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09/10/2013 Finance CommitteeFINANCE COMMITTEE MEETING MINUTES September 10, 2013 Councilmembers Present Councilmember Fraley - Monillas Council President Petso Public Present Ron Wambolt Roger Hertrich Bruce Witenberg Finis Tupper Ken Reidv Staff Present Roger Neumaier, Finance Director Phil Williams, Public Works Director Stephen Clifton, Comm. Serv. /Econ. Dev. Dir. Jeannie Dines, Recorder Councilmember Fraley - Monillas called the meeting to order at 6:30 p.m. She asked Council President Petso to participate due to Councilmember Yamamoto's absence. A. Authorization to contract with James G. Murphy to Sell Surplus City Vehicles Mr. Williams advised this is a police seizure vehicle, an 11 year old BMW SUV, and the approximate value is $6,000. Action: Schedule on Consent Agenda B. Recommendation for Department Presentations for Budget Workshop Mr. Neumaier reviewed the proposed schedule: October 1: Mayor's presentation of proposed 2014 City Budget. October 22: Department presentations (Court, City Clerk, Mayor's Office, Council, Human Resources, Economic Development, Finance & Information Services, Non - departmental, Development Services, Police) October 29: Department presentations (Parks, Public Works Utilities, Public Works Roads and Public Works Facilities Maintenance, ER &R and Engineering) November 4: Council Budget Public Hearing November 11: Council Budget Adoption Departments' presentations will address 2013 accomplishments, business challenges and uncertainties for the coming year, compare yearend projection actual expenditures to budget, what is different about their 2014 budget proposal and respond to Council questions. He will share the proposed department presentation schedule at a staff meeting tomorrow and make any necessary changes. Action: Schedule for full Council next week C. JuIV 2013 BudgetarV Financial Report Mr. Neumaier highlighted the following: • Property tax revenue is significantly higher compared to last year. This may be due to payment of delinquent property taxes when properties are sold. • Sales tax revenue is at 61 % and trending 7.5% over budget • Total General Fund revenue is at 61 % or $20.1 million YTD, compared to $18.8 million last year. 09-10'13 Finance Committee Minutes, Page • In General Fund expenditures, Intergovernmental is 8171%. This is primarily due to department expenditures at the beginning of year. He anticipated a 2% under expenditure at yearend. • REET continues 1O perform very well. The yearend projection is $900,000 which is $250,000 over budget. Mr. Neumaier advised narratives will be provided in quarterly reports and will be more expansive than the second quarter report. Action: Schedule for full Council next week due to questions regarding the report format D. City Investments and County Investment Pool Mr. Neumaier explained the City's investments have been earning 0. 1 % in the State's Local Government |Dm8stOOe[t p[Og[aDl and 8 bank 8CCOUDt. The SDOhODliSh [|OUOtv |Om8stOOe[t POU| has significantly OULpHrfO[08d the State pool. For 9X80p|H' in 2012 participants [8CHiV8d 1%, participants in the State pOO| received O.17% and 8 2 year Treasury NO18 [eC8iV8d 0.25%. The ph08[y Obi8CtiV8G in the City's Investment Policy 8[e, 1\ S8ƒgiv, 2\ liquidity, and 3\ return OD investment. He anticipated an iDC[e8S8 in iDV8St08Dt revenue Of$80,00O. He intended tO keep @ significant amount in the State's fund tOensure flexibility. The 8ddiiiOO8| interest [eVeDU8 is 8CC[V8d by the fund where the money is located. He is authorized to make this change but wanted tO notify the Council. DiGCUSSiOO fO||OVVed regarding ti08f[808fO[ iDV8G[08OtG and the p[OC8SS and ti0ef[808tO withdraw money from the State Pool and from the Snohomish County Pool. Action: Schedule for presentation by Mr. Neumaier to full Council E. Bond Counsel Contract for Edmonds Center for the Arts Contract Mr. Ngum8igr requested the Council authorize the City Attorney tUagree tO waive any potential conflict [d iD18r88t pertaining to the Bond COUO8e|'S OCC8SiOD8| [ep[88eOt8tiOD of the Edmonds Public F8Ci|iii8G District (PFD) and the Edmonds Center for the Arts (ECA) on unrelated matters. Once that authorization has OCCU[[gd, City staff vvOU|d [nOvg forward with 8 CODt[8[t and vvOU|d [8tU[D to the COUDCi| with a proposed |nt8dOC8| modification agreement that addresses the strategies and issues summarized above. This VVOU|d [8p|8C9 the CUr[HDt |O8n with 8 grant Gt[uCtV[8 which is COOGiGt8nL with OlhH[ cities. He described benefits Of this strategy. The cost iSuptO$7,50O for bond counsel. In response to CO00itt9H 0H0b9[S qU9StiODS. K8[. N9U08i9[9Xp|8iOHd extending the term dORS DOL solve the problem because the State requires interest b8 charged and the PFD still would need 8source Of revenue to repay the |U8D. The |O8D is p[Ob|eOO8tiC during PFD audits. The nO8DD8r in which they VVOV|d be modifying the |Ot8[|OC8| VVOu|d be the bond counsel's [8CO00HOd8tiOO. Discussion followed regarding the TR8K Force that has been diSCUG8iOg VV8yG to cover the obligation, efforts to extend the PFD legislation for 15 years, bond counsel providing input to the Task Force, exploring other alternatives, investigating what other cities have done, obtaining tax and |ggG| OvvDe[Ship advice from appropriate attorneys, projections iD8Sp[88dGh8et provided G1 the Council retreat, and bond refinancing savings. Mr. Ngum8igr advised many of the questions that are being asked via email are very complex. He relayed the EC/\i8R jewel and the City Council should be proud Of what they have achieved. His intent iS to support that progress. Council President Petso advised a Task Force meeting is scheduled this Friday. Mr. Clifton said long term ownership also needs to be discussed by the Council and PFD. K8[. N9U08i9[VVi|| synthesize the qU9StiOOS he has rHC9iV9d and 8OSVVHrS he has provided as well as identify technical issues that he cannot fully respond to. He suggested establishing G date for the l|8Sh Finance Committee Minutes, Page 3 Force to m8h8 8 recommendation. He advised neither ��A nor P��� 8S�8d fUrdliS� , but b is an important issue to them. � Action: Schedule for next DlODLh'G FiD8DC8 CODlDlitL8e Ol8eLmg with 8 synthesis OfqUeStk}DG/RDSVVe[G and an update from the Task Force. F. Public Comments Ken Reidy' Edmonds, enCOUr8A8d &1r. N8VmGier0D respond 0Dthe Hm8i|S he sent today. He agreed it was a very complicated Shu8UOn and it was difficult for CUUzgnS and even staff to understand. He recalled fO[0e[ Finance [}i[eCiO[ HVD8tOCk 1O|d him in 2012 that the PFD had paid back all their |O8OS. There 8ppH8[S to be CODfVSiOO about n3St[iCt8d funds and iDt9rfUOd |O8DG. EV8[yODH would benefit from 8 detailed explanation of the relationship between the PFD, ECA and the City. Mr. NgumGigr anticipated his responses to COVDCi| questions will address K8[. R8idy'S questions iOthe extent that they dO not require detailed legal expertise. Bruce Witenberg, Edmonds, encouraged the Council to authorize the necessary funds tO hive Foster Pepper and in particular Hugh Spitzer as bond COUDS8| to p[OVdH the [|kv the D8CHSSa[y 8SGiGtaDCR. He appreciated Mr. Neumaier's candor in saying he needs outside expertise in regard to this complex issue. Adjournment — The meeting adjourned at 7:15 p.m.