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HomeMy WebLinkAboutCity Council Committees - Operations - 05/03/2011 SCENT W w!M I No TO N OPERATIONS COMMITTEE MINUTES May 3, 2011 Committee Members Present: 3,arrlie Perry, Les Thomas (Chair), Ron Harmon for Debbie Raplee The meeting was called to order by L Thomas at 4:00 p.m. 1. APPROVAL OF MINUTES DATED APRIL S, 2011 3 perry moved to approve the Operations Committee minutes dated April 5, 2011. R Harmon seconded the motion, which passed 3-0. 2. APPROVAL OF VOUCHERS DATED MARCH 31, 2011 AND APRIL 15, 2011 R Harmon moved to approve the vouchers dated March 15, 2011. 1 Perry seconded the motion, which passed 3-0. 3. RECOMMEND THAT THE OPERATIONS COMMITTEE APPROVE THE ORDINANCE GRANTING OLYMPIC PIPE LINE COMPANY A NONEXCLUSIVE FANCHISE FOR THE TRANSPORTATION OF PETROLEUM PRODUCTS WITHIN THE CITY OF KENT. City Attorney Tom Brubaker advised the Committee that a second ordinance was inadvertently included and that the actual Olympic Pipe Line ordinance begins on page 14 of the packet. This is a franchise ordinance that allows Olympic to run and operate its pipeline in our streets from the City's most northerly to its most southerly border. It is important to note that although the pipeline is a couple of miles long, it only crosses about 5 or 6 of the City's streets, That factor played an important role in the ongoing negotiations with Olympic over the last 10 years to try to get them to increase their franchise fees. Olympic has agreed to a new franchise fee number that went up $3000 to $4000 a year to $22,000 this year, this will increase with cost of living. They will also compensate, just in part, for the difference over the previous years, they will relate back to this year and pay an additional $18,500 for 2010. If this is approved and everything passes through, we can expect a check for about $40,000, thereafter it will be $22,000, inflated with cost of living. State law requires that a franchise cannot be passed on the same day it is introduced, so once this committee approves this ordinance, it will go to council once for introduction, and then again for presentation and passage. T Brubaker also noted that we do have to publish the entire ordinance, which is fairly large and Olympic will pay the cost of publication which will be about $3500. Perry asked if there have been any issues at all with this over the last 10 years and would Olympic be responsible if there was a cost for hazardous substances. T Brubaker responded that only concern has been from the Kent Regional Fire Authority. The concerns are only that there are a lot of hazardous/flammable materials that go in and out of the pipeline. Concern is if there were a leak how would the City be able to react and what does it cost to observe and maintain the pipeline to make sure it is safe and operable, that in part is what this number is based on, Olympic would be responsible only to the extent they are liable. They are regulated by the Federal government, not by state or local government. They will stand behind their operations to,the extent they are required to by case law and federal law. 3 Perry recommended that the Operations Committee approve the Ordinance granting Olympic Pipe Line Company a nonexclusive franchise for the Operations Committee Minutes May 3, 2011 Page: 2 transportation of petroleum products within the City of Kent. R Harmon seconded the motion, which passed 3-0. 4. MOVE TO RECOMMEND COUNCIL AUTHORIZE THE MAYOR TO SIGN A CONTRACT WITH ALLIANCEONE RECEIVABLES MANAGEMENT, INC. TO PROVIDE DEBT COLLECTION SERVICES THROUGH THE STATE OF WASHINGTON CONTRACT FOR ALL ACCOUNTS REFERRED BY THE CITY EXCEPT THOSE ADMINISTERED BY THE MUNICIPAL COURT, SUBJECT TO FINAL CONTRACT TERMS AND CONDITIONS ACCEPTABLE TO THE CITY ATTORNEY. Finance Director Robert Nachlinger brought forth the collection agency contract with Allianceone Receivables. They are our current vendor and this is essentially an extension of their contract. They are the provider of collection services for the State of Washington as well as Municipal Courts in the state including Kent's Municipal Court. The Washington Purchasing Co-op allows us to piggy back on that contract and receive the same rates and discounts as the state and courts. The term of the City's existing contract with Allianceone Receivables Management, Inc (ARMI) expired on December 31, 2010, L Thomas questioned why If the contract expired December 31, 2010 it was not brought to Committee sooner. R Nachlinger responded that was due to a misread date. As of December 31, 2010 there were 115 accounts totaling $200,717 referred to ARMI for collection. As of December 31, 2010 the City had collected a total of $6,336, including the City's