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05/29/2018 - 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 May 29, 2018 at 5:15 p.m. PRESENT: Chairman John Clauson, members Beck Ashby and Shawn Cucciardi, Finance Director Noah Crocker, Mayor Rob Putaansuu 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 May 2018 at being 8.8% over its 2018 projection. Real Estate Excise Tax has started strong for 2018, with total year-to-date collections at $248,051. Although, when compared to the same time period for 2017, it is approximately $137,142 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 $6.798 million and remains on track. The plan will be updated monthly and as the project progresses expenditure trends will become more apparent. Fund Structure Review: The Finance Director provided the finance committee with a high-level overview of the current fund structure. They went on to discuss potential changes to the City’s Fund Structure. The primary fund structure changes are being proposed to create an ERR Fund and close similar unnecessary funds. Additionally, the goal will be to standardize the City’s fund structure. Chairman Clauson also requested the finance committee investigate separating the Water-Sewer Fund into two individual separate enterprise funds. The separation would lead to each enterprise having its own operating, capital construction and stabilization funds. Finance will review and report back in the future of what the separation would look like from a financial perspective. 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. Small and Attractive Assets: The Finance Director next provided a brief discussion regarding updating the financial policies to include a Small and Attractive Asset’s Policy. The policy would identify and classify items as Supplies, Inventory (Small & Attractive), Capital, and Capital Threshold for the ERR Fund. Fleet Standardization Policy: The Finance Director next provided a brief discussion regarding creating a Fleet Standardization Policy as part of the ERR. The City is working toward Fleet Standardization for the following reason.  Simplifying purchase process  Standardizing mechanical training  Lower costs of parts  Improved maintenance  Branding and City identity  Consistent City image of our Public Works Vehicles  Consistent City image of our Police Vehicles The Fleet Standardization Policy will be coming in the near future. Equipment Rental Repair (ERR) Fund Policy: The Finance Director provided the finance committee with a high-level overview of the Equipment Rental Revolving Fund (ERR). The City would create an ERR Fund to centralize the management of certain assets. The fund will be responsible for the operations, maintenance and replacement of the assets included. In order to establish the fund, the assets will be moved from their current funds into the ERR with a cash contribution to an account for the depreciated/replacement value. Going forward each biennial budget will include a “rental” payment to the fund from the departments for the use of those assets. The rental payment will provide for the replacement, maintenance and operation of the asset. The Finance Committee was supportive of the creation of an ERR and the ongoing program. The Finance Director said he would bring this presentation to a future council meeting to educate and discuss before proceeding with ordinances and budget action. 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. Good of the Order: Mayor Rob Putaansuu discussed the following: *Advertising to attract businesses to Port Orchard. *Partnering with the County on some road projects *Renewing Copier Leases *Entering into a new Contract with a new Attorney The meeting adjourned at 6:20 pm. Next meeting June 19, 2018 at 5:15 p.m.