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HomeMy WebLinkAbout02-04-2013 cmroF_ =�-'* • Finance Committee - February 4, 2013 - 5:30 PM Annex Conference Room 1 NVASHINGTON MINUTES I. CALL TO ORDER Chair John Partridge called the meeting to order at 5.30 p.m. in Annex Conference Room 1 located on the second floor of the City Hall Annex at One East Main Street in Auburn. A. _Roll Call Chair John Partridge, Vice Chair Largo Wales, and Member John Holman were present. Ciiy officials and staff members present included: Mayor Peter B. Lewis, Deputy Mayor Nancy Backus, Public Works Director Dennis Dowdy, Planning and Development Director Kevin Snyder, City Attorney Daniel B. Heid, Finance Director Shelley Coleman, and City Clerk Danielle Daskam. Also present were Lindsay Sovde of Seattle Northwest Securities and Scot Pondelik. B. Announcements There was no announcement. C Agenda Modifications A revised Resolution No. 4903 was distributed prior to the meeting. Discussion of Ordinance No. 6451 was moved ahead on the agenda and immediately followed the Consent Agenda items. II. CONSENT AGENDA A. January 22, 2013 regular meeting minutes Vice Chair Wales moved and Member Holman seconded to approve the January 22, 2013 minutes. MOTION CARRIED UNANIMOUSLY 3-0 B. 2012 Claims Vouchers (Coleman) 2012 claims check numbers 419991 through 420104 in the amount of $1,140,982.89 and dated February 4, 2013. Committee members reviewed the claims and payroll vouchers and. briefly discussed claims vouchers 420170, 420028, 420042, and Page 1 of 6 420329. Vice Chair Wales moved and Member Holman seconded to approve and forward claims and payroll vouchers to the full Council for consideration. MOTION CARRIED UNANIMOUSLY 3-0 C 2013 Claims Vouchers (Coleman) 2013 claims check numbers 420105 through 420354 in the amount of $1,020,319.21 and two wire transfers in the amount of $5,920.69 and dated Feliruary 4, 2013. Please see 2012 claims vouchers above for action on 2013 claims vouchers. D Payroll Vouchers (Coleman) Payroll check numbers 533572 through 533601 in the amount of $263,434 11 and electronic depos'it transmissions in the amount of $1,204,471 05 for a grand total of$1,467,905.16. Please see 2012 claims vouchers above for action on payroll vouchers. I I I. ORDINANCES A. Ordinance No. 6446 (Coleman) An Orclinance of the City Council of the City of Auburn, Washington, establishing the Local Sales and Use Tax rate for Local Revitalization Financing for 2013 Finance Director Coleman stated that each year the City must pass an ordinance establishing the Local Sales and Use Tax rate for the year (State's fiscal year of July 1 - June 30). The City first applied for local revitalization financing in 2009 granting a project award of $250,000 annually The tax credit is available to the City for up to 25 years. The City will be in its fourth year of receiving the tax credit. Finance Director Coleman reported that the debtservice on the_project will 'be approximately $470,000 in 2013. The tax credit and REET2 funds are used for debt service. Vice Chair Wales moved and Member Holman seconded to approve and forward Ordinance No. 6446 to the full Council. MOTION CARRIED UNANIMOUSLY 3-0 IV RESOLUTIONS Page 2 of 6 A. Resolution No. 4894 (Coleman) A Resolution of the City Council of the City of Aubum, Washington, authorizing the City of Auburn to impose a Sales and Use Tax as authorized by RCW 82.14 415 as a credit against State Sales and Use Tax relating to annexations Finance Director Coleman presented Resolution No. 4894 The Resolution levies the 1% sales tax credit against the state sales tax for annexation of the Lea Hill area. The City finds that the projected cost to provide municipal services to the annexation area is $5.8 million, which exceeds the projected general revenue of $5.2 million the City would othervvise receive from the annexation area on an annual basis. The Resolution authorizes the Finance Director to set the threshold for imposing the sales and use tax credit at $2,083,132.00 for the Lea Hill Annexation area. �ce Chair Wales moved and Member Holman seconded to approve and forward Resolution No. 4894 to the full Council for consideration. MOTION CARRIED UNANIMOUSLY 3-0 V DISCUSSION ITEMS A. 22nd Street High Consumption (Coleman/Dowdy) Grant a water utility adjustment.to three utility accounts for higher than normal consumption recorded on customer meters. Finance Director Coleman reported three residential utility customers contacted Finance over a period of approximately six weeks regarding high bills due to higher than normal consumption. Staff conducted a field investigation and determined there was no leak and the meters were working properly However, the three customers insisted that they had not used the quantity of water recorded by the meters. Finance and Engineering staff reviewed the matter and determined that a construction project had been in progress in the area during the time of high consumption. The three meters were replaced and upon further testing, the cause of the high consumptions through the meters remains undetermined. The customers accounts are in good standing and the customer's consumption histories show that each experienced unusual usage. It is recommended that the Council approve a water utility adjustment to the three utility accounts for higher than normal consumption. The request was reviewed by the Public Works Committee and will be Page 3 of 6 considered as part of the Consent Agenda at tonight's Council meeting. B. ,Ordinance No. 6451 (Coleman) An Ordinance of the City of Auburn, Washington, relating to the combined utility systems of the City; providing for the issuance of one or more series of utility system revenue bonds of the City in the aggregate principal amount of not to exceed $13,000,000 (1) to pay a portion of the cost of certain improvements described herein, (2) to make a deposit to the debt service reserve account, and (3) to pay the costs of issuance and sale of the bonds; fixing or setting parameters with respect to certain terms and covenants of the bonds; appointing the City's designated representative to approve the final terms of the sale of the bonds; and providing for otherrelated matters. Ordinance No. 6451 was discussed immediately following action on the Consent Agenda items. Finance Director Shelley Coleman introduced Lindsay Sovde of Seattle Northwest, the bond undervuriters. Ordinance No. 6451 was prepared by the bond attorney, who could not attend the meeting this evening. The ordinance provides for tlie sale of revenue bonds to finance approximately $11.5 in utility projects. Ms. Sovde briefly reviewed the bond ordinance and pointed out Section 4, which delegates authority to sell the bonds within certain parameters that guide 4he financing. Recent legislation allows such a delegation ordinance that allows the Mayor or Finance Director to sign the bond purchase contract and allows more flexibility for bond pricing. Previous bond ordinances limited #he ability to when bonds could be priced—typically on a Council meeting day so that the ordinance could be adopted that night. � The bond ordinance provides for the issuance of $11.5 million in bonds that must be purchased before December 31, 2013. The interest rate cannot exceed five percent and the maturity date is not later than twenty years from issue. Ms. Sovde distributed a one-page handout that contained a General Obligation Bond Buyer Index History and a financing update for the VNater and Sewer Revenue Bonds, 2013 A&B as of January 25, 2013. Ms. Sovde stated that investors are interested in purchasing premium bonds as opposed to par or discount bonds. The premium bonds provide more upfront cash for a higher return fo�the investor over the life of the bond. Ms. Sovde stated that issuing $10.8 million in premium bonds will provide the City with $11.5 million. The average annual debt senrice on the bonds is approximately $786,000 Page 4 of 6 Projects to be funded by the bond sale are included in Exhibit A of the ordinance and include: Fulmer Well Field Improvements, Well 4 Power and Chlorination, Water Repair and Replacements, Lakeland Hills Reservoir and Improvements, Water Meter and Billing Improvements, BNSF Utilities Crossing (Water), Auburn Way South Flooding Phase 2, 30th Street NE Area Flooding Phase 1 and BNSF Utilities Crossing (Storm Drainage). It is anticipated that the bond sale will occur February 28, 2013 and the proceeds distributed by mid March. Ms. Sovde briefly discussed the benefits and restrictions of issuing bank qualified bonds. Member Holman congratulated Mayor Lewis and Finance Director Coleman on the City's AA rating. Director Coleman stated Ordinance No. 6451 will be presented to the Committee again on February 19, 2013 for action. C. Resolution No. 4903 (Dowdy) A Resolution of the City Council of the City of Aubum, Washington, authorizing the Mayor to accept a federal grant to be administered fhrough the Washington State Department of Transportation for the South 277th Street Corridor Capacity and Non-Motorized Trail Improvement Project Public Works Director powdy presented Resolution No. 4903, which will authorize the acceptance of a federal grant in the amount of $1,020,700.00 to finance the design, environmental permitting and property acquisition phases of the South 277th Street CoRidor Capacity and Non-motorized Trail Improvement Project. The federal grant requires a 13.5% match from local funding sources. Funds from the 102 Fund will provide the local match. D Ordinance No. 6341 - Current Fee Deferral Program (Tate) Committee to discuss the City's Fee Deferral Program currently scheduled to expire on April 4, 2013. Fee deferrals pertain to impact fees and system development charges for residential and non- residential development. Planning and Development Director Snyder reminded that Ordinance No. 6341, adopted in 2011, allows an applicant to defer payment of impact fees and system development charges for residential and non- residential development from the time of permit issuance to either certificate of occupancy or closing on the sale of a property The deferral can be no longer than 18 months from the date of permit issuance. Page 5 of 6 Director Snyder stated that Ordinance No. 6341 provided a finro-year pilot program on fee deferrals. The program is slated to expire April 4, 2013. Director Snyder reported staff believes the program is a success and has met the goals and expectations of Council. The City has established good internal corrtrol procedures, the City has not had to initiate any enforcement actions because all fees have been paid on time. Director Snyder advised that the Planning and Community Development Committee reviewed the Ordinance at its last meeting and recommended extending the Ordinance in perpetuity by eliminating the sunset clause. VI ADJOURNMENT There being no further business to come before the Committee, the meeting adjourned at 6:35 p.m. APPROVED this 19th day of February, 2013 � � J- n Partridge, Chair Danielle Daskam, City Clerk Page 6 of 6