2002 Annual Comprehensive Financial Report (02-002)City of Federal Way, Washington
COMPREHENSIVE
ANNUAL FINANCIAL
REPORT
Year Ended December 31, 2002
Prepared by
Management Services Department
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2002
Table of Contents
INTRODUCTORY SECTION
Statement
Reference Page
Letterof Transmittal................................................................................................................................... m
CityOfficials and Administrative Officers........................................................ ..................................... 1
City Functional Organization Chart ............................................................................................................ 3
GFOA Certificate of Achievement..............................................................................................................
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 -
AllGovernmental Fund Types................................................................................................................. 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 -
AllProprietary Fund Types...................................................................................................................... 4 14
Combined Statement of Cash Flows - All Proprietary Fund Types............................................................ 5 15
Notesto the Financial Statements............................................................................................................... 16
Combinine Individual Fund and Account Group
Statements and Schedules
GeneralFund............................................................................................................................................. 47
ComparativeBalance Sheet.................................................................................................................... 48
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balance .............................. 49
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budgetand Actual................................................................................................................................ 50
Schedule of Expenditures Compared to Budget..................................................................................... 51
SpecialRevenue Funds............................................................................................................................. 55
CombiningBalance Sheet....................................................................................................................... 56
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ............................... 58
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budgetand Actual................................................................................................................................ 60
DebtService Fund..................................................................................................................................... 65
ComparativeBalance Sheet.................................................................................................................... 66
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balance .............................. 67
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budgetand Actual.............................................................................................................................. 68
CapitalProject Funds............................................................................................................................... 69
CombiningBalance Sheet....................................................................................................................... 70
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance.. ......... 44 ....... 4 ............ 71
Table of Contents (Cont'd)
Combining, Individual Fund and Account Group
Statements and Schedules (continued)
Table Page
EnterpriseFund........................................................................................................................................ 73
CombiningBalance Sheet....................................................................................................................... 74
Combining Statement of Revenues, Expenses and Changes in Fund Equity .......................................... 75
Combining Statement of Cash Flows...................................................................................................... 76
InternalService Funds.............................................................................................................................. 77
CombiningBalance Sheet...................................................................................................................... 78
Combining Statement of Revenues, Expenses, and Changes in Fund Equity ......................................... 79
Combining Statement of Cash Flows...................................................................................................... 80
General Fixed Assets Account Group...................................................................................................... 81
Schedule of General Fixed Assets - By Source....................................................................................... 82
Schedule of General Fixed Assets - By Function and Activity............................................................... 83
Schedule of Changes in General Fixed Assets - By Function and Activity.-.. ...... _ _............................. 84
STATISTICAL SECTION
General Governmental Expenditures and Other Uses by Function -
General, Special Revenue and Debt Service Funds................................................................................
1
86
Schedule of Major Revenues and Other Financing Sources by Source -
General, Special Revenue and Debt Service Funds................................................................................
2
87
Tax Revenue by Source - General, Special Revenue and Debt Service Funds ...........................................
3
88
Property Tax Levies and Collections..........................................................................................................
4
89
Assessed and Estimated Actual Value of Taxable Property ........................................................................
5
90
Property Tax Levies - Direct and Overlapping Governments.....................................................................
6
91
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita ..........................
7
92
Computation of Limitation of Indebtedness...............................................................................................
8
93
Computation of Direct and Overlapping Debt........ ............... ............................... ....................................
9
94
Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total
General Governmental Expenditures......................................................................................................
10
95
DemographicStatistics...............................................................................................................................
11
96
Property Value, Construction, and Bank Deposits.....................................................................................
12
97
PrincipalTaxpayers....................................................................................................................................
13
98
Schedule of Insurance in Force...................................................................................................................
14
99
Salaries and Surety Bonds of Principal Officials........................................................................................
15
101
Miscellaneous Statistical Data....................................................................................................................
16
102
ii
o,
Federal Way
June 20, 2003
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,
2002 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 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, including the Valley Communications Center
joint venture in which the City became a member city effective January 1, 2000.
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 from of government. The City
Council consists of seven council members, all of whom are elected at large by citizens of Federal Way to
serve four-year terms. The City Manager, 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.
City services provided include: police protection, construction and maintenance of streets, building
inspection, municipal court services, jail services, planning and zoning, park services, surface water
management and general administration, including finance. Services for a land use hearing examiner are
contracted. The City continues to have seven major departments consisting of City Manager; Law;
iii
Management Services; Parks, Recreation, and Cultural Services; 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.
ECONOMIC TRENDS
The City of Federal Way incorporated on February 28, 1990. It is the eighth largest• city in Washington
State with a population of 83,850 as of April 1, 2002. Federal Way is located on a plateau adjacent to
Puget Sound in King County, eight miles north of downtown Tacoma and 25 miles south of downtown
Seattle. The City occupies approximately 21.5 square miles, and is served by Interstate 5 and state
highways 99 and 509.
CITY OF FEDERAL WAY
Population Trends - 1970 to 2002
90 000 ¢3
80,000-
5,
0
6
a
4
3
i
t
1970 1980 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
7:_�;
3 ZI
57
The population in the area known as the City of Federal Way has stabilized over the last few years, with the
population as of the 2000 census at 83,259. The 2002 population figure of 83,850, provided by the State
Office of Financial Management, is a decrease of .048% from the 2001 figure of 83,890.
In 2002 there were 32,916 housing units in Federal Way. Of these units, 55% were single family, 41%
multi -family units and 4% mobile homes and trailers. These statistics for housing units show an increase of
approximately .2% over 2001.
The community is residential and commercial, with the populace employed locally and in the neighboring
cities such as SeaTac, Kent, Tacoma, Bellevue, and Seattle. Employment in Federal Way is highly
concentrated in retail and services sectors which respond primarily to the needs of the local market area
population. The employment figure for 2002 is estimated at 29,135. Major employers are the SeaTac
Mall, Weyerhaeuser, Federal Way School District, St. Francis Community Hospital, World Vision,
Enchanted Parks, and U.S. Postal Bulk Mail Center.
1v
CITY OF FEDERAL WAY
Housing Units -1970 to 2002
40,000
35,000 3 -176
2
30,000
f
25 000 -
i
20,000 -
15,000AF77.7713
•I
10,000 •
5,000
0
1970 1980 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
The City's 2002 taxable retail sales were $1,263 million, a 3.5% increase over 2001 sales of $1,220
million. The retail sector of the local economy is anchored by the SeaTac regional mall, Pavilion Centre,
Costco, Fred Meyer, Lowe's Home Improvement Center, and many other small businesses adjacent to the
City center. According to a listing of businesses registered with the City of Federal Way and sorted by the
Standard Industrial Classification, the business economy appears to be configured as follows: retail trade
61.9%; services 12.7%; contracting 11.3%; wholesale trade 5.1%; transportation and public utilities 3.6%;
manufacturing 1.7%; government 1.6%; finance, insurance and real estate 1.1%, and other 1%.
In 2002, new improvements to real estate totaled $97.3 million or approximately 1.6% of the City's
assessed valuation. The total assessed value of taxable property in Federal Way was $5.9 billion which is
approximately 5% higher than the 2001 assessed valuation of $5.6 billion. Real Estate sales increased 26
percent to approximately $503.5 million in 2002 as compared to $400 million in 2001. A total of 712
building permits and 2,024 other building related permits were issued in 2002. Estimated valuation was
$97.3 million and $2.5 million, respectively. Significant building permits include: Enchanted Village, a Six
Flags amusement and water park — ten new rides, Pavilion Center II Buildings B and E — two new retail
buildings, Autozone — new retail, St. Frances Ambulatory Services — tenant improvement and Washington
Education Association — tenant improvement.
The economic downturn that began in 2001 continued throughout 2002. Washington state was hit hard by
the national recession, as well as the impact on aerospace employment that resulted from financially weak
air carriers and the decline in air travel after the events of September 11. The Puget Sound economy has
been hit especially hard in the recession with the local impact of Boeing and Weyerhaeuser layoffs. At the
national level, the unemployment rate rose by 1.1 percentage points to 5.8 percent in 2002 while in
Washington State the unemployment rate rose to 7.3%, the third highest in the nation.
Inflation in the Seattle metropolitan area slowed in fiscal 2002 to 2.7 percent from 4.0 percent in 2001. The
comparable U.S. inflation rate declined from 3.4 percent to 1.8 percent during the same period. Seattle
metropolitan area inflation is expected to drop below U.S. inflation rate during the next three years due to
the much weaker economy. Forecast inflation rates for the Seattle area are 2.3 percent, 2.2 percent, and 2.6
percent compared to 2.5 percent, 2.8 percent, and 3.0 percent for the U.S. city average.
After years of prosperity, wage and salary employment declined for the first time in 20 years. Nominal
personal income growth slowed to 2.5 percent in fiscal 2002 from 4.1 percent in 2001 and 8.2 percent in
V
2000. Declining employment was largely responsible for the slowdown. Outside of the software sector,
nominal personal income was cut almost in half, from 4.7 percent in 2001 to 2.8 percent in 2002.
Washington real personal income growth continued to fall in fiscal 2002 to 1.2 percent, down from 1.6
percent in fiscal 2001 and 5.1 percent in 2000. Real personal income growth is expected to improve to 1.4
percent in 2003 and 1.8 percent in 2004.
The recovery in Washington is expected to be unusually slow. While it is forecast that there will be a weak
national recovery, Boeing is expected to continue reducing is workforce through 2003. Employment
growth in the Puget Sound region experienced a .5 percent decline in 2002 and is forecast to grow only 0.7
percent in 2003.
SIGNIFICANT EVENTS AND ACCOMPLISHMENTS
Since the City officially incorporated on February 28, 1990, 2002 was the thirteenth year of service to the
community. In 2002 City Council and staff laid the groundwork for the future of the City of Federal Way
that includes: less traffic congestion, new and improved parks, new municipal and community facilities,
and a new way of doing business and providing improved customer service.
Several large traffic related capital projects were completed in 2002 including: 23`d Avenue South
improvements which improved traffic flow and pedestrian movement, and enhanced another downtown
street's aesthetic appearance for $9.1 million. Work began on the Pacific Highway South Phase One project
that will add HOV lanes and make similar aesthetic improvements. Another milestone was reached in 2002
with the completion of the very last 1995 street bond project at 8d` Ave. SW and Dash Point Road. In all,
that voter -approved, $12 million effort produced ten road improvements, intersection improvements, and
new traffic signals throughout the city.
Parks projects totaling $1.5 million were completed in 2002. These include soccer field lighting at Lakota
Park, a new roof at Dumas Bay Centre, restoring the land above the bank at Dumas Bay Centre, acquiring
the 20-acre Armstrong property for a new neighborhood park in the southern part of our city, bringing a
new playground to Heritage Woods Park, installing a playground at Celebration Park, adding at Sacajawea
Park new field turf in 2001 and lighting in 2002, and completing the first phase of Historic Cabins Park
with the assistance of Historical Society volunteers.
Through the municipal facilities process and the 2003-04 Budget Process the City moved closer to the goal
of providing new municipal and community facilities. The citizens Municipal Facility Advisory
Committee produced a detailed report on recommended sites, possible configurations, and a preferred
process for developing a new municipal facility. The City Council also addressed the issue of King County
closing the Kenneth Jones Pool. After analyzing the option of operating the aging Jones pool in the long
term, the City Council determined that it made more sense to assume the pool on an interim basis, and then
add a new pool element to a community/senior center already on the community's list of needs. At the
time the 2003-04 Budget was adopted, the utility tax was increased 1 % to provide the funding for the
community/senior/swimming center. This additional 1 % of utility tax will not only pay to build the new
community/senior center, but will also operate the Jones pool for a few years and the
community/senior/swimming center on a continuing basis.
In 2002, the City conducted a permit improvement process which yielded a detailed, quarter -by -quarter
work plan that will improve the way permits are processed in Federal Way. Through an extensive survey of
over 3,000 customers, it was discovered that the process was not broken, but there were steps which could
be taken to make the process better. A stakeholders group of large and small developers and others met
with the city over seven months and developed 38 initiatives to improve the permitting system. These
improvements include reduced review time, customer service training, and eliminating surprises. Some of
the changes have already been implemented in 2002 with positive results.
City permit numbers were up in 2002 despite the sluggish national and state economies. While land use
permits were unchanged from 2001 to 2002, building permits were up 27% during the same time period,
v1
primarily due to high activity in new single-family homes. With a couple of major subdivisions soon to
enter the process, the City can expect a similar trend over the next few years. These statistics demonstrate
that Federal Way continues to be a great place to live and do business.
As the Police Department turned six years old in 2002, it became only the eighth police department in
Washington State to achieve international accreditation through Commission on Accreditation for Law
Enforcement Agencies, Inc. (CALEA). This accreditation assures the community that Federal Way Public
Safety has met the highest standards of excellence in the nation and in the world. Very few departments
attain accreditation and certainly not in six years of existence. This recognition is a huge credit to the men
and women of the Police Department, led by Chief Anne Kirkpatrick.
Last year, the city continued its successful efforts to control jail costs by making use of lower cost jails in
Fife and Eastern Washington and by renegotiating the City's jail contract with King County. When the City
began cost control efforts in 1999, the City paid more than $1.6 million per year to house its inmates. That
number had dropped by $600,000 as of last year. David Moseley, City Manager, won the Washington City
Management Association's Award for Skill in Intergovernmental Cooperation for chairing the team of city
managers, city attorneys, and others who negotiated the new jail services contract between King County
and 37 cities, including Seattle, Bellevue, and Federal Way.
Activities for Federal Way's growing senior population were enhanced in 2002. Day trips for seniors
doubled and increasing numbers of seniors are taking part in our day trips, classes, lunch programs, and
cultural activities.
The adoption of the 2003-2004 Budget was another significant accomplishment in 2002. As in past years,
Federal Way continues to have lower revenues and expenditures per person than nearly any other city in
King County. The City of Federal Way is 33id of 36 cities when it comes to revenue per person, and 32" d of
36 when it comes to expenditures. The City of Federal Way is last among large cities. Part of this is
attributable to the fiscal discipline of this Council and Councils before it.
The 2003-04 adopted a budget maintains existing services within existing revenues. This is a significant
accomplishment given the national economy and recent tax -cutting ballot measures. For example, the City
faced a $468,000 shortfall at the beginning of 2002 as a result of Initiative 695. Initiative 747 further erodes
funding by limiting the growth in property tax collections — the City's second largest revenue source, right
behind the sales tax — to 1 % per year. This is nearly two percentage points below the average rate of
inflation. It means that, over time, the gap between revenues and expenditures will widen and force ever
more difficult decisions about city services. The City was able to maintain existing services within existing
revenues by carefully scrutinizing expenses and shifting resources to services with greater demand. Further
details regarding the 2003-04 Budget can be found in the following section Outlook for the Future under
the heading Short Term.
OUTLOOK FOR THE FUTURE
Long Term
Housing and Population
• Preserve the predominantly single-family character and appearance of the community by
establishing population densities consistent with neighborhood and city-wide 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.
Vll
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 convenient
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
vibrant focal point and identity in the community.
• Build a transportation system that adequately serves commercial areas, encourages use of
alternative modes of transportation for work trips, and allows commercial and industrial
growth without creating additional congestion.
• Establish design standards for commercial areas that are closely related to their function 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. Council and staff worked together and identified the
following broad goals for the 2003-2004 biennial budget:
I Be Responsible and Responsive to the Voters' Message
• Operate the City in an entrepreneurial and fiscally responsible manner with focus on both
revenue generation as well as expenditure control;
• Make responsible program choices in balancing the budget such that the City does not
penalize the voters.
II Enhance Public Safety in the Community
• Recognize that public safety continues to be the top priority of the Council;
viii
• Look at an integrated public safety strategy that involves all facets of City operations
such as licensing, code enforcement, police, prosecution, and court services;
• Analyze the police/court facility options and prepare an implementation plan.
III Invest in our Community's Future
• Aggressively implement the City Center vision;
• Identify sustainable capital funding sources;
• Recognize the importance of programs for families and youth.
IV Improve Communication of and Accessibility to Government Services
• Make government service more accessible and user-friendly through the application of e-
Commerce and e-Government.
Initiatives in the 2003-2004 biennial budget include:
/ Increased public safety presence in the community and high schools with the addition of
six new officers. Three police administrative positions were converted into four patrol
officer positions and four police positions were added; two School Resource Officers and
two patrol officers. This places an additional police officer on each squad, a new officer
in the new Todd Beamer High School, and a new officer to rove between Federal Way's
five high schools. Public safety continues to comprise the largest category in our budget,
at 57 percent.
► Continued implementation of permit process improvements with the help of two new
positions in Community Development.
► Completion of Federal Way's Planned Annexation Area (PAA) study to determine what
the area's zoning should be, if it were to annex to the city, and how it would impact the
City's budget.
► Continue the ongoing efforts to create a pedestrian -friendly, multi -use downtown with
work on the Master Environmental Review of the City center.
/ Focus on customer service. An employee team that cuts across all departments and all
levels will work to augment the city's customer service culture and come up with specific
customer service initiatives in 2003.
► Building the Bridge Project: Several city departments have joined together with
representatives from other governments, businesses, human service agencies, the faith
community, and others to help residents of one of Federal Way's neediest neighborhoods
address their human services, housing, and employment. The Building the Bridge effort
is a strong example of the collaboration of agencies and volunteers that can serve to
erect far-reaching change in our city.
/ Investment in the City's infrastructure through the adoption of the Capital Improvement
Plan. City Council adopted and funded, a six -year capital improvement plan which:
Invests $78 million in transportation improvements which will continue the City's progress in
reducing congestion.
Includes $15 million investments in parks improvements.
Sets aside $24 million dollars for the new municipal facility, and the early retirement of the
Celebration Park acquisition bonds, freeing up much -needed revenue for other capital
projects.
Provides funding for the design, construction and operation of the new community/senior
center/swimming pool with an increase in the utility tax of 1%.
ix
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, 2002 indicated that there were no material weaknesses in the internal control
structure.
Budeetary Controls
The City maintains budgetary controls in accordance with the Revised Code of Washington (RCW
35A.33). The objectives of these budgetary controls are to ensure compliance with legal provisions
embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund,
some Special Revenue Funds, and Debt Service Fund are included in the annual appropriated budget. The
level of budgetary control at which expenditures cannot legally exceed the appropriated amount is
established at the individual fund level. The project -length based Special Revenue Funds, and the Capital
Projects, Enterprise and Internal Service funds are management budgets only and therefore these budgets
are not represented in the CAFR. The City also maintains an encumbrance accounting system as one
technique of accomplishing budgetary control. All appropriations lapse at year-end.
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 Accountine
All governmental funds are accounted for using the modified accrual basis of accounting. Under the
modified accrual basis, revenues are recorded when received in cash, except for revenues susceptible to
accrual. Revenues considered susceptible to accrual are those that are measurable and available to finance
the government operation during the current period. Expenditures, other than accrued interest on general
long-term debt, are recorded at the time liabilities are incurred.
All proprietary funds use the accrual basis of accounting. Under the accrual basis, revenues are recorded
when they are earned and expenses are recorded as soon as they result in liabilities for benefits received.
x
GENERAL GOVERNMENT FUNCTIONS
Overview
The general governmental analysis will include the General Fund, all Special Revenue Funds and Debt
Service Fund.
C
0
Q
50.0 -
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
50
2002 vs 2001 FINANCIAL PERFORMANCE
General, Special Revenue and Debt Service Funds
46.4 L45.1
43,5
44.6
206
22.5
BeginningFund
Balance Revenues
300
250
20.0
15.0
100
50
22.0
24.3
Expenditures
Ending Fund
Balance
2002 vs 2001 FINANCIAL PERFORMANCE
General Fund
i
F-2001
2002
2001
Beginning
02
Fund Balance Revenues 20
Expenditures
Ending Fund
Balance
X1
Overall financial performance in the General Fund, Special Revenue Funds and the Debt Service Fund was
positive in 2002. Revenues and other sources of funds totaled $46.4 million compared to $45.5 million for
2001. This results in an increase of $.9 million or 2%. Expenditures and other uses of funds totaled $44.6
million compared to $43 million for 2001, an increase of $1.6 million or 3.7%. Aggregate fund balances
for these funds ended the year totaling $24.3 million, which is approximately a $2.3 million increase.
However, excluding the interfund transfers, the revenues increased by $1.1 million or 2.8% and
expenditures increased by $2.1 million or 5.9%. The revenue increase is largely attributable to the increase
in property tax, real estate excise tax and sales tax. The increase in expenditures is largely due to the
increase in Public Safety with the addition of 10 officers and step and contract increases for salaries for all
staff.
The General Fund ended 2002 with a $9,465,350 fund balance. This was a $1,233,179 or 15% increase
over the fund balance at the end of 2001. General Fund revenues increased $692,413, or approximately
2.5% over 2001. The expenditures increased by $1,374,537. This increase is approximately 5.5% and as
stated previously is primarily a result of increased costs in Public Safety with the addition of 10 officers
and increases in Municipal Court, and Criminal & Civil Legal Services.
Revenue Summary
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 2002 calendar year.
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
RCVV.nnC5 and Other Financing Sources
Revenues
2002
2001
Change
Amount Percent
Taxes
$ 30,694,856
$ 29,721,513
$ 973,343
432,926
3.3%•
31.0%•
Licenses/Permits
1,829,620
1,396,694
Intergovernmental
4,165,673
4,365,098
(199,425)
-4.6%•
Services/Charges
2,864,937
2,525 488
339,449
13.4°/.
