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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 308'h Street and 320th Street, a small "downtown" developed with a general store, lumber yard, realty office, beauty
parlor, feed store, and gas station. By the end of the 1950s, the ten blocks between 308th and 320th Streets became the first
roadside commercial district. One of the more unique developments was Santa Faire, a family oriented theme park. New shopping
areas were added around the park, helping to create a "community focus" for the residents of the area.
As this commercial area developed, the rest of Federal Way was changing as well. The Boeing Company expanded their
operations in Renton and the Kent Valley and began advertising nationally for engineers. Those engineers in turn began roaming
the wooded acreage in Federal Way in search of housing. One of the earliest residential developments was Marine Hills, built in
1958 overlooking Puget Sound. Weyerhaeuser, one of the early timber companies, had large land holdings in the area and began
to develop their land into high quality housing with amenities like golf courses.
Weyerhaeuser's development company also began developing commercial property, creating the West Campus business park.
The plan was to integrate offices and businesses with lush landscaping. Though initially the corporate office market was not
strong, West Campus has grown almost to capacity, providing space for many civic buildings such as City Hall, the police station,
the area's major health care centers, and higher density housing.
Another major landmark in the area is SeaTac Mall (now The Commons), built in the mid-1970s on what was farmland south of
320th Street. The Mall is one of the largest in South King County and is the anchor for retail development in the area. The Mall
was a result of population growth in the region and its location was determined by the 320th Street intersection with Interstate 5.
The Interstate supplanted Highway 99 as the main artery for commuter traffic in the County.
By the mid 1980s, South King County was growing quickly. Retail growth occurred along Highway 99, especially at the 320th
Street intersection. Roads and office space were developed to accommodate the increased growth. Residential growth was also
prominent, following plans developed by King County, with a large number of apartment homes. The changes to the community,
with increased housing and traffic, created a movement for greater self-determination. In 1989, the citizens of this area voted for
incorporation and the City of Federal Way was born, incorporating on February 28, 1990 with 58,000 residents.
EST OF
Federal Way
2013 COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2013
City of Federal Way
33325 8"' Avenue South
Federal Way, Washington 98003
(253)835-2520
www.cilyoffederalwgy.com
Prepared by the Finance Department
Finance Director
Ade' Ariwoola
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2013
Table of Contents
INTRODUCTORY SECTION
Page
Letterof Transmittal................................................................................................................................... 1
City Officials and Administrative Officers............................................................................................... 5a-b
City Functional Organization Chart ............................................................................................................ 6
GFOA Certificate of Achievement............................................................................................................. 7
FINANCIAL SECTION
Independent Auditor's Report .................................................................................................................... 8a-d
Management's Discussion and Analysis.................................................................................................... 9
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position....................................................................................................... 22
Statement of Activities........................................................................................................... 23
Fund Financial Statements:
Balance Sheet — Governmental Funds....................................................................................
24
Statement of Revenues, Expenditures, and Changes in Fund Balances —
Governmental Funds.........................................................................................................
26
Reconciliation of the Statement of Revenues, Expenditures, and Change
In Fund Balances of Governmental Funds to the Statement of Activities ........................
28
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
GeneralFund...................................................................................................................
29
StreetFund.......................................................................................................................
30
UtilityTax Fund...............................................................................................................
31
Statement of Net Position — Proprietary Funds................................................................................
32
Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds ...
33
Statement of Cash Flows — Proprietary Funds........................................................................
34
Notes to the Basic Financial Statements.......................................................................................... 35
Combining and Individual Fund Statements and Schedules — Nonmajor Governmental Funds:
FundDescription.............................................................................................................................. 69
CombiningBalance Sheet................................................................................................................ 70
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 74
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
ArterialStreet Fund.......................................................................................................... 78
Solid Waste & Recycling Fund........................................................................................ 79
Hotel/Motel Lodging Tax Fund....................................................................................... 80
Federal Way Community Center Fund............................................................................ 81
TrafficSafety Fund.......................................................................................................... 82
Paths& Trails Fund......................................................................................................... 83
Individual Fund Statements and Schedules — Debt Service Fund:
FundDescription.............................................................................................................................. 84
BalanceSheet.................................................................................................................................. 85
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ............. 86
Combining and Individual Fund Statements and Schedules — Internal Service Funds:
FundDescription.............................................................................................................................. 87
Combining Statement of Net Position............................................................................................... 88
Combining Statement of Revenues, Expenses and Changes in Fund Net Position .......................... 89
Combining Statement of Cash Flows................................................................................................ 90
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source................................................................................................... 93
Schedule by Function and Activity .................................................................................................. 94
Schedule of Changes by Function and Activity .............................................................................. 95
STATISTICAL SECTION
NetPosition by Component...................................................................................................................
97
Changesin Net Position.........................................................................................................................
98
Government -wide Revenues by Source and Expenditures by Function ................................................
99
Fund Balances, Governmental Funds....................................................................................................
100
Changes in Fund Balances, Governmental Funds..................................................................................
101
Assessed and Estimated Actual Value of Taxable Property ..................................................................
102
Property Rates and Levies, Direct and Overlapping Governments........................................................
103
PrincipalTaxpayers...............................................................................................................................
104
Property Tax Levies and Collections.....................................................................................................
105
Ratio of Outstanding Debt by Type.......................................................................................................
106
Ratio of General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita..............................................................
107
Computation of Direct and Overlapping Debt.......................................................................................
108
Computation of Limitation of Indebtedness...........................................................................................
109
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures Net of Debt Service Expense ........................
110
DemographicStatistics..........................................................................................................................
III
PrincipalEmployers..............................................................................................................................
112
Property Value, Construction and Bank Deposits..................................................................................
113
CapitalAssets by Function....................................................................................................................
114
Operating Indicators by Function..........................................................................................................
115
City Government Employees Full -Time Equivalent - History ...............................................................
116
Salaries & Surety Bonds of Principal Officials......................................................................................
117
Miscellaneous Statistical Information....................................................................................................
118
ii
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CITY OF
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City of Federal Way / I
Ak
CITY OF
Federal Way
June 27, 2014
People of the City of Federal Way
Honorable Mayor and City Council
I am pleased to submit to you the 2013 Comprehensive Annual Financial Report (CAFR) of the City of Federal Way,
Washington. This report is published annually as the official annual financial report and complied with state law (RCW
43.09.230) requiring annual report for Washington municipal governments to be certified and filed with the Washington State
Auditor's Office in a timely manner. The accuracy of the data, completeness and fairness of the presentation, including all
disclosures, rests with the responsibility of City management. All disclosures necessary to enable the reader to gain an
understanding of the City's financial activities have been included.
The City operates under a system of accounting, internal controls that are concerned with safeguarding of assets and the
reliability of financial records. The definition of accounting control assumes reasonable, but not absolute assurance that the
objectives expressed in it will be accomplished by the system. The concept of reasonable assurance recognizes that cost of
internal control should not exceed the benefits expected to be derived.
This transmittal letter is designed to complement the Management Discussion & Analysis (MD&A) and should be read in
conjunction with it. The City's MD&A can be found immediately following the Independent Auditor's Report.
REPORTING ENTITY
The City is a noncharter Optional Code City with a Mayor -Council form of government. It was incorporated on February 28,
1990, and is governed under the provisions of the Optional Municipal Code of the Revised Code of Washington. Optional
Code City status increases the City's operating authority by extending it to the powers of all four city classifications which
exist in Washington Law.
The City Council consists of seven council members, all of whom are elected at large by citizens of Federal Way to serve four-
year terms. In November 2009, the citizens of Federal Way approved Proposition 1 to change the form of government from a
City Manager -Council run government to an elected Mayor -Council government. Federal Way voters elected former 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.
King County Metro provides public transportation services. Public housing services are the primary focus of the King County
Housing Authority. The King County Library System engages City residents through its library and reference services. School
District No. 210 offers educational programs for kindergarten through high school students, in addition to vocational training.
ECONOMIC FACTORS AFFECTING FINANCIAL CONDITION
The Great Recession continues to have lingering effects on the economy. Many economic indicators during 2013 were still
below the pre -Great Recession levels. Consumers have gained some ground since the recession ended; groups hit harder than
average including young people. The housing market saw some improvements due to rise in personal income and decline in
foreclosures.
City of Federal Way / 2
We saw improvements in the unemployment rate but still well above the pre -Great Recession level. Meanwhile, inflation
overall has been stable. Consumer price index, as measured by personal consumption expenditures price index was 1.1% for
2013. The stock market, as measured by the Dow Jones Industrial average, S&P 500, and NASDAQ finished 2013 on above
2012 at 26%, 29%, and 38%, respectively.
Nationally, the U.S. Bureau of Economic Analysis (BEA) indicates Gross Domestic Product (GDP) increased at an annualized
rate of 1.9% in 2013 versus an annualized rate of 2.2% in 2012. This increase was anchored by personal consumer spending,
exports, construction, which was partly offset by decreased spending by federal, state, and local government.
Seattle -Tacoma -Bellevue annual unemployment rate for 2013 was 5.9%, as measured by the Bureau of Labor Statics, down
from 2012 of 7.4%. The Puget Sound region reached its peak unemployment rate during 2010 at 9.7% which was compounded
by the "dot.com" collapse, the 9/11 terror attacks on commercial airplane industry since 2001.
During 2013 Puget Sound saw a decrease in short sales to Pre -Crisis levels. 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 8% of all sales in King County during 2013, down from 14% in 2012.
ECONOMIC TRENDS
Federal Way is the eleventh largest city in Washington State with a population of 89,718 as of April 1, 2013. 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, state highways 99 and
509.
In 2013, there were 35,556 housing units in Federal Way, an increase of less than 1% over 2012. 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 2013 is estimated at
27,060. Major employers are; Federal Way Public Schools, Xerox Commercial Services, Weyerhaeuser, St. Francis
Community Hospital, World Vision, and Wild Waves.
Sales tax collected in 2013 total $11.4 million, and is above 2012 by $812 thousand. The retail sector of the local economy is
anchored by the following areas; the first is South 348`h and State Highway 99 including Wal-Mart Super Center, Wholesale
Sports, Costco, Lowe's Home Improvement Center, and Home Depot. The second is The Commons 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 53%; services 23%; construction 9%; wholesale trade 4%; information 5%,
manufacturing 1%, and other 5%.
In 2013, new construction assessed value totaled $37.5 million or approximately 0.5% of the City's 2013 assessed
valuation. The total assessed value of property in Federal Way was $7.3 billion, which is approximately 2% higher than the
2012 assessed valuation of $7.1 billion.
Real Estate sales increased 30% to approximately $399 million in 2013 as compared to $304 million in 2012. A total of 662
building permits and 3,287 other building related permits were issued in 2013. Estimated market value was $61.5 million and
$5.5 million respectively. Significant building permits include: Wynstone East, Federal Way Townhomes, Kohls, Davita, Park
16 Apartments, and Celebration Senior Living Apartments.
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.
City of Federal Way / 3
MAJOR INITIATIVES AND ACCOMPLISHMENTS
During 2013, the City of Federal Way completed one major transportation infrastructure project; the fourth phase of the State
Highway improvements between Dash Point Rd and 312th Street South. To date, State Highway retrofits cost $83.6 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 $9 million leveraged by $74.7 million in outside funding.
The Federal Way Police Department has continued to find new ways to fight crime and has led the way in innovative policing
strategies. First off, the Police Department has increased DUI enforcement resulting in forty additional arrests in 2013. In
addition they have developed a pilot to increase DUI enforcement using additional grant funds received. The City also
expanded the successful SafeCity program to neighborhoods, and have united multiple block watches and currently have 1,327
neighborhood partner residents throughout Federal Way. Through additional crime analysis information being shared with
patrol and detectives, residential burglary has decreased by 22% in 2013. To continue these efforts and to be proactive in
reducing crime, the Police Department has also joined the Suburban King County Coordinating Council on Gangs to confront
issues of gang and youth violence.
With respect to the retail sector, we have seen growth. The Commons added a major retailer, Kohl's. The Commons is also
adding Dick's Sporting Goods, and Total Wine a major retailor is also coming to the City of Federal Way.
On the former Toys "R" Us property located at 31510 20th Avenue South, there is a proposal in conjunction with a private
developer to add a Performing Arts & Conference Center and hotel. Next to the Toys R Us site, the Town Square site (former
AMC site), we are proposing building an urban park on about half the 4 acres and will be 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 (CDBG) in 2012. In 2013, the CDBG program included a range of public service activities
that delivered employment training for twenty Federal Way young adults that did not graduate from high school, emergency
rental assistance for sixty-nine Federal Way families, dental services for twenty-eight Federal Way residents, counseling for
thirty-eight high risk children and families, and inclusion activities for ninety-three disabled adults. Additionally, CDBG funds
provided technical assistance to ninety-one Federal Way residents seeking to start microenterprise businesses along this and
existing Federal Way small businesses that created thirteen new jobs. The Housing Repair program built successful projects
that furthered affordable, safe housing to thirty-six low income qualified residents over a twelve month timeframe.
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 / 4
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 2013 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 2013; which is the 19th 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, 2012. The City of Federal Way has received a Certificate of Achievement for the last twenty-two
years (fiscal years ended 1990 — 2012). 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 its biennial budget for the years beginning January 1, 2013 and 2014. 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. A special note of thanks is given to Chase Donnelly,
Accounting Supervisor who served as the coordinator for the CAFR preparation. The role of the State Auditor's Office should
also be acknowledged as a significant contribution to a fine product. Finally, we wish to express our appreciation to the Mayor
and City Council for their ongoing support and for providing the firm foundation for the pursuit of excellence in all realms of
professional endeavors.
Respectfully submitted,
Ademola A. Ariwoola, MBA, CGFM
Finance Director
City of Federal Way / 5a
SKIP PRIEST
Mayor
SUSAN HONDA
Councilmember
DINI DUCLOS
Councilmember
2013 CITY OFFICIALS
U
JIM FERRELL
Deputy Mayor
JEANNE BURBIDGE
Councilmember
DIANA NOBLE-GULLIFORD
Councilmember
1/19/13-11/25/13
OTHER ADMINISTRATIVE OFFICERS
KELLY MALONEY
Councilmember
BOB CELSKI
Councilmember
MARTIN A. MOORE
Councilmember
11/26/13-Present
Finance Director............................................................................................................................ Tho Kraus / Bob Noland
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
Citv of Federal Wav / 5b
2014 CITY OFFICIALS
JEANNE BURBIDGE
Deputy Mayor
SUSAN HONDA
Council Position #3
JIM FERRELL
Mayor
LYDIA ASSEFA-DAWSON
Council Position #1
BOB CELSKI
Council Position #5
KELLY MALONEY
Council Position #2
MARTIN A. MOORE
Council Position #6
OTHER ADMINISTRATIVE OFFICERS
DINI DUCLOS
Council Position #7
Chiefof Staff...................................................................................................................................................
Brian Wilson
InterimCity Attorney..................................................................................................................................Amy
Jo Pearsall
CityClerk.....................................................................................................................................................Carol
McNeilly
Community Development Director.............................................................................................................
Patrick Doherty
FinanceDirector............................................................................................................................................Ade'
Ariwoola
InterimParks Director.......................................................................................................................................
John Hutton
PublicWorks Director...............................................................................................................................
Marwan Salloum
PoliceChief.....................................................................................................................................................
Andy Hwang
City of Federal Way / 6
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CITY OF
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City of Federal Way / 7
Government Finance, Officers Association
Certificate of
Achievement
for. Excellence
in Financial
Reporting
Presets led to
City of Federal moray
Washington
For its Comprehensive Annul
Financial Report
for the Fiscal. Year Ended
December 31, 2012
*/foor .4
F—teculive DireclorlCEO
The Government Financial Officers Association of the United States and Canada (GFOA) awarded a certificated of
Achievement for Excellence in Financial Reporting to the City of Federal Way for its Comprehensive Annual
Report (CAFR) for the fiscal year ended December 31, 2012. This was the twenty-second consecutive year that the
City has achieved this prestigious award.
In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently
organized comprehensive annual financial report. This report must satisfy both generally accepted accounting
principles and applicable legal requirement. -
A Certificate of Achievement is valid for a period of one year ONLY. We believe that our current CAFR continues
to meet the Certificate of Achievement Program requirements and we are submitting it to GFOA to determine its
eligibility for another certificate.
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CITY OF
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City of Federal Way / 8a
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Washington State Auditor
Troy Kelley
INDEPENDENT AUDITOR'S REPORT
June 27, 2014
Mayor and City Council
City of Federal Way
Federal Way, Washington
REPORT ON FINANCIAL STA TEMENTS
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,
2013, 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
Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (360) 902-0370 • TDD Relay (800) 833-6388
City of Federal Way / 8b
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 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, 2013, 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.
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 9 through 19 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. The accompanying information
listed as Combining and Individual Fund Statements and Schedules and Capital Assets Used in
the Operation of Governmental Funds on pages 69 through 95 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 information directly to the
underlying accounting and other records used to prepare the financial statements or to the
City of Federal Way / 8c
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 27,
2014, 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,
TROY KELLEY
STATE AUDITOR
City of Federal Way / 8d
4ik
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
City of Federal Way / 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Federal Way, we offer readers of our annual financial report a narrative overview, and an
analysis of the financial activities of the City of Federal Way for the fiscal year ended December 31, 2013. We encourage
readers to consider the information in conjunction with the preceding letter of transmittal, the financial statements and notes to
the financial statements that follow.
FINANCIAL HIGHLIGHTS
• The total assets of the City of Federal Way exceeded its liabilities at December 31, 2013 by $597.3 million (Net Position.)
Capital Assets (net of depreciation and related debt) account for 87% of this amount with a value of $519.2 million. Of the
remaining net position of $78.0 million or 13%, $55.4 million may be used to meet the government's ongoing obligations
to citizens and creditors, without legal restriction while the $22.6 million are restricted for specific use.
• The City's total net position increased by $2.5 million, or less than 1% over 2012 as referenced on page number 14.
Governmental activities increased by $1.6 million or less than 1% while business -type activities increased by $0.9 million.
There was also a prior period adjustment of $3.4 million as noted in note 17 and therefore net position increased by $5.8
million.
• Net investment in capital assets governmental activities decreased by $1.97 million and unrestricted net position increased
by $3.8 million respectively over 2012 as referenced on page number 11.
• Restricted Net Position decreased by $0.2 million or 1% and is mainly for funding of capital projects.
• Governmental fund balances at year-end were $50.0 million, $1.2 million or 2% increase over the prior year. Of this
amount, a total of $16.0 million, or 32% of the governmental fund balance is unrestricted and available to fund ongoing
activities. The remaining $34.0 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 $16.0 million, which increased by $1.2 million or 8% from the prior
year.
• The City current year debt decreased by $2.7 million during the current fiscal year. General obligation debt decreased by
$2.5 million while public works trust fund loan decreased by $0.2 million. The decreases reflect the annual debt service
payments and compensated absences.
• The total decrease in principal and interest debt payments from 2012 to 2013 for the City of Federal Way was $4.5 million.
Total current year principal and interest payments of GO Bond and Public Work Trust Fund debt decreased by $2.2
million. The remainder was due to refunding of the 2003 GO Federal Way Community Center debt to a lower interest rate,
thus reducing the payments over the life of the loan.
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.
City of Federal Way / 10
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 plus deferred outflows and
liabilities plus deferred inflows, with the difference between the two reported as net position. This statement serves a purpose
similar to that of a balance sheet in private business. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City's net position changed during the most recent fiscal
year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the
timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result
in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the City of Federal Way that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover
all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities
of the City of Federal Way include law enforcement and public safety, construction and maintenance of streets, building
inspection, municipal court services, jail services, community planning and development services, parks and recreation
facilities, other community services and general administration. The business -type activities of the City include surface water
management and the control and operation of Dumas Bay Centre, a multi -use facility that offers business and retreat
accommodations, recreation and cultural arts classes and a performing arts facility.
The City has no separately identified component units included in the government -wide financial statements. The City has
reported its investment in 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 fund, 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.
City of Federal Way / I
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.
The basic governmental fund financial statements can be found on pages after the government -wide statements of this report.
