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10/25/2011 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES October 25, 2011 The Edmonds City Council meeting was called to order at 6:00 p.m. by Mayor Cooper in the Council Chambers, 250 5`" Avenue North, Edmonds. ELECTED OFFICIALS PRESENT Mike Cooper, Mayor Strom Peterson, Council President Steve Bernheim, Councilmember D. J. Wilson, Councilmember Michael Plunkett, Councilmember Adrienne Fraley - Monillas, Councilmember Diane Buckshnis, Councilmember ELECTED OFFICIALS ABSENT Lora Petso, Councilmember ALSO PRESENT Alex Springer, Student Representative STAFF PRESENT Al Compaan, Police Chief Stephen Clifton, Community Services /Economic Development Director Phil Williams, Public Works Director Shawn Hunstock, Finance Director Carrie Hite, Parks & Recreation Director Douglas Fair, Municipal Court Judge Rich Lindsay, Parks Maintenance Manager Rob Chave, Planning Manager Frances Chapin, Cultural Services Manager Deb Sharp, Accountant Joan Ferebee, Court Administrator Renee McRae, Recreation Manager Rob English, City Engineer Jeff Taraday, City Attorney Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder 1. CONVENE IN EXECUTIVE SESSION TO RECEIVE AND EVALUATE A COMPLAINT OR CHARGES BROUGHT AGAINST A PUBLIC OFFICER PER RCW 42.30.110(1)(f), AND REGARDING POTENTIAL LITIGATION PER RCW 42.30.110(1)(i). At 6:00 p.m., Mayor Cooper announced that the City Council would meet in executive session to receive and evaluate a complaint or charges brought against a public officer per RCW 42.30.110(1)(f) and regarding potential litigation per RCW 42.30.110(1)(i). He stated that the executive session was scheduled to last approximately 60 minutes and would be held in the Jury Meeting Room, located in the Public Safety Complex. He also announced that the City council may take action as a result of meeting in executive session. This action will occur when the City Council reconvenes in open session. Elected officials present at the executive session were: Mayor Cooper, and Councilmembers Bernheim, Plunkett, Fraley - Monillas, Buckshnis, Peterson and Wilson. Others present were City Attorney Jeff Taraday and City Clerk Sandy Chase. The executive session concluded at 7:04 p.m. RECONVENE IN OPEN SESSION Mayor Cooper reconvened the regular City Council meeting at 7:06 p.m. and led the flag salute. Edmonds City Council Approved Minutes October 25, 2011 Page 1 2. APPROVAL OF AGENDA COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY. 3. APPROVAL OF CONSENT AGENDA ITEMS COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO APPROVE THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: A. ROLL CALL B. APPROVAL OF CITY COUNCIL MEETING MINUTES OF OCTOBER 18, 2011. C. APPROVAL OF CLAIM CHECKS #128389 THROUGH #128542 DATED OCTOBER 20, 2011 FOR $702,296.99. APPROVAL OF PAYROLL DIRECT DEPOSIT AND CHECKS #50883 THROUGH #50906 FOR THE PERIOD OCTOBER 1, 2011 THROUGH OCTOBER 15, 2011 FOR $623,088.48. D. PROCLAMATION IN RECOGNITION OF PANCREATIC CANCER AWARENESS MONTH IN EDMONDS. E. ADOPTION BY RESOLUTION NO. 1258 OF THE PREVIOUSLY APPROVED ESCA HAZARD MITIGATION PLAN AND AUTHORIZATION FOR THE MAYOR TO SIGN. 4. POTENTIAL ACTION AS A RESULT OF EXECUTIVE SESSION DISCUSSION COUNCILMEMBER FRALEY- MONILLAS MOVED, SECONDED BY COUNCILMEMBER BERNHEIM, TO RELEASE PAGE 2 OF THE EXECUTIVE SESSION NOTES FROM OCTOBER 18, 2005. MOTION CARRIED UNANIMOUSLY. 5. AUDIENCE COMMENTS Mayor Cooper reminded the public that RCW 42.17.130 regarding the opportunity for public comment, states public comment shall not include comments which promote or oppose candidates for public office or ballot measures except during the course of a public hearing. Two members of the public who spoke last week did not specifically oppose or speak in favor of a candidate; they stated feelings about Councilmembers and their performance. In doing so they were exercising their right to free speech and their opinions about the performance of the City Council. He requested speakers consider some decorum in the manner in which they address Councilmembers and refrain from impugning their motives, honesty or behavior. Roger Hertrich, Edmonds, referred to Consent Agenda Item E (Adoption by Resolution of the Previously Approved ESCA Hazard Mitigation Plan and Authorization for the Mayor to Sign), recommending the Plan be revised to address the inability to reach the waterfront in the event of a railroad explosion /fire. Next, he referred to campaign literature he received in the mail paid for by the National Association of Realtors Fund in Chicago, expressing concern with a $16,000 campaign contribution by an outside source. He objected to Edmonds' small town politics being purchased by outside sources. He was disappointed an average resident cannot run for office because "the big guys, the money that wants to control Edmonds" is behind some people running for office. He suggested anyone receiving campaign literature determine who produced the materials and where they originated. Edmonds City Council Approved Minutes October 25, 2011 Page 2 Ron Wambolt, Edmonds, suggested voting for a candidate based on who they received money from was not a sound basis for a decision. He suggested people consider the qualifications of candidates and make their decision based on their merit, not the source of money. A candidate's capabilities, not the source of money will make the difference when he /she is in office. COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCIL PRESIDENT PETERSON, TO REMOVE ITEM D FROM THE CONSENT AGENDA AND PLACE IT ON THE AGENDA AS ITEM 5A. MOTION CARRIED UNANIMOUSLY. 5A. PROCLAMATION IN RECOGNITION OF PANCREATIC CANCER AWARENESS MONTH IN EDMONDS Mayor Cooper read a Proclamation declaring November 2011 as Pancreatic Cancer Awareness Month in Edmonds. 