08-11-2015 2014 CAFR2014 CAFR PRESENTATION
2014
Comprehensive
Annual Financial
Report (CAFR)
City Council Meeting
August 11, 2015
Ade Ariwoola
Finance Director
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Major Highlights of The Report
• Transmittal Letter
• Auditor's Opinion
• Government -wide Financial Statements
• General Fund
• Notes and Statistical Sections
Transmittal Letter
Page 4
• City's books are audited annually
• Single Audit Act of 1984 and Related
OMB Circular A -133
• Additional requirements from GFOA
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A Certificate of Achievement is valid for a period of one year
City of /Federal Way 4
INDEPENDENT AUDIT
State law requires an annual audit of all City books of account. financial records, and transactions by the State Auditor.
an independently elected state official. In addition to meeting the requirements set forth under state law. the audit was
also designed to meet the requirements of the Federal Singly Audit Act of 1984 and related OMB Circular A -I 33. TI>c 21114
audit of the Cih 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 2011: which is the 25th
consecutive year receiving a clean audit. The State Auditor's report on the basic financial statements is included in the
financial section of this tenon.
AWARDS
December 31. 2013. The City of Federal Was has received a Certificate or Achievement for Mc
last twenty -four years (fiscal years ended 1990 — 2013). In order to be awarded a Certificate of Achievement. a government
must publish an easily readable and efficiemh• organiral comprehensive annual financial report. This report tnust
satisfy both generally accepted accounting principles and applicable legal requirements.
The City of Federal Way also received the Government Finance Officers Association Distinguished Budget
Presentation Award for its biennial budget for the years beginning lanai 1, 2013 and 2014. In order to receive this award, a
governmental unit must publish a budget document that meets program criteria as a policy document a financial plan. an
operations guide, and a communications medium.
ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the efficient and dedicated sen•ices of the entire staff of
the finance depamnent. In addition. suds in all City depamnents should be recognized for responding so positively to
the requests for detailed infonnation which accompany each audit. A special note of thanks is given to Chase
Donnelly. Accounting Supervisor who scnved 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.
Auditor's Opinion
•Responsibilities - Page 9
• Management responsibilities
• Auditor's responsibilities
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olY:Jar�d II'ur 9
Washington State Auditor's Office
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance ��ith 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.
Auditor's Opinion Continued
• First of THREE Reports
• Report on Audit of Financial
Statements
• Report on Accountability Audit
• Report on Single Audit
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In our opinion, the financial statements referred to above present fairly, in all material respects, tlx
respective financial position of the governmental activities, the business -type activities, each major amd
and the aggregate remaining fund information of the City of Federal Way, King Couii , \'ashington, as
of December 31, 2014, and the respective changes in financial position and, where applicable, cash flows
thereof, and the respective budgetan' comparison for the General, Street and Utility Tax finds for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Auditor's Opinion Continued
•Auditor's opinion on financial
statements - Page 10
• Unqualified opinion (Clean Audit)
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City of Federal Wa'10
Opinion
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Government -Wide
Financial Statement
• City as a conglomerate of companies
• Statement of Net Position (Balance Sheet)
• Statement of Activities (Income Statement)
City of Federal Way
General Fund
Traffic Safety
Fund
Arterial Street
Fund
Street Fund
Solid Waste and
Recycling Fund
Hotel /Motel
Lodging Tax Fund
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12
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Statement of Net Position
• Page 27 (Like Balance Sheet)
Assets - Liabilities = Equity
• Cash and Cash Equivalent and Investments
• Restricted Assets
• Noncurrent Liabilities
• Restricted Net Position
• Unrestricted Net Position
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City t f Iedera/ Way
STATEMENT OF NET POSITION
December 31, 2014
Governmental Business -type
Activities Activities
ASSETS
Total
Cash & cash equivalents and investments S 68.235.688 $ 7.241.528 $ 75.477,216
Receivables( net) 2.342.820 155.402 2.498.222
Due from other governments 2.419.409 390.896 2.810.305
Prepaid items 30.588 30.588
