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2023-12-11 Special MeetingEDMONDS CITY COUNCIL SPECIAL MEETING APPROVED MINUTES December 11, 2023 ELECTED OFFICIALS PRESENT Neil Tibbott, Council President Vivian Olson, Councilmember Will Chen, Councilmember Diane Buckshnis, Councilmember Susan Paine, Councilmember Chris Eck, Councilmember Jenna Nand, Councilmember ELECTED OFFICIALS ABSENT Mike Nelson, Mayor 1. CALL TO ORDER/FLAG SALUTE STAFF PRESENT Dave Turley, Administrative Services Director Oscar Antillon, Public Works Director Susan McLaughlin, Planning & Dev. Dir. Todd Tatum, Comm., Culture & Econ. Dev. Dir. Shannon Burley, Deputy Parks, Rec., & Human Serv. Dir. Kim Dunscombe, Deputy Admin. Serv. Dir. Jeff Taraday, City Attorney Nicholas Falk, Deputy City Clerk Jerrie Bevington, Camera Operator The Edmonds City Council special meeting was called to order at 6 pm by Mayor Pro Tem Tibbott in the Council Chambers, 250 5t' Avenue North, Edmonds, and virtually. The meeting was opened with the flag salute. 2. LAND ACKNOWLEDGEMENT Councilmember Chen read the City Council Land Acknowledge Statement: "We acknowledge the original inhabitants of this place, the Sdohobsh (Snohomish) people and their successors the Tulalip Tribes, who since time immemorial have hunted, fished, gathered, and taken care of these lands. We respect their sovereignty, their right to self-determination, and we honor their sacred spiritual connection with the land and water." 3. ROLL CALL Deputy City Clerk Nicholas Falk called the roll. All elected officials were present with the exception of Mayor Nelson. 4. APPROVAL OF AGENDA COUNCILMEMBER CHEN MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY. 5. AUDIENCE COMMENTS Edmonds City Council Approved Minutes December 11, 2023 Page 1 Robert Chaffee, Edmonds, spoke against [inaudible] Landmark 99 placeholder. The City has proposed spending $300,000 from the Affordable Housing Sales Tax Credit Fund 141 for professional fees to study the Landmark 99 project. According to RCW 82.14.530, a minimum of 60% of the fund must be used for affordable housing for the following persons with 60% or below the median county income: persons with mental illness, veterans, senior citizens, homeless or those at risk of being homeless, persons with disabilities and domestic violence survivors. The remainder of the monies collected must be used for mental or behavioral health services. There is no evidence that the Landmark 99 project will fulfill these requirements and he believed it was a misuse of the Fund 141 monies. Glenda Krull, Edmonds, expressed concern with using affordable housing funds for the Landmark 99 project pursuant to RCW 82.14.530. Much concern has been expressed about the information provided to the city council by City of Edmonds staff regarding funds available for use in the consulting endeavor for Landmark 99 in 2024. Funds in the 141 account are sales tax earmarked for providing affordable housing or related programs for various population groups. Using these funds for speculative endeavors like consulting fees as suggested for the Landmark 99 project is reckless and chancy. There is no guarantee that this project will indeed be used for affordable housing. As the City's process to date acknowledges, the use of the 10 acre site is not yet known. If the City decides to abandon this project, the money that should have been used for affordable housing and related programs will be gone. She urged the council to vote against the Landmark 99 decision package. Jim Ogonowski, Edmonds, commented the 2024 budget has been particularly difficult to follow sequentially as the council has been making decisions. He recalled the City invested quite a bit of money in a new budget software package that was supposed to make the process more transparent, easier and provide a spreadsheet in real time as the council went through its deliberations. He has not seen any of that occurring during council meetings and wondered if that software was being used and if not, why not and if it is being used, why isn't it visible to the council and citizens to make the process more transparent. He found the proposal to make a transfer from the utility funds to supplement the general fund particularly disturbing since the council just approved a double-digit utility rate increase, telling residents it was needed for utilities and now there is a proposal to use that money for the general fund. He felt the citizens had been fleeced. Jay Grant, Edmonds, expressed disappointment that the council voted to move forward on the Landmark 99 project. He did not object to the purpose, believing Edmonds has an obligation to have services and facilities in that area, but he did not understand the decision from a fiscal point of view when the city is broke. He acknowledged cities sometimes have to stretch when they're broke, but although the council had alternatives, they had not made the right choice. He hoped the council thought about that as they move forward as well as the fiscal responsibility required of the council to move forward in a prudent way. 6. COUNCIL BUSINESS 2024 BUDGET DELIBERATIONS AND POTENTIAL ADOPTION OF 2024 BUDGET ORDINANCE New Decision Package - Yost Trails, Bridges and Tennis Court (,packet item 6. Lb) Deputy Parks, Recreation and Human Services Director Shannon Burley advised there are two decision packages in the council packet tying up loose ends in order to approve the CIP/CFP. This decision package is related to former Councilmember Teitzel's proposal to adjust the work done in the Shell Valley as part of the CIP/CFP discussions. This decision package is simply to memorialize the council's vote. It is 100% REET funded and does not impact the General Fund. She advised that Councilmember Teitzel worked directly with staff to ensure this met what the council and staff were trying to accomplish. Edmonds City Council Approved Minutes December 11, 2023 Page 2 Mayor Pro Tem Tibbott advised this is DP82 and expenditures are $154,300 from REET. Ms. Burley responded the total is $250,000. A decision package was canceled and removed and a new decision package added to make it clean and not tie an old decision package and new decision package together. The total allocation is $250,000. COUNCIL PRESIDENT PRO TEM OLSON MOVED, SECONDED BY COUNCILMEMBER PAINE, TO APPROVE THIS DECISION PACKAGE. MOTION CARRIED (6-1), COUNCILMEMBER BUCKSHNIS VOTING NO. City Attorney Jeff Taraday explained the agenda packet includes two decision packages related to this, packet item 6. Lb is the removal of DP82 from the Yost Trails, Bridges and Tennis Courts, and 6. Lc is the decision package where the money is being moved to, Shell Creek Restoration. The council's deliberation suggests they were approving both decision packages; it would be cleaner if the council voted on each decision package individually. Mayor Pro Tem Tibbott relayed his understanding the council already approved moving the money forward regarding DP82 and now are removing that decision package in order to approve the new decision package with more funding. Mr. Taraday said he was just trying to follow along in the council packet to ensure he understands what happening. packet item 6. Lb is New Decision Package, Amendment Regarding DP82 which removes $154,300. Listed separately in the council packet but related is 6.1.c, Shell Creek Restoration in Yost Park, which is where the $154,300 would be moved to. They are clearly related, but he wanted clarification whether the motion was for both or if the council wanted to vote on them separately. Mayor Pro Tem Tibbott said his understanding was the council was taking them one at a time, but he was glad to start over. He explained 6.1.b is related to DP82 which is to remove that funding and add a new funding source to increase the funding available for that project. Councilmember Buckshnis commented $250,000 is exactly what staff asked for last year to fund a consultant to do a review of Yost Park which means nothing was done in Yost Park for an entire year. Ms. Burley responded the amount requested last year was slightly less than $250,000 and the council lowered it to $120,000 which was not enough to complete the study. Staff is requesting funding that would be feasible to complete the study and the price has increased. Acknowledging that this is not an area she would usually speak to or that she has a tremendous amount of background in, she explained the current trail system and the current alignment of the bridges within the valley may/may not be the best placement for the next 50 years. During the past 50 years, nature had a way of doing what it wanted and deciding where the stream went, where erosion occurred, how the hillside moved, and where trees fell. One of the bridges took the brunt of an alder tree that recently. Ms. Burley continued, staff is recommending that instead of applying band -aids as each situation arises, to review the entire channel and develop a recommended initial design for where the trails and bridges could be sustainable for many decades. Whether that is their current location is yet to be seen. The cost of permitting for overwater work is substantial, so the goal would be to obtain the permits and do it in one fell swoop instead of requesting funding each time a failure occurs. It should probably be categorized as slightly more than a study, but the intent is to align the work in a manner that would create a sustainable environment for many decades. Council President Pro Tem Olson spoke in favor of both decision packages. She and other residents are interested in access in the short term and to the extent that can be done with inhouse staff in the interim to make them safe and useable