2012 Annual Comprehensive Financial Report (12-001)ik,
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City of Federal Way History —
The earliest recorded accounts of the Federal Way area tell of Native American families who resided in the area of the
Muckleshoot Reservation on the east side of the Green River Valley and traveled west to the shores of Puget Sound for the
plentiful fisheries resources. Generations of Muckleshoot Indians wore a westward trail across the heavily forested plateau to the
area which is now Saltwater State Park. The arrival of the white man in the nineteenth century resulted in a steady decline in the
Indian population and by 1890, nearly the entire population had disappeared from the area. Isolated on a triangular shaped plateau
rising steeply from Puget Sound, the Federal Way area had little waterfront access or roadways and accordingly, was sparingly
developed compared to Tacoma and Seattle. As late as the turn of the century, the original settlers at Dash Point and Dumas Bay
had to row to Tacoma for supplies and mail. Old Military Road, constructed around 1856 and extending north from Fort
Steilacoom, past Star Lake to Seattle and Fort Lawton, was the first road through the area.
Over time, narrow dirt roads were added to provide east/west access and by 1900, a road was constructed between Star Lake and
Redondo. The second crossroad, the "Seattle Road," connected old Military Road and Kent. The Seattle -Tacoma Interurban Line,
completed in 1901, provided a fast and easy way to reach these urban cities. Improved access brought many visitors to the area
and Star Lake became a popular summer recreation site.
By the 1920s, Federal Highway 99, the interstate that linked the western states from north to south, was complete. At this time,
Federal Way was still primarily forest and farmland. Fred Hoyt had a cabin on Dumas Bay and started a road to Tacoma (still
called Hoyt Road). The timber companies, which had a major logging operation going, built an early railroad line and were
instrumental in getting Marine View Highway (now Dash Point Road) built in the early 1920s. This roadway spurred
development along the coastline. Soon thereafter, Peasley Canyon Road was built to connect Military Road with the Auburn
Valley. This road later became known as South 320th Street. In these early days, roadways set the stage for development in the
area and they still play an important role in the City today.
By the start of World War II, a number of small, thriving communities made up the area that is now Federal Way. Some
communities were clustered around lakes, such as Steel Lake, Star Lake, and Lake Geneva. Others were sited to take advantage of
the view of Puget Sound, like Adelaide and Buenna. As each of these communities grew, residents built small schoolhouses for
their children. By the late 1940s, King County consolidated the many individual red schoolhouses into the Federal Way School
District, from which the City gets its name. During this same period, a library was built along the edge of Highway 99, and
between 308th Street and 320th Street, a small "downtown" developed with a general store, lumber yard, realty office, beauty
parlor, feed store, and gas station. By the end of the 1950s, the ten blocks between 308th and 320th Streets became the first
roadside commercial district. One of the more unique developments was Santa Faire, a family oriented theme park. New shopping
areas were added around the park, helping to create a "community focus" for the residents of the area.
As this commercial area developed, the rest of Federal Way was changing as well. The Boeing Company expanded their
operations in Renton and the Kent Valley and began advertising nationally for engineers. Those engineers in turn began roaming
the wooded acreage in Federal Way in search of housing. One of the earliest residential developments was Marine Hills, built in
1958 overlooking Puget Sound. Weyerhaeuser, one of the early timber companies, had large land holdings in the area and began
to develop their land into high quality housing with amenities like golf courses.
Weyerhaeuser's development company also began developing commercial property, creating the West Campus business park.
The plan was to integrate offices and businesses with lush landscaping. Though initially the corporate office market was not
strong, West Campus has grown almost to capacity, providing space for many civic buildings such as City Hall, the police station,
the area's major health care centers, and higher density housing.
Another major landmark in the area is SeaTac Mall (now The Commons), built in the mid- 1970s on what was farmland south of
320th Street. The Mall is one of the largest in South King County and is the anchor for retail development in the area. The Mall
was a result of population growth in the region and its location was determined by the 320th Street intersection with Interstate 5.
The Interstate supplanted Highway 99 as the main artery for commuter traffic in the County.
By the mid 1980s, South King County was growing quickly. Retail growth occurred along Highway 99, especially at the 320th
Street intersection. Roads and office space were developed to accommodate the increased growth. Residential growth was also
prominent, following plans developed by King County, with a large number of apartment homes. The changes to the community,
with increased housing and traffic, created a movement for greater self-determination. In 1989, the citizens of this area voted for
incorporation and the City of Federal Way was born, incorporating on February 28, 1990.
CITY of
Federal Way
2012 COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2012
City of Federal Way
33325 8th Avenue South
Federal Way, Washington 98003
(253) 835-2520
www.ciiyoffederalwqy.com
Prepared by the Finance Department
Finance Director
Tho Kraus
4ik
CITY OF '0'::tS:p
Federal Way
It"s all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2012
Table of Contents
Page
INTRODUCTORY SECTION
Letterof Transmittal...................................................................................................................................
City Officials and Administrative Officers...............................................................................................
City Functional Organization Chart ............................................................................................................
GFOA Certificate of Achievement.............................................................................................................
FINANCIAL SECTION
IndependentAuditor's Report .................................................................................................................... 8
Management's Discussion and Analysis.................................................................................................... 11
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position....................................................................................................... 24
Statementof Activities........................................................................................................... 25
Fund Financial Statements:
Balance Sheet — Governmental Funds.................................................................................... 26
Statement of Revenues, Expenditures, and Changes in Fund Balances —
Governmental Funds......................................................................................................... 28
Reconciliation of the Statement of Revenues, Expenditures, and Change
In Fund Balances of Governmental Funds to the Statement of Activities ........................ 30
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
GeneralFund................................................................................................................... 31
StreetFund....................................................................................................................... 32
UtilityTax Fund............................................................................................................... 33
Statement of Net Position — Proprietary Funds................................................................................ 34
Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds ... 35
Statement of Cash Flows — Proprietary Funds........................................................................ 36
Notes to the Basic Financial Statements.......................................................................................... 37
Combining and Individual Fund Statements and Schedules—Nonmajor Governmental Funds:
FundDescription.............................................................................................................................. 71
CombiningBalance Sheet................................................................................................................ 73
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 77
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
ArterialStreet Fund.......................................................................................................... 81
Solid Waste & Recycling Fund........................................................................................ 82
Hotel/Motel Lodging Tax Fund....................................................................................... 83
Federal Way Community Center Fund............................................................................ 84
TrafficSafety Fund.......................................................................................................... 85
Paths& Trails Fund......................................................................................................... 86
Individual Fund Statements and Schedules — Debt Service Fund:
FundDescription.............................................................................................................................. 87
BalanceSheet.................................................................................................................................. 88
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ............. 89
Combining and Individual Fund Statements and Schedules — Internal Service Funds:
FundDescription.............................................................................................................................. 91
Combining Statement of Net Position............................................................................................... 92
Combining Statement of Revenues, Expenses and Changes in Fund Net Position .......................... 93
Combining Statement of Cash Flows................................................................................................ 94
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source................................................................................................... 98
Schedule by Function and Activity .................................................................................................. 99
Schedule of Changes by Function and Activity .............................................................................. 100
STATISTICAL SECTION
NetPosition by Component...................................................................................................................
102
Changesin Net Position.........................................................................................................................
103
Government -wide Revenues by Source and Expenditures by Function ................................................
104
Fund Balances, Governmental Funds....................................................................................................
105
Changes in Fund Balances, Governmental Funds..................................................................................
106
TaxableSales by Category ....................................................................................................................
107
Assessed and Estimated Actual Value of Taxable Property ..................................................................
108
Property Rates and Levies, Direct and Overlapping Governments........................................................
109
PrincipalTaxpayers...............................................................................................................................
110
Property Tax Levies and Collections.....................................................................................................
III
Ratio of Outstanding Debt by Type.......................................................................................................
112
Ratio of General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita..............................................................
113
Computation of Direct and Overlapping Debt.......................................................................................
114
Computation of Limitation of Indebtedness...........................................................................................
115
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures Net of Debt Service Expense ........................
116
DemographicStatistics..........................................................................................................................
117
PrincipalEmployers..............................................................................................................................
118
Property Value, Construction and Bank Deposits..................................................................................
119
CapitalAssets by Function....................................................................................................................
120
Operating Indicators by Function..........................................................................................................
121
City Government Employees Full -Time Equivalent - History ...............................................................
122
Salaries & Surety Bonds of Principal Officials......................................................................................
123
Miscellaneous Statistical Information....................................................................................................
124
ii
City of Federal Way 2012 CAFR
Letter of Transmittal
Ak
CITY OF
Federal Way
June 26, 2013
People of the City of Federal Way
Honorable Mayor and City Council
THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF FEDERAL WAY
The Comprehensive Annual Financial Report (CAFR) of the City of Federal Way for the year ended December 31, 2012 is
hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation,
including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data are accurate in all
material respects and are reported in a manner designed to present fairly the financial position and results of operations of the
various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial
activities have been included.
This transmittal letter is designed to compliment the MD&A and should be read in conjunction with it. The City's MD&A can
be found immediately following the Independent Auditor's Report.
REPORTING ENTITY
The City is a noncharter Optional Code City with a Mayor -Council form of government. It was incorporated on February 28,
1990, and is governed under the provisions of the Optional Municipal Code of the Revised Code of Washington. Optional
Code City status increases the City's operating authority by extending it to the powers of all four city classifications which
exist in Washington Law.
The City Council consists of seven council members, all of whom are elected at large by citizens of Federal Way to serve four-
year terms. In November 2009, the citizens of Federal Way approved Proposition 1 to change the form of government from a
City Manager -Council run government to an elected Mayor -Council government. Federal Way voters elected former state
representative Skip Priest as Mayor on November 2, 2010.
City services provided include: police protection, construction and maintenance of streets, building inspection, municipal court
services, jail services, planning and zoning, park services, emergency management services, surface water management and
general administration, including finance. Services for a land use hearing examiner are contracted. The City continues to have
ten major departments consisting of the City Council, Mayor's Office; Law; Finance; Human Resources; Information
Technology; Municipal Court, Parks & Public Works; Police; and Community Development. Fire protection and emergency
medical services are provided by South King Fire & Rescue. Lakehaven Utility District delivers water and sewer services.
Metro provides public transportation services. Public housing services are the primary focus of the King County Housing
Authority. The King County Library System engages City residents through its library and reference services. School District
No. 210 offers educational programs for kindergarten through high school students, in addition to vocational training.
ECONOMIC FACTORS AFFECTING FINANCIAL CONDITION
The Great Recession, as agreed upon by most economists ended during 2010. Most economic indicators during 2012 were still
below the pre -Great Recession levels. Consumers have lost more ground since the recession ended; groups hit harder than
average include young people. The housing market saw slight improvements due to rise in personal income and confidence
and decline in mortgage interest rate.
City of Federal Way 2012 CAFR
Letter of Transmittal
During 2012, the economy has continued to recover from the Great Recession but at a slower pace than expected. We saw
slight improvements in the unemployment rate but still well above the pre -Great Recession level. Meanwhile, inflation overall
has been subdued although we have seen price of crude oil fluctuating and farm prices brought on by the summers' drought.
Consumer price inflation, as measured by personal consumption expenditures price index has averaged by exactly 2 percent
since the end of the Great Recession. The stock market, as measured by the Dow Jones Industrial average, S&P 500, and
NASDAQ finished 2012 on a positive note at 7%, 13%, and 16%, respectively.
Nationally, the U.S. Bureau of Economic Analysis (BEA) indicates Gross Domestic Product (GDP) increased at an annualized
rate of 2.2% in 2012 versus an annualized rate of 1.8% in 2011. This increase was anchored by personal consumer spending,
construction, and exports partly offset by decreased spending by federal, state, and local government.
Seattle -Tacoma -Bellevue annual unemployment rated 7.4%, as measured by the Bureau of Labor Statics, and is down from the
peak of 9.7%. During the 2001 recession, it took six years to return to the same number of jobs that had existed before the
recession began. The Puget Sound region was most affected by the 2001 recession which was a combined effort of the
"dot.com" collapse and the 9/11 terror attacks on commercial airplane industry both of which are prominent for the Pacific
Northwest. Projections indicate that the Puget Sound jobs will not return to their prerecession level until the fourth quarter of
2014.
A key difference between the Great Recession of 2007 and the previous recessions is the sharp decline in the housing market.
Housing development and prices grew steadily through the 2000s, fed by low interest rates and the widespread availability of
mortgages to marginally -qualified buyers. Homes in King County tripled its value between 1994 and 2006. During 2012 King
County saw an increase in short sales by 53% versus 12% for 2011. Short sales are an alternative to foreclosure whereas in
foreclosure, the bank takes possession of the home and creates an increase number of unoccupied homes for sale. Bank -owned
property sales accounted for 14% of all sales in King County during 2012, down from 23% in 2011.
ECONOMIC TRENDS
Federal Way is the eleventh largest city, in Washington State with a population of 89,460 as of April 1, 2012. The City is
located on a plateau adjacent to Puget Sound in King County, eight miles north of downtown Tacoma and 25 miles south of
downtown Seattle. The City occupies approximately 22.5 square miles and is served by Interstate 5 and state highways 99 and
509.
In 2012, there were 35,493 housing units in Federal Way, an increase of less than 1% over 2011. Of these units, 56% were
single family homes, 40% multi -family units, and 4% mobile homes and trailers.
The community is residential and commercial, with the populace employed locally and in the neighboring cities such as
SeaTac, Kent, Tacoma, Bellevue, and Seattle. Employment in Federal Way is highly concentrated in retail and services sectors
which respond primarily to the needs of the local market area population. The employment figure for 2012 is estimated at
32,741. Major employers are; Federal Way Public Schools, Xerox Commercial Services, Weyerhaeuser, St. Francis
Community Hospital, World Vision, and U.S. Postal Services.
Sales tax collected in 2012 total $10.5 million, and is below 2011 by $324 thousand. The retail sector of the local economy is
anchored by the following areas; the first is South 348th and Pacific Highway 99 including Wal-Mart Super Center, Wholesale
Sports, Costco, Lowe's Home Improvement Center, and Home Depot. The second is The Commons regional mall including
Target, TJ Max, Best Buy, and many other small businesses adjacent to the area. According to a listing of businesses
registered with the City of Federal Way and sorted by the Standard Industrial Classification, the business economy appears to
be configured as follows: retail trade 54%; services 22%; construction 8%; wholesale trade 4%; information 5%,
manufacturing 1%, and other 6%.
In 2012, new construction assessed value totaled $20.9 million or approximately 0.3% of the City's 2012 assessed
valuation. The total assessed value of property in Federal Way was $7.1 billion, which is approximately 7% lower than the
2011 assessed valuation of $7.7 billion.
Real Estate sales decreased 3% to approximately $304 million in 2012 as compared to $314 million in 2011. A total of 598
building permits and 2,960 other building related permits were issued in 2012. Estimated market value was $58.0 million and
$5.4 million respectively. Significant building permits include: Wild Buffalo Wings, DaVita, Northlake Rim, Wynstone, King
County Library System, and Federal Way Public Schools
City of Federal Way 2012 CAFR
Letter of Transmittal
LONG-TERM PLANNING
The City's fiscal policy requires the City to prepare long-range projections for six years beyond the current budget period. The
projection extends current operations to the future to see if the services are sustainable and the magnitude of, if any, future
financing gaps. This glimpse into the future allows the City to proactively plan and implement corrective measures over time
to avoid sudden drastic changes in service levels or in revenue/tax policies. In addition, the City's fiscal policy requires the
City to balance its ongoing services with ongoing revenues.
MAJOR INITIATIVES AND ACCOMPLISHMENTS
During 2012, the City of Federal Way completed two major transportation infrastructure projects; the first phase of the
Triangle Intersection Improvement Project and the Pacific Highway improvements between S. 304th and Dsh Pt. Road. To date,
Pacific Highway retrofits cost $80 million. Starting with detailed designs enabled the City to build the most expensive — and
most valuable — infrastructure project in our history, with the City's $11 million leveraged by $69 million in outside funding.
During last December discussions on the 2013-2014 budgets, the Council and Mayor agreed to fund two additional officers.
We currently have 125 officers authorized, which put the City of Federal Way at 1.4 officers per thousand - a comparable per
capita figure to surrounding cities. With limited resources, though, the Federal Way Police Department has also found new
ways to fight crime and has led the way in innovative policing strategies. First off, Chief Wilson reorganized the department
last year, reducing management and increasing the number of officers on the street. The City created a Home Burglary
Emphasis team that has caught several of the high -volume burglars that were responsible for a large number of thefts. The City
also expanded the successful SafeCity program to neighborhoods, testing a pilot program that uses web -based tools to increase
communications between officers and neighbors.
With respect to the retail sector, we have seen growth. The Commons is adding a major retailer, Kohl's. Buffalo Wild Wings,
The Ram, Mooyah Burgers, Hobby Lobby, Home Goods are some of the major new retailers and restaurants that have joined
our community.
In addition to the Toys "R" Us property located at 31510 20th Avenue South, there is a proposal with private investment to
develop a Performing Arts & Conference Center and hotel. Next to the Toys R Us site, AMC site, we are proposing building
an urban park on about half the 4 acres and partnering with a developer to develop the remainder of the site with high quality
mixed uses, retail and office, possible residential.
The City successfully transitioned from the King County Consortium to a fully staffed and managed Community Development
Block Grant entitlement program. Some of the advantages of a direct entitlement community include: more dollars allocated to
directly for the City's grant administration and planning; more dollars allocated to public service programs; and the City may
award as many Community Economic Revitalization Funding (CERF) grants as it deems appropriate. Overall, the benefits are
more control of and greater grant funds retained by the City.
OUTLOOK FOR THE FUTURE
Council identified the following set of goals for the City which was adopted on March 7, 2006.
1. Integrate the public safety strategy in all facets of City operations, building on a strong community -based approach.
2. Create a multi -use urban city center that is pedestrian friendly, linked to neighborhoods and parks, and services as the
social and economic hub of the City.
3. Establish Federal Way as an economic leader and job center in South King County by attracting regional market for
high quality office and retail businesses.
4. Maintain the capital facilities plan and provide financing options for transportation and surface water improvements,
parks, recreation, and cultural arts and public facilities.
5. Ensure a responsive service culture within the City organization where employees listen carefully, treat citizens and
each other respectfully and solve programs creatively, efficiently, and proactively.
6. Position Federal Way as a regional leader by working collaboratively with other local and regional jurisdictions in
order to leverage resources.
City of Federal Way 2012 CAFR
Letter of Transmittal
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.
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 2012 audit of
the City has been completed in conformance with generally accepted auditing standards. The financial statements of all City
funds have been included in this audit. The City has been given an unqualified opinion 2012; which is the 19`h consecutive
year receiving a clean audit. The State Auditor's report on the basic financial statements is included in the financial section of
this report.
AWARDS
The Government 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, 2011. The City of Federal Way has received a Certificate of Achievement for the last twenty-two
years (fiscal years ended 1990 — 2011). In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial
report continues to meet Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to
determine its eligibility for another certificate.
The City of Federal Way also received the Government Finance Officers Association Distinguished Budget Presentation
Award for 4its biennial budget for the years beginning January 1, 2011 and 2012. In order to receive this award, a
governmental unit must publish a budget document that meets program criteria as a policy document, a financial plan, an
operations guide, and a communications medium.
ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of
the finance department. In addition, staff in all City departments should be recognized for responding so positively to the
requests for detailed information which accompany each audit. The role of the State Auditor's Office should also be
acknowledged as a significant contribution to a fine product. Finally, we wish to express our appreciation to the Mayor and
City Council for their ongoing support and for providing the firm foundation for the pursuit of excellence in all realms of
professional endeavors.
Respectfully submitted,
Tho Kraus
Finance Director
4
CITY OFFICIALS
SKIP PRIEST JIM FERRELL LINDA KOCHMAR
Mayor Deputy Mayor Councilmember
SUSAN HONDA
Councilmember
JEANNE BURBIDGE BOB CELSKI ROGER FREEMAN DINI DUCLOS
Councilmember Councilmember Councilmember Councilmember
OTHER ADMINISTRATIVE OFFICERS
FinanceDirector...................................................................................................................................................Tho Kraus
CityAttorney......................................................................................................................................... Patricia Richardson
CityClerk.....................................................................................................................................................Carol McNeilly
Community and Economic Development Director..................................................................................... Patrick Doherty
Parks and Public Works Director..................................................................................................................... Cary M. Roe
PoliceChief..................................................................................................................................................Brian J. Wilson
5
CITY OF FEDERAL WAY ORGANIZATION CHART AND OPERATION SUMMARY
Municipal Court
Misdemeanors & Gross
Misdemeanors
Traffic /Non -traffic Infractions
Probation Services
Civil Impounds
Finance
* Payroll
* Accounts Payable
* Purchasing
* Accounts Receivable
* Business License
* General Accounting
* Budget
* Banking and Investments
* Monthly Financial Report
* Audit Coordination
* Internal Controls
* Financial Planning/Analysis
Law
* Civil Legal Services and
Litigation
* Legislative support
* Prosecution
* Provide Legal Counsel
* Draft/Review Contracts
& Ordinances
* Negotiate Contracts and
Real Estate Transactions
* Risk Management
Human Resources
* Records Management
* Hearing Examiner Coord.
* Codification Coordination
* Licensing Enforcement
* Commission & Board
appointment process
* Recruiting/Training
* Benefits Administration
* Employee/Labor Relations
* Wellness
* Retirement System
* Civil Service
CITIZENS OF FEDERAL WAY
MAYOR'S OFFICE
Administer City-wide Operations and Budget
Coordinate Regional Affairs
Information
Technology
* Data Processing/ GIS
* Copier Maintenace
* Systems Support
Technology Infrastructure
Network appliances
* Customer Support
Online, Remote Helpdesk
Staff training
* Applications Support
Business Systems
Database Administration
Police
* Crime Analysis/Prevention
* Traffic Safety Education &
Enforcement
* Investigation
* Patrol
* Emergency Communication
* Community Safety and
Education Programs
* Fleet Management
* Animal Services
City Council
* Represent the People
of Federal Way
* Adopt Ordinances & Resolutions
* Grant Franchises
* Levy Taxes
* Appropriate Funds
* Establish Policv Guidelines
Community & Economic
Development
Economic Development
Land Use Management
--Permit process
--Legislative
Bldg Permits & Inspections
Code Compliance
Human Services
Comm. Dev. Block Grant
Neighborhood Develop
Parks &
Public Works
Development Services
--Permitting
--Inspection
--Legislation
Maintenance, Operating, &
Development of
--Public Right -of -Way
--Traffic Systems
--Surface Water Mgmt
Solid Waste/Recycling
Emergency Management
Fleet Management
Community Center
Recreation & Athletic Progs
Park maintenance/operation
& Development
Community Events & Arts
Public Facility Management
& Development
Dumas Bay Centre
Knutzen Family Theatre
Open Space Management
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, 2011
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.
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GOAP4RATION
President
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Executive Director
City of Federal Way 2012 CAFR
Independent Auditor's Report
Washington
Troy
INDEPENDENT AUDITOR'S REPORT
June 26, 2013
Mayor and City Council
City of Federal Way
Federal Way, Washington
State Auditor
Kelley
REPORT ON FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund and the aggregate remaining fund information of the
City of Federal Way, King County, Washington, as of and for the year ended December 31,
2012, and the related notes to the financial statements, which collectively comprise the City's
basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the City's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the City's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the
Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (360) 902-0370 • TDD Relay (800) 833-6388
8
City of Federal Way 2012 CAFR
Independent Auditor's Report
appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, each
major fund and the aggregate remaining fund information of the City of Federal Way, King
County, Washington, as of December 31, 2012, and the respective changes in financial position
and, where applicable, cash flows thereof, and the respective budgetary comparison for the
General, Street and Utility Tax funds for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Matters of Emphasis
As described in Note 16, during the year ended December 31, 2012, the City has implemented
the Governmental Accounting Standards Board Statement No. 63, Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position and
Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 11 through 21 be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express
an opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary and Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements as a whole. The accompanying
information listed as Combining and Individual Fund Statements and Schedules and Capital
Assets Used in the Operation of Governmental Funds on pages 71 through 100 is presented for
purposes of additional analysis and is not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly
to the underlying accounting and other records used to prepare the financial statements. This
information has been subjected to auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such
City of Federal Way 2012 CAFR
Independent Auditor's Report
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our
opinion, the information is fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
The information identified in the table of contents as the Introductory and Statistical Sections is
presented for purposes of additional analysis and is not a required part of the basic financial
statements of the City. Such information has not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we do not express an
opinion or provide any assurance on it.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we will also issue our report dated June
26, 2013, on our consideration of the City's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. That report will be issued under separate cover in the City's
Single Audit Report. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in
considering the City's internal control over financial reporting and compliance.
Sincerely,
-\>\/, AAj�
TROY KELLEY
STATE AUDITOR
10
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the City of Federal Way's annual financial report provides a narrative overview of the City's financial activities
for the fiscal year ended December 31, 2012. This information should be read in conjunction with the preceding letter of
transmittal, the financial statements and notes to the financial statements that follow.
FINANCIAL HIGHLIGHTS
• The total assets of the City of Federal Way exceeded its liabilities at December 31, 2012 by $594.7 million. Capital Assets
(net of depreciation and related debt) account for 88% of this amount with a value of $520.9 million. Of the remaining net
assets of $73.9 million or 12%, $51.0 million may be used to meet the government's ongoing obligations to citizens and
creditors, without legal restriction.
• The City's total net assets increased by $6.7 million, or 1% compared to 2011. Governmental activities increased by $5.9
million while business -type activities decreased by $805 thousand.
• Net investment in capital assets and unrestricted net assets for governmental activities increased by $523 thousand and
unrestricted net assets increased by $6.4 million respectively compared to 2011.
• Restricted Net Assets decreased by $1.1 million or 5% is mainly for funding of capital projects.
• Governmental fund balances at year-end were $48.8 million, $5.2 million or 12% increase over the prior year. Of this
amount, a total of $14.8 million, or 30% of the governmental fund balance is unrestricted and available to fund ongoing
activities. The remaining $34 million is earmarked for debt service, paths & trails reserve, hotel/motel lodging tax, police
special funds, petty cash/change funds, court trust fund, advance travel, and capital projects.
• Unrestricted fund balance in the general fund was $14.8 million, which increased by $2.4 million or 19% from the prior
year.
• The City debt decreased by $775 thousand during the current fiscal year. General obligation debt decreased by $579
thousand while public works trust fund loan decreased by $196 thousand. The decreases reflect the annual debt service
payments and compensated absences.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of Federal Way's basic financial statements.
The basic financial statements are comprised of three components:
1) government -wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.
In addition to the required components, the City's annual report also includes other supplementary information. The first set
of supplementary information is the Combining Statements. These provide Balance Sheets, Statement of Revenues,
Expenditures, and Changes in Fund Balances with Budget to Actual Comparisons, Statement of Net Position, and Cash Flows
for all Non -Major Funds. The other set of supplementary information is the Statistical Section. This section provides a four to
ten-year view of the City's revenues, expenditures, debt obligations and capacity, the City's largest taxpayers, and those
entities with the largest employment within the City of Federal Way. This section provides a long-term perspective on the
City's economy.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the City of Federal
Way's finances, in a manner similar to a private -sector business.
The statement of net position presents information on all of the City of Federal Way's assets and liabilities, with the difference
between the two reported as net assets. This statement serves a purpose similar to that of a balance sheet in private business.
11
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating.
The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year.
All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing
of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash
flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the City of Federal Way that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover
all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities
of the City of Federal Way include law enforcement and public safety, construction and maintenance of streets, building
inspection, municipal court services, jail services, community planning and development services, parks and recreation
facilities, other community services and general administration. The business -type activities of the City include surface water
management and the control and operation of Dumas Bay Centre, a multi -use facility that offers business and retreat
accommodations, recreation and cultural arts classes and a performing arts facility.
The City has no separately identified component units included in the government -wide financial statements. The City has
reported its investment in two governmental joint ventures: Valley Communications Center and South Correctional Entity
(SCORE). Descriptions of these joint ventures are found in note 14 of the notes to the financial statements.
The government -wide financial statements can be found immediately following this MD&A.
Fund Financial Statements
The annual financial report includes fund financial statements in addition to the government -wide financial statements. While
the government -wide statements present the City's finances based on the type of activity, general government versus business -
type, the fund financial statements are presented by fund type such as the general funds, special revenue funds, and proprietary
funds. A fund is a specific fiscal and accounting entity with a self -balancing set of accounts used to account for specific
activities or meet certain objectives. Funds are often set up in accordance with special regulations, restriction or limitations.
The City of Federal Way uses fund accounting to ensure and show compliance with finance -related legal requirements. The
City's funds are divided into two categories: governmental funds and proprietary funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions as are reported in governmental activities in the
government -wide financial statements. However, unlike the government -wide financial statements, governmental fund
financial statements focus on near -term inflows and outflows of spendable resources as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term
financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to
compare the information presented for governmental funds with similar information presented for government -wide financial
statements. By doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City of Federal Way maintains seventeen individual governmental funds. The City's six major governmental funds, the
general fund, street fund, utility tax fund, debt service fund, downtown redevelopment fund, and the transportation fund, are
presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures,
and changes in fund balances. The remaining governmental funds are combined into a single column labeled nonmajor
governmental funds. Individual fund data for each of the nonmajor governmental funds can be found in combining statements
later on in this report.
The City maintains control over its operating funds through the adoption of the biennial budget. Budgets are adopted at the
fund level and according to state law. A budgetary comparison statement is presented for the General, Street, and Utility Tax
Fund as a basic financial statement.
12
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
The basic governmental fund financial statements can be found on pages after the government -wide statements of this report.
Proprietary Funds
The City of Federal Way maintains two types of proprietary funds. Enterprise funds are used to report the same functions
presented as business -type activities in the government -wide statements. The City uses enterprise funds to account for its
surface water management and control and the Dumas Bay Centre. Internal service funds are an accounting device used to
accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account
for its risk management and self-insurance program, information systems, mail and duplication services, fleet of vehicles and
motorized equipment, and facilities management.
Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The
proprietary fund financial statements provide separate information for the Surface Water Management fund and for the Dumas
Bay Centre. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found following the governmental fund statements of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to the full understanding of the data provided in the government -wide
and fund financial statements. The notes to the financial statements can be found immediately following the basic financial
statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents the combining statements for
nonmajor governmental funds, internal service funds, and capital assets of governmental funds.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
This section provides analysis of the government -wide financial statements including long-term and short-term information
about the City's overall financial condition. The following tables address the financial results of the City as a whole.