Proprietary Funds
The City of Federal Way maintains two types of proprietary funds. Enterprise funds are used to report the same functions
presented as business -type activities in the government -wide statements. The City uses enterprise funds to account for its
surface water management and the Dumas Bay Centre. Internal service funds are an accounting device used to accumulate and
allocate costs internally among the City's various functions. The City uses internal service funds to account for its risk
management 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 OF NET POSMON
As of December 31, 2013 and 2012
Governmental Activities
Business -Type
Activities
Total
2013
2012
2013
2012
2013
2012
Current and other assets
$ 91,533,341
$87,471,044
$ 7,182,887
$6,432,446
$ 98,716,228
$ 93,903,490
Capital assets and CIP,
net ofaccum depreciation
481,287,121
482,907,776
51,283,047
51,126,195
532,570,168
534,033,971
Total assets
572,820,462
570,378,820
58,465,934
57,558,641
631,286,397
627,937,461
Long-term liabilities
29,002,726
29,119,984
734,681
912,383
29,737,407
30,032,367
Other liabilities
3,764,800
2,786,660
513,334
370,580
4,278,134
3,157,240
Total liabilities
32,767,526
31,906,644
1,248,015
1,282,963
34,015,541
33,189,607
Net position:
Net investment in:
capital assets
468,628,412
470,597,776
50,620,091
50,280,880
519,248,503
520,878,656
Restricted
22,594,884
22,847,077
20,559
26,496
22,615,443
22,873,573
Unrestricted
48,829,641
45,027,323
6,577,269
5,968,302
55,406,910
50,995,625
Total net position
$ 540,052,936
$ 538,472,176
$ 57,217,919
$ 56,275,678
$ 597,270,856
$ 594,747,854
The 2012 financial information has
been reclassified to conform to the classification in 2013
City of Federal Way / 12
Analvsis of Net Position
Total net position of the primary government of $597.3 million at December 31, 2013 increased $2.5 million or less than 1.0%
compared to December 31, 2012. The increase is mainly due to business type activities increase of $0.9 million and
governmental activities increase of $1.6 million.
The largest component of the City's net position, 87% or $519.2 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 $19.3 million of the total restricted net position of the city are earmarked for construction improvement
projects. $13.5 million of the $19.3 million earmarked for construction improvement projects are restricted and the remainder
is committed to construction improvement projects. Some of the major projects include the trail and pedestrian access
improvements, S 320th street at 20th avenue South, SW 312th Street at SR509, S 356th street from SR99 to SR161, SR99 HOV
Lanes Phase 5, 21st avenue SW at SW 336th street, and S 320th street from I Ith place S to I-5 Limited Access Preservation
Project. 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 position of $3.4 million is divided among restrictions for: $92 thousand for police
special funds, petty cash/change funds and advance travel, $21 thousand for steel lake and north lake management districts,
$19 thousand for prepaid insurance/debt, $3.2 million for debt service prefunding, and $41 thousand for Community
Development Block Grant.
The unrestricted business -type activities portion of $6.6 million, $6.5 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 $55.4 million to meet ongoing obligation to citizens and creditors.
Examples of other City obligations which net position may be used for are public safety, economic development, parks
maintenance, 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 position, for the
government as a whole, as well as for the separate governmental and business -type activities.
Governmental Activities:
Current and other assets increased by $4.1 million or 4.6% primarily due to an increase of investment in joint venture related to
the SCORE jail facility, and grants due from state and federal agencies for construction in progress on our street and traffic
projects. In addition, increases in Property, Sales and Real Estate taxes cash & cash equivalents contributed to this increase.
Capitals assets and CIP, net of accumulated depreciation decreased by $1.6 million or less than 1.0% primarily due to
disposing of old Information Technology assets, depreciation of assets, and a prior period adjustment of construction in
progress.
Long-term liabilities decreased by $117 thousand or less than 1.0% primarily due to a lower outstanding balance in GO Bond
Loans, SCORE facility debt, and Valley Communications debt and refunding of a Federal Way Community Center GO Bond
in 2013.
Other liabilities increased by $978 thousand or 35.1% primarily due to having more December purchases in the Transportation
Fund than the prior year, therefore increasing vouchers payable.
Net investments in capital assets decreased $1.97 million or less than 1.0% primarily due primarily due to disposing of old
Information Technology assets, depreciation of assets, a prior period adjustment of construction in progress and a decrease in
long term liabilities such as outstanding long-term debt.
City of Federal Way / 13
Restricted net position represents amounts that must be used in accordance with external restrictions, and decreased by $252
thousand or 1.0% from the prior year primarily due to an increase in capital projects funding and transportation project
expenditures increasing.
Business -Type Activities:
Current and other assets increased by $750 thousand or 11.7% primarily due to an increase in grants received in Surface Water
Management and an increase in Dumas Bay Center rentals.
Capitals assets and CIP, net of accumulated depreciation increased by $157K or less than 1.0% primarily due to construction in
progress for S 356h Street RDF Retrofit project.
Long-term liabilities decreased by $178 thousand or 19.5% due to decrease in compensated absences, and low outstanding
balance in Public works trust fund loan.
Other liabilities increased by $143 thousand or 38.5% primarily due to retainage payable for the S 356th Stormwater Facility
project, and an increase in conference and retreat services for the Dumas Bay Centre.
Net investments in capital assets increased $339 thousand or less than 1.0% primarily due to construction in progress for S
356h Street RDF Retrofit project, and low outstanding balance in Public works trust fund loan.
Unrestricted net position increased by $609 thousand or 10.2% due to an increase in grants received in Surface Water
Management, and an increase in Dumas Bay Center rentals.
City of Federal Way / 14
CHANGES IN NEr POSMON
For the Years Ended December 31, 2013 and 2012
Governmental Activities
Business -Type
Activities
Total
2013
2012
2013
2012
2013
2012
Revenues:
Programs revenues:
Charges for services $
12,515,733
$ 11,560,208
$ 4,096,751
$ 4,222,726
$ 16,612,484 $
15,782,934
Operating grants & contrib.
6,007,682
5,367,163
774,436
576,182
6,782,118
5,943,345
Capital grants & contrib.
3,892,651
5,225,265
-
-
3,892,651
5,225,265
General revenues:
Property taxes
10,152,114
10,052,109
-
-
10,152,114
10,052,109
Sales tax
11,346,338
10,534,147
-
-
11,346,338
10,534,147
Local criminal justice sales ta),
1,992,667
1,864,991
-
-
1,992,667
1,864,991
Utility tax
12,584,293
13,083,179
-
-
12,584,293
13,083,179
Real estate excise tax
2,034,033
1,507,313
-
-
2,034,033
1,507,313
Other taxes
393,524
313,607
-
-
393,524
313,607
Other
868,261
838,259
13,000
11,424
881,261
849,683
Total Revenue
61,787,296
60,346,241
4,884,187
4,810,332
66,671,483
65,156,573
Expenses
General government
4,575,614
4,300,691
-
-
4,575,614
4,300,691
Security of persons & property
27,894,695
27,604,936
-
-
27,894,695
27,604,936
Transportation
9,675,727
9,946,776
-
-
9,675,727
9,946,776
Physical environment
490,916
415,935
-
-
490,916
415,935
Economic environment
2,191,487
2,645,478
-
-
2,191,487
2,645,478
Health and human services
1,683,449
754,727
-
-
1,683,449
754,727
Culture and recreation
8,418,920
8,081,401
-
-
8,418,920
8,081,401
Interest on long-term debt
1,779,833
602,572
-
-
1,779,833
602,572
Surface Water Management
-
-
3,234,742
3,272,514
3,234,742
3,272,514
Dumas Bay Centre
-
-
844,623
873,144
844,623
873,144
Total Expenses
56,710,640
54,352,516
4,079,365
4,145,658
60,790,005
58,498,174
Change in net position
5,076,656
5,993,725
804,822
664,674
5,881,478
6,658,399
before transfers
Transfers
(137,419)
(140,500)
137,419
140,500
-
-
Change in net position
4,939,237
5,853,225
942,241
805,174
5,881,478
6,658,399
Net position - beginning
538,472,176
532,618,951
56,275,678
55,470,504
594,747,854
588,089,455
Prior period adjustment
(3,358,477)
-
-
-
(3,358,477)
-
Adjusted net position -
bebeginning
g g
535,113,699
532,618,951
56,275,678
55,470,504
591,389,377
588,089,455
Net position - ending
$ 540,052,936
$ 538,472,176
$ 57,217,919
$ 56,275,678
$ 597,270,855
$ 594,747,854
City of Federal Way / 15
Analysis of the chance in net position:
Total government -wide revenues of the primary government increase $1.5 million or 2.3% and total expenses increased $2.3
million or 3.9% from the prior years. These changes are discussed in more detail below.
Governmental Activities:
Governmental activities contributed $4.9 million or 84% of the total change in net position of $5.8 million. The prior year
change in net position was $5.9 million. Compared to the prior year the primary change compared to 2012 is due to increased
expenses in the current year.
Total revenues for governmental activities increased $1.4 million or 2.4%. The increase is mainly due to an increase in
property, sales, and real estate excise taxes.
Total expenses for governmental activities increased $2.4 million or 4.3%. The increase is mainly due to increases in SCORE
facility payments, Police positions, capital outlay and additional interest payments for debt.
Governmental Activities - Revenues
Other, 1.40/.
Charges for 6.
scrviccs, 20.3
Other taxes, Operating grants
27.5% & contributions,
9.7%
Sales tax, 18.40/.
Capital grants and
Property to contribution, 6.3%
16.4% ,
Business -Type Activities:
Governmental Activities - Expenses
Interest on long-_
tens debt, 3.1 %
Health and human
services, 3.0%
Economic
environment, 3.90%
Physical
environment, 0.9%
General
mment, 8.1 %
Business -type activities of the City's Surface Water Management system and Dumas Bay Centre increased the City's net
position by $0.9 million. This was due to Surface Water Management Fund increase by $1.0 million which was offset by a
decrease in Dumas Bay Centre Fund net assets by $0.1 million. The prior year change in net assets was $805 thousand; and the
primary change compared to 2012 is due to the following revenue and expense statements below.
Total revenues increased by $74 thousand or 1.5% from 2012. Attributing factors to the increase in revenues are as follows:
Additional revenue for Dumas Bay Center for overnight rentals and additional grant revenue from the Surface Water
Management funds from the Department of Ecology reflect the change from 2012.
Total expenses decrease of $66 thousand or 1.6% from 2012. This is due to a decrease in repairs and maintenance at the
Dumas Bay facility from 2012.
Operating
& contribr
15.9oi
Business -Type Activities - Revenues
Other, 0.3%
Charges for 4
services, 83.91/.
Business -Type Activities -Expenses
Dumas Bay
Centre, 20.7%
Surface Water
Management,
79.3%
City of Federal Way / 16
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City of Federal Way uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements.
Governmental funds
The focus of the City of Federal Way's governmental funds is to provide information on near -term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
unrestricted fund balance may serve as a useful measure of a government's net resources available for spending at the end of
the fiscal year.
As of the end of 2013, the City's governmental funds had a combined ending fund balance of $50.0 million which increased by
$1.2 million from the prior year. Approximately 32% or $16.0 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 $1.2 million or 8%. The increase in
fund balance is primarily due to an increase in building permits, plan checking fees, sales tax, property tax, contracted revenue,
and parks fee revenue.
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 decreased $986 thousand or 27% from 2012 due mainly to less tax revenue
received and more being transferred out for capital projects.
The Debt Service Fund has a total fund balance of $5.2 million which increased by $1.1 million from 2012 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 increased by $798 thousand or 37%. This is primarily due to transfers in of Utility tax and LIFT
funding from the State.
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 decreased by $2.0 million or 15%.
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 $6.3 million, and
those for Dumas Bay Centre amounted to $213 thousand. The total change in net position for both funds was $1.1 million
increase and $0.1 million 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 2013, the City made two 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 2013 fiscal year. The following is the major changes for the 2013 budget:
o Added $100 thousand for termination and other payouts.
o Added $600 thousand for pension reserves.
o Added $106 thousand for election fees.
o Added $935 thousand for future and pending deductible to Risk Management.
City of Federal Way / 17
o Added $94 thousand for building Abatement.
o Added $78 thousand for comprehensive plan update.
o Added $82 thousand for the City Center Redevelopment.
o Added $60 thousand for Arts Commission Cultural Plan.
o Added $51 thousand for Steel Lake Park Asphalt Repair.
o Added $100 thousand for Jail Reserves.
o Added $420 thousand for police grants.
Adjustments to revenues and other sources budget include: Adjustments to beginning balance of $5.3 million; increase of $70
thousand for traffic infraction fines and forfeitures; increase in liquor profits of $158 thousand; increase in grants of $439
thousand; increase in sales tax of $500 thousand; increase of $55 thousand for property taxes; increase of $131 thousand for
criminal justice sales tax; increase in franchise fees of $60 thousand; increase of $26 thousand for liquor excise tax; increase of
$175 thousand for state shared criminal justice for high crime; increased building permits of $300 thousand; increased plan
check fees of $450 thousand and animal license of $30 thousand.
The General Fund ending fund balance of $16.1 million is $5.7 million over the above the projected $10.4 million for 2013
year-end. The $2.5 million of the $5.7 million excess is being earmarked for carry forward into 2014. The remaining $3.2
million increase is considered one-time funds.
The $5.7 million increase in ending fund balance is made up of $724 thousand in additional revenues/other sources and $5.0
million in unspent expenses/other uses.
The $724 thousand increase in revenues/other sources is primarily attributed to increases in property taxes of $27 thousand;
sales tax of $154 thousand, criminal justice sales tax of $99 thousand, gambling taxes of $34 thousand, state shared revenue of
$93 thousand, and community and economic development permits and fees of $306 thousand.
The $5.0 million unspent expenses/other uses are primarily attributable to savings found in: Police & Jail services of $570
thousand; Community & Economic Development of $465 thousand; Parks & Recreation of $286 thousand, Public Works of
$865 thousand; Pension Reserves of $601 thousand; Workers Compensation of $54 thousand; Risk Management Deductible
Claims of $564 thousand; Mayor's Office/Human Services of $40 thousand; Law of $73 thousand; Human Resources/City
Clerk of $177 thousand, Municipal Court of $106 thousand; Finance of $44 thousand, City Council of $17 thousand, and
Contingency Reserves of $1.1 million.
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,
2013 amounts to $533 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
Activities Activities
Total
2013 2012
Land $
304,177,872 $
10,933,528 $
315,111,400 $
314,499,103
Building and improvements
34,376,028
35,306,607
69,682,635
73,354,051
Machinery and equipment
4,878,103
27,892
4,905,995
5,225,065
Infrastructure
123,474,630
1,777,668
125,252298
115,809,778
Construction in progress
14,380,488
3,237,352
17,617,840
25,145,974
Total Capital Assets $
481,287,121 $
51,283,047 $
532,570,168 $
534,033,971
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 $7.0 million and performing arts center and various park improvements for $1.3
million. Additional information on the City of Federal Way's capital assets can be found in Note 8 of the Notes to the
Financial Statements.
City of Federal Way / 18
Long-term debt
At the end of 2013, the City of Federal Way had total debt outstanding of $41.2 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.
LONGTERM DEBT (FUTURE PRINCIPAL AND INTEREST PAYMENTS)
General obligation bonds
Public works trust fund loan
Governmental Business -Type
Activities Activities Total
$ 40,504,865 $ - $ 40,504,865
- 684,005 684,005
Total $ 40,504,865 $ 684,005 $ 41,188,870
The City's total debt decreased by $4.5 million due to annual debt service payments and refunding of debt as noted in the
Financial Highlights.
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.
The City's assessed valuation for 2013 was $7.333 billion and the total amount of debt the City may issue is $525.0 million.
Remaining legal debt capacities as of December 31, 2013 are:
General government (no vote required)
$ 84,940,327
General government (3/5 majority vote required)
$ 73,336,279
Parks and open space (3/5 majority vote required)
$183,340,698
Utilities (3/5 majority vote required)
$183,340,698
Total Capacity
$524,958,002
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 but slower in 2013 versus 2012 as measured by real GDP.
With unemployment rates remaining high at 7.4% in 2013; a decrease from 8.1% in 2012; many Americans have remained
jobless. At the national level, personal consumption expenditure, exports, manufacturing, and housing starts were an upturn for
the 2013 economy. The state's jobless rate tracked closely with the national average during the same period.
During 2013 Ben Bernanke and Federal Reserved held a steady pace of quantitative easing until the end of 2013 when they
announced tapering of the asset buyback program from $85 billion per month to $75 billion per month. Tapering effectively
reduces the amount of currency pushed out to the market for banks to lend.
During 2013, U.S. domestic crude oil production reached its highest level in 24 years. U.S. oil and gas production has
contributed to relatively stable global crude prices during 2013. The west coast experienced narrow gasoline price ranges
during 2013 than in previous years, with a high -low spread of 74 cents in Seattle.
Other factors in 2013 that affected the United States economy negatively are the "debt limit crisis" and "government shut
down". According to most experts, the potential negative consequence of a debit -limit debacle are much greater and far
reaching than that of a shutdown — particularly given that risk of a government default that would jeopardize the full faith and
credit of the United States.
City of Federal Way / 19
Like the rest of the nation, the Washington state economy is still dealing with a severely damaged economy. However, during
2013, Washington State leads the nation on a real per capital income basis, 1.9% versus 1.5% respectively.
The Puget Sound region, however, is doing better than the rest of the country, employment growing 2.9% over the year
compared to 1.45% for the nation. The employment growth is reflective of population growth in the Puget Sound region
versus the nation.
Despite the lift from Boeing during past years, the regional economy is poised to for a sustained growth rate into
2014. Foreclosures in Washington State experienced a 13% increase from 2012 to 2013 while the U.S. experienced a decrease
of 26% from 2012 to 2013.
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.
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City of Federal Way / 20
EASIC FINANCIAL STATEMENTS
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City of Federal Way / 21
Government -Wide Financial Statements
Statement of Position
This statement provides information on all city assets and deferred outflows of resources and liabilities and deferred inflows
of resources, with the difference between the two reported as net position.
Statement of Activities
This statement is focused on both the gross and net costs of various functions, including both governmental and business -type
activities, which are supported by the City's general tax and other revenues.
