3,478,571 (2,286,814)
(141,829) (2,045,407) 488,128 2,533,535
10,015,036 14,667,137 16,601,026 1,933,889
- - (395,462) (395,462)
10,015,036 14,667,137 16,205,564 1,538,427
FUND BALANCES - ENDING $ 9,873,207 $ 12,621,730 $ 16,693,692 $ 4,071,962
The notes to the financial statements are an integral part of this statement.
Page 35
STREET FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
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
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
$ 200,000
$ 200,000
$ 233,347
$ 33,347
1,300,003
1,305,001
1,179,181
(125,820)
500,752
736,571
514,053
(222,518)
5,514
5,516
5,939
423
211,500
235,400
23,489
(211,911)
2,217,769
2,482,488
1,956,009
(526,479)
202,353 202,353
188,786
13,567
4,111,347 4,485,464
4,027,939
457,525
- 23,900
33,177
(9,277)
4,313,700 4,711,717
4,249,902
461,815
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (2,095,931) (2,229,229) (2,293,893) (64,664)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
2,095,849 2,218,520 2,287,779 69,259
2,095,849 2,218,520 2,287,779 69,259
(82) (10,709) (6,114) 4,595
500,676 510,709 597,725 87,016
$ 500,594 $ 500,000 $ 591,611 $ 91,611
The notes to the financial statements are an integral part of this statement.
Page 36
UTILITY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 12,352,891 $ 14,297,547
$ 14,672,456
$ 374,909
Interest
19,999 19,999
56,982
36,983
TOTAL REVENUES
12,372,890 14,317,546
14,729,438
411,892
EXPENDITURES
Current:
Security of persons and property
3,276,590
3,876,590
3,527,394
349,196
Economic environment
95,218
95,218
101,472
(6,254)
Culture and recreation
103,437
103,437
111,084
(7,647)
TOTAL EXPENDITURES
3,475,245
4,075,245
3,739,950
335,295
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
8,897,645
10,242,301
10,989,488
747,187
OTHER FINANCING SOURCES (USES)
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
(8,897,645) (10,422,985) (10,173,601) 249,384
(8,897,645) (10,422,985) (10,173,601) 249,384
(180,684) 815,887 996,571
2,500,000 2,714,628 2,714,628 -
$ 2,500,000 $ 2,533,944 $ 3,530,515 $ 996,571
The notes to the financial statements are an integral part of this statement.
Page 37
PERFORMING ARTS & EVENT CENTER OPERATIONS FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Service charges and fees
$ 1,537,972
$ 143,526
$ 251,031
$ 107,505
Interest
45,605
45,605
45,605
-
Other
290,746
297,746
294,516
(3,230)
TOTAL REVENUES
1,874,323
486,877
591,152
104,275
EXPENDITURES
Current:
Economic environment 1,874,323 1,331,690 1,452,916 (121,226)
TOTAL EXPENDITURES 1,874,323 1,331,690 1,452,916 (121,226)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - (844,813) (861,764) (16,951)
OTHER FINANCING SOURCES (USES)
Transfers in - 955,359 972,310 16,951
TOTAL OTHER FINANCING
SOURCES (USES) - 955,359 972,310 16,951
NET CHANGE IN FUND BALANCES - 110,546 110,546
FUND BALANCES - BEGINNING - (110,546) (110,546) -
FUND BALANCES - ENDING $ - $ - $ - $ -
The notes to the financial statements are an integral part of this statement.
ASSETS
Current Assets
Cash and Cash Equivalents
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 NONCURRENT ASSETS
TOTAL ASSETS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2020
Governmental
Business -type Activities - Enterprise Funds Activities
Surface Water Dumas Bay Internal
Management Centre TOTAL Service
$ 5,203,408 $ 1,782,850 $ 6,986,258 $ 19,796,845
- - - 5,000
133,324
133,324
29,250
41,651
-
41,651
-
5,378,383
1,782,850
7,161,233
19,831,095
9,230,653
2,109,640
11,340,293
-
832,086
3,682,227
4,514,313
16,545,121
3,915,030
314,901
4,229,931
-
68,786
145,848
214,634
21,188,438
67,843,689
-
67,843,689
-
61,895
61,895
(18,149,504)
(3,733,599)
(21,883,103)
(26,680,321)
63,802,635
2,519,017
66,321,652
11,053,238
69,181,018
4,301,867
73,482,885
30,884,333
DEFERRED OUTFLOWS RELATED TO
PENSIONS
158,880
26,208
185,088
92,001
LIABILITIES AND FUND EQUITY
Current Liabilities:
Vouchers/payroll payable
209,840
27,666
237,506
436,609
Unearned revenue
127,210
223,899
351,109
-
Retainage payable
3,561
4,612
8,173
Deposits payable
200
2,637
2,837
Compensated absences payable
7,392
1,814
9,206
-
TOTAL CURRENT LIABILITIES
348,203
260,628
608,831
436,609
Long-term liabilities:
Compensated absences payable
90,522
22,222
112,744
73,504
Net Pension Liability
510,928
86,308
597,236
302,018
TOTAL LONG-TERM LIABILITIES
601,450
108,530
709,980
375,522
TOTAL LIABILITIES
949,653
369,158
1,318,811
812,131
DEFERRED INFLOWS RELATED TO
PENSIONS
156,894
26,663
183,557
92,148
Net investment in capital assets
63,802,635
2,519,017
66,321,652
11,053,238
Restricted for:
Steel Lake & North Lake Mgmt District
35,295
-
35,295
-
Unrestricted
4,395,421
1,413,237
5,808,658
19,018,817
TOTAL NET POSITION
$ 68,233,351
$ 3,932,254
72,165,605
$ 30,072,055
Adjustment to reflect the consolidation of internal service fund activities related to
enterprise funds (117,585)
NET POSITION OF BUSINESS -TYPE ACTIVITIES
$ 72,048,020
The notes to the financial statements are an integral part of this statement.
Page 39
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For Year Ended December 31, 2020
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):
Gain (Loss) from disposal of capital assets
Interest income
Interest expense
Governmental
Business -type Activities - Enterprise Funds Activities
Surface Water Dumas Bay Internal
Management Centre TOTAL Service
$ 4,452,601 $ 118,562 $ 4,571,163 $ 11,734,264
42,348 - 42,348 -
1,821 - 1,821 149,211
4,496,770 118,562 4,615,332 11,883,475
1,909,772
313,085
2,222,857
1,182,407
138,982
50,982
189,964
870,333
1,219,597
145,159
1,364,756
10,048, 861
722,784
15,393
738,177
2,146,710
816,751
33,005
849,756
-
4,807,886
557,624
5,365,510
14,248,311
(311,116)
(439,062)
(750,178)
(2,364,836)
- - - 155,158
37,880 9,611 47,491 83,187
TOTAL NON -OPERATING REVENUES (EXPENSES)
37,880
9,611
47,491
238,345
INCOME (LOSS) BEFORE TRANSFERS
(273,236)
(429,451)
(702,687)
(2,126,491)
Capital contributions
122,032
-
122,032
877,325
Transfers in
-
373,453
373,453
948,253
Transfers out
(190,000)
-
(190,000)
(150,000)
CHANGE IN NET POSITION
(341,204)
(55,998)
(397,202)
(450,913)
NET POSITION - BEGINNING
64,791,089
3,988,252
68,779,341
30,522,968
Prior period adjustment
3,783,466
-
3,783,466
-
ADJUSTED NET POSITION - BEGINNING
68,574,555
3,988,252
72,562,807
30,522,968
NET POSITION - ENDING
$ 68,233,351
$ 3,932,254
$ 72,165,605
$ 30,072,055
CHANGE IN NET POSITION
(397,202)
Adjustment to reflect the consolidation of internal service fund activities related
to enterprise
funds
(182,351)
CHANGES IN NET POSITION OF BUSINESS -TYPE ACTIVITIES
$ (579,553)
The notes to the financial statements are an integral part of this statement.
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For Year Ended December 31, 2020
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:
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
Governmental
Business -type Activities - Enterprise Funds Activities
Surface Water Dumas Bay Internal
Management Centre TOTAL Service
$ 4,451,330 $ 82,990 $ 4,534,319 $
- - - 11,734,264
(1,306,941)
(1,074,224) (249,699) (1,323,923) (8,668,414)
(2,101,151) (362,524) (2,463,675) (1,226,594)
(816,751) (33,005) (849,756)
(312,638) (1,119) (313,756) (997,990)
22,685 22,685 149,061
169,252 (563,357) (394,105) (316,614)
- 373,453 373,453 948,253
(190,000) - (190,000) (150,000)
(190,000) 373,453 183,453 798,253
(39,344) (8,965) (48,309) (1,597,227)
(28,207)
164.227
(39,344) (8,965) (48,309) (1,461,207)
37,879 9,611 47,490 83,187
37,879 9,611 47,490 83,187
(22,213) (189,258) (211,471) (896,381)
5,225,621 1,972,108 7,197,729 20,693,226
5,203,408 1,782,850 6,986,258 19,796,845
(311,115) (439,062) (750,176) (2,364,836)
722,784 15,393 738,177 2,146,710
(33,693) 39,640 5,947 (150)
(21,484) - (21,484) -
(13,183) 705 (12,478) (20,833)
(14,221) (50,727) (64,948) (54,151)
(14,062) (14,062)
- (3,950) (3,950)
32,421 (75,212) (42,791) -
25,090 2,048 27,138 17,397
(43,771) (18,852) (62,623) 25,092
(159,515) (33,340) (192,855) (65,843)
480,366 (124,295) 356,071 2,048,222
$ 169,252 $ (563,357) $ (394,105) $ (316,614)
$ 122,032 $ 877,325
The notes to the financial statements are an integral part of this statement.
Page 41
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
December 31, 2020
ASSETS
Cash and Cash Equivalents
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Held for Judgement
Due to other governments
TOTAL LIABILITIES
NET POSITION
Reserved for Specific Program Use
TOTAL NET POSITION
Auto Theft
Task Force Private Custodial
Purpose Trust Fund Fund
$ - $ 1,090,766
290,702 -
290,702 1,090,766
- 210,256
290,702 3,249
290,702 213,505
877,261
$ - $ 877,261
The notes to the financial statements are an integral part of this statement.
Page 42
STATEMENT OF CHANGES
IN FIDUCIARY NET POSITION
For Year Ended December 31, 2020
ADDITIONS:
Intergovernmental
Court Remittances
Seizure Funds
TOTAL ADDITIONS
DEDUCTIONS:
Current:
Security of persons & property
Court Remittances
TOTAL DEDUCTIONS
CHANGE IN NET POSITION
RESTRICTED NET POSITION - BEGINNING
Effect of change in accounting principle
ADJUSTED RESTRICTED NET POSITION - BEGINNING
NET POSITION - ENDING
Auto Theft
Task Force Private Custodial
Purpose Trust Fund Fund
$ 716,224 $ -
- 700,001
625,651
716,224 1,325,652
716,224 143,852
- 700,001
716,224 843,853
481,799
395,462
2Q5 dr?
$ - $ 877,261
The notes to the financial statements are an integral part of this statement.
Page 43
NOTES TO THE BASIC FINANCIAL STATEMENTS
December 31, 2020
INDEX
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
FundBalance Classification........................................................................................
51
Interfund Transactions.................................................................................................
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
Interf ind Transactions..................................................................................................................
74
13
Contractual Obligations, Contingencies, and Litigation...............................................................
75
14
Joint Ventures...............................................................................................................................
75
15
Prior Period Adjustments...................................................................................................
77
16
Leases................................................................................................................
77
17
Self-Insurance...............................................................................................................................
78
18
Accounting and Reporting Changes.............................................................................................
79
19
COVID-19 pandemic....................................................................................................................
79
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended December 31, 2020
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 Annual Comprehensive Financial Report (ACFR) 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 41, 2018 the City Council decided to withdraw from the SCORE interlocal agreement effective on January 111, 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.
As a general rule the effect of the interfund activity has been eliminated for the government -wide financial statements. Interfund
services provided and used are not eliminated in the process of consolidation.
Page 45
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
The City reports the following major governmental funds:
General Fund — This is the City's general operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
Street Fund — This fund accounts for the receipt and disbursement of State -levied motor vehicle fuel taxes which must
be accounted for in a separate fund and expended for street -oriented engineering, maintenance and operations.
Utility Tax Fund — This fund was established to account for all utility tax receipts. These receipts will subsequently be
distributed to various funds to provide for debt service, capital projects, maintenance and operations expenditures, etc.
as determined by the City Council.
Debt Service Fund — This fund accounts for the accumulation of resources for the payment of general obligation and
assessment bond principal, interest and related costs.
Performing Arts & Event Center Operations Fund — This fund was established to account for receipts and disbursements
related to the operation of the 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.
The City reports the following fund groups as non -major funds:
Special Revenue Funds — These funds are to be used to account for the proceeds of revenues and sources (other than
special assessments, expendable trust or major capital projects) that are committed or legally restricted to expenditures
for specified purposes.
Capital Project Funds — These funds account for the acquisition or construction of major capital facilities with the
exception of those facilities financed by the proprietary fund. The major sources of revenues for these funds are general
obligation bond proceeds, grants from other agencies, local taxes, contributions from other funds, utility tax, and real
estate excise tax.
The City reports the following major enterprise funds:
Surface Water Management Fund — This fund was established to administer and account for all receipts and
expenditures related to the City's surface and storm water management system.
Dumas Bay Centre Fund — This fund was established to account for revenues and expenses related to the acquisition,
capital improvements maintenance and operations of the City -owned Dumas Bay Centre and Knutzen Family Theatre.
The Dumas Bay Centre is primarily used for meetings, events, lodging, and catering services.
Additionally, the City reports following internal service funds:
Risk Management Fund — This fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, and worker's compensation claims. Both risk control (to
minimize the losses that strike an organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is also currently recovering costs and building reserves for
general liability including property, casualty, errors and omissions and fidelity coverage.
Information Systems Fund — This fund was established to account for all costs associated with data processing,
telecommunications and the Geographical Information System (GIS). This fund owns and depreciates all non-
proprietary fund assets related to these functions, and charges equipment/software users for both maintenance and
operating costs and equipment replacement charges based on depreciation schedules.
Mail & Duplication Fund — This fund accounts for duplication, graphics and other general support services provided
to departments and funds throughout the City.
Fleet and Equipment Fund — This fund accounts for the cost of maintaining City vehicles and other motorized
equipment. Rates charged to user departments are based on the full cost of maintaining equipment items, including the
recovery of related depreciation expense.
Buildings and Furnishings Fund — This fund accounts for all costs associated with the operation and maintenance of
specified City buildings. City building facilities and furnishings are owned by this Fund. Both maintenance/operating
costs and depreciation recovery are charged to City departments and funds.
Health Insurance Fund — The City is currently self -insuring for medical insurance. The premiums paid by the City and
employees are deposited into this fund. Medical service for medical coverage and pharmaceutical reimbursement are
paid out of this fund. Also, the fund has established reserves for the payment of estimated future claims.
Unemployment Insurance Fund - The City is currently self -insuring State Unemployment Compensation. Related
premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability.
Internal Service Funds account for goods and services provided to other departments or agencies of City of Federal Way, or to
other governments, on a cost -reimbursement basis.
The City reports the following fiduciary funds:
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.
Custodial Fund — This fund was added in accordance with the implementation of GASB Statement No. 84. This fund
accounts for items held for judgement, seizure funds, court remittances, and due to other governments originally
reported in the General Fund, but now reported in a custodial fund.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING
Government -Wide and Governmental Funds
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis
of accounting, similar to the proprietary fund financial statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the City of Federal Way considers revenues to be available if they are collected within 60 days
of the end of the current fiscal period. The City considers property tax as available if they are collected within 60 days after year
end. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when
payment is due.
Property taxes, licenses, and interest associated within the current period are all considered to be susceptible to accrual and have
been recognized as revenues of the current fiscal period. Only the portion of property tax receivable due within the current fiscal
period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be
measurable and available only when cash is received by the City.
Major revenues recorded on the modified accrual basis are:
Property Taxes - King County acts as the City's collection agent for these taxes. Upon receipt, the County electronically
transmits to the City the taxes which it has collected on the City's behalf in the prior day. On this basis, property taxes received
in January are considered both measurable and available and are therefore recognized as revenue in the current year.
Other Locally Levied Taxes - King County also acts as the City's collection agent for the 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.
Page 47
Grant Revenues - Under Section G60.109 of the Codification of Governmental Accounting and Financial Reporting
Standards, revenues for cost reimbursement grants are determined to be earned and, therefore, available at the time related
expenditures are incurred. For this reason, grant revenues to be received as reimbursement for expenditures incurred in the
current year are also recognized as revenue in that year.
Shared Revenues - Revenues that have been collected by the State, but not remitted by an intermediary collection agency to
the City, are considered measurable and available.
Other Revenue Sources - Other items recognized as revenue in the current year on the modified accrual basis include
investment interest earned but not received at year end; inter -fund, and intergovernmental service billings related to services
provided in the current year which are outstanding at year end; and any other material revenue amounts determined to be both
measurable and available under current modified accrual accounting practices. Revenues not considered to meet the criteria
for recognition on the modified accrual basis include licenses and permits, fines and forfeitures, and other miscellaneous
revenues which are generally not measurable until received.
Proprietary Funds
The proprietary fund statements are reported using the economic resources measurement focus and full -accrual basis of
accounting. Revenues are recorded when earned and expenses are recorded when liability is incurred regardless of the timing
of the cash flows.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the City are primarily user charges, and the cost of providing goods or
services to the general public on a continuing basis. Operating expenses for enterprise and internal service funds includes the
cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting
this definition are reported as non -operating revenues and expenses.
Other Disclosure
The City was neither the lessor nor lessee in capital leases; has not been the recipient of an endowment; did not engage in short-
term debt activity during the year; has not issued special assessment debt; does not benefit from on -behalf payment; has not
pledged future revenues; has not incurred an obligation for pollution remediation; had no hedging derivatives; is not the
transferor or operator in a service concession arrangement; and does not provide other post -employment benefits (OPEB), and
was not the transferor or continuing government in a merger, transfer of operation, etc.
BUDGETARY INFORMATION
Scope of Budget
Annual appropriated budgets are adopted for the general, some special revenue, and debt service funds on the modified accrual
basis of accounting. For governmental funds, there are no differences between the budgetary basis and generally accepted
accounting principles. Budgets for debts service and capital project funds are adopted at the level of the individual debt issue
or project and for fiscal periods that correspond to the lives of debt issues or projects.
Legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the total appropriation
amount. Any unexpended appropriation balances for annually budgeted funds lapse at the end of the year. Appropriations for
other special purpose funds that are non -operating in nature are adopted on a "project -length" basis and, therefore, are carried
forward from year to year without re -appropriation until authorized amounts are fully expended or the designated purpose of the
fund has been accomplished.
The individual funds within each fund type which are included in the City's biennial operating budget (funds budgeted on an
annual basis) are:
General Fund Special Revenue Funds Debt Service Fund
- 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
-Affordable & Supportive Housing Sales & Use Tax
Capital Project Funds
-Downtown Redevelopment
-City Facilities
-Parks
-Transportation
-Capital Project Reserve
-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.
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, 2020, the State Treasurer
was holding $69,776,176 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 2020 were approximately $4.3
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, 2020, the total cash and cash equivalents were $70,181,107.
In accordance with GASB Statement 79, LGIP investments are measured at amortized cost. See (Note 5 - Deposits and
Investments). Cash with escrow agent was $-0-.
Investments
The City as of December 31, 2020, had no investments, outside of LGIP. 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 toffrom other funds. All other outstanding balances between funds
are reported as due to/from 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
Telecommunications 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 ..............................
Heavy Trucks ...............................................
............ 8-10
Land hnprovements......................................................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 or asset, 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 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
Page 52
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, 2020 were $48.1 million and Unassigned General fund balance at
year -ended 2020 was $16.4 million or (34%).
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 $585.9 million of net position, of which $15.9 million is restricted by
the enabling legislation, and $516.5 is for net investment in capital assets (there are no unspent proceeds of debt).
2020 FUND BALANCE CLASSIFICATION
Fund Balance
General
Street Utility Debt Performing Transport-
Nonmajor
Total
Fund
Tax Service Arts & Event ation
Gov't
Ctr Oper.
Nonspendable:
Court trust
$ 262,314
$ $ $ $ $
$
$ 262,314
Prepaid items/Inventory
8,458
8,458
Restricted for:
Police covert/seizure
27,000
27,000
Future debt payments
-
3,569,746
3,569,746
Arterial Street Overlay
-
1,061,746
1,061,746
Affrd. & Supprt. Housing Sales & Use Tax
138,971
138,971
Special Contracts/Studies
817,918
817,918
Hotel/Motel Lodging Tax
1,448,362
1,448,362
Path & Trails Reserves
1,488,063
1,488,063
Downtown Redevelopment
3,468,714
3,468,714
City Facilities CIP
30,501
30,501
Parks CIP
1,656,347
1,656,347
Transportation CIP
1,900,240
-
1,900,240
Performing Arts & Event Ctr
-
-
-
Real Estate Excise Tax
4,014,120
4,014,120
Community Development Block Grant
29,985
29,985
Committed to:
Capital, debt, and operations
-
21198,214
-
2,198,214
Petty cash/advance travel
9,350
-
-
9,350
Community Development Block Grant
-
-
820
820
Proposition 1
1,332,301
-
1,332,301
Transportation CIP
- 2,885,095
2,885,095
Downtown Redevelopment
-
-
City Facilities CIP
259,604
259,604
Arterial Street
375,000
375,000
Solid Waste/Recycling
213,550
213,550
Federal Way Community Center
1,499,999
1,499,999
Traffic Safety
1,216,159
1,216,159
Snow/ice removal
591,611
-
591,611
Parks CIP
-
261,820
261,820
Performing Arts & Event Ctr
-
-
Capital Project Reserve
369,862
369,862
Technology
116,999
116,999
Unassigned.
General Fund
16,386,570
-
16,386,570
Performing Arts & Event Center
-
- - - - -
-
-
Total Fund Balance: $ 16,693,692
$ 591,611 $ 3,530,515 $ 3,569,746 $ $ 4,785,335
$ 18,468,540
$ 47,639,440
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 netposition
— 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 $40,324,004 difference are as follows:
Bonds Payable & Premium at beginning of year $ 35,424,170
Plus: Inclusion of compensated absences 2,380,402
Plus: Current year addition/reduction of principal portion of debt & premium (1,953,468)
Plus: Net Pension Liability 5,043,226
Plus: Deferred Inflows of Resources Related to Pensions 3,057,236
Less: Deferred Outflows of Resources Related to Pensions (3,627,563)
Net Adjustment to reduce fund balances -total governmental
funds to arrive at net position - governmental activities $ 40,324,004
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 $(1,874,332) difference are as follows:
Capital outlay $ 6,643,797
Plus: Net Increase in investment in joint venture 570,949
Less: Contributed Capital/Donated from Other Funds (551,969)
Less: Governmental depreciation expense (8,537,110)
Net adjustment to increase net changes in fund balances -
Total governmental funds to arrive at changes in net position
ofgovernmental activities $ (1,874,332)
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 $ 48,752
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 $ (327,277)
Accrual adjustment for GASB 68 pension reporting $ 2,459,026
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 2020 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.
2020 Operating Budget Funds
Fund
Original Budget
Supplemental
Final Budget
Appropriations
General Fund $
50,858,597 $
3,550,344 $
54,408,941
Special Revenue Funds:
Street Fund
4,313,700
398,017
4,711,717
Arterial Street Fund
1,515,064
1,177,056
2,692,120
Utility TaxFund
3,475,245
600,000
4,075,245
Affrd. & Supprt. Housing Sales & Use 7
-
41,020
41,020
Solid Waste/Recycling Fund
494,800
59,000
553,800
Special Contracts / Studies
7,000
400,000
407,000
Hotel/Motel Lodging Tax
224,700
75,300
300,000
Federal Way Community Center
2,331,150
(564,535)
1,766,615
Traffic Safety
2,640,639
-
2,640,639
Performing Arts & Event Center Oper.
1,874,323
(542,633)
1,331,690
Community Development Block Grant
685,263
1,165,400
1,850,663
Technology
-
67,100
67,100
Subtotal Special Revenue Funds:
17,561,884
2,875,725
20,437,609
Debt Service Fund
2,344,957
625,000
2,969,957
Capital Project Funds:
Parks
300,000
100,000
400,000
Transportation
4,666,000
2,649,149
7,315,149
Subtotal Capital Project Funds:
4,966,000
2,749,149
7,715,149
Total: $
75,731,438 $
9,800,218 S
85,531,656
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 2020 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, 2020, the equity in pooled cash and investments
was $70,181,107.
At year-end, the City had $70,181,107 in cash, cash equivalents, and investments which consisted of investments with the LGIP
of $69,776,176; the City's checking account bank balance prior to outstanding checks was $1,019,979; deposit account of $250,
Performing Arts & Event Center checking account and change fund totaling $174,603, petty cash, change fund, advance travel,
and investigative fund totaling $38,550, and Court Trustee Fund of $262,314; excluding fiduciary funds of $1,090,766. Cash
held with an escrow agent is $-0-. 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, 2020, 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, 2020 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, 2020 the City had the following investments and maturities:
SCHEDULE OF INVESTMENTS BY MATURITIES
AS OF DECEMBER 31, 2020
Investment maturities
Less than 1 to 2 Greater than
Investment Type Fair Value 1 year years 3 years
State Investment Pool $ 69,776,176 $ 69,776,176 $ $
$ 69,776,176 $ 69,776,176 $ $
Reconciliation of Government -Wide Statement of Net Position:
Key Bank checking account per books $
1,019,979
Key Bank deposit account
250
Key Bank PAEC checking account & change fund
1,200
Bank of America PAEC checking account
173,403
Petty cash/change fund/advance travel/investigative fund
38,550
Local Government Investment Pool
69,776,176
Less: cash & cash equivalents in fiduciary funds
(1,090,766)
Municipal Court Trust on books
262,314
Subtotal cash, cash equivalents, and investments
70,181,107
Cash with escrow agent
-
Total cash and investments, Government -Wide
Statement of Net Position $
70,181,107
Total Cash & Investments $ 70,181,107
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.
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, 2020, 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, 2020 City investments were 100% in LGIP.
Foreign Currency Risk
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, 2020, the City had the following investments at amortized cost:
S CHEWLE OF MVFS TMENTS AT AMORT 7-M COST
AS OF DECFIVIBER 31, 2020
Weighed Average
Investment Type Maturities (Days) Investments Total
State Treasurer's Investment Pool 46 Days $ 69,776,176 $ 69,776,176
$ 69,776,176 $ 69,776,176
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, 2020, the City had no investments measured at fair value.
Other Information
Below is a schedule of investments by fund type:
SCHEDULE OF INVESTMENTS BY FUND CATEGORY
AND INVESTMENT TYPE
AS OF DECEMBER 31, 2020
Fund Type
SIP
Total
General Fund $
12,901,952 $
12,901,952
Other Major Funds
12,674,212
12,674,212
Special Revenue Funds
8,303,714
8,303,714
Capital Projects Funds
8,426,182
8,426,182
Enterprise Funds
6,883,439
6,883,439
Internal Services Funds
19,511,626
19,511,626
Fiducia Funds
1,075,051
1,075,051
F� Total: $
69,776,176 $
69,776,176
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, 2020, the balance of property taxes
receivable recorded by the City was $211,555. Of this, $191,048 is recorded as deferred inflow of resources, since it was not
collected within the first 60 days of the end of 2020.
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 2020, the City's regular tax levy was $0.90261 per $1,000 on a 2019 assessed valuation of
$12,075,445,354 for a total regular levy of $11,224,365.
Deferred Inflow of Resources
The table below provides details of the deferred inflow of resources as reported on the fund financial statements.
DEFERRED INFLOW OF RESOURCES
AS OF DECENMER 31, 2020
Deferred Inflow
General Total
General Govt
Property tax
$ 191,048 $ 191,048
Total by Fund:
$ 191,048 $ 191,048
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, 2020
Total
Surface
Dumas
PAEC Nonmajor
General
Water
Bay
Total
Unearned Revenues
General Street Oper. Transportation Gov't
Govt
Mgmt
Centre
Proprietary
SWM fees
-
127,210
127,210
Commute Trip Reduction Grant
73,893 -
73,893
-
-
PAEC Fees
- 67,376
67,376
-
Recreation programs / facility
65,280 - - 145,088
210,368
223,899
223,899
rentals/ other
Total by F
351 109
Receivables & Due from Other Governments
The receivables for the fiscal year ended December 31, 2020 on the government -wide statement of net position are detailed in
the following schedule.
RECEIVABLES & DUE FROM OTHER GOVERNMENTS AS OF DECEMBER 31, 2020
Receivable
General
Street
Utility Tax
Performing Arts &
Event Ctr. Oper.
Transport-
ation
Nonmajor
Gov't
Proprietary
Total
Property tax
$ 211,555
$
$
$
$
$
$
$ 211,555
Admissions tax
16
16
Real Estate Excise tax
-
1,477,409
1,477,409
Utility tax
-
1,693,068
-
1,693,068
Gambling tax
15,811
-
15,811
Franchise Fee
281,950
-
281,950
Recreation programs/
Facilities
5,269
27,460
25,750
58,479
Grants/contributions/utility
construction contract receivable
475,676
166,362
-
720,329
568,670
41,651
1,972,689
Off Duty security & Other
receivable
259,108
-
-
-
89,485
-
348,593
State Shared revenue
3,879,660
81,593
402
24,362
254,585
-
4,240,603
Surface Water Management fees
-
-
-
-
-
133,324
133,324
Total by Fund: $ 5,129,044
$ 247,955
$ 1,693,470
$ 27,460
$ 744,692
$ 2,415,899
$ 174,975
$ 10,433,495
NOTE 8 — CAPITAL ASSETS
Capital assets activity for the year ended December 31, 2020 is as follows:
CAPITAL ASSETS
AS OF DECEMBER 31, 2020
Adjusted Beginning
Governmental Activity Balance Additions Deletions Ending Balance
12/31/2020
1/1/2020
Capital Assets, not being depreciated:
Land
$283,686,722
$20,387
$ -
$283,707,109
Construction in progress
23,780,639
5,766,474
(14,349,735)
15,197,378
Total capital assets, not being depreciated:
$307,467,361
$5,786,861
$ (14,349,735)
$298,904,487
Capital assets, being depreciated:
Buildings
72,887,441
-
-
72,887,441
Improvements other than buildings
27,229,887
1,423,019
-
28,652,906
Infrastructure
187,390,546
13,235,932
(6,564)
200,619,914
Machinery & equipment
20,452,506
2,474,552
(946,428)
21,980,630
Total capital assets, being depreciated:
307,960,380
17,133,503
(952,992)
324,140,891
Less accumulated depreciation for:
Buildings
(26,355,575)
(3,596,799)
-
(29,952,373)
Improvements other than buildings
(20,102,247)
(609,747)
-
(20,711,994)
Infrastructure
(80,066,132)
(5,074,134)
2,316
(85,137,950)
Machinery & equipment
(13,652,236)
(1,403,137)
937,359
(14,118,014)
Total accumulated depreciation:
(140,176,190)
(10,683,816)
939,675
(149,920,331)
Total assets being depreciated, net
167,784,190
6,449,687
(13,317)
174,220,560
Governmental activities capital assets, net
$475,251,552
$12,236,548
($14,363,052)
$473,125,048
Adjusted Beginning
Ending Balance
Business -Type Activities
Balance
Additions
Deletions
12/31/2020
1/1/2020
Capital Assets, not being depreciated:
Land
$11,340,293
$ -
$ -
$11,340,293
Construction in progress
3,821,857
23,504
(3,783,466)
61,895
Total capital assets, not being depreciated:
$15,162,150
23,504
(3,783,466)
11,402,188
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total capital assets, being depreciated:
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total accumulated depreciation:
Total assets being depreciated, net
4,505,348 8,965
- 4,514,313
4,229,931 -
- 4,229,931
63,938,190 3,905,498
- 67,843,688
198,794 15,840
- 214,634
72,872,262 3,930,303 - 76,802,565
(3,722,791)
(49,858)
- (3,772,649)
(359,036)
(42,299)
- (401,335)
(16,933,347)
(639,382)
- (17,572,729)
(129,749)
(6,636)
- (136,385)
(21,144,923)
(738,175)
- (21,883,098)
51,727,339 3,192,128 - 54,919,467
Business -Type activities capital assets, net $66,889,489 $3,215,632 ($3,783,466) $66,321,655
Page 61
At the end of 2020, 19 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, 2020, are as follows:
AS OF DECEMBER 31, 2020
Governmental Activities Projects
Construction Remaining
in progress Commitment
Mirror Lake Park - Playgrounds
$ 134,778 $ -
Gates for Celebration and Town Square Park
41,548 -
1 Oth Avenue SW / SW 344th St: SW Campus Drive - 21st Ave SW
318,532 -
SW 336th Way / SW 340th St: 26th PI SW - Hoyt Rd
255,948 -
S 344th Way @ Weyerhaeuser Way S
281,685 -
21 st Ave S Pedestrian Connection Project
3,199,637 -
Adaptive Traffic Control System Project Ph I
1,711,224
-
City Center Access Ph I Project
3,083,221
500,000
Street Light LED Conversion Project
2,657,310
160,000
SR509 9th PI South to 1 lth PI S Pedestrian Improvement Project
1,390,082
-
SR509 SW 312th Street - 21st
234,619
1,800,000
Adaptive Traffic Control Ph III
708,320
-
47th Ave SW & SW Dash Point Rd Compact
172,821
550,000
Horizontal Curve Warning Signs
99,468
400,000
Pac Hwy Non -Motorized Corr - 16th Ave S
419,731
865,000
Citywide Greenway Plan
222,355
200,000
S 314th St Improvements
37,961
125,000
Citywide Variable Lane Use Control Signal
209,168
202,000
Joint Operations and Maintenance Facility
18,970
250,000
Total Governmental Activities
$ 15,197,378 $
5,052,000
Depreciation expense was charged to functions/programs of the primary government as follows:
CAPITAL ASSETS DEPRECIATION BY TYPE
AS OF DECEMBER 31, 2020
Governmental and Internal Service Activities
General Government
$147,058
Security of Persons & Property
1,262,891
Transportation
5,358,195
Physical Environment
14,266
Economic Environment
1,782,416
Health
57,624
Culture & Recreation
2,061,367
Total Depreciation -Governmental Activities
$10,683,816
Business -Type Activities
Utilities - Surface Water Management
$722,783
Culture & Recreation - Dumas Bay Centre
15,392
Total Depreciation - Business -Type Activities
$ 738,175
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 2020:
Aggregate Pension Amounts —All Plans
Pension liabilities
($5,640,462)
Pension assets
$7,649,045
Deferred outflows of resources
$3,812,651
Deferred inflows of resources
($3,240,794)
Pension expense/expenditures
$495,269
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 annual comprehensive financial report (ACFR) that includes financial statements and required
supplementary information for each plan. The DRS ACFR 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 2020 were as follows:
PERS Plan 1
Actual Contribution Rates
Employer
Employee*
January — August 2020
PERS Plan 1
7.92%
6.00%
PERS Plan 1 UAAL
4.76%
Administrative Fee
0.18%
Total
12.86%
6.00%
September— December 2020
PERS Plan 1
7.92%
6.00%
PERS Plan 1 UAAL
4.87%
Administrative Fee
0.18%
Total
12.97 %
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 $797,876 to PERS Plan 1 for the year ended December 31,
2020.
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.
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 2020 were as follows:
PERS Plan 2/3
Actual Contribution Rates
Employer 2/3
Employee 2*
January — August 2020
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%
September— December 2020
PERS Plan 2/3
7.92%
7.90%
PERS Plan 1 UAAL
4.87%
Administrative Fee
0.18%
Employee PERS Plan 3
Varies
Total
12.97%
7.90%
* For employees participating in Judicial Benefit Multiplier (JBM), the contribution rate was 19.75%.
The City of Federal Way's actual PERS plan contributions were $797,876 to PERS Plan 1 and $1,295,038 to PERS Plan 2/3 for
the year ended December 31, 2020.
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% in 2020.
Page 65
The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2020 were as follows:
LEOFF Plan 2
Actual Contribution Rates
Employer
Employee
January — December 2020
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 $721,881 for the year ended December 31, 2020.
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, 2020, the state contributed $76,297,643
to LEOFF Plan 2. The amount recognized by the City of Federal Way as its proportionate share of this amount is $469,041.
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed
in 2020 with a valuation date of June 30, 2019. The actuarial assumptions used in the valuation were based on the results of the
Office of the State Actuary's (OSA) 2013-2018 Experience Study and the 2019 Economic Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2019 actuarial valuation report. The TPL
was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2020. Plan liabilities were rolled
forward from June 30, 2019, to June 30, 2020, 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 developed using the Society of Actuaries' Pub. H-2020 mortality rates, which vary by member status, as
the base table. The OSA applied age offsets for each system, as appropriate, to better tailor the mortality rates to the
demographics of each plan. OSA applied the long-term MP-2017 generational improvement scale, also developed by the Society
Actuaries, to project mortality rates for every year after the 2010 base table. 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 its demographic assumptions based on the results of its latest demographic experience study. See OSA's
2013-2018 Demographic Experience Study at leg.wa.gov/osa.
