HomeMy WebLinkAboutCity Council Committees - Operations Committee - 04/21/2015
Unless otherwise noted, the Operations Committee meets at 4 p.m. on the first and third
Tuesday of each month in Kent City Hall, Council Chambers East, 220 4th Ave S, Kent, 98032.
For additional information please contact Jennifer Hays at 253-856-5705.
Any person requiring a disability accommodation should contact the City Clerk’s
Office at 253-856-5725 in advance. For TDD relay service call Washington
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Operations Committee Agenda
Councilmembers: Bill Boyce - Dana Ralph - Les Thomas, Chair
April 21, 2015
4 p.m.
Item Description Action Speaker Time Page
1. Call to order Chair Thomas 1
2. Roll Call Chair Thomas 1
3. Changes to the Agenda Chair Thomas 1
4. Approval of Check Summary Report dated
3/16/2015 thru 3/31/2015
YES Chair Thomas 2
5. Approval of Minutes dated April 7, 2015 YES Chair Thomas 2 1
6. Bank Services Contract YES Aaron BeMiller 5 5
7. MFD Fleet Maintenance Contract Extension YES Dea Drake 5 25
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OPERATIONS COMMITTEE MINUTES
April 7, 2015
Committee Members Present: Dana Ralph and Bill Boyce; Les Thomas, Chair,
excused.
The meeting was called to order by D. Ralph at 4:00 p.m.
CHANGE TO AGENDA.
Item nine, Director’s Report, was added to the agenda.
1. APPROVAL OF THE CHECK SUMMARY REPORT DATED 3/1/2015 THROUGH
3/15/2015
B. Boyce moved to approve the check summary report dated 3/1/2015 through
3/15/2015. D. Ralph seconded the motion, which passed 2-0.
2. APPROVAL OF MINUTES DATED MARCH 17, 2015.
B. Boyce moved to approve the Operations Committee minutes dated March 17, 2015.
D. Ralph seconded the motion, which passed 2-0.
3. ORDINANCE ACKNOWLEDGING THE MERGER OF TW TELECOM INC. AND LEVEL
3 COMMUNICATIONS - RECOMMENED.
Deputy City Attorney Pat Fitzpatrick explained that on May 20, 2014, the City adopted
Ordinance No. 4112, effective May 28, 2014, granting a nonexclusive telecommunications
franchise to tw telecom of Washington LLC to operate a telecommunications system.
Shortly thereafter, on June 15, 2014, tw telecom inc. (TWTC), tw telecom LLC’s indirect
parent company, entered into an agreement and plan of merger with Level 3
Communications, Inc. (Level 3). As a result of this merger agreement, Level 3 will acquire
direct ownership of TWTC and indirect control of the tw telecom LLC.
Mr. Fitzpatrick made clear that Section 28 of the franchise requires that Level 3 and TWTC
receive the consent of the City for the indirect transfer of control to Level 3. Following
this indirect change of control the Franchisee will continue to remain bound by the terms
of the franchise and will continue to remain responsible for the obligations within the
franchise. Both Level 3 and TWTC have jointly requested that the City Council consent to
the indirect change of control. The consent of the City to the indirect change of control
shall not constitute a waiver or release of any rights the City may have under the
franchise.
B. Boyce recommends Council to adopt an Ordinance acknowledging the merger of tw
telecom, inc., and Level 3 Communications, Inc., and approving the resulting indirect
change of control of the tw telecom franchise with conditions and establishing an
effective date, subject to final approval by the city attorney. D. Ralph seconded the
motion, which passed 2-0.
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Operations Committee Minutes
April 7, 2015
Page: 2
4. FINANCIAL SUSTAINABILITY TASKFORCE GOVERNING DOCUMENT.
Chief Administrative Officer Derek Matheson disclosed during the City Council’s February
2015 strategic planning retreat discussed the establishment of a financial sustainability
task force. The purpose of the task force would be to represent, educate, and engage the
community to provide detailed recommendations to the Mayor and City Council regarding
the City’s long-term financial sustainability. Mr. Matheson pointed out that the operating
guidelines are based on the retreat summary and additional input from the mayor,
councilmembers, and Mayor’s Leadership Team.
B. Boyce recommends Council establish a Financial Sustainability Task Force. D. Ralph
seconded the motion, which passed 2-0.
