2016 Annual Comprehensive Financial Report (16-001)i?d
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City of Federal Way History —
The earliest recorded accounts of the Federal Way area tell of Native American families who resided in the area of the
Muckleshoot Reservation on the east side of the Green River Valley and traveled west to the shores of Puget Sound for the
plentiful fisheries resources. Generations of Muckleshoot Indians wore a westward trail across the heavily forested plateau to the
area which is now Saltwater State Park. The arrival of the white man in the nineteenth century resulted in a steady decline in the
Indian population and by 1890, nearly the entire population had disappeared from the area. Isolated on a triangular shaped plateau
rising steeply from Puget Sound, the Federal Way area had little waterfront access or roadways and accordingly, was sparingly
developed compared to Tacoma and Seattle. As late as the turn of the century, the original settlers at Dash Point and Dumas Bay
had to row to Tacoma for supplies and mail. Old Military Road, constructed around 1856 and extending north from Fort
Steilacoom, past Star Lake to Seattle and Fort Lawton, was the first road through the area.
Over time, narrow dirt roads were added to provide east/west access and by 1900, a road was constructed between Star Lake and
Redondo. The second crossroad, the "Seattle Road," connected old Military Road and Kent. The Seattle -Tacoma Interurban Line,
completed in 1901, provided a fast and easy way to reach these urban cities. Improved access brought many visitors to the area
and Star Lake became a popular summer recreation site.
By the 1920s, Federal Highway 99, the interstate that linked the western states from north to south, was complete. At this time,
Federal Way was still primarily forest and farmland. Fred Hoyt had a cabin on Dumas Bay and started a road to Tacoma (still
called Hoyt Road). The timber companies, which had a major logging operation going, built an early railroad line and were
instrumental in getting Marine View Highway (now Dash Point Road) built in the early 1920s. This roadway spurred
development along the coastline. Soon thereafter, Peasley Canyon Road was built to connect Military Road with the Auburn
Valley. This road later became known as South 320th Street. In these early days, roadways set the stage for development in the
area and they still play an important role in the City today.
By the start of World War II, a number of small, thriving communities made up the area that is now Federal Way. Some
communities were clustered around lakes, such as Steel Lake, Star Lake, and Lake Geneva. Others were sited to take advantage of
the view of Puget Sound, like Adelaide and Buenna. As each of these communities grew, residents built small schoolhouses for
their children. By the late 1940s, King County consolidated the many individual red schoolhouses into the Federal Way School
District, from which the City gets its name. During this same period, a library was built along the edge of Highway 99, and
between 308th Street and 320th Street, a small "downtown" developed with a general store, lumber yard, realty office, beauty
parlor, feed store, and gas station. By the end of the 1950s, the ten blocks between 308th and 320th Streets became the first
roadside commercial district. One of the more unique developments was Santa Faire, a family oriented theme park. New shopping
areas were added around the park, helping to create a "community focus" for the residents of the area.
As this commercial area developed, the rest of Federal Way was changing as well. The Boeing Company expanded their
operations in Renton and the Kent Valley and began advertising nationally for engineers. Those engineers in turn began roaming
the wooded acreage in Federal Way in search of housing. One of the earliest residential developments was Marine Hills, built in
1958 overlooking Puget Sound. Weyerhaeuser, one of the early timber companies, had large land holdings in the area and began
to develop their land into high quality housing with amenities like golf courses.
Weyerhaeuser's development company also began developing commercial property, creating the West Campus business park.
The plan was to integrate offices and businesses with lush landscaping. Though initially the corporate office market was not
strong, West Campus has grown almost to capacity, providing space for many civic buildings such as City Hall, the police station,
the area's major health care centers, and higher density housing.
Another major landmark in the area is SeaTac Mall (now The Commons), built in the mid- 1970s on what was farmland south of
320th Street. The Mall is one of the largest in South King County and is the anchor for retail development in the area. The Mall
was a result of population growth in the region and its location was determined by the 320th Street intersection with Interstate 5.
The Interstate supplanted Highway 99 as the main artery for commuter traffic in the County.
By the mid 1980s, South King County was growing quickly. Retail growth occurred along Highway 99, especially at the 320th
Street intersection. Roads and office space were developed to accommodate the increased growth. Residential growth was also
prominent, following plans developed by King County, with a large number of apartment homes. The changes to the community,
with increased housing and traffic, created a movement for greater self-determination. In 1989, the citizens of this area voted for
incorporation and the City of Federal Way was born, incorporating on February 28, 1990 with 58,000 residents.
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CITY of
Federal Way
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2016
City of Federal Way
33325 8th Avenue South
Federal Way, Washington 98003
(253) 835-2520
www.ciiyoffederalwg
Prepared by the Finance Department
Finance Director
Ade' Ariwoola
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2016
Table of Contents
Page
INTRODUCTORY SECTION
Letterof Transmittal...........................................................................................................................
City Officials and Administrative Officers.......................................................................................
City Functional Organization Chart ....................................................................................................
GFOA Certificate of Achievement.....................................................................................................
FINANCIAL SECTION
Independent Auditor's Report ............................................................................................................
10
Management's Discussion and Analysis............................................................................................
13
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position................................................................................................
27
Statement of Activities...................................................................................................
28
Fund Financial Statements:
Balance Sheet — Governmental Funds.............................................................................
29
Statement of Revenues, Expenditures, and Changes in Fund Balances —
GovernmentalFunds.................................................................................................
31
Reconciliation of the Statement of Revenues, Expenditures, and Change
In Fund Balances of Governmental Funds to the Statement of Activities ...............
33
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
GeneralFund...........................................................................................................
34
StreetFund...............................................................................................................
35
UtilityTax Fund......................................................................................................
36
Statement of Net Position — Proprietary Funds.................................................................
37
Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds
38
Statement of Cash Flows — Proprietary Funds..................................................................
39
Notes to the Basic Financial Statements...........................................................................
41
Required Supplementary Information:
Schedule of Proportionate Share of Net Pension Liability.....................................................
76
Schedule of Employer Contributions......................................................................................
78
Combining and Individual Fund Statements and Schedules — Nonmajor Governmental Funds:
FundDescription.......................................................................................................................
79
CombiningBalance Sheet.........................................................................................................
80
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ...................
84
Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual
ArterialStreet Fund.................................................................................................
88
Solid Waste & Recycling Fund................................................................................
89
Special Contracts/Studies Fund...............................................................................
90
Hotel/Motel Lodging Tax Fund...............................................................................
91
Federal Way Community Center Fund....................................................................
92
TrafficSafety Fund..................................................................................................
93
Community Development Block Grant Fund..........................................................
94
Paths& Trails Fund.................................................................................................
95
Individual Fund Statements and Schedules — Debt Service Fund:
FundDescription........................................................................................................................
97
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ......
98
Combining and Individual Fund Statements and Schedules — Internal Service Funds:
FundDescription.................................................................................................................... 99
Combining Statement of Net Position..................................................................................... 100
Combining Statement of Revenues, Expenses and Changes in Fund Net Position ................. 102
Combining Statement of Cash Flows..................................................................................... 104
Supplemental Information:
Schedule of State Financial Assistance..................................................................................
108
Schedule of Expenditures of Federal Awards........................................................................
109
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source.........................................................................................
112
Schedule by Function and Activity ........................................................................................
113
STATISTICAL SECTION
NetPosition by Component............................................................................................................
116
Changesin Net Position..................................................................................................................
117
Government -wide Revenues by Source and Expenditures by Function .........................................
118
Fund Balances of Governmental Funds..........................................................................................
119
Changes in Fund Balances, Governmental Funds..........................................................................
120
Assessed and Estimated Actual Value of Taxable Property...........................................................
121
Property Tax Rates and Levies, Direct and Overlapping Governments .........................................
122
PrincipalTaxpayers........................................................................................................................
123
Property Tax Levies and Collections..............................................................................................
124
Ratio of Outstanding Debt by Type................................................................................................
125
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita .....................................................
126
Computation of Direct and Overlapping Debt................................................................................
127
Computation of Limitation of Indebtedness....................................................................................
128
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures Net of Debt Service Expense ................
129
DemographicStatistics...................................................................................................................
130
PrincipalEmployers.......................................................................................................................
131
Property Value and Construction...................................................................................................
132
CapitalAssets by Function.............................................................................................................
133
Operating Indicators by Function...................................................................................................
134
City Government Employees Full -Time Equivalent - History .......................................................
135
Salaries and Surety Bonds of Principal Officials............................................................................
136
Miscellaneous Statistical Information............................................................................................
137
Principal Taxpayers — Sales Taxes.................................................................................................
138
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Federal Wav / I
CITY OF
Federal Way
June 15, 2017
People of the City of Federal Way
Honorable Mayor and City Council
I am pleased to submit to you the 2016 Comprehensive Annual Financial Report (CAFR) of the City of Federal Way,
Washington. This report is published annually as the official annual financial report and complies 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 City management. All disclosures necessary to enable the reader to gain an understanding of the
City's financial activities have been included.
The City operates under a system of accounting and internal controls that are concerned with safeguarding of assets and the
reliability of financial records. The definition of accounting control assumes reasonable, but not absolute assurance that the
objectives expressed in it will be accomplished by the system. The concept of reasonable assurance recognizes that the cost of
internal control should not exceed the benefits expected to be derived.
This transmittal letter is designed to complement the Management Discussion & Analysis (MD&A) and should be read in
conjunction with it. The City's MD&A can be found immediately following the Independent Auditor's Report.
REPORTING ENTITY
The City is a noncharter Optional Code City with a Mayor -Council form of government. It was incorporated on February 28,
1990, and is governed under the provisions of the Optional Municipal Code of the Revised Code of Washington. Optional
Code City status increases the City's operating authority by extending it to the powers of all four city classifications which
exist in Washington Law.
The City Council consists of seven council members, all of whom are elected at large by citizens of Federal Way to serve four-
year terms. In November 2009, the citizens of Federal Way approved Proposition 1 to change the form of government from a
City Manager -Council run government to an elected Mayor -Council government. Federal Way voters elected former City
Councilmember and King County Senior Deputy Prosecuting Attorney Jim Ferrell as Mayor on November 5, 2013.
City services provided include: police protection, construction and maintenance of streets, building inspection, municipal court
services, jail services, planning and zoning, park services, emergency management services, surface water management and
general administration, including finance. Services for a land use hearing examiner are contracted. The City has twelve major
departments consisting of (1) Mayor's Office; (2) City Council; (3) Law; (4) Finance; (5) Human Resources; (6) Information
Technology; (7) Municipal Court, (8) Parks and Recreation; (9) Public Works; (10) Police; (11) Community Development; and
(12) Performing Arts Event Center. Fire protection and emergency medical services are provided by South King Fire &
Rescue. Lakehaven Utility District delivers water and sewer services. King County Metro provides public transportation
services. Public housing services are the primary focus of the King County Housing Authority. The King County Library
System engages City residents through its library and reference services. School District No. 210 offers educational programs
for kindergarten through high school students, in addition to vocational training.
ECONOMIC FACTORS AFFECTING FINANCIAL CONDITION
The current economic condition has made considerable strides since the post Great Recession era as employment and inflation
levels are consistent with the Federal Reserve's mandate for maximum sustainable employment and price stability. Consumer
confidence levels are at its best since pre -Great Recession levels.
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Nationally, according to Bureau of Labor Statistics, the CPI rose 2.1 percent in 2016, a larger increase than the 0.8 percent rise
in 2014 and the 0.7 percent advance in 2015. This also represented a larger increase than the 1.8 percent average annual
increase over the past 10 years. All the major component energy indexes rose in 2016. The energy index rose 5.4 percent in
2016 after declining in 2015 and 2014. The gasoline index increased 9.1 percent in 2016 after sharp decreases in 2015 and
2014. The index for natural gas also turned up in 2016, rising 7.8 percent after a 14.9-percent decline the prior year. The
electricity index rose modestly in 2016, increasing 0.7 percent after a 1.2-percent decline in 2015. The energy index rose at a
0.4 percent annual rate over the past 10 years. The food index declined in 2016, falling 0.2 percent. This was its first yearly
decline since 2009. The food at home index, which fell 0.4 percent in 2015, decreased 2.0 percent in 2016. This is the first time
the food at home index declined in consecutive years since it declined four years in a row from 1952 through 1955. All six
major grocery store food group indexes declined in 2016. The index for meats, poultry, fish, and eggs, which declined 2.2
percent in 2015, fell 5.4 percent in 2016, with the index for eggs declining 33.8 percent. The index for fruits and vegetables fell
2.4 percent in 2016 after rising in 2015. The dairy and related products index fell 1.3 percent in 2016 following a 3.9-percent
decline in 2015. The indexes for nonalcoholic beverages, cereals and bakery products, and other food at home posted small
declines in 2016 after rising in 2015. The index for food away from home rose 2.3 percent in 2016 after a 2.6-percent increase
the prior year. Over the last 10 years, the food index rose at an average annual rate of 2.3 percent. The food at home index rose
at a 2.0 percent rate, and the food away from home index increased at an average annual rate of 2.7 percent since December
2006.
The index for all items less food and energy rose 2.2 percent in 2016, similar to its 2.1-percent increase in 2015. The shelter
index continued to steadily accelerate, rising 3.6 percent in 2016 after increasing 3.2 percent in 2015, 2.9 percent in 2014, and
2.5 percent in 2013. The rent index rose 4.0 percent in 2016, while the index for owners' equivalent rent increased 3.6 percent.
The medical care index, which rose 2.6 percent in 2015, increased 4.1 percent in 2016. This was its largest December -to -
December increase since 2007. The index for prescription drugs rose 6.2 percent, and the hospital services index increased 4.4
percent. The index for motor vehicle insurance rose 7.0 percent in 2016, its largest annual rise since 2002. The education index
increased 2.7 percent in 2016, compared to a 3.7 percent rise the prior year. The index for tobacco rose 3.6 percent, and the
alcoholic beverages index increased 1.4 percent. The recreation index rose 0.8 percent in 2016, similar to its 2015 advance of
0.7 percent. The index for new vehicles also continued to rise modestly, increasing 0.3 percent in 2016 following a 0.2-percent
increase in 2015 and a 0.5 percent advance in 2014.
Several indexes declined in 2016. The index for airline fares fell for the fourth year in a row, falling 4.7 percent. The index for
used cars and trucks, which increased in 2015, fell 3.5 percent in 2016. The index for communication fell for the seventh year
in a row, falling 2.6 percent, and the index for household furnishings and operations declined 1.1 percent. The apparel index
declined slightly in 2016, falling 0.1 percent, its third consecutive yearly decline.
The Seattle -Tacoma -Bremerton, WA's CPI for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.5 percent in
December 2016 compared to increase of 2.2% in 2015. The national CPI-W increased 1.0% for 2016. The Seattle -Tacoma -
Bellevue, WA annual unemployment rate for 2016 was 4.0% down from 4.9% in 2015. The last time Seattle -Tacoma -Bellevue
annual unemployment rate was below 4.0% was 2007 which was at 3.7% just before the "mortgage market" crash in 2008.
ECONOMIC TRENDS
Federal Way is the ninth most populated city in the state of Washington out of 281 cities according to U.S. Census.gov with
96,757 people after City of Renton with 100,953 and closely followed by Spokane Valley at 96,340 then Yakima at 93,986. In
2015, King County median household income was $75,302; Federal Way $55,673, Renton $64,802, Spokane Valley $47,430,
and Yakima $40,726. The City is located on a plateau adjacent to Puget Sound in King County, eight miles north of downtown
Tacoma and 25 miles south of downtown Seattle. The City occupies approximately 22.5 square miles and is served by
Interstate 5 and state highways 99 and 509.
In 2016, there were 36,424 housing units in Federal Way, an increase of 1.9% over 2015 of 35,752 housing units. Of these
units, 55% or 20,142 were single family homes, 41% or 15,031 were multi -family units, and 4% or 1,251 were mobile homes
and trailers.
The community is residential and commercial, with the populace employed locally and in the neighboring cities such as
SeaTac, Kent, Tacoma, Bellevue, and Seattle. Employment in Federal Way is highly concentrated in retail and services sectors
which respond primarily to the needs of the local market area population. The employment figure for 2016 is estimated at
31,871. Major employers are; St. Francis Community Hospital, Federal Way Public Schools, World Vision, Wild Waves, U.S.
Postal Services, and Wal-Mart.
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Sales tax collected in 2016 total $14.2 million which was $925,411 more than $13.3 million of 2015. The retail sector of the
local economy is anchored by the following areas; the first is South 3481h 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, Kohls, Dicks Sporting Goods and many other small businesses adjacent to the
area. According to a listing of businesses registered with the City of Federal Way and sorted by the Standard Industrial
Classification, the business economy appears to be configured as follows: retail trade 49%; services 23%; construction 14%;
information 5%; wholesale trade 4%, manufacturing 1%, and other 4%.
In 2016, the total assessed value of property in Federal Way was $9.5 billion, which was approximately 7.0% higher than the
2015 assessed valuation of $8.9 billion.
Real Estate sales increased 77% to approximately $1.06 billion in 2016 as compared to $599 million in 2015. A total of 544
building permits in 2016 compared to 633 in 2015 and 3,429 other building related permits compared to 3,868 that were issued
in 2015. Estimated market value for permit in 2016 was $57.0 million and in 2015 was $198.1 million. Significant building
permits include: Federal Way High School, Kitts Corner Apartments, Crestview West Apartments, Highpoint Apartments, and
Christian Faith School.
LONG-TERM PLANNING
The City's fiscal policy requires the City to prepare long-range projections for six years beyond the current budget period. The
projection extends current operations to the future to see if the services are sustainable and determine the magnitude of future
financing gaps, if any. This glimpse into the future allows the City to proactively plan and implement corrective measures over
time to avoid sudden drastic changes in service levels or in revenue/tax policies. In addition, the City's fiscal policy requires
the City to balance its ongoing services with ongoing revenues.
MAJOR INITIATIVES AND ACCOMPLISHMENTS
During 2016, the City of Federal Way completed construction of several hot -mix asphalt overlays totaling over $1.5M; a Safe
Routes To Schools sidewalk project at Sacajawea Middle School totaling over $1.4M which was 75% grant funded; the 1st
Ave at 328th safety improvement project for $1.2M which added a traffic signal; S352nd Street Extension Project which
provided a new arterial between SR 99 and SR 161 totaling over $4.2M which was 69% grant funded; Pete von Reichbauer
Way S and S 316th Street Sidewalks totaling over $0.4M; City -Wide Safety Project (flashing yellow arrows) for over $0.7M
which was 100% grant funded; and the Pedestrian Safety crossing improvements for over $0.5M.
Construction began on Pacific Hwy HOV Phase 5 (S 359th to S 340th Street) Project which will extend the 7-lane Pacific
Highway urban cross section. This project reached approximately 10% completion in 2016 and construction will continue
through 2017 and into 2018.
In addition, 2016 continued the city's success in securing grant funding including a $3.4M Transportation Improvement Board
(TIB) grant for the S 356th — SR99 to SR 161 project; a $0.8M Federal Grant for 21st Ave Sidewalks; two Federal grants
totaling $1.9M for Adaptive signal control; and a Federal Safety Grant for $0.8M for the Military Road and S 298th Street
Compact Roundabout.
Located at 31510 20th Avenue South, the City plans for the grand opening its Performing Arts and Event Center (PAEC) is the
summer of 2017. The City started construction of this project in 2015. The City is working with a private developer to build a
hotel next to the PAEC. South of the PAEC is the Town Square Park, the City built an urban park with amenities, including a
spray park, walking trail, and playground, and it opened in 2016.
The City signed a memorandum of understanding with the School District, Highline Community College and the University of
Washington to work collaboratively toward bringing higher education classes to Federal Way.
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.
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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.
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 2016 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 in 2016; which is the 27th 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, 2015. The City of Federal Way has received a Certificate of Achievement for the last twenty-six
years (fiscal years ended 1990 — 2015). 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, 2015 and 2016. 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
Federal Wav / S
2016
CITY OFFICIALS
EXECUTIVE & LEGISLATIVE BODY
JEANNE BURBIDGE
Deputy Mayor
SUSAN HONDA
Councilmember #3
JIM FERRELL
Mayor
LYDIA ASSEFA-DAWSON
Councilmember #1
MARK KOPPANG
Councilmember #5
KELLY MALONEY*
Councilmember #2
MARTIN A. MOORE
Councilmember #6
DINI DUCLOS
Councilmember #7
Elected/
Position
Elected/Appointed*
Term
Appointed
Email
Phone
Mayor
Jim Ferrell
1/l/14-12/31/17
11/26/13
Jim.Ferrell@cityoffederalway.com
(253) 835-2402
Position #1
Lydia Assefa-Dawson
1/l/16-12/31/19
11/24/15
Lydia.Assefa-Dawson@cityoffederalway.com
(253) 835-2401
Position #2
Kelly Maloney
1/l/14-12/31/16
11/26/13
Kelly.Maloney@cityoffederalway.com
(253) 835-2401
Position #3
Susan Honda
1/l/16-12/31/19
11/24/15
Susan.Honda@cityoffederalway.com
(253) 835-2401
Position #4
Jeanne Burbidge
1/l/14-12/31/17
11/26/13
Jeanne.Burbidge@ctiyoffederalway.com
(253) 835-2401
Position #5
Mark Koppang
1/l/16-12/31/19
11/24/15
Mark.Koppang@cityoffederalway.com
(253) 835-2401
Position #6
Martin A. Moore
1/l/14-12/31/17
11/26/13
Martin.Moore@cityoffederalway.com
(253) 835-2401
Position #7
Dini Duclos
1/1/16-12/31/19
11/24/15
Dini.Duclos@cityoffederalway.com
(253) 835-2401
*Councilmember Kelly Maloney resigned effective 12131116, Councilmember Bob Celski was appointed
to fill the
remaining unexpired term on
115117.
Citv ofFederal Wav / 6
2017
CITY OFFICIALS
EXECUTIVE & LEGISLATIVE BODY
JEANNE BURBIDGE
Deputy Mayor
SUSAN HONDA
Councilmember #3
JIM FERRELL
Mayor
LYDIA ASSEFA-DA W SON
Councilmember # 1
MARK KOPPANG
Councilmember #5
BOB CELSKI*
Councilmember #2
MARTIN A. MOORE
Councilmember #6
DINI DUCLOS
Councilmember #7
Elected/
Position
Elected/Appointed*
Term
Appointed
Email
Phone
Mayor
Jim Ferrell
1/1/14-12/31/17
11/26/13
Jim.Ferrell@cityoffederalway.com
(253) 835-2402
Position #1
Lydia Assefa-Dawson
1/l/16-12/31/19
11/24/15
Lydia.Assefa-Dawson@cityoffederalway.com
(253) 835-2401
Position #2
Bob Celski*
1/5/17-11/28/17
01/05/17
Bob.Celski@cityoffederalway.com
(253) 835-2401
Position #3
Susan Honda
1/l/16-12/31/19
11/24/15
Susan.Honda@cityoffederalway.com
(253) 835-2401
Position #4
Jeanne Burbidge
1/1/14-12/31/17
11/26/13
Jeanne.Burbidge@ctiyoffederalway.com
(253) 835-2401
Position #5
Mark Koppang
1/l/16-12/31/19
11/24/15
Mark.Koppang@cityoffederalway.com
(253) 835-2401
Position #6
Martin A. Moore
1/l/14-12/31/17
11/26/13
Martin.Moore@cityoffederalway.com
(253) 835-2401
Position #7
Dim Duclos
1/l/16-12/31/19
11/24/15
Dini.Duclos@cityoffederalway.com
(253) 835-2401
*Councilmember Bob Celski was appointed on 1115117 to fill the unexpired term of Councilmember Kelly Maloney.
Federal Wav / 7
JUDICIAL BRANCH
Elected/
Office
Position
Employee
Appointed
Term �
Contact Information
Presiding
David Larson
Elected
N/A 3/3/2008
David.Larson@cityoffederalway.com
Judge
(253)835-3012
Judge
Rebecca
Elected
N/A 1/l/2010
Rebecca. Robertson@cityoffederalway.com
Robertson
(253) 835-3025
Court
Susanne White
Appointed
N/A 2/22/2010
Susanne.White@cityoffederalway.com
Administrator
(253) 835-3000
CITY ADMINISTRATION (In alphabetical order)
Emp t Contact information
City Attorney
Ryan Call
3/9/2017
Ryan.Call@cityoffederalway.com
(253) 835-2572
City Clerk
Stephanie
10/7/2014
Stephanie.Courtney@cityoffederalway.com
Courtney
(253) 835-2540
Community Development
Brian Davis
11/1/2016
Brian.Davis@cityoffederalway.com
Director
(253) 835-2612
Economic Development
Tim Johnson
9/15/2014
Tim.Johnson@cityoffederalway.com
Director
(253) 835-2412
Finance Director
Ade Ariwoola
4/1/2014
Ade.Ariwoola@cityoffederalway.com
(253) 835-2520
Human Resources Manager
Jean Stanley
1/1/2011
Jean.Stanley@cityoffederalway.com
(253) 835-2532
IT Manager
Thomas
7/1/2011
Thomas.Fichtner@cityoffederalway.com
Fichtner
(253) 835-2547
Parks Director
John Hutton
7/23/2014
John.Hutton@cityoffederalway.com
(253) 835-6910
Performing Arts & Event
Theresa Yvonne
03/10/2015
Theresa.Yvonne@cityoffederalway.com
Center Executive Director
(253) 835-2414
Police Chief
Andy Hwang
3/18/2014
Andy.Hwang@cityoffederalway.com
(253) 835-6716
Public Works Director
Marwan
7/1/2014
Marwan.Salloum@cityoffederalway.com
Salloum
(253) 835-2710
Citv of Federal Wav / 8
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Federal Wav / 9
19
Government Finance UFlicm Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Federal Way
Washington
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
Decembeir 31, 2015
alecutive Uirec[oricHo
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, 2015. This was the twenty-sixth 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.
Federal Wav / 10
Office of the Washington State Auditor
Pat McCarthy
June 14, 2017
Mayor and City Council
City of Federal Way
Federal Way, Washington
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of Federal Way, King
County, Washington, as of and for the year ended December 31, 2016, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the City's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the 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.
Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (360) 902-0370 • Pat.McCarthy@sao.wa.gov
Federal Wav / 11
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, 2016, 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 13 through 23 and pension plan information on pages 76 through 78 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
financial statements and supplementary information on pages 79 through 114 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 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.
Federal Wav / 12
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we will also issue our report dated June 14, 2017, on
our consideration of the City's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report
will be issued under separate cover in the City's Single Audit Report. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results
of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing Standards in
considering the City's internal control over financial reporting and compliance.
Sincerely,
�
Pat McCarthy
State Auditor
Olympia, WA
Citv ofFederal Wav / 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Federal Way, we offer readers of our annual financial report a narrative overview, and an
analysis of the financial activities of the City of Federal Way for the fiscal year ended December 31, 2016. We encourage
readers to consider the information in conjunction with the preceding letter of transmittal, the financial statements and notes to
the financial statements that follow.
FINANCIAL HIGHLIGHTS
• The total assets plus deferred outflows of the City of Federal Way exceeded its liabilities plus deferred inflows at
December 31, 2016 by $569.0 million (Net Position). Capital Assets (net of depreciation and related debt) account for
87.9% of this amount with a value of $499.9 million. Of the remaining net position of $69.1 million, $47.7 million may be
used to meet the government's ongoing obligations to citizens and creditors, without legal restriction while the $21.4
million are restricted for specific use. (See page 27).
• The City's total net position increased by $13.7 million, or 2.5% above 2015 as referenced on page 15. Governmental
activities increased by $14.3 million or 2.9% while business -type activities decreased by $0.6 million or 0.9%. The
increase in Governmental activities is primarily due to the increase in capital assets (See note 8 on page 56) and the
decrease business -type activities is primarily due to a transfer to Transportation capital fund. More detail is described in
the analysis below.
• Net investment in capital assets increased by $16.6 million (See note 8 on page 56) and unrestricted net position decreased
by $4.1 million respectively under 2015 as referenced on page 15.
• Restricted Net Position increased by $1.2 million or 5.4% and is primarily for funding of capital projects and debt service.
(page 15)
• Long term liabilities increased by $4.6 million or 9.7% primarily due to the addition of $2.6 million in net pension liability
(see note 11 on page 66) for GASB 68 pension reporting, $2.9 million addition of 2016 Section 108 HUD Loan for
Performing Arts & Event Center, offset by long term debt decrease of $0.9 million for General obligation debt, and public
works trust fund loans that decreased by $0.1 million during the current fiscal year. (See Note 11 on page 66).
• Governmental fund balances at year-end were $49.3 million, a $2.4 million or 5% decrease from the prior year. Of the
$49.3 million, $13.8 million, or 28.0% of the governmental fund balance is unassigned and available to fund ongoing
activities. The remaining $35.5 million is earmarked for debt service, paths & trails reserve, hotel/motel lodging tax,
police special funds, petty cash/change funds, court trust fund, advance travel, strategic opportunities reserve, streets
maintenance and capital projects. (See page 30 and page 50).
• Unrestricted or Unassigned fund balance in the General Fund was $13.8 million, which decreased by $0.6 million or 4.0%
from the prior year.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of Federal Way's basic financial statements.
The basic financial statements are comprised of three components:
1) government -wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.
In addition to the required components, the City's annual report also includes other supplementary information. The first set
of supplementary information is the Combining Statements. These provide Balance Sheets, Statement of Revenues,
Expenditures, and Changes in Fund Balances with Budget to Actual Comparisons, Statement of Net Position, and Cash Flows
for all proprietary and internal service funds. The other set of supplementary information is the Statistical Section. This
section provides a one to ten-year view of the City's revenues, expenditures, debt obligations and capacity, the City's largest
taxpayers, and those entities with the largest employment within the City of Federal Way. This section provides a long-term
perspective on the City's economy.
ON of Federal Wav / 14
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the City of Federal
Way's finances, in a manner similar to a private -sector business.
A) The statement of net position presents information on all of the City of Federal Way's assets plus deferred outflows
and liabilities plus deferred inflows, with the difference between the two reported as net position. This statement
serves a purpose similar to that of a balance sheet in private business. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
B) The statement of activities presents information showing how the City's net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave).
Both of the government -wide financial statements distinguish functions of the City of Federal Way that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover
all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities
of the City of Federal Way include law enforcement and public safety, construction and maintenance of streets, building
inspection, municipal court services, jail services, community planning and development services, parks and recreation
facilities, other community services and general administration. The business -type activities of the City include surface water
management and the control and operation of Dumas Bay Centre, a multi -use facility that offers business and retreat
accommodations, recreation and cultural arts classes, and a performing arts facility.
The City has no separately identified component units included in the government -wide financial statements. The City has
reported its investment in 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 to meet certain objectives. Funds are often set up in accordance with special regulations, restriction or limitations.
The City of Federal Way uses fund accounting to ensure and show compliance with finance -related legal requirements. The
City's funds are divided into 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 twenty individual governmental funds. The City's seven major governmental funds, the
general fund, street fund, utility tax fund, debt service fund, downtown redevelopment fund, transportation fund, and
performing arts & events center 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 non -major governmental funds. Individual fund data for each of the non -major governmental funds
can be found in combining statements later on in this report.
Citv ofFederal Wav / 15
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, information systems, mail and duplication services, fleet of vehicles and motorized equipment, facilities
management, health insurance, and unemployment services.
Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The
proprietary fund financial statements provide separate information for the Surface Water Management fund and for the Dumas
Bay Centre. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data is provided in the form of combining statements elsewhere in this report.
The proprietary fund financial statements can be found following the governmental fund statements in this report.
Notes to the Financial Statements
The notes provide additional information that is essential to the full understanding of the data provided in the government -wide
and fund financial statements. The notes to the financial statements can be found immediately following the fund financial
statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents the combining statements for
non -major governmental funds, internal service funds, and capital assets of governmental funds.
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 STATUVIFNT OF NEr POSITION
As of December 31, 2016 and 2015
Governmental Activities Business -Type Activities Total
2016 2015 2016 2015 2016 2015
Current and other assets $ 97,131,758 $97,783,028 $ 7,172,823 $7,902,230 $ 104,304,581 $ 105,685,258
Capital assets and CIP,
net ofaccum depreciation 463,159,714 444,173,145 59,348,005 59,382,657 522,507,719 503,555,802
Total assets 560,291,472 541,956,173 66,520,829 67,284,887 626,812,301 609,241,060
Deferred ouflows ofresources 3,934,973 2,144,762 307,122 197,021 4,242,095 2,341,783
Total deferred outflows ofresource 3,934,973 2,144,762 307,122 197,021 4,242,095 2,341,783
Long-term liabilities 49,981,388 45,519,660 1,962,748 1,809,878 51,944,136 47,329,538
Other liabilities 9,162,665 5,190,221 615,837 638,452 9,778,502 5,828,673
Total liabilities 59,144,053 50,709,881 2,578,585 2,448,330 61,722,639 53,158,211
Deferred inflows ofresources 319,074 2,939,368 28,541 205,131 347,615 3,144,499
Total deferred inflows ofresources 319,074 2,939,368 28,541 205,131 347,615 3,144,499
Net position:
Net investment in:
capital assets
Restricted
Unrestricted
Total net position
440,815,201 424,245,625
21,372,596 20,193,214
42,575,521 46,012, 847
59,059,646 58,998,176
18,438 15,906
5,142,741 5,814,364
499,874,847 483,243,801
21,391,034 20,209,120
47,718,262 51,827,211
$ 504,763,318 $ 490,451,686 $ 64,220,825 $ 64,828,446 $ 568,984,143 $ 555,280,132
Citv of Federal Wav / 16
Analysis of Net Position
Total net position of the primary government of $569.0 million at December 31, 2016 increased by $13.7 million or 2.5%
compared to December 31, 2015. The increase is due to governmental type activities increase of $14.3 million, offset by
business -type activities decrease of $0.6 million. More detail on the changes in net position are described below under
Governmental and Business -Type activities.
