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HomeMy WebLinkAboutCity Council Committees - Operations Committee - 08/15/2017 (2) 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 Fourth Ave S, Kent, WA 98032. For additional information please contact Jennifer Hays at 253-856-5700, or via email at jhays@KentWA.gov. 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 Telecommunications Relay Service at 1-800-833-6388. Operations Committee Agenda Councilmembers: Bill Boyce – Les Thomas – Dana Ralph, Chair August 15, 2017 4 p.m. Item Description Action Speaker Time Page 1. Call to order Chair Ralph 1 2. Roll Call Chair Ralph 1 3. Changes to the Agenda Chair Ralph 1 4. Approval of Check Summary Report dated 7/1/17 thru 7/15/17 and 7/16/17 thru 7/31/17 YES Chair Ralph 5. Approval of Minutes dated July 18, 2017 YES Chair Ralph 2 1 6. JDE Professional Services Contracts - Recommend YES Curt Ryser 10 3 7. Panther Lake Police Substation - Second Amendment to Lease Agreement – Recommend YES Chief Thomas 10 25 8. Consolidating Budget Adjustment Ordinance for Adjustments between April 1, 2017 and June 30, 2017 - Recommend YES Barbara Lopez 5 47 9. 2017 Q2 Financial Status Report – Information Only NO Aaron BeMiller 10 53 10. June 2017 Financial Report – Information Only NO Aaron BeMiller 5 75 11. Director’s Report – Information Only NO Aaron BeMiller 5 91 This page intentionally left blank Operations Committee Minutes Approval Pending Page 1 of 2 Date: July 18, 2017 Time: 4:00 p.m. Place: Chambers East Attending: Bill Boyce, Les Thomas and Dana Ralph, Chair Agenda: 1. Call to Order. 2. Roll Call. 3. Changes to the Agenda. There were no changes to the agenda. 4. Approval of Check Summary Reports dated 6/16/2017 thru 6/30/2017. L. Thomas moved to approve the check summary report dated 6/16/2017 thru 6/30/2017. B. Boyce seconded the motion, which passed 3-0. 5. Approval of Meeting Minutes dated July 5, 2017. B. Boyce moved to approve the Operations Committee meeting minutes dated July 5, 2017. L. Thomas seconded the motion, which passed 3-0. 6. Public Facilities District (PFD) Board Reappointment - Recommend. Economic and Community Development Director Ben Wolters made a request to reappoint Mike Miller to a fourth term with the PFD board. His previous appointments include one two-year term and two four-year terms as Chair of the board. L. Thomas moved to recommend the City Council confirm the reappointment of Mike Miller to Position No. 2 of the Public Facilities District Board for a four-year term of September 1, 2017 – August 31, 2021. B. Boyce seconded the motion, which passed 3-0. 7. 2017 Property Insurance Program Review – Information Only. Risk Manager Chris Hills updated members on a seven percent decrease with all coverages remaining the same from last year’s property insurance premiums. The reason for the decrease is the added layer to the earthquake and flood insurance that Lexington used to provide for $25 million in 2016. Lexington offered a $90,000 credit if the City found coverage for $15 million; four companies were chosen and collectively are only charging $66,000 1 Operations Committee Minutes Approval Pending Page 2 of 2 creating a $24,000 savings, hence the seven percent decrease in premiums. The new premiums were acquired July 1, 2017 and will expire July 1, 2018. 8. 2nd Quarter Procurement Report. Chief Administrative Office Derek Matheson reported on the second quarter procurement report. Although there were no significant highlights discussed there was a question regarding the Van Ness Feldman LLP contract; a federal lobbying contract that was extended through December 31, 2017. 9. Director’s Report – Information Only. Finance Director Aaron BeMiller and Accounting and Reporting Manager Lavina Brennecke reported on two items:  Status of Financial Audit by State Auditor’s Office (SAO): the meeting in which the financial audit is going to be discussed is Tuesday, July 25th and will be reported on during the August 1st Operations Committee. What is known now is the City’s financial statements are clean and nearly complete. Information will be announced by the end of June regarding the single (or federal) audit and final determination on two items with the Public Facilities District financials should be known as well. The SAO is scheduled to take a break but will return in October to wrap up their accountability findings by the end of 2017.  Comprehensive Annual Financial Report 2016: the thorough and detailed data within the report is in conformance with financial standards issued by the Government Accounting Standards Board (GASB). It provides insight into the history of the City and is believed that all significant information necessary for an understanding of the affairs and financial condition of the City has been disclosed. The full report can be downloaded from the city website. 10. Adjournment. The meeting was adjourned at 4:21 p.m. by D. Ralph. J. Hays Jennifer Hays Operations Committee Secretary 2 Information Technology Mike Carrington, Director Phone: 253-856-4600 Fax: 253-856-4675 Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 DATE: August 15, 2017 TO: Operations Committee FROM: Curt Ryser, IT Systems Manager SUBJECT: JDE Professional Services Contracts - Recommend MOTION: Recommend council authorize the Mayor to sign all necessary documents with Denovo Ventures LLC that will allow the city to contract for professional services in support of JD Edwards EnterpriseOne related projects and operational support subject to approval of the final terms and conditions by the Information Technology Director and the City Attorney in an amount not to exceed $160,000 including applicable Washington State taxes. SUMMARY: The Information Technology, Finance and Human Resources Departments need to contract with Denovo Ventures to augment city staff for some project and operational support of the city’s JD Edwards EnterpriseOne system. These professional services are needed to support and upgrade of the current 9.1 system to version 9.2 as well as on-going development and day to day operational support of the JDE system. Exhibits: A) Denovo Ventures LLC Master Service Agreement Addendum B) Denovo Ventures LLC Statement of Work in support of JDE Upgrade ($36,750) C) Denovo Ventures LLC Statement of Work for ad hoc project and operational support of JDE System ($123,250) Budget Impact: Funding for these statement of works have been approved in the city’s 2016 and 2017 capital budgets to cover the costs. Background: The city has used the services of Denovo Ventures for past JDE projects which have included:  Upgrade JDE to version 8.12 in 2008  Upgrade JDE to version 9.0 in 2012  Upgrade of JDE Tools to 9.1.5 in 2015 3 As such, Denovo personnel have a high level of knowledge and understanding of our system and environment and are able to quickly come up to speed on our project and efforts as they relate to the system. 4 Master Servtce Agreement - Addendum DenoVo ADDENDUM ooT This ADDENDUM amends the Master Services Agreement, dated as of the 9th day of March, 2015, is by and between DENOVO VENTURES LLC, a Colorado limited liability company ("Denovo"), and City of Kent, a Washington Public Agency (the "Client") (each a "Party" and together the "Parties"). This Addendum shall have the meaning set forth herein. Master Services Agreement shall be amended as follows L. Revise Section 5. Term and Termination; (a) Term - The last sentence in this section shall be deleted in its entirety and replaced with the following: "Either party may terminate this MSA by providing the other Party thirty (30) days advanced written notice of termination". 2. Revise Section 8. Confidentiality; (a) General - The following will be deleted from the end of the last sentence "without the prior written consent of the other Party". 3. Revise Section 8. Confidentiality; (e) Compelled Disclosure - The following will be deleted from the end of the last sentence "provided that the receiving Party provides the disclosing Party with reasonably prior written notice of such disclosure in order to permit the disclosing Party to seek confidential treatment of such information". 4. Revise Section 9. Ownership of lntellectual Property; (¡¡l - This section shall be deleted in its entirety and replaced with the following "All rights, title and interest in Work Product shall vest in Client unless otherwise expressly provided in the applicable SOW". 5. Revise Section 9. Ownership of Intellectual Property; (ivl The following shall be deleted from the end of this section "or Work Product". 6. Revise Section 10. lndemnification; (a) General - Subsection (ii) and (iii) shall be deleted and replaced with the following: (ii) Denovo shall indemnify, defend and hold harmless the Client and its officers, directors, members, managers, employees, subcontractors and agents from and against any and all claims, damages, or losses, including legal costs and attorney fees, arising out of or in connection with Denovo's performance under the agreement, or from claims by third parties relating to bodily injury or death of any person or damage to real and/or tangible personal property directly caused by the negligence or misconduct of Denovo, its personnel or agents in connection with the performance of the Services. (¡ii) This subsection shall be deleted in its entirety. 7. Revise Section 11. Limitation of LiabiliW; (a) limitation of Liability - This section shall be deleted in its entirety and replaced with the following: Addendum 010114v1 @ Denovo - Confidential Trade Secret Page 1 of 2 5 Master servrce Agreement - Addendum "IF DENOVO SHALL BE LIABLE TO THE CLIENT FOR ANY MATTER RELATING TO OR ARISING FROM THE AGREEMENT, WHETHER BASED UPON AN ACTION OR CLAIM IN CONTRACT, WARRANTY, EQUITY, NEGLIGENCE, INTENDED CONDUCT OR OTHERWISE, THE AGGREGATE AMOUNT OF DAMAGES RECOVERABLE AGAINST DENOVO WITH RESPECT TO ANY AND ALL BREACHES, PERFORMANCE, NONPERFORMANCE, ACTS OR OMISSIONS HEREUNDER WILL NOT EXCEED THE AGGREGATE AMOUNT OF FEES ACTUALLY PAID OR PAYABLE BY THE CLIENT TO DENOVO UNDER THE SOW OR ORDER DOCUMENT PURSUANT TO WHICH DENOVO IS PERFORMING THE SERVICES OR SELLING THE PRODUCTS GIVING RISE TO SUCH BREACH. 