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2021 City Manager Proposed Budget
CITY OF PORT TOWNSEND VISION
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CITY OF PORT TOWNSEND MISSION STATEMENT
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Plan.
THE 2021 CITY MANAGER BUDGET AND 2020 REVIEW
Message from the City Manager:
This has been a difficult year for us all. Our community has been hit hard by the
unfolding pandemic and our lives and livelihoods have changed in ways we could have
barely imagined just a year ago. All of us – our people, our organizations, our schools,
our businesses, our events – have struggled as we navigate the changing and uncertain
landscape of new required behaviors and practices, state and federal direction, and
myriad connected impacts.
Despite these impacts, our 2020 budget ended up about where we expected, thanks to
the quick action by my team to dramatically reduce expenditures and temporarily reduce
staffing. Doing so had an impact on the service levels that you are used to, but along
with operational agility and new innovations, our actions helped us endure 2020 without
need for an operational supplemental budget request or a need to dip into our reserve
balances. It wasn’t easy for any of us, but we got there.
In other 2020 budget news, we also worked in deep partnership with the County, Port,
PUD and wider community on deploying CARES Act funding to needed individuals,
organizations and businesses as well as preparing a COVID recovery and resilience
plan. Those efforts will undoubtedly help us map our collective journey forward and
ensure our eventual recovery and greater resilience.
This coming year, though, we expect a similar challenge and we start again from square
one. Even if the pandemic abates early or midway through 2021, we anticipate a longer
tail of economic impacts to the region, which in turn reduces the City’s resources and
abilities to deliver you services. Therefore, my team and I have been working hard to
prioritize an already spartan budget, focusing on those areas where we anticipate the
2021 Budget Section 1 - Page 1 of 16
2021 City Manager Proposed Budget
most revenue reductions based on the pandemic – particularly the streets, community
services and general funds. You’ll see that this preliminary budget includes delaying
and reducing services like street maintenance, street striping, and pool operations. It
includes freezing currently vacant positions like our streets lead operator and
accountant. It also includes eliminating seasonal parks and streets workers and laying
off three current full-time positions.
Simply put, each reduction will have a serious negative impact, so we have been in the
unsettling position of trying to minimize those negatives and preserve the absolute
essentials. It’s not been easy, but the team has worked tirelessly, creatively, and
selflessly and this preliminary budget reflects those hard efforts.
If it wasn’t so before, COVID has made it abundantly clear that there are structural and
systemic instabilities that don’t properly or fairly serve all in our community – and that
the most vulnerable among us take a disproportionate share of the pain. This is true for
our future budget as well, with structural instabilities that we are unable to ignore. A
commitment to financial sustainability requires us to take a more thoughtful look at the
long-term foundation while we fix the metaphorical windows or walls.
It’s a lesson we can’t afford to learn twice. Without making any changes, our current
approach is simply not financial sustainable in the long run as future requirements
increase and future resources decrease. Luckily, we’re able to anticipate this now and
thoughtfully prepare over the coming years. Our 2021 budget begins this journey, even
in the face of the additional pressures of the pandemic. During 2021, we’ll be calling on
community members to engage with us on how to creatively, collaborative and
courageously build deeper sustainability and resilience – both financial and otherwise.
We anticipate a financial sustainability task force to be launched so stay tuned.
I hope such a pragmatic and future-focused approach resonates with many of you and
compels you to engage with us on the important work to come. I know that the City
team and our elected members are committed to deliver our very best to you, and to
work in partnership as we navigate ahead to a brighter future.
John Mauro
City Manager
2021 Budget Section 1 - Page 2 of 16
2021 City Manager Proposed Budget
2021 Proposed Budget
The budget is adopted at the fund level. The chart below (which represents Exhibit A to
the budget ordinance) provides an overview of the revenues, expenditures and
projected ending fund balances:
2020 2021 2021 2021 2021
Ending Fund
Balance
Proposed
Revenues
Propsed
Expenses
Proposed
Rev vs. Exp
Projected
Ending Fund
Balance
GENERAL FUND 1,949,436 9,933,648 9,933,245 403 1,949,839
Drug Enforc. / Contingency 187,160 500 - 500 187,660
Street 345,998 902,854 898,395 4,459 350,457
Library 348,951 1,148,585 1,125,766 22,819 371,770
Real Estate Excise Tax 408,010 510,900 510,000 900 408,910
Lodging Tax 65,436 324,627 321,133 3,494 68,930
Fire / EMS 2,278 20,000 20,000 - 2,278
Affordable Housing 41,383 95,749 92,896 2,853 44,236
Community Development Block Grant 150,163 10,401 - 10,401 160,564
Community Services 214,779 1,938,624 1,935,703 2,921 217,700
TOTAL SPECIAL REV FUNDS 1,764,157 4,952,240 4,903,893 48,347 1,812,504
DEBT SERVICE FUND 90,675 1,704,704 1,704,467 237 90,912
General Capital 216,357 34,524 150,317 (115,793) 100,564
Street Capital 95,976 1,770,837 1,770,837 - 95,976
CAPITAL PROJECTS FUNDS 312,332 1,805,361 1,921,154 (115,793) 196,539
Golf Course 2,951 7,213 7,785 (572) 2,379
System Development 715,670 310,314 355,000 (44,686) 670,984
Water / Sewer Operations 2,727,702 8,182,225 8,134,490 47,735 2,775,436
Water / Sewer Capital 3,304,865 2,925,179 3,406,762 (481,583) 2,823,282
Storm Operations 399,889 1,120,512 1,112,501 8,011 407,900
Storm Capital 12 244,014 244,014 - 12
ENTERPRISE FUNDS 7,151,088 12,789,457 13,260,552 (471,095) 6,679,992
Public Works Admin 46,073 509,790 509,667 123 46,196
IT Equipment O&M / Replacement 58,757 349,313 349,309 4 58,762
Fleet Equipment O&M / Replacement 1,738,408 776,823 594,079 182,744 1,921,151
Engineering Services 141,843 984,685 853,405 131,280 273,123
Unemployment Self-Insurance 25,763 103,605 103,540 65 25,828
INTERNAL SERVICE FUNDS 2,010,844 2,724,216 2,410,000 314,216 2,325,060
Firemen's Pension 281,218 34,905 29,143 5,762 286,980
Custodial / Refundable Deposits (47,654) - - - (47,654)
Memorial Fund 2,000 - - - 2,000
FIDUCIARY FUNDS 235,564 34,905 29,143 5,762 241,326
GRAND TOTAL $13,514,095 $33,944,531 $34,162,454 ($217,923)$13,296,172
CITY OF PORT TOWNSEND
2021 PROPOSED BUDGET FUND SUMMARY
2021 Budget Section 1 - Page 3 of 16
2021 City Manager Proposed Budget
2021 BUDGET ASSUMPTIONS
KEY REVENUE ASSUMPTIONS
The City’s Property Tax Levy for 2021 is proposed at $2,832,000, which includes the
allowable statutory increase of 1.0% plus an adjustment for the value of new
construction and refunds. The 1% statutory increase is budgeted at $26,051 for 2021.
The new construction for the City is estimated at $18,187,660. Property values in the
City grew in the aggregate by 7.9% or approximately $148,000,000. The General Levy
totals $1,535,000. The General Levy is allocated to Public Safety & General Services,
Community Services (Parks, Trails, Facilities), Affordable Housing initiatives, Debt
Service and Fireman’s Pension. The Library Lid Lift component of the levy is budgeted
at $1,147,000 and is available to be used for library operations.
An excess property tax assessment of approximately $150,000 related to the Mountain
View Commons voted tax assessment will be levied to fund 50% of the annual debt
service for this voted bond.
The City has $908,724 of banked levy capacity related to the annexation of City fire
services into the East Jefferson Fire District service area. Of that amount, the City
Council’s adopted post-annexation policy would allow the City to levy one-third, or
$302,908 of this banked capacity in 2020 for 2021 taxes. The City does not propose to
levy any of this banked capacity in 2020.
Below is a chart showing the distribution of property taxes:
2021 Budget Section 1 - Page 4 of 16
2021 City Manager Proposed Budget
Retail Sales Taxes in 2020 are projected to come in at 13.5% below 2019 and 15.4%
below the adopted budget due to the economic impacts of COVID-19. Retail sales in
most industries have been negatively impacted. Construction activity can typically skew
“normal” revenue from retail sales, business and occupation taxes, permitting fees and
special purpose sales taxes trends, so this revenue source is closely monitored to
determine the “one-time” revenues, however, construction activity also declined in 2020.
An internal analysis of sales tax data indicates the largest decrease in 2020 is due to a
53.4% decline in accommodation and food revenues. There has been an uptick in retail
trade revenues of 9.6%, which is most likely attributable to increased online sales during
the pandemic.
The Market Place Fairness Act went into effect on January 1, 2018 (EHB 2163). This
act imposes retail sales tax on remote sellers in Washington State. The revenue related
to this Act is included in the City’s total retail sales and is not reported separately by the
State.
How does this translate to Port Townsend? In 2021, the City’s budget anticipates sales
tax revenue growth of 6.4% with some expectation for the industry activity to start
trending back towards more normal economic conditions.
Below is a chart demonstrating the trend of retail sales taxes over the last five years
showing the forecasted growth for 2020, though down 10.8% from the peak of 2018.
2021 Budget Section 1 - Page 5 of 16
2021 City Manager Proposed Budget
Reviewing the trend by industry specific to Port Townsend shows how industries such
as retail trade is demonstrating steady growth, while accommodation/food and
construction are more unpredictable, further validating conservative forecasting for this
component of revenue. See below for reference:
Lodging Taxes are projected at $324,000 for 2021, which is 40.0% lower than the
2020 adopted budget of $540,0000. The 2021 forecast is 35.0% higher than the 2020
projection. Expenditures are restricted to marketing and tourism related infrastructure.
The chart below depicts the significant impact COVID-19 has had on tourism related
taxes here in Port Townsend:
2021 Budget Section 1 - Page 6 of 16
2021 City Manager Proposed Budget
Business & Occupation Taxes are projected at $774,900 for 2021, which is 10.0%
lower than 2020 adopted budget. The 2021 forecast is 6.9% higher than the 2020
projections.
Real Estate Excise Taxes (REET) year to date collections in 2020 have been
weakened due to COVID-19, trailing behind 2019 collections by 28.9%. The 2020
REET revenues are projected to be $459,000 or 10.0% less than adopted budget. 2021
REET revenues are budgeted at $509,900. It is difficult to forecast when large
commercial properties or large dollar home sales will occur, which can
disproportionately distort this revenue source. These funds are restricted to capital
improvements or debt service, which reduces the City’s reliance on general fund dollars
to make up city matching project funds.
Below is a chart showing the trend in Business & Occupation and REET Taxes. REET
revenue is much more volatile and dependent on real estate sales versus the mostly
steady trend in Business & Occupation Taxes:
Utility Tax revenues in the proposed 2021 budget are based on a 22% gross receipt
public utility tax for all city water, sewer, storm water and garbage services. In 2018,
City Council renewed the additional 2% tax for five more years (See Ordinance 3203).
The additional 2% currently supports two Community Services maintenance workers to
serve Parks and the Mountain View facility. Total public utility tax forecasted for 2021 is
$1,781,089 and is split amount General Services (45%), Public Safety (7%), Streets
(39%) and Community Services (9%).
Private utility tax rates are 6% of the private utility revenue. The 2021 telephone and
electric private utility taxes are estimated to be $816,920. The electric and telephone
utility taxes are projected to be flat compared to 2020 projections.
2021 Budget Section 1 - Page 7 of 16
2021 City Manager Proposed Budget
State Shared Revenues are based on distributions that are shared via state revenue
assessments. The City receives distributions for liquor profits and tax, criminal justice
and marijuana tax distributions, fuel and multi-modal gas taxes, which primarily support
public safety and streets. Some of these distributions are population based with the
City’s population for 2020 listed by the Office of Financial Management as 9,665 (a
0.57% increase from 2019’s population of 9,610). 2021 budgeted state shared revenue
is $370,739 or $60,639 more than 2020 projected of $310,100.
Overhead Cost Recovery is projected to increase by approximately $118,737, or 7.8%
in 2021. This increase is the result of several factors that are inputs in the City’s
adopted overhead cost recovery model. The allocation model looks back two years to
recover overhead costs occurring in 2019 for 2021. The increased revenue in 2021 is
primarily the result of allocating more overhead to the Streets, Water Sewer, and the
Storm Funds due to increased property valuations, debt service costs and council bills
in those funds.
Utility Revenues (Water, Sewer and Stormwater) are budgeted at the adopted rate
increase per Ordinance 3199 and 3236. The City uses utility rate models provided by
FCS Consulting Group, to analyze whether our utility rates fully support capital
infrastructure and operations of water, sewer, and stormwater.
Water and sewer operating, and maintenance rates are scheduled to increase 3.0%.
For 2021, the surcharge for water will not increase, but the surcharge for sewer will
increase from 2020, with the rates for water remaining at $22 per account per month
and sewer rates going to $9.00 per account per month. The revenue calculations for
2021 also include an increase of 1% for new accounts added to the utility. These
assumptions are consistent with the rate model that has been prepared by FCS
Consulting Group.
Stormwater operating and maintenance rates are schedule to increase 4.4%. The
stormwater capital surcharge will not increase in 2021, remaining at $6 per account per
month. The budget for 2021 includes this anticipated base rate increase and a 1%
account growth. These assumptions are also consistent with the rate model that has
been prepared by FCS Consulting Group.
Although there are schedule rate increases, the 2021 utility revenues are budgeted to
be mostly flat to 2020 budgeted utility revenues due to the increased number of past
due accounts related to COVID-19.
2021 Budget Section 1 - Page 8 of 16
2021 City Manager Proposed Budget
In 2021, the City is projected to have a total of 5,069 water/sewer accounts with 460, or
9.1%, of those projected to be commercial accounts. Below is a chart demonstrating the
growth in commercial and residential water/sewer accounts from 2017 through
projected 2021:
Total water / sewer / storm revenue is forecasted to be $9,302,737 as compared to
$9,194,584 in 2020, or a 1.2% increase. As noted earlier, this represents scheduled rate
increases and 1% account growth.
Capital Revenues provide substantial funding for general government, street and utility
projects through state and federal grants and Department of Ecology loan proceeds. A
smaller amount of capital funding may be administered with inter-fund loans, transfers,
bank lines of credit or other debt financing. Additional details regarding capital projects
are provided later in this document.
Total Revenues are budgeted for 2021 at $33,944,531, comprised of capital funding of
$5,284,868, fiduciary fund revenue of $34,905, and operating revenue of $28,624,758.
2021 Budget Section 1 - Page 9 of 16
2021 City Manager Proposed Budget
KEY EXPENDITURE ASSUMPTIONS
Labor
Personnel Wages & Benefits represent a significant portion of the City’s operating
expenses at $11,001,908 or 39.0% of proposed operating costs, $28,206,381.
Removing internal transfers and debt service from operating costs, staffing is 52.2% of
the total. The City continues to balance the need to retain qualified, capable staff by
providing fair and competitive wages while also maintaining appropriate service levels.
2021 will continue to present staffing challenges with the financial impacts resulting from
COVID-19.
The 2021 budget proposes a 11.75 reduction in staffing positions compared to the 2020
budgeted positions. This reduction includes full time, part-time, and temporary
positions.
2021 Budget Section 1 - Page 10 of 16
2021 City Manager Proposed Budget
Total budgeted positions in 2021 are 95.48. The positions are outlined by position in
the chart below:
Employee groups include three sectors, the Police Collective Bargaining Unit,
General Collective Bargaining Unit, and non-represented personnel.
The Police Collective Bargaining Unit contract was extended through December 31,
2021 and wages were contracted to increase 2.0% for 2021. Assuming some
vacancies in 2021, we budgeted 13.83 full time officers and 0.75 part-time reserve
officers. Recruiting and retaining officers continues to be a challenge for Port
Townsend and nationally. Two of the three new police officers hired in October 2019
have graduated from the police academy and have been sworn in.
The General Collective Bargaining Unit expires December 31, 2021 and negotiations for
the next agreement will start to take place in the first half of 2021. The current
agreement provides for a wage increase of 2.0% in the 2021 budget.
The City budgeted a 2.0% increase, in line with the general government negotiated
wage agreement, for non-represented staff. The non- represented employees include
library, part-time pool, confidential administrative, legal and leadership positions which
total 32 positions in the 2021 budget. A full list of authorized positions along with the
position classification salary schedule approved by council in 2021 is included in the
Staffing and Compensation section of the Proposed Budget Book.
2021 Budget Section 1 - Page 11 of 16
2021 City Manager Proposed Budget
Benefits offered to employees include medical, dental, vision, long-term disability, life
insurance and retirement. Medical costs for 2021 are forecast to increase by
approximately 4.0% for the AWC benefit plan (general government non-represented
employees), less the 2.0% well-city discount. To achieve the discount, AWC employees
participate in a variety of wellness activities that promote a healthy lifestyle.
The Teamsters’ benefit plan which covers both the Police and General Government
union employees is budgeted to increase 1.5% in 2021. Retirement contributions for
most employees (PERS) are funded at 12.97% of eligible employee wages. Police
officers are covered by the LEOFF retirement system at a rate of 5.33% of eligible
employee wages. This participation rate is mandated by the Washington State
Retirement System. Employees also have the choice of enrolling in either the ICMA or
Washington State deferred compensation program which is not employer funded.
The 2021 budget does not include Seasonal Staff for Streets/Storm/Wastewater
Collection and for Parks maintenance. Typically, Streets/Storm/Wastewater Collection
and Parks maintenance each hire 2 seasonal workers between May and October and
are equivalent to 1.35 full time employees.
Washington State minimum wage increases in 2021 to $13.69 per hour, which is a
$0.19 per hour, or 1.4%, increase. This increase impacts pool and seasonal wage
rates. Additionally, the increase begins to impact higher level position through wage
compression. Wage compression occurs when pay adjustments regardless of
experience, skills or seniority increase the base wage and bring those wages closer to
the wages of more senior, experienced, skilled positions. Human Resource will
continue to monitor the impact of minimum wage adjustments on all City positions.
Non-Labor
Operating non-labor expenditures are budgeted to be $416,612 or 2.4% less than
2020. Below is a list of budget expense reduction highlights as compared to the 2020
adopted budget:
Items Proposed for Reduction in the 2021 Budget:
• $154,000 – Forgoing non-required training and travel.
• $30,000 – Delaying computer purchases to future years.
• $70,000 – Delaying police vehicle purchase to future years.
• $45,000 – Implementing a Dark Sky Initiative, reducing number of streetlights.
• $103,000 – Delaying street maintenance and striping to future years.
• $4,500 – Delaying the purchase of small tools and equipment to future years.
• $7,500 – Reducing supplies due to a limited pool reopen.
2021 Budget Section 1 - Page 12 of 16
2021 City Manager Proposed Budget
2021 Proposed Total Expenditures of $34,162,454 include all operating fund
appropriations in addition to water, sewer, general and street capital funds. Transfers
make up $6,367,829 or 18.7% of total expenditures. Transfers are internal accounting
transactions expended in one fund and recognized as an equivalent revenue in another
fund. Transfers in the chart below include a $1,070,000 operating fund transfer from the
General Fund to support the Community Services Fund, $1,123,317 transfers from
various funds to support the GO Debt Service Payments, $1,224,801 in utility debt
service transfers, $854,923 transfers for utility tax, $216,854 in various Fund transfers,
and $1,877,934 in capital transfers.
See the chart below for a breakout of Total proposed appropriations in 2021:
2021 Proposed Operating Expenditures are $28,206,381 (not including fiduciary
funds and capital funds, which include General and Street Capital, System
Development, Water / Sewer Capital, Transmission Line, Utility Debt Service and Storm
Capital Funds).
Operating expenditures are proposed to be $425,722 less than the 2020 adopted
operating expenditures or a decrease of 1.5%. Highlights of labor and non-labor
operating expenditures were noted above.
2021 Budget Section 1 - Page 13 of 16
2021 City Manager Proposed Budget
See the breakdown below of proposed 2021 Operating Expenses by Type:
2021 CAPITAL PROJECTS
The proposed 2021 budget has a variety of capital projects that add both new
infrastructure investment and improves aging infrastructure. A breakdown of planned
projects is listed below and explained in more detail in the Capital Improvement Plan
section of the budget document.
General Government and Street Capital Projects:
• Discovery Road improvements primarily funded by WSDOT grants.
Water/Sewer and Stormwater Utility Capital Projects included in the 2021 capital
budget that are currently underway and have secured funding sources:
• Water line replacements – funded with capital surcharge fees.
• Sewer Outfall project funded with System Development and Department of
Ecology Loans/Grants.
• Gaines Street Pump Station corrosion control funded with sewer capital
surcharge fees and system development fund reserves.
• CERB regional stormwater project funded with CERB Loan funds and storm
capital surcharge fees.
• Discovery Road utility improvements primarily funded by capital surcharge fees.
2021 Budget Section 1 - Page 14 of 16
2021 City Manager Proposed Budget
2020 Projected Ending Fund Summary
2019 2020 2020 2020 2020 2020 2020 2020 2020
Ending Fund
Balance
Adopted
Revenues
Amended
Revenues
Adopted
Expenses
Amended
Expenses
Adopted
Rev vs.
Exp
Amended
Rev vs.
Exp
Proposed
Supplemental
Appropriation
Projected
Ending Fund
Balance
GENERAL FUND 1,914,034 10,414,829 9,451,698 10,413,656 9,416,296 1,173 35,402 - 1,949,436
Drug Enforc. / Contingency 185,867 3,000 1,293 - - 3,000 1,293 - 187,160
Street 320,221 957,247 870,018 957,247 844,241 - 25,777 - 345,998
Library 253,200 1,127,000 1,152,203 1,146,266 1,056,452 (19,266) 95,751 - 348,951
Real Estate Excise Tax 453,932 516,000 464,078 570,000 510,000 (54,000) (45,922) - 408,010
Lodging Tax 270,864 543,500 241,696 563,624 447,124 (20,124) (205,428) - 65,436
Fire / EMS 7,242 15,210 25,036 20,000 30,000 (4,790) (4,964) 10,000 2,278
Affordable Housing 31,184 80,008 74,857 74,658 64,658 5,350 10,199 - 41,383
Community Development Block Grant 192,350 13,020 10,813 53,000 53,000 (39,980) (42,187) - 150,163
Community Services 116,120 2,219,486 1,900,353 2,231,920 1,801,694 (12,434) 98,659 - 214,779
TOTAL SPECIAL REV FUNDS 1,830,979 5,474,471 4,740,347 5,616,715 4,807,169 (142,244) (66,822) 10,000 1,764,157
DEBT SERVICE FUND 96,823 1,710,400 5,364,753 1,712,551 5,370,901 (2,151) (6,148) 3,658,350 90,675
General Capital 538,656 128,650 1,324,895 524,765 1,647,195 (396,115) (322,300) - 216,357
Street Capital 100,638 2,654,942 1,206,299 2,603,203 1,210,961 51,739 (4,662) - 95,976
CAPITAL PROJECTS FUNDS 639,294 2,783,592 2,531,194 3,127,968 2,858,156 (344,376) (326,962) - 312,332
Golf Course 12,219 8,650 6,446 15,714 15,714 (7,064) (9,268) - 2,951
System Development 970,680 322,500 297,414 567,424 552,424 (244,924) (255,010) - 715,670
Water / Sewer Operations 2,585,369 8,071,596 7,770,220 8,013,205 7,627,887 58,391 142,333 - 2,727,702
Water / Sewer Capital 2,855,710 2,677,683 6,309,965 2,241,075 5,860,810 436,608 449,155 2,021,480 3,304,865
Storm Operations 175,681 1,122,988 1,115,835 1,008,942 891,627 114,046 224,208 - 399,889
Storm Capital (10,580) 1,125,079 1,778,404 1,114,149 1,767,812 10,930 10,592 750,000 12
ENTERPRISE FUNDS 6,589,077 13,328,496 17,278,284 12,960,509 16,716,274 367,987 562,010 2,771,480 7,151,088
Public Works Admin 48,101 598,425 497,957 598,134 499,985 291 (2,028) - 46,073
IT Equipment O&M / Replacement 29,287 446,890 446,937 450,052 417,467 (3,162) 29,470 - 58,757
Fleet Equipment O&M / Replacement 1,722,506 815,377 811,248 906,064 795,346 (90,687) 15,902 - 1,738,408
Engineering Services 55,593 840,517 828,600 819,403 742,350 21,114 86,250 - 141,843
Unemployment Self-Insurance 25,474 10,400 100,289 10,000 100,000 400 289 90,000 25,763
INTERNAL SERVICE FUNDS 1,880,961 2,711,609 2,685,031 2,783,653 2,555,148 (72,044) 129,883 90,000 2,010,844
Firemen's Pension 258,871 38,235 36,374 29,027 14,027 9,208 22,347 - 281,218
Custodial / Refundable Deposits (559) - 70,137 - 117,232 - (47,095) - (47,654)
Memorial Fund - - 2,000 - - - 2,000 - 2,000
FIDUCIARY FUNDS 258,313 38,235 108,511 29,027 131,259 9,208 (22,748) - 235,564
GRAND TOTAL $13,209,480 $36,461,632 $42,159,818 $36,644,078 $41,855,203 ($182,446)$304,615 $6,529,830 $13,514,095
CITY OF PORT TOWNSEND
2020 SUPPLEMENTAL BUDGET FUND SUMMARY
2021 Budget Section 1 - Page 15 of 16
2021 City Manager Proposed Budget
Proposed Non-Operational Supplemental Appropriation Budget Items:
A budget amendment addressing supplemental budget appropriations is required by
state law if appropriations exceed those approved in the adopted budget. The City of
Port Townsend authorizes budget spending at the fund level. Supplemental
appropriations are needed for the funds listed below:
• Fire and EMS Special Revenue Fund - $10,000 – Prior year property tax
revenues are trending higher than expected possibly requiring additional
transfers to East Jefferson Fire & Rescue.
• Debt Service Fund - $3,658,350 – Proceeds from 2020 bond issuance to be
used to refinance the 2010 bonds, payoff the 2019 BAN line-of-credit, and pay
debt issuance costs.
• Enterprise Funds - $2,771,480 –
o $1,862,500 – Paying off Utility line-of-credit with 2020 revenue bond
proceeds.
o $14,980 – 2020 revenue bond issuance costs.
o $270,000 – Paying off General Obligation line-of-credit with 2020 bond
proceeds.
o $480,000 – Rainier Regional Stormwater Facility Phase 2 change order
funded by private contribution.
o $34,000 – O.G.W.S. carrier pipe installation at the airport.
o $110,000 – Value engineering survey and mapping of O.G.W.S. pipeline.
• Internal Service Funds - $90,000 – Transfers related to unemployment charges
related to the COVID-19 staff furloughs.
2021 Budget Section 1 - Page 16 of 16
Ordinance 3256
ORDINANCE NO. 3256
AN ORDINANCE OF THE CITY OF PORT TOWNSEND, WASHINGTON, ADOPTING
2020 SUPPLEMENTAL #2 BUDGET APPROPRIATIONS
WHEREAS, the City Council adopted an additional supplemental budget per Ordinance
3248 on April 20, 2020 and was set forth in the document entitled “City of Port Townsend
Budget 2020 Supplemental #1 Fund Detail”; and
WHEREAS, the City Manager of the City of Port Townsend, Washington completed and
filed an additional proposed supplemental budget for 2020 on November 2, 2020; and
WHEREAS, the City Council reviewed the second supplemental budget and held a
public hearing on November 2, 2020 and considered the matter further on November 16, 2020;
NOW, THEREFORE, the City Council of the City of Port Townsend, Washington, do
ordain as follows:
Section 1. The second supplemental budget for the City of Port Townsend, Washington,
for the fiscal year 2020, is adopted as set forth in the document entitled “City of Port Townsend
Budget 2020 Supplemental #2 Fund Summary”, a copy of which is on file with the office of the
City Clerk, and is incorporated into this Ordinance. The budget supplemental #2 summary is
attached as Exhibit A, making revenue and expenditure revisions.
Section 2. This Ordinance shall take effect upon its passage, approval, and publication
in the form and manner provided by law.
ADOPTED by the City Council of the City of Port Townsend, Washington, by a vote of
the majority of the City Council plus one, at a special business meeting thereof, held this 16th
day of November 2020.
___________________________________
Michelle Sandoval
Mayor
Attest: Approved as to legal form:
_____________________________ __________________________________
Joanna Sanders, MMC Heidi Greenwood
City Clerk City Attorney
2021 Budget Section 2 - Page 1 of 5
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2021 Budget Section 2 - Page 2 of 5
2019 2020 2020 2020 2020 2020 2020 2020 2020
Ending Fund
Balance
Adopted
Revenues
Amended
Revenues
Adopted
Expenses
Amended
Expenses
Adopted
Rev vs. Exp
Amended
Rev vs. Exp
Proposed
Supplemental
Appropriation
Projected
Ending Fund
Balance
GENERAL FUND 1,914,034 10,414,829 9,451,698 10,413,656 9,416,296 1,173 35,402 - 1,949,436
Drug Enforc. / Contingency 185,867 3,000 1,293 - - 3,000 1,293 - 187,160
Street 320,221 957,247 870,018 957,247 844,241 - 25,777 - 345,998
Library 253,200 1,127,000 1,152,203 1,146,266 1,056,452 (19,266) 95,751 - 348,951
Real Estate Excise Tax 453,932 516,000 464,078 570,000 510,000 (54,000) (45,922) - 408,010
Lodging Tax 270,864 543,500 241,696 563,624 447,124 (20,124) (205,428) - 65,436
Fire / EMS 7,242 15,210 25,036 20,000 30,000 (4,790) (4,964) 10,000 2,278
Affordable Housing 31,184 80,008 74,857 74,658 64,658 5,350 10,199 - 41,383
Community Development Block Grant 192,350 13,020 10,813 53,000 53,000 (39,980) (42,187) - 150,163
Community Services 116,120 2,219,486 1,900,353 2,231,920 1,801,694 (12,434) 98,659 - 214,779
TOTAL SPECIAL REV FUNDS 1,830,979 5,474,471 4,740,347 5,616,715 4,807,169 (142,244) (66,822) 10,000 1,764,157
DEBT SERVICE FUND 96,823 1,710,400 5,364,753 1,712,551 5,370,901 (2,151) (6,148) 3,658,350 90,675
General Capital 538,656 128,650 1,324,895 524,765 1,647,195 (396,115) (322,300) - 216,357
Street Capital 100,638 2,654,942 1,206,299 2,603,203 1,210,961 51,739 (4,662) - 95,976
CAPITAL PROJECTS FUNDS 639,294 2,783,592 2,531,194 3,127,968 2,858,156 (344,376) (326,962) - 312,332
Golf Course 12,219 8,650 6,446 15,714 15,714 (7,064) (9,268) - 2,951
System Development 970,680 322,500 297,414 567,424 552,424 (244,924) (255,010) - 715,670
Water / Sewer Operations 2,585,369 8,071,596 7,770,220 8,013,205 7,627,887 58,391 142,333 - 2,727,702
Water / Sewer Capital 2,855,710 2,677,683 6,309,965 2,241,075 5,860,810 436,608 449,155 2,021,480 3,304,865
Storm Operations 175,681 1,122,988 1,115,835 1,008,942 891,627 114,046 224,208 - 399,889
Storm Capital (10,580) 1,125,079 1,778,404 1,114,149 1,767,812 10,930 10,592 750,000 12
ENTERPRISE FUNDS 6,589,077 13,328,496 17,278,284 12,960,509 16,716,274 367,987 562,010 2,771,480 7,151,088
Public Works Admin 48,101 598,425 497,957 598,134 499,985 291 (2,028) - 46,073
IT Equipment O&M / Replacement 29,287 446,890 446,937 450,052 417,467 (3,162) 29,470 - 58,757
Fleet Equipment O&M / Replacement 1,722,506 815,377 811,248 906,064 795,346 (90,687) 15,902 - 1,738,408
Engineering Services 55,593 840,517 828,600 819,403 742,350 21,114 86,250 - 141,843
Unemployment Self-Insurance 25,474 10,400 100,289 10,000 100,000 400 289 90,000 25,763
INTERNAL SERVICE FUNDS 1,880,961 2,711,609 2,685,031 2,783,653 2,555,148 (72,044) 129,883 90,000 2,010,844
Firemen's Pension 258,871 38,235 36,374 29,027 14,027 9,208 22,347 - 281,218
Custodial / Refundable Deposits (559) - 70,137 - 117,232 - (47,095) - (47,654)
Memorial Fund - -2,000 - -- 2,000 - 2,000
FIDUCIARY FUNDS 258,313 38,235 108,511 29,027 131,259 9,208 (22,748) - 235,564
GRAND TOTAL $13,209,480 $36,461,632 $42,159,818 $36,644,078 $41,855,203 ($182,446)$304,615 $6,529,830 $13,514,095
CITY OF PORT TOWNSEND
2020 SUPPLEMENTAL BUDGET FUND SUMMARY
Ordinance 3256 Exhibit A
2021 Budget Section 2 - Page 3 of 5
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2021 Budget Section 2 - Page 4 of 5
City of Port Townsend
Updated on 10/27/2020
Description Fund Department Ongoing vs one-time
2020 Expense
Increase/
(Decrease) Explanation
Intergovernmental Services - Fire Fire & EMS (171)Fire one-time 5,000 Carryover Property Tax Revenues are trending higher than expected; Expense offset by revenue
Intergovernmental Services - EMS Fire & EMS (171)EMS one-time 5,000 Carryover Property Tax Revenues are trending higher than expected; Expense offset by revenue
10,000
Professional Services G.O. Debt Service one-time 18,350 Issuance costs for 2020 Bonds; Expense offset by revenue
Transfer Out to 2020 Bond Fund G.O. Debt Service one-time 900,000 2020 Bond Proceeds; Expense offset by revnue
Refunding/Payment for 2010 Bonds G.O. Debt Service one-time 2,740,000 Payoff of 2010 Bonds; Expense offset by revenue from 2020 bond proceeds.
3,658,350
Principal Payment on LOC W/S Capital Fund Water CIP one-time 1,862,500 Payoff Line-of-Credit; Secured with 2020 Revenue Bonds (Long-term debt)
Cost of Bond Issuance 2020 Revenu Bonds one-time 14,980 Cost to issue the 2020 Revenue Bonds
Principal Payment on LOC Storm Captial Fund one-time 270,000 Payoff Line-of-Credit; Secured with 2020 G.O. Bonds (Long-term debt)
Rainier Regional Stormwater Facility Storm Captial Fund one-time 480,000 Change Order for Phase 2; Offset by funds from Private Party
Professional Services
OGWS (Transmission
Line Fund)one-time 34,000 Installation of a carrier pipe at the airport down via an ILA with the Port; Approved by Council on 5/18/2020
Engineering Services
OGWS (Transmission
Line Fund)one-time 110,000 Value Engineering for mapping an accessing the pipeline; Approved by Council on 6/1/2020
2,771,480
Unemployment Distributions Unemployment SI one-time 90,000 Uemployment charges related to COVID-19 furloughs
90,000
6,529,830
Total G.O. Debt Service Fund Supplemental Appropriatons
2020 Supplemental Budget Amendment #2
Fire & EMS Fund - Supplemental Appropriations
Total Fire & EMS Fund Supplemental Appropriatons
G.O. Debt Service Fund - Supplemental Appropriations
TOTAL ALL FUNDS - SUPPLEMENTAL APPROPRIATIONS
Internal Service Funds - Supplemental Appropriatons
Total Internal Service Fund Supplemental Appropriations
Enterprise Funds - Supplemental Appropriatons
Total Enterprise Fund Supplemental Appropriatons
2021 Budget Section 2 - Page 5 of 5
Ordinance 3259
Page 1 of 2
ORDINANCE NO. 3259
AN ORDINANCE ADOPTING THE BUDGET FOR THE CITY OF PORT
TOWNSEND, WASHINGTON, FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2021
WHEREAS, the City Manager of the City of Port Townsend, Washington, completed
and placed on file with the City Clerk a proposed budget and estimate of the amount of monies
required to meet the public expenses, bond retirement and interest, reserve funds and expenses of
government of the City for the fiscal year ending December 31, 2021 (the “2021 Preliminary
Budget”), and a notice was published that the City Council would conduct a public hearing on
the 2nd of November 2020 at 6:30 p.m., at City Hall for the purpose of receiving public
testimony regarding the preliminary budget for the 2021 fiscal year; and
WHEREAS, the City Council held a public hearing on November 2, 2020 at which all
taxpayers were heard who appeared for or against any part of the preliminary budget; and
WHEREAS, following the public hearing, the City Council met in City Council
Chambers on November 16, 2020 and December 7, 2020 to consider the 2021 Final Budget and
receive further public comment, and made adoptions and changes, as it deemed necessary and
proper; and
WHEREAS, the 2021 Budget does not exceed the lawful limit of taxation allowed by
law to be levied on the property within the City of Port Townsend for the purposes set forth in
the 2021 Final Budget, and the estimated expenditures in each fund set forth in the 2021 Final
Budget are all necessary to carry on the government of the City for fiscal year 2021, and are all
necessary to meet the various needs of the City during the period;
NOW, THEREFORE, the City Council of the City of Port Townsend, Washington, do
ordain as follows:
Section 1. The budget for the City of Port Townsend, Washington, for the fiscal year
2021, is hereby adopted at the fund level as set forth in the document entitled “City of Port
Townsend Final Budget 2021,” a copy of which has been and now is on file with the office of
the City Clerk, and by this reference is incorporated into this Ordinance.
Section 2. Estimated revenues, including fund balances for working capital for each
separate fund of the City of Port Townsend, and aggregate totals for all such funds combined, for
the year 2021, are set forth in summary form in Exhibit A attached, and by this reference are
incorporated in this Ordinance, and are appropriated for expenditure at the fund level during the
2021 budget year.
2021 Budget Section 3 - Page 1 of 30
Ordinance 3259
Page 2 of 2
Section 3. The City Clerk is directed to transmit a certified copy of the City of Port
Townsend Final Budget 2021 to the Office of State Auditor and to the Association of
Washington Cities.
Section 4. This Ordinance shall take effect upon its passage, approval, and publication
in the form and manner provided by law.
ADOPTED by the City Council of the City of Port Townsend, Washington, at a regular
meeting thereof, held this 7th day of December 2020.