CONDENSED STATEMENT OFNEI' POSMON
As of December 31, 2012 and 2011
Governmental Activities
Business -Type
Activities
Total
2012
2011
2012
2011
2012 2011
Current and other assets
$ 87,471,044
$ 83,596,160
$ 6,432,446
$ 6,033,543
$ 93,903,490 $ 89,629,703
Capital assets and CIP,
net ofaccuxn depreciation
482,907,776
482,724,905
51,126,195
51,080,562
534,033,970 533,805,467
Total assets
570,378,820
566,321,065
57,558,641
57,114,105
627,937,460 623,435,170
Long-term liabilities
29,119,984
29,731,230
912,383
1,106,377
30,032,367
30,837,607
Other liabilities
2,466,661
3,623,572
75,403
87,914
2,542,064
3,711,486
Total liabilities
31,586,645
33,354,802
987,786
1,194,291
32,574,431
34,549,093
Deferred inflow ofresources
319,999
347,312
295,177
449,310
615,176
796,622
Total deferred inflow ofresources
319,999
347,312
295,177
449,310
615,176
796,622
Net position:
Net investment in:
capital assets
470,597,776
470,074,905
50,280,880
50,052,887
520,878,656
520,127,792
Restricted
22,847,077
23,941,601
26,496
18,831
22,873,573
23,960,432
Unrestricted
45,027,323
38,602,445
5,968,302
5,398,786
50,995,625
44,001,231
Total net position
$ 538,472,176
$ 532,618,951
$ 56,275,678
$ 55,470,504
$ 594,747,853
$ 588,089,455
13
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
Analysis of Net Position
Total net position of the primary government of $594.7 at December 31, 2012 increased $6.7 million or 1.1% compared to
December 31, 2011. The increase is mainly due to general governmental activities which contributed 88% or $5.9 million of
the increase.
The largest component of the City's net position, 88% or $520.9 million, is its net investment in capital assets. These capital
assets such as land, streets, trails, parks, police vehicles, and parks equipment are used to provide services to the citizens.
Consequently, these assets are not available to sell and convert to cash for future spending.
Approximately 3% or $20.7 million of the total net assets of the city are earmarked for construction improvement
projects. $15.3 million of the $20.7 million earmarked for construction improvement projects are restricted and the remainder
is committed to construction improvement projects. Some of the major projects include the Annual Transportation System
Safety Improvements, S 324th St at 20th Ave S, SW 312th St at SR509, S 352nd St Ext from SR99-SR161, S 320th St at 1-5 S
Ramp, SR99 HOV Lanes PH IV, SR99 HOV Lanes PH V, SW 336th Way to SW 340th St at 26th Pl SW to Hoyt Road, 21st Ave
SW at SW 336th St, and S 344th Way at Weyerhaeuser Way S. During the year, the City funded renovation and improvement
of neighborhood parks and open space parks such as Sacajawea Park and Trail and Pedestrian Access Improvements. The City
attempts to fund capital construction projects on a pay-as-you-go basis, aggressively pursuing transportation grant funding and
cost sharing with developers to construct large projects in the City that impact the transportation system.
The remaining balance of restricted net assets is divided among restrictions for: $61 thousand for police special funds, petty
cash/change funds and advance travel, $51 thousand for municipal court trust fund, $19 thousand for prepaid insurance/debt,
$2 million for debt service prefanding, $502 thousand Special Contracts/Studies, $102 thousand for Hotel/Motel lodging tax,
$167 thousand for Path & Trails Reserve, and $41 thousand for Community Development Block Grant. The business -type
activities portion of $5.9 million, $5.8 million can only be spent on surface water management and the remaining $133
thousand on improvements to Dumas Bay Centre and Knutzen Family Theatre. Maintenance of catch basins, pump stations,
storm drain flushing, and other capital construction projects such as West Branch Lakota Creek Restoration are examples of
utility activities. Other functions of the City may access the remaining $23.0 million to meet ongoing obligation to citizens and
creditors. Examples of other City obligations which these net assets may be used for are public safety, parks maintenance, and
ongoing street maintenance.
At the end of the fiscal year, the City of Federal Way reported positive balances in all three categories of net assets, for the
government as a whole, as well as for the separate governmental and business -type activities.
Governmental Activities:
Capitals assets and CIP, net of accumulated depreciation increased by $183K or less than 0.1% due to increase in land
contributed to the City of $1.4M, an increase in construction in progress of $1.58M primarily due to SR99 HOV Phase 4 and
20 Ave SW at SW 336th Street, decrease in buildings and structures of $891K primarily due to depreciation expense, decrease
in improvements other than buildings of $2.2M due to depreciation expense, increase in machinery and equipment of $130K
due to purchase and disposition of vehicles and equipment, and increase in infrastructure of $155K due to capitalizing S 348th
Street at 1" Avenue S, developer contribution Campus Crest, and offset by depreciation expense.
Long-term liabilities decreased by $611 thousand or 2.1% due to decrease in compensated absences, and a lower outstanding
balance in GO Bond Loans, SCORE facility debt, and Valley Communications debt.
Other liabilities decreased by $1.2 million or 29.8% due to decrease in accounts payable and accruals primarily in the General
Fund due to timing of invoice payments.
Net investments in capital assets increased $523 thousand or 0.1% primarily due to an increase in Transportation capital assets
and a decrease in long term liabilities such as a compensated absences and outstanding long-term debt.
Restricted net position represents amounts that must be used in accordance with external restrictions, and decreased by $1.1
million or 4.5% from the prior year primarily due to decrease in debt service prefanding of $1.9M, increase in capital projects
of $1.0M.
14
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
Business -Type Activities:
Current and other assets increased by $400 thousand or 6.6% primarily due to an increase in grants received in Surface Water
Management and an increase in storm drainage fees.
Capitals assets and CIP, net of accumulated depreciation increased by $46K or less than 0.1% due to increase in land of $623K
for purchase of West Hylebos Basin Land, decrease in construction in progress of $51K due to capitalization of West Hylebos
Creek Headwaters Restoration, decrease in buildings and structures of $180K due to depreciation expense, decrease in
improvements other than buildings of $324K due to depreciation expense offset by capitalization of West Hylebos Creek
Headwaters Restoration, decrease in infrastructure of $19K due to depreciation expense.
Long-term liabilities decreased by $194 thousand or 17.5% due to decrease in compensated absences, and low outstanding
balance in Public works trust fund loan.
Other liabilities decreased by $167 thousand or 31.0% primarily due to decrease in deferred inflow of resources of surface
water management fees due to timing of receipts.
Net investments in capital assets increased $228 thousand or 0.5% primarily due to an increase in Surface Water Management
capital assets and a decrease in long term liabilities in Public Works Trust Fund Loan balances.
Restricted net position represents amounts that must be used in accordance with external restrictions, and increased by $8
thousand or 40.7% from the prior year primarily due to increase in Steel Lake and North Lake district balances.
Unrestricted net position increased by $570 thousand or 10.5% due to an increase in grants received in Surface Water
Management, and an increase in storm drainage fees.
15
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
CHANGES IN NET POSMON
For the Years Ended December 31, 2012 and 2011
Governmental Activities
Business -Type
Activities
Total
2012
2011
2012
2011
2012
2011
Revenues:
Programs revenues:
Charges for services
$ 11,560,208
$ 10,487,684
$ 4,222,726
$ 4,020,144
$ 15,782,934 $
14,507,828
Operating grants & contrib.
5,367,163
4,597,981
576,182
265,660
5,943,345
4,863,641
Capital grants & contrib.
5,225,265
9,716,551
-
-
5,225,265
9,716,551
General revenues:
Property taxes
10,052,109
9,867,614
-
-
10,052,109
9,867,614
Sales tax
10,534,147
10,858,381
-
-
10,534,147
10,858,381
Local criminal justice sales tag
1,864,991
1,795,971
-
-
1,864,991
1,795,971
Utility tax
13,083,179
13,068,510
-
-
13,083,179
13,068,510
Real estate excise tax
1,507,313
1,560,395
-
-
1,507,313
1,560,395
Othertaxes
313,607
702,553
-
-
313,607
702,553
Other
838,259
1,061,026
11,424
12,405
849,683
1,073,431
Total Revenue
60,346,241
63,716,666
4,810,332
4,298,209
65,156,573
68,014,875
Expenses:
General government
4,300,691
4,448,449
-
-
4,300,691
4,448,449
Security ofpersons & property
27,604,936
27,222,584
-
-
27,604,936
27,222,584
Transportation
9,946,776
13,539,598
-
-
9,946,776
13,539,598
Physical environment
415,935
424,466
-
-
415,935
424,466
Economic environment
2,645,478
2,782,435
-
-
2,645,478
2,782,435
Health and human services
754,727
690,643
-
-
754,727
690,643
Culture and recreation
8,081,401
8,105,578
-
-
8,081,401
8,105,578
Interest on long-term debt
602,572
614,571
-
-
602,572
614,571
Surface Water Management
-
-
3,272,514
3,527,590
3,272,514
3,527,590
Dumas Bay Centre
-
-
873,144
890,738
873,144
890,738
Total Expenses
54,352,517
57,828,324
4,145,658
4,418,328
58,498,175
62,246,652
Change in net position
5,993,724
5,888,342
664,674
(120,119)
6,658,398
5,768,223
before transfers
Transfers
(140,500)
(113,000)
140,500
113,000
-
-
Change in net position
5,853,224
5,775,342
805,174
(7,119)
6,658,398
5,768,223
Net position - beginning
532,618,951
527,727,074
55,470,504
55,587,875
588,089,455
583,314,949
Prior period adjustment
-
(883,465)
-
(110,252)
-
(993,717)
Adjusted net position -
588,089,455
582,321,232
bebeginning
g� g
532,618,951
526,843,609
55,470,504
55,477,623
Net position - ending
S 539,472,176
$ 532,618,951
$ 56,275,678
$ 55,470,504
$ 594,747,854
$ 588,089,455
Analysis of the change in net position:
Total government -wide revenues of the primary government increase $2.9 million or 4.2% and total expenses decreased $3.7
million or 6.0% from the prior years. These changes are discussed in more detail below.
16
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
Governmental Activities:
Governmental activities contributed $5.9 million or 88% of the total change in net assets of $6.7 million. The increase is
mainly due to the overall increase in capital assets of which $2.9 million was contributed from developers.
Total revenues for governmental activities decreased $3.4 million or 5.3%. The decrease is mainly due to less funding received
from federal and state assistance which decreased 4.5 million from 2011. In 2011, the City received more funding for capital
improvement projects that were in the construction phase.
Total expenses for governmental activities decreased $3.5 million or 6.0%. The decrease is mainly due to decreases in capital
outlay expenditures and prior period impairment loss reported in 2011.
Governmental Activities - Revenues
Other, 1.4%
AlCharges for
services, 19.2%
Operating grants
Other taxes, & contributions,
27.8% 8.9%
Sales tax, 17.5%
Capital grants
and contribution,
Property tax, 8,7%
16.7%
Business -Type Activities:
Governmental Activities - Expenses
Interest on long- General
term debt, 1.1% govemment,
7.9%
Culture and
Health and recreation, 14.9%
human services,
1.4%
Economic
environment,
4.9°/
ransportation,
Security of
183%
persons&
property, 50.8%
Physical
environment,
0.84
Business -type activities of the City's Surface Water Management system and Dumas Bay Centre increased the City's net assets
by $805 thousand. Surface Water Management Fund increase by $950 thousand which was offset by a decreased in Dumas
Bay Centre Fund net assets by $145 thousand. Key elements of the increase are as follows:
Total revenues increased by $512 thousand or 11.9% from 2011. Attributing factors to the increase in revenues are as follows:
Surface Water Management increase is primarily due to $129 thousand in storm drainage fees; $47 thousand in mitigation fees;
and $311 thousand in grant revenue change from 2011.
Total expenditures decrease of $273 thousand or 6.2% from 2011. Attributing factors to the decrease in expenditures are as
follows: Surface Water Management decrease is primarily due $188 thousand in salaries and wages from a vacant position. In
2011 $95 thousand was capitalized as land and construction work in progress but in 2012 $726 thousand was capitalized as
land and improvements other than buildings.
Business -Type Activities - Revenues
Operating
& contribi
12.0"/
Business -Type Activities - Expenses
F
Dumas Bay
Centre, 21.1%
Surface Water
Management,
78.9%
17
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City of Federal Way uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements.
Governmental funds
The focus of the City of Federal Way's governmental funds is to provide information on near -term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the
fiscal year.
As of the end of 2011, the City's governmental funds had a combined ending fund balance of $48.8 million which increased by
$5.2 million from the prior year. Approximately 30% or $14.8 million of this amount constitutes unrestricted General Fund
balance, which is available for spending at the City Council's discretion. The remainder of the fund balance is restricted to
indicate that it is not available for new spending because it has already been committed for debt service payments, capital
projects, police special funds and petty cash/change fund/advance travel.
The General Fund is the chief operating fund of the City. Total fund balance increased $2.3 million or 18%. The increase in
fund balance is mainly due to an increase in building permits and franchise fees revenues, and a decrease in expenditures in jail
services, health care costs, and frozen Police positions.
The Utility Tax fund was established to account for the utility tax receipts which include 6% collected for capital, debt, and
other maintenance & operations as determined by Council and the remaining 1.75% is for Voter Approved enhanced Police
and Community Safety in 2007. Total fund balance increased $483 thousand or 12% from 2011 due mainly to additional tax
revenue received as a result of audit.
The Debt Service Fund has a total fund balance of $4.2 million which increased by $316 thousand from 2011 due to an
increase in real estate excise tax revenue earmarked for future capital spending.
The Downtown Redevelopment fund was established to accumulate resources and set aside funding for downtown projects.
Overall, ending fund balance decreased by $42 thousand or 2%.
The Transportation Fund is used to improve existing traffic signals, new signalization, major roadways and arterials involving
the design and construction of new sections of streets, the widening of roadways to provide additional vehicle lanes, the
installation of sidewalks and landscaping. The major source of revenue for this fund is grants from other agencies and
contributions from other funds. Total ending fund balance increased by $1.3 million or 10%.
Proprietary funds
The City of Federal Way's proprietary funds provide the same type of information found in the government -wide, but in more
detail. Unrestricted net assets of the Surface Water Management Fund at the end of the year amounted to $5.8 million, and
those for Dumas Bay Centre amounted to $133 thousand. The total change in net assets for both funds was $955 thousand
increase and $145 thousand decrease, respectively. Other factors concerning the finances of these two funds have already been
addressed in the discussion of the City of Federal Way's business -type activities.
GENERAL FUND BUDGETARY AND ACTUAL HIGHLIGHTS
The City of Federal Way budgets on a biennial basis with each budget beginning in an odd numbered year. Appropriations for
operating funds are authorized for two years, but must be reviewed and reauthorized by the City Council in the middle of the
biennial period. In 2012, the City made three budget adjustments. The following discussion is reflective only of the current
year of the biennium.
The General Fund operating expenditure budget increased by $3.2 million between the original adopted budget and the
adjusted budget for 2012 fiscal year. The following is the major changes for the 2012 budget:
o Reduced $355 thousand for personnel cost savings due to management changes.
o Reduced $28 thousand in travel and training budgets.
o Added $190 thousand for gasoline cost increases.
o Added $100 thousand for unemployment compensation claims.
18
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
o Added $21 thousand for increase in insurance premiums.
o Reduced $20 thousand for postage delivery service savings.
o Eliminate $70 thousand for Federal Lobbyist.
o Eliminate $133 thousand for Human Services and CDBG grant reorganization.
o Added $17 thousand for increase 0.25 FTE Human Resources Administrative Assistant.
o Added $53 thousand for increase in election costs.
o Added $925 thousand for SCORE jail services.
o Eliminate $306 thousand for Valley Communications dispatch services.
o Eliminate $311 thousand for freezing 3.0 FTE vacant Police Officer positions.
o Added $85 thousand for Recreation Inclusive Coordinator.
o Rolled forward $450 thousand for pension reserves for future rate increases.
o Added $65 thousand for workers compensation rate increase.
o Eliminate $306 thousand for healthcare savings.
o Rolled forward $82 thousand for Community Weatherization Energy Efficiency grant.
o Reduced $35 thousand for converting Administrative Services Director to Community Services Manager.
o Eliminated $41 thousand for eliminating Administrative Services Analyst.
o Eliminated $18 thousand, net of temp help increase, for eliminating 0.50 FTE Business Licenses Specialist.
o Rolled forward $97 thousand for abatement funds.
o Rolled forward $63 thousand for permit system upgrades.
o Rolled forward $82 thousand for City Center Redevelopment.
o Rolled forward $49 thousand for Comprehensive Plan update.
o Added $483 thousand for pending deductibles and claims.
o Rolled forward $155 thousand for pending deductibles and claims.
o Rolled forward $110 thousand for legal counsel.
o Added $38 thousand for legal counsel.
o Rolled forward $121 thousand for Federal and State seizure expenditures.
o Eliminate $330 thousand for freezing 3.0 FTE Police Officer positions.
o Rolled forward $50 thousand for Non -SCORE jail services.
o Rolled forward $277 thousand for Police grants and contributions.
o Rolled forward $60 thousand for Arts Cultural Plan.
o Rolled forward $45 thousand for replacement of monument signs at park entrances.
o Rolled forward $22 thousand for storm damage repairs and tree/shrub replacement.
o Added $123 thousand for Police grants and contributions
o Rolled forward $1.2 million for contingency reserve funds.
Adjustments to revenues and other sources budget include: Adjustments to beginning balance of $7.6 million; increase of $544
thousand for grant/contribution revenues; increase in liquor profits of $553 thousand; decrease in gambling tax of $46
thousand; decrease in sales tax of $205 thousand; increase in utility tax of $925 thousand; increase of $90 thousand for criminal
justice high crime distribution from the state; increase of $200 thousand for property taxes; increase of $67 thousand for
criminal justice sales tax; increase in franchise fees of $36 thousand; increase of $84 thousand in park revenues; increase of $8
thousand for business licenses; increase of $2 thousand for leasehold excise tax; decrease of $119 thousand for animal license;
decrease in building and electrical permits of $150 thousand; decrease of $41 thousand for interest; and decrease of $60
thousand for court revenues. Other sources changes include a decrease in transfer in of $70 thousand for elimination of the
federal lobbyist and $4 thousand for healthcare savings.
The General Fund ending fund balance of $14.9 million is $6.4 million over the above the projected $8.6 million for 2012 year-
end. The $3.5 million of the $6.4 million excess is being earmarked for carry forward into 2012. The remaining $2.9 million
increase is considered one-time funds.
The $6.4 million increase in ending fund balance is made up of $594 thousand in additional revenues/other sources and $5.8
million in unspent expenses/other uses.
The $594 thousand increase in revenues/other sources is attributed to increases in interest earnings of $22 thousand, criminal
justice shared revenue of $102 thousand, liquor profits of $338 thousand, building permits of $303 thousand, franchise fees of
$23 thousand, property taxes of $153 thousand, criminal justice sales tax of $146 thousand, police services and charges of $197
thousand, court revenue of $7 thousand, and plan checking fees and community development fees of $162 thousand, offset by
decreases in: traffic infractions of $145 thousand, liquor excise tax of $224 thousand, animal licenses of $55 thousand, sales tax
of $52 thousand, gambling tax of $48 thousand, park revenue of $43 thousand, and transfer in utility tax of $278 thousand.
19
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
The $5.8 million unspent expenses/other uses are attributable to savings found in: Police & Jail services of $1.1 million;
Community & Economic Development of $436 thousand; Parks & Recreation of $348 thousand, Pension Reserves of $450
thousand; Risk Management Deductible Claims of $496 thousand; Mayor's Office/Human Services of $202 thousand; Law of
$310 thousand; Human Resources/City Clerk of $188 thousand, Municipal Court of $208 thousand; Finance of $63 thousand,
City Council of $19 thousand, Contingency Reserves of $1.1 million, and transfer out for General/Street Fund Subsidy of $860
thousand.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City of Federal Way's investment in capital assets for its governmental and business -type activities as of December 31,
2012 amounts to $534 million (net of accumulated depreciation). This investment in capital assets includes land, buildings,
improvements, machinery and equipment, infrastructure, park facilities and construction in progress. For more details, please
see Note 8.
CAPITAL ASSETS AT YEAR-END, NET OF DEPRECIATION
Governmental
Business -Type
Total
Activities
Activities
2012
2011
Land
$ 303,565,575
$ 10,933,528 $
314,499,103 $
312,478,433
Building and improvements
37,387,676
35,966,374
73,354,051
76,942,864
Machinery and equipment
5,198,053
27,012
5,225,065
5,098,298
Infrastructure
114,012,943
1,796,835
115,809,778
115,674,344
Construction in progress
22,743,528
2,402,446
25,145,974
23,611,529
Total Capital Assets
$ 482,907,776
$ 51,126,195 $
534,033,970 $
533,805,467
Major capital asset events during the current fiscal year included the following: expanding and improving the city streets
and traffic corridors for a total of $11.0 million and general capital and various park improvements for $225 thousand.
Additional information on the City of Federal Way's capital assets can be found in Note 8 of the Notes to the Financial
Statements.
Long-term debt
At the end of 2012, the City of Federal Way had total bonded debt outstanding of $45.6 million for future principal and interest
payments which are backed by the full faith and credit of the government. The remainder of the City's debt represents Public
Works Trust Fund Loans.
LONG-TERM DEBT (FUTURE PRINCIPAL AND INTEREST PAYMENTS)
General obligation bonds
Public works trust fund loan
Total
Governmental Business -Type
Activities Activities Total
$ 44,787,976 $ - $ 44,787,976
- 874,817 874,817
$ 44,787,976 $ 874,817 $ 45,662,793
The City's total debt decreased by $1.6 million due to annual debt service payments.
In February 2013 Moody's Investors Service assigned a Aa3 rating to the City's Limited Tax General Obligation Refunding
Bonds, 2013. At the same time, Moody's affirmed the Aa3 rating on the City's approximately $355,000 limited G.O. Bonds,
post refunding. Moody's also affirmed the City's Aa2 unlimited GO -equivalent issuer rating.
Washington State statutes limit the amount of debt a government entity may issue to 7.5% of its total assessed valuation,
subject to 60% majority vote of qualified electors. Of the 7.5% limit, 2.5% is for general purposes, 2.5% for open space/park
facilities, and 2.5% for utilities. Non -voted general purpose indebtedness is limited to 1.5% of assessed valuation and
combination of voted and non -voted general purpose indebtedness cannot exceed 2.5% of assessed valuation.
20
City of Federal Way 2012 CAFR
Management's Discussion and Analysis
The City's assessed valuation for 2012 was $7.143 billion and the total amount of debt the City may issue is $510.1 million.
Remaining legal debt capacities as of December 31, 2012 are:
General government (no vote required)
$ 81,530,018
General government (3/5 majority vote required)
$ 71,428,320
Parks and open space (3/5 majority vote required)
$178,570,799
Utilities (315 majority vote required)
$178,570,799
Total Capacity
$510,099,936
Additional information on the City of Federal Way's long-term debt can be found in Note 11 and in the Statistical Section of
this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The United States economy has continued to grow slightly in 2012, but for many Americans life has remained the same.
With unemployment rates remaining high at 7.8% in December 2012; a decrease from 8.5% in 2011; many Americans have
remained jobless. Home values and housing starts were an upturn for the 2012 economy, but state budgets have continued to
decline signifying more layoffs, services cuts and potential tax increases.
In 2012 we saw oil and gasoline prices decrease slightly due to weakness in demand around the world from economic
conditions, the Middle East tensions and a great deal of noise in the currency markets in Europe and the United States is having
effect of raising the price of crude. Retail and commodity item purchases increased slightly in 2012, but as oil prices increase,
consumers will be forced to shift discretionary spending away from big -ticket purchases of autos, furniture, appliances, and
purchase of nondurables.
Other factors in 2012 that affected the United States economy negatively are the budget negotiations "the fiscal cliff' and
health care costs affected by the Affordable Care Act. According to economists and business owners in 2012 this has frozen
many decisions about hiring and expanding within companies until final decisions are made.
Like the rest of the nation, the Washington state economy is still dealing with a severely damaged economy. How quickly the
region emerges from this downturn largely depends on how fast the nation recovers.
The Puget Sound region, however, is doing better than the rest of the country, employment growing 0.2% over the year
compared to 0% for the nation. That's largely thanks to Boeing, which has advanced at twice the national rate.
Despite the lift from Boeing, the regional economy remains in fragile state. Foreclosures are still holding down the housing
market, while weak tax collections are forcing state and local governments to cut programs and eliminate jobs.
In addition, the State is currently trying to fix a gap of more than $1 billion in the state's main budget. The House and the
Senate both have different strategies to balance the budget. Some proposed reductions includes eliminating Basic Health Plan,
Disability Lifeline, permanently reduce certain state distributions to local governments which includes support for criminal
justice programs, and K-12 & higher education reductions. With the uncertainty of the State's budget and economic recovery,
maintaining City services at the current levels can be challenging.
With the uncertainty with the State's budget crisis, rising fuel costs, and unexpected increase in contracted costs; the City
approached the 2013/14 budget with heightened caution. The City is proceeding with caution and restraint, so that it is not
overly susceptible to and minimizes the local economy slump without huge fluctuations in services to our citizens. Staff will
closely monitor and assess economic impacts experienced at the federal, state and local level to anticipate any negative impact
on critical City resources.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Federal Way's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to Finance Department, City of Federal Way, 33325 8th Avenue South,
Federal Way, Washington 98003, telephone 253-835-2520, or visit the City's website at www.cityoffederalway.com.
21
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CITY OF '0'::tS:p
Federal Way
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THIS PAGE IS LEFT INTENTIONALLY BLANK
22
BASIC FINANCIAL STATEMENTS
23
City of Federal Way 2012 CAFR
Basic Financial Statements
STATEMENT OF NET POSITION
December 31, 2012
ASSETS
Cash & cash equivalents and investments
Receivables (net)
Due from other governments
Prepaid items
Restricted assets:
Seizure funds/petty cash/advance travel/retainage
Investment in joint venture
Capital assets not being depreciated:
Land
Construction in progress
Capital assets net of accumulated depreciation:
Buildings/structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Total Assets
LIABILITIES
Governmental
Business -type
Activities
Activities
Total
$ 64,784,796
$ 5,865,106
$ 70,649,902
1,883,155
139,862
2,023,017
1,888,756
427,477
2,316,233
23,771
-
23,771
111,212 - 111,212
18,779,354 - 18,779,354
303,565,575
10,933,528
314,499,103
22,743,528
2,402,446
25,145,974
10,645,151
800,840
11,445,991
26,742,525
35,165,534
61,908,059
5,198,053
27,012
5,225,065
114,012,943
1,796,835
115,809,778
570,378,820
57,558,641
627,937,460
Accounts payable and accruals
1,453,202
51,201
1,504,403
Due to other governments
-
18,265
18,265
Customer deposits
1,013,459
5,937
1,019,396
Noncurrent Liabilities:
Due within one year
989,570
185,633
1,175,203
Due in more than one year
13,038,464
726,750
13,765,214
Due to other governments
15,091,950
-
15,091,950
Total Liabilities
31,586,645
987,786
32,574,431
DEFERRED INFLOW OF RESOURCES
319,999
295,177
615,176
NET POSITION
Net investment in capital assets
470,597,776
50,280,880
520,878,656
Restricted for:
Customer deposit
12,206
5,937
18,143
Debt service prefunding
2,004,488
-
2,004,488
Capital projects
20,719,171
-
20,719,171
Steel Lake & North Lake Mgmt District
-
20,559
20,559
Other
111,212
-
111,212
Unrestricted
45,027,323
5,968,302
50,995,625
Total Net Position
$ 538,472,176 $ 56,275,678 $ 594,747,853
The notes to the financial statements are an integral part of this statement.
24
City of Federal Way 2012 CAFR
Basic Financial Statements
STATEMENT OF ACTIVITIES
For the Year ended December 31, 2012
Program Revenues
Net (Expense) Revenue & Changes in Net Position
Operating Capital
Charges for Grants and Grants and
Governmental
Business -type
Expenses
Services Contributions Contributions
Activities
Activities
Total
Functions/Programs
Governmental Activities:
General government
$ 4,300,691
$ 924,966 $ 2,459,749 $ -
$ (915,976)
$
$ (915,976)
Security of persons & property
27,604,936
5,937,100 888,641 -
(20,779,196)
(20,779,196)
Transportation
9,946,776
2,139,292 1,827,558 5,225,265
(754,661)
(754,661)
Physical environment
415,935
89,457 139,966 -
(186,512)
(186,512)
Economic environment
2,645,478
568,973 -
(2,076,505)
(2,076,505)
Health
754,727
162,322 3,392
(589,013)
(589,013)
Culture & recreation
8,081,401
1,738,098 47,857
(6,295,446)
(6,295,446)
Interest on long-term debt
602,572
- -
(602,572)
(602,572)
Total governmental activities
54,352,517
11,560,208 5,367,163 5,225,265
(32,199,881)
-
(32,199,881)
Business -type Activities:
Surface Water Management
3,272,514
3,635,574 576,182 -
939,242
939,242
Dumas Bay Centre
873,144
587,152 -
(285,992)
(285,992)
Total business -type activities
4,145,658
4,222,726 576,182 -
653,250
653,250
Total
$ 58,498,175
$ 15,782,934 $ 5,943,345 $ 5,225,265
(32,199,881)
653,250
(31,546,631)
General revenues:
Propertytax
10,052,109
-
10,052,109
Sales tax
10,534,147
10,534,147
Local criminal justice sales tax
1,864,991
1,864,991
Utility tax
13,083,179
13,083,179
Real estate excise tax
1,507,313
1,507,313
Gambling tax
114,443
114,443
Hotel/motel tax
193,344
193,344
Leasehold excise tax
5,820
5,820
Other revenue
702,833
-
702,833
Investment earnings
135,426
11,424
146,850
Transfers
(140,500)
140,500
-
Total general revenues and transfers
38,053,106
151,924
38,205,030
Change in net assets
5,853,224
805,174
6,658,398
Net position at beginning of year
532,618,951
55,470,504
588,089,455
Adjusted beginning net assets
532,618,951
55,470,504
588,089,455
Net position at end of year
$ 538,472,176
$56,275,678
$ 594,747,853
The notes to the financial statements are an integral part of this statement.
25
City of Federal Way 2012 CAFR
Basic Financial Statements
ASSETS
Equity in pooled cash & investments
Prepaid insurance/debt service
Receivables (net):
Taxes
Accounts and contracts
Restricted cash
Due from other governments
Interfund loans receivable
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND
BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Deposits payable
Interfund loans payable
TOTAL LIABILITIES
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2012
Debt
General
Street
Utility Tax
Service
$ 14,277,516
$ 970,100
$ 3,473,409
$ 3,977,303
18,771
-
-
-
361,257
1,177,253
301,156
4,676
-
-
111,212
-
-
-
1,249,004
96,544
3,025
935
10,000
-
-
-
16,032,436
1,066,644
4,653,687
4,279,394
429,652
185,083 -
6,935
456 -
285,156
716,097 -
721,743 901,636 -
DEFERRED INFLOWS OF RESOURCES
375,598
65,009 - 97,050
Fund Balance:
Nonspendable
69,398
- - -
Restricted
60,585
- - 2,004,488
Committed
21,893
100,000 4,653,687 2,177,857
Unassigned
14,783,219
- - -
TOTAL FUND BALANCES
14,935,095
100,000 4,653,687 4,182,345
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 16,032,436 $ 1,066,645 $ 4,653,687 $ 4,279,395
The notes to the financial statements are an integral part of this statement.
