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2024-11-26 Council Special MinutesEDMONDS CITY COUNCIL SPECIAL MEETING APPROVED MINUTES November 26, 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 Angie Feser, Parks, Rec., & Human Serv. Dir. Jessica Neill Hoyson, HR Director Shane Hope, Acting Planning & Dev. Dir. Jeff Taraday, City Attorney Scott Passey, City Clerk Jerrie Bevington, Camera Operator The Edmonds City Council meeting was called to order at 5:30 pm by Mayor Rosen in the Council Chambers, 250 5t' Avenue North, Edmonds, and virtually. 2. ROLL CALL City Clerk Scott Passey called the roll. All elected officials were present. 3. APPROVAL OF AGENDA COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY. 4. AUDIENCE COMMENTS Denise Nelson, Everett, City of Edmonds employee for nearly 10 years, expressed concerned with the idea of cutting staff hours. In the last 16 months she has been dealing with cancer which required many surgeries and over 50 doctor appointments, but due to how dedicated she is to her job, she has lost less than 3 weeks of work during those 16 weeks. If council reduced staff s hours to 32 or 35 hours/week, she would be unable to afford her cancer care. She wanted the council to see the person behind their proposed cuts and the effects those cuts have. She is the only breadwinner in her family, reducing her hours to 32 or 35 hours/week or a 10% cut will not allow her to supplement her income and she was unsure how she would pay for her cancer treatment. She hoped the council looked at Mayor Rosen's proposal as it seemed like the best proposal, one that would save valuable employees. Jennifer Lambert, Lake Forest Park, City of Edmonds employee, asked the council to allow the administration to determine how budget cuts should occur as it would be difficult for the council to Edmonds City Council Approved Minutes November 26, 2024 Page 1 understand exactly how each position impacts City operations. Losing staff members with years of experience and knowledge could be more of a detriment than relief to the budget. The city formed a taskforce to address budget concerns and solutions, she urged the council not to let that hard work be in vain. City employees already work under extreme workloads with limited staff in high stress situations. During the 17 years she has worked for Edmonds, her coworkers have become like extended family and support system, especially after recently losing her husband and becoming a single parent. Staying in Edmonds will not be as important if this family starts breaking up. This area is expensive to live in, cutting pay or hours does not mean staff can reduce their own expenses. For example, daycare is typically paid monthly, not by the day or hour so staff s daycare expenses will remain the same. Some proposed cuts will force staff to find employment elsewhere to maintain their cost of living and if the benefits begin disappearing, many staff will look for jobs with more manageable expectations. People in the industry talk to each other and know which cities treat their staff well; some of Edmonds' dedicated staff have already been approached by colleagues in other agencies with current and upcoming positions. There would be a great loss of knowledge and history if neighboring jurisdictions make competitive offers to the city's most experienced employees. Ms. Lambert continued, many staff members have worked for Edmonds for years if not decades and are cross -trained and very good at what they do. It would be difficulty, expensive and time consuming to fill the vacated positions and train new employees to the caliber of staff the city current has. She reminded the council their words have power; the council has proposed amendments without considering the people attached to those positions which has been hurtful and disrespectful. She felt council should apologize to Shannon Burley for making such an open and personal speculation of her position in a previous meeting. She recognized the council's task was not easy but reminded the employees did not create the deficit; this situation was created by and masked by elected officials. The growing financial emergency was facilitated by council in not holding officials and their hires accountable. The staff that council is choosing to suffer the weight of those actions are only guilty of doing their job to provide services to citizens. She urged the council to work with current city leaders to create a successful path forward while showing staff the respect they have earned. Trust the mayor, directors, and managers to develop a plan that is responsive to the current circumstances while creating the least amount of collateral damage to the organization and the people who work for it. Marissa Ruder, Lynnwood, City of Edmonds Plans Examiner, stated her opposition to the proposed Amendment C8 presented by Councilmember Chen, C15(A) presented by Councilmember Paine and C19 presented by Councilmember Dotsch. These irrational suggestions are disheartening seeing as many city employees witnessed their managers and directors pour an immense amount of energy into compiling a list of solid, rational budget cut decisions provided to council in the month of October. The city relies on those individuals to make the best decisions they can for their respective departments and in return they have been as transparent as possible during this endeavor. Staff is painfully aware they will all experience a pinch during the next couple years and are ready to take charge. However, the proposed amendments will severely dwindle the remaining capacity that each manager and director was depending on to make it possible to stay afloat. She is the sole provider of her household, much like many of her colleagues; these proposals are outright disgusting. Earlier this year, she left private practice as an