05/17/2011 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES
May 17, 2011
At 6:00 p.m., Mayor Cooper announced that the City Council would meet in executive session regarding
labor negotiations. He stated that the executive session was scheduled to last approximately one hour and
would be held in the Police Training 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 Plunkett, Fraley- Monillas, Buckshnis, Peterson, and
Petso. Others present were Attorneys Sharon Cates and Rosa Fruehling- Watson, Human Services Director
Debi Humann, Public Works Director Phil Williams, Police Chief Al Compaan, and City Clerk Sandy
Chase. The executive session concluded at 6:58 p.m.
The regular City Council meeting was called to order at 7:03 p.m. by Mayor Cooper in the Council
Chambers, 250 5`h 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
Diane Buckshnis, Councilmember
ELECTED OFFICIALS ABSENT
Steve Bernheim, Councilmember
1. APPROVAL OF AGENDA
STAFF PRESENT
Al Compaan, Police Chief
Gerry Gannon, Assistant Police Chief
Jim Lawless, Assistant Police Chief
Corporal Josh McClure
Stephen Clifton, Community Services /Economic
Development Director
Phil Williams, Public Works Director
Jim Tarte, Interim Finance Director
Carl Nelson, CIO
Debi Humann, Human Resources Director
Frances Chapin, Cultural Services Manager
Jeff Taraday, City Attorney
Sandy Chase, City Clerk
Jana Spellman, Senior Executive Council Asst.
Jeannie Dines, Recorder
COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER
BUCKSHNIS, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED
UNANIMOUSLY.
2. CONSENT AGENDA ITEMS
Councilmember Plunkett requested Items H, I and L be removed from the Consent Agenda.
COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCILMEMBER FRALEY-
MONILLAS, TO APPROVE THE REMAINDER OF THE CONSENT AGENDA. MOTION
CARRIED UNANIMOUSLY. The agenda items approved are as follows:
A. ROLL CALL
Edmonds City Council Approved Minutes
May 17, 2011
Page 1
B. APPROVAL OF CITY COUNCIL MEETING MINUTES OF MAY 10, 2011.
C. APPROVAL OF CLAIM CHECKS #125385 THROUGH #125526 DATED MAY 12, 2011
FOR $1,189,729.1.0.
D. PROCLAMATION DECLARING THE WEEK OF MAY 16 -20, 2011 . AS "PUBLIC
WORKS WEEK" IN THE CITY OF EDMONDS.
E. SNOHOMISH REGIONAL DRUG & GANG TASK FORCE, 201.1 -2012 INTERLOCAL
AGREEMENT.
F. AUTHORIZATION TO ADVERTISE FOR CONSTRUCTION BIDS FOR THE SEWER
LIFT STATION REHABILITATION PROJECT.
G. AUTHORIZATION TO ADVERTISE FOR CONSTRUCTION BIDS FOR THE 2011
WATERLINE REPLACEMENT PROJECT.
J. REPORT ON FINAL CONSTRUCTION COSTS FOR THE ODOR CONTROL
IMPROVEMENT PROJECT AND COUNCIL ACCEPTANCE OF PROJECT.
K. REPORT ON FINAL CONSTRUCTION COSTS FOR THE 2009 ASPHALT OVERLAY
PROJECT.
M. ORDINANCE NO. 3841 — AMENDING THE EDMONDS CITY CODE (ECC) 8.64.060
PARKING PROVISIONS IN THE DOWNTOWN EDMONDS AREA.
ITEM H: REPORT ON FINAL CONSTRUCTION COSTS FOR CASPERS STREET/NINTH
AVENUE N/PUGET DRIVE (SR524) WALKWAY PROJECT AND COUNCIL
ACCEPTANCE OF PROJECT.
Councilmember Plunkett observed that the total construction cost was $734,412 and asked whether the
project was over or under budget. Public Works Director Phil Williams advised it was over the original
budget for the project. The Council's recent acceptance of a settlement with the contractor added $95,000
to the cost. The City received two grants for construction that covered all but $92,000 of the total cost.
The City's current contribution to the project is approximately $93,000. Staff is in discussions with the
Transportation Improvement Board regarding the grant and he anticipated an additional $30,000 in grants
funds would be available, making the City's total contribution to the project approximately $60,000.
Councilmember Plunkett asked if this was the company that had been discussed in executive session. Mr.
Williams answered yes, T.E. Briggs. The Council approved the settlement approximately one month ago.
COUNCILMEMBER PLUNKETT MOVED, SECONDED BY COUNCIL PRESIDENT
PETERSON, FOR APPROVAL OF ITEM H. MOTION CARRIED UNANIMOUSLY.
ITEM I: REPORT ON FINAL CONSTRUCTION COSTS FOR THE FIVE CORNERS BOOSTER
PUMP STATION IMPROVEMENTS AND COUNCIL ACCEPTANCE OF PROJECT.
Councilmember Plunkett observed that the total construction cost was $1,168,903 and asked whether the
project was over or under budget. Public Works Director Phil Williams answered the $1.1 million
construction cost was relatively close to the construction budget. There was little variance between the
total construction cost and the engineer's estimate at the time the project went to bid. Councilmember
Plunkett asked whether the final cost included a cost overrun. Mr. Williams offered to research the budget
versus actual total construction cost. Councilmember Plunkett preferred to delay approval until Mr.
Williams provided that information.
Edmonds City Council Approved Minutes
May 17, 2011
Page 2
It was the consensus of the Council to schedule this item on a future agenda.
Councilmember Plunkett observed a contractor for this project was being selected from the Small Works
Roster rather than going out to bid due to the cost of the project. He asked if in this construction climate it
would be preferable to put the project out to bid. Public Works Director Phil Williams answered the Small
Works Roster was not selected because of the expense; the expense allows the City to use that process
and staff recommends using that process due to timing. Staff would like to replace the grouted connection
with a bolted connection. In addition, Dayton Street from Railroad to Sunset will be paved this summer
as part of a water line project. It is preferable to do this repair now and avoid cutting the newly paved
street for this repair in the future. The construction schedule does not allow for a normal bid process and
the Small Works Roster allows the project to be accelerated and avoid cutting the street in the future.
COUNCILMEMBER PLUNKETT MOVED, SECONDED BY COUNCIL PRESIDENT
PETERSON, FOR APPROVAL OF ITEM L. MOTION CARRIED UNANIMOUSLY.
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Mayor Cooper recognized the men and women of the Edmonds Police Department for the work they do.
He referred to the lockdown at Edmonds - Woodway High School last week, recent burglaries at Firdale
Village and the capture of a burglar yesterday with the assistance of the K -9 unit and neighboring Police
Departments.
Mayor Cooper read a proclamation declaring May 15 -21, 2011 as National Police Week in Edmonds. The
City's flags are flying at half -staff in honor of National Police Week.
Police Chief Compaan announced the Edmonds Police Department's Annual Awards Night in Council
Chambers on Thursday, May 19 at 6:30 p.m. The event recognizes members of the Edmonds Police
Department as well as members of the general public who have assisted the Department.
4. SWEARING IN CEREMONY FOR CORPORAL JOSHUA D. MCCLURE.
Police Chief Al Compaan commented one of the highest honors he has as Chief of Police is celebrating
achievement by department members. An oath is an important public recognition of personal achievement
and a personal pledge to the highest legal, ethical and professional standards critical to the law
enforcement mission.
Chief Compaan explained yesterday morning Corporal McClure and his partner K -9 Dash received a call
to assist the patrol units in North Edmonds searching for a residential burglar. Two hours and 40 minutes
later, Officer McClure and his partner Dash corralled the suspect and an arrest was made. Chief Compaan
described Corporal McClure's background: he started with the Edmonds Police Department as a Police
Explorer at the age of 17 in 1993. He graduated from the Criminal Justice Program at Shoreline
Community College and was hired as a Reserve Officer in Edmonds June 1997. After 14 months, he left
to take a position with the Tukwila Police Department as an entry level officer. He returned to Edmonds
in August 1999, serving three years as a Narcotics Detective assigned to the South Snohomish County
Narcotics Task Force. He has also worked as a Field Training Officer in Edmonds. Since October 2006
Corporal McClure has been one of Edmonds' two K -9 officers, working nights with his partner Dash.