26
City of Federal Way 2012 CAFR
Basic Financial Statements
ASSETS
Equity in pooled cash & investments
Prepaid insurance/debt service
Receivables (net):
Taxes
Accounts and contracts
Restricted Cash
Due from other governments
Interfund loans receivable
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND
BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Deposits payable
Interfund loans payable
TOTAL LIABILITIES
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2012
Downtown
Nonmajor
Redevelopment
Transportation
Governmental
Total
$ 2,176,561
$ 15,205,345
$ 7,705,151 $
47,785,386
-
-
-
18,771
(7,880)
-
-
1,831,786
-
46,693
51,369
-
-
111,212
177,673
361,575
1,888,756
-
-
-
10,000
2,168,681
15,383,018
8,113,419
51,697,280
12,000 226,546 358,293
1,211,574
- - -
7,391
- - 12,206
1,013,459
- - 10,000
10,000
12,000 226,546 380,499
2,242,424
DEFERRED INFLOWS OF RESOURCES (7,902)
Fund Balance:
Nonspendable
Restricted
Committed
Unassigned
TOTAL FUND BALANCES
2,025,153
139,429
97,734 627,489
- 69,398
10,807,760 3,241,767 18,139,753
4,348,712 4,393,420 15,834,998
- - 14,783,220
2,164,582 15,156,472 7,635,187 48,827,368
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 2,168,680 $ 15,383,018 $ 8,113,420
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets are used in governmental activities are not financial resources and, therefore,
are not reported in the funds. 467,293,556
Investment in joint venture is not a financial resource and, therefore, not reported in the funds 18,779,354
Other long-term assets are not available to pay for current -period expenditures and, therefore,
are deferred inflow of resources in the funds 351,662
Internal service funds are used by management to charge the costs of insurance, information systems,
mail and duplication, fleet, and building management to individual funds. The assets and liabilities
of the internal service funds are included in governmental activities in the statement of net positior 32,340,220
Long-term liabilities, including bonds payable, are not due and payable in the current period
and, therefore, are not reported in the funds. (29,119,984)
Net position of governmental activities $ 538,472,176
The notes to the financial statements are an integral part of this statement.
27
City of Federal Way 2012 CAFR
Basic Financial Statements
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2012
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
General
Street
Utility Tax
$ 22,497,545 $ - $ 13,083,178
2,402,123 99,245 -
2,223,210 1,329,384 -
3,049,783 215,585 -
1,111,542 - -
94,311 606 3,405
429,533 34,569 -
Debt
---= --
$ 1,507,315
3,287
31,808,047 1,679,389 13,086,583 1,510,602
3,413,961 - 49,000 -
26,552,884 - - -
- 4,088,227 - -
2,288,187 - - -
754,311 - - -
3,632,440 - - -
- - 480,760
- - - 602,572
190,464 2,190 - -
36,832,247 4,090,417 49,000 1,083,332
OVER (UNDER) EXPENDITURES
(5,024,200)
(2,411,028)
13,037,583
427,270
OTHER FINANCING SOURCES (USES)
Transfers in
9,088,018
2,419,371
-
913,892
Transfers out
(1,772,871)
(8,343)
(12,554,760)
(1,025,000)
TOTAL OTHER FINANCING
SOURCES (USES)
7,315,147
2,411,028
(12,554,760)
(111,108)
NET CHANGE IN FUND BALANCES
2,290,947
-
482,823
316,162
FUND BALANCES - BEGINNING
12,644,148
100,000
4,170,864
3,866,183
FUND BALANCES - ENDING
$ 14,935,095
$ 100,000
$ 4,653,687
$ 4,182,345
The notes to the financial statements are an integral part of this statement.
28
City of Federal Way 2012 CAFR
Basic Financial Statements
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2012
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Downtown
Redevelopment Transportation
Nonmajor
Governmental Total
$ 8,066 $ -
$ 353,955
$ 37,450,059
- -
-
2,501,368
- 2,539,012
1,539,408
7,631,014
- 504,422
1,917,172
5,686,962
- -
2,260,336
3,371,878
2,003 12,493
6,378
122,483
- -
238,728
702,830
10,069 3,055,927
6,315,977
57,466,594
- - 939,168
4,402,129
- - 9,386
26,562,270
- 13,812 1,937,144
6,039,183
- - 409,042
409,042
52,539 - 304,489
2,645,215
- - -
754,311
- - 2,244,930
5,877,370
- - -
480,760
- - -
602,572
- 3,316,321 828,783
4,337,758
52,539 3,330,133 6,672,942
52,110,610
OVER (UNDER) EXPENDITURES
(42,470)
(274,206)
(356,965)
5,355,984
OTHER FINANCING SOURCES (USES)
Transfers in
-
1,621,000
2,186,000
16,228,281
Transfers out
-
-
(1,007,807)
(16,368,781)
TOTAL OTHER FINANCING
SOURCES (USES)
-
1,621,000
1,178,193
(140,500)
NET CHANGE IN FUND BALANCES
(42,470)
1,346,794
821,228
5,215,484
FUND BALANCES - BEGINNING
2,207,052
13,809,678
6,813,959
43,611,884
FUND BALANCES - ENDING $
2,164,582
$ 15,156,472
$ 7,635,187
$ 48,827,368
The notes to the financial statements are an integral part of this statement.
29
City of Federal Way 2012 CAFR
Basic Financial Statements
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2012
Amounts reported for governmental activities in the statement of activities (page 19) are 2012
different because:
Net change in fund balances --total governmental funds $ 5,215,485
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which (54,239)
capital outlays exceeded depreciation in the current period.
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. (94,711)
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however,
has any effect on net position. Also, governmental funds report the issuance
proceeds of new debt as current financial resources and payment as the use
of current resources, whereas these amounts reduce the net position. 541,000
Internal service funds are used by management to charge costs of risk management,
information systems, mail & duplication, fleet, and building systems to the funds. 177,632
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in the funds. 68,057
Change in net position of governmental activities $ 5,853,224
The notes to the financial statements are an integral part of this statement.
30
City of Federal Way 2012 CAFR
Basic Financial Statements
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Economic environment
Health
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 22,286,000
$ 22,304,000
$ 22,497,545
$ 193,545
2,345,000
2,120,000
2,402,123
282,123
950,432
2,044,519
2,223,210
178,691
2,646,723
2,727,336
3,049,783
322,447
1,257,150
1,256,468
1,111,542
(144,926)
113,000
72,000
94,311
22,311
386,150
410,915
429,533
18,618
29,984,455 30,935,238 31,808,047 872,809
3,886,120
6,068,320
3,413,961
2,654,359
27,508,759
27,966,232
26,552,884
1,413,348
2,659,603
2,723,741
2,288,187
435,554
722,039
858,735
754,311
104,424
3,752,150
3,980,114
3,632,440
347,674
-
164,803
190,464
(25,661)
38,528,671 41,761,945 36,832,247 4,929,698
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (8,544,216) (10,826,707) (5,024,200) 5,802,507
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
8,483,357 9,366,359 9,088,018 (278,341)
(2,219,541) (2,633,233) (1,772,871) 860,362
6,263,816 6,733,126 7,315,147 582,021
(2,280,400) (4,093,581) 2,290,947 6,384,528
5,081,826 12,644,148 12,644,148 0
FUND BALANCES - ENDING $ 2,801,426 $ 8,550,567 $ 14,935,095 $ 6,384,528
The notes to the financial statements are an integral part of this statement.
31
City of Federal Way 2012 CAFR
Basic Financial Statements
STREET FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Licenses and permits
$ 115,271
$ 115,272
$ 99,245
$ (16,027)
Intergovernmental
1,073,000
1,438,260
1,329,384
(108,876)
Service charges and fees
221,222
201,624
215,585
13,961
Interest
2,000
2,000
606
(1,394)
Other
47,526
27,122
34,569
7,447
TOTAL REVENUES
1,459,019
1,784,278
1,679,389
(104,889)
EXPENDITURES
Current:
Transportation 4,342,927 5,047,449 4,088,227 959,222
Capital outlay - - 2,190 (2,190)
TOTAL EXPENDITURES 4,342,927 5,047,449 4,090,417 957,032
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (2,883,908)
(3,263,171)
(2,411,028)
852,143
OTHER FINANCING SOURCES (USES)
Transfers in 2,883,908
3,272,536
2,419,371
(853,165)
Transfers out -
(9,365)
(8,343)
1,022
TOTAL OTHER FINANCING
SOURCES (USES) 2,883,908
3,263,171
2,411,028
(852,143)
NET CHANGE IN FUND BALANCES - - - -
FUND BALANCES - BEGINNING 100,000 100,000 100,000 -
FUND BALANCES - ENDING $ 100,000 $ 100,000 $ 100,000 $ -
The notes to the financial statements are an integral part of this statement.
32
City of Federal Way 2012 CAFR
Basic Financial Statements
UTILITY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Taxes $ 12,546,000 $ 12,420,000 $ 13,083,178 $ 663,178
Interest 30,000 6,000 3,405 (2,595)
TOTAL REVENUES 12,576,000 12,426,000 13,086,583 660,583
EXPENDITURES
Current:
General government 49,000 49,000 49,000 -
TOTAL EXPENDITURES 49,000 49,000 49,000 -
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 12,527,000 12,377,000 13,037,583 660,583
OTHER FINANCING SOURCES (USES)
Transfers out (12,837,357) (12,833,187) (12,554,760) 278,427
TOTAL OTHER FINANCING
SOURCES (USES) (12,837,357) (12,833,187) (12,554,760) 278,427
NET CHANGE IN FUND BALANCES
(310,357)
(456,187)
482,823 939,010
FUND BALANCES - BEGINNING
2,920,156
4,170,864
4,170,864 -
FUND BALANCES - ENDING
$ 2,609,799
$ 3,714,677
$ 4,653,687 $ 939,010
The notes to the financial statements are an integral part of this statement.
33
City of Federal Way 2012 CAFR
Basic Financial Statements
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2012
Governmental
Business -type
Activities - Enterprise
Funds
Activities
Surface Water
Dumas Bay
Internal
Management
Centre
TOTAL
Service
ASSETS
Current Assets
Equity in pooled cash & investments
$ 5,471,809
$ 334,331
$ 5,806,139
$ 17,058,370
Prepaid items
-
-
-
5,000
Receivables (net):
Accounts and contracts
122,995
16,867
139,862
-
Due from other governments
427,477
-
427,477
-
TOTAL CURRENT ASSETS
6,022,281
351,198
6,373,478
17,063,370
Property, plant and equipment
Land
8,823,888
2,109,640
10,933,528
-
Building/structures
19,849
3,581,015
3,600,864
16,515,708
Machinery/furniture/equipment
47,972,459
118,374
48,090,833
15,805,700
Infrastructure
1,916,645
-
1,916,645
-
Construction in progress
2,023,638
378,808
2,402,446
-
Less accumulated depreciation
(12,936,942)
(2,881,177)
(15,818,119)
(16,707,188)
TOTAL NONCURRENT ASSETS
47,819,537
3,306,660
51,126,197
15,614,220
TOTAL ASSETS
53,841,818
3,657,858
57,499,675
32,677,590
LIABILITIES AND FUND EQUITY
Current Liabilities:
Vouchers/payroll payable
56,175
13,291
69,466
234,237
Retainage payable - with escrow agent
-
-
-
-
Due to other governments
-
-
-
Deposits payable
51937
5,937
-
Deferred revenue
-
-
-
-
Public Works trust fund loan payable
182,359
-
182,359
-
Compensated absences payable
3,274
-
3,274
-
TOTAL CURRENT LIABILITIES
241,808
19,228
261,036
234,237
Long -tern liabilities:
Public Works trust fund loan payable
662,958
-
662,958
-
Compensated absences payable
51,065
12,727
63,792
44,173
TOTAL LONG-TERM LIABILITIES
714,023
12,727
726,750
44,173
TOTAL LIABILITIES
955,831
31,955
987,786
278,410
DEFERRED INFLOW OF RESOURCES
114,631
180,546
295,177
-
Net investment in capital
46,974,220
3,306,660
50,280,880
15,614,220
Restricted for:
Customer deposits
-
5,937
5,937
-
Steel Lake & North Lake Mgmt District
20,559
-
20,559
-
Unrestricted
5,776,577
132,760
5,909,337
16,784,960
TOTAL NET POSITION
$ 52,771,356
$ 3,445,357
56,216,713
$ 32,399,180
Adjustment to reflect the consolidation of internal service fund activities related to
enterprise funds
58,960
NET POSITION OF BUSINESS -TYPE ACTIVITIES
$ 56,275,678
The notes to the financial statements are an integral part of this statement.
34
City of Federal Way 2012 CAFR
Basic Financial Statements
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For Year Ended December 31, 2012
Governmental
Business -type
Activities - Enterprise
Funds
Activities
Surface Water
Dumas Bay
Internal
Management
Centre
TOTAL
Service
OPERATING REVENUES:
Service charges and fees
$ 3,617,369
$ 587,152
$ 4,204,521
$ 5,559,201
Intergovernmental
576,182
-
576,182
69,898
Miscellaneous
18,205
-
18,205
217,610
TOTAL OPERATING REVENUES
4,211,756
587,152
4,798,908
5,846,709
OPERATING EXPENSES:
Personal services
1,535,929
301,315
1,837,243
761,271
Materials and supplies
139,877
131,613
271,490
607,838
Services and charges
640,508
220,286
860,794
2,230,725
Intergovernmental
147,030
1,928
148,958
175,417
Depreciation
498,346
181,997
680,343
2,175,432
Interfund charges
294,777
35,497
330,274
-
TOTAL OPERATING EXPENSES
3,256,467
872,636
4,129,102
5,950,683
OPERATING INCOME (LOSS)
955,289
(285,484)
669,806
(103,974)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets - - - 47,462
Interest income 10,238 354 10,592 13,775
Interest expense (10,277) - (10,277) -
TOTAL NON -OPERATING REVENUES (EXPENSES) (39) 354 315 61,237
INCOME (LOSS) BEFORE TRANSFERS 955,250 (285,130) 670,121 (42,737)
Capital contributions
Transfers in
Transfers out
CHANGE IN NET POSITION
409,181
(409,181)
955,250
- - 214,922
140,500 549,681 56,790
- (409,181) (56,790)
(144,630)
NET POSITION - BEGINNING 51,816,106 3,589,988
NET POSITION - ENDING $ 52,771,356 $ 3,445,357
Adjustment to reflect the consolidation of internal service fund activities related to enterprise
CHANGES IN NET POSITION OF BUSINESS -TYPE ACTIVITIES
810,621 172,185
32,226,994
$ 32,399,180
(5,447)
$ 805,174
The notes to the financial statements are an integral part of this statement.
35
City of Federal Way 2012 CAFR
Basic Financial Statements
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For Year Ended December 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other funds for goods and services
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in
Transfers out
NET CASH PROVIDED BY NONCAPITAL FINANCINC
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES,
Principal paid on debt service
Interest paid on debt service
Acquisition of capital asset/construction work in progress
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Depreciation expenses
(Increases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease)in retainage payable
Increases/(decrease) in due to other government
Increases/(decrease)in deposits payable
Increases/(decrease)in deferred revenue
Increases/(decrease) in accrued payroll/compensated absences payable
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assets
Governmental
Business -type Activities - Enterprise Funds
Activities
Surface Water
Dumas Bay
Internal
Management
Centre
TOTAL
Service
$ 3,659,246
$ 639,366
$ 4,298,612
$ 5,724,306
-
-
-
(452,921)
(772,710)
(355,094)
(1,127,804)
(2,042,459)
(1,541,938)
(306,941)
(1,848,879)
(763,460)
(294,777)
(35,497)
(330,274)
(164,020)
(1,928)
(165,948)
(662,573)
267,926
267,926
212,036
1,153,728
(60,094)
1,093,633
2,014,929
409,181
140,500
549,681
56,790
(409,181)
-
(409,181)
(56,790)
140,500
140,500
(182,359) (182,359)
(10,277) (10,277)
(725,980) (725,980) (1,212,045)
57 759
(918,616)
-
(918,616)
(1,159,287)
10,238
354
10,592
13,775
10,238
354
10,592
13,775
245,350
80,760
326,109
869,417
5,226,459
253,571
5,480,030
16,188,952
5,471,812
334,329
5,806,140
17,058,367
955,288
(285,484)
669,804
(103,974)
498,346
181,997
680,343
2,175,432
244,257
3,967
248,224
40,571
(326,459)
-
(326,459)
49,060
13,334
(3,795)
9,539
(143,971)
(5,660)
(5,660)
(16,990)
-
(16,990)
600
600
(202,380)
48,247
(154,133)
(6,009)
(5,626)
(11,635)
(2,189)
198,439
225,390
423,829
2,118,903
$ 1,153,728 $
(60,094) $
1,093,633 $
2,014,929
$ 214,922
The notes to the financial statements are an integral part of this statement.
36
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
NOTES TO THE BASIC FINANCIAL STATEMENTS
December 31, 2012
INDEX
Note
Page
1
Summary of Significant Accounting Policies...............................................................................
38
ReportingEntity...................................................................................................................
38
Government -wide and Fund Financial Statements...............................................................
38
Measurement Focus, Basis of Accounting, and Financial Statement Presentation ..............
38
Financial Statement Presentation.........................................................................................
41
BudgetaryInformation.........................................................................................................
41
Assets, Liabilities, Fund Balance and Net Position..............................................................
43
Cashand Investments..................................................................................................
43
Receivables..................................................................................................................
43
Amounts Due to and from Other Funds; Interfund Loans ...........................................
44
Inventories...................................................................................................................
44
CapitalAssets..............................................................................................................
44
Compensated Absences Payable..................................................................................
45
Long -Term Liabilities..................................................................................................
45
Deferred Outflows/Inflows of Resources....................................................................
45
Fund Balance Classification........................................................................................
45
Interfund Transactions.................................................................................................
46
2
Reconciliation of Government -wide & Fund Financial Statements ..............................................
47
3
Stewardship, Compliance and Accountability..............................................................................
47
4
Supplemental Appropriations.......................................................................................................
48
5
Deposits and Investments..............................................................................................................
48
6
Receivables, Due from Other Governments and Deferred Inflows of Resources .........................
50
7
Due To Other Governments..........................................................................................................
51
8
Capital Assets...............................................................................................................................
52
9
Pension Plans................................................................................................................................
54
10
Risk Management.........................................................................................................................
61
11
Long -Term Liabilities...................................................................................................................
62
12
Interfund Transactions..................................................................................................................
65
13
Contingencies and Litigation........................................................................................................
67
14
Joint Ventures...............................................................................................................................
67
15
Accounting and Reporting Changes..............................................................................................
69
16
Subsequent Event..........................................................................................................................
69
37
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended December 31, 2012
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Federal Way have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the
accepted standard setting body for establishing governmental accounting and financial reporting principles. The significant
accounting policies are described below.
REPORTING ENTITIES
The City's Comprehensive Annual Financial Report (CAFR) includes the funds, agencies and boards controlled by or
dependent on the City. In conformance with Governmental Accounting Standards Board (GASB) Statement 14, "The
Financial Reporting Entity", the primary basis of determining whether outside agencies and organizations should be
considered component units of the City is Financial Accountability. Financial Accountability is dependent on the City's
obligation to redeem the organization's debts, to finance the organization's deficits, and the extent to which subsidies from
the City constitute a major portion of the organization's total resources. Applying these criteria, as outlined in GASB
Statement 14, the City has no relationships that qualify as component units.
Financial Accountability
Financial accountability is defined as appointment of a voting majority of an agency's or organization's board, and either the
City's ability to impose will on the agency or organization or the possibility that the agency or organization will provide a
financial benefit to or impose a financial burden on the City.
Joint Ventures
A joint venture is a legal entity or organization which results from a contractual arrangement that is owned, operated, or
governed by two or more participants as a separate activity subject to joint control, in which participants retain an ongoing
financial interest or an ongoing financial responsibility. The City participates in two joint ventures: Valley Communications
Center and South Correctional Entity (SCORE). See Note 14, Joint Venture, which more fully describes these organizations.
GOVERNMENTAL -WIDE AND FUND FINANCIAL STATEMENTS
The government -wide financial statements (i.e. the statement of net position and the statement of activities) report
information on all activities of the primary government. For the most part, the effect of interfund activity has been removed
from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business -type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Our policy is
to allocate indirect costs to specific functions or segments. Program revenues include 1) charges to customers or applicants
who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and 2)
grant and contributions that are restricted to meeting the operational or capital requirements, or a particular function or
segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate fund financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING, FINANCIAL STATEMENT PRESENTATION
The government -wide financial statements are reported using the economic resources measurement focus and the accrual
basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the
year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
38
City of Federal Way 2012 CAFR
Governmental Funds
Notes to the Basic Financial Statements
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the City of Federal Way considers revenues to be available if they are
collected within 30 days of the end of the current fiscal period with an exception to utility and gambling taxes, which is
extended to 60 days. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property taxes, licenses, and interest associated within the current period are all considered to be susceptible to accrual and
have been recognized as revenues of the current fiscal period. Only the portion of special assessment receivable due within
the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items
are considered to be measurable and available only when cash is received by the City.
The City reports the following major governmental funds:
General Fund — This is the City's general operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
Street Fund — This fund accounts for the receipt and disbursement of State -levied motor vehicle fuel taxes which
must be accounted for in a separate fund and expended for street -oriented engineering, maintenance and operations.
Utility Tax Fund — This fund was established to account for all utility tax receipts. These receipts will subsequently
be distributed to various funds to provide for debt service, capital projects, maintenance and operations
expenditures, etc. as determined by the City Council.
Debt Service Fund — This fund accounts for the accumulation of resources for the payment of general obligation and
assessment bond principal, interest and related costs.
Downtown Redevelopment CIP Fund — This fund was established to accumulate resources to set aside for
downtown projects.
Transportation CIP Fund — This fund accounts for receipts and disbursements related to acquisition, design,
construction and any other related street project expenditures.
The City reports the following fund groups as non -major funds:
Special Revenue Funds — These funds are to be used to account for the proceeds of revenues and sources (other than
special assessments, expendable trust or major capital projects) that are committed or legally restricted to
expenditures for specified purposes.
Capital Project Funds — These funds account for the acquisition or construction of major capital facilities with the
exception of those facilities financed by the proprietary and trust funds. The major sources of revenues for this fund
are general obligation bond proceeds, grants from other agencies, local taxes and contributions from other funds.
Proprietary Funds
Proprietary funds are used to account for activities similar to those found in the private sector where the intent of the
governing body is to finance the full cost of providing services, including depreciation, primarily through user charges. The
measurement focus for these funds is based on the commercial model, which uses a flow of economic resources approach.
Under this approach, the operating statements for the proprietary funds focus on a measurement of net income (revenues and
expenses) and both current and non -current assets and liabilities are reported on the related balance sheets.
Private sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in
both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or
contradict guidance of the Governmental Accounting Standards board. Governments also have the option of following
subsequent private -sector guidance for their business -type activities and enterprise funds, subject to the same limitation. The
City of Federal Way has elected not to follow subsequent private -sector guidance.
39
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
As a general rule the effect of the inter -fund activity has been eliminated for the government -wide financial statements.
Amounts reported as program revenue include 1) charges to customers, 2) operating grants and contributions, and 3) capital
grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues
rather than program revenues. General revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the enterprise and internal service funds are primarily user charges,
the cost of providing goods or services to the general public on a continuing basis. Operating expenses for enterprise funds
and internal service funds includes the cost of sales and services, administrative expenses, and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses.
The City reports the following major proprietary funds:
Enterprise Funds
The City uses enterprise funds to account for government activities that are financed and operated in a manner similar to
private business. Costs of providing services to the general public are primarily financed by user fees.
Surface Water Management Fund — This fund was established to administer and account for all receipts and
expenditures related to the City's surface and storm water management system.
Dumas Bay Centre Fund — This fund was established to account for the revenues and expenses related to the
acquisition, capital improvements maintenance and operations of the City -owned Dumas Bay Centre and Knutzen
Family Theatre.
Internal Service Funds
The City uses Internal Service Funds to account for the financing of goods or services provided by one department or agency
to other departments or agencies of a government, or to other governments, on a cost -reimbursement basis.
A description of each individual Internal Service Fund is included in the Comprehensive Annual Financial Report provided
below:
Risk Management Fund — This fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, medical and dental, unemployment and worker's
compensation claims. Both risk control (to minimize the losses that strike an organization) and risk financing (to
obtain finances to provide for or restore the economic damages of those losses) are involved. The City is currently
self -insuring only State Unemployment Compensation. Related premiums received by the fund are used to
reimburse the unemployment benefits paid to eligible individuals and to establish reserves for the payment of
estimated future unemployment claims liability. The City is also currently recovering costs and building reserves
for general liability including property, casualty, errors and omissions and fidelity coverage.
Information Systems Fund — This fund was established to account for all costs associated with data processing,
telecommunications and the Geographical Information System (GIS). This fund will own and depreciate all non-
proprietary fund assets related to these functions, and will charge equipment/software users for both maintenance
and operating costs and equipment replacement charges based on depreciation schedules.
Support Services Fund — This fund accounts for duplication, graphics and other general support services provided to
departments and funds throughout the City.
Fleet and Equipment Fund — This fund accounts for the cost of maintaining City vehicles and other motorized
equipment. Rates charged to user departments are based on the full cost of maintaining equipment items, including
the recovery of related depreciation expense.
Buildings and Furnishings Fund — This -fund accounts for all costs associated with the operation and maintenance of
specified City buildings. City building facilities and furnishings owned by this Fund. Both maintenance/operating
costs and depreciation recovery will be charged to City departments and funds.
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City of Federal Way 2012 CAFR
Basis of Accounting
Notes to the Basic Financial Statements
Basis of accounting refers to when revenues and expenditures or expenses are recognized and reported in the financial
statements.
The accrual basis of accounting is used by proprietary funds. Under this method, revenues are recognized when earned, and
expenses are recognized when incurred.
The modified accrual basis of accounting is used by governmental funds. Revenues and other financial resources are
recognized when they become susceptible to accrual, i.e., when the related funds become both measurable and available to
finance expenditures of the current period. To be considered "available", revenue must be collected during the current period
or soon enough thereafter to pay current liabilities. The City uses thirty days when evaluating the available criteria.
Expenditures are recognized when the related fund liability is incurred. Since the recognition of depreciation does not reduce
net financial resources, it is not considered as expenditure. Other exceptions include (1) inventories of materials and prepaid
items are reported as expenditures when purchased, (2) interest on long-term debt is not accrued but is recorded as an
expenditure when due, (3) accumulated unpaid vacation and sick pay are considered expenditures when paid.
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 Tares - King County also acts as the City's collection agent for the '/4% and optional 1/4% real estate
excise taxes. Although a time lag occurs in payment of these taxes to the City, since the taxes are actually collected by King
County in December and receipted to the City within 10 days after the end of the year, they are considered to be both
measurable and available, and are, therefore, accrued as revenue at year end. The State of Washington acts as the City's
collection agency for the locally levied sales tax. The sales tax is distributed monthly and remitted to the City in the
following month. The Sales Tax remittance in January is considered both measurable and available and is therefore accrued
as revenue at year-end.
Grant Revenues - Under Section G60.109 of the Codification of Governmental Accounting and Financial Reportinc
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; inter -fund, and intergovernmental service billings related to services
provided in the current year which are outstanding at year end; and any other material revenue amounts determined to be both
measurable and available under current modified accrual accounting practices.
Revenues not considered to meet the criteria for recognition on the modified accrual basis include licenses and permits, fines
and forfeitures, and other miscellaneous revenues which are generally not measurable until received.
FINANCIAL STATEMENT PRESENTATION
In order to obtain an understanding of changes in the City's position and the results of the City's operations, the financial
statements for year end of 2012 should be read in conjunction with the government's financial statements for the year ended
December 31, 2011.
BUDGETARY INFORMATION
Scope of Budget
Annual appropriated budgets are adopted for the general, some special revenue, and debt service funds on the modified
accrual basis of accounting. For governmental funds, there are no differences between the budgetary basis and generally
accepted accounting principles. Budgets for project and grant related special revenue funds and capital project funds are
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City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
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 re -appropriation until authorized amounts are fully expended or the designated
purpose of the fund has been accomplished.
The individual funds within each fund type which are included in the City's annual operating budget (funds budgeted on an
annual basis) are:
General Fund Special Revenue Funds Debt Service Fund
- Street Fund
- Arterial Street
- Utility Tax
- Solid Waste & Recycling
- Federal Way Community Center
- Traffic Safety
- Hotel/Motel Lodging Tax
-Paths & Trails
Procedures for Adopting the Biennial Budget
The City's budget process and the time limits under which the budget must be prepared are defined by the Revised Code of
Washington (RCW) 35A.33. The procedures followed in establishing the annual budget are described below:
By late May the official budget call is made by the Finance Director for current level service budgets and a preliminary
financial forecast.
By late June, departments submit their preliminary expenditure estimates and the Finance department updates the
preliminary revenue estimates to define resources available to finance coming year expenditure programs.
By the first Tuesday in October, the Mayor submits a proposed budget to the City Council. This budget is based on
priorities established by the Council and estimates provided by City departments during the preceding months, and
balanced with revenue estimates made by the Finance Director. Copies of the preliminary budget are provided to the City
Council and made available to staff and the public.
City Council conducts workshops and public hearings on the proposed budget between mid -September and mid -
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.
No later than the first two weeks of November, the City Clerk publishes a notice of the filing of the preliminary budget
and notices of public hearings to be held during preliminary budget deliberations.
Two public hearings on the proposed budget are also held during November and December. Final hearings on the
budget must begin on or before the first Monday of December, and may continue until the 25th day prior to beginning of
the next fiscal year.
By December 31, the City Council makes its adjustments to the proposed budget and adopts a final budget by ordinance.
The final operating budget, as adopted, is published and distributed within the first three months of the following year.
Copies of the adopted budget are made available to the public.
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City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
Amending the Budget
The Mayor is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that
alter the total expenditures of a fund or that affect the number of authorized positions 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.
The budget amounts shown in the financial statements are the final authorized amounts as revised during the year.
The financial statements contain the original and final budget information. The original budget is the first complete
appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental
appropriations, and other legally authorized changes applicable for the fiscal year.
Encumbrances
An encumbrance system is used for budgetary control purposes to record commitments resulting from approved purchase
orders. During the year, encumbrances are recorded in the accounting system at the time purchase orders are issued for
goods and services. Upon payment, the encumbrance is reversed and the actual cost of the related item is recorded as a fund
expenditure. Outstanding encumbrances lapse at year end, are canceled and rolled over to the next fiscal year. Therefore,
these amounts have not been recorded as current year expenditures unless considered to be susceptible to accrual at the end of
the year. The total encumbrances at year-end 2012 for the City were $4,736,238.
ASSETS, LIABILITIES, FUND BALANCE, NET POSITION
Cash and Investments
The City follows the practice of pooling cash and investments of all funds for investment purposes, except for cash held in
escrow, which is disclosed separately on the balance sheet. Each fund's portion of total cash and investments is summarized
by fund type in the combined balance sheet as equity in pooled cash and investments.
