HomeMy WebLinkAbout10-26-1999spSPECIAL CITY COUNCIL MEETING
2000 BUDGET WORKSHOP
OCTOBER 26, 1999
Auburn City Hall
Council Work Area
Minutes
i. Introduction
Mayor Booth called the special meeting of the Auburn City Council to order at
4:30 PM in the Council Work Area of Auburn City Hall. Mayor Booth and the
following members of the City Council were present: Pete Lewis, Jeanne
Barber, Gene Cerino, Fred Poe, Trish Borden, Sue Singer, and Rich Wagner.
Staff members present included: Finance Director Diane L. Supler, Assistant
Finance Director Shelley Coleman, Financial Operations Manager Sherri
Crawford, Public Works Director Christine Engler, City Engineer Dennis Dowdy,
Traffic Engineer Steve Mullen, Water Utility Engineer Lara McKinnon, Storm
Drainage Engineer Tim Carlaw, Sewer Engineer Jeff Roscoe, Parks and
Recreation Director Dick Deal, Personnel Director Brenda Heineman, Fire Chief
Bob Johnson, Assistant Fire Chief Russ Vandver, Planning and Community
Development Director Paul Krauss, City Attorney Michael J. Reynolds, Assistant
City Attorney Judith Ausman, Police Chief Jim Kelly, Assistant Police Chief
Marion Dukes, and City Clerk Danielle Daskam.
II. 1999 in Review
Finance Director Supler presented a brief review of the 1999 accomplishments
and program highlights. She noted that because of the strength of the economy,
the City realized over $1 million in sales tax revenue per month during four
months of the past year. Some of the accomplishments during the past year
included the construction of the new library building, Y2K upgrades and
· contingency planning, completion of the skateboard park, groundbreaking for the
new transit station, the wholesale distribution of water to District 111 and
] I
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October 26, 1999
Page 2
Covington, senior center project design, and upgrade of the City's revenue bond
rating from A2 to Al.
Ms. Supler reported on the 1999 revenues and expenditures to date. Through
September, revenue collections are at eighty percent of estimates. Expenditures
through September are at sixty-six percent of the budget. The Arterial Street
Fund is below estimate due to the uncertainty of Initiative 695. The Water,
Sewer, and Storm enterprise funds are operating at a net income. However, as
of September, the Airport and Cemetery enterprise funds are operating at net
losses.
Ms. Supler summarized the status of the 1999 Program Improvements. The
water meter readers have been hired; the hiring of a utility accountant is on hold
by the Finance Department pending evaluation of the position; $500,000
targeted for downtown revitalization has been transferred from the General Fund
to the capital projects fund; the sensitive areas and special areas ordinances will
be rebudgeted for next year; the annual neighborhood grant programs were
implemented; hangar construction is in progress; pre-incident planning is
underway with most of the work to be completed next year; protective turnout
clothing is ordered and will be received by the end of the year; two sworn police
personnel were hired; a pilot study of the laptop project has been started and the
majority of the funds for the project have been rebudgeted for next year; a permit
technician was hired during the first quarter of 1999; hiring an additional
custodian has been delayed pending a position evaluation; construction vehicles
have been purchased; a building inspector was hired; the re-lighting for Brannan
Park has been rebudgeted for next year as a contractor could not be secured;
the curator of education was hired; the millennium commemoration has been
rebudgeted; and the additional court clerk was hired.
Ms. Supler explained that due to the pending vote in Initiative 695 next month,
the timeline for adopting the budget has been extended until December. Staff
will, however, be asking the Council to pass the property tax ordinance by
November 1, 1999 in order submit the property tax levy to King County by
November 15, 1999.
The goals for the 2000 Budget process are similar to last year's and include
maintaining essential programs at present levels of service, develop a workable
strategy to achieve Council goals, recommend modifications to meet changes in
city circumstances, and continue responsible financial management of City's
resources. The 2000 budget assumptions included: baseline budgeting; no
receipt of MVET funding; salaries based upon settled labor contracts or cost-of-
living adjustment; selected program improvements are included in the baseline
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October 26, 1999
Page 3
budget; discretionary expenses limited to a 2.5% increase; and items such as
Valley Comm, King County Jail, RST Disposal, King County Metro and election
costs are funded at their full level.
Finance Director Supler explained there is a lot of uncertainty about the effect of
1695 on the proposed budget. According to the City's financial counsel, the City
may not be able to increase the amount of its revenues beyond the baseline
year. 1695 includes a statement that a government agency cannot change fee
rates without voter approval and cannot increase its tax base. Tax base is
defined by many as the revenues received. The 2000 Budget may need to be
adjusted if it is determined the City cannot receive additional income above the
baseline level.
