Loading...
09/20/2011 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES September 20, 2011 The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Cooper in the Council Chambers, 250 5`" Avenue North, Edmonds. The meeting was opened with the flag salute. ELECTED OFFICIALS PRESENT Mike Cooper, Mayor Strom Peterson, Council President Steve Bernheim, Councilmember Michael Plunkett, Councilmember Lora Petso, Councilmember Adrienne Fraley- Monillas, Councilmember Diane Buckshnis, Councilmember D. J. Wilson, Councilmember (arrived 7:35 p.m.) ALSO PRESENT Alex Springer, Student Representative 1. APPROVAL OF AGENDA STAFF PRESENT Al Compaan, Police Chief Phil Williams, Public Works Director Jim Tarte, Interim Finance Director Carrie Hite, Parks & Recreation Director Rob Chave, Planning Manager Carl Nelson, CIO Debi Humann, Human Resources Director Rob English, City Engineer Jeff Taraday, City Attorney Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY. (Councilmember Wilson was not present for the vote.) 2. CONSENT AGENDA ITEMS COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO APPROVE THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. (Councilmember Wilson was not present for the vote.) The agenda items approved are as follows: A. ROLL CALL B. APPROVAL OF CITY COUNCIL MEETING MINUTES OF SEPTEMBER 6, 2011. C. APPROVAL OF CITY COUNCIL MEETING MINUTES OF SEPTEMBER 13, 2011. D. APPROVAL OF CLAIM CHECKS #127565 THROUGH #127699 DATED SEPTEMBER 8, 2011 FOR $180,139.88, AND CLAIM CHECKS #127700 THROUGH #127862 DATED SEPTEMBER 15, 2011 FOR $2,114,921.93. E. CONFIRMATION OF MAYOR'S APPOINTMENT OF SHAWN HUNSTOCK AS THE FINANCE DIRECTOR. F. UPDATE OF SCOPE OF SERVICES OF WEB SITE PROFESSIONAL SERVICES AGREEMENT. Edmonds City Council Approved Minutes September 20, 2011 Page 1 G. AUTHORIZATION TO ADVERTISE A REQUEST FOR QUALIFICATIONS TO COMPLETE DESIGN AND RIGHT -OF -WAY ACQUISITION SERVICES FOR THE 212TH ST SW AT 76TH AVE W INTERSECTION. H. AUTHORIZATION TO ADVERTISE A REQUEST FOR QUALIFICATIONS (RFQ) FOR CONSULTANT SERVICES TO UPDATE THE SANITARY SEWER COMPREHENSIVE PLAN. I. AUTHORIZATION FOR MAYOR TO SIGN EASEMENT GRANTED TO THE CITY OF EDMONDS BY SOUND TRANSIT. I COLLECTIVE BARGAINING AGREEMENT - LAW ENFORCEMENT SUPPORT SERVICE EMPLOYEE. K. ADOPTION OF THE EMERGENCY SERVICES COORDINATING AGENCY HAZARD MITIGATION PLAN. L. ORDINANCE NO. 3853 — AMENDING THE EDMONDS CITY CODE TO ADD ELECTRIC VEHICLE PARKING PROVISIONS. 3. PROCLAMATION IN HONOR OF ED ALIVERTI. Mayor Cooper commented it was an honor to read this proclamation; Mr. Aliverti was a personal friend and mentor in many areas of his life outside City Hall as well as an icon in the sports and arts communities and a longtime announcer of the 4`'' of July parade. On Thursday, September 22, Mr. Aliverti will be inducted into the Snohomish County Sports Hall of Fame. He recognized Mr. Aliverti's widow, Shirley and his daughter Gina in the audience. Mayor Cooper read a proclamation declaring Thursday, September 22 as Ed Aliverti Day in Edmonds in recognition of his many years of commitment to the community and his dedication to the world's oldest and greatest sport. He provided a copy of the proclamation to Ms. Aliverti. Ms. Aliverti described how they came to live in Edmonds after Mr. Aliverti graduated from WSU and accepted a teaching job in Edmonds. They enjoyed watching Edmonds grow from a little main street to the beautiful town it is now. She lives in Everett now but is proud to say she used to live in Edmonds. L�Ellq ll 0I D104 W K1l04 1011 D1 01 K`1 Ron Wambolt, Edmonds, referred to a comment by Mayor Cooper recorded in the minutes of the September 13 Public Safety & Human Resources Committee that the biggest benefit of the FD1 contract was the immediate cash infusion the sale of the equipment provided. The outcome of the Committee meeting was to have a report of all expenses associated with the FD1 contract. Mr. Wambolt recommended the $6.1 million FD1 contract be compared to expenses before the FD1 contract and that the analysis use the contract price for the Esperance and Woodway contracts in effect at that time which were much lower than the current cost. He pointed out $1.3 million was expected from the sale of the rolling stock to FD1. The Council at that time considered six different options and chose Option 4 which placed the money from the sale into the General Fund. However, at the September 21, 2010 meeting Councilmember Petso introduced a motion to move that money out of the General Fund into a separate reserve fund. That action indirectly resulted in the placement of a $1 million General Fund levy on the November ballot. Had those funds remained in the General Fund, there would not be a need for a $1 million levy on the November ballot. He summarized placing the money from the sale of the Fire Department rolling stock into a reserve account was not the original intent and should not have occurred. Edmonds City Council Approved Minutes September 20, 2011 Page 2 Al Rutledge, Edmonds, reported former Mayor Hall is recovering following surgery. Next, he asked for an explanation of the custodian that was laid off. Mayor Cooper responded a custodian has not been laid off; a custodian retired and has not been replaced under the City's current hiring freeze. That position will be considered as part of the budget process. Dave Page, Edmonds, reported on his visit to Haines Wharf Park at 12:30 p.m. today; no one was there. By comparison there were many people at Marina Beach Park at the same time. He commented Haines Wharf was a poor location for a park due to water on one side and limited population within a half mile. He expressed concern with the $750,000 cost overrun on a $20,000 piece of property, recommending the City establish a cost overrun policy. He was also concerned with recent newspaper articles regarding the former mayor and Councilmember Wilson's statement that there has been criminal activity and the proper punishment must be meted out before there had even been an opportunity for the former mayor to answer charges. He summarized the former mayor has been vilified after serving the City for 15 years. He disagreed with statements that this is not politically or personally motivated. Roger Hertrich, Edmonds, agreed with placing the FDI. funds in a separate reserve fund to prevent their use for ongoing expenses. He pointed out the former Mayor was in office when the Haines Wharf debacle occurred which reflects bad management. He referred to poor management of the Edmonds Center for the Arts (ECA) and the State Auditor's recent numerous findings. He pointed out Dave Earling, a candidate for mayor, and Council President Peterson's wife have both served on the PFD Board. He suggested those Board Members be questioned when the ECA requests assistance from the City with their bond payment. 