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HomeMy WebLinkAboutCity Council Committees - Operations - 11/22/1995 w . OPE RATWNS C OMMITTE IRMI TTE S NOVEMB E R 22, 1995 COMMITTEE MEMBERS PRESENT: Jon Johnson-Committee Chair, Christi Houser, Leona Orr STAFF PRESENT: Ken Chatwin,Lois Deusen,Jim Huntington,Roger Lubovieh,Arthur Martin, Brent McFall, May Miller, Kelli O'Donnell,Jim White, Don Wickstrom MEMBERS OF THE PUBLIC: None. The meeting was called to order at 9:35 a.�n.by Chairperson Johnson. ,Annroval of Vouchers: All claims for the period ending November 15, 1995, in the amount of $1,855,300.08 were approved for payment. Safety Awards Contract Renewal: Risk Manager Ken Chatwin reviewed page 34 of the October Financial Report with the Committee. Chatwin explained that the safety awards contributed to the health of the worker's compensation fund by increasing awareness and recommended that we continue the program in 1996. He noted that costs will be reduced because videos,etc. had already been purchased at the onset of the program. After reviewing the history of the program, Ken proposed that we continue with three drawings which combine Public Works Operations and Golf Maintenance; Public Works Engineering and Parks Maintenance; and a final drawing for the remaining 400 employees. Committeemember Orr moved to recommend authorization for the renewal of the safety award contract with Victor House Publications for 1996. Houser seconded the motion which passed 3-0. Workers' Compensation Claims_Aclarninistja i11 own ract_Renewal: Ken Chatwin reported that in August the Committee had looked at competitive bids and decided not to do a request for proposal. Ken explained that the proposed contract from Scott Wetzel has some modest increases including an increase of$25 per claim for indemnity claims,an increase of$5 per claim for medical only, and an increase of$300 for the administration fee. Chatwin explained that he felt these increases were in the ball park and are reasonable fees. After reviewing the billing structure with the Committee, Ken recommended renewal of the contract with Scott Wetzel. Committeemember Houser moved to recommend authorization for the renewal of the Workers' Compensation Claims Administration Contract with Scott-Wetzel for 1996. Orr seconded the motion. Committee Chair Johnson asked if there was any discussion and called for a vote. The motion passed 3-0. 1995 Accounts Receivable Write-Off: Finance Division Director May Miller directed the Committee to the memo inched in the agenda packet to Tom Vetsch from Patty Roseto which summarizes the accounts receivable history. May noted that the write-offs have decreased every year. She explained that the,City changed to a collection agency in 1993 and then followed their example to take over collections in-house. She noted that collection efforts have resulted in the lowest write-offs she can remember with the remaining accounts being unable to locate;too small to be cost effective to pursue or businesses that have closed. During discussion of the write-offs, May noted that the Municipal Court had been included in 1993 but has been handled separately since then with their accounts being brought forward for write-offs in the spring. May explained that the graphs included,in the packet included the Court for 1992 only. Houser moved to recommend authorization to write-off$1,846.25 in uncollected accounts receivable for 1995. Orr seconded the motion which passed by a vote of 3-0. iR OPERATIO* COMMITTEE MINES, CONT. � NOVEMR aR 22;_199- 1995 Budget Adjustment Ordinance & H&CD Lune of Credit: May Miller explained that the State Auditor requires that by the end of January a budget adjustment ordinance must be passed. She noted that Finance has kept track over the year of the adjustments that have been approved. May stated that of the removal of the drainage bond sales and debt payment of ($14,397,464) resulted in a net negative effect. Of the $11,753,850 remaining, $9,080,017 has been previously approved. The majority of the remaining adjustment is for the Metro pass through. She explained that$15,000 covers the contractor for plan review wlii.ch was covered by plan check fees, and$60,000 is the reallocation of facility costs which will be adjusted in 1996. Miller listed the adjustments for the street corridor reallocation for drainage, the court expenses for probation and court clerks, Fire Relief& Pension expenses controlled by the Board, the summer trails project grant not adopted,and the acquisition of the Meldrum property as expenses covered by this adjustment. May also explained that a loan is required to cover housing and community development costs