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Home My WebLink AboutReg 2020-05-04 Item 4B - COVID-19 - Financial Impacts from Coronavirus EmergencyCOUNCIL AGENDA SYNOPSIS ---------------------------------- Initial r Meeting Date Prepared b Mayor's review Council review 05/04/20 Vicky ITEM INFORMATION ITEMNO. 4.B. STAFF SPONSOR: VICKY CARLSEN ORIGINAL AGENDA DATE: 05/04/20 AGENDA ITEM TITLE Financial Impacts of COVID-19 Pandemic CATEGORY ® Discussion Mtg Date 5104120 ❑ Motion Mtg Date ❑ Resolution Mtg Date ❑ Ordinance Mtg Date ❑ Bid Award Mtg Date ❑ Public Hearing Mtg Date ❑ Other Mtg Date SPONSOR ❑Council ❑Mayor ❑HR ❑DCD ®Finance ❑Fire ❑TS ❑P&R ❑Police ❑PW ❑Court SPONSOR'S Council discussion on the financial impacts of the COVID-19 pandemic and possible tools SUMMARY that can be utilized to close the revenue gap REVIEWED BY ❑ Trans&Infrastructure ❑ CommunitySvs/Safety ® Finance Comm. ❑ Planning/Economic Dev. ❑ LTAC ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: 4/ 27, 4/ 28 COMMITTEE CHAIR: SEAL RECOMMENDATIONS: SPONSOR/ADMIN. Finance COMMITTEE COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 05/04/20 MTG. DATE ATTACHMENTS 05/04/20 Informational Memorandum dated 04/29/20 Informational Memorandum dated 03/31/20 (updated after 4/28 Finance Committee) Resolution No. 1919 - Reserve Fund Policy 2019 - 2020 Biennial Budget Document Programs by Department (pages 452 - 457) Minutes from Finance Committee meeting on 04/27/20 & 4/28/20 93 m City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: City Council FROM: David Cline, City Administrator CC: Mayor Ekberg DATE: April 29, 2020 SUBJECT: Financial Outlook BACKGROUND Like many other local governments, the City of Tukwila is facing an immediate budget shortfall due to the coronavirus pandemic. Specifically, the City is losing revenues from sales, gambling and utility taxes due to the Stay Home, Stay Healthy order. In addition, many revenues to the City will be delayed as property tax deadlines have been pushed out and State -sanctioned timelines for remitting sales tax have also been extended. DISCUSSION From what we know now, this economic crisis will last into 2021 at the earliest. The City of Tukwila projects the loss of $12 million in revenues this year and an additional $6 million in revenues in 2021. Such revenue losses result in expenditure reductions which will certainly result in an impact to City services. What services are the City mandated to provide? The Revised Code of Washington outlines a few specific City services that all code cities must provide, such as a chief law enforcement officer, and city planners to enforce the Growth Management Act. The reality is that most City services are set by City Council policy, and standards — such as law enforcement response times and human services funding — are legislative decisions based on community priorities. Once cities decide to provide specific services, there are often legal mandates regarding those services. As an example, once a jurisdiction decides to provide fire services there are training, and other activities legally associated with that service. In Tukwila, the City's adopted Strategic Plan provides much of the policy guidance for services, and over the year biennial budgets are developed to be in alignment with the five goals outlined in the Strategic Plan. What other sources of revenues are out there? The Federal Government has made some funding available for cities with 500,000 or more residents. The State is also distributing additional federal funds to cities by population. However, it is important to know that this funding is being made available to cities to cover costs associated with the coronavirus pandemic, not for lost revenues. The reality is that the City's current budget shortfall has very little to do with spending associated with the pandemic and everything to do with lost tax revenues. What about the City's other funds outside of the General Fund? Some of the City's enterprise funds are seeing lost revenue — such as the water fund, which has fewer customers during the shutdown. Funds covering the Public Safety Plan have already been committed to those projects and cannot be held back at this time. Any interfund loan made from one fund — such as the sewer fund — would need to be paid back in a reasonable period of time and with market -rate interest. 95 INFORMATIONAL MEMO Page 2 Doesn't the City have a contingency or reserve funds? Yes, the City does have both contingency and reserve funds. It is expected that a portion of the contingency fund will be used in 2020 to deal with the budget shortfall and in 2021 if the economy does not improve. It would not be prudent nor possible for the City to spend all of its contingency and reserve funds due to the need to keep sufficient funds on hand for cash flow purposes and other emergencies. What does this mean? More than 70% of the City's general fund is spent on personnel, which is consistent with other cities in the region. While all departments have scrubbed their budgets in line items like supplies and professional services, there will not be enough savings in these areas to stave off cuts to staff. The City has also enacted a hiring freeze, taken steps to control overtime costs, reduced all travel, furloughed part-time staff and reduced capital projects. These combined reduced expenses by $4 million. Staff has identified an additional $2 million in other savings, such as delaying purchases for the City's fleet. The City needs to find an additional $6 million in savings for 2020, and ongoing into 2021. What will happen to staff who are impacted? Staff that are furloughed or laid off will have access to unemployment through the state's Employment Security Division. Affected staff will also receive an additional $600 per week as a part of the CARES act, through the end of July. There is a potential for this federal subsidy to be extended as well. In addition, any staff laid off due to this economic crisis will have return rights for 12 months, allowing them first access to their former position should the City have the ability to refill the position within this time period. What is next? The City expects to use some of its contingency to cover the $6 million gap. It is also expected that layoffs, in accordance with the City's labor contracts, will be needed. The staff leadership has already agreed to a 10% pay reduction, which will save more than $165 thousand this year alone. The City Administration and City Council are working through a process to identify an appropriate ratio of contingency funds and service reductions, the latter which could include personnel reductions. It will be important to ensure that the City will maintain required and necessary services and prioritize other services in accordance with the City's adopted Strategic Plan and community priorities. 0 TO: Finance Committee FROM: Vicky Carlsen, Finance Director CC: Mayor Ekberg DATE: March 31, 2020 SUBJECT: Budget Impacts due to COVID-19 Pandemic Updated for Mav 4. 2020 Reaular Meetina ISSUE Financial impacts of the COVID-19 pandemic. DISCUSSION Staff has been working on a daily basis to evaluate and analyze the financial impacts to the City of Tukwila's budget as a result of the ongoing coronavirus pandemic. This memo is to share with the Council current thinking and potential next steps associated with this global issue. I want to start with a shared recognition that there are difficult choices ahead as we deal with lost and delayed revenues. The organization is here to serve the Tukwila residents, businesses and broader communities and we committed to moving forward through process with our City values of Caring, Professional and Responsive at the forefront of our work. We also understand that there may be additional impacts to employees. As we approach what we hope is a new, but relatively short-term, fiscal reality we remain committed to being transparent, creative, and empathetic as we identify solutions that preserve City services and, as much as possible, as many positions that are feasible. Further, we are committed to working with our employees and labor partners in this effort. Because there is so much uncertainty with regard to the duration of this pandemic, as well as how long businesses will be closed, a number of assumptions have been made regarding impacts to general fund revenue. As new information is received and when there is a better idea of when the pandemic will end, we will be able to better predict the full impact of this emergency. We can partially identify revenue impacts through June. However, estimating financial impacts for the second half of the year will depend greatly on when the pandemic is over and how quickly the economy can recover. At this time, there is not enough information to predict what the second half of 2020 could look like. 97 INFORMATIONAL MEMO Page 2 That said, our assumptions are as follows: • Non -essential Businesses will be shut down into May • When businesses reopen, it will take some time to return to normal • We expect very little sales tax to be remitted during March and April given the "Stay Home, Stay Healthy" order • Property tax deadlines have been extended to June 1 for residential and commercial properties who pay property taxes themselves (property taxes paid through mortgage companies will still be required to be remitted on time). It is unknown how many taxpayers pay property taxes themselves in the City, but payment delays will affect the City's cash flows • Uncertainty regarding utility customer payments which would impact interfund utility tax • Sales tax revenue is received two months after it is earned. We will not know the true impacts on sales tax until May and June • Impacts of lost and deferred revenue will create cash flow issues Financial impacts affecting the City are broken down into two categories: Lost Revenue and Delayed Revenue. Lost Revenue This category includes revenue that will forever be lost due to businesses and programming closed down. Each month that businesses are closed will result in well over $1 million in lost revenue. With the information we have today, the following chart estimates lost revenue each month through June. March has been calculated as a partial month because systematic closures did not occur until mid -month. Other miscellaneous revenue in the last row include a myriad of other small revenue sources including interest earnings, donations, court fines, permits, licenses, etc. Again, the full impacts to March revenue will not be known until the latter part of May. Potential Lost Revenue Admissions Tax Gambling Tax TCC Programming TCC Rentals Sales Tax Mall Retail (excluding Mall) Accomodation & Food Service (excluding Mall) Entertainment, Recreation (excluding Mall) Other sales tax categories and other misc. rev Total March April 66,000 85,000 - 500,000 23,000 57,000 44,000 26,000 May June 97,000 75,000 350,000 350,000 40,000 37,000 21,000 46,000 167,500 300,000 335,000 350,000 253,500 442,000 348,000 390,000 39,500 70,000 75,000 82,000 11,500 20,000 26,000 28,000 500,000 500,000 258,000 292,000 1,105, 000 2,000,000 1,550,000 1,650,000 INFORMATIONAL MEMO Page 3 Cumulative impact of Lost Revenue is as follows: March only $1,105,000 March - April $3,105,000 March - May $4,655,000 March - June $6,305,000 Delayed Revenue The second category includes revenue that the City will most likely receive, but at a later time, once economic activity has returned to normal. It is unknown when the delayed revenue would be received by the City. With a high rate of unemployment caused by businesses closing, many utilities are waiving late fees and not shutting off utilities to customers until the emergency is over. We have also made the determination to not undertake either commercial or residential shut off as this time, and have suspended late fees associated