HomeMy WebLinkAboutFIN 2018-09-05 COMPLETE AGENDA PACKETCity of Tukwila
Finance Committee
• De'Sean Quinn, Chair
o Dennis Robertson
• Kate Kruller
Distribution:
D. Quinn
D. Robertson
K. Kruller
V. Seal
Hougardy
T. McLeod
Z. Idan
Mayor Ekberg
D. Cline
C. O'Flaherty
L. Humphrey
WEDNESDAY, SEPTEMBER 5, 2018 — 5:30 PM
HAZELNUT CONFERENCE ROOM
(At east entrance of City Hall)
Item
Recommended Action
Page
I. PRESENTATION(S)
2. BUSINESS AGENDA
a. An ordinance amending the gambling tax.
a. Forward to 9/10 C.O.W.
Pg.1
Vicky Carlsen, Deputy Finance Director
and 9/17 Regular Mtg.
b. Compensation policy for City employees.
b. Discussion only.
Pg.13
David Cline, City Administrator
c. 2018 2nd Quarter sales tax and miscellaneous revenue
report.
c. Discussion only.
Pg.31
Aaron Williams, Fiscal Coordinator
d. Interlocal agreement for transfer of surface water billing
d. Forward to 9/10 C.O.W.
Pg.43
to King County.
and 9/17 Regular Mtg.
Peggy McCarthy, Finance Director
e. 2019-2020 Biennial Budget:
e. Forward to 9/10 C.O.W.
Pg.55
(1) Finance
Mtg.
(2) Contingency Fund
(3) Urban Renewal
(4) General Government
Vicky Carlsen„ Deputy Finance Director
3. ANNOUNCEMENTS
4. MISCELLANEOUS
Next Scheduled Meeting: Tuesday, September 18, 2018
• The 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.
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL E ORANDU
TO: Finance Committee
FROM: Rachel Bianchi
CC: Mayor Ekberg
DATE: August 22, 2018
SUBJECT: Proposed increase to city's gambling activities tax
ISSUE
The City Council is being asked to modify the Tukwila Municipal Code (TMC) to increase the
gambling activities tax on cardrooms by 1%.
BACKGROUND
In 2011 the City Council adopted ordinance 2349, which set the most recent tax rates for
gambling activities, which include bingo games, raffles, amusement games, punchboards, pull
tabs and cardrooms. The ordinance set a rate for each of these, with a three -tiered rate
structure for tax rates associated with card rooms:
• An initial rate of 10%
• When more than five are open the rate moves to 15%
• If more than six, the rate moves to 20%
Currently, there are five cardrooms in Tukwila, resulting in a 10% tax on the gross receipts of
each establishment. The City collected $3.8 million in gambling taxes in 2017.
DISCUSSION
The Administration proposes to raise the rate associated with cardrooms by 1%. Per the TMC,
gambling taxes are used primarily for public safety, which accounts for more than 56% of the
City's general fund. State law caps the tax on cardrooms at 20%.
Jurisdictions in the county vary as to how they regulate and tax card rooms, and many ban such
establishments all together. The City of Auburn has one of the lowest rates at 4%, and
according to staff research, the City of Redmond has the highest at 12%. Both the City of Kent
and King County levy the 11% rate.
Staff estimates that a 1% increase in the tax levied on cardrooms would generate approximately
$350,000 in additional revenue in 2019. The City heads into the 2019/2020 budget process with
the reality that projected revenues will not meet expenditures. The Administration has directed
departments to reduce expenditures in the next biennium by 3%, but additional resources are
needed in order to provide the current level of City services. A small increase in the gambling
tax is an opportunity to help align revenues with expenditures in the coming biennium.
RECOMMENDATION
Council is being asked to approve the rate increase effective January 1, 2019 and forward this
item to the September 10, 2018 C.O.W. and subsequent September 17, 2018 Regular meeting
for adoption. This will allow sufficient time for notification to affected businesses.
ATTACHMENT
Draft ordinance
Ordinance No. 2349
2
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TUKWILA, WASHINGTON, AMENDING ORDINANCE
NOS. 2349 §2 AND 1809 §1 (PART), AS CODIFIED AT
TUKWILA MUNICIPAL CODE SECTION 3.08.030, "TAX
RATES," TO INCREASE THE TAX ON CERTAIN
GAMBLING ACTIVITIES; REPEALING ORDINANCE NOS.
2230, 2150 AND 1891; PROVIDING FOR SEVERABILITY;
AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, the social card rooms operating in Tukwila generate significant
gambling tax revenues for the City; and
WHEREAS, there is a cost to patrol and enforce City codes related to gambling;
and
WHEREAS, the more card rooms operated as a commercial stimulant, the more
City costs increase; and
WHEREAS, pursuant to the City Council's power to tax certain activities for
revenue purposes as set forth in RCW 9.46.110, the City Council now desires to
increase the tax levied on any social card room operated as a commercial stimulant,
upon certain conditions, by amending Tukwila Municipal Code (TMC) Section
3.08.030.A.4; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. TMC Section 3.08.030, "Tax Rates," Amended. Ordinance Nos.
2349 §2 and 1809 §1 (part), as codified at TMC Section 3.08.030, are hereby amended
to read as follows:
A. Pursuant to RCW 9.46.110 and RCW 9.46.120, as amended by the Laws of
Washington, effective July 27, 1997, there is levied upon all persons, associations and
organizations who have been duly licensed by the Washington State Gambling
Commission, as authorized by law, the following tax:
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1. Bingo games and raffles: To conduct or operate any bingo games and
raffles, a tax rate of 5% of the gross revenue received therefrom, less the actual amount
paid by such person, association or organization for or as prizes.
2. Amusement game: To conduct any amusement game, a tax rate of 2 Vo of
the gross revenue received therefrom, less the actual amount paid by such person,
association or organization for or as prizes.
3. Punchboards or pulltabs: For the conduct or operation of any
punchboards or pulltabs, a tax rate of 5% of the gross receipts from such activities for
commercial stimulant operators (taverns, restaurants, etc.); and a tax rate of 10% on the
gross receipts less the amount paid out as prizes for charitable or nonprofit
organizations.
4. Social card games:
a. For the conduct or operation of any premises or facility used to play
social card games, a tax rate of 4-0% 11% of the gross receipts received therefrom;
provided that when the number of card rooms in the City exceeds five, the tax rate shall
increase to 15% of the gross receipts received therefrom. Additionally, when the
number of card rooms exceeds six, the tax rate shall increase to 20% of the gross
receipts received therefrom.
b. For purposes of this provision, an operating business is defined as: a
business open to the public and engaged in the business of operating a social card
room for a period of 30 days. For purposes of this section, the 30 days are not required
to be consecutive days. After the 30 days of operations, which triggers the increased
tax rate, the Finance Director or his or her designee, shall notify the social card rooms
of the increased rate and that rate shall be paid thereafter by all card rooms in this tax
category, starting the financial quarter after notification.
B. Non -Profit Organizations.
1. No tax shall be imposed under the authority of TMC Chapter 3.08 on bingo
or raffles when such activities or any combination thereof are conducted by any bona
fide charitable or nonprofit organization as defined in RCW 9.46.0209, which
organization has no paid or management personnel, and has gross income from bingo
and raffles, or any combination thereof, not exceeding $5,000 per year, less the amount
paid for or as prizes.
2. The Finance Director may waive the tax due each quarter from a bona fide
charitable or nonprofit organization as defined in RCW 9.46.0209. This waiver may
occur only if the charitable or nonprofit organization demonstrates by clear and
convincing documentation that an amount equal to at least 70% of the tax due the City,
as computed pursuant to TMC Section 3.08.030, will be donated to charitable nonprofit
organizations serving the City whose purpose is to provide programs or facilities for
meeting the basic health, education, welfare, or other needs of the residents of the City.
Failure to donate at least 70% of the tax due the City will result in revocation of the
waiver and the disqualification of the bona fide charitable or nonprofit organization to
receive a waiver for future tax payments.
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Section 2. Repealer. Ordinance Nos. 2230, 2150 and 1891 are hereby repealed
in their entirety.
Section 3. Corrections by City Clerk or Code Reviser. Upon approval of the
City Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to
other local, state or federal laws, codes, rules, or regulations; or ordinance numbering
and section/subsection numbering.
Section 4. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to be
invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 5. Effective Date. This ordinance or a summary thereof shall be published
in the official newspaper of the City, and shall take effect and be in full force January 1,
2019.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2018.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Allan Ekberg, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
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Washington
Ordinance No. c' .3 LI q
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TUKWILA, WASHINGTON, AMENDING ORDINANCE
NO. 1809 §1 (PART) TO REMOVE THE DISTINCTION
BETWEEN SOCIAL AND PUBLIC CARD ROOMS,
AMENDING VARIOUS ORDINANCES TO INCREASE
THE TAX ON CERTAIN GAMBLING ACTIVITIES UPON
CERTAIN TRIGGERS; AMENDING VARIOUS
ORDINANCES TO PROVIDE FOR INTEREST ON LATE
PAYMENT OF GAMBLING TAXES; PROVIDING FOR
SEVERABILITY; AND ESTABLISHING AN EFFECTIVE
DATE.
WHEREAS, on February 22, 2011, the Tukwila City Council passed Ordinance No.
2323, which allowed social/public card rooms citywide until December 31, 2015, after
which social/public card rooms conducted as a commercial stimulant would thereafter
be prohibited effective January 1, 2016; and
WHEREAS, the social card rooms operating in Tukwila generate significant
gambling tax revenues for the City; and
WHEREAS, there is a cost to patrol and enforce City codes related to gambling;
and
WHEREAS, the more card rooms operated as a commercial stimulant, the more
City costs increase; and
WHEREAS, pursuant to the City Council's power to tax certain activities for
revenue purposes as set forth in RCW 9.46.110, the City Council now desires to
increase the tax levied on any social card room operated as a commercial stimulant,
upon certain conditions, by amending Tukwila Municipal Code (TMC) Section
3.08.030.A.4; and
WHEREAS, the City desires to make its code consistent with state law regarding
the class of taxpayers for each gambling activity; and
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WHEREAS, state law does not distinguish between social and public card rooms,
for taxation purposes;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. TMC Section 3.08.010, "Statutory Provisions Incorporated by
Reference," Amended. Ordinance No. 1809 §1 (part), as codified at TMC Section
3.08.010, is hereby amended to read as follows:
The provisions of Chapter 218, Laws of Washington, 1973 First Extraordinary
Session, as amended by Chapters 135 and 155, Laws of Washington, Third
Extraordinary Session 1974, are incorporated in total by reference as though fully set
forth, and in particular, the definitions as contained in Section 2, Chapter 218, Laws of
1973, First Extraordinary Session, as amended, relating, among others, to "amusement
games," "bingo," "raffles," "gambling," "punchboards," "pulltabs," and "social card
games."
Section 2. TMC Section 3.08.030, "Tax Rates," Amended. Ordinance Nos.
2230 §1, 2150 §1, 1891 §1 and 1809 §1 (part), as codified at TMC Section 3.08.030,
are hereby amended to read as follows:
A. Pursuant to RCW 9.46.110 and RCW 9.46.120, as amended by the Laws of
Washington, effective July 27, 1997, there is levied upon all persons, associations and
organizations who have been duly licensed by the Washington State Gambling
Commission, as authorized by law, the following tax:
1. Bingo games and raffles: To conduct or operate any bingo games and
raffles, a tax rate of 5`)/0 of the gross revenue received therefrom, less the actual amount
paid by such person, association or organization for or as prizes.
2. Amusement game: To conduct any amusement game, a tax rate of 2% of
the gross revenue received therefrom, less the actual amount paid by such person,
association or organization for or as prizes.
3. Punchboards or pulltabs: For the conduct or operation of any punchboards
or pulltabs, a tax rate of 5% of the gross receipts from such activities for commercial
stimulant operators (taverns, restaurants, etc.); and a tax rate of 10% on the gross
receipts less the amount paid out as prizes for charitable or nonprofit organizations.
4. Social card games:
a. For the conduct or operation of any premises or facility used to play
social card games, a tax rate of 10% of the gross receipts received therefrom; provided
that when the number of card rooms in the City exceeds five, the tax rate shall increase
to 15% of the gross receipts received therefrom. Additionally, when the number of card
rooms exceeds six, the tax rate shall increase to 20% of the gross receipts received
therefrom.
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b. For purposes of this provision, an operating business is defined as: a
business open to the public and engaged in the business of operating a social card
room for a period of 30 days. For purposes of this section, the 30 days are not required
to be consecutive days. After the 30 days of operations, which triggers the increased
tax rate, the Finance Director or his or her designee, shall notify the social card rooms
of the increased rate and that rate shall be paid thereafter by all card rooms in this tax
category, starting the financial quarter after notification.
B. Non -Profit Organizations.
1. No tax shall be imposed under the authority of TMC Chapter 3.08 on bingo
or raffles when such activities or any combination thereof are conducted by any bona
fide charitable or nonprofit organization as defined in RCW 9.46.0209, which
organization has no paid or management personnel, and has gross income from bingo
and raffles, or any combination thereof, not exceeding $5,000 per year, less the amount
paid for or as prizes.
2. The Finance Director may waive the tax due each quarter from a bona fide
charitable or nonprofit organization as defined in RCW 9.46.0209. This waiver may
occur only if the charitable or nonprofit organization demonstrates by clear and
convincing documentation that an amount equal to at least 70% of the tax due the City,
as computed pursuant to TMC Section 3.08.030, will be donated to charitable nonprofit
organizations serving the City whose purpose is to provide programs or facilities for
meeting the basic health, education, welfare, or other needs of the residents of the City.
Failure to donate at least 70% of the tax due the City will result in revocation of the
waiver and the disqualification of the bona fide charitable or nonprofit organization to
receive a waiver for future tax payments.
Section 3. TMC Section 3.08.080, "Payment of Tax — Penalty for Late
Payments," Amended. Ordinance Nos. 2323 §3 and 1809 §1 (part), as codified at
TMC Section 3.08.080, are hereby amended to read as follows:
A. The tax imposed by this chapter shall be due and payable in quarterly
installments, and remittance therefor shall accompany each return and be made on or
before the last day of the month following the quarterly period in which the tax accrued.
