FHSRAC MINS 09-26-2006
City of Federal Way
City Council
Finance/Human Services/Regional Affairs Committee
Tuesday, September 26, 2006
5:30 p.m.
City Hall
Hylebos Conference Room
MINUTES
Committee Members in Attendance: Chair Linda Kochmar and Members Jeanne Burbidge and Jack Dovey.
Staff Members in Attendance: City Manager Neal Beets, Assistant City Manager Derek Matheson, Management
Services Director Iwen Wang, City Attorney Pat Richardson, Economic Development Director Patrick Doherty, Finance
Manager Tho Kraus, Information Systems Manager Mehdi Sadri, and Deputy City Clerk Krystal Kelsey.
Others in Attendance: Diana Noble-Guillaford and H. David Kaplan
1. CALL TO ORDER – Chair Kochmar called the meeting to order at 5:32 PM.
2. PUBLIC COMMENT – Deferred until agenda item C at the request of Mr. Kaplan.
3. COMMITTEE BUSINESS
a. Approval of Minutes – The Committee m/s/c to approve the minutes as presented.
b. Congressional and Legislative Update
Mr. Matheson reviewed the City’s legislative activities including the following key areas:
Streamlined Sales Tax: The City continues to receive very positive feedback regarding passage of
SST legislation in 2007.
Transportation: It is important that Federal Way remain vigilant in seeking funding for projects key to
Federal Way –notably SR 509 and the Triangle Project – especially in light of recent high-profile projects
including the Evergreen Floating Bridge and the SR 99 Viaduct in Seattle. These projects alone would
cost the state – or RTID – an additional $1.3 billion because of across-the-board cost increases.
Regional Transportation Commission/Governance Commission: The Commission is researching
government and transit functions in other regions, including Portland and San Diego. Staff is working to
arrange a follow-up conversation with RTC member Mary Gates to the Commission’s draft report
(scheduled for release in mid-November) and public hearings/comment.
Camp Kilworth: The City is working with Senator Eide’s office to arrange a tour of Camp Kilworth for
key state senators who will oversee development of the 2007-09 Capital Budget.
Hotel/Motel Tax Legislative “fix”: Based on a decision by the Attorney General, jurisdictions are
currently only permitted to expend hotel/motel tax revenues on advertising and marketing (promotion)
for community events. The City will likely work toward solving this problem in 2007 so revenues can be
allocated for expenses other than promotion. Mr. Matheson remarked this could be key as the City
competes to host the 2008 Olympic Diving Trials.
In regards to federal legislation, Mr. Matheson remarked that everything, for the most part, is on hold until after
the mid-term elections in November. Nothing will likely pass until November or December 2006.
Mr. Matheson also announced Sound Transit and the Regional Transportation Investment District would be
hosting a joint open house on Wednesday, September 27, 2006 in the King County Aquatic Center from 4:30 –
7:30 p.m. (with a presentation at 6:00 p.m.) to seek community input on a planned November 2007 Roads and
Transit ballot measure. Staff is currently preparing documents for the open house. The Committee remarked
they would like to receive a synopsis following the event.
MOTION: Chair Kochmar moved to add “Resolution of the Federal Way School Board to Repeal Article VII – Multifamily
Dwelling Unit Limited Property Tax Exemption” to the agenda as item F. Motion seconded and carried.
c. 2006 Fall Tourism Enhancement Grant Applications – Mr. Kaplan, Chair of the Tourism Enhancement
Grant Review Subcommittee, addressed the Committee and presented his opinion that legislation limiting
Lodging Tax funds strictly to promotion of community events must be overturned. Mr. Kaplan stated in his
view funds spent toward marketing and advertising are, for the most part, spent outside the City’s local
economy (to publishers, etc.).
Mr. Doherty presented his staff report and reviewed the five applicants recommended for funding:
Organization/Event Dates
Req’d
Amount
LTAC
Rcm’d
Amount
Federal Way Symphony “The Art of the Strings”
and “The Art of the Piano”
Oct 7 and 8; Dec 2 & 3
2006
$5,000 $3,250
PN Master Swimmers/2007 US Masters
Short Course Championship
May 2007 $10,000 $9,000
Raiders Parents Movement – WA State Coaches
Association – All-state Girls Basketball Games
March 16 – 17, 2007 $6,500 $2,000
Federal Way Arts Commission – Writers’
Conference at Dumas Bay
April 2007 $2,000 $1,500
Centerstage Theatre – “A Christmas Carol” Nov – Dec 2006 $5,000 $4,250
TOTAL $20,000
Councilmember Dovey inquired whether the City would be legally permitted to award additional funds if it
were to officially co-sponsor an event. Mr. Doherty answered the City is not able to award additional funds
(for purposes outside promotion) regardless of whether or not it co-sponsors an event. The Attorney
General’s opinion will only be altered by legislative action.
The Committee also discussed the actual cost of marketing/advertising events in today’s economy and
questioned whether or not the funds requested by the organizations are realistic or over-estimated. Mr.
Doherty answered they appear to be very accurate, if not under-estimated. He further explained the grant
funds are reimbursed after the funds had been expended and documentation (invoices, receipts, etc.) had
been submitted by each organization. The Committee also expressed an interest in asking grant recipients to
attend a Council or Committee meeting to give a summary their event.
Mr. Matheson noted staff plans to meet with Senator Eide and the relevant committee’s Chair after elections to
discuss this problem and possible solutions.
