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HomeMy WebLinkAboutFS 2009-10-06 COMPLETE AGENDA PACKET1. PRESENTATION(S) 2. BUSINESS AGENDA 3. ANNOUNCEMENTS 4. MISCELLANEOUS City of Tukwila Finance and Safety Committee O Pam Linder, Chair O Joe Duffie O De'Sean Quinn Item AGENDA Distribution: P. Linder J. Duffle D. Quinn J. Hernandez D. Robertson Mayor Haggerton R. Berry C. O'Flaherty(punched) B. Fletcher B. Giberson D. Haynes TUESDAY, OCTOBER 6, 2009 CONFERENCE Room #3; 5:00 PM 1 Action to be Taken a. Contract amendment for Commercial Development Solutions; Rhonda Berry, City Administrator. b. A resolution authorizing the cancellation of past -due accounts receivable and returned check write -offs; Shawn Hunstock, Finance Director. c. Authorization for Transfer of Funds for additional budget reductions for 2009; Shawn Hunstock, Finance Director. d. An ordinance establishing new regulations regarding water, sewer and surface water utility taxes; Shawn Hunstock, Finance Director. e. Sales Tax Report; Shawn Hunstock, Finance Director. Next Scheduled Meeting: Tuesday, October 20, 2009 S The City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206 433 -1800 for assistance. S. Hunstock D. Speck M. Hart R. Still V. Jessop D. Tomaso S. Kerslake M. Villa K. Kertzman Judge Walden T. Kinlow B. Arthur K. Matej C. Parrish M. Miotke J. Eide G. Labanara K. Narog(cover) D. Lincoln S. Kirby(emaio N. Olivas S. Norris(emaii) J. Pace L. Anderson Page a. Forward to 10/12 C.O.W. Pg.1 and 10/19 Regular. b. Forward to 10/12 C.O.W. Pg.7 and 10/19 Regular. c. Forward to 10/12 C.O.W. Pg.15 and 10/19 Regular. d. Forward to 10/12 C.O.W. Pg.19 and Special Meeting to follow. e. Information only. Pg.25 Committee Goals: Work together in cooperation with nearby cities to address common problems in the Highway 99 corridor and Military Road. Ensure a commitment to continued human services funding in relation to the cost of living through consistent review of regional, state and federal budgets affecting human services progams and services (also assigned to CAP). Research the viability of sponsoring a City -wide Citizens' Academy (also assigned to CAP). ISSUE BACKGROUND City of Tukwila INFORMATIONAL MEMORANDUM TO: Finance and Safety Committee FROM: Mayor's Office DATE: September 30, 2009 SUBJECT: Contract Extension Commercial Development Solutions Funding for the contract with Lisa Verner, dba Commercial Development Solutions, Project Manager for the Tukwila South project, is approaching depletion. Jim Haggerton, Mayor Due to the need for concentrated focus on negotiation of the Tukwila South Development Agreement, the City contracted with Commercial Development Solutions to manage that project. With the culmination and signing of the development agreement, there are many tasks yet to be accomplished, a list of which is attached. DISCUSSION Approval of the development agreement with La Pianta has set into motion a series of activities, including establishment of an escrow account, initiation of the annexation process, and many other items. Because of Lisa's background in having negotiated the agreement and intimate awareness of the details of the agreement, we believe it is in the City's best interest to continue the contract with her at least until commencement of the construction of Southcenter Parkway Extension. The last time this contract was extended it was at a rate of $8,000 per month. Activities underway as of this writing require that Ms. Verner work more hours than in the past. For the last three months her billings have averaged approximately $11,000 per month. It is expected that the same level of activity will be necessary through the next several months, but billable hours should decrease as the project unfolds. RECOMMENDATION It is recommended that the contract be extended through December 2010, at a rate of $11,000 per month and that the Council consider this issue at the October 12, 2009 Committee of the Whole Meeting and subsequent October 19, 2009 Regular Meeting. ATTACHMENTS Contract Amendment List of Remaining Project Activities That portion of Contract No. AG06 -059 between the City of Tukwila and Commercial Development Solutions is amended as follows: Under Section 2, Compensation and Method of Payment: Total amount to be paid shall not exceed $412,000 (an addition of $165,000 to the previous contract amount of $247,000). Under Section 4, Duration of Agreement: This Agreement shall be in full force and effect for a period ending December 31, 2010 unless sooner tenninated under the provisions hereinafter specified. All other provisions of the contract shall remain in full force and effect. Dated this day of 2009. CONTRACTOR CITY OF TUKWILA Commercial Development Solutions ATTEST /AUTHENTICATED Christy O'Flaherty, CMC, City Clerk Date Approved by City Council CITY OF TUKWILA CONTRACT FOR SERVICES Amendment to #06- 059(g) Jim Haggerton, Mayor APPROVED AS TO FORM City Attorney Tukwila South: Items to implement Development Agreement 9 -29 -09 1. Focal point /liaison with City and La Pianta 2. Escrow account a. Contract and establishment b. ROW vacation deeds c. Southcenter ROW possession use, deeds d. Letters of credit e. Fire Station land deed (complete site identification process) 