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04/01/1986 City CouncilTHESE MINUTES SUBJECT TO APRIL 8, 1986 APPROVAL EDMONDS CITY COUNCIL MINUTES April 1, 1986 The regular meeting of the Edmonds City Council was called to order at 7:00 p.m. by Mayor Larry Naughten in the Plaza Meeting Room of the Edmond's Library. Al-1 present joined in the flag sa- lute. PRESENT ABSENT. STAFF PRESENT Larry Naughten, Mayor Cindy Browne, Student Rep. Mary Lou Block, Planning Div.Mgr. John Nordquist Bob Alberts, City Engineer Steve Dwyer Steve Simpson, Parks&Rec. Mgr. Laura Hall Jack Weinz, Fire Chief Jo -Anne Jaech Pat LeMay, Personnel Manager Bill Kasper Art Housler, Admin. Svcs. Dir. Lloyd Ostrom Peter Hahn, Comm. Svcs. Director Jack Wilson Dan Prinz, Police Chief Scott Snyder, City Attorney Jackie Parrett, City Clerk Margaret Richards, Recorder Council President Hall did not attend the meeting until 7:10 p.m. and did not vote on items previ- ous to Item (M) on the Consent Agenda. CONSENT AGENDA Items (E), (F), (G), (I), and (M), were removed from the Consent Agenda. COUNCILMEMBER JAECH MOVED, SECONDED BY COUNCILMEMBER NORDQUIST, TO APPROVE THE BALANCE OF THE CONSENT AGENDA. MOTION CARRIED.. The approved items on the Consent Agenda include the following: (A) ROLL CALL (B) APPROVAL OF MINUTES OF MARCH 18, 1986 (C) APPROVAL OF MUSEUM LEASE (D) ADOPTED ORDINANCE 2556 RELATING TO BOARD AND COMMISSION MEMBERS WHO HAVE NOT MAINTAINED ATTENDANCE (H) AUTHORIZATION FOR MAYOR TO SIGN CONTRACT WITH "MUSIC AFFAIR" AND ADVANCE YOUTH ACTIVITIES BOARD $520.00 FOR ALL HIGH DANCE Oil APRIL 12, 1986 (J) ADOPTION OF COUNCIL FINDINGS AND CONFIRMATION OF DECISION OF PRELIMINARY APPROVAL FOR SUBDIVISION P-6-85 (LARSON) (K) APPROVAL OF SENIOR CENTER LEASE (L) ACKNOWLEDGMENT OF RECEIPT OF CLAIM FOR DAMAGES FROM LILLIAN A. COOK ($269.20) (N) AUTHORIZATION TO SELL SURPLUS BACKHOE AND.TRAILER (0) AUTHORIZATION TO CALL FOR BIDS FOR TWO-YEAR CONTRACT FOR UNIFORM SUPPLY PROPOSED ORDINANCE 2557 ADJUSTING NONREP RESENTED EMPLOYEES" SALARIES AND SALARY RANGES BY 3% I M N THE CONSENT AGENDAJ * Councilmember Jaech said she agreed with the 3% cost -of -living increase but not the salary range. COUNCILMEMBER NORDQUIST MOVED, SECONDED BY COUNCILIIE14BER `KASP`ER, TO APPROVE ITEM (E). MOTION CARRIED, WITH COUNCILMEMBER JAECH AND COUNCILMEMBER KASPER OPPOSED. *See minutes of April 8, 1986 PROPOSED ORDINANCE 2558 REPEALING "DETENTION ASSESSMENT" AND "SENTENCES" SECTIONS OF CITY CODE I M F N THE CONSENT AGENDA] Councilmember Ostrom requested clarification of the Ordinance. City Attorney Scott Snyder stated that Judge Conroy pointed out that the City's current Ordinance provides that prisoners may be required to pay the entire cost of their incarceration, which is an unconstitutional provision and is being deleted. COUNCILMEMBER OSTROM MOVED, SECONDED BY COUNCILMEMBER NOROQUIST, TO AP- PROVE ITEM (F). MOTION CARRIED. PROPOSED ORDINANCE ADOPTING STATE ENERGY CODE [ITEM (G) ON THE CONSENT AGENDA] Councilmember Kasper noted that this issue was brought forth to be discussed at the Council meet- ing and not on the Consent Agenda. He inquired if any answers were forthcoming regarding ques- tions by Councilmembers at the previous meeting. City Attorney Scott Snyder noted that a copy of the AWC publication was included in Councilmembers' packets which was referred to by Councilmem- ber Nordquist. Mr. Snyder stated: 1) the City is required by State law to begin enforcing the State Energy Code regardless of whether it is passed; 2) the AWC's interest is what they were using for their cost figures was not a comparison of the old State Code and the new Sate Energy Code but, rather, the new State Energy Code and model conservation standards. Mayor Naughten recommended that this item be continued to Item 9. PROPOSED ORDINANCE 2559 AMENDING SECTIONS 16.30.030 AND 16.30.040 OF THE COMMUNITY DEVELOPMENT Councilmember Jaech expressed concern over allowing buildings or structures in an RM zone to encroach into the setbacks surrounding it because she said it allows the building to be a larger building. COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCILMEMBER KASPER, TO APPROVE ITEM (1). A ROLL CALL VOTE WAS TAKEN. MOTION CARRIED, WITH COU14CIL14EMBER JAECH AND COUNCILMEMBER OSTROM OPPOSED; COUNCILMEMBER DWYER, COUNCILMEMBER KASPER, COUNCILMEMBER NORDQUIST, AND COUNCILMEMBER WILSON IN FAVOR. AUTHORIZATION TO REPLACE DU14P TRACK ($41,000) [ITEM (M) ON THE CONSENT AGENDA] Councilmember Kasper inquired if monies are consistently being drawn from other funds to make up the difference in the "B" Fund. Administrative Services Director Art Housler said because of an increase in market value of a new vehicle or additional equipment requested for a vehicle, the cost exceeds the replacement amount in the reserve fund so it must be budgeted and is generally in the fund that owns the vehicle. Councilmember Kasper inquired if the expenditure was actually budgeted or if it will be drawn from the Street Fund. Mr. Housler said $12,550 has been budgeted to replace the dump truck. COUNCILMEMBER KASPER MOVED, SECONDED BY COUNCILMEMBER WILSON, TO APPROVE ITEM (M). Councilmember Ostrom inquired why the "B" Fund does not have sufficient funds to purchase the truck. Mr. Housler said because, perhaps, additional equipment is needed or because of infla- tion, the truck has exceeded the expected cost. Councilmember Ostrom asked how this might be coped with in the future. Mr. Housler noted that would be hard to determine. (Council President Hall entered the room at 7:10 p.m.) Councilmember Kasper inquired if other equipment was purchased from "B" Fund which was not on the list for replacement. Community Services Director Peter Mahn said lie does not recall this occur- ring recently. Councilmember Kasper recommended that monies be immediately allocated to the "B" Fund prior to being allocated