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04/24/2018 - 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 April 24, 2018 at 5:15 p.m. PRESENT: Chairman John Clauson, members Beck Ashby and Shawn Cucciardi, Finance Director Noah Crocker, Public Works Director Mark Dorsey The meeting was audio recorded. Finance Report Finance Director Crocker presented the sales tax collection report that reflects sales tax revenue collected thru the end of April 2018 at being 7.7% over its 2018 projection. Real Estate Excise Tax has started strong for 2018, with total year-to-date collections at $193,920. Although, when compared to the same time period for 2017, it is approximately $132,546 less. REET still remains higher than the 5 year average. The committee reviewed cash reports and identified the City as having healthy fund balances at this time. 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 $6 million and remains on track. The plan will be updated monthly and as the project progresses expenditure trends will become more apparent. Public Works Director reported on a recent project status change. He explained there would be a change order authorization request in the amount of $250,000. This change order is for sewer main replacement work. Although this will be the first change order, the project is still within its budget authority due to a $1 million contingency amount for the project. Once the change order is finalized it will be brought forth to council for adoption with the identification of any budget adjustments as needed. Budget Amendment Ordinance: The Finance Director provided the finance committee with a high-level overview of the budget amendments. The budget amendments will achieve the following goals: 1) Provide additional expenditure authority for Well #9 in the amount of $239,000 to be paid from Fund 403 Water Reserves 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. 2) Provide additional expenditure authority for McCormick Park in the amount of $390,581 3) Return $286,750 of REET 2 funds; originally pledged to McCormick Park 4) Allocate Bond Proceeds in the amount of $677,331 to the McCormick Park project in lieu of the REET 2 funds 5) Re-allocate sources of funding for the Tremont Project. Reduce Tremont Project bond proceeds $677,331 which will be used for McCormick Park instead. In lieu of Bond proceeds, REET 2 funds of $677,331 are allocated to Tremont. The overall project budget and authorization remained unchanged. 6) Perform accounting and budgeting housekeeping adjustments. Such as, appropriately accounting for bond activity attributable to storm water. This includes bond proceeds, payments, cost and expenses. There was discussion about the budget amendment and the presentation of the information. Charging Stations: The Finance Director provided an overview and history of the electric vehicle charging stations. The City installed two level 2 charging stations in 2011. The total project costs were approximately $21,546; with the City contributing $10,646 and ECOtality paying $10,900. The City entered into a service agreement with ECOtality, which later was purchased by Blink. The service agreement with the City and Blink has since expired. The equipment is owned by the City and both stations are out of order and in need of repair or replacement. There is minimal up-front cost to purchasing new stations and having them installed. There are additional costs if the city desired to try and recoup revenue from the electric vehicle charging stations. The Finance Committee reviewed the option to charge customers for using the provided equipment. The City evaluated the potential revenue and costs and found it to not be cost effective to charge fees at these stations due to the ongoing administration and collection expenses. Additionally, staff worked with legal counsel to confirm that this would not be considered a gift of public funds. The Finance Committee recommends replacing the charging stations and providing service at these stations at no cost to the users. The City found it to be in the best interest of the citizens of Port Orchard to encourage the use of electric vehicles to reduce emissions and provide cleaner air, to promote tourism and shopping in locations where the stations are placed, and to follow the State of Washington guidance under RCW 43.01.250. The Finance committee recommended an ordinance be brought to the full council for adoption. 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. Public Works Shop Connection Costs: The Finance Director updated the finance committee on the fiber optics project for the public works shop. In January of 2018, there was discussion regarding the public works shop experiencing internet connectivity issues; which is currently not on fiber optic cables like the rest of the City. The PW shop is currently provided internet through Wavecable, with outdated equipment that is no longer supported. Wavecable has been unresponsive to the City’s internet needs as the equipment has been failing over recent months. The internet service reliability and performance are critical for the response and management of the City’s SCADA System. Poor connection and/or failure could result in delayed information. In an emergency, this could result in damaging critical pumps and equipment. For example, if a lift station pump fails, the City has limited time to respond and adjust the controls. Currently, staff are contacted through the phone lines if there are any alarms or issues. At which point, they remote access the system through the Wavecable internet. Failing and unreliable internet service can put the City’s pump stations and equipment at risk. Public Works and IT would like to move towards connecting and activating to the optic fiber cables available and move away from Wavecable. The City has reached out to three vendors for bids. Of which, there is a low-cost apparent winner. The project will be reviewed and brought forth to an upcoming meeting. Retreat Items Requested: The Finance Director discussed the upcoming study session on May 15th, which will be conducted prior to the May 18th Council Retreat. At the May 15th study session, the Planning and Finance Departments will team up to present and review the City Comprehensive Plan. Specifically, finance will focus on showcasing the current list, timing, and estimate costs of the projects authorized in the Sewer, Water, Street, Facilities/Parks, Storm Comp plans. The discussion centers on the City’s goal to focus and prioritize work and budgets towards completing projects identified on the Comp Plan lists. The Finance Director asked if the Committee had any other request for the study session or the upcoming retreat. Chairman Clauson requested the Finance Director review the financial policies, status and strategies toward fully funding the City’s reserves in accordance with its policies. There was additional discussion that over the upcoming months the Finance Director would be bringing forward an Equipment Repair and Replacement program (ERR). The 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. ERR draft policy which would cover the purpose, goals, structure and mechanics of the City wide ERR. The finance committee will be able to review and provide guidance on the development of this policy which will eventually be codified in the municipal code and implemented to provide a sustainable equipment repair and replacement program. The Finance Director mention there will be an ordinance coming forth cleaning up some of the previous resolutions adjusting salary and benefits. Traditionally, the City has made these changes with the form of a resolution and it appears they should have been done by an Ordinance. The Finance Committee requested that future budget amendments come forth with a clear transparent presentation and/or explanation. The meeting adjourned at 6:20 pm. Next meeting TBD, 2018 at 5:15 p.m.