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HomeMy WebLinkAboutFIN 2017-10-03 COMPLETE AGENDA PACKETCity of Tukwila Finance Committee O Verna Seal, Chair O Kathy Hougardy O Thomas McLeod AGENDA TUESDAY, OCTOBER 3, 2017 — 5:30 PM HAZELNUT CONFERENCE ROOM (At east entrance of City Hall) Distribution: V. Seal K. Hougardy T. McLeod D. Robertson Mayor Ekberg D. Cline C. O'Flaherty L. Humphrey Item Recommended Action Page 1. PRESENTATION(S) 2. BUSINESS AGENDA a. A resolution relating to accounts receivable write-offs. a. Forward to 10/16 Consent Pg.1 Vicky Carlsen, Deputy Finance Director Agenda. b. A resolution relating to unclaimed property. b. Forward to 10/16 Consent Pg.7 Vicky Carlsen, Deputy Finance Director Agenda. c. 2017 2nd Quarter sales and miscellaneous revenue report. c. Information only. Pg.13 Vicky Carlsen, Deputy Finance Director d. Discussion on Public Safety Plan financing process. d. Committee input. Pg.21 Rachel Bianchi, Communications and Government Relations Manager 3. ANNOUNCEMENTS 4. MISCELLANEOUS Next Scheduled Meeting: Tuesday, October 17, 2017 SThe City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206-433-1800 (TukwilaCityClerk©TukwilaWA.gov) for assistance. TO: FROM: BY: City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM Finance Committee Peggy McCarthy, Finance Director Laurie Anderson, Fiscal Specialist CC: Mayor Ekberg DATE: September 25, 2017 SUBJECT: Cancellation of Accounts Receivable ISSUE Each year a resolution comes before the Council for the cancellation of uncollectible accounts receivable. For 2017, these items include: False Alarms equaling $4,750.00, Miscellaneous Billings equaling $4,224.76 and returned checks equaling $ 30.49 for a grand total of $9005.25. BACKGROUND The process for tracking accounts receivable is quite thorough. The steps below are followed prior to preparation of the attached write-off resolution. • Invoice is sent to the recipient by the Finance Department payable in 30 days. • If payment is not received within 30 days, the receivable is forwarded to our collection agency, Armada Corp., and placed into pre -collect status. • At this time, Armada sends a Delinquency Notice to debtor notifying them of the past -due status of the receivable and asks them to contact the City to make payment. Payments can still be made directly to the City while in pre -collect status. • Once 30 days has passed in pre -collect status, the receivable then rolls over to active collections. At the onset of active collections, a letter is sent to the debtor notifying them of status change and advising that all payments must now be made through the collection agency. • When in active collections status, debtor is contacted both by phone and letter. A search is made for assets with which the debt could be satisfied. Once the debt has been in active collections for 45 days, it is then reported to the national credit bureaus. • The last process in the collections cycle is the pursuit of legal action. This includes attaching checking accounts, garnishments and lawsuits. • The City will not issue or renew a business license until all outstanding debt owed to the City is paid. • It should be noted that while a debt may be written off our books: it is still active in Armada's collection process. INFORMATIONAL MEMO Page 2 DISCUSSION The proposed amount of the 2017 Cancellation of Accounts Receivable of $9005.25 is $37,675.21 lower than last year's total of $46,680.46. This is attributable to three main factors: • This year we are only writing off one street department invoice in the amount of $498.15. Normally there are multiple street department invoices being written off with much higher dollar amounts. • We are still seeing the positive impact of not issuing or renewing a business license until all past -due debt has been paid to the City. • We are also still seeing a positive impact of having higher false alarm fees. While $25.00 and $50.00 fees were often ignored in the past, since the fees have gone up to $150.00 and $200.00, recipients are paying much more attention to the invoices we send them and timely payments have increased. FINANCIAL IMPACT The financial impact of cancelling $9005.25 will be to reduce our accounts receivable balance by this amount in keeping with Generally Accepted Accounting Principles (GAAP) for writing off bad debt. Please note that while we are writing off the accounts receivable for accounting purposes, the accounts are still being actively worked for collection purposes with the exception of those accounts where a responsible party cannot be identified. Accounts covered by bankruptcy law cannot be pursued. RECOMMENDATION The Council is being asked to approve the annual resolution authorizing the cancellation of Accounts