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05/04/2010 City CouncilMay 4, 2010 The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Haakenson in the Council Chambers, 250 5th Avenue North, Edmonds. The meeting was opened with the flag salute. ELECTED OFFICIALS PRESENT Gary Haakenson, Mayor Steve Bernheim, Council President D. J. Wilson, Councilmember Michael Plunkett, Councilmember Dave Orvis, Councilmember (arrived 7:08 p.m.) Adrienne Fraley- Monillas, Councilmember Diane Buckshms, Councilmember ELECTED OFFICIALS ABSENT Strom Peterson, Councilmember 1. APPROVAL OF AGENDA STAFF PRESENT Gerry Gannon, Assistant Police Chief Stephen Clifton, Community Services /Economic Development Director Brian McIntosh, Parks & Recreation Director Noel Miller, Public Works Director Lorenzo Hines, Finance Director Scott Snyder, City Attorney Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder Mayor Haakenson stated an Executive Session regarding negotiations for the purchase of real estate needed to be added to the agenda. Following a brief discussion, a 30- minute executive session was added to the agenda as Item 12B and Item 12C was added to the agenda for the Council to take any action . necessary following the conclusion of the executive session. Mayor Haakenson relayed staff's request to add a 5 minute agenda item to report on due diligence activities on the potential purchase of the Skipper's property which was added to the agenda as Item 3C. Council President Bernheim requested a 5 minute agenda item for a Community Service Announcement from the Port which was added to the agenda as Item 3B. COUNCILMEMBER FRALEY- MONILLAS MOVED, SECONDED BY COUNCIL PRESIDENT BERNHEIM, TO APPROVE THE AGENDA AS AMENDED. MOTION CARRIED UNANIMOUSLY. (Councilmember Orvis was not present for the vote.) 2. CONSENT AGENDA ITEMS COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO APPROVE THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. (Councilmember Orvis was not present for the vote.) The agenda items approved are as follows: A. ROLL CALL B. APPROVAL OF CITY COUNCIL MEETING MINUTES OF APRIL 27, 2010. C. APPROVAL OF CLAIM CHECKS #118580 THROUGH #11.8713 DATED APRIL 29, 2010 FOR $1,764,970.73. Edmonds City Council Approved Minutes May 4, 2010 Page 1 D. ACCEPTANCE OF LIST OF BUSINESSES APPLYING FOR RENEWAL OF THEIR LIQUOR LICENSES WITH THE WASHINGTON STATE LIQUOR CONTROL BOARD, APRIL 2010. E. AUTHORIZATION FOR MAYOR TO SIGN ADDENDUM NO. 3 TO THE PROFESSIONAL SERVICES AGREEMENT WITH BROWN & CALDWELL FOR THE ODOR CONTROL IMPROVEMENT PROJECT FOR $18,000. F. PROCLAMATION IN HONOR OF NATIONAL DAY OF PRAYER, MAY 6, 2010. G. PROCLAMATION IN HONOR OF NATIONAL POLICE WEEK, MAY 1.0 -16, 2010. H. PROCLAMATION IN HONOR OF BUILDING SAFETY MONTH, MAY 2010. 3A. COMMUNITY SERVICE ANNOUNCEMENT: GREATER EDMONDS CHAMBER OF COMMERCE / NEW EDMONDS CHAMBER FOUNDATION. Bob Rinehart, Greater Edmonds Chamber of Commerce, informed the Council, staff and residents that the Chamber has established a non - profit foundation. The Chamber will continue to operate as a 501(c)(6); and has created a separate entity, a 501(c)(3) that can accept tax exempt charitable donations. There will be two separate boards and two separate sets of books. Mr. Rinehart explained this was a significant step that would better enable the Chamber to continue to organize and implement several important events in Edmonds, events that build community and support and maintain cherished traditions. The Chamber has been organizing community events in Edmonds for over 100 years, relying nearly exclusively on sponsorships and donations from local businesses and donations from residents. This goodwill and generosity has enabled the Chamber to put on events such as the 4th of July parade and fireworks, Halloween and tree lighting. The 4th of July events cost approximately $40,000; he relayed the Chamber's plans to submit a request to the Council in May for modest funding assistance. It is hoped the establishment of the foundation will induce more residents to support these non -money making community events, particularly as their donations will qualify as tax - exempt charitable donations. He advised donations could be made online at the Chamber's website, edmondswa.com or by visiting the Chamber offices at 121 5th Avenue N. 3B. COMMUNITY SERVICE ANNOUNCEMENT: PORT OF EDMONDS Mary Lou Block, Port of Edmonds Commissioner, invited the Council, staff and the public to the Port's workshop on Wednesday, May 5 from 6:00 to 9:00 p.m. at Harbor Square Building 2. The purpose of the workshop is to elicit comments, suggestions, and ideas regarding the redevelopment of Harbor Square. 3C. DUE DILIGENCE ACTIVITIES REPORT. Predicated on the Council's approval of a Purchase and Sale Agreement, City Attorney Scott Snyder suggested developing a calendar of the feasibility study dates when additional funds would be expended and identifies the necessary due diligence activities the City must undertake as well as the Comprehensive Plan amendments that will be required. He noted staff had previously presented to Council contracts for an appraisal and the Level 1 environmental analysis. Both have a three week turnaround and it would be preferable to have those results available to the Council prior to the expiration of the first 30 day feasibility period when another $10,000 would be due. Options for Council are, 1) approve the contracts with instruction to staff not to give authorization to proceed until the Council has approved the Purchase and Sale Agreement and has the seller's concurrence, or 2) schedule a special meeting to approve the Edmonds City Council Approved Minutes May 4, 2010 Page 2 contracts. He wanted to avoid the seller agreeing to the Council's terms and a period of 4 -5 days elapsing before authorization could be obtained from the Council. He noted it was common for the Council to approve a contract but withhold authorization to proceed. He summarized the appraisal and the Level 1 analysis were very time sensitive. Councilmember Buckshnis referred to the appraisal that had been prepared for this property dated March 9 and asked whether that appraisal could be updated to save money. Mr. Snyder responded appraisers have a relationship with whoever commissioned the appraisal. The appraisal