Volume #1

Mayor and Councilmembers, staff have received a number of questions this week regarding the budget and the upcoming City Council meeting. I have amassed the first tranche below with answers in red and will provide the next group once answers are compiled.

Tim

Q: The police car washes at Brown Bear seems excessive. At 30 per month it’s about $21.80 per month. A Beary Clean wash is $12.99 each.  How many washes are there per month and how many cars are there in the fleet? July invoice attached. We have 52 police vehicles and we pay $6 per wash.

Q: When we talk about different “pots” of money and how we are responding only to the GF in budget discussions . . .

Q: What if SWM had $100M in it – could we still have red in our future? Yes. Enterprise funds like the Marina and SWM can’t support the general government.

Q: If the GF goes severely under, but all other restricted funds are doing fine, can we still go into receivership? Yes.

Q: Also, if SWM has about $30M in it right now, how much of this is available to use? People (other comments we’ve heard) seem to be thinking SWM has $30M – $35M in cash which is actually the net postion. The net position reflects the value of the SWM infrastructure in the city (underground pipes, facilities etc.). It does not reflect dollars in the bank. SWM has a little under $11M currently on hand. Once the Capital Improvements Plan is complete this month, we’d have a better idea of how much is unallocated. But the amount available for the GF to use is zero.

Q: We were considering “borrowing” from SWM last year.  How much would be available to borrow this year (if we thought it could pencil a difference)?

Funds from the Marina or SWM can’t be permanently diverted to support the general government. However, they can loan money to the General Fund if interest is charged and there is a defined repayment plan no longer than three years. The risk is that if the City were to continue to spend more in the general fund than it takes in, the general fund would be in a difficult cash position and possibly unable to repay the loan. If that were to happen, the loan proceeds would be considered funds that were permanently diverted from a utility to the general government which is illegal.

Q: I think people are having trouble seeing that our projections just apply to the GF.  And, I may still not understand this very well.

Q: And, speaking of SWM – I do have a question about how it went from about $8M to about $28M in one year.

This is from CM Harris:

(Look at the 2023 budget amendment highlighted in yellow. The SWM Fund magically shifts from $7,160,142 and the $28,918,432 despite only a $200,000 adjustment.) This is explained as a ‘change in presentation.)

The difference between the $7,160,142 and the $28,918,432 of net position is the portion called “Net Invested in Capital Assets”. The 2023 budget originally only reflected the unrestricted portion of the net position and not the amount invested in capital assets. However, when doing the 2023 budget amendments we decided to have the ordinance reflect the entire net position in order to give the complete picture of the utility.

This was a change in presentation. The first column is required to tie to the budget and the prior budget ordinance; therefore, the amount of $7,160,142 has to be listed in that column.

Volume #2

Mayor and Councilmembers,

Below please find installment 2 of City Council questions. I believe this is the final installment so if you have additional questions that haven’t been addressed please let me know,

Tim

Q:  I would like to see a break down of the SWM fund showing balances that are uncommitted, eg. to the 6-year CIP, short term expenses, etc.

SWM Capital commitments per the 2024- 2029 CIP to be funded by unrestricted net position above:

Q: ARPA: Can you break down the cost of the Crime Analyst vs. the Mental Health Support specialist?

Crime Analyst: $114,742 annually (salary and benefits excluding overtime)

Crisis Response Specialist: $103,947 annually (salary and benefits)

Q: What is the current balance of the Lodging Tax Fund. Fund balance as of 9/10/24 is $135,826.

Q: Can you provide other examples of expenses paid from the Lodging Tax Fund. 4^th of July entertainment (drone show), marketing expenses from RTA, website updates.

Q: From what fund is Cheryl Swab’s contract coming from? General Fund.

Q: How long is Ms. Swab expected to remain on contract. ie. when is the ‘grant writing’ complete? Her contract expires on October 31, 2024 and will not be extended.

Q: What are the projects she is currently engaged in or expected to be engaged in going forward? She is engaged on finalizing the documentation to receive the $150k grant for the ferry demand study/economic analysis as well as the roughly $1M grant for electrification at the Marina. Both grants have been awarded but she is now helping with the necessary support and detail to get final contracts prepared for City Council review.

• • In short, we are paying Ms. Swab to help write the grants for:

1. 1. • The ferry electric battery in front of the fishing pier
      • The ‘demand study’ to tell us if a ferry is a good idea.
      • Her contract is being paid out of the General Fund.