3. Accounting finn (Benson McLaughlin) a. Complete contract and commence b. Monitor development of Protocols and signed agreement c. Conform to timelines in Development Agreement 4. Grant contracts a. TIB b. CERB c. Capital Projects 5. Complete Tukwila South annexation a. BRB public hearing b. Council resolution, after negotiating effective date with KC departments c. Work with Fire District 24 on interlocal agreement for reserve funds 6. Island annexation (remainder of PAA between I -5 and Orillia Rd) a. Council adoption of resolution b. Negotiate interlocal agreement with King County c. Address participation of Fire District 24 in Interlocal Agreement d. Council review and adoption of Interlocal e. Notice to property owners concerning appeal opportunities 7. Shoreline designation through Department of Ecology 8. Levee modification/ "404" permit issuance a. Monitor independent peer review b. Changes to levee design, as needed c. Coordination between Corps, City 9. Southcenter Parkway Extension a. David Evans and Associates contract extension and completion of design, bid documents b. ECS revisions c. Highline Water District i. Interlocal agreement d. PSE i. Series of agreements ii. Coordination of design/construction e. Monitor and maintain schedule to start of construction f. Wetlands mitigation Tukwila South Project Items to Implement the Development Agreement 9 -29 -09 10. Monitor KPFF and Anchor QEA i. Levee ii. Storm ponds iii. Clearing grading permit iv. Southcenter Parkway review v. Coordination with city staff 11. Develop reference materials on Tukwila South Project for DCD 12. Monitor /assist Parks Department with pedestrian bridge grants TO: FROM: Shawn Hunstock, Finance Director DATE: September 30, 2009 SUBJECT: Cancellation of Accounts Receivable ISSUE The cancellation of uncollectible accounts receivable totaling $185,450.81. These items include: False Alarms $775.00, Miscellaneous Billings $91,059.60, NSF Checks $482.00 and Gordon's on the Green Concessions Fees $93,134.21. The items listed have been through the City's collection program or are party to bankruptcy and have not been successfully resolved. BACKGROUND The process for tracking accounts receivable is quite thorough. The steps below are followed prior to the attached write -off resolution: Invoice is sent to recipient by Finance Department payable in 30 days. Second notice is then sent specifying due date before receivable is forwarded to collection agency. Collection agency sends a series of three letters for the original amount due, with the final letter advising that legal action will be taken if payment is not made. If there is no response from debtor after the letter series, the debt is then reported to the National Credit Bureaus. Collection agency then pursues legal action after the debtor is given a final opportunity to dispute the claim. This includes attaching checking accounts, garnishments, lawsuits and other legal methods. DISCUSSION The items on the proposed resolution reflect those that have been through the process above and receivables are still due with the likelihood of collection being very low. We do collect amounts after write -offs but very seldom. RECOMMENDATION The Council is being asked to consider this item at the October 12, 2009 Committee of the Whole meeting and subsequent October 19, 2009 Regular meeting. ATTACHMENTS City of Tukwila INFORMATIONAL MEMORANDUM Mayor Haggerton Finance and Safety Committee Draft Resolution, with attachment A Jim Haggerton, Mayor A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ORDERING THE CANCELLATION OF PAST -DUE ACCOUNTS RECEIVABLE AND RETURNED CHECK WRITE -OFFS. WHEREAS, certain receivables and checks have been deemed uncollectible after efforts by both the City and a collection agency have been unsuccessful; and WHEREAS, the City will continue to pursue these receivables when practical; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Miscellaneous Accounts Receivable and Returned Checks. The total of $185,450.81 is deemed uncollectible. See Attachment A. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2009. ATTEST/ AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney Attachment: "Attachment A" Past -Due Accounts Receivable and Returned Check Write -offs as of September 30, 2009 W: Word Processing Resolutions Write Offs.doc ksn 09/30/2009 FT Joan Hernandez, Council President Filed with the City Clerk: Passed by the City Council: Resolution Number: Page 1 of 1 Invoice Date 12/31/07 12/07/06 12/28/06 02/20/07 01/04/07 07/05/07 12/31/06 04/22/05 05/31/05 05/31/05 06/30/05 08/31/05 08/31/05 09/25/06 09/30/05 11/16/05 12/31/05 12/31/05 04/20/06 04/20/06 04/20/06 05/31/06 08/31/06 08/31/06 08/31/06 10/30/06 10/31/06 11/30/06 12/31/06 02/28/07 03/31/07 05/15/07 10/22/07 12/04/07 12/20/07 12/31/07 02/26/08 03/06/08 05/27/08 05/27/08 Attachment Customer Michael Adams Boss Wear (965) Boss Wear (965) Boss Wear (961) Boss Wear (1111) Busy Body Home Fitness Cost Plus Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green Gordon's on the Green A Past Due Accounts Receivable and Returned Check Write -offs as MISCELLANEOUS For Fire hydrant damage Reinspection fee Reinspection fee Reinspection fee Reinspection fee Reinspection fee