Corporal McClure and Dash also participate in a significant number of public relations functions for the
Police Department, providing K -9 ride- alongs to community members and K -9 demonstrations at
community events.
Edmonds City Council Approved Minutes
May 17, 2011
Page 3
Following his promotion, Corporal McClure will continue to work with Dash for the remainder of the
dog's working life. Corporal McClure received letters of commendation in 2004, 2007 and 2008 awarded
to Department employees who perform particularly noteworthy acts or service based on their determined
and intelligent performance. He was the Edmonds Police Department Officer of the Year in 2007 and
received the City of Edmonds Distinguished Service Award and a Police Medal of Valor in 2008.
Attending tonight's ceremony are Corporal McClure's wife Kelly, a SNOCOM Dispatcher, and their
daughters Kiley and Ashley.
Chief Compaan administered the oath of office to Corporal Josh McClure. Corporal McClure's daughter
Kiley pinned his badge. Chief Compaan presented Corporal McClure with a framed Certificate of
Promotion.
Corporal McClure commented three years ago he learned his wife was fighting a battle and they were
unsure what the outcome would be. Three years later they have two daughters. He assured his wife his
promotion was for her.
5. COMMUNITY SERVICE ANNOUNCEMENT: MEMORIAL DAY CEREMONY AT EDMONDS
CEMETERY.
Dale Hoggins, Edmonds Cemetery Board, invited the Council and the public to the 29`h annual
Memorial Day Ceremony held on Monday, May 30, 2011 at 11:00 a.m. at the Edmonds Memorial
Cemetery, 820 15`'' Street SW. The program remembers and honors the memory of those who died while
serving our country especially during times of war and says thank you from a grateful community to all
veterans and current military personnel. He recognized Michael Reagan, local portrait artist and U.S.
Marine veteran, for his Fallen Heroes Project, drawing portraits for the families of those who have fallen
since 9111. The program will include the introduction of Betty Lou Gaeng, Author, Researcher, Compiler,
Sno -Isle Genealogical Society, who has compiled biographical sketches of the men whose names are on
the monument in front of the Edmonds Museum.
The ceremony's emphasis is on remembering and features youth who lead the pledge, participate in the
presentation of colors, offer prayers, provide instrumental and vocal music, distribute programs, read their
winning essays and recite poetry. He reminded this is an outdoor event, rain or shine. He encouraged
attendees to bring their own chairs and allow time to walk from parking outside the cemetery. He
provided his phone number for questions or additional information: 425- 776 -1543.
6. AUDIENCE COMMENTS
Gerry Tays, Edmonds, explained his wife and he moved to Edmonds in July 2010 after spending 30
years with the National Park Service and 12 years with Washington State Parks as its Historic
Preservation Program Manager. He commented on the wonderful resource, the Edmonds Center for the
Arts. He noted it is housed in a former high school and he commended the City for preserving,
rehabilitating and putting the building to a wonderful new use. He and his wife, along with hundreds of
others, volunteer at the ECA. He urged the Council to continue their support of the ECA.
Mary Sweeney, Edmonds, explained her husband and she have volunteered at the ECA since it opened
four years ago. The ECA is a wonderful asset for Edmonds as well as Snohomish and north King County,
a venue with world class entertainment and free parking without driving into Seattle. As a volunteer she
often talks with patrons and has found ECA and its programming draws patrons young and old from a
wide geographic area. Rick Steves' travel events draw people from the entire West Coast. Mr. Steves
provides a flyer with maps promoting local restaurants. During a recent ECA event showcasing Great Big
Sea, she learned many of the patrons came from Alaska to attend the show. The Frank DeMiero Jazz
Festival draws students and adults from across the State including a number of school bands from eastern
Edmonds City Council Approved Minutes
May 17, 2011
Page 4
Washington who patronize hotels and restaurants in the Edmonds area. She expressed her gratitude for a
venue such as the ECA and her appreciation for the City's continued support of the ECA.
Bill Kolden, Brier, described his background, 30 years working in local government and now 80 -90%
retired. He volunteers at the ECA on a regular basis; while volunteering as a bartender, he has heard an
overwhelming response from patrons regarding the venue, quality of performances and overall perception
of the ECA experience. In talking with patrons, other volunteers and ECA management staff, it is clear
the City has a jewel in the ECA as a point of destination for people throughout the region. The feedback
he receives and his own observations is that the ECA is a well- managed, well run operation that provides
a very positive and enjoyable experience for attendees. Those who have been involved with the ECA
from its beginnings, have seen it move in a positive direction, bringing more events to the community,
drawing bigger audiences and drawing more rental activity as people learn of the great venue. This results
in more people attending events at the ECA as well as visiting local businesses which boosts tourism. He
commented on the dedication of the ECA staff members and volunteers; their talent and dedication are
evident to customers and a significant part of the overall experience of attending events at the ECA. He
commended the City and the City Council for the support provided the ECA over the past several years
and encouraged a continued commitment and support for what the ECA provides the community.
Ron Clyborne, Edmonds, commented Edmonds is blessed to have a facility like the ECA. He was
involved with the ECA prior to its completion and was responsible for bringing a substantial grant to the
community for ECA. Speaking on behalf of the Edmonds Chamber of Commerce as its President, the
Chamber Advocacy Committee, the newly formed Arts Committee, the Chamber's 350 members, and as
a charter ECA Board of Directors Member, he explained the facility has grown in the past five years from
being consistently challenged by time, energy and money and operating in the red to a facility that is now
operating in the black. There is a dedicated Board of Directors and there are numerous sell outs. He
relayed comments from a couple attending a performance at the ECA for the first time last Friday who
were amazed by the art deco style. During the last 40 minutes of that sellout show, all the 700 people
were dancing. He pointed out the ECA provides $3 million in economic development and he encouraged
the Council to continue its support of the ECA.
Kate Labiak, Sno -King Music Educators Association, Band Manager College Place Middle School
and Conductor for the Seattle Youth Symphony Orchestras, explained the Music Educators Association is
a subset of the Washington Interscholastic Activities Association, the governing body of all local and
state sports and music events. Sno -King represents 9 high schools, 14 middle schools and 50 elementary
schools in the Edmonds, Shoreline, Mukilteo and South Whidbey School Districts. For the first time this
year, over 4,000 students from the 25 middle schools and high schools had the privilege of performing on
the ECA stage for all 7 of their large group festivals, the equivalent of the statewide assessment for the
secondary students. Festivals are adjudicated by university level adjucators and serve as the primary
assessment tools. This year the festivals were an overwhelming success; student, parent and educator
feedback was resoundingly positive, especially with regard to the ECA staff and facility. The recent
upgrades to the facility's second floor have been particularly beneficial to hosting festivals at the ECA.
The ECA provides a professional setting for students' academic assessment, accurate recordings, fantastic
acoustics and a helpful and competent staff. After conducting a concert at Benaroya Hall last weekend
with the Seattle Youth Symphony Orchestras, she felt the ECA staff was more competent than the
Benaroya staff. On behalf of the thousands of students, parents and teachers she thanked the City Council
for their ongoing support of the ECA.
Alvin Rutledge, Edmonds, commented on improvements that were spearheaded by former Mayors
Fahey and Haakenson. He referred to the citizens' approval of annexation into the Sno -Isle Library
District which saved the City a substantial amount of money. He referred to budget cuts made in 1990
that included $28,000 for Lake Ballinger maintenance.
Edmonds City Council Approved Minutes
May 17, 2011
Page 5
Roger Hertrich, Edmonds, recalled pleas for funds to start the ECA, recalling the project competed for
funds with the Future of Flight Museum. He agreed the ECA was a major contributor to economic
development in the City and needs the City's continued support. It was unfortunate the cost to the City
had increased by three times and he suggested the $18,000 spent on the survey could have been spent on
the ECA debt instead. To increase attendance, he suggested the ECA install a sign that was large enough
to be visible from 3rd Avenue that listed events. With regard to the items Councilmember Plunkett
removed from the Consent Agenda, he suggested in the future the Council request the agenda memo
contain comparative data regarding budget, estimate and final construction cost.
