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2024-11-02 Council Special MinutesEDMONDS CITY COUNCIL SPECIAL MEETING APPROVED MINUTES November 2, 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 Kim Dunscombe, Acting Finance Director Beckie Peterson, Council Executive Assistant Jeff Taraday, City Attorney Scott Passey, City Clerk The Edmonds City Council meeting was called to order at 9 am by Mayor Rosen in the Brackett Room, 121 5"' Avenue North, Edmonds, and virtually. 2. ROLL CALL City Clerk Scott Passey called the roll. All elected officials were present. 3. APPROVAL OF AGENDA COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCIL PRESIDENT OLSON, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY. 4. COUNCIL BUSINESS 2025-2026 REVENUE WORKSHOP OVERVIEW Mayor Rosen reviewed the agenda, reminding no votes will be taken today, only consensus and if council wants to take action, that could be done at Monday's council meeting. Before presenting the revenue ideas, he wanted to present a series of seven what -if scenarios to give council a sense of how reliant the budget is on certain decisions the council will make as well as decisions the community will make and potential gaps to be filled. The intent of providing the seven what -if scenarios to council is background for the revenue discussion. He recognized during the discussion it will be tempting to talk about other things so those will be recorded in the "parking lot" for discussion during the budget workshop later on the agenda or at another time. He advised there are current 53 revenue ideas on the list, up from 28 in the budget presentation. Mayor Rosen continued, there aren't estimates for each revenue source; staff was faced with delaying the discussion due to the significant effort to make estimates and assumptions. There may be things that are not within the City's purview or ideas that are immediately off the table and preferences for items that rise to Edmonds City Council Approved Minutes November 2, 2024 Page 1 the top. Instead of giving equal value to all 53 ideas, there is value in reviewing the list. As the council reviews the list of revenue ideas, he will answer questions, ask councilmembers for other revenues ideas, eliminate ideas that are illegal or not within the City's authority, and then the council can prioritize the ideas. The last hour of today's meeting, the budget workshop, is intended to be much less structured. The council has received a great deal of information including the community survey, the scoring exercise, council priorities, draft budget, presentations from each department, and approximately 70 queries from councilmembers. The council has not had an opportunity to talk as a group, so the intent was to spend time today with less structure. Councilmember Paine asked if when the council discusses the options if there would be some estimates regarding the timeline to implement any of the revenue ideas. Mayor Rosen anticipated that would be the first action step. Councilmember Paine clarified she was interested in prioritizing the ideas and implementation strategies. Mayor Rosen assured there would be a prioritization exercise as well as identifying whose purview it falls under. For example, if it is something the City can do, action can be taken immediately. If an idea takes council action, that needs to be incorporated into the process. If voter action is required, obviously that would be a longer timeline. For revenue items that are prioritized, estimates can be prepared. Some of the revenue ideas are short term and some are long term. Acting Finance Director Kim Dunscombe reviewed: YES TO RFA 2026 NO TO RFA -CONTRACT DON'T KEEP KEEPTHE THE DON'T KEEP KEEPTHE $6.500.000 KEEP THE $6,500.000 THE 56,500,0O0 AND NO TO $6.500.000 and NO TO $6.500.000 AND NO TO THE LEVY AND and YES TO THE LEVY LID AND YES TO LEVY LID LIFT YES TO LEVY NO TO LEVY LOAN LEVY LID LIFT LIFT LEVY LID LIFT ANDNOLOAN LID LIFT LID LIFT BEGINNING FUND BALANCE $757,457 $556,022 $556,022 $556.022 5556,022 $556,022 $556.022 $556.022 REVENUES Other General Fund Revenue $36.123,690 536,009.494 $36,009,494 $36.009,494 536.009.494 $36,009,494 $36,009,494 536.009.494 Regular Prop Tax Levy $11,532.000 55,176.000 $5.176.000 $5.176.000 55.176.000 $5.176.000 $5,176.000 55,176.000 S6.5M of Reg Prop to Fire 56.500.000 $6.500.000 SO $0 $6.500,000 $6,500.000 56.500.000 EMS Prop Tax Levy $4 404,000 $0 $0 SD $0 $0 54,450.000 $4 450.000 Transport Fees $1.200.000 $0 $0 SO $0 $0 $1,200.000 51.200.000 Internal Loan $7.500,000 55,000.000 $0 $5.000,000 $0 $0 SO $0 Levy Lid Lift if RFA $0 $10,879.500 $0 510.879,500 Levy Lid Lift if Contract $24,119.664 $0 Adolf Le), Lid Lift if no to S6 million SO 56.500.000 $0 EXPENDITURES Regional Fire contract -$12.100,000 $0 $0 SO $0 $0 -$19,000.000 S19.000.000 Loan Repayment $972,OD0 -51,620.471 $7.500,000 $1,620,471 57.500.000 -$1,620,471 -$7,500.000 S1.620.471 Budget Expenditures $47,889,125 550,955,158 $50,955,158 $50,955,158 550.955.158 $50,955,158 $50,955.158 550,955.158 ENDING FUND BALANCE $56 022 2665,887 "65,858 35,834,113 5665.858 -54,334,113 $558,022 -$17,684,113 Ms. Dunscombe explained the beginning fund balance for 2025 in the proposed budget is just over $700,000. The spreadsheets breaks revenues into bigger pieces that have implications in 2026. In 2025, the regular property tax levy is $11.5M, EMS is $4.4M, transport fees are $1.2M and there is an interfund loan of $7.5M. The amount of $7.5M is up to council but there aren't many assumptions related to the regular property tax, EMS tax and transport fees under the RFA contract. Expenditures include the regional fire contract of $12.M, estimated loan repayment of $972,000; a commitment to repaying the loan, but other decisions can be made regarding that. For the sake of the proposed budget, she wanted to include an amount that showed the City would be paying back the loan from the utility funds. The remainder of the expenditures shown in the spreadsheet are $47.8M which results in an ending fund balance just over Edmonds City Council Approved Minutes November 2, 2024 Page 2 $500,000 at the end of 2025. Clearly there are still some decisions that can be made in 2025, but many of those are minute and not necessarily big -swing scenarios like there are in 2026. Ms. Dunscombe explained 2026 is where the big scenarios play out Yes and No to RFA. She started with Yes to RFA because that is what was included in the proposed budget. She reviewed scenarios under Yes to the RFA, 1) Keep the $6.5M and no to the levy and the loan, 2) keep the $6.5M and yest to levy lid lift, 3) don't keep the $6.5M and no the levy lid lift, 4) don't keep the $6.5M and yes to levy lid lift, and 5) keep the $6.5M and no to levy lid lift and no to loan. She acknowledged there may be other options but these were determined to be the most important to describe. She reviewed the beginning fund balance at the end of 2025 for each of the scenarios, how revenues affected each and the 2025 ending fund balance. She pointed out these scenarios assume Yes to RFA so EMS property tax and transport fees are zero and the expenditure for the Regional Fire Contract is also zero. She included a loan repayment in 2026 in each scenario as the State Auditor's Office expects interfund loans to be paid back within three years. Ms. Dunscombe explained the council passed a resolution stating its intent keep the $6.5M in 2026. She explained in the second scenario, keep the $6.5M and yes to levy lid lift, includes paying off the $7.5M loan. To the question regarding interest, Ms. Dunscombe said she included 5.4%, the LGIP interest in August when the proposed budget was developed. It is assumed rates will decrease in the future so that is a worst case scenario. Ms. Dunscombe explained in the second scenario, the budgeted expenditures stay the same as does the ending fund balance. She reviewed scenario 3, don't keep the $6.5M and no the levy lid lift, which doesn't work because the ending fund balance is-$5,834,113. She reviewed scenario 4 which includes a $10,879,500 levy lid lift plus an additional levy lid lift if the $6.5M is not retained, noting having two levy lid lifts would be challenging to explain to the public. Scenario 4 also assumes paying back the $7.5M interfund loan, keeping proposed expenditures the same and the same ending fund balance. Scenario 5, keep the $6.5M and no to levy lid lift and no to loan, includes