Form revised March 16, 2004

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Office of Policy and Management	Catherine Cornwall 684-8725	Barbara Gangwer/615-0768

Legislation Title: Second Amendment to Interlocal Agreement between Yakima County and the Cities for Jail Services

· Summary of the Legislation:

The purpose of this Second Amendment to the Interlocal Agreement with Yakima County for Jail Services is to clarify the responsibilities of the parties with respect to billing and payment, the annual reconciliation, the daily fee for unused beds, and the medical premium.

If approved, this agreement will reduce the fee for up to 100 beds of the King County cities’ 440 minimum bed commitment. This fee reduction will result in an annual savings of approximately $1.1 million total for all 35 consortium cities in 2005. This agreement will also guarantee Yakima County with sufficient revenue to continue its jail construction project, which could not proceed if the consortium of cities paid nothing for the unused portion of the original commitment of 440 beds.

Seattle’s share of the savings is $390,000. The savings to the consortium cities could increase to more than $1.6 million annually by the year 2010. In addition, this amendment creates a process for quarterly and annual reconciliations, and establishes appropriate medical and therapeutic charges.

· Background:

The existing interlocal agreement between the 35 consortium cities (including Seattle) and Yakima County requires the cities to pay for 440 beds at Yakima County whether the beds are used or not. This amendment to the interlocal agreement was negotiated on behalf of the consortium cities during the past 18 months in response to the current low usage of the Yakima beds. The negotiating team included the following representatives:

Penny Bartley –Manager, Staff and Auxiliary Services Divisions, City of Renton

Diane Carlson – Director of Intergovernmental Relations, City of Bellevue

David Cline, Assistant City Manager, Burien

Jay Covington – City Administrator, Renton

Catherine Cornwall – Senior Policy Analyst, Seattle

Jim Kelly – Police Chief, Auburn

Pete Lewis – Mayor of Auburn

Gary Long – City Manager, Burien (Chair of the City Jail Administration Group)

Jim Montgomery – Police Chief, Bellevue

David Moseley – City Manager, Federal Way

Nina Rivkin – Senior Policy Analyst, City of Redmond

All of these representatives recommend approval of this amendment. The Yakima County Commissioners approved the amendment on November 9, 2004. Cities are being asked to provide formal approval prior to December 31, 2004, the proposed effective date of the amendment.

Proposed Amendment

The proposed amendment makes the following changes to the interlocal agreement with Yakima County.

Duration: The current interlocal agreement with Yakima County ends December 31, 2010. The proposed amendment allows for a two year extension of the interlocal agreement if agreeable to both Yakima County and to the cities. If the cities want to extend the contract, they need to notify Yakima County by July 1, 2009.

Billing and Payment: Payment shall be due to Yakima County within thirty days from the date the statement is received. Payments not received by the 30^th day shall bear interest at the rate of 1% per month until payment is received.

Daily Fee: The proposed amendment reduces the amount cities will pay for up to 100 unused beds by 48%. Under the terms of the amendment, cities will pay the full Bed Maintenance Fee on 340 beds, even if they are unused, and for all city inmates over 340. Retroactive to October 1, 2003, cities shall pay the Reduced Rate Fee for each unused bed up to a maximum of 100 beds. The cities will not pay the medical premium fee on unused beds.

New Fee Schedule

Year	Bed Maintenance Fee (340 bed min.)	Medical Premium	Reduced Rate Fee (up to 100 unused beds)
2002	$51.00	$5.00
2003	$53.55	$5.25	$27.75
2004	$56.23	$5.51	$27.75
2005	$59.04	$5.79	$28.45
2006	$61.99	$6.08	$29.19
2007	$65.09	$6.38	$29.96
2008	$68.34	$6.70	$30.77
2009	$71.76	$7.04	$31.62
2010	$75.35	$7.39	$32.51

This rate change will collectively save Seattle $390,000 per year (and collectively, all the cities over $1.1 million a year). The 100 Reduced Rate beds will be allocated to consortium members who fail to meet their minimum bed commitment and will be based on each city’s share of the 440 total bed purchase. Seattle will receive 35 of the 100 reduced rate beds (Seattle’s 155 minimum bed commitment represents 35% of the 440 bed commitment).