5. MULTI FAMILY TAX AGREEMENT WITH TARRAGON.
Economic and Community Development (ECD) Principle Planner Matt Gilbert talked briefly
about a contract that is required by city code in order for Tarragon’s Kent Station
Apartments project to move forward with their application for Kent’s Multifamily Tax
Exemption (MFTE) program. The program started in 1998 and is an incentive program to
encourage multifamily housing to locate within the downtown area.
The Kent Station project is the first to take advantage of the MFTE since its inception. The
next step towards obtaining the exemption is City Council approval of a contract with
Tarragon. The contract is part of a verification process built into the ordinance to ensure
the applicant builds what they say will be built and to keep the building the way they say
it will be kept.
The three step certification process includes:
1. Conditional certification which is issued by the ECD director that says the project
meets the basic qualifications criteria. Tarragon’s was issued in January.
2. The contract which focuses on the project not changing and has three years to
complete the building to certify under city code.
3. The final certificate starts an eight year period during which they are except from
the building portion of property tax.
The MFTE incentive was the major factor for Tarragon going forward with the project by
bringing operating costs down over the duration of eight years. The city will forgo
approximately $25,000 a year in tax benefits on the building portion of the property tax.
There will be some impacts to school and hospitals districts, the RFA as well as anyone
who receives property tax. Tarragon’s incentive value will be about $2 million.
B. Boyce recommends giving full Council authorization for the Mayor to sign the
Multifamily Housing Property Tax Exemption Agreement with Kent Station Phase III,
L.L.C. subject to terms and conditions acceptable to the Economic and Community
Development Director and City Attorney. D. Ralph seconded the motion with a request
that it goes to full council, which passed 2-0.
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Operations Committee Minutes
April 7, 2015
Page: 3
6. ORDINANCE APPROVING AN INTERFUND LOAN FOR THE LED LIGHTING
REPLACEMENT PROJECT.
Finance Director Aaron BeMiller explained that the Public Works Committee has requested
that internal financing for the LED Lighting Replacement Project be brought before the
Operations Committee for consideration. The total project cost is estimated at $2,620,000
and is expected to save the City approximately $230,000 in annual electricity costs. Those
annualized savings will be used to pay back the long-term internal financing.
There are several different resources to pay for the project, they are:
The Washington Department of Commerce has granted $375,000.
The approximate remaining $2.2 million will be funded through an internal loan
which consists of: $445,000 coming from the general fund (the strategic
investment dollars set aside); $800,000 will come from the self-insurance fund;
and $1million from the sewage operating fund.
Upon completion of the project and expected in the current calendar year the City will
receive a rebate from Puget Sound Energy and is anticipated in the amount of $445,000.
This rebate will be directly applied to the general fund portion of the financing leaving
$1.8 million dollars financed over nine years with an annual 1.2 percent interest rate or
the local government investment pool, whichever is higher; the 1.2 percent is the higher
of the two. There are no expectations of service loan reduction or capital projects
completion slowdowns as a result of the financing.
The State’s Budgeting, Accounting and Recording System manual (BARS) is maintained by
the State’s Auditors office and prescribes accounting and recording practices for local
governments. According to BARS, the expectable procedures for making an internal loan
are: the legislative body must approve the loan by ordinance or resolution; needs to
include the lending and borrowing funds; the loan must have a scheduled plan of
repayment; the loan must have a reasonable rate of interest; reasonable assurance that
sufficient revenues exist to pay back on schedule so no permanent diversion of funds
results from failure to pay; finally, the lending funds need to be legally available for
investment.
B. Boyce recommends adoption of the Ordinance, approving an internal finance for the
LED Lighting Replacement Project in an amount not to exceed $2,245,000. D. Ralph
seconded the motion, which passed 2-0.
7. CONTINGENT LOAN AND SUPPORT AGREEMENT LANGUAGE.
Finance Director Aaron BeMiller recapped that in December 2014 the Finance Department
brought to the Operations Committee legislation that would amend the City’s current
Contingent and Support Agreement with the Public Facilities District (PFD). The
amendment would have changed the language in the agreement in how the contribution
the City makes toward PFD debt service payments is characterized. Current language
characterizes these contributions as loans and requires repayment plus interest. The
amended language would have changed the characterization of these debt service
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Operations Committee Minutes
April 7, 2015
Page: 4
contributions from the City to subsidies with no expectation of repayment. The Operations
Committee sent this issue to full Council in December and the amendment was not
approved. It was requested by a Councilmember that finance bring this issue back to
Operations in the first quarter of 2015 for further consideration.
