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10/10/2000 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES October 10, 2000 The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Gary Haakenson in the Library Plaza Room, 650 Main Street, followed by the flag salute. ELECTED OFFICIALS PRESENT Gary Haakenson, Mayor Jim White, Council President Pro Tem Dave Earling, Councilmember Michael Plunkett, Councilmember Lora Petso, Councilmember Dave Orvis, Councilmember Christopher Davis, Councilmember ELECTED OFFICIALS ABSENT Thomas A. Miller, Council President 1. APPROVAL OF AGENDA STAFF PRESENT Tom Tomberg, Fire Chief Robin Hickok, Police Chief Duane Bowman, Development Serv. Director Stephen Clifton, Community Services Director Peggy Hetzler, Administrative Services Director Doug Farmen, Assistant Admin. Serv. Director Rob Chave, Planning Manager Arvilla Ohlde, Parks and Recreation Director Don Fiene, Assistant City Engineer Mike Stark, Information Services Coordinator Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder COUNCILMEMBER DAVIS MOVED, SECONDED BY COUNCILMEMBER ORVIS, FOR APPROVAL OF THE AGENDA AS PRESENTED. MOTION CARRIED UNANIMOUSLY. 2. CONSENT AGENDA ITEMS Councilmember Earling requested Item B be removed from the Consent Agenda. COUNCILMEMBER DAVIS MOVED, SECONDED BY COUNCILMEMBER ORVIS, FOR APPROVAL OF THE BALANCE OF THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: (A) ROLL CALL Approve (C) APPROVAL OF PAYROLL CHECKS #31384 THROUGH #31487 FOR THE PERIOD Payroll SEPTEMBER 16 THROUGH SEPTEMBER 30, 2000 IN THE AMOUNT OF $344,095.87 Checks ultiple (D) PROCLAMATION IN HONOR OF MULTIPLE SCLEROSIS AWARENESS MONTH, Sclerosis OCTOBER 2000 Awareness 11117eio­#986 (E) RESOLUTION NO. 986 AMENDING THE FEE SCHEDULE ADOPTED BY W-endingi RESOLUTION NO. 967 ESTABLISHING FEES FOR THE CITY'S PLANNING, PUBLIC Me Fee I WORKS, BUILDING, AND OTHER FEE STRUCTURES, INCLUDING A SAVINGS CLAUSE Edmonds City Council Approved Minutes October 10, 2000 Page 1 Ord (F) ORDINANCE NO. 3329 AMENDING THE PROVISIONS OF EDMONDS COMMUNITY Geolologic- gic- ally DEVELOPMENT CODE SECTION 20.15B.110, DEVELOPMENT STANDARDS — Hazardous GEOLOGICALLY HAZARDOUS AREAS Areas Item B: Approval of City Council Meeting Minutes of October 3, 2000 Councilmember Earling advised he was absent from the October 3 meeting and would abstain from the vote. Approve COUNCILMEMBER ORVIS MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, FOR 10/3/00 APPROVAL OF CONSENT AGENDA ITEM B. MOTION CARRIED UNANIMOUSLY. The Minutes agenda item approved is as follows: (B) APPROVAL OF CITY COUNCIL MEETING MINUTES OF OCTOBER 3, 2000 relim. 3. PRESENTATION OF PRELIMINARY 2001 BUDGET 2001 Budget Mayor Haakenson thanked staff for their cooperation during the budget process, particularly the Finance Department who gathered the information for the budget book. He expressed special thanks to Executive Assistant Jeanne Startzman who developed the PowerPoint presentation and Information Services Coordinator Mike Stark for his technical assistance. Mayor Haakenson explained he asked staff to begin budget preparation earlier than has occurred in the . past with an eye toward a five year plan versus focusing only on 2001. He said this allowed Council to receive the budget three weeks earlier_ than last year and hopefully would allow the budget to be approved in a more timely fashion than had occurred in the past. He explained in the past, one Councilmember was asked to serve on the Mayor's Budget Review Committee. This year he requested two Councilmembers serve on the budget review team, Councilmembers Petso and Orvis. Mayor Haakenson expressed his appreciation for the time both spent attending meetings and he hoped they enhanced their knowledge of the budget process. Mayor Haakenson said although the City did not face I -695 this year, there was another similar initiative on the ballot, I -722. He commented that although the constitutionality of I -695 was still being determined by the courts, legal counsel indicated the City could operate as though I -695 did not exist, and could approve a property tax increase without a vote of the people. The Legislature has already indicated the $30 license tab fee would remain regardless of the court's decision. Mayor Haakenson said the preliminary budget assumed I -695 would be ruled legal and enforceable. I -722, if approved at the polls, would void all taxes and fees passed by the City from July 22, 1999 through December 31, 1999, requiring the City to refund $1.3 million authorized in that time period. He questioned how fees that were legally issued during a time period could later be ruled illegal, but acknowledged the courts'would make that determination. He said if