B. If a person subject to this tax fails to pay any tax required by this chapter within
15 days after the due date thereof, there shall be added to such tax a penalty of 10% of
the tax per month for each month overdue, which shall be added to the amount of the
tax due.
Section 4. Corrections by City Clerk or Code Reviser. Upon approval of the
City Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to
other local, state or federal laws, codes, rules, or regulations; or ordinance numbering
and section/subsection numbering.
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Section 5. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to be
invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 6. Effective Date. This ordinance or a summary thereof shall be published
in the official newspaper of the City, and shall take effect and be in full force five days
after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKVVp, WASHINGTON, at
a Regular Meeting thereof this / gm day of og7,y 1)-02 , 2011.
ATTEST/AUTHENTICATED:
APPROVED AS TO F RM BY:
Filed with the City Clerk:
Passed by the City Council:
Published:
.7)1 -1 I
Shelle Ke City Attorney Ordinance Number: OA 14 9
Effective Date:
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1 0
City of Tukwila Public Notice of Ordinance Adoption for Ordinance 2349.
On September 19, 2011 the City Council of the City of Tukwila, Washington, adopted
the following ordinance the main points of which are summarized by title as follows:
Ordinance 2349: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, AMENDING ORDINANCE NO. 1809 §1 (PART) TO
REMOVE THE DISTINCTION BETWEEN SOCIAL AND PUBLIC CARD ROOMS,
AMENDING VARIOUS ORDINANCES TO INCREASE THE TAX ON CERTAIN
GAMBLING ACTIVITIES UPON CERTAIN TRIGGERS; AMENDING VARIOUS
ORDINANCES TO PROVIDE FOR INTEREST ON LATE PAYMENT OF GAMBLING
TAXES; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE
DATE.
The full text of this ordinance will be provided upon request.
Christy O'Flaherty, CMC, City Clerk
Published Seattle Times: September 22, 2011
11
12
City of Tukwila
Allan Ekberg, Mayor
INFOR ATIONAL E ORANDU
TO: Finance Committee
FROM:
Stephanie Brown, Human Resources Director
Erika Eddins, Human Resources Analyst
David Cline, City Administrator
CC: Mayor Allan Ekberg
DATE: August 29, 2018
SUBJECT: Review of Compensation Policy Resolution No. 1796
Update from August 21, Finance Committee Meeting
Note: This is a new informational memorandum with the intent to capture the compensation policy
review and discussion outcomes in preparation for discussion with the full Council.
At the July 17, Finance Committee meeting, Administration sought committee direction to finalize the
scope of the review of the City Council compensation policy. The committee requested that
Administration bring back recommendations on the following proposed policy change considerations of
above and below market adjustments, comparable cities, compression, recruitment incentives, and the
process for non -represented compensation review.
In addition, as directed by the Council, Administration has conducted the external market study using the
Association of Washington Cities and County Employee Salary and Benefit Survey for 2018. Once the
regressions analysis was applied to the raw data, the results show we are still close to market and are
considered very competitive (Exhibit A.1 and A.2). This was also the case when we did the regression
analysis for 2017.
In future years, to address the potential for above and below market wage adjustments, it is recommended
that Council adopt the Market Competitiveness standard provided by our Mr. Lawson, our compensation
consultant as it provides an objective guide to address when positions are out of alignment with the
market.
Option 1
The Market Competitiveness Standard:
+/-5% to +/-10% - Competitive with market
+/-10% to +/-I 5% - Possibly Misaligned with market
+/-15% and above - Significantly Misaligned with market
For positions that are possibly and significantly misaligned with the market would require review of the
data to ensure the appropriateness of market data and review of job classifications to ensure appropriate
placement.
13
INFORMATIONAL MEMO
Page 2
Below are three examples of a process Council could adopt using the Market Competitiveness Standard:
OPTION A — External Market Study
• During External Market Study (for even numbered years) — Positions that are 5% or more below
market and up to 10% above are considered competitive with the market and will receive a
market adjustment the year the market adjustment is to occur.
• Those positions 10% to 15% above the market will not receive an adjustment during the year the
market adjustment is to occur and will warrant further evaluation and possible reclassification. If
further analysis results in reclassification, any adjustments will be made in alignment with City
policy.
OPTION B — Internal Equity
• Considerations for cost of living adjustment (COLA) for odd numbered years will be based upon
internal equity with represented groups to determine if an adjustment is warranted.
Administration will inform City Council if an adjustment is warranted prior to implementation.
OPTION C — Written Justification for Misaligned Positions
The other option would be to update the current language in Resolution No. 1796 Section B.2. to state "If
the City's pay schedule for any classification that does not represent the average of comparable salary
ranges (+/-10%) written justification must be provided to the City Council."
2. Compression
As it relates to defining Compression, Council Resolution No. 1796, states, "The goal of the City is to
mitigate or avoid salary compression issues where possible. An example of salary compression would be
when a non -represented supervisor earns less or is projected to earn less than those that he/she supervises
due to contracted wage increase."
During the Council work session Mr. Lawson, our consultant expressed that compression cannot be
totally mitigated. Therefore, Administration recommends that Council retain the current definition
reflected in the resolution as it is referenced above. It is further recommended to review the salary
structure more frequently preferably in the year a market study is done to ensure that wage adjustments
that occur over time do not create compression between salary bands.
3. Comparability
During even numbered years when an external market study is conducted, the Administration uses
Council Resolution No. 1796 parameters for comparability which looks at "All Puget Sound jurisdictions
with +/-50% of Tukwila's annual assessed valuation, based upon the Department of Revenue data, will be
used to create the list of comparable jurisdictions for evaluation of salary information." The issue of
comparability has been discussed during the review of this resolution, specifically, do the parameters of
+/-50% reflect the market to which we compare, or should the Committee also consider other factors to
determine external market comparability. ,
Mr. Lawson, our compensation consultant shared with the Council at their work session on June 19, that
comparability factors could include employee population, assessed valuation double or half the size of
Tukwila, geography, and demographics. Whereas, Administration would not recommend considering
assessed valuation of double the size of Tukwila, consideration of going above +50% would provide more
consistency where jurisdictions come in and out for comparison. For example, in the 2017 Market Study
Issaquah and Shoreline were included since they were within +50% of A.V. In the 2018 Market Study,
these two cities increased to 54% and 57% of A.V. and therefore were excluded (see table below).
14
INFORMATIONAL MEMO
Page 3
Assessed valuation changes annually asreported bythe Department nfRevenue, Taxing District Levy
Tob|e3O.
City
2027Assassed
Value
Assessed Value
%ofTukwila
2018Assessed
Value
Assessed Value
%ofTukwila
Tukwila
$5.040
1.00Y6
$5.736
1.00%
Shoreline
$7_426
1.4796
$8.848
1.540
Issaquah
$7.385
1.46%
$8.989
1.57Y6
Assessed Value represented in Billions
In addition, given that these concerns have been raised bvthe Employees group and in
previous discussions, the following are some Suggested options for your consideration that will mitigate
the inconsistency the current policy parameters impose.
OPTION l
"A|| Puget sound jurisdictions with +75/-50% of Tukwila's annual assessed valuationusing the most
current data from County Assessors, will beused tocreate the list of cornparablejUrisdictionsfor
evaluation ofsalary infbunudoo." As reflected in Exhibit B, the assessed valuation comparison table, this
Would serve to eliminate the ioand out annually of comparator jurisdictions. If consideration were given
to this option, Administration recon-imends a "second criteria to assessed valuation, to include employee
population ofsimilar uizo". 8aExhibit 8also shows, by increasing to+75%ufassessed valuation there
would be more similar employee Populations to compare to Tukwila.
Make nochange and retain current policy staternent of comparison to"All Puget Sound jurisdictions of
+c50%ofTukxdla`aannual assessed valuation".
New Recruitment Incentives
The FiuunceConouitteerogunstednnun:infbonu1iouonwhatotbcrcidoxdo0orourui and retain
employees. Twenty- five (25) Puget Sound Cities were surveyed and responded to OUr request on the
attached Exhibit [. The data shows that some cities offer hiring bonuses specifically10law enforcement
positions, additional vacation hours, orthe ability touse vacation sooner than the typical six months.
Several cities did not offer any recruitment incentives.
As has been discussed in previous hton meetings, Tukwila currently offers hiring bonuses to attract
applicants to highly competitive positions Such as Building and Construction Inspector, or Law
Enforcement positions. Mr. Lawson, OUr Compensation consultant, shared with the Council that a market
premium may be appropriate to implement specifically when You want to attract and retain jobs that are
competitive in the labor market.
/\dnnioisbationo:conomcnds the Committee defiucinits policy oatutemcoithat reflects its philosophy of
providing above average benefits, hiring incentives and competitive pay to attract, and retain a highly
skilled, gu«lificdand trained workforce,
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INFORMATIONAL MEMO
Page 4
Non -Represented Compensation Review Process
The final item for discussion is should the process for non -represented compensation review change.
Currently Resolution No. 1796, provides that non -represented employee compensation be reviewed
annually to consider external market or a cost of living adjustment. Unlike represented groups, the non -
represented compensation review typically is presented in the fall prior to the year of implementation.
This is a more public process. Administration recommends adopting review of non -represented
compensation at the time the budget is being adopted so that external market and cola wage adjustments
are a more efficient and seamless transition covering a two-year period versus an annual review process.
The remainder of schedule for review of the City Council Resolution No. 1796 is as follows
September 5— Finalize recommendations for City Council consideration
September 10- Bring recommendation to the City Council for review and discussion
September 17— Adoption of changes to Resolution No. 1796 for implementation
We look forward to discussing these recommendations and options at the Finance Committee meeting, on
August 21, 2018.
Follow Up from the August 21, Finance Committee Meeting
At the August 21, Finance Committee Meeting, Administration reviewed the following recommendations
with the Committee members:
• Reviewed results of the 2018 External Market Study for Non -Represented Employees;
• Recommendations and options for consideration on above and below market adjustments.,
• Recommendations regarding how to address compression;
• Recommendations and options for consideration on comparability; and
• Recommendation on new recruitment incentives and the process for review of Non -represented
compensation.
The Committee reviewed the recommendations, provided input, and asked these recommendations be
discussed further at the Sept 5 Finance Committee meeting In addition based upon the results from both
the 2017 and 2018 external market studies, the regression shows that we are competitive with the market.
It was requested that Administration continue the current policy of conducting the external market study.
The Finance Committee asked for Administration to supplement the tables in Exhibits A.1 and A.2 to
show the 2018 market study regression results based upon +60 of Assessed Valuation to include the two
cities that were excluded from the original study based upon the +/-50% Assessed Valuation criteria.
Those cities are Issaquah and Shoreline and the Committee can see the impact of this change now
reflected in Exhibits A.1.1 and A.2.1. This analysis shows that the City remains competitive within tie
market averages.
It was also requested that the table in Exhibit B be updated to include columns showing City populations
as a percentage of Tukwila's. Exhibit B.1 includes the population information as well as a column
showing the 2018 Assessed Values by County data. The County data provides the most current assessed
valuation figures available for cities and is included for comparison to the State Department of Revenue
which lags a year behind.