Nikki Parish, Managing Director, Studio East, Kirkland, explained she has attended performances at
the ECA as an individual and also rents the facility on behalf of Studio East for Storybook Theater, a
program that introduces young children to live theater. They tour throughout the Puget Sound area from
Everett to Olympia and perform in many different theaters and the ECA is their favorite facility. The
facility is beautiful, has wonderful acoustics, and most importantly, the staff is excellent and very
professional. She remarked on how extraordinary it was to have a facility like the ECA in a town the size
of Edmonds. In the last four years, they have performed several times a year at the ECA, attracting over
8,000 children. They look forward to many more years at the facility and she encouraged the City to
continue its support of the ECA.
Peggy Estella, Edmonds, explained her husband and she chose to live in Edmonds after 25 years in the
Air Force due to the active arts scene. The ECA is gorgeous and they appreciate the quality and caliber of
performances. She summarized the ECA was key to their decision to purchase a home in the Edmonds
bowl and she urged the Council to continue their support of the ECA.
Council President Peterson explained the items Councilmember Plunkett removed from the Consent
Agenda were reviewed with staff at the May 10 Community Services /Development Services Committee.
He chaired the Committee meeting in Councilmembers Plunkett and Fraley- Monillas' absence.
7. PRESENTATION BY EDMONDS PUBLIC FACILITIES DISTRICT REGARDING CAPITAL
BOND PAYMENT.
Bob Rinehart, Vice President, Edmonds Public Facilities District (EPFD), on behalf of the EPFD
Board, the non - profit ECA Board, the ECA staff and many volunteers, thanked the Council for their
ongoing support of the ECA. He explained the goal of their presentation is to bring clarity to the capital
debt challenge facing the ECA.
The ECA was created as a Public Facilities District, a municipal entity. At the end of the life of the PFD
charter, the ECA facility and operations will be turned over to the City, therefore, it is worth the time and
attention to work with the ECA to develop the right course of action to assist with covering the capital
debt. He expressed appreciation for the time and attention provided by former Council liaison Council
President Peterson, Councilmember Buckshnis' efforts to understand the PFD's financials and the work
being done by the current Council liaison Councilmember Petso who along with Councilmember Wilson
are part of a recently formed task force to ensure the City Council, City staff, and PFD and ECA Boards
are working together to strengthen their relationship and collaboration.
ECA has engaged in serious cost cutting over the past several years. Beginning in 2008 when the
economic downturn began, operating expenses were cut by $40,000 in the 2008 -2009 season and
$100,000 in the 2009 -2010 season; FTE was reduced from 7 to 5 employees, the remaining 5 took 30 day
furloughs, and presentations in the 2009 -2010 season were reduced from 34 to 22. The 2011 facilities
maintenance budget for the 72 year old, 52,000 square foot building is $34,000; there are zero funds in a
capital improvement line item and the ECA is facing challenges with the roof and heating plant.
Edmonds City Council Approved Minutes
May 17, 2011
Page 6
Mr. Rinehart highlighted recent successes:
• 10 of the 22 presentations this season sold 90% or better.
• Jesse Cook, added to the season 5 weeks ago, sold out in 3 weeks.
• The 5`" annual Center Stage event on April 20 secured $99,000 in sponsorship support and
$25,000 season sponsorship from Carter Subaru, total sponsorship revenue is up $37,500 over last
year and several contacts are still interested in becoming sponsors.
• The 2„ d annual fundraising tour of Edmonds/Woodway kitchens this weekend was a tremendous
success, raising more than $10,000 for the ECA.
Mr. Rinehart relayed several key facts: over 50,000 people attend events annually at the ECA. Of those,
over 11,000 of those attend ECA - presented events; 75% of the people using the facility attend other
performances /events /classes by groups such as Olympic Ballet. It is a community center that serves a
broad spectrum of people and needs. He commented on recent events at the ECA including Cascade
Symphony's completion of their 491" season, two sold out performances by the Chinese Acrobats that
served 1300 students, the State Attorney General Rob McKenna hosted by the Chamber of Commerce
and a company meeting held by Premera Blue Cross. A new rental client will begin using the ECA
gymnasium for up to 78 hours /week during the summer months, a time previously unused. He
summarized the ECA was proud of its numerous successes.
Joe McIalwain, Executive Director ECA, provided 2010 -2011 season attendance statistics:
• 31% of audience are Edmonds residents
• 18.3% of audience are from Seattle
• Remaining percentage come from the surrounding area to spend time and money in the Edmonds
area.
He highlighted upcoming events including the Sno -King Community Chorale finishing its season on June
11`" with two "Ticket to Broadway" performances of "A Radio Broadcast" as well as dance recitals by
four dance schools in June.
Mr. McIalwain provided a comparison of the ECA's operating performance 2010 April YTD, 2011 YTD
April and 2011 budget:
Revenue
2010 YTD (April
2011 YTD (April)
2011 Budget
Ticket Sales
$159,164
$256,056
$430,000
Rental Revenue
$107,853
$157,564
$328,820
Other Earned Revenue
$17,852
$30,163
$87,000
Fundraising for Operations
$91,361
$195,595
$402,000
Total
$376,230
$639,378
$1,247,820
Expense
Labor
$150,253
$183,185
$521,800
Facilities /Operations
$79,855
$90,058
$232,400
Programming
$106,404
$161,818
$253,000
Other Expenses
$34,913
$52,520
$238,300
Total
$371,425
$487,581
$1,245,500
Net Revenue
$4,805
$151,797
$2,320
He summarized the above illustrates that their efforts for the past five years are coming to fruition. He
emphasized there is a big difference between operating and the issue the ECA faces with regard to capital.
Operating, all the programs and services the ECA provides and related expenses, is going very well. The
Edmonds City Council Approved Minutes
May 17, 2011
Page 7
challenge is with regard to capital because the sales tax revenue the PFD receives and the debt to which
those revenues are dedicated are out of balance.
He reviewed the sales tax revenue streams:
Direct local -level sales tax rebate
• Intended to cover a portion of the 2002 bond
• Economic crisis has resulted in a significant reduction in revenues from this source
"Tier 1" county -level sales tax rebate
o Intended to cover the remainder of the 2002 bond issue
• "Tier 2" county -level sales tax rebate
• Intended to cover 2008 bond issue
• Revenues were projected to exceed $200,000 annually
• Economic crisis has resulted in a 90% reduction in revenues from the "Tier 2" stream
• Unrealized funding source — primary cause of capital revenue shortfall
Mr. McIalwain advised a task force comprised of Councilmembers Petso and Wilson, City staff Carrie
Hite and Frances Chapin, EPFD Board Members John McGibbon and Bob Rinehart, ECA Board
Members Jack Loos and Steve Shelton, and himself, has met twice. At the most recent meeting,
Councilmember Petso highlighted the ECA's approximately $300,000 /year capital need. To explain that
number, he provided a spreadsheet with the projected versus actual annual capital revenues from the
above revenue sources, debt service on the 2008 and 2002 bonds and the net revenue /shortfall for 2008-
2015. The approximately $300,000 is the projected difference between annual sales tax revenue collected
and bond payments owed. He emphasized there are many possibilities to mitigate the shortfall: the task
force is discussing ways to minimize /mitigate the amount, sales tax revenue may increase, and additional
income from operating will be invested in bond debt. It has been suggested the City plan for a $300,000
difference and should efforts to mitigate that be successful, funds would be freed up for other purposes.
Per the agreement between the ECA and the City, the bonds are guaranteed by the City. When the ECA
cannot meet its bond obligation due to decreases in sales tax and are unable to mitigate the problem in any
other way, unfortunately, the City is responsible for assisting with that obligation. He reiterated the
difference between the success of operations and the capital debt challenge.
