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03/13/2012 Finance CommitteeFINANCE COMMITTEE MEETING MINUTES March 13, 2012 Councilmembers Present Staff Present Councilmember Buckshnis Shawn Hunstock, Finance Director Councilmember Yamamoto Carl Nelson, CIO Jeannie Dines, Recorder Public Present Ron Wambolt Bruce Witenberg Councilmember Buckshnis called the meeting to order at 6:45 p.m. A. Fiber Optic Service Agreement for Internet Service Mr. Nelson reported this is the service agreement for 110 James Street. It is structured the same as SNOCOM's agreement and the rates are the same as SNOCOM. Councilmember Buckshnis asked whether there should be a different rate for a government agency such as SNOCOM versus a private entity. Mr. Nelson advised it was preferable to set a consistent rate for all parties /entities. Action: Schedule on the consent agenda. B. Lease Agreement for Access to Fiber from 110 James Street Mr. Nelson reported in order to provide service, it was necessary to extend fiber to 110 James Street. Some of that capacity was declared excess. The lease agreement provides the terms and conditions for extending the service to 110 James and recovering $15,000 of the cost. The agreement also addresses allocation of costs if someone else wants to use the excess capacity. The City Attorney has reviewed and approved the agreement as to form. Action: Schedule on the consent agenda. C. 2012 Salary Range Table Mr. Hunstock explained the table was omitted from the proposed preliminary budget that was published and distributed earlier in 2011. It was inserted into the printed budget document but should have been presented to the Council as an addition to the proposed preliminary budget. The table is a required part of the proposed preliminary budget. The intent of this action is to formally add it to what was adopted by Council in budget Ordinance 3861. The table will be updated to reflect corrections /additions. Committee members and staff discussed the City Attorney's opinion that any changes to the budget book should be reviewed by the Finance Committee, Mr. Hunstock's experience that the Council was not required to adopt non- financial changes to the budget, updating the table to reflect new positions, and additional staff time required to include all tables, graphs, charts, policy documents, etc. in the proposed budget. Mr. Hunstock assured the salary range table will be included the proposed preliminary budget in the future. With regard to the salary for the acting Development Services Director position, Mr. Hunstock explained the $13,000 included in the table was an estimated amount; the Non - Represented Salary Ordinance stipulates a 5% increase which would be less than the $13,000 that was budgeted. Action: Present to full Council. Finance Committee Minutes, Page 2 D. Leakage Policy Mr. Hunstock reported the previously discussed revisions have been incorporated into the proposed policy. Public Works has not formally commented on the policy. Policy issues for further discussion include: • Leak adjustment for leaks within a residential or commercial structure. The existing policy specifically states a leak adjustment is not available for leaks within a resident or commercial structure. Typically leak adjustment policies allow an adjustment for leaks within the structure, such as in the crawlspace as abnormal consumption may be first time the property owner is aware of the leak. Some policies in other cities specifically omit toilet leaks from a leak adjustment. • Responsibility for repair. Some other cities' policies address responsibility for the cost of a repair; from the street to the meter is the city's responsibility to repair, from the meter to the faucet is the homeowner's responsibility. • Amount of leak adjustment. Some other cities adjust for abnormal consumption and write off the difference. This existing policy states the homeowner is responsible for the wholesale cost of the water. Action: Get input from Public Works Director and bring back to the Finance Committee. E. Finance Committee Mission Committee members and staff reviewed the draft Guidelines for the City Council Finance Committee. They discussed the statement in the guidelines regarding an audit committee, how fiber was addressed in the policy, and adding ethics standards to the mission when they are developed. Mr. Hunstock reported on the two audit findings and scheduling the exit conference. Councilmember Buckshnis suggested noticing the exit conference as a public meeting. Action: Bring changes and definition of audit committee to the April Finance Committee meeting. F. Public Comments Ron Wambolt, Edmonds, pointed out in the budget projection, virtually all the reserve funds are combined into the General Fund ending balance. However, the targeted ending balance has not changed, it is still one month. The GFOA changed their recommended reserve to two months. Mr. Hunstock responded he is in process of updating the reserve policies to reflect a minimum two months reserve. Once that is adopted by Council, he will update the projections. Adjournment —The meeting adjourned at 7:25 p.m.