FEDRAC MINS 04-22-2003
City of Federal Way
City Council
Finance/Economic Development/Regional Affairs Committee
Tuesday, April 22, 2003
2:00 p.m.
City Hall
Mt. Baker Conference Room
MINUTES
Committee Members in Attendance: Chair Michael Park, Member Mary Gates, Member Eric Faison.
City Council Members in Attendance: Council Member Linda Kochmar
Staff Members in Attendance: Iwen Wang, Management Services Director; David Moseley, City Manager;
Derek Matheson, Assistant City Manager; Pat Richardson, City Attorney; Michael Olson, Deputy Director of
Management Services; Patrick Doherty, Deputy Director of Community Development; Tho Kraus, Financial
Management Supervisor; Jason Suzaka, Management Analyst.
Others in Attendance: H. David Kaplan; Tim Eisley, President of Hideaway Casino.
1. CALL TO ORDER
Chair Michael Park called the meeting to order at 2:00 p.m.
2. PUBLIC COMMENT
Tim Eisley (President of the Hideaway Casino in Federal Way) spoke to the committee asking for their
support of House Bill 1948, which would allow the non-tribal entertainment industry to have the same
electronic scratch ticket games as the Indian tribes do. He passed out an impact study on the City of
Marysville and a TIME Magazine article from 12/16/02.
City Manager Moseley gave a short history of the issue. It was brought before Council during an earlier
FEDRAC meeting and the full Council had stated their opposition to the bill in their 2003 legislative
agenda. Chair Park also reiterated the Council’s position on the bill as well to Mr. Eisley.
3. COMMITTEE BUSINESS
a) Approval of the March 25, 2003 meeting minutes
Motion to approve the March 25, 2003 meeting minutes. Motion seconded and carried.
b) Legislative and Regional Affairs Update
Presented by Der ek Math eson
Things are very busy in the legislature with the session ending this Sunday. The operating
budget passed both houses in different forms. The difference between the two houses is largely
over t a xes.
C:\staging\41743162-4A48-081629\in\41743162-4A48-081629.doc A-1
There are two primary disputes over the issue of transportation: the level of gas tax and where the
money will be used. An agreement on the level of gas seems to be more likely, but an agreement
on where the revenues will be used seems less likely. The Senate wants to spend the money on
more roads, but the House has more interest in transit.
Regar ding the capital budget, the Senate version contains $250,000 for the Hylebos Boardwalk.
The House ver sion contains $106,000 for Historic Cabins Park. Any money for these projects
will be contingent on the Senate and the House agreeing on bonding. The Senate wants to
a ggr essi ve bon d a ga i n st r even ue st r ea m s t o fun d ca pi t a l pr oject s. T h e House i s a bout seven vot es
shy of doing the same type of thing. So if no agreement can be reached, not only would the City
lose funding for those projects, the Washington Wildlife and Recreation program would take a
hit as well.
Mr. Matheson th en r epor ted on a r ecen t fix to Initiative 790. Many jurisdictions were worried
that Section 6-5 created an unfunded liability in the pension system, and that both employees and
employers would have to increase payroll contributions to fund those liabilities. Federal Way’s
liability would have cost the City approximately $750,000 – 1 million. Fortunately all of the
stakeholders have gotten together and agreed to eliminate it, which required a supermajority vote.
The bill is now being sent to the Governor for his signature.
Another piece of legislatur e th at passed both h ouses cr eates a local voter -appr oved pr oper ty tax –
giving the authority to go beyond the 1% limit for more than one year in a row. So for example,
instead of the fire district going to voters every year asking to over the 1% property tax limit, the
bill would allow them to ask for a multiple number of years on the ballot. The bill would also
allow citizens of the County to impose a 0.3-cent sales tax increase. 60% of the revenues would
go to the County, and 40% to the cities, which would be allocated on a per capita basis. Of
interest is that the bill was amended in the House through the efforts of Rep. Mark Miloscia to
include some performance measurement and total quality management components. However,
the language is so broad that it could create unfunded mandates in the general fund, which would
create problems under Initiative 601 and other state laws.
