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FHSRAC PKT 02-27-2007 Archive City of Federal Way City Council Finance/Human Services/Regional Affairs Committee Tuesday, February 27, 2007 5:30 p.m. AGENDA 1. CALL TO ORDER 2. PUBUC COMMENT 3. COMMmEE BUSINESS A. Approval of Minutes from January 23, 2007 B. Legislative Affairs Update C. "Overhire" Combo Electrical/Building Inspector D. AWC Worker's Compensation Retro Program E. Assistant City Manager & Police Chief 401 Governmental Money Purchase Plan F. Organizational Capacity Building Project - Update on Agency's Progress G. Report on the King County" Coordinated Special Needs Transportation Plan for Fiscal Year 2007 , H. Acceptance of the 2007-2008 Proposed Use of One-Time Human Services General Funds 1. Report on Severe Weather Shelters J. New Community Center Budget Update K. Carry-Forward Budget Adjustment L. December 2006 Monthly Financial Report M. Vouchers 4. OTHER 5. FUTURE AGENDA ITEMS 6. NEXT MEETING: March 27, 2007 5:30 PM City Hall Hylebos Conference Room Kelsey Action Levy Information McClung Action McDougal Action McDougal Action Allen-Mpyisi Information Allen-Mpyisi Information Allen-Mpyisi Action O'Donnell Information Sanders Information Kraus Action Kraus Action Kraus Action Committee Members: Unda Kachmar, Chair Jeanne Burbidge Jack Dovey City Staff: Iwen Wang, Management Services Director Krystal Kelsey, Deputy City Oerk 253-835-2541 K: \FHSRAC\2007\February\2- 27 -07 Agenda .doc City of Federal Way City Council Finance/Human Services/Regional Affairs Committee Tuesday, January 23, 2007 5:00 p.m. ***SPECIAL TIME*** City Hall Hylebos Conference Room MINUTES Committee Members in Attendance: Chair Linda Kochmar and Member Jeanne Burbidge; Jack Dovey, excused. Staff Members in Attendance: City Manager Neal Beets, Assistant City Manager Derek Matheson, Management Services Director Iwen Wang, Finance Manager Tho Kraus, City Attorney Pat Richardson, Deputy City Attorney Aaron Walls, CDBG Coordinator Kelli O'Donnell; and Deputy' City Clerk Krystal Kelsey. Others in Attendance:' Doug Levy, Lobbyist, via conference call. 1. CALL TO ORDER - Chair Kochmar called the meeting to order at 5: 10 PM. MOTION: Motion to move item "B - Congressional and Legislative Update" to follow item "C - Vouchers" to allow Legislative Lobbyist Levy an opportunity to join the meeting via a conference call. The motion was seconded and carried unanimously. 2.' PUBLIC COMMENT - None. 3. COMMITTEE BUSINESS: a. Approval of Minutes - The Committee m/s/c to approve the minutes of the November 28, 2006 meeting as presented. c. Vouchers - Ms. Kraus presented the vouchers. There were no questions. The Committee m/s/c to approve the vouchers as presented and forward approval to the February 6, 2006 City Council Consent Agenda. b. Congressional and Legislative Update - Mr. Doug Levy gave the update via conference call and noted several Senate and House bills important to the City including: SB 5089/HB 1072 - Streamlined Sales Tax: This bill Conforms Washington's tax structure to the streamlined sales and use tax agreement. Mr. Levy noted that the Senate moved this bill out of Committee; the House Finance Committee hearing was held earlier today and the topic was well received. SB 5116/HB 1276 - Tourism Related: This bill creates a public-private tourism partnership. The Senate hearing was held earlier today. This bill creates new revenue for tourism and sets up local competitive state funds for events that can prove new tOurism draws. The Committee inquired if this bill would reverse the Attorney General's opinion regarding expenditure of Lodging Tax funds for event grants. Mr. Levy answered that this bill does not address that topic, instead focusing on competitive grants for tourism generating events/festivals. SB 5647/HB 1342 - Tourism Grant Expenditures: This bill allows the use of existing lodging tax revenues for tourism promotion, including events and festivals. FH5RAC February 27,2007 Agenda Item A Page 1 of 3 SB 5038/HB 1001 - Combating Auto Theft: This bill stiffens penalties for auto theft. The bill is moving well, although there are some problems. The bill originally used insurance fee-based funding; insurance companies are unhappy with this fee funding proposal. Transportation: The Legislature is currently in a fact-finding mode to determine how to keep projects in tact. It appears at this point that there are no plans to change the Triangle Project. SB 5282/HB 1396 - RTID Be. Sound Transit: This bill provides a single ballot proposition for regional transportation investment districts and regional transit authorities at the 2007 general election. . Hearings are scheduled for the week of January 29. SB 5207 - Freight Transportation: The purpose of this bill is to create and fund the freight congestion relief account for the purpose of improving freight rail systems and state highways used as freight corridors through imposing a fee on the processing of shipping containers. This bill could benefit the Triangle Project. A hearing will be held on January 24 at 1:30 p.m. Budget: Representative Miloscia signed off on the City's capital budget request; Senator Eide sent a letter to her Committee requesting $1.1 million for the City's Camp Kilworth budget request. In addition, Senator Eide fielded questions about Camp Kilworth from other groups, including the Environmental Committee. Infrastructurel Economic DeveloDment: HB 1361: This bill dedicates existing revenue to infrastructure funding. The House Committee on Local Government is scheduled for January 25 at 8:00 AM. SB 5115/HB 1277: These bills expand competitive local infrastructure financing tools projects. The Senate Committee on Economic Development and Trade & Management hearing is scheduled for January 24 at 3:30 PM. There is no hearing scheduled for the House. The Committee inquired if legislation has been brought forward criminalizing domestic violence in the presence of children and domestic violence using strangulation (similar to Federal Way Ordinance 06- 526). Mr. Levy answered that Senator Eide has made arrangements with Senator Hargrove to sponsor the legislation and that Senator Hargrove would appreciate the City's input before the week - when the bill will be introduced. Chair Kochmar and Committee Member Burbidge discussed the possibility of attending the hearings. In regards to Federal Legislation, Mr. Matheson remarked that applications will be received in February to compete for earmark funding. He also announced the National League of Cities Conference for March 10 to 14; an assembly of staff and Council will attend to meet with Washington State's Senators and Congress Representatives. 4. OTHER: Chair Kachmar invited Elizabeth Hughes, a citizen with concerns for Federal Way's homeless to address the Committee. Ms. Hughes shared she is readily in contact with homeless citizens and feels their basic needs are not being met. She indicated that the homeless are in desperate need of shelter - both long term and short term - and places to shower, clothing banks to lend from for interviews and jobs, etc. Ms. Hughes suggested blanket "drives" prior to winter months and a centralized database for,citizens to volunteer services, groups to request services and supplies, and a forum to brainstorm ideas specific to Federal Way. The Committee encouraged Ms. Hughes to apply for appointment to the Human Services Committee. Kelli O'Donnell reported that the Multi-Service Center and the City are working together to improve these problem, including the homeless count scheduled for January 26, 2007. The Committee discussed the need for emergency shelter locations within the City during severe weather and a campaign to share resource information with homeless citizens. FHSRAC February 27,2007 Agenda Item A Page 2 of 3 5. FUTURE AGENDA ITEMS: 1. Chair Kachmar requested that Ms. O'Donnell return to the next regular meeting to provide information on possible temporary/emergency shelters for the homeless population of Federal Way. 2. Chair Kochmar requested that Ms. Wang meet with Bob Hitchcock to discuss. coordinating organization of the Federal Way Festival Days and report back to the Committee when she's made progress. 6. ADJOURNMENT: Chair Kachmar adjourned the meeting at 6:38 PM COMMITTEE ApPROVAL: Unda Kachmar Committee Chair ATTEST: Jeanne Burbidge Committee Member FH5RAC February 27,2007 Agenda Item A Page 3 of 3 Jack Dovey Committee Member COUNCIL MEETING DATE: ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: "Overhire" Combo Electrical/Building Inspector POLICY QUESTION: CAN THE COMMUNITY DEVELOPMENT DEPARTMENT HIRE A PERMANENT COMBINATION BUILDING/ELECTRICAL INSPECTOR TO REPLACE A % TIME TEMPORARY POSITION? COMMITTEE:"~ FII5Me. MEETING DATE: 2/27/07 CATEGORY: ~ Consent D City Council Business Ordinance D Resolution D D Public Hearing Other STAFF REpORT By: KATHY MCCLUNG, COMMUNITY DEVELOPMENT DIRECTOR DEPT: Community Development Attachments: See attached memo describing current situation and rationale for proposal. Options Considered: Replace the current temporary % time position for 11 months. STAFF RECOMMENDATION: Replace the position with a full-time combination electrical/building inspector. CITY MANAGER ApPROVAL: DIRECTOR ApPROVAL: ~ Council Committee Council COMMITTEE RECOMMENDATION: Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED o DENIED o TABLEDIDEFERREDINO ACTION o MOVED TO SECOND READING (ordinances only) COUNCIL BILL # I ST reading Enactment reading ORDINANCE # ~ CITYOF ~ . Federal Way MEMORANDUM To: FEDRAC FROM: Kathy McClung, Community Development Director ~ VIA: Neal Beets, City Manager ~ DATE: January 25,2007 RE: Replacement of Combination Electrical/Building Inspector I have been reviewing the Building Division's job vacancies and am looking for ways to keep the level of service we have been able to provide. The Division now has three vacancies: Building Official - Position advertised once and extended because of small number of applications. Assistant Building Official- Vacant because of military duty. The law requires that the position be kept open for five years. It has been temporarily filled for four. Five years is up January of2008. In order to fill this position temporarily, we have filled it with the plan reviewer and filled the plan reviewer with an inspector. Temporary % time Combination Inspector - This position was added a few years ago to replace the inspector that is filling in for the plan reviewer. This position was intended to be in place until the Assistant Building Official returned from duty and all the "acting" positions wert back to their original spots. Combination inspectors are trained ele<;tricians that have received their certification to inspect, which takes eight years of experience in the field. We either have to hire someone already trained ~s a combination inspector (almost impossible) or hire someone with the electrical qualifications and teach him/her the building inspection trade (not impossible, but still difficult). Recently, we had a full-time combination inspector leave the City. I have filled his position with the former temporary inspector. At this point, it will be difficult to replace this position for II months in a part time status. ~y pro~osal is to "overhire" this position. We have salary savings to pay for it this year. If the Assistant Building Official returns in January, the worst case scenario is that an inspector would have to be laid off. If the annexation vote is successful, then I would be looking for another inspector anyway, so this decision would work out well in the short and long term. FH5RAC February 27,2007 Agenda Item C Page 2 of 2 ___._...._.__.__._._.~---.-_._-_._-._--_._------'---_._w_-.-~__~___~______.__.___._.____.________~.____-____~_ .-------.------ COUNCIL MEETING DATE: March 6, 2007 ITEM#: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: A we Worker's Compensation Retro Program POLICY QUESTION: Should the City join the A WC Worker's Comp Retrospective Rating program? COMMITTEE: Finance, Human Services ~nd Regional Affairs CATEGORY: (gI Consent o City Council Business MEETING DATE: February 27, 2007 o Ordinance o Resolution o o Public Hearing Other ~.I~J':~ RE~.9..!tT By: _ Ma'!'y}vlcDougal, _!i\!~an ~~O\!~~~_s-.M~E~K~~______ DEPT: M.~~_gement Services ATTACHMENTS: City of Federal Way Experience Modification Factor History chart, and documents necessary to join the A WC Worker's Comp Retro program, including A WC Participation Agreement and Group Enrollment Application, and L&I Application for Group Membership_ OPTIONS CONSIDERED: BUILDING INDUSTRY ASSOCIATION OF WASHINGTON (BIA W) AND ASSOCIATION OF WASHINGTON CITIES (AWe) RETRO PROGRAMS. .-----------.--.---------.--..--.--------.-----.-----.--.--.---.----- STAFF RECOMMENDATION: Staff recommends that the City execute the necessary documents to join the A WC Worker's Comp Retro Program, effective April I, 2007_ CITY MANAGER ApPROVAL: Council DIRECTOR ApPROVAL: \ Committee Council COMMITTEE RECOMMENDA nON: Approve recommendation to execute documents to join the A WC Worker's Comp Retro Program, and forWard to the City Council for final approvaL Linda Kochmar, Chair Jeanne Burbidge, Member Jack Dovey, Member PROPOSED COUNCIL MOTION: "I move approval of the recommendation to join the A WC Worker's Comp Retro Program effective April], 2007. (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED o DENIED o TABLEDIDEFERREDfNO ACTION o MOVED TO SECOND READING (ordinances only) REVISED - 02/06/2006 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # " ' CITY OF FEDERAL WAY STAFF REPORT Via: From: February 19,2007 Finance, Human Services & Regional Affairs Committee Neal Beets, City Manager(!jJ Mary McDougal, Human Resources Manager A WC Worker's Comp Retro Program Date: To: Subject: BACKGROUND: Washington State requires that all employees be covered by industrial insurance. Premiums paid by employers and employees pay for medical care for job-related injuries and illnesses, and wage replacement when the injury or illness is serious enough to miss work. The system provides payment to injured workers and protects employers from litigation. Worker's compensation/industrial insurance premiums are calculated based on claims history. Currently the City of Federal Way has a "experience modification factor" of 1.0373. The industry average is 1.00. Base premium rates are multiplied by the experience modification factor to arrive at the total premium. In 2007, based on our prior claims history, Federal Way is paying slightly more than the industry average. Group Retrospective Rating Programs for Worker's Compensation are approved through the Department of Labor and Industries and provide employers an opportunity to receive refunds on worker's compensation premiums by reducing the actual costs paid out for claims. Joining the Awe Group Retro program allows the City to participate in a pool with other cities and spread the risk and benefit from regular refunds. The goal of the Awe Retro program is to lower everyone's experience modification factor below the industry average, to .75. In 2007, our annual premium projection exceeds the A WC Retro program objective by $82,383, Participation in the A WC Retro program allows for access to important resources to reduce the frequency and severity of accidents, including experienced claims representative overseeing job- related injuries and illnesses, on-line access to claim documents, safety training, and assistance with accident prevention program development. The A WC Retro program charges a service fee of 6.5% of total premium, approximately $22,000 for the City of Federal Way for 2007. Despite this cost, the value of active claims management, the safety and risk education and training provided, the access to professional risk and safety consultants, and the potential for future refunds of worker's compensation premiums have resulted in this recommendation to join the A WC Worker's Comp Retro Program effective April 1,2007. FH5RAC February 27,2007 Agenda Item D Pe:;;:: :.: o~ 6 r \ 0 ".","" I \ \ M CO M ~ N CO ~ 0 .. ..... I \ > ~ ,g >- .- " G1 4x > ~S VI ~ 0 u -- G1 0 .~ ...I~ \ ('I) ,g -- \ \D 0 ~~ E \ ,,~.... ~' .", to '- 0 Q " Q<l", 01 W .- ^ 0 Q~ '- 0. W .~ 01 II) I c: '0 u.~ \ :0=;.8 G1 u."O ~ u G1 ::l CO U O~ ~u.. )( CO Q) G1 V u E '-- c: ~ Q) o Q) :J "- .- U L. I -0 Q) E c . Q) a. Vl X G1 1-4 Q) ::lUJ '- U at: <Ill' 0. EO Q) .- 0 to Q. ~N :J U s::: >< s::: W <t w o. \~ , " ' , ~ \ N \ 0 -- ...... \ r::- \ \ \ ~ \ 0 \ \ \ \ FHSRAC February 27. 2007 .: '.I" e, :. Agenua Item D PagE 30f 6 . " . ASSOCIATIQN OF WASHINGTQN . 1076 Frimklin St.SE · Olympia;WA'98501-1346 C i T i ES(360) 753-4137 '. Toll Free:1.80()..562~8981 · Fax: (360) 753-0149. .lnsliranceServices Fax (360) 753-,0148 i.~&-:;t~~k.~~K~~:':'::'?,J';)2!F:t< :~,f,:;L~:~;";::~~~~JL.'<'Ih?:~~"";: T~~~~~~ A~so'ciatio" ~ofWaSl1in9ton Ci~ies , WORKERS' COMPENSATION GROUP~ETRO PROGRAM. , . . .' . . , . . P ARTICIPA liON A~RE:EM:E:NT ANO GROUP. ENROLLMENT APPLICATION Government, utilities & Related Services Asa m~mber: in good standing with the Association of Washington Cities , , City of Federal Way Member Name . 574,570~O , L&I Account Number. , Enrolls by this agreement as a participating member in the Group Retrospective Rating Plan Agreement 'submitted by AWC. ' This contract agreement renews providedthe member submits,' and is approved by Labor.& Industries, a valid "Application For Group Membership And Authorization For Release Of Insurance Data" '(L&I retro application form). 1. Goals of the Plan: A. ' Offer participants an opportunity to qualify for refunds on StandardPremiLim paid to the DepartmentofLabor&lndu&ries B. Reduce'the frequency and severity of industrial injuries; and C. Reduce participants' experience factor 2. . Administration & Management of the Plan: AWC will be responsible for the day-to-day operation of the Plan. Duties include, but are not limited to: A. Assisting plan participants in reducing the frequencyand severity of industrial injuries; , B. Educating plan participants in the most appropriate ways to control costs; C. ' Claims Management Services; D. Introduction and training materials; E. Annuai Retrospective Review; and , F. ' Administration of State Fund claims while enrolled in AWC Group Program. G. Loss Control and Risk Management Services. '" .,.., " ,", .', : .. ", 'J FH5RAC February 27,2007 kgenda Item D ?CJge 'lor 6 , . AWC Retro Advisory Committee A committee consisting of no more than seven n,ember cities/towns will be assembled to advise' the AWe Retro Plan Admini~trator on operational issues including contract terms, distribution of refunds, program enhancements,'conditions for cOntinued participalionand other issues. This committee shall meet at least once per year to develop policy, review partidparits. adjust the contract terms or address any. other issues regarding the successful administration of the plan. 3. Member Agrees.To: A. ' During contract term, maintain an individual atcol,int for workers' compEmsation insurance in good . standing with the Department of Labor & Industries; B. Comply With all applicablelciwS, rules and regulations set forth by L&I; C. Participate.in safety and loss control programs available as an AWC Retro Plc:m member; D. Maintain membership in the Association of Washington Cities through the final tetra year adjustment; . . E.. Pay a Service Fee of six and one half percent (6.5%) of total Industrial InSurance Premium, billed annually in January. .' ' . . , F. If you do not pay your service fee as agreed the member will forfeit any refund. 4. Re(unds/Adjustments: A. It is understood a!1cj agr.e~ by the employer that all refunds, exceeding Service Fees of six and one half percent (6.5%) of I,ndustriallnsurance Premium, wili be made on the, basis of a merit rated formula based on performance. However, should the Member's retro premium exceed their . standard premium, the member will not be eligible for a refund beyond their service fee. Plan participants also acknowledge that returns are. based on a number of factors, such as premium size, clairilcosts,and related factors, therefore returns are not guaranteed. B. Employers acknowledge that AWC is enrolled in Plan A2 with a Maximum Premium Ratio (MPR) of 1.15. If a group assessment develops for any Plan Year, those members that caused the assessment will be assessed first, up to a maximum liability of fifteen ,percent (15%) ofthe participating member's Standard Premium. ' If necessary to cover the c;lssessment, the remaining members shc;llf pay the balance on the basis of their individual percentage of the total group premium~ Penalties become due and payable within 30 days of notification of the amount., If you do NOT re-enrollin ttle program, any refund will be held until the final adjustment ofthat Retro year. 5. Indemnification/liability: Each party shall indemnify and hold harmless the other and its directors, officers, employees, agents, parents, subsidiaries, successors and assignsfromand against any.and all liabilities, claims,suits, actions, demands, settlements, l.asses, judgments, costs, damages, and expenses (including reasonable attorney's fees) arising out of or resulting from, in whole or part, the acts or omissions of the indemnifying party, its employees, agents or contractors and the indemnifying party's affiliated . companies and their ~mployees, agents or contractor.s. Authorized By: (Printed Name) (Title) (Signature) (Address/Street) City of Federal Way (Cityffown Applicant) (Date) FH5RAC February 27, ZOO? Agenda Item D Page 5 of 6 ..:.... . Department of Labor and Industries Retrospective Rating www.LNI.wa.gov APPLICATION FOR GROUP MEMBERSHIP AND AUTHORIZATION FOR RELEASE OF INSURANCE DATA Mail to association Association of Washington Cities 1076 Franklin Street SE Olympia, W A 98501-1346 Retro ID 122 Employer UBI 601 223538 Account'ID 574,570-00 Application Deadline 03/15/07 Coverage Year Beginning 01101107 City of FEDERAL WAY If you have more than one L&I industrial insurance account you must enroll all sub accounts that are of a similar business nature. You may elect to enroBall dissimilar businesses. If you want to enroll dissimilar businesses, please check the sub account box. . D If you have questions about this requirement please contact the business association listed above or L&I at (360) 902-4851. As a member of the sponsoring organization listed above, 'this employer applies for enrollment in the retrospective rating group sponsored by the o'rganization. L&I will notify the sponsoring organization of acceptance or denial of your application to participate in the group. It is the responsibility of the sponsoring organization to notify you of this acceptance or denial. As a pre- requisite of enrollment each of your industrial insurance accounts must be in good standing at the time of enrollment or you will not be allowed to participate in retrospective rating. By signing this application, the employer named above agrees with all of the following conditions: )> L&I will automatically re-enroll the employer as a member of the group in future coverage periods provided the employer's industrial insurance account is in good standing at the time of re-enrollment. Ifthe employer does not want to participate in future coverage periods the employer or sponsoring organization must notifY L&I in writing prior to the beginning of the respective coverage period. )> The employer authorizes L&I to furnish the sponsoring organization or their designee with data and information obtained from the employer's industrial insurance account(s). )> The sponsoring organization will represent the employer in all matters applicable to retrospective rating participation and the employer's industrial insurance account(s). ' )> The employer agrees to comply with L&I rules, regulations and laws and is bound by the terms of the agreement between the sponsoring organization and L&I. . )> The employer will cooperate with L&I claims management activities and will participate iil the sponsoring organization's claims management and workplace safety initiatives. ~ All retrospective rating adjustments that may be earned by the employer will be given to the sponsoring organization. L&I is not involved in the distribution of a group refund to the individual group members except in the case of defunct e.roup. These conditions are in effect immediately and will remain in effect through the term of any agreement between the sponsoring ore.anization and L&1. NOTE: L&I disclaims any interest in any other contract you may enter into with the sponsoring organization as their pre- requisite of your participation in the retrospective rating group that they sponsor, and L&I neither approves or disapproves of any language or provision contained in these other contracts. RETURN this application directly to the above organization. DO NOT send this application directlv to L&I. Signature of an owner, partner or corporate officer of the employer named above is required to participate in this retros ective ratin rou. Type or print name Title Date Owner, partner, corporate officer Signature F250-0 I 6-000 app for group membership and authorization for release of insurance data 4-04 FH5RAC February 27,2007 Agenda Item o Page 6 of 6 ,'i,'.. . _._....._-_.__.._~-_._--_._--_._----~-----_._._-------._~-~_.~---------~---------_._---~._---~-~~-~~--------_.- COUNCIL MEETING DATE: 03/06/2007 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: Assistant City Manager and Police Chief 401 Governmental Money Purchase Plan POLICY QUESTION: Should the City adopt a 401 Governmental Money Purchase Plan and Trust for the Assistant City Manager and Police Chief positions? COMMITTEE: Finance, Human Services and Regional Affairs MEETING DATE: February 27,2007 CATEGORY: ~. Consent D 'City Council Business D Ordinance ~ Resolution D o Public Hearing Other ~!~XF REpORT By: _ Ma~ M~.Q~)Ugal, Huma~}3..~~ource_~_Manag~~c___DEPT: ~~nagement Service~_,_~___ ATTACHMENTS: Documents necessary to adopt a 40la plan including: Plan Resolution, 401 Governmental Money Purchase Plan & Trust Basic Document (includes Declaration of Trust), and Plan Adoption Agreement. OPTIONS CONSIDERED: Adoption of a 401 Money Purchase Plan allows the City to provide compensation to employees in the eligible positions in the form of funds available for retirement, and allows for additional voluntary deferral by the employees. In 1999, the City adopted such a plan for the City Manager. IRS regulations require that the City contribution is the same (either percentage'or dollar amount) for all positions in the plan. Adopting a separate plan for the Assistant City Manager and Police Chief positions allows the City to set a different contribution rate. '__..___H'_~____"__'__'__'~'__________'~'~__'_"______.__~___...._.___~_._.~.._._._.__.__"_"_H_'_"_"""__"_'.-.--.--..-...---.--.---------......--..--.-----.-----.-- STAFF RECOMMENDATION: Staffrecornmends adoption of the 40la plan for the ACM and Police Chief positions. CITY MANAGER ApPROVAL: DIRECTOR ApPROVAL: Council Committee Council COMMITTEE RECOMMENDATION: Adopt a resolution to establish a 40 1 Governmental Money Purchase Plan for the Assistant City Manager and Police Chief positions and execute the necessary plan documents. Linda Kochmar, Chair Jeanne Burbidge, Member Jack Dovey, Member PROPOSED COUNCIL MOTION: HI move approval of the Resolution to establish a 401 Governmental Money Purchase Plan for Assista~t City Manager and Police Chief positions, and to execute the necessary plan documents. " (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED o DENIED o TABLED/DEFERREDINO ACTION o MOVED TO SECOND READING (ordinances only) REVISED - 02/06/2006 COUNCIL BILL # I ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY STAFF REPORT Date: February 20, 2007 Finance, Human services.(inal Affairs Committee Neal Beets, City Manage ~ Mary McDougal, Human rces Manager ~~ Assistant City Manager and Police Chief 40 I Governmental Money Purchase Plan To: Via: From: Subject: BACKGROUND: The recent promotions of the Deputy Police Chief to Police Chief and two Department Directors to Assistant City Manager prompted a review of their compensation, which has resulted in this recommendation to adopt a 401 Governmental Money Purchase Plan. In 1999, a 401 Governmental Money Purchase Plan was implemented at the request of then City Manager David Moseley, to allow him an opportunity to save for retirement, in addition to the deferred compensation plan, since his contribution to that plan was already at the maximum level. As you know, the City has continued to make 401a plan contributions as part of the City Manager compensation package, currently at the maximum level allowed by the IRS. Similarly, the Police Chief has requested the ability to set aside additional funds for retirement. IRS regulations require that the City contribution is the same (either percentage or dollar amount) for all positions in the plan. Adopting a separate plan for the Assistant City Manager and Police Chief allows the City to set a different contribution rate for those positions than is currently established for the City Manager. The proposal is to contribute $6,000 annually on behalf of the Assistant City Managers and the Police Chief. Attached for your review are the documents necessary to adopt a 401 Governmental Money Purchase Plan for the ACMs and Police Chief. Please contact me if you have further questions or need additional information. FH5RAC February 27, 2007 Agenda Item E Page 2 of 48 RESOLUTION NO. A RESOLUTION OF, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, ADOPTING A 401 (A) MONEY PURCHASE PLAN #106325. NAME OF EMPLOYER: CITY OF FEDERAL WAY, WASHINGTON EMPLOYER PLAN NUMBER: 106325 WHEREAS, the City of Federal Way ("City") has employees rendering valuable services; and WHEREAS, the establishment of a money purchase retirement plan benefits employees by providing funds for retirement and funds for their beneficiaries in the event of death, and benefits the City by assisting in the attraction and retention of competent employees; and WHEREAS, the City desires that its money purchase retirement plan be administered by the ICMA Retirement Corporation and that the funds held in such plan be invested in the Vantage Trust, a trust established by public employers for the collective investment of funds held under their retirement:. and deferred compensation plans: NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY HEREBY RESOLVES AS FOLLOWS: Section 1. Plan Form. The City hereby establishes a money purchase retirement plan (the "Plan") #106325 in the form of Res. # , Page 1 FHSRAC February 27, 2007 Agenda Item E Page 3 of 48 The leMA Retirement Corporation Governmental Money Purchase & Trust, pursuant to the specific provisions of the Adoption Agreement, a copy of which is attached hereto and incorporated herein by this reference. Section 2. Plan Assets. The Plan shall be maintained for the exclusive benefit of eligible employees and their beneficiaries. . The City hereby executes the Declaration of Trust of the Vantage Trust, which is attached hereto, intending this execution to be operative with respect to any retirement or deferred compensation plan subsequently established by the Employer if the assets of the plan are to be invested in the Vantage Trust. Section 3.. Plan Trustee. The City hereby agrees' to serve as Trustee under the Plan and to invest funds held under the Plan in the Vantage Trust; and Section 4. Plan Coordinator. The Human Resources Manager shall be the coordinator of the Plan; shall, recelve reports, notices, etc., from the lCMA Retirement Corporation or the Vantage Trust; shall cast, on behalf of the City, any required votes under the Vantage Trust; and may delegate any administrative duties relating to the Plan to the appropriate departments. The Human Resources Manager is hereby authorized to execute all necessary agreement with the lCMA Retirement Corporation incidental to the administration of the Plan. Res. # , Page 2 FH5RAC February 27, 2007 Agenda Item E Page 4 of 48 Sectian 5. Severability. If any sectian, sentence, clause ar phrase af this resalutian shauldbe held to. be invalid ar uncanstitutianal by a caurt af campetent jurisdictian, such invalidity ar uncanstitutianality shall nat affect the validity ar canstitutianality af any ather sectian, sentence, clause ar phrase o.f this resalutian. Sectian 6. Ratificatian. Any act cansistent with the autharity and priar to. the effective date af the resalutian is hereby ratified and affirmed. Sectian 7. Effective Date. The plan shall be effective January 1, 2007. RESOLVED BY THE CITY COUNCIL 'OF THE CITY OF FEDERAL WAY, WASHINGTON, this day af , 2007. CITY OF FEDERAL WAY MIKE PARK, MAYOR ATTEST: CITY CLERK, LAURA HATHAWAY APPROVED AS TO FORM: CITY ATTORNEY, PAT RICHARDSON Res. # , Page 3 FH5RAC February 27, 2007 Agenda Item E Page 5 of 48 FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: RESOLUTION NO. K:\Resolution\401aplan2007 Res. # , Page 4 FH5RAC February 27,2007 Agenda Item E Page 6 of 48 RESOLUTION FOR A LEGISLATIVE BODY RELATING TO A MONEY PURCHASE PLAN City of Federal Way RESOLUTION OF (EMPLOYER NAME). WHEREAS, the Employer has employees rendering valuable services; and WHEREAS, the establishment of a money purchase retirement plan benefits employees by providing funds for retirement and funds for their beneficiaries in the event of death; and WHEREAS, the Er;nployer desires that its money purchase retirement plan be administered by the ICMA Retirement Corporation and that the funds held such plan be invested in the Vantage Trust, a trust established by public employers for the collective investment of funds held under their retirement and deferred compensation plans: NOW THEREFORE BE IT RESOLVED that the Employer hereby establishes or has established a money purchase retirement plan (the "Plan") in the form of: (Select one) ID The ICMA Retirement Corporation Governmental Money Purchase Plan & Trust, pursuant to the specific provisions of the Adoption Agreement (executed copy attached hereto). o The Plan and Trust provided by the Employer (executed copy attached hereto). The Plan shall be maintained for the exclusive benefit of eligible employees and their beneficiaries; and BE IT FURTHER RESOLVED that the Employer hereby executes the Declaration of Trust of the Vantage Trust, and attached hereto as Appendix B. intending this execution to be operative with respect to any retirement or deferred compensation plan subsequently established by the Employer, if the assets of the plan are to be invested in the Vantage Trust. BE IT FURTHER RESOLVED that the Employer hereby agrees to serve as trustee under the Plan and to invest funds held under the Plan in the Vantage Trust; and BE IT FURTHER that theBuman Resources Mg(ose title of official, not name) shall be the coordinator for the Plan; shall receive'reports, notices, etc., from the ICMA Retirement Corporation or the Vantage Trust; shall cast, on behalf of the Employer, any required votes under the Vantage Trust; may delegate any administrative duties relating to the Plan to appropriate departments; and BE IT FURTHER RESOLVED that the Employer hereby authorizes HR Manager (use title not name) to execute all necessary agreements with the ICMA Retirement Corporation incidental to the administration of the Plan. I. Lallra Hathaway ,Clerkofthe(City,County,etc.)of Federal Way, WA.dohereby certifyttiat the foregoing resolution proposed by (Council Member. Trustee, etc.) of Ci ty of Federal Way, was duly passed and adopted by the (Council, Board, etc.) of the (City, County, etc.) of FlOlderal Way at a regular meeting thereof assembled this 6th day of March ,200-2, by the following vote: AYES: NAYS: ABSENT: (SEAL) Clerk of the (City, County, etc.) ICMA Retirement Corporation · P. O. Box 96220 · Washington, DC 20090-6220 · 1-800-326-7272 FH5RAC February 27,2007 Agenda Item E Page 7 of 48 ~-------,_._-- . "::>" ; ,,\:t'-.,~7!" -- ,. ',)"-77~;r~~~:j~:] , .,...... '" ,'...' 