The largest component of the City's net position, 88% or $499.9 million, is net investment in capital assets. These capital
assets such as land, streets, trails, parks, police vehicles, and parks equipment are used to provide services to the citizens.
Consequently, these assets are not available to sell and convert to cash for future spending.
Approximately 2.9% or $16.7 million (page 27) of the total net position of the city are restricted for use on capital projects or
are earmarked for current approved capital projects. Some of the major capital projects the funds are being used for include the
trail and pedestrian access improvements, SR99 HOV Lanes Phase 5 project, South 356th Street SR99 - SR161 project, Traffic
safety improvement projects, and Performing Arts and Event Center (PAEC). The City attempts to fund capital construction
projects on a pay-as-you-go basis, aggressively pursuing grant funding and cost sharing with developers to construct large
projects in the City that impact the economy and transportation systems.
The remaining balance of restricted net position of $4.7 million are for: $0.26 million for police special funds, and court trust,
$0.02 million for steel lake and north lake management districts, $0.03 million for prepaid insurance/debt and flex plan, $0.52
million for peg and franchise fees for educational and governmental access services, $0.74 million for lodging tax, $0.57
million for paths and trails, $0.03 million for Community Development Block Grant, and $2.51 million for debt service.
The unrestricted business -type activities portion of $5.1 million; $4.6 million can only be spent on surface water management
and the remaining $0.5 million on improvements to Dumas Bay Centre and Knutzen Family Theatre. Maintenance of catch
basins, pump stations, storm drain flushing, and other capital construction projects such as S 356th Street RDF Retrofit are
examples of utility activities.
Other functions of the City may access the remaining $42.6 million in governmental activities unrestricted net position to meet
ongoing obligation to citizens and creditors. Examples of other City obligations which net position may be used for are public
safety, economic development, parks maintenance, ongoing street maintenance, and committed funds for capital projects.
At the end of the fiscal year, the City of Federal Way reported positive balances in all three categories of net position, for the
government as a whole, as well as for the separate governmental and business -type activities.
Governmental Activities:
Current and other assets decreased by $0.7 million or 0.7% primarily due to a decrease of $2.0 million in net pension asset due
to GASB 68 pension reporting, a decrease of $1.6 million in cash and cash equivalents due to decrease of cash for ongoing
construction of PAEC offset by an increase in Downtown Redevelopment Fund from receipt of LIFT sales tax, offset by an
increase of $1.0 million in accounts receivable comprised of $0.9 million in receivables for utility work performed by the City
for local utilities on Transportation capital projects and $0.1 million in Police off -duty security receivables, and due from other
government of $2.1 million due to additional grant funds from Federal and State agencies being requested for reimbursement.
The remainder $0.2 million is primarily for a reduction in investment in joint venture and taxes receivable.
Capitals assets and CIP, net of accumulated depreciation increased by $19.0 million or 4.3% primarily due to the net addition
of assets in the current year of $19.0 million (See Note 8 on page 56). This is primarily due to a net addition of $19.9 million
in construction in progress for PAEC, transportation infrastructure projects that include roads, sidewalks, streetlights, and
traffic signals for projects such as SR99 HOV Lanes Phase V and South 356th Street SR99 to SR161. In addition, $1.6 million
in land was purchased for transportation projects, and $0.4 million in land was dedicated to the City for right-of-way purposes.
Improvements Other than Buildings net increase of $0.2 million is due to the addition of Town Square Park, offset by current
year depreciation. Machinery & Equipment net increase of $1.0 million is due to the addition of playground equipment at
parks, Information Technology equipment, and vehicles for the City. Buildings net decrease of $1.7 million is primarily due to
current year depreciation for Buildings, offset by addition of buildings at Town Square Park. Infrastructure net decrease of
$2.5 million is primarily due to current year depreciation for infrastructure, offset by the addition of roads, streetlights,
sidewalks, traffic signals, for 1st Ave S at S 328th St, and S 304th St at 281h Ave S Intersection.
Deferred outflows of resources increased by $1.8 million for governmental activities due to lower than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans. (See Note 9 on page 58).
Long-term liabilities increased by $4.5 million or 9.8% due to the addition of $2.3 million net pension liability for GASB 68
state sponsored pension plan, $2.9 million addition of 2016 Section 108 HUD Loan for Performing Arts & Event Center, offset
Citv ofFederal Wav / 17
by a $0.9 million reduction primarily due to paying down the balance on GO Bond, and SCORE facility. (See Note 11 on page
66).
Other liabilities increased by $4.0 million or 76.5% primarily due to additional liabilities at the end of the year of $3.3 million
in accrued vouchers payable comprised of $0.9 million for Performing Arts & Event Center construction, $1.5 million for
Transportation capital projects such as SR99 HOV Lanes Phase V project, $0.3 million for General Fund department services,
and $0.6 million for Information Technology and Fleet & Equipment services, retainage payable increase of $0.7 million
comprised of Performing Arts & Event Center retainage on construction of $0.6 million and Transportation and overlay
projects retainage of $0.1 million.
Deferred inflows of resources decreased by $2.6 million for governmental activities due to lower than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans. (See Note 9 on page 58).
Net investments in capital assets increased by $16.6 million or 3.9% primarily due to an increase capital assets and CIP, net of
accumulated depreciation explained in the above capital assets description (See note 8 and note 15 on pages 56 and 72), offset
by an increase in long-term liabilities related to adding Section 108 HUD Loan for the Performing Arts & Event Center.
Restricted net position represents amounts that must be used in accordance with external restrictions, and increased by $1.2
million or 5.8% from the prior year primarily due to additional restricted funding for capital projects, debt service, peg fees for
government access channel under contracts and studies fund (page 81), paths & trails funding, and lodging tax.
The remaining Unrestricted net position decreased by $3.4 million or 7.5% primarily due to an increase in net pension liability
(GASB 68) of $2.3 million, cash & cash equivalents decrease of $1.6 million primarily due to ongoing construction of
Performing Arts & Event Center, decrease of $2.6 million in deferred inflow of resources due to lower than expected earnings
on pension plan investments, offset by an increase in receivables of $0.9 million for utility work performed by the City for
local utilities on Transportation capital projects, and due from other governments of $2.1 million for State & Federal grants for
Transportation capital projects such as SR99 HOV Lanes Phase V and Sacajawea Safe Routes to Schools.
Business -Type Activities:
Current and other assets decreased by $0.7 million or 9.2% primarily due to a decrease in Surface Water Management
operations cash and other equivalents of $1.35 million from operating and capital expenditures exceeding revenues. This is
due to additional services and charges for SWM maintenance projects such as Marine Hills conveyance system repairs,
additional intergovernmental services and charges for SWM collection fees and Department of Ecology permits, and transfers
out to Transportation CIP SR99 Phase V of $0.97 million. The decrease is offset by an increase in Surface Water Management
due from other governments for grants of $0.37 million. The remainder is primarily due to the addition of receivables for
Surface Water Management fees, and addition in Dumas Bay Centre cash due to additional operating revenues from rentals and
events in the center.
Capitals assets and CIP, net of accumulated depreciation decreased by $0.03 million or 0.1% primarily due to a prior period
adjustment of $0.3 million described in Note 15 on page 72, from misclassified construction in progress that should have been
classified as repairs and maintenance. In the current year, there was a land addition of $0.2 million, net construction in
progress reduction of $2.8 million, buildings addition of $0.9 million, improvements other than buildings addition of $1.1
million, infrastructure addition of $1.5 million, machinery and equipment addition of $0.05 million, and addition of
accumulated depreciation of $0.8 million. (See Note 8 on page 56).
Deferred outflows of resources increased by $0.1 million for business -type activities due to lower than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans. (See Note 9 on page 58).
Long-term liabilities increased by $0.2 million due to current year GASB 68 adjustment to pension liability of $0.3 million
offset by paying down of Public works trust fund loans. (See Note 9 and 11 on pages 58 and 66).
Other liabilities decreased by $0.02 million or 3.5% primarily due to having fewer liabilities at the end of the year for Surface
Water Management. This is due to fewer invoices for Surface Water Management operations at the end of the year.
Deferred inflows of resources decreased by $0.2 million for business -type activities due to lower than expected earnings on
pension plan investments for GASB 68 state sponsored pension plans. (See Note 9 on page 58).
Net investments in capital assets increased $0.1 million or 0.1% primarily due to low outstanding balance in Public Works trust
fund loan, offset by a prior period adjustment and capital assets added described above.
Unrestricted net position decreased by $0.7 million or 11.6% primarily due to the decreases in current and other assets
descripted above.
ON of Federal Wav / 18
CHANGES IN NET POSITION
For the Years Ended December 31, 2016 and 2015
Governmental Activities
Business -Type
Activities
Total
2016
2015
2016
2015
2016
2015
Revenues:
Programs revenues:
Charges for services
$ 14,210,158
$ 14,129,209
$ 4,900,531
$ 4,662,995
$ 19,110,689 $
18,792,204
Operating grants & contrib.
5,638,756
6,544,176
68,970
17,108
5,707,725
6,561,284
Capital grants & contrib.
15,863,183
4,508,428
790,033
328,130
16,653,215
4,836,558
General revenues:
Property taxes
10,539,623
10,460,136
-
-
10,539,623
10,460,136
Sales tax
14,222,497
13,297,086
-
-
14,222,497
13,297,086
Local criminal justice sales tax
2,499,527
2,319,124
-
-
2,499,527
2,319,124
Utility tax
11,902,866
11,796,550
-
-
11,902,866
11,796,550
Real estate excise tax
5,265,138
3,031,159
-
-
5,265,138
3,031,159
Other taxes
477,055
449,964
-
-
477,055
449,964
Other
1,526,995
2,052,748
45,405
24,917
1,572,399
2,077,665
Total Revenue
82,145,796
68,588,580
5,804,937
5,033,150
87,950,733
73,621,730
Expenses
General government
4,544,037
4,743,932
-
4,544,037
4,743,932
Security of persons & property
36,018,643
32,017,617
-
36,018,643
32,017,617
Transportation
12,920,893
13,070,260
-
-
12,920,893
13,070,260
Physical environment
469,237
476,570
-
-
469,237
476,570
Economic environment
3,206,414
2,973,437
-
-
3,206,414
2,973,437
Health and human services
1,501,057
1,618,759
-
-
1,501,057
1,618,759
Culture and recreation
9,373,278
8,959,555
-
-
9,373,278
8,959,555
Interest on long-term debt
433,729
461,763
-
-
433,729
461,763
Surface Water Management
-
-
4,408,225
4,093,534
4,408,225
4,093,534
Dumas Bay Centre
-
-
1,104,971
1,250,161
1,104,971
1,250,161
Total Expenses
68,467,288
64,321,893
5,513,197
5,343,695
73,980,485
69,665,588
Change in net position before
13,678,508
4,266,687
291,740
(310,545)
13,970,248
3,956,142
transfers
Transfers
633,124
(17,959)
(633,124)
17,959
(0)
-
Change in net position
14,311,632
4,248,728
(341,384)
(292,586)
13,970,248
3,956,142
Net position - beginning
490,451,686
541,306,481
64,828,447
57,538,943
555,280,133
598,845,424
Prior period adjustment Note 15
-
(45,942,608)
(266,237)
8,906,872
(266,237)
(37,035,736)
Net Effect - Change in
_
-
(10,485,699)
Accounting for Pensions
(9,160,915)
(1,324,784)
Adjusted net position - beginning
490,451,686
486,202,958
64,562,209
65,121,031
555,013,895
551,323,989
Net position - ending
$ 504,763,318
$ 490,451,686
$ 64,220,825
$ 64,828,445 $
568,984,143
$ 555,280,131
Citv ofFederal Wav / 19
Analysis of the chance in net position:
Total government -wide revenues of the primary government increased by $14.3 million or 19.5% and total expenses increased
by $4.3 million or 6.2% from the prior year. These changes are discussed in more detail below.
Governmental Activities:
Governmental activities contributed $14.3 million of the total change in net position of $14.0 million. The prior year change in
net position was $4.2 million. The primary change compared to 2015 is due to the following revenues, and expenses described
below.
Total revenues for governmental activities increased $13.6 million or 19.8%. The increase is primarily due to an increase in
capital grants & contributions of $11.4 million from the addition of $5.9 million in grants for the Performing Arts & Event
Center, reclassifying $1.0 million of LIFT sales tax, restricted for use on capital infrastructure and parks facilities, to capital
grants & contributions from operating grants & contributions, and $4.4 million in grants for Transportation CIP projects that
are in design and construction, increase in real estate excise tax of $2.2 million, sales tax and criminal justice sales tax of $1.1
million, property tax of $0.08 million, utility tax of $0.1 million, and charges for services of $0.08 million. This increase is
offset by a decrease in other revenue of $0.5 million primarily due to less private contributions for the Performing Arts &
Event Center, and a decrease in operating grants & contributions of $0.9 million primarily due to reclassifying $1 million of
LIFT sales tax to capital grants and contributions.
Total expenses for governmental activities increased $4.20 million or 6.4%. The net increase is primarily due to increases in
the following expense categories: A $4.00 million increase in "Security of persons & property" is primarily due to: $1.23
million increase comprised of $0.20 million in salaries and wages related to adding 3 positions for Probation division and $1.03
million related to salaries and wages increase for 3 new Police officers at the end of 2016, increased contracted and regular
overtime, cost of living adjustments, and health insurance cost increases; $0.31 million for maintenance of fire hydrants; $1.42
million increase in SCORE and Valleycomm operations, $0.53 million increase due to adjustment for pension expense (GASB
68), $0.15 million adjustment to expense for Valleycomm and SCORE investment in joint venture, and the remainder of $0.36
million for various increases in supplies and service and charges. A $0.41 million increase in "Culture and recreation"
primarily due to: the addition of 1.0 FTE Parks Supervisor, 1.0 FTE Parks Maintenance Worker, 0.66 FTE Graphics
Coordinator, seasonal help and benefits, maintenance services, additional supplies, and water and electricity utilities for Town
Square Park. A $0.23 million increase in "Economic environment" primarily due to: $0.31 million increase due to re -branding
initiative and college needs assessment study. A $0.15 million decrease in "Transportation" is primarily due to a lower net loss
adjustment to expense on disposed transportation capital assets that were not fully depreciated. A $0.12 million decrease in
"Health and human services" primarily due to less Community Development Block Grant support for projects such as housing
acquisition.
Governmental Activities - Expenses
Transportation,
18.9%
Physical
v'
n ent,
0.7%
Economic
environment,
4.7%
Health and human
servi-, 2.2%
se-rlty of
persons & Culture and
property, 52.6% recreation, 13.796
Interestonlong-
term debt, 0.6%
General
government, 6.6%
Business -Type Activities:
Business -type activities of the City's Surface Water Management system and Dumas Bay Centre decreased the City's net
position by $0.6 million. The primary change compared to 2015 is due to the following revenues and expenses described
below.
Citv of Federal Wav / 20
Total revenues increased by $0.77 million or 15.3% from 2015. Attributing factors to the increase in revenues are as follows:
An increase in surface water management fees of $0.05 million and grant revenue for Surface Water Management operating
and capital projects of $0.51 million. In addition, Dumas Bay Centre revenue increased by $0.19 million due to the increase in
charges for services for rentals and events at the facility. The remaining increase of $0.02 is due to an increase in investment
earnings.
Total expenses increase of $0.17 million or 3.2% from 2015. This is primarily due to an increase in Surface Water
Management (SWM) of $0.26 million for additional services and charges for SWM maintenance projects such as Marine Hills
conveyance system repairs, $0.09 million for addition to intergovernmental services and charges for SWM collection fees and
Department of Ecology permits, $0.02 million for addition to depreciation expense for SWM assets, and $0.05 million for
additional temporary help for increased Dumas Bay Centre (DBC) operations, offset by a decrease in SWM personnel services
of $0.06 million for an adjustment to pension expense (GASB 68), a decrease in supplies of $0.10 million for DBC
maintenance of the facility, and decrease in services and charges for DBC of $0.09 million due to a decrease in repairs and
maintenance projects in the facility.
Charge
services,
Business -Type Activities - Revenues
n-tino -ants
ms,
;rants &
utions,
6%
0.9%
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Business -Type Activities - Expenses
Dumas
Centre, 2(
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 2016, the City's governmental funds had a combined ending fund balance of $49.3 million which decreased
by $2.4 million from the prior year. Approximately 28% or $13.8 million of this amount constitutes unrestricted General Fund
balance, which is available for spending at the City Council's discretion. Non -spendable fund balance of $0.2M is comprised
of court trust and prepaid insurance/flex plan of $0.2M. Restricted fund balance of $21.2M is comprised of $6.1M in
transportation capital project funding sources including real estate excise tax (REET), mitigation impact fees, surface water
management fees, and gas tax; $0.9M in performing arts & event center capital project funding sources comprised of REET
and LIFT sales tax; $2.5M for future debt service payments; $1.9M in parks capital project funding sources including REET,
mitigation impact fees, and paths and trails funding; $2.1M LIFT sales tax for downtown redevelopment infrastructure and
parks projects; $0.7M in hotel/motel lodging tax for promotion of tourism; $0.6M in paths & trails parks levy dedicated for
paths & trails projects; $0.5M for special contracts/studies, $0.03M in REET for city facilities capital projects, $5.7M in REET
for future capital projects and debt service payments, $0.1M in Police seizure funds, and $0.03M for Community Development
Block Grant funds. Committed fund balance of $14AM includes amounts that can be used only for the specific purposes
determined by a formal action of the government's highest level of decision -making authority. The committed fund balance is
detailed by fund under the fund balance classification in Note
The General Fund is the chief operating fund of the City. Revenues and other sources totaling $48.3M and expenditures and
other uses totaling $48.6M, resulted in a total fund balance decrease by $0.3 million or 2.2%. Total ending fund balance of
$14.3M, is $0.8M above the budgeted ending fund balance in the fund of $13.5M. Fund balance policy resolution 15-682 set
the General Fund and strategic reserve policy at $12M. The City increased its transfer in from other sources to General Fund as
CitvofFederal Wav/21
reflected in the transfer in included in the Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental
Funds to $10.47M in 2016, compared to $5.13M in 2015 and transfer out of $3.69 in 2016, compared to $1.89 in 2015.
The Street Fund has a total fund balance of $0.5 million which primarily stayed static from 2015.
The Utility Tax Fund was established to account for the utility tax receipts which include 6% collected by State statute 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 by $1.1 million or 23% from $4.8 million in
2015 mainly due to additional need for support of General Fund operations, Performing Arts & Event Center operations, and
maintenance of overlay project on streets in Federal Way done in 2016. In addition, there has been an increase in pay for
Police positions paid out of the fund.
The Debt Service Fund has a total fund balance of $2.5 million which increased by $1.0 million from $1.5 million in 2015 due
to transfers in from utility tax and real estate excise tax for future debt service payments within the fund.
The Downtown Redevelopment Fund was established to accumulate resources and set aside funding for downtown projects.
Overall, ending fund balance increased by $1.0 million from $1.1 million. This is primarily due to a $1.0 million addition in
LIFT Sales tax revenue 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, and the
installation of sidewalks and landscaping. The major source of revenue for this fund is grants from other agencies and
contributions from other funds. Total ending fund balance increased by $2.0 million from $8.0 million primarily due to
transferring in General Fund and REET funds into large projects that are in construction such as SR99 HOV Lanes Phase V
and S 352nd Street Extension from SR99 to SR 161.
The Performing Arts & Event Center Fund is being used for the building of the arts & event center. Ending fund balance
decreased by $5.2 million from $6.6 million primarily due to additional capital outlay expenditures from being in the
construction phase of the project. The project will be completed in the summer of 2017.
Proprietary funds
The City of Federal Way's proprietary funds provide the same type of information found in the government -wide, but in more
detail. Unrestricted net assets of the Surface Water Management Fund at the end of the year amounted to $4.6 million, and
those for Dumas Bay Centre amounted to $0.5 million. The total changes in net position for both funds were $0.8 million
decrease and $0.2 million increase, respectively. Other factors concerning the finances of these two funds have already been
addressed in the discussion of the City of Federal Way's business -type activities.
GENERAL FUND BUDGETARY AND ACTUAL HIGHLIGHTS
The City of Federal Way budgets on a biennial basis with each budget beginning in an odd numbered year. Appropriations for
operating funds are authorized for two years, but must be reviewed and reauthorized by the City Council in the middle of the
biennial period. In 2016, the City made budget adjustments. The following discussion is reflective only of the current year of
the biennium.
The General Fund operating expenditure budget increased by $5.1 million between the original adopted budget and the
adjusted budget for 2016 fiscal year. The following is the major changes for the 2016 budget:
• Added $0.42 million for fire hydrant maintenance and streetlight electricity. The City signed an agreement with
Lakehaven early this year for a 3.6% franchise fee, and in exchange the City will pay for the fire hydrant maintenance
and street lights that were initially paid for by Lakehaven and charged to the citizens.
• Added $0.41 million for pre -opening operations of the Performing Arts & Event Center.
• Added $0.35 million for the addition of the Probation division in May 2016 to the Municipal Court, including 2.0 FTE
Probation Officers, 1.0 FTE Administrative Assistant, supplies, monitoring services, and probation software.
• Added $0.31 million for 1.0 FTE Parks Supervisor, seasonal help and benefits, maintenance services, and 1.0 FTE
Parks Maintenance Worker, additional supplies, and water and electricity utilities for Town Square Park.
• Added $0.24 million for 1.0 FTE Graphics Coordinator, 0.5 FTE Videographer, IT Technician temporary help, and IT
professional services.
• Added $0.04 million for 0.5 FTE Legal Assistant.
Citv of Federal Wav / 22
• Added $0.02 million for 0.25 FTE increase for HR Technician.
• Added $1.92 million for SCORE jail services, outside jail services, Valleycomm dispatch services, Sub Station lease,
and grants.
• Added $0.59 million for Police negotiated salary contracts, vacation payout, contracted overtime, and tuition
reimbursement.
• Added $0.18 million for re -branding initiative and college needs assessment for the City.
• Added $0.04 million for pro-tem pay, witness juror fees, and additional technology for Municipal Court.
• Added $0.10 million for outside legal counsel services for Law.
• Added $0.04 million for professional services and supplies for Economic Development.
• Added $0.37 million for professional services and grants and KC public health contribution for Human Services.
Adjustments to revenues and other sources budget include: Adjustments to beginning balance of $0.27 million; addition of
Lakehaven franchise fee of $0.42 million; increase in sales tax of $1.8 million; increase in criminal justice sales tax of $0.15
million; probation revenue of $0.27 million; transfer in from traffic safety fund of $1.78 million; transfer in from
unemployment insurance fund of $1.00 million; and increase in grants, miscellaneous revenue, and other transfers of $1.08
million.
The General Fund ending fund balance of $14.3 million is $0.84 million over the projected $13.5 million for 2016 year-end.
The $0.84 million increase in ending fund balance is made up of $0.86 million decrease in revenues/other sources and a
decrease of $1.69 million in expenditures/other uses.
The $0.86 million decrease in revenues/other sources is primarily attributed to a decrease of $0.45 million in transfer in from
the Utility Tax Fund, $0.81 million in community development permits and fees, $0.36 million in court and probation revenue,
property tax of $0.13 million, offset by increases in sales tax of $0.08 million, gambling taxes of $0.04 million, state shared
revenue of $0.25 million, police contracted services fees of $0.23 million, and park general recreation fees of $0.10 million,
and miscellaneous of $0.19 million.
The $1.77 million unspent expenditures/other uses are primarily attributable to: Reduction in transfer out for Street Fund
subsidy of $0.47 million and Transportation CIP Fund of $0.22 million, and $1.00 million in various savings and timing of
payments in General Fund departments such as Human Services, Community Development, Economic Development,
Municipal Court, Human Resources, Finance and Performing Arts & Event Center operations.
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,
2016 amounts to $522.5 million (net of accumulated depreciation). This investment in capital assets includes land, buildings,
improvements, machinery and equipment, infrastructure, park facilities and construction in progress. For more details, please
see Note 8, and prior period adjustment Note 15, pages 56 and 73.
CAPITAL ASSETS AT YEAR-END, NET OF DEPRECIATION
Governmental
Business -Type
Total
Activities
Activities
2016
2015
Land
$ 281,422,490
$ 11,232,493 $
292,654,983 $
290,365,750
Building and improvements
30,688,197
4,744,863
35,433,061
35,117,879
Machinery and equipment
7,064,841
66,640
7,131,481
6,048,679
Infrastructure
108,383,697
43,282,287
151,665,984
153,215,077
Construction in progress
35,600,490
21,722
35,622,212
18,808,417
Total Capital Assets
$ 463,159,715
$ 59,348,005 $
522,507,720 $
503,555,802
Major capital asset events during the current fiscal year included the following amounts: Construction in progress added
for expanding and improving the city streets and traffic corridors totaled $9.0 million and Performing Arts and Event
Center and various park improvements for $15.6 million. Additionally there was land purchased and donated of $2.3
million, infrastructure added of $4.4 million, improvements other than buildings added of $2.5 million, machinery and
equipment added of $2.5 million, and buildings added of $1.2 million. There was also a prior period adjustment of
($0.3) million described in Note 15 of the financial statements. Remaining commitments for capital assets is described in
Note 8.
CitvofFederal Wav/23
Long-term debt
At the end of 2016, the City of Federal Way had total debt principal balance outstanding of $36.0 million. The future principal
and interest payments which are backed by the full faith and credit of the government will be $47.3 million (See Note 11 pages
65 thru 67). The remainder of the City's debt represents Public Works Trust Fund Loans.
LONGTERM DEBT (FUTURE PRINCIPAL AND INTEREST PAYMENTS)
Governmental Business -Type
Activities Activities Total
General obligation bonds $ 46,974,041 $ - $ 46,974,041
Public works trust fund loan - 294,126 294,126
Total $ 46,974,041 $ 294,126 $ 47,268,167
The City's total debt increased by $1.2 million due to net of annual debt service payments and new addition of Section 108
HUD Loan.
In February 2017, Moody's Investors Service upgraded from Aa3 to Aa2 rating for the City's 2013 Limited Tax General
Obligation Refunding Bonds.
Washington State statutes limit the amount of debt a government entity may issue to 7.5% of its total assessed valuation,
subject to 60% majority vote of qualified electors. Of the 7.5% limit, 2.5% is for general purposes, 2.5% for open space/park
facilities, and 2.5% for utilities. Non -voted general purpose indebtedness is limited to 1.5% of assessed valuation and the
combination of voted and non -voted general purpose indebtedness cannot exceed 2.5% of assessed valuation.
The City's taxable assessed valuation for 2016 was $9.420 billion and the total amount of debt the City may issue is $673.3
million. Remaining legal debt capacities as of December 31, 2016 are:
General government (no vote required)
$108,086,319
General government (3/5 majority vote required)
$ 94,202,243
Parks and open space (3/5 majority vote required)
$235,505,607
Utilities (3/5 majority vote required)
$235,505,607
Total Capacity
$673,299,776
Additional information on the City of Federal Way's long-term debt can be found in Note 11 on pages 65 thru 68 and in the
Statistical Section of this report.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Federal Way's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to Finance Department, City of Federal Way, 33325 8th Avenue South,
Federal Way, Washington 98003, telephone 253-835-2520, or visit the City's website at www.cityoffederalway.com.
ON ofFederal Wav /24
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
CitvofFederal Wav/25
BASIC FINANCIAL STATEMENTS
Citv of Federal Wav / 26
Government -Wide Financial Statements
Statement of Net Position
This statement provides information on all city assets and deferred outflows of resources and liabilities and deferred inflows
of resources, with the difference between the two reported as net position.
Statement of Activities
This statement is focused on both the gross and net costs of various functions, including both governmental and business -type
activities, which are supported by the City's general tax and other revenues.
CitvofFederal Wav/27
STATEMENT OF NET POSITION
December 31, 2016
ASSETS
Cash & cash equivalents and investments
Receivables (net)
Due from other governments
Prepaid items
Restricted assets:
Seizure funds/covert funds/municipal trust/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
Net Pension Asset
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS
LIABILITIES
Accounts payable and accruals
Unearned revenue
Retainage payable
Customer deposits
Noncurrent Liabilities:
Due within one year
Due in more than one year
Net Pension Liability
Total Liabilities
DEFERRED INFLOW OF RESOURCES RELATED
TO PENSIONS
NET POSITION
Net investment in capital assets
Restricted for:
Debt service
Capital projects
Steel Lake & North Lake Mgmt District
Other
Unrestricted
Total Net Position
Governmental
Business -type
Activities
Activities
Total
$ 65,270,433
$ 6,639,093
$ 71,909,526
2,903,365
141,742
3,045,107
5,845,523
391,989
6,237,512
38,425
-
38,425
1,168,324 - 1,168,324
19,487,432 - 19,487,432
281,422,490
11,232,493
292,654,983
35,600,490
21,722
35,622,212
21,221,741
1,073,055
22,294,796
9,466,456
3,671,808
13,138,264
7,064,841
66,640
7,131,481
108,383,697
43,282,287
151,665,984
2,418,256
-
2,418,256
560,291,472
66,520,829
626,812,301
3,934,973
307,122
4,242,095
6,776,154
196,979
6,973,133
282,088
402,243
684,331
964,859
10,228
975,087
1,139,564
6,387
1,145,951
9,381,468
102,970
9,484,438
28,706,451
275,517
28,981,969
11,893,469
1,584,261
13,477,730
59,144,053
2,578,585
61,722,639
319,074
28,541
347,615
440,815,201
59,059,646
499,874,847
2,508,514
-
2,508,514
16,707,141
-
16,707,141
-
18,438
18,438
2,156,941
-
2,156,941
42,575,521
5,142,741
47,718,262
$ 504,763,318 $ 64,220,825 $ 568,984,143
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 28
STATEMENT OF ACTIVITIES
For the Year ended December 31, 2016
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
$ 4,544,037
$ 2,449,406 $ 1,677,141
$
$ (417,491)
$
$ (417,491)
Security ofpersons & property
36,018,643
5,701,083 1,474,878
(28,842,683)
(28,842,683)
Transportation
12,920,893
1,565,140 1,777,727
8,948,900
(629,125)
(629,125)
Physical environment
469,237
304,294 114,357
-
(50,586)
(50,586)
Economic environment
3,206,414
1,766,106 -
6,914,282
5,473,975
5,473,975
Health
1,501,057
- 572,842
-
(928,214)
(928,214)
Culture & recreation
9,373,278
2,424,129 21,811
(6,927,338)
(6,927,338)
Interest on long-term debt
433,729
- -
(433,729)
(433,729)
Total governmental activities
68,467,288
14,210,158 5,638,756
15,863,183
(32,755,191)
(32,755,191)
Business -type Activities:
Surface Water Management
4,408,225
3,953,439 68,970
790,033
404,215
404,215
Dumas Bay Centre
1,104,971
947,092 -
-
(157,880)
(157,880)
Total business -type activities
5,513,197
4,900,530 68,970
790,033
246,336
246,336
Total
$73,980,485
$ 19,110,688 $ 5,707,725
$16,653,215
(32,755,191)
246,336
(32,508,856)
General revenues:
Property tax
10,539,623
10,539,623
Sales tax
14,222,497
14,222,497
Local criminal justice sales tax
2,499,527
2,499,527
Utility tax
11,902,866
11,902,866
Real estate excise tax
5,265,138
5,265,138
Gambling tax
190,051
190,051
Hotel/motel tax
283,220
283,220
Leasehold excise tax
3,784
3,784
Other revenue
1,159,348
-
1,159,348
Investment earnings
367,647
45,405
413,052
Transfers
633,124
(633,124)
(0)
Total general revenues and transfers
47,066,823
(587,720)
46,479,103
Change in net position
14,311,632
(341,384)
13,970,247
Net position at beginning of year
490,451,686
64,828,447
555,280,133
Prior period adjustment (See Note 15)
-
(266,237)
(266,237)
Net Effect - Change in Accounting
for Pensions
-
-
-
Adjusted beginning net position
490,451,686
64,562,209
555,013,895
Net position at end of year
$ 504,763,318
$ 64,220,825
$ 568,984,143
The notes to the financial statements are an integral part of this statement.
