HomeMy WebLinkAboutFS 2010-11-16 COMPLETE AGENDA PACKET City of Tukwila Distribution S. Hunstock D. Speck
�1 ILA y
D. Quinn M. Hart R. Still
A. Ekberg S. Kerslake D. Tomaso
J 4,p\ y Finance and Safety K. Hougardy K. Kertzman J. Trantina
�C D. Robertson T. Kinlow M. Villa
Committee Mayor Haggerton K. Mate] Judge Walden
--1 S. Lancaster P. McCarthy B. Arthur
0 De'Sean Quinn, Chair C. O'Flaherty M. Miotke C. Parrish
S. Brown G. Labanara S. Kirby
O Allan Ekberg J. Ferrer -Santa Ines D. Lincoln S. Norris
90: 0 Kathy Hougardy B. Giberson N. Olivas
D Haynes J. Pace
AGENDA
TUESDAY, NOVEMBER 16, 2010
CONFERENCE Room #3, 5:00 PM
Item Recommended Action Page
1. PRESENTATION(S)
2. BUSINESS AGENDA
a. 2011 -2012 Legal Services Contract. a. Forward to 11/22 C.O.W. Pg.1
Steve Lancaster, City Administrator and 12/6 Regular Mtg.
b. Tax Levy Legislation: Shawn Hunstock, Finance Director b. Forward to 11/22 C.O.W. Pg.9
(1) An Ordinance levying the General Taxes for the Fiscal Year and 11/22 Special Mtg.
commencing January 1, 2011.
(2) A Resolution declaring a Finding of Substantial Need
relating to the Property Tax Levy commencing
January 1, 2011.
(3) An Ordinance increasing the Regular Property Tax Levy
one percent from the previous year commencing
January 1, 2011.
c. Budget Legislation: Shawn Hunstock, Finance Director c. Forward to 11/22 C.O.W. Pg.17
(1) An Ordinance amending the 2010 Budget. and 12/6 Regular Mtg.
(2) An Ordinance adopting the 2011 -2012 Budget. Pg.27
(3) A Resolution adopting the Capital Improvement Program.
d. City Investments: d.(1) Information only. Pg.33
(1) Investment Report for 3rd Quarter. d.(2) Committee approval.
(2) Draft Investment Policy.
Peggy McCarthy, Deputy Finance Director
e. Sales Tax Report. e. Information only. Pg.51
Shawn Hunstock, Finance Director
3. ANNOUNCEMENTS
4. MISCELLANEOUS
Next Scheduled Meeting: Tuesday, December 7, 2010
Committee Goals:
x Work together in cooperation with nearby cities to address common problems in the Highway 99 corridor and
Military Road.
x 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).
x Research the viability of sponsoring a City -wide Citizens' Academy (also assigned to CAP).
The City of Tukwila strives to accommodate individuals with disabilities.
Please contact the City Clerk's Office at 206 433 -1800 (TDD 206 248 -2933) for assistance.
BLANK
1-4 W,9s
ti City of Tukwila e Jim Haggerton, Mayor
si
90: INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Finance and Safety Committee
FROM: Steve Lancaster
DATE November 8, 2010
SUBJECT: Contract for Legal Services, 2011 -2012
ISSUE
The current contract for legal services provided by Kenyon Disend PLLC expires December 31,
2010. Attached is a proposed contract for 2011 -2012
BACKGROUND
The City of Tukwila contracts for legal services including:
General city attorney services;
Prosecution services;
Litigation and contested administrative proceedings,
Paralegal services; and
"Special services" (services not otherwise specified)
DISCUSSION
Under the current and proposed contracts, general city attorney, prosecutor and paralegal
services are provided at a flat monthly rate. Litigation, contested administrative proceedings
and "special services" are subject to prior approval and are billed at the hourly rates of
contractor staff involved. Contractor's hourly rates are attached to the proposed 2011 -2012
contract.
The 2010 flat rate for general city attorney and prosecutor services under the current contract is
$39,786 per month. The flat rate for both 2011 and 2012 under the proposed new contract is
$35,500 for a monthly savings of $4286 ($51,432 per year)
RECOMMENDATION
It is recommended that this contract be forwarded to the November 22, 2010 Committee-of-the
Whole meeting for discussion, and the December 6, 2010 Regular Meeting for approval
ATTACHMENTS
Draft Contract for Legal Services
1
Contract No.
CONTRACT FOR LEGAL SERVICES
This Agreement is entered into by and between the CITY OF TUKWILA, Washington, a
noncharter optional municipal code city hereinafter referred to as "the City," and KENYON
DISEND, PLLC, hereinafter referred to as "the Contractor," whose principal office is located in
Issaquah, Washington.
WHEREAS, the City has a need to have certain legal services performed for its citizens;
and
WHEREAS, the City desires to have the Contractor perform such services pursuant to
certain terms and conditions; now, therefore,
IN CONSIDERATION OF the mutual benefits and conditions hereinafter contained, the
parties hereto agree as follows:
1. Scone and Schedule of Services to be Performed by Contractor. The Contractor shall
perform those services described on Exhibit A attached hereto and incorporated herein by this
reference as if fully set forth. In performing such services, the Contractor shall at all times comply
with all federal, state, and local statutes, rules and ordinances applicable to the performance of such
services and the handling of any funds used in connection therewith. Such local rules and
ordinances shall include, but not be limited to, the City Code of Ethics, as set forth in Ordinance
No. 2068. The Contractor shall request and obtain prior written approval from the City if the scope
or schedule is to be modified in any way.
2. Compensation and Method of Payment. The City shall pay the Contractor for services
rendered according to the rate and method set forth on Exhibit B attached hereto and incorporated
herein by this reference.
3. Contractor Budget. The Contractor shall apply the funds received under this Agreement
within the maximum limits set forth in this Agreement.
4. Duration of Agreement. This Agreement shall be in full force and effect for a period
commencing January 1, 2011, and ending December 31, 2012, unless sooner terminated pursuant to
paragraph 8 of this Agreement.
5. Independent Contractor. Contractor and City agree that Contractor is an independent
contractor with respect to the services provided pursuant to this Agreement. Nothing in this
Agreement shall be considered to create the relationship of employer and employee between the
parties hereto. Neither Contractor nor any employee of Contractor shall be entitled to any benefits
accorded City employees by virtue of the services provided under this Agreement. The City shall
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KenyonDisend20l 1 2012 Contract
2
not be responsible for withholding or otherwise deducting federal income tax or social security or
contributing to the State Industrial Insurance Program, or otherwise assuming the duties of an
employer with respect to the Contractor, or any employee of the Contractor.
6. Indemnification. The Contractor shall indemnify, defend and hold harmless the City, its
officers, agents and employees, from and against any and all claims, losses or liability, including
attorney's fees, arising from injury or death to persons or damage to property occasioned by any act,
omission or failure of the Contractor, its officers, agents and employees, in performing the work
required by this Agreement. With respect to the performance of this Agreement and as to claims
against the City, its officers, agents and employees, the Contractor expressly waives its immunity
under Title 51 of the Revised Code of Washington, the Industrial Insurance Act, for injuries to its
employees, and agrees that the obligation to indemnify, defend and hold harmless provided for in
this paragraph extends to any claim brought by or on behalf of any employee of the Contractor.
This waiver is mutually negotiated by the parties. This paragraph shall not apply to any damage
resulting from the sole negligence of the City, its agents and employees. To the extent any of the
damages referenced by this paragraph were caused by or resulted from the concurrent negligence of
the City, its agents or employees, this obligation to indemnify, defend and hold harmless is valid
and enforceable only to the extent of the negligence of the Contractor, its officers, agents, and
employees.
7. Insurance. The Contractor shall procure and maintain in full force throughout the
duration of this Agreement professional liability insurance with a minimum coverage of $1,000,000
per claim and $3,000,000 aggregate. Contractor shall provide evidence of such coverage in a
manner and form acceptable to the City in the City's sole discretion. Cancellation of the required
insurance shall automatically result in termination of this Agreement.
8. Termination. This Agreement may at any time be terminated by the City giving to the
Contractor thirty (30) days written notice of the City's intention to terminate the same.
9. Discrimination Prohibited. The Contractor shall not discriminate against any employee,
applicant for employment, or any person seeking the services of the Contractor to be provided
under this Agreement on the basis of race, color, religion, creed, sex, age, national origin, marital
status or presence of any sensory, mental or physical handicap.
10. Assignment and Subcontract. The Contractor shall not assign or subcontract any
portion of the services contemplated by this Agreement without the written consent of the City.
11. Entire Agreement. This Agreement contains the entire agreement between the parties
hereto and no other Agreements, oral or otherwise, regarding the subject matter of this Agreement,
shall be deemed to exist or bind any of the parties hereto. Either party may request changes in the
agreement. Proposed changes which are mutually agreed upon shall be incorporated by written
amendments to this Agreement and with the consent of the City Council.
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KenyonDisend2011 2012 Contract
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12. Notices. Notices to the City of Tukwila shall be sent to the following address:
City Clerk
City of Tukwila
6200 Southcenter Blvd.
Tukwila, Washington 98188
Notices to the Contractor shall be sent to the address provided by the Contractor upon the
signature line below.
13. Applicable Law: Venue: Attorney's Fees. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington. In the event any suit, arbitration,
or other proceeding is instituted to enforce any term of this Agreement, the parties specifically
understand and agree that venue shall be properly laid in King County, Washington. The prevailing
party in any such action shall be entitled to its attorney's fees and costs of suit.
DATED this day of 2010.
CITY OF TUKWILA CONTRACTOR:
KENYON DISEND, PLLC
By:
Mayor Jim Haggerton Title:
ATTEST /AUTHENTICATED: ADDRESS: 11 Front Street South
Issaquah, Washington 98027
(425) 392 -7090
Christy O'Flaherty, City Clerk
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EXHIBIT A SCOPE OF SERVICES
Contractor agrees to provide a level of service equal to or greater than the level of service
provided by an in -house city attorney office consisting of one city attorney and one assistant city
attorney /prosecutor.
In particular, Contractor agrees to:
1. Provide general city attorney services, which include but are not limited to:
A. Attend regular meetings of the City Council;
B. Attend Executive Sessions and special meetings of the City Council,
Committee of the Whole, Committee meetings, and meetings of City Boards
and Commissions, upon request;
C. Prepare or review ordinances, resolutions, contracts, interlocal agreements,
and other city documents or materials as requested;
D. Practice "preventative law" in the form of regular consultation with staff and
elected officials, and maintenance of between 20 and 25 "office hours" each
week at City Hall, exclusive of prosecutor time;
E. Provide special classes and/or seminars for staff, elected officials, Boards,
and Commissions on issues including, but not limited to, ethics, conflict of
interest, and the appearance of fairness doctrine.
