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11/10/1998 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES NOVEMBER 10, 1998 The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Barbara Fahey in the Library Plaza Room, 650 Main Street, followed by the flag salute. ELECTED OFFICIALS PRESENT Barbara Fahey, Mayor Gary Haakenson, Council President Dick Van Hollebeke, Councilmember Dave Earling, Councilmember Michael Plunkett, Councilmember Jim White, Councilmember Thomas A. Miller, Councilmember ABSENT John Nordquist, Councilmember STAFF PRESENT Art Housler, Administrative Services Director Paul Mar, Community Services Director Brent Hunter, Human Resources Director Arvilla Ohlde, Parks & Recreation Director Noel Miller, Public Works Director Robin Hickok, Police Chief Jim Walker, City Engineer Rob Chave, Planning Manager Steve Koho, Wastewater Treatment Plant Mgr Sandy Chase, City Clerk 1. APPROVAL OF AGENDA COUNCILMEMBER VAN HOLLEBEKE MOVED, SECONDED BY COUNCILMEMBER WHITE, FOR APPROVAL OF THE AGENDA AS PRESENTED. MOTION CARRIED. 2. CONSENT AGENDA ITEMS COUNCILMEMBER MILLER MOVED, SECONDED BY COUNCILMEMBER VAN HOLLEBEKE, FOR APPROVAL OF THE CONSENT AGENDA AS PRESENTED. MOTION CARRIED. The agenda items approved are as follows: 3. BUDGET DISCUSSION Council President Haakenson stated that he scheduled the budget discussion this evening to give the udget Council an opportunity to ask questions of staff, with the anticipation that staff could bring answers to iscussion PP tY q � P g the questions to the budget work session scheduled on Saturday, November 14 at 8:00 a.m. Edmonds City Council Approved Minutes November 10, 1998 Page 1 (A) ROLL CALL pproved (B) APPROVAL OF CITY COUNCIL MEETING MINUTES OF NOVEMBER 2, 1998 of rmutes 11/2/98 (C) APPROVAL OF CLAIM WARRANTS #27804 THROUGH #28605 FOR THE WEEK OF pproved NOVEMBER 2, 1998, IN THE AMOUNT OF $232,278.54. .APPROVAL OF PAYROLL laim WARRANTS #22381 THROUGH #22510 FOR THE PERIOD OCTOBER 16 THROUGH Warrants OCTOBER 31,1998, IN THE AMOUNT OF $346,813.02. 3. BUDGET DISCUSSION Council President Haakenson stated that he scheduled the budget discussion this evening to give the udget Council an opportunity to ask questions of staff, with the anticipation that staff could bring answers to iscussion PP tY q � P g the questions to the budget work session scheduled on Saturday, November 14 at 8:00 a.m. Edmonds City Council Approved Minutes November 10, 1998 Page 1 Councilmember Earling asked that Art Housler, Administrative Services Director, review information given to the Council at their Retreat last February that framed the issue and concerns about the potential for declining revenue beginning in the year 2000 and 2001. He felt it would be good for the Council to review that in context of some of the anticipated decline in revenue that we are beginning to see in the budget for this year. A second issue brought up by Councilmember Earling was a request that at a public televised meeting that Mr. Housler explain the process in configuring the 106% tax increase. He referred to the budget message where it indicates that a $240,000 home would amount to a $30.00 /year increase. Councilmember Earling asked that Scott Snyder, City Attorney, review the. change in the law that restricts us from collecting retroactively the percentage of the 106% that is not taken this year. Are there special situations where we can go back and pick that up? It is an issue that the Council needs to be aware of. Councilmember Earling stated that the end of the year projections show a $1.3 million cash carryover which is redistributed in the budget. He would like to have a sense of how that money was allocated. Did that money go to satisfy particular areas? A fifth question raised by Councilmember Earling is that he would like to understand the contracts that are negotiated with other entities. He referenced the contract for fire services with the Town of Woodway. How did the City arrive at a contracted number for a year of service? It is Mr. Earling's understanding that the City of Shoreline informed the Town of Woodway that if they provided this service it would be about $75,000 higher than what the City of Edmonds' requires. He questions how the cities could be that far apart. When the contract figure is put together does it include a portion of the bonding? Councilmember Earling would also like to know if staff has thoroughly reviewed the income sources. This includes