1997 Annual Comprehensive Financial Report (97-005)City of Federal Way, Washington
COMPREHENSIVE
ANNUAL FINANCIAL
REPORT
Year Ended December 31, 1997
Prepared by
Management Services Department
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 1997
Table of Contents
Statement
INTRODUCTORY SECTION Reference Rly
Letter of Transmittal ............................ ..........
City Officials and Administrative Officers ................. . ............ . .......... 1
City Functional Organization Chart .............................................. 2
GFOA Certificate of Achievement .............................................. 3
FINANCIAL SECTION
Auditor's Opinion ........... ...........................................
Combined Financial Statements - Overview
("Liftable" General Purpose Finance Statements) ......................................
7
Combined Balance Sheet - All Fund Types and Account Groups ......................
1 8
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances -
AII Governmental Fund Types and Expendable Trust Funds .........................
2 11
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General, Special Revenue and Debt Service Fund Types
3 12
Combined Statement of Revenues, Expenses, and Changes in Fund Equity -
AIIProprietary Fund Types ...................................................
4 14
Combined Statement of Cash Flows - All Proprietary Fund Types .....................
5 15
Notes to the Financial Statements ..............................................
17
Combinina. Individual Fund and Account Grou
Statements and Schedules
General Fund............................................................. 45
Comparative Balance Sheet ................................................ 46
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balance 47
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual ....................................................... 48
Schedule of Expenditures Compared to Budget ................................. 49
Special Revenue Funds ..................................................... 55
Combining Balance Sheet .................................................. 56
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 60
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual ....................................................... 64
Debt Service Fund ......................................................... 71
Comparative Balance Sheet ................................................ 72
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balance ..... 73
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual ........................................... ....... .. 74
Capital Project Funds ...................................................... 75
Combining Balance Sheet .................................................. 76
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ...... 77
Table of Contents (Cont'd)
Combining, Individual Fund and Account Group
Statements and Schedules (continued)
Table Page
Enterprise Fund......................................................
79
Comparative Balance Sheet ................................................
80
Comparative Statement of Revenues, Expenses and Changes in Fund Equity .. .....
81
Comparative Statement of Cash Flows ...................................
82
Internal Service Funds ..................................................
83
Combining Balance Sheet .................................................
84
Combining Statement of Revenues, Expenses, and Changes in Fund Equity ..........
85
Combining Statement of Cash Flows ...................................... , ...
86
Trust and Agency (Fiduciary) Funds ...........................................
87
Combining Balance Sheet ....................................................
88
Federal Way Retirement System Expendable Trust Fund
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balance .......
89
General Fixed Assets Account Group .........................................
91
Schedule of General Fixed Assets - By Source ..................................
92
Schedule of General Fixed Assets - By Function and Activity .......................
93
Schedule of Changes in General Fixed Assets - By Function and Activity .............
94
STATISTICAL SECTION
General Governmental Expenditures and Other Uses by Function -
General, Special Revenue and Debt Service Funds ..............................
1
96
Schedule of Major Revenues and Other Financing Sources by Source -
General, Special Revenue and Debt Service Funds ..............................
2
97
Tax Revenue by Source - General, Special Revenue and Debt Service Funds ...........
3
98
Property Tax Levies and Collections ............................................
4
99
Assessed and Estimated Actual Value of Taxable Property ..........................
5
100
Property Tax Levies - Direct and Overlapping Governments ..........................
6
101
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
7
102
Computation of Limitation of Indebtedness .......................................
8
103
Computation of Direct and Overlapping Debt .....................................
9
104
Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total
General Governmental Expenditures ..........................................
10
105
Demographic Statistics......................................................
11
106
Property Value, Construction, and Bank Deposits ..................................
12
107
Principal Taxpayers.........................................................
13
108
Schedule of Insurance in Force ................................................
14
109
Salaries and Surety Bonds of Principal Officials ...................................
15
111
Miscellaneous Statistical Data .................................................
16
112
CITY OF
0
FIN",
June 19, 1998
People of the City of Federal Way
Honorable Mayor and City Council
THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF FEDERAL WAY
The comprehensive annual financial report of the City of Federal Way for the year ended December 31, 1997
is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the
presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the
enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the
financial position and results of operations of the various funds and account groups of the City. All disclosures
necessary to enable the reader to gain an understanding of the City's financial activities have been included.
FINANCIAL REPORTING STANDARDS AND FORMAT
The comprehensive annual financial report is presented in three sections: introductory, financial, and
statistical. The introductory section includes this transmittal letter, the City's organizational chart and a list of
principal officials. The financial section includes the general purpose financial statements and the combining
and individual fund and account group financial statements and schedules, as well as the State Auditor's report
on the general purpose financial statements. The statistical section includes selected financial and
demographic information, generally presented on a multi -year basis.
This report includes all funds and account groups of the City. There were no other governmental organizations
and activities for which the City was financially accountable during the reporting period.
As an aid to the reader, the major sections of this report have been segregated by divider pages which provide
introductions to the sections. In the same manner, fund categories are segregated within the
Combining/Individual Financial Statements section of this report. The fund types are presented in the
combined general purpose statements in the same sequence in which they appear in the combining section.
REPORTING ENTITY
The City is a noncharter Optional Code City with a Council -Manager form of government. The City Council
consists of seven councilmembers, all of whom are elected at large by the citizens of Federal Way to serve four
year terms. The City Manager, who serves as the chief executive officer, is responsible for day-to-day
administration of personnel, policies and programs. He is appointed by, reports directly to, and serves at the
pleasure of the City Council.
In response to direction given by the City Council, the number of staff members has been kept low and many
services are contracted through private entities. The services provided include: police protection, construction
and maintenance of streets, building inspection, jail services, planning and zoning, park maintenance,
recreation programs, public health services, surface water management, municipal court services, and general
administration, including finance. Services for a land use hearing examiner are contracted. During 1995, the
City Council directed staff to form it's own Police Department, effective November 16, 1996. This decision
lead to a reorganization in order to keep the number of departments to a minimal level. The City continues
to have seven major departments consisting of City Manager; Law; Management Services; Parks, Recreation,
and Cultural Services (PARCS); Public Safety; Public Works; and Community Development.
Fire protection and emergency medical services are provided by Fire District No. 39. The Lakehaven Utility
District delivers water and sewer services. Metro provides public transportation services. Public housing
services are the primary focus of the King County Housing Authority. The King County Library System
engages City residents through its library and reference services. School District No. 210 offers educational
programs for kindergarten through high school students, in addition to vocational training.
The City of Federal
Way incorporated on
February 28, 1990.
It is the seventh
largest city in
Washington State
with a population of
75,960 as of April 1,
1997. Federal Way
is located on a
plateau adjacent to
the Puget Sound in
King County, eight
miles north of
downtown Tacoma
and 25 miles south of
downtown Seattle.
The City occupies
approximately 19
square miles, and is
served by Interstate 5
and state highways
99 and 509.
ECONOMIC TRENDS
CITY OF FEDERAL WAY
Population Trends - 1970 to 2000
80,000 - 76,820 78 620
75,320 73,Si30 74,413 75,521 76,86>7
` MAN72,asa
70,000 - 6704
60,000 - ti
50,000 - ,1
40,000 -
c - 34,788
a 1.29,124
30,000 - _ I �
I •�' .1 � � 11 i�ty I. y
20,000 -
10,000 -
r"".
0-
1970 1980 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000
The population in the area now known as the City of Federal Way has grown at a moderate pace over the past
few years, with the population as of April 1, 1998 estimated to be 76,820. The 1997 population figure of
75,960 is an increase of .6% from the 1996 figure of 75,521, provided by the State Office of Financial
Management. Extending similar assumptions, the City is projected to reach a population base of 78,520 by
the year 2000.
iv
In 1997, there were 31,269 housing units in Federal Way. Of these units, 56% were single family and 44%
were multi -family units. These statistics for housing units show an increase of approximately 1.25% over
1996, with projections for the year 2000 reaching the 33,000 level.
CITY OF FEDERAL WAY
Housing Units - 1970 to 2000
35,000
33 000
30,264 3a 471 30,b29 30,883 91 280
30,000 29 406 29 892 27906
25,000 —
20,000
15,000 - - —
10,000 7773
-
1- L
1970 1980 1990 1991 1992 1993 1994 1995 1996 1997 2000
The community is
residential and
commercial, with the
populace employed
locally and in
neighboring cities such
as SeaTac, Kent,
Tacoma, Bellevue, and
Seattle. Employment
in Federal Way is
highly concentrated
(83%) in the retail and
service sectors which
respond primarily to
the needs of the local
market area population.
Employment was
estimated at 10,349 in
1988, 21,884 in 1991,
and is projected to
grow to 27,859 by the
year 2000 - a 266%
increase over 12 years.
Major employers are the SeaTac Mall, Weyerhaeuser, the School District, St. Francis Community Hospital,
World Vision, U.S. Postal Bulk Mail Center and Virginia Mason Clinic.
The City's 1997 taxable retail sales were $978.9 million, a 2.3% increase over the 1996 sales of $956.8 million.
The retail sector of the local economy is anchored by the SeaTac regional mall, Costco, Fred Meyer, Eagle
Hardware, and many other businesses adjacent to the City center. In addition, during 1996 the Pavillon Centre,
a 200,000 square foot mall, was developed, with major stores including Pet Smart, Barnes & Noble and QFC.
According to a listing of businesses registered with the City of Federal Way and sorted by Standard Industrial
Classification, the business economy appears to be configured as follows: retail trade 64.9%; services 9.3%;
contracting 6.3%; wholesale trade 7.5%; transportation and public utilities 4.0%; manufacturing 5.0% and
other 3.0%.
In 1997, new improvements to real estate totaled $38.0 million or approximately 1 % of the City's assessed
valuation. The total assessed value of taxable property in Federal Way was $4.19 billion which is slightly
higher than the 1996 assessed valuation of $3.96 billion. Real estate sales were approximately $375 million
in 1997 as compared to $305 million in 1996. A total of 2,779 building related permits were issued in 1997
with a total valuation of $71.8 million.
By mid-1997, the Puget Sound was the fastest growing large metropolitan area in the nation, with employment
rising in the 5 to 6 percent range. The aerospace rebound was dramatic as Boeing tried to ramp up production
to 40 planes per month by year end, with a target of 43 planes per month by the second quarter of 1998. New
orders continue to exceed production rates with orders to the end of October totaling 480 aircraft. The total
unfilled orders at the end of October, 1997 was 1,736 aircraft. The Boeing -McDonnell Douglas merger united
the world's premier commercial aircraft builder with a huge defense contractor and a distant third in the
world's airliner industry.
Washington's decade and one-half expansion has been reinvigorated by the aerospace boom. This occurred
in an environment already marked by growth in other sectors such as software, computer and electronic
equipment, and telecommunications. The Puget Sound Region is the home to three major companies that fuel
the economy: Boeing, Intel Corporation and Microsoft Corporation.
As the national ecomony decelerates, and Boeing pares down employment, the regional economy will slow.
In addition, the Southeast Asia crisis, an antitrust suit against Microsoft and the overheated stock market are
all areas to watch closely and can impact on our economy. Employment growth has already dropped from an
annualized rate of 6.0 percent in the last quarter of 1997 to 3.9 percent in the first quarter of 1998. According
to forecast, employment is expected to increase 4.2 percent in 1998 and 2.4 percent in 1999, down from 5.1
percent in 1997. Although the regional economy is projected to slow, the numbers for 1999 will continue to
look good. With a 2.4 percent employment growth rate, the region will still be expanding nearly twice as fast
as the nation. Per capita income will exceed the national average by 18.8 percent, even greater than the current
margin.
SIGNIFICANT EVENTS AND ACCOMPLISHMENTS
Since the City officially incorporated on February 28, 1990, 1997 was the seventh full year of service to the
community. Specific events or accomplishments in this year include the following:
• Continued development of effective interactive community policing model for the City's newly
formed Police Department, including the installation of mobile data terminals in patrol cars,
installation connection to WACIC and Valley Communication Dispatch computers
• Implemented the City's Domestic Violence Program, including prosecution, victim assistance and
advocacy
• Implemented a neighborhood speed watch program that was recognized by the State Traffic Safety
Commission
• Continued reduction of jail costs due to the implementation of additional arraignment calendars
Completed a $16.15 million bond for various projects including the Civic Theatre, Celebration Park
Improvements, Police Facility, Downtown Revitalization project and received an upgraded bond rating
from Fitch Investors Service
• Substantial completion of four transportation bond projects that were the result of the 1995/1996
transportation bond issue
• Completed five code amendments that covered the areas of regulatory reform, downtown parking,
essential public facilities, telecommunications, affordable housing, nonconforming code and
subdivision code
• Awarded the Celebration Park Improvement bid and received a $162,000 grant for Celebration Park
Improvements
• Continued the implementation of neighborhood development program, including Dumas Bay adopt-a-
park/beach project and neighborhood matching fund program
vi
• Implemented a first time home buyer program
• Managed downtown image/revitalization process resulting in streetscape improvements, an economic
development program, sign code mitigation, economic development and regional transit authority
coordination
• Obtained grant funding totaling $6.3 million for five transportation related projects
• Completed implementation of multi -family recycling program
• Renovated Klahanee Lake Community/Senior Center
• Successfully defended the City's adult entertainment ordinance in Superior Court
OUTLOOK FOR THE FUTURE
Long Term
The blueprint for Federal Way's future is found in its adopted Comprehensive Plan. Key economic
development goals in the plan include:
Housing and Population
• Preserve the predominantly single-family character and appearance of the community by establishing
population densities consistent with neighborhood and citywide objectives.
• Create a diverse population by encouraging residential development with a mix of housing types at
affordable costs, particularly for senior citizens and lower income families.
• Assure the high quality of new and existing housing by consistent enforcement of reasonable housing
and building standards that do not unnecessarily increase housing costs.
• Maintain safe, economically stable and attractive neighborhoods by providing a high level of public
services, including utilities, streets, sidewalks, parks and recreation facilities.
• Produce new housing that is planned and developed to protect natural systems and meet community
design and landscaping standards.
Commercial/Industrial
• Provide employment opportunities within the community by attracting new industries and professional
offices.
• Establish well-defined and limited neighborhood business centers to provide convenience services to
adjacent neighborhoods without adversely impacting neighborhood quality.
• Control strip development on major arterials while maintaining existing vital businesses.
• Define and implement a development and design concept for the City Center that establishes a vibrant
focal point and identity for the community.
vii
Build a transportation system that adequately serves commercial areas, encourages use of alternative
modes of transportation for work trips, and allows commercial and industrial growth without creating
additional congestion.
Establish design standards for commercial areas that are closely related to their functions but
encourage attractive appearance and protection of the environment.
Protect industrial areas from encroachment by other uses and upgrade the quality of existing industrial
areas.
Open Space
Identify and preserve open spaces to maintain the natural beauty of the community and to provide
views, protection of sensitive areas, recreation and other benefits.
Protect as open space natural systems and natural features recognized for their sensitivity to urban
development when development occurs.
Transportation
Develop a transportation system that provides mobility, and emphasizes safety and aesthetics as well
as capacity concerns.
Plan and design transportation improvements in a regional context that integrate land use and
circulation systems.
Natural Environment
Preserve the natural character of sensitive areas, habitats, wetlands, stream corridors, lakes and aquifer
recharge areas in order to protect public health, safety and welfare, and maintain the beauty of the
community.
Protect the quality of surface and groundwater, and maintain an adequate public water supply.
Short Term
The City's immediate objectives continue to be: 1) maintain its relative fiscal strength; 2) facilitate the
maturation of its municipal corporation; 3) make City government easier to access, understand, and participate
in; 4) realize the community's values and preferences; and 5) improve the quality of life for its people as well
as the climate for business activities. The 1997-1998 biennial budget was founded around four key functions
that are basic to municipal government and specifically the City of Federal Way, which are:
• Protection of public investment, such as infrastructure, rights of way, buildings, park lands, etc.;
• Enforcement of laws, codes and ordinances so as to ensure public safety and maintain an orderly
environment in which people can live, work and play;
• Inspection of buildings, structures, areas of grounds to ensure conformance to the laws enacted by
the legislative body or dictated by higher authority, which laws promote safety and the common good;
• Mandates which are new requirements levied on municipalities by higher levels of government often
without accompanying funding.
These four functions form' the structure of the delivery of basic municipal service which incorporated the
following:
viii
• The inclusion of a domestic violence enforcement program & implementation of neighborhood
development program
• Continue implementation 1997 bond projects, which includes Celebration Park improvements,
Knutsen Family Theatre Construction and operation, Downtown Revitalization program, Street
Overlay funding increase, and a Policy Facility
• Continue Implementation of the 1995/96 bond issue projects
• Continued operation of the City's newly developed police department and contain contracting costs,
including jail and court
• Continue to develop sports fields and to include provisions for the ongoing maintenance and
operations of those fields
• Implementation of the comprehensive plan, the economic development plan and the affordable
housing policy
FINANCIAL INFORMATION
The City of Federal Way is responsible for establishing and maintaining an internal control structure designed
to ensure that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate
accounting data are compiled to allow for the preparation of financial statements in conformity with generally
accepted accounting principles. The internal control structure is designed to provide reasonable, but not
absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the
cost of a control should not exceed the benefits likely to be derived, and 2) the evaluation of relative costs and
benefits of the control system requires estimates and judgments by management.
Single Audit
As a recipient of federal, state and county financial assistance, the City is responsible for maintaining an
adequate internal control structure to ensure compliance with applicable laws and regulations related to those
programs. This internal control structure is subject to periodic evaluation by management and the State
Auditor's Office.
As part of the City's single audit, tests are made to determine the adequacy of the internal control structure,
including that portion related to federal financial assistance programs, as well as to determine that the
government has complied with applicable laws and regulations. The results of the City's single audit for the
year ended December 31, 1997 indicated that there were no material weaknesses in the internal control
structure.
Budgetary Controls
The City maintains budgetary controls in accordance with the Revised Code of Washington (RCW 35A.33).
The objectives of these budgetary controls is to ensure compliance with legal provisions embodied in the
annual appropriated budget approved by the City Council. Activities of the General Fund, some Special
Revenue Funds, and Debt Service Fund are included in the annual appropriated budget. The level of
budgetary control at which expenditures cannot legally exceed the appropriated amount is established at the
individual fund level. The project -length based Special Revenue, Capital Projects, Enterprise and Internal
Service funds are management budgets only and therefore these budgets are not represented in the CAFR. The
ix
City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control.
All appropriations lapse at year end.
As demonstrated by the statements and schedules included in the financial section of this report, the City
continues to meet its responsibility for sound financial management.
Basis of Accounting
All governmental funds, the expendable trust fund and agency funds are accounted for using the modified
accrual basis of accounting. Under the modified accrual basis, revenues are recorded when received in cash,
except for revenues susceptible to accrual. Revenues considered susceptible to accrual are those that are
measurable and available to finance the government operation during the current period. Expenditures, other
than accrued interest on general long-term debt, are recorded at the time liabilities are incurred.
All proprietary funds, non -expendable trust funds and pension trust funds use the accrual basis of accounting.
Under the accrual basis, revenues are recorded when they are earned and expenses are recorded as soon as they
result in liabilities for benefits received.
GENERAL GOVERNMENT FUNCTIONS
Overview
The general governmental
analysis will include the
General Fund, all Special
Revenue Funds and the
Debt Service Fund.
The City added one special
revenue fund during 1997,
the Utility Tax Fund. This
fund was established to
account for the utility taxes
implemented to pay debt
service on the 1995, 1996
and 1997 bond issues
Overall financial
performance in the General
Fund, Special Revenue
Funds and Debt Service
Fund was very positive in
1997 vs 1996 FINANCIAL PERFORMANCE
General, Special Revenue and Debt Service Funds
50.0
ao.s
40.0 �I/y
32.3 32.2
y
30.0
E2 14.4
20.0 i� F 11.2 _
11.1 11.2
10.0
0.0
Revenues Ending Fund Balance
Beginning Fund Balance Expenditures
1997 0 1996
1997. Revenues and other sources of funds totaled $40.9 million as compared to $32.3 million for 1996. This
results in an increase of $8.6 million or 21%. Expenditures and other uses of funds totaled $37.7 million as
compared to $32.2 million for 1996, an increase of $5.5 million or 17%. Aggregate fund balances for these
funds ended the year totaling $14.4 million, which is approximately a $3.2 million increase. However,
excluding the interfund transfers, the revenues increased by $5.3 million or 17% and expenditures decrease
by $.2 million or .7%. The revenue increase is largely attributable to the increase in utility taxes of
approximately $3 million.
1997 vs 1996 FINANCIAL PERFORMANCE
General Fund
22.5
25 21.1
zz.7
20
2f.3
N
015—
=10-
O
2.3
R.2 �
5 ' 2.e
U ..
Revenues Ending Fund Balance
Bu4lnnlnp Fund Balance Expenditures
1997 1996
Revenue Summary
The General Fund ended 1997
with a $4,281,088 fund balance.
This was a $1,468,649 increase
over the fund balance at the end
of 1996, which represents a
52.2% increase. General Fund
revenues increased by
$1,226,054 or approximately
5.7% over 1996. The
expenditures decreased by
$1,655,380. This increase is
approximately 7.3% and is
attributable mainly to the
additional expenditures
associated with the start-up and
transition costs of our new
Police Department during 1996.
The following charts present a summary of General, Special Revenue, and Debt Service Fund revenues,
including other financing sources and residual equity transfers, for the 1996 calendar year.
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
Revenues and Other Financing Sources
Revenues
1997
1996
Change
Amount
Percent
Taxes
$ 21.861.900
$ 18,080,794
$ 3,781,106
20.9%
Licenses/Permits
1.112.135
917.219
194,916
21.3%
Intergovernmental
6,609,989
5,667,480
942.509
16.6%
Services/Charges
4.235,379
4,195,678
39,701
.9%
Fines/Forfeitures
576.054
520,670
55,384
10.6%
Interest Earnings
904.814
786,856
117,958
15.0%
Miscellaneous
246,516
142,540
103,976
72.9%
Other inancing Sources
5.333.403
2,029,230
3,304,173
162.8%
Total Revenues
$ 40,880 190
$ 32 340,467
$ 8,539,723
26.4%
The most significant dollar increase was in taxes and other financing sources in the amounts of $3,781,106
and $3,304,173 respectively. These increases are due to the additional utility taxes implemented for the
repayment of debt service on the 1997 bond issue. All utility taxes are receipted into a special revenue fund,
and are transferred to the debt service fund as needed, causing the increase in operating transfers. The increase
of $942,509 in intergovernmental revenues is due to a $1.5 million COPS Universal Hiring program grant
received over a three year period, which funds the hiring of an additional 20 police officers.
xi
1997 •REVENUES AND OTHER SOURCES
Gan®ra/, Spac/a/ Ravanua and Oabt S49rvic.9 Funds
Expenditure Summary
The following charts present a summary of the General, Special Revenue, and Debt Service Fund expenditures,
other financing uses and residual equity transfers out for the year ending December 31, 1997.
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
Expenditures By Function
Function
1996
Change
Amount Percent
General Government
$ 3,415,715
$ 3,831,238
$ (415,523)
-10.8%
Security of Persons & Property
10,282,388
10,269,193
13,195
.1%
Physical Environment
528,784
304,196
224,588
73.8%
Transportation
6,141,223
5,309,948
831,275
15.7%
Economic Environment
2,258,033
2,298,040
(40,007)
-1.7%
Health
457,211
488,604
(31,393)
-6.4%
Culture & Recreation
2,521,085
2,944,815
(423,730)
-21.8%
Capital.Outlay
319,120
1,677,848
(1,358,728)
-81.0%
Debt Service -Principal
1,222,090
432,280
789,810
182.7%
Debt Service -Interest
1,760,696
1,284,768
475,928
37.0%
Other Financing Uses
8,695,717
3,161,572
5,534,145
175.0%
Residual Equity Transfer Out
158,620
199,156
(40,536)
-20.4%
Total Expenditures
$ 37 760.682
$ 31201,658 658
5,559,024
1.7.3%n
XII
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
Ex enditures By Ot sect
DG ecr
1997
1996
Change
Amount
Percent
Personal Services
$ 13,983,091
$ 9,432,926
$ 4,550,165
48.2%
Supplies
555,903
840,821
(284,918)
-33.9%
Other Services and Charges
4,139,964
4,146,967
7,003
.2%
Intergovernmental
11,713,177
11,594,778
118,399
1.0%
Capital Outlay
1,951,355
2,522,788
(571,433)
-22.7%
Debt Service Principal
1,222,090
432,280
789,810
182.7%
Debt Service Interest
1,760,695
1,284,768
475,927
37.0%
Interfund Services
2,434,407
1,946,330
488,077
25.1%
Total Expenditures
$ 37,760,682
$ 32,201,658
$ 5,559,024
17.3010
The increase in interfund transfers is related to the transfer of utility taxes from a special revenue fund to the
debt service fund to pay for the debt service on the 1995-1997 bond issues. In addition, the Surface Water
Management Fund transferred over $2 million during 1997 to the Surface Water Management Capital Project
Fund for various capital projects. The decrease of 81 % in capital outlay is due to start-up costs during the
implementation of our new Police Department in 1996. Debt Service Principal increased in 1997 due to the
1995 and 1996 bond issues not requiring principal payment until 1997. Similarly, the debt service interest
increased for the 1996 bond issue that did not pay interest for a full year until 1997. The increase in
transportation is the result of allocating an additional $800,000 during 1997 to the Arterial Street overlay
program. Physical Environment increased due to additional grant funding received in 1997 for the City's Solid
Waste and Recycling program. The large increase in salaries and benefits is the result of the City's Police
department having its first full year of service in 1997.