It is the City's policy to invest all cash not immediately required for disbursement. At December 31, 2012, the State
Treasurer was holding $66,472,650 in the Local Government Investment Pool. The Local Government 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, 2012, the total cash and cash equivalents were
$70,761,104.
The City's deposits are entirely covered by federal depository insurance (FDIC) or by collateral held in a multiple financial
institution collateral pool administered by the Washington Public Deposit Protection Commission (PDPC).
The City is authorized by State law to purchase certificates of deposit issued by Washington State depositories that
participate in a state insurance pool managed by the Washington Public Deposit Protection Commission; securities purchased
by the Washington State Investment Pool; U.S. Treasury and Agency securities, banker's acceptances trading in the
secondary market; and repurchase agreements with dealers that use authorized securities as collateral.
In accordance with GASB 31, investments in money market investments and participating interest -earning investment
contracts with a remaining maturity of one year or less at the time of purchase are stated at amortized cost. All other
investments are stated at fair value. There was no material deviation from fair value quoted at year-end.
Receivables
Taxes receivable consists of property taxes and related interest and penalties (see Property Tax Note 6). Accrued interest
receivable consists of amounts earned on investments, notes, and contracts at the end of the year.
Due From Other Governments reflects measurable and available intergovernmental grants, entitlements, or State shared
revenues (taxes/charges levied and collected by an intermediary collecting government and distributed on same basis); loans;
and charges for services rendered by the City for another government unit. A separate schedule of Due From Other
Governments is disclosed in Note 6.
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City of Federal Way 2012 CAFR
Amounts Due to and from Other Funds; Interfund Loans
Notes to the Basic Financial Statements
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as either "interfund loans receivable/payable" or "advances to/from other funds." All other outstanding
balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the
governmental activities and business -type activities are reported in the government -wide financial statements as "internal
balances."
Loans between funds must be authorized by the Mayor. In the governmental funds, loans to other funds are offset by a
corresponding reservation of fund balance to indicate that the outstanding loan amounts do not constitute "available
spendable resources" and are, therefore, not available for appropriation. A separate schedule of inter -fund loans receivable
and payable is furnished in Note 12.
Inventories
Inventories in the governmental funds are recorded as expenditures at the time of purchase. Amounts remaining at year-end
are immaterial and, therefore, are not reflected on the balance sheets of those funds. There were no material inventories at
year-end in the Internal Service or Enterprise Funds.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure, are reported in the applicable governmental or
business -type activities columns in the government -wide financial statements.
Major expenditures for capital assets, including capital leases and major repairs that increase useful lives are capitalized.
Maintenance, repairs, and minor renewals are accounted for as expenditures or expenses when incurred. The City has
adopted a general capital asset capitalization policy where an item's cost must equal or exceed $1,000. All capital assets are
valued at historical cost or estimated cost; where historical cost is not known or at an estimated market value for donated
assets.
Depreciation on all capital assets is recorded as an allocated expense in the government -wide Statement of Activities and in
the proprietary fund statements. Capital assets are reported net of depreciation. The City uses a combination of group
depreciation and straight-line depreciation over the life of the assets.
The following summarizes the average service lives used to calculate depreciation for specific categories of assets in the
City's Assets:
Asset Class
Life in Years
Computers.................................................................5-6
Printers & Faxes.............................................................7
Telecommunications Equipment........................................7
Police Radio Equipment.................................................11
Other Office Equipment ..................................
............ 4-10
Office Furniture and Fixtures...........................................10
Recreation Equipment....................................................10
Parks Equipment ...........................................
............. 6-10
Police Equipment.......................................................9-11
Shop/Miscellaneous Equipment..................................10-12
Heavy Work Equipment.............................................10-16
Non -Police Vehicles........................................................7
Police Patrol Vehicles......................................................5
Police Non -Patrol Vehicles............................................7-10
Heavy Trucks ...............................................
............ 8-10
Land Improvements......................................................20
Buildings.....................................................................20
Storm Drainage Systems.................................................20
Infrastructure ...............................................
.......... 15-100
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City of Federal Way 2012 CAFR
Compensated Absences
Notes to the Basic Financial Statements
The City records a liability for all outstanding vacation pay and accrued compensatory time. In governmental funds, vacation
pay and compensatory time is recorded as expenditures when paid which occurs when used or upon termination. In the
entity -wide statements and the proprietary fund statements, vacation pay and compensatory time is recorded as a liability and
expense in the year earned.
Employee vacation leave is accumulated monthly at rates ranging from 12 to 22.5 days per year depending on term of
employment. Employees may accumulate up to a maximum of 240 hours of vacation leave, except the Police Guild, who can
accrue up to a maximum of 360 hours. Outstanding vacation leave is payable upon termination of employment at the
following rate: City Employees up to 240 hours and Police Guild members is at two years of their accrued rate at the time of
termination.
The differences between the governmental fund statements and the entity -wide statements represent reconciling items
between the fund level and government -wide financial statements. The reconciliations are included as part of the financial
statements.
A non-exempt employee may request compensatory time off in lieu of overtime payment. Compensatory time is accrued at a
rate of one and one-half hours for each hour of overtime worked, to a maximum of eighty hours for both City employees and
Police Guild members.
Sick leave may be accumulated up to a maximum of 720 hours for regular City employees per City policy and 1,040 hours
for the Police Guild, per their contract. The monthly accrual rate for City employees is 8 hours per month. Accumulated sick
leave is not payable upon termination of employment. Outstanding sick leave at year-end is not accrued due to the difficulty
in estimating the portion of existing balances likely to result in expenditures in future periods.
Long-term Liabilities
In the government -wide financial statements and the proprietary fund financial statements, long-term debt and other long-
term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary
fund statement of net position. Long-term debt outstanding at year-end is outlined in Note 11.
Deferred Outflows/Inflows of Resources
The deferred inflow of resources 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 inflow of resources.
Fund Balance Classification
Fund balance is a measurement of available financial resources and is the difference between total assets and total liabilities
in each fund.
Beginning with the most restrictive constraints, fund balance amounts will be reported in the following categories:
Nonspendable — amounts that are not in a spendable form or are legally or contractually required to be maintained
intact.
Restricted — amounts that can be spent only for the specific purposes stipulated by external parties either
constitutionally or through enabling legislation.
Committed — amounts that can be used only for the specific purposes determined by formal action of the City
Council. Commitments may be changed or lifted by referring to the formal action that imposed the constraint
originally.
Assigned — amounts intended to be used by the government for specific purposes. Intent can be expressed by the
City Council or the Mayor. In governmental funds other than the general fund, assigned fund balance represents the
amount that is not restricted or committed. This indicates that resources in other government funds, at a minimum,
are intended to be used for the purpose of that fund.
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City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
Unassigned - includes all amounts not contained in other classifications and is the residual classification of the
general fund only. Unassigned amounts are available for any legal purpose.
The responsibility for designating funds to specific classifications shall be as follows:
Committed Fund Balance - The City Council is the highest level of decision -making authority, and the formal
action that is required to be taken to establish, modify, or rescind a fund balance commitment is established by
ordinance approved by the Council.
When multiple categories of fund balance are available for expenditure, the City will start with the most restricted category
and spend those funds first before moving down to the next category with available funds.
2012 FUND BALANCE CLASSIFICATION
Fund Balance
General
Fund
Street Utility Debt Downtown
Tax Service Redevelop.
Transport- Nonmajor
ation Godt
Total
Nonspendable:
Court trust
$ 50,627
$ $ $ $
$ $
$ 50,627
Prepaid insurance/debt service
18,771
18,771
Restricted for:
Police covert/seizure
60,585
60,585
Future debt payments
-
2,004,488
2,004,488
Special Contracts/Studies
-
502,375
502,375
Hotel/Motel Lodging Tax
102,416
102,416
Path & Trails Reserves
166,668
166,668
Comm. Development Block Grant
40,715
40,715
Downtown Redevelopment
2,025,153
-
2,025,153
City Facilities CIP
-
- 657,781
657,781
Parks CIP
- 1,771,812
1,771,812
Transportation CIP
10,807,760 -
10,807,760
Committed to:
Capital, debt, and operations
-
3,577,357 2,177,857
-
5,755,214
Petty cash/advance travel
21,600
- -
21,600
Proposition 1
-
1,076,330
-
1,076,330
Transportation CIP
- -
4,348,712
4,348,712
Downtown Redevelopment
139,429
-
139,429
City Facilities CIP
-
480,071
480,071
Arterial Street
79,530
79,530
Solid Waste/Recycling
-
172,002
172,002
2% for the Arts
293
-
293
Federal Way Community Center
-
1,197,498
1,197,498
Traffic Safety
1,975,866
1,975,866
Snow/ice removal
100,000
-
100,000
Parks CIP
-
488,453
488,453
Unassigned:
General Fund
14,783,219
-
-
14,783,219
Total Fund Balance:
$14,935,095
$100,000 $ 4,653,687 $ 4,182,345 $ 2,164,582
$ 15,156,472 $ 7,635,187
$ 48,827,368
Interfund Transactions
There are four types of transactions between funds - inter -fund loans, inter -fund services provided and used, inter -fund
reimbursements, and inter -fund transfers. Interfund loans are temporary borrowings of cash which do not affect operating
statements, but which may incur interest expense or expenditure to the borrowing fund. Interfund services provided and used
46
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
are equivalent to buying goods or services from an outside vendor, and are accounted for by the related funds as revenues,
expenditures or expenses. Interfund reimbursements are repayments to a fund for expenditures or expenses that belong to
another fund. They involve only expenditure or expense accounts.
Except for the Enterprise Fund, transfers are accounted for as "other financing sources and uses" and are therefore included in
the operating statements.
NOTE 2 — RECONCILIATION OF GOVERNMENT -WIDE & FUND FINANCIAL STATEMENTS
Explanation of Certain Differences Between the Governmental Funds Balance Sheet and the Government -Wide
Statement of Net Position
The governmental funds' balance sheet includes reconciliation between fund balance — total governmental funds and net
position — governmental activities as reported in the government -wide statement of net position. One element of the
reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period, and,
therefore, are not reported in the funds." The details of this $29,119,984 difference are as follows:
Bonds Payable at beginning of year $28,157,950
Plus: Inclusion of compensated absences 1,503,034
Less: Current year reduction of principal portion of debt (541,000)
Net Adjustment to reduce fund balance -total governmental
funds to arrive at net position - governmental activities $ 29,119,984
Explanation of Certain Differences Between the Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances and the Government -Wide Statement of Activities
The governmental funds' statement of revenues, expenditure, and changes in fund balances includes reconciliation between
net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in
the government -wide statement of activities. One element of that reconciliation explains that "Governmental funds report
capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense." The details of this ($54,238) difference are as follows:
Capital outlay $ 7,024,012
Less: Governmental depreciation expense (6,087,383)
Plus: Decrease investment in joint venture (990,867)
Net adjustment to increase net changes in fund balances -
Total governmental funds to arrive at changes in net position
ofgovernmental activities $ (54,238)
Another element of the reconciliation states that "Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds." This item presents:
Property taxes earned reported as deferred inflows in the fund statements $ (94,711)
Another element of the reconciliation states that "Some expenses reported in the statement of activities do not require the use
of current financial resources and, therefore, are not reported as expenditures in the funds." This item represents:
Compensated absences $ 68,057
NOTE 3 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
There have been no material violations of finance -related legal or contractual provisions, and there have been no expenditures
exceeding legal appropriations in any of the funds of the City.
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City of Federal Way 2012 CAFR
NOTE 4 — SUPPLEMENTAL APPROPRIATIONS
Notes to the Basic Financial Statements
Operating Budget Funds
Appropriations established during 2012 for the City's operating budget funds are provided below. As explained in Note 1,
both original and supplemental appropriations are adopted by the City Council by ordinance. Both original and final budget
appropriations are shown on the accompanying financial statements. The final budget values include all adopted adjustments
to original budget amounts.
General Fund
Special Revenue Funds:
Street Fund
Arterial Street Fund
Utility Tax Fund
Solid Waste/Recycling Fund
Hotel/Motel Lodging Tax
Federal Way Conmiunity Center
Traffic Safety
Subtotal Special Revenue Funds
Debt Service Fund
2012
ORIGINAL SUPPLEMENTAL
BUDGET APPROPRIATIONS FINAL BUDGET
$ 40,748,229 $ 3,646,968 $ 44,395,197
4,342,923
1,523,500
12,886,357
420,575
161,300
2,177,404
830,000
22,342,059
2,182,669
713,888
469,704
(4,170)
35,867
248,623
67,716
26,754
1,558,382
5,056,811
1,993,204
12,882,187
456,442
409,923
2,245,120
856,754
23,900,441
2,182,669
Total: $ 65,272,957 $ 5,205,350 $ 70,478,307
NOTE 5 — DEPOSITS AND INVESTMENTS
As required by state law, all deposits and investments of the City's funds are obligations of the U.S. Government, the Local
Government Investment Pool, bankers' acceptances, or deposits with Washington State banks and savings and loan
institutions. In 2012 the City utilized all the above with the exception of bankers' acceptances as legal authorized investment
instruments. The City's investment policies are described in Note 1.
Cash and Deposits
The City follows the practice of pooling cash and investments of all funds, except restricted funds and funds held with a
trustee or in escrow, for investment purposes as disclosed in Note 1. At December 31, 2012, the equity in pooled cash and
investments was $70,761,104.
At year-end, the City had $70,761,104 in cash and cash equivalents which consisted of investments with the Local
Government Investment Pool of $66,472,650 the City's checking account bank balance prior to outstanding checks was
$4,189,117; and petty cash and change funds, advance travel fund and investigative fund totaling $48,710, and Court Trust of
$50,627. No deposits were uninsured or uncollateralized. Insurance coverage up to $250,000 is through federal depository
insurance and the Washington Public Deposit Protection Commission (WPDPC) for amounts over $250,000. Under State
statute, members of WPDPC, a multiple -financial institution collateral pool, may be assessed on a prorated basis if the pool's
collateral is insufficient to cover a loss. Investments are carried at cost or book value because the City holds all investments
until maturity. The fair value of the positions in the State Investment Pool is the same as the value of the pool shares. The
Local Government Investment Pool is managed by the Treasurer of the State of Washington.
As of December 31, 2012 the City had the following investments and maturities:
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City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
SC Ul OF E VFS TMINTS BY MATMUTIES
AS OF DECEMBER 31, 2012
Investment maturities
Less than 1 to 2 Greater than
Investment Type Book Value 1 year years 3 years
State Investment Pool $ 66,472,650 $ 66,472,650 $ - $ -
$ 66,472,650 $ 66,472,650 $ - $ -
Reconciliation of Government -Wide Statement of Net Position:
Key Bank and Bank of America checking account per books $ 4,189,117
Petty cash/change fund/advance travel/investigative fund 48,710
Local Government Investment Pool 66,472,650
Municipal Court Trust on books
Subtotal cash and cash equivalents
Cash with escrow agent
50,627
70,761,104
Total cash and investments, Government -Wide
Statement of Net Position $ 70,761,104
Investments
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy states
that "no more than 20% of the portfolio may be invested beyond 12 months, and average maturity of the portfolio may not
exceed 2 years."
Credit Risk
Credit risk is the risk that an issuer or other counter -party has to an investment in not fulfilling its obligations. This is
measured by the assignment of a rating by a nationally recognized statistical rating organization.
State law and the City's investment policy limits the instruments in which the City may invest. The following are categories
of investments authorized under the City's policy, in general order of safety and liquidity: Local Government Investment
Pool; repurchase agreements; U.S. treasury obligations; U.S. government agencies; U.S. government -sponsored
corporations/instrumentalities; bankers' acceptances (secondary market domestic and foreign); commercial paper (secondary
market); insured certificates of deposit (banks and savings & loans); and uninsured/collateralized certificates of deposit
(banks and savings & loans).
The credit risk of the State Investment Pool is limited to obligations of the US Government, government sponsored
enterprises, or insured demand deposit accounts and certificates of deposit.
As of December 31, 2012, all City investments were in the State Local Government Investment Pool. The State Investment
Pool ratings for Long Term Bonds are as follows: Fitch Investors Service, Inc. AA+, Moody's Investors Services Aal, and
Standard & Poor's Ratings AA+.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City
diversifies its investments by security type and institution. The investment policy states: "no more than 5% of the portfolio
may be invested in the securities of a single issuer, except for the U.S. Treasury, to which no limits apply, and commercial
paper, which is limited to 3% of the portfolio. No more than 30% of the portfolio may be invested in Bankers' Acceptances
and Certificates of Deposit."
Other Information
Below is a schedule of investments by fund type:
49
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
S CBEDULE OF INVESTMENTS BY FUND CATEGORY AND INVESTMENT TYPE
AS OF DECEMBER 31, 2012
State Investment
Fund Type
Pool
Total
General Fund
$ 13,495,702 $
13,495,702
Special Revenue Funds
11,953,530
11,953,530
Capital Projects Funds
21,627,894
21,627,894
Enterprise Funds
3,377,465
3,377,465
Internal Services Funds
16,018,059
16,018,059
Total: $ 66,472,650 $
66,472,650
NOTE 6 — RECEIVABLES AND DUE FROM OTHER GOVERNMENTS
Property Taxes
The King County Treasurer is responsible for collecting property taxes levied in the County by all taxing districts. Amounts
collected by the County on the City's behalf are remitted daily.
PROPERTY TAX CALENDAR
January 1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100% of market value.
October 31 Second installment is due.
As described in Note 1, taxes are levied and become an enforceable lien against properties as of January 1. Annual tax
billings may be paid in two equal installments, due April 30 and October 31. At December 31, 2011, the total balance of
property taxes receivable recorded by the City was $329,242. Of this, $307,489 is recorded as deferred inflow of resources,
since it was not collected within the first 30 days of 2013.
Property taxes are recorded as a receivable when levied, offset by deferred inflow of resources. During the year, property tax
revenues are recognized when cash is collected. At year-end, property tax revenues are recognized for collections expected
to occur within 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 ($0.50).
1. Chapter 84.55 of the State RCW was amended most recently by Initiative No. 747 (which was passed by voters on
November 6, 2001), limits the total dollar amount of regular property taxes levied by the City to the amount of such
taxes levied in the three most recent years multiplied by a limit factor, plus an adjustment to account for taxes on
new construction, improvements and state -assessed property at the previous year's rate. As amended by Initiative
No. 747, the limit factor is the lesser of 101% or 100% plus the percent change in the Implicit Price Deflator, unless
a greater amount is approved by a simple majority of the voters; and
2. The Washington State Constitution limits the total regular property taxes to 1% of assessed valuation or $10 per
$1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or
below the 1% limit.
The City's regular levy for 2012 was $1.3011 per $1,000 on an assessed valuation of $7,722,983,802 for a total regular levy
of $9,967,650.
50
City of Federal Way 2012 CAFR
Deferred Inflows of Resources
Notes to the Basic Financial Statements
The table below provides details of the deferred inflows of resources as reported on the statement of net position. Grant
reimbursements and refuse collection fees are receivable within one year of the end of the fiscal period.
DEFERRED INFLOWS OF RESOURCES
AS OF DECEMBER 31, 2012
Downtow
Total
Surface
Dumas
n Debt
Nonmajor
General
Water
Bay
Total
Deferred Inflows of Resources
General
Street Redev. Service
Gov't
Govt
Mgmt
Centre
Proprietary
Property tax
$ 315,391
$ $ (7,902) $
$
$ 307,489
$ -
$
$ -
SWM fees
-
-
114,631
114,631
Public Defender Grant
23,000
-
23,000
-
-
King County New Solution Grant
428
-
428
Commute Trip Reduction Grant
-
65,009
65,009
South King Fire & Rescue Buy -In
-
- 97,050
97,050
-
of ValleyCom
Recreation programs / facility
rentals
36,779
- -
97,734
134,513
180,546
180,546
Total by Fund:
1 $ 375,598
$ 65,009 $ (7,902) $ 97,050
$ 97,734
$ 627,489
$ 114,631
$ 180,546
1 $ 295,177
Receivables & Due from Other Governments
The receivables for the fiscal year ended December 31, 2012 on the government -wide statement of net position are detailed in
the following schedule.
RECEIVABLES & DUE FROM OTHER GOVMNIVIENTS
AS OF DECEMBER 31, 2012
Receivable
General
Street
Utility Tax
Debt Downtown Transport-
Service Redevelopment ation
Nonmajor
Govt
Proprietary
Total
Property tax
$ 337,123
$
$
$ - $ (7,880) $ -
S
$
$ 329,242
Real Estate Excise tax
-
301,156
301,156
Utility tax
-
1,177,253
-
1,177,253
Gambling tax
24,134
-
-
-
24,134
Recreation programs/
facilities
4,676
-
46,693
16,867
68,237
Grants & contributions
156,957
15,273
153,407
309,320
382,251
1,017,208
Otherreceivable
-
-
-
- -
-
-
-
State Shared revenue
Surface Water
Management fees
1,092,047
81,271
3,025
935 24,266
-
52,255
-
168,221
1,253,800
168,221
Total by Fund:
$ 1,614,937
$ 96,544
$ 1,180,278
$ 302,091 $ (7,880) $ 177,673
$ 408,268
$ 567,340
$4,339,252
NOTE 7 - DUE TO OTHER GOVERNMENTS
At December 31, 2012, the City recorded $18,265 as due to other governmental units as follows:
DUE TO OTHER GOVERNMENT
AS OF DECEMBER 31, 2012
Surface Water Mgmt.
King County - 2012 SWM collection fee $ 18,265
Total Business -Type Activities $ 18,265
51
City of Federal Way 2012 CAFR
NOTE 8 — CAPITAL ASSETS
Notes to the Basic Financial Statements
Capital assets activity for the year ended December 31, 2012 is as follows:
CAPITAL ASS ErS
AS OF DECEMBER 31, 2012
Governmental Activity Beginning Balance Additions Deletions Ending Balance
1/1/2012 12/31/2012
Capital Assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total capital assets, being depreciated:
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total accumulated depreciation:
Total assets being depreciated, net
$ 302,168,217 $
1,397,358 $
- $
303,565,575
21,158,058
3,964,704
(2,379,234)
22,743,528
323,326,275
5,362,062
(2,379,234)
326,309,103
17,149,019
18,153
-
17,167,172
43,865,580
-
-
43,865,580
147,163,554
4,041,184
-
151,204,738
15,219,018
1,408,815
(638,132)
15,989,701
223,397,171
5,468,152
(638,132)
228,227,191
(5,612,875)
(909,147)
-
(6,522,022)
(14,929,777)
(2,193,279)
-
(17,123,056)
(33,305,214)
(3,886,582)
-
(37,191,796)
(10,150,677)
(1,273,807)
632,836
(10,791,648)
(63,998,542)
(8,262,815)
632,836
(71,628,522)
159,398,629
(2,794,663)
(5,296)
156,598,669
Governmental activities capital assets, net $ 482,724,905 $ 2,567,399 $ (2,384,530) $ 482,907,774
Business -Type Activities Beginning Balance Additions Deletions Ending Balance
1/1/2012 12/31/2012
Capital Assets, not being depreciated:
Land $
10,310,215 $
623,313 $ - $
10,933,528
Construction in progress
2,453,470
102,667 (153,691)
2,402,446
Total capital assets, not being depreciated:
12,763,685
725,980 (153,691)
13,335,974
Capital assets, being depreciated:
Buildings
3,600,864
- -
3,600,864
Improvements other than buildings
47,818,768
153,691 -
47,972,459
Infrastructure
1,916,645
- -
1,916,645
Machinery & equipment
118,374
- -
118,374
Total capital assets, being depreciated:
53,454,650
153,691 -
53,608,341
Less accumulated depreciation for:
Buildings
(2,619,980)
(180,043) -
(2,800,023)
Improvements other than buildings
(12,328,736)
(478,188) -
(12,806,924)
Infrastructure
(100,642)
(19,166) -
(119,808)
Machinery & equipment
(88,418)
(2,946) -
(91,364)
Total accumulated depreciation:
(15,137,776)
(680,343) -
(15,818,119)
Total assets being depreciated, net
38,316,874
(526,652) -
37,790,222
Business -Type activities capital assets, net $
51,080,558 $
199,328 $ (153,691) $
51,126,195
52
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
At the end of 2012, 23 projects comprise the Construction in Progress for Governmental Activities. Upon completion, the
projects will be capitalized in the Government -wide statements in their appropriate categories. Construction commitments
for Governmental Activities as of December 31, 2012, are as follows:
AS OF DECFNIBER 31, 2012
Construction
Remaining
Governmental Activities Projects
in progress
Commitment
Downtown Redevelopment
$ 279,919
$ -
Major Facility Rehabilitation
231,109
56,371
Performing Arts Center
229,530
601,118
Regional Park Development
300,666
-
Lakota Park
166,912
-
Hylebos Boardwalk Replacement
1,361,909
27,602
Sacajawea Park Masterplan
627,949
104,553
Trail and pedestrian access improvements
80,206
1,160,728
Laurelwood
40,460
161,984
Lakota Soccer Field Upgrade
-
391,000
S 320th St @ 20th Ave South
268,126
3,879,047
SW 312th ST @ SR509
282,829
1,232,657
loth Avenue SW / SW 344th St: SW Campus Drive - 21st Ave SW
252,301
66,137
S 352nd Street Extension From SR-99 to SR-161
452,008
-
South 320th st @ 1-5 southbound ramp
3,128,090
620,912
South 356th St: SR99 - SR161
145
1,097,249
SR99 HOVLanes Phase 4
13,181,250
442,661
SR99 HOV Lanes Phase 5
-
2,000,809
SW 336th Way / SW 340th St: 26th A SW - Hoyt Rd
52,312
212,396
21ST AVE SW @ SW 336TH ST
795,240
4,523,042
Citywide Flashing Yellow Lights Installation
137,834
5,101
SR 99 @ S 312th St
7,260
55,857
S 344th Way @ Weyerhaeuser Way S
281,685
11,384
Mrk Twain Elementary Safe Route to School Impr
370,965
15,092
SW 312th St & 14th Ave SW Lakota Safe Rt to School Imp
214,819
818,395
Total governmental activities
$ 22,743,528
$ 17,484,095
53
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
Depreciation expense was charged to functions/programs of the primary government as follows:
CAPITAL ASSETS DEPRECIATION BY TYPE
AS OF DECEMBER 31, 2012
Governmental and Internal Service Activities
General government
$ 319,151
Security of persons & property
1,146,690
Transportation
4,201,783
Physical environment
25,670
Economic environment
148,781
Health
30,350
Culture & recreation
2,390,390
Total Depreciation - Governmental Activities
$ 8,262,815
Business -Type Activities
Utilities - Surface Water Management
$ 498,346
Culture & recreation - Dumas Bay Centre
181,997
Total Depreciation - Business -Type Activities
$ 680,343
NOTE 9 — PENSION PLANS
Washington State Department of Retirement Systems
Substantially all City full-time and qualifying part-time employees participate in one of the following statewide retirement
systems administered by the Washington State Department of Retirement Systems, under cost -sharing multiple -employer
public employee defined benefit 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; or it
may be downloaded from the DRS website at www.drs.wa.gov.
The following disclosures are made pursuant to GASB Statements No. 27, Accounting for Pensions by State and Local
Government Employers and No. 50, Pension Disclosures, an Amendment of GASB Statements No. 25 and No. 27.
Public Employees' Retirement System (PERS) Plan I, 2 and 3
Plan Description
The Legislature established PERS in 1947. Membership in the system includes: elected officials; state employees;
employees of the Supreme, Appeals, and Superior courts (other than judges currently in the Judicial Retirement System);
employees of legislative committees; community and technical colleges, college and university employees not participating
in higher education retirement programs; judges of district and municipal courts; and employees of local governments. PERS
retirement benefit provisions are established in Chapters 41.34 and 41.40 RCW and may be amended only by the State
Legislature.
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 defined benefit plan with a defined contribution component.
PERS members 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 exercised an option to transfer their membership to Plan 3. PERS members
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 irrevocable 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.
54
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members
may opt out of plan membership if terminally ill, with less than five years to live.
PERS Plan 1 and Plan 2 defined benefit retirement benefits are financed from a combination of investment earnings and
employer and employee contributions.
PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for
retirement after 30 years of service, or at the age of 60 with five years of service, or at the age of 55 with 25 years of service.
The monthly benefit is 2 percent of the average final compensation (AFC) per year of service. (AFC is the monthly average
of the 24 consecutive highest -paid service credit months.) The retirement benefit may not exceed 60 percent of AFC. The
monthly benefit is subject to a minimum for PERS Plan 1 retirees who have 25 years of service and have been retired 20
years, or who have 20 years of service and have been retired 25 years. Plan 1 members retiring from inactive status prior to
the age of 65 may receive actuarially reduced benefits. If a survivor option is chosen, the benefit is further reduced. A cost -
of -living allowance (COLA) was granted at age 66 based upon years of service times the COLA amount. This benefit was
eliminated by the Legislature, effective July 1, 2011. Plan 1 members may elect to receive an optional COLA that provides
an automatic annual adjustment based on the Consumer Price Index. The adjustment is capped at 3 percent annually. To
offset the cost of this annual adjustment, the benefit is reduced.
PERS Plan 1 provides duty and non -duty disability benefits. Duty disability retirement benefits for disablement prior to the
age of 60 consist of a temporary life annuity payable to the age of 60. The allowance amount is $350 a month, or two-thirds
of the monthly AFC, whichever is less. The benefit is reduced by any workers' compensation benefit and is payable as long
as the member remains disabled or until the member attains the age of 60. A member with five years of covered employment
is eligible for non -duty disability retirement. Prior to the age of 55, the allowance amount is 2 percent of the AFC for each
year of service reduced by 2 percent for each year that the member's age is less than 55. The total benefit is limited to 60
percent of the AFC and is actuarially reduced to reflect the choice of a survivor option. A cost -of -living allowance was
granted at age 66 based upon years of service times the COLA amount. This benefit was eliminated by the Legislature,
effective July 1, 2011. Plan 1 members may elect to receive an optional COLA that provides an automatic annual adjustment
based on the Consumer Price Index. The adjustment is capped at 3 percent annually. To offset the cost of this annual
adjustment, the benefit is reduced.
PERS Plan 1 members can receive credit for military service. Members can also purchase up to 24 months of service credit
lost because of an on-the-job injury.
PERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members are eligible for
normal retirement at the age of 65 with five years of service. The monthly benefit is 2 percent of the AFC per year of service.
(AFC is the monthly average of the 60 consecutive highest -paid service months.)
PERS Plan 2 members who have at least 20 years of service credit and are 55 years of age or older are eligible for early
retirement with a reduced benefit. The benefit is reduced by an early retirement factor (ERF) that varies according to age, for
each year before age 65.
PERS Plan 2 members who have 30 or more years of service credit and are at least 55 years old can retire under one of two
provisions:
• With a benefit that is reduced by 3 percent for each year before age 65.
• With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work rules.
PERS Plan 2 retirement benefits are also actuarially reduced to reflect the choice, if made, of a survivor option. There is no
cap on years of service credit; and a cost -of -living allowance is granted (based on the Consumer Price Index), capped at 3
percent annually.
