In the PNW coyotes are habituated to living around but not with people, out here in the suburbs like Redmond WA I have seen 4-5 coyotes all trotting together on a city street, disappearing into the green belt. In our area they are known to dine on rodents and rabbits (also released into the wild in large numbers by people), cats and the very occasional small dog. Locally there are plenty of rabbits I think they tend not to track or eat dogs so much, but cats are just an abundant opportunity, they'll take them if they see them and are hungry, and someone is always a little hungry in a coyote pack. Folks report seeing lots of rabbit skeletons in the woods, they are commonly hunted by every predator out there, from cats to coyotes. I have also seen a few mountain beaver carcasses which I would blame on the coyotes - I feel sorry for that, there has been so much development in the suburban margins that its a hard life for the mountain beaver already from human influx into their environment.

People - I would be very surprised if we have anything to worry about as long as game is abundant. I have never heard of coyotes luring their prey into an attack. Coyotes are always trotting perpendicular if not away from me. It could be the one you saw sitting was watching or standing some sort of guard from the edge of their territory, and his likely response if you approached would be to alert other coyotes to your advance, and their retreat.