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FC021318FINANCE COMMITTEE MEETING February 13, 2018 Elected Officials Present Councilmember Dave Teitzel (Chair) Councilmember Diane Buckshnis Staff Present Scott James, Finance Director Dave Turley, Assistant Finance Director Carrie Hite, Parks & Recreation Director Jerrie Bevington, Recorder The meeting was called to order at 7:15 p.m. in Council Chambers. The following items were added to the agenda: • Item 5: Pending Ordinances regarding the Edmonds Marsh, Opioid Response and Homelessness • Item 6: Sno-Isle Library • Item 7: Budget Process Improvements • Item 8: Potential Funding Options for Snohomish County Emergency Radio System (SERS) • Item 9: Utility Tax Payments 1. Preliminary December 2017 Quarterly Financial Report Councilmembers Teitzel and Buckshnis complimented Mr. James and Mr. Turley for the City's receipt of the Certificate of Achievement in Financial Reporting for both the 2016 Comprehensive Annual Financial Report (CAFR) and for the 2016 PAFR. Mr. Turley highlighted: • General Fund revenues higher than budget • General Fund expenditures under budget • REET revenue higher than budget and higher than 2016 • Personal and EMS property taxes higher than budget and higher than 2016 • Sales tax higher than budget and higher than 2016 • Possible interfund to Combined Street Construction/Improvement Fund Staff responded to questions and discussion followed regarding cities that do/do not prepare a CAFR, under budget General Fund expenditures, budgeting by priorities, LEOFF-Medical Insurance Reserve, actuarial study of LEOFF retirees, expectation that sales tax will decline in 2018, fire construction inspection fees 2017 compared to 2016, building permit revenue, technology rental fund carryover for technology upgrades, professional services expenditures lower than budget, police holiday buyback, REET revenue forecasts, and increases in annual investment income. Action: Schedule for presentation to full Council 2. Capital Asset Policy Committee members and staff discussed the value and description of small and attractive assets, timing of annual audit of small and attractive assets, threshold for capital assets, adding "electronic" to the description of small and attractive assets and extending the date of the annual inventory of small and attractive assets. 02/13/18 Finance Committee Minutes, Page 2 Action: Further discussion with directors regarding the date of the inventory of small and attractive assets. Return to committee followed by brief presentation to full Council. 3. Draft Finance Committee 2018 Work Plan Mr. James reviewed the proposed work plan for existing policies/codes, potential policies to develop and policy amendment & development schedule. Discussion followed regarding an earlier draft of a budget policy, and prioritizing policies to be developed. Action: Return policies to committee for review. 4. 2018 Carryforward Budget Amendments Mr. James summarized budget amendments: • Revenue: $1,116,853 • Expenditures: $4,657,722 Mr. James and Ms. Hite responded to questions regarding removal of the abandoned boat at Marina Beach Park and reimbursement of costs via a DNR program, and telephone/networking preliminary work. Committee suggested adding to the description of the entryway sign that the cost includes design, fabrication and installation. Action: Schedule on Consent Agenda 5. Pending Ordinances regarding the Edmonds Marsh, Opioid Response Fund and Homelessness Fund Committee members and staff reviewed a proposed ordinance regarding Edmonds Marsh Restoration/Preservation Fund and offered several revisions. Discussion followed regarding similarities/differences of the Edmonds Marsh Fund and other trust funds, other funds established in code, administration of the Edmonds Marsh Fund, and restricting use of citizen donations but not City contributions. Councilmember Buckshnis will review the draft ordinance and return for further committee review. Mr. James reported on discussions related to the Opioid Response Fund and Homelessness Fund. Discussion followed regarding homeless individuals the Lynnwood/Edmonds social worker encounters, the Homelessness Task Force assisting with development of an ordinance, hiring a consultant to assist with determining how to distribute funds, determining a target for homelessness funds such as housing for families with children, developing a mechanism for disbursing funds and accepting contributions, using the City's allocation to leverage grant funds, distributing funds via a grant program, and Council authorization required for any spending. Staff will draft ordinance for review by Homelessness Task Force. Action: Edmonds Marsh Fund ordinance return to committee for further review. Staff draft Homelessness Fund ordinance for review by Homelessness Task Force. 6. Sno-Isle Libra Councilmember Teitzel relayed the property taxes collected by Sno-Isle Edmonds from citizens exceed Sno-Isle's investment in the Edmonds Library which equates to Edmonds subsidizing the Sno-Isle Library system. The amounts Sno-Isle collects from other Snohomish County cities was provided at a previous Finance Committee meeting; Mr. James has researched the amounts collected from Island County cities. 02/13/18 Finance Committee Minutes, Page 3 Mr. James reported on a meeting he, Mayor Earling and City Attorney Jeff Taraday had with the Sno- Isle Director and Assistant Director regarding the disparity. A future meeting is being scheduled to determine how this can be rectified. Discussion followed regarding options for rectifying the situation. Action: Finance Committee discuss again after City staff's second meeting with Sno-Isle staff 7. Budget Process Improvements Councilmember Teitzel relayed his concern that changes are proposed very late in the budget process and that practice not allowing enough opportunity for citizens and Councilmembers to ask questions. He distributed information from several other several cities regarding budget retreats, budgeting methods, and requiring Council proposed budget amendments to be submitted in writing. Discussion followed regarding concern that amendments proposed late in the process do not allow adequate time for citizen and/or Council consideration/comment, plans to discuss the CIP/CFP earlier in the process, and staff including Council requests in the budget, Action: Request Council President Nelson include this topic on the budget retreat agenda 8. Potential Funding Options for Snohomish County Emergency Radio System (SERS) Mr. James relayed Mayor Earling organized a meeting with representatives of Marysville, Everett, Lynnwood and Edmonds to discuss SERS funding. Options include property tax and sales tax. A meeting with the cities' Finance Directors is being scheduled. Discussion followed regarding pros and cons of funding options and other funding options such as a phone user fee. Action: Information only 9. Utility Tax Payments Mr. James distributed code language regarding utility tax payments. He suggested revising the code to define a threshold (such as $10,000) to bill monthly versus quarterly. Action: Schedule for full Council The meeting was adjourned at 8:55 p.m.