F. Except as set forth in Section 3, defend litigation brought against the City;
G. Defend or initiate administrative hearings involving the City including, but
not limited to, drug forfeiture and seizure hearings, code enforcement, and
similar matters;
H. Such other general city attorney matters as are assigned;
I. Provision of cellular telephones to all attorneys employed by Contractor, and
a list of such telephone numbers to the City; and
J. Comprehensive Internet and remote access capability, including e -mail,
linking Contractor's office with City Hall.
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5
2. Provide city prosecution services, which include but are not limited to:
K. Review, determine filing decision, and file all Tukwila Police Department
reports involving misdemeanor and gross misdemeanor crimes, and
represent the City on all contested traffic hearings;
L. Regularly consult with and train police department personnel on selected
legal issues, and attend police department administrative staff meetings as
requested;
M. File and defend appeals of municipal court decisions; and
N. Such other city prosecution matters as are assigned.
3. Provide City Attorney services for litigation and contested administrative
proceedings, which include but are not limited to:
O. Initiation and defense of litigation and contested administrative proceedings
on the City's behalf. Contractor shall be compensated for such litigation and
contested administrative proceedings as Separate Matters under paragraph 2
of Exhibit B.
4. Provide Special Services, which include but are not limited to:
P. Other specialized municipal law services; provided, however, that any such
Special Services shall first be authorized by the Mayor, and shall be subject
to paragraph 3 of Exhibit B regarding compensation.
5. Provide paralegal services, which include but are not limited to:
Q. General paralegal support for the City Attorney and for the prosecuting
attorney equivalent to one FTE.
6. It is understood and agreed that the City Attorney shall not provide private legal
services to any employee of the City of Tukwila during the term of this agreement.
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KenyonDisend201 l 2012 Contract
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EXHIBIT B COMPENSATION AND METHOD OF PAYMENT
1. For 2011, for all general city attorney and city prosecutor services set forth in paragraphs
1 and 2 of Exhibit A, Contractor shall be paid a flat monthly fee of $35,500.00, plus extraordinary
expenses. For 2012, for all general city attorney and city prosecutor services set forth in paragraphs
1 and 2 of Exhibit A, Contractor shall be paid a flat monthly fee of $35,500.00, plus extraordinary
expenses. Extraordinary expenses shall include court filing fees, deposition and other discovery
costs, parking, mileage costs other than to and from City Hall or other locations within the City, and
other similar expenses advanced by Contractor on City's behalf. Extraordinary expenses shall not
include routine photocopying, fax, or long- distance telephone charges
2. All litigation and administrative proceeding services set forth in paragraph 3 of Exhibit
A shall be considered to be Separate Matters. Contractor shall maintain its current practice of
providing individual monthly billing statements for each Separate Matter. Separate Matters mean
(a) each individual civil action filed by or against the City, except that multiple condemnation
lawsuits related to the same project shall constitute only one Separate Matter, (b) all Code
Enforcement matters collectively conducted before the Hearing Examiner or in Court, but not
including general code enforcement services which shall be included in Contractor's flat monthly
fee, (c) all criminal appeals collectively filed by or against the City, (d) all significant projects
which require specialized knowledge and hours expended outside of the regular office hours for
that attorney; and (e) all drug or other forfeiture matters collectively filed by or against the City.
Contractor shall include within the monthly flat fee, and shall not otherwise bill the City for, the
first $5,000 expended on any Separate Matter as computed at Contractor's normal hourly rates for
2011 and 2012. Thereafter, and for each such Separate Matter, Contractor shall be paid its normal
hourly rates for 2011 and 2012. A copy of Contractor's hourly rates for 2011 is attached hereto.
3. Special Services, if any, shall first be approved by the Mayor and City Council after
negotiation regarding (1) whether additional compensation is fair and equitable for such Special
Services and, if so, (2) the amount and manner of payment (e.g., flat fee, hourly, other) for such
Special Services.
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KenyonDisend20l 1 2012 Contract
7
KENYON DISEND, PLLC
HOURLY RATE SCHEDULE FOR YEAR 2011
ATTORNEYS:
Partners and Senior Attorneys:
Michael R. Kenyon $255.00
Bruce L. Disend $255.00
Shelley M. Kerslake $225.00
Chris D. Bacha $225.00
Bob C. Sterbank $225.00
Margaret J. King $220.00
Kari L. Sand $210.00
Associate Attorneys:
Renee G. Walls $170.00
Sara B. Springer $145.00
Rachel B. Turpin $110.00
PARALEGALS:
Margaret C. Starkey $105.00
Sheryl A. Loewen 95.00
Pam M. Odegard 90.00
Shelly Crossland 90.00
Mary Eichelberger 90.00
Terry Cox 90.00
Kathy Swoyer 90.00
LEGAL INTERNS: $105.00
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J 1ILA G Vf.ci
4 s C ity of Tukwila
.;i.1, r e 9 Jim H gg rto Mayor
a e n,
90 INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Finance and Safety Committee
FROM: Shawn Hunstock, Finance Director
DATE: November 10, 2010
SUBJECT: 2011 Property Tax Levy Ordinances and Resolution
ISSUE
Council must adopt the property tax levy ordinance by November 30 Council must
adopt an ordinance setting the levy rate, and an ordinance setting the levy amount. If
Council wishes to levy an addition 1% above the 2010 level, a resolution declaring a
finding of substantial need must also be passed by Council.
BACKGROUND
The City was notified on October 26, 2010 that the assessed value for Tukwila for 2011
is projected to be $4,737,264,412. This represents a decrease of $245,187,939, or
4.9 from the 2010 assessed value.
DISCUSSION
The City's current levy rate for 2010 is $2.66 per $1,000 of assessed value. In order for
the City to levy the maximum of 101% of 2010 revenue, a levy rate of $2.82 would be
needed for 2011. The change in levy of $0.16 represents a 6.02% increase. Assuming a
home of average value of $300,000, and no change in assessed value, the increase in
levy rate would cost approximately $48 per year for a Tukwila resident.
There is a possibility that the King County Assessor's Office could provide late
adjustments to assessed value after Council adopts the accompanying ordinances and
resolution. This did occur last year for the 2010 property tax levy. Should this happen
again this year, a revised ordinance would be presented to Council on December 6
RECOMMENDATION
The Finance and Safety Committee is being asked to approve the 2011 property tax
levy ordinances and resolution finding of substantial need. This item is scheduled for
the November 16 Finance and Safety Committee meeting, and the Committee of the
Whole and Special Council Meetings on November 22
ATTACHMENTS
Draft Ordinances
Draft Resolution
9
10
D NA,
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, LEVYING THE GENERAL TAXES FOR THE CITY OF
TUKWILA IN KING COUNTY FOR THE FISCAL YEAR COMMENCING
JANUARY 1, 2011, ON ALL PROPERTY, BOTH REAL AND PERSONAL, IN SAID
CITY, WHICH IS SUBJECT TO TAXATION FOR THE PURPOSE OF PAYING
SUFFICIENT REVENUE TO CARRY ON THE SERVICES OF THE SEVERAL
DEPARTMENTS OF SAID CITY FOR THE ENSUING YEAR, AS REQUIRED BY
LAW; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE
DATE.
WHEREAS, the City Council of the City of Tukwila has considered the City's anticipated
financial requirements for 2011 and the amounts necessary and available to be raised by ad
valorem taxes on real, personal and utility property; and
WHEREAS, the final assessed valuation calculation has been determined,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. Regular Tax Levy.
A. There shall be and hereby is levied on all real, personal and utility property in the City
of Tukwila, in King County, whose estimated assessed valuation is $4,737,264,412, current taxes
for the ensuing year commencing January 2011, in the amount and at the rates specified below.
Rate Amount
Regular Tax Levy $2.82 $13,375,000
B. The said taxes herein provided for are levied for the purpose of payment upon the
general bonded indebtedness of the City of Tukwila, the General Fund, and for the maintenance
of the departments of the municipal government of the City of Tukwila for the fiscal year
beginning January 1, 2011.
Section 2. Collection. This ordinance shall be certified to the proper County officials, as
provided by law, and taxes here levied shall be collected to pay to the Finance Director of the City
of Tukwila at the time and in the maruner provided by the laws of the State of Washington for the
collection of taxes for non chartered code cities.
Section 3. 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 4. 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 and effect January 1, 2011.
PASSED BY THE CITY COUNCIL• OF THE CITY OF TUKWILA, WASHINGTON, at a
Special Meeting thereof this day of 2010.
ATTEST/ AUTHENTICATED:
Jim Haggerton, Mayor
Christy O'Flaherty, CMC, City Clerk
Filed with the City Clerk:
APPROVED AS TO FORM BY Passed by the City Council:
Published:
Effective Date:
Office of the City Attorney Ordinance Number
W \Word Processing Ordinances \General Tax Levy 2011.doc
SH:nvh 11/09/2010 Page 1 of 1
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DRAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUICWILA,
WASHINGTON, DECLARING A FINDING OF SUBSTANTIAL NEED
RELATING TO THE CITY OF TUKWILA PROPERTY TAX LEVY,
COMMENCING JANUARY 1, 2011, ON ALL PROPERTY, BOTH REAL
AND PERSONAL, IN COMPLIANCE WITH RCW 84.55.120.
WHEREAS, the City of Tukwila has properly given notice of a public hearing, held on
November 22, 2010, pursuant to RCW 84.55.120; and
WHEREAS, the City Council finds that there is a substantial need, due to declining sales
tax revenue and general maintenance and operation expenses, to increase the budget by 1%
and to set the levy limit at 101 pursuant to RCW 84.55.010;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. An increase of 1% in the regular property tax levy, in addition to any amount
resulting from the addition of new construction and improvements to property and any
increase in the value of State- assessed property, is hereby authorized for the 2011 levy This
increase is exclusive of additional revenue resulting from new construction, improvements to
property, and any increase in the value of State assessed property, any annexations that have
occurred and refunds made.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a
Special Meeting thereof this day of 2010
ATTEST/ AUTHENTICATED:
Dennis Robertson, Council President
Christy O'Flaherty, CMC, City Clerk
Filed with the City Clerk:
APPROVED AS TO FORM BY Passed by the City Council.
Published.
Effective Date:
Office of the City Attorney Ordinance Number
W" Word Processing \Resolutions \201 1 Property Tax Levy Substantial Need.doc
SH:mrh 11/9/2010 Page 1 of 1
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Dp APT
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, INCREASING THE CITY OF TUKWILA REGULAR LEVY
FROM THE PREVIOUS YEAR, COMMENCING JANUARY 1, 2011, ON ALL
PROPERTY, BOTH REAL AND PERSONAL, IN COMPLIANCE WITH RCW
84.55.120; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN
EFFECTIVE DATE.