1997 EXPENE)ITURES BY FUNCTION
General, Spacial Revenue and Debt Service Funds
1997 EXPENE:)ITUF,ES BY OBJECT
Ganarai, Spacial Ravanua and Oabt Sarvica Funds
Pe al Sarvlcae 37.0
Suppllros 7.0'M.
Cap[trf Putlny �,096
*l;nf"
arvlaalC ftargoebe Servlca9.0%
d 9arvlaes �.045
Intergovern-t 39.0 %
Fund Balance
Overall fund balances in the General, Special Revenue, and Debt Service Funds totaled $14.4 million in 1997
compared to $11.2 million in 1996, an increase of 27.8%. This increase is, in part attributable to the receipt
of a COPS Universal Hiring program grant, and other police department grants, that will be used to fund police
personnel in future years. In addition, the debt service fund balance increased by approximately $2.1 million
due to the addition of the bond issues in 1995, 1996 and 1997, which are being prefunded as funding becomes
available.
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
Analysis of Fund Balance
Change
Amount
Percent
Fund Balance
1997
1996
General
$ 4,281,088
$ 2,812,439
$ 1,468,649
52.2%
Special Revenue
Street
101,137
157,916
(56,779)
-36.0%
Arterial Street
551,665
432,019
119,646
27.7%
Utility Tax
506,872
---
506,872
100.0%
Solid Waste/Recycling
286,281
309,239
(22,958)
-7.4%
Special Contracts/Studies
132,125
124,257
7,868
6.3%
Snow and Ice Removal
128,837
80,066
48,771
60.9%
Two Percent for the Arts
8,792
8,792
---
n/a%
Community Development Block Grant
---
--
0.0%
Paths and Trails Reserve
3,544
5,476
(1,932)
-35.3%
Surface Water Management
1,071,023
1,630,097
(559,074)
-34.3%
Donations
--
2,046
(2,046)
-100.0%
Impact Fee
318,786
833,858
(515,072)
-61.8%
Strategic Reserve
1,731,588
1,721,781
9,807
.6%
Ai ort Strategic Reserve
300,000
300.000
---
0.0%
Subtotal Special Revenue
5,140,650
5,605,547
(464,897)
-8.3%
Debt Service
4,965,893
2,850,138
2,115,755
74.2%
Total Fund Balance
$ 14,387,631
$ 11,268,124
$ 3,119,507
27.8%
Xlv
PROPRIETARY OPERATIONS
In 1997, the City utilized six internal service funds to account for activities related to risk management,
management information systems, mail and duplication, fleet and equipment, buildings and furnishings, and
payroll benefits. Operation and depreciation related replacement charges to use s are based on office staff
counts, equipment used, and specific depreciation schedules. Residual equity transfers are recorded from other
City funds to finance first time asset acquisition.
The City established an enterprise fund during 1993 to account for the acquisition and operations of the
Dumas Bay Centre, a retreat facility, which was purchased with King County open space and conservation
futures funding. This Fund required a subsidy from the General Fund in 1997, since it was not fully
operational as an Enterprise Fund. This subsidy is recorded as an operating transfer. In addition, the bond
proceeds and other funding for the Civic Theatre are accounted for in this fund, which increased the operating
transfers needed in 1997.
PENSION TRUST FUND OPERATIONS
The City of Federal Way exercised its option as a newly incorporated municipality to create a substitute
retirement plan in lieu of participating in the Social Security program. Under the City's defined contribution
retirement plan, the City matches employee contributions equivalent to 6.2% of gross taxable earnings up to
Social Security earning limits. As a part of its matching contribution, the City pays insurance premiums for
survivors, accidental death and dismemberment, disability, and lump sum death benefits. The remaining
portion of the City's contribution (approximately 5.2% of gross taxable earnings) constitutes cash payments
to the expendable trust fund. The plan design uses the institutional method for investments. During 1994, the
City's Federal Way Retirement System Fund joined the Municipal Employees Benefit Trust Fund (MEBT)
for purposes of investing the fund assets. The MEBT consists of the cities of Bellevue, Redmond, Kirkland,
Edmonds, Mill Creek, Woodinville, and Federal Way. The Trust Fund assets are invested through Wells Fargo
Bank, Trustee under the direction of the MEBT Trust and Investment Advisory Committee.
DEBT ADMINISTRATION
During 1997 the City issued $16,150,000 in limited tax general obligation bonds for the funding of various
community investment projects, including sports fields and other improvements at Celebration Park, Civic
Theatre and related improvements at Dumas Bay Center, a public safety facility and a community revitalization
project that includes street lights, beautification and safety improvements in the downtown area.. A utility tax
of 3.63% has been established to pay the debt service on these bonds. The City's outstanding debt is
approximately 1 % of its taxable assessed valuation. As of December 31, 1997, the City's remaining debt
capacities are summarized below:
Use
• General Government Use
Non -voted:
Voted:
Subtotal General
• Park and Open Space Use
• Voted:
• Utility System Use
• Voted:
Total Capacity
Capacity
$ 27,625,531
41,774,402
$ 69,399,933
104,436,006
104,436,006
$278.271.946
xv
Non -voted (councilmanic) general obligation bonds and certificates of participation are reductions in the
general government debt capacity. To the extent that such debt is issued, the City's voted debt capacity is
reduced.
CASH MANAGEMENT
The City began investing outside the State Investment Pool in November 1994. Based on an adopted
investment policy and oversight from an investment committee, the City operates a conservative cash
management program, investing surplus cash as determined by anticipated cash flow needs. Investment
decisions are based on established investment policies in compliance with Washington State statutes, with
consideration given first to safety, secondly to liquidity, and lastly to yield. The City's portfolio at December
31, 1997 consisted of U.S. Government treasury and agency securities, prime bankers acceptances, and
investments in the Washington State Investment Pool, with maturities ranging from one day to two years.
Safeguarding assets is of primary concern for the City. Pursuant to the Governmental Accounting Standards
Board (GASB) statement #3, the City provides detailed disclosure regarding the risk associated with deposits
and investments held by the City. GASB statement #3 established a categorization of investments and deposits
based on risk. Category 1 includes investments that are either insured, registered, or held by the City or its
agent in the City of Federal Way's name; category 2 includes uninsured and unregistered investments held by
the counterparty's trust department or agent in the City's name; and category 3 includes uninsured and
unregistered investments held in the counterparty's trust department or agent, but not in the City's name. This
categorization is included in note 4 of the general purpose financial statements. In order to assure the highest
degree of safety on all City investments, a safekeeping agreement was established for all securities purchased
by the City prior to implementing our in-house investment program during 1994.
The Washington State Treasurer manages a State Investment Pool for use by any city, county, town, municipal
corporation, or special taxing district within the state. Municipalities determine the amount and length of
investment in the pool based on individual cash flow needs. Interest is earned on the pool's actual experience
for the month, less an administrative fee equivalent to five basis points (.05%). At December 31, 1997, the
City had $21,250,165 invested in the State Investment Pool. In 1997, the average monthly earnings rate for
the entire portfolio was approximately 5.96% as compared to the average monthly earnings rate for the State
Investment Pool of 5.57%.
RISK MANAGEMENT
The City maintains insurance against most normal hazards except for unemployment insurance, for which it
has elected to become fully self -insured. Related premiums received by the Risk Management Fund are used
to reimburse the State Employment Security Department for unemployment benefits paid to eligible
individuals, and to establish reserves for the payment of estimated future unemployment claims liability.
As of February 1, 1994, the City elected to self -insure its dental program as well as unemployment
compensation. The City utilized the payroll benefits internal service fund to account for the dental self-
insurance program. Subsequently, on February 1, 1995, the City elected to return to an insured dental program
through Washington Dental Service. Therefore, as of this date, the City is no longer self -insuring its dental
plan.
Through its Risk Management Fund, the City is also recovering insurance premium costs for general liability
coverage and building reserves for a future general liability self-insurance program. During 1997, the City
purchased commercial insurance policies from commercial insurers. It is the opinion of the City's legal staff
that at year-end there were no outstanding claims that met expenditure accrual or loss disclosure criteria.
xvi
The City's industrial insurance is provided by Washington State and is administered by the Department of
Labor and Industries. The following are benefits provided by industrial insurance: medical services, damaged
clothing, travel expenses, time -loss payments, vocational rehabilitation, partial disability awards, pension
awards, and survivor benefits.
INDEPENDENT AUDIT
State law requires an annual audit of all City books of account, financial records, and transactions by the State
Auditor, an independently elected state official. In addition to meeting the requirements set forth under state
law, the audit was also designed to meet the requirements of the federal Single Audit Act of 1984 and related
OMB Circular A-128. The 1997 audit of the City has been completed in conformance with generally accepted
auditing standards. The financial statements of all City funds and account groups have been included in this
audit. The City has been given an unqualified opinion for 1997. The State Auditor's report on the general
purpose financial statements is included in the financial section of this report.
AWARDS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the City of Federal Way for its comprehensive annual
financial report (CAFR) for the year ended December 31, 1996. The Certificate of Achievement is a
prestigious national award recognizing conformance with the highest standards for preparation of state and
local government financial reports.
In order to be awarded a Certificate of Achievement, a governmental entity must publish an easily readable
and efficiently organized CAFR, the contents of which conform to program standards. Such reports must
satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City of Federal Way has received a
Certificate of Achievement for the last six years (fiscal years ended 1991- 1996). We believe that our current
report continues to conform to the Certificate of Achievement Program requirements, and we are submitting
it to the GFOA.
The City of Federal Way also received the Government Finance Officers Association Distinguished Budget
Presentation Award for its biennial budget for the years beginning January 1, 1997 and 1998. 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.
ACKNOWLEDGMENTS
The preparation of this comprehensive annual financial report represents the culmination of months of
concerted teamwork by the entire staff of the Management Services Department. Many members of the
department demonstrated unswerving personal determination and dedicated many long days of focused
attention to produce this unique and exemplary. document. Very special thanks are due to Tho Kraus, Mari
Doring, Betty Nielsen, Tam Swett, Cathy Rafanelli, and Marj Currie -Hicks.
In addition, staff in all City departments should be recognized for responding so positively to the requests for
detailed information which accompany each annual audit. The role of the State Auditor's Office should also
be acknowledged as a significant contribution to a fine product.
xvii
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,
Kenneth Ny g
City Manager
Marie Mosley
Deputy Director of Management Services
City of Federal way / 1
CITY OFFICIALS
rf
MAHLON "SKIP" PRIEST HOPE ELDER MARY GATES
Mayor Deputy Mayor Councilmember
r
MICHAEL PARK
Councilmember
RON GINTZ
Councilmember
PHIL WATKINS
Councilmember
KENNETH E. NYBERG
City Manager
OTHER ADMINISTRATIVE OFFICERS
JACK DOVEY
Councilmember
DeputyCity Manager—., . .......... ...........................................
................... ................................. Philip Keightley
CityAttorney...............................................................................................................................Londi
Lindell
CityClerk....................................................................................................................................
Chris Green
Community Development Director...............................................................................................Greg
Moore
ManagementServices Director.....................................................................................................Iwen
Wang
Parks, Recreation and Cultural Services Director................................................................Jennifer Schroder
PublicSafety Director...................................................................................................................Ron
Wood
PublicWorks Director......................................................................................................................Cary
Roe
2 / City of Federal Way
Peo le of Federal Way
Mayor and Cit : Council
Mahlon "Skip" Priest, Mayor
Hope Elder, Deputy Mayor
Mary Gates Michael Park
Ron Gintz Phil Watkins
Jack Dovey
City Manager
Kenneth Nyberg
Staff: 6
Community
Parks, Rr creatiart>
Development
& Cultural Services:
Gre : Ma.ore
Jennifer Schrader
.Current Planning
-Recreation Programs
.Land Use
.Ground Maintenance
.Building Permits/
.Park Operations
Inspections
.Community/Sr Center
-Code Compliance
.Facility Maintenance
-Dumas Bay Centre
.Civic Theatre
Staff. 27
Staff: 23.5
City
Attorn.ey::
-Civil Legal Svcs/
Litigation
-Prosecution
.Advise Council
Boards, Commissions
& staff
.Advice/Drafting
Ordinances
Staff: 9
$yards and Commissions
-Arts Commission
.Diversity Commission
-Ethics Board
.Human Services Commission
-Parks & Recreation Commission
.Planning Commission
-Youth Commission
.Civil Service Commission
Public Safety
Ron: W.40d:
Public Works
Gary Roe.
.Drug Awareness
.Development Svcs
Resistance Education
.Street Maintenance
.Crime Analysis/
.Traffic Operation
Prevention
.Surface Water Mgmt
-Traffic Enforcement
.Solid Waste/
.Investigation
Recycling
.Jail Services
.Neighborhood
Safety
.Transportation
.System Planning
Staff: 127 Staff: 29.5
Management
Serul.Ces
lwerr ilita n.g
.City Clerk
.Finance
-Human Resources
-Risk Management/
Purchasing/Fleet
.Systems
Staff: 25
City of Federal Way/3
Certif icate of The Government Finance
Officers Association of the
Achievement United Sates and Canada
(GFOA) awarded a
Certificate of Achievement
for Excellence for Excellence in Financial
Reporting to the City of
in Financial Federal Way for its
comprehensive annual
financial report for the fiscal
year ended December 31,
Reporting 1996. The Certificate of
Achievement is a prestigious
national award recognizing
Presented to conformance with the highest
standards for preparation of
state and local government
City of Federal Way, financial reports.
Washington C order to be awarded a
Certificate of Achievement, a
government unit must publish
For its Comprehensive Annual an easily readable and
efficiently organized
Financial Report comprehensive annual
for the Fiscal Year Ended financial report, whose
contents conform to program
December 31, 1996 standards. Such CAFR must
A Certificate of Achievement for Excellence in financial satisfy both generally
Reporting is presented by the Government Finance Officers accepted accounting
Association of the United States and Canada to principles and applicable
government units and public employee retirement legal requirements.
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest A Certificate of Achievement
standards in government accounting year only. The City of
valid for a period of one
and financial reporting. y
Federal Way has received a
Certificate of Achievement
for the last seven consecutive
years. We believe our
r current report continues to
U TECS AM conform to the Certificate of
ANO
N Achievement ro ram
a, CNPORAATION s President p g
y, 5 requirements, and we are
rH,,sa 110,C.psubmitting it to GFOA.
Executive Director
CITY •F
Legislative Building Washington State Auditor
PO Box 40021
Olympia, Washington 98504-0021 Brian Sonntag
INDEPENDENT AUDITOR'S REPORT
June 5, 1998
The Honorable Mayor and City Council
City of Federal Way
Federal Way, Washington
(360) 902-0370
FAX (360) 753-0646
TDD Relay 1-800-833-6388
http://www.wa.gov/sao/
We have audited the general-purpose financial statements of the City of Federal Way, King County, Washington, as of and
for the year ended December 31, 1997, as listed in the table of contents. These financial statements are the responsibility
of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
Our audit was performed pursuant to the Revised Code of Washington 43.09.260, under which a full report on the results
of this audit will be issued. This report may include findings and recommendations on compliance matters, internal control
procedures, and questionable costs or contingencies that would not be material in relation to the general-purpose financial
statements taken as a whole.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
City of Federal Way, King County, Washington, at December 31, 1997, and the results of its operations and cash flows of
its proprietary fund types for the year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the general-purpose financial statements taken as a whole.
The combining, individual fund, and account group financial statements and schedules listed in the table of contents are
presented for purposes of additional analysis, and are not a required part of the general-purpose financial statements of the
City of Federal Way, King County, Washington. The information has been subjected to the procedures applied in the audit
of the general-purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the
general-purpose financial statements taken as a whole.
The other data included in this report, designated as the statistical section in the table of contents, has not been audited by
us and, accordingly, we express no opinion on such data.
Sincerely,
BRIAN SONNTAG, CGFM
STATE AUDITOR
General Purpose
Financial Statements
of Federal Wa v / 8
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
December 31 1997
ASSETS
Equity in pooled cash and investments (note 4)
Cash with escrow agent (note 4)
Cash - deferred compensation (note 9)
Investments with plan administrator (note 4)
Prepaid Insurance
Receivables (net)
Taxes (note 5)
Accounts and contracts
Interest
Employee Loans
Due from other funds/interfund loans receivable (note 13)
Due from other governments (note 5)
Property/equipment/improvements (net) (note 7)
Construction work in progress (note 7)
Amount available in debt service funds (note 12)
Amount to be provided for retirement of
long-term debt (note 12)
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Retainage payable - with escrow agent
Due to other governments (note 6)
Due to other funds/interfund loans payable (note 13)
Deferred compensation payable (note 9)
Deposits payable
General obligation bonds (note 12)
Long-term loan payable (note 12)
Certificates of participation payable (note 12)
Deferred revenues
Compensated absences payable (note 12)
TOTAL LIABILITIES
Fund equity and other credits:
Contributed capital (note 14)
Investment in general fixed assets (note 7)
Retained earnings - unreserved
Fund balance:
Reserved for.
Interfund loans
Employee retirement
Debt service
Paths and trails
Petty cash/change fundladvance travel
Police special funds
Unreserved:
Designated for COPS grants
Designated for snow & ice removal
Undesignated
TOTAL FUND EQUITY AND OTHER CREDITS
TOTAL LIABILITIES & FUND EQUITY & OTHER CREDITS
See accompanying notes to financial statements
Statement 1
Governmental Fund Types
Special Debt Capital
General Revenue Service Projects
S 3,825,514
$ 5,033.525
$ 4,745.498
$ 24,538.138
-
-
179 025
198,240
98,124
165,331
-
61,232
455,964
174,265
45,329
59,083
55.566
225,867
96,516
26,480
-
69,307
1,258,440
402,162
482,662
5,485,271
6. 775, 338
4, 666, 395
25. 669, 264
256,184
175,473
502
640,233
78,924
44,680
16,026
11,787
6,074
38.606
-
-
179,025
276,792
21,872
-
136, 550
107,218
-
10,551
216.469
443,332
227,477
136,039
1,204,183
934,688
502
886,443
10,000
-
4,965,893
-
3,544
20,009
-
92,016
674, 778 -
128,837
3,484,285 5,008,269 24,782,821
4,281,088 5,140.650 4,965,893 24,782,821
$ 5,485,271 S 6. 775.338 $ 4, 666.395 $ 25, 669,264
Page 1 of 2
City of Federal Way / 9
Statement 1 (continued)
Proprietary
Fiduciary
Account Groups
Totals
^.ternal
Expendable
General
General Long-
(Memorandum Only)
Enterprise
Service
Trust
Fixed Assets
term Debt
1997
1996
$ 1 205.588
$ 3 392,181
$
$
$ $
42, 740, 444 $
28 870 943
32.533
-
211,558
237,648
_
1 225,577
5,491.556
5,491,556
3,460.570
3,565
-
3,565
721
-
-
461,695
197005
56,860
424
-
748,745
259 061
9,565
39,492
16.968
451.870
308.513
166,711
166,711
144.757
32,144
161.777
-
386.224
189,212
159
6
-
2,143,429
1,685416
2,740,156
4,796,964
37,138.000
44, 675,120
39.865, 093
915,307
-
-
1,774,071
-
2.689,378
3.012.288
-
-
-
4,965,893
4,965,893
2,850,138
-
-
35, 783, 583
35, 783, 583
22, 683,174
4,9 22,312
8.3 44,409
5. 775.235
38,912.071
40,749,476
140,919,771
104,990,116
25,560
45,214
-
1,143,166
2,357,265
3,692
-
-
145,322
1,318
-
56,469
58,409
32,533
211,558
209,300
3,041
301,705
3.409
206
131,699
386,224
189,212
-
-
1,225,577
10,855
6,034
676,690
584,769
37,665,000
37,665.000
22.575 000
1,466,063
1,466,063
1,387,616
1,295,t700
1,020,000
2,315,000
2,625,000
60,937
424,453
249,550
2,648
25.031
598,413
626,142
491,604
136,431
1,506.069
40,749,476
45,417,792
31,958,029
2,555,267
2,897,838
5,453,105
5,625,721
-
38, 912, 071
38, 912, 071
35, 236, 897
2,300,504
3,990,502
6,291,006
3,200,177
-
10,000
10,000
5,675,235
5,675,235
3,620,700
-
4,965,893
2,850,138
3,544
5,476
110
20.119
18,146
92,016
-
674,778
-
128, 837
80,066
-
-
33,275.375
22,384,766
4855,861
6.889.340
5.675,235
38,912,071
95,501,979
73,032,087
4.992,312
$5.3 44,409
$ 5,B75_235
$ 38.912,071
$ 40,749,476 $
140,919,771 $
104,990, 116
Page 2 of 2
CITY OF
City of Federal Way / 11
Statement 2
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ALL GOVENMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS
For the Year Ended December 31 1997
Fiduciary
Governmental Fund Types
Fund Type
Totals
Special
Debt
Captal
Expendable
(Memorandum only)
General
Revenue
Service
Projects
Trust
1997
1996
REVENUES:
Taxes
S 16,123,086
$ 3,859,645
$ 1,879,269
$ -
$ -
S 21,861.900
$ 18 080 794
Licenses and permits
1,048,918
63,217
-
-
1.112,135
917 219
Intergovernmental
3,352,255
3,257,734
-
697,496
-
7.307,485
6879987
Service charges and fees
846,065
3,389,314
-
47,420
-
4.282799
4,195 678
Fines and forfeitures
576,054
.-
-
-
-
576,054
520 670
Miscellaneous:
Interest
242,383
428,120
234,311
1,124,949
1,271,576
3,301,339
1, 758.740
Employeelemployer contributions
-
-
-
-
1,229,625
1,229,625
1.041 298
Other
226,375
19,846
294
60.400
306,915
403 992
TOTAL REVENUES
22,415.136
11,017.776
2.113,674
1,930,265
2,501,201
39,978,252
33,798 378
EXPENDITURES:
Current:
General government
3,366,715
50,000
-
-
446,666
3,862,381
4,004,964
Security of persons and property
10,282,388
-
-
-
-
10,282,388
10.269,193
Physical environment
20,869
507,915
-
-
-
528.784
304,196
Transportation
75,584
6,065,639
-
6,141,223
5.309,948
Economic environment
2,213,059
44,974-
-
2,258,033
2.298.040
Health
457,211
-
-
457,211
488,604
Culture and recreation
2,521,085
-
2,521,085
2,944,815
Capital outlay
319,120-
8,925,205
-
9,244,325
7,663,943
Debt service:
Principal
1,222,090
-
-
1,222,090
432.280
Interest, fiscal chg and debt issue cosh
1,760,696
179,995
1,9409691
14318 600
TOTAL EXPENDITURES
19,255,031
6,668,528
2,982,786
9,105,200
446,666
38,468,211
35 034.583
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
3,160,105
4,349,248
(868,912)
(7,174,935)
21054,535
1,520,041
(1.236,205)
OTHER FINANCING SOURCES (USES):
Bond proceeds
-
-
-
14.912,850
14.912,850
2,627,833
Grants
-
-
398.024
398,024
-
Public works trust fund ban proceeds
-
-
-
-
1.166,580
Operating transfers in (note 13)
122,005
2,226,731
2,984,667
3.781,652
9,115,055
3,144,730
Operating transfers out (note 13)
(1,705,301)
(6,990,416)
(1,180,057)
(9,875,774)
(3,404,214)
TOTAL OTHER FINANCING SOURCES (USES) (1,583,296)
(4,763,685)
2,9841667
17,912,469
14,550,155
3,534 929
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
1,576,809
(414,437)
2,115,755
10,737,534
2,054,535
16,070,196
2,298,724
FUND BALANCES AT BEGINNING OF YEAR
2,812,439
5,605,547
2,850,138
14,080,468
3,620,700
28,969,292
26,886,443
Residual equity transfers out (note 13)
(108,160)
(50,460)
-
(35,181)
(193,801)
(215.875)
FUND BALANCES AT END OF YEAR
$ 4,281,088
$ 5,140,650
S 4,965,893
$ 24,782,821
$ 5,675,235
$ 44,845,687
$ 28,969.292
See accompanying notes to financial statements.
City of Federal Way / 12
Statement 3
COMBINED STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES -
BUDGET AND ACTUAL
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE
FUND TYPES
FOR WHICH ANNUAL BUDGETS HAVE BEEN LEGALLY ADOPTED
For the Year
Ended December 31.