The surviving spouse or eligible child or children of a PERS Plan 2 member who dies after leaving eligible employment
having earned ten years of service credit may request a refund of the member's accumulated contributions.
PERS 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 monthly benefit that is 1
percent of the AFC per year of service. (AFC is the monthly average of the 60 consecutive highest -paid service months.)
Effective June 7, 2006, PERS Plan 3 members are vested in the defined benefit portion of their plan after ten years of service;
or after five years of service, if twelve months of that service are earned after age 44; or after five service credit years earned
6SI
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
in PERS Plan 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their
plan.
Vested Plan 3 members are eligible for normal retirement at age 65, or they may retire early with the following conditions
and benefits:
• If they have at least ten service credit years and are 55 years old, the benefit is reduced by an ERF that varies with
age, for each year before age 65.
• If they have 30 service credit years and are at least 55 years old, they have the choice of a benefit that is reduced by
3 percent for each year before age 65; or a benefit with a smaller (or no) reduction factor (depending on age) that
imposes stricter return -to -work rules.
PERS Plan 3 defined benefit retirement benefits are also actuarially reduced to reflect the choice, if made, of a survivor
option. There is no cap on years of service credit and Plan 3 provides the same cost -of -living allowance as Plan 2.
PERS Plan 3 defined contribution retirement benefits are solely dependent upon contributions and the results of investment
activities.
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 Director of the Department of Retirement Systems.
PERS Plan 2 and Plan 3 provide disability benefits. There is no minimum amount of service credit required for eligibility.
The Plan 2 monthly benefit amount is 2 percent of the AFC per year of service. For Plan 3, the monthly benefit amount is 1
percent of the AFC per year of service.
These disability benefit amounts are actuarially reduced for each year that the member's age is less than 65, and to reflect the
choice of a survivor option. There is no cap on years of service credit, and a cost -of -living allowance is granted (based on the
Consumer Price Index) capped at 3 percent annually.
PERS Plan 2 and Plan 3 members may have up to ten years of interruptive military service credit; five years at no cost and
five years that may be purchased by paying the required contributions. Effective July 24, 2005, a member who becomes
totally incapacitated for continued employment while serving the uniformed services, or a surviving spouse or eligible
children, may apply for interruptive military service credit. Additionally, PERS Plan 2 and Plan 3 members can also
purchase up to 24 months of service credit lost because of an on-the-job injury.
PERS members may also purchase up to five years of additional service credit once eligible for retirement. This credit can
only be purchased at the time of retirement and can be used only to provide the member with a monthly annuity that is paid in
addition to the member's retirement benefit.
Beneficiaries of a PERS Plan 2 or Plan 3 member with ten years of service who is killed in the course of employment receive
retirement benefits without actuarial reduction, if the member was not at normal retirement age at death. This provision
applies to any member killed in the course of employment, on or after June 10, 2004, if found eligible by the Department of
Labor and Industries.
A one-time duty -related death benefit is provided to the estate (or duly designated nominee) of a PERS member who dies in
the line of service as a result of injuries sustained in the course of employment, or if the death resulted from an occupational
disease or infection that arose naturally and proximately out of said member's covered employment, if found eligible by the
Department of Labor and Industries.
Judicial Benefit Multiplier
During January 1, 2007 through December 31, 2007, judicial members of PERS were given the choice to participate in the
Judicial Benefit Multiplier Program (JBM) enacted in 2006. Justices and judges in PERS Plan 1 and Plan 2 were able to
make a one-time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5 percent
multiplier. The benefit would be capped at 75 percent of AFC. Judges in PERS Plan 3 could elect a 1.6 percent of pay per
year of service benefit, capped at 37.5 percent of AFC.
Members who chose to participate in JBM would: accrue service credit at the higher multiplier beginning with the date of
their election; be subject to the benefit cap of 75 percent of AFC, pay higher contributions; stop contributing to the Judicial
Retirement Account (JRA); and be given the option to increase the multiplier on past judicial service. Members who did not
56
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
choose to participate would: continue to accrue service credit at the regular multiplier; continue to participate in JRA, if
applicable; never be a participant in the JBM Program; and continue to pay contributions at the regular PERS rate.
Newly elected or appointed justices and judges who chose to become PERS members on or after January 1, 2007, or who had
not previously opted into PERS membership, were required to participate in the JBM Program. Members required into the
JBM program would: return to prior PERS Plan if membership had previously been established; be mandated into Plan 2 and
not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute
to JRA; and not have the option to increase the multiplier for past judicial service.
There are 1,184 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial
valuation date for the plans of June 30, 2012:
Retirees and Beneficiaries Receiving Benefits
79,363
Terminated Plan Members Entitled to But Not Yet Receiving Benefits
29,925
Active Plan Members Vest
105,578
Active Plan Members Nonvested
46,839
Total
261,705
Funding Policy
Each biennium, the state Pension Funding Council adopts PERS Plan 1 employer contribution rates, PERS Plan 2 employer
and employee contribution rates, and PERS Plan 3 employer contribution rates. Employee contribution rates for Plan 1 are
established by statute at 6 percent for state agencies and local government unit employees, and at 7.5 percent for state
government elected officials. 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. Under PERS Plan 3, employer contributions
finance the defined benefit portion of the plan and member contributions finance the defined contribution portion. The Plan 3
employee contribution rates range from 5 percent to 15 percent, based on member choice. Two of the options are graduated
rates dependent on the employee's age. As a result of the implementation of the Judicial Benefit Multiplier Program in
January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the
increased retirement benefits of those justices and judges that participate in the program. The methods used to determine the
contribution requirements are established under state statute in accordance with Chapters 41.40 and 41.45 RCW.
The required contribution rates expressed as a percentage of current -year covered payroll, as of December 31, 2012, are as
follows:
Members not participating in JBM:
PERS Plan 1 PERS Plan 2 PERS Plan 3
Employer* 7.21%* 7.21% 7.21%**
Employee 6.00% 4.64%
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** Plan 3 defined benefitportion only.
*** Variable from 5.0% to 15.0% maximum based on rate selected by the PERS 3 member.
Members participating in JBM:
PERS Plan 1
PERS Plan 2
PERS Plan 3
Employer*
7.21%*
7.21%
7.21%**
Employee
12.26%
11.60%
7.50***
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** Plan 3 defined benefitportion only.
*** Minimum Rate
Both the City and employees made the required contributions. The City's required contributions for the years ended
December 31 were:
PERS Plan 1 PERS Plan 2 PERS Plan 3
2012 $ 1,588 $ 708,790 $ 132,404
2011 $ 2,872 $ 623,807 $ 111,278
2010 $ 7,826 $ 571,406 $ 104,390
6111
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 and 2
Plan Description
The Legislature established LEOFF in 1970. Membership in the system includes all full-time, fully compensated, local law
enforcement commissioned officers, firefighters and, as of July 24, 2005, emergency medical technicians. LEOFF
membership is comprised primarily of non -state employees, with Department of Fish and Wildlife enforcement officers, who
were first included prospectively effective July 27, 2003, being an exception. LEOFF retirement benefit provisions are
established in Chapter 41.26 RCW and may be amended only by the State Legislature.
LEOFF is a cost -sharing multiple -employer retirement system comprised of two separate defined benefit plans. LEOFF
members 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 defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee
contributions, and a special funding situation in which the state pays through state legislative appropriations.
Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of
LEOFF Plan 2. The Board's duties include adopting contribution rates and recommending policy changes to the Legislature
for the LEOFF Plan 2 retirement plan.
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. A cost -of -living allowance is granted (based on the Consumer Price
Index).
LEOFF Plan 1 provides death and disability benefits. Death benefits for survivors of Plan 1 members on active duty consist
of the following: (1) If eligible spouse, 50 percent of the FAS, plus 5 percent of FAS for each eligible surviving child, with a
limitation on the combined allowances of 60 percent of the FAS; or (2) If no eligible spouse, eligible children receive 30
percent of FAS for the first child plus 10 percent for each additional child, subject to a 60 percent limitation of FAS, divided
equally.
A one-time duty -related death benefit is provided to the estate (or duly designated nominee) of a LEOFF Plan 1 member who
dies as a result of injuries or illness sustained in the course of employment, if found eligible by the Department of Labor and
Industries.
The LEOFF Plan 1 disability allowance is 50 percent of the FAS plus 5 percent for each child up to a maximum of 60
percent. Upon recovery from disability before the age of 50, a member is restored to service with full credit for service while
disabled. Upon recovery after the age of 50, the benefit continues as the greater of the member's disability allowance or
service retirement allowance.
LEOFF Plan 1 members may purchase up to five years of additional service credit once eligible for retirement. This credit
can only be purchased at the time of retirement and can be used only to provide the member with a monthly annuity that is
paid in addition to the member's allowance.
LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the
age of 50 with 20 years of service, or at the age of 53 with five years of service, with an allowance of 2 percent of the FAS
per year of service. (FAS is based on the highest consecutive 60 months). Plan 2 members who retire prior to the age of 53
receive reduced benefits. Benefits are actuarially reduced for each year that the benefit commences prior to age 53 and to
reflect the choice of a survivor option. If the member has at least 20 years of service and is age 50, the reduction is 3 percent
for each year prior to age 53. A cost -of -living allowance is granted (based on the Consumer Price Index), capped at 3 percent
annually.
58
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
LEOFF Plan 2 provides disability benefits. There is no minimum amount of service credit required for eligibility. The Plan
2 allowance amount is 2 percent of the FAS for each year of service. Benefits are actuarially reduced for each year that the
member's age is less than 53, unless the disability is duty -related, and to reflect the choice of a survivor option. If the
member has at least 20 years of service and is age 50, the reduction is 3 percent for each year prior to age 53. A catastrophic
disability benefit equal to 70 percent of their FAS, subject to offsets for workers' compensation and Social Security disability
benefits received, is also available to those LEOFF Plan 2 members who are severely disabled in the line of duty and
incapable of future substantial gainful employment in any capacity.
Effective June 2010, benefits to LEOFF Plan 2 members who are catastrophically disabled include payment of eligible health
care insurance premiums.
Members of LEOFF Plan 2 who leave service because of a line of duty disability are allowed to withdraw 150 percent of
accumulated member contributions. This withdrawal benefit is not subject to federal income tax. Alternatively, members of
LEOFF Plan 2 who leave service because of a line of duty disability may be eligible to receive a retirement allowance of at
least 10 percent of FAS and 2 percent per year of service beyond five years. The first 10 percent of the FAS is not subject to
federal income tax.
LEOFF Plan 2 retirees may return to work in an eligible position covered by another retirement system, choose membership
in that system and suspend their pension benefits, or not choose membership and continue receiving pension benefits without
interruption.
LEOFF Plan 2 members who apply for retirement may purchase up to five years of additional service credit. The cost of this
credit is the actuarial equivalent of the resulting increase in the member's benefit.
LEOFF Plan 2 members can receive service credit for military service that interrupts employment. Additionally, LEOFF
Plan 2 members who become totally incapacitated for continued employment while servicing in the uniformed services may
apply for interruptive military service credit. Should any such member die during this active duty, the member's surviving
spouse or eligible child (ren) may request service credit on behalf of the deceased member.
LEOFF Plan 2 members may also purchase up to 24 consecutive months of service credit for each period of temporary duty
disability.
Beneficiaries of a LEOFF Plan 2 member who is killed in the course of employment receive retirement benefits without
actuarial reduction, if found eligible by the Director of the Department of Labor and Industries.
Benefits to eligible surviving spouses and dependent children of LEOFF Plan 2 members killed in the course of employment
include the payment of on -going health care insurance premiums paid to the Washington state Health Care Authority.
A one-time duty -related death benefit is provided to the estate (or duly designated nominee) of a LEOFF Plan 2 member who
dies as a result of injuries or illness sustained in the course of employment, if found eligible by the Department of Labor and
Industries.
There are 373 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial
valuation date for the plans of June 30, 2012:
Retirees and beneficiaries receive benefits
9,947
Terminated plan members entitled to but not yet receiving benefits
656
Active plan members vest
13,942
Active plan members nonvested
3,113
Total
27,658
Funding Policy
Starting on July 1, 2000, LEOFF Plan 1 employers and employees 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.
LEOFF Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board.
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 LEOFF Plan 2 in accordance with the requirements of the
Pension Funding Council and the LEOFF Plan 2 Retirement Board. 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.
59
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2011 were:
LEOFF Plan 1 LEOFF Plan 2
Employer 0.16% 5.24%* *
Employee 0.00% 8.46%
State N/A 3.45%
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** The employer rate for ports and universities is 7.18%.
Both the City and employees made the required contributions. The City's required contributions for the years ended
December 31 were:
LEOFF Plan 1 LEOFF Plan 2
2012 - $ 575,718
2011 - $ 577,434
2010 - $ 589,769
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 2012, there were a total of 297 individuals covered by this system. As of the end of the year, 294 remained as active
employees of the City and six were drawing retirement benefits. The 15 inactive had left the City's employment and either
had been reimbursed their contributions, or the reimbursement was pending, or they elected to have their contributions
remain in the plan if the balance was $1,000 or greater.
All regular employees of the City of Federal Way are required to participate in the system, with the City matching the
employee's required contribution. The employee pays 6.2% and this is matched by the composite of a cash match
(approximately 5.2%) and insurance payments (1%) for disability, survivor, accidental death and dismemberment, and lump
sum death benefit coverage. Contributions into the plan are tax deferred.
Employees are entitled to make voluntary contributions to the plan, assuming that highly compensated and non -highly
compensated employees are treated equally. Each payroll period, employees may make a voluntary contribution equal to a
minimum of 1 % of the participant's compensation, not to exceed 10% of the participant's compensation.
Covered payroll for 2012 was $20,344,866 and total City payroll was $24,017,446. Actual City contributions for the year
were $1,158,306. Actual employee contributions were $1,381,059. All contributions were invested in instruments arranged
through independent investment advisors selected by the Municipal Employers Benefit Trust (MEBT) committee comprised
of the entities of Bellevue, Kirkland, Redmond, Edmonds, Mill Creek, Woodinville, Federal Way, and North East King
County Regional Public Safety Communication Agency (NORCOM) but administered by Northwest Plan Services (NWPS).
Retirement System assets are not the property of the City and are not subject to the claims of the City's general creditors. The
Federal Way Retirement System assets are with Security Trust Company, N.A. who invests Plan assets.
In July 1995, the City implemented the hardship withdrawal and loan provision program that allow participants to have
limited access to their contributions while still employed by the City. Hardship withdrawals are available in the event of
financial necessity resulting from uninsured medical expenses, tuition expenses, purchasing one's primary residence, or to
prevent foreclosure on one's primary residence. Loans receivable as of December 31, 2012 were $1,713,739.
The consulting actuary firm of Northwest Plan Services (NWPS) has been contracted to provide record keeping,
administrative and consulting services related to the Plan Actuarial determinations are not required because accidental death
and dismemberment insurance, long-term disability, survivor income insurance and the lump sum death benefit are provided
by a group insurance policy with Standard Insurance Company; and benefits paid to participants upon retirement are limited
to: (a) a nonforfeitable, nontransferable annuity contract purchased by the plan's trustee, (b) retirement benefits payable from
the employee's account to which no contributions by the City or the participant can be added after retirement, or a single
lump -sum payment equal to the accumulated balance in the employee's account as of his retirement date.
60
City of Federal Way 2012 CAFR
NOTE 10 —RISK MANAGEMENT
Notes to the Basic Financial Statements
The City uses the Risk Management Internal Service Fund to account for its risk financing activities. The City maintains
insurance against most normal hazards except for unemployment insurance where it has elected to become fully self -insured.
Related premiums received by the Risk Management Fund are used to reimburse the State Employment Security Department
for unemployment benefits paid to eligible individuals, and to establish reserves for the payment of estimated future
unemployment claims liability. The City faces most of the risks faced by similar sized cities.
Through its Risk Management Fund, the City is also recovering insurance premium costs for general liability coverage and
building reserves for a future general liability self-insurance program. The City's insurance coverage in 2011 remained
relatively similar to the coverage for 2010.
The City of Federal Way is a member of the Washington Cities Insurance Authority (WCIA).
Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities
originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for
jointly purchasing insurance, jointly self -insuring, and / or jointly contracting for risk management services. WCIA has a
total of 145 Members.
New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year
withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its
unresolved loss history incurred during membership.
Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police,
public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self -
insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of
reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate
sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually.
Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are
purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are
self -funded from the members' deductible to $500,000, for all perils other than flood and earthquake, and insured above that
amount by the purchase of insurance.
In-house services include risk management consultation, loss control field services, claims and litigation administration, and
loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance
brokerage, and lobbyist services.
WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an
outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the
interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall.
An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in
financial instruments which comply with all State guidelines. These revenues directly offset portions of the membership's
annual assessment.
A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board
elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA
Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA.
There were no settlements in excess of insurance for commercially insured activities for 1996 through 2012.
The following is a summary of coverage in force in 2012.
61
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
S CHEDULE OF INS URANCE IN FORCE
AS OF DECEMBER 31, 2012
Company Policy Period Details of Coverage Liability Limits
General Liability (Auto, General, Police E & O,
$20,000,000 per Occurrence subject to Annual Aggregates and
WCIA
1/l/12-12/31/12
Employment Practices, & Stop Gap)
Sublimits. Deductible: $100,000
Crime/Fidelity (Employee Dishonesty, Faithful
Performance of Duty, Forgery or Alternation,
WCIA
1/l/12-12/31/12
Theft, Disappearance and Destruction,
$2,500,000. Deductible $10,000.
Robbery and Safe Burglary, and Computer
Fraud)
Limit $300,000,000 per occurrence. Sub-limits:$150,000,000
Earthquake per Occurrence; $100,000,000 Flood per
WCIA
I/l/12-12/31/12
Property Coverage
Occurrence. Deductible: Earthquake 2% ofthe values involved,
subject to $100,000 min per occurrence. Flood $250,0000 per
occurrence. All other perils $25,000
Automobile Physical Damage for Scheduled
Actual Cash Value. Deductible $1,000 per occurrence for
WCIA
I/l/12-12/31/12
Automobiles
scheduled automobiles
$100,000,000 Maximum Limit; Sub -limits: $10,000,000 Business
Interruption; $1,000,000 Extra Expense; $500,000 Hazardous
Waste. Deductible $10,000 Combined All Coverage Expect.
WCIA
1/l/12-12/31/12
Equipment Breakdown Coverage
Turbine Generator Unites, KP Motors, Pumps, and Deep Water
Wells, KVA Transformers, HP A/C and Refrigeration Systems
and HP ICE's and Generators >=500 HP
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", 2012 the City had $1,529,657 in reserve.
Unemployment compensation benefits
2011
2012
Unemployment reserve, Jan. 1st
$ 1,407,110
$ 1,407,110
Unemployment compensation benefits
248,718
225,920
Claim payments during the year
(248,718)
(103,373)
Unemployment reserve, Dec. 31st
$1,407,110
$1,529,657
NOTE 11— LONG-TERM LIABILITIES
The various categories of long-term debt reflected on the City's financial statements are briefly described in the following
paragraphs.
General obligation bonds are backed by the City's full faith and credit. Proceeds are typically used for the acquisition or
construction of major capital facilities or equipment. "Councilmanic Bonds" are general obligation bonds issued by City
Council without voter approval. Under State law, repayment of these bonds must be financed from general City revenues
because no additional property taxes can be levied to support related debt service payments. General Obligation bonds
approved by the voters are typically repaid through an annual "excess" property tax levy authorized for this purpose by State
statute. At year-end 2012 the City had no voter -approved bonds outstanding. All principal and interest payments on general
obligation debts are recorded as expenditures by the City's Debt Service Fund with the exception of SCORE interest
payments which in 2012 were paid from the General Fund. Future SCORE debt service will be paid from the Debt Service
Fund. The compensated absences liability will be liquidated approximately 91% by the General Fund and 9% by the Street
Fund.
The following schedules detail the long-term debt activity and balances of the City.
62
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
OUTSTANDING GENERAL OBLIGATION DEBT AND LONG-TERMLIABILITIES - BY TYPE
DECEM BER 31, 2012
Amount
Beginning
Ending
Description
Bond Rating
Issue
Maturity
M
Interest
Originally
Outstanding
Amount
Amount
Outstanding
at Issuance
Date
Date
Rate
Issued
Debt
Issued
Redeemed
Debt
Governmental Activities:
General Obligation Bonds:
2003 Limited/Community Center
AAA -Ins
Nov 15, 03
Dec 01, 33
4.676
$ 15,000,000
$ 12,650,000
$
$ 340,000
$ 12,310,000
Subtotal GO Bonds:
-
-
-
-
15,000,000
12,650,000
-
340,000
12,310,000
Other Miscellaneous Debt -Intergovernmental:
2000 Limited/Valley Comm. PDA
Al
Sep 12, 00
Dec 01, 15
5.31
2,551,600
848,000
201,000
647,000
2009 SCORE/Special Obligation Bond
Al/AA
Nov 04, 09
Jan 01, 39
3.00-6.62
14,659,950
14,659,950
-
14,659,950
Subtotal miscellaneous:
-
-
-
-
17,211,550
15,507,950
-
201,000
15,306,950
Subtotal GO Bonds plus Misc.
32,211,550
28,157,950
541,000
27,616,950
Compensated absences
1,573,280
1,440,830
1,511,076
1,503,034
Subtotal GO bonds, misc. & comp absences:
-
-
32,211,550
29,731,230
1,440,830
2,052,076
29,119,984
Business -Type Activities:
Public Works Trust Fund Loan:
PWTL - Kitts Comer Drain Imp
Aug 31, 94
Jul 01, 14
1.00
233,316
27,567
-
12,936
14,631
PWTL -Kitts Comer Drain Imp
Jul 24, 96
Jul 01, 14
1.00
1,166,580
197,513
64,680
132,833
PWTL-Kitts Comer Drain Imp
Sep 04, 97
Jul 01, 14
1.00
155,544
33,637
8,624
25,013
PWTL-SeaTac Mall Drain Imp
May 31, 00
Jul 01, 19
1.00
412,500
128,160
16,020
112,140
PWTL - SeaTac Mall Drain Imp
Aug 14, 00
Jul 01, 19
1.00
2,062,500
640,799
80,099
560,700
Subtotal PWTFL
-
-
4,030,440
1,027,676
182,359
845,317
Compensated absences
-
78,701
78,093
89,728
67,066
Subtotal PWTFL plus compensated absences:
4,030,440
1,106,377
78,093
272,087
912,383
Grand Total All Long -Term Debt:
$36,241,990
$30,837,607
$ 1,518,923
$ 2,324,163
$30,032,367
OUTSTANDING GINERAL OBLIGATION DEBT AND LONG-TERM LIABILTl IES - BY FUND
DECEMBER 31, 2012
Amount
Beginning
Ending
Description
Originally
Outstanding
Amount
Amount
Outstanding
Due within
Issued
Debt
Issued
Redeemed*
Debt
one year
Governmental Long -Term Debt:
General Obligation Bonds:
2003 Limited/Conitnunity Center
$ 15,000,000
$ 12,650,000
$
$ 340,000
$ 12,310,000
$ 355,000
Subtotal GO Bonds:
15,000,000
12,650,000
340,000
12,310,000
355,000
Other Miscellaneous Debt -Intergovernmental:
2000 Limited/Valley Comm PDA
2,551,600
848,000
-
201,000
647,000
215,000
2009 SCORE/Special Obligation Bond
14,659,950
14,659,950
-
-
14,659,950
325,550
Subtotal miscellaneous:
17,211,550
15,507,950
-
201,000
15,306,950
540,550
Subtotal GO Bonds plus Misc.
32,211,550
28,157,950
541,000
27,616,950
895,550
Compensated absences
-
1,573,280
1,440,830
1,511,076
1,503,034
94,020
Subtotal GO bonds, misc. & corinp absences:
32,211,550
29,731,230
1,440,830
2,052,076
29,119,984
989,570
Business -Type Activities:
Enterprise Funds:
Public Works Trust Fund Loan
4,030,440
1,027,676
182,359
845,317
182,359
Subtotal Bus -Type Long -Term Debt
4,030,440
1,027,676
-
182,359
845,317
182,359
Compensated absences
-
78,701
78,093
89,728
67,066
3,274
Total Bus -Type plus conip. absences LTD:
4,030,440
1,106,377
78,093
272,087
912,383
185,633
Grant Total All Long -Term Debt:
$ 36,241,990
$ 30,837,607
$ 1,518,923
$ 2,324,163
$ 30,032,367
$ 1,175,203
*Debt service principal payments in Debt Service Fund include credits of $30,150 from lnterlocal agreement with Federal Way Fire District to participate
in capital cost obligations with Valley Communications joint venture with the City of Federal Way.
63
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
SCHEDULE OF CHANGES IN LONGTERM LIABILITIES
PERIOD ENDED DECELVIBER 31, 2012
Beginning
Ending
Outstanding
Additions
Reductions
Outstanding
Debt
Debt
Governmental Activities:
General Obligation Bonds
$ 12,650,000
$ -
$ (340,000)
$ 12,310,000
Other -intergovernmental debt
15,507,950
-
(201,000)
15,306,950
Compensated absences
1,573,280
1,440,830
(1,511,076)
1,503,034
Total Governmental Activities
29,731,230
1,440,830
(2,052,076)
29,119,984
Business -Type Activities:
Enterprise Funds
Public Works Trust Fund Loan
1,027,676
-
(182,359)
845,317
Compensated absences
78,701
78,093
(89,728)
67,066
Total Business -Type Activities
1,106,377
78,093
(272,087)
912,383
Total All Funds
$ 30,837,607
$ 1,518,923
$ 2,324,163
$ 30,032,367
SC XJI OF DEBT SERVICE REQUJIMIINTS TO MATURITY
AS OF DECEMBER 31, 2012
Government Activities
Business -Type Activities
General Governmental Debt
Public Work Trust Fund
Grand Total
Principal
Interest
Principal
Interest
Principal
Interest
P&I
Year
2013
895,550
1,176,067
182,359
8,453
1,077,909
1,184,520
2,262,429
2014
913,500
1,147,476
182,359
6,630
1,095,859
1,154,106
2,249,965
2015
943,300
1,114,298
96,120
4,806
1,039,420
1,119,104
2,158,524
2016
756,050
1,076,875
96,120
3,845
852,170
1,080,720
1,932,889
2017-2021
4,267,650
4,901,226
288,359
5,767
4,556,009
4,906,993
9,463,002
2022-2026
5,300,650
3,913,438
-
-
5,300,650
3,913,438
9,214,088
2027-2031
6,656,700
2,607,581
-
-
6,656,700
2,607,581
9,264,281
2032-2036
5,357,350
1,068,039
-
-
5,357,350
1,068,039
6,425,389
2037-2041
2,526,200
166,026
-
-
2,526,200
166,026
2,692,226
Totall
$ 27,616,950
1 $ 17,171,026
$ 845,317 $ 29,501
1 $ 28,462,267
1 $ 17,200,527
1 $ 45,662,793
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'h percent of the value of all taxable property within the City. State law requires all property to be
assessed at 100 percent of its true and fair value. Unlimited tax general obligation debt requires an approving vote of the
people, and any election to validate such general obligation debt must have a voter turnout of at least 40 percent of those who
voted in the last State general election and of those voting; 60 percent must be in the affirmative. The City Council may, by
ordinance, authorize the issuance of limited tax general obligation debt in an amount up to 1.5% of the valuation within the
City without a vote of the people. No combination of limited or unlimited tax debt may exceed 7'h percent of the valuation.
The debt service on unlimited tax debt is secured by excess property tax levies, whereas the debt service on limited tax debt
is secured by property taxes collected with the City's councilmanic levy.
The City's legally remaining debt capacities as of December 31, 2012 are:
General government (no vote required) $ 81,530,018
General government (3/5 majority vote required) 71,428,320
Parks and open space (3/5 majority vote required) 178,570,799
Utilities (3/5 majority vote required) 178,570,799
Total Capacity $ 510,099,936
64
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
Compensated Absences
The City's liability for accrued vacation and compensatory time balances is recorded in the schedule below. Accrued
compensated absences for proprietary fund employees are recorded as liabilities in those funds expected to incur the related
future expense.
Governmental Activities:
Current portion $ 94,020
Noncurrent portion 1,409,014
Business -Type Activities:
Current portion 3,274
Noncurrent portion 63,792
Total Compensated absences $ 1,570,100
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, 2012 is $-0- for its tax-exempt general obligation bond issues
subject to the Tax Reform Act issued through that date.
Leases
The City of Federal Way leases office buildings and land which are accounted for as operating leases. Operating leases do
not give rise to property rights or lease obligations, and therefore the results of the lease agreements are not reflected in the
City's capital assets. Total Cost for the leases was $3,720 for the year ended December 31, 2012. The current year lease
payments included the site lease for the City's WiFi Project. Federal Way WiFi project is to provide free broadband Internet
service to Federal Way citizens, businesses and visitors in the downtown business corridor, City parks, Community Center,
Dumas Bay Centre and City Hall. The site lease was extended in July of 2010 for an additional 5 years terminating in July
2015. The future minimum lease payments for the WiFi Project are as follows:
2012 3,000
2013 3,000
2014 3,000
2015 1,500
Total: $ 10,500
NOTE 12 — INTERFUND TRANSACTIONS
Interfund transfers for the year ended December 31, 2012 were as follows:
Interfund Transfers In Out
Governmental Funds:
General Fund
Street Fund
Utility Tax Fund
Debt Service
Downtown Redevelopment
Transportation
Nonmajor Governmental Funds
Proprietary Funds:
Surface Water Management
Dumas Bay Centre
Internal Service Funds
$ 9,088,018 $ 1,772,871
2,419,371 8,343
- 12,554,760
913,892 1,025,000
1,621,000 -
2,186,000 1,007,807
409,181 409,181
140,500 -
56,790 56,790
Total: $16,834,752 $16,834,752
65
City of Federal Way 2012 CAFR
The following describes the amounts transferred out during 2012:
Notes to the Basic Financial Statements
General Fund:
• $1,716,371 to Street Fund to subsidize street maintenance and operations
• $27,500 to DBC for roof repair and pump station
• $25,000 to Federal Way Community Center for use of facilities by General Parks and Recreation
• $4,000 to CDBG for Consolidated Plan update
Street Fund:
• $8,343 to General Fund for support of Secure Our School Grant contribution
Utility Tax Fund:
• $2,702,868 to General Fund for Proposition 1 for Public Safety and Community Programs Funding
• $925,000 for SCORE
• $913,892 to Federal Way Community Center Debt Service
• $1,021,000 to Arterial Street Fund overlay program
• $616,000 to General Fund for Public Safety Positions
• $227,000 to General Fund for Celebration Park maintenance & operations
• $373,000 to Street Fund for maintenance and operations on bond projects
• $113,000 to Dumas Bay Centre Fund for Knutzen Family Theatre subsidy
• $74,100 to General Fund for Arts Commission
• $22,900 to General Fund for Red, Whites & Blues Festival
• $49,000 to General Fund for new Parks maintenance and operations
• $706,000 to Federal Way Community Center for maintenance/operations and capital reserves
• $3,940,000 to General Fund for ongoing support of operations
• $543,000 to Transportation CIP project SW 312th St at SR509
• $153,000 to Transportation CIP project 216t Ave Southwest at Southwest 336th St.
