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FEDRAC MINS 04-24-2012zt CITY OF A, Federal Way City Council Finance /Economic Development /Regional Affairs Committee Tuesday, April 24, 2012 Federal Way City Hall 5:30 p.m. HYLEBOS ROOM SUMMARY 1. CALL TO ORDER: Chair Dini Duclos called the meeting to order at 5:32 PM. Committee Members in Attendance: Committee Member Freeman. Committee Members Absent: Committee Member Celski (excused) Councilmembers in Attendance: Councilmember Honda, Councilmember Kochmar, Councilmember Burbidge Staff Members In Attendance: Finance Director Tho Kraus, City Attorney Pat Richardson, CED Director Patrick Doherty, Community Services Manager Jay Bennett and Executive Assistant Brook Lindquist. 2. PUBLIC COMMENT: None. 3. COMMITTEE BUSINESS Topic Title /Description Council Placement A. Approval of Minutes: March 22, 2011 N/A Discussion Only Committee Member Freeman moved to approve as presented. Chair Duclos second. Motion Carried 2 - 0. B. Spring 2012 Tourism Enhancement Grant Awards Consent 05/01/2012 CED Director Doherty passed out the applications and LTAC Sub - Committee scoring sheets to the Committee Members. Community Services Manager Bennett gave the Committee a summary of the Tourism Enhancement Grant (TEG) event and non -event applications. There were 6 event applications and 2 non -event applications received by the LTAC Committee. There are two rounds of funding; Spring and Fall for a total of $40,000. The Sub - Committee met with each of the applicants to discuss their applications. They discussed budgets, their impact for tourism, and asked questions. The Sub - Committee then forwarded the recommendations to the LTAC Committee. CED Director Doherty clarified some points around the Farmers Market recommendation and discussed the requirement for being a 501 c3. The Tacoma South Sound Sports proposed a membership and the Sub - Committee recommended not funding a membership at this time for a group that promotes Pierce County events. Committee Members asked about the purpose of the TEG funding in regards to bringing people to the city. They wanted to know if the Sub - Committee looks at these numbers. CED Director Doherty stated the criterion that was used takes this into account. Committee Members had concerns about whether or not the Slavic festival would indeed bring people who would spend money in the community. Chair Duclos would like to see a community -wide event instead events only focused on one section of the community. There was discussion about establishing an event committee to help further some of these community festival ideas. The discussion centered on establishing a large community festival that could bring all the diverse communities together. There was discussion on having a LTAC event /festival planning sub - committee. Councilmember Burbidge stated this would be discussed at the next LTAC meeting. FEDRAC SUMMARY April 24,201 Page 2 Committee Member Freeman moved approval of the 2012 TEG grants as written. Chair Duclos second. Motion carried 2 -0. - - - __ C. Funding for FW Farmers Market Run /Walk for Health Event Consent 05/01/2012 CED Director Doherty passed out a revised budget for the Federal Way Farmers Market Run /Walk. It will be held on August 11, 2012. The TEG Committee rejected the application since they are not a 501 c3. The LTAC Committee interviewed the group and asked questions about the budget. The event brochure /flyer was passed out to the Committee. LTAC Committee as a whole did recommend full funding for this application. Committee Members asked about where these funds were coming from. CED Director Doherty stated it is coming from the main LTAC budget. He discussed the 2012 LTAC budget. Committee Members asked about the timing system. Karla stated the previous budget included a purchase of the timing equipment. They decided that it was too much to take on in the first year so they are renting the