1997
General Fund
Special Revenue Fund
Types
Variance
Variance
Favorable
Favorable
Budget
Actual (Unfavorable)
Budget
Actual
(Unfavorable)
REVENUES:
Taxes
$ 15,831.062
$16.123,086 $
292,024
$ 3.468,705
$ 3,659,545
$ 390.840
Licenses and permits
1,073,055
1,048,916
(24,137)
80,473
63.217
(17 256)
Intergovernmental
3,220.249
3,352,255
132,006
2.842.980
2.818,422
(24,558)
Service charges and fees
873,216
846,065
(27,151)
3.200,246
3,171,731
(28.515)
Fines and forfeitures
639,830
576,054
(63,776)
Miscellaneous:
Interest
344.527
242,383
(102,144)
280,289
390,297
110008
Other
107,634
226,375
118,741
19,846
19,846
TOTAL REVENUES
22,089.573
22.415,136
325,563
9,872,693
10,323.058
450,365
EXPENDITURES:
Current:
General Government
4,201,209
3,365,715
835,494
-
_
Security of persons and property
11,179,159
10,282,388
896,771
-
Physical environment
21,500
20,869
631
586,757
507.915
78.842
Transportation
1
75,584
(75,584)
6.761,115
6,065.639
695,476
Economic environment
2.430.133
2,213,059
217,074
-
-
Health
486,832
457,211
29,621
_
Culture and recreation
2,649,091
2,521,085
128,006
Capital outlay
20,000
319,120
(299.120)
Debt service:
Principal
-
_
Interest and other debt issue costs
-
TOTAL EXPENDITURES
20,987,924
19,255.031
1,732,893
7,347.872
6,573,554
774,318
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
1,101,649
3,160,105
2,058,456
2,524,821
3,749,504
1,224,683
OTHER FINANCING SOURCES (USES)
Operating transfers in (note 13)
122,005
122,005
2,226,731
2,226,731
-
Operating transfers out (note 13)
(1,554,745)
(1,705,301)
(150,556)
(5,969,833)
(5,881,422)
88,411
TOTAL OTHER FINANCING SOURCES (USE
(1,432,740)
(1,583.296)
(150,556)
(3,743.102)
(3,654,691)
88,411
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(331,091)
1,576,809
1,907,900
(1,218.281)
94.813
1,313,094
FUND BALANCE AT BEGINNING OF YEAR
2,812,439
2,812,439
4.8W.594
4,636,594
Residual equity transfers out (note 13)
(260.608)
(108,160)
152,448
(50,176)
(50,460)
(284)
FUND BALANCE AT END OF YEAR
$ 2,220,740
$ 4,281,088 $
2.060,348
$ 3,368,137
$ 4,680,947
S 13112.8110
See accompanying notes to financial statements. Page 1 of 2
City of Federal Way / 13
Statement a (continued)
Totals
Debt Service Fund Type
(Memorandum
Only)
Variance
Variance
Favorable
1997
Favorable
1996
Budget
Actual
(Unfavorable)
Budget
Actual
(Unfavorable)
Actual
$ 1.100.000
$ 1,879,269
$ 779,269
$ 20.399,767 $
21.861,900 $
1,462,133 $
18,080794
-
1.153,528
1,112,135
(41,393)
917219
6,063,229
6,170,677
107,448
5,467160
4.073,462
4,017,796
(55,666)
4,012,884
-
-
639,830
576,054
(63,776)
520,670
132,739
234,311
101,572
757,555
866,991
109,436
732,630
-
294
294
107,634
246,515
138,881
142,540
1,232,739
2,113, 874
881.135
33,195, 005
34, 852, 068
1,657,063
29, 873- 897
4,201,209
3,365,715
835.494
3,666,681
11,179,159
10.282, 388
896,771
10. 269,193
608,257
528,784
79,473
304.196
6,761,115
6,141,223
619,892
5,309,948
2,430,133
2,213,059
217,074
2.253,424
-
-
486,832
457,211
29,621
488.604
2,649,091
2,521,085
128,006
2,944,815
-
-
-
20,000
319,120
(299,120)
1,549,146
1,226,866
1,222.090
4,776
1,226,866
1,222,090
4,776
432,280
1,783,439
1,760,696
22,743
1,783,439
1,760,696
22,743
1,284.768
3,010,305
2.982,786
27,519
31,346,101
28,811.371
2,534,730
28,503,255
(1,777,566)
�868.912)
908,654
1,848,904
6,040,697
4,191,793
1,370,642
2,959,516
2,984,667
25,151
5,308,252
5,333,403
25,151
1,929.230
-
-
(7,524,578)
(7,586,723)
(62,145)
(3,014,652)
2,959,516
2,984,667
25,151
(2,216,326)
(2,253,320)
(36,994)
(1,085,422)
1,181,950
2,115.755
933.805
(367,422)
3.787,377
4,154,799
285.220
2, 850,138
2,850,138
-
10, 299,171
10.299,171
-
10, 213,107
(310,784)
(156.620)
152,164
(199,156)
$ 4, 032, 088
$ 4, 965. 893
$ 933,805
$ 9,620,965 $
13, 927, 928 $
4,306,963 $
10, 299,171
Page 2 of 2
City of Federal Way / 14
COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND EQUITY - ALL PROPRIETARY FUND TYPES
For the Year Ended December 31, 1997
OPERATING REVENUES:
Service charges and fees
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personal services
Materials and supplies
Services and charges
Intergovernmental
Insurance
Claims
Depreciation
Interfund Charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES):
Subsidy from interlocal grant
Interest income
Interest expense
Donations/contributions
GO bond proceeds
Debt issue cost
State grants
Gain/loss on sale of fixed assets
TOTAL NON -OPERATING
REVENUES(EXPENSES)
INCOME(LOSS) BEFORE
OPERATING TRANSFERS
Operating transfers in (note 13)
Operating tranfers out (note 13)
NET INCOME (LOSS)
Add depreciation reducing contributed capital
Increase (decrease) in retained earnings
RETAINED EARNINGS, January 1
RETAINED EARNINGS, December 31
CONTRIBUTED CAPITAL, January 1 (Note 14)
Increases to contributed capital (note 14)
Less amortization
CONTRIBUTED CAPITAL, December 31
FUND EQUITY AT END OF YEAR
See accompanying notes to financial statements.
Statement 4
Totals
Enterprise Internal Service (Memorandum only)
$ 346,465 $
2.516,139 $
2,862,604 $
2,172,074
2,795
131,243
134,038
121,048
349,260
2,647,382
2,996,642
2,293,122
117,161 401,517
52,196 184,540
290,548 856,451
- 8,641
293,513
- 73,782
41,188 839,692
16,232 -
517,325 2,658,136
(168,065) (10,754)
518,678
530.344
236,736
156,465
1,146,999
850,875
8,641
4,774
293,513
113,183
73,782
119,327
880,880
602,522
16,232
18,093
3,175,461 2,395,583
(178,819) (102,461)
42.000
6
42,006
50.500
199,091
249,591
160,158
-
(77,378)
(77,378)
(86,622)
200
200
_
1,550,000
1,550,000
(19,109)
(19,109)
159
-
159
5,506
1,445
1,445
-
1,623,750
123.164
1,746,914
79,042
1,455,685
112.410
1,568,095
(23,419)
643,000
121,781
764,781
259,484
(4,062)
-
(4,062)
-
2,094,623
234,191
2,328,814
236,065
41,188
720,937
762,125
446,159
2,135,811
955,128
3,090,939
682,224
164,803
3,035,374
3,200,177
2,510,575
2,300,614
3,990,502
6,291,116
3,200,177
2,596,455
3,029,266
5,625,721
4,326,684
591,764
591,764
1,785,059
(41,188)
(723,192)
(764,380)
(486,022)
2,555,267
2,897,838
5,453,105
5,625,721
4,855,881 6,888,340 $ 11,744,221 $ 8,825,898
City of Federal Way / 15
Statement 5
COMBINED STATEMENT OF CASH FLOWS
ALL PROPRIETARY FUND TYPES
For the Year Ended December 31 1997
Totals
Enterprise
Internal Service
(Memorandum
only)
Fund
Funds
1997
1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users 35:
366 146
S 2632070
$ 2 998 216 S
2 230 741
Cash received from other funds for goods and services
(31,506)
(31 506)
4 987
Cash received from other governments for goads and servic
6,241
-
6 241
Cash payments to suppliers for goods and services
(44.913)
(1 352.761)
(1 397 674)
(908 502)
Cash payments to employees
(116380)
(400.479)
(516859)
(519680)
Cash payments to claimants
-
(35.732)
(35 732)
(45 509)
Cash payments to other funds for services
(18 244)
(9 201)
(27 445)
(57 570)
Cash payments for other services and charges
(290,548)
(290 548)
(258 862)
Cash payments for taxes
4,330
4 330
(834)
Cash payments for damage deposits
3.966
3.966
(64)
Other operating receipts
36.836
36.836
16 363
NET CASH PROVIDED (USED)
BY OPERATING ACTMTIES
(120.908)
870,733
749 825
461 070
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:
Subsidy from slate grant
159
6
165
-
Subsidy from interlocal grant
42 000
-
42.000
5 682
Operating transfers in (note 13)
643,000
121 781
764,781
259 484
Operating transfers out (note 13)
(4,062)
NET CASH PROVIDED (USED) BY NON.
CAPITAL FINANCING ACTIVITIES
681,097
121,787
806.946
259 484
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Bond proceeds
1,550.000
1,550,000
Debt issue costs
(19.109)
-
(19.109)
-
Donations/contributions
200
200
Acquisition of capital assets/construction work in progress
(1.032.412)
(266.958)
(1.299,370)
(326.121)
Cash contributions for capital acquisitions (note 14)
-
193 801
193,801
215 875
Proceeds from sale of fixed assets
-
3 700
3.700
5,753
Principal paid on debt service
(225 000)
(225,000)
(215 000)
Interest and fiscal charges on debt service
(77,378)
(77.378)
(86 623)
NET CASH PROVIDED (USED) FOR CAPITAL
AND RELATED FINANCING ACTIVITIES
498.679
(371,835)
126,844
(406 116)
CASH FLOWS FROM INVESTING ACTMTIES:
Receipts of interest
42.073
188,002
230,075
161 499
NET CASH PROVIDED (USED) IN INVESTING
ACTIVITIES
42,073
188.002
230,075
161499
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
1.100941
808.687
1,913,690
475,937
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
104.647
2.583.494
2,688.141
2206,522
CASH AND CASH EQUIVALENTS AT END OF YEAR
1,205,588
3,392.181
4 601.831
2682.459
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING
ACTIVITIES
Operating income
(168,065)
(10,754)
(178,819)
(102.461)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation expense
41.188
839.692
880,880
602.522
(Increase)decrease in accounts receivable
(44,050)
(424)
(44,474)
-
(Increase)decreass iri prepaid insurance
-
(2.844)
(2.844)
1,824
(Increase)decrease in due from other funds
(31..506)
(3.797)
(35.303)
127,494
(Increase)decrease in due from other governments
6.241
(6)
6.236
12,090
Increase(decrease) in voucherstaccounts payable
7 283
(26.580)
(19.297)
(4,865)
Increase(decrease) in due to other funds
(2.012)
74,654
72,642
(187.413)
Increase(decrease) in due to other governments
-
(248)
(248)
(62)
Increase(decrease) in deposits payable
8.296
-
8,296
1 277
Increase(decrease) in deferred revenues
60 936
-
60,936
-
Increase(decrease) in accrued payroll/
compensated absences payable
781
1 040
1.821
10,664
TOTAL ADJUSTMENTS
47,157
881487
928,644
563.531
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
(120.908)
870.733
749.825
461.070
SCHEDULE OF NONCASH INVESTING,
CAPITAL AND FINANCING ACTIVITIES:
Contributions of capital assets (note 14) 5
i 397.963
$ 397,963 $
1.564136
See accompanying notes to financial statements
CITY •F
�V,
City of Federal Way / 17
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1997
INDEX
Note
1 Summary of Significant Accounting Policies.................................................................
ReportingEntity....................................................................................................
Basis of Presentation --Fund Accounting ...................................:. .,......................... .
Basisof Accounting.............................................................................................
Budgets and Budgetary Accounting......................................................................
Assets, Liabilities and Equities.............................................................................
Equity in Pooled Cash and Investments........................................................
Cash and Cash Equivalents..........................................................,...,............
Investments..................................................................................................
Receivables..................................................................................................
Amounts Due to and from Other Funds; Interfund Loans ..............................
Inventories...................................................................................:................
FixedAssets...........................................................:... ......................I........
Depreciation.................................................................................................
Compensated Absences Payable.................................................................
Long -Term Debt...........................................................................................
Deferred Revenues ...................................... ..........,..........
Fund Equity -Reserves and Designation....................................................
Interfund Transactions.........................................................................................
Comparative Data............................................................ ..... ...... ..............
Total Columns on Combined Statements - Overview.........:..... ...............................
2 Stewardship, Compliance and Accountability...............................................................
3 Supplemental Appropriations........................................................................................
4 Cash and Investments..................................................................................................
5 Receivables and Due From Other Governments..........................................................
6 Due To Other Governments .................................... .......................... ............................
7 Fixed Assets and Depreciation....................................................................................
8 Pension Plans.............................................................................................................
9 Other Employee Benefits.............................................................................................
10 Risk Management................................................................................................
11 Estimated Arbitrage Rebate................................................................................... ....
12 Long -Term Debt...........................................................................................................
13 Interfund Transactions.................................................................................................
14 Contributed Capital........................................................................................................
15 Contractual Obligations, Contingencies and Litigation ..................................................
16 Fund Additions and Deletions......................................................................................
17 Subsequent Events.....................................................................................................
Page
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18
18
20
21
23
23
23
23
23
24
24
24
24
25
25
25
25
26
26
26
26
27
27
29
30
31
32
35
36
37
37
41
42
42
43
43
18 / City of Federal Wa
For the Year Ended December 31, 1997
NOTE 1:
Summary of Significant Accounting Policies
The City of Federal Way, King County, Washington was incorporated on February 28, 1990 and operates
under the laws of the State of Washington applicable to an Optional Municipal Code City (RCW 35A) with
a Council -Manager form of government. Under the Council -Manager form of government, the voters elect,
at large, a seven -member City Council, and the Council elects one of its members to serve as Mayor. The
council serves for a period of four years allowing for council member consistency and staggered elections.
The City Manager is appointed by the Council to act as the chief executive officer of the City and is
responsible to the Council for proper administration of all City affairs. The City of Federal Way is a
general purpose government with its fiscal year ending December 31.
The City provides a broad range of general government services. 1997 marks its seventh full year of
existence as a municipality. Its services are in transition and are expanding to meet both the public's
needs and those related to infrastructure. During its transition period, the City's management has
continued to contract with King County, the local Fire District and other agencies to provide specific
services, such as fire protection, storm and surface water utility billings, court services, garbage collection
and various public works services. 1997 is the City's Public Safety Department's first year of being fully
operational.
The accounting and reporting policies of the City conform to generally accepted accounting principles for
governments, and are regulated by the Washington State Auditor's Office, Division of Municipal
Corporations. The City's significant accounting policies are described below.
Reporting Entity
The City's Comprehensive Annual Financial Report (CAFR) includes all funds, account groups, agencies
and boards controlled by or dependent on the City. 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 defined as appointment of a voting majority of an agency's or
organization's board, and either the City's ability to impose will on the agency or organization or the
possibility that the agency or organization will provide a financial benefit to or impose a financial burden on
the City.
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.
Based on application of the above criteria for a component unit, and the criteria for defining joint ventures,
none of the privately -owned and government entities operating within the City of Federal Way boundaries
meet the criteria for inclusion as component units or joint ventures and, therefore, are not reported in the
accompanying financial statements.
Basis of Presentation - Fund Accounting
The accounts of the City are organized on the basis of funds and account groups. Each fund is a separate
accounting entity with a self -balancing set of accounts. The account groups are financial reporting devices
used to provide accounting control for certain assets and liabilities not recorded in the funds because they
do not directly affect net expendable available financial resources. Under the current governmental
accounting model, there are three broad fund categories, seven generic fund types within those categories
and two account groups. A description of the three fund categories and the generic fund types included in
each category is provided below.
City of Federal Way/ 19
G,,;vernmentLil Funds Tvpes
Governmental funds are used to account for activities typically associated with state and local government
operations. All governmental fund types are accounted for on a spending or "financial flows" measurement
focus, which means that typically only current assets and current liabilities are included on related balance
sheets. The operating statements for governmental funds measure changes in financial position, rather
than net income. They present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. The four generic fund types in this category
are described in the following paragraphs.
The General Fund is the general operating fund of the City and accounts for all activities not required to
be accounted for in some other fund.
Special Revenue Funds account for the proceeds of specific revenue sources, other than expendable
trusts or revenues designated for major capital projects, that are legally restricted to expenditures for
specific purposes.
Debt Service Funds account for the accumulation of resources for, and the payment of general long-term
debt, principal, interest and related costs.
Capital Projects Funds account for the acquisition or construction of major capital facilities except those
financed by proprietary funds and trust funds.
Proorietary Funds
Proprietary funds are used to account for activities similar to those found in the private sector where the
intent of the governing body is to finance the full cost of providing services, including depreciation,
primarily through user charges. The measurement focus for these funds is based on the commercial
model which uses a flow of economic resources approach. Under this approach, the operating statements
for the proprietary funds focus on a measurement of net income (revenues and expenses) and both current
and non -current assets and liabilities are reported on related balance sheets. Their reported fund equity
(net total assets) is segregated into contributed capital and retained earnings components. As described
below, there are two generic fund types in this category.
Enterprise Funds account for operations that are financed and operated in a manner similar to private
business enterprises - where the intent of the City is to finance or recover, primarily through user charges,
the costs of providing goods or services to the general public on a continuing basis.
Internal Service Funds account for business -like activities where related goods or services are primarily
provided to other departments or funds of the City on a cost -reimbursement basis.
Standards for Proprietary Funds Proprietary Funds have the option of consistently following or not
following FASB pronouncements issued subsequent to November 30, 1989. The option selected by the
City for all of its Proprietary Fund activities, as policy, is to apply all applicable GASB pronouncements and
all FASB Statements and Interpretations, Accounting Principles Board (APB) Opinions and Accounting
Research Bulletins (ARB) issued on or before November 30, 1989, unless they conflict with or contradict
GASB pronouncements.
Fiduciary Funds
Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for
individuals, private organizations, other governments or other funds. These funds share characteristics
with both the governmental and proprietary funds and therefore, as described below, use the measurement
focus and basis of accounting most appropriate to their specific operations. This fund category includes
expendable trust, nonexpendable trust, pension trust, and agency funds. The City uses funds in only one
of these subclassifications to account for its current financial activities: an expendable trust fund, where
both the principal and revenues earned on that principal may be expended for purposes designated by the
trust agreement. (say something about fund deletion)
Expendable trust funds are accounted for in essentially the same manner as governmental funds, having a
flow of current financial resources measurement focus and using the modified accrual basis of accounting.
Agency funds are custodial in nature (assets equal liabilities) and do not measure the results of operations.
20 / City of Federal Way
Account GrouDS
To facilitate the measurement of the sources and uses of current financial resources in the governmental
funds, separate account groups are used to account for related non -current or non -financial resources,
such as general fixed assets and unmatured general long-term debt. On this basis, the City uses the
following account groups to establish accounting control over related assets and liabilities not recorded in
the governmental funds.
The General Fixed Assets Account Group accounts for all fixed assets of the City other than those
assets accounted for in the proprietary funds.
The General Long-term Debt Account Group accounts for all long-term debt of the City other than debt
accounted for in the proprietary funds.
Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized and reported in
the financial statements.
The accrual basis of accounting is used by proprietary fund types. Under this method, revenues are
recognized when earned, and expenses are recognized when incurred.
The modified accrual basis of accounting is used by governmental, expendable trust and agency funds.
Revenues and other financial resources are recognized when they become susceptible to accrual, i.e.,
when the related funds become both measurable and available to finance expenditures of the current
period. To be considered "available", revenue must be collected during the current period or soon enough
thereafter to pay current liabilities. The City uses thirty days when evaluating the available criteria.
Expenditures are recognized when the related fund liability is incurred. Since the recognition of
depreciation does not reduce net financial resources, it is not considered an expenditure. Other exceptions
include (1) inventories of materials and prepaid items are reported as expenditures when purchased, (2)
interest on long-term debt is not accrued but is recorded as an expenditure when due, (3) accumulated
unpaid vacation and sick pay are considered expenditures when paid.
Major revenues recorded on the modified accrual basis are:
Property Taxes - King County acts as the City's collection agent for these taxes. Each day, the County
electronically transmits to the City the taxes which it has collected on the City's behalf in the prior day. On
this basis, property taxes received in January 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 Y4% and optional
'/4% real estate excise taxes. Although a time lag occurs in payment of these taxes to the City, since the
taxes are actually collected by King County in December and receipted to the City within 10 days after the
end of the year, they are considered to be both measurable and available, and are, therefore, accrued as
revenue at year end. The State of Washington acts as the City's collection agency for the locally levied
sales tax. The sales tax is distributed monthly and remitted to the City in the following month. The Sales
Tax remittance in January is considered both measurable and available and is therefore accrued as
revenue at year end.
Grant Revenues - Under Section G60.109 of the Codification of Governmental Accounting and Financial
Reporting Standards, revenues for cost reimbursement grants are determined to be earned and, therefore,
available at the time related expenditures are incurred. For this reason, grant revenues to be received as
reimbursement for expenditures incurred in the current year are also recognized as revenue in that year.
Shared Revenues - Revenues that have been collected but not remitted by an intermediary collection
agency to the City are considered measurable and available.
City of Federal Way / 21
Other Revenue Sources - Other items recognized as revenue in the current year on the modified accrual
basis include investment interest earned but not received at year end; operating transfers, interfund, and
intergovernmental service billings related to services provided in the current year which are outstanding at
year end; and any other material revenue amounts determined to be both measurable and available under
current modified accrual accounting practices.
Revenues not considered to meet the criteria for recognition on the modified accrual basis include the
business and occupation tax, licenses and permits, fines and forfeitures, and other miscellaneous
revenues which are generally not measurable until received.
Budgets and Budgetary Accounting
Scope of Budget - Annual appropriated budgets are adopted for the general, some special revenue, and
debt service on the modified accrual basis of accounting. For governmental funds, there are no
differences between the budgetary basis and generally accepted accounting principles. Budgets for
project/grant related special revenue funds and capital project funds are adopted at the level of the
individual project and for fiscal periods that correspond to the lives of projects. Since these funds are not
budgeted on an annual basis, budgetary comparisons are not presented. NCGA Statement 1 does not
require, and the financial statements do not present, budgetary comparisons for proprietary fund types.
Legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the
total appropriation amount. Any unexpended appropriation balances for annually budgeted funds lapse at
the end of the year. Appropriations for other special purpose funds that are non -operating in nature are
adopted on a "project -length" basis and, therefore, are carried forward from year to year without
reappropriation until authorized amounts are fully expended or the designated purpose of the fund has
been accomplished.
The individual funds within each fund type which are included in the City's annual operating budget are
listed below.
Funds Budgeted on an Annual Basis:
General Fund
Special Revenue Funds:
Street Fund
Arterial Street Fund
Utility Tax
Solid Waste/Recycling Fund
Snow and Ice Removal Fund
Debt Service Fund
Paths and Trails Reserve Fund
Surface Water Management Fund
Strategic Reserve Fund
Airport Strategic Reserve Fund
Procedures for Adopting the Annual Budget - The City's budget process and the time limits under which
the budget must be prepared are defined by the Revised Code of Washington (RCW) 35A.33. The
procedures followed in establishing the annual budget are described below:
• By late May the official budget call is made by the Management Services Director for current level
service budgets and a preliminary financial forecast.
• By late July, departments submit their preliminary expenditure estimates and the Management
Services department updates the preliminary revenue estimates to define resources available to
finance coming year expenditure programs.
• Prior to the first Tuesday in September, the City Manager submits a proposed budget to the City
Council. This budget is based on priorities established by the Council and estimates provided by City
departments during the preceding months, and balanced with revenue estimates made by the
Management Services Director.
• City Council conducts workshops and public hearings on the proposed budget between mid -
September and mid -December.
• No later than the first Monday in October, the City Council must adopt an ordinance to establish the
amount of property taxes to be levied in the coming year.
22 / City of Federal Way
• By October 31, the City Manager files a preliminary budget with the City Clerk. Copies of the
preliminary budget are provided to staff and the City Council and made available to the public.
• During the first two weeks of November, the City Clerk publishes a notice of the filing of the
preliminary budget and notices of public hearings to be held during preliminary budget deliberations.
• Two public hearings on the proposed budget are also held during November and December. Final
hearings on the budget must begin on or before the first Monday of December, and may continue until
the 25th day prior to beginning of the next fiscal year.
• By December 31, the City Council makes its adjustments to the proposed budget and adopts a final
budget by ordinance.
• The final operating budget, as adopted, is published and distributed within the first three months of the
following year. Copies of the adopted budget are made available to the public.
Amending the Budget - The City Manager is authorized to transfer budgeted amounts between
departments within any fund; however, any revisions that alter the total expenditures of a fund must be
approved by the City Council.
