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HomeMy WebLinkAbout05-05-2014Police Week City of Arlington WHEREAS, the Congress and President of the United States have designated May 15 as Peace Officers Memorial Day, and the week in which it falls as Police Week; and WHEREAS, the members of the law enforcement agency of Arlington play an essential role in safeguarding the rights and freedoms of the citizens of Arlington; and WHEREAS, it is important that all citizens know and understand the problems, duties and responsibilities of their police department, and that members of our police department recognize their duty to serve the people by safeguarding life and property, by protecting them against violence or disorder, and by protecting the innocent against deception and the weak against oppression or intimidation; and WHEREAS, the police department of Arlington has grown to be a modern and scientific law enforcement agency which unceasingly provides a vital public service; NOW, THEREFORE, I, Mayor Barbara Tolbert, call upon all citizens of Arlington and upon all patriotic, civil, and educational organizations to observe the week of May 11 through 17, 2014, as Police Week with appropriate ceremonies in which all of our people may join in commemorating police officers, past and present, who by their faithful and loyal devotion to their responsibilities have rendered a dedicated service to their communities and, in doing so, have established for themselves an enviable and enduring reputation for preserving the rights and security of all citizens. I FURTHER call upon all citizens of Arlington to observe Thursday, May 15, 2014, as Peace Officers Memorial Day in honor of those peace officers who, through their courageous deeds, have lost their lives or have become disabled in the performance of duty. Signed this 5th day of May, 2014 ______________________________ Barb Tolbert, Mayor DRAFT Page 1 of 3 Council Chambers 110 East Third April 21, 2014 City Council Members Present by Roll Call: Dick Butner, Jan Schuette, Marilyn Oertle, Chris Raezer, Debora Nelson, Jesica Stickles, and Randy Tendering Council Members Absent: None City Staff Present: Allen Johnson, Kristin Banfield, Paul Ellis, Bill Blake, Jim Chase, Jim Kelly, Bruce Stedman, Nelson Beazley, Wayne Mitchell, Chris Dickison, Brandon Asher, Cary Stuart, Gary Carver, Conner Chess, Cody Chester, Anthony Lopez, Bryce Lyshol, Mike Gilbert, Ronnie Johnstone, Stephanie Ambrose, Anthony Davis, Police Dog Baylee, Rory Bolter, Kay Schander, Jonathan Ventura, Molly Ingram, Mark Wilde, Deana Dean, and Steve Peiffle – City Attorney Also Known to be Present: Sarah Cone, Mike Hopson, Katie & Stan Stevens and family, and Sarah Arney Mayor Tolbert called the meeting to order at 7:00 p.m. and the pledge of allegiance followed. APPROVAL OF THE AGENDA Chris Raezer moved to approve the Agenda. Marilyn Oertle seconded the motion which passed with a unanimous vote. INTRODUCTIONS OF SPECIAL GUESTS AND PRESENTATIONS Councilmember Stickles recognized the work done by public safety during the Oso Mudslide event and presented an artist’s rendition of the lone tree standing. Chief Stedman accepted the artwork and spoke on behalf of the Fire Department. PROCLAMATIONS None PUBLIC COMMENT None CONSENT AGENDA Chris Raezer moved and Marilyn Oertle seconded the motion to approve the Consent Agenda which was unanimously carried to approve the following Consent Agenda items: 1. Minutes of the March 3 and 10, 2014 Council meetings 2. Accounts Payable: EFT Payments & Claims Checks #81625 through #81733 dated April 8, 2014 through April 21, 2014 in the amount of $885,642.04. Minutes of the Arlington City Council Meeting Minutes of the City of Arlington City Council Meeting April 21, 2014 Page 2 of 3 PUBLIC HEARING Resolution authorizing surplus of Bystrom House, Burn Road Reservoir, and Utilities equipment and vehicles Public hearing opened at 7:05 pm. No members of the audience wished to speak on this matter. Questions by Councilmember Oertle with explanation provided by Public Works Director Jim Kelly. Public hearing closed at 7:07 pm. NEW BUSINESS PARC Appointment Sarah Cone Assistant City Administrator Kristin Banfield spoke to Council regarding the recommendation to appoint Sarah Cone to the Parks, Arts and Recreation Commission Marilyn Oertle moved and Debora Nelson seconded the motion to approve the PARC commission recommendation and consent to the Mayor’s appointment of Ms. Cone to the PARC commission. The motion was approved by a unanimous vote. Resolution to Surplus Police Dog “Baylee” to handler, Anthony Davis Police Chief Nelson Beazley addressed the proposed resolution declaring police dog “Baylee” as surplus and authorizing her disposition to her handler, Anthony Davis. Anthony Davis spoke regarding Baylee and her retirement. Jesica Stickles moved and Chris Raezer seconded the motion to approve the proposed resolution acknowledging the service of police dog “Baylee,” declaring her as surplus, and authorizing her disposition to her handler. The motion was approved by a unanimous vote. PERS Enrollment for Medics City Attorney Steve Peiffle spoke to the request to approve the proposal from City employees and others who served as EMS providers prior to the City taking over the EMS system in 1999. Council comments and questions followed. Jesica Stickles moved and Randy Tendering seconded the motion that the Mayor be authorized to submit the proposed letter to DRS upon receipt of the signed agreements from all affected employees/others. The motion was approved by a unanimous vote. Surplus of Ambulance Fire Chief Bruce Stedman spoke to the proposed resolution to surplus the 1999 ambulance to Fire District #25 (Oso) who will then donate their 1999 Ford aid car/ambulance to the City of Arlington to replace the 1987 Support 46 unit. The Support 46 unit will then be donated to the Nick of Time Foundation. Jesica Stickles moved and Chris Raezer seconded the motion to approve the proposed resolution to surplus the 1999 Ford reserve/back-up ambulance to Fire District 25 in exchange for their 1999 Ford ambulance, and surplusing of the 1987 Support 46 Unit to the Nick of Time Foundation, a nonprofit entity. The motion was approved by a unanimous vote. Minutes of the City of Arlington City Council Meeting April 21, 2014 Page 3 of 3 Professional Services Agreement (PSA) with RH2 Engineering, Inc. for Water and Sewer Comprehensive Plans Jim Kelly spoke to the proposed professional services agreement. Questions by Councilmembers Stickles and Raezer. Dick Butner moved and Marilyn Oertle seconded the motion to approve the Professional Services Agreement with RH2 Engineering Inc, and authorize the Mayor to sign the agreement, pending final review by the City Attorney. The motion was approved by a unanimous vote. Authority to Bid Prairie Creek Drainage Improvement Project – Phase 2A Jim Kelly spoke to the request to authorize staff to advertise construction of the Prairie Creek Drainage Improvements – Phase 2A project. Questions by Councilmembers Raezer and Butner. Dick Butner moved and Marilyn Oertle seconded the motion to authorize the staff to bid the Prairie Creek Drainage Improvement Project, Phase 2A, and pending final review by the City Attorney. The motion was approved by a unanimous vote. Resolution authorizing Haller Grant Application submittal Bill Blake spoke to the resolution authorizing the Haller Grant Application. Questions by Councilmember Schuette. Marilyn Oertle moved and Randy Tendering seconded the motion to authorize the Mayor to sign the authorizing resolution required by the Recreation and Conservation Office application process. The motion was approved by a unanimous vote. ADMINISTRATOR & STAFF REPORTS City Administrator Allen Johnson discussed the invoice received from the SCC. He also announced Dale Carman’s resignation effective April 25, 2014 indicating Dale and his family are relocating to New Jersey. Lastly, Allen discussed the upcoming presidential visit. COUNCIL MEMBER REPORTS and MAYOR’S REPORT Randy Tendering, Jesica Stickles, Debora Nelson, Chris Raezer, Marilyn Oertle, Jan Schuette, and Dick Butner gave brief reports. Mayor Tolbert commented on communications during the SR530 slide, spoke regarding the Disaster Recovery Centers, and indicated that the city has a team for Relay for Life. EXECUTIVE SESSION Counsel Peiffle announced there would be no need for an Executive Session. ADJOURNMENT With no further business to come before the Council, the meeting was adjourned at 8:01 pm. ____________________________ Barbara Tolbert, Mayor DRAFT Page 1 of 2 Council Chambers 110 East Third Street April 28, 2014 Councilmembers Present: Dick Butner, Randy Tendering, Debora Nelson, Marilyn Oertle, Chris Raezer, Jan Schuette, and Jesica Stickles Staff Present: Allen Johnson, Kristin Banfield, Jim Chase, Jim Kelly, Eric Scott, Kris Wallace, Roxanne Guenzler, and City Attorney Steve Peiffle. Council Members Absent: None Also Known to be Present: Sarah Arney, Maxine Jenft and Mike Hopson Mayor Tolbert called the meeting to order at 7:00 p.m. Chris Raezer moved to approve the agenda; Marilyn Oertle seconded the motion, which passed with a unanimous vote. WORKSHOP ITEMS ~ NO ACTION WAS TAKEN Authority to Advertise for BGIS of 2014 Utility Improvement Project Public Works Director Jim Kelly and City Engineer Eric Scott spoke to the proposed 2014 Utility Improvement Project. Request was made by Mayor Tolbert to breakout the funding sources for the next meeting. Staff will recommend Council grant authority to bid the project at the May 5th Council meeting. Mr. Kelly and Mr. Scott answered council questions throughout the presentation. Community Transit Art Interlocal Assistant City Administrator Kristin Banfield spoke to the proposed Interlocal with Community Transit for a piece of art for the new Community Transit Transfer station in Smokey Point. Concerns were brought forward regarding who is responsible for maintenance costs and insurance of the art piece. Kristin answered council questions throughout the presentation. Spur/Extension of Centennial Trail to Stanwood City Administrator Allen Johnson addressed the proposed draft letter of interest regarding the extension of the Centennial Trail to Stanwood. Council comments and questions followed. Reappointment of Members to City Boards/Commissions Kristin Banfield addressed the recommendation to reappoint several citizens to Boards and Commissions. Council comments and questions followed. Updated Financial Policies Finance Director Jim Chase and Kristin Banfield spoke to the revised City Financial Policies. Council comments and questions followed. Minutes of the Arlington City Council Workshop Minutes of the City of Arlington City Council Workshop DRAFT April 28, 2014 Page 2 of 2 Authorization to Participate in the Local Government Investment Pool Jim Chase spoke to the authorization to participate in the Local Government Invest Pool. Jim answered council questions following the discussion. Resolution for Repayment of Interfund Loans to the EMS Fund Jim Chase spoke to the Short Term Interfund Loans to the Emergency Medical Services Fund. Mr. Chase is requesting repayment of the loan on May 31st instead of April 30th. Jim answered council questions throughout the discussion. 1st Quarter Financial Report Jim Chase presented the 1st Quarter Financial Report via PowerPoint. Council questions and comments were made throughout the presentation. Miscellaneous Council Items Councilmember Tendering apprised the council that Kent Prairie Elementary and Post Middle School were presented with a humanitarian award for their efforts during the Oso slide. Public Comment Joanne Van Leuven - 3321 173rd Pl NE, Arlington WA commented on the illegal dumping and homeless people frequenting the vacant lot between Smokey Point Motor Inn and her place of business. Executive Session None The meeting was adjourned at 8:18 p.m. ____________________________ Barbara Tolbert, Mayor City of Arlington Council Agenda Bill Item: NB #1 Attachment C COUNCIL MEETING DATE: May 5, 2014 SUBJECT: Recommendation to reappoint the following citizens to Boards & Commissions: Vicki Hadley (Planning), Mike Hopson (Airport), Ruth Gonzales (Airport), Steve Peterson (Civil Service), Charles Van Pelt (Library), Bob Leonard (PARC), Allen Ice (Cemetery), Leilani Lucrisia (Cemetery), Mary Ann Monty (Lodging Tax) ATTACHMENTS: None DEPARTMENT OF ORIGIN Administration EXPENDITURES REQUESTED: -0- BUDGET CATEGORY: LEGAL REVIEW: DESCRIPTION: The Council is asked to accept the reappointment of the following citizens for service on a City Board or Commission. Reappointment: Vicki Hadley (Planning Commisison) – new term will expire 4/1/2020 Mike Hopson (Airport) – new term will expire 4/1/2017 Ruth Gonzales (Airport) – new term will expire 4/1/2017 Steve Peterson (Civil Service) – new term will expire 4/1/2020 Charles Van Pelt (Library) – new term will expire 4/1/2019 Bob Leonard (PARC) – new term will expire 4/1/2018 Allen Ice (Cemetery) – new term will expire 4/1/2018 Leilani Lucrisia (Cemetery) – new term will expire 4/1/2018 Mary Ann Monty (Lodging Tax) – new term will expire 4/1/2016 HISTORY: The current terms for these positions expired April 1, 2014. ALTERNATIVES Deny recommendation. RECOMMENDED MOTION: I move to re-appoint Mike Hopson and Ruth Gonzales to the Airport Commission, and to authorize the Mayor to re-appoint all of the other Board and Commission members as presented. City of Arlington Council Agenda Bill Item: WS #2 Attachment D COUNCIL MEETING DATE: May 5, 2014 SUBJECT: Resolution Authorizing Surplus of Utility Property and Equipment as Surplus (Bystrom House, Burn Road Reservoir and misc. utilities equipment and vehicles) ATTACHMENTS: Resolution declaring utility property as surplus DEPARTMENT OF ORIGIN Public Works EXPENDITURES REQUESTED: None BUDGET CATEGORY: N/A LEGAL REVIEW: DESCRIPTION: Staff is requesting that Council approve a resolution declaring the Burn Road Reservoir, Bystrom house and outbuilding, and miscellaneous vehicles and equipment as surplus. HISTORY: State law requires that a public hearing be held prior to the surplus of “land, property, or equipment originally acquired for public utility purposes” (RCW 35.94.040). At the April 21, 2014 Council meeting a public hearing was conducted to solicit public discussion and input regarding proposed action of declaring the Burn Road Reservoir, Bystrom house and outbuilding, and miscellaneous vehicles and equipment as surplus. No comments were received from the public and staff is requesting that Council declare the Burn Road Reservoir, Bystrom house and outbuilding, and miscellaneous vehicles and equipment as surplus. ALTERNATIVES - Do not surplus equipment - Remand to staff for further consideration RECOMMENDED MOTION: I move to approve the proposed resolution declaring the Bystrom house and outbuilding, the Burn Road Reservoir and certain vehicles and equipment as surplus and authorize staff to dispose of the surplused vehicles and equipment at market rates. RESOLUTION NO. 2014-XXX 1 RESOLUTION NO. 2014-XXX A RESOLUTION OF THE CITY OF ARLINGTON DECLARING CERTAIN UTILITY PROPERTY AS SURPLUS AND AUTHORIZING ITS SALE WHEREAS, the City has purchased the vehicles, equipment and improvements to real property listed on the attached Exhibit “A”; and WHEREAS, the items identified on Exhibit “A” are surplus to the needs of the City; and WHEREAS, the City conducted a public hearing on April 21, 2014 and thereafter determined approval of this resolution was in the best interests of the City and citizens; NOW, THEREFORE, the City of Arlington, acting by and through its City Council, does hereby resolve as follows: 1. The equipment/property described on the attached Exhibit “A” is declared surplus to the needs of the City. 2. Staff is instructed to trade in all items for the best available price, sell all items for the best available price or properly dispose of items that it is unable to sell. Staff is further authorized to dispose of the property via an intergovernmental transfer pursuant to RCW 39.33.010. Passed by the City Council of the City of Arlington at a regular meeting on this 5th day of May, 2014. ________________________________ Barbara Tolbert Mayor ATTEST: ___________________________ Kristin Banfield, City Clerk APPROVED AS TO FORM: ___________________________ Steven J. Peiffle, City Attorney RESOLUTION NO. 2014-XXX 2 EXHIBIT A City of Arlington Council Agenda Bill Item: NB #3 Attachment E COUNCIL MEETING DATE: May 5, 2014 SUBJECT: Authority to bid 2014 Utility Improvement Project ATTACHMENTS: - Project vicinity Map - 90% Construction Cost Estimate DEPARTMENT OF ORIGIN Public Works – Jim Kelly / Eric Scott EXPENDITURES REQUESTED: $ 888,396.11 BUDGET CATEGORY: Water Capital: $355,464.70 Sewer Capital: $299,770.42 Storm Capital: $196,620.39 TBD Funds: $ 60,000.00 (to be approved by TBD Board) LEGAL REVIEW: DESCRIPTION: Staff is requesting authority to advertise construction of the 2014 Utility Improvement Project for public bid. The project will encompass utility replacement and extensions in multiple locations throughout the City. To obtain the best bid pricing, the City has packaged the individual utility improvements into one bid package. The project will include the following improvements: • Extend the 24” sewer main in 67th Ave from 204th St to NW Hardwoods • Completion of 12” sewer main in 172nd St from west of SR-9 round-about to 85th Ave. • Replacement of 4” AC water main in Gilman Ave and Alcazar Ave. with a 12” water main • Replace an undersized storm drain in Talcott St, Gilman Ave, and Alcazar Ave. • Asphalt reconstruction on Gilman St and Alcazar St. (pending funding approval by the TBD) The breakdown of estimated expenditures is as follows: DESCRIPTION (CONTINUED): ALTERNATIVES - Remand to staff for additional information - Table pending additional discussion RECOMMENDED MOTION: I move to grant staff the authority to go to bid on the 2014 Utility Improvement Project, pending final review by the City Attorney. 