_____________________________
Michelle Sandoval
Mayor
Attest: Approved as to Form:
_____________________________ ________________________________
Joanna Sanders, MMC Heidi Greenwood
City Clerk City Attorney
2021 Budget Section 3 - Page 2 of 30
2020 2021 2021 2021 2021
Ending Fund
Balance
Proposed
Revenues
Propsed
Expenses
Proposed
Rev vs. Exp
Projected
Ending Fund
Balance
GENERAL FUND 1,949,436 9,933,648 9,933,245 403 1,949,839
Drug Enforc. / Contingency 187,160 500 - 500 187,660
Street 345,998 902,854 898,395 4,459 350,457
Library 348,951 1,148,585 1,125,766 22,819 371,770
Real Estate Excise Tax 408,010 510,900 510,000 900 408,910
Lodging Tax 65,436 324,627 321,133 3,494 68,930
Fire / EMS 2,278 20,000 20,000 - 2,278
Affordable Housing 41,383 95,749 92,896 2,853 44,236
Community Development Block Grant 150,163 10,401 - 10,401 160,564
Community Services 214,779 1,938,624 1,935,703 2,921 217,700
TOTAL SPECIAL REV FUNDS 1,764,157 4,952,240 4,903,893 48,347 1,812,504
DEBT SERVICE FUND 90,675 1,704,704 1,704,467 237 90,912
General Capital 216,357 34,524 150,317 (115,793) 100,564
Street Capital 95,976 1,770,837 1,770,837 - 95,976
CAPITAL PROJECTS FUNDS 312,332 1,805,361 1,921,154 (115,793) 196,539
Golf Course 2,951 7,213 7,785 (572) 2,379
System Development 715,670 310,314 355,000 (44,686) 670,984
Water / Sewer Operations 2,727,702 8,182,225 8,134,490 47,735 2,775,436
Water / Sewer Capital 3,304,865 2,925,179 3,406,762 (481,583) 2,823,282
Storm Operations 399,889 1,120,512 1,112,501 8,011 407,900
Storm Capital 12 244,014 244,014 - 12
ENTERPRISE FUNDS 7,151,088 12,789,457 13,260,552 (471,095) 6,679,992
Public Works Admin 46,073 509,790 509,667 123 46,196
IT Equipment O&M / Replacement 58,757 349,313 349,309 4 58,762
Fleet Equipment O&M / Replacement 1,738,408 776,823 594,079 182,744 1,921,151
Engineering Services 141,843 984,685 853,405 131,280 273,123
Unemployment Self-Insurance 25,763 103,605 103,540 65 25,828
INTERNAL SERVICE FUNDS 2,010,844 2,724,216 2,410,000 314,216 2,325,060
Firemen's Pension 281,218 34,905 29,143 5,762 286,980
Custodial / Refundable Deposits (47,654) - - - (47,654)
Memorial Fund 2,000 - - - 2,000
FIDUCIARY FUNDS 235,564 34,905 29,143 5,762 241,326
GRAND TOTAL $13,514,095 $33,944,531 $34,162,454 ($217,923)$13,296,172
CITY OF PORT TOWNSEND
2021 PROPOSED BUDGET FUND SUMMARY
Ordinance 3259 Exhibit A
2021 Budget Section 3 - Page 3 of 30
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2021 Budget Section 3 - Page 4 of 30
2021 BUDGET SUMMARIES BY FUND
PAGE FUND
7 GENERAL FUND
8 DRUG ENFORCEMENT / CONTINGENCY FUND
9 STREET FUND
10 LIBRARY FUND
11 REAL ESTATE EXCISE TAX FUND
12 LODGING TAX FUND
13 FIRE / EMS FUND
14 AFFORDABLE HOUSING FUND
15 COMMUNITY DEVELOPMENT BLOCK GRANTS
16 COMMUNITY SERVICES FUND
17 GENERAL OBLIGATION DEBT SERVICE FUND
18 GENERAL CAPITAL PROJECTS
19 STREET CAPITAL PROJECTS
20 GOLF COURSE FUND
21 SYSTEM DEVELOPMENT CHARGES FUND
22 WATER/SEWER OPERATIONS FUND
23 WATER/SEWER CAPITAL PROJECTS
24 STORMWATER OPERATIONS FUND
25 STORMWATER CAPITAL PROJECTS
26 PUBLIC WORKS ADMININSTRATION
27 EQUIPMENT RENTAL & REPLACEMENT FUND
28 ENGINEERING FUND
29 UNEMPLOYMENT FUND
30 FIREMEN'S PENSION FUND
2021 Budget Section 3 - Page 5 of 30
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2021 Budget Section 3 - Page 6 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 1,776,965 1,904,790 1,914,034 1,914,034 1,949,436
Revenues
Taxes 6,688,161 7,405,087 7,660,431 6,971,639 7,250,816 -5.3%
Licenses & Permits 439,649 477,260 509,150 331,609 389,500 -23.5%
Intergovernmental Services 287,812 242,717 237,279 228,553 244,611 3.1%
Charges for Goods & Services 1,747,092 1,696,488 1,837,069 1,788,065 1,926,620 4.9%
Fines & Penalties 58,811 45,583 57,800 30,213 37,080 -35.8%
Miscellaneous Revenue 111,796 148,366 111,300 101,300 85,021 -23.6%
Other Increases 2,036 116,549 600 210 - -100.0%
Other Financing Sources (inc. Transfers In)14,807 43,580 1,200 109 - -100.0%
Total Revenue 9,350,164 10,175,628 10,414,829 9,451,698 9,933,648 -4.6%
Expenditures
Salaries & Wages 3,323,881 3,530,973 3,600,234 3,104,940 3,447,897 -4.2%
Personnel Benefits 1,397,150 1,388,901 1,573,202 1,319,248 1,481,218 -5.8%
Supplies 187,636 95,874 96,689 90,167 71,568 -26.0%
Services 2,183,645 2,278,374 2,377,588 2,336,678 2,347,084 -1.3%
Capital Outlays 63,196 315,388 117,599 43,000 33,291 -71.7%
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)2,066,833 2,556,874 2,648,344 2,522,263 2,552,187 -3.6%
Total Expenditure 9,222,339 10,166,384 10,413,656 9,416,296 9,933,245 -4.6%
Net Change in Fund Balance 127,824 9,244 1,173 35,402 403 -65.6%
Ending Fund Balance 1,904,790 1,914,034 1,915,207 1,949,436 1,949,839
Fund Bal. 8-15 % of Revenue 20.4%18.8%18.4%20.6%19.6%Meets Policy
General Fund - Expenditures by Department
Mayor & Council 132,746 111,101 105,673 103,752 114,588 8.4%
City Manager 339,138 423,993 330,323 312,445 327,954 -0.7%
City Attorney 665,652 646,670 619,148 482,590 559,273 -9.7%
Human Resources 388,576 405,604 322,118 294,440 280,567 -12.9%
Planning & Development Services 1,103,785 1,138,415 1,128,350 977,342 1,067,479 -5.4%
Finance Department 325,944 288,547 486,968 425,070 450,950 -7.4%
Police Administration 605,558 673,956 680,530 556,515 607,284 -10.8%
Police Operations 2,792,117 3,100,184 3,122,624 2,812,963 3,012,706 -3.5%
Police Training 31,716 25,929 37,401 24,301 18,646 -50.1%
City Clerk 268,510 279,053 304,381 278,999 296,865 -2.5%
Contracts & Intergovernmental 514,962 586,564 631,336 671,129 650,436 3.0%
PEG Access 14,615 2,784 11,000 1,700 9,000 -18.2%
Non-Departmental (inc. Transfers Out)2,039,020 2,483,584 2,633,804 2,475,050 2,537,497 -3.7%
Total Expenditures 9,222,339 10,166,384 10,413,656 9,416,296 9,933,245 -4.6%
City of Port Townsend
GENERAL FUND
BUDGET SUMMARY
General Fund
2021 Budget Section 3 - Page 7 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 171,343 182,490 185,867 185,867 187,160
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 1,704 2,877 3,000 1,293 500 -83.3%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)9,443 500 - - -
Total Revenue 11,147 3,377 3,000 1,293 500 -83.3%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services - - - - -
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure - - - - -
Net Change in Fund Balance 11,147 3,377 3,000 1,293 500 -83.3%
Ending Fund Balance 182,490 185,867 188,867 187,160 187,660
Fund Balance 2% of GF Rev 2.0%1.8%1.8%2.0%1.9%Meets Policy
City of Port Townsend
DRUG ENFORCEMENT / CONTINGENCY FUND
BUDGET SUMMARY
Contingency Fund
2021 Budget Section 3 - Page 8 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 380,772 260,855 320,221 320,221 345,998
Revenues
Taxes 627,707 - - - -
Licenses & Permits 462 462 500 - - -100.0%
Intergovernmental Services 221,353 214,448 217,283 200,946 206,928 -4.8%
Charges for Goods & Services 8,259 10,988 - 5,415 500
Fines & Penalties - - - - -
Miscellaneous Revenue 4,335 9,901 4,000 3,764 801 -80.0%
Other Increases 8,111 - - - -
Other Financing Sources (inc. Transfers In)- 637,395 735,464 659,893 694,625 -5.6%
Total Revenue 870,227 873,194 957,247 870,018 902,854 -5.7%
Expenditures
Salaries & Wages 144,190 131,172 136,867 116,364 113,226 -17.3%
Personnel Benefits 73,343 68,427 72,902 62,145 63,412 -13.0%
Supplies 67,958 72,517 73,869 73,869 73,932 0.1%
Services 387,645 339,373 430,709 394,963 468,675 8.8%
Capital Outlays 142,108 27,439 68,000 22,000 - -100.0%
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)174,900 174,900 174,900 174,900 179,150 2.4%
Total Expenditure 990,144 813,828 957,247 844,241 898,395 -6.1%
Net Change in Fund Balance (119,917) 59,366 - 25,777 4,459
Ending Fund Balance 260,855 320,221 320,221 345,998 350,457
Fund Bal. 2-3 % of Expenditures 26.3%39.3%33.5%41.0%39.0%Meets Policy
City of Port Townsend
STREET FUND
BUDGET SUMMARY
Street Fund
2021 Budget Section 3 - Page 9 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 240,916 214,523 253,200 253,200 348,951
Revenues
Taxes 1,068,190 1,089,122 1,124,000 1,124,000 1,147,000 2.0%
Licenses & Permits - - - - -
Intergovernmental Services - - - 17,151 -
Charges for Goods & Services - - - - -
Fines & Penalties 1,412 1,466 - 171 -
Miscellaneous Revenue 7,711 57,060 3,000 10,881 1,585 -47.2%
Other Increases 74 - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 1,077,387 1,147,648 1,127,000 1,152,203 1,148,585 1.9%
Expenditures
Salaries & Wages 436,068 428,312 446,347 380,000 451,661 1.2%
Personnel Benefits 187,399 184,749 189,318 173,675 200,914 6.1%
Supplies 14,653 87,514 88,061 86,561 81,393 -7.6%
Services 390,179 405,953 421,040 402,466 389,798 -7.4%
Capital Outlays 75,480 2,444 1,500 1,500 2,000 33.3%
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - 12,250 -
Total Expenditure 1,103,780 1,108,971 1,146,266 1,056,452 1,125,766 -1.8%
Net Change in Fund Balance (26,393) 38,678 (19,266) 95,751 22,819 -218.4%
Ending Fund Balance 214,523 253,200 233,934 348,951 371,770
Fund Balance 5-8% of Tax Rev.20.1%23.2%20.8%31.0%32.4%Meets Policy
City of Port Townsend
LIBRARY FUND
BUDGET SUMMARY
Library Fund
2021 Budget Section 3 - Page 10 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 301,053 380,285 453,932 453,932 408,010
Revenues
Taxes 615,769 577,446 510,000 459,000 509,900 0.0%
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 3,463 6,201 6,000 5,078 1,000 -83.3%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 619,232 583,648 516,000 464,078 510,900 -1.0%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services - - - - -
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)540,000 510,000 570,000 510,000 510,000 -10.5%
Total Expenditure 540,000 510,000 570,000 510,000 510,000 -10.5%
Net Change in Fund Balance 79,232 73,648 (54,000) (45,922) 900 -101.7%
Ending Fund Balance 380,285 453,932 399,932 408,010 408,910
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
REAL ESTATE EXCISE TAX FUND
BUDGET SUMMARY
REET
2021 Budget Section 3 - Page 11 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 252,500 246,909 270,864 270,864 65,436
Revenues
Taxes 534,185 564,314 540,000 240,000 324,000 -40.0%
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 1,616 3,811 3,500 1,696 627 -82.1%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 535,802 568,124 543,500 241,696 324,627 -40.3%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 416,394 366,964 373,624 257,124 181,133 -51.5%
Capital Outlays - 52,205 65,000 65,000 15,000 -76.9%
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)125,000 125,000 125,000 125,000 125,000 0.0%
Total Expenditure 541,394 544,168 563,624 447,124 321,133 -43.0%
Net Change in Fund Balance (5,592) 23,956 (20,124) (205,428) 3,494 -117.4%
Ending Fund Balance 246,909 270,864 250,740 65,436 68,930
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
LODGING TAX FUND
BUDGET SUMMARY
Lodging Tax
2021 Budget Section 3 - Page 12 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 2,525 4,622 7,242 7,242 2,278
Revenues
Taxes 2,369,499 2,403,048 15,000 25,000 20,000 33.3%
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 2,067 3,030 210 36 - -100.0%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 2,371,565 2,406,077 15,210 25,036 20,000 31.5%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 2,369,469 2,403,458 20,000 30,000 20,000 0.0%
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure 2,369,469 2,403,458 20,000 30,000 20,000 0.0%
Net Change in Fund Balance 2,096 2,620 (4,790) (4,964) - -100.0%
Ending Fund Balance 4,622 7,242 2,452 2,278 2,278
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
FIRE/EMS FUND
BUDGET SUMMARY
Fire/EMS
2021 Budget Section 3 - Page 13 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 10,921 21,080 31,184 31,184 41,383
Revenues
Taxes 10,000 9,719 79,658 74,658 95,658 20.1%
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 158 386 350 199 91 -74.0%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 10,158 10,105 80,008 74,857 95,749 19.7%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services - - 10,000 - 31,000 210.0%
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - 64,658 64,658 61,896 -4.3%
Total Expenditure - - 74,658 64,658 92,896 24.4%
Net Change in Fund Balance 10,158 10,105 5,350 10,199 2,853 -46.7%
Ending Fund Balance 21,080 31,184 36,534 41,383 44,236
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
AFFORDABLE HOUSING FUND
BUDGET SUMMARY
Affordable Housing
2021 Budget Section 3 - Page 14 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 168,420 176,617 192,350 192,350 150,163
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services 46,519 16,090 10,020 10,020 10,020 0.0%
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 1,677 2,958 3,000 793 381 -87.3%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 48,196 19,048 13,020 10,813 10,401 -20.1%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 40,000 3,315 53,000 53,000 - -100.0%
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure 40,000 3,315 53,000 53,000 - -100.0%
Net Change in Fund Balance 8,196 15,733 (39,980) (42,187) 10,401 -126.0%
Ending Fund Balance 176,617 192,350 152,370 150,163 160,564
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
COMMUNITY DEVELOPMENT BLOCK GRANTS
BUDGET SUMMARY
CDBG
2021 Budget Section 3 - Page 15 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 88,594 101,007 116,120 116,120 214,779
Revenues
Taxes 643,135 605,129 602,476 583,428 583,428 -3.2%
Licenses & Permits - - - - -
Intergovernmental Services - - - 48,750 -
Charges for Goods & Services 194,916 200,160 237,775 50,172 86,588 -63.6%
Fines & Penalties - - - - -
Miscellaneous Revenue 69,514 107,996 57,400 31,501 36,310 -36.7%
Other Increases 19,203 111,527 19,500 6,700 2,000 -89.7%
Other Financing Sources (inc. Transfers In)1,124,638 1,190,307 1,302,335 1,179,802 1,230,298 -5.5%
Total Revenue 2,051,405 2,215,119 2,219,486 1,900,353 1,938,624 -12.7%
Expenditures
Salaries & Wages 729,419 795,386 855,701 573,255 667,468 -22.0%
Personnel Benefits 355,240 383,002 426,200 298,247 371,537 -12.8%
Supplies 202,974 166,913 184,617 154,655 156,321 -15.3%
Services 728,717 797,822 715,952 677,254 679,777 -5.1%
Capital Outlays 3,474 37,553 - - -
Debt Service - Principal - - 30,000 30,000 30,000 0.0%
Debt Service - Interest - - 450 450 300 -33.3%
Other Financing Uses (inc. Transfers Out)19,169 19,329 19,000 67,833 30,300 59.5%
Total Expenditure 2,038,993 2,200,006 2,231,920 1,801,694 1,935,703 -13.3%
Net Change in Fund Balance 12,412 15,114 (12,434) 98,659 2,921 -123.5%
Ending Fund Balance 101,007 116,120 103,687 214,779 217,700
Fund Bal. 2-3 % of Expenditures 5.0%5.3%4.6%11.9%11.2%Meets Policy
Community Services Fund - Expenditures by Department
City Facilities 503,726 621,778 681,346 637,286 623,098 -8.5%
Mountian View Facilities 271,733 225,572 181,075 162,650 174,201 -3.8%
Parks Maintenance 529,920 715,715 649,513 565,532 604,494 -6.9%
Events - - - 5,000 -
Pool 484,596 613,596 657,811 323,401 480,485 -27.0%
Non-Departmental (inc. Transfers Out)249,018 23,345 62,175 107,825 53,425 -14.1%
Total Expenditures 2,038,993 2,200,006 2,231,920 1,801,694 1,935,703 -13.3%
City of Port Townsend
COMMUNITY SERVICES FUND
BUDGET SUMMARY
Community Svs
2021 Budget Section 3 - Page 16 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 86,745 89,905 96,823 96,823 90,675
Revenues
Taxes 405,648 398,293 402,000 402,000 402,000 0.0%
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 5,502 7,976 6,500 2,503 237 -96.4%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)1,257,400 1,283,900 1,301,900 4,960,250 1,302,467 0.0%
Total Revenue 1,668,550 1,690,169 1,710,400 5,364,753 1,704,704 -0.3%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 1,500 5,800 5,000 5,000 - -100.0%
Capital Outlays - - - - -
Debt Service - Principal 870,000 895,000 944,503 3,684,503 1,054,035 11.6%
Debt Service - Interest 793,891 782,451 763,048 781,398 650,432 -14.8%
Other Financing Uses (inc. Transfers Out)- - - 900,000 -
Total Expenditure 1,665,391 1,683,251 1,712,551 5,370,901 1,704,467 -0.5%
Net Change in Fund Balance 3,160 6,918 (2,151) (6,148) 237 -111.0%
Ending Fund Balance 89,905 96,823 94,672 90,675 90,912
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
GENERAL OBLIGATION DEBT SERVICE
BUDGET SUMMARY
G.O. Debt Service
2021 Budget Section 3 - Page 17 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 3,419,308 1,589,739 538,656 538,656 216,357
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services 200,893 147,072 - 180,000 -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 32,546 70,567 33,000 36,954 - -100.0%
Other Increases - 81,944 - - -
Other Financing Sources (inc. Transfers In)2,228,944 247,922 95,650 1,107,941 34,524 -63.9%
Total Revenue 2,462,384 547,505 128,650 1,324,895 34,524 -73.2%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 73,802 29,331 51,086 51,086 34,524 -32.4%
Capital Outlays 1,606,389 334,354 76,020 256,020 - -100.0%
Debt Service - Principal 250,000 - - 60,000 -
Debt Service - Interest 4,495 - - 2,000 -
Other Financing Uses (inc. Transfers Out)2,357,267 1,234,903 397,659 1,278,089 115,793 -70.9%
Total Expenditure 4,291,953 1,598,588 524,765 1,647,195 150,317 -71.4%
Net Change in Fund Balance (1,829,569) (1,051,083) (396,115) (322,300) (115,793) -70.8%
Ending Fund Balance 1,589,739 538,656 142,542 216,357 100,564
Sufficient to Meet Obligations Meets Policy
General CIP Fund Breakdown:
Beginning 2018 Change in 2019 Change in 2020 Change in 2021 Change in 2021 Ending
Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance
301 - General Capital 5,000 (82,849) 144,314 (10,985) - 55,480
315 - 2015 Bonds 1,160,813 (1,010,488) (150,325) - - -
350 - 2017 Bonds 2,253,496 (1,320,221) (788,575) (144,154) - 546
355 - 2018 Bonds - 583,989 (256,497) (313,454) - 14,038
360 - 2020 Bonds - - - 146,293 (115,793) 30,500
Total 3,419,308 (1,829,569) (1,051,083) (322,300) (115,793) 100,564
City of Port Townsend
GENERAL CAPITAL PROJECTS
BUDGET SUMMARY
General CIP
2021 Budget Section 3 - Page 18 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance (328,825) 262,333 100,638 100,638 95,976
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services 775,306 347,524 2,248,162 671,162 1,577,000 -29.9%
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 276,770 27,075 1,100 6,818 - -100.0%
Other Increases - 47,583 - - -
Other Financing Sources (inc. Transfers In)1,893,927 926,541 405,680 528,319 193,837 -52.2%
Total Revenue 2,946,003 1,348,722 2,654,942 1,206,299 1,770,837 -33.3%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 310,469 96,704 58,692 58,692 78,044 33.0%
Capital Outlays 2,044,375 1,306,549 2,234,511 572,879 1,692,793 -24.2%
Debt Service - Principal - 60,000 300,000 540,000 - -100.0%
Debt Service - Interest - 9,514 10,000 24,390 - -100.0%
Other Financing Uses (inc. Transfers Out)- 37,650 - 15,000 -
Total Expenditure 2,354,844 1,510,418 2,603,203 1,210,961 1,770,837 -32.0%
Net Change in Fund Balance 591,159 (161,696) 51,739 (4,662) - -100.0%
Ending Fund Balance 262,333 100,638 152,377 95,976 95,976
Sufficient to Meet Obligations Meets Policy
Street CIP Fund Breakdown:
Beginning 2018 Change in 2019 Change in 2020 Change in 2021 Change in 2021 Ending
Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance
304 - Street Vacation Proceeds 5,345 26,501 37,308 564 - 69,718
305 - Street Capital Fund (334,170) 564,657 (199,004) (5,226) - 26,257
Total (328,825) 591,159 (161,696) (4,662) - 95,976
City of Port Townsend
STREET CAPITAL PROJECTS
BUDGET SUMMARY
Street CIP
2021 Budget Section 3 - Page 19 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 42,296 27,728 12,219 12,219 2,951
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 8,648 8,653 8,650 6,446 7,213 -16.6%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 8,648 8,653 8,650 6,446 7,213 -16.6%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies 1,861 3,961 2,500 3,000 - -100.0%
Services 21,355 20,201 13,214 12,714 7,785 -41.1%
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure 23,216 24,162 15,714 15,714 7,785 -50.5%
Net Change in Fund Balance (14,568) (15,509) (7,064) (9,268) (572) -91.9%
Ending Fund Balance 27,728 12,219 5,155 2,951 2,379
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
GOLF COURSE FUND
BUDGET SUMMARY
Golf Course
2021 Budget Section 3 - Page 20 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 1,715,738 912,674 970,680 970,680 715,670
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services 294,786 391,516 308,500 290,500 308,500 0.0%
Fines & Penalties - - - - -
Miscellaneous Revenue 12,150 15,145 14,000 6,914 1,814 -87.0%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 306,936 406,661 322,500 297,414 310,314 -3.8%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services - - - - -
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)1,110,000 348,655 567,424 552,424 355,000 -37.4%
Total Expenditure 1,110,000 348,655 567,424 552,424 355,000 -37.4%
Net Change in Fund Balance (803,064) 58,006 (244,924) (255,010) (44,686) -81.8%
Ending Fund Balance 912,674 970,680 725,756 715,670 670,984
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
SYSTEM DEVELOPMENT CHARGES
BUDGET SUMMARY
SDCs
2021 Budget Section 3 - Page 21 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 3,327,671 2,160,229 2,585,369 2,585,369 2,727,702
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services 5,527,213 6,708,661 6,833,424 6,513,905 6,832,674 0.0%
Fines & Penalties - - - - -
Miscellaneous Revenue 83,563 125,690 99,750 117,893 99,750 0.0%
Other Increases 1,582 - - - -
Other Financing Sources (inc. Transfers In)979,564 1,143,775 1,138,422 1,138,422 1,249,801 9.8%
Total Revenue 6,591,921 7,978,126 8,071,596 7,770,220 8,182,225 1.4%
Expenditures
Salaries & Wages 1,439,343 1,508,635 1,589,853 1,523,808 1,538,774 -3.2%
Personnel Benefits 713,740 750,142 792,224 751,607 782,529 -1.2%
Supplies 374,315 388,355 460,287 440,251 439,108 -4.6%
Services 1,916,349 2,900,192 3,311,403 3,096,283 3,664,254 10.7%
Capital Outlays 486,665 276,717 145,100 48,600 100,700 -30.6%
Debt Service - Principal 1,239,506 1,202,988 1,164,096 1,297,096 1,227,810 5.5%
Debt Service - Interest 227,823 154,032 149,771 149,771 170,827 14.1%
Other Financing Uses (inc. Transfers Out)1,361,623 371,925 400,471 320,471 210,488 -47.4%
Total Expenditure 7,759,363 7,552,986 8,013,205 7,627,887 8,134,490 1.5%
Net Change in Fund Balance (1,167,442) 425,139 58,391 142,333 47,735 -18.2%
Ending Fund Balance 2,160,229 2,585,369 2,643,760 2,727,702 2,775,437
60 Days of Operating Expenses 102 125 120 131 125 Meets Policy
Water Sewer Fund - Expenditures by Department
Utility Billing 565,075 496,598 583,313 558,529 623,779 6.9%
Water Disribution 2,092,781 2,343,271 2,418,723 2,316,014 2,346,757 -3.0%
Water Quality / WTF 1,975,671 1,827,629 1,907,632 1,919,320 2,029,666 6.4%
Wastewater Treatment 1,487,697 1,443,972 1,633,268 1,547,270 1,555,385 -4.8%
Wastewater Collection 953,142 969,440 985,652 815,116 1,036,197 5.1%
Biosolids 684,996 472,077 484,617 471,638 542,706 12.0%
Non-Departmental (inc. Transfers Out)- - - - -
Total Expenditures 7,759,363 7,552,986 8,013,205 7,627,887 8,134,490 1.5%
City of Port Townsend
WATER/SEWER OPERATIONS
BUDGET SUMMARY
Water Sewer Op
2021 Budget Section 3 - Page 22 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 1,425,356 2,315,963 2,855,710 2,855,710 3,304,865
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services 567 400,230 182,909 182,909 - -100.0%
Charges for Goods & Services 985,818 1,240,858 1,461,329 1,388,261 1,461,329 0.0%
Fines & Penalties - - - - -
Miscellaneous Revenue 531,526 245,268 40,100 20,470 8,062 -79.9%
Other Increases 250,000 118,589 30,000 30,000 30,000 0.0%
Other Financing Sources (inc. Transfers In)5,270,539 720,580 963,345 4,688,325 1,425,788 48.0%
Total Revenue 7,038,449 2,725,526 2,677,683 6,309,965 2,925,179 9.2%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 711,120 107,081 118,370 262,370 47,882 -59.5%
Capital Outlays 3,106,096 679,286 907,072 615,827 1,330,000 46.6%
Debt Service - Principal 672,632 52,632 52,632 1,915,132 52,632 0.0%
Debt Service - Interest 42,114 58,706 49,579 54,059 1,447 -97.1%
Other Financing Uses (inc. Transfers Out)***1,615,882 1,288,073 1,113,422 3,013,422 1,974,801 77.4%
Total Expenditure 6,147,843 2,185,779 2,241,075 5,860,810 3,406,762 52.0%
Net Change in Fund Balance 890,606 539,747 436,608 449,155 (481,583) -210.3%
Ending Fund Balance 2,315,963 2,855,710 3,292,318 3,304,865 2,823,282
Sufficient to Meet Obligations Meets Policy
Water/Sewer CIP Fund Breakdown:
Beginning 2018 Change in 2019 Change in 2020 Change in 2021 Change in 2021 Ending
Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance
415 - Water / Sewer CIP (1,363,139) 1,269,658 123,966 285,501 - 315,986
417 - 1956 Trans Line Fund 1,154,975 (435,798) (30,965) (126,342) 25,607 587,477
419 - 1978 Revenue Bond Fund - - - - - -
420 - 2020 Revenue Bond Fund - - - - - -
430 - Utility Debt Reserve Fund 1,633,520 56,746 446,746 289,996 (507,190) 1,919,818
Total 1,425,356 890,606 539,747 449,155 (481,583) 2,823,282
*** Operating Transfers include funding Water Capital Debt Service in the Water / Sewer Operating Fund
City of Port Townsend
WATER/SEWER CAPITAL
BUDGET SUMMARY
Water Sewer CIP
2021 Budget Section 3 - Page 23 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 175,137 166,388 175,681 175,681 399,889
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services 740,339 943,539 1,119,788 1,112,618 1,119,788 0.0%
Fines & Penalties - - - - -
Miscellaneous Revenue 1,792 2,874 3,200 3,217 724 -77.4%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 742,131 946,413 1,122,988 1,115,835 1,120,512 -0.2%
Expenditures
Salaries & Wages 215,824 242,648 248,669 212,981 203,410 -18.2%
Personnel Benefits 109,983 123,163 130,546 106,709 111,753 -14.4%
Supplies 42,007 39,738 41,234 38,234 44,188 7.2%
Services 183,067 331,281 345,130 354,265 445,923 29.2%
Capital Outlays - - 12,000 12,000 - -100.0%
Debt Service - Principal - 34,593 46,400 46,400 47,792 3.0%
Debt Service - Interest - 46,768 34,963 34,963 33,571 -4.0%
Other Financing Uses (inc. Transfers Out)200,000 118,928 150,000 86,075 225,864 50.6%
Total Expenditure 750,880 937,120 1,008,942 891,627 1,112,501 10.3%
Net Change in Fund Balance (8,749) 9,293 114,046 224,208 8,011 -93.0%
Ending Fund Balance 166,388 175,681 289,727 399,889 407,900
60 Days of Operating Expenses 81 68 105 164 134 Meets Policy
City of Port Townsend
STORMWATER OPERATIONS
BUDGET SUMMARY
Stormwater
2021 Budget Section 3 - Page 24 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance (28,016) 1,776 (10,580) (10,580) 12
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - 300,000 300,000 - -100.0%
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue - 429 350 480,100 - -100.0%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)637,360 374,199 824,729 998,304 244,014 -70.4%
Total Revenue 637,360 374,628 1,125,079 1,778,404 244,014 -78.3%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits - - - - -
Supplies - - - - -
Services 163,692 - - - 9,014
Capital Outlays 443,877 276,157 1,107,224 1,487,812 235,000 -78.8%
Debt Service - Principal - 108,000 - 270,000 -
Debt Service - Interest - 2,826 6,925 10,000 - -100.0%
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure 607,569 386,983 1,114,149 1,767,812 244,014 -78.1%
Net Change in Fund Balance 29,791 (12,355) 10,930 10,592 - -100.0%
Ending Fund Balance 1,776 (10,580) 350 12 12
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
STORMWATER CAPITAL
BUDGET SUMMARY
Stormwater CIP
2021 Budget Section 3 - Page 25 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 26,226 28,847 48,101 48,101 46,073
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services 553,053 526,602 597,425 497,425 509,669 -14.7%
Fines & Penalties - - - - -
Miscellaneous Revenue 308 1,344 1,000 532 121 -87.9%
Other Increases 7,552 - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 560,913 527,946 598,425 497,957 509,790 -14.8%
Expenditures
Salaries & Wages 307,365 306,614 342,565 282,100 304,487 -11.1%
Personnel Benefits 108,756 114,108 136,754 112,560 127,568 -6.7%
Supplies 11,509 2,230 4,827 3,327 2,893 -40.1%
Services 97,391 85,740 112,988 101,998 74,219 -34.3%
Capital Outlays - - 1,000 - 500 -50.0%
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)33,271 - - - -
Total Expenditure 558,292 508,692 598,134 499,985 509,667 -14.8%
Net Change in Fund Balance 2,621 19,254 291 (2,028) 123 -57.7%
Ending Fund Balance 28,847 48,101 48,392 46,073 46,196
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
PUBLIC WORKS ADMINISTRATION
BUDGET SUMMARY
PW Admin (Internal
Service Fund)
2021 Budget Section 3 - Page 26 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 714,117 1,499,762 1,751,793 1,751,793 1,797,165
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services 1,270,799 1,179,432 1,236,917 1,244,731 1,121,991 -9.3%
Fines & Penalties - - - - -
Miscellaneous Revenue 14,227 36,247 25,350 13,454 4,145 -83.6%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)905,111 3,500 - - -
Total Revenue 2,190,137 1,219,179 1,262,267 1,258,185 1,126,136 -10.8%
Expenditures
Salaries & Wages 298,920 284,362 310,788 321,122 243,608 -21.6%
Personnel Benefits 134,976 127,272 148,848 149,826 118,625 -20.3%
Supplies 162,006 151,714 173,176 138,176 168,824 -2.5%
Services 188,596 199,512 249,183 207,939 228,601 -8.3%
Capital Outlays 619,994 204,289 474,121 395,750 143,690 -69.7%
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - 40,040
Total Expenditure 1,404,492 967,148 1,356,116 1,212,813 943,388 -30.4%
Net Change in Fund Balance 785,645 252,031 (93,849) 45,372 182,748 -294.7%
Ending Fund Balance 1,499,762 1,751,793 1,657,945 1,797,165 1,979,913
Sufficient to Meet Obligations Meets Policy
ERR Fund Breakdown:
Beginning 2018 Change in 2019 Change in 2020 Change in 2021 Change in 2021 Ending
Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance Fund Balance
500 - ERR Fleet Replacement 714,117 785,645 155,970 (44,517) 182,673 1,793,888
510 - ERR Fleet O&M - - 66,773 60,419 71 127,263
520 - ERR I.T. O&M - - 21,949 6,970 4 28,924
525 - ERR I.T. Replacement - - 7,338 22,500 - 29,838
Total 714,117 785,645 252,031 45,372 182,748 1,979,913
City of Port Townsend
EQUIPMENT RENTAL & REPLACEMENT FUND
BUDGET SUMMARY
ERR (Internal
Service Fund)
2021 Budget Section 3 - Page 27 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 210,780 159,548 55,593 55,593 141,843
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services 955,679 778,244 839,317 827,972 984,493 17.3%
Fines & Penalties - - - - -
Miscellaneous Revenue 2,119 2,299 1,200 628 192 -84.0%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- - - - -
Total Revenue 957,798 780,543 840,517 828,600 984,685 17.2%
Expenditures
Salaries & Wages 583,739 492,174 435,834 402,363 468,849 7.6%
Personnel Benefits 259,432 218,787 190,977 177,395 201,432 5.5%
Supplies 10,467 7,926 9,790 7,290 6,928 -29.2%
Services 136,772 156,484 177,802 155,302 174,696 -1.7%
Capital Outlays 18,619 9,127 5,000 - 1,500 -70.0%
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure 1,009,030 884,498 819,403 742,350 853,405 4.1%
Net Change in Fund Balance (51,232) (103,956) 21,114 86,250 131,280 521.8%
Ending Fund Balance 159,548 55,593 76,707 141,843 273,123
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
ENGINEERING FUND
BUDGET SUMMARY
Engineering
Internal Service Fund
2021 Budget Section 3 - Page 28 of 30
2018 2019 2020 2020 2021 Increase/Decrease
Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 24,831 25,077 25,474 25,474 25,763
Revenues
Taxes - - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 246 397 400 206 65 -83.8%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)32,835 668 10,000 100,083 103,540 935.4%
Total Revenue 33,081 1,065 10,400 100,289 103,605 896.2%
Expenditures
Salaries & Wages - - - - -
Personnel Benefits 32,835 668 10,000 100,000 103,540 935.4%
Supplies - - - - -
Services - - - - -
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure 32,835 668 10,000 100,000 103,540 935.4%
Net Change in Fund Balance 246 397 400 289 65 -83.8%
Ending Fund Balance 25,077 25,474 25,874 25,763 25,828
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
UNEMPLOYMENT RESERVE FUND
BUDGET SUMMARY
Unemployment Internal
Service Fund
2021 Budget Section 3 - Page 29 of 30
LEOFF 1 2018 2019 2020 2020 2021 Increase/Decrease
Fiduciary Fund Actual Actual Adopted Supplemental Proposed 2021 Proposed vs
2020 Adopted
Beginning Fund Balance 231,924 246,381 258,871 258,871 281,218
Revenues
Taxes 34,235 - - - -
Licenses & Permits - - - - -
Intergovernmental Services - - - - -
Charges for Goods & Services - - - - -
Fines & Penalties - - - - -
Miscellaneous Revenue 2,451 4,064 4,000 2,139 670 -83.3%
Other Increases - - - - -
Other Financing Sources (inc. Transfers In)- 34,235 34,235 34,235 34,235 0.0%
Total Revenue 36,686 38,299 38,235 36,374 34,905 -8.7%
Expenditures
Salaries & Wages 7,165 3,648 2,803 2,803 2,803 0.0%
Personnel Benefits 13,651 20,309 25,000 10,000 25,000 0.0%
Supplies - - - - -
Services 1,414 1,852 1,224 1,224 1,340 9.5%
Capital Outlays - - - - -
Debt Service - Principal - - - - -
Debt Service - Interest - - - - -
Other Financing Uses (inc. Transfers Out)- - - - -
Total Expenditure 22,230 25,809 29,027 14,027 29,143 0.4%
Net Change in Fund Balance 14,456 12,490 9,208 22,347 5,762 -37.4%
Ending Fund Balance 246,381 258,871 268,079 281,218 286,980
Sufficient to Meet Obligations Meets Policy
City of Port Townsend
FIREMEN'S PENSION FUND
BUDGET SUMMARY
2021 Budget Section 3 - Page 30 of 30
CITY OF PORT TOWNSEND, WASHINGTON
CAPITAL IMPROVEMENT PLAN
The six-year Capital Improvement Plan (CIP) includes capital projects for 2021 – 2026.
This plan includes capital projects that add new infrastructure to the City and those that
replace and improve aging City infrastructure. The most significant planned capital
projects included in this plan are:
Discovery Road Pedestrian and Bicycle Facilities – Rainier to Sheridan
This project is the planning, design and construction of a sidewalk, bicycle pathway on
the south side of Discovery Road from Rainier Street to Sheridan Street, along with
stormwater improvements and crossing improvements. The project is funded by a
$0.43 million Federal Surface Transportation Program (STP) grant, a $1.442 million
grant through WSDOT’s Pedestrian & Bicycle Safety program, and City matching funds.
The second phase, not currently funded, would be to construct similar facilities on the
north side of Discovery along with new pavement, curbs, planter strips, and drainage
from the roundabout to Sheridan Street. A grant application through TIB has been
submitted for the second phase for both design and construction. The City is awaiting
TIB’s grant award announcement which will be in late 2020.
Outfall Replacement
Replacement of the existing sewer outfall is a requirement of the City’s Department of
Ecology wastewater discharge permit. A preliminary design has been completed. The
discussion with the permitting agencies began in 2018, permitting and field work
continued in 2020, with permitting and final design continuing in 2021 and construction
anticipated in 2023. The permitting and predesign are funded by a Department of
Ecology grant and loan. Funding for final design and construction is unsecured,
however, the City applied for a loan through the Department of Ecology.
Gaines Street Pump Station Corrosion Control
This station pumps wastewater from the downtown to the City’s Wastewater Treatment
Plant. This project will repair the deteriorated concrete caused from the natural
corrosive elements of wastewater and place a protective seal coat on the walls to
prevent future corrosion.
2020 Completed Projects:
Complete Streets
The City received $250,000 in grant funding from TIB for improvements to ADA ramps
and sidewalks. The major sidewalk project included with this grant was 9th Street
between Hancock and Grant Street, which has been completed. The ADA ramp
projects were also completed in 2020.
2021 Budget Section 4 - Page 1 of 27
CERB Rainier (formerly Howard Street) Street and Regional Stormwater projects
The CERB funding provided for a portion of the stormwater facilities on the Howard
Street Extension project, as well as, funding of a regional stormwater pond and
conveyance system for the runoff from the properties adjacent to Rainier Street from
Discovery Road, south to Sims Way and properties south of Sims Way. The new
system allows denser development to occur in the commercial district while providing
necessary stormwater detention in an area where stormwater can infiltrate into the soil.
Total CERB loan funding was $1,200,000, of which a portion funded the stormwater
conveyance system installed during the Howard Street Extension project. The
remaining funds were used for the design, property acquisition and construction of the
regional facility which will be completed by the end of 2020.
Other Future Projects
Other projects that have been identified in the Capital Improvement Plan that need to be
addressed over a six-year period include:
• Elevators for Historic City Hall & Library $ 330,000
• Pink House Restorations $ 200,000
• Discovery Road - Sheridan to Rainier $ 2,750,000
• 1MG Re-Coat $ 750,000
• Infiltration/Inflow Removal $ 260,000
• Wastewater Master Plan $ 130,000
• South West Sewer Pump Station $ 4,330,000
• Cliff Street Sewer $ 425,000
• Basin Planning Study $ 50,000
• Stormwater Master Plan Update $ 100,000
• Stormwater Street Improvements $ 335,000
The projects listed above that are included in the 6-year Capital Improvement Plan are
still in the initial review stage. As design and construction details are developed, costs
will be updated, and these projects will be prioritized based on the greatest need and
available funding. Most of these projects do not have a funding source at this time but
have been identified as City priorities.
The Wastewater Master Plan is a critical element in determining the City’s utility capital
priorities. The last general sewer plan was completed in 2000. Since that time, many of
the projects in the plan have been addressed and new needs have surfaced. An update
to the plan will include a review and development of plans for the Wastewater
Treatment Plant, the biosolids compost facility, and the collection system. The plan
update is scheduled for 2022, however, staff is determining if the timing of the update is
better suited for 2021.
2021 Budget Section 4 - Page 2 of 27
Ordinance 3258
Page 1 of 2
Ordinance No. 3258
AN ORDINANCE OF THE CITY OF PORT TOWNSEND, WASHINGTON,
ADOPTING THE CAPITAL IMPROVEMENT PLAN FOR 2021 THROUGH 2026
WHEREAS, the City of Port Townsend has adopted a Comprehensive Plan and has
amended it in accordance with the requirements of the Growth Management Act (“GMA”)
(Chapter 36.70A of the Revised Code of Washington); and,
WHEREAS, the GMA requires a capital facilities plan as a mandatory element of the
City’s Comprehensive Plan and the City has adopted such a plan, commonly referred to as the
City’s Capital Improvement Plan; and,
WHEREAS, the Capital Improvement Plan provides the six-year capital facility program
for the City, subject to appropriation by the Council of funding for the projects contained in the
Plan; and,
WHEREAS, RCW 36.70A.130 and Section 20.04.030A(7) of the Port Townsend
Municipal Code allow the city to adopt changes to the Capital Improvement Plan concurrently
with the adoption of the city’s budget; and,
WHEREAS, the City Council held a public hearing on November 2, 2020, on the
proposed 2021-2026 Capital Improvement Plan.
NOW THEREFORE, the City Council of the City of Port Townsend do ordain as
follows:
Section 1. Findings and Conclusions. The proposed 2021-2026 Capital Improvement
Plan is consistent with and implements the currently-adopted Capital Facilities and
Utility Elements of the Comprehensive Plan are consistent with RCW 36.70A.070(3) and
the Comprehensive Plan, and are in the public interest.
Section 2. The City adopts the 2021-2026 Capital Improvement Plan as substantially
shown at Exhibit A.
Section 3. Severability. If any sentence, clause or phrase of this Ordinance should be
held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity
or unconstitutionality shall not affect the validity or constitutionality of any other section,
sentence, clause, or phrase or work of this ordinance.
Section 4. Transmittal to Department of Commerce. The City Clerk shall transmit a copy
of this Ordinance to the State Department of Commerce (DOC) within ten (10) days of
adoption of this ordinance.
2021 Budget Section 4 - Page 3 of 27
Ordinance 3258
Page 2 of 2
Section 5. Effective Date. This Ordinance shall take effect and be in force 5 days
following its publication in the manner provided by law.
ADOPTED by the City Council of the City of Port Townsend, Washington, at a regular
meeting thereof, held this 16th day of November 2020.