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INFORMATIONAL MEMO
Page 5
The remainder of schedule for review of the City Council Resolution No. 1796 is as follows
September 5 — Finalize recommendations for City Council consideration
September 10- Bring recommendation to the City Council for review and discussion
September 17 — Adoption of changes to Resolution No. 1796 for implementation
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14000
12000
10000
8000
6000
4000
2000
0
0
City of Tukwila, WA
Market Data Regression
a
y A 1,1162x + 3376
R2 A- 09851,,,,-22'
2000 4000 6000 8000 10000 12000
• Max Avg • Max Median ------ - Linear (Max Median)
Ni
0
City of Tukwila, WA
arket Data Regression - Revised Analysis
18000
16000
y = 1.179x + 3178.3
82 = 0,9836.„..,'
14000
12000
10000
8000
6000
4000
2000
0 > 2
0 2000 4000 6000 8000 10000 12000 /24 ---2
Max Median Tukwilia ------ Linear (Max Median)
EXHIBIT A.2
Structure Comparison: Max Comparisons
Market
Median
Market
Median
Hrly
Current Max
Max Based on
Regression
Results
% Diff
B21
N/A
N/A
$33.65
$30.21
-10%
B22
N/A
N/A
$35.83
$32.36
-10%
B23
$5,975
$34.47
$38.00
$3450
-9%
C41
N/A
N/A
$46.26
$43.09
-7%
C42
$7,276
$41.97
$48.89
$45.24
-7%
C43
N/A
N/A
$51.06
$47.38
-7%
C51
N/A
N/A
$53.79
$50.07
-7%
C52
N/A
N/A
$57.06
$53.28
-7%
D61
$10,071
$58.10
$58.04
$55.97
-4%
D62
N/A
N/A
$59.07
$58.11
-2%
D63
$10,639
$61.38
$61.15
$60.26
-1%
D71
N/A
N/A
$63.77
$62.94
-1%
D72
$11,453
$66.08
$66.88
$66.16
-1%
E81
N/A
N/A
$69.48
$68.85
-1%
E82
$12,416
$71.63
$71.58
$70.99
-1%
E83
$12,932
$74.61
$73,66
$73.14
-1%
E91
$13,302
$76.74
$76.23
$75.82
-1%
E92
N/A
N/A
$79.40
$79.04
0%
F101
N/A
N/A
$82.56
$82.26
0%
F102
$14,163
$81.71
$83.65
$85.48
2%
Negative % = leading market Positive % = lagging market
Average % Difference
-4.8%
Observations:
Current maximums for DBM ranges All - C52 currently lead the market
Beginning with D61, the ranges are aligned with market in a highly competitive manner
21
ExhibitA.Z.l
Structure Comparison: MaxCompahson-Revised
Market
Median
Mr| y
Current Max
Max Based on
Regression
Resu|ts-
Or|Q1Mo|
Y6Diff
B21
N/A
$33.65
$29.68
'12%
822
N/A
$35.83
$31.94
'21%
B23
$36.61
$38.00
$34.21
'10Y6
C41
0/A
$45.26
$43`28
-G%
[42
$43.19
$48.89
$45.54
'7%
[43
N/A
$5I.06
$47.81
-696
[51
N/A
$53.79
$60.65
'6%
C52
N/A
$57.06
$54.05
'596
D6I
$57.89
$58.04
$56.88
'2V6
D62
N/A
$59`07
$59.15
O%
D63
$60.26
$61.15
$61.41
096
D72
N/A
$63.77
$64.25
1%
D72
$66.77
$66.88
$67.65
1V6
EOI
N/A
$69.48
$70.49
1%
E82
$74.26
$71.58
$72,75
2%
E83
$76.31
$73.66
$75.02
l%
E91
$77.08
$76.23
$77,85
2Y6
E92
N/A
$79.40
$81.25
296
F101
N/A
$82.56
$84.66
396
F102
$84.25
$83.65
$88.06
5%
Average 96Difference
-3.996
Negative 96=leading market
Positive 96lagging market
Observations: Pay structure better aligned with market with inclusion of Issaquah
and Shoreline
Assessed Valuation Comparisons
Puget Sound City
Comparisons within
King, —
Snohomish
King
Shoreline Snohomish
Issaquah King
Federal Way Kjng
rn King/Pierce
EXHIBIT B
Des Moines
Maple Valley
Lake Stevens
King
King
Snohomish
MuNlteo Snohomish
Puyallup pierce
SeaTac King
Lakevvood Pierce �
8uhen
Lynnwood
Tukwila
3,194,299,789
'
Assessed CitV
0.55
132
3,268616,351 0.56 46
3,324,196,683
4,354,213,237
_
5148O32�91
�c�'
5,4OS,58
�,�'
5,41O/414,843
`
5,608,165,807
0.75
0.89 269
0.94 112
O.84 209
0.97 78
1.00
Marysville Snohomish 6/425,149,097 112
1.20 122
1/Cl 23U
BothellKing/Snohomish1.52 328
� 8,848,561,852 1.54 176
$ Ei736,568,228
666 0.98 350
321
277
Edmonds Snohomish 8,177,283,180
�
'
291 1.64 323
1.66 437-
Assessed Valuation Comparisons
EXHIBIT B.1
2017"AV 2018'4V,
Citles'or
Market
Survey
017 State DO
Assessed Value
state DOR
essed Value
Popluatioi
Population . "' Value %
County
2038 County Assessed Assessed
Values Value
X
X
X
X
X
x
X
X
X
X
X
x
X
X
X
x
X
X
X
X
x
X
Maple Valley
Lake Stevens
Des Moines
Mukilteo
Puyallup
Lakewood
SeaTac
Tukwila
Lynnwood
Burien
Marysville
Bainbridge Island
Edmonds
Bothell
Issaquah
Shoreline
Federal Way
Auburn
King
Snohomish
King
Snohomish
Pierce
Pierce
King
King
Snohomish
King
Snohomish
Kitsap
Snohomish
King/Snohomish
King
King
King
King/Pierce
3,268,616,351
3,324,196,683
3,194,299,789
56%
57%
55%
4,354,213,237
5,148,032,791
75%
89%
5,410,414,843 94%
5,405,585,665 94%
5,736,568,228 100%
5,654,422,666 98%
5,608,165,807 97%
6,425,149,097 112%
$ 6,898,602,203 120%
$ 8,177,283,180 143%
$ 8,760,887,474 153%
$ 8,989,557,112 157%
$ 8,848,561,852 154%
$ 9,420,224,291 164%
$ 9,555,039,113 167%
46
93
132
14%
29%
41%
124
39%
269 84%
209 65%
112 35%
321 100%
350 109%
78 24%
24,900
127%
31,740 161%
30,860 157%
$ 3,680,189,655 60%
$ 3,784,529,975 61%
$ 3,823,309,451 62%
21,240 108%
40,500 206%
59,280 302%
28,850 147%
277 86%
122 38%
220
328
248
176
323
437
69%
102%
77%
55%
101%
136%
19,660 100%
36,950 188%
50,680
65,900
23,950
41,260
44,370
258%
335%
122%
210%
226%
$ 4,745,542,557
$ 5,666,549,214
$ 6,002,783,089
$ 6,165,328,557
$ 6,184,943,263
6,272,081,312
$ 6,385,711,481
$
7,144,089,843
$ 7,542,154,879
$ 9,900,884,044
9,107,284,679
77%
92%
97%
100%
100%
101%
103%
116%
122%
147%
160%
36,030
55,060
96,350
78,960
183%
280%
490%
402%
10,152,241,433 164%
$ 10,228,874,349 165%
$ 10,301,293,691 167%
$ 10,600,014,202 171%
Mercer Island
Renton
Kent
Redmond
King
King
King
King
12,083,477,559
15,035,333,726
16,335,686,545
18,631,080,894
211%
262%
285%
325%
205
540
691
642
64%
168%
215%
200%
24,210 123%
102,700 522%
127,100 646%
62,110 316%
$ 13,326,314,672 215%
$ 16,909,050,051 273%
$ 18,597,339,729 301%
$ 20,770,064,850 336%
* WA State Department of Revenue (DOR) data was used for the 2018 Market Survey. The most recent DOR data available at the time of survey is 2017 figures (data lags by one year.)
FTE = Full Time Equivalent Employees
County Assessed Values from County Assessor Data current 2018 values
Sorted by 2018 County Assessed Values
Comparison on Recruiting Incentives
EXHIBIT C
Surveyed 25 Puget Sound Cities below are the responses received.
Puget Sound Cities
Recruiting incentives Offered
Auburn
None
Bainbridge Island
None
Bremerton
Hiring Incentives Policy for difficult to fill positions. Bonus up to $5k
Burien
At times offer a bank of vacation hours (management positions)
Edmonds
None
Federal Way
Hiring bonus offered to lateral police officers; Director level positions receive 40 hours vac upon hire; have
paid up to $5k in relocation expenses when applicable
Issaquah
None
Kent
Can offer vacation immediately upon hire; signing bonuses for PD; may advance to next salary step after 6
months instead of one year. Have paid for travel to and from for final interviews
Kirkland
Hiring bonus for police officer
Lake Stevens
May provide more vacation to non -reps at hire
Lakewood
Management level non -reps may receive initial leave upon hire, and an on occasion a higher vacation accrual
rate
Lynnwood
None
Maple Valley
Managers Directors may negotiate for additional vacation
Mt. Lake Terrace
Can offer higher vacation accruals and/or ability to use accrued vacation before 6 months
Mukilteo
On occasion have offered higher management positions vacation (2-3 weeks) upfront
Renton
Hiring bonus to lateral police officers; on occasion have given lump sum vacation or accelerated vacation
accrual rate.
SeaTac
None
26
290
Washington
Resolution No. I 1 9k
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ESTABLISHING A COMPENSATION
POLICY FOR CITY OF TUKWILA EMPLOYEES AND
REPEALING RESOLUTION NO. 1387.
WHEREAS, the City believes that the purpose of a compensation program is to
facilitate recruiting, retention, development and productivity of employees; and
WHEREAS, the City desires to utilize standardized policies, procedures and
processes, wherever possible, for compensating all employee groups, both represented
and non -represented; and
WHEREAS, the City recognizes that current economic conditions and forecasts,
long-range City budget forecasts, position rates for comparable jurisdictions, as well as
internal equity considerations should assist in guiding in the compensation of
employees; and
WHEREAS, the City has made a determination to, when economic conditions
allow, review and adjust non -represented employee salaries via a market analysis to
that of the average of comparable jurisdictions in even -numbered years, and to provide
a cost -of -living (COLA) allowance in odd -numbered years; and
WHEREAS, the City has made a determination to, when economic conditions and
negotiations allow, provide represented employees with salaries that reflect the average
of comparable jurisdictions; and
WHEREAS, the City has made a determination to, when economic conditions
allow, provide benefits to represented and non -represented employees that are slightly
above the average of comparable jurisdictions; and
WHEREAS, the City Council will participate in setting negotiation expectations and
reviewing and approving represented employee group contracts;
W:\Word Processing\Resolutions\Compensation policy for City employees 5-29-13 final
SB:bjs Page 1 of 3
27
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. The following statements and processes are adopted for the purpose of
guiding compensation programs for employees of the City of Tukwila.
A. Information to be provided to the City Council.
1. For Represented Employees. A written presentation of current internal
and local external public agency salary and benefit trends, including a salary and
benefits market survey of comparable jurisdictions, as defined herein, will be provided
to the City Council. This presentation must be made to the Council prior to the
commencement of negotiations with the bargaining units regarding salary and benefits.
The City Council and Administration will discuss represented employee group
negotiation expectations, negotiating points, salary and benefit change floors and/or
ceilings prior to the beginning and at appropriate points during negotiation sessions.
2. For Non -Represented Employees. A written presentation of current
internal and local external public agency salary and benefit trends, including a salary
and benefits market survey of comparable jurisdictions, as defined herein, will be
provided to the City Council every year that a non -represented salary increase is due.
Relevant Association of Washington Cities (AWC) data from the previous year's
Washington City and County Employee Salary and Benefit Survey, for the comparable
jurisdictions, will be used in the salary market survey.
B. Compensation Policy.
1. All Puget Sound jurisdictions with +/-50% of Tukwila's annual assessed
valuation, based upon the Department of Revenue data, will be used to create the list of
comparable jurisdictions for evaluation of salary information. It is desirable to use the
same comparable jurisdictions for both represented and non -represented employee
groups.
2. For non -represented employees, the City desires to pay the average salary
for the particular pay scale, as derived from the comparable jurisdiction data described
in Section E3.1. If the City's pay scale for any classification does not represent the
average of comparable salary ranges (+/-5%), written justification must be provided to
the City Council. For represented employees, the City desires to pay salaries that are
competitive to the City's comparable jurisdictions.
3. The cost -of -living adjustment (COLA) in odd -numbered years for non -
represented employees shall be based upon 90% of the Seattle -Tacoma -Bremerton
Consumer Price Index (CPI-W) Average (June to June). It is desirable to calculate
represented cost -of -living adjustments the same way, unless a different method is
authorized by the Council.
W:\Word Processing\Resolutions\Compensation policy for City employees 5-29-13 strike-thru
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28
4. The goal of the City is to establish parity between represented and non -
represented employees' benefits. The City desires to provide employee benefits that
are competitive to the comparable cities described herein. The City will endeavor to
keep increases to annual health care costs under market averages. If costs exceed
market averages, adjustments will be made to reduce benefit costs.
5. The goal of the City is to mitigate or avoid salary compression issues
where possible. An example of salary compression would be when a non -represented
supervisor earns less, or is projected to earn less than those that he/she supervises
due to contracted wage increases.
6. If the Administration determines that a deviation from the above process
(in its entirety or for individual positions) is necessary, it will provide justification to the
City Council for review and approval prior to the adoption of any process change.
Section 2. Resolution No. 1387 is hereby repealed.
PASSED BY THE CITY COUNCIL �F THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of T3tj 2013.
ATTEST/AUTHENTICATED:
7-7% s/j7
Christy O'Flah MMC, City Cler
APPROVED AS TO FORM BY:
She
ersla rney
Kathy HoLigerd
ol
I Presi
Filed with the City Clerk: 6- ---61
Passed by the City Council:
Resolution Number: 1 j1 cfb
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Page 3 of 3
29
30
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance Committee
FROM: Peggy McCarthy, Finance Director
BY: Aaron Williams, Fiscal Coordinator
CC: Mayor Ekberg
DATE: August 24, 2018
SUBJECT: Sales Tax and Miscellaneous Revenue Report- 2nd Quarter 2018
Schedule I - Sales Tax,
in 61,000s
2017 Actual
2018 Actual
YOY Change
i i
i i
i i
i i
i i
i Other !
--- Month ----
Other !
Total
' Other '
Total
Construction ; Industries ' Total
Collect-
Construc-! !
Construc,I
!
ed
ReCd
ton i Industries !
' 1
tion !Industries ! 1
Amount
% Amount % ! Amount
! 1
%
Jan
Mar
$ 123 ! $ 1,149 !
$ 1,272
$ 116! $ 1,222 !
$ 1,339
$ (6)
-5%! $ 73 6%! $ 67
5%
Feb
Apr
83 ! 1„123 !
1,206
128 ! 1,211 !
1,3,38
45
54%! 88 8°/0! 132
11`q?.
Mar
May
120 i 1,664 i
1,784
131 1 1 497 i
1,618
11
9%! (177) -11%i (1'6'6)
-9%,
0-1 Totals\
$ 326 ! 3,936 !
$ 4,262,
$ 375 ! 3,920 !
$ 4,295
$ 4-9
16%!1 (16) 0%! $ 33
1%
Apr
Jun
90 ! 1,317 i
1,408
122 ! 1,349 !
1,471
32
35%! 3-2 2%, 64
50,!!!)
May
Jul
103 " 1 318 ' !
1 421
134 ! 1,492 I
1,626
31
30D,!!!! 174 13%! 205
14%
Jun
Aug
116 , 1,391 !
1,5,06
139. : 1,682 :
1,921
23-
20%; 292 21%; 315
21%
O-2, Totals
S 3,09 ! 4,026 !
$ 4,335
$ 395 ! 4,524 !
$ 4.919
$, 86,
28%! 498 12%! $ 584
13%
Jul
Sep
130 ! 1,377 !
1„508
-
Aug
Oct
125 ! 1 345 !
„
1,471
-
Sep
Nov
140 i 1,473 i
1,613
-
Q-3 Totals
$ ., ! 4,196 !
$4,591
$ -
CPX!' i - 0%! i -
0%
Oct
Dec
145 ! 1,329!
1,473
,
.,
Nov
Jan
110! 1,424 !
1,534
-
1
Dec
Feb
120 ! 1,849 :
1.969
Q-4 Totals
S 374 ! 4,602 !
$ 4,976
- _
-
-
0%, - 0%! $ -
0%
Totals
$ 1,404 ! 16,760 !
$ 18,164
$ 770 1 8,444!
$ 9,214
$ 136
10%! 482 3%! $ 617
3%
Second Quarter sales tax collections increased $584 thousand or 13% over the same period in
2017. Of this increase, Construction related sales tax accounted for an increased $86 thousand
or 28% while all other industries accounted for an increase of $498 thousand or 12% when
compared to the same period in 2017,
31
INFORMATIONAL MEMO
Page 2
Budget to Actual - Sales Tax in $1,000's
-- Month --
Collected Reed
Jan Mar
Feb Apr
Mar Mai
Q-1 Totals
2017
2018
Ni"aliatice
Actual
1,272
1,206
1,784
4 262
Allocated Actual
Budget
5.
