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Home My WebLink AboutCOW 2016-09-26 Item 3E.2 - Budget Review - 2017-2018 Biennial Budget: Finance DepartmentCOUNCIL AGENDA SYNOPSIS ---------------------------------- hiilialr Meeliq Dale Plepared by Elaor'( rc, . e)v Council rview 09/26/16 VC I- 13azz� F-1 Bid Axard A/Itg Dale ❑ Public.1-leariq AlIg Dale ❑ 01ber Mtg Date V SPONSOR'S Council is being asked to review the Finance department 2017-2018 proposed budget. If SUMMARY no changes are requested, Council concensus will be requested to move the City Council department 2017-2018 proposed budget forward to the final budget package for approval in November. Ri?Virlwi:J) fiy ❑ COW Mtg. ❑ CA&P Cmte E F&S Cmte ❑ Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: 9/20/16 COMMITTEE CHAIR: SEAL RECOMMENDATIONS: SPONSOR/ADMIN. Finance Comm "rr11," For Information Only; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPE'Ni)j,ruit1', Ri,?QLJIRFID AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 9/26/16 ITEM INFORMATION ITEM NO. 3.E. (2) RN ISTAF1 � SPONSOR: VICKY CARLSEN ORIC, INA], A(,F'.NDA Dxn2l': 9/26/16 A(3 j 'N DA ITI 'M'f ITLE' Review Finance Department 2017-2018 Proposed Budget CATFIGORY ❑ Discussion ildtg Date 9126116 ❑ Motion Mg Date ❑ Resolution Mtg Dale ❑ Ordinance YW/,g Date F-1 Bid Axard A/Itg Dale ❑ Public.1-leariq AlIg Dale ❑ 01ber Mtg Date SPONSOR ❑ Coundl E] Allqyor [:] HR ❑ DCD E.Einance [:]Eire ❑ TS ❑ P&R [:] Police [:] PIF SPONSOR'S Council is being asked to review the Finance department 2017-2018 proposed budget. If SUMMARY no changes are requested, Council concensus will be requested to move the City Council department 2017-2018 proposed budget forward to the final budget package for approval in November. Ri?Virlwi:J) fiy ❑ COW Mtg. ❑ CA&P Cmte E F&S Cmte ❑ Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: 9/20/16 COMMITTEE CHAIR: SEAL RECOMMENDATIONS: SPONSOR/ADMIN. Finance Comm "rr11," For Information Only; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPE'Ni)j,ruit1', Ri,?QLJIRFID AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 9/26/16 MTG. DATE ATTACHMENTS 9/26/16 Informational Memorandum dated 9/13/16 Draft Finance 2017 - 2018 Proposed Budget Minutes from the Finance and Safety Committee meeting 9/20/16 RN City of Tukwila Allan Ekberg, Mayor INFORU��D��U��U U��U��U� MATIONAL nmu�_m�m��o�u`�n��m�u TO: Finance & Safety Committee FF<C}K8: Peggy McCarthy, Finance Director BY: Vicky Car|aen. Deputy Finance Director DATE: September 13'201G SUBJECT: Finance Department 2017-2O18 Proposed Budget ISSUE As provided for in the budget process approved by the Finance and Safety Committee, Council Committees will be reviewing budget sections prior to review by the full Council. The Finance section of the budget is ready for review by the Finance and Safety Committee. BACKGROUND The Finance department provides an array of services that include financial data processing, treasury cash 0ntrO|, utility billing and collection, payr0||, aCCUuDtS p3y8b|e, accounts receivable, business |iCeDS8S. prep8[8dOO of the biennial budget and Comprehensive ADOu@| Financial Report, (CAFR) and risk management. DISCUSSION The proposed budget for the Finance department has decreased 3.69% for 2017 and increased by3.5796 for 2018. The following will summarize the proposed changes to the Finance department. Changes from 2015-2016 Budget • COLA increases were applied to salaries, and benefits were adjusted to account for changes in healthcare and retirement. • COLA 2Y6 increase each year • PERS retirement rate set at 12.8396 each year • Healthcare 8% increase each year • Workers compensation 1096 increase each year • Supplies were increased by approximately $5,000 to reflect actual annual costs. • Services, in total has been reduced $155 thousand in2U17 over 2O1O budget and increased $51 thousand in2U18 over 2O17budget. • Property insurance of $106 thousand was transferred to Public Works Facilities division. Additional adjustments were made for inflation. • Audit costs were increased by $15 thousand to reflect budget provided by WA State Auditor's Office. • Claims and judgments was reduced by$O8 thousand /D2O18tV reflect claims history. No increase is projected in 2018. • Other lines were adjusted minimally tO account for inflation. RECOMMENDATION Staff recommends that