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FC121421FINANCE COMMITTEE MEETING December 14, 2021 Elected Officials Participating Virtually Staff Participating Virtually Councilmember Vivian Olson Dave Turley, Finance Director Councilmember Diane Buckshnis Angie Feser, Parks, Rec., Cultural Arts, & Human Serv. Dir. Megan Menkveld, Assistant Finance Director Scott Passev. Citv Clerk CALL TO ORDER The Edmonds City Council virtual online Finance Committee meeting was called to order at 5:30 p.m. by Councilmember Buckshnis. 2. COMMITTEE BUSINESS 1. Marina Beach Park Renovation Proiect Grant Aareement Ms. Feser explained this is a recommendation to authorize the Mayor to sign two grant agreements with the Recreation and Conservation Office (RCO) of the State of Washington related to Marina Beach Park. The Marina Beach Park renovation was based on a master plan developed with a lot of community engagement culminating in adoption of the plan by the City Council in 2015. She reviewed: Grant application timeline o March 10-2020 — recommended by PPW Committee o March 17, 2020 — authorized by Council via resolution o June 2020 — grant submitted ■ July —technical review ■ September — presentation 0 2021 — successful awards in both grant programs ($500,000 each) o Ranked #1 ALEA (Aquatic Land Enhancement Account) o Funded in Local Parks category of WWRP program Next step is Council authorizing the Mayor to enter contract, committing the City to the grants and the project and providing additional funds for the project o Project was submitted with a cost estimate of $5 million in 2020 dollars o $1 million is provided by these grants o $750,000 from REET 125 o Outstanding balance $3.25 million ■ Parks Department will work on other grants and funding sources such as Park Impact Fees, REET funds, and other grant applications Map of Marina Beach o Graphic illustrating the existing City -owned marsh property and the connection between the two parcels. o Marina Beach Park project daylights a 1000 foot pipe connecting the marsh to Puget Sound. Edmonds Marsh and Unocal Property o Graphic illustrates the parcels and ownership. o City owns the bookend parcels and property between is owned by Chevron Services (aka Unocal). o Unocal site is currently being cleaned up and mitigated from the previous petroleum product use on the site 12/14/21 Finance Committee Minutes, Page 2 o Opportunity to combine the properties to create a complete marsh followed by a restoration project. Marina Beach is an important component o The railroad installed a bridge in Marina Beach Park which is a fixed point to connect the marsh water system Discussion followed regarding concern the narrative does not indicate that some Councilmember had reservations about authorizing the Mayor to sign the agreements and assurance it would come back to the Council, concern that accepting the grants commits the City to spending another $4 million on the Marina Beach project, concern much of the spending was not related to the ecosystem and was not a short term spending priority, preference for this to come to full Council and not on the Consent Agenda, concern with proceeding when the ownership of the Unocal property is unknown, the need to change the Comprehensive Plan because the Marina Beach project is not in compliance, support for a presentation to Council in 2022, nearshore estuary restorations a key component of the Governor's directives, and concern with dividing the project between Marina Beach and a floodplain project. Action: Presentation to full Council. 2. September 2021 Quarterly Financial Report 3. October 2021 Monthly Financial Report Mr. Turley reviewed noteworthy items • REET is up $1.7 million from this point in time last year • Real Persona/Property tax is up $98K from this point in time last year • EMS property tax is up $62K from this point in time last year • Sales Tax is up $1.8 million from this point in time last year • Plan Checking Fees are up $163K from this point in time last year; Development Services revenues overall are up $186K from this point in time last year • Parks & Recreation program fees are up $322K from this point in time last year • October of 2020 Engineering overhead was not recorded until Nov 202 which is the main reason for the large difference between years. Oct 2020 Engineering overhead totaled $185,680 • Now at 83% of the year completed; all departments are within or under budget. Discussed followed regarding investment strategies, differences in yields, inflation causing interest rates to increase, and debt service interest above budget. Action: Consent Agenda. 4. 