I -722 was approved by voters, a revised budget would be produced. Mayor Haakenson explained the State, in response to cities that were heavily impacted by the passage of I -695, passed legislation to return some funding to cities on a one -time basis. Edmonds received $222,000 in 2000 and $444,000 in 2001. Although this was not nearly the amount received in the past, it improved the City's long term financial outlook. When the City's five year projections were reviewed earlier this year, it appeared very dismal. Several events improved that situation, including the State funding, large building projects that increased permit and development revenues, and phenomenal new car sales that increased sales tax revenues. While the additional revenue was welcome, Mayor Haakenson explained it could not be relied upon on a consistent basis. In addition, the City received Edmonds City Council Approved Minutes October 10, 2000 Page 2 1 u approximately $900,000 in unbudgeted MVET as final payment after the passage of I -695. After careful review of the Finance Department's revenue projections, he agreed to the use of a 4% revenue projection for the five year plan rather than the 3% used earlier this year. He said the additional revenues created a rosier basis for the 2001 budget and reflect approximately $1.8 million in "unanticipated revenues" for 2000. Mayor Haakenson explained another departure from past practices was a determination of departmental budget baselines. In the past departments submitted budgets using last year's budget with the addition of the upcoming year's needs. This year, the Finance Department calculated all baseline budgets; if the department needed additional funds, they were required to complete "a decision package." The Budget Review Committee then recommended whether to fund the decision package. All departments would be able to provide their service delivery within the confines of the budget. Mayor Haakenson explained the 2001 budget did not include a property tax increase. He displayed a chart illustrating revenue streams and explained the City's 2001 revenue stream would be reduced by $707,000 from 2000. He reviewed increases /decreases in revenue for 2001 compared to 2000 and the assumed methodology for each revenue category: U 18 ¢� , Property Tax No levy increase assumed; $65,000 $65,000 included for new construction EMS Property Tax No levy increase assumed; $14,000 $14,000 included for new construction Sales Tax 4% overall increase based on $150,000 forecasting model Utility Tax 6% overall increase $154,000 Intergovernmental Loss of MVET — 2001 backfill $(925,000) funding received in 2000 Police Services Expiration of COPS Fast Grant $(150,000) while retaining the officers Building Services Based on anticipated decline in $(280,000) building activity Fines/Forfeitures Expected to decline due to 2000 $(55,000) amnesty receipts All Other Revenues $319,700 Mayor Haakenson explained expenses were anticipated to increase at the rate of 6% for 2001. He displayed and reviewed the following list of significant items contained within the overall 6% increase: Edmonds City Council Approved Minutes October 10, 2000 Page 3 Temporary Fire Department Training Officer Overtime $41,040 Fire ReplacementTund Transfer $50,000 Building Maintenance Debt Service $45,000 Paramedic Funding in Fire Department $200,000 Medic 7 Contract Increase $14,000 Sno -Isle Contract Increase $149,000 Public Defender Services $15,000 . Increased Litigation Fees $20,000 Technology Projects $101,100 Civil Service and Labor Negotiations Costs $31,600 Endangered Species Act Costs $95,000 Parks/Recreation Baseline Adjustments $58,180 Suppression/EMS Baseline Adjustments $81,460 Police Baseline Adjustments $11,970 Police Equipment $9,460 Other Baseline Increases $177,190 v a : dcla rcures 1N Dlt 5�b .?,..c .....,-°° ._x�cm ._ Mayor Haakenson emphasized there were no new employee positions in the proposed budget. He commented the $95,000 budgeted for ESA costs was only just the beginning and those costs were anticipated to "skyrocket" in years ahead. Mayor Haakenson explained the Budget Review Committee reviewed $1.9 million in decision package requests and funded only $1.1 million, rejecting $800,000 in decision package requests. The Budget Review Committee recommended a straight fund transfer and some capital purchases be funded in 2000 rather than in 2001. Unfortunately, the Councilmembers on the Budget Review Committee changed their recommendation regarding expending the one -time only decision packages in 2000 using unanticipated revenues. The affect of this change was that several charts, including the five year plan, were incorrect. Particularly affected was the ending cash