_________________________
Michelle Sandoval
Mayor
Attest: Approved as to Form:
___________________________ _________________________
Joanna Sanders, MMC Heidi Greenwood
City Clerk City Attorney
2021 Budget Section 4 - Page 4 of 27
Capital Improvement Plan 2021 - 2026
General Government
* This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
Elevators (City Hall & Library)
Funding Sources
- Unsecured Funds 165,000 165,000 330,000 Total - 165,000 165,000 - 330,000
ExpendituresDesign/Construction 165,000 165,000 330,000 Project Management -
- Total - 165,000 165,000 - 330,000
Pink House Restorations
Funding Sources
- Unsecured Funds 200,000 200,000 Total - 200,000 - - - - 200,000
ExpendituresDesign/Construction 200,000 200,000 Project Management - Total - 200,000 - - 200,000
Funding Sources
-
- Total - - - - -
ExpendituresDesign/Construction - Project Management -
- Total - - - - -
- 365,000 165,000 - - - 530,000
- 365,000 165,000 - - - 530,000
11/5/2020
Ordinance 3258 Exhibit A
Page 1 of 10
2021 Budget Section 4 - Page 5 of 27
Capital Improvement Plan 2021 - 2026
Street
* This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
1025 Discovery Road - Bicycle & Pedstrian Facilities (Rainier to Sheridan)
Funding SourcesWSDOT - STP Funds 135,000 135,000 2020 Bond 115,793 115,793 WSDOT - Bike/Ped Grant 1,442,000 1,442,000 Total 1,692,793 - - - - - 1,692,793
ExpendituresDesign 257,000 257,000 Construction 1,219,700 1,219,700 Project Management 216,093 216,093 Total 1,692,793 - - - - - 1,692,793
Discovery Road Improvements
Funding Sources
- TIB (unsecured)2,600,000 2,600,000 Unsecured Funds TIB match - - Total - - 2,600,000 - - - 2,600,000
ExpendituresDesign 200,000 200,000 Construction 2,100,000 2,100,000 Project Management 300,000 300,000 Total - - 2,600,000 - - - 2,600,000
City Wide Sidewalks/ADA/Multi Use Trail
Funding Sources
Unsecured Funds 50,000 50,000 50,000 50,000 200,000
- Total - - 50,000 50,000 50,000 50,000 200,000
ExpendituresDesign - Construction 50,000 50,000 50,000 50,000 200,000 Project Management - Total - - 50,000 50,000 50,000 50,000 200,000
Pavement preservation City Wide
Funding Sources
11/5/2020
Ordinance 3258 Exhibit A
Page 2 of 10
2021 Budget Section 4 - Page 6 of 27
Capital Improvement Plan 2021 - 2026
Street
* This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
- Unsecured Funds 1,000,000 1,000,000 1,000,000 1,000,000 4,000,000
- Total - - 1,000,000 1,000,000 1,000,000 1,000,000 4,000,000
ExpendituresDesign - Construction 1,000,000 1,000,000 1,000,000 1,000,000 4,000,000 Project Management - Total - - 1,000,000 1,000,000 1,000,000 1,000,000 4,000,000
Neighborhood Traffic Calming
Funding Sources
- Unsecured Funds 20,000 20,000 20,000 20,000 80,000
- Total - - 20,000 20,000 20,000 20,000 80,000
ExpendituresDesign - Construction 20,000 20,000 20,000 20,000 80,000 Project Management - Total - - 20,000 20,000 20,000 20,000 80,000
Total TIP Projects
Funding SourcesUnsecured Funds 950,000 62,880,000 63,830,000
-
- Total - - - - 950,000 62,880,000 63,830,000
ExpendituresDesign - Construction 950,000 62880000 63,830,000 Project Management - Total - - - - 950,000 62,880,000 63,830,000
1,692,793 - 3,670,000 1,070,000 2,020,000 63,950,000 72,402,793
1,692,793 - 3,670,000 1,070,000 2,020,000 63,950,000 72,402,793
11/5/2020
Ordinance 3258 Exhibit A
Page 3 of 10
2021 Budget Section 4 - Page 7 of 27
Capital Improvement Plan 2021 - 2026
Water
*This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
6000 Water General
Funding Sources
- Operating Transfer - SDC 220,000 220,000 220,000 220,000 220,000 220,000 1,320,000 Total 220,000 220,000 220,000 220,000 220,000 220,000 1,320,000
Expenditures
- Design/Construction 190,000 150,000 150,000 150,000 150,000 150,000 940,000 Project Management 30,000 70,000 70,000 70,000 70,000 70,000 380,000 Total 220,000 220,000 220,000 220,000 220,000 220,000 1,320,000
6033 Discovery Road
Funding Sources - Operating Transfer 75,000 5,000 80,000 SDC 15,000 145,000 160,000 Total 90,000 - 150,000 - 240,000
Expenditures
- Design/Construction 75,000 125,000 200,000 Project Management 15,000 25,000 40,000 Total 90,000 - 150,000 - - - 240,000
1MG - Re-Coat
Funding SourcesUnsecured Funds 750,000 750,000
- Total - - 750,000 - - - 750,000
Expenditures
- Design/Construction 720,000 720,000 Project Management 30,000 30,000 Total - - 750,000 - - - 750,000
310,000 220,000 1,120,000 220,000 220,000 220,000 2,310,000
310,000 220,000 1,120,000 220,000 220,000 220,000 2,310,000
11/5/2020
Ordinance 3258 Exhibit A
Page 4 of 10
2021 Budget Section 4 - Page 8 of 27
Capital Improvement Plan 2021 - 2026
Sewer
* This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
7000 Sewer General
Funding SourcesOperating Transfer 15,000 40,000 40,000 40,000 40,000 40,000 215,000 SDC 45,000 120,000 120,000 120,000 120,000 120,000 645,000 Total 60,000 160,000 160,000 160,000 160,000 160,000 860,000
ExpendituresDesign/Construction 22,600 100,000 100,000 100,000 100,000 100,000 522,600 Project Management 37,400 60,000 60,000 60,000 60,000 60,000 337,400 Total 60,000 160,000 160,000 160,000 160,000 160,000 860,000
7013 Outfall Replacement
Infrastructure Condition
Funding SourcesECY Loan/Grant 110,000 400,000 2,820,000 3,330,000 Total 110,000 400,000 2,820,000 - - - 3,330,000
ExpendituresDesign/Construction 60,000 350,000 2,620,000 3,030,000 Project Management 50,000 50,000 200,000 300,000
- Total 110,000 400,000 2,820,000 - - - 3,330,000
7026 Gaines Street Pump Station
Infrastructure Condition Mandate (Vulnerability)
Funding SourcesSewer Capital Surcharge 750,000 750,000 Total 750,000 - - - - - 750,000
ExpendituresDesign/Construction 700,000 700,000 Project Management 50,000 50,000
- Total 750,000 - - - - - 750,000
11/5/2020
Ordinance 3258 Exhibit A
Page 5 of 10
2021 Budget Section 4 - Page 9 of 27
Capital Improvement Plan 2021 - 2026
Sewer
* This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
7033 Discovery Road Sewer
Funding SourcesSewer Capital Surcharge 25,000 25,000 SDC 75,000 75,000 Total 100,000 - - - - - 100,000
ExpendituresDesign/Construction 80,000 80,000 Project Management 20,000 20,000
- Total 100,000 - - - - - 100,000
Infiltration/Inflow Removal
Desirable Investment in System
Funding Sources
- Sewer Capital Surcharge 260,000 260,000 Total - 260,000 - - - - 260,000
ExpendituresDesign/Construction 200,000 200,000 Project Management 60,000 60,000
- Total - 260,000 - - - - 260,000
Wastewater Master Plan/WWTP
Funding Sources
- Sewer Capital Surcharge 130,000 130,000 Total - 130,000 - - - - 130,000
ExpendituresDesign/Construction 30,000 30,000
11/5/2020
Ordinance 3258 Exhibit A
Page 6 of 10
2021 Budget Section 4 - Page 10 of 27
Capital Improvement Plan 2021 - 2026
Sewer
* This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project Project Management 100,000 100,000
- Total - 130,000 - - - - 130,000
South West Sewer Pump Station
Contributes to Economic Development
Funding SourcesUnsecured Funds 4,330,000 4,330,000
- Total - - - - - 4,330,000 4,330,000
ExpendituresDesign/Construction 4,000,000 4,000,000 Project Management 330,000 330,000
- Total - - - - - 4,330,000 4,330,000
Cliff Street Sewer
Funding SourcesUnsecured Funds 425,000 425,000
- Total - - - - - 425,000 425,000
ExpendituresDesign/Construction 375,000 375,000 Project Management 50,000 50,000
- Total - - - - - 425,000 425,000
1,020,000 950,000 2,980,000 160,000 160,000 4,915,000 10,185,000
1,020,000 950,000 2,980,000 160,000 160,000 4,915,000 10,185,000
11/5/2020
Ordinance 3258 Exhibit A
Page 7 of 10
2021 Budget Section 4 - Page 11 of 27
Capital Improvement Plan 2021 - 2026
Storm
*This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
8000 Stormwater System Improvements
Funding SourcesOperating Transfer - 50,000 150,000 50,000 50,000 50,000 350,000
- Total - 50,000 150,000 50,000 50,000 50,000 350,000
ExpendituresDesign/Construction - 40,000 120,000 40,000 40,000 40,000 280,000 Project Management - 10,000 30,000 10,000 10,000 10,000 70,000
- Total - 50,000 150,000 50,000 50,000 50,000 350,000
8028 CERB Regional Facility
Funding SourcesCERB 35,000 35,000 PIFOperating Transfer - Total 35,000 - - - - - 35,000
ExpendituresDesign/Construction - Project Management 35,000 35,000
- Total 35,000 - - - - - 35,000
8017 Discovery Road
Funding SourcesOperating Transfer 200,000 200,000 Unsecured Funds - Total 200,000 - - - - - 200,000
ExpendituresDesign/Construction 193,000 193,000 Project Management 7,000 7,000
- Total 200,000 - - - - - 200,000
Basin Planning Studies
Funding SourcesOperating Transfer 50,000 50,000 Total - - 50,000 - - - 50,000
11/5/2020
Ordinance 3258 Exhibit A
Page 8 of 10
2021 Budget Section 4 - Page 12 of 27
Capital Improvement Plan 2021 - 2026
Storm
*This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
Project
ExpendituresDesign/Construction 25,000 25,000 Project Management 25,000 25,000
- Total - - 50,000 - - - 50,000
Stormwater Management Plan Update
Funding SourcesOperating Transfer 100,000 100,000 Total - - - - 100,000 - 100,000
ExpendituresDesign/Construction 75,000 75,000 Project Management 25,000 25,000
- Total - - - - 100,000 - 100,000
16th St - Sheridan to Landes
Funding SourcesOperating Transfer 60,000 150,000 210,000 Total - - 60,000 150,000 - - 210,000
ExpendituresDesign/Construction 40,000 110,000 150,000 Project Management 20,000 40,000 60,000
- Total - - 60,000 150,000 - - 210,000
Center St - San Juan Ave to Olympic Ave
Funding SourcesOperating Transfer 125,000 125,000 Total - - - - - 125,000 125,000
ExpendituresDesign/Construction 85,000 85,000 Project Management 40,000 40,000
- Total - - - - - 125,000 125,000
235,000 50,000 260,000 200,000 150,000 175,000 1,070,000
235,000 50,000 260,000 200,000 150,000 175,000 1,070,000
11/5/2020
Ordinance 3258 Exhibit A
Page 9 of 10
2021 Budget Section 4 - Page 13 of 27
Capital Improvement Plan 2021 - 2026
City-Wide
* This plan shows the 6-year plan for capital projects.
2021 2022 2023 2024 2025 2026 6-Year Total
General Government
Funding SourcesCDBG - - - - - - - Donations - - - - - - - Voted Bond - - - - - - - 2017 Bond - - - - - - - Unsecured Funds - 365,000 165,000 - - - 530,000
Total - 365,000 165,000 - - - 530,000 -
ExpendituresDesign/Construction - 365,000 165,000 - - - 530,000 Project Management - -- - - - - -
Total - 365,000 165,000 - - - 530,000
Street
Funding SourcesWSDOT - STP funds 135,000 - - - - - 135,000 WSDOT - Bike/Ped Grant 1,442,000 - - - - - 1,442,000 PIF Grant - - - - - - - 2017 Bond - - - - - - - CERB - - - - - - - REET - - - - - - - Fund Balance - - - - - - - Line of Credit - - - - - - - TIB (unsecured)- - 2,600,000 - - - 2,600,000 Unsecured Funds - - 1,070,000 1,070,000 2,020,000 63,950,000 68,110,000
Total 1,577,000 - 3,670,000 1,070,000 2,020,000 63,950,000 72,287,000 -
ExpendituresROW - - - - - - - Line of Credit (LOC)- - - - - - - Interest on LOC - - - - - - - Design 257,000 - 200,000 - - - 457,000 Construction 1,219,700 - 3,170,000 1,070,000 2,020,000 63,950,000 71,429,700 Project Management 216,093 - 300,000 - - - 516,093
1,692,793 - 3,670,000 1,070,000 2,020,000 63,950,000 72,402,793
Water
Funding SourcesCapital Surcharge - - - - - - - DWSRF - - - - - - - PWTF - - - - - - - Operating Transfer 75,000 - 5,000 - - - 80,000 SDC 235,000 220,000 365,000 220,000 220,000 220,000 1,480,000 OGWS - - - - - - - Unsecured Funds - - 750,000 - - - 750,000
Total 310,000 220,000 1,120,000 220,000 220,000 220,000 2,310,000 -
ExpendituresDesign/Construction 265,000 150,000 995,000 150,000 150,000 150,000 1,860,000 Project Management 45,000 70,000 125,000 70,000 70,000 70,000 450,000 Interest on LOC - - - - - - -
Total 310,000 220,000 1,120,000 220,000 220,000 220,000 2,310,000
Sewer
Funding SourcesSewer Capital Surcharge 775,000 390,000 - - - - 1,165,000 SDC 120,000 120,000 120,000 120,000 120,000 120,000 720,000 ECY Loan/Grant 110,000 400,000 2,820,000 - - - 3,330,000 Operating Transfer 15,000 40,000 40,000 40,000 40,000 40,000 215,000 LTAC - - - - - - - Unsecured Funds - - - - - 4,755,000 4,755,000
Total 1,020,000 950,000 2,980,000 160,000 160,000 4,915,000 10,185,000
ExpendituresDesign/Construction 862,600 680,000 2,720,000 100,000 100,000 4,475,000 8,937,600 Project Management 157,400 270,000 260,000 60,000 60,000 440,000 1,247,400
Total 1,020,000 950,000 2,980,000 160,000 160,000 4,915,000 10,185,000
Storm
Funding SourcesCERB 35,000 - - - - - 35,000 PIF - - - - - - - Storm Fund - - - - - - - Operating Transfer 200,000 50,000 260,000 200,000 150,000 175,000 1,035,000 Line of Credit - - - - - - - Unsecured Funds - - - - - - -
Total 235,000 50,000 260,000 200,000 150,000 175,000 1,070,000 -
ExpendituresDesign/Construction 193,000 40,000 185,000 150,000 115,000 125,000 808,000 Project Management 42,000 10,000 75,000 50,000 35,000 50,000 262,000
235,000 50,000 260,000 200,000 150,000 175,000 1,070,000
11/5/2020
Ordinance 3258 Exhibit A
Page 10 of 10
2021 Budget Section 4 - Page 14 of 27
Resolution 20-039
RESOLUTION NO. 20-039
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND,
WASHINGTON, APPROVING THE 2021-2026 SIX-YEAR TRANSPORTATION
IMPROVEMENT PROGRAM AND AUTHORIZING THE CITY MANAGER TO
SUBMIT THIS TO THE STATE
WHEREAS, the City Council has reviewed the 2021-2026 Six-Year Transportation
Improvement Program (TIP) and held a public hearing on July 6, 2020 for public comment; and,
WHEREAS,the City is required by the State of Washington Department of
Transportation (WSDOT) to adopt its annual six-year Transportation Improvement Program
TIP) by June 30 of each year; and,
WHEREAS, the TIP is primarily intended to designate federally funded and regionally
significant projects; and,
WHEREAS, the City Council has established priorities for transportation improvement
projects and these are reflected in the TIP;
NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of Port
Townsend that the Mayor is hereby authorized to sign this resolution approving the Six-Year
Transportation Improvement Program for 2021-2026 for submission to the State Department of
Transportation for their State Transportation Improvement Program (STIP).
And that the City Manager may make minor modifications to the TIP for the next 12
months to reflect changes in project funding or implementation schedules that may more closely
align with actual project progress and to meet the needs of WSDOT and the STIP.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof, held this 6th day of July 2020.
Michelle lc al.
Mayor
Attest: Approved as to form:
Joanna Sanders MMC Heidi irc+ wot
City Clerk City Attorney
2021 Budget Section 4 - Page 15 of 27
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2021 Budget Section 4 - Page 16 of 27
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Budget Section 4 - Page 20 of 27
Discovery Road Pedestrian and Bicycle Facilities - Rainier to Sheridan
Project Description:
Service Impact:
Project
Estimate
Prior
Years Actual
2020
Adopted
Budget
2020
YTD Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Project
Revenues
WSDOT 435,000 - 435,000 44,237 300,000 135,000 435,000
REET
WSDOT - Bike/Ped 1,442,000 - 1,442,000 - - 1,442,000 1,442,000
2020 Bonds 250,000 - 250,000 - 134,207 115,793 250,000
Water Operations Transfer 80,000 - 80,000 - 5,000 75,000 80,000
Water SDCs Transfer 20,000 - 20,000 - 5,000 15,000 20,000
Sewer Operations Transfer 25,000 - - - 25,000 25,000
Sewer SDCs Transfer 75,000 - - - 75,000 75,000
Storm Operations Transfer 200,000 - - - 200,000 200,000
Total Project Revenues 2,527,000 2,227,000 44,237 444,207 2,082,793 2,527,000
Expenditures
Planning/Preliminary Engineering
Design 420,300 300 395,000 27,065 305,000 115,000 420,300
Permitting 60,000 - 60,000 - 60,000 60,000
Right-of-Way 102,000 - 102,000 - 102,000 102,000
Construction 1,300,000 - 1,052,000 - 1,300,000 1,300,000
Construction Engineering
Project Management 397,000 13,907 356,093 102,502 125,000 258,093 397,000
Miscellaneous 65,000 - 65,000 - 65,000 65,000
Construction Contingency 182,700 - 182,700 - 182,700 182,700
Total Project Expenditures 2,527,000 14,207 2,212,793 129,567 430,000 2,082,793 2,527,000
Estimated Impact on Future Operating Budgets 2020
Current Budget
2020
YTD
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Operating
Debt 250,000 - 134,207 115,793
Total Impact 250,000 - 134,207 115,793 - - 250,000
Notes:Design of this project starts in 2020 with possible construction in 2021. These two grants require a city match
of approximately $250,000, which will be funded with bonds issued in late 2020.
The project is to construct a bicycle way,sidewalk and curb ramps on the
south side of Discovery Road connnecting the roundabout at Rainier
Street to the Salish School and on to Sheridan Street.The project will
also include flashing crossing beacons
Safety improvements for pedestrians and bicyclists.
Actuals thru 9/30/2020 2021 Budget Section 4 - Page 21 of 27
Water General - Priority Waterlines
Project Description:
Service Impact:
Project
Estimate
Prior
Years Actual
2020
Adopted
Budget
2020
YTD Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Project
Revenues
Water SDCs Transfer 220,000 220,000 115,357 220,000 220,000 220,000 220,000 220,000 220,000 220,000 1,540,000
Total Project Revenues 220,000 220,000 115,357 220,000 220,000 220,000 220,000 220,000 220,000 220,000 1,540,000
Expenditures
Planning/Preliminary Engineering
Design
Permitting
Construction 190,000 150,000 - 100,000 190,000 150,000 150,000 150,000 150,000 150,000 1,040,000
Construction Engineering
Project Management 30,000 70,000 115,357 120,000 30,000 70,000 70,000 70,000 70,000 70,000 500,000
Miscellaneous
Construction Contingency
Total Project Expenditures 220,000 220,000 115,357 220,000 220,000 220,000 220,000 220,000 220,000 220,000 1,540,000
Estimated Impact on Future Operating Budgets 2020
Current Budget
2020
YTD
2020
Projected
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Operating
Debt
Total Impact - - - - - - - - - -
Notes:
This project category is for extension and replacement projects for the City's water distribution system.
Current anticipated projects include:•Cherry Street -This property had a City water main running across
the lot that had to be abandoned.A new water main must now be installed around the property to restore
the looping in the water system. This line will be designed and installed in 2021.
Other 2021 Priority Waterline Projects:
• 17th Street
• 52nd Street
Cherry and D Street
Infrastructure preservation and upgrades.
Actuals thru 9/30/2020 2021 Budget Section 4 - Page 22 of 27
Collection System Improvements
Project Description:
Service Impact:
Project
Estimate
Prior
Years Actual
2020
Adopted
Budget
2020
YTD Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Project
Revenues
Sewer Operations Transfer 40,000 40,000 40,000 40,000 15,000 40,000 40,000 40,000 40,000 40,000 255,000
Sewer SDCs Transfer 120,000 120,000 13,555 120,000 45,000 120,000 120,000 120,000 120,000 120,000 765,000
Total Project Revenues 160,000 160,000 53,555 160,000 60,000 160,000 160,000 160,000 160,000 160,000 1,020,000
Expenditures
Planning/Preliminary Engineering
Design
Permitting
Construction 100,000 100,000 - 100,000 22,600 100,000 100,000 100,000 100,000 100,000 622,600
Construction Engineering
Project Management 60,000 60,000 53,555 60,000 37,400 60,000 60,000 60,000 60,000 60,000 397,400
Miscellaneous
Construction Contingency
Total Project Expenditures 160,000 160,000 53,555 160,000 60,000 160,000 160,000 160,000 160,000 160,000 1,020,000
Estimated Impact on Future Operating Budgets 2020
Current Budget
2020
YTD
2020
Projected
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Operating
Debt
Total Impact - - - - - - - - - -
Notes:
This project category is for sewer line extensions,sewer line replacement and maintenance hole installation
that improve the wastewater collection infrastructure.Upcoming priority projects include a two-block section
of the City's main trunk sewer that is undersized and needs replacement.This section limits the capacity of
the sewer trunk line. The project is programmed for design in 2020 and construction in 2021.
System Improvement.
Actuals thru 9/30/2020 2021 Budget Section 4 - Page 23 of 27
Sewer Outfall
Project Description:
Service Impact:
Project
Estimate
Prior
Years Actual
2020
Adopted
Budget
2020
YTD Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Project
Revenues
ECY Grant/Loan 408,000 225,091 182,909 182,909 182,909 408,000
Sewer SDCs Transfer 200,000 92,576 107,424 - 107,424 200,000
Sewer Operations Transfer
Ecology Loan 3,330,000 - - - - 110,000 400,000 2,820,000 3,330,000
Total Project Revenues 3,938,000 317,667 290,333 182,909 290,333 110,000 400,000 2,820,000 3,938,000
Expenditures
Planning/Preliminary Engineering 205,000 985 - - 985
Design/Permitting 300,000 327,404 176,577 61,847 176,577 503,981
Prepare Bid Docs 300,000 - - - 300,000 300,000
Right-of-Way
Construction 2,330,000 - - - 50,000 2,280,000 2,330,000
Construction Engineering 150,000 - - - 150,000 150,000
Project Management 403,000 72,798 30,000 12,920 30,000 50,000 50,000 200,000 402,798
Miscellaneous 60,000 236 - - 60,000 60,236
Construction Contingency 190,000 - - - 190,000 190,000
Total Project Expenditures 3,938,000 401,423 206,577 74,767 206,577 110,000 400,000 2,820,000 3,938,000
Estimated Impact on Future Operating Budgets 2020
Current Budget
2020
YTD
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Operating
Debt - - - 110,000 400,000 2,820,000
Total Impact - - - 110,000 400,000 2,820,000 3,330,000
Notes:The City has applied for funding from the Department of Ecology for design and construction.
This project includes permitting,design and construction to replace the
off-shore portion of the existing wastewater treatment plant outfall
system with a new outfall and diffuser. The new outfall will provide
hydraulic capacity for current and future effluent flows,and allowing the
system to meet state water quality standards for discharge to the Strait
of Juan De Fuca.
Replacement of aging infrastructure. A secondary benefit of this project
is the expanded capacity to accommodate projected increases in future
flows by gravity under varying tide conditions.
Actuals thru 9/30/2020 2021 Budget Section 4 - Page 24 of 27
Gaines Street Pump Station Corrosion Control
Project Description:
Service Impact:
Project
Estimate
Prior
Years Actual
2020
Adopted
Budget
2020
YTD Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Project
Revenues
Sewer SDCs Transfer 100,000 - 100,000 - 100,000 100,000
Sewer Capital Surcharge 824,505 9,505 120,495 3,115 65,000 750,000 824,505
Total Project Revenues 924,505 9,505 220,495 3,115 165,000 750,000 924,505
Expenditures
Planning/Preliminary Engineering
Design 150,000 - 150,000 - 150,000 150,000
Permitting
Construction 709,505 9,505 30,495 - - 700,000 709,505
Construction Engineering
Project Management 65,000 - 40,000 3,115 15,000 50,000 65,000
Miscellaneous
Construction Contingency
Total Project Expenditures 924,505 9,505 220,495 3,115 165,000 750,000 924,505
Estimated Impact on Future Operating Budgets 2020
Current Budget
2020
YTD
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Operating
Debt
Total Impact - - - - - - -
Notes:
The Gaines Street pump station collects wastewater from the downtown
area and pumps it to the trunk sewer that transmits wastewater to the
City's Wastewater treatment plant. The pump station has experienced
degradation due to the corrosive nature of the wastewater.The fix will
require removing the pump station from service,temporary bypass of
wastewater, and repairing walls and covering with a protective seal coat.
The pump station also needs shoreline stabilization and armoring.
Protecting critical infrastructure.
Actuals thru 9/30/2020 2021 Budget Section 4 - Page 25 of 27
Storm System Improvements
Project Description:
Service Impact:
Project
Estimate
Prior
Years Actual
2020
Adopted
Budget
2020
YTD Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Project
Revenues
Storm Operations Transfer 50,000 12,660 43,075 48,575 48,575 - 50,000 150,000 50,000 50,000 50,000 411,235
Total Project Revenues 50,000 12,660 43,075 48,575 48,575 50,000 150,000 50,000 50,000 50,000 411,235
Expenditures
Planning/Preliminary Engineering
Design
Permitting
Construction 40,000 - 16,235 16,235 16,235 - 40,000 120,000 40,000 40,000 40,000 296,235
Construction Engineering
Project Management 10,000 - 39,412 41,353 45,000 - 10,000 30,000 10,000 10,000 10,000 115,000
Miscellaneous
Construction Contingency
Total Project Expenditures 50,000 55,647 57,588 61,235 50,000 150,000 50,000 50,000 50,000 411,235
Estimated Impact on Future Operating Budgets 2020
Current Budget
2020
YTD
2020
Projected
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Operating
Debt
Total Impact - - - - - - - - - -
Notes:
The storm system improvements are a combination of conveyance system improvements (i.e.roadside
ditches,swales infiltration system,curbing,etc.)along the City’s arterials and collectors.In addition,every 4-5
years the City anticipates doing a major arterial or collector roadway reconstruction and part of a roadway
reconstruction is to upgrade and/or enhance the roadway drainage system.
System Improvement.
Actuals thru 9/30/2020 2021 Budget Section 4 - Page 26 of 27
CERB Regional Stormwater
Project Description:
Service Impact:
Project
Estimate
Prior
Years Actual
2020
Adopted
Budget
2020
YTD Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Project
Revenues
Storm Operations Transfer 155,000 154,765 - - 154,765
CERB Loan 930,000 255,271 674,729 79,961 639,729 35,000 930,000
Misc Contributions 170 - - 170
PIF Grant 300,000 - 300,000 - 300,000 300,000
Total Project Revenues 1,385,000 410,206 974,729 79,961 939,729 35,000 1,384,935
Expenditures
Planning/Preliminary Engineering 5,000 4,371 577 394 577 4,948
Design 285,000 255,182 30,000 37,232 37,232 292,414
Permitting
Construction 700,000 16 700,000 530 687,196 687,212
Construction Engineering 35,000 - 35,000 - 35,000 35,000
Project Management 230,000 71,626 158,000 110,277 125,000 35,000 231,626
Property/Easements 130,000 102,162 28,000 31,572 31,572 133,734
Construction Contingency
Total Project Expenditures 1,385,000 433,357 951,577 180,005 916,577 35,000 1,384,934
Estimated Impact on Future Operating Budgets 2020
Current Budget
2020
YTD
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Operating
Debt 81,362 81,362 81,362 81,362 81,362 81,362
Total Impact 81,362 81,362 81,362 81,362 81,362 81,362 569,531
Notes:The project has a completion deadline of October 2021.
This project will construct a new regional stormwater detention and
infiltration system to serve commercial properties along Rainier Street,
where soil conditions limit stormwater management options.The
project is funded largely in part by a CERB loan.
Economic development.
Actuals thru 9/30/2020 2021 Budget Section 4 - Page 27 of 27
CITY OF PORT TOWNSEND, WASHINGTON
FINANCIAL POLICIES
The City Council adopted updated “Finance and Budget Policy Guidelines” on October 21,
2019 (Resolution 19-085). These policy guidelines lay the framework for fund reserves,
revenue policies, transfers and inter-fund loans, general expenditure policies, debt
management, grant administration and budget and long-range forecasting.
Fund Reserve Policy
Fund Reserve targets were adopted to allow the City to maintain enough working capital and
to weather emergencies or unexpected revenue declines. The 2021 budget was developed to
ensure that ending fund balance amounts would align with the City Council Fund Balance
Reserve Policy.
Along with Fund Reserve requirements, our financial policies provide that, in general,
operating revenues should cover operating expenditures. For 2021, the Golf Course Fund,
System Development Charges Fund, and Water/Sewer Capital Fund have expenditures in
excess of revenues.
The Golf Course Fund, System Development Charges Fund, and Water/Sewer Capital Fund
are projected to use a portion of fund balance excess reserves to fund expenditures for 2021.
•The Golf Course Fund is using $572 of reserves to fund expenditures in 2021.
•System Development Charges are being used to fund new water and sewer capital
projects in 2021 resulting in a fund balance reduction of $44,686.
•The Water/Sewer Capital fund balance is being drawn down by $481,583 to fund the
Gaines Street Pump Station restoration project in 2021.
.
2021 Budget Section 5 - Page 1 of 103
Fund Balance Reserve Summary:
The following reserve balance scorecard shows the fund balance reserve results:
COUNCIL POLICY FUND TARGET
2017
Actual
Fund
2018
Actual
Fund
2019
Actual
Fund
2020
Estimated
Fund
2021
Budget
Fund
FUNDS (Policy Adopted October, 2019)Reserve % Reserve % Reserve % Reserve % Reserve %
General Operating Fund
General Fund 8 - 15% of operating revenue 20.4% 20.4% 18.8% 20.6% 19.6%
Special Revenue Funds
Contingency Fund No less than 2% of estimated operating revenue 2.1% 2.0% 1.8% 2.0% 1.9%
Street Fund 2 - 3% of expenditures 47.1% 26.3% 39.3% 41.0% 39.0%
Library Fund 5 - 8% of property tax revenue 23.2% 20.1% 23.2% 31.0% 32.4%
Real Estate Excise Tax Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Lodging Tax Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Fire & EMS Services Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Affordable Housing Trust Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Community Development Block Grant Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Community Services Fund 2 - 3% of expenditures 4.6% 5.0% 5.3% 11.9% 11.2%
General Obligation Debt Service Fund
G.O. Debt Service Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Capital Projects Funds
General Capital Improvement Funds Sufficient to meet obligations Meets Meets Meets Meets Meets
Street Vacation Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Street Capital Improvement Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
2015 Bond Fund Sufficient to meet obligations Meets Meets Meets N/A N/A
2017 Bond Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
2018 Bond Fund Sufficient to meet obligations N/A Meets Meets Meets Meets
2020 Bond Fund Sufficient to meet obligations N/A N/A N/A Meets Meets
Enterprise Funds
System Development Charges Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Water Sewer Operating Fund 60 days of operating expenses 226 102 125 131 125
Water Sewer Capital Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Stormwater Operating Fund 60 days of operating expenses 137 81 68 164 134
Stormwater Capital Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Transmission Line Replacement Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
1978 Water Sewer Revenue Bond Fund Sufficient to meet obligations Meets Meets N/A N/A N/A
2020 Water Sewer Revenue Bond Fund Sufficient to meet obligations N/A N/A N/A Meets N/A
Utility Debt Reserve Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Golf Course Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Internal Service Funds
Public Works Admin Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Equipment Rental & Replacement Fund Sufficient to meet obligations Meets Meets Meets Meets
Engineering Service Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Self-Insurance Unemployment Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Fiduciary Funds
Firemen's Pension Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Custodial Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
Memorial Fund Sufficient to meet obligations Meets Meets Meets Meets Meets
2017
Actual
2018
Actual
2019
Actual
2020
Estimated
2021
Budget
Annual Debt Service as % of Revenue Less than 15%10.4% 10.4% 10.9% 19.4% 12.8%
2017
Actual
2018
Actual
2019
Actual
2020
Estimated
2021
Budget
Operating revenues 50% or more than pool operating expenses 43.2% 42.7% 32.9% 14.7% 17.6%
Parks & Pool Fees
GO Debt Service as a % of General Government Revenue
Meets
STATUS OF PERFORMANCE COMPARED TO FINANCIAL POLICIES
City of Port Townsend Ending Fund Balance Scorecard
2021 Budget Section 5 - Page 2 of 103
OVERHEAD INDIRECT COST RECOVERY POLICY
The City adopted a policy that allocates the indirect overhead costs, from the General Fund to
other funds. Consistent with the prior four years, City staff used the cost recovery model
developed by FCS Consultants to identify City-wide overhead costs, which include Council,
City Manager, City Clerk/Human Resources, City Attorney, Finance and Facility related
overhead costs. The model uses actual costs from two years previous; that is, the 2020
allocation was based on 2018 historical costs and the 2021 budget allocation was based on
2019 historical costs and activities.
Allocations to funds are based on pre-determined allocation factors. The chart below
represents the City-wide overhead costs for 2021 and the associated allocation factors that
determine how much each receiving fund is charged for overhead services.
Funds that had increases in allocation statistics, such as an increase in full time equivalents
(staff positions), increase in total expenditures, or an increase in department related council
agenda bills will receive a greater share of the overhead allocation. Conversely, funds that use
less administrative resources receive a smaller portion of allocated costs. Allocation statistics
are reviewed each year for appropriateness and updated as necessary.
Total City-wide
Allocable Costs Allocation Factor
011 Mayor & Council 100,009$ Council Bills
012 City Manager 423,993 50/50 Split: Actual Expenditures & FTEs
013 City Attorney - Civil 308,476 33/33/33 Split: Actual Expenditures, FTEs, & Council Bills
041 Finance - General 314,287 Actual Expenditures
041 Finance - AP 70,562 AP Invoices
015 Payroll 165,909 FTEs
015 Human Resources 227,238 FTEs
080 City Clerk - Council Support 167,511 Council Bills
080 City Clerk - General Other 65,113 Vehicle Insurance
080 City Clerk - Records Management 46,023 Records Count
FD 199 Community Services - City Facilities 550,083 Square Feet by Building
Liability Insurance 430,405 FTEs
Property Insurance 58,081 Value of Insured Property
Vehicle Insurance 2,387 # of Vehicles
TOTAL 2,930,077$
Budget 2021 - Indirect Cost Pools and Allocation Factors
Indirect cost pools
2021 Budget Section 5 - Page 3 of 103
A comparison of the 2021 and 2020 overhead allocation charged to funds is shown on the
following table:
The total calculated overhead for 2021 is $2,930,077 or $243,262 greater than the 2020
overhead. Some funds without sustainable resources (e.g. the CDBG Fund and the Affordable
Housing Fund) are not charged overhead and the General Fund does not recover overhead
from itself. For 2021, the overhead allocation recovered by the General Fund increased by
$118,737 largely due to an increase in overhead charges to the Community Services, Streets,
Water/Sewer and Storm funds which had increased council bills, property valuations, and
expenditures related to utility debt service costs in 2019 as compared to 2018. The General
Fund transfers funds to support the overhead allocation for both the Community Services Fund
and the General and Street Capital Project Funds. The net result of the changes in the
overhead allocation received by the General Fund in 2021 is $64,553 more than the amount
received in 2020.
Adopted Cost
Recovery
Budget 2020
2021 Proposed
Overhead
Allocation
Charges
Increase /
(Decrease)
FD 110 Street 48,006$ 69,478$ 21,472$
FD 120 Library 225,088$ 218,385$ (6,703)$
FD 150 Lodging Tax 21,824$ 15,833$ (5,991)$
FD 199 Community Services 215,075$ 266,464$ 51,389$
FD 301 General CIP Projects 51,086$ 34,524$ (16,562)$
FD 305 CIP Street 58,692$ 78,044$ 19,352$
FD 411 Water Sewer Fund (excl. Utility Billing)416,971$ 497,269$ 80,298$
FD 411 Finance - Utility Billing 42,964$ 45,371$ 2,407$
FD 412 Storm Fund 74,414$ 93,196$ 27,797$
FD 414 Storm Capital -$ 9,014$ 9,014$
FD 415 Water Sewer CIP 100,976$ 41,409$ (59,567)$
FD 417 1956 Trans Line Replacement 17,394$ 6,473$ (10,921)$
FD 423 Golf Course 10,714$ 7,785$ (2,929)$
FD 510 Equipment Rental - Fleet 49,706$ 49,758$ 52$
FD 520 Equipment Rental - IT 34,094$ 38,971$ 4,877$
FD 540 Public Works Administration 47,198$ 42,325$ (4,873)$
FD 555 Engineering Services 106,531$ 116,040$ 9,509$
FD 610 Firemen's Pension and Relief 1,224$ 1,340$ 116$
Total Overhead Charged to Funds 1,521,957$ 1,631,679$ 118,737$
Total Calculated Overhead 2,686,815$ 2,930,077$ 243,262$
City Department
Funds Charged with Overhead / Indirect Costs
2021 Budget Section 5 - Page 4 of 103
Comprehensive Financial Management Policy Guidelines - Page 1 of 24
City of
Port Townsend
Comprehensive
Financial
Management
Policy Guidelines
Adopted October 21, 2019
2021 Budget Section 5 - Page 5 of 103
Comprehensive Financial Management Policy Guidelines - Page 2 of 24
Comprehensive Financial Management Policies Index
I. FINANCIAL POLICY GUIDELINES .................................................................................. 3
II. ORGANIZATION ................................................................................................................ 3
III. ACCOUNTING, AUDITING AND FINANCIAL REPORTING ..................................... 4
IV. FUND STRUCUTURE & FUND RESERVE GUIDELINES ........................................... 6
V. REVENUE POLICIES ......................................................................................................... 9
VI. OVERHEAD COST RECOVERY (COST ALLOCATION) .......................................... 10
VII. GENERAL BUDGET POLICIES ................................................................................... 11
VIII. FINANCIAL PLANNING POLICIES .......................................................................... 14
IX. ENTERPRISE FUNDS ..................................................................................................... 14
X. CAPITAL INVESTMENT PROGRAM PLAN POLICIES .............................................. 15
XI. DEBT MANAGEMENT POLICY ................................................................................... 15
XII. PURCHASING POLICY ................................................................................................ 17
XIII. GRANTS MANAGEMENT POLICY .......................................................................... 18
APPENDIX A - INVESTMENT POLICY
APPENDIX B - CITY OF PORT TOWNSEND FEDERAL AWARDS STANDARDS,
PROCUREMENT POLICY & CODE OF CONDUCT
EXHIBIT A - FLEET EQUIPMENT RENTAL AND REPLACMENET FUNDAND FLEET
OPERATING AND MAINTENANCE FUND POLICIES
EXHIBIT B - I.T. EQUIPMENT RENTAL AND REPLACEMENT FUND AND I.T.
OPERATING AND MAINTENANCE FUND POLICIES
EXHIBIT C -PURCHASING POLICIES AND PROCEDURES MANUAL
2021 Budget Section 5 - Page 6 of 103
Comprehensive Financial Management Policy Guidelines - Page 3 of 24
I.FINANCIAL POLICY GUIDELINES
The financial policies outlined in this document have been developed in accordance with
the Government Finance Officers Association’s “Best Practices”. These policy guidelines
are intended to aid the City Council and City management in financial decision making.
These policy guidelines also provide a means to guide short-term financial and budget
decisions to help ensure the City is able to meet its immediate and long-term financial
service objectives and obligations. These policies will be reviewed and/or updated no less
than every three years.
The City of Port Townsend is accountable to its citizens for the use of public funds.
Municipal resources must be wisely used to ensure adequate funding for services, public
facilities and infrastructure needed to meet the community’s present and future needs.
These policies are designed to help safeguard the fiscal stability required to achieve the
City’s goals and objectives.
The City’s Comprehensive Financial Policies have the following objectives:
•To guide the City Council and management policy decisions that have significant
financial impact.
•To set forth operating principles which minimize the cost of government and
financial risk to the City.
•To employ balanced, consistent and fair revenue policies that provide adequate
funding for desired programs.
•To promote sound financial management by providing accurate and timely
information on the City’s financial condition.
•To protect the City’s credit rating and provide for adequate resources to meet the
provision of the City’s debt obligations for all municipal debt.
•To ensure the legal use of financial resources through an effective system of
internal controls.
II. ORGANIZATION
The City provides municipal services for its citizens, including protection of life and
property, public health and welfare, and improved quality of life. The City Council deems
it a high priority to deliver municipal services in the manner consistent for all citizens,
and with maximum efficiency and financial prudence.
The Council, as the legislative and governing body, sets the City’s Financial and Budget
Policy Guidelines, and through its Finance and Budget Committee, monitors and reviews
the City’s overall financial performance.
The City Manager, as the City’s Chief Executive Officer and Chief Budget Officer, is
responsible to the Council for managing City operations and program services, and
preparation of the City’s Annual Budget consistent with established Financial and Budget
Policy Guidelines.
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The Director of Finance and Administrative Services, as the City’s Chief Financial
Officer and Chief Auditing Officer, is responsible to the City Manager for the preparation
of accurate and timely financial and budget reporting. Additional responsibilities include
human resource and information technology administration, general accounting, business
license/tax administration and utility billing operations, grant, federal & state funding
compliance, purchasing administration, as well as policy advice to the City Manager and
Council.
The Department Heads are responsible to the City Manager for department operations,
budget observance, capital project management, and grants administration. Department
Heads monitor related revenue performance and expenditure control with the assistance
of the Finance Department.
The City must prioritize its services and, should revenues become constrained, the
following services are considered priorities in the following general order:
1.Public Life, Health and Safety: Police, fire, emergency medical services; building
inspections; and traffic control; water, sewer, and storm drainage service and
streets infrastructure maintenance.
2.Legal Mandates: Accounting/auditing/financial reporting; land-use planning;
required staff certifications and training.
3.City Facilities and Property: maintenance of parks, buildings, public rights of
way, and City equipment (including information technology equipment);
4.Council and community goals, both annual and long-range, including strategic
plan goals.
III.ACCOUNTING, AUDITING AND FINANCIAL REPORTING
The City will maintain a system of financial monitoring, control and reporting for all
operations and funds 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
activities will conform to the Budgeting, Accounting and Reporting System (BARS) for
Governments as prescribed by the Washington State Auditor. The City maintains its
accounting and budgeting records on a cash basis and adheres to the cash basis BARS
manual.
Capital Assets – As a cash basis entity, the City records and reports only inflows and
outflows of cash. When a capital asset is purchased the entire expenditure is recorded
when the cash is expended and depreciation is not recorded. The City considers capital
assets to be real and intangible assets above $5,000 in value that have an anticipated life
of one year or more. Capital assets are tracked by the Finance Department as a fixed asset
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inventory . Items that are no longer needed or no longer functional will be disposed
according to the City surplus policy (PTMC 3.44.030) and state law.
Capital assets that are purchased with grant funds may be subject to additional
compliance requirements. The department obtaining the grant is responsible for
understanding any compliance requirements related to acquiring, inventorying, tracking
and disposing of assets obtained through these types of funds.
Small and Attractive Assets - The City identifies small and attractive assets as items
with a cost greater than $300 but less than $5,000. These items have a life expectancy of
more than one year AND are not likely to be immediately missed upon disappearance.
These items are generally mobile in nature and may be easily transported from the
workplace. Some exceptions to the $300 minimum include tablets, phones, personal
computers and other lower cost items that have ongoing maintenance or service costs
associated with them. Department Heads are accountable for the security of these items
and are responsible for following the Small and Attractive Assets Policy and Procedures
that have been adopted by Council (Resolution 16-022). The Finance and Administrative
Services Director has oversight responsibility for this policy and the associated inventory
of these items.
Auditing – The Washington State Auditor will perform the City’s financial, federal
single audit and accountability/compliance audits in accordance with state and federal
laws. Results of the audit will be provided to the Council in a timely manner.
Cash Management – The Finance & Administrative Services Director will ensure that
cash management systems are developed to ensure accurate and timely accounting for all
cash and security of all cash assets.
Careful financial control of the City’s daily operations is an important part of the City’s
overall fiscal management practices. Achieving adequate cash management and
investment control requires sound financial planning to ensure that sufficient revenues are
available to meet the current expenditures of any operating period.
The City’s cash management and investment guidelines are as follows:
•The City will maintain a cash management program, which includes internal
control practices for collection of accounts receivable, disbursement of funds, and
prudent investment of its available cash.
•The Finance & Administrative Services Director (Finance Director) serves as the
investment officer of the City of Port Townsend. The Finance Director is
authorized to oversee the investment program and to develop operating
procedures to administer the program. The Finance Director may delegate the
authority to conduct investment transactions and manage the operation of the
investment portfolio to one or more subordinates as outlined in the investment
program operating procedures. All participants in the City’s investment process
shall act responsibly as custodians of the public trust.
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•As permitted by law and City ordinances and to maximize the effective
investment of assets, all funds needed for general obligations may be pooled into
one account for investment purposes. The income derived from this account will
be distributed to the various funds based on their average fund balances on a
periodic basis.
See APPENDIX A for Full Investment Policy.
IV. FUND STRUCUTURE & FUND RESERVE GUIDELINES
The City’s accounting and budgeting systems are organized and operated on a fund basis.
Funds are accounting entities used to record revenues and expenditures. By definition,
balanced funds mean that total revenues equal total expenditures. The budgeted funds are
grouped into categories: General, Special Revenue, Debt Service, Capital Projects,
Enterprise, and Internal Service.
The following provides a brief description of the fund types and reserve guidelines for
each fund. The numbers in parentheses represent the BARS manual fund series
numbering scheme.
GENERAL FUND (010) -- This is the primary operating fund or current expense fund
of the City. To maintain the City’s credit rating and meet seasonal cash flow, the budget
shall provide for an anticipated undesignated fund balance between 8% and 15% of
estimated annual revenues for general government fund types. The fund balance shall be
exclusive of all reserves not anticipated to be readily available for use in emergencies and
contingencies. Should the fund balance fall below 8% of revenues, a plan for expenditure
reductions and/or revenue increases shall be submitted by the City Manager to the
Council. If, at the end of a fiscal year, the fund balance falls below 8%, then the City
shall rebuild the balance within a period not to exceed three fiscal years.
GENERAL FUND COUNCIL RESERVE (Included in the General Fund) – The
annual budget for the General Fund shall provide for a “Council Reserve” equivalent to
approximately 1% of estimated operating revenues in the General Fund (010). Only the
General Fund shall maintain a “Council Reserve.” The Council Reserve is established to
provide for community requests or unanticipated needs deemed necessary by Council.