during while the study is being done. She asked how much of that could be expected in the short term. Ms. Burley answered the two bridge failures are different. One is much more challenging given there is scouring under the substructure of a bridge and the other was caused by a tree falling which took out a significant amount of the bridge and handrails so there is work to be done to Edmonds City Council Approved Minutes December 11, 2023 Page 3 determine what parts of the structure remain intact. She was unable to share a timeline for that bridge other than to say parks staff feels the same way, they want parks to be available and safe to users so it is certainly a priority. Council President Pro Tem Olson suggested providing regular updates to the parks and public works committee as information becomes available. COUNCIL PRESIDENT PRO TEM OLSON MOVED, SECONDED BY COUNCILMEMBER CHEN, TO PASS THE AMENDMENT REGARDING DP82 ON ATTACHMENT 6.1.B, PACKET PAGE 5. MOTION CARRIED UNANIMOUSLY. A MOTION WAS MADE BY COUNCIL PRESIDENT PRO TEM OLSON AND SECONDED TO PASS A NEW DECISION PACKAGE TITLED SHELL CREEK RESTORATION ON 6.LC ON PACKET PAGE 6. MOTION CARRIED (6-1), COUNCILMEMBER BUCKSHNIS VOTING NO. CM Fund Description Dept $ Nand Fund 016 Bond Proceeds in Fund 016 to reimburse Building $529,083.33 to GF General fund for first three years of interest Maint expense. Councilmember Nand requested this be deferred until tomorrow to get additional feedback from parks and public works. Mayor Pro Tem Tibbott advised there is no council meeting tomorrow, only committees meetings. He noted Mr. Turley may have information. Councilmember Nand asked Mr. Turley to relay the feedback from Public Works Director Antillon regarding the impact on the CIP/CFP. Administrative Services Director Turley recalled the mayor's proposed budget suggested moving $2 million from the bond maintenance fund to help out the General Fund. The bond maintenance fund has specific purposes; the money was supposed to be used for maintenance projects. Staff consulted with bond counsel and he suggested the bond fund could be used to reimburse the City for the interest portion of the payments. The amount when this amendment was originally proposed was $529,083. As Deputy Administrative Services Director Dunscombe researched this, she realized only part of the money was paid out of the General Fund and the remainder was paid out of the parks construction fund. Both funds could be reimbursed for the full amount, $529,083, but at this point in the budget process, the intent is to help out the General Fund and take as little out of the bond maintenance fund as possible. So instead of moving $529,083 from Fund 016 into the General Fund and Fund 322, staff s revised proposal is to move $385,000 from Fund 016 into the General Fund, which represents interest paid on the bonds held in Fund 016. Councilmember Buckshnis recalled the council had this discussion last week, it was clear payments had been made from Funds 001 and 322. COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCILMEMBER PAINE, TO TRANSFER $385,274 FROM FUND 016 TO THE GENERAL FUND 001. Councilmember Nand asked if Mr. Turley had received feedback from Mr. Antillon regarding impacts to the CIP/CFP schedule if these funds were moved from Fund 016. She did not make the motion last week to allow Mr. Antillon to provide additional feedback. Mr. Turley suggested talking to Mr. Antillon. In his opinion, Fund 016 has ample fund balance and cash available to do all the projects planned for 2024 and probably for 2025. He definitely did not think this would impact anything in the works for 2024. Councilmember Nand explained the reason she delayed making this motion was to get additional feedback from public works about how this would impact their horizon for projects. She still wanted to get that feedback and determine what adjustments would need to be made to the schedule. Councilmember Chen asked what years the $385,274 covered, whether it was 2021, 2022, 2023. Mr. Turley answered he believed it was year-to-date through the end of 2023 for all the bond payments made since the Edmonds City Council Approved Minutes December 11, 2023 Page 4 bonds were sold to the present. Councilmember Chen asked if that included the years that had already been audited. Mr. Turley repeated it included all interest paid from the time the bonds were sold and the City began making payment until now. Councilmember Chen said he will vote no on this for two reasons, 1) the maintenance fund bond was issued specifically for backlogged maintenance and there is a long list of projects so those funds are needed, and 2) based on his knowledge, the period for which the audit report has been issued has been closed and he was not comfortable reopening that period. The first reason is more important than the second, those funds are needed for backlogged maintenance. Councilmember Buckshnis clarified this money is interest payments from Fund 016 to pay the bonds. In her opinion this is an interest payment that is already due, staff will not use this $385,274 to do work because it is interest required by the bond. According to Mr. Turley, prior period adjustments are irrelevant. She brought up that question last week, if there is a closed audit, a prior period adjustment can be done. She assumed that was Councilmember Chen's question, two of the audit periods have closed so what would be done from an accounting standpoint to reinstate those amounts. Mr. Turley answered tonight's discussion is related to the 2024 budget. The audit and financial reporting is under a different basis of accounting and completely irrelevant to tonight's discussion. The City has never done a prior period adjustments in a budget and he doubted any other city would do that. It is a misunderstanding of what the council is talking about; the council is talking about the 2024 budget and the audit is a completely separate set of books that have nothing to do with the budget. It will not be necessary to restate prior periods in an audited financial statement; no one will ask or tell the City something was done wrong or that it needs to be restated. He summarized the 2024 budget and audited financial statements are different sets of books for different purposes. Council President Pro Tern Olson relayed her understanding that the interest payments have been made from the General Fund which is a legal and acceptable practice. However, due to the City's tight finances, this is what bond counsel and Mr. Turley are proposing. She feels more attention should be paid to deferred maintenance which was one of the reasons she voted in favor of that bonding. If the City could afford to she would not choose this path, but she feels the City cannot afford not to at this point. Additionally, she appreciated the proposal to lower the amount. She recalled a conversation with public works that the impact to the CIP/CFP would be problematic if both these transfers were made, but they were okay with doing only one, especially the lowered amount should not be an issue based on those conversations. She was prepared to reluctantly vote yes on this. She wished the council didn't have to and wished more attention was being paid to deferred maintenance, but this is today and is what the council has to do. Councilmember Paine asked Mr. Turley if the interest payments for this bond could be delayed for 2024. Mr. Turley answered no. Councilmember Eck expressed her support for the motion, commented she did not see a risk. She appreciated the detailed description and like Council President Pro Tern Olson said, she would prefer not to be in this position, but it seems like something the council should consider. Councilmember Nand pointed out essentially the General Fund has been used to subsidize Fund 016 by paying these interest payments from the General Fund instead of Fund 016 so according to bond counsel, it is appropriate to reimburse the General Fund. The initial amount that Ms. Dunscombe's research found and that bond counsel verified, was close to $1 million, but she concurred with Council President Pro Tem Olson that $385,274 was a much more surgical amount and would be a good place to start. She will support the motion. Councilmember Buckshnis commented prior period adjustments have been done while she has been on council. In 2022 the City paid $136,824 from the General Fund for bond interest and $127,600 in 2023. She agreed it had nothing to do with the 2024 budget other than those amounts would be used to reimburse Edmonds City Council Approved Minutes December 11, 2023 Page 5 the General Fund. Councilmember Chen's point was the $136,824 in 2022 and $127,600 in 2023 have already been paid and the books were closed showing the General Fund paid those amount. If this motion is approved, the General Fund will be replenished. Mr. Turley agreed the General Fund paid money in 2022 which was reported in the audited financial statements and the General Fund paid money in 2023 which was also reported. The proposal is to make a transfer in 2024 which will be reported in 2024. It is essentially applying money to something already spent, not reversing a transaction that occurred 2-3 years ago. No prior period adjustment is needed. Auditors will not question this; the only time it comes into play is if the bond community asks how the money was spent, staff provides a list of how the funds were spent and that list would be different now, but that happens all the time such as moving money around related to grants. It doesn't affect the audited financials or the budget, it only affects the report to the bonding community how the funds were spent. Councilmember Chen expressed appreciation for that