balance for 2000 which would now be higher and the deficit for 2001 would also be larger. The five year plan was relatively unchanged with the exception of the 2000 ending cash balance and 2001 deficit. Further, the committee recommended that rather than fund the building maintenance fund via a $500,000 transfer from the General Fund to repair /replace wiring at the Francis Anderson Center, they recommended the cost be funded via issuance of debt. Therefore an amount of $45,000 was added to the cost for debt service rather than a one -time, lump sum transfer of $500,000. Mayor Haakenson explained there were several capital purchases including $200,000 for additional Street Fund Transfer and additional capital purchases recommended by the Council Review Committee for funding in 2000 rather than 2001. He reiterated that recommendation had been withdrawn by the Councilmembers on the Budget Review Committee. The Budget Review Committee also recommended the addition of $450,000 in a contingency reserve for potential claims that may occur in 2001, which also includes Mayor Haakenson's request for $100,000 in potential legal fees for defense of possible claims due to construction of the public safety complex. He displayed and reviewed a list of capital projects originally recommended to be funded in 2000 but now would be funded from the 2001 budget: Edmonds City Council Approved Minutes October 10, 2000 Page 4 V I •�•.�Ik�R E '.�' Administration �i `s"!dd�'"4 9 °3E "#E' `6 � Computer Network Upgrade � m `� k $ 20,000 Building Vehicle 19,000 Engineering Cell phones, GIS software 1,450 Parks Maintenance Vehicle 30,000 Parks Maintenance Table Saw 4,000 Recreation Fax Machine and Tables 4,800 Police Investigation Body Armor, Camera 3,010 Police Patrol Body Armor, misc. equipment 19,920 Police Training Small Equipment 7,400 Property Management Scales 700 Traffic Motorcycle, software 10,140 wee _ .. Mayor Haakenson displayed the five year forecast for 2000 — 2005. He commented revenues still outpaced expenses on the five year plan but with a narrower margin than in the past. He explained the five year forecast reflected two assumptions that needed to be studied by Council. The first assumption was a.3% property tax increase each year beginning in 2002. He acknowledged this assumption could change year to year but the five year, forecast in the budget book reflected a 3% property tax increase for years 2002 -2005. He pointed out the remaining cash at year end began to dwindle appreciable in 2005 but with "a 3% property tax increase, 2006 began with a $675,000 cash balance. Mayor Haakenson explained the second assumption was related to-the SnoIsle library. He said for 2001, funding for SnoIsle would be paid from. the General Fund. He recommended the City annex to the SnoIsle Library system in 2002 which would require a vote of the people, presumably in the September primary in 2001. He hoped the Council would take a long term view of funding the library and make a decision in the weeks ahead so that a committee could be formed to take the issue of annexation to the public in January, thereby allowing proponents eight months to educate the public regarding this issue. He. said if the City continued to fund the library from the General Fund, some budget adjustments would be required in future years. Mayor Haakenson said the preliminary budget book contained five year. forecasts for the City's other major funds. He recalled numerous presentations staff had made to the Council over the past year regarding the need for rate increases in. the street, sewer and stormwater funds, areas that would be heavily impacted by ESA requirements. He indicated he requested staff delay requests for rate increases until the I -695 issue was resolved by the courts. " Mayor Haakenson said the Council .should find the budget book very informative. More detailed information.regarding revenue and expense projects had been added and the Exhibits section contained information explaining how the budget was formulated. He reiterated his appreciation for the participation of Councilmembers Petso and Orvis and looked forward to a speedy review of the budget by Council. He said staff and he would be available to assist the Council in their deliberations. He said the public was invited to the first budget workshop scheduled for Saturday, October 21, 9:00 a.m. — 12:00 p.m. on the 3`a Floor of City Hall. Councilmember Plunkett commented this was the third City budget he had been involved in reviewing and it was the easiest to understand. He, expressed appreciation for the five year projections, the decision packages, and department baselines. Edmonds City Council Approved Minutes October 10, 2000 Page 5 Councilmember