FEDRAC MIN 10-25-2011CITY OF
. Federal Way
City Council
FINANCE/ECONOMIC DEVELOPMENT/REGIONAL AFFAIRS COMMITTEE
[FEDRACI
Tuesday, October 25, 2011
5:30 p.m.
Federal Way City Hall
Hylebos Room
Meeting Summary
(Preliminary until approved)
1. CALL TO ORDER
2. PUBLIC COMMENT
3. COMMITTEE BUSINESS
Action or
Topic rdle /Description Presenter Page* information only
A.
APPROVAL OF MINUTES: SEPTEMBER 27, 2011
S. Cain
2
Action
Committee approval
B.
PUGET SOUND ENERGY (POWER) FRANCHISE ORDINANCE
M. Salloum
6
Action
(6:45)
11 /1 Ordinance
C.
UPDATE ON ANIMAL SERVICES UNIT BUDGET
B. Wilson
43
Information only
(17:55)
No action required
D.
UPDATE ON HEALTH CARE INSURANCE— (Information current day of meeting)
B.Enge
46
information only
(35.50)
No action required
E.
MONTHLY FINANCIAL REPORT
T. Kraus
47
Action
(43.15)
11 /1 Council Consent
F.
VOUCHERS
T. Kraus
65
Action
1:00:40
11/1 Council Consent
*Additional materials may also be distributed for review /action during the meeting
4. OTHER:
5. FUTURE AGENDA ITEMS:
6. NEXT MEETING: Tuesday, November 22, 2011
Committee Members: City Staff:
Mike Park, Chair Bryant Enge, Administrative Services Director
Jeanne Burbidge Steve Cain, Executive Assistant
Jack Dovey 253 835 -2402
FEDRAC 10/25/2011
1. CALL TO ORDER
CITY OF
.� Federal Way
By: Chair, Councilmember Park
Time: 5:31
Committee Members in attendance:
Mike Park x Jeanne Burbidge - excused Jack Dovey -x
Other Councilmembers in attendance:
None
Staff in attendance:
Bryant Enge, Administrative Services Director 253 835 -2510
Steve Cain, Executive Assistant 253 835 -2402
Pat Richardson, City Attorney
Tho Kraus, Finance Director
Marwan Salloum, P.E., Deputy Public Works Director
Two PSE personnel
Brian Wilson, Chief of Police
Officer Melanie McAllester
Cary Roe, Public Works /Parks Director
2. PUBLIC COMMENT
Norma Blanchard:
Page 2 of 8
Initiative referendum — legal to change dates?
Questions about signatures
Special election
Change percentage
Illegal immigrants registered to vote when get drivers license. Citizenship not questioned when register
Chair asked City Attorney Richardson to respond to Ms Blanchard's concerns.
Claire McArthur said she had a question. Chair said questions are out of order, time was for comments.
Claire commented on newspaper article on Crystal Palace; said illustration and discussion not same as Council
presentation. Requested verification of the number of buildings.
Council member Dovey responded it was a Seattle Times article and City Attorney Richardson joined the
conversation.
Chair asked that Patrick Doherty be contacted for comments. Bryant Enge said he would seek clarification from
Doherty and others.
CITY OF
FEDRAC 10/25/2011 Federal Way Page 3 of 8
NOTE:
FEDRAC 10/25/2011 meeting packet is available on the City of Federal Way website at:
http: // docs. cityoffederalway .com /meetinedocs/ please see the packet for detailed information on the Agenda items.
3. COMMITTEE BUSINESS
A. APPROVAL OF MINUTES: SEPTEMBER 27, 2011 S. Cain 2 Action
Committee approval
Discussion /Changes: Steve Cain, Executive Assistant
Motion to accept as presented, second and passed.
B. PUGET SOUND ENERGY (POWER) FRANCHISE ORDINANCE M. Salloum 6 Action
11/1 Ordinance
Discussion: Marwan Salloum, P.E., Deputy Public Works Director
Note: Background and Ordinance — Pages 7 — 41 of FEDRAC meeting packet
Marwan highlighted the history and negotiations of the franchise
Chair called for questions.
Councilmember Dovey commented — history of power outages in Marine Hills area. He inquired about overhead wires
and whether the city should require PSE to put service underground when PSE makes improvements.
Conversation joined by Director Roe, Marwan and PSE representative:
Cary — speaks of special "tree wire." Says Public Works has some discretion to approve overhead improvements.
