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04/21/2009 City CouncilApril 21, 2009 At 6:15 p.m., Mayor Haakenson announced that the City Council would be meeting in executive session on legal advice regarding pending litigation. He stated that the executive session was scheduled to last approximately 45 minutes and would be held in the Jury Meeting Room, located in the Public Safety Complex. No action was anticipated to occur as a result of meeting in executive session. Elected officials present at the executive session were: Mayor Haakenson, Councilmembers Orvis, Peterson, Olson, Wambolt and Bernheim. Others present were City Attorney Scott Snyder and City Clerk Sandy Chase. The executive session concluded at 6:55 p.m. The regular Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Haakenson in the Council Chambers, 250 5"' Avenue North, Edmonds. The meeting was opened with the flag salute. ELECTED OFFICIALS PRESENT Gary Haakenson, Mayor D. J. Wilson, Council President Michael Plunkett, Councilmember Peggy Pritchard Olson, Councilmember Steve Bemheim, Councilmember Dave Orvis, Councilmember Ron Wambolt, Councilmember Strom Peterson, Councilmember 1. APPROVAL OF AGENDA STAFF PRESENT Tom Tomberg, Fire Chief Al Compaan, Police Chief Stephen Clifton, Community Services/Economic Development Director Brian McIntosh, Parks & Recreation Director Noel Miller, Public Works Director Kathleen Junglov, Finance Director Debi Humana, Human. Resources Director Mark Correira, Assistant Fire Chief Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder Mayor Haakenson requested the addition of "Receipt of Fire District 1 Service Proposal and Authorization for Mayor and Staff to Negotiate with District" to the Consent Calendar as Item L. He relayed Council President Wilson's request to add a report from one of the labor unions as Item 4A. COUNCILMEMBER WAMBOLT MOVED, SECONDED BY COUNCIL PRESIDENT WILSON, TO APPROVE THE AGENDA IN CONTENT AND ORDER AS AMENDED. MOTION CARRIED UNANIMOUSLY. 2. CONSENT AGENDA ITEMS Councilmember Wambolt requested Item F be removed from the Consent Agenda and Councilmember Bernheim requested Item E be removed. COUNCILMEMBER WAMBOLT MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, TO APPROVE THE REMAINDER OF THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: Edmonds City Council Approved Minutes April 21, 2009 Page 1 A. ROLL CALL B. APPROVAL OF CITY COUNCIL MEETING MINUTES OF APRIL 7, 2009. C. APPROVAL OF CLAIM CHECKS #110980 THROUGH #111107 FOR $172,451.23 DATED 04/09/2009, AND #111108 THROUGH #111214 FOR $361,887.04 DATED 04/16/2009. D. ACKNOWLEDGE RECEIPT OF CLAIMS FOR DAMAGES FROM BRIAN GOODNIGHT ($909.82), AND PETER & KATHY NWOKOBIA ($2,434.90). G. AUTHORIZATION TO CONTRACT WITH JAMES G. MURPHY TO SELL SURPLUS CITY VEHICLES AND CONSTRUCTION EQUIPMENT. H. RENEW INTERLOCAL AGREEMENT WITH SNOHOMISH COUNTY REGIONAL DRUG TASK FORCE. I. INTERFUND LOAN ACTIVITY. J. ORDINANCE NO. 3733 AMENDING THE PROVISIONS OF ORDINANCE NO. 3685 TO ESTABLISH A NEW EFFECTIVE DATE FOR AN INCREASE IN THE SALARY OF THE MAYOR (DELAY THE EFFECTIVE DATE OF SALARY INCREASE). K. REVISION TO EDMONDS MUNICIPAL CODE TITLE 5 - ORDINANCE NO. 3734 CONCERNING ADOPTION OF CERTAIN CRIMINAL OFFENSES CONSISTENT WITH THE STATE CRIMINAL STATUTES. L. RECEIPT OF FIRE DISTRICT 1 SERVICE PROPOSAL AND AUTHORIZATION FOR MAYOR AND STAFF TO NEGOTIATE WITH DISTRICT ITEM E: AUTHORIZATION FOR THE MAYOR TO SIGN A RIGHT OF ENTRY AND INDEMNITY AGREEMENT WITH HORIZON BANK FOR THE PURPOSE OF REMOVING AND REPLACING FRONTAGE TREES ALONG DAYTON STREET. Councilmember Ber iheim recalled his previous concern that the last 10 -20 trees planted downtown did not meet the minimum requirement of the Street Tree Plan and questioned whether the Horizon Bank replacement trees also would not meet those requirements. Public Works Director Noel Miller explained the Parks Department, who plants the trees, indicated the guidelines in the Street Tree Plan with regard to trees were being followed although there had been exceptions. Councilmember Bernheim pointed neither the trees in front of the Bank of Washington, the trees on both . side of the street at Old Mill Town, the trees in front of the Gregory nor the replacement trees west of the Bank of Washington on Dayton Street complied with the Street Tree Plan. Mr. Miller assured staff was doing its best to get as big a tree as possible planted in the City right -of -way. Councilmember Bernheim requested a presentation from the Parks Department regarding compliance with the Street Tree Plan. Council President Wilson shared Councilmember Bernheim's concerns that the trees planted recently did not comply with the Street Tree Plan adopted in 2002. Mr. Miller clarified the Street Tree Plan was updated in 2006. Council President Wilson expressed his preference to delay removal of any trees until larger trees could be planted or the Street Tree Plan revised to allow the smaller trees. COUNCILMEMBER BERNHEIM MOVED, SECONDED BY COUNCIL PRESIDENT WILSON, TO HOLD OFF CUTTING THE TREES UNTIL A PRESENTATION WAS MADE BY THE PARKS DEPARTMENT ESTABLISHING COMPLIANCE WITH THE STREET TREE PLAN OR A MODIFICATION WAS MADE TO THE STREET TREE PLAN. Edmonds City Council Approved Minutes April 21, 2009 Page 2 Councilmember Wambolt explained the trees were being removed because roots uplifted the sidewalk creating a safety hazard and placing the City at risk for people tripping and falling. He did not object to planting smaller trees, pointing out they grew very quickly. He noted the City did not provide the trees, they were provided by the contractor. Council President Wilson recognized the City incurred liability as a result of the trees and needed to cut them down or identify the money to fix the sidewalk. Mayor Haakenson pointed out the trees were being removed, not cut down. He noted it was not a matter of fixing the sidewalk; the tree must be removed to prevent the roots from continuing to damage the sidewalks. Mayor Haakenson asked Parks & Recreation Director Brian McIntosh to address the caliper of trees that had been planted recently. Mr. McIntosh acknowledged the trees had been less than 3 -inch minimum stated in the Street Tree Plan. He explained the trees were being planted in a highly congested utility area and a larger caliper tree had a larger root ball and a larger hole required moving more utilities. Mayor Haakenson noted Mr. McIntosh's explanation was the presentation Councilmember Bernheim had requested. Councilmember Bernheim pointed out the public never had an opportunity to debate that issue and the Street Tree Plan was a very important aspect of marketing downtown as a pedestrian friendly, cool shaded area. He noted the Street Tree Plan did not allow planting of smaller trees in utility corridors and in fact required a 3 -inch caliper. He summarized when trees were removed and replaced, the public expected the replacement trees to comply with the Street Tree Plan and not an explanation of why they did not. Mr. McIntosh assumed the Street Tree Plan included the ability for staff to make judgment calls in this situation. Councilmember Bernheim suggested the Street Tree Plan be amended to allow smaller trees in some areas of downtown. Councilmember Wambolt agreed the Plan should match the practice. He clarified the intent was not to remove large trees and replace them with large trees because the existing trees were too big and caused damage to the sidewalks. He referred to the trees on Dayton east of 5t'' that were planted in the past four years and were growing rapidly. Mayor Haakenson advised the roots of the trees that have been planted downtown for many years grown horizontally and cause damage to the sidewalks. The roots of the trees being planted now grow down to avoid damaging the sidewalks. He acknowledged it may took bad when a large tree was removed and replaced with a smaller tree, recognizing that sacrifice was sometimes necessary. COUNCILMEMBER WAMBOLT MOVED TO AMEND THE MOTION TO AMEND THE CODE TO ALLOW 2 -INCH CALIPER TREES. MOTION DIED FOR LACK OF A SECOND. Council President Wilson suggested Councilmember Bernheim withdraw his motion and delay this item to schedule Council review of the Street Tree Plan. COUNCILMEMBER BERNHEIM WITHDREW HIS MOTION WITH THE AGREEMENT OF THE SECOND. Council President Wilson scheduled review of the Street Tree Plan on the May 26 agenda. ITEM F: AUTHORIZATION FOR MAYOR TO SIGN THE ESPERANCE AGREEMENT FOR THE PROVISION OF FIRE PROTECTION AND EMERGENCY MEDICAL SERVICES. Councilmember Wambolt explained he pulled this item to highlight it for citizens, recalling there had been some concern that the fee in the fire service agreement with Esperance was too low. He recognized staff for the excellent job they did completing a new agreement that increased the existing fee by Edmonds City Council Approved Minutes April 21, 2009 Page 3 $435,000. He noted this was not a windfall to the budget as Fire Chief Tomberg had anticipated this change although it was approximately $100,000 more than budgeted. COUNCILMEMBER WAMBOLT MOVED, SECONDED BY COUNCILMEMBER PETERSON, FOR APPROVAL OF CONSENT AGENDA ITEM 2F. MOTION CARRIED UNANIMOUSLY. 