't" " ",. "', "', ,',. ; ".'" ,'.. ., _":"'j , tvi'\~~::r.' 'I~'~""~" '.:.'-." ",'>;"~ & '~} j .0.',. ...., -1.:-<~j ,:~;U~\~. '...., .... ~ ., ~,,:' '.. Lf+~~..~ ".". ,~. '. ".<'> ,,* '", ,. .~~ '.' , '~~;~1f~' '.' '~~" ; "~ill~nth~.\!J,~~i'~,"", ';,q , J!Wi '. :", " ,":: ,'. ..',. ' :.. '". ',."',,,,', ,'~~,~',:, """j " ~~~~" ,~~;;~0 ,....;,,, .;' .:''': .". ..".,: .; y;~;:':; :'~?~t;~fC ~~ ~,,-, .....!lI. ....~. . ~-., " ~'. . -', ~ . -A '., . t,~J;iI:I'-""~_" :.'".; .."..\.'~'0;'.l ~~~r)~::~..i~;", ;~.~ ,~)'.:.,' :,:>.1 ;:~ "~ , ,",_t~'~:~C~ <';;~~.:.1~~i:':~;"""~'~;;'; .'~,-!~ ICMARC Building Retirement Security GOVERNMENTAL MONEY PURCHASE PLAN & TRUST I. PURPOSE The Employer hereby adopts this Plan and Trust to provide funds for its Employees' retirement, and to provide funds for their Beneficiaries in the event of death. The ~enefits provided in this Plan shall be paid from the Trust. The Plan and the Trust forming a part he,reof are adopted and shall be maintained for the exclusive benefit of eligible Employees and their Beneficiaries. Except as provided in Sections 4.10 and 14.03, no part of the corpus or income of the Trust shall revert to the Employer or be used for or diverted to purposes other than the exclusive benefit of Participants and their Beneficiaries. II. DEFINITIONS 2.01 Account. A separate record which shall be established and maintained under the Trust for each Participant, and which shall include all Participant subaccounts created pursuant to Article IV; plus any Participant Loan Account created pursuant to Section 13.03. Each subaccount created pursuant to Ar~icle IV shall include any earnings of the Trust and adjustments for withdrawals, and realized and untealized gains and losses allocable thereto. The term "Account" may also refer to any of such separate subaccounts. 2.02 Accounting Date. Each day that the New York Stock Exchange is open for trading, and such other dates as may be determined by the Plan AdministratOr, as provided in Section 6.06 for valuing the Trust's assets. 2.03 Adop~on Agreement. The separate agreement executed by the Employer through which the Employer adopts the Plan and elects among the various alternatives provided thereunder, and which upon execution, becomes an integral part of the Plan. 2.04 . Beneficiary. The person or persons (including a trust) designated by the Participant who shall receive any benefits payable hereunder in the event of the Participant's death. The designation of such Beneficiary shall be in writing to the Plan Administrator. A Participant may designate primary and contingent Beneficiaries. Where no designated Beneficiary survives the Participant or no Beneficiary is otherwise designated by the Participant, the Participant's Beneficiary shall be his/her surviving spouse or, if none, his/her estate. Notwithstanding the foregoing, the Beneficiary designation is subject to the requirements of Article XII unless the Employer elects otherwise in the Adoption Agreement. Notwithstanding the foregoing, where elected by the Employer in the Adoption Agreement (the "QJSA Election"), the Beneficiary designation is subject to the requirements of Article XVII. Notwithstanding the fotegoing, to the extent permitted by the Employer, a Beneficiary receiving required minimum distributions in accordance with Article X and not in a benefit form elected under Article XI or XII, may designate a Beneficiary to receive the required minimum distributions that would have otherwise been payable to the initial Beneficiary but for his or her death. 2.05 Break in Service. A Period of Severance of at least twelve (12) consecutive months. In the case of an individual who is absent from work for maternity or paternity reasons, the twelve (12) consecutive month period beginning on the first an~iversary of the first date of such absence shall not constitute a Break in Service. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of the birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. FH5RAC February 27,2007 Agenda Item E Page 9 of 48 2.06 Code. The Internal Revenue Code of 1986, as amended from time to time. 2.07 Covered Employment Classification. The group or groups of Employees eligible to make and/or have contributions to this Plan made on their behalf, as specified by the Employer in the Adoption Agreement. 2.08 Disability. A physical or mental impairment which is of such permanence and degree that, as determined by the Employer, a Participant is unable because of such impairment to perform any substantial gainful activity for which he/she is suited by virtue of his/her experience. training, or education and that has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months, or can be expected to result in death. The permanence and degree of such impairment shall be supported by medical evidence. If the Employer maintains a long-term disability plan, the definition of Disability shall be the same as the definition of disability in the long-term disability plan. 2.09 Earnings. (a) General Rule. Earnings, which form the basis for computing Employer Contributions, are all of each Participant's W-2 earnings which are actually paid to the Participant during the Plan Year, plus any contributions made pursuant to a salary reduction agreement which are not includible in the gross income of the Employee under section 125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2), 457(b), or, effective January 1, 2001, 132(f)( 4) of the Code. Earnings shall include any pre-tax contributions' (excluding direct employer contributions) to an integral part trust of the Employer providing retiree health care benefits. Earnings shall also include any other earnings as defined and elected by the Employer in the Adoption Agreement. Unless the Employer elects otherwise in the Adoption Agreement, Earnings shall exclude overtime compensation and bonuses. (b) Limitation on Earnings. For any Plan Year beginning after December 31, 2001, the annual Earnings of each Participant taken into account in determining allocations shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with section 401 (a)(17)(B) of the Code. Annual Earnings means Earnings during the Plan Year or such other consecutive 12-month period over which Earnings is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual Earnings for the determination period that begins with or within such calendar year. If a determination period consists offewer than twelve (12) months, the annual Earnings limit is an amount equal to the otherwise applicable annual Earnings limit multiplied by the fraction, the numerator of which is the number of months in the short Plan Year and the denominator of which is twelve (12). If Earnings for any prior determination period are taken into account in determining a Participant's allocations for the current Plan Year, the Earnings for such prior year are subject to the applicable annual Earnings limit in effect for that prior year. (c) Limitatiom for Governmental Plam. In the case of an eligible participant in a governmental plan (within the meaning of section 414(d) of the Code), the dollar limitation shall not apply to the extent the Earnings which are allowed to be taken into account under the Plan would be reduced below the amount which was allowed to be taken into account under the Plan as in effect on July 1. 1993. as adjusted for increases in the cost-of-living in accordance with section 401 (a)( 17)(B) of the Code. For purposes of this Section, an eligible participant is an individual who first became a Participant in the Plan during a Plari Year beginning before the first Plan Year beginning after December 31, 1993. 2.10 Effective Date. The first day of the Plan Year during which the Employer adopts the Plan. unless the Employer elects in the Adoption Agreement an alternate date as the Effective Date of the Plan. 2.11 Employee. Any individual who has applied for and been hired in an employment position and who is employed by the Employer as a common law employee; provided, however, that Employee shall not include any individual who is not so recorded on the payroll records of the Employer, including any such person who is FH5RAC February 27, 2007 Agenda Item E Page 10 of 48 subsequently reclassified by a court of law or regulatory body as a common law employee of the Employer. For purposes of clarification only and not to imply that the preceding sentence would otherwise cover such person, the term Employee does not include any individual who performs services for the Employer as an ind~pendent contractor, or under any other non-employee. 2.12 Employer. The unit of state or local government or an agency or instrumentality of one (l) or more states or local governments that executes the Adoption Agreement. 2.13 Hour of Service. Each hour for which an Employee is paid or entitled to payment for the performance of du- ties for the Employer. 2.14 Nonforfeitable Interest. The nonforfeitable interest of the Participant or his/her Beneficiary (whichever is applicable) is that percentage of his/her Employer Contribution Account balance, which has vested pursuant to Article VII. A Participant shall, at all times, have a one hundred percent (100%) Nonforfeitable Interest in his/ her Participant Contribution, Rollover, and'Voluntary Contribution Acc~unts. 2.15 Normal Retirement Age. The age which the Employer specifies in the Adoption Agreement. If the Employer enforces a mandatory retirement age, the Normal Retirement Age is the lesser of that mandatory age or the age specified in the Adoption Agreement. 2.16 Participant. An Employee or former Employee for whom contributions have been made under the Plan and who has not yet received all of the payments of benefits to which he/she is entitled under the Plan. A Participant is created as benefiting under the Plan for any Plan Year during which the participant received or is deemed to receive an allocation in accordance with Treas. Reg. section 1.41O(b)-3(a). 2.17 Period of Service. For purposes of determining an Employee's initial or continued eligibility to participate in the Plan or the Nonforfeitable Interest in the Participant's Account balance derived from Employer Contributions, an Employee will receive credit for the aggregate of all time period(s) commencing with the Employee's first day of employment or reemployment and ending on the date a Break in Service begins. The first day of employment or reemployment is the first day the Employee performs an Hour of Service, An Employee will also receive credit for any Period of Severance of less than twelve (12) consecutive months. Fractional periods of a year will be expressed in terms of days. Notwithstanding anything to the contrary herein, if the Plan is an amendment and restatement of a plan that previously calculated service under the hours of service method, service shall be credited in a manner that is at least as generous as that provided under Treas. Regs. section 1.410(a)-7(g). 2.18 Period of Severance. A continuous period of time during which the Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was otherwise first absent from service, 2.19 Plan. This Plan, as established by the Employer, including any elected provisions pursuant to the Adoption Agreement. 2.20 Plan Administrator. The person(s) or entity named to carry out certain nondiscretionary administrative functions under the Plan, as hereinafter described, which is the ICMA Retirement Corporation or any succeSsor Plan Administrator. 2.21 Plan Year. The twelve (12) consecutive month period designated by the Employer in the Adoption Agreement. 2.22 Trust. The Trust created under Article VI of the pian which shall consist of all of the assets of the Plan de~lreq':>:,:.__ from Employer and Participant contributions under the Plan, plus any income and gains thereon, less anr; ,~ " losses, expenses and distributions to Participants and Beneficiaries. FH5RAC February 27, 2007 Agenda Item E Page 11 of 48 :;>k 1~~,.~ \':~i~~f .:; ~ ,... ,~~... . ,!JI:'"~~::}r. III. ELIGIBILITY 3.01 Service. Except as provided in Sections 3.02 and 3.03 of the Plan, an Employee within the Covered Employment Classification who has completed a twelve (12) month Period of Service shall be eligible to participate in the Plan at the beginning ,of the payroll period next commencing theteafter. The Employer may elect in the Adoption Agreement to waive or reduce the twelve (12) month Period of Service. If the Employer maintains the plan of a predecessor employer, service with such employer shall be treated as Service for the Employer. 3.02 Age. The Employer may designate a minimum age requirement, not to exceed age twenty-one (21), for participation. Such age, if any, shall be declared in the Adoption Agreement. 3.03 Return to Covered Employment Classification. In the event a participant is no longer a member of Covered Employment Classification and becomes ineligible to make contributions and/or have contributions made on his/her behalf, such Employee will become eligible for contributions immediately upon returning to a Covered Employment Classification. If such Participant incurs a Break in Service, eligibility will be determined under the Break in Service rules of the Plan. In the event an Employee who is not a member of a Covered Employment Classification becomes a member, such Employee will be eligible to participate immediately if such Employee has satisfied the minimum age and service requirements and would have otherwise previously become a Participant. 3.04 Service Before a Break in Service., All Periods of Service with the Employer are counted toward eligibility, including Periods of Service before a Break in Service. [v; CONTRIBUTIONS 4.01 Employer Contributions. For each Plan Year, the Employer will contribute to the Trust an amount as specified in the Adoption Agreement. The Employer's full contribution for any Plan Year shall be due and paid not later than thirty (30) working days after the close of the Plan Year. Each Participant will share in Employer Contributions for the period beginning on the date the Participant commences participation under the Plan and ending on the date on which such Employee severs employment with the Employer or is no longer a member of a Covered Employment Classification, and such contributions shall be accounted for separately in his/her Employer Contribution Account. Notwithstanding anything to the contraty herein, ifso elected by the Employer in the Adoption Agreement, an Employee shall be required to make contributions as provided pursuant to Section 4.03 or 4.04 in order to be eligible for Employer Contributions to be made on his/her behalf to the Plan. 4.02 Forfeitures. All amounts forfeited by terminated Participants, pursuant to Section 7.06, shall be allocated to a suspense account and used to reduce dollar for dollar Employer Contributions otherwise required under the Plan for the current Plan Year and succeeding Plan Years, if necessary. Forfeitures may first be used to pay the' reasonable administrative expenses of the Plan, with any remainder being applied to reduce Employer Contributions. 4.03 Mandatory Participant Contributions. If the Employer so elects in the Adoption Agreement, each eligible Employee shall make contributions at a rate prescribed by the Employer or at any of a range of specified rates, as set forth by the Employer in the Adoption Agreement, as a requirement for his/her participation in the Plan. Once an eligible Employee becomes a Participant, he/she shall not thereafter have the right to discontinue or vary the rate of such Mandatory Participant Contributions. Such contributions shall be accounted for separately in the Participant Contribution Account. Such Account shall be at all times nonforfeitable by the " Participant. FH5RAC February 27, 2007 Agenda Item E Pa~e 12 of 48 If the Employer so elects in the Adoption Agreement, the Mandatory Participant Contributions shall be "picked up" by the Employer in accordance with Code section 414(h)(2). Any contribution picked-up under this Section shall be treated as an employer contribution in determining the tax treatment under the ~ode, and shall not be included as gross income of the Participant until it is distributed. 4.04 Employer Matching Contributions of Voluntary Participant Contributions. If the Employer so elects in the Adoption Agreement, Employer Matching Contributions shall be made on behalf of an eligible..Employee for a Plan Year only if the Employee agrees to make Voluntary Participant Contributions for that Plan Year. The rate of Employer Contributions shall, ro the extent specified in the Adoption Agreement, be based upon the rate at which Voluntary Participant Contributions are made for that Plan Year. Employer Matching Contributions shall be accounted for separately in the Employer Contribution Account. 4.05 Voluntary Participant Contributions. If the Employer so elects in the Adoption Agreement, an eligible Employee may make after-tax voluntary (unmatched) contrib~tions under the Plan for any Plan Year in any amount up to twenty five percent (25%) of his/her Earnings for such Plan Year. Matched and unmatched contributions shall be accounted for separately in the Participant's Voluntary Contribution Account. Such Account shall be at all times nonforfeitable by the Participant. 4.06 Deductible Employee Contributions. The Plan will not accept deductible employee contributions which are made for a taxable year beginning after December 31, 1986. Contributions made prior to that date will be maintained in a Deductible Employee Contribution Account. The Account will share in the gains and losses under the Plan in the same manner as described in Section 6.06 of the Plan. Such Account shall be at all times nonforfeitable by the Participant. 4.07 Military Service Contributions. Notwithstanding any provision of the Plan ro the contrary, effective December 12, 1994, contributions, benefits and service credit with respect ro qualified military service will be provided in accordance with section 414(u) of the Code. Effective December 12, 1994, if the Employer has elected in the Adoption Agreement to make loans available to Participants, loan repayments will be suspended under the Plan as permitted under section 414( u) (4) of the Code. 4.08 Changes in Participant Election. A Participant may elect ro change his/her rate of Voluntary Participant Contributions at any time or during an electi~n period as designated by the Employer. A Participant may discontinue such contributions at any time or during an election period as designated by the Employer. 4.09 Portability of Benefits. (a) Unless otherwise elected by the Employer in the Adoption Agreement, the Plan will accept Participant (which shall include, for purposes of this subsection, an Employee within the Covered Employment Classification whether or not he/she has satisfied the minimum age and service requirements of Article III,) rollover contributions and/or direct rollovers of discribu,tions (including after-tax contributions) made after December 31, 2001 that are eligible for rollover in accordance with Section 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), or 457(e)(16) of the Code, from all of the following types of plans: (1) A qualified plan described in Section 401 (a) or 403(a) of the Code; (2) An annuity contract described in Section 403(b) of the Code; (3) An eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state; and FH5RAC February 27, 2007 Agenda Item E Page 13 of 4a ~~' (4) An individual retirement account or annuity described in Section 408(a) or 408(b) of the Code (including SEPs, and SIMPLE IRAs after two years of participating in the SIMPLE IRA). (b) Notwithstanding the foregoing, the Employer may reject the rollover contribution if it determines, in its discretion, that the form and nature of the distribution from the other plan does not satisfY the applicable requirements under the Code to make the transfer or rollover a nontaxable transaction to the Participant; , (c) For indirect rollover contributions, the amount distributed from such plan must be rolled over to this Plan no later than the sixtieth (60th) day after the distribution was made from the plan,.unless otherwise waived by the IRS putsuant to Section 402(c) (3) of the Code. ' (d) . The amount transferred shall be deposited in the Trust and shall be credited to a Rollover Account. Such Account shall be one hundred percent (l00%) vested in the Participant. , (e) The Plan will accept accumulated deductible employee contributions as defined in section 72(0)(5) of the Code that were distributed from a qualified retirement plan and transferred (rolled over) pursuant to section 402(c), 403(a)(4), 403(b)(8), or 408(d) (3) of the Code. Notwithstanding the above, this transferred (rolled over) amount shall be deposited to the Trust and shall be credited to a Deductible Employee Contributions Account. Such Account shall be one-hundred percent (100%) vested in the Participant. (f) A Participant may, upon approval by the Employer and the Plan Administrator, transfer his/her interest in another plan maintained by the Employer that is q uali.fied under section 401 (a) of the Code to this Plan, provided the transfer is effected through a one-time irrevocable written election made by the Participant. The amount transferred shall be deposited in the Trust and shall be credited to sources that maintain the same attributes as the plan from which they are transferred. Such transfer shall not reduce the accrued years or service ctedited to the Participant for purposes of vesting or eligibility for any Plan benefits or features. 4.10 Return of Employer Contributions. Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the date of contribution. -v. LIMITATION ON ALWCATlONS 5.01 Participants Only in This Plan. (a) If the Participant does not participate in, and has never participated in another qualified plan or a welfare benefit fund, as defined in section 419(e) of the Code, maintained by the Employer, or an individual medical account, as defined by section 415(1)(2) of the Code, maintained by the Employer, which provides an Annual Addition, the amount of Annual Additions which may be credited to the Participant's Account for any Limitation Year will not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer Contribution that would otherwise be conttibuted or allocated to the Patticipant's Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or al- located will be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimation of the Participant's Compensation for the Limitation Year, uniformly determined for all Participants .. similarly situated. >, ':-: ~;..~ ~/ =", FHSRAC February 27, 2007 Agenda Item E Page 14 of 48 (c) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensa- tion for the Limitation Year. (d) If, as a result of an inadvertent reasonable error in estimating the Maximum Permissible Amount for a Participant in accordance with Subsection (b) or pursuant to Subsection (c) or as a result of the allocation of forfeitures, there is an Excess Amount, the excess will be disposed of as follows: (1) Any Mandatory Participant Contributions that are not "picked up" by the Employer or Voluntary Participant Contributions, to the extent they would reduce the Excess Amount, will be returned to the Participant; (2) If after the applicationof paragraph (1) an Excess Amount still exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Partici- pant's Account will be used to reduce Employer Contributions (including any allocation of forfeitures) for such Participant in the next Limitation Year, and each succeeding Limitation Year if necessary; (3) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is not covered by the Plan at the end of the Limitation Year, the Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer Contributions (including allocation of any forfeitures) for all remaining Participants in the next Limitation Year, and each succeeding Limitation Year if necessary; (4) If a suspense account is in existence ar any time during a particular Limitation Year, all amounts in the suspense account must be allocated and reallocated to Participants' accounts before any Employer or any Employee contributions may be made [Q the Plan for that Limita- tion Year. Excess Amounts in a suspense account may not be distributed to Participants or former Participants. 5.02 Participants in Another De6.ned Contribution Plan. (a) Unless the Employer provides other limitations in the Adoption Agteement, this Section applies if, in addition to this Plan, the Participant is covered under another qualified defined contribution plan maintained by the Employer, or a welfare benefit fund, as defined in section 419(e) of the Code, maintained by the Employer, or an individual medical account, as defined by section 415(1)(2) of the Code, maintained by the Employer, which provides an Annual Addition, during any Limitation Year. The Annual Additions which may be credited to a Participant's Account under this Plan for any such Limitation Year will not exceed the Maximum Permissible Amount reduced by the Annual Additions credited [Q a Participant's Account under the other plans and welfare benefit funds for the same Limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribu- tion plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Per- missible Amount, no amount will be contributed Ot allocated to the Participant's Account under this Plan for the Limitation Year. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Section . 5.0l(b). ' .FHSRAC February 27, 2007 Agenda Item E Page 15 of 48 ~~~ (c) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensa- tion for the Limitation Year. (d) If, pursuant to Subsection (c) or as a result of the allocation of forfeitures, a Participant's Annual Additions under this Plan and such other plans would result in an Excess Amount for a Limication Year, che Excess Amount will be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date. (e) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of, (1) The total Excess Amount allocated as of such date, multiplied by the ratio of: (i) the Annual Additions allocated to the Participant for the Limitation Year as of such date under chis Plan to ' (ii) the total Annual Additions allocated to the Participant for the Limitation Year as of such date under this and all the other prototype qualified defined contribution plans. (f) Any Excess Amount attributed to chis Plan will be disposed in the manner described in Section 5.01(d). 5.03 Definitions. For the purposes of this Article, the following definitions shall apply: (a) Annual Additions: The sum of the following amounts credited to a Participant's account for the Limita- tion Year: (1) Employer Contributions; (2) Forfeitures; (3) Employee contributions; and (4) Allocations under a simplified employee pension. Amounts allocated, after March 31, 1984, to an individual medical account, as defined in section 415(1)(2) of che Code, which is part of a pension or annuity plan maintained by che Employer, are treated as Annual Additions to a defined contribution plan. For this purpose, any Excess Amount applied under Sections 5.01 (d) OF- 5.02(f) in the Limitation Year to reduce Employer Contributions will be considered Annual Additions for such Limitation Year. (b) Compensation: A Participant's wages, salaries, and fees for professional services and other amounts received (without regard to whether an amount is paid in cash) for personal services actually rendered in the course of employment wich the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as described in Treas. Reg. section 1.62-2(c))), and excluding the following: (1) Employer Contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, ~r Employer Contributions ~.<:.'. . -- FHSRAC February 27, 2007 Agenda Item E Page 16 of 48 under a simplified employee pension plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation; and (2) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403(b) of the Code (whether or not the amounts are actually exchldable from the gross income of the Employee). (3) Notwithstanding the above, Compensation shall include: (i) any elective deferrals (as defined in section 402(g)(3) of the Code), and (ii) any amount which is contributed or deferred by the Employer at the election of . the Employee and which is not includible in the gross income of the Employee by reason of sections 125, 132(f)(4) or 457 of the Code. For purposes of applying the limitations of this Article, Compensation for a Limitation Year is the Compensation actually paid or made available during such year. (c) Defined Contribution Dollar Limitation: $40,000, as adjusted for increases in the co.st-of-living in accordance with section 415(d) of the Code. (d) Employer: The Employer that adopts this Plan. (e) Excess Amount: The excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible AIDount. ' Any Excess Amount shall include allocable income. The income allocable to an Excess Amount is equal to the sum of allocable gain or loss for the Plan Year and the allocable gain or loss for the period between the end of the Plan Year and the date of distribution (the gap period). The Plan may use any reasonable method for computing the income allocable to an Excess Amount, provided that the method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants' Accounts. (f) Limitation Year: A calendar year, or the twelve (12) consecutive month period elected by the Employer in the Adoption Agreement. ,All qualified plans maintained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different twelve (12) consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amend- ment is made. (g) Maximum Permissible Amount: The maximum Annual Addition that may be contributed or allocated to a Participant's Account under the Plan for any Limitation Year shall not exceed the lesser of: (1) The Defined Contribution Dollar Limitation, or (2) One hundred percent (100%) (25% for Limitation Years before January 1,2002) of the Participant's Compensation for the Limitation Year. The compensation limit referred to in (2) shall not apply to any contribution for medical benefits after separation from service (within the meaning of section 401 (h) or section 419A(f)(2) of the Code) which is otherwise treated as an annual addition. FH5RAC February 27, 2007 Agenda Item E Page 17 of 48 ~' If a short Limitation Year is created because of an amendment changing the Limitation Year ro a differ- ent twelve (12) consecurive month period, the Maximum Permissible Amount will not exceed the Defined Contribution Dollar Limitation multiplied by the following fraction: Number of months in the short Limitation Year 112 VI. . TRUST AND INVESTMENT OF ACCOUNTS' 6.01 Trust. A Trust is hereby created to hold al.1 of the assets of the Plan for the exclusive benefit of Participants and Beneficiaries, except that expenses and taxes may be paid from the Trust as provided in Section 6.03. The trustee shall be the Employer or such other person which agrees to act in that capacity hereunder. 6.02 Investment Powers. The trustee or the Plan Administrator, acting as agent for the trustee, shall have the powers listed in this Section with respect to investment of Trust assets, exc;ept ro the extent that the investment ofTnist assets is controlled by Participants, pursuant to Section 0.03. . -.... :";.'