clarification. He asked if it was fair to say that any bond expenses including interest should have been paid out of Fund 016 to begin with. Mr. Turley answered it doesn't have to be, it's a choice. In the past, a lot of bond payments have been paid out of the General Fund. Some of those have been moved out of the General Fund such as the bond payment for Civic Field were moved into the Parks Construction Fund 332 to ease the pressure on the General Fund. Revenues available for use by the General Fund are getting harder to come by with property tax restrictions so efforts have been made to reduce General Fund spending. The Civic Field bonds could be paid out of the General Fund or the Parks Fund, but staff is choosing to pay them out of Parks Fund 332. There are a lot of options how to pay the bonds although not unlimited options. Councilmember Chen recommended anything related to bonds be put in that bucket in the future for clarity and consistency. Councilmember Nand restated the motion: TRANSFER $385,000 FROM FUND 016 TO THE GENERAL FUND TO REIMBURSE THE GENERAL FUND FOR INTEREST PAYMENTS MADE ON THE BONDS FOR CAPITAL PROJECTS. Council President Pro Tern Olson raised a point of order, pointing out the original amount was $385,274. Mr. Turley agreed. MOTION CARRIED UNANIMOUSLY. New Decision Package - Landmark 99 Placeholder (,packet item 6.1.d) Community, Culture & Economic Development Director Todd Tatum explained the intent is to ensure staff can line up professional service quotes with the exact funding sources, the Affordable and Supportive Housing Tax Credit and the Snohomish County grant. As commenters said tonight and via email and as staff is aware, there are restrictions on the use of the tax credit funds. While the council could vote tonight, staff intends to bring it back in first quarter 2024. Planning & Development Susan McLaughlin was present to answer questions. COUNCILMEMBER ECK MOVED, SECONDED BY COUNCILMEMBER PAINE, TO REMOVE THIS DECISION PACKAGE AND POSTPONE TO 2024. MOTION CARRIED UNANIMOUSLY. New Decision Package: Utility Interfund Loan to the General Fund (,packet item 6.1.e) With regard to why this is coming to council now instead of earlier, Mr. Turley recalled 2-3 weeks ago council asked the administration to come back to council with new ideas such as cost cuts, service cuts, additional revenue or other ways to help the 2024 budget. Ms. Dunscombe researched this; there is a big wall between the utilities and General Fund and utility funds are not supposed to be transferred to the General Fund because that would be subsidizing the General Fund on the back of ratepayers. This is not that, this is a loan from the Utility Fund to the General Fund. After all the work that has been done over the Edmonds City Council Approved Minutes December 11, 2023 Page 6 last couple months, the budget is still pretty thin and the ending fund balance is pretty small. While it is currently a legal, balanced budget, it leaves a very small ending fund balance at the end of 2024. As discussed, acknowledged and agreed, when mayor -elect Rosen takes office next quarter, a lot of time will be spent in the first few months of the year talking about the 2024 budget and making improvements to it. This loan gives breathing room; it allows the City to start January 1 with a healthy fund balance so the City can provide services, sit back and take a breath and in January, February and March look for ways to improve the budget with a clear mind and without a lot of pressure. Mr. Turley continued, he looked at this as a bridge from 2023 to 2024 to help make wiser and better choices in the first part of 2024. This loan can be repaid at any time; for example, if fabulous ideas are identified in February and March, the funds can be transferred back. This loan is much more flexible than selling bonds which would lock the City into a 10-20 years repayment program or a bank loan which would be more difficult to pay back on the City's terms. The City borrowing from itself would be a better idea. The General Fund would pay interest to the Utilities so the Utilities would not be out any money. It would not affect utility rates or ratepayers, it is just a loan from the Utilities Fund to the General Fund. Staff suggested $6 million total, $3 million from the Water Fund and $3 million from the Storm Fund, but that is completely at council's discretion. The council could borrow less or could borrow an amount now and an amount later. This is a very flexible decision package and is something the administration is proposing as a bridge to 2024 to allow everyone to take a deep breath and have a better start to the year and look for new alternatives. Councilmember Nand asked if the council pursued this, could the decision package be submitted with a repayment schedule for principle and interest so the public and council can be comfortable the Utility Fund will be made whole and how quickly that could be accomplished. Mr. Turley yes, however, the interest is generally tied to interest by the state investment pool which is not a fixed rate and fluctuates monthly. Councilmember Nand asked if there was a way to tie this to payments from the General Fund that serve the Utilities such as payroll for public works or other expenses paid from the General Fund to make it a rational loan. Mr. Turley answered there is a big wall between Utilities and General Fund. There are some General Fund costs reimbursed by Utilities but there are no funds in the General Fund that could be tied to this. Councilmember Buckshnis said she was still waiting for an answer to the 2023 staff adjustment where $3.6174 million was taken from the ending fund balance. The ending fund balance in 2024 was shown as $12.105 million and now it is $1.855, yet the council provided ARPA funds and the bond interest. She asked what the $3.6 million that was taken from the ending balance represents, whether it was the anticipated under -expenditure. Mr. Turley answered this was not normally done which is why it was confusing, council asked him in November to come back with updated estimates of where the City would be at the end of 2023. He considered revenues and expenses and made an updated guess of where the City will be at the end of year. That updated estimate was different than the estimate made eight months ago by $3.6 million. It is a revision of the estimate of what will be spent in 2023. The actual amount will not be known under the end of 2023. If the council prefers, he can remove the updated estimate and leave the original estimate. Councilmember Buckshnis said she was looking for an updated page 16, the strategic outlook, but according to Mr. Taraday, the council cannot question the fact that the mayor presented a $12.105 million budget when in fact it had imbedded policy issues that the council had not approved. In her opinion, the council is not dealing with something reasonable to start with. She did not support giving the General Fund another dime and recommended waiting until yearend to figure out what the numbers are and then next year do something like this is January. She did not want to play with numbers until there are accurate numbers in the strategic outlook and the General Fund balance. She anticipated the council would need to pass a resolution to utilize contingency reserves. She wanted to figure out the basic bones of the budget and not add any more money that will have to be repaid. The council has yet to receive a replenishment schedule Edmonds City Council Approved Minutes December 11, 2023 Page 7 for use of the reserves and this would require a Utility loan repayment schedule. She recommended settling down, figuring out the ending numbers and not doing any more of this stuff. Mayor Pro Tem Tibbott referred to packet page 11 (packet item 6.1.g) which Ms. Dunscombe developed to illustrate the 2024 beginning fund balance, proposed 2024 revenues and proposed 2024 expenses and 2024 ending fund balance. Councilmember Chen thanked Mr. Turley and Ms. Dunscombe for their creativity in coming up with borrowing money from the Utility Fund, recognizing it took some deep thinking to come up with that. Personally, he agreed with Councilmember Buckshnis that he did not want to borrow either internally or externally until absolutely necessary. Right now there is still the contingency reserve of $2.2 million and if necessary, the council can pass a resolution to allow the administration to use those funds. Doing that has the effect of warning everyone that there is an issue and revenues need to be increased and/or expenses cut instead of borrowing which is just a patch. The council already provided a $6.25 million patch with ARPA funds and most likely the remaining $250,000 will also need to be used. The more we patch, the bigger hole, the bigger problem we will have to fix in the future. In the short term, that patch gives the feeling that everything is fine and we can take a deep breath, but it actually makes the problem worse. He did not support this decision package. The City can dip into the contingency reserve in January if necessary and if it is absolutely necessary, think about borrowing internally before borrowing externally. Councilmember Nand asked if it would be appropriate to hold a public hearing before voting on a loan from the Utility Fund to the General Fund. Mr. Taraday answered the council can voluntarily seek input from the public in the form of public hearing on just about any topic at any time. As to whether it is appropriate, that is a council decision. Councilmember Nand said she would have more comfort in this vote if the council had a more detailed presentation, possibly facts and figures related to the proposed $6 million. The council has