identified in the contract is intended to meet all state and federal grant requirements. He recommended the Council obtain its own appraisal to ensure it was in the correct format for all purposes. COUNCILMEMBER FRALEY- MONILLAS MOVED, SECONDED BY COUNCILMEMBER ORVIS, TO AUTHORIZE THE MAYOR TO EXECUTE A CONTRACT TO PERFORM AN APPRAISAL OF THE SUBJECT PROPERTY AND AUTHORIZE THE MAYOR TO EXECUTE A CONTRACT TO PERFORM A PHASE 1 ESA OF THE SUBJECT PROPERTY WITH INSTRUCTIONS TO STAFF NOT TO PROVIDE AUTHORIZATION TO PROCEED UNTIL THE COUNCIL HAS APPROVED A PURCHASE AND SALE AGREEMENT. MOTION CARRIED (5 -1), COUNCILMEMBER WILSON VOTING NO. 4. PRESENTATION ON AFFORDABLE HOUSING. Councilmember Buckshnis explained Shane Hope, Mountlake Terrace Community and Economic Development Director, will provide an overview of the Inter - Jurisdictional Affordable Housing Program under consideration by Snohomish County Tomorrow (SCT). She explained affordable housing is good, quality housing for working people, first -time buyers, and seniors and can be further defined by each community. Edmonds belongs to SCT which began in 1989 as a voluntary association of cities, towns, the County and the Tulalip Tribes. Meetings focused on issues associated with growth and related impacts on road systems, public services and resource lands. SCT has a rich history of success and provides a means for fostering communication and creating an inter jurisdictional forum. Ms. Hope explained a study was conducted in 2009 about how different cities, the County and the region . could participate together to address affordable housing in new, meaningful ways. Key findings of the study included: • The need is growing everywhere in Snohomish County, faster than expected. • Some officials are interested in creating an inter jurisdictional program • A handful of successful models that provide: • Creation of new capital recourse (e.g. trust fund) • Collaborative planning and technical assistance • A new local trust fund not workable at this time but collaborative planning and technical assistance could be useful • New, dedicated staff capacity needed for meaningful collaboration • Business community sees need for diverse housing mix, though not a high priority She described an example in King County, ARCH (A Regional Coalition for Housing): • Created in early 1990's by Citizens Affordable Housing Task Force • A voluntary organization that began with just three cities and King County • Has now grown to 15 cities and King County • Since 1993, provided technical assistance to members and funded $27 million in projects The basis for ARCH in King County is: • Growing need for affordable housing Edmonds City Council Approved Minutes May 4, 2010 Page 3 • Current delivery system has many gaps • Increased local government support compliments efforts of private sector housing developers • Local governments that work together can be more effective The study concluded a new voluntary inter jurisdictional program could be effective in Snohomish County if four threshold criteria are met: • Critical mass of participating jurisdictions • Funding commitments for 24 months of staff support • Host agency for administrative support • Agreement on who the program will serve and how it will be governed Ms. Hope described the proposed governance: • Voluntary, Interlocal Agreement • Semi - independent governing body, appointed by participating jurisdictions • Advisory board(s) as needed The proposed outcomes include: • Achieve affordable housing goals of participating jurisdictions focused on: • Expanding affordable housing opportunities • Home ownership for households with <= median income • Rental housing for households <= 50% median income • Where greatest need exists and provides adequate access to employment, education, shopping, services, amenities, and transit • Supporting safe neighborhoods and stable property values • Locally identified needs Proposed resources include one full time staff person depending on the number, size and resources of jurisdictions; operating funds from participating jurisdictions and grants /state appropriates; and a long range objective of new local funding sources for projects. Proposed activities in the start-up phase include: • Focus on a variety of technical assistance, education and planning activities such as: • Comprehensive Plan housing elements • Regulatory or incentive strategies • Funding developing • Knowledge base of public, local officials and staff • Share information across jurisdictions • Monitor results The SCT Committee accepted the report and agreed to co- convene with the Housing Consortium an implementation task force. The task force included representatives of interested jurisdictions, along with other public and private stakeholders. The program proposal will be used as a discussion draft. It is recognized this process may take a full year. The interim task force's recommendations include: • Get cities' support • Identify funding opportunities — Representative Llias committed to help the group obtain state seed money in the 2011 . budget Housing Authority of Snohomish County offered back office support Initial jurisdiction set up program — 6 -8 months (bylaws, goals, governing structure, etc) — arm of SCT Edmonds City Council Approved Minutes May 4, 2010 Page 4 Ms. Hope reviewed several cost scenarios for an inter jurisdictional housing program that ranged from $.08 to $.50 /per capita. Participation options for cities are: A. Do not participate B. Do not participate financially, be an observe only C. Move forward carefully to participate in the program though SCT She identified other cities that have agreed to participate including Lake Stevens, Mukilteo, Mountlake Terrace, Marysville and Snohomish; other cities and Snohomish County are considering the program. She identified next steps: • Provide direction on the City's participation in establishing a program through SCT • March — June: SCT member jurisdictions to make commitment decision • June - December: participating SCT members begin working together to define and setup program • 2011: Members seek program funding through available resources (state, local, etc.) • 2012: if adequate funding, program to begin operation Councilmember Wilson referred to a list of