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HomeMy WebLinkAboutFIN 2019-09-09 COMPLETE AGENDA PACKETCity of Tukwila Finance Committee O Thomas McLeod, Chair O Verna Seal O De'Sean Quinn AGENDA Distribution: T. McLeod V. Seal D. Quinn K. Hougardy D. Robertson K. Kruller Z. Idan Mayor Ekberg D. Cline R. Bianchi C. O'Flaherty A. Youn L. Humphrey MONDAY, SEPTEMBER 9, 2019 — 5:30 PM HAZELNUT CONFERENCE ROOM (At east entrance of City Hall) Item Recommended Action Page 1. PRESENTATION(S) 2. BUSINESS AGENDA a. 2019 2nd Quarter sales tax and miscellaneous revenue report. a. Discussion only. Pg.1 Aaron Williams, Fiscal Coordinator b. July 2019 departmental budget-to-actuals report. b. Discussion only. Pg.9 Jeff Friend, Fiscal Manager c. Update on Priority Based Budgeting and performance measures. c. Discussion only. Pg.15 Vicky Carlsen, Finance Director 3. MISCELLANEOUS 4. ANNOUNCEMENTS Next Scheduled Meeting: Monday, September23, 2019 6 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 MEMORANDUM TO: Finance Committee FROM: Vicky Carlsen, Finance Director BY: Aaron Williams, Fiscal Coordinator CC: Mayor Ekberg DATE: September 9, 2019 SUBJECT: Sales Tax & Misc Revenues - 2nd Quarter 2019 Year Over Year Sales Tax Comparison: e1- Sales Tax in $1,000's 2018 Actual 2019 Actual YOY Change I I I I I Other -- Month - j other j Total j other j Total Construction j Industries j Total Collect- Construe-; Construe-; ed Rec'd tion 1 Industries j tion 1 Industries j Amount % 'Amount % j Amount % Jan Mar $ 116 1 $ 1,222 1 $ 1,339 $ 140 1 8 1,225 j $ 1,365 $ 23 20%i $ 2 0%i $ 26 2% Feb Apr 128 1,211 1,338 62 1,252 j 1,314 (66) -51°%I 41 3%i (25) -2% Mar May 131 ; 1.487 ; 1,618 102 ; 1.565 ; 1.668 (29) -22%; 78 5%; 50 3% Q-1 Totals $ 375 1 3,920 1 $ 4,295 $ 304 1 4.042 1 $ 4,346 $ (71) -19%l 122 3%1 $ 51 1% Apr Jun 122 j 1,349 j 1,471 119 j 1,447 j 1,566 (3) -2%i 98 7%j 95 6% May Jul 134 ; 1,492 ; 1,626 147 ; 1,356 ; 1,503 13 9%; (136) -9%; (123) -8% Jun Aug 139 i 1.682 1,821 204 ! 1,647 1.851 65 47%! (35) -2%; 29 2% Q-2 Totals $ 395 j 4,524 j $ 4,919 $ 470 i 4.450 i $ 4,920 $ 74 19%i (73) -2%j $ 1 0% Jul Sep 136 : 1,678 ; 1,814 - Aug Oct 124 . 1,682 ! 1,805 1 I - I I Sep Nov 1631 1.619 1.782 I I - I 1 Q-3 Totals $ 423 I 4.979 $ 5,402 $ - - $ - $ - 0%1 - 0%1 $ - 0% Oct Dec 129 ; 1,446 ; 1.574 - Nov Jan 1521 1,487 1,639 I I - I I Dec Feb 149 j 1.916 j 2.065 I I - I I Q-4 Totals $ 429 ; 4,849 ; $ 5,278 $ - $ - $ - 0%; - 0%: $ - 0% Totals $ 1.623 ! 18.271 , $19,895 $ 774 ! 8.492 1 $ 9,266 $ 3 0%! 48 0%! $ 52 O% Through the second quarter of 2019 sales tax is up $51,663 compared to the same period of 2018. The Construction related sales tax has rebounded from the first quarter and is currently $3,500 greater than the first half of 2018. While construction sales tax has recovered, other sectors are still down year -over -year. Retail Trade and Wholesales Trade sales taxes are down $93k or (2.3%) and $92k or (13.9%), respectively. On the upside, sales taxes for Services is $109k or 3.7% higher than the prior year continuing the positive trend the City has experienced over the past few years in the Services sector. It is also noteworthy that during the past two months the City has not received any Metro bus delivery related sales taxes and we're still meeting budget. During 2018 and 2019 (ytd) the bus manufacturer related sales taxes has totaled $1.06 million, received primarily in 8 out of the past 14 months. INFORMATIONAL MEMO Page 2 Budget to Actual Sales Tax Comparison: Schedule I - Sales Tax in $1,000's 2018 2019 Variance -- Month - Actual Allocated Actual Collected Rec'd Budget Amt % Jan Mar $ 1.339 $ 1,339 $ 1,365 26 2% Feb Apr 1,338 $ 1,338 $ 1,314 (25) -2% rvlar Ivlay 1,618 $ 1,618 $ 1,668 50 3% Q-1 Totals $ 4,295 $ 4,295 $ 4,346 $ 51 1% Apr Jun 1,471 $ 1,471 1,566 95 6% May Jul 1,626 $ 1,626 1,503 (123) -8% Jun Aug 1,821 $ 1,821 1,851 29 2% Q-2 Totals $ 4,919 $ 4,919 $ 4,920 $ 1 0% Jul Sep 1,814 $ 1,814 Aug Oct 1,805 $ 1,805 Sep Nov 1,782 $ 1,782 Q-3 Totals $ 5,402 $ 5,402 $ - $ - 0% Oct Dec 1,574 $ 1,574 Nov Jan 1,639 $ 1,639 Dec Feb 2,065 $ 2,066 Q-4 Totals $ 5,278 $ 5.279 $ - $ - 0% Totals $ 19,894 $ 19,894 $ 9,266 $ 52 0% The 2019 budget for sales taxes is $19.894 million, which is nearly equal to total collections for 2018. Through the second quarter of 2019 sales tax collections are $51,668 greater than the budget. This only slightly improves on the first quarter results, with the second quarter adding $866 greater than budget. 