The Council Reserve shall be suspended during times of significant economic downturn,
especially during years when the General Fund ending fund balance falls below 8%. The
Council Reserve is a budgeted appropriation expected to be specifically allocated at the
Council’s discretion. Unspent council reserves will not carry over to the next fiscal year.
SPECIAL REVENUE FUNDS (101-199) -- These funds account for revenues derived
from special taxes, grants or other restricted sources designed to finance particular
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activities defined when the fund is established or outlined by state law. Apart from any
unrestricted General Fund contributions to a Special Revenue Fund, the unexpended
ending fund balances carry over year to year and should retain enough revenue to cover
operating cash flow and anticipated major project or program obligations of the fund.
Of these funds, the Street, Library, and Community Services funds are of an operations
nature. The Street and Community Services Funds reserve target will be equivalent to 2-
3% of fund expenditures. The Library Fund reserve target is set at 5-8% of Library
property tax revenue.
Other Special Revenue Funds are more cyclical or project related and only need retained
ending fund balances or transfers in to cover anticipated obligations: Drug Enforcement,
Lodging Tax, Fire/EMS, Affordable Housing, and CDBG Grants.
CONTINGENCY (102) – While classified as a Special Revenue Fund, the City’s
Contingency Fund is more of a strategic reserve to meet emergency conditions or to help
maintain essential services during periods of economic downturn. Each fund should
retain enough in its own Ending Fund Balance Reserves to offset minor non-recurring or
unanticipated expenses during the budget year. The City’s Contingency Fund is intended
for major events and should be maintained at no less than 2% of the General Fund annual
estimated operating revenues. If the contingency falls below 2% of estimated operating
revenue, the City will initiate a plan that will restore the balance to the required level over
a three-year period.
DEBT SERVICES FUND (200) – These funds are used to pay general government debt.
The City shall retain or transfer in funds sufficient to cover the annual debt service
obligations, and retain such “coverage” amounts to comply with bond covenants or other
loan restrictions.
CAPITAL PROJECTS FUNDS (300) – These funds are established for the acquisition
or construction of general government (non-utility) capital improvements. Ending Fund
Balance Reserves should be maintained at levels sufficient to cover anticipated annual
expenditures with transfers in from supporting funds (General, REET, etc.) to cover
project needs and to balance the funds.
ENTERPRISE FUNDS (400) – These funds are the proprietary or “business-like” funds
for operations providing services to the general public supported primarily through user’s
fees (Water, Sewer, and Stormwater).
The Ending Fund Balances of the operating funds should be equal to or greater than 60
days of operating expenditures and any additional amounts needed to build towards
future project cash or debt payment needs. To the extent that the reserved Fund Balance
and operating cash flow are not adequate to fund needed utility system improvements or
maintain 60 days of operating expenditures, additional rate increases or surcharges may
be adopted by Council.
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Included as Enterprise Funds are the Utility Debt Service Reserve Funds, Utility Capital
Project Funds, Olympic Water Gravity System (Transmission Line) Fund, the System
Development Fund, and Golf Course Fund; however these funds are not required to
maintain 60 days of operating expenditures due to the nature of the funds.
Revenue bonds may be issued by the Enterprise Funds. Investors may require additional
lending requirements or covenants (such as a pledge of future revenue streams from the
fund). The ending fund balance of the Enterprise Funds should include a reserve to cover
any additional covenant requirements.
INTERNAL SERVICE FUNDS (500) – These funds are also internal “business-like”
funds for operations providing services to other City departments (funds) on a direct cost-
reimbursement basis (e.g. Equipment Rental including Information Technology services
and equipment, Public Works Administration and internal Engineering Services). The
purpose of a reserve in an internal service fund is to ensure that the fund is able to
continue to provide the service without interruption. Fund balances should break even
after set aside of funds for future capital equipment replacements.
FIDUCIARY FUNDS (600) – These funds account for assets held by the City as a
trustee or as an agent on behalf of others. Ending Fund Balances and any transfers in
should be maintained consistent with fund restrictions.
ENDING FUND BALANCE, RESERVES, CONTINGENCY SUMMARY
The following is a summary of the reserves guidelines. Guidelines will be reviewed
annually as a part of the Budget process:
•General Fund ........................................... 8-15% of operating revenue
•Library ..................................................... 5-8% of property tax
•Street ........................................................ 2-3% of expenditures
•Community Services ............................... 2-3% of expenditures
•Other Special Revenue Funds ................. Sufficient to meet obligations
•Contingency ............................................. No less than 2% of estimated operating
revenue
•Debt Service ............................................ Sufficient to meet obligations
•General and Enterprise Capital Funds Sufficient to meet obligations
•Enterprise Operating Funds ..................... 60 days of operating expenditures
•Internal Service ........................................ Sufficient to meet obligations
•Fiduciary Funds ....................................... Sufficient to meet obligations
The undesignated General Fund Balance (the balance not tied to a known project) will be
maintained at a level that provides the City with sufficient working capital and a
comfortable margin of safety to address emergencies and unexpected declines in revenue
without borrowing. The City should not use the undesignated General Fund Balance to
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finance recurring operating expenditures. Annual General Fund revenues should be equal
to or greater than annual regular operating expenditures.
Reserves above the target can be used for new expenditures, with emphasis placed on one
time uses that achieve future operating cost reductions.
General Fund revenues will be used for general government, street and community
service programs only. General Fund revenue for other purposes will require approval by
the City Council.
General Fund revenues will not be used to subsidize utility or enterprise operations,
which will be self-supporting through user rates.
V. REVENUE POLICIES
General Revenue Policies - The City will strive to maintain a diversified and stable
revenue system to shelter the government from short-term fluctuations in any one
revenue source and ensure its ability to provide ongoing service. The revenue portfolio
will strive to draw resources from the community that is perceived as fair and equitable.
Restricted revenue shall only be used for the purposes legally permissible and in a
fiscally responsible manner. Programs and services funded by restricted revenue will be
clearly designated as such.
Non-recurring and excess yield on volatile revenues (sometimes considered “one-time”
revenues) should support one-time expenditures. Examples of acceptable uses of non-
recurring and excess yield on volatile revenue include paying down debt, building up
reserve balances, special projects and capital equipment.
County, state or federal funding will be used to finance only those capital improvements
that are consistent with the capital improvement plan and local government priorities, and
whose operation and maintenance costs have been included in operating budget forecasts.
Enterprise Fund Revenue Policies – Enterprise operating funds will be operated in a
manner that generates sufficient revenues to maintain a minimum ending fund balance
that is not less than 60 days of operating expenditures.
Utilities will be self-supporting through user rates and charges.
Utility user charges for each of the City utilities will be based on cost of service (i.e., set
to full support the total direct, indirect, and capital costs) and established so that the
operating revenues of each utility are at least equal to its operating expenditures and
annual debt service obligations. The user rates of a utility shall be designated so that a
portion covers replacement of the utility’s facilities.
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The Utility will conduct a study of its user rates no less than every 5 years to ensure rates
are adequate to fund operations and meet future needs.
Fund balances may be used to temporarily offset rate increases, after sufficient funds
have been accumulated for identified capital improvement needs or alternative funding
for projects has been secured.
Fees and Charges (Non-Utility) – All fees for licenses, permit, fines, and other
miscellaneous charges shall be set to recover the City’s expense in providing the
attendant service. Average cost or actual cost methodology may be used. These fees will
be reviewed periodically and will be incorporated into the budget process for possible
action by Council.
Fees and charges for services will generally be set to recover the actual cost of service
delivery. Fees that are set lower than the cost of service delivery will be reviewed at
least every other year to determine if those fees are still appropriate based on City
finances and the community needs.
Where direct beneficiaries of a city program or services can be identified, fees will be
established to recover the costs of that program or service. Fees will also be set in a
manner that protects tax payers from subsidizing special service users. A fee shall be
charged for any service that benefits limited interests within the community, except for
human needs type services to persons with limited ability to pay.
Rental fees will be established to recover full cost of use of the property or facility. Fees
related to the rental of City properties may be waived only through approval of the City
Manager. The waiver of fees will only be provided if the purpose of the rental or its
associated event will benefit the community at large.
Some services provide greater benefit to the community. When a greater community
benefit is identified, the Council may choose to subsidize, either whole or in part, such
services.
Park and Pool Fees – The Pool division will strive to recover 50% of Pool direct costs
by generating revenues through special programs, fees, charges, donations and/or
designated use of City-operated facilities.
Through a volunteer recruitment program, the Parks will seek to minimize the subsidy
required for partial and minimum fee support programs.
Solicitation of funds through donations, fund raising events, non-traditional sources, and
various other modes will be encouraged by the City through its park and pool user
groups. Funds collected for any special purpose shall be earmarked for that purpose.
VI.OVERHEAD COST RECOVERY (COST ALLOCATION)
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As provided in the Washington State Auditor’s Office guidelines, “Cost allocation is a
method to determine and assign the cost of central services to the internal-government
users of those services. Cost allocation thereby enables local governments to more
accurately account for the complete cost of the services it provides to the public—and to
better assess the fees it should charge them.” Included in cost allocation are direct costs
(not otherwise charged to budget units) and indirect costs. Direct Costs are those costs
that can be specifically identified with a particular service or unit if not already charged
directly (e.g. facilities, janitorial, etc.) Indirect Costs are costs incurred for common or
joint purposes, benefiting more than one unit, not readily assignable to a specific unit
(e.g. legal, human resources, administration, clerk, etc.).
The term “allocation” implies that there is no overly precise method available for direct
charging a cost to a unit, so the City is using the most appropriate method available for
doing so. However, a cost allocation plan should be designed and used to provide a
reasonable, consistent and equitable means to allocate costs. Inequitable charges result in
questionable charges to grant, utilities and restricted funds. For grant purposes, costs that
benefit the public at large cannot be included and should follow the OMB A-87 and/or
2CFR Part 200 guidelines.
The Council adopted a Cost Allocation Plan in Resolution 14-035 on June 25, 2014. In
addition to using the overhead cost recovery model to assess the appropriate amount of
overhead to utilize for establishing user fees, the model will be used to apply charges to
Departments/Funds for City-wide overhead indirect cost recovery where allowed
(Council, City Manager, City Clerk, City Attorney and Finance).
The Council may authorize waiver of the overhead cost-recovery in all or part if Council
determines doing so will provide a general benefit to the citizens, taxpayers or utility rate
payer. If a portion of the overhead cost-recovery is waived, the General Fund must absorb
these costs; waived costs may not be absorbed by or reallocated to a Special Revenue or
Enterprise Fund.
VII.GENERAL BUDGET POLICIES
Annual Budget – The City’s annual budget will be developed in accordance with the
policies and priorities set forth in the comprehensive plan, the City Council’s strategic
plan, City Council goals and priorities, the needs of the community, and federal and state
laws.
In general, budgeted operating revenues must meet or exceed budgeted operating
appropriations each year. Current year operating expenses, maintenance costs and direct
and indirect costs of services provided will be covered by current year operating
revenues. One-time expenditures may be appropriated if one-time revenues or excess
fund balance (in excess of reserve requirements) are available.
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The City budget appropriations are adopted at the fund level. Department heads are
responsible for preparing a budget that reflects realistic expense projections and that
adhere to guidelines within this policy document.
Expense (Appropriation) Policies – Operating expenditures will be proposed at a level
that will be supported by ongoing annual operating revenues. The city will strive to a
level of expenditures sufficient to ensure the ongoing health, safety and welfare of the
community.
Staffing Budget – Salary and benefit costs are the City’s most significant operating
expense. The City will strive to provide a total compensation package that is comparable
to other cities and similar type positions within the same labor market or other cities of a
similar size with comparable type and quality services in order to recruit and retain high
quality staff.
The City Manager’s proposed budget will identify staffing levels and provide
justification for any increases or decreases in overall City staffing.
Union Contract negotiations may impact budget expenditures annually. However, if a
collective bargaining agreement is, or will be, under negotiation, a specific amount will
not be included in the budget from potential wage adjustments resulting from the
negotiation, other than a base COLA adjustment. This is to protect the City from any
claims of not “bargaining in good faith”. Funding for unknown contract terms must be
considered in balancing ongoing revenues with ongoing expenses.
Equipment Replacement & Maintenance - Equipment replacement and maintenance
projections will be updated according to the Fleet Equipment Rental and Replacement
Fund and Fleet Operations and Maintenance Fund Policies (EXHIBIT A) and the
Information Technology(I.T.) Equipment Rental and Replacement Fund and I.T.
Operations and Maintenance Fund Policy (EXHIBIT B).
In general, The Fleet Equipment Rental and Replacement Committee is responsible for
planning, directing, managing, coordinating and supervising programs for the acquisition,
assignment, maintenance and repair, rental, replacement of the City Fleet. This
committee will meet at least annually to recommend fleet purchases for the upcoming
budget year. Fleet replacement rates (if applicable to Funds) will be evaluated at least
once per year and recommended to council for appropriation in the annual budget.
Fleet maintenance rates will be adjusted to recover 100% of the actual direct and indirect
costs. Fleet maintenance rates will be reviewed mid-year. Current year rates, if
necessary, will be adjusted through an adopted supplemental budget request, and rates for
the upcoming budget year will be established and adopted by City Council with the
annual budget appropriations.
In general, the Technology Services Department, in collaboration with the Finance
Department, will be responsible for planning, directing, managing, coordinating and
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supervising programs for acquisition, assignment, maintenance and repair, rental,
replacement and disposal of the City’s I.T. equipment. I.T. replacement rates will be
evaluated at least once per year and recommended to council for appropriation in the
annual budget.
I.T. maintenance rates will be adjusted to recover 100% of the actual direct and indirect
costs. I.T. maintenance rates will be reviewed mid-year. Current year rates will be
adjusted through an adopted supplemental budget request, if necessary, and rates for the
upcoming budget year will be established and adopted by City Council with the annual
budget appropriations.
Training and Travel – City employees or others on official City business or training
may be required to travel outside the City to conduct their business or training for the
City. City employees and officials will be reimbursed for reasonable and customary
expenses incurred in the conduct of their business for the City, including food, lodging
and travel expenses while away, excluding any expenses for personal entertainment or
alcoholic beverages, as provided in the City’s Personnel Policies Manual for business or
training travel. Such training or travel shall be as provided either specifically or generally
in the annual budget.
Training is an investment in maintaining the certifications and skills of the City’s
employees. At least 1% of the department’s budgeted salary expense will be allocated for
certifications and skills training. The City will also include a targeted amount of 1% of
City-wide salaries for organizational development and process improvement.
Investments that Forestall Adding Permanent Staff - Since personnel-related
expenditures represent the largest portion of the City’s budget, funding of technology or
process improvements that increase efficiency and effectiveness of the delivery of City
services should receive priority funding.
Budget Monitoring-
The Finance & Administrative Services Director will maintain a system for monitoring
the City's budget performance. This system will provide timely information to
Department Heads and the City Manager to ensure accuracy of financial data and
compliance with budget appropriations. The Council will receive (at a minimum)
quarterly reports regarding fund level revenues and expenditure performance compared to
budget.
Significant financial issues that need to be addressed between regular monitoring reports
will be provided to Council as warranted.
The Finance & Administrative Services Director will monitor unanticipated needs or
emergency expenditures and prepare budget amendments in compliance with State Law.
Department Heads will be responsible for maintaining budgetary discipline and analyzing
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all over and under spending. Explanations for variances in spending to authorized
appropriations willbe provided by the Department Director to the Finance and
Administrative Services Director in a timely manner.
VIII. FINANCIAL PLANNING POLICIES
FINANCIAL FORECAST – The City will develop a 5-year Financial Plan and Forecast
Model based on these financial policy guidelines and a best estimate of likely revenues
and expenditures. The model will be used to test the policies against likely surrounding
economic conditions. The model will be used for long-range financial planning and is not
a replacement for budgeting.
The City’s financial planning will include the current year budget plus five additional
years of projected data. The City may elect to extend its planning horizon further if
conditions warrant.
The long range financial plan operating revenues and expenses will include data for the
General Fund, Contingency Fund, Library Fund and Community Services Fund. In
addition to ongoing revenues and expenses, this forecast will utilize assumptions that
forecast general obligation debt and general fund contributions to capital projects.
The long range financial plan should present trends and projections in key financial
indicators, such as:
•Revenues and expenses per capita including nominal and inflation adjusted data.
•Staffing levels per 1,000 population: total and by major department.
•Projected annual growth rates of revenues and expenses including personnel
costs.
The long range financial plan may include comparisons to other cities and benchmarks,
recognizing that the data for comparable cities may reflect differences in service deliver y,
financial structure and financial policies. Comparative information may include:
•Comparative revenues and expenses by major type to include:
o Total revenues and expenses per capita.
o Taxes per capita by tax source.
IX.ENTERPRISE FUNDS
The Water, Sewer and Stormwater utilities will be managed as self-supporting business
enterprises. Each utility will be managed in a professional manner in accordance with
applicable laws and standards. The long-range financial plan model for each utility will
analyze rate revenues, rate structure, operating costs, replacement capital costs, debt
service and other utility considerations (special rate programs, paybacks, etc.). The City
may utilize specialized rate consultants to evaluate the rate and cost structure of the
utilities.
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X.CAPITAL INVESTMENT PROGRAM PLAN POLICIES
General Policy Considerations - The major resources for funding capital improvement
and capital maintenance programs are revenues, grants and debt. Financing planned
capital replacement costs are an ongoing challenge. Preparing for the challenges of
infrastructure replacement or enhancements demands a long-term view of replacement
needs. In order to plan for these needs the City will develop a six-year Capital
Improvement Plan (CIP) for adoption by Council as required by the Washington’s
Growth Management Act. The CIP will be consistent with the Capital Facilities Element
of the City’s Comprehensive Plan. A capital project over $15,000 with a minimum of a
five-year anticipated life will be included in the CIP.
The city should weigh the full lifecycle costs of proposed projects in relation to funding
sources and strategic plans and determine the availability of funding sources. If debt
financing is needed, the cost of the debt should be analyzed against the city’s debt
capacity and debt management policies before being incorporated in the CIP.
The CIP should include the following:
Project description
Identify anticipated funding sources
Outline the project’s proposed timing and scope
XI. DEBT MANAGEMENT POLICY
Statement of Purpose – The debt financing policy statement sets forth comprehensive
guidelines for the financing of capital expenditures. It is the objective of the policy that
(1) the City obtain financing only when necessary, (2) the process for identifying the
timing and amount debt or other financing be as efficient as possible, (3) the most
favorable interest rate and other related costs be obtained, and (4) when appropriate,
future financial flexibility be maintained.
The Finance and Administrative Services Director is charged with carrying out the policy
and developing recommendations for financing.
Long Term Debt - The City will manage its long-term debt in a manner designed to
utilize its credit to optimize City services while balancing overall debt levels and annual
debt service obligations. Long-term debt includes Bonds, Federal or State loans (e.g.
Public Works Trust Fund, Federal Housing Administration, State Revolving Fund), or
private placement financing. The City shall only use long-term debt for capital projects
that cannot be financed out of current revenues. Annual debt payments should not exceed
15% of the total of annual General Government operating revenues plus budgeted
transfers from capital funding sources. General Government Funds include the General
Fund, Contingency Fund and Special Revenue Funds.
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Debt financing will generally be limited to capital improvement projects identified in the
capital improvement planning process and only under the following circumstances:
•When the project’s useful life will exceed the term of the financing;
•When project revenue or specific resources as identified will be sufficient to
service the debt;
•
• ;
•When projects cannot be cash funded.
Debt financing will not be considered appropriate for:
•Current or ongoing operating and maintenance expenses (except for issuing short-
term instruments such as revenue anticipation notes or tax anticipation notes); and
any recurring purpose (except as indicated above).
The City’s Limited (non-voted) General Obligation (LTGO) Debt Capacity per State Law
is 1.5% of total assessed value. The City should seek to retain 5-10% of its LTGO Debt
Capacity for unforeseeable emergencies.
Short Term Debt – Short-term debt is used to cover the gap in long-term financing or to
finance short lived assets. Short-term debt financing instruments may be considered if
the transaction costs plus interest of the short-term debt are less than the cost of internal
financing and / or if it is more practical to use than committing available operating and
working capital cash. Before issuing short-term debt, there should be a reasonable
certainty that a known revenue source will be received to repay the debt, unless there is a
clear financial emergency.
Options for Interim or “Bridge” financing may include:
•Bond Anticipation Notes (BANS)
•Tax Anticipation Notes (TANS)
•Lines of Credit with major financial institutions
•Interfund Loans
Bond Anticipation Notes (BANS) are used when capital projects begin before long-term
bond proceeds have been received. Tax / Revenue Anticipation Notes (TRANS) are
used to cover operating expenditures when tax revenues are received in large lump sums
later in the year (Example: Property Taxes).
Tax anticipation debt will be retired annually, and bond anticipation notes should be
retired within twelve (12) months of the completion of the project or prior to maturity.
Short-term debt outstanding at the end of the year will not exceed 5% of net operating
revenue (including tax anticipation notes but excluding bond anticipation notes.)
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Transfers – General Fund transfers to other funds are intended as payments for the
support of specific programs or services. Amounts not needed to support such specific
program or service expenses will remain in the General Fund’s fund balance. Operating
transfers result in a change in fund equity. For example, the General Fund may make
transfers to the Debt Fund to fund annual debt service payments or to the Community
Services Fund to support parks or service programs.
Interfund loans are temporary in nature. The requirements for interfund loans are as
follows:
•The Council must approve all interfund loans by resolution. The resolution will
include a planned schedule of repayment of the loan principal as well as setting a
reasonable rate of interest to be paid to the lending fund.
•The borrowing fund must reasonably be able to anticipate sufficient revenue to
repay the principal and interest payments as required by the authorizing
resolution.
•The rate of interest should not be lower than the “opportunity cost” if the funds
were otherwise invested, such as the LGIP (Local Government Investment Pool)
rate or a bank CD rate for a similar term; not higher than the external rate
available to the municipality.
•Interest is not required in the following circumstances:
o If the borrowing fund has no independent source of revenue other than the
lending fund;
o The lending fund is the General Fund, which, being unrestricted, can
provide interest free loans to other funds.
•The term of the interfund loan will not exceed three years. Any interfund loans
that are not repaid within three years will be scrutinized for a “permanent
diversion” of moneys. (Note: These restrictions and limitations do not apply to
those funds which are legally permitted to support one another through
appropriations, transfers, advances, etc.)
For short-term cash deficits in non-General Fund operating funds during the course of the
year, City interfund loans are preferable to outside short-term or private sector lines of
credit.
XII.PURCHASING POLICY
Purchases of goods, services and capital items will be made consistent with the annual
budget appropriations, state and federal law, the City’s Purchasing Ordinance and
Purchasing Policy and Procedure Manual (EXHIBIT C), and the Washington State
Auditor’s requirements. The City’s Purchasing Ordinance will outline the City Manager’s
spending and contracting authority. Any purchases or contracts above those authority
limits must be authorized in advance by City Council (some exceptions for public
emergencies will apply). The City Manager may delegate spending authority (within
his/her limits) to Department Heads to facilitate operating efficiency.
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In General, the City Manager and Department Heads will purchase goods and services at
a reasonable cost, using an open, fairly documented and competitive process whenever
reasonable and possible. Actions of city employees, when purchasing supplies and
services, should be fair and impartial and not be used for personal gain or benefit.
Employees may not willfully circumvent purchasing and procurement policies and
procedures to enter into contracts, or purchase goods and services except as allowed by
state statutes.
The Finance & Administrative Services Director is charged with developing
administrative/operating procedures to implement sound purchasing policies. These
procedures will be based on guidelines provided in State Law and by the State Auditor’s
Office. All purchases made by the City will ultimately be approved by the Council
through the voucher approval process.
XIII.GRANTS MANAGEMENT POLICY
Leveraging City and community resource with external financial assistance can enhance
the quality and level of public services, facilities and infrastructure. City Policy is to seek
and accept grants and other financial assistance consistent with the City’s strategic plan.
External assistance also carries with it the goals and restrictions of the grantor. Grant
relationships are partnerships where the goals of both the City and grantor must be in
alignment. The benefits, costs and long-term implications of the partnership must be
considered prior to formal application. The City’s Grants Management Policy involves
the following steps:
Search – City department staff and officials are encouraged to actively search out and
identify potential grants which may further the City’s vision and goals, within the City’s
financial limitations.
Pre-Application – Department Directors and staff shall pursue grants within their
purchasing authority identified in City Purchasing Policies. The City Manager shall be
advised of all grant considerations over a $10,000 total.
Formal Application – Formal applications directly by the City, or indirectly by other
agencies involving the City, must fall within Departmental Purchasing levels.
All grants will seek reimbursement of direct cost departmental and City wide indirect or
administrative costs to the maximum extent allowable by the grantor.
Grants by other agencies involving the City or by the City involving other grantees must
have City Manager, or Council approval beyond the $60,000 Purchasing levels.
Award and Contract – Upon formal Notice of Grant Award (NOGA) or informal
notification, a written contract must be approved prior to any City commitment, formal or
otherwise. All grant contracts must be within the City’s Purchasing levels. Any needed
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budget amendments for grant match not otherwise within general budget authority shall
be adopted prior to formal grant acceptance and contract signing.
Accounting and Reporting – City departments shall coordinate with Finance to assure
that grants comply with Federal, State and local requirements for timely reimbursements,
monitoring of vendors and sub recipients, as well as City Purchasing Policies. Any
notification of audit of grant programs or funds should be sent to the Director of Finance
and Administrative Services even if the audit is coordinated in another department.
Close Out – Multi-year grants shall have periodic accounting reviews not less than at the
close of each fiscal year. Upon conclusion of each grant, the Department grant manager
shall prepare a grant close-out report in coordination with the City’s Finance Department.
A complete grants management file record shall be maintained per City policy, either in
the Department, Finance or Clerk’s Office.
The City Council Adopted Federal Awards Standards, Procurement Policy and Code of
Conduct Policy for all Federal Loans and Grants on July 10, 2017. Standards for federal
awards are detailed in APPENDIX B.
APPENDIX A: INVESTMENT POLICY –
To the extent possible, funds not needed for operations should be invested in approved
investment vehicles. Investments shall be made with judgment and care, under
circumstances then prevailing, that persons of prudence, discretion and intelligence 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.
The standard of prudence to be used by investments officials shall be the prudent person
standard and shall be applied in the context of managing the overall portfolio.
Investment officers acting in accordance with written procedures and the investments
policy and exercising due diligence shall be relieved of personal responsibility for an
individual’s security’s credit risk of market price changes, provided deviations from
expectations are reported in a timely fashion and appropriate action is taken to control
adverse developments.
The City will strive to maximize the return on its investments, with the primary objective
of preserving capital and prudent investment practices, including diversification.
Investments will be made in accordance with the following objectives:
1) Legality: Funds of the City will be invested in accordance with the Revised Code of
Washington (RCW), the BARS manual, these policies and any applicable administrative
procedures.
2) Safety: Investments of the City will be undertaken in a manner that seeks to ensure the
preservation of capital in the overall portfolio. To attain this objective, diversification is
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required in order that potential losses on individual securities do no exceed the income
generated by other investments.
3) Liquidity: The City’s investments will remain sufficiently liquid to enable the city to
meet all operating requirements that might be reasonably anticipated.
4) Yield: The City’s investments will 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 cash flow characteristics.
The Finance & Administrative Services Director will approve financial institutions to be
eligible to conduct investment business with the City, in accordance with Washington
State Law.
The Finance & Administrative Services Director will periodically furnish the City
Manager and Council with a report that shall include the amount of interest earned to
date. At least annually, a report summarizing investment activity and rate of return will
be provided.
APPENDIX B- CITY OF PORT TOWNSEND FEDERAL AWARDS
STANDARDS, PROCUREMENT POLICY & CODE OF CONDUCT
CITY OF PORT TOWNSEND FEDERAL AWARD STANDARDS:
PURPOSE
Establish and maintain internal controls that provide reasonable assurance that Federal
awards are being managed in compliance with all federal regulations and with the terms
and conditions of the award. The City of Port Townsend will follow the Uniform
Guidance, the Local Agency Guidelines (LAG) distributed by The Washington State
Department of Transportation (WSDOT), and the City of Port Townsend’s
Comprehensive Financial Management Policy Guidelines.
INTERNAL CONTROLS
The City of Port Townsend will maintain effective internal control over the Federal
award providing reasonable assurance that the City of Port Townsend is managing
the Federal award in compliance with Federal statutes, regulations, and the terms
and conditions of the Federal award.
•Take prompt action when instances of noncompliance are identified
including noncompliance identified in audit findings.
•Take reasonable measures to safeguard protected personally identifiable
information and other information the Federal awarding agency or pass-
through entity designates as sensitive.
ADVANCE PAYMENTS AND REIMBURSEMENTS
Payment methods must minimize the time elapsing between the transfer of funds from
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the United States Treasury or the pass-through entity and the disbursement by the City
of Port Townsend whether the payment is made by electronic funds transfer, or
issuance or redemption of checks, warrants, or payment by other means.
•Advanced payments must be limited to the minimum amounts needed and be
timed to be in accordance with the actual, immediate cash requirements of the
City of Port Townsend to carry out the purpose of the approved program or
project. Any advanced payments must be consolidated to cover anticipated
cash needs.
•The City of Port Townsend shall minimize the time elapsed between receipt of
federal aid funds and subsequent payment of incurred costs.
ALLOWABLE COSTS
Federal awards will meet the following general criteria to be allowable except where
otherwise authorized by statute:
•Be necessary and reasonable for the performance of the Federal award;
•Conform to any limitations or exclusions set forth in these principles or in
the Federal award as to types or amount of cost items;
•Be consistent with policies and procedures that apply uniformly to both
Federally- financed and other activities of the City of Port Townsend;
•Be accorded consistent treatment;
•Not be included as cost or used to meet cost sharing or matching
requirements of any other Federally-financed program in either the current
or a prior period;
•Be adequately documented.
PROCUREMENT
When procuring property and services under a Federal award, the City of Port
Townsend will follow 2 CFR §200.318 General procurement standards through
§200.326 Contract provisions or City of Port Townsend purchasing procedures
whichever is more restrictive. The following table outlines procurement requirements
when using Federal funds.
Procurement
Method
Goods Services
Micro-Purchase - No
required quotes. However,
must consider price as
reasonable, and, to the
extent practical, distribute
equitably among
suppliers.
$5,000 or less
Must use more
restrictive City
threshold instead of
$10,000 federal
threshold
$5,000 or less
Must use more
restrictive City threshold
instead of $10,000
federal threshold
Small Purchase
Procedures
$5,000 - $40,000
(Single trade); $3,000 -
$5,000 - $40,000 (Single
trade); $5,000 - $65,000
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(Informal) - Obtain/
document quotes
from a reasonable number
of qualified sources (at
least three).
$65,000 (Multi trade);
$5,000 - $50,000
(Non-Public Works
projects)
Must use more
restrictive City
threshold instead of
$250,000 Federal
threshold
(Multi trade); $5,000 -
$50,000 (Non- Public
Works projects)
Must use more
restrictive City threshold
instead of $250,000
Federal threshold
Sealed Bids / Competitive
Bids (Formal)
$40,000 or more (Single
trade); $65,000 or more
(Multi trade); $50,000
or more (Non-Public
Works Projects)
Must use more
restrictive City
threshold instead of
$250,000 Federal
threshold
$40,000 or more (Single
trade); $65,000 or more
(Multi trade); $50,000 or
more (Non-Public
Works Projects)
Must use more
restrictive City
threshold instead of
$250,000 Federal
threshold
Competitive proposals Used when conditions are not appropriate for the use
of sealed bids.
•Must publicize request for proposals
soliciting from an adequate number of
qualified sources
•Maintain written method for conducting
technical evaluations
•Contract must be awarded to the responsive
and responsible firm
whose proposal is most advantageous to the
program
Non-competitive proposals Appropriate only when:
•Available only from a single source; or
•Public emergency; and
•Expressly authorized by awarding or pass-
through agency in response to written request
from the City of Port Townsend; or
•After soliciting a number of sources, competition
is deemed inadequate.
Contracts for more than the simplified acquisition threshold currently set at $250,000
must address administrative, contractual, or legal remedies in instances where
contractors violate or breach contract terms, and provide for such sanctions and
penalties as appropriate.
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Contracts and sub-grants of amounts in excess of $250,000 require that the City of Port
Townsend will comply with all applicable standards, orders or regulations issued
pursuant to the Clean Air Act and the Federal Water Pollution Control Act.
The City of Port Townsend will monitor procurements to avoid duplicative purchases,
and exhaust all mandated sources before soliciting new sources. The City wil l also
continue to enter into inter-entity agreements to realize cost savings for shared goods
and services when possible.
The City will verify and document that vendors are not suspended or debarred from
doing business with the Federal government.
SINGLE AUDIT ACT
The City of Port Townsend, as a recipient of Federal funds, shall adhere to the Federal
regulations outlined in 2 CFR §200.501 as well as all applicable Federal and State
statutes and regulations.
CLOSURE
A project agreement end date will be established in accordance with 2 CFR §200.309. Any
costs incurred after the project agreement end date are not eligible for Federal
reimbursement.
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CITY OF PORT TOWNSEND CODE OF CONDUCT:
PURPOSE
The purpose of the Code of Conduct is to ensure the efficient, fair and professional
administration of federal grant funds in compliance with 2 CFR §200.112, 2 CFR
§200.318 and other applicable federal and state standards, regulations, and laws.
APPLICATION
This Code of Conduct applies to all elected officials, employees or agents of the City
of Port Townsend engaged in the award or administration of contracts supported by
federal grant funds.
REQUIREMENTS
No elected official, employee or agent of the City of Port Townsend shall participate in
the selection, award or administration of a contract supported by federal grant funds if
a conflict of interest, real or apparent, would be involved. Such a conflict would arise
when any of the following has a financial or other interest in the firm selected for
award:
•The City employee, elected official, or agent; or
•Any member of their immediate family; or
•Their partner; or
•An organization which employs, or is about to employ any of the above.
The City of Port Townsend's elected officials, employees or agents shall neither
solicit nor accept gratuities, favors, or anything of monetary value from contractors,
potential contractors or subcontractors.
REMEDIES
To the extent permitted by federal, state or local laws or regulations, violation of these
standards may cause penalties, sanctions or other disciplinary actions (up to and
including employment or contract termination) to be taken against the City of Port
Townsend's elected officials, employees or agents, or the contractors, potential
contractors, subcontractors or their agents. Any potential conflict of interest will be
disclosed in writing to the Federal awarding agency or pass-through entity in
accordance with applicable Federal awarding agency policy.
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EXHIBIT A
Fleet Equipment Rental & Replacement Fund and
Fleet Operations & Maintenance Fund
Policy
November 2018
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Page 2 of 8
I. Table of Contents
II. Overview ............................................................................................................................................... 3
A. Purpose: ............................................................................................................................................ 3
B. General Policy: .................................................................................................................................. 3
C. Funds Purpose: .................................................................................................................................. 3
D. Services: ............................................................................................................................................ 3
III. Replacement Reserve Management ................................................................................................. 4
A. Donation of Equipment to FERRF: .................................................................................................... 4
B. Replacement Reserves for FERRF Owned Equipment: ..................................................................... 4
C. Prohibited uses of Reserves: ............................................................................................................. 4
D. Purpose and Uses of Reserves: ......................................................................................................... 4
IV. Replacement Rules............................................................................................................................ 5
A. FERRF Owned Assets: ........................................................................................................................ 5
B. Useful Life: ........................................................................................................................................ 5
C. Acquisition and Disposal of Assets: ................................................................................................... 5
V. Operations & Maintenance................................................................................................................... 6
A. Maintenance Rates: .......................................................................................................................... 6
B. Maintenance and Services: ............................................................................................................... 6
VI. Appendix ........................................................................................................................................... 6
A. Acronyms: ......................................................................................................................................... 6
1. ERRC - Equipment Rental & Replacement Committee ................................................................. 6
2. FERRF – Fleet Equipment Rental & Replacement Fund ................................................................ 6
3. FOMF - Fleet Operations & Maintenance Fund ............................................................................ 6
B. Roles and Responsibilities: ................................................................................................................ 6
1. Operating Departments ................................................................................................................ 6
2. Public Works Department: Fleet Services ..................................................................................... 7
3. Public Works Department: ERRC .................................................................................................. 7
4. Finance Department ..................................................................................................................... 7
5. Leadership Team ........................................................................................................................... 8
6. City Council ................................................................................................................................... 8
C. Chronology of Significant Events: ..................................................................................................... 8
D. Common Audit Issues shared by the State Auditor’s Office: ............................................................ 8
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Page 3 of 8
II. Overview
A. Purpose:
The purpose of this document is to establish and specify the City of Port Townsend’s (City) policy
governing asset and fund management, including rental, replacement, and maintenance
services for motorized vehicles and wheeled equipment (Fleet) (See separate policy for I.T.
Equipment Rental & Replacement and I.T. Operations & Maintenance).
B. General Policy:
1. It is the policy of the City to provide for centralized management of its Fleet. Management
activities include fund management and asset purchase, rental, maintenance and repair,
replacement and disposal.
2. The City Manager has delegated responsibility for implementing the provisions of this policy
to the Public Works Department. The Public Works Department in collaboration with the
Finance Department shall be responsible for ensuring uniform application and
interpretation of the policy. Proposed exceptions to the policy will be considered for
maximum benefit of the City.
3. The Public Works Department shall be responsible for planning, directing, managing,
coordinating and supervising programs for the acquisition, assignment, maintenance and
repair, rental, replacement and disposal of the City Fleet. To provide for administrative ease
and operational flexibility this responsibility is further delegated to the Equipment Rental &
Replacement Committee (ERRC), which consists of the Public Works Director, Public Works
Operations Manager, a representative of the Finance Department, and up to two at-large
city employee members.
C. Funds Purpose:
The purpose of the Fleet Equipment Rental & Replacement Funds (FERRF) and the Fleet
Operations & Maintenance Fund (FOMF) is to manage replacement and maintenance funds to
ensure sufficient monies are available when needed. This allows the City to focus on using
maintenance and efficiency indicators when making asset equipment replacement decisions.
Additionally, FERRF is designed to rent FERRF owned equipment to other funds.
D. Services:
The FERRF and FOMF are designated as an Internal Service Fund with three major functions. The
Replacement function supports the process to provide for replacement of assets. The
Administration function supports asset and operations management. The operations function
supports maintenance, fuel, motor pool, and intergovernmental activities.
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III. Replacement Reserve Management
A. Donation of Equipment to FERRF:
Departments that participate in replacement will donate all eligible assets to its own FERRF,
where they will be considered FERRF owned Assets.
B. Replacement Reserves for FERRF Owned Equipment:
During the budget process, the ERRC will establish reserves for the replacement of assets.
1. Replacement charges are generally calculated based on each individual asset’s original cost,
its useful life, salvage value, the regional inflationary rate, and the anticipated replacement
value. Replacement rates are sometimes adjusted for special purposes. All charges will be
accumulated in the FERRF. A calculation model, such as the Excel model provided by FCS
Group, shall be used to track each individual asset and determine the appropriate
replacement charge.
2. Capital additions made to increase the asset’s useful life will be added to the total cost of
the asset, and the replacement calculation will be recomputed over the new useful life of
the asset.
3. Replacement rates may be adjusted when the useful life of an asset is changed, or the cost
of the replacement asset is significantly higher or lower than the norm.
4. Assets acquired for service by means other than purchase (e.g. lease) will have a
replacement rate established like a purchased asset and will require Finance approval for
replacement at the time of acquisition.
C. Prohibited uses of Reserves:
1. FERRF replacement reserves will not be used to fund construction projects, purchase non-
capital equipment (unless part of a system), or purchase capital items that are not
authorized to have a replacement schedule.
2. FERRF replacement reserves will not be permanently transferred to other funds unless
directed by Council.
D. Purpose and Uses of Reserves:
The FERRF is designed to ensure replacement of an asset with a “like” item. The FERRF exists to
accumulate monies based on the replacement cost of an asset.
1. True-up Process: During the semi-annual review process the annual reserve need will be re-
evaluated, compared with the actual annual reserve contributions, and any excess/deficit
will be refunded to or contributed by the appropriate fund as required. If the new estimate
is within 5% (+/-) of the actual annual reserve contribution, then no action is required.
2. Like-for-Like Baseline: When computing funds available for replacement, the ERRC
determines the estimate by comparing the equipment being replaced to an identical piece
of equipment in today’s marketplace.
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3. Equipment Improvements: If there are changes in equipment technology that either make
the old asset obsolete, antiquated or not match generally accepted industry trends, this will
be considered a like-for-like replacement.
4. Upgrades: New equipment technology that is not an Equipment Improvement will be
considered an upgrade. Upgrades are acceptable if there is enough money available using
the like-for-like formula. If there is a need for additional funds, the department must fund
the difference with their department’s budget.
5. Rebuilds: There is an option to use the FERRF monies to rebuild equipment if it extends the
useful life and it is more cost-effective than the replacement option.
6. Legal and Safety Requirements: If a mandated legal or safety requirement occurs and there
is a cost increase, the department must fund with their department’s operating budget.
7. Early Replacement: If it is determined by the ERRC that an asset has failed before the end of
its useful life, the FERRF will pay for this (pending availability of funds). To collect the
shortfall, an increased rate of replacement, which will include the funds still to be collected
on the original asset, shall be charged on the newly replaced asset.
8. Combining Assets or Obtaining Multiple Assets: It is permissible to combine assets to obtain
a single asset or to obtain more than one asset when replacing a single asset. In both cases,
if there is a shortage of funds (based on the like-for-like formula), the department must fund
the difference from their department’s operating budget.
IV. Replacement Rules
A. FERRF Owned Assets:
All assets placed in the FERRF must have the following basic criteria as determined by the ERRC.
The ERRC can change the minimum criteria to match the City’s standards and approve
exceptions on a case-by-case basis. These criteria must be met to have a replacement schedule
created:
1. Useful life be more than two years.
2. Minimum individual value is $10,000. Please note that this value may change from time to
time to account for inflation.
3. Asset must be a motorized vehicle or a wheeled piece of equipment.
B. Useful Life:
The useful life is established based on industry standards and the normal life expectancy of
similar assets. Asset classes generally affect large groups of similar assets; however, special
applications and unique items may have separate lives. Normally the useful life is changed
when actual average disposal age deviates by more than one year at replacement. Useful life
can also be changed because of technological changes or ERRC determination.
C. Acquisition and Disposal of Assets:
The ERRC reviews all assets to determine those that should be replaced, retained or disposed of.
The ERRC meets with the operating departments to agree on the selection of items to be
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replaced and to discuss new acquisitions. The formal budget approval for acquisition of assets
occurs when Council approves the budget and disposal of assets must follow the City’s Disposal
and Surplus Policy.
V. Operations & Maintenance
A. Maintenance Rates:
The ERRC will establish rates for various operational costs and services provided by the
approved budget of the Fleet Services operations. A separate fund will be used to account for
maintenance operation charges. All departments will share one FOMF.
1. FOMF maintenance rates will be established to recover 100% of the actual direct and
indirect costs (e.g. Salaries, operational expenses, inventory, fuel, etc.). Rates will be
adjusted during the budget process and mid-year review based on the fund balance if
revenue exceeds or is below needs.
2. Each department, including departments not participating in the FERRF will be direct
charged based on the actual maintenance and repair costs tracked by Fleet Services plus an
indirect cost allocation calculated by the model.
B. Maintenance and Services:
Fleet Services will maintain all FERRF assets except specialty equipment that has specifically
been delegated to other departments. Fleet Services may perform maintenance and provide
services on equipment not assigned to FERRF.