CitvofFederal Wav/29
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2016
Debt
General
Street
Utility Tax
Service
ASSETS
Equity in pooled cash & investments
$ 14,358,573
$ 1,274,136
$ 2,567,499
$ 2,508,514
Prepaid insurance/debt service
33,425
-
-
-
Receivables (net):
Taxes
244,485
-
1,292,387
Accounts and contracts
150,700
62,020
-
Restricted cash
262,005
-
-
Due from other governments
1,987,623
85,630
1,011
Interfund loans receivable
50,714
-
-
-
TOTAL ASSETS
17,087,525
1,421,786
3,860,897
2,508,514
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
784,860
231,926
1,825
-
Accounts/payroll payable
1,132,216
85,888
111,153
-
Retainage payable
1,888
-
-
-
Deposits payable
605,174
506,946
-
Interfund loans payable
-
-
Unearned revenue
69,110
70,515
-
-
TOTAL LIABILITIES
2,593,248
895,275
112,978
-
DEFERRED INFLOWS OF RESOURCES
FOR UNAVAILABLE PROPERTY TAXES
204,879
-
-
-
Fund Balance:
Nonspendable
187,284
-
-
Restricted
108,147
-
-
2,508,514
Committed
199,013
526,511
3,747,919
-
Unassigned
13,794,955
-
-
-
TOTAL FUND BALANCES
14,289,398
526,511
3,747,919
2,508,514
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 17,087,525 $ 1,421,786 $ 3,860,897 $ 2,508,514
The notes to the financial statements are an integral part of this statement.
Citv of Federal Wav / 30
BALANCESHEET
GOVERNMENTAL FUNDS
December 31, 2016
Downtown
Performing Arts
Nonmajor
Redevelopment
Transportation
& Event Ctr
Governmental
Total
ASSETS
Equity in pooled cash & investments
$ 2,048,068
$ 7,451,384
$ 2,960,380
$ 14,887,186 $
48,055,740
Prepaid insurance/debt service
-
-
-
-
33,425
Receivables (net):
Taxes
-
252,801
1,789,673
Accounts and contracts
872,615
-
28,357
1,113,692
Restricted Cash
-
203,209
628,062
75,048
1,168,324
Due from other governments
71,205
3,387,222
-
312,832
5,845,523
Interfund loans receivable
-
-
-
-
50,714
TOTAL ASSETS
2,119,273
11,914,430
3,588,442
15,556,224
58,057,092
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
173
1,712,200
1,587,516
293,726
4,612,227
Accounts/payroll payable
-
9,409
-
165,180
1,503,846
Retainage payable
203,209
628,062
131,700
964,859
Deposits payable
-
-
27,445
1,139,565
Interfund loans payable
-
50,714
50,714
Unearned revenue
-
-
-
142,463
282,088
TOTAL LIABILITIES
173
1,924,817
2,215,579
811,228
8,553,298
DEFERRED INFLOWS OF RESOURCES
FOR UNAVAILABLE PROPERTY TAXES
1
-
-
-
204,880
Fund Balance:
Nonspendable
-
-
-
-
187,284
Restricted
2,117,223
6,136,786
855,100
9,459,542
21,185,312
Committed
1,877
3,852,827
517,763
5,285,454
14,131,364
Unassigned
-
-
-
-
13,794,955
TOTAL FUND BALANCES
2,119,100
9,989,613
1,372,863
14,744,996
49,298,914
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 2,119,273 $ 11,914,430 $ 3,588,442 $ 15,556,224
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not
reported in the funds. See Note 8, difference is the Internal Service fund amount of $13.33M on page 37 449,832,864
Investment in joint venture is not a financial resource and, therefore, not reported in the funds. See Note 14 $19.49M. 19,487,432
Other long-term and non -current assets are not available to pay for current -period expenditures and, therefore,
are not reported in the funds: includes deferred inflows, and net pension asset. See Note 6 $205K & Note 9 $2.42M (page 58) 2,623,136
Internal service funds are used to charge the costs of insurance, unemployment, information systems, mail and duplication,
fleet, and building to individual funds. The assets and liabilities of the internal service funds are included in governmental
activities in the statement of net position. Page 37 Internal Svc Net Position $29.35M - Adj $50.6K + $61.7K LT Comp Abs
+ $634.3K Net Pension Liability (NPL) + $11.4K Def Infl Rel to Pensions - $122.6K Def Outfl Rel to Pensions 29,886,461
Long-term liabilities, including bonds payable, pension liability, and inflows/outflows related to pensions are not due and
payable in the current period and, therefore, are not reported in the funds. See Note 11-$35.7M -$2.OM - $0.33M,
In Govt Wide - $11.9 NPL - $0.32M Def Infl Rel to Pensions + $3.9M Def Outfl Rel to Pensions (46,365,489)
Net position of governmental activities $ 504,763,318
The notes to the financial statements are an integral part of this statement.
Citv offederal Wav / 31
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2016
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Principal
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
Debt
General Street Utility Tax Service
$ 27,274,749 $ - $ 11,902,866 $ -
2,984,639 155,494 - -
2,258,505 1,260,890 - -
3,596,805 331,996 - -
942,258 - - -
183,881 3,943 17,499 8,814
607,186 41,229 - -
37,848,023 1,793,552 11,920,365 8,814
4,512,577 - - -
31,021,318 204,921 2,670,798 -
845,613 3,366,063 - -
3,074,529 - 47,768 -
1,005,679 - - -
4,428,749 - 108,075 -
- - - 470,000
- - - 342,423
54,628 6,652 - -
44,943,093 3,577,636 2,826,641 812,423
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (7,095,070) (1,784,084) 9,093,724 (803,609)
OTHER FINANCING SOURCES (USES)
Transfers in
10,465,074
1,810,595
198,386
1,840,544
Transfers out
(3,685,564)
-
(10,383,688)
-
TOTAL OTHER FINANCING
SOURCES (USES)
6,779,510
1,810,595
(10,185,302)
1,840,544
NET CHANGE IN FUND BALANCES
(315,560)
26,511
(1,091,578)
1,036,935
FUND BALANCES - BEGINNING
14,604,958
500,000
4,839,497
1,471,579
FUND BALANCES - ENDING
$ 14,289,398
$ 526,511
$ 3,747,919
$ 2,508,514
The notes to the financial statements are an integral part of this statement.
Citv of Federal Wav / 32
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
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For Year Ended December 31, 2016
Downtown
Performing Arts
Nonmajor
Redevelopment
Transportation
& Event Ctr
Governmental
Total
$ ill
$ -
$ -
$ 5,721,142
$ 44,898,868
-
-
-
-
3,140,133
1,004,282
8,185,583
8,835,000
1,163,847
22,708,107
-
1,007,651
-
1,998,337
6,934,789
-
-
-
3,192,978
4,135,236
5,602
12,353
23,377
53,174
308,643
-
485
179,191
331,257
1,159,348
1,009,995
9,206,072
9,037,568
12,460,735
83,285,124
5,291 - - 23,360
4,541,228
- - - 1,758,914
35,655,951
- 1,048,996 - 1,901,529
7,162,201
- - - 452,720
452,720
- - 8,027 50,484
3,180,808
- - - 492,114
1,497,793
- - - 2,495,309
7,032,133
- - - -
470,000
123,970 - - 5,345
471,738
- 10,964,070 14,274,454 1,446,045
26,745,849
129,261 12,013,066 14,282,481 8,625,820
87,210,421
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 880,734 (2,806,994) (5,244,913) 3,834,915 (3,925,297)
OTHER FINANCING SOURCES (USES)
Transfers in
127,348
4,788,000
- 1,813,943
21,043,890
Transfers out
-
-
- (5,455,568)
(19,524,820)
TOTAL OTHER FINANCING
SOURCES (USES)
127,348
4,788,000
- (3,641,625)
1,519,070
NET CHANGE IN FUND BALANCES
1,008,082
1,981,006
(5,244,913) 193,290
(2,406,227)
FUND BALANCES - BEGINNING
1,111,018
8,008,607
6,617,776 14,551,706
51,705,141
FUND BALANCES - ENDING
$ 2,119,100
$ 9,989,613
$ 1,372,863 $ 14,744,996
$ 49,298,914
The notes to the financial statements are an integral part of this statement.
Citv offederal Wav / 33
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2016
Amounts reported for governmental activities in the statement of activities (page 28) are 2016
different because:
Net change in fund balances --total governmental funds (page 32) $ (2,406,227)
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 19,431,185
capital outlays exceeded depreciation in the current period. (page 51)
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. (page 51) 7,837
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however,
has any effect on net position. Also, governmental funds report the issuance
proceeds of new debt as current financial resources and payment as the use
of current resources, whereas these amounts reduce the net position. (page 51) (2,030,892)
Internal service funds are used by management to charge costs of risk management,
information systems, mail & duplication, fleet, and building systems to the funds.
(page 38) -$707K + $9.9K (696,836)
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in the funds.
Includes adjustment for GASB 68 pension reporting. (page 51) $118K - $111K 6,564
Change in net position of governmental activities (page 28) $ 14,311,632
The notes to the financial statements are an integral part of this statement.
Citv of Federal Wav / 34
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
REVENUES
Taxes
Licenses and permits
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Economic environment
Health
Culture and recreation
Capital outlay
TOTAL EXPENDITURES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 25,450,498
$ 27,297,114
$ 27,274,749
$ (22,365)
2,847,000
3,271,289
2,984,639
(286,650)
1,747,162
2,007,898
2,258,505
250,607
3,559,346
4,024,457
3,596,805
(427,652)
1,163,000
1,163,000
942,258
(220,742)
134,000
134,000
183,881
49,881
359,700
359,700
607,186
247,486
35,260,709 38,257,456 37,848,023 (409,433)
4,299,195
4,875,922
4,512,577
363,345
28,086,557
31,124,931
31,021,318
103,613
687,428
827,039
845,613
(18,574)
2,784,261
3,342,533
3,074,529
268,004
1,028,785
1,383,804
1,005,679
378,125
4,001,174
4,336,677
4,428,749
(92,072)
-
54,628
54,628
-
40,887,400 45,945,534 44,943,093 1,002,441
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (5,626,690) (7,688,078) (7,095,070) 593,008
OTHER FINANCING SOURCES (USES)
Transfers in
7,449,132
10,913,345
10,465,074
(448,271)
Transfers out
(4,153,943)
(4,376,932)
(3,685,564)
691,368
TOTAL OTHER FINANCING
SOURCES (USES)
3,295,189
6,536,413
6,779,510
243,097
NET CHANGE IN FUND BALANCES
(2,331,501)
(1,151,665)
(315,560)
836,105
FUND BALANCES - BEGINNING
14,338,201
14,604,958
14,604,958
-
FUND BALANCES - ENDING $ 12,006,700 $ 13,453,293 $ 14,289,398 $ 836,105
The notes to the financial statements are an integral part of this statement.
Ci
Federal Wav / 35
STREET FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
REVENUES
Licenses and permits
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Security of persons and property
Transportation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
$ 115,000
$ 115,000
$ 155,494
$ 40,494
1,045,000
1,104,504
1,260, 890
156,386
202,000
202,000
331,996
129,996
2,000
2,000
3,943
1,943
34,000
34,000
41,229
7,229
1,397,999 1,457,503 1,793,552 336,049
198,088 221,114
204,921 16,193
3,792,854 3,862,680
3,366,063 496,617
- 6,652
6,652 -
3,990,942 4,090,446
3,577,636 512,810
OVER (UNDER) EXPENDITURES (2,592,943) (2,632,943) (1,784,084) 848,859
OTHER FINANCING SOURCES (USES)
Transfers in 2,592,943 2,632,943 1,810,595 (822,348)
Transfers out - - - -
TOTAL OTHER FINANCING
SOURCES (USES) 2,592,943 2,632,943 1,810,595 (822,348)
NET CHANGE IN FUND BALANCES 0 0 26,511 26,511
FUND BALANCES - BEGINNING 500,000 500,000 500,000 -
FUND BALANCES - ENDING $ 500,000 $ 500,000 $ 526,511 $ 26,511
The notes to the financial statements are an integral part of this statement.
Citv of Federal Wav / 36
UTILITY TAX FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 12,677,790 $ 11,668,756
$ 11,902,866
$ 234,110
Interest
6,000 6,000
17,499
11,499
TOTAL REVENUES
12,683,791 11,674,757
11,920,365
245,608
EXPENDITURES
Current:
Security of persons and property
2,693,318
2,773,384
2,670,798
102,586
Economic environment
107,497
107,497
47,768
59,729
Culture and recreation
97,469
97,469
108,075
(10,606)
TOTAL EXPENDITURES
2,898,284
2,978,350
2,826,641
151,709
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
9,785,507
8,696,407
9,093,724
397,317
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
839,880 198,386 (641,494)
(10,351,547) (11,455,603) (10,383,688) 1,071,915
(10,351,547) (10,615,723) (10,185,302) 430,421
(566,040) (1,919,316) (1,091,578) 827,738
3,066,040 4,839,496 4,839,497 1
$ 2,500,000 $ 2,920,180 $ 3,747,919 $ 827,739
The notes to the financial statements are an integral part of this statement.
Citv offederal Wav / 37
ASSETS
Current Assets
Equity in pooled cash & investments
Prepaid items
Receivables (net):
Accounts and contracts
Due from other governments
TOTAL CURRENT ASSETS
Property, plant and equipment
Land
Building/structures
Improvements other than buildings
Machinery/furniture/equipment
Infrastructure
Construction in progress
Less accumulated depreciation
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2016
Governmental
Business -type Activities - Enterprise Funds Activities
Surface Water Dumas Bay Internal
Management Centre TOTAL Service
$ 5,603,591 $ 984,903 $ 6,588,494 $ 17,265,292
- - - 5,000
122,459
19,283
141,742
391,989
-
391,989
-
6,118,039
1,004,186
7,122,225
17,270,292
9,122,853
2,109,640
11,232,493
-
832,086
3,673,262
4,505,348
16,545,121
3,598,472
314,901
3,913,373
-
52,946
122,200
175,146
17,893,818
58,395,604
-
58,395,604
-
21,722
-
21,722
-
(15,365,912)
(3,529,769)
(18,895,681)
(21,112,089)
56,657,771
2,690,234
59,348,005
13,326,850
62,775,810
3,694,420
66,470,230
30,597,142
DEFERRED OUTFLOWS RELATED TO
PENSIONS 259,865 47,257 307,122 122,623
LIABILITIES AND FUND EQUITY
Current Liabilities:
Vouchers/payroll payable
Unearned revenue
Retainage payable
Deposits payable
Public Works trust fund loan payable
Compensated absences payable
TOTAL CURRENT LIABILITIES
Long-term liabilities:
Public Works trust fund loan payable
Compensated absences payable
Net Pension Liability
TOTAL LONG-TERM LIABILITIES
TOTAL LIABILITIES
DEFERRED INFLOWS RELATED TO
PENSIONS
Net investment in capital assets
Restricted for:
Steel Lake & North Lake Mgmt District
Unrestricted
TOTAL NET POSITION
154,993
41,986
196,979
660,082
116,725
285,518
402,243
-
5,616
4,612
10,228
-
6,387
6,387
-
96,120
-
96,120
-
5,557
1,293
6,850
-
379,011
339,796
718,807
660,082
192,239
-
192,239
-
67,558
15,720
83,278
61,697
1,338,956
245,305
1,584,261
634,268
1,598,753
261,025
1,859,778
695,965
1,977,764
600,821
2,578,585
1,356,047
24,121
4,420
28,541
11,427
56,369,412
2,690,234
59,059,646
13,326,850
18,438
-
18,438
-
4,645,940
446,202
5,092,142
16,025,441
$ 61,033,790
$ 3,136,436
64,170,226
$ 29,352,291
Adjustment to reflect the consolidation of internal service fund activities related to
enterprise funds 50,599
NET POSITION OF BUSINESS -TYPE ACTIVITIES $ 64,220,825
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 38
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For Year Ended December 31, 2016
OPERATING REVENUES:
Service charges and fees
Intergovernmental
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personnel services
Materials and supplies
Services and charges
Intergovernmental
Depreciation
Interfund charges
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
Interest income
Interest expense
Business -type Activities - Enterprise Funds
Surface Water Dumas Bay
Management Centre TOTAL
Governmental
III LVI Hal
Service
$ 3,953,439 $ 947,092 $ 4,900,531 $ 11,010,631
68,970 - 68,970 -
- - - 96,561
4,022,409 947,092 4,969,501 11,107,192
1,939,522
421,331
2,360,853
954,394
145,489
192,707
338,196
635,253
718,363
285,056
1,003,419
7,294,393
311,903
1,189
313,092
151,625
594,630
157,240
751,870
2,271,828
681,228
46,165
727,393
-
4,391,135
1,103,688
5,494,823
11,307,493
(368,726)
(156,596)
(525,322)
(200,301)
-
-
-
161,135
36,952
3,838
40,790
63,618
(3,845)
-
(3,845)
-
TOTAL NON -OPERATING REVENUES (EXPENSES) 33,107 3,838 36,945 224,753
INCOME (LOSS) BEFORE TRANSFERS (335,619) (152,758) (488,377) 24,452
Capital contributions
Transfers in
Transfers out
CHANGE IN NET POSITION
NET POSITION - BEGINNING
Prior period adjustment
Net Effect - Change in Accounting for Pensions
ADJUSTED NET POSITION - BEGINNING
NET POSITION - ENDING
790,033
(965,000)
(510,586)
- 790,033 154,741
331,875 331,875 114,055
(965,000) (1,000,000)
179,117
61,810,613 2,957,319
(266,237) -
61,544,376 2,957,319
$ 61,033,790 $ 3,136,436
(331,469) (706,752)
Adjustment to reflect the consolidation of internal service fund activities related to enterprise (9,917)
CHANGES IN NET POSITION OF BUSINESS -TYPE ACTIVITIES $ (341,386)
30,059,043
30,059,043
$ 29,352,291
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 39
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For Year Ended December 31, 2016
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 asseticonstruction 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:
Increases/(decrease)in depreciation expense
(Increases)/decrease in accounts receivable
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pension:
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease)in retainage payable
Increases/(decrease)in deposits payable
Increases/(decrease)in deferred revenue
Increases/(decrease) in accrued payroll/compensated absences payabb
Increases/(decrease) in net pension liability
Increases/(decrease)in deferred inflows related to pension:
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assets
Governmental
Business -type Activities - Enterprise Funds
Activities
Surface Water
Dumas Bay
Internal
Management
Centre
TOTAL
Service
$ 3,955,151 $
973,674
$ 4,928,825
$ 11,033,119
-
-
-
(286,530)
(909,754)
(488,264)
(1,398,018)
(6,904,081)
(1,981,382)
(417,169)
(2,398,551)
(948,344)
(681,228)
(46,165)
(727,393)
(311,903)
(1,187)
(313,090)
(654,529)
(293,253)
-
(293,253)
112,788
(222,369)
20,889
(201,480)
2,352,422
331,875
331,875
114,055
(965,000)
-
(965,000)
(1,000,000)
(965,000)
331,875
(633,125)
(885,945)
(96,120)
-
(96,120)
(3,845)
(3,845)
(101,181)
(92,247)
(193,428)
(1,584,322)
161,135
(201,146)
(92,247)
(293,393)
(1,423,188)
36,952
3,838
40,790
63,620
36,952
3,838
40,790
63,620
(1,351,564)
264,355
(1,087,209)
106,910
6,955,155
720,548
7,675,703
17,158,382
5,603,591
984,903
6,588,494
17,265,292
(368,720)
(156,598)
(525,318)
(200,302)
594,630
157,244
751,874
2,271,828
(20,084)
14,588
(5,497)
-
(362,223)
-
(362,223)
38,715
(91,799)
(18,302)
(110,101)
(45,502)
(12,459)
(15,361)
(27,820)
236,131
(33,449)
4,612
(28,837)
-
-
250
250
21,796
11,994
33,790
-
(3,248)
(1,582)
(4,830)
6,936
204,049
49,774
253,823
113,486
(150,862)
(25,728)
(176,590)
(68,870)
146,351
177,487
323,838
2,552,724
$ (222,369) $
20,889
$ (201,480)
$ 2,352,422
$ 154,741
*The $790, 033 in capital contribution as referenced on page 38 is for $415,139 in non -cash transactions for donated Surface Water
Management infrastructure assets, and $374,894 in cash transactions under category "acquisition of capital assets"for grants used in
acquiring Surface Water Management capital assets. ($374, 894 in grants for capital assets - $476, 075 in capital assets constructed in
current year =-$101,181)
The notes to the financial statements are an integral part of this statement.
City of Federal Way / 40
CITY OF
Federal Way
It's all within reach
Citv ofFederal Wav / 41
NOTES TO THE BASIC FINANCIAL STATEMENTS
December 31, 2016
Ilei 11 WN
Note
Page
1
Summary of Significant Accounting Policies...............................................................................
42
ReportingEntity ...................................................................................................................
42
Basis of Presentation - Government -wide and Fund Financial Statements ..........................
42
Measurement Focus, Basis of Accounting...........................................................................
44
BudgetaryInformation.........................................................................................................
45
Assets, Liabilities, Fund Balance and Net Position..............................................................
47
Cashand Investments..................................................................................................
47
Receivables..................................................................................................................
47
Amounts Due to and from Other Funds; Interfund Loans ...........................................
47
Inventories and prepaids..............................................................................................
47
CapitalAssets..............................................................................................................
47
Deferred Inflow of Resources......................................................................................
47
Compensated Absences Payable..................................................................................
48
Pensions.......................................................................................................................
48
Unearned Revenues.....................................................................................................
48
Long -Term Liabilities..................................................................................................
49
Fund Balance Classification........................................................................................
49
Interfund Transactions.................................................................................................
50
2
Reconciliation of Government -wide & Fund Financial Statements .............................................
51
3
Stewardship, Compliance and Accountability ..............................................................................
51
4
Supplemental Appropriations.......................................................................................................
52
5
Deposits and Investments.............................................................................................................
52
6
Property Taxes..............................................................................................................................
54
7
Unearned Revenues and Receivables...........................................................................................
55
8
Capital Assets...............................................................................................................................
56
9
Pension Plans................................................................................................................................
58
10
Risk Management.........................................................................................................................
64
11
Long -Term Liabilities...................................................................................................................
65
12
Interfund Transactions..................................................................................................................
68
13
Contractural Obligations, Contingencies, and Litigation..............................................................
69
14
Joint Ventures...............................................................................................................................
69
15
Prior Period Adjustments...................................................................................................
73
16
Leases................................................................................................................
74
17
Self-Insurance...............................................................................................................................
74
18
Accounting and Reporting Changes.............................................................................................
74
19
Subsequent Event..........................................................................................................................
74
Citv ofFederal Wav / 42
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended December 31, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Federal Way have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted
standard setting body for establishing governmental accounting and financial reporting principles. The significant accounting
policies are described below.
REPORTING ENTITY
The City of Federal Way was incorporated on February 28, 1990. Federal Way is a non -charter code city, operating under
Section 35A.03 of the Revised Code of Washington. It has a Mayor/Council form of government. The Council is composed of
seven councilmembers elected to four-year terms on a non -partisan ballot and are elected at -large. Members of the City
Council are responsible for establishing the general direction and policies for the City and for providing the resources
necessary to carry out those policies. As the City's chief administrator, the City Mayor is responsible for carrying out the
policy and direction set by the City Council. This includes the enforcement of laws and ordinances, the execution of contracts
and agreements, and maintenance of peace and order in the City. The City of Federal Way provides a full range of municipal
services, including policing, planning and zoning, street maintenance and construction, parks and recreation, and general
administrative services. The City operates enterprise funds for Storm Water Management and Dumas Bay Centre.
The City's 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 its will on the agency or organization or the possibility that the agency or organization will provide a
financial benefit to or impose a financial burden on the City.
Joint Ventures
A joint venture is a legal entity or organization which results from a contractual arrangement that is owned, operated, or
governed by two or more participants as a separate activity subject to joint control, in which participants retain an ongoing
financial interest or an ongoing financial responsibility. The City participates in two joint ventures: Valley Communications
Center and South Correctional Entity (SCORE). See Note 14, Joint Ventures, which more fully describes these organizations.
I117..yk1Ye]a97a6yWN1F:rY[IJeQKe]•/D19001oleo 1F.11R IA10W.1117a1AI7yler:\ecolElI&II/.%0040iWoV
The government -wide financial statements (i.e. the statement of net position and the statement of activities) report information
on all activities of the primary government. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business -type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Our policy is to
allocate indirect costs to specific functions or segments. Program revenues include 1) charges to customers or applicants who
purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements, or a particular function or segment. Taxes
and other items not properly included among program revenues are reported instead as general revenues.
As a general rule the effect of the interfund activity has been eliminated for the government -wide financial statements.
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.
Citv ofFederal Wav / 43
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
proj ects.
Transportation CIP Fund — This fund accounts for receipts and disbursements related to acquisition, design,
construction and any other related street project expenditures.
Performing Arts & Event Center Fund — This fund was established to accumulate resources to set aside for
Performing Arts and Event Center (PAEC).
The City reports the following fund groups as non -major funds:
Special Revenue Funds — These funds are to be used to account for the proceeds of revenues and sources (other than
special assessments, expendable trust or major capital projects) that are committed or legally restricted to
expenditures for specified purposes.
Capital Project Funds — These funds account for the acquisition or construction of major capital facilities with the
exception of those facilities financed by the proprietary fund. The major sources of revenues for these funds are
general obligation bond proceeds, grants from other agencies, local taxes, contributions from other funds, utility tax,
and real estate excise tax.
The City reports the following major enterprise funds:
Surface Water Management Fund — This fund was established to administer and account for all receipts and
expenditures related to the City's surface and storm water management system.
Dumas Bay Centre Fund — This fund was established to account for revenues and expenses related to the acquisition,
capital improvements maintenance and operations of the City -owned Dumas Bay Centre and Knutzen Family
Theatre. The Dumas Bay Centre is primarily used for meetings, events, lodging, and catering services.
Additionally, the City reports following internal service funds:
Risk Management Fund — This fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, and worker's compensation claims. Both risk control (to
minimize the losses that strike an organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is also currently recovering costs and building reserves
for general liability including property, casualty, errors and omissions and fidelity coverage.
Information Systems Fund — This fund was established to account for all costs associated with data processing,
telecommunications and the Geographical Information System (GIS). This fund owns and depreciates all non-
proprietary fund assets related to these functions, and charges equipment/software users for both maintenance and
operating costs and equipment replacement charges based on depreciation schedules.
Mail & Duplication Fund — This fund accounts for duplication, graphics and other general support services provided
to departments and funds throughout the City.
City of Federal Way / 44
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.
Health Insurance Fund — The City is currently self -insuring for medical insurance. The premiums paid by the City
and employees are deposited into this fund. Medical service for medical coverage and pharmaceutical reimbursement
are paid out of this fund. Also, establish reserves for the payment of estimated future claims.
Unemployment Insurance Fund - The City is currently self -insuring State Unemployment Compensation. Related
premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability.
Internal Service Funds account for goods and services provided to other departments or agencies of City of Federal Way, or to
other governments, on a cost -reimbursement basis.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING
Government -Wide and Governmental Funds
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis
of accounting, similar to the proprietary fund financial statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the City of Federal Way considers revenues to be available if they are collected within 30
days of the end of the current fiscal period. The City considers property tax as available if they are collected within 60 days
after year end. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
Property taxes, licenses, and interest associated within the current period are all considered to be susceptible to accrual and
have been recognized as revenues of the current fiscal period. Only the portion of property tax receivable due within the
current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
Major revenues recorded on the modified accrual basis are:
Property Taxes - King County acts as the City's collection agent for these taxes. Upon receipt, the County electronically
transmits to the City the taxes which it has collected on the City's behalf in the prior day. On this basis, property taxes received
in January are considered both measurable and available and are therefore recognized as revenue in the current year.
Other Locally Levied Taxes - King County also acts as the City's collection agent for the ''/4% and optional '/4% real estate
excise taxes. Although a time lag occurs in payment of these taxes to the City, since the taxes are actually collected by King
County in December and receipted to the City within 10 days after the end of the year, they are considered to be both
measurable and available, and are, therefore, accrued as revenue at year end. The State of Washington acts as the City's
collection agency for the locally levied sales tax. The sales tax is distributed monthly and remitted to the City in the following
month. The Sales Tax remittance in January is considered both measurable and available and is therefore accrued as revenue at
year-end.
Grant Revenues - Under Section G60.109 of the Codification of Governmental 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.
Citv ofFederal Wav / 45
Shared Revenues - Revenues that have been collected by the State, but not remitted by an intermediary collection agency to
the City, are considered measurable and available.
Other Revenue Sources - Other items recognized as revenue in the current year on the modified accrual basis include
investment interest earned but not received at year end; inter -fund, and intergovernmental service billings related to services
provided in the current year which are outstanding at year end; and any other material revenue amounts determined to be both
measurable and available under current modified accrual accounting practices. Revenues not considered to meet the criteria for
recognition on the modified accrual basis include licenses and permits, fines and forfeitures, and other miscellaneous revenues
which are generally not measurable until received.
Proprietary Funds
The proprietary fund statements are reported using the economic resources measurement focus and full -accrual basis of
accounting. Revenues are recorded when earned and expenses are recorded when liability is incurred regardless of the timing
of the cash flows.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the City are primarily user charges, and the cost of providing goods
or services to the general public on a continuing basis. Operating expenses for enterprise and internal service funds includes
the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as non -operating revenues and expenses.
Other Disclosure
The City was neither the lessor nor lessee in capital leases; did not capitalize interest on qualifying assets for business -type
activities; has not been the recipient of an endowment; did not engage in short-term debt activity during the year; has not
issued special assessment debt; does not benefit from on -behalf payment; has not pledged future revenues; has not incurred an
obligation for pollution remediation; had no hedging derivatives; is not the transferor or operator in a service concession
arrangement; and does not provide other post -employment benefits (OPEB), and was not the transferor or continuing
government in a merger, transfer of operation, etc.
BUDGETARY INFORMATION
Scope of Budget
Annual appropriated budgets are adopted for the general, some special revenue, and debt service funds on the modified accrual
basis of accounting. For governmental funds, there are no differences between the budgetary basis and generally accepted
accounting principles. Budgets for debts service and capital project funds are adopted at the level of the individual debt issue
or project and for fiscal periods that correspond to the lives of debt issues or projects.
Legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the total appropriation
amount. Any unexpended appropriation balances for annually budgeted funds lapse at the end of the year. Appropriations for
other special purpose funds that are non -operating in nature are adopted on a "project -length" basis and, therefore, are carried
forward from year to year without re -appropriation until authorized amounts are fully expended or the designated purpose of
the fund has been accomplished.
The individual funds within each fund type which are included in the City's biennial operating budget (funds budgeted on an
annual basis) are:
General Fund Special Revenue Funds Debt Service Fund Capital Project Funds
- Street Fund - Debt Fund -Downtown Redevelopment
- Arterial Street -City Facilities
- Utility Tax -Parks
- Solid Waste & Recycling -Transportation
- Special Contracts /Studies -Capital Project Reserve
- Hotel/Motel Lodging Tax -Performing Arts & Event Center
- Federal Way Community Center -Surface Water Management
- Traffic Safety -Real Estate Excise Tax
- Community Development Block Grant
-Paths & Trails
Citv ofFederal Wav / 46
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at
year end do not constitute expenditure or liabilities because the commitments will be reappropriated and honored during the
subsequent year.
Procedures for Adopting the Biennial Budget
The City's budget process and the time limits under which the budget must be prepared are defined by the Revised Code of
Washington (RCW) 35A.33. The procedures followed in establishing the annual budget are described below:
By late May the official budget call is made by the Finance Director for current level service budgets and a preliminary
financial forecast.
By late June, departments submit their preliminary expenditure estimates and the Finance department updates the
preliminary revenue estimates to define resources available to finance coming year expenditure programs.
By the first Tuesday in October, the Mayor submits a proposed budget to the City Council. This budget is based on
priorities established by the Council and estimates provided by City departments during the preceding months, and
balanced with revenue estimates made by the Finance Director. Copies of the preliminary budget are provided to the City
Council and made available to staff and the public.
City Council conducts workshops and public hearings on the proposed budget between mid -September and mid -
December.
No later than the third Monday in November, the City Council must adopt an ordinance to establish the amount of
property taxes to be levied in the coming year.
No later than the first two weeks of November, the City Clerk publishes a notice of the filing of the preliminary budget
and notices of public hearings to be held during preliminary budget deliberations.
Two public hearings on the proposed budget are also held during November and December. Final hearings on the budget
must begin on or before the first Monday of December, and may continue until the 25th day prior to beginning of the next
fiscal year.
By December 31, the City Council makes its adjustments to the proposed budget and adopts a final budget by ordinance.
The final operating budget, as adopted, is published and distributed within the first three months of the following year.
Copies of the adopted budget are made available to the public.
Amending the Budget
The Mayor is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter
the total expenditures of a fund or that affect the number of authorized employee positions, salary ranges, hours, or other
conditions of employment must be approved by the City Council.
When the City Council determines that it is in the best interest of the City to increase or decrease the appropriation for a
particular fund, it may do so by ordinance approved by one or more than the majority after holding public hearing(s).
The budget amounts shown in the financial statements are the final authorized amounts as revised during the year.