2 INFORMATIONAL MEMO Page 3 $150,000 $100, 000 550.000 5- 5(5o,CC4) 5(100,000) $ (1513, 00 0) Construction 53,445 INENEMPIPER Change YTD by Category Transport / Warehousing $2,972 Ms nufacturirg ${11,423H Automotive 5125,299 11.011) Whoresale Trade Retai Trade 5(90,213) ${93,011) Services 51Cr3,151 Pvfiscel9aneaus 55,444 The chart above compares the prior year-to-date totals to the current year-to-date totals for the eight major categories of sales tax. Two categories are performing significantly better than the prior year, Automotive and Services. Automotive is primarily driven by the bus manufacturer sales taxes, from which the City has received over $400k YTD. The Services category reflects a continued trend of growing sales tax collections related to food services and entertainment activities. On the flip side, there are two categories that are underperforming compared to the prior year, Wholesale trade and Retail trade. The decline in these two groups can be partly attributed to unanticipated events that occurred during the first quarter (snowstorm, tax law changes, federal gov't shutdown). Additionally, economic forecasts for 2019/2020 did anticipate slower growth in the US economy due to uncertainty surrounding federal tariffs and interest rates, resulting in lower consumer spending in general. 3 INFORMATIONAL MEMO Page 4 Schedule 11 - YTD sales tax collections - top ten industry classifications Group Name 722 Food Services, Drinking Places 452 General Merchandise Stores 44o Clothing and Accessories 441 Motor Vehicle and Parts Dealer 236 Construction of Buildings +m Electronics and Appliances 423 Wholesale Trade. Durable Goods 444 Building Material and Garden 4Ea Miscellaneous Store Retailers 721 Accommodation YTD Current 1,011,594 917,603 871,694 oez51* E�46.no1 493,413 wm.1'IS «15,499 *m5,soa YTD Dollar % 973,229 �6E�,467 935,21E 557,218 51«.s2r 5o0,4{e SE��,B5 *03�.ann 1171,275 326,911 3A, 3E 5 (4rWw) (6»sz1) 125,»m 31,504 (7, 0 0 6) (m.�W) 12,185 34,233 27,214 These top ten industry classifications remain relatively stable from prioryeano. As noted on the prior page, the VVho|eno|e Uada and Retail trade groups are underperforming compared to the prior year. Several of these groups fall into those categories, ino|udinQ452-Ganona| Merchandise, 448-Clothing and Accessories and 428- VVhu|eaa|mTrade, Durable Goods. Schedule III - YTD ten largest declines ($) in sales tax collections by industry class Group Name 423 Wholesale Trade, Durable Goods 448 Clothing and Accessories 07 To|ooumrnunicodona *su General Merchandise Stores wn Sporting Goods, Hobby, Books szu Credit Intermediation oaa Economic Pmgnanna Adrnin 454 Nunatore Retailers zm Specialty Trade Contractors 541 Professional, Scientific, Tech YTD YTD Dollar Current Prior DUi 481,136 a71,694 uuo/u4 Sn,F,Gx zz6.^m »n.a44 41 60,6G4 204,516 292,504 The chart above shows the ten largest declines compared h)the prioryeoc Three nfthe groups inthe top four of this chart are also in the top 10 industry classifications (sch I[), raising concern about the developing trends in these categories. INFORMATIONAL MEMO Page 5 SALES TAX SUMMARY YTD through 2nd Qtr 2019 Collections (Received in Mar - Aug 2019) NAICS 236 237 238 CONSTRUCTION Construction of Buildings Heavy & Civil Construction Specialty Trade Contractors TOTAL CONSTRUCTION 18 TOTAL 1,028,985 73,288 520,840 18 YTD 514,527 33,184 222,728 $ 1,623,112 $ 770,439 Overall Construction Change from Previous Year MANUFACTURING 18 TOTAL 19 YTD 546,031 23,337 204,516 $ 773,884 $ 3,445 0.4% YTD % Diff 6.1 % -29.7% -8.2 % YTD 18YTD 19YTD %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 Products 325 Chemical Manufacturing 326 Plastic & Rubber Products 327 Nonmetallic Mineral Products 331 Primary Metal Manufacturing 332 Fabricated Metal Mfg Products 333 Machinery Manufacturing 334 Computer& Electronic Products 335 Electric Equipment, Appliances 336 Transportation Equipment Mfg 337 Furniture & Related Products 339 Miscellaneous Manufacturing TOTAL MANUFACTURING 25,347 12,739 234 10,477 668 63 2,780 24,921 18,725 90 5,207 7,207 5,225 1,169 10,044 7,720 27,781 14,910 46,543 9,130 31,721 $ 262,700 8,335 5,909 149 7,062 261 24 938 12,586 10,794 52 2,992 2,276 2,132 613 5,417 4,354 13,122 9,097 21,540 6,039 13,057 $ 126,749 $ Overall Manufacturing Change from Previous Year TRANSPORTATION & WAREHOUSING 18 TOTAL 18 YTD 12,903 6,150 13 5,571 261 34 1,121 10,828 7,283 54 2,215 2,720 4,175 641 2,810 2,129 8,914 7,095 23,928 4,323 12,157 115,326 ($11,423) 54.8% 4.1 % -91.1% -21.1% 0.1% 43.1% 19.5% -14.0% -32.5% 4.2% -26.0% 19.5% 95.8% 4.6% -48.1% -51.1% -32.1% -22.0% 11.1% -28.4% -6.9% -9.0% YTD 19YTD %Diff NAICS AUTOMOTIVE 441 Motor Vehicle & Paris Dealer 447 Gasoline Stations 18 TOTAL 1,287,283 98,001 18 YTD 557,218 47,422 19 YTD 682,519 47,419 YTD % Diff 22.5% 0.0% TOTAL AUTOMOTIVE $ 1,385,284 $ 604,640 $ 729,938 Overall Automotive Change from Previous Year $125,299 20.7% NAICS RETAIL TRADE 18 TOTAL 18 YTD 19 YTD % Diff 442 Furniture & Home Fumishings 443 Electronics & Appliances 444 Building Material & Garden 445 Food & Beverage Stores 446 Health & Personal Care 448 Clothing & Accessories 451 Sporting Goods, Hobby, Books 452 General Merchandise Stores 453 Miscellaneous Store Retailers 454 Nonstore Retailers 521,980 1,127,863 813,656 306,566 289,962 2,084,482 535,648 2,187,854 834,133 165,495 224,971 500,419 403,303 140,355 145,982 935,216 264,147 965,467 371,275 85,223 264,868 493,413 415,488 148,533 139,187 871,694 226,448 917,603 405,508 60,604 17.7% -1.4% 3.0 % 5.8 % -4.7 % -6.8% -14.3% -5.0% 9.2% -28.9% TOTAL RETAIL TRADE $ 8,867,639 $ 4,036,357 $ 3,943,346 Overall General Retail Change from Previous Year ($93,011) -2.3% SERVICES 18 TOTAL 18 YTD 19 YTD YTD % Diff 51X Information 959,342 52X Finance & Insurance 143,696 53X Real Estate, Rental, Leasing 658,861 541 Professional, Scientific, Tech 739,444 551 Company Management 2 56X Admin, Supp, Remed Svcs 316,828 611 Educational Services 5,738 62X Health Care Social Assistance 88,209 71X Arts & Entertainment 304,385 721 Accommodation 717,341 722 Food Services, Drinking Places 2,009,051 81X Other Services 260,134 92X Public Administration 71,562 450,457 64,040 310,792 307,738 143,565 3,061 50,009 150,027 326,911 973,229 129,731 35,278 536,851 26,139 348,293 292,504 37 157,607 2,851 36,842 156,286 354,126 1,011,584 123,070 7,800 19.2% -59.2% 12.1% -5.0% 0.0% 9.8% -6.9% -26.3% 4.2% 8.3% 3.9% -5.1 % -77.9% 481 Air Transpodation 482 Rail Transportation 463 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 2 80 1,622 2,537 715 7,549 38,474 1,034 1,816 2,362 $ 56,191 $ 29 4 922 357 6,755 16,026 515 1,107 1,300 27,016 Overall Transportation Change from Previous Year WHOLESALE TRADE 18 TOTAL 18 YTD 0 0.0% TOTAL SERVICES $ 6,274,592 $ 2,944,840 $ 3,053,990 25 -14.3% Overall Services Change from Previous Year $109,151 3.7% 264 6600.5% 1,070 16.1% 566 58.6% YTD 597 -91.2% MISCELLANEOUS 18 TOTAL 18 YTD 19 YTD % Diff 24,797 54.7% 000 Unknown 0 423 -17.8% 111-115 Agriculture, Forestry, Fishing 1,737 307 1,341 21.2% 211-221 Mining & Utilities 693 203 904 -30.4% 999 Unclassifiable Establishments 113,390 55,060 0 0 0.0% 214 -30.4% 676 233.2% 60,124 9.2% $ 29,988 MISCELLANEOUS TOTAL $ 115,820 $ 55,570 $ 61,014 $2,972 11.0% Overall Miscellaneous Change from Previous Year $5,444 9.8% YTD 19 YTD % Diff 423 Whls Trade -Durable Goods 424 Whls Trade -Nondurable Goods 425 Wholesale Electronic Markets 1,126,051 180,401 2,719 565,535 81,539 1,337 481,138 75,352 1,708 -14.9% -7.6% 27.7% WHOLESALE TRADE TOTAL $ 1,309,170 $ 648,411 $ 558,198 Overall Wholesale Change from Previous Year ($90,213) -13.9% YTD 18 TOTAL 18 YTD 19 YTD % Diff GRAND TOTALS $19,894,510 $9,214,020 $9,265,684 Grand Total Change from Previous Year Grand Total Change from Previous Year -Without New Construction $51,663 0.56% $48,218 0.57% 5 INFORMATIONAL MEMO Page 6 Schedule IV - Gambling Tax 18? (d) 2019 Quarter 2018 2019 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount Q1 $ 985,901 $ 999,638 $1,130,363 Q2 841,104 947,463 964,350 Q3 985,439 1,129,833 Q4 943,242 1,081,454 $ 13,737 1% $ (130,725) -12% 106,359 13% (16,886) -2% Totals $ 3,755,686 $ 1,947,102 $ 4,306,000 120,096 7% $ (147,611) -7% Gambling taxes were up $120k (7%) compared to the same period in the prior year. Effective Jan 1st the card room gambling tax rate was increased from 10% to 11 %; factoring in the rate increase on card rooms, the four casino's reported a net decline in gross receipts of -3% or ($563k) compared to gross receipts for the first half of 2018. The majority of this occurred in the first quarter (down -8.0%) while the second quarter reported a slight increase (up 2.6%) in gross receipts. When compared to the allocated YTD budget, gambling taxes were $148k (-7%) under budget. Schedule V - Admissions Tax 1b` (d) 2019 Quarter 2018 2019 Allocated Earned Actual Actual Budget INCREASE (DECREASE) YEAR OVER YEAR BUDGET VARIANCE Amount % Amount % Q1 $ 206,037 $ 272,521 $ 185,910 Q2 249,096 251,285 224,762 Q3 209,385 188,931 Q4 277,505 250,397 $ 66,484 32% $ 86,611 47% 2,190 1% 26,523 12% Totals $ 942,023 $ 523,806 $ 850,000 $ 68,674 15% $ 113,134 28% Admission taxes remain strong with the first half of 2019 exceeding the same period of last year by almost $69k and exceeding the YTD budget by over $113k. The growth in Admission taxes can be attributed to new recreation type businesses as well as the general trend of growing taxable activities in the Services industry. 