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2024-05-21 Council MinutesEDMONDS CITY COUNCIL MEETING APPROVED MINUTES May 21, 2024 ELECTED OFFICIALS PRESENT Mike Rosen, Mayor Will Chen, Council President Pro Tern Chris Eck, Councilmember Neil Tibbott, Councilmember Michelle Dotsch, Councilmember Susan Paine, Councilmember Jenna Nand, Councilmember ELECTED OFFICIALS ABSENT Vivian Olson, Council President 1. CALL TO ORDER/FLAG SALUTE STAFF PRESENT Kim Dunscombe, Deputy Admin. Serv. Dir. Susan McLaughlin, Planning & Dev. Dir. Rob English, City Engineer Jeanie McConnell, Engineering Program Mgr. Rose Haas, Planner Royce Napolitino, PW Executive Assistant Jeff Taraday, City Attorney Scott Passey, City Clerk Jerrie Bevington, Camera Operator The Edmonds City Council meeting was called to order at 7 pm by Mayor Rosen in the Council Chambers, 250 5t' Avenue North, Edmonds, and virtually. The meeting was opened with the flag salute. 2. LAND ACKNOWLEDGEMENT Councilmember Tibbott read the City Council Land Acknowledge Statement: "We acknowledge the original inhabitants of this place, the Sdohobsh (Snohomish) people and their successors the Tulalip Tribes, who since time immemorial have hunted, fished, gathered, and taken care of these lands. We respect their sovereignty, their right to self-determination, and we honor their sacred spiritual connection with the land and water." 3. ROLL CALL City Clerk Scott Passey called the roll. All elected officials were present with the exception of Council President Olson. 4. PRESENTATIONS PUBLIC WORKS WEEK PROCLAMATION Mayor Rosen read a proclamation proclaiming the week of May 19-25, 2024 as Public Works Week in Edmonds. He presented the proclamation to Public Works Executive Assistant Royce Napolitino and City Engineer Rob English. Mr. Napolitino thanked the mayor and council for the opportunity to serve the community, relaying Public Works takes its work very seriously and aims to serve the public to the highest level. 5. APPROVAL OF AGENDA Edmonds City Council Approved Minutes May 21, 2024 Page 1 COUNCIL PRESIDENT PRO TEM CHEN MOVED, SECONDED BY COUNCILMEMBER PAINE, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY. 6. AUDIENCE COMMENTS Richard Marin, Edmonds, accompanied by Joan Longstaff, Edmonds, members of the Edmonds Cemetery Board, invited the council, mayor and public to join them on Monday, May 27 at 11 am for the City's Memorial Day program at the cemetery. He was wearing his uniform, not to show off, but to make a point that Memorial Day was not instituted as a holiday in the United States so that people could get a discount on a refrigerator or have fun, but to take time to think about the sacrifices of those who made it possible to enjoy freedoms in the United States. The event will include context provided by Mayor Rosen followed by this year's principal speaker, Greg Copeland, a KING 5 news anchor who will describe an epic battle that took place off the Philippines in 1944 that ultimately led to the liberation of the Philippines. Mr. Copeland's grandfather, Bob Copeland, was a commanding officer of a destroyer escort, who took his crew and ship into this battle against cruisers and a battleship that was ultimately sunk. He will share what formed his thinking as young boy to get him to the point where he could take his crew and ship into battle, a David and Goliath situation, and the person he was afterward. He assured this would be a program where participants will come away with good in their heart about those who served and their place in the community. Ms. Longstaff said she was born October 4, 1941, and it was a privilege to serve on the cemetery board. She thanked the council and mayor for their service. Gordon Black, Edmonds, board member of the North Sound Bicycle Advocates (previously Edmonds Bicycle Advocacy Group/EBAG), commended Edmonds Public Works for their great work completing the bicycle lanes on 100t' Avenue. As a cyclist who often rides on 100"/9t1i, the bike lanes make a difference to his safety. He hoped the safer conditions provided by the bike lanes will encourage more people to bike on daily errands. He recognized it will take time for some drivers to get used to the new road layout, but if it reduces the volume of cars using 100t1i, it will be worth the effort for the health of the planet and individuals choosing to bike rather than drive. He commended the City for their efforts to create a true network of connected bike routes to make it easier for more people to consider cycling for transportation. A key component of that future network is joining the two ends of the Interurban Trail. North Sound Bicycle Advocates is advocating for a safer, more inviting crossing. He expressed the group's appreciation for individual councilmember's support for the bridge concept; a majority of councilmembers have seen the trail up close on one of the group's site visits. Last night members of the Shoreline City Council agreed to contribute funds to a study to examine how a bridge might become a reality. He invited Edmonds City Council to match Shoreline's contribution. King County has also indicated their willingness to make a contribution to a study. This collaboration recognizes the trail is truly a regional asset that deserves a joint effort from the communities it serves. As the City prepares the Transportation Improvement Plan for 2025 and begins budgeting, he hoped Edmonds would be a good neighbor and help fund this route study on how best to connect the Interurban Trail. Richard , referred to the council's comments about revenue and suggested a study on a public -private funded parking garage to include revenue generation, a joint program with City businesses and City government, a combined effort of the chamber and downtown merchants using public -private funds. The Public Works building is very ecological, friendly and visually attractive; a garage could be also be visually attractive. Jim Ogonowski, Edmonds, referred to the agenda item related to issuing bonds, commenting it seemed premature, particularly since the Blue Ribbon Panel has not released a strategic plan regarding how the City's finances will be managed in the future which he assumed would include bonding. Recognizing the bonds are related to the utility funds, he questioned the proposal for approximately $11.5 million for utilities Edmonds City Council Approved Minutes May 21, 2024 Page 2 when the City already has $35 million in utility spendable reserves. In addition, last year the council approved utility rate increases for at least the next three years which is an accumulated $4 million for the utility funds. He summarized utility fund revenue is growing at the end of the year versus using it for constructive purposes. He asked whether the administration intended to borrow money from the utility funds to support other City services or needs. He suggested pausing issuance of bonds until a holistic plan is in place as it is not time sensitive. He also recommended waiting until the Blue Ribbon Panel has issued their report which will allow the council to make a cohesive assessment of the need. Joan Longstaff, Edmonds, commended the council and mayor on the fantastic job they are doing. She hears from the business community and the private sector who want to be heard that the council and mayor are listening. Bill Krepick, Woodway, referred to his previous comments to council regarding the fire service alternatives, noting a few things have come up since then. One of the council committees announced their selection of annexation as a preferred alternative and he wondered why when it seemed the City had let the RFA off the hook justifying their $18 million costs for 2026. Edmonds needs to gain leverage, not capitulate to what he believed was biased and very conflicted input from the consultants as it seemed to him Fitch always defaults to annexation as the best solution. The council needs to put taxpayers first, get true costs and financial details and a commitment from the RFA to manage future costs. Second, The RFA's 2024 budget shows fire and EMS revenues increased from $52.8 million to $55.5 million between 2019 and 2022, a 5.3% increase over 3 years which seemed reasonable considering the small population growth and small cost of living during that time. Between 2022 and 2023, the RFA's costs increased by 19.1% and increased another 14.4% between 2023 and 2024, a 33.4% increase in a few years. The RFA's response was it was due to annexation of Brier and Mountlake Terrace. The writing is on the wall; the same will happen to Edmonds taxpayers after annexation and he did not understand how the council could say annexation was the preferred alternative with that type of outcome. Mr. Krepick relayed his third point, regional scaling is a total myth as illustrated by the RFA's recent cost increases. He opined the RFA was absolutely mismanaged and their practices are unsustainable. The council should demand the RFA provide a five year history of cost per capita and cost per service call and explain their broken business model. Fourth, it was his understanding a clause in the current RFA contract states if service is terminated, the City has the right to buy back fire trucks at blue book value, an important part of the equation in determining whether an Edmonds Fire Department might be a preferred solution rather than annexation. 