4/30/2014 Bid Schedule A - Roadway City of Arlington 2014 Utility Improvements 229,036.50$ Item No.DESCRIPTION WSDOT Standard Item No. WSDOT Spec Ref Sect Approx. Quantity UNIT Unit Price Total Price PREPARATION 101 MOBILIZATION/DEMOBILZATION 0001 1-09.7 1 L.S. $ 20,000.00 20,000.00$ 102 PULVERIZE AND COMPACT BITUMINOUS PAVEMENT --SP 6447 S.Y. $ 1.50 9,670.50$ 103 REMOVING CEMENT CONC. CURB AND GUTTER 0108 SP 20 L.F. $ 10.00 200.00$ 104 REMOVING CEMENT CONC. SIDEWALK 0100 SP 8 S.Y. $ 20.00 160.00$ 105 REMOVING ASPHALT CONC. PAVEMENT 0120 SP 800 S.Y. $ 7.00 5,600.00$ 106 REMOVING CEMENT CONCRETE DRIVEWAY --SP 40 S.Y. $ 20.00 800.00$ EROSION CONTROL AND ROADSIDE RESTORATION 107 INLET PROTECTION 6471 8-01.5 10 EACH $ 50.00 500.00$ SURFACING 108 CRUSHED SURFACING BASE COURSE 5100 4-04 75 TON $ 20.00 1,492.00$ 109 CRUSHED SURFACING TOP COURSE 5120 4-04 175 TON $ 35.00 6,107.50$ HOT MIX ASPHALT 110 HMA CL. 1/2 IN. PG 64-22 5767 5-04 876 TON $ 80.00 70,080.00$ 111 LONGITUDINAL JOINT SEAL 6514 5-04 1490 L.F. $ 3.00 4,470.00$ TRAFFIC 112 PROJECT TEMPORARY TRAFFIC CONTROL 6971 1-10.5 1 L.S. $ 15,000.00 15,000.00$ 113 CEMENT CONC. TRAFFIC CURB AND GUTTER 6700 8-04 30 L.F. $ 15.00 450.00$ 114 PAINTED WIDE LANE LINE 6827 8-22 1483 L.F. $ 0.50 741.50$ 115 PLASTIC CROSSWALK LINE 6857 8-22 50 S.F. $ 6.50 325.00$ 116 PLASTIC STOP LINE 6859 8-22.5 24 L.F. $ 10.00 240.00$ OTHER 117 MONUMENT CASE AND COVER 7045 8-13.5 3 EACH $ 500.00 1,500.00$ 118 CEMENT CONC. DRIVEWAY ENTRANCE TYPE 4 7059 8-06 40 S.Y. $ 35.00 1,400.00$ 119 CEMENT CONC. CURB RAMP TYPE A PERPENDICULAR 7058 8-14.5 1 EACH $ 1,300.00 1,300.00$ 120 CEMENT CONC. SIDEWALK 7055 8-14.5 10 S.Y. $ 50.00 500.00$ 121 TRIMMING AND CLEANUP 7490 2-11.5 1 L.S. $ 5,000.00 5,000.00$ 122 UNFORSEEN CONDITIONS FORCE ACCOUNT 7715 1-09.6 75,000 EST. $ 1.00 75,000.00$ 123 SPCC PLAN 7736 1-07.15(1)1 L.S. $ 500.00 500.00$ 124 RECORD DRAWINGS (min Bid $2,000) --1-05, SP 1 L.S. $ 8,000.00 8,000.00$ Subtototal 229,036.50$ TOTAL 229,036.50$ Blank = Shared Expense Gilman Alcazar Improvements 172nd Sewer 67th Sewer 4/30/2014 Bid Schedule B - Utilities City of Arlington 2014 Utility Improvements 682,819.01$ Item No.DESCRIPTION WSDOT Standard Item No. WSDOT Spec Ref Sect Approx. Quantity UNIT Unit Price Total Price PREPARATION 201 MOBILIZATION/DEMOBILZATION 0001 1-09.7 1 L.S. $ 60,000.00 60,000.00$ 202 REMOVING MANHOLE -- 7 EACH $ 1,500.00 10,500.00$ 203 REMOVAL AND DISPOSAL OF ASBESTOS MATERIAL 0250 GSP 650 L.F. $ 28.00 18,200.00$ 204 REMOVING STORM DRAIN PIPE -- 1302 EACH $ 8.00 10,416.00$ WATER LINES 205 HYDRANT ASSEMBLY 3846 7-14.5 2 EACH $ 3,500.00 7,000.00$ 206 DUCTILE IRON PIPE FOR WATER MAIN 8 IN. DIAM. 3867 7-09.5 500 L.F. $ 55.00 27,500.00$ 207 DUCTILE IRON PIPE FOR WATER MAIN 12 IN. DIAM. 3869 7-09.5 1500 L.F. $ 60.00 90,000.00$ 208 GATE VALVE 6 IN.6155 7-12.5 3 EACH $ 700.00 2,100.00$ 209 GATE VALVE 8 IN.6160 7-12.5 10 EACH $ 850.00 8,500.00$ 210 GATE VALVE 12 IN.6165 7-12.5 10 EACH $ 1,500.00 15,000.00$ 211 BUTTERFLY VALVE 12 IN.3820 7-12.5 4 EACH $ 1,500.00 6,000.00$ 212 COMB. AIR RELEASE/AIR VACUUM VALVE ASSEMBLY 2 IN. 3837 7-12.5 1 EACH $ 2,000.00 2,000.00$ 213 SERVICE CONNECTION 1 IN. DIAM. (LONG SIDE)3858 7-15.5 15 EACH $ 3,000.00 45,000.00$ 214 SERVICE CONNECTION 1 IN. DIAM. (SHORT SIDE)3858 7-15.5 10 EACH $ 2,500.00 25,000.00$ 215 SERVICE CONNECTION 1-1/2 IN. DIAM.--7-12.5 1 EACH $ 3,200.00 3,200.00$ 216 8-IN PIPE FITTINGS --SP 8 EACH $ 300.00 2,400.00$ 217 12-IN PIPE FITTINGS --SP 8 EACH $ 350.00 2,800.00$ STORM SEWER 218 CONNECTION TO DRAINAGE STRUCTURE 9605 7-05.5 6 EACH $ 2,000.00 12,000.00$ 219 CORRUGATED POLYETHYLENE STORM SEWER PIPE 6 IN. DIAM.--7-17.5 44 L.F. $ 30.00 1,320.00$ 220 CORRUGATED POLYETHYLENE STORM SEWER PIPE 8 IN. DIAM.--7-17.5 38 L.F. $ 35.00 1,330.00$ 221 CORRUGATED POLYETHYLENE STORM SEWER PIPE 10 IN. DIAM.--7-17.5 5 L.F. $ 45.00 225.00$ 222 CORRUGATED POLYETHYLENE STORM SEWER PIPE 18 IN. DIAM.3607 7-17.5 175 L.F. $ 60.00 10,500.00$ 223 CORRUGATED POLYETHYLENE STORM SEWER PIPE 24 IN. DIAM.3608 7-17.3(2)1040 L.F. $ 115.00 119,600.00$ 224 CATCH BASIN TYPE 1L 3091 2 EACH $ 2,000.00 4,000.00$ 225 MANHOLE 48 IN. DIAM. TYPE 1 7360 7-05 4 EACH $ 3,000.00 12,000.00$ 226 MANHOLE 54 IN. DIAM. TYPE 1 7363 7-05 2 EACH $ 3,500.00 7,000.00$ SANITARY SEWER 227 CONNECTION TO DRAINAGE STRUCTURE 9605 7-05.5 2 EACH $ 500.00 1,000.00$ 228 CONNECTION TO EXIST SIDE SEWER --SP 3 EACH $ 500.00 1,500.00$ 229 PVC SANITARY SEWER PIPE 6 IN. DIAM. 3766 7-17.5 15 L.F. $ 30.00 450.00$ 230 C-900 SANITARY SEWER PIPE 12 IN. DIAM.--7-17.5 130 L.F. $ 58.00 7,540.00$ 231 PVC SANITARY SEWER PIPE 12 IN. DIAM. 3769 7-17.5 258 L.F. $ 45.00 11,610.00$ 232 DUCTILE IRON SEWER PIPE 24 IN. DIAM. 3776 7-17.5 220 L.F. $ 165.00 36,300.00$ 233 PVC SANITARY SEWER PIPE 24 IN. DIAM.--7-17.5 400 L.F. $ 100.00 40,000.00$ 234 MANHOLE 54 IN. DIAM. TYPE 1 7363 7-05 3 EACH $ 3,500.00 10,500.00$ 235 MANHOLE 72 IN. DIAM. TYPE 1 7365 7-05 1 EACH $ 6,000.00 6,000.00$ Blank = Shared Expense Gilman Alcazar Improvements 172nd Sewer 67th Sewer 4/30/2014 Bid Schedule B - Utilities City of Arlington 2014 Utility Improvements 682,819.01$ Item No.DESCRIPTION WSDOT Standard Item No. WSDOT Spec Ref Sect Approx. Quantity UNIT Unit Price Total Price Blank = Shared Expense Gilman Alcazar Improvements 172nd Sewer 67th Sewer OTHER 236 SHORING OR EXTRA EXCAVATION CLASS B 7008 2-09.5 1 L.S. $ 3,000.00 3,000.00$ 237 ADJUST MANHOLE 3080 7-05.5 7 EACH $ 300.00 2,100.00$ 238 ADJUST WATER VALVE BOX 6243 7-12.5 20 EACH $ 200.00 4,000.00$ Subtototal 627,591.00$ 8.8% Sales Tax 55,228.01$ TOTAL 682,819.01$ 4/30/2014 Bid Schedule C - Add Alternate 1 Roadway City of Arlington 2014 Utility Improvements 36,400.00$ Item No.DESCRIPTION WSDOT Standard Item No. WSDOT Spec Ref Sect Approx. Quantity UNIT Unit Price Total Price PREPARATION 301 PULVERIZE AND COMPACT BITUMINOUS PAVEMENT --SP 2400 S.Y. $ 1.50 3,600.00$ HOT MIX ASPHALT 302 HMA CL. 1/2 IN. PG 64-22 5767 5-04 410 TON $ 80.00 32,800.00$ Subtototal 36,400.00$ TOTAL 36,400.00$ Blank = Shared Expense Gilman Alcazar Improvements 172nd Sewer 67th Sewer 4/30/2014 Bid Schedule D - Add Alternate 1 Utilities City of Arlington 2014 Utility Improvements 79,244.48$ Item No.DESCRIPTION WSDOT Standard Item No. WSDOT Spec Ref Sect Approx. Quantity UNIT Unit Price Total Price PREPARATION 401 REMOVING MANHOLE -- 2 EACH $ 1,500.00 3,000.00$ 402 REMOVING STORM DRAIN PIPE -- 520 EACH $ 8.00 4,160.00$ STORM SEWER 403 CONNECTION TO DRAINAGE STRUCTURE 9605 7-05.5 4 EACH $ 2,000.00 8,000.00$ 404 CORRUGATED POLYETHYLENE STORM SEWER PIPE 6 IN. DIAM.--7-17.5 106 L.F. $ 30.00 3,180.00$ 405 CORRUGATED POLYETHYLENE STORM SEWER PIPE 8 IN. DIAM.--7-17.5 27 L.F. $ 35.00 945.00$ 406 CORRUGATED POLYETHYLENE STORM SEWER PIPE 10 IN. DIAM.--7-17.5 70 L.F. $ 45.00 3,150.00$ 407 CORRUGATED POLYETHYLENE STORM SEWER PIPE 18 IN. DIAM.3607 7-17.5 525 L.F. $ 60.00 31,500.00$ 408 CATCH BASIN TYPE 1L 3091 1 EACH $ 2,000.00 2,000.00$ 409 MANHOLE 48 IN. DIAM. TYPE 1 7360 7-05 2 EACH $ 3,000.00 6,000.00$ 410 MANHOLE 54 IN. DIAM. TYPE 1 7363 7-05 2 EACH $ 3,500.00 7,000.00$ OTHER 411 SHORING OR EXTRA EXCAVATION CLASS B 7008 2-09.5 1 L.S. $ 1,000.00 1,000.00$ 412 ADJUST MANHOLE 3080 7-05.5 3 EACH $ 300.00 900.00$ 413 ADJUST WATER VALVE BOX 6243 7-12.5 10 EACH $ 200.00 2,000.00$ Subtototal 72,835.00$ 8.8% Sales Tax 6,409.48$ TOTAL 79,244.48$ Blank = Shared Expense Gilman Alcazar Improvements 172nd Sewer 67th Sewer City of Arlington Council Agenda Bill Item: NB #4 Attachment F COUNCIL MEETING DATE: May 5, 2014 SUBJECT: Resolution to adopt the revised City Financial Policies (including purchasing and capital asset policies) ATTACHMENTS: Revised City Financial Policies DEPARTMENT OF ORIGIN Finance – Jim Chase / Administration – Allen Johnson, Kristin Banfield EXPENDITURES REQUESTED: -0- BUDGET CATEGORY: N/A LEGAL REVIEW: DESCRIPTION: Periodically, staff reviews our adopted Financial Policies to ensure that they are kept up to date and include all the essential elements. The attached revised set of policies include updated language, the inclusion of the previously adopted City purchasing policy, and new sections on capital assets and cash management. As requested by the Council, staff has revised the language on page 6 to better reflect the current practice of the city on deposits. HISTORY: The City initially adopted the Financial Policies in 2005. These policies were revised in February 2011. This is the second set of revisions to the policies. ALTERNATIVES Informational Item – discussion only. RECOMMENDED MOTION: I move to approve the proposed resolution adopting the revised City financial policies. RESOLUTION 2014-xxx RESOLUTION NO. 2014—xxx A RESOLUTION OF THE CITY OF ARLINGTON REPLACING RESOLUTION NO. 2011-002 AND ADOPTING REVISED FINANCIAL POLICIES FOR THE CITY WHEREAS, the National Advisory Council on State and Local Budgeting Practices recommends budget practices, including the development of a series of financial policies; and WHEREAS the Arlington City Council has reviewed and deliberated on the recommended revisions to the financial policies and finds that it is in the best interest of the city to adopt financial policies; NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF ARLINGTON: Section 1. The “Financial Management Policies” dated May 5, 2014 are hereby adopted as the financial policies and practices of the City. The City Council further encourages the Mayor to utilize such policies in preparation of the budget. Section 2. This resolution shall take effect immediately upon passage thereof. APPROVED by the Mayor and City Council of the City of Arlington this 5th day of May, 2014. CITY OF ARLINGTON ___________________________ Barbara Tolbert Mayor ATTEST: _________________________________ Kristin Banfield City Clerk APPROVED AS TO FORM: __________________________________ Steven J. Peiffle City Attorney 1 City of Arlington Adopted 2/7/20115/5/2014 Financial Management Policies 1 Table of Contents OPERATING POLICIES Purpose, objectives……………………………………………………………4 Reserve Fund Policies…………………………………………………………5 Revenue Policies………………………………………………………………6 Expenditure Policies Policies...…………………………………………………………7 Accounting and Financial Reporting……………………………….…………8 Budget Policies…………………………………………………………………9 Capital Assets……………………………………………………………………xx Purchasing……………………………………………………………………10 Cost Allocation……………………………………………………………….11 DEBT MANAGEMENT POLICY……………………………………………………13 INVESTMENT POLICY……………………………………………...………………15 2 Purpose: The Comprehensive Financial Management Policy assembles all of the City’s financial policies in one document. They are the tools to ensure that the City is financially able to meet its immediate and long-term service objectives. The individual policies contained herein serve as guidelines for both the financial planning and internal financial management of the City. The City of Arlington is accountable to its citizens for the use of public dollars. Municipal resources must be wisely used to ensure adequate funding for the services, public facilities, and infrastructure necessary to meet the community’s present and future needs. These policies safeguard the fiscal stability required to achieve the City’s goals and objectives. Objectives: In order to achieve its purpose, the Financial Management Policies have the following objectives for the City’s fiscal performance. A. To guide the City Council and management policy decisions that have significant impact. B. To set forth-operating principles that minimize the cost of government and financial risk. C. To employ balanced and fair revenue policies that provide adequate funding for desired programs. D. To maintain appropriate financial capacity for present and future needs. E. To promote sound financial management by providing accurate and timely information on the City’s financial condition. F. To protect the City’s credit rating and provide for adequate resources to meet the provision of the City’s debt obligations on all municipal debt. G. To ensure the legal use of financial resources through an effective system of internal controls. H. To promote cooperation and coordination with other governments and the private sector in the financing and delivery of services. 3 Reserve Fund Policies Adequate reserve levels are a necessary component of the City’s overall financial management strategy and key factor in external agencies’ measurement of the City’s financial strength. a. The City will strive to maintain a Program Development FundMandatory General Fund Reserve (rainy day fund) with a target balance of eight percent (8%) of the total General Fund budgeted taxes and Licenses & Permits. These operating reserves are maintained to address temporary revenue shortfalls; payment of approved expenditures due to cash flow shortage; reserves for expenditures deemed necessary by the Mayor and City Council; temporary short-term interfund loans, and other unanticipated expenses as approved by the City Council. An annual contribution will be budgeted from General Fund resources as available to maintain the target reserve level. 1) This “reserve” shall be in addition to the maintenanceing maintenance of one-month operating cash within the General Fund itself. b. It will be the policy of the City to maintain a Capital Facilities/Building Fund to provide funding for future facilities including debt repayment, less proprietary fund projects. The use of any funds within the Capital Facilities/Building Fund will be as approved by the City Council. c. Contributions to Program Developmentthe Mandatory General Fund Reserve and Capital Facilities/Building Funds will be made from available funds as identified in the annual budget, or amended budget at the end of the year. The Finance Director shall make a recommendation to the Council with regard to transfers to reserve funds. The Council, by motion (and amending the budget by ordinance as necessary) shall authorize the transfers, as the Council shall determine to be appropriate at that time. d. All expenditures drawn from reserve accounts shall require prior Council approval unless previously specifically authorized by the City Council for expenditure in the annual budget. 4 Revenue Policies a. To the extent possible, a diversified and stable revenue system will be maintained to shelter public services from short-run fluctuations in any one revenue source. Trends analyzing the dependence on distinct revenue sources shall be included in the budget documents for consideration by the Council. b. Revenue forecasts shall be realistically estimated and based on the best information available. The City will follow a vigorous policy of collecting revenues. c. Revenue forecasts will assess the full spectrum of resources that can be allocated for public services. Each year the Council shall review potential sources of revenue as part of the annual budget process. d. Short-term (anticipated less than one year) economic downturns and temporary gaps in cash flow: Expenditure reductions or restrictions may be imposed. Council may approve an contribution from the Program Development Fund or interfund loans to address temporary downturns in City revenues. Interfund loans may also be utilized to cover temporary gaps in cash flow. e. Long-term (greater than one year) revenue downturns: Revenue forecasts will be revised. Expenses will be reduced to conform to the revised long-term revenue forecast or revenue increases will be considered. The City will not pursue deficit financing and borrowing to support on-going operations is not the policy of the City as a response to long-term revenue shortfalls. Revenue forecasts will be revised. Expenses will be reduced to conform to the revised long-term revenue forecast or revenue increases will be considered. f. All potential grants shall be carefully examined for matching requirements. Some grants may not be accepted if the local matching funds cannot be justified. Grants may also be rejected if programs must be continued with local resources after grant funds are exhausted. g. The City shall develop and maintain a comprehensive list of various fees and charges. Fees may be set at levels sufficient to cover the entire cost of service delivery (such as in “Enterprise Funds”), or the service may be subsidized, as Council deems appropriate. The City will systematically review user fees and rates and consider adjustments as necessary to take into account the effects of additional service costs and inflation. Rate studies shall be conducted to ensure that the rates will continue to support direct and indirect costs of operations, administration, plant maintenance, debt service, depreciation of capital assets, and moderate system extensions. Based on a market analysis, fees for similar services in other communities may also be considered. The criteria used to evaluate recommended target rates (equity, cost recovery policy, market demand, etc) shall be included in the staff report during the review. Such review should be scheduled periodically and be incorporated into the budget process for possible action by the City Council. h. The City will review contracts and leases, which result in revenues to the city on a timely basis in order to provide for careful evaluation by the City Council. 