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Home My WebLink AboutFIN 2017-09-19 COMPLETE AGENDA PACKETCity of Tukwila Finance Committee O Verna Seal, Chair O Kathy Hougardy O Thomas McLeod Distribution: Recommended Action V. Seal Mayor Ekberg K. Hougardy D. Cline T. McLeod C. O'Flaherty D. Robertson L. Humphrey TUESDAY, SEPTEMBER 19, 2017 — 5:30 PM HAZELNUT CONFERENCE ROOM (At east entrance of City Hall) Item Recommended Action Page 1. PRESENTATION(S) 2. BUSINESS AGENDA a. 2017 2nd Quarter investment report. a. Information only. Pg.1 Vicky Carlsen, Deputy Finance Director b. July 2017 monthly departmental budgets -to -actuals b. Information only. Pg.11 report. Vicky Carlsen, Deputy Finance Director c. An update on the Fire Department budget. c. Information only. Pg.15 Vicky Carlsen, Deputy Finance Director, and Jay Wittwer, Fire Chief 3. ANNOUNCEMENTS 4. MISCELLANEOUS Next Scheduled Meeting: Tuesday, October 3, 2017 SThe City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206-433-1800(TukwilaCityClerk@TukwilaWA.aov) for assistance. City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Ekberg Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: September 13, 2017 SUBJECT: Second Quarter 2017 Cash & Investment Report ISSUE The second quarter Investment Report is included with this memorandum and is discussed below. BACKGROUND City funds are invested to earn a reasonable return while preserving principal and allowing sufficient liquidity to meet the City's operating needs. To achieve these objectives investments are diversified by type, by financial institution, and by maturities in compliance with the City Investment Policy. DISCUSSION Portfolio Components As of June 30, 2017, the portfolio totaled $96.708 million comprised of $82.504 million in cash and cash equivalents and $14.205 million in longer term investments. The portfolio balance increased by $3.442 million from a March 31, 2017 balance of $93.332 million. Details on individual fund activity is provided below in the Fund Cash & Investment Balances section. In June, our 13 -month Bank of Washington CD, with an interest rate of 0.7% matured. It was replaced with a 2 -year CD with an interest rate of 1.40%. In June, two bonds were purchased. A City of Auburn Build America Bond, with a principal amount of $300 thousand and an interest rate of 1.65% was purchased and placed in the Equipment Rental fund, and a City of Seattle bond, with a principal amount of $380 thousand and an interest rate of 1.45% was purchased and was also placed in the Equipment Rental fund. No agencies or bonds matured or were called during the second quarter of the year. We continue to look for investments where the interest rate exceeds the rate the City receives with US Bank. Portfolio Performance The portfolio weighted average yield on June 30, 2017, was 0.78%. Considering the portfolio's weighted average maturity was 0.4 years, and the yields on the cash & cash equivalent accounts was 0.72%, the portfolio yield of 0.78% is still favorable. The total yield has been sustained by the 4.13% average yield on the municipal bond investments, the 1.49% average yield on the agencies, the 1.40% yield on the certificate of deposits Investment income received through the end of June 2017 for all investments is $207,877 against an annual budget of $270,809. It should be noted that a significant portion of investment interest is received from agencies and municipal bonds, which is received twice a year rather than monthly. INFORMATIONAL MEMO Page 2 Not included in the portfolio is interest earned from the operating and capital loans to the MPD. The operating loan is being repaid on a monthly basis and will be paid in full by May 2023. Interest earned on the operating loan through June 2017 is $7,085. The capital loan is being repaid semi- annually and will be paid in full by December 2022. Interest accrued through June 2017 is $8,578. Attached to the investment report are amortization schedules for both loans to the MPD. Policy Compliance and Liquidity Analysis As of the end of the 2nd quarter, the portfolio profile is well within the range of all the investment policy parameters. There is currently a healthy mix of investments with a range of maturity dates. Current investments allow for adequate cash flow requirements. Fund Cash & Investment Balances Year over Year Comparison Total fund cash and investments balances are $95.055 million, which is $42.123 million higher than second quarter 2016. The significant increase is directly attributable to $36.5 million bond fund received in December 2016 for the public safety plan. The general fund total cash and investment