7. RECEIVED FOR FILING 1. WRITTEN PUBLIC COMMENTS 2. MARCH 2O24 QUARTERLY FINANCIAL REPORT 3. APRIL 2024 MONTHLY FINANCIAL REPORT 4. 2023 TRANSPORTATION BENEFIT DISTRICT REPORT 8. APPROVAL OF CONSENT AGENDA ITEMS COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO APPROVE THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: 1. APPROVAL OF SPECIAL MEETING MINUTES MAY 7, 2024 2. APPROVAL OF COUNCIL MINUTES MAY 7, 2024 3. APPROVAL OF CLAIM CHECKS AND WIRE PAYMENTS 4. APPROVAL OF PAYROLL AND BENEFIT CHECKS, DIRECT DEPOSIT AND WIRE PAYMENTS Edmonds City Council Approved Minutes May 21, 2024 Page 3 5. AMENDING ECC 5.24.010 -FIREARMS AND DANGEROUS WEAPONS 6. AMENDMENT TO THE FIBER CONSORTIUM INTERLOCAL AGREEMENT 7. JOB ORDER CONTRACTING - PROPOSAL AND AGREEMENT EXTENSION 8. FLEET MECHANIC JOB DESCRIPTION REVISION 9. PRESENTATION OF AMENDMENT TO PSA WITH HERRERA FOR THE STORM AND SURFACE WATER COMPREHENSIVE PLAN 10. APPROVAL OF PSA WITH CONSULTANT, ROCK PROJECT MANAGEMENT SERVICES LLC (ROCK), FOR CAPITAL PROJECTS CONSTRUCTION MANAGEMENT, ENGINEERING & INSPECTION SERVICES 11. AWARD CONSTRUCTION CONTRACT FOR THE 2024 UTILITY REPLACEMENT PROJECT 12. AWARD CONSTRUCTION CONTRACT TO GRANITE CONSTRUCTION COMPANY FOR 2024 OVERLAY PROGRAM 9. PUBLIC HEARING 1. ACCESSORY DWELLING UNIT CODE AMENDMENT TO ALLOW FOR DETACHED ACCESSORY DWELLING UNITS — "EXPANDING HOUSING OPTIONS BY EASING BARRIERS TO THE CONSTRUCTION AND USE OF ACCESSORY DWELLING UNITS IN ACCORDANCE WITH HB 1337." Planning & Development Director Susan McLaughlin introduced Planner Rose Haas, Planning Board Chair Jeremy Mitchell, and Planning Board Member Nick Maxwell. Ms. Haas reviewed: Accessory Dwelling Unit Code Update Timeline o Council Introduction — November 14, 2023 o Planning Board Introduction — December 13, 2023 o Planning Board Discussion 1 — January 10, 2024 o Planning Board Discussion 2 — January 24, 2024 o Council Discussion 1 — February 27, 2024 o Planning Board Public Hearing — February 28, 2024 o Council Study Session — March 5, 2024 o Planning Board Discussion 3 — April 10, 2024 o Council Public Hearing — May 21, 2024 o Anticipated Council Adoption — June 5, 2024 What are ADUs? o An accessory dwelling unit is a small residence that shares a single-family lot with a primary dwelling. o An ADU is self-contained, with its own kitchen or kitchenette, bathroom and living/sleeping area. o An attached ADU is a dwelling unit located within or housing unit. o A detached ADU and unconnected attached to another (DADU) is separate to the other housing unit. • What are the benefits of ADUs? 4(-- BASEMENT CONVERSIDN DETACHED ADU I. I CONVERTED GARAGE 1� ATTACHED / rrv.,at.nm,r..an I.., ADU Edmonds City Council Approved Minutes May 21, 2024 Page 4 HOMEFORA YOUNG FAMILY r AGE -IN -PLACE RETIREMENT OPTION t AT-HOME WORKSPACE ._fit_ —ii RE NTAL FOR EXTRA INCOME h 1 STUDIO SPACE FOR A HOME BUSINESS yi*,�\ APARTMENT FOR ADULT CHILDREN • What guidance did we use? HOUSE BILL REPORT EBB 1337 A. uauf L,1.mrc,•Illl. -I.-III .-E,�—Ill.u,..u.ni......—.n,- I 1ryl.u. D: T I.nlv.N.riaM lrunnr -Irn, r.Mm. ganm.n. PeM. .Wgl' Winger. ! -..-'- nrl. P.n.J • w.. �. ¢511. POST -SURGERY RECOVERYSPACE o Support aging in place. o Provide additional financial support for homeowners. o Add value: Properties with an ADU are priced 35% higher. o Offer an efficient, low-cost way to build housing. o Meet diverse needs - suited well for young couples, small families, friends, young people, and seniors. o Allow multi -generational living. The ABCs of ADUs �wrmA¢>.wry a..rro unx...g ng.a.g _. ..o.rre brr.Irv.gg.r,. m. wwmmai.ws •_— �.•^ •aYg.YMIM w THE EDMONDS CITIZENS' HOUSING COMMISSION WANTSTO HEAR FROM You. HB 1337 MRSC and Department of HARP Best Practices Commerce Guide Citizens Housing Commission Survey Why DADUs in Edmonds today? o In 2021, the Citizens' Housing Commission stated the following policy recommendation for updating the ADU code to include DADUs: ■ "Allow either one attached or detached accessory unit on a property in the SFR area, with clear and definitive development requirements such as size, ownership, and parking, under the standard permitting process and not require a conditional use permit." o According to the 2021 American Community Survey, 21.5% of Edmonds' residents are over 65 years of age. o The most frequent over the counter ADU question: "Are DADUs allowed for `aging in place'?" What will HB 1337 require? o State legislation mandates that HB 1337 must be implemented no later than six months after the next Comprehensive Plan due date. Commerce language will supersede, preempt, and invalidate any conflicting local development regulations if Edmonds does not adopt policy by June 30, 2025. o The requirements for the City of Edmonds will be as follows: ■ Allow two ADUs per lot (any configuration of ADU and DADU). ■ No owner -occupancy requirements. ■ Allow separate sale of ADUs. Edmonds City Council Approved Minutes May 21, 2024 Page 5 ■ No parking required within a half -mile of a major transit stop, as defined in RCW 36.70A.696(8). ■ Maximum size limitation no less than 1,000 sf of gross floor area. — Gross Floor Area is defined as the "interior habitable area of an accessory dwelling unit, including basements and attics but not including unconditioned space, such as a garage or non -habitable accessory structures." ■ Allow DADUs to be sited at a rear lot line when the lot line abuts a public alley. ■ No setback requirements, yard coverage limits, tree retention mandates, restrictions on entry door locations, or aesthetic requirements that are more restrictive than for the principal unit. ■ Allow ADUs of at least 24-feet in height. ■ Impact fees cannot be more than 50% of fees charged for the principal unit. • What does ECDC currently allow? Permit needed YES - Conditional Use Permit -Type II decision. Type of Unit Attached ADU only. Number of Units May have accessory dwelling unit per lot Size ✓ Must not exceed 40%of the livable floor area of the principal dwelling, up to a maximum of 800 square feet. ✓ No more than two bedrooms. ✓ An exception allows increased size up to 505/6 of the floor area of the principal dwelling if the ADU is all on a single floor. Design Architecturally match with the primary residence. Entrance Side entrance that should be unobtrusive when viewed from the street. Parking One off-street parking space in addition to the parking spaces normally required for the principal dwelling, but no less than three spaces per lot. Occupancy Either the primary dwelling or the accessory dwelling unit must be owner -occupied. • Planning board and staff recommendations include the following policies: o ADU size restrictions o ADU setback reductions o Parking restrictions o Impact fees • Staff and planning board recommendations Permit needed Permitted secondary use; Can be permitted in PRDs. Type of Unit DADUs and AADUs Number of Units: Allow two ADUs on all lots in any configuration. Size Max height 24'. No less than 1,000 square feet gross floor area. Setbacks If rear lot line abuts a public alley, no rear setbacks are required for DADUs, Design No design restrictions. Parking No additional parking required for ADUs within Y mile of a major transit stop. Occupancy Owner not required to reside in one of the units. Allow sale as condominium. Provide incentives for reduced DADU heights in the In RS-10, RS-12, and RS-20 zones no more than 1,200 square feet gross floor area. Rear setbacks may be reduced to a (5-feet for DADUs that are 15' in height or less) in the RS-6 and RS-8 zones. Provide incentives for reduced DADU heights in In RS-10, 115-12, and RS-20 zones no more than 1,200 square feet gross floor area. Rear setbacks may be reduced to a minimum of 5-feet for DADUs that are 15' in height or less in the RS-6 and RS-8 zones Edmonds City Council Approved Minutes May 21, 2024 Page 6 (Yellow highlights identify differences between staff and planning board recommendations) Development Standards o AADUs and DADUs are subject to the same permitting requirements as any other dwelling unit and must meet all health and safety standards, including: ■ Building Codes, Energy Codes ■ Public Works requirements ■ Utility requirements ■ Environmental Codes (Critical Area regulations) Recommendations: Size o Staff and planning board shared recommendations ■ Limiting ADUs to 1,000 sf of gross floor area on small lots (RS-6 and RS-8) ■ Allowing ADUs to have up to 1,200 sf of gross floor area on one or two floors on large lots (RS-10, RS-12, RS-20) ■ Remember: - Gross floor area is defined as the "interior habitable area of an accessory dwelling unit, not including unconditioned space." - Habitable space can be divided by two floors limited at 24-feet in height. Recommendations: Height and Setbacks o Staff and planning board differing recommendations ■ Planning Staff- - Decreasing rear setback requirements to allow for more flexibility on smaller lots (RS- 6 and RS-8) • Allowing a minimum of 10-foot rear setback for DADUs on small lots • Allowing a minimum of 5-foot rear setback