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06/21/2005 City CouncilJune 21, 2005 The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Haakenson in the Council Chambers, 250 5th Avenue North, Edmonds. The meeting was opened with the flag salute. ELECTED OFFICIALS PRESENT Gary Haakenson, Mayor Richard Mann, Council President Michael Plunkett, Councilmember Jeff Wilson, Councilmember Mauri Moore, Councilmember Peggy Pritchard Olson, Councilmember Dave Orvis, Councilmember Deanna Dawson, Councilmember 1. APPROVAL OF AGENDA STAFF PRESENT Tom Tomberg, Fire Chief David Stern, Chief of Police Duane Bowman, Development Services Director Stephen Clifton, Community Services Director Dan Clements, Administrative Services Director Noel Miller, Public Works Director Kathleen Junglov, Asst. Admin. Services Dir. Stephen Koho, Treatment Plant Manager Darrell Smith, Traffic Engineer Dave Gebert, City Engineer Frances Chapin, Cultural Services Manager Scott Snyder, City Attorney Sandy Chase, City Clerk Cindi Cruz, Executive Assistant Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder COUNCIL PRESIDENT MARIN MOVED, SECONDED BY MOORE, FOR APPROVAL OF THE AGENDA. MOTION CARRIED UNANIMOUSLY. 2. CONSENT AGENDA ITEMS COUNCILMEMBER MOORE MOVED, SECONDED BY COUNCIL PRESIDENT MARIN, FOR APPROVAL OF THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: (A) ROLL CALL Approve 6/14105 (B) APPROVAL OF CITY COUNCIL MEETING MINUTES OF JUNE 14, 2005. Minutes (C) APPROVAL OF CLAIM CHECKS #70276 THROUGH #80401 FOR THE WEEK OF Approve Claim Checks JUNE 13, 2005, IN THE AMOUNT OF $145,195.02. Taxi License (D) APPROVAL OF 2005 TAXI LICENSE FOR NORTH END TAXI. (E) ORDINANCE NO. 3553 APPROVING THE REZONE OF CERTAIN REAL PROPERTY Ord# 3553 LOCATED AT THE SOUTHWEST CORNER OF 76TH AVENUE W AND 219TH STREET Rezone SW comer of 76'h SW FROM MULTI - FAMILY RESIDENTIAL (RM -2.4) TO GENERAL COMMERCIAL Ave. W & (CG -2) IN ACCORDANCE WITH FILE NO. R -2004 -129 AND ADB- 2004 -132, AND 219`" St. APPROVING A CONCOMITANT ZONING AGREEMENT LIMITING THE RIGHTS GRANTED BY SUCH REZONE. Edmonds City Council ApprovedMinutes June 21, 2005 Page 1 Res# 1076, Intent to Vacate 210, (1) APPROVAL OF STREET VACATION FOR THAT PORTION OF 219TH STREET SW St. t SW east of LYING EAST OF 76TH AVENUE W AND WEST OF THE TOP FOODS PROPERTY. 76 Ave. W., and Approval APPROVAL OF RESOLUTION NO. 1076, STATING THE INTENT TO VACATE 219TH of Street STREET SW EAST OF 76TH AVENUE WEST AND WEST OF THE TOP FOODS Vacation PROPERTY. Edmonds Night out ( G ) AUTHORIZATION FOR THE MAYOR TO SIGN AN AGREEMENT WITH THE Funding POLICE FOUNDATION REGARDING FUNDING FOR THE EDMONDS NIGHT OUT EVENT. Fire Rescue (H) AUTHORIZATION FOR THE FIRE DEPARTMENT TO ADVERTISE FOR BIDS FOR A Boat FIRE - RESCUE BOAT PENDING STATE GRANT APPROVAL. Treatment Plant (1) TREATMENT PLANT REORGANIZATION. Reorganization (J) APPROVAL OF ORDINANCE NO. 3554, AMENDING ORDINANCE NO. 3528, ANNUAL Amend d Ord SALARY ORDINANCE FOR BUDGET YEAR 2005, TO REFLECT THE 2005 L -5 Annual Salary COMPENSATION STUDY FOR NON - REPRESENTED EMPLOYEES, AND APPROVAL Ordinance OF THE REVISED L-5 SALARY POLICY Funding Request for 3. REQUEST FOR FUNDS FOR THE FOURTH OF JULY FIREWORKS DISPLAY BY THE 4"' of July GREATER EDMONDS CHAMBER OF COMMERCE Fireworks Display th Ron Clyborne, Edmonds Chamber of Commerce, explained the Chamber has been putting on the 4 of July celebration for over 90 years and it is one of the few non - commercial events the Chamber sponsors other than THE downtown Halloween and tree lighting events. He explained this community function brings thousands to the city for the children's parade, main parade, games in City Park, dance band and the fireworks. He requested the Council consider allocating $2,000 to the Chamber to assist with the 4th of July event. COUNCIL PRESIDENT MARIN MOVED, SECONDED BY COUNCILMEMBER DAWSON, TO APPROVE A $2,000 EXPENDITURE TO THE CHAMBER OF COMMERCE FOR THE 4TH OF JULY EVENT FROM THE COUNCIL CONTINGENCY FUND. Councilmember Dawson commented the old fashioned 4th of July was a great event that brought many people to the community. She was glad the Council was able to assist with maintaining this great tradition. Councilmember Plunkett pointed out the City used to contribute in -kind approximately $1.6,000 in police and fire services which the City is no longer able to do. Therefore a $2,000 donation was a modest amount to assist with this great event. MOTION CARRIED UNANIMOUSLY. PFD Request 4. PRESENTATION OF A REQUEST FOR A LOAN GUARANTEE FOR THE EDMONDS PUBLIC for Loan FACILITIES DISTRICT CENTER (PFD) FOR THE ARTS CONSTRUCTION, AND Guarantee DISCUSSION OF THE CITY RISK ANALYSIS. (A) PRESENTATION OF REQUEST Dave Earling, PFD Board Member, explained the PFD has raised $14.5 million for this project to date in one of the three largest fundraising efforts in South Snohomish County. The delay in beginning construction of the project costs the PFD approximately $65,000 — 70,000 per month. Due to the Edmonds City Council ApprovedMinutes June 21, 2005 Page 2 continual increase in labor and materials, the PFD would like to begin construction on the project late summer /early fall. To that end, the PFD is seeking a guarantee for a construction loan to be paid by the PFD to allow construction to begin on this project. He clarified the PFD was not asking to borrow money from the City, the PFD was asking the City to guarantee a loan that the PFD would obtain; with the City's guarantee, the PFD had the ability to obtain a lower interest rate. Mr. Earling relayed the PFD'S request for a loan guarantee in the amount of $7 million. He explained the PFD did not plan to borrow that full amount; as a construction loan, the PFD would draw funds as needed during the project. In addition, the PFD had approximately $3.3 million in outstanding cash commitments including $1 million from the State, $560,000 from Snohomish County (FACE), $900,000 in individual and corporate donations, and $370,000 in federal grants. Much of these funds would be received in the next several months; however, waiting for those funds would delay the project which costs the PFD approximately $70,000 per month. Mr. Earling reviewed a list of features that had been included in the bid package following discussions with the architects and community representatives: complete theatrical lighting system, complete sound systems, video system, stage and acoustical curtains, orchestra pit cover, musical needs such as a piano, dressing room makeup tables, lobby furniture, stagehand equipment, and upgrades to the old south gymnasium. Mr. Earling reiterated the City's loan guarantee would reduce the PFD's interest costs; the PFD would pay interest, debt service, finance charges and principle. He looked forward to the completion of the Edmonds Center for the Arts project, commenting the PFD would not have been able to raise $14.5 million if this were not a project wanted by the community. Kjris Lund, PFD Project Manager, introduced Scott Bastiani, Sellen Construction Project Manager, who his worked with the PFD to reduce costs for this project. She also introduced Dave Dolacky, Theater /Technical Director, Edmonds School District and Mountlake Terrace High School Theater, who has volunteered his time to address technical issues regarding the theater. Ms. Lund recognized PFD Board Member Kay Mahaffey for her assistance with furniture and equipment and Board Member John McGibbon for his assistance with the financing plan. Ms. Lund explained this was originally a $1.6.3 million project; at the time the business plan was prepared, approximately $1 million for the theater interior (seats, lighting, technical equipment, etc.) was eliminated in an effort to meet that budget as well as meet the deadline for beginning the project. The project now includes all costs including the theater interior so that when the project is complete, the result will be a fully operational and competitive theater. She summarized the current cost estimate for the project was now $18.5 million. She displayed an architectural perspective of the lobby, explaining the renovations would include the removal of the offices and creation of a concession area, donor wall, and open space for mingling as well as for holding functions. She described the 90 space parking lot, ADA improvements, new wing to the north of the lobby with restrooms and elevator. Ms. Lund displayed a perspective of the theater interior, describing improvements that included increasing the rake of the seating, new seats, stage floor, rigging, lighting, stage and acoustical curtains, etc. She displayed a photograph of the seats to be installed in the theater with the donor plate attached to the back. Ms. Lund explained the loan guarantee would allow the PFD to enter into the bid and construction process sooner; the PFD was unable to sign a construction contract with Sellen without the availability of the funds. She advised the PFD planned a 5 -year construction loan with debt service only in the first years and a balloon payment at the end of the five years. She reiterated the PFD would only draw from Edmonds City Council ApprovedMinutes June 21, 2005 Page 3 the construction loan as needed and the PFD expected to receive over $1 million in the next several months once appropriate documentation was completed. She expected the PFD would not need to draw more than $4.5 million but was seeking a loan guarantee for the full amount to provide the necessary flexibility. Ms. Lund commented the PFD had a number of conditions on their work and had been able to honor them all. She reminded of the PFD's success in a tremendous amount of fundraising to date, acknowledging the PFD still needed to raise $4.5 million. She advised the plan for raising those funds that was provided to the Council at the retreat has been updated with new information that shows the PFD has strong prospects in the public sector for another $4.5 million including additional federal funds, a FEMA program, grants for the arts at the state level, and several private sector foundations and individuals. She concluded once the construction documents were completed, the PFD would again focus on fundraising activities. If the Council approved the loan guarantee, the PFD expected to break ground late summer /early fall. (B) FINANCIAL RISK ASSESSMENT Administrative Services Director Dan Clements reviewed the PFD's request for a loan guarantee of a 5- year construction loan of up to $7 million. He explained the $7 million consisted of