8. Revise Section 11. Limitation of Liability; (C) Limitation Cin Act¡ons - This section shall be replaced with the following; "No action, regardless of form, arising under or relating to the Agreement,frãY be brought by either Party more than Three years after the event giving rise to the cause of action has occurred, except that an action for non-payment may be brought by a Party not later than one year following the date of the last payment due to such Party hereunder". This addendum, including the agreement of which it is a part, is a complete and exclusive statement of the agreement between the parties, which supersedes all prior or concurrent proposals and understandings, whether oral or written, and all other communications between the part¡es relating to the subject matter of this addendum. Notwithstanding anything to the contrary in the agreement, in the event of a conflict between the terms and conditions of this addendum and those contained within the agreement, the terms and conditions of this addendum shall prevail. All other terms and conditions remain unchanged and are ratified hereby. This addendum shall not be effective until executed by client and accepted and executed by an authorized representative of Denovo, LLC. lN WTTNESS WHEREOF, the parties have caused this Addendum to be executed by their duly authorized representatives effective as of the later of the date below. DENOVO VENTURES, LLC By Name Title: Date: City of Kent By: Name: Title: Date: Addendum 010114v1 @ Denovo - Confidential Trade Secret Page 2 of 2 6 JUtr Upgraoe - uratemenr oT vvorK Denoto t ! A check in this box indicates that this agreement has been changed from the original. CONSULTING STAFF AUGMENTATION SERVICES STATEMENT OF WORK This CONSUTTING STAFF AUGMENTATION SERVICES STATEMENT OF WORK ("Consulting Servìces SOW"), dated as of the l't day of August, 2017 ("Effective Date" ), is by and between DENOVO VENTURES LLC (Denovo), a Colorado limited liability company ("Denovo"l, and the City of Kent, WA, a Washington Public Agency (the " Clien('l (each a " Party'' and together lhe " Pørties"l. Pursuant to Section 3 (Scope of Seruices), in the Master Services Agreement (MSA), Denovo and Client desire to enter this Statement of Work for the performance by Denovo of certain consulting services, described herein. This Statement of Work provides details of the Services, related Products if any, Definitions, Service-specific terms, the responsibilities of the party's one-time and recurring fees, Change Control Process, and third party license agreements as applicable. Effective Date: August L, 2OL7 Delivery Period: August 1,,2Ot7 through March 31, 2018 Description of Scope of Services: Upon Client's acceptance, Denovo will provide to you consulting staff resources who at your direction, will provide you with up to one hundred seventy-six hours (176) of billable support to assist you with the following services: Delivery Seruìces: Provide up to one hundred sixty hours (160) of billable support to assist you with the following: L1' Denovo will assist Client with JD Edwards EnterpriseOne CNC consulting support on an as needed basis for the maintenance, set up, support and processing related theír JD Edwards upgrade. The CNC consultants providing support by Denovo will travel onsite or conduct the work remotely based on the specific requirements of the assignment. There are no deliverables associated with this Statement of Work and all efforts will be requested and direct by the Client. The CNC support may include: o JDE EnterpriseOne CNC support as needed and directed by the City of Kent. The following represent common tasks under CNC support for an upgrade and may be performed as part of the ad-hoc support, if requested: o Review, Planning, Audit Hardware & Software o Ensure required MTR software is installed o lnstall Enterpriseone Software o Migrate existing servers to new architecture where applicable (deployment, enterprise, database)o lnstall new servers on new architecture where applicable (web, server manager o lnstall latest tools release (current 9.2.7.41 o lnstall required ESUs and ASls for tools release o Build Packages/Deploy ESU o lntegrated2/MockGo-Live o Review Security for sign-on o Prepare production environment for go-live o Go-Live Support Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 1 of9 7 JUtr Upgraoe - ùtatemenl oï vvorK Denoto 2 (Note: This Statement of Work represents only CNC support for your EnterpriseOne 9.2.1 Tools upgrade. Functional consulting support, if required and requested can be added via a Change Order. Additionally, there ¡s no technical or functional net change training included. lf required and requested, this training can also be added via a Change Order.) Denovo will provide support to the cl¡ent on an as needed, as requested basis. Denovo will use our best efforts to respond to requests for assistance in a timely manner. Where possible, work can be completed remotely which will decrease the overall cost to the Client and allow for a quicker response from Denovo. The Client will collect the details around the Supported Requests and through a central contact who will be responsible to make requests to Denovo for assistance. The requests received centrally by Denovo will then be routed to the appropriate resource for follow up directly with the Client. The Client is encouraged to log requests whenever possible to facilitate ease of routing to the appropriate Denovo resource and the capture of as many details from the Client regarding the request as possible. The maximum amount to be paid under this statement of works for all services and chargeable expenses is 529,840.00, which amount shall not be exceeded without the prior written authorization for the City in the form of a negotiated and executed change order as provided for in Section 9 below. StaÍf Augmentdtion Coordínation Services: Denovo will provide up to sixteen hours (16) of the following services to the Client: 2.L. Serve as single point of contact for your project manager to provide a communication mechanism to address issues regarding Denovo staffing, performance, scheduling, or request for changes to the services being provided. 2.2. Assist your Project Manager with the following: 2.2.L. Coordinate on-boarding and off-boarding of Denovo Consulting staff to your project(s) 2.3. Escalate issues identífied by Denovo Consultants to your project manager. 3. Client Project Obligøtion 3.1. Maintain the properly configured hardware and operating system platform to support the services. 3.2. Obtain software licenses under separate contract for any necessary software and hardware programs before the commencement of services and installing all current software and hardware updates. 3.3. Maintain annual technical support for the software and hardware under separate contract throughout the term of the services. 3.4. Provide Denovo with full access to relevant internal functional, technical and business resources with adequate skills and knowledge to support the performance of services as detailed in the Engagement Scope Report. 3.5. Provide, for all Denovo resources performing services at your site, a safe and healthful workspace (e.g. a workspace that is free from recognized hazards that are causing, or likely to cause, death or serious physical harm, a workspace that has proper ventilation, sound levels acceptable for resources performing services in the workspace, and ergonomically correct work stations, etc.). Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 2 of 9 8 JUE Upgraoe - uratemenl oT vvorK Denoto 3.6. Provide any notices, and obtain any consent, required for Denovo to perform services. 3.7. Limit Denovo's access to any production environment or shared development environments to the extent necessary for Denovo to perform services and when access is required notify Denovo of when it will be entering production and shared development environments. 3.8. Limit Denovo's access to any protected or sensitive data and when access is required notify Denovo of when it will be accessing protected or sensitive data environments. 3.9. Be responsible for day to day management of the project work schedule and associated outputs. 3.10. Provide a single point of contact for all communication from Denovo regarding the project. 3.11. All requests for assignment of Denovo resource(s) shall be directed to the Denovo Staff Augmentation Coordinator and not the Denovo Consultant(s). 4. Project Assumptions 4.L. This is a time and materials project. Client will be billed for actual billable hours attributed to the reporting, project time and for any expenses associated with the project. 4.2. lf Client requires dedicated full time resource(s) which is defined as a minimum of 40 hours a week, the Client will be charged a minimum of 40 hours a week regardless of project stop-start periods. 4.3. lf the Client requires part time resource(s) which is defined as less than 40 hours a week to conduct "ad hoc" services, Client acknowledges that Denovo resource(s) may not be immediately available and assigned to the Client upon Client's request. Denovo will assign resource(s) as soon as possible to the Client who shall possess the requisite skill and competencies required to perform the assigned task in the Delivery Services section of this Statement of Work. 4.4. All requests for onsite services must be for a time period of no less than one (1) week (40 billable hours). 4.5. The estimated billable hours and associated fees contained herein are by definition an estimate only, and are not guaranteed to be sufficient to complete all services. 4.6. The fee estimate is an estimate only, and is based on a mutually agreed assistance model from the limited information provided by you and presumes your active participation. 4.7 . lf on-site services are req uired, they shall be cond ucted at your facilities located in Kent, WA (this Staff Augmentation work is expected to be completed remotely) or other mutually agreed upon location(s). 4.8. Services may also be conducted at Denovo's facilities or Consultant's home office unless mutually agreed otherwise by both parties. 4.9. Denovo's standard documentation format is acceptable for any documentation prepa¡ed during the performance of the services. 4.10. Payment to Denovo will be based upon the effort (hours) expended and is not tied to any subsequent task outputs or deliverables that are a result of the services. 5. Client Project Management 5.1. Client shall designate a project manager who shall be solely responsible for (i) project management associated with the services and (ii) direction of services provided to the Client by Denovo. Denovo will provide services under the direction of such project manager, who shall make all decisions in connection with anything relating to project management and direction of the services. Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 3 of 9 9 JUt Upgrade - Utatement oÌ vvorK DenoVo 6. Bílling Rates and Seruice Fees x Denovo rates listed above apply to this Statement of Work only *xshould the estimated fees be exhausted before services under this SOW are completed, Denovo will halt services until additional funds have been allocated per the Change Order Request process as defined in Section 9. lf a Change Order is not completed, Denovo will consider the services complete and final invoices will be processed. Fee Pøyment Schedule lor Consulting Services. Denovo will ínvoice the Client on a time and materials weekly basis for Consulting Services delivered, commencing one week after the Service Start Date at the rates specified in Section 6 (Billing Rates)which shall be due upon receipt. Method of Pøyment. Unless otherwise agreed to in writing by both parties, all amounts to be paid to Denovo under this Statement of Work shall be paid in U.S. dollars and may be made using electronic or automated clearing house (ACH), automatic bill pay mechanisms, or by federal wire transfer to the account or accounts designated below. BvACH: BvCheck: Pacific Mercantile Bank Denovo Ventures, LLC t125 LTTh Street 6328 Monarch Park Place, Suite 200 Routing # L22242869 Niwot, CO 80503 Account # 42696200 Beneficiary PMB Customer Account Name: Denovo Ventures Holdings, LLC 7. Seruice Fee AssumptÍons Services may be added, revised or deducted via the Change Order Request process as defined in Section 9 of this Statement of Work. It is understood that any Federal, State or Local Taxes applicable shall be added to each invoice for Services or mater¡als rendered under this Agreement. Client shall pay any such taxes unless a valid exemption certificate is furnished to Service Provider for the State of use. 8. Expenses sLls 16 51,840Project Administrator s28,oooCNC Consultant Srzs r.60 L76 s29,840Total Time and Materials Billable Rate Estimated Hours Estimated Total CostProject Role Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 4 of 9 10 JUtr Upgraoe - ulalement oT vvorK DenoVo Expenses dre not Íncluded in the rotes noted above. Expenses will be chørged to the Clîent based on the table: *Actual Cost, Per Diem, Not to Exceed, or Not Reimbursed 9. Change Order Process The Client or Denovo may request Changes by initiating the Change Order Process. To initiate the Change Order Process, the Party requesting the Change must fill out the Change Order Request form attached hereto and submit it to the appropriate project leader of the other Party. The Change Order Request must at a minimum describe the requested Change in sufficient detail for the Client and Denovo to make a reasonable assessment of the request. Upon mutual acceptance the Change Order shall be executed by duly authorized representative from both the Client and Denovo and then becomes part of the entire agreement between Denovo and the Client with respect to the subject matter hereof. Denovo will provide a copy of all mutually accepted Change Order Requests to the Client for future reference. Each Party will be responsible for all costs and expenses incurred by it in participation of the Change Control Process unless otherwise agreed in writing. The failure of either Party to insist upon strict performance of the Change Order Request process for every Change shall not constitute a waiver of its rights as set forth in the Agreement, at law or equity. 