The financial statements contain the original and final budget information. The original budget is the first complete
appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental
appropriations, and other legally authorized changes applicable for the fiscal year.
Citv ofFederal Wav / 47
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, 2016, the State Treasurer
was holding $61,992,807 in the Local Government Investment Pool. The amount is classified on the balance sheet as cash and
cash equivalents in various funds. The interest on these investments is prorated to the various funds based on the average
monthly balance for each fund.
The amounts reported as cash and cash equivalents also include compensating balances maintained with certain banks in lieu
of payments for services rendered. The average compensating balances maintained during the 2016 were approximately $13
million.
For purposes of the Statement of Cash Flows, the City considers all highly liquid investments with a maturity of three months
or less when purchased, to be cash equivalents. At December 31, 2016, the total cash and cash equivalents were $73,077,850.
In accordance with GASB Statement 79, LGIP investments are measured at amortized cost. See (Note 5 - Deposits and
Investments).
Receivables
Taxes receivable consists of property taxes and related interest and penalties (see Note 6 - Property Tax). Accrued interest
receivable consists of amounts earned on investments, notes, and contracts at the end of the year.
Customer accounts receivable consist of amounts owed from private individuals or organizations for goods and services
including amounts owed for which billing have not been prepared. Notes and contracts receivable consist of amounts owed on
open accounts from private individuals or organizations for goods and services rendered.
Amounts Due to and from Other Funds; Interfund Loans
Activities between funds that are representative of lendingiborrowing arrangements outstanding at the end of the fiscal year
are referred to as either interfund loans receivable/payable or advances tofrom other funds. All other outstanding balances
between funds are reported as due to/from other funds. Any other outstanding balances between the governmental activities
and business -type activities are reported in the government -wide financial statements as internal balances. A separate
schedule of inter -fund loans receivable and payable is furnished in Note 12, Interfund Transactions.
Inventories and Prepaids
Inventories in the governmental funds are recorded as expendable supplies held for consumption. The cost is recorded as
expenditure at the time individual inventory items are purchased. Amounts remaining at year-end are immaterial and,
therefore, are not reflected on the balance sheets of those funds. There were no material inventories at year-end in the Internal
Service or Enterprise Funds. The City currently uses the consumption method of accounting for prepaids.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure (e.g., roads, bridges, sidewalks, and similar items),
are reported in the applicable governmental or business -type activities columns in the government -wide financial statements.
Capital assets are defined by the City of Federal Way as assets with an initial, individual cost of more than $5,000 and an
estimated useful life in excess of one or more years. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. See Note 8, Capital
Assets.
Cost for additions or improvements to capital assets are capitalized when they increase the effectiveness or efficiency of the
asset.
Cost of normal maintenance and repairs are not capitalized.
Citv ofFederal Wav / 48
Depreciation on all capital assets is recorded as an allocated expense in the government -wide Statement of Activities and in
the proprietary fund statements. Property, plant, and equipment of the primary government are depreciated using the straight
line method over the following estimated useful lives:
Asset Class
Computers ...............................
Printers &Faxes ........................
Telecommunications Equipment...
Police Radio Equipment ..............
Other Office Equipment ..............
Office Furniture and Fixtures........
Recreation Equipment ................
Parks Equipment .......................
Police Equipment .......................
Shop/Miscellaneous Equipment...
Heavy Work Equipment ..............
Non -Police Vehicles ...................
Police Patrol Vehicles .................
Police Non -Patrol Vehicles..........
Heavy Trucks ...........................
Land Improvements ...................
Buildings .................................
Infrastructure ............................
Deferred Inflows of Resources
Life in Years
..................................5-6
.....................................7
.....................................7
...................................11
...... ............ 4-10
.....................10
............................10
.........................9-11
........................10-12
....................10-16
.........................7
.........................5
........ ............. 7-10
........ ............ 8-10
.......................20
A deferred inflow of resources is an acquisition of net assets by the government that is applicable to a future reporting period.
See (Note 6 — Property Tax) and (Note 9 — Pension Plans)
Compensated Absences Payable
The City records a liability for all outstanding vacation pay and accrued compensatory time. In governmental funds, vacation
pay and compensatory time is recorded as expenditures when paid which occurs when used or upon termination. In the entity -
wide statements and the proprietary fund statements, vacation pay and compensatory time is recorded as a liability and
expense in the year earned.
Employee vacation leave is accumulated monthly at rates ranging from 12 to 27 days per year depending on term of
employment. Employees may accumulate up to a maximum of 240 hours of vacation leave, except the 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 will be paid out up to two years of their monthly
vacation accrual rate.
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. Compensated Absences Payable
outstanding at year-end is outlined in Note 11.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of all state sponsored pension plans and additions
to/deductions from those plans' fiduciary net position have been determined on the same basis as they are reported by the
Washington State Department of Retirement Systems. For this purpose, benefit payments (including refunds of employee
Citv ofFederal Wav / 49
contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair
value. See (Note 9 — Pension Plans).
Long -Term Liabilities
In the government -wide financial statements and the proprietary fund financial statements, long-term debt and other long-term
obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund
statement of net position. See (Note 11 - Long -Term Debt).
Unearned Revenues
Unearned revenue is a liability account that reports amounts received in advance of providing goods or services. For detailed
information, See (Note 7 — Unearned Revenues and Receivables).
Fund Balance Classification
Fund balance is a measurement of available financial resources and is the difference between total assets and total liabilities in
each fund.
Beginning with the most restrictive constraints, fund balance amounts will be reported in the following categories:
Nonspendable — amounts that are not in a spendable form or are legally or contractually required to be maintained
intact.
Restricted — amounts that can be spent only for the specific purposes stipulated by external parties either
constitutionally or through enabling legislation.
Committed — amounts that can be used only for the specific purposes determined by formal action of the City Council
through an ordinance or resolution. Commitments may be changed or lifted by the action of the City Council using
the same formal action of ordinance or resolution that was used to create the commitment.
Assigned — amounts intended to be used by the government for specific purposes. Intent can be expressed by the City
Council or the Mayor. In governmental funds other than the general fund, assigned fund balance represents the
amount that is not restricted or committed. This indicates that resources in other government funds, at a minimum,
are intended to be used for the purpose of that fund.
Unassigned — includes all amounts not contained in other classifications and is the residual classification of the
general fund only. Unassigned amounts are available for any legal purpose.
The council can use a resolution to modify or rescind a fund balance commitment. When expenditure is incurred for which
both restricted and unrestricted resources are available, it is the City's policy to use restricted resources first. When
unrestricted (committed, unassigned) resources are available, it is the City's policy to spend committed resources first, and
then unassigned, in that order. The minimum fund balance established by the Reserve Policy, and passed by resolution from
the City Council, states "The City shall have an operating cash flow reserve of seventeen percent of the City's General Fund
operating expenditures or $9 million. In addition, the City shall have a contingency for unanticipated cost of $1 million to
cover revenue shortfalls resulting from unexpected economic change or recessionary periods, or to provide funds in the event
of major unplanned expenditures the City could face as a result of natural disasters. The policy shall also include a strategic
opportunities reserve of $2 million to provide liquidity to respond to economic opportunity that is not budgeted for that may
provide a long term economic benefit to the City. In the event that any of the Contingency or Strategic Opportunities Reserve
is used, such appropriation shall be repaid to the fund annually over the next three years. The purpose of the ending fund
balance is to provide financial stability, cash flow for operations and the assurance that the City will be able to respond to
revenue shortfalls with fiscal strength." General fund expenditures at 12/31/2016 were $44.9 million and Unassigned General
fund balance at year -ended 2016 was $13.8 million or (31 %).
Other funds that have a significant minimum fund balance policy are: Street Fund - $0.5 million; Arterial Street Fund - $0.1
million; Utility Tax Fund - $2.5 million, REET Fund — one year revenue reserve; Hotel/Motel Lodging Tax Fund - $0.2
million; Community Center Fund - $1.5 million; Traffic Safety Fund - $1.5 million; Debt Service Fund — adequate reserve in
accordance with bond ordinance or minimum of one year debt service amount; Dumas Bay Centre Fund - $0.5 million; and
Surface Water Management Fund — $0.5 million.
The Government -wide statement of net position reports $569.0 million of net position, of which $21.4 million is restricted by
the enabling legislation, and $499.9 is for net investment in capital assets (there are no unspent proceeds of debt).
Citv ofFederal Wav / 50
2016 FUND BALANCE CLASSIFICATION
Fund Balance
General
Fund
utility Debt Downtown Transport- PerformingNonmajor
Street Arts & Event
Tax Service Redevelop. anon Ctr
Govt
Total
Nonspendable:
Courttrust $
153,859
$ $ $ $ $ $
$
$ 153,859
Prepaid insurance/debt service
33,425
33,425
Restricted for:
Police covert/seizure
108,147
108,147
Future debt payments
-
2,508,514
2,508,514
Special Contracts/Studies
-
525,428
525,428
Hotel/Motel Lodging Tax
737,375
737,375
Path & Trails Reserves
568,722
568,722
Downtown Redevelopment
2,117,223
-
2,117,223
City Facilities CIP
-
29,593
29,593
Parks CIP
-
1,858,754
1,858,754
Transportation CIP
6,136,786
-
6,136,786
Performing Arts & Event Ctr
- 855,100
-
855,100
Real Estate Ewise Tax
-
5,709,685
5,709,685
Community Development Block G
29,985
29,985
Committed to:
Capital, debt, and operations
-
2,457,686
-
2,457,686
Petty cash/advance travel
21,600
-
-
21,600
Comm Development Block Grant
-
-
35,844
35,844
Proposition 1
1,290,233
-
1,290,233
Transportation CIP
- - 3,852,827
3,852,827
Downtown Redevelopment
1,877 -
11877
Arterial Street
-
245,970
245,970
Solid Waste/Recycling
176,309
176,309
Federal Way Community Center
1,516,500
1,516,500
Traffic Safety
2,551,279
2,551,279
Snow/ice removal
526,511
-
526,511
Parks CIP
Performing Arts & Event Ctr
177,413
-
517,763
276,835
-
276,835
695,176
Capital Project Reserve
-
-
482,717
482,717
Unassigned:
General Fund
13,794,955
-
-
13,794,955
Total Fund Balance: $14,289,398
$ 526,511 $ 3,7479919 $ 2,508,514 $ 2,119,100 $ 9,989,613 $ 1,372,863
$14,744,996
$ 4992989914
Interfund Transactions
There are four types of transactions between funds - inter -fund loans, inter -fund services provided and used, inter -fund
reimbursements, and inter -fund transfers. Interfund loans are temporary borrowings of cash which do not affect operating
statements, but which may incur interest expense or expenditure to the borrowing fund. Interfund services provided and used
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 (see Note 12).
Citv ofFederal Wav / 51
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 $46,365,490 difference are as follows:
Bonds Payable & Premium at beginning of year
$ 34,024,220
Plus: Inclusion of compensated absences
2,032,808
Plus: Current year addition/reduction of principal portion of debt & premium
2,030,892
Plus: Net Pension Liability
11,893,469
Plus: Deferred Inflows of Resources Related to Pensions
319,074
Less: Deferred Outflows of Resources Related to Pensions
(3,934,973)
Net Adjustment to reduce fund balances -total governmental
funds to arrive at netposition -governmental activities
$46,365,490
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 $19,431,185 difference are as follows:
Capital outlay
$ 26,745,849
Plus: Contributed Capital
763,318
Less: Loss on Capital
(386,346)
Less: Governmental depreciation expense
(7,603,488)
Less: Decrease in investment in joint venture
(88,148)
Net adjustment to increase net changes in fund balances -
Total governmental funds to arrive at changes in net position
ofgovernmental activities
$19,431,185
Another element of the reconciliation states that "Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds." This item presents:
Property taxes earned reported as deferred inflow of resources in the fund statements $ 7,837
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 $ (111,318)
Adjustment for GASB 68 pension reporting $ 117,883
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.
Citv ofFederal Wav / 52
NOTE 4 — SUPPLEMENTAL APPROPRIATIONS
Operating Budget Funds
Appropriations established during 2016 for the City's operating budget funds are provided below. As explained in Note 1,
both original and supplemental appropriations are adopted by the City Council by ordinance. Both original and final budget
appropriations are shown on the accompanying financial statements. The final budget values include all adopted adjustments
to original budget amounts. This table does not include transfers out or Proprietary Funds.
FUND
ORIGINAL
BUDGET
2016
SUPPLEMENTAL
APPROPRIATIONS
FINAL BUDGET
General Fund $
40,887,400
$ 5,058,133
$ 45,945,533
Special Revenue Funds:
Street Fund
3,990,942
99,504
4,090,446
Arterial Street Fund
1,515,500
-
1,515,500
Utility Tax Fund
2,898,284
80,066
2,978,350
Solid Waste/Recycling Fund
489,980
(25,358)
464,622
Special Contracts / Studies
-
50,000
50,000
Hotel/Motel Lodging Tax
200,300
-
200,300
Federal Way Comawnity Center
2,199,112
144,529
2,343,641
Traffic Safety
2,169,881
170,372
2,340,253
Community Development Block Gant
1,237,103
-
1,237,103
Paths & Trails
-
-
-
Subtotal Special Revenue Funds:
14,701,102
519,113
15,220,215
Debt Service Fund
1,721,538
(906,415)
815,123
Capital Project Funds:
Real Estate Excise Tax
-
-
-
Downtown Redevelopment
-
136,123
136,123
City Facilities
-
53,232
53,232
Parks
300,000
3,239,945
3,539,945
Transportation
14,585,000
15,142,932
29,727,932
Capital Project Reserve
-
-
-
Perfomvng Arts & Event Center
-
15,630,777
15,630,777
Subtotal Capital Project Funds:
14,885,000
34,203,009
49,088,009
Total: $ 72,195,040 $ 38,873,840 $ 111,068,880
NOTE 5 — DEPOSITS AND INVESTMENTS
As required by state law, all deposits and investments of the City's funds are obligations of the U.S. Government, the Local
Government Investment Pool (LGIP), bankers' acceptances, or deposits with Washington State banks and savings and loan
institutions. In 2016 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, 2016, the equity in pooled cash and
investments was $73,077,850.
At year-end, the City had $72,171,532 in cash and cash equivalents which consisted of investments with the LGIP of
$61,992,807 the City's checking account bank balance prior to outstanding checks was $9,975,756; deposit account of $250,
petty cash and change funds, advance travel fund and investigative fund totaling $48,860, and Court Trustee Fund of
$153,859. Cash held with an escrow agent is $906,318. 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
Citv ofFederal Wav / 53
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.
In accordance with GASB Statement 79, LGIP is reported on amortized cost basis. Furthermore, the City can invest and
withdraw their investments on a daily basis with a limit of one transaction per business day and minimum transaction amount
of five thousand dollars. There is no maximum transaction amount, but an investment or withdrawal of ten million dollars or
more, a one -day notification prior to the transfer date is requested, but not required.
The State Treasurer's Office administers the Washington State LGIP authorized under Chapter 43.250 RCW. The LGIP
operates in a manner consistent with the SEC 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.
As of December 31, 2016 the City had the following investments and maturities:
SCHEDULE OF INVESTMENTS BYMATURITIFS
AS OF DECEMBER 31, 2016
Inwstment maturities
Less than 1 to 2 Greater than
Investment Type Book Value 1 year years 3 years
State Investment Pool $ 61,992,807 $ 61,992,807 $ $
$ 61,992,807 $ 61,992,807 $ $
Reconciliation of Government -Wide Statement of Net Position:
Key Bank checking account per books $
9,975,756
Key Bank deposit account $
250
Petty cash/change fund/advance travel/investigative fund
48,860
Local Government Investment Pool
61,992,807
Municipal Court Trust on books
153,859
Subtotal cash and cash equivalents
72,171,532
Cash with escrow agent
906,318
Total cash and investments, Government -Wide
Statement of Net Position $ 73,077,850
Investments
Investments Measured at Amortized Cost
As of December 31, 2016, the City had the following investments at amortized cost:
SCHEDULE OF INVESTMENTS BY TYPES
AS OF DECEMBER 31, 2016
Weighed Average
Maturities
Investment Type (Days) Cost Investments Total
State Treasur's hnvestment Pool 30 $ 61,992,807 $ 61,992,807 $ 61,992,807
$ 61,992,807 $ 61,992,807 $ 61,992,807
Custodial Credit Risk
The risk that in event of a failure of the counterparty to an investment transaction the City would not be able to recover the
value of the investment of collateral securities. As of December 31, 2016, the City is not exposed to custodial credit risk as
there are not investments held with a brokerage firm or counterparty.
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;
Citv ofFederal Wav / 54
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, 2016 all City investments were in the LGIP. The LGIP is unrated. LGIP is comparable to Securities
Exchange Commission 2a-7 to minimize credit risk.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The investment
policy states: "no more than 5% of the portfolio may be invested in the securities of a single issuer, except for the U.S.
Treasury, to which no limits apply, and commercial paper, which is limited to 3% of the portfolio in accordance with state law.
No more than 30% of the portfolio may be invested in bankers' acceptances and certificates of deposit." The City currently
only invests in LGIP.
Other Information
Below is a schedule of investments by fund type:
S CB EDULE OF EWES TMENTS BY FUND CATEGORY AND INVESTMENT TYPE
AS OF DECEMBER 31, 2016
State Inwstment
Fund Type
Pool
Total
General Fund
$ 12,761,653 $
12,761,653
Other Major Funds
16,212,766
16,212,766
Special Revenue Funds
5,781,552
5,781,552
Capital Projects Funds
7,047,055
7,047,055
Enterprise Funds
5,682,520
5,682,520
Intemal Services Funds
14,507,263
14,507,263
Total: $ 61,992,807 $
61,992,807
NOTE 6 — PROPERTY TAXES
The King County Treasurer is responsible for collecting property taxes levied in the County by all taxing districts. Amounts
collected by the County on the City's behalf are remitted daily.
PROPERTY TAX CALENDAR
January 1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100% of market value.
October 31 Second installment is due.
As described in Note 1, taxes are levied and become an enforceable lien against properties as of January 1. Annual tax billings
may be paid in two equal installments, due April 30 and October 31. At December 31, 2016, the balance of property taxes
receivable recorded by the City was $222,787. Of this, $204,880 is recorded as deferred inflow of resources, since it was not
collected within the first 30 days of the end of 2016.
Property taxes are recorded as a receivable when levied, offset by deferred inflow of resources. During the year, property tax
revenues are recognized when cash is collected. At year-end, property tax revenues are recognized for collections expected to
occur within 30 days. No allowance for uncollectible taxes is established because delinquent taxes are considered fully
collectible.
Under State law, the maximum levy (for general governmental services) is up to $3.60 per $1,000 of assessed valuation,
subject to two limitations, set forth below. Since the City of Federal Way is not a full service city, the City is only allowed
$1.60. The remaining $2.00 is for the fire district ($1.50) and library district ($0.50).
1. Chapter 84.55 of the State RCW was amended most recently by Initiative No. 747 (which was passed by voters on
November 6, 2001), limits the total dollar amount of regular property taxes levied by the City to the amount of such
taxes levied in the three most recent years multiplied by a limit factor, plus an adjustment to account for taxes on new
construction, improvements and state -assessed property at the previous year's rate. As amended by Initiative No.
Citv ofFederal Wav / 55
747, the limit factor is the lesser of 101% or 100% plus the percent change in the Implicit Price Deflator, unless a
greater amount is approved by a simple majority of the voters; and
2. The Washington State Constitution limits the total regular property taxes to 1% of assessed valuation or $10 per
$1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or
below the 1% limit.
For levy year received in 2016, the City's regular tax levy was $1.18504 per $1,000 on a 2015 assessed valuation of
$8,905,294,058 for a total regular levy of $10,487,319.
Deferred Inflow of Resources
The table below provides details of the deferred inflow of resources as reported on the fund financial statements.
DEFERRED INFLOW OF RESOURCES
AS OF DECEMBER 31, 2016
Total
Downtown General
Deferred Inflow
General Redev. Govt
Property tax
$ 204,879 $ 1 $ 204,880
Total by Fund:
$ 204,879 $ 1 $ 204,880
NOTE 7 - UNEARNED REVENUES AND RECEIVABLES
Unearned Revenues
The table below provides details of the unearned revenues as reported on the statement of net position.
UNEARNED REVENUES
AS OF DECEMBER 31, 2016
Unearned Revenues
General
Nonmajor
Street Gov't
Total
General
Gout
Surface
Water
Mgmt
Dumas
Bay
Centre
Total
Proprietary
SWM fees
-
-
116,725
116,725
Legal/Other
22,354
-
22,354
-
-
Commute Trip Reduction Grant
-
70,515
70,515
Recreation programs / facility
rentals
46,755
- 142,463
189,218
-
285,518
285,518
Total by Fund:
$ 69,110
$ 70,515 $ 142,463
$ 282,088
$ 116,725
$ 285,518
$ 402,243
Receivables & Due from Other Governments
The receivables for the fiscal year ended December 31, 2016 on the government -wide statement of net position are detailed in
the following schedule.
RECEIVABLES &DUE FROM OTHER GOVERNMENTS AS OFDECEMBER 31, 2016
Downtown
Transport-
Nonmajor
Receivuble
General
Street
Utility Tax
Redevelopment
ation
Godt
Proprietary
Total
Property tax
$ 222,787
$
$
$
$
$ -
$
$ 222,787
Real Estate Excise tax
-
252,801
252,801
Utility tax
-
1,292,387
-
1,292,387
Gambling tax
21,465
-
-
21,465
Recreation programs/
52,443
7,357
19,283
79,082
facilities
Grants & contributions
88,421
2,774,626
254,782
381,123
3,498,953
Off Duty security &
404,355
62,020
-
21,000
-
487,375
Otherreceivable
Utility construction
-
-
-
872,615
-
872,615
contract receivable
State Shared revenue
1,593,338
85,630
1,011
71,205
612,596
58,050
2,421,829
Surface Water
_
_
-
-
_
-
133,325
133,325
Management fccs
TotalbvFund:
$2,382,808
S 147,650
$ 1,293,398
$ 71,205
$4,259,837
$ 593,990
$ 533,731
$9,282,619
Citv ofFederal Wav / 56
NOTE 8 — CAPITAL ASSETS
Capital assets activity for the year ended December 31, 2016 is as follows:
CAPITAL ASS EFS
AS OF DECEMBER 31, 2016
Adjusted Beginning
Ending Balance
Governmental Activity
Balance
1/1/2016
Additions
Deletions
12/31/2016
Capital Assets, not being depreciated:
Land
$279,352,221
$2,070,269
$ - $281,422,490
Construction in progress
15,697,231
24,624,826
(4,721,567) 35,600,490
Total capital assets, not being depreciated:
$295,049,452
$26,695,095
$ (4,721,567) $317,022,980
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total accumulated depreciation:
Total assets being depreciated, net
39,749,163
259,185
(15,808)
39,992,540
25,091,751
1,358,773
-
26,450,524
169,816,179
2,856,716
(128,721)
172,544,174
18,063,581
2,480,242
(1,903,375)
18,640,448
252,720,674
6,954,916
(2,047,904)
257,627,686
(16,847,772)
(1,938,835)
15,808
(18,770,799)
(15,813,011)
(1,171,057)
-
(16,984,068)
(58,903,262)
(5,319,379)
62,164
(64,160,477)
(12,032,937)
(1,446,045)
1,903,375
(11,575,607)
(103,596,982)
(9,875,316)
1,981,347
(111,490,951)
149,123,692
(2,920,400)
(66,557)
146,136,735
Governmental activities capital assets, net $444,173,145 $239774,695 ($49788,124) $463,1599715
Adjusted Beginning
Fx► Balance
Business -Type Activities
Balance
Additions
Deletions
12/3/31/2016
1/1/2016
Capital Assets, not being depreciated:
Land
$11,013,528
$218,965
$ - $11,232,493
Construction in progress
2,844,949
615,121
(3,438,348) 21,722
Total capital assets, not being depreciated:
$13,858,477
834,086
(3,438,348) 11,254,215
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Infrastructure
Machinery & equipment
Total accumulated depreciation:
Total assets being depreciated, net
3,600,864
904,483
- 4,505,347
2,831,681
1,081,691
- 3,913,372
56,847,003
1,548,597
- 58,395,600
122,200
52,945
- 175,145
63,401,747
3,587,717
- 66,989,464
(3,281,550)
(150,742)
- (3,432,292)
(213,247)
(28,317)
- (241,564)
(14,544,843)
(568,470)
- (15,113,313)
(104,165)
(4,340)
- (108,505)
(18,143,805)
(751,869)
- (18,895,674)
45,257,942
2,835,848
- 48,093,790
Business -Type activities capital assets, net $599116,419 $3,6699934 ($3,4389348) $599348,005
Citv ofFederal Wav / 57
At the end of 2016, 16 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, 2016, are as follows:
AS OF DECEMBER 31, 2016
Governmental Activities Projects Construction Remaining
in progress Comutitment
Performing Arts & Event Center
Trail and pedestrian access improvements
S 320th St @ 20th Ave South
loth Avenue SW / SW 344th St: SW Campus Drive - 21st Ave SW
S 352nd Street Edens ion From SR-99 to SR 161
South 356th St: SR99 - SR161
SR99 HOV Lanes Phase 5
SW 336th Way / SW 340th St: 26th PI SW - Hoyt Rd
S 314th St: 20th Ave S - 23rd Ave S - Install New Sidewalks
Citywide Pedestrian Crossing Improvements
S 344th Way @ Weyerhaeuser Way S
School Zone Enhancements
21st Ave S Sidewalks
Sacajawea Safe Routes to Schools
Citywide Flashing Yellow Retrofits Project
Steel Lake Park to Downtown Trail Project
$ 20,083,924
$ 12,651,766
265,914
1,071,324
2,394,351
612,542
318,532
931
3,956,686
265,000
552,184
2,068,354
4,693,963
5,237,016
143,102
60,788
163,480
11,520
426,163
728,704
281,685
-
181,305
205,000
134,363
59,495
1,191,776
279,558
738,211
2,114
74,850
663,000
total hovernmental Aenvines �, 3�,6UU,4YU N LS,L�4,11L
Depreciation expense was charged to functions/programs of the primary government as follows:
CAPITAL ASSETS DEPRECIATION BY TYPE
AS OF DECEMBER 31, 2016
Governmental and Internal Service Activities
General Government
$173,327
Security of Persons & Property
1,360,893
Transportation
5,592,741
Physical Environment
17,279
Economic Environment
121,403
Health
57,167
Culture & Recreation
2,552,507
Total Depreciation - Governmental Activities
$9,875,316
Business -Type Activities
Utilities - Surface Water Management
Culture & Recreation - Dumas Bay Centre
$594,630
157,239
Total Depreciation -Bus ines s -Type Activities
$ 751,869
Citv offederal Wav / 58
NOTE 9 — PENSION PLANS
The following table represents the aggregate pension amounts for all plans subject to the requirements of the GASB Statement
68, Accounting and Financial Reporting for Pensions for the year 2016:
Aggregate Pension Amounts — All Plans
Pension liabilities
($13,477,730)
Pension assets
$2,418,256
Deferred outflows of resources
$4,242,095
Deferred inflows of resources
($347,615)
Pension expense/expenditures
$2,461,848
State Sponsored Pension Plans
Substantially all City of Federal Way full-time and qualifying part-time employees participate in one of the following
statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost -sharing,
multiple -employer public employee defined benefit and defined contribution retirement plans. The state Legislature
establishes, and amends, laws pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington,
issues a publicly available 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 98540-8380
Or
downloaded from the DRS website at www.drs.wa.gov.
Public Employees' Retirement System (PERS)
PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts;
employees of the legislature; employees of district and municipal courts; employees of local governments; and higher
education employees not participating in higher education retirement programs. PERS is comprised of three separate pension
plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with
a defined contribution component.
PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation (AFC) times the member's years of service. The AFC is the average of the member's
24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years
of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from
active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to
reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost -of -
living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and
Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new
entrants on September 30, 1977.
Contributions
The PERS Plan 1 member contribution rate is established by State statute at 6 percent. The employer contribution rate is
developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18
percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1
required contribution rates (expressed as a percentage of covered payroll) for 2016 were as follows:
PERS Plan 1
Actual Contribution Rates:
Employer
Employee*
PERS Plan 1
6.23%
6.00%
PERS, Plan 1 UAAL
4.77%
6.00%
Administrative Fee
0.18%
Total
1 11.18%
1 6.00%
* For employees participating in Judicial Benefit Multiplier (JBM), the contribution rate was 12.26%
Citv ofFederal Wav / 59
The City of Federal Way's actual PERS plan contributions were $663,133 to PERS Plan 1 for the year ended December 31,
2016.
PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation (AFC) times the member's years of service for Plan 2 and 1 percent of AFC for Plan 3.
The AFC is the average of the member's 60 highest -paid consecutive service months. There is no cap on years of service
credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement before
age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years
of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each
year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can
retire under one of two provisions:
• With a benefit that is reduced by three percent for each year before age 65; or
• With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work rules.
PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of five percent
for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30
years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor
benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the
CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of Labor
and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested in the
defined benefit portion of their plan after ten years of service; or after five years of service if 12 months of that service are
earned after age 44.
PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on those
contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change
rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a minimum of 5
percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined contribution
benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan.
Contributions
The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1
UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council
adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required
contribution rates (expressed as a percentage of covered payroll) for 2016 were as follows:
PERS Plan 2/3
Actual Contribution Rates:
Employer 2/3
Employee 2*
PERS Plan 2/3
6.23%
6.12%
PERS Plan 1 UAAL
4.77%
Administrative Fee
0.18%
Employee PERS Plan 3
varies
Total
11.18%
6.12%
* For employees participating in JBM, the contribution rate was 15.30%
The City of Federal Way's actual PERS plan contributions were $866,073 to PERS Plan 2/3 for the year ended December 31,
2016.
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF)
LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and
as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans.
LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined per year of service
calculated as a percent of final average salary (FAS) as follows:
• 20+ years of service — 2.0% of FAS
• 10-19 years of service — 1.5% of FAS
0 5-9 years of service — 1 % of FAS
Citv ofFederal Wav / 60
The FAS 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 ten years of service. Members are eligible for retirement with five years of service at the age of 50. Other
benefits include duty and non -duty disability payments, a cost -of living adjustment (COLA), and a one-time duty -related death
benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members were vested after the completion of
five years of eligible service. The plan was closed to new entrants on September 30, 1977.
Contributions
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as long as the plan remains fully
funded. The LEOFF Plan 1 had no required employer or employee contributions for fiscal year 2015. Employers paid only
the administrative expense of 0.18 percent of covered payroll.
LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the
final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible
for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53
receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is three percent for each
year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement
benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty
disability payments, a cost -of -living allowance (based on the CPI), capped at three percent annually and a one-time duty -
related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the
completion of five years of eligible service.
Contributions
The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2. The employer rate included an administrative expense component set at 0.18 percent. Plan 2 employers and
employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. The LEOFF Plan 2 required
contribution rates (expressed as a percentage of covered payroll) for 2016 were as follows:
LEOFF Plan 2
Actual Contribution Rates:
Employer
Employee
State and local governments
5.05%
8.41%
Administrative Fee
0.18%
Total
5.23 %
8.41 %
The City of Federal Way's actual contributions to the plan were $669,609 for the year ended December 31, 2016.
The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement
the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension
Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state
constitution and could be changed by statute. For the state fiscal year ending June 30, 2016, the state contributed $60,375,158
to LEOFF Plan 2. The amount recognized by the City of Federal Way as its proportionate share of this amount is $414,672.
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation
completed in 2016 with a valuation date of June 30, 2015. The actuarial assumptions used in the valuation were based on the
results of the Office of the State Actuary's (OSA) 2007-2012 Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2015 actuarial valuation report. The TPL
was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2016. Plan liabilities were
rolled forward from June 30, 2015, to June 30, 2016, reflecting each plan's normal cost (using the entry -age cost method),
assumed interest and actual benefit payments.
Inflation: 3% total economic inflation; 3.75% salary inflation
Salary increases: In addition to the base 3.75% salary inflation assumption, salaries are also expected to grow by
promotions and longevity.
Investment rate of return: 7.5%
Mortality rates were based on the RP-2000 report's Combined Healthy Table and Combined Disabled Table, published by the
Society of Actuaries. The OSA applied offsets to the base table and recognized future improvements in mortality by
Citv ofFederal Wav / 61
projecting the mortality rates using 100 percent Scale BB. Mortality rates are applied on a generational basis; meaning, each
member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime.
There were minor changes in methods and assumptions since the last valuation.
For all systems, except LEOFF Plan 2, the assumed valuation interest rate was lowered from 7.8% to 7.7%. Assumed
administrative factors were updated.
Valuation software was corrected on how the nonduty disability benefits for LEOFF Plan 2 active members is
calculated.
New LEOFF Plan 2 benefit definitions were added within the OSA valuation software to model legislation signed
into law during the 2015 legislative session.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.5 percent.