for ADUs on small lots that limit ADU height to 15-feet ■ Planning board: - Setback reduction incentives on small parcels only if property owners limit height of ADU to 15' to preserve privacy and views of existing neighborhoods in all zones • Allowing a minimum 5-foot rear setback for ADUs on RS-6 and RS-8 lots • Allowing a minimum 15-foot rear setback for ADUs on RS-10, RS-12 and RS-20 zones o Illustration of planning staff and planning board recommendations Planning Staff ,5• , o' 11111111 is m zo• 000 Sf 000 5f zo, zs• 000 Sf zo ,o' 35, 35' 35' �_ -6 RS- �J Rear setbacks may be reduced Planning Board Rear setbacks may be reduced to a to a minimum of 10.feet (5-feet minimum of 5-feet for DADUs that for DADUs that are 15' in height are 15' in height or less in the RS-6 or less) in the RS-6 and R5-8 and RS-8 zones and to 15-feet in zones. all other zones. ADUS and DADUs subject to 35% lot coverage for all zones RS-6 through RS-20 Recommendations: Parking Edmonds City Council Approved Minutes May 21, 2024 Page 7 o Staff and planning board differing recommendations ■ Planning staff- - No additional parking required for ADUs - 2 parking spaces are currently required for all single family homes. - Current regulations allow ADU parking to be tandem or within the existing driveway - High cost of providing additional parking may limit some homeowners' ability to create additional housing. - Many lots do not have the capacity for a third parking space. ■ Planning board: - No additional parking required for first ADU - One additional parking space required for second ADU Distance to Transit Stop for RS Parcels Legend - Bus Routes � _ Ephlh hlib � o�a,bl nme Hall Mile ' r - Hall Mile Irom Maps Ti v A IA3.3" Recommendations: Impact Fees o Staff and planning board shared recommendations: ■ Count ADUs toward density requirements, consistent with 2024 comprehensive plan update and GMA requirements - HB 1337 requires that assessment of impact fees cannot be more than 50% of what would be imposed on the principal unit - Will result in required impact fees for ADUs Next Steps: What about Pre -Approved Designs? o After ADU code adoption, providing pre -approved design options or prefabricated units can lower costs for homeowners and align designs with community vision ■ Development staff pre -approves architectural plans for compliance with building and development codes ■ Typically approved in shorter timeframe with reduced permit fees Planning Board Chair Jeremy Mitchell commented the ADU/DADU code amendment is a popular topic among citizens although as expected, the planning board received mixed input from the community. Some people wanted nothing to do with HB 1337 and others viewed it as an opportunity for investment, provide multigenerational housing, or provide a variety of housing types. Most citizen input outside those high level concerns were related to massing and height of ADUs/DADUs. With regard to the overall massing, HB 1337 requires no less than 1,000 square feet gross floor area. Many citizens were opposed to anything over 1,000 square feet; the planning board agreed to allow up to 1,200 square feet in zones where the lot sizes could accommodate that size. The planning board was interested in regulations that allowed for some flexibility, incentivizing "Edmonds -friendly" type massing such as using setbacks to result in a one-story ADU/DADU. Planning Board Chair Mitchell continued, with regard to parking which was also a controversial topic, the board met the community halfway; some did not want parking to be a barrier and others wanted to require an abundance of parking to accommodate these structures. The planning board agreed with staff s recommendation that no additional parking was required for the first ADU as the principal structure already requires two parking spaces, but recommended requiring one additional off-street parking space for a Edmonds City Council Approved Minutes May 21, 2024 Page 8 second ADU. The planning board agreed with staff s recommendation regarding impact fees due to the need for that revenue to make infrastructure improvements to accommodate growth. Councilmember Nand thanked the planning department, specifically Ms. Haas, and the planning board for their hard work, recognizing there has been a very robust public process related to this new housing model. She was personally excited to see how it will shape up, especially with the strong concern about displacement. This gives property owners the opportunity to leverage their space to either age in place, accommodate family members, or afford to continue living in Edmonds versus being forced to sell and having a developer subdivide their lot and build luxury houses. She relayed her understanding in California, where there has been a similar affordable housing crisis, ADUs have exploded in popularity. She has read if an alleyway is a principal manner of access/egress for a zero lot line development, it can cause difficulty with vehicular access. She asked if there were any alleyways in Edmonds where a zero lot line could potentially affect the ability to access the property. Ms. Haas answered ADUs/DADUs will go through engineering review; therefore, if a property owner applied for an ADU on the rear lot line, it would be subject to utilities and public works review. Typically public works would address any right-of-way issues. Councilmember Nand recognized HB 1337 establishes a basic floor for state requirements; and suggested a cascading table related to impact fees to incentivize behaviors when property owners build an ADU. For example, could the City offer a percentage reduction if the architecture of the DADU and the principal residence was similar or if the unit would be used for a family member and not for commercial purposes. If a DADU was constructed for commercial purposes, she felt the property owner should pay the full impact fee because it was part of a business model, but if the DADU was constructed to house family members, particularly multigenerational housing, she would support reducing the impact fee. She asked if that was a possibility. Ms. McLaughlin answered legally, impact fees must be linked to the impacts of growth which typically relate to infrastructure needs. She would be concerned about linking the impact fee amount to something other than infrastructure or growth. At City Attorney Jeff Taraday's request, Councilmember Nand repeated her question; if someone were building a DADU for commercial purposes like an Airbnb, she would be in favor of requiring payment of the full impact fee. If the property owner was building a DADU as a residence for a family member, she would support reducing it to 25% to incentivize construction of a more affordable housing option. She asked if that would be legally allowed. Mr. Taraday answered if it was something the council wanted to pursue, he would need to research it. The state has provided clear areas where the City can exempt impact fees, but he was unsure those were the only exemptions. Councilmember Eck expressed appreciation for the planning department and planning board's work as well as the public input. She relayed a concern she has heard regarding requirements related to permeable surfaces. It was her understanding the requirements would be same as for single family homes. Ms. Haas answered ADUs/DADUs will go through the permit process which includes evaluation of impervious surfaces which relate to public works requirements as well as critical area requirements. There is no change based on whether it is an ADU; in terms of impervious surfaces and critical areas, it will be same as any other development such as a new driveway, an accessory structure such as an art studio, etc. Ms. McLaughlin asked if Councilmember Eck was referring to the 35% lot coverage regulation. Ms. Haas advised structural lot coverage is different than impervious surfaces. The development code requires any structure over 3 feet can only utilize only 35% of the lot; the public works code related to stormwater management and impervious surfaces such as paving, structures, gravel, etc. That will not change with an ADU; it will be treated like any other structure. Councilmember Eck commented she liked the idea of recommended designs, finding merits such as ease for the builder and property owner, providing the City an element of control with design, etc. She asked if it would be possible to provide an incentive for a property owner selecting a recommended design. Ms. Haas answered the incentive would be the shortened permit time and lower cost. She was unsure if there Edmonds City Council Approved Minutes May 21, 2024 Page 9 could be another incentive such as reduction in setbacks. Councilmember Eck said that may be something to look into, anticipating a recommended design would make an ADU/DADU more attractive. Ms. McLaughlin explained by their nature, incentives reduce barriers to development which would not conflict with the state mandate as it would provide a more expeditious process along with more design controls. She offered to respond to that question when this comes back to council on June 5. Councilmember Paine expressed appreciation for everyone's hard work on