10. Other Terms and Conditions ISTGNATURE PAGE TO FOLTOWI Airfare Actual Cost Per Denovo Travel and Expense Policy Meals Per Diem Per IRS Allowable Amount; Currently $71 per day for the area. Lodging Actual Cost Per Denovo Travel and Expense Policy Auto Mileage Actual Cost Per Denovo Travel and Expense Policy Parking Actual Cost Per Denovo Travel and Expense Policy Taxis, Car Rentals, Gasoline Actual Cost Per Denovo Travel and Expense Policy Laundry (if onsite for 5+ straight days)Actual Cost Per Denovo Travel and Expense Policy Other incidental expenses Actual Cost Per Denovo Travel and Expense Policy Expenses (reimbursed according to the following schedule) Action* Detail/NotesExpense Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 5 of 9 11 JUts Upgraoe - utalement ol vvorK DenoVo lN WITNESS WHEREOF, Denovo and the Client have executed this Statement of Work as of the date set forth above. DENOVO VENTURES, LLC By: Name: Title Date CITY OF KENT, WA By: Name: Title Date Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 6 of 9 12 JUE Upgraoe - Ðtatemenl ol vvorK DenoVo CHANGE ORDER REQUEST [enter number here 001] This CHANGE ORDER REQUEST ("Chønge Ordef' or "COR'\, dated as of the [00] day of [month], [yearl ("Effective Døte"l, is by and between DENOVO VENTURES LLC, a Colorado limited liability company ("Denovo"l, and [Enter company name], a IEnter state, enter corporation or LLC] (the "Clíenf') (each a "Party''and together the " Parties"l. Pursuant to Denovo STATEMENT OF WORK (SOW), dated the [00] day of [month], lyearl, the terms and conditions of this Change Order are in accordance with the terms and conditions set forth in the referenced Statement of Work and governing Master Services Agreement and Supplemental Agreement. 7. Chønge Order Process. This Change Order Request is the method either Party may utilize to communicate and eventually effectuate changes to the Services. "Chonges" include (i) the addition, subtraction, modification or other change to any Services, (ii) a change that results in increased or reduced pricing for applicable Services, and (iii) changes to the Service Levels not agreed to as part of the SOW. The terms and conditions of the Change Order Process are more specifically described in the Statement of Work 2. ProposedChange. IPlease provide a written description of the proposed change(s] here 3. Priority ol Proposed Change. Please identify the priority level associated with the proposed change n Priority L - Urgent and Major lmpact n Priority 2 - Urgent and Minor lmpact n Priority 3 - Not Urgent and Major lmpact n Priority 4 - Not Urgent and Minor lmpact 4. Schedule. IPlease describe the proposed change(s): start date, schedule, milestones and date to complete the change] [o Start Date] [. Schedule] Ir Milestones] [. End Date] Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 7 of 9 13 JUts Upgraoe - Stalement oT vvorK DenoVo 5. Busíness Rdtionøle. The business rational and/or justification associated with this Change Order are: IPlease describe business rational here.] [. lmproved user experience due to...] [¡ Flexibility to fit Customer' dynamic business needs....] [. Expected cost savings?] 6. Servíce Level Agreement lmpoct. IPlease describe how the proposed changes will impact the service level agreements as defined in the applicable Statement of Work.l 7. Service Level, Hørdwøre, lnfrøsttucturc ønd Softwdre Environment Impoct. IPlease describe how the proposed changes will impact Service Levels, Hardware, lnfrastructure and Software Environment] 8. Personnel Impøct. IPlease descríbe how the proposed changes will impact personnel, to complete and operate the change] [First Name, Last Name, Title, lmpact] [tirst Name, Last Name, Title, lmpact] [First Name, Last Name, Title, lmpact] 9. Seruice Fees. IDenovo: Please describe the proposed servíce fees associated with this Change Order here.] 10. Trøvel and Expenses. IDenovo: Please provide a travel and expense estimate associated with this Change Order Request here.] s s s Original €onsulting Budget Change Order Amount Revised Budget Total Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Ïrade Secret Page 8 of9 14 JUts Upgraoe - ötalement oT vvorK ÐenoVo tl. Additional lnformøtion. [Please provide any additional information to assist the Client and Denovo to evaluate this Change Order Requestl L2. ChøngeOrderAcceptance. lN WITNESS WHEREOF, Denovo and the Client have executed this Change Order Request as of the date set forth above. DENOVO VENTURES, LLC By Name: Title Date: CITY OF KENT, WA By Name Title: Date Consulting Staff Augmentation Services Statement of Work V2 @ Denovo - Confidential Trade Secret Page 9 of 9 15 JUE rrolecvuperauons - ùIalemenl oÏ vvorK DenoVo n A check in this box indicates that this agreement has been changed from the original CONSULT¡NG STAFF AUGMENTATION SERVICES STATEMENT OF WORK This CONSULTING STAFF AUGMENTATION SERVICES STATEMENT OF WORK ("Consulting Seruices sOW"), dated as of the 7th day of August, 2017 ("Effective Date''\, is by and between DENOVO VENTURES LLC (Denovo), a Colorado limited liability company ("Denovo"), and City of Kent, a Washington Public Agency (the"CI¡en(' ) (each a "Porty'' and together the "Pørties"l. Pursuant to Section 3 (Scope ol Seruíces), in the Master Services Agreement (MSA), Denovo and Client desire to enter this Statement of Work for the performance by Denovo of certain consulting services, described herein. This Statement of Work provides details of the Services, related Products if any, Definitions, Service-specific terms, the responsibilities of the party's one-time and recurring fees, Change Control Process, and third party license agreements as applicable. Term of the Statement of Work: One calendar year from the Effective Date Delivery Period: August 7,2OLl through December L,201.8 Description of Scope of Services: Upon Client's acceptance, Denovo will provide to you consulting staff resources who at your direction, will provide you with up to 110 billable hours to assist you with the following services: t. Applications and or Technology Under Management: The applications listed in Appendix A shall be considered in scope for this Statement of Work. 2. Delívery Services; Provide up to 500 billable hours to assist you with the following: Z.L Provide functional knowledge of JDE EnterpriseOne Finance and Human Resources applications in support of staff training, business analysis including requirements and process design, troubleshooting, and other Systems Analyst related activities. 2.2 Provide developers to work at your direction on augmenting the existing functionality of the EnterpriseOne systems to meet the business requirements as defined by City. This will include Bl Publisher forms development, interactive application customizations, report development, work flow, EL Pages, and other EnterpriseOne development related activities. Stølf Augmentotion CoordÍnatìon Seruices: Denovo will provide up to L0 hours for the following services to the Client: 3.1. Serve as single point of contact for your project manager to provide a communication mechanism to address issues regarding Denovo staffing, performance, scheduling, or request for changes to the services being provided. 3.1.1. The City will submit support requests for work to be performed under this Statement of Work. The project coordinator will facilitate the estimating and approval of the support request. The estimate will include work to be performed, resources, and estimated hours for each resource. 3.2. Assist your Project Manager with the following: 3 Consulting Staff Augmentation Services Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 1 of9 16 JUt HrOJeCUUperaltOnS - ötarement ot vvorK Denoüo 3.2.L. Coordinate on-boarding and off-boarding of Denovo Consulting staff to your project(s) 3.2.2. Consolidate (if needed) and provide status report(s) to agree upon intervals, not more than weekly, comprised of weekly accomplishments; task to be completed the following week; issues and risks identified by the Denovo Consultant(s); and hours worked for the week. 3.3. Escalate issues identified by Denovo Consultants to your project manager. 3.4. Conduct monthly financial review with your project manager. 3.5. At the conclusion of the services, provide an Engagement Summary Report outlining the work completed, open issues or risks and recommendations. 4. Client Project Oblígøtíon 4.1. Maintaín the properly configured hardware and operating system platform to support the services. 4.2. Obtain software licenses under separate contract for any necessary software and hardware programs before the commencement of services and installing all current software and hardware updates. 4.3. Maintain annual technical support for the software and hardware under separate contract throughout the term of the services. 4.4. Provide Denovo with full access to relevant internal functional, technical and business resources with adequate skills and knowledge to support the performance of services as detailed in the Engagement Scope Report. 4.5. Provide, for all Denovo resources performing services at your site, a safe and healthful workspace (e.g. a workspace that is free from recognized hazards that are causing, or likely to cause, death or serious physical harm, a workspace that has proper ventilation, sound levels acceptable for resources performing services in the workspace, and ergonomically correct work stations, etc.). 4.6. Provide any notices, and obtain any consent, required for Denovo to perform services. 4.7. Limit Denovo's access to any production environment or shared development environments to the extent necessary for Denovo to perform services and when access is required notify Denovo of when it will be entering production and shared development environments. 4.8. Limit Denovo's access to any protected or sensitive data and when access is required notifi¡ Denovo of when it will be accessing protected or sensitive data environments. 4.9. Be responsible for day to day management of the project work schedule and associated outputs. 4.1-0. Provide a single point of contact for all communication from Denovo regarding the project. 4.11. All requests for assignment of Denovo resource(s) shall be directed to the Denovo Staff Augmentation Coordinator and not the Denovo Consultant(s). 5. Projed Assumptìons 5.1. This is a time and materials project. Client will be billed for actual billable hours attributed to the reporting, project time and for any expenses associated with the project. 5.2. lf Client requires dedicated full time resource(s) which is defined as a minimum of 40 hours a week, the Client will be charged a minimum of 40 hours a week regardless of project stop-start periods. 