SULTAN CITY COUNCIL MEETING AGENDA
319 MAIN STREET
SPECIAL MEETING
December 6, 2006
6:30 PM Public Hearing - 2007 Budget
7:00 PM CALL TO ORDER - Pledge of Allegiance and Roll Call
COMMENTS FROM THE PUBLIC: Citizens are requested to keep comments to a 3 minute maximum to allow time for everyone to speak. It is also requested that you complete a comment form for further contact.
COUNCILMEMBER COMMENTS
ACTION ITEMS:
1) Ordinance 943-06 2007 Budget - 1st Reading
2) Ordinance 942-06 Capital Facility Plan - 1st Reading
3) Ordinance 944-06 Salary Schedule - 1st Reading
4) Ordinance 940-06 General Fund Contigency – 1st reading
5) Acceptance of the PWTF Loan for Sewer Plant Design
PUBLIC COMMENT ON AGENDA ITEMS ONLY
COUNCILMEMBER RESPONSE TO PUBLIC COMMENT ON AGENDA ITEMS
Adjournment - 10:00 PM or at the conclusion of Council business.
ADA NOTICE: City of Sultan Community Center is accessible. Accommodations for persons with disabilities will be provided upon request. Please make arrangements prior to the meeting by calling City Hall at 360-793-2231.
For additional information please contact the City at cityhall@ci.sultan.wa.us or visit our web site at www.ci.sultan.wa.us
SULTAN CITY COUNCIL
AGENDA ITEM COVER SHEET
DATE: December 6, 2006
ITEM #: Action A 1
SUBJECT: Ordinance 943-06 2007 Budget
CONTACT PERSON: Laura Koenig
SUMMARY: Ordinance 943-06 provides for the adoption of the 2007 fiscal year Budget. There are still three issue that need resolution prior to the final adoption.
1. Code Enforcement/Animal Control: Staff has recommended a $17,000 “placeholder” amount be provided in the 2007 budget for animal control and code enforcement and that staff return to the Council in early 2007 with a recommended program. The Council needs to approve the dollar amount for the budget.
2. Police Chief Salary: Information was provided to the Council at the budget hearings. The Mayor’s recommended salary increase of 20% has been incorporated into the budget.
3. Public Works Staffing: The anticipated building activity in early 2007 will require that the City add an additonal day to the garbage route. The budget reflects the addition of an employee in July 2007. The position will only be filled if the building activity occurs.
FISCAL IMPACT: The City anticipates there will be sufficient revenues to fund the proposed programs outlined in this staff report.
RECOMMENDED
MOTION: Introduction of Ordinance 943-06 for a first reading and pass on to second reading on December 14, 2006.
COUNCIL ACTION:
Attachments: Ordinance 943-06 and Detailed Budget
11/21/06 Memo to Council
CITY OF SULTAN
SULTAN, WASHINGTON
ORDINANCE NO. 943-06
AN ORDINANCE ADOPTING THE BUDGET FOR THE CITY
OF SULTAN WASHINGTON FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2007
WHEREAS, the Mayor of the City of Sultan, Washington, completed and placed on file with the City clerk a proposed budget and estimate of the amount of moneys required to meet the public expenses, bond retirement and interest, reserve funds and expenses of government of said City for the fiscal year ending December 31, 2007, and notice was published that the Council of said City would meet on December 14, 2006 for the purpose of making and adopting a budget for said fiscal year and giving taxpayers within the limits of said City an opportunity to be heard upon said budget; and
WHEREAS, the said City Council did meet at said time and did then consider the matter of said proposed budget; and
WHEREAS, the said proposed budget does not exceed the lawful limit of taxation allowed by law to be levied on the property within the City of Sultan for the purposes set forth in said budget, and the estimated expenditures set forth in said budget being all necessary to carry on the government of said City for said year and being sufficient to meet the various needs of the City during said period.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SULTAN DO ORDAIN as follows:
Section 1: The budget for the City of Sultan, Washington for the year 2007 is hereby adopted in its final form and content as set forth in the document entitled City of Sultan 2007 Budget, three (3) copies of which are on file in the office of the City Clerk.