6. COMPENSATION CONSULTANT PRESENTATION Parks & Recreation/Interim Human Resources Director Carrie Hite explained the Council budgeted funds to hire a compensation consultant in December 2010. There have been several conversations since then and in June 2011 the Council voted to direct staff to advertise an RFQ for compensation and classification study. The RFQ was advertised from August 10 to September 2; 14 firms responded. An interview committee that included Council President Peterson and Councilmember Fraley- Monillas interviewed three consultant firms. Last week the Council approved staff's recommendation to award a contract to Public Sector Personnel Consultants to perform a classification and compensation study for non - represented positions and a complete job description update for all City positions. Matt Weatherly, President, Public Sector Personnel Consultants, provided an overview of PSPC: • 30+ years in business, dedicated to assisting public sector employers with classification and compensation planning • 1,000+ public employers served throughout the US including more than 300 municipal employers. Recent studies include City of Bothell, Sounds Transit, Grant County PUD, Lewis County, and Bremerton Housing • Devoted full -time staff for the project including the firm's President and Vice Presidents He recognized it had been approximately 14 years since the City had done a comprehensive classification and compensation study. He suggested such a study to review and update job descriptions be considered due diligence in the budget process. Mr. Weatherly reviewed the project scope and deliverables: • 90 -120 day process • City -wide classification and job description updating study of the City's 207 employees and 120 unique job titles as authorized by Council • Project to include direct employee participation and input • Non - represented Compensation Survey of the approximately 40 positions and 40 job titles comparing City's total compensation plans by benchmark job, as well as benefits offerings, to the appropriate marketplace(s) • Updating of compensation policies for non - represented job titles and development of updated pay structure to ensure a fair, appropriate and competitive pay system Mr. Weatherly described principal tasks in the compensation survey: • Partnership with City's Project Committee and HR staff • Identification of competitive employers for comparisons (Council input and/or approval needed) Edmonds City Council Approved Minutes October 25, 2011 Page 3 • Data collection from compensation plans of competitor employers • Follow -up to ensure proper matching to selected benchmarks • Comparison of total compensation packages to external practices • Computation of current plan(s) variance from prevailing rates • Identification of opportunities for comparable and/or competitive compensation offerings Data sources for the survey include: • In order to hire and retain high quality staff, should include employers the City competes with to attract and retain its workforce; may include public and private sector • Comparators may vary by "job group" such as: 1) Professional and technical jobs (may include private data) 2) Jobs unique to public sector but regardless of size 3) Management jobs where size and budget are considered • We will collect total compensation data directly from comparators • We will follow up to ensure accurate matching of non - represented positions to the comparator jobs in the market Mr. Weatherly described data interpretation: • Identification of non - represented jobs ahead, behind, at market • Corrections, if needed to pay grade assignments for some jobs, OR • Development and approval of alternative salary range table designs • Recommend pay ranges based on internal equity and external competitiveness • Development of updated banding for non - represented positions • Fiscal impact estimates of recommended compensation plan • Review of draft compensation plan with HR, Project Committee • "Pay philosophy" and updated policies for the City's consideration (Council input and /or approval needed) • Compensation administration provisions and final report preparation Mr. Weatherly explained questionnaires have been distributed to allow employees to articulate their duties and responsibilities. He described the Committee and Council's involvement: • Ensuring PSPC's adherence to project objectives • Enumerating any compensation - related policy issues • Identifying objective market comparators, data sources • Identifying total compensation elements to survey • Providing critical policy determinations and directions: • Salary competitiveness policy or philosophy • Implementation strategies and methods • Continued communication with Council, City leadership, project team and stakeholders Mr. Weatherly summarized they will work closely with staff to develop the best possible approach with the Council's input that will provide a sustainable, defensible equitable, competitive, and fair compensation plan, not just for the immediate future but the framework for a model the City can follow in the future and reference in future updating and maintenance of the compensation plan. Councilmember Buckshnis relayed her concern with banding and how bands are selected. She asked whether the study will consider each band to determine whether the correct positions are in each band. Mr. Weatherly answered yes; they will utilize two major factors, 1) the questionnaires which lead the employee on a path to internal equity, and 2) interpretation of market data. There may be instances where internally a band adjustment should be made and instances where the market data supports or refutes that Edmonds City Council Approved Minutes October 25, 2011 Page 4 change. A balance is needed between internal equity and external competitiveness via application of market data and interpretation of the job description questionnaire. Councilmember Buckshnis explained there is an employee who performs two director jobs, economic development and community services. She asked whether a recommendation would be made with regard to whether to establish a larger department, combine departments, etc. Mr. Weatherly answered their recommendations will not be in regard to organizational design. The City has a lean staffing model which leads to employees performing two or more roles. They can survey those different roles and identify the uniqueness of those roles. Unless directed otherwise, they will not make recommendations on organizational design or staffing analysis from a service- delivery standpoint with regard to combining or splitting departments. Councilmember Buckshnis asked whether the consultant intended to use the recent WCIA survey. Mr. Weatherly commented they will be sensitive to data in the survey with regard to current job descriptions that are found to be lacking, inadequate, or out of compliance. He was not familiar with the data in the WCIA survey, whether they had done a compensation survey work that they could use. Councilmember Fraley - Monillas asked how the Council would provide input to the consultant. Mr. Weatherly answered his contact information can be made available and he invited Councilmembers to contact him. This initial discussion with Council is occurring early in the process to ensure the Council was familiar with decision points, Council input components, market model, survey comparators, data sources, etc. He intended to bring the market model to the Council in the next 35 -40 days for reaction, input and direction. Ms. Hite offered to be a conduit for the Council to provide information to Mr. Weatherly or provide the Council Mr. Weatherly's contact information. 