learned a lot about the fund reserve policy for the General Fund, but she did not know enough about the reserve policy for the Utility Fund to make an educated decision. She asked if that would be feasible by the end of the year. Mr. Turley said this agenda item includes possible adoption of budget. There is not time for more reports or a public hearing if the council is serious about passing the budget tonight. Councilmember Paine expressed appreciation for staff s creativity. She understood this was a big step to take. As others have said, she preferred to take a pause and ensure the council understands the reserve needs for the Water and Stormwater Funds. It was her understanding this wouldn't get close to interfering with the desired 180 day operating funds, but she was very leery about borrowing from protected funds. She suggested looking at this early in the first quarter, including the reserve needs of the Water and Stormwater Funds, before dipping into the contingency reserve. She wanted to proceed with caution and did not support this decision package. COUNCILMEMBER ECK MOVED, SECONDED BY COUNCILMEMBER CHEN, TO REMOVE THIS DECISION PACKAGE. Council President Pro Tem Olson said she appreciated the thought of this decision package, but it was such a big and new concept that it would have been surprising for the council to come around on this as quickly as they were being asked to look at it. She was glad other councilmembers were not ready to do this either. This suggestion was framed as staff helping the council, and if that is at all showing a softening of position from the mayor that staff can help the council find ways to help this budget, the council has been looking for cuts to help with the budget and shore up and match revenues and expenses, not borrowing more money or doing more one time money, but fixing the imbalance. If that could still be forthcoming, it is not December 3 1 " yet. Councilmember Nand thanked Mr. Turley and Ms. Dunscombe for their work on this. She asked when staff could provide more information to council on this possible interfund loan. Mr. Turley said he could not Edmonds City Council Approved Minutes December 11, 2023 Page 8 answer that until he knows when the 2024 budget will be passed. Once it is passed, it will the first quarter of 2024 before further adjustments can be made to the budget. It will take over a week of staff time to get the final ordinance and final budget completed. Councilmember Nand said she wanted to respect the holiday time off for the hardworking finance staff. MOTION CARRIED UNANIMOUSLY. Mayor Pro Tem Tibbott relayed that concludes the proposed amendments which brings counci I to approval of the budget. Councilmember Buckshnis commented the CIP/CFP needed to be reviewed and approved first due to its effect on the budget. Mayor Pro Tem Tibbott referred to the summary of 2024 provided on packet page 11, which shows the ending fund balance of $1,860,738 based on amendments the council passed at the last meeting. Ms. Dunscombe agreed it was current as of the previous meeting but did not include amendments made tonight. Mayor Pro Tem Tibbott advised the addition of the transfer of $385,274 tonight brings the ending fund balance to $2,246,012. Ms. Dunscombe agreed. Mayor Pro Tem Tibbott observed with that projected ending fund balance above the zero mark, the council is within its authority to pass a budget for 2024. Mr. Taraday answered that is correct, but he has not given complete thought to the issue of the extent to which the council is dipping into the contingency reserve with that ending fund balance and if so, what additional resolution would need to be adopted by the council to correspond with that ending fund balance. Mayor Pro Tem Tibbott relayed he asked Mr. Turley that question earlier today and he indicated this is in addition to the contingency reserve balance. Mr. Turley responded the contingency fund is 4% of expenditures, the General Fund reserve is 16% of expenditures. What Mr. Taraday was referring to was the council will be dipping into the 16% in restricted reserves and if the council wanted to be consistent with what was done in 2023, the council would need to approve a resolution for 2024 authorizing the use of those fund balance reserves; the contingency fund is a completely separate fund. Mayor Pro Tem Tibbott observed the contingency fund is still in place so the council may want to approve a resolution regarding the use of restricted reserves from the General Fund in 2024. Mr. Turley did not think it was necessary to declare a fiscal emergency because that had already been declared, but if the council wanted to be consistent with the policy and what was done 1-2 months ago, that type of resolution would be appropriate. Mr. Taraday said to tie everything up in a clean package, it would make sense to have the budget ordinance on next week's consent agenda along with the appropriate policy language in a resolution to comply with the City's reserve policy. A resolution is not available in tonight's packet to address the ongoing use of reserve funds. Councilmember Buckshnis raised a point of order, pointing out the council has not yet reviewed and approved the CIP/CFP which needs to include $300,000 in 2024 for Landmark 99 and the $1 million in the negotiated PSA for Landmark 99. The council cannot approve the budget until that is included in the CIP/CFP and if $1 million has to be added to the budget, it may require the use of the contingency reserves. She summarized the council cannot just ignore the Landmark 99 project. Mayor Pro Tem Tibbott ruled point taken. He explained the point of this discussion is to get clarity on what is needed to pass the budget although it would not actually be passed until next week. He agreed with Councilmember Buckshnis that the council also needed to approve the CIP/CFP which is attached to budget. He suggested doing that following this discussion. With regard to the interaction between the budget and the CIP/CFP, Mr. Taraday said there is no rule requiring one be approved before the other. They have to be consistent so if the council is aware of something in the budget that the council intends to add or remove from the CIP/CFP, a Edmonds City Council Approved Minutes December 11, 2023 Page 9 corresponding motion should be made during budget deliberations so when the council deliberates on the CIP/CFP, a matching motion can be made. He concluded the documents have to be consistent with each other, but there was no rule that the council has to adopt the CIP/CFP before adopting the budget; all that matters is they end up being consistent with one another. Councilmember Nand asked as part of the resolution adopting the budget, would it be appropriate to have a replenishment schedule for the contingency fund and the reserve fund into 2024 and beyond. She recognized forecasting and revenue shortfalls make that difficult, but anticipated it would give the council a measure of comfort if there was some estimate, goal or benchmark the council was trying to hit in 2024 and 2025 to get back to the 20% reserve. Mr. Turley answered he did not think it would be appropriate to include that in a budget ordinance. Only a certain number of schedules are required and things not required to be in the ordinance are not supposed to be added. He cautioned anything he included would just be his ideas and would not come from council and may result in further discussion and delay. He concluded if Councilmember Nand was asking his advice, he would not advise doing that. Councilmember Nand observed any replenishment schedule would need to be a separate item from the resolution adopting the 2024 budget. Mayor Pro Tem Tibbott advised Mr. Turley has already provided a replenishment schedule. Councilmember Chen said one of the budget items is met with the list of amendments from the December 5, 2023 meeting (agenda item 6. La) which includes moving $400,000 in capital maintenance from Fund 016 to the General Fund. He recalled after council discussion last week, it was postponed but has not been discussed this week. Mayor Pro Tem Tibbott said he was leaving it to Councilmember Nand to propose that again, but the intent was to have a full accounting before making that transfer so it could either be considered in 2024 or tonight. COUNCILMEMBER CHEN MOVED, SECONDED BY COUNCILMEMBER PAINE, TO REMOVE THE DECISION PACKAGE TO REIMBURSE THE GENERAL FUND FROM THE BUILDING MAINTENANCE FUND 016 IN THE AMOUNT OF $400,000. MOTION CARRIED UNANIMOUSLY. Council President Pro Tem Olson observed the 2023 budget included $3.4 million in interfund service charges. She asked if there were revenues projected for 2023 or have they been zeroed out. Mr. Turley answered there are revenues included in the total revenues that essentially equal the charges. Council President Pro Tem Olson summarized the revenues have been used in 2023 budget and there is no carryforward. Mr. Turley answered that is correct. Councilmember Buckshnis referred to the elephant in the room, noting according to Mr. Taraday the budget can be approved prior to approving the CIP/CFP. She asked whether the council intended to include $1 million in the 2024 budget for Landmark 99. A simple majority of council approved that so it cannot be ignored and needs to be included in the 2024 budget. She was unsure where it would be reflected in the CIP/CFP. The council cannot pass the budget or the CIP/CFP unless that is addressed. Mayor Pro Tem Tibbott suggested tabling adoption of the budget and the council turn their attention to the CIP/CFP and come back to the budget later tonight. Councilmember Nand asked if the source of the $1 million had been ascertained and whether it would hit