approximately $2.6 million in cash flow and $4.4 million in future fundraising. Therefore, essentially the City was being asked to provide a bridge loan for future fundraising efforts. Mr. Clements noted there were two exposures the City faced on this project First was annual operating deficits which were expected to range from $330,000 in the first year to $141,700 in year five. The PFD has a $500,000 reserve to offset operating deficits and the PFD proposes to meet future operating deficits via fundraising. He summarized this was an existing exposure. The second exposure was the capital campaign guarantee which was a $4.4 million potential exposure. The PFD plans to meet this via fundraising. He advised this was a new exposure. In response to a request by the Finance Committee, Mr. Clements advised staff prepared a number of risk assessment scenarios. First, if the PFD meets capital and operating goals, there is no risk. Second, if the PFD met its capital goal but in year three met only 50% of its operating deficit goal, there would be approximately a $96,000 exposure. In the third scenario the PFD raises 50% of its capital goal which equates to an exposure of $2.2 million or $153,000 per year. In the fourth scenario, the PFD raises no new capital, they walk away from the project and the assets are sold; the value of the building is $2.2 million thus the remaining exposure is $2.2 million or $153,000 per year. In the last scenario, the PFD raises no new capital and the assets are not sold, the exposure to the City would be $4.4 million or $306,000 per year. With regard to repayment options, Mr. Clements explained if the PFD were still functional, the City would request capital payments until permanent financing could be secured. If the City were required to provide funds, the source would be either General Funds or BEET. (C) LEGAL RISK ASSESSMENT City Attorney Scott Snyder commented this was not a legal risk assessment as much as it was a snapshot of the evolving nature of the City's commitment to this project and his assessment was intended to highlight the Council's policy decisions. He recalled this project began when the City created a separate legal entity, the Public Facility District, which had two advantages to the City, 1) creating a new funding source via collection of sales tax and 2) offered a firewall from financial or other liability associated with the project. When the PFD entered into an Interlocal Agreement between Snohomish County, the City of Edmonds and the Edmonds PFD, Snohomish County committed to provide sales tax proceeds to the Center and the City agreed to provide $1 million in cash and $1 million in REST. Edmonds City Council ApprovedMinutes June 21, 2005 Page 4 Mr. Snyder characterized the request for a loan guarantee as the last step in the evolution of the project, putting the City in full partnership from a legal perspective with the PFD. He explained via the loan guarantee, the Gty would guarantee the fundraising efforts of the PFD via the General Fund. He summarized this was the last policy step in the evolution of this project Councilmember Dawson commented the City needed to get something in return in order for this not to be a gift and asked what consideration the City would receive. Ms. Lund commented her understanding was the City would only be guaranteeing a loan that the PFD would pay. In the event of dissolution of the project, within the Interlocal. Agreement was aprovision that the City received a percentage of the ownership of the property. Mr. Snyder clarified this was not a lending of public funds for private purposes as both were governmental entities. He explained the value of the City's guarantee enhanced the viability of the project, ensuring it could move forward sooner, avoiding increased public costs, thereby reducing the risk that the project would fail and the City would have to sell the property. He acknowledged that the value of the asset, while enhanced for public purposes via this project, was not increased should the property be sold because its value would potentially be for development. Councilmember Dawson commented this was a public enterprise and it would be less expensive for the public if the City guaranteed the loan. She did not want the City to be in a situation like Spokane with their parking garage where the City gave but received nothing in return. She asked whether the City would recognize a further percentage of the asset via the loan guarantee. Mr. Snyder answered no. Councilmember Dawson asked whether Mr. Snyder was confident from a legal standpoint that the Council was on strong foundation if it provided the loan guarantee. Mr. Snyder acknowledged there was a valid public purpose. The Interlocal Cooperation Act offers opportunities for public entities to cooperate toward projects with mutual public benefit. Mr. Snyder commented because this was not a private enterprise, it differed from the Spokane situation which was a public /private partnership. He explained the loan guarantee provided a better opportunity for the public to realize the benefit of the facility, the source of consideration that would support an interlocal cooperation agreement for funding. Councilmember Dawson asked whether the City needed to realize additional benefit via providing the loan guarantee. Mr. Snyder answered he was unable to identify anything that would provide substantial financial value that had not already been committed to the City. Councilmember Dawson summarized the City already had as much interest in the project and the loan guarantee would make the project more viable. Mr. Snyder explained if the worst were to happen and the property was sold, the City would receive approximately 50% of the proceeds, a percentage that increases as fundraising progresses. Therefore, to the extent the costs can be reduced, it increased the value of the City's security. Ms. Lund explained in addition to the City's ownership percentage increasing as fundraising progresses, after 25 years, the City becomes the owners of the facility. She advised the PFD had a loan offer from a private firm at a higher interest rate. She noted a recent assessment indicated the value of the land had tripled. Councilmember Dawson asked whether this would be a union construction project to which Ms. Lund answered yes. Councilmember Plunkett asked whether the increased land value had been included in Mr. Clements' calculations. Mr. Clements advised his calculations valued the land at $4 million; the assessment was $4.2 million. Councilmember Plunkett asked whether in the worst case scenario, could the City hold the land thereby repeating the benefit of the increasing land value. Mr. Clements acknowledged that option Edmonds City Council ApprovedMinutes June 21, 2005 Page 5 could be considered. Mr. Snyder pointed out that would assume the City continued to pay the debt service; if not, the City would be obligated to sell the property and rezone it to the highest and best use. Councilmember Plunkett asked who was responsible for the operating deficits. Mr. Clements answered the PFD, explaining like most art organizations, their operations were not expected to generate 100% of their revenue and they planned to make up any deficit via fundraising. Councilmember Plunkett clarified the deficits were not the City's deficits and Mr. Clements agreed. Councilmember Plunkett asked why there was no staff recommendation. Mr. Clements answered staff was asked to provide a risk assessment. This item would be considered by the Council for action at the June 28 Council meeting. Mr. Snyder suggested before approving a loan guarantee, staff request an opinion from the City's Bond Counsel, Foster Pepper & Shefelman. Councilmember Wilson inquired about the impact on the construction schedule if the PFD was not able to obtain a loan guarantee from the City. Ms. Lund answered she would likely recommend the PFD Board consider the private loan offer and because of the significantly higher interest costs, cut programs from the budget. She explained she would likely recommend that route as a further delay would only increase the construction costs. Councilmember Wilson asked the difference in the interest rates. Mr. Clements estimated the interest rate for the private firm to be 6.5 -7% and the interest rate with the City guaranteeing the loan to be 4.5- 4.75 %. Councilmember Wilson asked whether there was any risk to delaying this project with regard to competitors in South Snohomish or North King Counties. Ms. Lund stated there was competition for funding with other PFDs in the region including the Museum of Flight which could be the beneficiary of additional funds from Snohomish County PFD were the Edmonds Center for the Arts (ECA) to fail. She commented the Lynnwood Convention Center has indicated a plan to build a performing arts facility. Councilmember Orvis asked whether it was easier to raise funds for a performing arts facility once it was under construction. Ms. Lund advised construction tours were the best way to do fundraising; construction was usually a highly successful phase for fundraising. Councilmember Moore congratulated Ms. Lund and the PFD for their work on the project, commenting it has been a joy to sit in on their meetings. She expected the ECA to be a sparkling jewel for Edmonds. Mr. Snyder highlighted the policy question before the Council, explaining if the Council's concern was avoiding downside risk and ensuring that the City was covered if this project fails, this was not something they should approve as it did not increase the underlying value of the land if the property were to be sold. If the Council was looking at the long -term best interest of the City and ensuring that the project had the greatest chance of being successful, they would want to approve it. He summarized the policy question . was downside risk versus ultimate success. Mr. Earling emphasized the reason for requesting the loan guarantee was to allow the project to move forward and save the taxpayers money. He pointed out the PFD had raised $14.5 million and he assured they would figure out a way to raise the remaining $4 million. Mayor Haakenson advised this was scheduled as a Consent Agenda item next week; if the Council wanted to have further discussion, he suggested they request Council President Marin schedule it as an Edmonds City Council ApprovedMinutes June 21, 2005 Page 6 agenda item. Councilmember Dawson requested the advice from the Bond Counsel be included in the