1,396 $ 1,339
1,323 $ 1,338
1,958 $ 1,618
4,671 $ 4,295
Apr
•May
Jun
Jun
Jul
Aug
-2 Totals
•1,408
1,421•
•1,506
4,335
$ 1 645 1 471
$ 1,559 1 626
•$ 1,653 1,821
4,757 $ 4,919
Arnt 0/
(57)
15 1%
(340) -1794
(74) -5%
7 494
168 10%
Sep
Aug Oct
Sep Nov
Q-3 Totals
Oct Dec
No Jan
Dec Feb
Q-4 Totals
1)509
1 471
1,613
4,591
1473
1,534
1,969
4,976
$ 1,654
$ 1,614
•$ 1,770
5,038
$ 1,617
5 1 683
$ 2,161
5,461 $
0%
$ 0%
Totals 18,164 $ 19,9:3.2 $ 9 214 $(220) -1%
Actual sales tax collected in the second quarter was $162 thousand greater than anticipated,
representing a 3% positive variance from budget. Overall year-to-date sales tax collection
through the second quarter is $220 thousand under budget, which is 1% less than budget
expectations.
Sales tax collections during the past two months (May and June) have exceeded budget
expectations by $235 thousand. This increase can be mostly attributed to the category 441-Motor
Vehicle and Parts Dealer from a manufacture of buses.
32
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INFORMATIONAL MEMO
Page 3
Below inograph nfthe yoor-to-datochanges insales tax collections bvindustry type year over
year.
(
$100,000
�
Manufacturip
532,537
Change YTD by Category !
Wholesaie Trade
/
Automotive zm 53m i
$2a,7a /
i
|
|
_Retail Trade
_
/
|
wzz��w
All industry categories show an increase in sales tax except for transportation/warehousing, which
had m$2.83Odecline. The miscellaneous category contains sales tax from periodic and one-time
type transactions. Excluding this miscellaneous oote0ory, year -over -year sales tax through the
2"^ quodar2O18 increased by$831 thousand.
WARN ProjectmSales Tax /omrm*fiomz 1oLmomvnles\lmnMemo Sales mx-2018-Q2,docx
INFORMATIONAL MEMO
Page 4
Schedule II shows year-to-date sales tax collections from the top ten indu try classifications.
Schedule II - YID sales tax collections - top ten industry classifications
Group
Naine
722 Food Services., Drinking Places
452,' General Merchandise Stores
448 Clothing and Accessories
423 Wholesale Trade, Durable Goods
441 Motor Vehicle and Parts Dealer
236 Construction of Buildings
443 Electronics and Appliances
444 Building Material and Garden
453 MisceHaneous Store Retailers
517 Telecommunications
YTD YTI)
Cairreitt Prior
973,229•5•
965,467 5
935,216
565,535 5
5 557,218 5
514,527
5 soo,..419 s
403,303
371,27'5
355,433 5
910 341 5
94”09 S
913,602 5
482,063 5
349,360
379.001
506,77
354, 086 Si
•335,554
304,971 5
Dollar
Diff. Diff.
62888
21.857
2,1,614
83,472
207,858
135.526
(6,351)
19,216
as,721
50,462
6,91%
2.32%
2 37%
17 32%
39 50%
35 76%
5%
5 GO%
10,65%
16,55%
The top three industry classifications remain unchanged compared to the prior quarter, with 'Food
Services, Drinking Places' topping the list. The chart below illustrates these three groups over
past ten years, highlighting the relative growth in the Food Services category. General
Merchandise Stores (such as Costco and Target) and Clothing and Accessories retailers (such as
Nordstrom and Kohl's) is anticipated to finish the year just ahead of the Food Services, Drinking
Places based on past consumer spending trends in the second half of the year.
Sales Tax -Top three industry classifications 2009-2018
" 0000000000,0000
2009 '2010 2011 .2012: 2010 .2.014 2016 .2017
(Prtijettedi•.
mm0722 Food SerVites„.Dfirklingflaces 000-452 General Merthamise5tore0 mm0448 Clothing:and Accessqrtes.
34
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INFORMATIONAL MEMO
Page 5
Schedule Ill shows the year-to-date ten largest declines in sales tax collections by dollar
difference by industry collected.
Schedule YTD ten lar est declines (S) in sales tax collections by industry class
t:irou p
Name
Nonclassifiable Establishments
454 Nonstore Retailers
62-1 Ambulatory Health Care Service
238 Specialty Trade Contractors
926 Economic Programs Adndn
Transportation Support
Electronics and Appliances
515 Broadcasting (except Internet)
323 Printing and Related Support
812 Personal and Laundry Semres
;.;
YTD YTD Dollar
Current Prior. Dili.
55,060 5
55223 5
32,370 .5
5 777,728
5 30,535 S
5 18,026
500,419 5
2,809 5
10,794 I5.
42,85,6 5
270,N3 5
135,070 5.
51,442 .5
239,585 5
41,464
26,800
508,770 5
7,339 5
13,953 5
45,242 S
(215,003(
(49,647')
(19,072)
k 16,85
(10,929)
7741
(6,351)
(4,530)
0,159)
(2,3681
-7961%
-36 90%
-37 07%
-26 36%
-40 20%
-61 73%
-2264%
-527%
The largest decline was in the 999-Nonclassifiable Establishments industry category (also
referred to as the miscellaneous category), which reflects a large art related transaction in the
prior year. No trends were detected when analyzing these groups compared to prior periods.
VVAFIN Projects \Sales Tax Information120181 Memo fileslInfo Memo Sales Tax-2018-Q2.docx
35
Ca)
CY)
Projects\Sales Tax Information
s swan oluksaig ouniAng
SALES TAX SUMMARY
2nd Quarter 2018 (Received in March 2018 - August 2018)
NAICS CONSTRUCTION 17 TOTAL
236 Construction of Buildings 844,13.6
237 Heavy & Civil Construction 107,260
238 Specialty Trade Contractors 462,376
TOTAL CONSTRUCTION $ 1,413,773 $
Overall Construction Change from Previous Year
MANUFACTURING
17 TOTAL
YTD
17YTD 18 YTD %Diff
379,001 514,527 35.8%
23,915 33,184 38.8%
239,585 222,728 -7.0%
642,501 $ 770,439
$127,937 19.9%
17YTD 18 YID %Diff
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 Product
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 Fumiture & Related Products
339 Miscellaneous Manufacturing
TOTAL MANUFACTURING
10,703
11,960
409
14,792
888
88
3,740
24,646
28,490
41
-15,834
3,955
5,081
1,803
8,752
6,300
10,531
3,949
29,297
8,432
19,765
177,788 $
Overall Manufacturing Change from Previous Year
TRANSPORTATION & WAREHOUSING
17 TOTAL
4,404 8,335 89.3%
6,267 5,909 -5.7%
358 149 -58.5%
7,247 7,062 -2.5%
561 261 -53.5%
48 24 -50.2%
1,318 938 -28.8%
12,275 12,586 2.5%
13,953 10,794 -22.6%
9 52 459.4%
227 2,992 1220.1%
2,029 2,276 12.2°A
1,481 2,132 44.0%
772 613 -20.6%
4,374 5,417 23,8%
1,933 4,354 125.3%
5,141 13,122 155.2%
2.921 9,097 211.4%
17,896 21,540 20.4%
2,896 6,039 108.5%
8,100 13,057 61.2%
94,211 $ 126,749
$32,537 34.5%
YTD
17YTD 18 YID Diff
481 Air Transportation
482 Rail Transportation
483 Water 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
11
169
86
1,852
395
57
47,071
816
1,600
1,878
53,936 $
Overall Transportation Change from Previous Year
WHOLESALE TRADE
17 TOTAL
11 0 0.0%
96 29 -692%
42 4 -906%
1,052 922 -12.4%
16 357 2117,5%
57 6,755 11678.7%
26,800 16,026 -40.2%
463 515 11.4%
477 1,107 132.2%
838 1,300 55,1%
29,852 $ 27,016
($2,836) -9.5%
YTD
17 YTD 18 YTD %Diff
423 Whls Trade -Durable Goods 1,018,477 482,063 565,535 17.3%
424 Whls Trade -Nondurable Goods 155,695 77,489 81,539 5.2°/.
425 Wholesale Electronic Markets 2,696 1,281 1,337 4,4%
WHOLESALE TRADE TOTAL S 1,176,868 $ 560,833 $ 648,411
Overall Wholesale Change from Previous Year $87,578 15.6%
NAICS AUTOMOTIVE
441 Motor Vehicle & Parts Dealer
447 Gasoline Stations
NAICS
442
443
444
445
446
448
451
452
453
454
17 TOTAL
709,541
91,039
TOTAL AUTOMOTIVE $ 800,581 S
Overall Automotive Change from Previous Year
RETAIL TRADE
Fumihire & Home Fumishings
Electronics & Appliances
Building Material & Garden
Food & Beverage Stores
Health & Personal Care
Clothing & Accessories
Sporting Goods, Hobby. Books
General Merchandise Stores
Miscellaneous Store Retailers
Nonstore Retailers
TOTAL RETAIL TRADE
17 TOTAL
445,454
1,168,189
805,251
257,762
298,682
2,066,870
533,560
2,131,267
738,487
248,748
$ 8,694,271 $
Overall General Retail Change from Previous Year
SERVICES
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
17 YTD
349,360
43,543
392,902 $
17 YTD
215,529
506,770
384,086
117,430
141,664
913,602
232,366
943,609
335,554
135,070
3,925,680
5
18 YTD
557,218
47,422
604,640
$211,737 53.9%
% Diff
59.5%
8.9°4
18 YTD %Diff
224,971 4.4%
500,419 -1,3%
403,303 5.0%
140,355 19.5%
145,982 3,0%
935,216 2.4%
264,147 13,7%
965,467 2.3%
371,275 10.6%
85,223 -36.9%
4,036,357
$110,676 2.8%
17 TOTAL 17 YTD 18 YTD
820,832
10,6,045
623,983
547,039
9
170,046
10,355
119.513
256,620
2,536,470
270,882
87,143
5,548,937 S
Overall Services Change from Previous Year
MISCELLANEOUS
000 Unknown
111-115 Agriculture, Forestry, Fishing
211-221 Mining & Utilities
999 Unclassifiable Establishments
MISCELLANEOUS TOTAL
Overall Miscellaneous Change from Previous Year
398,258
40.719
292,741
270,483
0
75,791
3,228
68.778
130.601
1,222,924
130,180
46,802
2,680,505
450,457
64,040
310,792
307,738
1
143,565
3,061
50,009
150,027
1,300,140
129,731
35,278
$ 2,944,840
$264,334
17 TOTAL 17 YTD 18 YTD
0 0 0
1,089 206 307
547 210 203
296,439 270,0.63 55,060
$ 298,074 $ 270,479 S 55,570
($214,910) .79.5%
YTD
% Diff
13.1°A
57.3%
6.2%
13.8°/o
0.0%
89.4%
-5,2°4
-27.3%
14,9°L
6.3%
-0.3%
-24,6%
9.9%
YTD
% Diff
0.0%
49.1%
-3.6%
-79.6%
'no
17 TOTAL 17 YTD 18 YTD % Diff
GRAND TOTALS $18,164,227 $8,596,964 $9,214,020
Grand Total Change from Previous Year $617,056 7.18%
Grand Total Change from Previous Year - Without New Construction $489,119 6.15%
(Q
co 0
0)
m
H
INFORMATIONAL MEMO
Page 7
Schedule IV shows quarterly gambling tax performance year over year and for the current year
compared to budget.
Schedule IV - Gambling Tax '
(d) 2018
Qu•arter 2017 2018 Allocated
Earned Actual Actual Budget
INCREASE (DECREASE)
YEAR OVER YEAR BUDGET VARIANCE
Amount Amount
Q1 $ 977,003 $ 985,901 $ 995„831
Q2H 983,322 •841 104 1,002,272
Q3 1.3:i 970,337
Q4 958,503 976,974
$ 8 898 1% $ (9 930)
(142,218) -14% (161 168) -16%
Totals $ 3,870,819 $ 1,827i
1 1
$ 3,945,414
$ (133,319) -3% $ (171,091) -4%
During the second quarter Gambling tax revenue was 14% below the prior year and 16% less than
budget. The City has four casinos — the Riverside Inn, the Great American, the Fortune (formerly the
Golden Nugget) and the Macau. An analysis of the second quarter gambling taxes show that the decline
in the second quarter is attributed to one casino and not a trend among all casinos. Gambling tax is
budgeted to increase by 2`)/0 over 2017 actual revenue.
Schedule V shows quarterly admissions tax performance year over year and for the current year
compared to budget.
Schedule V - Admissions Tax t\
(d) 2018 INCREASE (DECREASE)
Quarter 2017 2018 Allocated YEAR OVER YEAR BUDGET VARIANCE
Earned Actual Actual Budget Amount Amount
Q1 $ 166 003 $ 206 037 5 176,211
Q2 157 574 248 570 167 263
03 177 422 188 331
Q4 171,641 182 195
$ 4.0,034 24% 5 29,827 17%
90,996 58% 81,307 49%
Totals $ 672,640 $ 454,607 $ 714,111 5 131.030 19% $ 111,133 16%
Second quarter admissions tax revenue was $91 thousand, or 58% more than the same period last
year and exceeded the budget expectation by $81 thousand or 49%. A major contributor to the increase
is a new entertainment venue in the Central Business District. Admissions tax is budgeted to increase
6% over 2017 actual revenue.
Schedule VI shows quarterly telecommunications utility tax performance year over year and for the
current year compared to budget.
Schedule VI - Telecommunications Utility Tax 16'
(d) 2018
Quarter 2017 2018 Allocated
Earned Actual Actual Budget
01 $ 323,708 292,9E4 .5.
Q2 02 312,456 279,5E5 308,476
Q3 388,433 383,486
04 316,497 312,466
INCREASE (DECREASE)
YEAR OVER YEAR BUDGET VARIANCE
Amount.. Amount
$ (30,754) -10% S (26.632) -8%
(32,900) -11% (28,921) -9%
Totals $ 1,341,14 572,509 $ 1,324,013 $ (63,655) -5% S (55,552) -4%
Second quarter telecommunications utility tax was $33 thousand, or 11% less than the previous year
and $29 thousand less than budget. The 2018 revenue is budgeted at 1% less than 2017 actual
revenue.