He provided a summary of the EPFD Debt Service:
Revenues
2011
2012
EPFD Local Sales Tax (Est)
$179,478
$185,222
SCPFD Allocation (Tier 1)
$215,575
$226,320
SCPFD Allocation (Tier 2)
$12,625
$12,830
Total Revenues
$407,678
$424,372
Bond Payment Due
$682,863
$706,763
Net Balance
($275,185)
1 ($282,391)
Remaining Principle, 2002 Bond Issue
NEEMENEEM
$5,820,000
Remaining Principle, 2008 Bond Issue
$3,735,000
Combined Total
$9,555,000
Mr. McIalwain reviewed the current need:
• Because county revenue projections have not been realized, additional funds are required in
2011 to help cover a portion of EPFD's bond debt
• June 2011 Requirement: $83,185 (the difference between sales tax revenue and amount owed
on mid -year bond payment)
Edmonds City Council Approved Minutes
May 17, 2011
Page 8
Contingent Loan Agreement between EPFD and the City provides a mechanism for the City
to help the EPFD meet debt payments via loan support
City's 2011 budget includes $100,000 for this purpose. No City Council action required at
this time.
Possible long term solutions include extension of the PFD legislation (possible refinance), naming rights,
economic recovery and improved operating performance. Another potential funding source is Snohomish
County Lodging Tax. The EPFD has been told there may not be an opportunity to secure those funds at
this time but they have not yet been allocated. Staff will continue to work with Snohomish County to
access those funds.
Mr. McIalwain thanked the members of the community who spoke on the ECA's behalf during Audience
Comments. Their comments illustrate how important the ECA has become to the community in a short
period of time.
Mayor Cooper suggested the citizens speak to the Snohomish County Council, commenting it was
important for the County Council to hear the message from the people who use the ECA. The Snohomish
County Council will ultimately make the decision regarding the allocation of Lodging Taxes based on the
recommendation of the Lodging Tax Advisory Committee.
Councilmember Buckshnis thanked Mr. McIalwain for meeting with her today. She pointed out the
ECA's total income is up 41% this year and net income is up 25 %. She was hopeful the $300,000 would
not be the end result. She requested City Attorney Jeff Taraday comment on the use of Real Estate Excise
Tax (REET) funds for ECA debt. Mr. Taraday explained he was asked to research whether the City could
use REET, specifically REET 1 revenue, to help pay the debt service. There are certain conditions under
which the City could do so. The facility does not necessarily need to be owned by the City. If the facility
is in the City's Capital Facilities Plan (CFP) and characterized as a recreational facility in the Plan, the
City should be able to use REET revenue to pay ECA debt service. Councilmember Buckshnis observed
the CFP would need to be revised to facilitate that. Mr. Taraday agreed amendments would be in order.
Councilmember Fraley- Monillas referred to the comparison of revenues and expenses and Mr. McIalwain
clarified the comparison was four months of 2010 compared to four months of 2011 and the 2011 budget.
She asked the total labor cost in 2010, noting the 2011 is $521,800. Mr. McIalwain responded it was
approximately $500,000 in 2010. That includes 5 FTEs and 10 part -time personnel, sometimes more
depending on needs in the theater. The ECA has 80 -90 volunteers who support the front of house
operations, special events, and administration.
Councilmember Wilson expressed his appreciation to Mr. McIalwain and Mr. Rinehart and the entire
EPFD and ECA Boards for their efforts particularly in the last couple months. In his opinion the
ECA/EPFD was doing a great job operationally as well as stewarding the facility through a very
challenging time.
8. DISCUSSION REGARDING SELF - FUNDED MEDICAL INSURANCE.
Councilmember Wilson explained this is a report from the Public Safety & Human Resources Committee.
The purpose is to update the Council and determine the Council's interest in the Committee continuing to
research self- funded medical insurance.
Councilmember Wilson provided the history:
• Tried self- insurance in the late 1990's
• Failed, primarily because was not established appropriately:
Edmonds City Council Approved Minutes
May 17, 2011
Page 9
• No reserves in place
• Unsure about level of stop -loss coverage (which protects the City's downside)
• New benefits were added without any analysis on impacts to cost
Left a sour taste in the mouth of many employees
He reviewed recent research:
• Administration set up a committee to review options for employee benefits:
o Genesis of idea to move to HealthFirst
o Saves the City about $300,000 annually
• Tasked with finding a new benefit option with no additional cost:
o This immediately made self- funding very difficult
o Not because of increased costs, but cash flow challenges
• A broker was retained to "Go To Market"
o AWC with whom the City partners for medical benefit coverage would not provide claim
data
• Two kinds of vendors
• Big insurance companies that also do self - insurance administration
• Small firms that only do self - insurance administration
He reviewed components of different concepts:
Medical Loss Ratio (MLR)
• Amount of premium dollar spent, or "lost," to paying for health care
• Nationwide, that number 65 -70%
■ About 30 cents on every $1 of insurance premium goes somewhere other than patient
care
■ 30% goes to profit, reserves, admin, taxes
■ If the City can figure out a self- funding model that works, funds will not go toward profit,
reserves to the same degree, or taxes
■ Admin: financial management (primary driver for premiums), marketing, reporting,
claims processing, and in some cases utilization management
■ Can the City do administration and claims processing better?
Risk Pool
• The more distributed the risk, the less likely spikes in cost will occur
• Our pool is municipal employees who are typically a little older
• Our risks likely look about the same as other cities:
■ If our employees are sicker than others, then it is less likely we will be able to save
money
If our employees are of average health, or healthier, (compared to the risk pool, not
society), then we are more likely to save money
Councilmember Wilson commented on the issue of claims history:
How much will we need to cover our employee costs?
• Set based upon the previous 3 years of medical claims history
• If you don't have that number, you're taking a guess — and it's a big one
• AWC has previously not been willing to release this information
• May take some legal effort
• Also may take legislative work
Councilmember Wilson commented on the role of reserves in the transition:
Edmonds City Council Approved Minutes
May 17, 2011
Page 10
Currently, we pay reserves every year, but they accrue to AWC/Regence
Moving forward, we can:
• Pay a little more each month
• This recreates the problem of the late `90s
• Don't confuse monthly allocation of premiums with reserves
• Pay a lot up front: $1.3million (revenue from sale of assets to Fire District 1) or some other
number
Councilmember Wilson reviewed the current cost structure for the City's current health plans:
Total employees
Total lives
Total monthly cost
Total annual cost
Cost per employee
Cost per covered life
207
499
$226,485.87
$2,717,830.44
$13,129.62
$5,446.55
He noted the cost per covered life was not excessive; it is possible this process will reveal the plans
provided through AWC are preferable. He noted the $2.7 million annual cost includes profit, reserves,
taxes and administration, things the City may not have to pay or could do cheaper.
Councilmember Wilson provided a chart illustrating medical care inflation versus total inflation 1.970-
2007. He pointed out the slight slowing of medical inflation in the mid -late `90s is related to very strong
returns in the stock market.
Applying the MLR to the City's current situation:
Remember that 30 -35% extra that goes to overhead?
Let's assume that AWC /Regence only takes 25%
• Our current premium for 2011 is $2,717,830
• That makes our cost for care $2,038,372
Overhead: Processing Claims
• The job of insurance companies: paying `claims' from doctors and hospitals
• At heart, they are paper pushers
• Two types in self - funding world
• ASOs: manage the big guys, like Boeing or MSFT
• TPAs: Work with small to medium sized firms typically
• Costs range from $35 -$50 per employee
• Does all of the admin work we ask of it
• For 207 employees, $87,000 to $124,000
Overhead: Stop Loss Coverage
o Limits our downside
• Protects our aggregate expenditures
• Protects us against any one event
o Comparable company in size, benefit structure
■ Quote at $280,000 per year
■ $40,000 limit
■ This number is very subjective
■ Really need to see what the market would tell us
Councilmember Wilson reviewed a one year pro forma:
Edmonds City Council Approved Minutes
May 17, 2011
Page 11
Councilmember Wilson explained the City needed to go to market again to get better and more complete
data and address the issue of AWC's unwillingness to provide claims data which may require a letter
from the City Attorney or the Legislative to force it.