City of Federal Way / 22
STATEMENT OF NET POSITION
December 31, 2013
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
$ 65,813,370
$ 6,816,926
$ 72,630,296
2,468,594
167,468
2,636,062
3,034,949
198,493
3,233,442
28,759
-
28,759
91,859 - 91,859
20,095,810 - 20,095,810
304,177,872
10,933,528
315,111,400
14,380,488
3,237,352
17,617,840
9,826,782
620,797
10,447,579
24,549,246
34,685,810
59,235,056
4,878,103
27,892
4,905,995
123,474,630
1,777,668
125,252,298
572,820,462
58,465,934
631,286,397
Accounts payable and accruals
2,201,688
77,323
2,279,011
Unearned revenue
313,361
380,330
693,691
Retainage payable
192,796
32,452
225,248
Due to other governments
-
18,265
18,265
Customer deposits
1,056,955
4,963
1,061,918
Noncurrent Liabilities:
Due within one year
1,090,263
186,663
1,276,926
Due in more than one year
13,358,063
548,018
13,906,081
Due to other governments
14,554,400
-
14,554,400
Total Liabilities
32,767,526
1,248,015
34,015,541
NET POSITION
Net investment in capital assets
468,628,412 50,620,091
519,248,503
Restricted for:
Debt service prefunding
3,229,709 -
3,229,709
Capital projects
19,273,316 -
19,273,316
Steel Lake & North Lake Mgmt District
- 20,559
20,559
Other
91,859 -
91,859
Unrestricted
48,829,641 6,577,269
55,406,910
Total Net Position
$ 540,052,936 $ 57,217,919 $ 597,270,856
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 23
STATEMENT OF ACTIVITIES
For the Year ended December 31, 2013
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
$ 4,575,614
$ 1,983,033 $ 2,670,582 $ -
$ 78,002
$
$ 78,002
Security ofpersons & property
27,894,695
5,022,896 729,756 -
(22,142,043)
(22,142,043)
Transportation
9,675,727
577,489 1,557,426 3,892,651
(3,648,161)
(3,648,161)
Physical environment
490,916
299,337 207,367 -
15,788
15,788
Economic environment
2,191,487
2,201,375 741,821
751,709
751,709
Health
1,683,449
- -
(1,683,449)
(1,683,449)
Culture & recreation
8,418,920
2,431,603 100,730
(5,886,587)
(5,886,587)
Interest on long-term debt
1,779,833
- -
(1,779,833)
(1,779,833)
Total governmental activities
56,710,640
12,515,733 6,007,682 3,892,651
(34,294,574)
-
(34,294,574)
Business -type Activities:
Surface Water Management
3,234,742
3,474,426 774,436 -
1,014,120
1,014,120
Dumas Bay Centre
844,623
622,325 -
(222,298)
(222,298)
Total business -type activities
4,079,365
4,096,751 774,436 -
791,822
791,822
Total
$ 60,790,005
$ 16,612,484 $ 6,782,118 $ 3,892,651
(34,294,574)
791,822
(33,502,753)
General revenues:
Property tax
10,152,114
-
10,152,114
Sales tax
11,346,338
11,346,338
Local criminal justice sales tax
1,992,667
1,992,667
Utility tax
12,584,293
12,584,293
Real estate excise tax
2,034,033
2,034,033
Gambling tax
178,696
178,696
Hotel/motel tax
208,839
208,839
Leasehold excise tax
5,989
5,989
Other revenue
678,850
-
678,850
Investment earnings
189,411
13,000
202,411
Transfers
(137,419)
137,419
-
Total general revenues and transfers
39,233,811
150,419
39,384,230
Change in net position
4,939,237
942,241
5,881,478
Net position at beginning of year
538,472,176
56,275,678
594,747,854
Prior period adjustment (See Note 17)
(3,358,477)
-
(3,358,477)
Adjusted beginning net position
535,113,699
56,275,678
591,389,377
Net position at end of year
$ 540,052,936
$ 57,217,919
$ 597,270,856
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 24
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2013
Debt
General
Street
Utility Tax
Service
ASSETS
Equity in pooled cash & investments
$ 15,069,682
$ 1,106,114
$ 2,215,974
$ 4,889,669
Prepaid insurance/debt service
23,759
-
-
-
Receivables (net):
Taxes
367,226
-
1,448,358
424,985
Accounts and contracts
10,376
-
-
-
Restricted cash
91,859
-
-
-
Due from other governments
1,458,440
-
3,208
-
Interfund loans receivable
304,328
-
-
TOTAL ASSETS
17,325,670
1,106,114
3,667,540
5,314,654
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND
Liabilities:
Vouchers payable
502,219
176,387
-
Accounts/payroll payable
6,455
-
-
Retainage payable
-
-
-
-
Deposits payable
285,949
755,425
-
-
Interfund loans payable
-
-
-
-
Unearned revenue
390,460
74,302
-
66,318
TOTAL LIABILITIES
1,185,083
1,006,114
-
66,318
Fund Balance:
Nonspendable
76,538
-
-
-
Restricted
39,081
-
-
3,229,709
Committed
21,893
100,000
3,667,540
2,018,627
Unassigned
16,003,076
-
-
-
TOTAL FUND BALANCES
16,140,587
100,000
3,667,540
5,248,336
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 17,325,670 $ 1,106,114 $ 3,667,540 $ 5,314,654
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 25
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
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2013
Downtown Nonmajor
Redevelopment Transportation Governmental Total
$ 2,868,662 $ 13,124,304 $ 8,900,872 $ 48,175,278
- - - 23,759
(16,201)
-
-
2,224,368
-
163,824
70,028
244,228
-
-
-
91,859
101,337
854,824
617,137
3,034,946
-
-
-
304,328
2,953,798
14,142,952
9,588,037
54,098,766
7,500
833,112
410,331
1,929,549
-
-
-
6,455
-
114,985
77,811
192,796
-
-
15,581
1,056,955
-
304,328
304,328
(16,225)
-
103,554
618,409
(8,725)
948,097
911,605
4,108,492
Fund Balance:
Nonspendable
- - - 76,538
Restricted
2,551,558 8,747,422 2,949,705 17,517,474
Committed
410,965 4,447,433 5,726,727 16,393,185
Unassigned
- - - 16,003,077
TOTAL FUND BALANCES
2,962,523 13,194,855 8,676,432 49,990,273
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 2,953,798 $ 14,142,952 $ 9,588,037
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. 466,878,004
Investment in joint venture is not a financial resource and, therefore, not reported in the funds 20,095,810
Other long-term assets are not available to pay for current -period expenditures and, therefore,
are unearned revenues in the funds 305,048
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 positic 31,786,527
Long-term liabilities, including bonds payable, are not due and payable in the current period
and, therefore, are not reported in the funds. (29,002,726)
Net position of governmental activities $ 540,052,936
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 26
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2013
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
General
Street
Utility Tax
$ 23,528,551 $ - $ 12,584,292
2,532,692 105,325 -
1,810,519 1,069,539 -
3,618,020 195,212 -
1,166,607 - -
132,777 839 6,334
416,943 34,226 -
Debt
$ 2,034,033
4,550
33,206,109 1,405,141 12,590,626 2,038,583
3,811,331 - 48,000 -
28,409,880 - - -
- 4,004,062 - -
2,102,989 - - -
812,996 - - -
3,940,897 - - -
- - 1,019,698
- - - 1,781,778
48,358 - - -
39,126,451 4,004,062 48,000 2,801,476
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (5,920,342) (2,598,921) 12,542,626 (762,893)
OTHER FINANCING SOURCES (USES)
Bond proceeds
-
-
-
12,415,000
Bond principal payoff
-
-
-
(11,955,000)
Sale of capital assets
5,500
-
-
-
Bond premium
-
-
-
410,660
Transfers in
9,041,259
2,598,921
-
2,530,224
Transfers out
(1,920,921)
-
(13,528,772)
(1,572,000)
TOTAL OTHER FINANCING
SOURCES (USES)
7,125,838
2,598,921
(13,528,772)
1,828,884
NET CHANGE IN FUND BALANCES
1,205,496
-
(986,146)
1,065,991
FUND BALANCES - BEGINNING
14,935,091
100,000
4,653,686
4,182,345
FUND BALANCES - ENDING
$ 16,140,587
$ 100,000
$ 3,667,540
$ 5,248,336
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 27
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2013
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
Downtown
Redevelopment Transportation
Nonmajor
Governmental Total
$ 8,280 $ - $ 350,257 $ 38,505,413
- - - 2,638,017
523,798 3,784,909 2,493,746 9,682,511
- 269,702 1,882,792 5,965,726
- - 2,745,383 3,911,990
2,778 14,775 9,996 172,049
- - 227,681 678,850
534,856 4,069,386 7,709,855 61,554,556
36,915 - 598,783
4,495,029
- - 618,362
29,028,242
205,466 1,463,241
5,672,769
- 468,220
468,220
- - 87,513
2,190,502
- - 868,990
1,681,986
- - 2,242,484
6,183,381
- - -
1,019,698
- - -
1,781,778
- 7,568,539 1,371,052
8,987,949
36,915 7,774,005 7,718,645
61,509,554
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 497,941 (3,704,619) (8,790) 45,002
OTHER FINANCING SOURCES (USES)
Bond proceeds
Bond principal payoff
Sale of capital assets
Equity transfers out
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
- 12,415,000
- - - (11,955,000)
- 5,500
- - - 410,660
300,000 1,825,000 2,677,449 18,972,853
- (82,000) (1,627,414) (18,731,107)
300,000
1,743,000
1,050,035
1,117,906
797,941
(1,961,619)
1,041,245
1,162,908
2,164,582
15,156,474
7,635,187
48,827,365
$ 2,962,523
$ 13,194,855
$ 8,676,432
$ 49,990,273
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 28
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, 2013
Amounts reported for governmental activities in the statement of activities (page 19) are 2013
different because:
Net change in fund balances --total governmental funds $ 1,162,908
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 4,259,380
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. (2,441)
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. 191,835
Internal service funds are used by management to charge costs of risk management,
information systems, mail & duplication, fleet, and building systems to the funds. (599,099)
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. (73,346)
Change in net position of governmental activities $ 4,939,237
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 29
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
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)
S 22,485,000
S 23,215,000
S 23,528,551
S 313,551
2,023,000
2,413,000
2,532,692
119,692
1,244,432
1,927,366
1,810,519
(116,847)
2,865,748
3,387,171
3,618,020
230,849
1,110,000
1,180,000
1,166,607
(13,393)
69,000
69,000
132,777
63,777
290,650
290,650
416,943
126,293
30,087,830 32,482,187 33,206,109 723,922
5,299,460
7,098,748
3,811,331
3,287,417
28,121,608
28,685,146
28,409,880
275,266
2,255,821
2,566,122
2,102,989
463,133
735,941
770,474
812,996
(42,522)
3,910,709
4,299,424
3,940,897
358,527
-
55,458
48,358
7,100
40,323,539 43,475,371 39,126,451 4,348,920
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (10,235,709) (10,993,184) (5,920,342) 5,072,842
OTHER FINANCING SOURCES (USES)
Sale of capital assets
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
- - 5,500 5,500
9,118,973 9,143,438 9,041,259 (102,179)
(2,223,085) (2,675,196) (1,920,921) 754,275
6,895,888 6,468,242 7,125,838 657,596
(3,339,821) (4,524,942) 1,205,496 5,730,438
9,616,270 14,935,091 14,935,091 -
$ 6,276,449 $ 10,410,149 $ 16,140,587 $ 5,730,438
The notes to financial statements are an integral part of this statement.
City of Federal Way / 30
STREET FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
REVENUES
Licenses and permits
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Transportation
TOTAL EXPENDITURES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 115,000
$ 115,000
$ 105,325 $
(9,675)
1,040,000
1,111,187
1,069,539
(41,648)
202,000
202,000
195,212
(6,788)
2,000
2,000
839
(1,161)
34,000
34,000
34,226
226
1,393,000 1,464,187 1,405,141 _ (59,046)
4,346,085 4,869,383 4,004,062 865,321
4,346,085 4,869,383 4,004,062 865,321
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (2,953,085) (3,405,196) (2,598,921) 806,275
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
2,953,085 3,405,196 2,598,921 (806,275)
2,953,085 3,405,196 2,598,921 (806,275)
0 - - -
100,000 100,000 100,000 -
$ 100.000 $ 100,000 $ 100,000 $ -
The notes to financial statements are an integral part of this statement.
City of Federal Way / 31
UTILITY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
Variance with
_ Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 12,361,000 $ 12,494,000
$ 12,584,292
$ 90,292
Interest
6,000 6,000
6,334
334
TOTAL REVENUES
12,367,000 12,500,000
12,590,626
90,626
EXPENDITURES
Current:
General government 48,000 48,000 48,000 -
TOTAL EXPENDITURES 48,000 48,000 48,000
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
12,319,000
12,452,000
12,542,626
90,626
OTHER FINANCING SOURCES (USES)
Transfers out
(12,822,187)
(13,631,860)
(13,528,772)
103,088
TOTAL OTHER FINANCING
SOURCES (USES)
12,822,187
(13,631,860)
(13,528,772)
103,088
NET CHANGE IN FUND BALANCES
(503,187)
(1,179,860)
(986,146)
193,714
FUND BALANCES - BEGINNING
3,714,674
4,653,686
4,653,686
-
FUND BALANCES - ENDING $
3,211,487
$ 3,473,826
$ 35667,540 $
193,714
The notes to financial statements are an integral part of this statement.
City of Federal Way / 32
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2013
Governmental
Business -type Activities - Enterprise Funds
Activities
Surface Water
Dumas Bay
Internal
Management
Centre
TOTAL
Service
ASSETS
Current Assets
Equity in pooled cash & investments
$ 6,295,886
$ 480,007
$ 6,775,892
$ 17,679,126
Prepaid items
-
-
-
5,000
Receivables (net):
Accounts and contracts
158,559
8,909
167,468
-
Due from other governments
198,493
-
198,493
-
TOTAL CURRENT ASSETS
6,652,937
488,916
7,141,852
17,684,126
Property, plant and equipment
Land
8,823,888
2,109,640
10,933,528
-
Building/structures
19,849
3,581,015
3,600,864
16,533,999
Machinery/furniture/equipment
47,972,459
122,200
48,094,659
15,456,833
Infrastructure
1,916,645
-
1,916,645
-
Construction in progress
2,858,544
378,808
3,237,352
Less accumulated depreciation
(13,436,825)
(3,063,176)
(16,500,001)
(17,581,713)
TOTAL NONCURRENT ASSETS
48,154,560
3,128,487
51,283,047
14,409,119
TOTAL ASSETS
54,807,497
3,617,403
58,424,899
32,093,245
LIABILITIES AND FUND EQUITY
Current Liabilities:
Vouchers/payroll payable
72,243
23,345
95,588
265,684
Retainage payable - with escrow agent
32,452
-
32,452
-
Deposits payable
-
4,963
4,963
Unearned revenue
147,289
233,041
380,330
-
Public Works trust fund loan payable
182,359
-
182,359
-
Compensated absences payable
3,429
875
4,304
-
TOTAL CURRENT LIABILITIES
437,773
262,224
699,997
265,684
Long-term liabilities
Public Works trust fund loan payable
480,591
-
480,591
-
Compensated absences payable
53,714
13,713
67,427
45,410
TOTAL LONG-TERM LIABILITIES
534,305
13,713
548,018
45,410
TOTAL LIABILITIES
972,078
275,937
1,248,015
311,094
Net investment in capital
47,491,610
3,128,487
50,620,097
14,409,119
Restricted for:
Steel Lake & North Lake Mgmt District
20559
-
20,559
-
Unrestricted
6,323:251
212,979
6,536,230
17,373,032
TOTAL NET POSITION
$ 53,835,419
$ 3,341,466
57,176,885
$ 31,782,151
Adjustment to reflect the consolidation of internal service fund activities related to
enterprise funds 41,034
NET POSITION OF BUSINESS -TYPE ACTIVITIES $ 57,217,919
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 33
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For Year Ended December 31, 2013
OPERATING REVENUES:
Service charges and fees
Intergovernmental
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personal services
Materials and supplies
Services and charges
Intergovernmental
Depreciation
Interfund charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES):
Business -type Activities - Enterprise Funds
Surface Water Dumas Bay
Management Centre TOTAL
Governmental
Service
$ 3,454,042 $ 621,723 $ 4,075,765 $ 5,772,822
774,436 - 774,436 1,849
20,388 600 20,988 97,475
4,248,866 622,323 4,871,189 5,872,146
1,463,836
311,365
1,775,201
740,451
138,381
109,474
247,855
565,072
348,289
200,907
549,196
2,480,166
181,374
380
181,754
240,977
499,883
181,997
681,880
2,213,746
577,516
38,644
616,160
-
3,209,279
842,767
4,052,046
6,240,412
1,039,587
(220,444)
819,143
(368,266)
Gain (Loss) from disposal of capital assets
- -
-
42,872
Interest income
11,510 553
12,063
18,301
Interest expense
(8,453) -
(8,453)
-
TOTAL NON -OPERATING REVENUES (EXPENSES)
3,057 553
3,610
61,173
INCOME (LOSS) BEFORE TRANSFERS
1,042,644 (219,891)
822,753
(307,093)
Bond proceeds -
Capital contributions -
Transfers in 403,895
Transfers out (382,476)
- - 69,227
116,000 519,895 168,000
- (382,476) (547,164)
CHANGE IN NET POSITION 1,064,063 (103,891)
NET POSITION - BEGINNING 52,771,356 3,445,357
NET POSITION - ENDING S 53,835,419 S 3,341,466
Adjustment to reflect the consolidation of internal service fund activities related to enterprise
CHANGES IN NET POSITION OF BUSINESS -TYPE ACTIVITIES
960,172 (617,030)
32,399,180
S 31,782,151
(17,931)
S 942,241
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 34
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For Year Ended December 31, 2013
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 PROVIDEWUSED 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
$ 3,451,132 $
682,778
$ 4,133,911
$ 5,774,674
-
-
-
(552,149)
(438,150)
(301,302)
(739,452)
(1,936,814)
(1,461,032)
(309,504)
(1,770,536)
(739,214)
(577,516)
(38,644)
(616,161)
(181,374)
(380)
(181,754)
(765,805)
1,023,808
-
1,023,808
97,477
1,816,868
32,948
1,849,816
1,878,170
403,895
116,000
519,895
168,000
(382,476)
-
(382,476)
(547,164)
21,419
116,000
137,419
(379,164)
(182,359)
-
(182,359)
(8,453)
(8,453)
(834,906)
(3,826)
(838,732)
(939,419)
42,872
(1,025,718)
(3,826)
(1,029,544)
(896,547)
11,505
555
12,061
18,299
11,505
555
12,061
18,299
824,074
145,678
969,751
620,759
5,471,812
334,329
5,806,141
17,058,367
6,295,886
480,007
6,775,892
17,679,126
1,039,581
(220,443)
819,138
(368,258)
499,883
181,997
681,880
2,213,746
(35,564)
7,958
(27,606)
-
228,984
-
228,984
-
16,069
10,054
26,123
31,446
32,452
-
32,452
-
-
(974)
(974)
32,659
52,495
85,154
-
2,804
1,861
4,665
1,237
777,287
253,391
1,030,678
2,246,429
$ 1,816,868 $
32,948
$ 1,849,816
$ 1,878,171
$ 69,227
The notes to the financial statements are an integral part of this statement.
NOTES TO THE BASIC FINANCIAL STATEMENTS
December 31, 2013
INDEX
Note Page
1
Summary of Significant Accounting Policies...............................................................................
36
ReportingEntity...................................................................................................................
36
Government -wide and Fund Financial Statements...............................................................
36
Measurement Focus, Basis of Accounting, and Financial Statement Presentation ..............
37
Financial Statement Presentation.........................................................................................
40
BudgetaryInformation.........................................................................................................
40
Assets, Liabilities, Fund Balance and Net Position..............................................................
41
Cashand Investments..................................................................................................
41
Receivables..................................................................................................................
42
Amounts Due to and from Other Funds; Interfund Loans ...........................................
42
Inventories...................................................................................................................
42
CapitalAssets..............................................................................................................
42
Compensated Absences Payable..................................................................................
43
Long -Term Liabilities..................................................................................................
43
Fund Balance Classification........................................................................................
44
InterfundTransactions.................................................................................................
45
2
Reconciliation of Government -wide & Fund Financial Statements ..............................................
46
3
Stewardship, Compliance and Accountability..............................................................................
46
4
Supplemental Appropriations.......................................................................................................
46
5
Deposits and Investments..............................................................................................................
47
6
Receivables, Due from Other Governments & Unearned Revenues .............................................
49
7
Due To Other Governments..........................................................................................................
50
8
Capital Assets...............................................................................................................................
51
9
Pension Plans................................................................................................................................
53
10
Risk Management.........................................................................................................................
60
11
Long -Term Liabilities...................................................................................................................
60
12
Interfund Transactions..................................................................................................................
63
13
Contingencies and Litigation........................................................................................................
65
14
Joint Ventures...............................................................................................................................
65
15
Accounting and Reporting Changes..............................................................................................
67
16
Subsequent Event..........................................................................................................................
68
17
Prior Year Adjustments.....................................................................................
68
City of Federal Way / 36
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended December 31, 2013
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.
I;��1Z�7So0le[eioleo IIM
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 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.
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.
City of Federal Way / 37
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.
Governmental Funds
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 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 utility tax fund. The major sources of revenues for these
funds are general obligation bond proceeds, grants from other agencies, local taxes and contributions from other
funds.
City of Federal Way / 38
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 Statement of Net Position.
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 defmition 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 revenues and expenses related to the acquisition,
capital improvements maintenance and operations of the City -owned Dumas Bay Centre and Knutzen Family
Theatre. The Dumas Bay Centre is primarily used for meetings, events, lodging, and catering services.
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 owns and depreciates all non-
proprietary fund assets related to these functions, and charges equipment/software users for both maintenance and
operating costs and equipment replacement charges based on depreciation schedules.
Support Services Fund — This fund accounts for duplication, graphics and other general support services provided to
departments and funds throughout the City.
City of Federal Way / 39
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 are charged to City departments and funds.
Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized and reported in the financial
statements.
The accrual basis of accounting is used by proprietary funds. Under this method, revenues are recognized when earned, and
expenses are recognized when incurred.
The modified accrual basis of accounting is used by governmental funds. Revenues and other financial resources are
recognized when they become susceptible to accrual, i.e., when the related funds become both measurable and available to
finance expenditures of the current period. To be considered "available", revenue must be collected during the current period
or soon enough thereafter to pay current liabilities. The City uses thirty days when evaluating the available criteria to accrue
revenues except for proprietary funds.
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 Reporting
Standards, revenues for cost reimbursement grants are determined to be earned and, therefore, available at the time related
expenditures are incurred. For this reason, grant revenues to be received as reimbursement for expenditures incurred in the
current year are also recognized as revenue in that year.
Shared Revenues - Revenues that have been collected, but not remitted by an intermediary collection agency to the City, are
considered measurable and available.
Other Revenue Sources - Other items recognized as revenue in the current year on the modified accrual basis include
investment interest earned but not received at year end; 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.
City of Federal Way / 40
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 2013 should be read in conjunction with the government's financial statements for the year ended
December 31, 2012.
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
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 biennial 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.
City of Federal Way / 41
Two public hearings on the proposed budget are also held during November and December. Final hearings on the
budget must begin on or before the first Monday of December, and may continue until the 25th day prior to beginning of
the next fiscal year.
By December 31, the City Council makes its adjustments to the proposed budget and adopts a final budget by ordinance.
The final operating budget, as adopted, is published and distributed within the first three months of the following year.
Copies of the adopted budget are made available to the public.
Amending the Budget
The 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 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. Below is a schedule of encumbrances by major funds and aggregated non -major funds.
