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11/09/2010 Finance CommitteeFINANCE COMMITTEE MEETING MINUTES November 9, 2010 6:02 PM Present: Councilmember Buckshnis Council President Bernheim Councilmember Peterson Staff: Al Compaan, Chief of Police Phil Williams, Public Works Director Stephen Clifton, Community Services/Economic Development Director Carl Nelson, CIO Debra Sharp, Accountant Renee McRae, Recreation Manager Public: Joe Mclalwain, Executive Director, Edmonds Center for the Arts Steve Shelton, Vice President, ECA Board Jim Zachor, Prosecutor Melanie Thomas -Dane, Prosecutor Bruce Witenberg Ron Wambolt Roaer Hertrich Councilmember Buckshnis called the meeting to order at 6:02 PM. A. Edmonds Public Facilities District/Edmonds Center for the Arts Reauest for Citv Grant. Councilmember Peterson introduced the discussion, explaining the EPFD needs approximately $100,000 to cover the bond payment that is guaranteed by the City. He requested the Finance Committee consider all or part of the loan to be a grant so as not to add to the EPFD's existing debt, pointing out the City is a partner organization with the ECA and will be the eventual owner of building. Mr. Mclalwain explained the contingent loan agreement attached to the 2008 bond issue allows the EPFD to request a loan from the City. He will submit a Notice of Insufficiency tomorrow that describes what the EPFD owes and what it needs from the City. He described their successful fundraiser Saturday night and the opportunity to reduce the loan/grant if yearend results are better than expected. Councilmember Buckshnis thanked him for the financial information he provided and asked how this situation could be avoided in the future. Mr. Mclalwain described how the economy had impacted sales tax revenue and provided a list of potential future revenue options. Councilmember Peterson emphasized this was a request for capital funds, not operational funds. Councilmember Buckshnis suggested granting the EPFD a loan and after the budget is completed, determine whether there were funds available for a grant. B. Approve Contract for Professional Services - City of Edmonds Prosecutor. Police Chief Compaan introduced this item, explaining it was before the Finance Committee on October 12 and recommended for the October 19 Consent Agenda. It was pulled from the Consent Agenda and referred back to the Finance Committee. Prosecutors Jim Zachor and Melanie Thomas -Dane, Zachor Thomas, Inc., responded to questions. Ms. Thomas -Dane explained the increase is due primarily to additional time in court as a result of the increase in video in -custody calendars. Councilmember Buckshnis advised a survey she conducted Finance Committee Minutes, Page 2 revealed the costs are in line with other cities. It was agreed to forward the contract to the Consent Agenda. H. Interlocal Agreement with SNOCOM for Internet Access CIO Carl Nelson explained the City is currently connected to SNOCOM via fiber. SNOCOM approached the City about internet access and requested an Interlocal Agreement. The cost of the contract was discussed and Mr. Nelson explained the costs will go down over time. It was agreed to place the Interlocal Agreement on the Consent Agenda. J. Discussion of Mayor Discretionary Pay Increases for Vacant Positions This item was deferred to a future meeting. C. Edmonds Historical Museum Repairs Project Costs Public Works Director Phil Williams explained the City provided $100,000 to match a $48,000 grant from the Historic Preservation office. The base contract was $40,700; two contingency items related to foundation work and miscellaneous repairs brought the total project cost to approximately $56,700. The remaining funds are in the Facilities Construction Fund and could be used for other capital building needs. He recognized Facilities Maintenance Manager Jim Stevens for the great job he did managing the project. This item was forwarded to the Consent Agenda. F. Review City of Edmonds Draft 2011 Legislative Agenda Mr. Clifton reported this item was also reviewed by the other Council Committees: Councilmembers Fraley-Monillas and Peterson recommended striking Item #6, Red Light Cameras, and Councilmembers Petso and Peterson requested adding as a top priority support for Extending Sales and Use Tax Collection from 2027 to 2037 which would provide opportunity for the EPFD to refinance and reduce their annual debt. Councilmember Buckshnis requested the addition of State priorities from Watershed Health and Salmon Habitat Recovery Puget Sound priorities/WRIA 8 Partners. She agreed to send Mr. Clifton language to include in the Council packet. Mr. Clifton commented on the value of Mr. Doubleday's services. It was agreed to schedule the Legislative Agenda on the November 23 full Council agenda. D. Monthly General Fund Update This item was for information only. E. Third Quarter Budget Update Debra Sharp and Renee McRae responded to questions asked by Councilmember Buckshnis and Council President Bernheim and several additional questions were referred to staff for response. G. Review Remaining 2011 Budget Questions Council President Bernheim explained this was an opportunity to raise any remaining questions. Mr. Clifton explained directors are responding to the questions related to their department that were asked at the October 26 Council meeting and submitted via email. The answers are being released as questions are answered. The remaining questions will be highlighted at tomorrow's staff meeting with the goal of having all questions answered by the end of the week. Finance Committee Minutes, Page 3 Councilmember Buckshnis relayed Councilmember Petso's question about bonds that can be restructured. L Final 2010 Budaet Amendment Councilmembers reviewed the budget amendments and asked questions of staff. Councilmember Buckshnis requested exhibits be labeled with the date in addition to exhibit letter. Renee McRae was asked to prepare a memo regarding public donations made to support Yost Pool. It was agreed the new budget amendment format was an improvement. K. 2011 Hourly Employee Wage Schedule Renee McRae explained when the minimum wage increases, the other wages on the table also increase. This item was forwarded to the Consent Agenda. L. Discussion re_pardin_g a Policy for a General Fund Reserve Councilmember Buckshnis explained the Citizen Levy Committee has discussed establishing a policy. The Government Finance Officers Association standard is 1-2 months. The preliminary budget contains 2 months. She recommended establishing a policy of 1 month and described General Fund reserves in other cities. It was agreed to forward this to the full Council for further discussion in January/February 2011. M. 2011 Contract for Edmonds City Council Sr. Executive Assistant Council President Bernheim explained this is a continuation of the current contract, no COLA. The only change is an increase in carryover vacation credits. This item was forwarded to the Consent Agenda with a recommendation for approval. N. Public Comments (3-minute limit per person) Ron Wambolt, Edmonds, recommended making a decision regarding the General Fund reserve before the budget is finalized. With regard to the 2011 Hourly Employee Wage Schedule, he expressed concern that all wages were increased when minimum wage increased. He was also concerned that the budget report is only data and does not contain any narrative. He suggested the City prepare quarterly budgets as the quarterly budget reports do not reflect seasonality. He reiterated his question regarding why the 2011 budget is not compared to actuals and asked why the Mayor is no longer an employee in the 2011 budget. He expressed concern with the information provided by the Finance Department. Roger Hertrich, Edmonds, provided the following suggestions/questions: 1) add to the legislative agenda lobby for making marijuana criminal offenses an infraction, 2) the water/sewer fund should pay a portion of the drainage basin project in Hickman Park that was financed with REET funds, 3) did the City continue to collect the same rate after the bonds in the water/sewer fund are paid off, and 4) if bonds are refinanced, does the City continue to collect at the same rate. He summarized residents feel burdened by the increase in utility rates. He commended Ms. Sharp for the financial information she provided tonight. Adjournment — The meeting adjourned at 7:56 PM.