with utility nonpayment. This could result in utility customers, including businesses, paying their bills late, which would result in a delay in receiving utility tax revenue. As noted above, an extension for property tax payments has been extended to June 1 st for residential and commercial property owners that pay the tax themselves. Other reasons for revenue receipts delayed include: • City permit counter currently closed to new permits, though still processing existing projects' permits • Potential new businesses are not opening during this pandemic • Businesses that are granted permission to defer tax payments without penalty At this time, with so little information available, it is next to impossible to predict when delayed revenue could be received by the City. For now, an assumption that 30% of total monthly revenues in the delayed category will be received either later this year or next year. The assumption of 30% is only an estimate and the actual impact could be much higher, or lower. Potential Delayed Revenue Utility Taxes Interfund Utility Taxes Property Taxes Permit Activity Business Licenses, State Entitlements Other misc. revenue categories 10% delayed 20% delayed 30% delayed Totals March April May June 385,000 340,000 300,000 294,000 130,000 650,000 130,000 150,000 - 250,000 200,000 - 220,000 460,000 280,000 247,000 75,000 33,000 21,000 68,000 500,000 500,000 500,000 500,000 1,310,000 2,233,000 1,431,000 1,259,000 March April May June Totals 131,000 223,300 143,100 125,900 623,300 262,000 446,600 286,200 251,800 1,246,600 393,000 669,900 429,300 377,700 1,869,900 786,000 1,339,800 858,600 755,400 3,739,800 • • INFORMATIONAL MEMO Page 4 Cumulative impact of Delayed Revenue is as follows: March only $393,000 March — April $1,062,900 March — May $1,492,200 March — June $1,839,900 To summarize, the financial impacts due to COVID-19 is as follows. Please recognize, information changes on a daily basis. As new information becomes available, the assumptions and projections will be updated. Lost Delaved Totals Cumulative 1.Ia.. h �P-.-il Mav J une Totals 1.105_000 2. 000. DDO 1. 550. DDD 1. 650. DOD 6. 305_000 393. D0O 66 9. 900 429. 3 D0 3 77. 700 1. 669.900 1.498.000 2.669.900 1.979.300 2.027.7D0 8,174.900 March 1,498.DOD Harch - Agri 1 4,167.900 I'd arch - May 6,147.200 PJarch - J une 8,174.900 Based on businesses closed into the first part of May and the assumption that it will take time for the economy to return to normal, the funding gap to close would be $6.1 million using the March through May assumptions. It should be noted that this gap is roughly equal to 10% of the City's annual general fund. Adjust General Fund Expenditures Based on Revenue Assumptions An effective way to reduce general fund expenditures would be to implement changes in three phases: immediate changes, near -term changes, and changes that can be implemented as better information becomes available and/or the longer the pandemic lasts. Immediate: Immediate changes that have already been implemented include the following - Hiring freeze for all currently vacant positions annual savings) $1,600,000 All travel cancelled, no non -essential training (unspent balance $140,000 Furlough all part-time, temporary extra labor (excluding unemployment) $150,000 No overtime unless authorized by Mayor $910,000 No transfers to capital project funds $1,200,000 Total immediate savings $4,000,000 100 INFORMATIONAL MEMO Page 5 After implementing the measures above, it is anticipated that two-thirds of the gap will be closed, leaving a remaining gap of $2.1 million. All departments are being required to immediately scrub their budgets and identify all other cost savings from programs that could be delayed until 2021 or eliminated altogether. Department reductions must be in excess of the reductions already listed above and may not include expenditures that are revenue backed. We expect to have that information back next week. In addition, staff is investigating a number of other opportunities to identify $2.1 M in savings, knowing that there may be additional savings needed should the duration of this emergency go longer, therefore requiring making up for additional lost revenues above $6.1 M. While not all of these may come to fruition for a variety of reasons, we are also currently: • Identifying potential additional transfers from the general fund that could be delayed or eliminated • Reviewing the Fleet Fund to determine if there is additional capacity there that could be used as a partial one-time, short term stop -gap measure, and what the implications of such a decision would be • Fully scrubbing our contingency and reserve funds to determine if there are additional funds over the mandated policy amounts that could be used • Initiating the discussion with our labor partners to identify if any of the following can help close the budget gap: voluntary retirements, voluntary leave without pay for staff that choose this option, additional potential furloughs, reduction in hours, reduction in pay or potential layoffs, and seeking labor's own ideas to fill in the gap We have been soliciting ideas from staff on other areas for reductions and, as usual, are impressed by the many varied ideas that have come from our employees that serve our City. It is clear that they understand the serious nature of the financial issues we are facing and want to be a part of the solution. In addition, there is a clear ethic of teamwork permeating through the different ideas. As you know, no impacts to wages, benefits or working conditions can be implemented without bargaining such impacts in advance with our labor partners. Our commitment is to continue to keep you informed of any changes as we progress through these difficult times. Once we have a better idea of a final recommendation to close the current $2.1 M we will work with you, as well as the staff, to implement any additional changes. In the meantime, please do not hesitate to reach out to me directly. New Information for April 13, 2020 Finance Committee The intent of this memo is to prepare the City Council to make informed policy and budget decisions regarding the financial impacts of the COVID-19 pandemic.. Decisions will need to be made this year for the 2020 budget. As this is a budget year, decisions for the next biennium can be made through the normal budget process this summer. 101 INFORMATIONAL MEMO Page 6 The COVID-19 pandemic is causing unprecedented financial impacts world-wide and the full extent of these impacts will not be known for months. However, we do know several key factors: - Initial U.S. unemployment claims are significantly higher than during the Great Recession. The graph below is from the April 4, 2020 CV-19 Track No. 4, published by the King County Office of Economic and Financial Analysis. The line at the far right side of the graph is not the border, but the number of claims between March 22, 2020 and March 28, 2020; FREE COMM Sp "Q IM0.000 VWX0 Z.QKQN 1,0WAW 0 1970 1g75 %92: 1985 195E 1"s 2000 20M - King County unemployment claims totaled 47,333 for the week of March 29, 2020 through April 4, 2020; - Statewide, businesses have the option to file, and pay, excise tax returns later than the normal due date. This will impact the City's ability to forecast revenue as well as cash flow for the next several months; - The City has received requests from businesses for an extension to file tax returns later than the current due date. City Council will be asked to approve temporary emergency policies that will formally grant businesses an extension. In order to understand, and develop a plan to address the financial impacts due to the COVID-19 pandemic, three models have been developed. The models have been developed using information available the week of April 6, 2020 and are subject to change as new information becomes available. All models consider revenue losses and include immediate expenditure reductions listed in the chart at the bottom of page 4 above as well as additional reductions identified by department totaling $1.8 million for a grand total expenditure reduction of $6.2 million. The City has already taken several steps to address the financial impacts of the pandemic. The city immediately implemented several cost savings measures. - Hiring freeze on all existing vacant positions. Positions will be filled only by approval of the Mayor, as deemed necessary. If all positions listed below are frozen for the remainder of 2020, total savings would be roughly $1.6 million in salaries plus benefits. Total projected savings will change as other positions become vacant due to retirements and/or if some of the positions listed below are filled. Currently vacant positions by department are as follows on the next page: 102 INFORMATIONAL MEMO Page 7 o Community Development: senior planner, building inspector III, associate planner, plans examiner o Fire: emergency management specialist, admin support technician — Note: Firefighter personnel positions currently in the hiring process will continue. o Police: community policing coordinator, evidence technician, police officer (3), master police officer (3) — Note: Police are authorized to continually actively recruit and hire new police officers to fill these vacant positions. Due to the time involved in this process and further retirements, it is assumed that not all of these positions will be able to be filled in 2020. o Public Works: engineer, facilities maintenance technician o Street: maintenance & operations specialist o TIS: information technology specialist - All travel and non -essential training canceled for the remainder of the year. Total savings is estimated to be $140 thousand. - Furlough all extra labor and part-time staff. Net savings, after considering unemployment costs, could be as much as $150 thousand but only if all extra labor and part-time positions remain vacant for the remainder of 2020. - Remove transfers of $1.2 million from the general fund to capital project funds. This will impact capital projects in residential street, arterial street, and the general government improvement funds. Further discussion on what capital projects would be impacted will be held at a later Finance Committee meeting. - No overtime unless authorized by the Mayor could result in a savings of up to $910 thousand. This affects all departments including Police and Fire. All departments have been asked to identify additional expenditure reductions. To date, departments have identified an additional $1.8 million in savings. In addition to the steps highlighted above, the City also established a budget ideas email address for employees to submit budget reduction suggestions. A cross -departmental group is being put together to review all suggestions and provide Administration with recommendations on which suggestions should be implemented. These suggestion will be vetted with the unions, and unions are being asked to come with budget ideas, as well. Fire department overtime: During 2019, the Finance Committee spent considerable time reviewing several aspects of fire department operations in order to understand why the fire department is consistently over budget. Per the informational memo dated May 22, 2019 and most recently reviewed by the Finance Committee on October 28, 2019, one option to keep the fire department within budget was to significantly decrease use of overtime to fill staffing when additional firefighters call in sick leave. Station 52 had the least amount of fire calls the last 5 years and would be the station affected with this change. The temporary impact would be to staff an aid car instead of an engine at this station, as warranted based on available staffing. 