Also of note is that the annexation bill needs to be given a simple concurrence in the other house
and signed by the Governor, who has given his support for it. So it should be ready soon.
c) Tourism Enhancement Grants
Presented by Patrick Doherty
Mr. Doherty reviewed the grants with the committee. Councilmember Gates noted that the
hotel/motel revenues are improving slightly. So it may be possible in a future budget adjustment
to adjust the grant levels for 2004.
Mr. Kaplan explained to the committee, the TEG subcommittee’s reasoning behind the grants;
they tried to be even-handed in funding events and not appear to favor one type of event over
another. He stated his approval of the final decisions. Councilmember Gates voiced her
approval as well regarding the diversity of the funding for the various events.
Correction on the Committee Action on page C2: Th e Un ited Soccer Club even t r eceived $1,000
(not $10,00) and the USSSA of WA received $2,500 (not $5,000) in grant money.
Motion to approve the Tourism Enhancement Grants as amended to the chart on page C3.
Motion seconded and carried.
C:\staging\41743162-4A48-081629\in\41743162-4A48-081629.doc A-2
d) Banking Services Proposals
Presented by Mich ael Olson
Mr. Olson reviewed the proposal with the committee. Mr. Moseley added that in addition to
reviewing the proposals, staff interviewed six of the seven applicants to allow them to clarify and
respond to any questions staff might have had for them.
Motion to allow the City to enter into a new four-year contract with US Bank. Motion
seconded and carried.
e) March 2003 Quarter ly Financial Report
Presented by Th o Kr aus
Ms. Kraus reviewed the report with the committee. Among the highlights:
Gen er a l r even ues a r e up 0.8% a bove t h e YT D budget.
1st Quarter REET revenues are 135.1% above YT D budget, mainly due to the sale of Seatac Mall.
Sales Tax revenues are 5.3% below budget, with retail the hardest hit.
Utility Tax revenues are down 15.3% below YTD budget, but not all of the utility companies
have adjusted the tax rate to 6% yet. Second notices have already been sent out the companies.
Correction: On page E18, the FHLB Investment has been called, so we no longer have a stake in
it. This changes the average yield to maturity to 3.40% and the average maturity to 868 days.
The 2000 Limited General Obligation Bonds are for the Valleycom Center.
After the 1993 Celebration Park bonds are retired, the next set if bonds that are callable are the
1997 Police Facility bonds. The committee asked staff that in the future financial reports, they
provide a chart that includes call dates for each set of outstanding debt. They also asked that
when the revenue from the additional 1% utility tax begins to come in that the overall utility tax
revenues are re-examined so that it is clear the additional 1% revenues are going towards the
community/senior/aquatics center.
Motion to approve the March 2003 Quarterly Financial Report. Motion seconded and carried.
f) Vouch er s
Presented by Th o Kr aus
Ms. Kraus presented the vouch er s for appr oval.
Motion to accept the vouchers and forward them to full Council for approval. Motion
seconded and carried.
4. OTHER
Mr. Moseley gave an update on the Suburban Cities Association (SCA) report. The Suburban Cities
Management Board, along with Seattle and Bellevue, has submitted a position paper to the King County
Budget Task Force on the County’s budget problems. The paper has received some h eigh ten ed atten tion
from the task force. SCA is also having a retreat this Friday and Saturday on King County-related issues
such as the Budget Task Force, the Governance Task Force, and solid waste.
5. FUTURE AGENDA ITEMS
C:\staging\41743162-4A48-081629\in\41743162-4A48-081629.doc A-3
C:\staging\41743162-4A48-081629\in\41743162-4A48-081629.doc A-4
Ms. Wang reported that the Public Works department is still working on the report on solid waste. There
is a meeting coming up in early May, and the report should be ready by the May FEDRAC meeting.
Councilmember Faison asked if staff could provide an update on the downtown investment ideas that were
discussed late last year.
6. NEXT SCHEDULED MEETING
May 27, 2003 at 2:00 pm. in the Mt. Baker Conference Room.
7. ADJOURN
Chair Michael Park adjourned the meeting at 3:10pm.
Recorded by Jason Suzaka