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02/11/2000 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES City Council Retreat February 11 and 12, 2000 Edmonds City Hall Edmonds, WA ELECTED OFFICIALS PRESENT : STAFF PRESENT:::: Friday, February 4 1 Gary Haakenson, Mayor Peggy Hetzler, Admin. Services Director Thomas A. Miller, Council President Ray Miller, Development Services Director Michael Plunkett, Councilmember Cindi Cruz, Exec. Assistant (Later arrival.) Chris Davis, Councilmember Police Chief Robin Hickok (Later arrival.) Dave Earling Councilmember- Early departure - approx. 12:45 p.m. Fire Chief Tom Tomberg Lora Petso, Councilmember Arvilla Ohlde, Parks & Recreation Director Jim White, Councilmember Noel Miller, Public Works Director David J. Orvis, Councilmember Brent Hunter, Human Resources Director Scott Snyder, City Attorney Linda Carl, Executive Assistant to Mayor Jana Spellman, Recorder CALL TO ORDER The meeting was called to order at 8:30 a.m. by Council President Miller. Council President Miller explained that the agenda had been set to give an informational overview of the various City departments because of the number of new Councilmembers. Mayor Haakenson was the first speaker on the agenda and began with a City Organization Overview. CITY ORGANIZATION OVERVIEW —Mayor Haakenson Mr. Haakenson began his presentation with an overhead showing where the City was in 1976 and where it is now. This overhead showed population, assessed valuation, # of full -time employees, citizen ratio, General Fund, Public Safety % of General Fund, Library costs, prisoner care costs, and non - department costs. He finished his presentation by referring to the organizational chart of the City. Council President Miller then called on Peggy Hetzler to give her presentation which was an overview of Administrative Services. ADMINISTRATIVE SERVICES - Peggy Hetzler, Administrative Services Director Ms. Hetzler's overview touched on the following: Mission Statement, accounting and financial reporting, treasury (cash and debt management investments), and budget and long -range forecasting. She then listed the services her Department provides as follows: utility-billing, payroll and accounts payable, risk management, City Clerk, information technology, contracted legal services and fiscal agent for SNOCOM. She informed the Council that � she serves on the Investment Advisory Committee of the multi -city Municipal Employees Benefit Trust and is the City's delegate to the Washington Cities Insurance Authority. She went on by listing the goals for the year 2000 and goals achieved in 1999. She answered questions as they arose. The next topic for Ms. Hetzler was the affects of I -695 on the City's budget. WELCOME TO THE NEW WORLD OF I 695 =Peggy Hetzler, Aduuln><strat><ve 3erv><ces Director Ms. Hetzler included in her packet the following: Unanswered I -695 Questions by Foster Pepper & Shefelman, a press release by Attorney General Christine Gregoire, memo from Attorney General's Office on interpreting I -695, Frequently Asked Questions About Initiative 695 by Seattle Northwest. Securities, and Initiative 695 Scoping Plan (draft) by Dan Clements, Snohomish County Finance Director. She commented on each of the articles and answered questions from the Council Council President Haakenson indicated that he and Council President Miller had met with some officials in Olympia and they indicated that the State would be offering no financial help to the City of Edmonds. It was agreed that the Long -Range Financial Task Force should begin to meet on a regular basis to -come He covered the following points in his presentation on the overview of the Fire Department: organization, statements of purpose, core missions, budget, operation concept, staffing, cross - training and cross - staffing, union representation, population served, fire stations, apparatus and vehicles, fire prevention, training, spoke about Edmonds being a Class 4 fire protection City and indicated that he thought he could bring that rating to a Class 3, call volume, fire loss, emergency medical services (EMS), dispatch, fire and EMS contracts, disaster preparedness, automatic aid, Support 7, and Edmonds Fire Safety Foundation. Questions for the Council were taken and answered as received. He then went on to his presentation on EMS long -term. EMS LONG TERM = Fire:!Ch><ef Tomberg Chief Tomberg started by establishing what was happening in the present and referred to emergency medical technician- defibrillator training, intermediate life support training, advanced life support training, tiered response system, Medic 7 years of service, cities served, governance, administration Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 2 staffing and vehicles, medical program director, Medic 7 budget, EMS levy, Fire Department EMS budget, call volume, and EMS charges. After he established the present, he discussed the following regarding the future: .a consortium City withdrawing from Medic 7 system, delivery systems, charging for services, what will be happening in the future (financial impact of I -695), an action plan, and the investment the City has in its current Medic 7 employees. Questions from Council were answered as they arose. OVERVIEW OF THE PLANNING AND ADB BOARD - Rob Chave, :Planning Manager Mr. Chave's presentation consisted of a detailed account of the Planning Board and the Architectural Design Board including membership, what function they play, and how each Board comes into play when various permits are submitted to the City. He informed the Council that although he wasn't going through the distributed packet item by item,'he was going to speak about the major issues. He began by explaining that there were a number of short- term projects that they would like to finish and that these projects would be coming before the Council shortly. He followed by stating that the remaining projects for the year 2000 were the projects that the Planning Board really want to see completed. Mr. Chave told the Council that the Planning Board would like as much feedback from the Council as possible. He suggested that the periodic meetings that are scheduled between the Mayor, Council President Miller, and Planning Board Chairman would be helpful regarding more communication between the Planning Board and Council. He mentioned the RFP .that was in progress that would help consolidate design guidelines by organizing them into one logical, organized body of design guidelines ,that can be used for reference. He told the Council the selection process would be coming to the Council for a consultant in the near future. Mr. Chave stated that the Council has directed the staff to follow up on the actual process for design review. He explained that meant where is the ADB going to be positioned or fit into the process. He mentioned that one of the items called out was that the design review needs to take place as early in the process as possible and suggested that it be before an application is submitted stating that is when most of the design concepts are hammered out. He again reiterated that the place for the design review was early in the process. He proposed an idea of instead of having a set board, have a pool of design professionals that work with an applicant in a pre - application process. He stated that the Planning Board is nervous about talking about process before design guidelines (i.e. before they have a ,handle on understanding the design guidelines). He stated when the Planning Board meets with Tom Miller and Mayor Haakenson later this month, they will be putting forth the idea of holding off on the ADB process side until the design guideline work is done. Mr. Chave felt it would be very important for the Council to give some guidance at that point as to how the Council' views the process: In explanation, he asked the Council if they want to see the Planning Board work on the process side now, so that the process and guidelines can come together or does the Council see it as more of a two - phase work where the design .guidelines are looked at first and then talk about the ADB process. Mayor Haakenson stated that Steve Sullivan's, a soon to be retiring ADB member, personal opinion was to see the ADB at the beginning of the design review process and he would like to see that done now. Mr. Haakenson stated that Mr. Sullivan is only one member of the ADB but indicated that conflicts with Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 3 the message Mr. Chave is getting from the Planning Board. Mr. Haakenson suggested that the Council . needed to come to some kind of consensus as to what they are going to tell the Planning Board or the ADB in that whole process. He suggested that was the guidance Rob was looking for. Mr. Chave felt that the ADB was ready to have those discussions now clarifying getting the ADB talking about the pre - application process and how it makes sense to them. He felt the critical issue is when is the Planning Board going to talk about it because any code amendments related to that have to go through the Planning Board. He stated that the Planning Board is the key player in making this happen. Mayor'Haakenson related some of