Marwan — indicates that in single family zones overhead is ok but commercial is to be underground, unless waived.
Cary — mentions economic considerations and continuity of service by just repairing or replacing overhead wires.
PSE — explained that the value of tree wire is insulation — prevents shorting if trees or limbs fall on them.
Since previous the franchise expired in 2008, Chair asks why so long to negotiate new franchise.
Marwan said there were some issues to address and PSE wanted some amendments to previous contract.
Chair asks if the changes resulted in losses to the city? Marwan said there was give and take and some compromises but
the result is acceptable to the city.
Chair verifies that the franchise is for 10 years.
Cary — Explains that PSE has franchises across the area and is attempting to make franchises similar, for simplicity. Cary
believes it is a good document for both PSE and FW.
Motion to forward Option 1 to the November 1, 2011 City Council Ordinance Agenda for first reading, second and passed.
tiTY OF
FEDRAC 10/25/2011 Federal Way Page 4 of 8
C. UPDATE ON ANIMAL SERVICES UNIT BUDGET B. Wilson 43 Information only
No action required
Discussion: Brian Wilson, Chief of Police
Reference staff report - Pages 44 -45 of FEDRAC meeting packet.
Chair- Cost of animal services discussed in last FEDRAC meeting, this is further discussion and clarification.
Chief Wilson - discussed the decision process leading to FW withdrawing from the King County program and starting our
own. Mentioned some of the problems and issues with starting our own program.
Stated that free license for seniors (28% of the licenses) raised the question of the actual cost for the "free" license and
services to the City. Apparently the service numbers are small and tags are permanent, so there is no cost but the
original and that is minimal.
Chair - asked about financial reports, Tho Kraus responded that we expect increased revenues next year.
Chief Wilson explained that PD is doing background on second officer now, will be done before end of year
With second hire, will have complete team for 2012 and will better able to do service, licensing, data and etc.
Because the program is new and team not complete, we do not have good data yet.
Chair thanked the Chief for the information.
D. UPDATE ON HEALTH CARE INSURANCE - (Information current day of B. Enge 46 Information only
meeting) No action required
Discussion: Bryant Enge, Administrative Services Director
Bryant presented an up -to -date summary, included here:
Healthcare update - 10/25/2011
(Agenda item D.)
- April 2010 —The Healthcare Taskforce was convened to research healthcare options in consideration of the rising
healthcare costs and limited revenues. Their goal is to maintain high standards of care /level of services at a reduced
cost
- October 2010 —The Healthcare Taskforce recommended selecting a consultant to identify health benefit philosophy
and cost containment goals and strategies, and to obtain a wider range of options for consideration
- January 2011 —R.L. Evans was selected as the consultant
- February 2011 —The city completed Phase I of its healthcare analysis, the Healthcare Benchmark Study. The findings of
this analysis:
o The City's healthcare cost for employees is increasing at a much faster rate than the City's operating revenue.
• From 2006 through 2010, the city's share of the cost of employee medical premiums grew from $2.4
million to $3.75 million, an average annual growth of approximately 10 %, while during this same
period the General Fund operating revenue grew on average 3.3 %.
• The $3.75 million cost for medical benefits (health, vision, and dental) represents nearly 10% of the
City's General Fund operating expenditures.
- May 2011 —The city completed Phase II of the healthcare analysis, Healthcare Feasibility Study. Staff recommended
Group Health plan for further consideration. Group Health Plan will save the city over $700,000
- June 2011 —The city worked with Group Health to develop a plan that most closely represents what city employees
currently have. Mayor presented plans to city employees.
CITY OF
FEDRAC 10/25/2011.•,.. -- Federal Way
Page 5 of 8
- September 2011 —Group Health representative met with city employees to provide additional detail and answer staff
questions
- October 2011 —The Mayor proposes to select Group Health to provide healthcare services for non - representative
employees. In addition, Teamsters have agreed to the Group Health plan. Guild and Lieutenants are considering the
Group Health plan.
Final decision must be made and AWC notified by Nov 1.
Chair — questioned teamsters portion of staff, Bryant replied that they equal almost half.
Chair questions how arrived at $700K savings — Bryant discussed the Group Health plan with two options (Direct and
Alliance — Alliance slightly more expensive). He explained that the cost basis for the savings was the 2012 health care
budget compared to a quote from Group Health.
Chair thanked him for the information.
