HomeMy WebLinkAboutFS 2014-08-19 COMPLETE AGENDA PACKETCity of Tukwila
Finance and Safety
Committee
O Verna Seal, Chair
O Joe Duffie
O Kathy Hougardy
AGENDA
Distribution:
V. Seal
J. Duffie
K. Hougardy
D. Quinn
D. Robertson
Mayor Haggerton
D. Cline
P. McCarthy
C. O'Flaherty
R. Turpin
L. Humphrey
E. Boykan
C. Flores
TUESDAY, AUGUST 19, 2014 — 5:30 PM
HAZELNUT CONFERENCE ROOM
(formerly known as CR #3) at east entrance of City Hall
Item
Recommended Action
Page
1. PRESENTATION(S)
2. BUSINESS AGENDA
a. After - school programming funding options.
a. Forward to 8/25 C.O.W.
Pg.1
Evelyn Boykan, Human Services Program Manager
and 9/2 Regular Mtg.
b. Fire Department SAFER Grant.
b. Information only.
Pg.9
Chris Flores, Acting Fire Chief
c. Fire Department staffing and overtime.
c. Information only.
Pg.11
Chris Flores, Acting Fire Chief
d. A resolution for unclaimed property.
d. Forward to 9/2 Consent
Pg.15
Peggy McCarthy, Finance Director
Agenda.
e. Financial policies:
e. Forward to 8/25 C.O.W.
Pg.21
(1) A resolution adopting revised financial policies.
and 9/2 Regular Mtg.
(2) A resolution establishing a debt policy.
Peggy McCarthy, Finance Director
f. A resolution adopting a Financing Plan for Urban
f. Information only.
Pg.39
Renewal Tukwila International Boulevard (TIB) Project.
Peggy McCarthy, Finance Director
g. Billing for motor vehicle accident responses.
g. Information only.
Pg.51
Peggy McCarthy, Finance Director
3. ANNOUNCEMENTS
4. MISCELLANEOUS
Next Scheduled Meeting: Wednesday, September 3, 2014
16. The City of Tukwila strives to accommodate individuals with disabilities.
Please contact the City Clerk's Office at 206 - 433 -1800 ( TukwilaCitvClerk (aTukwilaWA.gov) for assistance.
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton, David Cline, Joyce Trantina, Derek Speck
Finance and Safety Committee
FROM; Evie Boykan, Human Services Manager
DATE: August 13, 2014
SUBJECT; Update on Afterschool Programming Plans
ISSUE
A joint committee composed of School District and City staff reviewed three proposals for
afterschool programming at the Tukwila School District. In discussion was provision of services
only at the three elementary schools. The results of this review and subsequent
recommendations are provided for Council review
BACKGROUND
Historically the Community Schools Collaboration (CSC) organization has provided afterschool
programming at all five Tukwila schools. With changing staff both within the CSC organization
and at the School District, and a question of finances needed to operate the program, the
invitation to serve as the provider was broadened to the YMCA, Parks and Recreation, and
CSC.
DISCUSSION
The review committee looked at a variety of factors; model, capacity, financial stability,
leveraging existing resources, and cost in order to make a recommendation. The committee
were especially impressed with a proposal that includes an integrated model including Parks
and Recreation as well as the YMCA. Parks and Recreation brings the experience and great
visibility with the community. The YMCA brings expected and proven success in providing
academic programming, coordination of health services and the ability to leverage additional
funding. Both parties considered an integrated model that would cost approximately $247,050.
The District has committed $80,000, however dollars are restricted by the nature of the funding
source to serve underperforming students.
Parks and Recreation has proposed providing all elementary school programming at the
Tukwila School District. The District will offer space in each of the three schools as an in-kind
resource. Transportation resources need to be arranged at the Building level, as the Buildings
have discretion over dollars that would be used for this source. Transportation dollars are not
included in this budget. They are estimated at $100,000 for all elementary schools.
All parties would like to start programming in the fall. It is estimated that the costs from
September — December will be $87,170. ($43,404 for Parks and Recreation and $56,070 for
YMCA). This also presumes a cost savings of $20,400 from Parks and Recreation from paying
students previously served by the Parks and Recreation. The Tukwila School District is
proposing to cover the costs from Sept- December with the City covering costs from January —
June. Community Schools Collaboration will be providing programming for the middle school
and the high school, however the proposed external funding from Race to the Top funds may
1
2
INFORMATIONAL MEMO
Page 2
not materialize until 2015. The team talked about options of amending CSC's contract, and
reallocating some funds to Recreation services. They are recommending continuing CSC's
contract through December 2014, with those dollars covering Showalter and Foster
programming,
RECOMMENDATION
The Community Affairs and Parks Committee reviewed this item on August 12, 2014, and it was
forwarded to the August 18, 2014 Regular Meeting to seek Council support of continued
involvement in after school programming at Tukwila Elementary schools.
The next phase is to consider and determine funding for the project. The Finance and Safety
Committee is being asked to consider funding options and forward a recommendation to the full
Council with a motion supporting a funding option that will become part of the 2015/2016 budget
process. The Council is being asked to consider this item at the August 25, 2014 Committee of
the Whole Meeting and subsequent September 2, 2014 Regular Meeting.
ATTACHMENTS
Proposed budgets from Parks and Recreation, the YMCA, and CSC (The CSC budget was
submitted to the District prior to the RFQ process),
W:\2014 Info Meroos-Council\afterschoolcurrent2FS,doc
Tukwila Afterschool Funding Worksheet
2014 -2015 School Year
NOT FINALIZED - FOR PLANNING PURPOSES ONLY
Project Funding Sources
Sept -Dec
TOTAL
entary Schools)
Sept Oct Nov Dec
Jan -June
TOTAL
Jan
Feb Mar Apr May June
SCHOOL
YEAR TOTAL
City of Tukwila
a6
-
-
-
-
100,000
16,667
16,667
16,667
16,667
16,667
16,667
-
Tukwila School District
1,04
19,769
19,769
29;769
29,769
-
-
-
-
-
10,578
10,578.
:� 9 74:
IN -KIND TSD transportation & facility (est.l
4t#
10,000
10,000
10,000
10,000
60,000
10,000
10,000
10,000
10,000
10,000
10,000
2 ;-
Parks & Recreation Fees (some familie
139,474
5,100
5,100
5,100
5,100
30,600
5,100
5,100
5,100
5,100
5,100
5,100
"51000
TOTAL Revenues
130474
34,869
34,869
34,869
34 „869
190,600
31,767
31,767
31,767
31,767
31,767
31,767
830,074 i
Project Provider Costs
Sept -Dec
TOTAL
Sept Oct
Nov
Dec
Jan -June
TOTAL
Jan
Feb Mar Apr May June
SCHOOL
YEAR TOTAL
YMCA
a6
14,018
14,018
14,018 '
14,0}18
84,108
14,018
14,018
14,018
14,018
14,018
14,018
-
Tukwila Parks & Recreation
10,851
10,851
10,851
10,851
63,468
10,578
10,578
10,578
10,578
10,578
10,578.
jt3 872
iN -KIND TSD transportation & facility (est.)
4t#
10,000
10,000
10,000
10,000
60,000
10,000
10,000
10,000
10,000
10,000
10,000
TOTAL Costs
139,474
34,869
34,8 9
34,869
34,869 1
207,576
34,596
34,596
34,596
34,596
34,596
34,596
347,050
Surplus /Deficit
W
-16,9761
-2,82
-2,829
-2,829 -2,829 -2,8291-
Afterschooh Recreation Program - Proposed Budget
Scenario 3 - Integrated Model
Parks & Recreation Implementation
55 -65 students per site (fee waived)
*10 -20 additional kids per site (sliding scale fee)
1- Cascade View Elementary
Rec Lead Supervisor
Rec Leader
Rec Leader
Rec Leader
Rec Leader
2 - Thorndyke Elementary
Rec Lead Supervisor
Rec Leader
Rec Leader
Rec Leader
Rec Leader
3 - Tukwila Elementary
Rec Lead Supervisor
Rec Leader
Rec Leader
Rec Leader
Rec Leader
TOTAL COST 3 SITES
Staff Cost $40,404
Supply Cost $3,000
TOTAL COST
Potential Revenue
ADJUSTED COST
Hourly Rate Daily Hours Days School Year Cost
$14.00
$12.00
$10.00
$10.00
$10.00
$14.00
$12.00
$10.00
$10.00
$10.00
$14.00
$12.00
$10.00
$10.00
$10.00
4
3
3
3
3
74
74
74
74
74
Cascade View Staff Cost
Cascade View Supply Cost
Cascade View Total Cost
4 74
3 74
3 74
3 74
3 74
Thorndyke Staff Cost
Thorndyke Supply Cost
Thorndyke Total Cost
4 74
3 74
3 74
3 74
3 74
Tukwila Staff Cost
Tukwila Supply Cost
Tukwila Total Cost
$4,144
$2,664
$2,220
$2,220
$2,220
$13,468
$ 1,000
$ 14,468
$43,404
$ 20,400
$23,004
$4,144
$2,664
$2,220
$2,220
$2,220
$13,468
1,000
14,468
$4,144
$2,664
$2,220
$2,220
$2,220
$13,468
$ 1,000
$ 14,468
*Revenue Recovery - Sliding scale subsidy between 0 -75% (60 total kids - 20 kids per site)
Subsidy
Subsidy at 0%
Subsidy at 25%
Subsidy at 50%
Subsidy at 75%
# of kids
24
12
12
12
Monthly Fee
$ 120
$ 90
$ 65
$ 30
Months
4
4
4
4
Potential Revenue
Totals ( $ 20,400.00
$ 11,520
$ 4,320
$ 3,120
$ 1,440
4
Elementary After School Program Proposal for Tukwila School District
July 18, 2014
Thank you again for considering the YMCA for after school programming at Tukwila elementary schools.