this issue, recognizing there were a lot of state requirements to deal with. She asked if there was a way to financially incentivize conversions of existing principal residences rather than increasing impervious surface which would reduce tree removal, construction of driveways, etc. Ms. Haas answered the state requires that existing structures be allowed to be converted into ADUs which may be a nonconforming garage or studio. Councilmember Paine repeated her question, whether that can be incentivized to reduce environmental impact and recognizing a remodel is easier than new construction, Ms. Haas referred to the development standard that allows 35% lot coverage; often single family homes max out to that 35%. The 35% is in place to protect impervious surfaces; the public works code also protects impervious surfaces. She was uncertain about incentivizing that. Councilmember Paine said she was referring to the conversion of a daylight basement or adding a second story above a garage. Ms. McLaughlin answered that tool currently exists in the code. She offered to speak to that at the next meeting, but the easy answer is there can be incentives, the question is the tradeoff of an incentive such as reduced setbacks, reduced fees, etc. Councilmember Paine asked whether staff was expecting that a developer would buy a parcel and put in a principal house and an ADU and a DADU, whether staff had gotten any idea from the development community about what to expect. Ms. Haas answered that is a possibility similar to what happens with older housing stock. Typically when older housing stock is sold nowadays, it is razed to the ground and built to the 35% maximum which could happen with ADUs as well. She pointed out the massing will not be that much different than what is being built now. Councilmember Paine asked if there were plans to adopt the state code related to condominiumization and have that internal review in the City such as looking at the CC&Rs versus the way it is handled now via the county. She suggested adding that to the list of considerations, whether the City wants to do that and whether there could be a consumer protection focus to ensure it looks good for all participants in the creation of the condominiumization. Ms. Haas relayed the state requires the City allow condominiumization. Councilmember Paine said she was interested in a local review versus at the county. Mr. Taraday answered the City does not typically look at CC&Rs and condominium declarations; that is a private matter between the declarant of condo and the future owners of the condominium units. It is up to the due diligence of the buyer to ensure they are getting the rights they need in the condominium declaration. Cities don't typically do that and it would add cost to the review if the City wanted to undertake that. Councilmember Paine said the City of Seattle does it because she did it for years for Seattle and it offers a lot of consumer protection. It may be an interesting topic to consider and decide whether the City wants to do that. Ms. McLaughlin pointed out it would definitely require resource allocation that staff currently is unable to meet. Councilmember Dotsch said she preferred to think more holistically, commenting this is the first step with the housing bills and the cumulative effects of the housing bills and the proposed incentive programs need to be looked at as a package due to how they impact each other. For example, HB 1110, the two units per lot required bill, two ADUs are allowed on each lot. The SEPA analysis said everything in Edmonds is the same, which is not true and she preferred to dive into all the pieces that will impact each individual lot in single family neighborhoods. One of the other requirements with HB 1110 is no more than one parking Edmonds City Council Approved Minutes May 21, 2024 Page 10 space per unit can be required for 6,000 square foot or smaller lots and no parking is required for housing within'/4 mile of a major transit stop. Councilmember Dotsch referred to the green incentive program, which appears to allow an extra 5 feet, increasing from 35% to 40% lot coverage, reduced parking, and minimizing setbacks on larger lots to match smaller lot setbacks. She feared those would have big impacts on neighbors, pointing out 5 feet from a fence line is very close and with 1,000 square feet, it can be nearly the size of a regular house. In reading posts on Nextdoor, a lot of these type of projects are built in Maple Leaf which has resulted in a loss of light, privacy, trees, green space, etc. In Maple Leaf, developers are purchasing smaller houses, demolishing them and constructing multiple dwelling units. In looking at these piecemeal, it doesn't seems too bad, but in looking at the regulations together, there will be a lot of impacts on lots in single family zones. When most people think about living in a single family house in Edmonds, this type of development isn't what they think about happening next door. She assumed most people were unaware this was being contemplated and feared a lot of people would be surprised as this moves ahead. She urged caution in how much the City allowed upfront, how much was allowed beyond what was required as what was required would already be quite impactful. Councilmember Dotsch asked how heights are measured on sloped lots. Ms. Haas reminded staff must follow the critical area code as well as the tree regulations and cannot treat ADUs differently than a single family home. She hears people say developers will come in and build ADUs, but many lots are already maxed out the lot coverage; whether it is an ADU or a single family home, that is already happening. With regard to 5 feet from the property line, staff and the planning board's recommendation is to allow that only in the RS-6 and RS-8 for DADUs 15 feet or less, one story DADUs. The current code allows accessory buildings such as a garage, playhouses, etc. to be 5 feet from the rear lot line. She recognized those structures were a little smaller but that has already been happening. With regard to how height is reviewed on building permits is the average original grade which is based on the smallest rectangle that can be drawn around the development; an elevation is taken from each corner and averaged. Councilmember Dotsch observed the side of a structure could be taller than 25 feet depending on the slope. Ms. Haas agreed. Councilmember Dotsch asked if a property owner of a single family house on a sloped lot wanted to build a DADU whether it could be higher than the primary unit. Ms. Haas answered yes, for example if the primary was a single story ranch style house, a 2-story DADU up to 24 feet could be constructed under the state requirements. Councilmember Dotsch observed the placement on the sloped lot could also impact the height. Ms. Haas answered that would apply to any single family home or accessory structure. Councilmember Dotsch commented an ADU is attached to a house and it is often used by a family member and is not supposed to be an Airbnb. DADUs will be quite different than existing ADUs because it can be a short term rental. She expressed interest in seeing a bigger picture of the impacts to single family lots rather than looking at it in a vacuum. She inquired about short term rentals. Ms. Haas answered short term rentals are currently an allowed use; a homeowner can currently have a short-term rental in their ADU although the owner needs to live on the site where the ADU located. Councilmember Dotsch asked if owner occupancy would still be required under the new regulations. Mr. Taraday responded the City cannot require owner occupancy anymore, that is the main change. Councilmember Dotsch asked if the City could require rentals of 30 days or more. Mr. Taraday answered the general rule is they have to be treated the same way single family homes are treated. Ms. Haas clarified unless the City changed the requirements for short term rentals throughout the City, that could not be required specifically for DADUs. There cannot be separate rules for ADUs or DADUs. Council President Pro Tern Chen expressed appreciation for the planning board and planning department for bringing this topic to the council for multiple touches. He also thanked the public for voicing their opinions and concerns. He relayed his understanding that ADUs and DADUs would be attached to the Edmonds City Council Approved Minutes May 21, 2024 Page 11 original single family land deed and not subdivided. Ms. Haas answered it cannot be subdivided but it can be condominiumized. Council President Pro Tem Chen referred to the state requirement that allows separate sale of ADUs and asked how that would happen; if the units are on the same deed, how was the ADU sold separately. Ms. Haas answered hopefully the property owner would develop a homeowners association (HOA) and there potentially could be two separately owned structures and the land would be a shared area. For things to go smoothly, it would be beneficial for the homeowners to develop a private agreement, typically an HOA. Council President Pro Tem Chen observed that would result in a different sale arrangement. Council President Pro Tem Chen said he liked