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03/23/2018 - 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 March 23, 2018 at 7:30 a.m. PRESENT: Chairman John Clauson, members Beck Ashby and Shawn Cucciardi, Mayor Putaansuu, Finance Director Noah Crocker, Public Works Director Mark Dorsey, Community Development Director Nick Bond 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 February 2018 at being 8.2% over its 2018 projection. Real Estate Excise Tax has started strong for 2018, with total year-to-date collections at $45,250. This is approximately $19,066 more than the comparable period in 2017. 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 $4.8 million and remains on track. The plan will be updated monthly and as the project progresses expenditure trends will become more apparent. Finance Director Crocker reported back to the finance committee regarding recent issues previously discussed at the January finance committee meeting. The city staff, in its effort to conduct internal auditing, discovered a lapse in contract renewals in 2008. The lapse was under a different administration and staffing. The lapse could result in approximately $750,000 of the projects A&E expenses becoming ineligible for Federal funds. City staff has discussed solutions and remedies with WSDOT Local program regarding the matter. WSDOT Local program stated that if the City provided a corrective action plan, and updated and corrected its procurement policies and procedures to align with the Federal requirements, they would consider forgiving these past errors. Public 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. Works is working on the corrective action plan and will provide a resolution and plan to council and WSDOT over the next 30 days. DRS Council Wages: Finance Director Crocker discussed the impact of the minimum wage changes and its effects on council member service credit eligibility and calculation. The change only impacts one council member (Jay Rosapepe). Due to the rise in minimum wage and the fixed council monthly compensation being below the required threshold, he is not eligible to participate in the PERS plan. The Finance Committee discussed what would need to happen to address the issue. They directed the city staff to do nothing at this time and they would discuss at the next council meeting. 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. 2017-2018 Budget Review: The Finance Director provided the finance committee with a high-level overview of city revenue and expenditures through the end of 2017 for the major operational funds. It was discussed that each fund is on track and on budget for fiscal year 2018. Additionally, they reviewed the Capital Budgeted projects for Water, Sewer, Storm, Parks, Facilities and Transportation Projects. The Finance Committee recommended this presentation be brought to the full council at a future meeting with some additional information regarding water and sewer operations in their separate categories. County Comp Plan Appeal Transportation: The Planning Director discussed the work between the County and the City regarding transportation improvements. The County is willing to update their transportation plan and the City would like to have a representative at the table. The current city staff doesn’t have the transportation expertise to dedicate to this project. The request is to use a current transportation consultant contract, so a consultant can represent, work and report on the cities behalf. The finance committee agreed with the recommendation and support the direction. Utilities/Facilities Operations Manager The Mayor recommended a change to a current staffing title to more accurately reflect the duties and responsibilities of the position, while maintaining an opportunity for growth. This change in job description and title would also necessitate a change in the salary range. The Mayor worked to identify comparable salary ranges. The finance committee supported the changes, including the change in salary. The Mayor stated he would bring this proposal to full council. Software Review: Finance, HR, and IT Departments have conducted a review of the functionality, usability, cost, and long-term planning for its software needs, and have determined the current software system is inadequate for the City’s current and future business needs. The Finance Department briefed the Mayor and council at the study session in February and requested approval to move forward in procuring a new software product. The council supported and directed the Mayor and staff to research a new software. The Finance Department reviewed multiple products and have recommended moving forward with INCODE financial product by Tyler Technologies. Finance acknowledges the process could take up to a year to procure, implement, and train before going live with the new software. The department verified with legal counsel that all appropriate procurement laws were followed and plans to move forward and bring the contract to council for approval. 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. Change Order #2-Bethel/SR: Public Works Director Dorsey discussed a request to expand the scope of work on the Bethel SR Corridor project. This would be the second change order for this study. The request comes from lessons learned through the Tremont project, in which the City could, and should, have done a more thorough analysis upfront. Public Works views this as an opportunity to learn from that project and create a more robust study for the Bethel project. The cost is estimated at about $45 thousand and would be funded out of the current street budget authority. The Mayor and Finance committee were supportive of the change order which would provide a more thorough survey, traffic modeling, and engineering to provide the City a more complete deliverable. This will be presented at a future council meeting. The meeting adjourned at 8:40 am. Next meeting April 24, 2018 at 5:15 p.m.