(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.
WARN Projects1Sales Tax Information \20181_Memo tiles \Info Memo Sales Tax-2018-02.docx
37
INFORMATIONAL MEMO
Page 8
Chart 1 AU Sales Tax 2009-2018
AD Sales Tax 2009-2018
26819 2010 2011 2012 2013 '2014 2015 2016 2017 2018
(Projected)
Chart 2: Sales Tax by ajor Sector (Retail, Services, A Other
Sales Tax: by Major Sector 2009-2018
2009 2010 2011 2012 2013 2014 2015 2016• 2017 2018
•(Projected)
Rsil
St0rvices 03-076262151t71ers
38 VV:\FIN Projects \Sales Tax Information120181_Memo fileskInfo Memo Sales Tax-2018-Q2.docx
INFORMATIONAL MEMO
Page 9
Chart 3: Sales Tax collection history top three AICS codes
Sales Tax: Top Three NAKSS codes 2009-2018
2,4410,0410
2,200AX)
2 0011 0120
2009 2010 2011 201,1 2013 2014 2015 2016 2017 2018
iPragented
1722.-Food Services, Drinking Places 452-General Martha ottse Stores, ----,4424111oth g and Accessories
Chart 4: Sales Tax from Construction Activities 2009-2018
Sales Tax: Construction
2009 201.0 2011 2012 201.3 2014 201.5 2016 2017 2012
(Ptojected 1
Includes: 236-Construction of Buildigs, 237-Heavy 8, Civil Construction and 238-Specialty trade contractors..
VV:IFIN Projects \Sales Tax Information120181Memo files \ Info Memo Sales Tax-2018-Q2.docx
39
INFORMATIONAL MEMO
Page 10
Chart 5:
iscellaneous sales tax history 2009-2018
Sales Tax: 'iscellaneous Categories
2008 2010 2011 2012 2013 2014 2015 2016 2017 2018
(projected)
Includes : Unclassifiable Establishments as well as Agriculture, Forestry and Mining categories.,
Chart 6: Sales Tax collections for
4)000,000
3 500,000
3 01133,000
2 500 000
2 000,000 "
1,500 000
1 000,000
500,81X1
VASMIACCL
ajor Retial categories 2009-2018
2003 2010 2011 2012 2013 2-014 2015 2016 201.7 2018
(Projected)
214(3-48ectronics and Apptiarxes (4)tt3PQotlning.end-)Aaeseories
)6023-515203eneraiMerchardiseStiore0 OtherReta4
40 W:\FIN Projects \Sales Tax Information120181_Memo files1Info Memo Sales Tax-2018-Q2,docx
INFORMATIONAL MEMO
Page 11
Chart 7: Sales Tax collections for Services categories 2009-2018
.10.0981.1411
1010
2012
. 226.-60161.Setekes 160ging
2615
2016
5'.'3012Red. Estates Rentettlea§leg
...Allah& Semites
2017 2018
Pr
ejected
WAFIN Projects\Sales Tax Information120181 Memo files\Info Memo Sales Tax-2018-Q2docx
41
42
City of Tukwila
Allan Ekberg, Mayor
TO:
FROM:
BY:
INFOR ATIONAL EMORANDU
Finance Committee
Peggy McCarthy, Finance Director
Richard Takechi
CC: Mayor Ekberg
DATE: August 29, 2018
SUBJECT: Transferring Surface Water Billings to King County
ISSUE
The Council is being asked to approve an interagency agreement with King County authorizing
the County to bill Tukwila property owners for the City's surface water services beginning January
1, 2019. The City directly bills each property owner in January and July for the surface water
charges. King County provides a similar service and would include the surface water charges on
their property tax statements.
BACKGROUND
The Storm and Surface Water Utility was created per Ordinance 1523 and Ordinance 1549,
effective on 1/1/1990, set the rate classifications and rates for the Storm and Surface Water
Utility. The current fees are approved by the biennial Public Works Fee Schedule.
DISCUSSION
The City's Finance Department assumed the billing and receipting process of all the storm and
surface water bills. In addition, Finance maintains each customer's account, which is currently
5,286 accounts. Billing maintenance includes ownership changes; mailing/site address and
contact information changes; changes in rate classifications; and area changes, due to short plats,
consolidations, and boundary line adjustments. Finance and other departments, including Public
Works and the Mayor's Office, also field questions and/or complaints from the public regarding
the bills and the Surface Water Utility in general. The entire process of billing, receipting, and
maintaining the customer accounts, and interacting with the public takes significant resources and
time for the City. Transferring the billings and receipting to King County will allow City personnel
to devote time and resources to other duties.
King County processes the surface water billings for 17 entities, including the cities of Bothell,
Burien, Covington, Federal Way, Kirkland, Maple Valley, SeaTac and Woodinville. If the City
approves the utility billing transfer to King County, there will be different rules to follow. The
County requires a file in their format prior to year-end 2018 to bill the taxpayers for 2019. The file
will include the parcel #, area, rate codes, and billing amounts. This file will be submitted each
year to the County for the following year's billing, Thus, the City will still need to maintain parcel
information, which is currently done in the Parcel Manager module in the Eden accounting
software. The City would no longer maintain ownership changes or mailing/site address and
contact information changes.
43
INFORMATIONAL MEMO
Page 2
King County has different qualifications to receive a discounted charge due to low income senior
or low income disabled. The household low income threshold for King County is currently
$40,000, as opposed to the City's $32,000. The senior age for King County is 61, while the City's
is 62. Thus, more customers will be eligible using the County's qualifications.
Transitioning the billing to King County will create capacity within the Finance Department and
allow property owners to pay both the surface water fee and property tax with one payment since
the surface water fees will be billed with, and included on, the property tax statement.
FINANCIAL IMPACT
King County will charge the City three separate fees, with one being a one-time setup fee.
Another fee is based on the number of parcels billed, and there are currently 5,286 parcels in the
City. The City will continue to bill for City -owned parcels as well as the 15 condominium
complexes in the City and the State-owned roadways and properties. This leaves approximately
5,100 parcels that King County would potentially bill. See the attached cost benefit analysis for
an estimate of the 2019 and 2020 costs and the estimated savings. The implementation and
ongoing fees will be charged to the Surface Water Utility fund.
RECOMMENDATION
The Council is being asked to approve the draft interagency agreement and consider this item
at the September 10, 2018 Committee of the Whole meeting and subsequent September 17,
2018 Regular Meeting.
ATTACHMENTS
Surface Water Billing Transfer to King County Proposal - Cost / Benefit Analysis
Draft Interagency Agreement
44 ZICouncil Agenda ItemsIFinance19.5.18 Finance\KC-SurlWtr billing InfoMemo.docx
Surface Water Billing Transfer to King County Proposal
Cost / Benefit Analysis
August 29, 2018
Estimated Savings 2019 2020
Estimated increased capacity:
(a) Fiscal Technician, front counter cashier 25% $ 21,103 $ 21,787
(b) Fiscal Specialist, utility billing 6% 6,430 6,622
(`) Fiscal Coordinator, utility billing 6% 8,211 8,387
Other anticipated savings:
Postage 5,000 5,000
Billing supplies 2,700 2,700
(d) Improved collections - estimated 20,000 20,000
Total Estimated Savings
Estimated Cost
(e)
(f)
(g)
One-time setup fee
Annual charge:
Per account fee based on 5,100 accounts
1% of revenue collected
More customers meeting low income / disabled
threshold
City
King County
Income Age
Threshold Threshold
$ 32,000 62
$ 40,000 61
Estimated increase at 10% of $11,000 current cost
Net Estimated Savings (Cost)
(a)
(b)
(d
(d)
63,443 $ 64,496
$ 105,624 $
9,180 9,180
52,952 55,600
167,756 $ 64,780
1,100 1,100
$ (105,413) $ (1,384)
Surface water payments constituted 25%-26% of all cashiering transactions in 2017 and 2016.
City will still bill for the 261 City owned parcels, the State owned roadways and the 15 condominium
complexes in the City; the City will also continue collection efforts on the existing deliquent accounts.
Approximately 5% to 10% time savings is projected and is valued based on the 2019 salary and benefit
budget.
Changes in parcel size and use will need to be evaluated for change in fee category; a new file will be
delivered to King County each October 1st for billing in the forthcoming year. Approximately 5% to 10% time
savings is projected and is valued based on the 2019 salary and benefit budget.
Collections on foreclosed properties have ranged from $5,000 to $15,000 in recent years. Also, collection
experience in general is expected to improve since taxpayers will be paying the surface water bill at the same
time, and based on the same bill, as their property tax- often this bill is automatically paid by mortgage
companies. The approximate number and value of deliquent accounts currently is 800-900 and $330,000
respectively.
King County estimates the set-up'fee to be between $47,413 and $105,624; a conservative amount is used in
this estimate.
The actual fee has yet to be calculated and the estimated reange is $1.50 to $1.80. The $1.80 fee per account
is used in this analysis.
The increase in surface water customers eligible for the discount and the cost of the discount is estimated at
10% of the current discounts.
45
46
INTERAGENCY AGREEMENT
BETWEEN KING COUNTY AND THE CITY [JFTukwila
FOR SURFACE WATER MANAGEMENT FEE COLLECTION AND REMITTANCE RELATED SERVICES
This Agreement is made and entered into by King County, Washington, hereinafter referred to as "King
County" or "County" and the City of Tukwila, a Washington municipal corporation, hereinafter referred
to as "Tukwila" or "City," collectively referred to as the "Parties," in order for King County to provide
services to the City for managing the database of the City's surface water management (SWM) service
charge ratepayers, providing customer service related to the City'sSVVK4 service charge, billing the City's
SWIM service charge to City ratepayers, and collecting said charge and transmitting resulting receipts to
the City. The Parties mutually agree as follows:
|. Purpose
The purpose of this Agreement is to set forth the services the Parties agree the County will
provide to the City: 1) management of the City's SWM service charge ratepayer database; 2)
provision of customer services related to the City's SWM service charge; 3) billing of the
City's SWM service charge to ratepayers through the King County Property Tax Statement
and 4) collection of SWIM service charges and transmittal ofreceipts to the City.
U. Administration
A. The City shall appoint one administrator, and the County shall appoint one
administrator from the Water and Land Resources Division ("WLRD") and one
administrator from the Finance and Business Operation ("F8O^) Division, to review
compliance with this Agreement and to resolve any conflicts. The administrators shall
meet as needed, as applicable to the specific issue. Either administrator may convene a
meeting with aminimum often (lO)calendar days' written notice tothe other
administrator, as applicable to the specific issue.
B. Any conflict that isnot resolved bythe administrators within ten (IO)working days ofa
meeting held to discuss the conflict shall be referred for resolution to the City Mayor
and the VVLRD Division Director and/or the FQO Division Director, as applicable tnthe
specific issue. If the conflict cannot be resolved by the City Mayor and the WLRD
l
Division Director and/or the F8O Division Director, it shall be referred to the City Mayor
and the Director of the King County Department of Natural Resources and Parks (DNRP)
and/or the Director of the Finance and Business Operations Division of the Department
of Executive Services, as applicable to the specific issue. This provision shall not be
construed as prohibiting King County or Tukwila from seeking interpretation or
enforcement of the terms of this Agreement, or relief or remedy from a breach of the
terms ofthis Agreement, in law orin equity.
Ui Description ofServices
Services tobeprovided are asfollows:
A. Maintaining and updating the ratepayer database containing information needed to
determine the appropriate annual SWM service charge for each Tukwila account,
including changes to property and/or property owner characteristics. WLRD
automatically receives notifications of new residential parcels and parcel type changes,
such as residential parcels changing to commercial parcels or condominiums, but no
other information related toparcel Vrparcel characteristic changes.
B. Incorporating into the database any changes in the City's SVVM service charge rate
structure, subject to |V.ELZ below.
C. Providing customer service to address questions and issues from City representatives
and ratepayers related to the City's SVVM service charge.
D. Billing of the City's annual SWIM service charge to property owners. The charge shall be
included onthe annual King County Property Tax Statement, which will besent inthe
manner established bvstate law and county ordinance.
'
E. Collecting and transferring to the City receipts from the SWIVI service charge billings.
Receipts will be transferred each business day.
F. King County will also include any delinquent SWIVI service charges on the annual King
County Property Tax Statement and attempt to collect any delinquent SWIVI service
charges for IUyears before referring any uncn||ectab|echarges back tuthe City for
disposition.
B. Providing reports on amounts collected, prior year delinquencies, and SWM account
characteristics as may be provided and/or requested bythe City.
2
|V\ Responsibilities mfthe Parties
A. Upon execution ofthis Agreement, King County will provide the services asdescribed in
Section 111. above, with 2019 as the first year for billing and collecting of the SWM fee.
B. Tukwila:
1. Tukwila has adopted legislation establishing an annual SWIM service charge rate as
set forth in Exhibit One, attached tothis Agreement and incorporated herein and
made a part of hereof. If the City changes its surface water service charge rate for
any given year, it will notify the County of the new rate at least two months prior to
the beginning of the calendar year in which the rate change is to become effective,
allowing time for the County to make necessary adjustments tnthe database.
2. ByOctober 1nfeach year, Tukwila will provide King County, via electronic
document such as a spreadsheet, changes in property characteristics affecting SWIM
service charge accounts (excluding new residential parcels and parcel type changes,
such as residential parcels changing to commercial parcels or condominiums), in
order for such changes tobereflected inthe 'following year's SVVMaccount billings.
3. Tukwila will be responsible for any actions involving a challenge to the validity of the
City's SWIM service charge, including any defense of the City's SWM service charge
raised during any County tax foreclosure proceeding onaTukwila property.
V. Costs and Billing
A. Tukwila will pay anannual per -account fee for SVVMservice charge database
management and customer service. King County may adjust the annual per -account fee
annually (typically between $1.50 to $1.80), based on staff and overhead cost changes
authorized in the adopted King County annual budget. Any increase in the per -account
fees to be charged to the City by King County shall be communicated by written notice
to the City by no later than September 1 of the calendar year prior to the date on which
the rate increase istntake effect.
B. Tukwi|avviUpayaone'timefeeestinnatedtnbebetvveen$47,41Stn$IOS,624,to
convert the King County SWM service charge customer database for Tukwila accounts.
