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FEDRAC MIN 04-26-2011C3TF CE Federat Way City Councii SUMMARY onal Affairs Committee 1. CALL TO ORDER: Chair Mike Park called the meeting to order at 5:33 PM. Committee Members in Attendance: Committee Chair Park, Committee Members Burbidge and Dovey. Councilmembers in Aftendance: Deputy Mayor Duclos and Councilmember Kochmar Staff Members in Attendance: ASD Bryant Enge, Finance Director Tho Kraus, City Attorney Pat Richardson, IT Manager Fichtner, and Executive Assistant Brook Lindquist. 2. PUBLIC COMMENT: None. 3. COMMITTEE BUSINESS A. B. C. Topic Title/Description Approval of Minutes: March 22, 2011 Committee Member povey moved to approve as presented. Committee Member Burbidge second. Motion Carried 3- 0. Legislative Report for April 2011 ASD Enge presented the latest legislative report to Committee Members. State Lobbyist Levy reported on the current legislative items that affect the City of Federal Way. The Washington State Legislature began a 30 day special session. They are addressing the budget. The cities will be keeping 97% of their current state revenue. There are significant differences between the House and Senate budgets. They are looking at a constitutional amendment to deal with the State's debt. The precious metal bill is moving forward. The capital budget does include the $325K for design work on the PACC/Civic Center. The algae clean-up accounts will be signed into law tomorrow. The Triangle Project funding ($14MIL) will not be preserved and instead will go towards increased fuel costs. The REET bill will be signed in the near future. Committee Members inquired about potentiai funding for King County Metro and if the Governor will sign it. This bill would allow a$20 vehicle license fee to be added. This will need to go to the King County Council for approval. Purchase of Adobe Soffware IT Manager Fichtner presented information on the purchase of Adobe software. The State renegotiated their Adobe contract and they require that all government entities that purchase off their contract to put this one in place. There is no dollar amount to this contract but does allow the City to purchase off the DIS contract. Committee Members inquired about how much this will cost. IT Manager Fichtner stated there are a few pieces that need to be purchased (-$200). Committee Member Burbidge moved approval of the purchasing contract for Adobe software with Washington State Department of information Services effective May 4, 201 1. Committee Member povey second. Motion carried 3-0. D• Institutional Network Contract Renewal Council Placement N/A Oiscussion Only N/A Discussion Only Consent OS/03/201I Consent 05/03/2011 IT Manager Fichtner presented information on a contract renewal with King County for our I-Net services. This is for our internet connection, IP addresses, domain names, licenses and connection to IGN, etc. We currently pay $1048 per month and the new contract _ _ __ _ _ ... FEDRAC SUMMARY A pril 26. 201 1 will be $13 less per month. We will be locked in at this price for three years but can terminate the contract with 30 days notice. This allows us to keep our IP addresses as well as increased network bandwidth. Committee Members inquired about if this is a resale. IT Manager Fichtner stated that King County does sell this to us with enhanced features including IGN. Committee Members inquired whether it would be cheaper to go ala carf. King County does make some profit on this but it is difficult to find where to get the IGN service. Both the City of Renton and the City of Auburn have two providers including King County. Committee Members inquired about the redundancy of the City's internet service. IT Manager Fichtner stated that we only have one service due to budget. We do have a backup of cellular 3G if we need to get online but there is no network backup. ASD Enge stated if Council would like to look into this, staff could bring back later. The Committee agreed that they would like to see some research into backup options. Committee Member povey moved adoption to renew the contract with King County. Committee Member Burbidge second. Motion carried 3-0. E. Civic Center Alternative Funding Methodologies Consent OS/03/2011 ASD Enge presented alternative funding methodologies for the Civic Center. He presented the idea of exploring public/private parfnerships, non-profit, or private development of the Civic Center. This would be providing details on how we could fund this facility and see if there are funding partners out there. This could help mitigate the City's risk for developing this facility as well as provide capital dollars. There has been some work done by Webb Management that addresses funding. ASD Enge would like to have Webb Management complete