Section 2: Estimated resources, including fund balances or working capital for each separate fund of the City of Sultan, and aggregate totals (net of transactions between funds) for all such funds combined, for the year 2007 are set forth in the summary form below, and are hereby appropriated for expenditures during the year 2007 as set forth below:
FUND DEPARTMENT AMOUNT
001 General Legislative $ 12,805
Executive 30,347
Finance/Adminstration 64,825
Grants 27,737 Legal 61,271
Civil Service 1,150
Other Governmental 57,803 Law Enforcement 1,030,725
Law Enforcement - Court 183,000 Emergency Services 1,200
Code Enforcement 17,000 Planning/Development 158,787
Building 131,049 Public Health 700
Library 97,209
Park/Recreation 84,712 Other Financing Uses 53,600
TOTAL GENERAL FUND $2,013,918
100 General Fund Contingency 71,685
101 Combined Street Funds 249,408
103 Cemetery Fund 28,128
104 General Equipment Reserve Fund 30,000
105 Park Improvement Project Fund 138,319
106 Police Equipment Reserve fund 16,540
107 Drug Enforcement Fund 650
108 Impact Fee Fund 321,953
109 Community Improvement Fund 1,500
110 Emergency Radio System Fund 310,230
203 General Obligation Bond Fund 120,470
205 Unlimited GO Bond Fund 31,815
207 LID Guaranty Fund 479,020
301 Capital Improvement Fund 166,830
303 Street Construction Fund 919,453
307 LID Project Fund 128,948
400 Water Utility Fund 693,824
401 Sewer Utility Fund 889,750
402 Garbage Utility Fund 589-258
403 Water/Sewer Bond Fund 125,960
405 Cumulative Reserve Utility Fund 811,490
407 Sewer System Improvement Fund 1,600,000
409 Water System Improvement Fund 895,000
412 Water Debt Service Fund 158,376
413 Sewer Debt Service Fund 250,491
621 Cemetery Trust 2,000
TOTAL ALL FUNDS $11,045,016
Section 3: The City Clerk is directed to transmit a certified copy of the budget hereby adopted to the Division of Municipal Corporations in the Office of the State Auditor and to the Association of Washington Cities.
Section 4: This ordinance is severable and if any portion of it shall be declared invalid or unconstitutional, the remaining portion shall remain valid and enforceable.
Section 5: This ordinance shall be in full force and effect five days after publication as required by law.
REGULARLY ADOPTED this 14th day of December, 2006.
Benjamin Tolson Mayor
Attest:
Laura J. Koenig, City Clerk
Approved as to form:
Thom Graafstra, City Attorney
SULTAN CITY COUNCIL
AGENDA ITEM COVER SHEET
ITEM NO: Action A2- Ordinance 942-06 Capitial Facility Plan Adopting an Amended Capital Facilities Element of the Comprehensive
Plan
DATE: December 6, 2006
SUBJECT: Ordinance 942-06 Adopting and Amending Capitial Facility Element of Comprehensive Plan Concurrently with the Adoption of City’s Budget for Fiscal Year 2007
CONTACT PERSON: Rick Cisar, Director of Community Development
Deborah Knight, City Administrator
SUMMARY:
The Planning Board has conducted several meetings and participated in a combined public hearing with the City Council to consider an amended and updated Capital Facilities Element (Plan) prepared by Mr. Reid Shockey of Shockey Brent Inc. The plan, presented to City Council this evening, incoporates the amendments as reviewed by Mr. Shockey at the Council’s combined Public Hearing with the Planning Board on November 21, 2006.
The Planning Board conviened on November 28, 2006 to consider the comments received at their previous meetings and the combined Public Hearing in order to prepare a formal recommendation to the City Council . It should be noted, due to the enclement weather, three members of the Planning Board were present at the November 28, 2006 meeting: Vice Chair George Schmidt, and Board members Sarah Davenport Smith and Jeff Cofer. Following Board discussion the Planning Board by a 3 to 0 vote recommended adoption of the 2007-2012 Capital Facility Plan with the following amendments:
· The Planning Board discussed two alternative definitions: $5,000/5 years and $10,000/10 years.
· A five thousand dollar investment represents a relatively minor expenditure of city funds in the big picture. Setting the limit at $10,000 would represent a true capital investment.
· After careful consideration, the Board recommends that the City define a capital improvement as a major capital investment that has a useful life of 5 or more years. Five years can be a significant amount of time depending on the type of expenditure. In this case, making an investment last 10 years seemed too restrictive.