Councilmember Wilson reviewed a six year pro forma, acknowledging it includes several assumptions
and the numbers are subject to change:
Plan
Option 1— Do Nothing
Option 2 — Self Insure
Total Annual Cost for Edmonds Medical Benefits
$2,717,830.44
2015
MLR at 75%
2017
$2,038,372.83
Cost of TPA at $50 per member
$124, 200.00
Subtotal
$2,162,572.83
Cost of Stop -Loss ($40k stop loss from comparable
Client data
Assumes 13%
$280,000.00
Total
$2,717.830.44
$2,442,572.83
Annual Savings
5,007,426
$275,257.61
Councilmember Wilson explained the City needed to go to market again to get better and more complete
data and address the issue of AWC's unwillingness to provide claims data which may require a letter
from the City Attorney or the Legislative to force it.
Councilmember Wilson reviewed a six year pro forma, acknowledging it includes several assumptions
and the numbers are subject to change:
Plan
2011
2012
2013
2014
2015
2016
2017
#1 AWC
Assumes 13%
$2,717,830
$3,071,148
$3,470,397
$3,921,549
$4,431,350
5,007,426
$5,658,391
growth
#2 Premium
(minus
$4,606,722
$4,376,386
$4,157,567
$3,958,387
$4,442,978
$5,054,465
carryover from
ear prior)
#2 Offset
from Year
($1,863,361)
($1,276,388)
($654,569)
Prior
#2 City
Annual
$4,606,722
$2,513,025
$2,881,178
$3,303,818
$4,472,978
$5,054,465
Contribution
#2 Actual
$2,743,361
$3,099,998
$3,502,998
$3,958,387
$4,472,978
$5,054,465
#2 Carry over
$1,863,361
$1,276,388
$654,569
Annual
$(1,535,574)
$957,372
$1,040,370
$1,127,532
$534,448
$603,926
Savings
Cumulative
($1,535,574)
($578,201)
$462,168
$1,589,700
$2,124,149
$2,728,075
Savings
Practical questions include:
• What is the claims experience of our employees?
o How can we find that out?
• Legal
• Legislative
• Is there any interest on the part of Council for us to continue exploring this?
Policy questions include:
• Are we willing to set aside sufficient reserves to not repeat our past failure?
• Building up reserves over time is risky
• Tendency to confuse base premium with reserve
Are we going to become financially stable enough to pursue this?
• Erosion of employees undermines this model
• If we want to implement this in July 2012, we need to get a levy passed before then
Edmonds City Council Approved Minutes
May 17, 2011
Page 12
He summarized this research was the result of Council direction to the Public Safety & Human Resources
Committee at the retreat.
For Councilmember Buckshnis, Councilmember Wilson explained the $4.6 million #2 Premium in 2012
has two components, 1) all the money that would have been paid to AWC to cover City employees,
approximately $3 million, and 2) 1.5 times that amount, or approximately $1.5 million, as a reserve. That
amount is not a cost; if it is not spent in year one, it accrues to next year. The cost would be the
employees' medical expenses plus $35 -$50 per employee for claims processing plus stop loss insurance.
The amount in #2 Premium goes down as the required reserve amount is reduced based on experience.
Councilmember Buckshnis advised Puyallup is going to self- funded medical, and Kirkland, Redmond and
Renton have self- funded medical insurance.
Councilmember Fraley - Monillas expressed interest in firmer numbers regarding the cost. She asked
whether the cost of stop loss insurance was $280,000 /year. Councilmember Wilson answered that is the
best guess; the actual amount is unknown until the City goes to market. Councilmember Fraley - Monillas
observed the claims history from AWC was needed to go to market. Councilmember Wilson agreed that
would make it much easier.
Councilmember Fraley - Monillas commented an older population of employees is ill more frequently. A
$40,000 limit would have covered about 1/3 — 1/2 of her hospital stay, requiring the stop loss carrier to
pay the remainder. She estimated Mayor Cooper and her illnesses would have easily exceeded the
$280,000 in one year. She was interested in the concept but was concerned the numbers may be too low
considering the age of the City's employees and the number of employees. She asked whether 200
employees was the minimum for self - insurance. Councilmember Wilson answered it was more
complicated than that. He acknowledged the City may reach the end of this process and determine self -
funded medical insurance does not make sense but he did not have enough data yet to make that decision.
Councilmember Wilson explained Regence prices the City's insurance based on the older staff
population. The City and everyone else in the risk pool is already paying for its older staff population.
Because the City has rich benefits compared to the rest of society, the City pays for all those benefits
regardless of whether an employee uses them. If the City self - insures, the City only pays for benefits used
and the savings accrue with the City. The City can continue to have very rich benefits because most
employees go to the hospital only four times, when they are born, when they die, when their kids are born
and once for an emergency.
Councilmember Wilson referred to a New York Times article on Saturday that reported this is the third
year of record profits in health insurance companies. One of the reasons they have been doing so well in
the last few years is because people are not going to the doctor because of their own price sensitivity. Yet
the City and others continue to pay for benefits their employees do not receive even though their
employees are not going to the doctor. He preferred the City accrue those savings rather than a health
insurance company.
Councilmember Buckshnis pointed out the Committee's research is free and she sees no downside to
continuing to research self- funded medical insurance. The intent is to optimize the use of revenue and this
would be one way to do that. She asked whether there was a cost of going to market. Councilmember
Wilson answered would depend on how it was structured.
Council President Peterson supported continued research but had concerns with the cost of staff time. He
asked whether the research would interfere with other priorities /needs in the Human Resources
Department or whether Councilmembers Buckshnis and Wilson could handle the additional research.
Edmonds City Council Approved Minutes
May 17, 2011
Page 13
Councilmember Wilson recognized it was a challenge for the two employees in the Human Resources
department to assist. Human Resources Director Debi Humann has been invaluable to the Committee and
he wanted to continue to rely on her assistance. It was their intent to be as respectful of the Human
Resources Department's time as possible. Council President Peterson suggested contacting Kirkland who
recently changed to self-insurance.
Mayor Cooper advised that Parks & Recreation Director Carrie Hite was on the committee in Kirkland
before she came to Edmonds. There was a four year collaborative effort in Kirkland between City
employees and City Council before a decision was made to change to self- funded medical insurance.
Councilmember Fraley - Monillas suggested one of the most importance components was getting claims
information from AWC. The claims information will be a large part of a decision whether the City can
afford self- funded medical insurance. She supported the City Attorney sending a letter to AWC
requesting that information.
Councilmember Petso inquired about the cost of approaching a TPA. Councilmember Wilson answered a
lot of data is available for free but there may be costs associated with obtaining the claims data from the
insurance carrier, which is 3 years of the aggregated anonymous employee data that shows how often
medical care was utilized. He anticipated they would seek approval from the Council for any substantial
expenditures.
COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON,
TO APPROVE RESOLUTION NO. 1251, REGARDING COUNCIL REVIEW OF MEDICAL
BENEFITS.
Councilmember Plunkett recalled he originally encouraged Councilmember Wilson to research self-
funded medical insurance. However, tonight's packet does not mention taking a vote. He noted that he
received the resolution via email yesterday or the day before, and he received a 6 -year pro forma tonight.
He will abstain from the vote due to the extemporaneous way it was presented to the Council.
Councilmember Fraley- Monillas suggested gathering more data and discussing it again next week. She
wanted some guarantees that it would not take a substantial amount of staff time. She suggested adding a
spending limit to the resolution such as $5,000 and that it would not take staff away from the current
priority, negotiations. Councilmember Wilson explained the Public Safety & Human Resources
Committee has been working on self- funded insurance at the direction of the Council at the retreat. If this
is not a Council priority, he would appreciate the Council providing that direction. To Councilmember
Plunkett's comment that he just received the resolution, Councilmember Wilson explained his day job
prevented him from drafting it sooner.
COUNCILMEMBER PETSO MOVED, SECONDED BY COUNCILMEMBER FRALEY-
MONILLAS, TO POSTPONE THIS ITEM TO NEXT WEEK'S MEETING. MOTION CARRIED
(5 -1), COUNCILMEMBER PLUNKETT VOTING NO.
Councilmember Plunkett explained he will not be at the May 24 Council meeting. Mayor Cooper pointed
out both Councilmembers Plunkett and Bernheim will be absent next week. He suggested the discussion
be postponed to a different date certain.
COUNCILMEMBER PETSO WITHDREW THE MOTION WITH THE AGREEMENT OF THE
SECOND.