a loan payment, and results in an ending fund balance of-$4,334,113 Ms. Dunscombe reviewed scenarios under No to RFA — Contract, 6) yes to levy lid lift, and 7) no to levy lid lift. In scenario 6, yes to levy lid lift, the City keeps the $6.4M property tax for fire, EMS property tax levy and transport fees, and a $24,119,664 levy lid lift to cover the fire contract. This scenario includes a $19M payment for the regional fire contract (increased from $12.M in 2025), paying back the $7.5M interfund loan, budgeted expenditures remain the same and the ending fund balance is $556,022. Scenario 7, no to levy lid lift, includes a $19M payment for the regional fire contract, $1.6M payment on the interfund loan, budgeted expenditures remain the same and the ending fund balance is-$17.6M. Councilmembers asked for a copy of the scenarios. Ms. Dunscombe acknowledged there were a lot of assumptions and options; these were the ones that they felt were high enough level to walk through. Mayor Rosen commented this helped give a perspective on increasing revenues to not only reduce reliance on property tax and sales tax and the volatility of those sources, and cover the gap. The City has emergent needs along with other things that have been kicked down the road so there needs to be a path to much more solvency and sustainability. Mayor Rosen explained the process for reviewing revenue ideas will be to start with the 53 revenue ideas, ask for other ideas, and during review of each of the revenue ideas, councilmembers will provide an instinct - level choice by raising a green (good with it), red (deal breaker) or yellow (on the fence or need more information) flag regarding each revenue idea. Councilmember Dotsch said she always thinks backward and doesn't have an end point in mind. If the council asks for a levy lid lift, other cities have done this such as Everett who asked for 44% and it failed. This levy lid lift would be quite a bit more and she wondered about doing a lower levy lid lift. She needed Edmonds City Council Approved Minutes November 2, 2024 Page 3 an end point and felt it was still too vague. Mayor Rosen answered the council gets to decide what that is. That vote will be informed by all the scenarios, the council could change the variables which would change the asks. New revenue sources could change the ask. The assumption to pay back the interfund loan in one year could be changed to paying it back over three years. Everything is negotiable. The council will also consider if some of the things are done, would it allow some services to be restored or to reduce the ask. The council could also reduce the ask by cutting more out of the budget now. Councilmember Tibbott observed there are no numbers assigned to the 53 revenue sources. Mayor Rosen acknowledged the only number is the $6.5M. Councilmember Tibbott observed these was just getting a read on the council's affinity for any of the 53 revenue ideas and as they rise to the top, estimates could be prepared. Mayor Rosen said the thought was let's do what we can as quickly as we can. Staff, the council and the community have identified ideas. Council President Olson commented when discussing revenues, it was related to the size of the levy ask. Anything the council can identify that can be an offset and provide revenue in a different way means the council is not going to the taxpayers for that amount in the levy ask. Mayor Rosen agreed, noting the other variable is the council has not yet deliberated on savings. Some councilmembers may want to restore items that were cut in the proposed budget and councilmembers may want to identify additional cuts; those would both impact the size the levy. Council President Olson observed the proposed budget is borrowing $7.5M so obviously there is a lot of road to make up, some way, somehow. Mayor Rosen relayed the proposed budget assumes annexation would be on the ballot and the council would retain the $6.5M, but does not assume a levy lid lift. Council President Olson observed the council raising their flag is simply weighing in with an opinion. Some councilmembers have very developed ideas regarding their opinion. Because the community will find out what the council is supporting and not supporting, she suggested allowing councilmembers an opportunity to be on the record regarding why they voted the way they did. Mayor Rosen suggested doing that after there is consensus because if something is off the table, the council doesn't need to talk about it and for items where there is more consensus and councilmembers have concerns, the council should hear those. Council President Olson suggested it would be nice for councilmembers to voice why they voted one way or another as it may be unpopular with some people but there might be a reason. Councilmember Paine suggested starting with a target would help inform how to prioritize things. The spreadsheet was very helpful. She hoped to have $12-15M in ongoing revenue ideas in 2025 and 2026. Ms. Dunscombe asked if that was total or per year. Councilmember Paine observed some things would be short- term. She suggested $12M for short term and a total including long term of $15M. Mayor Rosen observed that could be a starting place. Councilmember Eck commented these are all good points, but when doing a budget, there needs to be room for an exchange of ideas. She understood there need to be price tags, but no one thing is going to save the City. The council needs to change its behavior and while working on this, figure out their appetite for making changes in addition. The council cannot let the lack of a price tag stimy them today. City Attorney Jeff Taraday reminded cities have four primary revenue drivers; other things may move the needle a little, but the big four are property tax, retail sales tax, utility tax and B&O tax; everything else is a nice little adornment. Councilmember Dotsch asked about goals, whether it was related to council goals established at the beginning of the year, the mayor's priorities, public priorities, etc. In the comprehensive plan, the City is supposed to expand services for the 13,000 more constituents that are coming. If the City is selling its assets, that is not being done. She did not feel there were guardrails for this exercise to help the council identify Edmonds City Council Approved Minutes November 2, 2024 Page 4 their goals. Mayor Rosen commented she was welcome to recommend another process. Councilmember Dotsch asked if councilmembers had other ideas. Councilmember Chen suggested sticking with this process. Based on the seven scenarios Ms. Dunscombe outlined, the council doesn't have its mind set on one scenario or a crystal ball to see whether the public will be comfortable with approving a levy lid lift. He recommended sticking with this process and that goal will come up. Councilmember Nand asked if a councilmember could abstain from a vote if they didn't have enough information. Mayor Rosen suggested raising a yellow flag which means either I don't have an opinion or enough information. He suggested if a councilmember didn't raise a flag, it would be counted as yellow. Mayor Rosen asked if there were any questions about the revenue ideas. Council President Olson asked about franchise fees. Mr. Taraday answered due to a statute, franchise fees are usually not a revenue tool in Washington. There are some unusual arrangements that some cities have with utilities whereby the city agrees to forego competing with that utility and in exchange for that noncompete, the utility provides some money to the city. For example, the City of Shoreline does this with Seattle City Light; Shoreline said we're thinking about starting our own electric utility and Seattle City Light said we'll pay you a bunch of money if you don't do that. Even though the statute says you can't charge an electric utility for using rights -of -way, it doesn't prevent the city from receiving money from a utility in exchange for a noncompete. Could Edmonds theoretically do that with PUD? Perhaps, but it would require PUD's cooperation. Same with PSE, it would require PSE's cooperation. The City cannot do those things unilaterally, it would require some kind of agreement to not compete and see what comes from that. Council President Olson asked if that was on the radar due to the cable franchises. Mr. Taraday answered the cable franchise fees are the one type of franchise fee that really are