architectural associate and designer of K-12 educational facilities, knowing she wanted to invest her time, energy and passion into the local community in which she lives. Ms. Rutler continued, any of the amendments suggested by council would reduce and encumber the ability of the planning and development employees to do their jobs. The planning and development department is revenue based and revenue will be directly impacted by the proposed reduced hours, fewer permits will be reviewed and customers at the counter will also feel the impact. People's livelihoods are at stake with the potential reduction of 115t1i of their pay. She honestly didn't know how she would make ends meet to keep a roof over her family's head and food on the table. The reduce work week proposals do not provide current Edmonds City Council Approved Minutes November 26, 2024 Page 2 city employees enough bandwidth to pursue a second job to fill the gap in their income and the city will lose good, talented, professional, and passionate employees. She supported the mayor's plan and strongly recommended the council reconsider these preposterous amendments. It will be tough, but at least the intent is to save jobs and support the community they are committed to serving. As council gathers with their family and friends during this holiday season, she urged them to take the time to reflect on the decision they have to make. As they look into their loved ones' eyes, she suggested they think about all the families looking into their families eyes with worry and wondering how they will make ends meet in 2025 and 2026. The lack of compassion for the human factor is evident with the city council. Rose Haas, Seattle, City of Edmonds Planner, expressed her opposition to the proposed budget amendments that would result in additional cuts to staff, including decreasing the work week to 32 or 35 hours. She is the primary income earner in her home. The decision to cut hours will push many city employees to look for more lucrative positions within their fields, within the private sector or with other municipalities that offer the ability to work a full work week as is the norm. A 32-hour work week would reduce employees' take-home pay by 20%, for her, the equivalent of 14 months of preschool tuition for her toddler or 7 mortgage payments. A 32-hour work week would reduce her take-home pay by 12.5%, the equivalent of 9 months of preschool tuition or 4 mortgage payments, pay cuts her family cannot absorb. Cutting work hours will result in many talented employees leaving the city to work elsewhere. As anyone who has owned a business can attest, retaining staff is more cost effective than training new staff. As a member of the planning division for the last 2%2 years, their team has been chronically understaff, leaving all team members with untenable workloads at times. The division is currently hiring two positions, a reduced work week with pay 12.5-20% less than comparable municipalities is not attractive to qualified, professional candidates. She summarized cutting staff hours is a myopic solution that will harm staff retention and hinder talent acquisition, something hardworking and understaffed employees simply cannot afford. She urged the council to accept the mayor's budget proposal without additional staff reductions. Mindy Woods, Edmonds, Edmonds' Human Services Program Manager, spoke in opposition to any additional cuts, whether hours or jobs. The parks, recreation and human services division is already overworked and understaffed; she could not imagine how parks could earn any revenue if any additional cuts were made because they are already down to a skeleton crew. She is the only person in human services and already her job is being hindered by the closure of the neighborhood office where she runs all her programs. Without that office where the bulk of people come to receive services and respite because they have no where else to go as well as be able to develop relationships to build rapport and understand where people are coming from, their circumstances and how to best serve them, people will be lost in the wind. Without those connections, she will receive more calls from the public about people who need help; there is only one of her and she cannot respond to all those requests. She is also facing health challenges and her health insurance is very important to her. Morale is very low among city employees right now; she recognized the city was facing hard times and difficult decisions must be made, but she urged the council not to make those decisions on the backs of people who work hard to serve the city and do the best they can for the residents. As a resident of Edmonds, she feared what else would be coming if other services are cut. She implored the council to pass the mayor's budget proposal. Alec Rowlands, Edmonds, spoke on behalf of the city employees and the tremendous resource that personnel are to any organization, probably greater than the organization's fixed assets. He urged the council not to cut salaries or hours. His concern was this would force some of the city's most important employees to seek employment elsewhere because everyone, including the city, is feeling the crunch of the current recession. He wanted to ensure the city retains its most valuable asset. 