Fines/Forfeitures
785,997
830,668
(44,671)
-5.4°/6
Interest Earnings
498,543
803,300
304 757
-37.90M,
Miscellaneous
491,167
5.063,563
487,692
5,329,334
3,475
(265,771)
0.70K
-5.001
_
.Other Financing Sources
Total Revenues
$ 46.394.356
$ 45,460,191
S 934,569 1
2.10
Fines/Forfeitur
1.7%
Services/Charges
6.2%
IntergovernmentE
9.0%
Licenses/Permit;
3.9%
2002 REVENUES AND OTHER SOURCES
General, Special Revenue and Debt Service Funds
Interest Earnings Miscellaneous
Taxes
66.1 %
Xll
The most significant dollar increase was in taxes. The increase of $973,343 is due primarily to the
additional real estate excise taxes ($519,936), sales tax ($434,029), and property tax ($428,858),
accompanied by decreases in gambling tax (-$296,300). All utility taxes are receipted into a special
revenue fund, and are transferred to the debt service fund as needed. Intergovernmental revenue is down
$199,425 compared to 2001 due to the elimination of the Local Government Financial Assistance provided
in 2001. The Local Government Financial Assistance was distributed to local governments to help offset
the impact of funds lost from the elimination of the motor vehicle excise tax (MVET) with the passing of
initiative 695 approved by voters in November 1999. Interest earnings decreased $304,757 from 2001, a
result of the continued weak economy.
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, 2002.
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
Ex enditures by Function
Change
Amount
Percent
Function
2002
2001
General Government
$
5,049,813
$ 4,724,252
$
325,561
6.90/o
Security of Persons & Property
14,991,404
14,264,309
727,095
5.1%,
!Physical Environment
329,064
378,066
(49,002)
-13.0%
Transportation
5,203,702
4,554,183
649,519
14.3%
! !Economic Environment
2,779,401
2,679,174
100,227
3.70/c
Health
627,232
535,589
91,643
17.10/c
3,141,129
2,951,607
189,522
6.4%r
I�Culture&Recreation
Capital Outlay
212,592
176,551
36,041
20.40/o
Debt Service -Principal
2,834,084
2,700,478
133,606
4.90/cp
Debt Service -Interest
1,651,197
1,797,614
(146,417)
-8.1%.
Other Financing Uses
7,456,563
7,928,949
(472,386)
-6.00/c•
Residual FAuitv Transfers Out
322,820
216.209
106.611
49.30/(•
Total Expenditures
S
44.599,001
1 S 42,906.981
S
1.692.020
3.90/
2002 EXPENDITURES BY FUNCTION
General,
Special Revenue and Debt Service Funds
Debt Service - Interest
General Government
Other Financing Uses
°
3.7 /0
17.5%
11.3%
J
Debt Service -
Principal
—
6.4%
Public Safety
33.6%
Capital Outlay
~�
0.5%
Culture & Recreation
-----.Physical Environment
7.0%
0.7%
Economic
Health
Environment
Transportation
1.4%
6.2%
11.7%
Xlll
The reductions in Physical Environment expenditures are due to the timing of Grant Funded projects in the
Solid Waste and Recycling Fund. Transportation expenditure increases were due to street projects and
overlay program originally budgeted for 2001 that were carried forward and completed in 2002. Health
represents Human Services funding which experienced increases in payments to service organizations
related to additional funding. Capital Outlay increases were also related to increases in Community
Development Block Grant expenditures. Residual Equity transfers out increased due to the additional fleet
and equipment purchased for the Bomb Disposal, K9 units and new officers in Public Safety.
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
Expenditures by Object
Object
2002
2001
Change
Amount Percent
Personal Services
$ 19 419,250
$ 18,073,717
$ 1,345,533
7.4°/
sup2lies
679,737
753,945
(74,208),
-9.80%
Other Services and Charges
4,414,067
3,892,515
521,552
13.40%
Intergovernmental
10 553,654
11,013,925
(460 271
-4.2%i
Capital Outla
1,775,102
1,355,040
420,062
31.0%o
Debt Service -Principal
2,834,084
2,700,478
133,606
4.90/ck
Debt Service -Interest
1,651,197
1,797,614
(146,417)
-8.10%
[nterfund Services
3,271,910
3,319.747
(47,937
-1.40(
Total Expenditures
$ 44,599.001
$ 42,906.981
$ 1,692,020 3.90/
2002 EXPENDITURES BY OBJECT
General, Special Revenue and Debt Service Funds
Debt Service-Inte—t
4.2%
Debt Service-Principa
6.3%
Capital Outlay
3.1%
Intergovernmer
25.7%
Fund Balance
Interfund Services
7.7%
Other Services & 1.8%
Charges
9.1%
Personal Services
�— 42.1 %
Overall fund balances in the General, Special Revenue, and Debt Service Funds totaled $24,250,174 in
2002 compared to $22,487,115 in 2001, an increase of $1,763,059 or 7.8%. This increase is in part
attributable to an increase in utility taxes, sales tax, real estate excise tax and property taxes collected.
X1V
GENERAL. SPECIAL. REVENUE, AND DEBT SERVICE FUNDS
Artul'risafFund Batunce
Change
Amount Percent
Fund Balance
2002
1001
General
$ 9,465,350
$ 8,264,467
$ 1,200,893 14.5%
Special Revenue
Street
100,000
275,926
(175,926) -63.8%
Arterial Street
695,572
719,952
(24,380) -3.4%
Utility Tax
7,872,948
6,170,755
1,702,193 27.6°%
Solid Waste/Recycling
162,896
199,344
(36,448) -18.3%
Special Contracts/Studies
106,511
123,881
(17,370) 14.0%
Hotel/Motel Lodging Tax
182,119
150,549
31,570 21.0°%
2%for the Arts
28,114
28,114
- 0.0%
Community Development Block Grant
5,943
4,140
1,803 43.6
Paths and Trails Reserve
51,592
41,863
9,729 23.2%
Subtotal Special Revenue
i 9.205,695
7,714,524
1491,171 19.3
Debt Service
5,579.129
6,508,124
(928.995) -14.3
Total Fund Balance
I S 24.250.174
S 22 487.115
S 1.763,059 7.8%
2002 ENDING FUND BALANCE
General, Special Revenue and Debt Service Funds
General Fund
Debt Service Fund 39.0%
23.0%
Special Revenue
Funds
38.0%
PROPRIETARY OPERATIONS
In 2002, the City utilized five internal service funds to account for activities related to risk management,
management information systems, mail and duplication, fleet and equipment and buildings and furnishings.
Operation and depreciation related replacement charges to users are based on office staff counts, equipment
used, and specific depreciation schedules. Residual equity transfers are recorded from other City funds to
finance first time asset acquisition.
The City 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. In 1998, the Knutzen Family Theatre was added to the Dumas Bay Centre Fund. The
theatre's maintenance and operation expenses are partially funded with utility tax. This subsidy is recorded
as an operating transfer.
xv
During 2000, the City established the Surface Water Management Fund as an enterprise fund and
reclassified it from a special revenue fund. The Surface Water Management Fund is used to account for the
Storm Drainage operations and capital construction, maintenance and replacement of infrastructure.
DEBT ADMINISTRATION
The City's outstanding debt is approximately .5% of its taxable assessed valuation. As of December 31,
ZUUY, the City's remaining debt capacities are summarized as follows:
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2002
GENERAL DEBT CAPACITY
EXCESSLEVY
EXCESS LEVY
TOTAL
(Limited) (Unlimited)
OPEN SPACE
UTILITY
DEBT
DESCRIPTION
COUNCMIAANIC EXCESS LEVY
AND PARK
PURPOSES
CAPACITY
Statutory debt limit:
(2002 AV=$5,912,362,755) (A)
1.50%AV @ 100%
$ 88,685,441 $ (88,685,441)
2.50% AV @ 100%
147,809,069
147,809,069
147,809,069
443,427,207
Acid:
Cash on hand for
debt redemption (B)
13,452,077 -
-
13,452,077
Less,
Bonds and COPS outstanding
{2-1,741,936)
f-2 .741 06)
REMAINING DEBT CAPACITY
$ 74,395,582 $ 59,123,628
S 147,809,069
$ 147,809,069
$ 429,137,348
TOTAL REMAINING
"GENERAL" CAPACITY (C)
$133,519,210
The City s final total taxable assessed valuation (AV) for 2001 used to determine the 2002 property tax levy.
Reflects balance available in Debt Service Fund, Utility Tax Fund and Building & Furnishings Fund as of December 31, 2002.
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 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, 2002 consisted of investments in U.S.
Government Agency securities and investments in the Washington State Investment Pool, with maturities
ranging from one day to three and 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 counter parry's trust department or agent in the City's name; and
category 3 includes uninsured and unregistered investments held in the counter parry'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
Xvl
length of investment in the pool based on individual cash flow needs. Interest is earned on the pool's actual
experience for the month, less an administrative fee equivalent to 3 '/z basis points (.035%). At December
31, 2002, the City had $45,401,182 invested in the State Investment Pool. In 2002, the average monthly
earnings rate for the entire portfolio was approximately 2.06% as compared to the average monthly
earnings rate for the State Investment Pool of 1.79%.
RISK MANAGEMENT
The City maintains insurance against most normal hazards except for unemployment insurance, for which it
has elected to become fully self -insured. Related premiums received by the Risk Management Fund are
used to reimburse the State Employment Security Department for unemployment benefits paid to eligible
individuals, and to establish reserves for the payment of estimated future unemployment claims liability.
Through its Risk Management Fund, the City is also recovering insurance premium costs for general
liability coverage and building reserves for a future general liability self-insurance program. During 2002,
the City purchased commercial insurance policies from commercial insurers. It is the opinion of the City's
legal staff that at year-end there were no outstanding claims that met expenditure accrual or loss disclosure
criteria.
The City's industrial insurance is provided by Washington State and is administered by the Department of
Labor and Industries. The following are benefits provided by industrial insurance: medical services,
damaged clothing, travel expenses, time -loss payments, vocational rehabilitation, partial disability awards,
pension awards, and survivor benefits.
INDEPENDENT AUDIT
State law requires an annual audit of all City books of account, financial records, and transactions by the
State Auditor, an independently elected state official. In addition to meeting the requirements set forth
under state law, the audit was also designed to meet the requirements of the federal Single Audit Act of
1984 and related OMB Circular A-133. The 2002 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 2002. 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, 2001. 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 twelve years (fiscal years ended 1990 - 2001). 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, 2001 and 2002. 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.
Xvil
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 Dong Chou, Jeri-
lynn Clark, Khanh Hang, Tho Kraus, Toni Pettie, and Dwight Shiotani.
In addition, staff in all City departments should be recognized for responding so positively to the requests
for detailed information which accompany each annual audit. The role of the State Auditor's Office should
also be acknowledged as a significant contribution to a fine product.
Finally, we wish to express our appreciation to the Mayor and City Council for their ongoing support and
for providing the firm foundation for the pursuit of excellence in all realms of professional endeavors.
Respectfully subnajued,
4wer�,Wang If Michael L. Olson
Management SqYvices Director Management Services Deputy Director
xviii
City of Federal Way / 1
CITY OFFICIALS
JEANNE BURBIDGE DEAN MCCOLGAN
Mayor Deputy Mayor
MARY GATES MICHAEL HELLICKSON
Councilmember Councihmember
LINDA KOCHMAR
Councilmember
DAVID MOSELEY
City Manager
OTHER ADMINISTRATIVE OFFICERS
ERIC FAISON
Councilmember
MICHAEL PARK
Councilmember
City Attorney Patricia Richardson
CityClerk.......................................................................................................................................................... Chris Green
Community Development Director.............................................................................................................. Kathy McClung
ManagementServices Director........................................................................................................................... Iwen Wang
Parks, Recreation and Cultural Services Director..................................................................................... Jennifer Schroder
PublicSafety Director...............................................................................................................................Anne Kirkpatrick
PublicWorks Director........................................................................................................................................... Cary Roe
City of Federal Way / 2
Mimicipal Coro
David Tracy
•Adjudicates Cases
*Probation Services
•Indigent Defense Screening
Staff:
Community
17c�el�l�ntctrt .
KathyMcClung
•Current Planning
*Land Use
*Building Permits/
Inspections
*Code Compliance
29.5
i People of Federal Way
I Manor ai)d City Council I
Jeanne Burbidge, Mayor
Dean McColgan, Deputy Mayor
Erick Faison, Mary Gates
Michael Hellickson
Linda Kochmar, Michael Park
City Mitna er
David Moseley
13.55 Staff:
Parks, Recreation
etL Cultbral Services
Jennifer Schroder..
*Recreation Programs
•Ground Maintenance
*Park Operations
•Community/Sr Center
•Facility Maintenance
•Dumas Bay Centre
•Civic Theatre
Staff: 27
(Aty Attorney
1'urricia Riol�arclsvn
*Civil Legal Services/
Litigation
*Prosecution
•Advise Council
Boards, Commissions
& staff
•Advice/Drafting
Ordinances
Staff: 11
Boa rds9andS 0 rifnlissiorv;
•Arts Commission
•Diversity Commission
*Ethics Board
*Human Services Commission
•Parks & Recreation Commission
*Planning Commission
*Youth Commission
Bwids and Cornnvssinns
5 1 1 *Civil Service Commission
Public Safety
Anne K.lrk . atrlck.
Public Works
*Drug Awareness
*Development Services
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: 151
Staff: 38.5
Managemetit:
Sere ices
tiiren Wang
*City Clerk
•Finance
*Human Resources
*Risk Management/
Purchasing/Fleet
*Systems
24.5
City of Federal Way / 3
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Federal Way,
Washington
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2001
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
� ETM
. � ..
IT
ATE
President
Ono
*1-/oe a ' 00t.0
Executive Director
The Government Finance Officers
Association of the United Sates
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 fiscal year
ended December 31, 2001. This
was the twelfth consecutive year
that the government has achieved
this prestigious award. In order
to be awarded a Certificate of
Achievement, a government must
publish an easily readable and
efficiently organized
comprehensive annual financial
report. This report must satisfy
both generally accepted
accounting principles and
applicable legal requirements.
A Certificate of Achievement is
valid for a period of one year
only. We believe that our current
comprehensive annual financial
report continues to meet the
Certificate of Achievement
Program's requirements and we
are submitting it to GFOA to
determine its eligibility for
another certificate.
Federal Way
Legislative Building
PO Box 40021
Olympia, Washington 98504-0021
INDEPENDENT AUDITOR'S REPORT
June 20, 2003
The Honorable Mayor and City Council
City of Federal Way
Federal Way, Washington
Washington State Auditor
Brian Sonntag
(360)902-0370
FAX (360) 753-0646
TDD Relay 1-800-833-6388
http://www.sao.wa.gov
We have audited the accompanying general purpose financial statements of the City of Federal Way, King County,
Washington, as of and for the year ended December 31, 2002, 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 financial audit in accordance with governmental auditing standards generally accepted in the United States
of America, issued by the Comptroller General of the United States of America. 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 general purpose financial statements referred to above present fairly, in all material respects, the financial
position of the City of Federal Way, King County, Washington, as of December 31, 2002, and the changes in financial position
and cash flows, where applicable, thereof, for the year then ended in conformity with accounting principles generally accepted
in the United States of America.
In accordance with Government Auditing Standards in the United States of America, we will also issue our report on our
consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of
laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was conducted 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. Such information has been subjected to auditing 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
0
01
CITY OF
Federal Way
General Purpose
Financial Statements
City of Federal Way / 8
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
December 31, 2002
Statement I
Governmental Fund Types
Special
Debt
Capital
General
Revenue
Service
Projects
ASSETS
Equity in pooled cash and investments (note 4) $
8,997,244
$ 9,553,172 $
5,886,617
$ 14,849,419
Cash with escrow agent (note 4)
-
Prepaid insurancelpostage
6,308
-
-
-
Receivables (net):
Taxes (note 5)
746,661
642,102
Accounts and contracts
346,026
14,000
197,568
Interest
8,508
7,145
4,462
12,318
Due from other fundslinterfund loans receivable (note 12)
30,500
Due from other governments (note 5)
1,108,830
279,199
37,100
2,807,372
Investment in joint venture (note 16)
-
-
Property/equipment/improvements (net) (note 7)
-
-
-
Construction work in progress (note 7)
-
-
Amount available in debt service funds (note 11)
Amount to be provided for retirement of
long -tens debt (note 11)
-
-
TOTAL ASSETS AND OTHER DEBITS
11.244,077
10.495.617
5.928.179
17.866,677
LIABILITIES AND FUND EQUITY
Liabilities:
Vouchers payable
578,787
190,108
579,017
Accounts/payroll payable
68,903
Reteinagepayable
-
3,976
20,300
Retainage payable - with escrow agent
Due to other governments (note 6)
167,148
3,569
-
-
Due to other fundsrnterfund loans payable (note 12)
-
30,500
-
-
Deposits payable
521,205
1,018,597
-
-
General obligation bonds (note 11)
Long -tens loan payable
-
-
Public works trust fund loan payable (note 11)
Certificates of participation payable (note 11)
-
-
-
-
Deferred revenue
442,684
43,172
349,050
Compensated absences payable (note 11)
TOTAL LIABILITIES
1,778,727
1,289,922
349,050
599,317
Fund equity and other credits:
Contributed capital (note 13)
-
-
-
Investment in joint venture/general fixed assets (note 7)
Retained earnings:
Unreserved
Fund balance:
Reserved for:
Interfund loans
30,500
-
-
Debt service
5,579,129
Paths and trails
51,592
Petty cash/change fund/advance traveUnvestigative funds
9,150
-
-
-
Police special funds
470,760
-
-
-
Prepaid insurance
6,308
-
-
Unreserved:
Designated for snow & ice removal
-
100,000
-
Undesignated
8,948,632
9,054,103
-
17,267,360
TOTAL FUND EQUITY AND OTHER CREDITS
9,465,350
9,205,695
5,579,129
17,267,360
TOTAL LIABILITIES & FUND EQUITY & OTHER CR $
11.244,077
$ 10.495.617 $
5.928,179
$ U 866.677
See accompanying notes to financial statements.