the idea of a pre -approved design so the City has some control over what appeared in neighborhoods as well as reduce costs and speed up the permitting process. He assumed the City would come up with preapproved designs. Ms. McLaughlin answered that was definitely an interest and would be beneficial to the program on both sides; however, it will require funding. There are grants available, but that will be a 2025 pursuit. Council President Pro Tem Chen commended the planning board and the planning department for coming up with different recommendations. Ms. Haas advised the only policies the City has control over are related to size, setbacks, parking, and impact fee; incentives will typically have to be related to one of those topics. She suggested thinking about what the City can incentivize before thinking about how to do it would be a good exercise. Councilmember Tibbott asked for clarification, 35% is the lot coverage of the dwelling units so 65% has to remain open. He commented that is an important percentage; in his neighborhood smaller houses have been taken down and larger houses constructed that maximize the full 35%. He asked if 600 square feet of that 35% coverage remained, whether someone could theoretically construct a 600 square foot DADU with 2- stories for a total of 1,200 square feet. Ms. Haas answered yes, reminding it would be subject to the building code. Councilmember Tibbott observed 1,200 square feet on larger lots was the total DADU size, not the footprint. Ms. Haas answered it was the total gross floor area, not the footprint, the livable area, which could be divided between two floors. Garages and unheated, unconditioned spaces are not included in total gross floor area. There could potentially be a DADU with 1,200 gross floor area and additional parking. Although theoretically it could happen, there will be development constraints that limit it. Most people who want an ADU on their property do not want to use up their structural lot coverage on a garage or deck. Councilmember Tibbott asked if a 1,200 footprint DADU and a second story above for a total of 2,400 square feet would be allowed. Ms. Haas answered it would not be allowed. Mr. Taraday clarified it would be allowed because the state law specifically states two ADUs have to be allowed in any configuration. Someone could have a 2-story DADU with a 1,200 square feet on each floor and that would comply with state law. Councilmember Tibbott clarified there could be a 1,200 square foot unit on the first floor and another 1,200 square foot unit on the second floor. Ms. Haas answered yes. Councilmember Tibbott asked about disadvantages of having an ADU or DADU on a property. One that came to his mind was adding a DADU would increase the property taxes which could be disadvantage for some people. Ms. Haas answered it is very subjective; for someone who wants to protect their view, a tall ADU is a disadvantage versus someone who wants to use their structural lot coverage to provide multigenerational housing, it can be an advantage. Councilmember Tibbott said in the enthusiasm of considering allowing ADUs and DADUs, there may disadvantages that have not been discussed. For example, it was his understanding the cost per square foot is significant higher for a small units compared to a larger unit. Councilmember Eck pointed out not everybody wants zoning changes to occur and not everybody will want to build an ADU or DADU. That has been the experience in other cities across country, whether due to Edmonds City Council Approved Minutes May 21, 2024 Page 12 cost, the homeowner doesn't have a need or a myriad other reasons. She asked the percentage of property owners who end up building at least one ADU after this type of zoning change is made. Ms. McLaughlin answered for the assumption in comprehensive plan, the Department of Commerce guidance was used. Because it was felt this housing typology was advantageous to meet affordability levels allowed per the GMA growth targets, the threshold allowed by the Department of Commerce to be used for the City's growth targets was maxed out, 10% which equates to 2,000 ADUs by 2044. She was unable to say she believed the City would reach that number, but that was what was allowed per the Department of Commerce guidance and that housing typology meets the City's needs. Unless ADUs were incentivized and a lot of barriers were removed, she did not realistically think the City would see that many units. Ms. Haas pointed out that assumption is based on 10% of the eligible lots building two ADUs. ADUs are a form of middle housing, not a low cost form of housing. Building an ADU or DADU is very expensive, typically $150,000- $300,000 for even prefabricated ones. An ADU/DADU is a big investment for a homeowner and a choice whether they want to be a landlord, etc. There are a lot of factors and she did not expect ADUs would be built everywhere. Councilmember Eck commented it is a choice that property owners can make. For example, she and her husband are members of the sandwich generation and have been actively talking to her mother-in-law about an ADU in their backyard where she could have privacy and downsize and they could be nearby for her safety. An ADU could be an option and beneficial for vulnerable family members. She also has a daughter in her late 20s who may not be able to afford a single family home in Edmonds so an ADU could be a short term opportunity to provide her housing while she finds a job, etc. Councilmember Eck said she has had conversations with others who are in similar situations. Not one size fits all; the City is considering an array of housing choices as mandated by the state and how to shape that for Edmonds. She summarized this is a very important conversation to have, but not everyone will choose to build an ADU. Councilmember Nand assumed part of the cost associated with DADUs or ADUs is utility hookup. She asked if the building code allows a compost toilet and/or a water tank to be off the grid which would lower the cost of building these structures. Ms. McLaughlin answered the recent building code update does not lend itself to cost efficiencies, but it does allow green building techniques. Being off grid creates problems related to wastewater, etc. as the City would not allow onsite wastewater treatment. Councilmember Nand relayed, as a member of the millennial generation, she knows people who are building off -grid structures with solar, compost toilets, water tanks, etc. and it's much more affordable. Ms. McLaughlin answered water tanks and solar are allowed per the building code. Mayor Rosen opened the public hearing Joseph Herr, Edmonds, recently retired after building 2,500 houses during his career, said he has developed short and long plats and neighborhoods and anything developed in the last 50 years has been built to capacity. Edmonds does not have a lot of new plats, but nothing new in Edmonds would ever allow an ADU because there is no lot coverage remaining. He also served two terms on the Edmonds Architectural Design Board. The state took a heavy hand saying cities have to do this. The City can say they are unable to meet the requirements due to the unique situation in Edmonds. He questioned the thinking that 2,000 ADUs would be built in Edmonds in the next 20 years. He suggested looking at every lot that could possibly support an ADU, anticipating there were not many. Older houses are set back from the street and have small backyards with no room for an ADU. When someone works inside their house and the work exceeds a certain amount, the entire house has to be brought up to current codes including energy codes, fire codes, etc. Fire sprinklers are required in new construction in Edmonds and units 10 feet from a primary unit will require fire sprinklers in the existing structure. The idea of turning split level homes into duplexes; currently the building code does not allow two kitchens in a single house; the only way to do it is to separate the two units which changes the zoning from single family to duplex. The cost to bring the entire structure up to code would likely exceed most of the benefits the homeowner thought they would realize. There is only Edmonds City Council Approved Minutes May 21, 2024 Page 13 one plat ever built successfully, Issaquah Highlands, where they incentivized building ADUs over the garage; out of 40 houses, 2 opted to build an ADU. Victor Martinez, Edmonds, relayed when his mom turned 78 two years ago, she was diagnosed with Alzheimer's and moved into his rec room. They went through the permitting process for an ADU which is under construction now. There are homeowners constructing ADUs; it's work, but it can be done. He hoped the council would not add barriers because there are citizens building ADUS now for their parents. He wasn't willing to wait for the proposed changes because he didn't want to miss the summer building season awaiting a political process. He suggested engineering address the cost of a 1-inch water meter and the general facilities charges; the addition of a kitchen requires a 1-inch water meter which is expensive. They had to drive 26 piles on their property for their ADU due to poor soil which