balance is $10.780 million, which is $1.865 million higher than June of 2016. Transfers of $2.2 million from the general fund into capital projects funds for first and second quarters have not been recorded yet. Rather than transferring funds automatically, we will be transferring funds into the capital projects funds as needed. Special revenue funds all show a year -over -year increase. Over $460 thousand was transferred to the contingency fund from the general fund per the City's minimum fund balance policy. Additionally, the drug seizure fund received almost $539 thousand in seizure funds from the federal government related to the motel seizure that occurred in 2013. The funds were received in 2016 and have not been spent. Debt service funds reflect a total net increase in cash and investments of $756 thousand. Excess property tax revenue associated with the voter approved bonds are received each month and placed in fund 213 until debt service is due. Debt service payments occur twice a year with interest paid in June and interest plus principal paid in December. In November, voters approved a $77 million bond measure to fund public safety facilities and equipment. The first debt issue occurred in December, increasing fund balance in the capital projects funds group by $36.5 million. Fund 306, city facilities, currently shows a negative balance of $79 thousand. Allocation of the project manager fees, SOJ, for the upcoming Public Works Shops facility have been incurred. A funding source for these costs will be identified and included in the budget amendment process later in the year. Utility funds all have increases in fund balances from the prior year. The golf course cash and investment balance is $183 thousand lower than second quarter 2016. The golf course experienced significant rain through the spring, which impacted revenue. Investment Environment The U.S. economy continues to expand with strong growth in employment. However, there is uncertainty with China. Interest rates were hiked in March and again in June with one additional rate hike planned for later in the year. However, economic disruptions caused by back-to-back hurricanes may cause a delay in the next interest rate hike into 2018. Locally, the economy in King County remains positive. Employment grew by 3.4% in the fourth quarter of 2016 relative to 2015, with continued growth in information jobs. Unemployment rate for King County declined again, down to 3.4% in December 2016. Home prices continue to rise, with a 10.4% increase since fourth quarter 2015. 2 INFORMATIONAL MEMO Page 3 The portfolio will continue to be managed to take advantage of investment opportunities as they arise. RECOMMENDATION Presentation is for information only. ATTACHMENTS Cash and Investment Report Policy Compliance & Liquidity Analysis Cash and Investment Balances by Fund Treasury Rates and Yield Curves Amortization Schedule — MPD Operating Loan Amortization Schedule — MPD Capital Loan 3 El. CITY OF TUKWILA CASH & INVESTMENT REPORT June 30, 2017 Rating Purchase Maturity Agency/Issuer Moodys Investment Type Date Date CASH & CASH EQUIVALENTS UTGO 12/23/2010 US Bank Depository Various Washington State Treasurer LGIP Investment Pool Various Opus Bank Public Interest Various Checking Columbia Bank Money market Various (a) (c) (d) Term Par Book Yield to Annualized Yrs Value Balance Maturity Return lel $25,060,880 $25,060,880 (e) $ 38,983 (e) 0.45% (b) 18,107,164 18,107,164 (f)0.99% 105,406 (b) (b) 25,060,017 25,060,017 1.00% 60,017 (1) (b) 14,275,620 14,275,620 0.98% 56,311 (1) Total Cash & Cash Equivalents 82,503,681 82,503,681 0.72% 260,717 INVESTMENTS UTGO 12/23/2010 12/1/2020 8.9 1,135,000 1,142,290 4.55% 54,480 Certificates of Deposit Bank of Washington Certificate of Deposit 6/2/2017 6/2/2019 2.0 250,000 250,000 1,40% 1,010 (g) Sound Community Bank Certificate of Deposit 3/4/2017 3/4/2019 2.0 3,000,000 3,219,954 1.40% 18,051 (g) CERTIFICATES OF DEPOSIT -- TOTAL Taxable Refunding 6/14/2017 11/1/2019 2.0 3,250,000 3,469,954 1.40% 19,061 Agencies 64 3,670,000 3,732,351 4.13% 154,101 Farmer Mac US agency 1/23/2017 7/23/2019 2.5 1,000,000 1,000,000 1.40% 14,000 3132XONK3 FHLB US agency 1/30/2017 1/30/2019 2.0 1,000,000 1,000,000 1.29% 12,900 3130AAM54 Federal Farm Credit Bank US agency 3/20/2017 9/20/2017 0.5 2,000,000 2,000,000 1,45% 29,000 3133EHCX9 Federal Home Loan Mtg Corp US agency 1/12/2016 5/26/2017 1.4 MATURED 0 000% 7,500 3134G6R70 Federal Home Loan Mtg Corp US agency 5/25/2016 5/25/2018 2.0 1,000,000 1,001,227 082% 10,000 3134G9HC4 FHLB US agency 12/27/2016 12/27/2019 3.0 1,000,000 1,000,000 1.70% 61 17,000 3133EG2M6 Federal Farm Credit Bank US agency 1/19/2016 