• $50,000 to Parks CIP Major Maintenance -Parks Facilities
• $50,000 to Parks CIP for Playgrounds
• $75,000 to Parks CIP for Sacajawea Park Masterplan
Debt Service Fund:
$834,000 of Real Estate Excise Tax to Transportation CIP project South 344t" Way at Weyerhaeuser Way S
$91,000 of Real Estate Excise Tax to Transportation CIP project 215t Ave SW at SW 336th St.
$100,000 of Real Estate Excise Tax to Parks CIP for Playgrounds
Proprietary Funds:
• $179,181 from Surface Water Management CIP to Surface Water Management Operations
• $230,000 from Surface Water Management Operations to Surface Water Management CIP for Small Projects
Internal Service:
• $56,790 from Risk management to Fleet/Equipment for insurance proceeds
Nonmajor Fund:
• $50,000 from Traffic Safety Fund to General Fund for support of Municipal Court
• $450,000 from Traffic Safety Fund to General Fund for support of Police Department
• $330,000 from Traffic Safety Fund to Street Fund for support of Traffic Services
• $22,807 from CDBG Fund to General Fund for Recreation Inclusive Coordinator
• $155,000 from Paths & Trails Fund to Parks CIP Trail and Pedestrian Access Improvements
Interfund loans for the year ended December 31, 2012 were as follows:
Interfund Loans Receivable Payable
General Fund $ 10,000 $ -
Special Revenue Funds:
Community Development Block Grant - 10,000
Total InterfundLoans $ 10,000 $ 10,000
66
City of Federal Way 2012 CAFR
NOTE 13 — CONTINGENCIES AND LITIGATION
Notes to the Basic Financial Statements
As of December 31, 2012 there were a small number of claims for damages and lawsuits pending against the City. In the
opinion of the City Attorney, however, neither the potential liability for any single claim or lawsuit, nor the aggregate
potential liability arising from all actions currently pending would materially affect the financial condition of the City. Due
to both their uncertainty and immateriality, no liabilities or estimated liabilities have been included in the City's financial
statements.
NOTE 14 — JOINT VENTURE
Valley Communication Center
The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by
the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, Tukwila, and Federal
Way which was formally admitted during 2000. The agreement is sanctioned by the provisions and terms of the Interlocal
Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter was
automatically extended for a consecutive five year -period.
The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency
communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing
agencies, which include King County Fire Districts 2, 20, 26, 40, 43, 44, and 47; City of Pacific Police and Fire Departments,
City of Algona Police Department, City of Des Moines Police Department, City of Black Diamond Police and Fire
Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire
Department. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth
conditions of services and rates charged.
The allocation of prorated financial participation among the five member cities is the percentage of dispatched calls attributed
to each jurisdiction compared to the total estimated dispatched calls, for the current twelve month period ending December
31. The percentages are applied to the current approved budget, less revenue from all other sources. Distribution of the
current year net income is based on the same percentages. The 2012 cost distributions for the five member cities are as
follows:
City
Dispatchable
Calls
Percent
of Total
Kent
96,126
28.28%
Renton
72,004
21.18%
Auburn
65,612
19.30%
Tukwila
33,645
9.90%
Federal Way
72,547
21.34%
Total
339,934
100.00 %
Valley Com is governed by an Administration Board, composed of the Mayors or designated representatives from the five
participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Administration Board is authorized to establish
bylaws that govern procedures of the Board and Valley Com's general operations for the following functions: 1) Budget
review and recommendations to the legislative bodies of the member cities, and budget adoption after each legislative body
has approved the required financial participation for the ensuing year; 2) Approve appointment and/or discharge of the
Director; 3) Approve personnel policy and make final decisions on all major policy changes; and 4) Review and approves all
contracts.
In addition, an Operating Board was established and consists of two members of each participating City's Public Safety
Departments, including the heads of such departments or their designees. The Operating Board performs the following
functions: 1) Oversees the general operation of Valley Com, and advises and makes recommendations to the Administration
Board; 2) Make recommendations on Director selection; 3) Presents proposed policies and budgets to the Administration
Board; and 4) Reviews disbursements of funds by the Director.
The Director presents a proposed budget to the Operating Board on or before August 15 of each year. Said budget is then
presented to the Administrative Board by September 1 of each year. The Administration Board can make changes to the
proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each member city, in
accordance with the provisions of the interlocal agreement.
67
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
In May 1993 Valley Com entered into an agreement with King County to provide joint project management for the
acquisition and installation of 800-MHz emergency radio communications system approved by the voters of King County in
conjunction with a $57 million levy. In August 1993 Valley Com also entered into an Interlocal Cooperation Agreement
with the sub -regions of King County, Seattle, and Eastside Public Safety Communications, which governs the development
and installation of the new 800-MHz emergency radio system. Valley Com now provides emergency communication
dispatch services to a population of approximately 570,000.
Valley Com operates as an enterprise fund and is totally self-supporting through the implementation of user fees, and the
primary source of revenue is provided by charges for calls for service. The 800-MHz emergency radio communications
system operated by the agreement with King County is operated as a separate enterprise fund, and the Member Cities have no
equity interest in the contributed capital from this system.
The share of equity belonging to the five participating cities is shown below. Liabilities are the responsibility of the five
participating cities in direct proportion to their equity position.
Balances in 2012
Kent
Renton
Auburn
Tukwila
Federal Way
Total
Equity @ January 1, 2012 $
7,052,093
$ 4,996,753
$ 4,723,727
$ 2,812,717
$ 3,258,408
$ 22,843,698
Current year increase
87,685
65,681
59,850
30,690
66,176
310,082
Equity @ December 31, 2012 $
7,139,778
$ 5,062,434
$ 4,783,577
$ 2,843,407
$ 3,324,584
$ 23,153,780
Percent of equity
30.84%
21.86%
20.66%
12.28%
14.36%
100.00%
Prior year's percent of equity
30.87%
21.87%
20.68%
12.31%
14.26%
100.00%
A complete set of financial statements is available from:
Valley Communications Center, 27519 108t' Avenue SE, Kent, WA 98030.
South Correction Entity (SCORE)
The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an
Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments,
the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the
"Interlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1,
2009 and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This
interlocal agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated
October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and
the Host City fulfills all of its obligations as outlined in the Agreement.
SCORE, a governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own,
operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional
services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of
public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member
Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall
be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement.
Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility will be provided by bonds
issued by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development
authority chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755 and secured by the full faith and
credit of the Cities of Auburn, Burien Federal Way, Renton, SeaTac, and Tukwila (the "Owner Cities"). The SCORE PDA
issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following is a
summary of the debt service requirements for the bond issue:
68
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
Summary of Debt Service Requirements
Debt Service Schedule
Debt Service Allocation to Owner Cities
35% BA -Bs
Auburn
Burien
Federal Way
Renton
SeaTac
Tukwila
Year
Principal
Interest
Subsidy
Total
31%
4%
18%
36%
3%
8%
2013
$ 1,915,000
$ 5,126,998
$ (1,675,089) $
5,366,909
$ 1,663,742
$ 214,676
$ 966,044
$ 1,932,087
$ 161,007
$ 429,353
2014
1,950,000
5,066,566
(1,654,975)
5,361,591
1,662,093
214,464
965,086
1,930,173
160,848
428,927
2015
1,990,000
4,995,069
(1,632,787)
5,352,282
1,659,207
214,091
963,411
1,926,822
160,568
428,183
2016
2,065,000
4,911,886
(1,632,787)
5,344,099
1,656,671
213,764
961,938
1,923,876
160,323
427,528
2017
2,145,000
4,820,241
(1,621,980)�
5,343,261
1,656,411
213,730
961,787
1,923,574
160,298
427,461
2018-2022
11,990,000
22,399,915
(7,748,350)
26,641,565
8,258,885
1,065,663
4,795,482
9,590,963
799,247
2,131,325
2023-2027
14,485,000
18,727,798
(6,710,481)
26,502,317
8,215,718
1,060,093
4,770,417
9,540,834
795,070
2,120,185
2028-2032
17,725,000
13,590,870
(4,959,695)
26,356,175
8,170,414
1,054,247
4,744,112
9,488,223
790,685
2,108,494
2033-2037
21,855,000
7,082,263
(2,731,829)
26,205,434
8,123,685
1,048,217
4,716,978
9,433,956
786,163
2,096,435
2038-2039
10,115,000
676,321
(353,824)
10,437,497
3,235,624
417,500
1,878,749
3,757,499
313,125
835,000
Total
$ 86,235,000
$ 87,397,927
$ (30,721,797) $ 142,911,130
$ 44,302,450
$ 5,716,445
$ 25,724,004
$ 51,448,007
$ 4,287,334
$11,432,891
*Of the $25,724,004 allocation to Federal Way, $15,522,298 is for the principal portion and the remainder is for interest.
The City of Federal Way reports its share of equity interest in the Governmental Activities column within the Government -
wide financial statements under non -current assets. The following is condensed (unaudited) financial information as of
December 31, 2012 related to SCORE:
South Correction Entity (SCORE)
2012 Owner Cities Equity Allocation
Member
Percentof
2011
2012
city
i
i Balance
Distribution Equity Balance
Auburn
31.00%
$ 3,189,320
$ (1,820,461) $ 1,368,859
Burien
4.00%
411,525
(234,898) 176,627
Federal Way
18.00%
1,851,863
(1,057,043) 794,820
Renton
36.00%
3,703,728
(2,114,084) 1,589,644
SeaTac
3.00%
308,643
(176,174) 132,469
Tukwila
8.00%
823,050
(469,796) 353,254
Total
100.00%
$ 10,288,129
$ (5,872,456) $ 4,415,673
A complete set of financial statements is available from:
SCORE, 20817 17th Avenue South, Des Moines, WA 98198.
NOTE 15 - ACCOUNTING AND REPORTING CHANGES
Effective for financial statements for periods beginning after December 15, 2011, the City implemented GASB Statement
No. 63, Financial Reporting of Deferred Ou�flows of Resources, Deferred Inflow of Resources and Net Position. GASB
Statement No. 63 provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources,
introduced and defined in GASB Concepts Statement No. 4. This Statement amends the net asset reporting requirements in
Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments, and other pronouncements by incorporating deferred outflows of resources and deferred inflows of resources
into the definitions of the required components of the residual measure and by renaming that measure as net position, rather
than net assets.
Effective for financial statements for periods beginning after December 15, 2012, the City implemented early, GASB
Statement No. 65, Items Previously Reported as Assets and Liabilities. GASB Statement No. 65 establishes accounting and
reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were
previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that
were reported as assets and liabilities.
NOTE 16 - SUBSEQUENT EVENTS
On January 1, 2013, the City transferred coverage from the Washington Cities Insurance Authority to three new insurance
providers. The City hopes eventually to become self -insured, which the City believes will provide a greater ability to control
cost and implement frugal innovation. The new insurance carriers will allow the City to move toward its goal of self-
insurance by allowing the City to self -insure up to $250,000, while providing insurance for claims that may exceed that
amount. Brit Global Specialty USA is the carrier providing general liability, automobile liability, public officials
miscellaneous liability, employee benefits liability and law enforcement activities coverage with a $250,000 self-insurance
retention with aggregate limits of $10,000,000. Philadelphia Insurance Companies is the carrier for property liability with a
$25,000 deductible with single loss limits of $36,897,057 for building and $3,849,548 in contents. Travelers Casualty and
Surety Company of America is the carrier providing public officials and crime fidelity insurance. Coverage includes fidelity
69
City of Federal Way 2012 CAFR
Notes to the Basic Financial Statements
for employee theft, forgery or alteration, on premises, in transit, money orders and counterfeit money, computer crime, fund
transfer fraud, and claims expense with a deductible ranging from $5,000 to $25,000 with single loss limits ranging from
$50,000 to $1,000,000.
In February 2013 Moody's Investors Service assigned an Aa3 rating to the City's Limited Tax General Obligation Refunding
Bonds, 2013. At the same time, Moody's affirmed the Aa3 rating on the City's approximately $355,000 limited tax G.O.
bonds, post refunding. Moody's also affirmed the City's Aa2 unlimited tax GO -equivalent issuer rating. In March 2013 the
city issued advance refunding bonds for the purpose of refunding the 2003 Federal Way Community Center bonds on
December 1, 2013. Details of the refunding bond are as follows: Issue Amount $12,415,000; True Interest Cost 2.886%;
Net Present Value of Refunded Par 14%; Net Present Value Savings $1,741,000.
FTI
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
Combining Statement — Nonmajor Governmental Funds' Description
For the Year Ended December 31, 2012
Special Revenue Funds
Special Revenue funds are used to account for the proceeds of revenue sources (other than special assessments, expendable
trusts or major capital projects) that are legally restricted to expenditures for specified purposes.
The Arterial Street Fund accounts for the receipt and expenditure of the State -levied motor vehicle fuel tax distributed to the
City in accordance with State R.C.W. 82.36.020. These revenues are to be used for the construction, improvement, chip
sealing, seal -coating, and repair of arterial highways and city streets, or for the payment of related municipal indebtedness.
The Solid Waste/Recycling Fund was established to account for special refuse collection fees used to manage the Solid
Waste and Recycling program.
The Special Contracts/Studies Fund accounts for receipts and disbursements related to special contracts and special projects
where completion will extend beyond the calendar year.
The HotellMotel Lodging Tax Fund was established to account for all lodging tax receipts and disbursements related to
tourism promotion and acquisition and/or operation of tourism -related facilities.
The Federal Way Community Center Fund was established to account for the operation of the community center. The fund
is supported by user fees and designated utility tax transfers.
The Traffic Safety Fund was established to account for the penalties and fines collected in criminal traffic violations and
those related to the operation of the Red Light Photo Enforcement Program. Funds collected for traffic safety shall be used
for, but not limited to prevention, education, and enforcement effectors related to traffic safety and compliance with traffic
control devices within the city, including maintenance and operation costs.
The Community Development Block Grant Fund accounts for the receipt and disbursement of federal grant revenue
received through the Department of Housing and Urban Development's Community Development Block Grant Program.
Separate subsidiary records are maintained to administer the individual projects accounted for in this fund.
The Path and Trails Reserve Fund was established in accordance with State law to accumulate unexpended proceeds of the
City's '/2% motor vehicle fuel tax receipts which are restricted in use to the construction and maintenance of paths and trails
within City right-of-way. In August 2007, King County voters approved a new $0.05, six -year, inflation adjusted property
tax lid lift to expand park and recreation opportunities. One cent of the five -cent acquisition levy proceeds will be distributed
to cities for acquisition and development of open space and natural lands and city trail projects that support connections to the
regional trail system.
Capital Proiects Funds
The Capital Project Funds account for the acquisition or construction of major capital facilities with the exception of those
facilities financed by proprietary and trust funds. The major sources of revenue for this fund are general obligation bond
proceeds, grants from other agencies, local taxes and contributions from other funds.
The Parks CIP Fund was established to account for receipts and disbursements related to acquisition, design, construction
and any other related parks capital project expenditures.
The City Facilities CIP Fund accounts for receipts and disbursements related to acquisition, design, construction and any
other related municipal facility and community/senior capital project expenditures.
71
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
4ik
CITY OF '0'::tS:pFederal Way
It"s all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
72
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2012
ASSETS
Equity in pooled cash & investments
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
Deposits payable
Interfund loans payable
TOTAL LIABILITIES
Special Capital
Revenue Projects Total
$ 4,294,342 $ 3,410,809 $ 7,705,151
46,693 - 46,693
361,575 - 361,575
4,702,610 3,410,809 8,113,419
345,601
12,692 358,293
12,206
- 12,206
10,000
- 10,000
367,807
12,692 380,499
DEFERRED INFLOW OF RESOURCES 97,734
Fund Balance:
Restricted
812,174
2,429,593
3,241,767
Committed
3,424,896
968,524
4,393,420
TOTAL FUND BALANCES
4,237,069
3,398,117
7,635,187
TOTAL LIABILITIES AND
FUND BALANCE
$ 4,702,610
$ 3,410,809
$ 8,113,419
73
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2012
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel
Street
Recycling
Studies
Lodging Tax
ASSETS
Equity in pooled cash & investments
$ 41,864
$ 121,158
$ 502,613
$ 88,879
Receivables (net):
Accounts and contracts
-
-
-
-
Due from other governments
37,997
60,446
-
13,537
TOTAL ASSETS
79,861
181,604
502,613
102,416
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
332
9,602
238
-
Deposits payable
-
-
-
-
Interfund loans payable
-
-
-
-
TOTAL LIABILITIES
332
9,602
238
-
DEFERRED INFLOW OF RESOURCES
-
-
-
-
Fund Balance:
Restricted
-
-
502,375
102,416
Committed
79,530
172,002
-
-
TOTAL FUND BALANCES
79,530
172,002
502,375
102,416
TOTAL LIABILITIES AND
FUND BALANCE
$ 79,861
$ 181,604
$ 502,613
$ 102,416
74
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
ASSETS
Equity in pooled cash & investments
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
Deposits payable
Interfund loans payable
TOTAL LIABILITIES
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2012
Federal way
Community
Paths and
Community Traffic
Development
Trails
Center Safety
Block Grant
Reserve
Total
$ 1,318,533 $ 2,031,182
$ 24,165
$ 165,947
$ 4,294,341
46,693 -
-
-
46,693
- -
248,874
721
361,575
1,365,226 2,031,182
273,039
166,668
4,702,609
57,788 55,316 222,325
12,206 - -
- - 10,000
69,994 55,316 232,325
345,600
- 12,206
10,000
367,806
DEFERRED INFLOW OF RESOURCES 97,734 - - - 97,734
Fund Balance:
Restricted - - 40,715 166,668 812,174
Committed 1,197,498 1,975,866 - - 3,424,896
TOTAL FUND BALANCES 1,197,498 1,975,866 40,715 166,668 4,237,069
TOTAL LIABILITIES AND
FUND BALANCE $ 1,365,226 $ 2,031,182 $ 273,039 $ 166,668 $ 4,702,609
01
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2012
City
Facilities
Parks
Total
ASSETS
Equity in pooled cash & investments $
1,137,853
$ 2,272,957
$ 3,410,810
TOTAL ASSETS
1,137,853
2,272,957
3,410,810
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable
-
12,692
12,692
TOTAL LIABILITIES
-
12,692
12,692
Fund Balance:
Restricted
657,781
1,771,812
2,429,593
Committed
480,071
488,453
968,524
TOTAL FUND BALANCES
1,137,852
2,260,265
3,398,117
TOTAL LIABILITIES AND
FUND BALANCE $
1,137,853
$ 2,272,957
$ 3,410,810
76
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For Year Ended December 31, 2012
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
Special
Capital
Revenue
Projects
Total
$ 353,955
$ -
$ 353,955
1,539,408
-
1,539,408
1,802,294
114,878
1,917,172
2,260,336
-
2,260,336
2,882
3,496
6,378
234,988
3,739
238,728
6,193,863
122,113
6,315,977
929,044
10,124
939,168
9,386
-
9,386
1,937,144
-
1,937,144
409,042
-
409,042
304,489
-
304,489
2,214,485
30,445
2,244,930
20,859
807,924
828,783
5,824,449
848,493
6,672,942
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 369,414 (726,380) (356,965)
OTHER FINANCING SOURCES (USES)
Transfers in 1,756,000 430,000 2,186,000
Transfers out (1,007,807) - (1,007,807)
TOTAL OTHER FINANCING
SOURCES (USES) 748,193 430,000 1,178,193
NET CHANGE IN FUND BALANCES 1,117,607 (296,380) 821,228
FUND BALANCES - BEGINNING 3,119,462 3,694,497 6,813,959
FUND BALANCES - ENDING $ 4,237,069 $ 3,398,117 $ 7,635,187
V&A
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2012
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel
Street
Recycling
Studies
Lodging Tax
REVENUES
Taxes $
$ -
$ -
$ 193,344
Intergovernmental
484,393
139,966
-
-
Service charges and fees
41,500
282,584
-
-
Fines and forfeitures
-
3,700
-
-
Interest
77
119
481
77
Other
-
695
-
-
TOTAL REVENUES
525,970
427,064
481
193,421
EXPENDITURES
Current:
General government
-
-
34,000
-
Security of persons and property
-
-
-
-
Transportation
1,937,144
-
-
-
Physical environment
-
409,042
-
-
Economic environment
-
-
-
304,489
Culture and recreation
-
-
-
-
Capital outlay
-
-
20,859
-
TOTAL EXPENDITURES
1,937,144
409,042
54,859
304,489
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(1,411,174)
18,022
(54,378)
(111,068)
OTHER FINANCING SOURCES (USES)
Transfers in
1,021,000
-
-
-
Transfers out
-
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
1,021,000
-
-
-
NET CHANGE IN FUND BALANCES
(390,174)
18,022
(54,378)
(111,068)
FUND BALANCES - BEGINNING
469,704
153,980
556,753
213,484
FUND BALANCES - ENDING $
79,530
$ 172,002
$ 502,375
$ 102,416
78
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2012
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Culture and recreation
Capital outlay
Federal way Community
Community Traffic Development
Center Safety Block Grant
Paths and
Trails
Reserve Total
$ - $ - $ - $ 160,611 $ 353,955
- - 905,854 9,195 1,539,408
1,478,210 - - - 1,802,294
- 2,256,636 - - 2,260,336
534 1,539 - 55 2,882
234,294 - - - 234,988
1,713,038 2,258,175 905,854 169,861 6,193,863
- - 895,044 - 929,044
9,386 - - 9,386
- - - 1,937,144
- 409,042
- - - 304,489
2,214,485 - - 2,214,485
- - 20,859
TOTAL EXPENDITURES
2,214,485
9,386
895,044
-
5,824,449
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(501,447)
2,248,789
10,810
169,861
369,414
OTHER FINANCING SOURCES (USES)
Transfers in
731,000
-
4,000
-
1,756,000
Transfers out
-
(830,000)
(22,807)
(155,000)
(1,007,807)
TOTAL OTHER FINANCING
SOURCES (USES)
731,000
(830,000)
(18,807)
(155,000)
748,193
NET CHANGE IN FUND BALANCES
229,553
1,418,789
(7,997)
14,861
1,117,607
FUND BALANCES - BEGINNING
967,945
557,077
48,712
151,807
3,119,462
FUND BALANCES - ENDING $
1,197,498
$ 1,975,866
$ 40,715
$ 166,668
$ 4,237,069
79
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For Year Ended December 31, 2012
City
Facilities Parks Total
REVENUES
Service charges and fees $ - $ 114,878 $ 114,878
Interest 1,145 2,351 3,496
Other 500 3,239 3,739
TOTAL REVENUES 1,645 120,468 122,113
EXPENDITURES
Current:
General government
10,124
-
10,124
Culture and recreation
-
30,445
30,445
Capital outlay
139,277
668,647
807,924
TOTAL EXPENDITURES
149,401
699,092
848,493
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (147,756)
(578,624)
(726,380)
OTHER FINANCING SOURCES (USES)
Transfers in
-
430,000
430,000
TOTAL OTHER FINANCING
SOURCES (USES)
-
430,000
430,000
NET CHANGE IN FUND BALANCES
(147,756)
(148,624)
(296,380)
FUND BALANCES - BEGINNING
1,285,608
2,408,889
3,694,497
FUND BALANCES - ENDING $
1,137,852
$ 2,260,265
$ 3,398,117
80
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
ARTERIAL STREET
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 500,000 $ 500,000
$ 484,393
$ (15,607)
Service charges and fees
- -
41,500
41,500
Interest
2,500 2,500
77
(2,423)
TOTAL REVENUES
502,500 502,500
525,970
23,470
EXPENDITURES
Current:
Transportation 1,523,500 1,993,204 1,937J44 56,060
TOTAL EXPENDITURES 1,523,500 1,993,204 1,937,144 56,060
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,021,000) (1,490,704) (1,411,174) 79,530
OTHER FINANCING SOURCES (USES)
Transfers in 1,021,000 1,021,000 1,021,000 -
TOTAL OTHER FINANCING
SOURCES (USES) 1,021,000 1,021,000 1,021,000 -
NET CHANGE IN FUND BALANCES - (469,704) (390,174) 79,530
FUND BALANCES - BEGINNING - 469,704 469,704 -
FUND BALANCES - ENDING $ - $ - $ 79,530 $ 79,530
81
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
SOLID WASTE & RECYCLING
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 136,000
$ 174,736
$ 139,966
$ (34,770)
Service charges and fees
278,120
278,120
282,584
4,464
Fines and forfeitures
-
-
3,700
3,700
Interest
-
-
119
119
Other
-
-
695
695
TOTAL REVENUES
414,120
452,856
427,064
(25,792)
EXPENDITURES
Current:
Physical environment
420,574
456,441
409,042
47,399
TOTAL EXPENDITURES
420,574
456,441
409,042
47,399
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(6,454)
(3,585)
18,022
21,607
NET CHANGE IN FUND BALANCES
(6,454)
(3,585)
18,022
21,607
FUND BALANCES - BEGINNING
135,093
153,980
153,980
-
FUND BALANCES - ENDING
$ 128,639
$ 150,395
$ 172,002
$ 21,607
82
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
HOTEL/MOTEL LODGING TAX
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 155,000 $ 193,440
$ 193,344
$ (96)
Interest
300 500
77
(423)
Other
6,000 2,499
-
(2,499)
TOTAL REVENUES
161,300 196,439
193,421
(3,018)
EXPENDITURES
Current:
Economic environment 161,300 409,923 304,489 105,434
TOTAL EXPENDITURES 161,300 409,923 304,489 105,434
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - (213,484) (111,068) 102,416
NET CHANGE IN FUND BALANCES - (213,484) (111,068) 102,416
FUND BALANCES - BEGINNING - 213,484 213,484 -
FUND BALANCES - ENDING $ - $ - $ 102,416 $ 102,416
83
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
FEDERAL WAY COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
REVENUES
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Culture and recreation
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 1,281,122 $ 1,281,122 $ 1,478,210 $ 197,088
- - 534 534
252,500 252,500 234,294 (18,206)
1,533,622 1,533,622 1,713,038 179,416
2,177,404 2,203,113 2,214,485 (11,372)
2,177,404 2,245,120 2,214,485 30,635
OVER (UNDER) EXPENDITURES (643,782) (711,498) (501,447) 210,051
OTHER FINANCING SOURCES (USES)
Transfers in 731,000 731,000 731,000 -
TOTAL OTHER FINANCING
SOURCES (USES) 731,000 731,000 731,000 -
NET CHANGE IN FUND BALANCES
87,218
19,502
229,553 210,051
FUND BALANCES - BEGINNING
778,960
967,945
967,945 -
FUND BALANCES - ENDING $
866,178
$ 987,447
$ 1,197,498 $ 210,051
84
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
TRAFFIC SAFETY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Fines and forfeitures
$ 830,000 $ 830,000
$ 2,256,636
$ 1,426,636
Interest
- -
1,539
1,539
TOTAL REVENUES
830,000 830,000
2,258,175
1,428,175
EXPENDITURES
Current:
Security of persons and property - 26,754 9,386 17,368
TOTAL EXPENDITURES - 26,754 9,386 17,368
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 830,000 803,246 2,248,789 1,445,543
OTHER FINANCING SOURCES (USES)
Transfers out (830,000) (830,000) (830,000) -
TOTAL OTHER FINANCING
SOURCES (USES) (830,000) (830,000) (830,000) -
NET CHANGE IN FUND BALANCES - (26,754) 1,418,789 1,445,543
FUND BALANCES - BEGINNING 105,288 557,077 557,077 -
FUND BALANCES - ENDING $ 105,288 $ 530,323 $ 1,975,866 $ 1,445,543
85
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
PATH & TRAILS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Taxes $
155,000
$ 155,000
$ 160,611
$ 5,611
Intergovernmental
8,000
8,000
9,195
1,195
Interest
-
-
55
55
TOTAL REVENUES
163,000
163,000
169,861
6,861
EXPENDITURES
Current:
General government
-
-
-
-
TOTAL EXPENDITURES
-
-
-
-
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
163,000
163,000
169,861
6,861
OTHER FINANCING SOURCES (USES)
Transfers out
(155,000)
(155,000)
(155,000)
-
TOTAL OTHER FINANCING
SOURCES (USES)
(155,000)
(155,000)
(155,000)
-
NET CHANGE IN FUND BALANCES
8,000
8,000
14,861
6,861
FUND BALANCES - BEGINNING
140,768
151,807
151,807
-
FUND BALANCES - ENDING $
148,768
$ 159,807
$ 166,668
$ 6,861
86
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
Budget and Actual — Debt Service Fund Description
For the Year Ended December 31, 2012
The Debt Service Fund accounts for the accumulation of resources for the payment of general obligation and special
assessment bond principal, interest and related costs. Revenues for this fund consist of the City's real estate excise tax,
transfers from the Utility Tax Fund, and/or other revenues designated by the City Council.
87
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2012
ASSETS
Equity in pooled cash & investments
Receivables (net):
Taxes
TOTAL ASSETS
DEFERRED INFLOW OF RESOURCES
Fund Balance:
Restricted
TOTAL FUND BALANCES
TOTAL LIABILITIES AND
FUND BALANCE
Debt
Service
$ 3,978,238
301,156
4,279,394
97,050
4,182,345
4,182,345
$ 4,182,345
88
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2012
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 900,000 $ 1,400,000
$ 1,507,315
$ 107,315
Interest
15,000 15,000
3,287
(11,713)
TOTAL REVENUES
915,000 1,415,000
1,510,602
95,602
EXPENDITURES
Debt service: - -
Principal 510,850 510,850 480,760 30,090
Interest/fiscal charges/admin fees 1,571,819 646,819 602,572 44,247
TOTAL EXPENDITURES 2,082,669 1,157,669 1,083,332 74,337
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(1,167,669)
257,331
427,270 169,939
OTHER FINANCING SOURCES (USES)
Transfers in
915,000
915,000
913,892 (1,108)
Transfers out
(100,000)
(1,025,000)
(1,025,000) -
TOTAL OTHER FINANCING
SOURCES (USES)
815,000
(110,000)
(111,108) (1,108)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
(352,669) 147,331 316,162 168,831
2,662,878 3,866,183 3,866,183 -
$ 2,310,209 $ 4,013,514 $ 4,182,345 $ 168,831
89
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
4ik
CITY OF '0'::tS:pFederal Way
It"s all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
rS
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
Combining Statement — Internal Service Fund's Description
For the Year Ended December 31, 2012
Internal Service Funds
Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to
other departments or agencies of a government, or to other governments, on a cost -reimbursement basis.
The Risk Management Fund accounts for the City's risk financing activities established to minimize adverse effects of
losses associated with property and casualty, medical and dental, unemployment and worker's compensation claims. Both
risk control (to minimize the losses that strike and organization) and risk financing (to obtain finances to provide for or
restore the economic damages of those losses) are involved. The City is currently self -insuring only State Unemployment
Compensation. Related premiums received by the fund are used to reimburse the unemployment benefits paid to eligible
individuals and to establish reserves for the payment of estimated future unemployment claims liability. The City is also
currently recovering costs and building reserves for general liability including property, casualty, errors and omissions and
fidelity coverage.
