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FEDRAC MINS 06-26-2012CITY OF Federal Way City Council FINANCE/ECONOMIC DEVELOPMENT/REGIONAL AFFAIRS COMMITTEE [FEDRACI Tuesday, June 26, 2012 5:30 p.m. Meeting Summary (Preliminary until approved) 1. CALL TO ORDER 2. PUBLIC COMMENT 3. COMMITTEE BUSINESS Federal Way City Hall Hylebos Room Action Topic Title/Description Presenter Page* or Discussion A. APPROVAL OF MINUTES: MAY 22, 2012 S. CAIN 2 Approval Committee B. ADDITIONAL FUNDING APPROVAL FOR SOLID WASTE AND RECYCLING 2012- R. VAN 18 Amend 2013 GRANT CYCLE ORSOW Resolution 11 -160 07/03 Council C. AMEND FEDERAL WAY REVISED CODE TITLE 2 TO CREATE THE COMMUNITY J. BENNETT 25 Ordinance DEVELOPMENT BLOCK GRANT LOAN REVIEW ADVISORY COMMITTEE 07/03 Council D. FUNDING FOR 2012 DESNA CUP AND FESTIVAL P. DOHERTY 32 Consent 07/03 Council -- E. — - — - -- - -- - -- ------------ - - - - -- ..- -- MAY 2012 MONTHLY FINANCIAL REPORT - - - -- T. KRAUS - -- 35 Consent 07/03 Council F. VOUCHERS T. KRAus 52 Consent 07/03 Council 'Additional materials may also be distributed for review /action during the meeting 4. OTHER: 5. FUTURE AGENDA ITEMS: 6. NEXT MEETING: Tuesday, July 24, 2012 Committee Members: City Staff: Din[ Duclos, Chair Tho Kraus, Finance Director 253 835 -2520 Roger Freeman Steve Cain, Executive Assistant 253 835 -2402 Bob Celski CITY OF FEDRAC June 26, 2012 Federal Way Page 2 of 8 1. CALL TO ORDER By: Councilmember Duclos Time: 5:32 p.m. Committee Members in attendance: Din! Duclos _x_ Roger Freeman _n_ Bob Celski —x- 13 notified Chair he would be late Other Council Members and /or elected officials in attendance: Councilmembers Jeanne Burbidge and Susan Honda City staff in attendance: Tho Kraus, Finance Director 253 835 -2520 Steve Cain, Executive Assistant 253 835 -2402 Pat Richardson, City Attorney 253 835 -2570 Brian Wilson, Chief of Police 253 835 -6711 Jay Bennett, Community Services Manager 253 835 -2650 Rob Van Orsow, Solid Waste /Recycling Coordinator, Public Works 253835-2770 Jeannette Brizendine, Recycling Project Manager, Public Works Patrick Doherty, Community & Economic Development Director 253 835 -2612 2. PUBLIC COMMENT None 3. COMMITTEE BUSINESS Chair noted that Councilmember Freeman would be late; meeting concluded before his arrival. A. APPROVAL OF MINUTES: SUMMARY OF MAY 22, 2012 MEETING S. CAIN 2 Action :18 Committee approval Discussion /Changes: Steve Cain, Executive Assistant 253 835 -2402 Motion: Councilmember Ceiski moves to accept the summary as presented, second and passed. CITY OF FEDRAC June 26, 2012 Federal Way Page 3 of 8 B. ADDITIONAL FUNDING APPROVAL FOR SOLID WASTE AND RECYCLING 2012- R. VAN ORSOW 18 Amend 2013 GRANT CYCLE :40 Resolution 11 -160 07/03 Council Discussion /Changes: Rob Van Orsow, Solid Waste /Recycling Coordinator, Public Works 253 835 -2770 Rob describes the additional grant money, the memorandum and amendment of Resolution 11 -610 for 2012 -13 recycling efforts in Federal Way Public Schools. Committee questions /discussion (included Councilmembers Honda and Burbidge): Additional $18K for school programs, projects, organization and waste management. Including scraps and recycling. Motion: Councilmember Celski moves Option 1, second and passed C. AMEND FEDERAL WAY REVISED CODE TITLE 2 TO CREATE THE COMMUNITY J. BENNETT 25 Ordinance DEVELOPMENT BLOCK GRANT LOAN REVIEW ADVISORY COMMITTEE 5:25 07/03 Council Discussion /Changes: Jay Bennett, Community Services Manager 253 835 -2650 Jay outlines proposed ordinance, language mirrors the recently passed procedure in the CDBG Commercial Loan and Commercial Exterior Improvement programs. Councilmember Honda would like the city to advertise for LRAC members in the Mirror, not just the City website, since it is a new committee. Jay said City Clerk will publish notice and that he had mentioned it to the Korean community, at their quarterly meeting. Councilmember Celski — Targeting loan officers or opening to citizens in general? Jay responds that we would like qualified people to advise committee but do not want only one lender represented. Ultimately, the Council will appoint the members. Discussion ensued about LRAC recommendations and where they go. Patrick Doherty addressed the question; LRAC will make recommendation on the loan. The recommendation will go to FEDRAC and be considered as a consent