Page 1 of 2
City of Federal Way / 9
Statement 1 (continued)
Proprietary
Account Groups
Totals
Internal
General
General Long-
(Memorandum Only)
Enterprise
Service
Fixed Assets
term Debt
2002
2001
S 7,726,482
$ 9,289,094
$ $
$
56,302,028\ $
55,817,031
109,069
-
109,069
257,495
-
5,000
11,308
16,850
96,405
1,485,168
1,253,670
32,609
-
-
-
590,203
458,098
6,534
7j181
46,748
19,829
-
30,500
10,000
52,758
4,285,258
2,713,737
2,537,955
2,537,955
1,971,762
40,849,540
4,654,715
54,242,971
99,747,226
89,585,229
893,895
-
1,993,254
2,887,139
8,345,118
-
-
5,579,129
5,579,129
6,508,124
_
23,707.926
23,707.926
25,658,412
49,767,282
13,916,189
?8.774 180_
29.287.055
197,319,656
192 615 355
300,464
148,588
1,796,964
1,394,017
1,136
-
70,039
31,174
3,428
27,704
11,299
109,069
109,069
257,495
170,717
250,086
30,500
10,000
9,864
-
1,549,666
1,419,525
27,682,000
27,682,000
30,515,000
2,668,908
-
2,668,908
3,465,850
59,936
59,936
382,423
178,075
-
1,012,981
1,174,634
37,845
62,684
1,545,119
1,645,648
1,641,891
3,308,789
211,272
29,287,055
36,824,132
40,553,394
34,162,382
1,364,825
35,527,207
36,047,351
58,774,180
58,774,180
53,827,478
12.296,111
12,380,492
24,676,604
22,437,201
-
30,500
10,000
5,579,129
6,508,124
51,592
41,863
9,150
9,150
470,760
458,685
6,308
11,850
_
100,000
100,000
_
35,270,095
32,610,259
46,458,493
13,745,317
58,774,180
160,495,524
152,061,961
$ 49.7 77.282
$ 1 6
$ 58,7 44.180
$ 29.287,055 5
197.319 656 $
192,615,355
Page 2 of 2
CITY OF
Federal Way
City of Federal Way / 11
Statement 2
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ALL GOVENMENTAL FUND TYPES
For the Year Ended December 31, 2002
Governmental Fund Typos
Totals
Special
Debt
Capital
(Memorandum only)
General
Revenue
Service
Projects
2002
2001
REVENUES:
Taxes
$ 21,901,408
4 6,238,875
S 2.554,573
$ -
$ 30,694,856
$ 29,721,513
Licenses and permits
1,760,712
68,908
-
-
1,829,620
1,396,694
Intergovernmental
1,103,306
3,062,367
-
7,974,960
12,140,633
8,709,300
Service charges and fees
2,368,549
496,388
-
1,691,852
4,556,789
3,415,650
Fines and forfeitures
785,997
-
-
-
785,997
830,668
Miscellaneous:
Interest
228,991
140,947
128,605
332,606
831,149
1.433,917
Other
486,189
4,978
491.167
487,692
TOTAL REVENUES
28,635,152
10,012,463
2,683,178
9,999,418
51,330,211
45,995,434
EXPENDITURES:
Current:
General government
4,923,290
126,523
-
-
5,049,813
4,724,252
Security of persons and property
14,991,404
14,991,404
14,296,605
Physical environment
28,450
300.614
329,064
378,066
Transportation
-
5,203,702
-
-
5,203,702
4,554,183
Economic environment
2,616,125
163,276
2,779,401
2,679,174
Health
627,232
627,232
535,589
Culture and recreation
3,141,129
-
-
-
3,141,129
2,951,607
Capital outlay
57,927
154,665
12,236,874
12,449,466
7,874,213
Debt service:
Principal
-
-
2,834,084
-
2,834,084
2,700,478
Interest, fiscal charge and debt issue costs
-
1,651,197
1,651,197
1,797,614
TOTAL EXPENDITURES
26,385,557
5,949,780
4,495,281
12,236,874
49,056,492
42,491,781
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
2,249,595
4,063,683
(1,802,103)
(2,237,456)
2,273,719
3,503,653
OTHER FINANCING SOURCES (USES):
Proceeds from sale of fixed assets
-
-
325,000
Operating transfers in (note 12)
226,759
1.879,696
2,957,108
2,615,481
7,679,044
5,583,380
Operating transfers out (note 12)
(927,290)
(4,445,273)
(2,084,000)
(373,481)
(7,830,044)
(8,019,674)
TOTAL OTHER FINANCING SOURCES (USES)
(700,531)
(2,565,577)
973,108
2,242,000
(151,000)
(2,111,294)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
1,549,064
1,498,106
(928,995)
4,544
2,122,719
1,392,359
FUND BALANCES AT BEGINNING OF YEAR
8,232,171
7,714,524
6,508,124
17,262,816
39,717,635
38,541,485
Residual equity transfers out (note 12)
(315,885)
(6,935)
(322,820)
(216,209)
FUND BALANCES AT END OF YEAR
S 9,465,350
$ 9,205,695
S 5,579,129
S 17,267,360
$ 41,517,534
S 39,717,635
See accompanying notes to ftnencial 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 FUNDS
FOR WHICH ANNUAL BUDGETS HAVE BEEN LEGALLY ADOPTED
For the Year Ended December 31, 2002
General Fund Special Revenue Fund
Variance Variance
Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable)
REVENUES:
Taxes
$ 20,975,006
$ 21,901,408
$ 926,402
$ 6,346,974 $
6,238,875
$ (108,099)
Licenses and permits
1,580,196
1,760,712
180,516
102,755
68,908
(33,847)
Intergovernmental
1,129,472
1,103,306
(26,166)
2,666,988
2,782,064
115,076
Service charges and fees
1,864,258
2,368,549
504,291
333,755
496,388
162,633
Fines and forfeitures
914,347
785,997
(128,350)
Miscellaneous:
Interest
251,254
228,991
(22,263)
323,075
138,683
(184,392)
Other
343,468
486,189
142,721
-
4,978
4,978
TOTAL REVENUES
27,058,001
28,635,152
1,577,151
9,773,547
9,729,896
(43,651)
EXPENDITURES:
General Government
6,142,942
4,923,290
1,219,652
50,000
50,000
Security ofpersons and property
16,019,925
14,990,818
1,029,107
Physical environment
28,443
28,450
(7)
373,998
300,614
73,384
Transportation
-
-
6,158,862
5,203,702
955,160
Economic environment
2,982,328
2,616,125
366,203
211,187
105,759
105,428
Health
633,166
627,232
5,934
Culture and recreation
3,205,743
3,141,129
64,614
Capital outlay
383,292
58,513
324,779
Debt service:
Principal
-
Interest and other debt issue costs
TOTAL EXPENDITURES
29,395,839
26,385,557
3,010,282
6,794,047
5,660,075
1,133,972
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
(2,337,838)
2,249,595
4,587,433
2,979,500
4,069,821
1,090,321
OTHER FINANCING SOURCES (USES):
Proceeds in long-term debt
-
-
-
Operating transfers in (note 12)
424,604
226,759
(197,845)
2,423,296
1,879,696
(543,600)
Operating transfers out (note 12)
(1,458,440)
(927,290)
531,150
(4,435,844)
(4,435,844)
TOTAL OTHER FINANCING SOURCES (USES)
(1,033,836)
(700,531)
333,305
(2,012,548)
(2,556,148)
(543,600)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(3,371,674)
1,549,064
4,920,738
966,952
1,513,673
546,721
FUND BALANCE AT BEGINNING OF YEAR
8,232,171
8,232,171
-
4,933,652
7,558,389
2,624,737
Residual equity transfers out (note 12)
(461,938)
(315,885)
146,053
(10,147)
(6,935)
3,212
FUND BALANCE AT END OF YEAR
$ 4,398,559
$ 9,465,350
$ 5,066,791
$ 5,890,457
$ 9,065,127
$ 3,174,670
See accompanying notes to financial statements.
Page 1 of 2
Debt Service Fund
Budget Actual
City of Federal Way / 13
Statement 3 (continued)
Totals
(Memorandum Only)
Variance Variance
Favorable 2002 Favorable 2001
(Unfavorable) Budget Actual (Unfavorable) Actual
$ 1,400,000
$ 2,554,573 $
1,154,573
$ 28,721,980 $
30,694,856 $
1,972,876
$ 29,721,513
-
1,682,951
1,829,620
146,669
1,396,694
3,796,460
3,885,370
88,910
8,709,300
2,198,013
2,864,937
666,924
3,415,650
_
_
_
914,347
785,997
(128,350)
830,668
355,071
128,605
(226,466)
929,400
496,279
(433,121)
1,433,917
-
-
343,468
491,167
147,699
487.692
1,755,071
2,683,178
928,107
38,586,619
41,048,226
2,461,607
45,995,434
_
-
6,192,942
4,973,290
1,219,652
4,724,252
16,019,925
14,990, 818
1,029,107
14, 296, 605
402,441
329,064
73,377
378,066
6,158,862
5,203,702
955,160
4,554,183
3,193,515
2,721,884
471,631
2,679,174
633,166
627,232
5,934
535,589
3,205,743
3,141,129
64,614
2,951,607
383,292
58,513
324,779
7,874,213
2,992,486
2,834,084
158,402
2,992,486
2,834,084
158,402
2,700,478
1,528,306
1,651,197
(122,891)
1,528,306
1,651,197
(122,891)
1,797,614
4,520,792
4,485,281
35,511
40,710,678
36,530,913
4,179,765
42,491,781
(2,765,721)
(1,802,103)
963,618
(2,124,059)
4,517,313
6,641,372
5,991,399
-
325,000
2,957,108
2,957,108
5,805,008
5,063,563
(741,445)
5,583,380
(2,084,000)
(2,084,000)
(7,978,284)
7.447.134)
531-150
(8,019,674
873,109
873,108
(2,173,276)
(2,383,571)
(210.295)
(2,111,294)
(1,892,613)
(928,995)
963,618
(4,297,335)
2,133,742
6,431,077
1,392,359
6,268,013
6,508,124
240,111
19,433,836
22,298,684
2,864,848
38,541,485
(472,085)
(322,820)
149,265
(216.209)
$ 4,375,400
$ 5,579,129 $
1,203,729
$ 14,664,416 $
24,109,606 $
9,445,190
$ 39,717,635
Page 2 of 2
City of Federal Way / 14
Statement 4
COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND EQUITY - ALL PROPRIETARY FUND TYPES
OPERATING REVENUES:
Intergovernmental
Service charges and fees
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personal services
Materials and supplies
Services and charges
Intergovernmental
Insurance
Claims
Depreciation
Interfimd charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES):
Subsidy from interlocal grant
Interest income
Interest expense
Gains/losses from disposal of fixed assets
TOTAL NON -OPERATING
REVENUES (EXPENSES)
INCOME(LOSS) BEFORE
OPERATING TRANSFERS
Operating transfers in (note 12)
NET INCOME (LOSS)
Add depreciation reducing contributed capital
Increase (decrease) in retained earnings
RETAINED EARNINGS, January 1
Residual equity transfers out (Note 12)
RETAINED EARNINGS, December 31
CONTRIBUTED CAPITAL, January 1 (note 13)
Increases to contributed capital (note 13)
Decreases to contributed capital
Less amortization
CONTRIBUTED CAPITAL, December 31
FUND EQUITY AT END OF YEAR
See accompanying notes to financial statements.
For the Year Ended December 31, 2002
Totals
(Memorandum only)
Enterprise
Internal Service
2002
2001
$ 35,823
$ - $
35,823 $
3,702,780
3,711,906
7,414,686
7,355,270
15,445
2,640
18,085
11,846
3,754,048
3,714,546
7,468,594
7,367,116
1,258,093
647,597
1,905,690
1,671,317
82,877
284,028
366,905
373,762
986,496
1,267,824
2,254,320
1,865,222
98,163
71,500
169,663
186,289
-
327,972
327,972
298,978
51,478
51,478
67,700
537,460
919,701
1,457,162
1,650,783
526,757
-
526,757
506,654
3,489,846
3,570,100
7,059,946
6,620,705
264,202
144,446
408,648
746,411
24,519
-
24,519
-
175,060
165,583
340,643
544,757
(33,651)
(15,533)
(49,184)
(64,338)
31,850
31,850
36,488
165,928
181,901
347,829
516,907
430,130
326,347
756,477
1,263,318
151,000
151,000
2,436,294
581,130
326,347
907,477
3,699,612
537,176
803,201
1,340,378
1,534,283
1,118,306
1,129,548
2,247,854
5,233,895
11,184,665
11,250,944
22,435,609
17,203,306
(6,860)
(6,860)
12,296,111
12,380,492
24,676,603
22,437,201
34,295,586
1,751,763
36,047,349
37,256,417
403,972
440,229
844,201
333,264
-
(23,966)
(23,966)
(8,047)
(537,176)
(803,201)
(1,340,378)
(1,534,283)
34,162,382
1,364,825
35,527,207
36,047,351
$ 46,458,493
$ 11745,317 $
60,203,810 $
58,484,552
City of Federal Way / 15
COMBINED STATEMENT OF CASH FLOWS
ALL PROPRIETARY FUND TYPES
For the Year Ended December 31, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users
Cash received from other funds for goods and services
Cash received from other governments for goods and services
Cash payments to suppliers for goods and services
Cash payments to employees
Cash payments to claimants
Cash payments to other funds for goods and services
Cash payments to other governments for services
Cash payments for other services and charges
Cash payments for damage deposits
Other operating receipts
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:
Operating transfers in (note 12)
NET CASH PROVIDED (USED) BY NON -
CAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Acquisition of capital assets/construction work in progress
Cash contributions for capital acquisitions (note 13)
Proceeds from sale of fixed assets
Principal paid on debt service
Interest and fiscal charges 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 EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING
ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation expense
(Increase)decreasein accounts receivable
(Increase)decreasein taxes receivable
(Increase)decrease in due from other governments
Increase(decrease)in vouchers/accounts payable
Increase(decrease)in retainage payable
Increase(decrease) in deposits payable
Increase(decrease)in taxes payable
Increase(decrease) in deferred revenues
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 (note 13)
Statement 5
Totals
(Memorandum only)
Enterprise
Internal Service
2002
2001
$ 3,618,396 $
3,727,417 $
7,345,813
$ 7,824,308
7,585
-
7,585
1,136
1,136
(82,878)
(1,890,449)
(1,973,327)
(1,769,359)
(1,250,531)
(642,408)
(1,892,939)
(1,658,343)
(51,478)
(51,478)
(67,700)
(526,757)
(50,578)
(577,335)
(573,501)
(98,163)
(98,163)
(127,578)
(854,422)
(854,422)
(763,495)
589
-
589
(1,772)
15.445
2.640
18,085
11,846
830,400
1,095,145
1,925,545
2,874,406
151.000
-
151,000
2,436,294
151,000
151,000
2,436,294
(477,825)
(813,885)
(1,291,710)
(1,372,039)
(6,860)
329,681
322,821
248,313
31,850
31,850
36,488
(796,942)
(285,000)
(1,081,942)
(486,503)
(33,651)
(15,533)
(49,184)
(64,338)
(1,315,278) (752,887) (2,068,165) (1,638,079
171.350
160.905
332,255
677,401
171,350
t60,905
332,255
677,401
(162,528)
503,163
340,635
4,350,023
7,998,079
8,785,931
16,784,010
12,433,987
7,835,551
9,289,094
17,124,645
16,784,010
264,202
144,446
408,648
746,411
537,460
919,701
1,457,162
1,650,783
(22,976)
(22,976)
477,679
5,548
5,548
(7,413)
(28,237)
15,511
(12,726)
(15,511)
132,074
10,297
142,371
(3,028)
3,428
-
3,428
(3,730)
589
589
(1,772)
1,136
1,136
-
(70,386)
(70,386)
18,014
7,562
5,189
12,751
12,974
566,198
950,699
1,516,897
2,127,996
830.400
1,095,145
1,925,545
2,874,407
$ $
110,548
$ 110,548
$ 127,877
See accompanying notes to financial statements.
City of Federal Way / 16
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2002
INDEX
Note Page
1
Summary of Significant Accounting Policies................................................................................
17
Basis of Presentation --Fund Accounting...............................................................................
17
Basisof Accounting.................................•...........................................................................
17
Budgets and Budgetary Accounting......................................................................................
20
Assets, Liabilities and Equities.............•...............................................................................
22
Equity in Pooled Cash and Investments........................................................................
22
Cash and Cash Equivalents...........................................................................................
22
Investments...................................................................................................................
22
Receivables..................................................................•................................................
22
Amounts Due to and from Other Funds; Interfund Loans ............................................
22
Inventories....................................................................................................................
23
FixedAssets.................................................................................................................
23
Depreciation...........•.....................................................................................................
23
Compensated Absences Payable...................................................................................
24
Long -Term Debt...........................................................................................................
24
DeferredRevenue.........................................................................................................
24
Fund Equity -Reserves and Designation........................................................................
25
Interfund Transactions..........................................................................................................
25
ComparativeData.................................................................................................................
25
Total Columns on Combined Statements - Overview ......................................... :.................
25
2
Stewardship, Compliance and Accountability ..........................................:...............................I....
26
3
Supplemental Appropriations........................................................................................................
26
4
Cash and Investments....................................................................................................................
26
5
Receivables and Due From Other Governments............................................................................
28
6
Due To Other Governments...........................................................................................................
29
7
Fixed Assets and Depreciation......................................................................................................
30
8
Pension Plans.................................................................................................................................
31
9
Risk Management..........................................................................................................................
35
10
Estimated Arbitrage Rebate...........................................................................................................
37
11
Long -Term Debt............................................................................................................................
37
12
Interfund Transactions...................................................................................................................
41
13
Contributed Capital........................................................................................................................
42
14
Contractual Obligations, Contingencies and Litigation.................................................................
43
15
Segment Information ....... .................................................................. :..........................................
44
16
Joint Ventures................................................................................................................................
44
Federal Way / 17
For the Year Ended December 31, 2002
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. 2002 marks its twelfth 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. Effective January 1, 2000, the City began operating it's own Municipal Court with minimal
contracted services from King County. Also, effective January 1.2000, the City became a member city in
the Valley Communications Center joint venture, which provides dispatching services for our Police
Department.
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 Audit Services. 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.
The City participates in one joint venture, Valley Communications Center. See Note 16, Joint Venture,
which more fully describes this organization.
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. The following is a description of the three fund categories and the generic fund
types included in each category.
City of Federal Way / 18
Governmental Funds Tvnes
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 and trust funds.
Proprietary Funds
Proprietary funds are used to account for activities similar to those found in the private sector where the
intent of the governing body is to finance the full cost of providing services, including depreciation,
primarily through user charges. The measurement focus for these funds is based on the commercial model,
which uses a flow of economic resources approach. Under this approach, the operating statements for the
proprietary funds focus on a measurement of net income (revenues and expenses) and both current and non-
current assets and liabilities are reported on related balance sheets. Their reported fund equity (net total
assets) is segregated into contributed capital and retained earnings components. As described below, there
are two generic fund types in this category.
Enterprise Funds account for operations that are financed and operated in a manner similar to private
business enterprises - where the intent of the City is to finance or recover, primarily through user charges,
the costs 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.
Account Groups
To facilitate the measurement of the sources and uses of current financial resources in the governmental
funds, separate account groups are used to account for related non -current or non -financial resources, such
as general fixed assets and unmatured general long-term debt. On this basis, the City uses the following
account groups to establish accounting control over related assets and liabilities not recorded in the
governmental funds.
Federal Way / 19
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 funds. Under this method, revenues are recognized
when earned, and expenses are recognized when incurred.
The modified accrual basis of accounting is used by governmental funds. Revenues and other financial
resources are recognized when they become susceptible to accrual, i.e., when the related funds become both
measurable and available to finance expenditures of the current period. To be considered "available",
revenue must be collected during the current period or soon enough thereafter to pay current liabilities. The
City uses thirty days when evaluating the available criteria.
Expenditures are recognized when the related fund liability is incurred. Since the recognition of
depreciation does not reduce net financial resources, it is not considered 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 '/4% 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 Accountine and Financial
Reporting Standards, revenues for cost reimbursement grants are determined to be earned and, therefore,
available at the time related expenditures are incurred. For this reason, grant revenues to be received as
reimbursement for expenditures incurred in the current year are also recognized as revenue in that year.
Shared Revenues - Revenues that have been collected, but not remitted by an intermediary collection
agency to the City, are considered measurable and available.
Other Revenue Sources - Other items recognized as revenue in the current year on the modified accrual
basis include investment interest earned but not received at year end; interfund, and intergovernmental
service billings related to services provided in the current year which are outstanding at year end; and any
other material revenue amounts determined to be both measurable and available under current modified
accrual accounting practices.
Revenues not considered to meet the criteria for recognition on the modified accrual basis include licenses
and permits, fines and forfeitures, and other miscellaneous revenues which are generally not measurable
until received.
City of Federal Way / 20
Budgets and Budgetary Accounting
Scope of Budget - Annual appropriated budgets are adopted for the general, some special revenue, and debt
service funds on the modified accrual basis of accounting. For governmental funds, there are no differences
between the budgetary basis and generally accepted accounting principles. Budgets for project and grant
related special revenue funds and capital project funds are adopted at the level of the individual project and
for fiscal periods that correspond to the lives of projects. Since these funds are not budgeted on an annual
basis, budgetary comparisons are not presented. NCGA Statement 1 does not require, and the financial
statements do not present, budgetary comparisons for proprietary fund types.
Legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the
total appropriation amount. Any unexpended appropriation balances for annually budgeted funds lapse at
the end of the year. Appropriations for other special purpose funds that are non -operating in nature are
adopted on a "project -length" basis and, therefore, are carried forward from year to year without
reappropriation until authorized amounts are fully expended or the designated purpose of the fund has been
accomplished.
The individual funds within each fund type which are included in the City's annual operating budget are
listed below.
Funds Budgeted on an Annual Basis:
General Fund
Special Revenue Funds:
Street Fund
Arterial Street Fund
Utility Tax
Debt Service Fund
Solid Waste/Recycling Fund
Hotel/Motel Lodging Tax Fund
Paths and Trails 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 June, 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 third Monday in November, the City Council must adopt an ordinance to establish the
amount of property taxes to be levied in the coming year.
By October 31, the City Manager files a preliminary budget with the City Clerk. Copies of the
preliminary budget are provided to staff and the City Council and made available to the public.
During the first two weeks of November, the City Clerk publishes a notice of the filing of the
preliminary budget and notices of public hearings to be held during preliminary budget deliberations.
Two public hearings on the proposed budget are also held during November and December. Final
hearings on the budget must begin on or before the first Monday of December, and may continue until
the 25th day prior to beginning of the next fiscal year.
By December 31, the City Council makes its adjustments to the proposed budget and adopts a final
budget by ordinance.
City of Federal Way / 21
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 2002,
the budget was amended five 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, and Community Development Block Grant. The reconciliation from
Statement 2 to Statement 3 is as follows:
All Special
Budgeted Special
Rev Funds
Non -budgeted Special Revenue Funds Rev Funds
Per
r Special 2% for Per
Statement 2
Contract Arts CDBG Statement 3
REVENUES:
Taxes
Licenses & permits
Intergovernmental
Services charges and fees
Miscellaneous:
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General governmental
Physical environment
Transportation
Economic environment
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
6,238,875 $ $ $ $ 6,238,875
68,908 68,908
3,062,367 280,303 2,782,064
496,388 - 496,388
140,947 2,264 138,683
.4,979 - - 4,978
10,012.463 2,264 280.303 9.729.896
126,523 19,634
56,889 50,000
300,614 -
300,614
5,203,702
- 5,203,702
163,276
57,517 105,759
154,665 - 154.661
5,9�18.780 19.634 - 269,071 5,660,075
4,063,683 (17,370)
11,232 4,069,821
1,879,696 - 1,879,696
(4 445,273) - (9A29) (4,435,844)
(2,565.5M - (9.429) (2,556,148)
1,498,106 (17,370)
1,803 1,513,673
FUND BALANCES AT BEGIN OF YEAR 7,714,524 123,881 28,114 4,140 7,558,389
Residual equity transfers out (6,935) 6 935
FUND BALANCES AT END OF YEAR _� 9,205,695 _$ 106.511 28.114 5.943 9 06 127
City of Federal Way / 22
Encumbrances
An encumbrance system is used for budgetary control purposes to record commitments resulting from
approved purchase orders. During the year, encumbrances are recorded in the accounting system at the time
purchase orders are issued for goods and services. Upon payment, the encumbrance is reversed and the
actual cost of the related item is recorded as a fund expenditure. Outstanding encumbrances lapse at year
end, are canceled and 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 $7,567,925.
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 cash held in escrow, which is disclosed separately on the balance sheet. Each fund's portion of total
cash and investments is summarized by fund type in the combined balance sheet as equity in pooled cash
and investments.
Cash and Cash Equivalents
It is the City's policy to invest all cash not immediately required for disbursement. At December 31, 2002,
the State Treasurer was holding $45,386,967 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, 2002, the total
cash and cash equivalents were $56,302,028.
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.
In accordance with GASB 31, investments in money market investments and participating interest -earning
investment contracts with a remaining maturity of one year or less at the time of purchase are stated at
amortized cost. All other investments are stated at fair value. There was no material deviation from fair
value quoted at year-end.
Receivables
Taxes receivable consists of measurable and available locally levied taxes and related interest and penalties.
Property taxes receivable is 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.
