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HomeMy WebLinkAboutFinance July 25 2006WHATCOM COUNTY COUNCIL Finance and Administrative Services Committee July 25, 2006 Committee Chair Sam Crawford called the meeting to order at 11:00 a.m. in the Council Chambers, 311 Grand Avenue, Bellingham, Washington. Present: Absent: L. Ward Nelson None Carl Weimer Also Present: Laurie Caskey- Schreiber Dan McShane Barbara Brenner Seth Fleetwood COMMITTEE DISCUSSION AND RECOMMENDATION TO COUNCIL 1. ORDINANCE AMENDING THE 2006 WHATCOM COUNTY BUDGET, TENTH REQUEST, IN THE AMOUNT OF $2,941,729 (AB2006 -298) Dewey Desler, Deputy Administrator, stated most of the amendments relate to implementation of the jail. He read the list of requests. Because of the additional space and additional buildings, add to the capacity and support of custodial staff and maintenance staff. The final payment for the jail will be appropriated as well. In addition, there are also some flood projects on the list. Nelson moved to recommend approval to the full Council. Weimer asked if the jail project will be discussed later during the City /County investment program. He asked why the County is giving them $5 million in services for their $1 million. Desler stated there is a proposed loan from the general fund to the jail fund to make this appropriation happen. This item allows the County to complete payment for the cost of the jail. They propose to pay for it now, through a loan from the general fund, repaid with the City /County jail investment program. Cities will use their real estate excise tax (REET) funds. He doesn't have approval yet from all cities, but the approvals are coming. One or two cities may choose not to do this. The corrections tax will be used to support the city governments' contributions for misdemeanor offenses. Ultimately, they have to approve the budget. Nelson stated this is just a recommendation to the full Council. Motion carried unanimously. 2. ORDINANCE AUTHORIZING AN INTERFUND LOAN FOR INTERIM FINANCING OF THE WHATCOM COUNTY INTERIM JAIL AND ALTERNATIVE CORRECTIONS CENTER (AB2006 -299) Crawford moved to recommend approval to the full Council. Finance and Administrative Services Committee, 7/25/2006, Page 1 Motion carried unanimously. Dewey Desler, Deputy Administrator, stated that if the cities do not participate in this program with real estate excise tax (REET) funds, the County would repay from proceeds from the corrections tax, which they are projecting to use even more to support the cities' credits in the future. Nelson stated the cities have a choice in how to fund. The County gives them an opportunity to find other resources for the payments. Desler stated that is correct. The cities can use money now, returned to them at a much higher return rate, or they can pay for cost of service over time, based on ongoing revenues. 3. RESOLUTION REGARDING THE WESTERN HEMISPHERE TRAVEL INITIATIVE (AB2006 -304) Crawford stated the point is to express concern regarding the January 1, 2007 deadline requiring passports at all border crossings and support Business for Economic Security, Trade and Tourism (BESTT) to come up with alternatives. He moved to recommend approval to the full Council. Nelson stated a concern is how to address the federal level. Weimer asked what is an active campaign that the County will do. Crawford stated his interpretation of the action the Council will take is that the Council will mail this resolution. Ken Oplinger, BESTT Coalition, stated this is the same language used with other groups. He is open to suggestions for changes. The active campaign would be this resolution and the follow -up mailing. There will be direct impacts to local businesses. The business owners are here today to speak. Carole MacDonald, The Inn at Mount Baker and other associations, stated she is concerned about limitations of crossings at the border. She hears from Canadians that they are apprehensive about crossing the border. She gets calls from potential guests. Tourism really drives the businesses in her area. They are very concerned that crossing the borders be as simple as possible. Drew Schmidt, Victoria San Juan Cruises Owner, stated this initiative has already affected his business. International traffic has been down ten percent the last two years because of the passport confusion. He gets calls daily about it. Domestic traffic has been up. This is a very important issue to the local economy. Kathy Berg, 7585 Sterling Avenue, Birch Bay, stated the business of Birch Bay is tourism. In the year 2000 Census, 51 percent of housing was seasonally occupied. The Comprehensive Plan says Birch Bay should become a city some day. For every $1 a resident pays in property tax, residences require $1.28 in services. For every commercial business that pays $1 in tax, the