3. PRESENTATION ON LEVY Mayor Haakenson explained as reported two weeks ago, the 2009 budget situation was resolved for the near term with budget cuts previously announced, furloughs agreed to by City employees and other adjustments he outlined in his last report. This was predicated on no further declines in 2009 revenue streams. He emphasized the City would not have reached this point without the agreement by all City employees on furloughs or other give - backs. The City's employees agreed to these pay losses in order to protect less senior employees from layoffs; they care about the City and its residents. He cautioned simply because a way was found to survive the immediate crisis for 2009, next year and the following years would bring a far worse financial situation. He recognized the Council was aware of this and thanked them for their plan to go to the voters in November with a levy request. He explained the Council chose this course of action during the budget process last November rather than make serious budget cuts at that time. Unfortunately, many of the cuts that were averted at that time have been made this year anyway in order to make up for lost revenue due to the economy. The Council affirmed their intension to move forward with a levy several times this year and the recent four -week exercise with the Citizen Levy Review Committee (CLRC) was the first step in that process. He thanked Council President Wilson for the effort and hours he put into that exercise. While City staff cannot lobby on behalf of the levy, they play an integral part in the process and did an amazing amount of work in preparation as well as added four more night meetings to their already full schedules. He also thanked the 60+ citizens who gave up four nights to attend the meetings to grasp the situation in a short timeframe and for taking an interest in the City and how it operates. When asked by Council President Wilson to identify a dollar amount needed for the levy, staff took many things into consideration. They saw their task as outlining what was needed to operate the City for the next five years. They did not seek any new employees or new programs, only maintaining the existing provision of services. Staff viewed this as an operation levy; not exciting but basic. The first effort was to increase the ending cash balance to a level acceptable by normal accounting standards; approximately one month's worth of cash to pay bills, an amount the City has not had in decades. Next, consideration was given to items and personnel cuts from the budget over the past nine years that were still necessary for the provision of City services in the future. Staff also considered what was new that would benefit in the provision of City services; all the new items were in the area of Information Technology (IT). As past budgets have been cut, a long list of IT needs have also not been included in the budget. The amount staff identified was $4.5 million which was the amount the CLRC used as a starting point. This amount would see the City through approximately 2016. He acknowledged the Levy Work Groups identified different scenarios, taking the City through different years. Mayor Haakenson explained once the levy work groups made their reports and the Council selected a levy amount, staff would work with that number to itemize what will be included in the levy. Staff will also develop a list of cuts if the levy were to fail. Mayor Haakenson commented there appeared to be some confusion by the levy work groups regarding what budget cuts would be made if a smaller levy amount were selected. He explained a smaller levy amount did not include budget cuts; it simply brought the recurring problem back at an earlier year, Edmonds City Council Approved Minutes April 21, 2009 Page 4 perhaps 2013 or 2014 rather than 2016. He summarized staff viewed this as an operational levy to allow the continued provision of essential City services through 2016. 4. PRESENTATION FROM CITIZEN LEVY REVIEW COMMITTEE Council President Wilson expressed his thanks to the Edmonds Beacon for allowing the teams from the Citizen Levy Review Committee (CLRC) space to present their views. He thanked Councilmember Wambolt for his active participation, as well as Councilmembers Peterson, Olson, Plunkett and Bernheim for their participation. Green Team Bruce Witenberg introduced the team members: Dianne Hanna, Kristiana Johnson, Ray Martin, Darlene McLellan, David Thorpe, Robert Van Tassal and Jim. Young. He expressed their thanks to the Mayor, staff, Council President Wilson and Councilmember Wambolt for the enormous amount of work, time and effort providing information and documentation to the CLRC. Their team believes life as they know it in the City of Edmonds hangs in the balance. The City can no longer rely on doing business as usual if Edmonds kinds of days are to continue and maintain the quality of life to which citizens are accustomed. They believe the time has come for the City Council to work together with the Mayor to solve the serious financial problems that threaten the City. The City Council needs to put aside politics, special interests and personal agendas and immediately begin a collaborative effort for the benefit of the community. That effort must begin without delay and begin work on an economic development plan for every geographic area of the City that will generate new sources of revenue. The City Council must seriously consider compromises on design guidelines, building heights, zoning and planning which will implement economic and revenue - generating growth. The Green Team believes the City needs to have a less parochial view and instead the City Council must create a more comprehensive citywide agenda. In order to thrive, Edmonds must have a change in its culture of thought. Seven members of the Green Team support a six -year levy proposal running through 2016 not to exceed $4.3 million per year. Member Ray Martin supports a maximum $3.35 million levy for 2 years. The Green Team does not propose additional budget cuts at this time but support the levy to maintain current levels of public safety, public assets, sense of community and quality of life. The entire team implores the City Council to work with the Mayor to immediately begin to develop and implement a plan to consider and capture all prudent revenue sources in order to avoid reductions in public safety services and parks, recreation and cultural services; pay of necessary capital improvements; create more effective City planning and streamline City processes; and enhance economic development. Team Member Kristiana Johnson raised a concern about the City's transportation budget, indicating the proposed Transportation Element of the Comprehensive Plan identified capital needs that should not be ignored. The Green Team supports increasing the financial information available to the public and continuing to make it transparent which will enhance citizen support for the levy. He cautioned their support of the levy was not unconditional; they expect the City Council to unanimously support the levy. The Council's unanimous support will send a message to the CLRC that their work was not in vain, to the community that the Council desires to be part of the solution and not perpetuate the economic problems, to citizens that financial sacrifice they are being asked to make by supporting the levy were recognized and that the financial sacrifice union and non -union employees made to preserve the City's quality of life were recognized. They implored the Council to strive for unanimity in developing and implementing an economic development plan to increase revenue and preserve quality of life of this community. They recognized a levy was a short lifetime to accomplish this process. The time to change the culture of thought in the community begins tonight and they hoped the Council was up to the challenge. Edmonds City Council Approved Minutes April 21, 2009 Page 5 David Thorpe explained the Green Team came away with a stark understanding of the City's financial situation. Without question, they believe revenue generation through economic development must be done by looking at creative ways to provide for ongoing City services, maintaining the infrastructure and funding capital projects. They urged the City to explore potential consolidations of some services through interlocal agreements with surrounding cities where feasible and effective. Public /private partnerships as well as non - profits should also be considered where prudent. The City must continue to expand applications for grants for infrastructure and capital improvements and reconsider a staff position that includes applying for grants. The City and staff have made positive steps and must continue the process of making economic development in the City more user friendly without advocating the necessary oversight such as tighter, cleaner, more clear codes, continued development of design guidelines and consideration of building heights, zoning and planning with fresh eyes. The City must enhance its major assets such as the waterfront and parks, recreation and cultural services without ignoring development in areas such as Five Corners, Firdale, Westgate, Highway 99 corridor, Perrinville and the hospital district. Through four meetings and a total of ten hours, all teams endorsed some type of levy. The Green Team saw the need for a new course. The culture of thought must change with regard to the budget, revenue generation, and expenditures. Citizens enjoy a unique quality of life in Edmonds but realize it does not come cheap. The Council must act in unity and immediately begin development of an economic plan for the City. The Council must be better at explaining cause and effect and communicate to citizens what services and jobs will be lost if the levy fails. The City is at a financial crossroads and needs vision and leadership. Rhie Team Steve Burkett introduced the team members: Rick Bader, Wendy Harrison, Scott Hopper, Dave Page, Evan Pierce, Dave Vincent and Anne Sorley. He summarized the Blue Team recognized the City did not have an expenditure problem. The City was becoming too dependent on property taxes as a source of revenue, and they recommended diversifying revenue sources particularly from retail sales tax. Based on their review of financial and other information regarding the City's current and projected financial status, they concluded the City did not have an excess expenditure problem; per capita expenditures were lower than the average of comparable cities