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11/13/2012 Finance CommitteeFINANCE COMMITTEE MEETING MINUTES November 13, 2012 Councilmembers Present Councilmember Buckshnis Councilmember Yamamoto Public Present Ron Wambolt Bruce Witenberg Roger Hertrich Business Improvement District Committee Members Staff Present Shawn Hunstock, Finance Director Stephen Clifton, Community Services & Economic Development Director Carl Nelson, CIO Councilmember Buckshnis called the meeting to order at 6:01 p.m. Mr. Hunstock requested the committee modify the agenda to discuss items D, E and F first. The agenda modification was approved. D. Resolution Initiating a Proposal for a Business Improvement District within a Portion of the City of Edmonds Mr. Clifton discussed the process for initiating a Business Improvement District (BID). Members of the BID Committee were present to discuss any questions the Committee members might have. Councilmembers Buckshnis and Yamamoto indicated they did not have questions beyond what was already addressed in the agenda packet. Councilmember Buckshnis indicated she anticipated questions from other Councilmembers when this item is discussed at the full Council meeting. The Committee approved forwarding to the November 27th Council meeting with a recommendation to approve. Action: Schedule for discussion at the November 27th Council meeting. E. Quarterly report regarding fiber optic opportunities Mr. Nelson gave a brief overview of fiber activities during the last quarter. Mr. Nelson then discussed a memo prepared by Mr. Hunstock regarding future direction related to fiber. Mr. Nelson and Mr. Hunstock discussed a proposal that will be coming to Council to convert the City's fiber infrastructure into an enterprise fund. The intent with an enterprise fund would be to earn net income from the operation of the fiber utility in order to be self - sufficient and not require a subsidy from the General Fund. Councilmember Buckshnis asked whether there would be a proposal to be considered now for the 2013 budget to convert fiber into an enterprise fund. Mr. Hunstock indicated not at this time. The plan is, along with the two decision packages included in the proposed 2013 budget, to request funding for a business plan to be conducted in 2013. Councilmember Buckshnis agreed that a business plan would be needed first prior to establishing fiber as an enterprise fund. Councilmember Buckshnis asked that $35,000 be added to the list of items to be considered by Council at the November 20th Council meeting when the 2013 budget is considered for changes and adoption. This is in addition to the two decision packages that will also be considered at the November 20th meeting related to fiber. Action: Schedule for discussion at the November 201h Council meeting. F. Video Annotation of Agendas and upgrade of video Mr. Nelson discussed the options (phases) related to video annotation of agendas and equipment that would be needed to complete all three phases of implementation. Councilmember Buckshnis indicated her support for the concept and requested Mr. Hunstock add to the list of things for Council to consider for 2013 budget changes funding for phases #1 ($27,000) and #2 ($22,000). Mr. Clifton discussed the funding for the capital portion of this project. The City is in the process of negotiating a franchise agreement with Comcast. The proposed franchise agreement currently includes 11 -13 -12 Finance Committee Minutes, Page 2 an Education Government (EG) fee of $0.35 per month, per subscriber that Comcast would collect and remit to the City. The City will propose the same EG fee to Frontier as part of the negotiations for that franchise agreement once the Comcast agreement is finalized. The EG fee can only be used for capital technology purposes. The revenue from the EG fee is not guaranteed until Council approves the franchise agreements. Action: Phase I and II of video annotation will be added to the list of proposed changes for Council consideration at the November 20th Council meeting. A. Authorization to Contract with James G. Murphy to Sell Surplus City Vehicles Councilmembers Buckshnis and Yamamoto indicated they had no questions regarding this agenda item and they recommended moving to the following Council meeting on the Consent Agenda. Action: Schedule for Consent Agenda next week. B. Request for Bid: Wastewater Treatment Disinfection and Odor Control Chemicals Councilmembers Buckshnis and Yamamoto indicated they had no questions regarding this agenda item and they recommended moving to the following Council meeting on the Consent Agenda. Action: Schedule for Consent Agenda next week. C. Authorization for the Mayor to sign an Interlocal Agreement between the City of Lynnwood and the City of Edmonds for joint funding of the Recycling Coordinator Councilmembers Buckshnis and Yamamoto indicated they had no questions regarding this agenda item and they recommended moving to the following Council meeting on the Consent Agenda. Councilmember Buckshnis noted this was a continuation of an agreement the City has had with Lynnwood in the past. Action: Schedule for Consent Agenda next week. G. November 2012 Budget Amendment Mr. Hunstock distributed updated information to the Committee regarding the amendment being considered. The amendment moving funding for software