The Information Systems Fund was established to account for all costs associated with data processing, telecommunications
and the Geographical Information System (GIS). This fund will own and depreciate all non-proprietary fund assets related to
these functions, and will charge equipment/software users for both maintenance/operating costs and equipment replacement
charges based on depreciation schedules.
The Support Services Fund will account for duplication, graphics and other general support services provided to departments
and funds throughout the City.
The Fleet and Equipment Fund accounts for the cost of maintaining City vehicles and other motorized equipment. Rates
charged to user departments are based on the full cost of maintaining equipment items, including the recovery of related
depreciation expense.
The Buildings and Furnishings Fund accounts for all costs associated with the operation and maintenance of specified City
buildings. City building facilities and furnishings will be owned by this Fund, and both maintenance/operating costs and
depreciation recovery will be charged City departments and funds.
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2012
Risk
Information
Support
Fleet and
Buildings and
Management
Systems
Services
Equipment
Furnishings
TOTAL
ASSETS
Current Assets
Equity in pooled cash & investments
$ 5,628,656
$ 3,756,957 $
287,535 $
5,777,473
$ 1,607,749
$ 17,058,370
Prepaid items
-
-
5,000
-
-
5,000
TOTAL CURRENT ASSETS
5,628,656
3,756,957
292,535
5,777,473
1,607,749
17,063,370
Noncurrent assets
Capital assets:
Building/structures
-
-
-
-
16,515,708
16,515,708
Machinery/furniture/equipment
7,201,917
263,815
8,339,968
-
15,805,700
Less accumulated depreciation
(5,600,610)
(143,907)
(4,863,127)
(6,099,544)
(16,707,188)
TOTAL NONCURRENT ASSETS
-
1,601,307
119,908
3,476,841
10,416,164
15,614,220
TOTAL CURRENT ASSETS
5,628,656
5,358,264
412,443
9,254,314
12,023,913
32,677,590
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
70,782
98,450
6,672
27,716
30,617
234,237
TOTAL CURRENT LIABILITIES
70,782
98,450
6,672
27,716
30,617
234,237
Long-term liabilities:
Compensated absences payable
- 41,247
2,926
44,173
TOTAL LONG-TERM LIABILITIES
- 41,247
2,926
44,173
TOTAL LIABILITIES
70,782 139,697
6,672
30,642
30,617
278,410
NET POSITION
Net Investment in capital
- 1,601,307
119,908
3,476,841
10,416,164
15,614,220
Unrestricted
5,557,874 3,617,260
285,863
5,746,831
1,577,132
16,784,960
TOTAL NET POSITION
$ 5,557,874 $ 5,218,567
$ 405,771
$ 9,223,672
$ 11,993,296
$ 32,399,180
r•►
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
INTERNAL SERVICE FUNDS
COMBINING
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND
NET POSITION
For Year Ended December 31, 2012
Risk
Information
Support
Fleet and
Buildings and
Management
Systems
Services
Equipment
Furnishings
TOTAL
OPERATING REVENUES:
Service charges and fees
$ 1,059,742
$ 1,733,870 $
142,038
$ 2,129,456
$ 494,095
$ 5,559,201
Intergovernmental
-
-
-
37,161
32,737
69,898
Miscellaneous
172,790
22,893
707
21,219
217,610
TOTAL OPERATING REVENUES
1,232,532
1,756,763
142,038
2,167,324
548,051
5,846,709
OPERATING EXPENSES:
Personal services
634,524
-
37,323
89,424
761,271
Materials and supplies
1,119
24,548
18,885
535,450
27,836
607,838
Services and charges
60,500
480,810
76,040
373,660
299,458
1,290,468
Intergovernmental
51,319
123,918
-
180
-
175,417
Insurance
487,336
487,336
Claims
452,921
-
452,921
Depreciation
-
426,519
31,087
816,201
901,625
2,175,432
TOTAL OPERATING EXPENSES
1,053,195
1,690,319
126,012
1,762,814
1,318,343
5,950,683
OPERATING INCOME (LOSS)
179,337
66,444
16,026
404,510
(770,292)
(103,974)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
47,462
-
47,462
Interest income
3,545
3,505
267
4,996
1,462
13,775
TOTAL NON -OPERATING REVENUES (EXPENSES)
3,545
3,505
267
52,458
1,462
61,237
INCOME (LOSS) BEFORE TRANSFERS
182,882
69,949
16,293
456,968
(768,830)
(42,737)
Capital contributions
148,363
66,559
214,922
Transfers in
56,790
56,790
Transfers out
(56,790)
(56,790)
CHANGE IN NET POSITION
126,092
218,312
16,293
580,317
(768,830)
172,185
NET POSITION - BEGINNING
5,431,782
5,000,255
389,477
8,643,354
12,762,126
32,226,994
NET POSITION - ENDING
$ 5,557,874
$ 5,218,567 $
405,771
$ 9,223,672
$ 11,993,296
$ 32,399,180
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
Transfers out
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Depreciation expenses
(Increases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
Increases/(decrease) in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital asset.
Risk
Information
Support
Management
Systems
Services
$ 1,059,742
$ 1,739,446
$ 142,038
(452,921)
-
-
(83,332)
(554,879)
(94,064)
-
(636,363)
-
(538,655)
(123,918)
-
172,791
17,318
-
157,625
441,604
47,974
(56,790)
(56,790)
-
- (297,069) (40,591)
- (297,069) (40,591)
3.545 3.505 267
J,J'YJ J,JVJ LV/
104,380 148,040 7,650
5,524,276 3,608,917 279,884
5,628,656 3,756,956 287,533
179,337 66,444 16,026
426,519 31,087
(21,712) (49,520) 861
(1,839) -
(21,712) 375,160 31,948
$ 157,625 $ 441,604 $ 47,974
$ - $ 148,363 $ -
►!'
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users
Cash payments to claimants
Cash payments to suppliers for goods/services
Cash payments to employees
Cash payments to other governments for goods and services
Other operating receipts
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in
Transfers out
NET CASH PROVIDED BY NONCAPITAL FINANCING
CASH FLOWS FROM CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES:
Acquisition of capital asset/construction work in progress
Proceeds from the sale of capital assets
NET CASH USED FOR CAPITAL AND CAPITAL -
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of interest
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income/(loss)
Adjustments to reconcile operating income to net cash
provided/(used) by operating activities:
Depreciation expenses
(Increases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital asset.
Fleet and
Buildings and
Equipment
Furnishings
TOTAL
$ 2,166,617
$ 616,463
$ 5,724,306
-
-
(452,921)
(905,072)
(405,112)
(2,042,459)
(37,673)
(89,424)
(763,460)
-
-
(662,573)
708
21,219
212,036
1,224,580
143,146
2,014,929
56,790
-
56,790
-
-
(56,790)
56,790
-
-
(856,232) (18,153) (1,212,045)
52,758 - 52,758
(803,474) (18,153) (1,159,287)
4,996 1,462 13,775
LF,77D 1,°FOL 1J,//J
482,892 126,455 869,417
5,294,5 81 1,481,294 16,188,952
5,777,473 1,607,749 17,058,367
404,511
(770,292)
(103,974)
816,201
901,625
2,175,432
-
40,571
40,571
-
49,060
49,060
4,218
(77,818)
(143,971)
(350)
-
(2,189)
820,069
913,438
2,118,903
$ 1,224,580 $
143,146 $
2,014,929
$ 66,559 $
- $
214,922
►` .
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
4ik
CITY OF '0'::tS:pFederal Way
It"s all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
01
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
CAPITAL ASSETS USED IN THE
OPERATION
OF GOVERNMENTAL FUNDS
97
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
December 31, 2012
GOVERNMENTAL FUNDS CAPITAL ASSETS
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS
INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY SOURCE:
General Fund
Special Revenue Funds
Capital Project Funds
Donations
TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS
2012 2011
$ 303,565,575
$302,168,217
651,464
651,464
43,865,580
43,865,580
184,000
184,000
151,204,738
147,163,554
22,743,528
21,158,058
522,214,885 515,190,873
125,244,871
125,244, 871
252,375,395
252,375,395
122,888,397
121,141,891
21,706,222
16,428,716
$ 522,214,885 $ 515,190,873
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net position.
r•:
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2012
Improvements Machinery
Construction
Other than
and
in
Total
Total
Function and Activity
Land
Buildings Buildings
Equipment
Infrastructure
Progress
2012
2011
GENERAL GOVERNMENT
Miscellaneous general government
$ 18,013,262
$ $ 19,973
$184,000
$ 6,139,001
$ 414,278
$ 24,770,514
$ 23,393,421
Total General Government:
18,013,262
19,973
184,000
6,139,001
414,278
24,770,514
23,393,421
CULTURE AND RECREATION
Culture and Recreation
121,007,794
651,464 43,845,607
-
94,474,128
2,769,284
262,748,277
262,079,630
Total Culture and Recreation:
121,007,794
651,464 43,845,607
94,474,128
2,769,284
262,748,277
262,079,630
TRANSPORTATION
Streets and Traffic
164,544,519
- -
50,591,609
19,559,966
234,696,094
229,717,822
Total Transportation:
164,544,519
50,591,609
19,559,966
234,696,094
229,717,822
Total General Fixed Asset by Function: $303,565,575 $ 651,464 $ 43,865,580 $184,000 $151,204,738 $ 22,743,528 $522,214,885 $515,190,873
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to governmental funds. Accordingly, the capital assets
reported in internal service funds are excluded from the above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net position.
r'
City of Federal Way 2012 CAFR
Fund Financial Statements and Schedules
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2012
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
CULTURE AND RECREATION
TOTAL CULTURE AND RECREATION
TRANSPORTATION
Streets and traffic
TOTAL TRANSPORTATION
TOTAL GENERAL FIXED ASSETS
Governmental
Funds
Capital Assets
1/1/2012 Additions Deductions
Governmental
Funds
Capital Assets
12/31/2012
$ 23,393,421 $ 1,377,093 $ - $ 24,770,514
23,393,421 1,377,093 - 24,770,514
262,079,630 668,647 - 262,748,277
262,079,630 668,647 - 262,748,277
229,717,822 4,978,272 - 234,696,094
229,717,822 4,978,272 - 234,696,094
$ 515,190,873 $ 7,024,012 $ - $ 522,214,885
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net position.
100
City of Federal Way 2012 CAFR
Statistical Section
Statistical Section
The statistical section presents detailed information as a context for understanding what the information in the financial
statements and note disclosures say about the City's overall financial health. The following are the five categories of
information presented in this section.
Financial Trends — These schedules contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity — These schedules contain information to help the reader assess the City's most significant local revenue
sources, property tax and sales tax.
Debt Capacity — These schedules present information to help the reader assess the affordability of the City's current levels
of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information — These schedules offer demographic and economic indicators to help the reader
understand the environment within which the City's financial activities take place.
Operating Information — These schedules contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the city provides and the activities it performs.
101
City of Federal Way 2012 CAFR
Statistical Section
NET
POSITION BY COMPONENT
Last Seven Fiscal Years
2006
2007
2008
2009
2010
2011
2012
Governmental activities
Net investment in capital assets
$ 93,835,163
$ 439,127,122
$ 456,600,030
$ 442,704,401
465,671,345
470,074,905
470,597,776
Restricted
38,359,454
32,269,512
28,434,066
27,476,530
17,442,323
23,941,601
22,847,077
Unrestricted
15,051,966
23,651,674
24,773,913
44,282,822
44,613,406
38,602,445
45,027,323
Total governmental activities net position
147,246,583
495,048,308
509,808,009
514,463,753
527,727,074
532,618,951
538,472,176
Business -type activities
Net investment in capital assets
43,697,633
45,264,105
50,494,590
50,578,649
50,563,097
50,052,887
50,280,880
Restricted
26,439
15,777
42,558
16,366
9,411
18,831
26,496
Unrestricted
7,467,417
6,550,179
5,071,617
5,115,275
5,015,367
5,398,786
5,968,302
Total business -type activities net position
51,191,489
51,830,061
55,608,765
55,710,290
55,587,875
55,470,504
56,275,678
Primary government
Net investment in capital assets
137,532,796
484,391,227
507,094,620
493,283,050
516,234,442
520,127,792
520,878,656
Restricted
38,385,893
32,285,289
28,476,624
27,492,896
17,451,734
23,960,432
22,873,573
Unrestricted
22,519,383
30,201,853
29,845,530
49,398,097
49,628,773
44,001,231
50,995,625
Total primary government net assets $
198,438,072
$ 546,878,369
$ 565,416,774
$ 570,174,043
$583,314,949
$588,089,455
$594,747,853
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
102
City of Federal Way 2012 CAFR
Statistical Section
CHANGES IN NET POSITION
Last Seven Fiscal
Years
2006
2007
2008
2009
2010
2011
2012
Expenses
Governmental activities,
General government
$ 4,364,710
$ 4,506,800
$5,606,797
$4,566,457
$ 4,865,827
$ 4,448,449
$ 4,300,691
Security of persons and property
19,906,722
23,107,683
24,745,284
26,341,614
26,842,240
27,222,584
27,604,936
Transportation
5,628,100
9,986,067
7,891,298
9,448,397
9,781,800
13,539,598
9,946,776
Physical environment
313,388
336,588
370,718
450,914
451,470
424,466
415,935
Economic environment
3,162,089
3,319,955
3,382,572
3,560,620
3,175,005
2,782,435
2,645,478
Health and human svcs
622,761
684,984
705,976
776,854
767,108
690,643
754,727
Culture and recreation
5,172,663
6,506,137
6,955,442
8,089,242
8,073,804
8,105,578
8,081,401
Interest on long-term debt
1,420,691
1,122,358
901,161
811,124
685,214
614,571
602,572
Total governmental activities expenses
40,591,124
49,570,572
50,559,248
54,045,222
54,642,468
57,828,324
54,352,517
Business -type activities:
Surface Water Mgmt
3,142,613
3,454,193
4,060,440
3,345,027
3,384,352
3,527,590
3,272,514
Dumas Bay Center
925,825
980,588
1,045,250
984,103
849,176
890,738
873,144
Total business -type activities expenses
4,068,438
4,434,781
5,105,690
4,329,130
4,233,528
4,418,328
4,145,658
Total primary government expense;
44,659,562
54,005,353
55,664,938
58,374,352
58,875,996
62,246,652
58,498,175
Program Revenues
Governmental activities,
Charges for services
General Government
1,052,641
3,510,339
$2,313,939
$873,258
975,515
816,140
924,966
Security of Persons & Property
4,800,920
2,110,164
2,309,406
5,037,388
5,381,407
4,985,320
5,937,100
Transportation
1,357,333
3,119,637
513,340
1,806,846
1,961,083
2,484,058
2,139,292
Physical Environment
75,580
-
262,847
86,230
90,512
77,875
89,457
Economic Environment
762,603
1,009,707
1,962,624
680,908
636,534
510,483
568,973
Health
150,192
-
-
148,579
153,792
126,710
162,322
Culture & Recreation
1,247,495
531,041
2,561,685
1,546,931
1,618,659
1,487,099
1,738,098
Operating grants and contributions
1,512,394
22,858
1,538,476
2,172,168
9,718,920
4,597,981
5,367,163
Capital grants and contributions
5,973,071
11,457,030
8,933,154
8,452,149
9,044,477
9,716,551
5,225,265
Total governmental activities program revenues
16,932,229
21,760,776
20,395,471
20,804,457
29,580,898
24,802,216
22,152,636
Business -type activities:
Charges for services
4,130,179
3,667,168
4,473,453
4,183,012
4,246,235
4,020,144
4,222,726
Operating grants and contributions
1,113,010
632,185
-
-
-
265,660
576,182
Capital grants and contributions
-
222,474
-
-
-
-
-
Total business -type activities program revenues
5,243,189
4,521,827
4,473,453
4,183,012
4,246,235
4,285,804
4,798,908
22,175,418
26,282,603
24,868,924
24,987,469
33,827,133
29,088,020
26,951,544
Net (Expense)/Revenue
Governmental activities
(23,658,895)
(27,809,796)
(30,163,777)
(33,240,765)
(25,061,570)
(33,026,108)
(32,199,881)
Business -type activities
1,174,751
87,046
(632,237)
(146,118)
12,707
(132,524)
653,250
General Revenues and Other Changes in Net Position
Governmental activities,
Taxes
Sales tax
12,409,719
13,048,624
12,144,276
10,583,298
10,708,951
10,858,381
10,534,147
Local Criminal Justice Sales Tax
1,953,822
2,145,383
2,051,524
1,743,893
1,701,120
1,795,971
1,864,991
Utility tax
9,043,449
12,796,461
13,469,136
13,549,472
12,890,310
13,068,510
13,083,179
Property tax
8,892,558
9,059,734
9,397,456
9,653,537
9,609,740
9,867,614
10,052,109
Real estate excise tax
5,499,911
4,898,537
2,590,310
1,428,985
1,403,361
1,560,395
1,507,313
Gambling Tax
1,363,468
1,489,952
1,259,783
1,127,203
493,486
511,005
114,443
Hotel/Motel Tax
175,219
191,691
188,833
154,148
149,058
185,289
193,344
Leasehold tax
4,592
7,254
5,712
4,999
5,757
6,259
5,820
Other
3,221,392
6,971,413
6,502,869
2,020,751
1,210,341
1,061,026
838,259
Transfers
(107,581)
(185,495)
123,518
(200,907)
152,768
(113,000)
(140,500)
Total governmental activities
42,456,549
50,423,554
47,733,417
40,065,379
38,324,892
38,801,450
38,053,106
Business -type activities:
Other
Transfers
Total business -type activities
Total primary government
Change in Net Position
Governmental activities
Business -type activities
Prior Period Adjustment
Total primary government
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis
388,729
107,581
366,031
185,495
3,447,458
(123,518)
46,736
200,907
17,646
(152,768)
12,405
113,000
11,424
140,500
496,310
551,526
3,323,940
247,643
(135,122)
125,405
151,924
$ 42,952,859
$ 50,975,080
$ 51,057,357
$ 40,313,022
$ 38,189,770
$ 38,926,855 $
38,205,030
$ 18,797,654 $ 22,613,758 $ 17,569,640 $ 6,824,613 $
1,671,061 638,572 2,691,703 101,525
- - (1,722,939) (2,168,769)
$ 20,468,715 $ 23,252,330 $ 18,538,404 $ 4,757,370 $
13,263,321 $ 5,775,342 $ 5,853,224
(122,415) (7,119) 805,174
13,140,907 $ 5,768,223 $ 6,658,398
103
City of Federal Way 2012 CAFR
Statistical Section
GOVERNMENT -WIDE REVENUES BY SOURCE AND EXPENDITURES BY FUNCTION
Last Seven
Fiscal Years
2006
2007
2008
2009
2010
2011
2012
Program Revenues
Charges for Services
$ 4,130,179
$14,580,241
$14,397,294
$14,363,151
15,063,736
14,507,828
15,782,934
Operating Grants and Contributions
2,625,404
246,305
1,538,476
2,172,168
9,718,920
4,863,641
5,943,345
Capital Grants and Contributions
5,973,071
11,457,030
8,933,154
8,452,149
9,044,477
9,716,551
5,225,265
General revenues
Sales tax
12,409,719
13,048,624
12,144,276
10,583,298
10,708,951
10,858,381
10,534,147
Local Criminal Justice Sales Tax
1,953,822
2,145,383
2,051,524
1,743,893
1,701,120
1,795,971
1,864,991
Utility tax
9,043,449
12,796,461
13,469,136
13,549,472
12,890,310
13,068,510
13,083,179
Property tax
8,892,558
9,059,734
9,397,456
9,653,537
9,609,740
9,867,614
10,052,109
Real estate excise tax
5,499,911
4,898,537
2,590,310
1,428,985
1,403,361
1,560,395
1,507,313
Gambling Tax
1,363,468
1,489,952
1,259,783
1,127,203
493,486
511,005
114,443
Hotel/Motel Tax
175,219
191,691
188,833
154,148
149,058
185,289
193,344
Leasehold tax
4,592
7,254
5,712
4,999
5,757
6,259
5,820
Other revenue
1,299,548
4,194,183
875,389
1,421,791
1,063,825
960,012
702,833
Unrestricted Grants & Contribution
-
-
7,448,783
284,350
-
-
-
Investment Earnings
3,194,690
3,223,005
1,678,292
385,976
179,373
113,419
146,850
Disposition of capital assets
(884,117)
(79,744)
(52,137)
(24,630)
(15,211)
-
-
Total Revenues
55,681,513
77,258,656
75,926,281
65,300,490
72,016,903
68,014,875
65,156,573
Expenses/Expenditures
General Government
4,364,710
4,506,800
5,606,797
4,566,457
4,865,827
4,448,449
4,300,691
Security of Persons & Property
19,906,722
23,107,683
24,745,284
26,341,614
26,842,240
27,222,584
27,604,936
Transportation
5,628,100
9,986,067
7,891,298
9,448,397
9,781,800
13,539,598
9,946,776
Physical Environment
313,388
336,588
370,718
450,914
451,470
424,466
415,935
Economic Environment
3,162,089
3,319,955
3,382,572
3,560,620
3,175,005
2,782,435
2,645,478
Health
622,761
684,984
705,976
776,954
767,108
690,643
754,727
Culture & Recreation
5,172,663
6,506,137
6,955,442
8,089,242
8,073,804
8,105,578
8,081,401
Interest on long-term debt
1,420,691
1,122,358
901,161
811,124
685,214
614,571
602,572
Surface Water Management
3,142,613
3,455,166
4,060,440
3,345,027
3,384,352
3,527,590
3,272,514
Dumas Bay Centre
925,825
980,588
1,045,250
984,103
849,176
890,738
873,144
Total Expenses/Expenditures
$ 44,659,562
$ 54,006,326
$ 55,664,938
$ 58,374,452
$ 58,875,996 $
62,246,652
$ 58,498,175
Source: City of Federal Way Finance
104
City of Federal Way 2012 CAFR
Statistical Section
General fund
Reserved
Unreserved
Nonspendable
Restricted
Committed
Unassigned
Total general fund
All Other Governmental Funds
Reserved
Unreserved, reported in:
Special revenue funds
Capital projects funds
Debt service funds
Restricted
Committed
Assigned
Total all other governmental funds
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Seven Fiscal Years
2006 2007 2008 2009 2010 2011 2012
278,778 125,184 418,207 106,728
6,492,057 7,783,868 5,511,440 8,138,468 -
-
-
- - - - 81,146
104,012
69,398
168,398
145,524
60,585
-
21,893
21,893
- - - - 8,188,575
12,372,719
14,783,219
6,770,835 7,909,052 5,929,647 8,245,196 8,438,119
12,644,148
14,935,095
194,463 2,323,184 1,763,667 4,770,399
2,772,153 4,392,623 7,505,799 4,311,238
31,863,330 30,054,670 26,252,192 22,934,356
6,217,346 - - - - - -
- 17,776,967 19,325,489 18,079,168
18,611,612 11,642,248 15,813,105
- 100,000 - -
$ 41,047,292 $ 36,770,477 $ 35,521,658 $ 32,015,993 $ 36,488,580 $ 30,967,736 $ 33,892,273
Source: City of Federal Way Finance
Note: Fund Balance reclassification implementation of GASB 54 for year's 2010 and forward
105
City of Federal Way 2012 CAFR
Statistical Section
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Seven Fiscal Years
Revenues
Taxes
Licenses, fees and permits
Intergovernmental
Charges for services
Development Fees
Fines and Forfeitures
Investment earnings
Otherrevenues
Total revenues
Expenditures
General government
Security of persons and property
Transportation
Physical Environment
Economic Environment
Health
Culture and Recreation
Debt Service
Principal
Interest/fiscal charges/admin fee
Capital Outlay
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources (Uses)
GO bond proceeds
Sale of capital assets
Transfers in
Transfers out
2006 2007 2008 2009 2010 2011 2012
$39,334,751 $43,584,824 $41,071,781 $38,192,852 $37,122,069 $ 37,831,045 $ 37,450,059
2,089,844
2,939,328
2,195,068
2,163,984
2,547,655
2,209,873
2,501,368
8,047,243
15,494,887
10,520,570
11,127,718
18,648,749
11,713,248
7,631,014
6,355,262
6,327,552
6,246,207
5,573,647
5,486,632
6,131,287
5,686,962
196,060
-
-
-
-
-
-
805,598
1,005,293
1,433,628
2,200,092
2,783,214
2,146,524
3,371,878
2,447,996
2,463,670
1,274,955
271,600
139,698
89,338
122,483
717,922
630,966
875,389
1,599,207
899,092
960,012
702,830
59,994,676
72,446,520
63,617,598
61,129,100
67,627,109
61,081,327
57,466,594
3,944,288
4,364,750
5,197,032
4,518,821
4,857,177
4,234,327
4,402,129
19,909,858
24,183,913
25,470,722
27,051,814
26,892,207
28,332,237
26,562,270
5,373,983
6,631,030
6,634,548
6,165,540
5,700,274
7,427,408
6,039,183
313,388
336,588
370,718
448,873
450,971
427,315
409,042
3,055,426
3,326,986
3,344,987
3,504,767
3,161,820
2,782,537
2,645,215
613,800
677,536
700,876
772,151
765,963
690,824
754,311
4,108,813
5,300,455
5,871,288
5,845,676
5,857,621
5,821,160
5,877,370
2,197,357
9,953,505
440,900
4,558,750
494,250
457,520
480,760
1,420,691
1,122,358
901,161
811,124
685,214
614,571
602,572
24,412,303
19,162,067
18,037,109
8,443,523
14,249,501
11,560,205
4,337,758
65,349,907
75,059,188
66,969,341
62,121,039
63,114,998
62,348,104
52,110,610
(5,355,231) (2,612,668) (3,351,743) (991,939) 4,512,111 (1,266,777) 5,355,984
4,100,000 - - - - - -
20,000 (23,786) - - - 9,162 -
13,231,785 22,688,136 16,232,916 25,619,678 22,473,128 21,453,223 16,228,281
(13,517,681) (23,190,280) (16,109,398) (25,817,857) (22,319,725) (21,510,423) (16,368,781)
Total other financing sources (uses) 3,834,104 (525,930) 123,518 (198,179) 153,403 (48,038) (140,500)
Net change in fund balances $ (1,521,127) $ (3,138,598) $ (3,228,225) $ (1,190,118) $ 4,665,514 $ (1,314,815) $ 5,215,484
Debt service as a percentage of
noncapital expenditures 9.7% 24.7% 2.8% 11.1% 2.4% 2.1% 2.5%
Source: City of Federal Way Finance
106
City of Federal Way 2012 CAFR
Statistical Section
SALES TAX REVENUE BY CATEGORY
Last Ten Fiscal Years
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Retail Trade
$ 6,747,812
$ 5,735,317
$ 5,889,728
$ 6,317,881
$ 6,856,216
$ 6,551,426
$ 5,767,340
$ 5,716,833
$ 5,566,978 $
5,739,670
Services
1,392,255
2,103,295
2,243,364
2,319,304
2,538,494
2,504,690
2,400,997
2,474,589
2,396,007
2,328,726
Construction/Contract
1,019,930
1,035,464
1,490,740
2,114,732
1,873,526
1,266,029
883,432
909,184
1,202,802
857,781
Wholesaling
505,109
538,663
516,208
499,626
544,846
605,736
390,660
421,989
431,751
426,322
Transportation/Utility *
443,279
15,725
13,446
17,014
7,914
22,867
4,147
3,257
3,453
8,007
Information *
-
598,078
594,013
531,407
502,959
567,599
521,336
590,649
514,634
521,833
Manufacturing
107,451
109,524
138,158
179,874
267,464
221,683
210,996
144,076
145,420
156,478
Government
42,815
49,877
55,702
40,888
68,356
55,633
107,750
171,918
258,026
120,701
Finance/Insurance/RealEstate 206,984
346,073
340,448
355,940
360,101
331,957
274,781
237,328
313,904
336,117
Other Services
81,898
14,202
23,730
33,053
28,762
16,656
21,866
39,129
25,413
38,512
Total $ 10,547,533
$ 10,546,218
$ 11,305,537
$ 12,409,719
$ 13,048,638
$ 12,144,276
$ 10,583,305
$ 10,708,952
$ 10,858,388 $
10,534,147
City direct sale tax rate 0.85%
Information category combined with Transportation/Utility in 2003.
Source: City of Federal Way Finance
107
City of Federal Way 2012 CAFR
Statistical Section
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY*
Last Ten Fiscal Years
Total City Percent
Fiscal Personal State Public Direct Increase
Year Real Property Property Service Property Total Tax Rate (Decrease)
2003
5,992,899,727
193,519,890
105,924,009
6,292,343,626
1.34
5.9%
2004
6,218,643,830
181,366,723
102,350,559
6,502,361,112
1.30
3.3%
2005
6,937,653,592
225,118,781
89,220,328
7,251,992,701
1.27
11.5%
2006
7,689,395,358
235,157,554
87,062,687
8,011,615,599
1.22
10.5%
2007
8,644,609,276
262,048,562
103,698,540
9,010,356,378
1.14
12.5%
2008
9,527,060,585
257,152,954
97,434,092
9,881,647,631
1.04
9.7%
2009
8,294,282,076
236,445,351
92,287,195
8,623,014,622
0.97
-12.7%
2010
7,948,924,766
228,247,721
91,163,299
8,268,335,786
1.13
-4.1%
2011
7,410,324,237
219,890,581
92,768,984
7,722,983,802
1.20
-10.4%
2012
6,832,615,312
213,389,519
96,827,145
7,142,831,976
1.30
-13.6%
* Real, personal, and state public service property has been assessed at 100% of the estimated value.
Source: King County Assessor's Office.
Note: These figures include all final tax adjustments, omits and senior citizen exempted property. The total assessed
value was reduced by senior citizen exemptions (no tax amounts) of $55,270,036 and prior year omits of
$259,000 yielding a regular levy value of $7,087,561,940. The assessed valuations are the basis for the
following year's tax levy.