1. Fleet Services will track all direct costs of repairs for each individual asset including fuel and
outside repairs. These costs will be used to determine each department’s portion of the
maintenance & operations annual charge.
VI. Appendix
A. Acronyms:
1. ERRC - Equipment Rental & Replacement Committee
2. FERRF – Fleet Equipment Rental & Replacement Fund
3. FOMF - Fleet Operations & Maintenance Fund
B. Roles and Responsibilities:
1. Operating Departments
a) Work with the ERRC to identify FERRF asset needs and provide all pertinent information
for any asset owned and maintained by the FERRF and FOMF. This is particularly
important for specialty equipment.
b) Assist in identifying cost increases in existing equipment that exceeds inflation. Working
with the ERRC to develop budgetary proposals ensuring proper funds are available in
FERRF and FOMF.
c) Provides prudent use, care, and stewardship of FERRF owned assets.
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d) Manages all non-owned FERRF equipment.
e) Provides feedback on asset management policies.
2. Public Works Department: Fleet Services
a) Manages all FERRF assets in accordance with this policy.
b) Manages the budget and financial operations of the FERRF and FOMF.
c) Maintains all titles for City owned licensed vehicles and equipment.
d) Prepares the asset replacement plan and recommends new purchases.
e) Prepares purchase requisitions for all new FERRF assets.
f) Represents Fleet Services on the operating budget and financial issues.
3. Public Works Department: ERRC
a) Establishes and administers the funds policies in collaboration with the Finance
Department.
b) Manages all FERRF assets in accordance with this policy.
c) Determines equipment that will be maintained by FOMF.
d) Establishes the useful life, replacement schedules and rates for all asset classes, and
makes changes to the useful life based on actual experience.
e) During the budget process develops FERRF and FOMF financial plans for the budget
period.
f) Sets maintenance, replacement, and estimated fuel charges to user departments.
g) Works with the Finance Department to estimate reserve needs, compare them with
actual annual reserve contributions, and determines if there is any excess/deficit to be
refunded to or contributed by the appropriate fund as required. If the new estimate is
within 5% (+/-) of the actual annual reserve contribution, then no action is required.
h) Determines when surplused assets are retained and rented beyond their expected
disposal date.
i) Provides financial services to Fleet Services including assistance in the development and
review of financial policies, budgets and rates.
j) Assists the Fleet Services manager in budget monitoring.
4. Finance Department
a) Working with the ERRC establishes and administers the funds policies.
b) Analyzes and makes recommendations to the Leadership Team on FERRF and FOMF
financial plans for the budget period, including: asset replacement plan, proposed new
asset purchases, and total charge allocations by department.
c) Works with the ERRC to analyze reserve needs, compares them with actual annual
reserve contributions, and determines if there is any excess/deficit to be refunded to or
contributed by the appropriate fund as required. If the new estimate is within 5% (+/-)
of the actual annual reserve contribution, then no action is required.
d) Processes FERRF and FOMF department billings and prepares FERRF and FOMF financial
statements.
e) Ensures City property and equipment is disposed of in accordance with State and City
regulations.
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f) Invests fund money in accounts for interest in accordance with the City’s Financial
Policy.
5. Leadership Team
a) During the budget process approves the FERRF and FOMF financial plans for the budget
period.
b) Approves exceptions to established policies on a case-by-case basis.
6. City Council
a) Adopts the appropriations and operating budgets for FERRF and FOMF during the
budget process.
C. Chronology of Significant Events:
1. RCW 32.21.088 address the creation and guidelines of the Equipment Rental Fund.
2. The Equipment Rental & Replacement Fund (ERRF) was created July 2, 1974 by Ordinance
No. 1712.
3. Original ERRF created by Ordinance No. 1712 is repurposed effective January 1, 2019
through Ordinance No. 3218.
4. New Fleet Equipment Rental Operating and Maintenance Fund (FOMF) effective January 1,
2019 by Ordinance No. 3218.
D. Common Audit Issues shared by the State Auditor’s Office:
1. Failure to maintain a current list of assets and lack of the performance of physical
inventories. (This is the most common condition observed.)
2. Failure to retain adequate records for support of expenditures.
3. Failure of the ER&R fund to bill departments for use of equipment and supplies.
4. Submitting replacement cost estimates for reimbursement with grant money.
2021 Budget Section 5 - Page 36 of 103
EXHIBIT B
I.T. Equipment Rental & Replacement Fund and I.T
Operations & Maintenance Fund
Policy
November 2018
2021 Budget Section 5 - Page 37 of 103
Page 2 of 8
I. Table of Contents
II. Overview ............................................................................................................................................... 3
A. Purpose: ............................................................................................................................................ 3
B. General Policy: .................................................................................................................................. 3
C. Funds Purpose: .................................................................................................................................. 3
D. Services: ............................................................................................................................................ 3
III. Replacement Reserve Management ................................................................................................. 3
A. Donation of Equipment to ITERRF: ................................................................................................... 3
B. Replacement Reserves for ITERRF Owned Equipment: .................................................................... 4
C. Prohibited Uses of Reserves: ............................................................................................................ 4
D. Purpose and Uses of Reserves: ......................................................................................................... 4
IV. Replacement Rules............................................................................................................................ 5
A. ITERRF Owned Assets: ....................................................................................................................... 5
B. Useful Life: ........................................................................................................................................ 5
C. Acquisition and Disposal of Assets: ................................................................................................... 5
V. Operations & Maintenance................................................................................................................... 6
A. Maintenance Rates: .......................................................................................................................... 6
B. Maintenance and Services: ............................................................................................................... 6
VI. Appendix ........................................................................................................................................... 6
A. Acronyms: ......................................................................................................................................... 6
1. ITERRF – I.T. Equipment Rental & Replacement Fund .................................................................. 6
2. ITOMF – I.T. Operations & Maintenance Fund ............................................................................. 6
B. Roles and Responsibilities: ................................................................................................................ 6
1. Operating Departments ................................................................................................................ 6
2. Information Technology Services Department ............................................................................. 6
3. Finance Department ..................................................................................................................... 7
4. Leadership Team ........................................................................................................................... 7
5. City Council ................................................................................................................................... 7
C. Chronology of Significant Events: ..................................................................................................... 7
D. Common Audit Issues shared by the State Auditor’s Office: ............................................................ 8
2021 Budget Section 5 - Page 38 of 103
Page 3 of 8
II. Overview
A. Purpose:
The purpose of this document is to establish and specify the City of Port Townsend’s (City) policy
governing asset and fund management, including rental, replacement, and maintenance
services for equipment related to Information Technology (I.T.) (See separate policy for Fleet
Equipment Rental & Replacement and Fleet Operations & Maintenance).
B. General Policy:
1. It is the policy of the City to provide for centralized management of its computer and I.T.
equipment. Management activities include fund management and asset purchase, rental,
maintenance and repair, replacement and disposal.
2. The City Manager has delegated responsibility for implementing the provisions of this policy
to the Information Technology Services Department. The Information Technology Services
Department in collaboration with the Finance Department shall be responsible for ensuring
uniform application and interpretation of the policy. Proposed exceptions to the policy will
be considered for maximum benefit of the City.
3. The Information Technology Services Department shall be responsible for planning,
directing, managing, coordinating and supervising programs for the acquisition, assignment,
maintenance and repair, rental, replacement and disposal of the City’s I.T. equipment.
C. Funds Purpose:
The purpose of the I.T. Equipment Rental & Replacement Fund (ITERRF) and the I.T. Operations
& Maintenance Fund (ITOMF) is to manage replacement and maintenance funds to ensure
sufficient monies are available when needed. This allows the City to focus on using
maintenance and efficiency indicators when making asset equipment replacement decisions.
D. Services:
The ITERRF and ITOMF are designated as Internal Service Funds with three major functions. The
Replacement function supports the process to provide for replacement of assets. The
Administration function supports asset and operations management. The operations function
supports maintenance and intergovernmental activities.
III. Replacement Reserve Management
A. Donation of Equipment to ITERRF:
Departments that participate in replacement will donate all eligible assets to the ITERRF, where
they will be considered ITERRF owned Assets.
2021 Budget Section 5 - Page 39 of 103
Page 4 of 8
B. Replacement Reserves for ITERRF Owned Equipment:
During the budget process, the Information Technology Services Department will establish
reserves for the replacement of assets.
1. Replacement charges are generally calculated based on the estimated cost of each
equipment category, its useful life, and the anticipated replacement value. Replacement
rates are sometimes adjusted for special purposes. All charges will be accumulated in the
ITERRF. A calculation model, such as the Excel model provided by FCS Group, shall be used
to track each individual asset and determine the appropriate replacement charge.
2. Replacement rates may be adjusted when the useful life of an asset is changed, or the cost
of the replacement asset is significantly higher or lower than the norm.
3. Assets acquired for service by means other than purchase (e.g. lease) will have a
replacement rate established like a purchased asset and will require Finance approval for
replacement at the time of acquisition.
C. Prohibited Uses of Reserves:
1. ITERRF replacement reserves will not be used to fund construction projects, purchase non-
capital equipment (unless part of a system), or purchase capital items that are not
authorized to have a replacement schedule.
2. ITERRF replacement reserves will not be permanently transferred to other funds unless
directed by Council.
D. Purpose and Uses of Reserves:
The ITERRF is designed to ensure we can replace an asset with a “like” item. The ITERRF exists to
accumulate monies based on the replacement cost of an asset.
1. True-up Process: During the semi-annually review process the annual reserve need will be
re-evaluated, compared with the actual annual reserve contributions, and any excess/deficit
will be refunded to or contributed by the appropriate fund as required. If the new estimate
is within 5% (+/-) of the actual annual reserve contribution, then no action is required.
2. Like-for-Like Baseline: When computing funds available for replacement, the Information
Technology Services Department determines the estimate by comparing the equipment
being replaced to an identical piece of equipment in today’s marketplace.
3. Equipment Improvements: If there are changes in equipment technology that either make
the old asset obsolete, antiquated or not match generally accepted industry trends, this will
be considered a like-for-like replacement.
4. Upgrades: New equipment technology that is not an Equipment Improvement will be
considered an upgrade. Upgrades are acceptable if there is enough money available using
the like-for-like formula. If there is a need for additional funds, the department must fund
the difference with their department’s operating budget.
5. Rebuilds: There is an option to use the ITERRF monies to rebuild equipment if it extends the
useful life and it is more cost-effective than the replacement option.
6. Legal and Safety Requirements: If a mandated legal or safety requirement occurs and there
is a cost increase, the department must fund with their department’s operating budget.
2021 Budget Section 5 - Page 40 of 103
Page 5 of 8
7. Early Replacement: If it is determined by the Information Technology Services Department
that an asset has failed before the end of its useful life, the ITERRF will pay for this (pending
availability of funds). To collect the shortfall, an increased rate of replacement, which will
include the funds still to be collected on the original asset, shall be charged on the newly
replaced asset.
8. Combining Assets or Obtaining Multiple Assets: It is permissible to combine assets to obtain
a single asset or to obtain more than one asset when replacing a single asset. In both cases,
if there is a shortage of funds (based on the like-for-like formula), the department must fund
the difference from their department’s budget.
IV. Replacement Rules
A. ITERRF Owned Assets:
All assets placed in the ITERRF must have the following basic criteria as determined by the
Information Technology Services Department. The Information Technology Services Department
can change the minimum criteria to match the City’s standards and approve exceptions on a
case-by-case basis. These criteria must be met to have a replacement schedule created:
1. Useful life be more than one year.
2. Minimum individual value is $500. Please note that this value may change from time to
time to account for inflation.
3. Assets such as tablets and cellular devices will not be included in the ITERRF. These assets
will be purchased directly out of the respective department’s operating budget as needed or
replaced.
B. Useful Life:
The useful life is established based on industry standards and the normal life expectancy of
similar assets. Asset classes generally affect large groups of similar assets; however, special
applications and unique items may have separate lives. Normally the useful life is changed
when actual average disposal age deviates by one year or more at replacement. Useful life can
also be changed because of technological changes or the Information Technology Services
Department’s determination.
C. Acquisition and Disposal of Assets:
Information Technology Services Department reviews all assets to determine those that should
be replaced and those that should be retained. The Information Technology Services
Department meets with the operating departments to agree on the selection of items to be
replaced and to discuss new acquisitions. Approval for acquisition of assets is decided during
the Budget process with Council’s approval and disposal of assets must follow the City’s Disposal
and Surplus Policy.
2021 Budget Section 5 - Page 41 of 103
Page 6 of 8
V. Operations & Maintenance
A. Maintenance Rates:
The Finance Department and Information Technology Services Department will establish rates
for various operational costs and services provided by the approved budget of the Information
Technology Services Department. The ITOMF will be used to account for operations and
maintenance charges.
1. ITOMF maintenance rates will be established to recover 100% of the actual direct and
indirect costs (e.g. Salaries, operational expenses, etc.). Rates will be adjusted during the
budget process and mid-year review based on the fund balance if revenue exceeds or is
below needs.
2. Each department will be charged based on the number of pieces of I.T. equipment assigned
to them in the ITERRF, along with an allocation for citywide shared equipment. The
allocation will be calculated by the model.
B. Maintenance and Services:
The Information Technology Services Department will maintain all ITERRF assets. The
Information Technology Services Department may perform maintenance and provide services
on equipment not assigned to ITERRF.
VI. Appendix
A. Acronyms:
1. ITERRF – I.T. Equipment Rental & Replacement Fund
2. ITOMF – I.T. Operations & Maintenance Fund
B. Roles and Responsibilities:
1. Operating Departments
a) Work with the Information Technology Services Department to identify ITERRF asset
needs and provide all pertinent information for any asset owned and maintained by the
ITERRF and ITOMF. This is particularly important for specialty equipment.
b) Work with the Information Technology Services Department to develop budgetary
proposals ensuring proper funds are available in the ITERRF and ITOMF.
c) Provides prudent use, care, and stewardship of ITERRF owned assets.
d) Provides feedback on asset management policies.
2. Information Technology Services Department
a) Establishes and administers the funds policies in collaboration with the Finance
Department.
b) Manages all ITERRF assets in accordance with this policy.
c) Manages the budget and financial operations of the ITERRF and ITOMF.
d) Prepares the asset replacement plan and recommends new purchases.
e) Prepares purchase requisitions for all new ITERRF assets.
2021 Budget Section 5 - Page 42 of 103
Page 7 of 8
f) Represents I.T. on the operating budget and financial issues.
g) Determines equipment that will be maintained by ITOMF.
h) Establishes the useful life, replacement schedules and rates for all asset classes, and
makes changes to the useful life based on actual experience.
i) During the budget process develops ITERRF and ITOMF financial plans for the budget
period.
j) Sets maintenance and replacement to user departments.
k) Works with the Finance Department to estimate reserve needs, compare them with
actual annual reserve contributions, and determines if there is any excess/deficit to be
refunded to or contributed by the appropriate fund as required. If the new estimate is
within 5% (+/-) of the actual annual reserve contribution, then no action is required.
3. Finance Department
a) Working with the Information Technology Services Department establishes and
administers the funds policies.
b) Analyzes and makes recommendations to the Leadership Team on ITERRF and ITOMF
financial plans for the budget period, including: asset replacement plan, proposed new
asset purchases, and total charge allocations by department.
c) Works with the Information Technology Services Department to analyze annual reserve
needs, compares them with actual annual reserve contributions, and determines if
there is any excess/deficit to be refunded to or contributed by the appropriate fund as
required. If the new estimate is within 5% (+/-) of the actual annual reserve
contributions, then no action is required.
d) Processes ITERRF and ITOMF department billings and prepares ITERRF and ITOMF
financial statements.
e) Ensures City property and equipment is disposed of in accordance with State and City
regulations.
f) Invests fund money in accounts for interest in accordance with the City’s Financial
Policy.
4. Leadership Team
a) During the budget process approves the ITERRF and ITOMF financial plans for the
budget period.
b) Approves exceptions to established policies on a case-by-case basis.
5. City Council
a) Adopts the appropriations and operating budgets for ITERRF and ITOMF during the
budget process.
C. Chronology of Significant Events:
1. RCW 32.21.088 address the creation and guidelines of the Equipment Rental Fund.
2. The Equipment Rental & Replacement Fund (ERRF) was created July 2, 1974 by Ordinance
No. 1712.
3. Original ERRF created by Ordinance No. 1712 is repurposed effective January 1, 2019
through Ordinance No. 3218.
2021 Budget Section 5 - Page 43 of 103
Page 8 of 8
4. New ITERRF and ITOMF effective January 1, 2019 with Ordinance No. 3218. All departments
will participate in the new ITERRF and ITOMF.
D. Common Audit Issues shared by the State Auditor’s Office:
1. Failure to maintain a current list of assets and lack of the performance of physical
inventories. (This is the most common condition observed.)
2. Failure to retain adequate records for support of expenditures.
3. Failure of the ER&R fund to bill departments for use of equipment and supplies.
4. Submitting replacement cost estimates for reimbursement with grant money.
2021 Budget Section 5 - Page 44 of 103
EXHIBIT C
Purchasing Policies
and
Procedures Manual
250 Madison Street
Port Townsend, WA 98368
cityofpt.us
2021 Budget Section 5 - Page 45 of 103
PURCHASING MATRIX – BID LIMITS & SIGNING AUTHORIZATION
(Always include applicable sales tax when determining dollar amounts)
Purchase of Goods &
Equipment
Bidding Process Contract and Payment
Requirements
Authorization
Under $500 No requirement
Payment off signed invoice (or use
purchase card if within limits)
No contract required
Employee personal
reimbursement if approved by
supervisor
W-9
Department head or
designee
$500-$7,500 No requirement, but three
estimates recommended
May use MRSC Vendor
Roster, State contract, or
interlocal agreement
Select lowest qualified
vendor
Payment off signed invoice (or use
purchase card if within in limits)
W-9
Department head or
designee
$7,501-$15,000 Obtain three telephone
and/or written quotations
or use formal bidding
May use MRSC Vendor
Roster, State contract, or
interlocal agreement
Select lowest qualified
vendor
Purchase order if >$10,000
Requisition form & signed invoice
W-9
Department head (if
within budget
appropriations)
$15,001-$29,999 Must either:
formally bid, use
State contract, or
interlocal agreement
Select lowest qualified
vendor
Purchase order
Requisition form & signed invoice
W-9
City Manager (if
within budget
appropriations)
$30,000 or more Must either:
formally bid, use
State contract, or
interlocal agreement
Select lowest qualified
vendor
Purchase order
Requisition form & signed invoice
W-9
Council approval1
Contract and/or
invoice signed by City
Manager
2021 Budget Section 5 - Page 46 of 103
Public Works Projects Bidding Process Contract and Payment
Requirements
Authorization
$5,000 or less Required to have three
estimates
May use MRSC Small
Works Roster
Award to lowest qualified
contractor
Alternatively, may use day
labor (City staff)
Small public works contract
Insurance
W-9
Prevailing wage (Contractor may
use Combined Intent/Affidavit
Form for projects $2,500 or less)
5% retainage or retainage bond,
unless waived in advertisement by
City Manager, department head,
or designee
Performance and payment bonds,
unless waived in advertisement by
City Manager, department head,
or designee
Department head or
designee
Less than $50,000
Limited Small Public
Works process
Obtain estimates from at
least three contractors on
MRSC Small Works Roster2
Award to lowest qualified
contractor
Alternatively, may use
formal bidding or day
labor (City staff)
Small public works contract
Insurance
W-9
Prevailing wage
5% retainage or retainage bond,
unless waived in advertisement by
City Manager
Performance and payment bonds,
unless waived in advertisement by
City Manager
Contractor may choose to have
10% retainage held instead of
providing performance and
payment bonds
Purchase order (encumbrance) if
>$10,000, except capital projects
City Manager for less
than $20,000 single
trade or $35,000
multiple trades 3
Contracts over these
limits require Council
approval
Contract signed by
City Manager
$350,000 or less
Small Public Works Roster
process
Obtain estimates from at
least five contractors on
MRSC Small Works Roster
All contractors in
applicable roster category
Small public works contract
Insurance
W-9
Council approval (see
above)
Contract signed by
City Manager
2021 Budget Section 5 - Page 47 of 103
must be given opportunity
to submit estimate before
any contractor can be
solicited again
If project total is between
$250,000-$350,000, all
contractors in applicable
category must be notified
that project is being bid
Recommend bid deposits
for projects >$40,000
Alternatively, may use
formal bidding or may use
day labor (City staff) for
single trade projects
$75,500 or less and
multiple trade projects
$116,155 or less
Award to lowest qualified
contractor
Prevailing wage
5% retainage or retainage bond,
unless waived in advertisement by
City Manager 4
Performance and payment bonds
Contractor may choose to have
10% retainage held instead of
providing performance and
payment bonds for projects
$150,000 or less
Purchase order (encumbrance),
except for capital projects
approved in CIP
Projects over $350,000 Must use publicly
advertised formal bid
process
5% bid deposit required
Public works contract
Insurance
W-9
Prevailing wage 5
5% retainage or retainage bond 4
Performance & payment bonds
Purchase order [except Capital
Projects approved in CIP]
Council approval
Contract signed by
City Manager
Services [not including
Architecture &
Engineering]
Bidding Process Contract and Payment
Requirements
Authorization
Under $5,000 No requirement, but three
estimates recommended
Check requirements if
using federal funding
No contract required
Payment off signed invoice
W-9
Prevailing wages may be required
for certain services (e.g.,
landscaping)
Department head or
designee
2021 Budget Section 5 - Page 48 of 103
$5,000-$9,999 No requirement, but
recommend at least three
estimates from firms on
the MRSC Consultant
Roster
Request price quotes,
schedule, qualifications
Check requirements if
using federal funding
Contract with lowest
qualified vendor
Professional services agreement
Insurance
W-9
Purchase order (encumbrance) if
requested
Prevailing wages may be required
for certain services (e.g.,
landscaping)
City Manager
$10,000-$19,999 Request proposals or
estimates from at least
three firms on the MRSC
Consultant Roster
Request price quotes,
schedule, and
qualifications
Check requirements if
using federal funding
Contract with lowest
qualified vendor
Professional services agreement
Insurance
W-9
Purchase order (encumbrance)
Prevailing wages may be required
for certain services (e.g.,
landscaping)
Council approval 6
Contract signed by
City Manager
$20,000 or more Formal, advertised RFP or
RFQ process
recommended
Check requirements if
using federal funding
Contract with lowest
qualified vendor
Professional services agreement
Insurance
W-9
Purchase order (encumbrance)
Prevailing wages may be required
for certain services (e.g.,
landscaping)
Council approval 6
Contract signed by
City Manager
Architecture, Engineering,
Landscape Architecture,
& Surveying
Bidding Process Contract and Payment
Requirements
Authorization
Any dollar amount Must publish need for
services in advance
May use MRSC Consultant
Roster
Professional services agreement
Insurance, including professional
liability
W-9
City Manager if less
than $10,000 6
$10,000 or more
requires Council
approval
2021 Budget Section 5 - Page 49 of 103
Firms submit statement of
qualifications
Award based on
qualifications, not price
Some A/E contractor
funding agencies may
require their own contract
and/or contract language
placed int eh city contract.
Verify with funding
agency.
Purchase Order if > $10,000
1 The City Manager may sign contracts for purchase of goods greater than $30,000 if they specifically implement
the annual budget and result from the aggregation of approved budgetary programs and services for the current
year (PTMC 3.46.110(A)(1)).
2 For projects under $50,000, you may use the Limited Small Public Works process, which requires estimates from
at least three contractors on the roster.
3 The City Manager may sign public works contracts up to $65,000 for multiple trades if the contract is time-
sensitive and a delay in bringing the matter before Council would cost the City time and money.
4 Retainage is not required for federally funded transportation projects through the Federal Highway
Administration. Check grant documents for specific requirements. If the local government waives retainage, they
assume liability of contract non-payments but due retain the right of recovery from the contractor.
5 Federally funded or assisted public works projects over $2,000 require payment of Davis-Bacon wage rates
determined by the U.S. Department of Labor.
6 The City Manager may sign professional services contracts, including architectural, engineering, legal, or
consulting services, up to $25,000 if the contract is time-sensitive and delay in bringing the matter before Council
would cost the City time and money.
2021 Budget Section 5 - Page 50 of 103
Table of Contents
1.0 Introduction 1
1.1 Purpose of the Manual 1
1.2 Contact Information 1
1.3 Code of Ethics (RCW 42.23) 2
1.4 Conflict of Interest 2
1.5 Unauthorized Purchases 3
1.6 Sustainable Purchasing 4
1.7 What This Manual Covers 4
1.8 Define the Need 5
1.9 Determine the Cost 6
1.10 Determine Contract Value 6
1.11 Exemptions to the Competitive Bidding Process 7
1.12 Declared Emergency 8
2.0 New Procurement 9
2.1 Initiate a New Procurement 9
2.2 Purchases of Goods, Supplies, & Equipment 9
2.2 (a) SMALL Purchases of Goods, Supplies, & Equipment ($7,500 or less) 9
2.2 (b) INTERMEDIATE Purchases of Goods, Supplies, & Equipment ($7,501-$15,000) 10
2.2 (c) LARGE Purchases of Goods, Supplies, & Equipment ($15,001 or more) 11
2.3 Food and Beverage Purchases 12
2.4 Piggybacking (State Contracts and Interlocal Purcha sing Agreements) 14
2.5 Public Works 15
2.6 Limited Small Works 16
Process (Public Works Projects under $50,000) 16
2.7 Small Works Roster 17
Process (Public Works Projects $350,000 or less) 17
2.8 Formal, Competitive Bid 18
Process (Required for Public Works Projects over $350,000) 18
2.9 Equipment Purchases Including Installation 19
2.10 Unit Priced Contracts 20
2.11 Services 21
2.12 Purchases of Architectural & Engineering Services 23
2.13 RFPs and RFQs 24
2.14 Bid Opening Process 26
2.15 No Bids or Non-Responsive/Responsible Bids or Submittals 28
2.16 Contracting 101 29
3.0 Other Considerations 31
3.1 Rule 171 – Sales Tax Exemptions 31
3.2 Prevailing Wages 31
3.3 Retainage 33
2021 Budget Section 5 - Page 51 of 103
4.0 Contract Administration 34
4.1 Risk Management Considerations 34
4.2 Payment Options 34
4.3 Contract Execution & Administration 35
4.4 Contract Monitoring - Performance 36
4.5 Contract Monitoring - Payment 37
4.6 Amendments & Change Orders 38
4.7 Contract Close-Out & Termination 39
5.0 Surplus and Disposition of Assets 41
5.1 General Information 41
5.2 Declaring Surplus 41
5.3 Disposition of Personal Property 42
5.4 Seizure Items (RCW 69.50.505) 43
5.5 Surplus of Real Property (Land) 43
6.0 Purchasing Cards 43
6.1 Purchasing Cards as a Method of Payment 43
6.2 Purchasing Card Administration 44
6.3 Authorized Charges and Uses 45
6.4 Unauthorized Purchases 45
6.5 Returns and Exchanges 46
6.6 Account Maintenance 46
7.0 Definitions and Acronyms 47
2021 Budget Section 5 - Page 52 of 103
1
1.1 Purpose of the Manual
The Purchasing Policies and Procedures Manual guides and assists City staff
with basic procurement and contracting requirements as set forth in the City
of Port Townsend Municipal Code (PTMC) Chapter 3.46 and Washington
State statutes.
This manual establishes policy guidelines and clarifies the procedures for
purchasing supplies and materials, public works construction, and
contracting for services by the City of Port Townsend. The procedures set
forth in subsequent sections of this manual are designed to assure the
citizens, the City Council, and City administrative staff that the City is
receiving maximum value for each tax and utility dollar expended and to
ensure fiscal responsibility in the procurement process. All employees and
City representatives must follow these policies and procedures.
All references to the Revised Code of Washington (RCW) and City Ordinances
and Resolutions shall be incorporated as part of this manual, including all
future amendments. In cases where these policies conflict with any City
Ordinance or State or Federal Law or Regulations, the terms of that law or
regulation prevail. In all other cases, these policies apply.
1.2 Contact Information
Name Responsibility
Finance Director/Manager Fiscal control, policy, & budget
Finance – Accountant Grants & capital improvement
program
City Attorney/Legal Asst. Contracts and bidding process
Finance Technician III Accounts payable & vendors;
ordinary purchases of supplies,
materials, maintenance, and
equipment; surplus & disposition of
assets; purchasing cards
Sources
• City of Port Townsend
Municipal Code
• Washington State RCW’s
• Municipal Research and
Services Center
• The Bidding Book
1.0 Introduction
2021 Budget Section 5 - Page 53 of 103
2
1.3 Code of Ethics (RCW 42.23)
This section of the manual should be interpreted in tandem with the
City of Port Townsend Personnel Policy Manual Chapter 2.1 (Code of
Conduct) and PTMC Chapter 2.80. Please also refer to RCW 42.23 (Code
of Ethics for Municipal Officers – Contract Interests). A municipal officer
includes all elected officials, advisory board members, and City
employees.
City employees are expected to represent the City in a professional and
accountable manner that is courteous, helpful, and efficient.
Employees shall conduct their public and private actions and financial
dealings in a manner that shall present no conflict of interest between
the public trust and their private interest.
Actions of City employees, when purchasing supplies and services,
should be fair and impartial and not be used for personal gain or
benefit. Public employment shall not be used for personal gain, and
City employees may neither solicit, accept, nor agree to accept any
compensation, gratuity, or reward for themselves, their families, or
others that results in their personal gain or which may affect their
impartiality in making decisions on the job. Discounts or concessions
realistically available to the general population, items received that do
not result in personal gain, and samples for general City use are
examples of items that are not gratuities. Personal judgment should be
used, and questions regarding particular situations should be referred
to the employee’s supervisor or department head.
Personal gifts or gratuities that might influence or give the appearance
of influencing purchases of goods or services must be declined.
Employees may not willfully circumvent purchasing and procurement
policies and procedures to enter into contracts or purchase goods and
services. Any contract made in violation of this policy manual, City
code, or State statutes will be considered null and void, and the
employee or officer may be subject to discipline or dismissal. Willful
disregard of these policies and statutes when purchasing goods and
services may also be subject to discipline and/or dismissal from service.
Please see PTMC 2.80.060 (Penalties) for reference.
1.4 Conflict of Interest
No City staff or Council member may undertake consulting, professional
practice, or other assignments that would result in a conflict of interest. Any
2021 Budget Section 5 - Page 54 of 103
3
City employee or Council member who recommends or approves a purchase
and has any financial interest in the firm involved in the purchase shall
disclose his or her interest prior to recommending or approving the
purchase.
No city staff or Council member may participate in the selection, award, or
administration of a contract supported by a Federal award if they have a real
or apparent conflict of interest. Such a conflict of interest would arise when
the City employee or Council member, any member of their immediate
family, their partner, or an organization which employs or is about to employ
any of the parties indicated herein, has a financial or other interest in or a
tangible personal benefit from a firm considered for a contract. Any willful
violation will be subject to disciplinary action according to PTMC 2.80.060.
1.5 Unauthorized Purchases
PURCHASES FOR PERSONAL USE ARE NOT ALLOWED. The person
ordering the unauthorized and unjustified purchase is personally liable
for the costs of the purchase or contract and may be subject to
disciplinary action, up to and including termination of employment. If
the purchase was made without proper authorization but is in fact a
justified purchase, then the department head has the option to
approve the purchase after the fact.
When representing the City through purchasing goods and services,
employees are prohibited from doing the following:
• “Bid Splitting” – A capital (public work) project means a
complete project. The project may not be split into units or
classes of work to avoid the restriction on work that may be
performed by day labor or other bid rules.
• Purchase breakup – Purchases that exceed authorization limits
or exceed the quote requirements should not be split up to
circumvent the purchasing policies and procedures.
• Purchasing alcohol or personal entertainment goods and
services.
• Generating a purchase order. Only the Legal Department or
Finance Department have the authority to generate a purchase
order (encumbrance).
• Purchasing controlled commodities without prior approval
including the following:
o Cell phones, telephone equipment, pagers, etc.
o Computers and related equipment, fax machines,
printers, scanners, copiers, software, or systems
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o Anything that IT staff is requested or required to install,
connect, service, maintain, or support
o Anything purchased using Equipment Rental and
Revolving Funds
o Using a City-issued purchase card for cash advances or
professional services
1.6 Sustainable Purchasing
The City shall acquire its goods and services in a manner that complies
with all federal, State, and City laws and other requirements (e.g., City
resolutions).
Environmental factors to consider in selecting products include:
• Pollutant releases, especially persistent bio-accumulative toxins
(PBTs)
• Waste generation
• Greenhouse gas emissions
• Recycled content [recommend using 30% recycled paper]
• Energy consumption
• Depletion of natural resources
• Potential impact on human health and the environment
Social equity factors that should be considered include but are not
limited to:
• Use of local businesses when allowable under bid rules
• Use of small, minority, and women-owned businesses
• Ergonomic and human health impacts
Fiscal factors to be considered include but are not limited to:
• Lowest total cost
• Leveraging our buying power
• Impact on staff time and labor
• Long-term financial/market changes
• Technological advances in a rapidly changing market
1.7 What This Manual Covers
The process of selecting vendors and managing contracts sh all embody
the value of stewardship of public resources by providing the greatest
levels of both quality and value.
The goals are to ensure that the purchase process:
Speaking the Same
Language
The following terms are often
used interchangeably. We
typically use these terms as
described below:
Purchasing, Procurement
Purchasing is the act, function
and responsibility for the
acquisition of equipment,
materials, supplies and services.
The term describes the process
of buying.
Procurement includes all
functions that pertain to the
acquisition, including description
of requirements, selection and
solicitation of sources,
preparation and award of
contract and all phases of
contract administration.
2021 Budget Section 5 - Page 56 of 103
5
• Practices ethical behavior and conduct: Create purchasing
processes that are fair, open, and at least cost of public funds.
• Obtains value with public funds: Purchase goods and services
that are fiscally responsible, reduce resource consumption and
waste, perform adequately, promote advantages to lessor
advantaged segments of the community, and promote health and
well-being.
• Acts with integrity and ensures open and effective
communication: Be impartial in fact, as well as in appearance.
From Start to Finish…
Before any purchase is made, the following questions should be
answered:
• Define the need – What kind of purchase is this?
• Determine the cost – How much will it cost?
• Process – How do I procure it?
• Protecting the City – How do we properly protect the City from
liability?
• Authority – Who must approve it?
• Contract administration – What are my responsibilities?
1.8 Define the Need
The first question that should be answered is “What type of purchase is
this?” The major categories of purchases include:
Public Works: (RCW 39.04.010)
Includes all work, construction, alteration, repair, or improvements other
than ordinary maintenance executed at the cost of the City:
Examples: demolition, remodeling, renovation, road construction, building
construction, and utilities construction.
Ordinary maintenance is generally considered to include work not
performed by contract and performed on a regular basis to service, check,
or replace items that are not broken. For purposes of prevailing wage
Speaking the Same
Language
The following terms are often
used interchangeably. We
typically use these terms as
described below:
Vendor, Contractor, and
Consultant:
Vendor is typically used when
referring to a supplier of goods,
materials, or supplies.
Contractor is typically used when
referring to a construction or
maintenance company. Can also
apply to an individual or business
having a contract with the City.
Consultant is typically used when
working on a Professional Service
Contract. The term means a
person with education and/or
experience which uniquely
qualifies them to perform some
specialized services.
2021 Budget Section 5 - Page 57 of 103
6
requirements, public works includes ordinary maintenance when performed
by contract. See Section 3.2.
Materials, Supplies, and Equipment:
Materials, supplies, and equipment are considered tangible items, which are
manufactured and are moveable at the time of purchase. It is important to
distinguish materials, supplies, and equipment used in public works
contracts from those in non-public works contracts, as different bidding
requirements apply to each.
Examples: office supplies, off-the-shelf software, hardware, trucks, copy
machines, auto parts, gravel, janitorial supplies, food, and beverages.
Services:
Distinguishing between services and public works is important, as services
have different bidding requirements. Services require the labor, time, or
effort of a human being and can include intellectual or physical work.
Examples: accountants, attorneys, elevator maintenance, instructors,
technology consulting, engineers, and land surveyors.
1.9 Determine the Cost
Once the need has been defined, the estimated cost of the goods or services
will generally determine what competitive selection process you follow.
Estimated project costs for competitive bidding purposes must include:
• All construction-related work (except for engineering or
architectural design fees)
• All phases of the project
• Any permitting costs of the project
• All labor and materials required for the project
• All applicable sales and use taxes
The cost estimate should not include donated materials, labor, supplies, etc.
1.10 Determine Contract Value
Contract value refers to the total aggregate value of the contract, including
potential renewal periods. Examples of contract value are as follows:
• Example #1: A three-year contract for $40,000 per year is
considered a $120,000 contract.
• Example #2: A one-year, $8,000 professional services contract is
renewed for an additional year at $8,000. The aggregate value of
Speaking the Same
Language
The following terms are often
used interchangeably. We
typically use these terms as
described below:
Bid, Estimate/Quote, Proposal
Bid is an offer submitted by a
contractor or vendor in response
to an invitation to bid (ITB) or
advertisement
Estimate or quote is a statement
of prices, terms of sale, and
description of goods or services
offered by a vendor or contractor
to the City. Commonly used in
more informal solicitations.
Proposal is the document
submitted by the offeror in
response to an RFP/RFQ.
Proposals allow contract award
based on factors other than cost
and may result in negotiations.
2021 Budget Section 5 - Page 58 of 103
7
the contract becomes $16,000, which requires City Council
approval.
1.11 Exemptions to the Competitive Bidding Process
Exemptions to this policy must be approved in writing by the City Manager
when within his or her signing authority; otherwise, exemptions shall be
approved by City Council. Exemptions should make good business sense and
be in the best interest of the City. In all cases, it is the City’s responsibility to
conduct a good faith review of all available providers.
Exemptions to competitive bidding requirements as provided in RCW
39.04.280(1) and PTMC 3.46.090:
Type Examples and Notes
Sole source
• Licensed or patented goods or services
• Specialized items that are compatible with
existing equipment or systems (i.e. water
treatment plant filters)
• Meets City standards (i.e. meters)
• Factory-authorized warranty services
• Meets a specialized need of the City
Purchases involving
special facilities or
market conditions
• Items of special design, shape, or manufacture
that match or fit existing equipment, inventory,
systems, programs, or services
• Items offered at highly favorable price that will
be sold before City can follow bidding process
Auctions, closeout, &
bankruptcy sales
• Only when items can be purchased below
market cost
Emergency purchases
or public works
• See Section 1.12
Purchases of insurance
or bonds
• Competitive bidding is not required for insurance
or bond purchases
Real property
• The City Manager, upon approval by City
Council, may proceed to acquire real property
through negotiation
• Negotiations must be based upon an
independent appraisal of the property
• The City will not pay more than market value
• If purchased with federal funds, the acquisition
shall comply with the Uniform Real Property
Acquisition and Relocation Assistance Act of
1970, as amended
Surplus property (RCW
39.33.010)
• The City may by agreement acquire, sell, or
exchange surplus property to or from another
government without the use of bids
Acronyms
SOQ – Statement of
Qualifications
RFQ – Request for Qualifications
RFP – Request for Proposal
ITB – Invitation to Bid (Formal
Bid)
ITQ – Invitation to Quote (Small
Works)
MWDBE – Minority, Women,
and Disadvantaged Business
Enterprise
CIP – Capital Improvement Plan
2021 Budget Section 5 - Page 59 of 103
8
Interlocal agreements
(Piggybacking)
(RCW 39.34.030)
• See Section 2.4
Exemption Process:
Complete a written request to the City Manager or City Council (depending
on signing authority) explaining why this option is the only option, makes
good business sense, and is in the best interest of the City. Explain what
features, knowledge, or qualifications the vendor can provide that are not
available from other sources. Outline steps taken to verify that this is the
only vendor available, which could include:
(1) internet search
(2) calls to vendors or contractors on MRSC rosters
(3) advertisement in paper with a “Notice of Intent to Contract”
(4) advice from expert consultant in service area
This request should be signed by the requestor. Use the Sole Source
Justification Form if applicable.
1.12 Declared Emergency
For purposes of this section “emergency” means unforeseen circumstances
beyond the control of the City that either: (a) present a real, immediate
threat to the proper performance of essential functions, or (b) will likely
result in material loss or damage to property, bodily injury, or loss of life if
immediate action is not taken. Competitive bidding may be waived subject
to the following process:
1. Staff (usually a department head) identifies an urgent need and
requests that the City Manager declare an emergency.
2. Upon approval from the City Manager, the department authorizes
work and/or equipment procurement required to address the
emergency.
3. Department drafts a memorandum explaining the basis for the
emergency and the selection of the particular vendor. This
memorandum should be included in the contract file.
4. Request that the Legal Department draft a contract.
5. Department schedules the contract award on next City Council
agenda. City Attorney and department head prepare materials
necessary to ratify the emergency declaration finding.
Tips & FAQs
Q: The garage door at Public
Works is stuck closed. The door
must be fixed immediately. What
do we do?
A: Although this is an urgent
need, it does not present a real,
immediate threat to life or
property, so regular contracting
processes must be followed. The
Legal Department can assist with
developing a contract quickly
once a contractor has been
chosen.
Q: Our City water tank has been
badly damaged and water
pressure is threatened. Is this an
emergency?
A: This is not a natural disaster,
but does “present a real,
immediate threat” and makes
competitive bidding impractical.
This would be treated as a
declared emergency. Follow the
declared emergency process.
Note: Emergencies involving
FEMA reimbursements or work
in critical areas may have
different or additional
requirements. Please contact the
City Attorney or Finance
Department for assistance with
either emergency.
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9
2.1 Initiate a New Procurement
The City makes many small and large purchases over the course of the year
and must comply with State and local laws for each type of procurement,
based on type of work, dollar limits, and level of risk involved.
See the matrix at the beginning of this manual for a summary of the types
of new procurements typically performed at the City of Port Townsend.
City staff may also initiate new procurements through purchasing card
purchases (see Section 6.0) and by requesting reimbursement for
purchases made with the employee’s personal funds. It is recommended
that employees use a purchasing card for small purchases whenever
practicable and allowed by City policy.
2.2 Purchases of Goods, Supplies, & Equipment
2.2 (a) SMALL Purchases of Goods, Supplies, &
Equipment ($7,500 or less)
Small purchases of goods, supplies, materials, and equipment $7,500 or less
can be made using one of the following processes:
Process Dollar Limit Allowed Uses Non-Allowed Uses
Purchasing Card (see
Section 6.0)
It is strongly recommended
you use a City purchasing
card vs. personal credit card
All receipts must be retained
and turned into supervisor
for approval.
Contact
Finance if you
need to know
your limits.
Sample limits:
$500 single
purchase;
$1500
monthly billing
cycle limit
Exceptions may
be made with
the Finance
Director’s
approval
Business-related
purchases of
goods and
services (i.e.,
subscriptions,
seminars, meeting
supplies,
maintenance,
repair,
operations, office
supplies,
computer
peripherals,
software
subscriptions)
Alcohol, capital
equipment, cash
advances, consulting
services, personal
items, professional
services, meals while
traveling
2.0 New Procurement
Tips & FAQs
Tax revenue from purchases:
The City may factor in tax
revenues generated by a
purchase of supplies, materials,
and equipment, including those
from local sales tax or from gross
receipts business and occupation
tax. If these tax revenues are
considered, the City must
consider the taxes it would
receive from suppliers located
both within and without its
boundaries (RCW 39.30.040).
Preference for recycled products:
The City may allow for
preferential purchase of products
made from recycled materials or
products that may be recycled or
reused (RCW 39.30.040).
