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01/18/2011 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES January 18, 2011 At 6:00 p.m., Mayor Cooper announced that the City Council would meet in executive session regarding labor negotiation strategy. He stated that the executive session was scheduled to last approximately one hour and would be held in the Jury Meeting Room, located in the Public Safety Complex. No action was anticipated to occur as a result of meeting in executive session. Elected officials present at the executive session were: Mayor Cooper, and Councilmembers Bernheim, Plunkett, Fraley - Monillas, Buckshnis, Peterson, Petso and Wilson. Others present were City Attorney Scott Snyder, Human Resources Director Debi Humann, and City Clerk Sandy Chase. At 6:59 p.m., Ms. Chase announced to the public present in the Council Chambers that an additional 15 minutes would be required in executive session. The executive session concluded at 7:21 p.m. The regular City Council meeting was called to order at 7:26 p.m. by Mayor Cooper in the Council Chambers, 250 5`s Avenue North, Edmonds. The meeting was opened with the flag salute. ELECTED OFFICIALS PRESENT Mike Cooper, Mayor Strom Peterson, Council President D. J. Wilson, Councilmember Michael Plunkett, Councilmember Lora Petso, Councilmember Adrienne Fraley- Monillas, Councilmember, Steve Bernheim, Councilmember Diane Buckshnis, Councilmember ALSO PRESENT Peter Gibson, Student Representative 1. APPROVAL OF AGENDA STAFF PRESENT Al Compaan, Police Chief Jim Lawless, Assistant Police Chief Stephen Clifton, Community Services /Economic Development Director Phil Williams, Public Works Director Carrie Hite, Parks & Recreation Director Scott Snyder, City Attorney Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder At Councilmember Buckshnis' request, "Reconsideration of the Vote Regarding Proposed Code Amendment to Home Occupations ECDC 20.20" was added to the agenda as Item 8A. She also requested another public hearing be held. Councilmember Wilson explained the Council directed staff to prepare an ordinance and a public hearing was held at the January 4 meeting. He asked if a public hearing was required when the final ordinance was presented to the Council. City Attorney Scott Snyder explained this was a procedural process; when a member of the prevailing side makes a motion to reconsider and the motion passes, it is scheduled on a later agenda to allow a new public hearing to be noticed. Councilmember Wilson clarified it would be reconsideration of Council direction to prepare an ordinance. Regardless of whether the reconsideration is approved, a final ordinance will be presented to the Council. He suggested waiting until the ordinance was presented in final form and scheduling a public hearing then to allow the public to respond to the final ordinance. Mr. Snyder commented because of the time required to notice a public hearing, that would add time to the process. Councilmember Wilson questioned if the public hearing would be the Council's direction to staff to prepare an ordinance or the ordinance itself. Mayor Cooper clarified Councilmember Buckshnis' request Edmonds City Council Approved Minutes January 18, 2011 Page 1 was to add an agenda item to consider a reconsideration vote. This discussion would be appropriate during that agenda item. COUNCILMEMBER PETSO MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO APPROVE THE AGENDA AS AMENDED. MOTION CARRIED UNANIMOUSLY. 2. CONSENT AGENDA ITEMS Councilmember Petso requested Item H be removed from the Consent Agenda. COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER PETSO, TO APPROVE THE REMAINDER OF THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: A. ROLL CALL B. APPROVAL OF CITY COUNCIL MEETING MINUTES OF JANUARY 4, 2011. C. APPROVAL OF CLAIM CHECKS #1231.72 THROUGH #123302 DATED JANUARY 6, 2011 FOR $468,011.40, AND #123303 THROUGH #123438 DATED JANUARY 1.3, 2011. FOR $390,291.57. APPROVAL OF PAYROLL DIRECT DEPOSIT AND CHECKS #50136 THROUGH #50168 FOR THE PERIOD DECEMBER 1.6, 2010 . THROUGH DECEMBER 31, 2010 FOR $675,925.03. D. AUTHORIZATION FOR MAYOR TO SIGN AGREEMENT OF SPONSORSHIP BETWEEN THE CITY OF EDMONDS AND THE EDMONDS CHAMBER OF COMMERCE FOUNDATION. E. INTERLOCAL AGREEMENT WITH THE CITY OF LYNNWOOD TO FUND THE RECYCLING COORDINATOR FOR 2011 AND 2012. F. AMENDMENT TO THE INTERLOCAL AGREEMENT WITH THE LAKE BALLINGER/MCALEER CREEK WATERSHED FORUM. G. AUTHORIZATION FOR THE MAYOR TO SIGN THE PROFESSIONAL SERVICES AGREEMENT WITH MURRAY, SMITH & ASSOCIATES FOR ENGINEERING SERVICES ON THE 2011 WATERLINE PROJECT. ITEM H: AMENDMENT TO HEARING EXAMINER CONTRACT. Councilmember Petso referred to an email the Council received today detailing concerns regarding the Hearing Examiner contract. She asked City Attorney Scott Snyder to address those concerns. Mr. Snyder responded the email addressed two concerns; first, why the extension is being done via an addendum/revision to the contract rather than a new contract, and references the City of Carnation's decision to adopt a new agreement. The City was interested in extending the Hearing Examiner agreement for 2 -4 weeks until a new Hearing Examiner is appointed. There were two ways to address the issue, 1) a new contract, or 2) amend the provision that prohibits it from being assigned to allow it to be assigned from the three- member Hearing Examiner group to one of its members. In an effort to keep it simple he chose the latter. With regard to the second question in the email, whether all members of the Professional Limited Liability Corporation (PLLC) needed to sign, he explained the signature of any member of the PLLC can bind the organization. Councilmember Petso asked for clarification that by approving the amendment to the Hearing Examiner contract, the Council successfully authorized the Hearing Examiner to hold hearings and make decisions. Edmonds City Council Approved Minutes January 18, 2011 Page 2 Mr. Snyder answered yes. He advised a change was made to the contract to address the citizen's comment at the January 4 Council meeting. COUNCILMEMBER PETSO MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO APPROVE ITEM H. MOTION CARRIED UNANIMOUSLY. 3. PUBLIC HEARING ON THE CONSIDERATION OF ADOPTION OF A ZONING MORATORIUM ON THE ESTABLISHMENT OF MEDICAL MARIJUANA DISPENSARIES AND DECLARING THEM TO BE AN ILLEGAL USE UNDER STATE LAW AND THE CITY'S ZONING CODE. City Attorney Scott Snyder explained when Initiative 692 was passed in 1998, now codified as Chapter 69.51A RCW, a structure was established that permitted, with an appropriate doctor's prescription, a qualifying patient to grow marijuana for personal use or have it provided by a "qualified provider." The sale, cultivation, and possession of marijuana remains illegal under state and federal law but an affirmative defense is established for qualified patients. A qualified provider can only provide medical marijuana to one qualified patient. Leaving the social issue aside, he reiterated the sale and possession of marijuana except in very limited circumstances remains illegal. Washington State Department of Health and a number of other organizations have stated the opinion that medical marijuana dispensaries are illegal uses. Beginning several months ago, staff began advising administration and the Council regarding what was occurring in other communities. Tacoma and Port Angeles have permitted dispensaries to remain in operation; King County has taken the position that they do not have the resources to address it which is similar to Seattle's approach. Redmond and Kent have taken a very proactive approach to establish rules. The purpose of tonight's discussion is to obtain Council direction to staff and those who want to establish businesses or cooperative growing operations via an interim zoning ordinance. No dispensaries are currently licensed by the City of Edmonds. One is in operation without a license and another has applied for a license. Mr. Snyder explained the purpose of an interim zoning ordinance is to establish for six months a provision that declares medical marijuana dispensaries as an illegal use within the City. He advised the State Legislature is reviewing at least two bills; one an industry sponsored bill based on California's provisions that regulate grow operations and dispensaries via their Agricultural Department and Department of Health. California's provisions provides that reasonable zoning regulations remain in effect. Regardless of any State Legislature action with regard to determining whether dispensaries are legal /illegal uses, Edmonds will need to address at a local level how dispensaries are categorized, where they should be located, and what rules are established. He summarized at the present time dispensaries are illegal uses and the sale of marijuana remains illegal under state and federal law. Police Chief Al Compaan