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FEDRAC MIN 07-26-2011CITY OF Federal Way City Council FINANCE/ECONOMIC DEVELOPMENT/REGIONAL AFFAIRS COMMITTEE Tuesday, July 26, 2011 5:30 p.m. Preliminary Meeting Summary 1. CALL TO ORDER By: Chairman Park Time: 5:32 p.m. Committee Members in attendance: Mike Park, Chair -x- Jeanne Burbidge -x- Other Council Members in attendance: Deputy Mayor Dini Duclos, Linda Kochmar Staff in attendance: Bryant Enge, Administrative Services Director 253 835 -2510 Steve Cain, Executive Assistant 253 835 -2402 Thomas Fichtner — IT Manager Tho Kraus - Finance Director Pat Richardson — City Attorney 2. PUBLIC COMMENT Federal Way City Hall Hylebos Room Jack Dovey - excused- Clair McArthur- Raised the question of initiatives and asked the Chair's position. Chair declined to comment. 3. COMMITTEE BUSINESS A. Approval of Minutes: June 28, 2011 S. Cain 2 Action Committee approval Motion to approve as presented, Second and Carried 2 — 0. C. Purchase of Network Video Recorder T. Fichtner Action 08/02/11 Council Consent Discussion: Thomas Fichtner — IT Manager Thomas explained the use, bidders and cost of the City Hall building surveillance cameras and system. Thomas answered committee questions regarding costs and maintenance. Motion to forward to Council 812, Second and Approved: 2 -0 FEDRAC July 26, 2011 Meeting Summary Page 2 of 5 D. 2011 Legislative session report B. Enge Information Discussion only Discussion: Bryant Enge -- Administrative Services Director Bryant introduced Doug Levy, our lobbyist and legislative consultant. Doug highlighted our legislative activity for year to date and looks to next session. Knowing the state's fiscal situation in advance, helped prevent surprises and damage. Our priority was to retain existing funding /revenues, such as liquor tax, which ended with minimal cuts. Successful with precious metals bill, auto theft money still in place, "Triangle" project was semi - successful (not lost but money needed for the state's rising fuel costs). 4Culture was a good outcome, will provide a reliable income stream. PACC looks good and the $325K re- appropriated to the city in the Capital Budget, once site was purchased. Coming items: State still face a shortfall in sales tax. State ended session with $725M in reserve, now down to $170M and falling by another $50M in June and July. Underwater in January predicted. Initiatives: 1183 to privatize liquor sales — will include license fees to keep money in cities — analysis will be done. 1125 to control tolling uses. City should watch toll use for various projects, if state cannot use tolls they will likely ask for conventional methods of finance. Three emerging issues — ST revision, city is looking for legislative solutions (and using special lobbyists) — subarea equity is a board policy — can the Legislature ask for or direct board to modify it? 2) Transportation taskforce; Councilmember Duclos stated the chamber to be active regionally. 3) Gangs — Kent shootings over weekend precipitated various PD chiefs meeting to discuss gang legislation. There were several comments on gangs. Doug will work with department heads for city issues. Councilmember Kochmar asked about federal, state and city funding. Doug stated federal participation looks weak, looks like nothing new. Probably more required from city. Councilmember Burbidge mentioned shovel ready projects. Discussion ensued regarding planning and preparation needed. Need for more money for TIB grants to do more locally. Councilmember Kochmar raised question of annexation and incentives. Doug stated incentives (sales tax credit program) good to end of 2014. Council discussion ensued with questions and comments about the process and results. Doug Levy sees three issues with annexation -- cost, land use, safety. Chairman Park spoke of the need to look at the cost and the bottom line. Doug said we have until 12 -31 -2014 to initiate, then we have a 10 year window. Bryant Enge commented 2012 agenda similar to 2011 in that we need to protect what we currently have. Define issues affecting departments and Doug will meet with department heads in August to prepare for needs by December. Doug — LIFT program with possible grants for infrastructure in downtown core. Councilmember Kochmar raised issue of homeless, sparking a discussion among committee members. Doug mentioned HB 2048, with surcharges to aid