Receivable and to forward this item to the Regular Meeting Consent Agenda of October 16, 2017. ATTACHMENTS Draft Resolution with Attachment A. 2 Z:\Council Agenda Items\Finance\10_3 Finance Committee \Info Memo 2017 AR Writeoffs.doc A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ORDERING THE CANCELLATION OF PAST DUE ACCOUNTS RECEIVABLE AND RETURNED CHECK WRITE-OFFS. WHEREAS, certain receivables and checks have been deemed uncollectible after efforts by both the City and a collection agency have been unsuccessful; and WHEREAS, the City will continue to pursue these receivables when practical; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Miscellaneous Accounts Receivable and Returned Checks. The total of $9,005.25 (per Attachment A) is deemed uncollectible. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2017. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Dennis Robertson, Council President APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Filed with the City Clerk: Passed by the City Council: Resolution Number: Attachment A — Past -Due Accounts Receivable and Returned Check Write-offs as of August 31, 2017 W:\Word Processing\Resolutions\Past Due Accts Recv & Write-offs 9-27-17 LA:bjs Page 1 of 1 3 4 Date 05/14/15 12/10/15 12/22/15 12/22/15 05/I4/15 05/14/15 12/22/15 11/25/15 12/08/15 12/10/15 12/10/15 12/22/15 12/22/15 12/22/15 12/22/15 12/31/15 12/31/15 03/01/16 03/01/16 04/04/16 04/04/16 06/22/15 06/22/15 06/22/15 06/22/15 Attachment A- Past Due Accounts Receivable and Returned Check Write-offi as of 8/31 /2017 Customer East African Bazaar Mini Mall East African Bazaar Mini Mall East African Bazaar Mini Mall East African Bazaar Mini Mall NW Asia Trading Co., LLC NW Asia Trading Co., LLC NW Asia Trading Co., LLC Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers Oriza Jewelers South General Store South General Store South General Store South General Store Total False Alarms Fund # Invoice/Ck # Amount For 000 PF -02742 $ 150.00 Police False Alarm 000 PF -02886 $ 200.00 Police False Alarm 000 PF -02930 $ 200.00 Police False Alarm 000 PF -02931 $ 200.00 Police False Alarm 000 PF -02750 $ 150.00 Police False Alarm 000 PF -02751 $ 200.00 Police False Alarm 000 PF -02954 $ 200.00 Police False Alarm 000 PF -02826 $ 150.00 Police False Alarm 000 PF -02865 $ 200.00 Police False Alarm 000 PF -02908 $ 200.00 Police Falx Alarm 000 PF -02909 $ 200.00 Police False Alarm 000 PF -02955 $ 200.00 Police False Alarm 000 PF -02956 $ 200.00 Police False Alarm 000 PF -02957 $ 200.00 Police False Alarm 000 PF -02958 $ 200.00 Police False Alarm 000 PF -03007 $ 200.00 Police False Alarm 000 PF -03008 $ 200.00 Police False Alarm 000 PF -03046 $ I50.00 Police Falx Alarm 000 PF -03047 $ 200.00 Police False Alarm 000 PF -03073 $ 200.00 Police False Alarm 000 PF -03074 $ 200.00 Police False Alarm 000 PF -02768 $ 150.00 Police False Alarm 000 PF -02769 $ 200.00 Police False Alarm 000 PF -02770 $ 200.00 Police False Alarm 000 PF -02771 $ 200.00 Police False Alarm S 4, 750.00 Notes Closed per Business Licensing -unable to locate responsible party Closed per Business Licensing -unable to locate responsible party Closed per Business Licensing -unable to locate responsible party Closed per Business Licensing -unable to locate responsible party To collections 8/19/15- business closed 04/09/15 To collections 8/19/15- business closed 04/09/15 To collections 8/19/15- business closed 03/21/16 "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed. unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collations "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections "Left Town" July 2016 -unlicensed, unresponsive, in collections Per collections -refuses to pay -unresponsive to letters and phone calls Per collections -refuses to pay -unresponsive to letters and phone calls Per collections -refuses to pay -unresponsive to letters and phone calls Per collections -refuses to pay -unresponsive to letters and phone calls Date 03/10/15 04/26/16 05/07/15 12/31/13 12/31/12 03/11/15 07/09/15 01/11/16 Customer Courtyard at So Station Apts. Courtyard at So Station Apts. East African Bazaar Fidelity National Title Hertz Equipment Rental Jacory Jiles Regalia Jewelers Regalia Jewelers Total Misc. Billings Date Customer 04/08/16 Richard Logo Total Returned Checks Write-off Grand Total iscellaneous Fund # Invoice/Ck # Amount 000 RF -01210 $ 110.00 000 RF -01330 $ 60.00 000 RF -01247 $ 60.00 640 MB -01454 $ 2,934.00 401 MB -01217 $ 417.61 000 MB -01768 $ 498.15 000 RF -01265 $ 60.00 000 RF -01292 $ 85.00 $ 4,224.76 For Fire Re -Inspection Fee Fire Re -Inspection Fee Fire Re -Inspection Fee Lien -Financial Assistance Agreement Water loss & damaged fire hydrant Provide traffic control for accident Fire Re -Inspection