C. King County will send aninvoice tDthe City for the annual per account billing fee
outlined above intwo installments annually (approximately May and 0ctobcr).The one'
time conversion fee will be billed in two installments starting in 2019. The City will pay
invoices within 45days ofreceipt.
D. Pursuant to RCW 84.56.035, Tukwila agrees to pay the County a collection fee equal to
one percent (1%) of all SWIVI service charge revenue collected by the County for Tukwila
under the terms of this Agreement. This collection fee is separate from the per -account
fee authorized in V.A. Twice per year (July and January) based upon collections through
June 30 and December 31. King County Treasury will deduct the one percent collection
fee from receipts collected Vn behalf ofthe City. King County may, within its sole
discretion, change the frequency of the deductions, provided that written notice is
provided tothe City atleast six months before such change isimplemented.
V1. Effectiveness Duration, Termination and Amendment
A. This Agreement is effective upon signature by both Parties and will remain in effect until
December 31,2Q28.
B. This Agreement may be terminated by either Party for the following billing year by
providing written notice by October 1ofthe prior year. In the event oftermination,
payment will bemade by the City for work performed bythe County tothe date of
termination, providedthat for SVVIVIfees billed prior tothe termination date, King
County will continue to collect those previously billed SWIVI fees, make disbursements
tothe City, and retain the collection fee osauthorized 1nSection V.D.
C. This Agreement may beamended only bywritten agreement ofthe Parties.
D. This Agreement is not assignable by either Party, either in whole or in part.
E. This Agreement is a complete expression of the intent of the Parties and any oral or
written representations or understandings not incorporated herein are excluded. The
Parties recognize that time is of the essence in the performance of the provisions of this
Agreement. Waiver of any default shall not be deemed to be waiver of any subsequent
default. Waiver of breach of any provision of this Agreement shall not be deemed to be
awaiver ofany other orsubsequent breach and shall not beconstrued to be a
modification of the terms of the Agreement unless stated to be such through written
approval bythe Parties which shall beattached tnthe original Agreement.
F. Funding or obligation under this Agreement beyond the current appropriation year is
conditional upon appropriation by the County Council and the City Council, respectively,
4
of sufficient funds to support the activities described in this Agreement. Should such
appropriation not be approved, this Agreement will terminate at the close of the last
year for which appropriation has been provided. in such case, the County or City
respectively shall provide prompt written notice to the other Party that no
appropriation has been made for the subsequent year.
VU. General Provisions
A. The failure of either Party to insist upon strict performance of any of the covenants and
agreements contained herein, or to exercise any option herein contained in one of more
instances, shall not be construed to be a waiver or relinquishment of said covenants,
agreements oroptions and the same shall beinfull force 'and effect.
B. Theprovisions of this Agreement are declared to be severable. if any provision of this
Agreement is for any reason held by a court of competent jurisdiction to be invalid or
unconstitutional, such invalidity or unconstitutionality shall not affect the validity or
unconstitutionality nfany other provision.
C. This Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Washington, without reference to its choice of law rules. The
parties hereby irrevocably consent to the jurisdiction of the state courts for King County
and the federal courts for the Western District nfWashington for purposes ofresolving
any dispute under this Agreement and expressly waive any objections as to venue in any
such courts.
D. Sections||`13., |\iB,3.,y.D,V|.B',V11, and V|||shall survive the termination ofthis
V1U. Indemnification
Tukwila shall protect, defend, indemnify, and save harmless King County, its officers,
officials, employees, and agents, while acting within the scope of their employment, from
any and all costs, claims, judgments, penalties, and/or awards of damages, arising out of or
in any way resulting from Tukwila's own negligent acts or omissions in connection with its
obligations under the terms of this Agreement. King County shall protect, defend,
indemnify, and save harmless Tukwila, its officers, officials, employees, and agents, while
acting within the scope of their employment, from any and all costs, claims, judgments,
5
penalties, and/or awards of damages, arising out of or in any way resulting from King
County's own negligent acts or omissions in connection with its obligations under the terms
of this Agreement. Each Party agrees that its obligations under this subparagraph extend to
any claim, demand, and/or cause of action brought by, or on behalf of, any of its employees
or agents. For this purpose' each Party, by mutual negotiation, hereby waives, with respect
to the other Party only, any immunity that would otherwise be available against such claims
under the Industrial Insurance provisions of Title 51 RCW. In the event that a Party incurs
any judgment, award, and/or cost arising therefrom, including attorneys' fees, to enforce
the provisions of this Article, all such fees, expenses, and costs shall be recoverable from the
responsible Party tothe extent nfthat Part/sculpability. This indemnification shall survive
the termination ofthis Agreement.
|X. Counterparts
This Agreement may be executed in counterparts.
the
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
Approved as to Form King County:
By: By:
Title: Deputy Prosecuting Attorney Title: Department Director
Department of Natural Resources and Parks
Approved as to Form
Title: Title:
6
City of Tukwila:
Exhibit One
Tukwila SWM Service Charge Rate Structure
Costs for Billing and Revenue Collection Services Provided by King County
Cost Estimate for SWM Service Billing and Revenue Collection Services
Annual SWM Service Charge Billing (based on 5,100 number of accounts and
estimated 2019 per -account fee of $1.75*)
9,180$
One-time fee not to exceed 105,624 to customize King County database for
Tukwila accounts (Estimated to be between $47,413 to $105,624)
$105,624
Annual Revenue Collection (based on 1% of $5,295,200 estimated annual
revenuer not included in total below)
52,952$
TOTAL
$167,756
*As of the date of execution of the attached Agreement, the actual fee has yet
The estimated range is $1.50 to $1.80).
7
o be calculated for 2018.
53
54
City of Tukwila
Allan Ekberg, Mayor
INFOR ATIONAL E ORANDU
TO: Finance Committee
FROM: Peggy McCarthy, Finance Director
BY: Finance Team
CC: Mayor Ekberg
DATE: August 29, 2018
SUBJECT: Proposed 2019-2020 Biennial Budget
Finance Department and Contingency Fund
ISSUE
Finance Committee to review Proposed 2019-2020 Biennial Budget for Finance Department
(000.05) and the Contingency Fund (Fund 105).
BACKGROUND
The City is committed to developing and passing a fiscally -sound, balanced budget. Two
challenges the City is encountering are 1) sales tax revenue growth of 3% projected for 2018 has
not been realized to date, and 2) sales tax mitigation payments will end in late 2019. As a result,
the City is seeking a balanced budget with expenditure reductions and possible new revenue
opportunities.
DISCUSSION
The Finance Department is the backbone of the City. The Department budgets for and processes
all City financial transactions and analyzes and reports the results. The volume of transactions is
unmatched by any other department within the City.
The 2019-2020 Finance Department budget outlines the Department's many accomplishments in
the 2017-2018 biennium and the goals for the 2019-2020 biennium. It includes the Department's
Priority Based Budgeting programs and the number of staff hours and the budget for each. In
keeping with the City's budgetary goals, the 2019 budget has been reduced by 2.26% from the
2018 budget and the 2020 budget has been held to a 2.84% increase - yielding a net biennial
increase of just .58%, or less than 1%.
55
INFORMATIONAL MEMO
Page 2
Changes in the 2019-202 Finance Department Budget
Staffing levels remain at twelve. In 2018, the Finance Department experienced four vacancies
and all but the Treasury Fiscal Specialist position has been filled. This position was left unfilled
for budgetary purposes and will be reconsidered for recruitment in the fourth quarter of 2018.
Business license processing is scheduled to transition to the State in the first half of 2019. The
transition is expected to reduce the amount of time required by the Business License Fiscal
Specialist to process business licenses. The resulting increased capacity may be used to
enhance grant accounting processes, including conducting outreach and education to other City
departments, update policies and procedures, and audit tax returns.
In response to the Administration's budget reduction request, the biennial budget was reduced
for the extra labor account, the claims and judgment account and a few other accounts. The extra
labor budget, reduced from $60,000 in 2018 to $25,000 in 2019 and 2020, better reflects usage
over the past year. The claims and judgment account was also reduced based on usage.
The 2019 professional services budget includes funding for assistance in determining the City's
arbitrage liability and in updating the indirect cost allocation. Arbitrage occurs when investment
earnings on tax exempt bond proceeds exceed a certain threshold; the excess earnings must be
remitted to the Internal Revenue Service. The indirect cost allocation was developed by the FSC
Group in 2010. The proposed update would modify the model for changes that have occurred
within the City, increase understanding and transparency of the methodologies and calculations
within the model, and simplify the process for updating the model. The 2020 professional services
budget includes funding for assistance from our accounting software provider, Tyler
Technologies, for better utilization of the budget and capital asset software modules and for better
understanding of the accounting system data tables for improved analysis and reporting. It also
includes funding to transition accounts payable and other processes to a more paperless system.
Contingency Fund
The Contingency Funds consists of two reserves — the 10% One-time Revenue reserve and the
10°A) Minimum Fund Balance reserve. Under the Reserve Policy, funding for the 10% One-time
Revenue reserve is discretionary and therefore is not budgeted; funding for the 10% Minimum
Fund Balance reserve is mandatory and is budgeted. Also, the minimum fund balance, exclusive
of the 10% One-time Revenue reserve, must equal 10% of the prior year operating revenue. For
2017, the operating revenue totaled $60,514,326, thus the 2018 ending fund balance will equal
$6,051,432; for 2018, the operating revenue is estimated at $62,000,000 and therefore the 2019
budgeted ending fund balance equals $6,200,000; for 2019, the operating revenue is estimated
at $65,000,000, therefore the 2020 budgeted ending fund balance equals $6,500,000. Should
the operating revenue estimate change for 2018 or 2019, the funding estimate for 2019 and 2020
would also change, respectively.
RECOMMENDATION
Staff is seeking committee feedback on the proposed department budget and direction to forward
it for discussion to the September 10, 2018 Committee of the Whole. Other steps in the overall
budget review process will include Council -led work sessions, the Mayor's formal budget delivery
on October 1st, community outreach, and a public hearing.
ATTACHMENTS
-Draft 2019-2020 Finance Department Budget
-Draft 2019-2020 Fund 105, Contingency Fund Budget
56 Mound Agenda Items1Finance19.5.18 Finance105FIN Info Memo,docx
Finance
Deputy
Finance
Di rector (1)
Fiscal
Manager(l)
Senior Fiscal
Coordinator
Fiscal
Coordinator
Utility Billing
(1)
Fiscal
Specialist -
Utility Billing
Fiscal
Coordinator -
Revenue &
Capital Assets
Fiscal
Specialist -
Payroll (1)
Fiscal
Specialist '
Accounts
Payable (1)
Fiscal
Technician -
Cashiering,
Fiscal
Specialist
Treasury(1)
Fiscal
Specialist
Business
Licenses (1)
58
DEPARTMENT: Finance (05)
FUND: General
RESPONSIBLE MANAGER: Peggy McCarthy
Description
FUND NUMBER : 000
POSITION: Director
The Finance department provides an array of services that include financial data processing, treasury
cash control, utility billing and collection, payroll, accounts payable, accounts receivable, business
licenses, preparation of the biennial budget and Comprehensive Annual Financial Report (CAFR), and
risk management.
The Finance Department also serves as liaison to the State Auditor's Office during the annual audit of
the City's compliance with legal and financial reporting requirements.
2017-2018 Accomplishments — Strategic Goal 4
• Implemented an IVR (internet voice recognition) system so customers can pay their utility bills
using their phone 24/7; also instituted a phone call routing system (phone tree) so phone calls
are received by the appropriate staff more expeditiously.
• Reduced the cashiering front counter hours so the Finance Team can meet together weekly —
promoting communication and teamwork and allowing the cashier to "cash out" the two
cashiering stations by the end of the business day.
• Two City facing SharePoint sites were established — one, Financial Reporting, for monthly
budget to actual reports for departmental and general fund transactions and balances; and
another, Accounts Payable, for bi-monthly departmental expenditure reports posted after each
check run, and other related purchasing information.
The basis for the business license fee calculation was changed from full time equivalent (FTE)
employee hours to a per employee basis. Legislative work was accomplished in a short time
frame. This change has been well received by the business community.
• Managed the park and fire impact fee update process resulting in new rates, better defined rate
categories and a rate model to facilitate future updates.
• An $8.2 million bond was issued to finance residential street projects and the $2.25 million short
term urban renewal debt was refinanced — all at competitive interest rates.
• A $20 million bond was issued to finance the Public Works Shops portion of the Public Safety
Plan; the City's AA stable credit rating by the S&P rating agency was affirmed.
• The initial stages of Priority Based Budgeting were implemented.
• A new forecasting model, Whitebirch, was acquired and is being used for long range financial
planning.
59
� Several financial omanahoa, referred to as financial fnamevvorko, were developed for the Public
Safety Plan to assist in decision making on scope, timing and funding of the project.
* Reporting to the Public Safety Plan Financial Oversight Committee was established and
continues as8Oongoing commitment tOthe [ih/Stransparency.
+ Front counter glass was installed to improve security and safety.
Managed a 30% staff turnover partially due to retirements and hired three new full- time staff.
* Transitioned billing for surface water services to King County to increase collections and create
efficiencies.
Instituted monthly departmental expenditure reporting to the City Council.
� Financial audit completed with no findings and no nl8noQe[OeOt letter items. {9FCA 8vv8rd for
financial statement preparation received.
* Created and distributed ath-fo|d pamphlet, Simple Guide to Finance Department Services"
which has been replicated by several departments.
� Conducted two |aen trainingo led by the State Auditor Office — one on Rink Management
practices and one on the Cash Receipting / Banking process,
+ Finance Team received the Citywide Teamwork in Action Award.
2019-2020 Outcome Goals — Strategic Goal 4
+ Support outreach and successfully administer new revenue streams and/or manage increases
inexisting revenue streams.
w Transition business license administration to the State system.
* U-pgradeVfwork area.
� Continued refinement of the Priority Booed Budgeting and the VVhit8biFoh forecasting rnOdei
Issue the remainder ofthe voted debt and Up10 $25million inlimited tax general obligation
(LTG[) debt in support of the Public Safety Plan.
+ Issue Banking Services RFP to secure a new banking contract.
� Further digitize the financial processes including going oaoereen for daily cash receipt
packets, accounts payableprocessing and journal entry processing and storage.