· The Board also discussed including repairs and maintenance in the definition of a capital facilities. The board recommends not including repairs and maintenance at this time since repairs and maintenance of existing assets are funded from general fund revenues and funding for the capital budget is limited.
A capital facility improvement represents a major capital investment in a city asset, which is not a repair or maintenance item, with a value of at least $10,000 that has a useful life of 5 or more years.
· The General Sewer Plan identifies extensions to the wastewater collection system that will be needed to serve the presently defined urban growth area within the next 20 years.
· The sewer extensions are part of the City’s public improvements and should be included in the Capital Facilities Plan. The sewer extensions are assumed to be developer funded.
· The Water System Plan prioritized identified City improvements for implementation over a six-year period (2005-2010). The Plan also identified capital improvements planned for beyond 2010. Operating revenues, facility charges and reserves will pay for funding water improvements as outlined in the Plan.
· A number of additional water facilities will be required to extend water service to new developments. These improvements are anticipated to be totally funded by developers and the benefiting property owners.
Planning Board Recommendation
· Incorporate projects in Table 7-1General Sewer Plan (May 2006)
· Incorporate projects in Tables 8-1 and 8-2 Water System Plan (December 2005). Use the financing plan as described in Tables 9-5.
The Planning Board also made the following recommendations.
· This project is scheduled to begin in 2007, and was overlooked in the initial draft of the CFP.
· The 6th Street water line and the River Crossing would be delayed into 2008 to fund the reservoir project.
· The Public Works Complex is described on page 20 of the CFP. The text should clarify the purpose for the $400,000 proposed expenditure.
5. Ensure the Fire District CFP and Sultan School District CFP are consistent with the City CFP.
· The Growth Management Act requires the City to coordinate with outside agencies that deliver services to the City of Sultan to ensure consistency between plans.
· Staff has reviewed available plans for consistency.
6. Address County-wide planning policies in a matrix or document text
7. Note where the project estimates are coming from (e.g. 2004 CFP) and clarify any growth estimates for future years.
8. Describe Level of Service standard deficiencies
FISCAL IMPACT: Staff, Planning Board and Consultant time in preparing and processing the amended CFP and ordinance.
ACTION REQUESTED: Motion to introduce Ordinance Number 942-06 Amending and Updating the Capital Facilities Element of the Comprehensive Plan on first reading and passing it on to second reading.
_____________________________________________________________________
COUNCIL ACTION:
DATE:
CITY OF SULTAN
ORDINANCE NO. 942-06
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SULTAN, WASHINGTON ADOPTING AN AMENDED AND UPDATED CAPITAL FACILITIES ELEMENT OF THE CITY’S COMPREHENSIVE PLAN CONCURRENTLY WITH THE ADOPTION OF THE CITY’S BUDGET FOR FISCAL YEAR 2007
Whereas in Fallgatter/Kirkman v. City of Sultan, GMHB Case No. 06-3-0003, the Central Puget Sound Growth Management Hearings Board entered an Order determining that certain actions must be taken by the City of Sultan;
Whereas adoption of an amended and updated Capital Facilities Element of the Comprehensive Plan is an essential step in achieving compliance with the Board’s Order;
Whereas the following actions have been taken to insure effective public notice and public input concerning the amended and updated Capital Facilities Element of the City’s Comprehensive Plan:
1. The City prepared a revised draft Capital Facilities Plan.
2. The City prepared a SEPA checklist for the 2007-2012 Capital Facilities Plan (CFP) on October 15, 2006.
3. The SEPA Official issued a Determination of Nonsignificance. Number (DNS) 06-016 on October 17, 2006 for the 2007-2012 CFP
4. The SEPA Checklist, DNS 06-016, and the Capital Facilities Plan were sent to reviewing agencies and provided at City Hall for Public Review on October 15, 2006.
5. DNS 06-016 was published in the Everett Herald on October 17, 2006.
6. DNS 06-016 was posted on the City Web Site, at City Hall and at the Post Office, and sent to all Parties of interest on October 17, 2006.
7. A draft of the Capital Facility Plan was sent to the Department of Community, Trade and Economic Development (CTED) on October 12, 2006.