We prepared Scenario#l—the"hybr\drnode|"be|nvvforprograrnnningthreedaysavveekvviththe
assumption that Tukwila Parks & Recreation (P&R) would provide programming two additional days.
However, after some consideration we also prepared Scenario 2 — the "integrated model" that would
align Tukwila Parks & Recreation and the YMCA more as integrated partners rather than parallel
programs. We are happy to implement whichever approach resonates more with the City and the School
District, but we feel this second approach may be superior for the following reasons:
• Better student and family xperience from integrated and streamlined programming.
• One registration system for parents/families instead of separate systems depending on the day
of the week.
� Avoids the need for two snack programs, two different transportation plans, two sets of
attendance records, etc.
�
A deepened partnership between the YMCA and Parks and Recreation would allow each partner
to learn from—and leverage the strengths of—the other.
• 5 days a week of academic programming.
• 5-day/wk positions attract a better talent pool than 3-days/wk positions.
Scenario #1 — the "hybrid model"
heY��[AprovdesaPrognarn[oordinatorateachschooLl8hourspervveekonTuesday�VVednesday�
�ndThuodays. Coordinator isrcspnnsiNe for: nveraUplanning and innp|ernentatiVnof the YK4[A'safter
-p i YK4CAregistration, rnanagingtransportation onYK�CA days, attendance onYK4[A
school
ays,an -=�� |.~kin�snacksonYK�[Aday�. \nadditioothe Coordinator vviHcoUnbnratevviththe
days, --/ool to identify target students for academic supports, work with t eac h ers an d administrators to
identify learning targets
and appropriate after school curriculum, coordinate dental and vision
screenings.
After school program will run daily from 3:15 — 5:30pm
3:15 — 3:30 snack
3:30 — 5:30 academic support programs, enrichment/arts activities, STEAM programming
Approximate budget per school for school year programming (does not include summer):
• Coordinator (18 hrs/wk x 45 wks) $ 14,580
• G staff (3hrs per $ I4,300
� � 4
$ • ProgrannSupplies _ , 000
• YMCA Indirect (15%) $ 6,432
TOTAL per school $ 49,312
With 6 total staff plus the Program Coordinator, each site would accommodate 55-65 students.
Scenario #2 — the "integrated model"
The YMCA provides a Program Coordinator at each school every school day for a total of 25
hours per week. Coordinator is responsible for: overall planning and implementation of the
after school program, continuity between recreation/enrichment and academic programming,
registration, managing transportation, attendance, data tracking snacks. In addition the
Coordinator will collaborate with the school to identify target students, work with teachers and
administrators to identify learning targets and appropriate after school curriculum, coordinate
dental and vision screenings.
Parks & Recreation would provide 3 staff daily to lead aligned recreation and enrichment
activities.
After school program will run daily from 3:15 — 5:30pm
3:15 — 3:30 snack
3:30 — 4:30
Group A (grades 1 — 3) is in enrichment/rec programs led by 3 P&R staff
Group B (Grades 4 — 5) is in academic support programs led by 3 YMCA staff
4:3O-5:3O—Group
• A is in academic support programs |edby3YM[Astaff
• Group B is in enrichment/rec programs led by 3 P&R staff
Approximate budget per school for school year programming (does not include summer):
• Coordinator (25 hrs/wk x 45 wks) $ I0L250
• 3 YMCA staff (3hrs per day x 150 days) $ I0,250
• Program Supplies $ 6,000
• YMCA Indirect (15%) $ 6,975
TOTAL per school $ 53,475
With 6 total staff (including P&R staff) plus the Program Coordinator, after school programs
could accommodate 55-65 students per site
HIGH
FOSTER
FY 2013 FY 2014
FY 2013 $
Site Manager
Support Staff
$ 45,043
515/hr X 12
hrs/wk
AmeriCorps
Donated
Contractors
2,380
ft Students
Enrolled 30
days+
167 50
$ 102,566 $ 78,988
MIDDLE
SHOWALTER
FY 2013
U
FY 2014
FY 2013 $
Site Manager
46,980
Support Staff
5
$15-$17/hr
12 hrs/wk
AmeriCorps
Donated
Contractors
8,255
ft Students
Enrolled 30
days+
118
50
$ 117,141
$ 78,988
sui2ev7 1-Cc cL
Prt +0 Z-PQ
ELEMENTARY
CASCADE VIEW
THORN DYKE
TUKWILA
FY 2013
FY 2014
FY 2013
FY 2013
FY 2014
FY 2013
FY 2013
FY 2014
FY 2013
Site Manager
0.5
0.5
31,195
51,420
0.5*
0.5
17,150
Support Staff
6
3
AmeriCorps
1
0
515-517/hr x
12 hrs/wk
$ 2,222
4
2
2
1
$15-$17/hr
12 hrs/wk
2,222
5
2
2
1
$15-$17/hr
12 hrs/wk
2,222
,Contractors
U Students
Enrolled 30
days+
11,205
725
3,351
212
90
119
100
135
90
$ 129,771 $ 76,403
$ 126,848 $ 87,776
$ 97,408 $ 72,551
*did not work summer
8
0
'Off
St
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Finance and Safety Committee
FROM: Chris Flores, Interim Fire Chief
DATE: 08/13/14
SUBJECT: SAFER Grant
ISSUE
The purpose of this memo is to inform the Committee about the FEMA SAFER (Staffing for
Adequate Fire & Emergency Response) Grant.
BACKGROUND
This Grant is intended to increase the number of firefighters at the scene of an emergency
incident, thereby increasing public and firefighter safety. The grant was previously funded at
100% of salaries and benefits for the first year, 75% the second year, and 50% the third year.
More recently FEMA has altered that model and reduced the compensation period to 2 years,
but at 100% compensation for both years. The Department intends to make application for the
SAFER Grant In the amount necessary to fund 6 positions. Tukwila City Council and the City
Administration do not have to make a decision regarding the acceptance of this grant at this
time. In 2013 the application period for this grant began on July 29, and was open for a period of
30 days. The application period for 2014 has not yet been announced by FEMA.
DISCUSSION
The current expenditure of Suppression Division overtime is roughly equivalent ($600K) to
continued cost of maintaining 2 additional positions per shift after the expiration of the
performance period. Overtime expenses can be greatly reduced while at the same time
increasing the level of service, public, and firefighter safety.
FINANCIAL IMPACT
The financial impact is $600,000.00 per year at the conclusion of the performance period.
RECOMMENDATION
This memo and presentation are for information only.
ATTACHMENTS
No Attachments
9
10
0
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
FROM: Chris Flores, Interim Fire Chief
DATE: 08/12/14
SUBJECT: Fire Department Overtime and Staffing
ISSUE
This memo is meant to inform Mayor Haggerton, the Finance & Safety Committee, and Tukwila
City Council of the current conditions, and impacts related to overtime usage in the department.
It is also intended to introduce potential future solutions.
BACKGROUND
Overtime usage in the Department spiked dramatically in 2013 and continues to demonstrate a
similar trend in 2014. Both years have produced dramatic increases in long term absences for
disability or for other reasons. Long term vacancies have contributed as well.
In 2011 the Department utilized 11,223 hour of sick leave. There were 8 absences greater than
30 days in length. There were not a significant number of vacancies due to retirement. In 2012
the Department utilized 10,917 hours of sick leave. There were 9 absences greater than 30
days in length. There were two vacancies requiring approximately 1700 hours of back-fill. In
2013 the Department utilized 11,289 hours of sick leave. There were 6 absences greater than
30 days in length. There were 6 vacancies requiring approximately 7,850 hours of back-fill. For
2013 the combination of sick leave and back-fill was in excess of 15,000 hours. In the first 7.5
months of 2014 the Department utilized 8,387 hours of sick leave. There were 9 absences
greater than 30 days in length. There was one vacancy requiring approximately 1,300 hours of
back-fill. This vacancy will continue to exist until mid to late September. The projected total for
the utilization of Department sick leave for 2014 is approximately 14,000 hours.
In 2013 the Department budget for Suppression Division overtime was allotted $408,868.00.
The line item was increased through budget amendment by $200,000.00. With that amendment
in place, the line item was exceeded by $65,878.36, for a total of $ 674,736.36 expended for
suppression overtime.
DISCUSSION
There are three potential solutions to this problem.
The first solution involves the acceptance of overtime as an operational cost, or to put it in
layman's terms, the cost of doing business. Overtime line items could be increased through
budget planning and adoption, or reconciled through amendment.
