11/12/1996 City Council1
7997 Budget
Revenue
Sources
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EDMONDS CITY COUNCIL APPROVED MINUTES
NOVEMBER 12, 1996
The Edmonds City Council meeting was called to order by Mayor Fahey at 7:03 p.m. in the Library
Plaza Room, 650 Main Street, followed by the flag salute.
ELECTED OFFICIALS PRESENT
Barbara Fahey, Mayor
Dave Earling, Council President
Roger Myers, Councilmember
John Nordquist, Councilmember
Dick Van Hollebeke, Councilmember
Jim White, Councilmember
ABSENT
Gary Haakenson, Councilmember
Tom Petruzzi, Councilmember
APPROVAL OF AGENDA
STAFF PRESENT
Paul Mar, Community Services Director
Brent Hunter, Personnel Manager
Art Housler, Administrative Services Director
Michael Springer, Fire Chief
Sandy Chase, City Clerk
Stephanie Goings, Recorder
COUNCILMEMBER VAN HOLLEBEKE MOVED, SECONDED BY COUNCILMEMBER
MYERS, FOR APPROVAL OF THE AGENDA. MOTION CARRIED.
1. FULL COUNCIL REVIEW
A. DISCUSSION OF REVENUE SOURCES
Art Housler, Administrative Services Director, utilized the overhead projector to illustrate how the
revenue sources were conservatively estimated for 1997. Mr. Housler informed the Council that in some
categories the estimation was downsized from the prior year. He pointed out the property tax makes up
about 36% of the General Fund budget, and sales tax comprises about 17%. The various taxes and
amounts expected for 1997 were outlined. Mr. Housler noted that without the increase in the property
tax and ambulance transport fee and other taxes, the increase to taxes as a whole would only be 2.2%.
Mr. Housler explained the property tax and demonstrated that in the past it had been projected correctly,
and that by reviewing the past years the City had been collecting 100% for the past two years and 99%
the two years prior. Mr. Housler felt that the City would collect all of the property taxes that had been
projected for 1996. Mayor Fahey pointed out that the reason the property tax revenue of 1996 was up
was due to the annexations and not an increase in property values. Mr. Housler reviewed the formulas
used to project the 1997 property tax revenue and the proposed increases in the regular property tax and
the EMS tax.
Edmonds City Council Approved Minutes
November 12, 1996
Page 1
The sales tax was discussed and Mr. Housler explained some of the difficulties with trying to project
accurately the future sales tax. Mr. Housler showed a chart that reflected all of the targeted sales tax
revenue for 1996 and the actual amount collected, with all of the different variances and changes on a
month by month basis. It was explained that by looking at the cumulative totals for the year so far, the
City was actually on track for the year. The various categories that make up the sales tax revenue were
reviewed as of January 1996 through October 1996. Councilmember Myers inquired about the
construction of the new Edmonds-Woodway High School and taxes that would be collected from that.
Mr. Housler stated that it had been looked at and only about 1% of the cost had been factored in to the
contracting sales tax for 1997. Councilmember Van Hollebeke asked if most of the construction tax
would be collected in 1998. Mr. Housler agreed that seemed to be the case.
Mr. Housler then reviewed the State Sales Tax Equalization and the formulas (given by the State) used to
determine the revenue for 1997. He also reviewed the amount budgeted for 1996 and some of the
changes that occurred in 1996 as a result of annexations, new cities and interpretation of the law. These
factors were involved in the City not collecting the amount originally projected for 1996.
Councilmember Earling inquired if Mr. Housler had an opportunity to talk with colleagues in other cities
about the legislature considering moving or using the motor vehicle excise tax. Mr. Housler stated that
at the Washington Finance Officer's Convention this year a resolution was passed to go to the
legislature. The AWC was also lobbying to keep the money the Cities have, and also to have the State
contribute more money to the pool.
Next, Mr. Housler discussed the Municipal Court revenues and stated this revenue source had been a
concern during the year. The targeted revenues had been adjusted down periodically throughout the year
and the revenue is currently $11,000 short of its projection. It may be possible that in the next couple of
months of the year this might pick up and bring it closer to the targeted amount. Council President
Earling asked how quickly all the numbers from Municipal Court revenues can be pulled together at the
end of the month. Mr. Housler stated that it would be possible to have the numbers by the 8th to the loth
of the month. Council President Earling asked for a memo to Council as quickly as the numbers are
available for November and December.