cost- burdened households by city which indicates Edmonds has nearly 4,000 cost burdened households. Ms. Hope explained a cost - burdened housing is a household that earns less than the median income for that jurisdiction and more than 30% of their household goes toward housing. A teacher may be an example of a cost - burdened household; a teacher earning $41,000 /year can afford monthly rent of $1,025; the average monthly rent for a 3 bedroom apartment is nearly $1,400. She summarized there were many people affected by the lack of housing choices in the current market. Councilmember Wilson asked if the senior population comprised a high percentage of cost burdened households. Ms. Hope answered she did not have specific data but there are a significant number of seniors in that category. Councilmember Wilson commented Edmonds wanted to be a community where working families could afford homes as well as where seniors could continue to live. COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCIL PRESIDENT BERNHEIM, THAT EDMONDS PARTICIPATE IN THE SCT INTER - JURISDICTIONAL HOUSING PROGRAM, OPTION C (MOVE FORWARD CAREFULLY TO PARTICIPATE IN PROGRAM THROUGH SCT). Councilmember Buckshnis commented there was a great deal more information in the packet that was available on the City's website regarding median income, first time buyers, etc. She noted at the Town Hall meetings Councilmember Fraley - Monillas and she have held several seniors have expressed a desire to continue living in Edmonds. She was also interested in attracting younger adults 20 -30 years old to Edmonds She estimated Edmonds' cost to participate based on the funding scenarios would be approximately $9,000. Councilmember Wilson commented affordable housing and low income housing were different. This item was housing that people could afford. Often a teacher, an entry -level police officer or other public employee may find it difficult to afford to live in Edmonds. Councilmember Fraley - Monillas assumed the estimated cost of $9,000 was based on the number of cities participating now and the cost would decrease as more cities participated. Council President Bernheim assured any cost would be decided at a later date. The Council was only agreeing to give serious future consideration at a later time. This was not a commitment to funds and a decision would be required in the future before any funds were committed. Ms. Hope agreed the more cities that participated, the lower the cost. Edmonds City Council Approved Minutes May 4, 2010 Page 5 1►lfflVMLIE1_1.77101M"LI \►1i►l0IWr1` Councilmember Wilson requested Senior Executive Council Assistant Jana Spellman communicate with the Snohomish County Council that Edmonds had agreed to participate. He also suggested Council President Bernheim or Mayor Haakenson draft a letter expressing the City's support, pointing out with Snohomish County's participation, Edmonds' cost could be $9,000 or less; without Snohomish County it would be $20,000 +. 5. PUBLIC COMMENT REGARDING POSSIBLE PURCHASE OF SKIPPER'S PROPERTY. Mayor Haakenson reported the Council received 14 emails, 8 opposed to the purchase, 3 in favor, and 3 commenting on other issues. Al Rutledge, Edmonds, pointed out an appraisal has already been conducted of the property. He was unaware who the other potential purchaser was or the amount of their offer. Ron Wambolt, Edmonds, was pleased the Council was embarking on extensive due diligence. He questioned whether an element of the due diligence process should be assessing whether the citizens believed the purchase would be prudent. Of the 36 comments made at the April 20 and 27 Council meetings, 24 opposed the purchase and 12 supported it. The results of an online poll conducted since April 23 regarding whether the Council should purchase the Skipper's property for $1.1 million revealed only 12% of participants favored the purchase. He urged the Council to listen to the majority of Edmonds citizens who have spoken against purchasing the Skipper's property; Joan Bloom, Edmonds, thanked the "fabulous five" for voting to consider purchase of the Skipper's property and for giving citizens three opportunities to provide input to Council. She recognized Councilmembers Plunkett and Orvis who have steadfastly supported keeping heights low and maintaining the small town feel of Edmonds; Councilmember Buckshnis who has been steadfast in pursuing transparency in Edmonds City government; and Councilmember Fraley- Monillas who was instrumental in reversing the Chapter 20 code change that further reduced citizen input into land use actions. She recognized Council President Bernheim for the exceptional job he has done keeping the Council on task and addressing the many serious issues facing the City. She shamed Councilmember Wilson for suggesting a visionary action on the part of fellow Councilmembers was an irresponsible action and for trying to deflect responsibility for the City's problems away from where it belonged. The financial woes of the City are the responsibility of Mayor Haakenson who has been in office for nearly 11 years because it is he, with staff support, who is responsible for preparing and presenting the budget to Council. To Councilmember Peterson, she would not forget that he supported the first Fire District 1 contract that included selling all the fire stations and equipment. She expressed her wholehearted support for the purchase of the Skipper's property, finding it a key property in the Waterfront Activity Center that should be reserved for public use rather than private development. She objected to the Chamber's comments at the last meeting, made on behalf of all board members. She compared this to Mayor Haakenson's comments on behalf of staff and himself to discontinue pursuit of an assessment of the ESE property, finding that an egregious abuse of power. Roger Hertrich, Edmonds, agreed with the importance of conducting due diligence. He noted the survey results with regard to the purchase of the Skipper's property were likely inaccurate due to scare tactics such as the property would be purchased with General Fund monies and would affect jobs. When people understood the way the purchase would be funded, there would be less concern. He recalled Councilmember Wilson had supported the Port purchasing