more research in this area and look at what can be done locally. The Committee Members inquired about whether or not the word alternative should be used. This will be reviewing the funding of the project, not the operating or construction side. ASD Enge stated he would remove the word alternative. The Committee reviewed the document and provided feedback. There was a discussion on the possibilities of endowments or funding that could cover the gap between the expenditures and revenues. There is concern that this should be a self-sufficient enterprise. CEDD Doherty discussed the RFQ that went out this week. There could be another RFQ that goes out in regards to other development possibilities in the downtown area. This would be similar to what was done previously. We received 15 proposals for A& E work for the Civic Center. There was a discussion on the possibilities for the site including a hotel option. Committee Member Burbidge moved to approve staff recommendation to explore finance methodologies to the Council on May 3, 201 1 on consent agenda for approval. Committee Member povey second. Motion carried 3-0. F. March Monthly Financial Report Consent OS/03/2011 Finance Director Kraus updated the Committee on the March 201 1 Financial Report. General and Street Fund revenues as a whole is $152K or 1.8% above target with year-to- date budget estimates. Sales Tax and Court revenue negative variance as reported last month reporf continues to be concerning. Property tax negative variance is still considered a timing difference at this point since the first half property tax payments are not due until the end of April. Revenues that are down compared to budget include property tax, sales tax, building permits and fees. Revenues that are up include criminai Justice Sales Tax, liquor profits, gambling tax, and court revenue. On the expenditure side, ali departments reflect positive variances with the exception of jail services. The Designated Operating Funds saw increases in utility tax, real estate excise tax and red light photo enforcement compared to year-to-date budget. The $247K increase in red _ _ _ _ _ ___. fEDRAC SUMMARY Aoril 26. 2011 light photo revenues does not take into account of approximately $55K for March payments to ATS since the invoice was not received and paid at the time the monthly financial reporf was prepared. The adjusted increase in red light photo compared to budget is $193K. On the expendit�re side, all designated funds reflect positive variances except for Solid Waste & Recycling which is due to timing of grant program. March's sales tax distribution of $751 K is $35K or 4.5% below March 2010's distribution and $33K or 4.2% below March's budget estimate. 15} Quarfer's sales tax distribution of $2,723K is $59K or 2.1 % below ytd 2010 and $82K or 2.9% below ytd budget estimate. Retail trade down $24K due to increases in building material & garden and non-store retailers, offset by decreases in general merchandise stores, electronics & appliances, food 8� beverage stores, sporting goods, hobby, books and miscellaneous store retailers. Services, generally viewed as one-time fluctuations, usually due to new office set �p and the result of field audits, is down $3K due to increases in amusement & recreation and accommodation services offset by decreases in professional 8� technical services, administrative support and health care assistance. Wholesaling is down $6K due to an increase from the sale of a fire truck offset by decreases in computers, copiers, carpet and food services. Information is down $11 K mainly due to one company remitting one larger payment in 2010. Manufacturing is up $5K due to a major lumber company. Government is up $9K due primarily to payers remitting tax but did not specify classification code. Finance/Insurance/Real Estate down $15K due to a couple of stores that reported no sales tax in 2011 due to store closure, decreases in equipment rentals and video rentals, decreases in property and financing companies. In terms of sales tax collections by area, South 348'h up $5K, the Commons is on target, South 312'h is down $16K, Pavilion Center is down $13K, Hotels/Motels is up $4K and Federal Way Crossings is down $3K. April's preliminary sales tax distribution for February activity is $32,138 or 3.8% below April 2010 and $13,052 or 1.6% above April 201 1 budget estimate. On a year-to-date April basis, sales tax is $91,267 or 2.5% below year-to-date 2010 and $68,755 or 1.9% below the year budget. The good news is that we are seeing a turnaround in construction sales tax from the Triangle Project. March's utility tax receipts of $1,287K are $124K or 10.6% above March 2010 receipts and $162K or 14.4% above March's budget estimate. l st Quarfer's utility tax receipts of $3,767K is $117K or 3.2% above ytd 2010 and $237K or 6.7% above year-td budget estimate. Compared to year-to-date 2010: electricity is up $78K or 6% due to increased consumption; gas is up $85K or 13% due to 2% rate increase effective November l, 2010 and increased consumption; solid waste is up $20K or 1 1% due to rate increase of 16.9% effective March 1, 2010; phone is down $22K or 7%; and cellular is down $50K or 7%. Real estate excise tax 1 St quarter coliections of $574K accounts for 64% annual budget. March's receipts of $68K are $26K or 28% below March 2010. 