business requires $.17 in services. It would be a good idea to have a healthy tourism economy going into Birch Bay. This will affect the number of Canadians who come down and use the properties they own or rent. Finance and Administrative Services Committee, 7/25/2006, Page 2 Oplinger stated he talked with Canadian officials about this initiative. The Canadian administration endorses the use of driver's licenses as identification. They were successful in getting a group of mayors in the Ontario /Michigan region that also support similar efforts. Nelson moved to amend, "Whatcom County Council respectfully requests...." In multiple locations in the resolution. Also, "Be it further resolved that the Council is extremely eenee . ed .."eut opposed to the erosion..." and the "Be It further resolved that the Council urges respectfully requests the United States Government...." Brenner stated she is opposed to "respectfully requests" concerning the federal government. It is their job. They got everyone into this mess. McShane stated he appreciates the language that was added. It reflects the concerns of the Council. He appreciates Mr. Oplinger's efforts on this issue. Motion to amend carried unanimously. Motion to approve as amended carried unanimously. COUNCIL "CONSENT AGENDA" ITEM 1. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO AWARD BID #06 -78 TO LOW BIDDER, IDENTIX, INC., FOR THE PURCHASE OF TWO LIVE SCAN FINGER PRINT UNITS, IN THE AMOUNT OF $65,547.30 (AB2006 -311) Nelson moved to recommend approval to the full Council. He asked how soon the County would start using DNA testing for identification processes. Wendy Jones, Chief of Corrections, stated they currently do DNA testing and collect DNA when allowed and required. The Identex fingerprinting system returns results within 20 minutes. It's a very good, stable system. The newer versions of the Indentex machines are very good about picking up the detail. The County uses fingerprints as definitive identification. The court and the State use DNA to build their DNA files. If the State legislature changes the regulation so they need to do a swab on everyone who comes in, the County will do that. Motion carried unanimously. 2. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO ENTER INTO A CONTRACT BETWEEN WHATCOM COUNTY AND KCM, INC. D /B /A TETRA TECH /KCM, INC. TO DEVELOP GIS ROUTINES TO AUTOMATE THE GENERATION OF ASSESSMENT ROLLS FOR THE VARIOUS SPECIAL DISTRICTS, INCLUDING SUBZONES, DIKING AND DRAINAGE DISTRICTS, IN THE AMOUNT OF $34,340 (AB2006 -312) Weimer moved to recommend approval to the full Council. Motion carried unanimously. 3. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO ENTER INTO A CONTRACT BETWEEN WHATCOM COUNTY AND KPFF CONSULTING ENGINEERS FOR THE DESIGN PHASE OF THE HAMPTON ROAD, MORMON Finance and Administrative Services Committee, 7/25/2006, Page 3 DITCH BRIDGE #261 REPLACEMENT PROJECT: CRP #904016, IN THE AMOUNT OF $395,250 (AB2006 -313) Nelson moved to recommend approval to the full Council. Motion carried unanimously. 4. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO ENTER INTO CONTRACT EXTENSION #3 BETWEEN WHATCOM COUNTY AND REISNER DISTRIBUTOR, INC., TO CONTINUE PROVIDING FOR THE PURCHASE AND DELIVERY OF FUEL FOR USE ON WHATCOM COUNTY EQUIPMENT AND VEHICLES FOR THE EXTENDED PERIOD SEPTEMBER 1, 2006 THROUGH AUGUST 31, 2007, IN AN AMOUNT NOT TO EXCEED $649,472.50, FOR A TOTAL AMENDED NOT TO EXCEED CONTRACT AMOUNT OF $1,783,633.60 (AB2006 -314) Crawford moved to recommend approval to the full Council. Nelson asked if the fuel prices are for diesel. Eric Schlehuber, Public Works Department, stated the increase for this round is a lower increase than the last year's renewal. There is still an increase. Nelson asked if $1.87 to $2.20 increase is the price per gallon. That seems cheap. Schlehuber stated that is the price, due to bulk purchasing. There is also a delivery fee. Nelson asked if there were other bidders. Schlehuber stated this is a contract renewal, so there were no other bidders. Next year, the administration will go out for bid. Dewey Desler, Deputy Administrator, stated the price per gallon doesn't include all the taxes. Motion carried unanimously. S. RESOLUTION OF THE COUNTY COUNCIL OF WHATCOM COUNTY, WASHINGTON, APPROVING, AS PLANNING JURISDICTION SOLELY FOR THE PURPOSES OF RCW 39.84.060, THE ISSUANCE OF NONRECOURSE REVENUE BONDS OF THE INDUSTRIAL DEVELOPMENT CORPORATION OF THE PORT OF BELLINGHAM, THE PROCEEDS OF WHICH WILL BE USED FOR INDUSTRIAL DEVELOPMENT FACILITIES WITHIN THE COUNTY BY WOOD STONE CORPORATION (AB2006 -315) Dodd Snodgrass, Port of Bellingham, stated they can issue tax exempt revenue bonds for qualified manufacturing process facilities. This is no commitment of tax funds or faith in credit of the Port or any other local government agency. The Wood Stone project is an expansion project at the airport industrial park. The Council committed $500,000 of the Economic Development Investment (EDI) program loan to complete the infrastructure. The industrial revenue bond issuance is for $3.4 million for Wood Stone to construct it's own facility. Today, this is a requirement for any issuances for the Planning Department, which supports the project, to endorse the project. Nelson asked if the previous loan has been repaid. Snodgrass stated they are in that process. The building should be complete within one year. Finance and Administrative Services Committee, 7/25/2006, Page 4 1 2 Nelson moved to recommend approval to the full Council. 