for a particular item. COUNCILMEMBER KASPER MOVED, SECONDED BY COUNCILMEMBER NORDQUIST, TO APPROVE ITEM (M). MOTION CARRIED, WITH COUNCILMEMBER HALL ABSTAINING. PRESENTATION BY MAYOR OF PROCLAMATION TO HONOR FEDERALLY RETIRED EMPLOYEES Mayor Naughten read into_ the record the proclamation. He recognized the Sno-King Chapter 1966 and Chapter President Bill Russell and requested the officers and retired employees to stand to be recognized. Mayor Naughten presented Mr. Russell with the proclamation. Mr. Russell ex- pressed his appreciation on behalf of the organization. He said the organization consists of eighty-seven members at the present time, and they hope to double their membership in the future. EDMONDS CITY COUNCIL MINUTES Page 2 APRIL 1, 1986 AUDIENCE Dennis Russell, 23705 - 74th Ave. W., present on behalf of the Lake Ballinger Community Club, said they were disappointed that the meeting scheduled on March 31, 1986 with the Mountlake Ter- race City Council and Edmonds City Council did not take place. He said the Community Council has gathered a lot of information on the pollution issue, lake restoration, and invalidity of shooting water fowl on the Lake, and it is very important to them that a public quorum addresses these issues, either in the form of a joint Council meeting or a Citizens' Advisory Committee. Councilmember Hall said she would like to take a consensus of the Councils to see what action should be taken. Mr. Russell said because the Lake Ballinger Community Club has approached Mount- lake Terrace City Council on numerous occasions to address this issue without success, the City of Edmonds should become involved. Councilmember Ostrom noted that the Mountlake. Terrace area surrounding Lake Ballinger is nonresi- dential, but the Edmonds area is residential. He recommended that a joint meeting be scheduled with the two Councils with public input. He said it did not make sense to him that the residents of the Lake were not as concerned about the pollution issue as were the owners of the golf course. Doug Rogers, 23627 - 74th Ave. W., said residents of the Lake are subjected to as many as twenty- four shot gun shots throughout the day commencing at 7:30 a.m. Residents are vitally concerned about the welfare of the Lake. fie said the Community Council has conducted many studies 'and discovered the present action is not workable and wish to present expert documents as an alterna- tive to controlling water fowl on the Lake. Councilmember Hall recommended that Councilmember Nordquist place this issue on the Community Services Committee agenda. Mayor Naughten closed the audience portion of the meeting. HEARING ON PROPOSAL TO EXEMPT BED AND BREAKFAST ESTABLISHMENTS AND SINGLE -UNIT RENTALS FROM BUSINESS LICENSE REQUIREMENTS City Clerk Jackie Parrett reported that until recently, none of the bed and breakfast establish- ments in the City had business licenses. The City did not know who these businesses were until last Fall when a newspaper article appeared in the Enterprise. Ms. Parrett said she obtained brochures of the bed and breakfasts from the Chamber of Commerce, contacted each of them and advised them that they should have business licenses. The proprietor of one business obtained a business license, but some of the others resisted, basing their posi- tion on the Community Development Code, which permits, as secondary uses in RS zones, the rent- ing of rooms without separate kitchens to one or two persons. However, Ms. Parrett said the City Code requires licenses for businesses and defines them as "All services and activities engaged in with the object of pecuniary gain, benefit or advantage to the person or class, directly or indi- rectly, whether part-time or full-time". Ms. Parrett said the proprietors of one bed and breakfast stated that they would withdraw their brochure from the Chamber of Commerce, and another said they would not take any more renters until the matter is resolved. Councilmember Hall, said Ms. Parrett, subsequently indicated to the City Attorney that she had received an inquiry from constituents, and she requested.that the Administrative Services Commit- tee address the question. Another issue that arose was that of a single -unit rental, such as renting a private residence or renting one or two rooms. These qualify as businesses under the City Code. The Administrative Service Committee reviewed the entire issue, and they felt it should go .before the Council. It did not make a recommendation. Ms. Parrett said she sent notices of tonight's hearing to everyone she was aware of who owned or were potential owners of bed and breakfasts. EDMONDS CITY COUNCIL MINUTES Page 3 ; APRIL 1, 1986 �1 u Councilmember Ostrom asked if the fee for a business license is $15. Ms. Parrett said the fee for a small-business license is $20. Councilmember Ostrom inquired if the objection was to pay the license fee. Ms. Parrett said the objection was more philosophical. She said one of the proprietors of a bed and breakfast commented that if they were considered a business, their insur- ance premiums were likely to go up. Most proprietors do not perceive this activity as a busi- ness. One proprietor said they engage in it as a hobby. Mayor Naughten opened the public portion of the hearing. Scott Whitcutt, 621 - 5th Ave. S., was present to represent his parents who have operated a bed and breakfast in Edmonds for the past six years. tie spoke in favor of exempting bed and break- fasts from business licensing. Mr. Whitcutt said the majority of people look to the Community Development Code as a philosophical difference in that they don't believe that bed and breakfast activities or the boarding of two or fewer people is a business. He said the Community Development Code allows, as a secondary use, the boarding of one or two persons. Separate from this, the Community Development Code