5. PARK IMPACT FEE DISCUSSION. Parks & Recreation Director Carrie Hite explained this topic was presented to the Finance Committee in April and June 2011. The Finance Committee recommended an educational and exploratory discussion with full Council. The exploration of park impact fees is consistent with the Park, Recreation and Open Space plan and is one avenue for park development and infrastructure. Park impact fees are levied on new development as a way to impact the effect of growth on park and recreational services. She introduced Randy Young, Henderson Young and Company, the guru on park impact fees in Washington State. Mr. Young explained he assisted the City several years ago in developing a Transportation Impact Fee that the Council adopted and has resulted in the collection of approximately $500,000 in the past 6 years. He provided a definition of an impact fee: a one -time payment paid by new development for capital costs of facilities needed by new development. He described rules for impact fees: 1. "Fair Share" — growth can be charged for its fair share of the impact of growth but cannot be charged for existing deficiencies. He provided a chart comparing Kirkland's park level of service standard, inventory and deficiency of neighborhood parks, and inventory and reserve of community parks. 2. "Reasonably needed" & "proportional share" — fee must be proportional to impacts 3. "Credits" — no double charging (i.e. calculation of impact fee must consider any parks bond) He identified reasons that government charge impact fees: Revenue for public facilities Policy — growth pays a portion of costs Quality of life — public facilities keep up with growth Mr. Young commented the public does not like taxes. In the past most parks were funded by bonds and or grants; in the last 20 years there has been a shift toward impact fees so that people creating the need pay for that need. The building community does not like impact fees because they view it as raising the cost of their product, taxpayers like impact fees because it is a burden they no longer have to subsidize. Edmonds City Council Approved Minutes September 20, 2011 Page 3 Mr. Young described how impact fees are calculated and collected. The transportation impact fee is charged on development because it can be demonstrated that all development has a direct impact on the street system. There is not sufficient information to charge a park impact fee for businesses. Unlike transportation impact fees, park impact fees are charged per dwelling unit and calculated and collected at the time of building permit. State law allows impact fees to be charged for parks, recreational facilities, open space and trails. Mr. Young provided a series of statements and whether they are fact or myth: • Growth does not pay for itself Myth — Growth does pay a lot of money. Growth pays for on -site improvements, such as local streets, storm water controls, etc., property taxes, sales tax, gas taxes, etc. • Growth DOES pay for itself Myth — Growth does not pay for itself. Most of the taxes paid by new development are not available for needed infrastructure. • Impact fees reduce taxes and fees paid by existing residents Fact — Without impact fees, existing residents and businesses have to subsidize infrastructure for new development • Impact fees can solve any infrastructure problems Myth — Impact fees buy capacity for growth, but NOT: • Existing deficiencies • Repair, remodel, replacement costs • Operating or maintenance costs • Impact fees are paid by developers Myth — Developers pay the fees, but they pass the fees along to the buyer by increasing the price • Impact fees stop development Myth — Impact fees add to the cost of development, but they do not stop development Mr. Young reviewed the effects of impact fees on: Affordability Will development become unaffordable? Experience in other cities: 1.. Market prices affected very little by impact fees because impact fees are very small % of total cost 2. Major factors affecting affordability: • Costs of land, materials and labor • Overall market and economy Competitiveness Will people build somewhere else? Experience in other cities: 1. Development continued after impact fees adopted and/or increased 2. Impact fees produce benefits that equal costs 3. Decisions based on location, land cost & availability, market 4. Impact fees are small portion of total cost Economy Shouldn't impact fees wait until the economy recovers? Experience in other cities: 1. Forbearance has not jump - started construction (2010 study) 2. All development should pay its share, even during slow development 3. Need rates in place when market recovers 4. Real causes of weak economy: high unemployment and tight credit Edmonds City Council Approved Minutes September 20, 2011 Page 4 Mr. Young described an academic study produced in 2010 of 12 counties in Florida that maintained or raised their impact fees compared to 9 -10 counties who suspended, reduced or did not raise their impact fees. The study found development activity decreased in all counties but decreased more in the counties that suspended, reduced or did not raise their impact fees because people understand counties with better parks, police, streets, libraries, etc. are better places to live. If the Council was interested in adopting a park impact fee, Mr. Young encouraged the Council to adopt it sooner rather than later. If the Council waits for the economy to improve, it will miss the first 6 -12 months of building growth while the impact fee is put in place. Development Will development slow, or stop? Experience in other cities: 1. Robust development continued after impact fees adopted. Three "proofs ": • Numerous academic studies • Building permits issued • Impact fee revenue collections 2. Development passes on the cost of impact fees to owners and renters Fairness & Equity Doesn't development already pay? Experience in other cities: 1. Taxes and fees paid by development do not pay for needed infrastructure. 2. If new development paid for itself, it would be unnecessary to charge impact fees. 3. If development doesn't pay, taxpayers pay Mr. Young provided a comparison of park impact fees in other cities. To the question of why should Edmonds have impact fees and whether Edmonds is built out, Mr. Young pointed out conversions from single - family to multi- family and/or construction of multi - family occur and are an opportunity to collect impact fees, for example the new 89 unit multi- family development on SR104. Mr. Young referred to the City's expected population growth over the next six years of 1,237. During the past six years transportation impact fees collected in Edmonds have generated $571,872. He described potential revenue from a park impact fee in Edmonds: Population growth next six years = 1,237 1,237 people _ 2.5 pp /du = 495 dwellings 495 dwellings @ $1,200 /du = $600,000 Mr. Young described the process and cost for developing a park impact fee: • Fee Calculation Study (3 -4 months) • Ordinance ( 1 month) • Review and Adoption • City Staff ( 1 month) • City Council (1 -2 months) • Consulting Costs (examples): • Olympia (parks - 2005) $ 29,700 • Issaquah (parks - 2007) 27,050 • Edmonds (roads - 2009) 27,470 • Renton (parks - 2010) 29,830 Edmonds City Council Approved Minutes September 20, 2011 Page 5 Mr. Young identified implementation issues: 1. Exemptions a. Low - income housing b. Other "broad public purposes" c. No exemptions If the City does not charge an impact fee, the City pays it. 2. Future facilities or reimbursement a. Growth pays only for future facilities b. Growth pays for future facilities and existing capacity that serves growth Level of service method a. Traditional ratios of land to population Example of traditional level of service ratio: Traditional ratio = 10 acres of land per 1,000 population If 1,000 more people, 1 (000) x 10 = 10 acres b. Investment per capita Example of investment per capita method: Land (active) 4 /1.,000 @$100,000 $400 Land (passive) 2/1,000 @$ 75,000 $150 Ball field 1 15,000 @$150,000 $ 30 Picnic