SCBMULE OF ENCUMBRANCES BY FUNDS AND FUND CATEGORY
AS OF DECEMBER 31, 2013
FUND
TYPE
ENCUMBRANCES
General Fund
Major $
2,749,027
Street Fund
Major
329,399
Capital Proj Fund -Streets
Major
5,539,042
Surface Water Management
Major
705,558
Dumas Bay Centre
Major
310,132
Non -Major Funds
Non -Major
1,408,145
Total
$
11,041,303
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, 2013, the State
Treasurer was holding $61,754,698 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.
City of Federal Way / 42
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, 2013, the total cash and cash equivalents were
$72,722,150.
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.
Amounts Due to and from Other Funds; Interfund Loans
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as 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 restricted 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 and estimated
economic useful life of one year or more. 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.
City of Federal Way / 43
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
HeavyTrucks ............................................... ............
8-10
Land Improvements......................................................20
Buildings.....................................................................20
Storm Drainage Systems.................................................20
Infrastructure ............................................... ..........
15-100
Compensated Absences Payable
The City records a liability for all outstanding vacation pay and accrued compensatory time. In governmental funds, vacation
pay and compensatory time is recorded as expenditures when paid which occurs when used or upon termination. In the
entity -wide statements and the proprietary fund statements, vacation pay and compensatory time is recorded as a liability and
expense in the year earned.
Employee vacation leave is accumulated monthly at rates ranging from 12 to 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.
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.
City of Federal Way / 44
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.
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.
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. The minimum fund balance
established by the Budget Policies which states "The City shall establish fund balance target of seven percent of the City's
General Fund operating expenditures. The purpose of the ending fund balance is to provide financial stability, cash flow for
operations and the assurance that the City will be able to respond to revenue shortfalls with fiscal strength." General fund
expenditures at 12/31/2013 were $39,126,451 and Unassigned General fund balance at year -ended 2013 was $16,003,076.
City of Federal Way / 45
2013 F[JND BALANCE CLASSIFICATION
FundBalance
General
Fund
Utility Debt Downtown
Street
Tax Service Redevelop.
Transport-
anon
Nonmajor
Gov't
Total
Nonspendable:
Court trust
$ 52,779
$ $ - $ $
$
$
$ 52,779
Prepaid 'insurance/debt service
23,759
-
23,759
Restricted for:
Police covert/seizure
39,081
-
39,081
Future debt payments
-
- 2,018,627
-
2,018,627
Special Contracts/Studies
- -
357,019
357,019
Hotel/Motel Lodging Tax
-
227,034
227,034
Path & Trails Reserves
162,439
162,439
Comm. Development Block Grant
40,715
40,715
Downtown Redevelopment
2,551,558
-
2,551,558
City Facilities CIP
-
201,280
201,280
Parks CIP
1,961,217
1,961,217
Transportation CIP
8,747,422
-
8,747,422
Committed to:
Capital, debt, and operations
-
2,622,107 3,229,709
-
5,851,816
Petty cash/advance travel
21,600
- -
21,600
Proposition 1
-
1,045,433
-
1,045,433
Transportation CIP
- -
4,447,433
4,447,433
Downtown Redevelopment
410,965
-
410,965
City Facilities CIP
-
481,161
481,161
Arterial Street
159,532
159,532
Solid Waste/Recycling
-
211,761
211,761
2% for the Arts
293
-
293
Federal Way Community Center
-
1,597,512
1,597,512
Traffic Safety
2,804,483
2,804,483
Snow/ice removal
100,000
-
100,000
Parks CIP
-
472,279
472,279
Unassigned:
General Fund
16,003,076
-
-
16,003,076
Total Fund Balance:
$ 16,140,587
$100,000 $ 3,667,540 $ 5,248,336 $ 2,962,523
$ 13,194,855
$ 8,676,432
$ 49,990,273
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. Interf ind services provided and used
are equivalent to buying goods or services from an outside vendor, and are accounted for by the related funds as revenues,
expenditures or expenses. Interfund reimbursements are repayments to a fund for expenditures or expenses that belong to
another fund. They involve only expenditure or expense accounts. The transfers are accounted for as 'other financing
sources and uses" and are therefore included in the operating statements.
City of Federal Way / 46
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 $29,002,727 difference are as follows:
Bonds Payable at beginning of year $ 27,616,950
Plus: Inclusion of compensated absences 1,577,612
Less: Current year reduction of principal portion of debt (191,836)
Net Adjustment to reduce fund balance -total governmental
funds to arrive at net position - governmental activities $ 29,002,726
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 $4,259,380 difference are as follows:
Capital outlay
$ 9,095,690
Less: Governmental depreciation expense
(6,152,767)
Plus: Increase investment in joint venture
1,316,457
Net adjustment to increase net changes in fund balances -
Total governmental funds to arrive at changes in net position
ofgovernmental activities
$ 4,259,380
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:
'roperty taxes earned reported as unearned revenue in the fund statements $ (2,441)
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 $ (73,341)
NOTE 3 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
There have been no material violations of finance -related legal or contractual provisions, and there have been no expenditures
exceeding legal appropriations in any of the funds of the City.
NOTE 4 — SUPPLEMENTAL APPROPRIATIONS
Operating Budget Funds
Appropriations established during 2013 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.
City of Federal Way / 47
F[JND
ORIGINAL
BUDGET
2013
SUPPLEMENTAL
APPROPRIATIONS
FINAL BUDGET
General Fund $
42,546,624
$ 3,603,943
$ 46,150,567
Special Revenue Funds:
Street Fund
4,346,085
523,298
4,869,383
Arterial Street Fund
1,536,500
79,529
1,616,029
Utility Tax Fund
12,870,187
809,673
13,679,860
Solid Waste/Recycling Fund
470,294
41,777
512,071
Hotel/Motel Lodging Tax
195,300
102,416
297,716
Federal Way Community Center
2,224,910
90,664
2,315,574
Traffic Safety
1,075,040
878,754
1,953,794
Subtotal Special Revenue Funds:
22,718,316
2,526,111
25,244,427
Debt Service Fund
3,268,508
13,070,862
16,339,370
Total: $
68,533,448
$ 19,200,916
$ 87,734,364
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 2013 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, 2013, the equity in pooled cash and
investments was $72,722,150.
At year-end, the City had $72,722,150 in cash and cash equivalents which consisted of investments with the Local (LGIP)
Government Investment Pool of $61,754,698 the City's checking account bank balance prior to outstanding checks was
$10,673,240; and petty cash and change funds, advance travel fund and investigative fund totaling $48,860, and Court Trust
of $52,779. No deposits were uninsured or uncollateralized. Insurance coverage up to $250,000 is through federal
depository insurance and the Washington Public Deposit Protection Commission (WPDPC) covers amounts over $250,000.
Under State statute, members of WPDPC, a multiple -financial institution collateral pool, may be assessed on a prorated basis
if the pool's collateral is insufficient to cover a loss. Investments are 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 State Treasurer's Office administers the Washington State Local Government Investment Pool authorized under Chapter
43.250 RCW. The LGIP operates in a manner consistent with the SED Rule 2a-7. In its management of LGIP, the State
Treasurer adheres to the principles appropriate for the prudent investment of public funds. In priority order, they are the
safety of principal, the assurance of sufficient liquidity to meet cash flow demands.
City of Federal Way / 48
As of December 31, 2013 the City had the following investments and maturities:
SCHEDULEOFWVESTMENTS BY MATURITIES
AS OF DECEVIBER 31, 2013
Investment maturities
Less than 1 to 2 Greater than
Investment Type Book Value 1 year years 3 years
State Investment Pool $ 61,754,698 $ 61,754,698 $ - $ -
$ 61,754,698 $ 61,754,698 $ - $ -
Reconciliation of Government -Wide Statement of Net Position:
Key Bank checking account per books
$ 10,673,240
Petty cash/change fund/advance travel/investigative fund
48,860
Local Government Investment Pool
61,754,698
Municipal Court Trust on books
52,779
Subtotal cash and cash equivalents
72,529,577
Cash with escrow agent
192,573
Total cash and investments, Government -Wide
Statement of Net Position
$ 72,722,150
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 (LGIP); repurchase agreements; U.S. treasury obligations; U.S. government agencies; U.S. government -sponsored
corporations/instrumentalities; bankers' acceptances (secondary market domestic and foreign); commercial paper (secondary
market); insured certificates of deposit (banks and savings & loans); and uninsured/collateralized certificates of deposit
(banks and savings & loans).
The credit risk of the State Investment Pool is limited to obligations of the US Government, government sponsored
enterprises, or insured demand deposit accounts and certificates of deposit.
As of December 31, 2013, all City investments were in the LGIP. 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 in accordance with state law. No more than 30% of the portfolio may be
invested in bankers' acceptances and certificates of deposit."
City of Federal Way / 49
Other Information
Below is a schedule of investments by fund type:
S CHEDULE OF DWES TMENTS BY FIND CATEGORY AND INVES TMENT TYPE
AS OF DECEMBER 31, 2013
State Investment
Fund Type
Pool
Total
General Fund
$ 12,895,513 $
12,895,513
Special Revenue Funds
11,788,765
11,788,765
Capital Projects Funds
18,148,930
18,148,930
Enterprise Funds
3,858,599
3,858,599
Internal Services Funds
15,062,890
15,062,890
Total: $ 61,754,698 $
61,754,698
NOTE 6 — RECEIVABLES, DUE FROM OTHER GOVERNMENTS & UNEARNED REVENUES
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, 2013, the total balance of
property taxes receivable recorded by the City was $331,046. Of this, $305,048 is recorded as unearned revenues, since it
was not collected within the first 30 days of 2014.
Property taxes are recorded as a receivable when levied, offset by unearned revenues. 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 2013 was $1.42234 per $1,000 on an assessed valuation of $7,087,561,940 for a total regular levy
of $10,080,948.
City of Federal Way / 50
Unearned Revenues
The table below provides details of the unearned revenues 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.
UNEARNED REVENUES
AS OF DECEVIBER 31, 2013
Total
Surface
Dumas
Downtown Debt Nonmajor
General
Water
Bay
Total
Unearned Revenues
General
Street Redev. Service Gov't
Govt
Mgmt
Centre
Proprietary
Property tax
$ 321,273
$ $ (16,225) $ $
$ 305,048
$ -
$
$
SWM fees
-
-
147,289
147,289
Public Defender Grant
23,000
23,000
-
-
King County New Solution Grant
-
-
-
Commute Trip Reduction Grant
-
74,302 - -
74,302
-
South King Fire & Rescue Buy-
-
- - 66,318
66,318
-
-
In of ValleyCom
Recreation programs / facility
46,186
- - - 103,554
149,741
233,041
233,041
rentals
Total by Fund:
$ 390,460
$ 74,302 $ (16,225) $ 66,318 $103,554
$ 618,408
$ 147,289
$ 233,041
$ 380,330
Receivables & Due from Other Governments
The receivables for the fiscal year ended December 31, 2013 on the government -wide statement of net position are detailed in
the following schedule.
RECEIVABLES & DUE FROM OTHER GOVERNMENTS
AS OF DECF119BER 31, 2013
Receivable
General
Street Utility Tax
Debt Downtown
Service Redevelopment
Transport-
ation
Nonmajor
Godt
Proprietary
Total
Property tax
$ 347,249
$ $
$ - $ (16,203) $
$
$
$ 331,046
Real Estate Excise tax
-
424,985
424,985
Utility tax
-
1,448,358
-
1,448,358
Gambling tax
19,977
-
19,977
Recreation programs/
facilities
10,376
-
70,028
6,879
87,283
Grants & contributions
103,886
993,900
564,273
198,493
1,860,551
Otherreceivable
-
-
-
2,030
2,030
State Shared revenue
1,354,554
38,751 3,208
101,337
24,747
14,115
-
1,536,712
Surface Water
Management fees
- -
- -
-
-
158,559
158,559
Total by Fund: $1,836,042
$ 38,751 $ 1,451,566
$ 424,985 $ 85,134
$19018,647
$ 6489416
$ 3659960
$59869,503
NOTE 7 - DUE TO OTHER GOVERNMENTS.
At December 31, 2013, the City recorded $18,265 as due to other governmental unit as follows:
DUE TO OTHER GOVERNMENT
AS OF DECEMBER 31, 2013
Surface Water Mgmt.
King County - 2013 SWM collection fee $ 18,265
Total Business -Type Activities $ 18,265
City of Federal Way / 51
NOTE 8 — CAPITAL ASSETS
Capital assets activity for the year ended December 31, 2013 is as follows:
CAPITAL ASSETS
AS
OF DECEMBER 31, 2013
Governmental Activity
Beginning Balance
Additions
Deletions
Ending Balance
1/1/2013
12/31/2013
Capital Assets, not being depreciated:
Land
$ 303,565,575
$ 612,297
$ -
$ 304,177,872
Construction in progress
19,385,051
8,360,518
(13,365,081)
14,380,488
Total capital assets, not being depreciated:
322,950,626
8,972,815
(13,365,081)
318,558,360
Capital assets, being depreciated:
Buildings
17,167,172
100,945
-
17,268,117
Improvements other than buildings
43,865,580
-
-
43,865,580
Infrastructure
151,204,738
13,405,302
-
164,610,040
Machinery & equipment
15,989,701
990,356
(1,339,223)
15,640,834
Total capital assets, being depreciated:
228,227,191
14,496,603
(1,339,223)
241,384,571
Less accumulated depreciation for:
Buildings
(6,522,022)
(919,314)
-
(7,441,336)
Improvements other than buildings
(17,123,056)
(2,193,279)
-
(19,316,335)
Infrastructure
(37,191,796)
(3,943,615)
-
(41,135,411)
Machinery & equipment
(10,791,648)
(1,310,305)
1,339,223
(10,762,730)
Total accumulated depreciation:
(71,628,522)
(8,366,513)
1,339,223
(78,655,812)
Total assets being depreciated, net
156,598,669
6,130,090
-
162,728,759
Governmental activities capital assets, net
$ 479,549,296
$ 15,102,905
$ (139365,081)
$ 481,287,120
Business -Type Activities
Beginning Balance
Additions
Deletions
Ending Balance
1/1/2013
12/31/2013
Capital Assets, not being depreciated:
Land
$ 10,933,528
$ -
$ -
$ 10,933,528
Construction in progress
2,402,446
834,906
-
3,237,352
Total capital assets, not being depreciated:
13,335,974
834,906
-
14,170,880
Capital assets, being depreciated:
Buildings
3,600,864
-
-
3,600,864
Improvements other than buildings
47,972,459
-
-
47,972,459
Infrastructure
1,916,645
-
-
1,916,645
Machinery & equipment
118,374
3,826
-
122,200
Total capital assets, being depreciated:
53,608,341
3,826
-
53,612,167
Less accumulated depreciation for:
Buildings
(2,800,023)
(180,043)
-
(2,980,066)
Improvements other than buildings
(12,806,924)
(479,725)
-
(13,286,649)
Infrastructure
(119,808)
(19,166)
-
(138,974)
Machinery & equipment
(91,364)
(2,946)
-
(94,310)
Total accumulated depreciation:
(15,818,119)
(681,880)
-
(16,499,999)
Total assets being depreciated, net
37,790,222
(678,054)
-
37,112,168
Business -Type activities capital assets, net
$ 51,126,196
$ 156,852
$ -
$ 51,283,048
City of Federal Way / 52
At the end of 2013, 32 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, 2013, are as follows:
AS OF DECEMBER 31, 2013
Governmental Activities Projects
Construction
Remaining
in progress
Commitment
Downtown Redevelopment
$ 279,919
$ -
Major Facility Rehabilitation
231,109
56,149
Performing Arts Center
1,258,028
144,877
Regional Park Development
300,666
-
Parks - Playgrounds
15,400
-
Lakota Park
166,912
-
Hylebos Boardwalk Replacement
1,361,909
27,602
Sacajawea Park Masterplan
663,207
69,295
Trail and pedestrian access improvements
177,432
806,009
Laurelwood
40,460
161,984
Saghalie Track Improvements
111,523
18,885
S 320th St @ 20th Ave South
1,757,877
2,389,509
SW 312th ST @ SR509
308,203
1,264,019
loth Avenue SW / SW 344th St: SW Campus Drive - 21st Ave SW
252,301
66,230
1 st Ave South & South 28th Intersection
15,798
215,051
S 352nd Street Extension From SR-99 to SR-161
452,008
-
S 304th St @ 28th Ave S
58,333
357,898
South 356th St: SR99 - SR161
65,226
1,032,388
SR99 HOV Lanes Phase 5
299,593
4,383,676
SW 336th Way / SW 340th St: 26th PI SW - Hoyt Rd
52,312
212,693
21ST AVE SW @ SW 336TH ST
3,445,739
1,409,347
Citywide Flashing Yellow Lights Installation
156,280
-
SR 99 @ S 312th St
7,260
55,935
S 344th Way @ Weyerhaeuser Way S
281,685
12,371
SW 312th St & 14th Ave SW Lakota Safe Rt to School Imp
1,997,846
-
City Wide Safety Projects (Flashing Yellow Lights Installation)
102,939
260,261
Safety Improvement Projects - S320th Street from SR99 to I-5
49,871
208,129
Safety Improvement Projects - SR99 from S320th Street to S330th Street
39,683
134,317
S 320th Street - 1 lth PI South to 1-5 Limited Access Preservation Project
93,069
1,506,931
13th Ave SW: SW 314th St to SW 316th St Safe Route to School Improvements
26,449
243,670
14th Avenue S: S 308th Street - South 312th Street
84,447
680,553
School Zone Enhancements
227,004
-
Total governmental activities
$ 14,380,488
$ 15,717,779
City of Federal Way / 53
Depreciation expense was charged to functions/programs of the primary government as follows:
CAPITAL AS S EI'S DEPRECIATION BY TYPE
AS OF DECEMBER 31, 2013
Governmental and Internal Service Activities
General government
$ 364,754
Security of persons &property
1,113,162
Transportation
4,234,747
Physical environment
18,796
Economic environment
96,452
Health
30,986
Culture & recreation
2,507,616
Total Depreciation - Governmental Activities
I $ 8,366,512
Business -Type Activities
Utilities - Surface Water Management
Culture & recreation - Dumas Bay Centre
$ 499,883
181,997
Total Depreciation -Bus ines s -Type Activities
$ 681,880
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.
City of Federal Way / 54
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
City of Federal Way / 55
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
City of Federal Way / 56
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 1,176 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial
valuation date for the plans of June 30, 2013:
Retirees and beneficiaries receiving benefits
82,242
Terminated plan members entitled to but not yet receiving benefits
30,515
Active plan members vest
106,317
Active plan members nonvested
44,273
Total
263,347
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, 2013, are as
follows:
Members not particioatinz in JBM:
PERS Plan 1
PERS Plan 2
PERS Plan 3
Employer*
Employee
9.21%*
6.00%
9.21%
4.92%
9.21%**
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** Plan 3 defined benefit portion 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*
9.21 %*
9.21 %
9.21 %* *
Employee
12.26%
12.30%
7.50***
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** Plan 3 defined benefit portion 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
2013 $ 779 $ 775,972 $ 150,523
2012 $ 1,588 $ 708,790 $ 132,404
2011 $ 2,872 $ 623,807 $ 111,278
City of Federal Way / 57
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.
City of Federal Way / 58
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 374 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial
valuation date for the plans of June 30, 2013:
Retirees and beneficiaries receiving benefits
10,189
Terminated plan members entitled to but not yet receiving benefits
689
Active plan members vest
14,273
Active plan members nonvested
2,633
Total
27,784
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.
City of Federal Way / 59
The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2013 were:
LEOFF Plan 1 LEOFF Plan 2
Employer 0.18%* 5.23%**
Employee 0.00% 8.41 %
State N/A 3.45%
* The employer rates include the employer administrative expense fee currently set at 0.18%.
** The employer rate for ports and universities is 8.59%.
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
2013 $ - $ 574,682
2012 $ - $ 575,718
2011 $ - $ 577,434
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 2013, there were a total of 289 individuals covered by this system. As of the end of the year, 293 remained as active
employees of the City and four were drawing retirement benefits. The 27 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 2013 was $20,112,943 and total City payroll was $23,764,702. Actual City contributions for the year
were $1,152,128. Actual employee contributions were $1,395,512. 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, 2013 were $1,631,834.
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.
City of Federal Way / 60
NOTE 10 — RISK MANAGEMENT
The City uses the Risk Management Internal Service Fund to account for its risk financing activities. The City maintains
insurance against most normal hazards 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 claims, SIR, and a future general liability self-insurance program.
There were no settlements in excess of insurance for commercially insured activities for 1996 through 2013.
The following is a summary of coverage in force in 2013.
S CHEDULE OF INS URANCE IN FORCE
AS OF DECENBER 31, 2013
Company Poliev Period Details of Coverage LiabilityLimits
General liability (auto, general, police e & o,
$250,000 self -insured retention (SIR) with aggregate limits of
Brit
12/31/12-12/31/13
employment practices, & stop gap)
$10,000,000.