equipment. Committee Members questioned the amount budgeted for Police assistance. CED Director Doherty clarified that PD has been asked but unless Council approves the PD costs, the costs would need to be passed onto the Farmers Market. There was discussion on the proposed route. The route will be on the BPA trail and will cross 1st Avenue. Karla stated 1st Avenue wouldn't have to be closed as the runners would be released in waves. They discussed traffic interruption and public signage to educate citizens about the traffic issues. Karla mentioned this will be a certified race. Committee Members asked what the participant goal was for the run. Karla mentioned the budget is based on 300 but they would like to see 500 runners. Committee Members wondered what World Vision, the USO, and Boys and Girls Club roles were. Karla mentioned they will be partners and will help advertise the event. Chair Duclos asked if they had letters of commitment from these groups. Karla stated they do not but they are working on getting these from the non - profits. Chair Duclos stated this may be pulled from consent at the City Council Meeting and would like to have Karla there. Committee Members inquired about the race fees for students. The lowest fee is $15.00 for student runners. Committee Members would like to see young people in the run with an enticement for them to run and participate. Chair Duclos moved approval to forward this to City Council Business under the May 1, 2012 for discussion. Committee Member Freeman second. Motion carried 2 -0. D. Banking Services Contract Consent 05/01 /2012 Finance Director Kraus stated the City's current banking services contract with Bank of America expires on June 30, 2012. To make sure the City is getting services at a good price, an RFP was issued on February 22 ^d . Seven proposals were received on March 21 St from Bank of America, Banner Bank, Columbia Bank, Key Bank, Umpqua Bank, US Bank and Wells Fargo. The proposals were evaluated based on 50% price, 40% ability and history and 10% responsiveness. Key Bank was selected based on lowest price and ability to meet the City's banking needs. The City will compensate Key Bank through a combination of fees and interest earned in the account. Committee Members inquired about a breakdown of the proposal numbers. Finance Director Kraus provided those details. There was discussion on the interest rate and whether or not the interest rate will be throughout the life of the contract. Finance Director Kraus indicated the interest rate will be at least .75% during the life of the FEDRAC SUMMARY April 24, 2012 Page 3 contract. Committee Members inquired about whether or not the City is required to have a local banking presence. Finance Director Kraus stated the City is required to have a local bank for deposits. There was discussion on if any Washington banks were included in the RFP. There were two local banks who applied to the RFP. Committee Members inquired on why the banking services contract is for four years. Finance Director Kraus stated that 4 years is a good length for a contract and there are costs associated with switching banks. She stated there is a lot of work done during the transition. Committee Member Freeman moved option 1. Chair Duclos second. Motion carried 2 -0. E. Monthly Financial Report Consent 05/01/2012 Finance Director Kraus updated the Committee on the March 2012 Financial Report. The summary was as follows: March's report includes the 2012 Carry- Forward Budget Adjustment which Council approved on 3/20/12. General & Street Fund Summary - Page 39 ■ Revenues exceed budget by $93K or 1 % with major variances in: o Above Budget: ■ $59K property tax ■ $32K criminal justice sales tax ■ $168K building permits & fees ■ $12K ROW permits & development fees ■ $32K miscellaneous /other o Below Budget: ■ $61 K sales tax ■ $33K intergovernmental (liquor profits down $46K, fuel tax down $14K) ■ $19K court revenue ■ $37K