When the City Council determines that it is in the best interest of the City to increase or decrease the
appropriation for a particular fund, it may do so by ordinance approved by a simple majority. During 1996,
the budget was amended two times. The adjusted budget is detailed in Note 3.
The budget amounts shown in the financial statements are the final authorized amounts as revised during
the year. The non -annually budgeted special revenue funds are not included in the Combined Statement
of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual comparison, since they are
not operating budgets and are for management purposes only. These non -annually budgeted funds are
Special Contracts/Studies, 2% For Arts, Miscellaneous Grants, Community Development Block Grant,
Donations and Impact Fee funds. The reconciliation from Statement 2 to Statement 3 is as follows:
REVENUES:
Taxes
Licenses 8 permits
Intergovernmental
Services charges and fees
Miscellaneous:
Interest
Other
TOTALREVENUES
EXPENDITURES
Current:
General governmental
Physical environment
Transportation
Economic environment
Capital
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Operating transfers in
Operating transfers out
TOTAL OTHER FINANCING
SOURCES(USES)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
FUND BALANCES AT BEGIN OF YEAR
Residual equity transfers out
All Special Budgeted Special
Rev Funds Non -budgeted Spocial Revenue Funds Rev Funds
Per Special 2% for :•mpaci per
Statament 2 Contract Arts CDBG DvnatiDns Fees Statement 3
$ 3,859.545 $ 5 $ - S $ S 3 859 545
63.217 - - 63.217
3.257,734 - 439,312 - - 2818.422
3.389.314 - - 217.583 3.171,731
428,120 7.868 - - 29.955 390,297
19,846 19.846
11.017.776 7,868 439,312 247.538 10.323.058
50.000 - 50.000
507,915 - - - - - 507,915
6,065.639 - - - 6.065.639
44.974 - 44,974 - - -
6,668.528 94,974 6.573,554
4,349.248 7-868 344.338 247 538 3 749 504
2.226, 731 - - - 2,226,731
(6,990,4161_ 1344.335) (2,046) 1762.610) (5.881.422)
147636861 {3443381 (2-046) (762 610) (3.654691)
(414,437) 7 866
5.605.547 124.257 8,792
(50.460) - -
(2,046) (515,072) 94,813
2,046 833.858 4,636.594
(50.460
FUND BALANCES AT END OF YEAR 5,140,660 $ 132.125 $ 8.792 $ - $ - $ — 786 1 a,sa0,947
of Federal Way 123
Encumbrances
An encumbrance system is used for budgetary control purposes to record commitments resulting from
approved purchase orders. During the year, encumbrances are recorded in the accounting system at the
time purchase orders are issued for goods and services. Upon payment, the encumbrance is reversed and
the actual cost of related item is recorded as a fund expenditure. Outstanding encumbrances lapse at year
end, are canceled and must be re-established in the following year upon approval of the City Council
through a budget adjustment ordinance. Therefore, these amounts have not been recorded as current year
expenditures unless considered to be susceptible to accrual at the end of the year. The total
encumbrances at year-end for the City were $4,400,215.
Assets, Liabilities and Equities
Equity in Pooled Cash and Investments
The City follows the practice of pooling cash and investments of all funds for investment purposes, except
for restricted funds in Enterprise funds (which the City currently does not have), investments of the
Employees' Retirement Fund held by trustees and cash held in escrow, which are all disclosed separately
on the balance sheet. Each fund's portion of total cash and investments is summarized by fund type in the
combined balance sheet as equity in pooled cash and investments.
Cash and Cash Equivalents
It is the City's policy to invest all cash not immediately required for disbursement. At December 31, 1997,
the State Treasurer was holding $21,250,165 in the State Investment Pool for short-term investments of
cash. The State Investment Pool is considered a cash equivalent. The interest earnings on these
investments are allocated to all funds based on the average monthly balance for each fund.
For purposes of the Statement of Cash Flows, the City considers all highly liquid investments with a
maturity of three months or less when purchased, to be cash equivalents. At December 31, 1997, the total
cash and cash equivalents were $22,781,421,
The City's deposits are entirely covered by federal depository insurance (FDIC) or by collateral held in a
multiple financial institution collateral pool administered by the Washington Public Deposit Protection
Commission (PDPC).
Investments
The City is authorized by State law to purchase certificates of deposit issued by Washington State
depositories that participate in a state insurance pool managed by the Washington Public Deposit
Protection Commission; securities purchased by the Washington State Investment Pool; U.S. Treasury
and Agency securities, banker's acceptances trading in the secondary market; and repurchase agreements
with dealers that use authorized securities as collateral.
All investments are recorded on an amortized cost basis, unless there is a significant and permanent
decrease in market value, in which case, market value should be used.
Receivables
Taxes receivable consist of measurable and available locally levied taxes and related interest and
penalties. Property taxes receivable are included in taxes receivable.
Due From Other Governments reflects measurable and available intergovernmental grants, entitlements,
or State shared revenues (taxes/charges levied and collected by an intermediary collecting government
and distributed on some basis); loans; and charges for services rendered by the City for another
government unit. A separate schedule of Due From Other Governments is disclosed in Note 5.
24 / City of Federal Way
Amounts Due to and from Other Funds; Interfund Loans
These accounts include all interfund receivables and payables. A separate schedule of interfund loans
receivable and payable is furnished in Note 13.
Loans between funds must be authorized by the City Manager. In the governmental funds, loans to other
funds are offset by a corresponding reservation of fund balance to indicate that the outstanding loan
amounts do not constitute "available spendable resources" and are, therefore, not available for
appropriation.
Inventories
Inventories in the governmental funds are recorded as expenditures at the time of purchase. Amounts
remaining at year end are immaterial and, therefore, are not reflected on the balance sheets of those
funds. There were no material inventories at year end in the Internal Service or Enterprise Funds.
Fixed Assets
The accounting and reporting treatment of fixed assets is determined by the measurement focus used by
the fund which acquires them. Fixed assets purchased or constructed by a governmental fund are
recorded as expenditures in that fund at the time related purchases are made; however, the associated
fixed asset is recorded in the General Fixed Assets Account Group. All purchased fixed assets are valued
at cost. Donated fixed assets are valued at their estimated fair market value on the date received.
The City does not capitalize "infrastructure" assets such as roads, bridges, curbs and gutters, streets and
sidewalks, and lighting systems.
Costs of normal maintenance and repair for general fixed assets are also not capitalized. However, any
improvement that increases an asset's value, or materially extends its life or potential uses is added to that
asset's capitalized cost.
Equipment items and real property acquired through capital lease agreements or conditional sales
contracts are recorded in the General Fixed Assets Account Group or proprietary fund, as appropriate, at
the inception of the agreement and in accordance with criteria established in section L20 of the
Codification of Govemmental Accounting and Financial Reporting Standards.
Fixed assets acquired or constructed by the proprietary funds are capitalized in those funds at historical
cost. Contributed assets are recorded at their estimated market values as of the date they are acquired.
The estimated fair market value of donated assets is recorded as contributed capital by the fund which
receives them.
Depreciation
No depreciation is recorded on the fixed assets in the General Fixed Assets Account Group. Annual
depreciation for the proprietary fixed assets is shown as an expense in the proprietary fund. Related
depreciation is computed on a straight-line basis, using varying estimated service lives for individual
assets and asset classifications depending on particular characteristics of an asset and factors
surrounding its anticipated use. Depreciation is charged commencing in the year after acquisition.
City of Federal Way / 25
The average service lives used to calculate depreciation for specific categories of assets in the City's
proprietary funds are summarized below.
Asset Class
Office Furniture & Fixture
Computer/Data Handling Equipment
Communications Equipment
Recreation Equipment
Parks Equipment
Automobiles
Police Vehicles
Police Equipment
Light Trucks
Heavy Trucks
Heavy Work Equipment
Shop/Mlscellaneous Equipment
Land Improvements
Buildings
Compensated Absences Payable
Estimated Service
Life in Years
10
4
10
10
12
5
5
5
8
10
10
20
20
The City records a liability for all outstanding vacation pay and accrued compensatory time. Accrued
vacation pay for governmental fund employees is recorded in the General Long -Term Debt Account Group,
since it is not considered due and payable at year end from expendable available financial resources.
Accrued vacation pay for proprietary fund employees is recorded as an expense and liability in the
appropriate proprietary fund.
Employee vacation leave is accumulated monthly at rates ranging from 12 to 15 days per year depending
on term of employment. Employees may accumulate up to a maximum of 240 hours of vacation leave.
All outstanding vacation leave is payable upon termination of employment.
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.
Sick leave may be accumulated up to a maximum of 720 hours, per City policy. The monthly accrual rate
for City employees is 8 hours per month. Accumulated sick leave is not payable upon termination of
employment. Outstanding sick leave at year end is not accrued by the governmental funds due to the
difficulty in estimating the portion of existing balances likely to result in expenditures in future periods.
Long-term Debt
Long-term liabilities expected to be paid by the governmental funds are recorded in the General Long-term
Debt Account Group. Long-term debt for proprietary funds are recorded as a liability by the fund
responsible for the related debt repayment. Long-term debt outstanding at year end is outlined in Note 12.
Deferred Revenues
The deferred revenues account is used to offset receivables established in the governmental funds for
certain revenues that are measurable but not considered available to finance payment of current
obligations and, therefore, are not susceptible to accrual on the modified accrual basis. When the
receivable amounts are collected in future periods, this liability account is reduced and corresponding
revenue is recorded. The portion of Property Taxes that do not meet the available criteria are recorded as
deferred revenue. See Note 5 for further details.
Fund Equity -Reserves and Designations
Reserves represent portions of fund equity that are legally restricted for a specific future purpose or not
available for appropriation because they do not represent a current expendable resource. Designations of
fund balance identify amounts set aside by management for tentative future purposes or administrative
convenience.
26 / City of Federal Way
In governmental and fiduciary funds, fund balance that is legally restricted for future purposes include
reserves for: a) future employee retirement payments and b) future debt service. Fund balance not
available for expenditure in the governmental funds consists of the outstanding balances of current
interfund loans. On December 31, 1991, $10,000 in non -interest bearing loans from the General Fund to
the City's CDBG grant funds were authorized by the City Council as interim financing. In addition, the
General Fund had reserves for Petty Cash and Travel Advance purposes. The Special Revenue Path and
Trails Reserve fund balance is also legally restricted for construction and maintenance of paths and trails
within City right-of-way.
Interfund Transactions
There are four types of transactions between funds - interfund loans, quasi -external transactions, interfund
reimbursements, and interfund transfers. Interfund loans are temporary borrowings of cash which do not
affect operating statements, but which may incur interest expense or expenditure to the borrowing fund.
Quasi -external transactions are equivalent to buying goods or services from an outside vendor. They are
accounted for by the related funds as revenues, expenditures or expenses. Interfund reimbursements are
repayments to a fund for expenditures or expenses which belong to another fund. They involve only
expenditure or expense accounts. Interfund transfers are either residual equity in nature or operating
transfers. Operating transfers are the equivalent of operating subsidies. Except for the Enterprise Fund,
operating transfers are accounted for as "other financing sources and uses" and are therefore included in
the operating statements.
Residual equity transfers are used to close out a discontinued fund or make one-time contributions to a
new fund, to record the interfund equivalent of a capital grant or its repayment (involving a proprietary
fund), or to make contributions to an internal service fund to establish or increase its working capital or
make repayments of such contributions. In 1996 the City recorded a number of such transfers to internal
service funds to fund the acquisition of new assets. A schedule of interfund transfers is furnished in Note
13, Interfund Transactions.
Comparative Data
Comparative totals for the prior year have been presented in the accompanying financial statements in
order to provide an understanding of changes in the City's financial position and operations. However,
comparative data has not been presented by fund type in each of the statements since their inclusion
would make the statements unduly complex and difficult to read.
Total Columns on Combined Statements - Overview
Total columns on the general purpose financial statements are provided to facilitate financial analysis.
This data, however, is captioned "Memorandum Only" to indicate that it does not present financial position,
results or operations or reporting of cash flows for the governmental unit as a whole in accordance with
generally accepted accounting principles. Data contained in these columns is not comparable to a
consolidation, and interfund eliminations have not been made in aggregating reported values.
NOTE 2:
Stewardship, Compliance and Accountability
Legal Budgetary Compliance
There have been no material violations of finance -related legal or contractual provisions, and there have
been no expenditures exceeding legal appropriations in any of the funds of the City.
of Federal Way / 27
NOTE 3:
Supplemental Appropriations
Operating Budget Funds
Appropriations established during 1997 for the City's operating budget funds are provided below. As
explained in Note 1, both original and supplemental appropriations are adopted by the City Council by
ordinance. Appropriation amounts shown on the accompanying financial statements reflect final budget
values, including all adopted adjustments to original budget amounts.
FUND
ORIGINAL
BUDGET
1997
SUPPLEMENTAL
APPROPRIATIONS
FINAL
BUDGET
General Fund
$ 21,408,775 $
1,394,502 $
22.803,277
Special Revenue Funds:
Street Fund
2,997,832
306,813
3,304,645
Arterial Street Fund
1,013,566
1,078,095
2,091,661
Utility Tax Fund
-
3,468,705
3,468,705
Solid Waste/Recycling Fund
217,573
369,714
587,287
Snow and Ice Removal Fund
54,738
30,000
84,738
Paths and Trails Reserve Fund
-
11,000
11,000
Surface Water Management Fund
3,268,347
429,715
3,698,062
Strategic Reserve Fund
100,000
21,781
121,781
Subtotal Special Revenue Funds
7,652,056
5,715,823
13,367,879
Debt Service Fund 2,521,972 488,333 3,010,305
$ 31,582,803 $ 7,598,658 $ 39,181.461
Funds Budgeted on a Project -Length Basis
During 1997, the City Council adopted appropriations for some special revenue funds and the Capital
Project funds budgeted on a "project -length" basis. As explained in Note 1, appropriations for these funds
are continuing in nature and do not lapse at the end of the year. The special revenue funds budgeted on a
"project length" basis are Special Contracts/Studies, 2% for the Arts, Community Development Block
Grant, Donations, and Impact Fee. These funds are therefore not included in the Combined Statement of
Revenues, Expenditures and Changes in Fund Balances - Budget to Actual.
NOTE 4:
Cash and Investments
As required by state law, all deposits and investments of the City's funds are obligations of the U.S.
Government, the State Treasurer's Investment Pool, bankers' acceptances, or deposits with Washington
State banks and savings and loan institutions. In 1997 the City utilized all the above 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,
1997, the equity in pooled cash and investments was $42,740,444.
28 / City of Federal Way
At year-end, the City had $22,784,833 in cash and cash equivalents which consisted of investments with
the State Pool of $21,250,165; Certificates of Deposits of $3,000,000; the City's checking account bank
balance of $49,464 (outstanding checks were $1,534,915 at December 31); and petty cash and change
funds, advance travel fund and investigative fund totaling $20,119. No deposits were uninsured or
uncollateralized. Insurance coverage up to $100,000 is through federal depository insurance and the
Washington Public Deposit Protection Commission (WPDPC) for amounts over $100,000. Under State
statute, members of WPDPC, a multiple -financial institution collateral pool, may be assessed on a
prorated basis if the pool's collateral is insufficient to cover a loss.
At December 31, 1997, the City's total deposits and investments consisted of the following:
Key Bank, Checking Account per Books
$ (1,485,451)
Petry Cash/Change Fund/Advance Travel/Investigative Fund
20.119
Cash Equivalents with State Treasurer's Investment Pool
21,250.165
Certificates of Deposit
3,000.000
Subtotal Cash and Cash Equivalents
22,784,833
Investments in US Government Treasury, Agency and Bankers Acceptances
19,955,611
Equity in Pooled Cash and Investments
42,740,444
Cash with Escrow Agent
211,588
Assets with FWRS Plan Administrator
5,491,556
Total Cash and Investments
$ 48,443,588
Investments
The City's investments are categorized to give an indication of the risk assumed at year-end. The
following summary shows the City's investments at year-end categorized by risk. Category 1 includes
investments that are either insured, registered or held by the City or its agent in the City's name. Category
2 includes uninsured and unregistered investments which are held by the counterparty's trust department
or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the
securities are held by the counterparty, or its trust department or agent, but not in the City's name.
Risk CaMory
Carrying
Market
1 2
3 Amount
Value
City Securities
US Government Treasury
$ 9,984,063 $
$ $ 9,984,063
$ 10,140,682
Bankers' Acceptances
2.921,135
2.921,135
2.957,890
Agencies
7,050,413
7.050.413
7,177,027
Subtotal Categorized City Investments
19,955,611
19.955,611
20,275,599
Pension Investments
Fixed Income US Governmental Obligations
Fixed Income Corporate Obligations
Fixed Income Foreign Securities
Equity Securities
Subtotal Categorized Pension Investments
Total Categorized Investments
Money Market Funds in Federal Way Retirement System
Guaranteed Insurance Contracts
Investments in State Treasurers Investment Pool
382,889 382,889 382,889
- 834,986 834,986 834,986
28,217 - 28,217 28,217
3,267,171 3.267,171 3.149, 306
4,513.263 4,513,263 4.395,398
$ 19.955,611 $ 4,513.263 $ $ 24,468,874 $ 24,670,997
190,258 190,258
788,035 788,035
21,250,165 21,250,165
Total Investments $ 46,697,332 $ 46.899,455
City of Federal Way / 29
NOTE 5:
Receivables and Due From Other Governments
Property Taxes
The King County Treasurer is responsible for collecting all property taxes levied in the County by taxing
districts. Amounts collected by the County on the City's behalf are remitted daily.
As described in Note 1, taxes are levied and become an enforceable lien against properties as of January
1. Annual tax billings may be paid in two equal installments, due April 30 and October 31. At December
31, 1997, the total balance of property taxes receivable recorded by the City was $198,240. Of this,
$170,669 is recorded as a deferred revenue, since it was not collected within the first 30 days of 1998.
The property tax levy calendar in 1997 was:
PROPERTY TAX CALENDAR
January 1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100 percent of market value.
October 31 Second installment is due.
Property taxes are recorded as a receivable when levied, offset by a deferred revenue. During the year,
property tax revenues are recognized when cash is collected. At year-end, property tax revenues are
recognized for collections expected to occur within 30 days. No allowance for uncollectible taxes is
established because delinquent taxes are considered fully collectible.
Under State law. cities may levy up to $3.60 per $1,000 of assessed valuation for general governmental
services, subject to two limitations:
1. RCW 84.55.010 limits the growth of regular property taxes to 6 percent per year, after adjustments for
new construction. If the assessed valuation increases by more than 6 percent due to revaluation, the
levy rate will be decreased.
2. The Washington State Constitution limits the total regular property taxes to 1% of assessed valuation
or $10 per $1,000 of value. If the taxes of all districts exceed this amount, each is proportionately
reduced until the total is at or below the 1% limit.
The City's regular levy for 1997 was $1.56 per $1,000 on an assessed valuation of $3,958,913,902 for a
total regular levy of $6,180,735.
30 / City of Federal Way
Due From Other Governments
At December 31, 1997 the City recorded the following receivables from other governmental units
Descnphon
Amount
eneral Fund.
FEMA
$
94
WA State Taxes & Fees
1.225,925
Department of Justice
19,964
King County Senior Services Program
12.457
Subtotal General Fund
1.958,440
Special Revenue Fund.,
WA State Taxes & Fees
183,682
King County Commute Trip Reduction
17,194
FEMA
64,300
King County Hazardous Waste Grant
22,097
King County City Optional Grant
8,136
King County Waste Management Grant
35,269
King County CPG
4,243
King County CDBG
66,059
King County SW M Fees
1,182
Subtotal Special Revenue Fund
402,162
Capital Projects Fund. -
King County - Open Space
81,744
WA State - TIB Grant
292,936
State of WA Department of Transportation
106,388
FEMA
1,594
Subtotal Capital Proects Fund
482,662
Enterprise Fund:
FEMA
159
Subtotal Enter Ase Fund
159
Internal Service Fund...,
FEMA
6
Subtotal Internal Service Fund
6
Total Due From Other Governments
$
2,143,429
General Fund. -
King County Property Taxes
198,240
Utility Tax Fund
Utility Taxes
98,124
Debt Service Fund:
King County Real Estate Excise Tax
165,331
Total Taxes Receivable
$
461,695
Total
$
2.605,124
NOTE 6:
Due To Other Governments
At December 31, 1997, $301,705 was due to other governmental units as follows:
Descrptlon
,Amount
[general Fund:
King County - Valley Communications
77,589
King County - Jail Services
180,226
King County - Election Costs
17,055
King County - Property Tax
$ 1,922
Subtotal General Fund
276,792
Special Revenue Fund. -
King County - Signal Cabinets
8,000
King County - 2nd Half SWM Fees
13,872
Subtotal Special Revenue Fund
21,872
lntemal Service Fund:
WA State Leasehold Tax
3,041
Subtotal Internal Service Fund
3,041
Total Due To Other Governments
$ 301,705
City of Federal Way / 31
NOTE 7:
Fixed Assets and Depreciation
General Policies
Major expenditures for fixed assets, including capital leases and major repairs that increase useful lives,
are capitalized. Maintenance, repairs, and minor renewals are accounted for as expenditures or expenses
when incurred. The City has adopted a general fixed asset capitalization policy where an item's cost must
equal or exceed $1,000.
All fixed assets are valued at historical cost (or estimated cost, where historical cost is not known/or
estimated market value for donated assets).
General Fixed Assets
General fixed assets are long-lived assets of the City as a whole. When purchased, leased, or
constructed, such assets are recorded as expenditures in the governmental funds and capitalized in the
General Fixed Assets Account Group. No depreciation has been provided on general fixed assets, nor has
interest been capitalized.
General fixed assets that are infrastructure assets (such as roads, bridges, curbs, and sidewalks) are
considered public property and are not accounted for in the General Fixed Assets Account Group.
A summary of changes in general fixed assets follows:
Balance Balance
January 1, 1997 Additions Deletions December 31. 1997
Land $ 26,765,375 1,600,766 $ $ 28,366,141
Other improvements 2,284,993 3,312,625 5.597.618
Buildings 1,724,241 - 1,724,241
Construction in progress 3,012,288 1,520,670 2,758,887 1,774,071
Assets under capital lease - land 1,450,000 - 1,450,000
Total 35,236,897 6.434.067 2.758.887 $ 38.912,071
Proprietary Fund Fixed Assets
Proprietary fund fixed assets are long-lived assets acquired by the City's Enterprise and Internal Service
Funds. The City depreciates these assets at the straight-line rate. The following is a summary of the
City's proprietary fund fixed assets at December 31, 1997:
Internal Service Funds
Subtotal
Total
Enterprise
Information
Support
Fleet 8
Buildings 8-Internal
Service
Proprietary
Fund
Systems
Services
Equipment
Furnishings
Funds
Funds
Land
$ 2,109,640
$ -
$
$
$
$ -
$ 2.109,640
Data Process/telecomm/GIS equip
2,097,868
2,097,868
2,097,868
Heavy equipment
614,246
614,246
614,246
Transportation equipment
1,478,009
1,478,009
1,478,009
Buildings 8 furnishings
774,409
3,237,385
3,237,385
4,011,794
Other equipment
-
99,671
203,145
-
302,816
302,816
Subtotal fixed assets
2,684,049
2,097.868
99,671
2.295.400
3.237.385
7,730,324
10,614,373
Less accumulated depreciation
(143,893)
(926,287)
(44,584)
(991,453)
(971,036)
(2,933,360)
(3,077,253)
Net fixed assets
$ 2.740.156
S 1,171.581
S 55,087
$ 1,303,947
S 2,266,349
$ 4,796,964
S 7,537,120
Construction in progress
915,307
-
-
-
915,307
Total fixed assets
$ 3,655,463
$ 1.171,581
$ 55,087
$ 1,303,947
$ 2,266,349
$ 4,796,964
$ 8.452,427
32 / City of Federal Wa
Construction Work in Progress
Included in the General Fixed Asset account group is Construction Work in Progress which represents
projects that were in process at year end. The City had four projects which were in progress at the end of
1997 and are anticipated to be completed during 1998. The projects were:
School Site
$ 485,352
Celebration Park
1.104,383
Neighborhood Parks
54,583
Klahanee Lake
129.753
Total
y 1 774 `!7 1
The Proprietary Funds had two projects that were in progress at the end of 1997 which are anticipated to
be completed during 1998. These projects were:
Parking Lot $ 121,899
Civic Theatre 793,408
Total $ 915,307
NOTE 8:
Pension Plans
Substantially all City full-time and qualifying part-time employees participate in the Public Employees
Retirement System (PERS) administered by the Department of Retirement Systems, under cost -sharing
multiple -employer public employee retirement systems.