E. MONTHLY FINANCIAL REPORT T. Kraus 47 Action
11/1 Council Consent
Discussion: Tho Kraus, Finance Director
Tho discuss (in some detail) that, overall, pretty similar to previous months' reports
General & Street Fund Summary — paae 48
• Revenues are up $592K or 6%
• Up - Property Tax, Sales Tax, High Crime, Liquor Profits, Gambling Tax, General Recreation
• Down — Court Revenue, Permit & Development Fees, Police (animal license, mainly)
• Expenditures are down $2.8M or 8%
o Police down $1.1M due to position vacancy, various one -time grants, timing of dispatch payments,
travel /training
Property Tax
• Year -to -date revenue is up $14K compared to year -to -date budget
• Year -to -date revenue is up $66K or 1% compared to year -to -date 2010 actual
• For mid - biennium, estimated 2011 revenues to exceed 2010 by $83K or 1 %
Community Development Buildina Permits & Fees
■ Year -to -date revenues are down $88K or 9% compared to budget and down $145K or 14% compared to prior year.
■ Collected $870K or 70% of annual budget of $1,242K.
■ For mid - biennium, estimated 2011 revenues to come in $174K below 2010
Public Works Permits & Development Review Fees
• Year -to -date revenues are down $32K or 13% compared to budget and $43K or 17% compared to prior year.
• Collected $212K or 64% of annual budget of $333K.
• For mid - biennium, estimated 2011 revenues to come in $3K below 2010
Sales Tax — Pane 50 and 51
- On a monthly basis:
• September 2011 sales tax distribution of $927K is flat compared to September 2011 and monthly budget estimate
- On a year -to -date basis:
• Including $85K amnesty payments, up $77K or 1 % compared to 2010 and up $85K or 1.1 % compared to budget
• Excluding amnesty payment, down $8K or 0.1 % compared to 2010 and budget and flat compared to budget
CITY OF
FEDRAC 10/25/2011 Federal Way Page 6 of 8
- Major variances by category compared to 2010:
• Retail Sales is down $49K or 1 % due to a major retailer being $46K
• Services is down $67K or 4% due to City receiving money in 2010 as a result of state's audit
• Construction is up $142K or 21 % from a major road construction project
• Information is down $57K or 13% due to City receiving money in 2010 as a result of state's audit
• Government is up $89K or 67% from amnesty payments
- Major variances by area compared to 2010:
• South 348 — up $81K or 1 % due to decrease in garden /home improvement stores and increase in major
retailer
• The Commons — up $51K or 1 % from state audit of clothing store and going out of business sales
• South 312 to South 316 — down $50K or 7% due to decrease in sales at a major store and automotive
parts store
• Pavilion — down $12K or 3% due to decrease in electronics and grocery store, and closure of video rental
store
• The Crossings — up $21K or 1 % due to increase in restaurants and another major store offset by decrease
in cellular store
Octobers preliminary sales tax distribution of $920K is up $31K compared to October 2010's distribution and October
2011 budget estimate, all due to construction which added $42K. However, received notification from DOR that system
error duplicated records in the July 2011 distribution resulting in overpayments to local government. The overpayment to
Federal Way was $78K which will be deducted in Novembers distribution.
Preliminary YTD October sales tax:
• With Amnesty and adjusted for State's $78K error
■ Sales tax is up $31 K or 0.3% compared to ytd 2010
■ Sales tax is uu $38K or 0.4% compared to ytd budget
• WithOUT Amnesty and adjusted for State's $78K error
■ Sales taxis down $55K or 0.6% compared to ytd 2010
■ Sales tax is down $48K or 0.5% compared to ytd budget
Utility tax — Dage 51 and Dage 52
Year -to -date September is up $509K or 5% compared to budget and $184K or 2% compared to 2010 year -to -date.
Compared to ytd 2010:
- Electricity is up $167K or 5% due to increased consumption.
At year -end anticipating a $140K increase, resulting in $30K or 0.6% above 2010 actual .
- Gas is up $235K or 17% due to increase in consumption and some due to rate increase effective November 1, 2010.
At year -end anticipating $200K increase, resulting in $252K or 15% above 2010 actual.
- Solid Waste is up $20K or 1 % due to rate increase of 16.9% effective March 1, 2010
At year -end anticipating $115K increase, resulting in $19K or 2% above 2010 actual.
- Cable is up $20K or 2%
At year -end anticipating $27K increase, resulting in no change from 2010.