Crime/fidelity (employee theft, forgery or
alternation, on premises, in transit, money
Deductible rantes from$5,000 to $25,000 with single loss limits
Travelers
1/l/13-1/l/14
ordes and counterfeit money, computer crime,
ranging from $50,000 to $1,000,000.
fund transfer fraud and claims expense)
Philadelphia
1/l/13-1/1/14
Property coverage
$25,000 deductible with single loss limits of $36,897,057 for
buildings and $3,849,548 in contents.
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. The weekly payments to an employee range from $148 - $624
depending upon the wages earned. At December 31", 2013 the City had $1,685,026 in reserve.
IUnemnlovment compensation benefits 2012 2013 1
Unemployment reserve, Jan. 1st $ 1,407,110 $ 1,529,657
Unemployment compensation benefits 225,920 223,510
Claim payments during the year (103,373) (68,142)
(Unemployment reserve, Dec. 31st $1,529,657 $1,685,026
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 2013 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.
On March 4, 2013 the City issued $12,415,000 of general obligation refunding bonds par with an average interest rate of 2.67
percent to provide resources to purchase U.S. Government and State and Local Government Series security that were placed
in an irrevocable trust for the purpose of generating resources to advance refund on $12,310,000 of outstanding 2003 GO
Federal Way Community Center debt on December 1, 2013. As a result, the 2003 GO FWCC bonds are considered to be
defeased and the liability has been removed from the governmental activities column of the statement of net position. This
City of Federal Way / 61
advance refunding was undertaken to reduce total debt service payments over the next twenty one years by $2,322,943 and
resulted in an economic gain of $1,740,458. (Economic gain is the net present value of future savings between old and the
new debt).
The following schedules detail the long-term debt activity and balances of the City.
OUTSTANDING GENERAL OBLIGATION DEBT AND LONGTERM LIABILrrIFS - BY TYPE
DECEMBER 31, 2013
BondRafing
Issue
Maturity
Interest
Amount
Beginning
Amount
Amount
Ending
Description
Originally
Outstanding
Outstanding
at Issuance
Date
Date
Rate
Issued
Debt
Issued
Redeemed
Debt
Governmental Activities:
General Obligation Bonds:
2003 Limited/Community Center
AAA -Ins
Nov 15, 03
Dec 01, 33
4.676
$ 15,000,000
$ 12,310,000
$ -
$ 12,310,000
$ -
2013 Refund Ltd/Community Center
AAA -Ins
Dec 01, 13
Dec 01, 33
2.67
-
-
12,415,000
165,000
12,250,000
Subtotal GO Bonds:
-
-
-
15,000,000
12,310,000
12,415,000
12,475,000
12,250,000
Other Miscellaneous Debt-Intergovemmental:
2010 Limited/Valley Comm PDA
Al
Mar 05, 10
Dec 01, 15
3.00-4.00
1,065,000
647,000
-
215,000
432,000
2009 SCORE/Special Obligation Bond
Al/AA
Nov 04, 09
Jan 01, 39
3.00-6.62
14,659,950
14,659,950
325,550
14,334,400
Subtotal iriscellaneous:
-
-
15,724,950
15,306,950
540,550
14,766,400
Subtotal GO Bonds plus Misc.
30,724,950
27,616,950
12,415,000
13,015,550
27,016,400
Compensated absences
1,503,034
1,593,833
1,519,255
1,577,612
Subtotal GO bonds, misc. & comp absences:
-
-
30,724,950
29,119,984
14,008,833
14,534,805
28,594,012
Business -Type Activities:
Public Works Trust Fund Loan:
PWTL -Kitts Corner Drain Imp
Aug 31, 94
Jul 01, 14
1.00
233,316
14,631
-
12,936
1,695
PWTL-Kitts Comer Drain hnp
Jul 24,96
Jul 01,14
1.00
1,166,580
132,835
64,680
68,155
PWTL -Kitts Comer Drain Imp
Sep 04, 97
Jul 01, 14
1.00
155,544
25,013
8,624
16,389
PWTL- SeaTac Mall Drain Imp
May 31, 00
Jul 01, 19
1.00
412,500
112,140
16,020
96,120
PWTL- SeaTac Mall Drain Imp
Aug 14, 00
Jul 01, 19
1.00
2,062,500
560,698
80,099
480,599
SubtotalPWTFL
-
-
4,030,440
845,317
-
182,359
662,958
Compensated absences
-
67,066
71,759
67,092
71,733
SubtotalPWTFLpIus compensated absences:
4,030,440
912,383
71,759
249,451
734,691
Grand Total All Long -Term Debt:
$ 34,755,390
$ 30,032,367
$ 14,080,592
$ 14,784,256
$29,328,703
OUTSTANDING GENERAL OBLIGATION DEBT AND LONG-TERM LIABILITIES - BY FUND
DECEMBER 31, 2013
Amount
Beginning
Amount
Amount
Ending
Due within
Description
Originally
Outstanding
Issued
Redeemed *
Outstanding
one year
Issued
Debt
Debt
Governmental Long -Term Debt:
General Obligation Bonds:
2003 Limited/Community Center
$ 15,000,000
$ 12,310,000
$ -
$ 12,310,000
$ -
$ -
2013 Refund Ltd/Community Center
-
-
12,415,000
165,000
12,250,000
445,000
Subtotal GO Bonds:
15,000,000
12,310,000
12,415,000
12,475,000
12,250,000
445,000
Other Miscellaneous Debt-Intergovermnental:
2010 Limited/Valley Comm. PDA
1,065,000
647,000
-
215,000
432,000
212,000
2009 SCORE/Special Obligation Bond
14,659,950
14,659,950
325,550
14,334,400
331,500
Subtotal miscellaneous:
15,724,950
15,306,950
-
540,550
14,766,400
543,500
Subtotal GO Bonds plus Misc.
30,724,950
27,616,950
12,415,000
13,015,550
27,016,400
988,500
Compensated absences
-
1,503,034
1,593,833
1,519,255
1,577,612
101,763
Subtotal GO bonds, misc. & comp, absences:
30,724,950
29,119,984
14,008,833
14,534,805
28,594,012
1,090,263
Business -Type Activities:
Enterprise Funds:
Public Works Trust Fund Loan
4,030,440
845,317
-
182,359
662,958
182,359
Subtotal Bus -Type Long -Term Debt
4,030,440
845,317
-
182,359
662,958
182,359
Compensated absences
-
67,066
71,759
67,092
71,733
4,304
Total Bus -Type plus comp. absences LTD:
4,030,440
912,383
71,759
249,451
734,691
186,663
Grant Total All Long -Term Debt:
$ 34,755,390
$ 30,032,367
$ 14,080,592
$ 14,784,256
$ 29,328,703
$ 1,276,926
*Debt service principal payments in Debt Service Fund include credits of $30, 732 from Interlocal agreement with Federal Way Fire District to participate
in capital cost obligations with Valley Communications joint venture with the City of Federal Way.
City of Federal Way / 62
S CHEDULE OF CHANGES IN LONG-TERM LIABILITIES
PERIOD ENDED DECEVIBER 31, 2013
Beginning
Ending
Outstanding
Additions
Reductions
Outstanding
Debt
Debt
Governmental Activities:
General Obligation Bonds
$ 12,310,000
$ 12,415,000
$ (12,475,000)
$ 12,250,000
Other -intergovernmental debt
15,306,950
-
(540,550)
14,766,400
Compensated absences
1,503,034
1,593,833
(1,519,255)
1,577,612
Total Governmental Activities
29,119,984
14,008,833
(14,534,805)
28,594,012
Business -Type Activities:
Enterprise Funds
Public Works Trust Fund Loan
845,317
-
(182,359)
662,958
Compensated absences
67,066
71,759
(67,092)
71,733
Total Business -Type Activities
912,383
71,759
(249,451)
734,691
Total All Funds
$ 30,032,367
$ 14,080,592
$ (14,784,256)
$ 29,328,703
SCHEDULE OF DEBT SERVICE REQUIRIIVIFNTS TO MATURITY
AS OF DECEMBER 31, 2013
Government Activities
Business -Type Activities
General Governmental Debt
Public Work Trust Fund
Grand Total
Year
Principal
Interest
Principal
Interest
Principal
Interest
P&I
2014
$ 988,500
$ 963,809
$ 182,359
$ 6,630
$ 1,170,859
$ 970,438
$ 2,141,297
2015
1,013,300
936,160
96,120
4,806
1,109,420
940,966
2,050,386
2016
821,050
900,488
96,120
3,845
917,170
904,333
1,821,502
2017
849,650
871,727
96,120
2,884
945,770
874,610
1,820,380
2018
880,800
842,784
96,120
1,922
976,920
844,707
1,821,626
2019
907,700
815,215
96,120
961
1,003,820
816,176
1,819,996
2020-2024
5,068,850
3,570,209
-
-
5,068,850
3,570,209
8,639,059
2025-2029
6,034,750
2,652,262
-
-
6,034,750
2,652,262
8,687,012
2030-2034
6,410,050
1,486,661
-
-
6,410,050
1,486,661
7,896,711
2035-2039
1 4,041,750
1 449,151
1 -
-
1 4,041,750
449,151
1 4,49Q901
Total
1 $ 27,016,400
1 $ 13,488,465
1 $ 662,957
$ 21,048
1 $ 27,679,357
1 $13,509,512
1 $ 41,188,870
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'/2 percent of the value of all taxable property within the City. State law requires all property to be
assessed at 100 percent of its true and fair value. Unlimited tax general obligation debt requires an approving vote of the
people, and any election to validate such general obligation debt must have a voter turnout of at least 40 percent of those who
voted in the last State general election and of those voting; 60 percent must be in the affirmative. The City Council may, by
ordinance, authorize the issuance of limited tax general obligation debt in an amount up to 1.5% of the valuation within the
City without a vote of the people. No combination of limited or unlimited tax debt may exceed 7'/z 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, 2013 are:
General government (no vote required) $ 84,940,327
General government (3/5 majority vote required) 73,336,279
Parks and open space (3/5 majority vote required) 183,340,698
Utilities (3/5 majority vote required) 183,340,698
Total Capacity $ 524,958,002
City of Federal Way / 63
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 $ 101,763
Noncurrent portion 1,475,849
Business -Type Activities:
Current portion 3,287
Noncurrent portion 68,446
Total Compensated absences $ 1,649,345
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, 2013 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 $3,000 for the year ended December 31, 2013. 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:
2014 $
3,000
2015
1,500
Total: $
4,500
NOTE 12 — INTERFUND TRANSACTIONS
Interfund transfers for the year ended December 31, 2013 were as follows:
Interfund Transfers
In
Out
Governmental Funds:
General Fund
$ 9,041,259
$ 1,920,921
Street Fund
2,598,921
-
Utility Tax Fund
-
13,528,772
Debt Service
2,530,224
1,572,000
CDBGFund
-
25,373
Transportation
1,825,000
82,000
Nonmajor Governmental Funds
2,977,449
1,602,040
Proprietary Funds:
Surface Water Management
403,895
382,476
Dumas Bay Centre
116,000
-
Internal Service Funds
168,000
547,164
Total:
$19,660,747
$19,660,747
City of Federal Way / 64
The following describes the amounts transferred out during 2013:
General Fund:
• $1,868,921 to Street Fund to subsidize street maintenance and operations
• $23,000 to Information Systems Fund for public defenders case management system
• $25,000 to Federal Way Community Center for use of facilities by General Parks and Recreation
• $4,000 to Dumas Bay Center for pump station
Utility Tax Fund:
• $2,877,100 to General Fund for Proposition 1 for Public Safety and Community Programs Funding
• $917,000 for SCORE
• $1,613,224 to Federal Way Community Center Debt Service
• $998,000 to Arterial Street Fund overlay program
• $607,000 to General Fund for Public Safety Positions
• $224,000 to General Fund for Celebration Park maintenance & operations
• $368,000 to Street Fund for maintenance and operations on bond projects
• $112,000 to Dumas Bay Centre Fund for Knutzen Family Theatre subsidy
• $73,337 to General Fund for Arts Commission
• $22,663 to General Fund for Red, Whites & Blues Festival
• $48,000 to General Fund for new Parks maintenance and operations
• $794,449 to Federal Way Community Center for maintenance/operations and capital reserves
• $3,893,000 to General Fund for ongoing support of operations
• $83,000 to Transportation CIP project S356th St: SR99-161
• $598,000 to Transportation CIP project SR99 HOV Lanes Phase V
• $300,000 to Downtown Redevelopment CIP project
Debt Service Fund:
• $100,000 of Real Estate Excise Tax to Major Parks Facilities Maintenance
• $200,000 of Real Estate Excise Tax to Lakota Soccer Field Upgrade
• $917,000 of Real Estate Excise Tax to S 356"' St: SR99-161
• $355,000 of Real Estate Excise Tax to Performing Arts Center for schematic Designing
Proprietary Funds:
• $144,476 from Surface Water Management CIP to Surface Water Management Operations
• $238,000 from Surface Water Management Operations to Surface Water Management CIP for Small Projects
Internal Service:
• $40,000 from Risk Management to General Fund for Court Security
• $87,651 from Information System to General Fund for excess reserves
• $76,587 from Mail/Duplication to General Fund for excess reserves
• $321,507 from Fleet/Equipment to General Fund for excess reserves
• $21,419 from Fleet/Equipment to General Fund for excess reserves
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
• $200,000 from Traffic Safety Fund to General Fund for support of 2.0 FTE police offers
• $45,040 from Traffic Safety Fund to General Fund for support of replacement of Total Station
• $330,000 from Traffic Safety Fund to Street Fund for support of Traffic Services
• $227,000 from Traffic Safety Fund to Street Fund for CIP School Zone Enhancements
• $25,373 from CDBG Fund to General Fund for Recreation Inclusive Coordinator
• $32,000 from Transportation CIP to Street for minor equipment purchase
• $50,000 from Transportation CIP to Arterial Street for overlay projects
• $155,000 from Paths & Trails Fund to Parks CIP Trail and Pedestrian Access Improvements
0 $145,000 from Special Contracts/Studies to Information System for Public Defenders Case Management System
City of Federal Way / 65
Interfund loans for the year ended December 31, 2013 were as follows:
Interfund Loans Receivable Payable
General Fund $ 304,328 $ -
Special Revenue Funds:
Community Development Block Grant - 304,328
Total Interfund Loans $ 304,328 $ 304,328
NOTE 13 — CONTINGENCIES AND LITIGATION
As of December 31, 2013 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 2013 cost distributions for the five member cities are as
follows:
Dispatchable Percent
City Calls of Total
Kent 97,579 28.28%
Renton
72,740
21.18%
Auburn
71,881
19.30%
Tukwila
34,192
9.90%
Federal Way
75,073
21.34%
Total 351,465 100.00%
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.
City of Federal Way / 66
In addition, an Operating Board was established and consists of two members of each participating City's Public Safety
Departments, including the heads of such departments or their designees. The Operating Board performs the following
functions: 1) Oversees the general operation of Valley Com, and advises and makes recommendations to the Administration
Board; 2) Make recommendations on Director selection; 3) Presents proposed policies and budgets to the Administration
Board; and 4) Reviews disbursements of funds by the Director.
The Director presents a proposed budget to the Operating Board on or before August 15 of each year. Said budget is then
presented to the Administrative Board by September 1 of each year. The Administration Board can make changes to the
proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each member city, in
accordance with the provisions of the interlocal agreement.
In May 1993 Valley Com entered into an agreement with King County to provide joint project management for the
acquisition and installation of 800-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 2013
Kent
Renton
Auburn
Tukwila
Federal Way
Total
Equity @ January 1, 2013 $
7,139,778
$ 5,062,434
$ 4,783,577
$ 2,843,407
$ 3,324,584
$ 23,153,780
Current year increase
239,013
178,173
176,069
83,751
183,886
860,892
Equity @ December 31, 2013 $
7,378,791
$ 5,240,607
$ 4,959,646
$ 2,927,158
$ 3,508,470
$ 24,014,672
Percent of equity
30.73%
21.82%
20.65%
12.19%
14.61%
100.00%
Prior year's percent of equity
30.84%
21.86%
20.66%
12.28%
14.36%
100.00%
A complete set of financial statements is available from:
Valley Communications Center, 27519 108t' Avenue SE, Kent, WA 98030
South Correction Entitv (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 Host City Agreement. Pursuant to SCORE financial policies, all
unexpected funds or reserve funds shall be distributed based on the percentage of the Member City's average daily
population at the SCORE Facility for the last three (3) years regardless of their Owner City or Host City status.
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 was 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
City of Federal Way / 67
credit of the Cities of Auburn, Burien Federal Way, Renton, SeaTac, and Tukwila. 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:
Summary of Debt Service Requirements
Debt Service Schedule
Debt Service Allocation to Owner Cities
35 % BABs
Auburn
Burien
Federal Way
Renton
SeaTac
Tukwila
Year
Principal
Interest
Subsidy
Total
31%
4%
18%
36%
3%
8%
2014
1,950,000
5,066,566
(1,654,975)
5,361,591
1,662,093
214,464
965,086
1,930,173
160,948
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
2,240,000
4,715,979
(1,621,980)
5,333,999
1,653,540
213,360
960,120
1,920,240
160,020
426,720
2019-2023
12,435,000
21,771,988
(7,583,953)
26,623,035
8,253,141
1,064,921
4,792,146
9,584,293
798,691
2,129,843
2024-2028
15,060,000
17,809,677
(6,398,978)
26,470,699
8,205,917
1,058,828
4,764,726
9,529,452
794,121
2,117,656
2029-2033
18,475,000
12,403,424
(4,553,914)
26,324,510
8,160,598
1,052,980
4,738,412
9,476,824
789,735
2,105,961
2034-2038
22,795,000
5,605,241
(2,225,755)
26,174,486
8,114,091
1,046,979
4,711,407
9,422,815
785,235
2,093,959
2039
5,165,000
170,858
(119,601)
5,216,257
1,617,040
208,650
938,926
1,877,853
156,488
417,301
Total
$ 84,320,000
$ 82,270,929
$ (29,046,710; $ 137,544,219
$ 42,638,709
$ 5,501,767
$ 24,757,959
$ 49,515,922
$ 4,126,327
$11,003,539
*Of the $24,757,959 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, 2013 related to SCORE:
South Correction Entity (SCORE)
2013 Owner Cities Equity Allocation
Member
Percent of
2012
2013
city
Equity
Equity Balance
Distribution Equity Balance
Auburn
31.00%
$ 1,368,859
$ 1,148,378 $ 2,517,237
Burien
4.00%
176,627
117,696 294,323
Des Moines
1.00%
-
107,970 107,970
Federal Way
22.00%
794,820
1,026,120 1,820,940
Renton
31.00%
1,589,644
958,575 2,548,219
SeaTac
4.00%
132,469
199,239 331,708
Tukwila
1 7.00%
353,254
248,680 601,934
Total
1 100.00%1
$ 4,415,673
1 $ 3,806,658 $ 8,222,331
A complete set of financial statements is available from: SCORE, 20817 17th Avenue South, Des Moines, WA 98198.
Joint Venture Reconciliation to Government Wide Financial Statements
Balance Balance
1/1/2013 Additions Reductions 12/31/2013
Valley Communications Public Development Authority $ 647,000 $ - $ (215,000) $ 432,000
SCORE Public Development Authority 14,659,950 - (325,550) $ 14,334,400
Total Due to Other Governmental Units 15,306,950 - (540,550) 14,766,400
Valley Communications Center 3,324,584 183,886 - 3,508,470
South Correctional Entity (SCORE) 794,820 1,026,120 - 1,820,940
Total Joint Venture Capital Assets 4,119,404 1,210,006 - 5,329,410
Total Investment in Joint Ventures $ 19,426,354 $1,210,006 $ (540,550) $ 20,095,810
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 Ouflows 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
City of Federal Way / 68
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. City didn't record any deferred outflows or inflows of resources.
For the Government -wide Statement of Activities the accounting approach to classify categories in Charges for Services has
changed from the prior year. Therefore the categories may not be comparable to the prior year.
NOTE 16 — SUBSEQUENT EVENT
On January 1, 2014, the City elected to self -funding medical and prescription plan to avoid 2014 projected increase of
15.89% for the City's health insurance premium. Title 48.62 of the Revised Code of Washington authorizes cities to establish
a self -funded medical and prescription program. The City Council has determined that a self -funded benefit program
provides an avenue for better controlling healthcare costs, and adopted resolution to establish a Claim Stabilization Reserve
of $315,000 in 2014 and $335,000 at the end of 2015 to cover the Healthcare Actuary opined and State accepted to fund an
Incurred But Not Reported claim liability. This action would likely to reduce the projected healthcare costs increases in 2015
and 2016 to approximately 6.2% - 7%.