in the region. Total City staffing is also below the average of other cities, lower than needed to provide the services the community desires. The Blue Team concluded there was a need for increased revenues to fund highest priority services and maintain prudent financial reserves but did not believe the proposed levy lid lift of $4.3 million was the appropriate response to the financial crisis. That amount represents approximately a 33% increase in the property taxes paid to the City and other agencies may also propose increases such as a proposed increase in the State sales tax. In the current financial environment, the Blue Team recommends a minimum amount of increased taxes to allow time to develop a more long lasting solution to the structural budget problem; a shorter timeframe to accomplish things the Green Team described. The Blue Team recommends a levy lid lift of $2 million be placed on the November ballot. They believed the smaller amount had a better chance of approval by voters and would allow the City to fund highest priority services through the next three years. The additional funding would also allow the City to maintain adequate reserves in these challenging financial times. Recognizing their proposal as a short term financial bandaid, they believed it was important to take this small step and use the breathing room to substantially change the way the City does business and manages it finances. The Blue Team recommended the Mayor, Council, staff and community accomplish the following specific goals during the next 18 -24 months: 1. Adopt and implement a strategic plan for City government that outlines vision, priorities, and goals. Edmonds City Council Approved Minutes April 21, 2009 Page 6 2. Develop and maintain a long- range, six -year financial plan that supports the strategic plan that outlines projected revenues and expenditures and required cash balances and reserves. 3. Develop and implement a specific economic development plan to increase property tax and sales tax revenue generated in areas such as downtown and Highway 99. 4. Adopt financial policies that should include the six year financial plan, reserves and contingencies, CIP policies, and debt policies including practical limits. 5. Rebuild and maintain adequate General Fund reserves. 6. Pursue the Regional Fire Authority. 7. Periodically conduct a survey of residents' satisfaction with City services and priorities. 8. Implement a performance management system that includes specific departmental outcomes and performance measures linked to the strategic plan. He summarized Edmonds citizens chose to live in Edmonds because they were attracted by its unique location and quality of life and understand the importance of quality City facilities and services to that quality of life. Citizens expect to pay City taxes comparable to other similarly attractive communities. He relayed their concern with the increasing dependence on residential property taxes to support City services. Currently property taxes comprise 41% of the City's General Fund revenue; the 1% cap on property tax increases makes it imperative to diversify the City's revenue sources and develop alternatives such as sales tax. He pointed out Edmonds currently collected approximately $6 million in sales tax or $155 /capita, substantially below the average city in the State. If Edmonds collected the average of other cities, approximately $1.8 million more revenue could be generated. He pointed out Edmonds property tax rate was 60% higher than Kirkland and Kirkland generates twice the sales tax, $6 million more than Edmonds. Greg Bill Keppler introduced the team members: John McGibbon, Michelle Ruis, Beverly Theunis, Steve Tholl and Dan White. They thanked the Council and staff who worked so assiduously to present documentation to the CLRC. In addition to attending the four meetings, team members spent in excess of 80 hours on research, looking at different demographic projections and conducting a great deal of statistical analysis. The Grey Team unanimously recommends a levy that would raise a certain amount per year for three years to help support the City's operational mandates and ending balance requirements. The levy should result in a concomitant and manageable shortfall to be financed through other City revenue capabilities such as increased service user fees, service reductions, increased volunteerism and especially a new economic development plan. The tension between levy and shortfall amounts encourage citizens, City employees and Councilmembers to collaboratively and squarely face the basic problem of residential -based funding and deal with it creatively. By their analysis of the present City forecasts, the levy amount should be $3 million with stipulations for a sunset clause and no new programs. They recognized City budget shortages were not without context, such as the current national economy, tax revenue competition among levels of government and local voting history. Close citizen involvement should be ongoing via committee participation with the Mayor and City Council on budgetary plans and decisions. Efforts are needed to provide citizens with a better in- depth, local demographic comparisons and statistical analysis to base informative public dialogue on tax affordability and voting decisions. They agreed there was a substantial revenue shortfall and not a spending problem in the City. He provided a quote from Mark Twain, "we are stretching a gnat's abdomen over a rain barrel." Orange Team Eric Radcliffe introduced the team members: Natalie Shippen, Dick Van Hollebeke, Mark Porter, Don Hall, Janice Freeman and John Dewhirst. He relayed the majority opinion of the Orange Team, 6 of 7 votes, to recommend a $3.5 million levy be forwarded to the citizens of Edmonds in November 2009. The Orange Team recommendation is based on the premise that the City Council and the Mayor seriously commit the City's resources to broaden the tax base of Edmonds. This effort must commence on or Edmonds City Council Approved Minutes April 21, 2009 Page 7 before July 2009 prior to putting the levy to a vote. Economic development needs to be improved in all geographic areas of Edmonds including Firdale, Highway 99, Five Corners, downtown core, Perrinville, Westgate, other new potential areas as well as redevelopment of the waterfront. Economic development shall focus on retail, office, arts, hospital/healthcare, and related facilities along with potential for light industry at the Port. If enacted, a minimum of $500,000 of the levy funds shall be used for proactive economic development activities to broaden the tax base in Edmonds. The one minority opinion on the Team recommended the Mayor and City Council keep the City's annual budget at acceptable levels of revenues and expenditures. Bailing out the Mayor and Council encourages bad habits. The proposed expenditures do not include any items that look to the future, merely tread water for seven years. It takes a lot of brass for elected officials to ask residents for a property tax increase while not availing themselves of the full array of taxing tools. Pink Team Tim Jones introduced the team members: John. Bennett, Dale Hoggins, Don. Eager, Jill Gradwohl, and Marilyn Brown. They thanked the Council for the unique opportunity to understand the issues the City faces and staff for their effort in support of this process. The Pink Team agreed the biggest issue facing the City was revenue and property taxes would not solve that problem. Reducing non - mandatory services does not help and jeopardizes many of the reasons citizens moved here and stay here and can also affect the desire of others to locate here. In the short term the City needs to survive to another Edmonds kind of day. They unanimously recommended the Council put to the citizens a levy of $4 million for a period of six years. The Council and Mayor must explore additional sources of revenue focusing on economic development and appropriate fee increases. The levy should restore expected 2009 budget cuts including but not limited to the Senior Center and Yost Pool. The Pink Team did not support the introduction of gaming establishments as a means of revenue gain. The planned shortfall in the sixth year was left as a stick for the Mayor and Council to find funding alternatives. Improvements in the economy and increased City revenues did not relieve the City or Mayor from the burden of replacing the levy with other sources of revenue. Yellow Team Bea O'Rourke introduced the team members: Michael Bowman, Diane Buckshnis, Priya Cloutier, Daniel McMillin, Susan Phillips, Elizabeth Scott and Richard Senderoff. She relayed their thanks to staff for their hard work and time spent with the CLRC. The majority of the Yellow Team recommends a $3.7 million levy to fund the City through 2014 with the caveat that a Budget Planning Committee be formed within 60 days and their first meeting to occur within 90 days. The Committee should be comprised of 5- 7 citizens and at least 1 Councilmember and staff member as liaisons. They supported a levy but believe the Council must plan and develop and did not believe that would occur if the full levy were granted. The Budget Planning Committee would: 1. Evaluate non- revenue generating programs to determine whether they could become revenue generating or establish plans for making programs revenue generating. 2. Evaluate potential revenue generating programs. 