Fee Fire Re -Inspection Fce Fund # Invoice/Ck # 411 1169 Returned Amount $ 30.49 $ 30.49 $ 9,005.25 For Greens Fees & Candy Notes To collections 5/18/15- handled by Code Enforcement To collections 8/14/16- handled by Code Enforcement To collections 8/19/15- business dosed per licensing Too old for collections -unable to get response from prior customer To collections 5/23/12 but was working with cutomner to collect To collections 8/19/15- no insurance To collections 9/23/15- business closed 4/19/17 To collections 3/23/16- business closed 4/19/17 Notes Golf was working to collect funds -to collections 9/25/17. Writeoffs- Attachment A 8-31-17 9/26/2017 6 TO: City of Tukwila INFORMATIONAL MEMORANDUM Mayor Ekberg Finance & Safety Committee FROM: Vicky Carlsen, Deputy Finance Director BY: Cindy Wilkins — Fiscal Specialist DATE: October 3, 2017 SUBJECT: 2017 Reporting of Abandoned Property to the Washington State Department of Revenue Unclaimed Property Section Allan Ekberg, Mayor ISSUE Annual write-off of outstanding and unredeemed accounts payable and payroll claims. 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 unclaimed property except unclaimed restitution. Normal 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 For the 2017 unclaimed property report year, reporting of abandoned or unclaimed property totals $3,184.12 comprised of General Fund Accounts, Payable claims checks and a Court check. To the extent possible, those individuals and businesses with unclaimed accounts payable claims and payroll checks have been notified by the City through "good faith" effort of being mailed due diligence letters. These individuals and businesses have either not responded to the due diligence notifications and/or cannot be located in order to claim their property. One of the largest contributors to Unclaimed Property are juror reimbursement checks. To help reduce unclaimed property, a member from Finance is reimbursing jurors from a petty cash fund in the courtroom prior to the start of the trial. Checks are no longer being issued for reimbursement. RECOMMENDATION The Council is being asked to approve the Resolution declaring the cancellation of unclaimed General Fund accounts payable claims and consider these items on the Consent Agenda at the October 16, 2017 Regular Council Meeting. ATTACHMENTS Proposed Draft Resolution 2017 Unclaimed Property Summary Detail Report. 7 8 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 2017, 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, 2016; 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 checks as detailed on Attachment A, the 2017 Unclaimed Property Summary Detail Report. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2017. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Dennis Robertson, Council President APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Resolution Number: Rachel B. Turpin, City Attorney Attachment A: 2017 Unclaimed Property Summary Detail Report W:\Word Processing\Resolutions\Cancellation of outstanding claims and checks 9-14-17 CW:bjs Page 1 of 1 9 10 2017 REPORTED UNCLAIMED PROPERTY - ATTACHMENT A Reporting Period 7/1/2015-6/30/2016 Accounts Payable CHECK # CHECK DATE Vendor # VENDOR #/Vendor Description Account Number AMT PAID Letter Sent Response 370227 09/08/2015 016015 WENDY ANN NAIMAN Mixxed Fit/Instructor Fee 000.07.574.200.41.01 240.00 5/15/2017 No response. 369874 08/03/2015 001820 NOVA C PHUNG Interpreter Fee 000.09.512.500.41.03 110.00 5/15/2017 5/15/17 returned in mail w/forwarding address: 11818 78th Ave S, Seattle 98178-3816, re -mailed 369874 8/3/2015 001820 NOVA C PHUNG Interpreter Fee 000.09.512.500.41.03 110.00 5/15/2017 No response. 369874 8/3/2015 001820 NOVA C PHUNG Interpreter Fee 000.09.512.500.41.03 110.00 5/15/2017 No response. 371503 02/16/2016 005871 INTERCOM LANGUAGE SERVICES Interpreter Fee 000.09.512.500.41.03 30.00 5/15/2017 5/30/17 rec'vd signed affidavit. 369945 08/17/2015 016634 TIMOTHY L DAILEY, SR. Jury Fee 000.09.512.500.49.04 16.08 5/15/2017 No response. 369962 08/17/2015 016638 BABY MARIAN J HONDRADE Jury Fee 000.09.512.500.49.04 14.62 5/15/2017 No response. 370142 09/08/2015 016732 LESTER BOYER Juror Fee 000.09.512.500.49.04 14.96 5/15/2017 No response. 370150 09/08/2015 016728 SOKHANN CHUM Juror Fee 000.09.512.500.49.04 14.03 5/15/2017 5/15/17 returned in mail w/forwarding address: 13429 12th Ave S, Burien 98168-2808 370169 09/08/2015 016742 MARIANNE EDELHEIT Juror Fee 000.09.512.500.49.04 13.38 5/15/2017 No response. 370194 09/08/2015 016737 HODO HUSSEIN Juror Fee 000.09.512.500.49.04 16.40 5/15/2017 No response. 370229 09/08/2015 016740 JAMES NICHOLS Juror Fee 000.09.512.500.49.04 15.35 5/15/2017 No response. 