103 INFORMATIONAL MEMO Page 8 At the April 13, 2020 Finance Committee meeting, the following question was asked: Are firefighters moved among stations when faced with minimum staffing so that it is always Fire Station 52 that affected by placing the aid car in service in place of an engine? Per Chief Wittwer, personnel shift between stations as needed. Fire Station 52 would be the station where the aid car will be placed in service. Effective April 1, 2020, this option was implemented and is estimated to save $250 thousand in overtime over the course of the year. It should be noted that Fire Station 54's response time to the neighborhood around Fire Station 52 is very quick and within our adopted goals for response times for the Tukwila community. Fire Station 54 responds to the Old Hill neighborhood often, particularly when Fire Station 52 personnel are at trainings or covering a different area of the City for a variety of reasons. Fire Calls 6y Station ay Year with Average Response Times 200 IRS OW:I2 160 15 0 06 29 150 0:05:45 140 126 0:05:02 110 11-0 102 0- 04:19 logt81 100 g5 BG 0:05:36 80 62 62 S3 72 76 0:02:53 59 53 S6 42 44 57 0:02:10 38 9:01:26 20 I I ' 9,40.u0 �1 51 51 51 51 52 57 52 52 52 53 53 53 53 53 54 54 54 54 54 2014 2015 2016 2017 2018 �t014 2015 2016 2017 2018 2014 2015 201E 2017 2018 2014 2015 2016 W17 2M �FireCalls -fiesporueTime The current prediction is that the economic recovery from the pandemic would not be complete until 3rd or 4t" quarter of 2021, a full 18 months to return to a pre -pandemic economy. Unemployment levels, sustainability of businesses, and how the State and County plan to ease social distancing restrictions are considered in the models. Timeline through April 15, 2020 The timeline at the top of the next page highlights select significant events that have occurred in the State as well as King County. The time period covered is 38 days and begins on February 29, 2020 with the first known COVID-19 related death in the State through April 6, 2020 when schools across the State were ordered closed for the remainder of the academic year. 104 INFORMATIONAL MEMO Page 9 Timeline of Select COVID-19 Related Events February 29 March 2 March 11 March 13 March 16 March 17 March 23 April 2 April 6 First known Companies begin Governor bans Governor extends Closure of all Governor bans Governor issues Stay at home Schools ordered COVID-19 death encouraging gatherings of 250 ban of gatherings restaurants, bars, gatherings of 'stay at home' order extended closed for in WA State employees to work or more in King, of 250 or more entertainment, and groups larger than order for 2 weeks through May 4 remainder of from home Pierce, and across State recreational 50 people academic year Governor issues Snohomish facilities state of Some schools counties Schools closed for emergency across state close 6 weeks Limits large group for a few days gatherings through March 31 Scenario 1 — Stay At Home Ends May 4: - Stay at home order does not extend beyond May 4, 2020 and allows for gatherings of up to 100 individuals through the summer months and all restrictions lifted by September. - Sales tax, along with admissions, and gambling taxes will be significantly impacted through May but will begin to grow in June. - Due to increases in unemployment benefits, consumer demand could fuel sales growth back to 80% of pre -pandemic sales by the end of the year. - We expect minimal defaults on property tax payments but there would be a cash flow issue. - Casinos could experience half the demand through summer and back to 80% by the end of the year. - Admission tax could remain low through summer and return to 80% of prior year by the end of the year. - During the closure order, utility tax revenue could be 20% below normal and returning to normal levels in the fall. - Programming revenue from the Tukwila Community Center will begin to provide some programming during the summer and fully open by September. Under Scenario 1, the City would need to identify ways to close an additional gap of $2.4 million. Scenario 1- The "Stay at Home" order not extended past May 4th and allows gatherings of up to 100 individuals through the summer months and all restrictions lifted by September. GENERAL FUND SUMMARYN PROJECTED BUDGET 2020 COVID REDUCTIONS COVID REDUCED BUDGET REVENUES SALARIES AND BENEFITS SUPPLIES AND PROF SERVICES 67,475,493 44,958,702 22,762,577 (8,602,709) (3,081,520) (3,136,432) 58,872,784 41,877,182 19,626,145 TOTAL EXPENSES 67,721,279 (6,217,952) 61,503,327 OVER/(UNDER) FUNDED (245,786) (2,384,758) (2,630,544) 105 INFORMATIONAL MEMO Page 10 SCENARIO 1 - GENERAL FUND REVENUES AND EXPENSES 6 4 2 h 6 4 2 Jan W Mar Apr May Jun Jul Aug Sep Oct Nov Dec -S1-Revenues -S1-Expenses •••••• Bud Revenues •••••• Bud Expenses On the next page is a graph for Scenario 1 that shows the 2020 budget for revenue along with the revised revenue projections based on lost as well as delayed revenue. The yellow line indicates the 2020 revenue budget, by month. The blue section in each bar indicates the adjusted revenue budget after taking into consideration both lost and delayed revenue. The orange section of each bar indicates lost revenue, while the gray and green sections indicate delayed revenue; gray is revenue delayed but projected to be received later in 2020 while green is projected to be received in 2021. 106 INFORMATIONAL MEMO Page 11 S1 REVENUES - BUDGET VS. COVID Revised Revenue COVID Reductions a Delayed Revenues in 2020 ® Delayed Revenues to 2021 —Budgeted Revenue - $12 $12 c c 0 0 $10 $10 $4 $4 $2 $2 JAN FEB MAR Im DEC $2 $2 $4 $4 $6 Scenario 2 - Stay at Home Extended into June: - Stay at home order extends by an additional month, through June 4, 2020 and allows for gatherings of up to 100 individuals through the summer months and all restrictions lifted by September. - Any extension on the stay at home order will most likely result in more businesses going out of business. - Sales tax, along with admissions, and gambling taxes will be significantly impacted through June but will begin to grow in June. - Due to increases in unemployment benefits, consumer demand could fuel sales growth back to 70% of pre -pandemic sales by the end of the year. - We would still expect minimal defaults on property tax payments but there would be a cash flow issue. - Casinos could experience half the demand through summer and into fall and back to 60% by the end of the year. - Admission tax will remain low through summer and return to 70% of prior year by the end of the year. - During the closure order, utility tax revenue could be 20% below normal and returning to normal levels in the fall. - Programming revenue from the Tukwila Community Center will begin to provide some programming during the summer and fully open by October. With Scenario 2, the City would need to close an additional gap of $4.3 million. 107 INFORMATIONAL MEMO Page 12 Scenario 2 - The "Stay at Home" order is extended until May 31st and allows for gatherings of up to 100 individuals through the summer months and all restrictions lifted by September 2020 COVID COVID REDUCED GENERAL FUND SUMMA T REDUCTIONS DGET REVENUES 67,475,493 (10,473,648) 57,001,845 SALARIES AND BENEFITS 44,958,702 (3,081,520) 41,877,182 SUPPLIES AND PROF SERVICES 22,762,577 (3,136,432) 19,626,145 TOTAL EXPENSES 67,721,279 (6,217,952) 61,503,327 OVER/(UNDER) FUNDED (245,786) (4,255,696) (4,501,482) SCENARIO 2 - GENERAL FUND REVENUES AND EXPENSES 12 2 12 o n �o �D 8 6 4 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -52-Revenues -52-Expenses •••••• Bud Revenues •••••• Bud Expenses 8 6 4 2 INFORMATIONAL MEMO Page 13 S2 REVENUES - BUDGET VS. COVID � Revised Revenue � COVID Reductions ® Delayed Revenues in 2020 � Delayed Revenues to 2021 -Budgeted Revenue JAN FEB MAR $10 `o $S Se = SQ $2 � So AUG SEP OCT fqov DEC hassaiiii! $2 $4 56 Ss Scenario 3 — Stay at Home Order Extended into July: - Stay at home order extends by an additional month, through July 4, 2020 and allows for gatherings of up to 50 individuals through the summer months and additional restrictions lifted by Fall with full restrictions lifted by end of the year. - The assumption is restrictions would last longer in order to stave off a second wave of infection. - Any extension on the stay at home order will most likely result in even more businesses going out of business. - Sales tax, along with admissions, and gambling taxes will be significantly impacted through the end of August but will begin to grow in September. - Due to increases in unemployment benefits, consumer demand might fuel sales growth back to 60% of pre -pandemic sales by the end of the year. - We would still expect minimal defaults on property tax payments but there would be a cash flow issue. - Due to the length of restrictions with this scenario, casinos would not open in 2020. - Admission tax will remain low through summer and return to 60% of prior year by the end of the year. - During the closure order, utility tax revenue could be 20% below normal and returning to normal levels in the fall. - Programming revenue from the Tukwila Community Center will begin to provide some programming during the summer but not return to normal in 2020. 109 INFORMATIONAL MEMO Page 14 With Scenario 3, the City would need to close an additional gap of $7.1 million. Scenario 3 - The "Stay at Home" order is extended until July 4th and allows for gatherings of up to 50 individuals through the summer months and additional restrictions lifted by Fall will full restrictions 2020 COVID COVID REDUCED GENERAL FUND SUMMARY IL BUDGET REDUCTIONS BUDGET REVENUES 67,475,493 (13,305,252) 54,170,241 SALARIES AND BENEFITS 44,958,702 (3,081,520) 41,877,182 SUPPLIES AND PROF SERVICES 22,762,577 (3,136,432) 19,626,145 TOTAL EXPENSES 67,721,279 (6,217,952) 61,503,327 OVER/(UNDER) FUNDED (245,786) (7,087,300) (7,333,086) SCENARIO 3 - GENERAL FUND REVENUES AND EXPENSES 12 12 C C O O I 10 10 S S 6 F: 6 4 4 2 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec S3-Revenues - S3-Expenses ...... Bud Revenues ...... Bud Expenses 110 INFORMATIONAL MEMO Page 15 S3 REVENUES - BUDGET VS. COVID Revised Revenue � COVIB Reductians � Belayed Revenues in 2020 � Belayed Revenues to 2021 —Budgeted Revenue N $12 — c 0 i $10 $B $6 $4 $z $B - JAN FEB MAR $2 $4 $6 $8 A summary of the 3 scenarios are as follows: I010I7J $12 c 0 $10 $S $6 $4 $2 Initial assumption $6.1 million in lost revenues in 2020 Scenario 1 Additional $2.4 million for a total of $8.5 million Scenario 2 Additional $4.3 million for a total of $10.5 million Scenario 3 Additional $7.1 million for a total of $13.3 million INFORMATIONAL MEMO Page 16 Also included is a summary of the assumptions for each scenario (revised for 4/27/20): Assumption Scenario 1 Scenario 2 Scenario 3 Basis Stay at home order does not extend beyond Stay at home order extends by an additional Stay at home order extends by an additional May 4, 2020 and allows for gatherings of up month, through June 4, 2020 and allows for month, through July 4, 2020 and allows for to 100 individuals through the summer gatherings of up to 100 individuals through gatherings of up to 50 individuals through the months and all restrictions lifted by the summer months and all restrictions lifted summer months and additional restrictions September. by September. lifted by Fall with full restrictions lifted by end of the year. Any extension on the stay at home order will most likely result in more businesses going The assumption is restrictions would last out of business. longer in order to stave off a second wave of infection. Any extension on the stay at home order will most likely result in even more businesses going out of business. Sales and Other Sales tax, along with admissions, and Sales tax, along with admissions, and Sales tax, along with admissions, and Taxes gambling taxes will be significantly impacted gambling taxes will be significantly impacted gambling taxes will be significantly impacted through May but will begin to grow in June. through June but