WHEREAS, the City of Tukwila has properly given notice of a public hearing held on
November 22, 2010, pursuant to RCW 84.55.120; and
WHEREAS, after hearing and duly considering all relevant evidence and testimony
presented, the City Council has determined that in order to discharge its expected expenses
and obligations the City requires an increase in property tax revenue from the previous year,
in addition to the increase resulting from the addition of new construction and improvements
to property and any increase in the value of State- assessed property; and
WHEREAS, the City Council has determined it is in the City's best interest and necessary
to meet its expenses and obligations for the property tax revenue to be increased for 2011, and
the final assessed valuation calculation has been determined,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. An increase in the regular property tax levy, in addition to any amount
resulting from the addition of new construction and improvements to property and any
increase in the value of State- assessed property, is hereby authorized for the 2011 levy in the
amount of $107,296, which is a percentage increase of 1.0% from the previous year. This
increase is exclusive of additional revenue resulting from new construction, improvements to
property, any increase in the value of State assessed property, any annexations that have
occurred and refunds made.
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 and effect
January 1, 2011.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a
Special Meeting thereof this day of 2010.
ATTEST /AUTHENTICATED
Jim Haggerton, Mayor
Christy O'Flaherty, CMC, City Clerk
Filed with the City Clerk:
APPROVED AS TO FORM BY. Passed by the City Council:
Published.
Effective Date:
Office of the City Attorney Ordinance Number
W' \Word Processing Ordinances \Regular Tax Levy Increase 2011.doc
SH:m.rh 11/09/2010 Page 1 of 1
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4 %LA=
J� (41,5:1'
City of Tukwila
f El Jim Haggerton, Mayor
f t
905 INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Finance and Safety Committee
FROM: Shawn Hunstock, Finance Director
DATE: November 10, 2010
SUBJECT: 2010 Year End Budget Amendment
ISSUE
Some departments within the General Fund, as well as some other funds in total, are
projected to be at risk of going over budget by the end of 2010. While the legally
adopted budget is only at the fund level, we typically reallocate money within the funds
to appropriate money to departments projected to be over budget by the end of the
year.
BACKGROUND
When the 2009 -2010 budget was adopted in December 2008, some items were not
anticipated at that time. As such, a budget amendment must be done before the end of
the biennium to appropriate money for these unforeseen items. Also, there are
circumstances where the amount budgeted back in December 2008 was not sufficient
to cover two years worth of activity for a given department or line -item.
The items outline below are those that should be addressed before the end of 2010 to
fully appropriate enough money to departments within the General Fund, as well as
increase funding in other funds for items that were not known when the 2009 -2010
budget was adopted.
DISCUSSION
General Fund
Two revenue line items are expected to be over budget by year end, and will thus pay
for the temporary budget increase needed to fund additional expenses in 2010. Property
tax revenue is estimated to be over budget by $393,000 by year end, and business
license revenue is estimated to be over budget by at least $32,000. A $9,000 grant was
also received by the Arts Commission, the use of which is included below as an
expense.
The Arts Commission received a $9,000 grant from 4Culture for curtains at the Foster
Performing Arts Center. As this was not originally budgeted for the Commission, a
budget amendment is necessary to fund the use of that money.
17
INFORMATIONAL MEMO
Page 2
In the Finance Department, claims and judgment activity has been extremely high in
2010. Claims expenses, amounts paid below our deductible with WCIA, was $212,486
in 2009. Through October 2010, expenses to date are $412,886. Approximately ninety
five percent of the claims paid related to police activities. Also, the Finance department
purchased the EDEN Business License module, and related real -time cashiering
software, to implement the recently adopted Revenue Generating Regulatory License
fee. This fee, along with business licenses themselves, will be sold by the Finance
department beginning December 1 The cost of the two pieces of software, including
staff training, was approximately $40,000. Annual support costs for these two items are
already included in the 2011 -2012 proposed preliminary budget.
It is estimated that the Legal budget will need another $40,000 in temporary funding for
Special Matters conducted during 2010. The Special Matters are above and beyond the
typical general legal counsel and prosecutorial services provided by Kenyon Disend.
The one -time items typically involve special projects such as sign code changes,
reviewing development agreements, and consulting City staff on various other project
related tasks.
The budget for building abatement was incorrectly allocated 100% to 2009 in the 2009-
2010 biennial budget. The Department of Community Development is in need of funding
to cover costs incurred in 2010 related to building abatement in the amount of $35,000.
The Court budget is projected to be over spent by year end, with the majority of the
excess expenditures coming from the Public Defender line item. It is expected that
another $25,000 will be needed to fund this unusual increase in public defender costs
during 2010.
The Fire department is projected to be over budget by approximately $85,000, with the
majority of the variance coming from O &M expenses from the Public Works, Fleet
division. There were numerous incidents involving vehicles and apparatus during 2010,
and some incidents in 2009 that were paid for in 2010. Some of these costs were
reimbursed by either the City's insurance, or private insurance in the case of motor
vehicle accidents. Nevertheless, the cost of apparatus repair is charged to the Fire
department and additional funding is needed to cover the abnormally high charges from
Fleet.
The Parks Maintenance budget is projected to be over budget in the surface water fee
line item. These are fees that are paid to the City's surface water utility. The budget for
these fees has been corrected in the 2011 -2012 proposed preliminary budget, but
additional funding of $25,000 is needed for 2010 to cover the rate increase that
occurred this year.
Hotel /Motel Tax Fund 101
In the Hotel /Motel Tax fund, it is necessary to include in the budget amendment the
revenue coming from SeaTac for the cost of moving the visitor's center to SeaTac. This
is approximately $55,000. There was also money unspent in 2009 that staff needs
allocated to 2010 for web site work and vacation planners. The increase in professional
services is approximately $145,000 for both items.
1 8 W12010 InfoMemos\BudgetAmendment.doc
INFORMATIONAL MEMO
Page 3
Arterial Street Fund 104
In the Arterial Street Fund, a bond issue occurred in 2010 for the Southcenter Parkway
realignment and construction project. While a majority of this money will be carried
forward to 2010 and beyond, it is necessary to budget for the revenue and start of
construction during 2010 when the bond sale occurred. The amount of the bond sale
allocated to the Southcenter Parkway project is $4,355,930.
Debt Service Fund 214 2010A LTGO Tax Exempt Bonds
Debt service on the tax exempt bonds issued in 2010 must be budgeted for to fund the
payment. That portion of the debt service allocated to the Southcenter Parkway project
will come from revenue generated within the project area, supplemented as necessary
from general revenue sources in the General Fund. The portion allocated to emergency
equipment related expenses will be funded by Transfers -In from the General Fund of
general revenue.
Debt Service Fund 215 2010B Build America Bonds
Debt service on the taxable Build America Bonds issued in 2010 must be budgeted for
to fund the payment. That portion of the debt service allocated to the Southcenter
Parkway project will come from revenue generated within the project area,
supplemented as necessary from general revenue sources in the General Fund. The
portion allocated to emergency equipment related expenses will be funded by
Transfers -In from the General Fund of general revenue.
General Government Improvements 303
In the General Government Improvements CIP fund, a bond issue occurred in 2010 for
the purchase of emergency preparedness and response equipment. While a majority of
this money will be carried forward to 2010 and beyond, it is necessary to budget for the
revenue and equipment purchases during 2010 when the bond sale occurred. The
amount of the bond sale allocated to emergency equipment purchases is $1,582,545.
RECOMMENDATION
The Finance and Safety Committee is being asked to approve the 2010 year end
budget amendment.
This item is scheduled for the November 16 Finance and Safety Committee meeting,
the November 22 Committee of the Whole and December 6th Regular Council
Meeting.
ATTACHMENTS
Draft Ordinance
2010 Year -End Budget Amendment (spreadsheet)
2010 Year End Budget Errata (spreadsheet)
W\ 2010 1nfoMemos \Budget Amendment .doc 1 9
20
LAX b
T
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, AMENDING ORDINANCE NO. 2221, WHICH ADOPTED THE
CITY OF TUKWILA'S FIRST BIENNIAL BUDGET FOR THE 2009 -2010 BIENNIUM,
TO ADOPT AN AMENDED BIENNIAL BUDGET; PROVIDING FOR
SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, on December 15, 2008, Ordinance No. 2221 adopted the 2009 -2010 biennial
budget of the City of Tukwila, and
WHEREAS, a public hearing on the proposed 2010 year -end budget amendment was
advertised and held on November 22, 2010;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. Ordinance Amended. Tukwila Ordinance No. 2221 is hereby amended with the
City Council's adoption of the document entitled "City of Tukwila 2010 Year -End Budget
Amendment," incorporated by this reference as if fully set forth herein, in accordance with
RCW 35A.34.200.
Section 2. Estimated Revenues and Appropriations. The totals of the estimated revenues
and appropriations for each separate fund and the aggregate totals are as follows:
FUND EXPENDITURES REVENUES
000 General $105,924,696 $105,924,696
101 Hotel /Motel Tax Fund $3,652,148 $3,652,148
104 Arterial Street $95,408,930 $95,408,930
214 LTGO Bonds 2010A $134,681 $134,681
215 LTGO Bonds 2010B $64,541 $64,541
303 General Gov Improvements $3,858,545 $3,858,545
Section 3. Copies on File. A complete copy of the final budget for 2009 -2010, as adopted,
together with a copy of this amending ordinance, shall be kept on file in the City Clerk's Office,
and a copy shall be transmitted by the City Clerk to the Division of Municipal Corporations of
the Office of the State Auditor and to the Association of Washington Cities.
Section 4. 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 5. 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 and effect 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 2010
ATTEST/ AUTHENTICATED:
Jim Haggerton, Mayor
Christy O'Flaherty, CMC, City Clerk
Filed with the City Clerk:
APPROVED AS TO FORM BY: Passed by the City Council:
Published.
