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HomeMy WebLinkAboutCity Council Meeting - Council - Minutes - 10/1/2019 Approved Kent City Council City Council Special Meeting Minutes October 1, 2019 Date: October 1, 2019 Time: 5:00 p.m. Place: Crystal Mountain Hall at Kent Commons SPECIAL COUNCIL MEETING AGENDA - 5 P.M. 1. CALL TO ORDER / FLAG SALUTE Mayor Ralph called the meeting to order at 5:03 p.m. 2. ROLL CALL Attendee Name Title Status Arrived Toni Troutner Councilmember Present Marli Larimer Councilmember Present Bill Boyce Council President Present Dana Ralph Mayor Present Satwinder Kaur Councilmember Present Dennis Higgins Councilmember Present Les Thomas Councilmember Present Brenda Fincher Councilmember Present 3. OTHER BUSINESS A. Mayor Ralph’s 2020 Mid-Biennium Budget Adjustment Message Mayor Ralph presented her mid-biennium budget adjustment message as follows: I am pleased to present to the City Council the proposed 2020 mid-biennium budget adjustment. The City Council adopted the original 2019-2020 biennial budget in November 2019. That budget process was complicated and presented some significant challenges and required difficult decisions to create a balanced budget. The City was faced with the loss of the state- shared Streamlined Sales Tax mitigation revenues coupled with the expiration of the Panther Lake Annexation Sales Tax Credit equating to nearly 10% of the City’s General Fund revenues. Although the City was able to later take steps to secure the Streamlined Sales Tax Mitigation revenue for another two years, it would not be fiscally prudent to use that revenue stream to support ongoing operating expenses but instead to use it for one- time capital opportunities. Although the 2019-2020 budget faced much hardship, with the collaborative effort amongst City leadership, City Council, City staff and the Kent community, a balanced budget was achieved. Last year budget conversations started in February and those conversations made Kent City Council City Council Special Meeting Minutes October 1, 2019 Kent, Washington Page 2 of 4 the budget process successful. The mid-biennium budget adjustment provides an opportunity to modify the budget to account for changes in fiscal events. The City’s focus was on changes in revenue projections and unforeseeable changes in expenditures which may have arisen since the adoption of the original budget. The mid- biennium budget adjustment also allows us to make recommendations for capital investment opportunities that were not present when the original budget was developed. We did not budget for receipt of any streamlined sales tax mitigation as if had been eliminated from the state’s budget. We had taken capital to sustain operations, so it is appropriate to invest the streamlined sales tax mitigation back in capital projects. The City took a new approach in determining which proposals to recommend as part of this mid biennium budget adjustment. As mentioned earlier, the City was able to secure the Streamlined Sales Tax Mitigation revenue for at least another two years. Requests and proposals for use of one-time funds were submitted by department directors. In the past, administration worked with department directors to work through the budget proposals. This year we tired a new process and it really gets back to that concept we continue to talk about - being "one Kent." Every decision made is done by looking at requests holistically, as opposed to through the lens of an individual department. As a group, we engaged in great dialogue and in the end collaboratively recommended the projects proposed in this mid-biennium budget adjustment. Through great conversation with department heads and their deputy directors, there is consensus on how the funds should be used. We wanted to treat this mid-biennium adjustment as a true adjustment. Departments were asked to limit their requests for additional expenditures; keeping the requests to only those items that were unforeseeable when the budget was passed. For unanticipated items. This was not the time to ask for new positions, initiatives or items. This mid-biennial budget adjustment includes: • Establishing the 2020 budget for new initiatives approved during 2019 and modifying the budget to reflect the anticipated revenues and expenditures related to programs. An example includes the BWC and red- light camera programs. • Updating revenue forecasts • Final modifications to cost allocations, and • Investing in capital The newly proposed total budget for 2020 totals $345.9 million. This includes an increase to operating expenses, new investments in capital and transfers between funds. Of the total $345.9 million budget, $108.6 million is allocated to the General Kent City Council City Council Special Meeting Minutes October 1, 2019 Kent, Washington Page 3 of 4 Fund. The General Fund will see a $2.3 million or 2.1% increase in expenditures from the adopted budget. Much of the increase in expenditures are offset by revenue adjustments leaving a gap of $577K in which fund balance will be utilized. Most of the added expenses are related to: • Changes already made to positions in 2019 • Use of additional transferred revenues from the red-light cameras • Changes in cost allocation plans, and • Public defense funding. As the Puget Sound Regional Fire Authority continues to eliminate contracts with the City for services, we are continuing to see reductions in revenues for those services. The reduced revenues for Information Technology services has left a deficit in the IT fund of $430,000. Part of the mid-biennium budget adjustment modifies allocations from other departments and funds to cover that shortage. In addition, the City expenses will be reduced by fees paid to the PSRFA for fire investigations ($202,120). That cost savings is offset by the cost of hiring two Detectives ($294,280). In the 2019-2020 adopted budget, there was a placeholder in the General Fund for the cost allocation plan. This budget adjustment includes the full implementation of this allocation which equitably shares the eligible costs of the support services departments (Administration, Human Resources, Finance and Law) between departments, programs and funds throughout the City. Although the General Fund budget had been established related to the cost allocation plan, the adopted budget did not include the additional $2.4 million in expenses to each of the other funds. Revenues from investment income was increased to appropriately reflect the projected earnings. A couple of years ago we made changes to how we invest funds. This helped to offset some of the cost related to the allocation plan. For the funds that do not have enough new revenue to cover the new expenses, fund balance will be used. We continued to invest in public safety services. The 2019-2020 budget used revenues from the newly authorized red-light camera program to provide for body worn cameras for police officers. This mid-biennium budget adjustment includes increases in projected red-light camera program revenues as well as related public safety expenditures. In prior years, Sales Tax Mitigation revenues have been used to support General Fund operations. During the State’s budget process, Sales Tax Mitigation to the City was nearly eliminated. The Mayor and councilmembers made multiple trips to the legislature to lobby for the continuation of the funding. The City did not include those revenues in their 2019-2020 budget. After much effort, the City was able to secure that revenue for another two years. Unsure of the certainty of the future of that revenue stream, these Kent City Council City Council Special Meeting Minutes October 1, 2019 Kent, Washington Page 4 of 4 dollars are best treated as one-time monies to be used for one-time projects. An additional $3.85 million from SST combined with available funds from the Capital Resources Fund made possible nearly $6 million in projects. A few of the projects included in the proposed budget are: • Meet Me on Meeker o Driving Range o Promenade which is the section along Kent Elementary • Kent Memorial Park Turf Conversion o Allowing us to leverage grants o Providing opportunities for increased revenues from use of the park all year round • Riverview Park Development • 4th and Willis round-about Greenway Design, and • Mill Creek Canyon Cleanup and restoring of the trails In addition, the proposed budget includes the funding of several projects out of the Criminal Justice Fund including: • Corrections Facilities backup Generator • Corrections Cameras • Corrections/Court Fencing Tonight, I respectfully transmit this mid-biennium budget adjustment to the City Council for consideration. This document is a representation of the collaborative efforts of City leadership, City Council, City staff and the Kent community. I would like to extend my gratitude to City leadership and the Finance Department for their hard work and willingness to embrace the new approach to selecting recommendations to include in the budget amendment. 4. ADJOURNMENT Mayor Ralph adjourned the meeting. Meeting ended at 5:16 p.m. Kimberley A. Komoto City Clerk MAYOR’S PROPOSED2020 MID-BIENNIUM ADJUSTMENT City of Kent, Washington                                                                                                                              .                        