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01/10/2012 Finance CommitteeFINANCE COMMITTEE MEETING MINUTES January 10, 2012 Councilmembers Present Staff Present Councilmember Buckshnis Shawn Hunstock, Finance Director Councilmember Yamamoto Carl Nelson, CIO Mayor Earling Rob English, City Engineer Public Present Finis Tupper Ron Wambolt Bruce Witenbera Councilmember Buckshnis called the meeting to order at 7:04 p.m. She added discussion of the Economic Alliance of Snohomish County to the agenda. F. Economic Alliance of Snohomish County Mayor Earling explained the former Snohomish County Economic Development Council, comprised of the Everett Chamber of Commerce and the South Snohomish County Chamber, has morphed into a new body, the Economic Alliance of Snohomish County. This group has been organizing for the past year and is well established with representation from major industry across the State and Snohomish County including private industry and municipalities. The membership fee is $5,000. By joining Edmonds will become part of the Executive Board as well as have the opportunity to have key staff members involved in decision making at the staff level. Other participating cities include Everett, Arlington, Marysville, Bothell, Mountlake Terrace, and Mill Creek. They are still recruiting and currently have over 100+ members. Finance Committee recommends Edmonds join the Economic Alliance of Snohomish County. Action: Schedule Authorization to Join Economic Alliance of Snohomish County on the Consent Agenda. A. Purchasing Policy Update Mr. English reviewed changes to the purchasing policy: • Incorporate the change order policy previously approved by the Council • Incorporate the apprenticeship and responsible bidder criteria previously approved by the Council • Increase threshold for small works contracts to $300,000 (from $200,000) to be consistent with State law. • Increase threshold for award of a small works contract to $100,000 (from $30,000) to be consistent with the remainder of the purchasing policy Finance Committee recommends approval of the Purchasing Policy. Action: Schedule Approval of the Purchasing Policy on the Consent Agenda. B. Quarterly Report Reaardina Fiber Optic Opportunities Mr. Nelson explained a quarterly report on fiber optics is required by Resolution 1234. He highlighted the addition of SNOCOM as customer and expenses for repair and maintenance during this quarter. Action: Schedule on Consent Agenda. 01 -10 -12 Finance Committee Minutes, Page 2 C. Investment Policy Mr. Hunstock reported the only changes since the Finance Committee last reviewed the policy were minor grammatical corrections and at Councilmember Petso's request, a statement on page 6 of the policy was revised to read, "The policy shall be reviewed on at least an annual basis." Once the policy is approved by the City Council, it will be sent to the Association of Public Treasurers of U.S. and Canada for certification. Certification shows the auditor and the public that the City's policy complies with State and professional requirements. Finance Committee recommends approval of the Investment Policy. Action: Schedule Approval of the Investment Policy on the Consent Agenda. D. General Fund Update — November 2011 Mr. Hunstock reported the following: • Property tax will be slightly under budget at year end. He will contact the Snohomish County Auditor to determine the reason, could be due to appeals. • Sales tax slightly over budget • Telephone utility tax will be $110,000 under budget by year end. Telephone utility tax revenue will continue to decline as the number of land lines decreases • Gas utility tax 4% under budget, electric utility tax 5% under budget • Leasehold excise tax slightly below budget • Licenses and permits, intergovernmental charges, charges for goods and services, plan check fees are over budget • Expenditures under budget in all line items • REET revenue approximately 22% below budget. The 2012 REET revenue budget is lower than 2011 • Anticipate will end the year with a slight surplus Mr. Hunstock reported the 4th quarter unaudited results will be available next month. He relayed one of the retreat topics will be a discussion regarding the budget including the City's reserves and expenditures increasing faster than revenues. Action: Information only E. Public Comments Ron Wambolt, Edmonds, pointed out the 2012 REET budget is $650,000; he questioned whether that was attainable in light of the 2011 year end forecast of $543,000. He reported this is the lowest REET revenue has been since 1999; the outlook is poor as property values continue to drop. He recommended lowering the REET budget further. Next, Mr. Wambolt pointed out the amount generated by the EMS levy is declining along with property taxes. He suggested lobbying the legislature to change the structure of the EMS levy ($0.50/$1000 AV) so that it is structured similar to school district taxes that generate a certain amount of money. Bruce Witenberg, Edmonds, urged the Council to proceed cautiously when considering spending reserves for day -to -day operations. Adjournment —The meeting adjourned at 7:45 p.m.