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Home My WebLink About2018-04-17 Finance Minutes City of Tukwila City Council Finance Committee FINANCE COMMITTEE Meeting Minutes April 17, 2018 5:30 p.m. Hazelnut Conference Room, City Hall Councilmembers: , Chair; Dennis Robertson, Kate Kruller Staff: Peggy McCarthy, Vicky Carlsen, Laura Crandall, Jay Wittwer, Brandon Miles, Gail Labanara, Rachel Bianchi, Bruce Linton, Laurel Humphrey CALL TO ORDER: Committee Chair Quinn called the meeting to order at 5:30 p.m. I.PRESENTATIONS II.BUSINESS AGENDA Ordinance: Limited Tax General Obligation Bonds A. Staff is seeking Council approval of an ordinance that would amend Ordinance 2559, which authorized issuance of up to $20 million of limited tax general obligation (LTGO) bonds for financing property acquisition for the Public Works shops and to pay for soft costs through mid- 2019. This amendment would allow for bond maturities up to thirty years and set the expiration One financing option for the Public Safety Plan extends the $20 million LTGO bond payment to thirty years from the original twenty-year period, which could save the City between $264,000 and $356,000 depending on whether interest only payments are made during the construction period, which is a common practice. . Passage of this ordinance would provide the flexibility for either 20 or 30 years. The bond sale is currently scheduled for May 17, 2018. The Committee indicated support for the flexibility to choose the term, but agreed that decision is part of the larger recommendation on Public Safety Plan financing which will not occur until late May or June. Since the May 17, 2018 sale date does not provide enough time for a holistic decision, the Committee asked staff to work with Bond Counsel to revise the schedule to show an alternative that accommodates this timeline. Chair Quinn asked that the memo be updated to call attention that the bond sale is contingent on the Council decision on Public Safety Plan financing. UNANIMOUS APPROVAL. FORWARD TO APRIL 23, 2018 COMMITTEE OF THE WHOLE. Fire and Parks Impact Fees B. Staff is seeking Council approval of a package of legislation to update Fire and Impact Fees for the City. The City contracted with Berk Consulting to obtain a comprehensive study of growth, capital plans and facilities, level of service standards and more to develop a maximum allowable impact fee for residential and commercial/non-residential properties. These fees were then compared with the fees of neighboring jurisdictions to assess regional competitiveness and affordability. Staff recommends reducing the fees proposed by the Berk study by 40% to bring FinanceCommittee Minutes.......................................................................................................................................April 17, 2018 them to a competitive regional level. Pursuant to direction given by the 2017 Finance Committee, input from the business community was collected and factored into the draft legislation and fee proposals. The proposed legislation comprises an ordinance updating fire impact fees, an ordinance updating park impact fees, and ordinance amending the Park, Recreation and Open Space (PROS) Plan to reflect an additional level of service standard, and a resolution amending the Capital Improvement Plan (CIP) to update the project pages for the fire and park impact fee eligible projects. Proposed impact fees are as follows: Fire Impact Fees Residential (per dwelling unit) Single Family $1,671 With fire sprinkler system $1,571 Multi Family $1,925 Commercial/Non-Residential (per 1,000 sf) Retail $1,872 Office $ 732 Industrial/Manufacturing $ 156 Park Impact Fees Residential (per dwelling unit) Single Family $2,669 Multi Family $2,325 Commercial/Non-Residential (per 1,000 sf) Retail $1,221 Office $1,101 K-12 Educational $ 220 Industrial/Manufacturing $ 610 Staff proposes a special rate for park impact fees for K-12 education facilities on the basis that students are most likely Tukwila residents and therefore would produce a double counting for park usage. The $220 proposal represents an 80% reduction, and the Committee concurred with this recommendation. Currently, impact fees are not charged for attached accessory dwelling units (ADUs). As detached ADUs are currently being considered by the Council, staff recommends they also be exempt if they are to be allowed in the City. Councilmember Robertson suggested that an amendment for ADUs be considered in the future that factors in the housing affordability calculation