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 12.
City of Federal Way / 23
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 that 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 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
Governmental Accounting and Financial Rgportin St tandards.
Fixed assets acquired or constructed by the Proprietary Funds are capitalized in those funds at historical
cost. Contributed assets are recorded at their estimated fair values as of the date they are acquired. The
estimated fair value of donated assets is recorded as contributed capital by the fund that 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 / 24
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/Miscellaneous Equipment
Land Improvements
Buildings
Storm Drainage Systems
Compensated Absences Payable
Estimated Service
Life in Years
10
4
10
10
5-12
4-6
5
8
10
10
20
20
100
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, except
the Police Guild, who can accrue up to a maximum of 256 hours. 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, or forty hours for Police Guild members.
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 due to the difficulty in estimating the portion of existing
balances likely to result in expenditures in future periods.
Lona-term Debt
Long-term liabilities expected to be paid by the governmental funds are recorded in the General Long-term
Debt Account Group. Long-term debt for proprietary funds is recorded as a liability by the fund
responsible for the related debt repayment. Long-term debt outstanding at year-end is outlined in Note 11.
Deferred Revenues
The deferred revenue account is used to offset receivables established in the governmental funds for certain
revenues that are measurable but not considered available to finance payment of current obligations and,
therefore, are not susceptible to accrual on the modified accrual basis. When the receivable amounts are
collected in future periods, this liability account is reduced and corresponding revenue is recorded. The
portions of Property Taxes that do not meet the available criteria are recorded as deferred revenue.
Federal Way / 25
Fund Equity -Reserves and Designations
tions
Reserves represent portions of fund equity that are legally restricted for a specific future purpose or not
available for appropriation because they do not represent a current expendable resource. Designations of
fund balance identify amounts set aside by management for tentative future purposes or administrative
convenience.
In governmental and fiduciary funds, fund balance that is legally restricted for future purposes include
reserves for: a) future employee retirement payments and b) future debt service. Fund balance not available
for expenditure in the governmental funds consists of the outstanding balances of current interfund loans.
On December 31, 1991, $10,000 in a non -interest bearing loan from the General Fund to the City's CDBG
grant fund was authorized by the City Manager as interim financing. On December 31, 2002, an additional
$20,500 was added to the loan to increase the interim financing to the CDBG fund to $30,500. In addition,
the General Fund had reserves for Petty Cash, prepaid insurance, police special funds and Travel Advance
purposes. The Special Revenue Path and Trails Reserve fund balance is 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 that 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 2002 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 12,
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.
of Federal lVaY / 26
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.
NOTE 3
Supplemental Appropriations
Operating Budget Funds
Appropriations established during 2002 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
2002
SUPPLEMENTAL
APPROPRIATIONS
FINAL
BUDGET
General Fund $
27,493,892
$ 3,822,324 $
31,316,216
Special Revenue Funds:
Street Fund
3,482,527
386,700
3,869,227
Arterial Street Fund
1,626,113
673,365
2,299,478
Utility Tax Fund
4,485,844
-
4,485,844
Solid Waste/Recycling Fund
266,207
107,791
373,998
Hotel/Motel Lodging Tax
90,000
121,187
211,187
Paths and Trails Reserve Fund
-
-
-
Strategic Reserve Fund
132,500
-
132,500
Subtotal Special Revenue Funds
10,083,191
1,289,043
11,372,234
Debt Service Fund
6,855,232
(250,440)
6.604,792
$
44,432,315
$ 4,860,927 $
49,293,242
Funds Budgeted on a Project -Length Basis
During 2002, 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, and Community Development Block
Grant. 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 2002 the City utilized all the above with the exception of
bankers' acceptances as legal authorized investment instruments. The City's investment policies are
described in Note 1.
City of Federal Way / 27
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, 2002, the
equity in pooled cash and investments was $56,302,028.
At year-end, the City had $47,503,153 in cash and cash equivalents which consisted of investments with the
State Pool of $45,386,967; the City's checking account bank balance of $3,396,844 (outstanding checks
were, 333,124 at December 31); and petty cash and change funds, advance travel fund and investigative
fund totaling $52,440. 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, 2002, the City's total deposits and investments consisted of the following:
US Bank, Checking Account per Books
$ 2,063,746
Petty Cash/Change Fund/Advance Travel/Investigative Fund
52,440
Cash Equivalents with State Treasurer's Investment Pool
45,386,967
Subtotal Cash and Cash Equivalents
47,503,153
Investments in US Government Agency
8,798,875
Equity in Pooled Cash and Investments
56,302,028
Cash with Escrow Agent
109.069
Total Cash and Investments
$ 56,411,097
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 that 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. At the end of the year, the
City had no investments in category 2 or 3. All investments are stated at fair value. The fair value of the
positions in the State Investment Pool is the same as the value of the pool shares. The State Investment
Pool is managed by the Treasurer of the Sate of Washington.
City Securities
US Government Agency
Subtotal Categorized City Investments
Total Categorized Investments
Investments in State Treasurers Investment Pool
Total Investments
Risk Category Carrying
Fair
I Amount
Value
8,798,875 8,798,875
8,861,984
8,798,875 8,798,875
8,861,984
$ 8,798,875 $ 8,798,875 $ 8,861,984
45,386,967 45,386,967
$ 54,185,842 $ 54,248,951
'Federal Way 128
NOTE 5
Receivables and Due from Other Governments
Property Taxes
The King County Treasurer is responsible for collecting property taxes levied in the County by all taxing
districts. Amounts collected by the County on the City's behalf are remitted daily.
As described in Note 1, taxes are levied and become an enforceable lien against properties as of January 1.
Annual tax billings may be paid in two equal installments, due April 30 and October 31. At December 31,
2002, the total balance of property taxes receivable recorded by the City was $342,855. Of this, $305,231 is
recorded as a deferred revenue, since it was not collected within the first 30 days of 2002. The property tax
levy calendar in 2002 was:
PROPERTY TAX CALENDAR
January1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100% of market value.
October 31 Second installment is due.
Property taxes are recorded as a receivable when levied, offset by deferred revenue. During the year,
property tax revenues are recognized when cash is collected. At year-end, property tax revenues are
recognized for collections expected to occur within 30 days. No allowance for uncollectible taxes is
established because delinquent taxes are considered fully collectible.
Under State law, the maximum levy (for general governmental services) is up to $3.60 per $1,000 of
assessed valuation, subject to two limitations, set forth below. Since the City of Federal Way is not a full
service city, the City is only allowed $1.60. The remaining $2.00 is for the fire district ($1.50) and library
district ($.50).
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 Washinaton 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 2002 was $1.38 per $1,000 on an assessed valuation of $5,604,164,978 for a
total regular levy of $7,764,913
City of Federal Way / 29
Due from Other Governments
At December 31, 2002 the City recorded the following receivables from other governmental units:
n
General Fund:
King County - Sustained Support Grant $
11,000
Washington State Shared Revenue
1,069,775
Washington Criminal Justice Training Center
11,253
Department of Justice - BVP Grant
16,802
.Subtotal General Fund
1,108,830
Special Revenue Funds:
King County - Solid Waste & Recycling Grants
44,643
State Department of Ecology - Solid Waste & Recycling Grants
12,875
Washington State Shared
172,883
King County - Community Development Block Grants
48,797
Subtotal Special Revenue Fund
279,198
Debt Service Fund:
Washington State Shared
37,100
Subtotal Special Revenue Fund
37,100
_
Capital Projects Funds:
Federal Aid - SR99 HOV
2,135,551
National Oceanic & Atmospheric Admin. - S 364th St Culvert 78,ZJY
King County - Sustained Support Grant 1,000
King County Property Taxes 746,661
Special Revenue Funds:
Utility Taxes 642,101
Enterprise Funds:
NOTE 6
Due To Other Governments
At December 31, 2002, the City recorded $170,717 as due to other governmental units. This included
$167,148 to King County for jail services.
General Fund:
Kine County - Jail Services $ 167,148
Revenue Funds:
City of Federal Way / 30
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
1, 2002
Additions Deletions
December 31, 2002
Joint venture
_January
$ 1,971,762
566,193 $
$ 2,537,955
Land
30,628,680
4,080,636
34,709,316
Other improvements
15,121,584
1,053,830
16,175,414
Buildings
1,724,241
-
1,724,241
Assets under capital lease:
Land 1,450,000 - 1,450,000
Machinery & equipment 184,000 - 184,000
Subtotal 51,080,267 5,700,659 - 56,780,926
Construction work in progress 2,747,211 270,218 1,024,175 1,993,254
Total General Fixed Assets $ 53,827,478 $ 5,970,877 $ 1,024,175 $ 58,774,180
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, 2002:
Enterprise Funds
Subtotal
Internal Service Funds
Subtotal
Total
Surface Water
Dumas Bay
Enterprise
Inrormalion
Support
Fleet &
Buildings &
Internal Service
Proprietary
Management
Centre
Funds
Systems
Services
Equipment
Furnishings
Funds
Funds
Land
S 3,708,654
$ 2.109,640 $
5,818,294 $
-
5 - $
-
5
5 - 5
5,818,294
Building & Structures
40,796,027
3,571,152
44,367,179
-
44,367,179
Inrormalionsystems
-
-
4,271,869
-
4,271,869
4,271,869
Transportation equip
-
-
-
-
-
2,922,671
2,922,671
2.922,671
Heavy equipment
-
-
-
-
-
435,030
-
435,030
435,030
Buildings & furnishings
-
3,390.909
3,390,909
3,390,909
Other equipment
105,033
105,033
-
198.174
405.701
603,875
708.908
Subtotal fixed assets
44,504,681
5,785,825
50,290.506
4,271,869
198,174
3,763,402
3.390,909
11,624,353
61,914,859
Less accumdeprec
(8,380,960)
(1,060,006)
(9,440,966)
(2,818.584)
(111,218)
(2,071,735)
(1,968,101)
(6,969,638)
(16,410,604)
Subtotal fixed assets
36,123,721
4,725,819
40.949,540
1,453,285
86,955
1,691,667
1,422,808
4,654,715
45,504,255
Construction in progress
726,143
167,742
893,885
-
-
-
-
-
893,885
Total fixed assets
$ 36,849,864
$ 4,893,561 S
41.743,425 $
1.453,285
$ 86,955 $
1,691.667
$ 1,422,808
$ 4,654,715 $
46,398,140
'Federal Way / 31
Construction Work in Progress
Included in the General Fixed Asset Account Group and Enterprise Fund is Construction Work in Progress
that represents projects that were in process at year-end. The City had seven General Fixed Assets Account
Group and three Surface Water Management projects that were in progress at the end of 2002 and are
anticipated to be complete during 2003. The projects were:
General Fixed Assets Account Group Surface Water Management Enterprise Fund
Park Acquisitions 92,832 SW 356th Regional Storm Water Facility 529,480
School Site Improvements 1,276,436 W Hylebos Channel Stabilization/Restoration 100,344
Neighborhood Parks 131,518 West Branch Lakota Creek Restoration 96,319
Klahanee Lake Improvements 131,446 $ 726,143
Lake Killarney 298,670
Hylebos Project 58,212 _ Dumas Bay Center Fund
Panther Lake 4,140 Dumas Bay Centre 167,742
$ 1,993,254 $ 167,742
NOTE 8
Pension Plans
Substantially all City full-time and qualifying part-time employees participate in one of the following
statewide retirement systems administered by the Washington State Department of Retirement Systems,
under cost -sharing multiple -employer public employee defined benefit and defined contribution retirement
plans. The Department of Retirement Systems (DRS), a department within the primary government of the
State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that
includes financial statements and required supplementary information for each plan. The DRS CAFR may
be obtained by writing to: Department of Retirement Systems, Communications Unit, P.O. Box 48380,
Olympia, WA 98504-8380. The following disclosures are made pursuant to GASB Statement 27,
Accounting for Pensions by State and Local Government Employers.
Public Employees' Retirement System (PERS) Plan I and 2
Plan Description
PERS is a cost -sharing multiple -employer retirement system comprised of three separate plans for
membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a combination defined
benefit/defined contribution plan. Membership is mandatory for all City employees working 70 hours per
month for 5 months out of the twelve month period. Membership in the system includes elected officials;
state employees; employees of the Supreme, Appeals, and Superior courts (other than judges in judicial
retirement system); employees of legislative committees; community and technical colleges, college and
university employees (not in national higher education retirement programs); judges of district and
municipal courts; and employees of local government. The PERS, system includes three plans. Participants
who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October
1, 1977 and by either, February 28, 2002 for state and higher education employees, or August 31, 2002 for
local government employees, are Plan 2 members unless they exercise an option to transfer their
membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher
education employees, or September 1, 2002 for local government employees have the option of choosing
membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of
employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose
within 90 days default to PERS Plan 3. PERS defined benefit retirement benefits are financed from a
combination of investment earnings and employer and employee contributions. PERS retirement benefit
provisions are established in state statute and may be amended only by the State Legislature.
City of Federal Way / 32
Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1
members are eligible for retirement at any age after 30 years of service, or at age 60 with five years of
service, or at age 55 with 25 years of service. The annual pension is 2 percent of the average final
compensation per year of service, capped at 60 percent. The average final compensation is based on the
greatest compensation during any 24 eligible consecutive compensation months. If qualified, after reaching
age 66 a cost -of -living allowance is granted based on years of service credit and is capped at three percent
annually.
Plan 2 retirement benefits are vested after an employee completes five years of eligible service. Plan 2
members may retire at age 65 with five years of service, or at age 55 with 20 years of service, with an
allowance of 2 percent per year of service of the average final compensation per year of service. The
average final compensation is based on the greatest compensation during any eligible consecutive 60-month
period. Plan 2 retirements prior to 65 receive reduced benefits. If retirement is at age 55 or older with at
least 30 years of service, a 3 percent per year reduction applies; otherwise an actuarial reduction will apply.
There is no cap on years of service credit; and a cost -of -living allowance is granted (indexed to the Seattle
Consumer Price Index), capped at 3 percent annually.
Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and
member contributions finance a defined contribution component. The defined benefit portion provides a
benefit calculated at 1 percent of the average final compensation per year of service. The average final
compensation is based on the greatest compensation during any eligible consecutive 60-month period. Plan
3 members become eligible for retirement if they have: at least ten years of service; or five years including
twelve months that were earned after age 54; or five service credit years earned in PERS Plan 2 prior to
June 1, 2003. Plan 3 retirements prior to the age of 65 receive reduced benefits. If retirement is at age 55 or
older with at least 30 years of service, a 3 percent per year reduction applies; otherwise an actuarial
reduction will apply. There is no cap on years of service credit; and Plan 3 provides the same cost -of -living
allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option
selected by the member, either as a lump sum or pursuant to other options authorized by the Employee
Retirement Benefits Board.
There are 1,155 participating employers in PERS. Membership in PERS consisted of the following as of
the latest actuarial valuation date for the plans of September 30, 2001:
Retirees and Beneficiaries Receiving Benefits 62,189
Terminated Plan Members Entitled To But Not Yet Receiving Benefits 18,412
Active Plan Members Vested 97,777
Active Plan Members Nonvested 55,159
Tot-d 2.33M7
Funding Policy
Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates and Plan 2
employer and employee contribution rates and Plan 3 employer contribution rates. Employee contribution
rates for Plan 1 are established by statute at six percent and do not vary from year to year. The employer
and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by
the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers
are -required to contribute at the level established by the Legislature. PERS Plan 3 defined contribution is a
non-contributing plan for employers. Employees who participate in the defined contribution portion of
PERS Plan 3 do not contribute to the defined benefit portion of PERS Plan 3. The Employee Retirement
Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15
percent; two of the options are graduated rates dependent on the employee's age. The methods used to
determine the contribution requirements are established under state statute in accordance with Chapters
41.40 and 41.45 RCW.
City of Federal Way / 33
The required contribution rates expressed as a percentage of current year covered payroll, as of December
31.2002, were:
PERS Plan 1 PERS Plan 2 PERS Plan 3
Employer 1.32%* 1.32% 1.32%**
Employee 6.00% 0.65% ***
* The employer rates include the employer administrative expense fee currently set at 0.22%.
** Plan 3 defined benefit portion only.
*** Variable from 5.0% to 15.0% maximum based on rate selected by the PERS 3 member.
Both the City and employees made the required contributions. The City's required contributions for the
years ended December 31 were:
PERS Plan I
PERS Plan II
PERS Plan III
2002 $ 41,420
$ 195,910
$ 599
2001 $ 59,653
$ 414,046
N/A
2000 $ 67,493
$ 483,965
N/A
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 and 2
Plan Description
LEOFF is a cost -sharing multiple -employer retirement system comprised of two separate defined benefit
plans. Membership in the system includes all full time:, fully compensated, local law enforcement officers
and fire fighters. LEOFF is comprised primarily of non -state employees. LEOFF participants who joined
the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 are
Plan 2 members. LEOFF retirement benefits are financed from a combination of investment earnings,
employee and employer contributions, and a special funding situation in which the state pays the remainder
through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute
an may be amended only by the State Legislature.
Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1
members are eligible for retirement with five years of service at the age of 50. The benefit per year of
service calculated as a percent of final average salary is as follows:
Term of Service Percent of Final Average
20 or more years 2.0%
10 but less than 20 years 1.5%
5 but less than 10 years 1.0%
The final average salary is the basic monthly salary received at the time of retirement, provided a member
has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the
average of the highest consecutive 24 months' salary within the last 10 years of service. If membership was
established in LEOFF after February 18, 1974, the service retirement benefit is capped at 60 percent of final
average salary. A cost -of -living allowance is granted (indexed to the Seattle Consumer Price Index).
Plan 2 retirement benefits are vested after an employee completes five years of eligible service. Plan 2
members may retire at age 50 with 20 years of service, or at age 53 with five years of service, with an
allowance of 2 percent of the final average salary per year of service. The final average salary is based on
the highest consecutive 60 months. Plan 2 retirements prior to the age of 53 are reduced 3 percent for each
year that the henefit commences prior to age 53. The benefit is two percent of average salary per year of
service. There is no cap on years of service credit and a cost -of -living allowance is granted (indexed to the
Seattle Consumer Price Index), capped at three percent annually.
City of Federal Way / 34
There are 359 participating employers in LEOFF. Membership in LEOFF consisted of the following as of
the latest actuarial valuation date for the plans of September 30, 2001:
Retirees and Beneficiaries Receiving Benefits 8,078
Terminated Plan Members Entitled To But Not Yet Receiving Benefits 332
Active Plan Members Vested 10,894
Active Plan Members Nonvested 4,006
Total 23,310
Funding Policy
Starting on July 1, 2000, Plan 1 employers and employees will contribute zero percent as long as the plan
remains fully funded. Employer and employee contribution rates are developed by the Office of the State
Actuary to fully fund the plan. Plan 2 employers and employees are required to pay at the level adopted by
the Department of Retirement Systems in accordance with 41.45 RCW. All employers are required to
contribute at the level required by state law. The Legislature, by means of a special funding arrangement,
appropriated money from the state General Fund to supplement the current service liability and fund the
prior service costs of Plan 1 in accordance with the requirements of the Pension Funding Council. However,
this special funding situation is not mandated by the state constitution and this funding requirement could be
returned to the employers by a change of statute. The methods used to determine the contribution rates are
established under state statute in accordance with Chapters 41.26 and 41.45 RCW.
The required contribution rates expressed as a percentage of current year covered payroll, as of December
31, 2002 were:
LEOFF Plan I LEOFF Plan II
Employer 0.22% * 2.86% **
Employee 0.00% 4.39%
State N/A 1.75%
* The employer rates do not include the employer administrative expense fee currently set at 0.23%.
* The employer rate for ports and universities is 4.61 %.
Both the City and employees made the required contributions. The City's required contributions for the
years ended December 31 were:
LEOFF Plan I LEOFF Plan II
2002 $0 $521,980
2001 $0 $606,690
2000 $0 $631,198
Other Local Government Pension Systems - City of Federal Way
Employees' Retirement System
Effective June 1, 1990, the Federal Way City Council established the Federal Way Employees' Retirement
System, per City Ordinance 90-74 and as authorized by the Federal Social Security Act (42 USCA, Section
418 (g)). The Retirement System is a defined contribution pension plan established as an alternative to the
Federal Social Security System.
During 2002, there were a total of 390 individuals covered by this system. As of the end of the year, 340
remained as active employees of the City and none were drawing retirement benefits. The 38 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 $5,000 or greater.
All regular employees of the City of Federal Way are required to participate in the system, with the City
matching the employee's required contribution. The employee pays 6.2% and this is matched by the
composite of a cash match (approximately 5.2%) and insurance payments (1%) for disability, survivor,
accidental death and dismemberment, and lump sum death benefit coverage. Contributions into the plan are
tax deferred.
City of Federal Way / 3 5
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 2002 was $16,609,176 and total City payroll was $17,606,906. Actual City
contributions for the year were $863,680. Actual employee contributions were $1,051,343. 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 by Trautmann Maher &
Associates. Retirement System assets are not the property of the City and are not subject to the claims of the
City's general creditors. The Federal Way Retirement System assets are with Security Trust Company, N.A.
who invests Plan assets.
In July 1995, the City implemented the hardship withdrawal and loan provision program. Loans receivable
as of December 31, 2002 were $277,330.
The consulting actuary firm of Trautmann, Maher & Associates has been contracted to provide record
keeping, administrative and consulting services related to the Plan.
Actuarial determinations are not required because accidental death and dismemberment insurance, long-
term disability, survivor income insurance and the lump sum death benefit are provided by a group
insurance policy with Standard Insurance Company; and benefits paid to participants upon retirement are
limited to (a) a nonforfeitable, nontransferable annuity contract purchased by the plan's trustee, (b)
retirement benefits payable from the employee's account to which no contributions by the City or the
participant can be added after retirement, or a single lump -sum payment equal to the accumulated balance in
the employee's account as of his retirement date.