Ms. Supler reviewed the Council's 2000 Budget goals and activities as follows:
Community Identity Retained and Preserved
· Applied for a grant for street improvements to West Main Street from
the Interurban Trail
· New library building scheduled for completion in spring 2000
· Construction drawings for Senior Center renovation to be completed
by April 2000
Community gateway funding recommended in 2000 Budget
Downtown Plan to be completed in 2000
Site plan review ordinance which will provide a high level of design for
future projects
City neighborhood program expanded into Pioneer Elementary School
Neighborhood planning in the Terminal Park area
Revitalization of Downtown
· Downtown Revitalization Plan to be completed in 2000
· Transit station work has begun
· Increased police presence in downtown area
· Economic Development Plan formulated
· Assist in efforts to find alternatives for the Penney's building
· Consultant hired to assist in placing art in the downtown area and
transit station
Economic Development
· Staff continues to discuss the possibility of a wetlands program
· Evaluating transit oriented development around the transit station
· Encouragement, guidance and problem solving on future
developments
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October 26, 1999
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· Full-time individual assigned to economic development
Resolve Water Issues
· Completed the aquifer characterization study and groundwater flow
model
· IA2 financial commitment completed
· City participating in Green River Recovery Plan (WRIA 9)
· Joint projects at City Park, Isaac Evans Park and Fulmer Field.
· Compliance with the Department of Health and moving the corrosion
control program forward
Successful Annexations
· Phase I of Lea Hill Annexation nearly completed
· Drafted an Interlocal Agreement with Fire District 44 for services in the
Lea Hill annexation area
· Continue to meet with the Lea Hill Task Force
Councilmembers Borden and Wagner inquired regarding an economic analysis
of the Lea Hill annexation. Ms. Supler offered to provide an information sheet to
the Council.
Healthy Environment for Youth
· Completed the skate park facility at Brannon Park
· Started a teen outdoor recreation program
· Expanding teens in leadership training program
· Working with the school district and youth agencies in implementing
Asset Development Program
· Police implemented school violence training and awareness program
Transportation Issues Resolved
· Major projects on hold pending 1695
· Increase use of REET money
· Construction of B Street LID Project completed in 1999
· Grant submitted to TIB for "A" Street NW corridor
· White River Trail to be completed in 2000
· Applied for a grant for "M" Street pre-design
· Completed traffic signal at 29t~ and R Street SE
· Upgraded traffic signal interconnect software
Miscellaneous
· Y2K upgrades to servers, voice mail system, email/calendar system,
permit system, hardware upgrade on workstations.
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October 26, 1999
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· Provided Internet services to employees
· Pilot project for police laptops to be completed by end of 1999
· Evaluating options on accounting system software
Councilmember Wagner inquired regarding the status of building a home
page. Ms. Supier advised that the City just recently hired a information
systems manager, and staff members are now beginning to meet and
determine the format for the home page. Mayor Booth indicated Council
may need to provide a policy on the City's home page and other legal and
security issues need to be resolved.
Initiative 695
· Increased uncertainty on providing new programs or continuing other
programs
· 277th and 3rd Street Projects on hold
· Possible adverse effects in financial markets
· Senior Center renovation on hold
· Reduced funding for several activities
· Reduced funding for several activities
· Contingency planning, including long term rates to assure the viability
of enterprise funds
Counciimember Wagner questioned the reason there is no separate fund for the
Downtown Revitalization capital outlay. Finance Director Supler explained that
in order to keep the number of funds to a minimum, the 328 Fund is used for
capital funds reserved for future use. Each amount is itemized in the 328 Fund
and contained on page 133 of the 2000 Preliminary Budget.
In response to a question from Councilmember Poe, Finance Director Supler
explained that the 2000 Preliminary Budget does not assume any MVET taxes in
anticipation of an affirmative vote on 1695. However, the budget does not take
into account a freeze on base year revenues, which some believe may also
result from the passage of 1695. Ms. Supler advised that the Municipal Research
and Services Center (MRSC) is funded by MVET taxes. MRSC is a valuable tool
for all cities and future funding for MRSC, if 1695 passes, is not known.
III. 2000 Budget
2000__Q_Q.Q_~_pC a it a I Pro'~ects
Assistant Finance Director Shelley Coleman presented an overview of the
2000 capital projects and funds.