5. COUNCIL BUSINESS 1. COUNCIL 2025-26 BUDGET DELIBERATIONS, INCLUDING POSSIBLE VOTING ON BUDGET AMENDMENTS PROPOSED BY COUNCILMEMBERS DURING MEETING Edmonds City Council Approved Minutes November 26, 2024 Page 3 COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO HEAR STAFF RECOMMENDED CHANGES FIRST. MOTION CARRIED UNANIMOUSLY. Examiner Work - Staff Recommendation #11 Acting Finance Director Kim Dunscombe explained during the transition to new leadership and the development of two different budgets, several professional services requests that align with ongoing biennial budget processes were inadvertently excluded from the proposed budget. These requests reflect routine, recurring work that is essential to maintaining operations, and do not represent an expansion of the work plan. The first is the hearing examiner; she requested council approve the addition of $15,000 in professional services to the planning & development department to comply with City code. COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, ADD $15,000 TO PLANNING & DEVELOPMENT FOR HEARING EXAMINER FUNCTION. MOTION CARRIED UNANIMOUSLY. Minute Taker - Staff Recommendation #12 Ms. Dunscombe reiterated several professional services were inadvertently excluded from the proposed budget. This is a request to add $10,000 of professionals services to planning & development, the typical annual cost for contacted services to take minutes for evening meetings of the planning board and the architectural design board (ADB). COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER ECK, TO APPROVE FUNDING FOR MINUTE TAKER SERVICES IN 2025 AND 2026. Council President Olson commented there has been some conversation about the possibly of putting a pause on any of the non -mandatory boards. She asked if this could be brought back as a budget amendment and removed from the budget if council ended up approving such a pause. She was aware the planning board was mandatory but was unsure if the ADB was. Ms. Dunscombe answered that would be a great way to keep in line with budgeting by priorities (BBP) concept and to keep professional services in check throughout the year. Councilmember Tibbott observed this list of amendments were all from the General Fund; he asked if Ms. Dunscombe was offering cost reductions to offset these amendments. Ms. Dunscombe answered the way they are presented she did not have an offset. They total $49,000 and it would come from ending fund balance in 2025. Councilmember Tibbott observed to stay within the proposed budget, council would need to look for additional cuts. Ms. Dunscombe answered that was correct, but envisioned $49,000 was an easy amount to achieve in savings throughout the year. Councilmember Tibbott summarized these are essential services and that normally would be included in the budget. Ms. Dunscombe agreed. Councilmember Paine observed if the funds weren't used, they would remain in the General Fund. Ms. Dunscombe agreed. Councilmember Eck relayed her understanding that the planning board meets frequently during most months. She asked how often the ADB meets. Acting Planning & Development Director Shane Hope advised the planning board is the bulk of $10,000; the ADB is approximately'/4 due to the number of ADB meetings. Councilmember Eck said she will support this since most of it is related to the planning board. She wondered if the ADB could use Al to take notes since they meet less frequently and suggested considering that method for boards other than the planning board. Councilmember Chen wondered if the 2023 audit resulted in any General Fund balance restatement. Ms. Dunscombe answered not at this time, the 2023 ending balance is still $2.49M. Councilmember Chen Edmonds City Council Approved Minutes November 26, 2024 Page 4 observed there were funds available in the ending fund balance if it was necessary to access those funds. Ms. Dunscombe responded that was the council's decision in 2025. Councilmember Chen recalled in the past the balance was dramatically changed. Ms. Dunscombe advised in the proposed budget the estimated yearend 2024 ending fund balance was around $700,000, her mid -year estimate of $900,000 is closer to where it will be and that is the fund balance she would suggest be used for these expenditures. Councilmember Chen observed it will not result in a negative fund balance if more of the General Fund balance is used. Ms. Dunscombe answered these staff recommendations will not venture into that area. Obviously, depending on other decisions made tonight, there may need to be further discussion at the time amendments are made. Councilmember Nand asked if the spending authority request to raise 2024 by $550,000 had been accounted for in the General Fund for 2025 or will that still be a consideration after all the amendments are made. Ms. Dunscombe answered that has already been considered and is part of the proposed budget. Councilmember Nand commented the lifting of the spending authority hasn't been authorized by council yet. Ms. Dunscombe answered the $550,000 to raise the spending authority for 2024 has already been approved and expenditures are already included in the proposed budget. MOTION CARRIED UNANIMOUSLY. Alliance for Housing Affordability Membership— Staff Recommendation #13 Ms. Dunscombe explained this is an increase in spending authority of the General Fund by $6,250 for the Alliance for Housing Affordable (AHA) membership fee. COUNCILMEMBER ECK MOVED, SECONDED BY COUNCILMEMBER PAINE, TO APPROVE THE ALLIANCE FOR HOUSING AFFORDABILITY MEMBERSHIP FOR 2025/2026. Council President Olson asked what the City gets and whether there is value in pausing this membership based on the fiscal emergency. Ms. Hope answered AHA, which began with the Snohomish County Tomorrow process, is a regional effort to provide data and planning assistance related to housing. The $6250 is much less than each jurisdiction having a staff person and represents pooling resources to share the cost. Edmonds has participated in AHA for some years and found it useful. Councilmember Nand advised she was the AHA liaison in 2023 and recalled AHA Program Manager Chris Collier saying he felt his expertise was being underutilized by cities in Snohomish County; he has a lot of data and input that could benefit cities' housing discussions and plan development in the context of what is happening in the rest of Snohomish County. If