3. Develop a comprehensive plan that supports existing businesses and brings new businesses to Edmonds to develop and increase the tax base. 4. Report to the Council on a quarterly basis to ensure transparency of the budget process. Daniel McMillin relayed the Yellow Team's minority opinion by Elizabeth Scott who supported forming a Budget Planning Committee, stated raising taxes in whatever form takes a person's hard - earned money which results in lower revenue because that person now had less to spend on items and services. A reduction in taxes results in economic growth as was seen in the 1920's and 1980's and in other countries such as New Zealand where a 50% reduction in property taxes in 1984 resulted in an immediate Edmonds City Council Approved Minutes April 21, 2009 Page 8 increase in tax revenue due to economic growth. Therefore cutting taxes, including property taxes, would be better for the City financially. Red Team Jim Crim introduced the team members: Kerry St. Clair- Ayers, Roger Hertrich, Dennis Lowenthal, Susan Paine, Walter Peale, and Tina Vincent. He emphasized the City did not have a spending crisis but was experiencing a revenue crisis. The City needed to increase revenues and give economic development more than lip service and do so quickly. Every program must be closely examined for the potential of increased revenue and every new revenue source must be aggressively pursued. During that period the City shall endeavor to create and implement new long and short term revenue production and all city programs evaluated for additional revenue sources to implement a sustainable future. Roger Hertrich presented the Red Team's minority opinion. He expressed support for a levy of $1.1 million for each of 3 years for a total of $3.3 million to cover the revenue shortfall of $1.1 million on a temporary, limited basis and to make the levy saleable to the public. He pointed out because other agencies may be requesting increases and the current economy made residents hesitant to spend, a smaller amount and a shorter time period increased the possibility of approval. He recommended continued efforts to economize the City including the following service cuts: eliminate K9 police services, reduce the Park Director by half, transfer Stephen Clifton to Community Service Director, turn Yost Pool over to a non -profit organization, and eliminate the fiber optic consultant. Mr. Crim relayed the Red Team's majority position as reported in the Edmonds Beacon, a levy for city operations in the amount of $4.5 million for a term of not less than 5 years. Purple Team Phil Lovell introduced the team members: Kathleen Dewhirst, Robert Freeman, Linda Lyshall, Denise Schaefer, Monda Van Hollebeke, and Judy Stead. The majority of the Purple Team supports the levy as outlined during the April 6 and 13th meetings and recommends next steps be taken toward an appropriate ballot measure in November 2009. They understand the proposal as described in its currently projected full amount of $4.3 million will help assure maintaining current levels of City facilities, departments, and services until 2016. The measure is also intended to restore a budgeting parameter recommended to the City toward maintaining an adequate cash balance at the end of each fiscal year. In addition, they requested the City Council develop a longer term vision for Edmonds with goals to achieve this vision that are fiscally sustainable and environmentally responsible; more specifically, that the budget makeup and particulars should be tied to the achievement of these goals toward fulfilling this vision. Such goals should include establishing a larger and more diverse tax base as well as other verifiable revenue generation programs. Although they understood that past property tax legislation in Washington and recessive economic conditions contributed to the current crisis mode, they believed the City was lacking proactive maintenance of consistent and unified fiscal planning and action. They recommended the Council focus more on the achievement and maintenance of a fiscally sustainable Edmonds to the benefit of all citizens and taxpayers. They recognized the largest and most sustainable tax base in the City was real estate and recommended developing and maintaining a more diversified tax base plus revenue generation vehicles to supplement this large residential base and thereby bring greater sustainability and predictability to the revenue side of the City's budgeting cycles. As part of preparing for the upcoming levy vote, the Mayor and/or Council shall spell out in clear language the scope, cost basis and duration of what Edmonds will be losing should the levy vote fail. This information shall be promulgated to every voting citizen within the city and followed up with public informational meetings so that voters are well - informed prior to the November ballot. Edmonds City Council Approved Minutes April 21, 2009 Page 9 In the event the proposed levy includes budget cuts made since the start of fiscal year 2009, the scope and duration and those cuts shall be made clear to the voters ahead of the November ballot. He referred to an attachment that contained suggested immediate, short term and long term revenue generation potentials developed by the Purple Team for study and follow -up by the City. Council President Wilson commented the teams' recommendations included two fundamental messages, 1) the need to pass a levy between $2 — $4.3 million, and 2) the Council should not dawdle in figuring out the City's financial difficulties. He expressed his appreciation to the participants in the CLRC for their level of sincere engagement. He pointed out everyone who applied to participate on the CLRC was accepted and anyone who joined during the process was invited to participate. He summarized the recommendations did not reflect a hand picked opinion but represented the community's viewpoint. Councilmember Wambolt echoed Council President Wilson's comments. To those who believed the levy lid lift increase was only being sought because of the current economy, he clarified the problem should have been addressed at least two years ago. The actions Mayor Haakenson took on March 13 were to address the current economic situation. He referred to the recommendation by several groups that the City should pursue more revenue from sales tax, pointing out communities that typically collected more sales tax than Edmonds such as Lynnwood were also suffering in this economy. He agreed the City needed to expand the opportunity for sales tax but pointed out the City needed to take other actions as well. He referred to the sales tax, property tax, REET, etc. the City collected from Pt. Edwards, which illustrate the benefits of additional real estate development. He summarized the Council would work on identifying additional revenue but there was no easy solution. Councilmember Peterson thanked the 60+ people and staff for their time and effort. He agreed with Council President Wilson that the two themes were a levy of some size was needed and the Council and City government needed to identify long term solutions and diversification. He pointed out the City could not rely on short term gains or one time funds such as those provided by development of Pt. Edwards. A third common theme was transparency and ensuring what the Council did was out in the open and that there was a great deal of public participation; the CLRC was the first step in that effort. 4A. REPORT BY LABOR UNION Council President Wilson recalled he extended the offer to all bargaining units and non - represented employees to speak to the Council. Steve Harbinson, President, Edmonds Police Officers Association, expressed his thanks to the CLRC, noting Police Officers Association Vice President Linda Mack attended a majority of the meetings and he attended the final meeting. He agreed with the comments and recommendations of the CLRC teams, that action needed to be taken immediately. He relayed an often used phrase by Police Chief Compaan, "perception is reality," commenting the following was the reality of the Edmonds Police Officers Association. Not only did Edmonds Officers agree to give some of their pay back to the City; several live in the City and will be impacted again by the levy. Officer safety was one of their biggest concerns; Edmonds has approximately 1.32 officers per 1,000. The standard from the National Police Chiefs Association is 2.0 officers per 1,000 and another standards used in Washington is 1.8 officers per 1,000. He pointed out response times would increase if police officers were cut, particularly if the levy did not pass. As an example, yesterday the Police Department was at basic minimum staffing due to training and was required to elicit help from Lynnwood because of a bank robbery and domestic violence situation that occurred simultaneously. Although Edmonds has a small town image, he noted the city has its share of criminal activity including two officers who were shot at last year. Edmonds City Council Approved Minutes April 21, 2009 Page 10 Officer Harbinson commented he had been employed by the City for 14 years but many officers have been with the City for 25 -30+ years. He referred to missed opportunities in the past such as annexing the Aurora Village area that would have generated millions in taxes. He recommended streamlining building permits, commenting they often hear from businesses that want to locate in Edmonds but are frustrated with the amount of time and the cost to obtain permits. He recommended the City consider the potential purchase of the Fire Department by Fire District 1. If that action were taken, he recommended the furlough days be discontinued. Officer Harbinson recognized a levy was necessary to keep the City afloat, pointing out in the past 14 years the City had done nothing to promote new businesses. He recommended consideration be given to casinos, particularly if legislation is approved allowing cities to site casinos in certain zones. There is a casino approximately 85 feet from the city limits in Mountlake Terrace and the Police Department's involvement with its patrons has been very limited. He acknowledged the popularity of casinos was diminishing and in the current economy, people were not spending money at casinos at past