NOTE 9
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 2002 remained relatively similar to the coverage for 2000. There were no settlements
in excess of insurance for commercially insured activities for 1996 through 2002.
During 2002 the City purchased commercial insurance policies from commercial insurers. The following is
a summary of coverage in force in 2002.
City of Federal Way /36
NAME OF COMPANY
St. Paul Fire and Marine
The Fidelity and Deposit
St. Paul Fire and Marine
The Fidelity and Deposit
St. Paul Fire and Marine
St. Paul Fire and Marine
St. Paul Fire and Marine
St. Paul Fire and Marine
The Fidelity and Deposit
Company of Maryland
St. Paul Fire and Marine
St. Paul Fire and Marine
St. Paul Fire and Marine
St. Paul Fire and Marine
The Fidelity and Deposit
St. Paul Fire and Marine
The Fidelity and Deposit
St. Paul Fire and Marine
St. Paul Fire and Marine
St. Paul Fire and Marine
DETAILS OF COVERAGE LIABILITY LIMITS
Public Officials
Liability Coverage
Public Official Bond
Management Services Director
Public Official Bond
City Manager
General Liability
Coverage
Property
Coverage
Auto Liability &
Physical damage
Faithful Performance,
Fidelity/Emp. Dishonesty
& Erisa Bond
Inland Marine
Excess Liability Policy
Boiler & Machinery
Employer Liability
Workers' Compensation
Stop Gap-Statuta by limit
Public Official Bond
City Clerk
Public Official Bond
Chief of Police
Law Enforcement
Liability
Above Ground
Pollution
Per claim & General aggregate - $5,000,000
Deductible - $5000
Coverage Limit - $50,000
Coverage Limit - $50,000
Per claim - $2,000,000
General aggregate - $2,000,000
Deductible - $5,000
Buildings/contents - $11,168,125
Extra expense - $1,308,048
Valuable papers - $460,000
Deductible - $5,000
Fine Arts - $25,000
Deductible - $1,000
Coverage Limit - $2,000,000
Collision Deductible - $1,000
Comprehensive deductible -$100
Deductible - $5,000
Coverage Limit - $250,000/bond
Deductible - $2,500
Deductible (Erisa) - 0
Coverage Limit - $187,500
Deductible - $1,000
Coinsurance - 90%
Per claim / Aggregate - $10,000,000
Retention - $10,000
Per incident - $11,168,125
Deductible - $1,000
Coverage Limit - $1,000,000
Coverage Limit - $50,000
Coverage Limit - $50,000
Coverage Limit - $2,000,000
General aggregate - $2,000,000
Deductible - $5,000
Per claim & General aggregate - $1,000,000
Deductible - $1,000
Federal Way / 37
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.
The City is self -insured for unemployment compensation. At December 31, 2002 the City had $567,171 in
retained earnings of which $37,221 will be paid for 1" quarter 2003's unemployment compensation claims.
1998 1999 2000 2001 2002
Unemployment Reserve, Beginning Balance $ 75,386 $ 149,864 $ 240,688 $ 325,079 $ 454,823
Plus unemployment compensation benefits 120,408 138,515 146,035 154,354 166,983
Less claim payments during the year 45,930 47,691 61,644 24,610 54.635
Unemployment Reserve, Ending Balance $ 149,864 $ 240,688 $ 325,079 $ 454,823 $ 567,171
NOTE 10
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, 2002 is $-0- for its tax-exempt general
obligation bond issues subject to the Tax Reform Act issued through that date.
NOTE 11
Long -Term Debt and Leases
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 2002
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.
City of Federal Way /38
The following is a schedule of outstanding general obligation debt as of December 31, 2002:
OUTSTANDING GENERAL OBLIGATION DEBT - BY TYPE
December 31, 2002
Amount
Beginning
Ending
Bond Rating
Maturity
Originally
Outstanding
Amount
Amount
Outstanding
Description at Issuance
Date of Is ue
Date_
Interest Rate
Issued
Debt
Issued
12ed med
I]e bt
General Obligation Bonds:
1993 Limited A]
14-Jun-93
1-Dec-08
2.70 - 5.70
$ 2,390,000
$ 1,330,000
$
$ 160,000
$ 1,170,000
1993 Refunding Al
13-May-93
1-Dec-21
2.70 - 5.85
12,105,000
11,765,000
310,000
11,455,000
1995 Limited Al
28-Deo-95
1-Dec-05
3.90 - 4.75
5,000,000
2,455,000
575,000
1,880,000
1996 Lirnited Al
29-Feb-96
1-Dec-05
3.50 - 4.50
2,500,000
1,220,000
285,000
935,000
1997 Limited AAA -insured
22-Apr-97
1-Dec-12
5.00 - 5.30
16,150,000
11,290,000
1,375,000
9,915,000
2000 Limited Al
12-Sep-00
1-Dec-15
5.31
M510
2,455,000
-
128,000
2,327,000
Subtotal GO Bonds
40.696,600
30,515.000
-
2.833.000
27.682.000
Certificates of Participation:
1992 Issue - Series A
26•Aug-92
1-De,-02
3.00 -5.45
2,150,000
285,000
-
285,000
-
1999Issue AAA
1-Au -99
1-Jun-04
5.16
184,000
97,423
-
37,487
Subtotal 00ps
2,334,000
382,423
-
322,487
59,936
Public Works Trust Fund Loan:
PWTL - Kitts Comer Drain Imp
31-Aug-94
1-Jul-14
1.00
233,316
156,927
-
12,936
143,991
PWrL- Kitts Comer Drain Imp
24-Jul-96
1-Jul-14
1.00
1,166,580
844,309
-
64,680
779,629
PWTL - Kitts Comer Drain Imp
4-Sep-97
1-Jul-14
1.00
155,544
119,877
-
8,624
111,253
PWTL - SeaTac Mall Drain Imp
31-May-00
]-Jul-19
1.00
412,500
390,790
-
118,450
272,340
PWTL - SeaTae Mall Drain hnp
1-Jul-19
1.00
&062400
1953 946
-
592,252
1 361694
Subtotal4,030,440
3,465,849
-
7< 942
8,907
Grand Total All Long -Tam Debt
$ 47 061040
$34 363,272
$ -
$ 3 95 429
$ 30 410.943
OUTSTANDING GENERAL OBLIGATION DEBT - BY FUND
December 31, 2002
Amount
Beginning
Ending
Originally
Outstanding Amount
Amount
Oustanding
Description
Issued
Debt Issued
Redeemed'
Debt
General Long -Term Debt Group:
1999 COP Issue
184,000
97,423 -
37,487
59,936
1994 Limited,
2,390,000
1,330,000 -
160,000
1,170,000
1994 Refunding
12,105,000
11,765,000 -
310,000
11,455,000
1995 Limited
5,000,000
2,455,000 -
575,000
1,880,000
1996 Limited
2,500,000
1,220,000 -
285,000
935,000
1997 Limited
16,150,000
11,290,000 -
1,375,000
9,915,000
2000 Limited
2,551,600
2,455,000 -
128,000
2,327,000
Total General Long -Term Debt
40,880,600
30,612,423 -
2,870,487
27,741,936
Internal Service Funds
1992 Issue - Series A
2,150,000
285,000 -
285,000
-
Enterprise Funds
Public Works Trust Fund Loan
4,030,440
3,465,849
796,942
2,668,907
Grand Total All Long -Term Debt
$ 47,061,040
$ 34,363,272 $ -
$ 3,952,429
$ 30,410,843
e Debt service principal payments in Debt Service Fund include credits of $36,402. $19,200 from Interlocal
agreement with Federal Way Fire District to participate in capital cost obligations with Valley
Communications joint venture with the City of Federal Way and $17,202 refund of excess funds after 1991
Limted GO Bond final payment.
City of Federal Way / 39
The following is a schedule of outstanding general obligation debt as of December 31, 2002:
SCHEDULE OF GENERAL LONG-TERM DEBT
December 31, 2002
With Comparative Totals for December 31, 2001
Amounts Available and Amounts to be Provided for the
Payment of General Long -Term Debt
Amount to be Provided for the Retirement of. -
General Obligation Bonds
Certificates of Participation
Compensated Absences
Amount Available in Debt Service Funds
Total Amount Available and to be Provided
General Long -Term Debt Payable
General Obligation Bonds
Certificates of Participation
Compensated Absences - Vacation
Total General Long -Term Debt
2002 2001
22,102,871
59,936
1,545,119
5,579,129
$ 29,287,055
27,682,000
59,936
1,545,119
$ 29,287,055
24,006,876
97,423
1,554,113
6,508,124
$ 32,166,536
30,515,000
97,423
1,554,113
$ 32,166,536
SCHEDULE OF CHANGES IN LONG-TERM DEBT
Period Ended December 31, 2002
Oustanding at
Outstanding at
December 31, 2001
Additions
Reductions
December 31, 2002
General:
General Obligation Bonds
$ 30,515,000
$ -
$ (2,833,000)
$ 27,682,000
Certificates of Participation
97,423
-
(37,487)
59,936
Employee Leave Benefits
1,554,113
8,994
1,545,119
Total General
32,166,536
-
2,879,481
29 287,055
Proprietary.
Entep prise Funds
Public Works Trust Fund Loan
3,465,849
-
(796,942)
2,668,907
Employee Leave Benefits
30,283
7,562
-
37,845
Internal Service Funds
Certificates of Participation
285,000
-
(285,000)
-
Em Io ee Leave Benefits
57,495
5,189
-
62.684
Total Proprietary
3,838,627
12,751
(1,081,942)
2,769,436
Total All Funds
$ 36,005,163
$ 12,751
$ (3,961,423)
$ 32,056,491
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
Bonded Debt
of Participation
Trust Fund Loan
Total Debt
2003
4,427,706
42,038
209,048
4,678,792
2004
4,425,860
21,019
207,225
4,654,103
2005
4,435,452
-
205,401
4,640,853
2006
3,413,438
-
203,577
3,617,016
2007
3,404,464
-
201,754
3,606,218
Thereafter
18.710.044
-
1,856,233
20,566,277
City of Federal Way / 40
SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY
As of December 31, 2002
::!?: Bbntlr:::::•::•_
.: :: CapifaJLc:a'ses ::•::
:: PW3nis@F.drid :::::
:•:•:Gi.ifYd;7dtbi = ::: _•_•_•_ .:,;•:•;•;•;•.
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::: P�irici.irl :::::::Iriteies't:::
::P.rioci' al :
: anteee'st•'•
:•:•Eriaci' al7:•::•X1fifei•est:•:::::
2003
$ 2,979,000
$ 1,448,706
$ 39,446
$ 2,592
$ 182,359
$ 26,689
$ 3,200,805
$ 1,477,986
$ 4,678,792
2004
3,124,000
1,301,860
20,490
529
182,359
24,865
3,326,849
1,327,254
4,654,103
2005
3,291,000
1,144,452
-
182,359
23,042
3,473,359
1,167,494
4,640,853
2006
2,438,000
975,438
-
-
182,359
21,218
2,620,359
996,657
3,617,016
2007
2,560,000
844,464
182.359
19,395
2.742,359
863,859
3,606,218
2008
1,172,000
745,889
-
182,359
17,571
1,354.359
763,460
2,117,819
2009
1,010,000
681,982
-
182,359
15,748
1,192,359
697,730
1,890,089
2010
1,069,000
626,864
-
182,359
13,924
1,251,359
640,788
1,892,147
2011
1,128,000
568,381
-
182,359
12,100
1,310,359
580,481
1,890,840
2012
1,192,000
506,558
-
182,359
10,277
1,374,359
516,835
1,891,194
2013
830,000
451,802
182,359
8,453
1,012,359
460,255
1,472,614
871,000
403,988
182,359
6,630
1,053,359
410,618
1,463,977
928,000
352,930
-
96,120
4,806
1,024,120
357,735
1,381,855
740,000
298,528
96,120
3,845
836,120
302,373
1,139,492
785,000
254,867
96,120
2,884
881,120
257,751
1,138,870
F
835,000
208,553
96,120
1,922
931,120
210,475
1,141,595
890,000
159,705
-
96,120
961
986,120
160,666
1,146,78
945,000
107,640
-
945,000
]07,640
1,052,640
895,000
52,358
-
-
895,000
52,358
947,358
Tow
$ 27,682,000
$ 11,134,963
$ 59,936
$ 3,121
$ 2,668,908
$ 214,330
$ 30,410,844
1$ 11,352,414
$ 41,763,258
Computation of Legal Debt Margin
Under Washington State law (RCW 39.36.020), a City may incur general obligation debt for general city
purposes in an amount not to exceed 2'/7, percent of the value of all taxable property within the City. State
law requires all property to be assessed at 100 percent of its true and fair value. Unlimited tax general
obligation debt requires an approving vote of the people, and any election to validate such general
obligation debt must have a voter turnout of at least 40 percent of those who voted in the last State general
election and of those voting, 60 percent must be in the affirmative. The City Council may, by ordinance,
authorize the issuance of limited tax general obligation debt in an amount up to 1.5% of the valuation within
the City without a vote of the people. No combination of limited or unlimited tax debt may exceed 7'/2
percent of the valuation. The debt service on unlimited tax debt is secured by excess property tax levies,
whereas the debt service on limited tax debt is secured by property taxes collected with the City's
councilmanic levy.
The City's legally remaining debt capacities as of December 31, 2002 are:
General Government (no vote required) $ 74,395,582
General Government (3/5 majority vote required) $ 59,123,628
Parks and Open Space (3/5 majority vote required) $147,809,069
Utilities (3/5 majority vote required) $147,809,069
Total Capacity $429.137.348
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, 2002, is provided below:
Governmental Funds (recorded in the General Long -tern Debt Account Group)
Enterprise Funds
Internal Service Funds
$ 1,545,119
37,845
62,684
Total Compensated Absences $ 1,645,648
City of Federal Way / 41
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.
Leases
The City of Federal Way leases office buildings and land which are accounted for as operating leases.
Operating leases do not give rise to property rights or lease obligations, and therefore the results of the lease
agreements are not reflected in the City's account groups. Total Cost for the leases was $348,875 for the
year ended December 31, 2002. The future minimum lease payments for these leases are as follows:
Year Ending
Amount
December 31
2003
$336,800
2004
$167,856
Total
$504-656
NOTE 12
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 2002, 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 2002, these involved transactions between internal service funds and other funds for the
purpose of recovering operating and maintenance costs and to build replacement reserves.
Interfund Receivables/Payables
The following schedule presents interfund loans and due to/due from other funds outstanding at December
31, 2002:
Interfund Loans Interfund Loans
Interfund Loans Receivable Payable _
General Fund $ 30,500 $
Special Revenue Funds.
Block Grant
Total Inter nd Loans $ 30,500 $ 30,500
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
City of Federal Way / 42
presented as an increase or decrease in the fund's contributed capital or retained earnings. The following
residual equity transfers were recorded in 2002:
General Fund
Special Revenue Funds
Enterprise Fund
Internal Service Funds
329,680
$ 329,680
$ 315,885
6,935
6,860
$ 329,680
The above amount of $329,680 was transferred from governmental and enterprise 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 2002:
Operating Transfers:
Fund Category Transfers In
General Fund $ 226,759
Special Revenue Funds 1,879,696
Debt Service Fund 2,957,108
Capital Project Funds 2,615,481
* Enterprise Fund 151,000
$ 7,830,044
Transfers Out
$ 927,290
4,445,273
2,084,000
373,481
$ 7,830,044
* Includes $100,000 subsidy from Utility Tax Fund to support Knutzen Family Theatre maintenance and
operations, $50,000 from General Fund for Dumas Bay Centre capital projects, and $1,000 from Arts
Commission for the Theatre Camp Program.
NOTE 13
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 would be
reported as revenue and closed to retained earnings.
During 2002 various transactions impacted the contributed capital of proprietary funds. These transactions
have been identified in the following presentation:
City of Federal Way / 43
Enterprise Subtotal Internal Service Funds Subtotal Total
Surface Water Dumas Bay Enterprise Information Support Fleet & Buildings & Intemal Service Proprietary
Managemeat Centre Funds systems Services Equipment Fnmishings Funds Funds
Beginning
Contributed Capital $ 32,471,588 $ 1,823,998 $ 34,295,586 $ 899,479 $ 7,433 $ 532,109 $ 312,743 $ 1,751,763 $ 36,047,349
Additions:
Resid Equity Transfers
-
-
93,586
10,832
212,127
13,136
329,681
329,681
Capital Acquisition
403,972 -
403,972
-
-
-
403,972
Contributions from City Funds
110,548
-
110 548
110,548
Total Additions
403,972
403,972
204,134
10,832
212,127
13,136
440,229
944,201
Deductions:
Amortization
(352,332) (184,844)
(537,176)
(455,575)
(1,701)
(282,353)
(63,572)
(803,201)
(1,340,378)
Write-offs
1 1 4
(22,772)
-
(23,966) 66
(23,966
Total Deductions
(352,332) (184,844)
(537,176)
(456,769)
(1,701)
(305.125)
(63,572)
(827,167)
(1,364,344)
Ending
Contributed Capital S 32 523 28 1 639 154 3 34 162.382 S 646,843 5 16 564 S 439 111 $ 262 307 $ 1 364 825 S 35 527 207
The following is a reconciliation of depreciation expense to depreciation reducing contributed capital:
Depreciation Expense
Less:
Write-off of Accum Dep
Deprec on Building
Deprec Reducing
Contrib Capital
Enterprise Funds Subtotal Internal Service Funds Subtotal Total
Surface Water Dumas Bay Enterprise Information Support Fleet & Buildings & Internal Service Proprietary
Mamgement Centre Funds systems Services E ul [Went Fumishia Funds Funds
$ 352.616 S 194.844 S 537,460 S 455,575 S 1.701 S 2SZ,353 4 180.072 S 919.7U1 $ 1.457.162
(284)
(284)
(116,500) (116,500) (116,784)
S 352.332 $ 184.844 S 537,176 5 •155,575 $ 1,701 S 232.353 S 63,572 $ 803,201 S 1,3441,378
NOTE 14
Contractual Obligations, Contingencies and Litigation
As of December 31, 2002, 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.
At December 31, 2002, the City had the following unpaid contractual obligations:
$ 1,014
BPA Trail
$ 96,769
SWM Annual Programs
$ 131,708
West Hylebos Creek
$ 554,945
SeaTac Mall Detention
$ 110,831
Lakota Creek
$ 3,418
Steel Lake Soccer Field
$ 6,977
Dash Point at 8th Ave SW
$ 20,601
13th Ave S/14th Ave & 312th
$ 54,893
ROW 23rd Ave S.
$ 190,430
23rd Ave South Road Improvements
$ 38,238
South 320th St & Highway 99 Intersection
$ 3,664,416
South 312th to South 324th / SR 99 Phase I
$ 140,657
South 324th to South 340th / SR 99 Phase II
$ 125,372
South 336th & Weyerhauser Way South
$ 48,977
South 288th Street / SR 99
$ 33,436
Dumas Bay Centre
Federal Way / 44
NOTE 15
Segment Information for Enterprise Funds
The City maintains two enterprises whose operations are accounted for in the enterprise funds and are
financed and operated in a manner similar to private business. It is generally intended that the costs of
providing goods or services to the general public on a continuing basis should be financed or recovered
primarily through user charges. Segment information for the year ended December 31, 2002 follows:
City of Federal Way
Statement of Revenues, Expenses & Changes in Net Assets - Proprietary Funds
For the Year Ended December 31, 2002
Surface Water Dumas Bay Total Enterprise
Management Centre Funds
:al Operating Revenue 3,164,185 589,863 3,754,048
erating Expenses:
Operations & Maintenance 2,229,171 723,215 2,952,386
Depreciation 352,616 184,844 537.460
Total Operating Expenses
2,581,787
908,059
3,489,846
Net Operating Income (Loss)
582,398
(318,196)
264,202
Non -Operating Revenue Net of Expenses
(483,667)
35,012
(448,655)
Net Income (Loss)
98,731
(283,184)
(184,453)
Net Working Capital
6,939,860
261,757
7,201,617
Property, Plant, and Equipment
Additions
19,849
19,849
Deletions
-
-
0
Net Property, Plant, and Equipment
36,123,721
4,725,819
40,849,540
Construction in Progress
726,143
167,742
893,885
Total Assets
43,789,724
5,155,318
48,945,042
Long Term Liabilities - Public Works Trust Fund Loan
3,101,132
-
3,101,132
Total Fund Equity
40,688592
5.155,318
45,843,910
NOTE 16
Joint Venture
On August 20, 1976, the Cities of Auburn, Kent, Renton and Tukwila entered into an interlocal agreement
to provide their citizens with quality emergency dispatching services through the formation of the Valley
Communications Center. On June 16, 1993, the cities of Auburn, Kent, Renton and Tukwila modified the
interlocal agreement to establish Valley Communications Center, hereafter referred to as Valley Com, as a
governmental administration agency under RCW 39.34.030 (3) (b). Effective April 17, 2000, the Cities
futher modified and replaced the Interlocal Agreement, in order to add the City of Federal Way as a
member city of Valley Com beginning January 1, 2000, add the agreement to the Cities to finance the
project, and provide that the Interlocal Agreement may not be terminated during the term of the bonds.
In addition to serving the emergency communications needs of the five member cities, Valley Com serves
several other subscribing agencies, which include King County Fire Districts #2, #17, #20, #26, #40, #43,
#44, #46, #47; City of Pacific Police and Fire Departments, City of Algona Police Department, City of Des
Moines Police Department, City of Black Diamond Police Department, and King County EMS Units.
Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth
conditions of services and rates charged.