The second solution involves the addition of staffing. Contractually all line personnel are granted
access to 4 available days per shift for Vacation or Kelly Day leave. With staffing at 18 per shift
any additional absences either create overtime, or force staffing to decrease even further. The
Department has informally reduced minimum staffing from 14 to 13 in order to meet the current
challenges. The result of this reduction is the staffing of Ladder 54 with 3 instead of 4. This is a
significant impact to fireground operations as related to "truck" work, In 2013 the theoretical
addition of 2 FTE's per shift, for a total of 20 FTE's per shift would have resulted in a total
11
12
INFORMATIONAL MEMO
Page 2
number of 23 Suppression Division shifts of overtime, a number easily exceeded on a monthly
basis in 2013 and the first half of 2014. The aid car would have been available for service 259
days of that year. This could be achieved at a cost of approximately $600,000.00 per year. The
successful acquisition of the FEMA SAFER Grant could ease the burden of that cost for three
years.
The third solution involves a reduction in the existing, and somewhat slender provision of
service. The Department Administration could not viably recommend this solution. The cost of
reducing service to an area of such significant assessed value, infrastructure, and economic
importance is not advisable.
FINANCIAL IMPACT
The financial impact appears to be approximately $600,000.00 as packaged in the two most
viable solutions.
The financial impact of reduced service is the demonstrated by the visible savings in general
fund budget. Potential impacts might include increased risk to public and firefighter safety,
increased fire loss, and economic loss.
RECOMMENDATION
This memo is only intended to provide information, and to generate guidance for potential
further research.
ATTACHMENTS
Chart-Number of Employees on Sick/FMLA Leave in 2011, 2012, 2013, and 2014.
Chart-Number of Hours of Sick/FMLA Used in 2011, 2012, 2013, and 2014.
C:1UsersIchristylAppDatalocaY1Microsoft1VVindows1Temporary Internet Files1Content.OutlooklH94XRZJMIInfoMemoFDOTSTAFFING092014.doc
Number of Employees on Sick /FMLA Leave
2011
2012
2013
2014
® Sick Leave /FMLA greater
than 30 days
Number of Hours of Sick /FMLA Used.
16,000 -
14,000-7
12,000-7
10,000
8,000-"
6,000
4,000
2,000
0
2011 2012 2013 2013 2014 2014
Combined* Projected*
2012
2 Vacancies from September 1— December 31; 1700 hours backfill
2013
1 Vacancy January 1— December 31 add 1420 hours of leave and 2600 hours of backfill *
1 Vacancy October 1— December 31; Jury Duty 650 hours *
2 Vacancies from January 1— May 15 ; 2400 hours*
2 Vacancies from March 31— August 31; 2200 hours *
2014
1 Vacancy — January 1 —June 30; 1300 hours of backfill **
Through July 15, 2014 pay period
2011
2012
2013
❑ 2013 Combined*
2014
❑ 2014 Projected*
(.441
TO:
of City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL U��U���������U�
nn�n ��n�nmn��nn��n���u~ omn�~nmn��n�x�xn�����n�n
Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
Finance Department
BY: Cindy Wilkins — Fiscal Specialist — Finance Department
DATE: August 4, 2014
SUBJECT: 2014 Reporting of Abandoned Property to the WA State
Department of Revenue Unclaimed Property Section
ISSUE
Annual write-off of outstanding and unredeemed General Fund accounts payable claims and
payroll checks.
BACKGROUND
Each year by November 1st, the City of Tukwila reports abandoned or unclaimed property that
is owed either to individuals or business vendors to the Washington State Department of
Revenue Unclaimed Property Section and removes these items from the accounting records. All
local governments are required to report all unclaimed property except unclaimed restitution.
Normal restitution is submitted to the County Treasurer each month for the Crime Victims Fund.
Unclaimed restitution is then reported each year by the County Treasurer to the State
Treasurer.
Current Finance Department policy dictates that all abandoned or unclaimed property be
reported annually to the Washington State Department of Revenue Unclaimed Property Section
through the Council approved resolution process.
DISCUSSION
The annual proposed resolution totaling $1,547.45 reflects amounts deemed as abandoned or
unclaimed property. For the 2014 unclaimed property report yeor, reporting of abandoned
General Fund Accounts Payable claims checks total $1,531.4; and reporting of Payroll checks
total $16.04.
To the extent possib|e, those individual property owners with unclaimed accounts payable
claims and payroll checks have been notified by the City through the "good faith" effort of being
served due diligence letters. These individual property owners have either not responded to the
due diligence notifications and/or cannot be located in order to claim their property.
INFORMATIONAL MEMO
Page 2
RECOMMENDATION
The Council is being asked to approve the Resolution declaring the cancellation of unclaimed
General Fund accounts payable and payroll checks and consider these items on the Consent
Agenda at the September 2, 2014 Regular Council Meeting.
ATTACHMENTS
Proposed Draft Resolution
2014 Unclaimed Property Summary Detail Report
cAusers\Je"nifer-Kxp uamuoca porary Internet Files \ComrmovtlonmZpcw2mo012 1*mmwnmomoc
16
DRAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, AUTHORIZING THE CANCELLATION OF
OUTSTANDING GENERAL FUND CLAIMS AND PAYROLL CHECKS.
WHEREAS, the State of Washington, Department of Revenue Unclaimed Property
Section, for the reporting on year 2014, requires a one -year dormancy period for
outstanding claims and payroll checks issued from the General Government Fund; and
WHEREAS, the City of Tukwila Finance Department has made all reasonable
attempts to resolve the outstanding, unredeemed General Fund claims; and
WHEREAS, the City Council of the City of Tukwila wishes to cancel all outstanding,
unclaimed General Fund claims and payroll checks issued prior to July 1, 2013;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
The Tukwila City Council authorizes the cancellation of General Fund and payroll
checks as detailed on Attachment A, the 2014 Unclaimed Property Summary Detail
Report.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President
APPROVED AS TO FORM BY:
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Rachel Turpin, Assistant City Attorney
Attachment A: 2014 Unclaimed Property Summary Detail Report
W: \Word Processing \Resolutions \Cancellation of outstanding claims and checks 8 -12 -14
CW:bjs
Page 1 of 1
17
18
Accounts
Payable
Payroll
ATTACHMENT A - 2014 Unclaimed Property Summary Detail Report
Outstanding Check Listing 7/1/2012 - 6/30/2013
Fund Vendor Invoice
Check # Check Date Vendor
Inv Date
Letter Ret'd Letter Ret'd w
Letter /Affidavit No New Address,
Amount Sent Forwarding re -sent
361309 t 08/20/2012 HARVEY WILLIAMS
General 014359
678241
- 07/30/2012
58.50
05/01/14
361479 09/17/20 SAVER General 014437
9171262
08/29/2012
10 001
05/01/14 06/16/14
361702 10/15/2012 i DAVID STEELE
General ,008842
10151232
10/15/2012
5.00
05/01/14
9
361936 11/19/2012 JASON CONTRERAS
General '014518
11191252
10/24/2012
10.00„,,,
05/01/14 06/16/14
362203 12/17/2012; NORTHWEST PERMIT
General 012989
EL12 -0701
11/21/2012
47.88
05/01/14
362254 t 12/17/2012 TODD WALTON
General 014612
012 -369
1.
12/07/2012
779.67
05/01/14
362520 ' 01/28/2013 CHASE BANK
General 014667
701797
j
01/03/2013
t 200.00.
06/10/14
362638 1 02 /19 /20131JANGHCHO General i014681
2191332
01/30/2013
10.00
06/10/14
362765. 03 /04 /2013,SHONTA JACKSON General j014742
3041384
02/08/2013
15.21L
06/10/14
362771 03/04/2013 LAURIE KEARNEY
General 014714
3041387
02/08/2013
16.18i
06/10/14
362803 03/04/2013 ANDY CARL SCOLLARD .
General 014735
3041404
02/08/2013
16.22
06/10/14
362826 1 03/04/2013 WESTERN WA CHAPTER OF ICC
General 009136
03041331
02/28/2013
60.00
06/10/14
362898 ° 03/18/2013 DENNIS NEFF i
General 011564
31813300
`
03/06/2013
2.75
06/10/14
362994 04/01/2013 i PING LAU General 013579
2031
03/13/2013
100.00
06/10/14
363057 04/15/2013 RON BEARD General 014833
714403
04/04/2013
, 100.00
06/10/14
1
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363628 06/17/2013jMISUK LEE
Genera1015023
727650
06/10/2013
J 100.00
06/10/14
526864 41278 1MCKINLEY, IAN
otal Checks:
1,531.4
General
12/16/12 - 12/31/12 41278
Total to be reported to the State:
16.04] 04/25/14
16.04
1,547.45
20
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
DATE: August 13, 2014
SUBJECT: Resolutions adopting policies related to the debt, the financial planning
model, and general financial policies
ISSUE
Approve Resolution adopting policies related to the financial planning model and other general
financial policies. Approve Resolution adopting debt policies.
BACKGROUND
In September 2005, the City Council approved Resolution No. 1586 adopting policies related to
debt, the financial planning model, and policies of a general financial nature.
The policies in the resolution are incorporated in the City's budget document and the financial
planning model and capital improvement document.
In October 2012, the City Council approved Resolution No, 1774 adopting a reserve policy to
maintain an adequate fund balance allowing mitigation of risks to revenues.
DISCUSSION
There are two resolutions the City Council is being asked to approve.
Resolution #1
This resolution restates Resolution No. 1586 by removing the policies related to debt and the
policy related to fund balances. The debt policies have been rewritten as a stand-alone debt
policy and will be approved in the resolution that follows this one. The fund balance policy that is
being removed from this resolution was already approved in a new reserve policy adopted by the
Council in October 2012 by Resolution No. 1774.