rates. He recommended the City "quit spending money like a drunken sailor," pointing out the City's purchase of land in front of Quizno's for approximately $250,000, the same amount Police Department employees were giving back, and the installation of an electrical car plug in the parking lot at a cost of $20,000 to $50,000. He urged the City and the Council to put aside their differences and do what was needed. He acknowledged being a Councilmember was a thankless job much like being a Police Officer; most people did not want to see a police officer until they called 911. He referred to building heights and developers' inability to develop at the waterfront and downtown and to expand car dealerships on Hwy. 99. If the Council had the ability to do so now, he urged them to raise building heights by 3 — 5 feet. Regardless of whether Councilmembers were running for reelection or seeking the Mayor's position, he implored them to work together, to put their differences aside for the betterment of the City and the tax paying citizens who must bail out the City. Council President Wilson thanked Officer Harbinson for his frankness and for taking the time to talk to the Council. At the CLRC he learned the following regarding Police Department staffing: Lynnwood, with a population of 36,000 has 79 uniformed officers or 2.2/1,000 compared to Edmonds, with a population of 41,000, has 55 uniformed officers or 1.35/1,000. Of the ten cities Edmonds is compared to, Edmonds ranks at the bottom in terms of police per capita. 5. DRAFT RESOLUTION REGARDING THE 2009 PROPERTY TAX LEVY. Council President Wilson reiterated the CLRC teams agreed a levy was needed and the City needed to work on economic development. Councilmember Peterson and he drafted the proposed resolution as the next step in the levy process. He advised the public would have two opportunities to comment on the resolution prior to the Council taking a vote on May 19. He summarized the resolution directs staff to prepare two levy options for presentation to and consideration by the Council on June 2: 1. A $3.75 million general operations levy that would be reflective of the work done to date by the CLRC and the internal City levy work group. He noted $3.75 million was approximately the average of the CLRC's recommendations. 2. A 3.75 million parks, public safety and families levy that would have at least 75% of the funds directed to services that support parks, public safety and families. This is reflective of comments at the CLRC that whatever is on the ballot needs to be tangible, things that citizens use and that would be cut if the levy failed. He noted some items would be in both the general operation and the parks, public safety and families levy options such as funding for Yost Pool and the Senior Center, Discovery programs, and funding to replace staff furloughs and give- backs. Edmonds City Council Approved Minutes April 21, 2009 Page 11 Council President Wilson requested the parks, public safety and families levy option identify the cuts that would be made in parks and public safety if the levy failed. For example, he recalled the Council considered a cut of $500,000 from the parks maintenance fund which would effectively close all 31 neighborhood parks because they would be required to be fenced off if they were not maintained. Council President Wilson anticipated the Council would have a detailed conversation regarding the two options including what items would be funded by each levy option. There would then be three public open houses in June and July, led by Council and City staff, to review the two options. The goal would be for the Council to affirm a final option by the end of July. Councilmember Bernheim agreed with presenting two options. He suggested including crime prevention . in the description of the parks, public safety and families levy and adding funds to adequately staff economic development activities. He also favored including funds dedicated to economic development and tourism. He suggested changing the name to a parks, public safety and economic development levy. Councilmember Wambolt suggested once Mayor Haakenson presented the Council with a list of specific cuts that would be made if the levy failed, the title of the levy could be determined. Council President Wilson commented it was the Mayor's job to manage day -to -day operations and make emergency cuts in a cash flow crisis. However, it was the Council's job to make basic priority determination and the Council should have time by November to make their priorities clear. After a decision is made August 4 regarding placing the levy on the ballot, the Council could begin deliberations on what would be cut if the levy failed, beginning with Mayor Haakenson's recommendations. Councilmember Wambolt commented the Council must develop a list of cuts, recalling several groups indicated their agreeing to the levy was contingent on identifying what would be cut if the levy failed. Council President Wilson announced the Council would take public comment on the resolution on April 28 and May 5 including what items should be in the levy. The Council would vote on the resolution on May 19 and have a presentation on the levy on June 2. 6. RESOLUTION REGARDING ADDRESSING THE LONG -TERM REVENUE CHALLENGES FACING THE CITY OF EDMONDS. Council President Wilson explained Councilmember Peterson and he developed this resolution in an effort to avoid the City being in this position again, acknowledging the City had a revenue problem rather than an expenditure problem. He paraphrased the resolution, given the financial situation, the recommendations by the CLRC teams, the large number of highly qualified citizens who were interested in participating in this process, the City Council directs staff to create an ordinance forming a Citizens' Economic Development Commission constituted as follows: each Councilmember shall appoint up to two members and the Mayor shall appoint up to three members, terms for positions shall not exceed two years, and the Economic Development Director will staff the Commission. The mission of the Commission is to, 1) determine new strategies for economic development in the City, 2) identify new sources of revenue for the City to consider, and 3) the Commission will deliver a written and oral annual report to the Council and other times as needed. He explained the Commission was an effort to capture the interest of the CLRC in keeping the process moving forward. Council President Wilson suggested each Councilmember appoint only one member and the Mayor appoint two to ensure the Commission was not unwieldy. Edmonds City Council Approved Minutes April 21, 2009 Page 12 COUNCIL PRESIDENT WILSON MOVED, SECONDED BY COUNCILMEMBER BERNHEIM, TO ADOPT RESOLUTION NO. 1198 REGARDING ADDRESSING THE LONG TERM REVENUE CHALLENGES FACING THE CITY OF EDMONDS, WITH THE CHANGE THAT EACH COUNCIL WOULD APPOINT ONE MEMBER AND THE MAYOR WOULD APPOINT TWO MEMBERS. Council President Wilson explained the resolution also directs the Planning Board to review and consider strategies for economic development in conjunction with the Citizens' Economic Development Commission that will improve commercial viability and activity in the City of Edmonds and to report back to the Council on or about the first meeting of December. COUNCILMEMBER BERNHEIM MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, TO AMEND THE MOTION TO RETURN THE RESOLUTION TO THE WAY IT WAS ORIGINALLY WRITTEN WITH THE LARGER NUMBER OF MEMBERS. Councilmember Bernheim explained his suggestion was the result of his recent attendance of a meeting of the Senior Center Board of Directors that has 20 -22 members and functions very well, has a lot of energy and is more effective than a board of 6 -10 members. For Councilmember Wambolt, Council President Wilson explained he recommended the smaller number of members due to his concern 17 members would be unwieldy. AMENDMENT CARRIED (6 -1), COUNCILMEMBER WAMBOLT OPPOSED. COUNCILMEMBER BERNHEIM MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, TO SPECIFICALLY INCLUDE TOURISM WITHIN THE SCOPE OF THE PLANNING BOARD'S ECONOMIC DEVELOPMENT REVIEW SO THAT THE PLANNING BOARD WOULD REVIEW AND CONSIDER STRATEGIES FOR ECONOMIC AND TOURISM DEVELOPMENT. Councilmember Plunkett commented he assumed tourism was part of economic development in Edmonds. He noted there were a number of specifics that could be included if the items to be reviewed were enumerated such as historic preservation, street trees, etc. Council President Wilson agreed tourism was inferred. He wanted to ensure the resolution did not give the Planning Board too much direction and that the Council trusted the Planning Board to present good strategies and recommendations. AMENDMENT CARRIED UNANIMOUSLY. Mayor Haakenson pointed out that contrary to Mr. Hertrich's comments, Community Services /Economic Development Director Stephen Clifton was doing two full -time jobs for the price of one. He was extremely busy and this was one more thing added to his job duties. On behalf of the Planning Board, Mayor Haakenson anticipated they would do a great deal of work and bring the Council a quality work project and he urged the Council not to dismiss them as has happened in the past. Vote on Main Motion as Amended: MOTION CARRIED UNANIMOUSLY. 