Effective Date:
Office of the City Attorney Ordinance Number
Attachment: City of Tukwila 2010 Year -end Budget Amendment
W Word Processing Ordinances 2010 Budget Amendment
SHanrh 11/9/2010 Page 1 of 1
21
22
City of Tukwila
2010 Year -End Budget Amendment
2009 -2010 Mid Biennium 2010 Year -End Final Adjusted
Adopted Budget Adjusted 2009- Budget 2009 -2010
Budget Adjustment 2010 Budget Amendment Budget
Fund
000 General 99,497,000 5,993,696 105,490,696 434,000 105,924,696
101 Hotel /Motel Tax 3,597,148 3,597,148 55,000 3,652,148
103 City Street 877,000 877,000 877,000
104 Arterial Street 91,553,000 (500,000) 91,053,000 4,355,930 95,408,930
105 Contingency 892,187 892,187 892,187
107 Fire Equipment Cumulative Reserve 767,797 767,797 767,797
207 Limited Tax G.O. Bonds, 1999 1,886,000 1,886,000 1,886,000
208 Limited Tax G.O. Bonds, 2000 735,000 735,000 735,000
209 Limited Tax G.O. Bonds, 2003 1,531,000 1,531,000 1,531,000
210 Limited Tax G.O. Refunding Bonds, 2003 1,233,000 1,233,000 1,233,000
211 Limited Tax G.O. Refunding Bonds, 2008 96,000 96,000 96,000
214 Limited Tax G.O Refunding Bonds, 2010A 134,681 134,681
215 Limited Tax G.O Refunding Bonds, 2010B 64,541 64,541
301 Land Acquisition, Recreation Park Development 11,272,000 11,272,000 11,272,000
302 Facility Replacement 7,939,000 287,712 8,226,712 8,226,712
303 General Government Improvements 2,276,000 2,276,000 1,582,545 3,858,545
401 Water 15,151,301 15,151,301 15,151,301
402 Sewer 15,862,365 15,862,365 15,862,365
404 Water /Sewer Revenue Bonds 1,241,435 1,241,435 1,241,435
405 Bond Reserve 411,000 411,000 411,000
411 Foster Golf Course 5,137,534 5,137,534 5,137,534
412 Surface Water 11,984,134 11,984,134 11,984,134
501 Equipment Rental 10,324,969 10,324,969 10,324,969
502 Insurance Fund 13,155,217 13,155,217 13,155,217
503 Insurance LEOFF 1 Fund 2,282,562 2,282,562 2,282,562
611 Firemen's Pension 1,578,000 1,578,000 1,578,000
Total 302,417,649 5,877,408 307,062,057 6,626,697 313,688,754
23
City of Tukwila
2010 Year End Budget Errata
General Fund 000
Revenue.
Real and Personal Property Tax 000.311.100.00.00 393,000
Business Licenses 000.321.900.00.00 32,000
Cultural Development Authority -Arts Comm 000 337.072.04.00 9,000
Total Revenue 434,000
Expenditures:
Arts Commission
Foster PAC Curtains 000.03.573.900.48.00 9,000
Finance
Claims and Judgements 000.05.514.230.49.03 175,000
EDEN Business License Module 000.05.594.230 64.00 40,000
City Attorney
Special Matters 000.06.515.200.41.03 40,000
Community Development
Building Abatement Program 000.08.559.600.49.02 35,000
Court
Public Defender 000.09 512.500.41.02 25,000
Fire Department
Equipment Rental O &M 000.11.522.200.45.95 85,000
Parks Maintenance
SSWM Charges 000.15.576 800.47.01 25,000
Total Expenditures 434,000
Fund Total:
Hotel /Motel Tax Fund 101
Revenue'
SeaTac Community Services (100%) 101.338.573 01.00 55,000
Total Revenue 55,000
Expenditures:
Media Buy Special Projects 101.00.557.301.44.12 75,000
Media Buy Magazines /Brochures 101.00.557.301.44.15 70,000
Page 1
24
City of Tukwila
2010 Year End Budget Errata
Est Ending Unreserved Fund Balance 291.840.00 (90,000)
Total Expenditures 55,000
Fund Total:
Arterial Street Fund 104
Revenue:
Bond Proceeds 104 391.102.00 00 4,355,930
Total Revenue 4,355,930
Expenditures
Southcenter Parkway Construction 104 97 595.800. 4,355,930
Total Expenditures 4,355,930
Fund Total:
2010A LTGO Bond Fund 214
Revenue:
Sales and Use Tax 214 313.100 00 00 134,681
Total Revenue 134,681
Expenditures:
Debt Service Costs 214.00 59* 950.8 134,681
Total Expenditures 134,681
Fund Total:
2010B LTGO Bond Fund 215
Revenue
Sales and Use Tax 215.313.100 00.00 41,951
IRS Interest Cost Subsidy 215.332.210.20 00 22,590
Total Revenue 64,541
Expenditures:
Debt Service Costs 215.00.59 *.950 8 64,541
Page 2
25
City of Tukwila
2010 Year End Budget Errata
Total Expenditures 64,541
Fund Total
General Government Improvements 303
Revenue:
Bond Proceeds 303.391.102.00.00 1,582,545
Total Revenue 1,582,545
Expenditures:
Emergency Response Equipment 303.97.594.190 1,582,545
Total Expenditures 1,582,545
Fund Total
Page 3
26
�4ILQ"i
s City of Tukwila
a Jim Haggerton, Mayor
\19oa INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Finance and Safety Committee
FROM: Shawn Hunstock, Finance Director
DATE: November 10, 2010
SUBJECT: 2011 -2012 Biennial Budget Ordinance
2011 -2016 Financial Planning Model Capital Improvement Program
ISSUE
Council must adopt the 2011 -2012 biennial budget and 2011 -2016 Capital Improvement
Plan by the end of December. This typically happens with the first Regular meeting in
December.
BACKGROUND
The proposed preliminary budget for 2011 -2012 and draft 2011 -2016 CIP were
presented to Council on October 4, 2010. Since that time, there have been a number of
meetings to discuss items within the budget and CIP, as well as detailed review by all
Council committees during the month of October. Council also held a special budget
workshop on October 19, 2010.
DISCUSSION
The proposed 2011 -2012 biennial budget reflects the adjustments presented to Council
as part of the City's three legged approach to dealing with the current financial crisis.
Program and service reductions have been included in the relevant departments, as
well as related revenue increases. New revenue sources were adopted by Council,
including the Revenue Generating Regulatory License fee. Also, steps were taken to
address the cost of employee compensation. The final budget document will include a
savings of approximately $1.2 million per year in contributions to the City's self
insurance fund.
A listing of changes to the proposed preliminary budget will be presented at the
November 22 Committee of the Whole meeting. These changes will include, among
other items, any agreed to COLA reductions from represented and non- represented
employees.
27
INFORMATIONAL MEMO
Page 2
RECOMMENDATION
The Finance and Safety Committee is being asked to approve the 2011 -2012 biennial
budget ordinance and the 2011 -2016 Financial Planning Model and Capital
Improvement Plan resolution and forward to the Committee of the Whole.
This item is scheduled for the November 16 Finance and Safety Committee meeting,
the November 22 Committee of the Whole meeting, and the December 6 Regular
Council meeting.
ATTACHMENTS
Draft Budget Ordinance
Draft CIP Resolution
28 W InfoMemos\Biennial Budget Ordinance.doc
ri r) PA p
r.:,„y i- k'a ti J
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, ADOPTING THE ANNUAL BUDGET OF THE CITY OF
TUKWILA FOR THE 2011 -2012 BIENNIUM; PROVIDING FOR SEVERABILITY;
AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, the preliminary budget of the City of Tukwila for the 2011 -2012 biennium
was submitted to the City Council in a timely manner for their review; and
WHEREAS, a Public Hearing on the proposed budget was advertised and held on
November 22, 2010;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, DO ORDAIN AS FOLLOWS:
Section 1. The City Council hereby adopts the document entitled "City of Tukwila 2011-
2012 Budget," incorporated by this reference as if fully set forth herein, in accordance with
RCW 35A.33.075
Section 2. The totals of the estimated revenues and appropriations for each separate fund
and the aggregate totals are as follows:
2011 2012 Total Biennium
Revenue Revenue Revenues
Fund Expenditures Expenditures Expenditures
000 General 56,907,414 58,018,052 114,925,466
101 Hotel /Motel 2,049,961 1,753,718 3,803,679
103 City Street 731,000 804,171 1,535,171
104 Arterial Street 38,290,139 10,516,647 48,806,786
105 Contingency 1,293,816 2,595,632 3,889,448
107 Fire Equipment Cumulative Reserve 771,685 901,356 1,673,041
109 Drug Seizure Fund 406,000 208,000 614,000
209 Limited Tax G.O. Bonds 2003 592,572 594,350 1,186,922
210 Limited Tax G.0 Refunding Bonds, 2003 501,932 500,893 1,002,825
211 Limited Tax G.0 Refunding Bonds, 2008 836,829 831,042 1,667,871
212 Limited Tax G.O. Refunding Bonds, 2009A 30,166 30,184 60,350
213 Limited Tax G.O. Refunding Bonds, 2009B 254,438 254,605 509,043
214 Limited Tax G.O. Refunding Bonds, 2010A 395,775 393,975 789,750
215 Limited Tax G.O. Refunding Bonds, 2010B 190,450 190,450 380,900
301 Land Acquisition, Recreation Park Devl. 5,096,243 4,695,772 9,792,015
302 Facility Replacement 2,005,756 1,886,121 3,891,877
303 General Government Improvements 957,203 700,906 1,658,109
304 Fire Improvements 190,100 240,200 430,300
401 Water 10,271,534 7,136,837 17,408,371
402 Sewer 9,121,426 6,676,755 15,798,181
404 Water /Sewer Revenue Bonds 651,637 671,185 1,322,822
405 Bond Reserve 411,000 411,000 822,000
411 Foster Golf Course 2,337,200 1,790,847 4,128,047
412 Surface Water 5,214,886 4,634,471 9,849,357
501 Equipment Rental 5,642,740 5,772,824 11,415,564
502 Insurance Fund 10,123,953 9,872,335 19,996,288
503 Insurance LEOFF 1 Fund 1,929,040 1,825,846 3,754,886
611 Firemen's Pension 1,503,872 1,491,744 2,995,616
Total All Funds Combined 158,708,767 125,399,918 284,108,685
W \Word Processing Ordinances \DRAFT Budget Ordnance 2011- 2012.doc
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29
Section 3. A complete copy of the final budget for 2011 -2012, as adopted, together with a
copy of this adopting ordinance, shall be kept on file in the City Clerk's Office, and a copy shall
be transmitted by the City Clerk to the Division of Municipal Corporations of the Office of the
State Auditor and to the Association of Washington Cities.
Section 4. 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 5. Effective Date. This ordinance or a summary thereof shall be published in the
official newspaper of the City, and hall take effect and be in full force and effect 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 2010.
ATTEST/ AUTHENTICATED:
Jim Haggerton, Mayor
Christy O'Flaherty, City Clerk
Filed with the City Clerk:
APPROVED AS TO FORM BY. Passed by the City Council:
Published:
Effective Date:
Office of the City Attorney Ordinance Number:
W \Word Processing Ordinances \DRAFT Budget Ordinance 2011- 2012.doc
SH:nvh Page 2 of 2
30
DRAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, ADOPTING THE 2011 -2016 FINANCIAL PLANNING
MODEL AND THE CAPITAL IMPROVEMENT PROGRAM FOR GENERAL
GOVERNMENT AND THE CITY'S ENTERPRISE FUNDS.