Until the remaining financial planning model and general financial policies can be reviewed and
updated as needed, they are being restated in this resolution with minor adjustments that update
the names of schedules and statements currently utilized by the City for financial planning
purposes. The attachment for the resolution is shown in strike-out underline format to easily see
the original attachment and the changes that are being recommended.
Resolution #2
This resolution will adopt a new debt policy. The policy outlines the purpose, type, and use of
debt, responsibilities of certain City officials, methods of bond sales including when refundings
could occur, structural elements of debt, and the use of professionals and other service providers
for debt related matters.
21
INFORMATIONAL MEMO
Page 2
RECOMMENDATION
Council is being asked to approve both resolutions and consider these items at the
August 25, 2014 Committee of the Whole meeting and subsequent September 2, 2014 Regular
Meeting.
ATTACHMENTS
-Draft Resolution restating financial planning model and other general financial policies
-Attachment to resolution restating financial planning model and other general financial policies
in strike-through underline format
-Draft Resolution adopting debt policy
-Draft Debt Policy
22
FT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TUKWILA, WASHINGTON, ADOPTING UPDATED
POLICIES RELATED TO THE FINANCIAL PLANNING
MODEL AND OTHER GENERAL FINANCIAL POLICIES;
AND REPEALING RESOLUTION NO. 1586.
WHEREAS, the City Council and Mayor are committed to high standards of
financial management; and
WHEREAS, adopting and periodically updating and revising financial policies are
important steps toward ensuring consistent and rational financial management; and
WHEREAS, policies related to the Financial Planning Model and other general
financial policies are essential components of an overall financial management policy;
and
WHEREAS, it is the responsibility of the City Council of the City of Tukwila to
provide policy direction through the passage of motions and ordinances, adoption of
resolutions, and final approval of the budget; and
WHEREAS, the City desires to enact the City's Debt Policy as a stand -alone policy;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. Financial policies related to the Financial Planning Model and policies
of a general nature, as evidenced in Exhibit A, are adopted.
Section 2. The financial policies related to the Financial Planning Model and other
general financial policies shall be reviewed on a regular basis and updated as
necessary.
Section 3. Repealer. Resolution No. 1586 is hereby repealed.
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23
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President
APPROVED AS TO FORM BY:
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Rachel Turpin, Assistant City Attorney
Attachment:
Exhibit A — Financial Planning Model Policies and Other General Financial Policies
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Page 2 of 2
City of Tukwila
Debt Policies
•-e
.
EXHIBIT A
- •• •
A. Legal Debt Limit The Revised Code of Washington (RCW 39.36) establishes the
legal debt limits for cities. Specifically, this —RCW- provides that debt cannot be
of the City; 1.5% without a vote of the people; 2.5% with a vote of the people;
of 5.0% is for parks or open space development.
impact certain projections would have on debt capacity limitations.
Policy DP 1 Prior to issuing any long term bonds, the Administration must
approved by the City Council.
Policy DP 2 Long term debt cannot be issued prior to reviewing the impact on
the Six Year Planning Model and its policy guidelines. The impact of other
potential bond issues shall be considered.
Policy DP 3 Fiscal Policy for large developments. To be determined.
C. General Debt Policies
.. • _ - •e
et".•
maintain the highest possible bond rating.
Policy DP 5 Assessment Debt (LID) shall be considered as an alternative to
General Debt.
consequences.
Page 1 of 4
25
Financial Planning Model Policies
The six -year "Financial Planning Model and Capital Improvement Program" is the primary
financial policy document. It represents the culmination of all financial policies.
Revenues
Policy FP -1: Revenues will be estimated on a conservative basis. Increases
greater than inflation in the schedule known as "Attachment A," total- Revenues and
Expenditures Governmental Funds, will require additional documentation.
Policy FP -2: Major revenue sources will require explanation in the document known
as "Attachment A -1," Notes to Revenues, Expenditures and Fund Balance.
Operating Expenditures
Policy FP -3: Expenditures for the General Fund operations (schedule known as
"Attachment B," General Fund Operating ons & Maintenance Expenditures) will only
include basic inflationary increases at the beginning of the budget preparation
process. Proposed increases in programs or personnel will require an issues and
options paper and Council approval before being added to the operating ons &
maintenance expenditures estimate.
Capital Expenditures
Policy FP -4: Project capital grants with local matching requirements can only be
applied for with express approval by the City Council. Grant applications shall be
made only for projects listed in the six -year Capital Improvement Program.
Policy FP -5: If the proposed grants or mitigation are either not funded or are
reduced, the respective project will be reevaluated on the basis of its value and
priority level placement in the Capital Improvement Program.
Policy FP -6: The financing of limited benefit capital improvements (i.e. private
development) should be borne by the primary beneficiaries of the improvement.
The principle underlying limited benefit is that the property is peculiarly benefited
and therefore the owners do not in fact pay anything in excess of what they receive
by reason of such improvement.
Page 2 of 4
26
Financial Planning Model Policies (continued)
Fund Balances
.I eel - • ■
Fund" balance that is not included in Attachment A, Total Revenues & Expenditures,
flow scenario the Accumulated Totals within the Six Year Planning Model may not
recede below the $3,000,000 in Attachment A, Total Revenues & Expenditures.
Policy FP 8 If compliance with Policy FP 7 is at risk; the Administration will
deferrals for City Council consideration.
Enterprise Funds
Policy FP-9 7: Each Enterprise Fund shall be reviewed annually and it must have a
rate structure adequate to meet its operations and maintenance and long -term
capital requirements.
Policy FP-1-0 8: Rate increases shall be small, applied frequently, and staggered to
avoid an overly burdensome increase and undue impact in any given year.
Policy FP-14 9: Rate increases of external agencies (i.e. King County secondary
wastewater treatment fees) will be passed through to the users of the utility.
Other General Financial Policies
Policy GF -1: The City's various user charges and fees shall be reviewed at least every
three years for proposed adjustments based on services provided and comparisons with
other jurisdictions.
Policy GF -2: The Finance Director shall provide a financial status update at least
quarterly.
Policy GF -3: Budget amendments during the year may be approved by budget motion
until the end of the budget year, at which time a formal comprehensive budget
amendment is submitted.
Page 3 of 4
27
Policy GF-5 4: The City shall, whenever practical and advantageous, take advantage of
grants, loans, or other external financial sources. With the exception of capital
improvement program grants requiring a local match, staff shall report to and seek the
approval of the appropriate Council Committee before finalizing the grant.
Page 4 of 4
28
FT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ADOPTING A DEBT POLICY
AND PROVIDING FOR APPROPRIATE MANAGEMENT OF
DEBT ISSUED BY THE CITY OF TUKWILA.
WHEREAS, a debt policy and appropriate management of debt issued by the City
is an important factor in measuring the City's financial performance and condition; and
WHEREAS, proper use and management of borrowing can yield significant
advantages; and
WHEREAS, the use of debt is a mechanism to equalize costs of needed
improvements to both present and future citizens; and
WHEREAS, it is the responsibility of the City Council of the City of Tukwila to
provide policy direction through the passage of motions and ordinances, adoption of
resolutions, and final approval of the budget; and
WHEREAS, a debt policy establishes the purpose, type, and use of debt;
responsibilities of various City officials; method of sale of bonds; refundings (bonds or
notes); structural elements; credit objective; and the use of professional and other
service providers;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. The debt policy dated August 2014, attached hereto as "Exhibit A," is
hereby adopted by this reference as if set forth in full.
Section 2. The debt policy shall be reviewed on a regular basis and updated as
necessary.
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29
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President
APPROVED AS TO FORM BY:
Rachel Turpin, Assistant City Attorney
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Attachment: Exhibit A, City of Tukwila Debt Policy dated August 2014
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Page 2 of 2
Exhibit A
CITY OF TUKWILA DEBT POLICY
A debt policy and appropriate management of debt issued by the City of Tukwila (the "City ") is an
important factor in measuring its financial performance and condition. Proper use and management of
borrowing can yield significant advantages. From a policy perspective, the City uses debt as a
mechanism to equalize the costs of needed improvements to both present and future citizens.
SECTION 1. PURPOSE, TYPE AND USE OF DEBT
In the issuance and management of debt, the City shall comply with the Washington State
constitution and with all other applicable legal requirements imposed by federal, state and local
laws, rules and regulations. Approval from the City Council (the "Council ") is required prior to the
issuance of all debt. Long -term debt will only be used for improvements that cannot be financed
from current revenues or to fulfill the purposes set forth in the first paragraph of this Debt Policy
(the "Policy ").
Long -term debt will not be issued prior to reviewing the impact on the Six Year Financial
Planning Model and its policy guidelines. When both tax exempt and taxable debt is under
consideration, priority will be given to issuing the tax exempt debt.
Limited Tax General Obligation (LTGO) Bonds. The City is authorized to sell LTGO bonds
under RCW 39.36.020, subject to the approval of the Council. LTGO bonds will be issued only if:
(1) a project requires funding not available from alternative sources; (2) the project has a useful life
longer than five years, and the Council determines it is appropriate to spread the cost over that useful
life, to achieve intergenerational equity, so those benefiting will also be the ones paying; (3) matching
money is available which may be lost if not applied for in a timely manner; or (4) emergency
conditions exist as determined by the Council. LTGO (non- voted) debt of the City shall not
exceed an aggregate total of 1.5 percent of the City's assessed value of taxable property within
the City.