areas 1/2,000 @$ 40,000 Total $600 Mr. Young identified alternatives to impact fees: 1. Raise other revenues = growth pays less, taxpayers pay more 2. Reduce level of service = less infrastructure, but quality of life reduced For Councilmember Buckshnis, Mr. Young explained regionalization of parks is very unusual; regionalization of fire protection is happening more often. There are state law mechanisms that allow the creation of regional park districts. He referred to the Tacoma park system that includes NW Trek which is not located in Tacoma. Councilmember Buckshnis asked whether a park impact fee would require a public vote. Mr. Young answered it did not; it is a City Council level decision. Councilmember Buckshnis asked how the park impact fee is calculated. Mr. Young answered it depends on the city's standards and amenities included in the calculation as well as availability of other monies. Once a fee is calculated the City Council may decide to charge less for political and/or economic reasons. Councilmember Buckshnis asked whether a park impact fee could be used to purchase property current developed with ball fields although they may be in poor condition. Mr. Young responded park impact fees can be used for land acquisition. Once the City acquired the property, impact fees could be used to remove weeds or an old structure. He was cautious about the use of impact fees if a poor ball field on the property were improved. Conversely impact fees can be used for a portion of the cost of replacing grass fields with artificial turf fields that increases capacity. Councilmember Buckshnis summarized park impact fees could be used to install artificial turf on an existing ball field owned by the School District. Mr. Young agreed, advising park impact fees could be used for the entire cost of acquisition. Councilmember Buckshnis asked whether installation of artificial turf on property intended to be an apartment building that was never developed but that had some fields on it would qualify for use of park impact fees. Mr. Young answered the entire purchase price would qualify for the use of impact fees. The use of impact fees for improvements would depend on the condition of the fields and he suggested perhaps 90% of the improvement be funded via impact fees. Edmonds City Council Approved Minutes September 20, 2011 Page 6 Councilmember Buckshnis asked whether other cities used impact fees for revenue bonds. Mr. Young answered that was rarely done because revenue bonds are repaid by a pledged source of revenue. Investors consider the quality of the revenue that is pledged and its reliability as part of their decision to purchase bonds. For a water /sewer utility that issues revenue bonds based on future connection fees or future rates, odds are that that growth will occur. Investors have not been interested in revenue bonds covered by impact fees because of situations such as the current economy; the source of funds is highly dependent on growth. A few communities have overcome this by pledging another more predictable, reliable source of revenue and during good times using revenue from the impact fee instead. He did not encourage the City to consider revenue bonds as a strategy. Councilmember Fraley- Monillas asked whether Lynnwood had a park impact fee. Mr. Young answered they do not. He pointed out Bellevue's park impact fee was a "dressed up SEPA mitigation fee" and did not meet the state test for an impact fee. Student Representative Springer asked if the impact fee could vary based on a percentage of the house price. Mr. Young answered an impact fee must be a flat rate and cannot vary with the cost of the house because a variable fee is considered a tax. Most cities have different fees for single family and multi- family dwelling units because census data shows the average number of people per dwelling units differs. Councilmember Petso asked at what point cities typically have a public hearing. Mr. Young answered the city is required to adopt an impact fee via ordinance and all rules regarding adoption of an ordinance would apply. Some cities have additional meetings regarding an impact fee because of the effect an impact fee would have on certain portions of the community such as builders. Council President Peterson asked if there would be a 5 -6 year delay following adoption of a park impact fee before any significant purchase could be made. Mr. Young answered the statute does not require a city to accumulate funds until the entire project can be funded; the city could for example accumulate funds to purchase the land and then accumulate funds for the improvements. Or the city could use the funds to install an improvement such as a ball field to expand capacity. The city can also use impact fees for soft costs associated with the capital investment. He pointed out the statute requires impact fees be spent within six years; that was recently extended to ten years due to the economy. A City Council can also hold a public hearing and make written findings regarding a compelling reason to extend the time period for a short period of time. Council President Peterson asked staff to provide the average number of dwelling units developed in the City over the past ten years. Councilmember Plunkett was not interested in moving forward with a park impact fee yet, if at all. He suspected the home builders and realtors may have a different perspective than Mr. Young. He suggested Mr. Young's presentation be provided to home builders and realtors and that they have an opportunity to provide their perspective. He commented that Mr. Young did not provide a neutral presentation and is an advocate for impact fees. Councilmember Petso expressed interest in moving forward and suggested scheduling the concept for a public hearing in order to obtain input from builders and/or realtors. She pointed out that without a park impact fee either taxpayers pay more or quality of life is reduced. Councilmember Buckshnis suggested more information be provided such as studies conducted by other cities, other cities' reasons for instituting a park impact fee, and how their fee was calculated. Edmonds City Council Approved Minutes September 20, 2011 Page 7 Council President Peterson suggested the Council needed to be provided a great deal more information before a public hearing was scheduled such as the history of building in the city. He suggested another presentation from staff with an invitation to someone with an opposing viewpoint. Councilmember Plunkett commented he would not be ready for a public hearing until additional presentations were made by builders and/or realtors. Student Representative Springer suggested park staff identify how the funds generated by a park impact fee would be used for capital improvements. Councilmember Petso requested staff arrange a presentation from a developer group in consultation with Councilmembers who are interested in more information. Councilmember Buckshnis requested information regarding whether the City has the capacity for ten years of growth. Due to staff's involvement in developing the budget, Mayor Cooper advised this information may not be provided until October /November. 