To determine that rate, an asset sufficiency test included an assumed 7.7 percent long-term discount rate to determine funding
liabilities for calculating future contribution rate requirements. (All plans use 7.7 percent except LEOFF 2, which has
assumed 7.5 percent). Consistent with the long-term expected rate of return, a 7.5 percent future investment rate of return on
invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue being
made at contractually required rates (including PERS 2/3, PSERS 2, SERS 2/3, and TRS 2/3 employers, whose rates include a
component for the PERS 1, and TRS 1 plan liabilities). Based on these assumptions, the pension plans' fiduciary net position
was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return of 7.5 percent was used to determine the total liability.
Long -Term Expected Rate of Return
The long-term expected rate of return on the DRS pension plan investments of 7.5 percent was determined using a building-
block -method. The Washington State Investment Board (WSIB) used a best estimate of expected future rates of return
(expected returns, net of pension plan investment expense, including inflation) to develop each major asset class. Those
expected returns make up one component of WSIB's capital market assumptions. The WSIB uses the capital market
assumptions and their target asset allocation to simulate future investment returns at various future times. The long-term
expected rate of return of 7.5 percent approximately equals the median of the simulated investment returns over a 50-year time
horizon.
Estimated Rates of Return by Asset Class
Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation
as of June 30, 2016, are summarized in the table below. The inflation component used to create the table is 2.2 percent and
represents the WSIB's most recent long-term estimate of broad economic inflation.
Asset Class
Target Allocation
% Long -Term Expected
Real Rate of Return
Arithmetic
Fixed Income
20%
1.70%
Tangible Assets
5%
4.40%
Real Estate
15%
5.800
Global Equity
37%
6.60%
Private Equity
23%
9.60%
100 %
Sensitivity of the Net Pension Liability/(Asset)
The table below presents the City of Federal Way proportionate share* of the net pension liability calculated using the
discount rate of 7.5 percent, as well as what the City of Federal Way proportionate share of the net pension liability would be
if it were calculated using a discount rate that is 1-percentage point lower (6.5 percent) or 1-percentage point higher (8.5
percent) than the current rate.
1% Decrease
(6.5%)
Current Discount
Rate
(7.5%)
1% Increase
(8.5%)
PERS 1
$7,383,441
$6,122,767
$5,037,879
PERS 2/3
$13,541,808
$7,354,962
($3,828,682)
LEOFF 2
$6,781,453
($2,418,255)
($9,352,163)
Citv ofFederal Wav / 62
Pension Plan Fiduciary Net Position
Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial
report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
At June 30, 2016, the City of Federal Way's reported a total pension liability of $13,477,730 total pension net asset of
$2,418,256 for its proportionate share of the net pension liabilities and net pension asset as follows:
Liability or Asset
PERS 1
$6,122,767
PERS 2/3
$7,354,963
LEOFF 2
$2,418,256
The amount of the asset reported above for LEOFF Plan 2 reflects a reduction for State pension support provided to the City of
Federal Way. The amount recognized by the City of Federal Way as its proportionate share of the net pension asset, the
related State support, and the total portion of the net pension asset that was associated with the City of Federal Way were as
follows:
Liability or Asset)
LEOFF 2 — employer's proportionate share
$2,418,256)
LEOFF 2 — State's proportionate share of the net pension
liability/(asset) associated with the employer
($1,576,526)
TOTAL
$3,994,782
At June 30, the City of Federal Way proportionate share of the collective net pension liabilities was as follows:
Proportionate
Share 6/30/15
Proportionate
Share 6/30/16
Change in
Proportion
PERS 1
0.110831%
0.114008%
0.003177%
PERS 2/3
0.143122%
0.146079%
0.002957%
LEOFF 2
0.427847%
0.415772%
-0.012075%
Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis
for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules
of Employer and Nonemployer Allocations for all plans except LEOFF 1.
LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through
2000 and the retirement benefit payments in fiscal year 2016. Historical data was obtained from a 2011 study by the Office of
the State Actuary (OSA). In fiscal year 2016, the state of Washington contributed 87.12 percent of LEOFF 1 employer
contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 is fully
funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding
of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term
contribution effort based on historical data.
In fiscal year 2016, the state of Washington contributed 39.46 percent of LEOFF 2 employer contributions pursuant to RCW
41.26.725 and all other employers contributed the remaining 60.54 percent of employer contributions.
The collective net pension liability (asset) was measured as of June 30, 2016, and the actuarial valuation date on which the
total pension liability (asset) is based was as of June 30, 2015, with update procedures used to roll forward the total pension
liability to the measurement date.
Pension Expense
For the year ended December 31, 2016, the City of Federal Way recognized pension expense as follows:
Pension Expense
PERS 1
$183,976
PERS 2/3
$1,486,668
LEOFF 2
$791,204
TOTAL
$2,461,848
Citv ofFederal Wav / 63
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2016, the City of Federal Way reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
PERS 1
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$0
$0
Net difference between projected and actual investment
earnings on pension plan investments
$154,162
$0
Changes of assumptions
$0
$0
Changes in proportion and differences between
contributions and proportionate share of contributions
$0
$0
Contributions subsequent to the measurement date
$333,084
$0
TOTAL
$487,246
$0
PERS 2/3
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$391,647
$242,799
Net difference between projected and actual investment
earnings on pension plan investments
$900,035
$0
Changes of assumptions
$76,020
$0
Changes in proportion and differences between
contributions and proportionate share of contributions
$311,277
$0
Contributions subsequent to the measurement date
$435,035
$0
TOTAL
$2,114,013
$242,799
LEOFF 2
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual experience
$331,366
$0
Net difference between projected and actual investment
earnings on pension plan investments
$868,976
$0
Changes of assumptions
$9,118
$0
Changes in proportion and differences between
contributions and proportionate share of contributions
$81,415
$104,816
Contributions subsequent to the measurement date
$349,961
$0
TOTAL
$1,640,836
$104,816
Deferred outflows of resources related to pensions resulting from the City of Federal Way's contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other
amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Year ended
December 31:
PERS 1
2017
($37,958)
2018
($37,958)
2019
$141,581
2019
$88,496
TOTAL
$154,162
Year ended
December 31:
PERS 2/3
2017
$125,060
2018
$125,060
2019
$753,664
2019
$432,394
TOTAL
$1,436,179
Citv ofFederal Wav / 64
Year ended
December 31:
LEOFF 2
2017
($20,468)
2018
($20,468)
2019
$709,361
2020
$485,688
2021
$31,949
TOTAL
$1,186,061
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 2016 on average, there were a total of 315 individuals covered by this system. As of the end of the year, there were
323 active employees of the City and four were drawing retirement benefits. During the year 31 employees left the City's
employment and either had been reimbursed their contributions, reimbursement was pending, or they elected to have their
contributions remain in the plan if the balance was $1,000 or greater.
All regular employees of the City of Federal Way are required to participate in the system, with the City matching the
employee's required contribution. The employee pays 6.2% and this is matched by the composite of a cash match
(approximately 5.2%) and insurance payments (1%) for disability, survivor, accidental death and dismemberment, and lump
sum death benefit coverage. Contributions into the plan are tax deferred.
Employees are entitled to make voluntary contributions to the plan, assuming that highly compensated and non -highly
compensated employees are treated equally. Each payroll period, employees may make a voluntary contribution equal to a
minimum of 1 % of the participant's compensation, not to exceed 10% of the participant's compensation.
Covered payroll for 2016 was $28,118,293, and excluding PERS, LEOFF, FWRS, deferred comp, flex plan, and section 125
covered payroll was $24,228,238. Total City payroll was $28,856,970. Actual City contributions for the year were
$1,365,471. Actual employee contributions were $1,628,063. All contributions were invested in instruments arranged
through independent investment advisors selected by the Municipal Employers Benefit Trust (MEBT) committee comprised of
the entities of Bellevue, Kirkland, Redmond, Edmonds, Mill Creek, Woodinville, Federal Way, and North East King County
Regional Public Safety Communication Agency (NORCOM) but administered by Northwest Plan Services (NWPS).
Retirement System assets are not the property of the City and are not subject to the claims of the City's general creditors. The
Federal Way Retirement System assets are with Security Trust Company, N.A. who invests Plan assets. MEBT can be
contacted for additional information at (877)-690-5410.
In July 1995, the City implemented the hardship withdrawal and loan provision program that allow participants to have limited
access to their contributions while still employed by the City. Hardship withdrawals are available in the event of financial
necessity resulting from uninsured medical expenses, tuition expenses, purchasing one's primary residence, or to prevent
foreclosure on one's primary residence. Loans receivable as of December 31, 2016 were $1,486,676. After 5 years an
employee becomes 100% vested in their employer contributions. Also an employee becomes 100% vested when they reach
their normal retirement date (the earlier of age 65 or the earliest service retirement date under any other retirement benefit
program to which the City contributes on the employees behalf).
The consulting actuary firm of Northwest Plan Services (NWPS) has been contracted to provide record keeping,
administrative and consulting services related to the Plan Actuarial determinations are not required because accidental death
and dismemberment insurance, long-term disability, survivor income insurance and the lump sum death benefit are provided
by a group insurance policy with Standard Insurance Company; and benefits paid to participants upon retirement are limited
to: (a) a nonforfeitable, nontransferable annuity contract purchased by the plan's trustee, (b) retirement benefits payable from
the employee's account to which no contributions by the City or the participant can be added after retirement, or a single
lump -sum payment equal to the accumulated balance in the employee's account as of his retirement date.
Citv ofFederal Wav / 65
NOTE 10 — RISK MANAGEMENT
The City uses the Risk Management Internal Service Fund to account for its risk financing activities. The City maintains
insurance against most normal hazards. The City faces most of the risks faced by similar sized cities including general liability
for bodily injury, law enforcement — auto liability and property liability.
Through its Risk Management Fund, the City records insurance premium costs for general liability coverage and builds
reserves for future claims, self -insured retention, and a future general liability self-insurance program.
There were no settlements in excess of insurance for commercially insured activities for 1996 through 2016. The fund balance
for the Risk Fund as of 12/31/2016 is $1.09 million.
The following is a summary of coverage in force in 2016.
SCHEDULE OF INSURANCE IN FORCE
AS OF DECEMBER 31, 2016
Company Policy Period Details of Coverage Liability Limits
Argonaut
12/31/15-12/31/16
General liability (auto, general, police, e &
$250,000 self -insured retention (SIR) with
o, employment practices, & stop gap)
aggregate limits of $10,000,000.
National
12/31/15-12/31/16
Excess liability
$10,000,000 in excess of $10,000,000 with
Casualty
aggregate limits of $10,000,000.
Crime/fidelity (employee theft, forgery or
alternation, on premises, in transit, money
Deductible ranges from $5,000 to $25,000
Travelers
1/l/16-1/1/17
orders and counterfeit money, computer
with single loss limits ranging from$50,000
crime, fund transfer fraud and claims
to $1,000,000.
expense)
$25,000 deductible with single loss limits of
Philadelphia
1/l/16-1/l/17
Property coverage
$40,442,519 for buildings and $5,132,848 in
contents.
The City's industrial insurance is provided by the Association of Washington Cities and is administered by the Workers' Comp
Retro Program. Coverage is purchased by means of standard rates per working hour and is computed by the total number of
hours worked by employees multiplied by the basic premium rate assigned to the business risk classification. The following
are benefits provided by industrial insurance: medical services, damaged clothing, travel expenses, time -loss payments,
vocational rehabilitation, partial disability awards, pension awards and survivor benefits.
NOTE 11— LONG-TERM LIABILITIES
The various categories of long-term debt reflected on the City's financial statements are briefly described in the following
paragraphs. Ratings are issued on the bond at the time of issuance. The ratings issued on City bonds are shown on page 66.
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 2016 the City had no voter -approved bonds outstanding. All principal and interest payments on general
obligation debts are recorded as expenditures by the City's Debt Service Fund.
A) On March 4, 2013 the City issued $12,415,000 of general obligation refunding bonds with an average interest rate of
2.67 percent to provide resources to purchase U.S. Government and State and Local Government Series security that
were placed in an irrevocable trust for the purpose of generating resources to advance refund on $12,310,000 of
outstanding 2003 GO Federal Way Community Center debt on December 1, 2013. As a result the 2003 GO FWCC
bonds are considered to be defeased and the liability has been removed from the governmental activities column of
the statement of net position. This advance refunding was undertaken to reduce total debt service payments over the
next twenty one years by $2,322,943 and resulted in an economic gain of $1,740,458. (Economic gain is the net
present value of future savings between old and the new debt).
Citv offederal Wav / 66
B) On November 26, 2014 the City issued $8,209,906 of general obligation Bond anticipation note with KeyBank to
acquire the Target property with an interest only rate of 1.51 percent and principal due 12/01/2017. The funds were
used to purchase the old Target property for downtown development. The bond will be paid off with the sale of the
land or refinanced in three years. Currently the bond calls for interest only payments before the bond is paid off.
C) The City in conjunction with several other South King County cities (Auburn, Burien, Renton, SeaTac, Tukwila,)
agreed to build a facility to hold its inmates. The total bond in 2009 was $86.325 million and the City of Federal
Way's portion at that time was $15.522 million. In 2016 the facility was able to use its excess revenue from excess
space rented to non-member cities to pay the bond in 2016.
D) On June 28, 2016 the City entered into a Contract Loan Guarantee with Housing Urban Development for
development of the Federal Way Performing Arts and Events Center. This loan, referred to as Section 108 Loan is
authorized up to $3,030,000 with advances of $2,925,000 as of 12/31/2016 with a variable rate which is LIBOR plus
20 basis points. The Section 108 Loan contains a 20 year term with provisions to convert to a fixed rate loan at future
date.
SCORE and Valley Communications joint venture information can be found on pages 69 thru 72.
The following schedules detail the long-term debt activity and balances of the City for GO Bonds, SCORE and Section 108
HUD Loan, Public Works Trust Fund Loans, Compensated Absences, and Net Pension Liability. Typically we have used the
governmental funds on pages 29 and 30 to liquidate the net pension liability, with the General Fund being the primary fund.
OUTSTANDING GFNFRAL OBLIGATION DEBT AND LONGTERM LIABILITIES - BY TYPE
DECEMBER 31, 2016
Bond Rating
Issue
Maturity
Interest
Amount
Beginning
Amount
Amount
Fn(hng
Description
Originally
Outstanding
Outstanding
atLssuance
Date
Date
Rate
Issued
Debt
Issued
Redeemed
Debt
Governmental Activities:
General Obligation Bonds:
A) 2014 KeyBank Bond Anticipation Note
Nov 26, 14
Dec 01, 17
1.51
$ 8,209,960
$ 8,209,960
$
$ -
$ 8,209,960
B) 2013 Refund Ltd/Community Center' Aa3
Dec 01, 13
Dec 01, 33
2.67
12,415,000
11,350,000
470,000
10,880,000
Subtotal GO Bonds:
-
-
20,624,960
19,559,960
470,000
19,089,960
Other Miscellaneous Debt -Intergovernmental:
C) 2016 Section 108 HUD Loan
Aug 01, 16
Aug 01, 35
1.14
2,925,000
-
2,925,000
-
2,925,000
D) 2009 SCORFJSpecial Obligation Bond° Al/AA
Nov 04, 09
Jan 01, 39
3.00-6.62
15,522,300
14,096,700
-
386,100
13,710,600
Subtotal miscellaneous:
-
-
18,447,300
14,096,700
2,925,000
386,100
16,635,600
Subtotal GO Bonds plus Misc.
39,072,260
33,656,660
2,925,000
856,100
35,725,560
Compensated absences
-
1,914,554
2,209,468
2,091,214
2,032,808
Net Pension Liability (NPL) for Pers 1,2, & 3
-
9,580,886
2,312,583
11,893,469
Subtotal GO bonds, misc., comp. absences, & NPL
39,072,260
45,152,100
7,447,051
2,947,314
49,651,837
Business -Type Activities:
Public Works Trust Fund Loan (PWTFL):
PW TL- SeaTac Mall Drain Imp
May 31, 00
Jul 01, 19
1.00
412,500
64,080
16,020
48,060
PW TL- SeaTac Mall Drain Imp
Aug 14, 00
Jul 01, 19
1.00
2,062,500
320,401
80,100
240,301
SubtotaIPWTFL
-
-
2,475,000
384,481
96,120
288,361
Compensated absences
-
94,958
107,011
111,841
90,128
Net Pension Liability (NPL) for Pets 1,2, & 3
-
1,330,438
253,823
1,594,261
Subtotal PW TFL, comp. absences, & NPL:
2,475,000
1,809,877
360,834
207,961
1,962,750
Grand Total All Long -Term Debt:
$ 41,547,260
$ 46,961,977
$ 7,807,885
$ 3,155,275
$51,614,587
On November 26, 2014 the City issued $8,209,960 ofgeneral obligation bond anticipation note with KeyBank with an interest only rate of 1.51 percent and
principal due 1210112017. 2The ending 2016 refunding Community Center bond premium is $329, 551 with current year amortization of $38, 009. 3Contract
Loan Guarantee Assistance via Housing & Urban Development with variable rate; 3 month libor plus 20 basis points. When final advance is made during
2017 for maximum authorized $3, 030, 000, there is an option to convert to a fixed rate. 4 Currently the City has an inter -local agreement with Des Moines
where they contribute I % to the City of Federal Way SCORE Debt.
Citv ofFederal Wav / 67
S CHEDULE OF CHANGES IN LONGTERM LIABILITIES
PERIOD ENDED DECEMBER 31, 2016
Beginning
Ending
Outstanding
Additions Reductions
Outstanding
Debt
Debt
Governmental Activities:
General Obligation Bonds
$ 19,559,960
$ - $
(470,000)
$ 19,089,960
Other -intergovernmental debt
14,096,700
2,925,000
(386,100)
16,635,600
Compensated absences
1,914,554
2,209,468
(2,091,214)
2,032,808
Net Pension Liability (NPL) for Pers 1,2, & 3
9,580,886
2,312,583
-
11,893,469
Total Governmental Activities
45,152,100
7,447,051
(2,947,314)
49,651,837
Business -Type Activities:
Enterprise Funds
Public Works Trust Fund Loan
384,481
-
(96,120)
288,361
Compensated absences
94,958
107,011
(111,841)
90,128
Net Pension Liability (NPL) for Pers 1,2, & 3
1,330,438
253,823
-
1,584,261
Total Business -Type Activities
1,809,877
360,834
(207,961)
1,9623750
Total All Funds
$ 46,961,977
$ 7,807,885 $
(3,155,275)
$ 51,614,587
OUTSTANDING GEIsiFRAL OBLIGATION DEBT AND LONGTERM LIABILITIES - BY FUND
DECEMBER 31, 2016
Amount
Beginning
Ending
Description
Originally
Outstanding
Amount
Amount
Outstanding
Due within
Issued
Debt
Issued
Redeemed
Debt
one year
Governmental Long -Term Debt:
General Obligation Bonds:
A) 2014 KeyBank Bond Anticipation Note 1
$ 8,209,960
$ 8209,960
$
$ -
$ 8,209,960
$ 8209,960
B) 2013 Refund Ltd/Conmiunity Center 2
12,415,000
11,350,000
470,000
10,880,000
485,000
Subtotal GO Bonds:
20,624,960
19,559,960
470,000
19,089,960
8,694,960
Other Miscellaneous Debt-Intergovemmental:
C) 2016 Section 108 HUD Loan3
2,925,000
-
2,925,000
-
2,925,000
153,000
D) 2009 SCORE/Special Obligation Bond4
15,522,300
14,096,700
-
386,100
13,710,600
403,200
Subtotal miscellaneous:
18,447,300
14,096,700
2,925,000
386,100
16,635,600
556,200
Subtotal GO Bonds plus Misc.
39,072,260
33,656,660
2,925,000
856,100
35,725,560
9,251,160
Compensated absences
-
1,914,554
2,209,468
2,091,214
2,032,808
130,308
Net Pension Liability (NPL) for Pers 1,2, & 3
-
9,580,886
2,312,583
-
11,893,469
na
Subtotal GO bonds, misc., comp. absences, & NPL:
39,072,260
45,152,100
7,447,051
2,947,314
49,651,837
9,381,468
Business -Type Activities:
Enterprise Funds:
Public Works Trust Fund Loan
2,475,000
384,481
-
96,120
288,361
96,120
Subtotal Bus -Type Long -Term Debt
2,475,000
384,481
-
96,120
288,361
96,120
Compensated absences
-
94,958
107,011
111,841
90,128
6,850
Net Pension Liability (NPL) for Pers 1,2, & 3
-
1,330,438
253,823
-
1,584,261
na
Subtotal PWTFL, comp. absences, & NPL:
2,475,000
1,809,877
360,834
207,961
1,962,750
102,970
Grant Total All Long -Term Debt:
$ 41,547,260
$ 46,961,977
$ 7,807,885
$ 3,155,275
$ 51,614,587
$ 9,484,438
SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY
AS OF DECEMBER 31, 2016
Gowrnment Activities
Business -Type Activities
General Governmental Debt
Public Work Trust Fund
Grand Total
Principal
Interest
Principal
Interest
Principal
Interest
P&I
Year
2017
$ 9,251,160
$ 1,048,332
$ 96,120
$ 2,884
$ 9,347,280
$ 1,051,215
$ 10,398,495
2018
1,068,800
895,138
96,120
1,922
1,164,920
897,060
2,061,980
2019
1,097,300
865,055
96,120
961
1,193,420
866,016
2,059,435
2020
1,126,700
834,154
-
-
1,126,700
834,154
1,960,854
2021
1,169,200
794,428
-
1,169,200
794,428
1,963,628
2022
1,211,300
753,863
-
1,211,300
753,863
1,965,163
2023-2027
6,655,800
3,184,492
-
6,655,800
3,184,492
9,840,292
2028-2032
7,814,500
2,054,505
-
7,814,500
2,054,505
9,869,005
2033-2037
5,401,100
778,534
-
5,401,100
778,534
6,179,634
2038-2039
929,700
39,981
-
-
929,700
39,981
969,681
Total
$ 35,725,560
1 $ 11,248,481
1 $ 288,359
S 5,767
$ 36,013,919
$11,254,248
$ 47,268,167
Citv ofFederal Wav / 68
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 T/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'h percent of the valuation.
The debt service on unlimited tax debt is secured by excess property tax levies, whereas the debt service on limited tax debt is
secured by property taxes collected with the City's councilmanic levy. See page 128 for a detailed calculation of the valuation.
The City's legally remaining debt capacities as of December 31, 2016 are:
Computation of Limitation of Indebtedness 2016
General government (no vote required) $ 108,086,319
General government (3/5 majority vote required) 94,202,243
Parks and open space (3/5 majority vote required) 235,505,607
Utilities (3/5 majority vote required) 235,505,607
Total Capacity $ 673,299,776
Compensated Absences
The City's liability for accrued vacation and compensatory time balances is recorded in the schedule below. Accrued
compensated absences for proprietary fund employees are recorded as liabilities in those funds expected to incur the related
future expense. Typically the General Fund has been used to liquidate compensated absences for the General Government.
Gosernmental Activities:
Current portion
$ 130,308
Noncurrent portion
1,902,500
Business -Type Activities:
Current portion
6,850
Noncurrent portion
83,279
Total Compensated absences
$ 2,122,937
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, 2016 is $-0- for its tax-exempt general obligation bond issues subject to the
Tax Reform Act issued through that date. No arbitrage applies to any of City of Federal Way bonds.
NOTE 12 — INTERFUND TRANSACTIONS
Interfund transfers for the year ended December 31, 2016 were as follows:
Interfund Transfers In Out
Governmental Funds:
General Fund
Street Fund
Utility Tax Fund
Debt Service
Downtown Redevelopment
Transportation
Nonmajor Governmental Funds
Proprietary Funds:
Surface Water Management
Dumas Bay Centre
Internal Service Funds
$ 10,465,074 $ 3,685,564
1,810,595 -
198,386 10,383,688
1,840,544 -
127,348 -
4,788,000 -
1,813,943 5,455,568
- 965,000
331,875 -
114,055 1,000,000
Total: $21,489,820 $21,489,820
Citv ofFederal Wav / 69
The following describes the amounts transferred out during 2016:
General Fund:
• $1,695,025 to Street Fund to subsidize street maintenance and operations.
• $1,778,550 to Street Construction Project S 352nd Street: SR99 to SR161.
• $127,348 to Downtown Redevelopment Fund for Target property interest payment.
• $80,641 to Federal Way Community Center to subsidize maintenance and operations.
• $4,000 to Dumas Bay Center to subsidize maintenance and operations.
Utility Tax Fund:
• $7,684,465 from Utility Tax Fund to General Fund for operation support.
• $420,302 from Utility Tax Fund to Federal Way Community Center for maintenance and operations.
• $1,028,421 from Utility Tax Fund to Debt Service Fund for debt service payments.
• $1,013,000 from Utility Tax Fund to Arterial Street Overlay Fund for street overlay maintenance.
• $115,570 from Utility Tax Fund to Street Fund for maintenance and operations of City streets.
• $4,055 from Utility Tax Fund to Building & Furnishings Fund for maintenance and operations.
• $117,875 from Utility Tax Fund to Dumas Bay Center to subsidize maintenance and operations.
Nonmajor Funds:
• $198,386 from Arterial Street Overlay Fund to Utility Tax Fund to return Utility Tax.
• $1,780,609 from Traffic Safety Fund to General Fund for Police related services.
• $210,000 from Traffic Safety Fund to Street Construction Project for school zone enhancement.
• $812,123 from Real Estate Excise Tax (BEET) Fund to Debt Service Fund for debt payments.
• $150,000 from REET Fund to Parks CIP for major parks facilities repair.
• $150,000 from REET Fund to Parks CIP for playgrounds equipment.
• $1,613,000 from REET Fund to Street Construction Project SR99 HOV Lanes Phase V.
• $221,450 from REET Fund to Street Construction Project S 352°d Street SR99 to SR161.
• $210,000 from REET Fund to Dumas Bay Center Fund for reserve.
• $110,000 from REET Fund to Buildings and Furnishings Fund for reserve.
Surface Water Management Fund:
• $965,000 from Surface Water CIP Fund to Street Construction Project SR99 HOV Lanes Phase V.
Internal Service:
• $1,000,000 from Unemployment Insurance Fund to General Fund for operations.
Interfund loans for the year ended December 31, 2016 were as follows:
Interfund Loans Receivable Payable
General Fund $ 50,714 $ -
Special Revenue Funds:
Cotntnunity Development Block Grant - 50,714
Total Interfund Loans $ 50,714 $ 50,714
NOTE 13 — CONTRACTUAL OBLIGATIONS, CONTINGENCIES AND LITIGATION
As of December 31, 2016 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 VENTURES
Valley Communication Center
The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by
the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way
was formally admitted as an addition in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal
Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter was
automatically extended for a consecutive five year -period.
Citv ofFederal Wav / 70
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 2016 cost distributions for the five member cities are as follows:
Dispatchable Percent
City
Calls
of Total
Kent
114,769
26.81%
Renton
86,799
20.28%
Auburn
96,406
22.52%
Tukwila
37,375
8.73%
Federal Way
92,658
21.65%
Total 428,006 100.00%
Valley Com is governed by an Administration Board, composed of the Mayors or designated representatives from the five
participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Administration Board is authorized to establish
bylaws that govern procedures of the Board and Valley Com's general operations for the following functions: 1) Budget
review and recommendations to the legislative bodies of the member cities, and budget adoption after each legislative body
has approved the required financial participation for the ensuing year; 2) Approve appointment and/or discharge of the
Director; 3) Approve personnel policy and make final decisions on all major policy changes; and 4) Review and approves all
contracts.
In addition, an Operating Board was established and consists of two members of each participating City's Public Safety
Departments, including the heads of such departments or their designees. The Operating Board performs the following
functions: 1) Oversees the general operation of Valley Com, and advises and makes recommendations to the Administration
Board; 2) Make recommendations on Director selection; 3) Presents proposed policies and budgets to the Administration
Board; and 4) Reviews disbursements of funds by the Director.
The Director presents a proposed budget to the Operating Board on or before August 15 of each year. Said budget is then
presented to the Administrative Board by September 1 of each year. The Administration Board can make changes to the
proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each member city, in
accordance with the provisions of the interlocal agreement.
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.
Citv ofFederal Wav / 71
Balances in 2016
Kent
Renton
Auburn
Tukwila
Federal Way
Total
Equity @ January 1, 2016 $ 5,538,893
$ 3,944,879
$ 3,853,230
$ 2,139,261
$ 2,858,305 $
18,334,568
Current year increase 775,712
586,665
651,598
252,610
626,262
2,892,848
Equity @ December 31, 2016 $
6,314,605 $
4,531,544 $
4,504,828 $
2,391,871 $
3,484,567 $
21,227,416
Percent of equity
29.75%
21.35%
21.22%
11.27%
16.42%
100.00%
Prior year's percent of equity
30.21%
21.52%
21.02%
11.67%
15.59%
100.00%
A complete set of financial statements is available from:
Valley Communications Center, 27519 108th Avenue SE, Kent, WA 98030.
South Correction Entity
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 its 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. The SCORE PDA issued $86 million in
special obligation bonds in 2009 (the "Bonds") to construct, develop, acquire and equip the SCORE Facility. Pursuant to the
Formation Interlocal Agreement and the ordinances of each city, each Owner City (which includes the Cities of Auburn,
Burien Federal Way, Renton, SeaTac, and Tukwila) is obligated to budget for and pay its share, and only its share, of the
principal of and interest on the Bonds as the same become due and payable. Each Owner City's obligation to pay its portion is
an irrevocable, unconditional full faith and credit obligation of such Owner City, payable from property taxes levied within the
constitutional and statutory authority provided without a vote of the electors of the Owner City on all of the taxable property
within the Owner City and other sources of revenues available therefor. The following is a summary of the debt service
requirements for the Bonds:
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%
2017
$ 2,145,000
$ 4,820,241
$ (1,510,874) $
5,454,367
$ 1,690,854
$ 218,175
$ 981,786
$ 1,963,572
$ 163,631
$ 436,349
2018
2,240,000
4,715,979
(1,510,063)
5,445,916
1,688,234
217,837
980,265
1,960,530
163,377
435,673
2019
2,310,000
4,602,229
(1,473,568)
5,438,661
1,685,985
217,546
978,959
1,957,918
163,160
435,093
2020
2,385,000
4,484,854
(1,435,933)
5,433,921
1,684,516
217,357
978,106
1,956,212
163,018
434,714
2021
2,465,000
4,363,604
(1,397,075)
5,431,529
1,683,774
217,261
977,675
1,955,350
162,946
434,522
2022-2026
13,945,000
19,586,127
(6,994,733)
26,536,394
8,226,282
1,061,456
4,776,551
9,553,102
796,092
2,122,912
2027-2031
17,010,000
14,723,464
(5,346,730)
26,386,734
8,179,888
1,055,469
4,749,612
9,499,224
791,602
2,110,939
2032-2036
20,955,000
8,498,417
(3,217,063)
26,236,354
8,133,270
1,049,454
4,722,544
9,445,087
787,091
2,098,908
2037-2039
14,860,000
1,502,494
(697,922)
15,664,572
4,856,017
626,583
2,819,623
5,639,246
469,937
1,253,166
Total
$ 78,315,000
$67,297,409
$(23,583,961) $ 122,028,448
$ 37,828,820
$ 4,881,138
$ 21,965,121
$43,930,241
$3,660,854
$ 9,762,276
*Of the $21,965,121 allocation to Federal Way, $14,096,700 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, 2016 related to SCORE:
Citv ofFederal Wav / 72
South Correction Entity (SCORE)
2016 Owner Cities Equity Allocation
Member
Percent of
2015
2016
city
i
i Balance
Apportionment Equity Balance
Auburn
31.00%
$ 3,331,777
$ (216,443) $ 3,115,334
Burien
3.10%
376,841
(52,239) 324,602
Des Moines
1.80%
197,267
(30,684) 166,583
Federal Way
23.30%
2,620,575
(328,310) 2,292,265
Renton
29.20%
3,222,670
(281,167) 2,941,503
SeaTac
4.50%
498,467
(64,438) 434,029
Tukwila
7.10%
788,541
(85,218) 703,323
Total
1 100.00%1
$ 11,036,138
1 $ (1,058,499) $ 9,977,639
Completed financial statements for SCORE and SCORE PDA can be obtained at SCORE, Attn: Finance Manager, 20817 17a'
Avenue South, Des Moines, WA 98198.
Joint Venture Reconciliation to Government Wide Financial Statements
Balance Balance
1/1/2016 Additions Reductions 12/31/2016
Valley Communications Public Development Authority $ - $ - $ - $ -
SCORE Public Development Authority 14,096,700 - (386,100) $ 13,710,600
Total Due to Other Governmental Units 14,096,700 - (386,100) 13,710,600
Valley Communications Center 2,858,305 626,262 - 3,484,567
South Correctional Entity (SCORE) 2,620,575 - (328,310) 2,292,265
Total Joint Venture Capital Assets 5,478,880 626,262 (328,310) 5,776,832
Total Investment in Joint Ventures $ 19,575,580 $ 626,262 $ (714,410) $ 19,487,432
NOTE 15 — PRIOR PERIOD ADJUSTMENTS
Business -type capital asset activity prior period adjustment of $266K is for Construction in progress that was incorrectly
classified and should have been a repairs and maintenance expense.