Orvis expressed his appreciation for format of the preliminary budget. He appreciated no property tax increase was proposed for 2001, that police and fire positions have been.restored, that Fire Department equipment would be purchased, and an ALS contingency was established to assist with the transition from Medic 7. Councilmember Earling recalled there had been a series of budget amendments made in early 2000 that increased the budget and asked if those had been factored into the preliminary budget. Mayor Haakenson explained some items were included in the budget as decision packages and others may not have been included. Administrative Services Director Peggy Hetzler explained any expenditures approved during the year that were funded via the Council Contingency, had not been included in the baseline and were presented as decision packages because the Council Contingency Fund was not an ongoing funding sources. She said adjustments that were not funded via the Council Contingency were included in the baseline. For example, the Fire Department overtime for acting Battalion Chiefs was a decision package. Councilmember Earling clarified if Council wanted to include those items, they would need to be added to the budget. Ms. Hetzler agreed. Ms. Hetzler explained each department's baseline was developed using their 2000 adopted service levels, adjusted for increases in salaries and benefits but no other categories were increased for inflation. The Budget Review Committee considered approximately $1.9 million in decision packages, some of which were requests for inflationary increases in supplies and small equipment, requests for new positions, and requests for capital items that were a one -time expenditure. A member of the Budget Review Committee, Councilmember Petso suggested consideration be given to isolating requests in the decision packages that were of a one -time only nature and fund those in 2000 using unanticipated revenues. Ms. Hetzler explained staff determined it made a lot of sense to take this approach (to use the $1 million in unanticipated revenues to fund the approximately $800,000 in one -time expenditures) so that expenditures /revenues in 2001 were better "matched." Therefore, rather than a deficit of $1.5 million, the five year forecast showed a deficit of $770,000 in 2001. Ms. Hetzler referred to the list of one -time only requests to be funded in 2000, the most significant being an advance transfer to the Street Fund. She explained an attempt had been made in the past to increase the General Fund transfer to the Street Fund to address numerous overlay projects but that had not been accomplished. A decision package was submitted to increase the Street Fund transfer by $200,000, one of the items originally believed could be advance- funded in 2000 and not reflected in the 2001 budget. There had also been discussion regarding establishing a contingency reserve for outstanding items such as the Public Safety litigation, self - insurance medical claims runoff, back - funding of employee retirement plan, etc. Therefore, it was recommended $450,000 of the unanticipated revenue be used for these contingencies. The other one -time only expenditures, totaling $120,420 were those smaller capital purchases Mayor Haakenson previously reviewed. Ms. Hetzler said the five year forecast showed $770,000 expended in 2000 for items requested as part of the 2001 budget ($200,000 street fund transfer, $450,000 contingency fund, $120,000 for miscellaneous one -time expenditures). She said a decision regarding the contingency funding and the Street Transfer could be made anytime before the end of 2000. If the Council wished to have the $120,000 in smaller capital purchases made with 2000 cash, authorization would need to be provided now to enable adequate time to create purchase orders, place orders, and receive and pay for the equipment prior to year end. She requested Council provide direction regarding whether staff should proceed with ordering these items or whether they would be considered in the 2001 budget. Edmonds City Council Approved Minutes October 10, 2000 Page 6 Councilmember Plunkett asked if a decision was required immediately. Ms. Hetzler answered a decision was needed tonight and the purchase orders would be placed on next week's Consent Agenda. Without a decision tonight; the purchases likely would not be completed by year end. If a decision was required tonight, Councilmember Orvis preferred to consider the purchases as part of the 2001 budget. Councilmember Petso said she still did not think funding the items totaling $120,000 with unanticipated revenue in 2000 was a bad idea. She was surprised next Tuesday would not be soon enough for the