the property and after a levy, the Port selling it to the City. He questioned Councilmember Wilson's opposition to the purchase of the Skipper's property Edmonds City Council Approved Minutes May 4, 2010 Page 6 when he had supported it in the past. He was excited about the City's purchase of the Skipper's property. Recognizing today as the Day of Prayer, he offered a prayer for successful purchase of the Skipper's property by the City. Shirley Wambolt, Edmonds, expressed concern with children playing in a park on the Skipper's site due to hazards created by ferry traffic. To Ms. Bloom, Councilmember Wilson expressed his appreciation and respect for her engagement although he disagreed with her position. To Mr. Hertrich, Councilmember Wilson explained under different circumstances he may be able to support the purchase of the Skipper's property, if it made sense financially and if it made sense within a broader vision for the properties. He did not support purchasing the property under these circumstances. 6. AUDIENCE COMMENTS Al Rutledge, Edmonds, reported on the successful food drive at Top Foods on April 2 -3 where citizens purchased 500 bags at $5 /each to donate to the Food Bank. He recognized several long time volunteers at the Edmonds Food Bank. Dave Page, Edmonds, explained his business was at the bottom of a 20% grade on 196th. He recalled in the past they have contacted the Police Department several times a year to address speeding in that area. Since the installation of a sign that displays vehicle speeds, speeding has virtually been eliminated. He suggested installing more signs in strategic locations, noting the cost of the signs was approximately $8,000. Roger Hertrich, Edmonds, reported on a meeting he attended yesterday that indicated the towers proposed for the old Safeway site would be affordable housing. The description provided of affordable housing was for working people, first -time buyers and seniors and as defined by each community. He pointed out the definition of affordable housing includes not just subsidized income - restricted housing units but all private and public housing units that are affordable for low and moderate income families. Next, he referred to the contract addendum for the Odor Control Improvement Project, noting the bids for that project in 2009 were $1,41.0,000. Because the City had adequate cash in the Utility Fund, the project was paid for outright rather than borrowing money. He questioned whether it was better to borrow money and save cash for a rainy day or if the City was charging too much for its utilities if there was $1.6 million available in the Utility Fund. In response to Mr. Hertrich, Councilmember Buckshnis explained although she did not pull that item from the Consent Agenda, she planned to follow -up on the $1.6 million Odor Control Improvement Project. Councilmember Fraley- Monillas expressed her appreciation to Mr. Rutledge for recognizing volunteers in the community. 7. 2009 BUDGET REVIEW Council President Bembeim reported the packet included the latest financials as of September 30, 2009. He explained that through the third quarter of 2009, General Fund expenditures were 70% of budget. He commented on the importance of enhancing revenue and limiting expenditures and eagerly awaited updated financial information. Edmonds City Council Approved Minutes May 4, 2010 Page 7 Councilmember Wilson observed the fact that General Fund expenditures were 70% of budget three - quarters of the way through 2009 was due to a $400,000 savings from staff furloughs, not spending $300,000 in Automobile Fleet Replacement, not spending $50,000 due to funds raised by the community for Yost Pool, and not filling positions such as the Development Services Director who retired in April 2009. He summarized General Fund expenditures were 70% of budget rather than 75% of budget due to those cuts. Mayor Haakenson agreed. ��•� �I_ \.� �1► 1 ► IZII']L_M1:7.YJ[�lil_ \71 Y 91 i�li[I : ILIZ� �II_I[I1 � 17_�I Y Finance Director Lorenzo Hines distributed Yearend 2009 and First Quarter 2010 Budget information. He pointed out the information was not in the format the Council was accustomed to as he was in the process of producing the final report. This is a potpourri of reports used to create the yearend report. He advised the final 2009 Yearend Report and 2010 First Quarter would not be complete to his standards until Friday; he offered to email those reports to the Council. He referred to an outline of General Fund revenues at yearend 2009 and total General Fund revenues, noting at the end of 2009, General Fund revenues are slightly above budget. He referred to a section regarding City departments yearend 2009, explaining the majority of City departments are under budget, a few were on budget. He pointed out the Engineering function was broken out in Development Services. Mayor Haakenson summarized Mr. Hines would email Councilmembers the fourth quarter 2009 Report and the 2010 First Quarter Report by Friday and provide a report to the Finance Committee on May 11. Mr. Hines referred to the 17 -page Expenditure Status Report, explaining the adjusted appropriation for General Fund expenditures was $34.2 million; actual expenditures were $32.9 million or $1.3 million under budget for 2009. The next group of reports were directly from the City's accounting system and were consistent with those in the quarterly report. There are reports for the Street Fund, Combined Street/Utility Improvement, Multimodal, Building Maintenance, Municipal Arts, Hotel/Motel, Employee Parking Permit, Tourism Promotion, REET 2, BEET 1, Cemetery Maintenance, Park Construction, etc. He explained the information provided includes a revenue status report for REET 2 and REET 1 to allow comparison with the expenditure status report. Councilmember Wilson requested a report regarding how the rate changes at Yost Pool impacted attendance and revenue. 