01 ii [a] RKKI7IY Y 1IT" I Police Chief Al Compaan explained this has been discussed with the Finance Committee at their July 12 meeting and Councilmember Petso who chairs that committee. The existing contract with the Town of Woodway for police services extends through the end of 2012. The Finance Committee was interested in providing direction to the Council and for the Council to provide policy direction for negotiation of a contract to succeed the present agreement on a full cost recovery basis. The proposed resolution was drafted by Councilmember Petso and City Attorney Jeff Taraday. Council President Peterson explained Councilmember Petso worked on the resolution and is absent tonight due to illness. If the Council felt Councilmember Petso's input was important, action could be delayed. The existing police service contract with Woodway does not expire until the end of 2012. Councilmember Buckshnis, also a member of the Finance Committee, explained Woodway's contract with Fire District I (FD1) is approximately $55,000 /month. Edmonds currently collects $8,000- $10,000 /year from Woodway for police services. She relayed Councilmember Petso's preference to institute a monthly flat rate charge for police protection that would cover the cost of providing the service rather than the current per call basis. Council President Peterson clarified the proposed resolution does not contain any negotiation specifics. The resolution notifies Woodway that Edmonds is interested in a different style of contracting than the existing contract. Specific negotiations would occur in the future. Councilmember Fraley - Monillas asked if there was a desire to table the resolution due to Councilmember Petso's absence. She was prepared to proceed without Councilmember Petso present. Council President Peterson found the resolution very straight forward and did not feel action needed to be delayed. Edmonds City Council Approved Minutes October 25, 2011 Page 5 Mayor Cooper advised this issue was discussed at the Finance Committee as well as at a meeting with Chief Compaan, staff, Councilmember Petso and him to discuss next steps. The purpose of the resolution is to provide Chief Compaan and him direction for future contract negotiations. COUNCILMEMBER BERNHEIM MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO ADOPT RESOLUTION NO. 1259, TO NOTIFY THE TOWN OF WOODWAY THAT THE CITY OF EDMONDS INTENDS TO BEGIN NEGOTIATING A NEW CONTRACT WITH THE TOWN OF WOODWAY TO PROVIDE POLICE SERVICES ON A FULL SERVICE BASIS. City Attorney Jeff Taraday pointed out the existing agreement with Woodway can be terminated without cause by either party upon 90 days written notice. COUNCIL PRESIDENT PETERSON MOVED, SECONDED BY COUNCILMEMBER FRALEY- MONILLAS, TO AMEND SECTION 1 TO READ: ... THE CITY OF EDMONDS WILL NO LONGER PROVIDE POLICE SERVICES ON THE CURRENT A FEE PER CALL BASIS." AND ADD SECTION 3 THAT READS: "AUTHORIZATION TO NEGOTIATE AN INCREASE FEE PER CALL CONTRACT THAT COVERS THE TRUE COST OF POLICE SERVICES PROVIDED BY THE CITY OF EDMONDS." Councilmember Fraley - Monillas asked if Council President Peterson had researched a per trip versus a flat rate. Council President Peterson answered he has not. He anticipated the full service contract is better for Edmonds but entering into a new negotiation, he did not want to be limited to an all or nothing approach. There are two opportunities with Woodway, a full service contract, or if Woodway has no interest in that, a per call service contract at an increased rate. Councilmember Fraley - Monillas summarized the amendment adds the fee per call concept to the resolves of the resolution. She observed the amendment referenced establishing a fee that covers the true cost of police services. Council President Peterson acknowledged the true cost of police services will be one of the key negotiating points of this contract. Councilmember Wilson provided comments that Councilmember Petso may have made were she present. Councilmember Petso would likely argue that the current fee of $137.50 per call does not cover the cost. Councilmember Wilson remarked he would love to be able to buy health insurance and only pay when he went to the doctor or homeowners insurance that he only paid for when his home was burglarized. That is the basis of the City's current contract with Woodway. Councilmember Petso would likely argue that Edmonds would prefer a contract that apportions the relative cost for Woodway based on their population or property value or some other measure as a percentage of the overall cost for police because Edmonds taxpayers pay 100% of their share regardless of whether they utilize police services. Conversely, Woodway pays only when the police respond but have coverage 100% of the time. Woodway should pay as much of their share as Edmonds citizens do. He preferred to proceed with negotiations with Woodway for payment of police services on a full service basis. Councilmember Bernheim agreed a full service contract was needed with Woodway in order to cover the cost of providing the service. Woodway is the beneficiary of the current contract; Edmonds does not need the income Woodway provides to finance the Police Department. Edmonds has its own Police Department to protect its residents and does not need a contract to provide police protection to Woodway. The only fiscally prudent reason to renew the contract would be if Woodway came close to covering the cost of