• OSA updated the Early Retirement Factors and Joint -and -Survivor factors used in its model to match the ones
implemented by DRS on October 1, 2020. These factors are used to value benefits for members who elect to retire
early and for survivors of members that die prior to retirement.
• The valuation includes liabilities and assets for Plan 3 members purchasing Total Allocation Portfolio annuities when
determining contribution rates and funded status.
• OSA simplified its modeling of medical premium reimbursements for survivors of duty -related deaths in LEOFF 2.
• OSA changed its method of updating certain data items that change annually, including the public safety duty -related
death lump sum and Washington state average wage. OSA set these values at 2018 and will project them into the future
using assumptions until the next Demographic Experience Study in 2025. See leg.wa.gov/osa for more information on
this method change.
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 was completed to test whether each pension plan's fiduciary net position was
sufficient to make all projected future benefit payments for current plan members. Based on OSA's assumptions, the pension
plans' fiduciary net position 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
(CMA's) and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB
uses the CMA's and their target asset allocation to simulate future investment returns at various future times.
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, 2020, 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
$4,826,259
$3,853,125
$3,004,453
PERS 2/3
$11,121,281
$1,787,336
$(5,899,173)
LEOFF 2
$(151,428)
$(7,649,045)
$(13,788,097)
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, 2020, the City of Federal Way's reported a total pension liability of $5,640,461 and total pension net asset of
$7,649,045 for its proportionate share of the net pension liabilities as follows:
It Liability (or Asset)
PERS 1
$3,853,125
PERS 2/3
$1,787,337
LEOFF 2
$(7,649,045)
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
$(7,649,045)
LEOFF 2 — State's proportionate share of the net pension
liability/(asset) associated with the employer
$(4,890,984)
TOTAL
$(12,540,029)
At June 30, the City of Federal Way proportionate share of the collective net pension liabilities was as follows:
Proportionate
Share 6/30/19
Proportionate
Share 6/30/20
Change in Proportion
PERS 1
0.113856%
0.109137%
(0.004719)%
PERS 2/3
0.144555%
0.139751%
(0.004804)%
LEOFF 2
0.393513%
0.374980%
(0.018533)%
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 2020, the state of Washington contributed 39 percent of LEOFF 2 employer contributions pursuant to RCW
41.26.725 and all other employers contributed the remaining 61 percent of employer contributions.
The collective net pension liability (asset) was measured as of June 30, 2020, and the actuarial valuation date on which the total
pension liability (asset) is based was as of June 30, 2019, with update procedures used to roll forward the total pension liability
to the measurement date.
Pension Expense
For the year ended December 31, 2020, the City of Federal Way recognized pension expense as follows:
Pension Expense
PERS 1
$(8,654)
PERS 2/3
$156,424
LEOFF 2
$347,499
TOTAL
$495,269
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2020, 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
$(21,458)
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
$405,345
$0
TOTAL
1 $405,345
$(21,458)
PIERS 2/3
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$639,840
$(233,996)
Net difference between projected and actual
investment earnings on pension plan investments
$0
$(90,771)
Changes of assumptions
$25,457
$(1,220,905)
Changes in proportion and differences between
contributions and proportionate share of contributions
$18,239
$(170,458)
Contributions subsequent to the measurement date
$653,048
$
TOTAL
1 $1,336,584
$(1,706,129)
LEOFF 2
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$1,058,372
$(135,663)
Net difference between projected and actual
investment earnings on pension plan investments
$0
$(85,255)
Changes of assumptions
$11,081
$(1,184,411)
Changes in proportion and differences between
contributions and proportionate share of contributions
$639,159
$(107,878)
Contributions subsequent to the measurement date
$362,110
$0
TOTAL
$2,070,722
$(1,513,207)
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, 2021. 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
2021
$(97,353)
2022
$(3,062)
2023
$29,705
2024
$49,257
2025
$0
Thereafter
$0
Total
$(21,453)
Year ended
December 31:
PERS 2/3
2021
$(765,807)
2022
$(201,446)
2023
$7,598
2024
$132,722
2025
$(92,959)
Thereafter
$(102,701)
Total
$(1,002,594)
Year ended
December 31:
LEOFF 2
2021
$(494,179)
2022
$(15,429)
2023
$173,461
2024
$316,177
2025
$8,841
Thereafter
$206,535
Total
$195,406
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 2020 on average, there were a total of 358 individuals covered by this system. As of the end of the year, there were 339
active employees of the City and two were drawing retirement benefits. During the year 36 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 2020 was $30,771,249 and excluding PERS, LEOFF, FWRS, deferred comp, flex plan, and section 125
covered payrolls was $26,105,713. Total City payroll was $31,811,522. Actual City contributions for the year were $1,548,643.
Actual employee contributions were $1,846,461. 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, 2020 were $1,157,764. 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 (NWPS) 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 2020. The fund balance
for the Risk Fund as of 12/31/2020 is $1.20 million.
Page 70
Cyber Security Program
The City of Federal Way employs 1) computer workstation endpoint virus protection on all network connected PC's that is
updated as soon as new definitions are released, 2) system network "next generation" firewall for perimeter protection. In
addition the City has cyber liability insurance of $1 million with a $25K deductible per type of breach. An audit and review of
systems was completed in 2019 and a report was produced and presented to City Council in 2020. Through this process the
Mayor and City Council approved several security enhancement projects for biennial budget 2021/2022.
The following is a summary of coverage in force in 2020.
S C13EDULE OF INSURANCE IN FORCE
AS OF DECEMBER 31, 2020
Company Policy Period Details of Cowra a LiabilityLimits
WCIA
1/l/2019 — 12/31/2020
General Liability (auto, general, police, e & o, employment
$25,000,000 per occurrence subject to annual aggregates and sub -limits. Deductible: zero
practices, & stop gap)
Limit$400,000,000 per occurrence. Sub-limits:$150,000,000 Earthquake per Occurrence;
WCIA
1/l/2020— 12/31/2020
Property Coverage
$150,000,000 Flood per Occurrence. Deductible: Earthquake 2% ofthe values involved,
subject to $250,000 min per occurrence. Flood $100,000,00 per occurrence. All other perils
$25,000 deductible.
Actual Cash Value, except optional replacement cost coverage. Deductible $1,000 per
WCIA
1/1/2020— 12/31/2020
Automobile Physical Damage for Scheduled Automobiles
occurrence for scheduled automobiles
$100,000,000 Maximum Limit; Sub -limits: $10,000,000 Business Interruption; $1,000,000 Extra
Expense; $500,000 Hazardous Waste. Deductible $10,000 Combined A❑ Coverage Expect.
WCIA
1/1/2020— 12/31/2020
Equipment Breakdown Coverage
Turbine Generator Unites, KP Motors, Pumps, and Deep Water Wells, KVA Transformers,
HP A/C and Refrigeration Systems and HP ICES and Generators >-500 HP
WCIA
1/l/2020— 12/31/2020
Pollution Liability
Limit $2,000,000 per condition; $10,000,000 total policy & aggregate limits; sub -limit
$250,000. Deductible: $100,000; 5 days
Crime/Fidelity (employee theft, forgery or alternation, on
WCIA
1/l/2020— 12/31/2020
premises, in transit, money orders and counterfeit money,
Deductible ranges from $10,000 to $50,000 with single limits coverage of $2,500,000.
computer crime, fund transfer fraud and claims expense)
WCIA
1/l/2020-12/31/2020
Cyberinsumnce
Limits $1,000,000per member with $10,000,000aggregate pool policy limit subject tosub-
limits. Deductible: $25,000 per type ofbreach.
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 2020 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).
Page 71
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).
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 41, 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. Valley Communications joint venture information can be found on
page 75.
The following schedules detail the long-term debt activity and balances of the City for GO Bonds, SCORE Bond, and Section
108 HUD Loan, Compensated Absences, and Net Pension Liability. Typically we have used the governmental funds on pages
29 and 30 to liquidate the net pension liabili , with the General Fund being the primary fund.
OUTSTANDING GENERAL OBLIGATION DEBT AND LONG-TERM LIABILITIES - BY TYPE
DECEMBER 31, 2020
Bond Rating Issue
Maturity Interest
Amount
Beginning
Amount
Amount
Ending
Description
at Issuance Date
Date Rate
Originally
Outstanding
Issued
Redeemed
Outstanding
Issued
Debt
Debt
Governmental Activities:
General Obligation Bonds:
A) 2017 Ltd Tax GO Bond'
- Nov 17, 17
Nov 27, 37 2.17
$ 6,000,000
$ 5,807,553
$
$ 391,181
$ 5,416,372
B) 2013 Refund Ltd/Community Center'
Aa3 Dec 01, 13
Dec 01, 33 2.67
12,415,000
9,380,000
530,000
8,850,000
C) 2019A LTGO Bond (SCORE)'
Aa2 Dec 11, 19
Dec 01, 38 2.75-5.00
10,945,000
10,945,000
380,000
10,565,000
D) 2019B LTGO Tax Bond (PAEC) 5
Aa2 Dec 11, 19
Dec 01, 29 1.95-2.65
4,840,000
4,840,000
430,000
4,410,000
Subtotal GO Bonds:
-
- -
34,200,000
30,972,553
1,731,181
29,241,372
Other Miscellaneous Debt -Intergovernmental:
F) 2019-A Section 108 HUD CP'
Mar 28, 19
Aug 01, 35 2.54 - 3.49
2,712,000
2,553,000
159,000
2,394,000
Subtotal miscellaneous:
-
-
2,712,000
2,553,000
159,000
2,394,000
Subtotal GO Bonds plus Misc.
36,912,000
33,525,553
1,890,181
31,635,372
Compensated absences
-
2,035,728
2,150,637
1,805,963
2,380,402
Net Pension Liability (NPL) for Pers 1,2, & 3
-
5,122,430
-
79,204
5,043,226
Subtotal GO bonds, misc., comp. absences, & NPL:
36,912,000
40,683,711
2,150,637
3,775,348
39,059,000
Business -Type Activities:
Compensated absences
-
94,812
117,170
90,032
121,950
Net Pension Liability (NPL) for Pets 1,2, & 3
659,859
-
62,623
597,236
Subtotal PWTFL, comp. absences, & NPL:
754,671
117,170
152,655
719,186
Grand Total All Long -Term Debt:
$ 36,912,000
$ 41,438,382
$ 2,267,807
$ 3,928,003
$ 39,778,186
' 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. Proceeds used to pay off the 2014 KeyBank Bond Anticipation Note. z The ending 2017 refunding Community bond premium is $134,197.70 with current year
amortization of $49,751.10. 3 Contract Loan 2016 Guarantee Assistance via HUD converted with variable rate to 2019-A HUD Certificate of Participation fixed rate. ° The
City issued 2019A Bond to defease 2009 SCORE Bond. 5 The City issued 2019E Bond to pay City for portion of PAEC construction on December 11, 2019. The ending SCORE
and PAEC bond premium is $1,701,132.10 with current year amortization of $13,535.60.
Page 72
SCHFA11 OFCHANGES INLONGTERMLIABIIITIF.S
PERIOD ENDED DECEMBER 31, 2020
Beginning
Ending
Outstanding
Additions
Reductions
Outstanding
Debt
Debt
Governmental Activities:
General Obligation Bonds
$ 30,972,553
$ -
$ (1,731,181)
$ 29,241,372
Other-intergovemmental debt
2,553,000
-
(159,000)
2,394,000
Compensated absences
2,035,728
2,150,637
(1,805,963)
2,380,402
Net Pension Liability (NPL) for Pets 1,2, & 3
5,122,430
-
(79,204)
5,043,226
Total Governmental Activities
40,683,711
2,150,637
(3,775,348)
39,059,000
Business -Type Activities:
Enterprise Funds
Compensated absences
94,812
117,170
(90,032)
121,950
Net Pension Liability (NPL) for Pets 1,2, & 3
659,859
-
(62,623)
597,236
Total Business -Type Activities
754,671
117,170
(152,655)
719,186
Total All Funds
$ 41,438,382
$ 2,267,807
$ 3,928,003
$ 39,778,186
OUTSTANDING GENERAL OBLIGATION DEBT AND LONG-TERM LIABILITIES - BY FOND
DECEMBER 31, 2020
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
$ 5,807,553 $
$ 391,181
$ 5,416,372
$ 399,716
B) 2013 Refund Ltd/Community Center
12,415,000
9,380,000
530,000
8,850,000
550,000
C) 2019A LTGO Bond (SCORE) 4
10,945,000
10,945,000
380,000
10,565,000
390,000
D 2019B LTGO Tax Bond (PAEC)s
4,840,000
4,840,000
430,000
4,410,000
450,000
Subtotal GO Bonds:
34,200,000
30,972,553
1,731,181
29,241,372
1,789,716
Other Miscellaneous Debt -Intergovernmental:
F) 2019-A Section 108 HUD CP3
2,712,000
2,553,000
159,000
2,394,000
159,000
Subtotal miscellaneous:
2,712,000
2,553,000
159,000
2,394,000
159,000
Subtotal GO Bonds plus Misc.
36,912,000
33,525,553
1,890,181
31,635,372
1,948,716
Compensated absences
-
2,035,728
2,150,637
1,805,963
2,380,402
178,813
Net Pension Liability L for Pers 1,2, & 3
-
5,122,430
-
79,204
5,043,226
na
Subtotal GO bonds, misc., corup. absences, & NPL:
36,912,000
40,683,711
2,150,637
3,775,348
39,059,000
2,127,529
Business -Type Activities:
Enterprise Funds:
Compensated absences
-
94,812
117,170
90,032
121,950
9,206
Net Pension Liability (NPL) for Pers 1,2, & 3
659,859
-
62,623
597,236
na
Subtotal PWTFL, comp. absences, & NPL:
-
754,671
117,170
152,655
719,186
9,206
Grant Total All Long -Term Debt:
$ 36,912,000
$ 41,438,382 $
2,267,807
$ 3,928,003
$ 39,778,186
$ 2,136,735
SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY
AS OF DECEMBER 31, 2020
Government Activities
General Governmental Debt
Grand Total
Year
Principal
Interest
Principal
Interest
P&I
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
$ 31 635,372
1 $ 8,008 506
j $ 31 635,372 1
$ 8,008,506
1 $ 39,643 878
Page 73
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'/2 percent of the valuation. The debt service on
unlimited tax debt is secured by excess property tax levies, whereas the debt service on limited tax debt is secured by property
taxes collected with the City's councilmanic levy. See page 136 for a detailed calculation of the valuation.
The City's legally remaining debt capacities as of December 31, 2020 are:
Computation of Limitation of Indebtedness 2020 1
General government (no vote required) $ 161,614,264
General government (3/5 majority vote required) 126,453,260
Parks and open space (3/5 majority vote required) 316,133,150
Utilities (3/5 majority vote required) 316,133,150
Total Capacity $ 920,333,825 1
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
$ 178,813
Noncurrent portion
2,201,589
Business -Type Activities:
Current portion
9,206
Noncurrent portion
112,744
Total Compensated absences
$ 2,502,352
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, 2020 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, 2020 were as follows:
Interfund Transfers In Out
Governmental Funds:
General Fund
Street Fund
Utility Tax Fund
Debt Service
Performing Arts & Event Center
Operations
Transportation
Performing Arts & Event Center
Nonmajor Governmental Funds
Proprietary Funds:
Surface Water Management
Dumas Bay Centre
Internal Service Funds
$ 8,146,895 $ 4,668,324
2,287,779 -
- 10,173,601
2,328,567 -
972,310 -
2,238,000 45,000
3,305,715 5,374,047
- 190,000
373,453 -
948,253 150,000
Total: $20,600,972 $20,600,972
The following describes the amounts transferred out during 2020:
General Fund:
• $1,695,849 to Street Fund to subsidize street maintenance and operations.
• $1,000,000 to Debt Service Fund to pay for SCORE debt principal and interest.
• $955,359 to Performing Art & Event Center to subsidize operations.
• $571,987 to Federal Way Community Center to subsidize operations.
• $260,371 to Dumas Bay Centre to subsidize operations.
• $184,758 to Traffic Safety Fund to subsidize operations.
Utility Tax Fund:
• $7,689,489 to General Fund for operation support.
• $823,253 to Risk Fund for claims.
• $591,896 to Federal Way Community Center Fund for operation support.
• $483,930 to Street Fund for operation support.
• $375,000 to Arterial Street Fund for overlay of residential streets.
• $113,082 to Dumas Bay Centre Fund for operation support.
• $80,000 to Unemployment Insurance Fund for to pay for claims of temporary laid off employees.
• $16,951 to Performing Art & Event Center to subsidize operations.
Transportation CIP Fund:
• $45,000 to Fleet & Equipment internal service fund for Community Development Inspector vehicle.
Nonmajor Funds:
• $457,406 from Traffic Safety Fund to General Fund for Police related services.
• $43,000 from Solid Waste & Recycling Fund to Street Fund for litter services.
• $100,000 from LIFT Funding to Transportation CIP Fund for Complete Street ADA Improvements.
• $1,328,567 from Real Estate Excise Tax (REET) Fund to Debt Service Fund for debt payments.
• $1,282,074 from REET Fund to Arterial Street for street overlay.
• $300,000 from REET Fund to Parks CIP Fund for major maintenance of parks facilities, playground equipment, and
Lakota soccer field.
• $1,863,000 from REET Fund to Street Construction Projects City Center Access, Pacific Hwy. Non -Motorized
Corridor — 16t' Ave. S., SW 356' Street Preservation, and Joint Operations & Maintenance Facility.
Surface Water Manage Fund:
• $190,000 to Street Fund & Transportation CIP Fund for landslide restoration and operational services.
Internal Service Funds:
0 $150,000 to Transportation CIP Fund for flagpole repair.
Page 75
Interfund loans for the year ended December 31, 2020 were as follows:
Interfund Loans Receivable Payable
General Fund $ 1,620,568 $ -
Special Revenue Funds:
Community Development Block Grant - 96,608
Capital Project Funds:
Street
1,523,960
Total Interfund Loans $ 1,620,568 $ 1,620,568
NOTE 13 — CONTRACTUAL OBLIGATIONS, CONTINGENCIES AND LITIGATION
As of December 31, 2020 there were minimal minor claims for damages and 4 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.
