2023-09-12 Finance CommitteeFINANCE COMMITTEE MEETING
September 12, 2023
Elected Officials Present Staff Present
Councilmember Will Chen (Chair) * Dave Turley, Administrative Services Director
Councilmember Susan Paine * Kim Dunscombe, Deputy Admin. Serv. Director
Council President Neil Tibbott (ex-officio)* Oscar Antillon, Public Works Director
Councilmember Vivian Olson Scott Passey, City Clerk
Councilmember Jenna Nand
* committee member
1. CALL TO ORDER
The Edmonds City Council Finance Committee meeting was called to order virtually and in the City
Council Conference Room, 212 — 5th Avenue North, Edmonds, at 5:30 p.m. by Councilmember Chen.
2. COMMITTEE BUSINESS
1. Committee Updates
➢ City's Internal Controls Manual (Green Book) - Do We Have One?
Councilmember Chen reviewed:
• What is internal control?
o Internal control is process used by management to help an entity achieve its objectives
• How does internal control work?
o Internal control helps an entity (City of Edmonds)
o Run operations efficiently and effectively
o Report reliable information about its operations
o Comply with applicable laws and regulations
• How is the Green Book related to internal control?
o Standards for Internal Control in the Federal and Local Government, known as the Green
Book, sets internal control standards for federal and local entities.
• How does an entity (city of Edmonds) use the Green Book?
o An entity such as the COE uses the Green Book to design, implement and operate internal
controls to achieve its objectives related to operations, reporting and compliance
■ Identify objectives
■ Design controls
■ Controls in place
■ Achieve objectives
• Categories of objectives
o Operations
o Reporting
o Compliance
• Components of internal controls
o Control environment
o Risk assessment
o Control activities
■ Review and approve an entry before posting — ARPA auditing in 2021, July budget
amendments correcting accounting errors
■ Contractors and professional services providers evaluations
o Information and communication
09/12/23 Finance Committee Minutes,
o Monitoring
Who would use the Green Book
o The mayor and departments head for operation of the city
o Finance director for financial reporting
o City council for oversight
o SAO for auditing the City's operations, reporting, and compliance with laws and regulations
Resources
o The Green Brook
o State Auditor Office regarding internal control
Questions and discussion followed regarding professional service provider evaluations, resources
required to evaluate professional service providers, and updating internal policies.
Committee recommendation: Add to future finance committee agenda.
➢ Introduction of New Deputy Administrative Services Director
Mr. Turley introduced Deputy Administrative Services Director Kim Dunscombe and Ms. Dunscombe
described her background. Councilmembers introduced themselves.
2. July 2023 Monthly Financial Report
Councilmember Chen observed the report is in the packet. Questions and discussion followed
regarding the Investment Portfolio Summary and amount invested in Snohomish County LGIP versus
State LGIP, timing to access funds in both LGIPs, impacts of moving funds from the Snohomish
County LGIP to the State LGIP to increase investment income, directing investments via the
investment policy, fluctuating interesting rates between the two pools, and limited expenditures from
Fund 116 Building Maintenance Fund.
Committee recommendation: Review investment policy at a future finance committee meeting
3. Employee Travel Policy Review
Council President Tibbott provided a brief introduction. Questions and discussion followed regarding
concern with allowing the use of private vehicles, responsibility for reviewing employees' driving
records, what prompted review of the employee travel policy, multiple policies that address employee
travel, whether the policies addresses international travel, King County's moratorium on out-of-state
travel during the recession, policies outliving people, establishing separate council travel policies,
concern raised by a citizen with reimbursing a staff member for SCC travel, inconsistent language in
the three policies, who authorizes reasonable and necessary expenses, establishing a dollar amount
for travel reimbursement, how higher cost travel expenses should be authorized, and updating the
three policies so the language is consistent.
Committee recommendation: Future committee agenda item with input from staff.
4. Mid -Year Review
Councilmember Chen advised the General Fund Reserve polices requires a status update of the
General Fund and Contingency Fund which has not been provided. He and Council President Tibbott
compiled a dashboard using amounts from monthly reports to highlight key mid -year amounts. He
highlighted current reserve levels on the dashboard which are shown as pending.
Mr. Turley took exception to Councilmember Chen's statement that the report required in August has
not been provided and assured that information has provided. Councilmember Chen said he had no
09/12/23 Finance Committee Minutes, Page 3
knowledge that a report has been provided. Mr. Turley suggested if the committee wants a fund
balance report, they should specify what to include in the report.
Council President Tibbott reviewed the Mid -Year Budget Review — January to June 2023 (prepared by
Councilmember Chen and Council President Tibbott):
Jan-lun 2023
lan-Jun 2023
Jan -Jun 2023
Budget
Budget
Adopted
April
Actual
Amendment
Amendment Diff %
General Fund
Total Revenue
23,772,230
24,756,969 (984,739) -3.99%
Total Expense
28,704,022
30,336,520 (1,632,498) -5.36%
Net
(4,931,792)
(5,579,551)
General Fund Balance
Fund Reserve requirement
8,918,686
8,918,686
Current Reserve level
Pending
Pending
ARPA
Beginning Balance
11,893,099
11,893,099
ARPA fund spent
3,905,619
3,905,619
Ending Balance
7,987,480
7,997,480
City Assets
Cash Balance
68,146,820
Non Cash Assets
Future Obligations
US$11.9 mil Itd tax GO Imp and rrdg bnds
(tax-exempt) ser 2021A due
12/01/2041
11,900,000
11,900,000
11,900,000
US$2.695 mil Itd tax GO rfdg bnds
(taxable) ser 2021E due 12/01/2041
2,695.000
2.695,000
2.695.000
Questions and discussion followed regarding when the fund reserve is established, creating a mid-
year report template, preference for staff to prepare a mid -year budget review, requirement for a
comprehensive report on the City's fund balance reserve types that includes the General Fund
Operating Reserve balance and the Contingency Reserve Fund balance, information included in the
July Monthly Budgetary Financial Report, forecasting using June amounts, providing key data in one
report, and fund reserve reporting requirements.
Committee recommendation: Review reserve balance policy at a future committee meeting
3. ADJOURN
The meeting was adjourned at 6:58 p.m.
Nicholas Falk, Deputy City Clerk for
SCOTT PASSEY, CITY CLERK