purchases from the City Clerk's budget to the Information Services budget was corrected to show the proper expenditure line items. A last minute addition was also made increasing funding to the Edmonds Public Facilities District (PFD) above the $250,000 the City budgeted for such purpose in 2012. Mr. Hunstock indicated the budget amendment related to the Indefeasible Right of Use agreement was an item the Council already approved at a recent Council meeting. The amendment related to funding of the payouts for the Voluntary Separation Incentive Program is also something the Council recently approved. Councilmember Buckshnis asked whether the budget amendment for the Marsh Interpretive Signs was for an item that has already been installed. Mr. Hunstock indicated those signs have not yet been installed. The Committee discussed the amendment related to the Edmonds PFD. Mr. Hunstock indicated this was for the two debt service payments in 2012 on the 2008 bonds, in accordance with the Contingent Loan Agreement between the City and the Edmonds PFD. Mr. Hunstock indicated he had asked Joe Mclalwain, Executive Director of the Edmonds PFD, to attend the November 20th Council meeting to discuss their need for assistance from the City. 11 -13 -12 Finance Committee Minutes, Page 3 Action: Schedule for discussion at the November 201h Council meeting. H. September 2012 Quarterly Financial Report Mr. Hunstock indicated there were no significant changes from previous monthly or quarterly financial reports. There are also no departments currently over budget so far through September. Councilmember Buckshnis thanked Mr. Hunstock for making additional changes to the report, specifically noting material changes in the numbers or graphs with a footnote. Action: Schedule for discussion at the November 20th Council meeting. 1. Capital Asset Policy Mr. Hunstock indicated the policy under consideration was drafted in response to feedback from the State Auditors Office (SAO) during the 2011 audit. During the fieldwork for the 2011 audit SAO staff inquired of Finance staff about the City's capital asset policy. Upon further research by Finance staff it was determined that the City did not have a formally adopted policy relating to capital assets. The current practice was developed several years ago and is mentioned in the City's Comprehensive Annual Financial Report, but it was never formally adopted by City Council. The policy being considered addresses that deficiency. Councilmember Buckshnis thanked Mr. Hunstock for bringing the policy to Council for adoption, and noted this was one of several policies she requested the City complete some years ago. Action: Schedule for Consent Agenda next week. J. Banking Services RFP Recommendation Mr. Hunstock indicated Council approved the RFP for banking services in August 2012. Every bank with a branch in Edmonds was contacted regarding the RFP. Some banks were not able to respond legally because they were not approved by the State Public Deposit Protection Commission (PDPC) to accept public funds. Other banks indicated they would not be able to offer the suite of services the City would require under the RFP. Six banks, all with branches in Edmonds, responded to the RFP. Mr. Hunstock indicated based on his evaluation of the responses, in accordance with the terms included in the RFP, that US Bank was being recommended for award of the banking services contract. Councilmember Buckshnis inquired about the security of City money held in financial institutions. Mr. Hunstock indicated, because the City's current bank as well as US Bank are approved by the PDPC, 100% of the City's money is collateralized so there is no risk of loss. Action: Schedule for Consent Agenda next week. F. Public Comments Ron Wambolt, Edmonds, inquired about whether too much money was budgeted for legal services since some of the City Attorney cost was budgeted in the City Council budget and another portion in the City Attorney budget. Mr. Hunstock indicated he did not think the costs were over budgeted, but he would check and get back to Mr. Wambolt. Bruce Witenberg, Edmonds, requested a report to Council on legal costs incurred, which firms the amounts were paid to, and what the nature of the issue was that they were representing the City for. Councilmember Buckshnis agreed that such a report would be useful information to have and indicated perhaps that was something that could be included in an annual or quarterly report to Council. Roger Hertrich, Edmonds, inquired about an amount shown in the budget amendment ($400,635 in additional General Fund budgeted expenditures). Mr. Hunstock indicated that was the total expenditure 11 -13 -12 Finance Committee Minutes, Page 4 increase for all the individual budget changes included in the agenda packet. Mr. Hertrich inquired about who was responsible on Council to review vouchers. Mr. Hunstock indicated the Council President is appointed the Council audit committee, and has responsibility for voucher review. Councilmember Buckshnis indicated Councilmembers frequently have questions on a regular basis regarding specific vouchers and will contact the Finance Department or other departments to resolve their questions. Mr. Hertrich indicated it is not apparent to the public when such discussions occur. Adjournment — The meeting adjourned at 7:02 p.m.