370233 09/08/2015 016748 016748 JOSE OCHOA Juror Fee 000.09.512.500.49.04 13.67 5/15/2017 No response. 370269 09/08/2015 016733 016733 ARINESNE SMITH Juror Fee 000.09.512.500.49.04 14.31 5/15/2017 No response. 370301 09/21/2015 016792 016792 BALENTIN ANAYA Juror Fee 000.09.512.500.49.04 11.43 5/15/2017 5/19/17 returned in mail, no forwaeding address 370306 09/21/2015 016779 LIANA BEAL Juror Fee 000.09.512.500.49.04 15.00 5/15/2017 5/16/17 returned in mail w/forwarding address: 742 S 370312 09/21/2015 016795 FELIX CHAN Juror Fee 000.09.512.500.49.04 15.83 5/15/2017 No response. 370320 09/21/2015 016773 PATRICIA DENNIS Juror Fee 000.09.512.500.49.04 10.00 5/15/2017 No response. 370370 09/21/2015 016778 ALICIA QUARLES Juror Fee 000.09.512.500.49.04 15.57 5/15/2017 No response. 371064 12/21/2015 016952 ADAN MOHAMED Witness Fee 000.09.512.500.49.04 10.00 5/15/2017 No response. 371181 01/04/2016 014033 TERRY MILTON Witness Fee 000.09.512.500.49.04 10.00 5/15/2017 5/24/17 returned in mail, unable to forward 371235 01/19/2016 017016 KARMALITA BLACKLEY Witness Fee 000.09.512.500.49.04 10.00 5/15/2017 5/15/17 returned in mail w/new address 21719 229th AVE SE, Maple Valley 98038-8413, 5/16/17 re -mailed, 5/30 returned in mail 371787 03/21/2016 017102 KELSEY TAYLOR Witness Fee 000.09.512.500.49.04 10.00 5/15/2017 No response. 371990 05/02/2016 017206 BRETT DEAN Witness Fee 000.09.512.500.49.04 10.00 5/15/2017 No response. 370046 08/24/2015 016693 MALVIN AFAGA Youth Athletic Refund 000.347.600.04.00 20.00 5/15/2017 5/22/17 returned in mail, unable to forward 371090 12/21/2015 012199 REUNION GROUP INC Membership Fee 101.00.557.300.49.00 83.52 5/15/2017 5/26/17 returned in mail, unable to forward 371132 12/21/2015 002999 RICHARD WITTERS (ESTATE OF) 2015 Excess Retirement Benefits 611.00.522.200.29.00 2,051.97 5/15/2017 No response. 3,006.12 Payroll CHECK # CHECK DATE VENDOR Description Account Number AMT PAID Letter Sent Response 531477 10/05/15 Mosley, Angela Payroll (9/16/15 - 09/30/2015) 000.07.571.200.12.00 10.79 7/13/2017 No response. 531632 11/20/15 DiRiye, Halimo Payroll (11/01/2015 - 11/15/2015) 000.07.571.200.12.00 34.51 7/13/2017 No response. 532066 04/05/16 Tukwila's Children Foundation Employee Donation to Charity 000.08.558.600.11.00 10.00 7/13/2017 No response. 55.30 C CHECK # CHECK DATE VENDOR #Nendor Description Account Number AMT PAID Letter Sent Response 6/22/2015 Salmeron Cruz, Antonio Overpayment CR0052056 122.70 No response. 122.70 Total Outstanding: $3,184.12 12 TO: City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM Mayor Ekberg Finance Committee FROM: Peggy McCarthy, Finance Director BY: Lily Jue, Fiscal Coordinator DATE: October 3, 2017 SUBJECT: Sales Tax and Miscellaneous Revenue Report - 2nd Quarter 2017 in $1,000's Second quarter sales tax collections decreased by approximately $277K, or (6%) when compared with the same period in 2016. There was a decrease in construction sales tax of $45K over the same quarter last year, or down by 12% as well as a decrease in sales tax from other industries of $232K which fell by 5% as a result. 13 2016 Actual 2017 Actual YOY Change --Month -- Collect- ed Rec'd � i Other i Construe- ! Industries i tion Total ! Construe-! tion i ! Other ! ! Industries i Total Construction Amount % i Other Industries Amount ! Total ! % 1 Amount Jan Feb Mar Mar Apr May $ 99 1 97 1 105 i $ 1,190 1 1,231 1 1,413 i $ 1,289 1,328 1,518 $ 123 1 83 j 120 I $ 1,149 1 1,123 1 1,664 I $ 1,272 1,206 1,784 $ 24 (14) 15 24%i -14%i 14%1 $ (41) (108) 251 -3%1 $ (17) -9%i (122) 18%i 266 -1% -9% 18% Q-1 Totals $ 301 1 3,834 1 $ 4,135 $ 326 1 3,936 1 $ 4,262 $ 25 8%1 102 3%1 $ 127 3% Apr May Jun Jun Jul Aug 105 i 119 1 139 ! 1,336 i 1,361 1 1,553 ! 1,440 1,480 1,692 92 i 106 i 119 ! 1,316 i 1,315 i 1,387 ! 1,408 1,421 1,506 (13) (12) (20) -12%1 -10%i -14%1 (20) (46) (166) -1%i (33) -3%i (59) -11%! (185) -2% -4% -11% Q-2 Totals $ 362 ! 4,250 ! $ 4,612 $ 317 ! 4,018 ! $ 4,335 $ (45) -12%! (232) -5%! $ (277) -6% Jul Aug Sep Sep Oct Nov 109 ! 111 ! 115 i 1,428 ! 1,438 ! 1,444 i 1,537 1,549 1,559 - ! - ! - i - ! - ! ! - - - - - - ! ! - - - ! - ! - ! - Q-3 Totals $ 335 i 4,310 i $ 4,645 $ - ! i $ - $ - - - -$ - i - Oct Nov Dec Dec Jan Feb 143 1 126 1 118 ; i 1,263 ! 1,368 ! 1,852 i 1,406 1,494 1,970 - - '- -1 - i i - ; - - - - - - i ! i -- - - j - i - Q-4 Totals $ 386 1 4,484 i $ 4,870 $ - I I $ $ - - -I $ Totals $ 1,385 i 16,878 i $ 18,262 $ 643 i 7,954 i $ 8,597 $ (20) i (130) i $ (150) Second quarter sales tax collections decreased by approximately $277K, or (6%) when compared with the same period in 2016. There was a decrease in construction sales tax of $45K over the same quarter last year, or down by 12% as well as a decrease in sales tax from other industries of $232K which fell by 5% as a result. 