regulates activities considered to be business activities through the Home Occupation Permit and restricts Boarding Houses to the RM zone, thus differentiating the activities of a business and the simple use of a dwelling. Mr. Whitcutt said the City has recognized that students do board in homes. The Community Devel- opment Code, by allowing one or two borders without a Home Occupation permit and business li- cense, recognizes that as a legitimate and reasonable use of the home. Mr. Whitcutt further noted that the State does not license or regulate the boarding of one or two persons, and the Health District does not oversee such activities. He said the City Attorney indicated that he sees no objection to the proposed exemption and that the Licensing Code is a general code applied throughout the City. Mr. Whitcutt said he believed the Community Develop- ment Code is more specific in regulating business activities in a single-family zone and is the proper Code to look to. He requested that the Council support the exemption and if, in the future, growth of bed and breakfasts increase, registration be implemented with the Community Services Department similar to a home occupation, accessory dwelling unit, and conditional use. Finis Tupper, 711 Daley, said the issue before the Council is whether it is two or fewer peo- ple. He said when a three -unit building can accommodate more than two. people, issues need to be addressed such as: 1) is a Home Occupation Permit necessary; 2) signage; and 3) parking. Mr. Tupper said bed and breakfasts are a growing industry and need to be regulated before prob- lems arise. He suggested that the present time is a perfect opportunity for the Council to make some intelligent decisions, particularly in light of Expo. Hellon Wilkerson, 18313 Olympic View Drive, said she and her husband have accommodated people in the past as a bed and breakfast establishment. She said their home is not equipped to accommo- date more than�two people because they only have one extra room in their home. Scott Whitcutt, previously identified, said the present Community Development Code regulates against local units and multiple rooms. He said everything is intact to protect the City against outlandish growth in the area. Mayor Naughten closed the public portion of the hearing. Mayor Naughten inquired if a business license is required when a house is rented. Ms. Parrett said technically a rentor is required to have a license. Ms. Parrett noted that although most bed and breakfasts only have one room available, she was aware of at least one establishment that advertised two rooms being available. Councilmember Hall noted that "transient accommodations" by the State refers to three or more lodging units, whereas the Community Development Code refers to one or two persons. She recom- mended that bed and breakfasts be required only to register their businesses. COUNCILMEMBER HALL MOVED, SECONDED BY COUNCILMEMBER KASPER, THAT THE CITY REQUIRE BED AND BREAKFASTS PROPRIETORS TO REGISTER THEIR HOME WITHIN THE CITY OF EDMONDS. EDMONDS CITY COUNCIL MINUTES Page 4 APRIL 1, 1986 Councilmember Kasper said this issue is really a simple one. He checked on the fire insurance aspect of bed and breakfasts, and the business does not have any effect on the policy. However, he said liability was questionable. The City does not require a license for duplex accessory dwelling units, only a Conditional Use Permit. Councilmember Kasper said imposing business li- cense requirements on bed and breakfasts at this time was unjustifiable. Councilmember Dwyer noted the issue before the Council is: What is a business? Does the City perceive bed and breakfast activities as a business? And does the City perceive rentals or single -unit leases as a business? He said he did not see any advantage to the registration proposal in the motion; that a business license should be required or nothing at all. Councilmember Dwyer said the distinction of a business is something that takes place regularly and systematically with a profit in mind as opposed to occasional and random activity. He said he would like to see licensing requirements for businesses, and the absence of the requirement for those which are not businesses. Councilmember Kasper asked how to differentiate a rooming house --two bedrooms --and a bed and breakfast from a business? Councilmember Dwyer said he was unsure where to make the distinction. City Attorney Scott Snyder noted that the current City Code covers these establishments and re- quires licenses. The discussion before the Council is whether to exempt bed and breakfasts, not to subject them to business licenses. Councilmember Ostrom inquired if bed and breakfasts are defined anywhere in the City Code. Mayor Naughten replied negatively. Councilmember Ostrom said if bed and breakfasts are to be regulat- ed, they should first be defined. Mr. Snyder read from the ordinance he drafted in January, Section 4.72.010-C "Definitions", not- ing it refers to persons leasing two or fewer rentals or one private residence. A ROLL CALL VOTE WAS TAKEN. MOTION CARRIED, WITH COUNCILMEMBER HALL, COUNCILMEMBER KASPER, COUN- CILMEMBER OSTROM, AND COUNCILMEMBER WILSON IN FAVOR; COUNCILMEMBER DWYER, COUNCILMEMBER JAECH, AND COUNCILMEMBER NORDQUIST OPPOSED. Mr. Snyder recommended that the ordinance he drafted be redrafted to include the registration provision. COUNCILMEMBER HALL MOVED, SECONDED BY COUNCILMEMBER WILSON, TO ACCEPT THE REDRAFTED ORDINANCE BY THE CITY ATTORNEY. A ROLL CALL VOTE WAS TAKEN. THE MOTION FAILED, WITH COUNCILMEMBER HALL, COUNCILMEMBER KASPER, AND COUNCILMEMBER WILSON IN FAVOR; COUNCILMEMBER DWYER, COUNCILMEMBER JAECH, COUNCILMEMBER NORDQUIST, AND COUNCILMEMBER OSTROM OPPOSED. Councilmember Hall queried Councilmember Ostrom why he was opposed to the motion. Councilmember Ostrom said the motion did not address exempting