gambling tax (card room closure) ■ $25K general recreation ■ $28K police services ($17K animal licenses, $11 K timing of Commons contracted security) ■ Expenditures are below budget $1.24M or 12 %. • One -time programs not yet spent • Timing of payments • Some will be true savings Property Tax • YTD 2012 revenue is above budget by $59K or 15% • YTD 2012 revenue exceeds YTD 2011 by $70K or 19% Sales Tax - Pages 41 & 42 • YTD 2012 revenue is below YTD budget by $61 K or 2.2% • YTD 2012 revenue is below YTD 2011 by $12K or 0.4% • Estimated 2012 sales tax $10.6M to come in $272K or 2.5% below 2011 actual • YTD 2012 Compared to YTD 2011 by Category: o Retail Trade down $26K ■ $9K decrease from electronics & appliance store ■ $7K decrease from book store closure FEDRAC SUMMARY And 24, 2012 Page 4 • $9K decrease from major discount retailer • $4K decrease from general merchandise retailer in the Commons • $7K decrease from computer store • $4K decrease from restaurant closure • $12K increase from auto sales • $2K increase from video game store Services up $16K • $19K decrease from amusement park reporting under real estate & overall decrease • $6K decrease from technology companies • $25K increase result of 2004 -2008 audit from casino that has since closed • $9K increase from other restaurants /drinking places • $6K increase from hospital • Construction - No change • Wholesaling up $6K • $17K decrease from sale of fire truck in 2011 • $22K increase from computer /software computer • Information down $6K • Overall decrease in cellular /phone from various vendors • Government down $14K • decrease from businesses that did not provide their SIC code • Finance /Insurance /Real Estate up $11 K • $12K increase from amusement park changing reporting from services to real estate category • $8K decrease from credit union incorrectly reporting to City in 2008 & 2009 (deduct in 2012) • $4K increase in credit intermediation companies • $3K increase in rental and leasing services ■ YTD 2012 Compared to YTD 2011 by Area: o S 348th Retail Block up $3K ■ $4K decrease from electronics & appliance store ■ $5K increase from building & garden center ■ $1 K increase from wholesale business o The Commons down $18K • $8K decrease from book store closure • $6K decrease from major general merchandise retailers • $4K decrease from other stores o S 312th to S 316th down $11 K • $9K decrease from discount retailer • $2K decrease from automotive parts o Pavilion Center down $8K • $9K decrease from electronics & appliance store • $2K decrease from video rental store closure • $2K increase from book store FEDRAC SUMMARY April 24, 2012 Page 5 As Reported in Monthly Financial Report: LOCAL RETAIL SALES TAX HE - BYMONTH Month 2011 2012 Change from 2011 2012 Actual vs Bud Actual Budget Actual $ % $ % Jan $ 818,614 $ 831,802 $ 896,190 $ 77,576 9.5 1 / 1 . $ 64,388 Jan Feb 1,153,192 1,163,241 1,022,314 (130,878) -11.3% (140,927) -1: Mar 751,420 777,655 792,916 41,496 5.5% 15,261 -: YTD Total $ 2,723,231 $ 2,772,699 $ 2,711,420 $ (11,810) -0.4% $ (61,279) 5.5% Revised Table (reflect correction for DOR error in reducing February's sales tax by $59K for construction project and returning it in March): LOCAL RErAIL SALES TA REVENUES -BY MONTH Month 2011 2012 Change from 2011 2012 Actual vs Bud Actual Budget Actual $ % $ % Jan $ 818,614 $ 831,802 $ 896,190 $ 77,576 9.5% $ 64,388 Jan Feb 1,153,192 1,163,241 1,081,612 (71,580) -6.2% (81,629) - Mar 751,420 777,655 733,618 (17,802) -2.4% (44,037) -: YTD Total $ 2,723,231 1 $ 2,772,699 $ 2,711,420 1 $ (11,810) -0.4% $ (61,279) 5.5% Preliminary Sales Tax - YTD April: • April 2012 vs April 2011 • In June 2010 the City received $79K in additional sales tax as result of State use tax audit • In April 2012 the City sales tax was reduced by $67K as a result of the business being to prove use tax was paid Utility Tax - Pages 42 & 43 • YTD 2012 revenues total $3.7M • Below YTD 2011 by $48K or 1.3% • Above