5.3. lf the Client requires part time resource(s) which is defined as less than 40 hours a week to conduct "ad hoc" services, Client acknowledges that Denovo resource(s) may not be immediately available and Consulting Staff Augmentation Services Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 2 of 9 17 JUE rrOJeCV(JperaUOnS - ùtatement oT vvorK DenoVo assigned to the Client upon Client's request. Denovo wíll assign resource(s) as soon as possible to the Client who shall possess the requisite skill and competencies required to perform the assigned task in the Delivery Services section of this Statement of Work. 5.4. All requests for onsite services must be for a time period of no less than one (1) week (40 billable hours). 5.5. The estimated billable hours and associated fees contained herein are by definition an est¡mate only, and are not guaranteed to be sufficient to complete all services. 5.6. The fee estimate is an estimate only, and is based on a mutually agreed assistance model from the limited information provided by you and presumes your active participation. 5.7. On-site services shall be conducted at your facilities located at Kent, WA or other mutually agreed upon location(s). 5.8. Services may also be conducted at Denovo's facilities or Consultant's home office unless mutually agreed otherwise by both parties. 5.9. Denovo's standard documentation format is acceptable for any documentation prepared during the performance of the services. 5.10. Payment to Denovo will be based upon the effort (hours) expended and is not tied to any subsequent task outputs or deliverables that are a result of the services. 6. Client Project Mønøgement 6.L. Client shall designate a project manager who shall be solely responsible for (i) project management associated with the services and (ii) direction of services provided to the Client by Denovo. Denovo will provide services under the direction of such project manager, who shall make all decisions in connection with anything relating to project management and direction of the services. 7. Billing Rates and Service Fees *Denovo rates listed above apply to this Statement of Work only **Should the estimated fees be exhausted before services under this SOW are completed, Denovo will halt services until additional funds have been allocated per the Change Order Request process as defined in Section 1"0. lf a Change Order is not completed, Denovo will consider the services complete and final invoíces will be processed. EnterpriseOne Functional Consultant Stss/hour EnterpriseOne Developer Srss/hour S105/hourProject Coordinator Totals: Time and Materials Billable Rate Estimated Billable Hours Estimated Total CostProject Role Consulting Staff Augmentation Services Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 3 of 9 18 JDE ProjecUOperations - Statement of Work DenoVo Fee Pdyment Schedule for Consulting Services. Denovo will invoice the Client on a time and materials weekly basis for Consulting Services delivered, commencing one week after the Service Start Date at the rates specified in Section 7 (Billing Rates)which shall be due upon receipt. Method of Poyment. Unless otherwise agreed to in writing by both parties, all amounts to be paid to Denovo under this Statement of Work shall be paid in U.S. dollars and may be made using electronic or automated clear¡ng house (ACH), automatic bill pay mechanisms, or by federal wire transfer to the account or accounts designated below. Denovo Ventures, LLC \ ACH/Wire: Pacific Mercantile Bank ABA/Routing: #L22242869 Acct: #42696200 Beneficiary PMB Customer Account Name: Denovo Ventures Holdings, LLC For lnternational Wire instructions, please contact: AR@Denovo-us.com 8. Seruice Fee Assumptions Services may be added, revised or deducted via the Change Order Request process as defined in Section 10 of this Statement of Work. It is understood that any Federal, State or Local Taxes applicable shall be added to each invoice for Services or materials rendered under this Agreement. Client shall pay any such taxes unless a valid exemption certificate is furnished to Service Provider for the State of use. 9. Expenses Expenses øre not included in the røtes noted above. Expenses will be charged to the Client based on the followíng table: *Actual Cost, Per Diem, Not to Exceed, or Not Reimbursed 10. Change Order Process Airfare Actual Cost Per Denovo Travel and Expense Policy Meals Per Diem Per Denovo Travel and Expense Policy Lodging Actual Cost Per Denovo Travel and Expense Policy Auto Mileage Actual Cost Per Denovo Travel and Expense Policy Parking Actual Cost Per Denovo Travel and Expense Policy Taxis, Car Rentals, Gasoline Actual Cost Per Denovo Travel and Expense Policy Laundry (if onsite for 5+ straight days)Not Reimbursed Other incidental expenses Not Reimbursed Expenses (reimbursed according to the following schedule) Expense Action* Detail/Notes Consulting Staff Augmentation Services Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 4 of 9 19 JDE ProjecUOperations - Statement of Work Denoûo The Client or Denovo may request Changes by initiating the Change Order Process. To înitiate the Change Order Process, the Party requesting the Change must fill out the Change Order Request form attached hereto and submit it to the appropriate project leader of the other Party. The Change Order Request must at a minimum describe the requested Change in sufficient detail for the Client and Denovo to make a reasonable assessment of the request. Upon mutual acceptance the Change Order shall be executed by duly authorized representative from both the Client and Denovo and then becomes part of the entire agreement between Denovo and the Client with respect to the subject matter hereof. Denovo will provide a copy of all mutually accepted Change Order Requests to the Client for future reference. Each Party will be responsible for all costs and expenses incurred by it in participation of the Change Control Process unless otherwise agreed in writing. The failure of either Party to insist upon strict performance of the Change Order Request process for every Change shall not constitute a waiver of its rights as set forth in the Agreement, at law or equity. 11. OtherTerms ønd Condítìons ISTGNATURE PAGE TO FOLLOW] Consulting Staff Augmentation Services Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 5 of 9 20 JDE ProjecUOperations - Statement of Work DenoVo lN WITNESS WHEREOF, Denovo and the Client have executed this Statement of Work as of the date set forth above. DENOVO VENTURES, LLC By: Name Title Date CITY OF KENT, WASHINGTON By: Name: Title D Consulting Staff Augmentation Services Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 6 of 9 21 DenoVo Appendix A - Apolications Under Manaqement JDE E1 Application Modules ln Scope (Yes or Nol FOUNDATION - OVR, Watchlists, Query, Café 1, E1 Pages Yes FOUNTATION. UPK No DIS - Plant & Equipment Maintenance No DIS - Advanced Pricing No DIS - Advanced Stock Valuation No DIS - Agreement Management No DIS - Configurator No DIS - CRM for Sales (Sales Force Automation)No DIS - CRM for Support No DIS - Customer Relationship Management (Sales)No DIS - Customer Relationship Management (Support)No DIS - Customer Self Service No DIS - Demand Scheduling No Dls - EDI (832,84O,843,844,845,849,850, 852, 855, 856, 860, 861, 862, 865)No DIS - lnventory Yes DIS - Mobile Apps No DIS - Procurement Yes DIS - Requisition Self Service Yes DIS - Sales Order Mngmt No DIS - Service Mngmt (Service, Warranty, Case Mngmt)No DIS - Supplier Self Service No DIS - Transportation Management No DIS - Warehouse Management No FIN - Accounts Payable Yes FIN - Accounts Receivable Yes FIN - Address Book Yes FIN - Adv Cost Accounting (Profit Mngmt)No FIN - Change Management No FIN - Contract Billing No FIN - EDI ( 810-lnvoice, 820-Pymt, 821-Fin Stmt, 823-Lockbox)No FIN - Financial Management Reports Yes FIN - Fixed Assets Yes FIN - General Ledger Yes FIN - Grant Management No FIN - Homebuilder No FIN - Job Cost Yes FIN - Localizations - Asia Pacific No FIN - Localizations - EMEA No FIN - Localizations - LACA No FIN - Mobile Apps No FIN - Real Estate (Property Mngmt)No JDE cUOperations - Statement of Work Consulting Staff Augmentation Serv¡ces Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 7 of 9 22 DenoVo JDE E1 Application Modules ln Scope (Yes or No) FIN - Service Billing No HRM - Payroll (Mobile Apps)No HRM - Applicant Tracking No HRM - Certifications/skills No HRM-Health&Safety No HRM - Human Capital Management Self Service Yes HRM - Human Resources Yes HRM - Payroll (US, CAD, Australia/NZ, )Yes HRM - Time and Labor, Expense Mngmt, Benefits Yes MFG - Advanced Supply Chain Planning No MFG - Apparel Management No MFG - Blend Management No MFG - CRP No MFG - Demand Flow Manufacturing No MFG - DRP/MRP/MPS No MFG - EDI (830-Forecast)No MFG - Engineer to Order & Project Manufacturing No MFG - Engineering Change Mngmt No MFG - Forecasting No MFG - Grower Management No MFG - Mfg. Accounting No MFG - Plant Manager Dashboard No MFG - Product Costing No MFG - Product Data Mngmt No MFG - Quality No MFG - Shop Floor No EquiplQ - Equipment Rental Solution No EquiplQ - Equipment Service No EquiplQ - Equipment Sales No EquiplQ - Parts Counter Sales Solution No JDE El - Technology Related (CNC)ln Scope (Yes or No) or value Software Version/ESU Level (if known)Value Tools Release Value Server OS Version Value Database Value Additional Servers (ie: AlS, BlP, BSSV, UPK)Value(s) Remote Access (software/tool)Value JDE rations - Statement of Work Consulting Staff Augmentation Services Statement of Work V2.1 O Denovo - Confidential Trade Secret Page 8 of 9 23 DenoVo Bolt on (3'd party) products (ie: Security: QSoft, Allout WM: DSl, RF Smart, Forms: Bottomline, Optio) Value(s) Environment Definition Value(s) Server infrastructure diagram?Yes/No Development Workstations available Yes/No Webserver Software (Weblogic vs Websphere)Value Multi-language Yes/No JDE ProjecVOperations - Statement of Work Consulting Staff Augmentation Services Statement of Work V2.1 @ Denovo - Confidential Trade Secret Page 9 of 9 24 POLICE DEPARTMENT Ken Thomas, Chief of Police Phone: 253-856-5800 Fax: 253-856-6802 Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 DATE: August 15, 2017 TO: Operations Committee FROM: Chief Thomas SUBJECT: Panther Lake Police Substation - Second Amendment to Lease Agreement – Recommend MOTION: Authorize the Mayor to sign the Second Amendment to Lease Agreement with PWRP – Kent LLC for a police substation in the Panther Lake Shopping Center, and ratify all acts consistent with the terms of the Second Amendment that occurred after the term of the current lease and prior to the parties’ execution of the Second Amendment. SUMMARY: This is a second renewal of a lease initiated on May 18, 2011. The purpose of this lease is to provide a police substation for the Kent Police Department in the Panther Lake Shopping Center, located at 10842 SE 208th in the city of Kent. If approved, this second renewal will extend the City’s lease for an additional three years—through May 31, 2020. Under the current lease, the City pays $800.80 per month. The City will continue to pay a monthly rent of $800.80. Each year thereafter, rent will increase on the June 1st anniversary date. As such, the monthly rent due under the term of this second renewal will be: Months Monthly Payments 06/01/18 – 05/31/19 $ 824.83 06/01/17 – 05/31/20 $ 849.57 Because this second renewal commenced on May 31, 2017, a date prior to formal Council approval, ratification language has been added to the motion that will ratify all acts taken after the expiration of the lease’s current term on May 31, 2017, and prior to the City’s execution of the second renewal. EXHIBITS: Second Amendment to Lease Agreement; First Amendment to Lease Agreement dated 6/1/14; Lease Agreement dated 5/18/11. Budget Impact: Budgeted for 2017 25 This page intentionally left blank 26 1 SECOND AMENDMENT TO SHOPPING CENTER LICENSE AGREEMENT THIS SECOND AMENDMENT TO SHOPPING CENTER LICENSE AGREEMENT (this "Second Amendment") is entered into as of the ___ day of July, 2017 (the “Effective Date”), by and between PWRP – KENT LLC, a Delaware limited liability company, successor-in-interest to PK I Panther Lake LLC ("Licensor") and KENT POLICE DEPARTMENT ("Licensee"). WITNESSETH: WHEREAS, Licensor and Licensee have entered into a License Agreement dated as of March 18, 2011, as amended by First Amendment to Shopping Center License Agreement dated as March 18, 2014 (as hereinafter as amended and modified, collectively referred to as the "License Agreement "), whereby Licensor licensed to Licensee those certain Licensed Premises known as space A2 located in the Shopping Center commonly known as Panther Lake located in Kent, Washington (“Shopping Center”) as more particularly described in the License Agreement; and WHEREAS, The License Agreement expired on May 31, 2017 and Licensee has been holding over with Licensor’s consent; and WHEREAS, Licensor and Licensee have agreed to extend the term of the License Agreement for an additional three (3) years from June 1, 2017 to and including May 31, 2020 on the terms set forth below. NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that, the License Agreement is hereby modified as follows: 1. DEFINED TERMS. Unless specifically defined herein, all capitalized terms used in this Amendment shall have the same meaning as the capitalized terms in the License Agreement. 