Finance Committee

City Hall Meeting Minutes 601 4th Avenue E Olympia, WA 98501 Finance Committee Information: 360.753.8447 Friday, October 23, 2015 3:00 PM Room 207 Special Meeting 1. ROLL CALL Present: 3 - Chair Jim Cooper, Committee member Nathaniel Jones and Committee member Cheryl Selby 2. CALL TO ORDER Chair Cooper called the meeting to order at 3:03 p.m. 3. APPROVAL OF MINUTES - None 4. COMMITTEE BUSINESS 4.A 15-1010 Oral Reports - Status Reports and Updates (Review of Preliminary 2016 Operating Budget) City Manager Steve Hall presented a list of budget priorities/initiatives for 2016 and stated there will be no recommended program cuts. One position was eliminated and the work was distributed among other employees. Mandatory increases in expenditures (PERS insurance premiums and wage adjustment) were worked into the budget with a substantial impact to the General Fund. Mr. Hall reviewed items that are funded in the 2016 budget and highlighted a few operational and capital critical needs that will not be funded in 2016. One example of an unfunded need is the sign code ordinance that is out of date and confusing. The City is hoping to fund this update out of development fees. Marijuana sales revenue is not included in the budget, but is estimated to be around $50,000. This revenue must be used toward public safety programs or enforcement. Sales tax has a strong projection for 2016, but is expected to decline in a year or two. Presently, the largest portion of sales tax revenue comes from auto sales and the auto dealers believe we are experiencing a temporary boom in sales as the economy begins to rebound. The Transportation Benefit District (TBD) Board has the option of raising an additional $1 million per year as a result of new legislation that allows the annual TBD fee to be increased to $50 per vehicle (up from $20). Mr. Hall next presented a summary of the City's achievments in 2015. He suggested putting some of these items in an annual report to citizens. He stated the Communications Department would be able to put an annual report together. City of Olympia Page 1 Finance Committee Meeting Minutes October 23, 2015 Chair Cooper mentioned there are two conversations he would like to have at a future meeting: 1) The possibiltiy of sales tax exemptions for locally-produced art. 2) The possibility of a waiver on the admissions tax if 80-90% of bands booked at a venue are local artists. The report was discussed and continued to the Finance Committee on November 13, 2015. 4.B 15-0920 Review Proposed 2016 Utility Rates and General Facility Charges Public Works Water Resources Director Andy Haub, Public Works Waste ReSources Associate Director Dan Daniels, and Utility Advisory Committee (UAC) Vice Chair Margaret Drennan spoke to the Committee to review proposed 2016 utility rates and general facility charges (GFCs). Mr. Haub said the UAC met and made rate recommendations. The Water Resources department concurred with the recommendations. The Utility is finanacially stable and sound. They are trying to maintain services. The rate increases are to maintain current service levels. Rate increase details are presented in Mr. Haub's staff report. Mr. Haub also mentioned citizens and businesses are already doing everything the City has asked them to do to promote water conservation efforts. The only other area to examine is internal leakage, which is about 8%. That figure is on par with industry standards, but could be an area of consideration. Capital program drivers are: - Log Cabin reservoir = $12M - Fones Rd booster pump = $3.5M - McAllister Wellfield aeration to alter pH = $6M The proposed increases in GFCs reflect advice from the Accounting staff. Incentives on GFCs must be data-driven and have an impact on the utility. Mr. Haub explained incentivizing economic development through utility rates is different for many reasons, including the fact that users are not the builders/developers. Mr. Daniels began his part of the conversation by noting no excess reserves will be used to soften rates in 2016. Thurston County's tonnage fees are projected to increase between 2016 and 2019. Waste ReSources purchased a new truck for $350,000 to handle the additional 1,000 addresses coming in 2016 with recent annexations. Waste ReSources hired no new staff. One-side-of-the-road collection is expanding. This will allow the department to meet increased demand without adding staff. One temporary part-time employee was converted to full-time to keep up with downtown graffiti and the yard waste drop-off site. This person will coordinate with the Clean Team. Mr. Daniels informed the Committee the Waste ReSources department is working with the Big Whiskey Saloon on placing a big garbage container on their property City of Olympia Page 2 Finance Committee Meeting Minutes October 23, 2015 (within a gated area) that area businesses can roll their carts over to and dump them. The container will alert the department when it is full and the department can come collect. This prevents garbage trucks from going up and down alleys so many times. Mr. Daniels noted the seven-year renewal cycle on trucks is built into the budget. Rate increase details may be found in Mr. Daniels' staff report. Committee member Selby moved, seconded by Committee member Jones, to recommend utility rate changes as proposed be approved by City Council. The motion passed unanimously. 5. ADJOURNMENT Chair Cooper adjourned the meeting at 4:58 p.m. City of Olympia Page 3