6. PROPOSED ORDINANCES SETTING REQUIREMENTS FOR RESPONSIBLE BIDDERS AND GOALS FOR APPRENTICESHIP PARTICIPATION ON CITY CONSTRUCTION CONTRACTS. Mayor Cooper explained the packet contains two ordinances. The first is related to adoption of responsible bidder criteria to protect the City from poor work and unscrupulous contractors who may bid low, only to later bill high or who violate the law to compete with responsible contractors. A few years ago the legislature granted local governments to do supplemental bidder responsibility criteria beyond that listed in the RCW. It includes ensuring compliance with apprentice utilization goals, compliance with bid laws, evidence of completion of similar size and scope projects, safety records, past performance on public projects, quantity and prevailing wage violations, and management of change orders and closeouts. The ordinance would provide additional reasons within the guidelines established by state law to reject the low bid. The second ordinance establishes goals for apprentice participation on public works projects. The Council passed Resolution 1100 in 2005 requiring the use of apprentices on the Edmonds Crossing project and renovations of City buildings. This ordinance codifies the apprentice utilization and follows the model used by Snohomish County, establishing 15% utilization of apprentices as a goal. The ordinance sets the requirement at $250,000 for all public works projects. He recommended the Council pass both ordinances. Councilmember Buckshnis asked if other cities have implemented these safeguards. Mayor Cooper answered numerous cities have apprentice utilization goals; fewer cities have bidder responsibility supplemental criteria. The State of Washington requires the use of apprentices on all transportation projects. When Governor Locke was in office, he issued an executive order for apprenticeships on all state projects. Snohomish County has both. Councilmember Buckshnis summarized if a bidder submitted a bid and did not have a strong background in the project type or scope, the bid could be rejected. Mayor Cooper answered staff could recommend to Council that the low bid be rejected based on the supplemental criteria. Councilmember Fraley- Monillas commented apprenticeships in building trades help provide on-the-job training. She assumed apprentices were paid a lower rate than journeymen. Mayor Cooper answered apprentices were typically paid 60 -70% of a journeyman's rate. Councilmember Fraley- Monillas Edmonds City Council Approved Minutes September 20, 2011 Page 8 observed the use of apprentices could be a cost savings. Mayor Cooper answered there is some savings in bids on large projects via the use of apprentices. Most reputable large contractors already use apprentices. Councilmember Fraley- Monillas pointed out the work quality is the same because apprentices are supervised by journeymen. Mayor Cooper advised this was reviewed by the CS /DS Committee and Mr. Williams, Ms. Hite and Mr. English have reviewed the ordinances. The apprenticeship ordinance, modeled after Snohomish County, was modified to apply to Edmonds. COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO ADOPT ORDINANCE NO. 3854 REGARDING APPRENTICESHIP UTILIZATION. Council President Peterson recalled a recent article indicated the average age of tradesmen in certain trades is 47 years old. It is important to City contracts as well as ensuring younger people have an opportunity to gain the skills that will be needed when the economy improves. This is an opportunity for Edmonds to make a commitment to livable wages and training the workforce of the future. MOTION CARRIED UNANIMOUSLY. COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO ADOPT ORDINANCE NO. 3855, ADOPTION OF RESPONSIBLE BIDDER CRITERIA. Council President Peterson commented this provides staff the ability to ensure the City is using reputable, professional contractors rather than relying on the low bidder. MOTION CARRIED UNANIMOUSLY. 7. CHANGE ORDER POLICY DISCUSSION Public Works Director Phil Williams explained the policy has been modified following the presentation to the Council three weeks ago and reviewed by the CS/DS and Finance Committees. He reviewed the revised change order policy, explaining staff's recommendation is to place the policy in the City's purchasing policy in a section entitled Change Order Approval and Process: Change Order Approvals and Processing: It shall be the practice of the City to award construction contracts to the lowest responsible bidder at the amount set forth in their bid plus any allowance for alternative scope items included in the bid and approved by City Council. In addition to this contract award amount the construction budget for the project includes the costs of inspection, project management, design services during construction (RFIs, etc.), and a management reserve for necessary change orders during the course of the project. This management reserve will be set by City Council at the time of contract award. The following guidelines will be considered in setting the management reserve: 1) For construction budgets less than $100,000 change orders up to 20 01c, or the,full amount of the management reserve set by City Council, whichever is higher, are to be approved (signed) by the City Engineer and the Public Works Director (if the project is being managed by the Engineering Division), the client department director, and the Mayor. 2) For construction budgets between $100,000 and $500,000 change orders up to 15 %, or the full amount of the management reserve set by City Council, whichever is higher, will be approved (signed) by the same named individuals as in paragraph (1) above. Edmonds City Council Approved Minutes September 20, 2011 Page 9 3) For construction budgets over $500,000 change orders up to 10 9/0, or the full amount of the management reserve set by City Council, whichever is higher, will be approved (signed) by the same named individuals as in paragraph (1) above. 4) For necessary change orders that will exceed the change order authority in paragraphs I through 3 above or the current budget authority granted by City Council for the City Fund(s) financing the project the City Council must authorize the Mayor to execute the change order(s). 5) Notwithstanding the provisions of paragraphs I through 4 above, any individual change order exceeding $100,000 requires City Council approval. 6) If a necessary change order requires City Council approval but getting that approval will add significant additional expense or risk to the project the Mayor is authorized to approve the required work and bring the necessary change order to the next scheduled City Council meeting for review and approval. When a need arises to implement this provision City Council shall be notified via e -mail. A brief description of the need for the change and an estimated cost will be included. 