108
City of Federal Way 2012 CAFR
Statistical Section
PROPERTY TAX RATES AND LEVIES, DIRECT AND OVERLAPPING GOVERNMENTS
For the Last Ten Fiscal Years
City
Direct
Rates*
Overlapping Rates
City of
Federal Way
Emergency
Fiscal
Federal
School
King
Washington
King County
Port of
County
Fire District
Medical
Year
Way
District #210
County
State
Flood Zone
Seattle
Ferry District
#39
Library
Services
Total
TAX RATES PER $1,000 OF ASSESSED
VALUATION
2003
1.34
4.28
1.35
2.90
0.05
0.26
1.50
0.54
0.24
12.46
2004
1.30
4.20
1.43
2.76
0.05
0.25
1.50
0.53
0.24
12.26
2005
1.27
4.30
1.38
2.69
0.05
0.25
1.50
0.53
0.23
12.21
2006
1.22
4.26
1.33
2.50
0.04
0.23
1.50
0.53
0.22
11.84
2007
1.14
4.19
1.29
2.33
0.04
0.23
-
1.50
0.50
0.21
11.42
2008
1.04
4.15
1.21
2.13
0.10
0.22
0.055
1.50
0.45
0.30
11.16
2009
0.97
4.20
1.10
1.96
0.09
0.20
0.052
1.50
0.42
0.27
10.76
2010
1.13
5.11
1.28
2.22
0.11
0.22
0.003
1.50
0.49
0.30
12.36
2011
1.20
5.36
1.34
2.28
0.11
0.22
0.004
1.39
0.57
0.30
12.77
2012
1.30
5.77
1.42
2.42
0.12
0.23
0.004
1.50
0.57
0.30
13.63
DETAIL OF TAX RATES FOR
2012
Basic Rate
1.30
-
1.34
2.42
0.12
0.23
0.004
1.50
0.50
-
7.42
Voted Rate
-
5.77
0.07
-
-
-
-
-
0.07
0.30
6.21
TAX LEVIES
2003
7,941,900
36,639,878
302,100,182
648,995,138
849,988
58,003,521
11,774,814
72,580,170
54,088,854
1,192,974,445
2004
8,117,874
38,051,680
335,853,716
647,490,235
873,826
59,657,092
12,467,237
74,860,405
55,704,127
1,233,076,192
2005
8,248,919
40,744,820
342,395,871
666,827,056
901,356
62,779,505
13,062,586
78,374,467
57,476,670
1,270,811,250
2006
8,800,989
43,672,564
357,240,140
672,185,668
922,666
62,785,749
14,108,124
85,715,008
59,154,623
1,304,585,531
2007
9,098,370
47,315,366
383,039,569
691,250,598
956,482
68,841,070
19,882,637
88,486,309
61,300,276
1,370,170,677
2008
9,300,030
52,730,549
409,763,053
723,908,902
33,945,830
75,908,664
18,670,739
22,288,360
91,371,026
101,861,635
1,539,748,788
2009
9,551,027
58,588,636
422,757,529
756,272,108
35,151,944
75,911,308
19,335,328
23,715,724
95,398,383
105,611,047
1,602,293,034
2010
9,690,241
61,404,973
437,163,660
756,411,197
35,783,324
73,504,599
1,185,576
20,409,747
97,015,693
102,103,088
1,594,672,098
2011
9,827,398
61,622,347
439,635,095
749,341,420
36,076,405
73,512,887
1,184,924
18,234,001
115,495,462
98,604,471
1,603,534,410
2012
9,967,650
61,493,504
449,642,988
769,672,818
36,904,878
73,014,552
1,182,466
18,291,481
112,332,714
95,287,781
1,627,790,832
Source: King County Assessor's Office and King County Department of Finance.
*The City of Federal Way's Direct Rate has only one component which is the expense levy. King County certified tax levy at beginning of year
109
City of Federal Way 2012 CAFR
Statistical Section
PRINCIPAL TAXPAYERS
Current Year and Ten Years Ago
Taxpayer
Type of Business
Weyerhaeuser
Lumber Products
Puget Sound Energy-Elec/Gas
Electric/Gas
Steadfast Commons LLC
Real Estate Management
Harsch Investment Properties
Real Estate Management
LBA Realty
Real Estate Management
Qwest Corporation hic.
Communications/Telephone
Forest Cove LLC
Real Estate Management
KNL Vision WA LLC (formerly BRE Properties)
Real Estate Management
Fred Meyer
Retailer
Costco
Retailer / Wholesaler
Virginia Mason
Medical Services
IA Orchard Hotels Federal Way (formerly Apple
Hospitality
Hospitality Five Inc.)
Campus Business Parks LLC
Real Estate hivest/Holding
ANS LLC
Retailer
Source: King County Assessor's Office and King County Department of Finance.
(A) 2003 assessed valuation for the City of Federal Way was $6,262,874,389
2012
2003
% of Total
% of Total
Assessed
Assessed
Assessed
Assessed
Valuation
Rank
Valuation
Valuation
Rank
Valuation (A)
$ 113,070,028
1
1.60%
$ 157,395,612
1
2.51%
58,272,997
2
0.82%
51,359,264
2
0.82%
53,877,400
3
0.76%
38,434,837
4
0.61%
50,936,000
4
0.72%
33,723,200
5
0.54%
32,470,300
5
0.46%
-
_
27,311,903
6
0.39%
43,115,769
3
0.69%
25,876,000
7
0.37%
-
_
24,285,000
8
0.34%
17,454,000
10
0.28%
21,087,400
9
0.30%
20,608,672
7
0.33%
18,788,019
10
0.27%
16,422,949
11
0.26%
17,306,840
11
0.24%
16,403,198
0.26%
12
15,029,200
12
0.21%
-
12,027,400
13
0.17%
11,735,600
13
0.19%
11,899,300
14
0.17%
-
$ 482,237,787
6.80%
$ 406,653,101
6.49%
110
City of Federal Way 2012 CAFR
Statistical Section
PROPERTY TAX LEVIES AND COLLECTIONS
For the Last Ten Fiscal Years
Collected within the
Total
Ratio of
Taxes Levied Fiscal Year of the Levy Collections
Total Collections to Date Outstanding
Delinquent
Fiscal for the Current Tax Percentage in Subsequent
Total Tax Percentage Delinquent
Taxes to
Year Fiscal Year Amount of Levy Years
Amount of Levy Taxes
Total Tax Levy
2003
7,912,598
7,740,741
97.8%
171,565
7,912,306
100.0%
292
0.0%
2004
8,119,460
7,945,659
97.9%
173,435
8,119,094
100.0%
366
0.0%
2005
8,248,919
8,082,340
98.0%
162,202
8,244,542
99.9%
4,377
0.1%
2006
8,933,515
8,584,565
96.1%
347,410
8,931,975
100.0%
1,540
0.0%
2007
9,068,740
8,868,895
97.8%
196,962
9,065,857
100.0%
2,883
0.0%
2008
9,265,234
9,037,601
97.5%
185,130
9,222,731
99.5%
42,502
0.5%
2009
9,511,404
9,277,004
97.5%
172,687
9,449,691
99.4%
61,713
0.6%
2010
9,680,047
9,433,214
97.5%
139,340
9,572,554
98.9%
107,493
1.1%
2011
9,755,022
9,506,527
97.5%
186,036
9,692,563
99.4%
62,459
0.6%
2012
9,919,406
9,739,696
98.2%
(0)
9,739,696
98.2%
179,710
1.8%
Source: Most of data has been derived from the "Annual Tax Receivable Summary" prepared by the King County Finance.
Note: These figures include tax adjustments such as omits, refunds, appeals, and senior citizen exempted property.
Taxes levied for Fiscal Year includes adjustments versus taxes levied at beginning of year.
111
City of Federal Way 2012 CAFR
Statistical Section
RATIO OF OUTSTANDING DEBT BY TYPE
For the Last Ten Fiscal Years
Governmental Activities
Fiscal General Obligation Certificates of
Year
Bonds Participation
2003
34,710,026 20,490
2004
30,802,892 -
2005
27,701,761 -
2006
29,581,454 -
2007
19,605,000 -
2008
19,13 8,000 -
2009
29,212,950 -
2010
28,683,950 -
2011
28,157,950 -
2012
27,616,950 -
Business Type Activities
Public Works
Trust Fund Loan
2,486,548
2,304,189
2,121,830
1,939,471
1,757,112
1,574,753
1,392,394
1,210,035
1,027,676
845,317
Percentage
Total Primary
of Personal
Government
Income (b)
Per Capita (b)
37,217,064
0.060%
446
33,107,081
0.068%
386
29,823,591
0.075%
348
31,520,925
0.071%
364
21,362,112
0.122%
244
20,712,753
0.134%
235
30,605,344
0.090%
346
29,893,985
0.091%
337
29,185,626
0.091%
327
28,462,267
0.093%
318
Source: City of Federal Way Finance Division
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
See Demographic Statistics schedule for personal income and population data. These ratios are calculated using
personal income for the prior calendar year.
(b) Per capita income information for the years 2002 to 2007 are based on 2000 U.S. Census report since this
information is available for individual cities only every ten years when the census is done. 2008-2011
info for Federal Way is based on US Census Bureau, 2005-2009 American Community Survey five-year Estimates.
2012 info for Federal Way is based on 2007-2011 American Community Survey five-year Estimates.
112
City of Federal Way 2012 CAFR
Statistical Section
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE
AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
For the Last Ten Fiscal Years
Ratio of Net
(B) (C) Bonded Debt Net Bonded
Fiscal (A) Assessed Gross Less Debt Net To Assessed Debt Per
Year Population Value Bonded Debt Service Fund Bonded Debt Value Capita
2003
83,500
6,292,343,626
27,616,950
2,599,653
25,017,297
0.0040
299.61
2004
83,590
6,418,941,601
33,113,539
2,880,857
30,232,682
0.0047
361.68
2005
85,800
7,251,992,701
29,823,591
2,886,785
26,936,806
0.0037
313.95
2006
86,530
8,011,615,599
31,520,925
6,001,415
25,519,510
0.0032
294.92
2007
87,390
9,010,356,378
21,362,112
2,147,282
19,214,830
0.0021
219.87
2008
88,040
9,825,319,904
20,712,753
1,882,041
18,830,712
0.0019
213.89
2009
88,578
8,563,964,852
30,605,344
4,225,463
26,379,881
0.0031
297.82
2010
88,760
8,206,354,959
29,893,985
3,379,427
26,514,558
0.0032
298.72
2011
89,370
7,659,569,844
29,893,985
3,866,184
26,027,801
0.0034
291.24
2012
89,460
7,142,831,976
28,462,267
4,182,345
24,279,922
0.0034
271.41
(A) Sources: U.S. Census Bureau; State of Washington Office of Program Planning and Fiscal Management.
(B) The final certified Regular Levy assessed value of taxable property which was used by the King County
Assessor's Office for use in calculating levy rates for the following year's tax roll. The total
assessed valuation of $7,142,831,976 has been reduced by senior citizen exemptions of $73,498,579
and prior year omits of $259,009 to arrive at taxable assessed valuation.
(C) Includes Public Works Trust Fund Loans issued in 1994, 1996, 1997, and 2000;
general obligation bonds issued in 2000, 2003 and 2009.
113
City of Federal Way 2012 CAFR
Statistical Section
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2012
Jurisdiction
King County
Port of Seattle
Federal Way School District #210
Library
Total Overlapping Debt
CITY OF FEDERAL WAY
(A)
(B)
Gross General
Percentage
Amount
Obligation Debt
Applicable to
Applicable to
Outstanding
Federal Way
Federal Way
$ 894,303,000
3.34%
$ 29,885,237
312,005,000
3.34%
10,426,381
137,405,000
70.88%
97,395,446
188,445,000
3.65%
6,880,989
1,532,158,000
144,588,053
27,616,950
(Q 100.00%
27,616,950
Total Direct and Overlapping Debt $ 1,559,774,950
$ 172,205,003
(A) Total general obligation bonds outstanding at the year end, exclusive of refunded bonds.
Source is King County Department of Finance.
(B) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to
valuation of property subject to taxation in reporting unit.
(C) Includes general obligation bonds issued in 2000, 2003 and 2009.
Source is City of Federal Way Finance
114
City of Federal Way 2012 CAFR
Statistical Section
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2012
General Debt Capacity
Excess Levy
Excess Levy
(Limited) (Unlimited)
Open Space
Utility Total Debt
DESCRIPTION
Councilmanic Excess Levy
and Park
Purposes Capacity
Statutory debt limit:
(2012 AV47,142,831,976) (A)
1.50%AV @ 100%
$ 107,142,480 $ (107,142,480)
$ -
$ - $ -
2.50% AV @ 100%
- 178,570,799
178,570,799
178,570,799 535,712,398
Add: Cash on hand for
debt redemption (B) 2,004,488 - - - 2,004,488
Less: Bonds and COPS outstanding (27,616,950) - - - (27,616,950)
Remaining Debt Capacity $ 81,530,018 $ 71,428,320 $ 178,570,799 $ 178,570,799 $ 510,099,936
Total Remaining
"General" Capacity $152,958,337
(A) This figure represents the City's final total taxable assessed valuation (AV) for 2012 which was used to determine
the 2013 property tax levy.
(B) Reflects ending fund balance in the Debt Service Fund and Utility Tax Fund as of December 31, 2012.
(C) Combined total for Councilmanic, Financing Lease, and Excess Levy capacities.
Total net debt
Total net debt
applicable to
applicable
Legal debt
the limit as a
Fiscal Year
Debt limit
to limit
margin
% of debt limit
2003
469,715,580
(31,327,803)
438,387,777
6.67%
2004
471,925,773
(26,881,086)
445,044,687
5.70%
2005
487,677,084
(23,478,555)
464,198,529
4.81%
2006
543,899,454
(21,459,145)
522,440,309
4.32%
2007
600,871,170
(12,012,597)
588,858,573
3.91%
2008
736,889,175
(11,615,105)
725,274,070
1.58%
2009
741,123,572
(22,913,431)
718,210,141
3.09%
2010
615,476,622
(22,291,874)
593,184,748
3.62%
2011
579,223,785
(20,964,944)
558,258,841
3.62%
2012
535,712,398
(25,612,462)
510,099,936
4.78%
Source: City of Federal Way Finance
(A) King County Department of Finance
Note: Under state finance law, the city's outstanding general obligation debt should not exceed 15 percent of total assessor's
property value.
By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general
obligation bonds.
115
City of Federal Way 2012 CAFR Statistical Section
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION
BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES NET OF DEBT SERVICE EXPENSE
Ratio of
Debt Service
Total General
to General
Fiscal
Total Debt
Governmental
Governmental
Year
Principal
Interest *
Service
Expenditures
Expenditures
2003
14,159,881
1,703,165
15,863,046
50,550,741
31.4%
2004
3,080,677
1,796,791
4,877,468
40,610,863
12.0%
2005
3,100,546
1,531,364
4,631,910
40,108,790
11.5%
2006
2,219,676
1,418,843
3,638,519
41,086,555
8.9%
2007
9,976,455
1,153,300
11,129,755
56,186,140
19.8%
2008
467,000
841,542
1,308,542
51,278,215
2.6%
2009
4,585,000
824,693
5,409,693
54,585,436
9.9%
2010
525,000
629,419
1,154,419
50,093,838
2.3%
2011
526,000
622,903
1,148,903
49,482,421
2.3%
2012
480,760
1,114,827
1,595,587
47,879,445
3.3%
Source: City of Federal Way Finance
Note: * Interest excludes bond issuance and debt registration costs.
116
City of Federal Way 2012 CAFR
DEMOGRAPHIC STATISTICS
Statistical Section
Education
Personal Level in Years
Fiscal Income Per Capita Median of Formal School Unemployment
Year Population Sea-Tac-Bel [D] Income [C] Age [C] Schooling Enrollment (A) Rate (B)
2003
83,500
121,624,885,000
22,451
32.5
13.0
22,265
7.4%
2004
83,590
133,156,997,000
22,451
32.5
13.0
22,395
6.2%
2005
85,800
136,859,162,000
22,451
32.5
13.0
22,383
5.0%
2006
86,530
149,858,462,000
22,451
32.5
13.0
22,184
4.5%
2007
87,390
162,934,794,000
26,137
37.2
13.0
21,775
4.1%
2008
88,040
169,798,086,000
27,730
37.0
13.0
21,622
5.1%
2009
88,578
171,680,771,000
27,638
36.6
13.0
21,700
8.9%
2010
88,760
176,084,963,000
27,307
35.1
13.0
21,630
9.7%
2011
89,370
178,306,642,000
26,668
35.2
13.0
21,608
8.9%
2012
89,460
N/A
26,514
34.9
13.0
20,665
8.1%
(A) Includes public school enrollment. Kindergarten is included though not State mandated.
(B) Unemployment rates came from the US Department of Labor, Bureau of Labor Statistics.
(C) Per capita income and Median age information for the years 2002 to 2006 are based on 2000 U.S.
Census report since this information is available for individual cities only every ten years when the census is done.
2007 info for Federal Way is based on 2006 US Census American Community Survey.
2008-2011 info for Federal Way is based on 2005-2010 American Community Survey five-year Estimates.
2012 info for Federal Way is based on 2007-2011 American Community Survey five-year Estimates.
(D) Personal income information is for Seattle -Tacoma -Bellevue area provided by the Bureau of Economic Analysis, information
for 2012 not available. 2012 data for Personal Income to be published fall of 2013.
Sources: Data was obtained from U. S. Census Bureau
US Department of Labor, Bureau of Labor Statistics
US Department of Commerce, Bureau of Economic Analysis
School data was provided by the Federal Way School District.
117
City of Federal Way 2012 CAFR Statistical Section
PRINCIPAL EMPLOYERS
Current Year and Ten Years Ago
2012
2003
Number of
% of Total City
Number of
% of Total City
Taxpayer
Type of Business
Employees
Rank
Employment
Employees
Rank
Employment
Federal Way Public Schools
Educational Services
2,584
1
7.89%
3,025
2
10.22%
Xerox Commerical Services
Business Services
1,210
2
3.70%
-
-
Weyerhaeuser Company
Lumber Products
1,158
3
3.54%
3,283
1
11.09%
St Francis Hospital
Medical Services
875
4
2.67%
744
3
2.51%
World Vision Inc
Christian Relief Agency -Nonprofit
852
5
2.60%
663
5
2.24%
Us Postal Service - Bulk Mail
Postal Service
616
6
1.88%
662
6
2.24%
City Of Federal Way
Government Services
476
7
1.45%
440
7
1.49%
Wal-Mart Supercenter #3794
Retail
386
8
1.18%
-
-
0.00%
Virginia Mason Federal Way
Medical Services
235
9
0.72%
235
12
0.79%
Telecom Labs Inc
Communications
225
10
0.69%
-
0.00%
Fred Meyer
Retail
220
11
0.67%
214
15
0.72%
Costco Wholesale Corporation
Wholesale
214
12
0.65%
255
8
0.86%
Wal-Mart Store #2571
Retail
183
13
0.56%
225
13
0.76%
Target Store #1947
Retail
178
14
0.54%
130
29
0.44%
Garden Terrace Alzheimer's Center
Health Services
163
15
0.50%
50
38
0.17%
Source: City of Federal Way Business License
Note: Principal Employers - includes both full-time and part-time employees.
118
City of Federal Way 2012 CAFR
Statistical Section
PROPERTY VALUE AND CONSTRUCTION
Commercial Construction (A)
Residential Construction (A)
Multi -Family
Construction (A)
Value
Value
Value
Year
Permits
(In Thousands)
Permits
(In Thousands)
Permits
(In Thousands)
2003
240
25,695
290
37,775
1
1,042
2004
335
64,522
289
82,658
0
-
2005
289
124,985
591
111,504
0
-
2006
332
78,194
455
70,862
1
2,027
2007
370
59,666
388
55,321
33
11,487
2008
256
45,810
258
17,554
91
26,025
2009
132
45,343
275
13,057
76
20,802
2010
149
31,043
321
19,676
75
2,686
2011
134
12,724
301
19,455
47
847
2012
160
27,989
346
29,115
92
974
Sources & Notes:
(A) Federal Way Community Economic Development Department. Commercial construction includes alterations.
Other building -related permits (plumbing, mechanical, fire alarm, etc.) numbering 2,960
and valued at $5,405,873 have been excluded.
119
City of Federal Way 2012 CAFR Statistical Section
CAPITAL ASSETS BY FUNCTION
Last Ten Fiscal Years
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Transportation
Street (Center Line Miles)
224.48
224.48
224.48
230.84
233.84
233.84
234.72
234.72
242.90
248.23
248.23
Signals WSDOT-owned and maintained
4
4
4
4
5
5
5
5
5
5
6
Signals City -owned & County -maintained
67
70
71
71
74
74
76
76
76
76
77
Street lights City -owned and maintained
810
1,038
1,050
1,050
1,214
1,214
1,463
1,467
1,509
1,554
1,618
Street lights City -owned and PSE-maintair
-
644
644
644
644
644
644
644
644
644
644
Street lights PSE-owned and maintained
2,850
1,975
1,975
1,975
1,975
1,975
1,975
1,975
1,975
1,975
1,975
Culture & Recreation
Developed Parks - Acreage
493.5
500.25
500.25
522.9
522.9
524.49
524.49
524.49
524.49
524.49
579.86
Developed Parks - # of Parks
28
31
32
32
32
32
32
32
32
32
29
Undeveloped Parks - Acreage
352
356.24
356.24
543.5
543.5
543.46
551.12
551.12
551.12
551.12
539.43
Undeveloped Parks - # of Parks
20
21
21
21
21
21
22
22
22
22
22
Tennis Courts City -Owned
9
9
9
11
11
11
11
11
11
11
9
Tennis Courts - Public
10
10
16
22
22
22
22
22
22
22
25
Swimming Pools City -Owned
0
1
1
1
1
1
1
1
1
1
2
Swimming Pools County -Owned
2
1
1
1
1
1
1
1
1
1
3
Trails - Miles
4
4
4
6
6
6
6
6
6
6
9
Trails -# of Trails
2
2
2
2
2
2
3
3
3
3
6
Community Centers/Recreation Facilities
2
2
2
2
2
2
1
1
1
1
1
Source: City of Federal Way Public Works and Parks Department
120
City of Federal Way 2012 CAFR
Statistical Section
SECURITY OF PERSONS & PROPERTI
Police Information
Offenses:
Forcible Rape (including attempts)
Robbery
Criminal Homicide
Aggravated Assault
Vehicle Theft
Burglary (commercial & residential)
Larceny
Arson
Citations:
Traffic 1
Red Light Photo
ECONOMIC ENVIRONMENT
Building Related Permits & Values
Building Permits
Estimated Value (In Millions $)
Other Building Related Permits
Estimated Value (In Millions $)
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
50
50
55
64
48
30
51
50
38
48
125
121
153
146
129
170
198
152
119
107
2
-
7
1
3
10
5
5
4
3
120
109
101
120
107
115
115
118
99
150
1,204
1,118
1,573
1,199
939
816
561
741
694
800
672
759
800
753
739
800
741
828
752
931
3,145
3,257
3,786
3,230
3,159
2,933
3,231
3,141
3,067
3,409
14
23
25
26
18
13
13
11
11
9
8,411
13,219
11,402
11,931
14,043
19,339
20,678
18,094
17,226
13,023
-
-
-
-
-
3,813
13,002
25,691
15,340
13,455
531 624 880 788 791 605 483 545 482 598
$64.5 147.2 $236.5 $151.1 $126.5 $89.4 $79.2 $53.4 $33.0 $58.1
1779 1958 2705 2550 2690 2370 2209 2423 2385 2960
$ 2.4 $ 2.5 $ 3.9 $ 4.2 $ 5.5 $ 7.0 $ 5.6 $ 5.9 $ 6.2 $ 5.4
Source: City of Federal Way Police Department and Community Development Department
Note: 2009 Police Information has been updated from 2009 report due to new/further information.
121
City of Federal Way 2012 CAFR
CITY GOVERNMENT EMPLOYEES FULL-TIME EQUIVALENT - HISTORY
Statistical Section
Department
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Mayor's Office
6.00
6.00
6.00
6.00
10.00
9.75
7.63
7.63
5.00
3.00
Administration
5.00
5.00
5.00
5.00
5.50
5.25
3.13
3.13
4.00
3.00
Economic Development
1.00
1.00
1.00
1.00
1.50
1.50
1.50
1.50
-
-
Government Affairs
-
-
-
-
3.00
3.00
3.00
3.00
-
Human Services
-
-
-
-
-
-
-
-
1.00
-
City Council
3.50
3.50
3.50
3.50
3.50
3.50
3.50
4.50
4.50
3.85
Municipal Court
13.55
12.55
12.55
12.55
14.00
14.00
13.00
13.00
13.00
13.00
Human Resources
6.50
6.50
5.00
5.00
5.00
5.25
5.25
5.25
4.50
4.50
City Clerk
2.00
2.00
1.50
1.50
1.50
1.75
1.75
1.75
1.75
1.75
Human Resources
4.50
4.50
3.50
3.50
3.50
3.50
3.50
3.50
2.75
2.75
Finance
9.50
9.50
8.50
8.50
9.50
8.00
7.60
7.60
7.00
7.00
Administration
1.50
1.50
1.50
1.50
1.50
-
-
-
-
-
Finance
8.00
8.00
7.00
7.00
8.00
8.00
7.60
7.60
7.00
7.00
Information System
9.00
9.00
8.50
8.50
10.60
10.60
10.00
9.60
7.00
7.00
Law
10.38
10.60
10.60
10.60
13.00
13.00
12.00
12.00
11.00
11.00
Civil Legal Services
5.80
5.80
5.80
5.80
5.80
5.80
4.80
4.80
4.80
4.80
Criminal Prosecution Services
4.58
4.80
4.80
4.80
7.20
7.20
7.20
7.20
6.20
6.20
Community & Econ Developmei
29.60
29.60
28.70
28.70
30.49
32.00
30.00
28.90
19.00
21.65
Administration
4.50
4.50
4.50
4.50
4.50
4.50
5.00
5.00
3.50
3.50
Planning
8.80
8.80
8.80
8.80
8.75
8.75
8.00
7.00
6.00
6.00
Building
12.30
12.30
12.30
12.30
13.25
14.25
13.00
13.00
9.00
9.00
Human Services
3.00
3.00
2.50
2.50
3.00
3.50
3.00
3.00
-
2.65
Neighborhood Development
1.00
1.00
0.70
0.70
1.00
1.00
1.00
0.90
-
-
Economic Development
-
-
-
-
-
-
-
-
0.50
0.50
Police
155.00
155.00
152.00
155.00
169.00
169.00
164.00
161.00
135.00
132.00
Administration
2.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
Support Services
55.00
54.00
53.00
55.00
61.00
61.00
61.00
58.00
51.00
52.00
Field Operations
98.00
98.00
96.00
97.00
105.00
105.00
100.00
100.00
81.00
77.00
Parks, Rec. & Cultural Svcs.
30.40
30.40
30.20
31.20
44.25
44.25
39.75
39.75
36.45
36.45
Administration
1.80
1.80
1.80
1.80
1.80
2.80
1.35
1.35
1.35
1.35
Planning
1.00
1.00
1.00
1.00
1.00
-
-
-
-
-
Kenneth Jones Pool
3.00
3.00
3.00
3.00
-
-
-
-
-
-
General Recreation
6.60
6.60
6.60
6.60
7.10
7.10
4.80
4.80
5.50
5.50
Community Center
-
-
-
-
12.35
12.35
13.35
13.35
13.35
13.35
Dumas Bay Centre
2.00
2.00
2.00
3.00
3.00
2.75
2.75
2.75
2.75
2.75
Knutzen Family Theatre
1.50
1.50
1.50
1.50
1.50
1.75
-
-
-
-
Parks Maintenance
14.00
14.00
13.80
13.80
17.00
17.00
17.00
17.00
13.00
13.00
Building
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
Public Works
41.50
41.60
41.60
42.60
44.00
44.00
42.95
41.95
38.95
38.95
Administration
2.10
2.10
2.10
1.90
1.85
1.85
2.35
2.35
2.25
2.20
Development Services
6.45
5.80
5.80
6.50
6.45
6.45
4.45
4.45
4.20
4.20
Traffic Services
5.10
5.10
5.10
5.10
6.10
6.10
6.10
5.10
2.35
2.35
Street Services
11.00
11.70
11.70
11.00
11.50
11.00
10.50
10.50
10.60
10.60
Emergency Management
-
-
-
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Solid Waste & Recycling
1.60
1.60
1.60
1.70
1.70
1.70
1.70
1.70
1.70
1.70
Surface Water Management
15.25
15.30
15.30
15.40
15.40
15.40
16.35
16.35
16.35
16.40
Fleet & Equipment
-
-
-
-
-
0.50
0.50
0.50
0.50
0.50
Total
314.93
314.25
307.15
312.15
353.34
353.35
335.68
331.18
281.40
278.40
Source: City of Federal Way Finance Division
122
City of Federal Way 2012 CAFR
Statistical Section
MAYOR
DEPUTY MAYOR
COUNCIL MEMBERS
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
DECEMBER 31, 2012
POSITION
POSITION
FINANCE DIRECTOR
CITY ATTORNEY
CITY CLERK
COMMUNITY & ECONOMIC DEVELOPMENT DIRECTOR
PARKS AND PUBLIC WORKS DIRECTOR
POLICE CHIEF
Source: City of Federal Way Finance Division
LEGISLATIVE BODY
EMPLOYEE ANNUAL SALARY
SKIP PRIEST
$112,800
JIM FERRELL
$13,800
LINDA KOCHMAR
$13,800
SUSAN HONDA
$13,800
JEANNE BURBIDGE
$13,800
BOB CELSKI
$13,800
ROGER FREEMAN
$13,800
DINI DUCLOS
$13,800
ADMINISTRATIVE STAFF
EMPLOYEE ANNUAL SALARY
THO KRAUS
$121,848
PAT RICHARDSON
$132,684
CAROL MCNEILLY
$82,140
PATRICK DOHERTY
$115,680
CARY M. ROE
$137,436
BRIAN J. WILSON
$135,384
NOTE: In accordance with State of Washington legal statues, individual fidelity coverage of not less than $100,000 exists for the
Mayor, City Attorney, Community & Economic Development Director, Finance Director, Parks and Public Works Director, and
Police Chief.
123
City of Federal Way 2012 CAFR
Statistical Section
MISCELLANEOUS STATISTICAL INFORMATION
LOCAL TAXES ON BUSINESSES
Franchise Tax - Cable TV .............................
5.00%
Gambling Taxes:
Bingo/Raffles....................................
5.00%
Amusement/Games .............................
2.00%
Punchboard/Pull Tabs ..........................
3.00%
Cardrooms........................................
10.00%
Local Sales Tax (Collected by the State) .............
9.50%
FIRE AND EMERGENCY MEDICAL RESPONSE INFORMATION
Fire and Emergency Medical Response information
reflects the greater Federal Way area, which is served by South King Fire & Rescue.
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Fire and Other Responses
3,117
2,896
3,210
865
639
1,083
1,147
1,041
934
1,363
Emergency Medical
8,042
8,263
8,636
11,164
11,350
12,058
11,077
11,460
11,914
12,571
PUBLIC
EDUCATION
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
23
Elementary Schools
9,854
9,916
9,806
9,733
9,612
9,594
9,594
9,560
9,673
9,229
9
Middle Schools (incl. Public Academy)
5,458
5,476
5,271
5,183
5,139
5,234
5,203
5,235
5,205
5,041
5
High Schools
6,625
6,650
7,004
6,954
6,720
6,531
6,637
6,547
6,409
6,018
1
Internet Academy (K-12)
328
353
302
314
304
263
266
288
321
377
22,265
22,395
22,383
22,184
21,775
21,622
21,700
21,630
21,608
20,665
2,584
Staff members
TAXABLE SALES (in millions)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Retail Sales
$1,237
$1,239
$1,331
$1,471
$1,540
$1,458
$1,257
$1,261
$1,277
$1,239
Real Estate Sales
$570
$616
$939
$988
$963
$536
$208
$238
$315
$303
124