City of Federal Way / 45
The allocation of prorated financial participation among the five member cities is the percentage of
dispatched calls attributed to each jurisdiction compared to the total estimated dispatched calls, for the
current twelve month period ending December 31. The percentages are applied to the current approved
budget, less revenue from all other sources. Distribution of the current year net income is based on the
same percentages. The 2002 cost distributions for the five member cities are as follows:
Dispatchable
Percent
city
Calls
of Total
Renton
63,378
19.12%
Kent
91,625
27.64%
Auburn
66,908
20.18%
Tukwila
37,980
11.46%
Federal Way
71,629
21.60%
Total
331,520
100.00%
Valley Com is governed by an Administration Board, composed of the Mayors or designated
representatives from the five participating cities of Federal Way, Renton, Kent, Auburn, and Tukwila. The
Administration Board is authorized to establish bylaws that govern procedures of the Board and Valley
Com's general operations for the following functions: 1) Budget review and recommendations to the
legislative bodies of the member cities, and budget adoption after each legislative body has approved the
required financial participation for the ensuing year; 2) Approve appointment and/or discharge of the
Director; 3) Approve personnel policy and make final decisions on all major policy changes; and 4) Review
and approves all contracts.
In addition, an Operations Board provides administration, and consists of a member from each participating
city's police and fire departments, including the directors of such departments or their designees. Also on
the Operations Board is an appointed representative of the Police and Fire contract agencies. The
Operations Board performs the following functions: 1) Oversees the general operation of Valley Com, and
advises and makes recommendations to the Administration Board; 2) Make recommendations on Director
selection; 3) Presents proposed policies and budgets to the Administration Board; and 4) Reviews
disbursements of funds by the Director.
The Director presents a proposed budget to the Operating Board on or before August 15 of each year. Said
budget is then presented to the Administrative Board by September 1 of each year. The Administration
Board can make changes to the proposed Valley Com budget as it frids necessary, but final approval falls to
the legislative body of each member city, in accordance with the provisions of the interlocal agreement.
The following condensed financial information is from Valley Communications Center comprehensive
annual financial report for the fiscal year ended December 31, 2002. Audited 2002 financial statements are
available from Valley Communications, 27519 108a' Avenue SE, Kent, WA 98030, or telephone 253-372-
1300.
Valley Communications Center
Balance Sheet
As of December 31, 2002
Assets
Current Assets 10,437,915
Plant, Property, and Equipment 17,413,536
Total Assets 27,851,451
Liabilities & Fund Equity
Current Liabilities
Total Liabilities
Retained Earnings
Contributed Capital
800-MHz Contributed Capital til
Total Fund Equity
Total Liabilities & Fund
319.467
319,467
20,571,991
44,793
6,915,200
27,531,984
27
City of Federal Way / 46
Valley Communications Center
Statement of Revenue, Expenses, and Changes in Fund Equity
For the Year Ending December 31, 2002
Operating Revenues
Charges for Intergovernmental Services $ 7,062,742
Other Operating Revenue 7,434
Total Operating Revenue 7,070,176
Operating Expenses
Salaries & Benefits 5,623,828
Other Operation & Maintenance 885,434
Depreciation 2,331,144
Capitalized Expenses (496,517)
Total Operating Expenses 8,343,889
Income (Loss) from Operations
(1,273,713)
Non -Operating Revenues (Expenses)
Interest Revenue
211,185
Net hlcrease/(Decrease) in Fair Value of hlvestments
833
Leasehold Revenue
19,870
Construction Funds
3,800,000
Gain (Loss) from Sale of Fixed Assets
(141,705)
Total Non -Operating Revenue
3,890,183
Net Income (loss)
2,616,470
Retained Earnings at Beginning of Year
17,955,521
Retained Earnings at End of Year
20,571,991
Contributed Capital at Beginning of Year
6,963,703
Additional Contributed Capital
(3,710)
Contributed Capital at End of Year
6,959,993
Total Fund Equity at End of Year
$ 27,531,984
The share of equity belonging to the five participating cities is shown below. Liabilities are the
responsibility of the four participating cities in direct proportion to their equity position.
Realon Kent Auburn Tukwila Federal Way Total _
Equtty @ January 1, 2002 $ 4,087,259 $ 5,464,384 $ 3,787,975 $ 2,692,643 $ 1,971,762 $ 18,004,023
Curtent Year Increase 501.18S 724.517 528,971 300,397 566,193 2.621,263_
Pereent of Equity 22.25% 30.01% 20.93% 14,51°% 12.30% 100.00%
Percent of2001 Distribution 19.12% 27.64% 20.18% 11.46% 21.60°! 100.00%
In May 1993 Valley Com entered into an agreement with King County to provide joint project management
for the acquisition and installation of 800-MHz emergency radio communications system approved by the
voters of King County in conjunction with a $57 million levy. In August 1993 Valley Com also entered
into an Interlocal Cooperation Agreement with the subregions of King County, Seattle, and Eastside Public
Safety Communications, which governs the development and installation of the new 800-MHz emergency
radio system. Valley Com now provides emergency communication dispatch services to a population of
approximately 570,000.
Valley Com operates as an enterprise fund and is totally self supporting through the implementation of user
fees and the primary source of revenue is provided by charges for calls for service. The 800-MHz
emergency radio communications system operated by the agreement with King County is operated as a
separate enterprise fund, and the Member Cities have no equity interest in the contributed capital from this
system.
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 / 48
GENERAL FUND
COMPARATIVE BALANCE SHEET
December 31, 2002 and 2001
ASSETS
Equity in pooled cash and investments
Prepaid Insurance
Receivables (net):
Taxes
Accounts and contracts
Interest
Due from other governments
Interfund loans receivable
TOTAL ASSETS
2002
2001
$ 8,997,244
$ 7,643,451
6,308
11,850
746,661
459,291
346,026
398,673
8,508
3,080
1,108,830
1,274,475
30,500
10.000
11,244,077 9,800,820
LIABILITIES AND FUND BALANCE
Liabilities:
Vouchers payable
578,787
479,022
Accounts/payroll payable
68,903
50,232
Due to other governments
167,148
197,292
Deposits payable
521,205
315,448
Deferred revenue
442,684
526,655
TOTAL LIABILITIES
1,778,727
1,568,649
Fund balance:
Reserved for:
Interfund loans
30,500
10,000
Petty cash/change funds
4,150
4,150
Police special funds
470,760
458,685
Advance travel
5,000
5,000
Prepaid insurance
6,308
11,850
Unreserved:
Undesignated
8,948,632
7,742,486
TOTAL FUND BALANCE
9,465,350
8,232,171
TOTAL LIABILITIES AND FUND BALANCE
$ 11,244,077
$ 9,800,820
City of Federal Way / 49
GENERAL FUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Years Ended December 31, 2002 and 2001
2002
REVENUES:
Taxes
$ 21,901,408
$ 21,489,570
Licenses and permits
1,760,712
1,301,940
Intergovernmental
1,103,306
1,512,274
Service charges and fees
2,368,549
2,053,779
Fines and forfeitures
785,997
830,668
Miscellaneous:
Interest
228,991
293,887
Other
486,189
460,621
TOTAL REVENUES
28,635,152
27,942,739
EXPENDITURES:
Current:
General government
4,923,290
4,647,323
Security of persons and property
14,991,404
14,264,309
Physical environment
28,450
24,443
Economic environment
2,616,125
2,570,254
Health
627,232
535,589
Culture and recreation
3,141,129
2,951,607
Capital outlay
57,927
49,791
TOTAL EXPENDITURES
26,385,557
25,043,316
EXCESS OF REVENUES OVER EXPENDITURES
2,249,595
2,899,423
OTHER FINANCING SOURCES (USES):
Operating transfers in
226,759
268,111
Operating transfers out
(927,290)
(1,342,535)
TOTAL OTHER FINANCING SOURCES (USES)
(700,531)
(1,074,424)
EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES
OVER EXPENDITURES AND OTHER USES
1,549,064
1,824,999
FUND BALANCE AT BEGINNING OF YEAR
8,232,171
6,620,445
Residual equity transfers out
(315,885)
(213,273)
FUND BALANCE AT END OF YEAR
$ 9,465,350
$ 8,232,171
City of Federal Way / 50
a
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
For the Years Ended December 31, 2002 and 2001
f7�r/�l�li1�I.�1
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Miscellaneous:
Interest
Other
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Security of persons and property
Physical environment
Economic environment
Health
Culture and recreation
Capital outlay
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
Variance
Favorable
2001
Budget
Actual
(Unfavorable)
Actual
$ 20,975,006
$ 21,901,408
$ 926,402
$ 21,489,570
1,580,196
1,760,712
180,516
1,301,940
1,129,472
1,103,306
(26,166)
1,512,274
1,864,258
2,368,549
504,291
2,053,779
914,347
785,997
(128,350)
830,668
251,254
228,991
(22,263)
293,887
343,468
486,189
142,721
460,621
27,058,001
28,635,152
1,577,151
27,942,739
6,142,942
4,923,290
1,219,652
4,647,323
16,019,925
14,991,404
1,028,521
14,264,309
28,443
28,450
(7)
24,443
2,982,328
2,616,125
366,203
2,570,254
633,166
627,232
5,934
535,589
3,205,743
3,141,129
64,614
2,951,607
383,292
57,927
325,365
49,791
29,595,839
26,385,557
3,010,282
25,043,316
(2,337,838)
2,249,595
4,587,433
2,899,423
424,604
226,759
(197,845)
268,111
(1,458,440)
(927,290)
531,150
(1,342,535)
(1,033,836)
(700,531)
333,305
(1,074,424)
(3,371,674)
1,549,0.64
4,920,738
1,824,999
8,232,171
8,232,171
-
6,620,445
(461,938)
(315,885)
146,053
(213,273)
$ 4,398,559
$ 9,465,350
$ 5,066,791
$ 8,232,171
City of Federal Way / 51
GENERAL FUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31, 2002
Variance
Favorable
Budget
Actual
(Unfavorable)
GENERAL GOVERNMENT
LEGISLATIVE:
Personal services
$ 72,138
$ 69,727
$ 2,411
Supplies
1,460
2,915
(1,455)
Service charges and fees
116,063
115,944
119
Intergovemmental services
70,000
67,095
2,905
Interfund services
17.174
14.616
2,558
TOTAL LEGISLATIVE
276,835
270,297
6,538
JUDICIAL:
Personal services
759,373
729,083
30,290
Supplies
10,050
11,641
(1,591)
Service charges and fees
318,650
259,367
59,283
Interfund services
189.856
164,047
25,809
TOTAL JUDICIAL
1,277,929
1,164,138
113,791
EXECUTIVE:
Personal services
510,967
464,293
46,674
Supplies
4,400
4,244
156
Service charges and fees
172,267
168,790
3,477
Interfund services
865,380
60,511
804,869
TOTAL EXECUTIVE
1,553,014
697,838
855,176
FINANCIAL AND RECORD SERVICES:
Personal services
Supplies
Service charges and fees
Intergovemmental services
Interfund services
TOTAL FINANCIAL AND RECORD SERVICES
LEGAL:
Personal services
Supplies
Service charges and fees
Intergovernmental services
Interfund services
TOTAL LEGAL
751,485
733,912
17,573
6,150
6,709
(559)
59,295
96,732
(37,437)
42,000
43,495
(1,495)
321,100
292,862
28,238
1,180,030
1,173,710
6,320
866,669
747,000
119,669
9,075
11,202
(2,127)
394,014
335,415
58,599
500
-
500
89,385
80,032
9,353
1,359,643
1,173,649
185,994
PERSONNEL:
Personal services
210,602
221,674
(11,072)
Supplies
17,402
9,123
8,279
Service charges and fees
119,774
75,874
43,900
Intergovernmental services
-
130
(130)
Interfund services A
51,823
46,625
L 98
TOTAL PERSONNEL
399,601
353,426
46,175
CENTRAL SERVICES:
Personal services
80,021
77,118
2,903
Supplies
400
153
247
Service charges and fees
13,469
10,451
3,018
Intergovernmental services
2,000
2,510
(510)
TOTAL CENTRAL SERVICES
95,890
90,232
5,658
TOTAL GENERAL GOVERNMENT
6,142,942
4,923,290
1.219.652
Page 1 of 4
City of Federal Way / 52
GENERAL FUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31, 2002
(Continued)
SECURITY OF PERSONS AND PROPERTY
LAW ENFORCEMENT:
Personal services
Supplies
Service charges and fees
Intergovernmental 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
Intergovernmental services
TOTAL COMMUNICATION, ALARM & DISPATCH
TOTAL SECURITY OF PERSONS AND PROPERTY
PHYSICAL ENVIRONMENT
NATURAL RESOURCES:
Intergovernmental services
TOTAL NATURAL RESOURCES
TOTAL PHYSICAL ENVIRONMENT
ECONOMIC ENVIRONMENT
AGING:
Personal services
Supplies
Service charges and fees
TOTAL AGING
COMMUNITY SERVICES:
Personal services
Supplies
Service charges and fees
Interfund services w
TOTAL COMMUNITY SERVICES
PLANNING AND COMMUNITY DEVELOPMENT:
Personal services
Supplies
Service charges and fees
Intergovernmental services
Interfund services
TOTAL PLANNING AND COMMUNITY DEVELOPMENT
Variance
Favorable
Budget
Actual
(Unfavorable)
10,127,831
9,969,181
158,650
714,102
322,012
392,090
510,017
732,747
(222,730)
9,877
2,350
7,527
1,303,530
1,172,902
130.628
12,665,357
12,199,192
466,165
1,610,844
1,071,700
539,144
1,610,844
1,071,700
539,144
762,400
730,123
32,277
11,585
9,442
2,143
295
6,073
(5,778)
969,444
974,874
(1430)
1,743,724
1,720,512
23,212
16,019,925
14,991,404
1,028,521
28,443 28,450 7
28,443 28,450 (7)
28,443 28,450 (7)
63,866
46,679
17,187
5,250
6,270
(1,020)
8,920
1,130
7,790
78,036
54,079
23,957
72,207
55,489
16,718
8,350
3,922
4,428
46,374
19,153
27,221
11,287
10,070
a 1,217
138,218
88,634
49,584
993,373
972,068
21,305
10,205
8,531
1,674
570,015
323,256
246,759
50
34
16
197.308
180,975
16,333
1,770,951
1,484,864
286,087
Page 2 of 4
City of Federal Way / 53
GENERAL FUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31, 2002
(Continued)
HOUSING AND COMMUNITY DEVELOPMENT:
Personal services
Supplies
Service charges and fees
Interfund services
TOTAL HOUSING AND COMMUNITY DEVELOPMENT
TOTAL ECONOMIC ENVIRONMENT
MENTAL & PHYSICAL HEALTH
PUBLIC HEALTH:
Personal services
Supplies
Service charges and fees
Intergovennental services
Interfund services
TOTAL PUBLIC HEALTH
TOTAL MENTAL & PHYSICAL HEALTH
CULTURE AND RECREATION
Variance
Favorable
Budeet
Actual
(Unfavorable)
772,513
776,058
(3,545)
6,275
4,653
1,622
22,563
29,183
(6,620)
193,772
178,654
15.118
995,123
988,548
6,575
2,982,328
2,616,125
366.203
118,987
108,038
10,949
1,475
1,388
87
473,600
477,622
(4,022)
14,500
18,659
(4,159)
24,604
21,525
3.079
633,166
627,232
5,934
633,166
627,232
5,934
EDUCATION:
Personal services
180,192
185,733
(5,541)
Supplies
3,300
4,618
(1,318)
Service charges and fees
60,935
47,714
13,221
Interfund services
135,067
111.303
23,764
TOTAL EDUCATION
379,494
349,368
30,126
SPECTATOR AND COMMUNITY EVENTS:
Personal services
330,420
351,209
(20,789)
Supplies
35,135
35,947
(812)
Service charges and fees
215,675
218,416
(2,741)
Intergovernmental services
700
100
600
Interfund services
18,047
16,140
1,907
TOTAL SPECTATOR AND COMMUNITY EVENTS
599,977
621,812
(21,835)
PARTICIPANT RECREATION:
Personal services
233,337
220,737
12,600
Supplies
19,925
22,908
(2,983)
Service charges and fees
23,570
23,925
(355)
Intergovernmental services
100
1,745
(1,645)
TOTAL PARTICIPANT RECREATION
276,932
269,315
7,617
CULTURA J, AND RECREATION FACILITIES:
t'
Personal services
12,000
13,899
(1,899)
Supplies
1,000
862
138
Service charges and fees
750
6,675
(5,925)
intergovernmental services
600
379
221
Interfund services
39,705
33,622
6,083
TOTAL CULTURAL AND RECREATION ACTIVITIES
54,055
55.437
(1,382)
Page 3 of 4
City of Federal Way / 54
GENERAL FUND
SCHEDULE OF EXPENDITURES COMPARED TO BUDGET
For the Year Ended December 31, 2002
(Continued)
PARK FACILITIES:
Personal services
Supplies
Service charges and fees
Intergovernmental services
Interfund services
TOTAL PARK FACILITIES
TOTAL CULTURE AND RECREATION
CAPITAL OUTLAY
OTHER FINANCING USES
Operating transfers out
Residual equity transfers out
TOTAL OTHER FINANCING USES
TOTAL GENERAL FUND
Variance
Favorable
Budget
Actual
(Unfavorable)
1,055,459
1,093,376
(37,917)
148,742
112,307
36,435
445,963
407,907
38,056
7,000
1,370
5,630
238,121
230,237
7,884
1,895,285
1,845,197
50,088
3,205,743
3,141,129
64,614
383,292
57,927
325,365
1,458,440
927,290
531,150
461,938
315,885
146,053
1,920,378
1,243,175
677,203
$ 31,316,217
$ 27,628,732
$ 3,687,485
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 ContracWStudies Fund accounts for receipts
and disbursements related to special contracts and special
projects where completion will extend beyond the calendar
year.
The Hotel/Motel Lodging Tax Fund was established to
account for all lodging tax receipts and disbursements
related to tourism promotion and acquisition and/or
operation of tourism -related facilities.
The 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 ofpaths and trails within City right-of-way.