During full Council deliberations on the amendment it appeared the significant issue
Council wrestled with was addressing what would happen if the loan were forgiven and the
PFD had balance available after the bonds were retired. The City finance and law
departments have worked with Bond Counsel and we believe we have come up with
language that addresses both the characterizations of the City contributions toward PFD
debt service and any ending monetary balances in the PFD once the bonds are retired.
However, as we continue to work through this issue other considerations have come
forward which need to be fully vetted and understood before finance is ready to seek
policy direction. These considerations include: how to handle the loan receivable the City
booked in 2014; how to address the possibility of refunding the PFD bonds in a few years;
status of the sales tax credit with a refunding, and; what is the best course of action for
the City to address these considerations with the PFD.
With a lot of these issues to be considered, the Committee would like this to go to a
Council Workshop to discuss in full. It is anticipated that more information can be brought
back by to the Operations Committee in the second quarter of 2015.
8. DIRECTOR’S REPORT
The meeting ended on a positive note with Finance Director Aaron BeMiller reporting
Standard and Poor’s (S&P) upgrading the city's general obligation bond rating from AA- to
AA with a stable outlook. In its report, S&P stated the increase reflected their view of the
city’s improved budgetary flexibility consistent with adoption of a business and occupation
(B&O) tax and an improved debt profile.
This rating adjustment is a strong validation that the city’s current budgetary and financial
practices are having a positive effect on our bottom line and strengthening our fiscal
position.
Mr. BeMiller congratulated Mayor Cooke and Council who have made paying down internal
debt and replenishing operating fund balances a priority. He continued to say while there
is still work to do on both fronts; the city is beginning to see the positive results from
those policy decisions.
The meeting was adjourned at 4:45 p.m. by D. Ralph.
___________________
Jennifer Hays
Operations Committee Secretary
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Kent Council Operations Committee Banking Services Agreement
FINANCE
Aaron BeMiller, Director
Phone: 253-856-5260
Fax: 253-856-6255
Address: 220 Fourth Avenue S.
Kent, WA. 98032-5895
DATE: April 21, 2015
TO: Kent City Council Operations Committee
FROM: Aaron BeMiller, Finance Director
SUBJECT: Banking Services Contract
MOTION: Move to recommend Council authorize the Mayor to sign the
contract with U.S. Bank for the City’s primary banking services subject to
final terms and conditions acceptable to the Finance Director and City
Attorney.
SUMMARY: The City prepared and advertised a Request for Proposals (RFP)
1/16/2015 to solicit proposals from interested banks for primary banking services.
The City received four proposals. A team made up of employees from Finance,
Information Technology and Human Resources evaluated the proposals. Three
banks were invited to be interviewed and make presentations. After careful
deliberation and examination of all factors, the team recommends that U.S. Bank
continue providing banking services for the City.
All of the banks responses we received were excellent and demonstrated the banks
ability to provide the City with high level banking services. The significant factors
that led the RFP review team to recommend US Bank include:
Significant annual banking services savings based on current service levels.
Generous annual earning credit bonus.
Generous earnings credit rate on monies left in bank account.
No transition costs associated with changing banks.
No disruption of banking services.
Continuation of established relationship.
BUDGET IMPACT: Positive effect on banking services costs, estimated annual
savings based on current service levels is approximately $60K.
BACKGROUND: The City’s contract for banking services has expired. This
agreement covers a four-year period and allows the City, at its sole option, to
exercise two three-year extensions under the same terms and conditions of the
original agreement.
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INFORMATION TECHNOLOGY DEPARTMENT
Mike Carrington, Director Information Technology
Phone: 253-856-4607
Fax: 253-856-4700
Address: 220 Fourth Avenue S.
Kent, WA. 98032-5895
DATE: April 16, 2015
TO: Operations Committee
SUBJECT: Preferred Copier Systems | Maintenance Contract for City MFD’s- Authorize
MOTION:
Recommend the Mayor sign an Extension of the Goods and Services Agreement
with Preferred Copier Systems in an amount not to exceed $100,000 through 12-
31-2015 for maintenance of the city fleet of Ricoh Multifunction Copier/Printer
Devices (MFD’s) subject to terms and conditions acceptable to the City Attorney
and Information Technology Director.
SUMMARY:
This expenditure provides ongoing maintenance for the City’s fleet of Ricoh Multifunction
Copier/Printer Devices (MFD’s) until December 31, 2015.
The city now owns the MFD’s, having formerly leased them under a contract with ABS
Ricoh. For the last 18 months the fleet has been maintained by Preferred Copier Systems
of Kent. They have and continue to provide excellent service on these machines.