WHEREAS, when used in conjunction with the biennial City budget, the Capital
Improvement Program (CIP) and the Financial Planning Model for the period 2011 -2016
are resource documents to help plan directions the City will consider for the future; and
WHEREAS, the Financial Planning Model and Capital Improvement Program are
not permanent fixed plans, but are guidelines or tools to help reflect future goals and
future resources at the time budgets are being planned; and
WHEREAS, the commitment of funds and resources can only be made through the
budget process;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. The City Council hereby adopts the 2011 -2016 Financial Planning Model
and accompanying Capital Improvement Program, incorporated by this reference as if
fully set forth herein.
Section 2. A copy of the 2011 -2016 Financial Planning Model and accompanying
Capital Improvement Program shall be kept on file in the City Clerks Office.
Section 3. The assumptions, revenues and expenditures will be reviewed and
updated annually, or as necessary, by the City Council.
Section 4. The detail of Capital Improvement Program projects will be reflected in the
published Financial Planning Model and Capital Improvement Program 2011 -2016.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of 2010
ATTEST/ AUTHENTICATED:
Dennis Robertson, Council President
Christy O'Flaherty, CMC, City Clerk
APPROVED AS TO FORM BY
Filed with the City Clerk:
Passed by the City Council.
Office of the City Attorney Resolution Number
Attachment: Financial Planning Model and Capital Improvement Program 2011 -2016
W \Word Processing Resolutions \Financial Planning Model CIP 2011- 2016.doc
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31
32
1 J s
y City of Tukwila
Jim Haggerton, Mayor
2
908'' INFORMATIONAL MEMORANDUM
TO Mayor Haggerton
Finance and Safety Committee
FROM: Peggy McCarthy, Deputy Finance Director
DATE: October 27, 2010
SUBJECT: Third Quarter 2010 Cash Investment Report and Investment Policy Update
ISSUE
Finance Policy and Procedure 03 -17, Investment Policy, calls for quarterly investment reports to the
Council Finance and Safety Committee. The report is to contain an inventory of investments and a
summary of performance. The September 30, 2010 Investment Report is included with this memorandum
and is discussed below.
Additionally, the Committee is being asked to review and approve the updated draft Investment Policy
which was presented at the June 22, 2010 Finance Safety Committee Meeting.
BACKGROUND
Cash Investment Report
The Cash Investment Report provides information on a) portfolio components description and
characteristics of securities and deposits held, b) portfolio performance weighted average yield of the
portfolio in comparison to benchmarks, c) compliance with investment policy in terms of investment
maturities and diversification of financial institutions and investment types, d) cash and investment
balances, and changes therein, by fund and fund group and e) investment environment and strategies.
Investment Policy
An updated version of the investment policy was presented and discussed at the June 22, 2010 Finance
Safety Committee meeting. The updated policy draft was sent to the Washington Municipal Treasurers
Association on July 7, 2010 for review and certification. However, the review and certification have not
been completed and the City has not been notified as to when this will happen. Although the original
intent was to obtain Committee approval after receiving certification, the uncertainty as to when this will
be accomplished has prompted the current request for review and approval.
DISCUSSION
Cash Investment Report
Portfolio Components Characteristics. The portfolio components remain the same as those at June 30,
2010 with no purchases or redemptions occurring during the third quarter. The Local Government
Investment Pool (LGIP) balance increased by $7.2 million due primarily to the $5.9 million bond issue
proceeds received July 31, 2010. The weighted average yield to maturity declined slightly to .72% at
September 30, 2010 from .78% at June 30, 2010 due to the increase in the LGIP balance, which has a
relatively low yield at .30 The portfolio complies with the investment policy standards with respect to
investment mix, investment maturities and diversification of financial institutions.
Fund and Fund Group Cash Investment Balances. The most significant changes in fund and fund group
balances from June 30, 2010 to September 30, 2010 occurred in the general fund with a $3.6 million
decline and in the Special Revenue and Capital Project funds with an increase of $5.9 million and $1.9
33
INFORMATIONAL MEMO
Page 2
million respectively. The increases are due primarily to receipt of $4.3 million bond proceeds into the
104 Arterial Street fund, and $1.6 million bond proceeds into the 303 General Government Improvements
fund. The decline in the general fund follows an annual cyclical pattern whereby the cash and investment
balances decrease just before the April and October real estate tax payments are due, then increase after
the payments are received. The general fund balance will benefit from the receipt of approximately $6
million of real estate tax payments due to King County October 31 and received mostly in November.
Additionally, beginning in 2011, sales tax will be allocated exclusively to the general fund with transfers
out of the general fund to other funds on an as needed basis. This will help alleviate any overfunding
situations in the other government funds.
Investment Environment and Strategies. Rates remain extremely low, especially in the short term. There
is speculation that additional quantitative easing will be undertaken by the Federal government that could
result in a further reduction in longer term rates.
At September 30, 2010, the portfolio had almost $32 million in cash and equivalents and $10 million of
investments maturing in the forthcoming 3 to 6 months. In an attempt to maximize return while
maintaining liquidity, the City plans to follow a laddered portfolio approach. Under the laddering
strategy, maturities are staggered over the allowable investment term. As each security issue matures, it
is reinvested at the long end of the portfolio.
One of the strategies contemplated for future investments, and contingent on the approval of the
investment policy update, is the purchase of taxable municipal bonds with mid range terms of 5 7 years.
These purchases could lock in rates for a longer period at more favorable interest rates. The municipal
bond yields are considerably better than the Treasury rates as demonstrated by a recent bond issuance by
the City of Tacoma. As of October 26, 2010 (bonds were issued on October 27, 2010), the anticipated
yield on the City of Tacoma 5 year bonds was 2.44% compared with the 5 year Treasury note yield which
was 1.23
Investment Policy
The June 22, 2010 investment policy draft has been updated with only one significant change. The
change is to section 11.1 which currently reads, "At the time of investment, a minimum of fifty percent
(50 of the portfolio will be comprised of investments maturing or available within one year." The
proposed change would reduce this percentage to 30% from 50 Enacting this change would free up
funds for investment in longer term, higher yielding securities without compromising cash flow needs.
Based on an analysis of monthly changes in cash and investment balances from January 2008 through
September 2010, the largest monthly decline over this period was $6.9 million and occurred in December
2008. Using this $6.9 million amount as a threshold for the minimum liquidity requirements, it can be
demonstrated that in each of the past ten years, 30% of the year -end portfolio balances exceeded this
threshold with the lowest calculated total of $8.4 million in 1999 and the highest calculated total of $14.4
in 2008. This policy change would allow the City to sufficiently fund operations but would also provide
an opportunity for increased investment earnings.
RECOMMENDATION
Cash and Investment Report Presented for Council information only.
Investment Policy Council is being asked to approve the November 2, 2010 updated Investment Policy.
ATTACHMENTS
Cash and Investment Report as of September 30, 2010
Cash and Investment Balances by Fund and Fund Group at September 30, 2010
Yield curve and Treasury Rates at 9 -30 -10
3 4 H•1lnvst1201019 -30 -10 Investment ReportlInfoMemo Invstmnt Rprt 9- 30 -10, 10 -27 -10 a.docx
INFORMATIONAL MEMO
Page 3
Cash and Investment Balances January 2008 through September 2010 -Graph
Cash and Investment Balances January 2008 through September 2010
Investment Policy draft
Laddered Investment Portfolio description
1-1:1lnvst1201019 -30 -10 Investment ReportlInfoMemo Invstmnt Rprt 9- 30 -10, 10 -27 -10 a.docx 35
36
CITY OF TUKWILA
CASH INVESTMENT REPORT
September 30, 2010
(a)
Purchase Maturity Term Par Book Yield to Annualized
Agency Issuer Investment Tyne Date Date (month; Value Balance Maturity Return
CASH CASH EQUIVALENTS
US Bank Depository Various (b) 03 1,030,486 1,030,486 0 00%
Washington State Local Investment Pool Various (b) 03 30,447,734 30,447,734 0 30% 91,343
Government Investment Pool
Sound Community Bank Money market Various (b) 03 500,000 503,260 0.20% 1,000
Total Cash Cash Equivalents 1 .03 I 31,978,220 31,981,480 0.29% 92,343
INVESTMENTS
Certificates of Deposit in order of maturity
Sound Community Bank Certificate of Deposit 03/04/2010 03/04/2011 12 5,000,000 5,028,479 0 99% 49,500
Sound Community Bank Certificate of Deposit 05/20/2009 04/20/2011 23 1,500,000 1,544,935 2.22% 33,330
First Savings Bank Northwest Certificate of Deposit 05/01/2009 05/01/2011 24 2,000,000 2,068,939 2.50% 50,000
Charter Bank Certificate of Deposit 05/26/2009 05/26/2011 24 1,500,000 1,540,216 1 98% 29,700
Sterling Bank Certificate of Deposit 02/16/2010 08/16/2011 18 250,000 251,858 1.20% 3,000
US Bank Certificate of Deposit, 02/15/2010 02/15/2013 36 3,450,000 3,480,897 1 44% 49,680
compensating balance
I 22 I 13,700,000 13,915,324 1 57% 215,210
Agencies
Federal Home Loan Bank US agency 03/23/2010 12/23/2013 (d) 36 1,000,000 1,000,000 2.08% 20,800
Federal Home Loan Bank US agency 06/10/2010 6/10/2013 (e) 36 2,000,000 2,000,000 1 00% 20,000
36 I 3,000,000 3,000,000 1 36% 40,800
Total investments 16,700,000 16,915,324 256,010
TOTAL CASH, CASH EQUIVALENTS INVESTMENTS 1 9 1 $48,678,220 $48,896,804 1 0.72% I $348,353
T
Weighted Average Maturity Months Average Yield to Maturity
Financial Institution Diversification Amount of Total Benchmarks At 9/30/10
US Bank 4,511,383 9.2% 90 -day treasury rate 0 16%
Washington State Treasury 30,447,734 62.3% 6 -month treasury rate 0 19%
First Savings Bank Northwest 2,068,939 4.2% State Pool rate 0 30%
Sound Community Bank 7,076,674 14.5%
Charter Bank 1,540,216 3 1%
Sterling Bank 251,858 0.5% Investment Mix of Total
Federal Home Loan Bank 3,000,000 6.1% Depository 2.1%
$48,896,804 100 0% State Investment Pool 62.3%
Money market 1 0%
Certificate of Deposit 28.5%
US Agency 6 1%
100 0%
(a) To maturity even though call date may occur first; maturity of liquid investments is one day
(b) No fixed maturity, funds are available within one day
(c) Annualized return based on purchase price and yield to maturity
(d) Call date is 12/23/10.