will begin to grow in June. through the end of August but will begin to grow in September. Adopted Budget., Revised Budget: $14,541,497 Revised Budget: $13,689,699 Revised Budget: $11,660,178 $20,600,686 Reduction of$6,059,179 Reduction of$6,910,977 Reduction of$8,940,498 Unemployment Due to increases in unemployment benefits, Due to increases in unemployment benefits, Due to increases in unemployment benefits, consumer demand could fuel sales growth consumer demand could fuel sales growth consumer demand might fuel sales growth back to 80% of pre -pandemic sales by the back to 70% of pre -pandemic sales by the back to 60% of pre -pandemic sales by the end of the year end of the year. end of the year Property Taxes We expect minimal defaults on property tax We would still expect minimal defaults on We would still expect minimal defaults on payments but there would be a cash flow property tax payments but there would be a property tax payments but there would be a issue. cash flow issue. cash flow issue Adopted Budget: No projected reduction in budget No projected reduction in budget No projected reduction in budget $16,416,911 Casinos Casinos could experience half the demand Casinos could experience half the demand Due to the length of restrictions with this through summer and back to 80% by the end through summer and into fall and back to scenario, casinos would not open in 2020. of the year. 60% by the end of the year. Adopted Budget., Revised Budget: $2,927,106 Revised Budget: $2,530,205 Revised Budge[: $1,755,057 $4,274,000 Reduction of $1,346,894 Reduction of $1,743,795 Reductionof$2,518,943 Admission Tax Admission tax could remain low through Admission tax will remain low through Admission tax will remain low through summer and return to 80% of prior year by summer and return to 70% of prior year by summer and return to 60% of prior year by the end of the year. the end of the year. the end of the year. Adopted Budget: Revised Budget: $589,548 Revised Budget: $518,274 Revised Budget: $495,910 $870,000 Reduction of$280,452 Reduction of$351,726 Reduction of$374,090 Utility Tax During the closure order, utility tax revenue During the closure order, utility tax revenue During the closure order, utility tax revenue could be 20% below normal and returning to could be 20% below normal and returning to could be 20% below normal and returning to normal levels in the fall. normal levels in the fall. normal levels in the fall. Adopted Budget., Revised Budget $5,990,250 Revised Budget $5,894,713 Revised Budget $5,788,825 $6,818,610 Reduction of$828,360 Reduction of$923,897 Reduction of$1,029,785 Culture and Programming revenue from the Tukwila Programming revenue from the Tukwila Programming revenue from the Tukwila Recreation Community Center will begin to provide some Community Center will begin to provide some Community Center will begin to provide some programming during the summer and fully programming during the summer and fully programming during the summer but not open by September. open by October. return to normal in 2020. Adopted Budget: Revised Budget$380,138 Revised Budget$357,569 Revised Budget$318,243 $601,000 Reduction of $220, 862 Reduction of $243,431 1 Reduction of $282, 757 Because it is currently expected that a COVID related recession will last through 2021, there will be impacts to the next biennial budget. The City should expect a reduced base of at least $4 million in revenue in 2021 which means that ongoing savings will be needed to maintain the budget for the next biennium. C'ach FInIAf Loss of revenue without an equal offset in expenditure reduction will result in an impact to cash flows. The chart below demonstrates the impacts to cash flow for each of the 3 112 INFORMATIONAL MEMO Page 17 scenarios modeled as well as cash flow for the current budget; revenue received by the City each month less payment of expenditures each month. As indicated in the chart below, if the general fund began the year at zero (no cash in the bank), the general fund would end the year at very close to zero. However, during the year, the general fund would have a cash deficit of $3.4 million in April and a cash deficit of $2.3 million in October. Approximately $3.4 million in reserves are currently used for cash flow purposes in April and October, shortly before the City receives property tax revenue. As each of the 3 scenarios indicate, without reducing expenditures above what has already been identified, the need for cash on hand throughout the year increases. Scenario 1 would require maintaining a minimum contingency fund reserve of $5.2 million in order to cover expenditures, while Scenario 3, the worst case, would require a minimum contingency fund reserve of at least $7.8 million at year-end to maintain a positive cash balance. Minimum contingency fund reserves are summarized as follows: Current budget $3.4 million required to maintain positive cash flow Scenario 1 $5.2 million required to maintain positive cash flow Scenario 2 $7.1 million required to maintain positive cash flow Scenario 3 $7.8 million required to maintain positive cash flow CASH FLOW $6 �S1 CaIhFl W S2Cash FI1%, S3 Cash Row Budget Cash Flow $a Financial Reserve Policy — General Fund and Contingency Fund The City adopted a reserve policy that was most recently amended by Resolution 1919, adopted by Council on November 20, 2017. The policy states that the general fund unassigned fund balance shall equal or exceed 18% and the contingency fund reserve 113 INFORMATIONAL MEMO Page 18 balance shall equal or exceed 10% of previous year general fund revenue, exclusive of significant non -operating, non -recurring revenues such as real estate sales or transfers from other funds. The policy also requires a one-time revenue reserve that will be maintained in the contingency fund. The one-time revenue reserve shall be credited annually with 10% of the prior year one-time revenues to the extent general fund surplus for the year is sufficient to cover the reserve funding. A copy of the resolution is included as an attachment to this memo. The policy also states that any draw down of minimum balances shall occur only upon recommendation of City Administration and approval by City Council through a resolution. Should a draw down occur, the City Administration shall establish a plan, no later than the end of the fiscal year following the decline, to restore the fund balance to the prescribed minimum level. The plan shall be presented to and approved by the City Council. Per Government Finance Officers Association (GFOA), a national organization representing public finance professionals throughout the United States and Canada and, among other functions, provides best practice guidance on all aspects of government finance functions. For minimum unassigned general fund balances, GFOA recommends, "at a minimum, that general-purpose governments, regardless of size, maintain unrestricted budgetary fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures." Other considerations include: - Vulnerability to natural disasters; - Dependency on volatile revenue sources, in our case, sales tax; - The predictability of its revenues and the volatility of its expenditures (i.e., higher levels of unrestricted fund balance may be needed if significant revenue sources are subject to unpredictable fluctuations or if operating expenditures are highly volatile); - Perceived exposure to significant one-time outlays (e.g., disasters, immediate capital needs, state budget cuts); - The potential drain upon general fund resources from other funds, as well as the availability of resources in other funds; - The potential impact on the entity's bond ratings and the corresponding increased cost of borrowed funds Additional best practices include the following: - Define the time period within which and contingencies for which fund balances will be used; - Describe how the government's expenditure and/or revenue levels will be adjusted to match any new economic realities that are behind the use of fund balance as a financing bridge; - Describe the time period over which the components of fund balance will be replenished and the means by which they will be replenished; - Governments should seek to replenish reserves within one to three years of use. 114 INFORMATIONAL MEMO Page 19 Parameters for using unassigned general fund balance and contingency fund reserves should include the following: - Are one time in nature. Once they are used, they are gone unless replenished via a repayment plan. - Some reserves must be maintained for cash flow purposes. The amount maintained is determined by the lowest balance during the fiscal year. (As noted above in the cash flow section, with each worsening scenario, the amount of reserves required to maintain a positive cash flow increase. - Funds can be used for short-term downturns/losses but any use of the funds must be repaid within a reasonable timeframe. - Funds used for longer -term downturns should be a stop -gap only and a long-term, sustainable solution must be identified and implemented. - It should be noted that the draft general fund unassigned fund balance as of December 31, 2019 meets best practice guidelines of maintaining a minimum two months of general fund expenditures. Current reserves are as follows (draft until 2019 is officially closed): "General fund unassigned fund balance $12,476,158 Contingency fund $6,402,392 One-time revenue reserve $699,586 Total reserves $19,578,136 ** Exceeds required unassigned fund balance by $951,851 New Information for April 27, 2020 Finance Committee Financial Reserve Policy — Enterprise Funds The Reserve Policy also includes requirements for enterprise funds. Per the policy, the unrestricted balances of the enterprise funds shall equal or exceed 20% of the previous year revenue, exclusive of the effects of GASB Statement 68, as well as significant non - operating, non -recurring revenues such as real estate sales, transfers in from other funds, or debt proceeds. Parameters for unrestricted balances in excess of required reserves include the following: - Enterprise funds cannot subsidize the general fund. Any enterprise funds utilized for general fund purposes would need to be via an interfund loan that would be required to be repaid, with interest, within a reasonable timeframe. - Reserves above the required 20% should be retained for planned and/or required capital projects adopted in the Capital Improvement Plan. The chart below details the draft ending unrestricted fund balance as of December 31, 2019 and includes the required reserve as well as a high-level calculation of the impact to ending fund balance after taking into consideration capital projects that are included in the Capital Improvement Program through 2024, adopted by City Council via Resolution No. 1953 on December 3, 2018. 115 INFORMATIONAL MEMO Page 20 The net effect on unrestricted (ending) fund balance includes the total cost of capital projects through 2024 less any dedicated revenue (grants, King County Flood Control, etc.) and operating revenue utilized to complete the projects. The figures below are high- level only and do not take into consideration loss of revenue in 2020 because businesses are currently closed or possible rate increases in future years. As information becomes available regarding lost revenue during the shutdown, the chart can be updated. 