City Council Committee Agendas

Mount Vernon City Council Finance Committee Minutes May 27, 2015 Present: Councilmembers Urban, Fiedler, Molenaar, Lindquist, Quam, Hulst, Ragan, Mayor Boudreau Staff present: Finance Director Alicia Huschka, Police Chief Dodd, City Attorney Rogerson, Community Development Director Hyde, Street Department Supervisor Brickley, Public Works Director Bell 1. Committee minutes from April 2015 were approved. 2. Financial Update: Ms. Huschka discussed aspects of the budget to actual revenue. The City’s revenue could be lower than budgeted estimates in a few specific areas of utility tax revenue. These reductions are potentially absorbable through some expenditure items that will be lower than budgeted. We will continue to monitor these specific areas and keep the Committee apprised of the situation. • Sales Tax – Ms. Huschka reviewed the sales tax revenue to date. The January to May collections are 1.13% higher than the same period in 2014. • Criminal Justice Sale Tax – The January to April 2015 collections are 6.2% higher than the same period in 2014. • Motor Vehicle Fuel Tax – The January to April 2015 collections are 1.8% greater than the same period in 2014. • Building Permits - Activity is up 20% for the January through April 2015 period compared to the same period in 2014 and is in line with budget estimates of $510,000. When the permit for the jail is filed it will be reported to Council as a separate number. • REET – The January through May 2015 revenue is 107% higher compared to same period 2014. • Utility Taxes: These revenues are $154,000 below the same period in 2014 • Electricity tax is down 15% Jan-April 2015 compared to same period in 2014. • Gas is down 9% Jan-April 2015 compared to same period in 2014. • Due to the delayed start of collection of the new water utility tax by PUD, coupled with the 20% fire suppression reduction of water revenue subject to the utility tax, the revenue estimate for water utility tax could be overstated by approximately $150,000 for 2015. 3. Presentation of Transportation Benefit Districts – Ms. Huschka and Public Works Director Bell presented to Council the concept of establishing a Transportation Benefit District (TBD) in the City of Mount Vernon. Specifics of a TBD were presented along with statistics of how many cities have implemented this new funding mechanism. A TBD is a quasi-municipal corporation and independent taxing district that is created for the sole purpose of funding transportation improvements within the district. These are created by ordinance and some of the revenue options are subject to voter approval. The process to establish a TBD requires public hearings and adoption of an ordinance. Voter approval is required if the Council City of Mount Vernon Finance Committee May 27, 2015 Page 2 establishes a TBD that will gain revenue from an excess levy on property tax; an increase in sales and use tax; vehicle tolls; or annual vehicle fee above $20. Voter approval is not required if an annual vehicle fee of up to $20 is established or a transportation impact fee is assessed against commercial and industrial buildings. The benefit of a program like this is the clear association between the fee to vehicles and the work on roadways. The Street Department has been operating at a reduced capacity as the workforce was cutback during the recent recession, in addition to the reduced amount of funds dedicated to the annual overlay program. However, roadways continue to deteriorate at a normal rate. The City can restore maintenance levels with increased funding and the PFD provides an avenue of funding dedicated to street maintenance. 4. Jail Finance Committee Update: Ms. Huschka gave an update from the Jail Finance Committee. The County hired a new cost estimator which has resulted in an estimated project cost increase which the project team is addressing to get the project back on budget. Bid opening is expected to be mid-August 2015, with a completion date estimate of March 2017. An amendment to the Jail Agreement will be presented to Council in the next month or so addressing medical costs of inmates and fit-for-jail costs. This is an area that the Committee has spent a significant amount of time discussing and collaborating on. The goal is to make the changes for medical inmate costs effective July 1, 2015 pending approval by City Councils and the County. 5. Financial Management Policies, Development and Discussion: Delayed to a future date. Adjourned at 7:00 p.m. Submitted by Rebecca J. Wade