FEDRAC MINUTES 03-22-20164% CITY OF
Federal Way
City Council
Finance /Economic Development /Regional Affairs Committee
Tuesday, March 22, 2016
Federal Way City Hall
4:30 p.m. SUMMARY MINUTES Hylebos Conference Room
CALL TO ORDER: Committee Chair Duclos called the meeting to order at 4:30 p.m.
COMMITTEE MEMBERS IN ATTENDANCE: Councilmember Honda and Councilmember
Moore (via teleconference at 4:36)
COMMITTEE MEMBER EXCUSED:
COUNCILMEMBERS IN ATTENDANCE: Deputy Mayor Burbidge, Councilmember Koppang,
Councilmember Aseffa- Dawson, Councilmember Maloney
STAFF MEMBERS IN ATTENDANCE: Finance Director, Ade Ariwoola; City Attorney, Amy Jo
Pearsall; Parks Director, John Hutton; Community Services Manager, Jeff Watson;
Community Development Director, Michael Morales; Economic Development Director, Tim
Johnson; PAEC Executive Director, Theresa Yvonne; Accounting Supervisor, Chase Donnelly;
Administrative Assistant, Robyn Buck
OTHERS PRESENT: Rich Shockley from SBDC
APPROVAL OF SUMMARY MINUTES: Motion to approve the February 23, 2016 minutes as
presented; motion seconded and carried 2 -0.
APPROVAL OF AGENDA: Committee Members agreed to the request to amend the agenda
by adding Item D1 and the Space University Initiative discussion under "Other Items ".
PUBLIC COMMENT:
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Contract with WA Department of Commerce for Day Center: Presented by Community
Services Manager, Jeff Watson.
Department of Commerce approved a $100,000 grant for the City of Federal Way Day
Center. In the 2015 legislative session, the Washington State Legislature appropriated the
$100,000 to be used in support of day and hygiene center services for homeless
populations. The Department of Commerce is providing these funds to the City of Federal
Way in the form of a grant to support the Federal Way Day Center and performance
evaluation of the project. The grant comes in $50,000 for 2016 (to be spent by June 30,
2016) and $50,000 for 2017 (to be spent by June 30, 2017). The intent is for the money to
be used for the cost of set up as well as evaluating performance, best practices and the
activities that take place at the center. A report will be made by the Day Center to the City.
It will then be submitted to the State. Councilmember Maloney asked if we are at risk of
not receiving these funds. The funds were appropriated in 2015, and therefore, included in
the State's budget. The city will not be responsible for subsidizing these funds. The City has
already appropriated an additional $100,000 to the Day Center. The City does not have the
same restrictions with the funds as the State does. Councilmember Duclos is concerned
about what this will do for those living in the community where the Day Center will be
located. Mr. Morales commented that there have been two meetings to address these
concerns and work on a plan to ensure minimal impact on the neighboring properties. Mr.
Morales encouraged those in the community to sit down with those that will operate the
Day Center and how Catholic Community Services addresses these types of issues. Code
enforcement will be making routine trips around the neighborhood where the Center is
located. There will be another meeting to establish protocols for addressing issues that
arise. Building plans have not been brought in as of yet. The Day Center's possible opening
may be in July.
Motion to approve and forward the Contract with WA Department of Commerce for Day
Center to the April 5, 2016 City Council agenda for approval; motion seconded and carried
3 -0.
Current Financial Policy Review: Presented by Finance Director, Ade Ariwoola.
The Finance Manual provides about 15% of the Financial Policy guidelines. The RCW and
BARS manual provide for certain things with a little more flexibility. The City can choose to
be stricter than the state, as they outline the minimum requirements /guidelines. Majority
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of our policies are in BARS manual and RCW. Mr. Ariwoola will create a cohesive manual
rather than piecing together the RCW, BARS and State guidelines.
No further action necessary.
Council Budget Report: Presented by Finance Director, Ade Ariwoola.
Mr. Ariwoola provided a sample report of what is provided to Management each month.