- Phone is down $90K or 10% due to a decrease of $50K from a major payer. Also, $32K combined decrease from
three other payers.
At year -end anticipating $65K decrease, resulting in $186K or 16% below 2010 actual
CITY OF
FEDRAC 10/25/2011 Federal Way Page 7 of
g $
- Cellular is down $156K or 7% due to:
• $109K decrease from a major payer excluding data service revenue in utility tax calculation
• $86K decrease from four other providers
• $39K increase from one tax payer
At year -end anticipating $60K decrease, resulting in $186K or 7% below 2010 actual
By year -end anticipating utility tax will be $12.8M, similar to 2010's collections of $12.9M.
REET — page 53
- Collected $1.36M through September, exceeded annual budget of $900K.
- Will meet and /or exceed 2011 YND Estimate of $1.4M
Police Overtime — page 55
■ Year -to -date City portion of overtime is $31 K or 6% above year -to -date 2010
■ Year -to -date City portion of overtime is $4K or 1 % below year -to -date budget
■ Red light photo overtime accounts for $31 K of the total $517K City overtime
Jail Services — page 55
■ Down $123K or 7% compared to year -to -date 2010
($66K savings due to decrease in usage; $106K savings due to decrease in medical; offset by rate increases of $49K
■ Down $60K or 4% compared to year -to -date budget
■ Expenditures reflect all invoices through July with the exception of King County
Animal Services — Dage 56
■ Made improvements to animal services reporting on the monthly financial report
Red Light Photo — page 57
■ Year -to -date red light photo net revenues total $720K which is $349K or 33% below prior year.
■ Red light photo revenues began decreasing in earlier this year — Total decrease during March thru June was $74K or
15%
■ July net revenues of $34K is down $148K or 81 %
■ August net revenues of $27K is down $138K or 84%
■ September estimated net revenues of $52K is down $88K or 63%
There were a few issues that caused the decrease:
• Issue of violations exceeding expiration date from prior months which Police has resolved for August and
September.
• Equipment malfunction with some school cameras during the months of June, July, August, and September.
• Expected decrease in the number of violations over time because of red light photo implementation. The
City's goal is improving safety; it is working and as a result revenues will be diminishing moving forward.
Federal Way Community Center — page 60
• Year -to -date revenues are exceeding year -to -date budget by $39K or 3%
• Year -to -date expenditures are below budget by $25K or 2%
• Through September, $271K or 46% of the annual utility tax funding for operations of $590K has been used.
Chair institutes a discussion about RLC (Red Light Cameras) — asks when was the last school camera installed? Tho says 2
in 2010 and 2 in 2011.
Discussion ensued — declining revenue because people cautions, cameras doing their job, people aware of need to stop.
CITY OF
FEDRAC 10/25/2011 .; Federal Way
Page 8 of 8
Chief — RLC violation often gave benefit of doubt, however examination of the law and study of the actions showed that
there were various interpretations of the law so PD tightened criteria and has better enforcement of the laws.
Chair addressed billing issues, have they been corrected? Chief replied that ATS (RLC company) came to FW to discuss,
interlocal agreement adjustment.
Motion to forward Option 1 to the November 1, 2011 City Council Ordinance Agenda for first reading, second and
passed.
F. VOUCHERS T. Kraus 65 Action
11/1 Council Consent
Discussion: Tho Kraus, Finance Director
Discussion /Changes:
Councilmember Dovey questioned all the mitigations — pages 66 — 77. Why return the money?
Tho and Marwan — explain the reason for collection and returns, Marwan providing examples of projects.
Councilmember Dovey asks how much, Tho says about a couple hundred thousand
Marwan explains that we collect money, if it is not used in 5 years must return
Councilmember Dovey addresses 15K to PSE for street lights, can we change lights for lower cost?
Marwan says we are Looking at cost and saving, new products use less but looking at initial change out costs. Changes
must go to council.
Motion to forward Option 1 to the November 1, 2011 City Council Ordinance Agenda for first reading, second and
passed.
4. OTHER: None
5. FUTURE AGENDA ITEMS:
6. NEXT MEETING: Tuesday, November 22 , 2011
Meeting adjourned 6:37 p.m.
COMMITTEE APPROVAL:
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Co ittee Chair
l
anne Burb dge
Committee Member
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Attest:
Steve Cain, Executive Assistant
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0M m4"Itee Member