the discussion that took place when Council President Miller and Mr. Haakenson first met with Mr. Witenberg, Planning Chair stating that the Planning Board doesn't have the big picture in mind when they look at issues. and they would like to know what the staff -thinks is the big picture and they also would like to know where the Council is coming from on the big picture so they can frame everything. They also have some concerns. and stated that they would like to see visions for individual districts such as Westgate; Downtown, and Hwy 99 and believe that their present workload is predominantly Downtown related and they would like to do work that involves the whole City. Mr. Haakenson stated that he had talked with Mr. Miller, Dev. Serv. Director, regarding this. The Planning Board would also. like to see a process that goes as follows: preview, review, and then have a public hearing indicating that they would like to go through the three steps and be done with something, get it onto the Council (Agenda) and move on to the next step. Mr. Haakenson stated it was an issue they would have to study. Mr. Haakenson said the Planning Board wanted the Council to know that they are the Advisory Committee to the Council on anything regarding parks and anything regarding parking making sure that anything in those two areas come to them before it gets to Council, particularly big issues. Mr. Sullivan also thought that besides seeing design review at the beginning of the process or have ADB at the beginning of the design review process that a written document be handed to an applicant, at the beginning of the process, so they know right where they stand. That would enable the applicant to walk out of that first meeting and they would know exactly what they need to do to move on through the process instead of verbal guidelines. Mayor Haakenson stated that Mr. Sullivan was very positive, reminding the Council that this was coming from an ADB member, about code departure and trade -offs, i.e., we give a little in the way of a code departure and they give back a little bit in their design to the community reiterating that concept when back to the Cedar. River report that was done a year ago. Mr. Sullivan informed Mayor Haakenson that he thought that changing the name of the Architectural Design Board (ADB) would be really beneficial; stating if they were to be put at the beginning of the process, give the Board a different name due to the baggage the ADB name carries. Mr. Chave concurred. Mr. Chave asked the Council not to use the Planning Board as a general public hearing body stating that there are some things that belong to the Planning Board and others that need to go somewhere else. Council President Miller acknowledged' Mr. White. Mr. White thought that following the Cedar River Study, a pre - design process had been implemented asking if that was the case. Mr. Chave responded there is a pre- application process but it doesn't involve the ADB. Mr. White then asked if that was a strong recommendation of the Cedar River Associations summary of recommendations. Mr. Chave replied in the affirmative. He then explained that this presented a conflict because they would act as a pre - application review and then the final review body because the ADB cannot do both things and comply with State law. Mr. Chave informed the Council that it needed to be sorted out. Mr. Chave then stated that the ADB really want to work with the design professionals in arriving at solutions rather than coining in after the fact. He continued that the ADB consists of design professionals and they understand Edmonds City Council Retreat Approved Minutes February 1 l & 12, 2000 - Edmonds City Hall page 4 how much work, time and money have gone into a design; and by the time, they see it, they are concerned about how much effort has gone into it and how much they can change it. He reiterated that the ADB is firmly convinced that they need to come in at the beginning of the process. Mayor Haakenson asked if there were any questions:" Mr. White stated that he thought it should be moved up and stated that he thought it had already been done, feeling it should have been done by this time. Mr. Earling stated he felt he heard four Councilmembers say they would like to have the ADB in 'the process at the beginning. Mr. Earling also then asked what could be done so the Planning Board would feel more empowered over issues in which they were involved. Mr. Chave stated that a change toward that direction has been made by involving the Planning Board Chair in planning the extended agenda. He further stated that the staff are trying to be very responsive to the Planning Board. Mayor Haakenson informed Mr. Earling that some of the requests of a prior meeting between staff and the Planning Board'have been implemented feeling that with the meetings he has with Bruce Witenberg And the Council President will help solve present and future issues. Ms. Petso was then called on and she asked what the advantage was to moving the ADB in the beginning rather than later. She wanted to know if there was any protection being lost, what were the Planning Boards' concerns, and why did they think the design guidelines were needed first and then go to ADB. Mr. Chave said he thought the Planning Board may be nervous about discussing a project before they know the design guidelines. Mayor Haakenson called on Scott Snyder who gave a case history which held that the ADB had to have specific guidelines and could not make decisions based on the- good of the community or a "makes me feel good" criteria. They need specific design requirements. He explained that regardless of where the ADB falls in the process the design requirements still needed to be beefed up. Mr. Chave reported that frequently during a hearing situation on a design project that people are opposed to the project; whereas if they are involved early, they would hopefully be able to influence the design of the project before it got to the hearing stage. Mr. Snyder pointed out that it is necessary to get the public notice out very early in the beginning of a process, especially if there are going to be trade -offs so the public would be able to have input early on in the project. Mr. Chave concurred. Mr. Miller called on Mr. Earling. Mr. Earling stated that when there was discussion about moving the ADB process early, he thought there was an informal action that he would not approve of. He requested that the issue be taken to the Community/Development Services Committee. Council President Miller stated that he too would like to see that moved to the Community /Development Services Committee and also get public input before it comes back to the full Council. - Mr.. Chave suggested if the Council had projects that they. wanted to see the Planning Board work on to come forth now because the Planning Board is, at present, setting their agenda for the year. Edmonds City Council Retreat Approved Minutes February 11 &.12, 2000 - Edmonds City Hall page 5 Mr. Miller called on Mr. Plunkett. Mr. Plunkett stated that he remembered the issue had already been before the Community/Development Services Committee 5 or 6 months ago and that the Committee directed staff to move forward on it. Mr. Plunkett stated he would like to see the responsible parties move forward with it and address the issues involved. Council President Miller felt there was consensus that it should be moved forward so action could be taken by the full Council. Mayor Haakenson suggested that Rob Chave find the minutes of that meeting. Mr. Chave stated that meeting was in October and reiterated it was indicated at that time to get the process going and not wait. The Mayor asked Mr. Chave to get those minutes to the Council. Council President Miller then called on Councilmember White who asked for a quick discussion on the mini- monopole that was erected on Main Street. Mr. Chave complied. Council President Miller decided to discuss a matter that came up before the Finance Committee. Because the Mayor and Councilmember Earling, as Chair of the Finance Committee, had been involved with this matter, he asked the both to speak on the topic. He then called on Mayor Haakenson. GENERAL :FUND — Mayor Haakenson Mayor Haakenson reported that Peggy Hetzler, Adm. Serv. Director, gave a report to the Finance Committee on the General Fund stating there was a surplus at the end of 1999 of $300,000 more than anticipated. He explained that although there are staff who would like to receive part of those funds, he would like to see a legal contingency fund for pending lawsuits and ESA (salmon) funding, explaining that there is no money currently set aside for the ESA issue. He continued that there were some smaller issues that had come to the front, i.e. closure of restroom at SR 104 by ferry dock. He stated that Arvilla Ohlde had been able to work a partnership with the Washington State Ferries for them to pay 75% of the cost and the City would pay 25% which was a great savings considering the City used to pay 100% of the cost. Another issue was the removal of bathrooms on the ball fields. He explained that he had heard Mr. Earling and Orvis state that they would like to take the $300,000, put it in the Council Contingency Fund and they would entertain requests from all departments. He asked Council, as well as staff, to give Ms. Hetzler a want list by Tuesday afternoon, and the Mayor would take it back to the Finance Committee and go over the list. He stated that this was a one -time financial blessing and cannot be used to fund an ongoing project and not to expect it to happen every year. He informed staff and Council that the budget presentation that was forthcoming from Ms. Hetzler was pretty bleak so it would be best for all to gauge requests accordingly. Council President Miller then.called on Dave Earling. Mr. Earling felt the money should probably be put . toward funding the lawsuit issue and the salmon (ESA) issue. Mr. Earling stated he felt the salmon issue was going to have immense financial consequences for the City and probably would not be in favor of . not doing anything with that money until potential costs were clarified. Mr. Plunkett concurred with Mr. Earling. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 6 Mr. Snyder pointed out that the there were some infrastructure costs being consider regarding the ESA issue that had enormous cost potential to the City and are difficult to ascertain. Mr. Haakenson stated that another issue that may come up was the publication of the City Council and Planning Board Agendas. He continued that these items were discontinued because of the budget cuts necessitated by the passage of I -695. COUNCIL COMMUNICATIONS WITH': STAFF /MAYOR ... DRAFT RESOLUTION OF COUNCILP..ERSON'S CREED EDMONDS' CITY COUNCIL CODE OF ETHICS Council President Miller presented the Council with a Councilperson's Creed. After reading it, some members decided they would not be able to support it as is. After some discussion it was decided to put it on a future Council Agenda. A code of ethics was discussed briefly and Scott Snyder, City Attorney gave the Council some brief information on the subject. AUDIENCE PORTION — Councilmember Petso - - Council President Miller asked Ms. Petso to air her concerns on this subject as she had requested it to be placed on the Agenda. Ms. Petso stated that she was concerned at the length of time the citizens had to wait before speaking. She felt that maybe it should be moved up further on the agenda. A discussion ensued between the Council as to placement, having a half hour block in the beginning and letting those speak on a first -come, first -serve basis, and how having the audience portion in the beginning cost some citizens extra legal fees. After some discussion of the pros and cons of having a half -hour block after the Consent Agenda, Scott Snyder, City Attorney suggested having an audience portion after the Consent Agenda during the fourth Council meeting of the month and leaving the other audience. portions of the Agenda as is. . After a discussion that included both Friday and Saturday. (during wrap -up), it was decided to put the idea of an audience portion during the fourth Council Meeting of the month (after the Consent Agenda) on the Consent Agenda. LEGAL ADVICE: COUNCIL Scott Snyder, City Attorney Mr. Snyder started his .presentation by giving the Councilmembers a handout entitled "Edmonds City Council Public Hearing Resource Materials." Mr. Snyder spoke on The Open Public Meetings Act, Appearance of Fairness Doctrine, Limitations on the Imposition and Mitigation Requirements, Findings and Miscellaneous Do's and Don't's. He encouraged the Councilmembers to keep this publication handy during Council meetings. He answered questions as they arose. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 7 I POLICE: DEPARTMENT _ —Chief :Robin:Ih kok Chief Hickok started his presentation with the Police Department Mission Statement and continued on with the visipn. He gave an overview of the Department which included # of employees, requests for the year 2000 budget from the General fund, Criminal Justice Fund and Drug Enforcement Fund. He then continued with information regarding the Department's functions, 2000 goals, records management team, patrol unit, K -9 unit, Youth Services, Dive Rescue Team, SWAT Team, ordinance enforcement, training, property management, purpose of the Department. and organizational chart of the Department. Council President Miller and Mayor Haakenson congratulated Chief Hickok on becoming a nationally accredited Police Department during the month of February indicating how difficult it was to become accredited. All questions were answered as they arose. EXECUTIVE_BRAN:CH —,Mayor Haakensol HUMAN RESOURCES — Welt Hunter Mr. Haakenson started off by stating that the Cabinet Retreat was successful and he came away happy with the results. He indicated that he expects the staff to be flexible and not to give excuses why something can't be done. He also stated that he prefers staff to not use the trite phrase, "That's the way we have always done it." He suggested that his door was open and to come to him with alternatives and suggestions. He then spoke about the Community Services Director position that has not been filled. He stated that he had asked, and received, from the Cabinet input as to what they thought this job description should entail. He then asked the Council for their input. Gary also indicated that the title of this position may change. Gary pointed out that if and when this position was filled, all of the Directors would still report directly to the Mayor. He briefly alluded to the Mayor's Mission State and Role. Included in the packet was the functions of the Executive Office for Council to peruse. After Gary's presentation and question and answer period, there were no more comments. He then called on Brent Hunter to give his presentation which was an overview of the Human Resources Department. Brent started with a Mission Statement and then continued with Human Resources ,functions, recruitment and promotion, comparison- employee to citizen ratios (with other cities), comparative schedule of budgeted positions (FTE — from 1976 to 2000), employee salary and benefit costs, Self - Insurance Health Plan, Travel and Training Fund (008), # of employees which included non - represented FTE, SEI J, PW teamsters, Police FTE, Fire FTE, and Police support FTE, and City labor contracts. He continued with the Human Resources Committee (Comprehensive Human Resources Committee per ordinance), Disability Board, Medical Self - Insurance Advisory Committee, and Civil Service Commission, naming the Committee members and functions. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 8 He explained to the new Councilmembers the past Human Resources Study, the results, and where the City was in terms of implementing the plan. He answered questions as they arose. Council President Miller then called on Joan Ferebee, Court Administrator for her presentation. MUNICIPAL COURT - Joan Ferebee, Court Administrator Ms. Ferebee began with the Edmonds Municipal Court's Mission Statement, she continued with an overview and history of the Court. She then went on to present an organizational chart of the Court. She explained infractions, misdemeanors and cross misdemeanors, types of hearings, services offered by the Court, and the calendar. She explained the'Domestic Violence Victim Advocacy position and stated that the position was shared with the City of Lynnwood. She clarified the position's funding, goals, and services provided. Ms. Ferebee included in the packets the handouts given when someone comes to Court or to pay a fine. ELECTED OFFICIALS PRESENT STAFF PRESENT; Saturda Feb 121999 y� y Gary Haakenson, Mayor Tom Miller, Councilmember Chris Davis, Councilmember Lora P_ etso, Councilmember Dave Earling Councilmember Jim White, Councilmember Dave Orvis, Councilmember Absent: Michael Plunkett, Councilmember Peggy Hetzler, Adm. Serv. Director Ray Miller, Development Serv. Director Cindi Cruz, Community Serv. Exe. Assist. Police Chief Robin Hickok Fire Chief Tom Tomberg Arvilla Ohlde, Parks & Recreation Director Noel Miller, Public Works Director Brent Hunter, Human Resources Director Linda Carl, Executive Assistant to Mayor Jana Spellman, Recorder CALL TO ORDER Council President Miller called the meeting to order at 8:30 a.m. The meeting began with a presentation from Peggy Hetzler, Administrative Services Director. BUDGET:FOR2001= 2003 OVERVIEW /PROM..CTIO.NS Ms. Hetzler began her presentation by explaining that all of the overheads she would be presenting were in the Council Retreat Packets. She indicated that the participants could follow along in the packet or view the Power Point presentation. She stated she wanted to start the presentation by explaining why the budget focuses so intensely on the General Fund. She said the City has approximately 30 funds that are used for different activities emphasizing that the General Fund is the largest of the funds and is the primary operating fund. She stated that she did not want to give the impression that it is the only significant fund in the City clarifying Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 9 1 that it was the fund that had the most immediate need associated with it and that is why she had chosen to focus primarily on the General