9. COUNCIL REVIEW AND DECISION CONCERNING PRIMARY ELECTION BALLOT RESOLUTION FOR 8/17/10 LEVY. Council President Bernheim explained the deadline for Council action to place a levy on the August ballot was May 18. He suggested in order to provide adequate time to review the budget, the Council not take action to place a levy on the August ballot. Councilmember Wilson recalled the Finance Committee was to provide some options. Councilmember Orvis asked whether the TBD Board planned to meet to discuss placing a ballot measure on the September ballot. Council President Bernheim explained the TBD Board was provided a list of priority projects for various TBD amounts. The Board agreed to review the list and schedule another meeting in 4 -6 weeks to make a decision regarding a ballot measure. Councilmember Plunkett explained the Finance Committee met yesterday to consider whether to begin the process with the information developed in 2009 or begin a new process that included the formation of Edmonds City Council Approved Minutes May 4, 2010 Page 8 a commission. The Finance Committee recommended using the real numbers from 2009 that are being reported now and to form a small commission to consider a levy, not necessarily in the primary or general election but perhaps as late as February 2011. Councilmember Buckshnis commented one of the reasons for moving forward with actual numbers is expenses have changed dramatically from the 2008 numbers that were used to create the 2009 levy due to the removal of 54 Fire Department employees. Revenues have also changed due to the elimination of the Esperance and Woodway fire contracts as well as EMS fees. She recommended using the actuals and the executive forecasts to develop high and low projections for 2015 -2017. She also planned to consider financing a Senior Center, Yost Pool and other mixtures of General Fund and capital funding in a levy. Councilmember Wilson explained for the 2 -3 members of the Council who had not previously voted on a budget, the process begins essentially now as staff begins to gather information. A Budget Review Committee comprised of a couple Councilmembers and Department Directors meet in August and Mayor Haakenson presents his budget in October or earlier. The budget is typically adopted the first week in December. If a levy is not presented to the voters in August or November, the Council would be voting on a budget for 2011 -2012 that did not include any additional revenue from a levy. Councilmember Wilson noted Councilmembers agree that by mid -late 2012, the City's budget would be in the red. He assured the City's budget would not go into the red because the 2011 -2012 budget Mayor Haakenson presents will cut large swaths of City services, entire departments. The Council did not have all the time they might want to have or have as much certainty about the numbers as they might like because without a levy, it would be necessary to decide whether to cut Yost Pool, close parks or fire cops. He explained even if the entire Finance and Human Resources Departments were eliminated, it would not address the budget shortfall nor would it be possible to run the City without those departments. Councilmember Wilson summarized the Council could argue about how exact the numbers were, acknowledging his frustration with not having up -to -date numbers. He anticipated the reason was Mr. Hines wanted to ensure the numbers were exact. He did not think a successful levy would be possible if the Council purchased the Skipper's property. If the five Councilmembers who want to purchase the Skipper's property also want to be able to run the City, he urged them not to wait for perfection with regard to the numbers and to begin developing a levy option soon. Councilmember Fraley - Monillas recognized Councilmember Wilson's panic and urgency and the upcoming budget, commenting she would not be bullied into a levy. She wanted information as well as to understand what the public wants and to look at the issues before she made a decision regarding what levy amount was needed. Councilmember Wilson commented the Council did not always have the luxury of all the time Councilmember Fraley - Monillas would like. Although he has been a strong advocate for a levy, he would be hard pressed to support a levy in August or September because he did not believe it would be successful if the Council purchased the Skipper's property. He reiterated significant cuts would be required if a levy were not passed, pointing out if the Council did not take action, Mayor Haakenson would make the necessary cuts. Councilmember Fraley - Monillas responded Skipper's was not part of the budget and she did not appreciate Councilmember Wilson bringing it into the conversation. She stressed the importance of due diligence and looking at the budget as quickly as possible to make a decision about the levy. She reiterated she would not be bullied/pushed into a levy without having adequate information. She recognized Councilmember Wilson was more comfortable with the process because he had been part of the budget in the past, but all Councilmembers need to understand the budget so that it can be presented to Edmonds City Council Approved Minutes May 4, 2010 Page 9 the citizens. She was less concerned about the numbers Mr. Hines is providing than she was with the future and whether a levy was necessary, when it would be appropriate to place a levy on the ballot, whether the TBD planned to have an increase in the vehicle license fee on the ballot, how much the levy should be, and what items should be included in a levy. She was concerned a levy was being pushed on the Council without adequate information. Councilmember Wilson urged Councilmember Fraley - Monillas to be specific about what information she needed and to ask staff for it. The Finance Committee was asked to consider options and have provided their recommendation. He suggested Council President Bernheim develop a decision tree for the Council to identify a process for moving forward. He agreed the process needed to include consideration of whether a TBD fee would be placed on the ballot, whether the issue of a City Manager form of government would be on the ballot and what cuts would be made such as closing parks. Councilmember Fraley- Monillas reiterated she felt panic was being pushed on the citizens. She favored reviewing the issue in a methodical manner. She commented it was not Chicken. Little and the sky was not falling at this point and although it may, until the Council got adequate information, she could not support a levy. She referred to Councilmember Wilson's 2009 levy proposal, noting it was necessary to