7. UPDATE ON YOST POOL Mayor Haakenson explained the group that formed to find a way to keep Yost Pool open asked for additional time for fundraising. Working backward from the projected opening date, staff determined the group could have until April 14 to raise funds necessary to fund the deficit that the pool normally operates Edmonds City Council Approved Minutes April 21, 2009 Page 13 under. In each of the past three years, the pool's expenses exceeded revenues by over $100,000 each year. In good economic times, it may be acceptable to citizens to provide an amenity that loses that much money but in the current economy, it simply is not possible or advisable. He referred to emails to the Save Yost Pool group from a Councilmember that the City had the money to fund Yost Pool this year by taking the money from the Emergency Financial Reserve Fund. Mayor Haakenson agreed there were funds in the Emergency Financial Reserve Fund for use at the Council's discretion. However, he questioned whether that was the proper action to take in these difficult economic times, whether the City should use its emergency reserve to fund a program that would lose $100,000 when other programs were being cut and employees were taking pay cuts. As much as he would like to keep Yost Pool open, he was unwilling to take such an irresponsible action and if the Council chose to do so, that was their right. Mayor Haakenson commented the fundraising done by the Save Yost Pool group in a very short period of time was nothing less than remarkable; they have raised in excess of $50,000. They have also proposed fee increases that would bring in an additional $29,000. He advised the revenue projections from those fee increases were provided to the Council last week; they had since been tweaked slightly from $30,000 to $29,000. He pointed out the increases required Council approval and acknowledged there was some question whether the increased fees would attract the same number of users or cause a decline in usage which would slightly reduce the revenue projection. He suspected with the publicity Yost Pool has had over the past few weeks there would be a heightened interest in Yost Pool. The third proposed change is a reduction in days the pool is open, staffing reductions and daily schedule changes which would reduce costs by approximately $17,000- $18,000. He concluded the $100,000 deficit had been eliminated and with these actions in place, the citizens of Edmonds could not lose by opening Yost Pool in 2009. He emphasized there was no City money at stake, no money saved from furloughs, no money saved from other budget cuts and no emergency reserve fund money would be spent by opening the pool. He recommended opening Yost Pool for 2009, commenting it was clear by the financial support the pool was an important amenity to the citizens of Edmonds and they were willing to pay for it. Whether they were willing to pay for it in the future remained to be seen. The present of Yost Pool for 2009 awaits only confirmation by the Council of the proposed fee increases. The real future of Yost Pool depends on the levy or the possibility of a public /private partnership. He commented on discussions he was having with a group interested in a public /private partnership, noting if a feasible proposal was developed, it would be presented to Council. Should the levy fail or a partnership not materialize, the City will face the same predicament next year. He did not anticipate the Save Yost Pool group would be able to raise $50,000 every year. Should the levy fail, circumstances would be so dire, the City may close a fire station, permanently close parks or even de -annex as a city and become part of Snohomish County; Yost Pool will only be the tip of the iceberg. In the meantime staff will continue to look at other cost saving options such as a Regional Fire Authority or contracting for police and fire services. The Mayor summarized much had been said about the type of city Edmonds wants to be, noting that a beautiful city did not come without cost. The future of Edmonds was in the hands of the City Council and the voters of Edmonds. He asked the Council to consider a vote on the proposed fee schedule to allow the City to accept the community's donations and to begin the process of opening Yost Pool for 2009. Councilmember Plunkett recalled 30 days ago Mayor Haakenson was adamant Yost Pool would be closed. He thanked Mayor Haakenson for allowing those interested in Yost Pool an opportunity to fundraise and reach a resolution. Edmonds City Council Approved Minutes April 21, 2009 Page 14 Councilmember Bernheim commented he would be willing to spend money from the emergency reserve to make up the shortfall for Yost Pool for one season. He asked whether staff had discussed the Yost Pool funding crisis with the consultants performing the aquatics study. Mayor Haakenson answered Parks & Recreation Director Brian McIntosh had that discussion with them and they had no suggestions that were better than $50,000 in donations. Councilmember Bernheim expressed support for a full schedule for Yost Pool_ Mayor Haakenson advised the pool schedule will be shortened slightly and will be open June, July and August as well as other changes that will save money. Councilmember Bernheim expressed support for using funds from the $1.9 million emergency reserve for a full schedule, noting a revenue shortfall was one of the purposes of the fund. Councilmember Plunkett asked whether the intent was for the Council to vote on the fee schedule tonight, noting the fee schedule had not been included in the Council packet. Mayor Haakenson advised he was asking the Council to approve the fee schedule tonight, stating he emailed the Council the fee schedule last Friday to allow them to vote on it tonight. He offered to have staff make copies of the proposed fee schedule for Council review. Councilmember Plunkett commented if the intent was for the Council to vote on the fee schedule, it should have been included in the packet. Council President Wilson agreed with Councilmember Plunkett, noting he had questions regarding the fee schedule which Parks & Recreation Director McIntosh was able to answer. He recommended staff move forward with the expectation that the fee increase would be approved but delay final adoption of the fee schedule until next week. Mayor Haakenson suggested taking a recess to provide Councilmembers a copy of the fee schedule. Council President Wilson asked if adoption of the fee increase could be delayed until next week. Mr. McIntosh responded the process was approximately one week behind and every day of delay meant returning staff were finding other jobs. He explained it also took approximately six weeks to ready the pool for opening. With regard to the fees, he explained staff met with the Save Yost Pool group and reached a consensus to increase fees approximately 30 -33% over last year. He requested the Council not to wait a week. Council President Wilson commented the fee schedule Mayor Haakenson emailed was not the same as the schedule that was currently proposed. He suggested moving forward as if the fee schedule would be approved but delay approval until next week. Councilmember Wambolt referred to the suggestion to use the emergency reserve fund and suggested discussing the next agenda item before taking any action to use the emergency reserve for Yost Pool. Councilmember Orvis asked if the Council needed to vote on opening the pool and approving the fees. Mayor Haakenson clarified the Council only needed to approve the fees. Councilmember Orvis asked if staff could act in anticipation of the Council approving the fees. Mr. McIntosh commented fees for parks and recreation classes had never been scrutinized by the Council in the past; staff set the fees and reviewed them annually. He summarized staff and the Save Yost Pool group felt the fee increase was fair and workable. Councilmember Peterson suggested moving this item to follow Item 9 to give staff time to copy the fee schedule and if there were any glaring irregularities, the vote could be delayed until next week. Councilmember Bernheim noted the agenda memo indicated Mayor Haakenson would provide comment at the meeting. He asked whether regardless of Council action tonight, the pool would open on its regular schedule. Mayor Haakenson clarified the request before the Council was to approve the fee increase. He Edmonds City Council Approved Minutes April 21, 2009 Page 15 pointed out fees were not typically a Council issue but because the Council has made an issue of the fees on several occasions, they were presented to the Council tonight for approval. Councilmember Bemheim pointed out approval of the fees was not on the agenda. Anticipating the Council would in all likelihood adopt the fees next Tuesday, Councilmember Plunkett asked whether staff could move forward or did the fees need to be adopted first. Mr. McIntosh responded the fees did not need to be adopted to move forward with opening the pool. Councilmember Plunkett concluded adopting the fees next Tuesday would not impair staff moving forward. Due to comments regarding support for using emergency funds to open the pool, Councilmember Peterson commented he was unable to consider opening the pool without passing the fee increase first. He would not support opening the pool by taking money from somewhere else when labor had taken salary cuts. As much as he wanted to see the pool opened and recognizing the incredible fundraising effort, he would not inform the Parks Director to open the pool based on the Council probably approving the fee increases. He reiterated his suggestion to make copies of the fee schedule and consider it tonight. Councilmember Bernheim commented he did not want to get pushed into approving the fee schedule by an irregular procedure. It was not on the agenda and the Council did not know what increases were proposed. He suggested proceeding with opening the pool and scheduling the fees on next week's agenda. Mayor Haakenson apologized the fee schedule was not in the packet, commenting he believed by emailing it to the Council on Friday and allowing the Council the weekend to study it would provide them enough lead time. He commented the updated fee schedule was provided to him tonight; there were two minor changes made to the schedule he emailed to the Council on Friday. He concluded staff should have approved the fees themselves