FEDRAC MINUTES 07-26-2016CITY OF
„
Federal Way
City Council
Finance /Economic Development /Regional Affairs Committee
Tuesday, July 26, 2016
4:30 p.m.
SUMMARY MINUTES
Federal Way City Hall
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
COMMITTEE MEMBER EXCUSED:
COUNCILMEMBERS IN ATTENDANCE: Deputy Mayor Burbidge, Councilmember Maloney
STAFF MEMBERS IN ATTENDANCE: Finance Director, Ade Ariwoola; Assistant City
Attorney, Ryan Call; Economic Development Director, Tim Johnson; Public Works Director,
Marwan Salloum; Deputy Public Works /Street Systems Manager, Desiree Winkler; IT
Manager, Thomas Fichtner; Accounting Supervisor, Chase Donnelly; Administrative
Assistant, Robyn Buck
OTHERS PRESENT: Diana Noble - Guillford, Gerald Knutzen
PUBLIC COMMENT: None
APPROVAL OF SUMMARY MINUTES: Motion to approve the June 28, 2016 minutes as
presented; motion seconded and carried 3 -0.
Councilmember Honda made a motion to amend the agenda by adding item F1, Historical
Society Funding as well as move items F1 and F respectively to the beginning of the agenda.
There was a consensus among Committee Members to amend the agenda.
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HISTORICAL SOCIETY FUNDING: Presented by Councilmember Maloney.
Councilmember Maloney would like to know if it would be advisable to bring to the entire
Council a proposal to add in to the budget an on- going, multi -year contract that would fund
the Historical Society for five, maybe ten years at $20,000 per year. This would make it
more efficient for the City because we would not have to annually review the requests.
Councilmember Maloney would like this included in the next budget cycle. Committee
Chair Duclos is in favor of bringing this to the Council. Mr. Ariwoola said that Council has
several community based organizations that we fund. He advises that the Historical Society
go through the same process as the other service providers. Revenue flow fluctuates and
with this type of commitment (multi -year contract), other entities would suffer cuts. Mr.
Ariwoola cautions the Committee to not promise funds that may not be there the next
year. Committee Chair Duclos states that the Historical Society should be treated
differently than human services nonprofits. Councilmember Honda asked about the
process that would be necessary for the historical society to go through to be funded. Mr.
Ariwoola recommends that the Historical Society submit a request and that would be
added to the budget discussion calendar. The City funded work to make sure the building
the Historical Society uses was up to code, City owned items stored in that building were
removed and are now stored elsewhere at a cost to the City. The Historical Society is
supported by the City with IT, building and landscape maintenance, and other financial
support. Mr. Ariwoola advised that Council include those items when they discuss the
amount of financial support for the Historical Society. Councilmember Moore thinks the
City can be more supportive and would like to see a more permanent structure (in regards
to funding) while being fiscally responsible. Councilmember Maloney would like a more
sustainable budget path for the Historical Society. Mr. Ariwoola suggested that a formal
funding agreement between the City and the Historical Society in exchange for the service
the Historical Society provides is an option. Mr. Call will speak with Chief of Staff Wilson
and Mayor Ferrell for direction. There is time to do this before the next budget cycle.
Motion to add an item for discussion regarding on going funding of the Federal Way
Historical Society to the August 9, 2016 City Council agenda; motion seconded and carried
3 -0.
POLICE FTES AND PROP 1: Presented by Finance Director, Ade Ariwoola.
Mr. Ariwoola referenced page 81 of the June MFR under Utility Taxes where it shows a
breakdown of funds specifically created to pay police FTEs. We are not expecting enough
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funds for Prop 1 in 2016 to fund these positions. It was anticipated that a transfer of
$641,000 from the General Utility Tax into Prop 1 would be needed. As of the end of June,
we have moved $621,000 into Prop 1. Councilmember Maloney was concerned about
language in the 2006 voters' pamphlet that there would be an additional eighteen officers
funded and paid for out of the Utility Tax. Both Councilmember Honda and Maloney are
concerned that what was promised to the citizens that is not being fulfilled, regardless of a
recession. Councilmember Maloney would like a plan to identify where the funds will come
from before we get too far into the budget cycle. Councilmember Honda would like more
information on Prop 1; what it means, how many positions there are, how we will get
there. Mr. Ariwoola reminded those present that if we increase the amount of funding for
Police FTEs, that money will have to come from another group that receives Prop 1 funding.
Committee Chair Duclos would like a study session and would also like a 5 year plan. Mr.
Ariwoola suggested that a pre and post Prop 1 position break down would make it easier
for Council to see the difference. Councilmember Maloney is concerned that there may be
a legal aspect to this because we are not fulfilling our requirements and if we have an
obligation to still meet the promise. Mr. Call replied that there is a difference between a
ballot measure and what Council actually took action on. A Proposition is not an authority
for Council to do something. We need to follow what Council actually took action on. It is a
policy issue, not a legal issue. Councilmember Maloney has requested the dollar amounts
spent on all police position FTEs since 2006. The information should consist of the same
components as when the FTEs were being paid out of the General Fund, including salary
and benefits. Deputy Mayor Burbidge acknowledged that there seemed to be confusion
over the issue and thought that perhaps this topic should be included in a budget study
ORDINANCE: LEVEL 3 COMMUNICATIONS, LLC FRANCHISE: Presented by Deputy Public
Works /Street Systems Manager, Desiree Winkler.