SUMMARY OF SYSTEMS' ACTUARIAL DATA
(In Millions of Dollars)
As of December 31, 1995
PERS LEOFF
Total Pension Benefit Obligation $ 12,936 $ 4,723
Less Net Assets Available for Benefits 12,349 4,360
Unfunded (Surplus) Actuarial Present
Value of Accumulated Plan Benefits $ 12,936 $ 12,936
The amount shown as total pension benefit obligation is the actuarial present value of credited projected
benefits, adjusted for the effects of projected salary increases and any step -rate benefits (LEOFF only)
estimated to be payable in the future as a result of employee service to date. Use of the standardized
measure enable readers of Washington's financial statements to: (a) assess on an ongoing basis the
funding status of each system; (b) assess progress made in accumulating sufficient assets to pay benefits
when due; and make comparisons among other states or other retirement systems. The standardized
disclosure method is independent of the actuarial funding method used to determine contributions to the
retirement system.
Historical trend and other information regarding each plan is presented in the State Department of
Retirements Systems 1997 annual financial report.
Public Employees' Retirement System (PERS)
The state legislature established PERS in 1947 under Chapter 41.40 RCW. PERS is a cost -sharing
multiple -employer system. Membership is mandatory for all City employees working 70 hours per month
for five months out of any twelve month period. Membership in the system includes: elected officials;
state employees; employees of the Supreme, Appeals, and Superior courts (other than judges); employees
of legislative committees; college and university employees not in national higher education retirement
programs; judges of district and municipal courts; noncertificated employees of school districts; and
employees of local government. Approximately 51 percent of PERS I salaries and 44 percent of PERS II
salaries are paid to state employees.
City of Federal Way / 33
PERS contains two "plans". (As used in this context, the term "plans" refers to tiers within PERS. The
actual plan is PERS) Participants who joined the system by September 30, 1977, are Plan I members.
Those joining thereafter are enrolled in Plan ll. Retirement benefits are financed from employee and
employer contributions and investment earnings. Retirement benefits in both Plan I and Plan II are vested
after completion of 5 years of eligible service.
Plan I members are eligible for retirement after 30 years of service, or at the age of 60 with 5 years of
service, or at the age of 55 with 25 years of service. The annual pension is 2 percent of the final average
salary per year of service, capped at 60 percent.
Plan II members may retire at the age of 65 with 5 years of service, or at 55 with 20 years of service, with
an allowance of 2 percent per year of service of the final average salary. Plan II retirements prior to 65 are
actuarially reduced. There is no cap on years of service credit and a cost -of -living allowance is granted,
capped at 3 percent annually.
During the 1997 Washington State Legislative Session, the Washington State Legislature did approve a
change in retirement law that will not become effective until after the close of fiscal year 1997. Chapter
122, Laws of 1997, authorizes portability for LEOFF I. As a result of this change the state's contribution
rate will increase .01 percent. The material changes made during the 1996 Legislative Session that
became effective during the 1997 fiscal year were disclosed in last year's annual report. None of the other
bills that passed affected contribution rates.
The City's covered payroll for year ending December 31, 1997 was $6,429,455. The City's total current -
year payroll for all employees was $11,774,101.
Each biennium the legislature establishes Plan I employer contribution rates and Plan II employer and
employee contribution rates. Employee contribution rates for Plan I are established by legislative statute
and do not vary from year to year. Employer rates for Plan I are not necessarily adequate to fully fund the
system. The employer and employee contribution rates for Plan II are developed by the Office of State
Actuary to fully fund the system. All employers are required to contribute at the level established by the
legislature. The methods used to determine the contribution requirements were established under state
statute.
The City's contribution rates expressed as a percentage of covered payroll, as of December 31, 1997 were:
PERS Plan I PERS Plan II
Employer 7.00% 4.20%
Employee 6.00% 4.20%
The City's actuarially -determined contribution requirement and actual contribution for the year ending
December 31, 1997 were:
PERS Plan I PERS Plan II
1997 $ 83,886 $ 485,871
1996 $ 90,709 $ 646,853
1995 $ 81,940 $ 601,784
The City's actuarially determined employer contribution requirement represents approximately .1101
percent of the total for all employers covered by PERS.
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF)
LEOFF was established in 1970 by the legislature under Chapter 41.26 RCW. LEOFF is a cost -sharing
multiple -employer retirement system. Membership includes all full-time, fully compensated, local law
enforcement officers and fire fighters. Retirement benefits are financed by employee and employer
contributions, investment earnings and legislative appropriation. LEOFF is comprised solely of non -State
employees.
LEOFF system contains 2 plans. Participants who joined the system by September 30, 1977, are Plan I
members. Those who joined thereafter are enrolled in Plan II. Retirement benefits are vested after
completion of 5 years of eligible service.
34 / City of Federal Way
Plan I participants are eligible to retire with 5 years of service at age 50. The benefit per year of service is
as follows:
TERM OF SERVICE PERCENT OF FINAL AVERAGE
20+ 2.0%
10-20 1.5
5-10 1.0
The final average salary is based on salary received during the last 2 years of service. Substantial
disability and death benefits are provided by the plan. Retirement benefits are indexed to the Seattle area
consumer price index.
Plan II participants are eligible to retire at the age of 50 with 20 years of service or at 55 with 5 years of
service. Retirement benefits prior to age 55 are actuarially reduced. The benefit is 2 percent of average
salary per year of service. The average salary is based on the highest 5-year period. Retirement benefits
are indexed to the consumer price index with a cap of 3 percent annually. Death and disability benefits are
also provided. These benefit provisions were established under the authority of legislative statute.
Employer and employee contribution rates for Plan II are developed by the Office of State Actuary to fully
fund the system. Plan II employers and employees are required to pay at the level established by the
legislature. Plan I employers and employees are required to contribute at a rate of 6 percent and the state
is responsible for the balance of the funding. The methods used to determine the contribution
requirements were established under the authority of legislative statute.
During the 1997 legislative session, a portability benefit was provided for members of LEOFF I who later
established membership in another system. The portability benefit will increase state contribution rates .01
percent of salary.
The City's contribution rates expressed as a percentage of covered payroll, as of December 31, 1997 were:
Employer
Employee
LEOFF Plan 1
6.00%
6.00%
LEOFF Plan II
5.06%
8.43%
The City's actuarially determined contribution requirement and actual contribution for the year ended
December 31, 1997 were:
LEOFF Plan I LEOFF Plan II
1997 $ - $ 620,835
1996 $ - $ 200,511
1995 $ $
The City's actuarially determined employer contribution requirement represents approximately .2324
percent of the total for all employers covered by LEOFF.
Other Local Government Pension Systems - City of Federal Way
Employees' Retirement System
The City is also administrator of a defined contribution pension retirement system called the Federal Way
Retirement System. The system has been classified as an expendable trust fund in the financial reports of
the City. It is classified as such because 1) it is a defined contribution plan, not a defined benefit plan; and
2) the plan does not call for any predetermined funds to be available for benefits at a particular time (no
actuarial requirements regarding benefits or city requirements exist).
Effective June 1, 1990, the Federal Way City Council established the Federal Way Employees' Retirement
System, per City Ordinance 90-74 and as authorized by the Federal Social Security Act (42 USCA, Section
418 (g)). The Retirement System is a defined contribution pension plan which was established as an
alternative to the Federal Social Security System.
During 1997, there were a total of 267 individuals covered by this system. As of the end of the year, 243
remained as active employees of the City and none were drawing retirement benefits. The 24 inactive had
left the City's employment and either had been reimbursed their contributions, or the reimbursement was
pending, or they elected to have their contributions remain in the plan if the balance was $3,500 or greater.
City of Federal Way / 35
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 coverages. 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 1997 was $10,751,664 and total City payroll was $11,774,101. Actual City
contributions for the year were $559,087. Actual employee contributions were $666,605. All contributions
were invested in instruments arranged through independent investment advisors selected by the municipal
employers benefit Trust (MEBT) committee comprised of the cities of Bellevue, Kirkland, Redmond,
Edmonds, Mill Creek, Woodinville, and Federal Way but administered through Wells Fargo Bank.
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 Wells Fargo Bank who invests
Plan assets. At year end these assets amounted to $5,491,556 and were comprised of U.S. government
obligations ($382,889) corporate obligations ($834,986), guaranteed insurance contracts ($788,035),
equity securities ($3,267,171), money market securities ($190,258), and foreign securities ($28,217).
In July 1995, the City implemented the hardship withdrawal and loan provision program. Loans receivable
for 1997 total $166,711.
The consulting actuary firm of Howard Johnson & Co. 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 9:
Other Employee Benefits
Deferred Compensation
The City offers its employees a deferred compensation plan in accordance with Internal Revenue Code
Section 457. This multi -jurisdictional plan administered by the ICMA Retirement Corporation permits
employees to defer a portion of their salary until future years. The deferred compensation is not available
to employees until termination, retirement, or unforeseeable emergency; or upon death, to their
beneficiaries.
On August 20, 1996, the provisions of IRC Section 457 were amended. Under the new requirement, the
City no longer owns the amounts deferred by employees or related income on those amounts, therefore,
beginning January 1, 1997, the City of Federal Way no longer records deferred compensation on the
books.
36 / City of Federal Way
NOTE 10:
Risk Management
The City maintains insurance against most normal hazards except for unemployment insurance where it
has elected to become fully self -insured. Related premiums received by the Risk Management Fund are
used to reimburse the State Employment Security Department for unemployment benefits paid to eligible
individuals, and to establish reserves for the payment of estimated future unemployment claims liability.
Through its Risk Management Fund, the City is also recovering insurance premium costs for general
liability coverage and building reserves for a future general liability self-insurance program. The City's
insurance coverage in 1997 remained relatively similar to the coverage for 1996.
During 1997 the City purchased commercial insurance policies from commercial insurers. A summary of
coverages in force during 1997 is presented below:
Name of Company Coverage Liability Limits
St. Paul Fire & Marine Public Officials Claim - $5,000,000
Liability Coverage Aggregate - $5,000,000
Deductible - $10,000
General Liability
Claim - $1,000,000
Aggregate - $2,000,000
Deductible - $5,000
Property Coverage
Buildings - $10,222,500
Extra Expense - $1,263,500
Valuable Papers - $310,000
Deductible - $5,000
Find Arts - $25,000
Deductible - $1,000
Auto Liability & Physical Damage
Coverage Limit - $1,000,000
Collision Deductible - $1,000
Comprehensive Deductible - $250
Liability - $5,000
Inland Marine
Coverage Limit - $119,500
Deductible - $1,000
Coinsurance - 90%
Excess Policy
Per Claim/Aggregate - $10,000,000
Retention - $10,000
Employer Liability
Coverage Limit - $1,000,000
Workers' Compensation
Stop -Gap Statute by Limit
Law Enforcement Liability
Coverage Limit - $1,000,000
General Aggregate - $2,000,000
Deductible - $10,000
Above Ground Pollution
Per Claim/Aggregate - $1,000,000
Deductible - $1,000
Boiler & Machinery
Per Incident - $1,000,000
Deductible - $1,000
The Fidelity and Deposit Public Official Bond
St. Paul Fire and Marine City Manager
Coverage Limit - $50,000
Management Services Director
Coverage Limit - $50,000
City Clerk
Coverage Limit - $50,000
Chief of Police
Coverage Limit - $50,000
Faithful Performance,
Coverage Limit - $250,000/bond
Fidelity/Emp. Dishonest
Deductible - $2,500
& Erisa Bond
Deductible (Erisa) - $0
City of Federal Way 137
The City uses the Risk Management Internal Service Fund to account for its risk financing activities.
The City's industrial insurance is provided by Washington State and is administered by the Department of
Labor and Industries. Coverage is purchased by means of standard rates per working hour and is
computed by the total number of hours worked by employees multiplied by the basic premium rate
assigned to the business risk classification. The following are benefits provided by industrial insurance:
medical services, damaged clothing, travel expenses, time -loss payments, vocational rehabilitation, partial
disability awards, pension awards and survivor benefits.
NOTE 11:
Estimated Arbitrage Rebate
The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt of over $5 million to make
payments to the United States Treasury of investment interest received at yields that exceed the issuer's
tax-exempt borrowing rates. Payments of arbitrage rebate amounts due under these regulations must be
made to the U.S. Treasury every five years.
The City's estimated rebatable arbitrage amount as of December 31, 1997 is $-0- for its tax-exempt
general obligation bond issues subject to the Tax Reform Act issued through that date.
NOTE 12:
Long -Term Debt
The various categories of long-term debt reflected on the City's financial statements are briefly described in
the following paragraphs.
General Obligation bonds are backed by the City's full faith and credit. Proceeds are typically used for the
acquisition or construction of major capital facilities or equipment. "Councilmanic Bonds" are general
obligation bonds issued by City Council without voter approval. Under State law, repayment of these
bonds must be financed from general City revenues since no additional property taxes can be levied to
support related debt service payments. General Obligation bonds approved by the voters are typically
repaid through an annual "excess" property tax levy authorized for this purpose by State statute. At year
end 1997 the City had no voter approved bonds outstanding. The City issued Certificates of Participation
in 1992 for the purchase of City Hall. They are accounted for in the Internal Service Fund established for
buildings and furnishings. All other general obligation debt is recorded in the General Long-term Debt
Account Group and annual principal and interest payments are recorded as expenditures by the City's Debt
Service Fund.
Debt Issued During 1997
1997 Limited Tax G.O. Bond
On May 1, 1997, the City issued $16,150,000 in limited general obligation bonds. These bonds were
issued for funding various community investment projects, including sports fields and other improvements
at Celebration Park, Civic Theatre and related improvements at Dumas Bay Centre, a public safety facility
and a community revitalization project that includes street lights, beautification and safety improvements
and other projects in the City's downtown area. The bonds will mature beginning June 1, 1998 through
June 1, 2012. The bonds carry an interest rate of 5% to 5.25%. The debt service on these bonds will be
paid by the implementation of an additional 3.63% utility tax, bringing the total utility tax rate to 5%
effective March 1, 1997.
38 / City of Federal Way
The following is a schedule of outstanding general obligation debt as of December 31, 1997:
OUTSTANDING GEN.ERAL OBUGA ION DENT
December 31, 1997
Amount
Beginning
Ending
Originally
Outstanding
Amount
Amount
Ouslanding
Descri lion Date of Issue
MaturIty Dale
Interest Rate
Issued
Delal
Issued
Redeemed
Debt
CxOnera)ga ion s:
1991 Limited
1-Feb-91
1-Dec-21
6,00.6.85
$ 12,500,000
S 1,055,000
$
$ 185,000
S 870,000
1994 Limited
14-Jun-93
1-Dec-08
2-70-5.70
2,390,000
2,030,000
125,000
1,905,000
1994 Refunding
13-May-93
1-Dec-21
2.70-5,85
12,106,000
11,990,000
40,000
11,950,000
1995 Limited
28-Dec-95
1-Dec-05
3.90 • 4J5
5,000,000
5,000,000
470,000
4,530,000
1996 Limited
29-Feb-96
1-Dec-05
3.50 L 4.50
2,500,000
2.500,000
240,000
2,260,000
1997 Limited
•SutAQt.-Al
22-A r-97
1-Dec-12
5M - 5.30
16,150,000
t6,_150,000
GO Bonds
34,49 ,000
22,515,0006,?
,060 07=77.007
Certificates of Participation:
1991 Issue
25-Sep-91
1-Dec-06
4.75.6.80
1,450,000
1,105,000
85,000
1,020,000
1992 Issue • Senes A
26-Au -92
1-Dec-02
3.00 - 5.45
2,i50,000
1,520 2
225.000
1,295.0W
u ota s
3,600.000
s� ,21
310,000
2,3
Public Works Trust Fund Loan:
PWTL
31-Aug-94
1-Jul-14
1,00
233,316
221.028
15,418
205.610
P W TL
24-Jul-96
1-Jul-14
1.00
1,166, 580
1,166, 680
61,671
1,104,909
PW TL
-'uSubtotalPWT
4.Sep-97
1 •Jul- t 4
1.00
155.544
155,544
1,399.696
1,307,608
156,5447
,1
1466003
Grand Total All Long -Term Debt
$ 39.494,896
$ 26.587.608
$ 16.305,544
$ 1,447,089
S 41.446,063
OU STAN iNG GENERAL OSLIGATION DEBT
December 31, 1997
Amount
Beginning
Ending
Originally
Outstanding
Amount Amount
Oustanding
Description
Issued
Debt
Issued Redeemed
Debt
GenerarLong- I erm aIt uroup:
'
s
1991 Limited
$ 12,500,000
$ 1,055,000
$ $ 185,000
870,000
1991 COP Issue
1,450,000
1,105,000
85,000
1,020,000
1994 Limited
2,390,000
2,030,000
125,000
1,905,000
1994 Refunding
12.105,000
11,990.000
40,000
11,950,000
1995 Limited
5,000,000
5,000,000
470,000
4,530,000
1996 Limited
2,500,000
2,500,000
240,000
2,260,000
1997Limiled
-
1B,150,000 -
T8,150,000
6t ena ❑ erm e l
.000
1,T
Internal Service Funds
1992 Issue - Series A
2,150,000
1,520,000
225,000
1,295,000
Public Works Trust Fund Loan 1,399.896 1,387,608 155,544 77,089 1,466,063
Grand Total All Long -Term Debt $ 39.494.896 $ 26,587,608 $ 16,305,544 $ 1,447,089 $ 41,446,063
The following statement of long-term debt provides the City's outstanding debt for 1997 and 1996:
SCHEDULE OF GENERAL LONG-TERM DEBT
December 31, 1997
With Comparative Totals for December 31, 1996
Amounts Available and Amounts to be Provided for the
Payment of General Long Term Debt
Amount to be Provided for the Retirement of:
1997
1996
General Obligation Bonds
32,699,107
19,724,862
Public Work Trust Fund Loan
1,466,063
1,387,616
Compensated Absences
598,413
465,696
Certificates of Participation
1,020,000
1,105,000
Amount Available in Debt Service Funds
4,965,893
2,850,138
Total Amount Available and to be Provided
$ 40,749,476
$ 25,533,312
General Long -Term Debt Payable
General Obligation Bonds
37,665,000
22,575,000
Public Work Trust Fund Loan
1,466,063
1,387,616
Certificates of Participation
1,020,000
1,105,000
Compensated Absences - Vacation
598,413
465,696
Total General Long -Term Debt
$ 40,749,476
$ 25,533,312
City of Federal Way / 39
SCHEDULE OF CHANGES IN LONG-TERM DEBT
Period Ended December 31, 1997
General
Pubic Works
Obligation
Trust Fund
Certificates of
Accrued Vacation, Claims
Bonds
Loan
Participation
and Judgements
Total
General
General
General
General
:
Long -Term
Long -Term
Long -Term Internal
Long -Term Internal
Debt
Debt
Debt Service
Debt Enterprise Service
$ 22.575.000
$ 1,387,608
$ 1,105.000 $ 1.520.000
$ 465,698 $ 1,867 $ 24,041
$ 27.079,212
Outstanding at December 31, 19%
.Additions:
New Debt Issued or Aquired
Increase in Accrued Vacation
16,150,000
155,544
-
132,717 781 1,940
16,305,544
134,538
Total Additions
16,150,000
54
155,4
132,717 781 1,040
16,440,082
Reductions:
General Obligation Bonds
(1,060,000)
(77,089)
-
(1,137,0891
Capitalized Lease Obligations
(85,Q001 1225,000)1310
000)
Total Reductions
(1,060,000)
(77,0891
(85,000) (225.000)
(1,447,089)
'-Outstanding at December 31 1997
1 $ 37 665 000
$ 1,466,063
$ I. 020 000 $ 1 295,000
$ 598 41a $ 26,18 $ 25,081
$ 42.072 205
Presented below is a summary of the City's debt service requirements to maturity by year for all
outstanding debt other than compensated absences:
ANNUAL DEBT SERVICE PAYMENTS TO MATURITY
General Obligation
Certificates
Public Works
801fided Debt
of Participation
Trust Fund Loan
Total Debt
1998
$ 4,149,355 $
458,080
$ 100.650 $
4,708.085
1999
4,192,790
456,400
100,038
4,749,228
2000
4,183,173
458,308
99,175
4,740,656
2001
4,176,503
453,538
98,313
4,728,354
2002
4,168,753
452,425
97,451
4,718,629
Thereafter
35,659,266
609,208
1.102,140
37,270,614
$ 56,429.840 $
2,887,959
$ 1.597.767 $
60 915,5615
SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY
Year
Principal
Interest
Total
1998 $
2,611,239 $
2,096,845 $
4,708,084
1999
2,781,239
1,967,988
4,749,227
2000
2,911,239
1,829,414
4,740,653
2001
3,046,239
1,682,114
4,728,353
2002
3,186,239
1,532,389
4,718,628
2003
3,051,239
1,376,889
4,428,128
2004
3,201,239
1,227,216
4,428,455
2005
3,366,239
1,066,557
4,432,796
2006
2,506,239
894,503
3,400,742
2007
2,486,239
760,524
3,246,763
2008
1,091,239
668,447
1,759,686
2009
921,239
611,527
1,532,766
2010
971,239
564,296
1,535,535
2011
1,021,239
514,151
1,535,390
2012
1,076,239
461,115
1,537,354
2013
696,239
415,598
1,111,837
2014
736,239
378,745
1,114,984
2015
695,000
339,533
1,034,533
2016
740,000
298,528
1,038,528
2017
785,000
254,868
1,039,868
2018
835,000
208,553
1,043,553
2019
890,000
159,705
1,049,705
2020
945,000
107,640
1,052,640
2021
895.000
52,358
947,358
Total $
41,446,063 $
19,469,503 $
60.915.566
40 / City of Federal Way
Computation of Legal Debt Margin
Under Washington State law (RCW 39.36.020), a City may incur general obligation debt for general city
purposes in an amount not to exceed 21/2 percent of the value of all taxable property within the City. State
law requires all property to be assessed at 100 percent of its true and fair value. Unlimited tax general
obligation debt requires an approving vote of the people, and any election to validate such general
obligation debt must have a voter turnout of at least 40 percent of those who voted in the last State general
election and of those voting, 60 percent must be in the affirmative. The City Council may, by ordinance,
authorize the issuance of limited tax general obligation debt in an amount up to 1.5% of the valuation
within the City without a vote of the people. No combination of limited or unlimited tax debt may exceed
71/2 percent of the valuation. The debt service on unlimited tax debt is secured by excess property tax
levies, whereas the debt service on limited tax debt is secured by property taxes collected with the City's
councilmanic levy.
The City's legally remaining debt capacities as of December 31, 1997 are:
General Government (no vote required) $ 27,625,531
General Government (3/5 majority vote required) $ 41,774,402
Parks and Open Space (3/5 majority vote required) $104,436,006
Utilities (3/5 majority vote required) $104,436,006
Compensated Absences
As explained in Note 1, the City's liability for accrued employee vacation balances from governmental fund
employees is recorded in the General Long-term Debt Account Group. Balances for proprietary funds are
recorded as liabilities in the specific fund expected to incur the related future expense. The total liability by
fund type for accrued employee vacation as of December 31, 1997, is provided below:
Governmental Funds
(recorded in the General Long-term Debt Account Group) $598,413
Enterprise Funds 2,648
Internal Service Funds 25,081
Total Compensated Absences $626,142
Refunded Debt
In 1993, the City refunded one general obligation bond issue by placing the proceeds for new bonds in an
irrevocable trust to provide for all future debt service payments on the old bonds. As a result, the refunded
bonds are considered defeased and the liability has been removed from the City's financial statements.
At December 31, 1997, the cash held with refunding Trustee (First Trust National Association) was $64
and investments held with the Trustee were $8,759,612. Refunded bonds payable were $11,950,000 at
year-end.
NOTE 13:
Interfund Transactions
Interfund transactions represent reductions in the expendable financial resources of the transferring fund,
but the transaction may or may not be accounted for as an expenditure of the transferring fund.
Transactions between funds may be classified as (1) quasi -external transactions, (2) loans and advances,
(3) reimbursements, (4) residual equity transfers, and (5) operating transfers. During 1997, the City
recorded all of the above with the exception of reimbursements.
Quasi -external Transactions
Quasi -external transactions reflect the existence of a more -or -less normal buyer/seller relationship between
City funds. During 1997, these involved transactions between internal service funds and other funds for
the purpose of recovering operating and maintenance costs and to build replacement reserves.