Beg. Bal
Prior Period
Adj. Beg.
Ending Bal.
Business -Type Activities
I/1/2016
Adjustment
Balance
Additions
Deletions 12/31/2016
Capital assets, not being depreciated:
Land
$11,013,528
$ -
$11,013,528
$218,965
$ - $11,232,493
Construction in progress
3,111,186
(266,237)
2,844,949
615,121
(3,438,348) 21,722
Total capital assets, not being depreciated:
14,124,714
(266,237)
13,858,477
834,086
(3,438,348) 11,254,215
Capital assets, being depreciated
Buildings
Improvements other than buildings
Infrastructure
Machinery and equipment
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Infrastructure
Machinery and equipment
Total accumulated depreciation:
Total assets being depreciated, net
3,600,864
3,600,864
904,484
4,505,348
2,831,681
2,831,681
1,081,692
3,913,373
56,847,003
56,847,003
1,548,600
58,395,603
122,200
122,200
52,946
- 175,146
63,401,747
- 63,401,747
3,587,722
- 66,989,469
(3,281,550)
(3,281,550)
(150,742)
- (3,432,292)
(213,247)
(213,247)
(28,317)
- (241,564)
(104,165)
(104,165)
(4,340)
- (108,505)
(14,544,843)
(14,544,843)
(568,470)
- (15,113,313)
(18,143,805)
(18,143,805)
(751,869)
- (18,895,674)
45,257,942
- 45,257,942
2,835,853
- 48,093,795
Business Type activities capital assets, net $ 59,382,656 $ (266,237) $ 59,116,419 $ 3,669,939 $ (3,438,348) $59,348,010
Citv ofFederal Wav / 73
NOTE 16 — LEASES
Operating Leases
Starting February 1, 2014, the City of Federal Way started leasing the office buildings for the downtown Police substation.
Total Cost for the leases was $41,900 for the year ended December 31, 2016. The future minimum lease payment for the
downtown Police substation lease is as follows:
Year En(Ing December 31, 2016
Amount
2017
$ 3,500
Total:
$ 3,500
NOTE 17 — SELF-INSURANCE
The City's unemployment insurance, where it has elected to become fully self -insured. Related premiums received by the
Unemployment Insurance Fund is used to reimburse the State Employment Security Department for unemployment benefits
paid to eligible individuals, and to establish reserves for the payment of estimated future unemployment claims liability. The
City is self -insured for unemployment compensation. The weekly payments to an employee range from $162 - $681
depending upon the wages earned. At December 315t, 2016 the City had $1,377,809 in reserve.
Unemployment compensation benefits
2015
2016
Unemployment reserve, Jan. 1st
$ 1,912,291
$ 2,131,298
Unemployment compensation benefits
257,366
271,127
Unemployment compensation interest
2,844
5,448
Claim payments during the year
(41,202)
(30,064)
Operating Transfer to General Fund
-
(1,000,000)
Unemployment reserve, Dec. 3 1 s t
$ 2,131,298
$ 1,377,809
The City's also elected to self -insure for medical. Related premiums are received by the Health Insurance Fund and are used
to reimburse weekly claims to the Group Health Corporation for medical benefits paid the eligible individuals, and establish
reserves for the payment of estimated future medical benefits claims liability. At December 3I't, 2016 the City had $2,020,466
in reserve.
Health Insurance benefits
2015
2016
Health Insurance reserve, Jan. 1st
$ 1,031,752
$ 1,741,487
Health Insurance benefits
4,034,322
4,069,020
Health Insurance Employee Contributions
215,210
217,341
Health Insurance COBRA Contributions
5,757
5,757
Health Insurance interest
2,022
7,698
Health Insurance Recovery -Stop Loss
227,404
1,072,162
Prescription Claim payments during the year
(572,387)
(549,408)
Medical Claim payments during the year
(2,459,508)
(3,775,159)
Insurance -Stop Loss
(366,564)
(384,370)
Other services and charges
(376,522)
(384,061)
Health Insurance reserve, Dec. 31st
$ 1,741,487
$ 2,020,466
NOTE 18 ACCOUNTING CHANGES AND REPORTING CHANGES
The City has adopted reporting requirements of GASB Statement 79, Certain External Investment Pools and Pool
Participants for the year 2016. See note 5 for implementation of GASB Statement 79.
NOTE 19 — SUBSEQUENT EVENT
There were a couple of major real estate transactions that happened after the end of the year. The Commons (Commons Mall)
was sold in March of 2017 for $45.91 million, and Pavillion apartment complex was sold for $93.1 million in March.
ON ofFederal Wav / 74
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
ON ofFederal Wav / 75
REQUIRED SUPPLEMENTARY
INFORMATION
Citv of Federal Wav / 76
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability
PERS 1
As of June 30, 2016
Last 10 Fiscal Years*
2015 2016
Employer's proportion of the net pension liability
(asset) %
0.110831% 0.114008%
Employer's proportionate share of the net pension
liability $
5,797,492 6,122,767
TOTAL $
5,797,492 6,122,767
Employer's covered employee payroll $
12,744,440 13,650,352
Employer's proportionate share of the net pension
liability as a percentage of covered employee
payroll %
45.49% 44.85%
Plan fiduciary net position as a percentage of the
total pension liability %
59.10% 57.03%
Notes to Schedule:
* Employer's covered employee payroll increased by $905K and net pension liability
increased by $325K
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability
PERS 2 - 3
As of June 30, 2016
Last 10 Fiscal Years*
2015
2016
Employer's proportion of the net pension liability
(asset) %
0.143122%
0.146079%
Employer's proportionate share of the net pension
liability $
5,113,831
7,354,962
TOTAL $
5,113,831
7,354,962
Employer's covered employee payroll $
12,744,440
13,650,352
Employer's proportionate share of the net pension
liability as a percentage of covered employee
payroll %
40.13%
53.88%
Plan fiduciary net position as a percentage of the
total pension liability %
89.20%
85.82%
Notes to Schedule:
* Employer's covered employee payroll increased by $905K and net pension liability
increased by $2.2M
Citv ofFederal Wav / 77
City of Federal Way
Schedule of Proportionate Share of the Net Pension Liability (Asset)
LEOFF 2
As of June 30, 2016
Last 10 Fiscal Years*
2015 2016
Employer's proportion of the net pension liability (asset) %
0.427847% 0.415772%
Employer's proportionate share of the net pension
liability (asset) $
(4,397,411) (2,418,255)
LEOFF 2 - State's proportionate share of the net pension
liability (asset) associated with the employer $
(2,907,569) (1,576,526)
TOTAL $
(7,304,980) (3,994,781)
Employer's covered employee payroll $
12,477,707 12,625,740
Employer's proportionate share of the net pension
liability as a percentage of covered employee payroll %
-35.24%-19.15%
Plan fiduciary net position as a percentage of the total
pension liability %
111.67% 106.04%
Notes to Schedule:
* Employer's covered employee payroll increased by $148K and net pension asset
decreased by $1.3M
Citv of Federal Wav / 78
City of Federal Way
Schedule of Employer Contributions
PERS 1
As of December 31, 2016
Last 10 Fiscal Years*
2015
2016
Statutorily or contractually required contributions $ 584,359
663,133
Contributions in relation to the statutorily or
contractually required contributions $ (584,359)
(663,133)
Contribution deficiency (excess) $ -
-
Covered Employer Payroll $ 13,309,318
13,887,684
Contributions as a percentage of covered employee
payroll % 4.39%
4.77%
Notes to Schedule:
* Employer's covered employee payroll increased by $578K
City of Federal Way
Schedule of Employer Contributions
PERS 2-3
As of December 31, 2016
Last 10 Fiscal Years*
2015
2016
Statutorily or contractually required contributions $ 750,485
866,073
Contributions in relation to the statutorily or
contractually required contributions $ (750,485)
(866,073)
Contribution deficiency (excess) $ -
-
Covered Employer Payroll $ 13,309,318
13,887,684
Contributions as a percentage of covered employee
payroll % 5.64%
6.24%
Notes to Schedule:
* Employer's covered employee payroll increased by $578K
City of Federal Way
Schedule of Employer Contributions
LEOFF 2
As of December 31, 2016
Last 10 Fiscal Years*
2015
2016
Statutorily or contractually required contributions $ 625,331
669,609
Contributions in relation to the statutorily or
contractually required contributions $ (625,331)
(669,609)
Contribution deficiency (excess) $ -
-
Covered Employer Payroll $ 12,382,722
13,274,725
Contributions as a percentage of covered employee
payroll % 5.05%
5.04%
Notes to Schedule:
* Employer's covered employee payroll increased by $892K
Citv ofFederal Wav / 79
Combining Statement — Nonmajor Governmental Funds' Description
For the Year Ended December 31, 2016
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 2013, King County voters approved a new $0.1877, six -year, inflation adjusted property
tax lid lift to expand park and recreation opportunities. Seven percent of the County levy proceeds will be distributed to
cities for acquisition and development of open space and natural lands and city trail projects that support connections to the
regional trail system.
Capital Proiects Funds
The Capital Project Funds account for the acquisition or construction of major capital facilities with the exception of those
facilities financed by proprietary and trust funds. The major sources of revenue for this fund are general obligation bond
proceeds, grants from other agencies, local taxes and contributions from other funds.
The Real Estate Excise Tax Fund was established to account for the City's real estate excise tax and the transfers to pay for
debt and capital projects.
The City Facilities CIP Fund accounts for receipts and disbursements related to acquisition, design, construction and any
other related municipal facility and community/senior capital project expenditures.
The Parks CIP Fund was established to account for receipts and disbursements related to acquisition, design, construction
and any other related parks capital project expenditures.
The Capital Project Reserve Fund accounts for receipts and disbursements related to acquisition, design, construction and
any other related municipal facility and community/senior capital project expenditures.
Citv of Federal Wav / 80
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2016
Special Capital
ASSETS
Equity in pooled cash & investments
Receivables (net):
Taxes
Accounts and contracts
Restricted Cash
Due from other governments
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
Fund Balance:
Restricted
Committed
TOTAL FUND BALANCES
Revenue
Projects
Total
$ 6,688,644
$ 8,198,542
$ 14,887,186
-
252,801
252,801
28,357
-
28,357
75,048
-
75,048
312,832
-
312,832
7,104,881
8,451,343
15,556,224
256,619
37,107 293,726
165,180
- 165,180
75,048
56,652 131,700
27,445
- 27,445
50,714
- 50,714
142,463
- 142,463
717,469
93,759 811,228
1,861,510
7,598,032
9,459,542
4,525,902
759,552
5,285,454
6,387,412
8,357,584
14,744,996
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES AND FUND
BALANCES $ 7,104,881 $ 8,451,343 $ 15,556,224
Citv ofFederal Wav / 81
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2016
ASSETS
Equity in pooled cash & investments
Receivables (net):
Taxes
Accounts and contracts
Restricted Cash
Due from other governments
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
Arterial Solid Waste
Street Recycling
$ 188,335 $ 180,295 $
Special
Contracts/ Hotel/Motel
Studies Lodging Tax
531,470 $ 720,390
21,000 - - -
75,048 - - -
40,035 12,686 - 17,255
324,418 192,981 531,470 737,645
- 7,212 - 270
3,400 9,460 6,042 -
75,048 - - -
78,448 16,672 6,042 270
Fund Balance:
Restricted - - 525,428 737,375
Committed 245,970 176,309 - -
TOTAL FUND BALANCES 245,970 176,309 525,428 737,375
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 324,418 $ 192,981 $ 531,470 $ 737,645
Citv of Federal Wav / 82
ASSETS
Equity in pooled cash & investments
Receivables (net):
Taxes
Accounts and contracts
Restricted Cash
Due from other governments
TOTAL ASSETS
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2016
Federal way Community Paths and
Community Traffic Development Trails
Center Safety Block Grant Reserve Total
$ 1,803,583 $ 2,696,609 $ - $ 567,962 $ 6,688,644
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Accounts/payroll payable
Retainage payable
Deposits payable
Interfund loans payable
Unearned revenue
TOTAL LIABILITIES
7,357 - - - 28,357
- - - - 75,048
- - 242,096 760 312,832
1,810,940 2,696,609 242,096 568,722 7,104,881
48,294 84,188
116,655
- 256,619
76,238 61,142
8,898
- 165,180
- -
-
- 75,048
27,445 -
-
- 27,445
- -
50,714
- 50,714
142,463 -
-
- 142,463
294,440 145,330
176,267
- 717,469
Fund Balance:
Restricted - - 29,985 568,722 1,861,510
Committed 1,516,500 2,551,279 35,844 - 4,525,902
TOTAL FUND BALANCES 1,516,500 2,551,279 65,829 568,722 6,387,412
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 1,810,940 $ 2,696,609 $ 242,096 $ 568,722 $ 7,104,881
Citv ofFederal Wav / 83
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2016
Real Estate
Excise Tax City
Capital Project
Reserve Total
ASSETS
Equity in pooled cash & investments $ 5,456,884 $ 29,593 $ 2,229,348 $ 482,717 $ 8,198,542
Receivables (net):
Taxes 252,801 - - - 252,801
TOTAL ASSETS 5,709,685 29,593 2,229,348 482,717 8,451,343
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Vouchers payable
Retainage payable
TOTAL LIABILITIES
- - 37,107
- 37,107
- 56,652
- 56,652
- 93,759
- 93,759
Fund Balance:
Restricted 5,709,685 29,593 1,858,754 - 7,598,032
Committed - - 276,835 482,717 759,552
TOTAL FUND BALANCES 5,709,685 29,593 2,135,589 482,717 8,357,584
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 5,709,685 $ 29,593 $ 2,229,348 $ 482,717 $ 8,451,343
Citv of Federal Wav / 84
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For Year Ended December 31, 2016
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
Special
Capital
Revenue
Projects
Total
$ 456,004
$ 5,265,138
$ 5,721,142
1,163,847
-
1,163,847
1,969,780
28,557
1,998,337
3,192,978
-
3,192,978
24,846
28,328
53,174
307,139
24,118
331,257
7,114,594
5,346,141
12,460,735
-
23,360
23,360
1,758,914
-
1,758,914
1,901,529
-
1,901,529
452,720
-
452,720
49,934
550
50,484
492,114
-
492,114
2,304,396
190,913
2,495,309
5,345
-
5,345
93,462
1,352,583
1,446,045
7,058,414
1,567,406
8,625,820
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 56,180 3,778,735 3,834,915
OTHER FINANCING SOURCES (USES)
Transfers in
1,513,943
300,000
1,813,943
Transfers out
(2,188,995)
(3,266,573)
(5,455,568)
TOTAL OTHER FINANCING
SOURCES (USES)
(675,052)
(2,966,573)
(3,641,625)
NET CHANGE IN FUND BALANCES
(618,872)
812,162
193,290
FUND BALANCES - BEGINNING
7,006,284
7,545,422
14,551,706
FUND BALANCES - ENDING
$ 6,387,412
$ 8,357,584
$ 14,744,996
Citv ofFederal Wav / 85
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2016
Special
Arterial
Solid Waste
Contracts/
Hotel/Motel
Street
Recycling
Studies
Lodging Tax
REVENUES
Taxes $
-
$ -
$ -
$ 283,220
Intergovernmental
516,837
114,357
-
-
Service charges and fees
70,000
304,293
79,440
-
Fines and forfeitures
-
-
-
-
Interest
676
672
1,928
2,324
Other
-
850
-
-
TOTAL REVENUES
587,513
420,172
81,368
285,544
EXPENDITURES
Current:
General government
-
-
-
-
Security of persons and property
-
-
-
Transportation
1,454,544
-
-
Physical environment
-
452,720
-
-
Economic environment
-
-
-
49,934
Health
-
-
-
-
Culture and recreation
-
-
-
-
Debt service:
Interest/fiscal charges/admin fees
-
-
-
-
Capital outlay
-
-
14,295
-
TOTAL EXPENDITURES
1,454,544
452,720
14,295
49,934
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(867,031)
(32,548)
67,073
235,610
OTHER FINANCING SOURCES (USES)
Transfers in
1,013,000
-
-
-
Transfers out (198,386)
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
814,614
-
-
-
NET CHANGE IN FUND BALANCES
(52,417)
(32,548)
67,073
235,610
FUND BALANCES - BEGINNING
298,387
208,857
458,355
501,765
FUND BALANCES - ENDING $
245,970
$ 176,309
$ 525,428
$ 737,375
Citv of Federal Wav / 86
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For Year Ended December 31, 2016
REVENUES
Taxes
Intergovernmental
Service charges and fees
Fines and forfeitures
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
General government
Security of persons and property
Transportation
Physical environment
Economic environment
Health
Culture and recreation
Debt service:
Interest/fiscal charges/admin fees
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Federal way Community Paths and
Community Traffic Development Trails
Center Safety Block Grant Reserve Total
$ - $ - $ - $ 172,784 $ 456,004
522,842 9,811 1,163,847
1,516,047 - - - 1,969,780
- 3,192,978 - - 3,192,978
6,527 10,949 4 1,766 24,846
306,289 - - - 307,139
1,828,863 3,203,927 522,846 184,361 7,114,594
- 1,758,914 - - 1,758,914
446,985 - - 1,901,529
- - - - 452,720
- - 49,934
- - 492,114 - 492,114
2,304,396 - - - 2,304,396
- - 5,345 - 5,345
8,911 70,256 - - 93,462
2,313,307 2,276,155 497,459 - 7,058,414
OVER (UNDER) EXPENDITURES (484,444) 927,772 25,387 184,361 56,180
OTHER FINANCING SOURCES (USES)
Transfers in 500,943 - - - 1,513,943
Transfers out - (1,990,609) - - (2,188,995)
TOTAL OTHER FINANCING
SOURCES (USES) 500,943 (1,990,609) - - (675,052)
NET CHANGE IN FUND BALANCES
16,499
(1,062,837)
25,387
184,361
(618,872)
FUND BALANCES - BEGINNING
1,500,001
3,614,116
40,442
384,361
7,006,284
FUND BALANCES - ENDING
$ 1,516,500
$ 2,551,279 $
65,829 $
568,722
$ 6,387,412
Citv ofFederal Wav / 87
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For Year Ended December 31, 2016
Real Estate
Excise Tax
City
Capital Project
Fund
Facilities
Parks
Reserve
Total
REVENUES
Taxes $
5,265,138
$ -
$ -
$ -
$ 5,265,138
Service charges and fees
-
-
28,557
-
28,557
Interest
16,050
205
10,196
1,877
28,328
Other
-
66
24,052
-
24,118
TOTAL REVENUES
5,281,188
271
62,805
1,877
5,346,141
EXPENDITURES
Current:
General government
-
23,360
-
-
23,360
Economic environment
-
550
-
-
550
Culture and recreation
-
-
190,913
-
190,913
Capital outlay
-
-
1,352,583
-
1,352,583
TOTAL EXPENDITURES
-
23,910
1,543,496
-
1,567,406
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
5,281,188
(23,639)
(1,480,692)
1,877
3,778,735
OTHER FINANCING SOURCES (USES)
Transfers in
-
-
300,000
-
300,000
Transfers out (3,266,573)
-
-
(3,266,573)
TOTAL OTHER FINANCING
SOURCES (USES)
(3,266,573)
300,000
-
(2,966,573)
NET CHANGE IN FUND BALANCES
2,014,615
(23,639)
(1,180,692)
1,877
812,162
FUND BALANCES - BEGINNING
3,695,070
53,232
3,316,280
480,840
7,545,422
FUND BALANCES - ENDING $
5,709,685
$ 29,593
$ 2,135,589
$ 482,717
$ 8,357,584
Citv of Federal Wav / 88
ARTERIAL STREET
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Intergovernmental
$ 500,000 $ 500,000
$ 516,837
$ 16,837
Service charges and fees
- -
70,000
70,000
Interest
2,500 2,500
676
(1,824)
TOTAL REVENUES
502,500 502,501
587,513
85,012
EXPENDITURES
Current:
Transportation 1,515,500 1,515,500 1,454,544 60,956
TOTAL EXPENDITURES 1,515,500 1,515,500 1,454,544 60,956
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,013,000) (1,012,999) (867,031) 145,968
OTHER FINANCING SOURCES (USES)
Transfers in 1,013,000 1,013,000 1,013,000 -
Transfers out - (198,386) (198,386) -
TOTAL OTHER FINANCING
SOURCES (USES) 1,013,000 814,614 814,614 -
NET CHANGE IN FUND BALANCES - (198,385) (52,417) 145,968
FUND BALANCES - BEGINNING 100,000 298,386 298,387 1
FUND BALANCES - ENDING S 100,000 S 100,001 S 245,970 S 145,969
Citv ofFederal Wav / 89
SOLID WASTE & RECYCLING
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
REVENUES
Intergovernmental
Service charges and fees
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current:
Physical environment
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 172,200 $ 126,600 $ 114,357 $ (12,243)
304,517 304,517 304,293 (224)
- - 672 672
- - 850 850
476,717 431,117 420,172 (10,945)
489,980 464,622 452,720 11,902
489,980 464,622 452,720 11,902
(13,263) (33,505) (32,548) 957
(13,263) (33,505) (32,548) 957
188,499 208,857 208,857 -
$ 175,236 $ 175,352 $ 176,309 $ 957
Citv of Federal Wav / 90
SPECIAL CONTRACTS/STUDIES
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
REVENUES
Service charges and fees $ - $ - $ 79,440 $ 79,440
Interest - - 1,928 1,928
TOTAL REVENUES - - 81,368 81,368
EXPENDITURES
Current:
Capital outlay - 50,000 14,295 35,705
TOTAL EXPENDITURES - 50,000 14,295 35,705
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
- (50,000)
67,073
117,073
NET CHANGE IN FUND BALANCES
- (50,000)
67,073
117,073
FUND BALANCES - BEGINNING
- 458,356
458,355
(1)
FUND BALANCES - ENDING $
- $ 408,356 $
525,428
$ 117,072
Citv ofFederal Wav / 91
HOTEL/MOTEL LODGING TAX
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
Variance with
Budgeted Amounts
Final Budget -
Positive
Original Final
Actual Amounts
(Negative)
REVENUES
Taxes
$ 200,000 $ 200,000
$ 283,220
$ 83,220
Interest
300 300
2,324
2,024
TOTAL REVENUES
200,300 200,300
285,544
85,244
EXPENDITURES
Current:
Economic environment 200,300 200,300 49,934 150,366
TOTAL EXPENDITURES 200,300 200,300 49,934 150,366
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - - 235,610 235,610
NET CHANGE IN FUND BALANCES - - 235,610 235,610
FUND BALANCES - BEGINNING 245,300 501,765 501,765 -
FUND BALANCES - ENDING $ 245,300 $ 501,765 $ 737,375 $ 235,610
Citv of Federal Wav / 92
FEDERAL WAY COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
REVENUES
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)
$ 1,518,500 $ 1,531,500 $ 1,516,047 $ (15,453)
- - 6,527 6,527
275,000 300,000 306,289 6,289
1,793,500 1,831,501 1,828,863 (2,638)
2,199,112 2,334,730 2,304,396 30,334
- 8,911 8,911 -
2,199,112 2,343,641 2,313,307 30,334
OVER (UNDER) EXPENDITURES (405,612) (512,140) (484,444) 27,696
OTHER FINANCING SOURCES (USES)
Transfers in 405,000 528,640 500,943 (27,697)
TOTAL OTHER FINANCING
SOURCES (USES) 405,000 528,640 500,943 (27,697)
NET CHANGE IN FUND BALANCES
(612)
16,500
16,499
(1)
FUND BALANCES - BEGINNING
1,546,515
1,500,000
1,500,001
1
FUND BALANCES - ENDING
$ 1,545,903
$ 1,516,500
$ 1,516,500 $
0
Ci
Federal Wav / 93
TRAFFIC SAFETY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
REVENUES
Fines and forfeitures
Interest
TOTAL REVENUES
EXPENDITURES
Current:
Security of persons and property
Transportation
Capital outlay
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 2,169,882 $ 3,275,117 $ 3,192,978 $ (82,139)
- - 10,949 10,949
2,169,882 3,275,117 3,203,927 (71,190)
1,688,168 1,788,284
1,758,914 29,370
481,713 481,713
446,985 34,728
- 70,256
70,256 -
2,169,881 2,340,253
2,276,155 64,098
OVER (UNDER) EXPENDITURES 0 934,863 927,772 (7,091)
OTHER FINANCING SOURCES (USES)
Transfers out - (1,990,609) (1,990,609) -
TOTAL OTHER FINANCING
SOURCES (USES) - (1,990,609) (1,990,609) -
NET CHANGE IN FUND BALANCES 0 (1,055,746) (1,062,837) (7,091)
FUND BALANCES - BEGINNING 2,492,758 3,614,117 3,614,116 (1)
FUND BALANCES - ENDING $ 2,492,758 $ 2,558,371 $ 2,551,279 $ (7,092)
Citv of Federal Wav / 94
COMMUNITY DEVELOPMENT BLOCK GRANT
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
REVENUES
Intergovernmental
Interest
TOTAL REVENUES
EXPENDITURES
Current:
Health
Interest/fiscal charges/admin fees
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ 1,237,103 $ 1,237,103 $ 522,842 $ (714,261)
- - 4 4
1,237,103 1,237,103 522,846 (714,257)
1,237,103 1,231,828 492,114 739,714
- 5,275 5,345 (70)
1,237,103 1,237,103 497,459 739,644
25,387 25,387
- - 25,387 25,387
40,715 40,444 40,442 (2)
$ 40,715 $ 40,444 $ 65,829 $ 25,385
Citv ofFederal Wav / 95
PATH & TRAILS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
Variance with
Budgeted Amounts
Final Budget -
Positive
Original
Final
Actual Amounts
(Negative)
REVENUES
Taxes $
160,000
$ 160,000
$ 172,784
$ 12,784
Intergovernmental
9,000
9,000
9,811
811
Interest
-
-
1,766
1,766
TOTAL REVENUES
169,000
169,000
184,361
15,361
EXPENDITURES
Current:
TOTAL EXPENDITURES
-
-
-
-
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
169,000
169,000
184,361
15,361
OTHER FINANCING SOURCES (USES)
Transfers out
-
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
-
-
-
-
NET CHANGE IN FUND BALANCES
169,000
169,000
184,361
15,361
FUND BALANCES - BEGINNING
178,439
384,356
384,361
5
FUND BALANCES - ENDING $
347,439
$ 553,356
$ 568,722
$ 15,366
Citv ofFederal Wav /96
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Citv ofFederal Wav / 97
Budget and Actual — Debt Service Fund Description
For the Year Ended December 31, 2016
The Debt Service Fund accounts for the accumulation of resources for the payment of general obligation and special
assessment bond principal, interest and related costs. Revenues for this fund consist of transfers from Real Estate Excise Tax
Fund, transfers from the Utility Tax Fund, and/or other revenues designated by the City Council.
Citv of Federal Wav / 98
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2016
REVENUES
Interest
TOTAL REVENUES
EXPENDITURES
Debt service:
Principal
Interest/fiscal charges/admin fees
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
$ - $ 3,000 $ 8,814 $ 5,814
- 3,000 8,814 5,814
1,251,538
345,123
470,000
(124,877)
470,000
470,000
342,423
127,577
1,721,538
815,123
812,423
2,700
(1,721,538) (812,122) (803,609) 8,513
1,721,538 1,840,544 1,840,544 -
1,721,538 1,840,544 1,840,544 -
- 1,028,422 1,036,935 8,513
838,683 1,471,578 1,471,579 1
$ 838,683 $ 2,500,000 $ 2,508,514 $ 8,514
Citv ofFederal Wav / 99
Combining Statement — Internal Service Fund's Description
For the Year Ended December 31, 2016
Internal Service Funds
Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to
other departments or agencies of a government, or to other governments, on a cost -reimbursement basis.
The Risk Management Fund accounts for the City's risk financing activities established to minimize adverse
effects of losses associated with property and casualty, and worker's compensation claims. Both risk control (to
minimize the losses that strike an organization) and risk financing (to obtain finances to provide for or restore the
economic damages of those losses) are involved. The City is also currently recovering costs and building reserves
for general liability including property, casualty, errors and omissions and fidelity coverage.
The Information Systems Fund was established to account for all costs associated with data processing, telecommunications
and the Geographical Information System (GIS). This fund will own and depreciate all non-proprietary fund assets related to
these functions, and will charge equipment/software users for both maintenance/operating costs and equipment replacement
charges based on depreciation schedules.
The Support Services Fund will account for duplication, graphics and other general support services provided to departments
and funds throughout the City.
The Fleet and Equipment Fund accounts for the cost of maintaining City vehicles and other motorized equipment. Rates
charged to user departments are based on the full cost of maintaining equipment items, including the recovery of related
depreciation expense.
The Buildings and Furnishings Fund accounts for all costs associated with the operation and maintenance of specified City
buildings. City building facilities and furnishings will be owned by this Fund, and both maintenance/operating costs and
depreciation recovery will be charged City departments and funds.
The Health Insurance Fund accounts for all self -insuring for medical insurance. The premiums paid by the City's
medical benefit contributions and employee medical deductions reimburse the medical and pharmaceutical
reimbursements. Also, establish reserves for the payment of estimated future claims.
The Unemployment Insurance Fund is currently self -insuring State Unemployment Compensation. Related
premiums received by the fund are used to reimburse the unemployment benefits paid to eligible individuals and to
establish reserves for the payment of estimated future unemployment claims liability.
