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HomeMy WebLinkAboutReg 2004-09-20 Item 7C.1 - Budget - Foster Golf Course Fund COUNCIL AGENDA SYNOPSIS of Z 'c Initials ITEM NO. .i f t3 *try -I I Meeting Date I Prepared by 1 Mayor't„review 1 Coun�s'l retiep 1 I +di 09/20/04 ARD 1 ✓ttE I.� //r'+ issoa 1 1 1 I 1 1 1 I .ITEM °INFORMATION CAS NUMBER: 04-132 I ORIGINAL AGENDA DATE: 9/20/04 AGENDA ITEM TITLE Budget Motions for Golf Course Funding and Establishment of the 503 Fund Insurance LEOFF CATEGORY Discussion Motion Resolution Ordinance BidAward Public Heating Other Mtg Date Mtg Date 9/20/04 Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date I SPONSOR Council Mayor Adm Svcs DCD Finance Fire Legal P&R Police PW SPONSOR'S A. Authorize $400,000 transfer to 411 Fund from General Fund 000 SUMMARY B. Authorize Establishment of 503 Fund Insurance LEOFF See attached memorandums for details Two Motions. REVIEWED BY COW Mtg. CA &P Cmte F &S Cmte Transportation Cmte Utilities Cmte Arts Comm. Parks Comm. Planning Comm. DATE: 9/7/04 RECOMMENDATIONS: SPONSOR /ADMIN. Adopt on September 20, 2004 COMMI'l IhE Move Forward .COST IMPACT FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $400,000 $0 $400,000 Fund Source: REFLECTS A BUDGET TRANSFER FROM GENERAL FUND TO GOLF COURSE FUND. Comments: MTG. DATE I RECORD OF COUNCIL ACTION 9/20/04 MTG. DATE,. .ATTACHMENTS 9/20/04 Memo of September 15, 2004 from Alan Doerschel Memo of September 2, 2004 from Alan Doerschel Finance Safety Minutes from September 7, 2004. To: Tukwila City Council From: Alan R. Doerschel q/~ Date: September 15, 2004 Subject: Budget Amendment Motions On September 2, 2004 1 presented to the Finance & Safety Committee a memorandum outlining two issues that will need authority from the full Council prior to action being taken (see attached September 2, 2004 memo). First, we need a Budget Motion authorizing the Administration to transfer up to $400,000 to the 411 - Foster Golf Course Fund from the 000 - General Fund. Secondly, we need a Budget Motion to allow the 503 - Insurance - LEOFF Fund to be established. No additional funding is required. The Fund Balance in the 502 Fund - Insurance will be redistributed between the two Funds. These motions will allow us to make the necessary changes prior to the actual Budget Amendments in November of this year. The new Fund - 503 will appear in the Proposed Budget for 2005. Also, the repayment schedule for the Golf Course Transfer will be included in the 2005-2010 Planning Model proposal in October. To: Finance & Safety Committee From: Alan R. Doerschel Date: September 2, 2004 Subject: Budget Changes for 2004 As previously reported the Golf Course Fund will be short by approximately $400,000 by the end of 2004. The reasons are: $500,000 shortfall from 2003 revenues due to construction disruption, of which only $200,000 shortfall was projected. That leaves a difference of $300,000. · Revenue loss from concessionaire and golf operations due to construction timeline exceeding original estimates by several months. Approximately $200,000. · Construction costs exceeding the budget by $100,000. (Council approved action, disqualification of original low bidder and fuel tank clean-up issues). These $600,000 in anticipated losses along with only a $200,000 budgeted surplus accounts for the approximate $400,000 shortfall. Although the Golf Course renovations are being received well, it will take several years to recover the "lost" golfers prior to partial shutdown of the Golf Course. It is expected to take several years before the operations will provide sufficient revenues to repay the General Fund Loan of $400,000. Also, as previously suggested that we remove the admissions tax on Golf Greens Fees to provide additional "net" revenue to the Golf Fund. As a separate issue I am recommending a new Fund be established; Insurance - LEOFF I or 503 Fund. There is no additional cost involved. We simply need to break the Leoff I employees out of the existing self~ insurance, 502 Fund. This is required because of new national accounting standards regarding LEOFF I employees. Finance and Safety Committee September 7, 2004 Present: Dave Fenton, Chair; Joan Iternandez, Dennis Robertson Alan Doerschel, Rhonda Berry, Brace Linton, Keith Haines, Rick Still, Lucy Lauterbach 1. Northfield Car Wash Purchase Alan explained that Andy Berg had needed more equity up front because his taking over raw land wasn't as valuable as his having land with a car wash on it. The bank wanted him to pay more up front as a result. A Level 1 assessment will be done on the Newporter site, and though the current car wash site has already had a Level 1 assessment, it will now get a Level 2 assessment, as there are some tanks (though not oil tanks) that need additional testing. Joan again expressed interest in having language added about this being an urban renewal program purchase to allay residents' suspicions the City is buying property unnecessarily. The other two members did not share her concern, but wondered if the City Attorney could clarify the reason for the language. Addressing the whole Tukwila Village funding, Alan said it may cost a little less than the original $8 million estimate. With no parking garage and no surface water holding tank, costs have been reduced. Even with the Ben Carol and the mobile home park costing more, it should still cost less if we allow the developer more flexibility. Recommend Car Wash Purchase to that evening's meeting. 2. Budget Changes for 2004 At this time in the budget year Alan has an idea of the unbudgeted expenses that will affect the ending fund balance. This year the golf course had some unexpected expenses in building their clubhouse. First, the long closure of part of the course lost some of the golfers who'd played there for years, and they haven't come back yet. Receipts since the course opened in late June haven't met the 2001 levels yet. The extra costs in building the pro shop and restaurant were also unanticipated. Without Mike Sweeney riding herd and the developer finishing the job though he lost money on it, the costs would have been much higher. However, they were still $400,000 over the budget and contingency. It will take a budget motion to authorize the City to lend the golf course the funds until a budget amendment is made in November. It will take a few years to pay off the entire $400 k. The City does not usually subsidize the golf course, which is unusual for Valley cities. In a separate vein, Alan will separate the LEOFF charges, which up to now have been part of the self-insured fund. This is due to new national accounting standards for LEOFF I employees. A new 503 fund will be set up to accomplish this separation. Information. 3. City Council and Other Budgets Departments have been given direction to keep their budgets within a 4% increase. The Committee members thought they should try the same. Salaries and benefits have risen 7% over 2003. The Committee recommended cutting the travel budget from $17,000 to $14,000, and Miscellaneous from $4,000 to $2,500. This could affect travel and conference registrations for all Council next year. Alan also talked about the CIP. Fort Dent costs are rising, and will be over budget as the sewer line price just doubled over the engineer's estimate. Materials made ofoil are more expensive (plastic pipe), and the problem was worse than known about until they got into the soils surrounding the pump station. Because it is turning into a more costly item than thought, Alan will give it its own budget page in the CIP. It has been part of the 303 General Improvements fund where the Council chamber project also is. Recommend Council budget to Council.