Restricted assets:
Seizure funds/petty cash/advance travel /retainage 134.354 134.354
Investment in joint venutre 21.981 068 21.985 068
Capital assets not being depreciated:
Land 312.907.345 10.933.528 323.840.873
Construction in progress 22.875.804 3.390.815 26.266.619
Capital assets net of accumulated depreciation:
Buildings/structures 9.048.779 470.054 9.518.833
Improvements other than buildings 22.865.130 6631.713 29.496.843
Machinery and equipment 4.814.797 22.379 4.837.176
Infrastructure 113.978.317 29.331.337 143.309.653
Total Assets 581.638.099 58.567.653 640.205.752
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City of Federal Way 2
STATEMENT OF NET POSITION
December 31, 2014
Governmental Business -type
Activities Activities Total
LIABILITIES
Accounts payable and accruals 1.589.376 60,368 1,649,744
Unearned revenue 280.206 359,007 639,212
Retainage payable 206.323 38,288 244,611
Customer deposits 1.323,636 5.564 1.329,200
Noncurrent Liabilities:
Due within one year 1,168,423
Due in mom than one year 35.76 3.655
Total Liabilities
40.3 31.618
187.962
377,521
1.028.710
1356.385
36.141,176
41,360.328
City of Federal War
STATEMENT OF NET POSITION
December 31, 2014
Governmental Business -type
Activities Activities
TotaI
NET POSITION
Net investment in capital assets 466.078.036 50.299,229 516.377.265
Restricted for:
Debt service 2.136.390
Capital projects 14.062.918
Steel Lake & North Lake Mgmt District 20.311
Other 1.191.964 -
Unrestricted 57.837.173 7.219.403
2.136,390
14.062.918
20.311
1.191,964
65.056.576
Total Net Position $ 541.306.481 $ 57.5 38943 $ 598.845.424
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Statement of Activities
• Page 28 (Like Income Statement)
Revenues - Expenses = Profit
• Change in Net Position
• Net Position at the end of the year
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City of Federal Way ' 28
STATEMENT OF ACTIVITIES
For the Year ended December 31. 2014
Program Revenues Net (Expense) Revenue & Changes in Net Position
Operating Capital
Charges for Grants and Grants and Govemmeutal Business -ripe
Expenses Services Contributions Contributions Actisities Activities Total
Funclions.Prognms
Total governmental activities 59.444.335 14.402.062 5,410,098 5. 632.549 (33.999.625) (33.999.625)
Total business- type ectivilies 4.599,703 4.174,613 607.608 182.517 182.517
Total 564.044.038 S 18,576.675 S 6,017.706 S 5.632.549 (33.999.625) 182.517 (33.817.108)
Total general revenues and transfers 40.197.580 138.507 40.336,087
Change in net position 6,197,955 321,025 6.518,979
Net position at beginning of year 540,052.936 57.217,919 597.270.854
Prior period adjusunent (See Note 15) (4,944.409) (4.944,409)
Adjusted beginning netpusition 535.108,526 57.217,919 592,326.445
Net position at end of year S541.306.481 557.538.943 S 598.845.424
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General Fund
• Balance Sheet Page 29
• Equity in Pooled Cash & Investments
• Restricted Cash
• Total Assets
• Total Liabilities
• Unassigned Fund Balance
• Total Fund Balance
ref /.., tie rer; YVcry :' 29
11AI_.ANCI? SHEET
411O%'1 ?12NNlEN'1'A1, Ft,NI)S
I)ceentber 31. 2014
Gan erul
SSI:TS
Equity in pot lud eush C+, investments $ 15,313_366
prupuid in c.'dcl,t sersiee 25.588
Receivables (net),
Taxes 260.394
Accounts and contructs 42,450
Restricted cosh 134.354
Dun from other $nvenintents 1.562,928
In terfund loans recci vublc 10,000
TT/TAT. ASSETS 17.349.080
Tr ITA 1. 1 :I A 1311 ,11'1 E S 1,073.723
1)ICFl. :12121. :11 INFLOW'S OF 121 {SOl '12(710 2.10.939
Fund Bulancc:
Nast spendublc 105.417
Restricted 54.526
Coast in inert 3.403.937
Unassigned d 12,480.539
'f(> "fAI. 1-1JNI) I3AI _ANC ES 16,044,418
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General Fund Continued
• Statement of Revenues, Expenditures and Changes
in Fund Balance (Income Statement)
• Page 34
• Variance With Final Budget (Staying within Council's Guidelines)
• Excess (Deficiency) of Revenues (Under) Expenditures
• Total other Financing Sources
• Net Change in Fund Balance (Net Income for The Period)
• Fund Balance
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('ii• of Federal Way 34
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31.2014
RFVFNI IFS
TOTAL REVENUES
EXPENDITURES
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Variance with
I ludgcted Amounts Final Budget -
Positiee
1) iguud Final Actual Amounts (Ncgatis 0)
20.778.801 32.407.039 35.107,827 2.700.788
39,822.081 43.820089 42,181,473 L638,616
(10.043.19))) 111 ,413.050) 171)73.646) 4.339.404
6,266,911 6.689,586 6.977.477 287,891
(3,776,279) (4.723.464) (96.169) 4.627.295
6.276.742 16. 1411_>k? 16.140.587 -
$ 2,500.463 $ I I .J I __ 12_ 1 5 16,044.411) y 4 <;27.295
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Notes
• The Notes after the Financial Statement
explain part of the statement. To fully
understand the report, the Notes should be
read in addition to the Statement.