12/21/2018 2.9 1,000,000 1,001,073 1 .38 % in 13.750 3133EFSW8 TOTAL AGENCIES 1.9 71000,000 7,002,301 1.49% 104,150 Taxable Municipal Bonds City of Marysville, sinking Aa3 LTGO Refunding 11/23/2010 12/1/2017 5.5 150,000 159,190 3.37% 4,076 2014-2017, ave 5.5 years Skagit County BAB Aa3 1/12/2016 12/1/2017 0.4 365,000 370,449 2.85% 10,403 UW Biomedical Center Aal Revenue Bonds 12/14/2010 7/1/2017 6.6 500,000 501,829 405% 12,203 UW Biomedical Center Aal Revenue Bonds 12/14/2010 7/1/2019 8.6 500,000 500,517 4.70% 29,000 Douglas County, ESD, sinking Aal UTGO 12/23/2010 12/1/2020 8.9 1,135,000 1,142,290 4.55% 54,480 2018-2020, ave 9 yrs Port of Anacortes Al LTGO 12/17/2010 9/1/2020 9.7 340,000 334,969 5.00% 15,256 City of Auburn BABs BABs 6/14/2017 12/1/2019 2.5 300,000 320,520 1,65% 13,485 City of Seattle Taxable Refunding 6/14/2017 11/1/2019 24 380,000 402,587 1.45% 15,200 TOTAL MUNICIPAL BONDS 64 3,670,000 3,732,351 4.13% 154,101 Total Investments 3.0 13,920,000 14,204,606 1.10% 277,312 Interest earned from matured/called investments TOTAL CASH, CASH EQUIVALENTS & INVESTMENTS 0.4 $ 96,423.681 $ 96,708,286 1 0.78% 1 $ 538,029 m Current Portfolio (a) On calleable bonds, term is calculated to final maturity even though call date may occur first; term of liquid investments is one day, on sinking fund bonds, average maturity is used to calculate term. Percent of Cash &Investment Portfolio (b) No fixed maturity, funds are available within one day. Money (c) Yield to Maturity represents average rate for the year for various investment vehicles. (d) Annualized Return represents actual earnings for the fiscal year for bonds. (e) Represents eaming credit from US Bank. City earns interest up to the amount of fees. (f) Represents rate in effect for period ending this report. the annualized return above the current CD rates, the annualized return above the current CD rates. (h) Annualized Return represents actual earnings through current reporting period Opu 26% 19% Pat Is 5 CITY OF TUKWILA Policy Compliance & Liquidity Analysis CASH & INVESTMENT REPORT June 30, 2017 Liouidity Analvsis & Maturity Diversification Funds immediately available Fixed Maturity Investments, maturing in: 0-90 days after Report Date 91-180 days after Report Date 181-270 days after Report Date 271-360 days after Report Date Investments maturing in 1 year or less Investments maturing in 1-3 years Investments maturing in 3-5 years Investments maturing in 5-7 years Investments maturing in 7-10 years Investments maturing in more than 1 year and less than 10 years. As of Report Date Available Available Available in Portfolio Within 1 Year Within 5 5 - 10 Years Amount Years $ 82,503,681 $ 82,503,681 2,501,829 529,639 1,001,227 4,032,695 4,032,695 8,694,651 1,477,259 10,171,911 $ 82,503,681 4,032,695 8,694,651 1,477,259 TOTALS $ 96,708,286 $ 86,536,376 $ 96,708,286 $ 89% 100% 0% Liauiditv Requirements and Funds Available for Investina: Funds immediately available $ 82,503,681 Restrictions & designations: Operating liquidity (a) 14,000,000 Liquidity threshold 14,000,000 Funds available for longer term investing $ 68,503,681 (a) Represents largest one month decline in portfolio balance over the most recent 36 month period doubled; or the equivalent of a 100% cushion. Portfolio POLICY Policy Financial Institution Diversification Amount % of Total MAXIMUM Met? US Bank $ 25,060,880 25.9% 50.0% Yes Washington State Treasurer 18,107,164 18.7% 75.0% Yes Opus Bank 25,060,017 25.9% 50.0% Yes Bank of Washington 250,000 0.3% 50.0% Yes Columbia Bank 14,275,620 14.8% 50.0% Yes Sound Community Bank 3,219,954 3.3% 50.0% Yes Other financial institutions 10,734,651 11.1% 50.0% Yes Total $ 96,708,286 100.0% Portfolio POLICY Policy Investment Mix Amount % of Total MAXIMUM Met? Depository 25,060,880 25.9% insured by PDPC Yes State Investment Pool 18,107,164 18.7% 75.0% Yes Money market 39,335,637 40.7% insured by PDPC Yes Certificate of Deposit 3,469,954 3.6% insured by PDPC Yes US Agency 7,002,301 7.2% 75.0% Yes Municipal Bonds 3,732,351 3.9% no limit specified in policy Yes Total 96, 708, 286 100.0% Weighted Average Maturites: Years Performance Analysis Certificates of deposit 2.0 Current portfolio yield 0.78% Benchmarks: Municipal bonds 6.4 6 month treasury 1.14% Total Investments 3.0 2 year treasury 1.38% Total Portfolio F 0.4 Local Govt Invst Pool (00.99% POLICY MAXIMUM 3.5 Policy Met? Yes Note: Cash and cash equivalents are available within one day and are factored into the Total Portfolio weighted average maturity. i CITY OF TUKWILA Cash & Investment Balances By Fund and Fund Group CASH & INVESTMENT REPORT June 30, 2017 General 000 GENERAL 10,780,496 $ 8,915,911 $ 8,211,831 $ 6,987,822 $ 4,149,258 General Total _ 10,780,496 8,915,911 8,211,831 6,987,822 4,149,258 Special Revenue 101 HOTEL/MOTEL TAX 1,049,773 797,137 378,109 495,322 660,126 105 CONTINGENCY 6,066,203 5,602,503 5,777,260 5,763,258 1,461,857 107 FIRE EQUIP. CUM. RESERVE - - - - 945,694 109 DRUG SEIZURE FUND 461,923 20,265 48,952 68,308 146,312 Special Revenue Total 7,577,899 6,419,905 6,204,321 6,326,889 3,213,989 Debt Service 200 DEBT SERVICE 545,452 447,966 208,614 - - 206 L.I. GUARANTEE 669,152 669,149 669,147 669,147 208 LIMITED TAX G.O. BONDS 2000 - - - - - 209 LIMITED TAX G.O. BONDS 2003 - 1 1 1 3,020,451 210 LIMITED TAX G.O. REFUNDING 2003 195 195 195 244,320 247 211 LIMITED TAX G.O. REFUNDING 2008 340,416 327,916 315,416 406,416 218 212 LTGO SCORE BONDS 2 2 2 291,688 1,390 213 UNLIMITED TAX G.O. BONDS 2016 713,189 - - - - 214 LTGO 2010 SERIES A 234,312 231,339 192,676 296,039 108,557 215 LTGO 2010 SERIES B - - - - 4,612 216 VALLEY COM REFUNDING BONDS 2010 794 794 115,194 106,434 12,954 217 LIMITED TAX GO BONDS REFUNDING 218,039 210,539 203,039 274,214 1 218 LTGO 2013 - - - - - 233 LID #33 36,831 114,349 120,971 81,316 - Debt Service Total _ 2,758,382 2,002,250 1,825,256 2,369,574 3,148,430 Capital Project 103 STREET 481,977 704,929 1,022,252 1,450,893 1,051,963 104 ARTERIAL STREET 4,268,716 5,380,807 7,338,446 1,582,095 911,325 301 LAND ACQ, REC & PARK DEVLPMNT 3,379,956 2,421,570 1,565,474 1,236,430 1,099,701 302 FACILITY REPLACEMENT 410,499 829,711 1,432,223 1,904,720 2,088,543 303 GENERAL GOVERNMNT IMPROVEMENTS 301,481 378,110 453,915 570,592 637,101 304 FIRE IMPACT FEES 962,688 613,058 520,962 454,321 402,514 305 PUBLIC SAFETY PLAN -VOTED DEBT 36,462,547 - - - - 306 CITY FACILITIES (79,210) - - - CapitalProjectTotal 46,188,655 10,328,186 12,333,271 7,199,051 6,191,148 Enterprise 400 UTILITY ON ACCT (overpayments) 20,402 33,541 17,544 22,106 27,857 401 WATER 5,853,362 5,928,220 5,007,023 5,376,215 5,655,077 402 SEWER 7,592,668 6,631,035 5,386,807 3,335,265 2,316,037 404 WATER/SEWER REVENUE BONDS - - - - - 405 BOND RESERVE - - - - - 411 FOSTER GOLF COURSE 604,660 788,121 785,170 622,681 458,643 412 SURFACE WATER 4,163,760 2,396,149 1,399,569 2,361,899 2,985,279 Enterprise Total 18,234,852 15,777,068 12,596,113 11,718,166 11,442,893 Internal Service 501 EQUIPMENT RENTAL 5,113,963 5,321,862 4,627,495 4,650,880 4,474,197 502 INSURANCE 3,380,608 3,183,595 4,418,574 5,238,745 6,239,565 503 INSURANCE - LEOFF 1 1,020,548 984,062 856,012 735,138 1,666,674 Internal Service Total 9,515,118 9,489,519 9,902,081 10,624,763 12,380,436 Grand Total � 95,055,403 52,932;838 5;072,873 45,226,266 40526,154 Fund¢ not inrh irjad in the.C;rand Tntnl are the fiduciarv+funds However. these balances ($1:652.883) are included in the investment balances. 7 CITY OF TUKWILA Treasury Rates and Yield Curves CASH & INVESTMENT REPORT June 30, 2017 Rates at June 30, 2017 3mo 1.03% 6mo 1.14% 1 Yr 1.24% 2Yr 1.38% 3Yr 1.55% 5Yr 1.89% 10Yr 2.31% 30Yr 2.84% Source: US Department of the Treasury 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% LZI Rates at June 30, 2016 Rate % Change Change E 0.77% 75% 3mo 0.26% 0.78% 68% 6mo 0.36% 0.79% 64% 1Yr 0.45% 0.80% 58% 2Yr 0.58% 0.84% 54% 3Yr 0.71% 0.88% 47% 5Yr 1.01% 0.82% 35% 10Yr 1.49% 0.54% 19% 30Yr 2.30% Comparison of Treasury Rates 3 mo 6mo 1 yr 2 yr 3 yr 5 yr 10 yr 30 yr 6/30/2017 6/30/2016 9 MPD Operating Loan - through end of 2016 only Period Accumulated Interest (Date) Beg Bal Funding Payments Interest End Bal Interest Principal Pmt Pmt 10/1/2011 $ - $ 191,294 $ $ 319 $ 191,613 $ 319 11/1/2011 191,612.82 - 319.35 191,932.18 638.18 12/1/2011 191,932.18 319.89 192,252.07 958.07 1/1/2012 192, 252.07 320.42 192, 572.49 1,278.49 2/1/2012 192, 572.49 320.95 192,893.44 1,599.44 3/1/2012 192,893.44 - 321.49 193,214.93 1,920.93 4/1/2012 193,214.93 225,000.00 697.02 418,911.95 2,617.95 5/1/2012 418,911.95 - 698.19 419,610.14 3,316.14 6/1/2012 419,610.14 699.35 420,309.49 4,015.49 7/1/2012 420,309.49 700.52 421,010.01 4,716.01 8/1/2012 421,010.01 701.68 421,711.69 5,417.69 9/1/2012 421,711.69 - 702.85 422,414.54 6,120.54 10/1/2012 422,414.54 433,706.00 1,426.87 857,547.41 7,547.41 11/1/2012 857,547.41 - 1,429.25 858,976.66 8,976.66 1 12/1/2012 858,976.66 - 1,431.63 860,408.28 10,408.28 1/1/2013 860,408.28 250,000.00 1,850.68 1,112,258.96 12,258.96 2/1/2013 1,112,258.96 - 1,853.76 1,114,112.73 14,112.73 3/1/2013 1,114,112.73 1,856.85 1,115,969.58 15, 969.58 4/1/2013 1,115,969.58 1,859.95 1,117,829.53 17, 829.53 5/1/2013 1,117, 829.53 19,692.58 1,863.05 1,100,000.00 19, 692.58 19,692.58 6/1/2013 1,100,000.00 10,121.48 1,833.33 1,091,711.85 21,525.91 8,288.15 1,833.33 7/1/2013 1,091,711.85 