12/31/2019 20% of Policy Net Effect of Estimated Net Unrestricted 2018 Revenue Compliance Capital Projects Unrestricted Fund Balance * on Fund Fund Balance Balance 12/31/2024 401 - Water 7,484,856 1,425,806 Y (5,900,000) 159,050 402 - Sewer 13,606,550 2,174,173 Y 2,020,000 13,452,377 412 - Surface Water 5,423,776 1,423,961 Y (126,000) 3,873,814 *Adjusted for removal of the effects of GASB Statement 68 Unemployment The City of Tukwila is a `reimbursable employer' as are many government agencies in Washington State. This means that the City does not pay a monthly unemployment premium like we do with Industrial Insurance. Rather, when a former employee is receives unemployment, Employment Security Department (ESD) will pay the unemployment claim to the former employee then bill the City for those costs. Given the current COVID-19 pandemic and changes in unemployment regulations at both the Federal and State levels, unemployment rules have changed quite a bit and could continue to evolve. The Federal stimulus in the recently enacted CARES Act created Pandemic Unemployment Assistance (PUA) for businesses and workers affected by COVID-19. Key changes in unemployment due to the pandemic include the following- - Eligibility for unemployment benefits is expanded to include many Washington employees who would normally not qualify for unemployment including many self- employed individuals and those that do not have the typically required 680 hours to claim unemployment. - An additional $600 per week is available to nearly everyone on unemployment from March 29, 2020 through the week ending July 25, 2020. - Benefits extended by 13 weeks, for a maximum of 39 (which is about 9 months). This includes individuals who were already on unemployment as well as those who are newly eligible. Benefits to employees that are laid off or furloughed: Employees eligible to file for unemployment due to COVID-19 staffing reductions would receive a weekly benefit amount of between $188 and $790 from Washington State Unemployment. All employees receiving unemployment could receive an additional $600 per week from the CARES Act. Given the additional $600 provided under the CARES Act, some employees, mostly part- 116 INFORMATIONAL MEMO Page 21 time staff, could receive more money through unemployment benefits than if they continued to receive a regular paycheck. Costs incurred by the City: As previously stated, reimbursable employers are required to pay 100% of unemployment costs. However, during this national emergency, the federal government is offering some relief to reimbursable employers: - If an employee's hours were reduced or eliminated to follow public health recommendations, the federal government should pay 50% of the unemployment charges. - Workers at these government agencies are eligible for the Federal Pandemic Unemployment Compensation supplement of $600 per week. It is probable that unemployment costs associated with any employee that was furloughed or laid off because reduced/eliminated work hours to follow public health recommendations would be reimbursed at 50%. This would most likely include part-time staff hired in the Parks and Recreation departments. Programs were shut down because social distancing could not be adequately maintained. However, reductions in full-time staff would be because of a loss of revenue, not because of the need to follow public health recommendations. While still unclear, it is highly unlikely that these unemployment costs would be reimbursed and the full unemployment cost would be borne by the City. Financial Impacts to Residential Street, Arterial Street, and General Government Improvement Capital Projects Funds The financial impact of the pandemic will not only reduce revenues in the general fund, but will also effect dedicated and restricted revenues in our capital projects funds. Revenues that are expected to be negatively impacted include parking tax, gas tax (MVFT), real estate excise tax (BEET), solid waste utility tax, and impact fees. At this time, we do not expect that grants already approved will be negatively affected by the pandemic. The chart that follows on the next page summarizes the financial situation for each of the 3 funds and is followed by a narrative explanation for each fund. 117 INFORMATIONAL MEMO Page 22 Residential Streets Bridges and Arterial General Government (103) Streets (104) Improvements (303) Beginning Balance - 2,090,386 656,306 Forecasted Revenues Taxes 243,000 1,027,250 Fees 470,056 Grants 359,609 2,889,000 Interest 20,000 414 Transfers -In 100,000 - Total Available Funds 702,609 6,496,692 656,720 Forecasted Spending Wages and Benefits 485,383 50,000 Forecasted Spending by Project Fund Project Name 103 42nd Ave S Phase III 378,000 103 53rd Ave S 399,000 103 Traffic Calming/Residential Safety Improve. 2,000 103 Interfund Loan Repayment 336,932 104 Strander Blvd Extension Grant Reimb. 622,000 * 104 West Valley Hwy (1-405 - Strander Blvd) 350,000 * 104 Boeing Access Rd/Airport Wy Seismic Retrofit 2,614,000 104 42nd Ave Bridge Replacement 320,000 104 Annual Overlay 1,400,000 104 Annual Bridge Inspection & Repairs 335,000 104 ADA Improvements 50,000 104 Annual Traffic Signal Program 125,000 104 Wetland & Environmental Mitigation 40,000 104 Transportation Element of Comp. Plan 400,000 104 Walk & Roll Program 75,000 303 6300 Dry Fire Sprinkler System 30,000 303 Facilities Study 190,000 104 Park Impact Fees 1,009,400 Total Spending 1,115,932 7,825,783 270,000 Ending Balance (413,323) (1,329,091) 386,720 * Indicates projects funded by grant revenue Residential Street Revenues currently forecasted for this fund include gas tax (MVFT) and grant revenue that was invoiced in 2019 and expected to be received in 2020. At this time, the City and Seattle City Light are still disputing revenue of approximately $500 thousand the City expected to receive from the utility as part of the 42nd Ave S and 53rd Ave S roadway projects. Because this revenue is still disputed, it is not included in the summary table that follows this discussion. This matter is currently being handled by our attorney. It should be noted that a budgeted transfer in of $100 thousand is still included in the revenue budget. Expenditures include final costs associated with the 42nd Ave S and 53rd Ave S projects as well as an interfund loan repayment that was necessary at the end of 2019 to keep the fund from reflecting a negative cash balance at the end of 2019. Total amount of the loan was $337 thousand and was necessary because Seattle City Light did not reimburse the City, as expected. 118 INFORMATIONAL MEMO Page 23 Based on the current forecast for revenue and cost estimates for the projects listed above, it is projected that this fund will have a negative fund balance of $514 thousand at the end of 2020. Unless Seattle City Light reimburses the City for costs incurred on the 2 roadway projects, a transfer in of over $400 thousand will be needed to keep this fund positive at year-end. Staff is recommending that the transfer come from the General Government Improvement fund. The transfer amount, based on current information, could be roughly $386 thousand, leaving a deficit of only $28 thousand to be covered by the general fund. If Seattle City Light reimburses the City, the funds could be transferred back to the general government fund and the general fund. Arterial Street Revenues currently forecasted in this fund include parking and gas taxes, real estate excise tax, impact fees, and grant revenue. It also includes the additional solid waste utility tax approved by Council in 2019. At the March 2, 2020 regular council meeting, Council authorized the use of this tax for 30% design for the 42nd Ave South Bridge Replacement project. It should be noted that a budgeted transfer of $1 million was eliminated during the first phase of budget reductions. Expenditures in this fund include wages and benefits for three FTE as well as a number of projects; many of which are funded solely by dedicated/restricted revenues and transfers in from the general fund. Also included are 2 projects that are almost entirely funded by grants. Without reducing and/or eliminating projects that are not funded by grant revenue, the fund will end the year with a deficit of over $1.3 million. In order to keep this fund solvent, staff is recommending the following changes- - Delay the Transportation Element of the Comprehensive Plan and the Walk & Roll program until 2021. - Reduce funding for the following projects: overlay, bridge inspections, ADA improvements, traffic signal program, and wetland mitigation by a total of $865 thousand. General Government Improvements As part of the first phase of budget reductions, a transfer in of $200 thousand was eliminated. No other revenues are dedicated to this fund. Planned expenditures in this fund include $190-thousand for phases I and II of a facilities study that includes updated seismic assessments of several facilities, $30 thousand for the dry fire sprinkler system, as well as $100 thousand for other minor repair projects that could be needed this year. Because of the healthy beginning fund balance of $657 thousand, eliminating the transfer in does not create deficit fund balance at year-end. This fund is currently projected to end the year with a fund balance of over $386 thousand. Due to the current deficit in the residential street fund of $413 thousand, staff recommends transferring any excess funds 119 INFORMATIONAL MEMO Page 24 from this fund into the residential street fund, lessening the impact to the general fund. As mentioned in the discussion on the residential street fund, if Seattle City Light reimburses the City, the funds can be transferred back into this fund. New Information for April 28, 2020 Finance Committee Recap of Current Projected Revenue Gap As discussed in the first five pages of this memo, the City identified an initial revenue gap (March through May) of $6.1 million that has been filled with phase I reductions of $4 million and are working with departments to identify an additional $2.1 million to close the remaining gap. Departments are scrubbing their budgets and have already identified $2 million, leaving a gap of must $100 thousand. There will be an additional revenue gap that needs to be closed. Three scenarios were developed resulting in additional revenue losses ranging from $2.4 million up to $7.1 million. Details of each of the scenarios can be found on pages 9 — 16 of this memo. Additional revenue gap for each scenario is as follows. The amounts below are in addition to the initial $6.1 million revenue aao discussed above. Scenario 1 - $2.4 million + initial revenue gap $6.1 = total revenue gap $8.5 Scenario 2 - $4.3 million + initial revenue gap $6.1 = total revenue gap $10.5 Scenario 3 - $7.1 million + initial revenue gap $6.1 = total revenue gap $13.3 Given what we know today, Scenario 1 is most likely too optimistic. Based on economic indicators today, it is now believed, and is in line with what other area cities are projecting, that the actual revenue gap would be somewhere between Scenario 2 and Scenario 3, which would result in an additional revenue gap of around $6 million, for a total revenue gap in 2020 of $12 million. Additionally, economic indicators point to a continuing loss of revenue in 2021 as well. At this time, we are projecting a revenue loss of $6 million in 2021. Thus, the City will need to fill an additional gap of $6 million in 2020, for a total gap of $12 million with an ongoing budget shortfall of $6 million in 2021; meaning ongoing budget reductions. Decision Tree On one extreme, the City could utilize only contingency funds to fill the gap in 2020. Given the current contingency fund balance of $7.1 million (see page 19 for specifics on the contingency fund), this would leave $1.1 million to fill a small portion of the revenue gap in 2021. This is not a recommended option as it leaves no contingency available for a second or third wave of infections that could hit later in 2020 or in 2021 nor would it leave funds for any other emergency that could arise. The other extreme would be to reduce labor costs by $6 million to fill the remaining revenue gap and not utilize contingency funds. While this would result in ongoing savings, this would result in significant loss of staff and significantly reduce the ability to provide services to our communities. 