6 INFORMATIONAL MEMO Page 7 Schedule VI - Telecommunications Utility Tax {0j Quarter Earned (d) 2018 2019 Actual Actual 2019 Allocated Budget INCREASE (DECREASE) YEAR OVER YEAR Amount BUDGET VARIANCE Amount % Q1 $ 292,954 $ 236,604 $ 353,342 Q2 279,555 228,313 337,182 Q3 266,563 321,511 Q4 280,205 337,965 Totals $ 1,119,276 $ 464,917 $ 1,350,000 $ (56,350) (51,243) -19% $ (116,738) -33% -18% (108,869) -32% $ (107,592) -19% $ (225,607) -33% Telecommunications Utility tax has been trending downward over the past few years. Tax collections for the first half of 2019 was no exception, posting nearly 20% under compared to the same period of the prior year. Other surrounding cities have been experiencing a similar decline in telecommunications taxes which indicates this trend goes beyond Tukwila. Additionally, a review of taxpayers shows a decline in reported gross sales across most taxpayers as opposed to any one specific taxpayer. Research has indicated that consumer behavior has been changing over the past few years with households opting for data -based plans and getting rid of the traditional home phone lines. 7 8 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Vicky Carlsen, Finance Director BY: Jeff Friend, Fiscal Manager CC: Mayor Ekberg DATE: September 4, 2019 SUBJECT: July 2019 Departmental Budget-to-Actuals Report Summary The purpose of the July 2019 General Fund Financial Report is to summarize for the City Council the general state of departmental expenditures and to highlight significant items. The following provides a high-level summary of the departmental financial performance. The July 2019 Report is based on financial data available as of September 4, 2019, for the period ending July 30, 2019. Additional details can be found within the attached financial report. Expenditures General Fund expenditures totaled $38.1M through July, which is about $116.1 K less than the allocated budget of $38.2M. The allocated budget is calculated to reflect year-to-date spending patterns of the previous year. Unbudgeted, Unplanned Events Four significant, unbudgeted events have occurred in 2019 that affect multiple departments. Code Violations During the first quarter, it was discovered that a local business's production plant violated numerous building codes. As a result, the City expects to receive a total of $79.7K for associated costs related to inspections, reviews, and consulting. 9 INFORMATIONAL MEMO Page 2 Andover Park East Propane Leak In June, faulty piping in a large propane tank on Andover Park East was discovered which required the safe burn off of vapors remaining after the removal of the liquid gas. On August 16, the party responsible for the propane system was billed $21,707 to reimburse the city for costs associated with the event. When Budget Amendments go forward later in the year, this item will be included as a revenue -backed Budget Amendment. Department Labor Benefits Materials Total Police $ 1,532 $ 262 $ 1,666 $ 3,461 Fire 8,409 2,397 707 11,512 Street Maintenance 4,161 2,037 - 6,198 Water 436 100 536 Total $ 14,538 $ 4,796 $ 2,373 $ 21,707 East Marginal Way Power Pole Accident On April 5th, there was a large accident where numerous power poles fell over on East Marginal Way. Current estimates for this incident through September 4, 2019 are as follows: Department Overtime and Benefits Repairs and Maintenance Combined Street Maintenance and Operations $ 30,281.39 $ 214,890.16 $ 245,171.55 A claim totaling $245.2K has been initiated with the Washington Cities Insurance Authority (WCIA) for reimbursement of the current estimated expenditures. A check was received in June for $178.9K (75%) with the balance to be received later. When Budget Amendments go forward later in the year, this item will be included as a revenue -backed Budget Amendment. Snowstorms During the month of February, the City experienced two winter snowstorms. As of July 31st, unbudgeted costs related to the snow events are as follows: Department Overtime Supplies Combined Police $ - $ 143 $ 143 Fire 30,313 285 30,598 Public Works - 286 286 Park Maintenance - 452 452 Street Maintenance and Operations 19,463 30,555 50,018 Total $ 49,777 $ 31,721 $ 81,497 When Budget Amendments go forward later in the year, a Budget Amendment to account for Street Maintenance and Fire related costs may be included. 10 INFORMATIONAL MEMO Page 3 Departmental Variances Eleven of fourteen General Fund departments were under their allocated budget through June 2019. Major variances are: • Community Development is $79.9K over budget through July. Professional Services expenditures ($129.2K over allocated budget) have been greater than anticipated in the budget. The budget had assumed development activity would slow in 2019; however, this has not been the case. Therefore, services directly related to development activity, such as peer review, that are typically outsourced, are now over budget. It should be noted that a large portion of Professional Services are revenue - backed. Repairs and Maintenance expenditures have not been significantly incurred ($30.8K under allocated budget) while Miscellaneous