service. He did not support the amendment. Councilmember Fraley - Monillas observed if Woodway was not interested in contracting for police services on a full service basis, they could contract with Shoreline or form their own Police Department. She agreed with Councilmember Bernheim that it be more beneficial to Edmonds to charge the true cost versus on a per call basis which may not cover the cost of police service. Edmonds City Council Approved Minutes October 25, 2011 Page 6 THE VOTE ON THE AMENDMENT TO THE MOTION FAILED (1 -5), WITH COUNCIL PRESIDENT PETERSON VOTING YES. Council President Peterson asked whether Edmonds police officers would respond to a 911 call in Woodway if Woodway terminated their contract with Edmonds. Chief Compaan answered Edmonds officers would respond to a life safety issue just as Edmonds responds to Shoreline, Lynnwood and vice versa in accordance with mutual aid. He commented when one of Woodway's part -time officers is on duty, they assist in Edmonds. THE VOTE ON THE MAIN MOTION CARRIED UNANIMOUSLY. 8. WORK SESSION ON THE 2012 BUDGET Council President Peterson advised a public hearing on the budget was scheduled on November 1. He requested Councilmembers begin bringing budget amendments for Council consideration next week. He asked whether an interactive spreadsheet such as was used in last year's budget would be provided. Mayor Cooper answered yes. Councilmember Plunkett recalled in the past Councilmembers have presented amendments for Council discussion but no action was taken on amendments until a motion was made on the budget in late November /early December. He asked whether that process would be followed this year or would action be taken on amendments as they were proposed. He would be unable to vote on amendments until all amendments had been proposed and discussed. Council President Peterson clarified his intent was for Councilmembers to propose amendments to allow for a full discussion. Councilmember Plunkett suggested scheduling time on the agenda to discuss the amendments, recognizing that some amendments will be supported and others will be dropped during that process. Council President Peterson anticipated that specific discussion would be scheduled on either November 15 or 22. Non - Department Financial Consultant Jim Tarte explained Non - Department totals $11.3 million. He highlighted Non - Departmental expenditures over $100,000 and invited Council input: • $6.3 million — Fire District 1 Contract • $1.4 million — Principal & Interest Payments • $912,000 — SnoCom / New World • $600,000 — LEOFF Medical Expense Fund • $444,000 — Insurance — Liability & Property • $250,000 — Edmonds Center for Arts (ECA) • $197,000 — Hydrant Costs • $165,000 — Miscellaneous Contingency • $160,000 — ESCA/ SERS • $148,000 — Public Defender • $100,000 — Accrued vacation / sick payouts Councilmember Buckshnis referred to the $165,000 Miscellaneous Contingency, recognizing that was used in the private sector but was not common in municipalities. She was concerned that provided a rubber stamp to the Mayor to spend $165,000 and if safeguards were not in place, it would be an at -will contingency. Mr. Tarte explained Mayor Cooper and he reviewed each department's budget with the department in detail. If there was no justification for increasing a line item, it was reduced to the 2011 estimate amount. During that process there were a number of items identified that the Council, Mayor or Director do not have any control over whether the amount will meet the 2012 budget. For example, the $250,000 ECA loan guarantee or jail costs. The proposed 2012 budget of $526,000 for jail costs is the Edmonds City Council Approved Minutes October 25, 2011 Page 7 lowest in the past 6 years and represents best case scenario. In a number of departments, repairs and maintenance costs are based on historical expenses. However, failure of an HVAC system or a server could cost $20,000 - $30,000. Mr. Tarte summarized every department's budget is a best case scenario. In his experience, it is highly unlikely that a private or public entity will have a best case scenario for all departments. After consolidating all the budgets, he felt it prudent to add a contingency for under - budgeted items. He emphasized the Miscellaneous Contingency was for under - budgeted expenditures that are beyond the City and staff's ability to control. That is specifically stated in the budget narrative. The Council could take action to require this fund only be used for under - budget items. Councilmember Buckshnis pointed out budget amendments are used to address under - budget expenditures. She preferred to do an amendment if additional funds were necessary for the ECA bond debt rather than utilizing funds from the Miscellaneous Contingency. Mr. Tarte explained revenues in the General Fund budget exceed expenditures by $43,000; removing the Miscellaneous Contingency increases that amount to approximately $200,000. A citizen, Councilmember or Mayor may think that is extra money that can be spent when in reality that $200,000 cannot be spent because there is no contingency for things that may happen over the course of the year citywide. If a contingency is not budgeted, it is likely expenditures will exceed revenues. He concluded budgeting for a Miscellaneous Contingency is prudent as long as there are proper controls. Councilmember Wilson asked what would be an adequate percentage for a $60 -70 million budget for contingency expenditures in the public or private sector. Mr. Tarte answered t /2 %. The Miscellaneous Contingency is in the General Fund which has expenditures of approximately $33 million; $33 million multiplied by /2% is approximately $165,000. Councilmember Wilson commented' /2 %seems pretty low for a contingency when each department does not have a contingency. Mayor Cooper asked Mr. Tarte to explain the FD1 contract amount and what could happen in the LEOFF Medical Expense Fund, currently budgeted at $600,000. Mr. Tarte explained the LEOFF Medical Expense Fund was $375,000 last year; the $225,000 increase is the largest increase in the General Fund from 2011 to 2012. The increase is due to anticipated medical expenditures of the City's LEOFFI retirees. That fund currently has a balance of approximately $300,000, an approximately 6 month reserve; the