Reinspection fee Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill ITheir portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill King Co Sewage Trtmt Capacity Chg Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Fund I Invoice No. Water I MB -00118 General ICD -00329 General ICD -00328 General I RF -00018 General I RF -00002 General I RF -00089 General ICD -00318 Golf CD -00434 Golf CD -00432 Golf CD -00433 Golf CD -00431 Golf CD -00430 Golf CD -00436 Golf ICD -00418 Golf CD -00429 Golf CD -00422 Golf CD -00428 Golf CD -00435 Golf ICD -00425 Golf ICD -00426 Golf ICD -00427 Golf CD -00424 Golf CD -00416 Golf I CD -00417 Golf ICD -00421 Golf ICD -00419 Golf CD -00423 Golf CD -00420 Golf ICD -00415 Golf MB -00053 Golf MB -00049 Golf MB -00050 Golf MB -00051 Golf MB -00052 Golf MB -00048 Golf MB -00085 Golf MB -00337 Golf MB -00338 Golf MB -00197 Golf IMB -00198 Amount 372.50 60.00 85.00 60.00 60.00 60.00 110.00 2,307.83 2,121.60 2,221.62 2,222.06 2,785.08 2,310.50 1,834.50 2,666.55 2,275.58 2,523.84 2,100.18 2,120.34 1,977.69 2,292.06 2,008.98 2,354.69 2,633.18 2,241.29 2,473.93 2,204.43 2,149.02 2,338.66 3,934.68 5,289.24 1,708.90 3,871.65 1,845.14 1,530.07 1,928.24 1,573.81 1,772.41 1,497.02 1,617.93 of September 30, 2009 Notes Insurance will not pay- caused by other party To EPR 8/10/07 To EPR 9/26/07 To EPR 10/7/08 To EPR 10/7/08 To EPR 10/7/08 To EPR 8/10/07 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Attachment A as of 09.30.09 1 09/30/2009 07/03/08 07/03/08 07/30/08 09/05/08 10/28/08 12/31/08 10/2/006 12/15/06 05/16/07 11/07/06 11/07/06 Invoice Date 11/03/06 12/14/06 11/03/06 12/14/06 12/14/06 11/03/06 11/03/06 12/14/06 12/31/06 12/31/06 12/31/06 12/31/06 12/31/06 12/31/06 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 05/10/07 12/31/06 Attachment A Past Gordon's on the Green Gordon's on the Green Gordon's on the Green I Gordon's on the Green Gordon's on the Green Gordon's on the Green I Medina Restaurant North Star Design Priya's Auto Care Center Southcenter One Hour Cleaners (Washington National Mortgage Miscellaneous Billing Total I j Customer American Broadcast System American Broadcast System Armed Forces Recruiting Armed Forces Recruiting jArmed Forces Recruiting I Casual Male IChamps Sports Warehouse Checker Collision Center Checker Collision Center Checker Collision Center IChecker Collision Center I Checker Collision Center IChecker Collision Center I Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center I Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center Checker Collision Center Half Price Books Due Accounts Receivable I Golf IMB -00200 j 1,674.96 j I Golf IMB -00201 1,981.70 Golf MB -00204 2,137.14 Golf MB -00210 2,034.42 Golf IMB -00220 I 2,168.75 j Golf I MB -00265 3,222.43 General j j CD -00316 60.00 General I I CD -00267 60.00 General RF -00060 60.00 IGeneral CD -00296 j 60.00 General j jCD -00288 j 60.00 I 91,059.60 Fund Invoice No. I Amount General CD -00054 25.00 General CD -00088 25.00 General CD -00013 25.00 General CD -00012 25.00 General CD -00007 25.00 General CD -00181 j 25.00 General CD -00165 25.00 General CD -00120 25.00 General CD -00115 j 25.00 General CD -00122 j 25.00 General CD -00123 25.00 General CD -00124 25.00 General CD -00126 25.00 General CD -00137 25.00 General PF -00010 25.00 General PF -00011 25.00 General PF -00012 25.00 General PF -00013 j 25.00 General PF -00014 I 25.00 General PF -00021 I 25.00 General PF -00022 25.00 General PF -00015 25.00 General PF -00016 j 25.00 General PF -00017 25.00 General PF -00018 25.00 General PF -00019 25.00 General PF -00020 25.00 General CD -00169 25.00 and Returned Check Write -offs as of September 30, 2009 Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Their portion of Seattle City Light Bill Reinspection fee Reinspection fee Reinspection fee Reinspection fee Reinspection fee FALSE ALARMS For False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm False Alarm Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 Bankrupt 6/1/2009 To EPR 2/20/07 To EPR 8/10/07 To EPR 8/10/07 To EPR 08/10/07 To EPR 08/10/07 To EPR 8/10/07 To EPR 8/10/07 In dispute In dispute In dispute To EPR 8/10/07 To EPR 8/10/07 To EPR 09/26/07 To EPR 09/26/07 To EPR 09/26/07 To EPR 09/26/07 To EPR 09/26/07 To EPR 09/26/07 To EPR 09/26/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 10/15/07 To EPR 09/26/07 Notes Attachment A as of 09.30.09 2 09/30/2009 09/18/06 09/18/06 12/18/06 Return Date 01/03/08 03/13/08 03/13/08 04/02/08 05/06/08 07/16/08 08/13/08 Attachment A Past Due Accounts Receivable and Returned Check Write -offs as of September 30, 2009 1 Precision Auto Body Precision Auto Body Site Lock Systems Customer 1 Porsche Phelps 1Tania Magana Tania Magana Mun Saelee Jolyn Capitulo- Hohnstein Joe Barnes Lawanna Gale 12/31/2008 Concessions Fees 1General General 1 General False Alarms Total Fund Check No. !General 1CK# 1011 General 1 CK #1243 General CK #1244 General CK 0051 General CK# 2657 General CK# 1074 General ICK# 1022 Returned Check Total Write -off Grand Total II II *Note: Gordon's on the Green bankruptcy Golf Payor reports CD -00091 1 CD -00078 CD -00050 25.00 1 False Alarm 25.00 False Alarm 25.00 False Alarm 775.00 RETURNED CHECKS Amount For 65.00 1Youth