* Enhance grant accounting services.
+ Complete arbitrage calculations in compliance with Internal Revenue Service regulations.
• Review for potential modification the indirect cost allocation model.
• Revise the City's financial chart of accounts to help facilitate financial reporting and Priority
Based Budgeting.
• Establish convenience fee for processing telephone payments.
• Consider establishing a convenience fee for processing all Finance related credit card
transactions.
• Improve the budgeting process by more fully utilizing the current EDEN budget software or by
other means.
• Utilize the EDEN capital asset module to track and account for the City's capital assets
converting records from existing Excel platform.
• Research and consider billing for water and sewer services every other month rather than
monthly to create efficiencies and reduce costs.
• Research and consider implementing a new utility billing system.
• Change the payroll pay dates to accommodate implementation of new timekeeping systems,
Telestaff and Lucity.
• Establish and document a fleet funding policy.
• Accrue tax revenue on a monthly or quarterly basis to improve financial reporting and analysis.
• Update utility shut-off process by using printed notices in place of handwritten notices. Explore
possibility of mailing notices instead of using door hangers.
2019-2020 Indicators of Success
• Institute new revenue stream or increases to existing revenue streams.
• Support the Public Safety Plan by issuing the remainder of voted debt and additional councilmanic
debt.
• Streamline processes by implementing Tyler Cashiering System, incorporating new banking
features and converting daily cash receipt packets from paper to electronic.
61
62
Performance Measures
Finance
'
Aou'a]
Projected
2016
2017
Estimated
2018
2019
2020
Number and value oftransactions processed
at the front counter
31.789
$3.539.698
30.108
$ 36,172,422
31.000
$ 39.00I000
31`000
$ 38.000,000
21.000
$ 40.000,000
Accounts payable transactions processed
annually
1*`816
15.555
10.221
16/915
17.648
Number ofwater, sewer and surface water
bills mailed
43.650
44.035
*4.435
50.000(a)
30,000*/
Shut off notices distributed annually,
410
458
43*
450
450
Approximate number cfpayroll transactions
10.995
11.205
11.419
11.637
11.858
Number nfbank account entries recorded nr
reconciled annually
17.582
18.003
18.434
18,875
18.327
Number ofbusiness licenses processed
2`857
3`6*7
3.700
5`753
3,864
$V Areduction m,approximately 10,0OObills ifsurface water billing istransferred mKing County
Budget Change Discussion:
Salaries and Benefits COLA and step increases were applied to salaries, and benefits were adjusted to
account for changes inhealthcare and retirement. |Extra labor was decreased tomore accurately reflect
historical usage. /\dditiOO8||y. the Treasury Specialist position will bereconsidered for recruitment in the
fourth quarter of2O1O.
Supplies and Services Claims and Judgements and Professional MennbarohipovveneredUUedinovder
to bring the budget for each more closely in line with historical trends. The department also seeks to
reduce expenditures for travel, credit card fees, office supplies, and various communications expenses.
Department Detail:
Staffing and Expenditure by Program
PROGRAMS
FTE
BU DG ET
PERCENT
2019
2020
2019-20
Insurance & Risk Management
0.33
759706 775811
2.12%
Financ1a|Repordng/[AFR/Audit
0.75
218,804 229105
4.71%
Utility Billing
1.70
210,949 216,301
2.54%
Caohie/ing/Trea*ury/8anNng/UndaimedProperty
2.12
209,576 213,696
1,92%
Payroll &BenefitAdministration
1.37
196636 208'803
3.6%
Accounts Payable/Juror Payments/CTR/SCORE/Va||eyCorn
I.46
182,024 108,300
3.45%
Business License Administration
1.05
124948 61459
-50.81y&
Budget Preparation
0.67
123,032 143,213
16.4196
Administradon/[ommunication/Teombui|dinQ
0.37
75,381 77,097
2.28%
Debt Management
0.30
67,523 54,438
-19.30%
Financial Reporting & Analysis for Departments
0.31
63,362 67,061
5.84%
GL/EdenAdm|nistraton
0.24
59,329 67,174
19.22%
AccountuReceivab|e/Minc. Billings/LID
0.38
51/49 55,324
7.53%
Grant Accounting
0.37
50,967 72,809
42.80&
Sales & Other Taxes
0.30
5I947 96838
90.07V&
Public Safety Plan
0.30
48,928 51,216
4.5896
Capital Asset Accounting
0.77
42,762 49,600
15,99%
|nvestment/[a«hK8onagement/repmrting
0.30
4I020 41,522
I75%
Indirect Cost Allocation
0.12
33,489 15\620
'41.41%
Long -Range Financial Planning Model
0.10
33,096 33,826
2.2I&
Training &Development
0.I8
26,498 27,197
2.640
Emergency Preparedness
0.01
1,678 1,773
5.66Y&
PROGRAK8TOTAL3
12,00
2,671,195 2,747,185
2.8%
*Priority Based Budgeting was implemented beginning with the zozs 2n2pbiennium budget.
Therefore, no historical data is available.
Expenditure Summary
` _--_- ---_---
Expenditures nvType
Axtua/
' _ _
. �
auonot
~,
Percent Change
ona
2017
Projected
2018
mmm
2019
eouo
2018-19
2019-20
ealonosuWages
Personnel Benefits
Supplies
Services
m
993,607
376.194
32.309
735`518
o
1.055.190
416.263
20,280
915.528
$ 1.070.965
423,367
*5.427
1.05e.0*7
$ 1.143.:41
470.776
24,000
1.094.396
a 1.162.381
456,842
23.100
1.028,872
$ 1.202,770
*76.144
23.100
1.0*5.171
1,62m
-2.96%
-3.75%
-5,9em
3.47m
4.23%
0.00%
1.58m
oepartne"tTvta|
*
e.137.6e8
$
x.*or.coc
$ 2.597.801
$ 2.733.018
$ 2,671.195
o 2,747,185
's,zom
c'n*%
64
Expenditure Detail - Salaries and Benefits
Salaries are based on actual costs for eXSdnQ positions and include o cost of living odivatnerd per
contract agreements.
Position
Description
2018
FTE
2019
FTE
2019BudQated
Se|ehee Benefits
2020
FTE
2020BudQated
Salaries Benefits
Finance Director
1
1
* 159.004
$ 49.120
1
$ 162.168 G
50.472
Deputy Finance Director
1
1
132.511
45.028
1
135.108
46,283
Fiscal Manager
O
1
110,800
38.757
1
118.704
41.197
Senior Fiscal Coordinator
1
1
100.825
37,290
1
108.008
39,618
Fiscal Coordinator
3
2
202.673
68.502
2
211.588
71.713
Fiscal Specialist
5
5
371`923
179.904
5
381.314
187.119
Fiscal Support Technician
1
1
40.544
34,767
1
50.878
36.288
Extra Labor
25.000
2.478
25.000
2.478
Overtime
10.000
991
10.000
891
DeportmnntTota|
12
12
$1,162'381
$ 456'842
12
$1'203,770 u
476'144
Expenditure Detail — Supplies, Services and Other
Supplies include miscellaneous office supplies; include 8nnU@| audit fees, liability insurance,
software maintenance costs, travel, claims &judgments, subscriptions, and memberships, among others.
Account Number
xvma/
anuep
oom
2017
Projected
uma
2018
2019
muo
000�05.514.230.31o0 auppnea-offioe
000.05.51*230.35o0 amaUTooyaspv/pmem-squ/pmemm
improve functionality and processes
m 26,306
6,003
m 16.3/8
3,902
m 39,950
5,477
u 19,000
5,000
S 18.100
5,000
m 18,100
o`000
Total Supplies
32,309
20,280
*y.*cr
24'000
23'100
23.100
000.05.51*�230,*1.00 Prof Svcs Annual audit from State ofwm
Auditor's Office, Consultant inun1ofor
arbitrage calculations, indirect 'cost
allocation and monxofor budget and fixed
asset Eden modules ornew software,
Crystal Reporting
000»5.514.230,41o/ Prof Svcs 'M/onmexsales tax auditing
program
000.05.51*.230AZOo Communications Postage, delivery
service, mtemetcard
000.05�514.230.43.00 Travel ' Meals, parking, mileage for
wFoA. porcm.scmwamtm|nino
000.05.514.230.45�00 Rental - Copier lease
000,05.514.230.46.00 Insurance Boiler and machinery
000.05.514.230.**.01 mouranca-uommy.urimeonu,mooty
000.05�14.230,48o0 R&M Folding machine, other equipment,
�uu.sdenyvftwomannua|m�msnenco
000o5.*1*230.49.00 miac'Annual memberships, uro*.
wpox,armor car oewoe.registrations
noo.us.s14.oun.*n.onmiso-Cla/mamiuugmanta
000.05a14.230.49.08 mi,c-pp|cnuuuard fees
138.681
1.685
s*
4se/
'
3.28*
7.571
330,968
anTa�
'
18.09/
160.514
10.291
273.471
1.320
oro
y.00a
3,002
7.549
345.10e
�^//�u'
27,090
89,100
11.636
154.397
5,000
480
�402
1.014
e.283
389,236
rr' rrr
67,942
334.702
12.813
1e5,000
*.000
1.000
10.000
3,500
13.100
385,996
a�nou
45,900
382,000
14.000
18e.000
-
600
8,000
3,500
8.100
386.772
78,900
25,000
320,000
12.000
186'000
mm
8.000
u'aon
8.100
*nu.xo*
81.662
25,000
uan/noo
12.000
Tote /Services
735.518
e15^529
1.058.047
1'094.396
1.028.872
/.045.171
Total Supplies, Services and Other
$ 7e7,827
$ 935,809
$1.103.*74
s1.118.396
y1,051.972
$1.068.271
DEPARTMENT: N/A
FUND: Contingency Fund
RESPONSIBLE MANAGER: Peggy McCarthy
Description
DIVISION: N/A
FUND NUMBER: 105
POSITION: Director
Sufficient fund balances and reserve levels are important for the long-term financial stability of the City.
This fund provides for a reserve fund balance equal to or greater than 10% of the previous General Fund
on -going revenue, exclusive of significant non -operating, non -recurring revenues such as real estate
sales or transfers in from other funds. Amounts held in this fund can be used for more restrictive,
emergency type purposes. All expenditures from this fund require Council approval. This fund is reported
as a sub -fund of the general fund in the City's Comprehensive Annual Financial Report.
Expenditure & Revenue Summary
Continqencv Fund
Actual
Budget
%Change
2016
2017
Projected
2018
2018
2019
2020
2018-19
2019-20
Operating Revenue
Investment Earnings
Transfers In
$ 29,666
433,682
$ 45,736
180,715
$ 77,582
92,672
$ 20,000
-
$ 90,000
58,568
$ 90,000
210,000
350.0%
0.0%
0.0%
258.6%
Total Revenue
463,349
226,451
170,254
20,000
148,568
300,000
642.8%
101.9%
Operating Expenses
Total Expenses
-
-
-
-
-
_
-
-
Beginning Fund Balance
Change in Fund Balance
5,587,275
463,349
6,050,624
226,451
6,277,075
170,254
5,874,563
20,000
6,447,329
148,568
6,595,897
300,000
9.7%
642.8%
2.3%
101.9%
Ending Fund Balance
10% One-time Revenue
Remainder/Main Resene
257,382
5,793,242
395,897
5,881,178
395,897
6,051,432
n/a
n/a
395,897
6,200,000
395,897
6,500,000
-
-
0.0%
4.8%
$6,050,624
$6,277,075
$ 6,447,329
$ 5,894,563
$6,595,897
$ 6,895,897
11.9%
4.5%
67
68
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL E ORANDU
TO: Finance Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
CC: Mayor Ekberg
DATE: August 29, 2018
SUBJECT: Urban Renewal and General Government Improvement Fund 2019-2020
Proposed Budget
ISSUE
As provided for in the budget process approved by the Finance Committee, Council Committees
will be reviewing budget sections prior to review by the full Council. The Urban Renewal and
General Government funds section of the budget is ready for review by the Finance Committee.
BACKGROUND
The Urban Renewal fund is utilized to provide future funding needs to encourage redevelopment
in specific areas throughout the City. Current projects tracked in this fund include Tukwila Village.
The General Government Improvement fund is used for improvements, additions, or other
miscellaneous minor capital projects not provided for elsewhere. Projects that benefit multiple
departments or functions are given priority.
DISCUSSION
Urban Renewal:
The proposed budget reflects minor costs associated with Tukwila Village. Transfers out are
transferring out existing fund balance to the general fund to cover the cost of a one-time project
for the fire department. Fund balance exists due to previous year land sale revenue
General Government Improvements:
The proposed budget includes a transfer in of $300 thousand each year, which represents an
increase of $100,000. Planned projects include siding and roof repairs at both TCC and City Hall.
RECOMMENDATION
Staff recommends that the Finance Committee forward these sections of the budget on to the
Committee of the Whole for review. If there are no recommended changes, Council consensus
will be requested to move this budget forward to the final budget package in November.
ATTACHMENTS
Draft Urban Renewal and General Government Improvement Funds 2019-2020 Proposed
Budgets
CIP pages
69
70
DEPARTMENT:
FUND: Urban Renewal
RESPONSIBLE MANAGER: Henry Hash
Description
FUND NUMBER: 3O2
POSITION: Director
The Urban Renewal fund has been established to provide future funding needs to encourage
redevelopment in specific areas throughout the City.
2017-2018 Accomplishments
+ Closed sale Vfphase one land toTukwila Village developer.
* Completed construction ofphase 1 and held community celebration.
* Formed a non-profit nonlnlunib/ organization to manage the Sullivan Center.
* City Council selected HealthPoint to develop a new Health and Wellness Center which will include
primary care medical, danto|, behavioral health and other services.
2019-2020 Outcome Goals
+ Complete the final phase OfTukwila Village.
* Execute opurchase and sale agreement with Hea|thPo|nt
w Sell the former Traveler's Choice motel property.
* 8e|| the former Nevvporter yNnte| property.
2O19'2O2OIndicators mfSuccess
+ Tukwila Village iacompleted.
+ City and Hgo|thPointexeoute G purchase and sale agreement.
* City sells Traveler's Choice and Newporter sites.