The Committee m/s/c to approve the staff recommendation (Option 1) to approve the TEG recommendations
of the Lodging Tax Advisory Committee and forward to the full City Council on October 3, 2006.
d. Renewal of King County I-Net Contract – Mr. Sadri presented his staff report to the Committee and
recommended approval of the contract’s renewal because of its relative low cost. The Committee asked if Mr.
Sadri was aware of any reason for the somewhat irregular annual cost increases. Mr. Sadri answered he was
not aware of a specific reason, but they appear relative to other economic/service cost increases.
The Committee m/s/c to forward the staff recommendation (Option 1) to approve the contract with King
County for I-net services for the amount of $895, $1,019 and $1,048 per month for the years 2007, 2008 and
2009 respectively, to the October 17, 2006 City Council Consent Agenda.
e. Amending the Senior Citizen Utility Tax Rebate Program to Include Low-Income, Disabled Citizens
– Ms. Wang presented the staff report to the Committee. Councilmember Dovey inquired about the reason for
the proposed change. Ms. Wang and Mr. Beets answered while meeting with local community service groups
(such as Kiwanis, Rotary, etc.) to present the City’s budget process and the potential utility tax ballot measure,
some groups expressed a concern about the financial impact to low-income, disabled individuals. Ms. Wang also
mentioned other government and utility entities include low-income, disabled individuals in the same tax
credit/rate reduction programs including – King County (property tax assessments) and Comcast (reduced cable
packages) offered to low-income senior citizens.
Ms. Wang explained staff proposes using the same definition for “disabled” as used for Supplemental Security
Income (SSI) eligibility. Furthermore, the City may utilize the services of the Multi-Service Center to process
rebate applications because of the extra staff time and potential difficulty in determining eligibility.
The Committee m/s/c to forward the staff recommendation (Option 2) to authorize staff to prepare a draft
ordinance to be presented to the full Council for consideration at its October 17, 2006 City Council meeting.
f. ADDED ITEM: Resolution of the Federal Way School Board to Repeal Article VII – Multifamily
Dwelling Unit Limited Property Tax Exemption – The City was recently made aware that the Federal Way
School Board planned to present this resolution at its meeting later in the evening (September 26). The City
asked the Board to consider first providing the City an opportunity to present information relating to the history
of the exemption, the research conducted prior to authorizing the exemption, and the impacts of repealing it.
Patrick Doherty reviewed the history of this exemption for the Committee, and highlighted his research findings
(based on Tacoma, Renton and Bellevue) conducted in 2002 and early 2003. Specifically, Mr. Doherty
mentioned his researched showed the number of school-age children in city-center apartments was lower than
those in “family-friendly” neighborhoods.
Also, by investing in their city centers, lagging properties were able to increase their land value, thus bringing
increased revenues as a result of higher tax assessments. (Land value taxes were not exempted).
Mr. Doherty also stated the tax exemption was approved for a five-year pilot program and is an important
incentive to increase density in the city center and frame zones as required by the Growth Management Act.
Furthermore, developers must pay school impact fees, commercial value taxes and land value taxes.
The Committee asked if Federal Way’s five-year pilot project would automatically lapse. Mr. Doherty answered
“no”, it must undergo review and approval to continue. The Committee inquired when the ten-year tax
exemption period starts; Mr. Doherty answered from the date the certificate of occupancy is issued. However,
the certification date is different for condos (individual condo homeowners) versus apartments (one central
owner with rental tenants).
The Committee directed Mr. Doherty to speak with Sally McLean at the School District regarding his survey
findings and offer to speak at an upcoming School Board Meeting. Finally, the Committee stated it would like
staff to come back to Committee with an update on this topic.
fg. Monthly Financial Report – Ms. Kraus presented the staff report to the Committee and highlighted key areas
of the report, included increased/decreased revenues and expenditures, permit activity, and sales tax activity.
Ms. Kraus explained staff plans to meet with the Parks Department to determine the cause for their decreased
revenues and increased expenditures.
The Committee asked if $2,000,000 was the actual projected year end variance as indicated in report. Ms.
Wang agreed and stated the Management Team has recommended allocating most of the variance for use in the
2007/2008 proposed budget. Ms. Kraus also reported video arraignment in the Municipal Court has been
reinstated.
The Committee m/s/c to approve the Monthly Finance Report as presented and forward approval to the October
3, 2006 City Council Consent Agenda.
gh. Vouchers – Ms. Kraus reviewed the vouchers. There were no questions.
The Committee m/s/c to approve the vouchers as presented and forward approval to the October 3, 2006 City
Council Consent Agenda.
4. OTHER - None
5. FUTURE AGENDA ITEMS – Mr. Beets inquired whether or not the Committee wished to hold the December 26, 2006
Finance, Human Services and Regional Affairs Committee meeting as planned, reschedule the meeting, or cancel.
The Committee m/s/c to cancel the December 26, 2006 Finance, Human Services and Regional Affairs Committee
meeting and to authorize staff to forward the monthly staff report and vouchers directly to the first Council meeting
in January.
6. ADJOURNMENT – Chair Kochmar adjourned the meeting at 6:51 PM
ATTEST:
Krystal Kelsey, Deputy City Clerk
COMMITTEE APPROVAL:
Linda Kochmar
Committee Chair
Jeanne Burbidge
Committee Member
Jack Dovey
Committee Member