2021 December Budget Amendment Mr. Turley explained there are four requests; more detailed information is contained in the Council packet. If approved, the budget amendment would increase forecast revenues by $8,773,456 and would increase budgeted expenditures by $2,739,009. Two of the amendments represent required transfers of budget authority from one fund to another, and two are to record the effects of the recent bond sale. There is no new cash outflow as a result of these entries. He reviewed the proposed 2021 December Budget Amendment requests: • Allocates the Council -approved ARPA funds spending to the funds where the expenses were incurred. • Provides authority to transfer $535 to the Municipal Arts Acquisition Fund, in accordance with the State of Washington's 1 % for Arts Program. • Records the effects of the advance refunding of the portion of the City's 2012 Bonds on behalf of the Edmonds Public Facilities District. 12/14/21 Finance Committee Minutes, Page 3 • Records the effects of the bond sale to provide funds for Civic Field ($1,634,447) and for other capital projects ($4.4 million). Mr. Turley summarized all four decision packages are to record activity that has already occurred, all four are mandatory entries, and none of them represent new spending. He responded to Council questions regarding the amendments. Action: Full Council at 12/14/21 meeting. 5. Replacement of Enterprise Resource Planning Software (Eden) Ms. Menkveld reviewed: • Current state o Eden (Tyler Technologies) ■ The existing ERP solution, Eden phased out by Tyler Technologies o Affected departments ■ Admin Staff ■ Budget Staff ■ Utility Billing ■ Interfaced Software ■ Mayor and Council o Considerations ■ Staff Needed - Core team - Advisory group(s) ■ Timing ■ Compliance & Transparency - Budget transparency - Better audit controls went live in 2001 (20 years old). It is now being - Eden cannot purge old data that should be destroy per Public Records law ■ Budget Impact - 2022 budget amendment - Or postpone to 2023 budget - Potential use of ARPA funds Project needs assessment steps o Council Approval - Professional Services o Council Approval - Procurement of Products o RFP for Project Manager o RFP for Software Product o Product Selection o Implementation o Training Planning Timeline Options o Complete Implementation ■ Requires RFP and product selection ■ Requires 2022 budget amendment or postponement to 2023 budget ■ Implementation estimated at 12 months o Phased Implementation ■ No RFP as there are no competing stand-alone budget products ■ Addresses immediate COVID-19 workplace concerns ■ Implementation of budget module estimated at 5 months Project Needs Assessment: ARPA o Justification for use of ARPA funds 12/14/21 Finance Committee Minutes, Page 4 o Other cities that have funded replacement with ARPA funds Planning Timeline o Option 1: Complete ERP Implementation ■ Q4 2021 — Q2 2023 o Option 2: Phased Implementation: Budget Module First ■ Q4 2021 — Q3 2023 Ms. Menkveld invited committee members to submit questions to her. Questions and discussion followed regarding a suggestion to discuss the use of ARPA funds with the City Attorney, whether there were any downsides to doing the budget -only module, cost of the system, the OpenGov application, the project manager's duties and cost of that position, and timing of the replacement. Action: Continued discussion at January Finance 111" Committee meeting 6. 2022 Budget Amendment Councilmember Buckshnis explained citizens have raised questions and a lot of policy issues are being researched. If the original timeline of approving the budget on November 23rd had been maintained, there would have been seven elected officials to vote on the budget. MSRC has been contacted and she and Councilmember K. Johnson have talked to the City Attorney. The original intent was to repeal the budget; however, that was very cumbersome so the best and simplest course of action would be budget amendments which will be scheduled for the first meeting in January. Councilmember Buckshnis relayed concerns with tapping into unrestricted reserves, anticipating if sufficient discussion and vetting had occurred on November 23rd, some of the spending from the $2.2 million in unrestricted reserves could have been removed and handled either via budget amendments in 2022 or in future years' budget when there was more information available. The Fund Balance Policy states the Finance Committee should discuss when the City utilizes unrestricted reserves. The amendments that will be proposed are contained in the packet. Action: Schedule for first regular Council meeting in January 2022. 3. ADJOURN The meeting was adjourned at 6:29 p.m.