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2024-06-04 Council Special MinutesEDMONDS CITY COUNCIL SPECIAL MEETING APPROVED MINUTES June 4, 2024 ELECTED OFFICIALS PRESENT Mike Rosen, Mayor Vivian Olson, Council President Chris Eck, Councilmember Will Chen, Councilmember Neil Tibbott, Councilmember Michelle Dotsch, Councilmember Susan Paine, Councilmember Jenna Nand, Councilmember 1. CALL TO ORDER STAFF PRESENT Beckie Peterson, Council Executive Assistant Jeff Taraday, City Attorney Scott Passey, City Clerk The special Edmonds City Council meeting was called to order at 5:30 pm by Mayor Rosen in the Brackett Room, 121 5th Avenue North, Edmonds, and virtually. Mayor Rosen described the procedures for the meeting; each agenda item is scheduled for 20 minutes, there will be about a five minute introduction/overview, followed by two minutes for each councilmember in order of council position to ask a question and get an answer or to make a comment. 2. COUNCIL BUSINESS 1. INFORMATION REGARDING OPTION TO FORM EDMONDS FIRE DEPARTMENT Councilmember Tibbott said this agenda item will focus on the updated Fitch report and updated information received about the options. In the updated Fitch report, the cost of Option 1, annex into South County Fire RFA is $18.7M; the cost of Option 2, contracting with Shoreline Fire Department remains unchanged ($24.9M); and the cost of Option 3, create Edmonds Fire Department, decreases to $18.8M which reflects a reduction in cost by starting with used equipment. He pointed out the option to create the City's own department is near parity with joining the RFA. In asking Bill Sturgeon, Fitch, what that $18.8M buys the City, he said it was basic fire service and did not include for example waterfront fire suppression, rescue service, or community paramedics. Councilmember Tibbott referred to the comparison of implementation tasks and timelines, Option 1 is about 24 months, Option 2 is 24-36 months, and Option 3, forming an Edmonds Fire Department starting with used equipment, the timeline decreases by 12 months to 24 months, which is rough parity with annexing into the RFA. He reiterated Option 3 is setting up a basic fire department, not including all the services residents have come to expect with the RFA. It is an apples to apples comparison but the apples for starting the Edmonds Fire Department has a bite or two out of them. It will take longer than 24 months to provide Edmonds City Council Approved Minutes June 4, 2024 Page 1 all the services residents have come to expect with the RFA if the choice is to have a Edmonds Fire Department that provides all those services. Councilmember Tibbott recalled at the PSPHSP committee meeting, he asked about administrative costs that the City be required to provide and was provided a list of those services. He asked for Mayor Rosen's assistance in tracking down those numbers. Mayor Rosen relayed his staff reached out to Mukilteo who has their own fire department, the council sought updated numbers from Fitch, and additional information was requested from SCF. There are a number of variables because it is all choices related to the type of service, type of equipment, etc. For reference, Mukilteo's cost is $6M/year for 2 stations and half the population; doubling the population and adding another station, puts their cost in about the $16M range. Building the City's own fire department, the number he calculated is close Fitch's, approximately $19-20M. There are other impacts of building the City's own fire department including startup; while the City is preparing to provide services, the City will still need contract for fire and EMS services while building up its own stations. Mayor Rosen continued, there are also impacts on HR of hiring 50 people, payroll, accounts payable, equipment maintenance, mandatory training, etc., for which the City would lose the economy of scale, and establishing a replenishment fund (B fund) for trucks and equipment. If it is assumed a truck has a 15 year life and the department keeps it for another five years for backup, that reserve fund would need to be established quickly. There are also things an Edmonds Fire Department would not have to do such as CPR training because there are other organizations that provide that and distribution of devices such as smoke alarms. In terms of economy of scale, it is worth mentioning insurance, SCF has a medical provider on staff which their staff uses to catch things early and they are very medicine compliant and they also self -insure. Mukilteo is the same union as SCF but a different local and do not pay the same rates. In terms of recruitment, in a competitive environment, the rates will be somewhat different, which impacts how long personnel stay if other openings occur at a higher pay and who might be interested in the position at those salary levels. Mayor Rosen relayed it had been discussed with SCF whether it would be possible to get some of their staff if the