FEDRAC MINS 07-22-2003
City of Federal Way
City Council
Finance/Economic Development/Regional Affairs Committee
Tuesday, July 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: Mayor Jean n e Bur bidge
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; Rob Van Orsow, Solid Waste/Recycling Coordinator; Tho Kraus, Financial Management
Supervisor; Brian Wilson, Deputy Director of Public Safety; Anne Kirkpatrick, Director of Public Safety; Dong
Chou and Drew Amdahl, Financial Analysts; Jennifer Schroder, Parks Recreation and Cultural Services Director;
Jason Suzaka, Management Analyst.
Others in Attendance: H. David Kaplan.
1. CALL TO ORDER
Chair Michael Park called the meeting to order at 2:03 p.m.
2. PUBLIC COMMENT
Mr. Kaplan mentioned that he can only find the city postcards at city hall and not in other places around
the community. Staff responded that the Federal Way Chamber of Commerce is in charge of
selling/distributing the postcards. The postcards can also be found at Celebration Park as well.
3. COMMITTEE BUSINESS
a) Approval of the June 24, 2003 meeting minutes
Motion to approve the June 24, 2003 meeting minutes. Motion seconded and carried.
b) Legislative and Regional Affairs Update
Presented by Der ek Math eson
Mr. Matheson reported that apparently Tim Eyman has withdrawn any further attempts to move
ahead with Initiative 807. That initiative would have required a 2/3 vote of approval by the
legislature to increase any taxes.
A sales tax streamlining effort is going on; one issue that needs to be resolved is “which
jurisdiction collects the tax on remote sales?” An example is buying a product over the internet
where the warehouse is in Tukwila, but the consumer lives in Yakima. So far, it appears that any
of the changes being made will have a minimal impact on Federal Way. A final report to the
Governor and Legislatur e is due on December 1.
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Councilmember Gates asked about sales tax revenues from the car shows at SeaTac Mall.
Apparently, th e City does n ot r eceive an y sales tax r even ues, because th e lot is used as a “sh ow
room,” while the actually sale and signing of documents takes place in Auburn. So the only
reven ue th e City r eceives is $25 from issuing a temporary business license. One option raised by
the Committee was the City charging a percentage of revenues as a fee for the license. However,
Ms. Wang warned that doing so would be close to enacting a B&O tax; you would then have to
consider how it will be applied (temporary licenses only, or regular licenses as well).
Regional Transportation Investment District (RTID): Earlier in the month, the RTID Executive
Board met to discuss a number of issues; one of which was a report that said that King County
revenue projections are predicted to be down $700 million over the 15-year bonding period.
However, Pierce and Snohomish are predicted to be $300 million higher over this same period.
The Board also discussed whether or not to change their revenue mix; ultimately it was decided
that it would not. They also discussed whether or not to factor in the local option gas tax (they
are allowed to levy 2.3%); while there is some interest in doing so, the oil and gas industry has
vowed to fight it.
The Board also looked at staffing and using an RFP to contract with a group that will serve in an
executive an d legal capacity.
The final issue discussed was the King County Budget Advisory Task Force; the KCBAT is
apparently going to attend the next City Manager’s meeting to express their views on the next
step in the process, after which the recommendations will then be discussed at the Management
Board level.
c) Region al Solid Waste Issues Update
Pr esen t ed by Rob Va n Or sow
Mr. Van Orsow presented the Memorandum of Intent to Collaborate on Solid Waste Issues to the
Committee.
Motion to recommend the adoption of the attached memorandum and forward to full Council
for approval. Motion seconded and carried.
d) Replacemen t Reser ve Policy
Presented by Iwen Wan g
Ms. Wang reviewed the current replacement reserve policy with the Committee. She noted that
the money in the Buildings and Furnishings reserve fund can be used for other purposes such as
the renovation of the building itself; however, it will still need to be replenished. The reason this
is allowed is because the replacement of furniture can be deferred – meaning that deferring
furniture replacement will not create a safety issue, unlike if the HVAC system goes out.