item. City Attorney Richardson explains that committees are not named in code because names can change. Council rules apply to what type of material goes to what committee. Attorney will add the following clarifying sentence to Agenda Bill: "The committee's recommendation will follow the process set out in Council Rule of Procedure 2.2(5)." Motion: Councilmember Celski moves to forward ordinance to first reading on 7/3, second and passed. D. FUNDING FOR 2012 DESNA CUP AND FESTIVAL P. DOHERTY 32 Consent 10:58 07/03 Council Discussion /Changes: Patrick Doherty, Community & Economic Development Director 253 835 -2612 Patrick describes Desna Cup and purpose. Organizers want the event to grow and include more participants. They submitted a proposal for $5,000 in lodging -tax funding and LTAC recommended $5K for advertising purposes. Future requests to go through the Tourism Enhancement Grant process. Weather was a challenge; the soccer field was in ok shape but the water from heavy rain drained off the field and presented the fans with some serious water problems. There was some dissention among the community groups and other events interfered with the attendance. Hopefully these issues will be overcome next year. Committee discussion. Question about effect on the budget; Patrick responds that there was $25K unallocated in the $190K budget. Mention of the budget moved the conversation to the other events, mainly the Aquatic Center and the diving trials. The attendance — 2297 — was an all -time record. Several related their experiences at the event, comments were positive. CITY OF FEDRAC June 26, 2012 Federal Way Page 4 of 8 Responding to a question of hotel occupancy, Patrick said hotels did well and were very happy with the events. Questioned on parking, Chief Wilson weighted in with comments on the parking, shuttles and traffic flow. Parking and traffic went very smoothly. He also mentioned the low criminal activity, saying that there were no thefts or auto break ins at hotels or venue. Presence of the Homeland Security vehicle sent a message that the security was serious. Patrick said we are looking at NCAA events every other year and the positive testimonials of the participants in the recent events will certainly help in acquiring future events. Because of competition around the country, the diving trials will probably not be available again for twelve years. A conversation about the advertising ensued; the banners were a big plus and are also possible for the sand sculpture event. It was noted that the banners are not necessarily single use, can change the dates. The buttons were in demand and garnered good comments; they were also covered in the budget. Motion: Councilmember Celski moves Option 1, second and passed E. MAY 2012 MONTHLY FINANCIAL REPORT T. KRAus 35 Consent 25:30 07/03 Council Discussion /Changes: Tho Kraus, Finance Director 253 835 -2520 Tho provided a handout of the highlights and discussed them: MAY 2012 MONTHLY FINANCIAL REPORT — HIGHLIGHTS General & Street Fund Summary — Page 36 • Revenues are above budget by $383K or 2.2% with major variances in: Above Budget: $173K property tax; $28K criminal justice sales tax; $234K building permits & fees; $27K right -of -way permits & development fees; $155K police services (timing of SRO contract) Below Budget: $157K sales tax; $20K intergovernmental; $23K gambling tax; $36K court revenue; $17K general recreation • Expenditures are below budget $1.43M or 8% (timing of payments, 1-time not spent, some true savings) Property Tax ■ Above YTD budget by $173K or 3.4% ■ Above YTD 2011 by $227K or 4.5% Sales Tax — Pages 38 & 39 ■ YTD 2012 revenue of $4.33M • Below YTD budget by $157K or 3.5% • Below YTD 2011 by $147K or 3.3% ■ May 2012 sales tax down $63K compared to May 2011 due to: • 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, the business proved use tax was paid ■ Projected 2012 annual sales tax is $10.61VI ($272K or 2.5% below 2011 actual) ■ YTD 2012 Compared to YTD 2011 by Category: o Retail down $3K or 0.1% ■ Up $47K - building/garden, furniture /home furnishings, motor vehicle /parts dealers, non -store retailers, health & personal care stores CITY OF FEDRAC June 26, 2012 Federal Way Page 5 of 8 ■ Down $50K clothing /accessories, electronics /appliances, food /beverage stores, general merchandise stores, sporting