City were to form its own department. SCF plans to ask the fire commission for 10-15 more staff so that would not necessarily happen. Even if Edmonds formed its own department, it would not necessary be that everyone working for SCF in Edmonds would go to the new department. Councilmember Tibbott pointed out that information was obtained since the PSPHSP committee meeting to help with developing a preferred option. Mayor Rosen pointed out the $19M approximate cost to form Edmonds' own fire department is an annual number and does not include startup costs such as acquiring equipment when the City is not yet providing service. Councilmember Eck expressed appreciation for Mayor Rosen sharing what he learned from Mukilteo, relaying there were things she had not thought of. In thinking about not having community paramedics, that service primarily helps seniors and without that program, many vulnerable seniors in the community would suffer. For her Option 3 was not a viable option because it did not have a community paramedic program. With regard to recruitment, retention and training required for Option 3, and no guarantees that would go smoothly, it seems the timing from Fitch is an averaged best case scenario. She had not thought about the cost of administration of recruiting and backfilling positions and addressing HR issues. Another expense that may not have been considered is vehicle maintenance. There are a lot of things related to the City having its own fire department that have not been fully encapsulated in this conversation. At a time when the council is looking hard at everything the City is doing, there are a lot of unknowns and things that could creep up with Option 3. Edmonds City Council Approved Minutes June 4, 2024 Page 2 Councilmember Chen said he wanted to take this opportunity to address something that has come up in email and been floating in the community, the fire benefit charge. The benefit charge is tool used to charge businesses to balance out the benefit they receive from the fire service which eases the cost for residential homeowners. The average accessed value of Edmonds homes comparable to neighboring cities is slightly higher, the City's assessed value is $15-16B. If the council chose Option 1, annex into SCF RFA, he asked if there would be a future discussion regarding how the benefit charge applies to the City of Edmonds versus the other members of SCF RFA or was it a straight forward application to all members. Mayor Rosen answered with the benefit charge everyone is treated the same. The benefit charge can go up to 60%; the RFA has the lowest benefit charge in the state. Mr. Taraday advised the benefit charge is on the ballot in August to be renewed for 10 years. Mayor Rosen explained the RFA can raise the level without a vote; voters approve the RFA having a benefit charge, but commissioners have the authority to increase the amount. Due to the Edmonds' profile, the higher the benefit charge is, the lower the cost for the average homeowners is. The benefit charge is beneficial to the City and to the SCF RFA as it provides a stable revenue stream. With regard to Option 3 and starting a replacement fund, Councilmember Dotsch asked if SCF had already been compiling funds to replacement equipment and if so, did the City get those funds if it annexed into the RFA. Mayor Rosen offered to follow up on that. Council President Olson answered the City's contract is a contract for service and the City would not entitled to reserves from the RFA. That can be verified and confirmed, but she was almost 100% certain the City did not have access to those funds. With regard to purchasing equipment per the contract, Council President Olson said that was a really significant thing and she thanked the residents who brought that to the City's attention. It was previously an unknown impact and now it is a known impact. Everything in this discussion is based on estimates. The City would be financing either option, buying new equipment or buying the rolling stock. Council Executive Assistant Beckie Peterson pointed out the difference in debt service was about $400,000/year to buy new versus buying used, approximately 2%. Although it sounds like a big difference between a $6.75M purchase and a $3.75M purchase, the net result in debt service is only $400,000/year. Further if the City were to fund a reserve in advance so when used equipment reached its full life, the net result would be exactly what Fitch presented as it would the same as what was put into the reserve, the expected cost would be the same $19.2M. Councilmember Paine pointed out something that hasn't been talked about is retirement and pension costs which will add to the cost of the City's creating its own fire department. The contract with SCF would also need to be extended for 1-3 years and that decision hasn't been made yet. The City would also need to pass a levy to cover some of those costs and funding decisions would need to be