The contract extension includes a small increase reflective of cost of living and the
increased cost of maintaining older machines. It is still within our budgeted amount.
This will the City additional time to consider replacement needs in conjunction with facilities
space planning. The parties agree that each will continue to perform as provided for under
the original Agreement and any prior Amendments on a month-to-month basis
commencing on June 1, 2015, with a maximum extension through December 31, 2015.
This City intends that this Agreement will automatically terminate at midnight on January
1, 2016, or upon the City providing Vendor with thirty (30) calendar days’ notice of its need
to terminate this Agreement due to a new Vendor or new Contract having been acquired for
replacement multi-functioning devices and their related service.
EXHIBITS: a) Preferred Copier Systems Draft Goods & Services Agreement Amendment
No. 2.
Budget Impact: IT Operations Budget allocations approved as a part of the 2015–2016
biennial budget process are earmarked for this expenditure.
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AMENDMENT NO. 2
NAME OF CONSULTANT OR VENDOR: Preferred Copier Systems, Inc.
CONTRACT NAME & PROJECT NUMBER: Contract #IT 14-225 Goods & Services Agreement
ORIGINAL AGREEMENT DATE: 12/3/2013
This Amendment is made between the City and the above-referenced Consultant or
Vendor and amends the original Agreement and all prior Amendments. All other provisions of
the original Agreement or prior Amendments not inconsistent with this Amendment shall remain
in full force and effect. For valuable consideration and by mutual consent of the parties,
Consultant or Vendor’s work is modified as follows:
1. Section I of the Agreement, entitled “Description of Work,” is hereby modified to
add additional work or revise existing work as follows:
The parties agree that each will continue to perform as provided for
under the original Agreement and any prior Amendments on a month-
to-month basis commencing on June 1, 2015, with a maximum
extension through December 31, 2015. The parties intend that this
Agreement will automatically terminate at midnight on January 1,
2016, or upon the City providing Vendor with thirty (30) calendar
days’ notice of its need to terminate this Agreement due to a new
Vendor or new Contract having been acquired for replacement multi-
functioning devices and their related service.
2. The contract amount and time for performance provisions of Section II “Time of
Completion,” and Section III, “Compensation,” are modified as follows:
Original Contract Sum,
including applicable WSST
$.0092 per black and white
impression, and $.07 per color
impression
Net Change by Previous Amendments
including applicable WSST
None
Current Contract Amount
including all previous amendments
$.0092 per black and white
impression, and $.07 per color
impression
Current Amendment Sum An increase to $.01 per black and
white impression, and $.075 per
color impression
Applicable WSST Tax on this
Amendment
Standard WSST per click
Revised Contract Sum $.01 per black and white
impression, and $.075 per color
impression
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Original Time for Completion
(insert date)
December 1, 2014
Revised Time for Completion under
prior Amendments
(insert date)
December 31, 2015
Add’l Days Required (±) for this
Amendment
Maximum of 214 calendar days
Revised Time for Completion
(insert date)
Not to extend beyond
December 31, 2015
The Consultant or Vendor accepts all requirements of this Amendment by signing below,
by its signature waives any protest or claim it may have regarding this Amendment, and
acknowledges and accepts that this Amendment constitutes full payment and final settlement of
all claims of any kind or nature arising from or connected with any work either covered or
affected by this Amendment, including, without limitation, claims related to contract time,
contract acceleration, onsite or home office overhead, or lost profits. This Amendment, unless
otherwise provided, does not relieve the Consultant or Vendor from strict compliance with the
guarantee and warranty provisions of the original Agreement.
All acts consistent with the authority of the Agreement, previous Amendments (if any),
and this Amendment, prior to the effective date of this Amendment, are hereby ratified and
affirmed, and the terms of the Agreement, previous Amendments (if any), and this Amendment
shall be deemed to have applied.
The parties whose names appear below swear under penalty of perjury that they are
authorized to enter into this Amendment, which is binding on the parties of this contract.
IN WITNESS, the parties below have executed this Amendment, which will
become effective on the last date written below.
CONSULTANT/VENDOR:
By:
(signature)
Print Name:
Its
(title)
DATE:
CITY OF KENT:
By:
(signature)
Print Name:
Its
(title)
DATE:
APPROVED AS TO FORM:
(applicable if Mayor’s signature required)
Kent Law Department
P:\Civil\Files\Open Files\0073-IT General-2015\Preferred Copiers MFD Maintenance Contract Extension 2015.doc
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