FEDRAC MINS 06-24-2003
City of Federal Way
City Council
Finance/Economic Development/Regional Affairs Committee
Tuesday, June 24, 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: Mayor Jeanne Burbidge and 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; Tho Kraus, Financial Management
Supervisor; Medhi Sadri, Information Services Manager; Jason Suzaka, Management Analyst.
Others in Attendance: Lon Hurd
1. CALL TO ORDER
Chair Michael Park called the meeting to order at 2:00 pm.
2. PUBLIC COMMENT
None.
3. COMMITTEE BUSINESS
a) Approval of the May 27, 2003 meeting minutes
Motion to approve the May 27, 2003 meeting minutes. Motion seconded and carried.
b) Legislative and Regional Affairs Update
Presented by Der ek Math eson
Mr. Matheson gave a r ecap of the past legislative session. The new state operating budget
in cludes: a five-cen t tax in cr ease on liquor , mor e aggr essive r even ue en for cemen t, an d th e House
agr eed to more spending cuts. The capital budget was then adopted; it includes $250,000 for the
Hylebos, $106,000 for the Histor ic Cabins Project, and $100,000 for the Boys and Girls Club.
The legislature also adopted a $3.2 billion tax incentive package (including B&O, sales and
property taxes) to try to bring the assembly work for the Boeing 7E7 next-generation jetliner to
Wash in gton State. Th ey also addr essed a n umber of issues impor tan t to Boein g, such as wor ker s
compensation and unemployment insurance.
There were a number of bills being monitored during the session. There was a deal on a tax
increment financing bill (known as EDGE, Economic Development for a Growing Economy), in
the works, but the legislature ran out of time and the bill will have to be finished next session.
There was also a Qwest bill which would have required Sound Transit to pay for utility relocation
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costs along its central link light rail line, setting a dangerous preceden t for cities. However, this
bill also ran out of time by the end of the legislative session.
On regional matters, the Solid Waste Policy Workgroup Meeting takes place on June 26th. King
Coun ty also has two commissions looking at organizational issues. The Budget Advisory Task
(BAT) Force has completed its work, but the Governance Commission is getting started.
Suburban Cities Association sent a letter to the commission chair with some recommendations.
One of them cautioned the commission not to do what the BAT force did in recommending
closing of some offices and looking at consolidating the number of executive council positions.
There was discussion regarding the nickel plan that was passed in the state transportation
package. Ms. Gates reported that there are some movements to change the spending plan in it,
most notably a movement to move an EIS (Environmental Impact Statement) on 167 into an
earlier biennium. She felt that we all need to know what that spending plan is in order to
potentially support other plans in South King County (unless they affect projects concerning
Feder a l Wa y). Mr . Ma t h eson sa i d t h a t h e woul d t a l k t o our l obbyi st t o l ook i n t o t h e m a t t er .
c) 2003 Comcast Cable Television Rate Review
Presented by Mehdi Sadri
Mr. Sadri presented th e r eview con ducted by Lon Hur d of 3-H Cable Commun ication s
Consultants. The City is allowed by FCC guidelines to review cable rate change proposals to
make sure that they are done in compliance with certain benchmarks and guidelines, but cannot
adjust the actual amount charged.
So far, while we h ave r eceived r ate in cr ease pr oposal for ms fr om Comcast, we h ave n ot actually
heard what those rates might be. It appears that they have no plans to change basic cable rates at
this time. The reason for the discrepancy in cable rates on both sides of 288th is that TCI
former ly pr ovided ser vice n or th of th e str eet, wh ile Viacom oper ated south of it.
d) T-Mobile Franchise
Presented by Pat Rich ar dson
Ms. Richardson reviewed the franchise proposal with the committee. Councilmember Gates gave
her compliments to the law department regarding the language used in the section “consistency
with laws.”
Motion to forward the proposed franchise agreement to full Council with a “do pass”
recommendation. Motion seconded and carried.
e) Utility Tax Audit Update
Presented by Iwen Wan g
The City used Puget Sound Energy as a pilot audit. Staff determined that PSE owed the City
over $51,000 in utility taxes from its gas and electrical operations. PSE not only paid the taxes,
but also donated three streetlights for installation in the Westway neighborhood.