made regarding personnel. In speaking with a firefighter recently, she was told they are paid at the mid -point. Mukilteo pays less than the mid -point; SCF's recruiting strategy includes recruiting from Mukilteo. Members of the community have said the City could control personnel costs better; the City would be able to control program costs better including making decisions such as whether to have the community paramedics program, whether response times are adjusted, etc. Those are things the council has not yet even begun to consider. Councilmember Nand referred to the annual cost assumption of Option 3, assuming the $19.2M included the annual cost of creating a reserve. She assumed the cost of replacing equipment in five years would go up to $19.875M. Due to the extremely dangerous nature of EMS, paramedics and firefighting, she asked about the liability costs the City would be facing including workman's comp. She was concerned about a concept floating in the community that the City could control the amount of personnel that are funded and therefore lower costs that way from a liability perspective. If the City is underfunding emergency services and response times get longer or there are not enough people to respond to a fire or other life threatening emergency, she wondered it that exposed the City to liability from the estates of people who did not survive or people who might suffer lifelong injuries or disabilities. Edmonds City Council Approved Minutes June 4, 2024 Page 3 Councilmember Nand continued, every other city in Snohomish County that faced this question did the arithmetic and decided it would easier to outsource this calculus to RFA and let them make decisions based on their level of expertise in this industry. If the City were to undertake this titanic task of reforming the Edmonds Fire Department, she had a lot of questions about assumptions, insurance, liability and reserve fund costs which would need to be added to the $19.2M annual cost. For example, if the City's fire department has old equipment and firefighters are responding to an emergency and the equipment fails or it is not properly maintained, she wondered if that would also open the City to a lawsuit. 2. TIMELINE/PROCESS OF EXPLORING THE PREFERRED ALTERNATIVE OF RFA ANNEXATION Council Executive Assistant Beckie Peterson reviewed the agenda attachments: A. Draft Resolution Fire Service Preferred Alternative (approved by council last week) B. SCF Handout regarding RFA annexation (12-28-23) C. RFA Plan Amendment (all the rules, how things are run, how annexations work, operations, rules, etc.) This document will be amended if Edmonds requests annexation D. 2024 District Guide Election Timeline E. RCW 52.26.200 regarding RFA. Council was also provided RCW 52.26.3000 related to annexation Ms. Peterson also provided council a color coded worksheet of annexation workflow which organized information from the SCF's handout to show the responsibilities and actions of the four entities (registered voters, Edmonds City Council, City of Edmonds, RFA Governing Board). She reviewed the RFA Annexation Workflow: VOTE; simple Registered majority Voters required for approval of annexation to the RFA RESOLUTION t, RESOLUTION to place Edmonds pursue RFA RFA Annexation on City Annexation ballot Council Mayor signs. City • The City and RFA meet to discuss City Clerk submits Fail: Clerk delivers terms and conditions of election related implement City of Council resolution annexation. including revisions to documents to county contingency Edmonds to RFA Governance the RFA Plan and Interlocal elections office plan for Fire Board Agreements necessary to Service effectuate annexation. Examples of Interlocal Receives Edmond:. RESOLUTION to Pass: Council resolution. Agreements that may be amend RFA Plan. and implement initiates annexation necessary: Cost sharing of grant request of city annexation process annexation expenses. Fire Marshal to annex according to RFA services. Assignment of City RFA Plan Governing contracts related to fire and EMS. Board Potential amendments to the RFA Plan: Governance. Jurisdictional boundaries. • SEPA Review Councilmember Eck referred to scale and ability of the RFA to pivot more quickly based on population growth, switching out equipment, trucks, etc. There are advantage of one entity being able to juggle things and remobilize that an entity unto itself such as Mukilteo does not have the ability to do unless they are asking the RFA for assistance. Economies of scale are an important thing to consider. As relates to these documents, she did not have any questions. Edmonds City Council Approved Minutes June 4, 2024 Page 4 Councilmember Chen referred to the step of taking the ballot measure to voters. The final outcome is outside the council's control; the voters will ultimately decide so the City needs to think about and put effort toward establishing a contingency plan for fire services. Councilmember Tibbott referred to a