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 2020 cost distributions for the five member cities are as follows:
Dispatchable Percent
City
Calls
of Total
Kent
108,282
27.46%
Renton
85,717
21.74%
Auburn
84,806
21.51%
Tukwila
34,870
8.84%
Federal Way
80,647
20.45%
Total
394,322
100.00 %
Valley Com is governed by an Administration Board, composed of the Mayors or designated representatives from the five
participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Administration Board is authorized to establish
bylaws that govern procedures of the Board and Valley Com's general operations for the following functions: 1) Budget review
and recommendations to the legislative bodies of the member cities, and budget adoption after each legislative body has
approved the required financial participation for the ensuing year; 2) Approve appointment and/or discharge of the Director; 3)
Approve personnel policy and make final decisions on all major policy changes; and 4) Review and approves all contracts.
In addition, an Operating Board was established and consists of two members of each participating City's Public Safety
Departments, including the heads of such departments or their designees. The Operating Board performs the following
functions: 1) Oversees the general operation of Valley Com, and advises and makes recommendations to the Administration
Board; 2) Make recommendations on Director selection; 3) Presents proposed policies and budgets to the Administration Board;
and 4) Reviews disbursements of funds by the Director.
Page 76
The Director presents a proposed budget to the Operating Board on or before August 15 of each year. Said budget is then
presented to the Administrative Board by September 1 of each year. The Administration Board can make changes to the
proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each member city, in
accordance with the provisions of the interlocal agreement.
In May 1993 Valley Com entered into an agreement with King County to provide joint project management for the acquisition
and installation of 800-MHz emergency radio communications system approved by the voters of King County in conjunction
with a $57 million levy. In August 1993 Valley Com also entered into an Interlocal Cooperation Agreement with the sub-
regions of King County, Seattle, and Eastside Public Safety Communications, which governs the development and installation
of the new 800-MHz emergency radio system. Valley Com now provides emergency communication dispatch services to a
population of approximately 570,000.
Valley Com operates as an enterprise fund and is totally self-supporting through the implementation of user fees, and the primary
source of revenue is provided by charges for calls for service. The 800-MHz emergency radio communications system operated
by the agreement with King County is operated as a separate enterprise fund, and the Member Cities have no equity interest in
the contributed capital from this system.
The share of equity belonging to the five participating cities is shown below. Liabilities are the responsibility of the five
DarticiDatine cities in direct Dr000rtion to their eauitv position.
Balances in 2020
Kent
Renton
Auburn
Tukwila
Federal Way
Total
Equity @ January 1, 2020
$ 8,797,965 $
6,430,886
$ 6,633,681
$ 3,169,346
$ 5,451,595 $
30,483,473
Current year increase
766,590
606,843
600,390
246,866
570,949
2,791,638
Equity @ December 31, 2020
$ 9,564,555 $
7,037,729
$ 7,234,071
$ 3,416,212
$ 6,022,544 $
33,275,111
Percent of equity
28.74%
21.15%
21.74%
10.27%
18.10%
100.00%
Prior year's percent of equity
28.86%
21.10%
21.76%
10.40%
17.88%
100.00%
A complete set of financial statements is available from:
Valley Communications Center, 27519 108t' Avenue SE, Kent, WA 98030.
South Correction Entity
On September 4', 2018 the City Council decided to withdraw from the SCORE interlocal agreement effective on 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
10,565,000 as of 12/31/2020.
Joint Venture Reconciliation to Government Wide Financial Statements
Balance Balance
1/1/2020 Additions Reductions 12/31/2020
Valley Communications Center 5,451,595 570,949 - 6,022,544
Total Joint Venture Capital Assets 5,451,595 570,949 - 6,022,544
Total Investment in Joint Ventures $ 5,451,595 $ 570,949 $ - $ 6,022,544
Page 77
NOTE 15 — PRIOR PERIOD ADJUSTMENTS
Governmental -type capital asset activity prior period adjustment of $10.69M for Construction in progress is due to $3.78M
being incorrectly classified as governmental -type activity, and should be business -type activity, and $6.91M being
maintenance for SR99 Phase V project, and therefore not subject to capitalization.
Beg. Bal Prior Period Adj. Beg. Ending Bal.
Governmental Activity 1/1/2020 Adjustment Balance Additions Deletions 12/31/2020
Capital assets, not being depreciated:
Land
$ 283,686,722 $
- $ 283,686,722
$ 20,387 $
- $
283,707,109
Construction in progress
34,471,239
(10,690,600) 232780,639
5,766,474
(14,349,735)
15,197,378
Total capital assets, not being depreciated:
318,157,961
(10,690,600) 307,467,361
5,786,861
(14,349,735)
298,904,487
Capital assets, being depreciated
Buildings
72,887,441
72,887,441
-
72,887,441
Improvements other than buildings
27,229,887
27,229,887
1,423,019
28,652,906
Infrastructure
187,390,546
187,390,546
13,235,932
(6,564)
200,619,914
Machinery and equipment
20,452,506
20,452,506
2,474,552
(946,428)
21,980,630
Total capital assets, being depreciated:
307,960,380
- 307,960,380
17,133,503
(952,992)
324,140,891
Less accumulated depreciation for :
Buildings
(26,355,575)
(26,355,575)
(3,596,799)
(29,952,373)
Improvements other than buildings
(20,102,247)
(20,102,247)
(609,747)
(20,711,994)
Infrastructure
(80,066,132)
(80,066,132)
(5,074,134)
2,316
(85,137,950)
Machinery and equipment
(13,652,236)
(13,652,236)
(1,403,137)
937,359
(14,118,014)
Total accumulated depreciation:
(140,176,190)
(140,176,190)
(10,683,816)
939,675
(149,920,331)
Total assets being depreciated, net
167,784,190
- 167,784,190
6,449,687
(13,317)
174,220,560
Governmental activities capital assets, net $ 485,942,152 $ (10,690,600) $ 475,251,552 $ 12,236,548 $ (14,363,052) $ 473,125,048
Business -type capital asset activity prior period adjustment of $3.78M is for Construction in progress that was incorrectly
classified as governmental -type activity.
Beg. Bal Prior Period Adj. Beg. Ending Bal.
Business-Tvne Activities 1/1/2020 Adiustment Balance Additions Deletions 12/31/2020
Capital assets, not being depreciated:
Land
$11,340,293 $
- $11,340,293 $
- $
- $11,340,293
Construction in progress
38,391
3,783,466 3,821,857
23,504
(3,783,466) 61,895
Total capital assets, not being depreciated:
11,378,684
3,783,466 15,162,150
23,504
(3,783,466) 11,402,188
Capital assets, being depreciated
Buildings
4,505,348
- 4,505,348
8,965
4,514,313
Improvements other than buildings
4,229,931
4,229,931
-
4,229,931
Infrastructure
63,938,190
63,938,190
3,905,498
67,843,688
Machinery and equipment
198,794
198,794
15,840
214,634
Total capital assets, being depreciated:
72,872,262
- 72,872,262
3,930,303
- 76,802,565
Less accumulated depreciation for :
Buildings
(3,722,791)
- (3,722,791)
(49,858)
- (3,772,649)
Improvements other than buildings
(359,036)
- (359,036)
(42,299)
- (401,335)
Infrastructure
(16,933,347)
- (16,933,347)
(639,382)
- (17,572,729)
Machinery and equipment
(129,749)
- (129,749)
(6,636)
- (136,385)
Total accumulated depreciation:
(21,144,923)
- (21,144,923)
(738,175)
- (21,883,098)
Total assets being depreciated, net
51,727,339
- 51,727,339
3,192,128
- 54,919,467
Business Type activities capital assets, net
$ 63,106,023 $
3,783,466 $ 66,889,489 $
3,215,632 $
(3,783,466) $ 66,321,655
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, 2020. 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.
Starting May 1, 2020, the City of Federal Way started leasing Twin Lakes Police substation. Total cost for the lease was $5,240
for the year ended December 31, 2020. The lease of the substation expires April 30, 2021. 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 $201 - $844
depending upon the wages earned. At December 31", 2020 the City had $195,397 in reserve.
Unemployment compensation benefits
2019
2020
Unemployment reserve, Jan. 1st
$ 279,116 $
273,701
Unemployment compensation interest
4,219
1,165
Claim payments during the year
(9,634)
(79,469)
Unemployment reserve, Dec. 31st
$ 273,701 $
195,397
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 3 Pt, 2020 the City had $3,189,938
in reserve.
Health Insurance benefits
2019
2020
Health Insurance reserve, Jan. 1st
$ 2,940,232
$ 3,657,598
Health Insurance benefits
4,392,860
4,312,444
Health Insurance Employee Contributions
222,779
212,627
Health Insurance COBRA Contributions
34,319
113,387
Health Insurance interest
50,753
14,856
Health Insurance Recovery -Stop Loss
281,299
714,375
Prescription Claimpayments during the year
(772,307)
(1,032,222)
Medical Claimpayments during the year
(2,518,705)
(3,488,607)
Insurance -Stop Loss
(567,344)
(699,917)
Other services and charges
(406,288)
(614,601)
Health Insurance reserve, Dec. 3 1 s t
$ 3,657,598
$ 3,189,938
Page 79
NOTE 18 — ACCOUNTING AND REPORTING CHANGES
The implementation of GASB Statement 84 for Fiduciary Activities resulted in amounts previously reported in the General
Fund, now being reported in a custodial fund. This statement gave guidance regarding the identification of fiduciary activities
for financial reporting purposes. This resulted in an effect of change in accounting principle of $395,462 due to moving items
held for judgement, seizure funds, court remittances, and due to other governments from the General Fund to a custodial fund.
GASB statement 83, GASB statement 88 and GASB statement 90 were not relevant and/or material to City of Federal Way.
NOTE 19 — COVID-19 Pandemic
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 4m
The City is still assessing the impact of this pandemic. 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
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REQUIRED SUPPLEMENTARY
INFORMATION
Citv of Federal Wav
Schedule of Proportionate Share of the Net Pension Liability
PERS 1
As of June 30, 2020
Last 10 Fiscal Years*
2015
2016
2017
2018
2019
2020
Employer's proportion of the net pension liability (asset) %
0.110831%
0.114008 %
0.114547%
0.115857%
0.113856%
0.109137%
Employer's proportionate share of the net pension
liability $
5,797,492
6,122,767
5,435,344
5,174,213
4,378,167
3,853,125
TOTAL $
5,797,492
6,122,767
5,435,344
5,174,213
4,378,167
3,853,125
Covered payroll $
12,744,440
13,650,352
14,496,336
15,317,923
15,564,017
16,370,986
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%
23.54%
Plan fiduciary net position as a percentage of the total
pension liability %
59.10%
57.03%
61.24%
63.22%
67.12%
68.64%
Notes to Schedule:
* Employer's covered payroll increased by $807K, but net pension
liability
decreased by $0.53 million. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability
PERS2-3
As of June 30, 2020
Last 10 Fiscal Years*
2015
2016
2017
2018
2019
2020
Employer's proportion of the net pension liability (asset) %
0.143122%
0.146079%
0.147025%
0.146710%
0.144555%
0.139751%
Employer's proportionate share of the net pension
liability $
5,113,831
7,354,962
5,108,416
2,504,943
1,404,121
1,787,336
TOTAL $
5,113,831
7,354,962
5,108,416
2,504,943
1,404,121
1,787,336
Covered payroll $
12,744,440
13,650,352
14,496,336
15,317,923
15,564,017
16,370,986
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%
10.92%
Plan fiduciary net position as a percentage of the total
pension liability %
89.20%
85.82%
90.97%
95.77%
97.77%
97.22%
Notes to Schedule:
* Employer's covered payroll increased by $807K, and net pension liability
increased by $0.38 million. Additional years information will be displayed as
it becomes available.
Citv of Federal Wav
Schedule of Proportionate Share of the Net Pension Liability (Asset)
LEOFF2
As of June 30, 2020
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
2020
Employer's proportion of the net pension liability (asset) %
0.427847% 0.415772%
0.434711%
0.397656%
0.393513%
0.374980%
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)
(7,649,045)
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)
(4,890,984)
TOTAL $
(7,304,980) (3,994,781)
(9,945,472)
(13,300,513)
(15,086,566)
(12,540,029)
Covered payroll $
12,477,707 12,625,740
13,610,662
13,157,989
13,865,920
14,177,786
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%
-53.95%
Plan fiduciary net position as a percentage of the total pension
liability %
111.67% 106.04%
113.36%
118.50%
119.43%
115.83%
Notes to Schedule:
* Employer's covered payroll increased by $312K and net pension asset
decreased by $1.5M. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contributions
PERS 1
As of December 31, 2020
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
2020
Statutorily or contractually required contributions
$
584,359 663,133
745,500
792,384
811,218
797,876
Contributions in relation to the statutorily or contractually
required contributions
$
(584,359) (663,133)
(745,500)
(792,384)
(811,218)
(797,876)
Contribution deficiency (excess)
$
Covered Payroll
$
13,309,318 13,887,684
15,134,713
15,255,177
16,208,573
16,459,407
Contributions as a percentage of covered payroll
%
4.39% 4.77%
4.93%
5.19%
5.00%
4.85I
Notes to Schedule:
* Employer's covered payroll increased b $251 K. Additional years information will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contribution
PERS 2-3
As of December 31, 2020
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
2020
Statutorily or contractually required contributions
$
750,485 866,073
1,034,441
1,154,906
1,247,242
1,295,038
Contributions in relation to the statutorily or contractually
required contributions
$
(750,485) (866,073)
(1,034,441)
(1,154,906)
(1,247,242)
(1,295,038)
Contribution deficient excess
$
Covered Payroll
$
13,309,318 13,887,684
15,134,713
15,255,177
16,208,573
16,459,407
Contributions as a percentage of covered payroll
%
5.64% 6.24%
6.83%
7.57%
7.69%
7.87%
Notes to Schedule:
* Employer's covered payroll increased by $251K. Additional years information
will be displayed as it becomes available.
City of Federal Way
Schedule of Employer Contribution
LEOFF2
As of December 31, 2020
Last 10 Fiscal Years*
2015 2016
2017
2018
2019
2020
Statutorily or contractually required contributions
$
625,331 669,609
688,577
702,132
735,539
721,881
Contributions in relation to the statutorily or contractually
required contributions
$
(625,331) (669,609)
(688,577)
(702,132)
(735,539)
(721,881)
Contribution deficiency (excess)
$
Covered Payroll
$
12,382,722 13,274,725
13,365,190
13,373,925
14,142,286
14,018,688
Contributions as a percentage of covered payroll
%
5.05% 5.04%
5.15%
5.25%
5.20%
5.15%
Notes to Schedule:
* Employer's covered payroll decreased by $124K Additional years
information will be displayed as it becomes available.
Combining Statement — Nonmajor Governmental Funds' Description
For the Year Ended December 31, 2020
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 Affordable and Supportive Housing Sales and Use Tax Fund accounts for the receipt of sales tax passed in Senate
House Bill 1406 RCW 82.14.540. This sale tax is a credit against the state sales tax rate of 6.5%, therefore it will not
increase the tax rate for consumers. This is a restricted revenue source that can be used by local governments for investments
in affordable and supportive housing.
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 '/2% motor vehicle fuel tax receipts which are restricted in use to the construction and maintenance of paths and trails
within City right-of-way. In August 2013, King County voters approved a new $0.1877, six -year, inflation adjusted property
tax lid lift to expand park and recreation opportunities. Seven percent of the County levy proceeds will be distributed to
cities for acquisition and development of open space and natural lands and city trail projects that support connections to the
regional trail system.
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, 2020
ASSETS
Cash and Cash Equivalents
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
Interf ind loans payable
Unearned revenue
TOTAL LIABILITIES
Fund Balance:
Restricted
Committed
TOTAL FUND BALANCES
Special Capital
Revenue Projects Total
$ 8,426,146 $ 8,549,356 $ 16,975,502
- 1,477,478 1,477,478
85,986 - 85,986
787,064 36,122 823,186
9,299,196 10,062,956 19,362,152
462,571
250 462,821
150,693
- 150,693
-
1,738 1,738
36,663
- 36,663
96,608
- 96,608
145,088
- 145,088
891,623
1,988 893,611
4,985,045
9,169,682
14,154,727
3,422,528
891,286
4,313,814
8,407,573
10,060,968
18,468,541
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 9,299,196 $ 10,062,956 $ 19,362,152
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2020
Affrd. & Supprt.