in 2024. Mr. Taraday answered it would not hit in 2024. He assumed the council would take the full 15 months to determine whether to exercise the option and assuming that was accurate, there would not be a $1 million earnest money payment in 2024. There will be monies needed in 2024 to do the due diligence that has been discussed and that should be budgeted for and if that hasn't happened yet, it should. There has been discussion about using affordable housing funds for that, but if there is no appropriation for that now, presumably in 2024 there would not be funds available for due diligence unless and until the council makes that appropriation. It doesn't have to happen right now, but the council needs to understand the project cannot move forward with 2024 due diligence without an appropriation for that purpose. Edmonds City Council Approved Minutes December 11, 2023 Page 10 Councilmember Nand relayed her understanding it would be more appropriate for a future budget cycle discussion or possibly a mid -year amendment depending on if the council decides to exercise the option. Mr. Taraday encouraged the council to seek feedback from the directors involved in that due diligence effort as he was unsure when expenditures needed to be made. Councilmember Nand said her question was related to the $1 million earnest money, not the $300,000 for due diligence which she recalled the council had already voted on. With regard to the operating budget and the CIP/CFP lining up, Mr. Tatum said the Landmark has been placed in public works' CIP on page 141 of tonight's packet. Staff requested the decision package for operating funds be moved into the first quarter of 2024. The CIP/CFP currently includes $290,000 as discussed with council on December 5. As those funds were not currently included in the 2024 budget, he was unsure if they needed to be removed from the 2024 column of the CIP. With regard to when the funds will be needed, the focus through the end of 2023 and early 2024 will be on the RFP which he did not expect would require the use of consultants so there will be a bit of slack time when funds would not be used for consultants, due diligence or other costs. Therefore it would be okay to address the decision package in the early 2024. Mayor Pro Tern Tibbott relayed his understanding the council would not be entertaining any additional decision packages tonight for the budget as proposed and amended and decision packages related to projected expenditures for Landmark would be considered as amendments early in 2024. The council's sentiment during previous discussions was those funds would not be available from the General Fund and would have to be provided via grants and other sources to avoid any impact on the ending fund balance. He agreed the CIP/CFP needed to be amended to possibly include two amendments, remove the $290,000 projected for 2024 and add $1 million in 2025. He suggested the council may want to table approval of the 2024 budget and come back to it after the CIP/CFP discussion. Councilmember Buckshnis said she was very confused and found Mayor Pro Tern Tibbott's statement that nothing would be spent in 2024 for Landmark unreasonable. Mayor Pro Tem Tibbott relayed as Mr. Tatum said, staff does expect to spend money in 2024 on Landmark, but not out of the General Fund. Council sentiment was that no money would be spent out of the General Fund for that project; staff would have to identify grant funds or other sources, therefore the projected $290,000 could be removed from the 2024 CIP/CFP. He recommended tabling the budget to deal with the CIP/CFP first. Mayor Pro Tern Tibbott asked if councilmembers were interested in tabling the budget, discussing and approving the CIP/CFP, and then remove the budget from the table. Mr. Taraday advised there was no pending motion to approve budget so a motion to table was unnecessary. He suggested the council move onto the next agenda item and come back to the budget after considering the CIP/CFP. 2. ADOPT THE 2024-2029 CAPITAL FACILITIES PLAN & CAPITAL IMPROVEMENT PROGRAM COUNCIL PRESIDENT PRO TEM OLSON MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO REMOVE $290,000 IN 2024 ON PACKET PAGE 141, LANDMARK 99, AGENDA ITEM 6.2.A. Councilmember Paine preferred to have the $290,000 remain in 2024 as the source is grants and affordable and supportive taxes which is perfectly appropriate. She acknowledged it wasn't all sorted out, but $290,000 could easily be spent in 2024 on planning work so it is perfectly appropriate to include it and a mid -year amendment could also be done. Including $290,000 in the CIP/CFP seems to reflect the pace of work that needs to happen in 2024. She had no objection to adding $1 million in 2025 with grants and other funding Edmonds City Council Approved Minutes December 11, 2023 Page 11 to help round that out for 2025. She did not support the motion as she preferred to retain the $290,000 in the CIP/CFP because it is from restricted funding sources. Councilmember Chen said due to the uncertainty regarding the use of the $300,000 affordable housing taxes it was not appropriate to identify that as a funding source. He asked if there were other funding sources such as professional services that could be substituted. He noted a majority of the council approved moving forward so the due diligence needs to be funded. Mr. Tatum answered he was unsure the motion was not to fund it; the decision package in tonight's packet lacked detail that staff wants to provide with respect to the Supportive and Affordable Housing Tax Credit and specifically what it can fund. Staff believes that funding source is appropriate for a portion of the project. Staffs proposal was a budget amendment in the first quarter of 2024 that describes that for council. If the decision package is not included in the budget and not included in the CIP/CFP, then they are consistent with each other. Staff would present a CIP amendment and an operating budget amendment to council in the first quarter. Councilmember Chen said if that was the approach staff was taking, he was fine with it. Recognizing that CIP/CFP and the 2024 budget need to match, Council President Pro Tem Olson said she was objecting to retaining those funds in the CIP/CFP on that basis. She recalled in last week's conversations about Landmark, there was a consensus that General Funds would not be spent on Landmark and professional services are almost exclusively General Fund so that would not be acceptable. Councilmember Nand thanked Council President Pro Tern Olson for her deep dive on the budget. She did not feel it would be appropriate to include $1 million in 2025. Mayor Pro Tern Tibbott requested she address the motion. Councilmember Buckshnis agreed with Council President Pro Tern Olson, pointing out it has not been figured out if there will be affordable housing on the site and after reading the RCW, she agreed that funding source was not appropriate. The soft costs of directors and employees are already not included and she wanted to leave the expenditure at zero until the council figures out what to do next year. Mayor Pro Tern Tibbott restated the motion: AMEND THE CIP PACKET PAGE 141, PROJECT PWF-24, TO REMOVE $290,000 PREVIOUSLY BUDGETED IN 2024. UPON ROLL CALL, MOTION CARRIED (4-3), COUNCILMEMBERS CHEN AND BUCKSHNIS, COUNCIL PRESIDENT PRO TEM OLSON AND MAYOR PRO TEM TIBBOTT VOTING YES; COUNCILMEMBERS ECK, PAINE AND NAND VOTING NO. COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCIL PRESIDENT PRO TEM OLSON, TO ADD $1 MILLION TO PWF-24 REPRESENTING WHAT WILL BE NEEDED IF LANDMARK MOVES FORWARD. Councilmember Buckshnis explained a simple majority of council approved moving this forward for investigation so this needs to be added to the CIP/CFP in 2025 as well as adding $37million because the council cannot just speculate numbers when there are signed documents that say $1 million will be required in 15 month so it needs to be added to the CIP/CFP in 2025. Councilmember Nand spoke against the motion. What was bargained and signed was a 15 month period in which staff was authorized to spend up to $290,000 to explore the feasibility of exercising the option at the end of the 15 month period for $1 million. Potential funding partners, a funding source or whether the council will exercise the option and pay the $1 million in earnest money has not been ascertained so it would be premature to include the $1 million in the CIP/CFP. In addition it could be seen as obligating a future council. Edmonds City Council Approved Minutes December 11, 2023 Page 12 Councilmember Paine spoke in favor of adding $1 million to the CIP/CFP. If this project does not go forward, it would nullify the obligation. She did not see any harm in adding it and anticipated it would help with obtaining grant funds. If the $37 million needed to be added in the future, that can be considered in next year's CIP/CFP. Councilmember Chen expressed support for the motion. This deposit is part of the further exploration requirement in up to 15 months. If the council decides to continue, the $1 million deposit becomes part of the requirement so it needs to be budgeted. Council President Pro Tem Olson said she was not enthusiastic about going forward with this project, but the CIP/CFP is a planning document and if the council was thinking about moving forward, they should be thinking about the next steps and financial obligations so for that reason the $1 million should be included in 2025 because that will be required if the council decides to move forward. MOTION CARRIED (6-1), COUNCILMEMBER NAND VOTING NO. COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCIL PRESIDENT PRO TEM OLSON, TO ADD $36 MILLION TO 2026 FOR