Council President Peterson explained he will attempt to schedule it the first week of June and if not, will
not schedule discussion regarding self - funded insurance on the Public Safety & Human Resources
Committee June 14 agenda.
Edmonds City Council Approved Minutes
May 17, 2011
Page 14
Councilmember Wilson disclosed he has worked as a consultant to many healthcare organizations. He
will not receive any financial benefit as a result of self-insurance. His wife works for a third party
administrator but they do not work with public entities. He noted there are City employees in the audience
who attended last night's Public Safety & Human Resources Committee meeting and previous meetings.
He assured this is a good faith attempt and an open dialogue to address one of the primary concerns of the
Council and the public, managing healthcare inflation costs. This effort is being done with the full
participation of City employees who are trying to be responsive to the concerns as well.
Council President Peterson explained one of the reasons this item was scheduled on this agenda was
because investigating ways to reduce insurance costs is an integral part of levy discussions. He assured
the public that the Council was actively engaged in saving money, not just asking taxpayers for more
money.
Mayor Cooper advised he will work with City Attorney Jeff Taraday on communication to AWC and
perhaps request an opinion from the Office of the Insurance Commission about whether AWC can
withhold claims information.
Mayor Cooper declared a brief recess.
9. DISCUSSION OF LEVY OPTIONS (PUBLIC COMMENT WILL BE RECEIVED
Public Comment
Joan Bloom, Edmonds, referred to the statement that the City does not have an expense problem, it has a
revenue problem. She has also heard that the City's operations are lean with no room for cuts in the
budget, the justification the Mayor and some Councilmembers have used in promoting a levy. She
pointed out the City has both a revenue and expense problem. She referred to March 31, 2011 Seattle
Times article that stated Seattle eliminated about 300 positions, reduced hours at community centers, cut
park maintenance, raised some fees and won wage concessions from unions in order to close a $67
million shortfall in their $895 million budget. An April 1, 2011 Seattle Times article stated ferry workers
after forfeiting $18.3 million in raises the past 2 years, will accept a 3% pay cut for the next 2 years as
well as paid less for overtime and travel time. She cited these as examples of concessions being made by
public employees in response to budget crises facing the state and nation. By comparison, all Edmonds
employees received a COLA increase in 2009 of 5.8% and it was her understanding employees also
received COLA increases in 2010 and 2011. As of 2007, the average salary of the 45 non - represented
employees was $87,500 /year compared to the $55,000 /year average Edmonds household income. She
estimated the average pay for those 45 employees was now over $90,000 /year. With regard to staffing
levels, she relayed that the Development Services Department processed 188 land use applications in
2002, compared to 56 in 2009, less than 1/3 of those processed in 2002. The Development Services
Department continues to be staffed at 2002 levels despite the dramatic decrease in land use applications.
She urged the Council to immediately stop trying to determine how to manipulate citizens into voting for
a levy and instead focus their attention on these issues. Until compensation and staffing levels are
addressed, she will vote no on any levy.
Al Rutledge, Edmonds, commented funding for park improvements was not the answer; funds are
needed to stabilize the City's finances. Next, he recommended a decision regarding a levy be unanimous
or at least supported by 5 or 6 Councilmembers instead of a 4 -3 vote. With regard to Lake Ballinger, he
noted MLT has 3 homes on the lake and Edmonds has 52. MLT is conducting a study and meeting with
residents on the lake. He recommended Lake Ballinger be funded via the Parks & Recreation budget.
Roger Hertrich, Edmonds, observed the Council is unable to reach agreement on a levy and suggested
they focus on the budget and labor negotiations. He anticipated the Council would not bargain as
Edmonds City Council Approved Minutes
May 17, 2011
Page 15
aggressively during labor negotiations if additional revenue was provided via a levy. He did not anticipate
citizens would support a levy. He recalled at the last Council meeting, the levy proposal started with roads
and then several other items were added. He recommended the Council discontinue discussions regarding
a levy and direct the Mayor to tighten the budget and reduce staff.
City Clerk Sandy Chase distributed a draft ordinance. Council President Peterson explained the draft
ordinance contains the levy elements the Council agreed to last week, a November ballot, $700,000 for
street overlays, $800,000 for building maintenance and $1 million to fund the deficit, a total of $2.5
million.
COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER WILSON,
TO ADOPT ORDINANCE NO. 3842.
Councilmember Fraley - Monillas advised she would not support the ordinance. She was disturbed that this
levy proposal was run through when two Councilmembers were absent last week. She recalled comments
the prior week that a vote would not be taken on the levy at the May 10 meeting. She had not had an
opportunity to discuss or have input on the proposals in the ordinance.
Councilmember Wilson explained the ordinance was the result of discussions that have been occurring for
the past 2�/z years. He disagreed it had been run through; staff was directed to prepare an ordinance for
Council discussion. He recognized Councilmember Fraley - Monillas may want to add or change the
ordinance and it was appropriate to make those amendments now. He was hopeful that concerns with the
process would not get in the way at this point. He encouraged Councilmember Fraley- Monillas to amend
the ordinance if she wished.
Councilmember Petso expressed concern with the process as well as with the ordinance as written. She
too had been unclear that a vote would be taken at the May 10 meeting. The ordinance does not match the
action the Council took. The ordinance states, 1) the levy will be on the August 16, 2011 levy and the
motion the Council approved last week was for a November election, and 2) instead of $700,000 for
overlays, the ordinance states street maintenance and overlays. She did not support the motion last week
and she will not support it tonight. Mayor Cooper responded the ordinance should state a November levy
as the Council requested. He agreed the Council was very specific about funding overlays; the wording in
the ordinance was likely the result of the City Attorney's interpretation of the minutes. He concluded
those corrections could be considered typos and would not require an amendment.
Councilmember Petso commented those were her concerns after reading page 1; she had not yet read the
remainder of the ordinance.
In response to Councilmember Wilson's comment that this had been discussed for two years,
Councilmember Fraley- Monillas recalled the Council was told on May 3 that discussion regarding the
levy would continue on May 10 and that there would not be a vote. She found it irresponsible to bring
forth this ordinance without input from two of the seven Councilmembers. She would not support the
ordinance as she had not had an opportunity to review or understand it or provide input. It would be
irresponsible for her to vote on the ordinance simply because the Council had discussed it last week.
Mayor Cooper encouraged the Council to focus on the merits of the amounts and issues in the levy. He
reminded the items in the draft ordinance were the result of a series of 3 -2 votes and not the same
Councilmembers voting yes or no each time. The motion the Council ultimately adopted last week simply
requested those three items be placed in a draft ordinance and brought forward for Council consideration.
It was understood there were two Councilmembers missing at the May 10 meeting but there needed to be
something to put forward to the Council that could be amended, accepted or rejected in order to keep the
Edmonds City Council Approved Minutes
May 17, 2011
Page 16
process moving forward. He assured there was no attempt on his or the Council's part to short circuit the
process; it was an attempt to keep the process moving.
Councilmember Fraley - Monillas commented it felt as if she had been backdoored. She was certain ethics
were prevailing but it did not feel right. Mayor Cooper commented it was the Council's choice not to take
any action on the ordinance tonight.
Council President Peterson explained the original motion made on May 3 was delayed to May 10 with the
knowledge that the full Council would not be present at the May 10 meeting. Councilmember Petso's
motion regarding $700,000 for street overlays was reintroduced after reviewing the May 3 minutes. He
was surprised that Councilmember Petso was unaware there would be a vote when it was her motion. He
commented the intent of preparing the draft ordinance was to allow the Council to discuss and amend it,
and either approve or reject it.
COUNCIL PRESIDENT PETERSON CALLED FOR THE QUESTION.
Councilmember Fraley - Monillas raised a point of order, stating a Councilmember could not speak on the
motion and then call the question. Mayor Cooper ruled Council President Peterson's motion in order.
UPON ROLL CALL, THE VOTE ON THE CALL FOR THE QUESTION FAILED (3 -2 -1),
COUNCILMEMBERS WILSON AND PETSO AND COUNCIL PRESIDENT PETERSON
VOTING YES; COUNCILMEMBERS PLUNKETT AND BUCKSHNIS VOTING NO; AND
COUNCILMEMBER FRALEY- MONILLAS ABSTAINING.