5 Expenditure Policies a. The City will only propose operating expenditures, which can be supported from on-going operating revenues. Before the City undertakes any agreements that would create fixed on- going expenses, the cost implications of such agreements will be fully determined for current and future years. Capital expenditures may be funded from one-time revenues, but the operating budget expenditure impacts of capital expenditures will be reviewed for compliance with this policy provision. b. Department heads are responsible for managing their budgets within the total appropriation for their department. c. The City will maintain expenditure categories according to state statute and administrative regulation. d. The City will assess funds for services provided internally by other funds. The estimated direct and indirect costs of service will be budgeted and charged to the fund performing the service. Interfund service fees charged to recover these costs will be recognized as revenue to the providing fund. A review of the method for determining the amount of the interfund assessment will be reviewed periodically. e. Emphasis is placed on improving individual and work group productivity rather than adding to the work force. The City will invest in technology and other efficiency tools to maximize productivity. The City will hire additional staff only after the need of such positions has been demonstrated and documented. f. All compensation planning and collective bargaining will focus on the total cost of compensation, which includes direct salary, health care benefits, pension contributions, training allowance, and other benefits of a non-salary nature, which are a cost to the City. Collective bargaining decisions will not negatively impact the City’s efforts to maintain reserve balances in compliance with the City’s reserve policy (see page 3). 6 Accounting, Auditing and Financial Reporting The City will maintain a system of financial monitoring, control, and reporting for all operations and funds in order to provide effective means of ensuring that overall City goals and objectives are met. Accounting Records and Reporting. The City will maintain its accounting records in accordance with state and federal regulations. Budgeting, accounting and reporting will conform to Budgeting, Accounting and Reporting System (BARS) for Governments as prescribed by the Washington State Auditor. Auditing. The State Auditor will annually perform the City’s financial and compliance Audit in accordance with state and federal laws. Results of the annual audit will be provided to the Council in a timely manner. Simplified Fund Structure. To the extent possible, the City will minimize the number of Funds. The Finance Department will develop, maintain, and consistently seek to improve cash management systems which ensure the accurate and timely accounting, investment, and security of all cash assets. All cash monies received by from City departments by the Finance Department will be deposited with the Finance Department prior to the end of each business day will be deposited the same day. (unless a department has a secure place to hold it over night and can demonstrate those secure procedures to the Finance Director). There are several locations where monies are received by the City: Those locations are: the Finance office, the Airport office, the Permits office, and the Cemetery office. The Finance, Airport and Permits office locations all have cash drawers. These funds are used to make change for cash payments. The amount of these cash drawers are authorized by resolution. No change shall be given when a check is presented for payment. No one is authorized , at any time, to borrow funds from any cash drawer. Doing so will result in discipline up to and including termination. The Finance Office also has a Petty Cash Revolving Fund (Checking Account). The Petty Cash Fund is authorized in the Arlington Municipal Code Section 3.69. This fund is used to pay very small expenditures or reimburse small expenditures made where waiting for a payment from the normal payment process is unreasonable. No one is authorized to borrow monies from this Fund. CASH MGT / CASH HANDLING POLICY GOES HERE Formatted: Underline Formatted: Underline Formatted: Underline Formatted: Indent: Left: 0", First line: 0" Formatted: Body Text Indent, Tab stops: Not at 0.38" Formatted: Body Text Indent, Tab stops: Not at 0.38" Formatted: Font color: Red 7 Budget and Operating Policies a. All decisions will be within the context of long-range plans (Capital Facilities Plan / Comprehensive Plan/Capital Improvement Plan). Staff shall provide a review of the implications of budgetary proposals on long-range plans. b. The annual budget shall be developed consistent with state law and in a manner which encourages early involvement with the public and City Council. A calendar of events related to budget development shall be presented to the City Council by April 30th of each year. c. The Finance Department will maintain a system for monitoring the City’s budget performance. The system will provide the City Council with monthly and or quarterly information in a timely manner on fund level resource collections and department level expenditures. Under the provisions of State Law and the City’s operating procedures, the budget may be adjusted or amended in two different ways. Adjustment of the budget involves a reallocation of existing appropriations and does not change the “bottom line”. No City Council action is needed as State Law allows budget adjustments to be done administratively. Amendment of the budget involves an addition to or reduction of existing appropriations. Initially, a motion by the City Council action, by ordinance, is required. Amendments made to the budget throughout the year by City Council motion will be adopted through the annual Budget Amendment Ordinance. d. Fixed asset inventories. Accurate inventories of all physical assets, their condition, life spans, and cost will be maintained to ensure proper stewardship of public property. The Finance Director will establish policies and appropriate procedures to manage fixed assets, including establishing the threshold dollar amount for which fixed asset records are maintained and how often physical inventories are taken. 8 CAPITAL ASSETS POLICIES AND PROCEDURES A. Purpose This policy is established to provide guidelines to ensure adequate stewardship over City resources through control and accountability of capital assets, and to collect and maintain complete and accurate capital assets information in the Capital Assets System B. Reference Specific requirements of the Washington State Auditors Office are contained in Budgeting and Reporting System (BARS) Volume 1, Part 3, Chapter 7, which will be applied by the City as relevant. In addition, the federal government has issued property management requirements which apply to all governments that receive federal assistance. Each federal agency has published a Federal Agency Implementation of the Common Rule which will be adhered to as applicable. The policies and procedures contained in this policy are not intended to and may not supersede federal, state or local laws. C. Definitions 1. “Assets” - All land, buildings, improvements, works of art and historic collections and equipment purchased, donated, constructed, or acquired by the City. 2. “Capital Assets” – Land of any value; artwork and historic collections of any value; improvements to buildings, their furnishings, fixtures, and furniture; equipment, machinery, vehicles, and tools, with a value of $5,000 or more and having a useful life exceeding one year from the date of acquisition. 3. “Control”- Being in charge of, and having the authority to manage the asset. Having the custodial responsibility of the asset that includes, but is not limited to the caring, keeping, safekeeping and protecting the asset. 4. “Inventory” – The process of physically confirming the existence and location of capital assets. 5. “Small and Attractive Assets” – small and attractive assets are those assets that are particularly at risk or vulnerable to loss and cost less than $5,000. Departments have discretion in defining small and attractive assets in many instances; however, departments must include, at a minimum, the following assets with unit costs of $500 or more as small and attractive: • Communications Equipment; both Audio and Video • Optical Devices, Binoculars, Telescopes, Infrared Viewers, and Range finders • Cameras and Photographic Projection Equipment • Microcomputer Systems, Laptop and Notebook Computers • Other data processing Accessory Equipment and Components (Scanners, Data Displays, etc.) • Office Equipment • Stereos, Radios, Television Sets, Tape Recorders, DVD players, VCRs, and Video Cameras D. Applicability This policy applies to all departments of the City of Arlington. The term "Department" is defined to include every city office, officer, and every department, division, board and commission. E. Department responsibilities Departments are responsible for protecting and controlling the use of City assets assigned to their department. The department head must designate one or more Department Inventory Officers to be responsible for maintaining and safeguarding the department's capital assets and small and attractive 9 assets. Any time an asset is added, deleted, or transferred, the Department Inventory Officer will complete an Asset Control Sheet which will be submitted to the Finance Department with the related documentation. F. Capitalization Threshold All assets with a cost of $5,000 or more will be capitalized. Although Small and Attractive Assets (assets costing less than $5,000) do not meet the city’s capitalization threshold, due to ease of conversion to private use, they are considered assets for purposes of marking and identification, records keeping, and tracking. G. Improvement/Repair/Maintenance Expenses Routine repair and maintenance costs will be expensed as they are incurred and will not be capitalized. Major repairs will be capitalized if they result in betterments/improvements. To the extent that a project replaces the “old” part of a capital asset, outlays will not be capitalized; and to the extent that the project is betterment/improvement, outlays will be capitalized. H. Additions The city may acquire property via purchase, construction, donation, or lease. Capital assets shall be capitalized and purchased from a capital outlays code (60’s) as defined in the BARS Manual line of either: 61 – Land and Land Improvements; 62 – Buildings and Structures; 63 – Other Improvements; 64 – Machinery & Equipment; 65 – Construction of Capital Assets. When a capital asset is purchased, the department will submit a completed Asset Control form (See attachment A.) to the Finance Department. The Finance Department will identify those assets that meet the capitalization requirements. Finance will assign a unique inventory control number to the asset and assign an inventory ID tag number, if applicable. When the Asset Control Sheet and ID tag are received by the department, the department designee will immediately affix the ID tag to the asset, complete and sign the Asset Control Sheet, and return the completed form to Finance. Whenever feasible, each piece of property will be affixed with an inventory ID tag identifying the capital asset as the property of the City of Arlington, and including city identification number. Departments may determine where to place the tag on the capital asset. However, the identification and control number should be located on the principal body of the asset, rather than a removable part. Such tag will be removed or obliterated only when the item is sold, scrapped, or otherwise disposed of. Should the inventory ID tag be removed or defaced, the item shall be assigned a new inventory ID tag, and the new number recorded in the capital assets database. Occasionally, it will be impractical or impossible to mark some inventorial capital assets according to these standards. For example, do not tag if the capital asset: • Is stationary in nature and not susceptible to theft (such as land, buildings, improvements other than buildings, and leasehold improvements); • Has a unique permanent serial number that can be used for identification, security and inventory control (such as vehicles); • Would lose significant historical or resale value by being tagged; or • Would have its warranty negatively impacted by being permanently marked; 10 In these cases, the identification tag is not required, and the department is to apply alternative procedures to inventory and identify such assets. I. Deletions Asset deletion (assets over $5,000) may be required due to the sale of the asset, scrapping, lost or stolen items, or involuntary conversion (fire, flood, etc). Due to the monetary value, capital assets deleted from the capital asset system for any reason require authorization by resolution of the City Council. J. Disposal Disposal of capital assets may occur only after being declared surplus by resolution of the City Council. A Public Hearing is required if the asset was owned for Public Utility purposes. Disposal will be made in whichever manner is determined to be most cost effective for the City. This may include sale, disposal, conversion, or any other means as approved by the City Council in the surplus declaration. When original or replacement equipment acquired under a grant or sub-grant is no longer needed for the original project or program, disposition of the equipment will be made as follows: 1) Items of equipment with a current per-unit fair market value of less than $5,000 may be retained, sold or otherwise disposed of with no further obligation to the awarding agency. 2) Items of equipment with a current per-unit fair market value of $5,000 or more may be retained, sold or otherwise disposed of only as authorized by the awarding agency. In the event the City is provided federally owned equipment: 1) Title will remain vested in the federal government. 2) The City will manage the equipment in accordance with federal agency rules and procedures, and submit an annual inventory listing. 3) When the equipment is no longer needed, the City will request disposition instructions from the federal agency. K. Lost or stolen property When suspected or known losses of capital assets or small and attractive items occur, departments should conduct a search for the missing property. The search should include transfers to other divisions or departments, storage, scrapping, conversion to another asset, etc. If the missing property is not found: • Notify the inventory control officer and department head. • Have the individual deemed to be primarily responsible for the asset, as well as that individual’s supervisor, complete and sign a statement to include a description of events surrounding the disappearance of the property, who was notified of the loss, and steps taken to locate the property. • Finance will report known or suspected losses of assets to the State Auditor’s office in accordance with RCW 43.09.185, and a copy of the report will be provided to the Mayor and City Administrator. • Finance will remove the lost or stolen property from the department’s inventory and accounting records where applicable. L. Transfers Occasional transfers of property between departments, individuals within a department or funds may occur. The original controlling department is accountable for all assets in its inventory and for initiating a notice of transfer. Interdepartmental transfers involving a proprietary fund (i.e. Surface Water) require a transfer of money. The sale price will be fair market value, which may result in a gain or a loss on sale of 11 capital assets. Exception: The trade between departments of assets of similar value. As stated above “The original controlling department is accountable for all assets in its inventory and for initiating a notice of transfer.” M. Modifications Larger assets such as major pieces of equipment, and many buildings are often modified to increase their lifetime or usefulness. Modifications may include partial additions or deletions, major repairs (new engine for fire truck), or component replacement (new roof, heating system, etc.). Several vouchers may be prepared for the modification as the work is in progress. Therefore, it is very important to notify the Finance Department that modifications are coded as capital outlay and when it is given to accounts payable for payment. The inventory number should be included on the voucher of the equipment; building or other structure reflecting what is being modified. N. Inventory A physical inventory will be conducted at least once every year. By February 15th of each year, the Finance Department will supply each department with an inventory worksheet of all capital assets under their control as of December 31st of the prior year. Each department will conduct a physical inventory of the items, verifying the existence and condition of each item on the worksheet, and making note of any additions, deletions, interdepartmental transfers, modifications, or leases of property that are not reflected on the list. The final list will be reviewed and signed by the department head, and returned to the Finance Department by March 31st of every year. Verification of the inventory shall be done annually by the Finance Department by performing a sampling of the physical inventory of the items. 