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Although there are no bidding requirements for goods purchases between
$500 and $7,500, it is recommended that City staff obtain estimates from
three vendors, preferably off the MRSC Vendor Roster. Staff may also use a
State contract or interlocal agreement (“piggybacking”). The applicable
department head or designee has invoice signing authority.
Purchases of goods under $500 do not require quotes, but staff may solicit
estimates from the MRSC Vendor Roster or use a State contract or interlocal
agreement (“piggybacking”). The applicable department head or designee
has invoice signing authority.
All payments made by a check issued by the Finance Department require a
W-9 from the vendor.
2.2 (b) INTERMEDIATE Purchases of Goods, Supplies, &
Equipment ($7,501-$15,000)
Purchases of goods, supplies, materials, and equipment from $7,501 to
$15,000 should be made using a purchase order if over $10,000 and a vendor
invoice for payment. Purchases in this category could also be made using a
State contract, interlocal agreement, or formal sealed bidding.
Employees may not use a purchase card or personal payment for
reimbursement unless previously approved by their department head and
within card limits.
When making purchases from $7,501 and $15,000, staff should obtain at
least three telephone or written quotations from vendors on the MRSC
Personal/employee
Reimbursement
Up to $1,000
Personal credit
card use must
be approved by
dept. head.
Incidentals such
as postage, ferry
tolls, parking fees,
hotel fees, CDL
license, etc.
Regular business-
related goods and
services
Vendor Invoice
All invoices MUST be
addressed and/or shipped
to the City of Port
Townsend and have an
invoice number, date of
purchase, and description
of item purchased.
$7,500
Contracted
supplies
Goods at low risk
and not otherwise
covered under a
contract or
purchase order
Capital expenditures
Tips & FAQs
When purchasing
telecommunications and data
processing (computer)
equipment or software, the City
may follow a “competitive
negotiation” process as an
alternative to the bid process
(RCW 39.04.270). This process
requires, at a minimum:
• A request for proposals (RFP)
published in the newspaper
of general circulation at least
13 days before the
submission deadline.
• The RFP identifies significant
evaluation factors, including
price, and their relative
importance.
• The City provides reasonable
procedures for technical
evaluation of the proposals,
identification of qualified
sources, and selection for
awarding the contract.
• The award must be made to
the qualified bidder whose
proposal is “most
advantageous” to the City.
The City may reject all
proposals for good cause and
request new proposals.
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11
Vendor Roster. The applicable department head has invoice signing
authority.
A purchase order or written agreement may be required. Check with the
Finance Department for additional requirements.
All purchases in this category require a W-9 from the vendor.
2.2 (c) LARGE Purchases of Goods, Supplies, &
Equipment ($15,001 or more)
Per RCW 35.23.352(8), any purchase of material, supplies, and equipment
with a cost exceeding $15,000 requires formal, competitive bidding or the
use of a State contract or interlocal agreement.
Formal Bidding Process:
Task Action
1. Identify grants or federal
funds as applicable
Notify Accountant in Finance
2. Prepare bid documents Include:
• Invitation to bid
• Instructions and information for bidders
• Bid proposal template
• Bid bond template
• Bidder’s statement of qualifications template
• Sample contract
• Insurance requirements
Contact Legal Dept. to review prior to finalization
of bid package
3. Prepare product
specifications
Considerations: warranties, delivery, liquidated
damages
4. Advertise, publish, and
notify
Advertise in official newspaper
Publish bid on Builder’s Exchange
Email notification to recommended roster
participants (if any)
5. Addenda required? Department to write addenda, notify plan
holders, and post online
6. Schedule & conduct bid
opening
Department to schedule conference room and
open and read sealed bids
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7. Bid Award Determine the lowest, responsible, responsive
bidder
Prepare Council agenda materials if $30,000 or
more
Prepare purchase contract (or contact Legal
Department if needed)
Obtain vendor signature and forward to Legal
Assistant
Give Legal Assistant or Finance BARS code and
request purchase order/encumbrance.
Obtain W-9 for Accounts Payable
Do not notify non-selected bidders about award
until contract is fully signed
The City Manager has signing authority for purchases less than $30,000. All
purchases totaling $30,000 or more require City Council approval. Consider
the entire cost of the purchase for all years (for example, maintenance costs)
involved when determining the approval level. Contact the Finance or Legal
Department with questions on total contract value.
All purchases in this category require a W-9 from the vendor.
2.3 Food and Beverage Purchases
Generally, consuming food and beverages at public expense will be
discouraged. The consumption of nourishment is ordinarily regarded as
private and personal and not a public activity. (This includes light snacks.) In
the occasion where food and beverages are approved for purchase, in all
circumstances the department head and/or the City Manager must pre-
approve the purchase(s) and the department must have adopted budget
appropriations.
The following outlines circumstances when the City will provide for the
consumption of food and beverages:
1. Meal reimbursements while in travel status. Please refer to the City of
Port Townsend Personnel Policy Manual, Section 5.7 for meal per diem
policies.
2. Light refreshments and/or meals may be purchased by the City when:
2021 Budget Section 5 - Page 64 of 103
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• Employees or officials attend a special meeting, training, or similar
circumstance where the purpose of the event is to discuss City
business, AND
• It provides benefit to the City, AND
• The refreshments are an integral (necessary) part of the meeting or
training session for the employee or official to receive the full
benefit of the meeting and/or training. (e.g., a working breakfast,
lunch, or dinner), AND
• The meeting or training session takes place away from the
employee or official’s regular workplace, AND
• Receipts for actual costs of the refreshments/meals are kept with
documentation of who was in attendance and the purpose of the
meeting or training session.
3. In emergency situations when a department head determines that
employees or intergovernmental employees performing critical City
functions must remain at their workplaces, providing
refreshments/meals will be allowed if the department head pre-
approves the purchase.
4. Meals and/or refreshments for employee, official, volunteer, wellness,
public, or occasional appreciation events when:
• The City Manager and/or department head has approved the
purchase(s) in advance and documentation of such is evident, AND
• Receipts for actual costs are kept with documentation of who was
in attendance and the purpose of the event, AND
• The meal/refreshment purchases for the event is approved through
budgeted appropriations.
Prohibited purchases of refreshments include the following circumstances
and will not be reimbursed by the City:
1. Meals and/or refreshments that were not pre-approved by the
department head and/or the City Manager.
2. Meals and/or refreshments that were not approved in budgeted
appropriations.
3. Purchase of alcoholic beverages.
Tips & FAQs
Q: My department is having a
regular staff meeting. I want to
treat my staff for a job well done.
Can I use City funds to purchase
pizza for my staff and serve it at
our regular meeting?
A: The quick answer is NO, if the
meeting is scheduled during
regular business hours at the
place of business. Although the
purpose of the meeting is to
discuss City business, providing
pizza is not an integral part of the
meeting.
Some exceptions may be made.
For example, if the Dept. Head
has budgeted staff recognition in
the annual budget and the
appropriations were approved by
City Council, then it would be
appropriate to buy pizza for staff.
As noted in the first paragraph of
Section 2.12, consuming food
and beverages at public expense
is discouraged.
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14
2.4 Piggybacking (State Contracts and Interlocal
Purchasing Agreements)
State Contract Piggybacking Process
The City has signed a master contract with the Washington State
Department of Enterprise Services (DES) to use the State’s contracts for
goods and services. When using a State contract, we are “piggybacking” off
their competitive process, eliminating the need to perform our own. The City
encourages the use of these contracts whenever possible.
Task Action
1. Review State contract
website for piggybacking
requirements
Contact Finance Department with
process questions
2. Contact vendor to verify
they will honor State
contract pricing
Obtain details regarding all aspects
of purchase, including invoicing,
availability, delivery, etc.
3. Contact Finance Dept. Finance or Legal Asst. will develop a
purchase order for the good/service
if contract value > $10,000 or
otherwise required by the vendor
3. Contact buyer to place
order
It is highly recommended
that all agreements to
use the State pricing are
documented in writing
Place order and process invoice for
payment.
Provide Finance Department with
BARS and State contract number for
purchase order
State contracts include standard terms and conditions. When piggybacking
off a State contract, all State contract terms and conditions apply. Contact
the Legal Department if any contract terms do not suit the City’s needs. Only
certain particulars can be changed, such as quantity and delivery terms.
Interlocal Purchasing Agreements
The process described above for State contracts can also be used to
purchase goods and services through other agencies’ contracts. However,
the following additional steps must be taken by City staff:
1. Read the other agency’s contract carefully to confirm that it allows
other agencies to use it.
2. Document that the purchase was made according to the other
agency’s bidding requirements and our bidding requirements.
Contact the Legal Department for assistance. This is best done by
Tips & FAQs
Q: How do I find what contracts
the State has available to use?
A: Visit the Department of
Enterprise Services’ website:
http://www.des.wa.gov/services
/ContractingPurchasing/CurrentC
ontracts/Pages/default.aspx
Tip
Some vehicles and heavy
equipment purchased through
the State require a State PO prior
to purchase.
Tip
State contracts typically have
good pricing. However, keep in
mind that they may not always
be the lowest cost option. These
contracts offer a good starting
point in the quote process.
Tip
Advertising:
Advertising requirements are
found in the following codes:
RCW 39.80.030 – Architectural
and Engineering Services
RCW 35.23.352(1) – Public Works
RCW 39.04.155(2)(a) – Public
Works Small Works Roster
2021 Budget Section 5 - Page 66 of 103
15
requesting and retaining copies of all bid documents from the other
agency.
3. Confirm that the City has a current interlocal purchasing agreement
with the agency before making the purchase.
4. If we do not have an agreement, contact the purchasing coordinator
at the other agency to request one. Contact the Legal Department
for assistance in processing the agreement.
Note: Be particularly careful about documentation when piggybacking off a
contract from an out-of-state agency or a different type of agency (for
example, a school district or port district). The authorization limits shown on
the matrix at the beginning of this manual apply to purchases through State
contracts and Interlocal Agreements.
2.5 Public Works
Bid Limit:
According to RCW 35.23.352, a second-class city, such as Port Townsend,
may construct a public work by contract or by day labor (City staff) without
calling for bids when the estimated cost of the work will not exceed $116,155
if more than one trade is involved or $75,500 if a single trade is involved.
When the cost of a public work exceeds these figures, the project should be
done by contract through formal sealed bidding, except that the City may
use the small works roster process for projects up to $350,000.
Determining the Cost of a Public Work:
The total construction cost of each project must be estimated in order to
correctly apply bid limit dollar amounts to determine if a public works project
must be competitively bid. This estimate may be prepared by an outside
third party; however, the final cost estimate must be validated by the City.
The total construction cost (estimated as if the project were to be bid) should
include materials, supplies, equipment, and labor for that project AND
applicable sales and use taxes. However, the value of volunteer labor,
donated materials, or donated equipment need not be included in the cost
estimate for a public works project, as these are not a cost to the City.
For projects completed by any means other than a contract or small works
roster process (for example, using City workers) having an estimated cost
exceeding $25,000, the City must publish a description of the project and its
estimated cost in the official newspaper at least fifteen days before
beginning work, as required by RCW 39.04.020.
Tips & FAQs
Q: What is a public work?
A: According to the American
Public Works Association, “public
work” is the combination of
physical assets, management
practices, policies and personnel
necessary for government to
provide and sustain structures
and services essential to the
welfare and acceptable quality of
life for its citizens. The projects
are financed and constructed by
and/or for the government.
Q: What is ordinary
maintenance?
A: According to WAC 296-127-
010(7)(b)(iii), ordinary
maintenance is defined as work
not performed by contract that is
performed on a regularly
scheduled basis (e.g., daily,
weekly, monthly, 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 the
asset so that repair does not
become necessary.
Q: A contractor has requested a
deposit or advance before
starting work. Is this okay?
A: The City can only pay for work
that has been completed. We
cannot advance a contractor
funds to purchase materials for a
public works project.
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16
Bid Splitting:
RCW 35.23.352(1) prohibits the division of a project into units of work or
classes of work to avoid the restriction on work that may be performed by
day labor on a single project.
Small Works Roster:
When the estimated cost of a public works project is $350,000 or less, the
City may follow the small works roster process for construction of a public
work or improvement as an alternative to the general competitive bidding
requirements, in accordance with RCW 39.04.155. The City of Port
Townsend has contracted with the Municipal Research and Services Center
of Washington (MRSC) for use of its statewide electronic database for small
public works contractors, vendors, and consultants.
Publication:
At least once a year, on behalf of the City, MRSC publishes notice in local
newspapers of the existence of the rosters and solicits the names of
contractors for the rosters. Responsible contractors can be added to the
appropriate MRSC roster(s) at any time that they submit a written request
and necessary records. The City may require contracts to be signed when
project awards are made using a small works roster.
2.6 Limited Small Works Process (Public Works Projects
under $50,000)
If a public work, construction, alteration, repair, or improvement project is
estimated to cost less than fifty thousand dollars ($50,000), the City may
use the limited public works process instead of formal, competitive bidding,
as provided in RCW 39.04.155(3).
Process:
1. Develop a scope of work describing the nature of the work to be
performed and materials and equipment to be furnished. Detailed plans
and specifications need not be included in the invitation.
2. Solicit at least three contractors on the MRSC Small Works Roster for the
applicable category or categories. Requests for estimates should include
the date, time, and location to return the estimate. Notify contractors
that:
a. they must pay prevailing wage;
b. the City must equitably distribute opportunities among
contractors in the geographic area;
c. the City will require a performance bond and a payment bond,
each for the total cost of the project; and
Tips & FAQs
Q: The contractor I’m hiring
doesn’t want to use our contract
form. Is this okay?
A: You can forward a contractor-
provided contract to the Legal
Department for review; however,
we prefer to use City forms
whenever possible. In some
cases, such as formally bid
projects, we must use the
contract form provided to bidders
with the solicitation.
Developing Scope of Work:
Things to consider when
developing your scope:
• Hold the contractor
accountable.
• Be precise. Avoid ambiguity.
• Use the active voice (i.e., “The
Contractor will or shall”).
• Due dates & deliverables.
Other considerations when
developing the contract:
• Term of contract or period of
performance.
• Compensation and payment.
• Payment terms.
Duration of Contracts:
Every City contract should state
the start and end dates. End
dates for some public works
contracts will be based off the
Notice to Proceed date.
2021 Budget Section 5 - Page 68 of 103
17
d. the City will hold 5% retainage until releases are received from
the State (RCW 60.28.011), unless waived by staff member with
contract signing authority.
Note: The City staff member with contract signing authority
may waive the bond and retainage requirements; however,
contractors must be notified about this waiver in the request for
estimates and/or advertisement for the project.
Note: If payment and performance bonds are required, the
contractor may choose to have 10% retainage held instead of
obtaining bonds.
3. Determine the lowest responsive, responsible bid.
4. Send the Legal Assistant copies of all estimates or a list of all contractors
contacted and their bid amounts. (We are required by law to maintain a
list of contractors contacted under the limited public works process.)
5. The Legal Assistant will make sure the contractor meets all bidder criteria
and will draft a contract.
6. If project total is over staff signing authority, contact the City Clerk to
schedule contract approval on an upcoming City Council agenda.
7. After Council approval, send the draft contract to the contractor along
with a request for items identified by the Legal Assistant (for example,
W-9 and proof of insurance).
Note: All projects require a W-9 from the contractor.
Alternative to Process:
Local governments may waive retainage but must assume liability of
contractors for non-payment. The local government has the right of
recovery from the contractor.
2.7 Small Works Roster Process (Public Works Projects
$350,000 or less)
If a work, construction, alteration, repair, or improvement project is
estimated to cost $350,000 or less, the small public works process may be
used instead of formal, competitive bidding, as allowed by RCW
39.04.155(1).
Process:
1. Develop a scope of work describing the nature of the work to be
performed and materials and equipment to be furnished. Detailed plans
need not be included be included in the invitation.
Tips & FAQs
Equitable Distribution:
“Equitably distribute” means that
the City may not favor certain
contractors on the roster over
other contractors on the roster
who perform similar services.
Projects $250,000-$350,000:
If the estimated cost of the work
is $250,000 to $350,000, the City
may choose to solicit estimates
from less than all appropriate
contractors on the roster but
must notify the remaining
contractors on the roster that
estimates on the work are being
sought. The City can choose to do
this by:
Publishing notice in a legal
newspaper in the general
circulation in the area where the
work is to be done
Mailing a notice to these
contractors; or
Sending a notice to these
contractors by email.
Access to the Small Works
Roster is available:
http://www.mrscrosters.org/
2021 Budget Section 5 - Page 69 of 103
18
Note: For projects totaling $250,000-$350,000, all contractors in the
applicable category must be notified that the project is being bid, even if
they are not invited to bid.
2. Contact at least five contractors on the MRSC Small Works Roster for
the applicable category or categories. Requests for estimates should
include the date, time, and location to return the estimate. Notify
contractors that:
a. they must pay prevailing wage;
b. the City will require a payment bond and a performance bond,
each for the total cost of the project; and
c. the City will hold 5% retainage until releases are received from
the State (RCW 60.28.011).
Note: The City staff member with contract signing authority
may waive retainage requirements; however, contractors must be
notified about this waiver in the request for estimates and/or
advertisement for the project.
Note: For projects totaling $150,000 or less, the contractor
may choose to have 10% retainage held instead of obtaining bonds.
Note: The city will retain the right of recovery from the
contractor if retainage is waived.
3. Determine the lowest responsive, responsible bid.
4. Send the Legal Assistant or Engineering staff (for capital projects) the
estimate for the lowest bid and expected project dates. (The City’s
“Small Works less than $350,000 Documentation Form” may be used.)
5. The Legal Assistant or Engineering staff will make sure that the
contractor meets all bidder criteria and will draft a contract.
6. Contact the City Clerk to schedule the contract approval for an upcoming
City Council meeting.
7. Draft agenda bill and resolution, if applicable, and send to City Attorney
for review.
8. After Council approval, send the draft contract to the contractor along
with a request for items identified by the Legal Assistant or Engineering
staff, such as proof of insurance and a W-9.
2.8 Formal, Competitive Bid Process (Required for Public
Works Projects over $350,000)
Formal, competitive bidding must be used for all public works projects over
$350,000; however, it may also be used for any projects below this
threshold. Competitive bidding is designed to prevent favoritism in
awarding public work contracts and to enable local governments to obtain
Tips & FAQs
Deadlines for estimates:
The statutory requirement of 13
days’ advertising for a public
works project in a formal bid
process does not apply to small
works roster or limited public
works process; advertising is not
required. However, depending
on the complexity of the project,
it is suggested that at least 7 to
14 days be allowed for
contractors to submit a proposal,
so they have adequate time to
research the specifications
Contractor requirements for
formal bidding at time bid is
submitted:
• Bids must be sealed when
submitted to City
• Bids should be labeled on the
envelope with the bidder’s
name and project identification
• Bid must include a 5% deposit
in the form of a cashier’s check,
postal money order, or surety
bond
• Include all applicable taxes in
bid amount
• Complete and sign bid proposal
• Meet all responsible bidder
criteria in RCW 39.04.350
• Meet all supplemental bidder
criteria, if any
• If project is $1 million or more,
provide a list of all
subcontractors for HVAC,
plumbing, and electrical work
within one hour of bid opening
(RCW 39.30.060)
2021 Budget Section 5 - Page 70 of 103
19
the best work or supplies at the most reasonable prices. It is also designed
to provide a fair forum for bidders and to protect the public interest.
Bidding process:
1. Coordinate with Accountant in Finance if using grant or federal
funds.
2. Draft or work with consultant to draft bid package and send to City
Attorney for review.
3. Draft a notice to bid, stating the nature of the work.
4. Notify bidders that bids must be sealed, and a 5% bid deposit is
required, in the form of a cashier’s check, postal money order, or
surety bond.
5. Have the notice to bid published in the City’s official newspaper
(currently The Leader) at least 13 days prior to the date bids are
due. Staff may choose to publish notice in additional newspapers,
such as the Daily Journal of Commerce.
6. Post the bid on Builder’s Exchange.
7. City Administration receives and date and time stamps sealed bids.
8. Hold a public bid opening after the bid deadline closes.
9. Identify the lowest responsive, responsible bidder.
Note: If the contract is not awarded to the lowest bidder, a full and
complete statement of the reasons for selecting another bidder
must be prepared, approved by the City Manager, and retained in
the file. See RCW 35.23.352(2) or Section 2.15.
10. Notify the City Clerk to add approval of the project contract to an
upcoming City Council agenda.
11. Draft an agenda bill and resolution, if applicable. Ask the City
Attorney to review.
12. Following Council approval, ask the Engineering Dept. (capital
projects) or Legal Assistant (other projects) to draft a contract.
13. Send draft contract to contractor with request for additional items
identified by Engineering staff or the Legal Assistant.
14. After the contract has been fully signed, send a copy to the
contractor and return all bid bonds, except for the one submitted
by the successful bidder.
2.9 Equipment Purchases Including Installation
RCW 35.23.352(1) prohibits the division of a public works project into units
of work or classes of work to avoid the restriction on work that may be
performed by day labor on a single project.
Occasionally projects include the direct purchase of equipment separate
from the installation. For example, the City purchases equipment for
Tips & FAQs
Contractor requirements after
selection as lowest bidder:
• Pay prevailing wage
• Obtain performance bond on
City-issued form for 100%
contract price
• Obtain payment bond on City-
issued form for 100% contract
price
• Provide proof of insurance and
endorsement naming City as
additional insured
• Have an Intent to Pay
Prevailing Wage approved by
L&I before the City will make
any payments
• Have an Affidavit of Wages
Paid approved by L&I before
the City will make final
payment.
• Pay all applicable taxes
• Provide all required
information on the project to
the Department of Labor &
Industries, Employment
Security Department, and
Department of Revenue.
Tip
If a project uses federal highway
funding, check the grant
agreement carefully for all
requirements. These projects
require that the notice to bid be
published at least 21 days before
the bid deadline.
Tip
If federal funds are involved, all
bid specifications and contracts
shall include the Davis-Bacon Act.
2021 Budget Section 5 - Page 71 of 103
20
$50,000 off a State contract, and the installation is estimated to cost
$25,000.
How do we bid this project?
Because we cannot split public works into units to avoid the bidding process,
we must combine the cost of the two purchases and treat them as one to
establish the “project cost.” In this example, the cost of the entire project is
$75,000 (equipment @ $50,000 + installation @ $25,000), which exceeds
the City’s limited public works bid threshold of $50,000. Therefore, the
public work installation must be awarded using the small works process or
formally bid (see Sections 2.7 and 2.8 above). The purchase of the
equipment can be made using the State contract (see Section 2.4 above).
What kind of contract do we use?
For this project, because the public works installation is under $350,000, we
would use a small public works contract. Usual contract requirements that
apply to small public works projects apply to this project. Because the total
project cost is $75,000, this contract would have to go to City Council for
approval.
There are so many variables to this type of purchase that it would be difficult
to highlight every possible scenario. Please contact the Finance Department
or Legal Department for assistance.
Approval Process:
Refer to the Public Works section of the matrix at the beginning of this manual.
2.10 Unit Priced Contracts
RCW 35.23.352 allows the City to use unit priced (or on-call) contracting for
public work projects that are expected to happen on a recurring basis, such as
tree trimming, road resurfacing, or public facility maintenance. Unit priced
contracts means a competitively bid contract in which public works are
anticipated on a recurring basis to meet the business or operational needs of the
city or town, under which the contractor agrees to a fixed period indefinite
quantity delivery of work, at a defined unit price for each category of work.
Whenever possible, the city must invite at least one proposal from a certified
minority or women contractor who otherwise qualifies.
Unit priced contracts must be executed for an initial contract term not to exceed
three years, with the city or town having the option of extending or renewing the
unit priced contract for one additional year.
Invitations to bid for these contracts shall include, for purposes of the bid
evaluation, estimated quantities for the anticipated types of work and specify how
Tips & FAQs
Determining the total cost for
an equipment purchases
with installation:
Equipment & materials cost
+ Cost of installation =
Total project cost
Tip
All public works, including
maintenance, when performed
by contract, shall comply with
RCW 39.12.020 as it pertains to
prevailing wage requirements.
According to RCW 39.04.010 (4),
there are clearly two categories
of work that must comply with
prevailing wage requirements:
(1) public works and (2)
maintenance when performed by
contract.
Tip
When the City executes any
public work by any means other
than by contract or small works
roster, it must keep a full, true,
and accurate account and record
of the costs of executing such
work as prescribed in RCW
39.04.070.
Prior to commencement of the
public work project, the Legal
Assistant, upon request, will
create an encumbrance number
(purchase order number) for use
in coding all costs associated with
the project.
2021 Budget Section 5 - Page 72 of 103
21
the City will issue or release work assignments, work orders, or task
authorizations based on the hourly rates or unit prices bid by the contractor.
Contracts must be awarded to the lowest responsive, responsible bidder.
Unit priced contractors shall pay prevailing wages and update rates annually.
Intents and affidavits for prevailing wages paid must be submitted annually for
all work completed within the previous twelve-month period of the unit-based
contract.
Note: The City is also allowed (by RCW 39.10.420) to obtain public works services by job
order contracts; however, these contracts are for a broader scope than unit priced contracting and
require that 90% of the work be performed by subcontractors. Please consult with the City
Attorney for more information.
2.11 Services
There are three types of services that the City may need to obtain:
1. Professional services (also called personal services) are provided by
independent contractors with specialized knowledge, advanced
education, professional licensing, or certifications; the primary service
provided is mental or intellectual, involving the consistent exercise of
judgment and discretion.
2. General services (also known as purchased services) include all service-
related work not considered a public work or professional service. Most
often these are routine in nature (i.e. yearly, monthly, weekly, etc.).
Examples include courier services, weeding, and vehicle inspection
services. State law does not require a competitive process for the
selection of general services, with the exception of the City newspaper.
3. Architectural, engineering, land surveying, and landscape architecture
services (A&E) are addressed in Section 2.12 below. Section 2.11 does
not apply to A&E services.
The City uses MRSC’s Consultant Roster, which distinguishes architectural
and engineering services as defined in RCW 39.80.020 from other consulting
services. Consultants can be added to the appropriate roster when they
submit a written request and necessary records to MRSC. The City reserves
the right to publish an announcement on each occasion when professional
or other services are required.
To ensure a more competitive process, the City has adopted tighter
standards for selection of service providers than required by State law.
Unless the City Manager approves in writing an exemption based on the best
interests of the City, staff shall follow these guidelines for selection of
professional or general services:
Tips & FAQs
Examples of general services:
• Customized accounting
software and ongoing support
• Landscaping, building, and
grounds maintenance
• Snow and ice removal
• Garbage collection and
disposal (Solid waste
collection and disposal
contracts do not have to be
bid. An RFQ/RFP process as
noted in RCW 35.21.156 can
be used.)
• Office equipment
maintenance
• Official newspaper
Formal competitive bidding for
general services:
1. Prepare a formal solicitation
document, including
description of project
requirements and proposal
evaluation criteria.
2. Publish legal notice in
newspaper.
3. Develop bidder’s list of firms
responding to solicitation.
4. Develop score sheets to be
used by evaluators (if
applicable).
5. Send the solicitation to at
least five firms or individuals.
6. Provide answers to bidder’s
questions via addenda.
7. Require sealed bids and a
public bid opening. Date and
time stamp all bids received.
8. Evaluate proposals according
to score sheet.
9. Negotiate contract with
lowest responsive,
responsible bidder.
2021 Budget Section 5 - Page 73 of 103
22
• Under $5,000 – No competitive process required. It is still incumbent on
the department to ensure that the price is reasonable, and the provider
is qualified. It is recommended to request prices, schedules, and
qualifications from three consultants on the MRSC Consultant Roster.
• $5,000 to $9,999 – It is highly recommended to request prices,
schedules, and qualifications from at least three consultants on the
MRSC Consultant Roster.
• $10,000 to $19,999 – Request proposals from at least three consultants
on the MRSC Consultant Roster (with one having a MWDBE classification
when possible) or use an RFP/RFQ process.
• $20,000 or more – Formal advertised RFP or RFQ process
recommended.
Note: Some general services, such as landscaping work, require payment
of prevailing wages. Contact the Legal Department with questions.
Contract Award Process:
1. Develop scope of work.
2. Determine budget amount for work.
3. If grant funds are involved, check the grant agreement requirements.
4. Obtain proposals or conduct formal bidding as required above.
5. Evaluate the proposals and negotiate a contract with the lowest
qualified, responsible bidder.
6. If Council approval is required, contact City Clerk for meeting date. Draft
agenda bill and resolution, if applicable, and send to City Attorney for
review.
7. After Council approval (if required), contact the Legal Assistant with a
copy of the estimate and other relevant information, such as project
start and end dates.
8. Legal Assistant will prepare a draft Professional Services Agreement.
9. Send contract to service provider for review and signature, along with
request for documents identified by Legal Assistant, such as W-9.
10. Forward signed contract and additional documents to Legal Assistant for
processing.
11. Forward fully signed contract to contractor and arrange for project
start.
Approval Limits:
For the approval limits, refer to the Services section of the Purchasing Matrix
at the beginning of this manual.
Tips & FAQs
Examples of Professional
Services:
Programmers, accountants,
attorneys, physicians,
consultants, graphic artists
Examples of A&E Services:
Engineers, land surveyors,
architects & landscape architects
A&E Requests for Proposals
(RFPs) must, at a minimum,
include:
1. Statement of need (scope)
2. Estimated schedule
3. Evaluation criteria
4. Proposal elements
5. Submittal deadline
6. Standard terms & conditions
Advertising:
Advertising requirements are
found in the following codes:
RCW 39.80.030 – Architectural
and Engineering Services
RCW 35.23.352(1) – Public Works
RCW 39.04.155(2)(a) – Public
Works Small Works Roster
2021 Budget Section 5 - Page 74 of 103
23
2.12 Purchases of Architectural & Engineering Services
Architectural, engineering, land surveying, and landscape architecture
services (frequently referred to as “A&E”) are to be acquired under the
authority and procedures outlined in chapter RCW 39.80.
RCW 39.80.030 requires that the City publish advance notice of its need for
A&E services. The City may comply with this section by (1) publishing an
announcement on each occasion when professional consultant services are
required or (2) announcing generally to the public its projected requirements
for any category or type of professional service.
A&E consultants are initially selected based upon their qualifications, rather
than price (see RCW 39.80.050). The City will negotiate a contract with the
most qualified firm at a price that the City determines is fair and reasonable.
In making its determination, the City shall consider the estimated value of
the services to be rendered, as well as the scope, complexity, and
professional nature of the project. If the City is unable to negotiate a
satisfactory contract with the selected firm for a price the City determines to
be fair and reasonable, negotiations shall be terminated, and the City shall
begin negotiations with the next highest qualified firm. There are two ways
to select an A&E firm based upon their qualifications:
1. Roster statement of qualifications (SOQ) review – Select three or
more consultants from the MRSC Consultant Roster in the relevant
service category and evaluate their qualifications. Documentation of
the three reviews is required. Minority-owned, women-owned, and
veteran-owned firms must be given the maximum practicable
opportunity to compete for these contracts.
2. Project-specific request for proposals (RFP) – Use the MRSC
Consultant Roster to send out an RFP and request for qualifications
(RFQ) to consultants in the relevant service category. Minority-
owned, women-owned, and veteran-owned firms must be given the
maximum practicable opportunity to compete for these contracts.
Contract Award Process:
1. Develop scope of work
2. Determine budget amount for work
3. If grant funds are involved, check the grant agreement requirements
4. Public advance notice of need for services, if not already done
5. Obtain proposals or conduct formal solicitation, as described above
6. Evaluate proposals and/or statements of qualifications and select the
most highly qualified firm
7. Negotiate final project scope and fees with selected firm
Tips & FAQs
Q: What is the difference
between an RFP and an RFQ?
A: An RFP will typically focus on a
specific project and includes price
as one of the submittal
requirements and evaluation
factors.
An RFQ does not have price/cost
considerations and is dependent
on qualifications only. An RFQ is
commonly issued for architects
and engineers per RCW 39.80. An
RFQ can be used for specific
projects when hiring an A&E firm
but will not include price/cost as
one of the evaluation factors.
Sample evaluation criteria for
RFPs:
1. Experience with project type
2. Quality of previous
performance
3. Ability to meet contract
deadlines
4. Responsiveness to solicitation
requirements
5. Compliance with laws relating
to contracts or services
6. References
7. Availability for the project
8. Financial capacity
9. Licensing and certification
10. History of errors and
omissions
11. Construction change order
history
2021 Budget Section 5 - Page 75 of 103
24
8. If project total is over City Manager signing authority, contact City Clerk
to add contract approval to upcoming City Council agenda
9. After Council approval (if applicable), request that Legal Assistant draft
professional services agreement
10. Obtain consultant’s signature on agreement, along with proof of
insurance, professional certification (if applicable), and W-9
11. Send documents to Legal Assistant for City signatures and processing
Approval Limits:
Refer to the matrix at the beginning of this manual.
2.13 RFPs and RFQs
Request for Proposals:
A Request for Proposals (RFP) is a method of soliciting competitive proposals
for a defined scope of work. The proposals would normally include factors
to measure qualifications, delivery, and service reputation, as well as price.
An RFP is a formal invitation from the City to a company to submit an offer
to provide a solution (or proposal) to a problem or need that the City has
identified. The supplier’s experience, qualifications, and solution may take
precedence over the cost proposal to the City.
Elements of an RFP:
1. Purpose of RFP (brief description of project)
2. Project background
3. Scope of work or statement of need
4. Goals and objectives
5. Minimum qualifications
6. Technical requirements (if any)
7. Schedule
8. Estimated project budget & request for cost proposal
9. Submittal requirements, including deadline
10. Evaluation process and criteria
11. Insurance requirements
12. Funding sources (if applicable)
Evaluation criteria for the submitted proposals should relate to the project’s
scope of work and stated objectives and should be clearly communicated
with the proposers.
Request for Qualifications:
A Request for Qualifications (RFQ) is a method of soliciting competitive
proposals that considers and evaluates companies on the basis of
demonstrated competency and qualification rather than price. This process
Tips & FAQs
Q: State law does not require any
formal competition for services.
Why do I have to do an RFP/RFQ?
A: Its true, State law does not
require competition for services.
However, City policy is more
restrictive than that of the State.
2021 Budget Section 5 - Page 76 of 103
25
is typically used for architectural and engineering services where price is not
a consideration. An RFQ will generally result in negotiations.
Elements of an RFQ:
1. Project background and scope of services
2. Project budget and source of funding
3. Schedule
4. Minimum qualifications
5. Submittal requirements, including deadline
6. Selection process/evaluation criteria.
Information request of the respondents may include list of principals,
previous projects, number of employees, and licenses or certifications.
Depending upon the complexity of the project, a typical RFP or RFQ takes
around 6-8 weeks to complete.
Process for RFPs or RFQs:
Task Action
1. Identify need Develop scope of services
2. Determine the estimated cost Confirm sufficient budget exists and
identify funding source(s)
3. Identify grants or federal funds Notify Finance Dept. (Accountant)
4. Develop draft RFP/RFQ Considerations:
• Schedule
• Scope of services
• Qualifications
• Selection process & evaluation criteria
• Submittal requirements & deadline
• Proposal validity period
• Term of contract
5. Finalize RFP/RFQ Contact City Attorney for review, then
finalize RFP/RFQ
6. Identify appropriate roster
category
Identify roster category and companies
7. Advertise, publish, and notify • Advertise
• Publish RFP on City's website
• Email notification to recommended
roster participants
8. Evaluate proposals Department to identify selection
committee
9. Conduct interviews Department to schedule
10. Identify "apparently successful
proposer"
Seek management approval to negotiate
with "apparently successful proposer"
2021 Budget Section 5 - Page 77 of 103
26
11. Negotiate contract Goal: reach a mutually advantageous
position on issues of concern while
fulfilling requirements of contract
12. Award contract Prepare council agenda materials, if
applicable, and contact Engineering or
Legal Assistant for draft contract when
approved
2.14 Bid Opening Process
Bid Due Dates
Time is of the essence. It is important to make the bid submittal deadline
clear in the bid documents. For example: “The bid form will be received up
to 3:00 p.m. on April 27, 2020. Bids received after that date and hour, based
on the time on our atomic clock, will not receive consideration.” For
example, if a bid is due at 2:00 P.M., a bid received at:
• 1:59 p.m. is on time
• 2:00 p.m. is on time
• 2:00:01 p.m. is late
If a bidder insists on submitting a bid after the deadline and leaves it, do not
open it. Make a photocopy of the bid envelope with the time stamp and
immediately return the bid by certified mail, return receipt requested.
Equal Treatment of Bidders
Avoid giving bidders an advantage to include: permitting bidders use of
private offices and conference space for finalizing bid prices, providing
envelopes for bidders to use in sealing the bid, or permitting bidders to use
the agency’s telephone, computer, fax, or photocopier. Avoid disclosing the
names of bidders or the total number of bidders until the bid opening.
Receiving Bids Checklist
• Is the bid in writing? Do not accept bids by fax, email, telephone or
orally unless the bid solicitation allows for it (generally not allowed
for formal, competitive bidding).
• Did the bidder attend the mandatory pre-bid meeting, if applicable?
• Is the bid envelope sealed? Offer tape if not sealed.
• Is the correct information on the envelope?
• Is the time stamp clear?
• Is the time stamp prior to deadline?
• All received bids should be kept in a secure and centralized location
not accessible to other bidders.
2021 Budget Section 5 - Page 78 of 103
27
Withdrawal & Modification of Bids
• A request to withdraw or modify the bid in advance of the deadline
may be received verbally or in writing. If unfamiliar with the bidder,
ask for identification.
• Make a photocopy of the face of the bid envelope, ensuring the bid
receipt time shows up on the copy.
• Have the bidder sign the photocopy with the following “Received by
(signature, printed name, date, time).”
• Keep the original signed photocopy.
• Remove the bid receipt stamp or cross it out on the face of the bid
envelope.
• Return the bid to the bidder, notifying the bidder that if they choose
to resubmit the bid, it must be received prior to the bid submittal
deadline and stamped in again with a new time and date stamp prior
to the deadline.
Modifying Bids from a Distance
The bidder may submit additional information modifying a previously
submitted bid if the modification is:
• Received in writing.
• Signed by an authorized representative of the bidder.
• Received prior to the bid receipt deadline.
• In a sealed envelope.
• Clear in stating what prices are being changed.
Subcontractor’s List
Due either with the bid or within one hour of the bid submittal deadline
(RCW 39.30.060).
Opening the Bids
Bids should be opened in a public meeting. Read each bid before opening
the next one. Consider using one person to open the bids and a second
person to read. The project manager staff should record the prices on a bid
tabulation form. The bid reader should state publicly all the information
noted in looking at the bid, without passing judgment whether it is
responsive or non-responsive, to include:
• Name of bidder
• Is bid form signed?
• Bid amount
• Is bid guaranty included?
• Are addenda acknowledged?
• Is subcontractor’s list included?
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The bids will be evaluated for responsiveness after the bid opening. If a
contractor wishes to review the bids after the bid opening, allow only one
contractor at a time to review the bids in a monitored environment.
2.15 No Bids or Non-Responsive/Responsible Bids or
Submittals
No Bids or Submittals Received:
As provided in RCW 35.23.352(1), in the event the City does not receive any
bids or submittals on the first call, the City has three options: (1) re-advertise
and make a second call, (2) enter into a contract with any qualified
contractor, or (3) purchase the supplies, materials, or equipment and
perform such work and improvement by day labor (City staff).
Before determining which option would best fit, the department should
conduct a survey of the registered bidders or proposers or any other known
interested parties to determine: 1) why they didn’t they submit, 2) whether
the City’s document too restrictive or too complex, 3) if there ample time to
submit, and 4) if there too many open questions before the due date. The
City Attorney may be consulted for additional assistance in determining the
best option.
Determining Lowest Responsible Bidder:
The City should award the contract for a public works project to the lowest
responsible bidder, unless the lowest bid is above the budget for the project.
In that case, all bids may be rejected, and the City may call for new bids.
A responsible bidder shall be a registered and/or licensed contractor who
meets the mandatory bidder responsibility criteria established by RCW
39.04.350 and who meets any supplementary criteria established by the
City.
According to RCW 35.23.352(2), the City may award a contract to the second
lowest bidder if: (1) the bid is within five percent of the lowest bid, (2) the
second lowest bidder meets the same criteria as the lowest bidder, AND (3)
the City has issued a written finding to the lowest bidder within the last three
years that the lowest bidder was late, over budget, or did not meet
specifications, and the City has not found in writing that the lowest bidder
has shown how they would improve performance.
Non-Responsive and/or Not-Responsible:
The City shall draft bidder responsibility criteria that are based upon clear
business reasons, and the criteria must not be overly restrictive of the
bidding pool. Note that in Washington State, a bidder who objects to the
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supplemental bidder responsibility criteria may request that the City modify
the criteria before the bid submittal deadline.
Bids may be rejected as non-responsive for a multiple of material factors,
including lack of subcontractor’s list when required (for contracts in excess
of $1M or contracts of three or more trades), insufficient bid guarantees,
bids submitted after the deadline, qualified bids, and/or lack of
acknowledgement of addenda. In general, a material irregularity is required
before the bid may be deemed non-responsive (defined as any variance
which provides “a bidder substantial advantage or benefit not enjoyed by
others”). In the event the City receives a bid or submittal on the first call
that is deemed non-responsive or non-responsible, the department shall
consult with the City Attorney to determine whether it is a material or
immaterial irregularity. Each project will be evaluated on a case-by-case
basis.
Bid Protest:
The City follows the bid protest guidelines established in RCW 39.04.105.
2.16 Contracting 101
A contract is a written agreement between two or more people or entities
to accomplish a specific outcome. In a public purchasing context, a contract
is an agreement by a vendor or contractor to provide goods or services to
the City in return for receiving payment from the City. The following is an
overview of the contract process:
Invitation:
• A solicitation (ITB, ITQ, or RFP) is an invitation to a contractor to make
an offer.
• These are most often directed at multiple parties and outline the
needs of the City.
Offer:
• The contractor’s returned quote/bid/proposal is their offer to the
City to perform the work, outlining what and how much.
• The offer shows that the contractor is willing to agree to specific
terms.
• The offer is given to a particular party.
• The contractor has made an offer to do what the City requested for
a specific price.
Acceptance:
• The City must now accept one of the offers.
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• The acceptance is a communication showing agreement to the exact
terms of the offer or a contract.
• Contracts must show that the offer made by the contractor has been
accepted, usually by attaching the contractor’s estimate or scope of
work and fee schedule.
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3.1 Rule 171 – Sales Tax Exemptions
Normally sales tax applies to every sale of tangible personal property (and
some services) to all persons, including cities. Thus, for bid limit purposes,
the tax must be included when determining the cost of a public work or
when calculating the cost of materials, supplies, and equipment purchases
separately from a public work.
However, there are some sales and use tax exemptions for certain public
work projects. The exemptions include:
1. Labor and services rendered for the building, repairing, or improving
of any street, place, road, highway, easement, right-of-way, mass
public transportation terminal or parking facility, bridge, tunnel, or
trestle owned by a city or town which is used primarily for pedestrian
or vehicle traffic ( RCW 82.04.050(10). See also WAC 458-20-171,
nicknamed “Rule 171.”) Materials used in constructing these
projects are not exempt from the sales and use tax.
2. Labor and services for the processing and handling of sand, gravel,
and rock taken from City pits and quarries when the material is for
publicly-owned road projects ( RCW 82.08.0275 and WAC 458-20-
171 ).
