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FC101017FINANCE COMMITTEE MEETING October 10, 2017 Elected Officials Present Staff Present Councilmember Diane Buckshnis (Chair) Councilmember Dave Teitzel Council President Tom Mesaros Mayor Dave Earling Scott James, Finance Director Dave Turley, Assistant Finance Director Rob Chave, Planning Manager Shane Hope, Development Services Director Brian Tuley, Information Systems Supervisor Jeannie Dines, Recorder The meeting was called to order at 7:25 p.m. in Council Chambers. 1. Permit Software System Professional Services Agreement Mr. Chave relayed after preparing packet, he learned the City would be responsible for travel expenses which increased the cost by $10,000. Mr. Chave responded to committee questions regarding the interview team, permit software used by other cities, and the use of credit cards. Action: Schedule on Consent Agenda, update packet to reflect additional $10,000 cost 2. Public Facilities District (PFD) Bond Refinancinq ECA Executive Director Joe Mclalwain and PFD Board Members Patrick Mulva and Marla Miller were also present. Scott Bauer, NW Municipal Advisers, explained he was asked to prepare a presentation regarding the pros and cons of the City versus the PFD refinancing the bonds. He reviewed • Information on the bond market • Summary of current PFD debt and debt service • Comparison of City versus PFD issued bonds • Scenarios Scenario Scenario Description 1 Refund PFD 2008 Bonds with City LTGO Bonds No extension to final maturity 2 Refund PFD 2008 Bonds with PFD Sales Tax Bonds No extension to final maturity 3 Refund PFD 2008 Bonds with City LTGO Bonds Extend final maturity to 2030, Continue growth at 3.5% 4 Refund PFD 2008 Bonds with City LTGO Bonds Extend final maturity to 2030, No growth 5 Refund PFD 2008 Bonds with City LTGO Bonds Extend final maturity to 2041 • Scenario results summary Councilmember Buckshnis explained she requested this presentation to get the issue out in the public, the committee is still in the fact-finding stage. 10/10/17 Finance Committee Minutes, Page 2 Mr. Bauer responded to questions regarding the City guaranteeing PFD issued bonds, how other PFD's refinance their debt, advance refunding to take advantage of low interest rates, whether advance refunding would be via bonds or private placement, and potential increases in rates. Discussion followed regarding concern the City is taking the lead versus the PFD Board, the PFD's financial adviser, savings via the City issuing bonds, seeking the Finance Committee's opinion whether the City is interested in being involved, repayment of the contingent loan, paying off the bonds and then begin paying on the loan with the City, loss of the sales tax rebate if the PFD ceased to exist, use of the PFD sales tax rebate, the PFD's cash position, whether savings from bond refinancing could be dedicated to retirement of the contingent loan, and the City having more control of ECA management such as hiring a management firm. Discussion continued regarding having the City Attorney prepare a loan agreement to ensure the PFD repays the City, delay in the preparation of the PFD/ECA Strategic Plan, anticipated reduction in the funding request from the PFD to the City in 2017, whether the request would increase if there is another economic downturn, the relationship between the ECA Board who raises funds for operations and the PFD, potential the PFD will not need to borrow from the City after 2018/2019 and anticipated repayment of the contingent loan by 2027, whether the City is interested in partnering with the PFD to refinance the debt, the City guaranteeing the bonds if the PFD refinances the bonds. Committee members requested the following information: • Government Accounting Standards Board (GASB) statement related to the difference between component units issuing debt and the city issuing debt. • Composition of the PFD (developed for the PFD Oversight Committee) • Projections for repaying the contingent loan by 2027 Action: Information only 3. August Monthly Financial Report Mr. Turley highlighted revenues and expenditures in the report. He and Mr. James responded to questions regarding new staff members in the 2018 budget, (senior accountant, assistant engineer, capital projects manager, engineering tech), Traffic Infraction Penalty versus NC Traffic Infraction revenue, and the timing of construction project expenditures. Committee members commended staff on investment income. Action: Schedule on Consent Agenda 4. Third Quarter 2017 Budget Amendment Mr. James reviewed budget amendments related to: • Offset salary in City Council to Professional Services for Edmonds Marsh study • Court supplies • Court security • Department of Retirement Systems invoice for James Tarte PERS contributions from 2014 • Fire District 1 retro bill for approximately $665,000, additional $193,000 needed over amount budgeted for 2017 services • Program expenditures and funding for preliminary design and environmental documents for waterfront connector • Program expenditures and funding for Citywide Pedestrian Crossing Enhancement Project • Software to manage cemetery plots, sales, burials, etc. • Additional funding for Veterans Plaza 10/10/17 Finance Committee Minutes, • Transfer of the 1 % for art allocation for the original approved budgeted expenditure for the downtown public restroom project • Transfer funds from REET to Parks Construction Fund for construction of downtown public restroom • Vehicle propane conversions • Waterline replacement Action: Schedule for full Council 5. Brief Update on City's Financial Relationship with Sno-Isle Mr. James reviewed a comparison of library tax, population, cost per person for cities in the Sno-Isle district. A financial statement provided by Sno-Isle of what is spent on each library in the district revealed Edmonds residents pay approximately $750,000 more than Sno-Isle spends operating the Edmonds library. There may be an opportunity to revisit the financial relationship with Sno-Isle and options such as Sno-Isle providing funds for a reserve. Discussion followed regarding Woodway not being a member of the Sno-Isle district, whether residents' library needs are changing and whether the model needs to be changed, potential for relocating the library to Highway 99 and repurposing the existing building, changes in Sno-Isle's model with regard to building ownership, and exploring other options/models. Action: Councilmember Teitzel will confer with Mr. Taraday about legal options. The meeting was adjourned at 8:50 p.m.