the Finance and Safety Committee forward this section 0f the budget on to the Committee of the Whole for review. If there are no recommended changes, Council consensus will be requested to move this departmental budget forward to the final budget package inOctober. ATTACHMENTS Draft Finance department 2O17-2O18 Proposed Budget W. Finance Finance Director (1) Deputy Finance Director (1) Fiscal Coordinator Fiscal ClaimasPayroll Coordinator (1) 0) 1 Fiscal Specialist 113 p -6131�lst H H Pairoll (1) Tre a s ury (1 FBI; Fiscal is list I Ist Specialist Claims (1) Utilities (1) Fiscal Support Technician Senior Fiscal Coordinator (1) Fiscal Coordinator (1 l, Fiscal Specialist &asiness Ucenses (1) RYA DEPARTMENT: Finance (05) FUND: General FUND NUMBER: 000 RESPONSIBLE MANAGER: Peggy McCarthy POSITION: Director Description The Finance department provides an array of services that include financial data processing, treasury ooah onntnn|, uU|ih/ billing and collection, peynu||, accounts payable, accounts receivable, business |ioenSeS, preparation of the biennial budget and Comprehensive Annual Financial Report, /CAFR\ and risk management. The Finance Department also serves as liaison to the State Auditor's Office during the annual audit of the City's compliance with legal and financial reporting requirements. 2015-2016 Accomplishments * Obtained debt funding for the Interurban Avenue South and Boeing Aooene Road Bridge projects. Strategic Goal 4. * Assisted in planning and outreach for public safety bond measure that was placed on the November 2018 ballot. Strategic Goal 4. * Revised and enhanced the juror/witness fee reimbursement process by allowing junDnG and vvitnoaaea to be reimbursed on the day of service. The new process also a||mwa jurors and witnesses to donate their reimbursement to the Tukwila Pantry in lieu of receiving funds. Strategic Goal 4. * Revamped the Adult Entertainer License Application process shortening the time required to process adult entertainment dancers. Strategic Goal 4. * Participated in the Fire Exploratory Committee, which reviewed options available for the City's Fire department including annexing into an existing Regional Fire Authority. Strategic Goal 4. * Achieved GFOA budget ovverd and Comprehensive Annual Financial Report (CAFR) award. Strategic Goal 4. * Implemented new industry standards for transactions processing including compliance with new requirements for chipped credit cards. Strategic Goal 4. + Developed Finance Strategic Plan "and Operational Overview. Strategic ^ Gmo/4. 2B17-2018 Outcome Goals + Continue to implement LEAN and HPD methods to enhance efficiencies and service levels especially with fixed asset accounting, indirect cost allocation model, and a new chart of accounts. Strategic Goal 4. + Implement action items identified in the Finance Department Strategic Plan and Operational Overview. Strategic Goal 4. * Issue and manage debt for Public 8ehab/ Plan. Strategic Goal 4. * Develop staff by adding training opportunities where possible. Strategic Goal 4. * Develop new tools for enhanced reporting. long-range financial planning and process improvements. Strategic Goal 4. * Assure continuity of operations through succession planning, staff training and deve{opnnent, and policies and procedure documentation. Strategic Goal 4. + Review fees and update as necessary including utility and other billing late fees and penalties, and credit card usage fee, if feasible. Migrate fee adoption and approval legislation from ordinances to resolutions. Strategic Goal 4. 2O17-2O1B Indicators mfSuccess + Financing ia obtained and managed for the Public Safety Plan. ° Indirect cost allocation is equitable, complies with beet practices and is easy to update requiring fewer than 40 staff hours to do so. Costs that can be directly charged to departments and funds are so charged instead of using the allocation. Fixed asset records are easy to auceoo, provide necessary information and updating requires fewer staff hours. Chart of accounts allows for easier financial reporting for revenues, grants, and provides consistent coding for costs. * Expanded knowledge within department of each major financia|function;abi|itytoporformfunntiono by more than one person. * Credit card usage fee is adopted if feasible; utility billing late fees and penalties are updated; all