that must be expended before reimbursed by grant revenues. May recommended that the Committee move ahead with adopting this house cleaning ordinance. Committeemember Houser moved to recommend approval of the budget adjustment ordinance for 1995 totaling the gross budget adjustment of($2,643,614), and recommended approval of a line of credit in an amount not to exceed$250,000 to cover housing and community development costs at year-end until they are reimbursed by King County. Orr seconded the motion. Johnson called for a vote and the motion passed 3-0. Water Revenue Refunding Bonds: May Miller stated that at the previous Committee meeting Dick King had mentioned that we would be looking at the water bonds. May explained that the interest rates are much lower now and would save the city approximately$800,000 over the life of the bonds in today's market. In addition, May noted that the last update of the bond ordinance was passed in 1973. The revised ordinance will accurately reflect the revenue/debt ratio and the rate stabilization account. May concluded that this will also provide the necessary structure in preparation for the pipeline five project. Council Member Orr moved to recommend authorization for the City to negotiate the sale of water revenue refunding bonds with Lehman Brothers. Houser seconded the motion which passed 3-0. ,Sister GWInternational Activities Report: Governmental Relations Manager Arthur Martin stated that his report was distributed with the agenda. Arthur reported that the international trade/sister city programs are both satisfying and frustrating mostly due to the need to be flexible with foreign guests and outside entities. He explained that he would like to change many of the fumctions to take place at night to improve Council participation. He noted that the trade exchange has developed into a regional program and the delegations visited as many as 100 companies. Arthur estimated the number of people participating at approximately 1,500 including the top levels of the state and federal government representatives. In summarizing the exchange, Arthur noted that the City of Kent has gained an international reputation as being a hospitable place to visit and do business. During his report, Arthur noted that a delegation led by the Mayor of Kaibara is expected to visit in April and a delegation from Kent will go to Kaibara in May,possibly as part of the recruiting trip to Yangzhou and Shanghai. Committee Chair Johnson asked if it would be possible to receive a summary of the next legislative Page 2 7 y OPER.A.TIAS COMMITTEE MINOTE , :FONT. �W NOVEMBER 22 19A_ session in Olympia. Martin responded that he had attended Association of Washington Cities meetings to set priorities for the cities. When AWC met with leaders of the legislature,they were informed that the leadership will override Governor Lowry's veto of the tax cuts, then they will begin working on the supplemental budget and will work on a revised version of R48 aimed toward regulatory reform. After fiirther discussion of legislative issues, Houser suggeste&that a written report to Council on the top issues be prepared. Johnson suggested that updates be given to the Committee during the session and recomm'-ndations to Council on the need for contacts fo-elected officials. Martin responded that the AWC would appreciate participation of the city's elected officials. McFall suggested that this be a regular agenda item during the session. Street Utility Rel2ort• Director of Operations Brent McFall explained that this item has been thrust upon the city and he would like to update the Committee with the help of May Miller, Don Wickstrom and Roger Lubovich. He noted that they are not necessarily asking for a recommendation but would like to educate the Committee on this issue. McFall explained that the State Supreme Court recently ruled that the Seattle residential utility tax is unconstitutional and that further they had no authority to levy a property tax. It is felt that this will also apply to commercial accounts as well and necessitates the repeal of the City of Kent's Street Utility Ordinance. He noted that this does not apply to Kent yet but after discussions with the Attorney General, repeal of the ordinance is recommended. McFall stated that the Street Utility was adopted in 1992 to fund the corridor projects and that the Growth Management Act requires concurrence which applies to funding being tied to projects. McFall stated that if the city loses its concurrence we will have the choice of stopping building or lowering our levels of service which could have dramatic results. McFall stated that staff has tried to identify options to replace