City of Federal Way / 56
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
December 31, 2002
With Comparative Totals for December 31, 2001
Special
Arterial
Utility Tax
Solid Waste/
Contracts/
Street
Street
Projects
Recycling
Studies
ASSETS
Equity in pooled cash and investments
$ 1,182,125
$ 649,927
$ 7,225,151
$ 126,324
$ 106,422
Retainage in escrow
-
-
-
Receivables (net):
Taxes
-
-
642,102
-
-
Accounts and contracts
14,000
-
-
Interest
520
553
5,695
103
89
Due from other governments
114,635
45,092
-
57,518
TOTAL ASSETS
1,311,280
695,572
7,872,948
183,945
106,511
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
155,466
7,549
Accounts/payroll payable
-
-
Retainage payable
3,976
Due to other governments
3,569
Due to other funds
-
Performance bonds
-
Deposits payable
1,018,597
Interfund loans payable
-
-
Deferred revenue
29,672
13,500
TOTAL LIABILITIES
1,211,280
21,049
Fund balance:
Reserved for:
Paths and trails
-
-
Unreserved:
Designated snow & ice removal
100,000 - -
Undesignated
- 695,572 7,872,948
162*1896 106,511
TOTAL FUND BALANCES
100,000 695,572 7,872,948
162,896 106,511
TOTAL LIABILITIES AND FUND BALANCE $
1,311,280 $ 695,572 $ 7,872,948 $
183,945 $ 106,511
Page 1 of 2
City of Federal Way / 57
Hotel/Motel
Lodging Tax
2%for the
Arts
Community
Development
Block Grant
Paths and
Trails
Reserve
Totals
2002
2001
$ 184,031
$ 28,114
$ 239
$ 50,839
$ 9,553,172 $
8,268,714
642,102
692,425
_
-
14,000
13,868
144
41
7,145
2,590
12,444
48,797
712
279,198
143.863
196,619
28,114
49,036
51,592
10,495,617
9,121,460
14,500
12,593
190,108
204,834
_
-
13,238
3,976
-
3,569
52,794
_
1,018,597
1,094,802
30,500
30,500
10,000
_
43,172
31,268
14.500
43,093
1,289,922
1,406,936
_
-
51,592 51,592
41,863
_ _
_
- 100,000
100,000
182,119 28,114
5,943
9,054,103
7,572,661
182,119 28,114
5,943
51,592 9,205,695
7,714,524
$ 196,619 $ 28,114 $
49,036 $
51,592 $ 10,495,617
$ 9,121,460
Page 2 of 2
City of Federal Way / 58
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
Solid Special
Arterial Utility Waste/ Contracts/
Street Street I'ax Itecycling Studies
IWI AMU l"
Taxes $ - $ $ 6,104,506 $ $
Licenses and permits 68,908 -
Intergovernmental 2,111,190 562,420 99,583
Service charges and fees 294,828 39,560 - 162,000
Miscellaneous:
Interest 24,614 24,045 83,531 2,704 2,264
Other 4,949 - -
TOTAL REVENUES 2,504,489 626,025 6,188,037 264,287 2,264
EXPENDITURES:
Current:
General government
-
50,000
19,634
Physical environment
-
-
300,614
-
Transportation
3,546,293
1,657,409
-
-
Economic environment
-
-
-
Culture and recreation
-
Capital outlay
-
-
-
-
-
TOTAL EXPENDITURES
3,546,293
1,657,409
50,000
300,614
19,634
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
(1,041,804)
(1,031,384)
6,138,037
(36,327)
(17,370)
OTHER FINANCING SOURCES (USES):
Proceeds of long-term debt
-
-
-
Operating transfers in
872,692
1,007,004
Operating transfers out
-
(4,435,844)
TOTAL OTHER FINANCING SOURCES (USES)
872,692
1,007,004
(4,435,844)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(169,112)
(24,380)
1,702,193
(36,327)
(17,370)
FUND BALANCES AT BEGINNING OF YEAR
275,926
719,952
6,170,755
199,344
123,881
Residual equity transfers out
(6,814)
-
-
(121)
-
FUND BALANCES AT END OF YEAR
$ 100,000
$ 695,572
$ 7,872,948
$ 162,896
$ 106,511
Pagel of 2
City of Federal Way / 59
Hotel/Motel Community Paths and
Lodging 2%for the Development Trails
Tax Arts Block Grant Reserve
Totals
2002 2001
$ 134,369 $ $ $ $ 6,238,875 $ 6,234,406
- 68,908 94,754
280,303 8,871 3,062,367 2,852,824
496,388 471,709
2,931 858 140,947 238,405
29 - 4,978 27,071
137,329 280,303 9,729 10,012,463 9,919,169
105,759
105,759
31,570
56,889
126,523
109,225
-
300,614
353,623
-
5,203,702
4,554,183
57,517
163,276
108,920
154,665
154,665
126,760
269,071
5,948,780
5,252,711
11,232
9,729 4,063,683
4,666,458
_ 1,879,696 2,111,074
(9,429) (4,445,273) (6,586,414)
(9,429) (2,565,577) (4,475,340)
31,570 - 1,803 9,729 1,498,106 191,118
150,549 28,114 4,140 41,863 7,714,524 7,526,342
(6,935) (2,936)
$ 182,119 $ 28,114 $ 5,943 $ 51,592 $ 9,205,695 $ 7,714,524
Page 2 of 2
City of Federal Way / 60
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
Street Fund
Variance
Favorable 2001
Budget Actual (Unfavorable) Actual
REVENUES:
Taxes
$ -
$ -
$ -
$
Licenses and permits
102,755
68,908
(33,847)
74,754
Intergovernmental
1,960,003
2,111,190
151,187
1,922,646
Service charges and fees
178,447
294,828
116,381
322,991
Miscellaneous:
Interest
35,804
24,614
(11,190)
29,289
Other
4,949
4,949
27,071
TOTAL REVENUES
2,277,009
2,504,489
227,480
2,376,751
EXPENDITURES:
Current:
General governmental
-
-
-
-
Physical environment
-
-
-
-
Transportation
3,859,384
3,546,293
313,091
3,199,898
Economic environment
-
-
-
-
TOTAL EXPENDITURES
3,859,384
3,546,293
313,091
3,199,898
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
(1,582,375)
(1,041,804)
540,571
(823,147)
OTHER FINANCING SOURCES (USES):
Proceeds of long-term debt
-
Operating transfers in
1,416,292
872,692
(543,600)
1,101,827
Operating transfers out
-
-
TOTAL OTHER FINANCING SOURCES (USES)
1,416,292
872,692
(543,600)
1,101,827
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(166,083)
(169,112)
(3,029)
278,680
FUND BALANCES AT BEGINNING OF YEAR
275,926
275,926
-
-
Residual equity transfers out
(9,843)
(6,814)
3,029
(2,754)
FUND BALANCES AT END OF YEAR
$ 100,000
$ 100,000
$
$ 275,926
Page 1 of 5
City of Federal Way / 61
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
Arterial Street Fund
Variance
Favorable
2001
Budget
Actual
(Unfavorable)
Actual
547,250
562,420
15,170
556,619
-
39,560
39,560
-
30,000
24,045
(5,955)
42,865
577.250
626,025
48.775
599,484
2,299,478
1,657,409
642,069
1,354,285
2,299,478
1,657,409
642,069
1,354,285
(1,722,228)
(1,031,384)
690,844
(754,801)
1,007,004
1,007,004
987,259
1,007,004
1,007,004
987,259
(715,224)
(24,380)
690,844
232,458
719,952
719,952
-
487,494
$ 4,728
$ 695,572
$ 690,844
$ 719,952
Utility Tax Fund
Variance
Favorable
2001
Budget
Actual (Unfavorable)
Actual
$ 6,226,974
$ 6,104,506 $ (122,468)
$ 6,098,360
250,000
83,531 (166,469)
117,909
6,476,974
6,188,037 (288,937)
6,216,269
50,000
50,000
50,000
50,000
50,000
50,000
6,426,974
6,138,037
(288,937) 6,166,269
(4,435,844) (4,435,844) (4,402,950)
(4,435,844) (4.435.844) (4,402,950)
1,991,130 1,702,193 (288,937) 1,763,319
6,170,755 6,170,755 4,407,436
$ 8,161,885 $ 7,872,948 $ (288,937) $ 6,170,755
Page 2 of 5
City of Federal Way / 62
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
REVENUES:
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Miscellaneous:
Interest
Other
TOTAL REVENUES
EXPENDITURES:
Current:
General governmental
Physical environment
Transportation
Economic environment
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Proceeds of long-term debt
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
Solid Waste/Recycling Fund
Variance
Favorable 2001
Budget Actual (Unfavorable) Actual
151,235
99,583
(51,652)
123,165
155,308
162,000
6,692
148,718
6,772
2,704
(4,068)
5,807
313,315
264,287
(49,028)
277,690
373,998 300,614 73,384 353,623
373,998 300,614 73,384 353,623
(60,683) (36,327) 24,356 (75,933)
(60,683) (36,327) 24,356 (75,933)
199,344 199,344 - 275,459
(304) (121) 183 (182)
$ 138,357 $ 162,896 $ 24,539 $ 199,344
Page 3 of 5
City of Federal Way / 63
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
Hotel/Motel Lodging Tax
Variance
Favorable 2001
Budget Actual (Unfavorable) Actual
$ 120,000 $ 134,369 $ 14,369 $ 136,046
2,931 2,931 4,035
29 29 -
120,000 137.329 17,329 140,081
211,187
105,759
105.428
48,016
211,187
105,759
105,428
48.016
(91,187)
31,570
122,757
92,065
(91,187) 31,570 122,757 92,065
150,549 150,549 - 58,484
$ 59,362 $ 182,119 $ 122,757 $ 150,549
Paths and Trails Reserve Fund
Variance
Favorable 2001
Budget Actual (Unfavorable) Actual
8,500 8,871 371 8,072
500 858 358 1,377
9,000 9,729 729 9,449
9,000 9,729 729
9,449
9,000 9,729 729 9,449
41,863 41,863 - 32,414
$ 50,863 $ 51,592 $ 729 $ 41,863
Page 4 of 5
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, 2002
With Comparative Totals for December 31, 2001
Variance
Favorable
2001
Budget
Actual
(Unfavorable)
Actual
REVENUES:
-
Taxes
$ 6,346,974
$ 6,238,875
$ (108,099)
$ 6,234,406
Licenses and permits
102,755
68,908
(33,847)
74,754
Intergovernmental
2,666,988
2,782,064
115,076
2,610,502
Service charges and fees
333,755
496,388
162,633
471,709
Miscellaneous:
Interest
323,076
138,683
(184,393)
233,706
Other
4,978
4,978
27,071
TOTAL REVENUES
9,773,548
9,729,896
(43,652)
9,652,148
EXPENDITURES:
Current:
General governmental
50,000
50,000
-
50,000
Physical environment
373,998
300,614
73,384
353,623
Transportation
6,158,862
5,203,702
955,160
4,554,183
Economic environment
211,187
105,759
105,428
48,016
TOTAL EXPENDITURES
6,794,047
5,660,075
1,133,972
5,005,822
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
2,979,501
4,069,821
1,090,320
4,646,326
OTHER FINANCING SOURCES (USES):
Proceeds of long-term debt
-
-
-
-
Operating transfers in
2,423,296
1,879,696
(543,600)
2,089,086
Operating transfers out
(4,435,844)
(4,435,844)
-
(6,563,668)
TOTAL OTHER FINANCING SOURCES (USES)
(2,012,548)
(2,556,148)
(543,600)
(4,474,582)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
966,953
1,513,673
546,720
171,744
FUND BALANCES AT BEGINNING OF YEAR
7,558,389
7,558,389 -
7,389,581
Residual equity transfers out
(10,147)
(6,935) 3,212
(2,936)
FUND BALANCES AT END OF YEAR
$ 8,515,195
$ 9,065,127 $ 549,932
7,558,389
Page 5 of 5
Debt Service Fund The Debt Service Fund accounts for the accumulation of resources for
the payment of general obligation and special assessment bond
principal, interest and related costs.
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 other revenues designated by the City Council.
City of Federal Way / 66
DEBT SERVICE FUND
COMPARATIVE BALANCE SHEET
December 31, 2002 and 2001
2002
ASSETS
Equity in pooled cash and investments $
5,886,617
Receivables (net):
Interest
4,462
Due from other governments
37,100
TOTAL ASSETS
5,928,179
LIABILITIES AND FUND BALANCE
Liabilities:
Vouchers payable
-
Deferred revenue
349,050
TOTAL LIABILITIES
349.050
Fund balance:
Reserved for debt service
5,579,129
TOTAL FUND BALANCE
5,579,129
TOTAL LIABILITIES AND FUND BALANCE $
5,928,179
2001
$ 6,491,454
2,243
382,740
6,876,437
63
368,250
368,313
6.508.124
6,508,124
$ 6,876,437
City of Federal Way / 67
REVENUES:
Taxes
Miscellaneous:
Interest
Other
DEBT SERVICE FUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
For the Years Ended December 31, 2002 and 2001
2002 2001
$ 2,554,573 $ 1,997,537
128,605 271,008
TOTAL REVENUES
2.683.178
2,268,545
EXPENDITURES:
Debt service:
Principal
2,834,084
2,700,478
Interest, fiscal charges and cash management fees
1,651,197
1,797,614
TOTAL EXPENDITURES
4.485.281
4.498,092
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
(1,802,103)
(2,229,547)
OTHER FINANCING SOURCES (USES):
Operating transfers in
2,957,108
2,950,149
Operating transfers out
(2.084.000)
-
TOTAL OTHER FINANCING SOURCES (USES)
873,108
2,950,149
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(928,995)
720,602
FUND BALANCE AT BEGINNING OF YEAR
6,508,124
5 787,522
FUND BALANCE AT END OF YEAR $
5,579,129 $
6,508,124
City of Federal Way / 68
DEBT SERVICE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
For the Years Ended December 31, 2002 and 2001
Variance
2002
Favorable
2001
Budget
Actual
(Unfavorable)
Actual
REVENUES:
Taxes
$ 1,400,000 $
2,554,573
$ 1,154,573
$ 1,997,537
Miscellaneous:
Interest
355,071
128,605
(226,466)
271,008
TOTAL REVENUES
1,755,071
2.683,178
928,107
2,268,545
EXPENDITURES:
Debt service:
Principal
2,992,486
2,834,084
158,402
2,700,478
Interest, fiscal charges and cash management fees
1,528,306
1,651,197
(122,891)
1,797,614
TOTAL EXPENDITURES
4,520,792
4,485,281
35,511
4,498,092
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES
(2,765,721)
(1,802,103)
963,618
(2,229,547)
OTHER FINANCING SOURCES (USES):
Operating transfers in
2,957,108
2,957,108
-
2,950,149
Operating transfers out
(2,084,000)
(2,084,000)
-
-
TOTAL OTHER FINANCING SOURCES (USES)
873,108
873,108
-
2,950,149
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
(1,892,613)
(928,995)
963,618
720,602
FUND BALANCE AT BEGINNING OF YEAR
6,658,123
6,508,124
(149,999)
5,787,522
FUND BALANCE AT END OF YEAR
$ 4,765,510 $
5,579,129
$ 813,619
$ 6,508,124
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 - 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 - Transportation 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 /70
ASSETS
Equity in pooled cash and investments
Retainage in escrow
Receivables (net):
Accounts and contracts
Interest
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
Liabilities:
Vouchers payable
Retainage payable
Retainage payable - with escrow agent
TOTAL LIABILITIES
CAPITAL PROJECT FUNDS
COMBINING BALANCE SHEET
December 31, 2001
With Comparative Totals for December 31, 2000
City Totals
Facilities Parks Traffic Transportation 2002 2001
$ 8,514,522 $ 686,918 $ 238,316 $ 5,409,663 $ 14,849,419 $ 16,738,471
148,426
- - 197,568 197,568 35,924
7,031 548 4,739 12,318 5,988
2,907,372 2,807,372 897,148
8,521,553 687,466 238,316 8,419,342 17.866.677 17,825,957
29,081 5,054 66,785 478,097 579,017 403,416
- 464 19,836 20,300 11,299
- 148,426
29,081 5,518 86,621 478,097 599,317 563,141
Fund Balance:
Unreserved-andesignated 81492,472 681,948 151,695 7,941,245 17,267,360 17,262,816
TOTAL FUND BALANCES 8,492,472 681,948 151,695 7,941,245 17,267,360 17,262,816
TOTAL LIABILITIES AND FUND BALANCES $ 8,521,553 $ 687,466 $ 238,316 $ 8,419,342 17,866,677 $ 17,825,957
City of Federal Way/71
CAPITAL PROJECT FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
REVENUES:
Intergovernmental
Development Contribution/Donation
Miscellaneous:
Interest
Other
TOTAL REVENUES
EXPENDITURES:
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Proceeds from sale of fixed assets
Operating transfers in
Operating transfers out
TOTAL OTHER FINANCING SOURCES (USES)
EXCESS (DEFICIENCY) OF REVENUES AND
OTHER AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES
FUND BALANCES AT BEGINNING OF YEAR
FUND BALANCES AT END OF YEAR
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
City
Totals
Facilities
Parks
Traffic
Transportation
2002
2001
$
$
$
$ 7,974,960 $
7,974,960
$ 4,344,202
117,324
1,574,528
1,691,852
890,162
161,193
13,864
4,371
153,178
332,606
630,617
161,193
131,188
4,371
9,702,666
9,999,418
5.864.981
194,032
308,566
507,162
11,227,114
12.236.874
7,697,663
194,032
308,566
507,162
11,227,114
12,236,874
7.697.663
(32,839)
(177,378)
(502,791)
(1,524,448)
(2,237,456)
(1,832,681)
_
-
-
325,000
750,000
155,000
355,481
1,355,000
2,615,481
254,046
(101,279)
(272,202)
(373.481)
(90,725)
648,721
155,000
355,481
1,082,798
2,242,000
_ 498,321
615,882
(22,378)
(147,310)
(441,650)
4,544
(1,344,360)
7,876,590
704,326
299,005
8,382,895
17,262.816
18,607,176
$ 8,492,472
$
$ 151,695
$ 7,941,245 $
17,267 360
$ 17.262.816
41kCITY 101'::��
OF
Federal Way
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 Surface Water Management Fund was established to The Dumas Bay Centre Fund was established to account
administer and account for all receipts and expenditures for the revenues and expenses related to the acquisition,
related to the City's surface and storm water management capital improvements maintenance and operations of the
system. City -owned Dumas Bay Centre and Knutzen Family Theatre.
City of Federal Way / 74
ENTERPRISE FUND
COMBINING BALANCE SHEET
December 31, 2002
With Comparative Totals for December 31, 2001
Surface Water Dumas Bay Total
Management Centre 2002 2001
ASSETS
Current Assets
Equity in pooled cash and investments
$ 7,339,169
$ 387,313
$ 7,726,482 $
7,889,010
Cash with escrow agent
109,069
-
109,069
109,069
Receivables (net):
Taxes
96,405
-
96,405
101,954
Accounts and contracts
-
32,609
32,609
9,633
Interest
6,178
356
6,534
2,826
Due from other governments
28,239
24,519
52.758
TOTAL CURRENT ASSETS
7,579,060
444,797
8,023,857
8,112,492
Property, plant and equipment:
Land
3,708,654
2,109,640
5,818,294
5,818,294
Building/structures
40,796,027
3,571,152
44,367,179
38,775,690
Office furniture/equipment
105,033
105,033
110,705
44,504,681
5,785,825
50,290,506
44,704,689
Less accumulated depreciation
(8,380,960)
(1,060,006)
(9,440,966)
(8,903,506)
Net property, plant and equipment
36,123,721
4,725,819
40,849,540
35,801,183
Construction work in progress
726,143
167,742
893,885
5,597,907
TOTAL ASSETS
$ 44,428,924
5 5,338,358
$ 49,767,282 $
49,511,582
LIABILITIES AND FUND EQUITY
Current liabilities:
Vouchers payable
$ 235,043
$ 65,421
$ 300,464 $
168,392
Taxes payable
1,136
1,136
-
Retainage payable
3,428
-
3,428
-
Retainage payable - with escrow agent
109,069
-
109,069
109,069
Deposits payable
-
9,864
9,864
9,275
Deferred revenue
81,193
96,882
178,075
248,461
Public works trust fund loan payable
182,359
-
182,359
216,503
Compensated absences payable
28,108
9,737
37,845
30,283
TOTAL CURRENT LIABILITIES
639,200
183,040
822,240
781,983
Long-term liabilities:
Public works trust fund loan payable
2,486.549
-
2,486,549
3,249,347
TOTAL LONG-TERM LIABILTIES
2,486,549
-
2,486,549
3,249,347
TOTAL LIABILITIES
3,125,749
183,040
3,308,789
4,031,330
Fund equity:
Contributed capital
32,523,228
1,639,154
34,162,382
34,295,586
Retained Earnings:
Unreserved
8,779,947
3,516,164
12,296,111
11,184,666
Retained earnings
8,779,947
3,516,164
12,296,111
11,184,666
FUND EQUITY
41,303,175
5,155,318
46,458,493
45,480,252
TOTAL LIABILITIES AND FUND EQUITY
$ 44,428,924
$ 5,338,358
$ 49,767,282 $
49,511 582
City of Federal Way / 75
ENTERPRISE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND EQUITY
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
OPERATING REVENUES:
Intergovernmental
Service charges and fees
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personal services
Materials and supplies
Services and charges
Intergovernmental
Depreciation
Interfund charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES)
Subsidy from interlocal grants
Interest income
Interest expense
TOTAL NON -OPERATING REVENUES (EXPENSES)
INCOME (LOSS) BEFORE OPERATING TRANSFERS
Operating transfers in
NET INCOME (LOSS)
Depreciation reducing contributed capital
Increase in retained earnings
RETAINED EARNINGS, January 1
Residual equity transfers out
RETAINED EARNINGS, December 31
CONTRIBUTED CAPITAL, January 1
Increases to contributed capital
Less amortization
CONTRIBUTED CAPITAL, December 31
FUND EQUITY AT END OF YEAR
Surface Water
Dumas Bay
Totals
Management
Centre
2002
2001
$ 35,823
$ -
$ 35,823 $
-
3,128,160
574,620
3,702,780
3,656,577
202
15,243
15.445
11,309
3,164,185
589,863
3,754,048
3,667,886
1,035,240
222,853
1,258,093
1,085,336
65,615
17,262
82,877
99,576
554,018
432,478
986,496
717,978
95,809
2,354
98,163
100,957
352,616
184,844
537,460
537,309
478,489
48.268
526,757
506,654
2,581,787
908,059
3,489,846
3,047,810
582,398
(318,196)
264,202
620,076
-
24,519
24,519
-
164,567
10,493
175,060
293,681
(33,651)
-
(33,651)
(34,360)
130,916
35,012
165,928
259.321
713,314
(283,184)
430,130
879,397
-
151,000
151,000
408,000
713,314
(132,184)
581,130
1,287,397
352,332
1842844
537,176
537,309
1,065,646
52,660
1,118,306
1,824,706
7,720,856
3,463,809
11,184,665
9,386,581
(6,555)
(3
(6,860)
(26,621)
8,779,947
3,516,164
12,296,111
11,184,666
32,471,588
1,823,998
34,295,586
34,832,895
403,972
-
403,972
-
352,332
_ (184,844_
(537.176)
(537,309)
32,523,228
1,639,154
34,162,382
34,295,586
$ 41,303,175
$ 5,155,318
$ 46,458,493
$ 45,480,252
City of Federal Way / 76
ENTERPRISE FUND
COMBINING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
Surface Water Dumas Bay Totals
Management Centre 2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users $
3,091,455
$ 526,941 $
3,618,396 $
4,141,126
Cash received from other governments for goods and services
7,585
-
7,585
-
Cash payments for taxes
-
1,136
1,136
Cash payments to suppliers for goods/services
(65,616)
(17,262)
(82,878)
(99,576)
Cash payments to employees
(1,028,315)
(222,216)
(1,250,531)
(1,082,634)
Cash payments to other funds for goods and services
(478,489)
(48,268)
(526,757)
(506,654)
Cash payments for other servicestcharges
(425,371)
(429,051)
(854,422)
(763,495)
Cash payments to other governments for goods and services
(95,809)
(2,354)
(98,163)
(100,957)
Cash payments for damage deposits
-
589
589
(1,772)
Other operating receipts
202
15,243
15.445
11,309
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
1.005.642
T 175.242)
830.400
1,597,347
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating transfers in
151,000
151,000
408,000
NET CASH PROVIDED BY NONCAPITAL FINANCING
151.000
151,000
408,000
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Principal paid on debt service
(796,942)
(796,942)
(216,503)
Interest paid on debt service
(33,651)
(33,651)
(34,360)
Acquisition of capital asset/construction work in progress
(310,083)
(167,742)
(477,825)
(486,144)
Cash contributions for capital acquisition
(6,555)
(305)
(6,860)
NET CASH USED FOR CAPITAL
AND CAPITAL -RELATED FINANCING ACTIVITIES
(1,147,231)
(168,047)
(1,315,278)
(737,007)
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
161,019
10 331
171,350
362,907
NET CASH PROVIDED BY INVESTING ACTMTES
161,019
10,331
171,350
362,907
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
19,430
(181,958)
(162,528)
1,604,627
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
7,428,808
569,271
7.998,079
6.393.452
CASH AND CASH EQUIVALENTS AT END OF YEAR
7,448,238
387,313
7,835,551
7,998,079
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income to
net cash provided (used) by operating activities:
Depreciation expense
(Increase)/decrease in accounts receivable
(Increase)/decrease in taxes receivable
(Increase)/decrease in due from other governments
Increase/(decrease)in vouchers/accounts payable
Increase/(decrease) in retainage payable
Increase/(decrease)in deposits payable
Increase/(decrease) in taxes payable
Increase/(decrease) in deferred revenue
Increase/(decrease) in accrued payroll/compensated absences payable
TOTAL ADJUSTMENTS
NET CASH PROVIDED (USED) BY OPEiIAIING ACTIVITIES
582,398
(318,196)
264,202
620,076
352,616
184,844
537,460
537,309
-
(22,976)
(22,976)
477,678
5,548
5,548
(7,413)
(28,237)
-
(28,237)
128,647
3,427
132,074
(45,517)
3,428
-
3,428
(3,730)
-
589
589
(1,772)
1,136
1,136
(45,683)
(24,703)
(70,386)
18,014
6,925
637
7,562
2,702
423,244
142,954
566,198
977,271
$ 1,005,642
$ (175,242) $
830,400 $
1,597.347
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 equipment/software 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.
