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08/14/2001 City CouncilApprove 7/31/01 Minutes pprove 8/7/01 Minutes Pond Issue EDMONDS CITY COUNCIL APPROVED MINUTES August 14, 2001 The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Gary Haakenson in the Council Chambers, 250 51h Avenue North, Edmonds, followed by the flag salute. ELECTED OFFICIALS PRESENT Gary Haakenson, Mayor Dave Earling, Council President Michael Plunkett, Councilmember Lora Petso, Councilmember Dave Orvis, Councilmember Thomas A. Miller, Councilmember ELECTED OFFICIALS ABSENT Richard Marin, Councilmember APPROVAL OF AGENDA STAFF PRESENT Greg Wean, Acting Police Chief Duane Bowman, Development Serv. Director Peggy Hetzler, Administrative Services Director Jim Larson, Assistant Admin. Services Director Dave Gebert, City Engineer Darrell Smith, Traffic Engineer Steve Koho, Treatment Plant Manager Sandy Chase, City Clerk COUNCILMEMBER MILLER MOVED, SECONDED BY COUNCILMEMBER ORVIS, FOR APPROVAL OF THE AGENDA. MOTION CARRIED UNANIMOUSLY. 2. CONSENT AGENDA ITEMS COUNCILMEMBER MILLER MOVED, SECONDED BY COUNCILMEMBER ORVIS, FOR APPROVAL OF THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: (A) ROLL CALL (B) APPROVAL OF CITY COUNCIL MEETING MINUTES OF JULY 31, 2001 (C) APPROVAL OF CITY COUNCIL MEETING MINUTES OF AUGUST 7, 2001 3. DISCUSSION AND POTENTIAL ACTION ON UPCOMING BOND ISSUE Administrative Services Director Peggy Hetzler provided an update on the efforts made to date to accomplish the capital improvement finance plan that the Council approved on June 26, 2001. Staff has made numerous presentations throughout the year regarding the high priority infrastructure needs and various ways to generate funding for these projects. On June 26 the Council authorized staff to begin the process of issuing limited tax general obligation (LTGO) bonds to finance some of the projects and to submit applications to the State's Public Works Trust Fund Loan (PWTF) program for projects that are eligible under that program. Edmonds City Council Approved Minutes August 14, 2001 Page I On August 8, 2001, staff received notice from the PWTF program that the application for the utility projects received the highest point rating in the State and was approved for funding subject to legislative approval. However, the application for the sidewalk and overlay projects fell two points short on the rating scale for approval. The consultant who helped to prepare the applications stated that the overlay projects do not stand a good chance of being funded in the 2002 program; it would be necessary to wait until the 2003 funding cycle to resubmit an application. The consultant indicated it was her opinion that the street overlay projects would probably never rank high enough to receive funding through that program. Regarding the sidewalk project, Ms. Hetzler stated staff could repackage the sidewalk proposal and resubmit it for the 2003 PWTF loan funding cycle. She also indicated that there has been discussion about incorporating public art into the sidewalk project. The City may want to consider reapplying for the sidewalks, and perhaps change the scope of the project depending on whether or not the public art component is incorporated. Ms. Hetzler stated that because the City received early notification about failure of the overlay projects, and the City has not yet issued the bonds for the Anderson Center improvements, the Library roof, and the meter rehab project, the City now has an opportunity to include the $750,000 that is needed for street overlays into this bond issue. This would increase the debt issued through LTGO from $2,225,000 to $2,975,000. The bonds are scheduled to be sold the week of August 27. At the August 21 Council meeting, staff will bring forward the bond ordinance and the Preliminary Official Statement for Council approval. Ms. Hetzler noted two advantages to including the overlay funding in the LTGO bond issue. First, interest rates are at a 25-year low, currently below 5%. The interest rate the City is looking at on the LTGO bond issue is 4.8%. In addition, by combining the overlay funding with the other approved projects into one bond issuance, the City will avoid incurring additional bond counsel and other issuance costs. Councilmember Orvis asked about the amount of the bond counsel and underwriting fees. Ms. Hetzler responded that the underwriting fees range between 2 and 3% of the total debt issued. The bond counsel cost is a fixed cost and it ranges between $10,000 and $15,000 per bond issue. Ms. Hetzler added that since the City is issuing less than $5 million this year, the City is not subject to the IRS arbitrage regulation. The City could borrow the money at 4.8% and would be able to invest the idle cash at between 6 and 6!