Mr. Housler showed a new chart reflecting calls for the Fire District and presented the assumptions being
used in calculating the cost for the Fire District and that a conservative approach had been used.
Councilmember Myers inquired as to why the estimation on Chart 2 for Licenses & Permits was so low.
Mr. Housler stated that he relied on Rob Chave, Planning Manager, and Jeff Wilson, Current Planning
Supervisor, to develop this number. It was based on the amount of projects that were being considered
and on the drawing board right now.
Mr. Housler reviewed some of the initiatives that have been proposed and how they could possibly effect
the City's revenue projections for 1997.
Council President Earling clarified with Mr. Housler that the property tax revenue was based on 106%
tax but it was not reflecting any retroactive tax that the City could go back and legitimately collect. Mr.
Housler agreed with this statement. Mayor Fahey informed the Council that she had previously stated
that a City could only go back 2 years for collecting the retroactive portion of tax, but in fact there is no
time limit. Mr. Housler stated that the legislature had changed the law.
Edmonds City Council Approved Minutes
November 12, 1996
Page 2
Councilmember Myers inquired about gambling taxes -and the effect of the Indian Reservations'
gambling. Mr. Housler stated that over the past couple of years the gambling tax had stayed flat. He was
not aware of the reason for this; but it was possible that the little .local business were being affected by
the reservation gambling.
B. FIRE APPARATUS REPLACEMENT OPTIONS
Fire
Apparatus
Replacement Fire Chief Springer thanked the Council for the opportunity to present the findings of a task force which
options was created to help research and find ways for the Fire Department to obtain new fire apparatus in the
future. He introduced the members of the task force: Assistant Fire Chief Tim Whitman, Fire Mechanic
Dave Sittauer, Fire Lieutenant Steve Allison and Firefighter Joe Soucy. Chief Springer reviewed prior
planning options for purchasing of fire apparatus. The task force looked at the Department's current
replacement needs time frame; how long do you keep fire apparatus, a ladder truck, an aid car, before
they are non-functional. Fire Mechanic Dave Sittauer helped by taking a hard look at all the current
apparatus, and started replacing items (i.e.- maintenance on current vehicles) before they break. He also
did an analysis of the length or life expectancy of current apparatus. It was found that the length of use
for an aid car could be increased from 7 years to 10 years, the 30-year replacement for a ladder truck was
firm, and 25-year replacement of the fire engine is stretching it but by having a dedicated mechanic it
was possible.
Chief Springer stated that in past years, local municipalities had looked at bond issues as well as the
federal government for help with replacing fire apparatus. This was the way the original ladder truck had
been purchased. There are no longer any federal government moneys to help with the replacement of
fire apparatus. The task force did find a new option available - lease option with a residual payment or
lease -purchase options. Chief Springer presented an overhead spreadsheet to the Council and reviewed it
step-by-step, vehicle by vehicle. Chief Springer explained the cost breakdown for each replacement
vehicle which the task force had determined was current market value. He then outlined the bond issue
versus lease -purchase of the vehicles and a comparison of costs. Chief Springer stated that the lease
purchase looked extremely promising to the task force and Fire Department as a good way to acquire
replacement apparatus.
Council President Earling asked how long the City had been setting aside $100,000 a year for the
replacement ladder truck.: Chief Springer responded that it had been 4 years. Council President Earling
pointed out a concern that once the Council begins contributing to something it is assumed (and shown in
the flow chart) that it will continue forever, and it assumes that the contribution will step up to $150,000
.in the year 2000. Council President Earling stated that this money was to be for a single item purchase,
and as represented by the flowchart, the funding continues. He commented this issue provides a very
fundamental question of does the Council want to continue doing this forever.