packet and suggested the item remain on the Consent Agenda. Proposed 5. PUBLIC HEARING ON PROPOSED VACATION OF A PORTION OF THE PLATTED RIGHT - Vacation of Portion of OF -WAY OF 164rH STREET BETWEEN 72ND AVENUE WEST AND 75TH PLACE WEST Right of Way of 164th St. Councilmember Plunkett asked whether this item was quasi judicial or legislative. City Attorney Scott SW Snyder answered it was primarily a legislative decision; the courts gave enormous discretion and rarely interfered with Council decisions regarding variances. The only exception was leaving a property owner without access which was prohibited. He advised this item was not subject to the Appearance of Fairness Act. Mayor Haakenson suggested that while it was not subject to the Appearance of Fairness Act, any Councilmember who felt obligated could make a disclosure if he /she wished. Councilmember Plunkett advised he had a conversation with one of the parties, Diana Clay, on a completely different subject. They briefly touched on the fact that this public hearing was coming up and that the property owners had discussed slicing /dicing portions of the property and it was the assessment of both that the property owners were in agreement. Realizing this might be a quasi judicial matter, they agreed not to discuss it further. Development Services Director Duane Bowman displayed an aerial photograph identifying the right -of- way area on 164th Street SW between 72nd Avenue W on the east and 75th Place Won the west. He explained this project began in 2001 when discrepancies were discovered in the recorded surveys during the City's processing of a boundary line adjustment. He noted this was not unusual in the Meadowdale area for legal descriptions not to fit together. He identified Diana Clay's home and the point at which the right -of -way falls steeply over the hillside down to 75th Place W. He noted the 40 -foot right -of -way was not developed but the City had stormwater utilities in the corridor. At a community meeting held in mid -2002 at the Meadowdale Clubhouse to discuss the matter, it was agreed staff and the property owners should consider joint resolution to identify the location of the right - of -way. Although there were some discrepancies with east /west boundaries, tonight's public hearing was only with regard to where the right -of -way should be located. Although the logical solution was to locate the right -of -way where it was platted, the problem was the location shown on plat maps differs from the location on survey maps. The City entered into a joint partnership with the neighbors for a survey and preparation of legal descriptions. Mr. Bowman identified the land intended to be vacated on the south side which would establish the right - of -way where it was originally platted. To address the problem this created for the property owners on the north and the improvements they have installed, staff proposes to vacate property on the north side also. This would maintain a functional road He noted there was the potential for the City to vacate the entire 40 -foot right -of -way on a portion of 164th Street SW and retain stormwater easements. Mr. Bowman summarized staff was seeking direction from the Council to authorize staff to proceed with vacation. He noted an ordinance would also be required. He requested Council input regarding their interest in vacating the entire right -of -way. For Councilmember Plunkett, Mr. Bowman explained discussions with the neighbors have been with regard to realigning the right -of -way to the platted right -of -way via vacation of small slivers of property with the intent of making property owners whole. Following discussions with Public Works that indicated the undeveloped right -of -way from the breakpoint where it falls over the hill to the west was not needed other than utility easements, consideration was also given to vacating that portion of right -of -way. He clarified what was before the Council was vacating the slivers of property to the property owners Edmonds City Council ApprovedMinutes June 21, 2005 Page 7 along 164`' to realign the right -of -way. The vacation of the right -of -way to the west could be considered for future action. Councilmember Wilson commented moving the right -of -way line further to the north would increase the street setback for the property owners on the south. Mr. Bowman acknowledged the property owners on the south would gain property. Councilmember Wilson asked how the shift of the property line would be handled for the properties on the north, observing there appeared to be two houses that on the survey did not meet current street setbacks and now the property line would further decrease the setback and in one instance the right-of-way line would go through a residence. Mr. Snyder explained this was framed as a vacation, yet it really was an alternative to a quiet title action; in effect, the City was fixing where the road should be via a combination of quit claim deeds. He advised the City could not contend the house was legally nonconforming absent a quiet title action. Council President Marin commented it appeared this was a solution to a long-standing problem. He asked whether there were any negatives to this action. Mr. Bowman answered no, as the property owners on the south gained right -of -way and the properties on the north basically retained what they already had. Councilmember Moore referred to staff s recommendation not to require compensation. Mr. Bowman explained he did not recommend compensation as this was resolving a legal issue; furthermore, the right - of -way that would be vacated was very steep and was of no significant value to the City. Mayor Haakenson opened the public participation portion of the public hearing. Dick Sanderson, 7219 164th Place SW, Edmonds, commented during the last two years it was discovered what was thought to be the location of 164th Street SW was incorrect. Following meetings with the City, a solution was agreed to by the property owners in mid -2004. He requested a further legal matter be addressed and resolved at the same time and circulated information and photographs to the Council. He referred to the utilization of the right -of -way on their side of 164`h Street SW by Ms. Clay for a planter box. He recalled when he expressed his concern regarding the height of the planter box to the City, staff indicated as long as the planter box did not protrude over the City's curb, it was acceptable. He later realized the hedge Ms. Clay had planted extended across the back of their lot prohibiting access to the street. The City requested Ms. Clay provide access to their home from 164th Street SW which was eventually done. He later contacted staff due to concern with their inability to access their property from 164" , Mr. Bowman suggested they prepare an agreement and have it signed by all parties. He disagreed with this approach suggesting, 1) the City prepare any documents, 2) the documents should be in perpetuity so that they could be referred to in Form 17, 3) a matter affecting the legal rights of a property owner should be the City's responsibility, and 4) their request could be combined with the matter the Council was addressing to correct an historical error. Diana Clay, 7316164th Street SW, Edmonds, expressed her support for staff's proposal. She explained when they obtained their building permit, they applied for a variance of the required setback and were granted a 5 -foot setback allowing their home to be located 5 -feet from what the survey shows as the right - of -way line. Hearing no further public comment, Mayor Haakenson closed the public participation portion of the public hearing. Mr. Bowman explained the Council was considering a vacation of a portion of 164h Street SW right -of- way; the issue Mr. Sanderson raised was in regard to Ms. Clay obtaining permission to landscape in the right -of -way. If the vacation occurs, some of the landscaping would be on property in which the City would release their interest and Mr. Sanderson could remove the landscaping or work out an agreement Edmonds City Council ApprovedMinutes June 21, 2005 Page 8 with Ms. Clay to retain the improvements on the vacated property. He concluded this was a matter between the property owners. For Councilmember Plunkett, Mr. Bowman explained the City would vacate the slivers of property, thereby releasing its interest in the property. He advised the matter between Mr. Sanderson and Ms- would become a separate civil matter. Mr. Snyder advised the vacation could be conditional, in this instance it would be conditioned upon receipt of signed quit claim deeds. The ordinance would indicate the vacation would be recorded when the City received all the quit claim deeds which would be recorded at one time. Councilmember Dawson expressed her appreciation for Mr. Bowman's work, pointing out what his taking the time to work this out said about City staff. COUNCIL PRESIDENT MARIN MOVED, SECONDED BY COUNCILMEMBER MOORE, TO DIRECT THE CITY ATTORNEY TO PREPARE THE APPROPRIATE ORDINANCE TO ENACT THE STREET VACATION AND DIRECT MR. BOWMAN TO PROCEED WITH FURTHER DISCUSSION ON VACATION OF THE STEEPER PORTION. MOTION CARRIED UNANIMOUSLY. Esperance 6. DISCUSSION ON ESPERANCE ISLAND ANNEXATION Island Annexation Mayor Haakenson explained over the past six years he had been approached by many people living in the Esperance area who wanted to live within the Edmonds city limits. At the last Council retreat, Council directed staff to conduct due diligence to determine whether it would be advantageous for the City to pursue annexation of the Esperance area. He noted there was also an area to the north, between Edmonds and Mukilteo, with an Edmonds address requesting to be annexed for over six years; he has refused repeatedly because their infrastructure needs are so great it would bankrupt the city to make improvements in that area. Mayor Haakenson recalled staff held a community meeting in the Esperance area that was well attended. As promised, staff responded via email /letter to individual questions as well as mailed answers to all the questions to all residents of Esperance. He clarified the questions that were mailed to residents were questions raised at the community meeting and not questions staff developed. He explained one of the questions a resident of Esperance asked was whether the City would get rid of the mobile home park which he assured was not the City's intent or ability to do. Mayor Haakenson noted following the