8. CTED acknowledged receipt of the Draft Capital Facility plan on October 13, 2006.
9. The complete draft of the Capital Facility Plan was posted on the City Web site for Public Review and comment on November 3, 2006.
10. Copies of the Draft Capital Facilities Plan were placed at City Hall and in the Sultan Branch of the Sno-Isle Public Library for public review.
11. The Planning Board on October 17, 2006 conducted their first review of the Draft Capital Facilities Plan and invited public comments during their discussion. Notice of the Board’s meeting was posted on the City’s Web site, at City Hall and sent to all parties of interest. It was noted at this meeting the Board would continue their review of the CFP at their next meeting on November 14, 2006.
12. The Planning Board on November 14, 2006 reviewed the Draft Capital Facilities Plan and proposed changes that had been suggested based on the Board’s and Public comments received at the previous meeting. Notice of the meeting was posted on the City Web site, at City Hall, on all City Utility Bills and sent to all parties of interest.
13. The City Council and Planning Board on November 21, 2006, conducted a combined Public Hearing to consider the 2007-2012 Capital Facilities plan. Notice of the Public Hearing was published in the Everett Herald newspaper, posted at City Hall and at the Post Office, on the City Web site, on all City Utility Bills and sent to all parties of interest.
14. The Planning Board conducted a regular meeting on November 28, 2006 to consider the revised Draft Capital Facilities Plan based on the comments received at the combined Public Hearing. Notice of the meeting was posted on the City Web Site, at City Hall and sent to all parties of interest. The Planning Board allowed additional public comment during their review of the amended CFP.
15. The Planning Board, on November 28, 2006, after considering public comments received at their public meetings and the combined Public Hearing testimony, and considering staff and consultant comments, recommended approval of the 2007-2012 Capital Facility Plan to the City Council.
Whereas it is in the City’s best interest to adopt an amended and updated Capital Facilities Element of the City’s Comprehensive Plan and the 2007-2012 Capital Facilities Plan as recommended by the Planning Board concurrently with the City’s adoption of its annual budget for Fiscal Year 2007;
NOW, THEREFORE, IT IS HEREBY ORDAINED by the City Council of the City of Sultan, Washington:
Section 1. Appendix D to the City of Sultan Comprehensive Plan adopted November 22, 2004, entitled 6-Year CFP, City of Sultan Capital Facilities Plan is hereby repealed, and a new Appendix D, dated December 14, 2006, entitled 6-Year CFP, 2007-2012 City of Sultan Capital Facilities Plan, a copy of which is attached to this Ordinance, and a copy of which will be maintained by the City Clerk in the official records of the City, is hereby adopted as the Capital Facilities Element of the City’s Comprehensive Plan adopted and dated December 14, 2006 and as the Capital Facilities Plan of the City for 2007-2012.
Section 2. At the discretion of the City Clerk, the City Clerk is hereby authorized to publish a summary of this ordinance.
Section 3. This ordinance shall become effective five (5) days after its publication, or after publication of a summary of the Ordinance.
PASSED by the City Council and APPROVED by the Mayor this _____ day of ______________, 2006.
CITY OF SULTAN
By____________________________
BEN TOLSON, Mayor
ATTEST:
By__________________________________
LAURA KOENIG, City Clerk
Approved as to form:
By___________________________________
THOM H. GRAAFSTRA, City Attorney
Date of Publication:
SULTAN CITY COUNCIL
AGENDA ITEM COVER SHEET
DATE: December 6, 2006
ITEM #: Action A 3
SUBJECT: Ordinance 944-06 Salary Schedule
CONTACT PERSON: Laura Koenig
SUMMARY: RCW 35A.33.050 requires that salaries be made a part of the annual budget document and adopted with the annual budget. Ordinance 944-06 sets the salaries for non-represented employees for the 2007 fiscal year. To be consistent with the current Union Contracts, a 4.2% increase was budgeted for non-represented employees as recommended by Council.
Union represented employees wages and benefits are in accordance with the current contracts.