Special
Arterial
Housing Sales
Solid Waste
Contracts/
Hotel/Motel
Street
& Use Tax
Recycling
Studies
Lodging Tax
ASSETS
Cash and Cash Equivalents $
1,289,077
$ 113,661
$ 125,704
$ 800,559
$ 1,434,867
Receivables (net):
Accounts and contracts
-
-
42,875
17,359
-
Due from other governments
178,987
25,310
89,277
-
13,495
TOTAL ASSETS
1,468,064
138,971
257,856
817,918
1,448,362
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
21,969
-
32,200
-
-
Accounts/payroll payable
9,349
-
12,106
-
-
Deposits payable
-
-
-
-
-
Interfund loans payable
-
-
-
-
-
Unearned revenue
-
-
-
-
-
TOTAL LIABILITIES
31,318
-
44,306
-
-
Fund Balance:
Restricted
1,061,746
138,971
-
817,918
1,448,362
Committed
375,000
-
213,550
-
-
TOTAL FUND BALANCES
1,436,746
138,971
213,550
817,918
1,448,362
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $
1,468,064
$ 138,971
$ 257,856
$ 817,918
$ 1,448,362
ASSETS
Cash and Cash Equivalents
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
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2020
Federal way
Community
Paths and
Community
Traffic
Development
Trails
Technology
Center
Safety
Block Grant
Reserve
Total
$ 1,709,027
$ 1,341,748
$ 6,869
$ 1,487,461
$ 117,173 $ 8,426,146
25,752
-
-
-
- 85,986
-
-
479,393
602
- 787,064
1,734,779
1,341,748
486,262
1,488,063
117,173 9,299,196
16,292
43,052 348,884
36,736
82,537 9,965
36,663
- -
-
- 96,608
145,088
- -
234,779
125,589 455,457
- 174 462,571
- 150,693
- - 36,663
96,608
- - 145,088
- 174 891,623
Fund Balance:
Restricted - - 29,985 1,488,063 - 4,985,045
Committed 1,500,000 1,216,159 820 - 116,999 3,422,528
TOTAL FUND BALANCES 1,500,000 1,216,159 30,805 1,488,063 116,999 8,407,573
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 1,734,779 $ 1,341,748 $ 486,262 $ 1,488,063 $ 117,173 $ 9,299,196
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2020
Real Estate
Excise Tax
Downtown
City
Capital Project
Fund
Redevelopment
Facilities
Parks Reserve
Total
ASSETS
Cash and Cash Equivalents
$ 2,536,711
$ 3,432,523
$ 290,105
$ 1,920,155 $ 369,862
$ 8,549,356
Receivables (net):
Taxes
1,477,409
69
-
- -
1,477,478
Due from other governments
-
36,122
36,122
TOTAL ASSETS
4,014,120
3,468,714
290,105
1,920,155 369,862
10,062,956
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable 250 250
Retainage payable 1,738 1,738
TOTAL LIABILITIES 1,988 1,988
Fund Balance:
Restricted 4,014,120 3,468,714
30,501
1,656,347
- 9,169,682
Committed - -
259,604
261,820
369,862 891,286
TOTAL FUND BALANCES 4,014,120 3,468,714
290,105
1,918,167
369,862 10,060,968
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 4,014,120 $ 3,468,714
$ 290,105
$ 1,920,155 $
369,862 $ 10,062,956
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For Year Ended December 31, 2020
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
$ 540,389
$ 4,494,652
$ 5,035,041
1,501,092
1,000,000
2,501,092
1,710,359
84,745
1,795,104
2,156,205
-
2,156,205
37,015
47,888
84,903
78,931
-
78,931
6,023,991
5,627,285
11,651,276
44,831
- 44,831
1,481,068
- 1,481,068
2,493,701
- 2,493,701
537,419
- 537,419
28,785
- 28,785
709,868
- 709,868
1,367,316
29,205 1,396,521
159,000
- 159,000
76,216
- 76,216
6,141
188,225 194,366
6,904,345
217,430 7,121,775
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (880,354) 5,409,855 4,529,501
OTHER FINANCING SOURCES (USES)
Transfers in
3,005,715
300,000
3,305,715
Transfers out
(500,406)
(4,873,641)
(5,374,047)
TOTAL OTHER FINANCING
SOURCES (USES)
2,505,309
(4,573,641)
(2,068,332)
NET CHANGE IN FUND BALANCES
1,624,955
836,214
2,461,169
FUND BALANCES - BEGINNING
6,782,618
9,224,754
16,007,372
FUND BALANCES - ENDING
$ 8,407,573
$ 10,060,968
$ 18,468,541
Page 91
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE
FUNDS
For Year Ended December 31, 2020
Affrd. & Supprt.
Special
Arterial
Housing Sales
Solid Waste
Contracts/
Hotel/Motel
Street
& Use Tax
Recycling
Studies
Lodging Tax
REVENUES
Taxes $
-
$ 138,778
$ -
$ -
$ 120,482
Intergovernmental
462,384
-
89,277
-
-
Service charges and fees
562,703
-
509,311
71,496
-
Fines and forfeitures
-
-
-
-
-
Interest
2,786
193
910
3,979
7,182
Other
-
-
-
-
-
TOTAL REVENUES
1,027,873
138,971
599,498
75,475
127,664
EXPENDITURES
Current:
General government
-
-
-
343
-
Security of persons and property
-
-
-
-
Transportation
1,910,468
-
-
Physical environment
-
-
537,419
-
Economic environment
-
-
-
28,785
Health
-
-
-
-
-
Culture and recreation
-
-
-
-
Debt service:
Principal
-
-
-
-
-
Interest/fiscal charges/admin fees
-
-
-
-
-
Capital outlay
-
-
-
6,141
-
TOTAL EXPENDITURES
1,910,468
-
537,419
6,484
28,785
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (882,595)
138,971
62,079
68,991
98,879
OTHER FINANCING SOURCES (USES)
Transfers in
1,657,074
-
-
-
-
Transfers out
-
-
(43,000)
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
1,657,074
-
(43,000)
-
-
NET CHANGE IN FUND BALANCES
774,479
138,971
19,079
68,991
98,879
FUND BALANCES - BEGINNING
662,267
194,471
748,927
1,349,483
FUND BALANCES - ENDING $
1,436,746
S 138,971
$ 213,550
$ 817,918
$ 1,448,362
Page 92
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2020
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
$ - $ - $ - $ 281,129 $ - $ 540,389
940,606 8,825 - 1,501,092
408,623 - - - 158,226 1,710,359
- 2,156,205 - - - 2,156,205
7,611 7,434 - 6,672 248 37,015
78,931 - - - - 78,931
495,165 2,163,639 940,606 296,626 158,474 6,023,991
- - - 44,488 44,831
- 1,481,068 - - - 1,481,068
583,233 - - - 2,493,701
- - - - - 537,419
- 28,785
- - 709,868 - - 709,868
1,367,316 - - - - 1,367,316
- - 159,000 - - 159,000
76,216 - - 76,216
- - - - - 6,141
1,367,316 2,064,301 945,084 - 44,488 6,904,345
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (872,151) 99,338 (4,478) 296,626 113,986 (880,354)
OTHER FINANCING SOURCES (USES)
Transfers in
1,163,883
184,758
- - - 3,005,715
Transfers out
-
(457,406)
- - - (500,406)
TOTAL OTHER FINANCING
SOURCES (USES)
1,163,883
(272,648)
- - - 2,505,309
NET CHANGE IN FUND BALANCES
291,732
(173,310)
(4,478) 296,626 113,986 1,624,955
FUND BALANCES - BEGINNING
1,208,268
1,389,469
35,283 1,191,437 3,013 6,782,618
FUND BALANCES - ENDING
$ 1,500,000
$ 1,216,159 $
30,805 $ 1,488,063 $ 116,999 $ 8,407,573
Page 93
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For Year Ended December 31, 2020
Real Estate
Excise Tax
Downtown
City
Capital Project
Fund
Redevelopment
Facilities
Parks
Reserve
Total
REVENUES
Taxes
$ 4,467,111
$ 27,541
$
$ -
$
$ 4,494,652
Intergovernmental
-
1,000,000
-
1,000,000
Service charges and fees
-
-
84,745
84,745
Interest
20,772
14,419
1,510
9,261
1,926
47,888
Other
-
-
-
-
-
-
TOTAL REVENUES
4,487,883
1,041,960
1,510
94,006
1,926
5,627,285
EXPENDITURES
Current:
Culture and recreation
-
-
-
29,205
-
29,205
Capital outlay
-
188,225
188,225
TOTAL EXPENDITURES
-
-
-
217,430
-
217,430
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
4,487,883
1,041,960
1,510
(123,424)
1,926
5,409,855
OTHER FINANCING SOURCES (USES)
Transfers in
-
-
-
300,000
-
300,000
Transfers out
(4,773,641)
(100,000)
-
-
(4,873,641)
TOTAL OTHER FINANCING
SOURCES (USES)
(4,773,641)
(100,000)
-
300,000
-
(4,573,641)
NET CHANGE IN FUND BALANCES
(285,758)
941,960
1,510
176,576
1,926
836,214
FUND BALANCES - BEGINNING
4,299,878
2,526,754
288,595
1,741,591
367,936
9,224,754
FUND BALANCES - ENDING
$ 4,014,120
$ 3,468,714
$ 290,105
$ 1,918,167
$ 369,862
$ 10,060,968
ARTERIAL STREET
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 529,999
$ 529,999
$ 462,384
$ (67,615)
Service charges and fees
-
381,081
562,703
181,622
Interest
5,000
5,000
2,786
(2,214)
TOTAL REVENUES
534,999
916,080
1,027,873
111,793
EXPENDITURES
Current:
Transportation 1,515,064 2,692,120 1,910,468 781,652
TOTAL EXPENDITURES 1,515,064 2,692,120 1,910,468 781,652
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (980,065) (1,776,040) (882,595) 893,445
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
1,013,000 1,657,074 1,657,074 -
SOURCES (USES) 1,013,000 1,657,074 1,657,074 -
NET CHANGE IN FUND BALANCES 32,935 (118,966) 774,479 893,445
FUND BALANCES - BEGINNING 132,937 621,584 662,267 40,683
FUND BALANCES - ENDING $ 165,872 $ 502,618 $ 1,436,746 $ 934,128
Page 95
AFFRD. & SUPPRT. HOUSING SALES & USE TAX
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes $
- $ 41,000
$ 138,778
$ 97,778
Interest
- 20
193
173
TOTAL REVENUES
- 41,020
138,971
97,951
EXPENDITURES
Current:
Health
- 41,020
-
41,020
TOTAL EXPENDITURES
- 41,020
-
41,020
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
- -
138,971
138,971
OTHER FINANCING SOURCES (USES)
Transfers out
- -
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
- -
-
-
NET CHANGE IN FUND BALANCES
- -
138,971
138,971
FUND BALANCES - BEGINNING
- -
-
-
FUND BALANCES - ENDING $
- $ -
$ 138,971
$ 138,971
SOLID WASTE & RECYCLING
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 138,900
$ 127,714
$ 89,277
$ (38,437)
Service charges and fees
312,000
439,560
509,311
69,751
Interest
1,200
1,200
910
(290)
TOTAL REVENUES
452,100
568,474
599,498
31,024
EXPENDITURES
Current:
Physical environment 494,800 553,800 537,419 16,381
TOTAL EXPENDITURES 494,800 553,800 537,419 16,381
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (42,700) 14,674 62,079 47,405
OTHER FINANCING SOURCES (USES)
Transfers out - (43,000) (43,000) -
TOTAL OTHER FINANCING
SOURCES (USES) - (43,000) (43,000) -
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
(42,700) (28,326) 19,079 47,405
60,431 194,472 194,471 (1)
FUND BALANCES - ENDING $ 17,731 $ 166,146 $ 213,550 $ 47,404
Page 97
SPECIAL CONTRACTS/STUDIES
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Service charges and fees $ - $ - $ 71,496 $ 71,496
Interest - - 3,979 3,979
TOTAL REVENUES - - 75,475 75,475
EXPENDITURES
Current:
General government - -
343
(343)
Capital outlay 7,000 407,000
6,141
400,859
TOTAL EXPENDITURES 7,000 407,000
6,484
400,516
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (7,000) (407,000)
68,991
475,991
NET CHANGE IN FUND BALANCES
(7,000)
(407,000)
68,991 475,991
FUND BALANCES - BEGINNING
127,729
748,927
748,927 -
FUND BALANCES - ENDING $
120,729
$ 341,927 $
817,918 $ 475,991
HOTEL/MOTEL LODGING TAX
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 300,000 $ 300,000
$ 120,482
$ (179,518)
Interest
6,000 6,000
7,182
1,182
TOTAL REVENUES
306,000 306,000
127,664
(178,336)
EXPENDITURES
Current:
Economic environment 224,700 300,000 28,785 271,215
TOTAL EXPENDITURES 224,700 300,000 28,785 271,215
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 81,300 6,000 98,879 92,879
OTHER FINANCING SOURCES (USES)
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
81,300
6,000
98,879
92,879
1,059,546
1,329,006
1,349,483
20,477
$ 1,140,846
$ 1,335,006
$ 1,448,362
$ 113,356
FEDERAL WAY COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Service charges and fees
$ 1,590,875
$ 928,875
$ 408,623
$ (520,252)
Interest
10,000
10,000
7,611
(2,389)
Other
340,000
235,485
78,931
(156,554)
TOTAL REVENUES
1,940,875
1,174,360
495,165
(679,195)
EXPENDITURES
Current:
Culture and recreation 2,331,150 1,766,615 1,367,316 399,299
TOTAL EXPENDITURES 2,331,150 1,766,615 1,367,316 399,299
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (390,275) (592,255) (872,151) (279,896)
OTHER FINANCING SOURCES (USES)
Transfers in 312,000 883,987 1,163,883 279,896
TOTAL OTHER FINANCING
SOURCES (USES) 312,000 883,987 1,163,883 279,896
NET CHANGE IN FUND BALANCES (78,275) 291,732 291,732
FUND BALANCES - BEGINNING 1,578,926 1,208,268 1,208,268 -
FUND BALANCES - ENDING $ 1,500,651 $ 1,500,000 $ 1,500,000 $ -
Page100
TRAFFIC SAFETY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
REVENUES
Fines and forfeitures
Interest
TOTAL REVENUES
EXPENDITURES
Current:
Security of persons and property
Transportation
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
$ 3,802,000 $ 2,872,442
$ 2,156,205
$ (716,237)
13,500 13,500
7,434
(6,066)
3,815,500 2,885,942
2,163,639
(722,303)
1,960,415 1,960,415 1,481,068 479,347
680,224 680,224 583,233 96,991
2,640,639 2,640,639 2,064,301 576,338
1,174,861 245,303 99,338 (145,965)
Transfers in
-
184,758
184,758
-
Transfers out
(1,549,087)
(1,549,087)
(457,406)
1,091,681
TOTAL OTHER FINANCING
SOURCES (USES)
(1,549,087)
(1,364,329)
(272,648)
1,091,681
NET CHANGE IN FUND BALANCES
(374,226)
(1,119,026)
(173,310)
945,716
FUND BALANCES - BEGINNING
1,575,001
1,389,468
1,389,469
1
FUND BALANCES - ENDING
$ 1,200,775
$ 270,442
$ 1,216,159
$ 945,717
Page 101
COMMUNITY DEVELOPMENT BLOCK GRANT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Intergovernmental $ 668,900 $ 1,836,630 $ 940,606 $ (896,024)
TOTAL REVENUES 668,900 1,836,630 940,606 (896,024)
EXPENDITURES
Current:
Health
485,263
1,652,993
709,868
943,125
Debt service:
-
Principal
150,000
150,000
159,000
(9,000)
Interest/fiscal charges/admin fees
50,000
47,670
76,216
(28,546)
Capital outlay
-
-
-
-
TOTAL EXPENDITURES
685,263
1,850,663
945,084
905,579
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(16,363)
(14,033)
(4,478)
9,555
NET CHANGE IN FUND BALANCES (16,363) (14,033) (4,478) 9,555
FUND BALANCES - BEGINNING 16,363 35,284 35,283 (1)
FUND BALANCES - ENDING $ - $ 21,251 $ 30,805 $ 9
Page102
PATH & TRAILS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 160,000
$ 160,000
$ 281,129
$ 121,129
Intergovernmental
9,000
9,000
8,825
(175)
Interest
-
-
6,672
6,672
TOTAL REVENUES
169,000
169,000
296,626
127,626
EXPENDITURES
Current:
Culture and recreation
-
-
-
-
TOTAL EXPENDITURES
-
-
-
-
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
169,000
169,000
296,626
127,626
NET CHANGE IN FUND BALANCES
169,000
169,000
296,626
127,626
FUND BALANCES - BEGINNING
1,099:546
1,191,437
1,191,437
-
FUND BALANCES - ENDING
$ 1,268,546
$ 1,360,437
$ 1,488,063
$ 127,626
Page103
TECHNOLOGY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Service charges and fees
$ 20,000
$ 155,222
$ 158,226
$ 3,004
Interest
-
-
248
248
TOTAL REVENUES
20,000
155,222
158,474
3,252
EXPENDITURES
Current:
General government
-
67,100
44,488
22,612
TOTAL EXPENDITURES
-
67,100
44,488
22,612
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
20,000
88,122
113,986
25,864
NET CHANGE IN FUND BALANCES
20,000
88,122
113,986
25,864
FUND BALANCES - BEGINNING
20,000
3,013
3,013
-
FUND BALANCES - ENDING
$ 40,000
$ 91,135
$ 116,999
$ 25,864
Page104
,41k
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page105
Budget and Actual — Debt Service Fund Description
For the Year Ended December 31, 2020
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.
Page106
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2020
REVENUES
Interest
TOTAL REVENUES
EXPENDITURES
Current:
Debt service:
Principal
Interest/fiscal charges/admin fees
TOTAL EXPENDITURES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 30,000 $ 30,000 $ 22,909 $ (7,091)
30,000 30,000 22,909 (7,091)
1,253,881 1,878,881 1,731,181 147,700
1,091,076 1,091,076 984,281 106,795
2,344,957 2,969,957 2,715,462 254,495
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (2,314,957) (2,939,957) (2,692,553) 247,404
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
1,328,567 2,328,567 2,328,567 -
1,328,567 2,328,567 2,328,567 -
(986,390) (611,390) (363,986) 247,404
2,526,375 3,933,732 3,933,732 -
$ 1,539,985 $ 3,322,342 $ 3,569,746 $ 247,404
Page107
Combining Statement — Internal Service Fund's Description
For the Year Ended December 31, 2020
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.