~., (a) To invest and reinvest the Trust without distinction between principal and income in common or preferred srocks, shares of regulated investment companies and other murual funds, bonds, notes, "debentures, mortgages, certificates of deposit, contracts with insurance companies including bur not limited to insurance, individual or group annuity, deposit administration, guaranteed interest contracts, and deposits at reasonable rates of interest at banking institurions including but not limited to savings accounts and certificates of deposit. Assets of the Trust may be invested in securities that involve a higher degree of risk than investments that have demonstrated their investment performance over an extended period of time. (b) To invest and reinvest all or any parr of the assets of the Trust in any common, collective or com- mingled trust fund that is maintained by a bank or other institution and that is available ro Employee plans qualified under section 401 of the Code, or any successor provisions therero, and during the period of time that an investment through any such medium shall exist, to the extent of participation of the Plan, the declaration of trust of such common, collective, or commingled trust fund shall constitute a part of this Plan. (c) . To invest and reinvest all or any part of the assets of the Trust in any group annuity, deposit administration or guaranteed interest contract issued by an insurance company or other financial institution on a commingled or collective basis with the assets of any other plan or trust qualified under section 401 (a) of the Code or any other plan described in section 401 (a)(24) of the Code, and such contract may be held or issued in the name of the Plan Administrator, or such cusrodian as the Plan Administraror may appoint, as agent and nominee for the Employer. During the period that an investment through any such contract shall exist, ro the extent of participation of the Plan, the terms and conditions of such contract shall constitute a part of the Plan. (d) To hold cash awaiting investment and to keep such portion of the Trust in cash or cash balances, without liability for interest, in such amounts as may from time ro ti~ be deemed to be reasonable and necessary ro meet obligations under the Plan or otherwise ro be in the best interests of the Plan. (e) To hold, ro authorize the holding of, and ro register any investment ro the Trust in the name of the Plan, the Employer, or any nominee or agent of any of the foregoing, including the Plan Administrator, or in bearer form, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by any other person, and to organize corporations or trusts under the laws of any jurisdiction for the purpose of acquiring or holding tide ro any property for the Trust, all with or without the addition of words or other action~~o indicate that property is held in a fiduciary or representative capacity bur the books and records of the Plan shall at all times show that all such investments are part of the Trust. . FHSRAC February 27,2007 Agenda Item E Page 18 of 48 (f) Upon such terms as may be deemed advisable by the Employer or the Plan Administrator, as the case may be, for the protection of the interests of the Plan or for the preservation of the value of an invest- ment, to exercise and enforce by suit for legal or equitable remedies or by other action, or to waive any right or claim on behalf of the Plan or any default in any obligation owing to the Plan, to 'renew, extend the time fOt payment of, agree to a reduction in the rate of interest on, or agree to any other modification or change in the terms of any obligation ~wing to the Plan, to settle, compromise, adjust, or submit to arbitration any claim or right in favor of or against the Plan, to exercise and enforce any and all rights of foreclosure, bid for property in foreclosure, and take a deed in lieu of foreclosure with or without paying consideration therefor, to commence or defend suits or other legal proceedings ,whenever any interest of the Plan requires it, and to represent the Plan in aU suits or legal proceedings in any court of law or equity or before any body or tribunal. (g) To employ suitable consultants, depositories, agents, and legal counsel on behalf of the Plan. (h) To open and maintain any bank account or accounts in the name of the Plan, the Employer, or any nominee or agent of the foregoing, including the Plan Administrator, in any bank or banks. (i) To do any and all other acts rhat may be deemed necessary to carry out any of the powers set forth herein. 6.03 Taxes and Expenses. All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect to the Trust, or the income thereof, and all commissions or acquisitions or dispositions of securities and similar expenses of investment and reinvestment of the Trust, shall be paid from the Trust. Such reasonable compensation of the Plan Administrator, as may be agreed upon from time tp time by the Employer and the Plan Administrator, and reimbursement for reasonable expenses incurred by the Plan Administrator in performance of its duties hereunder (including but not limited to fees for legal, accounting, investment and custodial services) shall also be paid from the Trust. However, no person who is a fiduciary within the meaning of section 3(2 i)(A) of ERISA and regulations promulgated thereunder, and who receives full-time pay from the Employer may receive compensation from the Trust, except for expenses properly and actually incurred. 6.04 Payment of Benefits. The payment of benefits from the Trust in accordance with the terms of the Plan may be made by the Plan Administrator, or by any custodian or other person so authorized by the Employer to make such disbursement. Benefits under this Plan shall be paid only if the Plan Administrator, custodian or other person decides in his/her discretion that the applicant is entitled to them. The Plan Administrator, custodian or other person shall not be liable with respect ro any distribution of Trust assets made at the direction of the Employer. 6.05 Investment Funds. In accordance with uniform and nondiscriminatory rules established by the Employer and the Plan Administrator, the Participant may direct his/her Accounts to be invested in one (1) or more investment funds available under the Plan; provided, however, that the Participant's investment directions shall not violate any investment restrictions established by the Employer and shall not include any investment in collectibles, as defined in section 408(m) of the Code. 6.06 Valuation of Accounts. As of each Accounting Date, the Plan assets held in each investment fund offered shall be valued at fair market value 'and the investment income and gains or losses for each fund shall be determined. Such investment income and gains or losses shall be allocated proportionately among all Account balances on a fund-by-fund basis. The allocation shall be in the proportion that each such Account balance as of the immediately preceding Accounting Date bears to the total of all such Account balances as of that Accounting Date. For purposes of this Article, all Account balances include the Account balances of all Participants and Beneficiaries. 6.07 Participant Loan Accounts. Participant Loan Accounts shall be invested in accordance with Section 13.03 of the Plan. Such Accounts shall not share in any investment income and gains or losses of the investment funds described in Section 6.05. FHSRAC February 27, 2007 Agenda Item E Page 19 of 48 ~'<<' ~' ',< ~;"",-. ..~~::. .' VII. VESTING 7.01 Vesting Schedule. The portion of a Participant's Account attributable to Mandatory Participant Contr.ibu- tions and Voluntary Participant Contributions, and the earnings thereon, shall be at all times nonforfeitable by the Participant. A Participant shall have a Nonforfeitable Interest in the percentage of his/her Employer Contribution Account established under Section 4.01 and 4.04 determined pursuant to the schedule elected by the Employer in the Adoption Agreement. < 7.02 Crediting Periods of Service. Except as provided in Section 7.03, all of an Employee's Periods of Service with the Employer are counted to determine the nonforfeitable percentage in the Employee's Account balance derived from Employer Contributions. If the Employer maintains the plan of a predecessor employer, service with such employer will be treated as service for the Employer. For purposes of determining years of service and Breaks in Service for the purposes of computing a Participant's nonforfeitable right to the Account balance derived from Employer Contributions, the twelve (12) consecutive month period will commence on the date the Employee first performs an hour of service and each subsequent twelve (12) consecutive month period will commence on the anniversary of such date. 7.03 Service After Break in Service. In the case of a Participant who has a Break in Service of at least five (5) years, all Periods of Service after such Breaks in Service will be disregarded for the purpose of determining the nonforfeitable percentage of the Employer-derived Account balance that accrued before such Break, but both pre-Break and post-Break service will count for the purposes of vesting the Employer-derived Account balance that accrues after such Break. Both Accounts will share in the earnings and losses of the fund. In the case of a Participant who does not have a Break in Service of at least five (5) years, both the pre-Break and post-Break service will count in vesting both the pre-Break and post-Break Employer-derived Account balance. In the case of a Participant who does not have any nonforfeitable right to the Account balance derived from Employer Contributions, years of service before a period of consecutive one (1) year Breaks in Service will not be taken into account in computing eligibility service if the number of consecutive one (1) year Breaks in Service in such period equals or exceeds the greater of five (5) or the aggregate number of years of service. Such aggregate number of years of service will not include any years of service disregarded under the preceding sentence by reason of prior Breaks in Service. If a Participant's years of service are disregarded pursuant to the preceding paragraph, such Participant will be treated as a new Employee for eligibility purposes. If a Participaqt's years of service may not be disregarded pursuant to the preceding paragraph, such Participant shall continue to participate in the Plan, or, if terminated, shall participate immediately upon reemployment. 7.04 Vesting Upon Normal Retirement Age. Notwithstanding Section 7.01 of the Plan, a Participant shall have a Nonforfeitable Interest in his/her entire Employer Contribution Account, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan, ifhe/she is employed on or after his/her Normal Retirement Age. 7.05 Vesting Upon Death or Disability. Notwithstanding Section 7.01 of the Plan, in the event of Disability or death, a Participant. or his/her Beneficiary shall have a Nonforfeitable Interest in his/her entire Employer Contribution Account, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan. 7.06 Forfeitures. Except as provided in Sections 7.04 and 7.05 of the Plan or as otherwise provided in this Section 7.06, a Participant who separates from service prior to obtaining full vesting shall forfeit that percentage of _' his/her Employer Contribution Account balance which has not vested as of the date such Participant incurs a Break in Service of five (5) consecutive years or, if earlier, the date such Participant receives, or is deemed under - FHSRAC February 27,2007 Agenda Item E Page 20 of 48 the provisians af Sectian 9.04 to. have received, distributian af the entire Nanfarfeitable Interest in his/her Emplayer Cantributian Accaunt. No. farfeiture will accur solely as a result af a Participant's withdrawal af Emplayee Cantributians. Farfeitures shall be allacated in the manner described in Sectian 4.02. 7.07 Reinstatement of Forfeitures. If the Participant returns to. the emplayment af the Emplayer befare incurring a Break in Service of five (5) cansecutive years, any amaunts farfeited pursuant to Sectian 7.06 shall be reinstated to the Participant's Emplayer Cantributian Accaunt an the date af repayment by the Participant af the amaunt , distributed to such Participant from his/her Emplayer Cantribution Accaunt; provided, hawever, that if such Participant farfeited his/her Accaunt balance by reasan of a deemed distributian, pursuant to Sectian 9.04, such amaunts shall be automatically restared upan the reemplayment af such Participant. Such repayment must be made before the earlier af five (5) years after the first date an which the Participant is subsequently reemplayed by the Employer, ar the date the Participant incurs a Break in Service af five (5) cansecutive years. VIII. BENEFITS CLAIM 8.01 Claim of Benefits. A Participant ar Benefi~iary shall notify the Plan Administrator in writing of a claim af benefits under the Plan. The Plan Administrator shall take such steps as may be necessary to facilitate the payment of such benefits to the Participant ar Beneficiary. 8.02 Appeal Procedure. If any claim for benefits is initially denied by the Plan Administratar, the claimant shall file the appeal with the Emplayer, whose decisian shall be final, to. the extent provided by Sectian 15.07. IX. COMMENCEMENT OF BENEFITS 9.01 Normal and Elective Commencement of Benefits. A Participant who. retires, becames Disabled ar incurs a severance fram employment (separation from service far Plan Years beginning befare 2002) far any other reasan may elect by written natice to the Plan Administrator to have his or her vested Accaunt balance benefits cammence an any date, provided that such distributian complies with Sectian 9.02. Such election must be made in writing during the ninery (90) day periad ending an the date as af which benefit payments are to cammence. A Participant's electian shall be revocable and may be amended by the Participant. ' The failure af a Participant to. cansent to a distributian while a benefit is immediately distributable, within the meaning af sectian 9.02 of the Plan, shall be deemed to. be an e1ectian to. defer cammencement af payment of any benefit. 9.02 Restrictions on Immediate Distributions. Natwithstanding anything to. the cantrary in Sectian 9.01 of the Plan, if the value af a Participant's vested Accaunt balance is at least $1,000, and the Accaunt balance is immediately distributable, the Participant must cansent to any distributian of such Accaunt balance. The Participant's cansent shall be abtained in writing during the ninery (90) day periad ending an the date as af which benefit payments are to cammence. No. cansent shall be required, however, to the extent that a distribution is required to satisfy section 401 (a)(9) ar 415 af the Code. The Plan Administrator shall natify the Participant of the right to defer any distribution until the Participant's Accaunt balance is no. langer immediately distributable. Such natificatian shall include a general description af the matetial features, and an expl~nation of the relative values af, the aptianal farms of benefit available under the Plan in a mannet that would satisfy section 417(a)(3) of the Cade, and shall be provided no. less than thirry (30) and no. mare than ninery (90) days befare the date as af which benefit payments are to cammence. Hawever, distributian may cammence less than thirry (30) days after the natice described in the preceding' sentence is given, provided (i) the distributian is ane to. which sectians 401 (a)(1l) and 417 af the Code do. not apply ar, if the Q]SA Electian is made by the Emplayer in the Adaptian Agreement, the waiver requirements af Section 17.04(a) are met; (ii) the Plan Administrator dearly infarms the Participant that the Participant FHSRAC February 27,2007 Agenda Item E Page 21 of 48 rJ_._-_"'-~ ~i: .:t'- <' k~ W t,- has a right to a period of at least thirty (30) days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option); and (iii) the Participant, after receiving the notice, affirmatively elects a distribution. In addition, upon termination of this Plan if the Plan does not offer an annuity option (purchased from a commercial provider) and if the Employer does not maintain another 401 (a) defined contribution plan, the Participant's Account balance will, without the Participant's consent, be distributed to the Participant in a lump sum. However, if the Employer maintains another 401 (a) defined contribution plan, the Participant's Account balance will be transferred, without the Participant's consent, to the other plan if the Participant does not consent to an immediate distribution. An Account balance is immediately distributable if any part of the Account balance could be distributed to the Participant (or surviving spouse) before the Participant attains or would have attained (if not deceased) the later of Normal Retirement Age or age sixty-two (62). for purposes of determining the applicability of the foregoing consent requirements to distributions made before the first day of the first plan year beginning after December 31, 1988, the Participant's vested AccoUnt balance shall not include amounts attributable to accumulated deductible employee contributions within the meaning of section 72(0)(5)(8) of the Code. 9.03 Transfer to Another Plan. (a) If a Participant becomes eligible to participate in another plan maintained by the Employer that is qualified under section 401(a) of the Code, the Plan Administrator shall, at the written election of such Participant, transfer all or part of such Participant's Account to such plan, provided the plan administrator for such plan certifies to the Plan Administrator that its plan provides for the acceptance of such a transfer. Such transfers shall include those transfers of the nonforfeitable interest of a Participant's Account made for the purchase of service credit in defined benefit plans maintained by the Employer. For purposes of this Plan, any such transfer shall not be considered a distribution to the Participant subject to spousal consent as described in Section 9.10. (b) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee's' election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. (c) Definitions. For the purposes of Subsection (b), the following definitions shall apply: (1) Eligible Rollover Distribution. Any distribution of all or any po.rtion of the balance to the credit of the Distribute~, except that an Eligible Rollover Distribution does not include: (i) any distribution that is one of a series of s~bstantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated beneficiary, or for a specified period of ten years or more; (ii) any distribution to the extent such distribution is required under section 401 (a)(9) of the Code; and (iii) the portion of any other distribution(s) that is not includible in gross income. A portion of a distribution shall not fail to be an eligible rollover distribution merely _ because the portion consists of after-tax employee contributions which are not includible in gross jncome. However, such portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) of the Code, or to a FH5RAC February 27,2007 Agenda Item E Page 22 of 48 qualified defined contribution plan described in section 401 (a) or 403(a) of the Code ~hat agrees to separately account for amounts so uansferred, including separarely accounting for rhe porrion of such distribution which is includible in gross income and the. pOrtion of such distribution which is not so includible. (2) Eligible Retirement Plan. (i) an individual retirement account described in section 408(a) of the Code or an individual retirement annuity described in section 408(b) of the Code (collectively, an "IRA"); (ii) an annuity plan described in section 403(a) of the Code; (iii) an annuity contract described in section 403(b) of the Code, , (iv) an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan; or (v) a qualified plan described in section 40 1 (a) of the Code, that accepts the Distributee's Eligible Rollover Distribution. The definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee, under a qualified domestic relations order, as defined in section 414(p) of the Code. (3) Distributee. Participant; in addition, the Participant's surviving spouse and the, spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in section 414(p) of rhe Code, are Distriburees with regard to the interest of the spouse or former spouse. (4) Direct Rollover. A payment by the Plan to the Eligible Retirement Plan specified by the Distributee. 9.04 De Minimis Accounts. Notwithstanding rhe foregoing provisions of this Arricle, prior to January 1, 2002, if a Participant terminates service, and the value of his/her Nonforfeitable Interest in his/her Account is not greater than the dollar limit under section 411(a)(l1)(A) of the Code, the Participant's benefit shall be paid (co the extent it constitutes an Eligible Rollover Distribution) in the form of a direct rollover to the Plan Administrator's designated IRA, unless he/she affirmatively elects to receive a cash payment or a Direct Rollover in accordance with procedures established by the Plan Administrator. On or after Januaty 1, 2002, if a Participant terminates service, and the value of his/her Nonforfeitable Interest in his/her Account is less than $1,000, the Participant's benefit shall be paid as-soon as practicable to the Participant in a single lump sum distribution. If the value of the Participant's Account is at least $1,000 but not more than the dollar limit under section 411 (a) (11 )(A) of the Code, the Participant may elect to receive his/her Nonforfeitable Interest in his/her Account. Such distribution shall be made as soon as practicable following the request, in a lump sum. For purposes of this Section, if a Participant's Nonforfeitable Interest in 'his/her Account is zero, the Participant shall be deemed to have received a distribution of such Nonforfeitable Interest in his/her Account. 9.05 Withdrawal of Voluntary Contributions. A Participant may upon written request withdraw a part of or the full amount of his/her Voluntary Contribution Account. Such withdrawals may be made at any time, provided that no more than two (2) such withdrawals may be made during any calendar year. No forfeiture will occur solely as the result of any such withdrawal. FH5RAC February 27, 2007 Agenda Item E Page 23 of 48 . 9.06 Withdrawal of Deductible Employee Contributions. A Participant may upon written request withdraw a part of 0; the full amount of his/her Deductible Employee Contribution Account. Such withdrawals may be made at any time, provided that no more than two (2) such withdrawals may be made during any calendar year. No forfeiture will occur solely as the result of any such withdrawal. 9.07 In-Service Distribution from Rollover Account. Where elected by the Employer in the Adoption Agreement, a Participant that has a separate account attributable to rollover contributions to the Plan; may at any time elect to receive a distribution of all or any portion of the amount held in the Rollover Account, provided that no more than two (2) such distributions may be made during 'any calendar year. 9.08 In-Service Distributions. Unless otherwise elected by the Employer in the Adoption Agreement, a Participant who has reached age 70-112 regardless of his Nonforfeitable Interest in his/her entire Employer Contribution Account, shall, upon written request, receive a distribution of a part of or the full amount of the balance in any or all of his vested Accounts. Such distributions may be requested at any time, provided that no more than two (2) such distributions may be made during any calendar year. 9.09 Latest Commencement of Benefits. Notwithstanding anything to the contrary in this Article, benefits shall begin no later than the Participant's Required Beginning Date, as defined under Section 10.05, or as otherwise provided in.Section 10.04. 9.10 Spousal Consent. Notwithstanding t~e foregoing, if the Employer elected the Q]SA Election in the Adoption Agreement, a married Participant must first obtain his or her spouse's notarized consent to request a distribution (other than a Qualified Joint and Survivor Annuity), withdrawal, or rollover under this Article IX. X. DISTRIBUTION REQUIREMENTS 10.01 General Rules. (a) Subject to the provisions of Article XU or xvn if so elected by the Employer in the Adoption Agreement, the requirements of this Article shall apply to any distribution of a Participant's interest and will take precedence over any inconsistent provisions of this Plan. Unless otherwise specified, the provisions of this (\rtide X apply to calendar years beginning after December 31, 2002. With respect to distributions under the Plan made in or for Plan Years beginning on or after January 1,2002 and prior to January 1, 2003, the Plan will apply the minimum distribution requirements of section 401 (a)(9) of the Code in accordance with the regulations under section 401 (a)(9) that were proposed on January 17, 2001, notwithstanding any provision of the Plan to the contrary. (b) All distributions required under this Article shall be determined and made in accordance with the regulations under section 401 (a) (9) of the Code, and the minimum distribution incidental benefit requirement of section 401(a)(9)(G) of the Code. (c) Limits on Distribution Periods. As of the first Distribution Calendar Year, distributions to a Participant', if not made in a single-sum, may only be made over one 01 the following periods: (1) The life 'of the Participant; or (2) The joint lives of the Participant and a designated Beneficiary; or (3) A period certain not extending beyond the life expectancy of the Participant; or (4) A period certain not extending beyond the joint and last survivor expectancy of the Participant and a designated Beneficiary. FH5RAC February 27,2007 Agenda Item E Page 24 of 48 (d) TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Article XVII, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) ofTEFRA. 10.02 Time and.Manner of Distribution (a) Required Beginning Date. The Participant's entire interest will, be distributed, or begin to be distributed, to, the Participant no later than the Participant's required beginning date. (b) Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows: (l) If the Participant's surviving spouse is the Participant's sole designated Beneficiary, then, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later. (2) If the Participant's surviving spouse is not the Participant's sole designated Beneficiary, then distributions to the designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (3) If there is no designated Beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (4) If the Participant's surviving spouse is the Participant's sole designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 1O.02(b), other than Section 10.02(b)(l), will apply as if the surviving spouse were the Participant. \ For purposes orthis Section 10.02(b) and Section 10.04, unless Section 10.02(b)(4) applies, distributions are considered to begin on the Participant's required beginning date. If Section 10.02(b)(4) applies, distributions are considered to begin on the date distributions are required ro begin to the surviving spouse under Section 10.02(b)(1). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's required beginning date (or to the Participant's surviving spouse before the 1ate distributions are required to begin to the surviving spouse under Section 10.02(b)(l)), the date distributions are considered to begin is the date distributions actually commence. (c) Forms of Distribution. Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections ~0.03 and 10.04. If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401 (a)(9) and the Treasury Regulations. 10.03 Required Minimum Distributions During Participant's Lifetime (a) Amount of Required Minimum Distribution For Each Distribution Calendar Year. During the Participant's lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: (1) The quotient obtained by dividing the Participant's Account Balance by the distribution FH5RAC February 27, 2007 Agenda Item E Page 25 of 48 ~~~c" lr,~Mi':J;" ~f!r'!1; period set forth in the Uniform Lifetime Table found in Section 1.401 (a)(9)-9, Q&A-2, of the Final Income Tax Regulations using the Participant's age as of the Participant's birthday in the distribution calendar year; or (2) , If the Participant's sole designated Beneficiary for the distribution calendar year is the Participant's spouse, the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.40 1 (a)(9)-9, Q&A-3, of the regulations using the Participant's and spouse's attained ages as of the Participant's ;md spouse's birthdays in the distribution calendar year. (b) Lifetime Required Minimum Distributions Continue Through Year of Participants Death. Required minimum distributions will be determined under this Section 10.03 beginning with the first distribution calendar year and continuing up to, and including, the distribution calendar year that includes the Participant's date of death. 10.04 Required Minimum Distributions After Participant's Death (a) Death On or After Date Distributions Begin. (1) Participant Sur.vived by Designated Be~eficiary. If the Participant dies on or after the date distributions begin and there is a designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining life expectancy of the Participant or the rernaininglife expectancy of the Participant's designated Beneficiary, determined as follows: (i) The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (ii) If the Participant's surviving spouse is the Participant's sole designated Beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year of the surviving spouse's death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year. (iii) If the. Participant's surviving spouse is not the Participant's sole designated Beneficiary, the designated Beneficiary's remaining life expectancy is calculated using the age of the Beneficiary.in the year following the year of the Participant's death, reduced by one for each subsequent year. (2) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated Beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (b) Death Before Date Required Distributions Begin. - (1) Participant Survived by Designated Beneficiary. If the Participant dies before the date required distributions begin and there is a designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is FH5RAC February 27,2007 Agenda Item E Page 26 of 48 the quotient obtained by dividing the Participant's Account Balance by the remaining life expectancy of the Participant's designated Beneficiary, determined as provided in Section 1O.04(a). (2) No Designated Beneficiary If the Participant dies before the date distributions begin and 'there is no designated Beneficiary as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (3) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date disrributions begin, the Participant's surviving spouse is the Participant's sole designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 1O.02(b)(l), this Section 10.04(b) will apply as if the surviving spouse were the Participant., 10.05 Definitions (a) Designated Beneficiary. The individual who is designated by the Participant (or the Participant's surviving spouse) as the Beneficiary of the Participant's interest under the Plan and who is the designated Beneficiary under Code Sectio n 40 1 (a)( 9) and Section 1. 401 (a)( 9 )-4 of the regulatio ns. (b) Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar 'year which contains the Participant's required beginning date. For distributions beginning after the Participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 1O.02(b). The required minimum distribution for the Participant's first distribution calendar year will be made on or before the Participant's required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant's required beginning dare occurs, will be made on or before December 31 of that distribution calendar year. (c) Life Expectancy. Life expectancy as computed by use of the Single Life Table in Section 1.401 (a)(9)- 9, Q&A~ 1, of the regulations. (d) Participants Account Balance. The Account Balance as of the last Accounting Date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any conrributions made and allocated or forfeitures allocated to the Account Balance as of dates in the valuation calendar year after the Accounting Date and decreased by distributions made in the valuation calendar year after the Accounting Date. The Account Bata.nce for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year. (e) Required Beginning Date. The Required Beginning Date of a Participant is April 1 of the calendar year following the later of the calendar year in which the Participant attains age seventy and one-half (70-1/2), or the calendar year in which the Participant retires. XI. MODES OF DISTRIBUTION OF BENEFITS 11.01 Normal Mode ~f Distribution. Unless an elective mode of distribution is elected as provided in Section 11.02, benefits shall be paid to the Participant in the form of a lump sum payment. Notwithstanding the foregoing, where the Employer made the "QJSA Election" in the Adoption Agreement, unless an elective mode of distribution is elected in accordance with Article XVII, benefits shall be paid to the Participant in the form provided for in Article XVII. FH5RAC February 27,; 2007 Agenda Item E Page 27 of 48 11.02 Elective Mode of Distl;"ibution. Subject to the requirements of Articles X, XlI and XVII, a Participant may revocablyelect to have his/her Account distributed in anyone (1) of the following modes in lieu of the mode described in Section 11.01: (a) Equal Payments. Equal monthly, quarterly, semi-annual, or annual payments in an amount chosen by the Participant continuing until the Account is exhausted. (b) Period Certain. Approximately equal monthly, quarterly, semi-annual, or annual payments, calculated to continue for a period certain chosen by the Participant. (c) Other. Any other sequence of payments requested by the Participant. (d) Lump Sum. Where the Employer did make the Q]SA Election in the Adoption Agreement, a Participant may also elect a lump sum payment. 