community meeting, it was obvious there were people who were opposed to annexation and since the community meeting several have written/emailed him. Fb has responded to each letter /email including offering to meet with them but no one has taken him up on his offer. In response to a statement made by someone in opposition that the City only wants to annex Esperance for their tax dollars to shore up budget shortfalls, he assured this was not true, the City did not have a budget shortfall and could continue to operate without Esperance. In response to another comment that Esperance residents don't want Edmonds zoning, he reiterated any annexed area maintained zoning comparable to Snohomish County zoning. In response to the argument that the City's taxes are higher than Snohomish County, he pointed out this was not the case, taxes and fees combined were either less or at least even. He summarized the City believed it could deliver services with better customer service and less expensively than Snohomish County. Mayor Haakenson referred to the classic objection he has heard, that Edmonds' rules and regulations make sense for downtown but Esperance is a sedate residential area. He assured Seaview, Meadowdale, Forest Glen and many other areas of Edmonds were sedate residential areas and that the rules that Edmonds City Council ApprovedMinutes June 21, 2005 Page 9 governed downtown were not the same as in residential neighborhoods. He assured Edmonds wanted to maintain the quality of life that residents of the Esperance area currently enjoy and did not want to change anything in the neighborhood other than to make it better. He summarized staff brought forth this discussion on behalf of the residents who want to be annexed into Edmonds. In the end, the Council would make the decision whether to proceed. He reiterated the promise he made to those attending the community meeting, if this attempt failed, he would ensure there would be no further effort to annex Esperance as long as he was mayor. He concluded he had no vested interest in the Esperance annexation and the City could continue just fine without Esperance, acknowledging there likely were many who believed that Esperance could continue just fine without Edmonds. Administrative Services Director Dan Clements explained an initial fiscal impact analysis of a possible Esperance annexation was prepared in February 2005. Since that time, staff has received clarification and input on the following five additional issues that should be included in the analysis: 1. Olympic View Franchise Revenue— Olympic View Water District passes on costs associated with the City's franchise agreement directly to customers. As a result, the City would receive an estimated $35,600 in franchise revenue and an a -wrage residential user would pay an additional $32 annually. 2. Edmonds Police Costs — after reviewing incident reports for the City and Esperance, staff estimates overall calls for service would increase 6 %. In order to retain the same level of service, it is estimated that $460,000 would be needed for police activities. 3. Street Lighting Costs — Esperance residents presently pay $18 annually for street lights. If the area were annexed, this cost would be transferred to the City. The annual cost impact to the City is estimated to be $25,000. 4. Storm Water Charges — If Esperance were to annex to the City, the annual county charge of $65 per residence would be replaced by the City's $80.76 annual fee. Residents would see their stormwater bill increase $15.76 annually. 5. Fire District I Bonds — City staff were informed that upon annexation the property tax assessment for voter approved fire district bonds would remain. Since one bond is retired in 2006, the annual estimate for property owners is approximately $47. Mr. Clements displayed and reviewed the impact the above factors would have on the operating cost pro- forma, explaining they would reduce the operating surplus in year one to $280,000 (compared to the previously calculated operating surplus for year one of $653,395) and $498,606 in year two (compared to the previous operating surplus for year two of $882,000). Mr. Clements recalled Esperance was discussed at each of the Council Committee meetings last Tuesday. In response to a request by the Finance Committee for information regarding election costs, he provided a preliminary estimate of $60,000; he was also exploring the possibility of a mail -only ballot which could be considerably less expensive. Mr. Clements displayed and reviewed a table describing the impact on an average resident, explaining the difference in property taxes was approximately $282 less per year for an average household to be in the City and utilities and other taxes were approximately $194 more per year. The total was approximately 7% less to be in the City than in unincorporated Snohomish County. Development Services Director Duane Bowman described the processes available for annexation. First, the legislature recently approved allowing annexation of islands via an Interlocal Agreement which requires a series of public hearings. The Council could then pass an annexation ordinance to annex the area; however, a 45 -day referendum period would follow adoption of the ordinance during which 15% of people who voted in the last general election could submit a petition forcing an election. Another method Edmonds City Council ApprovedMinutes June 21, 2005 Page 10 would be for the Council to pass a resolution to initiate annexation by election. He advised there were other methods available to residents to petition for annexation. The primary cptions available to the Council were island annexation via Interlocal Agreement with Snohomish County or annexation by election. Mr. Bowman reported Public Works compared the infrastructure in Esperance area with information . available from Snohomish County. There are 9.34 miles of public roads in the Esperance area of which 6 miles are in poor condition as rated by Public Works. Assuming a cost of $150,000- $155,000 per mile for a street overlay, the cost to overlay the 6 miles of roads in poor condition would be approximately $930,000. Assuming that the Council wanted to consider using 50% of the operating surplus for capital improvements in the Esperance area, there would be approximately $300,000 available for capital improvements. With regard to stormwater improvements, funds paid into the stormwater utility could be used for future stormwater projects in the area. He recalled there were concerns expressed at the community meeting regarding issues with stormwater in the Esperance area. Mayor Haakenson asked what recourse would individual residents of Esperance have who wanted to be annexed to Edmonds if the Council decided not to pursue annexation or the vote to annex was not approved. Mr. Bowman answered neighborhoods adjacent to the City limits could pursue a petition process to annex to the City. Mayor Haakenson asked staff to comment on what the future held for Esperance if the City did not annex the area. Mr. Bowman answered they would continue to be subject to Snohomish County's rules, regulations and planning for the area. He advised Snohomish County designates that area as low density urban of 6-1.2 units per acre, hence the parcel by parcel low density multiple residential rezones that are occurring. He recalled raising the issue of rezones within an R8400 with Snohomish County which Snohomish County staff advised him was consistent with their Comprehensive Plan. Mayor Haakenson inquired about what recourse the residents of Esperance would have if one day Snohomish County no longer wanted governance over that area. Mr. Bowman answered likely they would approach the City to annex the area. Mayor Haakenson asked whether county government has done that in the recent past. Mr. Bowman advised Snohomish County has indicated this was the type of area they would like to have annexed by cities because of their inability to provide urban services. Councilmember Orvis commented the $60,000 estimate for an election seemed high for only five precincts. Mr. Clements agreed, explaining that was why he was exploring the mailed ballot. Councilmember Dawson agreed the election cost seemed high, commenting that may not be a correct estimate for an election in only that area. Mr. Clements advised staff had calls in to the elections department and would provide better estimates in the future. Councilmember Dawson commented if the Council proceeded with the island annexation, it would only take 15% of those who voted in the last election to trigger an election. She asked how many residents would represent 15 %. Mr. Clements answered there were approximately 3500 residents of which he estimated 1000 -1200 were registered voters. Councilmember Dawson concluded less than 200 signatures would be required to trigger an election. Councilmember Dawson asked how many people needed to sign a petition to trigger an election via the petition method. Mr. Bowman answered he believed it was 10% to initiate an annexation and 60% to complete the annexation via petition. If the Council chose the election method, Mr. Bowman advised only a majority vote in favor was required He remarked the petition method was very difficult, citing his personal experience leading the citizen annexation of Canyon Park area in Bothell, the largest citizen annexation in the State. Edmonds City Council ApprovedMinutes June 21, 2005 Page 11 Councilmember Dawson inquired what information was available regarding the infrastructure in Esperance in addition to roads, stormwater and parks. Mr. Bowman answered water and sewer would continue to be provided by Olympic View Water and Sewer District. The biggest issues staff identified are stormwater and streets. Staff has been working to get information from Snohomish County regarding stormwater; typically there would be one large project and a number of smaller projects. Based on previous experience in annexed areas, staff projected expenditures of $100,000 for stormwater projects due to the differences between city and county drainage standards. Councilmember Dawson referred to the 6 miles of roads in the Esperance area that were determined to be in poor condition and would need to be upgraded upon annexation. Mr. Bowman responded they were not in imminent danger but would need to be addressed soon. Councilmember Dawson inquired how many miles of roadway in the City were currently in poor condition. Traffic Engineer Darrell Smith