advised at the end of the presentation, he would provide staff's recommendation which includes the City Attorney, Police Department, and City Clerk's Office. He requested Assistant Police Chief Jim Lawless share secondary impacts that law enforcement has seen in the Puget Sound area and other areas with the proliferation of medical marijuana dispensaries. He noted many jurisdictions are grappling with how to address the needs of legitimate patients which places government and law enforcement in an untenable position. From his standpoint patients are also placed in an untenable position due to the balance between law enforcement and providing a legitimate way for patients in need to procure medical marijuana. Assistant Chief Lawless explained typing "medical marijuana dispensary robbery" into any internet search engine produced numerous hits. He pointed out there are legitimate public safety concerns related to dispensaries. The law does not provide for dispensaries and it is still unlawful under both state and federal law to sell marijuana. He referred to a white paper in the Council packet from the California Chiefs Association that contains vivid examples of issues faced in California. He cited several examples: Edmonds City Council Approved Minutes January 18, 2011 Page 3 0 2008 — robbers kill a security guard at a Los Angeles medical marijuana dispensary. 0 May 2009 — four subjects commit a home invasion robbery in the Seattle neighborhood of Wallingford where the resident is operating a dispensary out of his residence. Police discover over 100 plants in the residence. The law allows 15 plants or 24 ounces. • September 12, 2010 — Colorado Springs, Colorado, burglars break through the wall of an adjacent business to access a dispensary. Police arrest one subject and believe he and the two that got away were also responsible for the attempted burglary of a second dispensary earlier that evening. • Second half 2009 — Denver Police Department investigated 25 robberies and burglaries targeting medical marijuana dispensaries. • December 16, 2010 — two people shot in Los Angeles during a robbery of a medical marijuana dispensary. 0 March 2010 — New York Times article chronicling the robbery in Seattle of Steve Sarich a local medical marijuana proponent and head of CannaCare by five subjects, one of whom Mr. Sarich shot. Also covered in the article is the beating death of an Orting man while subjects tried to steal his medical marijuana plants. Both incidents occurred within one day of each other. • December 10, 2010 — Fremont dispensary robbed and a worker beaten by two subjects. Despite security glass and five security cameras and a panic button, the robbers made off with 10 -12 pounds of marijuana. The law allows 24 ounces. • January 14, 2011 — medical marijuana dispensary raided by the South Snohomish County Regional Drug Taskforce in unincorporated Lynnwood. They seized 15 pounds of marijuana and $25,000 cash. Medical marijuana dispensaries are not allowed to charge for marijuana; many solicit donations. Assistant Chief Lawless reported there are numerous surveillance videos on YouTube documenting violent robberies of medical marijuana dispensaries. He noted the above examples do not include robberies/burglaries of people who are growing their own medical marijuana. He noted there are secondary and unintended consequences of the citizen initiative. The Police Department's position is not the social aspect but public safety and impacts to the community. Councilmember Fraley - Monillas asked what the Police Department would do to protect themselves if medical marijuana dispensaries became legal. Assistant Chief Lawless answered it would be on a case - by -case basis. If medical marijuana dispensaries become legal and they are operating within the confines of the law, nothing would be done. The problem is determining whether the dispensary is operating within the confines of the law, charging for marijuana, etc. Councilmember Fraley - Monillas asked how the Police Department could be kept safe. Assistant Chief Lawless responded if no one had ill intensions, problems would be limited. He acknowledged adopting the ordinance would not keep the community safe but it may help. In California and Oregon medical marijuana dispensaries have drawn a criminal element. The legislature will attempt to address issues this session. The sale and possession of marijuana is illegal under state and federal law and the Police Department is sworn to uphold state, local and federal law. Ultimately it will need to be addressed at the state and federal level. Councilmember Buckshnis thanked staff for their research. She relayed the experience of her nephew attending San Diego State, his entire dorm floor was robbed because one person was growing two plants. She agreed it invited problems and increased crime. Councilmember Wilson asked how the City Clerk's Office responded to someone applying for a license for a gambling facility. Mr. Snyder advised uses that are illegal under state and federal law are not entitled to receive a business license. City Clerk Sandy Chase summarized they would not be issued a business license. Councilmember Wilson noted a medical marijuana dispensary was illegal under state and federal Edmonds City Council Approved Minutes January 18, 2011 Page 4 law and he assumed someone applying for a business license for that type of business would not be granted a business license. Ms. Chase answered that was part of tonight's discussion and the action requested. She agreed a medical marijuana dispensary was not a legal use and could not be granted a business license. There is a pending business license application awaiting Council action tonight. Councilmember Wilson commented whether or not the Council passed a moratorium, a medical marijuana dispensary would not be allowed as a legal use in Edmonds and could not be granted a business license. Mr. Snyder agreed. Councilmember Wilson summarized passing a moratorium did not change the legality of the use, passing the moratorium would allow time for the Legislature to act so that staff is not placed in an indefensible position, making a judgment regarding the City's social policy. Mr. Snyder agreed that was one of the aspects. One of the reasons this was identified as a zoning ordinance was if the Council chose to take no action, a medical marijuana dispensary can locate in any zone where a drugstore is allowed. Even if the Legislature acts on the industry bill, there is still a role for zoning. Having that discussion before businesses go to the time and expense to locate in areas that it may later be determined are not appropriate avoids any discussion regarding grandfathering. With regard to Councilmember Fraley- Monillas' question, Police Chief Compaan explained until and unless the Legislature provides some structure, there will not be any consistency statewide in how the issue is approached. Until the Legislature provides some structure, the Police Department as well as legitimate patients will be in an untenable position. Police Chief Compaan relayed staff's recommendation, that the Council impose a moratorium. In the interim he was hopeful the Legislature would provide guidance. He anticipated several bills with different approaches would be introduced during this legislative session. He was hopeful before the session concluded a bill would come out of committee to the floor that would be a win -win for all the interested parties. From his standpoint, the party without a legitimate interest is the underground element that unfortunately has become apparent in a variety of jurisdictions including in the Puget Sound area. Legitimate patients, law enforcement and the community do not want that. Support for the recommendation includes the Washington State Department of Health's statement that medical marijuana dispensaries are illegal, Initiative 692 does not authorize dispensaries, and the sale, possession, cultivation and use of marijuana is still legal under state and federal law with the exception in Washington and few other states for those certified by qualified medical providers who need medical marijuana to treat a medical condition. The moratorium will provide an opportunity for further review by Edmonds as well as the Legislature. Guidance by the Legislature would allow for uniformity between jurisdictions in the approach to medical marijuana dispensaries. He summarized the people lost in the shuffle were those with physicians who feel medical marijuana is an appropriate course of treatment. Mr. Snyder emphasized nothing in staff's recommended approach would target or change the right of qualified patients and qualified providers to dispense medical marijuana. Although the Department of Health has stated medical marijuana dispensaries are an illegal use, the Department of Revenue is interested in collecting sales tax from dispensaries. Councilmember Wilson