1. Inventory of IT (Information Technology) related items. The Information Technology Department will be responsible for inventorying all stationary items such as desktop computers, laptop computers with docking stations, servers, printers and network equipment. Individual departments will be responsible for inventorying all “portable” small and attractive IT related items such as: Tablets (iPad, Android, etc.) and mobile computers (Netbooks, Police Car computers, Fire tablets etc.) In order to ensure objective reporting of inventory items, personnel having no direct responsibility (custody and receipt/issue authority) for the assets should perform the physical inventory. If it is not feasible to use such personnel for all or a part of the inventory, then those portions are; at least, to be tested and verified by a person with neither direct responsibility for that portion of the inventory nor supervised by the person directly responsible. Departments are encouraged to exchange and use personnel from other departments to perform their inventory if possible. 2. Physical inventory instructions Written physical inventory instructions will be documented and distributed to each person participating in the inventory process. The instructions will describe: • How and where to record each item, • What information to record, • What to do when they have a question, • What procedures to follow when they finish their assignments, • What procedures to follow when equipment is located but not listed, • The procedure by which the person counting the assets attests to the accuracy of the count, such as by signing his or her name at the bottom of each inventory page, or signing a cover page for a group of pages sorted by another method (batches, location, equipment type, etc.), and • How to record assets not being used or in an obviously unserviceable condition. Such information is to be used to schedule repair or disposition of such assets. 12 3. Physical inventory reconciliation After the physical inventory count is completed, the department inventory officer is to conduct the reconciliation process. Only when all differences have been identified and explained, is the inventory considered reconciled. Departments should conduct the following steps during the reconciliation process: • Search the inventory lists to determine whether inventory noted during the count as unrecorded is, in fact, listed on another portion of the inventory. • Enter unrecorded assets into the inventory system as soon as possible after discovery. • If a significant number of unrecorded assets are located, a major problem with the asset recording procedures may exist. The department inventory officer should contact the Finance Department for assistance in determining why the problem is occurring and how to correct it. • Conduct a search in an effort to locate missing assets. • For assets not located, follow the lost or stolen property procedures in this policy. After the inventory is reconciled, the department inventory officer is to certify the reconciliation with a statement and signature that it is correct and report this to the supervisor. If the certification cannot be made, the inventory officer is to disclose that fact and the supervisor is to determine the appropriate course of action. 4. Retaining physical inventory records The certification, together with the reconciliation and the inventory listing, serves as the support for the inventory balance and for accounting adjustments, if any, and must be retained by the Finance Department. The documentation will be retained in accordance with the approved records retention schedules. At a minimum the asset records must be retained until after the next annual audit. O. Small and Attractive Assets Procedures Small and attractive assets shall be expensed and purchased from the small tools and minor equipment as defined in the BARS manual object code (35). All small and attractive assets shall be tracked and recorded in a database by each department in control of those assets. Annually each department will have the small and attractive asset inventory listing under their control verified by the Finance Department on a sampling basis. Small and attractive assets may not be transferred, traded, sold, auctioned, gifted, surplused, or discarded without written notice to and authorization from the Finance Department. P. Valuation of Capital Assets Assets shall be valued at cost - including any ancillary charges necessary to place the asset in its intended location and condition for use. However expenses which do not add to the utility of an asset shall not be capitalized. For example, an expenditure to repair a piece of equipment that was damaged during shipment should be expensed. Values will be determined in the following manner: 1. Purchased Assets Historical costs including taxes (e.g., sales taxes), and all appropriate ancillary costs less any discounts or rebates. If the historical cost is not practicably determinable, estimated cost will be used. 13 2. Land The capitalized value of land includes the purchase price plus costs such as legal fees, fill, and any excavation costs incurred to put the land in condition for its intended use. If land is acquired by gift, the capitalized value will reflect its appraised or fair market value at the time of acquisition. 3. Equipment Furniture, fixtures, or other equipment should be classified as equipment. Since they are not an integral part of a building they are not considered capital improvements. The cost for this asset type should reflect the actual or estimated cost of the asset, including the cost of an extended maintenance/warranty contract if the contract is purchased at the same time (or soon thereafter) as the capital asset. 4. Self-Constructed Assets All direct costs associated with construction and management costs associated with a construction project will be capitalized. 5. Donated Assets Donated assets will be recorded at the fair market value at the time of acquisition plus all appropriate ancillary costs. If the fair market value is not determinable due to lack of sufficient records, estimated cost will be used. Q. Improvement, Repair and/or Maintenance Expenditures Routine repair and maintenance costs will be expensed as they are incurred. Extraordinary repairs, betterments or improvements will be capitalized if they increase future benefits from an existing capital asset beyond its previously assessed standard of performance. Increased future benefits typically include an extension in the estimated useful life of the asset or an increase in the capacity or efficiency of an existing capital asset. R. Replacements For building improvements other than buildings and equipment the cost of outlays that replace a part of another capital asset will be capitalized when the cost of the replacement is $5,000 or more and at least 10 percent of the total replacement value of the asset, or $100,000, whichever is less. Example: A $9,000 replacement of a heating boiler in a building having a replacement value of $120,000 would not be capitalized. In this case $9,000 is not at least 10 percent of the building's replacement value. Had the building's replacement value been less than $90,000, the $9,000 boiler replacement would have been capitalized. 1. Improvement cost exceeds $5,000 2. Building cost is greater than $100,000 3. Improvement is < 10% of replacement S. EXCEPTIONS to this policy are: • Replacement roof coverings are not capitalized unless the replacement extends the useful life of the building. • Replacement floor coverings and window coverings are not capitalized. • Costs to remodel (convert) a building to a different use, where the remodeling does not extend the useful life of the structure itself, are not capitalized. After replacing a part of another asset, the capitalized value and the associated accumulated depreciation of the replaced item will be removed from the accounting records, and the costs of the replacement will be capitalized. 14 In the case of capital outlays that are partly replacements and partly betterments/improvements, to the extent that the project replaces the “old” part of a capital asset, outlays will not be capitalized; and to the extent that the project is betterment/improvement, outlays will be capitalized. When the distinction between replacement and betterment/improvement is not easily determinable, the City will expense the entire cost of the project. When the cost of improvement is substantial or where there is a change in the estimated useful life of an asset, depreciation charges for future periods will be revised based on the new book value and the new estimated remaining useful life. T. Ancillary Costs Normally, ancillary costs will be included in the cost of a capital asset. However, minor ancillary costs, not measurable at the time a capital asset is recorded, are not required to be capitalized. Ancillary costs for Land include: • Legal and title fees; • Professional fees of engineers, attorneys, appraisers, financial advisors, etc.; • Surveying fees; • Appraisal and negotiation fees; • Damage payments; • Site preparation costs; and • Costs related to demolition of unwanted structures. Ancillary costs for Buildings and Building Improvements include: • Professional fees of architects, engineers, attorneys, appraisers, etc.; • Damage payments; • Costs of fixtures permanently attached to a building or structure; • Insurance premiums, interest, and related costs incurred during construction; and • Any other costs necessary to place a building or structure into its intended location and condition for use. For furnishings, equipment, or other capital assets; • Transportation charges, • Sales tax, • Installation costs; and • Extended maintenance/warranty contracts or any other normal or necessary costs required to place the asset in its intended location and condition for use. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 15 Purchasing The City will follow State Laws, adopted resolutions, ordinances and policies regarding procurement. Federal Funds. When procurement involves the expenditure of federal funds, purchasing shall be conducted in accordance with any applicable federal laws or regulations. Grants. When procurement involves the expenditure of a grant, purchasing shall be conducted in accordance with any applicable grant laws or regulations. Emergency procurement. The Mayor or his/her designated agent may make or authorize others to make emergency procurements of materials, supplies, equipment or services when there exists a threat to public health, welfare, or safety. State laws relating to emergency purchases will be followed. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 16 PURCHASING PROCEDURES Sections: I. Purpose. II. Policy statement. III. Definitions. IV. General provisions. V. Purchase of materials, supplies or equipment. VI. Public works projects. VII. Services. VIII. Inter-local joint purchasing agreements. IX. Real property acquisition. I. Purpose. This policy is intended to direct the purchase of goods and services at a reasonable cost, using an open, fair, documented and competitive process whenever reasonable and possible. The integrity, efficiency, and effectiveness of Arlington's procurement functions are critical elements of sound government. II. Policy statement. A. The City desires a fair and open process for procurement of goods and services that is free from the potential for bias and conflict of interest. In addition, the City desires consistent and appropriate practices for solicitations and contracting. All procurements of goods and services shall provide the City with the best quality and best value. All purchases are to be made within budgetary limitations and for the purpose of the goals and objectives approved in the City's budget. Any requested purchase that is not included in the current City budget shall be pre-approved by the Department Director, City Administrator, or City Council, based on allowable signing authority, and will include a completed Capital Outlay form. All purchases made by the City shall ultimately be approved by the City Council through the voucher approval process. B. All City of Arlington departments shall make a good faith effort to purchase goods within the City when they are available and suitable to City needs at a price that is competitive. Departments are expected to procure goods and services that are of high quality and that perform for their intended purpose, and to use good judgment during the procurement process. Goods and services may be purchased locally if they are less than $5.000 and within 10% of the lowest price available outside City limits. Items that are valued over $5,000 will be purchased on a competitive basis. C. The finance department is charged with developing administrative procedures to implement this policy. Procedures should ensure the fiscal responsibility of the City in expending resources for goods and services for City operations. The procurement procedures of the City shall be based on guidelines provided in the Revised Code of Washington, by the State Auditor's Office, and by Municipal Research Services Center. Formatted: Adjust space between Latin and Asian text, Adjust space between Asian text and numbers CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 17 D. The purchasing procedures of this policy govern the purchase of supplies, materials and equipment, nonprofessional and professional services, and public works contracts. These policies authorize the City to procure goods and services through the small works roster process as defined in Section VI.D. The small works roster procedures are established for use by the City, pursuant to RCW 35.23.352, 35A.40.210 and Chapter 39.04 RCW. Leases of equipment or other personal property shall follow procedures for purchase of goods, with the aggregate of lease payments used in lieu of purchase price. Purchase or lease of real estate, franchise agreements, and intergovernmental or inter-local agreements will be entered into in accordance with state law. E. Each City Department purchases specialty items unique to their function and items that are purchased just in time to make necessary repair or to keep equipment and amenities in safe a good working order. All department directors will make good faith effort to utilize a central purchasing for purchases of consumable goods and reoccurring purchases. This will enable the best value by combining orders and purchasing in bulk on larger quantities when possible. III. Definitions. A. "Architectural and engineering services" means professional services rendered by any person, other than a City employee, to perform activities within the scope of the professional practice of architecture (Chapter 18.08 RCW), professional practice of engineering and land surveying (Chapter 18.43 RCW), and/or professional practice of landscape architecture (Chapter 18.96 RCW). B. “Contract Authorization Summary” outlines the levels at which managers, directors, or the Mayor may commit the City to a contract. Attached as Exhibit B. C. "Formal competitive bid" is the process of advertising and receiving sealed written bids from perspective vendors. The selection of the vendor is primarily based on the lowest cost from a responsible vendor. D. "Informal competitive quotes" are price quotes from vendors that are obtained using a variety of mediums such as phone, fax, e-mail, or writing. Results must be documented. The selection of the vendor is primarily based on the lowest cost from a responsible vendor. E. "Inter-local agreements" are the exercise of governmental powers in a joint or cooperative undertaking with another public agency. F. "Life cycle cost" means the total cost of an item to the City over its estimated useful life, including costs of selection, acquisition, operation, maintenance, and where applicable, disposal, as far as these costs can reasonably be determined, minus the salvage value at the end of its estimated useful life. G. “MSRC Small Works and Consultant Roster” is a shared statewide small public works and consultant roster service managed by the Municipal Research and Services Center of Washington used by Washington state local public agencies. The Small Works and Consultant Roster is maintained and operated in full compliance with state