72
Revenue and Expenditure Summary
Urban Renewal
2016
Actual
2017
2018*
2018
Budget
2019
2020
Percent Change
2018-19 2019-2020
Operating Revenue
Miscellaneous Revenue
Investment Earnings
$ 2,706
$ 12,252
$ 21,206
$ 3,600
$ 10,000
$ 10,000
177,78%
0,00%
Interfund Loan Received
-
-
-
-
-
-
Other Misc Revenue
-
-
-
-
-
-
0.00%
0,00%
Total Miscellaneous Revenue
2,706
12,252
21,206
3,600
10,000
10,000
177.78%
0.00%
Total Operating Revenue
2,706
12,252
21,206
3,600
10,000
10,000
177,78%
0.00%
Capital Project Revenue
Sale of Tukwila Village/Phase 1
-
-
-
4,311,000
-
-
0.00%
0.00%
Total Revenue
2,706
12,252
21,206
4,314,600
10,000
10,000
-99.77%
0.00%
Capital Projects
Tukwila Village
17,553
50,314
9,811
15,000
15,000
15,000
0.00%
0.00%
City Facilities
34,059
-
-
21,000
-
-
0.00%
0.00%
TIB Redevelopment
845,599
3,810
3,500
-
20,000
-
0.00%
0.00%
Total Capital Projects
897,211
54,124
13,311
36,000
35,000
15,000
-2.78%
-57.14%
Transfer to General Fund
-
300,000
-
6,050,000
200,000
200,000
-96.69%
0.00%
Total Expenses
897,211
354,124
13,311
6,086,000
235,000
215,000
-96.14%
-8.51%
Beginning Fund Balance
3,441,546
2,547,041
2,205,169
1,747,306
2,213,064
1,988,064
26.66%
-10.17%
Change in Fund Balance
(894,505)
(341,872)
7,895
(1,771,400)
(225,000)
(205,000)
-87.30%
-8.89%
Ending Fund Balance
$ 2,547,041
$ 2,205,169
$ 2,213,064
$ (24,094)
$ 1,988,064
$ 1,783,064
-8351.28%
-10.31%
*Projected
73
Expenditure Detail — Supplies, Services and Other
Services include costs associated with the Public Safety Plan, consulting, and engineering. Capital
includes the purchase of property and costs associated with urban renewal projects.
Urban Renewal
Account Number
2016
Actual
2017
2018*
2018
Budget
2019
2020
302.98.518.200.41.00
302.98.518.200.43.00
Prof Svcs - Feasibility study
Travel - Mileage, parking
33,357
-
-
-
-
-
-
-
-
-
-
-
302.98.518.200.44.00
Advertising - Bid ads
702
-
-
-
-
-
302.98.518.200.49.00
Misc - Tukwila Village
-
5,521
-
-
-
-
302.98.559.300.41.00
Prof Svcs - Consulting, engineering
775,434
38,121
-
-
-
-
302.98.559.300.43.00
Travel -
12
-
-
-
-
-
302.98.559.300.45.00
302.98,559.300.47.00
Rental-TIB redevelopment
Public Utilities - TIB redevelopment
1,530
69
-
-
-
-
-
-
-
-
-
-
302.98.559.300.47.21
Public Utilities - TIB redevelopment
(97)
85
-
-
-
-
302.98.559.300.47.22
Public Utilities - TIB redevelopment
248
-
-
-
-
-
302.98.559.300.47.25
Public Utilities - TIB redevelopment
10,964
117
-
-
-
-
302.98.559.300.47.26
Public Utilities - 11B redevelopment
12,285
10,281
-
-
-
-
302.98.559.300.49.00
Misc - TIB redevelopment
632
-
-
-
-
.
302.98.594.180.41.00
Prof Svcs - Consulting, engineering
-
-
3,695
25,000
-
.
302,98.594.190.47.25
Utilities -Water/sewer
-
-
201
-
-
_
302.98.594.190,47.26
Utilities - Surface water
-
-
9,415
-
-
-
Total Services
835,135
54,124
13,311
25,000
-
-
302.98.594.180.61.00
Capital - Land (Right of Way)
-
-
-
11,000
35,000
15,000
Total Other
-
-
-
11,000
35,000
15,000
Total Supplies, Services and Other
$ 835,135
$ 54,124
$ 13,311
$ 36,000
$ 35,000
$ 15,000
*Projected
74
DEPARTMENT: N/A
FUN[]: General Government Improvement
RESPONSIBLE MANAGER: Henry Hash
FUND NUMBER: 3O3
POSITION: Director
Description:
The General Government Improvement fund iaused for improvements, additinno.orothernn|smel|aneouo
minor capital projects not provided for elsewhere. Projects which benefit multiple departments or
functions will be given priority.
3017'2018Auccornp|ishnmmnts
* Remodeled Technology and Innovation Services office area.
* Completed additional card access security atCity Hall.
# Repaired brick walkway grout at City Ho|| and Tukwila Community Center.
* Completed HVACimprovements toCity hall and O30OBldg.
+ Completed Phase | of Tukwila Community Center aiding repairs.
2O13'2O20Outcome Goals
+ Improve conditions of existing facilities.
2O19-3O2DIndicators mfSuccess
* Complete siding/roof repairs at City Hsdi
+ Complete siding/roof repairs at Tukwila Community Center.
76
Revenue and Expenditure Summary
General Government Improvements
2016
Actual
2017
2018*
2018
Budget
2019
2020
Percent Change
2018-19 2019-20
Operating Revenue
Miscellaneous Revenue
Investment Earnings
$ 1,156
$ 2,487
$ 3,113
500
$ 500
$ 500
0.00%
0.00%
Total Miscellaneous Revenue
1,156
2,487
3,113
500
500
500
0.00%
0.00%
Total Operating Revenue
1,156
2,487
3,113
500
500
500
0.00%
0.00%
Transfers In
200,000
200,000
200,000
200,000
300,000
300,000
50.00%
0.00%
Total Revenue
201,156
202,487
203,113
200,500
300,500
300,500
49.88%
0.00%
Operating Expenses
Salaries & Wages
45,719
40,576
15,349
101,487
111,312
114,072
9.68%
2.48%
Personnel Benefits
15,239
13,525
3,837
29,153
41,782
43,943
43.32%
5.17%
Supplies
-
0.00%
0.00%
Services
-
-
-
-
-
-
0.00%
0.00%
IntergoVt Services & Taxes
-
-
-
-
-
0.00%
0.00%
Total Operating Expenses
60,958
54,101
19,186
130,640
153,094
158,015
17.19%
3.21%
Projects
Fire Station #51 EOC Remodel
3,811
-
-
-
-
0.00%
0.00%
6300 Bldg - TIS Remodel
48,331
-
-
-
0.00%
0.00%
Fire Station #53 Replace Carpet
-
11,806
i
-
-
-
0.00%
0.00%
Police Vehicle Evidence Storage
42,451
-
-
-
-
0.00%
0.00%
6300 Water Service Replace.
45,716
-
-
-
-
-
0.00%
0.00%
City Hall Siding/Roof Repairs
456
16,806
-
-
100,000
-
0.00%
0.00%
TCC Siding/Roof Repairs
17,208
63,058
150,000
-
150,000
-
0.00%
0.00%
City Hall Card Access/ADA
12,801
29,132
-
-
-
0.00%
0.00%
City Hall HVAC
18,984
-
-
0.00%
0.00%
6300 Bldg HVAC
-
-
20,984
-
-
0.00%
0.00%
Concrete Repairs
16,371
-
-
-
-
0.00%
0.00%
Misc projects
6,513
2,355
25,000
69,360
50,000
141,985
-27.91%
183.97%
Total Projects
145,327
171,488
214,968
69,360
300,000
141,985
332.53%
-52.67%
Total Expenses
206,285
225,589
234,154
200,000
453,094
300,000
126.55%
-33.79%
Beginning Fund Balance
397,033
391,904
368,802
244,055
337,761
185,167
38.40%
-45.18%
Change in Fund Balance
(5,129)
(23,102)
(31,041)
500
(152,594)
500
-30618.80%
-100.33%
Ending Fund Balance
$ 391,904
$ 368,802
$ 337,761
$ 244,555
$ 185,167
$ 185,667
-24.28%
0.27%
*Projected
77
Expenditure Detail - Salaries and Benefits
Salaries are based on actual costs for existing positions and include a cost of living adjustment per
contractual agreements.
General Government Improvements
Position
Description
2018
FTE
2019
FTE
2019 Budgeted
Salaries Benefits
2020
FTE
2020 Budgeted
Salaries Benefits
Project Manager
1
1
$ 111,855 $ 41,592
1
$ 114,072 $ 43,105
Department Total
1
1
$ 111,855 $ 41,592
1
$ 114,072 $ 43,105
Expenditure Detail - Supplies, Services and Other
All budgeted expenditures in the 2019-2020 biennium are anticipated to be capital project related.
General Government Improvements
Account Number
2016
Actual
2017
2018*
2018
Budget
2019
2020
303.98.518.300.31.00 Small Tools - Repair related
$ 73
$ -
$ -
$ -
$ -
-
303.98.521.230.31.00 Supplies - Office & Operating
326
-
-
-
-
-
303.98.594.110.35.00 Supplies - Office & Operating
-
-
19,935
-
-
-
303.98.594,180.35.00 Supplies - Office & Operating
-
-
137,705
-
-
-
Total Supplies
399
-
157,640
-
-
-
303.98.518.300.41.00 Prof Svcs - Consulting, etc.
4,146
-
15,732
-
-
-
-
-
303.98.518.300,48.00 R&M - City Hall siding/roofing repair
303.98.521.230.48.00 Prof Svcs - PD Vehicle Evidence Storage
303.98.522.100.48.00 R&M - FS 53 replace carpet
57,944
39,870
3,811
333
11,439
-
-
-
-
-
-
-
-
-
303.98.575.500.41.00 R&M - TCC siding/roofing repair
303.98.575.500.48.00 Prof Svcs - TCC siding/roofing repair
16,692
-
1,680
61,178
-
-
-
-
-
-
-
303.98.594.180.41.00 Prof Svcs - General services
-
-
-
20,000
20,000
20,000
303.98.594.180,48.00 R&M - Repair to various City facilities
-
25,675
-
-
-
Total Services
122,463
116,037
-
20,000
20,000
20,000
303.98.594.180.65.00 Capital - Various minor construction
11,509
42,241
-
130,000
200,000
200,000
303.98.594.480.65.00 Capital - Howard Hanson Dam
270
-
-
-
-
303.98.594.240.65.00
11,779
42,241
-
130,000
200,000
200,000
Total Supplies, Services and Other
$ 134,641
158,277
$ 157,640
$ 150,000
$ 220,000
$ 220,000
*Projected
78
CIP
Page # PROJECT TITLE
44 Tukwila Village
45 TIB Redevelopment (Motels)
City of Tukwila
CAPITAL IMPROVEMENT PROGRAM
for
2019 - 2024
URBAN RENEWAL
302 Fund
**Other After Six
2019 2020 2021 2022 2023 2024 TOTAL Sources Years
15 15 0 0 0 0 30 0 0
20 0 0 0 0 0 20 2,250 0
Grand Total
Changes from 2017 to 2019 CIP:
None.
35 15 0 0 0 0 50 2,250 0
** Denotes other funding sources, grants, or mitigation.
2019 - 2024 Capital Improvement Program 43 8/29/2018 79
CITY OF TUKWILA CAPITAL PROJECT SUMMARY
PROJECT: Tukwila Village Project No. 800302e2
T�C���Ui��70o���pm���Tuk�a|n�ma��|Bo���a�8�h1��O�����
D���RUPTu]m'
� intended for a mixed -use development including a library, plaza, office, retail, and other amenities.
JUSTIFICATION: The new development will help revitalize the neighborhood.
The library and Phase 1 (Buildings Dand E.Sullivan Center, and plaza) were completed in2O17. Final land
STATUS: sale should occur inearly 2O19.Building Awill re -start construction inlate 20U8and open in2O1S.Building 8
will open in2O2Q.
MAINT. IMPACT:
Land sales reflect the Library for $500,000 in 2015. Sale of land to Tukwila Village developer for $4.5m and
COMMENT: Nmmportermotel site for 31mare shown elsewhere inthe CIP. The Gregor House (estimated at $300,000)is
not anticipated tobesold and therefore not shown.
FINANCIAL Through Estimated
in $000's
BEYOND TOTAL
EXPENSES
Design/Engineering
Land(R88O
Construction
TOTAL EXPENSES
1.756
7,598
230
e.au«
50
O
sV
15
1*
15
15
o
n
n
n
o
1756
7.658
230
9,64*
FUND SOURCES
Awarded Grant
Proposed Grant
Land Sale
Bonus
City Qper.Revenue
500
5,550
3`554
30
15
15
V
O
O
O
'
O
0
O
500
5,550
3`594
���m ��o�x
��
44
CITY OF TUKWILA CAPITAL PROJECT SUMMARY
2019 to 2024
PROJECT: TIB Redevelopment (Motels) Project No. 91330201
DESCRIPTION: Tukwila International Blvd (TIB) Redevelopment Project is for the acquisition and disposition of properties
within and adjacent to the City's Urban Renewal Area.
JUSTIFICATION: Improve the neighborhood's safety by eliminating the high amounts of crime associated with the Boulevard
Motel, Great Bear Motel, Smoke Shop, Spruce Motel, and Travelers Choice Motel.
STATUS: City completed acquisition in 2015 and demolition in 2016. HealthPoint is planning to develop a new
health and wellness center on the majority of the site. City will sell the Travelers Choice separately in 2020.
MAINT. IMPACT: Upkeep of property until development.
COMMENT: Debt service costs are not shown below (see Attachment A).
FINANCIAL Through Estimated
in $000's
2017 2018 2019
2020 2021 2022 2023 2024 BEYOND TOTAL
EXPENSES
Engineering
394
394
Land (R/W)
5,205
30
20
5,255
Const. Mgmt.
175
175
Construction
607
607
TOTAL EXPENSES
6,381
30
20
0
0
0
0
0
0
6,431
FUND SOURCES
Awarded Grant
0
Land Sale
2,250
2,250
Bonds
6,100
6,100
City Oper. Revenue
281
30
20
(2,250)
0
0
0
0
0
(1,919)
TOTAL SOURCES
6,381
30
20
0
0
0
0
0
0
6,431
IGIS
2019 - 2024 Capital Improvement Program
45
81
82