1 S' quarter receipts of $462K is from the sale of Palisades Apartments and WoodMark Retirement Community. March's and 1 S' quarfer's hotel/motel tax is on target with budget estimate. March's gambling tax receipts of $55K is $32K or 37% below March 2010 receipts and $43K or 353% above March's budget estimate, due to card room. 15� quarter's gambling tax receipts of $125K is $1 14K or 48% below year-to-date 2010 and $72K or 138% above year- to-date budget estimate, again due to card room. Through ls' quarter, City portion of overtime is up $5K compared to year-to-date 2010 and on target with budget. February's overtime was high (exceeded 2010 by $17K) due to mutual aid provided to City of Tukwila, homicide investigation and sick leave coverage in order to maintain minimum staffing levels. March's overtime is low (below 2010 by $12K) and is due $6K decrease in shift extensions (when officers are asked to stay for major events or maintain staffing levels) and $6K shift call-ins (when officers are cailed in for the same reason as shift extensions but this is on the officer's scheduled day_off). The Chief _ _ __ _ __ _ __ _ FEDRAC SUMMARY Aqril 26. 201 1 has ordered them to better manage schedules to maintain staffing levels in order to reduce these costs. 15} quarfer's animal licensing revenues totaled $32K and is less than anticipated. At this rate, animal services revenue may only meet 50% of the $264K budget, a reduction of $132K. 1S' quarter's jail costs are up $84K or 39% compared to year-to-date 2010 due mainly to increased usage. 15} Quarter's 2011's red light photo net revenue totaled $373K but does not include March's invoice payment of approximately $55K. Including March's estimate invoice payment, the revised 15' quarter 2011 revenues total $318K and would be $89K or 39% above 15} quarfer 2010. Finance Director Kraus noted that January 2010's revenues do not include the 8 new cameras that were activated February 2010 and the 2 additional cameras activated December 2010. February 2010's revenue does not include the 2 additional cameras activated in December 2010. Compared to 2010 year-to-date, court revenue is down $40K or 9% excluding probation services. There is $12K decrease in Shared courf costs is due to a timing difference and when that is taken into consideration, court revenue is down $29K or 7%. Federal Way Community Center revenues are above 2010 year-to-date actual and budget and expenditures are below 2010 year-to-date actual and budget. Chair Park requested a briefing on Animal Services at the next FEDRAC meeting. Finance Director Kraus stated she will follow up with Police and responded that Police is taking measures to increase compliance such as comparing Federal Way's database with King County, educating citizens, and have licensing information at the pet stores. Committee Member inquired about .0808 on gas bill. This has other taxes in the city portion of the bill. Finance Director Kraus will follow up and email the Committee Members. Committee members inquired about FWCC sales tax funding and whether there is a cap to how much ST funding the center can get. Finance Director Kraus stated 1% of utility tax is dedicated to FWCC debt services, operations and capital reserves. The budgeted utility tax transfer for operations is $590K for 2011. If it looks like FWCC will exceed that amount, we would need to inform Council. If the full amount is not needed for operations, we would transfer the balance to capital reserves. There was a discussion on having a SCORE update on next month's FEDRAC. Committee Member povey moved adoption. Committee Member Burbidge second. Motion carried 3-0. G. Vouchers __ _ __ _ Consent OS/03/2011 Committee Member Burbidge moved adoption. Committee Member povey second. Motion carried 3-0. FEDRAC SUMMARY A bril 26. 2011 4. OTHER: None 5. FUTURE AGENDA ITEMS Long Range Pian Update, IT Network Redundancies (information), Animal Services Revenue Update (information), SCORE Business Plan Update (information) 6. NEXT MEETING: Tuesday May 24 2011 Meeting adjourned at 6:28 p.m. �/���. Attest: Brook Lindquist, Executive Assistant COMMITfEE APPROVAL: 1 c� � '1, ad Com ittee Chair _��� � �� � �- Jeanne Burbidge � Committee Member l.