stated approximately 1/3 of the 138 miles of roadway in the City were in poor condition. Councilmember Dawson clarified there were more miles in the City now that were in poor condition than there were in Esperance. Mr. Smith agreed. Councilmember Dawson asked why consideration would be given to upgrading roads in Esperance if the area were annexed and the same was not being considered for existing roads in the City. Mayor Haakenson answered the City would use the taxes collected from the Esperance area to do the overlay. Councilmember Dawson questioned why the City would provide an incentive for Esperance to annex that would not be provided to existing residents. Mr. Bowman remarked this was a policy decision for the Council. Councilmember Dawson asked whether the roads in Esperance were any worse than the roads elsewhere in the City. Mr. Bowman answered they were generally in about the same condition but there were some that were in poor condition that needed to be addressed. Councilmember Dawson noted counties have already been talking with cities that surround islands about reverse contracting for services. She asked whether Snohomish County had had similar discussions with Edmonds such as for police services. She noted residents of Esperance may have the City providing services in the future even if they did not annex via Snohomish County contracting with the City for services. Police Chief David Stern answered this was in the exploratory stage. He was approached by Snohomish County Sheriff Bart regarding the City's interest in reverse contracting whereby Snohomish County would pay the City to police the Esperance area. He advised no money had yet been discussed and there were few details currently available. He agreed Snohomish County was considering paying cities to provide services in areas that were geographically difficult for Snohomish County to reach. Councilmember Dawson noted the annexation would be somewhat of a wash for the City, there would not be a huge financial benefit; if anything, the residents of Esperance would receive more benefit. She questioned why the City would want to annex the area if a majority of the residents were not in favor. She pointed out annexing the Esperance area provided little benefit to the existing City residents. Councilmember Dawson commented one of her concerns about annexing areas that did not want to be annexed was she did not want to add residents who may be hostile toward the City and things such as EMS levies. She inquired about Esperance's past history voting on such issues. Fire Chief Tom Tomberg answered the two levies Fire District 1 holds annually, a property tax of $1.50 per $1,000 of assessed valuation and an EMS levy $.50 per $1,000 were passed countywide. Councilmember Dawson asked whether the level of support could be determined by precinct. Chief Tomberg offered to research that with Fire District 1. Councilmember Dawson commented if it took so few people to petition for a referendum if the Council proceeded with island annexation, it hardly seemed worthwhile to force an annexation and it may be Edmonds City Council ApprovedMinutes June 21, 2005 Page 12 better to put the annexation to a vote. She was still uncertain whether it was in the best interest of existing City residents to undertake this annexation. Councilmember Orvis asked whether there would be another opportunity for Council consideration and a public hearing if the Council proceeded with the election method. Mr. Bowman answered the Council . would need to initiate the election nethod and the Council could hold a public hearing but was not obligated to. Council President Marin commented on the Hwy. 99 Task Force's efforts to determine what could be done along Hwy. 99 to enhance the community. He commented on the frustration of developing Hwy. 99 due the difficulty presented by multiple jurisdiction boundaries, pointing out a coordinated effort could enhance the neighborhood. He asked staff to comment on the findings of the Makers' study regarding access and ability to cross Hwy. 99 and development that could enhance the neighborhood. Mr. Bowman explained one of the issues is coordinating access via aggregating parcels. He pointed out one of the difficulties with development on Hwy. 99 was the lack of controlled intersections between 238"' and 228t" which made it extremely difficult for pedestrians to cross. The City has entered into an Interlocal Agreement with Community Transit on a traffic signal analysis on Hwy. 99 in this area. The largest redevelopment occurring in that corridor is the construction of the new Les Schwab store, located in an unincorporated area of Snohomish County; the property owner is interested in annexing to Edmonds. Mayor Haakenson asked whether that property owner could petition to be annexed to the City. Mr. Bowman answered they could, however, the Boundary Review Board frowned on cities taking only the commercial areas and leaving the residential areas. Councilmember Moore asked how close cost estimates had been in previous annexations. Mr. Bowman answered staff was not able to find exact figures but recalled that stormwater improvements tend to be greater than anticipated which he assumed would be the case for Esperance particularly as residents have commented on stormwater issues. He advised staff would work with Snohomish County to determine what needs they had identified as well as learn from residents what problems exist. Councilmember Moore asked whether the road improvements included sidewalks. Mr. Bowman answered no, it was only for overlays. He noted there was a major road project in the area, 84th Avenue, that the City would like to work on cooperatively with Snohomish County. Councilmember Moore asked whether the operating surplus that staff identified on the Operating Cost Pro -Forma included administrative overhead. Mr. Clements answered the analysis was direct costs; he did not anticipate overhead costs would increase with annexation. Councilmember Moore clarified it would be beneficial to residents to be annexed to the City and a wash or slight risk for the City. Mr. Clements pointed out another benefit was a more coordinated effort with regard to development on the Hwy. 99 corridor. Councilmember Orvis asked whether mini casinos were allowed in unincorporated Snohomish. County. Mr. Clements answered he believed they were. Councilmember Orvis observed annexation would ban casinos. Mr. Snyder agreed. Councilmember Wilson referred to discussions regarding establishing a policy of reinvesting the operating policy in capital projects in the Esperance area and asked whether the Council could bind future Councils to that policy. Mr. Snyder answered no. Edmonds City Council ApprovedMinutes June 21, 2005 Page 13 Councilmember Olson recalled at the Finance Committee, some residents stated Esperance was a rural area and they wanted to keep it that way. They also commented on the perception that the City was in cahoots with the developer who cut the trees on the property above Marina Beach and had told the developer the trees had to be maintained at a certain height so as not to block views. Mr. Bowman responded the City did not specify the tree height; the developer was required to replant the area and allow vegetation to reclaim the slope. Further, the developer paid a substantial fine and was obligated to a 3 -year vegetation mantenance program with quarterly reports. Councilmember Moore commented reinvesting the taxes collected from the Esperance area was similar to subarea equity. She questioned whether other neighborhoods could ask for the same consideration. Mr. Snyder agreed they could. Councilmember Moore commented it seemed like a counterproductive way for the City to operate. Mr. Snyder commented nearly any annual budget decision could be changed during the next annual budget. Councilmember Wilson inquired about time stipulation for proceeding with an election if the Council chose the election method annexation. Mr. Bowman advised there were specific timelines and a process to be followed If the Council was interested in pursuing annexation, he sought direction regarding which method the Council was most interested in, advising staff would then return with a timeline scenario. He explained if the Council chose to pursue the island annexation process via an Interlocal Agreement, the Council would need to pass a resolution to initiate that discussion with Snohomish County. Once the resolution was passed, the City would have six months to develop the Interlocal Agreement and the six months period could be extended. Once the Interlocal Agreement was passed, the Council could pass an ordinance annexing the area which would then establish the 45 day referendum period during which signatures to trigger an election could be gathered. He anticipated pre - annexation zoning would be built into the process which requires a specific public hearing process. Councilmember Wilson asked whether the island annexation method would be reviewed by the Boundary Review Board. Mr. Bowman answered yes although it would be more of a formality; if the City had reached an Interlocal Agreement with Snohomish County, most issues would have already been addressed. Councilmember Dawson asked who paid for the election. Mr. Bowman answered in any case, unless the City made an arrangement with Snohomish County to share in the cost, the City would pay for the election. Councilmember Wilson asked whether there was any bonded indebtedness that Esperance would be responsible for upon annexation. Mr. Clements answered yes. Councilmember Wilson noted there would be two issues on the ballot, annexation and assuming bonded indebtedness. He recalled if a majority of residents voted in favor of annexation but turned down the assumption of bonded indebtedness, the Council could decline annexation. Mayor Haakenson recalled in three annexations in the late 1990's it was clear that the City would not accept annexation without the area assuming the bonded indebtedness. He pointed out if the Esperance area were annexed and assumed bonded indebtedness, the assessment for existing residents would be reduced. Councilmember Orvis expressed his support for annexation of the Esperance area via election method citing the benefits to development on Hwy. 99 and to residents of Esperance, and because that method set a more inviting tone to the residents of Esperance. Councilmember Moore commented she was leaning toward the island annexation method due to the public