the City will be dedicating these funds to AHA, she recommended the City fully utilize Mr. Collier's services. Councilmember Paine relayed her understanding that Mr. Collier is the data scientist that does a lot of the number crunching that helps support housing priorities and disaggregating data for Snohomish County in alignment with HASCO policies and understanding the economic demographics. Ms. Hope agreed, Mr. Collier is the only staff person for AHA, housed at the Housing Authority of Snohomish County and his salary and benefits are paid by participating cities. He has provided useful data to the City in the past and she anticipated he would be involved in providing data next year as the City considers updates to the code as well as tracking progress as compared to neighboring cities. Councilmember Eck commented she did not see this as a nice to have, she viewed it as a need to have. It is important the City has to make headway with regard to housing. This is a small investment compared to hiring a consultant or devoting City staff to this effort. MOTION CARRIED UNANIMOUSLY. Edmonds City Council Approved Minutes November 26, 2024 Page 5 Arborist Services — Staff Recommendation #14 Ms. Dunscombe relayed cutting and pruning trees is regulated by the City code. The development team does not have any trained arborists on staff. The request is for $15,000 to fund arborist services as needed. COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCILMEMBER NAND, TO APPROVE FUNDING FOR ARBORIST SERVICES FOR 2025 AND 2026 UP TO $15,000. Council President Olson said she thought there was an arborist on staff. Ms. Hope answered there was at one time but there was not now. Council President Olson observed that was not Debra Dill's role, but she is an arborist. Ms. Hope said she was unsure if she was working for another department, but she does not provide services for planning & development. Parks, Recreation, & Human Services Director Angie Feser explained parks & recreation has a field arborist and on -call contracts for arborist services as well. It was her understanding planning & development's request was for an urban forester to review plans. The parks & recreation arborist does in -field work. MOTION CARRIED UNANIMOUSLY. Digitization Service - Staff Recommendation #15 Ms. Dunscombe explained planning & development has been digitizing paper records that must be preserved. This amount would allow the planning division's paper archives to be digitized and findable when needed. The request is $10,000 in 2025 to accommodate this work. COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO APPROVE DIGITIZATION SERVICES IN 2025 IN THE AMOUNT OF $10,000. Councilmember Tibbott commented this is an ongoing program that adds efficiency to departments and future cost savings and is a valuable investment. Council President Olson suggested costs that can be put off should be. The paper records are less efficient, but she supported not doing the digitization this year. Councilmember Dotsch observed the recommendation says 2025 and 2026. Ms. Dunscombe clarified it is for 2025 only. Councilmember Chen suggested the new ERP system could help with this effort instead of spending more money on digitization. Ms. Dunscombe answered it may or may not, depending on what records this relates to, she was unsure the new ERP system would accommodate them. The ERP system will help with purchase orders and contracts, but the ERP is not the appropriate system for permits and plans. Ms. Hope advised this is for permits, plans, site review and large format which are different than contracts and purchase orders. Councilmember Chen asked if this was hiring more hours to do the work or would an existing employee do the work. Ms. Hope answered it is a combination; this has been ongoing for several years, digitizing a chunk of the paperwork each year and this is wrapping up the major part of that last effort. Staff will provide some assistance, but it is much faster using professional services. The $10,000 is only for the professional services portion. Councilmember Chen said he understands this process because he does it on a daily basis himself. He suggested existing staff step up this effort to help ease the financial crisis and delay this given the budget situation. Councilmember Nand said she was a Starbucks file clerk when she was 21 years old and strongly supports digitization. She understood how many hours it takes to pull documents from a paper archive, distribute them, and then refile them. Getting these documents online and having OCR recognition so they are Edmonds City Council Approved Minutes November 26, 2024 Page 6 searchable will save FTE hours so the return on investment for $10,000, even though the City is in a fiscal crisis, is warranted. She will support the amendment. Councilmember Paine said she worked in permitting and knew about large format. Some developers will submit plans electronically so they do not have to be scanned. The scanned information is important for the historical record. This respects staff s time every day so they are not chasing paper. She recalled permitting work with plans in rolled up tubes; having that digitized makes it so much easier. She was supportive of the amendment. Councilmember Eck said she was not interested in spending just to spend, but was interested in efficiencies. She asked if there was an estimate of how many FTEs this would save in the short and long term. Ms. Hope said she did not have that information, but envisioned it would save many hours of time on an ongoing basis. The City is required to retain these records and be able to access them. Councilmember Eck envisioned it was a large volume of paperwork and tracking down paper in the future risks inaccuracies. Ms. Hope agreed, explaining the professional services have the expertise to make the