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2020
Risk
Information
Support
Fleet and
Management
Systems
Services
Equipment
ASSETS
Current Assets
Cash and Cash Equivalents
$ 1,268,201
$ 4,033,305
$ 268,516
$ 7,643,112
Prepaid items
-
-
5,000
-
Receivables (net):
Accounts and contracts
150
29,100
-
-
TOTAL CURRENT ASSETS
1,268,351
4,062,405
273,516
7,643,112
Noncurrent assets
Capital assets:
Building/structures
-
-
-
-
Machinery/furniture/equipment
6,946,872
309,617
13,931,949
Less accumulated depreciation
(5,445,675)
(194,602)
(8,269,519)
TOTAL NONCURRENT ASSETS
1,501,197
115,015
5,662,430
TOTAL ASSETS
1,268,351
5,563,602
388,531
13,305,542
DEFERRED OUTFLOWS RELATED TO
PENSIONS
-
74,413
-
6,350
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
68,351
131,507
239
70,691
TOTAL CURRENT LIABILITIES
68,351
131,507
239
70,691
Long-term liabilities
Compensated absences payable
73,504
-
Net Pension Liability
241,614
20,785
TOTAL LONG-TERM LIABILITIES
- 315,118
-
20,785
TOTAL LIABILITIES
68,351 446,625
239
91,476
DEFERRED INFLOWS RELATED TO
PENSIONS
- 73,766
6,331
NET POSITION
Net Investment in capital assets
- 1,501,197
115,015
5,662,430
Unrestricted
1,200,000 3,616,427
273,277
7,551,655
TOTAL NET POSITION
$ 1,200,000 $ 5,117,624
$ 388,292
$ 13,214,085
Page109
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2020
Buildings and
Self Health
Unemployment
Furnishings
Insurance
Insurance
TOTAL
ASSETS
Current Assets
Cash and Cash Equivalents
$ 2,988,284
$ 3,303,303
$ 292,124
$ 19,796,845
Prepaid items
-
-
-
5,000
Receivables (net):
Accounts and contracts
-
-
-
29,250
TOTAL CURRENT ASSETS
2,988,284
3,303,303
292,124
19,831,095
Noncurrent assets
Capital assets:
Building/structures
16,545,121
-
-
16,545,121
Machinery/furniture/equipment
-
21,188,438
Less accumulated depreciation
(12,770,525)
(26,680,321)
TOTAL NONCURRENT ASSETS
3,774,596
11,053,238
TOTAL ASSETS
6,762,880
3,303,303
292,124
30,884,333
DEFERRED OUTFLOWS RELATED TO
PENSIONS
11,238
-
-
92,001
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
35,730
113,364
16,727
436,609
TOTAL CURRENT LIABILITIES
35,730
113,364
16,727
436,609
Long-term liabilities
Compensated absences payable
-
73,504
Net Pension Liability
39,619
302,018
TOTAL LONG-TERM LIABILITIES
39,619
375,522
TOTAL LIABILITIES
75,349
113,364 16,727 812,131
DEFERRED INFLOWS RELATED TO
PENSIONS
12,051
- 92,148
NET POSITION
Net Investment in capital assets
3,774,596
- - 11,053,238
Unrestricted
2,912,122
3,189,939 275,397 19,018,817
TOTAL NET POSITION
$ 6,686,718
$ 3,189,939 $ 275,397 $ 30,072,055
Page110
CHANGE IN NET POSITION
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2020
Risk Information Support Fleet and
Management Systems Services Equipment
OPERATING REVENUES:
Service charges and fees $ 1,103,040 $ 2,478,070 $ 121,211 $ 2,189,415
Miscellaneous 116,767 354
TOTAL OPERATING REVENUES 1,219,807 2,478,424 121,211 2,189,415
OPERATING EXPENSES:
Personnel services
926,885
-
84,970
Materials and supplies
-
352,322
12,095
452,619
Services and charges
45,352
1,023,326
54,237
529,521
Insurance
846,538
-
-
-
Claims
1,306,941
-
-
-
Depreciation
-
356,370
34,719
959,235
TOTAL OPERATING EXPENSES
2,198,831
2,658,903
101,051
2,026,345
OPERATING INCOME (LOSS)
(979,024)
(180,479)
20,160
163,070
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
155,158
Interest income
3,241
16,520
1,030
33,551
TOTAL NON -OPERATING REVENUES (EXPENSES)
3,241
16,520
1,030
188,709
INCOME (LOSS) BEFORE TRANSFERS
(975,783)
(163,959)
21,190
351,779
Capital contributions 301,541 575,784
Transfers in 823,253 45,000
Transfers out (150,000) -
(302,530)
137,582 21,190 972,563
NET POSITION - BEGINNING 1,502,530 4,980,042 367,102 12,241,522
NET POSITION - ENDING $ 1,200,000 $ 5,117,624 $ 388,292 $ 13,214,085
Page111
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2020
Buildings and Self Health Unemployment
Furnishings Insurance Insurance TOTAL
OPERATING REVENUES:
Service charges and fees $ 489,696 $ 5,352,832 $ $ 11,734,264
Miscellaneous 32,090 149,211
TOTAL OPERATING REVENUES 521,786 5,352,832 11,883,475
OPERATING EXPENSES:
Personnel services
170,552
-
1,182,407
Materials and supplies
49,122
4,175
870,333
Services and charges
332,305
5,831,172
79,469
7,895,382
Insurance
-
-
-
846,538
Claims
-
1,306,941
Depreciation
796,386
2,146,710
TOTAL OPERATING EXPENSES
1,348,365
5,835,347
79,469
14,248,311
OPERATING INCOME (LOSS)
(826,579)
(482,515)
(79,469)
(2,364,836)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
155,158
Interest income
12,824
14,856
1,165
83,187
TOTAL NON -OPERATING REVENUES (EXPENSES)
12,824
14,856
11165
238,345
INCOME (LOSS) BEFORE TRANSFERS
(813,755)
(467,659)
(78,304)
(2,126,491)
Capital contributions
Transfers in
Transfers out
CHANGE IN NET POSITION
(813,755) (467,659)
- 877,325
80,000 948,253
- (150,000)
1,696 (450,913)
NET POSITION - BEGINNING 7,500,473 3,657,598 273,701 30,522,968
NET POSITION - ENDING $ 6,686,718 $ 3,189,939 $ 275,397 $ 30,072,055
Page112
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
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 deferred outflows related to pensions
Increases/(decrease) in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assetq
Risk Information Support Fleet and
Management Systems Services Equipment
$ 1,103,040 $ 2,478,070 $ 121,211 $ 2,189,415
(1,306,941) - - -
(41,690) (1,232,106) (72,538) (1,063,010)
- (961,670) - (91,036)
(846,538) (149,749) - -
116,617 354 - -
(975,512) 134,899 48,673 1,035,369
823,253 - 45,000
673,253 - 45,000
(1,807) - (1,595,420)
- (29,100) - 893
- 164,227
(30,907) - (1,430,300)
3,241 16,519 1,030 33,551
3,241 16,519 1,030 33,551
(299,018) 120,511 49,703 (316,380)
1,567,219 3,912,794 218,813 7,959,492
1,268,201 4,033,305 268,516 7,643,112
(979,024) (180,479) 20,160 163,070
- 356,370 34,719
959,235
(150) - -
-
- (16,093)
(1,075)
3,662 (6,208) (6,206)
(80,870)
- 17,397
-
- 17,835
323
- (53,924) -
(5,314)
3,512 315,378 28,513
872,299
$ (975,512) $ 134,899 $ 48,673 $ 1,035,369
$ - $ 301,541 $ $ 575,784
Page113
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users - interfund
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
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 deferred outflows related to pensions
Increases/(decrease) in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assetq
Buildings and Health Unemployment
Furnishings Insurance Insurance TOTAL
$ 489,696
$ 5,352,832 $
- $ 11,734,264
-
-
- (1,306,941)
(391,349)
(5,798,753)
(68,967) (8,668,414)
(173,888)
-
- (1,226,594)
-
(1,703)
- (997,990)
32,090
-
- 149,061
(43,451)
(447,624)
(68,967) (316,614)
80,000 948,253
80,000 798,253
- (1,597,227)
- - - (28,207)
- 164,227
- (1,461,207)
12,824 14,856 1,165 83,187
12,824 14,856 1,165 83,187
(30,627) (432,768) 12,198 (896,381)
3,018,911 3,736,071 279,926 20,693,226
2,988,284 3,303,303 292,124 19,796,845
(826,579) (482,515) (79,469) (2,364,836)
796,386 -
- 2,146,710
- -
- (150)
(3,665) -
- (20,833)
(9,922) 34,891
10,502 (54,151)
- -
- 17,397
6,934
- 25,092
(6,605) -
- (65,843)
783,128 34,891
10,502 2,048,222
$ (43,451) $ (447,624) $ (68,967) $ (316,614)
$ 877,325
Page114
,41k
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Page115
SUPPLEMENTAL INFORMATION
Page116
MCAG NO. 0711
SCHEDULE 15
CITY OF FEDERAL WAY, WASHINGTON
SCHEDULE OF STATE FINANCIAL ASSISTANCE
For Year Ended December 31, 2020
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
S20-32102-01
88,521
HB 1923 Regional Housing Action Plan Grant
001-0000-073-334-04-020
20-63314-009
65,832
SUBTOTAL DEPARTMENT OF COMMERCE
154,353
Washington Office of Sheriffs and Police Chiefs
WA Auto Theft Prevention Authority Grant
001-0000-090-334-06-090
19-21 WATPA GG-PSATT
20,316
SUBTOTAL WASHINGTON OFFICE OF SHERIFFS AND POLICE CHIEFS
20,316
State Department of Ecology
Stormwater Capacity Grant 2019-2021
401-0000-000-334-03-010
WQSWCAP-1921-FedWa -00047
32,492
SUBTOTAL STATE DEPARTMENT OF ECOLOGY
32,492
State Department of Transportation
Commute Trip Reduction
101-0000-000-334-03-060
PTD0120
18,945
SR509: SW 312th St - 21 st Ave SW SRTS Project
306-4400-204-334-03-080
P-P-113(P02)-1
57,557
SR 509 - 9th PI to 11th PI S Pedestrian Improvement
306-4400-212-334-03-080
P-P-113(P01)-1
302,771
Complete Street ADA Improvements
306-4400-222-334-03-080
C-P-113 001 -1
75,712
SUBTOTAL STATE DEPARTMENT OF TRANSPORTATION
454,985
TOTAL STATE ASSISTANCE:
662 146
Page117
MCAG NO. 0711
SCHEDULE 16
CITY OF FEDERAL
WAY, WASHINGTON
SCHEDULE OF EXPENDITURES
OF FEDERAL AWARDS
For Year Ended December 31, 2020
Federal Agency
From
From
Passed
Pass-ThruAgency ifapplicable)
CFDA
Other
COVID-19
Pass -Through
Direct
Total
through to
Federal Program Name
BARS Account
#
I.D. #
Funding
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
B-20-MC-53-0015
-
8,670
8,670
8,670
Community Development Block Grants/Entitlement Grants
119-7300-805-331-14-218
14.218
B-17-MC-53-0015
-
124,470
124,470
124,470
Community Development Block Grants/Entitlement Grants
119-7300-805-331-14-218
14.218
B-18-MC-53-0015
-
20,661
20,661
20,661
Community Development Block Grants/Entitlement Grants
119-7300-805-331-14-218
14.218
Program Income from 996
-
3,461
3,461
3,461
Community Development Block Grants/Entitlement Grants
119-7300-805-331-14-218
14.218
Program Income from 803
-
4,192
4,192
4,192
Community Development Block Grants/Entitlement Grants
119-7300-900-331-14-218
14.218
B-20-MC-53-0015
-
235,216
236,216
-
Community Development Block Grants/Entitlement Grants
119-7300-951-331-14-218
14.218
B-20-MC-53-0015
-
35,000
35,000
-
Community Development Block Grants/Entitlement Grants
119-7300-956-331-14-218
14.218
B-20-MC-53-0015
-
10,000
10,000
10,000
Community Development Block Grants/Entitlement Grants
119-7300-961-331-14-218
14.218
B-20-MC-53-0015
-
90,437
90,437
-
Community Development Block Grants/Entitlement Grants
119-7300-961-331-14-218
14.218
Program Income from 996
-
20,619
20,619
-
Community Development Block Grants/Entitlement Grants
119-7300-966-331-14-218
14.218
B-20-MC-53-0015
-
35,000
35,000
-
Community Development Block Grants/Entitlement Grants
119-7300-967-331-14-218
14.218
B-20-MC-53-0015
-
32,695
32,695
32,695
Community Development Block Grants/Entitlement Grants
119-7300-987-331-14-218
14.218
B-20-MC-53-0015
-
10,000
10,000
10,000
Community Development Block Grants/Entitlement Grants
119-7300-994-331-14-218
14.218
B-20-MC-53-0015
-
60,000
60,000
60,000
Community Development Block Grants/Entitlement Grants
119-7300-996-331-14-218
14.218
B-20-MC-53-0015
-
1,748
1,748
-
Community Development Block Grants/Entitlement Grants
119-7300-996-331-14-218
14.218
B-15-MC-53-0015
-
14,916
14,916
-
Community Development Block Grants/Entitlement Grants
119-7300-997-331-14-218
14.218
B-20-MC-53-0015
-
9,420
9,420
9,420
Community Development Block Grants/Entitlement Grants
119-7300-957-331-14-218
14.218
B-20-MW-53-0015
yes
-
180,693
180,693
180,693
Community Development Block Grants/Entitlement Grants
119-7300-958-331-14-218
14.218
B-20-MW-53-0015
yes
43,407
43,407
43,407
SUBTOTAL CFDA 14.218 Entitlement Grants Cluster
REFER TO NOTES 1-3
940,604
940,604
507,669
US Department of Justice Bureau of Justice Assistance
Coronavirus Emergency Supplemental Funding Program
001-0000-090-331-16-034
16.034
2020-VD-BX-1823
yes
44,362
44,362
SUBTOTAL CFDA 16.034
REFER TO NOTES 1-3
44,362
44,362
US Department of Justice Bureau of Justice Assistance
Bulletproof Vest Partnership Program
001-0000-090-331-16-607
16.607
BPV
23,848
23,848
SUBTOTAL CFDA 16.607
REFER TO NOTES 1-3
23,848
23,848
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
2019-DJ-BX-0906
38,589
-
38,589
-
Pass-thru Washington State Patrol
Mari4auna Eradication
001-0000-090-333-16-000
16.U01
2020-122
5,000
5,000
SUBTOTAL CFDA 16.738
REFER TO NOTES 1-3
43,589
43,589
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
-
186,645
186,645
Public Safety Partnership and Community Policing Grants
001-0000-090-331-16-710
16.710
2020UMWX0499
68,909
68,909
SUBTOTAL CFDA 16.710
REFER TO NOTES 1-3
255,554
255,554
US Department of Transportation National Highway Traffic Safety Administration
Pass-thru Washington Traffic Safety Commission
State and Community Highway Safety
001-0000-090-333-20-600
20.600
2020-HVE-3870
9,338
-
9,338
-
State and Community Highway Safety
001-0000-090-333-20-600
20.600
2021-HVE-4123
518
518
SUBTOTAL CFDA 20.600 Highway Safety Cluster
REFER TO NOTES 1-3
9,856
9,856
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)
524,389
-
524,389
-
Highway Planning and Construction
306-4400-204-333-20-050
20.205
SRTS-9917(033)
129,257
-
129,257
-
Highway Planning and Construction
306-4400-213-333-20-050
20.205
AID-0443 (009)
102,643
-
102,643
-
Highway Planning and Construction
306-4400-214-333-20-050
20.205
STPUL-1020 (014)
1,087
-
1,087
-
Highway Planning and Construction
306-4400-215-333-20-050
20.205
STPUL-1000 (005)
31,034
-
31,034
-
Highway Planning and Construction
306-4400-216-333-20-050
20.205
CM-9917 (031)
467,465
-
467,465
-
Highway Planning and Construction
306-4400-217-333-20-050
20.205
HSIP-000S (528)
123,382
-
123,382
-
Highway Planning and Construction
306-4400-218-333-20-050
20.205
HSIP-000S (524)
59,862
-
59,862
-
Highway Planning and Construction
306-4400-219-333-20-050
20.205
STPUL-0099 (145)
355,421
-
355,421
-
Hiahwav Plannina and Construction
306-4400-223-333-20-050
20.205
HLP-0443 010
15,861
15,861
SUBTOTAL CFDA 20.205 Highway Planning and Construction Cluster
REFER TO NOTES 1-3
1,810,401
1,810,401
US Department of Treasury
Pass-thru Washington State Department of Commerce
Coronavirus Relief Fund
xxx-xxxx-xxx-333-00-000
21.019
CV20180
yes
4,402,800
4,402,800
563,000
Pass-thru 19ng Count
Coronavirus Relief Fund
001-1800-020-337-07-001
21.019
SLT0181
yes
144,187
144,187
-
Pass-thru King County Department of Community and Human Services
Coronavirus Relief Fund
001-0000-351-337-07-000
21.019
SLT0181
yes
20,000
20,000
SUBTOTAL CFDA 21.019
REFER TO NOTES 1-3
4,566,987
4,566,987
563,000
US Department of Homeland Security
Pass-thru Military Department
Emergency Management Performance Grants
101-0000-000-333-97-042
97.042
19EMPG E20-194
37,500
37,500
SUBTOTAL CFDA 97.042
REFER TO NOTES 1-3
37,500
37,500
TOTAL FEDERAL ASSISTANCE:
6,468,333
1,264,368
7,732,701
1,070,669
Page118
Note 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.
Note 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.
Note 3.- Indirect Cost Rate
The 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.
Note 4.- Federal Loans
The City of Federal Way was approved by the US Department of Housing and Urban Development Office of Community Planning and Development
to receive a loan totaling $3,030,000 to finance the Performing Arts& Event Center economic development project. The loan was refinanced down to
$2,712,000 in 2019. Both the current and prior year loans are reported on the City of Federal Way's Schedule of Liabilities.
Page119
CAPITAL ASSETS USED IN THE
OPERATION
OF GOVERNMENTAL FUNDS
Page120
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
December 31, 2020
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
2020 2019
$ 283,707,110
$283,686,723
56,342,323
56,342,323
28,652,906
27,229,887
792,192
792,192
200, 619, 913
187,390,545
15,197,378
34,471,239
585,311,822 589,912,909
125,244,871
125,244,871
252,375,395
252,375,395
105,130,235
124,044,111
102,561,321
88,248,532
$ 585,311,822 $ 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
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2020
Improvements
Machinery
Construction
Other than
and
in
Total
Total
Function and Activity
Land
Buildings
Buildings
Equipment
Infrastructure
Progress
2020
2019
GENERAL GOVERNMENT
Miscellaneous general government
$ 26,955,433
$ 32,837,958
$ 19,973
$
$ 6,139,001
$
$ 65,952,365
$65,952,365
Total General Government:
26,955,433
32,837,958
19,973
6,139,001
65,952,365
65,952,365
CULTURE AND RECREATION
Culture and Recreation
113,734,037
23,504,365
28,632,933
792,192
94,474,128
176,326
261,313,981
261,125,757
Total Culture and Recreation:
113,734,037
23,504,365
28,632,933
792,192
94,474,128
176,326
261,313,981
261,125,757
TRANSPORTATION
Streets and Traffic
143,017,640
-
-
-
100,006,784
15,021,052
258,045,476
262,834,787
Total Transportation:
143,017,640
100,006,784
15,021,052
258,045,476
262,834,787
Total General Fixed Asset by Function: $ 283,707,110 $ 56,342,323 $ 28,652,906 $ 792,192 $ 200,619,913 $ 15,197,378 $ 585,311,822 $ 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.
Page122
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2020
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
l/l/2020 Additions Deductions
Governmental
Funds
Capital Assets
12/31 /2020
$65,952,365 $ - $ - $65,952,365
65,952,365 - - 65,952,365
261,125,757 1,423,019 1,234,795 261,313,981
261,125,757 1,423,019 1,234,795 261,313,981
262,834,787 19,022,793 23,812,104 258,045,476
262,834,787 19,022,793 23,812,104 258,045,476
$ 589,912,909 $ 20,445,812 $ 25,046,899 $ 585,311,822
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.
Page123
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.
Page124
NET POSITION BY COMPONENT
Last Ten Fiscal Years
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Governmental activities
Net investment in capital assets
470,074,905
470,597,776
468,628,412
466,078,036
424,245,625
440,815,201
461,491,598
467,610817
463,177,653
450,219,346
Restricted
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
19,922,486
Unrestricted
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
43,673 363
Total governmental activities net positio
532,618,951 538,472,176 540,052,936 541,306,481 490,451,686 504,763,318 518,297,127 529,732,483 519,455,185 513,815,194
Bus ess-type activities
Net investment in capital assets
50,052:887
11280,880
50,620,091
50,299,229
58,998,176
59,059,646
61,673,201
62,326:054
63,106,022
66,321,652
Restricted
18831
26,496
20,559
20,311
15,906
18,438
33,440
39867
33,261
35,295
Unrestricted
5,398,786
5,968 302
6,577,269
7,219,403
5,814,364
5,142,741
5,791,413
5,779 784
5,704,824
5,691 073
Total business -type activities net positio.
