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Council MINS 03-03-1998 Special FEDERAL WAY CITY COUNCIL Council Chambers - City Hall SPECIAL MEETING FINANCE/ECONOMIC DEVELOPMENT /REGIONAL AFFAIRS COUNCIL COMMITTEE/COMMITTEE OF WHOLE March 3, 1998 - 5:15-6:30 p.m. MINUTES I. CALL MEETING TO ORDER Councilmember Gates, Chair of the Finance/Economic Development/Regional Affairs Committee, opened the special meeting of the Federal Way City Council Committee and Committee of Whole at the hour of 5:15 p.m., in Council Chambers, City Hall, Federal Way, Washington. Councilmembers present: Mayor Ron Gintz, Deputy Mayor Michael Park, Councilmembers Jeanne Burbidge, Jack Dovey, Mary Gates, Linda Kochmar, Phil Watkins. City Staff present: City Manager Kenneth E. Nyberg, Deputy City Manager Philip Keightley, City Attorney Londi Lindell, Directors Iwen Wang, Greg Moore, Jenny Schroder, Cary Roe, Chief Ron Wood, City Clerk Chris Green, Management Services Admin Assistant Marj Currie-Hicks. II. BUDGET POLICY REVIEW City Manager Nyberg reviewed the city's budget policies and budget balancing strategies in preparation of the 1999/2000 city budget. Mr. Nyberg and Management Services Director Iwen Wang responded to a variety of Council questions. Attached hereto, as Exhibit "Au, is a copy of Management Services Director lwen Wang's memorandum to Council dated February 27, 1998, outlining the issues covered in this session. III. ADJOURNMENT There being no further business to come before the Council, Councilmember Gates adjourned the special meeting of the Federal Way City Council Committee at 6:40 p.m. ~~Æ -ýj~ M3lJ C me-Hicks Management Services Admin Assistant II ORIGINAL CITY OF FEDERAL WAY MEMORANDUM Subject: February 27, 1998 Finance Economic Development and Regional Affairs Committee Iwen Wang, Management Services Director Review Budget Policies and Assumptions Date: To: From: Action Reauired Review and discuss (I) Budget Policies, and (2) Budget Balancing Strategies, and forward the same to full Council for consideration and action. The attached document is divided into these two sections and the areas Council has expressed interest in reviewing and/or discussing are identified for consideration. Backl!round Budget Policies: The City's Budget Policies are established by City Council to ensure the consistent application of philosophy, practice, and methods in the administration and allocation of the City's resources. They are important tools internally in establishing order and consistency, and externally in creating confidence in the bond market as we are a relatively young organization. These policies were initially established in 1991 and have been reviewed/revised each year as part of the budget plaruùng process. The review of this section will include a discussion of the four basic municipal functions; the structure and key elements of the existing policies, and the review of specific areas identified by the Council. Budget Balancing Strategies: The costs to provide municipal services have a tendency to escalate at a pace faster then revenue growth. Between 1991 to 1995, the City's general fund operating expenditures grew at an average of 9.4% per year and the revenue growth at 5.5% per year, compared to the 3% inflation rate. Part of the high expenditure growth rate is attributable to the startup nature during the first few years of cityhood. However, as the City approached the 1996 Budget, it become apparent that it must control the cost of municipal services so costs do not outpace revenues. To ensure our City functions at a sustainable level, a set of revenue increase and cost control strategies were instituted in 1995 for the 1996 budget year, and further adjustments were made during the 1997/98 Budget. In addition to staff reductions, the strategies called for reduction in funding for the Arts and Human Services programs and a switch trom the cost recovery principle to a total subsidy approach in funding parks and recreation programs. A number of activities were restored temporarily with one-time monies. These sections will review existing strategies; review items funded with one-time money, and review 1996 Council priority in allocating one-time funds. '" Next Steps: I. March 17 Council Committee of the Whole; Ifneeded, a follow-up FEDRAC discussion at its March 24 (or March 31, if rescheduled) meeting; and April 7 Council Committee of the Whole; 2. Final adoption on Council mini budget retreat on April 29. The City's management staffwill be available during these discussions for any clarification and to answer questions. II /J <', EXHIBIT /J ~'~""'m,,,~.,...,,:...