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FEDRAC MINUTES 10-22-19AiC:IV of S" Federal Way City Council Finance/Economic Development/Regional Affairs Committee Tuesday, October 22, 2019 4:30 p.m. SUMMARY MINUTES Federal Way City Hall Council Chambers CALL TO ORDER: Committee Chair Dini Duclos called the meeting to order at 4:33 p.m. COMMITTEE MEMBERS IN ATTENDANCE: Chair Duclos, Councilmember Assefa-Dawson; Councilmember Tran via conference call. COUNCILMEMBERS IN ATTENDANCE: Deputy Mayor Susan Honda STAFF MEMBERS IN ATTENDANCE: Accounting Manager, Chase Donnelly; City Attorney, Ryan Call; Community Relations Liaison/Contract Administrator, Autumn Gressett; Public Works Director, EJ Walsh; Parks Deputy Director, Steve Ikerd; Administrative Assistant II, Dana Almberg OTHERS PRESENT: Brian Hoffman, PAEC General Manager; Margaret Nelson, Federal Way citizen PUBLIC COMMENT: Margaret Nelson, Federal Way citizen. Ms. Nelson provided a written comment on the Federal Way School Impact Fees and feels that they can't meet the needs of the children. A. APPROVAL OF SUMMARY MINUTES —September 24, 2019 MEETING Motion made by Councilmember Assefa-Dawson to approve the minutes from September 24, 2019 as written; motion seconded by Councilmember Tran and carried 3-0. B. SURPLUS OF PUBLIC WORKS AND PARKS VEHICLES: Presented by Public Works Director, EJ Walsh. Director Walsh provided an overview of a request to transfer Public Works vehicle 8228-1 (a Ford 4x4 XL F150) to Parks in lieu of surplusing it and instead surplus Parks vehicle 121-1 (a 2004 Ford 4x2 F150). Truck 121-1 has had significant body and mechanical damage, is in need of substantial expensive repairs, and has continued to incur high maintenance and operations cost with no available reserves to replace it. The truck is still being utilized by the Parks Department. Staff is proposing to surplus Parks truck 121-1 and transfer Public Works truck 8228-1 to Parks. This will result in the same number of total vehicles as was previously approved by Council and no additional reserves will be collected for truck 8228-1. There was discussion on what vehicle 8228-1 is worth and the safety of the vehicle. Director Walsh stated we surplus vehicles through the State, they set the pricing. We would get anywhere between a thousand, to twenty-five hundred, it would mostly be used for parts. He confirmed the vehicle goes through annual Department of Transportation Safety inspections, Tuesday, October 22, 2019 Page 1 CIT Federal Way and that it has passed the inspections. Motion made by Chair Duclos to forward Option 1, to the November 5, 2019 consent agenda for approval; motion seconded by Councilmember Assefa-Dawson and carried 3-0. C. PAEC BUDGET UPDATE: Presented by Community Relations Liaison/Contract Administrator, Autumn Gressett and PAEC General Manager, Brian Hoffman. General Manager Hoffman stated that they are here to propose the 2020 Federal Way PAEC budget. There is some information in front of you, and this being Spectra's first process, they are looking for feedback and anything you can provide moving forward on how you would like to see this in the future. Councilmember Tran inquired as to what the $169,000.00 capital outlay is? Mr. Hoffman explained that approximately 95% is for a national marketing campaign. The marketing has typically been done event by event basis. What we are looking at is Spectra's resources and National/Regional event planners, small marquee meeting places and just advertise the building and the venue as a whole for PAEC. Councilmember Assefa-Dawson asked about the lineup for 2020. Mr. Hoffman stated that there isn't a lineup yet. They have been looking at historical data. Also, there is an increase of bookings for weddings and conferences at the PAEC. He feels we have a great facility and provide good customer service. We are giving people what they say they like to see. We are looking at feedback to make this a great entertainment facility for Federal Way. Deputy Mayor Honda asked some questions on how the PAEC does advertising. Mr. Hoffman discussed some of the options they are considering. She also wanted to know if there are any guidelines on who could potentially be a sponsor. Mr. Hoffman stated that as part of the contract, we vet those individuals or organizations, we want to make sure it is non -offensive and in good taste and overall concept and mission of the City and the PAEC. This item was for information/discussion purposes only. No action was taken. D. 2019-2020 BUDGET AMENDMENT ORDINANCE: Presented by Accounting Manager, Chase Donnelly. Accounting Manager Donnelly gave an overview of the 2019/2020 budget amendment ordinance. Public Hearings will be held November 5, 2019 and November 19, 2019, with a proposed enactment on December 3, 2019. Included in the packet are Exhibits A, B and C. Exhibit A is the original adopted budget ordinance, Exhibit B is the amended budget ordinance that was done in April and Exhibit C is the current proposed ordinance. The memo in the packet lays out some of the changes in the amended ordinance. Per RCW 35.34.130, the City must review and modify the budget by the end of the first year of the biennium. Exhibit C is the full exhibit with each of the individual