Councilmember Buckshnis explained she had a presentation to make and asked whether she needed to
wait until the Council voted on the ordinance. Mayor Cooper suggested she could pose an amendment to
the ordinance and support her amendments with her presentation. He noted Councilmember Buckshnis'
proposal was likely to be ruled out of order because it calls for separate ballot measures. He suggested the
Council vote on the ordinance and then Councilmember Buckshnis make her presentation.
VOTE ON THE MOTION FAILED (2 -4), COUNCILMEMBER WILSON AND COUNCIL
PRESIDENT PETERSON VOTING YES.
Council President Peterson observed Councilmember Buckshnis' proposal related to a November ballot.
Given the hour and because there was not a pressing need to make a decision tonight, he suggested
delaying her presentation until June 7 when the entire Council was present. Councilmember Buckshnis
questioned why the draft ordinance was considered when it was for a November ballot. Council President
Peterson responded he wanted to conclude that matter.
Councilmember Buckshnis offered to delay her presentation but make her comments. She explained her
largest issue is Ordinance 3789 has been in effect for the past 14 months, an ordinance that has specific
requirements related to financial clarity, timely financial statements, and citizen - friendly financial
statements. She requested administration provide a timeframe and process for implementing the
ordinance. She referred to a comment by Councilmember Wilson at yesterday's Public Safety & Human
Resources Committee meeting that the City would be $600,000 in the hole next year, advising that may
not be the case because the forecast includes $200,000 for the Development Services Director position
that has not been filled and salaries include a 2% increase. She did not believe the situation was as doom
and gloom as Councilmember Wilson portrayed it. She recommended the Council take its time and
comply with the ordinance.
Councilmember Fraley - Monillas questioned what the $1 million in the levy proposal would fund.
Councilmember Wilson referred to the Executive Summary — Current Forecast, pointing out the 2012
Edmonds City Council Approved Minutes
May 17, 2011
Page 17
outlook has a deficit of approximately $600,000, $1.2 million in 2013, $1.1 million in 2014, and $2.5
million in 2015. To get through the next four years providing the same level of service with a staff that
already does more with less, the City needs approximately $4 million. Although that amount has changed
during discussions in the past 2 years, what has not changed is that the City cannot raise property taxes
fast enough to keep pace with inflation in the cost of services. $1 million /year for four years is just to
maintain the basic, current services. He referred to the fifth whereas in the draft ordinance that states the
City Council has determined to ask the voters if they are willing to fund $1,000,000 in General Fund
deficit reduction.
Mayor Cooper explained the proposal he presented to the Council allocated approximately $1..2 million to
General Fund deficit reduction. That is based on the projections Interim Finance Director Jim Tarte
provided. That was the amount required to address the deficit before the additional $100,000 for the ECA.
The Council budgeted $100,000 for ECA in 2011, the forecast allocates $200,000 to ECA beginning in
2011. He pointed out the Development Services Director position is not fully funded in the 2011 budget
because the Council used approximately five months of that salary to fund a portion of the Strategic Plan
and requested the position not be advertised. He planned to delay advertising for that position until he
knew the Council's decision regarding moving forward with a levy.
Councilmember Petso explained when she met with Mayor Cooper and Council President Peterson
yesterday, it was suggested that the format of the levy discussions be changed to a work session rather
than the current parliamentary procedure format. The advantages of a work session are it is still a public
meeting but ideas can be exchanged more freely without motions being amended in a way that eliminates
the logic of the original motion. For example, the original motion for a levy for street overlays did not
matter whether it was on the August or November ballot because it did not impact the Mayor's
preliminary budget. The motion was then amended to add items that impacted the budgeting process and
may have been better to include in an August ballot measure. In a Saturday workshop format, possibly the
Council could develop a proposal that could be returned to the Council for approval or rejection.
Council President Peterson distributed a resolution for a levy that would fund the General Fund obligation
to Fire District 1, noting this idea was originally proposed by Councilmember Buckshnis. He explained
the FDl contract is the City's biggest single expense, approximately $6.2 million /year. The EMS levy
contributes $3.25 million and transport fees contribute $700,000, leaving $2.2 million from the General
Fund to pay for fire service. He supported the City having a secure funding source for public safety. The
FD1 contract is an obligation the City agreed to and it cannot be reduced via staff or expense reductions
because the fire service personnel are no longer City employees. He preferred to give citizens the option
of providing secure funding source for the fire service contract and allowing the Council to debate
funding for parks, the ECA, and other things that are not crucial to public safety. His proposal was a 4
year, $2.2 million levy on the August ballot with a 2.5% annual increase. He recommended an August
election so the outcome would be known when the Mayor prepares his budget. If a levy is on the
November ballot, the Council's original budget discussions will be "all but make believe" because the
Council will not know whether any revenue will be provided from a levy. If Edmonds moves to a
Regional Fire Authority within the four year term of the levy, the levy would be rescinded.
COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER WILSON,
TO ADOPT RESOLUTION NO. 1251.
If Council President Peterson's proposed levy passed in August, Councilmember Fraley- Monillas asked
whether another levy would be proposed on the November ballot. Council President Peterson responded
there could be another ballot measure in November. Some of the other items the Council has discussed
such as street overlays are apolitical; everyone agrees with the need for street overlays. He explained
funds from a levy for street overlays would not address the City's bottom -line. He supported placing a
Edmonds City Council Approved Minutes
May 17, 2011
Page 18
levy to fund fire service on the August ballot and then considering whether to place a levy on the
November ballot to fund other things such as street overlays and/or deferred maintenance.
COUNCILMEMBER FRALEY- MONILLAS MOVED, SECONDED BY COUNCILMEMBER
PLUNKETT, TO EXTEND THE MEETING FOR 45 MINUTES. MOTION CARRIED (5 -1),
COUNCILMEMBER WILSON VOTING NO.
Councilmember Fraley - Monillas commented the draft ordinance the Council did not approve was $2.5
million, $700,000 for street maintenance, $800,000 for building maintenance and $1 million for the
General Fund. This proposal is $2.2 million. Council President Peterson responded he did not take the
previous proposal into account when preparing the resolution. If there was only $300,000 difference
between the proposals, Councilmember Fraley - Monillas suggested a levy for $500,000 -$1 million could
be placed on the November ballot. Council President Peterson envisioned if a levy such as his resolution
proposed was approved by the voters, it would address the bottom -line and then the Council could
consider a levy to fund deferred maintenance. He noted fully funding street overlays requires $1.5
million /year.
Councilmember Buckshnis referred to her memo regarding a smorgasbord of levy options that includes
$2.2 million for relief of the General Fund as suggested by the Citizen Levy Committee. She explained a
levy to fund fire service would free up General Fund money and eliminate the deficit. It will not provide
funding for street overlays, parks upgrades or Public Works maintenance; it strictly frees up $2.2 million
of General Fund revenue and funds the City's largest operating expense, fire service.
Councilmember Petso was stunned by this proposal. A $2.2 million levy equates to a 16% property tax
increase before the Council considered funding for roads, parks, or other needs. She preferred to prioritize
via a workshop rather than agreeing to a $2.2 million General Fund levy and then ask the voters for $1.5
million, an 11% increase, for street overlays in November. She was certain the voters would not approve a
27% tax increase. She felt it was too aggressive and unrealistic to assume a $2.2 million levy could be
placed on the August ballot and then place another levy on the November ballot.
Councilmember Plunkett observed this levy proposal was a subsidy to the General Fund that was tied to
fire and public safety to help it pass. He reiterated he will not support any levy proposal until labor
negotiations are competed. Labor represents 54% of the entire future operating budget. There has been
some good give and take during negotiations and he was reasonably optimistic regarding the outcome.
Until the largest line item in the operating budget is resolved, he was unwilling to subsidize the operating
budget.
Council President Peterson credited Councilmember Buckshnis with this idea. Whether a person believes
the City has a revenue problem or a spending problem, the City has a bottom -line problem that he does
not think can be resolved via cuts. His proposal alleviates the General Fund deficit, allowing the Council
to discuss funding for other things. He recognized there was support for a smorgasbord approach to levy
items; his proposal was a levy on the August ballot and other items can be placed on the November ballot.