records searchable. Digitizing the records saves time for people inquiring about a project, but also staff time to track the records. Councilmember Eck summarized it is a fine line between investing money and saving money. She recognized not all expenditures pay off quickly, but envisioned this would have a good return on investment. She expressed support for the amendment. Councilmember Chen said he 100% supports efficiency and digitalization. In his experience if an individual has to go through each department and learn what paperwork needs to be scanned, it would require more time training and clarifying the job duty than having the employee working on it scan it and put it in folder. Speaking from his own experience, it would be more efficient to do it that way than hiring professional services. Ms. Hope responded the volume of paperwork with sets of plans and sometimes large format paper requires a great deal of work. When staff is at the counter servicing customers, it is hard to do all those things efficiently at the same time. The City has relied on permit coordinator staff for assistance so there is not much training of the professional services staff; it is a pretty seamless handoff to get the documents in a retrievable format. Councilmember Dotsch recalled going from paper dental charts to digital, time is time and the ability to scan records so anyone can it access it is valuable. This is a worthwhile expenditure to save time and grief. MOTION CARRIED (6-1) COUNCIL PRESIDENT OLSON VOTING NO. Interpretation Services — Staff Recommendation #16 Ms. Dunscombe described the request for $2,500 in General Fund money to provide interpretation services in 2025 and 2026 for the planning & development department. COUNCILMEMBER ECK MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO APPROVE FUNDING FOR INTERPRETATION SERVICES IN 2025 AND 2026. Councilmember Eck commented if Edmonds' goal is to treat everybody equitably, this is a small investment to ensure conversations are efficient, and the City is caring for everyone who is seeking assistance. Councilmember Paine commented on the importance, particularly with permitting, of ensuring what is being discussed is absolutely clear with regard to property and projects. $2500 is not a lot, but when it is needed, it absolutely is needed. Councilmember Nand asked what interpretation services are typically used for in planning & development. Ms. Hope answered it is primarily for people seeking permits. There are residents for whom English is not their first language. It can be complicated to explain permit requirements, land use regulations, construction Edmonds City Council Approved Minutes November 26, 2024 Page 7 requirements, etc. and at times people bring their children or another person to help explain. Interpretation services help provide residents a more dependable option. Councilmember Nand asked if this is the same phone -based vendor that the courts use. Ms. Hope answered she was unsure if it was the same one, but was aware there were a pool of interpreters that can be contacted. Councilmember Nand expressed her support for the amendment. Council President Olson commented this is a very small amount and she could understand it was needed at times. She reminded the City pays an additional benefit to employees who speak another language. She encouraged departments to utilize existing employees to provide interpretation services to realize the return on investment from the City paying that additional benefit. She suggested creating a list of languages staff members speak. Councilmember Chen expressed appreciation for this budget amendment, but was unsure how it would work with this small amount. It is a necessary service for the City to have for non-English speakers, but he wondered if other departments needed interpretation services and anticipated $2500 would not be adequate. There are so many services the City wants to provide, but there is a budget crisis. Each individual budget amendment sounds so necessary which makes it hard for council to say no. The council is trying to do its job and all the fingers and fists are pointed at the council. He urged staff to be thoughtful in their requests, summarizing we're all in this together. Ms. Hope appreciated those sentiments, relaying she felt badly bringing these amendments to council; they should have been in the budget packet, but due to the transition that happened at the time the budget was put together, there wasn't staff that knew to include all these things in the budget process. Staff worked very hard on the budget, but a things got left out. Councilmember Paine asked if the City pays a bonus for employees speak additional languages. HR Director Jessica Neill Hoyson answered there is bilingual pay for employees who provide interpreter services as part of their position with the City. It would be up to the director to notify HR that they have an employee providing those interpreter services as part of their job and then they would receive the additional compensation. Councilmember Paine relayed she thought that was only the police department. Ms. Neill Hoyson advised HR added that to all the contracts. Councilmember Chen commented English is his 3' or 4t1' language so he is aware of the importance of this service. He recalled when taking his mom to the hospital, that was one of the essential services his mom required and needed. He appreciated this amendment, but wanted to be thoughtful that the City is heading into a budget crisis and if expenditures keep increasing without revenue, the budget is heading in the wrong direction. MOTION CARRIED UNANIMOUSLY. Historical Property Inventory - Staff Recommendation #17 Ms. Dunscombe relayed this amendment adds $15,000 of spending authority for professional services in planning & development and is offset by a $15,000 grant