Citv of Federal Wav / 100
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2016
Risk Information Support Fleet and
Management Systems Services Equipment
ASSETS
Current Assets
Equity in pooled cash & investments
Prepaid items
Due from other governments
TOTAL CURRENT ASSETS
Noncurrent assets
Capital assets:
Building/structures
Machinery/furniture/equipment
Less accumulated depreciation
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
DEFERRED OUTFLOWS RELATED TO
PENSIONS
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
TOTAL CURRENT LIABILITIES
Long-term liabilities:
Compensated absences payable
Net Pension Liability
TOTAL LONG-TERM LIABILITIES
TOTAL LIABILITIES
DEFERRED INFLOWS RELATED TO
PENSIONS
NET POSITION
Net Investment in capital
Unrestricted
TOTAL NET POSITION
$ 1,160,603
$ 3,907,769 $
214,206
$ 6,455,748
-
-
5,000
-
1,160,603
3,907,769
219,206
6,455,748
7,031,750
277,373
10,584,695
(5,376,427)
(132,563)
(6,066,613)
1,655,323
144,810
4,518,082
1,160,603
5,563,092
364,016
10,973,830
-
113,536
-
5,809
66,771
355,974
8,210
121,576
66,771
355,974
8,210
121,576
-
61,697
-
-
590,197
30,341
-
651,894
30,341
66,771
1,007,868
8,210
151,917
10,633
547
- 1,655,323 144,810 4,518,082
1,093,832 3,002,804 210,996 6,309,093
$ 1,093,832 $ 4,658,127 $ 355,806 $ 10,827,175
Federal Wav / 101
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
December 31, 2016
Buildings and Self Health Unemployment
Furnishings Insurance Insurance TOTAL
ASSETS
Current Assets
Equity in pooled cash & investments $ 2,049,644 $ 2,094,217 $ 1,383,105 $ 17,265,292
Prepaid items - - - 5,000
Due from other governments - - - -
TOTAL CURRENT ASSETS 2,049,644 2,094,217 1,383,105 17,270,292
Noncurrent assets
Capital assets:
Building/structures
16,545,121
16,545,121
Machinery/furniture/equipment
-
17,893,818
Less accumulated depreciation
(9,536,486)
(21,112,089)
TOTAL NONCURRENT ASSETS
7,008,635
13,326,850
TOTAL ASSETS
9,058,279 2,094,217
1,383,105 30,597,142
DEFERRED OUTFLOWS RELATED TO
PENSIONS
3,278
122,623
LIABILITIES
Current Liabilities:
Vouchers/payroll payable
28,504 73,751
5,296 660,082
TOTAL CURRENT LIABILITIES
28,504 73,751
5,296 660,082
Long-term liabilities
Compensated absences payable
- - -
61,697
Net Pension Liability
13,730 - -
634,268
TOTAL LONG-TERM LIABILITIES
13,730 - -
695,965
TOTAL LIABILITIES
42,234 73,751 5,296
1,356,047
DEFERRED INFLOWS RELATED TO
PENSIONS
247 - -
11,427
NET POSITION
Net Investment in capital
7,008,635 - -
13,326,850
Unrestricted
2,010,441 2,020,466 1,377,809
16,025,441
TOTAL NET POSITION
$ 9,019,076 $ 2,020,466 $ 1,377,809
$ 29,352,291
Citv of Federal Wav / 102
INTERNAL SERVICE FUNDS
COMBINING STATEMENT
OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2016
Risk
Information
Support
Fleet and
Management
Systems
Services
Equipment
OPERATING REVENUES:
Service charges and fees
$ 924,443
$ 1,944,643
$ 128,085
$ 1,939,143
Intergovernmental
-
-
-
-
Miscellaneous
85,247
10,226
TOTAL OPERATING REVENUES
1,009,690
1,954,869
128,085
1,939,143
OPERATING EXPENSES:
Personnel services
-
908,093
-
48,871
Materials and supplies
-
241,569
16,528
331,237
Services and charges
104,710
519,510
78,077
353,344
Intergovernmental
-
130,973
-
47
Insurance
502,951
-
-
Claims
286,530
-
-
-
Depreciation
-
366,150
41,237
1,038,658
TOTAL OPERATING EXPENSES
894,191
2,166,295
135,842
1,772,157
OPERATING INCOME (LOSS)
115,499
(211,426)
(7,757)
166,986
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
161,135
Interest income
3,035
15,896
768
23,078
TOTAL NON -OPERATING REVENUES (EXPENSES) 3,035
15,896
768
184,213
INCOME (LOSS) BEFORE TRANSFERS
118,534
(195,530)
(6,989)
351,199
Capital contributions
-
113,399
41,342
Transfers in
-
-
Transfers out
-
CHANGE IN NET POSITION
118,534
(82,131)
(6,989)
392,541
NET POSITION - BEGINNING
Net Effect - Change in Accounting for Pensions
ADJUSTED NET POSITION - BEGINNING
NET POSITION - ENDING
975,298 4,740,258 362,795 10,434,634
975,298 4,740,258 362,795 10,434,634
$ 1,093,832 $ 4,658,127 $ 355,806 $ 10,827,175
Federal Wav / 103
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
For Year Ended December 31, 2016
Buildings and
Self Health
Unemployment
Furnishings
Insurance
Insurance
TOTAL
OPERATING REVENUES:
Service charges and fees
$ 438,911 $
5,364,279
$ 271,127
$ 11,010,631
Intergovernmental
-
-
-
-
Miscellaneous
1,088
96,561
TOTAL OPERATING REVENUES
439,999
5,364,279
271,127
11,107,192
OPERATING EXPENSES:
Personnel services
(2,570)
-
-
954,394
Materials and supplies
45,919
-
-
635,253
Services and charges
346,814
5,072,393
30,064
6,504,912
Intergovernmental
-
20,605
-
151,625
Insurance
-
502,951
Claims
-
286,530
Depreciation
825,783
2,271,828
TOTAL OPERATING EXPENSES
1,215,946
5,092,998
30,064
11,307,493
OPERATING INCOME (LOSS)
(775,947)
271,281
241,063
(200,301)
NON -OPERATING REVENUES (EXPENSES):
Gain (Loss) from disposal of capital assets
-
-
-
161,135
Interest income
7,695
7,698
5,448
63,618
TOTAL NON -OPERATING REVENUES (EXPENSES) 7,695
7,698
5,448
224,753
INCOME (LOSS) BEFORE TRANSFERS
(768,252)
278,979
246,511
24,452
Capital contributions
-
-
-
154,741
Transfers in
114,055
114,055
Transfers out
-
(1,000,000)
(1,000,000)
CHANGE IN NET POSITION
(654,197)
278,979
(753,489)
(706,752)
NET POSITION - BEGINNING
Net Effect - Change in Accounting for Pensions
ADJUSTED NET POSITION - BEGINNING
NET POSITION - ENDING
9,673,273 1,741,487 2,131,298 30,059,043
9,673,273 1,741,487 2,131,298 30,059,043
$ 9,019,076 $ 2,020,466 $ 1,377,809 $ 29,352,291
ON ofFederal Wav / 104
CITY OF
Federal Way
It's all within reach
THIS PAGE IS LEFT D4T=ONALLY BLANK
Federal Wav / 105
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2016
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:
Increases/(decrease)in depreciation expense
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pensions
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital assets
Risk Information Support Fleet and
Management Systems Services Equipment
$ 924,443 $
1,944,643 $ 128,085
$ 1,939,143
(286,530)
- -
-
(58,216)
(661,277) (90,175)
(595,299)
-
(881,257) -
(46,834)
(502,951)
(130,973) -
-
85,247
26,453 -
-
161,992
297,589 37,910
1,297,010
(508,095) (15,391) (1,055,388)
- - - 161,135
(508,095) (15,391) (894,254)
3,035 15,896 768 23,078
3,035 15,896 768 23,078
165,027 (194,611) 23,288 425,834
995,576 4,102,380 190,918 6,029,914
1,160,603 3,907,769 214,206 6,455,748
115,499 (211,426) (7,758) 166,987
- 366,150 41,237
1,038,658
- 16,227 -
-
- (44,740) -
(2,418)
46,493 99,802 4,431
89,328
- 6,936 -
-
- 125,635 -
7,439
- (60,995) -
(2,984)
46,493 509,015 45,668
1,130,023
$ 161,992 $ 297,589 $ 37,910 $ 1,297,010
$ - $ 113,399 $ - $ 41,342
Citv of Federal Wav / 106
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For Year Ended December 31, 2016
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:
Increases/(decrease) in depreciation expense
(Increases)/decrease in due from other governments
(Increases)/decrease in deferred outflows related to pensions
Increases/(decrease)in vouchers/accounts payable
Increases/(decrease) in accrued payroll/compensated absences payable
Increases/(decrease) in net pension liability
Increases/(decrease) in deferred inflows related to pensions
TOTAL ADJUSTMENTS
NET CASH PROVIDED/USED BY OPERATING ACTIVITIES
Non -cash investing, capital, and financing activities:
Other contributions of capital asset:
Buildings and Health Unemployment
Furnishings Insurance Insurance TOTAL
$ 461,399
$ 5,364,279 $
271,127 $ 11,033,119
-
-
- (286,530)
(392,354)
(5,071,921)
(34,839) (6,904,081)
(20,253)
-
- (948,344)
-
(20,605)
- (654,529)
1,088
-
- 112,788
49,880
271,753
236,288 2,352,422
114,055 - - 114,055
- - (1,000,000) (1,000,000)
114,055 - (1,000,000) (885,945)
(5,448) - - (1,584,322)
- - 161,135
(5,448) (1,423,188)
7,696 7,698 5,449 63,620
7,696 7,698 5,449 63,620
166,184 279,451 (758,264) 106,910
1,883,460 1,814,766 2,141,368 17,158,382
2,049,644 2,094,217 1,383,105 17,265,292
(775,948) 271,281 241,063 (200,302)
825,783 -
- 2,271,828
22,488 -
- 38,715
1,656 -
- (45,502)
380 472
(4,775) 236,131
- -
- 6,936
(19,588) -
- 113,486
(4,891) -
- (68,870)
825,828 472
(4,775) 2,552,724
$ 49,880 $ 271,753 $
236,288 $ 2,352,422
$ 154,741
Federal Wav / 107
SUPPLEMENTAL INFORMATION
ON ofFederal Wav / 108
MCAG NO. 0711
SCHEDULE 15
CITY OF FEDERAL WAY,
WASHINGTON
SCHEDULE OF STATE FINANCIAL ASSISTANCE
For Year Ended December 31, 2016
State Agency
Pass-Thru Agency (if applicable)
Other I.D./
Current Year
Program Title
BARS Account
Grant #
Expenditures
Department of Commerce
Housing Assistance Unit Consolidated Homeless Grant
001-0000-083-334-04-020
16-46118-01
50,000
Federal Way Performing Arts & Event Center
308-5800-110-334-04-020
14-93220-009
1,659,417
Federal Way Performing Arts & Event Center
308-5800-110-334-04-020
16-93205-033
1,950,000
SUBTOTAL DEPARTMENT OF COMMERCE
3,659,417
Washington Office of Sheriffs and Police Chiefs
WA Auto Theft Prevention Authority Grant
001-0000-090-334-06-090
n/a
137,129
SUBTOTAL WASHINGTON OFFICE OF SHERIFFS AND POLICE CHIEFS
137,129
State Department of Ecology
Coordinated Prevention Grant
106-0000-000-334-03-010
n/a
18,011
Water Quality Algae Grant
401-0000-000-334-03-010
n/a
20,638
Stormwater Capacity Grant 2015-2017
401-0000-000-334-03-010
n/a
9,695
SUBTOTAL STATE DEPARTMENT OF ECOLOGY
48,344
Washington Traffic Safety Commission
Lidar Units
001-0000-090-334-03-050
n/a
8,097
SUBTOTAL WASHINGTON TRAFFIC SAFETY COMMISSION
8,097
State Department of Transportation
Commute Trip Reduction
101-0000-000-334-03-060
n/a
22,887
SR 99 HOV Lanes Phase V
306-4400-165-334-03-080
n/a
624,716
S 352nd Street Extension from SR99 to SR161
306-4400-151-334-03-080
n/a
2,751,
SUBTOTAL STATE DEPARTMENT OF TRANSPORTATION
3,399,
TOTAL STATE ASSISTANCE:
79252,2d67
Federal Wav / 109
MCAG NO. 0711
SCHEDULE 16
CITY OF FEDERAL
WAY, WASHINGTON
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For Year
Ended December
31, 2016
Federal Agency
From
From
Passed
Pass- Thru Agency (if applicable)
CFDA
Other
Pass -Through
Direct
Total
through to
Federal Program Name
BARS Account
#
I.D. #
Awards
Awards
Expenditures
Subrecipients
US Department of Housing and Urban Development Office of Community Planning and Development
Community Development Block Grants/Entitlement Grants
119-7300-951-331-14-218
14.218
951 B-16-MC-53-0015
-
73,623
73,623
-
Community Development Block Grants/Entitlement Grants
119-7300-955-331-14-218
14.218
955 B-16-MC-53-0015
-
12,460
12,460
12,460
Community Development Block Grants/Entitlement Grants
119-7300-956-331-14-218
14.218
956 B-16-MC-53-0015
-
5,192
5,192
5,192
Community Development Block Grants/Entitlement Grants
119-7300-961-331-14-218
14.218
961 B-16-MC-53-0015
-
63,731
63,731
-
Community Development Block Grants/Entitlement Grants
119-7300-963-331-14-218
14.218
963 B-16-MC-53-0015
-
60,255
60,255
60,255
Community Development Block Grants/Entitlement Grants
119-7300-966-331-14-218
14.218
966 B-16-MC-53-0015
-
36,312
36,312
-
Community Development Block Grants/Entitlement Grants
119-7300-967-331-14-218
14.218
967 B-16-MC-53-0015
-
24,840
24,840
24,840
Community Development Block Grants/Entitlement Grants
119-7300-987-331-14-218
14.218
987 B-16-MC-53-0015
-
10,383
10,383
10,383
Community Development Block Grants/Entitlement Grants
119-7300-900-331-14-218
14.218
900 B-16-MC-53-0015
-
5,345
5,345
-
Community Development Block Grants/Entitlement Grants
119-7300-993-331-14-218
14.218
993 B-16-MC-53-0015
-
7,200
7,200
7,200
Community Development Block Grants/Entitlement Grants
119-7300-994-331-14-218
14.218
994 B-16-MC-53-0015
-
87,000
87,000
87,000
Community Development Block Grants/Entitlement Grants
119-7300-996-331-14-218
14.218
996 B-16-MC-53-0015
-
93,873
93,873
-
Community Development Block Grants/Entitlement Grants
119-7300-997-331-14-218
14.218
997 B-16-MC-53-0015
12,644
12,644
12,644
SUBTOTAL CFDA 14.218 Entitlement Grants Cluster
REFER TO NOTES 1-3
492,858
492,858
219,974
US Department of Housing and Urban Development Office of Community Planning and Development
Community Development Block Grants Section 108 Loan Guarantees
308-5800-110-331-14-248
14.248
B-13-MC-53-0015
-
2,925,000
2,925,000
-
SUBTOTAL CFDA 14.248
REFER TO NOTES 1-4
2,925,000
2,925,000
US Department of Justice Bureau of Justice Assistance
State Criminal Alien Assistance Program
001-0000-090-331-16-606
16.606
SCAAP
2,728
2,728
SUBTOTAL CFDA 16.606
REFER TO NOTES 1-3
2,728
2,728
US Department of Justice Bureau of Justice Assistance
Bulletproof Vest Partnership Program
001-0000-090-331-16-607
16.607
BPV
13,081
13,081
SUBTOTAL CFDA 16.607
REFER TO NOTES 1-3
13,081
13,081
US Department of Justice Bureau of Justice Assistance
Pass-thru City of Seattle
Edward Byrne Memorial Justice Assistance Grant Program
001-0000-090-333-16-738
16.738
2013-DJ-BX-0715
12,349
12,349
SUBTOTAL CFDA 16.738
REFER TO NOTES 13
12,349
12,349
US Department of Justice Office of Community Oriented Policing Services
Public Safety Partnership and Community Policing Grants
001-0000-090-331-16-710
16.710
#2014UMWX0110
233,059
233,059
SUBTOTAL CFDA 16.710
REFER TO NOTES 13
233,059
233,059
US Department of Transportation National Highway Traffic Safety Administration
Pass-thru Washington Traffic Safety Commission
State and Community Highway Safety
00 1 -0000-090-333-20-600
20.600
DHGN
29,129
29,129
SUBTOTAL CFDA 20.600 Highway Safety Cluster
REFER TO NOTES 1-3
29,129
29,129
US Department of Transportation Federal Highway Administration
Pass-thru Washington State DOT
Highway Planning and Construction
306-4400-165-333-20-050
20.205
STPUL-0099(126)
2,279,251
-
2,279,251
-
Highway Planning and Construction
306-4400-193-333-20-050
20.205
CM-1001(004)
286,407
-
286,407
-
Highway Planning and Construction
306-4400-194-333-20-050
20.205
SRTS-0509(031)
1,095,993
-
1,095,993
-
Highway Planning and Construction
306-4400-196-333-20-050
20.205
STPUL-1150(002)
47,123
-
47,123
-
Highway Planning and Construction
306-4400-197-333-20-050
20.205
STPUL-1022(003)
74,603
-
74,603
-
Highway Planning and Construction
306-4400-199-333-20-050
20.205
HSIP-0005(409)
619,508
-
619,508
Highway Planning and Construction
306-4400-200-333-20-050
20.205
HLP-0443 008
74,847
74,847
SUBTOTAL CFDA 20.205 Highway Planning and Construction Cluster
REFER TO NOTES 1-3
4,477,732
4,477,732
US Department of Homeland Security
Pass-thru Military Department
Emergency Management Performance Grants
101-0000-000-333-97-042
97.042
n/a
39,684
39,684
SUBTOTAL CFDA 97.042
REFER TO NOTES 1-3
39,684
39,684
TOTAL FEDERAL ASSISTANCE:
4,558,894
3,666,726
8,225,620
219,974
Citv of Federal Wav / 110
ie Schedule of Financial Assistance is prepared on the same basis of accounting as the City of Federal Way's financial statements. The City uses the modified accrual basis of accounting, which is the basis
iapted to governmental fund -type measurement focus. All grants reported on this schedule have been accounted for in governmental fund types. Grant revenues are determined to be earned and available at
e 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.
ote 2: Program Costs
is amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the City of Federal Way's portion, are more than shown. Such
cpenditures are recognized following, as applicable, either the cost principles in the OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or
e limited as to reimbursement.
ote 3: Indirect Cost Rate
is City of Federal Way did not use the new 10 % de minimis indirect cost rate as covered in 200.414 Indirect (F&A) costs,and is currently only charging direct costs to grants received.
ote 4: Federal Loans
is City of Federal Way was approved by the US Department of Housing and Urban Development Office of Community Planning and Development to receive a loan totaling $2,925,000 to finance the Performing Arts
Event Center economic development project.
Federal Wav / 111
CAPITAL ASSETS USED IN THE
OPERATION
OF GOVERNMENTAL FUNDS
Citv of Federal Wav / 112
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
December 31, 2016
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
2016 2015
$ 281,422,490
$279,352,222
23,447,417
23,193,682
26,450,524
25,091,751
746,629
-
172,544,173
169,816,179
35,600,490
15, 697,231
540,211,723 513,151,065
125,244,871
125,244, 871
252,375,395
252,375,395
112,466,222
94,115,397
50,125,235
41,415,402
$ 540,211,723 $ 513,151,065
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.
Federal Wav / 113
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
December 31, 2016
Improvements
Machinery
Construction
Other than
and
in
Total
Total
Function and Activity
Land
Buildings Buildings
Equipment
Infrastructure
Progress
2016
2015
GENERAL GOVERNMENT
Miscellaneous general government
$ 26,807,597
$ $ 19,973
$
$ 6,139,001
$ 19,757,644
$ 52,724,215
$38,449,761
Total General Government:
26,807,597
19,973
6,139,001
19,757,644
52,724,215
38,449,761
CULTURE AND RECREATION
Culture and Recreation
113,723,537
23,447,417 26,430,551
746,629
94,474,128
457,096
259,279,358
257,926,776
Total Culture and Recreation:
113,723,537
23,447,417 26,430,551
746,629
94,474,128
457,096
259,279,358
257,926,776
TRANSPORTATION
Streets and Traffic
140,891,356
- -
-
71,931,044
15,385,750
228,208,150
216,774,528
Total Transportation:
140,891,356
71,931,044
15,385,750
228,208,150
216,774,528
Total General Fixed Asset by Function: $ 281,422,490 $ 23,447,417 $ 26,450,524 $ 746,629 $ 172,544,173 $ 35,600,490 $ 540,211,723 $ 513,151,065
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.
Citv of Federal Wav / 114
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
For the Year Ended December 31, 2016
GENERAL GOVERNMENT
Miscellaneous general government
TOTAL GENERAL GOVERNMENT
CULTURE AND RECREATION
TOTAL CULTURE AND RECREATION
TRANSPORTATION
Streets and traffic
TOTAL TRANSPORTATION
TOTAL GENERAL FIXED ASSETS
Governmental
Funds
Capital Assets
1/1/2016 Additions Deductions
Governmental
Funds
Capital Assets
12/31/2016
$38,449,761 $ 14,274,454 $ - $52,724,215
38,449,761 14,274,454 - 52,724,215
257,926,776 7,543,979 6,191,397 259,279,358
257,926,776 7,543,979 6,191,397 259,279,358
216,774,528 40,829,819 29,396,197 228,208,150
216,774,528 40,829,819 29,396,197 228,208,150
$ 513,151,065 $ 62,648,252 $ 35,587,594 $ 540,211,723
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.
Federal Wav / 115
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.
Citv of Federal Wav / 116
NET POSITION BY COMPONENT
Last Ten Fiscal Years
2007
2008
2009
2010
2011
1 2012
2013
2014
2015
2016
Governmental activities
Net investment in capital assets
$ 439,127,122
$ 456,600,030
$ 442,704,401
465,671,345
470,074,905
470,597,776
468,628,412
466:078036
424,245,625
440,815,201
Restricted
32,269,512
28,434,066
27,476,530
17,442,323
23,941,601
22,847,077
22,594,884
17391:272
20,193,214
21,372,596
Unrestricted
23,651,674
24 773,913
44 282,822
44,613 406
38 602,445
45,027 323
48 829,641
57,837 173
46,012,847
42,575 521
Total governmental activities netpositio
495,048,308 509,808,009 514,463,753 527,727,074 532,618,951 538,472,176 540,052,936 541,306,481 490,451,686 504,763,318
F—
Business-type activities
Net investment in capital assets
45,264,105
50,494,590
50,578,649
50,563,097
50,052,887
50,280,880
50,620,091
50,299:229
58,998,176
59,059,646
Restricted
15,777
42,558
16,366
9,411
18,831
26,496
20,559
203"
15,906
18,438
Unrestricted
6,550 179
5,071,617
5,115,275
5,015 367
5,398,786
5,968 302
6,577,269
7,219 403
1 5,814,364
5,142 741
Total business -type activities net positio
51,830,061 55,608,765 55,710,290 55,587,875 55,470,504 56,275,678 57,217,919 57,538,943 64,828,446 64,220,825
Primary government
Net investment in capital assets
484,391,227
507,094,620
493,283,050
516,234,442
520,127,792
520,878,656
519,248,503
516,377,265
483,243,801
499,874,847
Restricted
32,285,289
28,476,624
27,492,896
17,451,734
23,960,432
22,873,573
22,615,443
17,411,583
20,209,120
21,391,034
Unrestricted
30,201,853
29 845,530
49,398,097
49,628 773
1 44 001,231
50,995 625
55 406,910
65,056 576
51 827,211
47,718,262
Total primary government net assets 546,878,369 565,416,774 570,174,043 583,314,949 588,089,455 594,747,853 597,270,856 598,845,424 555,280,132 568,984,143
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Federal Wav / 117
CHANGES IN NET POSITION
Last Ten Fiscal Years
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
$ 4,633,942
$4,743,932
$ 4,544,037
Security ofpersons and property
23,107,683
24,745,284
26,341,614
26,842,240
27,222,584
27,604,936
27,894,695
29,703,386
32,017,617
36,018,643
Transportation
9,986,067
7,891,298
9,448,397
9,781,800
13,539,598
9,946,776
9,675,727
11,434,659
13,070,260
12,920,893
Physical environment
336,588
370,718
450,914
451,470
424,466
415,935
490,916
443,127
476,570
469,237
Economic environment
3,319,955
3,382,572
3,560,620
3,175,005
2,782,435
2,645,478
2,191,487
2,785,807
2,973,437
3,206,414
Health and human svcs
684,984
705,976
776,854
767,108
690,643
754,727
1,683,449
1,056,802
1,618,759
1,501,057
Culture and recreation
6,506,137
6,955,442
8,089,242
8,073,804
8,105,578
8,081,401
8,418,920
8,376,205
8,959,555
9,373,278
Interest on long-term debt
1,122,358
901,161
811,124
685,214
614,571
602,572
1,779,833
1,010,406
461,763
433,729
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
59,444,335
64,321,893
68,467,288
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
3,653,999
4,093,534
4,408,225
Dumas Bay Center
980,588
1,045,250
984,103
849,176
890,738
873,144
844,623
945,705
1,250,161
1,104,971
Total business -type activities expenses
4,434,781
5105 690
4,329,130
4,233,528
4,418,328
4,145,658
4,079,365
4,599,703
5,343,695
5,513,197
Total primary government expenses
54,005,353
55,664,938
58,374,352
58,875,996
62,246,652
58 498175
60,790,005
64,044,038
69,665,588
73,980485
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
2,118,896
1,994,674
2,449,406
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
4,637,071
5,295,641
5,701,083
Transportation
3,119,637
513,340
1,806,846
1,961,083
2,484,058
2,139,292
577,489
1,804,199
1,362,118
1,565,140
Physical Environment
-
262,847
86,230
90,512
77,875
89,457
299,337
305,742
302,083
304,294
Economic Environment
1,009,707
1,962,624
680,908
636,534
510,483
568,973
2,201,375
3,059,772
2,698,841
1,766,106
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
2,476,383
2,475,852
2,424,129
Operating grants and contributions
22,858
1,538,476
2,172,168
9,718,920
4,597,981
5,367,163
6,007,682
5,410,098
6,544,176
5,638,756
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
5,632,549
4,508,428
15,863,183
Total governmental activities program revenue
21760 776
20,395,471
20,804,457
29,580,898
24,802,216
22,152,636
22,416,065
25,444,710
25,181,813
35,712,096
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
4,174,613
4,662,995
4,900,530
Operating grants and contributions
632,185
-
-
-
265,660
576,182
774,436
177,518
17,108
68,970
Capital grants and contributions
222,474
430,090
328,130
790,033
Total business -type activities program revenue!
4,521,827
4,473,453
4,183,012
4,246,235
4,285,804
4,798,908
4,871,187
4,782,221
5,008,233
5,759,532
26,282,603
24,868,924
24,987,469
33,827,133
29,088,020
26,951,544
27,287,252
30,226,931
30,190,046
41,471,629
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)
(33,999,625)
(39,140,080)
(32,755,191)
Business -type activities
87,046
(632,237)
(146,118)
12,707
(132,524)
653,250
791,822
182,517
(335,462)
246,336
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
12,173,281
13,297,086
14,222,497
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
2,138,406
2,319,124
2,499,527
Utility tax
12,796,461
13,469,136
13,549,472
12,890,310
13,068,510
13,083,179
12,584,293
12,028,878
11,796,550
11,902,866
Property tax
9,059,734
9,397,456
9,653,537
9,609,740
9,867,614
10,052,109
10,152,114
10,349,905
10,460,136
10,539,623
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
2,062,722
3,031,159
5,265,138
Gambling Tax
1,489,952
1,259,783
1,127,203
493,486
511,005
114,443
178,696
176,068
177,807
190,051
Hotel/MotelTax
191,691
188,833
154,148
149,058
185,289
193,344
208,839
231,828
266,053
283,220
Leasehold tax
7,254
5,712
4,999
5,757
6,259
5,820
5,989
6,693
6,104
3,784
Other
6,971,413
6,502,869
2,020,751
1,210,341
1,061,026
838,259
868,261
1,145,798
2,052,748
1,526,995
Transfers
185,495
123,518
200,907
152,768
113,000
140,500
137,419
116,000
17,959
633,124
Total governmental activities
50,423,554
47,733,417
40,065,379
38,324,892
38,801,450
38,053,106
39,233,811
40,197,580
43,388,808
47,066,823
Business -type activities:
Other
366,031
3,447,458
46,736
17,646
12,405
11,424
13,000
22,507
24,917
45,405
Transfers
185,495
123,518
200,907
152,768
113,000
140,500
137,419
116,000
17,959
633,124
Total business -type activities
551,526
3,323,940
247,643
(135,122)
125,405
151,924
150,419
138,507
42,876
(587,720)
Total primary government
$ 50,975,080
$ 51057 357
$40 313 022
$ 38189 770
$ 38,926,855
$ 38,205,030
$ 39,384,230
$ 40,336,087
$ 43,431,684
$ 46 479103
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
$ 6,197,955
$ 4,248,728
$ 14,311,632
Business -type activities
638,572
2,691,703
101,525
(122,415)
(7,119)
805,174
942,241
321,025
(292,586)
(341,384)
Prior Period Adjustment
-
(1,722,939)
(2,168,769)
-
(3,358,477)
(4,944,409)
(37,035,737)
(266,237)
Net Effect - Change in Accounting for Pensions
10 485,698
Total primary government
$ 23,252,330
$ 18,538,404
$ 4,757,370
$ 13,140,907
$ 5,768,223
$ 6,658,398
$ 2,523,001
$ 1,574,570
$(43,565,293) $ 13,704,010
Source: City of Federal Way Finance
Note: All amounts are reported on the accrual basis.
Citv ofFederal Wav / 118
GOVERNMENT -WIDE REVENUES BY SOURCE AND EXPENSES BY FUNCTION
Last Ten Fiscal Years
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Pro ram 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
18,576,675
18,792,204
19,110,688
Operating Grants and Contributions
246,305
1,538,476
2,172,168
9,718,920
4,863,641
5,943,345
6,782,118
5,587,616
6,561,284
5,707,725
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
6,062,639
4,836,558
16,653,215
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
12,173,281
13,297,086
14,222,497
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
2,138,406
2,319,124
2,499,527
Utility tax
12,796,461
13,469,136
13,549,472
12,890,310
13,068,510
13,083,179
12,584,293
12,028,878
11,796,550
11,902,866
Property tax
9,059,734
9,397,456
9,653,537
9,609,740
9,867,614
10,052,109
10,152,114
10,349,905
10,460,136
10,539,623
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
2,062,722
3,031,159
5,265,138
Gambling Tax
1,489,952
1,259,783
1,127,203
493,486
511,005
114,443
178,696
176,068
177,807
190,051
Hotel/MotelTax
191,691
188,833
154,148
149,058
185,289
193,344
208,839
231,828
266,053
283,220
Leasehold tax
7,254
5,712
4,999
5,757
6,259
5,820
5,989
6,693
6,104
3,784
Other revenue
4,194,183
875,389
1,421,791
1,063,825
960,012
702,833
624,464
883,549
1,820,868
1,159,347
Unrestricted Grants & Contribution
7,448,783
284,350
Investment Earnings
3,223,005
1,678,292
385,976
179,373
113,419
146,850
256,797
284,757
256,797
413,052
Disposition of capital assets
(79,744)1
52,137
(24,630)1
(15,211)1
Total Revenues
77,258,656 75,926,281 65,300,490 72,0169903 68,014,875 65 156,573 66,671,482 70,563,017 73,621,730 87,950,732
Expenses
General Government
4,506,800
5,606,797
4,566,457
4,865,827
4,448,449
41300,691
4,575,614
4,633,942
4,743,932
4,544,037
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
29,703,386
32,017,617
36,018,643
Transportation
9,986,067
7,891,298
9,448,397
91781,800
13,539,598
9,946,776
9,675,727
11,434,659
13,070,260
12,920,893
Physical Environment
336,588
370,718
450,914
451,470
424,466
415,935
490,916
443,127
476,570
469,237
Economic Environment
3,319,955
3,382,572
3,560,620
3,175,005
2,782,435
2,645,478
2,191,487
2,785,807
2,973,437
3,206,414
Health
684,984
705,976
776,854
767,108
690,643
754,727
1,683,449
1,056,802
1,618,759
1,501,057
Culture & Recreation
6,506,137
6,955,442
8,089,242
8,073,804
8,105,578
8,081,401
8,418,920
8,376,205
8,959,555
9,373,278
Interest on long-term debt
1,122,358
901,161
811,124
685,214
614,571
602,572
1,779,833
1,010,406
461,763
433,729
Surface Water Management
3,454,193
41060,440
3,345,027
3,384,352
3,527,590
3,272,514
3,234,742
3,653,999
4,093,534
4,408,225
Dumas Bay Centre
1 980,588
1 1,045,250
984,103
849,176
890,738
873,144
844,623
945,705
1,250,161
1,104,971
Total Ex enses
$54,005,353 $55,664,938 $58,374,352 $ 58,875,996 $ 62,246,652 $ 58,498,175 $ 60,790,005 $ 64,044,038 $ 69,665,588 $ 73,980,485
Source: City ofFederal Way Finance
Federal Wav / 119
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
General fund
Reserved
125,184
418,207
106,728
Unreserved
7,783,868
5,511,440
8,138,468
Nonspendable
81,146
104,012
69,398
76,538
105,417
136,806
187,284
Restricted
168,398
145,524
60,585
39,081
54,526
71,106
108,147
Committed
21,893
21,893
21,893
3,403,937
34,513
199,013
Unassigned
Total general fund
8,188,575
12,372,719
14,783,219
16,003,076
12,480,539
14,362,533
13,794,955
7 09 052 5,929,647 8,245,196 8,438,119 12,644,148 14,935,095 16,140,587 16,044,419 14,604,958 14,289,398
All Other Governmental Funds
Reserved
2,323,184
1,763,667
4,770,399
Unreserved, reported in.