NOTE 17 — PRIOR PERIOD ADJUSTMENTS
Governmental -type activity prior period adjustments of $3,358,477 are required for construction in progress and include
adjustments for South 320th Street at I-5 Southbound Ramp of $3,128,090 construction in progress that started in 2010, and
for Mark Twain Elementary Safe Route to Schools of $230,387 that started in 2010. These two projects were not fully
owned by the City of Federal Way and therefore construction in progress should not be capitalized on the City of Federal
Way's financial statements.
Beginning
Adjusted
Ending
Balance
Prior Period
Beginning
Balance
Governmental Activity
1/1/2013
Adjustment
Balance
Additions
Deletions
12/31/2013
Capital assets, not being depreciated:
Land
$ 303,565,575
$ -
$ 303,565,575
$ 612,297
$ -
$ 304,177,872
Construction in progress
22,743,528
(3,358,477)
19,385,051
8,360,518
(13,365,081)
14,380,488
Total capital assets, not being depreciated:
326,309,103
(3,358,477)
322,950,626
8,972,815
(13,365,081)
318,558,360
Capital assets, being depreciated
Buildings
17,167,172
-
17,167,172
100,945
-
17,268,117
Improvements other than buildings
43,865,580
-
43,865,580
-
-
43,865,580
Infrastructure
151,204,738
-
151,204,738
13,405,302
-
164,610,040
Machinery and equipment
15,989,701
-
15,989,701
990,356
(1,339,223)
15,640,833
Total capital assets, being depreciated:
228,227,191
-
228,227,191
14,496,603
(1,339,223)
241,384,570
Less accumulated depreciation for:
Buildings
(6,522,022)
-
(6,522,022)
(919,314)
-
(7,441,336)
Improvements other than buildings
(17,123,056)
-
(17,123,056)
(2,193,279)
-
(19,316,335)
Infrastructure
(37,191,796)
-
(37,191,796)
(3,943,615)
-
(41,135,411)
Machinery and equipment
(10,791,648)
-
(10,791,648)
(1,310,305)
1,339,223
(10,762,730)
Total accumulated depreciation:
(71,628,522)
-
(71,628,522)
(8,366,513)
1,339,223
(78,655,812)
Total assets being depreciated, net 156,598,669 - 156,598,669 6,130,090 - 162,728,758
Governmental activities capital assets, net $ 482,907,773 $ (3,358,477) $ 479,549,296 $ 15,102,905 $ (13,365,081) $ 481,287,119
City of Federal Way / 69
Combining Statement — Nonmajor Governmental Funds' Description
For the Year Ended December 31, 2013
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 Hotel/Motel Lodging Tax Fund was established to account for all lodging tax receipts and disbursements related to
tourism promotion and acquisition and/or operation of tourism -related facilities.
The 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. -
City of Federal Way / 70
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2013
ASSETS
Equity in pooled cash & investments
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND
Liabilities:
Vouchers payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Fund Balance:
Restricted
Committed
TOTAL FUND BALANCES
Special Capital
Revenue Projects Total
$ 5,724,575 $ 3,176,297 $ 8,900,872
70,028
- 70,028
617,137
- 617,137
6,411,740
3,176,297 9,588,037
350,195
60,136 410,331
77,588
223 77,811
15,581
- 15,581
304,328
304,328
103,554
- 103,554
851,246
60,359 911,605
787,207
2,162,498
2,949,705
4,773,287
953,440
5,726,727
5,560,494
3,115,938
8,676,432
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 6,411,740 $ 3,176,297 $ 9,588,037
City of Federal Way / 71
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2013
ASSETS
Equity in pooled cash & investments
Receivables (net):
Taxes
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Arterial Solid Waste
Street Recycling
$ 198,368 $ 164,242 $
38,751 79,421
237,119 243,663
- 31,902
77,588 -
77,588 31,902
Special
Contracts/ Hotel/Motel
Studies Lodging Tax
357,018 $ 226,854
- 13,380
357,018 240,234
13,200
13,200
Fund Balance:
Restricted - - 357,018 227,034
Committed 159,531 211,761 - -
TOTAL FUND BALANCES 159,531 211,761 357,018 227,034
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 237,119 $ 243,663 $ 357,018 $ 240,234
City of Federal Way / 72
ASSETS
Equity in pooled cash & investments
Receivables (net):
Taxes
Accounts and contracts
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2013
Federal way Community
Community Traffic Development
Center Safety
$ 1,705,654 $ 2,910,585 g
Paths and
Trails
Reserve Total
150 $ 161,704 $ 5,724,575
70,028 - - - 70,028
- - 484,849 736 617,137
1,775,682 2,910,585 484,999 162,440 6,411,740
59,035 106,102 139,956
15,581 - -
- - 304,328
103,554 - -
178,170 106,102 444,284
- 350,195
- 77,588
- 15,581
- 304,328
- 103,554
851,246
Fund Balance:
Restricted - - 40,715 162,440 787,207
Committed 1,597,512 2,804,483 - - 4,773,287
TOTAL FUND BALANCES 1,597,512 2,804,483 40,715 162,440 5,560,494
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 1,775,682 $ 2,910,585 $ 484,999 $ 162,440 $ 6,411,740
City of Federal Way / 73
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2013
City
Facilities Parks Total
ASSETS
Equity in pooled cash & investments $ 682,442 $ 2,493,855 $ 3,176,297
TOTAL ASSETS 682,442 2,493,855 3,176,297
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
TOTAL LIABILITIES
60,136 60,136
60,359 60,359
Fund Balance:
Restricted
201,281
1,961,217
2,162,498
Committed
481,161
472,279
953,440
TOTAL FUND BALANCES
682,442
2,433,496
3,115,938
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $
682,442
$ 2,493,855
$ 3,176,297
City of Federal Way / 74
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For Year Ended December 31, 2013
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Special
Capital
Revenue
Projects
Total
$ 350,257
$ -
$ 350,257
2,275,723
218,023
2,493,746
1,864,653
18,139
1,882,792
2,745,383
-
2,745,383
5,646
4,350
9,996
215,687
11,994
227,681
7,457,349
252,506
7,709,855
598,783
-
598,783
618,362
-
618,362
1,463,241
-
1,463,241
468,220
-
468,220
86,396
1,117
87,513
868,990
-
868,990
2,187,314
55,170
2,242,484
82,654
1,288,398
1,371,052
6,373,960
1,344,685
7,718,645
OVER (UNDER) EXPENDITURES
1,083,389
(1,092,179)
(8,790)
OTHER FINANCING SOURCES (USES)
Transfers in
1,867,449
810,000
2,677,449
Transfers out
(1,627,414)
-
(1,627,414)
TOTAL OTHER FINANCING
SOURCES (USES)
240,035
810,000
1,050,035
NET CHANGE IN FUND BALANCES
1,323,424
(282,179)
1,041,245
FUND BALANCES - BEGINNING
4,237,070
3,398,117
7,635,187
FUND BALANCES - ENDING $
5,560,494
$ 3,115,938
$ 8,676,432
City of Federal Way / 75
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2013
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel
Street
Recycling
Studies
Lodging Tax
REVENUES
Taxes $
-
$ -
$ -
$ 208,839
Intergovernmental
487,886
207,367
-
-
Service charges and fees
7,250
299,337
-
-
Fines and forfeitures
-
-
-
-
Interest
106
168
641
176
Other
-
1,107
-
1,999
TOTAL REVENUES
495,242
507,979
641
211,014
EXPENDITURES
Current:
General government
-
-
998
-
Security of persons and property
-
-
-
-
Transportation
1,463,241
-
-
-
Physical environment
-
468,220
-
-
Economic environment
-
-
-
86,396
Health
-
-
-
-
Culture and recreation
-
-
-
-
Capital outlay
-
-
-
-
TOTAL EXPENDITURES
1,463,241
468,220
998
86,396
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (967,999)
39,759
(357)
124,618
OTHER FINANCING SOURCES (USES)
Transfers in
1,048,000
-
-
-
Transfers out
-
-
(145,000)
-
TOTAL OTHER FINANCING
SOURCES (USES)
1,048,000
-
(145,000)
-
NET CHANGE IN FUND BALANCES
80,001
39,759
(145,357)
124,618
FUND BALANCES - BEGINNING
79,530
172,002
502,375
102,416
FUND BALANCES - ENDING $
159,531
$ 211,761
$ 357,018
$ 227,034
City of Federal Way / 76
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2013
Federal way
Community
Paths and
Community
Traffic
Development
Trails
Center
Safety
Block Grant
Reserve
Total
REVENUES
Taxes
$ -
$ -
$ -
$ 141,418
$ 350,257
Intergovernmental
79,469
-
1,491,740
9,261
2,275,723
Service charges and fees
1,558,066
-
-
-
1,864,653
Fines and forfeitures
-
2,745,383
-
-
2,745,383
Interest
566
3,636
260
93
5,646
Other
212,432
-
149
-
215,687
TOTAL REVENUES
1,850,533
2,749,019
1,492,149
150,772
7,457,349
EXPENDITURES
Current:
General government
-
-
597,785
-
598,783
Security of persons and property
-
618,362
-
-
618,362
Transportation
-
-
-
1,463,241
Physical environment
-
-
-
-
468,220
Economic environment
-
-
-
-
86,396
Health
-
-
868,990
-
868,990
Culture and recreation
2,187,314
-
-
-
2,187,314
Capital outlay
82,654
-
-
-
82,654
TOTAL EXPENDITURES
2,269,968
618,362
1,466,775
-
6,373,960
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(419,435)
2,130,657
25,374
150,772
1,083,389
OTHER FINANCING SOURCES (USES)
Transfers in
819,449
-
-
-
1,867,449
Transfers out
-
(1,302,040)
(25,374)
(155,000)
(1,627,414)
TOTAL OTHER FINANCING
SOURCES (USES)
819,449
(1,302,040)
(25,374)
(155,000)
240,035
NET CHANGE IN FUND BALANCES
400,014
828,617
-
(4,228)
1,323,424
FUND BALANCES - BEGINNING
1,197,498
1,975,866
40,715
166,668
4,237,070
FUND BALANCES - ENDING $
1,597,512
$ 2,804,483 $
40,715
$ 162,440
$ 5,560,494
City of Federal Way / 77
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For Year Ended December 31, 2013
City
Facilities
Parks
Total
REVENUES
Intergovernmental $
218,023 $
-
$ 218,023
Service charges and fees
-
18,139
18,139
Fines and forfeitures
-
-
-
Interest
1,182
3,168
4,350
Other
-
11,994
11,994
TOTAL REVENUES
219,205
33,301
252,506
EXPENDITURES
Current:
Economic environment
1,117
-
1,117
Culture and recreation
-
55,170
55,170
Capital outlay
1,028,498
259,900
1,288,398
TOTAL EXPENDITURES
1,029,615
315,070
1,344,685
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(810,410)
(281,769)
(1,092,179)
OTHER FINANCING SOURCES (USES)
Transfers in
355,000
455,000
810,000
TOTAL OTHER FINANCING
SOURCES (USES)
355,000
455,000
810,000
NET CHANGE IN FUND BALANCES
(455,410)
173,231
(282,179)
FUND BALANCES - BEGINNING
1,137,852
2,260,265
3,398,117
FUND BALANCES - ENDING $
682,442 $
2,433,496
$ 3,115,938
City of Federal Way / 78
ARTERIAL STREET
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 486,000 $ 486,000
$ 487,886
$ 1,886
Service charges and fees
- -
7,250
7,250
Interest
2,500 2,500
106
(2,394)
TOTAL REVENUES
488,500 488,500
495,242
6,742
EXPENDITURES
Current:
Transportation 1,536,500 1,616,029 1,463,241 152,788
TOTAL EXPENDITURES 1,536,500 1,616,029 1,463,241 152,788
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,048,000) (1,127,529) (967,999) 159,530
OTHER FINANCING SOURCES (USES)
Transfers in 1,048,000 1,048,000 1,048,000 -
TOTAL OTHER FINANCING
SOURCES (USES) 1,048,000 1,048,000 1,048,000 -
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
(79,529) 80,001 159,530
79,529 79,530 1
FUND BALANCES - ENDING $ - $ - $ 159,531 $ 159,531
City of Federal Way / 79
SOLID WASTE & RECYCLING
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 165,549
$ 207,326
$ 207,367
$ 41
Service charges and fees
284,671
284,671
299,337
14,666
Interest
-
-
168
168
Other
-
-
1,107
1,107
TOTAL REVENUES
450,220
491,997
507,979
15,982
EXPENDITURES
Current:
Physical environment
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
470,294 512,071 468,220 43,851
470,294 512,071 468,220 43,851
(20,074) (20,074) 39,759 59,833
(20,074) (20,074) 39,759 59,833
154,127 172,002 172,002
$ 134,053 $ 151,928 $ 211,761 $ 59,833
City of Federal Way / 80
HOTEL/MOTEL LODGING TAX
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 195,000
$ 195,000
$ 208,839
$ 13,839
Interest
300
300
176
(124)
Other
-
-
1,999
1,999
TOTAL REVENUES
195.300
195,300
211,014
15,714
EXPENDITURES
Current:
Economic environment
195,300
297,716
86,396
211.320
TOTAL EXPENDITURES
195,300
297,716
86,396
211,320
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
-
(102,416)
124,618
227,034
NET CHANGE IN FUND BALANCES
-
(102,416)
124,618
227,034
FUND BALANCES - BEGINNING
-
102,416
102,416
-
FUND BALANCES - ENDING
$ -
$ -
$ 227,034
$ 227,034
City of Federal Way / 81
FEDERAL WAY COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
REVENUES
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
- 79,469
79,469
-
1,403,500 $ 1,403,500
$ 1,558,066
$ 154,566
- -
566
566
215,000 215,000
212,432
2,568)
1,618,500 1,697,969 1,850,533 152,564
2,168,353 2,168,353 2,187,314 (18,961)
56,557 147,221 82 654 64,567
2,224,910 2,315,574 2,269,968 45,606
OVER (UNDER) EXPENDITURES (606,410) (617,605) (419,435) 198,170
OTHER FINANCING SOURCES (USES)
Transfers in 708,000 817,797 819,449 1,652
TOTAL OTHER FINANCING
SOURCES (USES) 708,000 817,797 819,449 1,652
NET CHANGE IN FUND BALANCES 101,590 200,192 400,014 199,822
FUND BALANCES - BEGINNING
1,079,672 1,197,501 1,197,498 3)
FUND BALANCES - ENDING $ 1,181,262 $ 1,397,693 $ 1,597,512 $ 199,819
City of Federal Way / 82
TRAFFIC SAFETY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Fines and forfeitures
$ 830,000 $ 2,455,000
$ 2,745,383
$ 290,383
Interest
- -
3,636
3,636
TOTAL REVENUES
830,000 2,455,000
2,749,019
294,019
EXPENDITURES
Current:
Security of persons and property - 651,754 618,362 33,392
TOTAL EXPENDITURES - 651,754 618,362 33,392
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 830,000 1,803,246 2,130,657 327,411
OTHER FINANCING SOURCES (USES)
Transfers out (1,075,040) (1,302,040) (1,302,040) -
TOTAL OTHER FINANCING
SOURCES (USES) (1,075,040) (1,302,040) (1,302,040) -
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
(245,040) 501,206 828,617 327,411
1,500,324 1,975,866 1,975,866 -
FUND BALANCES - ENDING $ 1,255,284 $ 2,477,072 $ 2,804,483 $ 327,411
City of Federal Way / 83
PATH & TRAILS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Taxes $
155,000
$ 155,000
$ 141,418
$ (13,582)
Intergovernmental
9,000
9,000
9,261
261
Interest
-
-
93
93
TOTAL REVENUES
164,000
164,000
150,772
(13,228)
EXPENDITURES
Current:
General government
-
-
-
-
TOTAL EXPENDITURES
-
-
-
-
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
164,000
164,000
150,772
(13,228)
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
9,000
9,000
(4,228)
(13,228)
FUND BALANCES - BEGINNING
159,808
166,667
166,668
1
FUND BALANCES - ENDING $
168,808
$ 175,667
$ 162,440
$ (13,227)
4ik
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
City of Federal Way / 84
Budget and Actual — Debt Service Fund Description
For the Year Ended December 31, 2013
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.
City of Federal Way / 85
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2013
Debt
Service
ASSETS
Equity in pooled cash & investments $ 4,889,669
Receivables (net):
Taxes 424,985
TOTAL ASSETS 5,314,654
LIABILITIES AND FUND BALANCES
Liabilities:
Unearned revenue 66,318
TOTAL LIABILITIES 66,318
Fund Balance:
Restricted 3,229,709
Committed 2,018,627
TOTAL FUND BALANCES 5,248,336
TOTAL LIABILITIES AND
FUND BALANCE $ 5,314,654
City of Federal Way / 86
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2013
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Taxes $ 1,400,000 $ 1,400,000 $ 2,034,033 $ 634,033
Interest 3,500 3,500 4,550 1,050
TOTAL REVENUES 1,403,500 1,403,500 2,038,583 635,083
EXPENDITURES
Debt service:
-
-
Principal
501,750
1,126,750
1,019,698
107,052
Interest/fiscal charges/admin fees
1,549,758
1,685,620
1,781,778
(96,158)
TOTAL EXPENDITURES
2,051,508
2,812,370
2,801,476
10,894
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(648,008)
(1,408,870)
(762,893)
645,977
OTHER FINANCING SOURCES (USES)
Bond proceeds
Bond principal payoff
Bond premium
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
- 12,825,660
12,415,000 -
- (11,955,000)
(11,955,000) -
- -
410,660 410,660
1,832,000 2,531,876
2,530,224 (1,652)
(1,217,000) (1,572,000)
(1,572,000) -
615,000 1,830,536 1,828,884 409,008
(33,008) 421,666 1,065,991 1,054,985
3,705,294 4,182,345 4,182,345 -
FUND BALANCES - ENDING $ 3,672,286 $ 4,604,011 $ 5,248,336 $ 644,325
4ik
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
City of Federal Way / 87
Combining Statement — Internal Service Fund's Description
For the Year Ended December 31, 2013
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 / 88
INTERNAL SERVICE FUNDS
COMBINING STATEMENT
OF NET POSITION
December 31,
2013
Risk
hnformation
Support
Fleet and
Buildings and
Management
Systems
Services
Equipment
Furnishings
TOTAL
ASSETS
Current Assets
Equity in pooled cash & investments
$ 5,695,563
$ 3,886,164
$ 214,283
$ 6,099,415
$ 1,793,701
$ 17,679,126
Prepaid items
-
-
5,000
-
5,000
TOTAL CURRENT ASSETS
5,695,563
3.886,164
219,283
6,099,415
1,783,701
17,684,126
Noncurrent assets
Capital assets:
Building/structures
-
-
-
-
16,533,999
16,533,999
Machinery/furniture/equipment
-
6,489,007
234,389
8,733,437
-
15,456,833
Less accumulated depreciation
_ (4,951,345)
(94,575)
(5,532.808)
(7,002,985)
(17,581,713)
TOTAL NONCURRENT ASSETS
-
1,537,662
139,814
3,200,629
9,531,014
14,409,119
TOTAL CURRENT ASSETS
5,695,563
5,423,826
359,097
9,300,044
11,314,715
32,093,245
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
51,073
47,799
4,761
89,081
72,970
265,684
TOTAL CURRENT LIABILITIES
51,073
47,799
4,761
89,081
72,970
265,684
Long-term liabilities
Compensated absences payable
- 45,410
-
-
45,410
TOTAL LONG-TERM LIABILITIES
- 45,410
-
-
-
45,410
TOTAL LIABILITIES
51,073 93,209
4,761
89,081
72,970
311,094
NET POSITION
Net Investment in capital
- 1,537,662
139,814
3,200,629
9,531,014
14,409,119
Unrestricted
5,644,490 3,792,955
214,523
6,010,333
1710,731
17,373,032
TOTAL NET POSITION
$ 5,644,490 $ 5,330,617 $
354,337
$ 9,210,962
$ 11,24I,745
$ 31,782,151
City of Federal Way / 89
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2013
Risk
Information
Support
Fleet and
Buildings and
Management
Systems
Services
Equipment
Furnishings
TOTAL
OPERATING REVENUES:
_
_
Service charges and fees
$ 1,325,642
$ 1,715,299
$ 122,298
$ 1,962,103
$ 647,490
$ 5,772,822
Intergovernmental
-
-
-
1,849
1,849
Miscellaneous
95,784
1,690..