Expenditures ($19.4K under allocated budget) have also not been incurred at the level anticipated. Additionally, an unexpected structural code compliance review was done for a local business ($73.3K) in the first quarter. • Fire is $404K over budget. Salaries and benefits were $459.9K over budget resulting from three retirement payouts in June ($53K), unbudgeted pipeline positions ($211.1K) as well as overtime costs that were over budget through July ($195.8K). Services and supplies were under budget by about $55.9K partially offsetting the amount the department was over budget on salaries and benefits. As of the May 28th Finance Committee meeting, the Finance Committee began an ongoing analysis of options to address the Fire operating budget issues. The topic has been forwarded to the City Council as part of the Budget Amendment discussion on September 9tn • Street Maintenance and Operations was $335.8K over budget through July primarily due to overtime and supplies costs related to the snow events and the East Marginal Way power pole event. Purchases of supplies to replenish street maintenance inventory also contributed to the variance. This includes salt brine and sand ($37.2K), aluminum poles and luminaries ($25.4K), Malfunction Monitoring Units ($16K), pedestrian push buttons ($11.7K) and other miscellaneous items ($21.5K). Overtime and Benefits Supplies Snow $ 19,463 $ 30,555 Power Poles* 13,899 160,778 $ 33,362 $ 191,333 *Costs to be reimbursed by WCIA Total $ 50,018 174,677 $ 224,695 11 INFORMATIONAL MEMO Page 4 Year to Date Department Expenditures Compared to Allocated Budget (Through July 2019) City Council Mayor Administrative Services Finance Attorney Recreation Community Development Municipal Court Police Fire Technology & Innovation Svcs Public Works Park Maintenance Street Maintenance & Operations Dept 20 S218 254 yfl lYfflfl Ull,'ab1 V,11oyl'',11L'dli'i.. 51,342 S1,447 1.108 S 1.234 11111111,11,11,1179�r 1111,11l S319 S423 51.536 $1,635 1�d���l�"00)fl�fU�f�O%I�DI J�r�lYI�1,Oifl 51,902 S1.918 fl UGD VY ti15 N' Alu," ' k (11u1H`fa+,,'IR101Kr1111{ dMN'G 1111,111111111. S738 5765 ��I�LI�M>llfl�l�� 111�U111( 'ld 51,171 S1,180 52088 S2,008 JlfliX (f U' r'dIUV�(biiblk �7�f1(U�IU'Jl�h1�ltt�t 1,000 S 1,000 52,188 52,327 '�f��1V��I�11ulIIlVU�IRhYNf�IIHUI�1DIUiflffi�N1J1��9N� �Ikl;f7lU�l1/I�NII�JIDUIJI�Pf�lf�tl0�1� 52,647 S2,311 lUliU('i,111 1l 'Hill' 111111 !11� � �,°'>b;1bUM1��l��JI(U�NdNf1GYYVi�"r°�XVIU"ti�"JU��9AVk'"1rcflkl fU SO GENERAL FUND CITY OF TUKWILA GENERAL FUND EXPENDITURES $2,000 53,426 $3.225 S4,000 S6,000 eYTDActual eYTDBudget $8,000 S10,000 S12,000 Thousands Year -to -Date as of July31, 2019 SUMMARY OF EXPENDITURES BY DEPARTMENT BUDGET ACTUAL COMPARISON OF RESULTS 2019 ANNUAL 2019 ALLOCATED 2017 2018 2019 ACTUAL OV MAUNDER) % CHANGE ALLOCATED BDGT % EXPENDED 2017/2018 2018/2019 01 City Council 432,111 254,486 199,867 218,995 217,793 (36,693) 50% 10% (1)% 03 Mayor 2,595,514 1,447,296 1,329,124 1,431,440 1,342,483 (104,813) 52% 8% (6)% 04 AdministrativeSenices 2,111,509 1,234,261 1,138,530 1,129,553 1,108,389 (125,872) 52% (1)% (2)% 05 Finance 2,671,195 1,634,965 1,487,680 1,587,723 1,535,971 (98,994) 58% 7% (3)% 06 Attorney 710,730 422,644 220,974 593,401 318,666 (103,978) 45% 169% (46)% 07 Recreation 3,294,138 1,917,677 1,825,495 1,813,196 1,901,767 (15,909) 58% (1)% 5% 08 Community Development 3,511,558 2,007,676 1,877,884 1,932,419 2,087,584 79,908 59% 3% 8% 09 Municipal Court 1,298,228 764,587 704,139 758,419 737,952 (26,635) 57% 8% (3) % 10 Police 19,427,613 11,361,609 10,326,332 10,254,144 10,886,466 (475,143) 56% (1)% 6% 11 Fire 12,473,387 7,126,761 6,851,220 6,816,831 7,530,748 403,987 60% (1)% 10% 12 Technology& Innovation Svcs 2,043,934 1,180,487 873,914 1,207,258 1,171,063 (9,423) 57% 38% (3)% 13 Public Works 3,948,613 2,327,399 2,058,411 2,117,860 2,188,084 (139,315) 55% 3% 3% 15 Park Maintenance 1,630,586 1,000,409 855,473 871,724 1,000,353 (56) 61% 2% 15% 16 Street Maintenance & Operations 3,354,733 2,311,063 2,033,303 2,095,406 2,646,886 335,823 79% 3% 26% Subtotal 59,503,849 34,991,318 31,782,344 32,828,369 34,674,206 (317,113) 58% 3% 6% 20 Dept20 6,362,029 3,224,543 1,518,002 3,932,726 3,425,593 201,050 54% 159% (13)% Total Expenditures 65,865,878 38,215,861 33,300,346 36,761,095 38,099,799 (116,063) 58% 10% 4% Percent o year completed 58% 12 INFORMATIONAL MEMO Page 5 GENERAL FUND CITY OFTUKWILA GENERAL FUND EXPENDITURES Year -to -Date as of July 31, 2019 SUMMARY OF SALARIES AND BENEFITS BUDGET ACTUAL COMPARISON OF RESULTS 2019 ANNUAL 2019 ALLOCATED 2017 2018 2019 ACTUAL OVER(UNDER) % CHANGE ALLOCATED BOLT % EXPENDED 2017/2018 2018/2019 11 Salaries 28,891,480 16,853,363 15,604,254 15,797,512 16,501,687 (351,677) 57% 1% 4% 12 Extra Labor 762,833 440,588 384,589 402,517 