3.2 Prevailing Wages
What are prevailing wages? The Department of Labor and Industries (L&I)
requires that workers be paid prevailing wages when employed on all public
works, public building service maintenance, and contracted maintenance,
based upon the classification of labor performed.
Prevailing wages are 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 and Industries for each trade and occupation
3.0 Other Considerations
Tips & FAQs
Q: Does the exemption from the
sales and use tax for labor and
services on a City street project
apply if a private contractor does
the work?
A: Yes. It makes no difference, for
the purposes of the exemption,
whether the City does the work,
or has it done by someone else.
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employed in the performance of public work. They are established
separately for each county and are reflective of local wage conditions.
What are the responsibilities of the City when contracting for public works?
The City, in awarding a contract, must make the determination of whether
that contract involves “public work” and communicate it to contractors in
the bid specifications and contracts.
What provisions must be made for prevailing wage? Awarding agencies
must stipulate in bid specifications and contracts for public work that
workers shall receive the prevailing rate of wage. Those documents must
either contain a list of the applicable prevailing wage rates or a link to the
rates on L&I’s website. If including a link, print the current rates and keep
with the project file.
What are the public building service maintenance contract requirements?
Public building service maintenance (janitorial) contracts of more than one-
year duration must include wage language recognizing the potential for
future variance in applicable prevailing wages each year after the first year
of the contract.
What are awarding agency requirements when disbursing public funds?
Agencies may not make any payments where contractors have not
submitted an Intent to Pay Prevailing Wage form that has been approved by
L&I. Agencies may not release final payment until all contractors have
submitted an Affidavit of Wages Paid form that has been certified by L&I.
The requirement to submit these forms should also be stated in the contract.
What are the contractor’s filing requirements? Public work contracts
require that each and every contractor and subcontractor on the project file
the “Statement of Intent to Pay Prevailing Wages” and “Affidavit of Wage
Paid” forms.
Is there a minimum contract amount for a contractor to file? There is no
minimum dollar contract amount. Intent and Affidavit forms are required
for every public works contract regardless of the size of the contract.
When does the contractor file an Intent? The Intent form is filed
immediately after the contract is awarded and before work begins, if that is
possible.
When does the contractor file an Affidavit? The Affidavit form is not filed
until after all the work is complete.
Tips & FAQs
Q: Do I have to include prevailing
wage rates in the contract
specifications as an attachment
or can I just put in a link to the
L&I website?
A: Per RCW 39.12.030 all bid
specifications and contracts shall
include a list of the applicable
wage rates.
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3.3 Retainage
What is the purpose of retainage? The City retains a portion of the contract
amount for public works contracts as a trust fund to pay any claims
associated with the contract and/or for payment of amounts due by the
contractor to the Department of Labor and Industries, the Employment
Security Department, and the Department of Revenue (RCW 60.28.011).
What level of retainage is required? The City generally retains 5% of the
contract amount. However, for contracts awarded by the small works roster
process and totaling less than $150,000, contractors may opt to have 10%
retained in lieu of a obtaining a performance bond. The City may
alternatively choose to waive retainage requirements for any small works
roster contracts. Retainage is not held for projects funded by federal
transportation funds.
What are the retainage options? The City retains the funds in a City fund,
unless otherwise requested by the contractor. A contractor may choose to
have the funds deposited by the City into an interest-bearing account or
placed by the City in escrow with a bank or trust company. If the escrow
option is selected, contact the City Attorney for an escrow agreement.
When can retainage be released? Retained funds will be released after final
acceptance of the project and after the City has received all releases from
the Department of Revenue, the Department of Labor and Industries, and
the Employment Security Department. Upon receipt of all releases, the
project manager should notify the Legal Assistant to release the funds. For
projects under $35,000, the retained funds will be released when the
Department of Labor and Industries has approved the contractor’s Affidavit
of Wages Paid.
Is the City liable for payment of project costs to subcontractors if waiving
retainage? Local governments may waive retainage but must assume
liability of the contractor’s non-payment. The Local government does retain
the right to recovery from the contractor.
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4.1 Risk Management Considerations
The City enters into numerous contracts throughout the year. These
contracts involve risk. City property can be damaged. Employees of the City,
contractors, subcontractors, and suppliers can be injured. Members of the
public can be harmed. These and other accidental losses can arise during
and as a result of the activities during the contract fulfillment process. The
City seeks to transfer responsibility to such events to those with whom it
contracts.
The City’s approach to contracting is designed and managed to avoid undue
exposure to risk with exceptions where it makes good business sense.
Certificates of insurance and endorsements naming the City as an additional
insured are required from all contractors and consultants who contract with
the City. Verification of appropriate insurance requirements shall be
completed prior to signing of the contract by the City. Any waiver of
insurance requirements requires the approval of the person with signing
authority for the contract (generally the City Manager). Contact the City
Attorney with questions about insurance requirements or for advice on the
risk of a requested waiver.
4.2 Payment Options
Prior to contract award, payment terms should be identified to determine
the most effective compensation method. The most common include:
Hourly/Time and Materials:
The City pays a fixed hourly rate and pays for the cost of certain specific
services and/or materials. For certain professions, such as consultants, this
is the standard option. Time and materials contracts should have a ceiling
amount or a not to exceed amount included. This type of payment term may
be used if the City is unable to clearly define the level of effort required to
accomplish the objectives. A time and materials contract places most of the
risk on the City and little on the contractor and provides no positive profit
incentive to the contractor for cost control or labor efficiency. Frequent
contract monitoring is required to ensure that the number of hours is kept
to a reasonable level.
4.0 Contract Administration
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Fixed or Lump Sum:
The contractor receives a fixed amount or lump sum payment based on
terms established in the contract. Typically, payment is tied to a completion
of agreed upon performance achievements. Other alternatives are possible,
such as progress payments made to compensate for activities conducted
over the specific period of the contract. This type of contract should
generally establish a minimum allowable level of compensation. With this
method of compensation, the City may not be required to pay if specific
terms in the contract are not met and thus the risk is placed on the
contractor.
Cost Reimbursement:
A cost reimbursement method of compensation has a higher risk for the City
because it reimburses the contractor for all costs incurred under the terms
of the contract. To prevent overpayment, allowable cost provisions should
be clearly identified. Contract managers should consider including a contract
provision for a maximum allowable compensation level for the contract
period and budget. Cost reimbursement contracts generally require more
fiscal pre-planning and monitoring than other methods.
Performance Based:
These contracts are based on attainment of a specific outcome. The rate of
compensation is generally negotiated based on cost information provided
by the contractor. Generally, performance-based contracts identify the
maximum allowable compensation. This allows the City to define the quality
of services in terms of performance standard and pay accordingly.
Performance based contracts differ from time and materials or fixed price
contracts in that if the quantifiable quality of service is low, the payment may
be reduced or withheld. This requires a higher level of reporting from the
contractor to the City. The contractor primarily assumes the risk because the
City does not pay if performance levels are not met.
4.3 Contract Execution & Administration
Contract Execution:
The contract is fully executed when all authorized parties have signed it.
Upon execution, signed copies of the contract should be provided to all
interested parties including, at a minimum, the contractor and Legal
Assistant.
Contract Administration:
Contract administration means any activity related to contracting, including
the decision to contract, contractor screening, contractor selection, contract
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preparation, contract monitoring, auditing and post contract follow up.
Typical responsibilities of the project manager include:
• Understanding the contract, including the specific contract obligations
and performance indicators by which performance will be monitored.
• Assessing the risks related to the project before soliciting proposals and
contracting to determine the extent of the monitoring required.
• Ensuring the contractor has a clear understanding of how the contract
will be managed and monitored.
• Providing the contractor with guidance and technical assistance, as
needed, to promote effective contract performance.
• Identifying the extent and source of funding for services provided.
• Monitoring the contractor’s activities to ensure quality service delivery.
Ensuring funding is used only for authorized purposes.
• Reviewing invoices and verifying that delivery of services is rendered.
• Resolving issues or problems that arise during the contract.
• Measuring and tracking satisfaction with contractor performance.
• Complying with State and City rules and regulations.
• Documenting the contract to validate that effective contract
management has occurred.
Project managers need to be mindful not to do the following:
• Instructing the contractor to begin work before the contract is executed
and approved.
• Changing the description, scope, period of performance, or cost of the
contract without processing a written amendment.
• Directing the contractor to do work that is not specifically described in
the contract.
• Signing a contractor’s contract form (some exceptions apply)
• Authorizing payment to the contractor for any work not performed
satisfactorily.
• Paying for the same or similar services more than once.
4.4 Contract Monitoring - Performance
Monitoring Contract Performance:
Monitoring means any planned, ongoing, or periodic activity that measures
and ensures contractor compliance with the terms, conditions, and
requirements of a contract. The level of monitoring should be based on a risk
assessment of the contractor’s role in delivering the services and the
contractor’s ability to deliver under the terms of the contract.
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The purpose of monitoring is to ensure the contractor is:
• Complying with the terms and conditions of the contract and applicable
laws and regulations.
• In compliance with the contract through identifying and resolving
potential problems and providing constructive, timely feedback.
• Adhering to the project schedule and making appropriate progress
toward the expected results and outcomes.
• Providing the quality of service expected.
Monitoring Activities May Include:
• Periodic contractor reporting – Require the contractor to submit
progress reports or other appropriate data or reports, based on pre-
defined criteria, and review the contractor’s reports for verification of
services provided and adherence to the contract. Substandard
performance should be identified and addressed timely and
appropriately.
• Invoice review – Compare billings with the terms agreed upon in the
contract. Ensure the costs being charged are within the contract
parameters.
• Other periodic contact with contractor – On-site visits to maintain
contact with the contractor to review progress on a regular basis. Good
contract monitoring includes a continuous dialogue with the contractor.
4.5 Contract Monitoring - Payment
Reviewing Invoices for Payment:
Contract payment is the process by which the contractor submits invoices
for reimbursement for services and receives payments. The contract
manager must carefully review the contractor’s request for payment to
verify the accuracy of all charges.
Considerations:
• Are the hours/costs commensurate with the services or deliverables
received?
• Is the service period identified on the invoice and were the services
rendered prior to contract expiration?
• Do the rates invoiced match the rates stated in the contract?
• Has the necessary documentation been included to verify charges
accurately? Is there enough money remaining on the contract?
• Reimbursable expenses. Below are the recommended reimbursable
expenses:
o Travel
o Mileage
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o Food
o Miscellaneous expenses
If charges are acceptable, the contract manager submits a claim approval
form for payment. Payment terms are 30 days from date of invoice.
4.6 Amendments & Change Orders
Amendments:
Amendments are changes to service contracts.
Changes to contracts may be processed as amendments, rather than new
contracts, but only if the changes are within the general scope of the original
contract.
Change Orders:
A change order is the formal document that alters some condition of the
contract documents. The change order may alter the contract price,
schedule of payments, completion date, terms and conditions, or the plans
and specifications. Change orders are changes to public works contracts and
reflect unforeseen conditions that must be addressed to meet the contract
requirements and without which the work requested in the original contract
could not be completed. Minor modifications that do not materially affect
the scope or cost of the contract, such as address changes or staff changes,
do not require a formal change order but should be documented in writing.
These situations should be distinguished from extra work that could stand
on its own and is outside and independent of the contract, in which case a
new competitive bid process is required. Appropriate uses of change orders
include:
Scope – Scope changes may include adding, modifying, or deleting tasks,
services, or deliverables or revising specifications. Changes to scope should
be well documented and include any additional costs associated with these
changes.
Changes that are outside the general scope of the contract or bid request
are not appropriate to award through contract change orders. Such changes
would have the effect of making the work performed substantially different
from the work defined at the time the original contract was awarded.
Terms and Conditions – Changed conditions could include price variations in
commodities.
Cost – If the cost of the contract is increased or decreased, document
reasons for change (e.g.: scope changes, changes to unit price items).
Period of Performance – An extension to the contract end date is the most
common change to the period of performance. Minor modifications that do
Tips & FAQs
Renewals vs. Year-to-Year
Contracts:
Keep in mind that including
additional periods or renewal
language in your solicitation or
contract provides for greater
continuity with terms and
conditions such as pricing, scope,
and availability. More often than
not, contractors will give
discounts for longer term
contracts.
To enter into a series of year-to-
year (or standalone) contracts,
opens up the terms and
conditions for contractors to
modify their price and
availability. Standalone contracts
require a competitive process at
each contract period and
therefore may result in higher
costs to the city.
However, if a contract includes
“options to renew” language, the
contract must be routed to
include all future renewals of the
“potential value” of the contract.
Documented Benefit to City:
All contract amendments must
have consideration for any
additional time or funds. This
means that the amendment
must state what benefit the
contractor will provide to the City
in exchange for the increased
time or payment amount.
Contact the City Attorney with
questions.
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not materially affect the scope or cost of the contract, such as address
changes or staff changes do not require a formal change order but should be
documented in writing.
Amendment and Change Order Approval:
• Amendments and change orders that do not change the total value of
the agreement contract (i.e.: a new expiration date) may be signed by
the City Manager or designee.
• Accumulated cost changes up to 10% of the original agreement or
contract amount may be approved by the City Manager or designee, if
there is budget capacity and available revenues.
• Accumulated cost changes greater than 10% of the original agreement
or contract amount must be approved by the City Council. Such approval
establishes a new agreement or contract amount against which the
above percentages apply for subsequent amendments or change orders.
• The City Council may pass a resolution on an individual project giving the
City Manager the authority to sign all amendments and change orders
within the allotted project budget, superseding the 10% limit.
To protect the City’s interests, all amendments or change orders shall be
executed in writing prior to the end of the contract period of performance
and before the contractor begins work as authorized by the amendment.
4.7 Contract Close-Out & Termination
Contract Termination:
Contracts may be terminated prior to the completion date of the contract
either for convenience of the parties or for cause. Contact the City Attorney’s
Office for guidance when considering a contract termination.
Contract termination should be done in writing and follow the process
described in the contract or as advised by the City Attorney.
Contract Close-Out Process:
Once the contract is complete, it is critical that the project manager
complete the close-out process in a timely manner and stay on a schedule.
1) Notice of Completion of Public Works Contract. Required for
projects totaling $35,000 or more. The project manager should
complete and file a “Notice of Completion of a Public Works
Contract” form with the Department of Revenue, Department of
Labor and Industries, and Employment Security Department. This
form is available on L&I’s website.
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2) Receive release letters from Employment Security Department,
Department of Revenue, and Department of Labor & Industries.
These letters will be sent either by mail or through that department’s
web portal.
3) Release retainage. Once the above-mentioned letters are received,
the project manager should request that the Finance Department
release retainage by a memo or coversheet along with a copy of the
letters received.
a) Release retainage bond. If the contractor provided a bond
instead of having the City hold retainage, the project manager
should contact the bond issuer to release the bond.
b) Escrow release. If the contractor requested that the City hold
retainage in an escrow account, the project manager should
provide a written release to the bank.
Liens
Whenever a valid lien has been filed against the retainage, the City may
only release that amount of the retainage in excess of the total amount of
the valid lien claims and an amount sufficient to defray the costs and
attorney’s fees of the claimants in foreclosing the liens.
Invoices Submitted after Close-Out Process
Invoices that are submitted after contract expiration may still be paid if the
following conditions apply:
• Invoice or pay estimate clearly shows that services were preformed prior
to contract expiration.
• Sufficient funds existed prior to close-out.
Every effort should be made to process invoices in a timely manner to
eliminate delays and extra steps in payment processing
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5.1 General Information
It is the policy of the City of Port Townsend to provide the best possible
stewardship and management of municipal assets in the best interests of the
residents of Port Townsend.
PTMC Chapter 3.44 sets forth the City’s processes for disposition of surplus
property and long-term leases. The information in this policy manual is
intended summarize the code requirements.
5.2 Declaring Surplus
A department head or operations manager may recommend that personal
or real property under his or her control is deemed no longer to have any
value and may desire to surplus that property.
• If the property has an estimated value under $10,000, the City
Manager may declare that it is surplus.
• All personal property with an estimated value greater than $10,000,
and any real property must be declared surplus by the City Council.
• All personal property acquired with utility funds may be transferred
to and used by a non-utility department if the property is of de
minimis monetary value. Disposition of utility assets must have an
administrative hearing by the City Manager.
Criteria for declaring surplus is based on one or more of the following:
• The City has or soon will have no practical, efficient, or appropriate
use for the property, nor will it have such a use for the property in
the near future.
• The purpose served by the property can be accomplished by use of
a better, less costly, or more efficient alternative;
• The purpose served by the property no longer exists as determined
by a change of policy evidenced by an ordinance or resolution of the
City Council;
• The property is damaged, worn out, or otherwise inoperable and the
cost of repairing the same is unwise or impractical.
5.0 Surplus and Disposition of
Assets
Tips & FAQs
Surplus is any City property
and/or asset that is no longer
deemed valuable or of use to the
City now or in the foreseeable
future.
Estimated value of property
should be the amount of money
or interest a third party would be
willing to pay. Estimating values
may be determined through
obtaining an estimate, an official
appraisal, an offer from another
agency, Kelly Blue Book value, or
other sources.
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5.3 Disposition of Personal Property
Departments that determine they have surplus property should first make
these items or equipment available to other City departments when
reasonable. If the item is no longer of value to the City, staff may do the
following:
• Sell or transfer the item(s) to another government agency, subject to the
public notice and hearing requirements of RCW 39.33.020 for items with
a value in excess of $50,000.
• Auction the item(s). The originating department will be responsible for
all costs associated with this option. Finance will coordinate the auction
with the department representative.
• Sell the item through a sealed bid process.
• Trade the item(s) in for new replacement equipment.
• Send the item(s) to the State surplus program.
• Donate the item(s) to a non-profit that serves or benefits low-income
persons or persons with disabilities. (Be sure to obtain a receipt for
record retainage.)
• Dispose of the item(s) in the most cost effective, efficient manner.
A department head or designee that is responsible for the disposition of
property or assets. They should sign the “Declaring Surplus Memo” to the
City Manager. The memo should be a detailed statement of the item(s),
where the asset is located, the estimated value and the recommended
disposition procedure. Send the memo to the Finance Department to
coordinate obtaining the City Manager’s or Council’s approval.
Once approval has been granted to dispose of the property, the receiving
individual or organization must sign an “As-Is/Where-Is” Statement and/or
Liability Waiver. The signed form must be forwarded to the Finance
Department for record retainage.
Within 24 hours of receipt, proceeds from any sale and sales tax collected
will be forwarded to the Finance Department to be deposited. Sales tax will
be remitted to the Department of Revenue on the next reporting cycle.
Prior to sale, remove all City logos or other markings identifying the item(s)
as City property from any vehicles and or equipment prior to sale.
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5.4 Seizure Items (RCW 69.50.505)
The Port Townsend Police Department follows their Asset Forfeiture Policy
(Policy 601) in regards to the authority and procedures for the seizure,
forfeiture and liquidation of property associated with designated offenses.
5.5 Surplus of Real Property (Land)
The City Council shall make all decisions that relate to surplusage of real
property in accordance with Chapters 35.94 and 39.33 RCW and whether
property should be designated to meet affordable housing needs and
surplused or retained for that purpose. Because real property should
perform a valuable public function, the City Council should consider both
current use and any foreseeable future use when surplusing real property.
Pursuant to PTMC 3.44, affordable housing needs will be considered before
surplusing public lands.
The City Council shall hold a duly-noticed public hearing prior to disposing of
real property or designating that the property may meet affordable housing
needs and be surplused or retained for that purpose. All procedural
guidelines shall be followed in accordance with the code.
6.1 Purchasing Cards as a Method of Payment
In accordance with RCW 43.09.2855, local governments are authorized to
use credit cards or procurement cards for official government purchases and
acquisitions.
The City of Port Townsend’s purchasing card program has been established
to provide a convenient, efficient means to purchase commodities and
services from vendors and reduce the costs associated with a purchasing
process. The City has obtained purchasing card participation in the
statewide contract with US Bank as administered by the Washington State
Department of Enterprise Services (DES). A benefit of using the contract is
that it allows the City to earn a quarterly rebate based on the volume spent
and timely payment.
6.0 Purchasing Cards
Tips & FAQs
Be mindful of your budget
appropriations when using your
purchasing card as a method of
payment.
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The program is designed to empower employees to purchase items needed
for operational City business. It is a method used to pay for purchases and
is not meant to circumvent the purchasing policies or bidding procedures.
6.2 Purchasing Card Administration
Purchasing cards (p-cards) are administered by the Finance Department.
The purchasing card program administrator maintains the accounts and is
authorized to make necessary changes and updates, corresponds with the
bank to resolve issues, orders p-cards, reconciles purchases made during the
billing cycle to the bank statement, verifies accuracy of supporting
documents and signatures, maintains records, and assures timely payment.
All purchasing cards will have the “City of Port Townsend” embossed on the
card with the cardholder’s name. It is not permitted to allow anyone other
than the cardholder to use a card to make purchases.
Approval to participate in the purchasing card program will be determined
by the applicable department head. It is recommended that employees
complete their initial probationary period before being eligible to have a
purchasing card issued to them. (Exceptions to this may be made with
authorization from the Finance Manager). Prior to releasing the purchasing
card to the employee, the cardholder will:
1. Attend training to cover the City’s purchasing policies and
procedures.
2. Attend training to cover p-card procedures for US Bank Online
purchasing card transaction management.
3. Acknowledge they have received, read and understood the City’s
Purchasing Policy and Procedures Manual by signing a Cardholder’s
Agreement Form.
Department heads or their designees will ensure employees approve their
charges and submit the proper supporting documentation, assign correct
fund and account numbers (BARS Codes) and descriptive information for
each charge, approve the charges online, print activity statements, and
submit paperwork to the program administrator in Finance within five days
of the billing cycle close date. Failure to comply with these policies and
procedures may result in suspension of an employee’s privilege of using a
City issued purchasing card. Improper use of the p-card may result in
disciplinary action up to and including termination of employment.
Tips & FAQs
CDL licenses and renewals and
work boots should be purchased
initially by the employee. The
receipt for these items should be
submitted to the employee’s
manager for reimbursement.
2021 Budget Section 5 - Page 96 of 103
45
6.3 Authorized Charges and Uses
As authorized, employees will use their p-cards at time of purchase for
operational materials, supplies, small equipment, postage, subscription
services, professional memberships, ordinary maintenance, services, CDL
physicals, and authorized business travel expenditures. (Please see the City’s
Guidelines for Employee Travel for detail on authorized travel expenditures).
Purchasing cards may be used at any vendor that accepts VISA credit.
When making a purchase:
• The cardholder must obtain a vendor’s register receipt or invoice
(Proof of Purchase). Packing slips and statements are not substitutes
for receipts or invoices.
• Register receipts and invoices should include transaction detail such
as date of purchase, a description of each item, tax, shipping, and
total. If the vendor does not issue a detailed receipt, it is the
employee’s responsibility to write a description of the purchase(s)
on the receipt.
• If a receipt is lost or the cardholder is unable to obtain a receipt, a
“Declaration of Lost Invoice” Form must accompany the reconciled
statement in place of the receipt. Employees who routinely do not
submit actual invoices/receipt may have their purchasing card
benefits suspended.
• Follow the purchasing requirements outlined in the Purchasing
Policies and Procedures Manual.
6.4 Unauthorized Purchases
Cardholders must comply with the State bidding and purchasing laws and
the City’s Purchasing Policies when using a purchasing card.
Examples of unauthorized uses and purchasing include:
• Personal purchases of any kind
• Cash advances through ATMs or banks
• Cash refunds for returned items
• Items restricted by City policy or State law, such as alcohol, tobacco,
and entertainment
• Any items from vendors restricted by the Finance Department, a
department head, or the City Manager
Examples of inappropriate uses:
2021 Budget Section 5 - Page 97 of 103
46
• Any purchase in which the purchasing card is used to circumvent City
or State polices, bid limits, or a cardholders personal purchasing
limit.
• Any purchase made on a cardholder’s account by someone other
than the cardholder.
6.5 Returns and Exchanges
Cardholders are responsible for contacting the vendor when supplies,
equipment, and services purchased with the p-card are not acceptable
(incorrect, damaged, defective, not received) and for arranging a return for
credit or exchange.
• If items are returned for credit, the cardholder is responsible for
obtaining a credit receipt from the vendor to include in the monthly
purchasing card reconciliation.
• If items need to be exchanged, the cardholder is responsible for
returning the items to the vendor and obtaining a replacement as
soon as possible.
• If items are disputed, the cardholder is responsible for resolving any
disputes directly with the vendor. If resolution is not possible,
contact the Program Administrator.
6.6 Account Maintenance
Online account maintenance:
US Bank Online account maintenance is the responsibility of the cardholder.
If an employee is locked out of their account, they should contact US Bank
directly. The customer support number is listed on the back of the
purchasing card. Please see the US bank Purchasing Card Instruction
Guidelines for online account maintenance or call the purchasing card
administrator in the Finance Department.
Name changes:
Changes to a cardholder’s name should be reported to the program
administrator. A new card will be issued in the employee’s name. The
cardholder should surrender the old p-card to his or her department head or
to the program administrator.
Lost or stolen card or fraud detection:
Cardholders are responsible for their own card security. In the event the
cardholder loses their card, suspects fraudulent activity on the card, or the
card is stolen, they should contact US Bank immediately. In addition, the
cardholder should contact the program administrator.
2021 Budget Section 5 - Page 98 of 103
47
Termination of employment or revocation of purchasing card privilege:
Cardholders must turn in their purchasing card to their department head,
Human Resources, or the program administrator in the event they terminate
their employment with the City, or they have had their purchasing card
privileges revoked.
Spending Limits:
Spending limits will be requested by the applicable department head and
approved by the Finance Department. In general, authorized spending limits
will be established as follows (single transaction limit/monthly cycle limit):
• $5,000/$5,000 – department heads and purchasing card program
administrator
• $2,500/$5,000 – department managers, supervisors, department
purchasing designees
• $1,000/$2,500 – maintenance and operator staff
• $500/$1,500 – others as assigned.
Exceptions to these general guidelines will be reviewed at the request of the
applicable department head.
2021 Budget Section 5 - Page 99 of 103
48
A&E: Architectural and engineering services; includes land surveyors and landscape architects.
Appropriation: City Council authorization to expend funds for a specific purpose.
Bid: A written proposal submitted by a vendor or contractor to furnish supplies, materials, equipment, or
services in conformity with the City’s specifications included in a request for bids by the City.
Bidding: Procedure used to solicit quotations on price from various prospective providers of supplies,
materials, equipment, or services.
Bid Evaluation: A review of bids/proposals received as a result of a competitive process to determine
bidders’ responsibility, responsiveness to requirements, and to determine the successful bidder(s).
Bid Opening: The official process in which sealed bids are opened, usually in the presence of one or more
witnesses, at the time and place specified in the invitation for bid. Each bid is logged, and bids are made
available for public inspection only after award of the contract. The bid opening must be open to the public.
Bid Deposit (also called a bid bond): A deposit in the form of a cashier's check, postal money order, or
surety bond equal to 5% of the amount of the bid. Required for all formally bid public works projects.
Bid Splitting: Breaking a public work project or purchase into segments. The City may not split a project or
purchase to avoid compliance with bidding statutes (RCW 35.23.352(1)).
Capital Equipment: Equipment of the City having an initial value of one thousand ($1,000) or more and an
estimated useful life of three or more years.
Change Order: An amendment to a public works contract, signed by both parties and outlining the mutually
agreed upon changes to contract time, payment amount, or scope of work, as applicable.
Contract: A legally binding and enforceable written agreement between two or more parties stating the
terms and conditions for an exchange of something of value (usually money, goods, or services) between
parties. The Legal Department should be contacted if there is uncertainty as to the need for a written
contract and how to go about it.
Contractor: Individual, company, corporation, firm, or combination, with whom the City develops a
contract for the procurement of goods and services.
Cooperative Purchasing (also called piggybacking): The action taken when two or more entities combine
their requirements to obtain advantages of volume purchases including administrative savings and other
benefits.
DES: Washington State Department of Enterprise Services.
7.0 Definitions and Acronyms
2021 Budget Section 5 - Page 100 of 103
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Delivery Terms: Conditions in a contract relating to freight charges, place of delivery, time of delivery, or
method of transportation.
Effective Date of Contract: The date on which the contract starts.
Emergency: Unforeseen circumstances beyond the control of the agency that present a real, immediate,
and extreme threat to the proper performance of essential functions or which may reasonably be expected
to result in excessive loss or damage to property, bodily injury, or loss of life.
Emergency Purchase: A purchase in which the normal competitive purchasing procedures have been
waived by a declaration of emergency issued by the City Council or City Manager.
Encumbrance: Interchangeable with “purchase order.”
Equitably distribute opportunities: Means that the local government may not favor certain contractors on
the appropriate small works roster over other contractors on the same roster who perform similar services.
Formal Competitive Bid: The process of advertising and receiving sealed written bids from prospective
vendors or contractors. The selection of the vendor or contractor is primarily based on the lowest cost
from a responsible vendor.
General Services: Interchangeable with “purchased services.”
Goods and Services: Material, supplies, services, and equipment offered for purchase by a vendor or
contractor and required by an agency to accomplish continuing and necessary functions.
Informal Solicitations: Price quotes from vendors that are obtained using a variety of mediums such as
phone, fax, email, or writing. Results must be documented and submitted to the Finance Department to
obtain a purchase order (encumbrance). The selection of the vendor is based on lowest cost from a
responsible vendor.
Interlocal Agreements: The exercise of governmental powers in a joint or cooperative undertaking with
another public agency.
L&I: Washington State Department of Labor and Industries.
MRSC: Municipal Resources and Services Center. A Washington-based non-profit that provides
information and educational services to local government agencies. The City of Port Townsend uses MRSC’s
vendor, consultant, and small public works rosters.
Ordinary Maintenance: Defined by WAC 296-127-010 as: “ work not performed by contract and that is
performed on a regularly scheduled basis (e.g., daily, weekly, monthly, 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 the asset so that repair
does not become necessary.”
2021 Budget Section 5 - Page 101 of 103
50
Personal Services: Interchangeable with “professional services.”
Prevailing Wage Rate: The rate of hourly wage, usual benefits, and overtime paid in the locality to the
majority of workers, laborers, or mechanics in the same trade or occupation; required to be paid on all
public works and public building service maintenance contracts. These rates are set by L&I.
Professional Services: Services that involve technical expertise provided by a consultant to accomplish a
specific study, project, task, or other work. These activities and products are mostly intellectual in nature
and do not include architectural and engineering (A&E) services. Examples of personal services include
accounting, legal, comprehensive planning, and real estate services.
Proposal: An offer to perform a contract to supply goods or services in response to a request for proposal
(RFP).
Purchase: The buying, leasing, renting or lease-purchasing of goods or services.
Purchase Order (also called encumbrance): A form issued by the Finance Department or Legal Assistant,
which reserves the purchase amount in the applicable fund and can sometimes serve as a written request
to a vendor to provide the item being purchased.
Purchased Services (also called general services): Services that are generally routine, repetitive, or
mechanical in nature and support the City’s day-to-day operations. Purchased services include janitorial,
debt collections, equipment service agreements, machine repair, or delivery services.
Public Work: A project including all work, construction, alteration, repair, or improvement other than
ordinary maintenance executed at the cost of the City. Public work projects include the related materials,
supplies, and equipment to complete the project.
Purchase Order (Encumbrance): Official document used in authorizing the encumbrance of City funds
toward a purchase.
Quotation: An offer, including price, to perform a contract to supply goods and/or services in response to
a request for quotation.
Request for Proposals (RFP): A process that requests interested firms to submit a statement of their
proposal for completing a project. Proposals are evaluated based on suitability, practicality, quality of the
proposal, experience, and cost.
Request for Qualifications (RFQ): a request for only a firm’s general capabilities, including a list of principals,
previous projects, number of employees, and licenses. An RFQ doesn’t not including pricing information.
Requisition Form: A standard form providing detail information as to quantity, description, estimated
price, vendor, fund account, signature, and other information necessary to make a purchasing decision.
Responsible Bidder: Contractor, supplier, or vendor who is determined to be qualified to provide services
or goods to the City based on the criteria in RCW 39.04.350.
2021 Budget Section 5 - Page 102 of 103
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Responsive Bidder: An entity whose bids conforms in all material respects to the terms and conditions, the
specifications, and other requirements of a solicitation.
Sealed Bid (Formal Bid): An advertised solicitation for a requirement in which the cost exceeds the bid limit.
The bids are opened during a public opening.
Sole Source (also called a single source purchase): An exception to competitive bidding. A purchase of
goods or services that is clearly and legitimately limited to a single source of supply in which the purchase
price may be best established by direct negotiation.
Solicitation: Notification to prospective bidders about a future project or purchase, with a request for
competitive bids, quotes, or proposals.
Splitting: The separation of continuing/repetitive requirements for the same good or service into several
purchases to avoid dollar limitations or competition.
Small Works Roster: List of contractors by work category who have registered with MRSC and requested
to be notified by the City about upcoming projects or purchases and bid opportunities.
Specification: A clear, complete, and accurate statement of the technical requirements descriptive of a
material, item, or service.
State Contract: Contracts for goods or services administered by the Department of Enterprise Services on
behalf of agencies. The contract document will identify the conditions under which usage by agencies is
allowed.
Subcontractor: A person or business that is, or will be, providing or performing an essential aspect of a
contract under the direction and responsibility of the primary contractor.
Supplier: A vendor of purchased goods and services.
Surplus Property: Personal property belonging to the City for which the City has no further use.
Vendor: A provider of materials, supplies, goods, or equipment.
2021 Budget Section 5 - Page 103 of 103
CITY OF PORT TOWNSEND, WASHINGTON,
GENERAL GOVERNMENT, UTILITY & INTERGOVERNMENTAL DEBT
AND INTERFUND LOANS
The City issues long-term debt instruments to finance large capital project investments.
These debt instruments may include tax-exempt bonds, intergovernmental loan
programs and inter-fund loans. State law limits the amount of debt the City may issue.
The following is a summary of the types of debt and their associated debt limits:
General Government Debt
General obligation bonds may be issued through voted or non-voted bonds. Debt
capacity is limited to certain percentages of the City’s total assessed property value
(AV). Voted bonds require a 60% majority vote to pass. The statutory debt limits are as
follows:
•General obligation bonds are limited to 2.5% of the City’s current AV. Of this
2.5%, non-voted (councilmanic) debt is limited to 1.5% of the City’s current AV.
•General obligation voted bonds can be issued for parks and open space up to
2.5% of the City’s current AV.
•General obligation voted bonds can be issued for utility purposes up to 2.5% of
the City’s current AV.
The City’s total non-voted debt will have an outstanding balance of $16,341,454 as of
January 1, 2021. Principal payments on the outstanding non-voted debt for 2021 are
$853,485, due on December 1, 2021.
In 2020, the City had an opportunity to refinance its outstanding 2010 LTGO bonds,
which were callable on December 1, 2020, through a private placement bond with
Kitsap Bank. The 2020 financing refunded the 2010 bonds at a lower interest rate
resulting in a significant savings in interest cost. The 2010 bonds carried an average
interest rate of 5% for the remaining 10 years (2020 through 2030). The refinanced
bonds will carry a term of 10 years at a rate averaging 1.54%, resulting in a gross
savings of $555,947 over the 10-year period, a net present value savings of 18.48%.
The City also financed an additional $900,000 over a 20-year term at an average
interest rate of 2.02%. These additional funds were used to repay the outstanding
balance on the 2019 Bond Anticipation Note (BAN) Line-of-Credit due to mature in June
2021, providing permanent financing for the following projects:
•Mt. View Phase III Improvements
•Water Street Overlay Street & Stormwater Projects
•Complete Streets Projects
•Discovery Road Pedestrian Improvement Project
Currently the City has four outstanding councilmanic (non-voted) bond issues:
1.Series 2012 Limited Tax General Obligation Refunding bond issue, refunded
1999 bonds and a portion of the 2002, 2003 and 2005 general obligation
bonds. Outstanding balance as of January 1, 2021 - $1,660,000.
2021 Budget Section 6 - Page 1 of 5
2.Series 2017 (Series A & B) Limited Tax General Obligation bonds issued to
refund the Series 2008 bonds and to finance road and sidewalk
improvements, tourism, infrastructure and waterfront access improvements.
Outstanding balance as of January 1, 2021 - $10,215,000.
3.Series 2018 Limited Tax General Obligation bond issued to fund the
Homeward Bound/Cherry Street affordable housing project. Outstanding
balance as of January 1, 2021 - $808,104
4.Series 2020 Limited Tax General Obligation bonds issued to refund the
Series 2010 bonds and finance sidewalk, street and stormwater
improvements (previously financed through a short term line of credit).
Outstanding balance as of January 1, 2021 - $3,658,350.
Voted Debt - In February 2015, 71.37% of the voters of the City of Port Townsend
approved a ballot measure to authorize the City to issue up to $3,600,000 in bonds for
the Mountain View Commons energy retrofit and other campus improvements. The
bonds were issued in June 2015 in the amount of $3,385,000, with a net interest cost of
3.06%. The annual debt service will be $301,550 in 2021. The City will levy property
taxes in the amount of $150,000 and the remainder of the debt service will be funded by
Special Purpose Sales Tax receipts. Outstanding balance as of January 1, 2021 -
$2,640,000
General Obligation Line of Credit
The City Council authorized the City Manager to execute an agreement with Cashmere
Valley Bank to provide a line of credit for $1,500,000 in May 2019 to finance capital
improvements to city streets and facilities. The line of credit with Cashmere Valley Bank
matures on June 1, 2021.
The balance on the line of credit as of October 31, 2020 was $870,000. The City will
pay-off this balance with proceeds from the 2020 refinance of the 2010 LTGO bonds.
The line of credit will have no outstanding balance at the end of 2020 and no new draws
against the line of credit are planned for 2021.
Inter-fund Loans
The City will have one outstanding inter-fund loan in 2021, with an original amount of
$90,000. The loan is from the Transmission Line Fund to the Community Services Fund
over a 3-year term at an interest rate equal to the average LGIP investment interest rate
for the loan term. The loan provided the Community Services Fund the ability to
contract with BERK Consulting, Inc. to perform a comprehensive park study in 2019.
Annual payments are made from the reduction in the annual Mountain View lease,
beginning in 2020. By the end of 2021, the outstanding balance of the interfund loan
will be $30,000. The final payment for the interfund loan is scheduled to be made by
the end of 2022.
2021 Budget Section 6 - Page 2 of 5
Debt Financial Policies
The City Council adopted financial policies allow for annual debt payments on General
Government obligations for capital improvements that cannot be funded out of current
revenues. These annual debt payments should not exceed 15% of the total of annual
General Government operating revenues plus budgeted transfers from capital funding
sources. General Government Funds include the General Fund, Contingency Fund and
Special Revenue Funds. The 2020 debt service payments include a one-time payment
of $870,000 for paying off the 2019 BAN Line-of-Credit, causing the GO debt service as
a % of General Government Revenue to exceed the Council’s policy for this ratio. The
2021 ratio is projected at 12.8% and complies with the Council’s financial policies.
The following chart and table reflect the current general obligation non-voted and voted
bond debt capacity based on the Jefferson County Assessor’s 2020 preliminary
assessed values for 2021 taxes; preliminary assessed values increased by
approximately 7.9%, consequently, increasing the City’s available debt capacity:
2017
Actual
2018
Actual
2019
Actual
2020
Estimated
2021
Budget
Annual Debt Service as % of Revenue Less than 15%10.4% 10.4% 10.9% 19.4% 12.8%
GO Debt Service as a % of General Government Revenue
2021 Budget Section 6 - Page 3 of 5
2020 Assessed Valuation (1)2,012,639,062$
General Purposes - Non-Voted
Non-voted General Obligation Debt Capacity (1.50% of AV)30,189,586$
Less: Outstanding Non-voted General Obligation Debt (2)(16,341,454)$
Less: Outstanding Line of Credit Balance (3)-$
Remaining Non-Voted General Obligation Debt Capacity 13,848,132$
Percent of Non-Voted Debt Capacity Remaining 45.87%
General Purposes - Requires Voter Approval
Voted General Obligation Debt Capacity (1.00% of AV)20,126,391$
Less: Outstanding Voted General Obligation Debt (2,640,000)$
Less: Outstanding Line of Credit Balance (3)-$
Remaining Voted General Obligation Debt Capacity 17,486,391$
Percent of Voted Total Debt Capacity Remaining 86.88%
Parks and Open Space Purpose - Requires Voter Approval
Voted General Obligation Debt Capacity (2.50% of AV)50,315,977$
Less: Outstanding Voted Debt for Parks -$
Remaining Voted Debt Capacity for Parks 50,315,977$
Utility Purpose - Requires Voter Approval
Voted General Obligation Debt Capacity (2.50% of AV)50,315,977$
Less: Outstanding Voted General Obligation Debt for Utility Purpos -$
Remaining Voted Debt Capacity for Utility Purpose 50,315,977$
Notes:
(1) Estimate from County Assessor's Preliminary Valuations 2020 Assessments for 2021 Taxes
(3) Line of credit for $1,500,000 authorized by Council on 11/3/14; renewed 11/6/17 & 5/13/19;
no outstanding amount as of 1/1/2021.
(2) Includes only LTGO Bonds issued through 2020. Other general obligation debts may
count against debt capacity. Includes principal payments through 12/31/2020.
2021 Budget Section 6 - Page 4 of 5
Utility & Intergovernmental Debt
The City has funded utility/public works projects with intergovernmental loans from the
Public Works Board (Public Works Trust Fund loans used to fund public work projects)
and the State Revolving Fund (Department of Ecology low interest loans for water
quality projects). These loans are repaid from utility revenues rather than property tax
revenues. Loan payments for 2021 for utility debt are budgeted at approximately
$1,534,000 for principal and interest combined. Currently, the outstanding principal on
utility debt at the end of 2020 is $18,344,462.
In January 2017, the City’s new drinking water treatment facility and reservoir,
estimated cost of approximately $24 million, were placed in service. Public Works Trust
Fund Loans and Drinking Water State Revolving fund a significant portion of this
project. The City’s contribution for this project was approximately $2,500,000 and was
funded through transfers from the System Development Fund and reserves in the
Water/Sewer Operating and Capital funds.
Repayment of the loans will come from utility revenues, which include a capital
surcharge that is currently being assessed. A utility debt reserve fund has been
established to reserve collected surcharge amounts for these future debt payments. At
the end of 2020, the debt reserve fund is estimated to have a fund balance of
approximately $2,427,000.
Utility Line of Credit
The City Council authorized the City Manager to execute an agreement with Kitsap
Bank to provide a line of credit for $3,000,000 in February 2016. This line of credit is
used to fund vendor payments in advance of receiving loan/grant funding from state or
federal agencies or to provide interim financing while permanent financing options are
reviewed. The line of credit matured in March 2018 and the City subsequently renewed
the line of credit through March 1, 2021.
In late 2020, the City issued a Water and Sewer Revenue Bond in the principal amount
of $1,914,980, through a private placement with Kitsap Bank. This bond will allow the
City to pay off the utility line of credit with Kitsap Bank and provide permanent financing
for the City’s share of the Water Treatment Facility and The Big Quil Diversion Dam
capital improvement projects. The bond will carry a term of 20 years at an average
interest rate of 2.16%.
At the end of 2020, the utility line of credit will have no outstanding balance and no
draws on the line of credit are scheduled for 2021.