adjust that proposal to reflect current circumstances. She objected to the insinuation that the sky was falling, that the City was going to fire police, and shutter parks, yet buy property on the waterfront, finding those statements disingenuous. Councilmember Wilson objected to Councilmember Fraley - Monillas referring to him as disingenuous, clarifying he did think the sky was falling; she may have a different opinion. He was panicked because he did not want to take a vote to fire cops or close parks and envisioned that would be necessary. He preferred to explain to citizens why a levy was necessary rather than determine which City staff positions to eliminate. He commented the Skipper's property was absolutely relevant because if the Council is buying property, it lends to the perception that the City must have money. If that is the message citizens hear, regardless of whether it is funded via bonds, REST, parking revenue or whatever, the perception is the City has money which is counter productive to passing a levy. Councilmember Buckshnis commented the City was paying $1.6 million for odor improvements at the treatment plant. The Council needs to understand the actual budget numbers in order to move forward. The last two financial quarterlies will be very informative; the 4`h quarter 2009 will include revenue from the Cash for Clunkers program and the 1st Quarter 2010 will reflect the upturn in the economy. She wanted to obtain the numbers, noting she had identified a person willing to be on the commission that would help her analyze the executive summary to develop a low, moderate and high projection. With regard to the Skipper's property, she clarified that was a capital acquisition; the levy to date is to provide General Fund revenue for operating, two separate things. She also wanted to consider the possibility of park acquisitions in a levy. Councilmember Wilson agreed the Skipper's property was a capital purchase; however, the funds discussed for a portion of the purchase, approximately $600,000, could be used for operational purposes. Those funds were in the General Fund until a few months ago. He did not disagree with any of Councilmember Buckshnis' sentiment, and agreed more information was better and that having the numbers was important but the City was headed into the red. The longer the Council waited, the worse that situation gets and the more irrelevant the Council becomes because the Mayor will make those decisions. He anticipated the budget Mayor Haakenson presents in September /October will be horrible and would cause hundreds of people to urge the Council not to close Yost Pool, close parks, or cut cops and the Council would be in a very uncomfortable position. He urged the Council to think about how to fund basic government without a levy. Edmonds City Council Approved Minutes May 4, 2010 Page 10 Regardless of whether the Council purchased the Skipper's property, and regardless of when a levy was run unless it was run and approved in August, Mayor Haakenson explained the 2011 -2012 budget he presents will not be pretty. He did not anticipate there was enough time to develop a levy and educate the public in time for a levy on the August ballot. The 2011 -2012 budget he presents on October I will reflect severe budget cuts because projections show the budget in the red in 2012. During every budget cycle, a five year forecast is prepared. Each time a deficit has been apparent, staff has suggested actions the Council could take and the Council has been able over the years to approve budget cuts or increase revenues to delay the deficit. He assured there were no more rabbits to pull out of the hat, it was not panic nor the sky falling, it was a fact, the City would be in the red in 2012 if something was not done, either the voters asked to pay more taxes for the services they receive today or he will make the necessary budget cuts. Budget cuts mean cutting staff and reducing services. He summarized the 2011 -2012 budget he presents will not have the City in the red in 2012 but the budget cuts will be severe. Councilmember Plunkett commented the budget Mayor Haakenson presents could be augmented by funds from a levy in November or February if the citizens were willing to support a levy increase. He favored a methodical approach and educating the public. He anticipated the cuts reflected in the 2011 -2012 budget may generate support for a levy. He concluded there was little impact on the budget of placing a levy on the November or February ballot. Mayor Haakenson commented if Councilmembers were awaiting a Council- approved budget before making a decision on a levy, it would be well into December before the Council adopts the budget. Waiting until December would delay a levy until mid 2011. Councilmember Wilson pointed out although the Mayor would present a very ugly budget in October, if a levy were passed at the November election, the Council would have an opportunity to update the budget following the election. If a levy is delayed until February, the 2011 -2012 budget with significant budget cuts would need to be passed in December 2010. Councilmember Plunkett asked if the Council wanted to start the levy process with fresh numbers and establish a commission. Councilmember Buckshnis envisioned a commission of seven or fewer people that would operate like an examination, one -on -one figuring things out. Then all the numbers would be put together and the commission would provide the Council a recommendation. Councilmember Orvis agreed with forming a commission. Councilmember Wilson requested a written proposal before a commission was established. He pointed out none of this was new; Councilmembers were welcome to meet one -on -one or with others; however the 7- member commission that is charged with reviewing the budget and developing a levy is the City Council. He found the formation of a commission a poor idea. Councilmember Plunkett agreed to present to the Council a written levy commission proposal including how members would be selected, etc. 10. DISCUSSION REGARDING COUNCIL - MANAGER FORM OF GOVERNMENT. Councilmember Plunkett explained the packet contained the RCWs with regard to a Council- Manager form of government. With regard to the timing, Councilmember Plunkett commented it would