hearings that method would require which the election method did not require. Edmonds City Council ApprovedMinutes June 21, 2005 Page 14 Mayor Haakenson asked whether the bonded indebtedness was included in the online calculator. Mr. Clements answered yes. Council President Marin commented he had also been leaning toward the island annexation method, however, he agreed with Councilmember Orvis that the message should be that the City was eager to welcome this neighborhood to the City and therefore he would support the election method. Councilmember Dawson commented she had no interest in the island annexation method as she anticipated an election would be required and she felt the Esperance residents deserved to be able to vote on whether they wanted to be annexed. She commented there appeared to be advantages to residents of the Esperance area but she found few advantages for existing Edmonds residents. Before moving forward with an election, she wanted to give existing residents an opportunity to voice their opinion regarding whether they wanted to take on this area. While she appreciated the desire to be welcoming to Esperance, she was hesitant to offer improvements to Esperance that could not be offered to existing residents who paid taxes to support the City's infrastructure. Councilmember Wilson commented he had been leaning toward the island annexation method due to the ability to negotiate concessions with Snohomish County particularly in view of their interest in relieving themselves of the cost of providing services to this area but could also support the election method. If the Esperance residents voted to assume bonded indebtedness, the assessment to existing residents would be reduced which was a benefit. He commented without prior annexations, the City would not be discussing acquiring the former Woodway Elementary school property for a park. Councilmember Olson favored the election method, recalling during the siting of Brightwater, many were frustrated with their inability to vote on the matter. Councilmember Moore also expressed her support for the election method provided public hearings were held. Councilmember Orvis agreed. COUNCILMEMBER ORVIS MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, TO DIRECT STAFF TO PURSUE ESPERANCE ANNEXATION VIA THE ELECTION PROCESS AND BRING IT BACK FOR AT LEAST ONE PUBLIC HEARING. Councilmember Dawson wanted to ensure existing residents had an opportunity to comment during at least one, possibly several, public hearings before the Council committed to an election because annexation would impact existing residents but they would not have an opportunity to vote on the matter. Councilmember Orvis clarified the intent of the motion was to hold the public hearing prior to the Council committing to an election. Councilmember Wilson clarified a public hearing would be held on a resolution declaring the Council's intent to pursue annexation via the election method. MOTION CARRIED UNANIMOUSLY. Mayor Haakenson declared a brief recess. Six Year 7. PUBLIC HEARING ON THE SIX YEAR TRANSPORTATION IMPROVEMENT PROGRAM Transporta$o AND PROPOSED RESOLUTION ADOPTING THE SIX -YEAR TRANSPORTATION Improvement Program IMPROVEMENT PROGRAM (TIP) AND DIRECTING THE SAME TO BE FILED WITH THE STATE SECRETARY OF TRANSPORTATION AND THE TRANSPORTATION IMPROVEMENT BOARD Traffic Engineer Darrell Smith explained the State TIP requirements were governed by RCWs which required the City update the TIP each year by July 1. The TIP must contain all regionally significant Edmonds City Council ApprovedMinutes June 21, 2005 Page 15 projects the City planned to undertake in the next six years; Edmonds has traditionally included all transportation projects in the TIP. He explained each jurisdictions' TIPS were then used to create a statewide TIP. Mr. Smith explained the TIP was required to be financially constrained in the first three years; the last three years were not required to be financially constrained. Projects not identified on the TI.P were not eligible for state and federal grant funding, therefore, he encouraged the Council to include any projects that had the potential for grant funding in the latter three years of the TIP. He relayed staff's recommendation that the Council approve the Six -Year TIP and adopt the resolution. Mayor Haakenson opened the public participation portion of the public hearing. Hank Moravec, 915 Olympic Avenue, Edmonds, expressed his concern with the diminished funding for transportation infrastructure reflected in the TIP. He pointed out a comparison of this year's TIP with last year's revealed most expenditures were delayed and nothing much was being done. He noted expenditures from Fund 112 in 2005 were nearly zero. Typically the overlay cycle was 30 -40 years; with the funding in 2005 -2007, the overlay cycle was extended to nearly 70 years. He referred to the overlay on Olympic Avenue 5-6 years ago, remarking that his adult children would not see another overlay in their lifetime; it would not be until his grandchildren were his age that Olympic Avenue would have another overlay. He encouraged the Council to identify ways to fund infrastructure costs. Roger Hertrich, 1020 Puget Drive, Edmonds, pointed out there was little money budgeted for engineering in the six years covered by the TIP, yet the City was paying a $1.00,000 salary for a Traffic Engineer who had little work to do. He acknowledged Mr. Smith answered citizen questions and did other work but for the amount of work that required an engineer, in his opinion the City was spending their money in the wrong way. Don Kreiman, 24006 95"' Place W, Edmonds, commented he had been assisted by the City's Traffic Engineer, Darrell Smith, who also writes grants and he is worth every penny the City pays him. Next, Mr. Kreiman recalled two years ago the Council voted to place a levy on the ballot which the voters turned down, preferring the City identify other ways to fund items. He commented there were certain things the Council was responsible for funding first — fire, police, and road and building maintenance. He pointed out city bikeway and walkway projects were unfunded until 2009 and they were only included in the TIP in the event grant funds became available. He commented the State recently approved a $58 million grant for safe routes to school program, yet Edmonds could not obtain any of these funds because it did not have the matching funds. He pointed out other projects that were unfunded until 2009 including citywide signal controllers, neighborhood traffic calming, and school zone improvements. The only street overlays in 2006 were in areas that were being done in association with water main replacement. He reminded the Council it was their responsibility to identify funds for basic infrastructure needs. Hearing no further public comment, Mayor Haakenson closed the public participation portion of the public hearing and remanded to Council for action. Mr. Smith reviewed accomplishments during the last year, assuring the Engineering Department consistently worked very long hours: ? 76"' overlay funded via a federal grant and Fund 112 ? 96" Avenue walkway funded via a state grant ? Scaled back 2004 overlay program funded via the utility fund and Fund 112 ? Award of the 226h Street project funded via state and federal grants ? Significant progress in design of 1001b Avenue stabilization project and interurban trail project Edmonds City Council ApprovedMinutes June 21, 2005 Page 16 Mayor Haakenson asked staff to remind the audience why the City did not have money to fund transportation projects. Mr. Smith answered I -776 resulted in the loss of approximately 33 -40% of the City's transportation funding which also nearly completely eliminated the ability for the City to secure grants due to the inability to provide the local match. Mayor Haakenson asked whether the Engineering staff had submitted potential revenue sources to the Council. Mr. Smith answered staff had provided analysis of 13 options for additional funding for transportation programs, via taxes as well as other methods. Mayor Haakenson concluded thus far no additional funding had been identified. Councilmember Wilson inquired about the annual loss of revenue to the City via initiatives. Mr. Smith answered via I -776, the City lost approximately $350,000 per year in 2002 dollars. Mayor Haakenson advised the 1% property tax cap generated less than $100,000 per year. Councilmember Wilson concluded there would need to be dramatic cuts in other programs and services if the Council wanted to backfill the loss of revenue via I -776. He was interested in citizens' suggestion for cuts in services and programs to make up for the lost revenue. He expressed his appreciation to Mr. Smith for his efforts. Res #(>Z 109 Six Year I COUNCIL PRESIDENT MARIN MOVED, SECONDED BY COUNCILMEMBER MOORE, FOR ITransportatior� APPROVAL OF THE SIX YEAR TIP AND ADOPTION OF RESOLUTION NO. 1097 AND Improvement II AUTHORIZE THE RECORDING OF THE DOCUMENT BY THE CITY CLERK. Proeram Council President Mann added his compliments to the engineering staff for all the work they do. Councilmember Plunkett also provided his compliments to the engineering staff. He recalled 5-6 years ago when the City did not have a Traffic Engineer, the engineering staff did not have time to respond to citizens' individual concerns regarding stop signs, sidewalks, mailboxes too close to the street, etc. He noted Mr. Smith had a great reputation in the community for responding to citizens. He recalled Mr. Smith's efforts to resolve a situation where residents of a neighborhood had to stand in the street on a blind curve to retrieve their mail, commenting there were innumerable examples of how Mr. Smith had worked with individuals to resolve concerns in addition to his engineering tasks. Councilmember Moore appreciated citizens' concerns regarding the lack of funding, pointing out they could not be any more concerned than the Councilmembers in every city who were affected by funding cuts. She hoped once the State legislature made it possible for the City to levy a street utility tax or other funding mechanism, these citizens would be the first to support such measures. Councilmember Orvis echoed the compliments regarding Mr. Smith. MOTION CARRIED UNANIMOUSLY. Extend Ord# 3530, zoning 8. PUBLIC HEARING ON EXTENSION OF ORDINANCE NO. 3530, A ZONING MORATORIUM, Moratorium, ON THE ACCEPTANCE OF ARCHITECTURAL DESIGN BOARD APPLICATIONS OR Related to BUILDING PERMIT