FISCAL IMPACT: Included in the 2007 Budget
RECOMMENDED MOTION:
Introduction of Ordinance 944-06 for a first reading and pass on to a second reading on December 14, 2006
COUNCIL ACTION:
DATE:
CITY OF SULTAN
ORDINANCE NO. 944-06
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SULTAN WASHINGTON ESTABLISHIG SALARY RATES FOR NON-REPRESENTED PERSONNEL
WHEREAS, RCW 35A.33.050 requires that salary ranges for various positions in the City be made a part of the annual budget document adopted with the annual budget, and
WHEREAS, the City Council has determined it appropriate to adjust salary ranges for non-represented employees in order to permit salary increases along with approval of benefits,
NOW, THEREFORE, be it ordained by the City Council of the City of Sultan, Washington as follows:
Section 1 Salaries. As part of the City’s annual budget, salaries for non-represented employees are hereby approved as follows:
Police Chief $6,853 monthly
Director of Community Development $6,512 monthly
Finance Director $5,834 monthly
Public Works Director $5,267 monthly
City Clerk/Deputy Finance Officer $5,243 monthly
Building Official $4,584 monthly
Administrative Manager (Police) $ 23.85 hourly
Grants/Economic Dev. Coordinator $ 23.85 hourly
Section 2 Contract Employees. The salary range for a permanent full time City Administrator shall be $7,291 monthly. The City Engineer salary for 2007 shall be $41.16 per hour.
Section 3 Union Employees. Wages and benefits for Union represented employees shall be in accordance with the current Union contracts, the salary scales for which are attached to this Ordinance.
Section 4 Effective Date of Increase: The amendments to the annual salaries provided for in this ordinance shall become effective with the first payroll in 2007.
Section 5 Repealer: Any and all other ordinances or parts of ordinances of the City of Sultan inconsistent with the provisions of this ordinance are hereby repealed to the extent of such inconsistency.
Section 6 Severability: If any section of this ordinance, or if any subsection or part shall be declared unlawful, the balance of this ordinance and of each section shall remain in full force and effect.
Section 7 Effective Date: This Ordinance shall be in full force and effect five days after publication as required by law.
PASSED by the City Council and APPROVED by the Mayor this 14th day of December, 2006.
By____________________________
BEN TOLSON, Mayor
ATTEST:
By__________________________________
LAURA KOENIG, City Clerk
Approved as to form:
By___________________________________
THOM H. GRAAFSTRA, City Attorney Date of Publication:
SULTAN CITY COUNCIL
AGENDA ITEM COVER SHEET
DATE: December 6, 2006
ITEM #: Action A 4
SUBJECT: Ordinance 940-06 General Fund Contingency and Reserve Funds
CONTACT PERSON: Laura Koenig, City Clerk
Deborah Knight, City Administrator
SUMMARY:
Attached is Ordinance 940-06 which establishes a General Fund Contingency and General Fund Reserve Fund.
General Fund Contingency
This fund is restricted by law to thirty seven and ½ cents (37.5 cents) per thousand of assessed property valuation for the City. The target and legal maximum for 2007 is $150,701.
Gordan Hey, Interim Finance Director, forecasts the City’s legal limit will increase to $200,000 in two years as a result of increases in the City’s assesed property tax values. The Council should note, that property tax revenue will not increase as a result of the growth in assessed valuation as property taxes are limited to a 1% incremental growth per year.
The current balance in the General Fund Contingency is $148,013. The City will need to transfer some of these funds, by budget amendment on December 14, 2006, to cover unanticipated overtime costs in 2006 due to injuries in the Police Department and research involved in disclosure of public doucments through the City Clerk and City Attorney’s office. The ending fund balance is anticipated to be approximately, $50,000.
The proposed Ordinance sets the ceiling at $200,000 but does not allow the City to exceed the legal limit set out in RCW 35A.33.120. All resources above $250,000, generated by the Retail Sales Tax will be deposited first to the Contingency Fund. There should be significant cash carried forward to 2007 as well as additional accurals thoughout 2007 to fully fund the contingency fund to the legal maximum amounts ($150,701) by the end of the year.
The Council has the option to amend the ordinance to follow the parameters of RCW 35A.33.120, which limits the dollar amount to ½ cents (37.5 cents) per thousand of assessed property valuation ($150,701) for the City, or allow the $200,000 as set forth in the attached adopting ordinance.
The use of the general fund contingency will require authorization by resolution or ordinance.