be unfair to bring up this issue in the first or second year of a new or reelected Mayor's term. It would also be difficult to bring up in the fourth year of a Mayor's term due to the potential for a Council - Manager form Edmonds City Council Approved Minutes May 4, 2010 Page 11 of government as well as candidates for Mayor to be on the ballot. He viewed this year as the best as Mayor Haakenson has indicated he does not plan to run for reelection. This item was a request for the Council to schedule a public hearing followed by a decision whether to place it on the ballot. The cost of a ballot measure was approximately $10,000 that could be funded from the Council Contingency Fund. Councilmember Plunkett explained if the measure was supported by the voters, it became effective upon certification of the election. Upon certification, the current Mayor becomes the eighth City Councilmember for the remainder of his term. Upon certification a City Manager would begin managing the City. Councilmember Plunkett explained the council - manager system of local government started in 1908. Since its establishment, the Council- Manager form has become the most popular form of government in the United States. Currently, 3,625 cities operate under this form. The cities range in size and more than 75.5 million people are within this form of government. Some examples are Phoenix, San Diego, Dallas, Cincinnati, San Antonio, Kansas City, Missouri, and Mecklenburg County, North Carolina. Edmonds would still have a mayor who would be elected by the Council from among the Councilmembers. Councilmember Plunkett relayed his preference that Mayor Haakenson continue to serve as the mayor. The mayor would continue to preside at council meetings, serve as a spokesperson for the community, facilitate communication and understanding between elected and appointed officials, assist the council in setting goals, advocate policy and serve as a promoter and defender of the community. However, the day -to -day running of the City would be administered by a professional City Manager. The manager is hired to serve the Council and the community and to bring to local government the benefits of training and experience in administering local government projects and programs on behalf of the governing body. The manager prepares a budget for the Council's consideration; recruits, hires, and supervises the staff; serves as the Council's chief adviser; and carries out the Council's policies. Councilmembers and citizens count on the manager to provide complete and objective information, pros and cons of alternatives, and long -term consequences. Most of the business of a city is just that, business and managing employees. Councilmembers are elected to focus on policy issues. This leaves a city manager, appointed by Council, free to carry out and manage policy. The Council focuses on the community's goals, major projects, and such long -term considerations as community public safety, land use, capital improvement plans, financing, and strategic planning. The Council hires a professional manager to carry out the administrative responsibilities and then supervises that manager's performance. He explained the International City /County Management Association (ICMA), in existence since 1914, is the professional organization for appointed chief management executives in local government. ICMA members are committed to standards of honesty and integrity more vigorous than those required by the law. The ICMA's Code of Ethics is available by contacting the ICMA. If a decision was made to place the issue on the ballot, the Council would begin consideration of who would assume the City Manager's role upon certification of the election. It could be an existing staff member or the Council could take preliminary steps with regard to hiring a City Manager. Councilmember Buckshnis commented there are a number of city managers locally including Shoreline, Bothell, Des Moines and the reports they provide monthly are very impressive. She questioned the cost of having both a city manager and a mayor. Councilmember Plunkett assumed when the Mayor became a Edmonds City Council Approved Minutes May 4, 2010 Page 12 City Councilmember, his salary would be reduced to the City Council's salary, leaving the Mayor's existing salary structure for a City Manager. Councilmember Wilson commented the idea has merit and previous City Councils have considered it. In his day job, he works with city managers as well as strong mayors. He used to teach political science at the college level including state and local government and the pros and cons of Council- Manager form of government. He explained the type of jurisdictions determined whether a Council - Manager form of government was appropriate. Cities with unengaged citizens often have poor - performing Councilmembers who do not have a great deal of professional skills. With a weak citizenry and weak Council, it was appropriate to have a strong professional in the position of city manager. Cities with stronger citizenry /voter engagement typically have stronger Councils with a high degree of turnover, active elections, etc. and there is less need for a professional city manager and the mayor often has experience and is culled from the Council. He concluded because Edmonds has a very active citizenry, a city manager would not be appropriate. Councilmember Wilson commented a city's executive administration is always professional and always political. The question is where does the political head of the executive lie. In a strong mayor form of government, the mayor is the political voice of the executive and he /she is directly elected by the people. In the case of a city manager, he /she must still be political to manage the egos of the Councilmembers and the arrows thrown at staff. What often occurs with a political city manager is one of two things; first the Council decides to make a change because they do not want the city manager being political which may happen whenever the Council majority shifts. For example Mountlake Terrace and Shoreline have changed their city manager often due to a new majority on the City Council. That is terrible for staff retention as well as city visioning and development. The second thing that can happen with a strong, politically savvy manager is what happened in Tacoma; bad things can happen when there is that much power in an unelected staff person who essentially controls the strings. The way to guard against instability with a city manager or a hyper politically powerful unelected city manager is a strong mayor. The only reason a strong mayor can be successful is with an engaged citizenry. Because Edmonds has a very engaged citizenry, the strong mayor is the appropriate system of government. He was supportive of hearing from the public but would not support a Council- Manager form of government absent a fundamental change in the citizenry. Councilmember Fraley - Monillas was interested in hearing from the citizens regarding this issue. She agreed there was no better time to consider this at the conclusion of one Mayor's career. It was the consensus of the Council to schedule a public hearing. 