11.03 Election of Mode. A Participant's election of a payment option must be made in writing between thirty (30) and ninety (90) days before the payment of benefits is to commence. 11.04 Death Benefits. Subject to Article X (and Article XlI or XVII if so elected by the Employer in the Adoption Agreement), (a) In the case of a Participant who dies before he/she has begun receiving benefit payments, the Participant's entire Nonforfeitable Interest shall then be payable to his/her Beneficiary within ninety (90) days of the Participant's death. A Beneficiary who is entitled to receive benefits under this Sec- tion may' elect to have benefits commence at a later date, subject to the provisions of Article X. The Beneficiary may elect to receive the death benefit in any of the forms available to the Participant under Sections 11.01 and 11.02. If the Beneficiary is the Participant's surviving spouse, and such surviving spouse dies before payment commences, then this ,Section shall apply to the beneficiary of the surviving spouse as though such surviving spouse were the Participant. (b) Should the Participant die after he/she has begun receiving benefit payments, the Beneficiary shall receive the remaining benefits, if any, that are payable, under the payment schedule elected by the Participant., Notwithstanding the foregoing, the Beneficiary may elect to accelerate payments of the remaining balances, induding but not limited to, a lump sum distribution. XII. SPOUSAL DEATH BENEFIT REQUIREMENTS 12.01 Application. Unless otherwise elected by the Employer in the Adoption Agreement, on or after January 1, 2006, the provisions of this Article shall take precedence over any conflicting provision in this Plan. The provisions of this Article, known as the "Beneficiary Spousal Consent Election," shall apply to any Participant who is credited with any Period of Service with the Employer on or after August 23, 1984, and such other Participants as provided in Section 12.04. 12.02 Spousal Death Benefit. (a) On the death of a Participant, the Participant's Vested Account Balance will be paid to the Participant's Surviving Spouse. If there is no Surviving Spouse, or if the Participant has waived the spousal death benefit, as provided in Section 12.03, such Vested Account Balance will be paid to the Participant's designated Beneficiary. (b) The Surviving Spouse may elect to have distribution of the Vested Account Balance commence within the ninety (90) day period following the date of the Participant's death, or as otherwise provided under Section 11.04. The Account balance shall be adjusted for gains Ot losses occurring after the Participant's death in accotdance with the provisions of the Plan governing the adjustment of Account balances for other types of distributions. FH5RAC February 27, 2007 Agenda Item E Page 28 of 48 12.03 Waiver of Spousal Death Benefit. The Participant may waive the spousal death benefit described in Section 12.02 at any time; provided that no such waiver shall be effective unless: (a) the Participant's Spouse consents in writing to the election; (b) the election designates a specific Beneficiary, including any class of Beneficiaries or any contingent Beneficiaries, which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further spousal consent); . (c) the Spouse's consent acknowledges the effect of the election; and (d) the Spouse's consent is witnessed by a Plan representative or notary public. If it is established to the satisfaction of a Pliln representative that there is no Spouse or that the Spouse cannot be located, a waiver will be deemed to meet the requirements of this Section. Any consent by a Spouse obtained under this provision (or establishment that the consent of a Spouse may not be obtained) shall be effective only with respect to such Spouse. A consent that permits designations by the Participant without any requirement of further consent by such Spouse must acknowledge that the Spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the Spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the commencement of benefits. The number of revocations shall not be limited. 12.04 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the Participant', provided that a former Spouse will be treated, as the Spouse or Surviving Spouse and a current Spouse will not be treated as the Spouse or Surviving Spouse to the extent provided under a qualified domestic relations order as described in section 414(p) of the Code; and (b) Vested Account Balance: The aggregate value of the Participant's vested Account balances derived from Employer and Employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the Participant's life. The provisions of this Article shall apply to a Participant who is vested in amounts attributable to Employer Contributions, Employee contriblitions (or both) at the time of death or distribution. XIII. LOANS TO PARTICIPANTS 13.01 Availability of Loans to Participants. (a) If the Employer has elected in the Adoption Agreement to make loans available to Participants, a Participant may apply for a loan from the Plan subject to the limitations and other provisions of this Article. (b) The Employer shall establish written guidelines governing the granting ofloans, provided that such guidelines are approved by the Plan Administrator and are not inconsistent with the provisions of this Article, and that loans are made available to all Participants on a reasonably equivalent basis. 13.02 Terms and Conditions of Loans to Participants. Any loan by the Plan to a Participant under Section 13.01 of the Plan shall satisfy the following requirements: ' (a) Availability Loans shall be made available to all Participants on a reasonably equivalent basis. , " FH5RAC February 27, 2007 Agenda Item E' Page 29 of 48 -,,~.. . ;'<dt~ _.{(~ (b) Nondiscrimination. Loans shall not be made to highly compensated Employees in an amount greater than the amount made available to other Employees. (c) Interest Rate. Loans must be adequately secured and bear a reasonable interest rate. (d) Loan Limit. No Participant loan shall exceed the present value of the Participant's Nonforfeitable .Interest in his/her Account. ' (e) Foreclosure. In the event of default, foreclosure on the note and attachment 'of security will not occur until a distributable event occurs in the Plan. (f) Reduction of Account. Notwithstanding any other provision of this Plan, the portion of the Participant's vested Account balance used as a security interest held by the Plan by reason of a loan . outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the time of death or distriburion, but only if the reduction is used as repayment of the loan. If less than one hundred percent (100%) of the Participant's nonforfeitable Account balance (determined without regard to the preceding sentence) is payable to the surviving spouse, then the Account balance shall be adjusted by first reducing the nonforfeitable Account bal- ance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse. (g) . Amount of Loan. At the time the loan is made, the principal amount of the loan plus the outstanding balance (principal plus accrued interest) due on any other outstanding loans to the Participant or Beneficiary from the Plan and from all other plans of the Employer that are qualified employer plans under section 72(p)(4) of the Code shall not exceed the lesser of: (1) $50,000, reduced by the excess (if any) of (i) The highest outstanding balance ofloans from the Plan during the one (1) year period ending on the day before the date on which the loan is made, over (ii) The outstanding balance of loans from the Plan on the date on which such loan is made; or (2) One-half (1I2) of the value of the Participant's Nonforfeitable Interest in all of his/her Accounts under this Plan (or $10,000, if greater, for loans p.cior to January 1, 2006). For the purpose of the above limitation, all loans from all qualified employer plans, including 457(b) plans, under Code section 72(p)(4) of the Code are aggregated. (h) Application for Loan. The Participant must give the Employer adequate written notice, as determined by the Employer, of the amount and desired time for receiving a loan. No more than one (1) loan may be made by the Plan to a Participant in any calendar year. No-loan shall be approved if an existing loan from the Plan to the Participant is in default to any extent. (i) Length of Loan. The terms of any loan issued or renegotiated after December 31, 1993, shall require the Participant to repay the loan in substantially equal installments of principal and interest, at least quarterly (except as otherwise provided in Treasury Regulation section l.72(p)-l, Q&A-9 for certain leave of absence and military leave), over a period that does not exceed five (5) years from the date of the loan; provided, however, that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be used within a reasonable time after the loan is made as the princi~ pal residence of the Participant, the five (5) year limit shall not apply. In this event, the period of repayment shall not exceed a reasonable period determined by the Employer. Principal installments FH5RAC February 27, 2007 Agenda Item E Page 30 of 48 and interest payments otherwise due may be suspended during an authorized leave of absence, if the promissory note so provides, but not beyond the original term permitted under this Subsection (i), with a revised payment schedule (within such term) instituted at the end of such period of suspension. If the Participant fails to make any installment payment, the Plan Administrator may, according to Treasury Regulation 1.72(p)-1, allow a cure period, which cure period cannot continue' beyond the last day of the calendar quarter following the calendar quarter in which the required installment payment was due. (j) Prepayment. The Participant shall be permitted to repay the loan in whole or in part at any time prior to maturity, without penalty. (k) Note. The loan shall be evidenced by a promissory note executed by the Participant and delivered to the Employer, and shall bear interest at a reasonable rate determined by the Employer. Unless waived by a Participant, any plan loan that is outstanding on the date that active duty military service begins will accrue interest at a rate of no more than 6% during the period of military service in accordance with the provisions of the Servicemembers Civil Relief Act (SCRA), 50 USC App. ~ 526 and subject to the notice requirements contained therein. This limitation applies even if loan payments are suspended during the period of military service as permitted under the Plan and Treasury regulations. (I) Security. The loan shall be secured by an assignment of that portion the Participant's right, tide and interest in and to his/her Employer Contribution Account (to the extent vested), Participant Contribution Account, and Rollover Account that is equal to fifty percent (50%) of the Participant's Account (to the extent vested). (m) Assignment or Pledge. For the purposes of paragraphs (h) and (i), assignment or pledge of any portion of the Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance contract purchased under the Plan, will be treated as a loan. (n) Spousal Consent. If the Employer elected the Q)SA Election in the Adoption Agre(':ment, the Participant must first obtain his or her spouse's notarized consent to the loan. (0) Other urms and Conditions. The Employer shall fix such other terms and conditions of the loan as it deems necessary to comply with legal requirements, to maintain the qualification of the Plan and Trust under section 401 (a) of the Code, or to prevent the treatment of the loan for t~ purposes as a distribution to the Participant. The Employet, in its discretion for any reason, may fix other terms and conditions of the loan, not inconsistent with the provisions of this Article. 13.03 Participant Loan Accounts. (a) Upon approval of a loan to a Participant by the Employer, an amount n6t in excess of the loan shall be transferred from the Participant's other investment fund(s), described in Section 6.05 of the Plan, to the Participant's Loan Account as of the Accounting Date immediately preceding the agreed upon date on which the loan is to be made. (b) The assets of a Participant's Loan Account may be invested and reinvested only in promissory notes received by the Plan from the Participant as consideration for a loan permitted by Section 13.01 of the Plan or in cash. Uninvested cash balances in a Participant's Loan Account shall not bear interest. No person who is otherwise a fiduciary of ' the Plan shall be liable for 'any loss, or by reason of any breach" that results from the Participant's exercise of such control. (c) Repayment of principal and payment of interest shall be made by payroll deduction or, where repay- ment cannot be made by payroll deduction, by check, and shall be invested in one (1) or more other FHSRAC February 27, 2007 Agenda Item E Page 31 of 48 investment funds, in acco~dance with Section 6.05 of the Plan, as of the next Accounting Date after payment thereof to the Ttust: The amount so invested shall be deducted from the Participant's Loan Account. (d) The Employer shall have the authority to establish other reasonable rules, not inconsistent with the provisions of the Plan, governing the establishment and maintenance of Participant Loan Accounts. XIv: PLAN AMENDMENT, TERMINATION AND OPTIONAL PROVISIONS 14.01 Amendment by Employer. The Employer reserves the right, subject to Section 14.02 of the Plan, to amend the Plan from time to time by either: (a) Filing an amended Adoption Agreement to change, delete, or add any optional provision; or (b) Continuing the Plan in the form of an amended and restated Plan and Trust. No amendment to the Plan ~hall ~e effective to the extent that it has the effect of decreasing a Participant's accrued benefit. Notwithstanding the preceding sentence, a Participant's Account balance may b.e reduced to the extent permitted under section 412(c)(8) of the Code. For purposes of this paragraph, a Plan amendment which has the effect of decreasing a Participant's Account balance or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee's right to his/her Employer-derived accrued benefit will not be less than his percentage computed under the plan without regard to such amendment. No amendment to the Plan shall be effective to eliminate or restrict an optional form of benefit. The preceding sentence shall not apply to a Plan amendment that eliminates or restricts the ability of a Participant to receive payment of hi~ or her Account balance under a particular optional form of benefit if the amendment provides a single-sum distribution form that is otherwise identical to the optional form of benefit being eliminated or restricted. For this purpose, a single-sum distribution form is otherwise identical only if the single-sum distribution form is identical in all respects to the eliminated or restricted optional form of benefit (or would be identical except that it provides greater rights to the Participant) except with respect to the timing of payments after commencement. The Employer may (1) change the choice of options in the Adoption Agreement, (2) add overriding language in the Adoption Agreement when such language is necessary to satisfY sections 415 or 416 of the Code because of the required aggregation of multiple plans, (3) amend administrative provisions of the trust or custodial document in the case of a nonstandardized plan and make more limited amendments in the case of a standardized plan such as the name of the plan, employer, trustee or custodian, plan administrator and other fiduciaries, the trust year, and the name of any pooled trust in which the Plan's trust will participate, (4) add certain sample or model amendments published by the Internal Revenue Service or other required good faith amendments which specifically provide that their adoption will not cause the plan to be treated as individually designed, and (5) add or change provisions permitted under.the Plan and/or specifY or change the effective date of a provision as permitted under .the Plan and correct obvious and unambiguous typographical errors and/or cross-references that merely correct a reference but that do not in any way change the original intended meaning of the provisions. 14.02 Amendment of Vesting Schedule. If the Plan's vesting schedule is amended, or the Plan is amended in any way that directly or indirectly affects the computation of the Participant's nonforfeitable percentage, each Participant may elect, within a reasonable period after the adoption of the amendment or change, to have the nonforfeitable percentage computed under the Plan without regard to such amendment or change. FH5RAC February 27, 2007 Agenda Item E Page 32 of.48 The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: ' (a) Sixty (60) days after the amendment is adopted; (b) Sixty (60) days after the amendment becomes effective; or (c) Sixty (60) days after the Participant is issued written notice of the amendment by the Employer or Plan Administrator. 14.03 Termination by Employer. The Employer reserves the right to terminate rhis Plan. However, in the event of such termination no part of the Trust shall be used or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries, except as provided in this Section. Upon Plan termination or partial termination, all Account balances shall be valued ar their fair market value and the Participant's right to his/her Employer Contribution Account shall be one hundred percent (100%) vested and nonforfeitable. Such amount and any other amounts held in the Participant's other Accounts shall be maintained for the Participant until paid pursuant to the terms of the Plan. . Any amounts held in a suspense account, after all liabilities of the Plan to Participants and Beneficiaries have been satisfied or provided for, shall be paid to the Employer in accordance with the Code and regulations thereunder. In the event that the Commissioner of Inrernal Revenue determines that the Plan is not initially qualified under the Internal Revenue Code, any contribution made by the Employer incident to that initial qualification must be returned to the Employer within one year after the date the initial qualification is denied, but only if the application for the qualification is made by the time prescribed by law for filing the Employer's ret~rn for the year in which the Plan is adopted, or such later date as rhe Secretary of the Treasury may prescribe. 14.04 Discontinuance of Contributions. A permanent discontinuance of contributions to the Plan by the Employer, unless an amended and restated Plan is established, shall constitute a Plan termination. In the event of a complete discontinuance of contributions under the Plan, the Account balance of each affected Participant shall be nonforfeitable. 14.05 Amendment by Plan Administrator. The Plan Administrator may amend this Plan upon thirty (30) days written notification to the Employer; provided, however, that any such amendment must be for the express purpose of maintaining compliance with applicable federal laws and regulations of the Internal Revenue Service. Such amendment shall become effective unless, within such 30-day period, the Employer notifies the Administrator, in writing, that it disapproves such amendment, in which case such amendment shall not become effective. In the event of such disapproval, the Administrator shall be under no obligation to continue acting as Administrator hereunder. 14.06 Optional Provisions. Any provision which is optional under this Plan shall become effective if and only if elected by the Employer and agreed to by the Plan AdmInistrator. X\( ADMINISTRATION 15.01 Powers ofthe Employer. The Employer shall have the following powers and duties: (a) To appoint and remove, with or without cause, the Plan Administrator; (b) To amend or terminate the Plan pursuant to the provisions of Article XIV; (c) To appoint a committee to facilitate administration of the Plan and communications to Participants; FHSRAC February 27, 2007 Agenda Item E Page 33 of 48 -" (d) To decide all questions of eligibility (1) for Plan participation, and (2) upon appeal by any Participant, Employee or Beneficiary, for the payment of benefits; (e) To engage an independent qualified public accountant, when required to do so by law, to prepare an- nually the audited financial statements of the Plan's operation; (f) To take all actions and to communicate to the Plan Administrator in writing all. necessary infotmation to catry out the tetms of the Plan and Trust; and (g) To notifY the Plan Administrator in writing of the termination of the Plan. 15.02 Duties of the Plan Administrator. The Plan Administrator shall have the following powers and duries: (a) To construe and interpret the provisions of the Plan; (b) To maintain and provide such teturns, reports, schedules, descriptions, and individual Account statements, as are required by law within the times prescribed by law; and to furnish to the Employer, upon request, copies of any or all such matetials, and further, to make copies of such instruments, reports, descriptions, and statements as ate required by law available for examination by Participants and such of their Beneficiaries who are or may be entitled to benefits under the Plan in such places and in such manner as required by law; (c) To obtain from the Employer such information as shall be necessary for the proper administration of the Plan; (d) To determine the amount, manner, and time of payment of benefits hereunder; (e) To appoint and retain such agents, counsel, and accountants for the purpose of properly administer- ing the Plan; (f) To distribute assets of the Trust to each Participant and Beneficiary in accordance with Article X of the Plan; (g) To pay expenses from the Trust pursuant to Section 6.03 of the Plan; and (h) To do such other acts reasonably required to administer the Plan in accordance with its provisions or as may be provided for or required by law. 15.03 Protection of the Employer. The Employer shall not be liable for the acts O.f omissions of the Plan Administrator, but only to the extent that such acts or omissions do not result from the Employer's failure to provide accurate or timely information as required or necessary for proper administration of the Plan. 15.04 Protection of the Plan Administrator. The Plan Administrator may rely upon any certificate, notice or direction purporting to have been signed on behalf of the Employer which the Plan Administrator believes to have been signed by a duly designated official of the Employer. 15.05 Resignation or Removal of Plan Administrator. The Plan Administrator may resign at any time effective upon sixty (60) days prior written notice to the Employer. The Plan Administrator may be removed by the Employer at any time ;"pon sixty (60) days prior written notice to the Plan Administrator. Upon the' ~~ ~~l~ It!~\_-, FH5RAC February 27, 2007 Agenda Item E Page 34 of 48 resignation or removal of the Plan Administrator, the Employer may appoint a successor Plan Administrator; failing such appointment, the Employer shall assume the powers and duties of Plan Administrator. Upon the resignation or removal of the Plan Administrator, any Trust assets invested by or held in the name of the Plan Administrator shall be transferred to the trustee in cash or property, at fair market value, except that the return of Trust assets invested in a contract issued by an insurance company shall be governed by the terms of that contract. 15.06 No Termination Penalty. The Plan Administrator shall have no authority or discretion to impose any termination penalty upon its removal. 15.07 Decisions of the Plan Administrator. All constructions, determinations, and inrerpretations made by the Plan Administrator pursuanr to Section 15.02(a) or (d) or by the Employer pursuant to Section 15.01 (d) shall be final and binding on all persons participating in the Plan, given deference in all courrs of law to the greatest extent allowed by applicable law, and shall not be 'overturned or set aside by any court of law unless found to be arbitrary or capricious, or made in bad faith. XVI. MISCELLANEOUS 16.01 Nonguarantee of Employment. Nothing conrained in this Plan shall be construed as a conrract of employment between the Employer and any Employee, or as a right of an Employee to be continued in the employmenr of the Employer, as a limitation of the right of the Employer to discharge any of its Employees, with or without cause. 16.02 Rights to Trust Assets. No Employee Ot Beneficiary shall have any right to, ot interest in, any assets of the Trust upon termination of his/her employmenr or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable under the Plan to such Employee or Beneficiary out of the assets of the Trust. All payments of benefits as provided for in this Plan shall be made solely out of the assets of the Trust and none of the fiduciaries shall be liable therefor in any manner. 16.03 Nonalienation of Benefits. Except as provided in Section 16.04 of the Plan, benefits payable under this Plan shall not be subject in any manner to anricipation, alienation, sale, transfer, assignmenr, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involunrary, prior to actually being received by the person entitled. to the benefit under the terms of the Plan; and any attempt to anricipate, alienate, selL transfer, assign, pledge, encumber, charge or otherwise dispose of any right to benefits payable hereunder, shall be void. The Trust shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder. 16.04 Qualified Domestic Relations Order. Notwithstanding Section 16.03 of the Plan, amounts may be paid with respect to a Participant pursuant to a domestic relations order, but if and only if the order is determined to be a qualified domestic relations order within the meaning of section 414(p) of the Code or any domestic relations order enrered before January 1, 1985. 16.05 Nonforfeitability of Benefits. Subject only to the specific provisions of this Plan, nothing shall be deemed to deprive a Participanr of his/her right to the Nonforfeitable Inrerest to which he/she becomes entitled in accord- ance with th~ provisions of the Plan. 16.06 Incompetency of Payee. In the evenr any benefit is payable to a minor or incompetenr, to a person otherwise under legal disability, or to a person who, in the sole judgment of the Employer, is by reason of advanced age, illness, or other physical or menralincapacity incapable of handling the disposition of his/her property, the Employer may apply the whole or any part of such benefic directly to the care, comfort, mainrenance, sup- port, education, or use of such person or payor distribute the whole or any part of such benefit to: (a) The parent of such person; FH5RAC February 27, 2007 Agenda Item E Page 35 of 48 (b) The'guardian, committee, or other legal representative, wherever appointed, of such person; (c) The person with whom such person resides; (d) Any person having the care and control of such person; or (e) Such person personally. The receipt of the person to whom any such payment or'distribution is so made shall be full and complete dis- charge therefor. 16.07 Inability to Locate Payee. Anything to the contrary herein notwithstanding, if the Employer is unable, after reasonable effort, to locate any Participant or Beneficiary to whom an amount is payable hereunder, such amount shall be forfeited and held in the Trust for application against the next succeeding Employer Contribution or contributions required to be made her~under. Notwithstanding the foregoing, however, such amount shall be reinstated, by means of an additional Employer contribution, if and when a claim for the forfeited amount is subsequently made by the Participant or Beneficiary or if the Employer receives proof of death of such person, satisfactory to the Employer. To the extent not inconsistent with applicable law, any benefits lost by reason of escheat under applicable' state law shall be considered forfeited and shall not be reinstated. 16.08 Mergers, Consolidations, and Transfer of Assets. The Plan shall not be merged into or consolidated with any other plan, nor shall any of its assets or liabilities be transferred into any such other plan, unless each Par- ticipant in the Plan would (if the Plan then terminated) receive a benefit immediately after the merger, con- solidation, or transfer that is equal to or greater than the benefit he/she would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then terminated). 16.09 Employer Records. Records of the Employer as to an Employee's or Participant's Period of Service, termina- tion of service and the reason therefor, leaves of absence, reemployment, Earnings, and Compensation will be conclusive on all persons, unless determined to be incorrect. 16.10 Gender and Number. The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. 16.11 Applicable Law. The Plan shall be construed under the laws of the State where the Employer is located, except to the extent superseded by federal law. The Plan is established with the intent that it meets the requirements under the Code. The provisions of this Plan,shall be interpreted in conformity with these reqUirements. In the event of any conflict between the Plan and a policy or contract issued hereunder, the Plan provisions shall control; provided, however, no Plan amendment shall supersede an existing policy or contract unless such amendment is required to maintain qualification under section 401 (a) and 414(d) of the Code. XVU. SPOUSAL BENEFIT REQUIREMENTS 17.01 Application. Effective as of January 1, 2006, where elected by the Employer in the Adoption Agreement (the "QJSA Election"), the provisions of this Article shall take precedence over any conflicting provision in this Plan. If elected, the provisions of this Article shall apply to any Participant who is credited with any Period of Service with the Employer on or after August 23, 1984, and such other Participants as provided in Section 17.05. 17.02 Qualified Joint and Survivor Annuity. Unless an optional form of benefit is selected pursuant to a Qualified Election within the ninety (90) day period ending on the Annuity Starting Date, a married Participant's . , Vested Account Balance will be paid in the form of a Qualified Joint and Survivor Annuity and an unmarried .... Qi FH5RAC February 27, 2007 Agenda Item E Page 36 of 48 Participant's Vested Account Balance will be paid in the form of a Straight Life Annuity. The Participant may elect to have such annuity distribured upon the artainment of the Earliest Retirement Age under the Plan. 17.03 Qualified Preretirement Survivor Annuity. If a Participant dies before the Annuity Starting Date, then fifty percent (50%) of the Participant's Vested Account Balance shall be applied toward the purchase of an annuity for the life of the Surviving Spouse; the remaining portion shall be paid to such Beneficiartes (which may include such Spouse) designated by the Participant. Notwithstanding .the foregoing, the Participant may waive the spousal annuity by designating a different Beneficiary within the Election Period pursuant to a Qualified Election. To the extent that less than one hundred percent (1.00%) of the vested Account balance is paid to the Surviving Spouse, the amount of the Participant's Account derived from Employee contributions will be allocated to the Surviving Spouse in the same proportion as the amount of the Participant's Account derived from Employee contributions is to the Participant's total Vested Account Balance. The Surviving Spouse may elect to have such annuity distributed within a reasonable period after the Participant's death. Further, such Spouse may elect to receive any d~ath benefit payable to him/her hereunder in any of the forms available to the Participant under Section 11.02. 