City Council Committee Agendas

Mount Vernon City Council Finance Committee Minutes September 24, 2014 Present: Councilmembers Fiedler, Molenaar, Quam, Hulst, Lindquist, Ragan, Urban and Mayor Boudreau Staff present: Finance Director Alicia Huschka, Parks and Recreation Director Otos, City Attorney Kevin Rogerson and Police Chief Dodd 1. August 2014 Committee minutes were approved. 2. Financial Update  Sales tax collection for January to September 2014 is up 4% compared to the same period in 2013; assuming no further increases the 2014 annual increase would be 2.7% compared to 2013.  Property tax banked capacity is approximately $621,000 and a 1% increase would be approximately $70,000.  Building Permit revenues for January to August 2014 are down 11% compared to the same period in 2013; however, actual collections are slightly ahead of revenue budget estimates.  Real Estate Excise Tax is 11% less than the same period in 2013; however collections are slightly ahead of revenue budget estimates for the year.  Voted Bond Debt will fully mature in 2017. The amount that will be needed to service this debt is lower than in previous years and will be eliminated in 2017.  Criminal Justice Sales Tax for January to August 2014 is up 2.2% compared to the same period in 2013.  Motor Vehicle Fuel Tax revenues for January to August 2014 are up 1.25% compared to the same period in 2013.  Utility Tax is the third largest revenue source. The City does not charge a utility tax on water as PUD is the provider of water to the City. A recent court ruling indicates that cities can now impose a utility tax on PUD water. Council would have to pass an ordinance imposing the tax before it could be implemented. The tax rates that different cities charge around the state vary greatly. 3. Transportation Benefit Districts (TBD). Alicia explained that TBD’s are a quasi-municipal corporation created for sole purpose of funding transportation improvements. They are created through the legislative authority of a county or city. The TBD can impose an annual vehicle fee of up to $20 annually. Forty-two cities in the state have imposed the fee. The revenue from this must be dedicated to street related activity. 4. Alicia presented a preview of major budgetary impacts that will affect the 2015 budget including items such as new cost related to the comprehensive plan, medical insurance for certain part-time employees under the Affordable Healthcare Act, five percent premium increases for medical insurance, increases to fees paid to Skagit 911, rebuilding equipment rental rates, and increased cost of public defense and related services. These new City of Mount Vernon Finance & Economic Development Committees September 24, 2014 Page 2 expenditures add up to $1.1 million and will need to be addressed in the 2015 budget. Some positive impacts that will be realized in 2015 include an increase in sales tax revenue, a decrease to jail costs, and a few other areas that add up to approximately $600,000. 5. Larry gave a review of the status of the Downtown Restrooms project. The project is a public work project which means that prevailing wages will be paid. Peter Carletti of Carletti Architects presented a recap of potential remodeling of the Teamsters building and reviewed costs should the city choose to demolish and build new at the same location. Adjourned at 7:00 p.m. Submitted by Rebecca J. Wade