7) The same procedures regarding change order processing listed in paragraphs 2 through 6 above for construction contracts shall also be followed when processing addendums to any professional service agreements for Architectural, Engineering and Land Surveyor Services as well as other Professional Services Agreements. Councilmember Fraley - Monillas commented one of her suggested changes was not included in the revisions, to also have the Council President sign off on change orders in order to provide accountability to the Council. It would then be up to the Council President to notify the remainder of the Council. Mr. Williams explained staff discussed that suggestion and it was not included because the Council President may /may not be readily available and he does not have delegation from the Council President. The statement regarding emailing the Council was added to paragraph 6. Councilmember Fraley- Monillas recognized it was fairly easy to contact the current Council President but that could be difficult in the future if the Council President worked outside the City. Councilmember Wilson observed the City had an existing policy because it operated under state law. The existing policy is that all contracting policy rests with the Council and the Council can delegate some authority such as the $100,000 authority that has been delegated to the Mayor. Beyond that $100,000 all change orders currently have to come to the Council. City Attorney Jeff Taraday rephrased Councilmember Wilson's comment, agreeing that contracting authority begins with the Council and the City Council must delegate contracting authority to the Mayor which the City Council has done. The City Council has adopted purchasing policies that authorize the Mayor to enter into contracts up to $100,000. Councilmember Wilson commented when the City Council approves a contract of any size, for example $3 million, that contract may /may not have a reserve /contingency and Council considers that when they approve a contract. Anything above that amount, the City's current policy is state law which requires any changes come to the City Council. Mr. Taraday answered under state law any changes would come to the City Council; Edmonds does not have a policy that states under state law changes must come to the Council. Councilmember Wilson observed when state law stated something must be done, that became the City's policy. For example, the federal government requires the City respect freedom of speech, the City does not need to pass an ordinance stating the Edmonds City Council must respect freedom of speech. He questioned why the Council needed to discuss a new policy when there was a policy in place under state law that required change orders be brought to the Council. Mr. Taraday explained staff was proposing a change order policy because the current policy may be administratively challenging to implement. Councilmember Wilson clarified the City has a policy and staff's view was it was not administratively flexible and they would like more practical flexibility in the current policy. Mr. Williams agreed, Edmonds City Council Approved Minutes September 20, 2011 Page 10 commenting it was not workable on a fast- moving construction project to bring back all change orders to the Council. Even if a management reserve were provided, once that amount was exceeded, every change order regardless of the size would be required to come to Council. That would add costs to the project because a contractor could charge for any delay in responding to onsite conditions. There needs to be mutual trust between the Council and staff so that there is a shared expectation regarding processing of change orders. The proposed change order policy, or some version thereof, seems to be a reasonable way to ensure the Council and staff's expectations are the same. He commented a project could have numerous change orders and it would be difficult to request Council approval for each one. Councilmember Wilson commented he will oppose the proposed change order policy. The City has just gone through a situation where that trust has been eroded and now is not the time to grant even greater flexibility to staff or administration when the administration did not honor the policy that was in place previously or the proposed policy. Secondly, it is staff's job to get a good design and good bid from the market. He referred to a project where a $2.3 million bid was not approved by Council; a subsequent $1.6 million bid was approved that quickly escalated to $2.3 million via change orders. One could argue elements were removed that were later added and that more work should have been done at the front end. Councilmember Wilson expected staff to say a $2 million project will cost $2 million, plus /minus 10 %. The proposed policy grants 10 percent plus allows the Mayor to grant additional funds without coming to Council. Mr. Williams clarified that was not how the policy was intended to work. The Council grants a management reserve for the purpose of implementing change orders in a timely manner, although the current purchasing policy does not state the management reserve /contingency is for change orders. If the Council granted a 10% management reserve on a project and change orders were close to that amount, staff could not implement a $100,000 change order via the Mayor, it would stop at the management reserve amount. Without paragraph 5, a $100,000 change order could be issued on a $3 million project without coming to the Council as long as it was under the $300,000 management reserve. Paragraph 5 was added to provide a dollar amount above which change orders would always be presented to the Council. The policy was not intended to be additive. Councilmember Wilson felt the City has a policy that requires staff to spend what Council allows and if more is needed, the Council needs to be asked. He viewed the policy as additive. Mayor Cooper reported that while the State Auditor did not review the Haines Wharf Park project, they reviewed other capital construction projects and informed Interim Finance Director Jim Tarte that the City needs a change order policy. Regardless of whether the Council approves the proposed change order policy or adds language to the existing policy stating it applies to change orders, according to the State Auditor, the City does not currently have a policy related to change orders. Council President Peterson referred to paragraph 4, providing an example where catastrophic events early in the project consume the management reserve. He asked whether staff could request an increase in the management reserve so that staff would not need to present all future change orders to the Council. Mr. Williams advised the next two agenda items will illustrate the principles in the proposed change order policy. On the Interurban Trail project, staff will describe change orders, the contingency and look ahead to upcoming issues that may lead to additional costs and ask the Council to authorize change orders that go above the current contingency as well as discuss granting additional management reserve. Council President Peterson commented on recent improvements to Council notification via the Public Works update to the Council committee. This change order policy would ensure the Council is well informed. Councilmember Bernheim agreed with staff briefing Council periodically on any surprisingly large increases in contracts rather than conceal them or not respond to questions. Absent a change order policy, he asked why staff was making the disclosures regarding the Interurban Trail and the Lift Stations. He felt Edmonds City Council Approved Minutes September 20, 2011 Page 11 the proposed change order policy was too lengthy and preferred to reduce it to one paragraph such as any change orders over 10% of a contract, over $100,000 or over the management reserve shall be approved by the City Council. Councilmember Bernheim suggested a system whereby any department making a change order to any contract be required to submit notice, a brief description and the cost impact to the City Council on the next available agenda. The Council agenda could include an item entitled change orders during the last week. Mr. Williams answered it was up to the Council; staff