estimated medical expenditures in 2012 of $600,000 do not expend the fund balance. Mayor Cooper pointed out that one more LEOFFI retiree moving into an assisted living facility has the potential to increase expenditures by $200,000 /year. Mr. Tarte agreed. With regard to the FDI contract, Mr. Tarte explained the contract is currently $6.2 million; FDI has not communicated any increase to the City although the contract states that will occur by September 1. He has heard the increase may be as high as 3.7 %. FDI is in negotiations with their unions. The projected $6.3 million was calculated by adding 2.5 %; once negotiations with the FDI firefighter union are completed, that amount may change. If a 3.7% increase is approved, the budget will need to be increased by approximately $75,000; if it is less than 2.5 %, the $6.3 million amount can be reduced. Council President Peterson agreed safeguards on the use of the Miscellaneous Contingency were appropriate. He envisioned the Miscellaneous Contingency would make it easier to track cost overruns from under - budgeted items via a quarterly review by the Finance Committee. Safeguards could include expenditures over a certain amount must be approved by the Council. Mayor Cooper pointed out any expenditure over $100,000 would need to be approved by the Council. Councilmember Buckshnis expressed concern with practices that were inconsistent with other cities' practices. She preferred to follow industry standards and the practices used by other cities. She offered to Edmonds City Council Approved Minutes October 25, 2011 Page 8 research whether other cities used a Miscellaneous Contingency. She relayed Mr. Hunstock's indication that Tukwila does not budget a Miscellaneous Contingency. Councilmember Plunkett preferred to do a budget amendment to address under - budget expenditures. Councilmember Bernheim asked whether the FD contract stated the contract shall be adjusted each year no later than September 1. Mr. Tarte agreed it did. Councilmember Bernheim asked what happened now that FDl had not informed the City of any increase. Mayor Cooper explained the contract amount increase is tied to the COLA received by firefighters. The firefighters' multi -year collective bargaining agreement has a 3.7% COLA for 2012, 100% of the CPI. FD1 is currently in negotiations with the firefighters' union regarding a concession. If the firefighters' union does a concession and does not accept the entire 3.7 %, the contract would increase by a lesser amount. Councilmember Bernheim referred to the contract clause that states the payment shall be adjusted each year no later than September 1, presumably so the City can budget, and asked whether labor costs were independent of that clause. Mayor Cooper responded FDl had a verbal conversation with Mr. Tarte during preparation of the budget that the firefighters' contract includes a 3.7% increase. Until negotiations are completed, that exact percentage increase is unknown. Councilmember Bernheim asked whether FD was required to inform the City by September 1. Mr. Tarte agreed the contract states that will occur by September 1. He offered to research the consequence if the increase was not submitted by that date. Mayor Cooper advised the increase was included in the $6.3 million budgeted for FDl, depending on negotiations, that amount could be lower. Public Works Public Works Director Phil Williams explained Public Works has multiple revenue sources with restrictions on how they are spent. He reviewed the Public Works 2012 expenditure budgets: O eratin Administration (0.83 %) $ 294,110 Facilities 1,351,548 Engineering 1,318,706 Streets 1,568,948 Combined Utility 15,558,643 - Rate Capital 1,772,053 - Debt Service 1,653,672 - Utility Taxes 1,544,996 - Water Purchase 1,410,000 Fleet 1,311,334 Capital Street Capital 2,075,525 Facilities Capital 245,000 Utility Capital 11,591,444 - Water 3,337,549 - Storm 2,137,046 - Sewer 4,990,393 - Treatrnent 1,126,376 Total $35,312,358 Mr. Williams emphasized the above Streets budget does not include any funds for paving. He reviewed O &M expenses in the Combined Utility Fund ($15,558,643): Water $5.37 million Sewer $4.47 million Edmonds City Council Approved Minutes October 25, 2011 Page 9 Storm $2.26 million Treatment $3.45 million Mr. Williams explained in 2010 the Council reviewed, modified and approved a new Water System Comprehensive Plan and a Utility Rate Study and Cost of Service Analysis. That, in addition to approval of new Stormwater Comprehensive Plan and the imbedded capital programs, the Council adopted a three - part rate package that resulted in a 4.4 -4.5% water and stormwater rate increase on August 1, 2010 and January 1, 2011. The final rate increase, 7.5% water and 8% stormwater will be implemented on January 1, 2012. The impact of those increases is a total combined utility rate for an average single family residential using 800 cubic feet /month of $71.92 with utility tax ($32.55 water, $27.85 sewer, and $11.52 stormwater). The utility bills on a bimonthly basis. Mr. Williams reviewed a rate comparison (without utility tax): Mr. Williams explained the year -to -year difference in Public Works budgets is due capital projects. He highlighted projects in Fund 112 Transportation, Fund 116 Facilities, Fund 412 -100 Water, Fund 412 -300 Sewer, Fund 412 -200 Storm, and Fund 412 Wastewater Treatment Plant. Mr. Williams commented on the need to pursue revenue bonds for capital programs in water ($6.73 million), sewer ($1.1 million) and stormwater ($3.2 million) along with current refunding of utility revenue bond debt. He pointed out differences between the 2012 and the 2011 budget due to: • Loss of a custodian (not replacing a custodian who retired) $ 6 1, 100 (decrease) • No General Fund Contribution to the 511 B $300,000 (decrease) • Estimated increase in fuel costs $ 26,000 (increase) Councilmember Buckshnis inquired about the lower than anticipated revenue from the TBD, approximately $600,000 in 2012. Mr. Williams explained when the TBD was approved in 2009, it was anticipated the vehicle license fee would generate $750,000 /year. In 2010, the first full year the fee was collected, the City collected $589,000. He anticipated the revenue the City was receiving now was what would be received in the future. He pointed out the