homeless, is still alive. No committee action required. E. Human Services Department Changes Summary B. Enge Information Discussion only Discussion: Bryant Enge— Administrative Services Director Human Services has moved to direct entitlement. One item is analysis of homeless needs, previously mentioned by Councilmember Kochmar, and should have data by Council retreat in January. Bryant will ask consultant to concentrate on it. Two employees resigned, so we reclassified the positions and moved part-time employee, Denise (Dee Dee) Catalano, to full time HS tech. In September we will fill an analysis position. That person will file reports and help with compliance. Brook [Lindquist] will be in charge of the CDBG capital program and $1.71VI NSP grant. Dee Dee will handle the HS, public service and general fund side of CDBG. FEDRAC July 26, 2011 Meeting Summary Page 3 of 5 Because of program deadline issues, Bryant will seek the flexibility to take some items directly to council. Bryant will send details to Mayor and Council in request for permission. Bryant responded to committee questions about this request and a discussion of various funding sources for HS Services such as senior housing and low income programs. No committee action required. F. Interlocal Agreement for HOME Investment Partnership B. Enge Action Program 08/02/11 Council Consent Discussion: Bryant Enge— Administrative Services Director HOME is a HUD program administered by King County for cities that do not qualify to receive HOME funds directly. King County received about $4M in 2010. Interjurisdictional Joint Recommendation Committee recommends projects and guidelines. Various city and county representatives sit on the committee. Deputy Mayor Duclos has been on the committee, expect Bryant or Brook will now. To have access to the funds, staff recommends entering into the agreement to participate in the HOME program in King County. Motion to forward to Council 812, Second and Approved: 2 -0 G. June Monthly Financial Report T. Kraus Action 08/02/11 Council Consent Discussion: Tho Kraus - Finance Director Finance Director Kraus provided a brief update on the June Monthly Financial Report. General and Street Fund revenues as a whole is $349K or 1.8% above year -to -date budget estimates due to increases in property tax, criminal justice sales tax, liquor profits and gambling tax offset by decreases in court revenue, permits and fees and animal services. Property tax continues to show a favorable variance, up $59K compared to year -to -date budget estimate. By year -end property tax is expected to exceed budget by approximately $120K. Since the City received the preliminary July sales distribution, Kraus provided the year -to -date sales tax information. Sales tax for the month of July is up $88K or 11% above budget. Construction is up $77K compared to year -to -date 2010 whereas June's report showed construction sales tax up only $17K. The increase is due to the Triangle Project. Retail sales tax is up $3K compared to year -to -date 2010 whereas June's report showed retail sales tax down $22K. This is due primarily to a turnaround in electronics and appliances category which is now up $6K. Through July, including amnesty payments sales tax is up 1.6% compared to budget. Excluding amnesty payments, sales tax is up 0.2 %. Court fines and forfeitures last month saw some improvement with Traffic and Non - Parking fines maintaining the same variance as in April's report - down $45K compared to year -to -date May 2010. June's report shows further reduction in Traffic and Non - Parking, down $58K or 11% from prior year levels. Overall, thru June, revenues are down $32K or 4 %. Public Works and Community Development Permits and fees continue to show a negative variance, down $111K or 14% from budget. Year -to -date collections of $706K account for 45% of the budget. Lastly, on the revenue side, City will receive high crime for July 1, 2011 through June 30, 2012. The preliminary mid - biennium budget adjustment includes a $100K adjustment for the first half of 2011 and City should receive an additional $90K in 2011 for the second half of the year and another $90K for the first half of 2012. On the expenditure side, all departments and including jail services reflect positive variances. Jail is currently $141K or 14% below budget as a result of using the Chelan jail in 2011 instead of