question that has come up is in Option 1, the City gives up control of fire services and depends on the accountability exercised by commissioners. In addition to this flowchart, he suggested thinking about how Edmonds residents participate in electing commissioners who oversee the City's priorities and commitments demonstrated over the years. He has spoken with three of the seven commissioners and found with at least two, there is a high degree of correlation between what the City was committed to. In addition to voting to be in the RFA, residents will also vote for commissioners who represent the City's interest in the RFA and that is how the City exercises accountability. He referred to the gray box in the RFA Annexation Workflow and the step where the City negotiates the final RFA plan which is the way for the City to exercise some level of control in expected services and sets up the basis for accountability in the future. Councilmember Dotsch asked if there was information about the annual increase in costs to taxpayers following annexation. The costs cited are a moment in time snapshot; there seems to be a history of ever- increasing costs. She was concerned about costs as the City will lose control of direct voting. Mayor Rosen answered the rates at annexation do increase just as the cost to the City increases. The increase in property tax is 1% year which could change as a result of changes in the benefit charge. Costs increase upon annexation and the cost for communities in the RFA increase 1%. Councilmember Dotsch commented Edmonds' property taxes are higher than the rest of the entities in the RFA and will be adding more revenue. Mayor Rosen agreed Edmonds' assessed value was higher. Councilmember Dotsch expressed concern that the benefit charge could generate more revenue from Edmonds as well as from the City's higher assessed value. Mayor Rosen explained the benefit charge lowers the cost to residential customer because multifamily or businesses pay based on the structure rather than assessed value. Councilmember Tibbott recalled that question was asked during the PSPHSP committee meeting and the administration said Edmonds does not have the highest assessed value of the cities in the RFA. Councilmember Paine explained that is not how taxes work, the City will not be paying more, it will be leveled out to the amount asked by the taxing entity. It is how much peanut butter is spread across the piece of bread, as the last entity annexing to the RFA, it will be a thinner spread of peanut butter (the tax), on the piece of bread. Council President Olson emphasized any ballot measure requires a campaign to get the word out and have outreach to the community. Research shows that effort is basically 9-12 months. For the April ballot, that would only allow 9 months for that effort. Some councilmembers have expressed interest in an earlier ballot, but it is more important to educate voters, have well written pro and con statements, and to get everyone engage and involved. She agreed with Councilmember Chen that the City needs to explore other options at the same time it is negotiating with RFA because in the end, it is not the council's decision, it is the voters' decision. Councilmember Paine agreed the investigation needs to travel on parallel tracks which includes preparing for a levy if the City forms its own fire department. She recalled SCF said they would be glad to support the public education campaign like they did for Brier and Mountlake Terrace. In speaking with a Mill Creek councilmember recently, she indicated the RFA had an excellent person who provided information to council. It will be important to understand how the taxes will impact property owners which will require precision property tax analyses. If the campaign period is 9 months for whatever the council decides to Edmonds City Council Approved Minutes June 4, 2024 Page 5 pursue, this needs to start now as the City is running out of time. She expressed support for having the resolution come back to council for approval and have it submitted the RFA to get that process started. Councilmember Nand said her attention has been on the gray box, the next step after the council approves a resolution to pursue RFA annexation under the language of RCW. It was her understanding that SCF is not able to authorize their administrative staff to provide a public education campaign until the City formally requests annexation. The public has expressed a lot of confusion about the annexation process. She suggested expediting the passage of the resolution to pursue RFA annexation so the fire chief and the subject matter experts can start providing information about the impact on property taxes, how funds are spent in the RFA, etc. It was her impression the RFA has been in a holding pattern waiting for the council to pass the resolution to pursue RFA annexation so they can authorize their administrative staff to undertake the public outreach