Unlimited Tax General Obligation (UTGO) Bonds. The City is authorized to sell UTGO bonds
under RCW 39.36.020, subject to the approval of the Council, and subject to voter approval.
UTGO debt will be used for capital purposes when the use of an excess tax levy is necessary for
debt service payments. No combination of UTGO (voter approved) debt and LTGO debt of the
City shall exceed an aggregate total of: (a) 2.5 percent of the City's assessed value of the taxable
property within the City for general purposes; (b) 2.5 percent of the City's assessed value of the
taxable property within the City for parks, open spaces and capital facilities associated with
economic development; and (c) 2.5 percent of the City's assessed value of the taxable property
within the City for utility purposes.
Revenue Bonds. The City is authorized to sell revenue bonds under RCW 35.41.030, subject to
the approval of the Council. Revenue bonds will be issued to finance the acquisition, construction
or improvements to facilities of enterprise systems operated by the City, in accordance with a
system and plan of improvements. The enterprise system must be legally authorized for operation
by the City. There are no legal limits to the amount of revenue bonds the City can issue, but the
City will not incur revenue obligations without first ensuring the ability of an enterprise system
to meet all pledges and covenants customarily required by investors in such obligations during the
term of the obligation.
1 August 2014
31
SECTION 1. PURPOSE, TYPE AND USE OF DEBT (continued)
Local Improvement District Bonds. The City is authorized to sell local improvement district
(special assessment) bonds ( "LID bonds ") under RCW 35.45.010, subject to the approval of the
Council. LID bonds are issued to finance projects that will provide special benefit to certain
property owners. The specially benefiting property owners are levied an assessment, based upon
a formula developed to fairly reflect the benefit received by each property owner in the local
improvement district. After consideration and review, the City may form local improvement
districts upon petition of benefiting property owner(s), unless the Council determines to establish
such districts by resolution, pursuant to statutory authority. LIDs for utility improvements may be
authorized as ULIDs, which may be financed through issuance of Revenue Bonds.
Lease Purchase Financing. Lease purchase financing may be used when the cost of borrowing or
other factors make it in the City's best interest.
Short -Term Debt. The City is authorized to incur short-term debt under chapter 39.50 RCW,
subject to the approval of the Council. Short-term debt may be issued to meet: (1) the immediate
financing needs of a project for which long -term financing has been identified and assured or
secured but not yet received; or (2) cash flow needs within authorized budgets and anticipated
receipts for the budget year.
The Finance Director is authorized to make loans from one City fund to another City fund for periods
not exceeding twelve months. The Finance Director or designee is required to assure that the loaning
fund will have adequate cash balances to continue to meet current expenses after the loan is made and
until repayment from the receiving fund. All interfund short-term borrowing will bear interest based
upon prevailing Local Government Investment Pool rates.
SECTION 2. RESPONSIBILITIES
The primary responsibility for debt management rests with the City's Finance Director.
The Finance Director shall (or shall cause the following to occur):
• Provide for the issuance of debt at the lowest cost and risk.
• Determine the available debt capacity.
• Provide for the issuance of debt at appropriate intervals and in reasonable amounts as
required to fund approved projects.
• Recommend to the Council the manner of sale of debt.
• Monitor opportunities to refund debt and recommend such refunding as appropriate.
• Comply with all Internal Revenue Service (IRS), Securities and Exchange Commission (SEC)
and Municipal Securities Rulemaking Board (MSRB) rules and regulations governing the
issuance of debt pursuant to the City's Post Issuance Compliance Policy.
• Provide information for and participate in the preparation and review of bond offering or
disclosure documents.
• Comply with all terms, conditions and disclosures required by ordinances governing the debt
issued.
• Submit to the Council all recommendations to issue debt.
• Distribute to appropriate repositories, such as the EMMA repository managed by the Municipal
Securities Rulemaking Board, information regarding financial condition and affairs at such
times and in the form required by contract, regulation and general practice, including Rule
15c2 -12 regarding continuing disclosure.
2 August 2014
32
SECTION 2. RESPONSIBILITIES (continued)
• Provide for the distribution of pertinent information to rating agencies.
• Coordinate and lead presentations to rating agencies, when appropriate.
• Maintain a database with all outstanding debt.
• Apply and promote prudent fiscal practices.
• Select a qualified financial advisor with experience in municipal finance in Washington, and
registered with the SEC and MSRB as a "municipal advisor."
• Account for and pay all bonded indebtedness for the City, by specifically providing for the
timely payment of principal of and interest on all debt; and ensuring that the fiscal agent
receives funds for payment of debt service on or before the payment date.
The Council shall:
• Approve the Debt Policy.
• Approve indebtedness.
• Approve budgets sufficient to provide for the timely payment of principal and interest on debt.
• Determine the most appropriate financing plan for proposed debt, based on recommendation
from the Finance Director, upon advice of the City's financial advisor.
• By ordinance, delegate broad or limited authority to the Finance Director relative to execution of
a financing plan approved by the Council.
SECTION 3: METHOD OF SALE OF BONDS
Competitive Sale. The Finance Director may, upon the advice of the City's financial advisor,
submit to the Council a recommendation to sell debt on a competitive bid basis. City debt issued
on a competitive bid basis will be sold to the bidder proposing the lowest true interest cost to the
City. Such bid may take the form of electronically transmitted offers to purchase the bonds.
Negotiated Sale. The Finance Director may, upon the advice of the City's financial advisor,
submit to the Council a recommendation to sell debt on a negotiated basis. If debt is sold on a
negotiated basis, the negotiations of terms and conditions shall include, but not be limited to,
prices, interest rates, redemption provisions and underwriting compensation. The Finance Director,
with the assistance of its financial advisor, shall evaluate the terms offered by the underwriter
including comparison of terms with prevailing terms and conditions in the marketplace for
comparable issues. If more than one underwriter is included in the negotiated sale of debt, the
Finance Director shall establish appropriate levels of liability, participation and priority of orders
and, with the assistance of its financial advisor, oversee the bond allocation process.
Private or Direct Placement. When deemed appropriate to minimize the direct or indirect costs
and risks of a debt issue, the Finance Director will, upon the advice of the City's financial advisor,
submit to the Council a request to incur debt issue through a private placement or direct bank
placement.
3 August 2014
33
SECTION 4. REFUNDING BONDS OR NOTES
Refundings will be conducted in accordance with chapter 39.53 RCW. Unless otherwise justified,
the City will refinance debt to either achieve debt service savings as market opportunities arise, or to
eliminate restrictive covenants.
Unless otherwise justified, an "advance refunding" transaction will require a present value savings
of five percent of the principal amount of the debt being refunded. In addition to the savings, any
determination to refund debt should take into consideration all costs and negative arbitrage in the
refunding escrow.
A "current refunding" transaction will require present value savings in an amount or percentage to
be determined by the Finance Director based upon the advice of the City's financial advisor.
SECTION 5. STRUCTURAL ELEMENTS
Maturity Term. The City shall issue debt with an average life less than or equal to the average
life of the assets being financed. Unless otherwise stated in law, the final maturity of the debt shall
be no longer than 40 years (RCW 39.46.110).
Debt Service Structure. Unless otherwise justified and deemed necessary, debt service should be
structured on a level annual basis. Refunding bonds should be structured to produce debt service
savings as determined by the Finance Director, based upon the advice of the City's financial
advisor, to be in the best interest of the City. Unless specifically justified and deemed necessary,
debt shall not have capitalized interest. If appropriate, debt service reserve funds may be used for
revenue bonds.
Maturity Structure. The City's long -term debt may include serial and term bonds. Unless
otherwise justified, term bonds should be sold with mandatory sinking fund requirements.
Price Structure. The City's long -term debt may include par, discount and premium bonds.
Discount and premium bonds must be demonstrated to be advantageous relative to par bond
structures, given applicable market conditions and the City's financing goals.
Interest Payments. Unless otherwise justified and deemed necessary, long -term debt will bear interest
payable semiannually.
Redemption Features. For each transaction, the City shall evaluate the costs and benefits of call
provisions.
Capitalization. Debt service reserves may be capitalized for enterprise activities only. Costs of
issuance may be capitalized for all debt. Interest costs may be capitalized upon the advice of the City's
financial advisor for any type of debt.
Bond Insurance. The City may evaluate the costs and benefits of bond insurance or other credit
enhancements. Any credit enhancement purchased by the City shall be competitively procured unless
otherwise justified.
Tax - exemption. Unless otherwise justified and deemed necessary, the City shall issue its debt on a
tax - exempt basis. Taxable debt may be justified based on a need for flexibility in use of proceeds, or
when expected to reduce burdens relative to IRS rules.
SECTION 6. CREDIT OBJECTIVE
The City shall seek to maintain and improve its bond rating or ratings, as applicable.
4 August 2014
34
SECTION 7. USE OF PROFESSIONALS AND OTHER SERVICE PROVIDERS
Bond Counsel. All debt issued by the City will include a written opinion by bond counsel
affirming that the City is authorized to issue the debt, and that all statutory requirements have been
met. The bond counsel opinion and other documents relating to the issuance of debt will be
prepared by nationally recognized bond counsel with extensive experience in public finance and tax
issues. Bond counsel will be appointed by the Finance Director consistent with the City's general
authority to contract.