fairly significant revenue generators. There are a couple interesting things going on with cable franchise fees right now, first, an audit found the City has been underpaid on the cable television franchise fee and at some point something will have to be done about that. The other big, interesting legal question is with so many people now watching television using streaming services, the traditional cable franchise fee keeps shrinking every year. There is an outstanding legal question as to whether the cable companies or the "Hulus of the world" should be transferring franchise fees based on the revenue generated by the streaming services. It is the type of thing that would require litigation and for the City to find partner cities to participate. There are several cities looking at that. Mayor Rosen asked for other revenue ideas. Councilmember Chen suggested exploring the possibility of turning assets identified to be sold into revenue generating rental assets. If the assets are sold, it is a one-time revenue. He suggested an in-house or outsourced property manager. Councilmember Dotsch suggested privatizing things the City does. Mayor Rosen relayed a director suggested a Wastewater Treatment District. Mr. Taraday advised an alcohol tax is preempted by state law. Cannabis is an undecided question. He commented several of the ideas would require cooperation from a third party. Councilmember Eck suggested additional red light cameras. Edmonds City Council Approved Minutes November 2, 2024 Page 5 Councilmember Paine asked about REIT. Ms. Peterson answered that is Real Estate Investment Trust. Mayor Rosen explained it would be sell buildings and leasing them back. Mr. Taraday pointed out the City doesn't currently pay property tax, but would if buildings were leased back. Councilmember Nand referred to "Camera Fines from $130 to $145," relaying Judge Weiss indicated he has discretion on the amount up to $130 and is impowered to fine people just $5 for their first infraction if he wants to. Mr. Taraday offered the following revenue ideas: wireless leases and franchise, charge utilities for ROW permit fees, B&O tax, head tax for assisted living facilities, head tax for medical offices, City leasehold excise tax, and collect full value of street vacations. Councilmember Tibbott asked about a head tax. Mr. Taraday explained it is a form of a B&O tax. Under B&O taxes, cities can do many different, creative business taxes. Mayor Rosen commented Seattle has a head tax on businesses within the city. The reason he suggested assisted living facilities and medical offices, is he knows they generate a lot of cost to the City in terms of EMS response. Councilmember Paine asked how the head tax for assisted living facilities would be charged. Mr. Taraday was certain it would be passed on to the consumer. Councilmembers went through an exercise where they raised a green, yellow or red flag regarding the following revenue ideas: Revenue Idea Green Yellow Red Increase 1 Collect/Increase credit card fees 7 0 0 2 Increase sales tax 4 1 2 3 Pro e tax levy 7 0 0 4 Increase business license rate 5 1 1 5 Market/Higher rate for Museum lease 6 1 0 6 Market/higher rate for Wade James lease 5 2 0 7 Market/higher rate for old PW building lease 5 2 0 8 Market/higher rate for Boys & Girls Club lease 5 1 1 Wireless leases 7 0 0 9 Increase pet license fee 6 0 1 10 Increase our franchise fees PUD and PSE 7 0 0 11 Increase employee and resident parking pass 6 0 1 12 Camera fines from $130 to $145 3 2 2 13 Escalate fines for 2nd offense to $190 and 3rd offense to $220 5 1 1 14 Increase Development Fees 5 1 1 15 Increase fees for services we provide at Special events 2 5 0 16 Increase Utility Tax 4 1 2 Increase the number of red light cameras 2 3 2 Increase street vacation fee 5 2 Introduce 17 Fire impact fee 2 5 18 Charge for police response to false alarms 3 3 1 19 Add an admission tax 4 2 1 20 Allowing gambling 4 1 2 21 Affordable Housing Sales tax 2 4 1 22 Commercial Parking tax 5 2 0 23 Parking Meters 3 2 2 24 Reduced fees we pay ourselves for utilities 6 2 0 Edmonds City Council Approved Minutes November 2, 2024 Page 6 25 Parks entrance fees 2 0 5 26 Donation opportunities at Parks 6 0 1 27 Donation opportunities on utility bills 6 1 0 28 Traffic Impact Fees on tickets 2 2 3 29 Sugar Tax 3 0 4 3,0 Aleehel x 31 Cannabis Tax 6 0 1 32 Short Term Rental Tax 6 0 1 Charge utilities for ROW 7 0 0 B&O Tax 3 1 3 Head Tax ex. assisted living &/or medical fac. 0 2 5 Leasehold excise tax 7 0 0 Solid Waste Franchise Fee 4 3 1 Sell 33 Meadowdale Club House 5 0 2 34 Wade James property 1 3 3 35 Francis Anderson Center 0 4 3 36 City Hall 3 2 2 37 Ads on website 4 1 2 38 Sponsorships / naming rights on our assets 5 1 1 39 Additional police cars 2 3 2 40 Sell off Parks 1 1 5 Lease off Parks 2 3 2 Other 41 Join the RFA 42 If RFA annexation is approved retain tax revenue 43 Pursue Tax Increment Financing TIF 5 1 1 44 Create local improvement districts 5 2 0 Utilize PFDs(Public Facilities District 7 0 0 45 Utilize Community renewal 5 2 0 46 Eliminate the MFTE(City currently has 2 5 1 1 47 Share costs/resources w/neighboring cities 5 2 0 48 Require business license for every unit in every apartment house 0 3 3 49 Create a Park District 5 2 0 40 Digital advertising at ferry lane area 4 1 2 51 Eco and adventure tourism 4 3 0 52 Real Estate Investment Trusts REIT 1 6 0 53 Increase motor vehicle license fees from $40 to $50 4 2 1 Privative things we do 4 2 1 Create WWTP Tax District 2 4 1 Electric bike registration 3 3 1 Lime Bike Franchise 4 1 2 During the above exercise the following comments were made: ➢ Regarding increase sales tax, Council President Olson said she would support if the sales tax increase proposed by the county does not pass. Regarding the market/higher rate for old PW building lease, Council President Olson advised there is a short-term plan (2 years) to use the building again. ➢ Councilmember Nand asked about wireless leases. Mr. Taraday advised there are leases for wireless facilities on the City water towers leases and a couple wireless franchise on structures in the City's right-of-way. Edmonds City Council Approved Minutes November 2, 2024 Page 7 ➢ With regard to increasing red light camera fines, Mayor Rosen said if there was council consensus to do this, there would need to be a vote so it could be included in the contract. ➢ Regarding increase fees for services we provide at special events, Mayor Rosen explained Public Works closes the street, puts up barriers, cleans restrooms, etc. and all those costs are not necessarily recovered. Councilmember Nand pointed out special events are usually annual contracts so the City could charge the actual impact to the City the next couple years and then go back to subsidizing via reduced rates. Councilmember Eck referred to Mayor Rosen's indication the City isn't even covering its costs. Mayor Rosen pointed out during a recent event, staff was out two extra hours, creating an overtime situation. ➢ Council President Olson asked if increasing fees for street vacation was related to the market value of an easement being vacated. Mr. Taraday explained the current code says the City collects 50% of the value but state allows collecting 100%. ➢ Councilmember Chen asked about charging a fire impact fee if the City annexed into the RFA. Mr. Taraday it could exist via the ILA but would not benefit the General Fund, it would go into impact fees which can only be used for fire capital projects such as fire engines, stations, etc. Councilmember Paine suggested if the City still owned the fire stations, they could be updated using those impact fees. Mr. Taraday agreed. ➢ Regarding Affordable Housing Sales tax, Ms. Dunscombe answered the City takes a credit against the state's 6.5%, Fund 141, which has a balance of about $300,000 with annual revenue of about $65,000. There hasn't been any expenditures from that fund. Mayor Rosen pointed out there may be General Fund expenditures that could be offset by this fund. ➢ Regarding reduced fees we pay ourselves for utilities, Mayor Rosen explained the City currently pays its own water bill at a retail level for parks, etc. Some cities charge themselves a government rate. Ms. Dunscombe explained it would reduce the General Fund contribution to the utilities. For example, the City of Bainbridge has a government rate so all schools, the library, etc. pay a government rate for their