17.04 Notice Requirements. (a) In the case of a Qualified Joint and Survivor Annuity as described in Section 17.02, the Plan Admin- istrator shall, no less than thirty (30) days and no more than ninety (90) days prior to the Annuity Starting Date, provide each Participant a written explanation of: (i) the terms and conditions of a Qualified Joint and Survivor Annuity; (ii) the Participant's right to make and the effect o.f an election to waive the Qualified Joint and Survivor Annuity form of benefit; (iii) the rights of a Participant's Spouse; and (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity. However, if the Participant, after having received the written eXplanation, affirmativ~ly elects a form of distribution and the Spouse co~sents to that form of distribution (if necessary), benefit payments may commence less than 30 days after the written explanation was provided to the Participant, provided that the following requirements are met: (1) The Plan Administrator provides information to the Participant clearly indicating that the Participant has a right to at least 30 days to consider whether to waive the Qualified Joint and Survivor Annuity and consent to a form of distribution other than a Qualified Joint and Survivor Annuity; (2) , The Participant is permitted to revoke an affirmative distribution election at least until the Annuity Starting Date, or if later, at any time prior to the expiration of the 7 -day period that begins the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; (3) The Annuity Starting Date is after the date that the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; and (4) Distribution in: accordance with the affirmative election does not commence before the expiration of the 7 -day period that begins after the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant. (b) In the case of a Qualified Preretirement Survivor Annuity as described in Section 17.03, the Plan Administrator shall provide each Participant within the applicable period for such Participant a writ- ten explanation of the Qualified Preretirement Survivor Annuity in such tetms and in such manner as would be comparable to the explanation provided for meeting the requirements of Subsection (a) applicable to a Qualified Joint and Survivor Annuity. The applicable period for a Participant is whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant attains age thirty-two (32) FH5RAC February 27, 2007 Agenda Item E Page 37 of 4S and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age thirty-five (35); (ii) a reasonable period ending after the individual becomes a Participant; (iii) a reasonable period ending after Subsection (c) ceases to apply to the Participant; (iv) a reaso~able period ending after this Article first applies to the Participant. Notwithstanding the foregoing, notice must be provided within a reasonable period ending after separation from service in the case of a Participant who separates from service before attaining age thirty-five (35). For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (ii), (iii) and (iv) is the end of the two (2) year period beginning one (1) year prior to the date the applicable event occurs, and ending one (1) year afte~ that date. In the case of a Participant who separates from serVice before the Plan Year in which age thirty-five (35) is attained, notice shall be provided within the two (2) year period beginning one (1) year prior to separation and ending one (1) year after separation. If such a Participant thereafter returns to employment with the Employer, the applicable period for such Participant shall be redetermined. (c) NotWithstanding the other requitements of this Section, the respective notices prescribe~ by this Section need not be given to a Participant if (1) the Plan "fully subsidizes" the costs of a Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor Annuity, and (2) the Plan does not allow the Participant to waive the Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor Annuity and does not allow a married Participant to designate a non-:Spouse Beneficiary. For purposes of this Subsection (c), a plan fully subsidizes the costs of a benefit if no increase in cost or decrease in benefits to the Participant may result from the Participant's failure to elect another benefit. 17.05 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Annuity Starting Date: The first day of the first period for which an amount is paid as an annuity or any other form. (b) Election Period' The period which begins on the first day of the Plan Year in which the Participant attains age thirty-five (35) and ends on the date of the Participant's death. If a Participant separates from service prior to the first day of the Plan Year in which age thirty-five (35) is attained, with respect to the Account balance as of the date of separation, the Election Period shall begin on the date of separation. Pre-age thirty-five (35) waiver: A Participant who will not yet attain age thirty-five (35) as of the end of any current Plan Year may make a special Qualified Election to waive the Qualified Preretirement Survivor Annuity for the period beginning on the date of such election and ending on the first day of the Plan Year in which the Participant will attain age thirty-five (35). Such election shall not be valid unless the Participant receives a written explanation of the Qualified Preretirement Survivor Annuity in such terms as are comparable to the explanation required under Section 17.04(a). Qualified Preretirement Survivor Annuity coverage will be automatically reinstated as of the first day of the Plan Yeat in which the Participant attains age thirty-five (35). Any new waiver on or after such date shall be subject to the full requirements of this Article. . (c) Earliest Retirement Age: The earliest date on which, under the Plan, the Participant could elect to receive retirement benefits. (d) Qualified Election: A waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity. Any waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity shall not be effective unless: (a) the Participant's Spouse consents in writing to the election; (b) the election designates a specific Beneficiary, including any class of Beneficiaries or any contingent Beneficiaries, which may not be changed without spousal consent (or the Spouse ~k~, ~.l$<. ~.~ ;1,: . ~,-!..J' :-~:. ~~., FHSRAC February 27, 2007 Agenda Item E ~~ge 38 of 48 expressly permits designations by the Participant without any further spousal consent); (c) the Spouse's consent acknowledges the effect of the election; and (d) the Spouse's consent is witnessed by a Plan representative or notary public. Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity shall not be effective unless the election designates a form of benefit pay~ent which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further Spousal consent). If it is established to the satisfaction of a Plan representative that there is no Spouse or that the Spouse cannot be located, a waiver will be deemed a Qualified Election. Any consent by a Spouse obtained under this provision (or establishment that the consent of a Spouse may not be obtained) shall be effective only with respect to such Spouse. A consent that permits designations by the Participant without any requirement of further consent by such Spouse must acknowledge that the Spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the Spouse voluntarily elects to relinquish' either or both of such rights. A revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant has received notice as provided in Section 17.04. (e) Qualified Joint and Survivor Annuity: An immediate annuity for the life of the Participant with a survivor annuity for the life of the Spouse which is fifty percent (50%) of the amount of the annuity which is payable during the joint lives of the Participant and the Spouse and which is the amount of benefit which can be purchased with the Participant's Vested Account Balance. (f) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the Participant, provided that a former Spouse will be treated as the Spouse or Surviving Spouse and a current Spouse will not be treated as the Spouse or Surviving Spouse to the extent provided under a qualified domestic relations order as described in section 414(p) of the Code. (g) Straight Life Annuity: An annuity payable in equal installments for the life of the Participant that terminates upon the Participant's death. (h) Vested Account Balance: The aggregate value of the Participant's vested Account balances derived from Employer and Employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the Participant's life. The provisions of this Article shall apply to a Participant who is vested in amounts attributable to Employer Contributions, Employee contributions (or both) at the time of death or distribution. 17.06 Annuity Contracts. Where benefits are to be paid in the form of a life annuity pursuant to the terms of this Article, a nontransferable annuity contract shall be purchased from a life insurance company and distributed to the Participant or Surviving Spouse, as applicable. The terms of any annuity contract purchased and distributed by the Plan shall comply with the requirements of this Plan and section 417 of the Code. FH5RAC February 27,2007 Agenda Item E Page 39 of 48 ,~~!i't,"" DECLARATION OF TRUST This Declaration of Trust (the "Group Trust Agreemem") is made as of the 19th day of May, 2001, by VantageTrust Company, which declares itself to be the sole Trustee of the trust hereby created. WHEREAS, the leMA Retiremem Trust was created as a vehicle for the commingling of the assets of governmemal plans and governmental units described in Section 818(a)(6) of the lmernal Revenue Code of 1986, as amended, pursuant to a Declaration of Trust dated October 4, 1982, as subsequently amended, a copy of which is attached hereto and incorporated by reference as set out below (the "lCMA Declatation"); and WHEREAS, the trust created hereunder (the ','Group Trust") is intended to meet the requirements of Revenue Ruling 81- 100, 1981-1 C. B. 326, and is established as a common trust fund within the meaning of Section 391: 1 of Tide 35 ofche New Hampshire Revised Statutes Annotated, to accept and hold for investment purposes the assets of the Deferred Compensation and Qualified Plans held by and through the ICMA Retirement Trust. NOW; THEREFORE, the Group Trust is created by the execution of this Declaration of Trust by the Trustee and is established with respect to each Deferred Compensation and Qualified Plan by the transfer to the Trustee of such Plan's assets in the ICMA Retirement Trust. by the Trustees thereof, in accord with the following provisions: 1. Incorporation of ICMA Declaration by Reference; ICMA By-Laws. Except as otherwise provided in this Group Trust Agreement, and to the extent not inconsistent herewith, all provisions of the lCMA Declaration are incotporated herein by reference and made a part hereof, to be read by substituting the Group Trust for the Retirement Trust and the Trustee for the Board of Trustees referenced therein. In this respect, unless the comext clearly indicates otherwise, all capitalized terms used herein and defined in the ICMA Declaration have the meanings assigned to them in the ICMA Declaration. In addition, the By-Laws of the lCMA Retirement Trust, as the same may be amended from time-to-time, are adopted as the By-Laws of the Group Trust to the extent not inconsistent with the terms of this Group Trust Agreement. Notwithstanding the fotegoing, the terms of the lCMA Declaration and By-Laws are further modified with respect to the Group Trust created hereunder, as follows: (a) any reporting. distribution, or other obligation of the Group Trust vis-a.-vis any Deferred Compensation Plan, Qualified Plan, Public Employer, Public Employer Trustee, or Employer Trust shall be deemed satisfied to the extent that such obligation is undertaken by the lCMA Retirement Trust (in which case the obligation of the Group Trust shall run to the lCMA Retirement Trust); and (b) all provisions dealing with the number, qualification, election, term and nomination of Trustees shall not apply, and all other provisions relating to trustees (including, but not limited to, resignation and removal) shall be interpreted in a manner consistent with the appointment of a single corporate trustee. 2. Compliance with Revenue Procedure 81-100. The requirements of Revenue Procedure 81-100 are applicable to the Group Trust as follows: (a) Pursuant to the terms of this Group Trust Agreement and Article X of the By-Laws, investment in the Group Trust is limited to assets of Deferred Compensation and Qualified Plans, investing through the lCMA Retirement Trust. (b) Pursuant to the By-Laws, the Group Trust is adopted as a part of each Qualified Plan that invests herein through the lCMA Retirement Trust. " (c) In accord with the By-Laws, that part of the Group Trust's corpus or income which equitably belongs to any Deferred Compensation and Qualified Plan may not be used for or diverted to any purposes other than for the exclusive benefit of the Plan's employees or their beneficiaries who are entitled to benefits under such Plan. , FH5RAC February 27,2007 Agenda Item E Page 40 of 48 (d) In accord with the By-Laws, no Deferred Compensation Plan or Qualified Plan may assign any or part of its equity or interest in the Group Trust, and any purported assignment of such equity or interest shall be void. ) 3. Governing Law. Except as otherwise required by fedetal, state or local law, this Declaration of Trust (including the ICMA Declaration to the extent incorporated herein) and the Group Trust created hereunder shall be construed and determined in accordance with applicable laws of the State of New Hampshire. 4. Judicial Proceedings. The Trustee may at any time initiate an action or proceeding in the appropriate state or federal courts within or outside the state of New Hampshire for the settlement of its accounts or for the determination of any question of construction which may arise or for instructions. IN WITNESS WHEREOF, the Trustee has executed this Declaration of Trust as of the day and year first above written. VANTAGETRUST COMPANY By. g{,1f,/'4 ,) Name: Paul F. Gallagher Title: Assistant Secretary FHSRAC February 21, 2007 Agenda Item E page 41 of 48 ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST ADOPTION AGREEMENT PLAN NUMBER 10- 6325 The Employer hereby establishes a Money Purchase Plan and Trust to be known as City of Federal Way 401(a) ACM/Police Chief Plan (the "Plan") in the form of the ICMA-'R-c Governmental Money Purchase Plan and Trust. This Plan is an amendment and restatement of an existing defined contribution money purchase plan. Yes , x No If yes, please specify the name of the defined contribution money purchase plan which this Plan hereby amends and restates: I. Employer: City of Federal Way II. The Effective Date of the Plan shall be the first day of the Plan Year during which the Employer adopts the Plan, unless an alternate Effective Date is hereby specified: Jaauary 1, 2007 III. Plan Year will mean: (>> The twelve (12) consecutive month period which coincides with the limitation year. (See Section 5.03(g) of the Plan.) ( ) The twelve (12) consecutive month period commencing on and each anniversary thereof. IV. Normal Retirement Age shall be age 55 (not to exceed age 65). FHSRAC Fe!>ruary 27~ 2007 Agenda Item I: Page 42 of 48 . V. ELIGIBILITY REQUIREMENTS: 1. The following group or groups of Employees are eligible to participate in the Plan: x All Employees All Full-Time Employees Salaried Employees Non-union Employees Management Employees Public Safety Employees General Employees Other (specify below) ~ssistant City~~nager and Police Chief The group specified must correspond to a group of the same designation that is defined in the statutes, ordinances, rules, regulations, personnel manuals or other material in effect in the state or locality of the Employer. ' 2. The Employer hereby waives or reduces the requirement of a twelve (12) mont1h Period of Service for participation. The required Period of Service shall be j n/a (write N/A if an Employee is eligible to participate upon employment). },..~ If this waiver or reduction is elected, it shall apply to all Employees within the Covered Employment Classification. 3. A minimum age requirement is hereby specified for eligibility to participate. The minimum age requirement is n/a (not to exceed age 21. Write N/A if no minimum age is declared.) VI. CONTRIBUTION PROVISIONS 1 . The Employer shall contribute as follows (choose one): Oc) Fixed Employer Contributions With Or Without Mandatory Participant Contributions. See attached. The Employer shall contribute on behalf of each Participant % of Earnings or $6,000.00 for the Plan Year (subject to the limitations of Article V of the Plan). A Participant is required to contribute (subject to the limitations of Article V of the Plan) (i) % of Earnings, ,(ii) $ , or (iii) a whole percentage of Earnings, as designated by the Employee in accordance with guidelines and procedures established by the Employer FHSAAC Febru~ 27, 2QQ7 Agen<!a Item E Page 43 of 48< for the Plan Year as a condition of participation in the Plan. (Write "0" if no contribution is required.) If Participant Contributions are required under this option, a Participant shall not have the right to discontinue or vary the rate of such contributions after becoming a Plan Participant. The Employer hereby elects to "pick up" the Mandatory/Required Participant Contribution. x Yes No [Note to Employer: Neither an IRS advisory letter nor a determination letter issued to an adopting Employer is a ruling by the Internal Revenue Service that Participant contributions that are picked up by the Employer are not includable in the Participant's gross income for federal income tax purposes. The Employer may seek such a ruling. Picked up contributions are excludable from the Participant's gross income under section 414(h)(2) of the Internal Revenue Code of 1986 only if they meet the requirements of Rev. Ruls. 81-35 and 81-36,1981-1 C.B. 255, and 87-10,1987-1 C.B. 136. Those requirements are (1) that the Employer must specify that the contributions, although designated as employee contributions, are being paid by the Employer in lieu of contributions by the employee; (2) the employee must not have the option of receiving the contributed amounts directly instead of having them paid by the Employer to the plan; and (3) the required specification of designated employee, contributions must be completed before the period to which such contributions relate.] ( ) Fixed Employer Match of Participant Contributions. The Employer shall contribute on behalf of each Participant _ % of Earnings for the Plan Year (subject to the limitations of Article V of the Plan) for each Plan Year that such Participant has contributed _ % of Earnings or $_. Under this option, there is a single, fixed rate of Employer contributions, but a Participant may decline to make the required Participant contributions in any Plan Year, in which case no Employer contribution will be made on the Participant's behalf in that Plan Year. ( ) Variable Employer Match Of Participant Contributions. The Employer shall contribute on behalf of each Participant an amount determined as follows (subject to the limitations of Article V of the Plan): FHSAAC February 27, 2007 ' Agenda Item E Page 44 of 48 % of the contributions made by the Participant for the Plan Year (not including Participant contributions exceeding _ % of Earnings or $ ); PLUS % of the contributions made by the Participant for the Plan Year in excess of those included in the above paragraph (but not including Partici'pant contributions exceeding in the aggregate _ % of Earnings or $ ). Employer Contributions on behalf of a Participant for a Plan Year shall not exceed $ or _ % of Earnings, whichever is more or less. 2. Each Participant may make a voluntary (unmatched), after-tax contribution, subject to the limitations of Section 4.05 and Article V of the Plan. Yes x No 3. Employer contributions and Participant contributions shall be contributed to the Trust in accordance with the following payment schedule: 16 Dav ~eriods/year. pay~ay~ nn ~hp 5th aud20th gfeach meBth, VII. EARNI NGS Earnings, as defined under Section 2.09 of the Plan, shall include: (a) Overtime Yes x No (b) Bonuses Yes ~ No VIII. LIMITATION ON ALLOCATIONS If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was) a participant or could possibly become a participant, the Employer hereby agrees to limit contributions to all such plans as provided herein, if necessary in order to avoid excess contributions (as described in Sections 5.02 of the Plan). 1. If the Participant is covered under another qualified defined contribution plan maintained by the Employer, the provisions of Section 5.02(a) through (f) of the Plan will apply unless another method has been indicated below. FHSRAC February 27, 2007 Agenda I~efTj E Page 45 of 48 ' ( ) Other Method. (Provide the method under which the plans will limit total Annual Additions to the Maximum Permissible Amount, ~nd will properly reduce any excess amounts, in a manner that precludes Employer discretion.) 2. The limitation year is the following 12-consecutive month period: _ standard r~lpnd~T ypar IX. VESTING PROVISIONS The Employer hereby specifies the following vesting schedule, subject to (1) the minimum vesting requirements as noted and (2) the concurrence of the Plan Administrator. Years of Service Completed Percent VestinQ Zero One Two Three Four Five Six Seven Eight Nine Ten 100 % % % % % % % % % % % X. Loans are permitted under the Plan, as provided in Article XIII: Yes x No XI. The Employer hereby attests that it is a unit of state or local government or an agency or instrumentality of one or more units of state or local government. XII. The Plan Administrator hereby agrees to inform the Employer of any amendments to the Plan made pursuant to Section 14.05 of the Plan or of the discontinuance or abandonment of the Plan. FHSAAc ~bruaiy 27, 2Q07 AgendaiI~em E page 46 of 48 XIII. The Employer hereby appoints the ICMA RC as the Plan Administrator pursuant to the terms and conditions of the ICMA RC GOVERNMENTAL MONEY PURCHASE PLAN & TRUST. The Employer hereby agrees to the provisions of the Plan and Trust. XIV. The Employer hereby acknowledges it understands that failure to properly fill out this Adoption Agreement may result in disqualification of the Plan. XV. An adopting Employer may rely on an advisory letter issued by the Internal Revenue Service as evidence that the Plan is qualified under section 401 of the Internal Revenue Code. In Witness Whereof, the Employer hereby causes this Agreement'to be executed on this day of ,~. '2007. ' EMPLOYER ICMA RC By: By: ,Title: Human Rp~nllr('p~Managpr Title: Attest: Attest: IIGLGPRlM\CLlENTSII J070101IMPPAA4,DOC .FHSRAc~bruary 27,2007 Agend~ Item ~ Page: 47 of 48 ICMA RC 401 Governmental Money Purchase Plan & Trust Adoption Agreement Employee Contributions: Each participant may make a one-time irrevocable election to contribute to this Plan. Eligible Participants may make an irrevocable election to contribute to the Plan at any , time following the beginning of their eligibility. The Participant may choose to contribute at one of the following optional rates: a. 3% of earnings b. 6% of earnings c. .9% of earnings d. 12% of earnings e. 15% of earnings A participant shall not have the right to discontinue or vary the rate of such contributions after having made a contribution ele~tion. FHSRAC February 27,2007 Agenda Item E Page 48 of 48 CITY OF FEDERAL WAY CITY COUNCIL FINANCE, HUMAN SERVICES AND REGIONAL AFFAIRS COMMITTEE Date: From: Via: February 13, 2007 , ~ Angelina Allen-Mpyisi, HU~. ervices Manager Neal Beets, City Manager . Kathy McClung, Director o. unity Development Services ~ . Organizational Capacity Building Project Update Subject: The Federal Way Senior Center and the Federal Way Community Caregiving Network have made some significant progress through the Organizational Capacity Building Program. Federal Way Senior Center The Federal Way Senior Center in January hired a new Executive Director and Harry Schreiber officially stepped down from this role. Harry intends to stay on board with the senior center through the end of ' February. The new Executive Director, Nathan Brown, holds a Ph. D in Psychology and has a variety of experience in healthcare, organizational management and formerly held his own private practice. Since coming on board Nathan has been working closely with Harry. He has revised the agency's by-laws, is working on resolving the center's food bank issues and is working on implementing various fundraising , activities. He is also working closely with the bookkeeper to set up a new financial system that will enable the senior center's board of directors to receive the type of financial information they need to understand the financial position of the organization. Federal Way Community Caregiving Network Elizabeth Heath, the consultant on the capacity building project has conducted three meetings with the agency. The main area of discussion has focused on whether the Caregiving Network continues to remain a volunteer organization or create a different organizational structure. The board of directors has decided to stay a volunteer agency but want to set up an operating committee and have the board become a governing body where they are responsible for making policy decisions. Currently the board operates in both functions. The make up of the new structure will enable the operating committee and the board of directors to be linked together and at the same time they will have the ability to work separately on organizational issues. The board is holding a retreat on February 17 where they will discuss how to set up the new structure and when it will be implemented. Both agencies attended a board recruitment training conducted by our consultant and picked up good techniques on how to recruit new board members. In March, the capacity building program will host a board chair training for the board chairs. Elizabeth Heath will attend the FHSRA Council Committee meeting and will be available to present the results from the Caregiving Network's retreat and to answer any questions you may have. FH5RAC February 27, 2007 Agenda Item F Page 1 of 1 CITY OF FEDERAL WAY CITY COUNCIL FINANCE, HUMAN SERVICES AND REGIONAL AFFAIRS COMMITTEE Subject: February 13,2007 ~ Angelina Allen-Mpyisi, Hum~a ervices Manager Neal Beets, City Manager ,1..Mv' Kathy McClung, Director C unity Development Services 'P~- Report on the King County Coordinated Special Needs Transportation Plan for Fiscal Year 2007 Date: From: Via: Background On August 10, 2005, President Bush signed into law the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, commonly referred to as SAFETEA-LU. SAFETA-LU authorized the provision of $286.4 billion in guaranteed funding for federal surface transportation programs through fiscal year 2009, including $52.6 billion for federal transit programs. Beginning fiscal year 2007, projects funded through three programs included in SAFETEA-LU, (the Job Access and Reverse Commute Program (JARC), the New Freedom Program, and the Elderly and Disabled Program ("Section 5310')), are required to be derived from a locally developed, coordinated transit-human services transportation plan. The development of such plans was published by the Federal Transit Administration (FTA) in the Federal Register on March 15,2006 and subsequently additional guidance was published on September 6, 2006, which clarifies the Federal Transit Administration's expectations for the coordinated plan as follows: "A coordinated public transit-human services transportation plan identifies the transportation needs of individuals with disabilities, older adults, and people with low-incomes, provides strategies for meeting those local needs and priorities transportation services for funding and implementation." There are a variety of King County sponsored committees with city government representation that addresses human service issues, and transportation issues. However, no existing group addresses both issues, nor does any existing group also include representatives from nonprofit human service providers. Steering Committee The King County Human ServicesfTransportation Steering Committee ("Steering Committee") was established to meet the requirements of the federal transportation law enacted in August, 2005. The SAFETEA-LU requires that projects funded through three federal programs be derived from a locally developed, coordinated public transit-human services transportation plan. The composition of the committee was proposed by an interjurisdictional staff team and approved by Ron Sims (King County Executive), Bob Drewel (Puget Sound Regional Council Executive Director), Joni Earl (Sound Transit Executive Director) and Jon Fine (United Way President and CEO). The Steering Committee is composed of a broad group of stakeholders who represent special needs transportation service providers, clients, and funders from both the governmental, nonprofit and for-profit sectors. , FH5~C February 27, 2007 'ltgeni:faJt~ G Page 1 of 6 During the planning process the Steering Committee's provided project oversight and policy direction. A- technical team consisting of staff from King County Metro and the Puget Sound Regional Council worked closely with the consultant team and provided in-kind support to the project. The composition of the committee is attached. Funding Sources/Description of Types of Projects That Can Be Funded The Job Access and Reverse Commute (JARC), the New Freedom Program and the Elderly and Disabled Program ("Section 5310"), through SAFETEA-LU, are subject to the King County Coordinated Special Needs Transportation Plan. Projects funded with the grant funds are required to be selected through a competitive process. The PSRC will be responsible for conducting a competitive selection process to award the JARC and New Freedom grants. The State of Washington's role is to administer the Section 5310 grants. Job Access and Reverse Commute (JARC) The purpose of the JARC program is to fund local programs that offer job access services for low-income individuals. JARC funds are distributed to states on a formula basis, depending on that state's rate of low-income population. This approach differs from previous funding cycles, when grants were awarded purely on an "earmark" basis. JARC funds will pay for up to 50% of operating funds to support the project budget, and 80% for a capital project. The remaining funds are required to be provided through local match sources. Examples of eligible JARC projects include: . Late-night and, weekend service. . Guaranteed Ride Home Programs. . Vanpools or shuttle services to improve access to employment or training sites. . Car-share or other projects to improve access to autos. . Access to child care and training. New Freedom Program The New Freedom Program provides funding to serve persons with disabilities. Overall, the purpose of the program is to go "beyond" the minimal requirements of the ADA. Funds are distributed to states based on that state's population of persons with disabilities. The same match requirements for JARC apply for the New Freedom Program. Examples of eligible New Freedom Program projects include: . Expansion of para-transit service hours or service area beyond minimal requirements. . Purchase of accessible taxi or other vehicles. . Promotion of accessible ride sharing or van pool programs. . Administration of volunteer programs. . Building curb-cuts, providing accessible bus stops. . Travel Training programs. 2 FH5RACFebruary 27,2007 ~gehda It~m GPage 2. of' 6 Elderly and Disabled Program (Section 5310) Funds for the Section 5310 Program are allocated by a formula to states. The purpose of the program is to increase mobility for the elderly and persor:ls with disabilities. Typically, capital projects are only considered through this program. However, funds can be used to promote coordination, develop coordinated plans 'and hire staff to oversee the work. A 20% local match is required through the program. The PSRC estimates for 2007-2009 the following amount of regional funding will be available through JARC and New Freedom: 2007 2008 2009 JARC 1,013,699 1,098,174 1,158,010 New Freedom 702,026 758,362 801,697 trOTAL $1,715,725 $1,856,536 $1,959,707 As was stated earlier funds for the Section 5310 program are allocated by a formula to states for capital costs of providing services to elderly persons and persons with disabilities. King County Coordinated Special Needs Transportation Plan The plan focuses on the transportation needs of the County's most vulnerable populations: children and youth, the elderly, persons with disabilities and those of low-income status. These population groups are more likely to need special assistance or to be dependent on the provision of public transportation due to their inability to have access to an automobile. The main goals of the plan are to: . Meet the federal and state requirements for funding. . Identify local service gaps and barriers. . Identify strategies to address the service gaps. . Build upon existing human service and public transportation collaboration. . Identify potential future coordination initiatives. In addition to the plan being developed for King County, three other separate countyWide plans were developed in Kitsap, Pierce and Snohomish, to satisfy the federal requirements with the goal of consolidating them into a single regional coordinated transportation plan for ultimate adoption by the Puget Sound Regional Council (PSRC). The PRSC is the responsible body for coordinating the planning over the four-county service area. ' In November 2006, the draft plan was made available for public comment and in early December the Steering Committee recommended approval of the plan. On December 13, the plan was presented to Ron Sims, Bob Drewel, Joni Earl and Jon Fine, the group who endorsed the steering committee composition. for final adoption. Attached is a copy of the final plan. 3 FHSRACFebruary 27, 20Q7 Agend~ Item G Page), of 6 Next Steps With the completion of the planning effort the Steering Committee is considering how best to advance the progress made over the past few months. A first step is to identify a sponsor or lead agency to maintain "ownership" of the plan, once it is adopted and who is willing to staff the project once the work of the consultant team concludes. Secondly, the committee needs. to develop a work plan because work on the 2008 King County Coordinated Special Needs Transportation Plan needs to commence soon. After reviewing the report if you have questions prior to the meeting, I can be reached at (253) 835-2650 or by email anQelina.allenmovisiaD.citvoffederalwav.com. FH5RAC February 27, 2007 Ag!!nda Item G Page 4 of 6 4 , STEERING COMMITTEE for King County 2007 Coordinated Human Services and Public Transit Transportation Plan Contact information as confirmed 10-6-06 &.,."". ..... ',k.w_ % '~:~,><'" ,~i;'~. ;f,t;.;,>.,c':- -,.:~,",),;-,_:_; .,;< '/::~}!{><'j<:~;: -':~ ':~)<;>~1}>: .:: >'; '.>,.",,'.'