wants to provide information to the Council and it is not their intent to withhold any information. He also did not want to provide the Council a great deal of useless information, noting many change orders are very small. Staff typically accumulates a number of items before executing a change order. It has been the Council's past practice to grant a management reserve on projects. It has been staff's understanding that the management reserve was for change orders. It is staff's intent to design a policy to prevent surprises and to provide the Council the amount of information they need when they need it and to build the project without delaying the contractor. Councilmember Fraley- Monillas commented the reason for the numerous sections in the change order policy is the number of what -ifs. She anticipated sections that address all the what -ifs would present future mistakes. She was not interested in being informed of small change orders. Her biggest concern was avoiding delay while staff requests the Council's permission for a change order. It could be more costly in the long run to stop a project and idle a contractor to seek the Council's permission. She viewed the proposed policy as a happy medium and encouraged the Council to approve it, recognizing it could be modified in the future as necessary. For Councilmember Buckshnis, Mr. Taraday explained the City's current purchasing policy does not expressly address change orders. She expressed support for the proposed change order policy. Councilmember Bernheim and she are researching an issue related to Ordinance No. 3789 which states the Mayor and staff shall provide quarterly reports showing expenditures and liabilities against each separate budget appropriation incurred during the preceding reporting period, together with unexpended balances of each appropriation. These reports shall show the receipts. All proposed budget amendments or Council approved changes that will be included in future budget amendments are requested to be included in monthly reports. The Finance Committee should be provided this information. She recalled when the budget amendment was presented last year, there was a $1.5 million appropriation and $1.7 million had been spent. Mr. Williams feared budget management issues and fund level accounting issues are being confused with project -level management; they are two separate issues. Councilmember Buckshnis clarified when a department overspends their budget, it needs to be reviewed by Council which has not been done in the past. Councilmember Petso suggested clarifying in paragraph 4 that it was in regard to aggregate change orders. She offered to work with Mr. Williams on language that paragraph 4 related to any change order that pushed the total amount over the threshold. Mr. Williams agreed that was the intent of paragraph 4. Councilmember Plunkett described a situation where a contractor is on site, there is a certain dollar amount associated with the project, the contractor encounters a problem and may need to exceed the dollar amount. Staff has to come back to the Council. He asked why the contractor would be paid while staff sought authority from the Council to spend additional public money. Mr. Williams answered in the absence of a change order policy, if the interpretation was staff had no change order authority, any change order would require City Council approval. The contractor has a reasonable expectation that he will be able to pursue the work using their own means and methods to get the job done according to their schedule and they are entitled to that expectation. If staff is unable to authorize a change unless the Edmonds City Council Approved Minutes September 20, 2011 Page 12 Council grants approval and the contractor and his equipment are idled until that approval is provided, that is an opportunity for a contractor to detail the additional cost the delay requires. This is a well sorted principle in construction law that staff wants to avoid. Councilmember Plunkett asked if contracts could be written to state no reasonable expectation; the contractor only works when money is authorized. Mr. Taraday responded that was likely to significantly increase the cost of all bids because contractors would build into their bid estimates protection for delay. Mr. Williams explained any risk the contractor is asked to assume that are not quantifiable upfront are reflected in the bid amount. Mr. Taraday explained when something unforeseen is discovered in the field, the engineer typically provides direction regarding how to address the issue and the change order is the formal contract amendment that addresses that new direction. There may be a period of weeks between the field directive and the formalizing of the field directive into a change order that would be brought to the City Council. Mayor Cooper asked whether an ordinance would be required to adopt the amendment to the purchasing policy. City Clerk Sandy Chase advised the purchasing policies were not adopted by ordinance. Mayor Cooper recommended staff revise the purchasing policy using the Council's input and return at the October 4 Council meeting. He noted the ordinances approved under Agenda Item 6 both reference the purchasing policy and the language in those ordinances also needs to be incorporated into the purchasing policy. Councilmember Plunkett was not satisfied with the proposed purchasing policy. He believed Mr. Williams could implement this policy; however, he also believed Mr. Hines, former Finance Director, could be obtrusive and would use all seven clauses to hide behind. He preferred policy based on what Mr. Hines would do, not on what Mr. Williams would do. He preferred an easier, more specific and clearer policy, fearing more language would make it easier for a staff person who wanted to be obtuse. Mayor Cooper assured the current administration intends to aggressively comply with whatever policy the Council approves. Staff is adhering to many of the changes in the proposed ordinance due to a strong desire to communicate with the Council and provide citizens ultimate transparency. The City has a troubled past but there is a new Public Works Director and new Finance Director will join the City in October. Councilmember Plunkett commented not only would he trust Mr. Williams in regard to a policy this complicated, he would also trust Mayor Cooper. However neither Mayor Cooper nor Mr. Williams will be here forever and he anticipated "someone could run the Council ragged on these seven clauses." Mayor Cooper offered to have staff further revise the change order policy for Council consideration. Council President Peterson commented the Council has expressed widely varying opinions from a simplified policy to something similar to the proposed policy. He felt the proposed policy was close, possibly simplified somewhat. Councilmember Bernheim referred to his request to provide notice to the City Council of all change orders and the response that the Council may not want to see all change orders. He agreed it may depend on the number of change orders, pointing out the Council was provided notice of all the checks written by the City. He requested the Council be immediately informed following the issuance of change orders. Councilmember Wilson echoed Councilmember Plunkett's trust of Mr. Williams and Mayor Cooper. If staff informed the Council retroactively of change orders within the management reserve, he would be agreeable to removing that amount from the management reserve so that the full amount of the management reserve continued to exist. Edmonds City Council Approved Minutes September 20, 2011 Page 13 Councilmember Petso commended Mr. Williams for offering restrictions on staff's authority rather than forcing the Council to demand the restrictions. She volunteered to assist Mr. Williams in condensing the policy. Observing the Council has not yet implemented a change order policy, Councilmember Fraley - Monillas asked how change orders would be handled in the meantime. Mayor Cooper answer his intent is to have staff inform the Council of major change orders and he will present to the Council any change order over $100,000 that exceeds the contingency. 