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10/16/2018 - MinutesRole of the Finance Committee The finance committee provides oversight of city budgeting, financial planning, and financial reporting. The committee recommends long-range financial goals along with funding strategies for the operating and capital budgets. Human resource issues requiring policy direction are brought before the committee. The committee serves as the advisory forum for transportation and street maintenance funding, and funding relating to the transportation benefit district. City of Port Orchard Council Finance Committee A meeting of the Council Finance Committee was held in the Council Chamber Meeting Room at City Hall on October 16, 2018 at 4:00 p.m. PRESENT: Chairman John Clauson, council members Beck Ashby and Shawn Cucciardi, Mayor Rob Putaansuu, Finance Director Noah Crocker, The meeting was audio recorded. Finance Report The sales tax revenue collected thru the end of September 2018 at being 9.6% over its 2018 projection. Real Estate Excise Tax has remained strong for 2018, with total year-to-date collections at $572,755. Although, when compared to the same time period for 2017, it is approximately $119,226 less. REET still remains higher than the 5 year average. The committee reviewed fund balances including the impact of obligations. The tables identify all anticipated obligations for capital projects along with the fund balance reports. When reviewing these tables, it can be identified what is budgeted for versus what will be obligated during the next biennium. The capital projects, potential change orders, claims, as well as future projects provide a different picture of ending fund balance during the 2019-2020 biennium. The finance department is taking a financially conservative approach to plan for future expenses. Tremont Widening Project Finance Director Crocker provided members the Tremont Widening Project Construction Finance Plan. The committee walked through the expenditure plan and compared year-to-date budget to year-to-date actuals. Thus far, the project has spent approximately $9.9 million and is anticipated to be completed by June. Capital Project Status Updates Finance Director Crocker provided members a review of all capital projects utilizing the project management spreadsheet. They discussed any change orders and additional funding needed for projects. Several of the projects currently do not have complete funding in the budget. However, the Finance department has identified additional funding sources to fully fund the projects. These budgets will be amendments as a part of the final budget amendment in December. The Park Impact Fee Fund, Recreation Reserve Fund, REET funds and Transportation Impact Fees will used to fully fund the projects. Role of the Finance Committee The finance committee provides oversight of city budgeting, financial planning, and financial reporting. The committee recommends long-range financial goals along with funding strategies for the operating and capital budgets. Human resource issues requiring policy direction are brought before the committee. The committee serves as the advisory forum for transportation and street maintenance funding, and funding relating to the transportation benefit district. Water Sewer Fund Split: The Finance Director reminded the Finance Committee of a prior discussion to separate the enterprise funds into standalone funds. The proposal is as follows: Eliminate Fund 401 (Water Sewer) Eliminate Fund 403 (Water Sewer Cumulative Reserve) Convert Fund 422 from Storm Cumulative Reserve to Storm Stabilization Create Water Funds: Fund 411- Water Operations Fund 412- Water Stabilization Fund 413- Water Capital Construction Fund 414- Water Debt Service Create Sewer Funds: Fund 431- Sewer Operations Fund 432- Sewer Stabilization Fund 433- Sewer Capital Construction Fund 434- Sewer Debt Service Create Storm Funds: Fund 421- Storm Operations Convert Fund 422- Storm Stabilization Fund 423- Storm Capital Construction Fund 424- Storm Debt Service Equipment Rental and Revolving Fund: The Finance Director described the progress and process with the ERR, as well as discussed the upcoming ordinance. Completed: • Adopt Ordinance establishing the ERR Fund--- COMPLETED • Adopt an ERR Policy--- COMPLETED Next Steps: • Adopt Budget Amendments to move current cumulative Equipment Reserves to the ERR Fund • Monies from funds 303, 402 and 422 to Fund 500 • Adopt 2019-2020 Budget of Rental Payments to Fund 500 for the following: • Replacement • Operations • Maintenance • Adopt 2019-2020 Budget for Capital Purchases and Vehicle Replacements Role of the Finance Committee The finance committee provides oversight of city budgeting, financial planning, and financial reporting. The committee recommends long-range financial goals along with funding strategies for the operating and capital budgets. Human resource issues requiring policy direction are brought before the committee. The committee serves as the advisory forum for transportation and street maintenance funding, and funding relating to the transportation benefit district. Biennial Budget In preparation for the study session in the evening, the Committee reviewed the preliminary budget information in detail including the following: • Mayor Budget Highlights • 2019-2020 Biennium Budget Fund Summary page • Preliminary Budget Books • 2019-2020 Mid-Year Review items • Budget was built around the Comprehensive Plan and the Council Retreat • Discussed the Capital Projects identified • Discussed the Operational Budget • Discussed the timing of the upcoming director interviews on Friday • Discussed the ER&R budget • Discussed the timing of transfers and payments Good of the Order: The meeting adjourned at 6:25 pm. Next meeting November 20, 2018 at 5:15 p.m.