Council to make a decision but was glad the Council would have more time to consider how to fund the remaining $650,000. Councilmember Plunkett observed it may be more logical to fund these expenditures in 2000 and asked whether it made any difference from an revenue /expenditure point of view. Ms. Hetzler stated that if the five year forecast was used to establish a trend, placing the one -time expenditures with one -time revenues illustrated a more normalized operating environment. She said only the Administrative Services computer network upgrade .needed to be addressed immediately, the other items could be delayed until 2001. She explained Sysco loaned the City some equipment to keep the network from failing but now want their equipment back. She said delivery would require 9 -10 weeks and if it was not paid for by year end, it would be included as a 2001 expenditure, requiring an amendment to the 2001 budget. COUNCILMEMBER PLUNKETT MOVED, SECONDED BY COUNCILMEMBER PETSO, TO AUTHORIZE STAFF TO EXPEND $20,000 FROM UNANTICIPATED REVENUE FOR THE ADMINISTRATIVE SERVICES NETWORK UPGRADE. Councilmember Davis expressed concern with approving a $20,000 expenditure without any information. Ms. Hetzler explained the upgrade included hubs, routers and switches for the City's network. She said the purchase would be made via the State contract. The total was $58,000 but the cost was split 50150 between the General Fund and the Combined Utility. She also had sufficient funds remaining in her technology budget to fund the additional $5,000. She explained in the 2000 budget, the Council authorized the purchase of a new financial system, building permit system and parks /recreation system. When those software packages were installed, the City's network could not handle the increased traffic. A diagnostics team was hired to review the configuration between the Public Safety building, City Hall, Treatment Plant, Public Works, etc. to determine why the system could not perform. They learned the network had been adequate for the smaller .programs but the more powerful software exceeded the network's speed capacity. They also learned there was a problem with the City's firewall and the City's server was being bombarded with data packets from Norway when'users sent their traffic via the City's server to divert it to others, allowing them to be anonymous senders. The proposed $58,000 would ensure traffic was routed efficiently, firewalls installed properly, etc. Councilmember Plunkett emphasized this was part of the ongoing networking that began several years ago. Ms. Hetzler agreed, stating it was part of the five year plan. Staff had been optimistic that the upgrade would not be necessary until 2001 or 2002. MOTION CARRIED UNANIMOUSLY Ma r Haakenson adjourned the Council to Committee meetings at 7:45 p.m. ARY AAKENSON, MAYOR SANDRA S. CHASE, CITY CLERK Edmonds City Council Approved Minutes October 10, 2000 Page 7 AGENDA EDMONDS CITY COUNCIL Plaza Meeting Room - Library Building 650 Main Street 7:00 -10:00 p.m. OCTOBER 10, 2000 7:00 P.M. - CALL TO ORDER FLAG SALUTE 1. APPROVAL OF AGENDA 2. CONSENT AGENDA ITEMS (A) ROLL CALL (B) APPROVAL OF CITY COUNCIL MEETING MINUTES OF OCTOBER 3, 2000 (C) APPROVAL OF PAYROLL CHECKS #31384 THROUGH #31487 FOR THE PERIOD SEPTEMBER 16 THROUGH SEPTEMBER 30, 2000, IN THE AMOUNT OF $344,095.87. (D) PROCLAMATION IN HONOR OF MULTIPLE SCLEROSIS AWARENESS MONTH, OCTOBER 2000 (E) PROPOSED RESOLUTION AMENDING THE FEE SCHEDULE ADOPTED BY RESOLUTION NO. 967 ESTABLISHING FEES FOR THE CITY'S PLANNING, PUBLIC WORKS, BUILDING, AND OTHER FEE STRUCTURES, INCLUDING A SAVINGS CLAUSE (F) PROPOSED ORDINANCE AMENDING THE PROVISIONS OF EDMONDS COMMUNITY DEVELOPMENT CODE SECTION 20.1513.110, DEVELOPMENT STANDARDS — GEOLOGICALLY HAZARDOUS AREAS 3. (60 Min.) PRESENTATION OF PRELIMINARY 2001 BUDGET ADJOURN TO COMMITTEE MEETINGS 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. 4. COMMUNITY SERVICES /DEVELOPMENT SERVICES COMMITTEE (Large Plaza Meeting Room, Library Building, 650 Main Street) (A) DISCUSSION ON RIGHT -OF -WAY USE NEAR 16008 75TH PLACE WEST (20 Min.) (B) DISCUSSION ON LAND USE REGULATION OF ANIMALS (20 Min.) (C) REVIEW OF RESEARCH ON PARKING STANDARDS (15 Min.) (D) DISCUSSION ON STREET STANDARD AMENDMENTS FOR RESIDENTIAL STREETS (15 Min.) 5. PUBLIC SAFETY COMMITTEE (Small Plaza Meeting Room, Library Building, 650 Main Street) (A) DISCUSSION ON DIVE TEAM BOAT, MOTOR AND TRAILER (15 Min.) 6. FINANCE COMMITTEE THE FINANCE COMMITTEE WILL NOT BE MEETING THIS EVENING. 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 46 Delayed telecast of this meeting appears the following Wednesday at noon and 7: 00 p.m., as well as Friday and Monday at noon on Channel 46.