8. REPORT ON FINAL CONSTRUCTION COSTS AND APPROVE CHANGE ORDER NO. 6 FOR THE LIFT STATION 7 & 8 REHABILITATION PROJECT AND COUNCIL ACCEPTANCE OF PROJECT. City Engineer Rob English explained the next two projects are examples of how the proposed change orders might affect future projects. He provided an aerial photograph identifying the location of Lift Stations 7 and 8; Lift Station 7 is adjacent to the Sound Transit parking facility of Dayton Street and Lift Station 8 is further north on Railroad Avenue adjacent to the Community Transit bus station parking lot south of Main Street. The project scope was to upgrade the sewer lift stations and was identified in the 2006 Sewer Comprehensive Plan. The purpose of the project was to increase sewage capacity out of both lift stations and update the electrical system in both stations. Another component of the project was to replace the existing 8 -inch diameter sewer main in Dayton Street from SR 104 to the railroad tracks due to age and maintenance costs. A much larger project has been described to the CS /DS Committee, upgrading nine additional lift stations. That project is planned for 2012. He displayed photographs of Lift Stations 7 and 8. He provided details regarding the project: • Contract Award $2,240,196 0 10% Contingency $ 224,010 • Change Orders #1 -5 $ 210,055 Mr. English explained a significant contributor to the change orders is disposal of contaminated soil. There have also been change orders associated with resolving pipe conflicts at Lift Station 8 with an existing electrical conduit owned by the Washington State Ferry system and a pipe conflict at Lift Station 7 with the wastewater treatment plant outfall pipe. Change Order #6 totals $70,215. A significant portion of the change order is related to disposal of contaminated soil. Project costs including change orders will be paid by the Sewer Utility Fund. Staff's recommendation is approval of Change Order #6 and to accept the project to begin the close out process. COUNCILMEMBER FRALEY- MONILLAS MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO APPROVE CHANGE ORDER #6. Councilmember Bernheim asked for detail regarding the contaminated soil. Mr. English answered the soil was contaminated with metals and arsenic. At the time the contract was issued was approximately when the contamination was identified via soil borings done during the Sound Transit design process. Borings were done during the 2006 -2007 time period and the contamination was not anticipated to be to the degree that was discovered. Mr. Williams commented on the interesting geography in that area, physical things that conflict with pipes as well as contaminated soil. Contracts often include a line item for contaminated soil with a unit Edmonds City Council Approved Minutes September 20, 2011 Page 14 price. If that unit amount is exceeded, the City pays the cost of the additional units. Councilmember Bernheim expressed support for the motion. COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO AMEND THE MOTION TO INCLUDE ACCEPTANCE OF THE PROJECT. AMENDMENT CARRIED UNANIMOUSLY. MAIN MOTION AS AMENDED CARRIED UNANIMOUSLY. 9. UPDATE ON THE INTERURBAN TRAIL PROJECT Public Works Director Phil Williams reviewed goals of the Interurban Trail project: • Provide continuous trail from SR104 -228`" • Provide safe recreation and commuter options • Meet local and regional needs • Create and preserve access to linear park and open space Mr. Williams reviewed change orders identified to date, pointing out change orders that relate to the storm or sewer utility or street fund will be paid by those funds: Change Order # Description Amount Authorized? 1 Storm Pipe Repair $ 37,757 Yes 2 Inlet Protection 2,940 Yes 3 Gravel Borrow 2,679 Yes 4 Modular Block Wall (MBW) 23,100 Yes 5 Gravel Backfill 2,170 Yes 6 Sewer Repair 2,000 Yes 7* MBW 7,350 No 8 74"' Street Repair (net) 30,187 Yes 9* Slide Repairs 39,627 No 10* Access gate (required by Snohomish County PUD) 2,500 No 11* Add 1 row MBW 2,630 No Total $152,940 Total Authorized $200,833 Total Not Yet Authorized $ 52,107 * not yet authorized MONILLAS, TO EXTEND THE MEETING FOR 30 MINUTES. MOTION CARRIED Mr. Williams reviewed the following: Original Contract Amount Contingency Change orders paid by Street Change orders paid by Storm Change orders paid by Sewer Change orders paid by REETIgrants Total Change Orders $1,368,722 137,000 11,353 96,218 2,000 43,369 $ 152,940 Edmonds City Council Approved Minutes September 20, 2011 Page 15 Mr. Williams requested the Council: Authorize Change Orders 7, 9, 10 and 11 for $52,107 Authorize additional management reserve for change orders of $93,631 Councilmember Wilson commented this is a perfect case study; staff identifying the change orders. He trusted staff's explanation and was happy to support an additional 10% management reserve for a total management reserve of 20 %. He asked whether the management reserve is accounted for in the budget. Parks & Recreation Director Carrie Hite explained the original project budget included a $137,000 management reserve. Councilmember Wilson asked whether the project estimate in the CIP or TIP included the management reserve. Ms. Hite explained projects costs in the CIP are ballpark numbers; as the project is refined, a more accurate cost estimate is provided. City Engineer Rob English explained it depends on what stage a project is in. For a project in design that is programmed for construction in 2012, the construction estimate includes a 10% contingency. When bids are received and the actual cost is known, staff will discuss with Council the actual management reserve. Councilmember Buckshnis asked whether the change orders would exceed the amount appropriated from REST. Ms. Hite answered they would not. COUNCILMEMBER FRALEY - MONILLAS MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO AUTHORIZE CHANGE ORDERS 7, 9, 10 AND 11 FOR $52,107 AND AUTHORIZE ADDITIONAL MANAGEMENT RESERVE FOR CHANGE ORDERS OF $93,631. MOTION CARRIED UNANIMOUSLY. 