2021 Budget Section 6 - Page 5 of 5
CITY OF PORT TOWNSEND, WASHINGTON
STAFFING AND COMPENSATION SUMMARY
The City of Port Townsend employs over 100 individuals. City employees are made up
of four groups:
•General Government Bargaining Unit - employees who are members of the
Local Union No. 589 of the International Brotherhood of Teamsters
•Police Department Bargaining Unit - employees who are members of the Local
Union No. 589 of the International Brotherhood of Teamsters
•Non-represented management, library and “confidential” employees who do not
belong to any bargaining group
•Part-time and temporary/seasonal employees
Compensation and benefits for the two Teamsters bargaining units are negotiated and
certain wage changes, pay scales and benefit packages are administered based on the
contractual agreements.
The 2021 budget reflects a City-wide reduction of 11.75 full time equivalents (FTEs), or
a 11.1% decrease. As mentioned in the City Manager’s Budget Message, significant
revenue reductions as a result of the economic downturn due to the pandemic health
crisis, has required a decrease in funding for certain departments. Funds most
impacted by these reductions include General Fund, Community Services Fund and
Street Fund. While service impacts are likely due to the reduction in staff, City
leadership will continue to look for ways to provide critical services in the most efficient
manner possible. One such example is the reorganization of administrative staff
positions to create a Public Experience Liaison team located in the first -floor lobby of
City Hall. This team will enhance the service provided to City residents, vendors, and
visitors through a consistent and cohesive one-stop shop approach.
Details on the assumptions used in preparation of the 2021 salary and benefit budget,
including details regarding the proposed staff reductions, are provided below.
2021 Budget Assumptions for General Government Agreement
The General Government Agreement covers Public Works, Development Services,
Finance and Police Administration employees. The General Government Agreement
with the Teamsters defines the pay scales, seniority rates and annual inflationary
adjustments to salaries for this group of employees. The proposed 2021 budget was
prepared by reviewing each employee’s position and seniority as compared to the wage
charts, as well as including a cost of living increase of 2.0%. The contract agreement
for these employees expires December 31, 2021.
Full time employees receive a full benefit package that includes health, life, dental and
retirement benefits. The current contract calls for employees in this group to contribute
2021 Budget Section 7 - Page 1 of 7
10% of the total cost of the medical benefit costs for themselves and any covered
dependents, which is how the city budgeted these costs. Teamster benefit rates are
budgeted to increase 1.5% in 2021.
2021 Budget Assumptions for Police Agreement
The Police Agreement with the Teamsters defines the pay scales, compensated hours,
seniority rates and cost of living adjustments to salaries for police officers and
sergeants. The two-year agreement with the Police bargaining unit was set to expire on
December 31, 2020, however, a one-year extension was executed in June 2020.
2021 Budget assumptions are forecasted with a cost of living increase of 2.0% per the
contract agreement. Full-time employees receive a full benefit package that includes
health, life, dental and retirement benefits. Employees contribute 10% of the medical
benefit costs for themselves and any covered dependents. Teamster benefit rates are
budgeted to increase 1.5% in 2021.
2021 Budget Assumptions for Non-represented employees
The non-represented employee group is made up of management and professional
level staff, part-time pool staff, library staff, and confidential/administrative staff. This
group has no formal contractual agreement and benefit and wage increases have
historically been dictated by performance and availability of budget dollars. Full time
employees receive a full benefit package that includes health, life, dental and retirement
benefits. Employees contribute 15% of the total cost of these benefits for themselves
and any covered dependents. Medical benefit rates are forecasted to increase 4.0%
which is partially offset by a 2.0% discount for well city designation. Employees may
choose from two dental plans. The Dental premiums are budgeted for no increases in
2021. There are no increases forecasted for Vision benefit rates.
A classification scale and compensation policy for non-represented employees was
approved by the City Council in 2015 to formalize wages and establish a predictable
compensation system. Wage scales for this group of employees are updated each year
with inflationary increases and new positions.
The 2021 budget includes a cost of living adjustment for non-represented employees of
2.0%.
Minimum Wage - For 2021, the minimum wage increased $0.19 or 1.4% to $13.69 per
hour. This increase impacts pool and seasonal wage rates. Additionally, the increase
begins to impact higher level position through wage compression. Wage compression
occurs when pay adjustments regardless of experience, skills or seniority increase the
base wage and bring those wages closer to the wages of more senior, experienced,
skilled positions. Human Resource will continue to monitor the impact of minimum
wage adjustments on all City positions.
2021 Budget Section 7 - Page 2 of 7
Recruiting Staff, Succession Planning and Best Practices
The City continues to strive to foster a healthy City organization through investing in
leadership development and training and adopting and implementing best employment
practices.
Human Resources continues to develop career pathing and City-wide training
opportunities for growth for existing employees and to enhance the City’s ability to
retain valued employees will continue. The Council financial policies target 1% of
salaries for spending on department level training and 1% of salaries for City-wide
training expenditures. The 2021 budget includes these resources, however, significant
reductions in training were made to help provide for a balanced budget. Department
managers work with the Human Resources team to implement training that both
ensures regulatory compliance in required certification programs as well as employee
education and professional development programs.
In 2021, the budget includes funding for the police department to contract with MCS
Counseling for one full time Navigator. The Navigator assists police with the increasing
number of calls for service for individuals with mental health and/or substance abuse
disorders. The Navigator has made a positive impact in the community, linking at risk
individuals with services for mental health care, substance abuse treatment, housing,
medical care, food, transportation and other needs. The services provided by the
Navigator help extend the police staff through the consulting service; the Navigator
position is not included in the total number of authorized staff positions.
The 2021 budget does not include 1.35 FTEs of seasonal help for parks & recreation or
Streets/Stormwater/Wastewater. These positions are critical to assist with managing
fast growing vegetation during the spring and summer months, among other
assignments. Due to budget constraints, appropriations for seasonal positions were
omitted from the 2021 budget.
The 2021 budget includes numerous other staffing changes, which results in an
additional reduction of 10.4 FTEs from 2020. The impacts of COVID-19 on the City’s
revenues in 2020 and 2021 has required the freezing of certain vacant positions,
reduction of administrative support, and continuation of select furloughs; as well as a
reorganization of a few positions. These measures are taken to provide for a balanced
budget in 2021, not having to deplete any fund balance reserves. The 2021 staffing
changes are outlined below:
•Accountant position frozen – 1.0 FTE
•Aquatic Program Supervisor position partially frozen (Jan – June) – 0.5 FTE
•Street/Storm/Sewer Lead Operator position frozen – 1.0 FTE
•Part-time Pool Staff continued furloughs – 3.5 FTEs
•Human Resource Specialist position reduced from full time to part-time – 0.4 FTE
•Legal Assistant position eliminated – 0.6 FTE
•I.T. Network Support position eliminated – 1.0 FTE
•Administrative Support positions reorganized and reduced – 2.0 FTEs
•Delayed Police Officer Hirings - 0.4 FTE
2021 Budget Section 7 - Page 3 of 7
The reorganization of the administrative support positions resulted in the creation of 3
new Public Experience Liaison positions to support the newly constructed front desk in
the first-floor lobby.
A chart below shows the trend by department of authorized staffing changes in the last
five years:
A total of 95.48 positions are included in the budget for 2021, not including volunteer
hours, overtime, or accrued leave payouts. Volunteer hours amount to approximately
3.36 FTEs and assist with police operations, library operations, and parks
maintenance. City-wide overtime hours are also budgeted at 3,971 hours with most of
those hours dedicated to police operations.
Department/Division 2017 2018 2019 2020 2021
2021
vs
2020
2021
vs
2019
General Government
City Manager 2.0 2.0 2.0 2.0 1.0 -1.0 -1.0
City Attorney 3.6 3.6 3.6 2.6 2.0 -0.6 -1.6
Development Service & Planning 8.3 8.3 8.3 8.3 8.0 -0.3 -0.3
Finance & Utility Billing (UB)6.4 6.0 6.3 7.5 9.0 1.5 2.8
Police Admin & Operations 19.0 19.8 20.0 19.8 18.6 -1.2 -1.4
City Clerk/Human Resources 5.0 5.0 5.0 4.0 3.6 -0.4 -1.4
PEG TV Studio 0.0 0.0 0.0 0.0 0.0 0.0 0.0
City Events, Facilities & Restrooms 3.5 3.5 3.5 4.0 3.5 -0.5 0.0
Street 2.1 2.2 2.2 1.9 1.7 -0.2 -0.5
Parks Maintenance & Recreation 4.2 4.2 4.5 4.0 3.5 -0.5 -1.0
Pool 7.7 7.9 8.3 8.0 4.0 -4.0 -4.3
Library 9.6 9.6 9.6 8.9 8.9 0.0 -0.8
Equipment Rental 4.3 4.3 4.0 4.0 3.0 -1.0 -1.0
Total General Government 75.7 76.4 77.3 75.1 66.8 -8.3 -10.5
Public Works &
Utilities (excl UB)
Public Works Administration 3.2 3.3 4.2 4.2 2.5 -1.7 -1.7
Public Works Engineering 5.9 7.8 6.7 5.4 5.9 0.5 -0.8
Utillities
Water Distribution 5.0 5.8 5.5 5.5 5.0 -0.5 -0.5
Water Quality & Resource 3.0 3.8 3.5 3.5 4.0 0.5 0.5
Wastewater Collection 2.5 2.7 2.5 2.6 2.2 -0.3 -0.3
Wastewater Treatment 3.5 3.5 3.8 3.6 3.5 -0.1 -0.3
Biosolids 2.5 2.5 2.5 2.5 2.5 0.0 0.0
Stormwater 3.5 3.6 3.3 3.5 3.1 -0.5 -0.3
Total Public Works & Utilities 29.1 33.0 31.9 30.8 28.7 -2.1 -3.2
TOTAL CITY FTES 104.9 109.3 109.2 105.9 95.5 -10.4 -13.7
-9.5% -12.6%
2017 2018 2019 2020 2021
Mayor/Council 7.0 7.0 7.0 7.0 7.0
*Does not include leave payouts or seasonal positions
Positions not currently counted
as FTES
Percentage Change
CITY OF PORT TOWNSEND - AUTHORIZED POSITIONS *
2021 Budget Section 7 - Page 4 of 7
Below are two tables that outline salary schedules and positions budgeted in 2021 for
Elected Officials, Non-represented Employees and Represented Employees positions:
Elected Officials
Classification Minimum Maximum Positions
Mayor 9,000.00$ 9,000.00$ 1.00
Councilmembers 6,000.00$ 6,000.00$ 6.00
Non Represented Employees
Classification Minimum Maximum Positions
City Manager 131,325$ 171,248$ 1.00
Public Works Director 121,065$ 148,156$ 1.00
City Attorney 118,727$ 142,471$ 1.00
Chief of Police 109,822$ 139,945$ 1.00
Finance and Administrative Services Director 106,854$ 136,536$ 1.00
Development Services Director 106,854$ 130,598$ 1.00
Deputy Police Chief 97,072$ 118,305$ 0.00
Deputy Public Works Director/City Engineer 97,072$ 118,305$ 1.00
Parks, Recreation & Community Services Director 97,072$ 118,305$ 1.00
Assistant City Engineer II 89,089$ 111,749$ 0.00
Assistant City Engineer I 86,076$ 107,970$ 0.00
Library Director 86,076$ 106,854$ 1.00
Human Resources Manager 83,334$ 115,425$ 1.00
Prosecuting Attorney/Assistant City Attorney 82,642$ 101,616$ 0.00
Planning Manager 82,643$ 101,616$ 1.00
Building Official 81,624$ 97,948$ 1.00
Public Works Operations Manager WW/Bio 81,624$ 97,948$ 1.00
Public Works Operations Manager - Water Resources 81,624$ 97,948$ 1.00
Public Works Operations Manager - Streets/Sewer/Stormwater 81,624$ 97,948$ 1.00
City Clerk 78,893$ 102,477$ 1.00
Operations Manager - Parks, Recreation & Facilities 77,172$ 106,854$ 0.00
Finance Manager 79,539$ 110,575$ 1.00
Civil Engineer III 75,375$ 103,955$ 1.00
Senior Planner 74,371$ 95,064$ 1.00
Library Manager - Public and Technical Services 65,175$ 76,724$ 1.00
Library Manager - Youth Services 65,175$ 76,724$ 1.00
Civil Engineer EIT 60,909$ 78,728$ 1.00
Deputy City Clerk 58,226$ 77,073$ 1.00
Executive Assistant to City Manager 58,226$ 77,073$ 0.00
Human Resources Specialist 58,226$ 77,073$ 0.63
Legal Assistant/Deputy Clerk 58,226$ 77,073$ 1.00
Legal Assistant 58,226$ 77,073$ 0.00
Payroll and Benefits Administrator 58,226$ 77,073$ 1.00
Executive Assistant to Chief of Police 54,992$ 72,833$ 0.00
Hourly Part-Time Positions
Library Associate 20.59$ 24.27$ 2.01
Library Assistant 15.53$ 18.31$ 2.13
Library Assistant Substitute 15.53$ 0.54
Library Courier, Library Page 13.77$ 16.65$ 1.19
Aquatics Recreation Aide 13.77$ 16.65$ 0.00
Lifeguard, Swim Instructor 14.18$ 15.78$ 0.50
Fitness Instructor 15.70$ 17.57$ 0.00
TEMPORARY PART TIME Hourly Pool Positions
Assistant Swim Team Coach 15.70$ 23.71$ 0.00
Head Swim Team Coach 17.19$ 26.34$ 0.00
Total Non-Represented Employees 32.00
CITY OF PORT TOWNSEND
NON-BARGAINING EMPLOYEE POSITION CLASSIFICATION SALARY SCHEDULE
BUDGET 2021
2021 Budget Section 7 - Page 5 of 7
GENERAL GOVERNMENT REPRESENTED EMPLOYEES
Classification Minimum/hr Maximum/hr **Positions
Accountant 34.29$ 38.91$ 0.00
Administrative Assistant - Public Works 22.42$ 25.47$ 0.00
Aquatics Program Coordinator 23.18$ 26.51$ 1.00
Aquatics Program Supervisor 28.84$ 32.76$ 0.50
Assistant Planner 29.70$ 33.73$ 0.00
Associate Planner 33.10$ 40.04$ 0.00
Building Inspector 31.11$ 35.34$ 1.00
Code Compliance Officer 31.11$ 35.34$ 1.00
Community Services Officer 23.18$ 26.51$ 1.00
Crew Chief 32.47$ 36.87$ 2.00
Crew Chief Apprentice 30.20$ 34.30$ 1.00
Equipment Operator 28.20$ 31.91$ 9.00
Finance Specialist 29.70$ 33.73$ 1.00
Finance Tech II 23.18$ 26.51$ 1.00
Finance Tech III 25.43$ 28.87$ 1.00
GIS Coordinator 31.86$ 36.23$ 1.00
Head Lifeguard I 15.70$ 17.56$ 1.00
Head Lifeguard II 17.02$ 19.07$ 1.00
IT Network Administrator 39.77$ 45.15$ 1.00
IT Technical Support 31.86$ 36.23$ 0.00
Land Use Specialist 29.70$ 33.73$ 1.00
Lead Equipment Operator 30.20$ 34.30$ 3.00
Lead Operator 30.20$ 34.30$ 3.00
Maintenance Worker 23.18$ 26.51$ 9.00
Mechanic 28.84$ 32.76$ 0.00
Parks/Rec Community Services Admin Support Specialist 23.61$ 26.73$ 0.00
Permit Tech 23.18$ 26.51$ 2.00
Police Clerk 25.43$ 28.87$ 2.00
Project Accounting Specialist 29.70$ 33.73$ 1.00
Public Experience Liaison 23.61$ 26.73$ 3.00
Public Works Inspector 31.11$ 35.34$ 1.00
Public Works/Engineering Support Specialist II 23.18$ 26.51$ 0.00
Public Works/Engineering Support Specialist III 25.43$ 28.87$ 0.00
Purchasing/Contracts Specialist 29.70$ 33.73$ 0.00
Public Works Administrative Assistant 19.90$ 0.40
Seasonal Workers 16.00$ 0.00
Total General Government Represented Employees 48.90
POLICE OFFICER REPRESENTED EMPLOYEES
Classification Minimum/hr Maximum/hr **Positions
Police Officer 33.03$ 37.89$ 11.00
Sergeant 42.45$ 46.43$ 2.83
Hourly Part-Time Non-Represented Positions
Reserve Police Officers 18.00$ 0.75
Total Police (Sworn Officer) Employees 14.58
TOTAL CITY POSITIONS (Excluding Elected Officials)95.48
**max pay does not include longevity or other premiums as may be applicable
CITY OF PORT TOWNSEND
REPRESENTED EMPLOYEE POSITION CLASSIFICATION SALARY SCHEDULE
BUDGET 2021
2021 Budget Section 7 - Page 6 of 7
City ManagerCity Manager
MayorMayor Deputy MayorDeputy Mayor Council MemberCouncil Member Council MemberCouncil Member Council MemberCouncil Member Council MemberCouncil Member Council MemberCouncil Member
DevelopmentServicesDirector
Public WorksDirector
Finance &AdministrativeServices Director
City Clerk
Parks, Recreation & Community ServicesDirector Library Director
City Attorney
Citizens of Port Townsend
CivilEngineer (EIT)
GISCoordinator
CivilEngineer III
ProjectAccountingSpecialist
PW Operations Manager
Street/Stormwater/Sewer
PW Operations ManagerWater Resources PW Operations Manager
Wastewater Treatment/Biosolids
Crew Chief(Apprentice)Crew Chief
City Engineer/DeputyPublic Works Director
Lead OperatorFacilities
Lead Operator
Parks
Maintenance WorkerParks (2)
Aquatics ProgramSupervisor
Head
Lifeguard (2)
Lifeguards
(Part Time)
Fitness/SwimInstructors(Part Time)
AquaticsProgram
Coordinator
Library AssistantSubstitute(Part Time)
Library Page
(Part Time)
Library Manager
Public & Technical Services
Library ManagerYouth Services
HumanResources Specialist
Payroll/BenefitsAdministrator
Public Experience Liaison (3)
FinanceSpecialist
FinanceTech III
Finance Manager
Human Resources Manager
Public WorksInspector
PoliceDetective
CommunityServicesOfficer
Deputy
City Clerk LegalAssistant
PoliceClerk (2)
Police Officers (11)Reserve Officers (2)
Citizen VolunteersPolice Department
Reserve OfficerVolunteers
Sergeant (3)
Chief of Police
Maintenance
Worker (2)
Equipment
Operator (3)
Lawerence Grewell
Lead Equipment
Operator
EquipmentOperator
Lead Equipment
Operator
REV 11/2020
Planning Manager
Building Official
SeniorPlanner
PermitTechnician (2)
Land UseSpecialist
BuildingInspector
CodeComplianceOfficer
EquipmentOperator (2)
Lead EquipmentOperator
Equipment
Operator
Lead Equipment
Operator
Equipment
Operator
Lead EquipmentOperator
Maintenance
Worker (3)
Street/Stormwater/Sewer
Composting/Biosolids
Wastewater TreatmentWater Resources
Water Distribution
Water Division
Fleet
EquipmentOperator(2)
Maintenance WorkerFacilities (2)
FinanceTech II
IT NetworkAdministrator
LibraryAssociate(Part Time)
LibraryAssistant(Part Time
2021 Budget Section 7 - Page 7 of 7
CITY OF PORT TOWNSEND, WASHINGTON
PROPERTY TAX
Property valuations are established by the Jefferson County Assessor’s Office in
accordance with state law. State law restricts the amount of property taxes the City can
levy. Typically, the maximum the City can levy, without the vote of the people, is 101%
of the highest lawful levy amount plus the impact of new construction at the previous
year’s levy rate.
In early October, the Jefferson County Assessor provides the City’s assessed value
(AV) for use in computing the levy rates for the following tax year. The City’s 2020 AV
grew by 7.9% from the 2019 AV. New construction in the City was $18,187,660 for
2020 which adds to the City’s tax base.
In February 2019, the voters of the City of Port Townsend authorized a measure to
annex the City of Port Townsend into Jefferson County Fire Protection District #1
(EJFR). The measure was approved by 69.28% of the voters, resulting in a merge of
the geographic area of Port Townsend into the service area of District #1. With this
approval, the City no longer levies property taxes for the Fire Levy Lid Lift or Emergency
Management Services, as these services will now be provided by EJFR. EJFR will now
levy taxes for these services. The City’s General Fund Levy had previously supplied
additional funding to EJFR, with the funding amount for 2019 estimated at $908,724.
The City retains the authority to levy the $908,724.
While Washington state does not allow the property tax levy to be reduced through a
vote once it has been established, the City Council may adjust the amount to be levied.
The City put together a means to limit its property tax levy authority for a period of five
years.
The Council has adopted an enforceable policy that limits the Council’s tax authority in
December 2018. The policy is accessible on the City’s website at:
https://cityofpt.us/administration/page/post-annexation-property-tax-policy-qa . This policy
provides that the City will not assess any of the $908,724 increase in 2020 (the first year
it would go into effect if annexation is approved). Thereafter starting in 2021 through
2023 the Council will have limited authority as provided for by the policy. The policy
requires that any amount of the $908,724 be phased in at a rate not to exceed 33% per
each year starting in 2021. Further, it restricts what the money can be used for as
outlined in the adopted policy.
For 2021, the policy allows 33% of the $908,724 to be levied, which would have
resulted in levying $302,908 of the banked capacity for certain projects – street or
parks/trails capital projects, housing trust fund contributions or utility tax relief. The City
will not levy any of this banked capacity in 2020 for 2021 taxes.
2021 Budget Section 8 - Page 1 of 9
By not levying this amount, the City still retains the “banked capacity” of $908,724 but
foregoes the additional dollars of tax receipts in 2021. This banked capacity will be
available for the City to use for any purpose in the future but not during the 2020-2023
period covered in the policy agreement.
The total proposed property tax levy for the City General 2020 property tax levy for 2021
taxes is $2,682,000, or approximately $1.31909 per $1,000 AV. This levy includes the
Library lid lift which provides funds to pay for operating expenses for the Carnegie
Library and Pink House.
In February 2015, the voters of the City of Port Townsend approved a ballot measure to
authorize the City to issue up to $3,600,000 in bonds for the Mountain View Commons
energy retrofit and other building improvements. The bond will be partially paid with an
additional property tax levy for a period not to exceed 15 years. The annual debt
payments are approximately $300,000 a year. The City Council intends to use special
purpose sales tax revenue to fund 50% of the payment and to levy an additional amount
equivalent to the remainder of the bond payment. The levy for the Mountain View
Commons bond is $150,000 in 2020 for 2021 taxes. This excess levy amount is
approximately $0.07596 per $1,000 of assessed values.
The City of Port Townsend records property tax amounts when collected (cash basis
accounting recognition system). The following chart reflects the proposed property tax
levies and budget allocations by fund. The total amount is slightly higher than the
proposed levy amounts listed above to allow for 2021 new construction additions or
refunds/changes that may be identified and valued by the County Assessor before the
end of the year.
Assessed Valuation (000's)1,469,136 1,219,761 1,299,381 1,340,801 1,442,618 1,524,264 1,653,040 1,869,815 2,012,639
Levy Rate - General 1.42529 1.73897 1.66940 1.63449 1.56531 1.52015 1.42554 0.79604 0.75491
Levy Rate - Library Lid Lift 0.66400 0.80908 0.77421 0.76037 0.72350 0.70654 0.66291 0.59529 0.56418
Levy Rate - Fire Lid Lift 0.43708 0.53429 0.51206 0.50217 0.48254 0.46682 0.43799 -
City of PT Total General Levy 2.52637 3.08234 2.95567 2.89703 2.77135 2.69351 2.52644 1.39133 1.31909
Levy Rate - EMS 0.50000 0.50000 0.50000 0.50000 0.50000 0.49598 0.46823 -
Excess Levy Rate - Mountain View - - - 0.05093 0.10595 0.10595 0.09261 0.08173 0.07596
Total City Tax Levy Rate 3.02637 3.58234 3.45567 3.44796 3.37730 3.29544 3.08728 1.47306 1.39505
2013 2014 2015 2016 2017 2018 2019 2020 2021
General 682,899 740,000 750,000 770,329 811,808 850,146 884,670 867,107 912,107
Contingency 39,689 4,000 4,000 - - - - - -
Community Services 399,242 408,000 412,000 412,000 412,000 412,000 412,000 412,000 412,000
General Covernment Debt Service 99,823 102,000 102,000 102,000 102,000 102,000 102,000 102,000 102,000
Firemen's Pension 34,000 35,000 35,000 39,245 35,245 34,235 34,235 34,235 34,235
Housing Trust Fund 6,235 10,000 10,000 10,000 10,000 10,000 10,000 74,658 74,658
Library Fund 967,644 989,000 1,006,000 1,019,185 1,043,224 1,076,951 1,095,824 1,124,000 1,147,000
EMS Levy 673,319 610,000 655,000 675,000 742,000 765,000 774,000 -
Fire/EMS General Levy 1,474,972 1,511,598 1,542,721 1,559,047 1,583,723 1,620,276 1,637,574 -
Mountain View Levy - - - 67,012 150,000 150,000 150,000 150,000 150,000
Total 4,377,823 4,409,598 4,516,721 4,653,818 4,890,000 5,020,608 5,100,303 2,764,000 2,832,000
Note: Budget Allocations are intentionally slightly higher than the Property Tax Levy amounts in the Ordinance. The
County Assessor provides guidance on budgeting higher than the levy to account for new construction/refunds and other valuation adjustments.
CITY OF PORT TOWNSEND PROPERTY TAX LEVY
ASSESSED VALUE & LEVY RATES - BY TAX YEAR
BUDGET ALLOCATIONS
2019 for
2020 taxes
2020 for
2021 taxes
2018 for
2019 taxes
2012 for
2013 taxes
2013 for
2014 taxes
2014 for
2015 taxes
2015 for
2016 taxes
2016 for
2017 taxes
2017 for
2018 taxes
2021 Budget Section 8 - Page 2 of 9
Ordinance 3257
Page 1 of 2
ORDINANCE NO. 3257
AN ORDINANCE OF THE CITY OF PORT TOWNSEND, WASHINGTON, FIXING
AND ADOPTING 2021 PROPERTY TAX LEVIES FOR THE GENERAL LEVY WITH
A TOTAL INCREASE OF ONE PERCENT (1.00%) AND A VOTER-APPROVED TAX
LEVY FOR THE MOUNTAIN VIEW COMMONS CAPITAL IMPROVEMENTS OF
$150,000 FOR THE UNLIMITED TAX GENERAL OBLIGATION BONDS
WHEREAS, as provided by and pursuant to RCW 84.55.120 and other applicable
statutes, the City of Port Townsend has properly given notice of the public hearing held on
November 2, 2020, to consider the City of Port Townsend’s General Fund, Contingency Fund,
Library Fund, Affordable Housing Fund, Community Services Fund, Debt Service Fund and
Firemen Pension Fund budget for the 2021 calendar year, pursuant to RCW 84.55.120; and
WHEREAS, RCW 84.52.070 requires the City to certify to the County the amount of
taxes to be levied upon the property within the City by November 30th of each year; and,
WHEREAS, at the February 10, 2015 special election, the citizens of Port Townsend
approved an additional property tax of $0.1005 per $1,000 of assessed property value for
improvements to the Mountain View Commons facility and to repay any interim financing used
for those improvements; and,
WHEREAS, at the February12, 2019 special election, the citizens of Port Townsend and
the East Jefferson Fire Protection District No. 1 approved the annexation of the City of Port
Townsend into the East Jefferson Fire Protection District No. 1; and
WHEREAS, per the fire annexation agreement, the City Council reduced its 2020
property tax levy by $908,724, which represents the approximate amount the City’s general fund
would have paid for fire protection services by the East Jefferson Fire Protection District and is
considered “banked capacity” for the City of Port Townsend; and
WHEREAS, as a result of the fire annexation, responsibility for levying the EMS levy
and the Fire/EMS levy lid lift transfers to East Jefferson Fire Protection District No. 1; and
WHEREAS, the City of Port Townsend, after hearing, and after duly considering all
relevant evidence and testimony presented, has determined that the City of Port Townsend
requires an increase in real property tax revenue from the previous year, in addition to the
increase in the value of state-assessed property, in order to discharge the expected expenses and
obligations of the City of Port Townsend and in its best interest;
NOW THEREFORE, the City Council of the City of Port Townsend do ordain as
follows:
Section 1. That an increase in the regular property tax levy of 1.0%, in addition to any
amount resulting from the addition of new construction and improvements to property and any
increase in the value of state-assessed property, and any increase due to re-levying for any
refunds made in the previous year, is hereby authorized for the 2021 levy in amounts as follows:
2021 Budget Section 8 - Page 3 of 9
Ordinance 3257
Page 2 of 2
1.1. There is hereby levied upon all taxable property in the City of Port Townsend, for the
year of 2021, the sum of $2,631,135 as a general tax levy, which is a percentage increase
of 1.0%, in addition to any amount resulting from the addition of new construction and
improvements to property and any increase in the value of state-assessed property, and
any increase due to re-levying for any refunds and cancellations/supplementals made in
the previous year, resulting in an increase of $26,051 from the previous year.
1.2. In addition to the above, there is hereby levied upon all taxable property in the City
of Port Townsend, for the year of 2021, the sum of $150,000 for the 2015 Unlimited Tax
General Obligation Bonds approved by voters in February 2015 for capital improvements
at the Mountain View Commons, which is a tax levy at approximately $0.075963 per
$1,000 assessed value.
Section 2. If any provision of this Ordinance or its application to any person or
circumstance is held invalid, the remainder of the ordinance, or the application of the provision
to other persons or circumstances, is not affected.
Section 3. This Ordinance shall take effect upon its passage, approval, and publication in
the form and manner provided by law.
ADOPTED by the City Council of the City of Port Townsend, Washington, at a regular
meeting thereof, held this 16th day of November 2020.
___________________________________
Michelle Sandoval
Mayor
Attest: Approved as to form:
___________________________________ ___________________________________
Joanna Sanders, MMC Heidi Greenwood
City Clerk City Attorney
2021 Budget Section 8 - Page 4 of 9
City of Port Townsend Property Tax Calculation - 2021
CITY OF PORT TOWNSEND - PROPERTY
TAX ESTIMATE FOR 2021 BUDGET GENERAL LEVY LIBRARY LEVY MTN VIEW LEVY TOTAL
2019 for 2020 Assessed Value 1,864,397,348$ 1,864,397,348$ 1,828,212,199$
2020 Levy Rate 0.799186 0.598093 0.082047 1.479326
2020 Acutal Levy Amount 1,490,000$ 1,115,084$ 149,999$ 2,755,083$
Increase of 1%14,900$ 11,151$ -$ 26,051$
Banked Capacity -$ -$ -$ -$
2021 New Construction Estimate 8,314$ 6,222$ 14,535$
2021 Refunds Estimate 6,144$ 3,025$ 9,169$
Total Calculated Levy Estimate 1,519,357$ 1,135,482$ 150,000$ 2,804,838$
Add: Bank Capacity Levied ($908,724)-$ -$ -$ -$
Adjusted Calcuated Levy Estimate 1,519,357$ 1,135,482$ 150,000$ 2,804,838$
2020 for 2021 Assessed Value (7.9%)2,012,639,062$ 2,012,639,062$ 1,974,651,332$
2021 Levy Rate 0.754908 0.564176 0.075963 1.395046
Budget Amount 1,535,000$ 1,147,000$ 150,000$ 2,832,000$
15,643 11,518
ALLOCATION
GENERAL FUND 912,107$
CONTINGENCY FUND -
COMMUNITY SERVICES 412,000
GO DEBT SERVICE 102,000
FIREMEN'S PENSION 34,235
HOUSING TRUST FUND 74,658
LIBRARY FUND 1,147,000
TOTAL 2,682,000
MTN VIEW LEVY 150,000$
TOTAL CITY LEVY BUDGET 2,832,000$
2021 Budget Section 8 - Page 5 of 9
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2021 Budget Section 8 - Page 6 of 9
City of Port Townsend Property Tax Calculation - 2020
CITY OF PORT TOWNSEND - PROPERTY
TAX ESTIMATE FOR 2020 BUDGET GENERAL LEVY LIBRARY LEVY MTN VIEW LEVY TOTAL
2018 for 2019 Assessed Value 1,653,051,001$ 1,653,051,001$ 1,619,766,431$
2018 New Construction 21,668,678$ 21,668,678$ 21,668,678$
2019 Levy Rate 1.418640 0.659890 0.092610 2.171140
2019 Acutal Levy Amount 2,345,852$ 1,091,188$ 149,999$ 3,587,039$
Increase of 1%23,459$ 10,912$ -$ 34,370$
Banked Capacity -$ -$ -$ -$
2020 New Construction Estimate 25,000$ 10,000$ 35,000$
2020 Refunds estimate 2,854$ 975$ 3,829$
Total Calculated Levy Estimate 2,397,164$ 1,113,075$ 150,000$ 3,660,238$
Less: EJFR Interlocal Agreement/Banked
Capacity (908,724)$ -$ -$ (908,724)$
Adjusted Calcuated Levy Estimate 1,488,440$ 1,113,075$ 150,000$ 2,751,514$
2019 for 2020 Assessed Value (13.1%)1,869,815,188$ 1,869,815,188$ 1,835,238,451$
2020 Levy Rate 0.796036 0.595286 0.081733 1.473056
Budget amount 1,490,000$ 1,124,000$ 150,000$ 2,764,000$
ALLOCATION
GENERAL FUND 867,107$ $
CONTINGENCY FUND -
COMMUNITY SERVICES 412,000
GO DEBT SERVICE 102,000
FIREMEN'S PENSION 34,235
HOUSING TRUST FUND 74,658
LIBRARY FUND 1,124,000
TOTAL 2,614,000
MTN VIEW LEVY 150,000$
TOTAL CITY LEVY BUDGET 2,764,000$
2021 Budget Section 8 - Page 7 of 9
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2021 Budget Section 8 - Page 8 of 9
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City Council 2020
Fax Number for all Council members is the Admin fax line: 360-385-4290
Name Public Phone Email Term
Expires
Michelle Sandoval 360-379-2980 msandoval@cityofpt.us 12/31/21 Pos. 1
Ariel Speser 360-379-2980 aspeser@cityofpt.us 12/31/21 Pos. 2
Monica MickHager 360-379-2980 mmickhager@cityofpt.us 12/31/23 Pos. 3
Owen Rowe 360-379-2980 orowe@cityofpt.us 12/31/23 Pos. 4
Pamela Adams 360-379-2980 padams@cityofpt.us 12/31/21 Pos. 5
Amy Howard 360-379-2980 ahoward@cityofpt.us 12/31/23 Pos. 6
David Faber 360-379-2980 dfaber@cityofpt.us 12/31/23 Pos. 7
2021 Budget Section 9 - Page 1 of 6
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2021 Budget Section 9 - Page 2 of 6
COUNCIL COMMITTEE ASSIGNMENTS
2020
COUNCIL STANDING COMMITTEES
Finance and Budget (4th Tues. 3pm Chambers) -------------------------- MS, AH (chair), MM
Rules Committee (2nd Tues. 11am Chambers) ------------------------------------- AH, AS (chair), OR
Housing Committee (3rd Thurs. 3pm Chambers) ------------------------------------MS (chair), AH, DF
Transportation Committee (3rd Wed. at 3 pm Chambers) ------------------------ DF (chair), OS, PA
Ad Hoc Committee on Public Safety & Law Enforcement (4th Mon. at 5pm Chambers) -------- All
CITY BODIES WITH COUNCIL REPRESENTATIVES
Alternative Electric Management Committee ------------------------------------------------- Unassigned
Lodging Tax Advisory Committee (LTAC) ---------------------------------------------------------- PA
PEG Access Coordinating Committee ------------------------------------------------------- Unassigned
OUTSIDE BODIES WITH COUNCIL REPRESENTATIVES
Economic Development
North Olympic Development Council (NODC) ----------------------------------------------- MS (MM alt.)
Health
Jefferson County Board of Health --------------------------------------------------------------------------- PA
Jefferson County Developmental Disabilities Advisory Board ---------------------------------------- OR
Jefferson County Clean Water District Advisory Council --------------------------------------------- MM
Jefferson County Behavioral Health Committee ---------------------------------------------------------- AS
Infrastructure
Public Infrastructure Board ----------------------------------------------------------------------------------- MS
Law and Justice
Jefferson County/Port Townsend Regional Emergency Planning Committee ------------------- MM
Transportation
Jefferson Transit Authority Board ----------------------------------------------------------------------- AS, DF
Peninsula Regional Transportation Planning Organization Executive Board----------- AS (DF Alt)
Other
Climate Action Committee ------------------------------------------------------------------------------------- PA
Fort Worden Advisory Committee --------------------------------------------------------------------------- OR
Jefferson County/City of Port Townsend LEOFF I Retirement/Disability Board ------------------ DF
Jefferson Higher Education Committee -------------------------------------------------------------------- MS
East Jefferson Fire Rescue Joint Oversight Board -------------------------------------------Unassigned
OlyCAP Board of Directors ----------------------------------------------------------------------------------- AH
Joint Growth Management Steering Committee---------------------------------------------- MS, DF, MM
JeffCom Administrative Board -------------------------------------------------------------------------------- AS
Port Townsend Main Street HUD Loan Committee ------------------------------------------------------- PA
Creative District------------------------------------------------------------------------------------------------------OR
Fort Worden Public Development Authority------------------------------------------------------------------MS
Affordable Housing Task Force & Joint Oversight Board-------------------------------------------------MS
2021 Budget Section 9 - Page 3 of 6
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2021 Budget Section 9 - Page 4 of 6
Pos.Name & Experience Exp.Pos.Name Exp.
1 Sean Koomen 5/1/22 1 Kathleen Knoblock 5/1/23
2 Jim Todd 5/1/23 2 Michael D'Alessandro 5/1/23
3 Jennifer Rotermund 5/1/24 3 George Randels 5/1/23
4 John Nowak 5/1/22 4 Walt Galitzki 5/1/21
5 VACANT 5/1/22 5 Richard Berg, Chair 5/1/21
6 Brenda McMillan 5/1/21 6 Craig Britton, Vice Chair 5/1/22
7 Deborah Jahnke, Chair 5/1/21 7 Kathleen Croston 5/1/22
Pos.Name & Role Exp.Pos.Name Exp.
1 Pam Adams, Chair (Elected Official)N/A 1 Nan Toby Tyrrell 5/1/23
2 Sherri Hanke (At Large Position)5/1/23 2 Danny McEnerney 5/1/23
3 Amanda Milholland (At Large Position)5/1/22 3 Jason Victor Serinus 5/1/23
4 Karen Clemens (Recipient)5/1/22 4 Julie Johnson 5/1/21
5 Barb Trailer (Recipient)5/1/21 5 Michelle Hagewood 5/1/22
6 Janette Force (Recipient)5/1/22 6 Shelly Leavens 5/1/22
7 Denise Winter (Recipient)5/1/22 7 Joe Gillard 5/1/21
8 Cindy Finnie (Collector)5/1/22 8 Dan Groussman 5/1/22
9 VACANT (Collector)5/1/20 9 Nhattaleah Nichols, Chair 5/1/21
10 Cody Griffith, Fort Worden PDA Designee 5/1/23
11 Nathan Barnett (Collector)5/1/21
12 Main Street Designee (Nonvoting)5/1/21
13 Arlene Alen (Nonvoting)5/1/23
14 VACANT (Nonvoting)5/1/20 Pos.Name Exp.
1 Ann Raymond 5/1/22
2 Ellie Mathews 5/1/21
3 Jacqueline Mention 5/1/21
4 Kathy Ryan 5/1/23
Pos.Name Exp.5 Sidonie Wilson, Chair 5/1/23
1 Bruce Edward Stegall 5/1/23 6 Robert Gray 5/1/23
2 VACANT 5/1/20 7 Savannah Hensel 5/1/21
3 VACANT 5/1/21
4 Hendrik Taatgen 5/1/21
5 Sam Feinson, Chair 5/1/21
6 VACANT
7 Pat Teal 5/1/22
8 VACANT 5/1/22
9 VACANT 5/1/20
PARKS, RECREATION & TREE ADVISORY BOARD (5-7)
Meets 4:30pm 4th Tuesday at City Hall
Council Liaison: None
HISTORIC PRESERVATION COMMITTEE (5-7)
Meets 3:00pm 1st Tuesday at City Hall
ARTS COMMISSION (9 max.)
Meets 3:00pm 1st Wednesday at City Hall
LIBRARY ADVISORY BOARD (5-7)
Council Liaison: Owen Rowe
Council Liaison: Monica MickHagerCouncil Liaison: David Faber
Council Liaison: Michelle Sandoval
LODGING TAX ADVISORY COMMITTEE (11 voting)
Meets 3:00pm quarterly 2nd Tuesday at City Hall
Meets Bi-monthly 3:30pm 2nd Monday at the LLC
ACTIVE TRANSPORTATION ADVISORY BOARD (9)
Meets 4:30pm 1st Thursday at City Hall
Council Liaison: Amy Howard
2021 Budget Section 9 - Page 5 of 6
Pos.Name Exp.
1 Paul Rice, Chair 12/31/21
2 Karen Anderson 12/31/20
3 Rick Jahnke, Vice Chair 12/31/21
4 Viki Sonntag 12/31/20
5 Lois Stanford 12/31/22
6 Robert Doyle 12/31/22
7 Aislinn Palmer 12/31/22
Pos.Name Exp.
1 Gail Ryan, Vice Chair 12/31/25
2 Sherry Erickson 12/31/21
3 Richard Knight, Chair 12/31/23
Pos.Name Exp.
1 Jefferson County BoCC ( Kate Dean)N/A
2 City Council (Pam Adams)N/A
3 JeffPUD (Jeff Randall - Vice Chair )N/A
4 Jefferson County Public Health (Laura Tucker)N/A Pos.Name Exp.
5 Jefferson Healthcare (Chris O'Higgins)N/A 1 VACANT 10/24/22
6 Jeff. Transit (John Bender)N/A 2 Jeff Jackson 10/24/22
7 Port of PT ( Eric Toews/Jim Pivarnik)N/A 3 Norm Tonina, Chair 10/24/22
8 PT Paper Corp. (Sam Jones)N/A 4 VACANT
9 Cindy Jayne -Chair 12/31/20 5 Gee Heckscher, Vice Chair 10/24/20
10 Shelley Jaye 12/31/21 6 Jane Kilburn 10/24/20
11 David Wilkinson
(atmospheric/agriculture/environ. mgmt.)
12/31/22 7 Lela Hilton 10/24/20
`
12 Diane McDade 12/31/21 8 Cindy Finnie 10/24/21
13 Cara Loriz 12/31/21 9 Todd Hutton 10/24/21
14 Kate Chadwick (Policy)12/31/20 10 Herb Cook 10/24/21
15 Dave Seabrook 12/31/21 11 Terry Umbreit 10/24/21
Meets at Fort Worden Commons B
Council Liaison: Michelle Sandoval
FORT WORDEN PDA (9-11)
Name
Joanna Sanders, City Clerk
Melody Eisler, Library Director
_______, City Council (Chair)
John Polm, School District Superintendent
Richard Durr, School District Representative
________, School District Video Instructor
VACANT Education Group Representative (Optional)
CLIMATE ACTION COMMITTEE (15)
Meets even months on 4th Wednesday
VACANT, Student Representative CIVIL SERVICE COMMISSION (3)
Meets as needed
PLANNING COMMISSION (7)
_____________, Citizen Representative
VACANT Producers Group Representative (Optional)
PEG ACCESS COORDINATING COMMITTEE (8)
Meets 3:30pm 2nd Tuesday at the Gael Stuart Building
VACANT, Video Professional
Meets 6:30pm 2nd & 4th Thursday at City Hall
2021 Budget Section 9 - Page 6 of 6