Street budget had only two major revenue sources, 1) the $20 fixed TBD fee, and 2) the fixed per gallon gas tax. Councilmember Buckshnis asked whether passage of the Street Levy would impact Fund 111. Mr. Williams anticipated the funds would come to Fund 112, Street Construction. Parks & Recreation and Cultural Services Parks & Recreation Director Carrie Hite reviewed expenses and highlighted changes: Edmonds Lynnwood Mountlake Terrace Shoreline Water $27.42 $19.21 $28.91 $36.63 Sewer $25.32 $35.38 $37.52 $33.00 Storm $10.47 $ 7.52 $ 9.08 $10.84 Total $63.21 $63.22 $75.51 $80.47 Mr. Williams explained the year -to -year difference in Public Works budgets is due capital projects. He highlighted projects in Fund 112 Transportation, Fund 116 Facilities, Fund 412 -100 Water, Fund 412 -300 Sewer, Fund 412 -200 Storm, and Fund 412 Wastewater Treatment Plant. Mr. Williams commented on the need to pursue revenue bonds for capital programs in water ($6.73 million), sewer ($1.1 million) and stormwater ($3.2 million) along with current refunding of utility revenue bond debt. He pointed out differences between the 2012 and the 2011 budget due to: • Loss of a custodian (not replacing a custodian who retired) $ 6 1, 100 (decrease) • No General Fund Contribution to the 511 B $300,000 (decrease) • Estimated increase in fuel costs $ 26,000 (increase) Councilmember Buckshnis inquired about the lower than anticipated revenue from the TBD, approximately $600,000 in 2012. Mr. Williams explained when the TBD was approved in 2009, it was anticipated the vehicle license fee would generate $750,000 /year. In 2010, the first full year the fee was collected, the City collected $589,000. He anticipated the revenue the City was receiving now was what would be received in the future. He pointed out the Street budget had only two major revenue sources, 1) the $20 fixed TBD fee, and 2) the fixed per gallon gas tax. Councilmember Buckshnis asked whether passage of the Street Levy would impact Fund 111. Mr. Williams anticipated the funds would come to Fund 112, Street Construction. Parks & Recreation and Cultural Services Parks & Recreation Director Carrie Hite reviewed expenses and highlighted changes: Edmonds City Council Approved Minutes October 25, 2011 Page 10 2011 Budget 2011 Estimate 2012 Budget 2011 Budget to 2012 Budget 2012 Budget to 2011 Estimate Salaries & Ben. $2,512,735 $2,364,984 $2,457,845 ($54,890) $92,861 Supplies $114,590 $106,494 $144,026 $29,436 $37,532 Prof. Services $357,534 $344,954 $339,666 ($17,868) ($5,288) Utilities $133,416 $155,000 $150,000 $16,584 ($5,000) Edmonds City Council Approved Minutes October 25, 2011 Page 10 Inter Gov /Fund $130,094 $136,545 $137,823 $7,729 $1,278 Miscellaneous $38,570 $74,002 $76,370 $37,800 $2,368 Other $118,286 $115,385 $130,318 $12,032 $14,933 Total $3,405,225 $3,297,364 $3,436,048 $30,823 $138,684 Ms. Hite explained the increases in supplies, miscellaneous and other are due primarily to the grant the City received from the Swedish Hospital Foundation (Verdant Grant). The increase in revenue equals the additional expenditures. The reduction in the professional services budget is the result of changing the split percentage with contract instructors this year and in 2012. Ms. Hite reviewed revenues: Ms. Hite advised pool revenues were down this year. She is preparing an analysis of pool revenues that will be available next week. (Councilmember Wilson left the meeting at 8:50 p.m.) Ms. Hite reviewed the total Parks budget: 2011 Budget 2011 Estimate 2012 Budget 2012 Budget to 2011 Budget 2012 Budget to 2011 Estimate Recreation $807,500 $872,629 $860,000 $52,500 ($12,629) Non Resident $3,405,225 $3,297,364 $60,000 $60,000 $60,000 Verdant Grant ($2,139,692) ($1,997,536) $69,300 $69,300 $69,300 Fac. Rent $319,683 $314,504 $332,885 $13,202 $18,381 Pool $138,350 $112,695 $139,519 $1,169 $26,824 Total $1,265,533 $1,299,828 $1,461,704 $196,171 $161,876 Increase 13% 11% Ms. Hite advised pool revenues were down this year. She is preparing an analysis of pool revenues that will be available next week. (Councilmember Wilson left the meeting at 8:50 p.m.) Ms. Hite reviewed the total Parks budget: Ms. Hite reviewed decision packages in the proposed budget: Tree Maintenance costs (ongoing): 2011 Budget 2011 Estimate 2012 Budget 2011 Budget to 2012 Budget 2012 Budget to 2011 Estimate Revenue $1,265,533 $1,299,828 $1,461,704 $196,171 $161,876 Expenses $3,405,225 $3,297,364 $3,436,048 $30,823 $138,684 ($2,139,692) ($1,997,536) ($1,974,344) $165,348 $23,192 Increase/ Decrease -5% -1% Ms. Hite reviewed decision packages in the proposed budget: Tree Maintenance costs (ongoing): $25,000 Walker riding mower (one time): $17,500 Cemetery seasonal staff (ongoing) $ 5,000 Class Software for Pool (one time): $ 8,675 Class Software Maintenance (ongoing): $ 1,642 Landpride pull behind mower (one time): $17,144 Ms. Hite explained funds have never been budgeted for tree trimming and as a result funds are taken from other line items in either Parks or Public Works. Trees continually need trimming and she encouraged the Council to budget for that need. She recommended the funding for the Walker riding mower come from the Cemetery Fund as the mower is used specifically for the cemetery. Edmonds City Council Approved Minutes October 25, 2011 Page 11 Ms. Hite identified the following issues: A. Cemetery Maintenance Improvement Fund Expenses continue to grow, revenues are flat, therefore fund balance is decreasing. Current fund balance will carry us through 2012 and part of 2013. Will need to look at structural issues of this fund. B. Park Trust Fund: Yost Pool • Trust fund for Yost "save the pool" campaign depleted in 2011. • Long term operational goal is to increase revenue, decrease expenses and minimize subsidy. • This year, revenue was decreased due to weather and the new Lynnwood pool. C. Beautification Program for 2012: • $40,000 in General Fund expenditures • $36,000 in REST 125 expenditures REET 125 only for capital, with some allowance now for M & O. • Will need to look at this in the future, when legislation expires. Community Services & Economic Development Community Services/Economic Development Director Stephen Clifton reviewed the Community Services budget: 0 2012 Budget: $323,006 0 Reduction from 2011 Budget: 4% 0 Increase from 2011 