The City then audited fifteen other commonly used local utility service providers. Historically,
AT&T Wireless, Nextel, and Qwest have been the least cooperative with the audits in providing
information, and this seems true again. It is possible that the City may have to use legal means
to get the companies to comply with the audit. Staff is still going through the preliminary results
with Waste Management. A couple of the companies are eligible for a rebate; however, none of
them have yet asked for one. For those companies that owe utility taxes, they can choose whether
or not to recover the tax from their customers – this is because the tax is on the business, not the
customer .
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This is the first time the City has performed this audit. However, staff audited the past four years
as well as th e cur r en t on e. As paymen t for its ser vices, Micr oflex r eceives 20% of th e r even ues it
fin ds in each accoun t.
There was a question of looking into some water accounts under Tacoma Public Utilities.
However, the City cannot tax other cities, unless it is through a franchise agreement. In addition,
there are very few accounts in Federal Way that are serviced by Tacoma Public Utilities.
f) Petty Cash Cap Incr ease
Presented by Iwen Wan g
Ms. Wang reviewed the amendment with the committee. When asked the cost of issuing a check,
Ms. Wang thought it could be anywhere between $3-5.
Motion to forward to full Council the proposed resolution amending individual petty cash
limits. Motion seconded and carried.
g) May 2003 Monthly Financial Report
Presented by Th o Kr aus
Ms. Kraus reviewed the Monthly Financial Report (MFR) with the Committee. Among the
highlights:
Gener al r evenues are 1.7% below YTD budget; Sales Tax revenues are 4.5% below YTD budget;
Rea l E st a t e E xci se T a x r even ues a r e 84.3% a bove YT D budget; and Utility Taxes are 13.4%
below YTD budget. Ms. Kraus added that the City expects to receive $347,000 from the State for
April and May’s distribution of local license fees within 30 days (was not reflected at the time of
the packet’s printing).
A question was raised by Councilmember Gates concerning the seemingly low concession fees
being raised at Celebration Park. Mr. Moseley explained that Billy McHale’s has been hired to
take over concessions at the park and it is hoped that this will increase the amount of revenues
coming in.
There was also concern from the Chair Park about the amount of overtime being paid out to
police officers. Mr. Moseley assured him that while it is still a problem, both the finance
depar tment and public safety are working very hard to analyze the problem and coming up with
ideas to solve it. The $700,000 in this year’s budget for overtime is actually $300,000 below the
previous year’s. While January and February are trending along the lines of last year, March
through May has seen a dramatic decrease compared to last year. He is hopeful that they can get
the amount down to around $600,000. The police department is nearly fully-staffed, and some of
the overtime being paid can be attributed to the department having to provide coverage for
instances where officers are on medical/family leave, making court appearances, or because new
recruits are training at the academy. He asked Council to consider that while their still is an
overtime problem, much progress is being made, and the police department is implementing
policies to limit overtime expenditures.
Councilmember Gates also expressed her feelings on the importance of limiting overtime
expenditures.
Motion to accept the May 2003 Monthly Financial Report and forward to full Council for
approval. Motion seconded and carried.
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h) Vouchers
Presented by Tho Kraus
Ms. Kraus presented the vouchers for approval.
Motion to accept the vouchers and forward them to full Council for approval. Motion
seconded and carried.
i) Support for the Assembly of Boeing's 7E7 Jetliner in Washington State
Presented by Derek Matheson
Councilmember Gates proposed preparing the resolution for the July 1 meeting instead of the
July 15 meeting.
Motion to direct staff to preparing a resolution for the July 1, 2003 Council meeting and add
the item to the agenda under “council business.” Motion seconded and carried.
4. OTHER
None.
5. FUTURE AGENDA ITEMS
a) Replacement Reserve Policy
b) 2003 Capital Financing Plan
c) City Center Redevelopment
d) PC Hardware Recycling Options
6. NEXT SCHEDULED MEETING
July 22, 2003 at 2:00 pm. in the Mt. Baker Conference Room.
7. ADJOURN
Chair Michael Park adjourned the meeting at 2:52pm.
Recorded by Jason Suzaka