laws and purchasing requirements. H. "Nonprofessional services" are services that are purchased by the City for which the contractor receives specific instructions and guidance from the City and does not meet the definition of professional services, architectural and engineering services, or public CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 18 works projects. Examples include machine repair, debt collection services, temporary service agencies, credit card services, equipment service agreements, auctioning services, delivery services, inspections, advertising, etc. I. "On-call contract" means a contract that is awarded with general provisions for the services to be rendered. As services are to be rendered, specific task orders are initiated that are to be completed by the contracting firm. J. “Ordinary maintenance" is work not performed by contract and that is performed on a regularly scheduled basis (e.g., daily, weekly, seasonally, semiannually, but not less frequently than once per year), to service, check, or replace items that are not broken; or work not performed by contract that is not regularly scheduled but is required to maintain an asset so that repair does not become necessary. K. “Prevailing Wage” is defined as the hourly wage, usual benefits and overtime, paid in the largest city in each county, to the majority of workers, laborers, and mechanics. Prevailing wages are established, by the Department of Labor & Industries, for each trade and occupation employed in the performance of public work. They are established separately for each county, and are reflective of local wage conditions. L. "Professional services" are services provided by consultants that provide highly specialized, generally one-time expertise to solve a problem or render professional opinions, judgments or recommendations. The labor and skill involved to perform these types of services are predominately mental or intellectual, rather than physical or manual. Examples include graphics design, advertising, analysis, financial expertise, accounting, artists, attorneys, bond brokers, computer consultants, insurance brokers, economists, planners, real estate services, etc. This term does not include architectural and engineering services. M. “Public work," as defined in RCW 39.04.010, means a complete project, and includes all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the City or which is by law a lien or charge on any City property. Public work projects include the related materials, supplies and equipment to complete the project. For purposes of this policy, the term “public work” may include contracts for maintenance of City facilities or real property (i.e. janitorial services). N. "Request for proposals (RFP)" means a process that requests interested firms to submit a statement of their proposal for completing a project. Proposals are then evaluated based on the idea, including originality, suitability, practicality, expertise, etc. Proposals may be selected based on the quality of the proposal, experience, cost, and references. O. "Request for qualifications (RFQ)" means a process that requests interested consultants to submit a letter of interest and a statement of their qualifications. Consultants are evaluated upon their qualifications, expertise, and references. Cost cannot be a consideration until after a consultant has been selected at which point the price may be negotiated. P. "Small works roster" is a roster of qualified contractors maintained for use in a modified formal bid process. When the contract amount for a public works project is within the limits set forth by RCW 39.04.155, a city may follow the small works roster process for construction of a public work or improvement as an alternative to formal competitive bid requirements. Q. “Small Works Roster Manual for Local Governments” is a manual prepared by the Municipal Research & Service Center of Washington (MRSC) that contains state laws and regulations regarding small works contracting. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 19 IV. General provisions. A. Grant funded projects may have additional regulations required for expending federal and state funding. B. Breaking Down or Splitting Purchases. The breaking down, or splitting, of any purchase or contracts into units of phases for the purpose of avoiding the maximum dollar amount is prohibited. C. Emergency Procurements. Notwithstanding any other provisions of this policy, the Mayor or designated agent may make or authorize others to make emergency procurements of materials, supplies, equipment, or services without complying with the requirements of this section when there exists a threat to public health, welfare, or safety or threat to proper performance of essential functions; provided, that such emergency procurements shall be made with such competition as is practicable under the circumstances. A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file. As soon as practicable, a record of each emergency procurement shall be made and shall set forth the contractor's name, the amount and type of the contract, and listing of the item(s) procured under the contract, which shall be reported to the City Council at the next subsequent meeting. The City must produce a negotiated contract for each emergency purchase within fourteen (14) days of procurement or the work being performed. D. Amendments and Change Orders. a. Amendments or change orders to contracts, including inter-local agreements, which result in the final contract amount in excess of purchase limits identified in this policy may be administratively approved if the changes are: i. Within the scope and budget of the project or purchase; ii. Executed in writing; iii. The amount in excess of the Mayor's purchase limits, shown in Exhibit B, will not exceed the Mayor's authority for non-budgeted capital or operating expenditures as defined in the Contract Authorization Summary adopted by City Council or the approved project budget, whichever is greater. b. Contract amendments that are strictly a change in contract expiration date may be administratively approved by the Department Director. c. The value of all change orders will be aggregated, and when any single amendment or combination of change orders on the same project or purchase exceeds the limit under subsection (D)(a)(iii) of this section the change must be approved by the City Council, except: i. For service contracts to accomplish an ongoing city program rather than a discrete project, the aggregation of administrative change orders shall be recalculated after each contract year; and ii. Where the size of the contract makes it probable that administrative change order authority will be quickly exhausted, the City Council may, upon recommendation of the Mayor, extend the aggregate limits of subsection (D) (a) (iii) of this section upon award of the particular contract. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 20 E. Signature Authority. The Mayor may delegate his/her signature authority to other City employees (City Administrator, Department Director, and Division Manager) as deemed appropriate. V. Purchase of materials, supplies or equipment. A. Purchasing Limitations. Purchase limitations apply to the cost of individual items or the sum of the same items purchased at the same time to fulfill a specific business need, which are not part of a public works project as defined by RCW 39.04.010 and these policies. Cost is inclusive of sales tax, delivery charges and any related miscellaneous charges. Limits shown and processes identified in the Commitment Authority shall be followed when authorizing the acquisition of materials, supplies or equipment. A. Purchases Less Than $7,500. Purchases of materials, supplies, or equipment, where the cost is under $7,500, do not require formal competitive quotes or purchase orders. B. Exceptions to Purchasing Limitations. The Mayor is authorized to allow open market purchases without obtaining the regularly required competitive quotes or bids under the following conditions: A. Surplus or Distress Sale. When it is possible to procure obvious bargains through the procurement of surplus or distress material, supplies or equipment. B. Auctions. RCW 39.30.045 authorizes the City to acquire supplies, materials, and equipment through an auction conducted by the United States or any agency thereof, an agency of the state of Washington, a municipality or other government agency, or any private part, without quotations or bids, if the items to be purchased can be obtained at a competitive price. C. Inter-local Joint Purchasing Agreements. Materials, equipment, supplies and. services may be purchased under RCW 39.34.080 using joint purchasing agreements with a city, county, state or other public agency where bid requirements of this policy have been followed by the cooperating agency in obtaining bids. Originating agency’s bid process shall be vetted to assure compliance with all applicable laws. D. Sole Source Procurement. A contract for the purchase of materials, supplies, or equipment may be awarded without complying with the bidding requirements of this policy when the department director determines in writing, subject to council approval through resolution, after conducting a good faith review of available resources, that there is only one source of the required materials, supplies, or equipment. The department director or his/her designee shall conduct negotiations, as appropriate, as to price, terms, and delivery time. To comply with RCW 39.04.020, a record of sole source procurement shall be recorded with the County Auditor that lists each contractor's name, the amount and type of each contract, and a listing of the item(s) procured under each contract. The City Clerk or his/her designee shall perform this recording task. E. No Bids or Quotations Received. When no bids or quotations are received in response to an invitation to bid or request for quotations, the department director or his/her designee is authorized to procure the required item through direct negotiations with a vendor or to rebid as the Mayor or designee deems appropriate. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 21 C. Informal Competitive Quotes - Materials, Supplies or Equipment over $3,000. A. A City representative shall make an effort to contact at least three vendors. The number of vendors contacted may be reduced if the item being sought is only available from a smaller number of vendors. When fewer than three quotes are requested or if there are fewer than three replies, an explanation shall be placed in the procurement file. B. Whenever possible, quotes will be solicited on a lump sum or fixed unit price basis. C. At the time quotes are solicited, the City representative shall not inform a vendor of any other vendor's quote. D. A written record shall be made by the City representative of each vendor's quote on the materials, supplies, or equipment, and of any conditions imposed on the quote by such vendor. E. All of the quotes shall be collected and presented at the same time to the appropriate designee as appropriate for consideration, determination of the lowest responsible vendor and award of purchase. F. Whenever there is a reason to believe that the lowest acceptable quote is not the best price obtainable, all quotes may be rejected and the City may obtain new quotes or enter into direct negotiations to achieve the best possible price. In this case, the department shall document, in writing, the basis upon which the determination was made for the award. G. All purchases of over $5,000 will have a completed and approved Capital Outlay Form submitted to the finance department prior to the purchase of materials, supplies, or equipment is executed. D. Formal Competitive Bid – Materials, Supplies, or Equipment over $7,500 A. General. Unless otherwise specifically approved by the City Council, all contracts relating to the purchase of materials, equipment, or supplies shall be in accordance with the City budget. B. Invitation for Bids. An invitation for bids shall be issued which shall include the specifications and the contractual terms and conditions applicable to the procurement. C. Public Notice. Public notice of the invitation for bids shall be published at least once in a newspaper of general circulation within the City, not less than 13 calendar days prior to the date set forth therein for the opening of bids, unless for good cause shown, the City Council authorizes a different period of time. The public notice shall state the date and time of bid opening. Bids not received by the date and time stated for bid opening will not be accepted or considered. D. Bid Opening. Bids shall be opened publicly and recorded at the time and place designated in the invitation for bids. E. Withdrawal of Bids - Cancellation of Awards. Bids may be modified or the bid may be withdrawn by written notice received in the office designated in the invitation for bids prior to the time set for opening. After bid opening, withdrawal of bids shall be permitted only to the extent that the bidder can show by clear and convincing evidence presented in a sworn affidavit or declaration submitted no later than 5:00 p.m. on the first business day after bid opening, that a clerical mistake was made and not a mistake in judgment, and the bid price actually CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 22 intended. All decisions to permit the withdrawal of bids after bid opening, or to cancel awards or contracts based on bid mistakes, shall be made by the Mayor after consulting with legal counsel. F. Award. The City Council shall award purchases for amounts greater than or equal to the limits as identified in the City budget. The award of bid shall be made to the lowest responsible bidder whose bid meets the specifications and evaluation criteria set forth in the invitation for bids. The City may reject all bids at its discretion. G. All purchases of over $5,000 will have a completed and approved Capital Outlay Form submitted to the finance department prior to the purchase of materials, supplies, or equipment. E. Lowest Responsible Vendor. The following factors, in addition to price, may be taken into account by the City in determining the lowest responsible vendor; these criteria shall also apply in selecting products or services either offered with, or associated indirectly with, City programs or facilities: A. Any preferences provided by law to local products and vendors; B. The ability, capacity, and skill of the vendor to perform the contract; C. The character, integrity, reputation, judgment, experience, and efficiency of the vendor; D. Whether the vendor can perform the contract within the time specified; E. The quality of performance of previous contracts or services; F. The previous and existing compliance by the vendor with laws relating to the contract; G. Such other information as may be secured having a bearing on the decision to award the contract. F. Life Cycle Costing. In considering the purchase of materials, equipment, supplies, whenever there is a reason to believe that applying the "life cycle costing" method of quote evaluation would result in the lowest total cost to the City, first consideration shall be given to purchases with the lowest life cycle cost which complies with the specifications. G. Recycled Products. The City shall also seek to maximize purchase of products using recycled materials and products suitable for recycling, unless the purchase will result in an unreasonable increase in price or degradation of quality or performance over comparable products. VI. Public works projects. A. Purchasing Procedures. Procedures for any public work or improvement shall be governed by RCW 35.23.352. At such time as the City’s population exceeds twenty thousand, purchases shall be governed by RCW 35.22.620.(RCW 35A.40.210) Cost for a public works project includes all amounts paid for materials, supplies, equipment, and labor on the construction of that project which is inclusive of sales tax, unless exempted by law. B. Purchasing Limitations. The Mayor may authorize the purchase and execution of public works projects equal to or less than the dollar threshold for small works projects as provided under RCW 39.04.155 as amended. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 23 C. Competitive Bids. "Craft" or "trade" means a recognized construction trade or occupation for which minimum wage categories are established by the Department of Labor and Industries of the State of Washington in the locality of the City's projects or purchases. a. Projects for single craft or multiple crafts with a reasonably anticipated price equal to or less than the dollar thresholds as provided under RCW 35.23.352, as amended, do not require the use of competitive quotes or bids.. All purchases require an executed contract. b. Projects for single craft or multiple crafts with a reasonably anticipated price higher than the dollar thresholds as provided under RCW 35.23.352, as amended, up to the limits set forth by RCW 39.04.155 as amended shall either use the small works roster or a formal competitive bid procurement process. All purchases require an executed contract. c. Projects with a cost in excess of the maximum dollar threshold as provided in RCW 35.23.352, as amended, require a formal competitive bid process. The City Council shall authorize these purchases and provide authority for the Mayor to execute the related contract. All purchases require an executed contract. D. Small Works Roster. There is established for the City of Arlington a small works roster contract award process for accomplishment of public works projects with an estimated value threshold as provided under RCW 39.04.155, as amended. a. Roster List. The City of Arlington shall contract with the Municipal Research and Service Center (MRSC) annually to establish, maintain and manage a current roster of eligible contractors from which the City may solicit bids for work on Small Public Work Projects (Projects $300,00 and under). It shall be the responsibility of the Public Works Staff Accountant to ensure that the contract with MRSC for Small Works and Consultant Rosters remains in force and that all required fees are paid. b. Process. Whenever work that has received City Council approval in the current budget, or otherwise been approved by the City Council, is sought to be accomplished using a small works roster, a City representative shall obtain telephone, written or electronic quotations from contractors on the appropriate small works roster to assure that a competitive price is established and to award contracts to the lowest responsible bidder as follows: i. A contract awarded from a small works roster need not be advertised. Invitations for quotations shall include an estimate of the scope and nature of the work to be performed as well as materials and equipment to be furnished. However, detailed plans and specifications need not be included in the invitation. This paragraph does not eliminate other requirements for architectural or engineering approvals as to quality and compliance with building codes. ii. Quotations shall be invited from all contractors in the appropriate category of the small works roster. As an alternative, quotations may be invited from at least five contractors on the appropriate small works roster who have indicated the capability of performing the kind of work being contracted, in a manner that will equitably distribute the opportunity among the contractors on the appropriate roster. If the estimated cost of CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 24 the work is $200,000 or more but less than or equal to the dollar threshold for small works projects as provided under RCW 39.04.155, as amended, the City may choose to solicit bids from less than all the appropriate contractors on the appropriate small works roster but must also notify the remaining contractors on the appropriate small works roster that quotations on the work are being sought. The City has the sole option of determining whether this notice to the remaining contractors is made by: 1. Publishing notice in a legal newspaper in general circulation in the area where the work is to be done; 2. Mailing a notice to these contractors; or 3. Sending a notice to these contractors by facsimile or other electronic means. iii. For purposes of this policy, "equitably distribute" means that the City may not favor certain contractors on the appropriate small works roster over other contractors on the appropriate small works roster who perform similar services. At the time bids are solicited, the City representative shall not inform a contractor of the terms or amount of any other contractor's bid for the same project. iv. A written record shall be made by the project manager of each contractor's bid on the project and of any conditions imposed on the bid. Immediately after an award is made, the bid quotations obtained shall be recorded, open to public inspection, and available by telephone inquiry. v. At least once every year, the City Clerk or his/her designee shall provide a list of the contracts awarded under this process to the City Council and to the general public. The list shall contain the name of the contractor or vendor awarded the contract, the amount of the contract, a brief description of the type of work performed or items purchased under the contract, and the date it was awarded. The list shall also state the location where the bid quotations for these contracts are available for public inspection. E. Determining Lowest Responsible Bidder. Where bidders have not been prequalified, the City shall award the contract for the public works project to the lowest responsible and qualified bidder; provided, all bids may be rejected and the City may call for new bids. F. Cancellation of Invitations for Quotations or Bids. An invitation for quotations or bids may be canceled at the discretion of the department director. The reasons shall be made part of the contract file. Each invitation for quotations or bids issued by the City shall state that the invitation may be canceled. Notice of cancellation shall be sent to all parties that have been provided with a copy of the invitation. The notice shall identify the invitation for quotations or bids and state briefly the reasons for cancellation. G. Limited Public Works Process. The City may use the limited public works process to award public works projects as provided under RCW 39.04.155, as amended. H. Formal Competitive Bid. For public works not using a small works roster, the formal competitive bid process, as defined by applicable `RCW’s, shall be used. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 25 I. Bid Deposit, Performance Bond and Non-collusion Affidavit for Public Works Improvement Projects. Whenever competitive quotes or bids are required, a bidder may be required make a deposit in the form of a certified check or bid bond in an amount equal to not less than five percent of the total bid, which percentage shall be specified in the call for bids. As part of any bid submitted, the bidder shall be required to warrant that the bid is a genuine bid, and that he/she has not entered into collusion with any other bidder or any other person. All public works contractors shall furnish a performance bond in an amount equal to the total amount of the contract and an executed and notarized non-collusion affidavit on a form approved by the City Attorney. In lieu of a performance bond on contracts of $35,000 or less, per RCW 39.08.010, a contractor may choose to have 50 percent of the contract retained for a period of 30 days after the date of final acceptance. VII. Contracts and Agreements for Services. A. Purchasing Limitations. Purchase limitations apply to the cost related to the acquisition of services to fill a specific business need. Cost is inclusive of any required sales tax and related expenses. i. All initial agreements with governmental agencies require council approval; annual renewal or extension of existing contracts and agreements require the Mayor's approval. ii. Contracts and Agreements under $20,000 can be executed by department directors or designee; and contracts/agreements above $20,000 can be executed by the Mayor or designee. B. On-Call Service Contracts. On-call service contracts will be procured with the processes identified in subsection C below. Individual task orders of on-call service contracts shall not exceed $50,000. C. Process. i. Architectural, Landscape Architectural, and Engineering Services Contracts. Procedures set forth in Chapter 39.80 RCW shall be followed for contracts for architectural and engineering services, as defined in RCW 39.80.020. a. Roster. The City of Arlington shall contract with the Municipal Research and Service Center (MRSC) to establish, maintain and manage a current roster of eligible Architectural, Landscape Architectural and Engineering consultants from which the City may solicit bids for contract for providing these services. It shall be the responsibility of the Public Works Staff Accountant to ensure that the contract with MRSC for Small Works and Consultant Rosters remains in force and that all required fees are paid. 1. Contracts Less Than $100,000. Contracts that have an estimated cost of less than $100,000 can be procured using an informal request for qualification process. This process requires the City representative to develop a written scope of the project and any criteria used to select the service provider and then select a qualified contractor from the City's architectural, landscape architectural, and engineering service roster. If the City representative does not choose to use the appropriate CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 26 roster, then a formal request for qualification process must be followed. 2. Contracts Greater Than $100,000. Contracts that have an estimated cost in excess of $100,000 must use a formal request for qualification (RFQ) process. The development of an RFQ along with the proper public notification shall be made in accordance with procedures adopted by the finance department in the best interest of the City; provided, however, that the Mayor may in the following circumstances waive the RFQ process for contracts greater than $100,000, and allow the acquisition of services from the City's architectural, landscape architectural and engineering services roster: a. It is deemed in the best interest of the City to expedite the acquisition of services; or b. It can be demonstrated that there are sufficient consultants on the roster that possess the required qualifications to perform the scope of work; or c. A consultant on the City's roster has previously provided satisfactory service to the City, has previously provided services related to the specific project, and has the qualifications to perform the scope of work. 3. Contract Required. A contract is required to purchase architectural, landscape architectural, and engineering services. ii. Professional and Nonprofessional Services (Services which are not Architectural, Landscape Architectural, and Engineering Services). 1. Contracts Less Than $100,000. Contracts that have an estimated cost of less than $100,000 can be procured using an informal request for proposal process. This process requires the City representative to develop a written scope of the project and any criteria used to select the service provider. The City representative will use this information when selecting the contractor to provide the services. Multiple proposals are optional and at the discretion of the department director. If multiple proposals are used to make a selection, a standard process must be used for obtaining all proposals. 2. Contracts in Excess of $100,000. Contracts that have an estimated cost in excess of $100,000 shall be procured using a formal request for proposal (RFP) process. The development of an RFP along with the proper public notification shall be made in accordance with procedures adopted by the finance department in the best interest of the City. 3. Contract Required. A contract is required to purchase professional and nonprofessional services. D. Sole Source Procurement. A contract for the provision of services may be awarded without complying with the bidding requirements of this policy when the department director determines in writing, subject to Council approval through resolution, after conducting a good faith review of available resources, that there is only one source of the required services. The department director or his/her designee shall conduct negotiations, as appropriate, as to price, terms, and delivery time. To comply with CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 27 RCW 39.04.020, a record of sole source procurement shall be recorded with the County Auditor that lists each contractor's name, the amount and type of each contract, and a listing of the item(s) procured under each contract. VIII. Interlocal joint purchasing agreements. A. Cooperative Purchasing. The City may enter into interlocal governmental cooperative purchasing arrangements with other public agencies similarly authorized under RCW 39.34.030 when the best interests of the City of Arlington would be served thereby. Any cooperative purchasing agreement shall set forth fully the purposes, powers, rights, objectives and responsibilities of the contracting parties and shall be governed by the requirements of State law in regard to competitive bidding, when applicable. The competitive bid process of the original jurisdiction shall substitute for Arlington's. All interlocal joint purchasing agreements shall be presented to the City Council for prior approval. Originating agency’s bid process shall be vetted to assure compliance with all applicable RCW’s. IX. Real property acquisition. A. Real Property - Mayor's Acquisition Authority. The Mayor or designee is authorized, in the following instances, to accept by gift or acquire dedications, easements, rights- of-way, fee estates or other interests in real property for use by or on behalf of the City or any department of the City: i. Minor Acquisitions. Any such acquisition where the estimated value is less than $10,000. ii. All other real property acquisitions will be submitted to the City Council for approval. B. Real Property Mayor's Leasing Authority. i. The Mayor or designee is authorized to execute leases of real property on behalf of the City where the term of the lease does not exceed one year and the consideration does not exceed $10,000 per year as budgeted by the City Council. ii. A lease that exceeds the limits stated in subsection (B)(i) of this section, shall be submitted to the council for approval. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 28 CITY OF ARLINGTON CONTRACT AUTHORIZATION SUMMARY Assumes all expenditures are included in adopted operating and capital improvement budgets. If the expenditure is not adopted in operating and capital improvement budgets, Council authorization of budget amendment is required prior to contract. Department Directors shall not assign signature authority to other staff. CONTRACT TYPE DOLLAR LIMIT BID PROCESS SIGNATURE AUTHORITY COUNCIL APPROVAL Public Works Public Works-single trade or craft Under $40,000 No Department Director No Public Works- single trade of craft Over $40,000 Yes Mayor Yes Public Works-multi trade or craft Under $65,000 No Department Director No Public Works-multi trade or craft Over $65,000 Yes Mayor Yes Small Works Roster Small Works Roster-up to $35,000 Under $35,000 No Department Director No Small Works Roster- from $35,000 up to $150,000 Over $35,000 No Mayor Yes Small Works Roster- from $150,000 up to $300,00 Over $150,000 No Mayor Yes Materials, supplies and equipment Materials, supplies, equipment Between $3,000 and $7,500 No; Requires a minimum of 3 quotes Department Director* No Materials, supplies, equipment Over $7,500 Yes Mayor* Yes With vendor list $7,500- $15,000 No Department Director* No With government bid Over $15,000 No Mayor* Yes Maintenance & non-professional services Maintenance & non- professional services Under $30,000 No; Anything over $3,000 requires a minimum of 3 quotes Department Director No Maintenance & non- professional services Over $30,000 Yes Mayor Yes *All capital purchases over $5,000 require approval of Capital Outlay Request form by Finance Director and Administration Department. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 29 CONTRACT TYPE DOLLAR LIMIT BID PROCESS SIGNATURE AUTHORITY COUNCIL APPROVAL Consulting** Consulting/professional services (legal, human resources, design, development review services) Not to exceed $50,000 Legal, human resources- ongoing contracts; Development review, design services-from consultant roster Mayor Yes Up to $20,000 per instance No Department Director No Over $20,000 per instance No Mayor Yes Consulting/professional services (comprehensive planning, feasibility studies, preliminary design) Under $20,000 Chosen from consultant roster Department Director No Over $20,000 Chosen from consultant roster Mayor Yes Consulting/professional services(construction projects) Under $20,000 Chosen from consultant roster Department Director No Over $20,000 Chosen from consultant roster Mayor Yes **Consulting for; architecture, engineering, surveying and landscape architecture are not subject to bidding requirements. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 30 Cost Allocation The City of Arlington desires to comply with all laws and recommendations in calculating and receiving full cost recovery for services rendered to other funds. Cost allocation is a method to identify and distribute indirect costs. Direct costs are costs assignable to a specific objective, whereas indirect costs are costs incurred for multiple cost objectives or not assignable to a specific cost objective without effort disproportionate to the benefit received. The Washington State Auditor’s Office prescribes the accounting and reporting of local governments in the State of Washington under the Revised Code of Washington (RCW) 43.09.200. Washington State law provides, at RCW 43.09.210. It states in part: Separate accounts shall be kept for each department, public improvement, undertaking, institution, and public service industry under the jurisdiction of every taxing body. All service rendered by, or property transferred from , one department, public improvement, undertaking, institution, or public service industry receiving the same, and no department, public improvement, undertaking institution, or public service industry shall benefit in any financial manner whatever by an appropriation of fund made for the support of another. The RCW does not specifically address how “full value” is to be determined. RCW 35A.33.122/35A.34.205/35.33.123 states: Administration, oversight, or supervision of utility – Reimbursement from utility budget authorized. Whenever any code city apportions a percentage of the city manager’s, administrator’s, or supervisor’s time, or the time of other management or general government staff, for administration, oversight, or supervision of a utility operated by the city, or to provide services to the utility, the utility budget may identify such services and budget for reimbursement of the city’s current expense fund for the value of such services. The Federal Office of Management and Budget (OMB) Circular A-87 OMB Circular A-87 establishes cost principals for State, local, and Indian Tribal Governments for determining costs for Federal Awards. Item 5 of the Circular states that, “The principals are for determining allowable costs only.” In defining allowable costs, the Circular provides a definition of allocable costs at Attachment A, paragraph C.3.a, “A cost is allocable to a particular cost objective if the goods or services involved at chargeable or assignable to such cost objective in accordance with relative benefits received.” The Circular further outlines costs that are allowable for charging the Federal government and distinguishes those that are specifically excluded from recovery. Governmental Accounting Standards Board (GASB) GASB is the independent organization that establishes and improves standards of accounting and financial reporting for U.S. state and local governments. While GASB is not a governmental agency and does not have enforcement authority, compliance with GASB is tested by the Washington State Auditor’s Office’s annual audit of the City. CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 31 Allocated Costs The City has identified a variety of ways to identify and determine an appropriate percentage of costs for allocation to various using funds. These ways include; • Number of employees (FTE’s) in each fund • Total operating expenses (dollar amounts) in each fund (not including debt service and capital improvements) • Total operating revenues (dollar amounts) in each fund (not including beginning fund balances, grant receipts or interfund transfers), and • Number of expenditure line items used in each fund (or transactions, if available) • What Ppercentage of Finance Dept. time is directly attributable to utility billing • Information Technology costs allocated based on number and location of computers supported • Human Resources costs allocated based on number and location of employees The following is the plan to allocate General Fund Service costs - Administrative, Financial (including payroll), Information Services (computer and communications), and Human Resources to the various funds that utilize those services. One of the tasks of the Finance Department is to manage the Utility Billing function for the Water/Sewer and Stormwater Funds. Forty seven percent of all Finance costs are considered to be directly related to the utility funds. The breakdown is 98% of the two Utility Billing Clerks, 90% of the Cashier, 25% of the Accounts Payable Clerk, 5% of the Staff Accountant, 5% of the Assistant Finance Director and 10% of the Finance Director. A large percentage of all Finance costs are considered to be directly related to the utility funds. The percentages stay relatively constant but may vary each year. A time survey will be performed each year to determine the proper allocation to the utilities. Identify the General Fund costs to be allocated. 1) Identify the General Fund costs to be allocated. 2) 1) On an annual basis, the Finance Department will compile the numbers from the above mentioned ways to determine the appropriate percentages to use in allocating General Fund accounting and administrative costs to be allocated to various funds. An average percentage rate will then be determined. 2) Allocate the General Fund Accounting and Administrative, Utility Billing, Information Technology, Human Resources and Payroll Financial and Information Services costs. 3) Review General Fund Legal fees to determine appropriate allocation (if needed) based on number of employees and or billing description. It is important to maintain back-up documentation that indicates how each cost allocation is determined and calculated. 3) The Airport is also authorized, through a Memo Of Understanding with the Federal Aviation Administration, to provide monetary support for Police and Fire/EMS services to the Airport. This is accomplished through a survey of Police hours spent patrolling on and around Formatted: Font color: Red, Strikethrough Formatted: Font color: Red Formatted: Font color: Red Formatted: Indent: Left: 0.25", No bullets or numbering Formatted: Font color: Red, Strikethrough Formatted: Font color: Red Formatted: Strikethrough Formatted: Indent: Left: 0.25", No bullets or numbering Formatted: Font color: Red, Strikethrough Formatted: Strikethrough Formatted: Normal, Indent: Left: 0.5", No bullets or numbering Formatted: Normal, No bullets or numbering CITY OF ARLINGTON, WASHINGTON OPERATING POLICIES 32 the Airport property. A new survey is to be completed within a two year period following the last survey. CITY OF ARLINGTON, WASHINGTON DEBT MANAGEMENT POLICY 33 Debt Management Policy The objectives of the City’s Debt Management Policy will be: • To reduce the use of debt so that debt service payments will be a predictable and manageable part of the operating budget. • To raise capital at the lowest cost, consistent with the need to borrow. This will be accomplished by: - Keeping a high credit rating (while making attempts to strengthen credit rating) - Maintaining a good reputation in the credit markets by adjusting the capital program for regular entry to the bond market and managing the annual budget responsibly. b. Professional service providers (underwriters, financial advisors, bond insurer’s, etc) may be selected through negotiation, RFQ process or City’s procurement policies. c. Debt issues will be sold on competitive basis (except when conditions make a negotiated sale preferable) and awarded to the bidder who produces the lowest interest cost. Revenue bonds can be issued through a negotiated sale when the issue is unusually large, the project is speculative or complex, the issue is a refunding, or the market is unstable. d. The term of long-term debt issued will not exceed the life of the projects financed. Current operations will not be financed with long-term debt. e. Short-term borrowing will not be used for operating purposes. f. The City will comply with its obligation to inform the Municipal Securities Rulemaking Board through the EMMA website (Electronic Municipal Market Access) any and all continuing disclosure documents and annual financial statements. This site is used by the ratings agencies and investors. The City’s annual audited financial report will be sent to EMMA as soon as the State Auditor’s Office issues the report. g. The City shall strive to maintain favorable current credit ratings. h. The City will comply with all statutory debt limitations imposed by the Revised Code of Washington (RCW). The City of Arlington debt will not exceed an aggregated total of 7.5% of the assessed valuation of the taxable property within the City. Compliance with state law and this policy shall be documented each year. The following individual percentages (as defined in state law) shall not be exceeded in any specific debt category: General Debt 2.5% of assessed valuation Utility Debt 2.5% of assessed valuation Open Space and Park facilities 2.5% of assessed valuation CITY OF ARLINGTON, WASHINGTON DEBT MANAGEMENT POLICY 34 i. No debt shall be issued for which the City is not confident that a sufficient, specifically identified revenue source is available for repayment. The Finance Director shall prepare an analytical review for this purpose prior to the issuance of any debt. j. It shall be the policy of the City to limit bonded indebtedness to levels that permit sufficient borrowing to support a reasonable rate of capital programming, permit a level and pace of debt amortization within the City’s ability to pay, and support the City’s credit rating objectives. It shall further be the policy of the City not to exceed 75% of City’s LTGO debt limit, unless approved by the City Council . k. Credit enhancements shall be considered with a cost/benefit analysis for each long-term bond issue. l. Reserve accounts shall be maintained as required by bond ordinances and where deemed advisable by the City Council. The city shall structure such debt service reserves so that they do not violate IRS arbitrage regulations. m. The City will maintain debt service coverage ratios as required for any bond issues. n. Interfund borrowing may be used where such borrowing is effective. Interfund borrowing will be approved and authorized by the City Council. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICY 35 Investment Policy POLICY. It is the policy of the City of Arlington to invest its public funds in a manner which will provide the highest investment return consistent with a high degree of security while meeting the daily cash flow demands of the City and conforming to all state statutes and local ordinances governing the investment of public funds. Cash may, at the discretion of the Finance Director be invested separately by fund or be co-mingled into a common investment portfolio and earnings from such portfolio distributed at least quarterly. The Finance Director is authorized to manage the investments described herein. SCOPE. This investment policy applies to all financial assets of the City except: for assets held in escrow and retirement funds managed by others such as state. City financial assets are accounted for in the City's Annual Financial Report and include: 2.1 Funds 2.1.1 General Fund 2.1.2 Special Revenue Funds 2.1.3 Debt Service Funds 2.1.4 Capital Project Funds 2.1.5 Enterprise Funds 2.1.6 Internal Service Funds 2.1.7 Trust Funds and Agency Funds PRUDENCE. The investments shall be made with judgment and care – under circumstances then prevailing - which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. OBJECTIVE. Funds of the City will be invested in accordance with the Revised Code of Washington (RCW) 35A.40.050, the BARS manual and these policies. The primary objectives, in order of priority, of the City's investment activities shall be as follows: Legality: The City's investments will be in compliance with all statutes governing the investment of public funds and the provisions of all applicable bond ordinances. Safety: Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. Liquidity: The City's investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements, which might be reasonably anticipated. The Finance Director shall maintain adequate liquidity by maintaining a minimum balance in the LGIP. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICY 36 Return on Investment: The City's investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the City's investment risk constraints and the cash flow characteristics of the portfolio. Local Institutions: Local Institutions shall be given preference when they are, in the judgment of the Finance Director, competitive with other institutions. The Finance Director’s investment actions shall be governed by this policy. The Finance Director shall be responsible for all transactions undertaken and shall establish a system of controls to regulate all investment activities, and report promptly to the Council any adverse development with any investment. ETHICS AND CONFLICTS OF INTEREST. The Finance Officer shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. The Finance Officer shall disclose to the Mayor and the Council any material financial interests in financial institutions that conduct business with the City, and she/he shall further disclose any personal financial/investment positions that could be related to the performance of the City's portfolio. The City’s Finance Officer shall subordinate their personal investment transactions to those of the City, particularly with regard to the time of purchases and sales. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS. The Finance Director will maintain a list of financial institutions authorized to provide investment services to the City of Arlington. In addition, a list will also be maintained of approved security broker/dealers selected by credit worthiness, who maintain an office in the State of Washington. These may include "primary" dealers or regional dealers that qualify under US Securities and Exchange Commission Rule 15c3-1 (uniform net capital rule). No public deposit shall be made except in a qualified public depository as established by State laws. At the request of the City, financial institutions, brokers and dealers performing investment services for the City shall provide their most recent financial statements or Consolidated Report of Condition (“call report”) for review. AUTHORIZED & SUITABLE INVESTMENTS. The City may invest in any of the securities identified as eligible investments as defined by RCW 35A.40.050. In general, these consist of: Investment deposits (certificates of deposits) with qualified public depositories as defined in Chapter 39.58 RCW. Certificates, notes or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States whose securities carry full faith and credit guarantees. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICY 37 Obligations of government-sponsored corporations which are eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System. (These include but are not limited to, Federal Home Loan Bank notes and bonds, Federal Farm Credit Bank consolidated notes and bonds, and Federal National Mortgage Association notes.) Prime bankers' acceptances purchased on the secondary market. Repurchase agreements for securities listed above. The Washington Local Government Investment Pool. COLLATERALIZATION. Collateralization will be required on all repurchase agreements so as to anticipate market changes and provide a level of security for all funds, the collateralization level will be 102% of market value of principal and accrued interest. The City chooses to limit collateral to the obligations of the United States Government and its agencies. Collateral will always be held by an independent third party with whom the entity has a current custodial agreement (except certificates of deposits). A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. Certificates of deposit are delivered to and held by the Finance Director until they mature. SAFEKEEPING AND CUSTODY. All investment securities purchased by the City, including collateral on repurchase agreements, shall be held by the City or in safekeeping by the City's custodian bank or a third party bank trust department, acting as agent for the City under the terms of a custody or trustee agreement executed by the bank and by the City. The primary agent shall issue a safekeeping receipt to the City listing the specific instrument, rate, maturity, and other pertinent information. All securities transactions, including collateral for repurchase agreements entered into by the City shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third party custodian designated by the City Finance Director and evidenced by safekeeping receipts. DIVERSIFICATION. The City will diversify its investments by security type and issuer. With the exception of US Treasury and Agencies of the United States government, and the Washington State Local Government Investment Pool, no more than 50% of the City's total investment portfolio will be invested in a single security and no more than 25% will be invested with a single issuer. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICY 38 MAXIMUM MATURITIES. To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than five (5) years from the date of purchase. The average maturity will be consistent with the liquidity objective. However, the City may collateralize its repurchase agreements using longer-dated investments not to exceed 10 years. The City’s reserve funds may be invested in securities not to exceed (10) years if the maturity of such investments is made to coincide as nearly as possible with the expected use of funds. The purpose of permitting a portion of the investments to have longer maturities is to recognize that funds may yield higher yields when invested for longer periods of time. INTERNAL CONTROLS. The Finance Director shall establish a system of internal controls, which shall be reviewed annually by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. PERFORMANCE STANDARDS. The City's investment portfolio will be designed to obtain a market average rate of return during budgetary and economic cycles, taking into account the City's investment risk constraints and cash flow needs. Investment Strategy. The City’s investment strategy is active. As a result, securities are purchased and sold as it best meets the needs of the City as determined by the Finance Director. The Finance Director will be authorized to trade before maturity if it is in the best interest of the City to do so. REPORTING. The Finance Director will determine what investment information will be included in the monthly financial report. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICIES GLOSSARY 39 ACCRUED INTEREST: The interest accumulated on a bond since its dated date or the most recent date to which interest has been paid by the City. The buyer of the bond pays the market price and accrued interest, which is payable to the seller. AGENCIES: Federal agency securities. ASKED: The price at which securities are offered. BANKERS' ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BOND: A long-term debt security (IOU) issued by a government or corporation. Generally pays a stated fixed rate of interest, and returns the face value at maturity. BOOK VALUE: The amount at which an asset is carried on the books of the owner. The book value of an asset does not necessarily have a significant relationship to market value. BROKER: A middleman who brings buyers and sellers together for a commission paid by the initiator of the transaction or by both sides; they do not position. In the money market, brokers are active in markets in which banks buy and sell money and in interdealer markets. CALL OPTION: The right to prepay or redeem a security at a predetermined price on or after a specified future date that is earlier than its scheduled maturity date. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity earning a specified rate of return evidenced by a certificate. Certificates of Deposit bear rates of interest in line with money market rates current at the time of issuance. COLLATERAL: Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. CONFIRMATION: A document used to state and supplement in writing the terms of a transaction which have previously been agreed to verbally. COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date (not used since 1982). CUSIP NUMBER (COMMITTEE OR UNIFORM SECURITIES IDENTIFICATION PROCEDURES): An identifying number assigned to a publicly traded security. A nine-digit code is permanently assigned to each issue and is generally printed on face of the security if it is in physical form. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICIES GLOSSARY 40 DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his or her own account. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt (also called free). Delivery versus payment is delivery of securities simultaneously with an exchange of money for the securities. Delivery versus receipt is delivery of securities simultaneously with an exchange of a signed receipt for the securities. DISCOUNT: There is "original issue discount" and "market discount." Original issue discount is the difference between the cost1price of a security when first offered for sale to the general public and its face value at maturity when quoted at lower than face value. Original issue discount is treated as interest. Market discount is the difference between principal amount of an outstanding security (reduced by any original issue discount) and the value of that security in the then-current market (if lower than its principal amount). If a security is bought at a market discount and later sold at a gain, the gain is taxable income. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. FARM CREDIT DISCOUNT NOTES AND BONDS: Secured joint obligations of Farm Credit Banks that are issued with a minimum face value of $50,000 with maturities ranging from 5 to 360 days. FEDERAL CREDIT AGENCIES: Agencies of the Federal Government set up to supply credit to various classes of institutions and individuals, e.g., S&L's, small business firms, students, farmers, farm cooperatives, and exporters. FEDERAL FUNDS RATE: The rate of interest at which Federal funds are traded between banks. This rate is currently pegged by the Federal Reserve through open market operations. FEDERAL HOME LOAN BANKS (FHLB): The institutions that regulate and lend to savings and loan associations. The Federal Home Loan Banks play a role analogous to that played by the Federal Reserve Banks vis-à-vis member commercial banks. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is the corporation's purchases include a variety of adjustable mortgages and second loans in addition to fixed-rate mortgages FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICIES GLOSSARY 41 LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase -- reverse purchase agreements that establishes each party's rights in the transactions. A master agreement will often specify, among other things the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. PORTFOLIO: A collection of securities held by an investor. PRIMARY DEALER: A group of government securities dealers that submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC) registered securities broker-dealers, banks, and a few unregulated firms. PRINCIPAL: The stated face amount of an instrument, exclusive of accrued interest. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary such as a trustee may invest money only in a list of securities selected by the state-the-so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a product person of discretion and intelligence who is seeking a reasonable income and preservation of capital. QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the Public Deposit Protection Commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. REPURCHASE AGREEMENT (RP or REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money, that is, increasing bank reserves. CITY OF ARLINGTON, WASHINGTON INVESTMENT MANAGEMENT POLICIES GLOSSARY 42 SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection. SEC RULE 15c3-1: SEC uniform net capital rule requiring brokers and dealers to maintain certain amounts of net capitol. SECURITIES & EXCHANGE COMMISSION: Agency created by congress to protect investors in securities transactions by administering securities legislation. TREASURY BILLS: A non-interest bearing discount security issued by the US Treasury to finance the national debt. Most bills are issued to mature in three months, six months or one year. TREASURY BONDS: Long-term US Treasury securities having initial maturities of more than ten years. TREASURY NOTES: Intermediate term coupon bearing U.S. Treasury securities having initial maturities of from one to ten years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. YIELD: The rate of annual income return on an investment expressed as a percentage. Income Yield is obtained by dividing the current dollar income by the current market price for the security. Net Yield or Yield to Maturity is the current income Yield minus any premium above par or plus any discount in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. City of Arlington Council Agenda Bill Item: NB #5 Attachment G COUNCIL MEETING DATE: May 5, 2014 SUBJECT: Resolution to authorize participation in the Local Government Investment Pool (LGIP) ATTACHMENTS: - Updated Resolution and Fund Prospectus - Copy of resolution currently on file with the LGIP DEPARTMENT OF ORIGIN Finance - Jim Chase EXPENDITURES REQUESTED: N/A BUDGET CATEGORY: N/A LEGAL REVIEW: DESCRIPTION: The State Treasurer’s Office STO) oversees the Local Government Invest Pool (LGIP) utilized by many government entities (Cities and Counties) in the State. The LGIP provides a short term investment vehicle for idle cash. The STO has provided an updated resolution for us to adopt. It will replace the current resolution that was adopted on July 1, 2013. The new resolution changing some wording (mainly replacing “deposits” to “contributions” and adding “withdrawals”). They have also created a Prospectus more fully describing the Fund. The Prospectus includes a provision for them to create longer term investment options. HISTORY: The City has used the Local Government Investment Pool for many years as a part of our Investment portfolio. It is used like a savings account, in that we can transfer dollars to and from our checking account on a daily basis for cash flow purposes. This is a very short term investing option. ALTERNATIVES If we do not provide an updated Resolution, we would no longer be allowed to participate in the Fund. RECOMMENDED MOTION: I move to approve the proposed resolution authorizing the City’s participation in the Local Government Investment Pool. RESOLUTION # ___ RESOLUTION AUTHORIZING INVESTMENT OF CITY OF ARLINGTON MONIES IN THE LOCAL GOVERNMENT INVESTMENT POOL WHEREAS, pursuant to Chapter 294, Laws of 1986, the Legislature created a trust fund to be known as the public funds investment account (commonly referred to as the Local Government Investment Pool (LGIP)) for the contribution and withdrawal deposit of money by an authorized governmental entity for purposes of investment by the State Treasurer; and WHEREAS, from time to time it may be advantageous to the authorized governmental entity, City of Arlington, the “governmental entity”, to contribute deposit funds available for investment in the LGIP; and WHEREAS, the investment strategy for the LGIP is set forth in its policies and procedures; and WHEREAS, any contributions or withdrawals to or from the LGIP deposits made on behalf of the governmental entity shall be first duly authorized by the Arlington City Council, the “governing body” or any designee of the governing body pursuant to of the governmental entity, in this resolution or a subsequent resolution, and a certified copy of said resolution shall be filed with the State Treasurer’s Office; and WHEREAS, the governing body and any designee appointed by the governing body with authority to contribute or withdraw funds of the governmental entity has received and read a copy of the prospectus and understands the risks and limitations of investing in the LGIP; and WHEREAS, the governing body attests by the signature of its members that it is duly authorized and empowered to enter into this agreement, to direct the contribution or withdrawal deposit of governmental entity monies, and to delegate certain authority to make adjustments to the incorporated transactional forms, to the individuals designated herein. NOW THEREFORE, BE IT RESOLVED that the governing body of the City of Arlington does hereby authorize the contribution deposit and withdrawal of governmental entity monies in the LGIP in the manner prescribed by law, rule, and prospectus applicable policies and procedures for the LGIP. BE IT FURTHER RESOLVED that the governing body has approved the Local Government Investment Pool Transaction Authorization Form (Form) as completed by City of Arlington and incorporates said form into this resolution by reference and does hereby attest to its accuracy. BE IT FURTHER RESOLVED that the governmental entity designates James W. Chase, Finance Director, the “authorized individual” to authorize all amendments, changes, or alterations to the Form or any other documentation including the designation of designating other individuals to make contributions deposits and withdrawals on behalf of the governmental entity. BE IT FURTHER RESOLVED that this delegation ends upon the written notice, by any method set forth in the prospectus, of the governing body that the authorized individual has been terminated or that his or her delegation has been revoked termination of the authorized individual’s relationship with the governmental entity or further action by the governing body terminating the delegation. The Office of the State Treasurer will rely solely on the governing body to provide notice of such revocation and will rely on the authorized individual’s instructions until such time as said notice has been provided. It is the responsibility of the governing body to notify the State Treasurer’s Office immediately when any action has been taken to end this delegation. BE IT FURTHER RESOLVED that the Form as incorporated into this resolution or hereafter amended by delegated authority, or any other documentation signed or otherwise approved by the authorized individual shall remain in effect after revocation of the authorized individual’s delegated authority, except to the extent that the authorized individual whose delegation had been terminated shall not be permitted to make further withdrawals or contributions to the LGIP on behalf of the governmental entity. should the authorized individual’s delegate authority be terminated or otherwise end. No amendments, changes, or alterations shall be made to the Form or any other documentation until the entity passes a new resolution naming a new authorized individual; and BE IT FURTHER RESOLVED that the governing body acknowledges that it has received, read, and understood the prospectus as provided by the Office of the State Treasurer. In addition, the governing body agrees that a copy of the prospectus will be provided to any person delegated or otherwise authorized to make contributions or withdrawals into or out of the LGIP and that said individuals will be required to read the prospectus prior to making any withdrawals or contributions or any further withdrawals of contributions if authorizations are already in place. neither the State of Washington nor the state treasurer guarantees any investment made by the governmental entity in the LGIP and it is possible to lose money by investing in the LGIP. Therefore, the governing body agrees to hold the State of Washington, the state treasurer, and the LGIP harmless from any investment losses incurred as a result of investment with the LGIP. PASSED AND ADOPTED by the City Council of the City of Arlington in the State of Washington on this 21st day of April, 2014. ______________________________ Barbara Tolbert, Mayor ATTEST: ___________________________ Kristin Banfield, City Clerk APPROVED AS TO FORM: ______________________________ Steven J. Peiffle, City Attorney City of Arlington Council Agenda Bill Item: NB #6 Attachment H COUNCIL MEETING DATE: May 5, 2014 Regular Meeting SUBJECT: Short Term Interfund Loans ATTACHMENTS: Resolution DEPARTMENT OF ORIGIN Finance Department, Jim Chase, Finance Director EXPENDITURES REQUESTED: N/A BUDGET CATEGORY: N/A LEGAL REVIEW: DESCRIPTION: The Emergency Medical Services Fund needed short-term interfund loans in the amount of $22,256 at the end of January, $156,280 at the end of February and $107,180 at the end of March to prevent the fund from having a negative cash balance. In accordance with Ord. 2012-005, the Finance Director is authorized to make such loans. A loan resolution is also attached, documenting all the loans and the repayment thereof. Those loans will be repaid when the first half property taxes are received. HISTORY: Previous to the Interfund Loan Program, various funds of the City were allowed to have a negative cash balance at the end of a month. With the Loan Program, funds that provide the loans are paid interest by the borrowing funds. The interest rate is tied to the monthly Local Government Investment Pool rate managed by the State Treasurer’s Office. ALTERNATIVES Do nothing and allow fund to go into the red, thereby taking advantage of other funds by “using” pooled funds and not paying interest. This could be in violation of RCW 43.09.210 which essentially states that no fund should unfairly benefit from another. RECOMMENDED MOTION: I move to adopt the proposed resolution authorizing the repayment of the short term Interfund loans to the Emergency Medical Services Fund. RESOLUTION # ___ RESOLUTION AUTHORIZING A SHORT TERM INTERFUND LOAN TO THE EMERGENCY MEDICAL SERVICES FUND FROM THE GROWTH MANAGEMENT FUND WHEREAS, Ordinance 2012-005 authorizes the Finance Director to manage the Short- Term Interfund Loan Program for the City; and WHEREAS, Certain Funds that are the recipient of Property Taxes could be subject to a short-fall of ending fund balances at the end of any month prior to actually receiving property tax dollars; and WHEREAS, during those periods prior to Property tax dollars being received, an operating fund may require a short term interfund loan to cover a negative ending fund balance until property taxes are received, the majority being received in April/May and October/November of each year; and WHEREAS, a loan was needed at the end of January, February and March in the total amount of $285,716; and WHEREAS, the Emergency Medical Services Fund should pay interest on the loan tied to the monthly Local Government Investment Pool rate managed by the State Treasurer’s Office. WHEREAS, the loans will be repaid, with interest, on or before May 31, 2014. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Arlington does hereby ratify and approve the Short Term Interfund Loans made in January, February and March 2014 from the Growth Management Fund to the Emergency Medical Services Fund, PASSED AND ADOPTED by the City Council of the City of Arlington in the State of Washington on this 5th day of May, 2014. CITY OF ARLINGTON _______________________ Barbara Tolbert, Mayor ATTEST: _______________________ Kristin Banfield, City Clerk APPROVED AS TO FORM: _________________________ Steve Peiffle, City Attorney