recalled one existing medical marijuana dispensary in the City was found as a result of fire inspection. Fire Marshal John Westfall explained the Fire Department inspects all new businesses and advises them to obtain a license if they have not already done so. The inspector discovered violations in the business such as wiring issues and no business license. The Fire Department has not yet done a follow -up inspection. Councilmember Wilson recalled there were 8 -12 plugs in one outlet, a clear fire hazard for the other 6 -7 businesses in the building. Fire Marshal Westfall agreed there were wiring issues, noting that type of business requires heat and electricity. Edmonds City Council Approved Minutes January 18, 2011 Page 5 Councilmember Wilson recalled during the last legislative session the Council voted 5 -2 to support a bill regarding medical marijuana. Councilmember Bernheim clarified the resolution the Council adopted was to support reducing the penalty from a misdemeanor to an infraction. Councilmember Bernheim inquired whether the moratorium would affect the rights of a legitimate dispensary. Mr. Snyder clarified there are two affirmative defenses provided, 1) a qualified provider (who provides to only one person) and 2) a qualified patient (a patient with a prescription). The initiative assumed a patient would grow their own marijuana or have it provided to them by one person who can only provide to one patient. Mayor Cooper opened the public participation portion of the public hearing. Dave Page, Edmonds, stated his belief that over 50% of the people growing marijuana were growing it to resell and /or smoke. Two years ago he was diagnosed with rheumatoid arthritis. During the time he was being evaluated, none of the medications the doctors provided offered relief. Someone suggested he try marijuana. In desperation he did and it worked. He believed marijuana was so prevalent that anyone under 70 who wanted marijuana only needed to tell a few friends. He summarized there were some people who really needed marijuana for medical reasons; he is now on a prescription medication. He would not be concerned if there were 2 -3 legitimate medical marijuana dispensaries in Edmonds. Michael Osborn, Seattle Hemp Fest member, emphasized all the legislation was very confusing. The definition of dispensary was to dispense; as a designated provider, he is dispensing. He suggested the Council consider specific language and consult people who are involved — the patients, providers, and dispensaries — to find out how to work together to make it safe for everyone. With regard to the example Assistant Chief Lawless provided regarding a security guard killed outside a medical marijuana dispensary, he pointed out a security guard was trampled on Black Friday by patrons going to a sale. He objected to the way medical marijuana dispensaries are villainized; when a security guard is killed at a medical marijuana dispensary, it is blamed on medical marijuana, not the person who did the robbery. Al Rutledge, Edmonds, commented medical marijuana was a medical problem. He suggested addressing medical marijuana dispensaries the same as adult entertainment businesses, zoning one area of the city where they would be allowed. Dawn Darington, Founder and CEO, Hemp Cloud University and Hemp Lab Wellness Center, and a medical marijuana patient, pointed out the first law passed in the United States in 1619 regarding medical marijuana required all landowners to grow hemp. Hemp cannabis is an incredible product that provides food, clothing, shelter, caulking for ships, and medicine. Until 1941, an ounce of marijuana could be purchased at a pharmacy. The current laws regarding marijuana are the result of politics, greed, racism and ambition. Washington State law is the most generous and most vague of all the medical marijuana laws. The law does not protect patients or providers. Until now, her group has not sold medical marijuana; they do low cost physician evaluations and teach classes on how to grow your own marijuana, the preferred method to ensure quality organic medicine. She pointed out in Washington State medical marijuana is not prescribed; it is a recommendation and a defense in court. She tells her students that the further they go from the center of Seattle, the more danger they are in because law enforcement is not educated on the issue. She offered to talk to any group about medical marijuana. She referred to a letter she received from the Department of Revenue stating she was required to charge sales tax on the sale of marijuana. DOR knows medical marijuana is being sold and donations do not actually work. When Washington became a medical marijuana state in 1998, there was no one to provide the marijuana except criminals. She concluded pharmacies are not outlawed because pharmacists have been shot during a robbery; there needs to be better security and the Police Department, City Council, patients and the community need to work together. Edmonds City Council Approved Minutes January 18, 2011 Page 6 Hearing no further comment, Mayor Cooper closed the public participation portion of the public hearing. In response to speakers' comments, Mr. Snyder explained the moratorium attempted to provide direction by identifying an illegal dispensary as one that has more than one month supply for one patient and any sale of marijuana. The purpose of a zoning moratorium is to set the rule; to hold things in place while rules are established. The hope is the Legislature will provide some direction. He concluded the Police Department, the City Council, administration and he supported the laws of the State of Washington and the United States. Councilmember Wilson reiterated a medical marijuana dispensary would be an illegal use whether or not the Council passed the zoning moratorium. The purpose is to develop better regulations. If the moratorium passes, he encouraged the audience to continue to be engaged particularly if the Legislature does not provide direction. COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO ADOPT ORDINANCE NO. 3833 A ZONING MORATORIUM ON THE ESTABLISHMENT OF MEDICAL MARIJUANA DISPENSARIES AND DECLARING THEM TO BE AN ILLEGAL USE UNDER STATE LAW AND THE CITY'S ZONING CODE. Councilmember Buckshnis commented before her father passed away eleven years ago, he obtained his medical marijuana from Costco. She urged caution regarding how medical marijuana was dispensed. Councilmember Bernheim did not find it necessary to pass a moratorium as the applications for a business license would be denied regardless of whether the moratorium was adopted. His mother was also a medical marijuana user during her illness. He will not support the motion as his preference is to have the business licenses denied and allow the Legislature to provide direction. Council President Peterson said he would support the motion. It is apparent in staff's presentation and the public who spoke that there is a lack of legitimacy. The opportunity to take advantage of those in need is compounded when there is no structure in place. He will continue working on the issue with the Legislature due to the importance of medical marijuana. If the Legislature does not provide any direction, he suggested revisiting the issue when the moratorium expires. If the Legislature does take action, the moratorium can be revisited sooner than six months. Councilmember Fraley- Monillas explained as a cancer patient, her doctor gave her the choice and allowed her to make the decision based on her need now or in the future. In order for the City to do this correctly; the Legislature needs to provide clear direction. At this time she did not support allowing medical marijuana dispensaries because they could not obtain a business license. Her physician said he knew where to obtain medical marijuana. Edmonds does not have the authority to allow medical marijuana dispensaries. She planned to contact her legislative representatives and urged the Council and the public to encourage their representatives to urge the Legislature to provide clear direction. I \I [Y71 Y [Y7►[N�771 � 7C�1�KY111►[Y1111�1 i �I \I C3 �i.i C3 Yi.�►i i i Y)1►I I�IYII Y i►[!"l►[Ya Mayor Cooper thanked the Council for their professional consideration of this item, recognizing it as an issue that many members of the Council and the community are passionate about. Mr. Snyder advised a zoning moratorium expires six months after the date of passage. He was hopeful discussion of zoning would continue at the Planning Board level. 