bed and breakfasts from licensing. Mr. Snyder urged the Council to give him some direction regarding the ordinance because he said the City has an ordinance in effect that clearly requires these businesses to be licensed. Councilmember Kasper noted that there are conflicts in the Codes which need to be revised. COUNCILMEMBER OSTROM MOVED THAT THIS ISSUE BE CONTINUED TO A FUTURE AGENDA. THE MOTION FAILED FOR LACK OF A SECOND. Councilmember Wilson asked Councilmember Ostrom what he desired to pursue regarding bed and break- fasts. Councilmember Ostrom said he wanted to pursue what the ordinance sets forth. Councilmem- ber Wilson cited sections of the ordinance, noting that it is very clear. He expressed concern that this issue be addressed at this time. Councilmember Wilson asked if Councilmember Hall's motion needed to be incorporated into the ordinance. Mr. Snyder replied affirmatively. Councilmember Jaech noted that a monetary gain in exchange for lodging differentiated between guests and boarders. Councilmember Kasper said he felt no action should be taken at this time until the i.ssues are defined and Codes are amended. EDMONDS CITY COUNCIL MINUTES Page 5 APRIL 1, 1986 COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCILMEMBER HALL, TO APPROVE ORDINANCE 2560 AND TO ENCOMPASS THE REGISTRATION REQUIREMENTS IN THE MOTION PREVIOUSLY PASSED. Mayor Naughten asked if the motion required both a license and registration. Mr. Snyder said the ordinance referred to would delete all licensing requirements. A ROLL CALL VOTE WAS TAKEN. THE MOTION FAILED, WITH COUNCILMEMBER HALL AND COUNCILMEMBER WILSON IN FAVOR; COUNCILMEMBER DWYER, COUNCILMEMBER JAECH, COUNCILMEMBER NORDQUIST, AND COUNCILMEMBER OSTROM OPPOSED; COUNCILMEMBER KASPER ABSTAINED. *COUNCILMEMBER OSTROM MOVED, SECONDED BY COUNCILMEMBER JAECH, TO CONTINUE THIS ISSUE TO APRIL 8, 1986. MOTION CARRIED, WITH COUNCILMEMBER DWYER, COUNCILMEMBER HALL, AND COUNCILMEMBER OSTROM OPPOSED. HEARING ON PROPOSED RATE INCREASE BY SOUND DISPOSAL, INC., FOR GARBAGE COLLECTION City Clerk Jackie Parrett reported that Sound Disposal has applied to the Washington Utilities & Transportation Commission for a rate increase to take effect on April 1, 1986. She said the Council requested that a public hearing be scheduled to give citizens an opportunity to comment. However, Ms. Parrett said, she has not received any comments or complaints, nor has anyone signed up on the sign-up sheet. The Utilities Commission granted the rate increase, which will cover the excise tax, insurance increases and other expenses. Mayor Naughten opened the public portion of the hearing. Frank McKee, 1808 - 175th Pl. S.E., Bothell, was present representing Mr. Nicholson, owner of Sound Disposal, Inc. Councilmember Wilson asked how the rate increase augurs with the lack of momentum in the labor market and the windfall decreases in fuel costs. Mr. McKee said although the company is realiz- ing a small savings in fuel consumption, it is experiencing a tremendous increase in liability insurance and an increase in labor. He noted that they have not had a rate increase in four years. Mr. McKee said that the company only operates three trucks one day of the week and two trucks the remaining days, utilizing approximately twelve gallons of fuel per day per truck. Councilmember Nordquist inquired if a dump fee increase is anticipated. Mr. McKee replied nega- tively. Councilmember Nordquist inquired if the company utilizes Cathcart. Mr. McKee said it does but only on holidays when the transfer station is closed. Mayor Naughten inquired if Sound Disposal is prohibited from dumping on 165th. Mr. McKee re- plied affirmatively. Councilmember Hall noted that the insurance premiums offset the rate increase. Mr. McKee noted that their books were audited by the Utilities & Transportation Commission prior to approval, and it has determined that the company meets the guidelines and necessary require- ments to obtain the rate increase. Councilmember Hall said the pickup/cleanup week is approaching, and the disposal service volun- teers many services.. She. said the community really benefits from their services, particularly at this time. Mayor Naughten closed the.public portion of the hearing. COUNCILMEMBER JAECH MOVED, SECONDED BY COUNCILMEMBER NORDQUIST, TO APPROVE THE PROPOSED RATE INCREASE BY SOUND DISPOSAL, INC., FOR GARBAGE COLLECTION. MOTION CARRIED. The meeting recessed at 7:20 p.m. and reconvened at 7:25 p.m. HEARING ON SECONDARY SEWAGE TREATMENT ENGINEERING REPORT Mayor Naughten recognized Mayor Jeanette Wood from Woodway in the audience. Community Services Director Peter Hahn introduced the consultant team as follows: Ray Elridge, Bud Benges, and Bron Hemphill; members of the Department of Ecology (DOE): Janice Kelley and Norm Skenck; Treatment Plant Supervisor, Geri Tompkins. *See minutes of April 8, 1986 EDMONDS CITY COUNCIL MINUTES Page 6 APRIL 1, 1986 Mr. Hahn stated that the engineering report has been completed and submitted to the DOE. It was reviewed by the Engineering Division, Treatment Plant Supervisor, and Director of Administrative Services. The review process is ensuing with the DOE and will be reviewed with emphasis on predesigns and special elements, such as sludge management. Mr. Hahn noted that the conclusions of the report are similar to the Phase I conclusions, and are as follows: * Metro option unfeasible * Other sites unavailable * 10.8 million gallon per day per plant feasible at present site * Total project cost - 39.1 million * Rate impact increase - $7.46/month for single-family house in 1986 to $20.10-26.80 in 1991 Councilmember Dwyer inquired if the 20% granted is the cigarette tax money. Mr. Hahn replied affirmatively. Councilmember Kasper asked what the basis was for the unavailability of another site. Mr. Hahn said the Consultant Team looked at every conceivable site identified