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October 26, 1999
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The Arterial Street Fund anticipates $22,829,000 in grants, $5,291,000 in
other government contributions, and $1,654,000 in other revenue
soumes. Ms. Coleman stressed that the anticipated grant funds are
sensitive to the passage and subsequent implementation of 1695. The
other government contributions represent funding from the Port of Seattle
and the railroads. Other revenue sources include motor vehicle fuel tax,
traffic mitigation, and general fund operating transfers. Some of the
largest projects slated for funding from the Arterial Street Fund are the
South 277th Grade Separation Project, 3rd Street SW Grade Separation
Project, the Transit Center pedestrian bridge, and Kersey Way
improvements.
Councilmember Lewis asked that projects sensitive to Referendum 49
and Transportation Improvement Board funding be identified to help the
Council in their review of the budget.
The Water Fund includes $4,700,000 in available working capital,
$2,887,500 from the Public Works Trust Fund loan, and $315,000 from
system development charges and assessments. Major projects funded
through the Water Fund are the Corrosion Control Facility, Interlocal
Agreement No. 2 (IA2) project, water resources evaluation, Well #5B, and
the Lakeland Hills rezone to bring Iow pressure areas up to standard.
The Sewer Fund includes $2.8 million in working capital, $200,000 in
system development charges, and $133,000 from other funds. Major
projects slated for the Sewer Fund include the 2000 sewer replacements
to upgrade and replace lines throughout the city, Auburn Way South
Phase B-3, sewer main extensions, and 3rd Street SW line removal to
hccommodate the 3rd Street SW grade separation.
The Storm Fund includes $4,349,000 in working capital and $200,000 in
system development charges. Major projects for 2000 include the Central
Storm ImprovementJPSE ditch which serves the downtown area, the 21st
Street (from A Street to H Street) project, the airport detention facility, and
the Central Storm Improvement.
Ms. Coleman presented a comparison of the 1999 and 2000 ending
working capital. The 2000 Budget proposes utilizing a large portion of
working capital.
Councilmember Poe questioned the amount of ending working capital in
the Solid Waste Fund. Public Works Director Engler stated that some of
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October 26, 1999
Page 7
the funds will be used for construction of a solids handling/decant facility
located at the maintenance and operations facility, and the Solid Waste
Supervisor is conducting a solid waste survey to determine if other
services could be offered by the utility. Councilmembers suggested City
staff look at the current rate structure and the possibility of offering
curbside recycling.
Mayor Booth recessed the meeting at 6:00 PM for a dinner break. The
meeting was reconvened at 6:27 PM.
Assistant Finance Director Supler continued her review of enterprise
funds capital projects.
The Airport Fund includes $875,500 in working capital and $270,000 from
a Federal Aviation Administration grant. Projects slated for 2000 includes
hangar construction, 15th Street land acquisition, hangar roof repair, and
Master Plan update.
Councilmember Wagner questioned the General Fund loan to the Airport
Fund. Financial Operations Manager Crawford stated the Airport Fund
borrowed $45,000 from the General Fund. The loan repayment is
scheduled at $10,000 per year depending on the revenue stream for the
airport. Councilmember Wagner expressed concern with using the
General Fund as a lending agency for the enterprise funds, and setting a
precedent for borrowing funds from the General Fund for the enterprise
funds.
The Cemetery Fund includes $75,000 transferred from the Endowed Care
Fund. Projects for 2000 include Section 9 development, private crypts,
and a Master Plan for the niche building.
The Golf Course Fund includes $130,000 in working capital. Projects for
2000 include rebuilding the 7th green and fairway and developing a
Master Plan for the club house and parking.
Revenue
Assistant Finance Director Coleman presented information on the 2000
estimated revenues.
The General Fund revenues include estimated property taxes of
$9,636,000, $11 million in sales tax, $4,888,900 in utility and business
taxes, $1.2 million in other taxes, $1,088,700 in licenses, permits and
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October 26, 1999
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Co
fines, $1.5 million in intergovernmental revenue, $1.4 million in charges
for services, and $1.2 million from other sources.
Ms. Coleman explained that the motor vehicle excise tax (MVET) is
classified as an intergovernmental revenue as the tax is a state shared
revenue. The MVET tax is not included in the 2000 Budget pending the
outcome of 1695.
The property tax revenue was increased by the amount of the IPD and
estimated sales tax was increased by a little more than one percent.
Other sources of income include transfers in and interest income.
State law requires that the Council conduct a public hearing on property
tax and other revenues and requires submission of adopted property tax
ordinance to the County by November 15. Referendum 47 was passed in
1997, which limits property tax to lesser of 106% or the rate of inflation.
The rate of inflation (IPD) for the 2000 property tax levy is 1.43%.
However, with a finding of substantial need, the Council may increase the
property tax up to 106%. The preliminary budget includes a 101.43%
increase in property tax and the estimated levy rate is $3.04 per thousand.