fee legislation resides in resolutions rather than ordinances. * Credit card processing equipment complies with new requirements and is in p|mce, tested, and working no later than December 31'2O17. Performance Measures Finance Finance Actua I Estimated Projected 2014 2015 2016 2017 2018 Customer Service Number of utility accounts served 7,479 7,511 7,520 7,530 7,540 Number of utility bills generated 39,456 39,757 39,852 39,950 40,050 Accounts Payable and Accounts Receivable # of voucher payments 7,707 6,578 6,407 5,000 5,000 Average # of calendar days for AP to review, approve, and pay vouchers 10 9 7 6 6 # of accounts receivable invoices issued 819 864 632 651 651 Average days from revenue recognition to collection 88 10 15 23 23 Effectiveness, outcomes, and efficiency % monthly financial reports issued by the middle of the subsequent month (expenditure reports) N/A N/A 85% 95% 95% Adjusting journal entries resulting from audit - - - - Vendor checks voided due to Finance Dept error N/A I 10 7 6 6 We Budget Change Discussion: Salaries and Benefits. COLA and step increases were applied to salaries, and benefits were adjusted to account for changes in healthcare and retirement. Extra labor was increased for front desk cashiering support and special projects. Supplies. Supplies were increased $5,000 in 2017 to purchase office equipment to enhance ergonomics and operations. Services. Several lines in this category were adjusted to reflect usage as well as for inflation. Professional Services line was increased $15,000 to account for increase in audit costs, $106,000 of property insurance was transferred to the Public Works facilities division, claims and judgment expenses were reduced by $68,000 to reflect improved claims experience. Expenditure Summary Finance Expenditures By Type Actual 2014 2015 Projected 2016 2016 Budget 2017 2018 2016.17 % Chg 2017 -18 % Chg 10 Salaries & Wages $ 1,017,109 $ 995,579 $ 987,212 $ 1,099,242 $ 1,122,774 $ 1,143,844 2.14% 1.88% 20 Personnel Benefits 354,834 356,221 414,399 422,994 448,187 470,778 5.96% 5.04 % 30 Supplies 13,274 17,647 22,344 19,296 24,000 24,000 24.38% 0.00% 40 Seances 759,744 815,967 946,383 1,198,468 1,043,851 1,094,399 -12M% 4.84% 50 Intergovt. S \cs & Taxes 1 1 - - - - 0.00% 0.00% Department Total $ 2,144,962 $ 2,185,415 $ 2,370,338 $ 2,740,000 $ 2,638,812 $ 2,733,020 - 3.69% 3.57% Expenditure Detail - Salaries and Benefits Salaries are based on actual costs for existing positions and include a cost of living adjustment per contract agreements. Finance Position Description 2016 FTE 2017 FTE 2017 Budgeted Salaries Benefits 2018 FTE 2018 Budgeted Salaries Benefits Finance Director 1 1 $ 150,367 $ 45,118 1 $ 153,374 $ 47,142 Deputy Finance Director 1 1 121,346 40,993 1 123,773 42,942 Senior Fiscal Coordinator 1 1 86,456 39,908 1 88,185 42,078 Fiscal Coordinator 3 3 300,017 108,844 3 306,018 114,070 Fiscal Specialist 5 5 336,021 169,090 5 342,741 178,727 Fiscal Support Technician 1 1 59,277 28,421 1 60,463 30,006 Extra Labor 60,000 765 60,000 765 Overtime 9,289 2,048 9,289 2,048 Unemployment Compensation - 13,000 - 13,000 Department Total 12 12 $1,122,774 $ 448,187 12 $1,143,844 $ 470,778 t✓ l Expenditure Detail - Supplies, Services and Other Supplies include miscellaneous office supplies; services include annual audit fees, liability insurance, software maintenance costs, travel, claims & judgments, subscriptions, and memberships, among others. Finance 91 Actual Projected Budget Account Number 2014 2015 2016 2016 2017 2018 000.05.514.230.31.00 Supplies - Office $ 13,274 $ 17,228 $ 18,296 $ 19,296 $ 19,000 $ 19,000 000.05.514.230.31.01 Supplies - Central Supplies - 153 - - - - 000.05.514.230.35.00 Small Tools & Equipment - Equipment to - 265 4,048 - 5,000 5,000 improve functionality and processes Total Supplies 13,274 17,647 22,344 19,296 24,000 24,000 000.05.514.230.41.00 Prof Svcs - Annual audit from State of WA 94,613 115,901 161,486 150,000 165,000 165,000 Auditor's Office, Consulting services 000.05.514.230.41.01 Prof Svcs - Microflex sales tax auditing 1,681 10,840 5,111 5,000 5,000 5,000 program 000.05.514.230.42.00 Communications - Postage, delivery 254 288 727 1,000 1,000 1,000 service, shipping 000.05.514.230.43.00 Travel - Meals, parking, mileage for 2,231 2,662 5,466 5,000 10,000 10,000 WFOA, PSFOA, software training 