1.1. LONG RANGE PLANS FOR FUTURE REAL ESTATE ACQUISITIONS Council President Bernheim explained he scheduled this in order to address the public's concern regarding real estate purchases, pointing out the civic playfields are a possible future acquisition. He anticipated when the lease with the City expired, the property owner would look to private purchasers for development opportunities. The alternative would be for the City to purchase the property. Councilmember Plunkett asked when the civic playfield lease expired. Parks & Recreation Director Brian McIntosh answered it expired in February 2021. Councilmember Plunkett asked whether the City had been in contact with the Edmonds School District regarding the future of the property. Mr. McIntosh responded the School District was not interested in discussing it at this time. 12A. COUNCIL REPORTS ON OUTSIDE COMMITTEE /BOARD MEETINGS. Councilmember Fraley - Monillas reported on the well attended Town Meeting Councilmember Buckshnis and she held on April 30. She thanked the Colonial Pantry for the great service they provided. Attendees Edmonds City Council Approved Minutes May 4, 2010 Page 13 at this meeting included a Planning Board Member and a Department Director who lives in Edmonds. She explained many people are uncomfortable with speaking at Council meetings but are comfortable with this venue. One of the issues discussed was the Firdale Village development and how it may affect their neighborhood. Councilmember Plunkett offered to report on the Citizens Technology Advisory Committee meeting at the next Council meeting. Councilmember Buckshnis reported the Port is moving forward with plans for redevelopment of Harbor Square. She relayed the Port Commissioners' invitation for the public to email their comments regarding redevelopment. At their recent meeting, the Port reviewed their first quarter report; the Port is doing well financially, Harbor Square is 67% rented. Councilmember Buckshnis reported on the Snohomish County Tomorrow meeting where they are discussing countywide planning policies. Councilmember Wilson reported the Lodging Tax Advisory Committee met to discuss allocation of funds to efforts that promote tourism and the arts. Councilmember Peterson and he, members of the Long Range Task Force, met with Mayor Haakenson regarding the challenges facing the City. He reported on two meetings regarding Lake Ballinger, the first with the homeowner's association and the second with the Lake Balling Forum. A new Interlocal Agreement with the entities involved in the Lake Ballinger Forum will be presented to the Council in the near future. He also met with the SNOCOM Executive Director, with the City's Lobbyist Mike Doubleday, with the Port Director on two occasions and had nine other meetings related to City Council business. Councilmember Plunkett reported Finance Director Lorenzo Hines will report to the Council regarding wireless in the Council Chambers and the fiber optics business plan in mid June. 12B. EXECUTIVE SESSION REGARDING POTENTIAL PURCHASE OF REAL ESTATE At 9:05 p.m., Mayor Haakenson announced the City Council would meet in executive session at 9:10 p.m. regarding negotiations for the purchase of real estate. He stated the executive session was scheduled to last approximately 30 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 Haakenson, and Councilmembers Bernheim, Plunkett, Fraley- Monillas, Buckshnis, Orvis, and Wilson. Others present were Community Services /Economic Development Director Stephen Clifton, Parks and Recreation Director Brian McIntosh, City Clerk Sandy Chase, and Bill Bickel, Champion Real Estate Services. At 9:44 p.m., Mayor Haakenson announced the Council's request to extend the executive session for 5 minutes. The executive session concluded at 9:50 p.m. The regular City Council meeting was reconvened at 9:51 p.m. 12C. POTENTIAL ACTION REGARDING POTENTIAL PURCHASE OF REAL ESTATE Council President Bernheim explained the City had made a written offer on the Skipper's property. That offer has expired without being accepted by the bank and the bank has not offered a written counter offer. He expressed his willingness to keep the City's offer on the table. Councilmember Wilson expressed his respect to his Council colleagues for being level headed. The offer the City made and the bank's counter offer were for $1.1 million. The details were with regard to environmental due diligence and study to ensure the City was not assuming a liability. He summarized that not countering with another offer was demonstrative of the Council's level- headed, clear thinking. Edmonds City Council Approved Minutes May 4, 2010 Page 14 13. MAYOR'S COMMENTS Mayor Haakenson had no report. 14. COUNCIL COMMENTS Council President Bernheim encouraged Councilmembers to use their time wisely at Council meetings, recognizing that tonight's meeting was concluding by 10:00 p.m. Councilmember Fraley- Monillas commented this has been a very interesting exercise in the due diligence and responsibility of elected officials. No matter what has been stated in the community, it has been a good experience and everyone in the City has been well represented. She congratulated the Council for having differences but still moving forward. WM 17N IIII IN, With no further business, the Council meeting was adjourned at 9:55 p.m. Edmonds City Council Approved Minutes May 4, 2010 Page 15