Fund. She explained that this was somewhat of an introductory session, for the new Councilmembers and continued clarifying that the General Fund receives all of the revenues that are not specifically devoted to some other source. She gave an example of the Motor Vehicle Excise Tax (MVET) which did not apply to any specific program was always receipted. into the General Fund. She stated the revenues that are in the General Fund are used to support all of what are considered traditional tax - supported operations, Public Safety, Public Works, Parks, and the City's administrative overhead. Ms. Hetzler pointed out that I =695 eliminated all forms of the State- shared revenue that the City used to receive into the General Fund. She explained that the State - shared revenues came in the form of the Motor Vehicle Excise Tax (MVET) and sales tax .equalization. She stated that a lot of people in the public are confused over why the sales tax equalization was effected, illuminating that the State funded the sales tax equalization through the MVET that they received. She pointed out that the revenue the City would have' received from the two combined sources for the year 2000 would have been approximately 1.4 million dollars. She further discussed the other item that was imposed by I -695 on the General Fund is that in the event we need to raise property taxes, the EMS levy, or any other form of revenue for the General Fund, the City is required to go to a public vote. She then explained she wanted to give a history of what has been done so far to try to offset that loss of revenue. She stated in the year 2000 budget process, the City eliminated a little over one million dollars in General Fund expenditures explaining that most of that came in the form of supplies, a few positions were eliminated' or postponed. She pointed out that in a packet given out last year, a detailed list of all of the items that made up this one million- dollar reduction and that they did come throughout all the General Fund departments. Ms. Hetzler stated that in addition the Council also authorized a property tax increase last year which included recapturing some levy capacity that had not been utilized which. placed the General Fund into a good position going in to the year, 2000. She said that a new sewer /utility tax was instituted along with a new fee schedule for the Development Services Department. These actions bought the General Fund enough time for the City to put in place a long -range plan to address the next three years. The question was how to address the budget for the next three years. She stated that the Mayor and Directors had a meeting a few weeks ago to determine how to present information and portray efforts regarding the future budget and explained that the decision made was that the City does not want to appear to say to the voters /citizenry that the City wants all of the budget difficulties handled through a public vote to increase new revenues. She stated that a series of scenarios were put together to be presented that would show a combination of some new revenues balanced with expenditure reductions. She explained that the other approach the Mayor and Directors wanted to take was to not go for a public vote until at least the year 2003 which is when the EMS levy comes up to be confirmed; and if the City wanted to consider some other form of revenue enhancement through a public vote, it would be coordinated with the EMS levy. She then went on to explain a pie.chart, labeled Exhibit 3, which was entitled Revenue Components. She clarified that this was a simple view of what the City's revenue structure consisted of in the General Fund. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 10 This pie chart showed the following: Revenue Sources (Components) Percentages /Amount Property Taxes (Regular property tax & EMS Levy) 41% ------ $8,617,270 Sales Taxes 19 % - - - - -- $3,952,000 Other Taxes 14 % - - - - -- $2,978,740 Licenses & Permits 3 %- - - - - -$ 558,750 Intergovernmental 8 % - - - - -- $1,689,290 Charges for Services 10 % - - - - -- $2,092,550 Fines & Forfeitures 3 % - - - - -- $ 699,000 Miscellaneous 2 % - - - - -- $ 328,800 Ms. Hetzler stated that the property tax portion of the revenue resources came from regular property taxes and the EMS levy. She noted that the sales tax portion is approximately half of what the property tax is. She explained that in 1999 the City had a banner year in sales tax collection. She stated that the staff analyzes a report from the State to try and determine the source of the sales tax increase and was surprised to discover that most of the sales tax increase came in the form of car purchases. She specified she did not know if this would be a continuing trend. She mentioned that the rest of the revenues were not very significant and that there is not a lot of room for growth in those revenue categories. The other taxes she identified as mainly gambling taxes and stated there is proposed legislation now to reduce the City's gambling tax in half again. She said that last year the Legislature reduced the amount we could collect on bingo and now there is legislation to reduce the amount we can receive or tax against pull tabs concluding that revenue source may dwindle again this year. The licenses and permits comes basically from the Development and Services operation. The intergovernmental category is a combination of the grants received, Police Chief Hickok's contract with Stevens Hospital, the support that the Fire Department receives for responding to the other district. Charges for services is comprised mainly of the Parks and Recreation fees. Fines and forfeitures come from the Municipal Court and although miscellaneous is not usually that large, in 1999 the City got a number of one -time only reimbursements. Ms. Hetzler was a little concerned that figure was overstated. She clarified that the 41% - Property Taxes, is effectively frozen until a public vote takes place to increase those taxes. She then presented a pie chart, labeled Exhibit 4, showing Expenditure Components of the General Fund as follows: Expenditure Source Percentages /Amount Salaries/Benefits 69 % - - - - -- $14,845,150 Supplies 2 %- - - - - -$ 388,250 Professional Services 11 % - - - - -- $ 2,256,120 Intergovernmental 12 % - - - - -- $ 2,556,690 Capital 1 %- - - - - -$ 223,710 Debt Service 3 % - - - - -- $ 620,360 Interfund Services 2 % - - - - -- $ 499,760 She discussed the various categories pointing out that the Professional Services amount was money spent entirely on consultants but was a category that was given to the City by the State in which they state which type of categories should fall within Professional Services. She clarified that the Professional Services line item pays for insurance, utility costs, and some consultant studies (very minor portion). Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 11 She explained that the intergovernmental portion accounts for the Library contract, Medic 7 contract, anything that is in place now that the City is paying an outside agency for is in the intergovernmental category. She elucidated that the City has no control over the inflationary increases in that category because those costs are passed on to the City from other entities. Councilmember Petso asked if there was any benefit to the City in shifting something from a Professional Services category into a Public Safety Employee Benefit category. She stated that she had found certain items in the budget book that are coded as professional services that would not intuitively be in that category, citing one that is labeled "per employee contract ".. She asked if there was any benefit for the City to make that shift so monies could be freed up. Ms. Hetzler stated that she would check on it after the retreat. Ms. Petso agreed. Mr. White asked Ms., Hetzler to be more specific regarding the intergovernmental category. Ms. Hetzler replied that was mostly the million dollars that was paid to Sno -Isle for the Library contract and that $700,000 was paid to Medic 7 which included what is paid to Snohomish County for the City's share of election costs, voter registration and a portion may be used for the SNOCOM contract. Mr. White asked what the revenue source for the category was. Ms. Hetzler stated that came from the general tax, all the revenues that are in the General Fund go to pay for all of the expenditures. He then asked what the source of the Intergovernmental Revenue was. Ms. Hetzler replied that came from some grant honey, the contract with Stevens Hospital, contracts with Mountlake Terrace, Woodway and Fire District 1. Mr. Miller asked Mayor Haakenson for a clarification on the 50 cent tax on the telephone explaining that tax went directly to SNOCOM. Mayor Haakenson stated that tax money goes directly to the 911 Board in Everett. Police Chief Hickok stated that they give it back to SNOCOM (a certain percentage). Council President Miller asked if that money ever came to the City's General Fund and .Chief Hickok stated it did not. Council President Miller elucidated that SNOCOM receives those funds as well as monies paid out of the General Fund for emergency services. Ms. Hetzler described that the Debt Service category was one that the City had no control over. The Interfund Services .she indicated was primarily associated with the equipment and rental fund which fiends are used to rent the vehicles used by Fire, Police and Public Works which is an internal shift of money between the General Fund and the equipment purchase money. She asked if there were any questions on Exhibit 4, Expenditure Components of the General Fund. Mayor Haakenson asked about the hospital contracting indicated that was listed as a revenue source under intergovernmental and wanted to know where the expense for that was. He wanted to know if that was in Chief Hickok's budget and was told it was. Mayor Haakenson clarified that it wasn't a huge windfall. Chief Hickok indicated that the City barely breaks even. Ms. Hetzler explained that she wanted to begin with the pie charts so the Council would have a base when she presented the General Fund 3 -year outlook of what the City could control on the inflationary side and what controlled increases can be made on the revenue side. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 12 Councilmember Petso asked about the Equipment Rental Fund and wanted to know if Public Works acquires or uses a vehicle for water service, is the cost of that vehicle being paid out of the General Fund rather than through water and rates. Ms. Hetzler explained that the water /sewer purchased their own. Ms. Hetzler informed the Council that the Mayor had instructed the Finance Department to put together a document that showed a systematic approach to doing budget reductions. She placed Exhibit 1 — City of Edmonds General Fund Outlook 2000 -2003 on the screen as follows. City of Edmonds General Fund Outlook 2000 -2003 Exhibit 1 She stated she's trying to show what the magnitude of the City's annual cuts might possibly-be to keep the City in a positive cash situation going into the year 2004. She stated that she was trying to give an indication that if the City cut one million dollars out of the 2000 budget what the outcome would be if a million dollars was cut in 2001, 2002 and 2003. She emphasized to the Council that this was not a recommendation or a proposal but an illustration of what the City might be looking at in the future. She emphasized that the difficulty in putting together this type of schedule is that the obvious end goal is to make sure that the current year revenues match up with the current year expenditures. She pointed out that there is a cash carry forward that is significant and can be used to buy more time before the revenue and expenditures have to be brought closer. Ms. Hetzler said her goal in making the illustration was to make sure that in the year 2003, the City had at least $600,000 to carry over into the year 2004 in the event the City was not successful in some type of voter approval to raise revenues. She pointed out that the $600,000 carne from looking at what the absolute smallest amount of inflationary increase the City might experience on the expenditure side of the budget stating that the budget was $22,000,000 and she took 3% of that amount and assumed that the City would be in pretty good shape if we had $600,000 to carry over into 2004. She clarified that she had concentrated on this 4 -year period because the further out you go, the less realistic things become. She explained that this was a pretty simplistic view of what might happen but was meant to show a trend. Ms. Hetzler said her major worry about the schedule she had put together was that she may be too optimistic in the outlook. She reiterated that she felt that Exhibit 1 (below) was a rosier picture than what the future may hold in the next few years. She explained that she had taken the status quo for the employees in place right now and she had not assumed any enhanced services and did not put in any provision for unfunded mandates that the City is looking at and specifically mentioned ESA and pointed out there is nothing in the budget that the City is not dealing with at this moment in time. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 13 Adopted Projected Projected Projected Year 2000 Year 2001 Year 2002 Year 2003 1) Total Revenues $20,916,400 $21,181,728 $21,605,360 $22,067,460 2) Total Expenditures 21,390,292 22,459,807 22,252,797 22,714,437 3) Expenditure Reduction (1,000,000) (900,000) (500,000) 4) Adjusted Expenditures 21,390,292 21,459,807 21,632,797 22,214,437 S) Difference (473,892) (278,079) (27,437) (146,977) 6) Cash Carry forward 1,528,700 1,054,808 776,729 749,292 7) Remaining Cash 1,054,808 776,729 749,292 602,316 Number of Employees % Decrease 211 197 -7% 184 -7% 171 -7% She stated she's trying to show what the magnitude of the City's annual cuts might possibly-be to keep the City in a positive cash situation going into the year 2004. She stated that she was trying to give an indication that if the City cut one million dollars out of the 2000 budget what the outcome would be if a million dollars was cut in 2001, 2002 and 2003. She emphasized to the Council that this was not a recommendation or a proposal but an illustration of what the City might be looking at in the future. She emphasized that the difficulty in putting together this type of schedule is that the obvious end goal is to make sure that the current year revenues match up with the current year expenditures. She pointed out that there is a cash carry forward that is significant and can be used to buy more time before the revenue and expenditures have to be brought closer. Ms. Hetzler said her goal in making the illustration was to make sure that in the year 2003, the City had at least $600,000 to carry over into the year 2004 in the event the City was not successful in some type of voter approval to raise revenues. She pointed out that the $600,000 carne from looking at what the absolute smallest amount of inflationary increase the City might experience on the expenditure side of the budget stating that the budget was $22,000,000 and she took 3% of that amount and assumed that the City would be in pretty good shape if we had $600,000 to carry over into 2004. She clarified that she had concentrated on this 4 -year period because the further out you go, the less realistic things become. She explained that this was a pretty simplistic view of what might happen but was meant to show a trend. Ms. Hetzler said her major worry about the schedule she had put together was that she may be too optimistic in the outlook. She reiterated that she felt that Exhibit 1 (below) was a rosier picture than what the future may hold in the next few years. She explained that she had taken the status quo for the employees in place right now and she had not assumed any enhanced services and did not put in any provision for unfunded mandates that the City is looking at and specifically mentioned ESA and pointed out there is nothing in the budget that the City is not dealing with at this moment in time. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 13 She referred to Exhibit 1 below stating in the first column is what has actually been done in the year 2000 budget. She stated that there was a budget deficit of $400,000 but there was a significant cash carry forward from 1999 so the remaining cash for the. end of 2000 is over a million dollars and will help offset . some of the cuts the City has to look at. She clarified at this time (year 2000) the City has 211 General Fund employees. She said that for 2001 (assuming that all of the property tax levies are frozen), if you take those out of the equation and look to see what the City's annual growth is in our remaining revenue categories, in total it is about 2 %. She explained that each year she had adjusted our revenues by a 2% growth factor. She pointed out that in the expenditure area (using figures from the previous year) -she made a 5% increase. She clarified that she did this because in the past there has never been an inflationary increase of less than 5% in the expenditure budget. She continued that for the year 2001 another one million dollar round of cuts were made out of the general fund and gave adjusted expenditure figures, what the budget deficit for the year be, and what would the impact be on the ending cash. Ms. Hetzler made plain that to accomplish an expenditure reduction of the magnitude suggested, you would be looking at cutting personnel. She said that cut would equate to about a 7 %. of FTE's in the general fund for the year 2001, 2002 and 2003 (from 211 employees in 2000 down to 171 employees in 2003). Mr. White asked Ms. Hetzler how she was quantifying the number of employees. She replied that she had taken the total salary and benefit budgets and divided it by 211 employees. She felt the City may actually be looking at a greater number of employees leaving but had presented a brief outlook. She explained that Finance was trying to hit a realistic level in the predictions but it is difficult. Council President Miller referenced the 7% decrease of number of employees figured to be about 13 -14 employees a year and asked if the City lost that amount through attrition in a year or would there potentially have to be some lay offs. . Brent Hunter, Human Resource