Reconciliation: Retroactive to October 1, 2003, Yakima will bill each city quarterly for unused beds (the difference between the city’s minimum bed commitment and its actual use). A portion of the unused beds shall be charged at the Reduced Rate Fee. The number of each city’s unused beds that will be charged at the Reduced Rate Fee is shown in Attachment B to the amendment. The payment for beds will work as follows:

· Each month, Seattle pays Yakima County for its actual bed use.

· Each quarter, Seattle pays for the difference (if any) between its actual bed use and its bed commitment of 155 beds.  This payment is a combination of the City's share of the reduced rate beds and the full rate beds.

· At the end of the year, cities whose jail use exceeded their bed commitment are identified.  Any overage is applied as a credit against all the cities which did not meet their bed commitment.  Cities which did not use all of their reduced rate beds are also identified; any surplus reduced rate beds are reallocated to the rest of the cities. 

Medical Premium: The proposed amendment makes clear that cities will pay the medical premium only on used beds. It also clarifies that Yakima County may charge the cities for psychiatric services for their inmates which are either court ordered or meet a Diagnostic Statistical Manual IV Diagnosis and are deemed medically necessary by a mental health professional. These charges would come out of the Medical Premium fee the cities pay to Yakima (similar to other medical and dental charges).

· Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

__X__ This legislation has financial implications. (Please complete all relevant sections that follow.)

Appropriations:

Fund Name and Number	Department	Budget Control Level*	2004 Appropriation	2005 Anticipated Appropriation
General Fund	Criminal Justice Services	VJ100 Jail Services Budget
TOTAL				*See Note

Notes: The 2005 Budget already assumes the $390,000 in savings that will be generated by the execution of this amendment to the interlocal agreement with Yakima County.

Anticipated Revenue/Reimbursement: Resulting From This Legislation: Not Applicable.

Fund Name and Number	Department	Revenue Source	2004 Revenue	2005 Revenue
TOTAL

Notes:

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact: Not Applicable.

Position Title and Department*		Fund Name	Fund Number	Part-Time/ Full Time	2004 Positions	2004 FTE	2005 Positions**	2005 FTE**
	TOTAL

* List each position separately

** 2005 positions and FTE are total 2005 position changes resulting from this legislation, not incremental changes. Therefore, under 2005, please be sure to include any continuing positions from 2004

Notes:

· Do positions sunset in the future? (If yes, identify sunset date): Not Applicable

Spending/Cash Flow: Not Applicable.

Fund Name and Number	Department	Budget Control Level*	2004 Expenditures	2005 Anticipated Expenditures
TOTAL

* See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

· What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)

The existing Interlocal Agreement between the 35 consortium cities and Yakima County requires the cities to pay for a minimum of 440 jail beds. Through September 2004, the cities have collectively used an average of 270 beds. Seattle has a minimum bed commitment of 155 beds; through September of 2004, it has used an average of 77 beds at Yakima.

The proposed amendment reduces the amount cities will pay for up to 100 unused beds from $59.04 to $28.45 in 2005. These 100 reduced rate beds will be allocated to the cities based on their share of the 440 bed commitment. Seattle will receive 35 of the 100 reduced rate beds. These beds will save the City $390,000 in 2005. This savings has already been assumed in the 2005 budget for jail services. The calculations are as follows:

35 beds x ($59.04-28.45) x 365 days/year = $390,787

If this legislation is not implemented and the Mayor is not authorized to execute the amendment with Yakima County, it will cost the City an additional $390,787 annually.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

There are no alternatives that would achieve the same reduction in the City’s Yakima County jail costs.

· Is the legislation subject to public hearing requirements: No.

· Other Issues (including long-term implications of the legislation):

Please list attachments to the fiscal note below: None.