2. EXTENSION OF THE TERM. Effective as of June 1, 2017 (the “Renewal Date”), the License Term of the License Agreement is hereby extended for an additional period of three (3) years from June 1, 2017 to and including May 31, 2020 (the “Second Expiration Date”); the period from the Renewal Date through the Second Expiration Date, the “Renewal Term”), unless the License Agreement is sooner terminated or renewed pursuant to the provisions thereof, with such extension to be upon all of the terms, covenants and conditions contained in the License Agreement, except as otherwise set forth in this Second Amendment. Licensee acknowledges that it is currently in possession of the License Premises and that the same has been delivered to Licensee in their current condition, AS-IS, WHERE-IS AND WITH ALL FAULTS, upon the Renewal Date. 3. BASE RENT. During the Renewal Term, Base Rent is as follows: LEASE YEAR ANNUAL BASE RENT MONTHLY INSTALLMENT 6/1/2017-5/31/2018 $9,609.63 $800.80 27 2 6/1/2018-5/31/2019 $9,897.92 $824.83 6/1/2019-5/31/2020 $10,194.86 $849.57 4. RELOCATION. Notwithstanding the provisions of the License Agreement, Licensor, in its sole and absolute discretion, shall have the right, after expiration of the first eighteen (18) months of the Renewal Term, to relocate Licensee from the Licensed Premises to other premises in the Shopping Center (“New Premises”). Licensor shall give Licensee at least forty-five (45) days’ notice of the approximate date Licensee is to move to the New Premises. Licensor shall deliver the New Premises in the same condition as the Licensed Premises exists as of the date Licensor give Licensee notice that Licensee will be required to relocate. The New Premises will have at least the same amount of square footage as the Licensed Premises. Licensor shall pay for moving the Licensee’s inventory, fixture, equipment and storefront sign, but not the security cameras, to the New Premises. Licensee will cooperate with Licensor. Licensee will move its business operations to the New Premises within forty-eight (48) hours after Licensor notified Licensee that it has substantially completed its preparation of the New Premises. Thereafter the New Premises will be deemed to be the Licensed Premises for all purposes of the License Agreement and all Licensee’s obligations under the License Agreement will continue to apply such Licensed Premises, without interruption. The foregoing notwithstanding, if Licensee notifies Licensor, within fifteen (15) days after receipt of Licensor’s relocation notice, that Licensee elects not to move, Licensee shall have the right to remain in the existing Licensed Premises but the Base Rent shall be increased, as of the first of the month following the date Landlord receives Licensee’s notice that it has elected to remain in the Licensed Premises, to the fair market rent for the Licensed Premises, as reasonably determined by Licensor, based on the current rents in the Shopping Center. Licensor shall notify Licensee of such new Base Rent within five (5) business days after receipt of Licensee’s notice that it has elected to remain in the Licensed Premises. 5. SECURITY CAMERAS. Licensee has requested permission, at Licensee’s sole cost and expense, to add security cameras around the Licensed Premises. Licensor has reviewed Licensee’s plans for the installation of such cameras and has approved Licensee’s plans. Upon the expiration or early termination of the License Agreement or the relocation of the Licensed Premises, Licensee shall remove such security cameras and repair all damage to the Licensed Premises. 6. EFFECT. Except as expressly modified by this Second Amendment, the License Agreement shall remain unchanged and in full force and effect. 7. NO MODIFICATION OR WAIVER. Except as otherwise expressly set forth herein, nothing in this Second Amendment shall be deemed to waive or modify any of the provisions of the License Agreement. 8. NO OFFER. Licensor and Licensee hereby agree that Licensee’s submission of this Second Amendment to Licensee shall not constitute an offer to amend the License Agreement. This Second Amendment shall be effective only, and is expressly conditioned, upon the execution of this Second Amendment by Licensor and Licensee. 8. BROKERS. Licensor and Licensee each represent to the other that it has not dealt with any broker in connection with this Second Amendment. Licensor and Licensee shall each indemnify, defend and hold the other harmless from and against, all damages (including reasonable attorneys’ fees and costs) resulting from any claims that may be asserted against Licensor and 28 3 Licensee by any broker, finder, or other person with whom the indemnifying party has or purportedly has dealt. 9. COUNTERPARTS. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Second Amendment. 10. SUCCESSORS. The provisions of this Second Amendment shall bind and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns. 11. LICENSEE’S REPRESENTATIONS. Licensee represents that it holds the entire licensee interest in the License Agreement and that it has not made any assignment, sublease, transfer, conveyance or other disposition of the Lease or any interest in the License Agreement. 12. ATTORNEYS’ FEES. In the event that at any time after the date hereof either Licensor and Licensee shall institute any action or proceeding against the other relating to this Second Amendment, then and in that event, the party not prevailing in such action or proceeding shall reimburse the prevailing party for the reasonable expenses of attorneys’ fees and all costs and disbursements incurred therein by the prevailing party. IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be executed as of the date first written above. LICENSOR: LICENSEE: PWRP – KENT LLC, KENT POLICE DEPATMENT a Delaware limited liability company By: _____________________ By: _____________________ Name: Jay Kerner Name: _____________________ Title: Co-President Title: _____________________ 29 4 STATE OF WASHINGTON ) ) SS. COUNTY OF ____________ ) I CERTIFY THAT I KNOW OR HAVE SATISFACTORY EVIDENCE THAT THE PERSON APPEARING BEFORE ME AND MAKING THIS ACKNOWLEDGMENT IS THE PERSON WHOSE TRUE SIGNATURE APPEARS ON THIS DOCUMENT. ON THIS _____ DAY OF _________________, 20__, BEFORE ME PERSONALLY APPEARED ___________________, TO ME KNOWN TO BE THE ______________________ OF _____________________, THE CORPORATION THAT EXECUTED THE WITHIN AND FOREGOING INSTRUMENT, AND ACKNOWLEDGED THE SAID INSTRUMENT TO BE THE FREE AND VOLUNTARY ACT AND DEED OF SAID CORPORATION, FOR THE USES AND PURPOSES THEREIN MENTIONED, AND ON OATH STATED THAT HE/SHE WAS AUTHORIZED TO EXECUTE SAID INSTRUMENT. WITNESS MY HAND AND OFFICIAL SEAL HERETO AFFIXED THE DAY AND YEAR FIRST ABOVE WRITTEN. NOTARY PUBLIC IN AND FOR THE STATE OF WASHINGTON, RESIDING AT MY COMMISSION EXPIRES: [TYPE OR PRINT NOTARY NAME] (USE THIS SPACE FOR NOTARIAL SEAL STAMP) 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 This page intentionally left blank 46 FINANCE DEPARTMENT Aaron BeMiller, Director Phone: 253-856-5260 Fax: 253-856-6255 Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 DATE: August 15, 2017 TO: Operations Committee FROM: Barbara Lopez, Deputy Director SUBJECT: Consolidating Budget Adjustment Ordinance for Adjustments between April 1, 2017 and June 30, 2017 - Recommend MOTION: Recommend Council approve the consolidating budget adjustment ordinance for adjustments made between April 1, 2017 and June 30, 2017, reflecting an overall budget increase of $15,418,350. SUMMARY: Authorization is requested to approve the technical gross budget adjustment ordinance reflecting an overall budget increase of $15,418,350. Adjustments totaling $11,330,840 have previously been approved by Council and are summarized as follows. $9,475,090 in grants for:  $4,544,020 Transportation Improvement Board (TIB) grant for 224th-228th Corridor between East Valley Highway and 88th.  $4,350,000 FMSIB grant for the BNSF Grade Separation project.  $250,000 TIB grant for the complete streets project on Meeker.  $250,080 in WRR and LHWMP recycling grants.  $58,990 grant for the new DUI Court.  $22,000 WATPA grant for police equipment. $1,855,750 is a technical accounting change to move B&O funds between projects and re-classify those funds as capital or non-capital for street use. Adjustments totaling $4,087,510 have not been previously approved by Council. Highlights include:  $2,800,000 to budget additional B&O revenue collections expected of $1.4 million. $1.4 million records transfer of the funding to the project and an additional $1.4 million establishes the project budget to complete the work. 47  $810,700 in liability insurance claims paid over our deductible that were subsequently reimbursed by our insurance carrier.  $275,360 to budget salary increases for AFSCME, Teamsters and non- represented employees.  $201,450 to budget supplies and services for two new divisions in IT, Project Management Office and SI Development. BUDGET IMPACT: These expenditures are funded by grants, existing fund balance, or other new revenues. 48 1 2017-2018 Budget Adjustment Second Quarter 2017 ORDINANCE NO. AN ORDINANCE of the City Council of the City of Kent, Washington, approving the consolidating budget adjustments made between April 1, 2017 and June 30, 2017, reflecting an overall budget increase of $15,418,350. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: ORDINANCE SECTION 1. – Budget Adjustments. The 2017-2018 biennial budget is amended to include budget fund adjustments for the second quarter of 2017 from April 1 to June 30, 2017, as summarized and set forth in Exhibit “A,” which is attached and incorporated into this ordinance. Except as amended by this ordinance, all terms and provisions of the 2017-2018 biennial budget Ordinance No. 4230, as amended by Ordinance No. 4245 shall remain unchanged. SECTION 2. – Severability. If any one or more section, subsection, or sentence of this ordinance is held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this ordinance and the same shall remain in full force and effect. 