utilities instead of what other customers pay. ➢ Donation opportunities at Parks, Mayor Rosen explained this would be a QR code on a sign to make a donation to parks. Councilmember Paine commented funds collected as a donation can be used for another higher priority. ➢ Traffic impact fee on tickets, Mayor Rosen advised the City can add an impact fee in addition to the citation. ➢ Regarding the short term rental tax, Council President Olson asked if this was different than the lodging tax, noting short term rentals should be subject to lodging tax and it should be collected. Mr. Taraday answered they potentially could be different. The City could potentially do a B&O tax on short term rentals instead of the lodging tax. The lodging tax is limited in its utility. Councilmember Tibbott observed the state charges a B&O on short term rentals because it is a business. Mr. Taraday assumed that was true. ➢ Regarding sell additional police cars, Council President Olson recalled when those were purchased, it was a long term cost savings. ➢ Regarding utilize PFDs, Councilmember Chen commented Lynnwood PFD is expanding their conference center. Mayor Rosen advised Edmonds Center for the Arts, Museum of Flight, and the Lynnwood Conference Center are all PFDs. Council President Olson asked if the Museum could shift to a PFD. Mayor Rosen suggested there was precedence with the Museum of Flight in Everett. ➢ Regarding eliminate the MFTE, Mr. Taraday explained the City is not collecting as much property tax as it could be from properties that qualify for MFTE ➢ Regarding require business license for every unit in every apartment house, Mayor Rosen explained each unit is a revenue stream for the owner of the apartment building. Mayor Rosen declared a brief recess. Mayor Rosen suggested identifying revenue ideas that have 5 or more green votes that do not impact the General Fund. Mr. Taraday suggested identifying known costs at a ballpark level. Edmonds City Council Approved Minutes November 2, 2024 Page 8 • Revenue Ideas sorted by the most green votes: Revenue Idea Green Yellow Red Potential Cost to Implement Non General Fund Collect/Increase credit card fees 7 0 0 Property tax levy 7 0 0 Wireless leases 7 0 0Appraisal not all Increase our franchise fees (PUD and PSE) 7 0 0 Charge utilities for ROW 7 0 0 Leasehold excise tax 7 0 0 Utilize PFD's (public facility district) 7 0 0 newfund Market/Higher rate for Museum lease 6 1 0 Reduced fees we pay ourselves for utilities 6 1 0 Donation opportunities on utility bills 6 11 0 Increase pet license fee 6 0 1 Increase employee and resident parking pass 6 0 1 GF / F121 Donation opportunities at Parks 6 0 1 Cannibis Tax 6 0 1 Short Term Rental Tax 6 0 1 MarkeUhigher rate for Wade lames lease 5 2 0 MarkeUhigher rate for old PW building lease 5 21 0 Increase fee for Street vacation 50%to 100% 5 2 0 Commercial Parking tax 5 2 0 Street Fund Create local improvement districts 5 2 0 Other Utilize Community renewal 5 2 0 Share costs/resourcesw/neighboring cities 5 2 0 Create a Park District 5 2 0 Increase business license rate 5 11 1 MarkeUhigher rate for Boys & Girls Club lease 5 1 1 Escalate fines for 2nd offense to $190 and 3rd offense to $220 5 1 1 Increase Development Fees 5 1 1 Sponsorships/naming rights on our assets 5 1 1 Pursue Tax Increment Financing (TIF) 5 1 11 Questionable Eliminate the MFTE ( the city currently has 2) 5 1 1 Meadowdale Club House 5 0 2 Solid waste franchise fee 4 3 0 Eco and adventure tourism 4 3 0 Sell Hummingbird Park 4 3 0 Add an admission tax 4 2 1 Increase motor vehicle license fees from $40 to $50 4 2 1 Privatize things we do 4 2 1 Increase sales tax 4 1 2 Increase Utility Tax 4 1 2 Allowing gambling 4 1 2 Ads on website 4 1 2 Digital advertising at ferry lane area 4 11 2 Lime Bike Franchise 4 1 2 Charge for police response to false alarms 3 3 1 Electric Bike Registration 3 3 1 Camera fines from $130 to $145 3 2 2 Parking Meters 3 2 2 City Hall 3 2 2 B&O Tax 3 11 3 Sugar Tax 3 0 4 Increase fees for services we provide at Special events 2 5 0 Fire impact fee (no General Fund impact) 2 5 0 Affordable Housing Sales tax 2 4 1 Create WWTP Tax District 2 4 1 Increase the number Red light cameras 2 3 2 The additional police cars 2 31 2 Lease off Parks 2 3 2 Traffic Impact Fees on tickets 2 2 3 Parks entrance fees 2 0 5 REITs 1 6 0 Wade lames property 1 3 3 Sell off Parks 1 1 5 Edmonds City Council Approved Minutes November 2, 2024 Page 9 Francis Anderson Center 1 01 4 3 Require business license for every unit in every apartmenthouse 1 01 31 3 Head tax ex. assisted living Wor medical fac. 01 21 5 The following comments were made with regard to the sorted list of revenue ideas: ➢ With regard to wireless leases, Mr. Taraday advised the City would have to get appraisals. ➢ With regard to increasing our franchise fees (PUD and PSE), Mr. Taraday reiterated the City would need to move toward starting its own utilities to be able to collect those franchise fees and make that tradeoff. ➢ Ms. Dunscombe pointed out the wireless franchise fee for wireless facilities on the water towers would not come to the General Fund. Mr. Taraday agreed, noting most are in the right-of-way. ➢ Ms. Peterson asked if increased employee and resident parking pass would go to the parking fund. Ms. Dunscombe answered resident parking passes go to the General Fund, employee parking goes to Fund 121. ➢ Regarding Utilize PFDs, Mr. Taraday said that was not related to General Fund. Ms. Dunscombe commented it would be a new fund. ➢ Ms. Dunscombe said a commercial parking tax would go into the street fund. ➢ Regarding create local improvement district, Mr. Taraday said it does not necessarily require community initiation, but would definitely require community support. ➢ With regard to utilize community renewal Mr. Taraday was unsure that would be characterized as a revenue tool. ➢ Mr. Taraday explained Tax Increment Financing is a vehicle for funding capital and trading off property tax revenue which would not be a net gain to the General Fund. Councilmember Tibbott commented unless it generate economic activity. Councilmember Nand expected it to be tied to a specific property for capital projects. Councilmember Paine suggested if MFTE is eliminated, she wanted to ensure it was large buildings with commercial on the ground floor so that condominiumization for the commercial properties could be incentivized. Having commercial on the ground floor will be very important to ensure there were amenities for the community. Council President Olson said she wanted to provide some additional information on one of the ideas that did not get a lot of votes. Although she didn't support selling parks in general, but it matters where the parks are because some areas are in a deficit and other areas have a lot. One of those areas includes Frances Anderson Center, Civic Park, Yost Park and Edmonds Elementary. In the middle of all of those is Hummingbird Park which she walks by regularly with her dog and there is rarely anyone in it. It is in a residential neighborhood so there could be housing. Councilmember Paine anticipated that was a donation so staff would have to ensure there weren't conditions. Council President Olson commented it would be worth looking at since there are four parks within '/z mile. With regard to the potential sale of the Meadowdale Clubhouse, Wade James property, Frances Anderson Center, Councilmember Nand asked if those could be redeveloped with the original function on the ground floor and market rate rental housing on the second and third floor. Mayor Rosen answered yes in general, but maybe not the Meadowdale Clubhouse as it would be spot zoning in the middle of a residential area. Councilmember Dotsch referred to the red light cameras, commenting the City created a new government program that requires employees, funding, etc. Many of the revenue ideas are good ideas, but she was concerned about creating new programs that the City then has to fund, provide staffing for, etc. Mayor Rosen said the red light camera program can be looked at through the lens of safety, but looking at it through the lens of revenue, if it is not generating revenue, it's not a good idea. Councilmember Dotsch commented some of the other revenue ideas will require creating a government program and she wondered if that was that the City wanted to be in the business of doing. She wanted to be cognizant of programs that require