goods /hobby /books • Services down $46K or 4.7% ■ Up $53K— accommodation, food services /drinking places, personal /laundry, repair /maint ■ Down $99K —admin /support services, health care /hospital, amusement, hospitals, technology, • Construction down $34K or 8.7% ■ Up $23K — building construction ■ Down $56K — heavy & civil construction • Information down $9K or 4.3% ■ Up $2K — Publishing ■ Down $11K— telecommunications, internet programs • Government down $71K or 64% ($59K is due to no amnesty payments) • Finance /Insurance /Real Estate up $8K or 8.9% ■ Up $18K— credit intermediation, real estate (amusement), rental /leasing ■ Down $10K— credit union audit Sales Tax Comparison by Area - YTD 2012 Compared to YTD 2011 by Area: • S348 th Retail Block down $2K (building materials & garden up, electronic & wholesale down) • The Commons down $29K (clothing & accessories, book store closure, general merchandise stores down) • S312 th to S3 16th down $12K (discount retailer down) • Pavilion Center down $7K (electronics & appliance down, video rental closed, bookstore increase) Utility Tax — Pages 39 & 40 • YTD 2012 revenues total $6.28M • Above YTD 2011 by $36K or 0.6% • Above YTD budget by $316K or 5.3% HOWEVER, includes timing differences of $156K. If the timing difference were taken into consideration: • Below YTD 2011 by $120K or 1.9% • Above YTD budget by $159K or 2.7% • YTD 2012 compared to YTD 2011 as shown on monthly financial report: • Electricity down $36K or 1.5% • Gas down $54K or 4.5% • Solid Waste up $10K or 3.1% • Cable down $1K or 0.2% • Phone up $19K or 4.2% due to receiving $28K timing difference ■ adjusted variance is a decrease of $9K or 2.1% • Cellular up $91K or 8.1% due to receiving $128K timing difference ■ adjusted variance is a decrease of $37K or 3.3% • Storm Drainage up $6K or 4.6% Projected 2012 revenues to come in $648K or 5.0% below 2011, with projected changes from 2011 as follows: • Electricity down $183K or 3.7% • Gas down $95K or 4.9% • Solid Waste up $29K or 3.7% • Cable down $7K or 0.S% • Phone down $229K or 21.5% • Cellular down $170K or 6.3% • Storm Drainage up $81K or 3.0% REET — Page 41 ■ YTD 2012 revenues of $400K is: • Below YTD 2011 by $306K or 43% • Below YTD Budget by $306K or 43% 2012 annual budget estimate of $1.4M is consistent with 2009, 2010 & 2011 revenues $1.4M to $1.5M. o Absent any significant transactions remainder of year, revenues likely to fall short of estimates CITY OF FEDRAC June 26, 2012 Federal Way Page 6 of 8 ■ No significant transaction in May ■ YTD Significant Transactions (sales price of $1M +): YTD 2012: YTD 2011: Centerpoint Management Inc (sold for $2.9M / $14K tax) Palisades Apartment (sold for $67.5M / $334K tax) Lowe's Home Improvement (sold for $5M / $25K tax) Woodmark Retirement (sold for $9.2M / $45K tax) The View at Redondo Apartments (sold for $5.1M / $25K tax) Vacant Business Building (sold for $4.4M / $22K tax) Office Building So 333`d (sold for $1.4M / $7K tax) Vacant Lot (sold for $2.OM / $10K tax) Garden Depot (sold for $15M / $7K tax) Animal Services — Page 44 ■ 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 $28K or 19% of annual license revenue estimate • Below YTD 2011 by $17K or 38% • Below YTD budget by $45K or 61% ■ YTD 2012 expenditures total $97K • Below YTD 2011 by $5K or 5% • Below YTD budget by $8K or 8% ■ YTD 2012 net cost is $63K • Above YTD 2011 by $10K or 19% • Above YTD budget by $31K or 99% Red Light Photo — Page 45 ■ YTD 2012 net revenues total $834K • Above YTD 2011 by $341K or 69% • Increase is due to improving safety in the school zones Court Revenue — Page 46 • Annual revenue estimate $1.5M • YTD 2012 net revenues total $640K • Below YTD 2011 by $32K or 5% • Below YTD budget by $36K or 5% • YTD 2012 vs YTD 2011 highlights: • Traffic & non - parking down $33K or 8$ • Criminal costs $12K down or 21% • Parking infractions down $7K or 29% • DUI & Misdemeanors up $11K or 37% Federal Way Community Center— Page 48 ■ YTD 2012 Revenues total $731K • Above YTD budget by $65K or 10% • Above YTD 2011 by $37K or 5% • Shift from daily drop in to membership passes ■ Net increase of $50K compared to YTD budget ■ Net increase of $22K compared to YTD 2011 o Fitness classes /fitness training (Silver Sneakers enrollment, specialty fitness training classes, personal training programs) ■ Increase of $13K