10. SOLAR PANEL PROPOSAL (COUNCILMAN STEVE BERNHEIM) Councilmember Bernheim recommended moving this proposal forward to the Planning Board. The proposal allows existing buildings at or near the height limit to install solar energy units up to 36 inches in height. He identified existing height exemptions such as church steeples, vent pipes, elevator shafts and other ventilation facilities. Council President Peterson and he are also discussing a fee waiver for installation of solar energy units, explaining it can cost upwards of $1,000 for a construction permit. Council President Peterson agreed with Councilmember Bernheim's proposal, relaying Planning Manager Rob Chave's indication that the Planning Board could consider it in the near future. He is working with staff on a fee waiver and will have it reviewed by Council Committee before presenting it to the Council. COUNCILMEMBER BERNHEIM MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO FORWARD THE SOLAR PANEL PROPOSAL TO THE PLANNING BOARD FOR DISCUSSION. MOTION CARRIED (6 -1), COUNCILMEMBER PLUNKETT VOTING NO. 11. REPORT ON CITY COUNCIL COMMITTEE MEETINGS OF SEPTEMBER 13, 2011 Community Services /Development Services Committee Councilmember Fraley- Monillas reported on the following items: A. Report on final construction costs and approve Change Order No. 6 for the Lift Station 7 & 8 Rehabilitation Project and Council acceptance of project. Discussed on tonight's agenda. B. Adoption of the Emergency Services Coordinating Agency Hazard Mitigation Plan. Moved to consent agenda for approval. C. Introduction to the Capital Facilities Plan (2012 -2017) and Capital Improvement Program. This will be presented to the full Council at the September 27 Council meeting, Council public hearing on October 4 and Planning Board public hearing on September 28. D. Authorization to advertise a Request for Qualifications to complete design and right -of -way acquisition for the 212th St. SW at 76th Ave W intersection. Approved on Consent Agenda. Edmonds City Council Approved Minutes September 20, 2011 Page 16 E. Authorization to advertise a Request for Qualifications (RFQ) for consultant services to update the Sanitary Sewer Comprehensive Plan. Approved on Consent Agenda. F. Authorization for Mayor to sign easement granted to the City of Edmonds by Sound Transit. Approved on Consent Agenda. G. Update on the Interurban Trail. Discussed on tonight's agenda. H. Ordinance amending the Edmonds City Code to add electric vehicle parking provisions. Approved on Consent Agenda. I. Proposed ordinances setting requirements for responsible bidders and goals for apprenticeship participation on City construction contracts. Discussed on tonight's agenda. J. Discussion regarding creating a diversity commission /youth commission. Recommended as retreat agenda item. K. Paid parking proposal. Councilmember Bernheim was encouraged to bring a proposal forward to the Parking Committee. Public Safety & Human Resources Committee Councilmember Wilson reported on the following items: • Interlocal Agreement between Snohomish County and the City of Edmonds related to prisoner transport. Approved for the Consent Agenda. Discussion on Ethics Board. Further discussion will be held at an upcoming Committee meeting. Report on Marine 16. Mayor Cooper is working to move the cost of Marine 16 FD 1. Councilmember Wilson requested a full accounting of all expenses associated with the FDl contract. Joint CS/DS & Finance Committee Councilmember Petso reported on the following: • Discussion on refunding and issuing new bonds. Referred to full Council at the September 27 meeting. • Change order policy. Discussed on tonight's agenda. • Update on Interurban Trail. Discussed on tonight's agenda. • Report on final construction costs and approve Change Order #6 for Lift Station 7 and 8. Discussed on tonight's agenda. Finance Committee Councilmember Petso reported on the following: • Update of scope of services of website professional services agreement. Change order approved on Consent Agenda. Contract handled under City's purchasing /contracting authority. Councilmember Petso pointed out the original amount of the project was $35,000; the change order increased the cost by $16,000 although there was a not -to- exceed contract in place. • Inter -fund short term loan from General Fund to Street Fund. The committee recommended bringing Council an amendment to the ordinance to allow use of the 511 Fund for short-term inter -fund loans. • General Fund Update — July 2011. It was noted that the telephone utility tax is significantly under budget. COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER BERNHEIM, TO EXTEND THE MEETING FOR 10 MINUTES. MOTION CARRIED UNANIMOUSLY. 12. MAYOR'S COMMENTS Mayor Cooper thanked the Council for confirming his appointment of Shawn Hunstock as Finance Director. Mr. Hunstock accepted the City's offer of employment and will start work on October 10. Mayor Cooper reported he is negotiating Mr. Tarte's contract for the transition period. Edmonds City Council Approved Minutes September 20, 2011 Page 17 Mayor Cooper reported Mr. Tarte and he have reviewed year -end projected estimates and budget requests with every department head, looking for revenue adjustments and ways to reduce expenses in preparation for the 2012 budget. Mayor Cooper reported in addition to providing the information Councilmembers Wilson and Bernheim requested regarding FD1 costs, he plans to show fire service revenue and expenses as a separate department in the budget book. 13. COUNCIL COMMENTS Councilmember Wilson referred to a letter from the SNOCOM Dispatchers Association, the union that represents SNOCOM dispatch staff. In 2009, after the previous Executive Director resigned, the SNOCOM Board decided to undergo a strategic change in direction. They hired a new Executive Director, Debbie Grady, who has always had the unanimous confidence of the entire SNOCOM Board. The letter refers to a series of unfair labor practice charges the union brought against SNOCOM which the Public Employment Relations Commission (PERC) found in favor of the union in some cases. PERC has a history of splitting the difference in union unfair labor practices rather than take a position based on fact. Some quite egregious things have occurred at SNOCOM including felonies, embezzlement from union leadership, etc. The letter refers to two votes of no confidence of Executive Director Grady by the union. These have been noted by the Board and the Board continues to have 100% confidence in Executive Director Grady. Councilmember Buckshnis reported the Edmonds Floretum Garden Club is donating an additional $2,000 to the Old Milltown courtyard project, bringing their total donation to $12,000. She complimented Mayor Cooper for hiring Mr. Hunstock as the new Finance Director, noting his reports are very citizen friendly. He understands modified accrual accounting standards and will be a great addition to the City's staff. Councilmember Bernheim encouraged Mayor Cooper to consider chip seal as part of roadway maintenance in the budget. He requested Council President Peterson schedule the storefront issue that the Planning Board forwarded to the Council a few weeks ago. It was rejected by the five members of the Council who were present and he requested the full Council vote on that issue. Councilmember Bernheim reported his plans to consider whether the Five Corners roundabout project could be deemphasized in the CIP and TIP. Councilmember Fraley- Monillas reported the Edmonds Senior Center is holding its annual auction and dinner on Friday, September 23. Councilmember Plunkett asked whether Councilmember Bernheim's request regarding the storefront issue required a motion for reconsideration. City Attorney Jeff Taraday answered a motion for reconsideration is appropriate at the same meeting; the matter can be scheduled as a renewed item on a subsequent agenda. Council President Peterson advised he will schedule that item on next week's agenda. 14. ADJOURN With no further business, the Council meeting was adjourned at 10:40 p.m. Edmonds City Council Approved Minutes September 20, 2011 Page 18