.. .....,,:/ t,,' ,/ .,' ('\:7 i~.EA'[ REI?RE~ENf~TJYE,. .... ~~fERNAT~' . .. . King County DCHS Linda Wells Sadikifu Akina-James Aging Program Manager Director, Community Services Division King County DCHSI CSD King County DCHS King County Metro Transit Bob Sahm , Park Woodworth Supervisor, Accessible Services Manager, Paratransit I Rideshare Operations Metro Transit Division Section King County Dept. ofTransportation Metro Transit Division King County Department of. Transportation Seattle City Representative Pamela Piering , Margaret Casey Director Planning and Development Specialist II Aging and Disability Services Aging and Disability Services Seattle Human Services Department Seattle Human Services Department City of Seattle City of Seattle Eastside/North-end City Alex O'Reilly Jeff Brauns Representative Associate Planner Public Works Dept. Human Services Division City of Sammamish Parks and Community Services Department City of Bellevue South County City Angelina Allen-Mpyisi Jim Seitz Representative Human Services Manager Transportation Dept. City of Federal Way City of Renton 1055 S. Grady Way Sound Transit Michael Miller Cheryl Huston Project Manager, Customer Service & Accessibility Program Manager, Customer Services & Division Accessibility Transportation Services Sound Transit Sound Transit , Medicaid Broker (Hope/ink) Lynn Moody Janis Webb Director of Transportation and Interpreter Services Contracts Manager Hopelink Hopelink Business I Employer Emily Dykstra Virginia Burzotta Representative Support Services Supervisor Director of Community Services Northwest Center Northwest Center System User Representative Larry Showalter, Chair of Accessible Services Kay Burrows, ASAC vice chair Advisory Committee 1334115th Avenue NE #E104 System User Representative Leo Finnegan, Developmental Disabilities Board Taxis I for -profit transportation Frank Dowgwilla, Puget Sound Dispatch Jim O'Malley, Puget Sound Dispatch representative General Manager Dispatch Manager Puget Sound Dispatch Puget Sound Dispatch Non-profit transportation Mark Okazaki, Bill Eby, agency Executive Director Transportation Director Neighborhood House Neighborhood House Non-profit human services Denise Klein Cindy Zwart FH5RAC February 27,2007 Agenda Item G Page 5 of 6 STEERING COMMITTEE for King County 2007 Coordinated Human Services , and Public Transit Transportation Plan Contact information as confirmed 10-6-06 '. ", ''','' i. ;.,.>..... - .....", . SEA'!;:' .,.i RERRESI?NTArlVE AILTERNArE , ";-.,.. - ','-"';;- ,-.... "~'.' , agency (elderly I disabled) Director Program Director Senior Services Senior Services Non-profit human services Tony Orange Andrea Cupain agency (low income) Executive Director Executive Liaison Central Area Motivation Program (CAMP) Central Area Motivation Program Youth I Children Advocatel Robyn Govan Gene Harris Service representative Deputy Executive Director Director of Family Support Services First Place First Place Rural services representative Ruth Tolmasoff Lisa Yeager Executive Director Director of the Sno-Valley Senior Center Mt. Si Senior Center Affordable housing Dini Duclos Manuela Ginnett representative Chief Executive Officer Housing Program Director Multi-Service Center Multi-Service Center United Way Someireh Amirfaiz Doug Whalen, Executive Director Community Impact Manager Refugee Women's Alliance and United Way of King County-Eastside Office Member, United Way of King County - System Support Impact Council Hospital representative Janice Dillman Long Administrative Director Rehabilitation Medicine Harborview Medical Center DSHS Region 4 Rick Krauss Laverne Lamoureux Representative DSHS Region 4 DSHS Region 4 Job Access Reverse Commute Bob Flor David Dunneback Planning Committee Rep. Metro Transit Division Metro Transit Division King County Department of Transportation King County Department of Transportation School District Transportation Jacque Mann Don Walkup Programs E & T Director Title: Transportation Supervisor Puget Sound Educational Service District Kent School District Faith based organizations Carol Sue Elliott representative (appointed via Church Council) PSRC (non-voting) Jennifer Ryan, Ben Brackett Principal Planner Assistant Planner Puget Sound Regional Council Puget Sound Regional Council FH5RAC February 27, 2007 Agenda Item G Page 6 of 6 COUNCIL MEETING DATE: March 6, 2007 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: Acceptance of the 2007-2008 Proposed Use of one-time Human Services General Funds POLICY QUESTION: Should the City of Federal Way provide one-time funding to St. Theresa Church/St. Vincent DePaul Society and Hospitality House as part of the new 2007-2008 grant cycle? COMMITTEE: FHSRAC MEETING DATE: 02/27/07 CATEGORY: !81 Consent 0 Ordinance 0 Public Hearing o City Council Business 0 Resolution 0 Other ,~T AFF REpORT By:... Ange~in~ Allen-Mpyisi, Human Services Manager _~~T: C:ommunity Develop~~_~_,_ Attachments: · Memo to FHSRA Council Committee dated February 13,2007. · A Contingency Plan 'Outlining proposed funding for St. Theresa Church/St. Vincent DePaul Society and Hospitality House. Options Considered: 1. Authorize the City Manager to approve funding to St. Theresa Church/St. Vincent DePaul Society in the amount of $10,000 and Hospitality House in the amount of $4,765 (for 2007), and $7,000 in 2008. 2. ,Not authorize the City Manager to approve funding St. Theresa Church/St. Vincent DePaul Society in the amount of $10,000 and Hospitality House in the amount of $4,765 (for 2007) and $7,000 in 2008. 3. To amend the proposed use offunding. STAFF RECOMMENDATION: Option. 1 is recommended. CITY MANAGER ApPROVAL: @ . Co ltee Council DIRECTOR ApPROVAL: ~ Coriimiltee Council COMMITTEE RECOMMENDATION: HI move approval of option _ with the authorization for the City Manager to enter into th~ appropriate contracts" Linda Kochmar, Chair Jeanne Burbidge, Member Jack Dovey, Member PROPOSED COUNCIL MOTION: HI move approval of option _ with the authorization for the City Manager to enter into the appropriate contracts" (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED o DENIED o TABLEDmEFERREDINO ACTION o MOVED TO SECOND READING (ordinances only) REVISED - 02/06/2006 COUNCIL BILL # I ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY CITY COUNCIL FINANCE, HUMAN SERVICES AND REGIONAL AFFAIRS COMMITTEE Subject: February 13, 2007 ~ Angelina Allen-Mpyisi, Hum~rvices Manager I/A I ( Neal Beets, City Manager 'pvv- Kathy Mc Clung, Director C unity Development Services Department 2007- 2008 Proposed Use of Human Services General Funds Date: From: Via: Policy Issue: Should the City of Federal Way provide one-time funding to St. Theresa Church/St. Vincent DePaul Society and Hospitality House as part of the new 2007-2008 grant cycle? Backqround: Last year, during Council's budget deliberations, they identified an additional $15,OOO/year or $30,000 in one-time money and the funds will be dispersed in the following manner: . Three thousand per year, $6,000 total to King County Sexual Assault Resource Center (KCSARC), increasing their grant to $36,000. . The Multi-Service Center's (MSC) Food Bank Program would receive $5,OOO/year, $10,000 total, increasing their total grant award from $32,000 to $37,000. The balance, $7,000/year, $14,000 total, remained unallocated. City Council determined that in 2007 the Human Services Commission should recommend how the balance would be allocated. November 6, 2006 - Human Services Commission Meeting During the Human Services Commission's (HSC) November 6, 2006 meeting, the Commission reviewed the requests of Hospitality House, the Joseph Foundation and St. Theresa Church/St. Vincent DePaul Society, who presented compelling cases to be considered for funding during the October 9,2006 public hea~ing. Staff convened a meeting with the HSC to consider a new Human Services General Fund budget because the proposed funding level had increased to $430,000. With the development of a new budget the Joseph Foundation was recommended for funding. In addition, a Contingency Plan was developed (refer to the attached copy). The plan proposed if $10,000 was raised through the United Way/Human Services fundraising campaign, the funds would be allocated to the St. Theresa/St. Vincent DePaul Society. Furthermore, if a significant amount of funds were raised above $10,000 the balance would be awarded to Hospitality House for the purposes of developing a plan to expand their services and provide shelter assistance to single women in Federal Way. Hospitality House operates a single-women's shelter at Lake Burien Presbyterian Church in Burien. In 2005, Hospitality House served eight single women from Federal Way. The Human Services Commission recommended funding through a Contingency Plan because they recognized there is a need for shelter services for single women. FHSRAC FebruarY 27, 2007 Agenda Item H Page 2 of 5 The revised Human Services General Fund budget and Contingency Plan were approved by the full Council at their December 5, 2006 meeting. United Way/Human Services Fundraiser The United Way/Human Services fundraising event held in December 6, 2006 raised an estimated $7,765.00 to support human services, which will go to the St. Theresa Church/St. Vincent DePaul Society based on terms of the Contingency Plan. At the HSC January 22 meeting the Commission recommended that $2,235 should be set aside from the $7,000 that remains unallocated to make up the balance and the $4,765 would then be allocated to Hospitality House. Because this is two year, one-time funding Hospitality House would also be eligible to receive $7,000 the following year. Funding this year will enable Hospitality House to hire a consultant to develop a plan to look at potential partnerships with churches and expand . services in Federal Way. Second year funding is contingent upon the recommendations that come out of the plan and Hospitality House decision to partner with a local church and set up a single-women's shelter in Federal Way. Option 1: The Council Committee recommends approval that St. Theresa Church/St. Vincent DePaul Society receive $2,235 of the $7,000 to enable the agency to receive a $10,000 grant and the ,remaining balance, $4,765, is awarded to Hospitality House in 2007 to enable the agency to develop a strategy plan and look at expanding their services in Federal Way. Second year funding in the amount of $7,000 is contingent upon the results of the plan and Hospitality House board's decision to deliver services in Federal Way. This recommendation is forwarded to the full City Council for consideration at the March 6, 2007 meeting. . Option 2: To not recommend that the City of Federal Way approve St. Theresa Church/St. Vincent DePaul Society receive additional funding totaling $2,235, and Hospitality House is not awarded any funding. Option 3: To amend the proposed use of how the $7,OOO/year, $14,000 total is allocated. Staff Recommendation Approve Option 1 and forward to the full council for approval at the March 6, 2007 regular City Council meeting. Human Services Commission Recommendation . On January 22,2007 the Human Services Commission recommended that $2,235 of the $7,000 be awarded to St. Theresa Church/St. Vincent DePaul Society to enable the agency to receive a $10,000 grant as suggested in the Contingency Plan and the balance remaining, $4,765, is . awarded to Hospitality House in 2007 for the purpose of the agency to conduct a planning effort and explore the opportunity to partner with a church to set up a shelter in Federal Way. Second FHSRAC February 27, 2007 Agenda Item H Page 3 of 5 year funding in the amount of $7,000 is contingent upon the outcome of Hospitality House's planning efforts and the board's decision to deliver services in Federal Way. Committee Recommendation Forward option agenda. to the full City Council and place this item on the March 6, 2007 consent "~,,J~~QV AL OF:: COMMIT;TEE REeeR't: .(. . " ' J .: Committ$e -e1la:lr'- Committee Member Committee Member FHSRAC February 27, 2007 Agenda Item H Page 4 of 5 ~. .~ CITY OF Federal Way CONTINGENCY PLAN Should $10,000 be raised through the Human Services/United Way fundraising campaign St. Theresa/St. Vincent DePaul Society will be eligible to receive funding in support of their Emergency Services program. In addition, if sufficient funds are raised above $10,000 Hospitality House will be awarded the balance of these funds to create a plan to consider partnering with a church to set up a single-woman's shelter and deliver services in Federal Way. Both proposed grant awards will be for one year beginning fiscal year 2007. Potential future funds beyond 2007 will be subject to satisfactory contract performance, the availability of future grant money being available, and City Council approval. . ....1 - FHSRAC February 27,2007 Agenda Item H PageS of S CITY OF FEDERAL WAY MEMORANDUM Date: February 20, 2007 To: Finance, Human Services, and Regional Affairs Committee From: Kelli O'Donnell, CDBG Coordina Via: Neal Beets, City Manager Subject: Report on Severe Weather At the January. Finance, Human Services and Regional Affair Committee meeting, Chair Kochmar requested information on severe weather shelters. Severe Weather Shelters: The City of Seattle has a Winter Response Plan for Homeless Persons and operates severe weather shelters between October 1st and March 31st when weather fits the program criteria (Attachment 1). A co-ed weather shelter is opened at Seattle City Hall with single men and women staying in separate areas of the building. A total of 75 people can be sheltered each night it is opened. The shelter has been open a total of 82 days between October 1, 2006, and February 2, 2007. This has been higher than previous years compared to October 2005 through March 2006 the shelter opened 76 days and during the October 2004 to March 2005 season the Severe Weather Shelters were open for a total of 60 days. The City of Seattle contracts for operations of the City Hall shelter at a daily contract rate for 2006/07 of $839 per night. . There is no screening or case management provided. City expenses such as heat, lights, contract oversight, etc. are not included in this. cost. The total contract cost for this winter as of February 2, 2007, is $68,798. If this would have been a typical contract. year with 62 nights of shelter operation, the cost would have been $52,018. The City of Seattle also opens a women's severe weather shelter in the community room of the Frye Hotel that accepts 25 single-women. This shelter opens on the same nights as the Seattle City Hall shelter. Costs of this shelter were not yet available at the writing of this report. During periods of excessive rainfall, winter storms and power outages, the City of Seattle has also opened overflow shelters at the Seattle Center, The Compass Center, The Downtown Emergency Services Center (DESC) and the Millionaire Club. Winter Shelters: King County operates two winter shelters that are opened October 15th every night until, March 31 st. The men's shelter is at the King County Administration Building in downtown Seattle. The shelter is open every night throughout the winter season at 9:00 p.m. with men leaving by 5:30 , a.m. for up to 50 men per night. King County contracts with the Salvation Army at a cost of $350 per day for two staff members to set up, check the men in, and clean up after the men leave each day. Total cost for this winter is $58,800. County costs of opening the shelter are not available for operating costs such as heating, security, etc. The King County women's shelter is at the YWCA Angeline's Center and is opened during the same period for up to 40 single women. King County contracts with the YWCA at a cost of $322 per day to oper~~e the women's winter shelter for a total cost of $54,096. FHSAA,C February 27, 2007 Agenda -Item I Page 1 of 3 Year-round Shelters: There are a limited number of year round shelters in South King County. HOME and ARISE serve 25 single men per night in Kent and Renton respectively. These shelters are rotated amongst churches monthly with one church furnishing the site with volunteers and partner churches furnishing meals. Case management is contracted with' Catholic Community Services and a new partnership with Valley Cities Counseling and Consultation provides mental health services to Kent residents only. Hospitality House in Burien has a 9 bed shelter for single , women and the Multi-Service Center operates a family shelter in Kent for 15 families. Additional Information: Further research would be needed to refine the cost and feasibility of replicating any of the above programs in Federal Way. Set up costs for any of the above options would also need to be determined. The cost of opening a severe weather or winter shelter in Federal Way could vary greatly from those operated in Seattle due to the higher number of agencies provj(~ing services to the homeless in Seattle. How a shelter project would be funded would also need to be determined. Federal Way has gone through the funding process for 2007-08 human services general fund projects and Community Development Block Grant (CDBG) public service projects. The Ten-Year Plan to End Homelessness in King County anticipates moving away from a shelter system to a housing first model. South King County has noted the need for additional shelter services until housing is available for our homeless residents. It is not known whether the Committee to End Homeles5ness or King County would provide funding for a new shelter rather than a housing first project in future funding cycles. Please contact me at (253) 835-2653 or keIlLodonnell@cityoffederalway.com if you have any questions regarding this report or any CDBG projects or programs. FHSRAC February 21, 2007 ~genda Item I Page 2 of 3 CITY OF SEATTLE 2006-2007 Severe Weather Shelter Fact Sheet Attachment 1 Severe Weather Shelter Opening Criteria Severe Weather Shelters will be opened on nights between October 1st and March 31st when weather is deemed by Survival Services to fit the severe weather criteria outlined in the City's Winter Response Plan (see below). Survival Services bases decisions on the daily weather reports sent received by the City of Seattle Engineering and Streets department. Notification of severe weather shelter openings and closings will be given by way of an email update, as well as by phone contact with key providers. . Severe Weather Criteria: · "low" temperatures at or below 32 degrees for one or more successive days, taking into account wind chill factor; OR · snow accumulation exceeding or expected to exceed .25 inches in depth; OR · two or more successive days of .50 inches of rainfall; AND · Other conditions deemed severe enough to present a substantial threat to the life or health of homeless persons. These criteria must be accompanied by a decision of the Survival Services Unit Manager to open the severe weather shelters. Co-ed Severe Weather Shelter, City Hall · Location: City Hall · Type: Co-ed; men & women sheltered in separate areas of the building · Capacity: 75 · Normal Hours: 9:00pm-6:30am. NOTE: It is important that participants do not arrive at the shelter before 9:00 pm and that they leave promptly at 6:30am, to allay community concerns.' People will be accepted at the shelter from 10:00pm to 1 :30am. · Procedure: People may be referred by any service provider. Referral form to be presented upon entry is preferred, but not necessary. · Nightly Staff: 3 · Access: downtown Bus Routes · RESTRICTIONS: No drugs or alcohol. · Contact: Survival Services staff Mary Flowers (206) 684-0231 or Patricia Ann (206) 6,15-1574. Women's Severe Weather Shelter, · Location: Community room of the Frye Hotel · Type: Women Only · Capacity: 25 beds · Normal Hours: 8:00pm-7:00am · Procedure: People may be referred by any service provider. Referral form to be presented upon entry is preferred, but not necessary. WHEEL staff will be at the Women's Referral Center ( 2030 3rd Ave, Angeline's Center at Oppurtunity Place) from 7:00 to 7:30pm and will accompany women to the $helter at the Frye as a group. From 8pm on women will be accepted at the Frye directly, by referral or walk-up. Women will be accepted at the shelter anytime throughout the night during open hours. · Nightly Staff: 2 · Access: within downtown free ride zone (6am-7pm) · Contact: Survival Services staff Patricia Ann (206) 615-1574 or Mary Flowers (206) 684-0231 FHSRAC February 27, 2007 Agenda Item I Page 3 of 3 DATE: TO: FROM MEMO February 20, 2007 Neal Beets, CA.~anager t!fiii) Donna Hanso~irector, Pa~ecreation, Cultural Services Iwen Wang, Director, Management Services Federal Way Community Center Update SUBJECT: CONSTRUCTION BUDGET STATUS: The Federal Way Community Center is near completion. Within the approved budget allocation all four alternates, including the third gym bay, the third community room, the climbing wall enclosure, and the running track, were constructed. Increased costs for other items such as, the climbing wall, phenolic (rust proof) lockers, kitchen equipment and telecommunications were also funded within budget. Even with higher construction costs for copper, cement, steel, and delays for bad weather, the Community Center construction contract will be completed on time and within budget. Construction Budget As of January 312007: Amount paid: . $19,088,204 Additional commitment 1,421,446 Total Construction Estimate $20,507,650 Construction Budget $20,578,451 Contingency remaining $70,801 Revenues from higher than anticipated interest earnings; private contributions; transfer from the 2007 play ground CIP budget for the portion earmarked for the community center play area; and additional net proceeds from the sale of KLCC facility now make it possible to fund enhancements set aside until such time as construction was substantially complete. PROPOSED PROJECT ENHANCEMENTS AND OTHER ADJUSTMENTS: This table shows a summary of changes in funding sources over and above the amounts previously budgeted, as well as a list of proposed enhancements and adjustments to other costs that are not part of the building construction budget. The proposed expenditure adjustments are summarized in three categories Correction; Enhancements; and Non- :;4'/" construction budget. 1. Correction: To adjust the initial budget appropriation to the council approved initial cost estimate. The original appropriation was rounded to $20.5 million when the actual construction estimate approved by council was $20,578,451 to be exact. 2. Enhancements: To carryout both the business plan and Council direction for adequate security and enhancements listed above. The sound system currently in the building is a basic system that provides the same music or information to all areas of the building. The improvements will be needed to provide Revenue and Sources: Interest Earning Donation (sound system, outdoor furniture) NW Parks, Fund raising exp 2007 Playground budget KLCC Proceed net, exceed $800k) -""';'--': ~~,"-~<:'!~- ~" ':~ nP:e ,!\4't!$fmeUl $797,000 105,000 (12,000) 67,000 90,000 $:1,04 0 Expenditure and Uses: 1. Correction to adooted construction budget 2. Proiect Enhancements: $78,451 Building Security/CCTV Improved Sound System Outdoor furniture Outdoor playground equipment Misc operating equipment Move-in and Buildin ad.ustments Subtotal Enhancements 160,000 70,000 45,000 30,000 100,000 100,000 505,000 -3. Adiustmellt to Non-COIistruction Budget: ConstructabilityNalue Engineering Building Commissioning Business Plan and Staffin Subtotal non-construction FHSRAC 02/27/07 J-1 . different audio/visual service to various activities in parts of the building. The outdoor furniture has to be commercial quality and withstand weather. The outdoor playground equipment serves the preschool and drop-in childcare rooms. Miscellaneous equipment includes items such as bleachers, safe, projectors, many tv's throughout the building, dishes, lifeguard stands, pool equipment, scoreboards, athletic equipment, games, climbing gear, refrigerators, ladders, workbench, and health equipment. 3. Non-construction budeet: To reduce construction costs, all design review and construction management costs were removed from the construction budget. To ensure quality, constructability, and cost effectiveness of the project, and to have a thorough testing of final product, the City retained Vanir, Heery, and Green Play to assist the City in value engineering, project management, business planning, and commissioning. These services were instrumental in delivering a quality facility on time and within budget. One additional suggestion is to increase the $5,000 place holder currently budgeted for grand opening. It was originally planned that any increased scope of the grand opening event will be supplemented from the CM contingency fund. At this time an additional $20,000 would be needed to carry out all the anticipated activities for the grand opening weekend. With all these adjustments, if approved by the Council, there would be an anticipated project fund balance of $190,000 (or $170,000, if additional grand opening event costs are funded from the project balance). Staff recommends transferring any remaining project balance upon project closing to the Community Center Facility Replacement Reserve Account. The above adjustments are currently in the proposed carry-forward budget adjustment ordinance. Any Council directions/changes will be incorporated in the final ordinance. FHSRAC 02/27/07 J-2 _..-._...~--_.._-_.._----_._._-----_._------_._--~...._._~--.__._._..._._--_._-----_.-.-.__.__._--------------..---.- COUNCIL MEETING DATE: March 6, 2007 ITEM #:_ CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: 2007 CARRY -FORWARD BUDGET ADJUSTMENT POLICY QUESTION: Should the City approve the 2007 Carry-Forward Budget Adjustment? COMMITTEE: Finance, Human Services & Regional Affairs Committee MEETING DATE: February 27,2007 CATEGORY: o Consent ~ Ordinance o City Council Business 0 Resolution STAFF REpORT By: Tho Kraus, Finance Manager ~______.. o Public Hearing o Other DEPT: Management Services Attachments: · Budget Adjustment Summary, Memo, and Ordinance. Options Considered: 1. Approve the 2007 Cany-Forward Budget Adjustment Ordinance as presented. 2. Provide direction to staff on modifications to the 2007 Carry-Forward Budget Adjustment Ordinance and forward to the full council at the next regular council meeting. STAFF RECOMMENDATION: Option 1. CITY MANAGER APPROVAL: DIRECTOR ApPROVAL: Counci I Council COMMITTEE RECOMMENDATION: Move the carry-forward budget adjustment in the amount of $23,932,208 to thefull Councilforapproval. Linda Kochmar, Chair Jeanne Burbidge, Member Jack Dovey Member PROPOSED COUNCIL MOTlON: HI move approval of the 2007 Carry-Forward Budget Adjustment Ordinance to second reading and enactment at the next regular council meeting on March 20, 2007. .. (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED o DENIED o TABLEDIDEFERREDINO ACTION '0 MOVEDTO SECOND READING (ordinances only) REVISED - 02/0612006 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM Date: To: February 21,2007 Finance, Human Services & Regional Affairs Committee Neal Beets, City Manager Tho Kraus, Finance Managef4L Carry Forward Budgei Adjustment Ordinance Via: From: Subject: Backe:round The carry forward budget adjustment makes the following types of modifications to current year's budget: 1. Adjust the beginning fund balance available based on the actual year-end balance of the previous year; 2. Appropriate projects that were budgeted in the prior year, but not completed and will continue during the current year; and 3. Make other changes or correction as needed. General and Street Fund Operations: . The preliminary $3.8 million, General and Street fund balance is over and above the amount projected for 2006 year-end. ' However, of this amount, $1.32 million will be needed to continue existing projects not yet completed and/or previously approved by council and $386 thousand in recommended new items listed below. The $3.8 million is made up of $1.76 million in higher revenues than budgeted and $2.02 million in unspent expenditures. The source of increase in revenues is permit fees ($545K), sales tax ($290K), property taxes ($192K), miscellaneous/other ($122K), interest earnings ($1l7K), gambling tax ($1l3K), public safety ($99K), state shared revenue ($97K), court revenue ($76K), franchise fees ($56K), recreation fees ($50K), criminal justice sales tax ($8K), and licenses ($6K), leasehold tax ($2K), offset by passport fees ($1.7K) that did not meet budget projections. On the $2.02 million unspent expenditures, $1.32 million will be needed in 2007 for projects in progress and $386 thousand in one-time items as listed below for Council funding consideration. . Provide $150K for City-wide City Hall Space Modifications to Implement Prop 1; . Provide $38K for Public Safety Conversion of Old Rifles and New Rifles/Replacement for Shotguns; . Provide $lOK for Public Safety Crowd Control Munitions and Equipment; . Provide $31K for Opticom in Public Safety Vehicles; . Provide $6.5K for Pawnshop Data Sharing (Leads On-Line) Program; . Provide $11 K for Public Safety Portable Alternate Light Source; . Provide $13.5K for 4 Speed Board Readers; , . Provide $26K for Emergency Management Temporary Help for Public Education and Outreach; and . Move $IOOK Snow & Ice Reserves to Budgeted Contingency. With these adjustments included, there will be $2.06 million remaining in unallocated General Fund balances. As in past years, staff recommends Council to keep the funds in fund balance until the mid-biennial budget review when all potential funding needs can be evaluated and prioritized, such as the funding short fall for SR 99 Phase 3 and S 3520d Improvement Projects, unless immediate funding is needed to address life safety concerns of the community. Desif!nated or Proiect Specific Funds: With the exception of New Community Center CIP, the balance of the adjustments are for continuation of designated programs or capital project funds and includes: $20.54M in CIP funds; $59K for arterial streets overlay; $55K for New Community Center Transition; $24K in 2% for the arts for community center project; $169K in lodging tax funds; $IK for Paths and Trails; $303K for GAC capital; $441K in internal service funds for projects; and $437K in enterprise funds for continuation of projects. As reported earlier, the New Community Center CIP proposed adjustments are comprised of three elements: I) $78K for correction due to rounding of the original budget; 2) $505K total in enhancements funded with donations and additional revenues from Klahanee proceeds, interest earnings, and includes building security/CCTV ($160K), improved sound system ($70K), outdoor furniture ($45K), outdoor playground equipment ($30K), miscellaneous operating equipment ($ lOOK), move in & building adjustments ($ lOOK); and 3) $294K to add non-construction budget. Overall, this is a combined total adjustment of $24,006,564. FHSRAC February 27, 2007 A~nda Item KPage 2 of 10 k:\fin\biennial\ordinanc\2007 cfadj memo.doc 2006 Results of Operations General & Street Fund Only Budget vs. Actual YND Estimate vs. Actual GENERAL & STREET FUND Year 2006 Favorable (Unfavorable) Favorable (Unfavorable) Summary of Sources & Uses Budget YND Estimate Actual $ % $ % Carryforward Request Beginning Fund Balance $ 4.728,229 $ 4.728,232 $ 4.728,229 $ - 0.0% $ (3) 0,0% $ 3,786,084 OPERATING REVENUES Property Taxes 8.692.174 8,692,174 8,883,719 191.545 2,2% 191,545 2,2% - Sales Tax 11.120.000 12.120,000 12.409,719 1,289,719 11,6% 289,719 2.4% Criminal Justice Sales Tax 1,877,000 1.945,240 1,953,822 76.822 4.1% 8,582 0.4% - Intergovernmental 2.287,000 2,252,194 2,349.500 62,500 2.7% 97,306 4,3% . leasehold Tax 2.500 2,026 4,592 2.D92 83.7% 2,566 126,7% - Gambling Taxes 1,414,000 1.250,000 1,363,468 (SO,532) -3.6% 113,468 9,1% Court Revenue 976,000 896,000 971,689 (4.311) ~.4% 75,689 8.4% Building PermilslFees-CD 1,653,400 2,412,600 2.806,343 1.152,943 69,7% 393,743 16,3% - ROW PermilslFees-PW 370,000 395,201 546.587 176,587 47.7% 151,386 38,3% - licenses 210,517 233.518 239,437 28.920 13.7% 5,919 2,5% Franchise Fees 733,000 815.206 871,451 138,451 18.9% 56,245 6.9% - Passport Agency Fees 86,000 86,000 69,430 (16,570) .19,3% (16,570) -19.3% Recreation Fees 874,335 778.370 828,823 (45,512) -5.2% 50,453 6,5% Public Safety 1,125.865 979,500 1.078,790 (47,075) -4,2% 99,290 10,1% dminlCash Management Fees 560,000 560.000 560,000 - 0,0% - 0.0% - Interest Earnings 183,000 410,408 526,981 343,981 188.0% 116,573 28,4% - Mise/Other 229,700 82.097 261,106 31,406 13.7% 179,009 218.0% - Transfer In Utility Tax-Celebration Park 245,962 246.000 245,962 - 0.0% (38) 0.0% - Transfer In Utility Tax-Kenneth Jones Pool 319,000 319.000 319,000 - 0.0% - 0.0% - ransfer In Utility Tax-Arts CommlRW&B 93,750 93,750 93,750 - 0.0% - 0.0% - Transfer In Utility Tax-Police Positions 625.000 625,000 625,000 - 0.0% - 0.0% - Transer In Utility Tax-Camp Kilworth SO,OOO SO.OOO 50,000 - 0.0% . 0.0% Transfer In Utility Tax-Street Bond Projects 202,000 202,000 202,000 - 0.0% - 0.0% - Transfe, In Utiiilv Tax-New Streetlights 108,300 108,300 108,300 - 0.0% - 0.0% - otal One.rating Revenues 34.038.503 35.554,584 37.369,469 3,330,966 9.8% 1,814.885 4.9% - OPERATING EXPENDITURES City Council 409,317 427,315 403,374 5,943 1.5% 23,941 5.6% - City Manager 908,228 911,859 913,472 (5,244) ~.6% (1,613) .