11/07/2011 Finance Committee MinutesFINANCE COMMITTEE MEETING MINUTES
November 7, 2011
Councilmembers Present
Councilmember Petso (arrived 6:04 p.m.)
Councilmember Buckshnis
Public Present
Ron Wambolt
John McGibbon
Bruce Witenberg
Harry Gatiens
Staff Present
Jim Tarte, Financial Consultant
Shawn Hunstock, Finance Director
Phil Williams, Public Works Director
Deb Sharp, Accountant
Carl Nelson, CIO
Rob English, City Engineer
Councilmember Buckshnis called the meeting to order at 6:01 p.m.
A. Authorization for the Mayor to Sipn Amendment No. 1 to the Facilities Lease between
the City of Edmonds and Clearwire LLC.
Mr. Williams explained Clearwire has a lease with the City to co -locate their communication facility on
the tower at the Five Corners reservoir and pump station property. The tower is owned by T-Mobile
and there are separate lease agreements with occupants on the tower as well as an overarching
lease with T-Mobile. The Clearwire lease is for 20 years with an initial 5-year term and the possibility
of three 5-year extensions subject to the City and Clearwire agreeing to terms. The terms the City
proposed and Clearwire accepted are the current lease of approximately $7,100/year, escalating
4%/year or CPI whichever is greater. He recommended the City Council approve the lease.
Action: Schedule on Consent.
B. Presentation of Study to Update the City's General Facilities Charges for Utilities by
City Staff and the FCS Group.
Mr. Williams explained the 2011 budget included a decision package for FCS Group to update the
General Facilities Charge (GFC) for utilities. The GFC is called a connection charge in the City's code.
The City's GFC has not been updated since 2001. Components of the GFC include, 1) prorated share
of past investments, and 2) CIP investments in the next planning horizon divided by the number of
customers. He provided the current and proposed GFC for each utility:
Utility Current
Proposed
Water $908
$5,050
Sewer $730
$4,417
Storm $428
$ 792
Action: Present to full Council.
C. General Fund Update — September 2011
Mr. Hunstock reviewed the General Fund update, highlighting revenue and expenses that are over
and under budget. Telephone Utility Tax continues to be below budget. Intergovernmental appears
high but the fourth quarter of most of the large quarterly payments have been paid. Mr. Tarte added a
narrative to the report. Mr. Hunstock recommended using a fund balance approach (the approach
used in audited financial statements) beginning in the first quarter of 2012.
Action: Information only.
11-07-11 Finance Committee Minutes, Page 2
D. 3rd Quarter Budaet Resort 2011
Mr. Hunstock explained the $22 million in General Fund revenue versus $24 million in expenditures is
due to fourth quarter payments that have been made and the second half of property taxes that have
not yet been received. He anticipated an approximately $600,000 surplus at year end. Mr. Tarte
recommended using some of surplus to fund the B Fund (Vehicle Replacement Fund) which was not
budgeted in 2011 and is not budgeted in 2012. Funding the B Fund can be included in the budget
amendment or a motion can made at Council to add it.
Discussion followed regarding other items that could be funded with the surplus, concern with funding
ongoing expenses with one-time revenue, funds that are below budget due to delayed receipt of
grants, the Firemen's Pension Fund, and LEOFF 1 medical expenses. Councilmembers requested the
report include fund numbers for interfund transfers.
Action: Information only.
E. Public Facilities District Bond Payment
Councilmember Petso explained information regarding the ECA bond payment was not provided by
ECA staff last Friday as she requested. The objective of review by the Finance Committee was to
approve the December bond payment and associated budget amendment on the Consent Agenda.
Without the amount the PFD is requesting, it will need to be scheduled as a presentation to Council.
Mr. Hunstock agreed to discuss this with ECA Executive Director Joe Mclalwain and schedule it on
the Consent Agenda or full Council.
Action: Schedule on Consent Agenda or as presentation to full Council.
F. Reserve Policy
Mr. Hunstock explained he has drafted a Reserve Policy and will provide it to Finance Committee
Members prior to the December Finance Committee meeting.
Action: Schedule on December Finance Committee agenda.
G. Investment Policy
Mr. Hunstock explained he has drafted an Investment Policy and will provide it to Finance Committee
Members prior to the December Finance Committee meeting.
Action: Schedule on December Finance Committee agenda.
H. Chan_pe Animal Benefit Fund to an Annual Appropriation.
Mr. Hunstock explained the Animal Benefit Fund will be closed out as a separate, designated fund
into the General Fund balance.
Action: Schedule on Consent Agenda.
L Eliminate Council Contingency Amount in the General Fund.
Mr. Hunstock explained the Council Contingency Fund was created via ordinance, making it a
designated fund balance in the General Fund. The $63,483 in the Council Contingency Fund will be
11-07-11 Finance Committee Minutes, Page 3
closed into the General Fund balance. There is an annual appropriation in the City Council budget for
contingencies.
Action: Schedule on Consent Agenda.
J. 2011 November Budget Amendment.
Ms. Sharp reviewed the budget amendment, highlighting amendments offset by grant revenue, and
amendments for traffic calming devices, fire hydrants, and merchant bankcard fees. She explained a
decision package in the 2012 budget would change the way the City accepts credit card payments
and the fees. Staff responded to Council questions regarding specific amendments.
Mr. Tarte observed this budget amendment totals $211,000; budget amendments may be higher in
November 2012 because the 2012 budget is so tight.
Action: Schedule as a presentation to full Council.
K. Update on Financial Policies and Reporting.
Councilmember Buckshnis offered examples to Mr. Hunstock.
Action: For information only.
L. 2012 Contract for Edmonds City Council Sr. Executive Assistant.
Committee members discussed consistency between wages/benefits in this employment contract and
non -represented employees and requested staff provide additional historical review of wages/benefits.
Action: Schedule on December Finance Committee meeting.
M. Authorization to Contract with James G. Murphy to Sell Surplus Vehicles.
Councilmembers agreed with the recommendation to authorizate Public Works to contract with James
G. Murphy to sell surplus city vehicles.
Action: Schedule on Consent Agenda.
N. Public Comments
John McGibbon, Edmonds, asked when information was needed from the ECA Executive Director
to allow review by the Finance Committee and approval on the Consent Agenda. Mr. Hunstock
answered the information needs to be received no later than Wednesday morning.
Ron Wambolt, Edmonds, inquired about the budget amendment for the purchase of the Karlsten
property. Councilmember Buckshnis answered it was in regard to a lawsuit on a home that has
flooded multiple times.
Adjournment —The meeting adjourned at 7:31 p.m.