was still 20% cheaper than a 1-inch water meter. It is very expensive to build an ADU and any cost savings help. Janelle Cass, Edmonds, explained she has done environmental assessments for the past two decades. Her comment is related to the SEPA analysis or lack thereof on this policy. She felt for staff because on the outset this doesn't look like a project, but rather a policy change, but she suggested imagining if when Paine Field decided to allow commercial aircraft, they said that's not a project, it's just a policy change. When the City writes code, they will come; in this case this policy has a downstream effect on the number of dwelling units in the City. The simple SEPA Checklist wasn't the appropriate analysis to give decision makers the right information. It was segregated from the comprehensive plan process and should be folded into the EIS process. For example, the section on public services, the SEPA Checklist said ADUs may not increase the overall density of single family neighborhoods and would not significantly increase the need for public services which is contrary to what was discussed tonight. She suggested the council rethink that and if it is included in the EIS, she encouraged the council to delay a decision and make it part of the comprehensive plan process since this doesn't need to be enacted until 2025 when the City could just accept the state's regulations instead of Edmonds ordinances which are above and beyond the state's requirements. She suggested the DEIS or a revised SEPA analysis include a table that compares the no -action alternative, the state alternative and the City alternative so the council can see the true environmental impacts of a decision like this. She has yet to see any analysis of this kind of densification, either from the state or the City. She encouraged the council to do really good data analysis. Jon Milkey, Edmonds, thanked Councilmember Dotsch for identifying the accumulation of the potential impacts. Green build incentives, potential 5-foot height changes, 40% lot coverage and reduced setbacks result in a lot of accumulated impacts between all the housing bills. He thanked Councilmembers Paine and Nand for identifying the possibility of incentives for existing housing stock to provide both more affordable type housing and minimize the impact to neighborhoods by utilizing existing housing stock. He found Planning Board Chair Mitchell's comment, good neighborhood type philosophy while implementing code updates, refreshing. The public doesn't get to see the interaction, just proposed code updates that are a huge change to existing conditions. He supported requiring an additional off-street parking space for ADUs. ADUs are a more affordable type of housing used to age in place or by younger families, both of whom need off-street parking. He referred to the recommended 1,200 square foot gross floor area, pointing out a garage is not counted in gross floor area so someone could easily have a 1,600 square foot building. The costs to build ADUs is high; he is working on a DADU in Seattle that costs $1000/square foot. Expanding the size of a DADU to 1,200 misses the goal of providing an affordable type housing; the bigger it is the more expensive it is and the less affordable it is. Per the Department of Commerce guidance, the City can enact occupancy requirements for short term rentals, RCW 36.70A.680. Chase Kepler, Edmonds, owner of a 12,000 square foot lot, voiced his support and requested this be passed as soon as possible. Joan Longstaff, Edmonds, a real estate broker since 1971 and owner of her own company in Edmonds since 1980, commented on the importance of multigenerational housing. She has worked with a lot of Edmonds City Council Approved Minutes May 21, 2024 Page 14 families trying to meet those needs to care for their loved ones. She is familiar with this issue in Seattle including a 3,000 square foot lot on Queen Anne where a prefab unit was being hand -carried in because of the lack of off-street parking. Greg Brewer, Edmonds, commented the code changes the City is about to adopt are sweeping and all- inclusive. The City has found its way to recommending changes above and beyond the state mandate, an approach he disagreed with. He believed the City should implement the minimum state mandate, learn more about the opportunities and impacts and then revisit expanding the mandates in the future. He expressed concern with the lack of parking requirements and recommended Section 16.20.050.0 include some parking for additional units, ideally one space per unit. Even the state mandate and the planning board recommends including some parking. Once the door is open to development with no parking required, it will be impossible to shut it. The notion that newcomers will not have/want/need a car for transportation will be the exception not the rule. Planning for the exception is dangerous and a dereliction of sound urban planning. This is a citywide code change; not all City streets can accommodate additional street parking. Some streets are full, some lack curbs and sidewalks, forcing people to walk in the streets, other areas have open ditches leaving no place to park or walk safely. Parking will be an issue in the future development of the City. Mr. Brewer relayed another concern is Section 16.20.050.17.2 which states only one domestic water service and meter is allowed per parcel. He disagreed with this restriction as new property owners should have the option to have their own meter if desired especially when ADUs and DADUs will be allowed to be sold separately. Not everyone will want to spend the extra money for separate metering, but they should not be denied the opportunity to do so. The council packet included a SEPA Checklist prepared by staff, an alarming number of questions were answered with the statement, the proposal is a non -project, non -site specific action. While this may be technically true, consultants have told the City to expect 100 new units/year. The SEPA checklist does not seem to take pending development into consideration; it feels like the impacts are being severely downplayed by staff and he wondered how this lack of information will impact the council's decision. He urged the council to take time to fully understand the impacts of the code changes and make the appropriate adjustments to include parking and access to individual unit water meters. Mackey Guenther, Edmonds, thanked planning division staff for their stewardship of the code update and council for their stewardship of its implementation. This is an exciting point in the history of Edmonds, re - legalizing something that has been part of the City's history for at least 100 years. ADUs were originally called carriage houses in the early days of Edmonds; often converted from garages and there are still some downtown. ADUs are the best of Edmonds, a living demonstration that we take what we have and we make it work for us; if you don't need a garage, turn it into a house. The region is dealing with a housing shortage because the 35 cities in the Seattle area have underbuilt homes relative to job growth. Legalizing backyard cottages and in -home apartments is great for Edmonds residents as they make decisions for their unique housing needs. Overall ADUs are flexible, affordable homes that unlock opportunities for many people. With regard to parking minimums for ADUs, one of the main points of contention, every home in Edmonds already has two off-street parking spaces. This is America; if people want more parking spaces, they should have the freedom to build them and if they don't want parking spaces, they shouldn't be arbitrarily required to have them. He understood the regulation of parking spaces was intended to protect public right-of-way from a tragedy of the commons, parked cars filling every street, but in reality people should be able to make choices that make the most sense for them. Mr. Guenther continued, if there is a concern there won't be enough ADUs with parking, the City should just allow more housing overall. Attached family sized homes are illegal in 88% of Edmonds residential land. If there is concern about limitation for new housing options, the envelope needs to be increased. A 2020 Seattle -specific study of parking minimums found 70% of developments in Seattle with no parking requirements did include some parking, quantitative local evidence that the lack of a parking requirement does not lead to the neglect of parking for those who want or need it. He concluded ADUs are great; parking Edmonds City Council Approved Minutes May 21, 2024 Page 15 minimums are an overreach for a country so proud of giving people the autonomy to make the choices that work best for them. If the City requires parking spaces, it should also require chocolate fondue fountains and maybe a statue of Rick Steves. Ken Reidy, Edmonds, said the City's ADU code amendment refers to a public alley, but fails to define a public alley. On September 25, 1990, City Engineering Coordinator Gordy Hyde issued a memorandum that mentions 7.5 feet of City alley. Mr. Reidy wondered if something 7.5 feet wide was ever a public alley. Ordinance 3729 deals with what the City called