funds. Per the fund balance reserve policy that was set by resolution 18-732 by Council. Each of the individual funds with the changes that have been made is in accordance with the reserve policy that Council has set. Tuesday, October 22, 2019 Page 2 CITY OF ,A� Federal Way Some of the changes that are being made as part of the ordinance are: 1 million dollars being used from REET, which can only be used on construction projects or to pay debt on construction projects ® 1 million dollars to pay down the PAEC inter -fund loan 0 PAEC $800,000 in 2020 as a subsidy for operations O Strategic reserve fund 0 Copper wire alarm system Some adjustments that have occurred in order to pay for some of these additions are increased Community Development revenue in 2019 by 1.3 million, projections are coming in higher that what was originally budgeted, that's offset though by a decrease in utility tax by $413 thousand in 2019 because the projections are coming in a bit lower due to the weather patterns for electricity and gas, as well as cell phones coming in a little lower. There was some clarification regarding the PAEC budget that was being asked. One area shows $1.071.417, and another shows $800,000. The PAEC staff would like clarification on the amount. Mr. Donnelly explained we are funding $800,000 out of the general fund as subsidy for the 2020 budget. Mr. Hoffman stated he doesn't want to fall short and have to come back to Council to ask for additional funding. Mr. Donnelly stated that we are starting with $800,000 as that is what we were able to fund in this adjustment to keep the required reserve fund balance policy. It was decided that the PAEC and Finance staff will talk to find a solution. Motion made by Councilmember Assefa-Dawson to hold a Public Hearing on November 5, 2019 and forward the proposed ordinance to the November 19, 2019 Council Meeting for first reading; motion seconded by Chair Duclos and carried 3-0. E. 2020 PROPERTY TAX LEVY ORDINANCE: Presented by Accounting Manager, Chase Donnelly. Accounting Manager Donnelly gave a brief overview of the proposed 2020 Property Tax Levy ordinance. There will be a public hearing on the 2020 proposed Property Tax Levy; it is based on the 1% increase limit plus new construction. Based on preliminary information from King County Assessor, this would result in a decrease in the tax rate from $0.97655 to approximately $0.93395 per $1,000 of assessed valuation. Motion made by Councilmember Assefa-Dawson to hold a Public Hearing on November 5, 2019 and forward the proposed ordinance to the November 19, 2019 Council Meeting for first reading; motion seconded by Chair Duclos and carried 3-0. F. VOUCHERS 09/16/2019 - 10/15/2019 AND PAYROLL VOUCHERS 09/01/2019 — 09/30/2019: Presented by Accounting Manager, Chase Donnelly. Accounting Manager Donnelly summarized vouchers for September 2019. Deputy Mayor Honda sent an email earlier today to inquire about a charge relating to a voucher that had three different vouchers for the same event on the same day. It was in regards to a conference where five people attended. Accounting Manager Donnelly stated that it's separate Tuesday, October 22, 2019 Page 3 ,ACITY OF � Federal Way line items that are split out for different types of registration. She also inquired who the five attendees were. Accounting Manager Donnelly didn't know off the top of his head but would do a follow up to her email. Motion made by Councilmember Tran to forward the September Vouchers to the November 5, 2019 consent agenda for approval; motion seconded by Councilmember Assefa-Dawson and carried 3-0. MONTHLY FINANCIAL REPORT — SEPTEMBER 2019: Presented by Accounting Manager Donnelly. Accounting Manager Donnelly summarized the September 2019 Monthly Financial Report. Notable areas include: • Community Development permits and fees: $1.2M above 2019 year-to-date budget and $1.3M above 2018 year-to-date collections. 0 Business License Fees: $20K below 2019 year-to-date budget, but $16K above 2018 year-to-date collections. (On October 3rd we went live with the State for Business Licensing) • Sales Tax: $605K above 2018 year-to-date actual and above 2019 year-to-date budget by 261K. • Utility Tax: Revenues received year-to-date as reported on the monthly financial report totals $7.4M and is below 2018 year-to-date actual and $619K below 2019 year-to-date budget. • Dumas Bay Centre: Ending fund balance is $1.69M with a required fund balance reserve policy of $1.5M. Motion made by Councilmember Assefa-Dawson to forward the September 2019 Monthly Financial Report to the November 5, 2019 consent agenda for approval; motion seconded by Councilmember Tran and carried 3-0. G. Score update: Presented by Accounting Manager Donnelly. Accounting Manager Donnelly gave a brief overview of the SCORE ADP (Average Daily Population). The ADP for the City of Federal Way continues to go down. The more it goes down, the more savings for Federal Way. This item was for information/discussion purposes only. No action was taken. OTHER: NEXT MEETING: Tuesday, November 26 @ 4:30 p.m. MEETING ADJOURNED: The meeting was adjourned at 5:20 p.m. Attest: Approved by Committee: Dana Almberg, Administrative 14ssistant II Date Tuesday, October 22, 2019 Page 4