000.05.514.230.45.00 Rental - Copier lease 3,410 3,283 2,944 2,700 3,500 3,500 000.05.514.230.46.00 Insurance - City -wide liability insurance 282,576 7,371 7,372 455,000 8,100 13,100 000.05.514.230.46.01 Insurance - Liability insurance - 303,876 330,968 - 343,726 385,999 000.05.514.230.46.04 Insurance - Property insurance - 27,645 - - - - 000.05.514.230.48.00 R &M - Folding maching, other equipment, vault, Eden software annual maintenance 54,540 57,278 59,781 62,500 65,625 68,900 000.05.514.230.49.00 Misc -Annual memberships, GFOA, 22,947 13,217 65,331 61,900 45,900 45,900 WFOA, armor car service, registrations 000.05.514.230.49.03 Misc - Claims & judgments 288,047 261,316 300,000 450,000 382,000 382,000 000.05.514.230.49.08 Misc - PPI credit card fees 9,445 12,290 7,197 5,368 14,000 14,000 Total Services 759,744 815,967 946,383 1,198,468 1,043,851 1,094,399 000.05.514.230.53.00 Ext Taxes & Assmnts - Excise Taxes 1 1 - - - - Totallntergovernmental 1 1 - Total Supplies, Services and Other $ 773,019 $ 833,614 $ 968,727 $1,217,764 $1,067,851 $1,118,399 91 92 Finance and Safety Committee Minutes .......................................................................... ............................... September20, 2016 C. Budget Review - Multiple Departments Pursuant to the process requested by Council earlier this year, sections of the proposed 2017- 2018 budget are being presented to standing Council Committees prior to moving forward through the full Council review process. Staff presented proposed 2017 -2018 budgets for the following departments and divisions: Firemen's Pension Fund, Human Resources, Finance, Mayor's Office Administration, City Attorney, City Clerk, Communications, Economic Development, Human Services and Boards and Commissions. Committee members discussed the proposals as detailed in the agenda packet and requested additional supporting documents as follows. Mayor's Office, Human Services Division: Chart showing the Human Services budget for the past 20 years. Funding for this division has remained relatively steady and the Committee would like the full Council to discuss this. Mayor's Office, Communications Division: Currentjob description and monthly work plan for the Community Engagement Manager position. The Committee would like a greater understanding of the goals of this position. COMMITTEE DISCUSSION. FORWARD TO SEPTEMBER 26, 2016 COMMITTEE OF THE WHOLE WITH REQUESTED DOCUMENTS. D. 2016 Budget Amendment: Innovation and Technology Services Staff is seeking Council approval of an amendment increasing the Innovation and Technology (ITS) Department's 2016 budget by $170,000. $82,000 would go toward Help Desk support from October through December, allowing ITS staff to spend time on other critical technology needs such as online registration for Parks and video cameras on Tukwila International Boulevard. The remaining $88,000 would be used to develop a user portal and persona- driven Information Technology Service Management (ITSM) to improve service to technology users. Cost savings from other departments will cover the total amount requested so there will be no impact to the General Fund. Councilmembers Seal and Robertson spoke in favor of supporting technology needs with additional funds, mentioning current deficiencies. Councilmember Kruller raised concerns about the proposals not aligning with recommendations from the Moss Adams IT assessment that was conducted in 2014. The Committee requested documentation outlining where the proposed strategy diverges from Moss Adams recommendations. NO RECOMMENDATION. FORWARD TO SEPTEMBER 26, 2016 COMMITTEE OF THE WHOLE WITH SUPPORTING MATERIAL. E. Innovation and Technology Services Department Proposed 2017 -2018 Budget Staff is seeking Council approval of a proposed 2017 -2018 budget for the Department of Innovation and Technology Services, including an increase of $362,980 in 2017 and $329,980 in 218 as well as additional salary and benefits resulting from the transfer of 3 existing FTEs from other departments (Police and Public Works). Committee members discussed the proposal and asked clarifying questions. Chair Seal noted that service efficiencies are needed and the City should effectively communicate service enhancements to the community. NO RECOMMENDATION. FORWARD TO SEPTEMBER 26, 2016 COMMITTEE OF THE WHOLE. 93