Assistant Finance Director Coleman briefly discussed a proposed
ordinance, which would protect the additional property tax capacity for
future years. Finance Director Supler stressed that although the Council
could protect the excess amount of property tax and possibly utilize it in
future years, the City cannot go above the $3.10 lid without a voted
general obligation. The amount protected would be approximately
$172,000 in 2000. Councilmember Borden requested staff prepare more
detailed information on the impact of protecting the additional capacity.
Councilmember Poe questioned the need to protect the excess capacity
and spoke against the proposal.
Ms. Coleman explained the components of the increase in property tax
revenues. $137,136 comes from the levy increase of 1.43%, $243,405
from new construction, and $61,493 from new annexations.
Ms. Coleman presented information related to water, sewer, and storm
water rate increases net income for Council review.
Expenditures
Financial Operations Manager Sherri Crawford presented information on
budget expenditures. She began with a comparison of 1999 and 2000 all
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October 26, 1999
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fund expenditures. In 2000 there is a significant increase in capital
expenditures because of the substantial projects scheduled for 2000
including the corrosion control facility, 3rd Street and 277th Street grade
separation projects. Salaries and benefits have increased approximately
four percent overall. Service expenditures including professional services,
communications, utilities and miscellaneous items are increased by
approximately five percent. Intergovernmental services, including King
County Jail and election services, is increased by eleven percent.
Interfund transfers represent transfers from the General Fund to the
capital projects fund for such items as fire apparatus replacement and
downtown revitalization. Supplies are increased by fourteen percent.
Interfund leases represent equipment rental costs and printing costs.
Within the General Fund, salaries and benefits represent sixty-six percent
of the expenditures. Ms. Crawford noted that salaries and wages
increased approximately two percent over last year. Services
expenditures are increased to $6,146,900 and includes Valley Comm
expenses. Transfers out are proposed at $2.2 million and will be
itemized later in this discussion. General Fund capital includes $160,000
rebudgeted for Brannan Park relighting and $420,000 for the complete
wireless Police Department project. Finance Director Supler noted that
the City has experienced increased cost in the supplies area due to
increases in postage and cost of paper supplies.
Capital items budgeted for the 2000 General Fund include: a Court
outdoor sitting area and office modification for $21,000, telephone
upgrades for $25,000, printing press for $60,000, body bunker for $8,000,
$11,000 for service weapons, $5,000 for Explorer Program radios, $6,500
for remodeling the Police reception area, $5,500 for a dishwasher for the
jail, $32,000 for an air compressor and $7,500 for a Cascade system to fill
Fire Department air packs, $7,500 for Fire Department physical
conditioning equipment, $2,700 for a Fire Department outdoor canopy,
$2,400 for a Fire Department washer and dryer, $43,000 for Public Works
filing system and workstation and reception area remodel, $15,000 for
regrouting and sealing the City Hall building, $28,000 for waterproofing
and sealing the records area, $65,000 for recarpeting, $24,000 for traffic
signal controller, $32,000 for auto scope replacement, $8,000 for a Parks
Department equipment lift, $40,000 for a Parks Department mowing unit,
and $20,000 for replacement chairs and furniture. Capital projects also
includes computer hardware and software allocations. It is recommended
to begin budgeting an amount each year for software upgrades that can
be set aside in the 328 Fund for future software upgrades. $80,000 has
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October 26, 1999
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been designated in the 2000 proposed budget for this year's software
upgrades. $60,000 is budgeted for continuing upgrades for computers
and printers. $50,000 is budgeted for server and network upgrades.
$45,000 is budgeted for fiber connection for other sites. $10,000 is
budgeted for professional services in developing a city web page.
Councilmember Singer inquired whether technology could be included in
equipment rental. Finance Director Supler stated that staff is aware of
some cities that use equipment rental for technology, but staff has not had
the opportunity to investigate the feasibility of such a program.
Ms. Crawford reviewed the Non-Departmental Fund expenditures. It
includes $401,900 for retirement payouts, $281,800 for LEOFF I benefits,
$30,000 for an updated Capital Facilities Plan, $50,000 for Y2K, $100,000
for City Hall remodel and improvements, $50,000 rebudgeted for the
Neighborhood Plan, $40,000 rebudgeted for the sensitive areas
ordinance, $400,000 for Endangered Species Act (ESA) impacts for
Public Works and Planning, $45,000 rebudgeted for the millennium
commemoration, $110,000 for LEOFF I long term cato, $160,000
rebudgeted for relighting of Brannan Park, $420,000 for Police wireless
communications.