10,121.48 1,819.52 1,083,409.89 23,345.43 8,301.96 1,819.52 8/1/2013 1,083,409.89 10,121.48 1,805.68 1,075,094.10 25,151.12 8,315.80 1,805.68 9/1/2013 1,075,094.10 10,121.48 1,791.82 1,066,764.44 26,942.94 8,329.66 1,791.82 10/1/2013 1,066,764.44 10,121.48 1,777.94 1,058,420.90 28,720.88 8,343.54 1,777.94 11/1/2013 1,058,420.90 10,121.48 1,764.03 1,050,063.46 30,484.92 8,357.45 1,764.03 Prior 12/1/2013 1,050,063.46 10,121.48 1,750.11 1,041,692.08 32,235.02 8,371.37 1,750.11 1/1/2014 1,041,692.08 10,121.48 1,736.15 1,033,306.76 33,971.18 8,385.33 1,736.15 2/1/2014 1,033,306.76 10,121.48 1,722.18 1,024,907.45 35,693.35 8,399.30 1,722.18 3/1/2014 1,024,907.45 10,121.48 1,708.18 1,016,494.15 37,401.53 8,413.30 1,708.18 4/1/2014 1,016,494.15 10,121.48 1,694.16 1,008,066.83 39,095.69 8,427.32 1,694.16 5/1/2014 1,008,066.83 10,121.48 1,680.11 999,625.46 40,775.80 8,441.37 1,680.11 6/1/2014 999,625.46 10,121.48 1,666.04 991,170.02 42,441.84 8,455.44 1,666.04 7/1/2014 991,170.02 10,121.48 1,651.95 982,700.49 44,093.79 8,469.53 1,651.95 8/1/2014 982,700.49 10,121.48 1,637.83 974,216.85 45,731.63 8,483.65 1,637.83 9/1/2014 974,216.85 10,121.48 1,623.69 965,719.06 47,355.32 8,497.79 1,623.69 10/1/2014 965,719.06 10,121.48 1,609.53 957,207.11 48,964.85 8,511.95 1,609.53 11/1/2014 957,207.11 10,121.48 1,595.35 948,680.98 50,560.20 8,526.13 1,595.35 12/1/2014 948,680.98 10,121.48 1,581.13 940,140.63 52,141.33 8,540.34 1,581.14 1/1/2015 940,140.63 10,121.48 1,566.90 931,586.06 53,708.24 8,554.58 1,566.90 2/1/2015 931,586.06 10,121.48 1,552.64 923,017.22 55,260.88 8,568.84 1,552.64 3/1/2015 923,017.22 10,121.48 1,538.36 914,434.10 56,799.24 8,583.12 1,538.36 4/1/2015 914,434.10 10,121.48 1,524.06 905,836.68 58,323.30 8,597.42 1,524.06 5/1/2015 905,836.68 10,121.48 1,509.73 897,224.93 59,833.03 8,611.75 1,509.73 6/1/2015 897,224.93 10,121.48 1,495.37 888,598.82 61,328.40 8,626.11 1,495.37 7/1/2015 888,598.82 10,121.48 1,481.00 879,958.34 62,809.40 8,640.48 1,481.00 8/1/2015 879,958.34 10,121.48 1,466.60 871,303.46 64,276.00 8,654.88 1,466.60 9/1/2015 871,303.46 10,121.48 1,452.17 862,634.15 65,728.17 8,669.31 1,452.17 10/1/2015 862,634.15 10,121.48 1,437.72 853,950.39 67,165.89 8,683.76 1,437.72 11/1/2015 853,950.39 10,121.48 1,423.25 845,252.16 68,589.14 8,698.23 1,423.25 12/1/2015 845,252.16 10,121.48 1,408.75 836,539.44 69,997.90 8,712.73 1,408.75 1/1/2016 836,539.44 10,121.48 1,394.23 827,812.19 71,392.13 8,727.25 1,394.23 2/1/2016 827,812.19 10,121.48 1,379.69 819,070.40 72,771.82 8,741.79 1,379.69 3/1/2016 819,070.40 10,121.48 1,365.12 810,314.03 74,136.93 8,756.36 1,365.12 4/1/2016 810,314.03 10,121.48 1,350.52 801,543.08 75,487.46 8,770.96 1,350.52 5/1/2016 801,543.08 10,121.48 1,335.91 792,757.50 76,823.36 8,785.57 1,335.91 6/1/2016 792,757.50 10,121.48 1,321.26 783,957.28 78,144.62 8,800.22 1,321.26 7/1/2016 783,957.28 10,121.48 1,306.60 775,142.40 79,451.22 8,814.88 1,306.60 8/1/2016 775,142.40 10,121.48 1,291.90 766,312.82 80,743.12 8,829.58 1,291.90 9/1/2016 766,312.82 10,121.48 1,277.19 757,468.53 82,020.31 8,844.29 1,277.19 10/1/2016 757,468.53 10,121.48 1,262.45 748,609.50 83,282.76 8,859.03 1,262.45 11/1/2016 748,609.50 10,121.48 1,247.68 739,735.70 84,530.44 8,873.80 1,247.68 1,23_2._89 7_30,847.11_ _85,763.33_ _ 8,888.59_ _1,2_32.89 — _12/1/2016_ 1/1/2017 _739,73_5.70 730,847.11 _ _ _-_ _10,121.48_ 10,121.48 1,21808 _ 721,943.71 86,981.41 8,903.40 1,218.08 2/1/2017 721,943.71 10,121.48 1,203.24 713,025.47 88,184.65 8,918.24 1,203.24 3/1/2017 713,025.47 10,121.48 1,188.38 704,092.37 89,373.03 8,933.10 1,188.38 4/1/2017 704,092.37 10,121.48 1,173.49 695,144.38 90,546.52 8,947.99 1,173.49 5/1/2017 695,144.38 10,121.48 1,158.57 686,181.47 91,705.09 8,962.91 1,158.57 6/1/2017 686,181.47 10,121.48 1,143.64 677,203.63 92,848.73 8,977.84 1,143.64 urrent 7/1/2017 677,203.63 10,121.48 1,128.67 668,210.82 93,977.40 8,992.81 1,128.67 8/1/2017 668,210.82 10,121.48 1,113.68 659,203.02 95,091.08 9,007.80 1,113.68 9/1/2017 659,203.02 10,121.48 1,098.67 650,180.21 96,189.75 9,022.81 1,098.67 10/1/2017 650,180.21 10,121.48 1,083.63 641,142.37 97,273.39 9,037.85 1,083.63 11/1/2017 641,142.37 10,121.48 1,068.57 632,089.46 98,341.96 9,052.91 1,068.57 12/1/2017 632,089.46 10,121.48 1,053.48 623,021.46 99,395.44 9,068.00 1,053.48 9 Capital Loan to MPD Repayment Schedule MPD Capital Loan PAYMENT BEGINNING PRINCIPAL INTEREST INTEREST DUE DATE BALANCE PAYMENT RATE PAYMENT ENDING 2/1/2013 I Amount loaned to the MPD 1,000,000.00 6/1/2013 1,000,000.00 (50,731.67) 0.02 (5,833.33) 949,268.33 12/1/2013 949,268.33 (48,258.90) 0.02 (8,306.10) 901,009.43 6/1/2014 901,009.43 (48,681.17) 0.02 (7,883.83) 852,328.26 12/1/2014 852,328.26 (49,107.13) 0.02 (7,457.87) 803,221.13 6/1/2015 803,221.13 (49,536.82) 0.02 (7,028.18) 753,684.31 12/1/2015 753,684.31 (49,970.26) 0.02 (6,594.74) 703,714.05 6/1/2016 703,714.05 (46,537.07) 0.03 (10,027.93) 657,176.98 1_2/1/2016_ 657,176.98_ (47,200.23) 0.03_ (9,36_4_.77)_ 60_9,976.75 _ 6/1/2017 _ 609,976.75 _ (47,872.83) _ _ _ 0.03 _ _ (8,69217) _ _ 562,103.92 12/1/2017 562,103.92 (48,555.02) 0.03 (8,009.98) 513,548.90 6/1/2018 513,548.90 (49,246.93) 0.03 (7,318.07) 464,301.97 12/1/2018 464,301.97 (49,948.70) 0.03 (6,616.30) 414,353.27 6/1/2019 414,353.27 (48,277.93) 0.04 (8,287.07) 366,075.34 12/1/2019 366,075.34 (49,243.49) 0.04 (7,321.51) 316,831.85 6/1/2020 316,831.85 (50,228.36) 0.04 (6,336.64) 266,603.49 12/1/2020 266,603.49 (51,232.93) 0.04 (5,332.07) 215,370.56 6/1/2021 215,370.56 (52,257.59) 0.04 (4,307.41) 163,112.97 12/1/2021 163,112.97 (53,302.74) 0.04 (3,262.26) 109,810.23 6/1/2022 109,810.23 (54,368.80) 0.04 (2,196.20) 55,441.43 12/1/2022 55,441.43 (55,441.43) 0.04 (1,108.83) 0.00 (131,285.26) T' Current City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Councilmembers CC: Mayor Ekberg FROM: Peggy McCarthy, Finance Director BY: Craig Zellerhoff, Fiscal Coordinator DATE: September 11, 2017 SUBJECT: 2017 July Year to Date Financial Update Summary The purpose of the 2017 Financial report is to summarize for the City Council the general state of Departmental expenditures and to highlight significant items or trends. The following provides a high-level summary of the Departmental financial performance. The 2017 July YTD report is based on financial data available as of September 11th, 2017, for the reporting period ending July 31st, 2017. Additional details can be found within the attached financial report. Allocated budgets through the reporting period are calculated by analyzing spend patterns in the previous year and allocating the current year budget using the same spend pattern. If a line item had no expenditures in the prior year but a budget in the current year, the allocated budget for the current year would be zero. Departmental Expenditures General fund expenditures totaled $33.4 million as compared to the allocated budget of $36.0 million, which is $2.6 million below budget. Notable variances are as follows: • While the fire department is below the allocated budget by $66 thousand, salaries and benefits exceed budget by $151 thousand. This is attributed to the staffing of the unbudgeted pipeline positions (5 vs 3 in 2016) to maintain minimum staffing levels and backfill for retirements. Overtime is now below allocated budget by $50 thousand, however, spending is $34 thousand greater than 2016 through the same period. Additionally, labor contracts have not yet been settled. While the budget includes a cost - of -living adjustment of 2%, actuals do not reflect contract settlement terms. • Park department exceeded budget by $107 thousand. This is a result of the department being fully staffed in 2017 compared to 2016. The department also incurred a higher level of spending on supplies as they are being more proactive and intentional in the planning and preparation for busier summer months. A billing timing difference for surface water charges in July vs. August in the prior year has resulted in an additional expense of $60K for July. • Street department exceeded budget by $256 thousand. This is a result of a billing timing difference for surface water charges in July vs. August in the prior year. This has resulted in an additional expense of $415K for July. • Transfers from the general fund into capital projects funds through July have not been recorded. Rather than transferring funds automatically, we will be transferring funds into the capital projects funds as needed. 11 INFORMATIONAL MEMO Page 2 • Salaries and benefits are lower through July due to negotiations for the bargaining units. The following table estimates the additional general fund expenditure through July that could be recorded once contract agreements are approved. It should be noted that the budget reflects 2% COLA as a place - holder when the budget was drafted. Percent Increase Estimated Cost through July 2017 1.5% $285,000 2.0% $380,000 2.5% $475,000 • Rents and leases are below budget by $528 thousand. The primary reason is a timing difference in the way the allocated budget is calculated. A credit was applied in December of 2016 to true -up O&M as well as capital costs at the end of the year. It is anticipated that by the end of the year, rents and leases will be very close to budget rather than under budget. Year to Gate Department Expenditures Compared to Allocated Budget (Through July 2017) CityCouncil