the revenue of$1.4 million per year. The Mayor convened a task force of community members listed in the packet. The conclusion of the task force was that the only viable option is to repeal the utility and the addition of a 1%utility tax. During discussion of the tax,McFall noted that it is expected that this would result in a neutral adjustment on the aggregate but there is no way of assuring that each house will be°equal to the past utility charge. He explained that this appears to be the most equitable way of spreading the costs to the same users. During discussion Houser stated that the legislature had said the city could enact the utility. McFall responded that the Courts have contradicted this and the city could leave it in place or repeal it and ask for a legislative remedy which may or may not happen. A discussion of the Court ruling followed. May Miller distributed a handout outlining the street utility options. Houser questioned the amounts used in the sample utility tax increase comparison. McFall noted that this is an example only of the impact of the tax. After further discussion, Houser moved to repeal the street utility tax, Orr seconded. Mayor White stated that unless the Council is willing to replace the revenue he will have to ask staff to shut down work on the corridors. The Committee discussed notification to citizens and Houser withdrew her motion. October Financial Report: May Miller reviewed the October Financial Report with the Committee. On page twelve May noted that the drop in sales tax is being reviewed, it could be one or two businesses not reporting, but Page 3 OPERATIOW COMMIT ME MIN S, CONT. - NOVEMBER 22, 199, overall the city is still 2.9% over budget. On pages 15 through 17, May reviewed the building permits with and without the Regional Justice Center. May reported that there are five new commercial pen-nits with a valuation of$5.3 million, and nine tenant improvements included in October's figures. During May's review of the Street Fund, Don Wickstrom noted that if the city does not meet the Growth Management Plan deadlines,revenue will be pulled for nonconcurrency. May concluded her report and asked if there were any questions. Leona Orr asked if the utility tax issue would go to the Public Works Committee also. McFall responded that it would. There being no further business, Committee Chair Johnson adjourned the meeting at 11:20. Page 4 � wr 'Y 0PERaT4DNs COM.MITTMOMINUTE S NOVEMBER 22, 1995 COMMITTEE MEMBERS PRESENT: Jon Johnson-Committee Chair, Christi Houser, Leona Orr STAFF PRESENT: Ken Chatwin,Lois Deusen,Jim Huntington,Roger Lubovich,Arthur Martin, Brent McFall, May Miller, Kelli O'Donnell,Jim White, Don Wickstrom MEMBERS OF THE PUBLIC: None. The meeting was called to order at 9:35 a.;n.by Chairperson Johnson. �g12roval of Vouchers: All claims for the period ending November-, 15, 1995, in the amount of $1,855,300.08 were approved for payment. Safety Awarcls Contract Renewal: Risk Manager Ken Chatwin reviewed page 34 of the October Financial Report with the Committee. Chatwin explained that the safety awards contributed to the health of the worker's compensation fund by increasing awareness and recommended that we continue the program in 1996. He noted that costs will be reduced because videos, etc. had already been purchased at the onset of the program. After reviewing the history of the program, Ken proposed that we continue with three drawings which combine Public Works Operations and Golf Maintenance; Public Works Engineering and Parks Maintenance; and a final drawing for the remaining 400 employees. Committeemember Orr moved to recommend authorization for the renewal of the safety award contract with Victor House Publications for 1996. Houser seconded the motion which passed 3-0. Workers' Commensation Claims Administi�a At o�n aCt Renewal: Ken Chatwin reported that in August the Committee had looked at competitive bids and decided not to do a request for proposal. Ken explained that the proposed contract from Scott Wetzel has some modest increases including an increase of$25 per claim for indemnity claims, an increase of$5 per claim for medical only,and an increase of$300 for the administration fee. Chatwin explained that he felt these increases were in the ball park and are reasonable fees. After reviewing the billing structure with the Committee, Ken recommended renewal of the contract with Scott Wetzel. Committeemember Houser moved to recommend authorization for the renewal of the Workers' Compensation Claims Administration Contract with Scott-Wetzel for 1996. Orr seconded the motion. Committee Chair Johnson asked if there was any discussion and ca4pd for a vote. The motion