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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.