Minutes - Council Work Session - 09/03/2019 - Special

Home

City Administrator Ulrich stated that building permit revenue has a lot of flux to it and asked the last time the City was significantly under the projected amount. Community Development Director Ulrich replied that 2011 was the last time the City came up short on its projection. He stated that his department has made corrections to the expense side of building in order to keep up with customer service. He noted that increased revenue projections equate to increased expenses as well. He advised that there are larger projects that come along with larger expenses. Finance Director Lund reviewed the excess revenue policy, noting that it is the direction of the Council that allocates those surplus funds. She explained that those funds are then used to avoid placing all costs on the taxes in the next year. She suggested leaving the building permit revenue amount the same and noted that any surplus amounts can be used to lower taxes the next year. Mayor LeTourneau agreed. He suggested that rather than focusing on what cannot be controlled, building permit revenue, the focus should be on what can be controlled which is the excess fund policy. He explained that the Council has the ability to decide how surplus funds are allocated. Councilmember Riley agreed. He stated that is what is being done in the 2020 budget to buy down the road debt. He stated that his only comment was that each year there has been a surplus and he would like to see less of a surplus and sharpen pencils a bit more. Councilmember Musgrove asked for details on the funds that receive allocations from surplus funds at the end of the year. Finance Director Lund provided additional details on the funds that receive allocations per the excess fund policy, the current balances of those funds, and proposed expenses for those funds. She noted that any Highway 10 expenses are funded through the PIR fund. Councilmember Menth asked what would happen if the City were to go negative. Finance Director Lund provided additional information. She noted that when the City obtains bonds, part of the rating is the amount of surplus funds the City has had in previous years. Mayor LeTourneau stated that the reserves and surplus is then a part of the bond rating of the City. Councilmember Menth asked for additional information on the bond rating and who does the rating. Finance Director Lund provided additional information the issuance of debt and the agencies that complete the rating. She noted that the higher rating the City receives, the less interest is paid. She noted that currently the City is at the second highest rating and in order to reach the next highest rating the community would need to be larger in population and more established. She believed that the AA rating began in 2001. City Council Special Work Session/September 3, 2019 Page 6of17