City of Federal Way / 41
Intertund Receivables/Payables
The following schedule presents interfund loans and due to/due from other funds outstanding at December
31, 1997:
Interfund Loans
Intertund Loans
inferruna Loans
Receivable
Payable
3.!neralFund Z
1g000
Special Revenue Funds:
Communil DeWN mans &lock Ciranl
-
10,000
oral +nte luny Loans §
f .009 S
11,000
Due TWDue From Other Funds
Due From Other Funds
Due To Other Funds
General Fund
86.516
136,560
Special Revenue Funds:
Street
15.941
23.159
Utility Tax Projects
-
8,080
Solid Waste/Recycling
1,018
292
Community Development Block Grant
-
69.493
Surface Water Management
9,521
6,194
Subtotal Special Revenue Funds
26,460
97,218
Capital Projects Funds:
City Facilities
Parks
Traffic
Street
Subtotal Capital Projects Funds
Enterprise Fund
Dumas Bay Centre
6.288
64,577 64
3,526 673
1.204 3,526
69,307 10,551
32,144
206
Internal Service Funds
Risk Management
46,390
12,613
Information Systems
68.636
72,058
Support Services
20,032
10,958
Fleet & Equipment
26,519
33,204
Buildings & Furnishings
200
2.866
Subwal Internal Setvzo Funds
181,777
131,599
rorai Due 7o/Fro7 Other Funds
376224
375.22A
Totallnterfund ReceivableslPayables
$ 386.224 S
386,224
Residual Equity Transfers
Residual equity transfers are nonrecurring or non -routine transfers of equity between funds. They do not
represent expenditures of the transferring fund but a change in a fund balance. In governmental funds,
they are reported as an increase or decrease in the beginning fund balance. For a proprietary fund, they
are presented as an increase or decrease in the fund's contributed capital or retained earnings. The
following residual equity transfers were recorded in 1997:
Fund Category
Transfers In Transfers Out
General Fund
$ $ 108,160
Special Revenue Funds
50,460
Capital Project Funds
35,181
Internal Service Funds
193,801
$ 193,801 $ 193,801
The above amount of $193,801 was transferred from, governmental funds to the internal service funds,
which record related transactions as additions to contributed capital.
Operating Transfers
Operating transfers are legally authorized contributions of resources from one fund to another to subsidize
designated activities or expenditures. Except for the Enterprise Fund, operating transfers are accounted
for as "Other Financing Sources and Uses". The following operating transfers were recorded during 1997:
Fund Category
Transfers In
Translers Out
General Fund
$ 122,005
$ 1,705,301
Special Revenue Funds
2,226,731
6,990,416
Debt Service Fund
2,984,667
Capital Project Funds
3,781.652
1,180,057
Enterprise Fund
643,000
4,062
Internal Service Funds
121,781
-
3 9.879.836
$ 9,879.836
42 / City of Federal Way
NOTE 14:
Contributed Capital
Contributed capital in internal service funds records the amounts of working capital and fixed assets
received from other funds. Contributed capital forms one of two classifications of equity found on the
balance sheet of a proprietary fund. Contributed capital is created when a residual equity transfer is
received by a proprietary fund, when a general fixed asset is "transferred" to a proprietary fund or
when a grant is received that is externally restricted to capital acquisition or construction.
Contributions restricted to capital acquisition and construction and fixed assets received from
developers and customers, as well as amounts of tap fees in excess of related costs, also would be
reported in this category.
During 1997 various transactions impacted the contributed capital of proprietary funds. These
transactions have been identified in the following presentation:
Beginning
Contributed Capital
Additions:
Residual Equity Transfers
Land/Equipment/
Furniture Donations
Total Additions
Deductions:
Amortization
Total Deductions
Ending
Contributed Capital
Internal Service Funds Subtotal Total
Enterprise Information Support Fleet & Buildings & Internal Service Proprietary
Fund Systems Services Equipment Furnishings Funds Funds
$2,596,455 $ 953,346 $ 88,995 $1,424,249 $ 562,676 $ 3,029,266 $ 5,625,721
98,380 - 63,736 31,685 193,801 193,801
204,111 178,253 15,599 397,963 397,963
302,491 241,989 47,284 591,764 591,764
(41,188) (259,913) (29,878) (345,289) (88,112) (723,192) (764.380)
(41,188) (259,913) (29,878) (345,289) (88,112) (723,192) (764,380)
$2,565.267 $ 995,924 $ 59,117 $1,320,949 $ 521,848 $ 2,897,838 $ 5,453.105
The following is a reconciliation of depreciation expense to depreciation reducing contributed capital:
Internal Service Funds
Subtotal
Total
Enterprise
Information Support Fleet &
Buildings &
Internal Service
Proprietary
Fund
Systems Services Equipment
Furnishings
Funds
Funds
Depreciation Expense $ 41,188
$ 259,913 $ 29,878 $ 345,289
$ 204,612
$ 839,692 $
880,880
Less:
Write-off of
Accumulated Depreciation
(755)
(1,500)
(2,265)
(2,255)
Depreciation on Building
(116,500)
(116,500)
(116,500)
Depreciation Reducing
Contributed Capital 5 41,188 $ 259,913 S 29.878 $ 344.534 5 86,612 5 720,937 $ 762,125
NOTE 15:
Contractual Obligations, Contingencies and Litigation
As of December 31, 1997, there were a small number of claims for damages and lawsuits pending
against the City. In the opinion of the City Attorney, however, neither the potential liability for any
single claim or lawsuit, nor the aggregate potential liability arising from all actions currently pending
would materially affect the financial condition of the City. Due to both their uncertainty and
immateriality, no liabilities or estimated liabilities have been included in the City's financial statements.
City of Federal
143
At December 31, 1997, the City had the following unpaid contractual obligations:
$ 25,966
Lake Killarney
$ 117,294
Campus Drive Project
$ 72,140
Celebration Park
$ 29,073
Steel Lake Improvements
$ 145,958
SeaTac Mall Detention
$ 371,933
South 356th Regional Storage Facility
$ 28,776
21st Ave ® SW 325th Signal
$ 30,113
Dash Point Road ® 8th Ave SW/4th
$ 28,797
Dash Point Road ® 21st Ave SW
$ 21,590
South 336th ® SR99-Construction RHTL
$ 1,152.587
SW 336th ® 21 st to 27th Ave SW
$ 124,909
South 312th - SR99 to 23rd Ave S
NOTE 16:
Fund Additions and Deletions
During 1997, the City added one Special Revenue Fund and one Capital Project Fund. The Utility Tax
Project Fund, a special revenue fund type, was added to account for utility tax. The City Facilities
Fund, a capital project fund type, was added to account for some capital improvement projects funded
with the 1997 Limited General Obligation Bond.
The City also deleted the Deferred Compensation Fund, an agency fund. This fund was established to
account for the City's employee tax deferred compensation program. Since the City does not record
deferred compensation on it's books beginning January 1, 1997, the fund is no longer needed.
NOTE 17:
Subsequent Events
On March 3, 1997, the City Council passed an ordinance to annex Enchanted Park, a 71.56 acres
amusement park located between SR 161 (Enchanted Parkway), Interstate 5, Milton Road South,
South 369th Street, and 19th Way South. The annexation is effective April 20, 1998.
During 1997, the City's Police Department voted to form a union. The bargaining unit, the Federal
Way Police Guild, was certified on March 18, 1997 and consisted of all sworn police officers,
excluding supervisors. The City is currently working with the union to negotiate a contract.
On April 21, 1998 the City Council postponed indefinitely the actions associated with withdrawing the
notice of intent to assume the Lakehaven Utility filed with the Pierce County Boundary Review Board
and the dismissal of open public meetings act lawsuit filed against Lakehaven Utility District.
CITY OF
0-
...
u•
General Fund The General Fund is used to account for all receipt and disbursement transactions
associated with ordinary City operations that are not required to be accounted for in
another fund, This fund is both tax and general revenue supported. Major revenue
sources for the General Fund include property, sales, excise and other taxes, and
miscellaneous permits and fees,
City of Federal Way / 46
GENERALFUND
COMPARATIVE BALANCE SHEET
December 31, 1997 and 1996
1997
1996
ASSETS
Equity in pooled cash and investments
$ 3,825,514
$ 2,783,337
Receivables (net):
Taxes
198,240
197,005
Accounts and contracts
61,232
61,259
Interest
45,329
30,124
Due from other funds
86,516
29,954
Due from other governments
1,258,440
1,251,767
Interfund loans receivable
10,000
10,000
TOTAL ASSETS
5,485,271
4,363,446
LIABILITIES AND FUND BALANCE
Liabilities:
Vouchers payable
256,184
1,064,511
Accounts/payroll payable
78,924
1,018
Retainage payable
11,787
11,787
Due to other governments
276,792
119
Due to other funds
136,550
97,727
Deposits payable
216,469
191,479
Deferred revenues
227.477
184,366
TOTAL LIABILITIES
1,204,183
1,551,007
Fund balances:
Reserved for:
Interfund loans
10,000
10,000
Petty cash/change funds
15,009
3,500
Police Special Funds
92,016
9,646
Advance travel
5,000
5,000
Unreserved:
Designated for COPS grants
674,778
Undesignated
3,484,285
2,784,293
TOTAL FUND BALANCE
4,281,088
2,812,439
TOTAL LIABILITIES AND FUND BALANCE
$ 5,485,271
$ 4,363,446
City of Federal Way / 47
GENERALFUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Years Ended December 31, 1997 and 1996
1997
1996
REVENUES
Taxes
$ 16,123,086
$ 15,620,138
Licenses and permits
1,048,918
836,182
Intergovernmental
3,352,255
2,709,228
Service charges and fees
846,065
755,924
Fines and forfeitures
576,054
520,670
Miscellaneous:
Interest
242,383
289,029
Other
226,375
128,238
TOTAL REVENUES
22,415,136
20,859,409
EXPENDITURES
Current:
General government
3,365,715
3,666,881
Security of persons and property
10,282,388
10,269,193
Physical environment
20,869
20,394
Transportation
75,584
69,146
Economic environment
2,213,059
2,253,424
Health
457,211
488,604
Culture and recreation
2,521,085
2,944,815
Capital outlay
319,120
1,549,146
TOTAL EXPENDITURES
19,255,031
21,261,603
EXCESS OF REVENUES OVER EXPENDITURES
3,160,105
(402,194)
OTHER FINANCING SOURCES (USES):
Operating transfer in 122,005 451,678
Operating transfers out (1,705,301) (1,335,623)
TOTAL OTHER FINANCING SOURCES (USES) (1,583,296) (883,945)
EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES
OVER EXPENDITURES AND OTHER USES 1,576,809 (1,286,139)
FUND BALANCE AT BEGINNING OF YEAR 2,812,439 4,225,224
Residual equity transfers out (108,160) (126,646)
FUND BALANCE AT END OF YEAR $ 4,281,088 $ 2,812,439
City of Federal Way / 48
GENERALFUND
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
For the Years Ended December 31, 1997 and 1996
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Miscellaneous:
Interest
Other
TOTALREVENUES
EXPENDITURES:
Current:
General government
Security of persons and property
Physical environment
Transportation
Economic environment
Health
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Operating transfers in
Operating transfers out
TOTAL OTHER FINANCING SOURCES (USES)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER EXPENDITURES
AND OTHER USES
FUND BALANCE AT BEGINNING OF YEAR
Residual equity transfers out
FUND BALANCE AT END OF YEAR
Budget
$ 15,831,062
1,073,055
3,220,249
873,216
639,830
344,527
22,089,573
$ 16,123,086
1,048,918
3,352,255
846,065
576,054
242,383
226,375
4,201,209
3,365,715
11,179,159
10,282,388
21,500
20,869
-
75,584
2,430,133
2,213,059
486,832
457,211
2,649,091
2,521,085
20,000
319,120
20, 987, 924 19, 255, 031
1,101,649 3,160,105
Variance
Favorable
(Unfavorable)
$ 292,024
(24,137)
132,006
(27,151)
(63,776)
(102,144)
118.741
325.563
1996
$ 15,620,138
836,182
2,709,228
755,924
520,670
289,029
128,238
20, 859, 409
835,494
3,666,881
896,771
10,269,193
631
20,394
(75,584)
69,146
217,074
2,253,424
29,621
488,604
128,006
2,944,815
(299,120)
1,549,146
2,058,456 (402,194)
122,005 122,005 451.678
(1,554,745) (1,705,301) (150,556) (1,335,623)
(1,432,740) (1,583,296) (150,556) (883,945)
(331,091) 1,576,809 1,907,900 (1,286,139)
2,812,439 2,812,439 - 4,225,224
(260,608) (108,160) 152,448 (126,646)
$ 2,220,740 $ 4,281,088 $ 2,060,348 $ 2,812,439
City of Federal Way / 49
GENERALFUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31, 1997
Variance
Favorable
Budget
Actual
(Unfavorable)
GENERALGOVERNMENT
LEGISLATIVE:
Personal services
$ 71,837
$ 71,636
$ 201
Supplies
2,060
2,208
(148)
Service charges and fees
90,176
88,947
1,229
Intergovermental services
70,000
78,561
(8,561)
Interfund services
25.481
22.162
3,319
TOTAL LEGISLATIVE
259,554
263,514
(3,960)
JUDICIAL:
Service charges and fees
16,188
9,744
6,444
Intergovermental services
398,488
337,798
60,690
TOTAL JUDICIAL
414,676
347,542
67,134
EXECUTIVE:
Personal services
348,841
374,281
(25,440)
Supplies
6,547
3,762
2.785
Service charges and fees
28,903
21,408
7,495
Interfund services
737,953
46,614
691,339
TOTAL EXECUTIVE
1,122,244
446,065
676,179
FINANCIAL AND RECORD SERVICES:
Personal services
635,537
640,036
(4,499)
Supplies
10,675
10,589
86
Service charges and fees
74.022
85,095
(11,073)
Intergovermental services
26,000
29,573
(3,573)
Interfund services
184,530
147,370
37,160
TOTAL FINANCIAL AND RECORD SERVICES
930,764
912,663
18,101
LEGAL:
Personal services
530,962
559,327
(28.365)
Supplies
8,636
12,171
(3,535)
Service charges and fees
372,711
309,348
63,363
Intergovermental services
1.000
315
685
Interfund services
84.515
71,115
13,400
TOTAL LEGAL
997,824
952,276
45,548
PERSONNEL:
Personal services
208,119
208,699
(580)
Supplies
10,453
7,685
2,768
Service charges and fees
99,284
71,901
27,383
Interfund services
50,737
41.780
8.957
TOTAL PERSONNEL
368,593
330,065
38,528
CENTRAL SERVICES:
Personal services
73,800
66,631
7,169
Supplies
650
11,096
(10,446)
Service charges and fees
19,016
24,782
(5,766)
Interfund services
14,088
11,081
3.007
TOTAL CENTRAL SERVICES
107,554
113,590
(6,036)
TOTAL GENERAL GOVERNMENT
4,201,209
3,365,715
835,494
Page 1 of 4
City of Federal Way / 50
GENERALFUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31. 1997
(Continued)
SECURITY OF PERSONS AND PROPERTY
LAW ENFORCEMENT:
Personal services
Supplies
Service charges and fees
Intergovermental services
Interfund services
TOTAL LAW ENFORCEMENT
DETENTION AND/OR CORRECTION:
Intergovermental services
TOTAL DETENTION AND/OR CORRECTION
COMMUNICATION, ALARM & DISPATCH:
Personal services
Supplies
Service charges and fees
Intergovermental services
Interfund services
TOTAL COMMUNICATION, ALARM & DISPATCH
TOTAL SECURITY OF PERSONS AND PROPERTY
PHYSICAL ENVIRONMENT
NATURAL RESOURCES:
Intergovermental services
TOTAL NATURAL RESOURCES
TOTAL PHYSICAL ENVIRONMENT
Variance
Favorable
Budget
Actual
(Unfavorable)
6,679,085
6,475,081
204,004
97,300
244,856
(147,556)
1,029.132
516,552
512,580
137.175
19,866
117,309
1,038.955
763.321
275,634
8,981,647
8.019,676
961,971
782,000
844,343
(62,343)
782,000
844,343
(62.343)
338,681
422,785
(84,104)
2,500
2,837
(337)
9,279
11,175
(1,896)
983,666
981.572
2,094
81,386
-
81,386
1,415,512
1,418,369
(2,857)
11,179,159
10.282,388
896,771
21,500 20,869 631
MUNICIPAL VEHICLES & PUBLIC WORKS EQUIPMENT:
Supplies
965
(965)
Service charges and fees
459
(459)
Capital
74,160
(74,160)
TOTAL MUNICIPAL VEHICLES & PUBLIC WORKS EQUIPMENT
75,584
(75,584)
TOTAL TRANSPORTATION
75,584
(75,584)
ECONOMIC ENVIRONMENT
AGING:
Personal services
50,494
50,687
(193)
Supplies
7,750
6,341
1,409
Service charges and fees
3,190
2,253
937
TOTAL AGING
61,434
59,281
2,153
COMMUNITY SERVICES:
Personal services
114,666
105,977
8,689
Supplies
4,394
6,185
(1,791)
Service charges and fees
52,427
22,716
29,711
Interfund services
16,399
7,291
9 108
TOTAL COMMUNITY SERVICES
187,886
142,169
45,717
Page 2 of 4
City of Federal Way / 51
GENERALFUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31. 1997
(Continued)
Variance
Favorable
Budget
Actual
(Unfavorable)
PLANNING AND COMMUNITY DEVELOPMENT:
Personal services
921,139
915.904
5,235
Supplies
10,655
8.927
1,728
Service charges and fees
329,382
232.195
97,187
Intergovermental services
50
50
Interfund services
249,463
213.313
36,150
TOTAL PLANNING AND COMMUNITY DEVELOPMENT
1,510,689
1,370,339
140,350
HOUSING AND COMMUNITY DEVELOPMENT:
Personal services
487.220
479,241
7,979
Supplies
5.844
7,056
(1,212)
Service charges and fees
43,437
30,092
13,345
Interfund services
133,623
124.881
8,742
TOTAL HOUSING AND COMMUNITY DEVELOPMENT
670.124
641.270
28,854
TOTAL ECONOMIC ENVIRONMENT
2,430,133
2,213,059
217,074
MENTAL & PHYSICAL HEALTH
PUBLIC HEALTH:
Personal services
77,969
79,885
(1,916)
Supplies
1,214
942
272
Service charges and fees
357.144
338,023
19,121
Intergovermental services
14,500
15,722
(1,222)
Interfund services
36,005
22,639
13,366
TOTAL PUBLIC HEALTH
486,832
457,2 11
29,621
TOTAL MENTAL & PHYSICAL HEALTH
486,832
457,211
29,621
CULTURE AND RECREATION
EDUCATION:
Personal services
223,577
215,110
8,467
Supplies
1,950
2,546
(596)
Service charges and fees
66,226
49,029
17,197
Interfund services
118,852
85,321
33,531
TOTAL EDUCATION
410,605
352,006
58,599
SPECTATOR AND COMMUNITY EVENTS:
Personal services
279,792
281,730
(1,938)
Supplies
30.965
34,982
(4,017)
Service charges and fees
199,555
169,296
30,259
Intergovermental services
4,300
4.300
Interfund services
23,214
21,669
1,545
TOTAL SPECTATOR AND COMMUNITY EVENTS
537,826
507,677
30,149
PARTICIPANT RECREATION:
Personal services
224,409
201,593
22,816
Supplies
20,945
11,046
9,899
Service charges and fees
14,038
14,135
(97)
Intergovermental services
8,330
575
7,755
TOTAL PARTICIPANT RECREATION
267,722
227,349
40,373
Page 3 of 4
City of Federal Way / 52
GENERALFUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31, 1997
(Continued)
CULTURAL AND RECREATION FACILITIES:
Personal services
Supplies
Service charges and fees
Intergovermental services
TOTAL CULTURAL AND RECREATION ACTIVITIES
PARK FACILITIES:
Personal services
Supplies
Service charges and fees
Intergovermental services
Interfund services
TOTAL PARK FACILITIES
TOTAL CULTURE AND RECREATION
CAPITAL OUTLAY
OTHER FINANCING USES
Residual equity transfers out
Operating transfers out
TOTAL OTHER FINANCING USES
TOTAL GENERAL FUND
Variance
Favorable
Budget
Actual
(Unfavorable)
18,928
31,655
(12,727)
7,180
4,072
3,108
50,546
38,505
12,041
11775
-
1,775
76,429
74,232
4,197
712,121
795,322
(83,201)
120,737
82,427
38,310
372,940
319,867
53,073
12,500
5,530
6,970
136,211
156,675
(20,464)
1,354,509
1.359,821
(5,312)
2,649,091
2,521.085
128.006
20,000
319,120
(299,120)
260,608
108,160
152,448
1,554,745
1,705,301
(150,556)
1,815,353
1,813,461
1,892
$ 22.803.277
$ 21,068,492
$ 1.734,785
Page 4 of 4
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.
A description of each individual Special Revenue Fund included in the Comprehensive
Annual Financial Report is provided below:
The Street Fund accounts for receipt and
disbursement of State -levied "unrestricted" motor
vehicle fuel taxes which must be accounted for in a
separate fund and expended for street -oriented
engineering, construction and maintenance purposes
only.
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 Utility Tax Fund was established to account for
all utility tax receipts. These receipts will subsequently
be distributed to various funds (Debt Service, Capital
Improvement Projects, etc.) for project expenditure as
determined by the City Council.
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 Snow and Ice Removal Fund was created to
account for the snow and ice removal funding and
carryover from year to year.
The Two Percent for Arts Fund was established for
the purpose of providing funding for arts projects. The
funds are to be used to create a variety of cultural
opportunities for citizens and to enhance the cultural
environment in the community by encouraging and
promoting the creation and placement of art in public
places and the incorporation of art into project design.
The 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 % % motor vehicle
fuel tax receipts which are restricted in use to the
construction and maintenance of paths and trails within
City right-of-way.
The Surface Water Management Fund was
established to administer and account for all receipts
and expenditures related to the City's surface and
storm water management system.
The Donations Fund was established to receive
donations designated for specific purposes identified
by the donor.
The Impact Fee Fund was established to account for
revenue from development impact fees, authorized by
State law and designated for transportation, park and
other improvements. These fees provide funding to
partially finance improvements mitigating the
cumulative impacts of growth and development within
the City.
The Strategic Reserve Fund was established to set
aside financial resources to be used to mitigate
adverse situations occurring as the result of severe
short-term revenue shortfalls or expenditures resulting
from emergencies, or as otherwise designated by the
City
The Airport Strategic Reserve Fund was established
to set aside financial resources to contest expansion of
the Sea Tac International Airport.
City of Federal Way / 56
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
December31, 1997
With Comparative Totals for December 31, 1996
Special
Arterial
Utility Tax
Solid Waste/
Contracts/
Street
Street
Projects
Recycling
Studies
ASSETS
Equity in pooled cash and investments
$ 502,569
$ 500,689
$ 81,697
$ 210,223
$ 130,596
Retainage in escrow
-
Receivables (net):
Taxes
-
Accounts and contracts
-
432,298
23,666
-
Interest
5,885
5,862
957
2,461
1,529
Due from other funds
15,941
-
-
1,018
_
Due from other governments
217,962
45,114
-
69,872
_
TOTAL ASSETS
742,357
551,665
514,952
307.240
132,125
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
129,954
14,920
Accounts/payroll payable
2,033
5,747
Retainage payable
6,074
-
Due to other governments
8,000
- -
Due to other funds
23,159
8,080
292
Performance bonds
Deposits payable
419,612
- -
-
Interfund loans payable
-
-
-
Deferred revenues
52,388
TOTAL LIABILITIES
641,220
- 8,080
20,959 -
Fund balance:
Reserved for:
Paths and trails
-
_
- -
Unreserved:
Designated snow 8 ice removal
-
-
_. -
Undesignated
101,137
551,665 506,872
286,281 132,125
TOTAL FUND BALANCES
101.137
551,665 506,872
286,281 132,125
TOTAL LIABILITIES AND FUND BALANCE $
742,357
$ 551,665 $ 514,952
$ 307,240 $ 132,125
Page 1 of 3
of Federal Wav / 57
Community
Paths and
Snow and
2% for the
Development
Trails
Surface Water
Impact
Ice Removal
Arts
Block Grant
Reserve
Management
Fee
$ 127,383
$ 8,792
$ 8,963
$ 2,778
$ 1,113,218
$ 338,542
-
98,124
-
1,492
54
13,366
3,964
-
-
9,521
-
-
-
66,059
712
2,443
128,875
8,792
75,022
3,544
1,236,672
342,506
38 5,529
25,032
- -
36,900
13,872 -
59,493
6,194 -
-
23,720
10,000
- -
83,651
38 75,022
165,649 23,720
- 3,544 -
128,837 - - -
- 8,792 - 1,071,023 318,786
11tl,t1J/ t6,/yL - J,044 1,U/1,UZJ J1ts,/tl6
$ 128,875 $ 8,792 $ 75,022 $ 3,544 $ 1,236,672 $ 342,506
Page 2 of 3
City of Federal Way / 58
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
December 31, 1997
With Comparative Totals for December 31, 1996
Airport
Strategic
Strategic
Totals
Totals
Reserve
Reserve
1997
1996
ASSETS
Equity in pooled cash and investments
$ 1,708,075
$ 300,000
$ 5,033,525
$ 6,052,610
Retainage in escrow
-
-
-
28,348
Receivables (net):
Taxes
98,124
-
Accounts and contracts
455,964
29,358
Interest
23,513
-
59,083
65,610
Due from other funds
-
26,480
10,054
Due from other governments
-
-
402,162
262,226
TOTAL ASSETS
1,731,588
300,000
6,075,338
6,448,206
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable -
175,473
311,131
AccounWpayroll payable -
44,680
300
Retainage payable -
6,074
32,326
Due to other governments
21,872
-
Due to other funds -
97,218
39,121
Performance bonds -
-
341,690
Deposits payable -
443,332
42,907
Interfund loans payable -
10,000
10,000
Deferred revenues -
136,039
65,184
TOTAL LIABILITIES
934,688
842,659
Fund balance:
Reserved for:
Paths and trails
3,544
5,476
Unreserved:
Designated snow & ice removal - -
128,837
80,066
Undesignated 1,731,588 300,000
5,008,269
5,520,005
TOTAL FUND BALANCES 1,731,588 300,000
5,140,650
5,605,547
TOTAL LIABILITIES AND FUND BALANCE $ 1,731,588 $ 300,000
$ 6,075,338
$ 6,448,206
Page 3 of 3
CITY OF
- - --- --- --- --
'JA iW •'n{ M ..
