City Council Committee Agendas

Mount Vernon City Council Finance Committee Minutes July 22, 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 Jerry Dodd, Community Development Director Bob Hyde, Fire Chief Roy Hari, City Attorney Kevin Rogerson 1. Committee minutes from June 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 June 2015 collections are 6.3% higher than the same period in 2014.  Motor Vehicle Fuel Tax – The January to June 2015 collections are 1.6% greater than the same period in 2014.  Building Permits - Activity is up .9% for the January through June 2015 period compared to the same period in 2014 and is in-line with the budget estimate of $510,000.  REET - for January through July 2015 is 78% higher compared to the same period in 2014, and is trending ahead of the budget estimate of $350,000 for the year; project $500,000 for the year.  Utility Taxes:  Electricity tax is down 12% Jan-June 2015  Gas tax is down 8% Jan-June 2015  Combined decrease of electricity and gas could result in revenues being $154,000 below budget estimates for the year.  PUD water utility tax: Due to the delayed start in implementation of collection of the tax coupled with the 21% exemption for fire suppression this revenue could be $150,000 below budget estimates for the year. It is too early in the year to adequately predict what will occur with this new revenue source at this time.  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.  Expenditures through June 30, 2015 were reviewed in summary with the Committee. As of June 30, 2015 the Governmental Operating Funds are 47% spent when compared to the annual budget. City of Mount Vernon Finance Committee July 22, 2015 Page 2 3. Draft Financial Management Policies were reviewed and discussed. Ms. Huschka continued to review draft fiscal policies with the Committee. Previous discussions and reviews have addressed over-riding policies, revenue and expenditure policies, and reserve policies. The Committee was reminded of the proposed reserve policies for City funds and general consensus was reached regarding setting levels of reserves. Debt management policies were introduced to the Council and discussed. The next step will be to present these policies to City Council and formally request that the policies be adopted. 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: Ms. Huschka reviewed various options that are available or potentially available for financing capital projects. A history of grant revenues received by the City from federal, state and local agencies was presented from 2007 to 2014. Current outstanding debt was reviewed with the Committee also. 5. City of Mount Vernon debt: Alicia provided an overview of the City’s debt. General Government debt at year end 2014 is $2,990,000; Utility debt at year end 2014 is $27,295,000. Total city debt is $30.3 million this is well within the general purpose debt limit of $60,554,919. 6. Human Resources Update: Employee Healthcare: Ms. Bartlett indicated that due to an increase in rates that AWC will be charging for employee healthcare she is investigating other healthcare insurance options. The Employers Health Coalition of Washington is a favorable option for medical care coverage that the City is pursuing. A possible agreement could be brought to Council for approval in August or September 2015. Adjourned at 7:00 p.m. Submitted by Morgan Morrison