APPLICATIONS NOT OTHERWISE VESTED PURSUANT TO STATE Modulated Design and LAW PRIOR TO DATE OF ENACTMENT OF THIS ORDINANCE, WHICH SEEK TO UTILIZE Increased MODULATED DESIGN IN ORDER TO OBTAIN A BUILDING HEIGHT IN EXCESS OF THE Height TWENTY -FIVE FOOT HEIGHT LIMITATION ESTABLISHED BY ECDC 16.50.0200(2). ,(EFFECTIVE DATE OF ORDINANCE NO. 3530 IS 1/11/05; EXPIRES 7/11/05.) Mr. Bowman explained this public hearing was necessary to extend the ordinance. He recalled the Council has had discussion regarding downtown regulations and would be having discussion regarding Design Guidelines at their June 28 meeting. He anticipated resolution would be reached within the six month extension. He recommended adoption of the proposed ordinance extending Ordinance No. 3530. Edmonds City Council ApprovedMinutes June 21, 2005 Page 17 Couneilmember Dawson commented the affect of this ordinance was to allow buildings of 25 feet or lower. Given that the Council has already expressed their intent not to allow building modulation to achieve an additional 5 feet, she asked whether the Council could state there was a 25 -foot height limit rather than extending the ordinance. City Attorney Scott Snyder advised the Planning Board would still need to hold a public hearing and provide a recommendation to the Council followed by a public hearing at the Council. Mr. Bowman explained extending the moratorium was the cleanest way to handle the matter. Councilmember Wilson asked if there were any vested applications. Mr. Bowman gave an example of the McGregor building being constructed on the southeast corner of 5`' and Walnut. Mayor Haakenson opened the public participation portion of the public hearing. Roger Hertrich, 1020 Puget Drive, Edmonds, read the following from the January 18, 2005 minutes, "The other issue the judge raised was with regard to Sections 20.10.070.C.3 and a sentence in the ADB ordinance that applies to all ADB applications, not just the downtown corridor. The argument made before the ADB, City Council and judge was that view could include the right to light, air and protection of private views. The code refers to the imposition of special heights limits when necessary to protect views from surrounding properties of substantial view blockage. The City has an obligation in the ADB process to give clear direction to the applicant; however, "view, " "surrounding property" or "substantial view blockage" are not defined in the code. Staff's concern in honoring and applying the judge's decision is it has never been applied, the terms are not defined and the ADB has consistently excluded the concept of shadowing," questioning whether this applied to height variances over 25 feet in a PRD. Next, he anticipated the referral to the Planning Board for review and recommendation to the Council would take longer than six months. Norma Bruns, 960 5t" Avenue S, Edmonds, urged the Council to follow Planning staff's recommendation to extend the moratorium, fording that to be a wise decision given the state of flux that the height issue was in. Hearing no further public comment, Mayor Haakenson closed the public participation portion of the public hearing. Ora# COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCIL PRESIDENT MARIN, TO Extending ding Ord# 3530, ADOPT THE ORDINANCE NO. 3555, EXTENDING ORDINANCE NO. 3530, A ZONING Zoning MORATORIUM, ON THE ACCEPTANCE OF ARCHITECTURAL DESIGN BOARD Moratorium Related to APPLICATIONS OR BUILDING PERMIT APPLICATIONS NOT OTHERWISE VESTED Modulated PURSUANT TO STATE LAW PRIOR TO DATE OF ENACTMENT OF THIS ORDINANCE, Design and WHICH SEEK TO UTILIZE MODULATED DESIGN IN ORDER TO OBTAIN A BUILDING Increased Height HEIGHT IN EXCESS OF THE TWENTY-FIVE FOOT HEIGHT LIMITATION ESTABLISHED BY ECDC 16.50.020(A)(2). MOTION CARRIED UNANIMOUSLY. COUNCIL PRESIDENT MARIN MOVED, SECONDED BY COUNCILMEMBER WILSON, TO EXTEND THE MEETING 20 MINUTES. MOTION CARRIED UNANIMOUSLY. Extending 9. PUBLIC HEARING ON EXTENSION OF ORDINANCE NO 3532 A ZONING MORATORIUM Ord# 3532, ON THE APPLICATION OF ECDC 20.10.070(C)(3) RELATING TO THE IMPOSITION OF Zoning SPECIAL HEIGHT LIMITS TO PROTECT VIEWS. (EFFECTIVE DATE OF ORDINANCE NO. Moratorium 3532 IS 1/28/05, EXPIRES 7/28/05.) Related to Special Height Limits Mr. Bowman commented the extension of this ordinance addressed special height limits to protect views. to Protect He advised this issue would be addressed as part of Design Guidelines and zoning regulations, however, Views it could not be accomplished prior to the expiration of the moratorium. Edmonds City Council ApprovedMinutes June 21, 2005 Page 18 Councilmember Dawson wanted to ensure staff and the Planning Board would be considering how to clarify the ordinance to make it more workable rather than just eliminating the view blockage ordinance. Mr. Bowman advised a public process would be necessary as a code change would be required. Councilmember Dawson recalled she was opposed to this moratorium at the time it was adopted as she believed the terms in the ordinance could be clarified to make it a workable ordinance. City Attorney Scott Snyder explained staff and he agreed this issue was best discussed in the context of Design Guidelines. He pointed out the references in the Comprehensive Plan were to public views, therefore, Council direction regarding whether their interest was in protecting public or private views would need to be part of any future discussion. Mayor Haakenson opened the public participation portion of the public hearing. Hearing no public comment, Mayor Haakenson closed the public hearing and remanded to Council for action. Ord# 3556 Extending COUNCIL PRESIDENT MARIN MOVED, SECONDED BY COUNCILMEMBER MOORE, TO Ord# 3532, Zoning ADOPT THE ORDINANCE NO. 3556, EXTENDING ORDINANCE NO. 3532, A ZONING Moratorium MORATORIUM, ON THE APPLICATION OF ECDC 20.10.070(0)(3) RELATING TO THE Related to IMPOSITION OF SPECIAL HEIGHT LIMITS TO PROTECT VIEWS. Special Height Limits to protect Councilmember Dawson recalled she voted against the moratorium when it was originally adopted and Views would vote against the extension of the moratorium due to her certainty there were other options for the Council to clarify the ordinance and provide view protection. Councilmember Wilson pointed out the moratorium needed to be in place as no alternative /interim language had been proposed. Councilmember Dawson offered to provide language to the Council for consideration at the next Council meeting that would narrow the definition of view to meet the legally defensible standard. She recalled staff made two suggestions for interim solutions that would have provided some protection for view blockage; however, at that time the Council was unwilling to consider either option. She suggested this be scheduled as an agenda item prior to the expiration of the moratorium. Councilmember Plunkett inquired whether there were other alternatives in addition to the two options presented previously. Mr. Snyder recalled one option was to implement what the Planning Board had been doing which was to exclude shadowing and focus on views. His interest was whether the Council was referring to public or private views and whether the Council wanted to define view or view corridors. He pointed out views varied by neighborhood, a view to some may be a tree in the neighbor's yard, to others a view is of Puget Sound. Many cities define view corridors they want to preserve. Another question is since there is a moratorium on buildings over 25 feet, did this apply only to taller buildings. A further issue is although the ordinance has been in affect for years, it has never been enforced. Councilmember Plunkett commented the issue needed more conceptual work than could be accomplished prior to the expiration of the moratorium. MOTION CARRIED (6 -1), COUNCILMEMBER DAWSON OPPOSED. Authorization 10. PUBLIC HEARING REGARDING AUTHORIZATION TO APPLY FOR A GRANT FOR to Apply for a FEDERAL TRANSIT ADMINISTRATION 5309 FUNDS FOR A PROJECT KNOWN AS FTA Grant EDMONDS CROSSING WA -03 -0209. THE PUBLIC HEARING WILL ALSO RECEIVE Regarding COMMENTS ON THE ESTABLISHMENT OF A DISADVANTAGED BUSINESS ENTERPRISE Edmonds Crossing and PROGRAM. Establish DBE Program Community Services Director Stephen Clifton recalled at the June 7 meeting, he presented a brief update regarding the Edmonds Crossing project funds and costs. At that time he mentioned the Community Edmonds City Council ApprovedMinutes June 21, 2005 Page 19 Services Department had secured $6.5 million in federal appropriations and $10 million in state appropriations. He advised the federal appropriations were via Federal Transit Administration (FTA) 5309 Bus funds. When an entity receives these type of funds, they are required to follow certain requirements as part of administering and expending the funds. In this case the City was required to create a Disadvantaged Business Enterprise (DBE) Program. The City has been working with the state office of Minority and Women Business Enterprise to establish a base figure. This requires that 10% of the funds for work on the next phase of development, design and permitting, be paid to disadvantaged business enterprises. He advised the packet contained two resolutions, first an authorization to establish a DBE Program and the second to authorize staff to apply for the grant. He explained the process was the City was notified an appropriation was made, the City was then required to complete an application and create the required programs in order to receive the funds. He advised staff modeled the DBE program after a program recently created by Jefferson County Transit that was accepted by the FTA. Mr. Clifton recommended the Council authorize staff to submit the application to the FTA and authorize the establishment of a DBE Program. Councilmember Dawson asked whether the DBE avoided the problem encountered in the Western State Paving Co. case. Mr. Snyder answered no, explaining the Ninth Circuit court upheld the federal program because its goals were aspirational but struck down the state's program because the state had not proven that the set asides were properly proven on the basis of past discrimination. He clarified the City was caught — if the City wanted the money, it must adopt the program, if challenged the City would have the same problem the state encountered, how to prove that certain groups were disadvantaged. He noted this program would only apply to grant funds provided by FTA not City programs as a whole and was only for the design and permitting phase. Councilmember Dawson asked whether there was any way to craft something that would comply. Mr. Snyder commented the difficulty was the qth Circuit Court upheld the program but struck down how it Res# 1098 was applied. Mr. Snyder clarified if challenged, the City would not defend. Authorize Applying for FTA Funds, Mayor Haakenson opened the public participation portion of the public hearing and hearing no public Res# 1099 Adopt a comment, closed the public hearing. Disadvantaged Business Enterprise COUNCIL PRESIDENT MARIN MOVED, SECONDED BY COUNCILMEMBER MOORE, TO Program APPROVE RESOLUTION NO. 1098 AUTHORIZING STAFF TO APPLY FOR FEDERAL 117:1�G_ i11I_\ 110110 __ Y I [.L` 7cr ' . ILY,1lIL`L7.