Special revenue fund:
4,392,623
7,505,799
4,311,238
Capital projects fund:
30,054,670
26,252,192
22,934,356
Restricted
17,776,967
19,325,489
18,079,168
17,478,394
17,231,330
19,985,302
21,077,165
Committed
18,611,612
11,642,248
15,813,105
16,371,292
19,530,016
17,114,881
13,932,351
Assigned
100,000
Unassigned
Total a0 other governmental funds $ 36,770,477 $ 35,521,658 $ 32,015,993 $ 36,488,580 $ 30,967,736 $ 33,892,273 $ 33,849,686 $ 36,761,346 $ 37,100,183 $ 35,009,516
Source: City of Federal Way Finance
Note: Fund Balance reclassification implementation of GASB 54 for year's 2010 and forwar
Citv of Federal Wav / 120
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Revenues
Taxes
$ 43,584,824
$ 41,071,781
$ 38,192,852
$ 37,122,069
$ 37,831,045
$ 37,450,059
$ 38,505,413
$ 39,241,915
$41,387,894
$ 44,898,868
Licenses, fees and permits
2,939,328
2,195,068
2,163,984
2,547,655
2,209,873
2,501,368
2,638,017
3,311,671
3,574,648
3,140,133
Intergovernmental
15,494,887
10,520,570
11,127,718
18,648,749
11,713,248
7,631,014
9,682,511
9,929,833
8,910,603
22,708,107
Charges for services
6,327,552
6,246,207
5,573,647
5,486,632
6,131,287
5,686,962
5,965,726
7,591,795
6,467,528
6,934,789
Fines and Forfeitures
1,005,293
1,433,628
2,200,092
2,783,214
2,146,524
3,371,878
3,911,990
3,498,596
4,087,033
4,135,236
Investment earnings
2,463,670
1,274,955
271,600
139,698
89,338
122,483
172,049
250,439
210,289
308,643
Other revenues 630,966 875,389 1,599,207 899,092 1 960,012 702,830 678,850 883,549 1,820,867 1,159,348
Total revenues 72,446,520 63,617,598 61,129,100 67,627,109 61,081,327 57,466,594 61,554,556 64,707,798 66,458,862 83,285,124
Expenditures
General government 4,364,750
5,197,032
4,518,821
4,857,177
4,234,327
4,402,129
4,495,029
4,444,772
4,707,145
4,541,228
Security ofpersons and property 24,183,913
25,470,722
27,051,814
26,892,207
28,332,237
26,562,270
29,028,242
31,235,230
32,471,782
35,655,951
Transportation 6,631,030
6,634,548
6,165,540
5,700,274
7,427,408
6,039,183
5,672,769
6,209,000
7,109,395
7,162,201
Physical Environment 336,588
370,718
448,873
450,971
427,315
409,042
468,220
461,718
478,807
452,720
Economic Environment 3,326,986
3,344,987
3,504,767
3,161,820
2,782,537
2,645,215
2,190,502
2,786,542
2,960,841
3,180,808
Health 677,536
700,876
772,151
765,963
690,824
754,311
1,681,986
1,057,841
1,617,818
1,497,793
Culture and Recreation 5,300,455
5,871,288
5,845,676
5,857,621
5,821,160
5,877,370
6,183,381
6,246,952
6,787,491
7,032,133
Debt Service
Principal 9,953,505
440,900
4,558,750
494,250
457,520
480,760
1,019,698
963,500
640,482
470,000
Interest/fiscalcharges/adminfees 1,122,358
901,161
811,124
685,214
614,571
602,572
1,781,778
1,021,945
491,379
471,738
Capital Outlay 19,162,067
18,037,109
8,443,523
14,249,501
11,560,205
4,337,758
8,987,949
17,508,958
10,237,386
26,745,849
Total expenditures 75 059,188 66 969,341 62121,039 63114,998 62 348,104 52110,610 61,509,554 71936,458 67 502,526 87 210,421
Excess of revenues over
(under) expenditure,
(2,612,668)
(3,351,743)
(991,939)
4,512,111
(1,266,777)
5,355,984
45,002
(7,228,660)
(1,043,664)
(3,925,297)
Other Financing Sources (Uses)
GO bond proceeds
-
-
12,415,000
Bond principal payoff
-
(11,955,000)
Sale of capital assets
(23,786)
9,162
5,500
-
Anticipation Note
-
-
-
-
-
-
-
8,209,960
-
-
Bond premium
-
-
410,660
-
-
-
Transfers in
22,688,136
16,232,916
25,619,678
22,473,128
21,453,223
16,228,281
18,972,853
40,440,790
14,422,187
21,043,890
Transfers out
23,190,280
16,109,398
25,817,857
22,319,725
21,510,423
16,368,781
18,731,107
38,606,598
14,479,146
19,524,820
Total other financingsources (uses) 525,930 123,518 (198,179) 153,403 48,038 140,500 1,117,906 10,044,152 56,959 1,519,070
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 $ 2,815,492 $ (1,100,623) (2,406,227
Debt service as a percentage of
noncapital expenditures 19.8% 2.7% 10.0% 2.4% 2.1% 2.3% 5.3% 3.6% 2.0% 1.6%
Source: City of Federal Way Finance
Federal Wav / 121
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY*
Last Ten Fiscal Years
Fiscal
Year
Real Property
Personal
Property
State Public
Service Property
Total
Total City
Direct
Tax Rate(Decrease)
Percent
Increase
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%
2014
8,043,211,679
223,362,313
109,128,234
8,375,702,226
1.40
13.4%
2015
8,550,055,199
233,032,732
122,206,127
8,905,294,058
1.25
6.3%
2016
9,148,479,809
228,742,814
112,214,847
9,489,437,470
1.19
6.6%
* Real, personal, and state public service property has been assessed at 100% of the estimated value.
Source: King County Assessor's Office.
Note: These figures include all final tax adjustments, non-taxable, senior citizen exempted property and omits.
The total assessed value was reduced by non-taxable of $69,213,179 yielding a taxable assessed value of
of $9,420,224,291. The taxable assessed valuations are the the basis for the following year's tax levy.
Citv of Federal Wav / 122
PROPERTY TAX RATES AND LEVIES, DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
City Direct
Rates*
Overlapping Rates
Fiscal
Year
City of
Federal
Way
Federal Way
School
District #210
King
County
Washington
State
King County
Flood Zone
Port of
Seattle
County
Ferry District
Fire District
#39
Library
Emergency
Medical
Services
Total
TAX RATES PER $1,000 OF ASSESSED VALUATION
2007
1.14
4.19
1.29
2.33
0.04
0.23
-
1.50
0.50
0.21
11.42
2008
1.04
4.15
1.21
2.13
0.10
0.22
0.055
1.50
0.45
0.30
11.16
2009
0.97
4.20
1.10
1.96
0.09
0.20
0.052
1.50
0.42
0.27
10.76
2010
1.13
5.11
1.28
2.22
0.11
0.22
0.003
1.50
0.49
0.30
12.36
2011
1.20
5.36
1.34
2.28
0.11
0.22
0.004
1.39
0.57
0.30
12.77
2012
1.30
5.77
1.42
2.42
0.12
0.23
0.004
1.50
0.57
0.30
13.63
2013
1.42
7.55
1.54
2.57
0.23
0.0041.82
0.17
0.30
16.14
2014
1.40
7.28
1.52
2.47
0.22
0.003
1.81
0.56
0.34
15.75
2015
1.25
6.42
1.35
2.29
L13
0.19
1.77
0.50
0.30
14.20
2016
1.19
6.75
1.48
2.17
0.17
1.91
0.48
0.28
14.55
DETAIL OF TAX RATES FOR 2016
Basic Rate
1.19
1.44
2.17
0.13
0.17
1.50
0.42
7.02
Voted Rate
6.75
0.04
0.41
0.05
0.28
7.53
TAX LEVIES
2007
9,098,370
47,315,366
383,039,569
691,250,598
956,482
68,841,070
-
19,882,637
88,486,309
61,300,276
1,370,170,677
2008
9,300,030
52,730,549
409,763,053
723,908,902
33,945,830
75,908,664
18,670,739
22,288,360
91,371,026
101,861,635
1,539,748,788
2009
9,551,027
58,588,636
422,757,529
756,272,108
35,151,944
75,911,308
19,335,328
23,715,724
95,398,383
105,611,047
1,602,293,034
2010
9,690,241
61,404,973
437,163,660
756,411,197
35,783,324
73,504,599
1,185,576
20,409,747
97,015,693
102,103,088
1,594,672,098
2011
9,827,398
61,622,347
439,635,095
749,341,420
36,076,405
73,512,887
1,184,924
18,234,001
115,495,462
98,604,471
1,603,534,410
2012
9,967,650
61,493,504
449,642,988
769,672,818
36,904,878
73,014,552
1,182,466
18,291,481
112,332,714
95,287,781
1,627,790,832
2013
10,081,2311
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
2014
10,240,148
74,592,913
482,114,428
837,694,800
52,112,348
73,018,695
1,183,251
20,866,842
116,790,442
113,565,682
1,782,179,549
2015
10,379,941
75,700,006
519,943,107
883,333,788
53,576,135
73,003,848
-
23,587,509
120,007,126
116,779,587
1,876,311,047
2016
10,487,319
85,094,113
626,660,985
921,288,805
55,134,677
72,015,418
-
26,636,830
123,025,026
119,904,362
2,040,247,535
Source: King County Assessor's Office and King County Department of Financ
*The Ci of Federal Wa 's Direct Rate has onl one component which is the ex ense le,
Federal Wav / 123
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2016
2007
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
Assessed
Valuation
Rank
% of Total (A)
Assessed Valuation
Weyerhaeuser
Real Estate hnvestment Trust
$ 153,302,265
1
1.62%
$ 160,243,099
1
1.78%
Alliance Tax Advisors
Real Estate Management
86,774,000
2
0.91%
0.00%
KW Club Palisades LLC
Real Estate Management
82,063,000
3
0.86%
-
0.00%
Puget Sound Energy-Elec/Gas
Electric\Gas
77,715,491
4
0.82%
60,085,917
3
0.67%
Prime Woodley Campus Drive
Real Estate Management
67,472,000
5
0.71%
-
0.00%
Avanath Federal Way LLC
Real Estate Management
59,968,000
6
0.63%
0.00%
Commons Mall LLC
Retailer
59,764,000
7
0.63%
69,725,252
2
0.77%
Campus Drive Fee Owner LLC
Real Estate Management
56,521,800
8
0.60%
0.00%
Harsch Investment Properties
Retailer
56,273,400
9
0.59%
55,530,200
4
0.62%
CA Reservice Owner LLC
Real Estate Management
49,379,000
10
0.52%
0.00%
Celebration Senior Living
Real Estate Management
47,830,800
11
0.50%
-
0.00%
Fana Fed Way Crossings LP
Shopping Center
46,476,300
12
0.49%
0.00%
Greystone Meadows Apts.
Real Estate Management
42,143,000
13
0.44%
-
0.00%
FPA5 Landings LLC
Real Estate Management
39,554,000
14
0.42%
0.00%
Wal-Mart
Retailer
37,568,750
15
0.40%
-
0.00%
KNL Vision WA LLC
Real Estate Management
37,143,000
16
0.39%
21,364,000
9
0.24%
Cove Apartments LLC
Real Estate Management
32,968,000
17
0.35%
24,067,000
7
0.27%
Fairfield Maple Hill LLC
Real Estate Management
32,910,000
18
0.35%
0.00%
FSC Riverside Associates
Real Estate Management
32,106,000
19
0.34%
-
0.00%
Waterbury Park Apts.
Real Estate Management
31,634,000
20
0.33%
0.00%
LBA Realty
Real Estate Management
23,404,100
21
0.25%
49,509,700
5
0.55%
IHP - Courtyard by Marriott
Hospitality
21,238,400
22
0.22%
17,297,500
11
0.19%
Fred Meyer
Retail/Wholesaler
19,586,300
23
0.21%
21,706,392
8
0.24%
Qwest Corporation
Telecommunications
16,949,741
24
0.18%
29,655,171
6
0.33%
Virginia Mason Clinic
Medical Services
16,249,600
25
0.17%
18,928,886
10
0.21%
Costco
Retail / Wholesaler
12,585,700
26
0.13%
15,598,729
12
0.17%
Delotte Tax LLP
Real Estate Management
-
27
0.00%
14,043,600
13
0.16%
ANS LLC
Real Estate Management
28
0.00%
13,780,000
14
0.15%
Campus Business Parks LLC
Real Estate Management
7,172,100
29
0.08%
12,863,000
15
0.14%
$1 246 752 747 13.14% $ 584 398,446 6.49%
Source: King County Assessor's Office. Assessor's Office implemented "new" progam to track largest taxpayer for 2016 assessed year.
A 2016 and 2007 assessed valuation for the City of Federal Way was $9,489,437,470 and $9,010,356,378, respectively.
Citv of Federal Wav / 124
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Fiscal
Year
Taxes Levied
for the
Fiscal Year
Collected within the
Fiscal Year of the Levy
Collections
in Subsequent
Years
Total Collections to Date
Total
Outstanding
Delinquent
Taxes
Ratio of
Delinquent
Taxes to
Total Tax Levy
Current Tax
Amount
Percentage
of Levy
Total Tax
Amount
Percentage
of Levy
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%
2014
10,240,148
10,035,433
98.0%
56,371
10,091,805
98.6%
148,343
1.4%
2015
10,379,941
10,188,421
98.2%
39,138
10,227,559
98.5%
152,382
1.5%
2016
10,487,319
10,254,720
97.8%
72,477
10,327,198
98.5%
160,121
1.5%
Source: Most of data has been derived from the "Annual Tax Receivable Summary" prepared by the King County Finance.
Note: These figures include tax adjustments such as omits, refunds, and senior citizen exempted property.
Federal Wav / 125
RATIO OF OUTSTANDING DEBT BY TYPE
For the Last Ten Fiscal Years
Fiscal
Year
Governmental
Activities
Business Type Activities
Total Primary
Government
% of Personal
Income (b)
Per Capita (b)
General Obligation
Bonds
Certificates of
Participation
Public Works
Trust Fund Loan
2007
19,605,000
-
1,757,112
21,362,112
0.122%
244
2008
19,138,000
-
1,574,753
20,712,753
0.134%
235
2009
29,212,950
-
1,392,394
30,605,344
0.090%
346
2010
28,683,950
-
1,210,035
29,893,985
0.091%
337
2011
28,157,950
-
1,027,676
29,185,626
0.091%
327
2012
27,616,950
-
845,317
28,462,267
0.093%
318
2013
27,016,400
-
662,958
27,679,358
0.097%
309
2014
34,703,360
-
480,600
35,183,960
0.058%
390
2015
33,656,660
-
384,481
34,041,141
0.080%
375
2016
35,725,560
-
288,361
36,013,921
0.076%
384
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 2005 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. 2008-2016
info for Federal Way is based on US Census Bureau, 2011-2015 American Community Survey five-year Estimates.
Citv of Federal Wav / 126
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE
AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
For the Last Ten Fiscal Years
Ratio of Net
(B)
(C)
Bonded Debt
Net Bonded
Fiscal
(A)
Assessed
Gross
Less Restricted
Net
To Assessed
Debt Per
Year
Population
Value
Bonded Debt
for Debt
Bonded Debt
Value
Capita
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
2014
90,147
8,375,702,226
35,183,960
2,136,390
33,047,570
0.0039
366.60
2015
90,764
8,905,294,058
34,041,141
2,283,702
31,757,439
0.0036
349.89
2016
93,670
9,489,437,470
36,013,921
2,508,514
33,505,407
0.0035
357.70
(A) Sources: State of Washington Office of Financial Management Population Estimates.
(B) The final certified Regular Levy assessed valuation of all taxable property by the King County
Assessor's Office for use in calculating levy rates for the following year's tax roll. The total
assessed valuation of $9,489,437,470 has been reduced by non-taxable of $69,213,179
to arrive at taxable assessed valuation of $9,420,224,291.
(C) Includes Public Works Trust Fund Loans issued in 2000 and Section 108 Loan issued in 2016;
general obligation bonds issued in 2009, 2013, and 2014.
Federal Wav / 127
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2016
(A) (B)
Gross General Percentage
Amount
Obligation Debt Applicable to
Applicable to
Jurisdiction Outstanding Federal Way
Federal Way
King County
$ 775,913,000
2.01%
$
15,618,959
Port of Seattle
283,620,000
2.01%
5,709,209
Federal Way School District #210
158,382,698
69.32%
109,796,514
Fire District # 39
34,080,000
62.76%
21,387,908
Library
98,720,000
3.52%
3,476,980
Total Overlapping Debt
1,350,715,698
155,989,571
CITY OF FEDERAL WAY
35,725,560
(C)
100.00%
35,725,560
Total Direct and Overlapping Debt $ 1,386,441,258 $
191 715 131
(A) Total general obligation bonds outstanding at the year end, exclusive of available cash in debt service funds,
proprietary -type debt, credit enhancement and hotel/motel debt. Source is King County Financial
Management.
(B) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to
valuation of property subject to taxation in reporting unit. Source is King County Assessor's Office
(C) Includes general obligation debt issued in 2009, 2013, 2014, and 2016.
Source is City of Federal Way Finance
Citv of Federal Wav / 128
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31, 2016
DESCRIPTION
General Debt Capacity
Excess Levy
Open Space
and Park
Excess Levy
Utility
Purposes
Total Debt
Capacity
(Limited)
Councilmanic
(Unlimited)
Excess Levy
Statutory debt limit:
2016 TAV=$9,420,224,291 A
1.50% AV @ 100%
$ 141,303,364
$ (141,303,364)
$ -
$ -
$ -
2.50% AV @ 100%
-
235,505,607
235,505,607
235,505,607
706,516,822
Add:
Cash reserved for
debt redemption (B)
2,508,514
-
-
-
2,508,514
Less:
I Bonds and COPs outstanding
35,725,560
-
I -
I -
35,725,560
Remaining Debt Capacity $ 108,086,319 $ 94,202,243 $ 235,505,607 $ 235,505,607 $ 673,299,776
Total Remaining
"General" Capacity
$202,288,562
(A) This figure represents the City's final total taxable assessed valuation (TAV) for 2016 which was used to determine
the 2017 property tax levy.
(B) Reflects debt service fund balance as of 12/31/2016.
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
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%
2014
623,929,441
(32,566,971)
591,362,470
5.22%
2015
663,674,591
(31,372,958)
632,301,633
4.73%
2016
706,516,822
(33,217,046)
673,299,776
4.70%
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.
Federal Wav / 129
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION
BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES NET OF DEBT SERVICE EXPENSE
Total General Ratio of Debt Service
Fiscal Total Debt Governmental to General Governmental
Year Principal Interest * Service Expenditures Expenditures
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%
2014
995,300
985,475
1,980,775
48,877,840
4.1%
2015
771,120
495,359
1,266,479
48,845,021
2.6%
2016
566,120
475,073
1,041,193
52,159,793
2.0%
Source: City of Federal Way Finance
Note: * Interest excludes bond issuance and debt registration costs.
Citv of Federal Wav / 130
DEMOGRAPHIC STATISTICS
Fiscal
Personal Income Per Capita Median
Education Level in Years
School
Unemployment
Year
Population Sea-Tac-Bel [D] Income [C] Age [C]
of Formal Schooling
Enrollment (A)
Rate (B)
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
199,243,414,000
26,740
34.9
13.0
21,554
7.4%
2014
90,147
213,700,152,000
20,481
35.1
13.0
21,772
6.2%
2015
90,764
227,827,122,000
27,145
35.7
13.0
21,979
5.3%
2016
93,670
N/A
27,483
35.7
13.0
21,673
4.9%
(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)
2016 information for Federal Way is based on 2011-2015 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 2016 not available. 2016 data for Personal Income to be published fall of 2017.
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.
Federal Wav / 131
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
2016
2007
Number of
Employees
Rank
% of Total City
Employment
Number of
Em to ees
Rank
% of Total City
Employment
St Francis Hospital
Medical Services
5,026
1
15.77%
744
3
2.51%
Federal Way Public Schools
Educational Services
2,242
2
7.03%
3,150
1
10.62%
World Vision Inc
Christian Relief Agency -Nonprofit
854
3
2.68%
596
6
2.01%
Wild Waves
Amusement Center
871
4
2.73%
639
4
2.15%
Us Postal Service - Bulk Mail
Postal Service
600
5
1.88%
626
5
2.11%
Wal-Mart
Retail
496
6
1.56%
225
10
0.76%
City Of Federal Way
Government Services
476
7
1.49%
440
7
1.48%
Davita
Health Services
456
8
1.43%
-
-
0.00%
Weyerhaeuser Company
Lumber Products
303
9
0.95%
2,412
2
8.13%
Virginia Mason Federal Way
Medical Services
253
10
0.79%
235
9
0.79%
Costco Wholesale Corporation
Wholesale
249
11
0.78%
293
8
0.99%
BergerABAM Inc
Engineering/Architectural
227
12
0.71%
116
32
0.39%
Fred Meyer
Retail
224
13
0.70%
195
14
0.66%
Homestreet Bank
Banking
200
14
0.63%
-
-
0.00%
Hallmark Manor
Retirement Home
195
15
0.61 %
-
-
0.00%
Sears Roebuck & Company
Retail
75
58
0.24%
205
11
0.69%
Home Depost
Retail
151
23
0.47%
202
12
0.68%
Prudential NW Realty Assoc. Inc.
Real Estate
-
-
0.00%
200
13
0.67%
Winco Foods
Retail
150
25
0.47%
178
15
0.60%
Source: City of Federal Way Business License
Note: Principal Employers - includes both full-time and art -time employees.
ON of Federal Wav / 132
PROPERTY VALUE AND CONSTRUCTION
Commercial Construction (A)
Residential Construction (A)
Multi -Family Construction (A)
Year
Permits
Value
(In Thousands)
Permits
Value
(In Thousands)
Permits
Value
(In Thousands)
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
2014
220
35,923
359
30,923
53
61,511
2015
181
73,654
343
20,341
109
104,115
2016
172
18,547
292
19,804
80
18,667
Sources & Notes:
(A) Federal Way Community & Economic Development Department. Commercial construction includes alterations.
Other building -related permits (plumbing, mechanical, fire alarm, etc.) numbering 3,973
and valued at $7,695,930 have been excluded.
Federal Wav / 133
CAPITAL ASSETS BY FUNCTION
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Transportation
Street (Center Line Miles)
233.84
234.72
234.72
242.90
248.23
248.23
249.25
249.25
249.25
249.25
Signals WSDOT-owned and maintained
5
5
5
5
5
6
6
6
6
6
Signals City -owned & County -maintained
74
76
76
76
76
77
77
77
77
80
Street lights City -owned and maintained
1,214
1,463
1,467
1,509
1,554
1,618
1,705
1,728
1,728
1,785
Street lights City -owned and PSE-maintain
644
644
644
644
644
644
644
644
644
644
Street lights PSE-owned and maintained
1,975
1,975
1,975
1,975
1,975
1,975
1,975
1,978
1,980
1,983
Culture & Recreation
Developed Parks - Acreage
524.49
524.49
524.49
524.49
524.49
579.86
579.86
588.99
588.99
588.99
Developed Parks - # of Parks
32
32
32
32
32
29
29
30
30
32
Undeveloped Parks - Acreage
543.46
551.12
551.12
551.12
551.12
539.43
539.43
539.43
539.43
539.43
Undeveloped Parks - # of Parks
21
22
22
22
22
22
22
22
22
22
Tennis Courts City -Owned
11
11
11
11
11
9
9
9
9
9
Tennis Courts - Public
22
22
22
22
22
25
25
25
25
22
Swimming Pools City -Owned
1
1
1
1
1
2
2
2
2
2
Swimming Pools County -Owned
1
1
1
1
1
3
3
3
3
3
Trails - Miles
6
6
6
6
6
9
9
9
9
9
Trails -# of Trails
2
3
3
3
3
6
6
6
6
6
Community Centers/Recreation Facilities
2
1
1
1
1
1
1
2
2
3
Source: City of Federal Way Public Works and Parks Department
Citv of Federal Wav / 134
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
SECURITY OF PERSONS & PROPERTY
Offenses:
Forcible Rape (including attempts)
48
30
51
50
38
48
35
70
47
46
Robbery
129
170
198
152
119
107
107
135
152
191
Criminal Homicide
3
10
5
5
4
3
6
4
4
9
Aggravated Assault
107
115
115
118
99
150
133
148
178
209
Vehicle Theft
939
816
561
741
694
800
778
869
762
1,080
Burglary (commercial & residential)
739
800
741
828
752
931
801
816
635
645
Larceny
3,159
2,933
3,231
3,141
3,067
3,409
3,571
3,912
3,701
4,225
Arson
18
13
13
11
11
9
7
13
14
18
Citations:
Traffic
14,043
19,339
20,678
18,094
17,226
13,023
17,558
13,705
15,466
1,602
Red Light Photo
-
3,813
13,002
25,691
15,340
13,455
24,454
24,750
29,812
33,626
ECONOMIC ENVIRONMENT
Building Related Permits & Values
Building Permits
791
605
483
545
482
598
662
632
633
544
Estimated Value (In Millions $)
$ 127
$ 89
$ 79
$ 53
$ 33
$ 58
$ 62
$ 128
$ 198
$ 57
Other Building Related Permits
2,690
2,370
2,209
2,423
2,385
2,960
3,827
3,722
3,868
3,429
Estimated Value (In Millions $)
$ 6
$ 7
$ 6
$ 6
$ 6
$ 5
$ 6
$ 7
$ 8
$ 8
Source: City of Federal Way Police Department and Community Development Department
Federal Wav / 135
CITY GOVERNMENT EMPLOYEES FULL-TIME EQUIVALENT - HISTORY
Department 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Mayor's Office
10.00
9.75
7.63
7.63
5.00
3.00
3.50
6.00
8.00
12.34
Administration
5.50
5.25
3.13
3.13
4.00
3.00
3.00
5.00
6.00
6.34
Economic Development
1.50
1.50
1.50
1.50
-
-
0.50
1.00
1.00
1.00
Performing Arts & Event Cente
-
-
-
-
-
-
1.00
5.00
Government Affairs
3.00
3.00
3.00
3.00
-
-
-
Human Services
-
-
-
-
1.00
-
-
-
-
-
City Council
3.50
3.50
3.50
4.50
4.50
3.85
4.15
4.15
4.20
4.20
Municipal Court
14.00
14.00
13.00
13.00
13.00
13.00
13.00
13.00
13.00
16.00
Human Resources
5.00
5.25
5.25
5.25
4.50
4.50
4.50
5.13
5.75
6.00
City Clerk
1.50
1.75
1.75
1.75
1.75
1.75
1.75
1.88
2.50
2.50
Human Resources
3.50
3.50
3.50
3.50
2.75
2.75
2.75
3.25
3.25
3.50
Finance
9.50
8.00
7.60
7.60
7.00
7.00
6.00
7.00
8.00
8.00
Administration
1.50
-
-
-
-
-
-
-
-
Finance
8.00
8.00
7.60
7.60
7.00
7.00
6.00
7.00
8.00
8.00
Information System
10.60
10.60
10.00
9.60
7.00
7.00
7.00
6.00
7.00
7.00
Law
13.00
13.00
12.00
12.00
11.00
11.00
12.00
12.00
12.50
12.50
Civil Legal Services
5.80
5.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
4.80
Criminal Prosecution Services
7.20
7.20
7.20
7.20
6.20
6.20
7.20
7.20
7.70
7.70
Community & Econ Developmei
30.49
32.00
30.00
28.90
19.00
21.65
21.85
26.25
26.70
26.70
Administration
4.50
4.50
5.00
5.00
3.50
3.50
3.50
3.90
3.90
3.90
Planning
8.75
8.75
8.00
7.00
6.00
6.00
6.00
7.00
7.00
6.00
Building
13.25
14.25
13.00
13.00
9.00
9.00
10.00
12.00
12.00
13.00
Human Services
3.00
3.50
3.00
3.00
-
2.65
2.35
3.35
3.80
3.80
Neighborhood Development
1.00
1.00
1.00
0.90
-
-
-
-
-
-
Economic Development
-
-
-
-
0.50
0.50
-
-
-
-
Police
169.00
169.00
164.00
161.00
135.00
132.00
145.00
146.00
160.00
160.00
Administration
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
2.00
Support Services
61.00
61.00
61.00
58.00
51.00
52.00
55.00
56.00
57.00
55.00
Field Operations
105.00
105.00
100.00
100.00
81.00
77.00
87.00
87.00
100.00
103.00
Parks, Rec. & Cultural Svcs.
44.25
44.25
39.75
39.75
36.45
36.45
35.45
35.90
34.80
37.46
Administration
1.80
2.80
1.35
1.35
1.35
1.35
1.35
1.80
1.80
1.80
Planning
1.00
-
-
-
-
-
-
-
Kenneth Jones Pool
-
-
-
-
-
-
-
-
General Recreation
7.10
7.10
4.80
4.80
5.50
5.50
5.50
5.50
5.50
5.83
Community Center
12.35
12.35
13.35
13.35
13.35
13.35
13.35
13.35
11.00
11.33
Dumas Bay Centre
3.00
2.75
2.75
2.75
2.75
2.75
2.75
2.75
3.00
3.00
Knutzen Family Theatre
1.50
1.75
-
-
-
-
-
-
-
Parks Maintenance
17.00
17.00
17.00
17.00
13.00
13.00
12.50
12.50
13.50
15.50
Building
0.50
0.50
0.50
0.50
0.50
0.50
-
-
-
-
Public Works
44.00
44.00
42.95
41.95
38.95
38.95
39.95
38.95
44.00
43.00
Administration
1.85
1.85
2.35
2.35
2.25
2.20
2.25
2.25
2.75
2.75
Development Services
6.45
6.45
4.45
4.45
4.20
4.20
3.70
3.70
2.20
2.20
Traffic Services
6.10
6.10
6.10
5.10
2.35
2.35
3.85
3.85
4.35
4.35
Street Services
11.50
11.00
10.50
10.50
10.60
10.60
10.60
10.60
11.60
11.60
Emergency Management
1.00
1.00
1.00
1.00
1.00
1.00
1.00
-
-
-
Solid Waste & Recycling
1.70
1.70
1.70
1.70
1.70
1.70
1.70
1.70
2.20
2.20
Surface Water Management
15.40
15.40
16.35
16.35
16.35
16.40
16.35
16.35
20.40
19.40
Fleet & Equipment
-
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
Total 353.34 353.35 335.68 331.18 281.40 278.40 292.40 300.38 323.95 333.20
ce: City ofFederal Way Finance Division
Fle does NOT include 1-time positions or frozen positions
Citv of Federal Wav / 136
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
DECEMBER 31, 2016
LEGISLATIVE BODY
POSITION EMPLOYEE ANNUAL SALARY
MAYOR
JIM FERRELL
$119,088
DEPUTY MAYOR
JEANNE BURBIDGE
$14,214
COUNCIL MEMBERS
LYDIA ASSEFA-DAWSON
$14,214
MARK KOPPANG
$14,214
SUSAN HONDA
$14,214
BOB CELSKI
$14,214
MARTIN MOORE
$14,214
DINI DUCLOS
$14,214
ADMINISTRATIVE STAFF
POSITION EMPLOYEE ANNUAL SALARY
FINANCE DIRECTOR
ADE ARIWOOLA
$150,864
CITY ATTORNEY
VACANT
$142,176
CITY CLERK
STEPHANIE COURTNEY
$98,124
ECONOMIC DEVELOPMENT DIRECTOR
TIM JOHNSON
$144,240
PARKS DIRECTOR
JOHN HUTTON
$140,112
COMMUNITY DEVELOPMENT DIRECTOR
BRIAN DAVIS
$150,000
PUBLIC WORKS DIRECTOR
MARWAN SALLOUM
$152,472
POLICE CHIEF
ANDY HWANG
$164,292
Source: City of Federal Way Human Resources
NOTE: In accordance with Ordinance 90-016, individual fidelity coverage of not less than $50,000 exists for the
Mayor, Finance Director, City Clerk, Police Chief, and Judge.
Federal Wav / 137
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 Emergencv Medical Response information reflects the greater Federal Wav area. which is served by South King Fire & Rescue.
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fire and Other Responses
639
1,083
1,147
1,041
934
1,363
968
999
1,148
1,019
Emergency Medical
11,350
12,058
11,077
11,460
11,914
12,571
12,950
13,847
14,193
16,144
PUBLIC EDUCATION
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
23
Elementary Schools
9,612
9,594
9,594
9,560
9,673
9,229
9,777
10,054
10,253
10,498
7
Middle Schools (incl. Public Academy)
5,139
5,234
5,203
5,235
5,205
5,041
5,050
5,034
5,209
5,183
5
High Schools
6,720
6,531
6,637
6,547
6,409
6,018
6,341
6,299
6,166
5,582
5
1 Alternative\Internet Academy K-12
304
263
266
288
321
377
386
385
351
412
Total 21,775 21,622 21,700 21,630 21,608 20,665 21,554 21,772 21,979 21,673
3,485 Staff members
TAXABLE SALES (in millions) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Retail Sales
$1,540
$1,458
$1,257
$1,261
$1,277
$1,239
$1,355
$1,432
$1,564
$1,673
Real Estate Sales
$963
$536
$208
$238
$315
$303
$399
$418
$599
$1,062
Source: South King County Fire and Rescue
Federal Way Public Schoa
City of Federal Way Finance Divisior
Citv ofFederal Wav / 138
PRINCIPAL TAXPAYERS -SALES TAXES
Current Year and Nine Years Ago
2016
2007
Sales Tax
% of Total City
Sales Tax
Sales Taxes
% of Total City Sales
Received
Sector
Location
Rank
Received
Received
Sector
Location
Rank
Taxes Received
$ 724,073
General Merchandise Sores -
S 348th St
1
5.08 %
$ 76Q022
General Merchandise Stores -
S 312th & S 316th
1
5.85%
Wholesale Grocery& Other
Gmce &Other
699,511
Merchandise Stores -
S 312th & S 316th
2
4.91%
647,670
General Merchandise Stores -
S 348th St
2
4.99%
'Gene
Groce &Other
Wholesale Gmc & Other
405,157
Building Material & Garden
S 348th St
3
2.84%
371,978
Building Material & Garden
S 348th St
3
2.87%
E ui ment & Supplies
Equipment & Supplies
320,508
Motor Vehicle and Parts Dealers
S 348th St
4
2.25%
307,470
General Merchandise Stores -
Commons
4
2.37%
Clothing, Household, & Other
301,665
General Merchandise Stores - Grocery
Twin Lakes
5
2.12%
273,023
Electronics and Appliance Stores
Pavillion
5
2.10%
& Other
273,885
Construction of Buildings
Other
6
1.92%
263,665
General Merchandise Stores - Grocery
Twin Lakes
6
2.03%
& Other
267,529
General Merchandise Stores -
Commons
7
1.88%
258,795
Building Material & Garden
S 348th St
7
1.99%
Clothin ,Household, & Other
Equipment & Supplies
222,670
Building Material & Garden
S 348th St
8
1.56%
240,177
Motor Vehicle and Parts Dealers
S 348th St
8
1.85%
E ui ment & Su lies
212,446
Construction of Buildings
Other
9
1.49%
182,242
General Merchandise Stores - Tools,
Commons
9
1.40%
Equipment, Clothin & Other
204,311
Electronics and Appliance Stores
Pavillion
10
1.43%
181,095
General Merchandise Stores -
Commons
10
1.40%
Clothing, Household, & Other
3,631,753
25.50%
$ 3,486,135
26.85°
Source: Washington State Department of Revenue
Note: It is illegal to disclose specific taxpayer sales tax information. The above information is being provided without identification.
The City received $14.2M in sales and use tax in 2016 and $13.05M in 2007.