PWF-24. Councilmember Buckshnis said she was shocked that three people moved this forward and then a simple majority approved it on a wink and a dime. The council has to be realistic, if the $1 million is included in the CIP/CFP, the remaining $36 million needs to be included to total $37 million which is the off market price that has been negotiated. Councilmember Nand voiced her opposition to the motion. Including $37 million in 2026 would obfuscate the City's strategy in identifying a funding partner through an RFP process and assigning a majority of the payment to other partners and other funding sources. She did not think anyone who supported the project ever contemplated $37 million would come out of City funds. She feared this would promote more misinformation and more consternation in the public. Councilmember Chen voiced his opposition to the motion. The council has not gotten to the point where the 15 months are up and the council is committed to the next steps. He preferred to take one step at a time and the overall strategy is to find partners to develop the site. He did not support the City paying $37 million or even $27 million as that was not realistic and not this council's true intent. Council President Pro Tern Olson said she seconded the motion for discussion. She agreed this was probably premature as it was correct there has been discussion about having development partners and that the City would not be taking on the whole amount. She reiterated these are planning documents and it is reasonable to consider planning for this. She hoped the plan changes and the council does not move forward. She agreed with including $1 million in the CIP/CFP due to the imminent timeframe and if a majority of council wants to move forward, but she agreed with not including anything in 2026. Councilmember Eck said while she understood the benefit of having this documented in the CIP/CFP, it seems premature. As others have stated, she also has not consented to the City paying $37 million so she did not support the motion. Councilmember Buckshnis said she has been around for a long time and thank goodness she is retiring. She referred to the sewer plant where there are no signed documents, yet money is still being put away for it. There are signed documents for Landmark committing the City to $37 million. That signed document may or may not come to fruition but the CIP/CFP are planning documents and should include the $37 million Edmonds City Council Approved Minutes December 11, 2023 Page 13 because a simple majority of council approved signing them. Just like other public facilities, there are numbers assigned to them, some are realistic and some are not, and this is the most realistic of any of them. Mayor Pro Tern Tibbott asked Mr. Taraday to clarify what has been agreed to and how soon the other amounts need to be budgeted. Mr. Taraday responded the City has not committed itself to a $37 million purchase or even the $1 million earnest money. It is true it can be helpful to show the presence of a project in the CIP/CFP when seeking partners and grants. The presence of $1 million in 2025 makes sense from the standpoint of reflecting to the outside community that the council is seriously pursuing something, but there is no commitment to a $37 million purchase or even a $1 million earnest money payment. Considering that council has authorized staff to proceed with an RFP to seek funding partners, Councilmember Nand asked if it would be necessary to include $37 million in the CIP/CFP in 2026 to signal the seriousness of the City in pursuing development with potential funding partners. Mr. Tatum answered he would think not. There have been discussions about this being a partnership; $37 million is more than has been contemplated or discussed in staff s presentations. He did not think that would necessarily help or be an accurate representation of what the City is trying to do. Public Works Director Oscar Antillon referred to the previous motion that took $290,000 out of the CIP/CFP, pointed out in addition to being a planning document, the CIP/CFP is also a communication document to show what the City committed to and is a good place to show the full cost of a project. The $290,000 can remain as unsecured funding which is typically done in the last three years of the CIP/CFP. He anticipated the $1 million in 2025 is also unsecured funding because no one knows where that money is coming from. The CIP/CFP is ready to be approved with the changes made to Fund 016. UPON ROLL CALL, MOTION FAILED (1-6), COUNCILMEMBER BUCKSHNIS VOTING YES; COUNCILMEMBERS ECK, CHEN, PAINE AND NAND, COUNCIL PRESIDENT PRO TEM OLSON AND MAYOR PRO TEM TIBBOTT VOTING NO. COUNCILMEMBER BUCKSHNIS MOVED TO MOVE THE LIBRARY ROOF, PROJECT PWF- 23 ON PAGE 140, IN THE AMOUNT OF $4.9 MILLION UP TWO YEARS TO 2026. MOTION FAILED FOR LACK OF A SECONDED. COUNCILMEMBER CHEN MOVED, SECONDED BY COUNCILMEMBER NAND, TO PASS THE CIP/CFP AS AMENDED. UPON ROLL CALL, MOTION CARRIED (6-1), COUNCILMEMBERS ECK, CHEN, PAINE AND NAND, COUNCIL PRESIDENT PRO TEM OLSON AND MAYOR PRO TEM TIBBOTT VOTING YES; COUNCILMEMBER BUCKSHNIS VOTING NO. 2024 Budget Mayor Pro Tern Tibbott recalled there was a suggestion to approve the budget on consent, but it was his understanding there was still work to be done on the budget. Mr. Turley answered there was a lot of work to be done. One option would be to adopt the proposed budget tonight as amended. With regard to the suggestion to have the budget on the December 19 consent agenda, he explained there is a lot of work to be done to have a finalized budget that includes all the changes, reviewed and ready to present to council. He was unsure it would be ready on December 19 and likely would be a few days after that. Staff will try to have it ready but he couldn't promise. It takes 40-60 hours to get the budget complete, much of it done by one person at a time. If the budget is on consent, Councilmember Chen asked to have a few key pages in the budget book updated including the Strategic Outlook Revenue, Expenditure and Fund Balances on page 16, Strategic Outlook General Fund Fund Balances on page 17, 2024 Revenue Summary - All Funds on page 18, 2024 Expenditure Summary — All Funds on page 19, and 2024 Budget Summary — All Funds on page 20 so the council knows what they are approving. Without that, the council has some idea but it is better to see the Edmonds City Council Approved Minutes December 11, 2023 Page 14 full picture. He understood it would take a lot of time. Mayor Pro Tern Tibbott anticipated it would take more than a week to put that together. Mr. Turley answered the information Councilmember Chen referred to are pages that are not part of budget. The budget the council passes is typically one column of expenditures and one column of revenues. At Mr. Taraday's request, staff has added the final ending projected fund balance. It will take a week to get everything input into the system to provide that information. The schedules Councilmember Chen has asked to have updated usually take a month to do so it is not feasible to have the information completed in a week. Councilmember Chen asked if staff was using OpenGov. Mr. Turley answered even last year it took over a week to finalize the budget and another month to complete all the other schedules. OpenGov would not help. Mr. Taraday reminded when the council adopts the budget, it does so at the fund level and Mr. Turley is describing that fund level appropriation, the tables attached to the ordinance. That is the appropriation the council is making when adopting the budget. It is his understanding detailed conforming of the budget book to those tables usually gets completed in the beginning of the next year and it is not unusual for it to take the amount of time Mr. Turley has suggested is needed. The key piece for the council to understand is the amount appropriated for each fund and at his request, a column will be added that identifies ending fund balance on the table in the ordinance. That is the information the council would have had in prior years. COUNCILMEMBER PAINE MOVED TO ADOPT THE 2024 BUDGET WITH THE AMENDMENTS THAT COUNCIL HAS MADE. MOTION FAILED FOR LACK OF A SECOND. Councilmember Buckshnis said she needs more clarity before she votes on the budget. She recalled the council did receive an updated page 16 last year with the budget. She recommended not placing the budget on consent because she will pull it. Last year's budget ordinance outlined ARPA funding and ARPA schedules. She wanted to ensure the ARPA funds were designated in the General Fund for the fire contract. Mr. Taraday answered he was unsure what was done last year regarding the ARPA funds would be repeated this year because council direction has been to use the funds for one purpose. The ordinance was drafted that way last year because the allocation of ARPA funds was quite complicated and the intent was to lay it out clearly to keep track of it. Now that the decision has been made to pay the fire contract from the ARPA funds, he was not sure that needed to be included in the budget ordinance. Councilmember Buckshnis wanted it designated in the budget. Mr. Taraday answered the fund would be shown with the balance, the appropriation, and the ending fund balance. Councilmember Buckshnis asked if it was a requirement to designate it to a certain General Fund which is why the council passed the amendment specifying it be used to pay the fire service contract. Mr. Taraday clarified it is not being transferred to the General Fund. Councilmember Buckshnis said it was her impression it needed to be stated why the ARPA funds were being used for the fire contract as they could not be used for reserves. She relayed