General Fund Reserve
This fund is desgined to meet extraordinary costs caused by events of cataclysmic nature – economic, natural or cirminal acts beyond the control of the council, mayor and executive management of the City. Optimally, the fund should have enough money to sustain public safety activities for at least ninety days.
Withdraw requries a declaration of an emergency by the Mayor subject to Council approval by resolution or ordinance.
All resources above $250,000 generated by the Retail Sales Tax will be deposited first into the Contingency Fund until it reaches the legal maximum. After the Contingency Fund has reached its limit, all additional Retail Sales Tax proceeds will be contributed to the General Fund Reserve to an amount equal to the greater of 25% of annual General Fund revenues or $500,000.
General Fund Revenues in the recommended 2007 budget are equal to $2,149,429.
Although debt reduction is not a part of Ordinance 940-06, Gordon Hey recommends using any remaining Retail Sales Tax proceeds to reduce debt.
FISCAL IMPACT:
The long range plan is to build a $200,000 contingency reserve and a $500,000 general fund reserve. Setting aside moneys for reserves will return the General Fund back to a financially healthy state allowing the City to operating in a proactive rather than a reactive state.
RECOMMENDED ACTION:
Gordon Hey and staff recommend the passage of this ordinance as a signficant step forward in insuring the fiscal health of the City of Sultan.
MOTION:
Move to introduce Ordinance 940-06 for a first reading and pass on to a second reading.
COUNCIL ACTION:
DATE:
CITY OF SULTAN
ORDINANCE NO. 940-06
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SULTAN AMENDING CHAPTER 3.48 SULTAN MUNICIPAL CODE BY ADDING AN ARTICLE III, CONSISTING OF SECTIONS 3.48.070, 3.48.080, AND 3.48.090 AND ESTABLISHING IN THE CITY’S GENERAL FUND SUB-FUNDS DENOMINATED AS A CONTINGENCY FUND AND A RESERVE GENERAL FUND
IT IS HEREBY ORDAINED by the City Council of the City of Sultan, Washington as follows:
Section 1. Sultan Municipal Code Chapter 3.48 is hereby amended to add an Article III reading as follows:
3.48.070 General Fund
3.48.080 Contingency Fund
3.48.090 Reserve General Fund
3.48.070 General Fund. There is hereby established the general fund of the City. Except where otherwise designated, or otherwise required by the provisions of law, all funds of the city shall be deposited into the general fund of the City.
3.48.080 Contingency Fund. There is hereby established in the General Fund a sub-fund entitled the Contingency Fund. For audit purposes the fund shall be numbered Fund 100. Until a total amount equal to the greater of 10% of annual General Fund revenues or $200,000 is accumulated in the fund, monies shall be deposited to the fund on a periodic basis from the City’s retail sales tax revenues when annual proceeds from that tax exceed $250,000. The previous year’s balance in the fund shall become the beginning fund balance in the next annual budget for this sub-fund. Subject to any hearing required by law, amendment of the City’s budget as required by law, and compliance with RCW 35A.44.146, monies in the contingency fund shall be used by the City to meet unanticipated revenue short falls or unanticipated expenditures during the City’s fiscal year. At no time shall the fund balance exceed the legal limit set forth in RCW 35A.33.145.
3.48.090 Reserve General Fund. There is hereby established in the General Fund a sub-fund entitled the Reserve General Fund. For audit purposes the fund shall be numbered Fund 150. After annual revenues from the City’s retail sales tax exceed $250,000, and after the City’s Contingency fund has been fully funded, remaining excess revenues from the City’s retail sales tax shall be accumulated in this sub-fund until an amount equal to the greater of 25% of annual General Fund revenues or $500,000 is in the fund. The previous year’s balance in the fund shall become the beginning fund balance in the next annual budget for this sub-fund. Subject to any hearing required by law, and amendment of the City’s budget as required by law, and any required compliance with RCW 35A.33.145, monies in the Reserve General Fund shall be used to meet costs associated with emergent and cataclysmic events after a declaration of emergency promulgated by the Mayor. The sum of the monies in this fund and in the Contingency Fund shall not exceed the legal limit set in RCW 35 A.33.145.
Section 2. This ordinance shall become effective five days after publication as required by law.
PASSED by the City Council and APPROVED by the Mayor this _____ day of ______________, 2006.
