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HomeMy WebLinkAboutFIN 2017-09-06 Item 2A - Report - Public Safety Bond Financial Oversight CommitteeCity of Tukwila Allan Ekberg, Mayor • :I ji FA%• ` • ' TO: Finance Committee FROM: Laurel Humphrey, Council Analyst CC: Mayor Ekberg DATE: August 29, 2017 SUBJECT: Report of the Public Safety Bond Financial Oversight Committee ISSUE First report to the City Council from the Public Safety Bond Financial Oversight Committee DISCUSSION The City Council established a Public Safety Bond Financial Oversight Committee to "independently represent taxpayers concerning the City's expenditure of revenues received from the sale of general obligation bonds," and to "review the allocation of bond proceeds and progress on achieving the purposes of the Public Safety Bond," and to "report at least semi- annually to the City Council and the public on the same." On April 3, 2017 the Council appointed Sean Goode, Jessica Jerwa, Andy Reiswig, Randy Coplen, and Jun Castillo to serve on the Committee. The Public Safety Bond Financial Oversight Committee is required to meet at least twice per year, and to report to the Council at least twice per year. The Committee had its first meeting on June 29, 2017 and this is its first report. This is also an opportunity for the City Council's Finance Committee to meet with the Oversight Committee and give advice or direction on future reports or other communications. RECOMMENDATION Staff recommends that this first report be delivered to the Finance Committee and provided in hard copy to the rest of the Council, and that the Oversight Committee present its second 2017 report in person to the full Council at a Committee of the Whole or Regular meeting. ATTACHMENTS • Committee Report • June 29, 2017 draft minutes • Responses to questions from June 29, 2017 meeting 2 CITY OF TUKWILA PUBLIC SAFETY BOND FINANCIAL OVERSIGHT COMMITTTEE Report to the City Council August 30, 2017 The Public Safety Bond Financial Oversight Committee met in open session on Thursday, lune 29, 2017 at 4:00 p.m. at Tukwila City Hall. Pursuant to Ordinance 2509 and Resolution 1892, during this meeting the Committee reviewed status and expenditure reports relating to the Public Safcty Bond as approved by Tukwila voters at the November 8, 2016 General Election. City staff also provided an overview of the Public Safety Plan as well as schedules relating to construction and public outreach. As required by the Charter, the Committee elected a Chair and Vice -Chair and approved by-laws. The draft minutes of this meeting are attached. With regard to bond finances, the Oversight Committee reviewed a list of contracts and a report of revenues and expenditures through May 31, 2017. The Committee finds that expenditures to date are in compliance with the purposes of the Public Safety Bond. The Committee intends to meet again in October and will report its findings and any r4qs for im ment to the City Council prior to the end of the year. Sean Goode, Chair 3 El. • City of Tukwila Public Safety Bond Financial Oversight Committee June 29, 2017 City Hall, Hazelnut Conference Room 4:00 p.m. MINUTES I. Call to Order 11. Roll Call Attendees introduced themselves and brie Committee or their role with the City of Tu • Sean Goode, Member • Jessica Jerwa, Member • Randy Coplen, Member • Andy Reiswig, Member • Jun Castillo, Member • Bob Giberson, Public Works Dire • Laurel Humphrey, Council Analyst; • Sherry Wright, $enjo!? Fscal Coot • Vicky Carlsen, Depuf )✓mance Di • Peggy McCari y, Finandi§ :P recto III. Approval of unanimously and IV. Approval'of Minutes (i V. UnfinishedBusiness VI. New Business 1. Election of"`Chaff r to their interest in serving on the Reiswig seconded. The motion carried Mr. Goode offered to serve as Chair and Ms. Jerwa offered to serve as Vice -Chair. The Committee accepted both nominations and no further nominations were made. Mr. Goode was elected as Chair and Ms. Jerwa as Vice -Chair, each abstaining from the vote. 5 2. Committee By -Laws The Committee discussed the draft by-laws. Staff noted that the by-laws require no fewer than two meetings a year, and the staff recommendation is to meet a second time in October 2017 when there will be more substantial expenditure reports to review. The Committee agreed with that proposal. Mr. Coplen moved approval of the by-laws as presented, and Ms. Jerwa seconded. The motion carried unanimously and the by-laws were adopted. 3. Public Safety Plan 101 Staff presented an overview of the Public Safety Plan, including background, description, funding, community oversight, project schedule, outreach schedule, implementation to date, engagement tools, and feedback received to date. 4. Financial Overview The Committee reviewed a list of contracts associated with the Public Safety Plan to date, including project management services, fire station location study, architectural design and planning, and real estate broker services. A contract for program management quality assurance was just approved by Council on June 26, 2017 and will be included with the next Committee update. Mr. Coplen inquired about the commission for the real estate brokerage services and suggested that staff look at the agreement to see if it would be worth further negotiation, noting that 6% is above the norm if proceeds are not shared with a selling agent. Mr. Coplen also inquired about cost controls on the fire station contracts and would like further information about this. 5. Expenditure report(s) The Committee reviewed a report of all Public Safety Plan revenues & expenditures to date. Total actual revenues through May 31, 2017 are $36,749,466 from the voter - approved bond and investment interest. Actual