campaign. Councilmember Nand continued, the City has been in discussion with the RFA since the previous administration last year, but it was her understanding the RFA cannot do the calculations and provide town halls until the council passes a resolution to pursue RFA annexation. She anticipated it would be more impactful for community members to hear the RFA explain how their property taxes would increase and how the funds will be used. 3. INFORMATION REQUESTS / ADDITIONAL QUESTIONS FOR COUNCIL DECISION MAKING Council President Olson advised the intent is to bring the resolution to council for a vote at the next meeting. This agenda item is to determine what additional information councilmembers need to make a decision on the resolution next week. One question that will be researched is Councilmember Dotsch' question about whether the City participate in the replacement reserve for the rolling stock as a contract city. Councilmember Paine asked for confirmation that two fire trucks are 26 years old, one is 18 years old and there are no medic cars existing from the City's old fire department. Council President Olson answered the contract term is all rolling stock so it not just vehicles that came from the City initially, it is anything in the fire stations now. Councilmember Paine commented the City would have to negotiate a price for the paramedic vehicles. Her question is what equipment the City would purchase and what the City would receive. Councilmember Chen relayed if the City annexes into the RFA, Edmonds citizens will run to be elected to the commission. He asked the timing of that and how many commissioners Edmonds was entitled to, whether it was based on population, accessed value or another formula. When the City becomes a member of the RFA, it will be entitled to the reserves the RFA has built up over time which would be a plus for the City. He asked if there was any restrictions on the timing before the City can enjoy all of the benefits and also the liabilities. Council President Olson recalled the fire chief had that conversation with council in chambers. If the City joins the RFA, it will pay a fair amount more than under the contract, but gets the reserve as part of the package. Councilmember Chen asked if there were any caveats. Council President Olson observed there are obviously a lot of questions that will be addressed and answered during negotiations. There is a lot the council doesn't know, but tonight's discussion is to determine what the council needs to know before voting on the resolution to pursue RFA annexation. Councilmember Nand requested the administration discuss with the RFA the timeline for public town halls and whether the administration will be the only participants, whether councilmembers participate, any restrictions on councilmembers' participation, etc. She thought the council requested annexation last year, but the RFA did not agree. She has been wondering when the town halls would start and when the RFA would start presenting information to taxpayers. Councilmember Chen explained one word was changed in Edmonds City Council Approved Minutes June 4, 2024 Page 6 the resolution. Councilmember Nand observed apparently that changed the legally operative portion of the resolution. Councilmember Dotsch said a lot of citizens have asked if the City joins RFA, what happens to the taxes they are paying the City that are used to fund the fire service contract and when will that decision point happen. Mayor Rosen answered that is a decision the council needs to make before annexation into the RFA goes to the voters, whether to keep, some or none of the current taxes,. Councilmember Dotsch asked whether that decision would be made in the next nine months. Mayor Rosen suggested making it significantly sooner than that. Council President Olson offered to categorize the questions that need to be answered before the council votes on the resolution and questions that need to be answered, but would not affect councilmembers' ability to make a decision on the resolution next week. Councilmember Tibbott asked about representation on the fire commission. It was his understanding that before voters vote for commissioners, the City will have a liaison. He asked how that liaison is selected and whether it would be to the City's benefit to have more commissioners, for example, nine instead of the current seven. Mayor Rosen relayed the equipment the City would be buying includes two 1998 engines, a 2006 engine, three 2017 medic vehicles, a 2017 aid vehicle and a 2007 marine unit. Councilmember Tibbott asked the total cost of that equipment. Mayor Rosen advised he will research that. Council President Olson asked if City Attorney Jeff Taraday had any questions or comments. Mr. Taraday replied he did not have any questions at this time. ADJOURNMENT With no further business, the Council meeting was adjourned at 6:22 pm. SCOTT PASSEY, Ci1f CLERK Edmonds City Council Approved Minutes June 4, 2024 Page 7