Councilmember Maloney inquired as to if the association dues are for Council or City. The
money is allocated for Council association dues. The Mayor's Recognition Award is the "left
over" from a different time and is an award for recognizing individual citizens. The name
can be changed. The Council retreat will be included in the budget amendment. Jeri -Lynn
Clark, Executive Assistant to Council, will distribute the monthly budget report to
Councilmembers. Councilmember Maloney would like to know if it is written in the RCWs if
the report can be broken down in to individual Councilmember's budget. City Attorney
Pearsall said that it can as long as the amount is allocated per position number, it would
not be a direct benefit. Mr. Ariwoola said that this is addressed at an internal
administrative level, not through the RCWs. This is an option that Council will have to
consider for themselves. Councilmember Koppang would like Councilmembers to have
flexibility with spending funds. Mr. Ariwoola stated that at the beginning of 2017 -18 budget
process, Council should have the conversation and determine how it fits in to the planning
process. Councilmember Koppang would like the left over money to be rolled over into the
next year. It could, if it is re- appropriated and put in the carry forward budget.
Addition to the agenda for discussion as Item 1131: Capital Budget Planning - 10 Year
Capital Replacement Plan: Presented by Finance Director, Ade Ariwoola.
Mr. Ariwoola presented a 10 Year Capital Replacement Plan update that shows what costs
will be up- coming. An averaging estimate of the costs is almost about one million per year.
The spreadsheet shows amounts and prioritization of items. Some of the costs are
estimated, but at least there is a target number. Fund balance reserve policy approved in
2014 includes a fund balance for some of these. Some fund balance requirements are only
$500,000. We still need to have the reserve for emergencies. This will be cleaned up before
the 2017 -18 budget process. The goal is to, in some degree, have it vetted and agreed upon
before we get into the operation budget. This will give us a capital budget, just like the
Street Fund.
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No further action necessary.
PAEC Quarterly Report: Presented by Finance Director, Ade Ariwoola.
Mr. Ariwoola presented a spread sheet the shows the project total from 2009 to present.
REET, Lift, UTax are all included in the total. The City has collected thus far, $350,000 out of
$369,000 from the 4 Culture Grant, $791,000 out of one million from private donations and
still working on the naming rights. Inter -fund loan, new market and tax credit, and bonding
will be a moving target. Interest earned will affect the total City funds and reducing the
Inter -fund loan. Expenditure section major item is the Garco Construction contract. We
have paid about 5 %, or 1.2 million, of the $24,150,000 contracted amount. Spending is not
moving fast because concrete needs to cure. Once that happens, spending will be faster.
Since we have started spending, we can quickly recoup the money spent by accessing grant
money. Councilmember Duclos inquired about the new market tax credits. Mr. Johnson
said that with the start of construction, it is better for us in regards to receiving new market
tax credits. Rental fee schedule has not been decided yet. We are still gathering
information as to the technical items going in to each room, which will help determine the
rental fee for specific rooms.
Councilmember Moore disconnected the phone call at 5:30 pm.
Ordinance: 2015 -16 Carry Forward Budget Adjustment: Presented by Finance Director,
Ade Ariwoola.
Exhibit C is the budget that was approved in December. Exhibit C(1) is what is being
proposed. Our beginning fund balance needs to be increased by $282,501 to $11,506,584.
We are adjusting our revenue by $760,802 increasing that to $46,436,079. Mr. Ariwoola
summarized Exhibits C and C(1) and explained how the carry forward monies are re-
appropriated and brought forward.
Motion to approve and forward the Ordinance: 2015 -16 Carry Forward Budget
Adjustment to the April 5, 2016 City Council agenda for the first reading; motion seconded
and carried 2 -0.
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SCORE Report: Presented by Finance Director, Ade Ariwoola.
Referring to page 44, the ADP is going down and so are all the other entities' ADP. By
lowering the ADP, we can greatly reduce costs, but if everyone else is reducing their ADPs,
then our cost reduction may not be as great as we thought it would be. The page 61 report
shows the non - member entities are being recruited aggressively. SCORE is managing the
Department of Correction (DOC), which pays the lowest. By recruiting new entities, we
ease out the DOC. Some of the new entities are still sending prisoners to Yakima because it
is still cheaper. The overtime cost has increased because there has been a lot of turnover at
SCORE. The overtime is to cover the "backfill" for training.
No further action necessary.
Monthly Financial Report — January and February 2016: Presented by Finance Director,
Ade Ariwoola.
Mr. Ariwoola summarized the Monthly Financial Report for January and February 2016.
Notable areas include:
• Page 71 - General and Street Funds are below our year to date by about $244,000 or
3.8 %. General Fund and Street Fund are reasonably doing well. Property tax is doing
reasonably well. The sales tax item to watch is the retail. For now, the major part of
our growth in sales tax is in construction. To see the economic change in the City, we
need to focus on retail. Retail is growing, but not as fast as construction.
