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HomeMy WebLinkAboutCity Council Committees - Operations - 02/13/1987 OPERATIONS COMMITTEE MINUTES February 13, 1987 COUNCIL MEMBERS PRESENT: Tom Bailey Christi Houser Steve Dowell STAFF PRESENT: Brent McFall Tony McCarthy 0 Mike Webby Don Wickstrom May Miller Charlie Lindsey Al Bond OTHERS PRESENT: Frank Howard, Draining Utility Customer Dick King, Shearson Lehman Brothers, Ioc. APPROVAL OF VOUCHERS All claims for the period ending February 13 in the amount' of $6,63,908.23 were approved for payment. WATER REFUNDING Finance Director Tony McCarthy explained to the Committee that Shearson Lehman Brothers, in conjunction with their analysis of the 1984 G.O. bond .issue refunding in the summer of 1986, also reviewed the possibility of refunding the 1984 water issue. At that time, it did not appear that the refunding would be cost effective to the City in generating enough savings to warrant the refunding effort. Since that time, interest rates have continued to decline, and Dick, Kfog of Shearson Lehman Brothers has done some additional analysis and is proppsj g to the City that we refund the 1984 water revenue issue. The savings on that refunding net of all issuance cost is between $110,000 and $120,000. The refunding could take two paths; one would be a normal refo, ag,, refunding the entire 1984 issue; the other may be to only refund the callable) artion of the 1984 issue. The difference is about $5,000 in favor of refundino'only the callable portion. Because of the possible administrative proble0s with refunding only a part of an issue, the Finance Director asked the Committee, if it would be all right for him to determine whether the City refunded the entire issue or only the callable portion. Operations Committee Minutes February 13, 1987 Page 2 At the request of Councilmember Dowell , it was noted that the additional savings would accrue to the water customer in lower debt service. Finance Director McCarthy noted that the refunding would increase the principal amount of bonds owed but this increase would be more than offset by reduced inte{ st at rates of 6 to 7 percent instead of 10.5 percent for a net present value swings of between $110,000 and $120,000. With this input, the Council recommended ,that Shearson bring a proposal to them on the March 10 or 17 meeting, with the understanding that the Finance Director would make the final recommendation as,.tt©i'whether the entire issue was refunded or only the callable portion. DRAINAGE ONLY BILLING At the request of Councilmember Christi Houser, the Finance staff reviewed options on annual billing for draining only utility customers. With the ,Ci�y getting out of the garbage business as of January 1 , 1987, a number of customers outside the City water and sewer franchise area receive a drainage only utility', bill . In certain areas of the City the monthly bill is only 94 cents per 'wnth• i An annual billing saves both the City and the customer monthly charges for postage, bill printing and bank processing costs. As a part, of thip, request, the staff looked at the possibility of providing discounts for early;:payments but, because of legal , administrative and customer service issues,, it�was decided that the discount was not appropriate. With the Committee's concurr! ce, the drainage utility customers will be sent a letter with their February billwng, presenting them with the option of making annual payments. Following the discussion of this issue, the Finance Director, pre n'ted a "Bright Idea" cup to citizen Frank Howard for his bringing this issue tq .,the attention of Councilmember Houser and the City of Kent. His idea will provi4o` vings, both for the City and the residents in that area. PRELIMINARY DECEMBER FINANCIAL REPORT Finance Director McCarthy distributed to the Committee the preltIpin;ary December Financial Report, noting that this is ,about the earliest this report has ever been 66F-lF F Operations Committee Minutes ? February 13, 1987 Page 3 presented to the Council . A copy of the summary of report is, attached. He noted that year end adjusting entries and certain entries where the City has charges between funds have not been completed yet, but the preliminary, n'mbprs do include all revenues received in December and ,expenditures made for the,ponth of December. The bottom line of the report shows that the City is ;approximately $100,000 better off at year end in the General Fund than they plonnpd to be as of the previous month. This may be eroded somewhat with the final, djiustments. In addition, the Finance Director noted that the City's real estate excise tax, which had been lagging for a number of months during the year, generated approximately $100,000 in the month of December. This brought i�t, u�p almost in line with the budgeted amount of $300,000 a year. This amount goes into the City's Capital Improvement Funds and provides a good Capital Improvement Fund balance at the end of 1986. HIRING A RELATIVE IN THE FIRE DEPARTMENT Assistant City Administrator Mike Webby distributed to the Commllttee the attached memo related to the hiring of a relative in the Fire Department.' The position to be hired will be a secretary for the bond issue projects. The position is a full time position, but has a duration of three years while the City-;;contracts for and completes the projects identified in the voted bond approval. In presenting this issue, the staff noted that the department l one through P 9 � proper procedures to advertise and interview for this position Ond1had the assistance of the Personnel Department in so doing. The una'imo4s choice of those interviewing selected the top candidate, the wife of a firefighter. , The staff noted that this position and the firefighter position will have ;no fiduciary or supervisory relationships, thus they meet the City's requirements related to hiring a relative. To not hire this person would not permit the City to hire the most qualified individual and could be classified as discrimioa, i;on. Based on this input, the Committee decided to recommend this to the fgll'I,, p4ncil and requested that the item not be presented as a consent item, 4ei ,d,iscussed under committee reports. 66F-1 F