• Outstanding General Obligation
Debt Activity - Page 68
• Debt Capacity - Page 69
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City of Federal Way 68
OUTSTANDING G01 }RAL OBLIGATION DE]IT A.(-D I.OVGTFRht I-L2BII.ITIES - BY TYPE
DFX'IOIBER 3l, 2014
Description
Maturity
Dale
Interest
Rue
.Amount
Originally
Issued
Beginning
Oulstandag
Debt
Amount
ksued
Ending
Amount
Oatstandng
Redeemed Debt
Governmental Aetis Wes:
General Obligation Bonds:
A) 2014KevBank Bond Anticipation Nolo t
B) 2013 Refund Ud;Conanunly Center 3
Dee 01, 17
lhx 0133
L51
267
S -
12,415.000
S -
12250.00()
S 8.209,960
-
S - 5 8,209.991
415,()00 11.805.001
Subtotal GO Bonds:
-
-
12415.10(1
122'0,0331
8209.960
445.001 20.014,96)
Otherhliscelaneous Debt - Intergovernmental:
C12010 limited/Valley Conan PDA3
D) 2009 SCORESpecial Obligation Sone
Dec 01, 15
.Jan 01, 39
3.10.4.0)
3.00.6.62
1,065.000
15,522300
4320011
11826.601
-
-
21200 22(10 00
352200 14,468.40)
Subtotal niscebneous:
-
-
16,587.300
15,25 2,600
-
570,200 14.688.40)
Subtotal UT Bonds plus Misc.
Compensated absences
-
-
29.002310
27,50800)
1377,612
8209,960
2014,302
1,015,200 31.703 360
1,760,373 1,831541
Subtotal GO bonds. misc. &comp absences:
-
-
29,002300
29,086212
10.224,262
2.775.573 36334.901
Business -Type Activities:
Subtotal PN THT.
-
-
10310.440
662,958
-
182358 40160)
Grand Total All long -Term Debt:
-
- S 33,032,740
8 29,820,903
5 10,322,071
S 3,042,581 537,100,393
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('m u) / ed<•r<d IJ n 69
SCI 'EMILE OF DEBT SERVICE
REQUIREMENTS TO MATURITY AS
OFDECEMBER 31, 2014
Government. Activities
_C_:eneral Cove Debt
-
Year
Principal'_._._.._____
Interest
2015
S 1,046,70)
S 1,089,68')
2016 .
856,100
1,051,845
2017
9,098,160
1,020,026
2018
915,800
867,368
2019
944,300
838,854
2020
973,7(.X)
809,452
2021 -2025
5,490,100
3,476,236
2026 -2030
6,541,800
2,484,798
2031 -2035
6,161,900
1,230,6(16
2036 -2039
2674,800
233,30
Total
S 34,703,360
S 13,102,180
Computation of Legal Debt Margin
Under Washington State law (RCW 39.36.020). a City may incur general obligation debt for general city purposes in an
amount not to exceed 2'L percent of the value of all taxable properh within the City.
The City Council may. by ordinance. authorize the issuance of limited tax general obligation debt in an amount up
to l.5% of the Valuation tt iihin the City without a cote of the pcopk.
(ieneml government (no cote required)
General government (3/5 majority cote required)
$ 92.631,358
83,190,592
Other Individual Funds
• Pages 85 -95
Statistical Section
• Page 111 -133
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City of Federal Way i 85
ARTERIAL STREET
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
For Year Ended December 31, 2014
TOTAL REVENUES
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual Amounts (Negative)
488,500 488,500 516,346 27,846
TOTAL EXPENDITURES 1,536,500 1,696,031 11415,171 280,860
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,048,000) (1,207,531) (898,825) 308,706
I'OIAL OIHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
1,048,000 1,048,000 1,048,000
(159,531) 149,175 308,706
City of Federal Way / 127
PRINCIPAL EMPLOYERS
Current Year
Taxpayer Type of Business
2014
Number of % of Total City
Employees Rank Employment
Federal Way Public Schools Educational Services
Xerox Commerical Services LLC Business Services
Weyerhaeuser Company Lumber Products
St Francis Hospital Medical Services
Wild Waves Amusement Center
World Vision Inc Christian Relief Agency - Nonprofit
Us Postal Service - Bulk Mail Postal Service
City Of Federal Way Government Servicm
Wal -Mart Retail
Davila Health Services
Costco Wholesale Corporation Wholesale
Virginia Mason Federal Way Medical Services
BergerABAM Inc Engineering /Architectural
Fred Meyer Retail
Garden Terrace Alzheimer's Center Retail
Source: City of Federal Way Business License
Note: Principal Employers - includes both full -time and part -time employees.
2,147 1 7.50° -e
1,350 2 4.71%
1.147 3 4.00%
1,032 4 3.60%
871 5 3.04%
852 6 2.97 °ro
616 7 2.15%
505 8 1.76%
484 9 1.69%
318 10 1.11°0
284 11 0.99°0
253 12 0.88%
234 13 0.82%
224 14 0.78%
175 15 0.61%
Summary
• The City performed as planned in the budget
• The economy is improving and performing as planned
• The Washington State Auditor's Office Audit Opinion is
UNQUALIFIED
• The Ending Fund Balance was as planned
• The City has adequate cash to run its day to day
operations pending the intermittent revenue
• City is still within its debt capacity
QUESTIONS
29
30
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31
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