in the Phase I report that is possible at the present time, and the best site possible was on Union Oil property but they rejected the City's offer. Councilmember Kasper asked what precluded condemnation. Mr. Hahn said although condemnation is still an option, the cost impact would be $3.6 million, which does not take into consideration the acquisition of the land nor the possible sale value of the present site. Mr. Hahn then reviewed the information on the flip chart, noting that the facility plan is com- pleted. He said the design phase will commence late in 1986 or in 1987, and the construction phase in approximately mid 1988. Mr. Hahn said one of the key elements of the project is sludge management. Tile City met with Snohomish County. Because sludge is part of their solid waste plan, sludge management will take priority. In addition, the City is working with Metro to analyze the possibility of giving them some of the sludge because they have greater resources for handling sludge. Lastly, the Staff has reviewed studies conducted by the State and City of Lynnwood regarding privatization to become acquainted with the possibilities that are available to the City. The State legislature passed the Water Quality Funding bill. The eight cents tax is estimated to provide $175 million for Puget Sound, which is not very much compared to the cost of $1 billion to upgrade Puget Sound discharging plants to secondary treatment plants. The State legislature also passed the privatization bill, which enables the private construc- tion, financing, and operation of water treatment plants. However, the present action on tax reform impacts the financing of any of these options, as well as a number of other bills under consideration in the U.S. Congress. The State Department of Community Development conducted a comprehensive study of generic public works projects, and the City of Lynnwood undertook a feasibility study for -its own secondary treatment plant upgrade at a cost of $15,000. They are prepared to go even further with privatization and prepare a full request for proposals and are organizing a team of experts to outline, in detail, the kinds of proposals they want submittals on. Mr. Hahn said there is no question that it can be shown on paper in either of the studies that significant savings are possible; the private sector realizes a 10% tax credit; accellerated depreciation of 5 years on 90%.of the cost of the plant. However, these savings will be reduced if certain changes in the proposed tax laws take place. Mr. Hahn noted that there is a considerable element of risk in undertaking privatization, but a 24.2% decrease in costs can be realized over a twenty-year period. The privatize'r will real- ize a 22.2% internal rate of return. But the current tax laws will reduce the 24.2% savings to 14.3%. Mr. Hahn then reviewed the anticipated rate increases for 1986 through 1991. Councilmember Jaech noted that the rates double in one particular year. She inquired how much net increase is generated per year by. doubling the rates:.. Mr. Hahn, replied $2 million. EDMONDS CITY COUNCIL MINUTES Page 7 APRIL 1, 1986 Councilmember Jaech inquired if a gradual increase is possible so that rate payers would not be impacted at one time. Mr. Hahn said by raising the rates in the manner shown, the rate increases will be tailored to the amount needed, thus being very precise in matching spending and rates. Councilmember Jaech inquired if the tax payers would realize an overall savings if the rate in- crease was implemented at the present time. Administrative Services Director Art Housler stated that Staff determined it would be best to raise the rates when the money was actually needed for the following reasons: 1) citizens are concerned that bonds should not be issued or rates in- creased until the money is actually needed, and; 2) if rates were increased, a question would arise whether the monies might be used for other emergency projects. Mayor Naughten said Staff's recommendation is to not raise the rates until the money is needed. The public is dubious when rates are raised before money is needed or when money is put into reserves. Mr. Hahn recommended to wait for approval of the report and apply for design funds. He said the application for the funds will begin July 1, and the money will be available in September. Mr. Hahn added that Staff does not anticipate spending monies to pursue privatization. Mayor Naughten opened the public portion of the hearing. Jeanette Wood, Mayor of Woodway, said she and the Woodway Town Engineer met with Mr. Hahn and Mayor Naughten to request additional future sanitary sewage capacity. She said Mayor Naught - en and Mr. Hahn recommended that the City of Woodway send a formal letter addressing this re- quest. Mayor Wood read the letter into the record which asked for 394 additional sanitary sewer connections. Councilmember Ostrom inquired what effect Woodway's request would have in the plan. Mr. Hahn said that the increment is so minimal that no problems are anticipated. Councilmember Jaech asked what the overall capacity would be versus the usage at the time the treatment plant is completed. Councilmember Kasper replied the design is 7 MGD (million gallonsper day), and it will be built to 10.8 MGD. Councilmember Jaech inquired if everyone can be accommodated. Mr. Hahn said the plant will accommodate total buildup under the present zoning and land use plans. Councilmember Jaech inquired if total buildup is consistent with projections forecasted by the State and other agencies for the South County development projected by the year 2,000. Mr. Hahn replied affirmatively. Mayor Naughten closed the public portion of the hearing. Councilmember Dwyer inquired if the City is granting Woodway's request. Mayor Naughten said the request will be incorporated into the plan as soon as Edmonds receives