oversight; for example, the City does not check for VRBOs because staff doesn't have time. Mayor Rosen Edmonds City Council Approved Minutes November 2, 2024 Page 10 agreed there was limited staff time; staff could spent time checking for VRBOs if the council believed that was a revenue priority. Councilmember Dotsch said she was just raising the issue as part of the context. Ms. Dunscome referred to column F, Potential Cost to Implement. Councilmember Nand agreed with Councilmember Dotsch, the potential cost to implement is the council's purview when looking at the optics for programs that will be cut or added. For example, if FTEs are added to the courts related to more red light camera tickets, but the gymnastics program that serves a lot of young families was cut, the optics of those decisions and how it appears to constituents need to be considered. Councilmember Paine said some of the thing things that provide increased revenue like the red light cameras and the school zone cameras also extend police services as there is not the cost of having officers there and the police can work elsewhere. Councilmember Eck commented these are all important factors and some revenue ideas will be more important to some councilmembers than others. It is unlikely the council will agree 100%. She appreciated the conversation although painful. There may be revenue ideas that require staff, but the revenue generated still pencils out. Council President Olson suggested taking a flag vote on divesting the City of Hummingbird Park (9t" & Sprague): Revenue Idea Green Yellow Red Sell Hummingbird Park 4 3 0 Councilmember Chen commented this is a good conversation to have, to identify revenue ideas that 7, 6 and 5 councilmembers support, but resources to pursue them may be limited. He suggested inviting citizens to form an advisory committee to assist the finance committee or the administration with researching these ideas. Mayor Rosen said staff will add a column to the spreadsheet that identifies who would have the primary responsibility for each revenue ideas. Councilmember Dotsch asked if the intent of the new revenue sources was to reduce the levy lid lift ask, reduce borrowing or something else. Mayor Rosen said that is part of the conversation the council needs to have because it is also related to the council's deliberation on the draft budget which hasn't begun yet. Cuts the council makes in the budget could impact the levy lid lift amount or result in doing less and things that are added to the budget could do the opposite. He pointed out most of the revenue ideas would take time to implement. How the council uses the money for new revenues could be to add things back, ask for less, pay off the loan sooner, etc. Council President Olson commented it is also based on the timing of the revenue stream. If the council borrowed less, that would be very prudent. Mayor Rosen explained that was part of the motivation for the scenarios; even in the seven that were presented, changes could be made to the assumptions. Each of those is a trigger, for example, annexation to the RFA and retaining the $6.5M, and the voters say no, the rest of the assumptions are no longer valid and there has to be a course correct. The assumptions are scenarios that can be adjusted and once the voters weigh in, that will force some course corrections. Mayor Rosen declared a brief recess. 2. 2025-2026 BUDGET WORKSHOP OVERVIEW Council President Olson explained the council had originally been told there would be an option to borrow from private sources or the utilities or other funds and the preferred alternative was to borrow internally. It has since been discovered that borrowing from private entities for operations and maintenance, which is basically what the General Fund funds, is really not so available in the commercial market as they like to Edmonds City Council Approved Minutes November 2, 2024 Page 11 have collateral when making loans to entities. She referred to a conversation at the finance committee, information that it was important the full council have regarding how the amount to be borrowed was calculated. Acting Finance Director Kim Dunscombe recalled sharing with the finance committee correspondence with the City's municipal advisor. Since the bond market is great, the market for spending for general obligation without a capital project isn't really there and might be kind of expensive and obviously it is cheaper to borrow internally. Ms. Dunscombe continued, in analyzing what the utilities have available along with their upcoming capital projects, the $7.5M and the $5M and even the $5M is on the edge of a little too risky for the utilities, but that is the max. There is no capacity about $12.5M. She commented the $5M puts the Water Fund in a tricky position at the end of 2026. Council Executive Assistant Beckie Peterson reviewed the agenda for this discussion: • Council -driven objectives o What do we need to accomplish? o What are our goals? o Can we identify metrics we want to strive for? • Council -directed approach o How do we go about this? o What do we agree will be helpful/productive? o What do we agree we should avoid? • Decision -making Information • Amendments to Biennial Budget 2025-2026 • Timelines and Workplan Councilmember Chen commented the biggest objective is to deliver a balanced biennial budget. Councilmember Tibbott commented it needs to be balanced by the end of 2026. Council President Olson asked how the council was feeling about the current proposed deadline of approving the budget by Thanksgiving, knowing the future of fire service and comprehensive plan are still topics to be considered. She was hopeful councilmembers were ready to work hard and fast on the budget in the early weeks of November to meet the Thanksgiving deadline and then focus on those other topics. Councilmember Eck said the council certainly doesn't want to rush and wants to be thoughtful, but doesn't have time to waste and no one wants to prolong the conversation due to the need to discussion other important topics. She concurred with the proposed schedule. Councilmember Nand commented with the level of complexity with the first biennial budget and contemplating dozens of layoffs, she anticipated the council may have to continue deliberations into December to justify the hard, painful decision to the community and staff. Councilmember Dotsch concurred with Councilmember Nand. There is a hard deadline for one and not necessarily the other and both need very thoughtful consideration and effort. Looking ahead at this task, she anticipated it would take into December. Council President Olson added the timing of the layoffs is one of the factors that may play into the council's decision because the City needs to provide the unions advance notice of any layoffs and it is just the right thing to do regardless of whether it is required. Being done a little earlier helps with that component. Councilmember Chen said November 26 is a good target, but December 31 is the actual deadline. With regard to what are the council's goals, one of his goals was to deliver a balanced budget and at the same time find ways to keep borrowing from the utility funds to a minimum to get through 2025/2026. The Edmonds City Council Approved Minutes November 2, 2024 Page 12 revenue ideas council identified are unlikely to meet the 2025/2026 timeline. There may be different opportunities in the budget such as using the contingency funds to reduce borrowing. Advantages of using the contingency fund include, 1) not paying interest, and 2) not jeopardizing the utility fund's position as there are challenges with the wastewater treatment although that enterprise fund is almost like a separate operation. Councilmember Paine wanted to be a complete as possible and reduce the number of budget amendments during the next couple of years to every six months. With regard to the biennial budget, she was curious about the capacity for Finance, noting although the comprehensive plan does not affect Finance, but the council will rely heavily on Finance with regard to the RFA vote and that universe. With regard to budgeting, she anticipated council having real detailed questions and she wondered if Finance had enough allocated capacity to respond to the deluge of questions. There have been 70 questions so far and more come up at every meeting. She wondered if passing the budget by Thanksgiving was reasonable for