(e) Call date is 12/10/10; interest rate steps to 2% in year 2 and 3.25% in year 3
37
CITY OF TUKWILA
CASH INVESTMENT REPORT
September 30, 2010
Cash Investment Balances By Fund and Fund Group
Fund Group FD Fund Name! Cash 8, investments' Grand Total'
E uivalents
General 000 GENERAL 630,618 1,099,312 1,729,930
General 'Total 630,6 1,096,312 1,729,930
Special Revenue 101 HOTEL /MOTEL TAX 713,138 101,309 814,447
103 STREET 340,413 192,487 532,900
104 ARTERIAL STREET 6,567,948 4,303,220 10,871,168
105 CONTINGENCY 806,435 80,943 887,378
107 FIRE EQUIP CUM. RESERVE 803,391 803,391
109 DRUG SEIZURE FUND 296,447 10,118 306,564
Special: Revenue,Total r 9;527;771'; 4,688,077,° ::14,215,848
Debt Service 207 LIMITED TAX G 0 BONDS 1999 14,509 14,509
208 LIMITED TAX G.O BONDS 2000 177,250 177,250
209 LIMITED TAX G.O BONDS 2003 94,852 94,852
210 LIMITED TAX G.O REFUNDING 2003 157,041 157,041
211 LIMITED TAX G 0 REFUNDING 2008 347,433 347,433
214 LTGO 2010 Series A 33,670 33,670
215 LTGO 2010 Series B 10,488 10,488
Debt Service'Total f 835,243 835,243
Capital Project 301 LAND ACQ. REC. PARK DEVLPMNT 2,553,756 2,013,634 4,567,390
302 FACILITY REPLACEMENT 2,072,904 2,072,904
303 GENERAL GOVERNMNT IMPROVEMENTS 1,949,336 1,949,336
304 FIRE IMPACT FEES 155,929 155,929
Capital Project Total 6,731,925 ..2,013,634 8,745,559
Enterprise 400 UTILITY ON ACCT (overpayments) 8,824 8,824
401 WATER 1,326,408 3,956,817 5,283,225
402 SEWER 1,440,333 202,727 1,643,060
404 WATER /SEWER REVENUE BONDS 240,504 240,504
405 BOND RESERVE 393,547 393,547
411 FOSTER GOLF COURSE 420,515 416 420,931
412 SURFACE WATER 1,659,464 1,101,363 2,760,828
Enterprise Total.
5,489,595 5;261,124 10
Internal Service 501 EQUIPMENT RENTAL 2,561,621 1,000,000 3,561,621
502 INSURANCE 3,278,309 2,506,817 5,785,126
503 INSURANCE LEOFF I 1,374,399 202,727 1,577,126
Internal Service Total :7;244,329 3,709,544`' 10,923;873
Fiduciary 611 FIREMEN'S PENSION 1,486,915 1,486,915
640 AGENCY FUND 65,084 65,084
Fiduciary rY Total 1,551
1 551 999
Grand Total 31,981,480 16,771,890 48,75
38
CITY OF TUKWILA
CASH INVESTMENT REPORT
September 30, 2010
Closing Daily Current-- Price--
Yield Price Yield Change
Term e
09/30/2010 Today 7:30 A.M.
3mo 0.15% 0.15%
hio 019% s 0.19°A:
1Yr 0.25% 0.25%
2Yr 042% 0.5.... 0.42% 0
3Yr 0.63% 1.5 0.66% -0.5
1 1 -3
10Yr 2.51% -2 2.53% -5.5
69°i0 3 71 -12 5
5
3.5
2.5
2
1.5-
—1 9/24/2010
1- Today
0
t\CI naC''
39
-il•
D
CITY OF TUKWILA
CASH INVESTMENT REPORT
September 30, 2010
Combined Cash Investment BALANCES BY MONTH, January 2008 to September 2010
Graph
i
15,000,000
IA
14,000,000
13,000,000
1
12,000,000
1
11,000,000
10,000,000 x.,/, /I\
;6\
lifeNi
I 1 1-" -.i.:—. Z
9,000,000
8,000,000
X.. General
7,000,000 ...7
Z \i .1: :i .l. A. —ES—Special Revenue I
6,000,000
Debt Service
5,000,000
—44—Capital Project
P. --t(-- Enterprise
—i> Internal Service
4,000,000
3,000,000 Fiduciary
,.3 """t ir, S'ii• r AI7'..-- 1 „....i,.......0,,,,,s?.., i
\.1* I
*fie.....4...
1 1 1 1
(1,000,000) 1
1 I i 1 1 1 1 i
1 I i
Jan i Feb Mar Apr May! Jun i Jul AugiSep I Oct Nov( Dec Jan Feb Mar Apr May Jun Jul i Aug Sep i Oct i Nov Dec Jan 1Feb Mar Apr i May Jun Jul Aug i Sep
1 1 1
1
2008
1 2009 2010 i
1
CITY OF TUKWLA
CABH&/NVEGTNENTREP{}RT
September 30, 2010
Combined Cash Investment BALANCES BY MONTH, January 2008 to September 2010
Row Lab General Special Debt Capital Enterprise Internal Fiduciary Grand Total
Revenue Prgject SeIyk��
3D�8
Jan 6.922.805 10.188.581 1.150.686 7,269,659 9,487,679 5.617.322 1.125.080 41.701.580
Feb 0.414.509 10.382.580 1.368.828 7,318,342 10.147.588 5.804.831 1,127,264 42.663.849
Mar 6.507.048 11.014.740 1.500.012 8,443,165 11.927.738 6,732,444 1.424.208 47.640.253
Apr 5,875,611 11.090.835 1,591,341 8.339.912 12,014,846 8.840.004 1.426.223 47,185,462
May 9.272.930 11.241.906 1,747,525 7.530.416 11 6,924,497 1.480.777 50,174,016
Jun 10.404.165 11,401.736 1.486.847 7.530.921 11.200.408 6.988.205 1.482.509 50.484.881
Jul 9.480.490 11,560,451 1.648.083 7.545.952 11.774.087 7,143,712 1,478,141 50
Aug 8.378.032 11.035.654 1.806.228 7.671,487 12,312,582 7,278,931 1.479.547 50.062.461
Sep 6.870738 12,535,735 1,956121 7.746871 13 7 1,482.295 51,155,369
Oct 8.002.205 12,644,518 1,899,666 7,682,473 13.334.040 7,392,131 1,485,192 51.340.225
Nov 8.924 13.146.458 2,041,724 7.853.980 13.512.076 7.772.668 1,487,911 54.740.673
Dec 7,724,379 12.164.282 972,729 5,916,065 12,356,266 7,343,615 1.448.882 47,921,218
26 091'
Jan 5.711.O27 12.45G.U85 1 5 12.18O.48O 7.S47.647 1.471.838 47,398,372
Feb 6.868.318 12.457.803 1,259,259 5.855.804 12,391,462 7.302.881 1,542,257 47.467.565
Mar 5.477.292 12.878.702 1.382.129 5.840.311 12.548.468 7.558.943 1,493,718 47.270.623
Apr 7,435,424 12.984.302 1,492,296 5,712,739 12.728.647 7.318.106 1.524.421 48.196.026
May 8,394,698 12,976,548 1,612,370 6,275,578 12.668730 7.652,783 1 51
Jun 6.557.825 12,854,734 1.398.710 6,279,693 11,698,873 8,158,299 1,582,474 48.530.600
Jul 4,835,284 9,572,478 1,512,243 6.344.700 11,828,353 8,354,681 1.508.841 43.956.586
Aug 2.588.088 10.100.023 1.039 8 12.895.735 0.404.030 1,585,773 43.525.379
Sep 3,461,270 9.002 1.793.223 7,124,946 12.044.132 8.780.825 1.003.269 43.810.041
Oct 5.070.945 8.078.085 1.810.074 6,831,233 12,411,383 9,014,445 1.598.818 45.514.883
Nov 6 9,448,383 1.835.788 6,744,625 11.366.894 8.187.288 1.612.056 48.703.003
Dec 4,192,192 8,004,846 (243,112) 6,745,994 10,289,539 9,207,965 1,540,673 30. 738. 006
2010'
Jan 3.935.280 8.740.179 (40.284) 6.837.548 10.102.215 8.732.083 1,548,349 40.855.330
Feb 3.826.028 8,448,543 135,494 6,712,858 10.301.874 9,894,238 1,554,931 40.874.568
Mar 2,413,254 8,857,321 163.440 6.686.776 10.864.367 9,945,333 1 40.470.883
Apr 4,567,026 8.435.940 348.278 6.576.181 10.640.752 10 1.547.087 42.471.319
May 6.446.080 8.842.642 462.971 6.700.075 10.215.457 10.508.870 1,591,213 44.828.295
Jun 5,314,882 8,315,881 245,314 6 9.315.863 10,557,443 1.814.007 42.181.946
Jul 3.083.891 12 419.458 8,391,772 9,826,774 10.712.955 1.610.737 47.345.048
Aug 2.700.874 13.755.309 805.216 8.423.064 10.001.293 10.975.388 1,552,441 48.013.565
Sep 1 14.215.848 835,243 8.745.559 10.750.819 10.923.873 1.651.999 48.753.370
4 1
42
s $a
;.tut
w ►1
1908
City of Tukwila, Washington
INVESTMENT POLICY
Adopted by the
Tukwila City Council
Finance and Safety Committee
Ordinance No. 1916, May 15, 2000,
As updated November 2, 2010
Shawn Hunstock, Finance Director
43
44
City of Tukwila
Investment Policy
1.0 Policy
It is the policy of the City of Tukwila to invest public funds in a manner that will provide
maximum security with the highest investment return while meeting the daily cash flow
demands of the City, while conforming to all state and local statutes governing the
investment of public funds.
2.0 Scope
This policy applies to the investment of all public funds in the custody of the Tukwila
Finance Director. Funds covered by this policy include all city funds created by the
Tukwila City Council, and are accounted for in the City's Comprehensive Annual Financial
Report (CAFR).
2.1 Fund Types:
General /Current Expense Funds
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Enterprise Funds
Internal Service Funds
Trust Funds
Agency Funds
2.2 Funds relating to debt service will be invested in accordance with appropriate bond
documents.
3.0 Prudence
Investments shall be made with judgment and care, under circumstances then prevailing,
which persons of prudence, discretion and intelligence exercise in the management of their
own affairs, not for speculation, but for investment, considering the probable safety of their
capital as well as the probable income to be derived.