passed 3-0. .1995 Accounts Receivable Write-Off: Finance Division Director May Miller directed the Committee to the memo included in the agenda packet to Tom Vetsch from Patty Roseto which summarizes the accounts receivable history. May noted that the write-offs have decreased every year. She explained that the City changed to a collection agency in 1993 and then followed their example to take over collections in-house. She noted that collection efforts have resulted in the lowest write-offs she can remember with the remaining accounts being unable to locate;too small to be cost effective to pursue or businesses that have closed. During discussion of the write-offs, May noted that the Municipal Court had been included in 1993 but has been handled separately since then with their accounts being brought forward for write-offs in the spring. May explained that the graphs included in the packet included the Court for 1992 only. Houser moved to recommend authorization to write-off$1,846.25 in uncollected accounts receivable for 1995. Orr seconded the motion which passed by a vote of 3-0. OPERATIO* COMMITTEE MINLOES, CONT. NOVEMRE�R. 22, 199- r 1995 Budget Adjustment Ordinance F1 H&CD Line of Credit: May Miller explained that the State Auditor requires that by the end of January a budget adjustment ordinance must be passed. She noted that Finance has kept track over the year of the adjustments that have been approved. May stated that of the removal of the drainage bond sales and debt payment of ($14,397,464) resulted in a net negative effect. Of the $11,753,850 remaining, $9,080,017 has been previously approved. The majority of the remaining adjustment is for the Metro pass through. She explained that$15,000 covers the contractor for plan review which was covered by plan check fees, and$60,000 is the reallocation of facility costs which will be adjusted in 1996. Miller listed the adjustments for the street corridor reallocation for drainage, the court expenses for probation and court clerks, Fire Relief& Pension expenses controlled by the Board, the summer trails project grant not adopted,and the acquisition of the Meldrum property as expenses covered by this adjustment. May also explained that a loan is required to cover housing and community development costs that must be expended before reimbursed by grant revenues. May recommended that the Committee move ahead with adopting this house cleaning ordinance. Committeemember Houser moved to recommend approval of the budget adjustment ordinance for 1995 totaling the gross budget adjustment of($2,643,614), and recommended approval of a line of credit in an amount not to exceed$250,000 to cover housing and community development costs at year-end until they are reimbursed by King County. Orr seconded the motion. Johnson called for a vote and the motion passed 3-0. Water Revenue Refunding Bonds: May Miller stated that at the previous Committee meeting Dick King had mentioned that we would be looking at the water bonds. May explained that the interest rates are much lower now and would save the city approximately$800,000 over the life of the bonds in today's market. In addition, May noted that the last update of the bond ordinance was passed in 1973. The revised ordinance will accurately reflect the revenue/debt ratio and the rats stabilization account. May concluded that this will also provide the necessary structure in preparation for the pipeline five project. Council Member Orr moved to recommend authorization for the City to negotiate the sale of water revenue refunding bonds with Lehman Brothers. Houser seconded the motion which passed 3-0. ,Sister City/International Activities Report: Governmental Relations Manager Arthur Martin stated that his report was distributed with the agenda. Arthur reported that the international trade/sister city programs are both satisfying and frustrating mostly due to the need to be flexible with foreign guests and outside entities. He explained that he would like to change many of the functions to take place at night to improve Council participation. He noted that the trade exchange has developed into a regional program and the delegations visited as many as 100 companies. Arthur estimated the number of people participating at approximately 1,500 including the top levels of the state and federal government representatives. In summarizing the exchange, Arthur noted that the City of Kent has gained an international reputation as being a hospitable place to visit and do business. During his report, Arthur noted that a delegation led by the Mayor of Kaibara is expected to visit in April and a delegation from Kent will go to Kaibara in May,possibly as part