{).2% 9,369 Federal Lobbyist $9K Municipal Court-Operations 1.158,496 1,159,762 1.057,856 100,640 8,7% 101,906 '8,8% Court Renovation Economic Development 292,893 284,008 232,458 60,435 20,6% 51,550 18,2% 48,900 SEPA $15K; Leland Contract $34K Wellness Prog $11 K; Document Imaging $7K; Records Management $21K; Election Management Services 1,901.022 2,023.026 1.793,521 107,501 5,7% 229,505 11.3% 74,808 Costs $20K; IT Temp Help $16K Outside Legal CounsellEmploymenl CivillCriminallegal Services 1,200.561 1,201.369 1,049,808 150,753 12,6% 151,561 12.6% 72,091 Practice PermitsiLand UseTemp Help $ 210K; HS Contract $12K; Org Capacity prog $37K; CERT $2K; Shoreline Master Plan $130K; Abatement Funds $6K: Volunteer Dinner $4K; Permit System $49K; Code Camp Prop Comm, Development Svcs 3,685,745 3.782,738 3,401,305 284 ,440 7,7% 381,433 10,1% 478,154 1 Vehide $24K Wail Services 1,384,060 1,484,060 1,354,295 29,765 2,2% 129,765 8.7% - JAG Grant $35K; BZPP Grant $48K; Fulure BVP Granl Match $84K; Seizures $229K; Reinvesting in Youth $10K ($5K each year in 07/08); Explorers $7K; Memorabilia $1K; Property Bureau $2K; Prop 1 & Overtlire $120K; RMS SW $3K; New Copier $5K; Convert Old Rifles $18K; New Riftes $20K; Opticom $31 K; Portable Alternate Light Source $11K; Crowd Control Munitions & Equipment $10K; Pawnshop Datasharing Police Services 17 ,649,507 17,626,173 17 .058.301 591 ,206 3,3% 567,872 3,2% 638,906 (Leads Online) prog $6K; Speed board Camp Kilworth M&O $50K; Arts Parks and Recreation 4.057,237 4,023.198 3.933,902 123,335 3,0% 89,296 2,2% 98,362 Commission $45K; Recreation System $3~ EOC Temp Help for Public Education & Oulfeach $26K; Joint EOC Funds $90K; Traffic Modeling $102K; CTR $30K; Snow Public Works 4,259,988 4,159,238 3,820,009 439,979 10,3% 339,229 8,2% 348,547 Ice $100K City-Wide City Hall Space Adjustment for Prop 1 and - - - n/a n/a 150,000 Other Changes frotal ODerating EXDenditures 36.907,054 37,082,746 35,018.301 1.888,753 5.1% 2,064,445 I 5.6% 1,919,137 Operating Revenues over/(under) Operating Exnenditures (2.868.551 ) (1.528.162) 2,351,168 5,219,719 -182.0% 3,879,330 -253.9% (1,919,137) OTHER FINANCING SOURCES One-Time Transfers In 55,450 55,4SO 58,080 2.630 4.7% 2,630 4.7% 9,369 Federal Lobbyist Police Grants $83K; Comm Dev Grant Grants & Other 133,686 147,348 88,015 (45,671) .34.2% (59.333) -40,3% 207,965 $95K; CTR Grant $30K Total Other Financing Sources 189,136 202,798 146,095 (43,041) -22.8% (56.703) -28.0% 217,334 OTHER FINANCING USES City Manager Contingency 907,747 - - 907,747 100.0% - n/a One-Time Transfers to CIP 100.000 100,000 100.000 0.0% 0.0% - Other - - 36,546 (36,546) n/a (36,546) n/a Total Other Financing Uses 1.007,747 100,000 136,546 871,201 86.5% (36,546) -36.5% ENDING FUND BALANCE $ 1.041,067 $ 3,302,868 $ 7,088,946 $ 6 047 879 580.9% $ 3 786 078 114.6% $ 2,084,281 Change In Fund Balance Ending Fund Balance Detail: Interfund loans 10,000 10.000 20,000 10,000 n/a 10.000 n/a 20.000 Fund Balance Designation Snow & Ice Removal 100,000 100,000 100.000 n/a n/a - Reserved for Next Yea(s Contingency 2.483,266 2,483,266 , 2,483,266 n1a n/a Unreserved $ 931.067 $ 709.602 $ 4,485,680 3554 613 n/a $ 3,776.078 n/a $ 2,064,281 Available Fund Balance ....11' ...., <L" ~uu, Agenda Item K Page 3 of 10 ATTACHMENT B CITY OF FEDERAL WAY 2007 CARRYFORWARD BUDGET ADJUSTMENT General Fund: Citv- Wide New Program-IS Charge-City Hall Space Modification to Implement Prop I......................................................... CiN Manaf!er CM-Federal Lobbyist-2006 Contract Balance (Offset by C[P Transfer)............................................................... EOC-P[anned Action SEPA ($14,500) and E[S Copies ($500). ... ... .................. ... ............... ...... ....... .................. EOC-Leland Consulting Group 2007 Contract.... ....... ............ ... ..... ... ... .... ........ ......... ... ............ ..... ..... ...... .... Communitv Deve/oDment HS Contracts Balance ($2,509) and Contributions/Donations received in 2006 for Human Services ($9,126). ... .... ...... ..... HS-Organizational Capacity Building Program-Balance................................................................................. NO-CERT Program Supplies ($2,374), Volunteer Dinner Supplies & Professional Services ($3,646).......... .......... ........ PL-Shoreline Master Plan Grant Grant Balance ($94,757) and City Portion ($35,225)..... .... .......... ...... ...... .... ........... PL-Backfill Staff (vacation)-Current Planning Projects................................................................................... PL-Prior Council Approval-One Time Staffing-From 2006 I-Time Project Savings................................................. BL- Temporary Staff-Permits (continuation of counter assistance)........... ........................................................... BL-Abatement Funds......................................................................................,................................... BL-IS Charge-Code Compliance Prop I Vehicle-Capital Contribution..... .... .... .... ...... ..........;. ... ... ...... ........... ... .... BL-IS Charge-Replace Worn out Seats-Inspector Vehicles..... ......... .................. ........... ...... ... ... ......... ...... ." ..... BL-Phase II Online Permit System-Capital Contribution...... .......... ... ............... ............... .... ...... ...... ......... ...... Law Outside Legal Services...:.................. ................................................................................................... Manaf!ement Services HR-Wellness Program-Balance...................... ......................................................................................... AD-IS Charge-Document Imaging System ($7,200) Records Management ($21,000)-Capital Contribution..................... CL-Election Services-Costs in Excess of2007 Adopted Budget of$90K........ ...... ...... ... ............ ............ ..... .... .:.... [S Charge-Information Systems Fund-Temporary Help..................................................... .............................. Parks & Recreation MT-Camp Kilworth M&O-2006 Balance-Transfer to Camp Kilworth CIP................... .... ........... .......................... REC-Arts Commission 2006 Balance................. ....................................................................................... REC-General Recreation System Enhancements........................................................................................... Public Sa{etv 2005 JAG Grant Balance ($19,049), 2006 JAG Grant Balance ($15,962) & BZPP Equipment Grant ($47,766}.. ...... ........ BVP Settlement $-Set aside for future Bulletproof Vest Grant Match. ...... ................ ...... .............. ...... ......... .... .... State ($922) & Federal Seizure ($234,844 )-Balances and Reinvesting in Youth ($5,000-Seizure Funded)..... ." ... ........... Explorer Program-Balance ($6,800), Memorabilia Account ($664), Property Bureau Proceeds ($1,813)........................ [S Charge-Prop 1 & Overhire Startup Costs........ ............... ...... ...... ...... ......... ........... ................... ... .............. PS-RMS SW Enhancements ($2,698) and New Copier ($5016, Use $5984 RR)-Capital Contribution.... .......... .............. New Program-Life Safety-Convert Old Ritles ($18,000), New Ritles/Replacement for Shotguns ($20,000)..................... New Program-Life Safety-Crowd Control Munitions and Equipment... ................ ..... ........ ... ............ ....... ... ....... .... New Program-Life Safety-Opticom @ $800 per Vehicle ($31,000). .... ......... ........... .... ................. ..... ..... ...... ... ... New Program-Life Safety-Pawnshop Data sharing (Leads Online) Program-Seizure Funded....................................... New Program-Life Safety-Portable Alternate Light Source........ ...... ........ ................ .... ....... ............. ... .... .......... New Program-Life Safety-4 Speedboard Readers (4)....... .... .".'. ................. ............. .................. ... ...... ........ ... Street Fund: EOC-New Program-Temporary Help- Public Education and Outreach-Source is 2006 Savings.. ........ ...... ... ... ... ........... EOC-Joint Emergency Management Funds-Balance.......... ............... ...... ..... .................. ........ ... ...... ... .......... ... TR-Traffic Modeling-Balance from RST Contract....... .... ......... ......... ........ ..... ..... ............ ......... ..... ............... OS-Traffic Modeling-Balance from Parametrix Contract................ ... ......... ... .... ..... ....... ............ ........ .............. CTR -Commute Trip Reduction-Deferred Revenue Balance-Grant Funded..... ......... ........ ....... ..... ...... ...... ... ........... New Program-Move Snow & Ice Reserves to Budgeted Contingency....... .... ...... .... ........ ...... ........... ... .......... ....... Subtotal General & Street Fund Arterial Street Fund: Arterial Streets Overlay-Balance.............. ..... ..... .......... ............ ..... ..... ...... ......... ..... ... ................ ..... ......... Hotel/Motel Lodging Tax Fund: HotellMotel Lodging Tax-Balance...... ........ .~.. ............. ....... ...... ........ .... ... ....... ............. ....... ........ ... .... ...... Community Center Operations: Community Center Transition Budget-Balance........ .......... .............. ... ............... ........ ... ... '" ...... ...... ...... ....... Patlls & Trails Fund: Paths & Trails-Balance..... ..... ....... ......... ...... ... ...... ......... ...... ...... ................. ...... ............... ... .... ...... ....... Subtotal Special Revenue Funds J;HSRAC February 27,2007 Agenda Item K Page .. of 10 2/2112007 2:05 PM 2007 Carryforward list 0708 2007 2008 150,000 9,369 15,000 33,900 11,635 37,217 6,020 129,982 39,606 115,927 54,766 6,019 24,000 4,000 48,982 72,091 10,608 28,200 20,000 16,000 50,000 45,012 3,350 82,777 83,950 224,266 9,277 115,922 7,714 38,000 10,000 31,000 6,500 11,000 13,500 5,000 25,958 89,703 32,900 69,555 30,431 100,000 1,914,137 5,000 59,081 169,064 55,273 603 284,021 CITY OF FEDERAL WAY 2007 CARRYFORWARD BUDGET ADJUSTMENT Downtown Redevelopment CIP Fund: Downtown Redevelopment-2006 Balance.. ......... ...... ... ... ............... ...... ......... ...... ... ..... .... .................... .... ... City Facilities CIP Fund: NCH-Close Out New City Hall-Transfer to Fund 505 Buildings & Furnishings Replacement Reserves... .............. ... ...... KLCC-Klahanee Facility-Project Balance. .,..... ... ........... .... ........ ............... .... ...... .............. .... ............ ......... KLCC- Transfer $90,000 Additional Proceeds to NCC CIP (Reallocation of Beginning Fund Balance).......................... New Community Center-Balance...............:............................................................................................. New Community Center-Correction to New Community Center Adopted Construction Budget.................................... New Community Center.Proiect Enhancements Building Security/CCTV........... ............................................. ......................................................... Improved Sound System.............................................................. .................................................... Outdoor Furniture....................................................... ............................................................... .... Outdoor Playground Equipment.......................... ........................ ...........................~........................... Miscellaneous Operating Equipment.......................................................................... ......................... Move In & Building Adjustments...... ................................... ..... ..................................... .................... New Community Center-Adiust Non-Construction Budf!et ConstructabilityNalue Engineering-Use Earned Interest....................... ... ................................................. Building Commissioning-Use Earned Interest.............................. ................ ......................... ................. Business Plan & StaffinglFee Structure-Use Earned Interest....................................................,.................. Parks CIP Fund: Sacajawea Sportsfield Improvements-Balance...... .... .... ...........................................................:................... Neighborhood Parks-Thompson Open Space/Cedar Grove-Balance.................................................................... Celebration Park-Balance............................................... ....................... .............................. .................. Historical Cabins Park-Balance.............. ...... ............................................................ ..... ....... .................. Major Maintenance-Parks Facilities-Balance........................................... .................................................... Parks Acquisition-Madrona Property-Balance........................................................... .................................. Downtown Park-Balance............................... ... ....................................... ................................ ............. Playgrounds-Balance ($8,864) and Transfer to Thompson Open Space/Cedar Grove ($65,000)................................... Playgrounds-Reduce 2007 Playground Budget & Transfer $67K to New Comm Center Playground Equipment............. .... Bike Facility-Balance.... ...................................................................................................................... Lakota Park-Balance........................................................................................................................ ... Hylebos Boardwalk-Project Balance & Grants....................... ...... ......... ... ...... ...... ...... ....... .... ................ ....... Sacajawea Park Master Plan-Balance....................................................................................................... Saghalie Park-Sports field Renovation/Artificial Turf-Balance....................................................................... ... Camp Kilworth-Transfer-in 2006 M&O for Clean-Up and Interest Payment on Note..... ... ............. .... ....... ...... .......... Carnp Kilworth-Balance (-$535,225) & Grants Anticipated ($1,500,000).... ....... ...... ..... ............ .... ..... .................. Surface Water Management CIP Fund: Small CIP/Annual Programs-Balance....................... .................................................................................. SW 356th Regional Storm Water Facility-Balance.. ........... ....... ....... ............. .... ...... ........... .... ........ ............ ... West Hylebos Channel StabilizationlRestoration-Balance ($364,710) & Grant Balance ($112,568).......................~...... West Branch Lakota Creek Restoration-Balance........................................................................................... SW 325th St Culvertffrunk Replacement-Balance.... ............ .... ........ ... .... ...... ...... ..... ... ...... .... ... ........ ............ East Branch Lakota Creek Restoration-Balance............................................................................................ Lakota Wetland Regional Pond-Balance.................................................................................................... S 373rd Bridge and Hylebos Replacement-Balance.... ............ ................. ................ ....... .................... ........... Joe's Creek Regional Stormwater Facility & Salmon Habitat-Balance........ .......... ..... ........ ... ... ...... ............ ... ....... SW 320th Street Crossing-Balance. ...... ......... ... ... ... ...... ......... ...... ......... .... ..... ..... ........ ... ......... ............ ...... SW 332Nd Street Trunk Replacement-Balance........ ........... .... ...... .......... .......... .... ...... ....... .... .... ..... .......... ... Mirror Basin Detention Pond-East 15"-Balance........................................................................................... Lake Jeane Outlet Control Structure-Balance.............. ................................................................................. West Hylebos Basin Land Acquisition-Balance.... ........ .... ............... ...... .......... ........ .... ...... ...... ... ........ ....... ... Transportation CIP Fund: Transfer to General Fund for Federal Lobbyist 2006 Contract Balance.. ..... .................:.... ............ ......... ......... ..... Transportation Systems Safety Improvements-Balance................................................................................... South 356th St SR99 to 1st Ave-Balance.......... ....... ..... ....... .................. ... .......... .-.-... _..... ....... .............. _....... SR99 Phase 2-Balance.. ..... .... ...... ... ..... .... ... ... ...... ... ............ ........... ................ ........ ....... ..... .......... ........ So 348th St @ 1st Ave So-Add Turn Lanes-Balance ($124,489) & Grant Anticipated. ....... ............ .................. ........ 21st Ave SW/SW 357th St: SW 356th-22nd Ave SW-Balance.. ..... ......... ....... ................. .... ........ .......... ...... ...... . So 348th St: 9th Ave So to SR99-Balance $92,729 and Grant Reduction of$893,800). ......... .... ......... ........... ... ......... So 320th St @ 20th Ave South-Balance. ............ ... ...... ....... ...... .............. '" ............... ... ........... .... .... ...... ... ... So 348th St @ SR161 (348h & Enchanted)-Balance. .................. ....... ...... ......... ......... .......... ....................... _.. SR99 Phase 3 (Ending Proj. Bal $335,694, Actual TIB $2,456,804 & Fed Award $2,000,000, Elim Est Grant $6.695M).... SR99 Phase 3 (Actual TIB $2,456,804 & Federal Award $4,470,449, Elim Est Grant $2,350,000)........ ............... ........ SW 312th St@ SR509-Balance.. ........ .... ......... ....... ........... ........... .... ... ...... ...... .......... ....... .......... ... ... ...... So 320th St: 8th Ave S-SR99-Balance....... _. ......... ........ ... ............. ....... ..... .............. ... ............ ... ..............._ 9th South and 336th-Balance.... ...... ... ...... ... .... ... ... ........ ........ ......... .............. ..... .... ..... ....... ... ........... ... ..... 10th Ave SW/SW 344to St-Balance.. ._.... ....... _.. .... .................. ... ................... ............ ........... ..... .... ........... FHSRAC February 27,;20Q7 Agen<!a Item K Pag(! 5 of 10 2/21<2007 2:05 PM 2007 Cartyforward list 0708 9,320,676 564,677 75,097 1,202,364 78,451 160,000 70,000 45,000 30,000 100,000 100,000 149,759 35,000 88,790 $54,463 $35,637 $213,362 $69,242 $144,712 $9,277 ($3,950) $73,864 $0 $10,000 $23,62-3 ($8,311 ) $27,618 $31,991 $50,000 $964,775 139,779 4,969 $477,278 $94,954 $155,970 $256,806 $5,000 $4,827 $162,434 $499,671 $27,691 $48,000 $60,075 $399,510 9,369 28,336 1,947,353 119,411 124,489 44,587 (801,071) 194,959 158,914 (1,902,502) 1,052,800 715,253 8,340 246, 108 79,516 211,825 CITY OF FEDERAL WAY 2007 CARRYFORWARD BUDGET ADJUSTMENT So 336th St @ 1st Way So-Balance.. ...... ... ......... ......... ......... ...... ....... ... ..... ...... ..... ...... ............. ........... ...... 1st Ave So and So 28th Intersection-Balance.... ... ....... ........... .... .., ....... ....... .... ........ ... .... ........... ......... ..... ...... So 336th St: 18th Ave So-15-Balance.. .... .......... ......... ......... ......... ...... ." ................... ..... ....... ........... ...... .... 15 City Center Access Study-Balance.... ........ ....... .... ........... ...... ... ...... ...... ... ... ....... .............. .... ..... .... ......... South 320th Street@ 1st Ave South-Reallocate $ to So 352nd Street Extension from SR99 to SRI61........................... So 352nd Street Extension From SR99 to 16 I-Balance ($47,747) & Shifting $ from So 320th @ 1st Ave ($1,000,000).. .... So 320th St: 1st Ave to 8th Ave So-Balance..... ..... ............. ...... ...... ............... ......... ..... ....... ......... ,"'. ..: ........ So 344th St: SR509 - 16th Ave So-Balance....... ...... ...... ................ ............... ..... ................ ........ ....... .,. ....... So 320th St@ IS-Balance. ....... ...... ...... ......... ... ........... ... ...... ....... ... ..................... ........ ...... .... ..... .... ....... 1st Ave So: So 292nd St - So 312th St-Balance............................................ ........................ ... .,. .................. SR99 Phase 4 (Ending Proj Bal $932,726, Actual TIB $1,500,000 & Federal Award $2,440,584, Elim Est Grant $2.150M) SR99 Phase 4 (Actual TIB $865,789 & Eliminate Est Grant $2,350,000).......... .......... ...... ...... ............................. 1st Ave & So 333rd Signal-Balance....................... ..... ....................... ..... ................................................. So 312th St @ 28th Ave So-Balance..................................................................... ,...:............................... 21st Ave S.o, So 318th to So 320th-Balance...................................... ............. .................................... ......... South 356th /BPA Trail-Balance............................................................................................................. Undergrounding of Overhead Crossing on SR99 (WSDOT)-Balance........ ........................................................... Subtotal Capital Project Funds Surface Water Management: King County ILA WRIA....................................................................................................................... Steel Lake Management District-Balance......................................... ........................... ............................... Dumas Bay Centre Fund: DBC-Carpet, Irrigation, Roof Repair-Balance..................................................... ......................................... DBC/KFT Rehab Project-Balance........................................................................................................... DBC Site Restoration Phase 2-Balance.................................................... ........................... ....................... KIT-Deferred Maintenance-Balance.. ................................................................................ ...................... Risk Management Fund: CD/BL-Prop I Code Compliance Vehicle lnsurance........ ........... ...... ............ .............. ........ ........... ................ Information Systems: Adopted Budget Correct-Court Printer $2,500 & Eliminate Duplicate Entry ($50,000)-No Impact to Oper Funds.............. CW- Temporary Help.................................................................................................... ....................... PS-Overhire Program I-Time Setup Charges ($18,046) & Hardware ($1,876}....................;.... .... ........ .................. CD/BL-Phase II Online Pennit System ($48,982) and PK/REC-Recreation System Enhancements ($3,350).......... ...... .... MS/CL-Records Management System ($21,000) and Document Imaging Systems Enhancement-Use Reserves................. CW -Server Software LicenseslEnhancements ($4,250) & Data Backup Hardware/Software ($4,250)-Use Reserves........... PS RMS SW Enhancement ($2.698) and WI-FI Proiect Balance ($15.167).. ......... ..... ...... .......... .................... .... ... Mail & Duplication Services Fund: PS-New Copier in Admin Area.... ......... ........... .......... .., ....... ......... ... ... ......... ... '" .......... .......... ....... .... ...... Fleet & Equipment Fund: Prop I Code Compliance Vehicle-Capital in 2007 and M&O in 2008.................................................................. PK/MT-Tractor Mounted Slicer Seeder-Use of Reserves.... ............ .... ........ ..... ... ..... ...... ......... ..... .... ......... ....... PS-Prop I & Overhire Program-Startup Costs.. ........... ......... ...................... .................. .............. ....... ...... ..... BL-M&O Exp-Replace Worn out Seats-Inspector Vehicles. ... ....... ............ ... ...... ...... ...... ..... .... .... ............... ...... Buildings & Furnishings Fund: NCH Energy Study/Modification-Source is Savings ($74,334) and New City Hall Close Out ($25,666).. ........... ......... .., New Program-City Hall Space Modification to Implement Prop 1.................... ................. ...... ....... .......... .......... Subtotal Proprietary Funds Special Studies/Contracts Fund: Government Access Channel-Balance..... ...... ..... ..' .............. ....... .... .................. ..... .......... ... ... ...... ...... .... .... 2% for the Arts Fund: 2% for the Arts-2006 Balance................................ .... .., ..... ......... ... ....... ..... ... .., ...... ............ .... .... ........... .. Subtotal NonAnnual Programs 70,918 39,103 6,179 (805,144) 1,047,747 22,498 9,044 100,563 9,717 2,723,310 63,159 846 350,564 12,310 85,851 20,259,380 2,667 16,725 15,308 268,118 113,985 20,128 2,500 16,000 19,922 52,332 28,200 8,500 17,865 11,000 24,000 11,465 96,000 4,000 100,000 150,000 978,715 302,906 24,163 327,069 (1,484,211) 283,842 1,000 (50,000) 3,400 (45,600) GRAND TOTAL - ALL FUNDS 243,242 23,763,322 2/2112007 2:05 PM 2007 Ca,ryfolWard list 0708 FHSAAC Feb",ary 27,. 2007 Agen~a Item K Page 6 of 10 ORDINANCE NO. AN ORDINANCE OFTHE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, RELATING TO BUDGETS AND FINANCE, REVISING THE 2007-08 BIENNIAL BUDGET (AMENDS ORDINANCE 06-537). WHEREAS, certain revisions to the 2007-08 Biennial Budget are necessary; and WHEREAS, these revisions are a result of funds to be carried forward from 2006; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Amendment. Ordinance 06-537, Section 1, is hereby amended to adopt the revised budget for the years 2007-08 biennium in the amounts and for the following purposes: Section 1. 2007-08 Biennial Budget. That the budget for the 2007 -08 biennium is hereby adopted in the amounts and for the purposes as shown on the attached Exhibit A and B (2007 and 2008 Revised Budget). Section 2. Severability. The provisions ofthis ordinance are declared separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this ordinance or the invalidity of the application thereofto any person or circumstance, shall not affect the validity of the remainder of the ordinance, or the validity of its application to other persons or circumstances. ORD.#' , PAGE 1 FHSRAC ~bruary 27,2007 Agend~ Item K Page 7 of 10 Section 3. Ratification. Any act consistent with the authority and prior to the effective date ofthis ordinance is hereby ratified and affirmed. Section 4. Effective Date. This ordinance shall take effect and be in force five (5) days from the time of its final passage, as provided by law. PASSED by the City Council of the City of Federal Way this day of , 2007. CITY OF FEDERAL WAY MAYOR, MICHAEL PARK ATTEST: CITY CLERK, LAURA HATHA WAY APPROVED AS TO FORM: CITY ATTORNEY, P A TRIClA RICHARDSON FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTNE DATE: ORDINANCE NO. K:\\f1IlIbiennial\ordinanc\2007 carryfolWard ordinance.doc ORD.# , PAGE 2 'FHSRAC February 27,2007 Ageli~ Item K Page 8 of 10 Iv> I '" '" '" 0 0'" '" '" co '" r- '" 0 '" :ol~ - <<) r- ~ .. \... S r- <<) '-' 0 - '" ... '" CO '" r- '" '" v> r- " "1::l I; I -:. '" - <<) "'. "'- - r- v:. ... ... 0 "'. 0 r- "> I: ~ .. v\ - v\ 0\ .... <<) - ",' v\ .q: <<) '" -':0 M .... ",' '<5 .s .. '" - - - M <<) M '" CO CO r- 0 0'" '" '" "" .. to ~ .. l~ r-. - '" - M - "'. M '" '" ... '" r-. 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I,f)"' 00 M "=:t'OONMt"-- \OM~OOl""') '-.:::t'" C".t N^ V> OJ) c :E s= .~ ~ E ~ u Co t.r.. "~ -g. 0<$ ~ I.LI ~ o 0<$ .5 o..~-O g.] .; (/)LL.1Il '0 0\ '0 ....' .... - or) '" .... c '" - ~. ..... c::i 0\ .... '" .... '" .....' .... '" .... 00 8: oC '0 C c::i 0\ .... '0 '0 00 '<S '" .... ",' .... .... .... ~ '" :cJ. '" .... .... ~ ~ 0\ or) .... 00 '" c ,,' 00 ..... gg .... :;; ..: <X> '!1 :: '0 ~ & 00 c. '" r-- o o !::! N N .... to o '" () c: '" c: 'ii ~ -ti '" ~ .... "'<: <; ~ ~ '" l:: (.) "E ~ ~ '" U r-- o o ~ c: <0 c: 'ii .9 m 'c c: '" 9 c: 5 .;.: COUNCIL MEETING DATE: March 6,2007 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: DECEMBER 2006 MONTHLY FINANCIAL REPORT POLICY QUESTION: Should the City approve the December 2006 Monthly Financial Report? COMMITTEE: Finance, Human Services & Regional Affairs Committee MEETING DATE: February 27, 2007 CATEGORY: [gI Consent o City Council Business D Ordinance D Resolution D D Public Hearing Other STAFF REpORT By: Tho Kraus, Finance Manage.r~'- DEPT: Management Services Attachments: · December 2006 Monthly Financial Report Options Considered: 1. Approve the December 2006 Monthly Financial Report as presented and forward to the March 6, 2007 Council Consent Agenda. 2. Deny approval of the December 2006 Monthly Financial Report and provide direction to staff. STAFF RECOMMENDATION: NA CITY MANAGER ApPROVAL: DIRECTOR ApPROVAL: \tJ Committee Council Council COMMITTEE RECOMMENDATION: Linda Kochmar, Chair Jeanne Burbidge, Member Jack Dovey Member PROPOSED COUNCIL MOTION: "[ move approval of the December 2006 Monthly Financial Report as presented. " (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED o DENIED o TABLEDfDEFERREDfNO ACTION o MOVED TO SECOND READING (ordinances only) REVISED - 02/06/2006 COUNCIL BILL # I ST reading Enactment reading ORDINANCE # RESOLUTION # ~ CITYOF~ Federal Way Final December 2006 Monthly Financial Report GENERAL & STREET FUND OPERATIONS The overall operating of the combined General and Street Fund showed a positive result of $5.22M through December. Overall revenue total $37.37M and is $3.33M or 9.8% above budget, primarily attributable to the exceptional building permit activities and a positive sales tax infused by new constructions. Both pennit and construction sales taxes are cyclical in nature and very sensitive to changing economy and should not be oveiIy relied upon for long-term purposes. Year-to-date expenditures total $35.02M and is $1.89M or 5.1% below budget. 2005 2()06 2006 ,Budget vs Actual GENE:RAL & STRE:ET FUND Annual Annual Annual Annual Favorable (Unfavorable} Summary of Sources & Uses Budget Actual Budget Actual $ % Beginning Fund Balance $ 2.945,041 $ 2.945,041 $ 4,728,229 $ 4,728,229 $ 0 0.0% OPERATING REVENUES Property Taxes 8,584.024 8,442,168 8,692.174 8,883,719 191,545 2.2"10 Sales Tax 10.793,000 11.305,537 11.120,000 12,409,719 1,289,719 11.6% Criminal Justice Sales Tax 1,781.000 1,817,981 1,877.000 1.953,822 76,822 4.1% Intergovemmental 2,210,000 2,248,446 '2,287,000 2.349,500 62,500 2.7% Leasehold Tax '2,500 2,026 2,500 4,592 2,092 83.7% Gambling Taxes 1.430,000 1,501.065 1.414,000 1,363,468 (50.532) -3.6% Court Revenue 1,281,000 877,147 976.000 971,689 (4,311) -0.4% Building Permits/Fees-CD 2.942,400 3.141.368 1.653,400 2,806.343 1,152,943 69.7% ROW Permits & Develop SVC5 Fees-PW 365.000 346,605 370,000 546,587 176.587 47.7% Licenses 208,517 233,304 210,517 239,437 28,920 13.7% Franchise Fees 723,000 787,639 733,000 871,451 138,451 18.9% Passport Agency Fees 85,086 63,418 86,000 69,430 (16.570) -19.3% Recreation Fees 872.335 825,052 874,335 828,823 (45,512) -5.2% Public Safety 931,090 1.100,604 1.125.865 1,078,790 (47,075) -4.2% AdminlCash Management Fees 552;000 552,000 560,000 560,000 0 0.0% Interest Earnings 172.000 277,945 183,000 526.981 343,981 188.0% Mise/Other 184.700 303,856 229.700 261.106 31 ,406 13.6% Onnoinn T=ncf..rs In' - Utility Tax-Celebration Park 238.798 238.798 245.962 245,962 - 0.0% Utility Tax-Kenneth Jones Pool 314.000 314,000 319.000 319,000 - 0.0% Utility Tax-Arts Comm/RW&B Festival 93,750 93,750 93,750 93.750 - 0.0% Utility Tax-Police Positions 625.000 625,000 625,000 625,000 - 0.0% Utility Tax-Street Bond Projects 192.000 192,000 202.000 202,000 - 0.0% Utility Tax-New Street Li9hts 93.900 93.900 108,300 108.300 - 0.0% Utility Tax-Camp Kilworth M&O 50,000 50,000 - 0.0% Total Operating Revenues 34,675.100 35,383.607 34.038,503 37,369,469 3.330.966 9.8% OPERATING EXPENDITURES City Council 388,802 344.136 409,317 403,374 5,942 1.5% City Manager 871,491 853,100 908,228 913,472 (5,244) -0.6% Municipal Court-Operations 1,401,822 983,097 1,158,496 1,057,856 100,639 8.7% Economic Development 302,115 228,584 292,893 232.458 60,435 20.6% Management Services 1,883.518 1,862,587 1,901,022 1,793,521 107,501 5.7% Civil/Criminal Legal Services 1,145.500 1,005,324 1,200,561 1,049,808 150.753 12.6% Comm. Development Svcs 3.494,215 3,123,953 3,685,745 3,401,305 284.439 7.7% Jail Services 1,442,060 1.400,637 1.384,060 1,354.295 29,765 2.2% Police Services 16,397.701 15,843,471 17,649,507 17,058,301 591,207 3.3% Parks and Recreation 3,945,274 3,941.474 4,057,237 3.933,902 123,335 3.0% Public Works 3.910,022 3,644,449 4,259,988 3,820,009 439,979 10.3% Total Operating Expenditures 35,182,521 33,230,813 36.907,053 35,018,301 1,666.752 5.1"10 Operating Revenues over/(under) Operating Expenditures (507,421) 2,152.795 (2.868.550) 2,351,169 5,219.719 -182.0"10 OTHER FINANCING SOURCES One- Time Transfers In 81,000 73,551 55.450 58.080 2,630 4.5% Grants & Other 498,256 584,873 133,686 88,015 (45,671) -51.9% Total Other Financing Sources 579.256 658,423 189,136 146,096 (43,040) -29.5"10 OTHER FINANCING USES City Manager Contingency - - 907,747 - nla nla One-Time Transfers to CIP 1,028,030 1.028,030 100,000 100,000 nla nla Other 40,000 - - 36.546 nla nla Total Other Financing Uses 1,066,030 1,028,030 1,007,747 136.546 nla nla Total Ending Fund Balance 1,948.846 $ 4,728,229 $ 1,041,068 $ 7.088,948 nla nla FHSRAC February 27, 2007 Agenda Item l Page 2 of 10 DESIGNATED OPERATING FUNDS Through December, designated operating funds revenue total $24.79M and is $2.97M above the annual budget of $21.82M with utility taxes and real estate excise taxes being the major contributors. Expenditures of $16.85M is $275K below the budget estimate of $17.13M. 2005 2006 2006 Budget vs Actual DESIGNATED OPERATING FUNDS Annual Annual Annual Annual Favorable (Unfavorable) Summary of Sources & Uses Budget Actual Budget Actual $ % Begin Balance-Designated Funds $ 4,610.136 $ 4,610,136 $ 5,725,052 $ 5,725.052 $ - 0.0% OPERATING REVENUES Intergovernmental 596,245 565,157 617.953 561,779 (56,174) -10.0% Utility Taxes 8.225,399 8,292,520 8,407,499 9,043,449 635,950 7.6% Hotel/Motel Lodging Tax 150,000 158,117 150,000 175,219 25,219 16.8% Real Estate Excise Tax 4.250.000 4,695,984 3,150,000 5,499,911 2,349,911 74.60/0 Dumas Bay Centre 523,775 452,672 533.398 496,904 (36,494 ) -6.8% Knutzen Family Theatre 78.515 69,648 86,720 122,117 35,397 40.8% SWM Fees 3,576,746 3,535,750 3,607,080 3,619,511 12,431 0.3% Refuse Collection Fees 167,701 165,950 170,217 168,905 (1.312) -0.8% Interest Earnings 203,345 217,821 197.970 199.643 1,674 0.8% Miscellaneous/Other 217,250 284.251 - 4 4 100.0% hnnnj ~ In' - Utility Tax-Knutzen Theatre 118,869 118,869 121.840 121.840 - 0.0% Utility Tax-Debt Service 4.242,273 4,202,629 3,885,861 3,885,861 - 0.0% Utility Tax-Arterial Streets 890,625 890.625 890.625 890,625 - 0.0% Total Operating Revenues 23.240,742 23.649,993 21.819,162 24,785,769 2.966,606 13.6% OPERATING EXPENDITURES City Overlay Program 1,547.040 1,495,865 1.599,792 1,572,052 27,740 1.8% Utility Tax-Admin/Cash Mgmt Fees 54.429 54,429 55.237 55,237 0 0.0% Solid Waste 387,238 322,151 340,130 313,388 26,741 7.9% Hotel/Motel Lodging Tax 567.446 509,592 282,627 194,879 87,748 31.0% Debt Service 6,833,128 6,801,614 3.678,856 3,618,048 60,808 1.7% Surface Water Management 2.864,111 2,684,052 3.001,875 2,923,779 78,096 2.6% Dumas Bay Centre 538,575 478,294 534,628 526,359 8.269 1.5% Knutzen Family Theatre 201,090 168.945 201,720 216,400 (14,680) -7.3% Onnoinn Transfers Out: - Utility Tax-Celebration Park 238,798 238,798 245,962 245.962 - 0.0% Utility Tax-Kenneth Jones Pool 314,000 314.000 319,000 319,000 - 0.0% Utility Tax-Arts Comm/RW&B Festival 93,750 93,750 93,750 93,750 - 0.0% Utility Tax-Police Positions 625,000 625,000 625,000 625.000 - 0.0% Utility Tax-Street Bond Projects 192,000 192,000 202,000 202,000 - 0.0% Utility Tax-New Street Lights 93.900 93.900 108,300 108,300 - 0.0% Utility Tax-Knutzen Family Theatre 118,869 118,869 121,840 121.840 - 0.0% Utility Tax-Arterial Streets Overlay 890,625 890.625 890,625 890,625 - 0.0% Utility Tax-Camp Kilworth M&O - - 50,000 50,000 - 0.0% Utility Tax-Debt Service 4,242,273 4,202,629 3,885,861 3,885,861 - 0.0% Utility Tax-Transportation CIP 890.625 890,625 890.625 890,625 - 0.0% Total Operating E;xpenditures 20.692,897 20,175,138 17,127,828 1.6.853.105 274.723 1.6% Operating Revenues over/(under) Operating Expenditures 2,547,845 3.474.855 4,691.334 7.932,663 3,241,329 68.6% OTHER FINANCING SOURCES One-Time Transfers In 60,404 62,904 - - - n/a Grants/Mitigation/Other 175,036 257,131 114,319 247,325 133.006 53.8% Total Other Financing Sources 235,440 320.035 114,319 247,325 - 0.0"1. OTHER FINANCING USES One-Time Transfers 'Out 2,830,419 2,679,974 4,255,095 4,255,096 - 0.0% Other - - - - - n/a Total Other Financing Uses 2,830,419 2,679.974 4,255,095 4,255,096 - 0.0% ENDING FUND BALANCE Arterial Street - 97,272 (1 ) 59,081 n/a n/a Utility Tax 868,708 1,027,503 1.228,801 1,912.636 n/a n/a Solid Waste & Recycling 60.641 121,707 75,072 99,976 n/a n/a Hotel/Motel Lodging Tax - 132.627 - 169,064 n/a n/a Paths & Trails 14,991 15,272 24,831 . 