City Council Committee Agendas

Mount Vernon City Council Finance Committee Minutes June 24, 2015 Present: Councilmembers Urban, Fiedler, Molenaar, Lindquist, Quam, Hulst, Ragan, Mayor Boudreau Staff present: Finance Director Alicia Huschka, Human Resources Director Kandy Bartlett, Police Chief Dodd, Community Development Director Hyde, City Attorney Rogerson 1. Committee minutes from May 2015 were approved. 2. Financial Update: Ms. Huschka discussed aspects of the budget to actual revenue. • Sales Tax – Ms. Huschka reviewed the sales tax revenue to date. The January to June collections are 1.2% higher than the same period in 2014. • Criminal Justice Sale Tax – The January to May 2015 collections are 6% higher than the same period in 2014. • Motor Vehicle Fuel Tax – The January to May 2015 collections are 1.8% greater than the same period in 2014. • Building Permits - Activity is up 12% for the January through May 2015 period compared to the same period in 2014 and is ahead of the budget estimates of $510,000. • REET - for January through June 2015 is 90% higher compared to same period 2014, and is trending ahead of the budget estimate of $350,000 for the year. • Utility Taxes: • Electricity tax is down 11% Jan-May • Gas is down 8% Jan-May • Results could be combined for a decrease of $154,000. • PUD there is not enough data yet to create a trend; however early estimates indicate this revenue could be $150,000 lower than the budgeted estimate. • Combined, the decreased collections from utility tax could result in a $300,000 reduction in revenue for the year. Due to open positions in the Police Department, the reduction in revenue may be absorbed by the reduction in budgeted expenditures. Ms. Huschka will keep the Committee updated as the months progress. 3. Draft Financial Management Policies were reviewed and discussed. • Revenue Policies – The City has accumulated in excess of $700,000 of banked levy capacity for property taxes. Mr. Hulst said that he believes that the Council should set a policy that would limit the amount that the Council could utilize of banked levy capacity in any given year. With the current banked levy capacity allowing for an 11% increase in property taxes, he is concerned that a future Council would impose the full amount. Mr. Rogerson confirmed that this would not be an enforceable action as a future Council could vote to change the policy. City of Mount Vernon Finance Committee June 24, 2015 Page 2 The committee discussed this topic in detail and concluded that no policy limiting the use of banked levy capacity will be further pursued. • Reserve (Fund Balance Policy) – Ms. Huschka has researched various cities and presented their various Fund Balance reserve policies. Ms. Huschka also presented historical fund balance levels for the City’s governmental operating funds from 2004 to 2014, with an example recommended target of 10% for the Streets, Parks and Library Funds and a 15% target for the General Fund, excluding one-time revenues, CDBG entitlement grant and public safety jail sales tax. Reserve balances of other funds will be set during the annual budget process. • The financial management policies once adopted will be reviewed and modified if necessary, as part of the annual budget process, and incorporated into the annual adopted budget document. 4. Capital Improvement Plan Financing Options for Projects – postponed to the next meeting 5. Other • Jail Medical Care Subsequent Agreement to the Jail agreement: This addresses medical costs of inmates and new methodology which results in an ‘all in’ approach for medical costs & fit for jail costs. This agreement will be presented to City Council for action in the next month. • Annual Audit: The auditors are completing their audit and an exit conference will be scheduled soon. • Pending projects in Finance- working with Human Resources on a lag payroll process; RFP for banking services; and working on updating the business license code so the City can transition to licensing with the State. • Public Defense reimbursement for fees for service – Mr. Stendal presented said the City is being required to pay no more than approximately $135 per case for certain prior years. This will result in a cost to the City of between $25,000 and $28,000. • Police Lieutenants compensation- Ms. Bartlett reviewed with the Committee a proposal to increase compensation for Police Lieutenants. As a result of recent union contracts, compression is occurring between the Sergeants and Lieutenants. She recommends creating a policy that the top step for a Police Lieutenant be paid a certain percent above the base salary of a Police Sergeant and creating a Lieutenant range with 2 steps and eliminating the current 6. The cost to the City in 2015 would be $5,000. Five Sergeants are eligible for the open lieutenant position which will be opened for application this year. Adjourned at 7:00 p.m. Submitted by Rebecca J. Wade