any fees, personal services, permitting issues, etc. Councilmember Earling noted the Finance Committee is looking at the issue of potentially refinancing bonds. Savings of $240,000 to $260,000 could be realized. How does the City anticipate using that money? Councilmember Plunkett questioned when the property tax was determined for 1999, was it based on the 1998 assessment? Art Housler, Administrative Services Director, replied that the amount that is included in the budget for 1999 is calculated on the basis of Referendum 47. Essentially, the large part on the regular levy is calculated by multiplying last year's revenue amount by 106 %; next, add new construction multiplied by last year's rate of $2.13; the state utility (the City does not have the assessed value on that, but he used a small amount that comes directly from the utility itself using last year's rate of $2.13); and the other figure that is calculated concerns the annexations. Mr. Housler stated that the City has added about $165 million of annexation value; this is multiplied by $2.13. Responding to Councilmember Plunkett, Mr. Housler stated this is preliminary calculations. At this time, the County does not have the assessed valuation. Mr. Housler is unable to report exactly what the rate per $1,000 will be for 1999. Councilmember Plunkett stated that he would like to receive the figures for the total property assessed valuation for 1997 and 1998. He would like to see the differences. Edmonds City Council Approved Minutes November 10, 1998 Page 2 Councilmember Plunkett referred to Referendum 49. He understands that as a result of Referendum 49 passing, the tax equalization fund would receive additional monies and again become whole by the middle of the year. Mr. Housler stated that is correct. Based on the calculations with the data available, Mr. Housler determined the City would receive about $13,000 more in 1999 than what was budgeted. He pointed out Referendum 49 does not really go into effect until July 1, 1999 and then takes a quarter to obtain data on the actual amount of taxes. Councilmember Plunkett additionally asked that if the Council does not vote to exceed the IPD, how much money would have to be cut from the budget? And, if the Council voted just to go to the IPD, how much money would that represent in property taxes? Mr. Housler indicated he would respond at the Saturday budget work session. Councilmember Miller stated the Mayor's budget message indicates that the projected revenue for 1999 is going to be $19,693,540, and the new revised projected expenditures will be $20,853,290. Elsewhere in the budget book, expenditures are listed at $20,962,000. He assumes the latter number is the correct number? Mr. Housler responded affirmatively. With regard to the property tax, Councilmember Miller asked what each percentage increase is worth? Mr. Housler responded $57,000. Councilmember Miller pointed out the projected budget reflects a 9% increase; the ending cash balance is about $100,000. He asked what service levels would be reduced, and how they would be reduced, in increments starting at 3 %, 5% and 7% of the total budget. Mayor Fahey clarified the different expenditure figures referenced by Councilmember Miller. Exhibit 1 in the budget book shows the total budget for the general operating fund at $20,962,000; this figure includes the ending cash balance. In the budget message, the figure used for expenditures for the year is with the ending cash balance backed -out. The real expenditures for the year are $20,853,290 (and then add in the ending cash balance). Councilmember Plunkett commented about assessed valuation of property, and asked that Mr. Housler provide him with a memorandum explaining what he is not understanding. He has the understanding the property taxes are based on the assessed valuation of the property in Edmonds. Mr. Housler stated he would explain it for the Council at the Saturday work session. Council President Haakenson referred to the November 2, 1998'Council meeting where a citizen inquired about the allocation of charges in the Fire Department for EMS versus suppression. He asked that Fire Chief Haworth or a representative be at the Saturday work session in order to explain this issue. Council President Haakenson reminded everyone that the Special City Council Meeting will be held on Saturday, November 14, 1998, at 8:00 a.m. at the City Hall Building, 121 5th Avenue N., third floor