The standard of prudence to be used by investment officials shall be the "prudent person"
standard and shall be applied in the context of managing an overall portfolio. Investment
officers acting in accordance with written procedures and the investment policy and
exercising due diligence shall be relieved of personal responsibility for an individual
security's credit or market price changes, provided deviations from expectations are
reported in a timely fashion and appropriate action is taken to control adverse
developments.
-1-
45
City of Tukwila
Investment Policy
4.0 Objectives
The primary objectives, in priority order, of the City's investment activities shall be:
Safety: Safety of the principal is the foremost objective of the investment program.
Investments of the City shall be undertaken in a manner that seeks to ensure the
preservation of capital in the overall portfolio. To attain this objective, diversification
is required in order that potential losses on individual securities do not exceed the
income generated from the remainder of the portfolio.
Liquidity: The City's investment portfolio will remain sufficiently liquid to enable the
City to meet all operating requirements that might be reasonably anticipated.
Yield: The City's investment portfolio shall be designed with the objective of attaining
a market rate of return throughout budgetary and economic cycles, taking into account
the City's investment risk constraints and the cash flow characteristics of the portfolio.
See 13.0.
5.0 Delegation of Authority
Authority to manage the City's investment program is derived from Ordinance 1916,
adopted by the Tukwila City Council on May 15, 2000. Management responsibility of the
investment program is vested in the City of Tukwila Financial Director under the express
authority granted in RCW 39.29.020.
5.1 The City Finance Director may appoint an Investment Officer whose responsibilities
will include initiating daily transactions in the investment portfolio based on
liquidity and cash flow requirements of the City.
5.2 Investments relating to bond proceeds shall be made consistent with 4.0,
"Objectives."
5.3 Written procedures shall be established for the operation of the investment program
consistent with this investment policy.
6.0 Ethics and Conflict of Interest
6.1 Officers and employees involved in the investment process recognize that the
investment portfolio is subject to public review and evaluation. The overall program
will be designed and managed with a degree of professionalism that is worthy of the
public trust.
6.2 Officers and employees involved in the investment process shall refrain from
personal business activity that could conflict with the proper execution of the
investment program, or which could impair their ability to make impartial
investment decisions. Employees and investment officials shall disclose any
material financial interests in financial institutions that conduct business within this
jurisdiction, and they shall further disclose any personal financial /investment
positions that could be related to the performance of the City's portfolio. Employees
46 -2
City of Tukwila
Investment Policy
and officers shall subordinate their personal investment transactions to those of the
City, particularly with regards to the timing of purchases and sales.
7.0 Authorized Financial Dealers and Institutions
7.1 Pursuant to state statutes (RCW 39.58), the deposit of public funds and the
placement of "investment deposits" (i.e. time deposits, money market deposit
accounts and savings deposits of public funds), will be placed only with institutions
approved by the Washington Public Deposit Protection Commission (PDPC) as
eligible for deposit of public funds. The maximum amount placed with any one
depository will not exceed the net worth of the institution as determined by the
PDPC.
7.2 In addition, the Finance Director will maintain a list of approved broker/ dealers that
are authorized to provide investment services to the City.
7.2.1 Authorized broker /dealers must maintain an office in the State of Washington.
7.2.2 Authorized broker /dealers will be limited to primary dealers or other dealers
that qualify under SEC Rule 15C3 -1, the Uniform Net Capital Rule.
7.2.3 All approved firms and the individuals that represent them are required to read
this policy and certify that they understand and will comply with the City's
investment objectives and constraints.
7.2.4 Broker /dealers that have been selected to provide investment services to the
City are required to submit an audited financial statement annually to the
Finance Director, if requested.
8.0 Authorized Investments
State statutes and this investment policy limit the types of securities authorized for
investment by the City. The principal governing statutes are RCW 39.59 and RCW 39.60.
The Finance Director may further restrict eligible investments by this policy at his /her
discretion. Authorized investments include (but are not limited to):
8.1 U.S. Treasury Securities.
8.2 U.S. Agency Securities (i.e. obligations of any government- sponsored corporation
eligible for collateral purposes at the Federal Reserve).
8.3 Certificates of Deposit, Money Market Deposit Accounts and savings deposits with
qualified depositories within statutory limits as promulgated by the PDPC at the time
of investment.
8.4 Bankers Acceptances (BA's) purchased on the secondary market with a rating of A-
1, P -1, its equivalent or better.
-3-
47
City of Tukwila
Investment Policy
8.5 General Obligation Bonds of a state or local government which have at the time of
the investment one of the three highest credit ratings of a nationally- recognized
rating agency.
8.6 The Washington State Local Government Investment Pool (LGIP).
9.0 Safekeeping and Custody
9.1 Securities purchased by the Finance Director are to be held in a custodial account in
the safekeeping or trust department of a bank acting as third party custodian for the
City of Tukwila.
9.2 All security transactions conducted by the custodian on behalf of the City of Tukwila
are to be on a delivery- versus payment (DVP) basis.
9.3 Certificates of Deposit, transaction receipts for Money Market Deposit Accounts or
savings deposit accounts will be held by the Finance Director.
10.0 Diversification
The City of Tukwila will diversify its investments by security type and institution.
10.1 No more than fifty percent (50 of the City's portfolio, at the time of purchase,
shall be in any single financial institution.
10.2 Except, that no more than seventy -five (75 of the City's portfolio, at the time of
purchase, shall be invested in the Washington Local Government Investment Pool,
and
10.3 No more than seventy -five percent (75 of the City's portfolio, at the time of
purchase, shall be invested in U.S. Treasury or Agency securities.
10.4 The City's Finance Safety Committee can authorize a variance to 10.1, 10.2 or
10.3 prior to purchase, if it is deemed in the best overall benefit to the City.
11.0 Maturities
To the extent possible, and to preclude the sale of securities that could result in a loss,
investments will be made to coincide with anticipated cash flow requirements.
11.1 At the time of investment, a minimum of fifty percent (30 of the portfolio will be
comprised of investments maturing or available within one year.
11.2 At the time of investment, eighty percent (80 of the portfolio will be comprised of
investments maturing or available withing five (5) years and no instruments shall
have a maturity exceeding ten (10) years, except when compatible with a specific
fund's investment needs.
11.3 To provide for ongoing market opportunity, investment maturities should be
laddered or staggered to avoid the risk resulting from overconcentration of portfolio
assets in a specific maturity.
48 -4
City of Tukwila
Investment Policy
11.4 The average maturity of the portfolio shall not exceed three and one half (3 1 /2) years
or forty two (42) months.
11.5 Any variance to 11.1, 11.2, 11.3 or 11.4 can be approved by the Finance Safety
Committee prior to occurrence, and if deemed in the City's best interest.
12.0 Internal Controls
The Finance Director shall establish a system of internal controls, which are subject to
review by the State Auditor. Such reviews may result in recommendations to change
operation procedures to improve internal controls. Controls shall be designed to protect
against loss of public funds due to fraud, error, misrepresentation or imprudent actions.
13.0 Performance Standards Benchmarks
The investment portfolio will be designed to obtain an average rate of return during
budgetary and economic cycles which meets or exceeds the average six -month Treasury bill
rates for the corresponding time period. This perforniance standard shall take into account
the City's investment risk constraints and cash flow needs.
14.0 Reporting
The Finance Director will submit a quarterly report to the City's Finance Safety
Committee that summarizes the current portfolio position and performance. These
reports shall provide an accurate and meaningful representation of the investment
portfolio, its performance versus the established benchmark, and proof of compliance
with the investment policy.
15.0 Investment Policy Adoption
Adoption of this policy is made pursuant to the provisions of RCW 36.48.070.
Adopted by the Finance and Safety Committee of the City
Council of the City of Tukwila by ordinance 1916, May 15,
2000, as updated November 2, 2010.
-5-
49
Laddered Investment Portfolio
A normal ascending yield curve for fixed income securities
occurs when longer fixed income maturities have higher
yields than shorter maturities. In most instances it benefits
investors to start a ladder of approved securities extending
out monthly or quarterly. The reason for laddering and not
keeping investments all liquid is because of interest rate
risk. If the investor keeps their investments too short, rates
could fall, or if too long, rates could rise. When laddering
funds, the investor gets a total average rate that will be
above short rates given a normal ascending yield curve.
Another benefit of a laddered portfolio is it takes the
guesswork out of timing the market. As securities mature
the investor simply reinvests to the longest maturity. Over
time the investor receives the average yield of the longest
security which typically would have a higher yield than a
money market or very short -term investment. The investor
also has a steady income stream from interest and principal
payments from regularly timed maturities. The maximum
maturity and frequency of maturities can be adjusted to suit
the individual investor.
Please Note Investment products:
are not insured by the FDIC;
are not deposits or other obligations or guarantees of Piper Jaffray Companies or its affiliates; and
o are subject to investment risks, including the possible loss of principal.
50
(r-
L4
Ci ty of Tukwila
1. J im Haggerton, Mayor
240 INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Finance and Safety Committee
FROM: Shawn Hunstock, Finance Director
DATE. October 25, 2010
SUBJECT: Sales Tax Revenue for August 2010
Schedule I in 1,000's
Sales Receipt 2009 2010 2010 Increase /(Decrease) %Increase /(Decrease)
Month Month Actual Estimated Actual Month YTD Month YTD
Jan Mar 1,172 1,483 1,036 (447) (447) 30.14% 0.00%
Feb Apr 1,051 1,462 1,006 (456) (903) 31.19% 30.66%
Mar May 1,146 1,705 1,157 (548) (1,451) 32.14% -31 20%
Apr June 1,191 1,578 1,070 (508) (1,959) 32.19% 31.45%
May July 1,082 1,603 1,067 (536) (2,495) 33.44% 31.86%
June Aug 1,217 1,812 1,247 (565) (3,060) 31.18% 31.73%
July Sept 1,473 1,793 1,251 (542) (3,602) 30.23% 31.50%
Aug Oct 1,118 1,656 1,216 (440) (4,042) 26.57% 30.87%
Sept Nov 1,110 1,682 (1,682) (5,724) 100.00% 38.74%
Oct Dec 1,032 1,556 (1, 556) (7,280) 100.00% 44.58%
Nov Jan11 1,140 1,631 (1,631) (8,911) 100.00% 49.61%
Dec Feb11 1,690 2,270 (2,270) (11,181) 100.00% 55.27%
Totals 14,422 20,231 9,050
Mitigation Received 934
9,984 76 26% of Budget Incl. Mitigation
Sales tax collections for August showed the third increase this year, as compared to the same
month in the prior year, through eight months of collections. For August, collections were less
than budget for the month, but more than actual collections in the same month in the previous
year. Actual receipts for August were $440,000 less than budget, but $98,000 more than the
same period last year. This is the largest monthly increase that we have had all year. We are
down 26.57% for the month compared to budget, and up by 8.06% compared to the same
month last year. We are now down in total 30.87% for the year compared to budget, and down
by 4.23% compared to the same period last year.