479,403 38,815 63% 5% 19 % 13 Overtime 1,350,099 767,548 952,697 822,352 1,067,992 300,443 79% (14)% 30% 15 Holiday Pay 504,517 94,113 77,807 94,903 76,376 (17,737) 15% 22 % (20) % 21 FICA 2,107,153 1,229,173 1,027,724 1,045,196 1,082,335 (146,838) 51% 2% 4% 22 Pension-LEOFF 2 922,206 537,954 472,108 481,906 513,617 (24,336) 56% 2% 7 % 23 Pension-PERS/PSERS 1,751,656 1,021,799 849,675 981,801 1,026,153 4,354 59% 16% 5% 24 Industrial Insurance 861,417 502,493 355,971 351,629 477,242 (25,251) 55% (1)% 36% 25 Medical & Dental 5,998,564 3,499,162 3,272,682 3,207,246 3,349,666 (149,496) 56% (2) % 4% 26 Unemployment - - (663) 18,354 10,400 10,400 - (2869)% (43)% 28 Uniform/Clothing 8,525 4,973 1,403 2,553 1,783 (3,190) 21% 82% (30)% Total Salaries and Benefits 43,158,450 24,951,166 22,998,246 23,205,970 24,586,654 (364,512) 57% 1% 6 % SUMMARY OF SUPPLIES, SERVICES, AND CAPITAL BUDGET ACTUAL COMPARISON OF RESULTS 2019 ANNUAL 2019 ALLOCATED 2017 2018 2019 ACTUAL OVER/(UNDER) % CHANGE ALLOCATED BDGT EXPENDED 2017/2018 2018/2019 0 Transfers 6,362,029 3,224,543 1,516,002 3,932,726 3,425,593 201,050 54% 159% (13)% 31 Supplies 1,072,087 566,218 666,465 551,037 932,519 366,301 87% (17)% 69% 34 Items Purchased for resale 22,000 16,587 15,307 16,954 18,029 1,442 82% 11 % 6 % 35 Small Tools 163,569 70,034 63,123 50,521 63,941 (6,092) 39% (20)% 27% 41 Professional SeRices 6,404,856 3,749,284 3,121,475 3,665,033 3,480,017 (269,268) 54% 17% (5)% 42 Communication 434,600 247,261 195,156 239,075 215,105 (32,156) 49% 23% (10)% 43 Travel 159,630 87,608 119,783 89,527 124,216 36,608 78% (25) % 39% 44 Advertising 47,550 25,587 11,509 21,989 11,651 (13,936) 25% 91% (47)% 45 Rentals and Leases 2,901,035 1,659,745 1,254,991 1,373,506 1,776,771 117,026 61% 9% 29% 46 Insurance 1,005,775 1,005,775 887,617 974,066 889,957 (115,818) 88% 10% (9)% 47 Public Utilities 1,999,424 1,587,393 1,466,542 1,523,466 1,535,863 (51,530) 77% 4% 1% 48 Repairs and Maintenance 623,150 310,897 284,741 246,640 394,623 83,726 63% (13)% 60% 49 Miscellaneous 1,271,723 695,652 643,952 821,780 599,632 (96,020) 47% 28% (27)% 64 Machinery&Equipment 240,000 18,112 53,435 48,806 45,228 27,116 19% (9)% (7)% Total Supplies, Services, and Capital 22,707,428 13,264,695 10,302,099 13,555,126 13,513,145 248,450 60 % 32% (0)% Total Expenditures 65,865,878 38,215,861 33,300,346 36,761,095 38,099,799 (116,062) 58% 10% 4% Percent of year completed 58% 13 14 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Finance Department; Director Vicky Carlsen BY: Jeremy Brecher-Haimson & Lilly Ferraz, Management Analyst Interns CC: Mayor Ekberg DATE: September 9th, 2019 SUBJECT: Priority Based Budgeting Update: Performance Measure Timeline ISSUE Provide timeline of activities for Priority Based Budgeting Process Phase II: Performance Measures. This will be carried out in preparation for the upcoming 2021-22 Budget Cycle. BACKGROUND Priority Based Budgeting is a best practice tool which aligns an organization's programmatic work more closely to its strategic goals and mission. In Tukwila, we have broken down the process into two phases, and we are currently in Phase 2. In 2018, in preparation for the 2019-2020 Budget process, the city completed Phase 1 of the Priority Based Budgeting (PBB) process: Tiering City Programs in the General Fund. This involved Department Leadership defining their programs and ranking them in alignment to City Strategic Goals and Basic Program Attributes. This process helped the City of Tukwila answer the question: How essential are our programs? Phase 1 confirmed that the City was in fact allocating its resources to the most essential and high priority programs. In the General Fund, 67% of the City's General Fund programs aligned with the City's updated adopted strategic plan goals and priorities (i.e. they were ranked in the top two tiers). Additionally, some departments have already begun making strategic programmatic decisions using the Priority Based Budgeting criteria. As planned, city staff have begun the process to tier projects in other funds. The next phase in Priority Based Budgeting is to integrate Performance Measures into all departments in the city. This process can help the city answer the question: How effective are our programs? We know that some departments already use performance measures and data to inform their work. We are building upon existing efforts, refining performance measure purpose and practice, and formalizing them across the entire city's programs. Both activities can be used as a tool to assist Council to make informed policy and budget decisions, as well as departments to improve their service delivery to community members. 