FC081418FINANCE COMMITTEE MEETING
August 14, 2018
Elected Officials Present
Councilmember Dave Teitzel (Chair)
Councilmember Diane Buckshnis
Staff Present
Scott James, Finance Director
Dave Turley, Assistant Finance Director
Jerrie Bevington, Recorder
The meeting was called to order at 8:35 p.m. in the Jury Meeting Room.
Purchasing Policy Amendments
Mr. James explained the concepts previously described to the committee by City Engineer Rob
English have been incorporated into this draft. He reviewed revisions to the policy related to
procurement and surplus of vehicles and equipment, amendments related to procurement of Public
Works, and final acceptance of Public Works Projects. Mr. Turley relayed amendments recommended
by the auditor to Procurement of Professional Services. Councilmember Teitzel relayed his intent to
do further research regarding utilization of MWBE contractors. Staff will confer with Public Works
Director Phil Williams regarding:
• The policy related to the use of City employees to perform public works projects until the
accumulated costs of public works projects performed by them during a budget cycle meets
ten percent of the City's public works construction budget will not preclude hiring a concrete
crew.
• Rationale for requiring competitive bids for public works projects costing more than $65,000 if
multiple crafts of trades are involved and $40,000 if only a single craft or trade is involved
Action: Schedule on Consent Agenda with revisions as reviewed by staff
2. June 2018 Quarterly Financial Report
Mr. Turley provided highlights:
• Home sales continue at a high rate but slowing slightly
o According to NWMLS, Snohomish County has 1.5
experts consider a 4-6 month supply a balanced market
■ 1.3 month's supply in March 2017
■ 0.9 month's supply in June 2017
• Citywide revenues are ahead of last year by $4 million
• Retail sales and use tax ahead of last year by $342,000
• Expenses are up 4.1 % compared to last year
• Expenses are 7.3% lower than budget
• City received Well City Award
o 2% discount on health insurance
months of home supply; industry
Mr. James reported on cautionary trends as indicated by the decrease in development -related
revenues and slowing home sales. Mr. Turley and Mr. James responded to questions and discussion
followed regarding the decrease in telephone utility tax revenue compared to last year due to
increased use of cell phones, reduction in engineering fees and charges, Fund 126 Miscellaneous
expenditure (CDBG repayment for senior center), overtime in Development Services, expenditures for
8/14/18 Finance Committee Minutes, Page 2
construction projects in Sewer Fund 423, and assistance an accounting person in Public Works could
provide. Committee members commended staff on investment interest.
Following a brief discussion, it was agreed the issue of additional accounting staff in Finance and
Public Works will be presented to the Finance Committee next month.
Action: Schedule on Consent Agenda
3. Establishing a Construction Fund for Each Utility Fund
Mr. James relayed a rate study is being done to determine a rate to cover debt, ongoing operations
and construction. In developing the Fund Reserve Policy, he encountered recommendations
regarding establishing an operating reserve for utility funds; Edmonds Utility Funds include debt,
construction and operating which makes it difficult to identify a reserve. He suggested the Finance
Committee consider creating three constructions funds, one for each utility. He described benefits
including ability to identify reserves to bond rating agencies.
Discussion followed regarding bonding for large projects such as utility work on Sunset, past rate
increases, other cities that have construction funds for each utility, Combined Utility Funds in the past,
planning process, identifying funding for the library roof replacement, and the facility condition report.
The Committee requested an updated cost estimate for the library roof for use in discussions with
Sno-Isle Library.
Action: Discussion only
4. Waste Water Treatment Plant Capitalization Policy
Mr. Turley explained the City has had a capitalization policy of $5,000; WWTP repairs can
substantially exceed that amount. For example, a pump can cost $40,000. He recommended
increasing the capitalization threshold for the WWTP to $75,000. Discussion followed regarding
expensing versus capitalizing repairs and original capitalization of the WWTP as one item, GFOA
capitalization minimum, and other jurisdictions' infrastructure capitalization threshold. Committee
members agreed with the proposed increase.
4. Citizen Report
Mr. Turley distributed the 2017 Citizen Report, (formerly the Popular Annual Financial Report (PAFR),
an easier way for members of the community to review and understand basic information of Edmonds'
finances and local government.
The meeting was adjourned at 9:35 p.m