elsewhere in the ordinance. Following discussion, the Committee agreed with the proposed fees, but requested that staff amend the memo to further explain how the 40% reduction was determined. The Committee also requested that language giving the Fire Chief and Parks and Recreation Director discretionary decision-making on exemptions relating to low-income housing be removed as follows: FinanceCommittee Minutes.......................................................................................................................................April 17, 2018 Fire Impact Fee Ordinance Section 15: 16.26.120 Exemptions B.6.c. Should the property owner satisfy the criteria in TMC Section 16.26.120.B.6., a and b, and the Fire Chief determines a fee reduction is in the best interest of the City, the fees will be reduced, based on the following table: Park Impact Fee Ordinance Section 15 16.28.120 Exemptions B.6.c. Should the property owner satisfy the criteria in TMC Section 16.28.120.B.6., a and b, and the Director determines a fee reduction is in the best interest of the City, the fees will be reduced, based on the following table: UNANIMOUS APPROVAL AS AMENDED. FORWARD TO APRIL 23, 2018 COMMITTEE OF THE WHOLE. Business & Occupation Tax C. Staff provided the Committee with an overview of Business & Occupation (B&O) tax rates, implementation, and projected revenues. Tukwila does not currently impose a B&O tax, and 43 Rates and threshold affect the amount of revenue generated and the number of businesses taxed, and can also be used to shape economic development by both encouraging and discouraging types of businesses. Although a B&O tax would increase revenues for City operations, it would also increase workload, personnel costs, and systems costs. Kent has four FTE for implementation and administration, and Renton and Shoreline both have one FTE. Councilmembers asked clarifying questions and requested that further discussions on this item include information about scaling the tax to be higher for larger commercial businesses as well as how much the personnel cost would be for implementation of sample rates/thresholds. DISCUSSION ONLY. Sales Tax Revenue Sector Trends D. Staff presented the Committee with an overview of sales tax revenue sector trends sales tax revenue is under projections and also has the lowest average increase for 2011-2017 compared with Auburn, Burien, Kent, Renton and King County. The presentation included a regional snapshot, large-sector movement, and small-sector movement. DISCUSSION ONLY. 2017 4 Quarter Sales Tax & Miscellaneous Revenue Report E.th Staff presented the 2017 4th Quarter Sales Tax and Miscellaneous Revenue Report, including details on retail sales tax, gambling tax, and admissions tax revenues with sale tax broken out by industry classifications. Total sales tax collections for 2017 were $98 thousand below 2016 and $1.2 million below budget. The largest sector decline of ($115,985) occurred in wholesale trade and the largest sector increase of $105,608 occurred in miscellaneous: unclassifiable establishments. DISCUSSION ONLY. FinanceCommittee Minutes.......................................................................................................................................April 17, 2018 2018 Year to Date General Fund Update F. Staff presented an update on the General Fund based on financial data through April 9, 2018 for the reporting period ending February 28, 2018. General fund expenditures totaled $9.72 million as compared to the allocated budget of $10.60 million, which is $874 thousand below budget. Administration has an overall goal of further reducing general fund department expenditures by 3% and spending will be closely monitored to ensure the goal is met. DISCUSSION ONLY. III.MISCELLANEOUS 1. Staff mentioned that the Public Safety Bond Financial Oversight Committee will be meeting this week and agendas will be given to the City Council. 2. Staff reminded the Committee that in the last several budget cycles, the City Council and Administration met jointly in the spring to determine biennial strategic budget priorities, and asked if the Committee supported doing this in 2018. Chair Quinn noted that the Committee is focused on financing the Public Safety Plan and that priority-these decisions are made. The Committee agreed that if such a meeting is to occur it should be in June. Staff will work with Chair Quinn and the Council President on appropriate timing and format for a joint meeting. Adjourned at 7:53 p.m. Committee Chair Approval Minutes by LH