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06/12/2012 Finance CommitteeFINANCE COMMITTEE MEETING MINUTES June 12, 2012 Councilmembers Present Staff Present Councilmember Buckshnis Shawn Hunstock, Finance Director Councilmember Yamamoto Carl Nelson, CIO Frances Chapin, Cultural Services Manager Public Present Jeannie Dines, Recorder Ron Wambolt Bruce Witenberg Councilmember Buckshnis called the meeting to order at 6:00 p.m. A. Authorization to Sign Contract for Grant from Snohomish County Tourism Promotion Area to Promote Write on the Sound Ms. Chapin explained staff applied for and has been awarded funding from the Snohomish County Tourism Promotion Area (TPA) to nationally advertise the Edmonds Arts Commission Write on the Sound writers' conference in October. The contract with TPA is for $7,000. The City received a $4,000 grant last year from the Snohomish County Tourism fund. This year's grant from the TPA is more because she has agreed to do more, including providing more content on the City's website regarding tourism activities. Action: Schedule on Consent Agenda B. Monthly General Fund Update — April Mr. Hunstock reported revenue is ahead of budget. The City began receiving the first half of property taxes at the end of April; after April 30 the City received $3.6 million more in property taxes; including that revenue the City is at 37% of revenue. Expenses are at 33% which is on budget for the 4t" month of the year. He reviewed revenues that are over and under budget; gas utility tax is under budget but it has a seasonal component, REST is ahead of budget by 17% through April. Most department expenses are under or close to budget. Non - departmental is over budget due to large payments such as fire, debt service, ESCA, SnoCom, etc. The Human Resources Department was previously over budget but that was addressed by the budget amendment the Council approved in April. Mr. Hunstock reported the July report will be a newsletter type format with graphs, tables and descriptive information. Councilmember Buckshnis inquired about establishing a contingency liability for litigation. Mr. Hunstock reported staff will present the third budget amendment to Finance Committee in July. In that amendment, he proposes moving $54,000 from the Multimodal Fund and $240,000 from the LID Guarantee Fund into a separate litigation reserve. A brief discussion followed regarding the $1.9 million and the $1.3 million reserves. Mr. Hunstock explained the 2013 budget calendar will be distributed to department heads next week. He anticipated presenting a draft budget in two parts for Council review at two meetings in late August /early September before the preliminary budget is prepared. Councilmember Buckshnis commented on cuts she would and would not support, noting reserves could be used and if voters approve a Metropolitan Park District, that would provide additional funds. Finance Committee Minutes, Page 2 Mr. Hunstock described his plans to bring some of the policy type documents used in Tukwila's budget to the Finance Committee for review in preparation for incorporating them into the City's next budget document. Action: Schedule on Consent Agenda C. Public Comments Bruce Witenberg, Edmonds, suggested clarifying which pending claims would be covered by the City's insurance versus out -of- pocket. Mr. Hunstock responded he could describe what WCIA covers, but could not comment on specific claims. Mr. Witenberg suggested explaining to the public the type of claims the City is and is not insured for. With regard to the Metropolitan Park District (MPD), he questioned how the City could justify asking taxpayers to tax themselves if the City has 32% reserve ($1.9 million + $1.3 million reserves). Councilmember Buckshnis explained if the voters approved a MPD, the City would not begin to collect the tax for over two years. Reserves are not an ongoing revenue source and will only delay a deficit approximately one year. Mr. Witenberg recommended explaining that better to taxpayers. Ron Wambolt, Edmonds, commented across - the -board reductions in the budget do not make sense. Not making across - the -board reductions is a form of budgeting by priorities (BBP). Mr. Hunstock explained Redmond does BBP for their entire budget; Renton only does it for the General Fund. He suggested limiting the BBP discussion initially to the 2014 budget and possibly only the General Fund, adopt a biennial budget for 2015 -2016 and then do BBP for the entire budget. Councilmember Yamamoto asked about the $1.9 million and the $1.3 million reserves. Mr. Hunstock explained use of the $1.9 million reserve is limited to catastrophic events; Council action is required to change that. Councilmember Yamamoto recommended that be explained to the public. Councilmember Buckshnis recommended the Council adopt a reserve policy. Adjournment— The meeting adjourned at 6:35 p.m.