13 INFORMATIONAL MEMO Page 2 Budget to Actual - Sales Tax in $1,000's Schedule I - Sales Tax Month -- Collect- ed Rec'd 2016 2017 Actual Allocated Budget Actual Amt Jan Mar Feb Apr Mar May $ 1,289 1,328 1,518 $ 1,366 $ 1,272 $ 1,407 1,206 $ 1,609 1,784 (94) -7% (201) -14% 175 11% 0-1 Totals $ 4,135 $ 4,382 $ 4,262 $ (120) -3% Apr Jun May Jul Jun Aug 1,440 1,480 1,692 $ 1,526 $ 1,568 $ 1,793 1,408 1,421 1,506 Q-2 Totals $ 4,612 $ 4,887 $ 4,335 (119) -8% (147) -9% (286) -16% �$ (552) -11% Jul Sep Aug Oct Sep Nov 1,537 1,549 1,559 $ 1,629 $ 1,642 $ 1,652 1,508 (121) -7% Q-3 Totals $ 4,645 $ 4,923 $ 1,508 $ (121) (0) Oct Dec Nov Jan Dec Feb 1,406 1,494 1,970 $ 1,490 $ 1,583 $ 2,089 Q-4 Totals $ 4,870 $ 5,162 $ Totals $ 18,262 $ 19,352 $ 10,105 $ (793) Actual revenue from sales tax collections received through the second quarter is less than anticipated by $672K, or a 7% variance from budgeted estimates. C:1Users\Vicky-C1AppDatalLocallMicrosoft\WindowsllNetCachelContent.Outlook\TBKDOZOR\Info Memo Sales Tax -2017-Q2 2017MEMO (Oct 2017).docx 14 INFORMATIONAL MEMO Page 3 Below is a graph of sales tax collections by type of industry showing annual change in revenue receipts from 2016 to 2017. $200,000 $150,000 $100,000 $50,000 Change YTD by Category* Miscellaneous $154,838 Automotive $44,353 Transportation/Warehousing $2,199 $(50,000) 5(100,000) $(150,000) 1 Construction $(20,152) Manufacturing $(46,295) Wholesale Trade $(120,240) Retail Trade $(118,772) Total Construction decreased by $20K, or (3%) for second quarter. Construction of Buildings had an increase in sales tax activity of $5K, or up by 1.4%, while the other two categories of Construction in the areas of Heavy & Civil Construction and Specialty Trade Contractors experienced a decrease in sales tax activity of $9K and $16K, or down by 28% and 6%, respectively. The decrease of $46K, or (33%) in the Manufacturing category is mostly attributable to a drop in sales tax activity for the Transportation Equipment Manufacturing area by $46K, or down by 72%. The continued overall decline of $120K, or (18%) in the Wholesale Trade category is due to decreases in sales activity in the area of Wholesale Durable Goods of $117K which is down by nearly 20% while the Automotive industry experienced an increase of $44K, or up by 13% due to increased sales tax activity in the area of Motor Vehicle & Parts Dealers. Total Retail Trade decreased by $119K, or fell by 3% due primarily to a decline in sales tax activity for Electronics & Appliances of $124K, or down by (20%). While the area of Nonstore Retailers experienced an increase in sales tax activity of $64K, or up by 91%, the areas of Sporting Goods/Hobby/Books and General Mdse Stores are down by $39K and $35K, or have decreased by 14% and 4%, respectively. The Services category which shows a decrease of $46K, or down by 2% is mostly attributable to a collective decline in sales tax activity in the areas of Information, Finance & Insurance, Real Estate/Rental/Leasing and Health Care Social Assistance by $167K, or a decrease of 17%. However, the areas of Professional/Scientific/Tech, Accommodation & Food Svcs and Other Svcs are showing collective increases of $109K, or up by 7%. The miscellaneous category remains favorable through second quarter due primarily to the annual use tax filings in the Nonclassifiable Establishments related to artwork from earlier in the year. C:IUsers\Vicky-C\AppDatalLocallMicrosoft\Windows\INetCachelContent.Outlook\TBKDOZORIInfo Memo Sales Tax -2017-Q2 2017MEMO (Oct 2017).docx 15 INFORMATIONAL MEMO Page 4 Schedule II shows current year-to-date sales tax collected from the top ten industry classifications. Food Services/Drinking Places in the NAICS 722 category has the highest year over year increase at $47,987 due to growth in overall gross sales over the same quarter previous year. This is followed by an increase of $44,107 in the category of Motor Vehicle & Parts Dealer, and then Building Material & Garden with an increase of $21,868 during the current quarter due to overall increases in reported sales tax activity. Schedule II YTD YTD Dollar Group Name Current Prior Diff. Diff. 452 General Merchandise Stores $ 943,609.29 $ 978,188.52 $ (34,579) -3.54% 448 Clothing and Accessories $ 913,601.82 $ 923,807.58 $ (10,206) -1.10% 722 Food Services, Drinking Places $ 910,340.96 $ 862,353.94 $ 47,987 5.56% 443 Electronics and Appliances $ 506,739.03 $ 630,697.67 $ (123,959) -19.65% 423 Wholesale Trade, Durable Goods $ 480,688.11 $ 598,104.16 $ (117,416) -19.63% 444 Building Material and Garden $ 384,083.89 $ 362,216.16 $ 21,868 6.04% 236 Construction of Buildings $ 378,877.13 $ 373,567.97 $ 5,309 1.42% 441 Motor Vehicle and Parts Dealer $ 349,359.80 $ 305,252.65 $ 44,107 14.45% 453 Miscellaneous Store Retailers $ 336,012.05 $ 332,519.06 $ 3,493 1.05% 721 Accommodation $ 312,583.07 $ 315,299.52 $ (2,716) -0.86% Schedule III shows the ten largest declines in sales tax revenue by dollar difference for industries collected year-to-date. While the NAICS category 443 for Electronics & Appliances experienced a current quarter decrease in sales tax collections of $124K, the NAICS category 531 for Real Estate experienced a 76% decrease in sales tax activity over the previous year. Schedule Ill Group 443 Electronics and Appliances $ 506,739.03 $ 630,697.67 $ (123,959) -19.65% 423 Wholesale Trade, Durable Goods $ 480,688.11 $ 598,104.16 $ (117,416) -19.63% 621 Ambulatory Health Care Service $ 51,442.05 $ 129,648.33 $ (78,206) -60.32% 336 Transportation Equipment Man $ 17,896.19 $ 63,921.91 $ (46,026) -72.00% 451 Sporting Goods, Hobby, Books $ 232,365.32 $ 271,253.69 $ (38,888) -14.34% 452 General Merchandise Stores $ 943,609.29 $ 978,188.52 $ (34,579) -3.54% 522 Credit Intermediation $ 37,559.55 $ 68,764.24 $ (31,205) -45.38% 531 Real Estate $ 5,893.68 $ 24,810.21 $ (18,917) -76.24% 517 Telecommunications $ 304,970.86 $ 323,088.57 $ (18,118) -5.61% 532 Rental and Leasing Services $ 286,514.76 $ 303,499.14 $ (16,984) -5.60% Name YTD Current YTD Prior Dollar Diff. Diff. C:1Users\Vicky-C1AppDatalLocallMicrosoftlWindowslINetCachelContent.OutIook1TBKDOZOR1Into Memo Sales Tax -2017-Q2 2017MEMO (Oct 2017).docx 16 INFORMATIONAL MEMO Page 5 The following charts show sales tax receipts the City collected from major industries from 2010 through second quarter of the current year. These categories include retail, services, wholesale, construction, and other consisting of manufacturing, transportation & warehousing, automotive, and miscellaneous. $2,600,000 $2,500,000 $2,400,000 $2,300,000 $2,200,000 $2,100,000 $2,000,000 $1,900,000 $1,800,000 $1,700,000 $1,600,000 $1,500,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 • 7010 • 1011 ▪ 201/ M ▪ 7010 1015 0 7016 Q1 Q2 Q3 Q4 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 01 $450,000 $400,000 $350,000 $300,000---_--.- $250,000 .�, _..:r___. $200,000 $150,000 $100,000 $50,000 Q2 Q3 Construction Q4 01011 /011 I ,013 • 1016 7017 Other -Mfg. Trnsp/Wrhsng, Automotive, & Misc. $600,000 $500,000 '^ $400,000 $300,000 $200,000 -{ 1111010 41011 0 7037 112033 as 1014 .1016 $100,000 $- Q1 Q2 03 Q4 C:\Users\Vicky-C\AppDatalLocal\Microsoft\WindowsllNetCache\Content.Outlook\TBKDOZOR\Info Memo Sales Tax -2017-Q2 2017MEMO (Oct 2017).docx 17 INFORMATIONAL MEMO Page 6 Below is Schedule IV which shows quarterly gambling tax earned in 2017 compared to 2016. Schedule IV - Gambling Tax (a) (d) 2017 Quarter 2016 2017 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount Q1 $ 950,379 $ 977,003 $ 989,745 Q2 867,047 983,322 902,961 Q3 927,316 965,727 Q4 934,269 972,968 $ 26,624 116,276 3% $ (12,742) 13% 80,361 -1% 9% Totals $ 3,679,011 $1,960,325 $ 3,831,400 $ 142,899 67,619 - Gambling tax revenue for second quarter 2017 came in above the previous year by $80K, or up by 13%. As a result, overall year-to-date gambling tax revenue is up by a total of $143K, or has increased nearly 8% when compared with 2016 and has exceeded year-to-date allocated budget by nearly $70K, or up by approximately 4%. Casinos within the City continue to do well. Schedule V shows monthly admissions tax receipts for the prior year and current year to date. Schedule V - Admissions Tax (b) (d) 2017 Quarter 2016 2017 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount Q1 $ 161,269 $ 166,003 $ 178,187 02 156,588 157,574 173,014 Q3 157,862 174,422 Q4 157,821 174,377 Totals $ 633,540 $ 323,577 $ 700,000 $ 4,734 3% $ (12,183) -7% 986 1% (15,441) -9% $ 5,720 - $ (27, 624) While second quarter 2017 admissions tax revenue received was $15K, or 9% less than budgeted projections, year-to-date revenue is up by nearly $6K, or approximately 2% higher than 2016. Schedule VI shows monthly telecommunications utility tax receipts for 2017 compared to 2016. Schedule VI - Telecommunications Utility Tax (`) (d) 2017 Quarter 2016 2017 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount cyo Q1 $ 348,156 $ 323,708 $ 339,620 Q2 321,852 312,456 313,961 Q3 317,156 - 309,380 Q4 343,515 - 335,093 $ (24,448) (9,397) -7% $ (15,912) -3% (1,505) -5% 0% Totals $1,330,679 $ 636,164 $1,298,053 $ (33,845) $ (17,417) - Current second quarter 2017 telecommunications utility tax remained stable as compared to allocated budget and is $9K, or just 3% below 2016 actual for the same period. (a) (b) (c) (d) Gambling tax currently includes card games, punch boards, pull tabs, and amusement games. Excludes golf course admissions tax. Telecommunications Utility tax currently includes cellular, pager and telephone usage. Actuals reflected in Schedules IV, V and VI