Woodway's comprehen- sive sewer plan. Mr. Hahn noted that Woodway's main request will, if granted, take place in April 1991. He said the State should be apprised of any increase, though, regardless of size. Mayor Naughten expressed his appreciation to Mr. Hahn for the extensive report. He also compli- mented Culp/Western/ Culp Consulting Engineers, and Ott Water Engineers for the secondary treat- ment report. Councilmember Kasper inquired if consideration has been given to secondary treatment combining with Lynnwood. Mr. Hahn said he discussed this subject with Bill Davis, Lynnwood's Public Works Director, and Mr. Davis said combining would not be feasible for the City of Lynnwood. Mayor Naughten recognized Bob Noak, Finance Director of Lynnwood, in the audience. Councilmember Jaech requested information on the impact of a gradual rate increase if it were implemented at the present time. Councilmember Kasper noted that Reid -Middleton conducted an implementation study in 1979. He inquired what those items entailed. Mr. Hahn said the assumption made in that report was that 75% of Federal funds would be available, and 15% State funds. Mr. Hahn inquired if oxygen was discussed more in detail. Bud Benges said specific alternatives were reviewed that would fit on the site and would not fit on the site that were felt appropriate for the project. Mr. Hahn noted that capital investments are favored when 90% funding is available, whereas operating costs must be taken into consideration today. Councilmember Kasper inquired if upgrading of the plant could be implemented in the interim. Mr. Hahn said although much of the plant can be rebuilt and replaced, he is concerned with operation improvement in the intervening five years. EDMONDS CITY COUNCIL MINUTES Page 8 APRIL 1, 1986 PROPOSED ORDINANCE 2560 FOR RECLASSIFICATION OF OFFICE ADMINISTRATOR POSITION TO E-2 Community Services Director Peter Hahn gave background information. * Councilmember Hall inquired if the Council would receive reclassification requests in piece- meal form throughout the year, and why this particular reclassification was singularly before the Council. Mr. Hahn said the Office Administrator position is part of the original comprehen- sive study and is based on the same point factors adopted by the Council. Councilmember Ostrom asked for clarification of the $800 exppenditure. Mr. Hahn said the NE-9 position will be reclassified to an E-2 position, which is a $99 monthly increase, and multiplied by 8 months equals approximately $800. Councilmember Nordquist noted that reclassification discussions were scheduled to commence during the second quarter of the year. Mayor Naughten clarified that reclassifications were to be brought to the Council on a quarterly basis instead of piece -meal, but the Office Administrator position was not included as part of the reclassification ordinance so it was necessary to in- clude it under a separate ordinance. Councilmember Nordquist inquired if the qualifications of the position have changed as a result of grade increase. Mr. Hahn said the job is consistent with the five job factors used to analyze all 91 jobs. The job reclassification of E-2 is recom- mended simply because there was no other direct exempt level available. Councilmember Nordquist inquired if the Office Administrator is qualified to perform the new job qualifications. Mr. Hahn replied affirmatively. * COUNCILMEMBER OSTROM MOVED, SECONDED BY COUNCILMEMBER HALL, TO ADOPT ORDINANCE 2560 FOR RECLASSI- FICATION OF OFFICE ADMINISTRATOR POSITION TO E-9. MOTION CARRIED. YOST POOL STATUS UPDATE AND BUDGET REVISIONS Councilmember Nordquist noted that this issue is before the Council as a result of the Community Services Committee meeting last week, and Councilmember Kasper was influential in bringing to light some of the problems at Yost Pool. Councilmember Kasper said although he agreed to an open structure, he had originally proposed an enclosed structure. Councilmember Hall commented that the Council was led to believe it was not be an open structurebecause the description given was "a game room -type setting" and the decking was to be enclosed. Mr. Hahn said the drawings that were presented to the Council depicted an open struc- ture. The covered open structure will allow for proper drainage. Councilmember Kasper ques- tioned the drainage plan. City Engineer Bob Alberts gave background information. Councilmember Ostrom asked when the plan checker discovered the concerns of rigidity. Mr. Al- berts said prior to going out for bid. Councilmember Ostrom inquired if the architect was to perform the construction supervision throughout the project. Mr. Alberts said although the archi- tect had no agreement with the City to supervise the construction phase, lie was hired to do so because of the numerous questions raised by the contractor in trying to interpret the architect's drawings. Councilmember Jaech inquired if the plans that the architect originally drafted were unsound. Mr. Alberts said the plans that went out to bid did not address all the concerns of the plan checker. Councilmember Jaech inquired if those concerns included safety and structural items. Mr. Alberts said they included structural stability meeting the Uniform Building Code. Council - member Jaech noted that the plans, then, were not necessarily structurally correct. Mr. Alberts replied affirmatively. Councilmember Kasper noted that the City, then, will compensate someone to correct ,these errors. Mr. Hahn commented that "omission" was more definitive than "error": lie said revisions suggested by the -plan checker to the architect were omitted in the bid document. Councilmember Jaech.commented that although the architect erred, he is being hired to oversee the continuation of the project, plus the City is paying people to correct the deficiencies. City Attorney Scott Snyder said the