S198 $227 Mayor $2.076 S2,201 Human Resources $391 5435 Finance $1487 $ "i .694 Attorney$221 5362 $1 ,824 Recreation S1 846 $1,872 Coms unity Dev $2,100 Street Man A h Ops ENNNNEEM $2.032 $1.777 $1,518 C`eri 20 $2.848 SO S1 001-1 S2 u;0 53 000 ;;4 DOC, 5 000 Y, 0(. > S7 0((l 4;5.000 4 9 000 SIG 300 Sil ,000 S 12 XG Tbousands Year to Date ■A' ocateci Budget 12 INFORMATIONAL MEMO Page 3 GENERALFUND CITY OF TUKINILA GENERAL FUND EXPENDITURES YTD AS OF J ULY 31, 2017 9/11/2017 11:32 Percent of year completed 58,33% 13 BUDGET ACTUAL COMPARISON OF RESULTS SUMMARY OF EXPENDITURES BY ACTUAL DEPARTMENT 2017 OVERfUNDEW ALLOCATED % CIA NGE 2017 ANNUAL ALLOCATED 2015 2016 2017 MGT %SPENT 2016/2016 2016/2017 01 City Council 366,016 227,361 186,835 197,384 197,584 (29,778) 54% 6% 0% 03 Mayor 4,079,582 2,200,531 1,838,897 2,135,697 2,076,297 (124,234) 51% 16% (3)% 04 Human Resources 706,208 435,377 358,445 392,824 391,059 (44,319) 55% 10% (0)% 05 Finance 2,638,813 11694,498 1,633,438 11406,494 1,487,444 (207,054) 56% (14)% 6% 06 Attorney 716,955 361,708 306,196 267,789 220,974 (140,735) 31% (13)% (17)% 07 Recreation 31384,688 1,845,734 1,675,540 1,734,835 1,824,121 (21,613) 54% 4% 5% 08 Community Development 3,693,338 2,100,327 1,632,047 1,842,790 1,872,490 (227,837) 51% 13% 2% 09 Municipal Court 1,307,808 743,324 638,840 667,201 702,376 (40,948) 54% 4% 5% 10 Police 18,288,092 10,930,784 9,917,997 10,470,593 10,397,450 (533,334) 57% 6% (1)% 11 Fire 11,862,568 6,904,214 6,752,424 6,628,627 6,838,622 (65,592) 58% (2)% 3% 12 Technology& Innovation Svcs 2,026,820 1,029264 593,703 676,328 953,536 (75,729) 47% 14% 41% 13 Public Works 3,802,639 2,191,494 1,944,930 2,135,752 2,056,631 (134,863) 54% 10% (4)% 15 Park Maintenance 1,418,760 747,867 722,716 698,646 854,369 106,502 60% (3)% 22% 16 Street Maintenance 8Operations 3,109,592 1,776,843 1,414,877 1,662,503 2,032,463 255,620 65% 18% 22% 20 Dept 20 5,237,691 2,848,136 2,504,923 2,588,114 1,518,002 (1,330,134) 29% 3% (41)% Total Expenditures 62,639,570 36,037,464 1 32,121,809 33,505,577 33,423,417 (2,614,047) 53% 4% (0)% Percent of year completed 58,33% 13 INFORMATIONAL MEMO Page 4 GENERAL FUND CITY OF TUKW ILA GENERAL FUND EXPENDITURES YTD AS OFJULY 31, 2017 9/11/201711:32 Percent of year completed 58,33% BUDGET ACTUAL COMPARISON OF RESULTS SUMMARY OF SALARIES AND ACTUAL BENEFITS 2017 OVA %CHANGE ALLOCATED 2017 ANNUAL ALLOCATED 2015 2016 2017 BDGT %SPENT 2016/2016 2016/2017 11 Salaries 27,560,991 16,113,468 14,859,949 15,379,556 15,604,254 (509,214) 57% 3% 1% 12 Extra Labor 777,897 402,762 340,893 384,131 384,589 (18,173) 49% 13% 0% 13 Overtime 1,632,035 949,553 1,040,968 832,880 952,697 3,143 58% (20)% 14% 15 Holiday Pay 525,583 77,373 41767 79,341 77,807 434 15% 1564% (2)% 21 FICA 11809,260 1,063,835 966,800 1,000,601 1,027,724 (36,111) 57% 3% 3% 22 Pension-LEOFF2 849,253 473,932 456,261 463,873 472,108 (1,823) 56% 2% 2% 23 Pens ion-PERS/PSER S 1,580,986 924,752 661,037 806,915 849,675 (75,077) 54% 22% 5% 24 Industrial Insurance 864,098 465,058 330,940 373,009 355,971 (109,086) 41% 13% (5)% 25 Medical & Dental 5,903,094 3,461,927 3,059,442 3,280,509 3,272,682 (189,245) 55% 7% (0)% 26 Unemployment 13,000 (31385) 1,285 19,276 (663) 2,722 (5)% 1400% (103)% 28 Uniform/Clothing 1 10,460 2,965 1,777 1,731 1,403 (1,562) 13% (3)% (19)% Total Salaries and Benefits 41,526,657 23,932,239 21,724,120 22,621,822 22,998,246 (933,993) 55% 4% 2% Percent of year completed 58,33% Percent of year completed 58.33% 14 BUDGET ACTUAL COMPARISON OF RESULTS SUMMARY OF SUPPLIES, ACTUAL SERVICES, AND CAPITAL OVER/ UN % CHANGE 2017 ALLOCATED 2017 ANNUAL ALLOCATED 2016 2016 2017 BDGT %SPENT 2016/2016 2016/2017 Transfers 5,237,691 2,848,136 2,504,923 2,588,114 1,518,002 (1,330,134) 29% 3% (41)% 31 Supplies 1,164,823 706,141 658,527 639,811 664,477 (41,664) 57% (3)% 4% 34 Item s P urchas ed for res ale 22,000 15,372 16,901 15,400 15,307 (65) 70% (9)% (1)% 35 Small Tools 99,818 53,813 189,054 35,853 63,123 9,310 63% (81)% 76% 41 Professional SeMces 3,266,711 1,474,569 1,228,111 1,297,631 11324,766 (149,804) 41% 6% 2% 42 Communication 449,970 283,130 190,047 187,066 203,921 (79,208) 45% (2)% 9% 43 Travel 192,380 123,058 77,824 84,227 119,783 (3,275) 62% 8% 42% 44 Advertising 51,500 24,404 17,156 14,002 11,509 (12,896) 22% (18)% (18)% 45 Rentals and Leases 2,314,372 1,782,696 1,533,177 1,524,344 1,254,991 (527,705) 54% (1)% (18)% 46 Insurance 886,895 886,895 785,581 810,799 887,617 722 100% 3% 9% 47 Public Utilities 1,893,570 933,739 773,036 906,417 1,466,542 532,802 77% 17% 62% 48 Repairs and Maintenance 732,613 373,672 370,968 347,790 284,741 (88,930) 39% (6)% (18)% 49 Miscellaneous 1,562,773 870,999 