and not brought it to Council. Councilmember Wambolt agreed the Council received an email on Friday stating they would be asked to approve the fees tonight. He assumed the material was made available after the Council packets were prepared and therefore was emailed to the Council. Council President Wilson was embarrassed by administration's reluctance to answer questions and urging Council to simply approve the fees and not interfere. He expressed concern with emailing the fee schedule to the Council Friday evening which did not allow the Council or citizens an opportunity to comment. Following a brief recess, staff distributed copies of the proposed 2009 Yost Pool fee schedule. COUNCILMEMBER PETERSON MOVED TO DELAY THIS ITEM UNTIL AFTER AUDIENCE COMMENTS. MOTION DIED FOR LACK OF A SECOND. el 1101-0 1004 101011 113 04 Oka 2 0 N Councilmember Bernheim reiterated his concern that the fee schedule was not on the agenda and the Council had not had an opportunity to review it. After talking with members of the audience during the break, he was willing to vote on it. MOTION CARRIED UNANIMOUSLY. E:� 1�► 191:7lI�►C�`i �111►I17.y Councilmember Peterson explained the Council had an emergency reserve fund and the policy historically had been not to use it outside catastrophic emergency; however, the language of the ordinance Edmonds City Council Approved Minutes April 21, 2009 Page 16 was somewhat vague. His intent with the proposed resolution was to direct staff to make the original language fit the policy, that funds in the Emergency Financial Reserve Fund shall only be accessed in the case of extreme natural or manmade disaster or other calamity and that a revenue shortfall shall not alone be enough to justify use of such funds. He commented the previous discussion illustrated the slippery slope toward using funds from the emergency reserve to pay for shortfalls, a horrible budgetary precedence in his opinion. From a public safety standpoint, the City must have an emergency reserve. In response to some who have said FEMA could bail out the City, he was unwilling to wait for FEMA to bail out the City from a short term crisis. COUNCILMEMBER PETERSON MOVED, SECONDED BY COUNCILMEMBER WAMBOLT, TO APPROVE RESOLUTION NO. 1199 TO CLARIFY USE OF THE EMERGENCY FUND. Councilmember Bernheim disagreed with the concept, pointing out the existing ordinance created the emergency reserve fund in response to cuts in federal revenue sharing dollars. The ordinance states the City Council of Edmonds states its policy, purpose and intent that the Emergency Reserve Fund has been established to handle unanticipated emergencies including declines in federal revenue. He noted this was the first time he had suggested using funds from the Emergency Reserve Fund, $50,000 from a $1.9 million fund on a one time basis for a use that many residents valued. He objected to putting those monies off limits except for manmade disasters because it would be unavailable for other funding shortfalls. He was opposed to directing staff to prepare an ordinance that changed the language of the existing ordinance. Councilmember Orvis indicated he could not support the proposed language because it did not address emergency liabilities. He explained an emergency liability was the loss of funding currently used to pay a loan requiring the use of General Funds to pay a loan; an example would be if the City were no longer authorized to collect REST. He agreed the emergency reserve should not be used for a revenue shortfall although the current economic situation was not merely a revenue shortfall but was similar to a manmade disaster. He preferred to retain the language as stated in the existing ordinance. Councilmember Wambolt commented the situations referred to by Councilmembers Bernheim and Orvis should be covered by the General Fund balance although the City had not done a good job recently maintaining an adequate balance in the General Fund. The General Fund balance should be 10 -15% of General Fund expenses. Mayor Haakenson clarified the intent of the resolution was to direct staff to revise the ordinance and return it to Council for further discussion. Councilmember Peterson agreed that was his intent. Council President Wilson commented his understanding was the Council would be adopting policy that would be used to update the ordinance. Mayor Haakenson pointed out the ordinance in the packet had been updated a few years later addressing many of the issues Councilmember Bernheim raised. He suggested staff provide the updated ordinance to the Council. Council President Wilson observed the intent was to update the ordinance to state the emergency reserve funds were to be used only for disasters, catastrophes, calamities, etc. He did not support using one -time dollars for ongoing programs or services, noting in part that was how the City had gotten in this situation, spending one -time dollars from construction sales tax sources that disappeared after construction was completed. He pointed out in the event of a natural or manmade disaster, it would be horrific if the City did not have funds to respond or had to say those funds had been spent on other programs. He noted the existing ordinance stated the funds could be used for a financial shortfall such as to fund Yost Pool, a use Edmonds City Council Approved Minutes April 21, 2009 Page 17 he did not find appropriate. He recommended passing the resolution tonight and having additional discussion when staff presented the ordinance. Councilmember Peterson commented the ordinance would assist with transparency and clarify the purpose of those funds. Councilmember Wambolt commented his research indicated the Emergency Reserve Fund had never been used. Mayor Haakenson agreed it had not been used since he had been in office. UPON ROLL CALL, MOTION CARRIED (4 -3), COUNCILMEMBERS PETERSON, OLSON, WAMBOLT, AND COUNCIL PRESIDENT WILSON IN FAVOR; AND COUNCILMEMBERS BERNHEIM, ORVIS AND PLUNKETT OPPOSED. Mayor Haakenson requested staff also provide the previous revisions made to the ordinance when this was presented to the Council. David McNayr, Executive Director, South County Senior Center, commented when he assumed the duties of the Executive Director in mid February, he was immediately faced with a $50,000 reduction in the 2009 budget. He assured this shortfall had nothing to do with Mayor Haakenson's announcement in March regarding the proposed funding reduction for the Senior Center. In order to meet the reduced budget for 2009, it was necessary to eliminate 3 positions and the hours of an additional position, approximately 40% of the Center's staff. Next, he applauded the City of Edmonds for their efforts and support to preserve the environment and health of the planet. In recognition of Earth Day on April 22, the Senior Center will begin recycling for the first time in their 21 year history. He encouraged the public to read the latest edition of Sound Connection, available on line at the Senior Center website, www.scscedmonds.org. George Murray, Edmonds, asked how many others rode their bike to the meeting tonight, noting after the sustainability presentations at the last Council meeting, he feared if he drove to the meeting he would be the only one with a car. He thanked the Edmonds Beacon and especially Pat Ratcliff for the news they report. He described seeing several young girls in front of the Frances Anderson Center with a Save Our Yost Pool sign collecting donations for the pool. He was ashamed and angry that the community had let Yost Pool reach this point. He pointed out the pool and parks were the threads that hold a community together and should be preserved. Dick Van Hollebeke, Edmonds, explained the CLRC which included his wife and he were a diverse group who gave their time and talent and in four weeks came together to support a levy and to urge the Council to change the City's economy. He suggested this as an example to the Council to work better together. He also participated on the Save Yost Pool group, an amazing effort that raised $53,286.47 in one month. Donations ranged from a 5 -year old who emptied his piggy bank to donate $1.1.8, the Hubbard Family Foundation Trust who donated $5,000 and many donations of $100, $200, $500, and $2000. The group raised $10,400 in donations by standing in front of grocery stores on the Friday and Saturday before Easter for a total of six hours each day. He noted this bodes well for aquatics and announced on May 6 there would be a meeting to present four ideas for the future of aquatics programs in Edmonds. He urged the Council to work together, noting audience members were embarrassed that the Council could not come together on a simple matter of adopting the fee schedule. He reiterated the levy committee urged the Council to work harder to make Edmonds a city everyone could be proud of. Nancy Hopper, Edmonds, who worked with Mr. Van Hollebeke and others on the Save Yost Pool effort, thanked Mayor Haakenson for taking the time to work with them as they developed the three part Edmonds City Council Approved Minutes April 21, 2009 Page 18 solution that included, 1) increasing fees to match neighboring pools and increasing non - resident rates, 2) refining the schedule and finding efficiencies and 3) fundraising. She was hopeful a public /private partnership could be identified to make the pool viable and perhaps generate revenue. COUNCILMEMBER WAMBOLT MOVED, SECONDED BY COUNCILMEMBER PETERSON, TO EXTEND THE MEETING UNTIL 10:30 PM. MOTION CARRIED UNANIMOUSLY. Dave Page, Edmonds, commented he was unable to continue his commitment to the Save Yost Pool and levy committee due to medical issues. After describing the efforts taking place in Edmonds to hospital staff, a nurse provided him an x -ray of his chest that showed his heart was in the right place. He noted the groups' recommendations referred to the culture