architect is not being paid to make those corrections, as he has already made them in accordance with the plan check and other items that were addressed. Council - member Jaech inquired about the cost of. Staff time, contractor time, and cost overruns. Mr. *See minutes of April 8, 1986 EDMONDS CITY COUNCIL MINUTES Page 9 APRIL 1, 1986 Snyder noted that the City may be submitting a claim for those costs. Mr. Hahn said it is hard to estimate in terms in "damages". Councilmember Kasper requested an explanation of costs. Mr. Alberts said the tank and deck con- tract is 50% complete, and the City is now obligated at $124,256. An additional $15,500 is need- ed to complete that contract. Councilmember Ostrom inquired what the original cost was. Mr. Alberts replied slightly over $100,000. However, he said three change orders have been executed, which has escalated the cost. The contract amount for the building addition is $51,550, and no change orders have been executed to date. Councilmember Kasper asked if the Council was involved in authorizing the additional $24,256. Mr. Alberts referred to the Council packet. Councilmember Jaech inquired if the problems encountered around the decking of the pool were a result of the architectural drawings. Mr. Hahn said certain unknown conditions must be anticipat- ed when a renovation project is undertaken which requires demolition. Vie said perhaps 50% of the conditions could have been anticipated. Councilmember Ostrom referred to the Council packet, Section I. He inquired if the problems were a result of the incomplete architectural drawings. Mr. Hahn replied negatively. He referred to I-B, "Additional Costs", noting that these items were unanticipated, such as perimeter fencing. Councilmember Dwyer inquired about the fencing. Parks & Recreation Manager Steve Simpson said the existing fence is 6 ft. high topped with three strands of barbed wire. It was recommended by the risk manager to install a 10 ft. high fence topped with three strands of barbed wire. Coun- cilmember Dwyer questioned the expenditure. Mr. Simpson said the old fence is not reusable to construct the new 10 ft. fence. Councilmember Jaech questioned why the change orders were not previously presented to the Coun- cil. Mr. Hahn said his experience has been that change orders are not presented to the Council. Councilmember Kasper inquired where the additional funds are coming from. Mr. Alberts replied Fund 125. Mr. Alberts reported that there have been no change orders on the building to date. The three options discussed at the Committee meeting were as follows: 1) stiffen the structure and continue with the contract at an additional cost of $14,000-19,000; 2) enclose the structure on three sides at an additional cost of $19,000-25,000; 3) abandon the project at an additional cost of $4,000-12,000. The City has already invested $8,000 into the project. * Councilmember Ostrom inquired if the plan could be abandoned and a shed constructed instead. Mr. Alberts said that would entail rebidding the project. Councilmember Hall asked when the pool is scheduled to open. Mr. Hahn replied June 1. Council - member Hall inquired if the deadline will be met. Mr. Alberts replied affirmatively. Councilmember Wilson referred to the costs under "Options" on Table 1. Mr. Alberts said total funds available for the project in 1986 were $167,536. Total project obligation is $193,669, of which $32,275 was expended in 1985. The additional expenditure of the fence leaves a remaining balance of $42, and if not funds are not expended for the fence, $9,000 will remain. Additional monies are required for options 1 and 2. $20,000 has been earmarked for the project in Fund 125 for 1986; $12,000 can be utilized from the Marina Beach budget, and $3,000 from the neighborhood park budget, making a total of $35,000 available for potential reallocation for Yost Pool. Councilmember Jaech noted that the community would forego budgeted improvements at the Civic Center if the funds are reallocated to Yost Pool. Mr. Alberts concurred, noting that the improve- ments would be deferred until next year. Councilmember Jaech inquired why the funds were budget- ed for the Civic Center if improvements were not going to be made this year. Mr. Simpson said * major renovations would not be made until the property on the playfield was cleaned up. Council - member Jaech inquired why the Council was not informed of this at the Budget meeting. Mr. Simp- son said it was reviewed. Councilmember Wilson inquired if this request would be the final request if the money is appropri- ated for the project. Mr. Alberts said the estimate is that it should be the final cost. Howev- er, costs for renovating an existing structure cannot be guaranteed. * See minutes of April 8, 1986 EDMONDS CITY COUNCIL MINUTES Page 10 APRIL 1, 1986 Mayor Naughten inquired if demolition was complete and no hidden surprises would arise. Mr. Hahn noted that the City has not received any firms prices on the change orders involving the building. Mr. Alberts requested reallocation of $35,000 from various funds for the project. * Councilmember Jaech noted that an additional cost of $73,470 will be incurred to complete the project as proposed. Councilmember Ostrom questioned the competency of construction personnel and/or Staff. He asked why the project has encountered the many problems. Mr. Alberts said he was unsure. Mr. Hahn noted that it is not Mr. Alberts responsibility to ascertain why problems have been encountered. He said sometimes estimates are too low, or there is a lack of performance on the part of the architect to identify project costs. Mr. Alberts noted that the City is obligated to the contrac- tor to consummate the contract. Councilmember Dwyer noted that the validity of the contractual obligation may be determined by who is liable for the omissions. He asked if none of the