4. CONSIDERATION OF AN ORDINANCE AMENDING THE PROVISIONS OF CHAPTER 4.72 ECC TO ESTABLISH AN APPEAL PROCEDURE FOR THE DENIAL OF A BUSINESS LICENSE AND CLARIFYING CERTAIN TERMS AND PROCEDURES City Attorney Scott Snyder explained the City's business license provisions include an appeal procedure for a revoked or suspended license but there is no procedure to appeal the denial of a business license Edmonds City Council Approved Minutes January 18, 2011 Page 7 application. A denied applicant always has the right to go to Superior Court but it has been the Council's desire to have appeals heard at the local level and the ability for an administrative remedy at an early stage is preferable. He suggested the Council adopt revisions to the ECC to provide an appeal process. He also suggested minor changes such as defining "day" as "business day." He requested the Council provide direction regarding whether to use the Hearing Examiner or the City Council as the appeal route. The current ordinance regarding suspension of a business license states the Council both suspends the license as well as hears appeals. He suggested the Council not do both, suggesting since the Mayor and City Clerk are responsible for issuing business licenses, they make the initial determination and the appeal be determined by the Council. Councilmember Bernheim inquired about the grounds for denial of a license. Mr. Snyder responded reasons could be an illegal use, violation of a zoning or building code provision, etc. Councilmember Plunkett pointed out rather than providing two ordinances, one with the Hearing Examiner as the appeal body and another with the Council as the appeal body, the ordinance provided has both and the motion will need to specify whether the appeal body is the Council or Hearing Examiner. Councilmember Bernheim inquired whether "day" was already defined in the code. Mr. Snyder answered not in that chapter. Day was defined differently in different chapters and although it is addressed in the ECDC, this is the ECC. Councilmember Bernheim pointed out the ordinance contains a 30 day appeal period and asked whether that should be reduced. Mr. Snyder advised the appeal period was reduced to 20 days. Councilmember Bernheim noted Section 4.72.055, denial of a license hearing, still stated 30 days. Mr. Snyder advised that was the current provision, it could be shortened. Councilmember Plunkett asked the cost to file an appeal to the Hearing Examiner. Mr. Snyder explained because this would be a constitutionally required hearing, a fee was not proposed. The cost is part of the City's cost of doing business. COUNCILMEMBER PLUNKETT MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO ADOPT ORDINANCE NO. 3834, AMENDING THE PROVISIONS OF CHAPTER 4.72 ECC TO ESTABLISH AN APPEAL PROCEDURE FOR THE DENIAL OF A BUSINESS LICENSE AND CLARIFYING CERTAIN TERMS AND PROCEDURES, WITH THE APPEAL PATH TO THE CITY COUNCIL. Council President Peterson expressed concern with appeals to the City Council because it is a technical appeal process and the possibility that the Council, as a legislative body, could be influenced. He preferred to have the Hearing Examiner hear appeals, particularly since there would be no cost to the appellant. Councilmember Plunkett commented the Council was not unduly influenced when sitting as a quasi judicial body and he did not believe the Council would be influenced in an appeal of a business license. Councilmembers are obligated to disclose any interest that may influence their decision. COUNCILMEMBER BERNHEIM MOVED, SECONDED BY COUNCILMEMBER WILSON, TO AMEND THE MOTION TO CHANGE THE APPEAL PATH FROM CITY COUNCIL TO THE HEARING EXAMINER. Councilmember Bernheim agreed with Council President Peterson that it was appropriate to have appeals to the Hearing Examiner. Edmonds City Council Approved Minutes January 18, 2011 Page 8 Councilmember Wilson agreed, citing a women's health clinic that provides abortion services as an example, anticipating politics may influence the decision. UPON ROLL CALL, THE VOTE ON THE AMENDMENT CARRIED (4 -3), COUNCIL PRESIDENT PETERSON AND COUNCILMEMBERS BERNHEIM, BUCKSHNIS AND WILSON VOTING YES; AND COUNCILMEMBERS PETSO, FRALEY- MONILLAS, AND PLUNKETT VOTING NO. 1Ysi&XIIIINUMI 1I11020/\1 ►5►1[oyY[1101F IM1 0 1010 113 0IIZe1117 910I11110r.1110110[11MI/1•� 5. AUDIENCE COMMENTS Al Rutledge, Edmonds, referred to the Governor's proposal to form a ferry district, advising people are beginning to change their mind on the Edmonds terminal project. He referred to a June 3, 2010 Hearing Examiner meeting regarding a noise variance for the Edmonds ferry terminal pavement replacement, explaining that project also included resurfacing of the transfer span and retained fill areas, repairing storm drain sinkholes and other work at the Edmonds terminal. A budget cut in the transportation budget by the Governor in May 2010 impacted that project. He suggested that if a ferry district were formed, Edmonds residents be appointed to the governing board. He was opposed to any additional taxes. Dave Page, Edmonds, pointed out most City staff took nine mandated furlough days last year. He recalled the original levy committee was concerned with funding for the remainder of the year and Yost Pool was in danger of closing until it was funded via private fundraising efforts. He expressed concern with the Council's decision to buy parks with the $1.3 million the City received from the sale of fire equipment. He was also concerned with the Council's decision to pay off City Hall bonds that had a 4% interest rate. He summarized the Council's decision to spend $1.3 million on parks would likely deter citizens from approving a levy. Roger Hertrich, Edmonds, disagreed with Mr. Page, commenting there were very low interest rates for investing the $1.3 million. Paying off the City Hall bonds would free up approximately $750,000 in unencumbered REST funds. If the City was able to obtain a grant for the purchase of a park, the value of the funds increased by 50 %. He recalled the City's attempt to purchase property in the mid - waterfront area was unsuccessful because REST funds were encumbered by bond payments. Had those funds been available, the City could have spent $1 million and obtained $500,000 in grants. He referred to a report to the Finance Committee that indicates because departments had lowered costs there was $500,000 more than budgeted. 6. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, OPPOSING THE CREATION OF A REGIONAL WASHINGTON STATE FERRIES DISTRICT THAT WOULD RESULT IN PARTIALLY SHIFTING THE STATE RESPONSIBILITY TO OPERATE AND MAINTAIN A STATEWIDE TRANSPORTATION INFRASTRUCTURE TO LOCAL COMMUNITIES. Community Services/Economic Development Director Stephen Clifton explained the Council packet contains a resolution opposing the Governor's proposal to create a regional Washington State Ferries District. The resolution cites several reasons why the Mayor and staff oppose the proposal including that the marine highway system is considered a highway of statewide significance and the proposed action would tax those who live near the highway system and not tax those living further away. Gas taxes are already used to fund in part the WSF system. The proposal to create a regional Ferries District would create another tax to fund a major highway system, thereby double taxing those who live near the ferry terminal. The proposal would also jeopardize the State's substantial investment in ferry facilities and operations by creating a regional Ferries District whose funding recommendations are subject to voter Edmonds City Council Approved Minutes January 18, 2011 Page 9 approval, thus increasing uncertainty regarding availability of funding for necessary capital, operational and maintenance needs. Mr. Clifton advised Mayor Cooper, Public Works Director Phil Williams and he participated in a conference call with the WSF Executive Director and numerous representatives from King, Snohomish and Pierce Counties; everyone was unanimously opposed to the Governor's proposal. Councilmember Wilson echoed the rationale cited by Mr. Clifton. COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO AUTHORIZE THE MAYOR TO SIGN RESOLUTION NO. 1244 ON BEHALF OF THE CITY OF EDMONDS OPPOSING THE CREATION OF A REGIONAL WASHINGTON STATE FERRIES DISTRICT. Councilmember Bernheim commented this was a political maneuver; when Governor Gregoire floated this balloon she knew no one would support it. The purpose was to demonstrate to the anti tax group that some type of solution needs to be developed, it is not enough just to say you do not want to pay for it. He felt the resolution played into the politicization without offering a real solution. Mayor Cooper asked Councilmember Bernheim if he would support amending the resolution to recommend a 3 cent increase in the gas tax to fund a Ferries District. Councilmember Bernheim answered he would definitely support that. He supported increasing the gas tax to fund public transportation and to limit the consumption of gas. Councilmember Wilson commented although some may think the Governor floated this balloon to the anti -tax community, he believed it was a legitimate policy proposal by Governor Gregoire and was a way for the State legislature and government to remove itself from funding liabilities. The ferry system is the State's responsibility and they are looking for loopholes. He supported the City loudly opposing the creation of a Ferries District. Council President Peterson agreed with Councilmember Wilson, finding this an example of trickle down economics. He thanked staff and the Mayor for developing the resolution. Councilmember Wilson echoed Council President Peterson's commendation of staff and the Mayor for following this issue. THE VOTE ON THE MOTION CARRIED UNANIMOUSLY. Mayor Cooper noted the Governor mentioned the creation of a Ferries District in her State of the State message and asked the Legislature to approve it. He committed to working with Representative Liias and speaking out in favor of a dedicated revenue source for roads, transit and ferries, if /when the Legislature puts a revenue package before the voters. 