657,791 593,524 643,806 (227,192) 41% (10)% 8% 51 Inter -Governmental 3,003,792 1,707,616 1,374,441 1,470,091 1,796,460 88,844 60% 7% 22% 53 Ext Taxes,Oper.Assess 5 - 34 549 146 146 2921% 1529% (73)% 64 Machinery&Equipment 234,000 20,983 20,120 368,336 169,979 148,996 73% 1731% (54)% Total Supplies, Services, and Capital 21,112,913 12,105,225 10,397,689 10,883,953 10,425,171 (1,680,054) 49% 6% (4) Percent of year completed 58.33% 14 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Council Committee FROM: Peggy McCarthy, Finance Director and Jay C Wittwer, Fire Chief BY: Vicky Carlsen, Deputy Finance Director CC: Mayor Ekberg DATE: September 13, 2017 SUBJECT: Fire Department Budget Update ISSUE The Fire Department is currently projected to exceed the 2017 adopted budget largely due to additional pipeline positions authorized by the Council in late 2016 and fewer than anticipated retirements in 2017. BACKGROUND Pipeline Positions Pipeline positions were introduced to the Fire Department in February of 2014. City Council approved up to three pipeline positions in 2014 and an additional two pipeline positions in June of 2016 in anticipation of future retirements. Pipeline positions are unbudgeted and were created to save overtime costs associated with retirements. When a Firefighter retires, it takes six to nine months to hire a Firefighter and have them complete the training academy. The intent of the pipeline positions is to have staff ready to move into the vacated position, thereby eliminating the need to fill the position with overtime. The City has experienced overtime savings due to the pipeline positions; however, the savings were not as much as expected. Pipeline positions that are not filling vacated positions provide an additional cushion between total staffing per shift and minimum staffing of 13. Fire Department Retirements The Fire department's staff enjoys a significant amount of longevity. There are currently 24 Fire personnel, or 22%, that are eligible to retire in three years or less. Retirements have been averaging three a year since 2012 (see Exhibit A). However, through the end of August, there has only been one retirement. When the authorized pipeline positions increased from three to five, it was anticipated that there would be at least three retirements in 2017 and pipeline positions would transfer into the vacated position. Preliminary Projection for Year -End In the first quarter financial report presented to Council, it was noted that the Fire Department, in total, exceeded budget by $51 thousand. The over budget situation was attributed to staffing of five pipeline positions that are unbudgeted and overtime exceeding budget by $2 thousand. 15 INFORMATIONAL MEMO Page 2 In the second quarter financial report presented to Council, it was noted that the Fire Department, in total, exceeded budget by $79 thousand. Staff is currently working to project how much the Fire Department will exceed authorized budget at year-end. We will return to the Committee in two weeks with the projections to show the anticipated additional budget needed for the Fire Department due to the unbudgeted pipeline positions. These will remain projections as there are unknown costs associated with labor contract settlements. In addition, there are likely to be additional expenditures associated with the deployments to assist hurricane affected areas. While these deployments are reimbursable, we do not expect to receive reimbursement until 2018, requiring a budget amendment for the expenditure authority this year. The Fire Department has been directed to minimize overtime as much as possible. Additional information regarding projected year-end as well as other options to address the Fire Department budget will be brought forward at the October 3, 2017 Finance Committee meeting as well as answers to questions that arise during the Committee discussion. RECOMMENDATION For information only. Additional information on the Fire Department budget will be presented to Finance Committee on October 3, 2017 ATTACHMENTS Exhibit A — Leave Payoff Hours and Terminations 16 W.12017 Info MemosTire Budget092017 9.13.17 VC RB.docx INFORMATIONAL MEMO Page 3 Exhibit A The red line indicates how many staff departures accured each year since 2006. The blue bar indicates the number of hours paid out at separation. Fire - Leave Payoff Hours with Terms 5,0CQ a,-000 3,ocr- 2"XIO 1 2008 I in 2 CW'15 2007 1 2008 2014 2015 2016 2017 5 4 I 0 K WA2017 Info MernosTire Budget092017 9.13.17 VC RB.docx 17 I in 2 009 1010 2011 2012 201 WMM1r-wePZqCff ----TernS 2014 2015 2016 2017 5 4 I 0 K WA2017 Info MernosTire Budget092017 9.13.17 VC RB.docx 17 im