Financial Advisor. The Finance Director will appoint a financial advisor for each debt issue, or for a
specified term, consistent with the City's general authority to contract. The financial advisor shall be
nationally recognized, have comprehensive municipal debt experience, including debt structuring and
pricing of municipal securities, be registered as a "municipal advisor" with the MSRB and SEC, and
have knowledge of State laws relating to City finances. The City financial advisor is to be available
for general purposes, and will assist the City with all financing issues. In no case shall the financial
advisor serve as underwriter for the City's debt issues.
Underwriter. The Finance Director in consultation with the City's financial advisor will select an
underwriter for any negotiated sale of bonds. The selection of an underwriter may be for an
individual bond issue, series of financings or a specified time period, as determined by the Finance
Director. Depending upon the nature and amount of each financing, the Finance Director is
authorized, in consultation with the City's financial advisor, to appoint more than one underwriter for
each financing and to designate one underwriting firm as the managing underwriter.
Other Service Providers. Professional services such as verification agent, escrow agent or rebate
analyst shall be appointed by the Finance Director in consultation with the City's financial advisor
and/or bond counsel.
Other City Policies and Procedures. The City shall comply with its Post - Issuance Tax Compliance
Policy, and shall provide the appropriate department heads and staff with educational opportunities to
ensure they are aware of requirements that may pertain to bond financed facilities and assets relating
to their duties.
SECTION 8. POST - ISSUANCE COMPLIANCE PROCEDURES
Continuing Disclosure Obligations for All Bonds
Purpose. At the time of issuance of any Bonds, regardless of tax status, the City is required to
enter into a Continuing Disclosure Undertaking ( "Undertaking ") in order to allow the underwriter
of the Bonds to comply with Securities and Exchange ( "SEC ") Rule 15(c)2 -12. The Undertaking
is a contract between the City and the underwriter in which the City agrees to provide certain
information to an "information repository" operated by the Municipal Securities Rulemaking
Board ( "MSRB ") to ensure investors have access to annual updates and related events that occur
during the year.
Responsibility for Undertaking. The Finance Director is responsible for negotiating the terms of
and complying with each of the City's Undertakings. The Finance Director will negotiate the
terms of the Undertaking at the time of each bond issuance, with a goal of meeting the
requirements of Rule 15(c)2 -12, without undue burden on the City. The Finance Director will
strive to ensure that each Undertaking is similar to prior Undertakings to the extent possible, to
simplify future compliance.
5 August 2014
35
SECTION 8. POST - ISSUANCE COMPLIANCE PROCEDURES (continued)
Compliance with Undertaking. The Finance Director will have responsibility for ensuring
compliance with each Undertaking, which activities may be delegated to staff within the Finance
Department. This will require certain annual filings, by a set due date, as well as periodic filings as
certain specified events arise. Filings are to be made through the Electronic Municipal Market
Access ( "EMMA ") portal, managed by the MSRB. The Finance Director is responsible for
knowing the terms of the City's Undertakings, and ensuring appropriate staff within the Finance
Department and other departments of the City are aware of the events that may require a filing.
Certification of Compliance. At the time of each subsequent bond issue, the Finance Director is
responsible for reviewing all prior compliance, and providing a statement as to that prior
compliance, as required by Rule 15(c)2 -12. Each official statement will include a statement that
describes compliance (or non - compliance) with each prior undertaking, which statement will be
certified by the Finance Director.
Compliance Relating to Tax Exempt Bonds
Purpose. The purpose of these post- issuance compliance procedures ( "Compliance Procedures ")
for tax - exempt bonds and other obligations issued by the City for which federal tax exemption is
provided by the Internal Revenue Code of 1986, as amended (the "Code "), is to facilitate
compliance by the City with the applicable requirements of the Code that must be satisfied after the
issue date of the bonds to maintain the tax exemption for the bonds after the issue date.
Responsibility for Monitoring Post - Issuance Tax Compliance. The City Council of the City has
the overall, final responsibility for monitoring whether the City is in compliance with post- issuance
federal tax requirements for the City's tax - exempt bonds. However, the City Council has delegated
the primary operating responsibility to monitor the City's compliance with post- issuance federal
tax requirements for the City's bonds to the Finance Director and has authorized and directed the
Finance Director of the City to adopt and implement on behalf of the City these compliance
procedures.
Arbitrage Yield Restriction and Rebate Requirements. The Finance Director will maintain or
cause to be maintained records of:
(a) purchases and sales of investments made with bond proceeds (including amounts treated
as "gross proceeds" of bonds under section 148 of the Code) and receipts of earnings on
those investments;
(b) expenditures made with bond proceeds (including investment earnings on bond proceeds)
in a timely and diligent manner for the governmental purposes of the bonds, such as for
the costs of purchasing, constructing and /or renovating property and facilities;
(c) information showing, where applicable for a particular calendar year, that the City was
eligible to be treated as a "small City" in respect of bonds issued in that calendar year
because the City did not reasonably expect to issue more than $5,000,000 of tax - exempt
bonds in that calendar year;
(d) calculations that will be sufficient to demonstrate to the Internal Revenue Service ( "IRS ")
upon an audit of a bond issue that, where applicable, the City has complied with an
available spending exception to the arbitrage rebate requirement in respect of that bond
issue;
6 August 2014
36
SECTION 8. POST - ISSUANCE COMPLIANCE PROCEDURES (continued)
(e) calculations that will be sufficient to demonstrate to the IRS upon an audit of a bond issue
for which no exception to the arbitrage rebate requirement was applicable, that the rebate
amount, if any, that was payable to the United States of America in respect of investments
made with gross proceeds of that bond issue was calculated and timely paid with Form
8038 -T timely filed with the IRS; and
information and records showing that investments held in yield- restricted advance
refunding or defeasance escrows for `bonds, and investments made with unspent bond
proceeds after the expiration of the applicable temporary period, were not invested in
higher - yielding investments.
Restrictions on Private Business Use and Private Loans. The Finance Director will adopt
procedures calculated to educate and inform the principal operating officials of those departments,
including utility departments, if any, of the City (the "users ") for which land, buildings, facilities
and equipment ( "property") are financed with proceeds of tax - exempt bonds about the restrictions
on private business use that apply to that property after the bonds have been issued, and of the
restriction on the use of proceeds of tax - exempt bonds to make or finance any loan to any person
other than a state or local government unit. In particular, following the issuance of bonds for the
financing of property, the Finance Director shall provide to the users of the property a copy of
these Compliance Procedures and other appropriate written guidance advising that:
(a) "private business use" means use by any person other than a state or local government
unit, including business corporations, partnerships, limited liability companies,
associations, nonprofit corporations, natural persons engaged in trade or business activity,
and the United States of America and any federal agency, as a result of ownership of the
property or use of the property under a lease, management or service contract (except for
certain "qualified" management or service contracts), output contract for the purchase of
electricity or water, privately sponsored research contract (except for certain "qualified"
research contracts), "naming rights" contract, "public- private partnership" arrangement, or
any similar use arrangement that provides special legal entitlements for the use of the
bond - financed property;
(b) under section 141 of the Code, no more than 10% of the proceeds of any tax - exempt bond
issue (including the property financed with the bonds) may be used for private business
use, of which no more than 5% of the proceeds of the tax - exempt bond issue (including
the property financed with the bonds) may be used for any "unrelated" private business
use —that is, generally, a private business use that is not functionally related to the
governmental purposes of the bonds; and no more than the lesser of $5,000,000 or 5% of
the proceeds of a tax - exempt bond issue may be used to make or finance a loan to any
person other than a state or local government unit;
(c) before entering into any special use arrangement with a nongovernmental person that
involves the use of bond - financed property, the user must consult with the Finance
Director, provide the Finance Director with a description of the proposed
nongovernmental use arrangement, and determine whether that use arrangement, if put
into effect, will be consistent with the restrictions on private business use of the bond -
financed property;
(d) the Finance Director is to communicate with the City's bond counsel and /or financial
advisor relative to any proposed change in use or special use arrangement that may
impact the status of the bonds, before entering into such agreement.
(f)
7 August 2014
37
38
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
DATE: August 13, 2014
SUBJECT: Financing Plan for Urban Renewal Tukwila International Boulevard (TIB)
Redevelopment Project
ISSUE
Council is being asked to approve the proposed financing plan for the urban renewal Tukwila
International Boulevard (TIB) Redevelopment Project.
BACKGROUND
In 2013, the City began budgeting for a project intended to reduce crime through acquiring key
properties within the City's urban renewal zone. On April 22, 2013 the City Council approved an
ordinance authorizing the City to use condemnation, if necessary, to purchase up to seven
properties in the urban renewal zone. Those properties were the: Boulevard Motel, Great Bear
Motel, Jet Inn Motel, Knight's Inn Motel, Pawn Shop, Smoke Shop, and Spruce Motel. The City
then conducted appraisals, contacted the property owners, and began evaluating the properties
to determine a purchasing strategy.
On August 27, 2013 the City helped the Federal Government seize three crime-involved
motels: Boulevard Motel, Great Bear Motel, and Traveler's Choice Motel.
As a result of the motel seizures, and the inability to reach a mutually agreeable purchase with
the owner of the pawn shop property within the timeframe necessary to meet the needs of a
potential commercial tenant, the City ended negotiations on that property and determined instead
to purchase the Traveler's Choice motel, the only seized motel that was not originally in the urban
renewal plan. The Council was briefed on these matters early in 2014.