3 4 Weimer stated the bond is for $8 million, but the building was $3.6 million. 5 Snodgrass stated companies ask for inducement resolutions that specify a maximum 6 amount of funds they could possibly use. When they issued the bond, the cost of the 7 project was $4 million, and they needed $3.4 million of bonds, which they secure through a 8 private finance agency. The $8 million is current. It is the maximum amount. The bond is 9 up to $8 million, but they don't get that if they don't need it. 10 11 Motion carried unanimously. 12 13 14 COMMITTEE DISCUSSION 15 16 1. DISCUSSION REGARDING CITY /COUNTY INVESTMENT PROGRAM (AB2006- 17 310) 18 19 Dewey Desler, Deputy Administrator, stated the administration is making progress 20 on the jail work center. They hope to have it done in the next couple of months. He 21 showed a presentation of the design, property location, and current progress (on file). 22 23 There were certain assumptions when they planned the building. He read the slide 24 on the operating cost assumptions and the city /county jail investment program. The plan 25 included three elements. The first element is to build an interim minimum security jail. The 26 second element is to use the money to build the interim minimum security jail. The third 27 element is to build a new, main jail. The cities wanted part of the tax to pay for their 28 increased costs to cover their misdemeanor offenders. The County government must pay 29 for all felons and all misdemeanants arrested by the sheriff and State. Cities must pay for 30 all their misdemeanants. They pay the cost of jailing those people. The cites may put those 31 people in another jail in another community. The County developed an interlocal agreement 32 for the cities to give the County the money to build a jail. At that time, cities' coffers were 33 growing with real estate excise tax (REET). Cities provide the County a capital payment. In 34 return, the County would use the money from corrections tax revenue to pay for a portion 35 of the cost of jailing the cities' offenders. This is an administrative proposal, not County 36 policy. County attorneys and State examiners say it is unusual, but is legal. No other 37 county that implemented a corrections tax has done this. He continued to read the 38 presentation on the city /council jail investment program and the use of the corrections sales 39 tax. The first column in the funding table is the amount of revenue they expect. Each 40 column after that is a deduction from or credit to the first column. In the years 2014 and 41 2015, the administration and Council will reset all the estimates and determine how to use 42 the revenue from the corrections tax, which can only be used to support adult and juvenile 43 corrections facilities. 44 45 Nelson asked if they would adjust the figures and timeframes if the sales tax 46 revenues generate more money. Desler stated that if the County receives additional 47 revenue, the money goes into a cumulative total to build the new jail. Or, the County may 48 use it to pay for other operating expenses. 49 50 Nelson asked if the revenue would go down, below projections. Desler stated they 51 estimate a five percent growth rate in sales tax over time. Sales tax has never has gone 52 down. If it does, it would adversely affect their ability to pay the bonding cost for the new 53 jail. Finance and Administrative Services Committee, 7/25/2006, Page 5 Nelson asked if they would change the bonding capacity or use another source. Desler stated they could use another fund source to pay for it. Crawford asked why the money would go down in 2011. Desler stated the County begins to pay for the new building in 2011. Crawford asked if the value of the interim jail would go to the new jail, so there could be a $40 million or $50 million project. Desler stated that is correct. (Clerk's Note: End of tape one, side A.) Desler stated this is their best guess based on estimates. Crawford asked about the Executive coming forward with ideas for properties. Desler stated the Council will see a multi -fund solution for the purchase of