15 INFORMATIONAL MEMO Page 2 DISCUSSION Performance measures are tools to track the quality and/or quantity of services that a program is providing. They are used for employee service improvement, council decisions, and community review. There are three categories of performance measures that the city will be using to track success: - Program Outputs: captures what a program is creating or providing o For example: Potholes filled within 24 hours of notice - City Outcomes: portrays the lived experiences of community members o For example: Pavement condition index - Quality of Life Indicators: highlights high level perceptions of community members (typically through a community survey) o For example: Percent of residents who believe they can travel within Tukwila in a reasonable and predictable amount of time Process of Collaboration: City staff have surveyed several other cities who use performance measures to learn best practices and avoid common pitfalls. A key lesson learned was to take the process slow and ensure full staff collaboration. This is to ensure that the performance measures created are a useful lens to determine program effectiveness, rather than as a disciplinary device. The process implementation facilitates discussion and engagement by involving every city employee, beginning with department -wide Performance Measure Workshops. To ensure consistent communication, the Priority Based Budgeting Team have: - piloted the workshops with Department Heads - met with Department Champions (staff leaders) to tailor workshop language - sent an all -city email describing the Priority Based Budgeting process, and are - meeting with Supervisors to provide useful language for interested employees (See Attachment I). This iterative process has created a collaborative atmosphere, and the work of the Priority Based Budgeting process reflects this input. (See Attachment II). Fall & Winter Planning: The Priority Based Budgeting Team is piloting the process with the Finance and Public Works Departments. The first stage of creating performance measures will be completed by the end of December. Then, the Departments will meet in small teams to review performance measures (See Attachment III). They will decide which measures they will track internally and give recommendations for measures that will be presented in the upcoming biennial budget. Council will have several opportunities to comment on performance measures, including after department and cross -department committee processes (See Attachment IV). Community Engagement Plan: The Priority Based Budgeting Team plans to have several check -ins with various community groups and stakeholders, such as the Tukwila Connectors Program, the Equity & Social Justice Committee, the Chamber of Commerce, and Foster High School Student Groups. This is to ensure the performance measurement activity is in line with community priorities. The team seeks to gather feedback and ideas on what community members see as high priorities for the city to measure and report. Community groups will provide input on questions such as: 1) How would you know whether the city government is doing a good job? 16 Z:ICouncil Agenda Items\Finance109.09.191Priority Based Budgeting Update Memo_Finance Committee.docx INFORMATIONAL MEMO Page 3 2) What does a high "quality of life" mean? Can you relate it to any aspect of the City of Tukwila Strategic Goals? 3) What performance measure could we create to show this connection? RECOMMENDATION: For information only ATTACHMENTS Attachment I: All -City Email Attachment II: Priority Based budgeting PHASE II: Create Performance Measures: Department Attendees and Champions Attachment III: Performance Measures — Implementation Timeline Attachment IV: Stages of Phase II: Creating Performance Measures Z:\Council Agenda Items\Finance109.09.191Priority Based Budgeting Update Memo_Finance Committee,docx 17 INFORMATIONAL MEMO Page 4 ATTACHMENT I: ALL -CITY EMAIL All City Staff, All of us work every day to provide the best quality of service to our communities; and that means prioritizing what's Essential to our Strategic Goals and understanding the Effectiveness of our Programs. With Priority Based Budgeting, we're accomplishing those two goals. I would like to provide an update of where we have been with priority based budgeting and talk about the next phase we are launching throughout the city. In Phase 1, as part of the 2019-2020 budget process we invited you to help us begin Priority Based Budgeting. We organized our Departments into their functioning programs, and tiered them based on their connection to our Strategic Goals. We're now in Phase 2, where we are asking all employees, "What makes your Department's programs effective?" by creating performance measures together in workshops. wa pro:,�ram; V/4 %F o a t.xb aY•y epar: cr'it nAr Progrd n, Connection to Statcg:c Goal: improved O , t of Service orr4" ance A tool to track the quality anti/or quantity of services a program is providing. Employee Service Improvement, 4 cult rill Decisions F Corrtnnir ity Review There will be several steps as we create performance measures meaningful to you and your department. 