compared to YTD budget ■ Increase of $4K compared to YTD 2011 o Youth Athletic Programs (Passholder P.E., Kidz Love Soccer, Basketball Life) ■ Increase of $6K compared to YTD budget ■ Increase of $21K compared to YTD 2011 • Aquatic Programs (Lessons) ■ Increase of $51K compared to YTD budget ■ Decrease of $1K compared to YTD 2011 • Rentals (Return of long -term meeting group and church rental clients, special event bookings) CITY of FEDRAC June 26, 2012 Federal Way Page 7 of 8 ■ Decrease of $5K compared to YTD budget ■ Increase of $8K compared to YTD 2011 YTD 2012 Expenditures total $835K • Above YTD budget by $10K or 1% • Above YTD 2011 by $15K or 2% • Increased instructor and program costs for various programs offset by increased revenue, • Incurred advertising costs in earlier in 2012 than in 2011 • Utility Tax Contribution • Reserves= Annual Budget $87K/ YTD Actual $OK (Transfer from Utility Tax by year -end) • Operations= Annual Budget $619K/YTD Actual $139K or 22% of budget • Ending Fund Balance (Reserved for capital maintenance & replacement) o End of Year Budget $992K/YTD Actual $934K Dumas Bay Centre — Page 49 ■ YTD 2012 Revenues of $257K • Above YTD Budget by $37K or 17% • Above YTD 2011 by $46K or 22% o Increase in number of larger retreats and use of in -house food service YTD 2012 Expenditures of $254K • Below YTD Budget by $22K or 8% • Below YTD 2011 by $7K or 2% YTD Operating Income is $3K • YTD budget anticipated $56K operating loss • YTD 2011 actual was $50K operating loss Ending Fund Balance • End of year Budget $OK / YTD Actual $223K • Roof repair and capital maintenance not all spent, any balances will roll over to 2013 Committee discussion: • Sales Tax • Tho mentions Councilmember Kochmar's question, from the last meeting, about the opening the Home Goods store but there are no tax reports yet. • Councilmember Burbidge asks about the status of Kohls. Tho has heard nothing further. Councilmember mentioned hearing Kohl's ad and thought it unusual. • Animal Services • Chair questioned if we had any number for the animal services. Chief said that his second animal control officer had completed training and he will be getting a better idea of the cost with the two full -time officers. • Discussion ensued about the 4th at Celebration Park and having license forms available. Though dogs are prohibited, people often bring them and it would be a good opportunity to have the animal services represented. • FWCC • Discussion of the distribution of funds - pay off bonds and portion to operating costs. Compliments to Cary Roe on the management. Comments on improving personnel organization, staffing issues. • Examined expenses — some incurred and paid earlier this year than 2011. • Dumas Bay Centre • Doing very well, • Chef offered cooking demonstration CITY OF FEDRAC June 26, 2012 ti Federal Way Page 8 of 8 • Follow up item: at last FEDRAC meeting, Councilmember Celski questioned $945K on downtown redevelopment. • Research showed that was a clerical error, actual expense was a little over $2,200; changing the ending balance from $1.26M to $2.2M. The error was corrected (with explanation) before it went to Council. Also noted as a budget positive was the control of the street funds. Motion: Councilmember Celski moves for approval and to forward to the July 3 Council, second and passed. F. VOUCHERS T. KRAUS 52 Consent 45:10 07/03 Council Discussion /Changes: Tho Kraus, Finance Director 253 835 -2520 Tho noted there wasn't anything out of the ordinary with the vouchers. Committee discussion: * *Councilmember Honda questions the Comcast payment on page 55, Tho will follow up on that. Councilmember Celski is curious about "Zebra" associated with check # 229860 - Police equipment - part of the police equipment upgrade. Chief comments on the equipment for new cars. Contribute to City of Auburn? - Grant from PSE for HVAC system and we split a technician with them and sent them their share. Motion: Councilmember Celski moves for approval and to forward to July 3 Council, second and passed. 4. OTHER: Chair polled members for planned attendance at August FEDRAC meeting. 5. FUTURE AGENDA ITEMS: 6. NEXT MEETING: Tuesday, July 24, 2012 Meeting adjourned 6:23 p.m. COMMITTEE APPROVAL: Committee Chair Roger Freeman Committee Member Attest: � ez �- Steve Cain, Executive Assistant 1� Committee Member