Basketball 120.00 Preschool 40.00 Swim Lessons 40.00 TCC Bootcamp 27.00 Adult Fittness Pass 90.00 Daycamp 100.00 1Camp Tukwilly 482.00 GORDON'S ON THE GREEN 93,134.21 1 04/18/07 12/31/08 185,450.81 183,086.31 To EPR 08/10/07 To EPR 08/10/07 Address non existent 1To EPR5/28/08 To EPR5/28/08 To EPR5 /28/08 To EPR5/28/08 To EPR5 /28/08 To EPR 9/26/08 1To EPR 9/5/08 Bankrupt 6/1/2009 Notes Attachment A as of 09.30.09 3 09/30/2009 TO: FROM: DATE: SUBJECT: ISSUE BACKGROUND DISCUSSION City of Tukwila INFORMATIONAL MEMORANDUM Mayor Haggerton Rhonda Berry Finance and Safety Committee Shawn Hunstock, Finance Director October 1, 2009 Additional Departmental Budget Reductions Jim Haggerton, Mayor The City is in need of reducing expenditures or increasing revenues in an attempt to address our current revenue shortfalls, particularly in the area of sales tax receipts. Sales tax receipts through August 31 are 16% Tess than budget, equating to an annual $2.4 million revenue shortfall. Additionally, several other revenue streams have not met budget. The economy continues to suffer even though the recession has been declared over. Continued depressed retail sales combined with other economic factors will prolong the negative impact on City revenues. In addition, the cost to the City for Green River Valley flood prevention and preparation efforts stemming from the Howard Hanson dam weakness is expected to range from $2 million to $5 million in 2010. As the attached spreadsheet indicates, the additional budget reduction totals $392,416 and comes from selected departments based on identified cost saving opportunities. The amount removed from department budgets will be allocated to ending fund balance in Department 20. The attached Authorization for Transfer of Funds form implements this additional departmental budget reduction. As with the previous budget reduction, the recommendation is to implement the reduction at the department level, rather than the specific line item level. This means Directors will have the flexibility to implement the reduction as they see fit based on the needs of their department and the services they provide. INFORMATIONAL MEMO Page 2 RECOMMENDATION The Council is being asked to approve the attached Authorization for Transfer of Funds. This item is scheduled to be discussed at the October 6, 2009 Finance and Safety Committee meeting, the October 12, 2009 Committee of the Whole meeting and the subsequent October 19, 2009 Regular Meeting. ATTACHMENTS Authorization for Transfer of Funds 2009 Budget Reduction spreadsheet C:ltemp\XPGrpWise\InfoMemo Addl Budget Reductions.doc From: To: W gsy City of Tukwila AUTHORIZATION FOR TRANSFER OF FUNDS Department: FINANCE Date: October 1, 2009 Under the provisions of Ordinance No. 2221, the following transfer of funds within the budget class is requested: Budget Line Item Number/ BAR 000.07.574.200.00.05 Recreation 000.08.559.600.00.05 Community Development 000.10.521.100.00.05 Police Administration 000.10.521.230.00.05 Police Special Services 000.12.518.880.00.05 Information Technology 000.13.532.100.00.05 Public Works Administration 000.13.532.101.00.05 Public Works Maintenance Admin 000.13.532.102.00.05 Public Works Development Total Budget Line Item Number/ BAR 000.20.291.840.00.00 Ending Fund Balance Total Detailed justification for transfer: Remove the additional departmental budget reduction, allocate to Ending Fund Balance in General Fund. APPROVED BY THE TUKWILA CITY COUNCIL AT A MEETING THEREOF: the day of APPROVED BY THE FINANCE DIRECTOR: Signature: Date: APPROVED BY THE MAYOR: Signature: Date: W: 2009 InfoMQenos \Authorization for Transfer of Funds Additional Reduction.doc CO:ksn 10/1/2009 No. Amount 45,650 128,000 850 30,000 20,000 87,701 37,500 42,715 392,416 Amount 392,416 392,416 2009 Proposed Budget Reductions Dept DEPARTMENT Public Works 13 Administration General 13 Administration Maintenance 13 Engineering 13 Administration Development 13 Facility Maintenance 16 Street Maintenance Operation Subtotal Public Works TOTAL GENERAL FUND 2009 Budget 3% Adjustment CITY OF TUKWILA 2009 BUDGET REDUCTION GENERAL FUND Equipment Targeted Replacement Remaining Actual Additional Total Contribution Reduction Reduction Difference Reduction Reduction Administration 01 City Council 282,470 8,474 8,474 8,474 8,474 03 Mayor, Boards, Commissions, etc. 2,695,849 80,875 9,323 71,552 71,552 80,875 04 Administrative Services /Personnel 605,882 18,176 18,176 18,176 18,176 05 Finance 1,786,591 53,598 53,598 53,598 53,598 06 City Attorney 495,726 14,872 14,872 14,872 14,872 07 Recreation 3,546,267 106,388 16,605 89,783 77,382 12,401 45,650 139,637 08 Community Development 2,964,395 88,932 10,791 78,141 94,800 (16,659) 128,000 233,591 09 Municipal Court 1,149,884 34,497 34,497 28,130 6,367 28,130 12 Information Technology 1,108,886 33,267 33,267 33,267 20,000 53,267 15 Park Maintenance 1,019,621 30,589 30,106 483 12,884 (12,401) 42,990 Subtotal Administrative 15,655,571 469,667 66,825 402,842 413,135 (10,293) 193,650 673,610 Police Department 10 Administration 1,407,998 42,240 16,985 25,255 25,255 850 17,835 10 Investigation 1,504,164 45,125 22,737 22,388 22,388 22,737 10 Patrol 6,640,571 199,217 119,886 79,331 212,500 (133,169) 332,386 10 