Great Room. 4. UPDATE ON 800 MHz SYSTEM AND ASSOCIATED COSTS Update on Mayor Fahey stated in the near future a decision will have to be made related to how to fund the 800 00 MHz MHz System. This needs to be taken into consideration as the Council considers the entire budget for System and y Associated this year, and how decisions made now could impact the future. Costs There has been a group of representatives from various cities and the County who have been meeting to try to put together a plan to develop the 800 MHz System throughout South Snohomish County and Edmonds City Council Approved Minutes November 10, 1998 Page 3 going up to Everett and Marysville. Three years ago there was an effort to implement this system countywide. A bond issue was taken to the people, which required a 60% vote plus a percentage for validation (40% of the previous election). In South County the vote was over 60% favorable for the funding for 800 MHz System, and the validation level was there. However, countywide the initiative failed. Part of the reason was that many of the rural communities in the northern part of Snohomish County did not see the need. The group of representatives that has been meeting is convinced that the need was tremendous three years ago, and has grown since then. The people who provide public safety (police and fire) have significant communication problems. In order to get an 800 MHz System in place, it is necessary to access channels that are available through the federal government. There are 17 channels that are still available, and through the efforts of cities in South Snohomish County and Everett, a guarantee was placed to purchase and utilize those channels within a certain period of time. There is now in place the ability to claim those channels providing all of the funding mechanisms are there. ' Mayor Fahey further reported that the CEOs of the cities in South Snohomish County and the Mayor of Everett met and started the process to develop an interlocal agreement by which all entities could operate and bring the system on -line for South County. This agreement would be used as the backbone, and ultimately the rest of the County could participate. Not only are the three major cities in South County and the City of Everett willing to make this happen, but also the smaller cities of Mill Creek, Marysville, and Mukilteo, as well as Woodway and Brier, have been participating. The County has agreed to be a participant so that South Snohomish County Sheriff's Department can be an integral part of the system from the beginning. This means that the cost to each city is less than originally anticipated, but the cost is still significant. Mayor Fahey stated the group of representatives negotiated the formula by which the 800 MHz System is to be funded. Each city/entity would pay an amount based upon a formula that includes: 25% for population base, 50% on usage (the amount of radio traffic usage), and 25% on geographical area (square miles). The percentage of the total cost for the infrastructure to be paid by Edmonds would be 8 %. This equates to $1,339,002. In addition, each city will need to pay for the cost of the radios needed to link into the system. The City of Edmonds will need to pay $471,000 for the radios (60 radios for the Fire Department, and 97 radios for the Police Department). Each city will also need to share a proportionate cost of the EMS radios that will be utilized through SnoCom/Medic 7. This cost amounts to approximately $4,800 as the City of Edmonds' share. Mayor Fahey pointed out the figures presented are the "worst case" scenario. It is estimated that the City of Edmonds' total cost will be approximately $1.8 million. There are many factors yet to be determined; these are best guess estimates until the funding mechanisms are in place. It is assumed this number could be a little lower; the figure will likely be somewhere between $1.5 and $1.8 million as Edmonds' share of the infrastructure costs and costs of radios. There will then be an additional maintenance and operation cost every year. It will start at approximately $20,000. There has been some talk about whether to also include in the annual assessments an amortization cost so that by the end of the lifetime of this equipment there will be money in place to reproduce it. This is still a debatable issue and the bulk of the cities do not seem inclined to build in amortization costs because it is then asking