property, including the general fund, REET fund, and corrections tax. Property purchase is one small part of the entire cost. Crawford stated he didn't see any cost for property purchase scheduled. Desler stated they don't have a lot of money going into the fund because they are using it to pay for credits and the cost of the operation. Desler stated the cities will contribute an investment of $2.26 million. For that amount, the County would provide $6 million to the cities over the years. It is a cost increase factor of 2.7. The objective is to help the cities pay for their costs of misdemeanants. He has explained it to all the city councils. The City of Bellingham has approved an interlocal agreement for review. Nelson asked if there are restrictions on what the cities may use the funding mechanism. Desler stated the cities must use it on the credits against the cost of jail services, medical costs, and alternative corrections. Nelson asked if it can be used for triage and mental health. Desler stated it cannot. It can only be used for things allowed by law. He continued to read the presentation on the municipal breakdown and city portion of the shared tax. The credits are limited to eight yea rs. Nelson asked if the future cities of Birch Bay and Sudden Valley, if they are incorporated, would have to go through this process. Desler stated the administration has not built in any money for new cities, the tribes, or any other organizations that use the jail. This is an arrangement only offered to the existing cities. Nelson asked if the new cities would pay for their services. Desler stated they would. This credit covers about 50 percent of their existing bills to the County. Weimer stated the credit carries over from year to year, until the year 2014. It sounds like most are using this amount. Desler stated they are. Crawford stated it seems like there may be a sense of entitlement to the credits by 2014. Desler stated the agreement goes only to 2014. The administration is not trying to create a sense of entitlement. The County carries the entire load for the federal government. The proposed agreement is in the Council packet. Finance and Administrative Services Committee, 7/25/2006, Page 6 1 2 Nelson asked the administration to give this presentation at the general Council 3 meeting at the time the agreements come forward, so the public can see the proposed 4 agreements. 5 6 Weimer asked if the cities can choose to pay as they do now rather than getting the 7 credits. Desler stated they could. 8 9 Crawford stated that would be preferable to the County. The County is doing this to 10 help the cities. Desler stated that is correct. Last November, the voters approved a sales 11 tax increase, one -third to be used to support law and justice expenses. A portion went to 12 the cities and the rest to the County. There are additional resources from that. 13 14 Crawford stated the County did say it would develop this agreement, but he's not 15 sure why. He understands that the cities are generating the bulk of the sales tax, and 16 there's some sense of ownership. Desler stated the administration tries to build consensus 17 among interest groups as they build public policy and move forward new initiatives. When 18 they build plans for the future, they try to get the most number of people to support the 19 plans. That's what they did with emergency medical services as well as for the jail. They 20 have a clear plan for this, so the tax that went before the voters would be approved. The 21 tax request failed in 1996 because the small cities didn't like the plan. 22 23 Crawford stated there is a sense of obligation, based on the fact that the County 24 made a commitment to the countywide community. Desler stated that is correct. The 25 County laid this out as a concept before the election. They are not trying to hide anything. 26 The City /County investment program was reported by the newspaper as being illegal. After 27 that, the newspaper endorsed it. 28 29 2. DISCUSSION REGARDING BUDGET DEVELOPMENT GUIDELINES FOR 30 2007/2008(AB2006 -263A) 31 32 Dewey Desler, Deputy Administrator, stated he tried to incorporate the Council's 33 comments in a new version of the guidelines. 34 35 Weimer asked how new ideas and new initiatives end up in this document, when 36 they originate from the Council. Desler stated the administration will work on ideas based 37 on comments from the Council. The Executive will lay out ideas in the next few months, 38 and then present a budget proposal. If the Council wants something specific to happen, it 39 should be proposed through a resolution. 