Re: Arts Commission appointments

Q: Who is currently serving on the Arts Commission? Alana Roper, Benji Pierson, Soon to be: Nick Fannin, Theresa Jewell.

Q: Who is the person moving outside the City who intends to remain on the Arts Commission and does that person, coupled with one of the nominees fill all of the slots permitted to be held by residents living outside the city? She moved out of the City and resigned from the Arts Commission, but is volunteering to organize Squid-A-Rama and help out as needed. She does not fill a slot on the Committee.

Q: How are we advertising for these positions and what is our progress towards posting the names and terms of board members on the City website? Advertising on our website and intermittently on social media/City Manager weekly reports, also word of mouth. A list was provided to IT and we are waiting on the info to be posted to the website.

Q: What is the source for funding for the Arts Commission and how large is the Commission’s budget. General fund with some ARPA over the last several years. Roughly 50k per year.

Q: Is any of the funding for City sponsored events coming out of the General Fund? Yes.

Q: Do any of the Arts Commission’s activities involve funding from the Lodging Tax? No.

Q: Who currently serves on the Lodging Tax Advisory Committee? Currently we only have 2 members (1 citizen and 1 Council rep) but we anticipate appointing 3 new members shortly to fill the Committee.

Q: How much money is collected annually via the Lodging Tax and which Des Moines businesses contribute to that fund? Only hotels/motels contribute. Around 115k a year is collected now but that number is steadily increasing as travel increases post COVID.

Q: Is it possible to list the membership of the Lodging Tax Advisory Committee on the City website? Yes.

Re: Passenger Ferry

Q: Why is the proposed funding for the Ferry Consultant coming out the Lodging Tax and not considered administrative costs within the $160,000 federal grant administered through the Department of Commerce? It is not an applicable expenditure under the grant.

Q: Will this funding impact the amount of dollars available for the Arts Commission? No.

Q: Is the $160,000 grant the same or a separate grant from the previously announced grant with the Department of Commerce? Same. However, the amount was increased by about 55k to expand the scope of the study.

Q: The narrative mentions a vacant Economic Development Consultant position. Is it the intention of this contract to expand Peter Philips’ duties beyond the scope of the passenger ferry to economic development throughout the city? Peter’s scope of work is attached to the contract in the packet and it is remaining the same as it previously was. In relation to Peter’s work on facilitating passenger ferry service, he has attended a number of meetings on behalf of the City where the ferry is a small portion of the meeting. During the remainder he has advocated for various City projects. With Peter’s contacts and his knowledge of the City, a secondary benefit to his contract has been promotion of the City at large. With Michael off the books as of July 1, we currently have no one doing Economic Development work so that has been a positive of having Peter. It’s not a permanent fix however.

Q: Does Mr. Philips still serve on the Lodging Tax Advisory Board and, if not, when did he leave? He is no longer on the Committee. He resigned prior to any decisions being made on using lodging tax to fund his contract as that would be a conflict of interest. (Mr. Philips was listed as a member of the Lodging Tax Advisory Board as of December 15, 2023.)

Q: Does Mr. Philips remain as the sole proprietor of Salish Crossings Northwest, which has proposed development of a passenger ferry terminal in downtown Seattle? (Yes) I believe this was addressed in his previous presentation to the Council and follow up email the Mayor sent recently. But Mr. Philips will be at the meeting on Thursday if you would like to ask him again. I am not aware of all of the details of his various professional ventures related to ferry service.

Q: Is Colibri NW the owner of the ferry conference coming up in Seattle later this month and is one of the major sponsors of that conference a company in the process of building a prototype of an electric ferry being considered for possible routes on Puget Sound? Same answer as above. (Yes)

Q: Does Mr. Philips have any connection with any Seattle Downtown waterfront development associations? Same answer as above. (Yes)

Q: Since the amount of the proposed ferry consultant contract is within the City Manager’s discretion, why is the contract coming before the Council? If the reason is for transparency, why was this put on the Consent Calendar? The original contract plus the amendment are over 50k combined which is why it is being brought to Council for consideration. It was put on consent because it is a straight-forward contract that does not require a staff presentation. If Councilmembers have questions or are opposed, they can pull the contract to address their concerns.