Director,. indicated that is approximately the number reached through attrition but pointed out that certain. positions would have to be replaced. Mayor Haakenson spoke up and stated that an engineer was lost early in the year and there was a decision made not to fill that position for a while, and indicated that in some instances.that is an option and in some that is not. Mr. Haakenson clarified that his work load got spread out.among the remaining employees. He further stated that just recently Jason Tourtellot, the Code Compliance Officer, announced that he is leaving. Mayor Haakenson stated that Mr. Tourtellot has accepted a position in Everett and that Everett has not been effected by I -695. He is getting a better job and it is something he really wanted to do, but indicated that Jason stated he has lived and grown up in Edmonds and really wanted to stay in Edmonds but knows that he is the first guy that is going to get cut out of that particular part of Development Services if the City has to institute cuts so he has chosen to find a position where there is some security. .Mayor Haakenson stated that Mr. Tourtellot is the first individual, that he is aware of, that was lost because of I -695. Mr. Tourtellot explained to the Mayor that part of the inspection and code enforcement duties from Engineering were going to become part of his duties and that was another burden he did not want to face. He felt he had enough work to do. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 14 Mr. Haakenson made the point that although it is easy to look up at the screen (Exhibit 1) and say that 14 people can be cut -or the City may lose 14 people over the course of a year, but inevitably the work loads are going to be spread over fewer and fewer people, people will become frustrated, some will leave, and then the City will end up losing good people making response times in Planning and Engineering go way up. He clarified that this has a trickle down effect as positions are cut; reiterating that the City is not fat with employees. He continued stating that if a million dollar cut is to be made in 2001 it has to be a combination of expenses and personnel to reach that figure. He further explained that it was not a matter of just not replacing a position because the trickle down affect is that service starts to suffer and indicated that a decision has to be made as to,what level of service is to be maintained if personnel cuts are to be made. Council President .Miller called on Councilmember Earling who asked Ms. Hetzler if her numbers did not assume any tax increase put before the voters before 2003. He asked her to explain that thinking. Mayor Haakenson replied for Ms. Hetzler and stated that he wanted to make sure that before the City takes a tax increase vote to the citizens, that the City has made every possible cut that is feasible expense wise and just not immediately go out in 2001 to the voters and start whining about not having enough dollars. He felt-the citizens have to believe that the City has done everything the City can by reducing the budget enough to get to a position where cuts are going to be made that the citizens will miss, continuing that in some instances, the citizens won't miss these items until they are actually cut. He felt it was premature to go out to the voters at this time but stated that if the Council thinks differently, he would follow their direction. Mr. Earling stated that he would like to have a discussion regarding this issue. He continued he felt the citizens of Edmonds view the circumstances somewhat differently than other communities in South Snohomish County and that there were a number of votes that could be looked at to verify that, percent of spread, e.g., Sound Transit vote, the reaction to the library situation, and a number of other votes that he thought indicated the voters saying they viewed things differently. He felt if that approach is.taken, it may give the appearance of punishing (stated he did not like that term) the voters and it may be they already sense the reality that the various entities are dealing with because of circumstances that are seen in a variety of service areas and perhaps in the community. He explained that he wasn't implying that it had to be next year but he felt it needed to be discussed. He told the Mayor that he did not reject the idea but felt that waiting. until 2003 might suggest to the voters that the City did not need the money because the City went for four years without asking for the money. Mr. Earling said that, in fact, the City may be punishing itself before the time is right. Council President Miller called on Councilmember White. Mr. White stated that he was having similar thoughts to Mr. Earling. He felt another question that needed to be explored is if EMS comes up in 2003, what amount of money will that increase require; and in addition, what amount of property tax increase was going to be required and is one massive increase more likely to prevail than two or three smaller ones when one considers there may also be a library and school vote, not to mention other items that may come before the voters? He felt this question needed to be brought into the formula mix. Mr. Davis indicated he agreed in wanting to see how lean and mean the City could get before asking for money but questioned at what cost in three years is the City going to .bear with declining personnel and then having to ask the voters rather than every two years asking for a 1 to 2% increase to then ask for a 6% increase would be vastly different and the effect might not.be helpful enough. He indicated there might be a lot of harm done in three years if personnel were reduced. He stated that it appeared our largest staffing was in police and fire and wanted to know . what harm would be done to those departments in three years that would have to be made up for if the City, asks for a large tax increase. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 15 Council President Miller called on Mr. Orvis. Mr. Orvis stated that he was a little worried about the Library vote at the next hearing because we are going to be showing S% increases in expenditures and what efforts are being made to demonstrate to the voters in terms of reducing expenditures. He indicated that he was siding with Mayor Haakenson. Mayor Haakenson replied that he . did not .want to be misinterpreted indicating that he would love to go out and have a vote for property tax money, further stating that he would rather do that than lay off people. He pointed out that as Mayor, that is the direction he has taken but if the Council wanted to choose differently, that was fine. Mr. Haakenson asked Ms. Hetzler if the City went to a vote in 2001 at a 1% increase, what would the cost of an election be. Ms. Hetzler stated that the last estimate received from the Snohomish Auditor's office was about $2 per capita which would be about $70,000. Mr. Haakenson then asked if it would cost a significant amount of money to run an election and Ms. Hetzler replied affirmatively. Mr. Davis stated his suggestion of a 1 to 2% increase was not to recoup any-losses but was to be coupled with reductions clarifying that he was not indicating that the City should try to recoup everything and keep all of the employees; it was a matter of cuts which are going to happen regardless of what is done in an election but more of a fact how the 7% reduction process is slowed down. He further stated that he understood the cost of an election and that half of the tax money received from an election could be eaten up by just having the election but reiterated that this would be a slowing down of, not stopping, process. Mr. Earling agreed with Mr. Davis and stated that in his opening comment he was trying to get people pulled away from the scenario that has been created by not having a vote in 2003. He stated that he believed if the citizens of Edmonds believed that the City is constructively trying to continue to reduce the expenditures that they will adjudicate that sooner than 2003. He felt the citizens would be able to adjudicate in the year 2000. Ms. Hetzler stated if the revenues only increase by the 2% natural inflationary increase and the expenditures, which are largely uncontrollable because of union contracts and contracts with outside agencies, the City would be looking at 2.4 million dollars in reductions in a 3 year period. She stated that would be a 21 % reduction in the work force. Ms. Hetzler then moved on to Exhibit 2 — City of Edmonds General Fund Outlook 2000 -2003 indicating this was prepared incorporating the only item that had been seriously considered this year and that was finding an alternative funding source for the Library which would eliminate the impact of the Library Contract on the City. She explained that the City would still be looking at making expenditure reductions but not nearly the magnitude of the previous illustration — Exhibit 1 (Library Contract included in General Fund). She stated that these cuts could be phased in at a much smaller level and total 1.2 million versus the 2.4 in the previous schedule and the City would still end up with a $600,000 cash carry forward into the year 2004. She reiterated that was the only difference in the two schedules, i.e., eliminating the impact of the Library Contract. At the bottom of Exhibit 2 Ms. Hetzler listed what conceivably would be the impact on employees. She stated it still might be an undesirable outcome but it is less in magnitude than the previous schedule shows (percentage of decrease in employees). Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 16 City of Edmonds General Fund Outlook 2000 -2003 Exhibit 2 She then asked for questions and Mr. Earling had a question clarified. Mayor Haakenson then spoke regarding the upcoming Sundquist Annexation explaining that the City will pay 50 cents per thousand for those people who are in the annexed area if they do annex into the City for their Library service and that will be paid out of the General Fund pointing out that the City will have that additional amount to pay each time an annexation takes place. A discussion of the Library contract ensued and other methods for funding the Library besides the City's General Fund. Mr. Earling asked if other approaches, besides eliminating the Library contract, had been looked at. Ms. Hetzler summarized- the following as alternate possibilities: Sno -Isle options, fire consolidation, Medic 7 arrangement, restructure collective bargaining agreements which will be expiring at the end of 2001 and explained that the Mayor had made an internal policy that any vacancies that come up during the year will not be automatically refilled. All vacancies will be re- evaluated to see if responsibilities can be shifted or leave the positions empty. Ms. Hetzler stated that those were the only things that had been reviewed but she was open for suggestions as to other options. Mayor Haakenson agreed with Ms. Hetzler. He referred to fire consolidation, feeling that it would not save the City money. He asked if Chief Tomberg agreed and Chief Tomberg said that would be his assumption at this point until there was further exploration of the fire consolidation issue. Mayor Haakenson then asked the Council if there were other areas that the Council would like to look at which could be maneuvered out of a contract situation into a property tax situation and then asked Councilmember Earling if that was what he was speaking to. Mr. Earling replied that he was not necessarily assuming any particular issue but was simply saying has Administration looked at.(riot trying to pick on one particular department) cutting all of the Parks and Recreation Department, have you looked at only having two firemen on in each station, have you looked at making across the board 7% reductions across the City and letting each department head look at that, having them make their recommendations of how to do that. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 17 Adopted Projected Projected Projected Year 2000 Year 2001 Year 2002 Year 2003 1) Total Revenues $20,916,400 $21,181,728 $21,605,360 $22,067,460 2) Total Expenditures 21,390,292 22,459,807 22,179,997 22,868,997 3) Less impact of Library Contract (1,036,000) 4) Additional Reductions (300,000) (400,000) (500,000) 4) Total Adjusted Expenditures 21,390,292 21,123,807 21,779,997 22,368,997 5) Difference (473,892) 57,921 (174,637) (301,537) 6) Cash Carry forward 1,528,700 1,054,808 1,112,729 938,092 7) Remaining Cash 1,054,808 1,112,729 938,092 636,556 Number of Employees % Decrease 211 207 -2% 201 -3% 194 -3% She then asked for questions and Mr. Earling had a question clarified. Mayor Haakenson then spoke regarding the upcoming Sundquist Annexation explaining that the City will pay 50 cents per thousand for those people who are in the annexed area if they do annex into the City for their Library service and that will be paid out of the General Fund pointing out that the City will have that additional amount to pay each time an annexation takes place. A discussion of the Library contract ensued and other methods for funding the Library besides the City's General Fund. Mr. Earling asked if other approaches, besides eliminating the Library contract, had been looked at. Ms. Hetzler summarized- the following as alternate possibilities: Sno -Isle options, fire consolidation, Medic 7 arrangement, restructure collective bargaining agreements which will be expiring at the end of 2001 and explained that the Mayor had made an internal policy that any vacancies that come up during the year will not be automatically refilled. All vacancies will be re- evaluated to see if responsibilities can be shifted or leave the positions empty. Ms. Hetzler stated that those were the only things that had been reviewed but she was open for suggestions as to other options. Mayor Haakenson agreed with Ms. Hetzler. He referred to fire consolidation, feeling that it would not save the City money. He asked if Chief Tomberg agreed and Chief Tomberg said that would be his assumption at this point until there was further exploration of the fire consolidation issue. Mayor Haakenson then asked the Council if there were other areas that the Council would like to look at which could be maneuvered out of a contract situation into a property tax situation and then asked Councilmember Earling if that was what he was speaking to. Mr. Earling replied that he was not necessarily assuming any particular issue but was simply saying has Administration looked at.(riot trying to pick on one particular department) cutting all of the Parks and Recreation Department, have you looked at only having two firemen on in each station, have you looked at making across the board 7% reductions across the City and letting each department head look at that, having them make their recommendations of how to do that. Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 17 He stated that he felt the Library should not be left out of the equation but if the City doesn't have the painful dialogue regarding other budget cuts, it may just be putting off the inevitable.. He again stated that he felt those discussions should take place so that the City starts thinking that way. Mr. Haakenson stated that he felt that had been done pointing out that if the Council looked at Peggy's first illustration (Exhibit 1) that included the Library as an ongoing contract and not a property tax issue, it showed that personnel cuts Would be made. Mayor Haakenson stated that without a property tax increase, approximately 14 people a year would be cut from the staff, reiterating that a determination had not as yet been made as to what positions would be cut. Mr. Earling reiterated, that although it was early in the year, a variety of strategies needed to be contemplated in case one of the strategies is not successful. Council President Miller called on Mr. Orvis who stated he felt Mr. Earling's idea was a good one and that every department should come forth to the Council with a plan for cuts and the sooner that is done the better. Mr. Earling stated that he felt if you had an intellectual discussion with the voters of Edmonds that the majority would take a serious view of the issues that are being put forth. He said he felt that type of honest discussion should occur early so the citizens begin to get the sense that over time, the level of service that they all seem to indicate that they value may not be there in the future. Council President Miller called on Mr. White. Councilmember White said that he felt he was not in a position to dictate or even suggest what each department should cut out of their budget. He continued that the only two options he had seen so far was the Library Contract and personnel and because the Council would be expected to approve these types of cuts, he would like to see what other possibilities are available, what impacts they would have, before any Council decisions are made. Council President Miller called on Mr. Davis who stated that he would like to see a presentation by the department heads of possible cuts but would also like to see coupled with those cuts what the community would lose when those cuts are made. He felt the loss to the community as a result of the cuts was as important as the cuts. He reiterated that he would like to see a presentation not only of cuts but the results to the community when those cuts happen. He agreed with Mr. Earling that if the public is fully educated as to the results of the cuts on the community, they might be more willing to approve a property tax increase. Council President Miller called on Mr. Orvis who stated he would like to see during the department presentations what impact each of the departments had on the General Fund pointing out that Parks and Recreation was a great example because if the City cut Parks and Recreation, the City would be losing the fees that it brings in. Mr. Earling stated that innovating thinking was welcome. Ms. Hetzler then gave an overview of the budget calendar for the year 2001. She stated that the schedule had been moved up a month so that the budget could be adopted on a more timely basis. She reminded the Council that there had been discussion about doing a biannual budget but because of the uncertainties the City faced at this time, it was probably more beneficial to stay with an annual budget. Edmonds City Council