55,470,504 56,275,678 57,217,919 57,538,943 64,828,446 64,220,825 67,498,054 68,145,705 68,844,107 72,048,020
Primary government
Net investment in capital assets
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
516,540,998
Restricted
23,960,432
22,873,573
22,615,443
17,411,583
20,209,120
21,391,034
20,445,651
20,956,070
18,911,720
19,957,781
Unrestricted
1 44,001,231
50,995,625
55 406,910
65,056,576
51 827,211
47,718,262
42 184,731
46,985 247
43 103,897
49,364 436
Total primary government net assets 588,089,455 594,747,853 597,270,856 598,845,424 555,280,132 568,984,143 585,795,181 597,878,188 588,299,292 585,863,214
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Page125
CHANGES IN NET POSITION
Last
Ten Fiscal Years
Expenses
Governmental activities:
General government
$ 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
$ 8,094,395
Security of persons and property
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
34,792,577
Transportation
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
13,469,874
Physical environment
424,466
415,935
490,916
443,127
476,570
469,237
415,771
487,104
519,163
708,031
Economic environment
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
6,317,075
Health and human Svcs
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
1,774,097
Culture and recreation
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
7,607,707
Interest on long-term debt
614,571
602,572
1,779,833
1,010,406
461,763
433,729
502,721
542,802
347,437
1,015,414
Total governmental activities expenses
57,828,324
54,352,517
56,710,640
59,444,335
64 321893
68,467,288
70,529,869
71,680,386
75,927,396
73 779171
Business -type activities:
Surface Water Mgmt
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
4,989,139
Dumas Bay Center
890,738
873,144
844,623
945,705
1,250,161
1,104,971
1,179,967
921,839
880,135
565,369
Total business -type activities expenses
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
5,554,507
Total primary government expenses
62,246,652
58 498175
60,790,005
64,044,038
69,665,588
73,980,484
76 095191
77,222,386
81,672,433
79,333,678
Program Revenues
Governmental activities:
Charges for services
General Government
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
2,956,619
Security of Persons & Property
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
4,019,723
Transportation
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
3,192,519
Physical Environment
77,875
89,457
299,337
305,742
302,083
304,294
314,842
319,480
431,901
509,311
Economic Environment
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
2,215,856
Health
126,710
162,322
-
-
-
-
-
-
-
-
Culture & Recreation
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
729,227
Operating grants and contributions
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
11,195,427
Capital grants and contributions
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
2,994,083
Total governmental activities program revenue
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
27,812,765
Business -type activities:
Charges for services
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
4,572,984
Operating grants and contributions
265,660
576,182
774,436
177,518
17,108
68,970
53,282
48,504
31,718
42,348
Capital grants and contributions
430,090
328,130
790,033
1,078,904
622,735
144,577
122,032
Total business -type activities program revenue!
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
4,737,364
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
32,550,129
Net(Expense)/Revenue
Governmental activities
(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)
(45,966,406)
Business -type activities
(132,524)
653,250
791,822
182,517
(335,462)
246,337
564,066
164,830
(243,158)
(817,144)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Sales tax
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
16,099,037
Local Criminal Justice Sales Tax
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
2,799,244
Utility tax
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
14,672,457
Property tax
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
11,449,581
Real estate excise tax
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
4,467,111
Gambling Tax
511,005
114,443
178,696
176,068
177,807
190,051
210,029
229,524
232,942
147,533
Hotel/MotelTax
185,289
193,344
208,839
231,828
266,053
283,220
301,603
291,671
290,601
120,482
Admissions Tax
-
-
-
-
-
-
547,229
867,169
827,537
67,732
Leasehold tax
6,259
5,820
5,989
6,693
6,104
3,784
4,218
4,618
5,898
5,336
Other
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
1,767,417
Gain on sale of capital assets
-
-
-
-
-
-
142,935
-
-
-
Loss on investment in joint venture
-
-
-
-
-
-
-
-
(16,377,170)
-
Transfers
(113,000)
(140,500)
(137,419)
(116,000)
(17,959)
633,124
(942,000)
(123,502)
225,307
(183,453)
Total governmental activities
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
51,412,477
Business -type activities:
Other
12,405
11,424
13,000
22,507
24,917
45,405
60,544
132,692
192,598
54,138
Transfers
113,000
140,500
137,419
116,000
17,959
633,124
942,000
123,502
225,307
183,453
Total business -type activities
125,405
151,924
150,419
138,507
42,876
(587,719)
1002 544
256194
(32,709)
237,591
Total primary government
$ 38,926,855
$ 38,205,030
$ 39,384,230
$ 40,336,087
$ 43 431684
$ 46 479106
$ 49,146,618
$ 48,494,374
$ 34,517,085
$ 51 650 068
Change in Net Position
Governmental activities
$ 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)
$ 5,446,071
Business -type activities
(7,119)
805,174
942,241
321,025
(292,586)
(341,384)
1,566,611
421,024
(275,866)
(579,553)
Prior Period Adjustment
-
(3,358,477)
(4,944,409)
(37,035,737)
(266,237)
(586,155)
2,009,955
(828,029)
(6,907,134)
Net Effect - Change in Accounting for Pensions
-
-
-
-
(10,485,698)
-
-
-
-
-
Effect of Change in A counting Principle
395,462
Total primary government
$ 5,768,223
$ 6,658,398
$ 2,523,001
$ 1,574,570
$(43,565,293) $ 13,704,011
$ 16,811,038
$ 12,083,007
$ (9,578,896) $ (2,436,078)
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Page126
GOVERNMENT -WIDE REVENUES BY SOURCE AND EXPENSES BY FUNCTION
Last Ten Fiscal Years
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Pro ram Revenues
Charges for Services
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
18,196,239
Operating Grants and Contributions
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
11,237,775
Capital Grants and Contributions
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
3,116,115
General revenues
Sales tax
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
16,099,037
Local Criminal Justice Sales Tax
1,795,971
1,864,991
1,992,667
2,138,406
2,319,124
21499,527
21616,306
2,934,354
3,056,010
2,799,244
Utility tax
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
14,672,457
Property tax
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
11,449,581
Real estate excise tax
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
4,467,111
Gambling Tax
511,005
114,443
178,696
176,068
177,807
190,051
210,029
229,524
232,942
147,533
Hotel/MotelTax
185,289
193,344
208,839
231,828
266,053
283,220
301,603
291,671
290,601
120,482
Admissions Tax
547,229
867,169
827,537
67,732
Leasehold tax
6,259
5,820
5,989
6,693
6,104
3,784
4,218
4,618
5,898
5,336
Other revenue
960,012
702,833
624,464
883,549
1,820,868
1,159,347
3,149,057
1,932,423
1,581,471
1,269,811
Investment Earnings
113,419
146,850
256,797
284,757
256,797
413,052
605,402
605,402
1,479,027
551,744
Gain on sale of capital assets
142,935
Total Revenues
68,014,875 65,156,573 66,671,482 70,563,017 73,621,730 87,9509733 93,492,383 87,295,438 89,298,736 84,200,196
Expenses
General Government
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
81094,395
Security of Persons & Property
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
34,792,577
Transportation
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
13,469,874
Physical Environment
424,466
415,935
490,916
443,127
476,570
469,237
415,771
487,104
519,163
708,031
Economic Environment
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
6,317,075
Health
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
1,774,097
Culture & Recreation
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
7,607,707
Interest on long-term debt
614,571
602,572
1,779,833
1,010,406
461,763
433,729
502,721
542,802
347,437
1,015,414
Surface Water Management
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
4,989,139
Dumas Bay Centre
890,738
873,144
844,623
945,705
1,250,161
1,104,971
1,179,967
921,839
880,135
565,369
Loss on investment in joint venture
16,377,170
Total Ex eases
$ 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 $ 79,333,678
Source: City of Federal Way Finance
Page127
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2011
2012
2013
2014
2015
1 201
2017
1 2018
2019
2020
General fund
Nonspendable
104,012
69,398
76,538
105,417
136,806
187,284
252,550
229,870
232,353
270,772
Restricted
145,524
60,585
39,081
54,526
71,106
108,147
94,452
389,286
413,128
27,000
Committed
21,893
21,893
21,893
3,403,937
34,513
199,013
19,350
19,350
19,350
9,350
Unassigned
Total general fund
12,372,719
14,783,219
16,003,076
12,480,539
14,362,533
13,794,955
13,380,039
14,954,243
1 15,936,195
16,386,570
12644,148 14,935,095 16,140,587 16,044,419 14,604,958 14,289,399 13,746,391 15,592,749 16 601026 16,693,692
All Other Governmental Funds
Restricted
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
19,624,713
Committed
11,642,248
1 15,813,105
16,371,292
19,530,016
17,114,881
13,932,351
12,705,135
9,772,048
9,856,449
11,321,035
Unassigned
8,124,951
7,798,938
110,546
Total allother overnmental funds $ 30,967,736 $ 33,892,273 $ 33,849,686 $ 36,761,346 $ 37,100,183 $ 35,009,516 $ 24,645,393 $ 22,270,157 $ 27,978,881 $ 30,945,748
Source: City of Federal Way Finance
Note: Fund Balance reclassification implementation ofGASB 54 for year's 2010 and forward.
Page128
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Revenues
Taxes
$ 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
$ 49,918,537
Licenses,
fees and permits
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
3,844,916
Intergovernmental
11,713,248
71631,014
91682,511
9,929,833
8,910,603
19,783,107
18,184,915
11,181,594
11,198,229
13,390,866
Charges for services
61131,287
51686,962
51965,726
7,591,795
6,467,528
6,934,789
8,523,064
9,580,273
10,432,547
6,884,552
Development Fees
Fines and Forfeitures
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
2,893,787
Investment earnings
89,338
122:483
172:049
250 39
210,289
308,643
442,466
761,544
1:042,537
421,062
Other revenues 96Q,012 702 830 678,85. 883,549 1,820 867 1 159,348 3,149 057 1 459,061 1,581 467 1 13I,036
Total revenues 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 78,484,756
Expenditures
General government
4,234,327
41402,129
41495,029
4,444,772
4,707,145
4,541,228
4,390,464
4,680,000
4,854,271
8,090,399
Security ofpersons and property
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
34,780,390
Transportation
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
8,490,601
Physical Environment
427,315
409,042
468,220
461,718
478,807
452,720
425,900
486,418
515,766
537,419
Economic Environment
2,782,537
21645,215
2,190,502
2,786,542
2,960,841
3,180,808
4,195,093
4,893,032
5,845,587
4,890,884
Health
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
1,777,443
Culture and Recreation
5,821,160
5,877,370
6,183,381
6,246,952
6,787,491
7,032,133
7,173,699
7,197,424
7,442,656
5,868,240
Debt Service
Princi al
457,520
480,760
1,019,698
963,500
640,482
470,000
8,853,960
659,000
13,041,847
1,890,181
Interest/fiseal charges/admire fees
614,571
602,572
1,781,778
1,021,945
491,379
471,738
547,501
592,562
1,114,699
1,078,701
Capital
Outlay
11,160,205
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
1 6,643,797
Total expenditures 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 74,048,055
Excess of revenues over
(under) expenditures
(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)
4,436,701
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
5,500
2,187,756
Anticipation Note
8,209,960
Bond premium
410,660
1,714,668
Transfers in
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
19,279,266
Transfers out
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
20,260,972
Total other financing sources (uses) (48,038) (140,500) 1,117,906 10,044,152 (56,959) 4,444,070 7,637,281 (623,502) 17,723,867 (981,706)
Net change in fund balances $ 1 314 815 $ 5,215,484 $ 1,162,908 $ 2,815,492 $ 1 100 623 $ 2 406 227 $ 10 907 130 $ 2 545 785 $ 6,717,001 $ 3,454,995
Debt service as a percentage of
noncapital expenditures 2.1 % 2.3 % 5.3 % 3.6 % 2.0 % 1.6 % 12.8 % 1.8 % 17.1 % 4.4 %
Source: City offederal Way Finance
Page129
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
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%
2020
12,401,741,077
234,678,332
111,582,064
12,748,001,473
0.90
5.6%
* Real, personal, and state public service property has been assessed at 100% of the estimated value.
Source: King County Assessor's Office.
Note: These figures include all final tax adjustments, non-taxable, senior citizen exempted property and omits.
The total assessed value was reduced by non-taxable of $108,983,529 yielding a taxable assessed value of
of $12,748,001,473. The taxable assessed valuations are the the basis for the following year's tax levy.
Page130
PROPERTY TAX RATES AND LEVIES, DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
City Direct
Rates*
Ove apping Rates
Fiscal
Year
City of
Federal
Way
Federal Way
School
District #210
King
County
Washington
State
King County
Flood Zone
Port of
Seattle
County
Ferry District
Fire District
#39
Library
Emergency
Medical
Services
Sound
Transit
Total
TAX RATES PER $1,000 OF ASSESSED VALUATION
2011
1.20
5.36
1.34
2.28
0.11
0.22
0.004
1.39
0.57
0.30
12.77
2012
1.30
5.77
1.42
2.42
0.12
0.23
0.004
1.50
0.57
0.30
13.63
2013
1.42
7.55
1.54
2.57
0.13
0.23
0.004
1.82
0.57
0.30
16.14
2014
1.40
7.28
1.52
2.47
0.15
0.22
0.003
1.81
0.56
0.34
15.75
2015
1.25
6.42
1.35
2.29
0.14
0.19
1.77
0.50
0.30
14.20
2016
1.19
6.75
1.48
2.17
0.13
0.17
1.91
0.48
0.28
14.55
2017
1.13
6.32
1.38
2.03
0.12
0.15
1.83
0.45
0.26
0.250
13.93
2018
1.06
5.77
1.33
1 2.92
0.11
1 0.14
1.73
1 0.41
0.24
0.230
1 13.94
2019
0.97
3.63
1.22
2.63
1 0.10
0.12
1.77
0.37
0.22
0.207
11.24
2020
0.90
3.63
1.25
3.09
0.09
0.12
1.80
0.36
0.26
1 0.197
11.70
DETAIL OF TAX RATES FOR 2020
Basic Rate
0.90
0.75
3.09
0.09
0.12
0.00
0.33
5.28
Voted Rate
3.63
0.47
1.80
0.04
0.26
0.20
6.40
TAX LEVIES
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
720":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
2020
11,224,365
63,784,140
792,250,971
1,934,626,486
58,839,186
76,396,431
34,924,871
136,837,494
169,447,875
116,448,205
3,394,780,025
Source: King Couvty Assessors Office and King County Department ofFinanc
^The Ci of Federal Wa s Direct Aate has ovl o vent which is the cx se let
Page 131
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2020
2011
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
KW Club Palisades LLC
Real Estate Management
137,774,000
1
1.08%
Prime Woodley Campus Drive
Real Estate Management
104,177,000
2
0.82%
Avanath Federal Way LLC
Real Estate Management
82,924,000
3
0.65%
PRCP-Arcadia LLC (formerly Campus Drive Fee Owner LLC)
Real Estate Management
78,759,500
4
0.62%
ATR LLC
76,851,000
5
0.60%
Merlone Geier Partners
Real Estate Investment Trust
74,826,300
6
0.59%
Harsch Invest Properties LLC
Real Estate Management
71,196,700
7
0.56%
Federal Way Campus LLC (formerly part of Weyerhauser)
Real Estate Management
70,684,500
8
0.55%
RHB Miro Owner LLC
Real Estate Management
70,130,000
9
0.55%
IRGRA (formerly part of Weyerhauser)
Real Estate Management
69,764,100
10
0.55%
Greystone Meadows Apts.
Real Estate Management
66,450,000
11
0.52%
KNL Vision WA LLC
Real Estate Management
58,057,000
12
0.46%
24,285,000
8
0.32%
Prime Catalina Campus Dr II
Real Estate Management
54,342,000
13
0.43%
Prime Catalina Campus Dr (formerly Alliance Tax Advisors)
Real Estate Management
53,693,000
14
0.42%
BMF IV WA Retreast Maple Hill
Real Estate Management
53,495,000
15
0.42%
Cove Apartments LLC (formerly Forest Cove LLC)
Real Estate Management
52,366,000
16
0.41%
25,876,000
7
0.34%
Weyerhaeuser
Real Estate Investment Trust
0.00%
120,022,792
1
1.57%
Puget Sound Energy-Elec/Gas
Electric\Gas
0.00%
52,071,616
2
0.68%
Steadfast Commons LLC
Real Estate Management
0.00%
51,489,701
3
0.67%
Harsch Investment Properties
Retailer
0.00%
50,847,527
4
0.66%
LBA Realty
Real Estate Management
0.00%
33,305,500
5
0.43%
Qwest Corporation
Telecommunications
0.00%
27,597,020
6
0.36%
Virginia Mason Clinic
Medical Services
0.00%
17,414,137
9
0.23%
Fred Meyer
Retail/Wholesaler
0.00%
16,963,100
10
0.22%
IA Orchard Hotels Federal Way (formerly Apple Hospitality Five
Inc.)
Real Estate Management
0.00%
14,641,900
11
0.19%
Campus Business Parks LLC
Real Estate Management
0.00%
12,474,100
12
0.16%
Costco
Retail / Wholesaler
0.00%
12,191,200
13
0.16%
ANS LLC
Real Estate Management
0.00%
12,002,700
14
0.16%
$ 1,175,490,100 9.22% $ 471,182,293 6.15%
Sooroe: King Comty Assessor's 0-.c
A 2020 and 2011 re lar assessed valuation for the City of Federal Way Was $ l2,748,001,473 and $7 659 569 844 res ecdvel .
Page132
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Fiscal
Year
Taxes Levied
for the
Fiscal Year
Collected within the
Fiscal Year of the Levy
Collections
in Subsequent
Years
Total Collections to Date
Total
Outstanding
Delinquent
Taxes
Ratio of
Delinquent
Taxes to
Total Tax Levy
Current Tax
Amount
Percentage
of Levy
Total Tax
Amount
Percentage
of Levy
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%
2020
11,224,365
11,099,025
98.9%
(161,864)
10,937,161
97.4%
287,204
2.6%
Source: Data has been derived from the "Annual Tax Receivable Summary" prepared by the King County Financc.