staff. The budget has to be approved by the end of the year and it has to be done responsibly. Ms. Dunscombe said staff has been able to respond to queries and have also delegated to other departments as necessary. Everyone is very aware that the budget has taken priority although the comprehensive plan is a huge task for a number of staff. Going into 2026, whatever falls out from this process will probably require a lot of financial staff, but the everyone in the City will need to jump in and play a different role, find efficiencies, etc. which may actually break up some of the siloing issues. Councilmember Paine recognized that is a cultural thing and she loved that idea because budgeting creates silos. Ms. Dunscombe assured Mayor Rosen has been doing a great job getting everyone to work together. Mayor Rosen shared he has been considering organizational structure on a fairly significant level. In an ideal world, this all would have been done in parallel. He was hoping to be able to introduce a concept before the end of the year; the motivation is to find efficiencies and more cost savings via restructuring. Councilmember Paine asked when that would be happening. Mayor Rosen answered it would be early in 2025. Ms. Dunscombe answered the timing will work well with implementation. One of the reasons she asked the mayor to put that aside was moving people around changes the chart of accounts and all the numbers associated with where people are charged. In that a new chart of accounts will be created next year, that is a good opportunity to put those things together. Councilmember Paine asked if there were other initiatives that would happen in 2025 that the council hasn't heard about yet. Mayor Rosen answered opportunities within the boards and commissions structure are being investigated because that is a very big dollar time investment. For example, one of the smallest departments, Community, Culture & Economic Development, supports seven boards and commissions which is a huge time impact. Other things that have been talked about are a Parks District or Wastewater District; those would have monster impacts. He did not know of anything else that was emerging other than the reorganization. Councilmember Eck said one of the concerns she is hearing is the council rushing and not considering staff. A good point was just made that staff resources are being impacted the longer the budget discussion drags out. She was not saying the council should rush, but it was also time for the council to use their business acumen and be very disciplined and come to every meeting with their thoughts well organized so the council can have meaningful and efficient conversations. If councilmembers come up with ideas to offset staff cuts, that would be an ideal situation, urgent and high stakes. She was sure the council could do this based on her experience in other realms. Councilmember Nand agreed with Councilmember Chen that the council needed to deliver a balanced budget for the City's first biennial budget that addresses the City's fiscal emergency. Her goal is that the process used is very transparent, accountable to constituents, taxpayers and community members and City Edmonds City Council Approved Minutes November 2, 2024 Page 13 staff and that the council is able to justify each decision and demonstrate it was done in a thoughtful and compassionate way. Both her parents were members of WEA and she was raised in a union household; the school district lays off in the summer so if a family has to move for a new job, it is less impactful to children than pulling them out of school in the middle of the school year. Laying people off around the holidays is particularly heartless. Her personal goal was if layoffs were necessary, positions could be funded 3-7 months into 2025 to give people more certainty in their immediate future and show respect to staff members who have dedicated their lives and efforts to making city government function and serving the community. Councilmember Dotsch suggested what could help the council focus its energy is considering whether they agree with the numbers in the proposed budget, whether the numbers take the City to insolvency, increase taxes and ask the public to accept over 160% tax increase. The council needs to have a better idea of what they are working from and make decisions such as whether to borrow, what amount should be borrowed, etc. Council President Olson said having the perspective of exactly where we are and what borrowing $7 million in 2025 really means is the City is in a desperate situation. The things the council is doing are about keeping the lights on and providing core services; the City has been spending beyond its means for a long time and has to stop that before the City ends up bankrupt. Some residents who have looked closely at the budget think the council shouldn't borrow more than $3M in 2025. At the same time she has looked at cuts in the budget book, most of which she can support, but for example she was very concerned about losing the extra support in the Finance Department when an ERP is being implemented and changes are happening to accounts and budgeting by priorities in the biennial budget is still really new. She did not think the council could do what it wanted on the revenue side if that department did not have the bandwidth. She acknowledged retaining that position would require making a cut somewhere else. With regard to what the council needs, Councilmember Tibbott said he needed a complete list of the jobs that are proposed to be cut which he has received but not reviewed. To make budget decisions, although the department presentations identified cuts to be made, there was no information regarding the savings associated with those cuts. He requested the savings be provided in a list. Mayor Rosen said there are different approaches, here's the money you have, what do you want to spend it on, versus what did I spend last year versus what's in the budget book. He noted providing that information requires an investment in time. The situation is the City doesn't have enough money to pay for what it has now. Councilmember Tibbott said it would help him to know what more needed to be cut. For example, what about the Police Chief? He asked if the plan was to hire another one, keep two assistant chiefs, or what is the thought. Mayor Rosen answered there is a structure in the budget that exists until it doesn't. Councilmember Tibbott observed the council could change the structure before the end of 2024. Mayor Rosen agreed the council could, he will need to name an interim chief when Chief Bennett leaves at the end of the year although what the council does with the budget could change that. He has been gathering information via conversations with Chief Bennett and the assistant chiefs, the commanders, and the union so he can provide a recommendation for the council to consider. Councilmember Chen said clearly the proposed budget will not work because based on that budget, by 2027 the City will go bankrupt which cannot be allowed to happen. Out of the seven scenarios, he supported the second scenario in 2026, Yes to the RFA, yes to levy lid lift, and pay off the 2025 utility fund loan as a baseline. That scenario will provide a better outlook for future years instead of going bankrupt. The amount of the levy lid lift, $10.8M, and paying off the $7.5M utility fund loan; he anticipated those numbers would change based on the budget process. He agreed with Councilmember Dotsch, the council needed a target or mindset to start from. Mayor Rosen said he also liked that scenario. That scenario is optimistic that the community will support the RFA and the levy lid lift. The community could say no. Councilmember Chen said then there will need Edmonds City Council Approved Minutes November 2, 2024 Page 14 to be an adjustment. Mayor Rosen suggested not waiting until election day to figure out what that means. The council has to know ahead of time what it means if the community says no to either the RFA or the levy lid lift. Councilmember Chen said in terms of delivering the 2025/2026 biennial budget, the council has to pick one scenario and work toward it. Councilmember Dotsch said she wanted to be realistic about the number the council was working toward, whether those asks will be approved by the voters. Councilmember Chen answered the council doesn't know until they ask the