He preferred to allow the voters to decide how their tax dollars are spent. He summarized it will be
difficult to have a realistic budget discussion if the outcome of a levy is unknown. He anticipated the
result will be cuts that may then not be needed or there will be an effort not to make cuts because it is an
election year.
Councilmember Fraley - Monillas felt it was risky to arbitrarily vote to place a $2.2 million levy on the
ballot without advance notification and more forethought. If such a levy failed in August, it would be an
indication that a November levy would also fail. Although the idea of a levy to fund fire service has merit,
she asked why it was proposed for the August versus November ballot. Council President Peterson
reiterated a November ballot does not allow for realistic budget discussion because the outcome of the
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levy is unknown and it is an election year for four Council seats and the Mayor. He anticipated any
operating levy that did not get the full support of the Council would become a political football. He
anticipated a roads levy in November would get significant support from the Council and would not
become a political football.
Councilmember Fraley - Monillas supported allowing citizens to vote on individual levies. She was not
comfortable with acting so quickly so that the outcome would be known before the 2012 budget process.
Councilmember Buckshnis explained the reason she pulled the concept of a levy to cover the costs of fire
service was her desire to consider the total cost to citizens. She agreed with Councilmember Petso that a
$2.2 million fire service levy was too aggressive if there was a desire to fund street overlays, parks and
other things via a levy.
MOTION FAILED (2 -5), COUNCIL PRESIDENT PETERSON AND COUNCILMEMBER
WILSON VOTING YES.
Mayor Cooper suggested Council President Peterson consider scheduling a work session to develop a
levy proposal.
Councilmember Wilson commented two years ago, the majority of the members of the eight Citizen Levy
Review Committee groups agreed a levy was needed. He pointed out the political courage of those
citizens in a difficult economic climate to request the Council increase their taxes. The Council developed
a couple of proposals at that time and when they failed to proceed, he requested the Councilmembers who
voted against the proposals submit recommendations to address the issue. It takes political courage in this
economic climate to make a tax proposal; Mayor Cooper has brought a proposal, he made a proposal,
Council President Peterson brought one, and Council President Peterson and he worked on one. He
commented some Councilmembers were taking positions of opposition out of principal and others were
telling him one thing and voting differently. He questioned how the Council could ever achieve four votes
when he could not trust them to tell him the truth; if they indicated they would support a proposal, he
urged them to support it. He did not want to spend a Saturday in a room with Councilmembers he could
not trust. He suggested Councilmembers Buckshnis, Petso and Fraley - Monillas meet and figure out what
they can support and when.
Councilmember Petso did not recall saying she would vote for this proposal or the proposal presented at
the beginning of the discussion. She was interested in reaching a common ground and thought three
weeks ago she had identified common ground. She made a motion that was subsequently amended to the
extent that she voted against it. She was happy to spend time to determine the Council's common ground
and preferred a workshop format versus a Council meeting with parliamentary procedure.
Councilmember Fraley - Monillas spoke in support of teamwork as a process, commenting the process at
Council meetings does not allow for an open discussion between Councilmembers to develop a levy
proposal. She agreed with the suggestion for a work session that the public could attend that would allow
Councilmembers to speak freely in a less formal setting. She suggested scheduling a workshop on the
fifth Tuesday, May 31 rather than a Saturday.
Council President Peterson suggested a two week breather and schedule a short Council meeting followed
by a work session regarding a levy at a meeting at the end of June. Councilmember Fraley - Monillas
suggested the date selected for the work session be a date that all Councilmembers can attend.
Councilmember Buckshnis commented she would be willing to meet with Councilmembers Petso and
Fraley - Monillas to develop levy scenarios. With regard to the 2009 Levy Committee recommendations,
Councilmember Buckshnis pointed out the sale of the Fire Department bought the City some additional
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time. Pointing out that haste makes waste, she wanted to be sure that the voters approved the levy the
Council placed on the ballot. She was doubtful the voters would pass a levy until labor negotiations were
complete and citizens were provided timely, accurate financials.
It was the consensus of the Council to schedule a work session.
City Clerk Sandy Chase confirmed August 16 is the deadline for the November ballot.
Councilmember Wilson suggested Councilmembers Fraley- Monillas, Petso and Buckshnis provide the
Council a levy proposal. He reiterated his position: he wanted to fund existing services and staff; that was
non - negotiable and he wanted to buy back the police officer that was cut and Crime Prevention. Because
he felt November was a terrible time to place a levy on the ballot, he was likely not going to support a
levy on the November ballot regardless of what it contains.
10. REPORT ON CITY COUNCIL COMMITTEE MEETINGS OF MAY 10 2010
Community Services /Development Services Committee
Council President Peterson reported the following items were discussed and approved on tonight's
Consent Agenda:
• Authorization to Advertise for Construction Bids for the Sewer Lift Station Rehabilitation Project
• Authorization to Advertise for Construction Bids for the 2011 Waterline Replacement Project
• Report on Final Construction Costs for Caspers Street/Ninth Avenue N/Puget Drive (SR524)
Walkway Project
• Report on final construction costs for the Five Corners Booster Pump Station Improvements and
• Council acceptance of project
• Discussion on needed repair to the Treatment Plant's outfall pipe and the process for obtaining
bids and awarding project
• Report on final construction costs for the Odor Control Improvement Project and Council
acceptance of project
• Report on final construction costs for the 2009 Asphalt Overlay Project
• Ordinance amending the Edmonds City Code (ECC) 8.64.060 Parking Provisions in the
Downtown Edmonds area
Council President Peterson commented many of the projects include grant money and he expressed his
thanks to the Public Works Department for their efforts.
Public Safety & Human Resources Committee
Councilmember Buckshnis reported the Committee met on May 10 with the Police Chief and Human
Resources to discuss the Snohomish Regional Drug and Gang Task Force Interlocal Agreement that was
approved on the Consent Agenda. The Committee also discussed a compensation consultant. The
Committee met on May 16 with members of staff and administration to discuss self-insurance.
Finance Committee
Councilmember Petso reported two finance staff attended the meeting. The Committee inquired about the
April monthly report; it will be provided on next week's Consent Agenda. The Committee also discussed
the first quarter report; major revenue sources are approximately as budgeted with the exception of plan
check fees. Major expenses are approximately as budgeted with the exception of overtime and Mayor
Cooper is following up on an insurance question. Councilmember Buckshnis, Interim Finance Director
Jim Harte and she then discussed last year's reports and financial policies. Staff will follow up on last
year's numbers as time permits and staff recognizes questions are constructive and result in corrections of
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May 17, 2011
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errors and discovery of items of importance. There is general agreement reports can be improved but
financial policies are not useful until staffing is increased or rearranged in some manner.
11. MAYOR'S COMMENTS
Mayor Cooper reported the Dick's Drive In ground breaking is scheduled for Thursday, May 19 at 10:30
a.m. He commended staff for the hard work they have done to process Dick's permits and overcome
challenges related to stormwater and traffic mitigation. Dick's plans to open the restaurant this fall.
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Councilmember Buckshnis thanked Interim Finance Director Jim Tarte for his participation in the
discussion at the Finance Committee meeting. Mr. Tarte, Mr. Williams and she are working on assigning
a person specifically to utilities who can be funded by the Utility Fund as well as freeing up a CPA to
focus on finances. Mr. Williams is interested in having two finance people work on utilities, one for
customer support and the other assisting with payments, funded via the Utility Fund. This may help free
up Finance personnel to prepare reports.
Councilmember Fraley - Monillas hoped Councilmembers will think about the future and put their
personalities and views aside and do what is best for the citizens in November. She thanked citizens for
their calls and cards expressing condolences on the passing of her mother.
Councilmember Wilson assumed the attitude that Councilmember Fraley - Monillas suggested would
apply to her earlier comments about being irresponsible or a question of ethics.
Council President Peterson commented the Council will likely need to consider budget cuts in the 2012
budget because the outcome of a November levy will be unknown when the budget is prepared. He urged
Councilmembers who do not believe a levy will pass to think about cuts that can be made to the budget.
13. ADJOURN
With no further business, the Council meeting was adjourned at 10:34 p.m.
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