for an historical property inventory. COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER DOTSCH, TO APPROVE THIS BUDGET AMENDMENT FOR $15,000, REIMBURSED BY A GRANT, FOR THE COMPREHENSIVE INVENTORY OF MID CENTURY HOUSES IN THE SHERWOOD VILLAGE NEIGHBORHOOD. MOTION CARRIED UNANIMOUSLY. Councilmember Tibbott relayed he provided a motion to the council earlier for consideration tonight. COUNCILMEMBER TIBBOTT MOVED, SECONDED BY COUNCIL PRESIDENT OLSON, TO DIRECT THE ADMINISTRATION TO TARGET A REDUCTION IN THE PROPOSED BUDGET BY AN ADDITIONAL $2 MILLION BEGINNING ON APRIL 1, 2025. THE $2 MILLION IN Edmonds City Council Approved Minutes November 26, 2024 Page 8 PROPOSED BUDGET CUTS SHALL BE BROUGHT TO THE COUNCIL FOR APPROVAL PRIOR TO APRIL 1ST AND THEN PRORATED FOR THAT DATE. AND FURTHER, THE SAVINGS IDENTIFIED WOULD BE APPLIED TO THE LOAN AMOUNT IN THE PROPOSED BUDGET BY THE PRORATED AMOUNT. Councilmember Tibbott commented there have been extensive discussions regarding whether to reduce wages, hours or a percentage of wages and benefits. It was recommended there would be greater flexibility by choosing a dollar amount. In this motion he proposed a target of $2M to be identified between now and April 1, 2025. Approval of any of those budget cuts would need to be brought to council prior to April 1; he would leave it up to the administration when to bring those to council. If the motion is approved, the $2M would be prorated for the budget year following the first quarter and any savings would be applied toward the $7.5M loan in the proposed budget,. Councilmember Nand asked if Ms. Dunscombe could provide a rough estimate of the savings to the City by repaying an internal fund loan of $5.5M instead of $7.5M over a 3-year period. Ms. Dunscombe answered she did not have that off the top of her head. Councilmember Nand estimated the cost of an FTE was about $99,000 - $100,000. The motion would be a request to cut an additional 20 positions in 2025. Ms. Dunscombe relayed her estimate for an average FTE was $120,000. Councilmember Nand responded the motion would result in an additional 13-15 people being laid off. Mayor Rosen explained one of the reasons this was proposed as alternative was that it was not specific to salaries or benefits and gives the administration the opportunity to look at other things. For example, it could be looking at the benefit package, other ways of staffing such as j ob sharing. The goal was the ultimate amount of flexibility rather than a 10% cut which was very specific where it would come from or the 32 or 35-hour work week. It was administration's opinion that this method gave them ultimate flexibility in making decisions and also honored the BBP process and looking at the community and council's priorities, looking at the ratings and the attributes. This method provided more ability to honor that system and be flexible. Given the amount of salaries in the budget, there likely would be staff reductions. Councilmember Nand stated her opposition to Councilmember Tibbott's amendment. She has confidence in Ms. Dunscombe's calculation that the enterprise funds can support an interfund transfer of $7.5M to help forestall additional layoffs in 2025 and 2026. A lot is being asked of the City's workforce already and asking them to squeeze out an additional 10-15 FTE or give up some of their benefits through bargaining would be unnecessary and not something she could personally support. She summarized she has great respect for the City's workforce and everything they do. COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCILMEMBER ECK, TO AMEND TO REDUCE THE AMOUNT FROM $2 MILLION TO $1,660,000 TO REDUCE THE IMPACT ON STAFF AND EASE THE PAIN THROUGH THIS TRANSITION. Councilmember Paine relayed the council was presented with a balanced budget but it included a big loan, a loan that will be really challenging. The council has been asked to find more cuts to reduce the repayment of the $7.5M loan from the utilities fund which resulted in proposals for a 32-hour and 35-hours work weeks, and a 10% reduction. That loan has to be repaid within three years so the council was trying to find ways to offset the challenge of repaying the loan due to other big issues that will need to be sorted out next year. Her proposal is to reduce the $2M by 1/3 which would offer a cushion to see where thing are following the first vote next year, annexation into the RFA. The council is making honest and transparent steps to manage the challenges responsibly. Councilmember Tibbott's motion would not start this process before April 1 to see if there were other opportunity and ease off the immediacy of the cuts. Councilmember Eck expressed support for the amendment. Hearing directly from staff was impactful and vital and she respected staff for sharing their voices. Council takes full responsibility, this is their job. It Edmonds City Council Approved Minutes November 26, 2024 Page 9 was not lost on council that the decisions they make have important consequences on staff and their families. There were a lot of cuts in the proposed budget and it seems prudent to take a little extra time to see what else could be considered before making even more drastic cuts to staff in departments that will already be struggling with maintaining services levels. Council President Olson commented this is not matter of deciding what to spend because the council is spending all money it has to spend; this is about how much to borrow. The amount of borrowing that was in the originally proposed budget was $7.5M. The intent of council which began a week or so ago and was represented by the reduced work week was about $2.3M. Then the discussion was to reduce that to $2M and now the proposal is $1.66 M. The City can't borrow that much because it can't pay it back; the only way to pay that back is via a significant