7. COMMUNITY SOLAR AGREEMENTS Public Works Director Phil Williams recalled when the community solar project was proposed to the Council late last year, the Council directed staff to work with the sponsors to negotiate agreements to implement the project and bring them to the Council for consideration. The City needs a lease agreement for the roof of the Frances Anderson Center (FAC) to execute the project as well as a power purchase agreement. He introduced Mark Mayes, Carlo Voli, and Chris Herman, Sustainable Edmonds and Edmonds Community Solar Co -op, and Stanley Florek, CEO, Tangerine Power. Edmonds City Council Approved Minutes January 18, 2011 Page 10 Mr. Mays explained Sustainable Edmonds instigated the startup of this project and formed Edmonds Community Solar Cooperative. During the last presentation there was no entity into which the City could enter into an agreement. There are currently 12 members of the Co -op who are also eligible to become officers of the Co -op. To facilitate the formation of the Co -op, they enlisted Stanley Florek and Tangerine Power to provide legal and corporate structure and proposals for lease and service agreements (power purchase agreement). Mr. Florek explained Edmonds Community Solar Co -op incorporated December 8, 2010. The City's risks are reduced by: • Preparation of a lease agreement and energy services agreement defining the City's and the Co- op's responsibilities and benefits • Property insurance and taxes will all be paid by the Co -op • Phased approach to funding and construction, the Council to decide whether to grant the Co -op a lease of the entire FAC rooftop or a portion Mr. Florek relayed the Co -op's request for the Council to approve, 1) Solar Roof Lease, and 2) Solar Energy Services Agreement (aka Power Purchase Agreement) so they may build and operate a Community Solar Power System on the FAC. He displayed the project sales website, advising there has already been $14,000 in commitments from 12 members in the local community. He provided an overview of the roof lease: • Lease term is from approval through June 2020 (approximately 9.5 years), when a Washington State production incentive /payment for green power sunsets. This is one of the funding mechanisms that will pay back investors over time • Roof access and construction rights only when coordinated with City facilities personnel • Co -op will insure its own equipment • Panels will be weighted down, not attached to building (weighted "ballasted" solar panel racking system). No penetration of roof other than 1 -2 wires to provide generated electricity to a service panel in the facility • $3/kilowatt lease income to City up to $225 /year (under the $250 /year limit for state excise tax) He provided an overview of the energy services agreement: • City accepts all solar power we deliver at $.05 /KWh + 3% escalator. City saves approximately $31,000 in utility costs over 9.5 years if Co -op fully subscribed • Snohomish PUD will be involved to connect system and the Co -op will facilitate an interconnection agreement with Snohomish PUD in the event of excess electricity generation • At end of term, parties to renegotiate, remove equipment or sell discounted equipment to the City • Early termination is painful to Co -op. If terminated at City's election, City understands that it will cause significant hardship to the project as follows: • Co -op subject to repayment of up to $200,000 federal grant (if terminated years 1 -5) • Decertification of State Incentive (loss of up to $75,000 per year of incentive payment through 2020) Mr. Florek identified the following items for discussion: The Co -op requests to utilize all the available roof space on the FAC where solar could conceivably be installed and produce electricity. He displayed an aerial photograph of the FAC, identifying areas where panels could be installed. The historical nature of the center building makes that portion unavailable for solar panels. If the City's grants access to the entire roof, they can engineer all the entire system and equipment installed as additional funding is provided by investors. Edmonds City Council Approved Minutes January 18, 2011 Page 11 • Early termination penalty to be defined • Bonding for system removal after abandonment He reviewed the City's electricity savings if the full 75 kilowatt system is funded and installed in 2011 is $31,817.77 over the 9.5 year period. He briefly reviewed the Co -op's estimated financials including revenue from Co -op member contributions; materials, installation and design; development fee, etc. over the 9.5 year period. He summarized the Council's approval to enter into the two agreements will allow community members to access a roof in their community, provide a long term relationship defining the terms, allow the City to receive discounted power, and produce revenue for the Co -op to meet its obligations. Councilmember Plunkett referred to Mr. Florek's comment regarding the historical nature of the center of the building and asked where the panels would be located. Mr. Florek identified the historical portion of the building that was constructed in 1928. He also identified areas of the roof where panels could be located, advising the actual location would be determined by the selected installer. Councilmember Plunkett pointed out the portion of the building to the west of the 1928 portion is also older. Mr. Herman answered it was built in 1947. He clarified they were not considering installing panels on the 1928 portion but were considering the 1947 portion. Councilmember Plunkett inquired if reflection of light from the panels could shine into residences. Mr. Herman advised the optimum angle to make the best use of the roof is approximately 15 degrees or 18 inches off the roof. When the sun's angle is at its highest point at 65 degrees, the only visible reflection would be from an airplane; the same is true when the sun is at 20 degrees at winter solstice. He explained the Silicon energy panels have an anti - reflective coating on the surface of the glass. Councilmember Plunkett asked whether there had been complaints regarding reflection in other installations in urban areas. Mr. Herman answered the only complaints were from pilots in San Diego regarding panels that were installed on a parking structure at the airport. Councilmember Buckshnis expressed surprise that none of the questions she asked at the first presentation were answered. The Council approved it in principle based on receiving additional information. Her questions included: • Is another location feasible in view of the historical nature of the FAC? • Only five houses can be powered; why not put the panels on those houses? • What's in it for the City? • Revenue generated only provides job security for someone. • Will free electricity be provided to the FAC? Mr. Florek offered to have his PowerPoint presentation provided to the Council. In response to the question regarding an alternate location, Mr. Herman explained the FAC was selected because it is a community center, it has southern exposure, City staff identified it, and the roof is only two years old. Councilmember Buckshnis relayed her concern that the FAC is historically designated and whether the roof could support the panels. She reiterated her concern that her list of questions had not been addressed. Mr. Herman advised they were directed to work with staff on the details. He has been on the roof three times doing a site assessment and measurements. With regard to structural issues, Mr. Herman explained they did not want to incur the cost of a structural engineer before an agreement was in place. In his experience there has not been a building whose roof was not strong enough to support the panels. With regard to Councilmember Buckshnis' comment regarding job security, he noted none of them were getting paid. He is managing the project at no charge Edmonds City Council Approved Minutes January 18, 2011 Page 12 and was hopeful the federal and state incentives would provide a return for