blame lies with the contractor with the two contracts. Mr. Snyder stated that the City has $50,000 of claims which may be filed against various parties. He urged the Council not to force Staff to make simple judgements, particularly regarding reallocation of costs. Councilmember Dwyer asked if the funds are unrecoverable if the City institutes an action against someone else. Mr. Snyder said he was unsure at this time. However, he said the nature of the problems are resolved, and Staff needs Council action in order to keep the project on schedule. Mr. Snyder expressed con- cern that the City has a duty to mitigate damages, and those costs may not be recoverable if delays are made. Mr. Hahn added that most of the additional costs relate to conditions that were not fully anticipated at the time of bidding or presentation to the Council. He said had the costs been precisely identified, a larger bid would have been elicited. Councilmember Hall expressed discontent that the Council was not apprised sooner by Staff of the change orders and, also, that improvements in the Civic Center playfield may not be available if the monies are reallocated. Mayor Naughten adjourned the meeting at 10 p.m. COUNCILMEMBER JAECH MOVED, SECONDED BY COUNCIL - MEMBER KASPER, TO RECONVENE THE MEETING. MOTION CARRIED. Councilmember Kasper recommended to complete the pool but curtail the building enclosure. He inquired if the Council had the option to delay the enclosure. Mr. Alberts replied affirmative- ly. Councilmember Kasper commented that change orders are the "nature of the beast", but a con- tract cannot be breached because of it. Councilmember Jaech expressed concern that the architect is being hired to supervise the continua- tion of.the project. She noted that she could not take action on Number I because the architect is included. She requested that this issue be discussed in Executive Session. Councilmember Dwyer asked if the original building addition is no longer a possibility. Mr. Alberts said that an additional $14,000-19,000 is needed to complete that phase, and a total of $23,000-28,000 is needed to complete the tank and deck contract. PROPOSED ORDINANCE ADOPTING STATE ENERGY CODE [ITEM (G) ON THE CONSENT AGENDA] City Attorney Scott Snyder reported that the energy savings (that is, it would cost an additional $2,000 per home) was a reference to the difference between the Energy Code contained in the Ordi- nance now being enforced by State law requirement and model conservation standards that are Bonneville Power Administration (BPA) initiated. BPA will continue to initiate a 10% surcharge on all jurisdictions that are not meeting their energy requirements beginning in 1987. To meet BPA's 1989 additional standards will cost an additional $2,000 per house constructed in the City. However, it will cost 10% on everyone's utility bill if the standards are not met. Councilmember Kasper noted that enforcement is not written into the Code. Mr. Snyder said addi- tional funds have not been appropriated to enforce the Code. Councilmember Kasper said the State requested BPA to accept an interim procedure because the legislature did not want to proceed until some of the costs were evident. COUNCILMEMBER JAECH MOVED, SECONDED BY COUNCILMEMBER OS- TROM, TO ADOPT ORDINANCE 2561 ADOPTING STATE ENERGY CODE. MOTION CARRIED, WITH COUNCILMEMBER * KASPER OPPOSED. MAYOR Mayor Naughten announced that seven people graduated from the Police Explorer Program, which is the first of the County. The Mayor congratulated the Police Department for their effort. It is EDMONDS CITY COUNCIL MINUTES * See minutes of April 8, 1986 Page 11 APRIL 1, 1986 a pioneering project which is approximately a year in duration. Mayor Naughten said he and Chief Prinz had handed out diplomas to the Explorer Group. COUNCIL Councilmember Kasper noted that the City of Edmonds has been awarded one trolley in Edmonds for a full-time moving route on a six-month trial. The other trolley is available to the City as well as other cities for events. He recommended that the City reserve the trolley for the 4th. Mayor Naughten clarified that the moving route trolley will be available on a no -cost basis. Councilmember Wilson referenced an anonymous letter expressing concern over neighborhood eye- sores. Mayor Naughten said that issue has been addressed. Councilmember Wilson acknowledged Fire Chief Jack Weinz's summary of activities for 1985 in the Fire Department. He said it appears that the Fire Department had a very good year, and the Coun- cil was proud of the Department. Council President Hall reported that she received a call today from Gloria Mae Campbell of the Arts Commission. They requested to be involved in the City's selection of art pieces due to problems, such as with matting, encountered in the past. Councilmember Jaech commented that their offer was appreciated. However, she felt that the Council should make the selection. If they wished to peruse it subsequently, they were more than welcome to do so. Councilmember Jaech noted that material that was dredged from the Port of Edmonds to expand the Marina was moved and stored next to the marsh on a temporary permit. .She requested that a report be provided to the Council because many people have been inquiring about the status of the materi- al. Councilmember Jaech inquired if a quorum of the Council would be present for the 2 o'clock meet- ing on the 9th of April with the Department of Transportation to discuss the ferry traffic light. Council President Hall noted that the Mayor recommended that this was the optimal time and date for Staff and Mayor to attend this meeting. The meeting recessed to Executive Session at 10:18 p.m. to discuss labor negotiations and other legal matters for approximately 30 minutes. J UEL NE G. PARRETT, City Clerk LM3KY S. MUGHTEN, Ma or EDMONDS CITY COUNCIL MINUTES Page 12 APRIL 1, 1986