her understanding of Mr. Taraday's explanation that nothing would be included in the budget ordinance regarding the use of ARPA funds and suggested it may be advantageous to indicate how the remaining ARPA fund would be used. Mr. Taraday answered he would do whatever the council directs, his point was because there is no longer an intent to transfer ARPA funds into the General Fund, it is of less significance to state exactly how the money is being spent; one check will be written from the ARPA fund to the fire service provider. He can prepare an ordinance designating that if the council wishes, but it is not necessary from the standpoint of ARPA recordkeeping because the finance department will have the records showing the check written from the ARPA funds to the fire service provider which will provide a clear audit trail to establish how the funds were used. Councilmember Buckshnis pointed out there will need to be a determination prior to next week regarding whether a resolution regarding the use of the contingency reserve is needed. Mayor Pro Tem Tibbott agreed that was the remaining business for next week. Edmonds City Council Approved Minutes December 11, 2023 Page 15 Councilmember Nand pointed out $250,000 in ARPA funds were reserved to potentially provide small business grants. She relayed her respect for the work Mr. Turley and Ms. Dunscombe do, and did not want to push them to bring forward a work product they felt was unprofessional. She asked what the council could have next week to chew over and eventually adopt. Mayor Pro Tern Tibbott asked if the table on packet page 11 showing 2024 beginning fund balance, expenses, revenues and ending fund balance could be updated and available to council. Mr. Turley agreed that could be updated. Councilmember Nand asked if there would be additional special meetings beyond December 19. Mayor Pro Tern Tibbott answered based on the work done so far, the council could approve the budget and an ordinance on December 19. Councilmember Chen cautioned this has been an extraordinary budget year and he would not be comfortable approving the budget until he sees total revenues and total expenditures; page 11 is only the reconciliation of the General Fund which although important, is only one fund in the entire budget. He had full confidence and respected the hard work Mr. Turley and the entire department do, but he was not comfortable approving something before seeing the whole picture. Even if pages 16, 17 and 20 could be updated, that would give him some comfort before approving the budget. Mayor Pro Tern Tibbott asked if that was similar to what has been done in past years. Mr. Turley recalled the budget was passed on December 10 last year. He did not remember when it was approved on consent last year. What staff would bring back on consent is an ordinance that includes a page with the budget summary by fund and that has always been enough to satisfy the council. This year the document accompanying the budget ordinance will have four columns instead of two and will include the information related to revenues and expense and ending fund balance. The pages referenced by Councilmember Chen take a lot longer; everything else has to be done before the strategic outlook can be prepared. That is the last page prepared for the proposed budget as well as the adopted budget. He could not promise that would be ready in a week because it is usually a month's work especially around the holidays. He did not want to provide false expectations that the council would get schedules that it was not possible to prepare. Mayor Pro Tern Tibbott asked if the page Mr. Turley referred to that is attached to the budget was similar to packet page 9, Status of 2024 Decision Packages and amendments that have been approved. Mr. Turley answered that is not a fund, revenue or expense reconciliation. He referred to the sample budget ordinance on page 8 of the proposed budget that includes a budget summary by fund. Mayor Pro Tern Tibbott observed that would be revised to include columns with beginning and ending fund balances. Mayor Pro Tern Tibbott anticipated at next week's meeting there would be the 2024 budget ordinance that includes the 2024 budget summary by fund which would potentially be enough to approve the 2024 budget. Mr. Turley said staff will try to have it prepared by December 19, but there are staff out this week due to illness and vacation. It was not expected that the budget would be passed next week or the department would be fully staffed. He hesitated to promise it would be ready on December 19 as it could be later that week at a special meeting with just a consent agenda. In light of the fact that the budget summary by fund would not be available, Mayor Pro Tern Tibbott asked Mr. Taraday what he would suggest the council do next week. Mr. Taraday answered from his perspective the budget cannot be adopted until those pages are completed because that is the budget. He suggested Mayor Pro Tem. Tibbott confer with Mr. Turley as the week progresses to determine whether a special meeting needs to be scheduled next week or whether Tuesday, December 19 will be a realistic target for having the budget prepared. Edmonds City Council Approved Minutes December 11, 2023 Page 16 Mayor Pro Tem Tibbott referred to council approval of a resolution regarding the use of reserves and suggested a motion requesting Mr. Taraday prepare that resolution. Councilmember Nand referred to the Utility Interfund Loan to the General Fund and council's requests for more information and her interest in a public hearing and asked it if would be appropriate to add forecasting and structural changes to the budget that the council hasn't agreed on yet to the extended agenda for January. Mayor Pro Tem Tibbott said at this point it would be best to wait to make that determination in the first quarter of 2024. Council President Pro Tem Olson referred to the suggestion to adopt a resolution to give authority to continue using the reserve funds in 2024, commenting the first resolution was in response to the fiscal policy and dipping into the reserves and resulted in a replenishment plan. She did not understand why that would be required every budget year. Mr. Turley agreed with Council President Pro Tem Olson's statement, recalling he said if the council wanted to be consistent with what was done last year, there would be another resolution passed that essentially says the same thing. As he reads the policy, he did not think it had to be done every year, but he anticipated some councilmembers would be more comfortable if a resolution was passed. Council President Pro Tem Olson said the resolution does not mention it was for a specific year, just that the reserve funds were being spent and that there was a fiscal emergency which hasn't changed so she questioned why another resolution was required for 2024. Mr. Taraday said he did not have the policy in front of him and that was a fair question. In thinking about the purpose of the policy, having dipped into the reserves in 2023 and having authorized that by resolution, it is not the same decision to dip into them again in 2024. He could see from the standpoint of the purpose of the policy which was to ensure the council was making very intentional choices to dip into the reserve, it would fulfill the purpose of the policy to have the council adopt another resolution for the next fiscal year if the council chose to dip further into the reserves in adopting the 2024 budget. He offered to follow up with council by email if he concluded a resolution was not appropriate. COUNCIL PRESIDENT PRO TEM OLSON MOVED, SECONDED BY MAYOR PRO TEM TIBBOTT, IF A RESOLUTION FOR USING RESERVES IN 2024 IS DETERMINED TO BE A GOOD IDEA, IT WILL COME BACK IN THE PACKET ON CONSENT NEXT WEEK. Councilmember Nand asked if the resolution would include a clearly laid out replenishment schedule with the forecasted amounts; she was interested in more information on setting benchmarks for replenishment. Councilmember Buckshnis offered to clarify since she helped write the policy. The council already approved a resolution for use of the General Fund reserves and she believed another resolution was appropriate for use of the contingency reserve, but there are insufficient numbers to determine if use of the contingency reserve will be necessary. She suspected it will be necessary so that resolution may need to be prepared which this motion asks Mr. Taraday to do. With regard to replenishment, that should come to council every year in November, if not sooner. Mr. Turley provided a replenishment schedule that mirrored the projections in the strategic outlook. She recommended the council next year, with the new mayor, set standards related to the replenishment schedule and determine what committees and/or taskforces need to be established related to generating revenues such as a levy, RFA, etc. hi her opinion, the only resolution that was needed was related to use of the contingency reserve. Council President Pro Tem Olson restated the motion: IF THE RESERVE POLICY WOULD SUGGEST IT IS A GOOD IDEA TO HAVE A RESOLUTION THAT ALLOWS USE OF THE OPERATING RESERVES IN 2024, IT WILL COME BACK ON THE CONSENT AGENDA NEXT WEEK IF IT IS DETERMINED A NEW RESOLUTION IS NEEDED FOR 2024. Edmonds City Council Approved Minutes December 11, 2023 Page 17 Mr. Taraday said he now has the policy language in front of him and it confirms another resolution is appropriate. He read from the policy, "The amount of funds to be withdrawn from this committed fund balance shall be determined by the mayor. In his/her presentation to the council, the mayor or his/her designee shall include a detailed list of how the funds will be