are amounts earned for the quarter. C:IUsers\Vicky-C1AppDatalLocal\Microsoft\Windows\lNetCache\Content.0utlook\TBKDOZOR11nfo Memo Sales Tax -2017-Q2 2017MEMO (Oct 2017).docx 18 NAICS 236 237 238 SALES TAX SUMMARY 2nd Quarter 2017 (Received in March 2017 August 2017) CONSTRUCTION Construction of Buildings Heavy & Civil Construction Specialty Trade Contractors TOTAL CONSTRUCTION 16 TOTAL 760,960 81,491 540,462 $ 1,382,913 $ Overall Construction Change from Previous Year MANUFACTURING 311 Food Manufacturing 312 Beverage & Tobacco Products 313 Textile Mills 314 Textile Product Mills 315 Apparel Manufacturing 316 Leather & Allied Products 321 Wood Product Manufacturing 322 Paper Manufacturing 323 Printing & Related Support 324 Petroleum & Coal Products 325 Chemical Manufacturing 326 Plastic & Rubber Products 327 Nonmetallic Mineral Products 331 Primary Metal Manufacturing 332 Fabricated Metal Mfg Products 333 Machinery Manufacturing 334 Computer & Electronic Products 335 Electric Equipment, Appliances 336 Transportation Equipment Mfg 337 Furniture & Related Products 339 Miscellaneous Manufacturing TOTAL MANUFACTURING 16 TOTAL YTD 16 YTD 17 YTD % Diff 373,568 378,877 1.4% 33,340 23,915 -28.3% 255,992 239,955 -6.3% 662,899 $ 642,747 ($20,152) -3.0% 16 YTD 9,420 3,893 5,217 4,035 222 5 11,406 5,702 1,024 613 54 21 3,257 910 27,243 12,787 28,709 14,134 19 10 -22 5,253 6,454 2,926 3,615 973 2,008 1,222 10,978 6,526 10,914 4,884 5,490 1,547 2,588 904 115,102 63,922 5,608 2,376 19,790 8,919 $ 269,096 $ 141,565 $ 17 YTD YTD Diff 4,404 13.1% 6,267 55.3% 358 6465.0% 7,247 27.1% 561 -8.5% 48 125.8% 1,318' 44.8% 12,275 -4.0% 13,953 -1.3% 9 -9.6% 227 -95.7% 2,029 -30.6% 1,481 52.2% 772 -36.8% 4,374 -33.0% 2,992 -38.7% 5,141 232.3% 2,921 223.3% 17,896 -72.0% 2,896 21.9% 8,100 -9.2% 95,271 ($46,295): -32.7% Overall Manufacturing Change from Previous Year TRANSPORTATION & WAREHOUSING 16 TOTAL 16 YTD YTD 17 YTD % Diff 481 Air Transportation 482 Rail Transportation 484 Truck Transportation 485 Transit and Ground Passengers 487 Scenic and Sightseeing Tran 488 Transportation Support 491 Postal Services 492 Couriers & Messengers 493 Warehousing & Storage TOTAL TRANSP & WHSING 0 44 2,679 664 2,058 48,851 811 2,139 1,430 $ 58,677 $ Overall Transportation Change from Previous Year WHOLESALE TRADE 16 TOTAL 0 35 1,074 168 222 24,368 346 835 605 27,653 11 0.0% 96 175.7% 052 -2.1% 16 -90.4% 57 -74.2% 800 10.0% 463 33.5% 477 -42.9% 880 45.6% 29,852 $2,199 8.0% 423 WhIs Trade -Durable Goods 1,133,040 424 WhIs Trade -Nondurable Goods 157,285 425 Wholesale Electronic Markets 2,988 WHOLESALE TRADE TOTAL $ 1,293,313 $ 679,698 $ 559,458 Overall Wholesale Change from Previous Year 598,104 80,480 1,114 17YTD' 480,688 77,489 1,281 YTD % Diff -19.6% -3.7% 15.0% NAICS 441 447 AUTOMOTIVE Motor Vehicle & Parts Dealer Gasoline Stations TOTAL AUTOMOTIVE 16 TOTAL 654,125 88,489 $ 742,614 $ Overall Automotive Change from Previous Year NAICS RETAIL TRADE 16 TOTAL 442 Fumiture & Home Furnishings 475,117 443 Electronics & Appliances 1,180,323 444 Building Material & Garden 734,089 445 Food & Beverage Stores 236,576 446 Health & Personal Cam 306,529 448 Clothing & Accessories 2,089,128 451 Sporting Goods, Hobby, Books 573,704 452 General Merchandise Stores 2,202,158 453 Miscellaneous Store Retailers 726,355 454 Nonstore Retailers 156,157 TOTAL RETAIL TRADE $ 8,680,136 $ 4,044,676 Overall General Retail Change from Previous Year 16 YTD 305,253 43,297 348,549 16 YTD 230,835 630,698 362,216 101,857 142,729 923,808 271,254 978,189 332,519 70,572 17 YTD 349,360 43,543 392,902 $44,353 12.7% YTD % Diff 14.4% 0.6% SERVICES 16 TOTAL 16 YTD 17 YTD i % Diff 215,529 -6.6% 506,739 -19.7% 384,084 6.0% 117,430 15.3% 141,629 -0.8% 913,602 -1.1% 232,365! -14.3% 943,609 -3.5% 336,012 1.1% 134,904 91.2% 3,925,904 ($118,772) -2.9% 51X Information 52X Finance & Insurance 53X Real Estate, Rental, Leasing 541 Professional, Scientific, Tech 551 Company Management 56X Admin, Supp, Remed Svcs 611 Educational Services 62X Health Care Social Assistance 71X Arts & Entertainment 72X Accommodation & Food Svcs 81X Other Services 92X Public Administration TOTAL SERVICES 858,343 117,680 657,321 586,373 5 155,422 11,320 325,504 245,035 2,401,994 214,520 68,626 $ 5,642,144 $ Overall Services Change from Previous Year MISCELLANEOUS 16 TOTAL 422,443 72,016 328,522 237,336 5 68,601 4,700 144,682 124,151 1,177,653 109,533 37,072 2,726,716 YTD 17 YTD; %Diff 398,222 -5.7% 40,721 -43.5% 292,686 -10.9% 270,483 14.0% 0 0.0% 75,740 10.4% 3,228 -31.3% 68,778 -52.5% 130,601 5.2% 222,924 3.8% 130,197 18.9% 46,802 26.2% 2,680,383 ($46,333) -t7% 16 YTD; 000 Unknown 0 111-115 Agriculture, Forestry, Fishing 514 211-221 Mining & Utilities 68 999 Unclassifiable Establishments 193,069 MISCELLANEOUS TOTAL $ 