11/12/2013 Finance CommitteeFINANCE COMMITTEE MEETING MINUTES
November 12, 2013
Councilmembers Present
Councilmember Yamamoto, Chair
Councilmember Adrienne Fraley-Monillas
Councilmember Buckshnis
Public Present
None
Staff Present
Roger Neumaier, Finance Director
Stephen Clifton, Comm. Serv./Econ. Dev. Dir.
Phil Williams, Public Works Director
Francis Chapin, Cultural Services Manager
Jeannie Dines, Recorder
Councilmember Yamamoto called the meeting to order at 9:12 p.m.
A. Update for renewal of 2014 Executive Assistant to Council Employment Agreement
Action: Schedule on Consent Agenda
B. Authorization for Mayor to Sian Intergovernmental Cooperative Purchasing Agreement with
Alderwood Water & Wastewater District (AWWD)
Mr. Williams reported this will allow the City to utilize AWWD's Supply and Delivery of Programmable
Logic Controller (PLC) Equipment contract to replace the PLC at the City's treatment plant.
Action: Schedule on Consent Agenda
C. Authorization for the Mayor to Sign the SRF Loan from the State of Washington for WWTP
Switchgear Project
Mr. Williams explained the original intent was to borrow $1.3 million at 2.3% for 20 years with partners
Mountlake Terrace, Ronald Sewer and Olympic Water and Sewer District. A question was raised
whether the City could borrow funds for the benefit of all partners. The recommendation was to
finance Edmonds' portion of the project, approximately $650,000, and the others will identify their own
financing.
Action: Schedule for short presentation at full Council
H. Authorization for Mayor to Sign HGAC Interlocal Contract for Cooperative Purchasing
Agreement
Mr. Williams explained the City purchased a sweeper last year via the Houston -Galveston Area
Council Interlocal Contract. The auditor found the Interlocal Contract was not presented to the Council
in the form of a resolution as required by State law.
Action: Schedule on Consent Agenda
D. Discussion of Edmonds Public Facilities District Task Force Preliminary Report
Mr. Neumaier recalled in early September he presented a proposal to the Council. Council President
Petso recommended the Task Force review the PFD's financial situation and provide the Council a
report. Mr. Neumaier reviewed the PFD Task Force Preliminary Report including the value and impact
of the organization to the community, the PFD's external debt, revenue sources, uncertainty of
revenue sources, ownership, grant agreement approach, audit issues, funding analysis of comparable
11-12-13 Finance Committee Minutes, Page 2
entities, policy objectives of the City in regard to the PFD, and risk for the City. Discussion followed
regarding the long term capital debt issue and ownership structure of other PFD facilities. Suggestions
included trending the PFD's revenues and the PFD providing a five year operating history and
projections.
Action: Discussion only
E. Discussion and Potential Action reaardina Audited Financial Statement Issue and Council
Oversight of Removing Receivables
Councilmember Buckshnis outlined the two issues in her detailed agenda packet regarding the
removal of a $4.95MM receivable from the City's balance sheet and an offsetting payable from the
PFD'S book. A transaction that has been on the books for 12 years with repayment following an ILA.
She said rather than debate the transaction these two items need to be addressed: 1) should the
administration be granted the power to perform the removal of receivables without Council consent,
and 2) should the financial statements be restated to reflect the true nature of the accounting
transaction. Mr. Neumaier supported the auditor's recommendation and suggested a third party expert
provide an opinion regarding the ILA. He also suggested researching the standard in other cities
which Buckshnis indicated she had done and that Edmonds did not fit into the same standards as
being a debt issuing component unit as specified in GASB 48 (para 77,78,79). A lively discussion
followed regarding the auditor's recommendation and whether administration should be permitted to
remove receivables without Council authorization. Mr. Neumaier indicated he was supportive of a
Council policy to authorize receivable write-offs. In addition, he is open to development of a prior
period adjustment Council review policy that would have applied in this instance. Ms. Buckshnis
indicated that note 77 and the balance sheet verified that the receivable had been removed and that
basically a policy needs to be established.
It was suggested Mr. Neumaier provide his opinions and Councilmember Fraley Monillas asked how
other cities handled these transactions and Ms. Buckshnis indicated that Tukwila and other cities
require Council approval on removing receivables. Ms. Buckshnis stated that we needed to just end
the debate. Mr Yamamato and Ms. Fraley Monillas agreed further discussion should be postponed
until the PFD's audit is finalized.
Action: When PFD audit finalized, determine if issue will return to Finance Committee for further
discussion or go to full City Council. Ms. Buckshnis felt it should just go to full Council.
F. 2013 November Budget Amendment
Mr. Neumaier reviewed the November budget amendment. He distributed an amendment for the 76th
Avenue project which the Council approved tonight. He responded to questions regarding the
increase in TBD revenue and staff member who provides services to various funds.
Action: Schedule for full Council
G. 2013 September Budgetary Financial Report
Mr. Neumaier reviewed the report; as requested, several items have been added to the report. He
highlighted:
• General Fund revenues are 6.8% over 2012 YTD
• Expenditures are anticipated to be 2% under budget
• Stormwater bond revenue is not yet reflected
• REET revenue is expected to exceed $900,000 by yearend
• The economy looks good
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Mr. Neumaier responded to Council questions regarding the risk management reserve and Human
Resource expenses.
Action: Schedule quarterly report for full Council
I. Public Comments - None
Adjournment —The meeting adjourned at 10:07 PM.