Special Services 1,486,058 44,582 44,582 13,843 30,738 30,000 43,843 10 Gambling /Special Operations 869,709 26,091 4,994 21,097 21,097 4,994 10 Crime Prevention 694,783 20,843 20,843 20,843 10 Training 234,915 7,047 7,047 7,047 10 Traffic 633,511 19,005 13,206 5,799 5,799 13,206 Subtotal Police 13, 471, 709 404,151 177,808 226,343 226,343 30,850 435,001 Fire Department 11 Administration 686,166 20,585 30,028 (9,443) (9,443) 30,028 11 Suppression 8,126,536 243,796 4,564 239,232 246,180 (6,948) 250,744 11 Prevention Investigation 818,550 24,557 17,474 7,083 7,083 17,474 11 Training 319,383 9,581 5,081 4,500 4,500 5,081 11 Facilities 101,500 3,045 3,045 3,045 11 Special Operations 58,638 1,759 1,759 1,759 11 Ambulance, Rescue Emergency 227,151 6,815 6,811 4 4 6,811 Subtotal Fire 10,337, 924 310,138 63,958 246,180 246,180 925,889 27,777 2,455 25,322 15,000 10,322 87,701 105,156 342,740 10,282 4,134 6,148 6,148 37,500 41,634 670,417 20,113 1,929 18,184 18,184 1,929 495,658 14,870 14,870 14,870 42,715 42,715 1,576,956 47,309 10,864 36,445 36,445 10,864 2,700,541 81,016 136,991 (55,975) 57,500 (113,475) 194,491 6,712,201 201,366 156,373 44,993 72,500 (27, 507) 167,916 396,789 46,177,405 1,385,322 464,964 920,358 958,158 (37,800) 392,416 1,505,400 Temporary Reductions as a of General Fund Budget 3.26% TO: City of Tukwila INFORMATIONAL MEMORANDUM Mayor Haggerton Rhonda Berry Finance and Safety Committee FROM: Shawn Hunstock, Finance Director DATE: October 2, 2009 SUBJECT: Draft Utility Tax Ordinance ISSUE Jim Haggerton, Mayor The City is in need of funding for emergency planning and response costs in the event of a flood. Such planning directly relates to conditions at the Howard Hanson Dam. BACKGROUND The City recently declared an emergency due to conditions at the Howard Hanson Dam, and the likelihood given those conditions that the U.S. Army Corps of Engineers, which operates the dam, could release large amounts of water to prevent further damage to the dam in the event of high rainfall. The City's Emergency Management Coordinator, Hillman Mitchell, is recommending specific measures be taken to prepare for a possible flood during the coming flood season. Such measures include placement of sandbags and other materials on top of publically owned levies throughout the City. The initial cost estimate of purchasing the necessary materials and equipment, and placement on those materials on top of the levies, exceeds $2.1 million. The City will also incur costs related to completion of an emergency response plan in the coming weeks, as well as other planning costs. The exact cost of these other items is unknown at this time, but could exceed a few hundred thousand dollars. The City received information very recently indicating the materials placed on top of the levy could stay in place for up to five years with appropriate maintenance. The large sandbags will need to be covered to protect them from UV rays, and a few bags may need to be moved if placed in or near the public right -of -way, but most of the bags will be able to stay were they are initially placed. The costs identified above will be necessary regardless of whether there is an actual flood event or not. These estimates do not include the cost of response to an actual event, which would obviously be significant, not to mention the potential cost of repairs to City infrastructure. DISCUSSION The administration is recommending a utility tax on the water, sewer and surface water funds to pay for the cost of preparedness and possible response over the next several INFORMATIONAL MEMO Page 2 months. The expectation at this time is that the tax would not be passed on to customers of these utilities. The tax rate would initially be 35% due to the cost over the coming four to six weeks of raising the level of the levies, as well as the cost of completion of planning efforts. A utility tax of 10% would remain in place to fund on -going planning and possible response costs for such natural disasters in the future. The 10% utility tax is scheduled to expire as of December 31, 2012, but could be changed before then, or extended at any time. It is anticipated that a Tong -term fix for the dam could take several years, and the City would incur significant costs each year during the flood season to prepare for a possible event. It should be noted that the City continues to pursue any and all external funding for the steps now being considered. It is not known at this time if these expenses will be reimbursable absent an actual flooding event. Should such expenses be reimbursed, according to the draft ordinance the water, sewer and surface water funds will be replenished for the utility taxes collected to pay for such expenses. A utility tax on the water, sewer and surface water funds is considered appropriate to preserve, protect, and if necessary repair, such utility infrastructure throughout the City. The cost of not taking such measures now and potentially repairing this infrastructure later would greatly exceed the cost of measures now being planned, not to mention the health and safety issues that would result if the City were to not prepare as now planned for a possible flood. RECOMMENDATION The Council is being asked to approve the