YTD budget by $12K or 0.3% • YTD 2012 Compared to YTD 2011, down $48K with major variances in: • Electricity - down $8K or 0.5% • Gas down - down $14K or 1.8% • Phone - down $12K or 4.4% • Cellular - down $24K or 3.5% 2012 budget of $12.4M is $648K or 5% less than 2011 actual (3% decrease from 2011 budget) o Projected phone to decrease by 15% and cellular by 5% REET - Page 44 • YTD 2012 revenues of $215K is: _ o Be low YTD 2011 by $359K or 63% LOCAL RETAIL SALES TAX REVENUES Year -to -date thru April Month 2011 2012 Favorablel( Unfavorable ) Change from 2011 2012 Actual vs Budget Actual Budget Actual $ % $ % Jan $ 818,614 $ 831,802 $ 896,190 $ 77,576 9.5% $ 64,388 7.7% Feb 1,153,192 1,163,241 1,022,314 (130,878) - 11.3% (140,927) - 12.1% Mar 751,420 1 777,655 792,916 41,496 5.5% 15,260 2.0% Apr 805,675 1 796,086 742,615 (63,060) 1 -7.8% (53,470) -6.7% TT otal $ 3,528,906 1 $ 3,568,785 $ 3,454,036 $ (74,871) -2.1% S (114,749) Utility Tax - Pages 42 & 43 • YTD 2012 revenues total $3.7M • Below YTD 2011 by $48K or 1.3% • Above YTD budget by $12K or 0.3% • YTD 2012 Compared to YTD 2011, down $48K with major variances in: • Electricity - down $8K or 0.5% • Gas down - down $14K or 1.8% • Phone - down $12K or 4.4% • Cellular - down $24K or 3.5% 2012 budget of $12.4M is $648K or 5% less than 2011 actual (3% decrease from 2011 budget) o Projected phone to decrease by 15% and cellular by 5% REET - Page 44 • YTD 2012 revenues of $215K is: _ o Be low YTD 2011 by $359K or 63% FEDRAC SUMMARY April 24, 2012 Page 6 o Below YTD Budget by $248K or 53% ■ 2012 estimate is $1.4M, consistent with 2009, 2010 and 2011 revenue collections of $1.4M to $1.5M ■ YTD Significant Transactions: o 2012: Lowe's Home Improvement (sold for $5M / $25K tax) The View at Redondo Apartments (sold for $5.1 M / $25K tax) o 2011: Palisades Apartment (sold for $67.5M / $334K tax) Woodmark Retirement (sold for $9.2M / $45K tax) Vacant Business Building (sold for $4.4M / $22K tax) Vacant Lot (sold for $2.OM / $1 OK tax) Gambling Tax - Paae 44 ■ YTD 2012 revenue totals $64K: • Below budget by $37K or 36% • Below YTD 2011 by $61 K or 49% • Major card room closed January 2012 o The $468K annual revenue reduced by $300K resulting in a revised gambling tax estimate of $168K Police Overtime - Paae 46 ■ YTD 2012 Non - billable overtime of $168K • Exceeds YTD 2011 by $5K or 3% • On target with YTD budget • Police Department is aware and are monitoring /managing overtime Jail Services - Paae 46 ■ 2012 Total budget of $2,937K and is comprised of: • M &O = $1,830K • Debt = $525K • Reserves = $582K o 2011 total cost of $4,304K includes $1,621K one -time SCORE start-up and transition costs • YTD payment of $50K is for Non -SCORE jail service providers during the transition to SCORE and jail alternative costs. • Favorable variance of $445K compared to budget is due to delay in SCORE assessments during 1 Sr quarter (timing of invoices), future invoices payments will be timely. • As of March 15f all inmates are housed at SCORE ■ SCORE Update - Making progress on marketing efforts Animal Services - Page 47 ■ 2012 Budget is comprised of $153K revenue and $330K expenditure for a net cost of $177K o Budgeted net cost is lower than the $400K - $500K estimated cost had City stayed w /King Co. ■ YTD 2012 license revenues total $15K • $15K or 52% below YTD 2011 • $36K or 70% below YTD Buda FEDRAC SUMMARY April 24, 2012 Page 7 o Savings in personnel and shelter ■ YTD 2012 expenditures total $54K • $7K or l l % below YTD 2011 • $30K or 36% below YTD budget • Savings in personnel and shelter ■ YTD 2012 net cost is $30K o $8K or 33% above YTD 2011 o $1 K or 2% above YTD budget Red Light Photo - Page 48 • Annual revenue estimate is $830K • YTD 2012 net revenues total $375K • $59K or 19% above YTD 2011 • Increase is due to improving safety in the school zones Court Revenue.