25.399 n/a n/a Debt Service Fund 2,815,373 3.195,705 3,902,710 6,217,347 n/a n/a Surface Water Management 799.420 1,120.908 1,033,486 1,163,241 n/a n/a Dumas Bay Centre Operations - (14.816) (0) (28,226) n/a n/a Knutzen Family Theatre 3,869 28.875 10,709 31,426 n/a n/a Total Ending Fund Balance $ 4,563,002 $ 5,725,052 $ 6.275,608 $ 9,649,943 n/a n/a FHSRAC February 27, 2007 Agenda Item L Page 3 of 10 Real Estate Excise Tax Compared to 2005, collections are up $804K or 17.1%. December's receipt of $252K is $105K below December 2005's activity and includes a total of 240 real estate transactions, of which 80 were tax exempt and of the remaining 160, 3 were mobile home sales. The annex area has contributed year-to-date revenue of $90,036. The largest transactions in the current month consist .of the sales of residential home @ Marine Hills, and Sea Tac Market & Auction Retail Store @ 34233 Pacific Hwy S. REAL ESTATE EXCISE TAX REVENUES Year to date thru'December 2005 2006 Change from 2005 Month Actual Actual $Var % Var Jan $ 170,866 $ 157,303 $ (13,563) -7.9% Feb 275,617 468,067 192,449 69.8% Mar 384,048 585,651 201,602 52.5% Apr 784,135 464,491 (319,644) -40.8% May 481,264 536.863 55,599 11.6% Jun 425,029 403.129 (21,900) -5.2% Jut 290,288 472,383 182,095 62.7% Aug 416,213 425,803 9,591 2.3% Sep 515,578 821,731 306,153 59.4% Oct 237,983 322,927 84,944 35.7% Nov 357,228 589.195 231.966 64.9% Dee 357,736 252.370 (105.366) -29.5% Total $ 4,695,984 $ 5,499.911 $ 803,927 17.1"1. Sales Tax Year-to-date revenue of$12.41M is above December 2005 year-to-date revenue of $11.31M by $ 1.1 OM or 9.8%. The current month's Sales Tax of $ L03M is above the 2005 monthly activity by $5K or 0.4%. As shown in the detail by SIC code table, new construction alone increased by $624K, which is the primary contributing factor of the positive bottom line. In addition, the major projects that contributed to this increase are mainly public projects. For these reasons, the sales tax improvement is temporary in nature, different than the broad based economic improvement which would be more sustainable. LOCAL RETAIL SALES TAX REVENUES Year-ta-date tflru Oecember 2005. 2006 Change from 2005 Month Actual Actual $ % Jan $ 862,219 $ 938.052 $ 75,833 8,8% Feb 1,155,867 1,365,682 209,815 18.2% Mar 794,197 862,566 68,369 8.6% Apr 752.487 862,627 110,140 14.6% May 935,065 996,962 61,897 6.6% Jun 857,410 964,269 106,859 12.5% Jul 813,885 975.607 161,722 19.9% Aug 1.057,583 1,197,002 139,419 13.2% Sep 1.004,058 1,062,683 58,625 5.8% Oct 994.469 1,037,502 43,033 4.3% Nav 1,051.158 1,115.115 63,957 6.1% Dec 1,027,139 1,031.652 4,513 0.4% Total $ 11,305.537 $ 12,409,719 $ 1,104,182 9.80/. Sales Tax bv SIC Code COMPARISON OF SALES 'TAX COLLECTIONS BY SIC GROUP Year-to-date thru December Component 2005 2006 Change ftom2005 Group Actual Actual S % Retail Trade $ 5,886,543 $ 6,317,881 $ 431,338 7.3% Services 2,254,845 2,319.304 64,459 2,9% ConstrucUContract 1,491,219 2.114,732 623,513 41.8% Wholesaling 528,046 499,626 (28,420) -5.4% ransp/Utility 14,540 17,014 2,474 17.0% Information 593,700 531,407 (62.293 ) -10.5% Manufacturing 134,750 179,874 45,124 33,5% Government 35,220 40.888 5,668 16.1% Fin/lns/Real Estate 341,377 355,940 14,563 4,3% Other 25,297 33,053 7.756 30.7% Total $ 11.305,537 $ 12,409,719 $ 1.104,182 9.8% Retail sales continue to remain the largest source of sales tax revenue, accounting for 51 % of all sales tax collections. Year-to-date retail sales tax collection is up $431K or 7% above year-to-date 2005; majority of the increase is. in the following areas: miscellaneous store retailers, electronics and appliances, general merchandise stores, and motor vehicles and parts dealer. Services industry accounts for 19% of the total sales tax collections. On year-to-date basis, services sales tax is up $64~ or 3% compared to 2005. This includes $IOOK in one-time increase from a major software company. Wholesale trade accounts for 4% of the total sales tax collections. Year-to-date wholesaling activity is down $28K or 5% below 2005 year-to-date. Majority of the decrease is due to a drop in durable goods wholesale trade activity during the month of October 2006 compared to October 2005 of a computer marketing company. Information accounts for 4% of the total sales tax collections. Year-to-date information activity is down by $62K or 11 % compared to 2005. Majority of the decrease is due to decrease in: activity of publishing industries, downsizing of motion picture and sound record activity, merging of a couple major telecommunication providers, and decrease in activity of a major internet service provider. Manufacturing activity accounts for 1 % of the total sales tax collections is up $45K or 34% when compare to 2005 year-to-date. Significant increase IS due to increase in activity of a major wood product manufacturing company. Government activity shows an increase of $6K or 16% compared to 2005's activity due to increase of non- classifiable establishments and executive and legislative public administration. Construction and contracting activity, which accounts for 17% of sales tax collections, is up $624K or 42% from 2005's activity. Sales tax received year-to-date on major City projects total $668K or 32% of total construction and contracting activity. FH5RAC February 27, 2007 Agenda Item L Page 4 of 10 Sales Tax bv Activity The City's largest retail center, South 348th, which generates 13% of the City's sales tax, is showing an increase of$74K or 5% compared to the year 2005. The Commons is showing an increase of $37K or 4% compared to year 2005 activity. Major Auto Sale's collection total $447K and is $34K or 8% above 2005. S 312th to S316th tax collections are up by $29K or 5% comparing to prior year. Pavilion Center tax collections are up by $30K or 7% comparing to prior year. Federal Way Crossings is the newest addition in 2006. Therefore, history information is not available. Year to date collection totals $79K. .. " SALES TAX COMPAF'/ISON by AREA "(eat-to-date thru December ~005 2006 Chg fr~m 2005 Gr~up Actual Actual $ "% Total Sales Tax $11,305,537 $12.409,719 $1,104.182 9.8% S 348th Block $1,487,943 $1.562,287 $74.344 5.0% % chg from prey yr 9.3% 5.0% na na Percenlage of total 13, ZOA, 12.6% ..0.6% -4.3% The Commons 973,647 1,010.658 37.011 3.8% % chg from prey yr 38,2% 3.8% na na Percentage Of total 8,6% 8.1% ..0,5% -5.4% MaJ~r Aut~ Sales 413,337 447.359 34,022 8.2% % chg from prey yr 9.4% 8.2% na na Percentage of total 3.7% 3.6% ..0.1% -1.4% S 312th to S 316th 567.465 596.679 29,214 5.1-;0 % chg from prey yr 7.3% 5.1% na na Percentage of total 5.0% 4.8% ..0,2% -4,2% Pavilion Center 459,663 489,508 29,845 6.5% % chg from prey yr 7.5% 6.5% na na Percentage of total 4.1% 3.9% ..0.1% -3,0% FW Crossings - 78.841 78,841 100.0% % chg from prey yr na na na na Percentage of total na 0.6% na na Gambling Tax Gambling tax collection through December is $1.36M. In comparison, to 2005 year-to-date collection, 2006's tax collection is lower by $138K or 9.2%. January and February's favorable variance is the result of a change in accounting of accruals and therefore includes approximately $50K of 2005 gambling taxes. March through November except for September gambling tax is declining mainly due to two major' establishments' decreased activity. Smoking ban appears to be a factor for the decrease. Our biggest contributor experienced approximately 10% or $125K decrease when comparing to 2005 year-to-date, while the other smaller establishments faced a decrease anywhere from 2% to 53% in activities. The annex area has contributed year-to-date revenue of $19,040. Month Jan Feb Mar Apr May Jun Jul Au Se Oct Nov Dee Total GAMBLING TAX REVENUE Year- To-Date ThroLl h .Dec.enlber 2005 Actual $137.311 115.768 130,206 136.467 132.353 122,257 130,114 133.906 115.878 150.900 119.925 75.979 $1,501,065 Chan e from 2005 2006 Actual $ 145.990 123.992 103.346 121.394 94.551 101 .385 104.308 124.513 123.753 114,264 106.065 99 906 1,363,468 $ Var $ 8.680 8.223 (26.860) 15.073) (37.802) 20.872 25.806 9.393) 7,875 36.636 13,860) 23.927 137.597 Ok Var 6.30/0 7.10/0 -20.60/0 -11.00/0 -28.60/0 -17.10/0 -19.80/0 -7.0% 6.8% -24.3% -11.60/0 31.50/0 -9.20/0 Table reflects gambling activities on a cash basis. Utility Tax Utility taxes received through December total $9.04M and is above 2005 year to date collections by $751K or 9%. t UTILITY ,TAXES Year-to-date thru December .1 2005 2006 .. Chg from 2QQ~ Month Actual Actual $Var % Var Jan $ 726,583 $ 876.526 $ 149,943 20.6% Feb 794,152 838.752 44,600 5.6% Mar 731.064 801.915 70,851 9.7% Apr 770.397 923.992 153,596 19.9% May 745.699 768.173 22,475 3.0% Jun 592,788 644,689 51.900 8.8% Jul 609.227 655,651 46,424 7.6% Aug 585,489 627,881 42,392 7.2%' Sep 590.070 633,958 43.888 7.4% Oct 636.521 723,406 86.885 13.6% Nov 635.678 696.658 60.980 9.6% Dee 882.017 857.202 (24.815) -2.8% ax Rebate (7.165) (5.354) 1.811 -25.3% Total $ 8,292.520 $ 9,043.449 $ 750,930 9.1% Tax rebates are induded in total Compared to year-to-date 2005, Electricity is up $311K or 12%, Gas is up $182K or 13%, Cable is up $95K or 11%, Phone is down $47K or 5%, and Cellular phone is up $178K or 11 %. Electric Gas Solid Waste able Phone Cellular Pager SWM ax Rebate Total UTILITY TAXES Year-ta-date thru December 2005 . Actual $ 2,670,723 $ 1,358.412 536.267 873.141 986,617 1,681,722 1,776 191,027 (7,165) $ 8.292,520 $ Tax rebates are included in total FHSRAC February 27, 2007 Agenda Item L Page 5 of 10 2006 Change from 2005 Actual $Var % Var 2.981,815 $ 311,092 11.6% 1.540.060 181,647 13.4% 562.729 26,462 4.9% 967,953 94.812 10.9% 939.390 (47.227) -4.8% 1,859,591 177.868 10.6% 299 (1,476) -83.1% 196.967 5,940 3.1% (5,354) 1,811 -25.3% 9,043.449 $ 750,930 9.1% HoteVMotel Lodging Tax HoteVMotel lodging tax collections through December total $I75K. Compared to 2005, the lodging tax is $17K or II % above the same period. HOTEUMOTEL LODGING TAX REVENUES Year-to-date thru December 2005 2006 Change from 2005 Month Actual Actual SVar %Var Jan $ 9,669 $ 11.357 $ 1.687 17.5% Feb 11,717 11,290 (427) -3,6% Mar 9.153 11.953 2,800 30.6% Apr 11,390 11,675 284 2.5% May 14,067 15,039 972 6.9% Jun 11 ,566 11,798 232 2.0% Jul 12,247 14,245 1,998 16.3% Aug 14,632 16,626 1,994 13.6% Sep 17 ,633 18,082 449 2.5% Oct 18.047 20,389 2.342 13.0% Nov 13.765 15.636 1,871 13.6% Dee 14.231 17.130 2,899 20.4% Total $ 158,117 $ 175,219 $ 17,102 10.8% State Shared Revenue Year-to-date distribution of $5.I2M is above 2005's activity by $395K or 8%. Liquor profits tax is down while local criminal justice sales tax, criminal justice high crime and fuel tax are up. Year to date through December, new gas tax effective in August 2005 has contributed $252K of the increase. STA TE SHARED REVENUES Year to date thru December 2005 2006 Change from 2005 Revenue Actual Actual $ % Liquor Profits Ta~ $ 607,100 $ 556,678 $ (50.422) -8,3% Liquor Excise Tax 353,967 375,530 21.563 6.1% Crim Just Low-Pop/DCD 79,907 81.439 1,532 1.9% Criminal Just High Crime . 135,399 135.399 100,0% Local Crim Just Sales Tax 1,817.981 1,953,822 135.842 7.5% Fuel Tax. 1.849,274 2,000,242 150,968 8.2% DUI - Cities 14,469 14,211 (258) -1.8% Total $ 4,722,698 $ 5,117,322 $ 394,624 8.4"10 . Fuel lax is included in both generaVslreet, designated operating funds, and transportation CIP. variances of October and November in 2006. Significant pennits during December 2006 include Lakota Crest, Northlake Ridge, and Grande Vista. BUILDING PERMITS & FEES Year-to-Date Through December 2005 2006 Change. from 2005 Actual Actual $ % Jan 164,108 111.925 (52,184) -31.8% Feb 160,765 239.689 78,924 49.1% Mar 206,886 217,839 10,953 5.3% Apr 421,260 306,214 (115,046) -27.3% May 452,483 228.733 (223,749) -49.4% Jun 330,658 245,637 (85.021 ) -25.7% Jul 215,967 274,730 58,762 27.2% Aug 314,271 404.296 90,025 28.6% Sep 255,906 171,649 (84,257) -32.9% Oct 285.630 238.296 (47,335) -16.6% Nav 175,341 153.824 (21,517) -12.3% Dee 158,092 213,512 55,421 35.1% Total 3,141,368 2.806,343 (335,025) -10.7% Exp thRl Dec" 2,351,184 2,489,836 Recovery Ratio 133.61% 112.71% -Exp induded CD Admin (001.5200-071). Planning (001.5200-073). and Building (001.5200-074) Community Development's positive expenditure variance of $284K is mainly due to under spending one-time programs, and also savings in salaries and benefits from vacancies. Right-of-way pennits and development services fees are up by $200K or 58% when compared to 2005's year-to- date activity, due to a very active construction sector. ROW PERMITS & DEVELOPMENT SERVICES FEES Year-to-Date Through December 2005 2006 Change from 2005 Actual Actual $ % Jan 20,643 36,913 16,271 78.8% Feb 27,622 45.720 18,099 65.5% Mar 23.748 34,545 10,797 45.5% Apr 23,253 25,072 1,818 7.8% May 36.684 33,195 (3,490) -9.5% Jun 28.971 44.256 15.285 52.8% Jul 30,332 39,068 8,736 28.8% Aug 29,350 101,615 72,265 246,2% Sep 39,638 29,635 (10,003) -25.2% Oct 19,992 42.602 22,610 113.1 % Nov 27.648 90,364 62,716 226.8% Dee 38,724 23,603 (15,121) -39.0% Total 346,605 546,587 199.982 57.7% Permit Activity Year-to-date building pennit activity is below 2005's year- to-date activity by $335K or II %. Compared to 2006 budget, building pennits are exceeded the budget estimate by $1.l5M or 70%. The primary reason for the negative variance when compares to 2005 is due to 2005 being a record year with respect to large pennits from April through June of 2005, such as: Christian Faith Center, Wal-Mart, DanviUe Station, Collela Estates, Celebration Center, and Woodstone Credit Union. The unfavorable change in September is due to decreasing building activities during the month when comparing to prior period. Significant pennits for the Weyerhaeuser .Building in October and November 2005, explain the negative FHSRAC February 27,2007 Agenda Item L Page 6 of 10 Public Work's positive expenditure variance of $440K is due to under spending of one-time funded programs, the Greater Federal Way Joint Emergency Management Funds, salary and benefits savings from position vacancies, electricity saving, and under spending of repair and maintenance. Public Safety Expenditures through December total $17.06M, and is $591 K or 3% below the annual budget of $17 .65M. The favorable variance is comprised of salaryibenefit savings offset by increases in overtime, savings in investigative expenses, and savirigs in I-time funded programs. Revenues through December total $1.08M and is $47K or 4% below annual estimate. The unfavorable variance is due to decrease in revenues of traffic school offset by bulletproof vest settlement of $84K. Through December, City overtime is 8% or $43K above last year. There is a 15% decrease in overtime for contracted services and traffic school. When the decrease from the billable overtime is included, the total overtime increase is reduced to $29K or 5%. Type 2005 2006 $ % Training $ 17,662 $ 28.659 $ 10,997 62% Court 32,295 31,655 (641) -2% Field Oper 390,133 409.894 19,761 5% SOAP 190 (190) -100% Other 67,699 80,679 12,980 19% City Portion 507,979 550,887 42.908 8% Contract/Grant 43,413 43,371 (42) 0% Traffic School 50,571 37,488 (13,084) -26% Homeland See 835 (835) -100% Billable 94,819 80,859 (13.960) -15% Grand Total $ 602,799 $ 631,746 $ 28,947 5% PS Overtime By Month Change . 2005 2006 $ % Jan $ 50,235 $ 51.717 $ 1 ,482 3% Feb 54,688 46,446 (8,242) -15% Mar 48,571 51,638 3,067 6% Apr 53,135 56,413 3,278 6% May 38,533 45,026 6,493 17% Jun 55,867 61,129 5.262 9% Jul 44.155 53,903 9,748 22% Aug 45,364 49,527 4,162 9% Sep 61,691 58,165 (3,526) -6% Oct 41,252 58,234 16,981 41% Nov 67,305 49,402 (17,903) -27% Dec 42,002 50,146 8,144 19% Total $ 602,799 $ 631.746 $ 28,947 5% Jail Services Jail Services through December is $1.35M, which is $30K or 2% below the annual budget of $1.38M. The favorable variance is mainly due to decreasing in activities during 2006. Court Revenue Excluding probation through December revenue IS up $117K or 15% compared to year-to-date 2005. COURT REVENUE Through December 2005 2006 Change from 2005 Month Actual Actual $ Var % Var January $ 63.593 $ 63.844 $ 251 0.40/0 February 58.991 77.646 18.655 31.6% March 69.612 68.498 (1.114) -1.60/0 April 59.530 75.494 15.965 26.8% May 68.025 78.082 10.057 14.80/0 June 56.970 81.345 24.375 42.8% July 54.969 68.616 13.647 24.8% August 57,513 78.613 21.100 36.7% September 58.003 75.256 17,254 29.7% October 79.579 79.872 294 0.40/0 November 70.888 73.816 2.927 4.1% December 71.135 64.632 (6.503) -9.10/0 Subtotal $ 768.807 $ 885.714 $ 116.907 15.2% Probation Svcs 108.340 85.975 (22.365) -20.6% Total $ 877.147 $ 971.689 $ 94.543 10.8% Traffic and non-parking fines total $533K and is $68K or 15% above year-to-date 2005. Parking infractions total $66K and is $32K or 94% above year-to-date 2005. DUl and other misdemeanors total $93K and is $lOK or 10% below year-to-date 2005. Criminal costs total $24K and is $2K or 7% above year-to-date 2005. Criminal Conviction Fees total $24K and is below year-to-date 2005 by $1K. Services and Charges total is $54K and is above year-to-date 2005 by $20K. This category includes Legal Services-Public Defender Application Fee which the City didn't start receiving until June of 2005. Shared Court Costs total is $9K and is above year-to-date 2005 by $4K because this category includes Court Enhancement revenue which the City didn't start receiving until October of2005. . COURT REVENUE By Category Through December 2005 2006 Chal1gefrom 2005 ~tual Actual $ Var %Var Civil Penalties $ 13,493 $ 14.886 $ 1.394 10.3% Traffic & Non-Parking 465,103 533,370 68,268 14.7% Parking Infractions 34.021 66.061 32,041 94.2% OUI & Other Misd 103.397 93.095 (10,302) -10.0% Criminal Traffic Misd 48.838 42,541 (6,298) -12.9% Criminal Costs. 22,906 24,488 1,582 6.9% Interest I Other I Misc 17,153 24.213 7.060 41.2% Criminal Conv Fees 25.302 24.247 (1,055t -4.2"10 Shared Court Costs 4.330 8,659 4.328 99.9% Services & Charges 34,265 54,154 19,889 58.0% Subtotal $ 768,807 $ 885,714 $ 116,907 15.2% Probation Services 108.340 85,975 (22.365) -20.6% Total $ 877.147 $ 971,689 $ 94,543 10.8% . Criminal costs include screener fees. Municipal Court year-to-date expenditures of $1.06M is $IOIK or 9% below estimates. The expenditure savings is comprised of salarylbenefits due to position vacancies earlier this year, and also timing differences of goods and services payments. Parks & Recreation Overall parks operations expenditures through December total $3.93M, which is $123K or 3% below the year-to- date budget of $4.06M. Majority of the savings are made up of $50K-Camp Kilworth, $45K-Arts Commission of which will be carried forward, and under spending of one- FHSRAC February 27, 200.7 Agenda Item L Page 7 of 10. time funded programs. Dumas Bay Centre revenues and expenditures are both below budget. Knutzen Family Theatre's revenues and expenditures are exceeding budget estimates. Recreation and Cultural Services Direct program expenditures total $1.29M or 97.4% of the total annual budget of $1.32M not including indirect costs. Including indirect administration costs, recreation expenditures total $1.66M and are 96.3% of the total annual budget of $1. 12M. Recreation fees total $823K and are 99.3% of the total annual budget of$829K. Recreation fees have recovered 64% of direct program costs and is 1.2% above the annual budgeted recovery ratio of 62.8%. Considering indirect administration costs, the recovery ratio is reduced to 49.6% or 1.4% above the annual budgeted recovery ratio of 48.2%. Dumas Bay Centre Dumas Bay Centre operating revenue of$497K is down by $36K or 7% compared to annual budget of $533K. Operating expenditures through December total $526K, which is $8K or 2% below the annual budget of $535K. Dumas Bay Centre has recovered 94.4% of its operating expenses. Knutzen Family Theatre Operating revenue of $122K is up $35K or 41 % compared to the annual budget of $87K. Operating expenditures through December total $216K, which is $15K or 7% over the annual budget of $202K. Knutzen Theatre has recovered 56.4% of its operating expenses. The table below is a comparison of budgeted versus, actual subsidy and recovery ratio by program. RECREATION & CULTURAL SERVICE PROGRAMS AND DUMAS BAY CENTRE PERFORMANCE Year 10 Date Through Dficember 2006 13udg(lt Actual Recovery Recovery Variance Program Revenues Expendilures SlJbsidy Ratio Revenues Expenditures Subsidy Ratio Subsidy RECREATION & CULTURAL SERVICE PROGRAMS Steel Lake Aquatics 2,000 20,398 18,398 9.8% 2,045 20,150 18.105 10.1% 293 Arts & Special Events 93,600 225,451 131,851 41,5% 110,147 184,622 74,475 59.7% 57.376 Youth Athletics 60,558 90,131 29,573 67.2% 45,569 72,645 27,077 62.7% 2,496 Adult Athletics 204,970 129,766 (75.204) 158.0% 208,118 139,966 (68,152) 148.7% (7,052 Community Recreation 170,300 178,019 7,719 95.7% 124,394 133,197 8,804 93.4% (1,085 Cpmmunity Center 28,500 76,059 47,559 37.5% 38,201 108,210 70,009 35.3% (22.449 Recreation Inc 18.512 60,776 42.264 30,5% 46,118 74,781 28,663 61,7% 13,601 Youth Commission 500 1,800 1,300 27.8% 1.252 1,391 139 90,0% 1,161 Red. White & Blue" 25,700 41,200 15,500 62.4% 27,104 48,797 21,693 55.5% (6,193 Senior Services 16,195 70,105 53.910 23.1% 33,643 71,361 37,718 47.1% 16,192 Kenneth Jones Pool 208,000 425,795 217.795 48.8% 186.107 430.243 244,135 43,3% (26,340 Subtotal $ 828,835 $ 1.319,500 $ 490,665 62.8% $ 822,699 $ 1.285,363 $ 462,665 64.0% $ 28.000 Administration - 400,524 400,524 nJa - 371,805 371,805 n/a 28,719 TOTAL RECREATION $ 828,835 $ 1,720,024 $ 891.189 48.2% $ 822,699 $ 1.657,168 $834,469 49.6% $56,720 DUMAS BAY CENTRE Dumas Bay Centre 533,398 I 534,628 I 1,230 99.8% 496,904 526,359 29,455 I 94.4% (28,225 Knutzen Family Theatre 86,720 I 201,720 I 115,000 I 43,0% 122,117\ 216,400 94.283 I 56.4% 20,717 ! TOTAL DUMAS BAY CENTRE ! $ Arts Commission. GRAND TOTAL $ .. Excludes interfund transfers and Celebration Park. Other Departmental Variances City Council year-to-date expenditures total $403K is $6K below estimate due to overestimating budget for salaries and benefits in anticipation of the Independent Salary Commission decision offset by increases in various line items. City Manager year-to-date expenditures of $913K is over estimates by $5K due to an increase in public defender costs of $77K offset by salary savings from the city manager position earlier this year. Economic Development year-to-date expenditures of $232K is $60K below estimates due to under spending of one-time funded programs. Management Services year-to-date expenditures of $1. 79M is $1 08K below budget due to under spending of one-time funded programs and also savings in salaries and benefits. Law year-to-date expenditures total $l.05K and is $151K below estimates due to salary savings from vacancy throughout the year, under spending of outside legal services, and under spending of one-time programs. To date, only $74K or 63% of the $118K one-time budget has been spent. FHSRAC February 27,2007 Agenda Item L Page 8 of 10 DEBT SERVICE Under RCW 39.36.020(2), The City Council may approve bond issues not to exceed 1.5% of the City's assessed valuation. In addition, the public may vote to approve bond issues for general government in an amount not to exceed 2.5% of the value of all taxable property within the City. The City's outstanding total general obligation debt is $26M at December 31, 2006, including the note assumption for the acquisition of the new city hall facility and Community Center bond issue. This leaves the City with a remaining debt capacity without voter approval of $91M and an additional $73M that can be accessed with voter approval. The voter approved capacity is generally referred to as unlimited tax general obligation debt, which requires 60% voter approval and the election must have a voter turnout of at least 40% of those who voted in the last State general election. With this vote, the voter approves additional property tax be levied above and beyond the constitutional and statutory caps on property tax. In addition to these general purpose debt capacity, RCW 39.36.030(4) also allows voters to approve park facilities and utility bond issues, each limited to 2.5% of the City's assessed valuation. Therefore, legally the City can issue up to a total of7.5% of the City's assessed valuation in bonds for $527M. The Public Works Trust Fund Loans are the obligation of the Surface Water Utility and backed by the rates collected from users and are not considered as the City's general obligation debts nor are they subject to the limitation of indebtedness calculation. The tables below show the available debt capacity for the City and schedule of outstanding debt as of December 31, 2006. 'c', " ; " COMPUTATION OFUMlTATION OFINDEBTEDl'IESS' ,,' ':. ,.' . "" . " . ~eniber 3i;2!106 '.."', General Pumases Excess Levy Excess Levy Total Councilmanic Excess Levy Open Space Utility Debt DESCRIPTION (Limited GO) (Unlimited GO) ~ ~ ~ AV= $ 7,251,992,701 (A) 1.50"10 $ 108,779.891 $ (108,779,891) 2.50"10 181,299,818 181,299,818 181.299,818 $ 543,899,453 Add: Cash on hand for debt redemption (B) 8,129.983 - - - 8,129,983 Less: COPs outstanding - - - - Bonds outstanding (25,489,128) - - (25,489,128) REMAINING DEBT CAPACITY $ 91,420,745 $ 72,519,927 $ 181,299,818 $ 181,299,818 $ 526,540,308 GENERAL CAPACITY (C) $163,940,672 (A) Final 2006 Assessed Valuation. (B) Fund balance of$6,217,347 in debt service prefunding balance and $1,912,636 in utility tax fund. (C) Combined total for Councilmanic, and Excess Levy capacities. OUTSTANDING GENERAL OBLlGA nON DEBT - As of December 31, 2006 Amount Outstanding Outstanding Funding Maturity Origina.Uy Debt as of Amount Debt as of Callable CaUable Description PUl1lose Source Date Interest Rate Issued 111/2006 Redeemed IV31/2oo6 Date Amount General Oblif!ation Bonds: 1997 Knutzen Theatre, Utax I.Dec.12 5.00 - 5.30 16.150,000 5,345,000 (1.685,000) 3,660.000 I.Jun.06 3,660,000 Limited Sports fields, Downtown PS Facil;'" 2000 Valley Comm (911 REET I.Dec-15 5.31 2,551,600 1,908,000 (153,000) 1,755,000 I.Dec-IO 1,069.000 Limited Dispatch)-Center Bldg & Equipment 2003 Paragon Building REET I.Nov.07 7.58 6,168,599 . 5,965,804 (96.676) 5,869,128 I-Apr-07 5,800,000 Limited GMAC Loan Assumntion 2003 Conununity Center Utax I.Dec.33 4.67 15,000.000 14,490,000 (285,000) 14,205,000 I.Dec.13 11,955,000 Limited Total General Obli.ation Debt $ 39,870,199 $ 27,708804 $ (2219,676) $ 25,489 128 $ 22,484 000 Public Works Trust Fund Loan: PWTL SWM Clp.Kilts SWM i.Jul.14 1.00 \,555,440 776,155 (86.239) 689,916 - Comer Project PWTL SWM CIP.SeaTac SWM I-Jul.19 1.00 2,475,000 1,345,676 (96,120) 1,249,556 - Mall Detention Proi. Subtotal PWTFL 4,030,440 2,121,83\ \82,359) 1,939,471 Grand Total $ 43,900,639 $ 29,830,634 $ (2,402.035) $ 27,428,599 $ 22,484,000 FHSRAC February 27, 2007 Agenda Item L Page 9 of 10 CASH & INVESTMENTS The following table shows the in-house investment activity schedule and their related yields and comparison to benchmark. Per policy, the basis used by the City to determine whether market yields are being achieved is the range between the average 6- month US Treasury Bill (5.07%) and the State Investment Pool (5.21%). The average portfolio yield is 5.16% and falls within two benchmarks. Investment Schedule December 2006 Settlement Interest Investmen( Maturity Yield to TVDe Date Payments Par Amount Cost Date Maturitv Agencv - FFCB 31331QN78 06/09/03 03/09 - 09/09 $ 1,000,000 $ 999,500 3/9/2007 2.46% AQencv - FNMA 3136F3VQ6 OS/27/03 OS/25/06 $ 1,000,000 $ 1.000.750 5/25/2007 2.48% AQency- FNMA 3136F3UT1 05/30/03 06/03106 $ 1,000,000 $ 997,529 12/3/2007 2.59% Aaency- FHLMC 3128X1VW4 08/22/03 01130/06 - 7/31/06 $ 900,000 $ 887,400 1/30/2007 3.18% Agency- FHLB 3133XBT54 OS/25/05 11/25/05 - 5/25/06 $ 1,000,000 $ 1,000,000 5/25/2007 4.07% AQencv - FHLB 3133XBT54 OS/25/05 11/25/05 - 5/25/06 $ 1,000,000 $ 1,000,000 5/25/2007 4.07% Agencv- FHLMC 3128X4RFO 10/24/05 04/05/06 - 10106/06 $ 1,000,000 $ 999,990 .10/24/2007 4.63% Aaency- FHLMC 3128X4RFO 10/24/05 04/05/06 - 10/06/06 $ 1,000-,000 $ 1,000,000 10/24/2007 4.63% . Agency- FHLMC 3128X46M8 08/23/06 Bullet no int until end $ 1,000,000 $ 1,001,419 8/15/2007 5.28% Aaency- FHLMC 3128X46M8 08/23/06 Bullet no int until end $ 1,000,000 $ 1,001,419 8/16/2007 5.28% Aaency - FHLB 3133XGNG4 08/22/06 2122 & 8/21 $ 1,000,000 $ 1,000,150 2121/2008 5.40% Agency - FHLB 3133XGNG4 08/22/06 2122 & 8/22 $ 1,000,000 $ 1,000,150 2/22/2008 5.40% Subtotal In-House Investments $ 11,900,000 $ 11,888,307 Averaae Maturitv 230 Averaae Yield to Maturity 4.48% Averaae Yield - 6 mo. T-Bill 5.07% Municioallnvestor Account $ 22,802,319 1 day 5.38% State Investment Pool $ 34,272,920 1 day 5.21% Averaae Portfolio Maturity & Yield 40 5.16% T()tallnvestments $ 68,963,546 The total invested balance at the end of December is $68.96M, which includes $34.27M in the state investment pool, $11.89M in-house investment purchases, and $22.80M in the Municipal Investor Accounts: The state pool is composed of repurchase agreements (72.92%), agency coupons and callables (12.10%), IB bank deposit (6.02%), treasury securities (2.49%), agency floating rate notes (2.21 %), discount notes (1.58%) and certificates of deposit (2.68%). The City's total investment portfolio is made up of 50% State Pool, l-r'1o In-House Investments, and 33% Municipal Investors Accounts. Total Portfolio by Category December 31,2006 Interest ~ates Comparison For the Month of December 2006 Municipal nvenstors Account 33% 6.0% 3.0% , , - , ]I [)] 6 M:>nth T-BiII 5.0% n-H:>use nvestJrents 17% 4.0% Ii'! State nves trrent Fbol on-house nvestrrent 2.0% 1.0% o Mmicipallnvestor Account 0.0% . ~rtfolio Average 2003 2004 2005 2006 FHSRAC February 27, 2007 Agenda Item L Page 10 of 10 COUNCIL MEETING DATE: March 6, 2007 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: VOUCHERS POLICY QUESTION: Should the City approve the vouchers in the total amount of $3,113,616.29 COMMITTEE: Finance, Human Services & Regional Affairs Committee CATEGORY:. [gJ Consent D Ordinance o City Council Business D Resolution ~TAFF REpORT By: Tho ~aus, Finance Manager1L MEETING DATE: February 27,2007 D Public Hearing D Other DEPT: Management Services I, the undersigned, do hereby certify under penalty of peIjury that the materials have been furnished, the services rendered, or the labor performed as described herein and that the claims are just and due obligations against the City of Federal Way, Washington nd that I am authorized to authenticate and certify said liens. Manage Attachments: Voucher List Options Considered: NA STAFF RECOMMENDATION: NA t.J Corruniltee Council CITY MANAGER ApPROVAL: DIRECTOR ApPROVAL: Council COMMITTEE RECOMMENDATION: , HI move approval of the vouchers ,andforward to the March 6, 2007 Council Meetingfor approval. " Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the vouchers pursuant to RCW 42.24. " (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED o DENIED o T ABLEDIDEFERREDINO ACTION o MOVED TO SECOND READING (ordinances only) REVISED - 02/0612006 COUNCIL BILL # I ST reading Enactment reading ORDINANCE # RESOLUTION # ... Q) ~ C >-tU to ... ~"; tQ ..: i~ ~ tU ~5 '0:9 tU ~O- .- III o E .~ <3 ~ 0 (<') (<') C'o\ (<') 1O t- al <.0 cP ..;t (<') <0 ..;t ~ ..n <!5 N cP (j) ~ ~ "0 .~ 0- .... 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