applied. A simple majority vote of the council shall be required to approve the amount and use of fund." Although not crystal clear, that language suggests it is not a once you approve it, it's all available for use. The council needs to approve each use of the funds which is why he recommends the council approve additional use of the funds to make the 2024 budget work. Councilmember Chen thanked Mr. Taraday for the clarification. He recalled in 2023 all the procedures were not followed. General reserves and contingency reserve had been used for several months, whether intentional or unintentional, and the reserve amount was below the requirement before the resolution was prepared to allow the administration to use the contingency reserve and the 16% reserve. Use of the contingency reserve did not happen, but council allowed use of the 16% reserve. Before the resolution was brought forward, that had been happening for months. He asked if doing that in 2023 was in violation of the policy. Mr. Taraday answered there is ambiguity in the policy regarding exactly when the permission to use operating reserves needs to be sought. If the council intends to use operating reserves in the adopted budget, it seemed not debatable that the council would expressly state their intent to use the operating reserve for the 2024 budget. Whether that needs to happen at other points throughout the year is debatable under the policy which was the reason for discussions about whether the policy was violated last year. The council is about to adopt the 2024 budget and that budget intends to use operating reserve funds to spend money in 2024 and it is not debatable that under this policy, that needed to be expressly stated when adopting the budget. MOTION CARRIED UNANIMOUSLY. (Councilmember Paine left the meeting at 8:31 pm.) Mayor Pro Tem Tibbott declared a brief recess. COMPREHENSIVE PLAN VISION STATEMENT REVIEW Council President Pro Tern Olson commented this has gotten a lot of eyes on it at this point which is what council was interested in, additional input from a lot of different sources, as well as honoring the original inputs. The version she is proposing takes into consideration and honors the ruminations by the planning board. The vision statement on packet page 322 is the best basis for the revised statement. She read the suggested wording: "Edmonds is a charming and welcoming city offering outstanding quality of life for all with vibrant and diverse neighborhoods, safe streets, parks, and a thriving arts scene shaped in a way to promote healthy lifestyles, climate resiliency, and access to the natural beauty of our community." Council President Pro Tern Olson explained she did not include "small town feel" because to some people, that had connotations they weren't interested in. Charming is related to the feeling people think about in a smaller town and was a big part of the feedback. With regard to the phrase, access to the natural beauty of our community, she recalled there was controversy in the past over a waterfront connector, and significant objections to that interfering with a protected natural space. If that project had been considered in the context of access to the natural beauty of the community, it may have been thought of differently. It also reflects the importance of the bridges in Yost Park to reach open spaces and view corridors that have always been a significant issue and one of the reasons people move to Edmonds. COUNCIL PRESIDENT PRO TEM OLSON MOVED, SECONDED BY COUNCILMEMBER CHEN, TO ADOPT THAT VISION STATEMENT ON PAGE 322 OF THE PACKET THAT CAME Edmonds City Council Approved Minutes December 11, 2023 Page 18 OUT OF THE PLANNING BOARD SUBCOMMITTEE WITH THE CHANGES SHE MADE THAT TRIED TO HONOR THE DISCUSSION THAT HAPPENED AFTERWARD AND WHAT WAS HEARD FROM THE COMMUNITY AND IS STILL CONSISTENT WITH THE ORIGINAL INPUTS. Councilmember Nand thanked Council President Pro Tem Olson for the excellent compromise given the passion and commitment that citizen activists and community members put forward on the vision statement. Ms. McLaughlin and the planning department's One Edmonds campaign has been a chance for the community to offer a statement on their values and identity as a collective Edmonds. Inserting "charm" and removing "small town feel" honors dueling perspectives. She has always thought of Edmonds as a collection of small towns in one jurisdiction, but Edmonds is definitely not a small town compared to Index which is an actual small town; but in reality Edmonds is one of the largest, densest cities in Snohomish County. People who come to Edmonds are often struck by the charm. The statement "access to the natural beauty of our community" reflects the ability of everyone to enjoy the waterfront and the views. Those are very important aspects that honor the desires of those who objected to the phrase "small town feel" to make the vision statement inclusive. She voiced her strong support of the changes. Councilmember Buckshnis wondered why the council wanted her to ask the youth commission about the revised vision statement when the intent was to approve the vision statement tonight. She still preferred to the original vision statement from the update but this was also fine. Councilmember Chen concur with what has been said, he also liked the compromise. Edmonds is charming and welcoming and everything that follows that. This is a good vision statement and he supports it. In response to Councilmember Buckshnis' comment, Council President Pro Tern Olson said it was youth input that suggested omitting "small town feel." If the proposal was to leave it in, it would be important for the youth commission to weigh in. If that is not the case, the youth commission's perspective wasn't a prerequisite. MOTION CARRIED UNANIMOUSLY. 7. MAYOR'S COMMENTS 8. COUNCIL COMMENTS Councilmember Eck acknowledged her start virtually has not been ideal. She was happy to report her test results mean she can be in person beginning next week. She appreciated the warm reception she received and hoped to get to normal councilmember status once she was in person. Councilmember Nand reported on sad note the body of the 23-year old Edmonds College student who went missing yesterday was found in Snohomish County and no foul play was suspected. She is an alumni of Edmonds College, but did not know this young man, and there has been no speculation regarding his cause of death. This is a very difficult time of year for a lot of people; it's dark, cold and rainy, relatives are in town, a lot of money is spent, and rushing to buy gifts and people can be sharp elbowed with each other due to the pressure they are under. Rather than making the bland statement to be kinder to each other, she encouraged anyone about to do something unkind, like cut someone off in traffic or make a nasty comment on social media, to think about the greater impact not doing something unkind could have and choose instead to extend an olive branch and put positive energy into the world. She expressed her condolences to the family of the young man, commenting the Edmonds College community will be mourning this holiday season. Edmonds City Council Approved Minutes December 11, 2023 Page 19 Councilmember Chen wished everyone a happy holiday season and to be safe. He will be traveling back to China to visit his family and take care of father's funeral so he will not be available December 14 through the end of the year. Internet access is not very convenient, so it's likely he won't be available. He wished everyone happy holidays and urged them to care of themselves, their family and their loved ones. Council President Pro Tem Olson hoped everyone has a wonderful evening. Councilmember Buckshnis announced the Packers lost tonight. She would do the 13 years she spent on the council over again because of all the scientists and intelligent people she has met. She received nice cards from WRIA 8 and Puget Sound partnership and a nice mug. The last few years have been very tough. The budget was a mess when she joined the council and it is a mess when she's leaving. She has built a good friendship base with a lot of people she would never have met otherwise. Like Councilmember Nand said, there are always sharp elbowed people. She has been called sharp elbowed, but it is because she is honest. As a former regulator, she know things and has to tell it like she sees it and it just the functionality of her life, language, and vocabulary. She hoped everyone was beginning to have a good holiday; she has been too busy with the budget and answering hundreds of emails. Mayor Pro Tern Tibbott commented the council has worked many hours trying to understand obligations and opportunities. While this is not his ideal budget, he was proud of the way the council dug in and found some budget cuts and stood on principle with regard to revenues. The council will have to roll up their sleeves in the first quarter, but they are prepared to do that and have worked on the budget long enough that they will be able to bring a lot of specificity to those discussions. He was proud of the council for the time they spent and the work they did. Recognizing that Councilmember Buckshnis will be retiring, he found her contribution extremely valuable and expressed his deep appreciation. Mayor Pro Tern Tibbott announced a meeting the Department of Ecology is hosting tomorrow at 6:30 pm in the Brackett Room to talk about the Unocal cleanup. Although usually during a time the council holds committee meetings, those have been rescheduled. 9. ADJOURNMENT With no further business, the Council meeting was adjourned at 8:57 pm. cs:� SCOTT PASSEY, CLERK Edmonds City Council Approved Minutes December 11, 2023 Page 20