In August 2014 the City purchased two of the seized motels at the appraised value (the Great
Bear and Traveler's Choice) from the Federal Government and is close to completing the
purchase of the Boulevard Motel. The City then plans to purchase the Spruce Motel and Smoke
Shop.
On August 4, 2014, the Council authorized the use of interfund loans to temporarily finance the
property purchases until a financing plan could be developed and executed.
The current estimated cost of the project, excluding property management costs, is $6,100,000;
the estimated proceeds from the future sale of the land is $2,250,000 yielding a net estimated
cost to the City of $3,850,000.
39
INFORMATIONAL MEMO
Page 2
DISCUSSION
The City, in conjunction with its financial advisor the PFM Group, considered various financing
options for the redevelopment project. Based on in-depth analyses, the recommended plan is as
follows:
• Enter into a $2,250,000 taxable line of credit for acquisition costs estimated to be
recoverable through future property sales; funds would be drawn as needed and the line
would be paid off upon sale of the land.
• Issue $3,850,000 20-year taxable bonds for the estimated net cost to the City.
• Annual debt service under this plan would approximate $313,000 for 2015 — 2016 and
$287,000 for 2018 — 2034,
A detailed discussion and analysis of the options is presented in the attached Recommended
Financing Plan for Tukwila International Boulevard (TIB) Redevelopment Project. In the Plan,
Scenario 3 is the recommended option.
RECOMMENDATION
Council is being asked to approve the resolution adopting the proposed financing plan and
consider this item at the August 25, 2014 Committee of the Whole meeting and subsequent
September 2, 2014 Regular Meeting.
ATTACHMENTS
-Recommended Financing Plan for Tukwila International Boulevard (TIB) Redevelopment Project.
-Draft Resolution: Adopting a Financing Plan for the Urban Renewal Tukwila International
Boulevard (TIB) Redevelopment Project.
40
The PfM Group
City of Tukwila, Washington
Recommended Financing Plan for
Tukwila International Boulevard (TIB) Redevelopment P 'ect
August 19, 2014
Overview Financing Goals
The City plans to acquire certain improved property on Tukwila International Boulevard for the
purpose of redevelopment. As part of its redevelopment plan, the City will demolish the
improvements and offer the vacant land for sa|e, subject to certain development conditions. It is
estimated that the property acquisitions will occur in 2014 and early 2015 and cost
approximately $5.100.000. The City estimates it may take up to three years (or possibly more)
to sell the property, which is estimated to produce proceeds of $2,250,000. While the City
expects the redevelopment to provide long term strategic benefit to the City, the transactions
are expected to result in a net cost to the City of $3,850,000.
The City wishes to finance the cost for the acquisition of property, estimated at $6.100.000. in
order to amortize the cost over a period of twenty years. The City would also like to have the
ability to use proceeds from the sale of properties (estimated at $2.250.000) to redeem or
prepay debt, in order to reduce overall interest cost.
Financing Considerations
In reviewing the City's financing options, we focused on two questions, which are addressed in
this section:
1) Could the City use lower cost tax-exempt financing for a portion of the p j ct under
Internal Revenue Service (IRS) ru|es, and under what conditions; and
2) Given the short term nature of an estimated $2,250,000 of p ject cost, can we reduce
the term and, therefore, the overall cost, for a portion of the borrowing without taking on
an inordinate amount of risk?
Taxable versus Tax Exempt Bmrrowing Considerations
While the City can benefit from tax exempt borrowing for p jects defined by the IRS as
governmental purpose," certain projects tsmreconsideredbythe|R8tnbe''non'governnoenta|"
due to the actual or perceived private benefits of the pr j*ot. Tax exempt financing offers the
City savings in interest cost, but requires that certain restrictions are met in regard to use of the
proceeds and to whom the properties will be sold. Taxable financing provides the City with the
most flexibility in the use of proceeds, timing of the sale of the properties and who they may
entertain bids from in the sale of the property.
The PFM Group
In order to issue tax exempt bonds, the City must reasonably anticipate the ability to meet IRS
restrictions as summarized by Foster Pepper PLLC, the City's Bond Counsel.
1) The properties financed must be sold no later than 18 months after the date of the first
expenditures on purchase of the Property;
2) The City may not enter into any kind of agreement with the purchaser of the property to
receive additional payments associated with the property (for example, no agreements
that the purchaser will pay extra if the property is not developed in three years); and
3) The amount of tax exempt financing does not exceed the actual sale proceeds received
by the City when the property is sold.
4) Alternatively, the City could commit to restrict the sale of property to a non-profit
purchaser and qualify for tax exempt financing although this would restrict the potential
pool of purchasers, and could result in lower sales prices for the properties.
Due to the limitations above, the City would be compelled to meet certain time constraints,
limitations in terms, or limitations in who could buy the property, all of which may reduce the
overall value and effectiveness of the redevelopment pr ject. Given the expectation that the
City would use the proceeds of sale to prepay or redeem debt, effectively the benefit of tax
exempt financing would primarily apply to the $3,850,000 of debt financed for a longer term.
We evaluated the difference in debt service between an all taxable bond issuance ($6,100,000)
and a combination ($2.25 million taxable and $3.85 million tax-exempt) and determined it is
approximately $380,000 or $19,000 per year for 20 years. On a net present value basis, this
benefit would be lower. Given the relatively small potential savings from using a portion of tax
exempt bonds, and the level of conditions or restrictions it would impose upon the City, the City
would be best served by using a fully taxable financing for the project.
Options to Reduce Overall Financing Cost
Because a portion of the financing will be paid from proceeds of the sale of property, estimated
to occur within three years, we reviewed financing options that included a combination of short
term financing ($2.250.000) and long term financing ($3.850.000). as compared to options for
long term financing with the option of defeasing or prepaying bonds with sale proceeds.
2
42
The PFM Group
These options are summarized be|Vw, and are based on an all-taxable financing p|on, as
discussed above. Appendix A includes more detailed descriptions of the three Scenarios,
Scenario ---�--
Number
—
Descripon of Scenario
Debt
Service
Net Present
Value D/S
Comments ---
Benefits and Risks
1
Issue $G.1OO.O0Oof2O'yoar
bonds in 2014. Use
proceeds of property sales
to prepay bonds on the first
possible date, in 10 years
$8.220.351
$6.171.160
• Lock in today's rates
• Minimize interest rate risk
• Potential higher total debt
service overall
• Higher near-term payments
2
Borrow $G.1UO.OU8 for short
term in 2014; issue long
term bonds for the net
amount of borrowing (est.
�3.850.000)in2017
7.870.365
5.70 .787
• Lower short term interest
rates
• If long term rates rise less
than 1.5O%kz185Y6
between 2014 and 2017,
lower total O/8
• High degree of interest rate
exposure on $3,850,000
3
Issue $3,850,000 of 20-yea
bonds in 2014 and enter
into a $2,250,000 Line of
8.053.175
5.029.711
• Lock in today's rates on
$3,850,000 long term
portion
Credit in 2014, due in 2017
• Lower short term rates on
$2,250,000 portion
• Matches term of each
portion with expected need
• Interest rate risk on short
term portion, but for a short
term period
• At current market rates,
savings estimated at
$165.000. Even if short
term rates rise to3.85%
(from about 1.0% today),
same cost as Scenario 1
Recommendation
Given the City's goals of financing the acquisition of pnoporty, with the ability to use proceeds
from the sale of properties (estimated at $2.250.000) to redeem or prepay deUt, in order to
reduce overall interest nost, we recommend Scenario 3, which is a combination of short term
financing of $2,250,000 and long term financing of $3.850.000. The interest rate risk for this
scenario is limited to the smaller amount and shorter term, and is expected to provide overall
debtnen/icenavingscnmparedk)a|nnQtmrmisnuancenf$5.1OO.00OoTbmndstoUay.
As shown in Appendix B. Scenario 3 will also provide for a lower annual debt service payment
and more effectively spread the financing cost over a twenty year term.
4
44
The PIM Group
Appendix A
Description of Scenario 1:
Scenario 1 assumes the City issues all of the estimated $6.1 million in project costs up front in a
taxable bond issuance (20 year term) in October 2014. The use of the sale proceeds (at the
time of sale), estimated at $2.25 million, will be used to fund an early redemption account, to caII
the bonds at their ten year par caII. This scenario produces approximately $8,220,361 in total
debt service over the 20 year Iife of the financing. The present value of the debt service,
discounted at 3.8096. is approximately $6.171.610.
Benefits:
• Mitigate interest rate risk by locking in financing today
• Timing of sale proceeds will have minimal effect on overall financing costs
• Take advantage of historically low interest rate environment
• Simplicity in financing process
Risks:
• If rates remain the same the financing would have the greatest cost
• If $2,250,000 bonds are not prepaid from property sales proceeds, the full $6.1 million
will be outstanding for a greater amount of time, creating costs greater than shown here
Estimated Average Annual Deb Service 2015—ZOZ4: $451.000
Estimated Average Annual Debt Service 2025 — 2027: $340.000 (excluding prepayment from $2.250.000)Eshma0ad
Average Annual Debt Service 2028 : $52.000
Description of Scenario 2:
Scenario 2 assurnes the City issues short term financing for the estimated $6.1 million in p jeo
costs in October 2014. As properties are so|d, the sale procaods, estimated a\$2.25 miUion,
would be used, along with $3,85 million financed as a long term taxable bond insuence, to take
out the short terrn financing. This scenario produces approximately $7,870,365 in total debt
service over the 20 year Iife ofthe financing. The present value of the debt service, discounted
at 3.80Y6. is approximately $5.703.787.