Retreat Approved Minutes February I 1 & 12, 2000 - Edmonds City Hall page 18 Ms. Hetzler stated that she would. like the Council to give the Finance Department a set of priorities regarding possible budget cuts because the earlier those priorities are made available, then a timeframe could be built in for the various departments to present their budget to the Council. Mayor Haakenson asked the Council to set priorities before the budget process is started. He asked if the Council wanted the cuts made and then the Council would put various items back in. Mr. Orvis asked if the Council wanted to make a steeper schedule for all departments, i.e., a more reductive schedule and then the Council can prioritize expenditures back in. He suggested that instead of using one million in the year 2000, cut .15 million having every department propose the same percentage reduction and then have the Council add things back in. Mr. Haakenson said he doesn't think a 7% cut across the board should be taken across the board feeling that some departments are going to experience greater reductions than others. He again expressed that cutting 7% across the board was not productive. Councilmember Orvis then suggested instead of taking a 7% increase, make a 14% across the board reduction so they can get all the ideas on the table. Mayor Haakenson stated that it doesn't matter what percentage is taken, he did not agree with the philosophy. He followed by saying that a philosophy should be in place before taking the time to cut out of departments and then finding out that is not what the Council wants. He felt the Council should make it clear how to proceed with budget reductions. Mr. Haakenson suggested that if the Council had a philosophical belief regarding budget reductions in various departments, the administration needs to hear that. However, he continued that if the Council felt that every department was just as important to the public good as another and Council felt that is what your constituents believe, then the administration can accommodate you that way. Mr. Earling expressed the idea of giving the staff the opportunity to do some strategic thinking to put together three or four budget reduction options for the Council to look at. Mr. Earling stated that maybe the departments need to show what various percentage cuts would be so that the Council and the citizens understand the depth of cuts that have to be made. He felt that from that type of discussion, the priorities that the administration is asking about start to come forward. He again reiterated that the staff needs to sit down and do some strategic thinking. Mayor Haakenson stated that he just wanted to know if the Council had certain areas they wanted staff to look into. Ms. Petso felt that the voters wanted to see everything put on the table first and then make choices. She again stated that when the voters passed I -695 they were asking to have everything put on the table regarding budget reductions and that nothing was sacred. She felt the next step was to educate the people and find out what was sacred to them. Mr. Orvis agreed with Ms. Petso and he stated he would like to see a goal set where every department cuts a certain amount out of their budget feeling if that goal was set there would be more things on the table and the Council would have more options. The Council President called on Police Chief Hickok and then Noel Miller. Chief Hickok stated that he would be able to figure out 7% on the calculator with no trouble but the concern was trying to figure out what personnel would be laid off. He indicated with that percentage number the Police Department Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 19 would lose D.A.R.E., Youth Services, Crime Prevention, probably some clerks, and eventually with the cuts shown three years down the road, with no tax increase, patrol units would be lost making it unsafe to be on the streets. He pointed out that the Police Department does not have fat indicating that the things he referred to would disappear: He continued stating that he made those personnel cuts last year; but when you have to address those :personnel lay offs to the people involved, morale problems arise. Police Chief Hickok indicated that if the library contract doesn't go through, the Council may be looking at a public safety vote to save police and fire one or two years down the road. He indicated that it was hard, looking at the percentage of personnel cuts made indicated by Exhibit 1 of Ms. Hetzler's presentation, not to encourage staff to accept other jobs if they are offered because the City can no longer guarantee any type of security feeling that is what some staff are looking for. Noel Miller expressed the opinion that the public really needs to be educated as to what will be lost if these budget reductions occur. Mr. Earling again expressed the opinion that is why he felt the education process needed to be started to help the citizens understand what exactly will happen when the cuts are made due to Initiate 695. Mr. Earling felt by making budget reduction suggestions, it would be credible with the citizens, indicating to them that the government is trying to do something. Council President Miller felt the one issue that needed to be presented to the Mayor and staff is to get the information requested by the Council sooner rather than later. He stated he had the same concern as Police Chief Hickok that there will be a morale problem that all directors will have to deal with and the sooner the Council can give direction to the administration the better because if employees perceive their jobs are threatened, they will start looking and the City will be worse off if these employees move to jobs outside the City indicating that if these lay offs did not come about the City would end up being the loser. He stated that he would like to see two or three presentations regarding budget reductions that the Council may twist and tweak and then present it back to staff and then after getting staff input take it to some public hearings and get feedback from the public. The Council President asked for other comments and there were none. Council President Miller then called on Ray Miller, Development Services Director. DEVELOPMENT SERVICE&DEPARTMENT = .RayiMiller; :Director Mr. Miller presented an overhead which showed the organization of the Development Services Department explaining the various roles of employees within the Department. He touched on the future changes within the Department and gave the philosophy of the Department. A question and answer followed his presentation. Council President Miller then called on Arvilla Ohlde. PARKS .& RECREATION = Arvilla Ohlde, Director . Ms. Ohlde started her presentation by going over the mission statement, function, 1999 accomplishments and 2000 goals which included public promotion and community relations, department supported or Edmonds City Council Retreat Approved Minutes February 1 I & 12, 2000 - Edmonds City Hall page 20 hosted special events, community programs, administration/park maintenance and capital construction, park maintenance, local, state, and national donations /scholarship /grant awards received and distributed, cultural arts, recreation, economic development, and recreation. She gave an overview of what her Department does and how beneficial it is to the citizens of Edmonds. She clarified the projects being worked on by the Department. She briefly touched on the budget and national issues. Questions were answered as they arose. PUBLIC WORKS —Noel Miller; Director Mr. Miller gave an overview of his Department. He explained that his Department manages the operation and maintenance of the City's infrastructure. He informed the Council that the Department employs 69 full -time employees. He went over the mission statement, 1999 accomplishments and 2000 goals and the organizational chart for his Department. He explained each of the divisions: Street/Storm Division, Water Division, Sewer Division, and Fleet Maintenance Division. Questions were answered as they arose. WASTEWATER TREATMENT PLANT —Steve Koho ;Manager Council President Miller called on Steve Koho. Mr. Koho gave an executive summary of the Treatment Plant Division which included what the division consisted of, what his division does, recent accomplishments, goals for 2000, professional participation, and history. Included in his Council packet was an organizational chart, letters of recognition, and a 1996 benchmarking study. He pointed out to the Council that the Treatment Plant runs as well, or better than most private organizations. He answered questions as they arose. WRAP UP — Council President Miller Council President Miller asked for general comments from staff and the Councilmembers. Mr. Earling thanked the staff in advance for all the hard work that would be forthcoming regarding the budget. Council President Miller thanked everyone involved for all the hard work that had gone into preparing for the retreat. With no further business, the meeting was adjourned at 12 noon. GARY AAK J 0 ,!.MAYOR SANDRA S. CHASE, CITY CLERK Edmonds City Council Retreat Approved Minutes February 11 & 12, 2000 - Edmonds City Hall page 21