49 2 2017-2018 Budget Adjustment Second Quarter 2017 SECTION 3. – Corrections by City Clerk or Code Reviser. Upon approval of the city attorney, the city clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; ordinance, section, or subsection numbering; or references to other local, state, or federal laws, codes, rules, or regulations. SECTION 4. – Effective Date. This ordinance shall take effect and be in force five days after publication, as provided by law. SUZETTE COOKE, MAYOR ATTEST: KIMBERLEY A. KOMOTO, CITY CLERK APPROVED AS TO FORM: TOM BRUBAKER, CITY ATTORNEY PASSED: day of , 2017. APPROVED: day of , 2017. PUBLISHED: day of , 2017. I hereby certify that this is a true copy of Ordinance No. passed by the City Council of the City of Kent, Washington, and approved by the Mayor of the City of Kent as hereon indicated. (SEAL) KIMBERLEY A. KOMOTO, CITY CLERK P:\Civil\Ordinance\Budget Adjustment Ordinance 2nd Qtr 2017.docx 50 Fund Title Previously Approved Approval Requested Total Adjustment Ordinance 100 General Fund - 1,400,000 1,400,000 110 Street Fund 1,516,140 74,380 1,590,520 160 Criminal Justice Fund 80,990 16,100 97,090 310 Street Capital Projects Fund 9,483,630 1,400,000 10,883,630 410 Water Utility Fund - 34,690 34,690 440 Drainage / Sewer Utility Fund - 51,600 51,600 470 Solid Waste Utility Fund 250,080 2,340 252,420 480 Golf Fund - 12,060 12,060 510 Fleet Services Fund - 12,330 12,330 520 Central Services Fund - 237,910 237,910 540 Facilities Management fund - 33,060 33,060 560 Benefit and Insurance Funds - 813,040 813,040 Total 11,330,840 4,087,510 15,418,350 Exhibit A City of Kent Budget Adjustment Ordinance Adjustments April 1, 2017 to June 30, 2017 51 Approval Date or Other Fund Previously Approved by Council Not Previously Approved by Council Total Adjustment Ordinance Transfer of Increased B&O to Project (S. 212th Way Overlay)1,100,000 1,100,000 Transfer of Increased B&O to Project (S 212th St & 72nd Ave Concrete)300,000 300,000 Total General Fund - 1,400,000 1,400,000 110 - Street Fund AFSCME, Non-Rep, & Teamster Salary Increases 74,380 74,380 Move B&O Funds to New Accounts Fund 310 1,516,140 1,516,140 Total Street Fund 1,516,140 74,380 1,590,520 160 - Criminal Justice Fund New DUI Court Grant 12/13/2016 58,990 58,990 Police WATPA Equip Grant KCC 3.70 22,000 22,000 AFSCME, Non-Rep, & Teamster Salary Increases 16,100 16,100 Total Criminal Justice Fund 80,990 16,100 97,090 310 - Street Capital Projects FMSIB Grant - BNSF Grade Separation 3/21/2017 4,350,000 4,350,000 TIB St. Grant - Complete Streets-Meeker 2/21/2017 250,000 250,000 TIB Grant - LID 363-224th-228th (EVH-88th)4/16/2013 4,544,020 4,544,020 Transfer of Increased B&O for Project (S. 212th Way Overlay)1,100,000 1,100,000 Transfer of Increased B&O for Project (S 212th St & 72nd Ave Concrete)300,000 300,000 Move B&O Funds to New Accounts 339,610 339,610 Total Street Capital Projects Fund 9,483,630 1,400,000 10,883,630 410 - Water Utility Fund AFSCME, Non-Rep, & Teamster Salary Increases 34,690 34,690 Total Water Utility Fund - 34,690 34,690 440 - Drainage/Sewer Utility Fund AFSCME, Non-Rep, & Teamster Salary Increases 51,600 51,600 Total Drainage/Sewer Utility Fund - 51,600 51,600 470 - Solid Waste Operating Fund Establish WRR Recycle Grant 1/17/2017 177,040 177,040 Establish LHWMP Recycle Grant 1/17/2017 73,040 73,040 AFSCME, Non-Rep, & Teamster Salary Increases 2,340 2,340 Total Solid Waste Operating Fund 250,080 2,340 252,420 480 - Golf Operating Fund AFSCME, Non-Rep, & Teamster Salary Increases 12,060 12,060 Total Golf Operating Fund - 12,060 12,060 510 - Fleet Services Fund AFSCME, Non-Rep, & Teamster Salary Increases 12,330 12,330 Total Fleet Services Fund - 12,330 12,330 520 - Central Services Fund Establish Budgets for New IT Division 201,450 201,450 AFSCME, Non-Rep, & Teamster Salary Increases 36,460 36,460 Total Central Services Fund - 237,910 237,910 540 - Facilities Management Fund AFSCME, Non-Rep, & Teamster Salary Increases 33,060 33,060 Total Facilities Management Fund - 33,060 33,060 560 - Benefit & Insurance Funds Claims Paid - Reimbursed 810,700 810,700 AFSCME, Non-Rep, & Teamster Salary Increases 2,340 2,340 Total Benefit & Insurance Funds - 813,040 813,040 Grand Total All Funds 11,330,840 4,087,510 15,418,350 Budget Adjustment Detail for Budget Changes April 1, 2017 to June 30, 2017 001 - General Fund 52 FINANCE DEPARTMENT Aaron BeMiller, Director Phone: 253-856-5260 Fax: 253-856-6255 Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 DATE: August 15, 2017 TO: Operations Committee FROM: Aaron BeMiller, Director SUBJECT: 2017 Q2 Financial Status Report – Information Only MOTION: Information Only SUMMARY: The Finance Director will report on the 2017 Q2 Financial Status Report. BUDGET IMPACT: BACKGROUND: 53 This page intentionally left blank 54 Operations Committee August 15, 2017 55 Kathleen Etheredge, Senior Financial Analyst Michelle Ferguson, Senior Financial Analyst Shane Sorenson, Senior Financial Analyst Barbara Lopez, Deputy Finance Director Operations Committee 08/15/2017 2 56 3 Operations Committee 08/15/2017 57 Total City Debt Service by Debt Type Operations Committee 08/15/2017 0 2 4 6 8 10 12 14 16 18 20 $ in Millions LTGO Revenue Internal PW Trust Fund Long-term Notes Other 4 58 Capital Resources Fund General Debt - 1 2 3 4 5 6 7 8 9 10 $ in Millions PFD Land/Public Market Dev Authority Court/East Hill Capital Projects Park Improvements PFD Revenue Bond Internal Aquatics Center 2014 Refunding Capital Projects 5 Operations Committee 08/15/2017 59 General Fund 6-Year Forecast Includes: An allowance for 3 new Police positions and 1 other GF position each year beginning in 2019 Average cost per position $115k, total cost of $460k annually Sales Tax shift from Capital Resources Fund beginning in 2019 Reduced Street Fund Subsidy from General Fund to $1.0m per year beginning in 2019 Continuance of 2% internal utility tax in 2021 ≈ $1.5m reallocated to general operations Use of banked property tax capacity $2.37m in 2018, $1.72m in 2020 $1.90m in 2021 Additional $500k in revenues for marijuana and card rooms beginning in 2019 Assumes constant revenue growth 6 Operations Committee 08/15/2017 60 General Fund 6-Year Forecast Operations Committee 08/15/2017 Adopted Adjusted Six-Year Forecast (amounts in thousands) 2017 2018 2018 2019 2020 2021 2022 2023 2024 Beginning Fund Balance 19,705 17,708 19,255 19,256 21,373 21,373 21,079 19,119 15,438 Revenues 92,396 94,566 96,943 102,196 102,225 103,987 105,202 106,380 107,574 Expenditures 94,393 94,562 96,943 100,078 102,225 104,281 107,162 110,062 113,123 Change in Fund Balance (1,997) 4 0 2,117 (0) (294) (1,960) (3,682) (5,549) Ending Fund Balance 17,708 17,712 19,256 21,373 21,373 21,079 19,119 15,438 9,889 7 61 General Fund 6-Year Forecast (includes loss of SST) Includes: All of the previous factors Loss of SST Mitigation $2.5m loss in 2019 $5.0m loss each year beginning 2020 Main Street Fairness Act: Internet Sales Tax * 2019: $573,000 2020: $714,000 2021: $774,000 2022: $840,000 2023: $912,000 According to: https://public.tableau.com/profile/publish/remotesalestax/DesktopDashboard#!/publish-confirm Operations Committee 08/15/2017 Adopted Adjusted Six-Year Forecast (amounts in thousands) 2017 2018 2018 2019 2020 2021 2022 2023 2024 Beginning Fund Balance 19,705 17,708 19,255 19,256 19,160 14,581 9,758 3,325 (4,770) Revenues 92,396 94,566 96,943 99,982 97,647 99,458 100,728 101,967 103,237 Expenditures 94,393 94,562 96,943 100,078 102,225 104,281 107,162 110,062 113,123 Change in Fund Balance (1,997) 4 0 (96) (4,578) (4,823) (6,434) (8,095) (9,886) Ending Fund Balance 17,708 17,712 19,256 19,160 14,581 9,758 3,325 (4,770) (14,655) 8 62 Cash and Investments by Month (City-wide) Operations Committee 08/15/2017 9 - 20 40 60 80 100 120 140 160 180 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $ in Millions 2015 2016 2017 63 Cash and Investments by Type (City-wide) Operations Committee 08/15/2017 10 - 20 40 60 80 100 120 140 160 180 2nd Qtr 2016 3rd Qtr 2016 4th Qtr 2016 1st Qtr 2017 2nd Qtr 2017 $ in Millions Total C&I LGIP Other Investments Cash 64 General Fund Cash Flow - 4 8 12 16 20 24 28 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $ in Millions 2014 2015 2016 2017 Operations Committee 08/15/2017 11 65 City-wide Long-Term Investments - 10 20 30 40 50 60 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $ in Millions 2014 2015 2016 2017 Operations Committee 08/15/2017 12 66 Operations Committee 08/15/2017 - 10 20 30 40 50 60 70 80 90 100 2012 2013 2014 2015 2016 2017 51% 51% 51% 48% 47% 52% Full-Year Actuals (2012-2016); Budget (2017)Q2 YTD $ in Millions General Fund Revenue Collections 13 67 Operations Committee 08/15/2017 0% 10% 20% 30% 40% 50% 60% 70% 2016 (% of Full-Year Actuals)2017 (% of Budget) General Fund Revenues by Classification 14 68 Operations Committee 08/15/2017 0% 10% 20% 30% 40% 50% 60% 2016 (% of Full-Year Actuals) 2017 (% of Budget) General Fund Spending by Classification 15 69 Operations Committee 08/15/2017 0% 10% 20% 30% 40% 50% 60% 70% 2016 (% of Full-Year Actuals)2017 (% of Budget) General Fund Spending by Department 16 70 Operations Committee 08/15/2017 0% 10% 20% 30% 40% 50% 60% 70% 2016 (% of Full-Year Actuals)2017 (% of Budget) City-wide Spending – All Other Funds 17 71 Operations Committee 08/15/2017 - 5 10 15 20 25 30 35 2013 2014 2015 2016 2017 43% 38% 44% 48% 61% Total Revenue Collections Full-Year Actuals (2012-2016); Budget (2017) Q2 YTD $ in Millions 0% 10% 20% 30% 40% 50% 60% 70% Collections by Fund 2016 (% of Full-Year Actuals) 2017 (% of Budget) Special Revenue Funds 18 72 Operations Committee 08/15/2017 - 10 20 30 40 50 60 70 80 90 2013 2014 2015 2016 2017 38% 49% 46% 45% 50% Total Revenue Collections Full-Year Actuals (2012-2016); Budget (2017) Q2 YTD 0% 10% 20% 30% 40% 50% 60% Collections by Fund 2016 (% of Full-Year Actuals) 2017 (% of Budget) $ in Millions Enterprise Funds 19 73 Questions? 74 FINANCE DEPARTMENT Aaron BeMiller, Director Phone: 253-856-5260 Fax: 253-856-6255 Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 DATE: August 15, 2017 TO: Operations Committee FROM: Aaron BeMiller, Director SUBJECT: June 2017 Financial Report – Information Only MOTION: Information Only SUMMARY: The Finance Director will report out the June 2017 financial report. BUDGET IMPACT: BACKGROUND: 75 This page intentionally left blank 76 2017 Adj Budget 2017 YTD 2017 Est Actual Variance Favorable (Unfavorable) %Variance Favorable (Unfavorable) Revenues 93,795,960 47,863,460 95,627,860 1,831,900 2.0% Expenditures 96,229,260 39,599,008 95,586,250 643,010 0.7% Net Revenues Less Expenditures (2,433,300) 8,264,453 41,610 2,474,910 Beginning Fund Balance 19,481,298 19,481,298 Ending Fund Balance 17,047,998 19,522,908 Ending Fund Balance Detail: General Fund Reserves 14,056,428 17,107,218 14.6% 17.9% Contingency for Unanticipated Costs 1,500,000 1,500,000 Strategic Opportunities Fund 425,000 425,000 Restricted for Annexation 1,066,570 490,690 Revenue Overview Expenditures Overview June 2017 Monthly Financial Report City of Kent, Washington General Fund Overview Summary Analysis through June shows an overall positive budget variance of $2.5 million. Revenues are estimated to end the year approximately $1.8 million (2%) higher than budgeted. Through June, all departments are remaining fairly close to budget with an overall favorable budget variance of $643k or 0.7%. The 2017 adopted budget reflects an expected use of $2.4 million of fund balance, including $2 million for Parks capital projects. General Fund Reserves are estimated to end the year at $17.1 million, or 17.9% of estimated 2017 expenditures. The budgeted use of fund balance is offset by the positive budget variance of $2.5 million, creating a net surplus of $42k. 77 Revenue Categories 2017 Adj Budget 2017 YTD 2017 Est Actual Variance Favorable (Unfavorable) %Variance Favorable (Unfavorable) Taxes: Property 22,782,330 12,108,519 22,861,500 79,170 0.3% Sales & Use 19,756,570 10,191,237 19,870,100 113,530 0.6% Utility 18,947,950 10,353,641 19,200,800 252,850 1.3% Business & Occupation 8,900,000 2,558,855 8,931,240 31,240 0.4% Other 882,090 269,831 907,220 25,130 2.8% Licenses and Permits 5,611,350 2,911,948 5,772,500 161,150 2.9% Intergovernmental Revenue 7,699,970 4,055,689 7,872,700 172,730 2.2% Charges for Services 5,117,170 3,470,919 5,694,800 577,630 11.3% Fines and Forfeitures 1,565,970 903,723 1,528,500 (37,470)-2.4% Miscellaneous Revenue 1,582,560 1,039,098 2,038,500 455,940 28.8% Transfers In 950,000 - 950,000 - Total Revenues 93,795,960 47,863,460 95,627,860 1,831,900 2.0% Variance Notes June 2017 Monthly Financial Report City of Kent, Washington General Fund Overview - Revenues Variance analysis for revenues is provided for particular line items or those in which the estimated actual amount differs from the budgeted amount by at least 10% or minimum of $500,000. Charges for Services: Estimated year-end collections at $596k in excess of budget, largely due to increased permit review fees ($717k) offset by decreased public safety ($71k) and recreation charges ($35k). Miscellaneous Revenue: Estimated year-end collections at $458k in excess of budget, largely due to increased interest income ($65k) and reimbursements for services ($390k). 