City of Federal Way / 60
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Solid
Special
Arterial
Utility
Waste/
Contracts/
Street
Street
Tax
Recycling
Studies
REVENUES:
Taxes $
$
$ 3,859,545
$
$
Licenses and permits
63,217
-
-
Intergovernmental
1,917,478
571,987
309,716
Service charges and fees
125,341
-
142,995
Miscellaneous:
Interest
24,729
20,974
73,412
14,612
7,868
Other
1,637
-
18,068
-
TOTAL REVENUES
2,132,402
592,961
3,932,957
485.391
7,868
EXPENDITURES:
Current:
General government
-
-
-
-
Physical environment
-
-
507,915
Transportation
2,953,865
1,606,804
-
Economic environment
_
Capital outlay
TOTAL EXPENDITURES
2,953,865
1,606,804
-
507,915
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
(821,463)
(1,013,843)
3,932,957
(22,524)
7,868
OTHER FINANCING SOURCES (USES):
Operating transfers in
991,168
1,133,489
Operating transfers out
(216,634)
-
(3,426,085)
TOTAL OTHER FINANCING SOURCES (USES
774,534
1,133,489
(3,426,085)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(46,929)
119,646
506,872
(22,524)
7,868
FUND BALANCES AT BEGINNING OF YEAR
157,916
432,019
-
309,239
124,257
Residual equity transfers out
(9,850)
-
-
(434)
-
FUND BALANCES AT END OF YEAR $
101,137
$ 551,665
$ 506,872
$ 286,281
$ 132,125
Page 1 of 3
City of Federal Way / 61
Snow
Community
Paths and
and Ice 2% for the
Development
Trails
Surface Water Donations
Impact
Removal Arts
Block Grant
Reserve
Management Fund
Fee
9,414
439,312
8,526
1,301
-
-
2,903,395
217,583
5,601
542
118,839
29,955
141
15.015
439,312
9,068
3,023,676
247,538
50,000 - -
56,503 1,448,467 -
44,974 - -
56,503 94,974 1,448,467
(41,488)
344,338 9,068
1,575,209
247,538
90,259
- -
11,815
(344.330) (11,000)
(2,105,922)
(2,046)
(762,610)
90,259
(344,338) (11,000)
(2,094,107)
(2,046)
(762,610)
48,771
(1,932)
(518,898)
(2,046)
(515,072)
80,066
8,792 5,476
1,630,097
2,046
833,858
-
(40,176)
$ 128,837 $
8,792 $ $ 3,544
$ 1,071,023 $
$ 318,786
Page 2 of 3
City of Federal Way / 62
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Airport
Strategic Strategic
Reserve Reserve
REVENUES:
Taxes
$ $
Licenses and permits
Intergovernmental
Service charges and fees
-
Miscellaneous:
Interest
131,588
Other
TOTAL REVENUES
131,588
EXPENDITURES:
Current:
General government
-
Physical environment
Transportation
Economic environment
Capital outlay
TOTAL EXPENDITURES
-
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
131,588
OTHER FINANCING SOURCES (USES):
Operating transfers in
-
Operating transfers out
(121,781)
TOTAL OTHER FINANCING SOURCES (USES
(121,781)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
Totals
1997 1996
$ 3,859,545
$
63,217
81,037
3,257,734
2.958,252
3,389,314
3,439,754
428,120
354,317
19,846
14,130
11,017,776 6.847.490
50,000
164,357
507,915
283,802
6,065,639
5,240,802
44,974
44,616
128,702
6,668,528 5,862,279
4,349,248 985,211
2,226,731 1,203,867
(6,990,416) (1,825,949)
(4,763,685) (622,082)
EXPENDITURES AND OTHER USES 9,807 (414,437) 363,129
FUND BALANCES AT BEGINNING OF YEAR 1,721,781 300,000 5,605,547 5,314,928
Residual equity transfers out - (50,460) (72,510)
FUND BALANCES AT END OF YEAR $ 1,731,588 $ 300,000 $ 5,140,650 $ 5,605,547
Page 3 of 3
CITY •F
N:
L�rz I -
City of Federal Way / 64
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
REVENUES:
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Miscellaneous:
Interest
Other
TOTALREVENUES
EXPENDITURES:
Current:
Physical environment
Transportation
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Operating transfers in
Operating transfers out
TOTAL OTHER FINANCING SOURCES (USES
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
FUND BALANCES AT BEGINNING OF YEAR
Residual equity transfers out
FUND BALANCES AT END OF YEAR
Street Fund
Variance
Favorable
1996
Piidq :t
Actual
(Unfavorable)
Actual
80,473
63,217
(17.256)
81,037
1,900,788
1,917,478
16,690
1.855,015
141,663
125,341
(16,322)
117,978
32,638
24,729
(7,909)
35,392
1,637
1,637
11,315
2,155,562
2.132,402
(23,160)
2,100,737
3,079,359
2,953,865
125,494
2,851,215
3,079,359
2,953,865
125,494
2,851,215
(923,797)
(821,463)
102,334
(750.478)
991,168
991,168
-
850,000
(216,634)
(216,634)
(298,471)
774,534
774,534
551,529
(149,263)
(46,929)
102,334
(198,949)
157,916
157,916
-
378,483
(8,653)
(9,850)
(1,197)
(21,618)
$
$ 101.137
$ 101,137
$ 157,916
Page 1 of 7
City of Federal Way / 65
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Arterial Street Fund
Utility Tax Fund
Variance
Variance
Favorable
1996
Favorable 1996
Budget
Actual
(Unfavorahiel
Actual
Budget
Actual
(Unfavorable) Actual
$
$
$
$
$ 3,468,705
$ 3,859,545
$ 390,840 $
563,850
571,987
8,137
698,951
32,134
20,974
(11,160)
22,730
73,412
73,412
.
21
-
595,984
592,961
(3,023)
721,702
3,468,705
3,932,957
•464.252
2,091,662
1,606,804
484,858
863,333
2,091,662
1,606,804
484,858
863,333
-
(1,495,678)
(1,013,843)
481,835
(141,631)
3,468,705
3,932,957
464,252
1,133, 489
1,133,489
209,390
-
-
-
-
(3,468,705)
(3,426,085)
42,620
1,133,489
1,133,489
209,390
(3,468,705)
(3,426,085)
(362,189)
119,646
481,835
61,759
506,872
506,872
432,019
432,019
-
370,260
$ 69,830
$ 551,665
$ 481,835
$ 432,019
$
$ 506,872
$ 506,872 $
Page 2 of 7
City of Federal Way / 66
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Solid WastelRecycfing Fund
Variance
Favorable 1996
Budget Actual (Unfavorable) Actual
=W1►III:K
Taxes
$
$
$ _
$
Licenses and permits
_
_
Intergovernmental
360.401
309,716
(50,685)
152,401
Service charges and fees
144.024
142,995
(1,029)
143,425
Miscellaneous:
Interest
10,738
14,612
3.874
15,110
Other
-
18,068
18,068
194
TOTAL REVENUES
515,163
485,391
(29,772)
311,130
EXPENDITURES:
Current:
Physical environment
Transportation
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Operating transfers in
Operating transfers out
TOTAL OTHER FINANCING SOURCES (USES
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
FUND BALANCES AT BEGINNING OF YEAR
Residual equity transfers out
FUND BALANCES AT END OF YEAR
586,757
507,915
586,757
507,915
(71,594)
(22,524)
78.842 283,802
78,842 283.802
49,070 27,328
(71,594) (22,524) 49,070 27,328
309,239 309,239 - 282,457
(530) (434) 96 (546)
$ 237,115 $ 286,281 $ 49,166 $ 309,239
Page 3 of 7
City of Federal Way / 67
SPECIAL REVENUE FUNDS
COMBINING
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Snow and Ice Removal Fund
Paths and Trails
Reserve Fund
Variance
Variance
Favorable
1996
Favorable
1996
Budget
Actual
(Unfavorable)
Actual Budget Actual
(Unfavorable)
Actual
9,413
9,414
1
8,528 8,526
(2)
8,358
5,000
5,601
601
5,984 306 542
236
2,139
-
-
-
22 -
14,413
15,015
602
6,006 8,834 9,068
234
10,497
84,738
56,503
28,235
76,270
84,738
56,503
28,235
76,270
(70,325)
(41.488)
28,837
(70,264) 8,834 9,068
234
10,497
90,259 90,259 50,330
- - (4,476) (11,000) (11,000)
90,259 90,259 - 45,854 (11.000) (11,000)
19,934 48,771 28,837 (24,410) (2,166) (1,932)
(55,000)
- (55,000)
234 (44.503)
Page 4 of 7
of Federal Wa v / 68
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Surface Water Management Fund
Variance
Favorable
1996
Budget
Actual
(Unfavorable)
Actual
REVENUES:
Taxes
$
$
$
$
Licenses and permits
-
-
Intergovernmental
1,301
1,301
43,207
Service charges and fees
2.914,559
2,903,395
(11,164)
2,995,557
Miscellaneous:
Interest
99,473
118,839
19,366
96,955
Other
141
141
2,578
TOTAL REVENUES
3.014,032
3,023,676
9,644
3,138,297
EXPENDITURES:
Current:
Physical environment
-
-
Transportation
1,505.356
1,448,467
56,889
1,449,984
TOTAL EXPENDITURES
1,505,356
1.448,467
56,889
1,449,984
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
1,508,676
1,575,209
66,533
1,588,313
OTHER FINANCING SOURCES (USES):
Operating transfers in
11.815
11,815
-
147
Operating transfers out
(2,151,713)
(2,105,922)
45,791
1,153,501
TOTAL OTHER FINANCING SOURCES (USES
(2,139,898)
(2,094,107)
45,791
1,153,648
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(631,222)
(518,898)
112,324
534,959
FUND BALANCES AT BEGINNING OF YEAR
1,630,097
1,630,097
1,145,484
Residual equity transfers out
(40,993)
(40,176)
817
(50,346)
FUND BALANCES AT END OF YEAR
$ 957,882
$ 1,071,023
$ 113,141
$ 1,630,097
Page 5 of 7
City of Federal Way / 69
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Strategic Reserve Fund Airport Strategic Reserve Fund
Variance Variance
Favorable 1996 Favorable 1996
Budget Actual (Unfavorable) Actual Budget Actual (Unfavorable) Actual
100,000 131,588 31,588 121,781
100,000 131.588 31,588 121,781
100,000 131,588 31,588 121,781
(121,781) (121,781) - (167,581) -
(121,781) (121,781) - (167,581)
(21,781) 9,807 31,588 (45,800) -
1,721,701 1,721,781 1,767,581 300,000 300,000 300,000
$ 1,700.000 $ 1,731,588 $ 31,588 $ 1,721,781 $ 300,000 $ 300,000 $ $ 300,000
Page 6 of 7
City of Federal Way / 70
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
Budget
Actual
REVENUES:
Taxes
$ 3,468,705
$ 3,859,545
Licenses and permits
80,473
63,217
Intergovernmental
2,842,980
2,818,422
Service charges and fees
3,200,246
3,171,731
Miscellaneous:
Interest
280.289
390,297
Other
-
19,846
TOTAL REVENUES
9,872,693
10,323,058
EXPENDITURES:
Current:
Physical environment
586,757
507.915
Transportation
6,761,115
6,065,639
TOTAL EXPENDITURES
7,347,872
6,573,554
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
2,524,821
3,749,504
OTHER FINANCING SOURCES (USES):
Operating transfers in
2,226,731
2,226.731
Operating transfers out
(5,969,833)
(5,881,422)
TOTAL OTHER FINANCING SOURCES (USES
(3,743,102)
(3,654,691)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(1,218,281)
94,813
FUND -BALANCES AT BEGINNING OF YEAR
Residual equity transfers out
FUND BALANCES AT END OF YEAR
Favorable
(Unfavorable)
$ 390,840
(17.256)
(24,558)
(28,515)
110,008
19,846
450,365
1996
Actual
81,037
2,757,932
3,256,960
300,091
14,130
6,410,150
78,842
695,476
283,802
5,240,802
774,318
5,524,604
1,224,683
885,546
1,103,867
88,411
(1,679,029)
88,411
(575,162)
1,313,094 310,384
4.636,594 4,636,594 - 4,398,720
(50,176) (50,460) (284) (72,510)
$ 3,368,137 $ 4,680,947 $ 1,312,810 $ 4,636,594
Page 7 of 7
Debt Service Fund The Debt Service Fund accounts for the accumulation of resources for and the
payment of general obligation and special assessment bond principal, interest and
related costs.
A description of the individual Debt Service Fund included in the Comprehensive
Annual Financial Report is provided below:
The Debt Service Fund accounts for the debt service
on City Council -approved general obligation bonds.
Revenues for this Fund consist of allocations of the
City's general property tax levy, operating transfers
from the Utility Tax Project Fund, or othe revenues
designated by the City Council.
City of Federal Way / 72
DEBT SERVICE FUND
COMPARATIVE BALANCE SHEET
December 31, 1997 and 1996
ASSETS
Equity in pooled cash and investments
Accounts receivable
Receivables (net):
Taxes
Interest
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
Liabilities:
Vouchers payable
TOTAL LIABILITIES
Fund balance:
Reserved for debt service
TOTAL FUND BALANCE
TOTAL LIABILITIES AND FUND BALANCE
1997 1996
$ 4,745,498 $ 2,525,142
153,316
165,331
55,566 25,355
146,325
4,966,395 2,850,138
502
4,965,893 2,850,138
4,965,893 2,850,138
$ 4,966,395 $ 2,850,138
City of Federal Way / 73
DEBT SERVICE FUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Years Ended December 31, 1997 and 1996
REVENUES
Taxes
Miscellaneous:
Interest
Other
TOTALREVENUES
EXPENDITURES:
Debt service:
Principal
Interest and fiscal charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Operating transfers in
TOTAL OTHER FINANCING SOURCES (USES)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
FUND BALANCE AT BEGINNING OF YEAR
FUND BALANCE AT END OF YEAR
1997
$ 1.879.269
234,311
$ 2.460.656
143,510
2,113,874 2,604.338
1,222,090
432,280
1,760.696
1.284,768
2.982,786
1,717,048
(868,912) 887,290
2,984,667 373,685
2,115,755 1,260,975
2,850,138 1,589,163
$ 4,965,893 $ 2,850,138
of Federal Way! 74
DEBT SERVICE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
For the Years Ended December 31, 1997 and 1996
199
REVENUES:
Taxes $ 1,100.000
Miscellaneous:
Interest 132,739
Other -
TOTAL REVENUES 1,232,739
EXPENDITURES:
Debt service:
Variance
7 Favorable
Actual (Unfavorable)
$ 1,879,269 $ 779,269
234,311 101,572
2,113,874
1996
$ 2.460,656
143,510
881,135 2,604,338
Principal
1,226,866
1,222,090
4,776
432.280
Interest and fiscal charges
1,783,439
1.760,696
22,743
1.284,768
TOTAL EXPENDITURES
3.010.305
2,982,786
27,519
1.717,048
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
(1,777,566)
(868,912)
908,654
887.290
OTHER FINANCING SOURCES (USES):
Operating transfers in
2,959,516
2,984,667
25.151
373.685
TOTAL OTHER FINANCING SOURCES (USES)
2,959,516
2,984,667
25,151
373,685
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
1,181,950
2,115,755
933,805
1.260,975
FUND BALANCE AT BEGINNING OF YEAR
2.850.138
2,850,138
-
1,589.163
FUND BALANCE AT END OF YEAR
$ 4,032,088
$ 4.965.893 $
933,805
$ 2,850,138
Capital Project 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.
A description of each individual Capital Project Fund included in the Comprehensive
Financial Report is provided below:
The Capital Project - City Facilities Fund was
established to account for receipts and disbursements
related to acquisition, design, construction and any
other related Downtown Revitalization and Public
Safety Facility capital project expenditures.
The Capital Project - Parks 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 - Surface Water Management
Fund was established to account for receipts and
disbursements related to acquisition, design,
construction and any other related surface water
management project expenditures.
The Capital Project - Traffic Fund was established to
account for receipts and disbursements related to
acquisition, design, construction and any other related
traffic project expenditures.
The Capital Project - Street Fund was established to
account for receipts and disbursements related to
acquisition, design, construction and any other related
street project expenditures.
City of Federal Way / 76
CAPITAL PROJECT FUNDS
COMBINING BALANCE SHEET
December31, 1997
With Comparative Totals for December 31, 1996
City
Surface Water
Totals
Facilities
Parks
Management
Traffic
Streets
1997
1996
ASSETS
Equity in pooled cash and investments
$ 6,896,542
$ 7,034.784
$ 4.075.811
$ 1,270.478
$ 5.260,523
$ 24.538,138
$ 14,821,713
Relainage in escrow
16,208
52,413
43,625
66,779
179,025
209,300
Receivables (net):
Accounts and contracts
-
-
5.445
47,420
121,400
174,265
2,318
Interest
50,028
51,642
47,725
14,959
61,513
225,867
143.233
Due from other funds
-
64,577
-
3,526
1,204
69,307
6.189
Due from other governments
-
361,792
1,594
119,276
482.662
18,693
TOTAL ASSETS
6,946,570
7,529,003
4,182,988
1,380,008
5,630,695
25,669.264
15,201,451
LIABILITIES AND FUND BALANCE
Liabilities:
Vouchers payable
193,154
89,066
110,659
247,354
640,233
897.287
Accounts payable
-
2,685
15,341
18,026
Retainage payable
33,915
4,693
-
-
38,608
14,296
Retainage in escrow
16,208
52,413
43,625
66,779
179,025
209,300
Due to other funds
6,288
64
-
673
3,526
10.551
-
Deposits payable
-
-
-
100
TOTAL LIABILITIES
6,288
246,026
161.513
154.957
317,659
886,443
1,120,983
Fund Balance:
Unreserved- undesignated
6,940,282
7,282,977
4,021,475
1,225,051
5,313,036
24,782,821
14,080,468
TOTAL FUND BALANCE
6.940,282
7,282,977
4,021,475
1,225.051
5,313,036
24,782.821
14.080.468
TOTAL LIABILITIES AND FUND BALANCES
$ 6,946,570
$ 7.529.003
$ 4,182,988
$ 1,380.008
$ 5,630,695
25,669,264
$ 15.201,451
of Federal Way/77
CAPITAL PROJECT FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Year Ended December 31, 1997
With Comparative Totals for December 31, 1996
city
Surface Water
Totals
Facilities
Parks
Management
Traffic
Streets
1997
1996
REVENUES:
Intergovernmental
$ -
i -
$ 67,428
$ 547
$ 629,521
$ 697,496
$ 1,212,507
Service charges and fees
-
-
47,420
-
47,420
-
Miscellaneous:
-
Interest
204,326
228,593
233,478
107,407
351,145
1,124,949
846,139
Other
50,826
9,574
60,400
161,275
TOTAL REVENUES
204,326
279,419
310,480
155,374
980,666
1,930,265
2,219,921
EXPENDITURES:
Capital outlay
1,204
2,292,031
2,712,829
1,437,216
2,481,925
8,926,205
5,986,095
Debt service:
Debt Issue cost
87,840
92,155
179,996
33,832
TOTAL EXPENDITURES
89,044
2,384,186
2,712,829
1,437,216
2,481,925
9,105,200
6,019,927
EXCESS (DEFICIENCY) OF REVENUES
115,282
(2,104,767)
(2,402,349)
(1,281,842)
(1,501,259)
(7,174,935)
(3,800,006)
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Bond proceeds (open space)
-
43,370
1Y �
.�°� y.
-
-
43,370
123,233
.W ggOA piac_eods
7 126000
155,544
-
-
14,869,480
2,504,600
.
Grants -
-
396,024
-
-
-
398,024
-
laan proceeds -
-
^----- --
-
-
-
-
1,166.580
Operating transfers in
-
578,205
2,170,086
435,264
598,097
3,781,652
1,115.500
Operating transfers out
(300,000)
(109,494)
(148,800)
(249,616)
(372,147)
(1,180,057)
(242,642)
TOTAL OTHER FINANCING SOURCES (USES)
g91 6.825,000
8,499,041
2,176,830
185,648
225,950
17,912,469
4,667,271
EXCESS (DEFICIENCY) OF REVENUES AND
OTHER AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
6,940,282
6,394,274
(225,519)
(1,096,194)
(1,275,309)
10,737,534
867,265
FUND BALANCE AT BEGINNING OF YEAR
-
923,884
4,246,994
2,321,245
6,568,345
14,080,468
13,229,922
Residual equity transfers out
-
(35,181)
a
(35,181)
(16,719)
FUND BALANCE AT END OF YEAR
$ 6,940,282
$ 7,282, 977
$ 4, 221, 475
$ 1, 225,051
$ 5, 113,036
$ 24, 882, 821
$ 14, 880,468
Enterprise Fund Enterprise Funds are used to account for government activities that are financed
and operated in a manner similar to private business, Costs of providing services to
the general public are primarily financed by user fees.
The Dumas Bay Centre Fund was established to
account for the revenues and expenses related to the
acquisition, capital improvements maintenance and
operations of the City -owned Dumas Bay Centre
Facility.
of Federal Way/80
ENTERPRISE FUND
DUMAS BAY CENTRE
COMPARATIVE BALANCE SHEET
December 31, 1997 and 1996
ASSETS
Current Assets
Equity in pooled cash and investments
Cash with escrow agent
Accounts receivable
Interest receivable
Due from other funds
Due from other governments
TOTAL CURRENT ASSETS
Property, plant and equipment:
Land
Building/structures
Office furniture/equipment
Less accumulated depreciation
Net property, plant and equipment
Construction work in progress
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
Current liabilities:
Accounts payable
Vouchers payable
Retainage payable - with escrow agent
Due to other funds
Deposits payable
Deferred revenue
Compensated absences payable
TOTAL CURRENT LIABILITIES
Fund equity:
Contributed capital
Retained Earnings:
Reserved for:
Petty cash/change fund
Unreserved
Retained Earnings
FUND EQUITY
TOTAL LIABILITIES AND FUND EQUITY
1997 1996
$ 1,205,588
$ 104,647
32,533
-
56,860
12,810
9,565
1,138
32,144
637
159
6.400
1,336,849
125.632
2.109,640
2,109,640
725,070
607.965
49,339
49,339
2,884,049
2,766,944
(143,893)
102,705
2,740.156
2.664,239
915,307
$ 4,992,312
$ 2,789,871
$ 3,692 $
-
25,560
21,969
32,533
-
206
2,218
10,855
2.559
60,937
-
2,648
1,867
136.431 28,613
2,555,267 2.596,455
110 -
2.300,504 164,803
2,300.614 164,803
4,855,881 2,761,258
$ 4,992.312 $ 2,789,871
City of Federal Way / 81
ENTERPRISE FUND
DUMAS BAY CENTRE
COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND EQUITY
For the Years Ended December 31, 1997 and 1996
OPERATING REVENUES:
Service charges and fees
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personal services
Materials and supplies
Services and charges
Taxes
Depreciation
Interfund charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES)
$ 346,465 $
2,795
349,260
290,332
291,291
117,161
109,322
52,196
12,123
290,548
258,862
-
2,176
41,188
34,235
16,232
18,093
517,325
434,811
(168,065) (143,520)
Investment income
50,500
6,017
Debt issue costs
(19,109)
State grants
159
5,506
Interlocal grants
42,000
6,400
GO bond proceeds
1,550,000
Donations/contributions
200
-
TOTAL NON -OPERATING REVENUES (EXPENSES)
1,623,750
17,923
INCOME (LOSS) BEFORE OPERATING TRANSFERS
1,455,685
(125,597)
Operating transfer in
643,000
91,903
Operating transfer out
(4,062)
-
NET INCOME (LOSS)
2,094,623
(33,694)
Depreciation reducing contributed capital
41,188
34,235
Increase in retained earnings
2,135,811
541
RETAINED EARNINGS, January 1
164,803
164,262
RETAINED EARNINGS, December 31
2,300,614
164,803
CONTRIBUTED CAPITAL, January 1
2,596,455
2,630,690
Less amortization
(41,188)
(34,235)
CONTRIBUTED CAPITAL, December 31
2,555,267
2,596,455
FUND EQUITY AT END OF YEAR $
4,855,881
$ 2,761,258
City of Federal Way / 82
ENTERPRISE FUND
DUMAS BAY CENTRE
COMPARATIVE STATEMENT OF CASH FLOWS
For the Years Ended December 31, 1997 and 1996
1997
1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users $
366,146
$ 277,459
Cash received from other funds for goods and services
(31,506)
4,987
Cash received from other governments for goods and services
6,241
Cash payments to suppliers for goods/services
(44,913)
(5,612)
Cash payments to employees
(116,380)
(108,153)
Cash payments to other funds for goods and services
(18,244)
(18,000)
Cash payments for other services/charges
(290,548)
(258,862)
Cash payments for taxes
4,330
(834)
Cash payments for damage deposits
3,966
(64)
Other operating receipts
1,022
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
(120,908)
(101957)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Subsidy from state grant
159
-
Subsidy from interlocal grant
42,000
5,506
Operating transfers in
643,000
91,903
Operating transfers out
(4,062)
NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES
681,097
97,409
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Bond proceeds 1,550,000
Debt issue costs (19,109)
Donations/contributions 200
Acquisition of capital asset/construction work in progress (1,032,412) (21,954)
NET CASH PROVIDED (USED) FOR CAPITAL
AND CAPITAL -RELATED FINANCING ACTIVITIES 498.679 (21,954)
CASH FLOWS FROM INVESTING ACTIVITIES.