- Page 49 • Annual revenue estimate $1.5M • YTD 2012 net revenues total $392K • $17K or 4% below YTD 2011 • $20K or 5% below budget ■ $11 K of the decrease is due to timing of shared court costs for judges' salary. General Recreation Programs - Page 50 • YTD 2012 revenues total $121 K and is below YTD 2011 by $25K or 17% • Decrease primarily in Adult Athletics program o Down $17K due to timing of soccer league that started in March last year compared to April this year due to rain delays extending last season's schedule Federal Way Community Center- Page 51 ■ YTD 2012 Revenues total $428K • Exceeds YTD budget by $45K or 12% • Exceeds YTD 2011 by $27K or 7% o Continue to see shift from daily drop in to membership passes ■ Net increase of $28K compared to YTD budget ■ Net increase of $12K compared to YTD 2011 o Continue to see increase in fitness classes /fitness training (Silver Sneakers enrollment, specialty fitness training classes, personal training programs) ■ Increase of $6K compared to YTD budget ■ Similar to YTD 2011 o Youth Athletic Programs (Passholder P.E., Kidz Love Soccer, Basketball Life) ■ Increase of $5K compared to YTD budget ■ Increase of $3K compared to YTD 2011 o Rentals (Return of long -term meeting group and church rental clients, special event bookings) ■ Increase of $3K compared to YTD budget ■ Increase of $9K compared to YTD 2011 FEDRAC SUMMARY April 24, 2012 Page 8 ■ YTD 2012 Expenditures total $459K • Below YTD budget by $14K or 3% • Below YTD 2011 by $11 K or 2% Utility Tax Contribution • Reserves = Annual Budget $87K / YTD Actual $OK (Transfer from Utility Tax by year -end) • Operations = Annual Budget $619K / YTD Actual $31 K or 5% ■ Ending Fund Balance • End of Year Budget $992K / YTD Actual $936K • Reserved for capital maintenance and replacement Dumas Bay Centre - Paae 52 ■ YTD 2012 Revenues of $144K • Exceed YTD Budget by $31 K or 28% • Exceed YTD 2011 by $36K or 34% ■ YTD 2012 Expenditures of $147K • Below YTD Budget by $6K or 4% • Exceed YTD 2011 by $2K or I% ■ Ending Fund Balance • End of year Budget $OK / YTD Actual $225K • Roof repair and capital maintenance not all spent, any balances will roll over to 2013 Committee Members inquired on what Staff is doing to address ADP (average daily population). Finance Director Kraus stated she and others are working with SCORE on costs, the financial model and the marketing efforts. The Committee held a discussion on the marketing efforts at SCORE. Committee Members inquired about revenue projections. They would like to see a few paragraphs or an article in the paper in regards to educating people on where their money is going to. Discussion on why we call out Animal Services in the budget. Tho stated that a new program has more interest at first and so information is included. Committee Members also wanted to make sure Police give information about pet licensing when making a contact in the community or at a call. They would like to see a licensing event or enticements to license their animals. Committee Members inquired on why the red light photo program shows an increase. Finance Director Kraus stated this is due to the Panther Lake school zone and school crossing zones. Committee Members inquired on when the wedding pavilion /landscaping would be completed at the Federal Way Community Center. Finance Director Kraus stated that she believes the project is on hold. Committee Members stated this is a big investment. Committee Member Freeman moved approval to May l st consent agenda for approval. Chair Duclos second. Motion carried 2 -0. F. Vouchers Committee Members liked new format that was presented. Chair Duclos moved adoption. Consent 05/03/2011 Committee Member Freeman second. Motion carried 2 -0. FEDRAC SUMMARY AAgril 24,201 Page 9 4. OTHER: None 5. FUTURE AGENDA ITEMS: 6. NEXT MEETING: Tuesday, May 22, 2012 Meeting adjourned at 6:53 p.m. COMMITTEE APPROVAL: Dini Duclos Committee Chair Attest: — �M� Brook Lindquist, Executive Assistant Roger Freeman Committee Member ww' �� Bob Celski Committee Member