Estimated Year End: 5% Community Services 2011 Budget 2011 Estimate 2012 Budget 2011 Budget to 2012 Budget 2012 Budget to 2011 Est. Salaries & Benefits 276,324 266,505 273,476 (2,848) 6,971 Professional Services 50,514 35,670 42,000 (8,514) 6,330 Other Costs 8,390 6,540 7,530 (860) 990 Dep't Budget 335,228 308,715 323,006 (12,222) 14,291 Percentage Increase /Decrease -4% -5% Mr. Clifton explained the decrease in the professional services line item was there were only expenditures the government relations contract (Mike Doubleday) and no expenditures for environmental litigation. Mr. Clifton reviewed the Economic Development budget pointing out all salaries and benefits are in the Community Services budget: 0 2012 Budget: $114,200 0 Increase from 2011 Budget: 46% 0 Increase from 2011 Estimated Year End: 72% Economic Development 2011 Budget 2011 Estimate 2012 Budget 2011 Budget to 2012 Budget 2012 Budget to 2011 Est. Professional Services 35,800 37,518 79,000 43,200 41,482 Advertising, 25,000 24,000 30,000 5,000 6,000 Other Costs 17,300 4,950 5,200 - 12,100 250 Dep't Budget 78,100 66,468 114,200 36,100 47,732 Percentage Increase /Decrease 46% (related to strategic plan ) 72% (related to strategic plan) Edmonds City Council Approved Minutes October 25, 2011 Page 12 Mr. Clifton advised when the budget was prepared, the expected expenditure for Beckwith Consulting Group in 2011 was $40,000 with the balance spent in 2012. Due to the schedule adjustment, the consultant expects to expend $28,000 this year and the balance in 2012. The 2012 budget for professional services will increase by that amount. He emphasized the total $100,000 appropriated for the strategic plan has not changed. Development Services Planning Manager Rob Chave explained operations of the Development Services Department consist of programs designed to meet the requirements of federal, state, and locally mandated laws and codes and other discretionary services. The department consists of two divisions, planning and building as well as an administrative division with code enforcement and reception. The Development Director position is not budgeted in 2012. Mr. Chave reviewed expenditures: Mr. Chave reviewed revenues 2011 Estimate 2012 Proposed Percentage Administration $257,515 $279,404 8.50% Building Services $651,699 $641,191 - 1.60% Planning Services $759,127 $734,267 - 3.30% Total Department $1,668,341 $1,654,862 - 0.80% Mr. Chave reviewed revenues Mr. Chave reviewed a chart comparing the number of Development Services employees to building permits 1985 — 2011 estimate. The 2012 budget includes 2 employees in admin, 6 in building and 6 in planning for a total of 14, the same number the department had 25 years ago. Over that same period of time, the City has experienced a 34% increase in population. Because of the City's slow growth, the number of permits represents small scale activity with occasional increases in activity from significant projects such as Pt. Edwards. He pointed out a modest increase in employment in peak years but the City never built up its employment during the peak. The City has decreased its employment somewhat in the downturn but not as much as other jurisdictions, one of the benefits of holding the line during peak years. Mr. Chave displayed a graph comparing building permits issued through September: 0 2007 954 0 2008 826 0 2009 679 0 2010 681 0 2011 808 Mr. Chave explained summarized people are still doing projects, just smaller projects and activity levels are beginning to increase. He displayed a graph comparing commercial building permits to project valuation through September): New Construction Alter /Addition 0 2006 $6,542,069 $4,686,935 0 2007 $ 249,610 $6,518,858 Edmonds City Council Approved Minutes October 25, 2011 Page 13 2011 Estimate 2012 Proposed Percentage Building Permits $400,000 $420,000 5.00% Plan Review $225,000 $235,000 4.40% Land Use $76,500 $80,500 5.20% Total $701,500 $735,500 4.80% Mr. Chave reviewed a chart comparing the number of Development Services employees to building permits 1985 — 2011 estimate. The 2012 budget includes 2 employees in admin, 6 in building and 6 in planning for a total of 14, the same number the department had 25 years ago. Over that same period of time, the City has experienced a 34% increase in population. Because of the City's slow growth, the number of permits represents small scale activity with occasional increases in activity from significant projects such as Pt. Edwards. He pointed out a modest increase in employment in peak years but the City never built up its employment during the peak. The City has decreased its employment somewhat in the downturn but not as much as other jurisdictions, one of the benefits of holding the line during peak years. Mr. Chave displayed a graph comparing building permits issued through September: 0 2007 954 0 2008 826 0 2009 679 0 2010 681 0 2011 808 Mr. Chave explained summarized people are still doing projects, just smaller projects and activity levels are beginning to increase. He displayed a graph comparing commercial building permits to project valuation through September): New Construction Alter /Addition 0 2006 $6,542,069 $4,686,935 0 2007 $ 249,610 $6,518,858 Edmonds City Council Approved Minutes October 25, 2011 Page 13 • 2008 $1,565,228 $4,898,576 • 2009 $1,796,450 $1,691,846 • 2010 $0 $5,117,138 • 2011 $5,214,317 $3,647,105 Mr. Chave highlighted budget implications: • Maintenance budget • No major new program initiatives • Commitment to reviewing department organization to focus on core priorities and sustainable service delivery Court Municipal Court Judge Doug Fair explained the court was anticipating steady salary expenditures as no staff had been added or lost. Court costs are driven by the number of filings; filings have remained fairly steady over the past 3 -4 years. He anticipated an increase in interpreter costs as a more diverse population comes into the court. The court is required to provide interpreter services in court and probationary services. Council Mr. Tarte displayed the City Council budget (page 13 of 2012 budget) and highlighted the following: • A $34,000 decrease in benefits due to an ordinance passed to eliminate health benefits for dependents • A decrease in professional services due to lower City Attorney costs (a portion is