Funding for the furniture replacement reserve has essentially stopped for this building and will
begin building for the new municipal facility. Staff expects some of the furniture in the new
building to be replaced using those funds.
There was a question regarding the timing of the purchase of new video broadcasting equipment
with the renewal of cable franchises. However, the renewal is not up until 2004. There is
however, $125,000 available in a gap fund that can be used to purchase new video broadcasting
equipment.
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Councilmember Faison expressed his opinion that he would rather see a separate fund for items
such as a new HVAC system instead of taking money out of a furniture replacement fund and
potentially deferring new furniture purchasing for staff.
As stated in the memorandum, the City currently sets aside nearly $1.2 million annually in
replacement reserves. So any additional amount placed in the reserve will have some kind of
impact on the general fund. Councilmember Gates suggested that the City might want to look
into the residual value of the furniture currently in City Hall. What could we sell them for? Ms.
Wang stated that the City currently uses the practice for its fleet, but not for its furniture.
The committee asked staff if they could come up with estimates on how much it would cost to
fund replacements for major items (e.g. HVAC system) in the new municipal facility and the
community center. Ms. Wang stated that staff does have some estimates available for the
municipal facility which could be provided to the committee.
Councilmember Gates gave her compliments to staff for reviewing the replacement fund policies.
No action was taken by the committee regarding this item.
e) 2nd Quarter Financial Report
Presented by Th o Kr aus
Ms. Kraus reviewed the Quarterly Financial Report (QFR) with the Committee. The committee
requested that the chart showing the fastest and slowest growing cities in Washington be taken
out of the QFR because of inconsistencies with the data being used (These figures were taken
from the US Census Bureau, whereas the Puget Sound Region al Council uses a different
formula). Councilmember Gates asked if staff could retrieve the population data from PSRC.
The WA State Office of Financial Management data was used in this report because it is used to
determine state sharing revenues. The committee decided that the chart should be kept, but
noting that another set of data is used to determine other types of funding such as transportation.
One of th e most n otable var ian ces in th e r epor t is for th e veh icle licen sin g fees, wh ich ar e state
shared revenues. They are currently held by the state until it is determined whether the initiative
776 is constitutional. There was also a question asking whether or not the City is earning any
interest for the vehicle licensing fees potentially owed to it.
Ms. Kraus then reviewed an expanded version of police overtime expenditures with the
committee. It showed that expenditures are significantly down – despite still being over budget.
Chair Park felt that there should be some discussion regarding the topic during the next budget
cycle. Mr. Moseley assured him that the police and finance departments are working together to
address this problem and are taking steps in the right direction. Councilmember Gates noted
that if you look at the chart, it appears that the costs are stabilizing and are more predictable,
unlike 2002 when they were all over the map. Mr. Moseley surmised that the fact that the police
department was not fully staffed could have accounted for some of the spikes in the chart (such as
having to cover shifts for other officers going to court, sick, etc.).
Ther e was also a suggestion that maybe there is a better way to explain the cost recovery ratio
with Dumas Bay Centre and the Knutzen Family Theatre, so that citizens will be better able to
understand it.
Motion to accept the 2nd Quarter Financial Report and full forward to full Council for
approval. Motion seconded and carried.
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f) Vouchers
Presented by Tho Kraus
Ms. Kraus presented the vouchers for approval.
Motion to accept the vouchers and forward to full Council for approval. Motion seconded and
carried.
4. OTHER
None.
5. FUTURE AGENDA ITEMS
a.) City Center Redevelopment
b.) Business License Amendment – Massage Practitioners
6. NEXT SCHEDULED MEETING
August 26, 2003 at 2:00 p.m. in the Mt. Baker Conference Room.
Mr. Faison requested that future meetings be changed from 2pm to 4pm. Committee members will look at
their schedules and notify staff.
7. ADJOURN
Chair Michael Park adjourned the meeting at 2:52pm.
Recorded by Jason Suzaka