120 INFORMATIONAL MEMO Page 25 Rather, staff is recommending a balanced approach of matching contingency funds to labor reductions using a 3 to 1 ratio. This approach ensures that we stay true to our values of Caring, Professional, and Responsive. We are in this together and all departments need to share in the responsibility of reducing costs. Decision Tree Tools A more refined decision tree will be presented at the next Finance Committee meeting with the intent of identifying tools such as the following to close the gap: - Voluntary retirements and separations - Involuntary furloughs - Voluntary furloughs - Layoffs - Voluntary pay reductions Required Services and Current Service Levels The City of Tukwila is a code city and operates under RCW 35A Optional Municipal Code. The Optional Municipal Code provides flexibility in the administration of municipal government and permits code cities to adjust procedures and programs to meet individual needs. The Code (RCW 35A) establishes the powers and responsibilities of councilmembers, the mayor, and city administrator. Other city officials have only powers as the city council vest in them. This results in an increase in administrative choices available to code cities. There are legal requirements regarding planning in the Growth Management Act and minimum staffing is necessary for development activities. There are relatively few mandates for code cities in the RCWs regarding minimum staffing and service levels except for police. Code cities are required to appoint a chief law enforcement officer pursuant to RCW 35A.12.020 and a city police department must be under the control and direction of the chief of police. However, neither the state constitution nor state law mandates a specific number of law enforcement officers or level of law enforcement services. Thus, staffing and service levels are policy decisions in the discretion of the City Council. If the City does not maintain their own police department, the County would be required to provide coverage. There are no specific statutes that require cities to provide fire protection services or parks and recreation services. However, as a practical matter, cities provide some measure of these services. Through long-standing Council policy, the City Council has set current service levels through policy decisions during the budget and budget amendment process. The current budaet reflects priorities set by City Council and manv of the oroarams included in the budget closely align with the City's adopted Strategic Goals. Attached to this memo is the list of all programs in the general fund. Each program went through an extensive scoring process that benchmarked every program against the City's 121 INFORMATIONAL MEMO Page 26 Strategic Goals and basic program attributes. Tier 1 and Tier 2 programs most closely align with the Strategic Goals. All programs that are legally mandated either at the federal or state level are identified with an *. Many of the programs that have been identified as legally required are because of services the City provides. For example, because we Drovide fire services and emDlov firefiahters. there are reauired traininas that all firefighters must complete on a regular basis. Professional Services Details on professional services for each department are detailed in the 2019 — 2020 Biennial Budget Document. During Phase II when departments were required to scrub their budgets, many budget categories were reduced, including professional services. It should be noted that some contracts in the professional services category cannot be reduced as they are legally required. For example, audit costs are captured in professional services and an annual audit is required per RCW. Details on professional services for each department in the aeneral fund can be found on the following Daaes: Department Page Number(s) City Council 89 Mayor's Office 103 - 113 Municipal Court 124 — 125 Parks & Recreation 138 — 160 Community Development 171 — 182 Police 194 — 210 Fire 222 — 235 Public Works 248 — 260 Administrative Services 271 — 273 Finance 284 TIS 296 In addition to details on professional services, the chart on the following page summarizes all expenditures by major category in the general fund. 122 INFORMATIONAL MEMO Page 27 2019 - 2020 Biennial Budget General Fund Expenditure by Type General F-und Expendi€ures by Type City of Tukwila, Washington Actua l Budgel Pa rae nt oharga Prajec-bELd 2101G 2017 2019 2D1B 2D19 2020 2018-19 2a19-2D Salaries S 26,737,1578 S 27.618.116 # 27,373s BOB S 28,f102,303 S 29,395,986 S 3D,296,d21 2.9% 3.1% Extra Labor 627,M4 653,302 7A473 7a4.60 762,1333 764.697 1.1% ores Mime 1,511),1W 1.513.455 1,A54,443 1,B72,D35 1,35D,DN 1,354,OD0 -19.3% 0315 Total Wages 28,OB3,B54 29,785,074 30,1f34T 2 31,D29.CO1 31,508,923 3Z415,317 1.6% ts% FICA 1,698,26D 1,75D,040 1,791,576 1,843,684 Z107,152 2,Dfl9,OB2 14.3% -GIs% LEOFF 2 8131,656 93D,131 870,516 M,316 W-Z207 896,125 -2.s% PERS 1,3135,B67 1,512,991 1,66ZW4 1,O1Oo13 1.751,659 1,032,555 e.ez �.9% IndusirialInsurrance 9711,20o 634,0131 699z71 N1,170 861,416 934,A77 -e.s% HE% Med,Drel,Disabiity,Lr7e 5,563,572 5,597,627 5,7315 BN9 6.N7. 64 5065M 5,285,OO7 -s-z% t,8% Unemploymenl 4I},3AD 13,d39 21,354 13,D00 - on% on% Clothing Allowance 5,102 510rJ 1a,T80 10,774 13,525 0.5 5 -2G.9% on% Total B�nefi# 10,27D,937 iD-,w,738 10,79341)21 11,765.321 11,9&%519 14019,052 AAM *s% Office Supplies 47DAG 4115,174 494,459 481,442 427,525 427,525 a1.2% OD% Small Tools & Minor Equip 1 D9J$22 149,000 9Z-D2D 97,318 163,569 133,5ff0 69.1 % -1433:% Reereafion Prng Supplies 112235 19.782 20-42 31,13D0 37,090 37,000 IGA% anal Fire Supplies 1B1,56B 114,465 14"3 186,977 151,37E 161,3T7 - CD% StreE. Ma 1t Supplies 167,099 1B6,077 15k524 24D,3D0 152,760 165,725 -3&774 .2n% OM- 342,562 M7,2134 30B,B64 H1,2115 325,483 306,483 -s-,% lotal Supplies 1AS3.445 1.2111.702 1�22`},d02 1,308,122 U57.656 1.213,6111 ter% ph ProiessionA Senkes 2.776,406 3,3D4,744 3AM408 3,1102,177 3,M2,4H 1. 144,0M -11.1-4 -i s% Commtnicaticn 407,476 4DD.a2a 471,M9 43l!-.370 434,6M 434,13M -0 z ou% Tra-,el 143,012 1136,239 16D,103 1ali,8BD 169,630 159,630 1=_.9z ou% Ad*nising 24,222 26,052 3Dz51 51,500 47,550 A7,WA CD% Operating Rents & Leases 294,737 478,425 5138�4W 4A5 670 466, 130 466,230 -A,oz 13 D% Equipment Replacerneni 4I32,893 1W.014 567AB IM014 067,1312 166,014 301,e% -?5.1% Equip Operations & Maint 1.13D,405 1,411,723 1,641,916 1,055,686 1,763,643 1,784,020 SIM 1r% Insurance 810,799 131113,097 07D,416 W-13.962 1.0135.775 1,1347,762 2.9% i Utililies 1,828,751 1,015.730 1,99Z419 1,928,305 109,424 2,D69,1O1 3.7% 33% Repairs and Maintenance 850.278 6M.275 5B4,152 BOT,4118 623.150 587.912 -zzax -5.7% Miscellaneous 832,886 03D,3D5 1,031[1,083 1.114.473 886,637 89D,637 -2a.3% 02% Clams &Judgements 160,514 119,1D0 334,702 3A2,DOD 3213,090 32D,000 is-z% a13% Credit Card Fees 38,645 58.078 4D,456 71),13111 43,13111 43,OB1 -3e.9% QD% Other E.014 6,398 D D,SOD 4.250 4,250 -34.6% one Total ServicrLs 9,71D.B99 11),07,7% 11193d MO 11,873.136 11,M.377 11.165.751 ,Z1% 4n% SCORE Jain 1.310,736 1,4116,963 1,37D, 506 1,533,4(15 1,1526,355 1,675.146 -DA% 3D% Valley Communications 1,034,11213 1,111,663 1,137,420 1,184,617 1,184,253 1,219,01 o.oz 3J2% Animal Conaal 1139,136 111,A92 55064 119.852 125,DD0 131,250 s-2% SD% Other 244,1565 251,070 240.217 254,D50 2A6,758 293,117 129% .22% lotallntergovemmentaJ 2011,347 ZD41,388 3)92D,T07 3,191.124 3X2.36C 3.319,OD4 1.0% to% Machinery and Equipment 79P.Ml 117.679 7E..E.89 313,DD0 24D,000 27D,000 70o.0% 1;!--4s Total Capital 798,601 117,G79 76�50 30,00 244,OD6 270,OD0 rooaw% 1t6% Total NpL ExpendRun-i 53,773.922 54,977,431 57,217,642 59,198,734 59,50 &W 0,402,8D5 0 1. Trarrsfers- CDettSavFundS 2,874,831 2,773,452 3,37B&04 5.940.58D 4.D33,851 1,587,190 31.oz ii.i�fi Trarrsfers- Capital, Daher 1,451,OrJD 2,5134,044 1,5a190 3,1322,I}91) 2119= 1,621,9W •37.3% -.28E% Transfer - Contingency a32,?3^_ 180,715 92,1672 - 565189 21D,OD0 on% .2586�fi Total FxpendihuP!i S 58,533,435 S 611.495,692 $ 62,277,417 t 68,667.314 $ 65.065.875 $ 65.821,9d5 65 123 INFORMATIONAL MEMO Page 28 Possible Next Steps for Council - May 4, 2020: confirmation from Council that, based on what we know today, the revenue gap for 2020 is $12 million and a continuing revenue gap of $6 million in 2021: meaning ongoing budget reductions. - May 11, 2020: Decision on tools to be used in the decision tree to close the revenue gap. Suggested schedule for the next several Finance Committee meetings • April 13, 2020: review 2020 projections, review cash flow, review contingency fund reserve policy and best practices • April 27, 2020: review impacts to capital projects in residential and arterial street funds, impacts of unemployment costs to the City • May 11, 2020: Review decision tree and triggers for each scenario • June 8, 2020: review updated projections and sales tax data RECOMMENDATION Updated Recommendation: Council consensus on 2020 revenue gap scenario of $12 million with a continuing revenue gap of $6 million in 2021 and discussion of tools that may be used to close the aaD. ATTACHMENTS Resolution #1919 — Reserve Fund Policy 2019 — 2020 Biennial Budget Document Programs by Department (pages 452 — 457) 124 Cl*ty of T Washington Resolution No. / Q I q A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, REVISING THE PREVIOUSLY ADOPTED FINANCIAL RESERVE POLICY TO ELIMINATE THE EFFECTS OF GASB 68 FOR PURPOSES OF CALCULATING THE UNRESTRICTED BALANCES OF THE ENTERPRISE FUNDS; AND REPEALING RESOLUTION NO. 1861. WHEREAS, for the well-being and sustainability of the community, its residents, and businesses, it is important that the City of Tukwila be prepared to respond to any and all situations that could result in a risk and/or crisis to the City's finances including, but not limited to, revenue shortfalls and unanticipated expenditures; and WHEREAS, it is the responsibility of the City Council of the City of Tukwila to provide policy direction for the City's biennial budget through the passage of motions and ordinances, adoption of resolutions, and final approval of said budget; and WHEREAS, a financial reserve policy establishes, attains, and restores minimum fund balances, including self -insured health care reserve funds, and specifies review and reporting of such; and WHEREAS, beginning in 2015 the City was required to implement Governmental Accounting Standards Board Statement 68 (GASB 68) related to accounting and reporting for pension plans; and WHEREAS, it is the responsibility of the City to report the effects of GASB 68 in the Comprehensive Annual Financial Report (CAFR), even though the effects are not a current liability of the City; and WHEREAS, the City desires to eliminate the effects of GASB 68 for purposes of calculating the unrestricted balances of the Enterprise Funds; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Minimum Fund Balances. A. At the close of each fiscal year, the General Fund unassigned balance shall equal or exceed 18% and the Contingency Fund reserve balance shall equal or exceed 10% of the previous year General Fund revenue, exclusive of significant non- WAWord Process ing\Reserve Policy revised 11-14-17 SW:bjs Page 1 of 2 125 operating, non -recurring revenues such as real estate sales or transfers in from other funds. B. At the close of each fiscal year, the unrestricted balances of the Enterprise Funds shall equal or exceed 20% of the previous year revenue, exclusive of the effects of GASB Statement 68, as well as significant non -operating, non -recurring revenues such as real estate sales, transfers in from other funds or debt proceeds. C. Use or draw down of minimum balances shall occur only upon recommendation of City Administration and approval by City Council through a resolution. Should use or draw down occur, the City Administration shall establish a plan, no later than the end of the fiscal year following the year of decline, to restore the fund balance to the prescribed minimum level. The plan shall be presented to and approved by the City Council. Section 2. One-time Revenue Reserve. A One-time Revenue Reserve shall be established and maintained in the Contingency Fund. The One-time Revenue Reserve shall be credited annually with 10% of the prior year one-time revenues to the extent General Fund surplus for the year is sufficient to cover the reserve funding. Use of the reserve shall occur only upon recommendation by City Administration and approval by City Council through a resolution. Section 3. Self -insured Health Care Fun each of its self -insured health care funds in an the actuarially determined IBNR (incurred b reserve shall occur only upon recommendation City Council through a resolution. ds. The City shall maintain a reserve in amount equal to 1.5 times, or 150%, of ut not reported) balance. Use of the by City Administration and approval by Section 4. A report showing compliance with the Financial Reserve Policy shall be provided to the City Council on an annual basis, no later than July 1 of each year. Section 5. Repealer. Resolution No. 1861 is hereby repealed. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this )'04 day of 2017. AT�T"E�ST/AUTHENTICATEDo Christy O' la erty, MMC, City Clefg APPROVED AS TO FORM BY: (2CKA& Rachel B. Turpin, City Attorney W:\Word Processing\Reserve Policy revised 11-14-17 SW:bjs raw-W a Dennis Roe o , Council President Filed with the City Clerk: - c� l t7 Passed by the City Council: - Resolution Number: c� 19 Page 2 of 2 126 2019 - 2020 Biennial Budget City of Tukwila, Washington PROGRAMS BY DEPARTMENT Department Program Tier 2019 Budget 2020 Budget Allocation Allocation Administrative Seances `Accounts Payable/Budget Preparation Ter 2 45,975 48,522 Administrative Services *Civil Service Compliance Tier 2 55,060 55,733 Administrative Services *Emergency Preparedness/Response Tier 2 5,884 6,248 Administrative Services *Policy Development/Compliance Tier 2 57,278 59,710 Administrative Services *Recruitment Tier 2 81,781 82,696 Administrative Seances Communications Tier 2 250,696 263,311 Administrative Seances Community Engagement Tier 2 68,646 70,772 Administrative Seances Equity Tier 2 20,049 20,854 Administrative Seances Government Relations Tier 2 25,911 27,432 Administrative Seances Housing Tier 2 230,486 236,278 Administrative Seances Public Safety Plan Tier 2 95,975 101,568 Administrative Seances Regional Collaboration Tier 2 34,814 36,310 Administrative Services School District Tier 2 41,600 43,904 Administrative Services Tukwila Works Tier 2 10,041 10,626 Administrative Services *Benefit Plan Management Tier 3 53,812 55,906 Administrative Services *Health & Safety Tier 3 63,645 65,183 Administrative Services *Labor Relations Tier 3 142,163 147,969 Administrative Services Classification/Compensation Tier 3 86,528 90,135 Administrative Services Food Insecurity Tier 3 63,394 64,301 Administrative Services HR General Administration Tier 3 89,622 90,334 Administrative Services Internal Communications Tier 3 75,687 82,954 Administrative Services Minor Home Repair Tier 3 116,085 117,767 Administrative Services Performance Management/Training Tier 3 72,040 73,244 Administrative Seances Physical/Mental/Dental Well -Being Tier 3 173,381 174,495 Administrative Services Support for Independence Tier 3 123,371 123,839 Administrative Services Training Tier 3 27,586 28,862 City Council *Budget Oversight Tier 1 78,778 80,256 City Council *Governmental Affairs and Appointments Tier 1 91,283 92,579 City Council *Legislative Oversight Tier 1 196,528 198,485 City Council Community Engagement and Events Tier 2 65,522 66,705 Community Development *Construction Permit Review and inspection Tier 1 733,781 753,409 Community Development *Comprehensive Plan Implementation Tier 2 342,398 350,840 Community Development *Current Planning Tier 2 305,335 315,506 Community Development *Regional Government Coordination Tier 2 150,703 154,200 Community Development *Transportation Demand Management Tier 2 181,598 183,851 Community Development Code Enforcement Tier 2 267,876 274,961 Planning Commission, Board of Architectural Community Development Review and Hearing Examiner Tier 2 187,843 193,686 Community Development Rental Housing Tier 2 140,761 144,739 Community Development *DCD Administration Tier 3 318,379 325,506 Community Development *Permit Intake and Coordination Tier 3 362,099 370,625 Community Development Abatement Tier 3 88,261 89,342 Community Development Customer Inquiries and Assistance Tier 3 375,449 387,221 Community Development Recycling Tier 3 57,075 56,531 Finance *Budget Preparation Tier 2 123,022 143,213 Finance *Emergency Preparedness Tier 2 1,678 1,773 Finance Administration Tier 2 75,381 77,097 Finance Long -Range Financial Planning Model Tier 2 33,096 33,826 Finance Public Safety Plan Tier 2 48,928 51,216 Finance *Accounts Payable/Juror Payments/CTR Tier 3 182,024 188,300 Finance *Capital Asset Accounting Tier 3 42,762 49,600 Finance *Cashiering/Treasury/Banking/Unclaimed Property Tier 3 209,676 213,696 Finance *Debt Management Tier 3 67,523 54,438 Finance *Financial Reporting & Analysis for Departments Tier 3 63,362 67,061 Finance *Financial Reporting/CAFR Tier 3 218,804 229,105 *Denotes a program mandated at the federal or state level 452 127 2019 - 2020 Biennial Budget City of Tukwila, Washington Department Program Tier 2019 Budget 2020 Budget Allocation Allocation Finance *GUEden Administration Tier 3 59,329 67,174 Finance *Grant Accounting Tier 3 50,967 72,809 Finance *Insurance & Risk Management Tier 3 759,706 775,811 Finance *Payroll Administration Tier 3 196,636 203,803 Finance Accounts Receivable/Misc. Billings/LID Tier 3 51,449 55,324 Finance Business License Administration Tier 3 124,948 61,459 Finance Sales & Other Taxes Tier 3 50,947 96,838 Finance Training & Development Tier 3 26,498 27,197 Finance Utility Billing Tier 3 210,949 216,301 Finance *Indirect Cost Allocation Tier 4 33,489 19,620 Finance Investment Management Tier 40,020 41,522 Fire *Apparatus and Equipment Check Tier 1 413,541 424,340 Fire *Emergency Response - Fire & EMS Tier 1 3,556,967 3,654,593 Fire *Fire Prevention Plan Review & Inspection Duties Tier 1 236,455 243,197 Fire *Fleet and 3rd Party Maintenance & Testing Tier 1 223,651 229,634 Fire *Valley Communications & Emergency Radios Tier 1 252,071 259,554 Fire *Administration Tier 2 1,180,917 1,205,711 Fire *Budgeting Tier 94,316 97,129 Fire *Emergency Management Administrative Tier 2 141,194 144,106 Fire *Emergency Management Planning Tier 2 92,499 94,464 Fire *Emergency Messaging Tier 6,172 6,305 Fire *Fire Prevention Investigation Duties Tier 2 66,192 69,095 Fire *Training received Tier 2 923,250 948,818 Community Outreach/Education Emergency Fire Management and Fire Tier 2 169,596 172,997 Fire Emergency Management Assistance Team Tier 2 36,703 37,461 Fire Fire Prevention Administrative Tier 2 74,725 76,356 Fire Pre -Fires Tier 2 29,945 30,763 Fire Professional Development Tier 2 198,052 203,982 Fire Recruiting & Hiring Tier 2 38,342 39,275 Fire *HazMat Team Tier 3 10,592 10,734 Fire *Health and Safety, Physical Fitness Tier 3 748,267 768,329 Fire *Logistics, Equipment & Supplies Tier 3 1,268,079 1,261,236 *Personal Protective Equipment (PPE) - Fire Fire Prevention & Inspections Tier 3 122,997 126,333 *Personal Protective Equipment (PPE) - Fire Suppression Tier 3 166,832 171,376 Fire *Public Records Requests Tier 3 56,572 58,194 Fire *Training Delivery Tier 3 524,579 538,490 Fire Deployments Tiier3 201,189 208,146 Fire Non -Emergency Response Tier 3 763,603 783,958 Fire Rescue Team, Water, Trench, Rope Tier 3 47,225 47,783 Fire Special Event Overtime Tier 3 11,365 11,643 Fire Custodial Services Tier 4 228,507 233,954 Fire Explorer Program Tier 4 4,951 5,095 Fire Facilities Tier 4 122,375 123,690 Fire Inter -Department Support Tier 137,966 142,198 Fire Public Services Tier 4 24,994 25,671 Fire Special Projects/Tasks Tier 4 298,703 307,780 Mayor *Council Agenda/Meeting Functions Tier 1 103,910 108,783 Mayor *Council Legislative Support Tier 1 68,225 69,727 Mayor Citywide Strategic Goals Tier 1 13,122 13,414 Mayor Legislative Affairs Oversight Tier 1 93,333 93,333 Mayor Strategic Planning and Policy Implementation Tier 1 111,619 113,229 Mayor *Attorney Services Tier 2 406,230 406,230 Mayor *Budgeting/Purchasing Tier 20,970 21,723 Mayor *Elections/Voter Registration Tier 2 33,328 33,407 Mayor *Intergovernmental Relations Tier 2 97,789 100,449 *Denotes a program mandated at the federal or state level 453 128 2019 - 2020 Biennial Budget City of Tukwila, Washington Department Program Tier 2019 Budget 2020 Budget Allocation Allocation Mayor *Legal/Public Notices Tier 2 37,406 38,462 Mayor *Ordinance, Resolution & TMC Development Tier 2 67,575 70,314 Mayor *Personnel Tiier2 40,850 41,815 Mayor *Prosecution Services Tier 2 166,000 166,000 Mayor *Public Defense Program Tier 2 479,685 481,193 Mayor Administration (Budget Preparation) Tier 2 8,257 8,342 Mayor Business & Development Attraction and Retention Tier 2 18,530 18,822 Mayor Business Relationships and Satisfaction Tier 2 13,122 13,414 Mayor Community Representation Tier 2 104,023 105,984 Mayor Destination Development Tier 2 18,047 18,216 Mayor Public Safety Plan Tier 2 37,239 38,078 Mayor Resident Inquiries and Assistance Tier 2 13,445 14,199 Mayor Special Matters (Attorney Services) Tier 2 128,500 128,500 Mayor Tukwila International Blvd Revitalization Tier 2 14,291 14,584 Mayor *City Clerk Division Administration Tier 3 64,160 65,938 Mayor *Commute Trip Reduction/Green Initiatives Tier 3 91,000 91,000 Mayor *Digital Records Center Tiier3 131,198 134,917 Mayor *Essential Public Services Tier 3 48,946 50,793 Mayor *Public Records Requests Tier 3 120,899 125,235 Mayor *Records Management Tier 3 100,489 104,410 Mayor Administration Accounts Payable Tier 3 18,913 19,329 Mayor Administration Essential Services Tier 3 29,677 8,441 Mayor Boards, Commissions and Committees Tier 3 54,188 54,942 Mayor City Policy Development Tier 3 32,035 32,744 Mayor Conferences/Training Tier 3 37,475 37,957 Mayor Economic Development Administration Tier 3 17,418 17,626 Mayor Internal Communications Tier 3 47,470 48,812 Mayor Marketing & Sales to Day Tourists Tier 3 3,665 3,750 Mayor Marketing & Sales to Overnight Tourists Tier 3 3,665 3,750 Mayor Meeting Coordination, Scheduling, Facilitation Tier 3 57,187 59,068 Mayor Organizational Development and Training Tier 3 36,982 37,733 Mayor Professional Services (Attorney Services) Tier 3 10,000 30,000 Mayor Regional Partnerships & Relationships Tier 3 32,302 32,679 Mayor Special Event Coordination Tier 3 10,440 10,817 *.Records Retention, Management, Archiving, & Mayor Destruction Tier 4 6,825 7,202 Mayor *Required Citywide Functions Tier 113,180 114,402 Mayor City Property Development and Management Tier 60,404 61,738 Mayor City Scholarship Tier 16,743 17,120 Mayor Emerging Issues & Opportunities Tier 22,383 22,591 Mayor Employee Recognition Program Tier 4 28,240 28,994 Mayor Lodging Tax Applications Oversight & Support Tier 4 3,665 3,750 Mayor Special Presentations Tier 11,198 11,411 Municipal Court *Community Education and Outreach Tier 2 14,925 15,124 Municipal Court *Court Administration Tier 2 116,307 118,768 Municipal Court *Judicial Administration Tier 2 20,830 20,864 Municipal Court *LFO Recovery Programs Tier 2 19,730 20,432 Municipal Court *Adjudication - General Offenses & Traffic Tier 3 23,946 24,236 Municipal Court *Administrative and Logistical Support for Judges Tier 3 79,615 81,807 *Commissions, Associations, Boards, and Municipal Court Committees Tier 3 33,285 34,028 Municipal Court *Compliance Monitoring Tier 3 54,692 56,041 Municipal Court *Court Financial Operations