attached ordinance adopting a utility tax on the water, sewer and surface water funds. This item is scheduled to be discussed at the October 5, 2009 Finance and Safety Committee meeting, the October 12, 2009 Committee of the Whole meeting and at a Special Meeting that same evening. ATTACHMENT Draft Ordinance C:ltemp\XPg rpwiselI nfoMemoUtilityTaxREV.doc DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ESTABLISHING NEW REGULATIONS, TO BE CODIFIED AT TUKWILA MUNICIPAL CODE CHAPTER 3.54, REGARDING WATER, SEWER AND SURFACE WATER UTILITY TAXES; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council has determined the Financial Planning Model demonstrates there is projected to be a deficit balance in the General Government Funds by 2011; and WHEREAS, the City has availed itself of all appropriate revenue sources currently authorized and has reduced expenditures by 3% in the General Fund; and WHEREAS, the basic City service levels could suffer a reduction without a new source of revenue; and WHEREAS, implementation of a tax on the City's water, sewer and surface water utilities measured by gross earnings is expected to generate sufficient revenue to maintain current levels of City services; and WHEREAS, the City Council has determined the public interest is best served by the implementation of a tax on the City's water, sewer and surface water utilities; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Regulations Established. Tukwila Municipal Code Chapter 3.54, "City Utility Tax," is hereby established to read as follows: 3.54.010 City Utility Tax CHAPTER 3.54 CITY UTILITY TAX Sections: 3.54.010 City Utility Tax 3.54.020 Definitions 3.54.030 Tax Rate 3.54.040 Tax Year 3.54.050 Exceptions and Deductions 3.54.160 Finance Director to Make Rules There is hereby unposed a tax to be levied on and after October 1, 2009, against and upon the gross earnings of the water, sewer and surface water utility funds and on all water, sewer and surface water utilities at the rates set forth in this chapter. The tax shall, however, be subordinate to any payments required to be made by any of said utility funds from said gross earnings into any fund or funds heretofore or hereafter created for the payment of and interest on revenue bonds of the City heretofore or hereafter issued. W: \Word Processing \Ordinances \Utility Tai 2.doc SH:ksn 10/02/2009 Page 1 of 3 3.54.020 Definitions As used in this chapter, unless the context or subject matter clearly requires otherwise, the words or phrases defined in this section shall have the indicated meanings. 1. "Finance Director" means the Finance Director of the City of Tukwila, Washington, or his or her designee. 2. "Gross earnings" means the consideration, whether money, credits, rights or property expressed in terms of money proceeding or accruing by reason of the transaction of business and includes gross proceeds of sales, compensation for rendition of services, gains realized from interest, rents, royalties, fees, commissions, dividends and other emoluments, however designated, all without any deduction on account of cost of property sold, materials used, labor, interest, losses, discount and any other expense whatsoever. 3. "Sewer service" means any connection to the City sewer system and shall be further defined by customer class. 4. "Surface water service" means any connection to the City surface water or storm drainage system and shall be further defined by customer class. 5. "Water service" means any connection to the City water system and shall be further defined by customer class. 3.54.030 Tax Rate There is levied upon water, sewer and surface water utilities, taxes in the amount to be determined by the application of rates given against gross earnings as follows: 1. Upon the City water, sewer and surface water funds, a tax equal to 35% of the total gross revenue from such business from all customers in the City during the period for which the tax is due. Such tax shall be effective from October 1, 2009 through April 30, 2010. 2. Upon the City water, sewer and surface water funds, a tax equal to 10% of the total gross revenue from such business from all customers in the City during the period for which the tax is due. Such tax shall be effective from May 1, 2010 through December 31, 2012. 3.54.040 Tax Year The tax year for purposes of this water, sewer and surface water utility tax shall commence October 1, 2009 and end December 31, 2009 and thereafter shall commence on January 1 and end on December 31 each year. 3.54.050 Exceptions and Deductions In computing the gross earnings tax due under the provisions of this chapter, there shall be deducted from the measure of the tax the following items: 1. Uncollected accounts, if the books of the utility are on an accrual basis, as distinguished from a cash basis. 2. Amounts received through contemplated or actual condemnation proceedings or in account of any federal, state or local public works project. 3. Amounts received as compensation or reimbursement for damages to or protection of any property of the utility. W: \Word Processing Ordinances \Utility Tax 2.doc SH:ksn 10/02/2009 Page 2 of 3 4. Contributions for or in aid of construction. 