expenditures through May 31, 2017 are $143,125. On June 12, 2017, the Council Committee of the Whole discussed budget implications of fire station programming considering realities of the current competitive construction market. Staff will send the staff report and meeting minutes to the Committee. VII. Miscellaneous Trainings Staff reminded the Committee of the required Ethics and Open Public Meetings Act trainings. Links have been shared to training videos via email and certificates will be prepared when the requirements have been fulfilled. Each Committee member signed a conflict of interest disclosure form for filing with the City. Report The Committee discussed the Charter requirement to report to the City Council at least semi- annually, which for 2017 would mean preparing a report based upon this committee meeting. Committee members asked staff to assist with a draft or template for their review. Mr. Coplen also asked staff to obtain additional clarification from the City Attorney regarding Committee members' fiduciary authority and liability. Mr. Goode also suggested using the first report as an opportunity to gain clarification from the Council on their expectations. VIII. Adjournment Ms. Jerwa moved adjournment and Mr. Coplen seconded the motion. The motion carried and the meeting was adjourned at 5:04 p.m. Minutes by LH, Reviewed by SW N Rl Responses to questions from June 29, 2017 Public Safety Bond Financial Oversight Committee meeting 1. Additional clarification from the City Attorney regarding Committee members' fiduciary authority and liability. Under state law, PSBFOC members would be immune from civil liability for making or failing to make discretionary decisions in the course of their official duties, except in the case of tortious conduct (intentional acts which bring harm to someone else or that infringe on the rights of others). This immunity is qualified, because damages can be assessed for violation of the Federal Civil Rights Act (42 U.S.C. §1983) if the conduct in question violates clearly established statutory or constitutional rights that a reasonable person should have known about. Sintra v. Seattle, 119 Wn.2d 1, 25, 829 P.2d 765 (1992). That said, as long as appointed officials act in good faith, do not engage in tortious conduct, or violate clearly established rights, they do not risk personal liability for their actions. Further, per the PSBFOC Charter, the City Council retains fiduciary authority over the public safety bond funds. In addition, I have verified with the City's insurer, WCIA, that PSBFOC members are covered by the City's insurance when acting in the course and scope of their duties for the City. As such, it does not seem necessary to secure additional Board of Director's insurance. 2. A 6% real estate brokerage commission seems high —is this worth further negotiation? The real estate commissions paid to brokers on commercial properties are not a fixed 6% like they are on residential properties. If the seller puts its property on the market voluntarily, then the commission is negotiated by seller and seller's agent, including what they might pay to a buyer's agent (if anything). But if the City is buying a property that's not on the market, the unwilling seller is not likely to offer to pay a commission. Therefore, the payment of the commission falls to the buyer (the city) and we have negotiated to pay Heartland a 2.5% commission (not 3%). This amount will be based on the gross purchase price, and will not be doubled if there's no buyer's agent involved. If we buy a property that happens to be on the market, AND happens to be offering a buyer's agent commission, the amount of the commission will have been included in the sales price, so the buyer is paying in any case. In that scenario, we would negotiate a fair arrangement with Heartland. But that scenario is unlikely, given the properties currently being considered for the Public Safety Plan. It's also worth clarifying for Mr. Coplen that the $60,000 portion of Heartland's contract is a not - to -exceed amount, against which Contract Land Services (as a subcontractor to Heartland) will bill its time hourly. Furthermore, Heartland has agreed to cover the first $40,000 of CLS's billings as credits against Heartland's commission. That is, CLS will bill its time and get paid as we go, but when there's a closing on a property, Heartland's commission will be reduced by the amount paid to CLS thus far, up to a maximum of $40,000. n 3. How does the City plan to control costs for the construction of the buildings? Construction of the fire stations and the justice center will be procured using the general contractor/construction manager procedure described in RCW 39.10.340 thru .410. Proposing GC/CM firms that reach the final selection stage will submit their price for their fee and general conditions costs. Those will be factored into the final selection according too formula detailed in the RFP. Except for the possible utilization (if there's a clear benefit) of the alternative electrical and/or mechanical procurement procedure described in RCW 39.10.385, all work scopes on those projects will be competitively bid pursuant to the statute. The City's executive team has ext?nsive experience successfully managing GC/CM projects, with cost and schedule control of paramount importance. http://app.leg. wa. gov/RCW/default. aspx?cite=39.10.340 http://app.leg. wa.gov/RCWldefault.aspx?cite=39.10.385 Construction of the combined shops may be procured using the design/build procedure described in RCW 39.10.300 thru .330, but only if there's a clear benefit. That decision will be made sometime next year. http://app.leg. wa.gov/RCW/default.aspx?cite=39.10.300 10