78 Prior Year Revenues Budgeted Revenues Actual Revenues January 4,829 5,464 5,578 February 5,138 5,225 5,024 March 6,546 7,439 7,586 April 16,091 14,962 17,008 May 6,600 7,175 6,492 June 5,578 6,225 6,175 July 6,545 6,040 0 August 5,395 5,068 0 September 6,531 6,810 0 October 16,476 15,667 0 November 6,303 6,086 0 December 9,602 7,635 0 Total 95,633 93,796 47,863 Prior Year Revenues Budgeted Revenues Actual Revenues January 0 9 0 February 199 168 197 March 719 717 711 April 9,550 8,760 9,768 May 1,305 2,136 1,324 June 83 132 109 July 55 46 0 August 88 91 0 September 441 490 0 October 8,525 8,683 0 November 1,414 1,368 0 December 155 184 0 Total 22,534 22,782 12,109 Prior Year Revenues Budgeted Revenues Actual Revenues January 1,461 1,507 1,686 February 2,026 1,974 1,986 March 1,519 1,448 1,550 April 1,575 1,457 1,547 May 1,739 1,641 1,836 June 1,236 1,347 1,587 July 1,560 1,614 0 August 1,798 1,785 0 September 1,594 1,676 0 October 1,691 1,660 0 November 1,822 1,812 0 December 1,793 1,834 0 Total 19,814 19,757 10,191 2017 Monthly Financial Report City of Kent, Washington General Fund Revenues ($ in Thousands) All Revenues Sources Property Tax Sales Tax $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 17 Bud 16 Act 17 Act $0 $5,000 $10,000 $15,000 $20,000 $25,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 17 Bud 16 Act 17 Act $0 $5,000 $10,000 $15,000 $20,000 $25,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 17 Bud 16 Act 17 Act 79 2017 Monthly Financial Report City of Kent, Washington General Fund Revenues ($ in Thousands) Prior Year Revenues Budgeted Revenues Actual Revenues January 2,115 2,083 1,842 February 1,708 1,632 1,829 March 1,584 1,570 1,739 April 1,597 1,823 1,873 May 1,491 1,457 1,566 June 1,368 1,341 1,505 July 1,563 1,731 0 August 1,442 1,403 0 September 1,584 1,636 0 October 1,432 1,524 0 November 1,499 1,421 0 December 1,107 1,327 0 Total 18,490 18,948 10,354 Prior Year Revenues Budgeted Revenues Actual Revenues January 1 8 1 February 2 37 4 March 165 170 494 April 1,383 1,839 1,945 May 737 445 232 June 115 128 153 July 1,632 1,659 0 August 775 456 0 September 169 139 0 October 2,293 1,950 0 November 239 287 0 December 2,761 2,652 0 Total 10,273 9,770 2,829 Prior Year Revenues Budgeted Revenues Actual Revenues January 1,252 1,454 2,049 February 1,203 1,013 1,008 March 2,559 2,699 3,092 April 1,986 1,512 1,876 May 1,328 1,446 1,534 June 2,775 3,030 2,820 July 1,734 1,501 0 August 1,290 1,323 0 September 2,743 2,760 0 October 2,534 1,990 0 November 1,329 1,068 0 December 3,787 2,743 0 Total 24,521 22,539 12,381 Utility Tax Other Taxes Other Revenues (Intergovernmental, Licenses & Permits, Charges for Service, Fines & Forfeits, and Misc Revenues) $0 $5,000 $10,000 $15,000 $20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 17 Bud 16 Act 17 Act $0 $2,000 $4,000 $6,000 $8,000 $10,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 17 Bud 16 Act 17 Act $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 17 Bud 16 Act 17 Act 80 Department 2017 Adj Budget 2017 YTD 2017 Est Actual Variance Favorable (Unfavorable) %Variance Favorable (Unfavorable) City Council 352,110 178,151 340,200 11,910 3.4% Mayor's Office/City Clerk 2,709,760 1,139,336 2,564,400 145,360 5.4% Economic & Community Dev 6,394,650 2,775,093 6,110,500 284,150 4.4% Finance 2,734,560 1,196,469 2,692,100 42,460 1.6% Fire Contracted Services 3,603,110 1,890,372 3,639,800 (36,690)-1.0% Human Resources 1,977,930 893,390 1,918,800 59,130 3.0% Information Technology 517,310 281,141 541,300 (23,990)-4.6% Law 1,737,080 774,087 1,666,800 70,280 4.0% Municipal Court 3,181,510 1,555,907 3,171,900 9,610 0.3% Parks, Recreation & Comm Svcs 17,229,170 7,840,936 16,937,000 292,170 1.7% Police 36,976,600 18,060,373 37,155,600 (179,000)-0.5% Public Works 1,294,960 603,155 1,236,100 58,860 4.5% Non-Departmental 17,520,510 2,410,597 17,611,750 (91,240)-0.5% Total Expenditures 96,229,260 39,599,008 95,586,250 643,010 0.7% Variance Notes June 2017 Monthly Financial Report City of Kent, Washington General Fund Overview - Expenditures Variance analysis for expenditures is provided for particular departments or those in which the estimated actual amount differs from the budgeted amount by at least 10% or a minimum of $500,000. None. 81 2015 2016 2017 2017 2017 Actual Actual Adj Budget YTD Est Actual Beginning Fund Balance 11,312,140 15,372,499 19,481,298 19,481,298 19,481,298 Revenues Taxes: Property 22,015,525 22,534,441 22,782,330 12,108,519 22,861,500 Sales & Use 18,583,057 19,814,047 19,756,570 10,191,237 19,870,100 Utility 18,151,853 18,490,458 18,947,950 10,353,641 19,200,800 Business & Occupation 7,656,220 9,311,445 8,900,000 2,558,855 8,931,240 Other 1,023,500 961,833 882,090 269,831 907,220 Licenses and Permits 5,827,474 6,269,525 5,611,350 2,911,948 5,772,500 Intergovernmental Revenue 7,783,935 8,072,343 7,699,970 4,055,689 7,872,700 Charges for Services 5,814,133 5,363,205 5,117,170 3,470,919 5,694,800 Fines and Forfeitures 1,660,366 1,551,720 1,565,970 903,723 1,528,500 Miscellaneous Revenue 1,756,485 2,302,027 1,582,560 1,039,098 2,038,500 Transfers In 996,921 962,261 950,000 950,000 Total Revenues 91,269,469 95,633,303 93,795,960 47,863,460 95,627,860 Expenditures City Council 298,884 337,355 352,110 178,151 340,200 Mayor's Office/City Clerk 2,211,861 2,339,581 2,709,760 1,139,336 2,564,400 Economic & Community Dev 5,345,212 5,521,764 6,394,650 2,775,093 6,110,500 Finance 2,419,039 2,751,128 2,734,560 1,196,469 2,692,100 Fire Contracted Services 3,513,988 3,556,484 3,603,110 1,890,372 3,639,800 Human Resources 1,039,875 1,733,010 1,977,930 893,390 1,918,800 Information Technology 456,328 509,617 517,310 281,141 541,300 Law 1,198,769 1,458,153 1,737,080 774,087 1,666,800 Municipal Court 2,988,951 3,079,215 3,181,510 1,555,907 3,171,900 Parks, Recreation & Comm Svcs 15,595,739 16,027,802 17,229,170 7,840,936 16,937,000 Police 32,992,234 35,155,894 36,976,600 18,060,373 37,155,600 Public Works 4,896,300 1,273,864 1,294,960 603,155 1,236,100 Non-Departmental 14,251,930 17,274,106 17,520,510 2,410,597 17,611,750 Total Expenditures 87,209,110 91,017,974 96,229,260 39,599,008 95,586,250 Net Revenues less Expenditures 4,060,359 4,615,329 (2,433,300) 8,264,453 41,610 Ending Fund Balance 15,372,499 19,987,828 17,047,998 27,745,751 19,522,908 Ending Fund Balance Detail: General Fund Reserves 11,749,159 16,996,258 14,056,428 17,107,218 based on same year actuals/budget 13.5% 18.7% 14.6%17.9% Contingency for Unanticipated Costs 1,500,000 1,500,000 1,500,000 1,500,000 Strategic Opportunities Fund 425,000 425,000 425,000 425,000 Restricted for Annexation 1,698,340 1,066,570 1,066,570 490,690 June 2017 Monthly Financial Report City of Kent, Washington General Fund 82 2015 2016 2017 % of thru June thru June thru June Budget Revenues Taxes: Property 11,519,400 11,855,794 12,108,519 252,724 2.1% 53.1% Sales & Use 8,900,565 9,555,397 10,191,237 635,840 6.7% 51.6% Utility 10,241,269 9,863,385 10,353,641 490,256 5.0% 54.6% Business & Occupation 1,743,431 2,115,441 2,558,855 443,414 21.0% 28.8% Other 302,576 287,000 269,831 (17,169) -6.0% 30.6% Licenses and Permits 2,267,780 2,668,097 2,911,948 243,851 9.1% 51.9% Intergovernmental Revenue 3,830,852 4,076,772 4,055,689 (21,082) -0.5% 52.7% Charges for Services 2,897,641 2,757,619 3,470,919 713,299 25.9% 67.8% Fines and Forfeitures 894,694 774,273 903,723 129,450 16.7% 57.7% Miscellaneous Revenue 800,304 827,660 1,039,098 211,438 25.5% 65.7% Transfers In - - - - Total Revenues 43,398,512 44,781,438 47,863,460 3,082,022 6.9% 51.0% Expenditures City Council 151,722 155,104 178,151 23,047 14.9% 50.6% Mayor's Office/City Clerk 1,112,837 1,160,733 1,139,336 (21,396) -1.8% 42.0% Economic & Community Dev 2,555,596 2,680,962 2,775,093 94,130 3.5% 43.4% Finance 1,108,462 1,341,712 1,196,469 (145,243) -10.8% 43.8% Fire Contracted Services 1,777,084 1,761,326 1,890,372 129,046 7.3% 52.5% Human Resources 518,917 758,659 893,390 134,731 17.8% 45.2% Information Technology 202,924 257,195 281,141 23,947 9.3% 54.3% Law 594,096 721,562 774,087 52,525 7.3% 44.6% Municipal Court 1,452,837 1,525,021 1,555,907 30,886 2.0% 48.9% Parks, Recreation & Comm Svcs 7,339,905 7,590,429 7,840,936 250,507 3.3% 45.5% Police 15,974,854 16,975,698 18,060,373 1,084,674 6.4% 48.8% Public Works *2,295,183 792,433 603,155 (189,278) -23.9% 46.6% Non-Departmental 232,479 1,602,271 2,410,597 808,326 50.4% 13.8% Total Expenditures 35,316,896 37,323,106 39,599,008 2,275,902 6.1% 41.2% * Most Public Works costs were moved to the Street Operating Fund effective January 1, 2016. Only costs allocated to the Panther Lake annexation remain in the General Fund. 2016-17 Variance June 2017 Monthly Financial Report City of Kent, Washington Year-to-Year Month Comparison General Fund 83 2015 2016 2017 2017 2017 Actual Actual Budget YTD Est Actual Operating revenues and expenditures only, capital is excluded. In instances where expenditures exceed revenues, fund balance is being utilized. Street Fund Revenues 11,793,043 14,254,751 12,272,430 5,463,195 12,731,520 Expenditures 9,072,561 14,369,693 12,373,160 5,377,270 12,371,030 Net Revenues Less Expenditures 2,720,483 (114,942)(100,730)85,924 360,490 LEOFF 1 Retiree Benefits Revenues 1,341,722 1,035,289 1,148,730 485,753 1,113,900 Expenditures 1,279,216 954,561 1,163,220 596,874 1,056,500 Net Revenues Less Expenditures 62,506 80,728 (14,490)(111,121)57,400 Lodging Tax Revenues 279,878 294,859 281,000 114,812 302,700 Expenditures 257,164 219,989 278,060 88,826 218,800 Net Revenues Less Expenditures 22,714 74,870 2,940 25,986 83,900 Youth/Teen Programs Revenues 894,592 911,855 928,600 514,018 934,850 Expenditures 920,380 942,000 942,000 942,000 Net Revenues Less Expenditures (25,788)(30,145)(13,400)514,018 (7,150) Capital Resources Revenues 20,561,359 21,126,646 12,738,960 8,139,867 15,153,150 Expenditures 11,538,631 15,566,060 15,498,530 2,568,577 15,170,000 Net Revenues Less Expenditures 9,022,728 5,560,586 (2,759,570)5,571,290 (16,850) Criminal Justice Revenues 4,753,967 4,873,770 4,126,810 2,324,665 4,691,000 Expenditures 2,965,408 3,156,208 4,553,970 2,084,152 4,168,300 Net Revenues Less Expenditures 1,788,558 1,717,562 (427,160)240,513 522,700 Community Development Block Grant Revenues 808,466 839,392 1,056,260 142,611 1,056,260 Expenditures 808,466 839,392 1,056,260 367,528 1,056,260 Net Revenues Less Expenditures (224,917) ShoWare Operating Revenues 1,680,882 1,647,988 1,150,000 108,389 1,150,000 Expenditures 518,720 1,097,457 1,089,320 195,064 796,550 Net Revenues Less Expenditures 1,162,163 1,129,269 60,680 (86,675)353,450 Other Operating Revenues 143,726 172,195 116,520 70,110 116,520 Expenditures 64,765 89,077 116,520 70,016 98,000 Net Revenues Less Expenditures 78,961 83,119 94 18,520 Special Revenue Funds 2017 Monthly Financial Report Other Funds Overview (Revenues and Expenditures) City of Kent, Washington 2015: Net revenues less expenditures include $2.27m street operating revenues returned from LID funded projects. These funds have been allocated to projects in the 2016 budget. 