1. Staff Create Performance Measures: First, all staff will provide input on how departments can determine that they are providing high quality services, by creating performance measures. 2. Department Leadership Review: Then, performance measures will be reviewed by Department leadership. Some will be selected for internal use and some externally for the budget. 3. Cross -Department Review: The cross -departmental committee from phase 1 will review and finalize the external performance measures to use in the budget process. 4. Community & Council Review: Throughout the process there will be check -ins with various community groups to get input on how they would know the City of 18 Z:\Council Agenda Items\Finance109.09.191Priority Based Budgeting Update Memo_Finance Committee.docx INFORMATIONAL MEMO Page 5 Tukwila is performing well. Council will also approve the final list of performance measures for the 2021-2022 budget. Both tiering and performance measures will be used as a budget process tool to understand how the City of Tukwila measures success. These performance measures will also be used regularly to facilitate discussion in your own Department, and this is your chance to begin the conversation together on how the programs you operate improve the quality of life for residents & employees in Tukwila. Many of you already use performance measures in your programs, and we're excited to bring data -driven discussions into the budget process. We're beginning the process over the next month with two pilot Departments, Finance and Public Works. By the end of this year we plan to engage all Departments for the 2021-2022 budget in these workshops. Stayed tuned for updates on what they create, and when your Department is scheduling workshops for you! Sincerely, David David Cline City Administrator Z:ICouncil Agenda Items\Finance109.09.191Priority Based Budgeting Update Memo_Finance Committee.docx 19 INFORMATIONAL MEMO Page 6 ATTACHMENT II: `Priority Based Budgeting PHASE II: CREATE PERFORMANCE MEASURES' Department Attendees and Champions If ,1 f r, ,/l/�l',�'` l fr ���, a ,.ti��iP IN NOW rr' 4qr �OW f� ,,,r�I.IA il'mr r ark y;f � ✓ r t1 �� I D� 9;! Battalion Chiefs "l'tipr r fir,,, a w 1� IU�I�ill�� TBD Fire Chief Wittwer Police Chief Linton TBD TBD Admin Dept Rachel Bianchi, Juan Padilla TBD TBD Parks & Rec Craig Zellerhoff, Tracy Gallaway, John Dunn, Stephanie Gardner, Robert Eaton, Kris Kelly TBD TBD Public Works Henry Hash, Han Kirkland, Gail Labanara Han Kirkland, Gail Labanara September 17th DCD Jack Pace, Kia Shagena Kia Shagena TBD Finance Aaron Williams, Jeff Friend, Sherry Wright Sherry Wright, Aaron Williams, Jeff Friend, Sept. 5th TIS Joel Bush TBD TBD Administration Team All Department Heads *Met individually and in two ADMIN meetings Aug. 20' 20 Z:1Council Agenda Items\Finance109.09.191Priority Based Budgeting Update Memo_Finance Committee.docx City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM ATTACHMENT III: Performance Measures - Implementation Timeline Calendar year 2019 Month J .A SOD J F 14:[ A .,'1 ,>< ,1 A 6 Illlhl'y 1111011111 11 1. Departments Data Collection & It awing Public Works, DCD, Finance Department PM Trainings All Department PM Trainings 1111111Yi4VIViI! +ti7� 2020 �lol�"�SNP�i6� ■III■■■111111■■■■111■■ i.. ; �r,u �,i�i i,,. i if, Pit in „�I 1 t� Dui, �! ti , l�i ,11� j11 2. Pilot Departments Finalize PMs Pilot Dept. Committees led by Directors Propose Full List of PMs 114 All Department Committees led by Directors Propose Full List of PMs u 3. Community Advisor Committee Rei, ien Presentation to Committee & Revisions 4. Cross -Department Committee Review Presentation to Committee, Revisions, & Final PMs Approved 5. Council Approval Update provided to council at finance committee Cross -Department Committee Presents Final PMs to Council 6. Departments Prepare Budget Departments Begin Tracking PMs & Include in Budget Submission 1111■■■■■■■■■1111■■■ ■IE■■111■■■■■■■■ i11 �VI !C 11111'1,111,11 I�II� ■■■■■■■■■■■■■■ 1111■■■IM■■■■I■■IIM •■■��u■i■■u■■■ ■11111■■■1111■■■■■11■■ • ■■�■■■■■■®■■R■■ i. tip �r;, �.:� r�i iimiq il 1w i h , �I MUM ■1111■■■111■■■ii-il®ri ♦ l.Viemo,'Deliverable ❑ Meeting -- Pilot Departments: Public Works; DCD, & Finance 2nd Round Departments: All other Departments — All Departments 21 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM ATTACHMENT IV: STAGES OF PHASE II: CREATE PERFORMANCE MEASURES Aug -Jan 2 Check in ith Community anodd Council) 22