` Z�1�1:� RII f_. f.Yf N 11111WW[4_[I Q ADOPTING A DISADVANTAGED BUSINESS ENTERPRISE PROGRAM. MOTION CARRIED UNANIMOUSLY. 11. AUDIENCE COMMENTS Building on Wambolt, 530 Dayton Street, Edmonds, commented at the June 14 meeting, long -time proponents Heights of higher building heights, Councilmembers Marin, Moore and Olson, got their way when they were joined by Councilmember Wilson in passing measures to increase building heights in the BC zone. He noted the current maximum allowable height of a flat-roofed building in the core business area of Main Street & cth Avenue was 25 feet. The consultant the City retained, Mark Hinshaw, recommended not exceeding 25 feet in this area under any circumstances, yet the action taken by the four Councilmembers would allow flat roof buildings up to 30 feet if the buildings have first floor ceiling heights of 15 feet. Additionally, in adjacent areas, the maximum building height was increased from 30 feet to 33 feet when certain design elements were used. He concluded Councilmember Wilson's vote removed the gridlock on building heights, enabling heights to be increased. He referred to the cumbersome process of referring Edmonds City Council ApprovedMinutes June 21, 2005 Page 20 matters to the Planning Board for review and encouraged citizens who were opposed to increased heights to make their views known at the Planning Board's public hearings. Don Kreiman, 24006 95tt, Place W, Edmonds, referred to Councilmember Moore's comment that many cities were affected by I -776, pointing out that all other City Councils in the Puget Sound area took care of the problem except Edmonds. He doubted any other city had as long an overlay cycle as Edmonds, Building Heights reiterating that the Council had work to do in that area. With regard to heights, he recalled Mark Hinshaw, the Planning Board, the Heartland study as well as builders and property owners have said redevelopment would be halted if building heights are restricted to 25 feet. He concluded that by establishing 25 foot building heights in some areas, the Council decided there would be no development downtown, an area with the infrastructure to support new retail space. Roger Hertrich, 1020 Puget Drive, Edmonds, commended Councilmember Moore for her efforts with regard to the former Woodway Elementary School property. He also commended the other Woodway Elementary Councilmembers who agreed it was important to gather as much public land as possible. He recognized Council President Marin and Councilmember Wilson's hesitation but thanked them for supporting the first phase of acquiring the property. In his opinion, Mayor Haakenson was not happy with the Council's decision as he wanted to retain only two acres of the property. Rowena Miller, 8711 182nd Place SW, Edmonds, thanked the City for the International Migratory Bird Migratory I Day that the City co-sponsored on May 14. She recognized the efforts of Sally Lider, Environmental Bird Day Education Director, and Jennifer Gerend, Economic Development Director, observing this event attracted many visitors to the City. She encouraged the City to participate in the event again next year. Next, she woodway thanked the Council for beginning the process of acquiring the I1 acre Woodway Elementary School Elementary property. She then thanked the Council for hiring Mr. Hinshaw, commenting the way he explained architectural features and design made them understandable. She appreciated his recommendation that Building the City preserve its history and character, recalling he referred to downtown as a precious place where xeignt 25 -foot heights should be maintained. She urged the Council to adopt Mr. Hinshaw's map that included 25 -foot height limits downtown and in the Conservation District. She commented 25 -foot height limits in those areas would save downtown, retain the quality of life and keep it precious for future generations. 12. MAYOR'S COMMENTS Mayor Haakenson thanked Senior Executive Council Assistant Jana Spellman for providing the cookies and coffee in anticipation of a late meeting. 13. COUNCIL COMMENTS Councilmember Moore reported on the preview of a new ballet she attended, "Out of the Dust," choreographed by Daniel Wilkins, Pacific NW Ballet, that would soon premier in New York City before returning to Seattle. Councilmember Moore relayed City Attorney Scott Snyder's advice that the discussion regarding the former Woodway Elementary School property did not need to occur in Executive Session next week and could occur in open session. Mayor Haakenson advised he would confer with Mr. Snyder. Councilmember Olson reported on a new store on Main Street, the Cheese Monger, that sells a variety of cheese and breads. Edmonds City Council ApprovedMinutes June 21, 2005 Page 21 Councilmember Dawson reported on last weekend's Art Festival where she and many others volunteered. She thanked all the volunteers, explaining the Art Festival was an entirely volunteer production. She thanked her husband for his patience with her attending the Council meeting on their anniversary. Councilmember Plunkett reported on a thank-you fax the Council received for regulating the use of motorized scooters. He reported the federal government had recently completed a study on the increasing popularity of motorized scooters, a trend that was putting thousand of youngsters in hospital emergency rooms. Accidents resulted in approximately 10,000 emergency rooms visits from July 2003 to June 2004, two-thirds of injuries were to youth 15 and under. With no further business,the Council meeting was adjourned at 10:45 p.m. xitec-oetet, d G•1'Y iI ENSON,MAYOR SANDRA S. CHASE, CITY CLERK • 7 Edmonds City Council Approved Minutes June 21,2005 Page 22 Ali AGENDA ::* EDMONDS CITY COUNCIL ��� Council Chambers, Public Safety Complex 250 5th Avenue North 7:00 - 10:00 p.m. JUNE 21, 2005 7:00 p.m. - Call to Order/Flag Salute 1. Approval of Agenda 2. Consent Agenda Items (A) Roll Call (B) Approval of City Council Meeting Minutes of June 14, 2005. (C) Approval of claim checks #70276 through #80401 for the week of June 13, 2005, in the amount of$145,195.02.* *Information regarding claim checks may be viewed electronically at www.ci.edmonds.wa.us (D) Approval of 2005 Taxi License for North End Taxi. (E) Proposed Ordinance approving the rezone of certain real property located at the southwest corner of 76th Avenue W and 219th Street SW from Multi-Family Residential (RM-2.4) to General Commercial (CG-2) in accordance with File No. R-2004-129 and ADB-2004-132, and approving a Concomitant Zoning Agreement limiting the rights granted by such rezone. (F) Approval of Street Vacation for that portion of 219th Street SW lying east of 76th Avenue W and west of the Top Foods property. (G) Authorization for the Mayor to sign an Agreement with the Police Foundation regarding funding for the Edmonds Night Out event. (H) Authorization for the Fire Department to advertise for bids for a fire-rescue boat pending State grant approval. (Approved for the Consent Agenda by the Public Safety Committee.) (I) Treatment Plant Reorganization. (Approved for the Consent Agenda by the Finance Committee.) (J) Amend Ordinance No. 3528, Annual Salary Ordinance for Budget Year 2005, to reflect the 2005 L-5 Compensation Study for non-represented employees, and approval of the revised L-5 Salary Policy. Page 1 of 2 CITY COUNCIL MEETING AGENDA JUNE 21, 2005 3. ( 5 Min.) Request for funds for the Fourth of July Fireworks Display by the Greater Edmonds Chamber of Commerce. 4. (30 Min.) Presentation of a request for a loan guarantee for the Edmonds Public Facilities District Center for the Arts construction, and discussion of the City risk analysis. (A) Presentation of Request (B) Financial Risk Assessment (C) Legal Risk Assessment 5. (30 Min.) Public Hearing on proposed vacation of a portion of the platted right-of-way of 164" Street between 72nd Avenue West and 75th Place West. 6. (so Min.) Discussion on Esperance Island Annexation. 7. (15 Min.) Public Hearing on the Six Year Transportation Improvement Program and proposed Resolution adopting the Six-Year Transportation Improvement Program and directing the same to be filed with the State Secretary of Transportation and the Transportation Improvement Board. 8. (15 Min.) Public Hearing on extension of Ordinance No. 3530, a zoning moratorium, on the acceptance of Architectural Design Board applications or building permit applications not otherwise vested pursuant to State law prior to date of enactment of this ordinance, which seek to utilize modulated design in order to obtain a building height in excess of the twenty-five foot height limitation established by ECDC 16.50.020(A)(2). (Effective date of Ordinance No. 3530 is 1/11/05; expires 7/11/05.) 9. (15 Min.) Public Hearing on extension of Ordinance No. 3532, a zoning moratorium, on the application of ECDC 20.10.070(C)(3) relating to the imposition of special height limits to protect views. (Effective date of Ordinance No. 3532 is 1/28/05; expires 7/28/05.) 10. (20 Min.) Public Hearing regarding authorization to apply for a grant for Federal Transit Administration 5309 funds for a project known as Edmonds Crossing WA-03- 0209. The public hearing will also receive comments on the establishment of a Disadvantaged Business Enterprise Program. 11. Audience Comments (3 Minute Limit Per Person)* *Regarding matters not listed on the Agenda as Closed Record Review or as Public Hearings. 12. ( 5 Min.) Mayor's Comments 13. (15 Min.) Council Comments ADJOURN Parking and meeting rooms are accessible for persons with disabilities. Please contact the City Clerk at(425) 771-0245 with 24 hours advance notice for special accommodations. A delayed telecast of the meeting appears on cable television-Government Access Channel 21. Page 2 of 2