citizens through . the funding mechanism to pay not only for the cost of what is being put into place now, but for the future, instead of expecting people in the future to assume the costs for the services they will be receiving for future equipment. Edmonds City Council Approved Minutes November 10, 1998 Page 4 Mayor Fahey reported that at this point in time, the County has agreed to do the bonding for the 800 . MHz System. Using the overhead projector, she displayed a chart entitled 800 MHz Bond Issuance Cost. The capital costs for Edmonds is reflected at $1,835,746. If the City chooses to do a voted bond issue, it would cost the City of Edmonds approximately $87,000. Therefore, the total amount of the bond issue would probably be in the neighborhood of $1.9 million. At that rate, figured on,a 9 -year debt service, assuming the City chose a levy lid lift, the annual debt servicing cost would be $264,560. It is also estimated that if the City didn't use an election process and used an alternate form of funding the indebtedness /payment, then the cost to debt service this amount of money would be $256,292. The Mayor pointed out it is more cost effective for the City to tie into the County, because the County can do a much larger bond and obtain a better interest rate. However, the City would then be making annual payments to the County. Mayor Fahey explained that if the City uses a levy lid lift, which requires 50% plus 1 positive vote of the people without a validation level, the City could only use that mechanism for nine years. The County is planning on doing a fifteen -year bond. The group of representatives is still trying to determine if there is a way to prepay and save some of the interest costs. If there isn't the City would end up paying more to the County over fifteen years on interest than, if the City does its own .bond and pays it off in nine years. The Mayor stated it needs to be determined within the next couple of weeks if the City will attempt to find a way to make annual payments in the neighborhood of $260,000 a year to the County towards the bond using City funds, or will the City consider taking a vote out to the people asking for a levy lid lift for nine years, which would generate enough money to debt service the bonding. Another alternative is to do an excess property tax initiative, which would be like the Public. Safety Bond that requires 60% approval of the people, and a 40% validation rate. This could actually be collected as less money per year but for a longer period of time. The final draft of the interlocal agreement will be considered by the group of representatives on Friday, November 13. That agreement will then be brought back to all of the cities for consideration. This agreement is being drafted by Steve DeJulio, an attorney with Foster, Pepper, Sheffelman. In order to .place this matter on the ballot for February 1999, it is necessary to make a decision by the end of this month. Mountlake Terrace has indicated that they will need to take this to a vote of the people; Lynnwood has not yet made a determination. The Mayor stated that in trying to determine another way to fund this project, the only funds that will become free within the next few years is when the Library Bond is no longer being paid (this is the equivalent of about $313,000). She pointed out these funds have been considered for other needs in the City as well. In the budget message, the Mayor had indicated that there is some excess money generated every year on interest on the emergency reserve fund, which accrues about $100,000 of interest each year. There is about $240,000 in that fund over what is needed to retain the City's bonding capability right now. Responding to questions of Councilmember Miller, Mayor Fahey stated that it is hoped that any community that is going to use a funding mechanism that requires a vote of the people be on the same timeline, putting out the same message of how critical this project is to the public safety needs -now and in the future. Each city will have its own ballot measure running simultaneously. Lynnwood, Mountlake Terrace and Edmonds are the only cities considering taking this matter to the voters for funding; every other community is using some other funding mechanism. Edmonds City Council Approved Minutes November 10, 1998 Page 5 r, Dev. Svcs. Director, Interview & Council Confirmation Council President Haakenson asked that Councilmembers review