portion of interest totaling $78. L Thomas questioned how much this contract is costing the City to which R Nachlinger responded it is not costing anything, the City receives the full principal amount of the amount collected as well as 50% of the finance charges (12% per year) imposed by ARMI. R Harmon recommended Council authorize the Mayor to sign a contract with Allianceone Receivables Management, Inc. to provide debt collection services through the State of Washington contract for all accounts referred by the City except those administered by the Municipal Court, subject to final contract terms and conditions acceptable to the City Attorney. I Perry seconded the motion, which passed 3-0. S. SUMMARY FINANCIAL REPORT FOR MARCH 2011. (INFORMATION ONLY) Finance Director Robert Nachlinger provided the March 2011 financial summary. Looking at General Fund overall to be under in revenues by about 1.9% of budget. Sales tax is coming in over budget at about 2.4%. Utility Tax, some are doing very well and others not so well. The major detractor of the utility tax revenues is our new garbage contract. We had reduced rates substantially for our customers and that translates into a reduction in our utility tax on those services. R Harmon advised that he still has concerns in reference to the revenue side due to the fact that the year before last our building permits and plan check fees and the amount of work we had to do was under budget as far as revenue was concerned. Last year we continued to have uncollected revenues for both permits and plan check fees and now we're 2 1/2 years into the same pattern. R Marmon asked Chief Administrative Officer 1. Hodgson what plan Operations Committee Minutes May 3, 2011 Page: 3 is in place to address these issues in regard to FTEs and workloads. J Hodgson advised that he had asked Economic and Community Planning Director Fred 5atterstrom and Economic and Community Development Director Ben Wolters be present at today's meeting to address this issue. F Satterstrom advised that permitting in January and February started at a bit behind in terms of revenues not in terms of workload however. We are trending a higher number of permits over 2010 versus 2011, both in terms of permits issued and permits applied for. In March permitting revenues met the monthly projection and although not in this report, April was an outstanding month, in fact the best in 2 V-2 years in terms of building valuation, number of applications, permits issued, and revenue. Also, looking at what's in the pipeline, the pipeline being those permits that have been applied €or but not issued and in some sort of review. While we have been issuing permits and permits with valuation, $15 million in valuation alone in April, building valuation in the pipeline has been going up since beginning of the month, We will look at numbers again at end of April and May and expect revenues to look better. We do have a systematic flaw in the way we collect fees in that it does not necessarily cover cost of our work. B Wolters noted that staff is busy processing a variety of permits and responding to submittals on permits originally applied for 3-4 years ago that are now being picked back up by developers. In a lot of cases they have already paid for work anticipated. We have limited authority to charge additional hourly rate for work deemed to be above and beyond what was actually paid for. That is actually a substantial amount of ongoing work now, and in part, reflects a good chunk of where we are having the revenue shortfall, on the Development Engineering side. The existing permitting fee structure is outdated. It is based on an economic model that does not exist, one where large projects essentially pay for servicing small projects. As a department over the last 3 years we have reduced our workforce, even before the initial big city-wide layoffs. Staff was laid off prior to that due to lack of work. We are at a place now where if we cut our staffing level the result will be a reduction in service which will result in complaints. R Harmon stated that it is his assumption that this is not a department problem but a policy problem, we should be able to charge for work that we do. Council needs to look at that policy and address it to be able to make sure that we at least cover our costs for the expense to issue a permit. J Perry pointed out that a lot of this will be reveled through the strategic planning where one of the items identified is looking at our costs and making sure we are covered. J Perry questioned R Nachlinger regarding the projected ending fund balance at 4.5% which R Nachlinger indicated was correct. The meeting was adjourned at 4:30 p.m. by L Thomas. N n y Clary Operations CC11mittee Secre