Benefits:
• Utilize short term rates up front
• If interest rates remain the same the financing cost would be lower than scenario 1
5
Rinks:
°
Take out finance timing is uncertain, contingent upon sale of property
�
Significant interest rate risk
• If interest rates rise more than 1.50% - 1.85% between now and 2017, the overall cost of
the financing would be greater than scenario 1.
• Interest rates have been 1.596 higher than today's rates approximately 85% of the time
over the past 20 years.
Estimated Average Annual Debt Service 2015-2O1O: $93,000
Estimated Average Annual Debt Service 2018-2O34: $314.000
Description of Scenario 3:
Scenario 3 assumes the City undertakes the financing in two parts in October 2014:
1. A 3 to 5 year line of credit for $2.25 million in project costs in October 2014. The line of
credit would be drawn as needed to purchase property and re-paid upon sale of
property. Although the line of credit would carry a variable rate of interest, the current
rates are approximately 1.0Y6. leaving significant buffer for interest rate risk.
2. A$3.85 million 2O' year taxable bond, also issued in October 2O14.
This scenario produces approximately $8,063,175 in total debt service over the 20 year life of
the financing. The present value of the debt service, discounted at 3,80%. is approximately
$6,029,711.
Benefits:
• Mitigate interest rate risk by locking in a large portion of the financing today
• Flexibility with the timing of a portion of funding using the line of credit
• Take advantage of historically low interest rate environment
• Lower debt service than Scenario 1
Risks:
• More interest rate exposure than Scenario 1, but much less than Scenario 2
• If properties are not sold in 3 to 5 years, the City may need to refinance the debt for long
term, which may result in higher interest rates over the long term.
Estimated Average Annual Debt Service 2O15-2O16: $313.000
Estimated Average Annual Debt Service 2O18-2V34: $287.000
6
46
The
Period
Ending
12/1/2015 $ 451,439 $ 451,439 $ 96,197 $ 313,733
12/1/2016 453,154 453,154 91,119 312,919
12/1/2017 450,949 450,949 2,338,463 2,556,417
12/1/2018 452,396 452,396 312,726 288,614
12/1/2019 452,721 452,721 316,700 285,622
12/1/2020 451,805 451,805 314,945 286,910
12/1/2021 450,123 450,123 317,118 287,670
12/1/2022 452,730 452,730 313,378 287,927
12/1/2023 454,177 454,177 313,738 287,484
12/1/2024 3,079,744 449,744 313,469 286,526
12/1/2025 337,694 449,565 312,610 285,033
12/1/2026 341,714 453,585 315,924 288,079
12/1/2027 339,713 451,583 313,476 285,459
12/1/2028 52,005 453,876 315,403 287,443
12/1/2029 450,242 316,619 288,822
12/1/2030 450,857 312,094 289,574
12/1/2031 450,490 312,124 284,681
12/1/2032 - 449,302 316,497 284,457
12/1/2033 - 452,278 314,989 288,682
12/1/2034 - 454,184 312,780 287,128
Croup
Appendix B
Annual Debt Service Schedule
Scenario 1 (1) Scenario 1 b (2)
Scenario 2 Scenario 3
Total $8,220,361 $9,035,194 $7,870,175 $8,063,175
Present Value $6,171,160 $9,035,194 $5,703,787 $6,029,711
(1) Assumes the $2,250,000 in property sale proceeds are escrowed to the first call date for the Bonds
(2) Assumes the $2,250,000 in property sale proceeds are not used to call Bonds prior to maturity
7
47
48
AFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ADOPTING A FINANCING PLAN
FOR THE URBAN RENEWAL TUKWILA INTERNATIONAL
BOULEVARD (TIB) REDEVELOPMENT PROJECT.
WHEREAS, the City of Tukwila plans to, and has, acquired certain improved
property on Tukwila International Boulevard for the purpose of redevelopment; and
WHEREAS, as part of the redevelopment plan, the City will demolish the
improvements and offer the vacant land for sale, subject to certain development
conditions; and
WHEREAS, it is estimated that the property acquisitions will cost approximately
$6,100,000; and
WHEREAS, the City estimates it may take up to three years to sell the property,
which is estimated to produce proceeds of $2,250,000; and
WHEREAS, while the City expects the redevelopment to provide long term strategic
benefit to the City, the transactions are expected to result in a net cost to the City of
$3,850,000; and
WHEREAS, the City wishes to finance the cost of the acquisition of property in
order to amortize the cost over a period of 20 years; and
WHEREAS, the City would like to have the ability to use proceeds from the sale of
properties to redeem or prepay debt in order to reduce overall interest cost;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
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Page 1 of 2
49
The City Council hereby adopts a financing plan for the Urban Renewal Tukwila
International Boulevard (TIB) Redevelopment Project whereby the City of Tukwila will
secure a 3- to 5 -year $2,250,000 taxable line of credit to finance acquisition costs
estimated to be recoverable through future property sales, and whereby a 20 -year
$3,850,000 taxable bond will be issued for the estimated net acquisition cost to the City.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President
APPROVED AS TO FORM BY:
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Rachel Turpin, Assistant City Attorney
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50
Page 2 of 2
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL U��U���������U�
on�n ��nnn�o��n n*�'n����~ nmn�~n�xv��na�mnm����n�n
Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky CmNsem,0eputy Finance Director
DATE: August 13, 2014
SUBJECT: Option to Enhance Revenues: Billing for Motor Vehicle Accident Response
USSUE.
Review billing for motor vehicle accident response (MVA) as an option to enhance revenues for
the City.
BACKGROUND
At the January 14, 2013 City Council Committee of the Whole, Councilmember ROb8rtSOO, as
Chair of the Finance and Safety Committee, distributed a draf of committee goals that included
researching revenue increases and expenditure decreases.
An Info Memo identifying 3 potential revenue sources was distributed at the June 12, 2013
Finance and Safety Committee meeting. One option proposed was billing for motor vehicle
accident responses on highways.
DISCUSSION
Government agencies have the ability to recover costs for emergency response to motor vehicle
accidents. The at-fault drivers' liability portion of insurance is charged for services provided
and/or supplies used on scene of an accident. It appears that insurance companies are willing
to pay the claims because they believe the fire response protects the scene and prevents
additional accidents which could result in more claims. When more than one vehicle is involved
and law enforcement has not determined who is at fault, Fire personnel would need to collect
data from all drivers in order for the billing services provider to work with law enforcement to
determine who is at fault.
Emergency service providers can bill for a variety of items including the number of responders,
type and number of appanatus, service tasks perforrngd, time spent on eoenu, as well as
supplies used. Currently, the Fire Department only bills to clean up spills of hazardous
materials at MVAs. If no hazardous materials are invo|ved, the fire department does not send
bill for services provided; less than 10% of MVAs that the Fire Department responds to involve
hazardous materials. Average recovery for an incident is just under $500.
A number of emergency response agencies have started programs to bill for services rendered
m1MVAS. Snohomish County Fire District 3 (Monroe), Snohomish County Fire Districts 1 and 7,
Lewis County, City of BOtheU, and a large portion of fire districts in Pierce County are either
considering or have implemented a program to bill for this fee.
This program is relatively new in this State so there is not much historical data available for
analysis. One fire district, Snohomish County Fire District 1 implemented a cost recovery
INFORMATIONAL MEMO
Page 2
program in spring of 2013. To date, collection rates have been lower than anticipated and they
have struggled to get complete and accurate data required for billing.
Current City Data for MVAs
The table below shows response statistics for MVAs on highways for the period of 2010-2013:
Year # of Average Duration Average
responses of Response Cost
2013 355 35 minutes $341
2012 390 31 minutes $259
2011 424 32 minutes $352
2010 408 29 minutes $236
If the City were to bill for services rendered at all MVAs a minimum of $500 per call and the
recovery rate was over 50%, the City could potentially increase revenue at least $100K and
probably more if the Department aggressively pursued this revenue stream.
CurnenUv, billing and recovery is performed by EF recovery. The Fire department estimates that
of all billings that currently are sent to EF Recovery, the rate of recovery is between 50% and
75%. It is important to note that the gathering of insurance information for billing purposes does
not take priority over operations, life safety or scene safety. Some billing opportunities do, and
will fall through the cracks.
Variables to Consider
There are a number of variables that need to be considered in determining the direction the City
should take regarding billing for services provided at MVAs:
1. Bill both residents and non-residents or only non-residents
2. Bill for all MVAs or only those that occur on state-owned highways and freeways
3 . If what the City bills for is expanded, is there a minimum time on scene before at-
fault motorists are billed
4. If the City decides to expand what is billed for, do we continue to utilize EF Recovery
for billing services or should other billing service providers be considered
5. If billing is expanded, what is the impact on administrative staff to prepare documents
for billing
6. Are uninsured motorists that are at fault billed, and if so, do responding personnel
need to collect additional data
7. Are past due bills sent to collections or written off
RECOMMENDATION
At this time staff recommends that this issue be tabled. The current Fire Exploratory Committee
will be making recommendations to the Administration and Council regarding future operations
of the Fire Department. If the recommendation is for the City to operate and maintain a
municipal fire department, then MVA billing should be revisited in more depth.
ATTACHMENTS
52