Councilmember Myers inquired about line 6, Ford -type aid vehicle. The purchase price in 1994 was
$88,000 and it is anticipated that it only goes up by $7,000 in 10 years. Chief Springer stated that was
correct because once a unit type is developed and accepted in the market there is not a large increase in
costs. Dave Sittauer, Fire Mechanic, stated that this was the information given to the task force by the
manufacturer.
Chief Springer stated that the task force did work with the Finance Department to develop the
spreadsheet to make sure it was accurate. They also looked at a 10-year time frame for replacing
vehicles. Chief Springer outlined the cost comparison of bond versus lease purchase for a 10-year time
Edmonds City Council Approved Minutes
November 12, 1996
Page 3
frame and stated that it was felt that the interest paid over that period would be less with the lease -
purchase option.
Council President Earling stated that the lease -purchase option would require, over the next 10 years,
$1.5 Million from the General Fund as well as the $400,000 that has already been set aside. Chief
Springer agreed that this was correct.
Councilmember Myers asked if there were other municipalities that had already done this. Fire
Lieutenant Allison stated that the samples in the back of the book were actual municipalities that had
participated in the program. Council President Earling stated that it would be helpful for the Council to
have a sample of the cities from the Northwest that have participated in the program so they can do some
research. Fire Lieutenant Allison stated that they would provide the Council with that information.
Councilmember Van Hollebeke inquired about the interest rate for the lease option at 4.481%, which
seems like an aggressively low interest rate. Had any leasing agencies been contacted? Lieutenant
Allison stated that the task force had been in contact with an agency and recently the rates had changed,
that they had gone down by .02% with the best option plan. Councilmember Van Hollebeke asked if this
company had been providing lease purchase of fire apparatus for a long period of time. Lieutenant
Allison informed the Council the company had been providing this service for about a year and a half.
Council President Earling asked how quickly the task force could get the information requested to
Council. Lieutenant Allison informed the Council they could get the information to them in a week to 10
days. Council President Earling thanked the members of the task force for their effort and time they had
taken to provide this information to the Council.
Mayor Fahey closed the full Council meeting at 8:12 p.m. and adjourned to committee work meetings.
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BARBARA S. FAHEY, MAYOR
SANDRA S. CHASE, CITY CLERK
Edmonds City Council Approved Minutes
November 12, 1996
Page 4
47
Y AGENDA
_." r.,:9: EDMONDS CITY COUNCIL
Plaza Meeting Room - Library Building
650 Main Street
-7:00 -10:00 p.m.
NOVEMBER 12,1996
COMMITTEE WORK MEETING
(Second Tuesday of Each Month)
The three City Council committee meetings are work sessions for the City Council and staff only. The meetings are open to
the public but are not public hearings. The Council will first meet together as a full Council, and will then meet separately as
committees in different meeting rooms as indicated below.
CALL TO ORDER - 7:00 P.M.
FLAG SALUTE
1. FULL COUNCIL REVIEW
Large Plaza Meeting Room, Library Building
(A) (60 Muir.) DISCUSSION OF REVENUE SOURCES
(B) (30 Mna.) FIRE APPARATUS REPLACEMENT OPTIONS
ADJOURN TO COMMITTEE MEETINGS
2. PUBLIC SAFETY COMMITTEE
Small Plaza Meeting Room, Library Building
(A) (15 Mua.) REVIEW OF DARE PROGRAM
3. COMMUNITY SERVICES COMMITTEE
Large Plaza Meeting Room, Library Building
(A) (30 Min.) DISCUSSION OF SUGGESTED CODE CHANGES FOR BUSINESS AND COMMERCIAL ZONES
(B) (20 Min.) PROPOSAL FOR USE OF CITY FACILITIES BY ARTS GROUP
(C) (15 Min) PROPOSAL BY PACIFIC LITTLE LEAGUE
4. FINANCE COMMITTEE
Anderson Center, 700 Main Street, Room 113
(A) (5 Min.) APPROVAL OF PETTY CASH EXPENDITURES FOR THE MONTH OF OCTOBER 1996
Parking and meeting rooms are accessible for persons with disabilities. Contact the City Clerk at 771-0245 with 24 hours advance notice
for special accommodations. The Council Agenda appears on Chambers Cable, Channel 32. This meeting is Iml televised.