City of Federal Way / 78
INTERNAL SERVICE FUNDS
COMBINING BALANCE SHEET
December 31, 2002
With Comparative Totals for December 31, 2001
Risk
Information
Support
Fleet and
Buildings and
Totals
Management
Systems
Services
Equipment
Furnishings
2002
2001
ASSETS
Current Assets:
Equity in pooled cash and investments
$ 4,082,756
$ 2,068,595
$ 150,522
$ 2,153,605
S 833,616
$ 9,289,094 $
8,785,931
Prepaid postage
-
5,000
-
-
5,000
5,000
Receivables (net):
Interest
3,432
1,714
141
1,766
728
7,781
3,102
Due from other governments
-
15,511
TOTAL CURRENT ASSETS
4,086,188
2,070,309
155,663
2,155,371
834,344
9,301,875
8,809,544
Property, plant and equipment:
Data processing/
Telecommunication equipment
-
4,271,869
-
-
-
4,271,869
3,938,497
Transportation equipment
-
-
2,922,671
-
2,922,671
2,564,541
Heavy equipment
-
-
435,030
-
435,030
435,030
Buildings & furnishings
-
-
-
3,390,909
3,390,909
3,377,773
Other equipment
-
199,174
405,701
603,875
499.797
-
4,271,869
198,174
3,763,402
3,390,909
11,624,353
10,815,638
Less accumulated depreciation
-
(2,8[8,584)
(111,218)
(2,071,735)
(1,968,101)
(6,90.638)
(6,141.690)
Net property, plant
and equipment
1,453,285
86,955
1,69i,667
1,422,808
4,6$4,715
4,673,949 _
TOTAL ASSETS
4,086,188
3,523,594
242,618
3,847,038
2,257,152
13,956,5$9
13,483,492
LIABILITIES AND FUND EQUITY
Current liabilities:
Vouchers payable
28,636
44,846
15,135
35,260
24,710
148,588
138,290
Certificates of participation payable
-
-
-
-
-
-
285,000
Compensated absences payable
62,491
193
-
62,684
57,495
TOTAL CURRENT LIABILITIES
28,636
107,337
15,135
35,453
24,710
211,272
480,785
TOTAL LIABILITIES
28,636
107337
15,135
35,453_
24,710
211,272
480,785
Fund Equity:
Contributed capital
-
646,843
16,564
439,111
262,307
1,364,825
1,751,763
Retained Earnings:
Unreserved
4,057,551
2,769,413
210,919
3,372,474
1,970,135
12,380,492
11,250,944
Retained Earnings
4,057,551
2,769,413
210,919
3,372,474
1,970,135
12,380,492
11,250,944
TOTAL FUND EQUITY
4,057,551
3,416,256
227,483
3,811,585
2,232,442
13,745,317
13,002,707
TOTAL LIABILITIES AND FUND EQUITY
$ 4,086,188
$ 3,523,594
S 242,618
$ 3,847,038
$ 2,257,152
$ 13,956,589
$ 13.413,492
City of Federal Way /79
OPERATING REVENUES:
Service charges and fees
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personal services
Materials and supplies
Services and charges
Intergovernmental
Insurance
Claims
Depreciation
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES)
Interest income
Interest expense
Gains/losses from disposal of fixed assets
TOTAL NON -OPERATING
REVENUES NET OF EXPENSES
INCOME (LOSS) BEFORE
OPERATING TRANSFERS
Operating transfers in
NET INCOME (LOSS)
Add depreciation reducing contributed capital
Increase in Retained Earnings
RETAINED EARNINGS, January 1
RETAINED EARNINGS, December 31
CONTRIBUTED CAPITAL, January 1
Increases to contributed capital
Decreases to contributed capital
Less amortization
CONTRIBUTED CAPITAL, December 31
FUND EQUITY AT END OF YEAR
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND EQUITY
For the Year Ended December 31, 2002
With Comparative Totals for December 31, 2001
Risk
Information
Support
Fleet and
Buildings and
Totals
Management
Systems
Services
Equipment
Furnishings2002
2001
S 745,507
$ 1,466,105
$ 180,032
$ 959,913
$ 360,350
S 3,711,906 S
3,698,693
2,640
-
2,640
537
745,507
1,469,745
180,032
959,913
360,350
3,714,546
3,699,230
-
588,027
-
33,302
26,267
647,597
585,981
1,227
57,250
20,011
192,287
13,254
284,028
274,186
303,060
376,871
130,447
190,725
266,720
1,267,824
1,147,244
69,905
-
128
1,467
71,500
58,711
277,394
-
-
50,578
-
327,972
299,978
51,478
-
-
-
51,478
67,700
455,575
1,701
282,353
180,072
919.701
1,060,847
633,159
1,547,628
152,160
749,373
487,780
3,570,100
3,493,647
112,348
(78,883)
27,873
210,540
(127,431)
144,446
205,583
75,476
33,953
3,258
32,878
20,017
165,583
251,076
-
-
-
-
(15,533)
(15,533)
(29,978)
31,850
3L850
36,488
75,476
33,953
3,258
64,728
4,485
181,901
257,586
187,824
(44,930)
31,131
275,268
(122,946)
326,347
463,169
2.028.294
187,824
(44,930)
31,131
275,268
(122,946)
326,347
2,491,463
455,575
1,701
282,353
63,572
803,201
944,347
187,824
410,645
32,832
557,621
(59,374)
1,129,548
3,435,810
3,869,727
2,358,768
178,087
2,814,853
2,029,509
11,250,944
7,815,134
4,057,551
2,769,413
210,919
3,372,474
1,970.135
12,380,492
11,250,944
-
899,479
7,433
532,109
312,743
1,751,763
2,290,885
204,134
10,832
212,127
13,136
440,229
413,272
(1,194)
(22,772)
-
(23,966)
(8,047)
(455,575)
(1,701)
(282,353)
(63,572)
(803,201)
(944.347)
646,843
16,564
439,111
262,307
1,364,825
1,751,763
$ 4,057,551
S 3,416,256
$ 227,493
$ 3,811,585
$ 2,232,442
S 13,745,317 S
13,002,707
City of Federal Way / 80
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 goods and services
Other operating receipts
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:
Operating transfers in
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 and fiscal charges 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 EQUIVALENTS 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 due from other govts
Incresse(decrease) in voucherstaccounts payable
increase(decrease) compensated absences payable
TOTAL ADJUSTMENTS
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
SCHEDULE OF NONCASH INVESTING,
CAPITAL AND FINANCING ACTIVITIES:
Other Contributions of capital assets
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH
FLOWS
For the Year Ended December 31. 2002
With Comparative Totals for December 31, 2001
Risk
Information Support
Fleet and
Buildings and
Totals
Management
Systems Services
Equipment
Furnishings
2002
2001
$ 761,019
$ 1,466,105 $ 180,032
$ 959,913
S 360,350
$ 3,727,417 $
3,683,182
(571,806)
(506,824) (151,101)
(373,788)
(286,930)
(1,890,449)
(1,669,783)
•
(583,031)
(33,109)
(26,267)
(642,408)
(575,709)
(51,478)
- -
-
(51,478)
(67,700)
-
- -
(50,578)
(50,578)
(66,847)
2,640
2.640
537
137,734
378,89D 28,931
502,438
47,152
1,095,145
1,303,680
2,028,294
2,028,294
(224,018) (85.254) (491,478) (13,136) (813,885) (885,895)
93,586 10,832 212,127 13,136 329,681 248,313
31,850 31,850 36,488
- (285,000) (285,000) (270,000)
(15,533) (15,533) (29,978)
(130.432) (74,421) (247,501) (300,533) (752,887) (901,072)
73,426
32,869
3,189
31,745
19,675
160,905
314,494
73,426
32,869
3,189
31,745
19,675
160,905
314,494
211.161
281,327
(42.301)
286,682
(233,706)
503,163
2,745,396
3,871,595
1,787,269
192,823
1,866,923
1,067,322
8,785,931
6,040,535
4,092,756
2,068,595
150,522
2,153,605
833,616
9,269,094
8,785,931
112,348
(78,883)
27.873
210.540
(127,431)
144,446
205.583
-
455,575
1,701
282.353
180,072
919,701
1,060,847
15,511
-
-
-
-
15,511
(15,511)
9,875
(2,798)
(643)
9,352
(5,489)
10,297
42,489
4,996
193
5,189
10,272
25,386
457,773
1,059
291,898
174,583
950,699
1,098,097
S 137,734
S 378,890
S 28,931
S 502,438
S 47,152
S 1,095,145
S 1,303,680
•
$ 110,548
S -
3
S -
$ 110,548
$ 127.877
General Fixed Assets The General Fixed Assets Account Group accounts for all fixed assets of the City other than
Account Group those recorded in the Internal Service and Enterprise funds. General frayed assets are reported
in this account group since they do not represent financial resources available for
appropriation in the governmental funds which acquire them.
City of Federal Way / 82
COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS
BY SOURCE
December 31, 2002 and 2001
GENERAL FIXED ASSETS
Investment in joint venture
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
Capital lease
TOTAL INVESTMENT IN GENERAL FIXED ASSETS
2002 2001
$ 2,537,955
$ 1,971,762
34,709,316
30,628,680
1,724,241
1,724,241
16,175,414
15,121,584
1,634,000
1,634,000
1,993,254
2,747,211
58,774,180
53,827,478
2,655,858 2,638,071
28,461,806 28,461,806
8,879,221 4,540,390
3,894,125 3,870,234
9,719,802 9,719,802
1,450,000 1,450,000
2,865,830 2,299,637
663,538 663,538
184,0W 184,000
$ 58,774,180 $ 53,827,478
Note: Excludes all non -enterprise public domain assets such as streets, sidewalks, gutters, bridges, and lighting systems.
Function/Activity
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
SECURITY OF PERSONS & PROPERTY
CULTURE AND RECREATION
TOTAL GENERAL FIXED
ASSETS BY FUNCTION
CONSTRUCTION IN PROGRESS
TOTAL GENERAL FIXED ASSETS
City of Federal Way / 83
SCHEDULE OF GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
December 31, 2002
Joint Other Machinery
Total Venture Land Buildings Improvements & Equipment
$ 6,476,853 $ $6,272,880 $ $ 19,973 $ 184,000
6,476,853 6,272,880 19,973 184,000
2,537,955 2,537,955 - - -
47,766,118 - 29,886,436 1,724,241 16,155,441
56,780,926 2,537,955 36,159,316 1,724,241 16,175,414 184,000
1,993,254
$ 58,774,180
Note: Excludes all non -enterprise public domain assets such as streets, sidewalks, gutters, bridges, and lighting systems.
City of Federal Way / 84
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2002
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
SECURITY OF PERSONS & PROPERTY
CULTURE AND RECREATION
CONSTRUCTION IN PROGRESS
TOTAL GENERAL FIXED ASSETS
General
General
Fixed Assets
Fixed Assets
O1/01/2002
Additions Deductions
12/31/2002
$ 2,396,217
$ 4,080,636 $
$ 6,476,853
2,396,217
4,080,636
6,476,853
1,971,762
566,193
2,537,955
46,712,288
1,053,830
47,766,118
2,747,211
270,218 1,024,175
1,993,254
$ 53,827,478
$ 5,970,877 $ 1,024,175
$ 58,774,180
Note: Excludes all non -enterprise public domain assets such as streets, sidewalks, gutters, bridges, and lighting systems.
Statistical Section The Statistical Section provides information for the "Last Ten Fiscal Years ". 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 / 86
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PRINCIPAL TAXPAYERS
December 31, 2002
Table 13
Percentage
2002
of Total
Assessed
Assessed
Taxpnyer
l'yyeof 11nsiness
yalualiun
_Valuation i.4)
Weyerhaeuser Real Estate Co.
ItC;lI Estate
$ 178,382,643
3.02%
Puget Sound Energy
Electric/Gas
52,504,721
0.89%
U.S. West
Communications/Telephone
43,048,741
0.73%
Newman Properties (Sea Tac Mall)
Shopping Center
40,778,400
0.69%
Harsch Investment Properties /Ross Plaza
Shopping Center
30,403,100
0.51%
Gateway Center Retail
Shopping Center
28,853,700
0.49%
Quadrant Corporation
Real Estate Management
20,135,300
0.34%
Fred Meyer
Retailer/Wholesaler
17,118,763
0.29%
Red Mortgage Capital Inc
Finance
16,896,000
0.29%
BRE Properties
Real Estate Management
16,141,000
0.27%
Costco
Retailer/Wholesaler
15,340,924
0.26%
Virginia Mason Clinic
Medical Services
14,399,353
0.24%
Campus Business Parks LLC
Real Estate Investment/Holding
13,282,300
0.22%
$ 487,284,945
9.24%
PRINCIPAL EMPLOYERS
December 31, 2002
Number of
Tux n er
TypeofBusiness
Employees
FEDERAL WAY SCHOOL DIST
Education
2,885
WEYERHAEUSER COMPANY
Lumber Products
1,258
ST FRANCIS HOSPITAL
Medical Services
744
ENCHANTED PARKS
Amusement Center
734
WORLD VISION
Christian Relief Agency
663
US POST OFFICE / FEDERAL WAY
Postal Service
572
CITY OF FEDERAL WAY
Miscellaneous Services
440
COSTCO WHOLESALE CORPORATION
Wholesale
251
THE BON MARCHE
Retail
240
VIRGINIA MASON FEDERAL WAY
Medical Services
235
WAL-MART
Retail
225
ALBERTSON'S
Retail Grocery
220
BEVERLY HEALTHCARE & REHAB, FEDERAL WAY
Medical Services
220
FRED MEYER
Retail
214
SEARS, ROEBUCK & CO.
Retail
205
THE HOME DEPOT
Retail
202
PARAMETRIX INC
Miscellaneous Services
200
PRUDENTIAL NW REALTY ASSOC
Real Estate
200
Spherion
Miscellaneous Services
200
WINCO FOODS
Retail Grocery
200
ROCCO GAMING, INC
Casino
175
UNICCO SERVICE COMPANY
Miscellaneous Services
161
LIFE CARE CENTER OF FEDERAL WAY
Nursing Facility
160
CAPITAL ONE SERVICES INC
Financial Institution
150
PJ POCKETS CASINO
Casino
133
TESORO REFINING AND MARKETING CO
Miscellaneous Services
133
SAFEWAY
Retail Grocery
131
HALLMARK MANOR
Retail
130
TARGET
Retail
130
LOWE'S HOME IMPROVEMENT WAREHOUSE
Retail
129
FEDERAL WAY FIRE DEPARTMENT
Social Service
128
BROOKLAKE COMMUNITY CHURCH
Miscellaneous Services
122
BERGER/ABAM ENGINEERS
Miscellaneous Services
116
TOP FOODS & DRUG
Retail Grocery
109
RED ROBIN
Restaurant
105
LAKEHAVEN UTILITY DISTRICT
Utility
104
BEST BUY
Retail
100
PLAYERS CASINO SPORTS BAR/GRILL
Casino
100
(A) 2001 assessed valuations for taxes collected in 2002. Total 2001 assessed valuation for the City is $5,912,362,755.
Source: King County Assessor - Principal Taxpayers.
City of Federal Way Business Licenses - Principal Employers - includes both full-time and part-time employees.
City of Federal Way / 99
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City of Federal Way / 102
MISCELLANEOUS STATISTICAL INFORMATION
DECEMBER 31, 2002
TYPE OF GOVERNMENT
Council - City Manager
ORGANIZATION STRUCTURE
Legislative Executive Administrative
Mayor 1 City Manager 6 Department Directors
6 Councilmembers 2 Assistant City Managers
CORPORATE INFORMATION
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 Municpal Code of the Revised Code of Washington. Optional Code City
status increases the City's operating authority by extending it to the powers of all four city classifications which exist in
Washington law.
LOCATION AND AREA
Federal Way, the eighth largest city in the State of Washington, encompasses an area of 21.5 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 in neighboring cities such as SeaTac, Kent, Tacoma, Bellevue and
Seattle. The City has approximately 32,912 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 83,850, of which 41,989 are registered voters. A total of 29,135 (est.) people are
employed within the City limits.
NUMBER OF CITY EMPLOYEES
During the year 2002, the City employed 295 full-time salaried, 20 part-time hourly, and 163 temporary employees. There were
109 commissioned police officers and no uniformed firefighters. The Teamsters Union #763 represented 15 employees (Public
Works Maintenance and Parks Maintenance), 34 employees were represented by the PSSA (Police Support Services Association),
and the Police Guild represented 82 Police Officers during 2002.
RECREATIONAL FACILITIES
28 Developed park sites covering 493.5 acres
20 Undeveloped park sites covering 352 acres (including open space)
19 Public tennis courts, 9 which are owned by the City.
2 Public swimming pools, both which are owned by King County
2 Trails covering 4 miles
OTHER CITY OWNED FACILITIES
1 City Hall
1 Parks Maintenance Facility
1 Dumas Bay Centre
1 Klahanee Community/Senior Center
PUBLIC EDUCATION
ENROLLMENT COUNT
Table 16
1995
1996
1997
1998
1999
2000
2001
2002
23 Elementary Schools
11,524
11,699
11,930
12,248
12,258
12,242
11,498
11,99()
7 Jr. High Schools (incl. Public Academy)
4,701
4,838
4,979
4,956
4,994
5,013
5,331
5,509
4 High Schools
3,730
3,904
4,103
4,116
4,529
4,557
4,415
4,316
2 Alternative Schools (incl. Internet Academy)
376
302
466
545
626
477
672
379
20,331 20,733 21,478 21,865 22,407 22,289 21,916 22,194
1,415 Certified full-time equivalency teachers and administrative staff.
City of Federal Way / 103
Table 16
MISCELLANEOUS STATISTICAL INFORMATION
DECEMBER 31, 2002
(Continued)
MILES OF STREET
Streets (Center Line Miles)...............................................256.86 miles
SIGNALS/STREET LIGHTS
City -owned traffic signals maintained by:
Department of Transportation .............................. 4
KingCounty .................................................... 67
Street lights owned by City of Federal Way............ 810
Street lights owned by Puget Power ....................... 2850
LOCAL TAXES ON BUSINESSES
Franchise Tax - Cable TV ................................. 5.00%
Gambling Taxes:
Bingo/Raffles................ °
Amusement/Games .............................. 2.00%
Punchboar/Pull Tabs... ......................... 5.00%
Cardrooms........................................ 20.00%
Local Sales Tax (Collected by the State) ................ 8.80%
POLICE INFORMATION
]92�
1225
122I
122$
12?2
2444
2441
2442
Offenses: Forcible Rape (including attempts)
71
73
37
58
53
43
49
34
Robbery
173
188
154
153
115
128
124
108
Criminal Homicide
3
3
2
2
4
7
4
4
Aggravated Assault
167
171
121
159
167
158
141
120
Vehicle Theft
843
807
746
761
808
849
1179
1206
Burglary (commercial & residential)
881
965
643
648
573
533
521
677
Larceny
4300
4086
3901
3393
3097
3072
3516
3347
Arson
38
35
24
39
38
36
17
29
Citations: Traffic
14,258
8,660
11,196
13,382
10,890
13,340
12,767
13,439
FIRE AND EMERGENCY MEDICAL RESPONSE INFORMATION
Fire and Emergency Medical Response information reflects the greater Federal
Way area, which is served by Fire District #39.
122,i
im
Ml
1922
2444
?�41
1�2
Fire and Other Responses
1,902
2,018
1,985
2,357
2,009
2,278
1,920
3,055
Emergency Medical
5,653
6,007
5,853
6,589
6,870
7,193
7,240
7,422
BUILDING RELATED PERMITS AND VALUES
122g
im
im
172$
im
2M
2991
2442
Building Permits
560
422
576
582
573
447
463
712
Estimated Value (In Millions $)
$60.7
$51.3
$53.3
$81.9
$85.8
$53.8
$69.1
$97.3
Other Building Related Permits
625
656
864
821
1007
1546
1693
2024
Estimated Value (In Millions $)
$2.8
$37.6
$18.5
$27.0
$11.0
$1.5
$2.3
$2.5
TAXABLE SALES (in millions)
1245
im
122$
1922`
2.444
2M
21M
Retail Sales
$942.4
$956.8
$978.9
$1,049.3
$1,137.0
$1,212.1
$1,220
$1,298
Real Estate Sales
$219.0
$305.0
$375.4
$438.8
$487.6
$429.9
$400
503
Federalof Way