community. Councilmember Dotsch said the council can get an idea from surrounding cities; Everett's 44% levy lid lift was rejected. She was concerned with the voters approving annexation to the RFA and a levy lid lift. Council President Olson anticipated the levy lid lift would be smaller than the numbers in the scenario due to the council's efforts and possibly the City would borrow less from the utilities. Councilmember Chen anticipated the amounts could be reduced by using the $2.2M contingency fund and cutting costs could reduce the amount to $3.5M. Councilmember Paine pointed out the contingency fund has to be reimbursed. Council President Olson commented using the $2.2M would sacrifice the interest that earns and require paying interest to use those funds. On paper there isn't a different outcome by using the contingency. She asked via the budget queries to explain the impacts of one versus the other. Ms. Dunscombe said although she has said assume the amount is $7.5M, only the amount needed will be borrowed. She will have an ordinance or resolution prepared allowing that amount and ensuring the schedule and everything is prepared to substantiate that ordinance, but she would only borrow as the General Fund needed so there is potential that it would be less than $7.5M. Councilmember Paine said to understand how this will flow out for the long term horizon such as 15 years, she needs what bonds will come due, recalling a bar graph provided by bond counsel. That is good information to have because dipping into contingency funds and the emergency contingency will affect the City's bond rating and raise the cost of bonds. Ms. Dunscombe offered to provide the bond chart. Ms. Peterson continued: • Council -directed approach o How do we go about this? o What do we agree will be helpful/productive? o What do we agree we should avoid? Councilmember Chen said he wanted to inform the council about using the cash pool to subsidize the negative General Fund balance. In September, the General Fund balance is-$300,000 and the cash pool is used to fund operations. Ms. Dunscombe answered that was an idea to get through 2024; it is not sustainable. As one looks at the cashflow on the last page of the finance report, the negative cash balance is occurring more frequently and getting larger and is no longer an option. The goal was do that in 2024 although there were some struggles due to things popping up; that cannot continue in 2025 to the extent that is occurring in 2024. Councilmember Chen said dipping into the cashflow is not the way to do it. Mayor Rosen commented expenses do not go up at the same rate as revenue. It would be like if someone receives a paycheck twice a year, their expenses occur all year. The City relies heavily on the receipt of property taxes twice a year and the cashflow allows use of the pool during those times. Until the City can fix its foundational problems, that option does not exist. Councilmember Chen said that has been done in the past, but dipping into the cash pool should be once in a blue moon, not on a regular basis. Councilmember Dotsch said the council needs to consider the priorities of government, what it has to do. With regard to the council and community's goals, what part of City funds and staff are going toward that. Edmonds City Council Approved Minutes November 2, 2024 Page 15 The City has to be very intentional regarding what it is doing; Edmonds is only 8.9 square miles with very limited revenue sources. She emphasized the council consider what they want to accomplish with Edmonds' government. With regard to wants versus needs, because the City is nearly insolvent, the focus has to be on needs. Being intentional now saves grief, unknowns and uncertainty for the staff team. The council needs to be honest about what the City can provide and not promise things that aren't sustainable. The council owes that to both the citizens and the staff team. Council President Olson said it sounds like councilmembers are interested in looking at lower targets than were established in the proposed budget. She recommended if a councilmember proposes an addition, they find that much or more in cuts. Councilmember Paine commented some of the things that were found last year still haven't been accomplished this year. For example, the prisoner care budget which has been overspent. The administration needs to figure that out between the City and the jail accounting staff such as what exactly does the City get for the prisoner care budget. In discussions with labor groups, what structurally can be done with reorganization and have that laid out first quarter next year so there is some stability. Councilmember Tibbott agreed if a councilmember proposed an increase in spending, they have an obligation to identify a reduction. Councilmember Eck agreed that was necessary to have a balanced budget and was the responsible thing to do. If a councilmember wanted to put something back on the table, they needed to identify an offsetting cut. • Decision -making Information o What information is needed? o How best to obtain this information? Council President Olson observed Mayor Rosen's reorganization is still in the works and departments' presentation identified some changes. She suggested providing that information to council as soon as possible so those could be incorporated. Ms. Dunscombe advised a list of staff s recommended changes has begun. For example, the COLA was reduced from 3.8% to 3% for a handful of business units within the City; overall it is about $200,000. Council President Olson suggested the administration provide that information at any meetings that include budget deliberations. Ms. Dunscombe said a list of professional services was prepared; some professional services cannot be reduced. For example last year the professional services in the police department were reduced, but the police have a contract with Axon that cannot be reduced further. She suggested having directors provide information regarding the professional services such as whether something is in the work plan, something that has to be done, etc. Councilmember Paine commented she was surprised to see the long list of cuts that were decided this past year. If there are decisions that need to happen from the administrative side during the biennium, it would be great to have that transparency to council. For example, relocating the police department was taken off in 2024 and now is proposed again. Councilmember Nand suggested some alignment between boards, commissions and committees and professional services when looking at what to retain and what to cut. The City funds a lot of boards, committees and commissions, but the tradeoff should be if those boards, commissions and committees require staff support, they should be able to do work that other cities hire consultants to do. For example, there is an ADA analysis of parks in the CFP/CIP; other cities might hire a consultant to audit the city's parks and determine what needs to be done to make them more ADA accessible. That may be something the DEIA Commission could be tasked with doing to provide an aggregated cost savings. She anticipated eliminating boards, commissions and committees would mean hiring more consultants to do the work they were doing on a volunteer basis. Edmonds City Council Approved Minutes November 2, 2024 Page 16 Councilmember Dotsch said since furloughs are a big piece of the budget and a reduction in staffing, staff only has so much time to do what they need to get done. For example if furloughs result in 35% less time, does there need to be a corresponding 35% cut in the things the City does? She wanted to be mindful and realistic in what staff could do with less and not burden the team. Mayor Rosen said the intent of the directors' presentations was to start that conversation. He recalled some were very specific about what won't be provided when cuts are made. He agreed with managing expectations. He recalled a councilmember asked the impact of closing city hall one day a week. Council President Olson said she was interested in the impact to customer -facing city services if city hall were open 3-4 days/week instead of 5. She suggested there may be an opportunity to ask the unions to make concessions to save some positions. Ms. Dunscombe reminded there is a structurally imbalanced budget. While she can plug furlough numbers into 2025/2026, when she goes to the complete