the packet of information and within a week let him know the preference for funding this project. Councilmember Van Hollebeke asked if either Lynnwood or Mountlake Terrace choose not to go forward or if their bond fails, how will that affect the cost figures that were presented this evening? Mayor Fahey stated this formula is based on the City of Edmonds paying 8 %, which is on the basis that every one of the other cities listed is on board. If any of the cities back out for any reason, then the numbers will change, and the remaining cities will have to pay a higher percentage of the total cost up front. Whenever an additional city does become a participant, there would be latecomers' fees. Mayor Fahey added that staff has been looking at capital infrastructure needs for the City of Edmonds. The last piece of all the capital structure needs that is remaining to adequately provide services in the future will be breaking apart the Facilities Maintenance area from the Parks Maintenance area. The City is looking at moving the Facilities Maintenance area to the old Public Works site, and leaving Parks Maintenance in place. The monies to fund those projects essentially are already on line. There is money projected in the year 2000 for the renovation of the facilities at City Park for Parks Maintenance. That is projected and indicated in the budget. The money for renovating the old Public Works site is in one of the special funds, and these special funds will be reviewed as part of the budget process. That was not factored into a capital expense for this year because it was felt there would not be access to the old Public Works site in 1999, depending how long it would take Chambers Cable to vacate. There is a possibility now that Chambers Cable will be moving out mid -year, and if so, staff will come forward with a proposal to remodel that facility. It will not be necessary to look at any additional funding mechanism in order to make this happen. Councilmember Van Hollebeke asked that Saturday's budget work session also look at the projects that have been mentioned that could be funded by using funds currently used to pay the Library Bond. He would like to know the highest priority. 5. INTERVIEW OF DEVELOPMENT SERVICES DIRECTOR AND CONFIRMATION BY COUNCIL At 7:53 p.m., the Mayor and City Council recessed to conduct an interview of the Development Services Director in the Small Plaza Room. It was anticipated the interview would last for 30 minutes. At 8:10 p.m. the Mayor reconvened the meeting. COUNCILMEMBER VAN HOLLEBEKE MOVED, SECONDED BY COUNCILMEMBER EARLING TO CONFIRM MR. RAYMOND MILLER IN THE NEW POSITION OF DEVELOPMENT SERVICES DIRECTOR. MOTION CARRIED. Mayor Fahey adjourned the meeting of the full Council to Committee meetings at 8:11 p.m. BARBARA S. FAHEY, MAYOR lzt •� ,df La , SANDRA S. CHASE, CITY CLERK Edmonds City Council Approved Minutes November 10, 1998 Page 6 Revised 1116198 (12:30 p.m.) AGENDA EDMONDS CITY COUNCIL Plaza Meeting Room - Library Building 650 Main Street 7:00 -10:00 p.m. NOVEMBER 10, 1998 FULL COUNCIL REVIEW 7:00 P.M. - CALL TO ORDER FLAG SALUTE 1. APPROVAL OF AGENDA 2. CONSENT AGENDA ITEMS The City Council Committee meetings are work sessions for the City Council and staff only. The meetings are open to the public but are not public hearings. The City Council will meet separately as committees in different meeting rooms as indicated below. 6. COMMUNITY SERVICES COMMITTEE (Large Plaza Meeting Room, Library Building, 650 Main Street) (A) BRACKETT'S LANDING NORTH BULKHEAD IMPROVEMENTS UPDATE (10 Min.) (B) DISCUSSION OF WASTEWATER TREATMENT PLANT GENERATOR FIX (10 Min.) (C) DISCUSSION OF INTERIM ZONING ORDINANCE TO CLARIFY BELOW- GROUND DEVELOPMENT SETBACKS (10 Min.) (D) FOLLOW -UP DISCUSSION ON PLANNING FEES (10 Min.) 7. FINANCE COMMITTEE (Anderson Center, 700 Main Street, Room 113) (A) REPORT ON PROPOSALS RECEIVED TO PROVIDE OFFICE SUPPLIES, FURNISHINGS, EQUIPMENT AND PRINTING SERVICES (15 Min.) (B) DISCUSSION ON REFUNDING EXISTING BOND ISSUES (15 Min.) (C) APPROVAL OF PETTY CASH EXPENDITURES FOR THE MONTH OF OCTOBER 1998 (5 Min.) 8. PUBLIC SAFETY COMMITTEE (Small Plaza Meeting Room, Library Building, 650 Main Street) NO AGENDA ITEMS AVAILABLE Parking and meeting rooms are accessible for persons with disabilities. Contact the City Clerk at (425) 771 -0245 with 24 hours advance notice for special accommodations. The Council Agenda appears on Chambers Cable, Channel 32.