of thought and culture of change. He agreed the City would have been in financial difficulty even without the current economic crisis because the City had been operating on less and less revenue each year. The decision for the future was what kind of city residents wanted. He noted economic development was mentioned 12 times in the groups' presentations. He recalled there had been efforts toward economic development by this administration in the past 10 years but it had been a battle against efforts that halted economic development. He urged the Council to get together on economic development and to compromise on issues such as building height at the waterfront. He offered to work on passing the levy. Priya Cloutier, Edmonds, commended citizens for thinking outside the box to save Yost Pool. To Councilmembers Plunkett and Bernheim, she was disappointed they were willing to save the pool using the emergency reserve fund. She was offended that saving the pool was more important to them than paying staff. She urged the Council to think outside the box. She recalled Councilmember Plunkett's statement after the Council retreat that citizens will not mind paying an extra $22 per month, concluding that rather than considering how to develop an economic development plan, Councilmember Plunkett took the easy way out. She commended Councilmember Peterson and Council President Wilson for making the difficult decision to support labor. Diane Bucksnish, Edmonds, commented community was the essence of one's life. She announced that in addition to the presentation at Brackett's Landing by Sustainable Edmonds, the dog park, OLAE, will be having a potluck at a director's home on April 22 to celebrate the earth. She invited anyone interested in attending to visit their website, www,olae.org. Roger Hertrich, Edmonds, urged the Council to use the additional $435,449.57 from the Esperance contract appropriately. He also suggested funds could be taken from the fiber optic consultant in the amount of $130,000 that had never been put out to bid. With regard to Councilmember Peterson's suggestion to clarifying the use of the Emergency Reserve Fund, he suggested it was an effort to eliminate complaints that the Mayor was not sending the $1.9 million in that fund. Mayor Haakenson pointed out all the additional money from the Esperance contract was budgeted in the 2009/2010 budget with the exception of $100,000. With regard to the fiber optic contract, he was happy to bring it back to the Council again, noting he had attempted to cut that from the budget in November 2008 and the Council reaffirmed their desire to continue with the fiber optic project. Fred Gouge, Commissioner, Port of Edmonds, advised a business, A to Z, was coming to the Port to provide commuter service while the Hood Canal bridge was closed May 1 for 4 -6 weeks. Further information about the service was available on the Port of Edmonds website or the Kenmore Air website. In addition to commuter service, A to Z will offer trips around Puget Sound. Next, he requested the Council schedule the Port's Executive Director Chris Keuss on the Council agenda before he retires. The Port hired a new Executive Director whom Mr. Keuss will introduce to the Council. A retirement party for Mr. Keuss is planned for May 15 at the Edmonds Yacht Club; all Councilmembers are invited. He explained the Port's charter was economic development. They are involved in a master plan process for Edmonds City Council Approved Minutes April 21, 2009 Page 19 Harbor Square and will have a consultant assist with planning for redevelopment of Harbor Square. He encouraged the Economic Development Commission to consider a Comprehensive Plan amendment to change the height at Harbor Square. He anticipated a great deal of citizen input on the Harbor Square master plan. He commended the Citizen Levy Review Committee. He encouraged the public to visit the Port, restaurants and athletic club and hotel at Harbor Square. He advised there was a ceremonial ground breaking for the Yacht Club but the Port currently did not have a contract with the Yacht Club. Council President Wilson offered to schedule Mr. Keuss on the May 5 agenda. Heidi Hardwick, Edmonds, urged the Council not to be so hard on themselves, noting the Council had worked together like a family. She expressed support for public safety, noting her ex- husband, the father of her five children, was an Edmonds police officer. She urged citizens to fund the Senior Center, public safety Yost Pool and the flower program via the levy. [ E, W1112) Community Services /Development Services Committee Councilmember Orvis reported the Committee reviewed the proposal to ban plastic bags and directed the City Attorney's office to research language from other jurisdictions and to develop two options for Council consideration, a plastic bag ban at grocery stores and a ban on plastic bags at all retail establishments. The Committee will review the ban options and present it to the Council for a public hearing in May /June. Next, the Committee discussed the temporary buildings /uses ordinance. He learned from Snohomish County that by classifying canopies as carports, up to 200 square feet could be permitted without a change in the State building code. The Committee also discussed a recent code amendment that allowed minor architectural improvements such as bay windows to be approved for nonconforming buildings. Staff learned that change did not remedy the specific situation that promoted the code amendment and additional refinements may be necessary. The final item the Committee discussed was 2x6 construction to improve thermal insulation for new construction. The State recently improved their standards, requiring R -21 for wall insulation which cannot be attained with 2x4 construction and fiberglass insulation. He planned to research this further. Finance Committee Councilmember Wambolt reported the first item was authorization for the Mayor to sign a professional services agreement with Rick Jenness who is working on the fiber optic project. He noted Mr. Jenness had been involved with the Community Technology Committee since its inception and was now doing work for which he needs to be compensated. His contract was moved to the May 12 Finance Committee meeting to allow staff to respond to questions. The second item the Committee reviewed was the 2009 first quarter budget report. He reported the City was $356,000 or 4.6% below its expense budget. Sales tax for 2009 is expected to be $1 million short; at the end of the first quarter sales tax collections were down by 19.6% from 2008 or approximately $250,000. REET receipts are also lower; in 2007 the City collected $1.4 million, half that amount in 2008 and in 2009 the City expected to collect half the amount collected in 2008, only approximately $350,000. At four months, REST collections are 54% below collections one year ago. He noted some other tax collections have increased such as the gas utility tax due to the cold winter and the new City cable utility tax was being collected by Comcast. The final item . discussed by the Committee was interfund loan activity which was approved as Consent Agenda Item 2 -1. Public Service Committee Councilmember Peterson reported the Committee approved the revised Esperance Agreement for the provision of fire protection and emergency medical services which increased their payment from $295,000 to $730,000, most of which was already budgeted in the 2009/2010 budget. He recognized Fire Chief Tomberg for negotiating additional funds in the contract. The Committee also recommended revisions to the Edmonds City Code Title 5 which was approved on the Consent Agenda. The Committee recommended continued participation in the Snohomish County Regional Drug Task Force. The Edmonds City Council Approved Minutes April 21, 2009 Page 20 Committee's discussion of red light cameras included concerns regarding their effectiveness and safety. Assistant Chief Gannon was asked to provide additional information particularly from neighboring cities that use red light cameras. The final item was review of the Municipal Court which was continued to the next meeting. 11. MAYOR'S COMMENTS Mayor Haakenson wished Councilmember Olson a happy birthday on April 24. He invited a Councilmember to attend the annual Puget Sound Regional Council general assembly meeting on April 30 at 4:00 p.m. as Council President Wilson, the City's delegate, was unable to attend and he was uncertain whether he would be able to attend. 12. COUNCIL COMMENTS Council President Wilson explained the process for establishing the Citizens' Economic Development Commission will include adoption of an ordinance mid to late May and members would be appointed shortly thereafter. He invited anyone interested in participating to send a letter of interest or resume to any Councilmember or to Senior Executive Council Assistant Jana Spellman at Spelhman@ci.edmonds.wa.us. He recognized tomorrow was Administrative Professional's Day and thanked Ms. Spellman for the wonderful job she did for the Citizens Levy Review Committee including working weekends and evenings. Council President Wilson commented he was humbled, impressed and proud to be part of a community that could raise $50,000 in three weeks to keep the pool open. Councilmember Wambolt wished Councilmember Olson a happy birthday. Councilmember Peterson reminded the public of the Conversation on Climate Change tomorrow night in the Brackett Room of City Hall from 6:00 — 9:00 p.m., sponsored by the City and Sustainable Edmonds. They will be discussing climate action that could be taken on the household and on the community level. Attendees were asked to bring their own reusable mug or water bottle. 13. ADJOURN With no further business, the Council meeting was adjourned at 10:34 p.m. Edmonds City Council Approved Minutes April 21, 2009 Page 21