the Co -op. With regard to the number of houses that could be powered, Mr. Herman explained 5 average houses or 25 efficient houses. In response to what's in it for the City, Mr. Herman answered the benefits are: • Discounted power for the next 9.5 years • Opportunity for people in the city to take advantage of a 30% federal grant, • $1.08 /KWh for everything the system makes for the next 9.5 years • An opportunity to invest in solar power if a citizen does not have an appropriate roof or does not own their roof • Sale of renewable energy credits for $0.04/KWh • $225 /year roof lease and $0.05 /KWh for the next 9.5 years versus $0.08 /KWh Councilmember Buckshnis commented she was not ready to approve the agreements without answers to her questions. Councilmember Petso recalled a smaller project was to be approved for a small portion of the FAC roof. Mr. Herman explained there are five roofs on the south side of the FAC. Without laying out the system, they were not certain which areas would be necessary. An agreement could be drafted for all the roofs that may be appropriate. He described his site assessment/measurements of the FAC roof to determine where panels could best be installed. Councilmember Petso asked how much larger an area was now being contemplated. Mr. Herman advised the five roofs on the south side are approximately 7500 square feet. The initial proposal was the three roofs on the southwest side. With the side - shading from the 2 -story portion of the building, it was necessary to consider the south roof. Councilmember Petso observed the estimated savings was $31,000 over 9.5 years. Mr. Herman explained that amount is based on assumptions including the escalation of power rates. Councilmember Petso observed it could be less. Mr. Herman assumed power rates would increase at least 3% for the next 9 years. Councilmember Petso noted the City likely had spent more in legal fees than the project would return to the City. Councilmember Plunkett asked Mr. Herman's experience with installing moderate to large systems. Mr. Herman answered he has designed dozens. Councilmember Plunkett asked how many were installed without a structural engineer reviewing the building. Mr. Herman answered none of them; a structural engineer always looks at the building. Councilmember Plunkett recalled Mr. Herman stated they did not plan to have a structural engineer look at the building. Mr. Herman clarified they had not done it yet. The money that members of the Co -op have paid has not been spent; if the project does not proceed, the money will be returned. Student Representative Gibson asked the number of kilowatts the FAC used on average per hour. Mr. Herman answered the high is 200,000 KWh/month. This system will not produce the amount of energy the building uses. During a site assessment with the potential installer, Snohomish PUD's interconnection inspector was present to ensure the transformer was big enough to handle the biggest system they could install. The transformer at the street and the power conditioning equipment inside the building were also inspected and found capable of handling the biggest system. State law limits the size of a community solar project to 75 kilowatts or approximately 7500 square feet of solar panels. City Attorney Scott Snyder explained the Council previously approved the solar project in concept but there were a number of unanswered questions. Staff has been careful not to devote a great deal of staff legal time to the project. The agreement has been refined to cover the basic business provisions and have Edmonds City Council Approved Minutes January 18, 2011 Page 13 identified two major issues. Phased development or expansion — when the Council and Committee reviewed this project, they understood the Council's go -ahead to be very limited. This appears to be a good pilot project with minimal economic benefits to the City and significant downside risks the Council must be aware of. If the Council is interested in a small project to a do a good thing to advance solar power in the community, this is an appropriate project. Staff has reservations with anything that appears to be a right of first refusal or license to use an expanded area. Several Councilmembers have raised the issue of the return; $225 is the minimum amount on which lease hold sales tax does not need to be paid. The benefits to the City are reduced power costs, $31,000 over the life of the 9.5 year agreement. There is a great deal of risk for the Co -op in the event of early termination; investors would be out $200,000 if that occurred in the first 3 years plus the tax credits of $75,000 /year. The first draft contained an early termination fee to cover their out -of- pocket costs plus $75,000. The total could be nearly $1 million for a $31,000 benefit. The agreement now contains a "to be negotiated" for the early termination fee. Mr. Snyder explained if the panels are located on any portion of FAC that is on the historic register, a Certificate of Appropriateness will need to be issued upon review of all features of the property interior and exterior that contribute to the designation and are listed on the nomination. He doubted the flat roof of the FAC was listed on the nomination. If the Council chooses to proceed, much of the benefits will be good things in the community and education, not a great deal of revenue and there is potential for significant costs if problems arise. Mr. Williams noted he likes the project and there are a number of good elements although they are not financial. There are risks although a risk assessment likely would find a low likelihood of those occurring. He summarized although the risks are not huge, the financial benefit to the City is also not huge. He supported the project if the details can be worked out. Mr. Snyder pointed out page 4, paragraph 6.1 of the initial lease agreement provides for structural evaluation by a licensed engineer prior to proceeding. He noted much of the value to the investors is from federal tax credits. The way the agreements are currently structured, much of the burden could fall on the City unless the amount is reduced. He cautioned the Council to be careful about the agreements they entered into because it will be difficult to undo. With regard to the historic nature of the Frances Anderson Center and listing on the historic register, Mr. Williams relayed Planning Manager Rob Chave's assurance that a Certificate of Appropriateness was obtainable. Councilmember Buckshnis inquired about the possible obsolescence of the panels at the end of the 9 year period. She was concerned with a startup Co -op placing solar panels on a premier downtown building. Mr. Herman explained the Co -op was created specifically for this project. He has been in business 23 years; he clarified he had not been involved in dozens of projects of this size. The installer for the first phase of the project has been involved with many large projects. The Silicon Energy Panels are made in Marysville. The Natural Renewable Energy Lab recently conducted destructive testing of 20 of the largest panel manufacturers in the world and Silicon Energy Panels because they are made differently than other panels. All the other panel manufacturers failed after two weeks, Silicon Energy has still not failed after five weeks of testing. The panels are warranted for 20 years. There is no maintenance required of the panels; there are no moving parts and they are rated for golf ball size hail at 50 mph. An inverter may need to be replaced in 10 years but that is inexpensive. The panels will sit on the roof making energy. Councilmember Buckshnis inquired about alternate sites. Mr. Herman answered consideration had been given to the Edmonds Marina and the Public Safety building. The educational nature of the FAC and it being a centerpiece of the City made it an ideal site. City staff originally suggested the FAC. Edmonds City Council Approved Minutes January 18, 2011 Page 14 Councilmember Buckshnis referred to a question she posed previously, if this had been done before, and the response that it had not been done in Washington; had been done in Colorado but had yet to be certified. She pointed out this is a very new concept and she was concerned with locating panels on the FAC. She commented on reflection from panels on Councilmember Bernheim's home. Mr. Herman remarked those panels were 10 feet off the ground. He advised there are community solar projects in Ellensburg and Okanogan Public Utility but both were utility -owned community projects. Councilmember Buckshnis expressed interest in further review of the information. Mr. Herman offered to respond to all Councilmember Buckshnis' questions. Councilmember Plunkett asked about bonding. Mr. Snyder answered bonding was one approach, another way would be if the Co -op defaults, the equipment reverts to the City. However, because a lender will be