an unopened alley right-of-way between 8t' Avenue North and 9' Avenue North; this so-called alley right-of-way was only 7.5 feet wide. Contrary to the above and related to a 7.5 foot wide easement, City employee JoAnne Zulauf stated the following in a letter dated December 5, 2014, the width of the right-of-way is only 7.5 feet wide and therefore not an alley, but only a strip of unimproved City property right-of-way. These inconsistencies point out how important it is to use clear and accurate definitions in the code. The proposed code amendment also fails to address whether the easement area must be improved and opened for public ingress/egress before it can be considered to be a public alley. He believed the code should differentiate between open and unopened rights -of -way. Mt. Reidy continued, the code says an alley is a publicly dedicated right-of-way which provides a secondary means of access. The definition of street shall include an alley provided however that an alley shall not be considered a street for the purposes of calculating the setback and front yard requirements. No lot fronting on a street and an alley shall be considered either a corner lot or a lot having two street frontages. He questioned if that definition in the code was true and had it been considered in this effort to amend the ADU code. The definition of easement in the City code is as follows: land which has specific air surface or subsurface rights conveyed for use by an entity other than the owner of the subject property or to benefit some property other than the subject property. Ordinance 2924 January 1993, an easement is not land. He requested this error in the code be corrected, the code has contained this error since 1993. He requested all these issues be addressed as part of the ADU code amendment, an opportunity to make needed improvements to the code, a code with so many needs. He requested the council not allow new code to be adopted that is not clear and accurate. Mayor Rosen closed the public hearing and declared a brief recess. 10. COUNCIL BUSINESS UTILITY BOND ISSUE Deputy Administrative Services Director Kim Dunscombe introduced Scott Bauer, Northwest Municipal Advisors. Mr. Bauer reviewed: Water and Sewer Improvement and Refunding Revenue Bonds, 2024 o Refunding 2013 Water and Sewer Bonds for savings o Funding for water and stormwater projects Background March 2023 Reviewed Refunding with City April 2023 Presented refunding to Finance Committee June 2023 Council adopted refunding bond ordinance (Ordinance No. 4309) Had received indicative rates indicating a refunding through a bank could be close to the public markets Informed the council that we would proceed with an RFP for bank financing, then make decision based on results. July 2023 Issued RFP to banks for refunding the 2013 bonds Best bid showed NPV savings <$500K, less than half the estimated savings from the public market August 2023 City decided to proceed with refunding via public issuance Edmonds City Council Approved Minutes May 21, 2024 Page 16 Financing process was to restart toward the end of 2023 January 2024 Restarted the financing; new money for water and stormwater projects included May 2024 Finance committee and city council to consider new money Bond Ordinance Current bond market o Long-term interest rates increased for much of 2022 and peaked in October 2023 o Rates are below the 2022 and 2023 peaks Bond Buyer 20sond General obligation Index January ZOZO to May 2024 4M a.3o 38D x s 330 } 280 2.30 48D Limited Tax General Obligation Debt Par0—,,&, Giktla Par rbWM,I C.—F., a CIID,, $ 755.000 5 755.000 12/10031 180% - 125% 12/1/2022 1,008.918 1A08.918 12/1/2026 1.67% 12/1/2023 1:1 .11 2.210A00 1211011 2.111 . 1.1 11 11 o21,. 10—, . 3., 5,0D. 1z/1/zal 2a - SM% 11/1/1031 2,46D,000 1.4801M 12/1/20a1 200% 260% 12/11)n12 TelaI LTW Bonds Oeb, j 17,823,918 5 8.898,918 Sz.u141n, 54%0.000 M Now 54000,000 In i in •LTGOWA)121U—fu id •LTW Ref M16 •LTW W19 •LTWRdM23A •LTWWA219(T—W) Water and Sewer Revenue Debt WBueaM fAwar BaeY ParOutrtardire a114 .k Pae noi— Q—Ranee WD— $ 13,045,000 S 13AaSA00 12/1/2038 4W% S.00% 6/1/207i ta.195.OD0 13,S%,0011 12/1n0 o 3.%% a.00% 6n12025 13A..= 13.87+OM "Anus ]00x - 2.25% 6/1/70% UN am 5 61,115.000 5 R0,4%,000 LTGO 2WM IRAT 2011 WS B.&I $ 5320A00 S S4".0o0 UAW S.W.= SI M,= I ■ 52soo.000- S2.000.000 - - - - - S1.500: sI.0. 11H I 11 11� - - - - ,10�% lay 10 T^ .01 101 ,A4 1.11 01 e e 10 41 ,.N^ 110# 1.0 'LP Ip * e 1.11, 10 ❑LTG02021AIR•1201IWS6W&J •WSK,12013 •WSMIADIS •WSRav WM 11/InD31 s.0".. N— e 2024 Bonds Financing Plan 2012 Bonds Currently Callable No savings due to rates on outstanding debt versus current bond market rates Bonds remain callable and outstanding 2016 Bond Placed with JP Morgan Callable 12/1/2023 No savings expected due to rates on outstanding debt versus current bond market rates Continue to monitor 2013 Bonds Callable starting on and after June 1, 2023 Avg. Coupon = 4.57% 2021A LTGO Bonds Portion of the 2011 Water and Sewer Revenue Bonds refunded by the 2021A LTGO Bonds Payable from utility revenues Edmonds City Council Approved Minutes May 21, 2024 Page 17 C'FS�IIIJ� •� a]w�M1• rieMerlOR S u,]n.an 5 .1'-raOm v v— i. .Owt W.J... WSRw TDiO ]3.rR.ODi ,5]S,Oro IUVlo.S i tl5% 4J]O,r. I�i A.000 )..00.WO ii/LION 4]�S•.AO11 SfJiw+ .w. S,crawo iuv]oi. s.c.+. isw b!'Jroi+ r.rwr.r r..w+.er i n,]n.am $ .],sss,aoo litl]iDilA]P•11U11 V:59urJ,, �S S.SXI.UW 5 - 13/V]O51 5.0011 Yme N.sOO.mO s..mn.mo S].sw.ao0 4 s].aoi.ma ssm.mn e le,411 44 41e 41 01 i.iico miv;w/ia]ws m.eu .ws w.:ms .sssu.m]s .ws.e. wm ioi. r/� .iw•w.•..-.., Refund $13,045,000 Water and Sewer Revenue Bonds, 2013 — Estimated NPV Savings of $1,015,000 or 7.8% of refunded bonds — Release $2,129,031from Reserve Account and contribute to refunding • Total casliflow savings of $4,073,000, inclusive of Reserve Account contribution New Capital Project Proceeds for Water and Stormwater — $9.5 million for Water — $2.5 million for Stormwater — Level debt service — Final maturity 12/1/2044 Schedule and Next Steps Tues, May 14 Finance Committee (ordinance introduced) Tues, May 21 Council meeting to consider bond ordinance Thurs, May 23 Rating call Mon, June 3 Receive rating Wed, June 5 Post Preliminary Official Statement Thurs, June 13 Competitive Bond Sale Tues, June 25 Closing COUNCILMEMBER NAND MOVED, SECONDED BY COUNCILMEMBER PAINE, TO APPROVE THE DELEGATION BOND ORDINANCE AND FORWARD TO THE NEXT AVAILABLE COUNCIL MEETING FOR FULL COUNCIL DISCUSSION. Councilmember Nand complimented Ms. Dunscombe and Mr. Bauer for laying out the process, savings, and financial modeling and answered questions at the finance committee meeting. She was comfortable proceeding as recommended by staff tonight. Councilmember Paine asked which projects were not pursued last year and whether they were the water reservoir replacements. City Engineer Rob English answered no projects were deferred; the $9.5M in water projects is primarily related to the Seaview and Yost reservoir projects that are in design now and construction is planned in 2025 and 2026. Councilmember Paine commented there are transportation elements attached to those projects. Mr. English said he was not aware of any transportation element to those projects. Councilmember Paine referred to attachment C, Description of Plan Additions, that states the Water Fund contribution to the Transportation Projects that include water infrastructure for replacement and rehabilitation. Mr. English answered that could be related to projects such as 76t' & 220t1i which is an intersection improvement project that includes water main replacement. Councilmember Paine concluded this looks like a good deal. Council President Pro Tem Chen thanked Mr. English, Ms. Dunscombe and Mr. Bauer. He relayed his understanding that the purpose of issuing the 2024 bond was to refinance the 2013 bond and provide funding for water and sewer projects. He asked what kind of projects would be funded. Mr. English answered the $9.5M for water is primarily the two reservoir projects, Yost and Seaview. The $2.5M is related to stormwater projects including the lower Perrinville project. He recalled during the rate study it was pointed out the $2.5M will serve as a cash match for grants received for that project. Council President Pro Tem Chen asked if the $35M cash in the water utility account was not available for funding the water reservoir projects and the Perrinville project which total $12M. Mr. English recalled during last year's modeling effort it was pointed out the watermain and sewer replacement programs as well as operation costs are funded with the rate structure. The rate increases approved by council covered those costs and those significantly bigger capital projects, the two reservoirs and lower Perrinville, were to Edmonds City Council Approved Minutes May 21, 2024 Page 18 be funded by the bond. Ms. Dunscombe commented of the $35M that Council President Pro Tem Chen referenced, a significant portion, $16M, is sewer. The smaller cash balances in water and storm are where these projects are funded from, so it is imperative to pass the bond so those CIP projects are funded. Council President Pro Tem Chen asked if staff had been