This is a renewal of an existing franchise agreement. Level 3 Communications purchased
WilTel Communications earlier this year and assumed all of WilTel's facilities. The term is
for ten years and they will pay us up $1,000 to recover some of our administrative
expenses.
Motion to forward this Ordinance to the August 9, 2016 City Council agenda for the First
Reading; motion seconded and carried 3 -0.
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SELECTRON IVR UPGRADE AGREEMENT: Presented by IT Manager, Thomas Fichtner.
This is our current system for contractors to call in to schedule inspections and get
information on said inspections. The current system is on a Windows 2000 server with
hardware from 2006. That is well beyond our typical seven year replacement cycle. The
system is in need of a hardware refresh and software upgrade. The plan is to get rid of the
hardware, virtualize it and put it on our cluster. This will eliminate the upgrade of an actual
server. The system is already integrated with and tied to the Amanda system. This
agreement is for professional services and a software upgrade. There is no additional
functionality with this upgrade.
Motion to approve and forward the proposed SELECTRON IVR UPGRADE to the August 9,
2016 City Council consent agenda for approval; motion seconded and carried 3 -0.
MONTHLY FINANCIAL REPORT - JUNE 2016: Presented by Finance Director, Ade Ariwoola.
Mr. Ariwoola summarized the Monthly Financial Report for June 2016. Notable areas
include:
• Park and General Recreation - Is doing reasonably well because of some of the Senior
Citizen trips.
• UTax — Revenue has gone down due to weather.
• REET — Is doing well. Clarion hotel was sold for $8.9 m.
• Sales Tax- Modest growth, 15% is coming from construction.
• Dumas Bay — Doing really well. Revenue has exceeded 2015 actual revenue by
$102,000 spending has exceeded 2015 actual by $50k.
• Probation Revenue — Council brought the probation service in- house. That is part of
why the revenue has gone up, but we have also added staff.
• Court Revenue — Additional revenue from traffic infractions (does not include red
light), these are the infractions that go to court.
Councilmember Honda would like to know if we are still paying overtime to officers
because of the homicides. Mr. Call said those officers are not working as many overtime
hours. Some of the officers were moved from traffic to help and have since moved back.
Committee Chair Duclos would like to know if the red light and school zone cameras are
reducing accidents. Mr. Call commented that the cameras are dramatically reducing
accidents. Committee Chair Duclos would like that information reported to the public.
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Motion to approve and forward the June 2016 Monthly Financial Report to the August 9,
2016 consent agenda for approval; motion seconded and carried 3 -0.
VOUCHERS —JUNE 2016: Presented by Finance Director, Ade Ariwoola.
There were no questions or comments on the vouchers.
Motion to approve and forward the June 2016 Vouchers to the August 9, 2016 consent
agenda for approval; motion seconded and carried 3 -0.
SCORE QUARTERLY REPORT: Presented by Finance Director, Ade Ariwoola.
Mr. Ariwoola reported that our ADP is down. There were no other questions or comments.
No further action taken.
PAEC QUARTERLY REPORT: Presented by Finance Director, Ade Ariwoola.
We had $14.7m in cash and have spent $9.7m of that leaving a balance of about $5m. The
entire $2m from the 4 Culture Grant amount has been collected. Since the end of June, we
have collected $1.29m out of the $4m grant from the State. Mr. Ariwoola is putting
together a report to bill the State another $1.2m. Mr. Ariwoola is using the grant money
first before using the Inter Fund Loan. Councilmember Honda would like to know how short
we are. If we do not get the New Market Tax Credit, we will need to draw on the Inter Fund
Loan or possibly need a bond. Mr. Johnson said we are waiting for a Nov /Dec
announcement for NMTC. We are looking for syndicated award of $20m, which would net
us around $7.9m. The naming rights amount estimate, approximately $3.5m, left in the
Capital Stack. There may be a possibility in August that we may need to request what we
can justify out of the $3.030m CDBG loan. Once we do that, re- payment would need to
begin one year from the draw. There will be less requirements on the project if we do not
need to use CDBG.
No further action taken.
ECONOMIC DEVELOPMENT REPORT: Presented by Economic Development Director, Tim
Johnson.
New companies in Federal Way include Jazzercise, Humana Clinic, I Love Kick Boxing, DOL is
moving their office into the City Center Plaza. Mod pizza is still working on their permit
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application. There are construction blackout dates in October through part of January at
that center. There will not be any new construction there until 2017. At the Pavilion Center,
CityMD is taking over the old Arby's. This should be finished sometime this Fall. Cafe Rio
opened up. Clarion sold for $8.9m. Mr. Johnson was working on luring Linkedln into FW.
However, Microsoft purchased Linkedln and the assumption is that they will not come to
Federal Way. Most likely, they are going to Redmond, Kirkland, Bellevue area. A storage
facility is going in to the old Albertsons building. The Metro Market still has ten years left
on their lease. They are looking for a big box store to fill the building. Federal Way has
sixteen storage facilities which do not bring in any jobs or much tax money into Federal
Way. There is no contract at this time for the Hagen site.
OTHER
• Parking Garage: The PAEC has 700 seats, the LIFT money can be used for
infrastructure downtown. If we do not use it, we lose it. There will be a huge need
for a parking garage in downtown and we may be able to tap into LIFT to finance it.
The revenue for leasing the space for the hotel will be used to match the LIFT funds.
The proceeds from LIFT can be used to service the debt if we have to use it.
Councilmember Honda would like an economic forecast for 5 years.
NEXT MEETING: Tuesday, August 23, 2016 @ 4:30 p.m.
MEETING ADJOURNED: 6:25 p.m.
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