levy which the council can and will ask for because she personally misses the people and the services the council was looking at cutting, she missed the feeling in Edmonds that would be lost by not doing what has been enjoyed in the past, but can no longer afford. She has a lot of passion and enthusiasm about finding new revenue sources and was personally willing to support a levy, but the council cannot count on a levy because there won't be time to recover if the levy is not approved. As hard a reality as this is, she was in favor of a $2.3M cut which still may not be enough. She cannot support this amendment and she hoped the council would support the $2M that was originally proposed as that is the very minimum the council can do. Councilmember Tibbott did not support amendment as he agreed $2M was the least the council should be doing in terms of cuts. The reason he proposed that amount was it offered the most flexibility, not just for wages and benefits, but also programs, purchases, etc. Savings in a variety of areas could allow the City to reach $2M, not just cuts to staff. He expressed support for the original amount. Councilmember Chen did not support the amendment. Based on the proposal, the original amount is $2M, but language is to prorated it throughout the year. If it is implemented April 1, the actual budget cuts for 2025 is $1.5M which is even less than $1.66M. As other councilmembers have stated, the council has a difficult job; councilmembers are real people with jobs and families. The reason the council is going through this difficult process was to try to save City employees' jobs. In 2023, $6.5M in ARPA funds was used keep the City afloat. In 2024, the General Fund balance and other funds were used to keep the City afloat. In 2025, there is no longer any ARPA money. The City is already in the red and to cover the red, one of the brilliant ideas was to borrow internally, but borrowing creates another risk. The utility enterprise funds are not revenue generating funds, they are self-sustaining operations. Borrowing potentially creates a tricky situation for the wastewater treatment plant and utilities which are essential, crucial services. Councilmember Chen continued, the council is doing what it can to identify budget cuts such as a 32 or 35 hour work week, a 10% cut, those are ideas for discussion. The fact that the council hears from the City's dedicated staff, that's what this process is about. He appreciated the administration developing another proposal, to let the administration determine where the opportunities are and which programs can be reduced and not necessarily employees or hours, but to explore programs, purchases, and other opportunities and he supported that approach. He wanted the public to know the council's efforts are based on good intentions in an attempt to save jobs; the council does want to cut employees or cut their pay. Everett voters rejected a levy that represented a 44% increase, Mukilteo's 40% increase was also rejected. Edmonds would be asking for a 100-160% increase if further cuts are not made; City employees who live in Edmonds will pay that as well. He reminded we're all in this together and increased revenues and reduced expenditures is the only way to get through this difficult time together. He expressed support for the main motion to allow the administration to identify appropriate places to make cuts. COUNCILMEMBER NAND MOVED, SECONDED BY OLSON TO EXTEND TO 6:55. MOTION CARRIED UNANIMOUSLY. Edmonds City Council Approved Minutes November 26, 2024 Page 10 Councilmember Nand defended the proposed $7.5M internal fund loan. She has been accused in My Edmonds News for treating the $7.5M loan as credit card debt; someone asked whether Councilmember Nand knew how to control her own credit card debt. She thought that was a great analogy and wanted to explain to the public, to the budget hawks who nitpick at her and teach her a lot, this is not like credit card debt, not like the City bonding for $7.5M. This is an internal transfer of money in a different pot to a pot that is struggling to fund basic levels of operation. The finance department worked very hard to calculate the $7.5M amount to ensure the enterprise funds would remain viable and be able to fund all the necessary maintenance and still maintain adequate reserves if the various budget scenarios related to RFA annexation, levy lid lift, etc. were approved. Councilmember Nand continued, in the analogy, if she doesn't have enough money in her main checking account, she will take money out of her savings account. That doesn't mean she doesn't know how to control her credit card debt, it is internal, not her going to American Express and asking for $5,000 to buy a new bag. She did not understand the level of discomfort with an internal, interfund transfer that is supported by the finance department in their original budget proposal. It is not like credit card debt, it is not an external debtor that the City will have to repay $7.5M to; the City will be repaying its own enterprise fund. It is just shifting money from one pot to another to help the City get through lean years, retain staff that make the City function, and then try to fix what's wrong with the structural budget gap. She did not care if the budget hawks want to make fun of her and accuse her of having credit card debt and being fiscally irresponsible because she values the City's workforce. Councilmember Chen explained the $7.5M loan is not borrowing from a savings account; the City doesn't have any savings. The savings account was the General Fund balance reserve and now the City is down to the contingency reserve. The $7.5M belongs to a separate enterprise fund, the utilities, which are self- sustaining and it is not the City's savings account. Councilmember Eck commented whether it's $2.3M, $2M, $1.66M, or $1.5M, a large percentage of that has to be salaries and benefits because salaries and benefits are the largest part of the budget regardless of sector. The budget proposed by the administration already includes quite a few staff cuts. A reduction of $1.5M or $1.6M in the April/March would allow time to determine if that level of cuts still need to be made. The truth is a $2M cut will be a lot of staff. She recognized the administration would have the discretion to figure out where those cuts would come from, but for all practicality, a large percentage would come from staff and benefits. This conversation is incredibly useful and necessary to ensure the council is covering all bases before those cuts are made. Council President Olson said the credit given to Ms. Dunscombe is appropriate with regard to saying $7.5M is an amount that can be borrowed from the utility funds in the short term. The ability to pay it back is the other side of that coin; $7.5M is a significant part of the City's total budget revenues each year and it has to be paid back in 3 years, something the state auditor's office (SAO) looks at during audits. Earlier people were referring to what happens with the RFA vote; the 2025/2026 budget assumed approval of the RFA annexation but did not assume passage of a levy. There is no reason to talk about whether the RFA annexation vote passes or not or whether it will inform future budget cuts because the situation will only be worse if that eventuality doesn't happen. She cautioned against thinking there was more time; there isn't more time although she wished there was. Councilmember Dotsch recalled the $7.5M loan from the utilities was not calculated based on what was needed, the $7.5M was the maximum amount that could be borrowed and not put those funds at risk. The money in the utility fund is provided by residents' utilities and it earns 5% so repayment of the loan includes that interest. Ms. Dunscombe explained $7.5M was the amount needed to balance the budget; the 2025 ending fund balance is about $600,000. That amount was necessary to get the ending fund balance above zero. A replenishment plan hasn't been included in the proposed budget and is important to consider. The Edmonds City Council Approved Minutes November 26, 2024 Page 11 $7.5M was chosen to bring the General Fund above zero and obviously she made sure the utility funds could afford that amount. She acknowledged repayment will be difficult and the SAO will look to having that loan repaid within three years. The SAO website in the BARS manual states not repaying the loan would be a permanent diversion of funds which would lead to an audit finding. The City receives audit findings all the time and she was not saying that was the end of the world, but the bond market also would not look kindly on stretching out that loan although she did not anticipate the City going out for bonds for major capital projects on the general government side any time soon. Those were two downfalls of not being able to pay back the loan in the three years that SAO would like to see. Councilmember Dotsch pointed out the proposed budget also calls for a $5M loan in 2026. Ms. Dunscombe agreed it does, advising the process kind of ran out of time and there needs to be a lot of thought and consideration into the amount of a levy lid lift, what it's for, whether it's permanent, one time, etc. before including it in the budget and strategic forecast. Councilmember Dotsch concluded to balance the budget, the City is borrowing $12.5M plus interest for these two years. Ms. Dunscombe answered that is correct; borrowing $5M from the utilities in 2026 runs the utilities a little tight and during the mid -biennium budget review, that $5M loan needs to turn into some other revenue source. AMENDMENT FAILED (3-4), COUNCILMEMBERS ECK, PAINE AND NAND VOTING YES. City Attorney Jeff Taraday requested clarification of the motion; the way the motion is phrased it appears it is to not reducing the General Fund appropriation by a fixed dollar amount, it is going forward with the General Fund appropriation as proposed and asking the administration to come back next year and seek reduction in the budget. Mayor Rosen said to approve the motion, the council has to give spending authority which would have to reflect a real number. Mr. Taraday responded there will be a real number appropriated in the General Fund and it is currently whatever the mayor's budget proposed plus whatever amendments have been adopted. There is a difference between in 2024 saying we will reduce the General Fund appropriation by some fixed dollar amount versus saying we will go forward with the currently proposed General Fund appropriation and then seek to reduce that amount in 2025.One big difference between those two is if the intent is to reduce the budget next year, there will need to be five votes, not four, to do it so he encouraged the council to be mindful with regard to what they wanted to do via this motion. Mayor Rosen relayed his assumption the intent was to reduce the appropriation by $2M with these directions and qualifiers. Councilmember Tibbott relayed his understanding if it is prorated, the appropriation would be $1.5M. Mr. Taraday offered to rephrase the motion at the regular meeting. Mayor Rosen asked how to advance this to the next meeting in accordance with Robert's Rules. Mr. Taraday answered it really doesn't matter because this same item is on the regular meeting agenda. He suggested tabling the motion and taking it from the table at the next meeting. COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCILMEMBER DOTSCH, TO TABLE TO THE NEXT MEETING. MOTION CARRIED UNANIMOUSLY. ADJOURNMENT With no further business, the council meeting was adjourned at 6:55 pm. CS: SCOTT PASSEY;tKCLERK Edmonds City Council Approved Minutes November 26, 2024 Page 12