the rest of the strategic financial forecast, those numbers will pop back up. One way to describe what work won't get done is to use the program as a way to characterize what work won't get done. For finance staff, given the position proposed to be cut in the budget, that really limits their work plan. Staff will do what's necessary for annual reporting, ensuring they abide by financial policies, implement the new ERP system and prepare the budget; that will be their max. Any of the new revenue ideas will be a challenge. Some of the ideas aren't just finance related, other resources throughout the City can be utilized. Mayor Rosen commented there are some things the City has to do, for example, there have to be seven councilmembers and there are core services the City has to provide. Furloughs mean staff will be trying to do the same thing with fewer hours. The way forward is to identify what the City doesn't need to do, not doing a less good job on everything, but doing as good a job as we can on the critical few things. He suggested looking at programs for ones the City could do without. Councilmember Tibbott commented a lot of it comes down to the administration and things that are in the administration's lane, not the council's. The council determines the budget and the administration determines what things can be done this year and what things need to be delayed. Mayor Rosen expressed appreciation for that, noting sometimes the council is pretty surgical in their decision making. Councilmember Nand suggested if the administration got more data from City staff about how their time is being used, it would allow the council a better understanding of each FTE's scope of work, how their time is being used and what the council wants to/doesn't want to fund. She referred to her suggestion for project number tracking that would provide information from a financial perspective and the administration can have a better awareness of the scope of each FTE and how their time is being used. Mayor Rosen commented there is a world he wants to live in and it includes that. Imagine a day where the council is budgeting by proprieties and the community has identified the things that are important to them and the City is able to play back the budget to them and say here are investments in every one of those priorities. If it is quality of life, what does that mean and what are the metrics and what was the return on investment so the City can be accountable to the public regarding how resources were invested in their priorities and the metrics that were used. Someday the City will be able to do that and track efficiencies and effectiveness, but that day is a ways away. The reality is the council lives at the policy level, not the level that determines what each staff member does. • Amendments to Biennial Budget 2025-2026 Edmonds City Council Approved Minutes November 2, 2024 Page 17 Amendment Title: ADD SHORT TITLE Amendment Number. CoyneStaff Wff�,•:a mr"emedn—b— Councilmember JCM Name[ Date Sub-fted. [Date] Fund [FUND, NUMBER) Agenda Packet: arann.•r wd�n Department' DEPARTMENT Deliberated: cw.o+sMl..rwwc. Pro ram: PROGRAM IF APPLICABLE Outcome: c1'e"v n1�"n ""'eYfe Budget Year. 2025 or 2026 or both 2025/2026 Arrser,dment Motion p make a motan to ) m n li JNarrat— describing your amendment) Amendment Pumose Intended outcomes) - (Bullet L zt D—b.All Funding Sources Describe funding — GO Me ? Costs enditure or Savi Reduction of Ex enditura . Describe on costs or savings] [Protect Status or N/AJ fl5CAL0ETAILS ACGpUWBARS Notes: Evpendrtures $0 Revenues rYk+eeu/>se..nw $0 Net Budget Impact $0 Ms. Peterson reviewed the above template that is proposed to be used as a method of communication that will be transparent, helpful and supportive to each other, staff and the community. She referred to the Amendment Purpose (intended outcomes) section which is a direct parallel to what departments were asked to provide, the intended outcomes of their programs. Providing a bulleted list of what a proposed amendment will accomplish could allow for collaboration and cohesion between what other councilmembers might think or what the department director thinks such as a different way to accomplish the same thing in a similar way. She referred to the Amendment Motion section, challenging councilmembers to go into this ready to make a motion, one sentence describing their proposed amendment. The amendment form is available in Word and can be filled in with as much verbiage as a councilmember wishes. The Amendment Description section can be used to provide justification or reasoning. She heard today a desire for councilmembers offering an amendment that would increase expenditures to also offer a counter to decrease expenditures. She suggested that could be mentioned on this form, but a companion amendment would be required. Councilmember Paine suggested doing an Amendment A and B, A adding an expenditure and B a reduction. COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER CHEN, TO EXTEND FOR 10 MINUTES. MOTION CARRIED (6-1). Ms. Peterson suggested councilmembers fill out the amendment form in Word, save it as a file and send it to her with an indication if assistance was needed with refining it, researching it, collaborating with directors to get their input, etc. Amendments will be included in the agenda packet as well as posted to the website to provide transparency to the public, staff and each other. Ms. Dunscombe and she plan to work on a collaborative spreadsheet to keep track of all the proposed ideas that will include staff -proposed changes with the impacts, outcome of deliberation, and total financial impact which will be updated weekly. • Timelines and Workplan o Council Meetings (Deliberation time): ■ November 4 (45 min + 45 min) ■ November 12 (90 minutes) ■ November 19 (90 minutes) Edmonds City Council Approved Minutes November 2, 2024 Page 18 ■ November 21 (3 hours) ■ November 23 (3 hours) ■ November 25 (3 hours) ■ November 26* (60 minutes) *target budget adoption date Ms. Peterson said the above is the amount of time currently on the extended agenda for budget deliberation. She suggested the earlier the council can begin considering amendments the better; for example, she did not recommend putting off amendments until November 23. She suggested the bulk of the amendments be formulated and included in the packet for the November 19 meeting which means they would need to be submitted to her by November 13. Council President Olson said in her experience, having been through the budget process before, whatever day the council decides to be done is the week to 10 days that people will put the time in. So this is almost exactly the right amount of time; it lets councilmembers know what they need to be doing this now. Ms. Peterson commented if the council concludes its deliberations, some of the additional meetings such as November 21, 23 and 25 could be eliminated. Councilmember Dotsch asked for the dates that the council needs to decide on a levy lid lift. Ms. Peterson answered a levy lid lift would go to the voters on a ballot so depending on the style of the levy, it would likely be on the general or primary election. Mayor Rosen said consideration has been given to April 2025 for the annexation vote and November 2025 for the levy lid lift. Council President Olson observed if council does not approve moving forward with annexation, the levy vote could be moved up to April because funds will be needed for a contract. Councilmember Dotsch commented if the council is going to ask the community for their support, there needs to be time to tell them what is happening and why. Mayor Rosen said he is personally feeling a sense of urgency regarding an annexation vote which would be in April. Councilmember Nand asked if the administration has heard from the RFA regarding town halls to support the annexation. Mayor Rosen relayed his understanding those would occur once council makes a decision to put annexation on the ballot. Council President Olson remarked the process is already behind the ideal timeline; it was hoped to have that discussion on November 12, but the pre -annexation plan and the contract alternative need to be done first and that hasn't been accomplished yet. ADJOURNMENT With no further business, the Council meeting was adjourned at 12:04 pm. CS: SCOTT PASSEY,-tTlof CLERK Edmonds City Council Approved Minutes November 2, 2024 Page 19