allocated to City Council budget) • Council Contingency Miscellaneous similar to the Miscellaneous Contingency in Non - Department to fund unforeseen events. Historically this has been used for legal situations. Councilmember Buckshnis pointed out the difference between the Council Contingency Miscellaneous and the Miscellaneous Contingency in Non - Department was the Council controlled expenditures in the Council Contingency Miscellaneous, the Miscellaneous Contingency in Non - Department did not have any controls. She pointed out the Council Contingency Miscellaneous replaces the Council Contingency in the General Fund. Mr. Tarte agreed. Councilmember Buckshnis complimented Mr. Tarte on how understandable the 2012 budget is. Mr. Tarte concluded the General Fund budget has $43,000 revenues in excess of expenditures (page 4 of 2012 budget). The following funds are using their beginning fund balance to cover 2012 expenditures beyond their revenues: • $300,000 — Vehicle Replace Fund • $256,000 — Street Fund • $ 19,000 - LEOFF Medical Expense Fund • $ 25,000 — Fire Pension Fund • $188,000 — Building Maintenance Fund • $788,000 — Total Mr. Tarte concluded the 2012 budget will get the City through 2012 but it is by no means a sustainable model. Councilmember Buckshnis asked whether the 2012 expenditure of $188,000 from the Building Maintenance Fund will be addressed if the building maintenance levy passes. Mr. Williams answered Proposition 3 is a total of $500,000. Staff and Council's proposal was to split that between building and Edmonds City Council Approved Minutes October 25, 2011 Page 14 parks maintenance. A list of building maintenance and parks maintenance projects in the CIP were submitted that will be pursued with that additional funding. Mr. Tarte cautioned budget amendments in the 4th quarter of 2012 may be higher than in previous years due to the tight budgeting in 2012. 9. COUNCIL REPORTS ON OUTSIDE COMMITTEE/BOARD MEETINGS Councilmember Fraley- Monillas reported on the Snohomish Health District, reminding that unused, non - narcotic medications can be dropped off at Bartell's at Westgate and narcotics can be dropped off at the Edmonds Police Department. She thanked the Edmonds Police Department for participating in this effort to keep medications out of the garbage and water. Councilmember Buckshnis reported the Economic Development Commission (EDC) discussed the UW study, outreach to citizens, the City's new website and whether the term of EDC should be extended. Mayor Cooper reported the Regional Fire Authority (RFA) Planning Committee is moving forward. One of the questions the Finance Committee was considering was whether such a large organization could be funded within the assessed value of the region. The Finance Subcommittee reported a RFA could be sustained within the funding mechanism and available assessed value. The next step is for the Finance Subcommittee, which Councilmember Petso serves on, to present a complete financial plan to the Planning Committee and for the Strategic Level of Service Subcommittee, which Councilmember Wilson serves on, to present a plan to the Planning Committee. After those plans are adopted during the first quarter of 2012, they will be presented to City Councils and Fire Commission Boards for approval and a resolution whether the jurisdiction wants to continue. Mayor Cooper reported the city of Bothell has asked to join the RFA Planning Committee; that will be debated at the November Planning Committee meeting. He anticipated in November/December Councilmember Petso and Councilmember Wilson will report details regarding the subcommittees' efforts. He encouraged the Council and the public to visit the RFA's website (RTA- Planning.org) for ongoing information. He reported the City's new Finance Director Shawn Hunstock has a great deal of experience with RFAs, having participated in the Valley Regional Fire Authority in Auburn while working in Auburn and Tukwila's investigation of their participation in Kent's RFA. 10. MAYOR'S COMMENTS Mayor Cooper reported he attended Cascade Symphony's 50`h anniversary concert on October 23 and read the proclamation. The theme of the concert was Rick Steves' tour through Europe and Mr. Steves narrated the music. The October 23 and 24 concert were filmed and the city of Edmonds and the Cascade Symphony will be featured in a PBS program. Dr. Bob Anderson, who started the Cascade Symphony 50 years ago, was in attendance; he was the orchestra conductor when Councilmember Plunkett and he attended Edmonds High School. 11. COUNCIL COMMENTS Councilmember Buckshnis encouraged citizens to thank Mr. Tarte for everything he has done for the City. Councilmember Bernheim expressed concern with the $16,000 in independent expenditures on Edmonds political campaigns. He found it a dangerous precedent and urged citizens to express their dissatisfaction with national pacts spending that much money compared to the amount candidates typically spend. He Edmonds City Council Approved Minutes October 25, 2011 Page 15 recalled spending $8,000- $9,000 on his City Council campaign. He objected to an independent expenditure from a political interest group in that amount. Councilmember Fraley - Monillas thanked the Spady family for a wonderful grand opening at Dick's Drive In. Mayor Cooper and Councilmembers Bernheim, Councilmember Petso and she attended the grand opening. Council President Peterson congratulated Councilmember Plunkett on the birth of his grandchild. Convene in Executive Session At 9:35 p.m., Mayor Cooper announced that the City Council would meet in executive session regarding potential litigation per RCW 42.30.110(1)(i). He stated that the executive session was scheduled to last approximately 15 minutes and would be held in the Jury Meeting Room, located in the Public Safety Complex. Elected officials present at the executive session were: Mayor Cooper, and Councilmembers Bernheim, Plunkett, Fraley - Monillas, Buckshnis, and Peterson. Others present were City Attorney Jeff Taraday and City Clerk Sandy Chase. The executive session concluded at 9:55 p.m. Mayor Cooper reconvened the regular City Council meeting at 9:58 p.m. 12. ADJOURN With no further business, the Council meeting was adjourned at 9:59 p.m. Edmonds City Council Approved Minutes October 25, 2011 Page 16