• FWCC is doing well. Rental sessions are doing well. More seniors are coming in to the
center. Swimming is attracting youth. Wear and tear on the facility is important.
Right now, we are behind budget. Support from General fund and Utax is decreasing,
which is good. In terms of repair, we will have to figure out how we will fund that.
Councilmember Honda is concerned that we will have to subsidize the Public Health
Center as we have in the past. Mr. Ariwoola has not heard that this is the case for
2017 -18.
• UTax Rebates — We have not received very many so far this year. Councilmember
Honda would like to see more advertisement and reminders for seniors that the
deadline is approaching.
• REET— We will receive about $350,000 from the sale of the Weyerhaeuser property.
• Sales Tax is now over 6.4% over same time last year.
• Courts revenue is gradually coming back up.
• PAEC's annual budget not the same as the project budget.
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Motion to approve and forward the January and February 2016 Monthly Financial Report
to the April 5, 2016 consent agenda for approval; motion seconded and carried 2 -0.
Vouchers — January 2016: Presented by Finance Director, Ade Ariwoola.
No questions on vouchers.
Motion to approve and forward the January 2016 Vouchers to the April 5, 2016 consent
agenda for approval; motion seconded and carried 2 -0.
Vouchers — February 2016: Presented by Finance Director, Ade Ariwoola.
No questions on vouchers.
Motion to approve and forward the February 2016 Vouchers to the April 5, 2016 consent
agenda for approval; motion seconded and carried 2 -0.
Fourth Quarter and Year -End Report 2015, Small Business Development Center:
Presented by Economic Development Director, Tim Johnson and Rich Shockley, Director of
SBDC.
Mr. Johnson began his presentation regarding the contract to provide service through the
General Fund account and assistance through the CDBG program. This is a presentation of
the General Fund component by Rich Shockley. The center is at Highline Community
College. Every couple years, the SBDC contacts Dr. Christman. The Christman study verifies
the SBDC statewide results and has found that in 2014, for every one dollar invested; just
over $3.00 is recognized at the state and federal level as revenues. In 2015 (referencing
only the General Fund), SBDC served 67 businesses in Federal Way (existing, start -up and
pre- venture). The SBDC at Highline serves 30% retail and 40% service oriented businesses.
Small businesses was less than ten people. In Federal Way there are very few banks that
deploy loans for small businesses. SBDC is looking to increase that number as per the
Federal Community Re- Investment Act. It does not seem that the banks are living up to the
requirements of the Act. The State Regulatory Committee is looking for input from city
leaders regarding this issue.
No further action taken.
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State Audit on Tourism Enhancement Grant Report: Presented by Economic Development
Director, Tim Johnson.
For the first time, the State did an audit. Grants, events and close outs needed to be done
in the same year. That has all been cleaned up. The timelines are now within the same
year. LTAC will be bringing suggestions for the appropriation of grant money for July
through December. For every Grant dollar awarded, it created over nine dollars in leverage.
Almost 28,000 people participated in Tourism Enhancement Grant (TEG) funded events.
We typically average $60,000- $65,000 per year in Tourism Enhancement Grants. This year
will be much more because there are approximately 25 events planned as compared to 13
in 2015. Federal Way gets nearly one million tourists a year. Councilmembers Duclos and
Honda commented on the parking issues at the aquatic center. Mr. Johnson will bring
recommendations as to how to alleviate the parking problems to the next FEDRAC meeting.
No further action taken.
Other Items: Space University Initiative: Presented by Councilmember Maloney.
If Federal Way is not the city chosen to house the university, Councilmember Maloney is
concerned that our standing relationships with UW, WSU, etc. could jeopardize.
Councilmembers agree that this should be on the Council agenda to discuss and create a
resolution to act upon it. An RFP from the state will come out at the end of the month,
which Federal Way would have to be invited to submit a proposal. City Attorney Pearsall
suggests this item be put on the planning calendar for the second week in April.
Councilmembers agree that it would be a good idea let the Mayor know that they back the
Space University Initiative and that they would encourage him to continue to support it.
Motion to let the Mayor know that the FEDRAC Committee Members support the Space
University Initiative and would encourage him to continue to support it as well; motion
seconded and carried 2 -0.
NEXT MEETING: Tuesday, April 26, 2016 @ 4:30 p.m.
MEETING ADJOURNED: 6:48 p.m.
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