Including mitigation payments, we are currently at'76.26% of budget for the year to date. The
latest mitigation payment we received was on September 30, 2010 and was for $310,763 48.
This was the same amount as the last mitigation payment received on March 31 because the
payments are now annualized and will only be adjusted once per year in the fall, effective with
the December 31s payment. The next mitigation payment will be received on December 31s
51
INFORMATIONAL MEMO
Page 2
Staff completed work on the last mitigation detail file and submitted to the Department of
Revenue a list of firms that should be removed from the mitigation calculation process. These
firms are ones that were offsetting other losses, thereby reducing our mitigation payment.
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 most of the classifications.
Schedule II
YTD YTD Dollar
Group Name Current Prior Diff. Diff.
452* General Merchandise Stores 1,259,921 $1,254,724 5,198 0.41%
448* Clothing and Accessories 1,227,421 1,253,823 (26,402) -2.11%
722* Food Services, Drinking Places 884,514 864,005 20,509 2.37%
423* Wholesale Trade, Durable Goods 827,963 988,595 (160,631) 16.25%
443* Electronics and Appliances 581,726 590,102 (8,376) -1 42%
441* Motor Vehicle and Parts Dealer 400,001 493,593 (93,592) 18.96%
451* Sporting Goods, Hobby, Books 391,607 353,100 38,507 10.91%
236 Construction of Buildings 349,609 343,608 6,001 1.75%
444* Building Material and Garden 344,724 343,448 1,276 0.37%
453* Miscellaneous Store Retailers 296,149 324,505 (28,356) 8.74%
Mitigated NAICS Code
As you can see there are large variances from last year for the same time period. For instance,
sales tax for Motor Vehicle and Parts Dealer is down by 18.96 and Wholesale Trade and
Durable Goods is down by 16.25 As illustrated above, five of the top ten merchant categories
have declined versus prior year, and all but one 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 year -to -date.
Schedule III
YTD YTD Dollar
Group Name Current Prior Diff. Diff.
237 Heavy and Civil Construction 14,779 47,311 (32,533) 68.76%
454* Nonstore Retailers 64,730 164,250 (99,521) 60.59%
238 Specialty Trade Contractors 171,913 244,689 (72,776) -29 74%
621 Ambulatory Health Care Service 28,046 37,938 (9,891) 26.07%
323* Printing and Related Support 31,337 40,714 (9,377) 23.03%
441* Motor Vehicle and Parts Dealer 400,001 493,593 (93,592) 18.96%
423* Wholesale Trade, Durable Goods 827,963 988,595 (160,631) -16 25%
561 Administrative and Support Svc 66,534 78,683 (12,150) 15.44%
812 Personal and Laundry Services 53,286 62,204 (8,918) 14.34%
721* Accommodation 286,476 320,146 (33,671) 10.52%
Mitigated NAICS Code
Attached is a Sales Tax Summary comparing year -to -date 2010 vs. 2009 by major NAICS
codes. Also included is a comparison of total receipts year -to -date for the last five years.
Please let me know if you have any comments or questions. Thank you.
W \FIN Projects\Sales Tax Information\Sales Tax Files from Shawn120101Info Memo Sales Tax 102510.docx
52
SALES TAX SUMMARY
August 2010 (Received in October)
YTD YTD
NAICS CONSTRUCTION 09 TOTAL 09 YTD 10 YTD Diff NAICS AUTOMOTIVE 09 TOTAL 09 YTD 10 YTD Diff
236 Construction of Buildings 416,992 343,608 349,609 1.7% 1 441' Motor Vehicle &Parts Dealer 686,478 493,593 400,001 -19.0% I
237 Heavy& Civil Construction 98,105 47,311 14,779 -68.8% I 447' Gasoline Stations 62,584 41,647 44,675 7.3% I
238 Specialty Trade Contractors 347,910 244,689 171,913 -29.7% TOTAL AUTOMOTIVE 749,063 535,240 444,676
TOTAL CONSTRUCTION 863,006 635,608 536,301 Overall Automotive Change from Previous Year ($90,564) -16.9%
Overall Construction Change from Previous Year ($99,308) -15.6%
NAICS RETAIL TRADE 09 TOTAL 09 YTD 10 YTD 0iff
YTD 442' Furniture Home Fumishings 350,625 222,203 244,443 10.0%
MANUFACTURING 09 TOTAL 09 YTD 10 YTD %Diff 443' Electronics Appliances 954,375 590,102 581,726 -1.4%
311 Food Manufacturing 1,173 846 2,165 155.8% 444' Building Material Garden 506,177 343,448 344,724 0.4%
312 Beverage Tobacco Products 3,070 1,988 -2,375 219.5% 445' Food Beverage Stores 86,349 56,790 57,282 0.9%
313 Textile Mills 259 158 52 -66.8% 446* Health Personal Care 189,603 119,483 111,415 -6.8%
314 Textile Product Mills 12,852 8,536 9,666 13.2% 448' Clothing Accessories 2,015,184 1,253,823 1,227,421 -2.1%
315 Apparel Manufacturing 59 37 15 -59.6% 451' Sporting Goods, Hobby, Books 589,522 353,100 391,607 10.9%
316 Leather Allied Products 7 4 1 -6451/4 452' General Merchandise Stores 2,044,042 1,254,724 1,259,921 0.4%
321' Wood Product Manufacturing 2,701 2,148 1,112 -48.3% 1 453' Miscellaneous Store Retailers 506,005 324,505 296,149 -8.7%
322* Paper Manufacturing 20,392 12.871 14,094 9.5% 1 454' Nonstore Retailers 209,564 164,250 64,730 -60.6%
323' Printing Related Support 59,298 40,714 31,337 -23.0% I TOTAL RETAIL TRADE 7,451,446 4,682,428 4,579,417
324 Petroleum Coal Products 8,157 3,347 2,641 -21.1% Overall General Retail Change from Previous Year ($103,011) -2.2%
325 Chemical Manufacturing 6,368 4,295 4,869 13.4%
326 Plastic Rubber Products 3.928 3.108 2,097 -32.5% YTD
327' Nonmetallic Mineral Products 2,279 1,251 761 -39.2% 1 SERVICES 09 TOTAL 09 YTD 10 YTD Diff
331 Primary Metal Manufacturing 534 126 219 743% 51X Information 528,044 349,905 348,630 -0.4%
332 Fabricated Metal Mfg Products 3,789 2,255 4,463 97.9% 52X Finance Insurance 53,850 28,482 29,935 5.1%
333 Machinery Manufacturing 5,586 5,000 7,492 49.8% 53X Real Estate, Rental, Leasing 412,907 248,641 261,497 5.2%
334' Computer Electronic Products 19.797 12,625 3,015 -76.1% 1 541 Professional, Scientific, Tech 227,255 111,760 102,954 -7.9%
335 Electric Equipment, Appliances 137 90 125 38.8% 551 Company Management 985 737 218 -70.5%
336 Transportation Equipment Mfq 135.430 93,095 88,856 -4.6% 56X Admin, Supp, Remed Svcs 123,115 83,307 69,426 -16.7%
337" Fumiture Related Products 8,575 6,532 6,752 3.4% 1 611 Educational Services 47,324 27,176 40,979 50.8%
339" Miscellaneous Manufactudnq 10,665 7,787 7,060 -9.3% 1 62X Health Care Social Assistance 91,637 51,498 43,854 -14.8%
TOTAL MANUFACTURING 305,059 206,811 184,417 71X Arts Entertainment 93,799 66,210 80,215 21.2%
Overall Manufacturing Change from Previous Year ($22,394) -i0.8% 1 72X' Accommodation Food Svcs 1,745,512 1,184,151 1,170,989 -1.1% 1
81X Other Services 183,887 120,814 120,096 -0.6%
YTD 92X Public Administration 32,268 15,190 18,186 19.7%
TRANSPORTATION WAREHOUSING 09 TOTAL 09 YTD 10 YTD Diff TOTAL SERVICES 3,540,583 2,287,871 2,286,977
481 Air Transportation 0 0 0 0.0% Overall Services Change from Previous Year ($893) 0.0%
482 Rail Transportation 924 843 254 -69.9%
484 Truck Transportation 3,294 1,898 165 -91.3%
485 Transit and Ground Passengers 11,105 7,505 12,368 64.8% YTD
488 Transportation Support 21,879 15,753 19,724 25.2% MISCELLANEOUS 09 TOTAL 09 YTD 10 YTD Diff
491 Postal Services 0 0 0 #DIV /0! 000 Unknown 397 397 1 -9931/4
492 Couriers Messengers 149 33 236 607.5% 111 -115 Agriculture, Forestry, Fishing 221 87 197 126.1%
I 493' Warehousing Storage 1,051 788 696 -11.7% 1 211 -221 Mining Utilities 14,549 11,038 11,142 0.9%
TOTAL TRANSP WHSING 38,401 26,820 33,443 999 Unclassifiable Establishments 12,331 3,256 76,636 2253.5%
Overall Transportation Change from Previous Year $6,623 24.7% MISCELLANEOUS TOTAL 27,499 14,779 87,976
Overall Miscellaneous Change from Previous Year 673,197 495.3%
YTD
WHOLESALE TRADE 09 TOTAL 09 YTD 10 YTD Diff
1 423' Whls Trade Durable Goods 1,339,565 988,595 827,963 -16.2% 1 YTD
1 424" Whls Trade Nondurable Goods 105.260 71.462 66.641 -6.7% 1 09 TOTAL 09 YTD 10 YTD Diff
425' Wholesale Electronic Markets 2,208 1,344 1,662 23.6% 1 GRAND TOTALS 514,422,090 59,450,958 59,049,473
WHOLESALE TRADE TOTAL 1,447,033 1,061,401 896,266 Grand Tota Change from Previous Year (6401,485) -4.25%
Overall Wholesale Change from Previous Year ($165,135) -15.6%
1 Sales Tax Mitigation NAICS Codes I
Cal
W 10/25/2010 Page 1 TUK Soles no Rpt 201000.xlsm
Five Year Comparison
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2010 I ri}
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2009 I I
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1::::::::,.- Se '�e` 5 e ?nM rte ��h;�;- 2007 I 12 19
2006 I may[ �y s& 11,;�i'L, 54:i I
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$2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000
Taxes Collected Year to Date
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