City Council Committee Agendas

Mount Vernon City Council Finance Committee Minutes February 27, 2013, 2013 Present: Councilmembers Ragan, Molenaar, Quam, Lindquist, Hulst and Mayor Boudreau Staff present: Finance Director Alicia Huschka, Police Chief Dodd, Public Works Director Bell, Human Resources Director Bartlett 1. January 2013 minutes were reviewed and approved. 2. Review Major Revenues. Alicia reviewed major revenues received in 2012:  Property tax - in 2012 the City collected $96,595 more than budgeted due to the collection of taxes being higher than estimated. Each year’s budgeted property taxes have an estimated collection rate of 98.5% to 99%.  Sales tax - 2012 was 3.7% higher when compared to 2011. February 2013 collections are up 4.2% higher than February 2012.  Criminal justice sales tax – 2012 was 5.6% higher than 2011.  Motor vehicle fuel tax – 2012 was 1.6% less than 2011.  Building Permits – 2012 budgeted revenue was $350,000; actual revenue was $541,000.  Utility Taxes- 2012 collections were down 1% compared to 2011. 3. Administrative Overhead Cost Allocation Plan: Alicia reviewed the City’s administrative overhead cost allocation plan with the Committee. Indirect costs are only allocated to operating funds other than the governmental operating funds, which are the three City utilities and the Equipment Maintenance & Replacement Fund. The Utilities (Enterprise Funds) should be run like a business and should pay for services provided in order to run the business; costs must be equitable and reasonable. Many departments in the General Fund provide administrative support, and charges are calculated based on statistical and supportable data.  For 2013 the budget reflects the following expenses to the utilities that are recorded as revenue for the General Fund:  Wastewater Utility 572,109  Solid Waste Utility 265,765  Surfacewater Utility 128,720  Equipment Rental 116,268 $1,082,862 4. County Request for GI Funding: Mayor Boudreau received a letter from Skagit County Public Works dated January 25, 2013 requesting cities, towns and dike district partners to contribute towards the cost of the G.I. Study, stating “…that even a small level of financial assistance from our community partners sends a powerful message to our federal delegation…” The letter states that Skagit County’s share of the cost of this study is $600,000 in 2013 and 2014. The Finance Committee discussed this request at length noting that the City’s downtown flood control project of $27.3 million is one of the projects in the study and this is where the City is spending its dollars. Also, the City has made efforts to work with the County so that City of Mount Vernon Finance Committee February 27, 2013 Page 2 they may get a credit of local match dollars on future flood protection projects of possibly $10 million resulting from the City’s downtown flood project. Next steps: staff and Mayor will draft a letter of response back to the County and will provide a draft copy to Council for review before sending it to the County. 5. Lincoln Theatre: First request, the Lincoln Theatre has requested that the City continue paying the utility expenses for the Lincoln Theatre for 2013. The only committee member that favored this request was Dale Ragan. Second request, they also requested $12,000 from the City towards their capital campaign to raise $102,000 to purchase digital equipment. It was the consensus of the Committee to not offer any funding at this time but have them report back to the City in October/November to see what progress has been made on the campaign. No funding level was offered or discussed in detail. 6. Other Updates:  Skagit County Economic Development Grants Update: This is the rural county/distressed county grant program. The cap is $500,000 per project and must be public infrastructure. There has been some indication that there could possibly be legislative activity that could eliminate the state sales tax rebate of 0.09%. If this were to occur then the payback of bonds would not have a dedicated funding source. The County was going to consult with their bond counsel regarding this issue, and would wait until after the close of the 2013 legislative session before determining if there would be a round of applications later in 2013.  Cost savings related to Council packets going paperless: The City is saving approximately $600 per year in postage and $300 per year in paper supplies.  Staffing updates and Salary Schedule changes: The Finance Department and City Attorney’s office have two people out on extended leave. A temporary staff person has been hired who is splitting their time between these two offices. In the street department two staff members are out and two 8-month positions are being utilized to help fill that gap. The Committee was updated on a couple proposed salary schedule changes. 7. Waterfront Project: Esco talked about the phase II project schedule and mid -May is the estimated start time for construction. This is a 12 to 18 month project. Esco also talked about looking at a local construction management team for this project. Adjourned at 6:58 pm Submitted by Rebecca J. Wade