/2%. During the time period when the money is not being spent, it is possible to earn interest in excess of the interest payment that will be made on the bond. Councilmember Petso inquired if there was $750,000 in urgent road needs? City Engineer Dave Gebert responded absolutely. There are over $1,300,000 on the latest list, which was a projection of what would not be able to be done this year. For Council's information, Mr. Gebert added that staff is working on a computer -based pavement management system, that includes a video inspection of the streets. This will provide a comprehensive database of the streets, and provide a 3 to 4 year plan easily. Responding to Councilmember Petso's inquiry about 91h Avenue, Mr. Gebert stated that a number of storm grates are being worked on; 91h Avenue is not scheduled to receive an overlay. Councilmember Petso asked if language will be in the bond documents stating these funds will be used for roads, or could the funds be used in other ways? Ms. Hetzler responded the way the Official Edmonds City Council Approved Minutes August 14, 2001 Page 2 Statement is worded, it states- that the proceeds will be used for Anderson Recreation Center improvements, utility projects, library roof replacement, and the meter rehab project, and if added, it would also state the street overlay project. It lists but all the projects but it is not specific by dollar amounts. The money could be reallocated between the projects. Councilmember Petso asked if the money could be used outside of the projects listed? Ms. Hetzler replied only with Council approval. The projects will be set up with budgets based on what has been presented to and approved by Council. Responding to further questions of Councilmember Petso, Mr. Gebert stated that the City is currently on a 46-year overlay cycle; ideally this cycle would be reduced to a 15 to 20 year cycle. By adding the $750,000 over a 3-year period, it will accelerate the program to try and improve the 46-year overlay cycle. Councilmember Petso stated that if the City is looking at increasing the annual funds for road maintenance, why borrow funds? Why not use the utility tax revenue? Ms. Hetzler stated it would be possible to immediately do $750,000 worth of improvements. By using the electrical utility tax revenue each year, it would be adding only $200,000 per year, and then it would not be possible to do other projects. The electrical utility tax leverages almost $3 million of projects for the City versus increasing street overlay by $200,000 per year. Councilmember Plunkett questioned if staff was confident that if the City were to reapply for funding from the PWTF for street overlay, that it would not be approved. Ms. Hetzler replied that this is year one of a two-year funding cycle. In discussions with PWTF staff and the City's consultant, it has been determined the program allocated nearly all the funds to applications that were submitted this year, and there is very little money left for next year to apply for. Street overlay does not represent the same urgent need as a project such as sewer improvement, and therefore does not rank as high on their priority scales. The City could resubmit an application for 2003, but that would put the City behind. Councilmember Plunkett commented that he believes it was the Council's consensus to expedite the street overlay program. If that is the case, the decision before the Council is to bond at a 25-year low rate, or wait until next year at a possible higher rate. Ms. Hetzler agreed. Council President Earling asked for additional information on the points system involved in the PWTF funds. Ms. Hetzler stated that staff was informed that there were many, many applications within one point range, and that it was a virtual impossibility that Edmonds' application would move higher on the scale because there are too many projects in line ahead. COUNCIL PRESIDENT EARLING MOVED, SECONDED BY COUNCILMEMBER MILLER, THAT THE LTGO BOND ISSUE INCLUDES FUNDING FOR THE STREET OVERLAY PROJECT. Councilmember Petso stated it was her understanding the sidewalk project is generating a high need factor and would probably receive PWTF money in either of the next two years. She stated that she would like to have staff bring sidewalks back with the idea of using PWTF money for that project. Councilmember Orvis stated he would vote in favor of the motion. He noted staff spoke about public urgency regarding street overlays, and it is his belief that there are a lot of projects that the City needs to start working on. This motion allows the City to do that. He was impressed that staff is not completely giving up on PWTF and is pressing forward with sidewalks for possible funding. Edmonds City Council Approved Minutes August 14, 2001 Page 3 MOTION CARRIED UNANIMOUSLY. onncil Council President Earling asked Councilmembers to check their schedules for the 2002 Council Retreat. Retreat The proposed dates are Friday and Saturday, February 8 and 9, and Friday and Saturday, February 15 and 16. The Council adjourned to committee meetings at 7:20 p.m. A GAkY f , MAYOR 'd 4� - - 2�!� 41 &� SANDRA S. CHASE, CITY CLERK Edmonds City Council Approved Minutes August 14, 2001 Page 4 AGENDA EDMONDS CITY COUNCIL Council Chambers, Public Safety Complex 250 5t' Avenue North 7:00 - 10:00 p.m. AUGUST 14, 2001 7:00 p.m. - Call to Order Flag Salute 1. Approval of Agenda 2. Consent Agenda Items (A) Roll Call (B) Approval of City Council Meeting Minutes of July 31, 2001 (C) Approval of City Council Meeting Minutes of August 7, 2001 3. (10 Min.) Discussion and Potential Action on Upcoming Bond Issue Adjourn to Committee Meetings The City Council Committee meetings are work sessions for the City Council and staff only. The meetings are open to the public but are not public hearings. The City Council will meet separately as committees in different meeting rooms as indicated below. 4. Finance Committee (Meeting Location: Jury/Executive Session Room) (A) Discussion of Financial Policies S. Public Safety Committee (Meeting Location: Police Training Room) (A) Discussion Concerning Neighborhood Traffic Control Note: The Community Services/Development Services Committee will not be meeting this evening. Parking and meeting rooms are accessible forpersons with disabilities. Contact the City Clerk at (425) 771-0245 with 24 hours advance notice for special accommodations. The Council Agenda appears on AT&T Cable, Channel 21.