involved, the lender would have superior rights. The current obligation is to remove the panels and store them at the lessee's expense. The problem arises if it is a default corporation. Mr. Herman advised they did not plan to have a lender. His preference was for the Co -op to stay out of debt. Councilmember Plunkett referred to Mr. Snyder's indication that the City could be responsible for the federal tax credit in the event of early termination. Mr. Snyder answered this was flagged as an issue but had not yet been worked out to avoid expending a great deal on legal fees. He referred to Section b on page 12 of the Power Purchase Agreement regarding the amount the Customer (City) would pay if the agreement were terminated after the Commercial Operation Date, explaining it was originally $75,000 /year. When he indicated that amount would be a non - starter, it was changed to "an amount to be negotiated." He remarked what the Co -op was requesting was not unfair but in the event of early termination someone would bear the $200,000 in upfront tax credits and $75,000 /year. He summarized the City would realize $31,000 over 9.5 years but there is considerable risk that needs to be allocated. He sought the Council's direction regarding how the risk was allocated. Councilmember Plunkett asked why the City could be responsible for the federal tax credit if it was the Co -op's project. Mr. Snyder answered if the City terminates, the federal government will require the tax credit to be returned. Mr. Florek explained the US Treasury and IRS require that if the Co -op receives a 30% rebate and the City terminates in years 1 -5, the $200,000 in federal grant funds be repaid. The amount is prorated over the first five years, 20% per year. Councilmember Plunkett clarified if the City terminates in years 1 -5, the City could be responsible for as much as $75,000 /year. Mr. Florek commented that scenario would only occur if the termination were without cause. There are a series of causes listed in the agreement. Councilmember Plunkett commented "cause" can be an expensive legal issue to resolve. Councilmember Fraley- Monillas asked whether closure of the FAC would be "for cause." Mr. Snyder advised the agreement addresses work being done on the building. The more building that is covered, the more likely construction would be necessary during the 9 year period. There are provisions for relocation of the facilities but all would have financial consequences for the Co -op and the City. Councilmember Wilson commented the Council had spent a great deal of time tonight discussing this topic and clearly there were continuing concerns. He suggested the Council provide staff direction via a motion to continue answering questions, etc. Council President Peterson commented many of the questions asked tonight were addressed in the Community Services /Development Services Committee meeting. He agreed with providing direction to staff and requested the questions recorded in the minutes of the previous presentation be forwarded to the representatives. Edmonds City Council Approved Minutes January 18, 2011 Page 15 Councilmember Petso asked Mr. Williams if there had been discussions regarding how often City staff would need to visit the roof. Mr. Williams answered it would not be a common occurrence. He noted if the City were required to cancel the agreement for reasons other than those listed for cause, clearly both parties would have a desire to mitigate whatever damages would arise. One option would be to move the panels to another location. Councilmember Petso asked if the roof would need to be accessed 2 -3 times a year. Mr. Herman answered most customers never clean the panels. In Zion National Park the panels were cleaned annually; before they were cleaned one year, a meter determined the loss was only 10 %. He anticipated the rain in this area would be sufficient to clean the panels. Mr. Snyder advised the agreements guaranteed access to the panels, conduits, pipes and other structures. Mr. Herman advised access to the roof is kept to a bare minimum. COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO REQUEST STAFF RETURN WITH A RECOMMENDED ACTION, YES OR NO, DEPENDING ON NEGOTIATIONS, NEGOTIATIONS TO LIMIT THE CITY'S DOWNSIDE TO THE GREATEST EXTENT POSSIBLE INCLUDING ELIMINATING THE CITY PICKING UP THE LIABILITY FOR THOSE SHAREHOLDER INVESTMENTS, CONSIDERATION OF SOME SORT OF BONDING EFFORT THAT WOULD BE IN PLACE SHOULD AN EVENT NECESSITATE SOMEONE MOVING THE PANELS, AND CONSIDERATION BE GIVEN TO ALTERNATE LOCATIONS. Councilmember Wilson commented the City was open- minded about the community solar project but could not spend this amount of time reviewing it. Councilmember Plunkett was uncertain which portions of the FAC were on the historic register. If the 1947 portion is included, a Certificate of Appropriateness from the Historic Preservation Commission (HPC) will be required. Councilmember Plunkett offered and Councilmember Wilson and Council President Peterson accepted the following as a friendly amendment: TO HAVE THE ITEM SENT TO THE HISTORIC PRESERVATION COMMISSION FOR EITHER REVIEW FOR A POTENTIAL CERTIFICATE OF APPROPRIATENESS OR IF A CERTIFICATE IS NOT NEEDED, THE HISTORIC PRESERVATION COMMISSION'S OPINION REGARDING PLACING SOLAR PANELS ON A SIGNIFICANT HISTORIC BUILDING. Councilmember Wilson preferred the HPC's decision not bind the Council in any way. Councilmember Plunkett responded if the 1928 and 1947 portions of the FAC are on the historic register, a Certificate of Appropriateness will be required. He was uncertain whether the Council could override the requirement for a Certificate. He acknowledged that buildings could be removed from the historic registry. Councilmember Bernheim expressed his wholehearted support for the community solar project due to the positive aspects. Most of the negative comments /dissatisfaction is due to a lack of knowledge. This is a federal demonstration project to put solar panels on public buildings to illustrate it can be done. The panels provide cheap power to the City; the City will buy the power the panels create at less than commercial rates. The power is renewable. With regard to the historical nature of the building, he noted the honor afforded Frances Anderson was due to her interest in the community; this solar project is a community building effort. The FAC is an ideal site and it being built in 1928 does not preclude installing solar panels on the roof. With regard to the termination provisions, he questioned why the City would want to terminate the agreement. He acknowledged there were risks to be negotiated but they were not serious risks. The panels are removable. He encouraged the Council to look at what could be learned from this project rather than focusing on how it could fail. Councilmember Petso referred to the Council's commitment to reduce legal fees in 2011. She was not supportive of the motion if it directed staff including Mr. Snyder to invest time in negotiations. As Edmonds City Council Approved Minutes January 18, 2011 Page 16 wonderful as it would be to have a demonstration project, she did not want to do it at the cost of an enormous amount of Mr. Snyder's time. Councilmember Plunkett asked how much time Mr. Snyder would spend on the negotiations. Mr. Snyder estimated he has spent 5 -6 hours to date and estimated another 4 -5 hours would be required, approximately $1100. THE VOTE ON THE MOTION CARRIED (5 -2), COUNCILMEMBER PETSO AND PLUNKETT VOTING NO. COUNCILMEMBER PLUNKETT MOVED, SECONDED BY COUNCILMEMBER WILSON, TO EXTEND THE MEETING FOR ONE HOUR. MOTION CARRIED (5 -2), COUNCILMEMBERS BUCKSHNIS AND FRALEY - MONILLAS VOTING NO. 8. AUTHORIZATION TO EVALUATE SITE FOR PURCHASE FOR STORM WATER OR PARK USE. City Attorney Scott Snyder explained the Council has discussed this matter in executive session several times. There is an agreement until the end of February to consider an offer. This is a difficult valuation because the property was about to be placed on the market when the flooding event occurred at the height of the market. The Karlstens have offered to sell the site to the Stormwater Utility at a significant discount from what they planned to ask plus the damage sustained. He distributed assessed valuation information. He suggested a desktop appraisal from a local appraiser who could provide an assessment would be more valuable than a $10,000 MAI appraisal. He sought Council direction on the type and cost of the valuation that the Council needs for its deliberation on the settlement offer. COUNCILMEMBER PETSO MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO DIRECT STAFF TO PURSUE THE LOW COST ALTERNATIVE, AN INFORMAL EVALUATION OF A RESIDENTIAL PROPERTY BASED ON 2006 VALUE PRIOR TO FLOODING EVENT AND AUTHORIZE COSTS UP TO $1.500. MOTION CARRIED UNANIMOUSLY. 