193,651 $ Overall Miscellaneous Change from Previous Year 16 TOTAL 0 229 232 115,147 115,609 $ 16 YTD 17 YTD 0 206 178 270,063 270,447 $154,838 YTD % Diff 0.0% -10.1% -23.3% 134.5% 133.9% YTD 17 YTD; % Diff GRAND TOTALS $18,262,544 $8,747,367 ; $8,596,964 Grand Total Change from Previous Year ($150,402) -1.72% ($120,240) -17.7% Grand Total Change from Previous Year- Without New Construction ($130,250) -1.61% 20 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Rachel Bianchi CC: Mayor Ekberg DATE: September 26, 2017 SUBJECT: Public Safety Plan Financing Process ISSUE Staff is seeking direction from the Committee on an approach and process to identify additional funds needed for the Public Safety Plan due to cost escalation and market conditions. BACKGROUND The City is engaged in implementing the Public Safety Plan, which includes the construction of three new fire stations, guaranteed funding for apparatus and equipment for 20 years, a new justice center to house the Tukwila Police Department and Municipal Court, and a new consolidated Public Works facility. Funding for the fire stations, apparatus and equipment and justice center is from voter -approved bonds. The Public Works facility will be paid for through an equal contribution from the General and Enterprise funds. Planning for the Public Safety Plan began many years ago, with the first seismic study done in 2007. The financial estimates for the buildings were developed in 2015 as a part of the facilities study undertaken by the City. Since that time, the Puget Sound region has seen unprecedented growth. With this growth has come significant increases in land and construction prices, and Tukwila's Public Safety Plan projects are experiencing similar escalation in costs. Tukwila is not alone in this reality, and many other public agencies are seeing similar cost increases. Some highlights recently in the news media include: • Sound Transit has revised the cost -per -parking stalls from $69,000 a space to $118,000 per space at the Sounder train station in Kent. • Sea -Tac Airport added an additional $213 million to the budgets for the new International Arrivals Facility and North Satellite expansion, an increase of 16% and 19% respectively. Indeed, the Tukwila School District has indicated significant increases over their project estimates associated with their construction bonds, approved six months before the City's Public Safety bonds. While the programming phase must be complete on the justice center and Public Works facilities in order to have preliminary updated numbers on those projects, we do know that such numbers for the fire stations indicates a $8.4 million gap. We do know that our current allocated budget for the Public Safety Plan will not allow us to build these five buildings and pay for apparatus and equipment for 20 years. We recognize that additional funding will need to be secured to complete the Public Safety Plan. To finance the gap between what we have budgeted and what the facilities will cost, staff is seeking the Council's development and approval of an overall philosophy to be used as the basis for identifying additional resources. For instance, the Council may give direction that all one-time money — such as property sales — are directed to the Public Safety Plan. Other potential resources include: delay other capital projects, reduce growth in the budget, policy changes that reduce General Fund subsidies, use of ending fund balance, use of current 21 INFORMATIONAL MEMO Page 2 contingency, new revenue, etc. The purpose of this item at Committee is to begin this discussion. We also want to confirm that we want to build the amount and size of the buildings that was included in the Public Safety Plan and discuss the timeline outlined in the Plan. Additionally, staff proposes that once the philosophy is developed and agreed to by Council, the Finance Committee spend its time in 2018 to develop the specific tools for the City to fully fund the Public Safety Plan. This would then be codified in the 2019/2020 budget. As with the philosophical approach, staff is seeking Council's thoughts and discussion on this strategy as well. RECOMMENDATION Staff would like to have an initial discussion with the Committee to better understand the members' thoughts on a philosophical approach to closing the financial gap, as well as the strategy of the Finance Committee working on details in 2018 to codify in the 2019/2020 budget. Staff proposes to return to a subsequent Finance Committee with a draft of the approach and process for review and discussion. Once the Committee is comfortable, such approach and process would go to the Committee of the Whole for the full Council's discussion and consensus. W:12017 Info Memos\PSfinancing.doc 22