Councilmember Wagner inquired whether the City Hall remodel includes
the use of the senior center. Mayor Booth indicated the rouse of the
senior center is tied to the renovation of the current library building. If the
library can be renovated, the present senior center facility, with some
modification, could serve to house the parks and recreation staff and
provide a usable space for different types of programs.
Financial Operations Manager Crawford reviewed the General Fund
transfers (Department 98). Proposed transfers from the General Fund
include $300,000 for Arterial Street, $150,000 from Boeing sales tax,
$500,000 for downtown revitalization, $800,000 for fire equipment,
$307,200 for library bond servicing, $68,000 for maintenance and
operations building and road improvements, and $115,000 for the solids
handling/decant facility.
Program improvements recommended for approval include $30,000 for
telephone system upgrades, $13,200 for a color copier, $16,100 for a
regular City Prosecutor (versus the current contract prosecutor), $42,100
for correctional officers (one officer and one home arrest), $141,600 for
two patrol officers, $48,000 for two new police patrol cars, $120,000 for
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October 26, 1999
Page 11
gateway programs, $30,000 for a Parks greenhouse, $30,000 for a Park
15-passenger van, and $230,000 for a solids handling/decant facility.
Program improvements submitted but not recommended for funding
included: $16,100 for a legal administrative coordinator, two correctional
officers (in addition to the two recommended), four patrol officers (in
addition to the two recommended), $649,000 for fire staffing and
apparatus for a third aid unit, $141,500 for an additional Assistant Fire
Chief, $47,000 for a Public Education Specialist, and $7,700 for a full-time
Parks registration clerk.
Fund Balances
Financial Operations Manager Crawford presented information and details
on fund balances and working capital. The purpose of fund balances and
working capital is to provide cash flow resources, provide stability during a
sluggish economy, mitigate effects of legislative impacts, and provide
assurance of fiscal responsibility to bond raters and holders. The City
uses three types of fund balances: designated (with an intended use),
restricted (legally restricted use), and undesignated (available for
operations).
Councilmember Wagner questioned the status of the Cumulative Reserve
Fund. Finance Director Supler stated the fund has been existence for
some time and is a "rainy day" fund to be used for unanticipated
emergencies. The fund contains $3 million, and Ms. Supler advised that
no further contribution to the fund has been recommended.
Financial Operations Manager Crawford explained the process in
estimating the 2000 General Fund beginning and ending balances based
on the projected 1999 ending balances. The proposed 2000 General
Fund Beginning Balance includes $489,700 for designated retirement,
$3.3 million for designated reserve, and $6,879,200 for the undesignated
balance. The proposed 2000 General Fund Ending Balances include
$485,700 in designated retirement, $3.3 million in designated reserve, and
$4,014,100 in undesignated balance.
Ms. Crawford reviewed the Arterial Street fund balances noting that the
Motor Vehicle Excise Tax has been removed pending the outcome of
1695. The 2000 Arterial Street Ending Fund Balance is estimated at
$166,600.
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October 26, 1999
Page 12
The 2000 Cumulative Reserve Fund ending fund balance is estimated at
$3,966,800. Finance Director Supler advised she would research the
restrictions for use of the Cumulative Reserve Fund.
Ms. Crawford reviewed the components of the Capital 328 Fund. The first
component consists of the Council sales tax money received from the
Boeing Company. The proposed 2000 ending balance for the Council
sales tax is $1,540,300. The 2000 Downtown Revitalization ending
balance is estimated to be $500,000. In 2000, the Fire Equipment Fund
will have a $0.00 ending balance. Two aid cars will be purchased this
year and a fire pumper will be purchased in 2000. The Computer
Software component includes a beginning balance of $150,000 and
expenditures of $150,000 for a $0.00 ending balance in 2000. The REET
1 (real estate excise tax) is estimated to have a $1,970,500 ending
balance. The REET 2 is estimated to have a $2 million ending balance in
2000. There was discussion regarding the possible use of the REET
funds. Finance Director Supler advised that REET 1 funds cannot be
used to retire debt. The funds must be used for actual construction costs
and there are specific restrictions on the use of REET 1 and 2 funds.
Finance Director Supler offered to provide the definition of REET 1 and
REET 2 funds and their restricted use at a later date.
Mayor Booth and Councilmembers agreed that another workshop meeting would
need to be held following the outcome of the November 2 general election.
IV. Adjournment
There being no further business to come before the Council this evening, the
meeting adjourned at 8:34 PM.
Approved on the ~O?-~ dayofL~.~ ,~
Charles A. Booth, Mayor
D ~'hielle Daskam, City Clerk