looking for federal or state grants to help fund those projects and not just borrow money. Mr. English answered yes, there are 1-2 grants for lower Perrinville that fit that type of project scope of work. BNSF has worked with the Tribes to apply for funding to pay for construction along the railroad. He assured staff was always looking for opportunities to fund projects with grants. Council President Pro Tem Chen referred to net present value savings by retiring the 2013 bond totals $1,015,000 which represents the savings by retiring the bond. He referred to the bond issuance cost and the interest incurred over the lifetime of the new 2024 bonds, commenting those costs need to be evaluated compared to the net present value savings. He asked for an estimate of those costs. Mr. Bauer answered looking specifically at the refunding/refinancing portion, the cost is estimated at about $139,000. When net present value is reported, that incorporates issuance costs associated with the bonds. With regard to savings, the net present value savings is comparing existing principal and interest payments versus new principal and interest payments and does take into account interest on the new bonds and the differential between the two is how the net present value savings are calculated. Council President Pro Tem Chen observed with the issuance of new bonds for 2024, the proceeds are used to pay off the 2013 bonds. Mr. Bauer agreed, explaining bond proceeds will be used to pay off the 2013 plus about $2.1M of restricted reserves will be released that the City will contribute to the financing; those two together will be sufficient to pay off the 2013 bonds. MOTION CARRIED UNANIMOUSLY. 2. ORDINANCE CHANGING THE DATE OF MONTHLY COUNCIL COMMITTEE MEETINGS COUNCILMEMBER ECK MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO ADOPT THE PROPOSED ORDINANCE CHANGING COMMITTEE MEETINGS FROM THE SECOND TO THE THIRD TUESDAY ON THE NEXT AVAILABLE CONSENT AGENDA. Council President Pro Tem Chen explained this change will allow time for Finance to develop the monthly financial report and have it available for review by the finance committee. Historically the committee has waited an additional month to review the prior month's financial report. Councilmember Nand clarified while this change was originated by Finance staff, the reason she and Council President Pro Tem Chen discussed changing all committee meetings to the third Tuesday and not just the finance committee was to avoid a perception of hiding the ball by holding finance committee meetings on a separate date. She apologized for changing the date for all the committee, but it will be better for the public if all the committee meetings are cohesive and sequential on a single day. MOTION CARRIED UNANIMOUSLY. 11. CONVENE IN EXECUTIVE SESSION TO DISCUSS PENDING OR POTENTIAL LITIGATION, RCW 42.30.110(1)(I) At 9:20 pm, the Council convened in executive session to discuss pending or potential litigation per RCW 42.30.110(1)(i) for a period of 20 minutes. 12. RECONVENE IN OPEN SESSION Edmonds City Council Approved Minutes May 21, 2024 Page 19 The meeting reconvened at 9:40 p.m. 13. COUNCIL COMMENTS Councilmember Nand commented since it is Asian American/Pacific Islander Month, she wanted to share a story about one of her heroes, her grandmother, Kamalpatti Shandil, who was 95 years old. She moved to Edmonds almost 30 years ago in 1995 and passed away last Wednesday. She remembered her coming to a council meeting, and Chief Hovis helping to escort her. Even in her 90s, she was very active and engaged in the community. She was born in the Fiji Islands in the South Pacific in 1928. She excelled in school and was a great athlete, and then WWII happened. An unintentional effect of the war was that allied soldiers moving across the Pacific Theater to attack Japan accidentally brought tuberculosis to the Fiji Islands and killed over half her family because people on small islands have no immunity when a disease like that is introduced. Her grandmother was forced to quit school and never went beyond the sixth grade. She read books like Lady Chatterley's Lover and other Victorian novels by the cooking fire in her house in Fiji where she raised her eight children which included Councilmember Nand's mother. Councilmember Nand continued, her grandmother ensured her children had access to books and could go to school and made sure her mom graduated from high school and was the first persons in her family to go to college at the University of the South Pacific. Her family immigrated to the United States in 1979 where her dad worked in a factory. On their first day, he and his brother were walking around Seattle and being from a tropical island, had never seen snow and didn't have coats. Newly immigrated, they didn't know anyone; usually when people immigrate, they look for people who speak their language and understand their culture. They were able to provide that for other people who immigrated here. Councilmember Nand relayed comments people made to her, thanking her for sharing her grandmother with them. She did not realize until her grandmother passed away how many people she touched in the community. She was astonished by the kindness of the Edmonds community to her family in this time of grief; her colleagues have been so kind and supportive and Council President Pro Tern Chen and Councilmember Eck attended her grandmother's funeral. She wrote her grandmother's obituary very quickly and sent it to Teresa Whipple, asking to have it published before her funeral on Sunday and Ms. Whipple offered to post it immediately. She wanted to wear a bracelet her grandmother gave her to her funeral but it was broken; a jewelry designer in Edmonds, Sabrina Shultz, repaired it for her and refused payment. On Saturday, Lily at the Branding Iron kept her store open past closing to print her grandmother's funeral program. Councilmember Nand continued, her community, the Fiji Indian community, felt so loved and embraced and that is a great example of what Asian American and American Pacific Islander month is supposed to be about, celebrating stories and sharing loved ones and heroes who have an impact on the community. Her grandmother became a U.S. citizen in 1995 and did not miss voting in a single mid-term or presidential year election. The last time she voted was for her. She loved sharing her grandmother with everyone and she thanked everyone for their kindness to her, her family and her community in their time of grief. Councilmember Paine thanked Councilmember Nand for sharing her family with everyone; they are all such lovely people and she was sorry for her entire family's loss, noting her grandmother clearly knew what she was doing. Councilmember Paine referred to the discussion earlier on the agenda regarding ADUs, recalling when she ran for office four years ago, having a discussion with an Edmonds family who had a detached ADU that was approved via a conditional use, allowed only with permission from the City. Both parents had cancer and needed to stay near family. The process they described was the mayor at the time said no and the resident explained their parents were in the last days of their life and need care. She was glad the council Edmonds City Council Approved Minutes May 21, 2024 Page 20 was discussing ADUs, commenting most would be used for family members, to keep taxes at bay, provide economic opportunity for family members, ensure a family focused environment at the household level, and make sure nice things happen for the rest of the family. The last several months were good for that family because they were able to be together. It is time to legalize ADUs/DADUs so families can put together systems that work well for them. Councilmember Dotsch thanked Councilmember Nand for sharing the story about her grandmother. She assured the public that she read every comment beginning with the planning board process. It is important to hear from the community and that the council listen and take the time to review their input as well as input from planning board and staff. She appreciated the variety of information and opinions from the community that help make this process better for Edmonds. Council President Pro Tem Chen encouraged the public to spend time on Memorial Day to pay their respects to those who sacrificed their lives so we can enjoy freedoms. He looked forward to the Memorial Day program at the cemetery, noting this year Mayor Rosen and Greg Copeland will relay stories. Councilmember Eck relayed she has been thinking about the increasing division across the country and locally and is often asked how it is going on council. She tells people she feels the council is trying hard to work together and show a level of respect and professionalism, walk the talk, and be good role models, something the community is also seeing. She was optimistic if that can happen in Edmonds, it can be done in other places. She appreciated her fellow councilmembers and the mayor. 14. MAYOR'S COMMENTS Mayor Rosen had no comments. ADJOURNMENT With no further business, the council meeting was adjourned at 9:50 pm. cs:� SCOTT PASSEY; CLERK Edmonds City Council Approved Minutes May 21, 2024 Page 21