CITY OF SULTAN
By____________________________
BEN TOLSON, Mayor
ATTEST:
By__________________________________
LAURA KOENIG, City Clerk
Approved as to form:
By___________________________________
THOM H. GRAAFSTRA, City Attorney
Date of Publication:
SULTAN CITY COUNCIL
AGENDA ITEM COVER SHEET
Date: December 6, 2006
Agenda Item #: Action A 5
SUBJECT: Acceptance of the Public Works Trust Fund (PWTF) Pre Construction Loan offer
CONTACT PERSON: Donna Murphy Grants and Economic Development
Deborah Knight, City Administrator
SUMMARY STATEMENT:
The Washington State Public Works Board has offered the City of Sultan a $1 million dollar pre-construction low interest loan for design of the Waste Water Treatment Facility. At the September 27, 2006 Council meeting, Interim Finance Director, Gordon Hey, recommended a repayment plan of this loan be provided to Council. This report describes the City’s financial obligations for the loan repayment and proposed revenue sources.
FISCAL IMPACTS:
At the September 28, 2006 Council meeting, the City Council approved a 2% interest Public Works Trust Fund (PWTF) loan with a 5% match over 5 years. The City’s match is $50,000 and will be paid from a combination of connection fees and private development funds.
This is a five-year loan with interest only due in 2007. On the current work schedule, the City will have completed the loan draws by 2008 and will need to make Principal and Interest payments on the loan.
The City must pay on the loan after the first “draw” of funds. The maximum withdrawl is 75% of the loan or $750,000. Payments are made annually. The first payment is an interest only payment and is due on June 1, 2007. The second payment is a principal and interest payment due on June 1, 2008.
The City may convert to a ½% loan when the project is closed out. The loan can be converted to a 20-year loan after the project goes to bid. Converting to a 20-year loan will reduce the City’s annual loan payments.
The total cost for the design phase is $1.8 million. To date the City has $1 million in secured PWTF loan money and will need to secure an addional $800,000 to complete the design. At the current connection fee rate, that equates to 88 new connections.
|
|
Pament Date |
Payment Description |
Payment |
Repayment Source |
City Match |
At project close-out |
5% |
$50,000 |
Utility Reserve Funds |
|
First Payment Due |
June1, 2007 |
Interest Only (Based on the amount that has been drawn) Up to $750,000 |
Up to $15,000 |
1) New Connection Fees 2) % of Developer Contracts - The City is currently finalizing the Developer Contracts to mitigate the total cost of the Waste Water Treatment Plant. |
|
Second Payment Due |
June 1, 2008 |
Principle & Interest payment on $1,000,000 |
$270,000 |
1) New Connection Fees 2) % of Developer Contracts - The City is currently finalizing the Developer Contracts to mitigate the total cost of the Waste Water Treatment Plant. |
The following is an estimated amortization schedule for the loan:
|
Year |
Loan |
Principal |
Interest |
Total |
|
07 |
$750,000.00 |
|
$15,000.00 |
$15,000.00 |
|
08 |
$1,000,000.00 |
$250,000.00 |
$20,000.00 |
$270,000.00 |
|
09 |
$750,000.00 |
$250,000.00 |
$15,000.00 |
$265,000.00 |
|
10 |
$500,000.00 |
$250,000.00 |
$10,000.00 |
$260,000.00 |
|
11 |
$250,000.00 |
$250,000.00 |
$5,000.00 |
$255,000.00 |
ANALYSIS: The Waste Water Treatment Plant is the limiting factor for the future economic growth of the City of Sultan. Flows and loads are approaching the capacity of the existing system. The General Sewer Plan (May 2006) estimates the treatment facility will reach the 85% capacity about 2009 and 100% capacity about 2012. Since design, permitting and construction will take at least three years, the process of adding capaicty wil need to start about 2008. The PWTF loan will fund the design phase.
RECOMMENDATION: Accept the Public Works Trust Fund Low Interest Pre Construction Loan Contract, and authorize Mayor Tolson to sign the contract on behalf of the City of Sultan.
MOTION: I authorize Mayor Tolson to sign the Public Works Trust Fund Pre-Construction Loan Contract.
ATTACHMENTS: 1. Minutes of the September 28, 2006 meeting.
2. Copy of the PWTF Scope of Work