Federal Way budget: Expect changes in property tax rates

The Federal Way City Council held its first public hearing Nov. 6 on the proposed 2013-14 budget.

No members of the public signed up to comment, but city finance director Tho Krause gave a presentation on the issues facing the city and its budget in the next few years.

Krause started with a wide-angle view of the budget, reviewing overall revenues and expenses for the city as a whole.

• The ongoing budget revenue is $52.6 million. The utility tax, sales tax and property tax account for 61 percent of total ongoing revenue, Krause said.

• Ongoing expenditures total $48.2 million. About 53 percent of that budget is for public safety, which includes police, jail, prosecutors, the public defender and the courts, Krause said.

• Krause noted that sales tax revenues are expected to increase by 1 percent for both 2013 and 2014, and increase by 2 percent for 2015 and 2016.

Another issue that Krause touched on was closing the projected budget shortfalls for the 2013-14 budget. Federal Way had been able to close those operating gaps for the 2013-14 budget, thanks to city policy. In each year, what were originally projected operating gaps of approximately $1.1 million for 2013 and approximately $2.2 million for 2014, were able to be closed, according to Krause.

It appears the city will be facing the same problem in 2015-16, Krause said.

“For a long-term projection, going into 2015, we have an operating gap of almost $3 million, and a deficit ending fund balance of $530,000. Going into 2016, our operating gap is $3.16 million, and leaves us with a deficit ending fund balance of $3.7 million,” she said.

Another area that could see some changes in the near future is the property tax rate the city levies on citizens, Krause said.

“Our city levy rate is $1.60 (per $1,000 of assessed value). The 2013 preliminary assessed evaluation is down eight percent, or $612 million from the 2012 assessed value of $7.68 billion,” Krause said. “As assessed valuation decreases, the levy rate increases. The proposed levy rate, the preliminary rate, is $1.43 per $1,000 of assessed value.”

At the rate of $1.30 per $1,000, Krause said the average homeowner in Federal Way with a home valued at $250,000 currently pays approximately $325 a year. At the higher rate of $1.43 per $1,000, that total will increase to $328 per year.

Councilmember Linda Kochmar asked where Federal Way ranked against the other cities in King County, in terms of revenue. Krause said Federal Way is 30th of the 38 cities in King County when it comes to revenue.

The next public hearing on the budget is scheduled for the November 20 city council meeting. To learn more about the budget, visit


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