40 41 Nelson stated the administration has done much over the years to address new 42 concepts. The administration is proactive in solving problems. All departments, including 43 the Council, can go to the administration to work through these issues and find revenues 44 and solutions. The Council is always welcome to go to the administration. The Executive 45 and Council must work together as a team. The public is making increased demands upon 46 the County. The Council must identify processes that are fair to the public, administration, 47 and Council. The Council can design those types of structures. 48 49 McShane stated he is concerned about the second part of sentence two in item three 50 regarding staffing levels. Be consistent on additional services requests (ASR's) being well - 51 written to justify the requests. However, the phrase, "that is budget neutral or funded 52 through internal cost savings" is noble, but don't preclude those areas where they want to 53 increase staffing. It comes down to whether the staffing increase can be justified as Finance and Administrative Services Committee, 7/25/2006, Page 7 appropriate for the community as a whole. Putting that language in there may block the proposals they need. Crawford stated that in spite of adopting this policy, they've grown by over 200 employees since he's been on the Council. Desler stated their ability to carry employees over a long period of time is a concern. Skagit County is going to be cutting positions. County and city governments across the state have increased, and then they decrease the number of their staff. Whatcom County has not done that. The County has had hiring slowdowns in the past. The administration is trying to respond to issues of growth in this county. The County has to add capacity to properly respond to growth using fees, grants, federal appropriations, and taxing sources. However, the administration is reticent to add positions with the idea that they will have to lay them off in two years. That is not appropriate for anyone. The administration anticipates careful, modest expansion. From the department requests, the County will get more than a careful, modest expansion. The Council and Executive's responsibility is to find the balance of what the County can afford and what it needs to respond to demands in the long -term. McShane stated he has some concerns about staffing levels. By limiting staff at times, they end up having to contract out or hire consultants. Sometimes they get to the point where the local government's ability doesn't include the knowledge base needed to manage the consultants. Consulting is often a sleazy business and is amazingly expensive. Any expansion does need to be carefully thought out and justified. However, he's seen too many smaller governments turn to consultants to resolve issues that should have been resolved internally. Brenner stated the Public Works Department is one area when they have not been contracting out enough. The County's work is backed up because of it. They can't punish people because there is a problem in the Public Works Department. Developers who were willing to pay for consultants for the County have had their projects held up. The County can lose revenue by not taking advantage of that. There is a balance. She suggested a change in the language, "...through internal cost saving as much as possible...." It's a guideline, not a line they can't cross. Crawford stated members of the Council are saying that the Council is willing to consider expanding labor costs if it makes sense. Brenner asked when in the budget process should councilmembers bring forward specific requests to the budget. Desler stated it starts at the budget retreat, and can be brought forward at any time in the budget process. The administration has a discussion that is healthy, skeptical, and built into every proposal for using consultants. One is coming up in a couple of weeks. The administration has real debates about when to use staff, add staff, or use consultants. For this upcoming project, the most effective approach for the short-term is to use consultants. For longer - term commitments, the administration wants to avoid the use of consultants, who are expensive, often away from the community, and don't have as much commitment as employees. Caskey- Schreiber stated guideline eight should be amended, "...provide quality services in an efficient and cost effective manner." The Council desires to have a quality end - product. Desler stated the administration can make that change. Finance and Administrative Services Committee, 7/25/2006, Page 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 OTHER BUSINESS There was no other business. ADJOURN The meeting adjourned at 12:25 p.m. Jill Nixon, Minutes Tran cription ATTES; :��������tq,q��i ou, i 0M .� r34v -Tar�`, 66unciClerk �• �P� / 6' • co . �. ' . N'ASN• WHATCOM COUNTY COUNCIL WHATCOM COUNTY, WASHINGTON Crawford, Committee Chair Finance and Administrative Services Committee, 7/25/2006, Page 9