Note: These figures include tax adjustments such as omits, refunds, and senior citizen exempted property.
Page133
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
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
2020
31,635,372
-
-
31,635,372
0.098%
322
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.
Page 134
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
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
2020
98,340
12,748,001,473
31,635,372
3,569,746
28,065,626
0.0022
285.39
(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 $12,748,001,473 has been reduced by non-taxable of $108,983,529
to arrive at taxable assessed valuation of $12,639,017,944.
(C) Includes general obligation debt issued in 2013, 2017, and 2019.
Source: City of Federal Way Finance
Page135
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2020
(A) (B)
Gross General Percentage Amount
Obligation Debt Applicable to Applicable to
Jurisdiction Outstanding Federal Way Federal Way
King County
$ 663,157,000
1.93%
$ 12,824,355
Port of Seattle
311,175,000
1.93%
6,017,608
Federal Way School District #210
426,525,000
68.38%
291,667,421
Fire District # 39
30,450,000
79.16%
24,102,846
Library
56,875,000
3.23%
1,838,278
Total Overlapping Debt
1,488,182,000
336,450,508
CITY OF FEDERAL WAY
31,635,372
(C)
0.73%
230,769
Total Direct and Overinping Debt $ 1,519,817,372 $ 336,681,277
(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 Accounting Unit.
(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
Page 136
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2020
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:
2020 TAV=$12,645,326,014 (A)
1.50% AV @ 100%
$ 189,679,890
$ (189,679,890)
$ -
$ -
$ -
2.50%AV @ 100%
-
316,133,150
316,133,150
316,133,150
948,399,451
Add:
Cash reserved for
debt redemption (B)
3,569,746
-
-
-
-
3,569,746
Less:
Bonds and COPS outstanding
31,635,372
-
I -
31,635,372
Remaining Debt Capacity $ 161,614,264 $ 126,453,260 $ 316,133,150 $ 316,133,150 $ 920,333,825
Total Remaining
"General" Ca aci
$2889067,524
7
(A) This figure represents the City's final total taxable assessed valuation (TAV) for 2020 which was used to determine
the 2021 property tax levy.
(B) Reflects debt service fund balance as of 12/31/2020.
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
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%
2020
948,399,451
(28,065,626)
920,333,825
2.96%
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.
Page137
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
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%
2020
1,063,445
1,460,181
2,523,626
70,531,852
3.6%
Source: City of Federal Way Finance
Note: * Interest excludes bond issuance and debt registration costs.
Page138
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)
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
310,717,787,000
31,438
35.9
13.0
21,922
4.0%
2020
98,340
N/A
31,744
35.8
13.0
21,922
6.8%
(A)
Includes public school enrollment. Kindergarten is included though not State mandated.
(B)
Unemployment rates came from ESDWAGOV-King County Labor Market
(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. 2020 data for Personal Income to be published fall of 2021.
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.
Page139
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2020
2011
Number of
Employees
Rank
% of Total City
Em to ment
Number of
Em to ees
Rank
% of Total City
Employment
Federal Way Public Schools
Educational Services
1,663
1
5.88%
1,951
1
6.77%
St Francis Hospital
Medical Services
1,026
2
3.63%
875
4
3.04%
World Vision Inc
Christian Relief Agency -Nonprofit
745
3
2.64%
852
5
2.96%
US Postal Service - Bulk Mail
Postal Service
654
4
2.31%
616
7
2.14%
Western WA Corp of Seventh Day Ad
Non -Profit Church Organization
612
5
2.16%
-
-
0.00%
Wal-Mart #3794
Retail
560
6
1.98%
386
9
1.34%
Total Renal Care Inc. aka Davila
Health Services
512
7
1.81%
-
-
0.00%
Fred Meyer
Retail
360
8
1.27%
220
11
0.76%
City Of Federal Way
Government Services
353
9
1.25%
476
8
1.65%
Costco Wholesale Corporation
Wholesale
350
10
1.24%
214
12
0.74%
Avalon Care Center
Health Services
303
11
1.07%
-
-
0.00%
Virginia Mason Federal Way
Medical Services
282
12
1.00%
235
10
0.82%
Real Greek LLC DBA Ellenos
Manufacturing
240
13
0.85%
-
-
0.00%
Franciscan Medical Group
Medical Services
225
14
0.80%
-
0.00%
Community Integrated Services
Health Services
225
15
0.80%
-
0.00%
Target Store
Retail
178
14
0.62%
Wal-Mart #2571
Retail
183
13
0.64%
Devry University
Educational Services
167
15
0.58%
Weyerhauser Company
Lumber Products
1,263
2
4.38%
LifeBridge Inc
Business Services
1,210
3
4.20%
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.
Page140
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)
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
2020
138
29,230
249
14,837
129
4,241
Sources & Notes:
(A) Federal Way Community Development Department. Construction includes alterations.
Other building -related permits (plumbing, electrical, mechanical, fire alarm, etc.) numbering 2,522
and valued at $22,015,946 have been excluded.
Page 141
CAPITAL ASSETS BY FUNCTION
Last Ten Fiscal Years
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Transportation
Street (Center Line Miles)
248.23
248.23
249.25
249.25
249.25
249.25
253.8
253.8
256.52
256.52
Signals WSDOT-owned and maintained
5
6
6
6
6
6
6
6
6
6
Signals City -owned & County -maintained
76
77
77
77
77
80
80
81
81
82
Street lights City -owned and maintained
1,554
1,618
1,705
1,728
1,728
1,785
1,857
1,857
2,098
2,134
Street lights City -owned and PSE-maintain
644
644
644
644
644
644
644
644
644
644
Street lights PSE-owned and maintained
1,975
1,975
1,975
1,978
1,980
1,983
1,986
1,986
2,067
2,067
Culture & Recreation
Developed Parks - Acreage
524.49
579.86
579.86
588.99
588.99
588.99
588.99
620.33
853.03
853.03
Developed Parks - # of Parks
32
29
29
30
30
32
32
34
34
34
Undeveloped Parks - Acreage
551.12
539.43
539.43
539.43
539.43
539.43
539.43
443.76
436.16
436.16
Undeveloped Parks - # of Parks
22
22
22
22
22
22
22
23
23
23
Tennis Courts City -Owned
11
9
9
9
9
9
9
9
9
9
Tennis Courts - Public
22
25
25
25
25
22
22
17
17
17
Swimming Pools City -Owned
1
2
2
2
2
2
2
2
2
2
Swimming Pools County -Owned
1
3
3
3
3
3
3
2
2
2
Trails - Miles
6
9
9
9
9
9
9
9.44
12.07
12
Trails -# of Trails
3
6
6
6
6
6
6
7
7
7
Community Centers/Recreation Facilities
1
1
1
2
2
3
3
3
3
3
Source: City of Federal Way Public Works and Parks Department
Page142
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
SECURITY OF PERSONS & PROPERTY
Offenses:
Forcible Rape (including attempts)
38
48
35
70
47
46
34
44
32
50
Robbery
119
107
107
135
152
191
169
234
156
132
Criminal Homicide
4
3
6
4
4
9
7
1
3
6
Aggravated Assault
99
150
133
148
178
209
226
173
175
211
Vehicle Theft
694
800
778
869
762
1,080
963
805
634
763
Burglary (commercial & residential)
752
931
801
816
635
645
664
672
563
745
Larceny
3,067
3,409
3,571
3,912
3,701
4,225
3,699
3,060
3,106
3,056
Arson
11
9
7
13
14
18
10
14
12
34
Citations:
Traffic
17,226
13,023
17,558
13,705
15,466
10,602
10,579
7,619
8,186
6,346
Red Light Photo
15,340
13,455
24,454
24,750
29,812
33,626
38,434
35,781
25,175
23,928
ECONOMIC ENVIRONMENT
Building Related Permits & Values
Building Permits
482
598
662
632
633
544
649
580
391
516
Estimated Value (In Millions $)
$ 33
$ 58
$ 62
$ 128
$ 198
$ 57
$ 62
$ 86
$ 227
$ 48
Other Building Related Permits
2,385
2,960
3,827
3,722
3,868
3,429
3,425
3,464
2,927
2,522
Estimated Value (In Millions $)
$ 6
$ 5
$ 6
$ 7
$ 8
$ 8
$ 10
$ 10
$ 44
$ 22
Source: City of Federal Way Police Department and Community Development Department
Page143
CITY GOVERNMENT EMPLOYEES FULL-TIME EQUIVALENT - HISTORY
Department 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mayor's Office
5.00
3.00
3.50
6.00
8.00
12.34
14.34
7.34
7.34
7.34
Administration
4.00
3.00
3.00
5.00
6.00
6.34
6.34
6.34
6.34
6.34
Economic Development
-
-
0.50
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Performing Arts & Event Center
-
-
1.00
5.00
7.00
-
-
-
Government Affairs
-
-
-
-
-
Human Services
1.00
-
-
-
-
-
-
-
-
City Council
4.50
3.85
4.15
4.15
4.20
4.20
4.20
4.20
4.20
4.20
Municipal Court
13.00
13.00
13.00
13.00
13.00
16.00
16.00
16.00
16.00
16.00
Human Resources/City Clerk
4.50
4.50
4.50
5.13
5.75
6.00
6.00
6.00
6.00
6.00
City Clerk
1.75
1.75
1.75
1.88
2.50
2.50
2.50
2.50
2.50
2.50
Human Resources
2.75
2.75
2.75
3.25
3.25
3.50
3.50
3.50
3.50
3.50
Finance
7.00
7.00
6.00
7.00
8.00
8.00
8.00
8.00
8.00
10.00
Administration
-
-
-
-
-
-
-
-
-
-
Finance
7.00
7.00
6.00
7.00
8.00
8.00
8.00
8.00
8.00
10.00
Information System
7.00
7.00
7.00
6.00
7.00
7.00
7.00
7.00
7.00
8.00
Law
11.00
11.00
12.00
12.00
12.50
12.50
12.50
13.00
13.00
12.50
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
6.20
6.20
7.20
7.20
7.70
7.70
7.70
8.20
8.20
7.70
Community & Econ Development
19.00
21.65
21.85
26.25
26.70
26.70
26.70
26.70
27.50
26.18
Administration
3.50
3.50
3.50
3.90
3.90
3.90
3.90
3.90
3.90
4.58
Planning
6.00
6.00
6.00
7.00
7.00
6.00
6.00
6.00
6.80
6.80
Building
9.00
9.00
10.00
12.00
12.00
13.00
13.00
13.00
13.00
11.00
Human Services
-
2.65
2.35
3.35
3.80
3.80
3.80
3.80
3.80
3.80
Neighborhood Development
-
-
-
-
-
-
-
-
-
Economic Development
0.50
0.50
-
-
-
-
-
-
-
-
Police
135.00
132.00
145.00
146.00
160.00
160.00
160.00
160.00
163.00
167.00
Administration
3.00
3.00
3.00
3.00
3.00
2.00
2.00
2.00
2.00
2.00
Support Services
51.00
52.00
55.00
56.00
57.00
55.00
55.00
55.00
58.00
62.00
Field Operations
81.00
77.00
87.00
87.00
100.00
103.00
103.00
103.00
103.00
103.00
Parks, Rec. & Cultural Svcs.
36.45
36.45
35.45
35.90
34.80
37.46
37.46
38.96
38.46
39.21
Administration
1.35
1.35
1.35
1.80
1.80
1.80
1.80
1.80
1.80
1.80
Planning
-
-
-
-
-
Kenneth Jones Pool
-
-
-
-
-
General Recreation
5.50
5.50
5.50
5.50
5.50
5.83
5.83
5.83
5.83
5.83
Community Center
13.35
13.35
13.35
13.35
11.00
11.33
11.33
11.33
11.33
11.33
Dumas Bay Centre
2.75
2.75
2.75
2.75
3.00
3.00
3.00
3.00
3.00
3.00
Knutzen Family Theatre
-
-
-
-
-
-
-
-
-
-
Parks Maintenance
13.00
13.00
12.50
12.50
13.50
15.50
15.50
16.00
15.50
16.25
Performing Arts & Event Center
-
-
-
-
-
-
-
1.00
1.00
1.00
Building
0.50
0.50
-
-
-
-
-
-
-
-
Public Works
38.95
38.95
39.95
38.95
44.00
43.00
44.00
45.00
49.50
56.00
Administration
2.25
2.20
2.25
2.25
2.75
2.75
2.75
2.75
3.61
1.61
Development Services
4.20
4.20
3.70
3.70
2.20
2.20
2.20
2.20
1.85
2.85
Traffic Services
2.35
2.35
3.85
3.85
4.35
4.35
4.35
5.35
5.28
5.28
Street Services
10.60
10.60
10.60
10.60
11.60
11.60
11.60
11.60
15.10
22.00
Emergency Management
1.00
1.00
1.00
-
-
-
-
-
-
-
Solid Waste & Recycling
1.70
1.70
1.70
1.70
2.20
2.20
2.20
2.20
2.41
2.41
Surface Water Management
16.35
16.40
16.35
16.35
20.40
19.40
20.40
20.40
20.75
20.85
Fleet & Equipment
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50 1.00
Total 281.40 278.40 292.40 300.38 323.95 333.20 336.20
332.20
340.00 352.43
Source: City of Federal Way Finance Division
*table does NOT include 1-time positions or frozen positions
Page144
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
DECEMBER 31, 2020
EXECUTIVE BRANCH
POSITION EMPLOYEE ANNUAL SALARY
MAYOR
JIM FERRELL
$149,732
FINANCE DIRECTOR
ADE ARIWOOLA
$160,128
CITY ATTORNEY
RYAN CALL
$160,128
CITY CLERK
STEPHANIE COURTNEY
$117,840
ECONOMIC DEVELOPMENT DIRECTOR
TIM JOHNSON
$153,072
PARKS DIRECTOR
JOHN HUTTON
$148,704
INFORMATION TECHNOLOGY DIRECTOR
THOMAS FITCHNER
$155,472
COMMUNITY DEVELOPMENT DIRECTOR
BRIAN DAVIS
$159,192
PUBLIC WORKS DIRECTOR
EJ WALSH IV
$157,968
POLICE CHIEF
ANDY HWANG
$179,628
LEGISLATIVE BRANCH
POSITION EMPLOYEE ANNUAL SALARY
DEPUTY MAYOR
SUSAN HONDA
$15,225
COUNCIL MEMBERS
LYDIA ASSEFA-DAWSON
$15,225
GREGORY BARUSO
$15,225
LEANDRA CRAFT
$15,225
LINDA KOCHMAR
$15,225
MARTIN MOORE
$15,225
HOANG TRAN
$15,225
JUDICIAL BRANCH
POSITION EMPLOYEE ANNUAL SALARY
JUDGE
DAVID LARSON
$180,614
JUDGE
REBECCA ROBERTSON
$180,614
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.
Page145
MISCELLANEOUS STATISTICAL INFORMATION
LOCAL TAXES ON BUSINESSES
Franchise Tax - Cable TV .........................................
5.00%
Utility Tax - (6% + 1.75% Prop 1) ...............................
7.75%
Utility Tax - Solid Waste (6%+ 10%+ 1.75% Prop 1)...........
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) .........................
10.10%
FIRE AND EMERGENCY MEDICAL RESPONSE INFORMATION
Fire and Fmer�enry Medirnl Re.Qnnn.Qe infnrmatinn reflerte the areater Federal Wnv area which i.c cen�ed by ,Qnuth Kin, Fire & Recrne
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fire and Other Responses
934
1,363
968
999
1,148
1,019
3,213 1,253 4,278
1,093
Emergency Medical
11,914
12,571
12,950
13,847
14,193
16,144
17,109 15,968 16,422
19,101
PUBLIC EDUCATION
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
23
Elementary Schools
9,673
9,229
9,777
10,054
10,253
10,498
10,493 10,241 10,576
9,953
6
Middle Schools (Public Academy, TAF)
5,205
5,041
5,050
5,034
5,209
5,183
5,238 5,217 4,485
5,309
4
High Schools
6,409
6,018
6,341
6,299
6,166
5,582
6,382 6,389 6,342
6,327
4
1 Alternative\Int. Academy, Open Doors
321
377
386
385
351
412
409 462 1,915
333
Total 21,608 20,665 21,554 21,772 21,979 21,673
22,522 22,309 23,318
21,922
2,941 Staff members
TAXABLE SALES (in millions) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Retail Sales
$1,277
$1,239
$1,355
$1,432
$1,564
$1,673
$1,671 $1,733 $1,888J
$1,897
Real Estate Sales
$315
$303
$399
$418
$599
$1,062
$819 $841 $1,044
$895
Source: South King County Fire and Rescue
Federal Way Public School
WA Office of Superintendent of Public Instruction
City of Federal Way Finance Division
Page146
PRINCIPAL TAXPAYERS -SALES TAXES
Current Year and Nine Years A t
2020
2011
Sales Tax
% of Total City
Sales Tax
Sales Taxes
% of Total City Sales
Received
Sector
Location
Rank
Received
Received
Sector
Location
Rank
Taxes Received
$ 841,571
General Merchandise Stores
S 348th
1
5.23%
$ 680,265
General Merchandise Stores -
S 312th & S 316th
1
6.26%
Grocery & Other
General Merchandise Stores -
777,348
General Merchandise Stores
S 312th & S 316th
2
4.83%
583,680
Wholesale Grocery & Other
S 348th St
2
5.38%
606,912
Construction
Other
3
3.77%
299,518
Construction
Other
3
2.76%
584,688
Miscellaneous Store Retailers
S 348th
4
3.63%
272,970
General Merchandise Stores - Grocery
Twin Lakes
4
2.51%
& Other
558,811
Building Material and Garden
Other
5
3.47%
272 258
Building Material and Garden
S 348th
5
2.51%
E ui meet and Su lie
Equipment and Su be
311,404
General Merchandise Stores
Other
6
1.93%
262,074
General Memhandise Stores -
Commons
6
2.41%
Clothin , Household, & Other
310,178
Bmlding Material and Garden
S 348th
7
1.93 %
241,018
Electronics and Appliance Stores
Pavillion
7
2.22
E ui mer and Su lie
293,331
Construction
Other
8
1.82%
168,939
Building Material & Garden
S 348th St
8
1.56%
Equipment & Supplies
274,877
General Merchandise Stores
S 348th
9
1.711/6
159,093
Motor Vehicle and Parts Dealers
S 348th St
9
1.471/.
General Merchandise Stores - Tools,
270,774
Motor Vehicle and Parts Dealers
Pavillion
10
1.68%
139,064
E ui went, Clothing & Other
Commons
10
1.28%
4 2 4
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 $16.1M in sales and use tax in 2020, and $10.86M in 2011.