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07/12/2011 Finance Committee MinutesFINANCE COMMITTEE MEETING MINUTES July 12, 2011 Present: Councilmember Petso Councilmember Buckshnis Staff: Al Compaan, Police Chief Jim Tarte, Interim Finance Director Deb Sharp, Accountant Stephen Clifton, Community Services/Economic Development Director Public: Roger Hertrich Carla Nichols, Woodway Mayor Councilmember Petso called the meeting to order at 6:03 p.m. A. Authorization for Mayor to Sign a Professional Services Agreement with Beckwith Consultin_g Group for Strategic Plan Consulting Services. Community Services/Economic Development Director Stephen Clifton reviewed the draft professional services agreement with Beckwith Consulting Group and the scope of work that includes a timeline and time and materials schedule. He pointed out the addition of the Economic Development Commission's highest priority, "Community prioritization of services/capital/projects/initiatives" to task 13. According to the proposed timeline, Mr. Beckwith will meet with the EDC, Planning Board and the City Council on July 26. Due to vacations during the summer months, he recommended shifting the schedule approximately 1'/2 months and scheduling that meeting after Labor Day. Councilmember Petso inquired about updates to the Council while the strategic plan is underway. Mr. Clifton answered Task 1 includes creating a website and direct linkages to the City's website devoted to the planning process including pages with objectives, scope of work, schedules, email notifications and sign-up for continuous newsletter distributions. An additional benefit of shifting the process 1'/2 months is the launch of the City's new website that will have RSS feeds to provide notification of new information on the website. Mr. Clifton pointed out a budget amendment will be required to move funds for a portion of the project into 2012. Any proposal to exceed the budget will require his approval and he will seek approval from the Mayor and City Council. ACTION: Forward a recommendation for the July 19, 2011 Consent Agenda to authorize the Mayor to sign a Professional Services Agreement with Beckwith Consulting Group for Strategic Plan Consulting Services with a September 7, 2011 start date. B. Quarterly Report Regarding Fiber Optic Opportunities. This item was rescheduled on the August Finance Committee agenda. C. Police Services Contract — Town of Woodway Police Chief Compaan reported Woodway currently provides approximately 8 hours/day of police service via the use of off -duty Edmonds, Lynnwood and Mountlake Terrace officers. The remainder of the time, Edmonds provides primary and backup response. Under the current contract, the charge is $137.50 for one officer for an initial response; if additional officers are required, their hours are billed accordingly. Over the past 4 years, revenue from the contract with Woodway has been minimal, approximately $10,000-$11,000/year. 07-12-11 Finance Committee Minutes, Page 2 Chief Compaan provided a cost comparison between Edmonds, Woodway and Darrington. Darrington has a similar population to Woodway and contracts for police services with the Snohomish County Sheriff's Office. Edmonds Woodway Darrington Total AV $6.4 billion $471 million $139 million Cost of Police Service per $1000/AV $1.29 $0.34 $1.89 Per Capita Spending on Direct Police Budget $203 $132 $196 If Woodway paid the same $1.29 per $1000 of assessed valuation for direct police services as Edmonds, Woodway's budget would be $607,800/year. If Woodway paid the same $203 per capita as Edmonds, Woodway's budget for direct police services would be $243,600/year. For comparison, Woodway's 2011 Fire District 1 contract is approximately $432,000 based on a response rate of 50 calls per year. Edmonds' Police respond to Woodway approximately 80 times per year. Over the years the contract with Woodway has been looked at as being a good neighbor and it has not been an undue burden on Edmonds. However, Edmonds is effectively providing Woodway a 24/7 insurance policy with no premium and only collecting when there is a claim. The FD1 contract collects the premium whereas the police services contract does not. Chief Compaan advised there is no staff recommendation. The current contract extends through the end of 2012. There is an option in the contract to provide notice of termination. Councilmember Petso summarized an appropriate increase in the contract with Woodway would be at least $100,000/year. Woodway Mayor Nichols was surprised by the discussion, assuming Edmonds was considering an increase in the rate charged per response. She pointed out evaluating police coverage as if it was 24/7 coverage was a very different model. She assumed Darrington has commercial activity; Woodway is a community of single family