Receipts of interest
42,073
6,681
NET CASH PROVIDED (USED) IN INVESTING ACTIVITES
42,073
6,681
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1,100,941
(25.921)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
104,647
130,568
CASH AND CASH EQUIVALENTS AT END OF YEAR
1,205,588
104.647
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED (U$ED) BY OPERATING ACTIVITIES
Operating income
(168,065)
(143,520)
Adjustments to reconcile operating income to
net cash provided (used) by operating activities:
Depreciation expense
41,188
34,235
(Increase)decrease in accounts receivable
(44,050)
(12,810)
(Increase)decrease in due from other funds
(31,506)
4,987
(Increase)decrease in due from other governments
6,241
Increase(decrease) in vouchers/accounts payable
7,283
6,511
Increase/(decrease) in due to other funds
(2,012)
94
Increase(decrease) in deposits payable
8,296
1,277
Increase(decreass) in deferred revenue
60,936
Increase(decrease) in accrued payrolU
compensated absences payable
781
1,169
TOTAL ADJUSTMENTS
47,157
35,463
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
$ (120,908) $
(1 O 057)
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.
A description of each individual Internal Service Fund included in the Comprehensive
Annual Financial Report is provided below:
The Risk Management Fund accounts for the City's
risk financing activities established to minimize adverse
effects of losses associated with property and
casualty, medical and dental, unemployment and
worker's compensation claims. Both risk control (to
minimize the losses that strike and organization) and
risk financing (to obtain finances to provide for or
restore the economic damages of those losses) are
involved. The City is currently self -insuring only State
Unemployment Compensation. Related premiums
received by the fund are used to reimburse the
unemployment benefits paid to eligible individuals and
to establish reserves for the payment of estimated
future unemployment claims liability. The City is also
currently recovering costs and building reserves for
general liability including property, casualty, errors and
omissions and fidelity coverage.
The Information Systems Fund was established to
account for all costs associated with data processing,
telecommunications and the Geographical Information
System (GIS). This fund will own and depreciate all
non-proprietary fund assets related to these functions,
and will charge equipmenbsoffware users for both
maintenance%perating 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%perating costs and
depreciation recovery will be charged City departments
and funds. Debt service payments on specified facility
acquisitions are included in this fund along with
revenues dedicated to these payments.
The Payroll Benefits Fund was established to track
all employee benefit programs. Benefit programs
included in this fund are the Flexible Spending
Programs for health and dependent care. Benefit
programs excluded from this fund are the Federal Way
Retirement System, Workers Compensation and
Unemployment Compensation, which are administered
through the Federal Way Retirement System Trust
Fund and the Risk Management Fund.
City of Federal Way / 84
INTERNAL SERVICE FUNDS
COMBINING BALANCE SHEET
December 31 1997
Wrth Comparative Totals for December 31 1996
Payroll
Risk
Information
Support
Fleet and
Buildings and
Benefits
Totals
Management
Systems
Services
Equipment
Furnishings
Fund
199-F
1996
ASSETS
Current Assets
Equity in pooled cash and Investments
S 877.550
S 789 486
$ 48.613
S 960.179
S 696, 764
S 19 589
S 3 392 181 S
2 583 494
Prepaid Insurance
-
-
-
-
3 565
3 565
721
Accounts Receivable
-
424
-
-
424
-
Interest Receivable
10,276
9 245
569
11 243
8,159
39 492
27 630
Due from other funds
46,390
68, 636
20 032
26.519
200
161 777
132 373
Due from other governments
6
6
TOTAL CURRENT ASSETS
934 222
867,791
69 214
997 941
705.123
23, 154
3 597 445
2 744 273
Property, plant and equipment:
Data processing/
Telecommunication equipment
2097,868
_
2,097 868
1 772.794
Transportation equipment
-
-
-
1 478,009
-
1.478.009
1 360 654
Heavy equipment
-
-
-
614,246
-
614 246
570 389
Buildings 8 furnishings
-
-
-
3,237.385
-
3.237 385
3 192.601
Other equipment
99 671
203 145
302 816
207 131
-
2097,868
99.671
2,295,400
3.237,385
-
7.730 324
7 103 569
Less accumulated depreciation
-
926,287
44.584
991 453
971,036
-
2,933,360
2 127 324
Net property plant
and equipment
1 171 581
55,087
1,303.947
2.266,349
4 796 964
4 976 245
TOTAL ASSETS
934 222
2039 372
124 301
2,301 888
2 971 472
23 154
8 394 409
7 720 518
LIABILITIES AND FUND EQUITY
Current liabilities:
Vouchers payable
12,940
12 778
9,644
4,558
5,294
-
45
214
62 367
Due to other governments
-
-
-
-
3 041
-
3
041
3 290
Due to other funds
12.613
72.058
10,958
33.204
2.866
-
131
699
40 146
Deposits payable
-
-
-
6 034
-
'6
034
6 034
Certificates of participation payable
_
235,000
-
235,000
225 000
Compensated absences payable
25.081
25
081
24 041
TOTAL CURRENT LIABILITIES
25,553
109,917
20,602
37 762
252.235
-
446
069
360 878
Long Long-term liabilities:
Certificates of participation payable
1 0600000
1 0600000
1 295 000
TOTAL LONG-TERM LIABILITIES
1 060,000
1 0600000
1 295 000
TOTAL LIABILITIES
25,553
109,917
20602
37, 762
1,312,235
1506069
1 655 878
Fund Equity
Contributed capital
995,924
59.117
1.320,949
521,848
2,897,838
3 029 266
Retained Earnings:
Unreserved
908,669
933 531
44 582
943.177
1, 137.389
23.154
3.990
502
3.035 374
Retained Earnings
908,669
933, 531
44 582
443,177
1.137,389
23. 154
3.990
502
3 035 374
TOTAL FUND EQUITY
908,669
1 929 455
103.699
2,264 126
1.659,237
23,154
6 888
340
6 064 640
TOTAL LIABILITIES AND FUND EQUITY
$ 934.222
$ 2,039 372 $
124,301
$ 2,301.888
$ 2 971 472
$ 23,154
$ 8 394
409
S 7,720 518
City of Federal Way / 85
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND EQUITY
For the Year Ended December 31 1997
With Comparative Totals for December 31 1996
Risk
Information
Support
Fleet and
Buildings and
Benefits
Totals
Management
Systems
Services
Equipment
Furnishings
Fund
1997
1996
OPERATING REVENUES
Service charges and fees
S 523.984
S 866 259
S 128 685
$ 574 640
S 381 677
S 40 894
S 2 516 139
S 1 881 742
Miscellaneous
28 239
8 597
94 286
121
131 243
120 089
TOTAL OPERATING REVENUES
552, 223
874 856
128 685
574 640
475 963
41.015
2 647 382
2 001 831
OPERATING EXPENSES
Personal services
19.002
374 459
-
8 056
-
401 517
421 022
Materials and supplies
540
47 348
4 554
121 530
10, 568
-
184 540
144 342
Services and charges
277 051
249 876
97.163
106. 168
126,193
-
856 451
592.013
Intergovernmental
-
8.270
-
371
-
-
8 641
2.598
Insurance
238,495
-
-
55 018
-
-
293 513
113.183
Clairns
35,732
-
-
38 050
73 782
119 327
Depredation
259,913
29 878
345 289
204 612
839 692
568 287
TOTAL OPERATING EXPENSES
570 820
939 866
131 595
636.432
341 373
38 050
2 658 136
1 960.772
OPERATING INCOME (LOSS)
(18.597)
(65,010)
(2.910)
(61,792)
134 590
2,965
(10,754)
41 059
NON -OPERATING REVENUES (EXPENSES)
Subsidy from interlocal grant
6
-
-
-
-
6
176
Interest income
49,710
43.492
2,910
54.017
48 962
199,091
154, 141
Interest expense
-
-
-
(77 378)
-
(77 378)
(86 622)
Gain/loss on sale of fixed assets
-
-
2,745
(1.300)
1.445
802
TOTAL NON -OPERATING
REVENUES NET OF EXPENSES
49,716
43 492
2.910
56,762
(29,716)
-
123,164
68.497
INCOME (LOSS) BEFORE
OPERATING TRANSFERS
31,119
(21.518)
-
(5030)
104874
2,965
112,410
109,556
Operating transfers in
121 781
-
121. 711
167 581
NET INCOME (LOSS)
152,900
(21,518)
-
(5,030)
104,874
2.965
234.191
277 137
Add Depreciation reducing contributed capita
-
259,913
29,878
344,534
86.612
-
7200937
411 924
Increase In Retained Earnings
152,900
238,395
29,878
339,504
191.486
2,965
955 128
689.061
RETAINED EARNINGS- January 1
755,769
695,136
14 704
603 673
945 903
20.189
3.035 374
2346.313
Residual equity transfers out
-
-
RETAINED EARNINGS, December 31
908,669
933,531
44582
943,177
1,137.389
23,154
3,990,502
3035.374
CONTRIBUTED CAPITAL, January 1
-
953,346
88,995
1,424 249
562,676
-
3029266
1 695 994
Increases to contributed capital
-
302,491
-
241.989
47.284
-
591 764
1 785 059
Less Amortization
-
(259,9q)
(29,878)
(345,289)
(88.112)
-
(723.192)
(451,787)
CONTRIBUTED CAPITAL, December 31
995,924
59.117
1.320.949
521,848
218970838
3 029.?66
FUND EQUITY AT END OF YEAR
S 908,669
$1,929 455
$ 103 699
$2,264,126
$1,659.237
$ 23,154
$ 6.888.340
S 6 064 640
01
City of Federal Way / 86
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users
Cash payments to suppliers for goods and services
Cash payments to employees
Cash payments to claimants
Cash payments to other funds for services
Other operating receipts
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:
Subsidy from Interlocal grant
Interfund transfers
NET CASH PROVIDED (USED) BY NON.
CAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Acquisition of capital assets
Cash contributions for capital acquisitions
Proceeds from sale of fixed assets
Principal paid on debt service
Interest paid on debt service
NET CASH PROVIDED (USED) FOR CAPITAL
AND RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED (USED) IN INVESTING
ACTIVITIES
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUVALENTS AT BEGIN. OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income
Adjustments to reconcile operating income to
net cash provided (used) by operating activities:
Depreciation expense
(Increase)decrease in accounts receivable
(Increase)decrease In prepaid insurance
(Increase(decreass In due from other funds
(Increase)decrease In due from other govts
Increase(decrease) in vouchers/accounts payabl
Increase(decrease) in due to other funds
Increase(decrease) In due to other governments
Increase(decrease) in accrued payroll/
compensated absences payable
TOTAL ADJUSTMENTS
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
SCHEDULE OF NONCASH INVESTING,
CAPITAL AND FINANCING ACTIVITIES:
Contributions of capital assets
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For the Year Ended December 31 1997
With Comparative Totals for December 31 1996
Payroll
Risk
Information
Support
Fleet and
Buildings and
Benefits
TOTALS
Management
Systems
Services
Equipment
Furnishings
Fund
1997
1996
5 535 215
S 900 047
S 130 195
S 551 215
S 477 226
S 38 172
S 2 632. 070
S 1 953 232
(516.695)
(324-002)
(103.593)
(233 167)
(137 253)
(38 051)
11 352.761)
1902 390)
(21.088)
(370,989)
(8-402)
-
-
(400479)
(4115271
(35 732)
-
05 732)
145 5091
12613
(21-814)
-
-
(9201)
(395701
28 239
8 597
36 836
15 341
2 552
213 653
26 602
287 832
339.973
121
870 733
569 127
6
'
-
6
176
121 781
-
-
-
-
121 781
167 581
121.787
-
-
-
-
-
121 787
1 7 T
-
(153608)
(81665)
(31685)
-
(266958)
(304.167)
-
98 380
63 736
31.685
-
193.801
215 875
-
-
3 500
200
3 700
5 753
-
-
-
(225 000)
(225.000)
(215 000)
(77378)
1773781
(16623)
(55228)
-
(14429)
(302.178)
/3118351
(384162)
47 101
40,499
3 276
49,683
47.443
-
188 002
154 818
47.101
40.499
3.276
49.683
47.443
188 002
•' 4
171 440
198.924
29.878
323.086
85 238
121
808 687
507 540
706 110
590 562
18.735
637 093
611 526
19.468
2 583 494
2 075 954
877 550
789 486
i
48 613
960,179
696 764
19.589
3392181
2 583 494
(18,597)
(65 010)
(2.910)
(61 792)
134 590
2 965
(10 754)
41 059
-
259 913
29,878
345,289
204 612
-
839 692
568 287
(424)
-
-
(424)
"
(2-844)
(2.844)
1824
11,236
(4 208)
12.801
(23.426)
(200)
-
(3.797)
122 507
(6)
_
16)
12 090
(609)
(18,506)
(1876)
(5.098)
(491)
(26.580)
1434
12.613
38.418
(11 291)
33 204
1 710
74.654
(187 507 )
'
-
(248)
-
(248)
(62)
(2,085)
3.470
-
(345)
1 040
9 495
21.149
278.663
29.5 22
349.624
205.383
(2844)
881487
528.068
$ 2.552
$ 213,653
S 26.602
S 287,832
$ 339 973
$ 121
S 870 733 S
569 127
$ 204 111
$ 178,253
$ 15 599
$ 397 963 S
1 564 236
Trust and Agency Funds Trust Funds are used to account for assets held by the government in a trustee
capacity. Agency Funds are used to account for assets held by the government as
an agent for individuals, private organizations, other governments or other funds.
Since agency funds are custodial in nature (assets equal liabilities) related results of
operations are not measured or reported. At this time the City does not have any
angency funds.
A description of the Trust Fund included in the Comprehensive Annual Financial
Report is provided below:
Expendable Trust Fund:
The Federal Way Retirement System Fund is an
Expendable Trust Fund established to account for all
transactions related to this defined contribution pension
plan. The Federal Way Employees' Retirement
System was established as a replacement for Social
Security as authorized by the Federal Social Security
Act.
City of Federal! Way / 88
EXPENDABLE TRUST FUND
FEDERAL WAY RETIREMENT SYSTEM
COMBINING BALANCE SHEET
December 31, 1997 and 1996
ASSETS
Cash - deferred compensation
Investments with plan administrator
Receivables (net):
Interest
Employee loans
TOTALASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Deferred compensation payable
TOTAL LIABILITIES
FUND BALANCE
Reserved for employee retirement
TOTAL FUND BALANCE
TOTAL LIABILITIES AND FUND BALANCE
1997 1996
$ -
$ 1,225.577
5,491,556
3,460,570
16,968
15,373
166,711
144,757
5,675,235
4,846,277
1,225,577
1,225,577
5,675,235 3,620,700
5,675,235 3,620,700
$ 5,675.235 $ 4,846,277
of Federal Way/89
EXPENDABLE TRUST FUND
FEDERAL WAY RETIREMENT SYSTEM
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
For the Years Ended December 31, 1997 and 1996
REVENUES:
Miscellaneous:
Employer contributions
Employee contributions
Investment income
Gains and losses in investments
TOTALREVENUES
EXPENDITURES;
Employee contributions refunded
Consultant services
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES
FUND BALANCE AT BEGINNING OF YEAR
FUND BALANCE AT END OF YEAR
1997
1996
$ 559,087 $ 370,900
670,538
670,398
1,031,384
125,745
240,192
100,177
2,501,201
1,267,220
408,076
141,511
38,590
32,215
446,666
173,726
2,054,535
1,093,494
3,620,700
2,527,206
$ 5,675.235 $ 3,620,700
General Fixed Assets
Account Group The General Fixed Assets Account Group accounts for all fixed assets of the City
other than those recorded in the Internal Service and Enterprise funds. General fixed
assets are reported in this account group since they do not represent financial
resources available for appropriation in the governmental funds which acquire them.
of Federal Way / 92
COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS
BYSOURCE
December 31. 1997 and 1996
GENERAL FIXED ASSETS
Land
Building
Other Improvements
Assets under capital lease
Construction in progress
TOTAL GENERAL FIXED ASSETS
INVESTMENTS IN GENERAL FIXED ASSETS FROM:
Capital Project Funds:
General revenues
General obligation bonds
Grants
General Fund:
General revenues
Donations
Capital lease
Special Revenue Funds:
General revenues
Grants
TOTAL INVESTMENT IN GENERAL FIXED ASSETS
1997 1996
$ 28.366,141
$ 26,765.375
1,724,241
1,724.241
5,597.618
2,284,993
1,450.000
1,450,000
1,774,071
3,012,288
38.912 , 071
35,236,897
1,280.080
24,273
21,512,090
20.454,479
998,398
557,004
3,065.677
2,508,924
9,624,413
9,624,413
1,450,000
1.450,000
317,875
298,604
663,538
319.200
$ 38,912,071
$ 35,236,897
Note: Excludes all public domain assets such as streets, sidewalks, gutters, bridges, drainage facilities, and lighting systems.
City of Federal Way / 93
SCHEDULE OF GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
December 31. 1997
Function/Activity
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
CULTURE AND RECREATION
TOTAL GENERAL FIXED
ASSETS BY FUNCTION
CONSTRUCTION IN PROGRESS
TOTAL GENERAL FIXED ASSETS
Total Land
Other
Buildings Improvements
$ 528,465 $ 508,492 $ - $ 19.973
JLO,YOV JVO,VJL I�,J/J
37,138,000 29,816,141 1,724,241 5.597,618
y JO,.71L,V/ 1
Note: Excludes all public domain assets such as streets, sidewalks, gutters, bridges, drainage facilities, and lighting systems.
City of Federal Way / 94
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
For the Year Ended December 31. 1997
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
CULTURE AND RECREATION
CONSTRUCTION IN PROGRESS
TOTAL GENERAL FIXED ASSETS
General General
Fixed Assets Fixed Assets
1/1/97 Additions Deductions 12/31/97
$ 528,465 $
- $ 528,465
528,465 - - 528,465
31,696,144 4,913,391 - 36,609,535
3.012,288 1,520,670 2,758,887 1,774,071
$ 35,236,897 $ 6,434,061 $ 2.758,887 $ 38.912,071
Note: Excludes all public domain assets such as streets, sidewalks, gutters, bridges, drainage facilities, and lighting systems.
Statistical Section The Statistical Section generally provides information for the "Last Ten Fiscal
Years". However, due to a February 28, 1990 incorporation date, the City of Federal
Way cannot provide statistical history beyond eight years. Future Comprehensive
Annual Financial Reports will build the required ten year history, one year at a time.
In addition, the Tables for "Special Assessment Collections" and "Schedule of
Revenue Bond Coverage" are not included since the City currently has neither special
assessments outstanding nor any revenue debt in the City's Enterprise Fund.
City of Federal Way / 96
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City of Federal Way / 112
MISCELLANEOUS STATISTICAL INFORMATION
TYPE OF GOVERNMENT
Council - City Manager
ORGANIZATION STRUCTURE
Legislative
Mayor
6 Councilmembers
CORPORATE INFORMATION
December 31, 1997
Executive Administrative
1 City Manager 6 Department Directors
1 Assistant City Manager
Table 16
The City of Federal Way is a noncharter optional code City. It was incorporated as an optional code City 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 to it the powers
of all four city classifications which exist in Washington law.
LOCATION AND AREA
Federal Way, the seventh largest city in the State of Washington, encompasses an area of 21.3 square miles.
It is located in south King County approximately 25 miles south of downtown Seattle and 8 miles north of
downtown Tacoma. The community is residential commercial, with the populace employed locally and in
neighboring cities such as SeaTac, Kent, Tacoma, Bellevue and Seattle. The City has approximately 31,269
housing units. It is 6 miles from the Port of Tacoma and 9 miles south of SeaTac International Airport. The City
is served by Interstate 5 and state highways 99 and 509. Frequent Metro public bus service is available to both
Seattle and Tacoma throughout Federal Way. Three express park -and -ride lots are provided.
POPULATION, REGISTERED VOTERS AND EMPLOYMENT WITHIN CITY LIMITS
The population of Federal Way is presently 75,960, of which 39,723 are registered voters. A total of 26,345
(est.) People are employed within the City limits.
NUMBER OF CITY EMPLOYEES
During the year 1997, the City employed 237 full-time salaries, 9 part-time hourly, and 57 temporary
employees. There were 91 commissioned police officers and no uniformed firefighters. The Teamsters Union
#763 represented 11 City employees (Public Works Maintenance and Parks Maintenance) and the Police Guild
represented 76 Police Officers during 1997.
City of Federal Way / 113
MISCELLANEOUS STATISTICAL INFORMATION
December 31, 1997
(Continued)
RECREATIONAL FACILITIES
23 Developed park sites covering 390.12 acres.
23 Undeveloped park sites covering 426.47 acres (including open space).
25 Public tennis courts, 5 which are owned by the City.
2 Public swimming p000ls, both which are owned by King County.
2 Trails covering 2.5 miles.
OTHER CITY -OWNED FACILITIES
1 City Hall
1 Park maintenance facility.
i Dumas Bay Centre.
1 Klahanee Community/Senior Center.
PUBLIC EDUCATION
1994
1995
1996
1997
23 Elementary schools with enrollment of..................11,328
11,524
11,689
11,930
6 Jr. High schools with enrollment of ........................
4,642
4,701
4,838
4,979
3 High schools with enrollment of .............................
3,739
3,730
3,904
4,103
2 Alternative schools with enrollment of ...................
334
376
302
466
(Includes Running Start & Marketing Academy)
Total Enrollment... ........... ............... __ ................
20,043
20,331
20,733
21,478
1,236 Certified full-time equivalency teachers and administrative staff.
MILES OF STREETS, ETC.
Streets (Center Line Miles)....................................................209.82 miles
SIGNALS/STREET LIGHTS
City owned traffic signals maintained by:
Department of Transportation.......................................................................... 0
City owned traffic signals maintained by King County .................................... 47
Street lights owned by City of Federal Way .................................................... 262
Street lights owned by Puget Power............................................................... 589
City of Federal Way / 114
MISCELLANEOUS STATISTICAL INFORMATION
December 31, 1997
(Continued)
LOCAL TAXES ON BUSINESS
Franchise Tax - Cable TV .......................................... .....
5.00%
Gambling Taxes:
Bingo/Raffles.........................................................
10%
Amusement Games ..............................................
2%
Punchboard/Pull Tabs ............................................
5%
Cardrooms.............................................................
11 %
Local Sales Tax (Collected by the State) ...........................
0.85%
POLICE INFORMATION
Offenses:
Citations:
Jail Facility:
Forcible Rape (including attempts).........
Robbery....................................................
Criminal Homicide ....................................
Aggravated Assault
................................................
Vehicle Theft..........................................................
Burglary (commercial & residential)......................
Larceny...................................................................
Arson......................................................................
1994 1995 1996 1997
90
71
73
37
141
173
188
154
3
3
3
2
162
167
171
121
722
843
807
746
857
881
965
643
3,793
4,300
4,086
3,901
32
38
35
24
Traffic........................................................................12,241 14,258 8,660 11,196
King County Jail used at $67.93 per day per person, plus $108.91 booking fee per person.
FIRE AND EMERGENCY MEDICAL REPONSE INFORMATION
Fire and Emergency Medical Response information reflects the greater Federal Way area, which is served by
Fire District #39.
1994
1995
1996
1997
Fire and Other Than Emergency Medical Reponses........ 1,763
1,902
2,018
1,985
Emergency Medical............................................................. 5,088
5,653
6,007
5,853
City of Federal Way / 115
MISCELLANEOUS STATISTICAL INFORMATION
December 31, 1997
(Continued)
BUILDING RELATED PERMITS AND VALUES
1994
1995
1996
1997
Building Permits....................................................................
579
560
422
576
Estimated Value (In Millions $) .............................................
$69.3
$60.7
$51.3
$53.3
Other Building Related Permits ..... —......................................
627
625
656
864
Estimated Value (In Millions $)...............:.,.. ...: ............... .......
$ 2.7
$ 2.8
$37.6
$18.5
TAXABLE SALES (In Millions $)
1994 1995 1996 1997
Retail Sales........................................................................... $905.6 $942.4 $956.8 $978.9
Real Estate Sales................................................................ $243.0 $219.0 $305.0 $375.4