8A. VOTE REGARDING PROPOSED CODE AMENDMENT TO HOME OCCUPATIONS ECDC 20.20. Councilmember Buckshnis commented she had received a number of emails and telephone calls regarding the Council's decision on amendments to the home occupation provisions. COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, FOR RECONSIDERATION OF THE ORDINANCE REGARDING HOME OCCUPATIONS ECDC 20.20. City Attorney Scott Snyder explained if the motion is approved, the matter will be re- advertised to inform the public that the Council has changed its decision. The earliest an advertised public hearing can be scheduled is February 1.5. Mayor Cooper clarified this is a motion to reconsider and the actual reconsideration happens at a different meeting. Councilmember Wilson suggested a final ordinance be provided at the next public hearing for the public and Council to consider. He asked whether the intent was to reconsider the direction the Council provided or to give the public an opportunity to comment and then consider those comments during the Council's review of the final ordinance. Mr. Snyder advised there was a placeholder for this item on next week's agenda. He recalled during the last public hearing Planner Gina Coccia mentioned a portion of the ordinance needed to be reworked. Currently all home occupations must occur within an enclosed Edmonds City Council Approved Minutes January 18, 2011 Page 17 building; however, the amendments allow urban farms. A final ordinance has been prepared that addresses that issue. MOTION CARRIED (6 -1), COUNCILMEMBER WILSON VOTING NO. (Councilmember Fraley - Monillas left the meeting at 10:07 p.m.) 9. REPORT ON CITY COUNCIL COMMITTEE MEETINGS OF JANUARY 11, 2011 Finance Committee Councilmember Bernheim reported the Finance Committee reviewed proposed amendments and updates to ECC Section 2.05.010, Legal Counsel, Professional Services Contract. An important part of the selection process code was repealed 10 -15 years ago and the remaining provisions had not revised. The Committee forwarded a proposed revision to the Council. The City Attorney selection process will proceed without the change to the process. The Committee was also provided the General Fund update for December 2010 and a quarterly report on fiber optics. Community Services /Development Services Committee Councilmember Plunkett reported Councilmember Fraley - Monillas was selected as Chair. He reported the Committee reviewed the following: • Proposed ordinance amending ECC 8.48.1.90 to update parking provisions in designated bike lanes. If there are no significant changes, it will be placed on the Consent Agenda for Council approval. • Amendment to the Lake Ballinger /McAleer Creek Watershed Forum. Approved on the Consent Agenda. • Scope of work for engineering services on the 201.1 water main replacement project. Approved on the Consent Agenda. • An Interlocal Agreement with the City of Lynnwood to fund the Recycling Coordinator for 2011 and 2012. Approved on the Consent Agenda. • Report on final construction costs for Talbot Road emergency culvert repair project. Will be scheduled on a future Consent Agenda. • Report on final construction costs for the 2009 asphalt overlay project. Will be scheduled on a future Consent Agenda. • Community Solar Agreement • Addendum to professional services agreement for the Shell Valley Emergency Access project. Staff will schedule a public meeting to receive comments from Shell Valley residents. 10. MAYOR'S COMMENTS Mayor Cooper welcomed Parks & Recreation Director Carrie Hite who started work last week. Mayor Cooper invited the Council to attend an informational meeting regarding a Regional Fire Authority on January 31 in the Bracket Room. Fire Commissioners and City Councilmembers from all South Snohomish County cities have been invited to attend the informational meeting. Representatives from Kent will describe their experience. If a quorum of Councilmembers plans to attend, it will need to be noticed as a special meeting. Mayor Cooper reported a portion of the Haines Wharf building collapsed onto the pier over the weekend. Staff is exploring next steps to address the issue including whether the State Department of Ecology, Department of Natural Resources and Department of Fish and Wildlife need to be involved. The owners Edmonds City Council Approved Minutes January 18, 2011 Page 18 still have some valid permits and some that have expired. He emphasized the City did not own the property. 11. COUNCIL COMMENTS Councilmember Plunkett requested Council President Peterson advise the Council why paying off the City Hall bonds and home occupations in residential zones were scheduled on the January 25 agenda rather than the Consent Agenda as these were items the Council has passed. Councilmember Buckshnis reiterated her concern with the community solar project was that the eight questions she asked previously had not been answered. She wanted to ensure the Council's questions were answered. Councilmember Wilson expressed appreciation for the Council's flexibility with his schedule. His day job has been very busy, causing him to miss a meeting and leave the January 4 Council meeting early. He left the Council meeting at a point when there was no other actions listed on the agenda. However, during an agenda item to discuss refinancing bonds, from which both he and Councilmember Fraley - Monillas were absent, the Council voted 4 -1 to pay down the bond debt with capital funds. He would have voted against that action. Although that action may have been well intentioned, it was probably irresponsible as it relates to fiscal planning and fiscal policy when one of the City's primary challenges is a funding shortfall. He also found it politically short sighted; just because there are sufficient votes does not make it a good political move. He pointed out both Councilmember Fraley- Monillas and he were absent from the vote and he assumed they both would have voted against that action, resulting in a 4 -3 vote. Councilmember Wilson encouraged Mayor Cooper to veto that item when it came to his desk. Should Mayor Cooper do so, it would return to Council and require 5 votes. He anticipated there were not 5 votes on the Council to approve it. It would be the first mayoral veto in at least a decade. He found it a disappointing precedent to set when with a little more foresight and/or conversation, it may have been possible to get around a well intentioned action that will cause political upheaval. In response to Councilmember Plunkett's inquiry, Council President Peterson explained he had tentatively scheduled amendments to the home occupations regulations on January 25 at staff's request to clarify some provisions of the ordinance. With regard to the payoff of City Hall bonds, the item on the January 25 agenda is a special budget amendment to appropriate the $1.3 million. He added a public comment period regarding that item due to the sizeable amount of money involved. Council President Peterson urged the Council to send questions to staff well before meetings. For example, staff could have been prepared tonight if they had received the questions the Council posed regarding the community solar project in advance. Council President Peterson reported the Council will be interviewing four City Attorney applicants at the February 1 Council meeting. Council President Peterson relayed the Mayor's request to form a committee to discuss the format of the City's financial documents. The committee will consist of three Councilmembers and two citizens. He offered to serve on the committee and invited Councilmembers to indicate their interest in serving. Councilmember Plunkett appreciated Council President Peterson scheduling public comment regarding the payoff of City Hall bonds. He suggested in the future Council President Peterson considering seeking Council's approval before scheduling a public comment period regarding an item. (Councilmember Bernheim left the meeting at 10:25 p.m.) Edmonds City Council Approved Minutes January 18, 2011 Page 19 Councilmember Plunkett appreciated Councilmember Wilson's comment regarding the Council vote regarding payoff of the bonds not being scheduled on the agenda. In retrospect, he wished he had suggested it be scheduled on a future agenda. However, he categorically rejected Councilmember Wilson assertion that it was done politically to manipulate the vote. He anticipated the Councilmembers who voted in favor had good reason and when discussed, it would be a very good public policy discussion. He felt Councilmember Wilson did a disservice to the other Councilmembers when he assumed it was political manipulation. Councilmember Wilson clarified he did not suggest there had been political manipulation. It was poor form for the Council to vote on a $1.3 million item that was not on the agenda and with no public comment. 12. ADJOURN With no further business, the Council meeting was adjourned at 10:28 p.m. Edmonds City Council Approved Minutes January 18, 2011 Page 20