5. Amounts received as compensation or reimbursement for damages to or protection of any property of the utility. 6. Amounts collected as sales tax. 7. Amounts received from surcharge to water rates charged outside City limits users for system improvements necessary to meet City standards. 3.54.060 Finance Director to Make Rules The Finance Director shall have the power to adopt and enforce rules and regulations not inconsistent with this chapter or with the law for the purposes of carrying out the provisions thereof. Section 2. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 3. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2009. ATTEST/ AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney W \Word Processing \Ordinances \Utility Tax 2. doc SH:ksn 10/02/2009 Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: Page 3 of 3 TO: Mitigation Received City of Tukwila INFORMATIONAL MEMORANDUM Mayor Haggerton Rhonda Berry Finance and Safety Committee FROM: Shawn Hunstock, Finance Director DATE: September 23, 2009 SUBJECT: Sales Tax Revenue for July 2009 Schedule I Sales Receipt 2008 2009 2009 Increase /(Decrease) %Increase /(Decrease) Month Month Actual Estimated Actual Month YTD Month YTD Jan Mar 1,347 1,403 1,172 (231) (231) 16.46% 0.00% Feb Apr 1,357 1,397 1,051 (346) (577) 24.77% -20.61% Mar May 1,601 1,654 1,146 (508) (1,085) -30.71% 24.36% Apr June 1,365 1,497 1,191 (306) (1,391) 20.44% 23.37% May July 1,635 1,560 1,082 (478) (1,869) 30.64% 24.88% June Aug 1,646 1,757 1,217 (540) (2,409) 30.73% 25.99% July Sept 1,535 1,661 1,473 (188) (2,366) 11.32% 23.76% Aug Oct 1,555 1,647 Sept Nov 1,426 1,685 Oct Dec 1,298 1,521 Nov Jan10 1,265 1,589 Dec Feb10 1,723 2,175 Totals 17,753 19,546 8,332 1,277 9,609 87.92% of Budget Incl. Mitigation Jim Haggerton, Mayor in 1,000's Sales tax collections showed the eleventh consecutive decrease in July compared to the same period in the prior year. For 2009, collections were less than both budget and the same month in the prior year, but much closer to each number than we've been in the last eleven months. Actual receipts for July 2009 were $188,000 less than budget, and $62,000 less than the same period last year. We are now down 23.76% for the year compared to budget, and 20.54% compared to the same period last year. The chart above also includes the mitigation payment we received at the end of March, June and September. Including the mitigation payment, we are currently at 88% of budget for the year to date. The mitigation payment we received in September for second quarter 2009 was $536,001.90. This was a 54.9% increase from the $346,046.24 we received for first quarter 2009. Schedule II shows the year -to -date sales tax from the top ten industry classifications. As this schedule indicates, the trend is flat or down for all of the classifications. INFORMATIONAL MEMO Page 2 Schedule II Group Name 452* General Merchandise Stores 448* Clothing and Accessories 423* Wholesale Trade, Durable Goods 722* Food Services, Drinking Places 443* Electronics and Appliances 441* Motor Vehicle and Parts Dealer 236 Construction of Buildings 451* Sporting Goods, Hobby, Books 444* Building Material and Garden 453* Miscellaneous Store Retailers Mitigated NAICS Code As you can see there are large variances from last year for the same time period. For instance, sales tax for Construction of Buildings is down by 61.35 Miscellaneous Store Retailers is down by 31.80 and Wholesale Trade and Durable Goods is down by 27.53 These declines are offset by very small increases in other areas, such as Food Services and Drinking Places, which increased by 1.53 and Clothing and Accessories, which increased by 0.07 As you can see from Schedule II, eight of the top ten merchant categories have declined versus prior year, and nine of the ten industry classification codes are ones for which we receive streamlined sales tax mitigation. Schedule III shows the ten largest declines in sales tax revenue for industries with over $10,000 collected through July. Schedule III Group Name 323* Printing and Related Support 334* Computer and Electronic Produc 236 Construction of Buildings 442* Furniture and Home Furnishings 237 Heavy and Civil Construction 522 Credit Intermediation 541 Professional, Scientific, Tech 621 Ambulatory Health Care Service 453* Miscellaneous Store Retailers 423* Wholesale Trade, Durable Goods Mitigated NAICS Code Attached is a Sales Tax Summary comparing year -to -date 2009 vs. 2008 by major NAICS codes. Also included is a comparison of total receipts year -to -date for the last four years. H:\ Sales Tax120091Info Memo Sales Tax 092309.doc YTD Current 1,088,903 1,074,615 921,221 750,775 516,126 430,464 327,348 309,294 301,956 286,370 YTD YTD Dollar Current Prior Diff. Diff. 37,110 108,109 (70,998) 65.67 11,216 31,848 (20,631) 64.78% 327,348 846,869 (519,521) 61.35% 194,471 439,672 (245,202) 55.77% 44,397 78,697 (34,300) 43.59% 17,425 30,764 (13,339) 43.36% 98,787 154,627 (55,840) -36.11% 34,160 52,746 (18,586) 35.24% 286,370 419,911 (133,541) 31.80% 921,221 1,271,180 (349,959) 27.53% Please let me know if you have any comments or questions. Thank you. YTD Dollar Prior Diff. Diff. 1,247,743 (158,840) 12.73% 1,073,907 708 0.07% 1,271,180 (349,959) 27.53% 739,486 11,288 1.53% 627,834 (111,708) 17.79% 