homes. She was disappointed Edmonds viewed Woodway as a cash cow because Edmonds can provide police services to Woodway without any additional resources. She preferred to retain the current contract. ACTION: Schedule for full Council for information and consider directing the Mayor to contact Woodway regarding future contract costs. Councilmember Petso clarified the intent is not to terminate the contract or go to the full cost in 2012 but rather to put Woodway on notice that the contract will be renegotiated in the future with a minimum increase in the range of $100,000. Councilmembers requested the Town of Woodway Contract Activity and cost comparison sheets be provided to the full Council when this item is scheduled on the agenda. D. 2011 July Budget Amendment Accountant Deb Sharp explained this is the first budget amendment for 2011 and includes changing all the beginning balances to the yearend 2010 actuals. She highlighted other amendments related to items budgeted in 2010 and paid in 2011 and expenditures offset by grants. Interim Finance Director Jim Tarte summarized the total proposed budget amendment is $349,171 in a $32.3 million budget. Councilmember Buckshnis commended staff for the documentation provided. Councilmember Petso voiced concern with reports that utilize a cash accounting method and others that utilize a modified accrual method and a lengthy discussion ensued. Ms. Sharp and Mr. Tarte responded to questions regarding specific amendments. With regard to WCIA, Mr. Tarte explained the budget was off by approximately $200,000 because the wrong amount in WCIA's notification letter was budgeted. On another issue, he has requested a meeting with WCIA Executive Director to discuss a rebate because the insurance rate for the past two years was 07-12-11 Finance Committee Minutes, Page 3 calculated including Fire Department employees. He described the 2011 City Attorney budget and funds in the City Council Department that should be allocated to the City Attorney which will reduce the City Attorney budget amendment from $100,000 to $55,000. ACTION: Councilmembers Petso and Buckshnis meet with Mr. Tarte to discuss cash versus modified accrual accounting methods and then schedule the budget amendment for full Council. E. General Fund Update — June 2011 Mr. Tarte reviewed the General Fund update, highlighting several percentages: General Fund revenues 52%, property taxes 50%, and charges for services 57%. He summarized actual revenues are trending to budget; expenditures are at 47%. He pointed out the lower Snohomish County assessed value will affect EMS tax collection. He suggested future General Fund Updates include graphs for the top five funds. ACTION: Information only. F. 2„d Quarter Report 2011 Mr. Tarte reviewed the 2nd Quarter Report, highlighting REET which is 39% of budget. Councilmember Buckshnis asked about interest for the Public Safety Reserve and the Emergency Reserve. Ms. Sharp advised interest earned by the Emergency Reserve was deposited into the General Fund; interest earned by the Public Safety Reserve is deposited into that fund. Councilmember Petso observed the building maintenance fund was over budget. She recalled asking Public Works to provide Council a periodic Public Works Capital Update. Ms. Sharp advised the Senior Center roof repairs were budgeted in 2010 and work began in March 2011; a budget amendment will be done to move the funds into 2011. The project is funded by a grant. Councilmember Buckshnis suggested budget amendments be presented to the Finance Committee as they occur rather than just quarterly. ACTION: Information only. G. Update on Financial Policies and Reportin Councilmember Buckshnis suggested a reserve policy be created. She offered to provide Mukilteo's policy that has separate reserves for operating, economic/catastrophic, utilities, etc. Councilmember Petso suggested the policy include upper and lower limits. ACTION: Councilmember Buckshnis to confer with Public Works Director Phil Williams about establishing a utility capital reserve policy. H. Public Comments Roger Hertrich, Edmonds, referred to $460,000 for a study and right-of-way acquisition for the Five Corners roundabout and the $2,216,000 construction cost that has no funding source. He also questioned whether the City can afford the large expenditures budgeted for water/sewer and other public works projects. He inquired about cost overruns for the SR 524 walkway project and the 76th Avenue West/75th Place West walkway project. Councilmember Petso requested staff respond to her regarding the budget and actual costs for the SR 524 walkway, and the budget and expenditures to - date on the Haines Wharf project. She requested staff confer with the City Attorney before providing her the information. Adjournment —The meeting adjourned at 8:08 p.m.