97,475
TOTAL OPERATING REVENUES
1,421,426
1,716,989
122,288
1,962,103
649,339
5,872,146
OPERATING EXPENSES:
Personal services
-
670,988
22,227
47,236
740,451
Materials and supplies
360
31,233
19,436
476,268
37,775
565,072
Services and charges
96,328
451,222
65,781
317,516
414,293
1,345,140
Intergovernmental
67,212
115,716
-
57,849
200
240,977
Insurance
582,877
-
-
-
582,877
Claims
552,149
-
-
-
-
552,149
Depreciation
-
428,835
12,231
869,239
_ 903,441
2,213,746
TOTAL OPERATING EXPENSES
1,298,926
1,697,994
97,448
1,743,099
1,402,945
6.240,412
OPERATING INCOME (LOSS)
122,500
18,995
24,840
219,004
(753,606)
(368,266)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
42,872
-
42,872
Interest income
4,116
4,735
312
7,083
2,055
18,301
TOTAL NON -OPERATING REVENUES (EXPENSES)
4,116
4,735
312
49,955
2,055
61,173
INCOME (LOSS) BEFORE TRANSFERS
126,616
23,730
25,152
268,959
(751,551)
(307,093)
Capital contributions
-
7,971
-
61,256
-
69,227
Transfers in
-
168,000
-
I68,000
Transfers out
(40,000)
(87,651)
(76,587)
(342,926)
(547,164)
CHANGE IN NET POSITION
86,616
112,050
(51,435)
(12,711)
(751,551)
(617,030)
NET POSITION - BEGINNING
5,557,874
5,218,567
405,771
9,223,672
11,993,296
32,399,180
NET POSITION - ENDING
$ 5,644,490
$ 5,330,617
$ 354,337
$ 9,210,962
$ 11,241,745
$ 31,782,151
City of Federal Way / 90
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2013
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
$ 1,325,646
$ 1,715,299
$ 122,289
(552,149)
-
-
(116,397)
(533,106)
(87,128)
-
(666,825)
-
(650,089)
(115,716)
-
95,785
1,693
-
102,796
401,345
35,160
-
168,000
-
(40,000)
(87,651)
(76,587)
(40,000)
80,349
(76,587)
- (357,221) (32,137)
- (357,221) (32,137)
4116 4.734 312
K,11V 'Y,/J'? J1G
66,911 129,206 (73,252)
5,628,656 3,756,956 287,533
5,695,567 3,886,161 214,280
122,505 18,998 24,841
428,835 12,231
(19,709) (50,651) (1,912)
4,163 -
(19,709) 382,347 10,319
$ 102,796 $ 401,345 $ 35,160
$ - $ 7,971 $ -
City of Federal Way / 91
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2013
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
$ 1,962,103 $ 649,338 $ 5,774,674
- - (552,149)
(790,268) (409,915) (1,936,814)
(25,153) (47,236) (739,214)
(765,805)
- 97,477
1,0i0,1iv
- 168,000
(342,926) - (547,164)
(342,926) - (379,164)
(531,770) (18,291) (939,419)
42,872 42,872
(488,898) (18,291) (896,547)
7,083 2,055 18,299
i,Ua.) 1-,v.)D ia,Zyy
321,942 175,951 620,759
5,777,473 1,607,749 17,058,367
6,099,415 1,783,700 17,679,126
219,005 (753,606) (368,258)
869,239 903,441 2,213,746
61,365 42,353 31,446
(2,926) - 1,237
927,678 945,794 2,246,429
$ 1,146,683 $ 192,187 $ 1,878,171
$ 61,256 $ - $ 69,227
4ik
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT INTENTIONALLY BLANK
City of Federal Way/ 92
CAPITAL ASSETS USED IN THE
OF GOVERNMEN"a'Ai. FUNUS
City of Federal Way / 93
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
December 31, 2013
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
2013 2012
$ 304,177,872
$303,565,575
734,118
651,464
43,865,580
43,865,580
184,000
184,000
164,610,040
151,204,738
14,380,488
22,743,528
527,952,098
522,214,885
125,244, 871
125,244, 871
252,375,395
252,375,395
123,192,004
122,888,397
27,139,828
21,706,222
$ 527,952,098 $ 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 assets.
City of Federal Way / 94
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2013
Improvements Machinery Construction
Other than and in Total Total
Function and Activity Land Buildings Buildings Equipment Infrastructure Progress 2013 2012
GENERAL GOVERNMENT
Miscellaneous general government $ 18.129.140 $ - $ 19,973 $184,000 $ 6,139,001 $ 1,442,776 $ 25.,914,890 $24,770,514
Total General Csovernment: 18,129,140 - 19 973 184.000 6,139,001 1,442,776 25,914.890 24,770,514
CULTURE AND RECREATION
Culture and Recreation 121,008,287 734,118 43,845,607 94,474,128 3,028,691 263,090,831 262,748,277
Total Culture and Recreation: 121,008,287 734,118 43,845,607 94,474,128 3,028,691 263,090,831 262,748,277
TRANSPORTATION
Streets and Traffic 165,M..6,445 - - 63;06,911 9,909,021 238,94.6,377 234,696,094
Total Transportation: 165,040,445 - - 63,996,911 9,909.021 238,946,377 234,696,094
Total General Fixed Asset by Function: $304,177,872 $ 734,118 $ 43,865,580 $184,000 $164,610,040 $ 14,380,488 $527,952,098 $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 assets.
City of Federal Way / 95
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2013
Governmental
Governmental
Funds
Funds
Capital Assets
Capital Assets
1/1/2013 Additions
Deductions 12/31/2013
GENERAL GOVERNMENT
Miscellaneous general government
$ 24,770,514 $
1,144,376 $
- $ 25,914,890
TOTAL GENERAL GOVERNMENT
24,770,514
1,144,376
- 25,914,890
CULTURE AND RECREATION
262,748,277
342,554
- 263,090,831
TOTAL CULTURE AND RECREATION
262,748,277
342,554
- 263,090,831
TRANSPORTATION
Streets and traffic
234,696,094
4,250,283
238,946,377
TOTAL TRANSPORTATION
234,696,094
4,250,283
- 238,94.6,377
TOTAL GENERAL FIXED ASSETS $ 522,214,885 $ 5,737,213 $ - $ 527,952,098
This schedule presents only the historical cost of capital asset balances (no depreciation expenses) related to
governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of the internal service funds are included as governmental
activities in the statement of net assets.
City of Federal Way / 96
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.
City of Federal Way / 97
Governmental activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Net investment in capital assets
Restricted
Unrestricted
Total business -type activities net position
Primary government
Net investment in capital assets
Restricted
Unrestricted
Total primary government net assets
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
NET POSITION BY COMPONENT
Last Seven Fiscal Years
2007 2008 2009 2010 2011 2012 2013
$439,127,122 $456,600,030 $442,704,401 465,671,345 470,074,905 470,597,776 468,628,412
32,269,512 28,434,066 27,476,530 17,442,323 23,941,601 22,847,077 22,594,884
23,651,674 24,773,913 44,282,822 44,613,406 38,602,445 45,027,323 48,829,641
495,048,308 509,808,009 514,463,753 527,727,074 532,618,951 538,472,176 540,052,936
45,264,105 50,494,590 50,578,649 50,563,097 50,052,887 50,280,880 50,620,091
15,777 42,558 16,366 9,411 18,831 26,496 20,559
6,550,179 5,071,617 5,115,275 5,015,367 5,398,786 5,968,302 6,577,269
51,830,061 55,608,765 55,710,290 55,587,875 55,470,504 56,275,678 57,217,919
484,391,227 507,094,620 493,283,050 516,234,442 520,127,792 520,878,656 519,248,503
32,285,289 28,476,624 27,492,896 17,451,734 23,960,432 22,873,573 22,615,443
30,201,853 29,845,530 49,398,097 49,628,773 44,001,231 50,995,625 55,406,910
$ 546,878,369 $ 565,416,774 $ 570,174,043 $ 583,314,949 $ 588,089,455 $ 594,747,853 $ 597,270,856
City of Federal Way / 98
CHANGES IN NET POSITION
Last Seven Fiscal Years
2007
2008
2009
2010
2011
2012
2013
Expenses
Governmental activities,
General government
$ 4,506,800
$5,606,797
$4,566,457
$ 4,865,827
$ 4,448,449
$ 4,300,691
$ 4,575,614
Security of persons and property
23,107,683
24,745,284
26,341,614
26,842,240
27,222,584
27,604,936
27,894,695
Transportation
9,986,067
7,891,298
9,448,397
9,781,800
13,539,598
9,946,776
9,675,727
Physical environment
336,588
370,718
450,914
451,470
424,466
415,935
490,916
Economic environment
3,319,955
3,382,572
3,560,620
3,175,005
2,782,435
2,645,478
2,191,487
Health and human svcs
684,984
705,976
776,854
767,108
690,643
754,727
1,683,449
Culture and recreation
6,506,137
6,955,442
8,089,242
8,073,804
8,105,578
8,081,401
8,418,920
Interest on long-term debt
1,122,358
901,161
811,124
685,214
614,571
602,572
1,779,833
Total governmental activities expenses
49,570,572
50,559,248
54,045,222
54,642,468
57,828,324
54,352,517
56,710,640
Business -type activities:
Surface Water Mgmt
3,454,193
4,060,440
3,345,027
3,384,352
3,527,590
3,272,514
3,234,742
Dumas Bay Center
980,588
1,045,250
984,103
849,176
890,738
873,144
844,623
Total business -type activities expenses
4,434,781
5,105,690
4,329,130
4,233,528
4,418,328
4,145,658
4,079,365
Total primary government expense;
54,005,353
55,664,938
58,374,352
58,875,996
62,246,652
58,498,175
60,790,005
Program Revenues
Governmental activities,
Charges for services
General Government
3,510,339
$2,313,939
$873,258
975,515
816,140
924,966
1,983,033
Security of Persons & Property
2,110,164
2,309,406
5,037,388
5,381,407
4,985,320
5,937,100
5,022,896
Transportation
3,119,637
513,340
1,806,846
1,961,083
2,484,058
2,139,292
577,489
Physical Environment
-
262,847
86,230
90,512
77,875
89,457
299,337
Economic Environment
1,009,707
1,962,624
680,908
636,534
510,483
568,973
2,201,375
Health
-
-
148,579
153,792
126,710
162,322
-
Culture & Recreation
531,041
2,561,685
1,546,931
1,618,659
1,487,099
1,738,098
2,431,603
Operating grants and contributions
22,858
1,538,476
2,172,168
9,718,920
4,597,981
5,367,163
6,007,682
Capital grants and contributions
11,457,030
8,933,154
8,452,149
9,044,477
9,716,551
5,225,265
3,892,651
Total governmental activities program revenues
21,760,776
20,395,471
20,804,457
29,580,898
24,802,216
22,152,636
22,416,065
Business -type activities:
Charges for services
3,667,168
4,473,453
4,183,012
4,246,235
4,020,144
4,222,726
4,096,751
Operating grants and contributions
632,185
-
-
-
265,660
576,182
774,436
Capital grants and contributions
222,474
-
-
-
-
-
-
Total business -type activities program revenues
4,521,827
4,473,453
4,183,012
4,246,235
4,285,804
4,798,908
4,871,187
26,282,603
24,868,924
24,987,469
33,827,133
29,088,020
26,951,544
27,287,252
Net (Expense)/Revenue
Governmental activities
(27,809,796)
(30,163,777)
(33,240,765)
(25,061,570)
(33,026,108)
(32,199,881)
(34,294,574)
Business -type activities
87,046
(632,237)
(146,118)
12,707
(132,524)
653,250
791,822
General Revenues and Other Changes in
Net Position
Governmental activities,
Taxes
Sales tax
13,048,624
12,144,276
10,583,298
10,708,951
10,858,381
10,534,147
11,346,338
Local Criminal Justice Sales Tax
2,145,383
2,051,524
1,743,893
1,701,120
1,795,971
1,864,991
1,992,667
Utility tax
12,796,461
13,469,136
13,549,472
12,890,310
13,068,510
13,083,179
12,584,293
Property tax
9,059,734
9,397,456
9,653,537
9,609,740
9,867,614
10,052,109
10,152,114
Real estate excise tax
4,898,537
2,590,310
1,428,985
1,403,361
1,560,395
1,507,313
2,034,033
Gambling Tax
1,489,952
1,259,783
1,127,203
493,486
511,005
114,443
178,696
Hotel/Motel Tax
191,691
188,833
154,148
149,058
185,289
193,344
208,839
Leasehold tax
7,254
5,712
4,999
5,757
6,259
5,820
5,989
Other
6,971,413
6,502,869
2,020,751
1,210,341
1,061,026
838,259
868,261
Transfers
(185,495)
123,518
(200,907)
152,768
(113,000)
(140,500)
(137,419)
Total governmental activities
50,423,554
47,733,417
40,065,379
38,324,892
38,801,450
38,053,106
39,233,811
Business -type activities
Other
366,031
3,447,458
46,736
17,646
12,405
11,424
13,000
Transfers
185,495
(123,518)
200,907
(152,768)
113,000
140,500
137,419
Total business -type activities
551,526
3,323,940
247,643
(135,122)
125,405
151,924
150,419
Total primary government
$ 50,975,080
$ 51,057,357
$ 40,313,022
$ 38,189,770
$ 38,926,855
$ 38,205,030
$ 39,384,230
Change in Net Position
Governmental activities
$ 22,613,758
$ 17,569,640
$ 6,824,613
$ 13,263,321
$ 5,775,342
$ 5,853,224
$ 4,939,237
Business -type activities
638,572
2,691,703
101,525
(122,415)
(7,119)
805,174
942,241
Prior Period Adjustment
-
(1,722,939)
(2,168,769)
-
-
-
-
Total primary government
$ 23,252,330
$ 18,538,404
$ 4,757,370
$ 13,140,907
$ 5,768,223
$ 6,658,398
$ 5,881,478
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis
City of Federal Way / 99
GOVERNMENT -WIDE REVENUES BY SOURCE AND EXPENDITURES BY FUNCTION
Last Seven Fiscal Years
2007
2008
2009
2010
2011
2012
2013
Program Revenues
Charges for Services
$14,580,241
$14,397,294
$14,363,151
15,063,736
14,507,828
15,782,934
16,612,484
Operating Grants and Contributions
246,305
1,538,476
2,172,168
9,718,920
4,863,641
5,943,345
6,782,118
Capital Grants and Contributions
11,457,030
8,933,154
8,452,149
9,044,477
9,716,551
5,225,265
3,892,651
General revenues
Sales tax
13,048,624
12,144,276
10,583,298
10,708,951
10,858,381
10,534,147
11,346,338
Local Criminal Justice Sales Tax
2,145,383
2,051,524
1,743,893
1,701,120
1,795,971
1,864,991
1,992,667
Utility tax
12,796,461
13,469,136
13,549,472
12,890,310
13,068,510
13,083,179
12,584,293
Property tax
9,059,734
9,397,456
9,653,537
9,609,740
9,867,614
10,052,109
10,152,114
Real estate excise tax
4,898,537
2,590,310
1,428,985
1,403,361
1,560,395
1,507,313
2,034,033
Gambling Tax
1,489,952
1,259,783
1,127,203
493,486
511,005
114,443
178,696
Hotel/Motel Tax
191,691
188,833
154,148
149,058
185,289
193,344
208,839
Leasehold tax
7,254
5,712
4,999
5,757
6,259
5,820
5,989
Other revenue
4,194,183
875,389
1,421,791
1,063,825
960,012
702,833
678,850
Unrestricted Grants & Contribution
-
7,448,783
284,350
-
-
-
-
Investment Earnings
3,223,005
1,678,292
385,976
179,373
113,419
146,850
202,411
Disposition of capital assets
(79,744)
(52,137)
(24,630)
(15,211)
-
-
-
Total Revenues
77,258,656
75,926,281
65,300,490
72,016,903
68,014,875
65,156,573
66,671,483
Expenses/Expenditures
General Government
4,506,800
5,606,797
4,566,457
4,865,827
4,448,449
4,300,691
4,575,614
Security of Persons & Property
23,107,683
24,745,284
26,341,614
26,842,240
27,222,584
27,604,936
27,894,695
Transportation
9,986,067
7,891,298
9,448,397
9,781,800
13,539,598
9,946,776
9,675,727
Physical Environment
336,588
370,718
450,914
451,470
424,466
415,935
490,916
Economic Environment
3,319,955
3,382,572
3,560,620
3,175,005
2,782,435
2,645,478
2,191,487
Health
684,984
705,976
776,954
767,108
690,643
754,727
1,683,449
Culture & Recreation
6,506,137
6,955,442
8,089,242
8,073,804
8,105,578
8,081,401
8,418,920
Interest on long-term debt
1,122,358
901,161
811,124
685,214
614,571
602,572
1,779,833
Surface Water Management
3,455,166
4,060,440
3,345,027
3,384,352
3,527,590
3,272,514
3,234,742
Dumas Bay Centre
980,588
1,045,250
984,103
849,176
890,738
873,144
844,623
Total Expenses/Expenditures
$54,006,326
$55,664,938
$58,374,452
$58,875,996
$ 62,246,652
$ 58,498,175
$ 60,790,005
Source: City of Federal Way Finance
City of Federal Way / 100
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
Restricted
Committed
Assigned
Unassigned
Total all other governmental funds
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Seven Fiscal Years
2007
2008
2009
2010
2011
2012
2013
125,184
418,207
106,728
7,783,868
5,511,440
8,138,468
-
-
-
-
-
-
-
81,146
104,012
69,398
76,538
168,398
145,524
60,585
39,081
-
21,893
21,893
21,893
-
-
-
8,188,575
12,372,719
14,783,219
16,003,076
7,909,052
5,929,647
8,245,196
8,438,119
12,644,148
14,935,095
16,140,587
2,323,184 1,763,667 4,770,399
4,392,623 7,505,799 4,311,238
30,054,670 26,252,192 22,934,356 - - - -
- - - 17,776,967 19,325,489 18,079,168 17,478,394
18,611,612 11,642,248 15,813,105 16,371,292
100,000 - - -
$ 36,770,477 $ 35,521,658 $ 32,015,993 $ 36,488,580 $ 30,967,736 $ 33,892,273 $ 33,849,686
Source: City of Federal Way Finance
Note: Fund Balance reclassification implementation of GASB 54 for year's 2010 and forward
City of Federal Way / 101
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Seven Fiscal Years
Revenues
Taxes
Licenses, fees and permits
Intergovernmental
Charges for services
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
Bond principal payoff
Sale of capital assets
Bond premium
Transfers in
Transfers out
2007 2008 2009 2010 2011 2012 2013
$43,584,824 $41,071,781 $38,192,852 $37,122,069 $ 37,831,045 $ 37,450,059 $ 38,505,413
2,939,328
2,195,068
2,163,984
2,547,655
2,209,873
2,501,368
2,638,017
15,494,887
10,520,570
11,127,718
18,648,749
11,713,248
7,631,014
9,682,511
6,327,552
6,246,207
5,573,647
5,486,632
6,131,287
5,686,962
5,965,726
1,005,293
1,433,628
2,200,092
2,783,214
2,146,524
3,371,878
3,911,990
2,463,670
1,274,955
271,600
139,698
89,338
122,483
172,049
630,966
875,389
1,599,207
899,092
960,012
702,830
678,850
72,446,520
63,617,598
61,129,100
67,627,109
61,081,327
57,466,594
61,554,556
4,364,750
5,197,032
4,518,821
4,857,177
4,234,327
4,402,129
4,495,029
24,183,913
25,470,722
27,051,814
26,892,207
28,332,237
26,562,270
29,028,242
6,631,030
6,634,548
6,165,540
5,700,274
7,427,408
6,039,183
5,672,769
336,588
370,718
448,873
450,971
427,315
409,042
468,220
3,326,986
3,344,987
3,504,767
3,161,820
2,782,537
2,645,215
2,190,502
677,536
700,876
772,151
765,963
690,824
754,311
1,681,986
5,300,455
5,871,288
5,845,676
5,857,621
5,821,160
5,877,370
6,183,381
9,953,505
440,900
4,558,750
494,250
457,520
480,760
1,019,698
1,122,358
901,161
811,124
685,214
614,571
602,572
1,781,778
19,162,067
18,037,109
8,443,523
14,249,501
11,560,205
4,337,758
8,987,949
75,059,188
66,969,341
62,121,039
63,114,998
62,348,104
52,110,610
61,509,554
(2,612,668) (3,351,743) (991,939) 4,512,111 (1,266,777) 5,355,984 45,002
- 12,415,000
- - - - - - (11,955,000)
(23,786) - - - 9,162 - 5,500
- - - - - - 410,660
22,688,136 16,232,916 25,619,678 22,473,128 21,453,223 16,228,281 18,972,853
(23,190,280) (16,109,398) (25,817,857) (22,319,725) (21,510,423) (16,368,781) (18,731,107)
Total other financing sources (uses) (525,930) 123,518 (198,179) 153,403 (48,038) (140,500) 1,117,906
Net change in fund balances $ (3,138,598) $ (3,228,225) $ (1,190,118) $ 4,665,514 $ (1,314,815) $ 5,215,484 $ 1,162,908
Debt service as a percentage of
noncapital expenditures 24.7% 2.8% 11.1% 2.4% 2.1% 2.5% 5.6%
Source: City of Federal Way Finance
City of Federal Way / 102
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)
2004
6,218,643,830
181,366,723
102,350,559
6,502,361,112
L30
3.3%
2005
6,937,653,592
225,118,781
89,220,328
7,251,992,701
127
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
-6.6%
2012
6,832,615,312
213,389,519
96,827,145
7,142,831,976
1.30
-7.5%
2013
7,076,203,165
212,126,219
97,686,143
7,386,015,527
1.42
3.4%
* Real, personal, and state public service property has been assessed at 100% of the estimated value.