2016: Includes street and transportation revenues and costs moved from the General Fund. 84 2015 2016 2017 2017 2017 Actual Actual Budget YTD Est Actual Operating revenues and expenditures only, capital is excluded. In instances where expenditures exceed revenues, fund balance is being utilized. 2017 Monthly Financial Report Other Funds Overview (Revenues and Expenditures) City of Kent, Washington Water Utility Revenues 20,140,494 21,140,582 21,586,500 10,620,664 21,650,000 Expenditures 17,620,354 18,076,074 24,298,380 7,731,728 22,901,490 Net Revenues Less Expenditures 2,520,140 3,064,508 (2,711,880)2,888,936 (1,251,490) Sewer/Drainage Utility Revenues 48,525,436 52,152,841 50,662,400 25,429,301 51,302,000 Expenditures 47,086,396 48,908,079 48,553,060 22,419,801 48,512,760 Net Revenues Less Expenditures 1,439,040 3,244,762 2,109,340 3,009,500 2,789,240 Solid Waste Utility Revenues 608,685 600,000 300,638 600,000 Expenditures 365 471,179 578,510 239,901 464,010 Net Revenues Less Expenditures (365)137,506 21,490 60,737 135,990 Golf Complex Revenues 2,661,490 2,475,682 2,871,410 1,129,585 2,305,000 Expenditures 2,867,873 3,188,762 2,808,280 1,316,564 2,810,000 Net Revenues Less Expenditures (206,383)(713,080)63,130 (186,979)(505,000) Fleet Services Revenues 4,538,925 4,769,001 4,715,900 2,460,633 4,822,000 Expenditures 3,195,504 3,974,431 5,685,510 1,740,170 5,238,330 Net Revenues Less Expenditures 1,343,420 794,570 (969,610)720,463 (416,330) Central Services Revenues 372,070 382,444 446,510 175,462 362,000 Expenditures 350,962 399,786 421,150 137,682 355,200 Net Revenues Less Expenditures 21,108 (17,342)25,360 37,781 6,800 Information Technology Revenues 7,603,220 7,717,834 7,962,060 3,965,252 7,926,550 Expenditures 6,708,773 6,905,076 8,683,630 2,649,806 8,655,460 Net Revenues Less Expenditures 894,447 812,757 (721,570)1,315,446 (728,910) Facilities Revenues 5,429,412 5,556,854 4,728,530 2,327,116 4,768,750 Expenditures 5,527,155 4,881,741 5,002,870 1,978,506 4,977,300 Net Revenues Less Expenditures (97,744)675,113 (274,340)348,611 (208,550) Unemployment Revenues 397,641 420,226 121,700 93,054 130,000 Expenditures 98,860 126,718 168,810 34,777 110,000 Net Revenues Less Expenditures 298,781 293,508 (47,110)58,277 20,000 Enterprise Funds Internal Service Funds 85 2015 2016 2017 2017 2017 Actual Actual Budget YTD Est Actual Operating revenues and expenditures only, capital is excluded. In instances where expenditures exceed revenues, fund balance is being utilized. 2017 Monthly Financial Report Other Funds Overview (Revenues and Expenditures) City of Kent, Washington Workers Compensation Revenues 1,095,382 1,251,586 1,023,800 523,049 1,052,700 Expenditures 681,822 1,436,775 1,397,280 545,162 1,121,680 Net Revenues Less Expenditures 413,560 (185,190)(373,480)(22,113)(68,980) 2015: Revenues reflect 2015-16 rate reduction, with GF savings going to the CR Fund to reduce the deficit. Employee Health & Wellness Revenues 10,487,102 10,688,926 10,432,600 5,422,709 10,845,400 Expenditures 11,298,096 12,130,696 11,936,000 6,988,225 13,205,930 Net Revenues Less Expenditures (810,993)(1,441,770)(1,503,400)(1,565,517)(2,360,530) Liability Insurance Revenues 1,135,932 1,498,137 1,249,000 1,451,197 2,079,600 Expenditures 1,187,054 2,145,627 1,863,100 2,221,565 2,708,500 Net Revenues Less Expenditures (51,122)(647,489)(614,100)(770,369)(628,900) 2017: YTD expenditures include claims paid for which reimbursement will be received. Property Insurance Revenues 582,938 628,105 554,820 279,997 558,000 Expenditures 471,003 445,135 500,810 241,693 443,200 Net Revenues Less Expenditures 111,935 182,969 54,010 38,304 114,800 86 2015 2016 2017 thru June thru June thru June Operating revenues and expenditures only, capital is excluded. Street Fund Revenues 4,176,238 5,758,484 5,463,195 (295,289)-5.1% Expenditures 2,242,458 4,883,244 5,377,270 494,026 10.1% Net Revenues Less Expenditures 1,933,779 875,240 85,924 2016 includes street and transportation revenues and costs moved from the General Fund. LEOFF 1 Retiree Benefits Revenues 296,619 226,851 485,753 258,902 114.1% Expenditures 757,454 443,694 596,874 153,179 34.5% Net Revenues Less Expenditures (460,836)(216,844)(111,121) 2016 revenues reflect a timing difference because of revenues that were not booked until June. Lodging Tax Revenues 93,286 106,149 114,812 8,663 8.2% Expenditures 22,762 134,265 88,826 (45,439)-33.8% Net Revenues Less Expenditures 70,524 (28,116)25,986 2016 expenditures reflect increased marketing activities. Youth/Teen Programs Revenues 481,515 475,267 514,018 38,750 8.2% Expenditures Net Revenues Less Expenditures 481,515 475,267 514,018 Capital Resources Revenues 5,745,636 7,737,950 8,139,867 401,916 5.2% Expenditures 2,428,993 3,053,334 2,568,577 (484,757)-15.9% Net Revenues Less Expenditures 3,316,643 4,684,617 5,571,290 Expenditures higher in 2015 and 2017 due to land purchases in Q1. Criminal Justice Revenues 2,211,425 2,295,414 2,324,665 29,251 1.3% Expenditures 1,413,556 1,458,168 2,084,152 625,985 42.9% Net Revenues Less Expenditures 797,868 837,247 240,513 2016 increase in revenues due to strong sales tax trends and an increase in seized assets. Community Development Block Grants Revenues 184,880 112,810 142,611 29,801 26.4% Expenditures 290,114 329,109 367,528 38,419 11.7% Net Revenues Less Expenditures (105,234)(216,299)(224,917) Lag in grant reimbursement for expenses incurred. ShoWare Operating Revenues 81,282 350,158 108,389 (241,769)-69.0% Expenditures 29,109 139,560 195,064 55,504 39.8% Net Revenues Less Expenditures 52,173 210,598 (86,675) Admissions Tax revenues received quarterly (April, July, September, January) 2016-17 Variance Year-to-Year Month Comparison 2017 Monthly Financial Report City of Kent, Washington Other Funds Overview (Revenues and Expenditures) Special Revenue Funds 87 2015 2016 2017 thru June thru June thru June Operating revenues and expenditures only, capital is excluded. 2016-17 Variance Year-to-Year Month Comparison 2017 Monthly Financial Report City of Kent, Washington Other Funds Overview (Revenues and Expenditures) Other Operating Revenues 2,220 22,130 70,110 47,980 216.8% Expenditures 6,702 38,757 70,016 31,259 80.7% Net Revenues Less Expenditures (4,482)(16,627)94 Combines several small programs, including City Art Program and Neighborhood Matching Grants Water Utility Revenues 8,377,405 9,287,382 10,620,664 1,333,282 14.4% Expenditures 7,337,697 7,305,457 7,731,728 426,271 5.8% Net Revenues Less Expenditures 1,039,708 1,981,925 2,888,936 Sewer/Drainage Utility Revenues 23,059,536 23,730,799 25,429,301 1,698,502 7.2% Expenditures 18,237,070 21,345,536 22,419,801 1,074,265 5.0% Net Revenues Less Expenditures 4,822,466 2,385,262 3,009,500 Solid Waste Utility Revenues 308,379 300,638 (7,741)-2.6% Expenditures 213,466 239,901 26,434 11.0% Net Revenues Less Expenditures 94,913 60,737 Solid Waste Utility established in 2016. Golf Complex Revenues 1,345,823 1,219,326 1,129,585 (89,741)-7.4% Expenditures 1,308,855 1,474,393 1,316,564 (157,829)-10.7% Net Revenues Less Expenditures 36,968 (255,067)(186,979) 2016 & 2017 revenues down due to inclement weather conditions in Q1. Fleet Services Revenues 2,285,511 2,397,727 2,460,633 62,907 2.6% Expenditures 1,210,381 1,854,007 1,740,170 (113,837)-6.1% Net Revenues Less Expenditures 1,075,130 543,720 720,463 Central Services Revenues 198,403 203,387 175,462 (27,925)-13.7% Expenditures 211,519 212,288 137,682 (74,606)-35.1% Net Revenues Less Expenditures (13,116)(8,901)37,781 Information Technology Revenues 3,524,326 3,783,282 3,965,252 181,970 4.8% Expenditures 2,990,158 3,001,886 2,649,806 (352,081)-11.7% Net Revenues Less Expenditures 534,168 781,395 1,315,446 Internal Service Funds Enterprise Funds 88 2015 2016 2017 thru June thru June thru June Operating revenues and expenditures only, capital is excluded. 2016-17 Variance Year-to-Year Month Comparison 2017 Monthly Financial Report City of Kent, Washington Other Funds Overview (Revenues and Expenditures) Facilities Revenues 2,635,428 2,674,870 2,327,116 (347,754)-13.0% Expenditures 2,017,407 2,088,111 1,978,506 (109,606)-5.2% Net Revenues Less Expenditures 618,021 586,758 348,611 Unemployment Revenues 198,538 207,460 93,054 (114,406)-55.1% Expenditures 58,376 97,401 34,777 (62,624)-64.3% Net Revenues Less Expenditures 140,163 110,059 58,277 Workers Compensation Revenues 545,304 585,655 523,049 (62,606)-10.7% Expenditures 361,690 560,841 545,162 (15,679)-2.8% Net Revenues Less Expenditures 183,614 24,814 (22,113) Employee Health & Wellness Revenues 5,196,633 5,287,069 5,422,709 135,639 2.6% Expenditures 5,415,528 5,856,055 6,988,225 1,132,171 19.3% Net Revenues Less Expenditures (218,895)(568,985)(1,565,517) Liability Insurance Revenues 567,722 570,850 1,451,197 880,347 154.2% Expenditures 1,074,252 1,485,978 2,221,565 735,588 49.5% Net Revenues Less Expenditures (506,531)(915,128)(770,369) Property Insurance Revenues 291,502 306,431 279,997 (26,434)-8.6% Expenditures 665,754 247,803 221,600 (26,203)-10.6% Net Revenues Less Expenditures (374,252)58,628 58,397 89 2017 2017 2017 2017 Beginning Fund Balance Estimated Revenues Estimated Expenditures Ending Fund Balance Operating funds only, capital funds are excluded. General Fund 19,481,298 95,627,860 95,586,250 19,522,908 Street Fund 3,397,945 12,731,520 12,371,030 3,758,435 LEOFF 1 Retiree Benefits 1,174,261 1,113,900 1,056,500 1,231,661 Lodging Tax 469,387 302,700 218,800 553,287 Youth/Teen Programs 91,130 934,850 942,000 83,980 Capital Resources 11,277,727 15,153,150 15,170,000 11,260,877 Criminal Justice 5,697,717 4,691,000 4,168,300 6,220,417 Community Development Block Grants 1,056,260 1,056,260 ShoWare Operating 2,147,074 1,150,000 796,550 2,500,524 Other Operating 436,914 116,520 98,000 455,434 Councilmanic Debt Service 521,394 10,781,200 10,316,410 986,184 Special Assessments Debt Service 1,188,906 1,561,380 2,585,830 164,456 Water Utility 10,966,106 21,650,000 22,901,490 9,714,616 Sewer/Drainage Utility 11,295,548 51,302,000 48,512,760 14,084,788 Solid Waste Utility 302,528 600,000 464,010 438,518 Golf Complex (3,768,128) 2,305,000 2,810,000 (4,273,128) Fleet Services 5,134,423 4,822,000 5,238,330 4,718,093 Central Services (63,568) 362,000 355,200 (56,768) Information Technology 3,640,615 7,926,550 8,655,460 2,911,705 Facilities 2,340,684 4,768,750 4,977,300 2,132,134 Unemployment 1,332,446 130,000 110,000 1,352,446 Workers Compensation 2,356,624 1,052,700 1,121,680 2,287,644 Employee Health & Wellness 4,681,152 10,845,400 13,205,930 2,320,622 Liability Insurance 1,805,167 2,079,600 2,708,500 1,176,267 Property Insurance 531,548 558,000 443,200 646,348 City of Kent, Washington Fund Balances 2017 Monthly Financial Report General Fund Special Revenue Funds Debt Service Funds Enterprise Funds Internal Service Funds 90 FINANCE DEPARTMENT Aaron BeMiller, Director Phone: 253-856-5260 Fax: 253-856-6255 Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 DATE: August 15, 2017 TO: Operations Committee FROM: Aaron BeMiller, Director SUBJECT: Director’s Report – Information Only MOTION: Information Only SUMMARY: The Finance Director will report out financial or operational item(s). BUDGET IMPACT: BACKGROUND: 91 This page intentionally left blank 92