of the recruiting trip to Yangzhou and Shanghai. Committee Chair Johnson asked if it would be possible to receive a summary of the next legislative Page 2 .J OPERATIC S COMMITTEE miN*I"ES, coNT. NOV EMBER 22 1 AAA_ session in Olympia. Martin responded that he had attended Association of Washington Cities meetings to set priorities for the cities. When AWC met with leaders of the legislature,they were informed that the leadership will override Governor Lowry's veto of the tax cuts, then they will begin working on the supplemental budget and will work on a revised version of R48 aimed toward regulatory reform. After fiu-ther discussion of legislative issues, Houser suggested that a written report to Council on the top issues be prepared. Johnson suggested that updates be given to the Committee during the session and recomm ndations to Council on the need for contacts fo-elected officials. Martin responded that the AWC would appreciate participation of the city's elected officials. McFall suggested that this be a regular agenda item during the session. Street Utility Report: Director of Operations Brent McFall explained that this item has been thrust upon the city and he would like to update the Committee with the help of May Miller, Don Wickstrom and Roger Lubovich. He noted that they are not necessarily asking for a recommendation but would like to educate the Committee on this issue. McFall explained that the State Supreme Court recently ruled that the Seattle residential utility tax is unconstitutional and that further they had no authority to levy a property tax. It is felt that this will also apply to commercial accounts as well and necessitates the repeal of the City of Kent's Street Utility Ordinance. He noted that this does not apply to Kent yet but after discussions with the Attorney General, repeal of the ordinance is recommended. McFall stated that the Street Utility was adopted in 1992 to fund the corridor projects and that the Growth Management Act requires concurrence which applies to finding being tied to projects. McFall stated that if the city loses its concurrence we will have the choice of stopping building or lowering our levels of service which could have dramatic results. McFall stated that staff has tried to identify options to replace the revenue of$1.4 million per year. The Mayor convened a task force of community members listed in the packet. The conclusion of the task force was that the only viable option is to repeal the utility and the addition of a 1%utility tax. During discussion of the tax,McFall noted that it is expected that this would result in a neutral adjustment on the aggregate but there is no way of assuring that each house will be equal to the past utility charge. He explained that this appears to be the most equitable way of spreading the costs to the same users. During discussion Houser stated that the legislature had said the city could enact the utility. McFall responded that the Courts have contradicted this and the city could leave it in place or repeal it and ask for a legislative remedy which may or may not happen, A discussion of the Court ruling followed. May Miller distributed a handout outlining the street utility options. Houser questioned the amounts used in the sample utility tax increase comparison. McFall noted that this is an example only of the impact of the tax. After further discussion, Houser moved to repeal the street utility tax, Orr seconded. Mayor White stated that unless the Council is willing to replace the revenue he will have to ask staff to shut down work on the corridors. The Committee discussed notification to citizens and Houser withdrew her motion. October Financial Report: May Miller reviewed the October Financial Report with the Committee. On page twelve May noted that the drop in sales tax is being reviewed, it could be one or two businesses not reporting, but Page 3 OPERATIO1W COMMITTEE MINS, CONT. ..� NnVFMBER22 4 9A5 overall the city is still 2.9% over budget. On pages 15 through 17, May reviewed the building permits with and without the Regional Justice Center. May reported that there are five new commercial permits with a valuation of$5.3 million, and nine tenant improvements included in October's figures. During May's review of the Street Fund, Don Wickstrom noted that if the city does not meet the Growth Management Plan deadlines,revenue will be pulled for nonconcurrency. May concluded her report and asked if there were any questions. Leona Orr asked if the utility tax issue would go to the Public Works Committee also. McFall responded that it would. There being no further business, Committee Chair Johnson adjourned the meeting at 11:20. Page 4