Source: King County Assessor's Office.
Note: These figures include all final tax adjustments, non-taxable, senior citizen exempted property and omits.
The total assessed value was reduced by senior citizen exemptions (no tax amounts) of $52,022,022 and
pior year omits of $365,601 yielding a taxable assessed value of $7,333,627,904. The assessed valuations
are the basis for the following year's tax levy.
City of Federal Way / 103
PROPERTY TAX RATES AND LEVIES, DIRECT AND OVERLAPPING GOVERNMENTS
For the Last Ten Fiscal Years
City
Direct
Rates`
❑�erlappipo Ralc9
_
City of
Federal Way
Emergency
Fiscal
Federal
School
King
Washington
King County
Port of
County
Fire District
Medical
Year
Way
District 9210
County
State
Flood Zone
Seattle
Ferry District
#39
Library
Services
Total
TAX RATES PER 51,000 OF ASSESSED VALUATION
2004
1 30
4.20
1 43
276
0.05
0,25
1.50
0.53
024
1126
2005
127
4.30
1.38
2.69
005
Q25
-
150
053
023
IZ21
2006
1 22
4.26
1 33
2.50
004
0.23
-
1 50
053
0.22
11 84
2007
1 14
4 19
L29
233
0,04
0.23
-
1 50
0.50
021
11 42
2008
104
415
121
2.13
0.10
0.22
0055
150
0.45
0.30
1116
2009
0.97
4,20
1.10
1.96
0,09
0.20
0.052
1.50
042
027
1076
2010
1 13
5.11
1.28
2,22
0.11
0.22
0.003
1.50
0.49
030
1236
2011
1.20
5.36
1.34
2.28
0.11
0.22
0 004
1.39
057
030
12.77
2012
1.30
5,77
1 42
2.42
0.12
0.23
0 004
1.50
0,57
030
13 63
2013
1 42
7.55
1.54
2.57
0 13
0.23
0.004
1 82
057
030
16,14
DETAIL OF TAX RATES FOR 2013
Basic Rate
1.42
-
1.47
2.57
0.13
0,23
0.004
1.50
0.50
-
7.83
Voted Rate
-
7.55
0.07
-
-
-
-
032
0.07
0.30
8.31
TAX LEVIES
2004
8,117,974
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
1,270,911,250
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
1,594,672,099
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
2013
10,081,231
74,591,150
482,114,428
803,686,293
41,355,065
73,020,604
1.183,773
20,431,912
109,665,815
93,899,062
1,710,029,333
Source: King County Assessors Office and King County Department of Finance.
'The City of Federal Way's Direct Rate has only one component which is the expense levy,
City of Federal Way / 104
PRINCIPAL TAXPAYERS
Current Year and Ten Years Ago
2013
2004
% of Total
% of Total
Assessed
Assessed
Assessed
Assessed
Taxpayer
Type of Business
Valuation
Rank
Valuation
Valuation
Rank
Valuation (A)
Weyerhaeuser
Lumber Products
$ 77,816,485
1
1.06%
$ 145,049,370
1
2.31%
Puget Sound Energy-Elec/Gas
Electric/Gas
62,837,701
2
0.86%
53,539,212
2
0.85%
Steadfast Commons LLC
Real Estate Management
57,009,300
3
0.78%
39,423,163
3
0.63%
Harsch Investment Properties
Real Estate Management
51,809,500
4
0,71%
22,228,300
5
0.35%
LBA Realty
Real Estate Management
31,273,200
5
0.43%
-
-
Forest Cove LLC
Real Estate Management
28,724,000
6
0.39%
-
KNL Vision WA LLC (formerly BRE Properties)
Real Estate Management
27,378,000
7
0.37%
17,454,000
9
0.28%
Qwest Corporation Inc.
Communications/Telephone
23,223,659
8
0,32%
38,781,784
4
0.62%
Fred Meyer
Retailer
21,640,700
9
0,30%
20,563,138
7
0.33%
Virginia Mason
Medical Services 17,911,323
K�L•117.[�YT:1
Source: King County Assessor's Office and King County Department of Finance.
(A) 2004 taxable assessed valuation for the City of Federal Way was $6,292,343,626
10 0 24%
16,674,141 10 0.26%
$ 353,713,108 5.62%
City of Federal Way / 105
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 Levv Years
Amount of Levy Taxes
Total Tax Lei
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
0.10/0
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%
2013
10,081,231
9,848,925
97.7%
37,272
10,029,029
99.5%
195,033
1.9%
Source: Most of data has been derived from the "Annual Tax Receivable Summary" prepared by the King County Finance.
City of Federal Way / 106
RATIO OF OUTSTANDING DEBT BY TYPE
For the Last Ten Fiscal Years
Governmental Activities
Fiscal General Obligation Certificates of
Year
Bonds Participation
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 -
2013
27,016,400 -
Business Type Activities
Percentage
Public Works
Total Primary
of Personal
Trust Fund Loan
Government
Income (b)
Per Capita (b)
2,304,189
33,107,081
0.068%
386
2,121,830
29,823,591
0.075%
348
1,939,471
31,520,925
0.071%
364
1,757,112
21,362,112
0.122%
244
1,574,753
20,712,753
0.134%
235
1,392,394
30,605,344
0.090%
346
1,210,035
29,893,985
0.091%
337
1,027,676
29,185,626
0.091%
327
845,317
28,462,267
0.093%
318
662,958
27,679,358
0.097%
309
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. 2008-2012
info for Federal Way is based on US Census Bureau, 2008-2012 American Community Survey five-year Estimates.
City of Federal Way / 107
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
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
29,185,626
3,866,184
25,319,442
0.0033
283.31
2012
89,460
7,142,831,976
28,462,267
4,182,345
24,279,922
0.0034
271.41
2013
89,718
7,386,015,527
27,679,358
5,248,336
22,431,022
0.0030
250.02
(A) Sources: State of Washington Office of Financial Management Population Estimates.
(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 $7,386,015,527 has been reduced by senior citizen exemptions of $70,737,304
and prior year omits of $365,601 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, 2009 and 2013.
City of Federal Way / 108
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2013
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
_
$ 831,582,000
2.17%
$ 18,030,802
283,815,000
2.17%
6,153,827
128,300,000
70.80%
90,840,392
179,572,797
3.51%
6,311,673
1,423,269,797
121,336,695
27,016,400
(C, 100.00%
27,016,400
Total Direct and Overlapping Debt $ 1,450,286,197
$ 148,353,095
(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, 2009, and 2013.
Source is City of Federal Way Finance
City of Federal Way / 109
DESCRIPTION
Statutory debt limit:
(2013 AV=$7,333,627,904) (A)
1.50% AV @ 100%
2.50% AV @ 100%
Add: Cash on hand for
debt redemption (B)
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2013
General Debt Capacity
Excess Levy
(Limited) (Unlimited) Open Space
Councilmanic Excess Levy and Park
Excess Levy
Utility Total Debt
Purposes Capacity
$ 110,004,419 $ (110,004,419) $ - $ - $ -
- 183,340,698 183,340,698 183,340,698 550,022,093
1,952,309 - - 1,952,309
Less: Bonds and COPs outstanding (27,016,400) - - - (27,016,400)
Remaining Debt Capacity $ 84,940,327 $ 73,336,279 $ 183,340,698 $ 183,340,698 $ 524,958,001
Total Remaining
"General" Capacity $1.5.8,276,606
(A) This figure represents the City's final total taxable assessed valuation (AV) for 2013 which was used to determine
the 2014 property tax levy.
(B) Reflects ending fund balance in the Debt Service Fund and Utility Tax Fund as of December 31, 2013.
(C) Combined total for Councilmanic, Financing Lease, and Excess Levy capacities.
Fiscal Year
Debt limit
Total net debt
applicable
to limit
Legal debt
margin
Total net debt
applicable to
the limit as a
% of debt limit
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%
2013
550,022,093
(25,064,092)
524,958,001
4.56%
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.
City of Federal Way / I10
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
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%
2013
1,050,430
1,413,862
2,464,292
57,934,989
4.3%
Source: City of Federal Way Finance
Note: * Interest excludes bond issuance and debt registration costs.
City of Federal Way / I I I
DEMOGRAPHIC STATISTICS
Education
Personal Level in Years
Fiscal Income Per Capita Median of Formal School Unemployment
Year Population Sea-Tac-Bel JD] Income [C] Age JC] Schooling Enrollment (A) Rate (B)
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
189,431,079,000
26,514
34.9
13.0
20,665
8.1%
2013
89,718
N/A
26,740
34.9
13.0
21,554
7.4%
(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) 2013 info for Federal Way is based on 2008-2012 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 2013 not available. 2013 data for Personal Income to be published fall of 2014.
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.
City of Federal Way / 112
P RIN CI PAL EMPLOYERS
Current Year and Ten Years Ago
2013 2004
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
2,185
1
8.07%
3,150
1
10.64%
Xerox Commerical Services LLC
Business Services
1,350
2
4.99%
-
-
0.00%
Weyerhaeuser Company
Lumber Products
1,321
3
4.88%
3,029
2
10.23%
St Francis Hospital
Medical Services
875
4
3.23%
744
3
2.51%
Wild Waves
Amusement Center
871
5
3.22%
687
4
2.32%
World Vision Inc
Christian Relief Agency -Nonprofit
852
6
3.15%
596
6
2.01%
Us Postal Service - Bulk Mail
Postal Service
616
7
2.28%
626
5
2.11%
City Of Federal Way
Government Services
476
8
1.76%
440
7
1.49%
Wal-Mart Supercenter #3794
Retail
386
9
1.43%
-
-
0.00%
Davita
Health Services
318
10
1.18%
-
-
0.00%
Source: City of Federal Way Business License
Note: Principal Employers - includes both full-time and part-time employees.
City of Federal Way / 113
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)
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
2013
162
22,891
369
33,260
131
5,442
Sources & Notes:
(A) Federal Way Community & Economic Development Department. Commercial construction includes alterations.
Other building -related permits (plumbing, mechanical, fire alarm, etc.) numbering 3,287
and valued at $5,500,130 have been excluded.
City of Federal Way / 114
CAPITAL ASSETS B) FUNCTION
Last Ten Fiscal 1 cars
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Transportation
Street (Center Line Miles)
224.48
230.84
233.84
233.84
234.72
234.72
242.90
248.23
248.23
249.25
Signals WSDOT-owned and maintained
4
4
5
5
5
5
5
5
6
6
Signals City -owned & County -maintained
71
71
74
74
76
76
76
76
77
77
Street lights City -owned and maintained
1,050
1,050
1,214
1,214
1,463
1,467
1,509
1,554
1,618
1,705
Street lights City -owned and PSE-maintains
644
644
644
644
644
644
644
644
644
644
Street lights PSE-owned and maintained
1,975
1,975
1,975
1,975
1,975
1,975
1,975
1,975
1,975
1,975
Culture & Recreation
Developed Parks - Acreage
500.25
522.9
522.9
524.49
524.49
524.49
524.49
524.49
579.86
579.86
Developed Parks - # of Parks
32
32
32
32
32
32
32
32
29
29
Undeveloped Parks - Acreage
356.24
543.5
543.5
543.46
551.12
551.12
551.12
551.12
539.43
539.43
Undeveloped Parks - # of Parks
21
21
21
21
22
22
22
22
22
22
Tennis Courts City -Owned
9
11
11
11
11
11
11
11
9
9
Tennis Courts - Public
16
22
22
22
22
22
22
22
25
25
Swimming Pools City -Owned
1
1
1
1
1
1
1
1
2
2
Swimming Pools County -Owned
1
1
1
1
1
1
1
1
3
3
Trails - Miles
4
6
6
6
6
6
6
6
9
9
Trails -# of Trails
2
2
2
2
3
3
3
3
6
6
Community Centers/Recreation Facilities
2
2
2
2
1
1
1
1
1
1
Source: City of Federal Way Public Works and Parks Department
City of Federal Way / 115
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
SECURITY OF PERSONS & PROPERTY
Police Information
Offenses:
Forcible Rape (including attempts)
50
55
64
48
30
51
50
38
48
35
Robbery
121
153
146
129
170
198
152
119
107
107
Criminal Homicide
-
7
1
3
10
5
5
4
3
6
Aggravated Assault
109
101
120
107
115
115
118
99
150
133
Vehicle Theft
1,118
1,573
1,199
939
816
561
741
694
800
778
Burglary (commercial & residential)
759
800
753
739
800
741
828
752
931
801
Larceny
3,257
3,786
3,230
3,159
2,933
3,231
3,141
3,067
3,409
3,571
Arson
23
25
26
18
13
13
11
11
9
7
Citations:
Traffic
13,219
11,402
11,931
14,043
19,339
20,678
18,094
17,226
13,023
17,558
Red Light Photo
-
-
-
-
3,813
13,002
25,691
15,340
13,455
13,455
ECONOMIC ENVIRONMENT
Building Related Permits & Values
Building Permits
624
880
788
791
605
483
545
482
598
662
Estimated Value (In Millions $)
147.2
$236.5
$151.1
$126.5
$89.4
$79.2
$53.4
$33.0
$58.1
$61.6
Other Building Related Permits
1,958
2,705
2,550
2,690
2,370
2,209
2,423
2,385
2,960
3,827
Estimated Value (In Millions $) $
2.5
$ 3.9
$ 4.2
$ 5.5
$ 7.0
$ 5.6
$ 5.9
$ 6.2
$ 5.4
$ 5.5
Source: City of Federal Way Police Department
and Community
Development
Department
City of Federal Way / 116
CITY GOVERNMENT EMPLOYEES FULL-TIME EQUIVALENT - HISTORY
Department
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Mayor's Office
6.00
6.00
6.00
10.00
9.75
7.63
7.63
5.00
3.00
3.00
Administration
5 00
5.00
5.00
5.50
5.25
3.13
3.13
4.00
3.00
3.00
Economic Development
100
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
4.50
4.50
3.85
4.15
Municipal Court
12.55
12.55
12.55
14.00
14.00
13.00
13.00
13.00
13.00
13.00
Human Resources
6.50
5.00
5.00
5.00
5.25
5.25
5.25
4.50
4.50
4.50
City Clerk
2.00
1.50
1.50
1.50
1.75
1.75
1.75
1.75
1.75
1 75
Human Resources
4.50
3.50
3.50
3.50
3.50
3.50
3.50
2.75
2.75
2.75
Finance
9.50
8.50
8.50
9.50
8.00
7.60
7.60
7.00
7.00
7.00
Administration
1.50
1.50
1.50
1.50
-
-
-
-
-
Finance
8.00
7.00
7.00
8.00
8.00
7.60
7.60
7.00
7.00
7.00
Information System
9.00
8.50
8.50
10.60
10.60
10.00
9.60
7.00
7.00
7.00
Law
10.60
10.60
10.60
13.00
13.00
12.00
12.00
11.00
11.00
12.00
Civil Legal Services
5.80
5.80
5.80
5.80
5.80
4.80
4.80
4.80
4.80
4.80
Criminal Prosecution Services
4.80
4.80
4.80
7.20
7.20
7.20
7.20
6.20
6.20
7.20
Community & Econ Developme
29.60
28.70
28.70
30.49
32.00
30.00
28.90
19.00
21.65
21.19
Administration
4.50
4.50
4.50
4.50
4.50
5.00
5.00
3.50
3.50
3.50
Planning
8.80
8.80
8.80
8.75
8.75
8.00
7.00
6.00
6.00
4.84
Building
12.30
12.30
12.30
13.25
14.25
13.00
13.00
9.00
9.00
10.00
Human Services
3.00
2.50
2.50
3.00
3.50
3.00
3.00
-
2.65
2.35
Neighborhood Development
1.00
0.70
0.70
1.00
1.00
1.00
0.90
-
-
-
Economic Development
-
-
-
-
-
-
-
0.50
0.50
050
Police
155.00
152.00
155.00
169.00
169.00
164.00
161.00
135.00
132.00
136.00
Administration
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
Support Services
54.00
53.00
55.00
61.00
61.00
61.00
58.00
51.00
52.00
43.00
Field Operations
98.00
96.00
97.00
105.00
105.00
100.00
100.00
81.00
77.00
90.00
Parks, Ree. & Cultural Svcs.
30.40
30.20
31.20
44.25
44.25
39.75
39.75
36.45
36.45
34.10
Administration
1.80
1.80
1.80
1.80
2.80
1.35
1.35
1.35
1.35
1.35
Planning
1.00
1.00
1.00
1.00
-
-
-
-
-
-
Kenneth Jones Pool
3.00
3.00
3.00
-
-
-
-
-
-
General Recreation
6.60
6.60
6.60
7.10
7.10
4.80
4.80
5.50
5.50
5.50
Community Center
-
-
-
12.35
12.35
13.35
13.35
13.35
13.35
11.00
Dumas Bay Centre
2.00
2.00
3.00
3.00
2.75
2.75
2.75
2.75
2.75
2.75
Knutzen Family Theatre
1.50
1.50
1.50
1.50
1.75
-
-
-
-
-
Parks Maintenance
14.00
13.80
13.80
17.00
17.00
17.00
17.00
13.00
13.00
13.50
Building
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
-
Public Works
41.60
41.60
42.60
44.00
44.00
42.95
41.95
38.95
38.95
38.95
Administration
2.10
2.10
1.90
1.85
1.85
2.35
2.35
2.25
2.20
2.25
Development Services
5.80
5.80
6.50
6.45
6.45
4.45
4.45
4.20
4.20
3.70
Traffic Services
5.10
5.10
5.10
6.10
6.10
6.10
5.10
2,35
2.35
3.85
Street Services
11.70
11.70
11.00
11.50
11.00
10.50
10.50
10.60
10:60
10.60
Emergency Management
-
-
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Solid Waste & Recycling
1.60
1.60
1.70
1.70
1.70
1.70
1.70
1.70
1.70
1.70
Surface Water Management
15.30
15.30
15.40
15.40
15.40
16.35
16.35
16.35
16.40
15.35
Fleet & Equipment
-
-
0.50
0.50
0.50
0.50
0.50
0.50
Total
314.25
307.15
312.15
353.34
353.35
335.68
331.18
281.40
278.40
280.89
Source: City of Federal Way Finance Division
City of Federal Way / 117
MAYOR
DEPUTY MAYOR
COUNCIL MEMBERS
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
DECEMBER 31, 2013
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 ANNUALSALARY
SKIP PRIEST
$112,800
JIM FERRELL
$13,800
KELLY MALONEY
$13,800
SUSAN HONDA
$13,800
JEANNE BURBIDGE
$13,800
BOB CELSKI
$13,800
MARTIN MOORE
$13,800
DINI DUCLOS
$13,800
ADMINISTRATIVE STAFF
EMPLOYEE ANNUALSALARY
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.
City of Federal Way / 118
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.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Fire and Other Responses 2,896 3,210 865 639 1,083 1,147 1,041 934 1,363 968
Emergency Medical 8,263 8,636 11,164 11,350 12,058 11,077 11,460 11,914 12,571 12,950
PUBLIC EDUCATION
23 Elementary Schools
7 Middle Schools (incl. Public Academy)
5 High Schools
5 Altemative\InternetAcademy (K-12)
3,209 Staff members
TAXABLE SALES (in millions)
Retail Sales
Real Estate Sales
Source: ( South King County Fire and Rescue
Federal Way Public School
City of Federal Way Finance Division
2004
2005
2006
2007
2008
2009
2010
2011
2012
21113
9,916
9,806
9,733
9,612
9,594
9,594
9,560
9,673
9,229
9,777
5,476
5,271
5,183
5,139
5,234
5,203
5,235
5,205
5,041
5,050
6,650
7,004
6,954
6,720
6,531
6,637
6,547
6,409
6,018
6,341
353
302
314
304
263
266
288
321
377
386
22,395 22,383 22,184 21775 21622 21700 21630 21,608 20,665 21,554
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$1,239 $1,331 $1,471 $1,540 $1,458 $1,257 $1,261 $1,277 $1,239 $1,335
$616 $939 $988 $963 $536 $208 $238 $315 $303 $399
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CITY OF
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