Tier 3 26,003 26,594 Municipal Court *Court Required Educational Programs Tier 3 24,729 25,331 Municipal Court *Law Related Education Tier 3 133,893 136,764 Municipal Court *Maintenance of Court Records Tier 3 27,201 27,906 Municipal Court *Non -Compliance Case Processing (Admin) Tier 3 820 820 *Denotes a program mandated at the federal or state level 454 129 2019 - 2020 Biennial Budget City of Tukwila, Washington Department Program Tier 2019 Budget 2020 Budget Allocation Allocation Municipal Court *Policy & Procedures, & Program Management Tier 3 17,322 17,689 'Technical Support - Court Case Management Municipal Court Systems Tiier3 21,369 21,902 Municipal Court * Retention/Appeals Management/Mental Health Tier 11,604 11,881 Municipal Court *Account Reconciliation and Auditing Tier 4 21,503 21,989 Municipal Court 'Assessment of Court Costs/Fines/Restitution Tier 4 9,258 9,273 Municipal Court 'Bail Bonds Tier 11,604 11,881 Municipal Court "Case Preparation Tier 4 49,213 50,516 Municipal Court 'Citations/Fines and Fees Tier 4 8,671 8,936 Municipal Court "Collections Tier 12,572 12,910 'Collections/Write-Offs/Maintenance of Inactive Municipal Court Cases Tier 25,742 26,367 Municipal Court 'Community Service Tier 4 3,288 3,405 Municipal Court `Community Service Tier 17,737 18,190 Municipal Court 'Community Work Alternative Tier 4 20,051 20,508 Municipal Court 'Conflict Counsel - Indigent Defendants Tier 4 8,186 8,374 Municipal Court 'Court Hearings Tier 98,594 98,754 Municipal Court 'Court Interpreter Management Tier 4 26,914 27,655 Municipal Court 'Customer Assistance & Payment Processing Tier 4 55,032 56,522 Municipal Court *Customer Service Tier 4 24,292 24,835 Municipal Court *Data Input Tier 4 8,671 8,936 Municipal Court 'Day Reporting Tier 8,766 8,993 Municipal Court 'Formal & Monitored Probation Supervision Tier 4 47,889 49,017 Municipal Court *Jury Manager/Management Tier 8,335 8,545 Municipal Court 'Non -Compliance Case Processing (Probation) Tier 4 24,934 25,536 Municipal Court 'Pre -Sentence Investigations Tier 15,963 16,339 Municipal Court 'Public Defender Screening Tier 4 8,766 8,993 Municipal Court 'Public Record Act/Subpoena Responses Tier 4 27,695 28,368 Municipal Court 'Video Conference Facilitation Tier 4 12,665 13,022 Municipal Court 'Warrants Tier 44,089 44,907 Municipal Court Mail Processing Tier 13,313 13,628 Municipal Court Scanning Tier 4 58,212 59,581 Park Maintenance Administration Tier 203,177 213,775 Park Maintenance Parks Tier 1,101,877 1,133,351 Park Maintenance Planning & Development Tier 2 129,242 132,507 Park Maintenance Boards & Commissions Tier 3 8,616 8,834 Park Maintenance Course Maintenance Tier 3 14,210 15,254 Park Maintenance Facility Tier 3 98,685 102,270 Park Maintenance Golf Tier 3 10,316 10,585 Park Maintenance Organizational Support & Development Tier 3 25,848 26,501 Park Maintenance Strategic Support Tier 3 8,616 8,834 Police 'Department Training Program Tier 1 444,088 454,918 Police 'Evidence & Property Management Tier 1 207,353 214,791 Police 'Felony and Sexual Crimes Unit (MCU) Tier 1 2,372,340 2,369,808 Police 'Front Office & Records Management Tier 1 1,237,862 1,280,999 Police 'Police Patrol Services Tier 1 6,163,468 6,204,936 Police 'Traffic Enforcement & Crash Investigation Team Tier 1 821,787 823,707 Police Dispatching Services Tier 1 1,177,353 1,212,591 Police *Detention and Incarceration Services Tier 2 1,718,823 1,772,842 'Mutual Aid & Large Scale Incident (Response & Police Planning) Tier 2 96,676 86,534 Police *PD Budget/Finance Tier 2 139,589 142,397 Police *Police Management and Administration Tier 2 1,062,421 1,065,335 Police 'Recruiting & Hiring Tier 2 114,577 118,172 Police Civil Disturbance Unit Tier 2 56,711 58,795 Police Community Policing Team Tier 2 1,154,087 1,186,965 Police Contracted Off -Duty Security Tier 2 174,956 174,956 Critical Incidents and SWAT (SWAT & Police Negotiations) Tier 2 216,454 225,027 'Denotes a program mandated at the federal or state level 455 130 2019 - 2020 Biennial Budget City of Tukwila, Washington 2019 Budget 2020 Budget Department , Program Tier Allocation Allocation Police Narcotics & Street Crimes Team JAC) Tier 2 829,229 846,637 Police Police Camera Program (Vehicle & Body Wom) Tier 2 51,000 51,000 Police Professional Standards and Department Policy Tier 2 209,565 212,755 Police Public and Community Relations Tier 2 192,528 197,157 Police School Resource Officer Tier 2 287,628 298,293 Police VNET (Valley Narcotics Enforcement Team) Tier 2 132,071 136,752 Police *PD Quartermaster Tier 3 90,000 90,000 Police Animal Control Tier 3 125,000 131,250 Police Auto Theft Task Force Tier 3 141,638 145,318 Police Police K9 Program (Sniffing & Tracking) Tier 3 161,240 163,863 Police Traffic Safety Cameras Tier 3 36,169 37,118 Police PD Fitness Initiative Tier 4 13,000 13,000 Public Works *Permits Tier 1 567,132 582,705 Public Works *Emergency Preparedness and Response Tier 2 27,120 28,471 Public Works CIP/Budget Administration Tier 2 565,248 582,106 Public Works Cleaning Park Restrooms Tier 2 50,469 52,119 Public Works Code Enforcement/Police Bldg Support Tier 2 15,426 16,450 Public Works General PW Administration Tier 2 213,497 222,369 Public Works PW Contracts/Claims/ln\oices Tier 319,406 329,143 Public Works Regional Partnerships Tier 102,136 106,522 Public Works TCC Rental Setup/Breakdown/Damage Tier 2 82,009 84,977 Public Works City Clerk Record Center Tier 3 100,000 100,000 Public Works Facility Improvements Tier 3 515,310 526,479 Public Works Tukwila Works Tier 3 110,717 115,140 Public Works Utilities/Alarm/Insurance/PMs Tier 660,190 641,266 Public Works Council Chamber Setup Tier 4 27,748 28,750 Public Works Facility Cleaning/Custodians Tiier4 592,203 611,361 Recreation Administration Tier 2 470,796 458,804 Recreation Facility Rentals Tier 232,170 236,662 Recreation Organizational Support & De\elopment Tier 2 184,855 189,244 Recreation Boards & Commissions Tier 3 17,213 17,651 Recreation Events Tier 3 273,816 280,015 Recreation Green Tukwila Tier 3 33,357 34,300 Recreation Planning & Development Tier 3 148,074 151,788 Recreation Preschool Tier 3 104,444 106,547 Recreation Senior Services & Programs Tier 3 229,766 234,719 Recreation Strategic Support Tier 3 247,619 253,379 Recreation Teen Tier 217,904 221,884 Recreation Volunteer Services Tier 3 55,835 57,143 Recreation Wellness & Enrichment Tier 3 270,156 274,908 Recreation Youth Tier 427,195 429,882 Recreation Youth Free Services Tier 3 86,433 87,662 Recreation Front Desk Tier 4 217,004 220,761 Street Maintenance *Traffic Control Deices Tier 2 293,981 302,539 Street Maintenance Minor Structural Repair Tier 2 47,163 47,553 Street Maintenance Sidewalks Tier 2 46,652 48,437 Street Maintenance Snow & Ice Control Tier 2 78,787 80,885 Street Maintenance Street Cleaning Tier 2 203,505 209,060 Street Maintenance Street Lighting Tier 2 104,944 107,388 Street Maintenance Transportation Tier 2 241,954 247,946 Street Maintenance Video & Fiber Tier 2 61,184 62,072 Street Maintenance Customer SeNce and Response Tier 3 149,422 153,939 Street Maintenance Road & Street Admin Tier 3 577,893 391,082 Street Maintenance Streets Administration Tier 3 46,601 47,797 Street Maintenance Streetscapes/Median landscaping Tier 3 132,437 136,752 Street Maintenance Tukwila Int'I Blvd Bus Stop/Streetscape Tier 3 195,212 197,263 Street Maintenance Utilities/Surface Water Tier 3 1,175,000 1,216,000 *Denotes a program mandated at the federal or state level 456 131 2019 - 2020 Biennial Budget City of Tukwila, Washington Department I Program Technology & Innovation Svcs 'Emergency Application Services Technology & Innovation Svcs Network Infrastructure Services Business Analysis: Integrations Support, Technology & Innovation Svcs Professional Services, Technical Consultation Technology & Innovation Svcs Business Application Services Technology & Innovation Svcs Business System Management and Support Technology & Innovation Svcs End -User Infrastructure Service Technology & Innovation Svcs GIS Services Technology & Innovation Svcs Justice Center - Public Safety Plan Technology & Innovation Svcs Mobility Services Technology & Innovation Svcs Research & Development: New Technologies Technology & Innovation Svcs Office 365 Training Technology & Innovation Svcs Service Desk Technology & Innovation Svcs Tier1/Tier 2 Helpdesk - Vitalyst Technology & Innovation Svcs Traffic Camera Server Infrastructure Technology & Innovation Svcs Training (T1S Professional Development) Technology & Innovation Svcs Transition to Cloud Technology & Innovation Svcs Vendor Management (Gartner contract) Technology & Innovation Svcs Office Equipment/Leases "Denotes a program mandated at the federal or state level Tier 2019 Budget 2020 Budget Allocation Allocation Tier 1 75,469 79,088 Tier 1 104,256 108,453 Tier 2 72,584 75,395 Tier 2 114,576 118,520 Tier 2 178,575 180,248 Tier 223,709 227,131 Tier 2 198,422 201,402 Tier 2 133,447 138,792 Tier 2 188,424 191,239 Tier 2 126,725 131,208 Tier 3 36,509 36,982 Tier 3 129,800 133,472 Tier 3 152,523 152,523 Tier 3 65,445 68,521 Tier 3 25,212 25,212 Tier 3 126,361 131,102 Tier 3 91,043 94,423 Tier 4 856 856 457 132 J,��I1lA W4 o� sy z J Q ~ zsoaCity Councii Finance Meeting Minutes April 27,2020 - 5:30 p.m. - Electronic Meeting due to COVID-19 Emergency Councilmembers Present: Verna Seal, Chair; Kathy Hougardy, Zak Idan Staff Present: Allan Ekberg, Vicky Carlsen, David Cline, Tony Cullerton Chair Seal called the meeting to order at 5:30 p.m. I. BUSINESS AGENDA A. Financial Impacts from COVID-19 Emergency Staff and Council members continued discussion of financial impacts of COVID-19. Staff recommends delaying the Transportation Element of the Comprehensive Plan and the Walk & Roll program until 2021 and reducing funding for overlay, bridge inspections, ADA improvements, traffic signal program and wetland mitigation by a total of $865K. Committee question(s) requiring follow up • What activities are included in the Transportation Element of the Comprehensive Plan and the Walk and Roll program? What locations would be included in the seismic structure delay? Update 42nd Ave Bridge Replacement numbers • What phase/stage are the outstanding constructions projects at? Estimate how much of additional costs? Committee Recommendation Return to committee. II. MISCELLANEOUS Committee members discussed the City Council travel budget and the possibility of reducing it to help with the budget gap. Chair Seal will propose this to the full Council. The meeting adjourned at 6:23 p.m. 4�-- Committee Chair Approval Minutes byTC, LH 133 City of Tu kwi City Council Finance Committee Meeting Minutes April 28,2020 - 4:00 p.m. - Electronic Meeting due to COVID-19 Emergency Councilmembers Present: Verna Seal, Chair; Kathy Hougardy, Zak Idan Staff Present: Allan Ekberg, Vicky Carlsen, Christy O'Flaherty, David Cline, Tony Cullerton, Laurel Humphrey (others by phone-in) Chair Seal called the meeting to order at 4:00 p.m. I. BUSINESS AGENDA A. Financial Impacts from COVID-19 Emergency Staff and Council members continued discussion of financial impacts of COVID-19, including new information on required services, potential for a decision tree, professional services, and next steps. Staff believes the City needs to plan for a revenue gap of $12M in 2020 and an additional $6M in 2021. Committee question(s) requiring follow up • Provide detail on additional Phase 2 departmental reductions • In program list, identify those that have been impacted by the initial departmental reductions. Committee Recommendation Return to Committee following Council affirmation of the revenue gap. II. MISCELLANEOUS Committee members continued discussion of reducing the Council travel budget in 2020. Staff will poll Council on travel plans to help with decision making. The meeting adjourned at 5:02 p.m. 44— Committee Chair Approval Minutes by LH 134