Yakima. Real estate excise tax collections through June of $1,040K is above the $900K annual budget by $140K. Compared to year -to -date 2010, REET is up $391K or 60 %. By year -end revenues should reach $1.4 million similar to 2009 and 2010 revenues.. The sale of the Lodge at Peasley Canyon generated $257K in REET revenues to City. FEDRAC July 26, 2011 Meeting Summary Page 4 of 5 Police overtime is up $33K compared to year -to -date 2010 and up $14K compared to budget. June's overtime increase of $10K is due primarily to work on a murder trial. Also, the overtime incurred so far includes overtime related to red light photo, $24K incurred through June which we did not specifically allocate budget to. Animal services revenue of $11K in June was better than April's of $5K and May of $9K. Police sent out approximately 1,000 third notices. Councilmember Duclos inquired what happens after the third notices and they don't comply. Finance Director stated she would follow up with Police and respond. Red light photo revenues are below 2010 levels, the trend we were expecting to see and is occuring now. May's revenue is down approximately $29K or 28% and June's is down $21K or 15 %. Federal Way Community Center continues to do well. Revenues exceed budget by $23K and expenditures are below budget by $30K. During the first half of the year, FWCC has used $141K or 24% of utility tax operating contribution. • Councilmember Duclos inquired on what happens to the excess utility tax for FWCC operations if they don't use it all by year -end. Kraus stated that the 1% utility tax pays for debt service and the remainder goes to community center operations and capital, so if they don't use it all for operations it goes to capital. Once it goes to capital reserves and they need to replace equipment, they will have to go back to Council to authorize the use of reserves. • Councilmember Duclos inquired on whether we have an idea of how much we want to get into the capital reserves. Kraus stated Finance is currently working with Parks Director and FWCC staff on an equipment replacement analysis and that the more difficult piece is determining how much is needed in terms of capital maintenance for the facility 0 Councilmember Kochmar stated she understood Group Health pays for memberships for senior citizens or people they prescribe exercise classes to. She mentioned if it is true we should be contacting Virginia Mason and other providers in the area to see if they are interested and that we should be tapping into that. Other questions during the report were answered by Finance Director Kraus: the report remained unchanged. Motion to forward to Council 812, Second and Approved: 2 -0 H. Vouchers T. Kraus Action 08/02/11 Council Consent Discussion: Tho Kraus - Finance Director Chairman Park asked for questions: Councilmember Duclos inquired on the payment made for PRCS - Ballroom Dance Classes on page 91 and wondered if this is at the community center and if people are paying for this program. Kraus stated this is a general recreation and yes, people pay for this program. Motion to forward to Council 812, Second and Approved: 2 -0 B. Approve FWPD application for 2011 JAG Grant C. Schrock Action 08/02/11 Council Consent Discussion: Pat Richardson — City Attorney No one from FWPD was present. This item was delayed to the last item considered. Pat presented the information and the application. Since the August 16 Council meeting is canceled, this needs to be modified to go to Council on August 2nd Change was made and a short discussion followed. `FEDRAC July 26, 2011 Meeting Summary Page 5 of 5 Chairman Park made a comment for the record: For any item properly communicated to committee, appropriate staff must attend the meeting. Director must make sure that the staff handling the item is present. Motion to forward to Council 812, Second and Approved: 2 -0 4. OTHER: None 5. FUTURE AGENDA ITEMS: 2011/2012 Mid - Biennium Budget Adjustment Calendar - Kraus - Informational Item Financial Controls Update - Kraus - Informational Item Waste Management Contract Amendment 2012 -2013 Solid Waste & Recycling Grant Authorizations HVAC replacement items Ordinance: Modifying the Diversity Commission 6. NEXT MEETING: Tuesday, August 23, 201 1 Meeting adjourned 6:49 p.m. Attest: Steve Cain, Executive Assistant COMMITTEE APPROVAL: C M717M Com ee Chair Jeanne Burbidge Committee Membi Dovey e Me4