578,900 (148,436) 25.64% 846,869 (519,521) 61.35% 347,681 (38,386) 11.04% 397,356 (95,400) -24.01% 419,911 (133,541) 31.80% NAICS CONSTRUCTION 08 TOTAL 236 Construction of Buildings 1,302,567 237 Heavy Civil Construction 130,624 238 Specialty Trade Contractors 530,490 TOTAL CONSTRUCTION 1,963,680 Overall Construction Change from Previous Year MANUFACTURING 311 Food Manufacturing 312 Beverage Tobacco Products 313 Textile Mills 314 Textile Product Mills 315 Apparel Manufacturing 316 Leather Allied Products 321' Wood Product Manufacturing 322* Paper Manufacturing 323* Printing Related Support 324 Petroleum Coal Products 325 Chemical Manufacturing 326 Plastic Rubber Products 327* Nonmetallic Mineral Products 331 Primary Metal Manufacturing 332 Fabricated Metal Mfg Products 333 Machinery Manufacturing 334' Computer Electronic Products 335 Electric Equipment, Appliances 336 Transportation Equipment Mfg 337' Furniture Related Products 339' Miscellaneous Manufacturing TOTAL MANUFACTURING TRANSPORTATION WAREHOUSING 08 TOTAL 481 Air Transportation 0 482 Rail Transportation 1,935 484 Truck Transportation 965 485 Transit and Ground Passengers 11,502 488 Transportation Support 28,728 491 Postal Services 88 492 Couriers Messengers 476 I 493' Warehousing Storage 781 TOTAL TRANSP WHSING 44,475 Overall Transportation Change from Previous Year WHOLESALE TRADE 08 TOTAL 423' WhlsTrade- Durable Goods 1,777,808 424' Whls Trade Nondurable Goods 113,096 425' Wholesale Electronic Markets 2,805 WHOLESALE TRADE TOTAL 1,893,709 Overall Wholesale Change from Previous Year Sales Tax Mitigation NAICS Codes 09/23/2009 08 TOTAL 4,997 2,328 1,050 22,660 215 9 9,515 21,545 143,009 9,630 8,068 4,085 5,242 52 6,310 -8,777 44,162 895 191,525 31,384 22,411 520,315 Overall Manufacturing Change from Previous Year SALES TAX SUMMARY July 2009 (Received in September) YTD 08 YTD 09 YTD %Diff 846,869 327,348 -61.3% 78,697 44,397 -43.6% 298,707 221,050 -26.0% 1,224,272 592,795 (6631,478) -51.6% YTD 08 YTD 09 YTD Diff 2,928 744 -74.6% 872 1,705 95.5% 42 155 265.2% 16,960 7,932 -53.2% 92 37 -60.4% 2 4 113.0% 6,106 1,971 -67.7% J 11,872 11,303 -4.8% I 106,109 37,110 -65.7% I 6,188 2,802 -54.7% 5,554 3,741 -32.6% 3,014 2,110 -30.0% 2,790 1,172 -58.0% 26 101 280.4% 3,468 1,844 -46.8% 11,838 1,969 116.6% 31,848 11,216 -64.6% 443 90 -79.6% 109,909 80,383 -26.9% 26,676 5,802 -78.3% f 11,903 7,417 -37.7% J 336,965 179,606 (1157,359) -46.7% 1 YTD 08 YTD 09 YTD Diff 0 0 0.0% 1,115 833 -25.2% 262 1,412 438.1% 6,674 6,700 0.4% 16,336 13,888 -15.0% 37 0 100.0% 462 32 -93.0% 444 714 60.7% f 25,331 23,580 ($1,751) -6.9% YTD 08 YTD 09 YTD Diff 1,271,180 921,221 -27.5% 53,672 62,706 16.8% 2,074 1,177 -43.3% 1,326,925 985,103 ($341,822) -25.8% NAICS 1 441` I 447' NAICS 442' 443* 444* 445* 446' 448' 451' 452' 453* 454* Page 1 AUTOMOTIVE Motor Vehicle Parts Dealer Gasoline Stations TOTAL AUTOMOTNE RETAIL TRADE Furniture Home Furnishings Electronics Appliances Building Material Garden Food Beverage Stores Health Personal Care Clothing Accessories Sporting Goods, Hobby, Books General Merchandise Stores Miscellaneous Store Retailers Nonstore Retailers TOTAL RETAIL TRADE SERVICES 51X Information 52X Finance Insurance 53X Real Estate, Rental, Leasing 541 Professional, Scientific, Tech 551 Company Management 56X Admin, Supp, Remed Svcs 611 Educational Services 62X Health Care Social Assistance 71X Arts Entertainment 72X' Accommodation Food Svcs 81X Other Services 92X Public Administration TOTAL SERVICES 08 TOTAL 993,146 73,034 1,066,181 Overall Automotive Change from Previous Year 08 TOTAL 621,785 1,077,238 619,645 88,317 146,841 2,101, 593 644,522 2,231,745 721,034 116,347 9 8,369,066 Overall General Retail Change from Previous Year 08 TOTAL 570,706 75,585 403,851 338,302 1,902 167,119 12,727 109,308 106,515 1,858,292 192,450 843 3,837,599 Overall Services Change from Previous Year MISCELLANEOUS 08 TOTAL 000 Unknown 1,147 111 -115 Agriculture, Forestry, Fishing 1,095 211 -221 Mining Utilities 19,574 999 Unclassifiable Establishments 35,837 MISCELLANEOUS TOTAL 57,652 Overall Miscellaneous Change from Previous Year 08 TOTAL GRAND TOTALS $17,752,678 Grand Total Change from Previous Year 08 YTD 804 201 9,625 16,021 26,651 08 YTD 910,487,129 YTD O8YTD 09YTD %Diff 578,900 430,464 -25.6% 46,327 35,920 -22.5% 625,227 466,384 ($158,843) 08 YTD 09 YTD Diff 439,672 194,471 -55.8% 627,834 516,126 -17.8% 397,356 301,956 -24.0% 62,258 49,432 -20.6% 83,732 105,664 26.2% 1,073,907 1,074,615 0.1% 347,681 309,294 -11.0% 1,247,743 1,088,903 -12.7% 419,911 286,370 -31.8% 62,958 157,595 150.3% 4,763,051 4,084,425 ($678,627) YTD 08 YTD 09 YTD Diff 327,172 310,785 -5.0% 38,165 24,286 -36.4% 242,856 208,540 -14.1% 154,627 98,787 -36.1% 1,337 727 -45.6% 90,084 76,207 -15.4% 3,796 22,370 489.4% 65,791 46,166 -29.8% 66,063 54,573 -17.4% 1,056,715 1,026,773 -2.8% I 111,806 106,326 -4.9% 295 13,589 4507.9% 2,158,706 1,989,130 (1169,576) -7.9% YTD 09 YTD Diff 397 -50.6% 80 -60.3% 8,922 -7.3% 2,447 -84.7% 11,846 ($14,805) YTD 09 YTD Diff $8,332,869 ($2,154,261) MK Sales Tax Rpl 200907.xIs -25.4% -14.2% -55.6% -20.54% 2009 L 2008 ca a) 2007 2006 $10,487,133 Four Year Comparison $9,938,118 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 Taxes Collected Year to Date $8,332 885