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10/08/2002 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES October 8, 2002 Following a Special Meeting at 6:00 p.m. for Finance and Community Services/Development Services Committee meetings, the Edmonds City Council meeting was called to order at 7:11 p.m. by Mayor Haakenson in the Council Chambers, 250 5b Avenue North, Edmonds. The meeting was opened with the flag salute. ELECTED OFFICIALS PRESENT Gary Haakenson, Mayor Dave Earling, Council President Jeff Wilson, Councilmember Lora Petso, Councilmember Dave Orvis, Councilmember Richard Marin, Councilmember Deanna Dawson, Councilmember ELECTED OFFICIALS ABSENT Michael Plunkett, Councilmember 1. APPROVAL OF AGENDA STAFF PRESENT David Stern, Chief of Police Duane Bowman, Development Serv. Director Stephen Clifton, Community Services Director Peggy Hetzler, Administrative Services Director Arvilla Ohlde, Parks and Recreation Director Rob Chave, Planning Manager Don Fiene, Assistant City Engineer Frances Chapin, Cultural Resources Coordinator Scott Snyder, City Attorney Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder Mayor Haakenson advised staff requested Consent Agenda Item E be pulled from the Consent Agenda. Change to Benda COUNCIL PRESIDENT EARLING MOVED, SECONDED BY COUNCILMEMBER MARIN, FOR APPROVAL OF THE AGENDA WITH THE DELETION OF CONSENT AGENDA ITEM E (AUTHORIZATION FOR MAYOR TO SIGN PROFESSIONAL SERVICES AGREEMENT WITH BJY NORTHWEST FOR ON-CALL UNIFORM BUILDING AND FIRE CODE REVIEW SERVICES). MOTION CARRIED UNANIMOUSLY. 2. CONSENT AGENDA ITEMS COUNCILMEMBER MARIN MOVED, SECONDED BY COUNCILMEMBER ORVIS, FOR APPROVAL OF THE CONSENT AGENDA AS AMENDED. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: Approve (A) ROLL CALL 10/01/02 Minutes (B) APPROVAL OF CITY COUNCIL MEETING MINUTES OF OCTOBER 1, 2002 rve(C) APPROVAL OF CLAIM CHECKS #58279 THROUGH #58423 FOR THE WEEK OF SEPTEMBER 30, 2002, IN THE AMOUNT OF $328,841.37 APPROVAL OF PAYROLL DIRECT DEPOSITS AND CHECKS #34102 THROUGH #34206 FOR THE PERIOD SEPTEMBER 16 THROUGH SEPTEMBER 30, 2002, IN THE AMOUNT OF $736,572.24. Edmonds City Council Approved Minutes October 8, 2002 Page 1 sutakawa Sculpture (D) AUTHORIZATION FOR MAYOR TO SIGN INTERLOCAL OPERATING AGREEMENT BETWEEN SOUND TRANSIT AND THE CITY OF EDMONDS REGARDING FUNDING CONTRIBUTIONS FOR TSUTAKAWA SCULPTURE Withdraw from the Table: Revised COUNCILMEMBER MARIN MOVED, SECONDED BY COUNCILMEMBER DAWSON, TO Process and WITHDRAW FROM THE TABLE THE RECOMMENDATION OF THE PLANNING BOARD TO Guidelines APPROVE PROPOSED AMENDMENTS TO TITLE 20 (CHAPTERS 20.10 — 2014, AND 20.60) OF or Archi- THE EDMONDS COMMUNITY DEVELOPMENT CODE IN ORDER TO ESTABLISH A ectural REVISED PROCESS AND GUIDELINES FOR ARCHITECTURAL DESIGN REVIEW (File Nos. Design Review CDC -00-153 and CDC -01-27), AND SET A DATE AS EARLY AS POSSIBLE FOR DISCUSSION OF THAT MATTER. MOTION CARRIED UNANIMOUSLY. Council President Earling scheduled this item for the October 29 Council meeting. As the item was tabled with no explanation to the Planning Department or public, he requested Councilmembers be prepared to outline their questions/concerns at the meeting. 3. APPROVAL OF EDMONDS PUBLIC FACILITIES DISTRICT (PFD) BUSINESS PLAN, AND Edmonds RELEASE OF TWO MILLION DOLLAR CONTRIBUTION FROM THE 1sT QUARTER Public PERCENT REAL ESTATE EXCISE TAX (REET) TO THE EDMONDS CENTRE FOR THE Facilities ARTS PROJECT. THE IST QUARTER PERCENT REET IS DEDICATED TO THE District ACQUISITION AND PURCHASE OF PARK AND CULTURAL CAPITAL PROJECTS THROUGH CITY COUNCIL DIRECTIVE. Community Services Director Stephen Clifton (liaison between the City and the Edmonds Public Facilities District Board) displayed a photograph of the future Edmonds Centre for the Arts and explained the Board was seeking the Council's approval of the Business Plan and release of a $2 million contribution from the l st quarter Real Estate Excise Tax (REET) to the Edmonds Centre for the Arts. He advised the members of the Edmonds Public Facilities District (PFD) Board as well as their consultants Kjris Lund, Lund Consulting; Sherrill Myers, LMN Architects; and Jennifer Hatch, Kymera Industries, were present to address the Council and answer questions. Kjris Lund, Project Manager, commented on the current economic situation, noting that when the Council established the contingency requirements earlier this year for the PFD to address, the Council was mindful of the challenging economic climate. The PFD analysis and response to those issues required the PFD to be conservative with regard to this project and consider worst case scenarios. She assured the PFD was mindful of economic conditions and have considered how this project fits into a difficult economic climate. She pointed out this project would bring revenue to Edmonds that would not be available otherwise via the dedicated funds for the Edmonds PFD sales tax rebate from the state sales tax as well as the funding from the Snohomish County PFD. Further, the project will include private contributions that would otherwise not be provided. She noted the project was not seeking General Fund support from the City. Ms. Lund pointed out a correction to the capital source summary in a memo from the PFD regarding the project, correcting the amount of Edmonds sales tax from $2,615,000 to $2,558,877. She noted this did not change any other figures in the summary. Ms. Lund explained when the project was complete, it would be an asset with a value of at least $16 million. The project includes the purchase of the Puget Sound Christian College (PSCC) and renovating Edmonds City Council Approved Minutes October 8, 2002 Page 2 the auditorium, music building, and south gymnasium. The renovations will include seismic and ADA retrofitting, new lobby, increased lobby spaces, new toilets, improved sight lines, improved acoustics in the auditorium, improvements to back of the house, equipment upgrades, new HVAC system and electrical power, cosmetic improvements, power and data upgrades to meeting spaces, new landscaped surface parking for 90 vehicles not currently available at the site, and new seating in the orchestra level. She reviewed the following key assumptions outlined in the memo and Business Plan: • The Purchase price will not exceed $4,050,000. • The Edmonds PFD will immediately set aside $500,000 in a cash reserve dedicated to protect against future operating deficits. • Operating deficits will be minimized by following the guidelines within the Business Plan such as achieving operating efficiencies through cooperative purchase arrangements with the City. • The City will issue and guarantee bonds for this project with the recommendation of the City Finance Director, based on projected conservative cash flows for dedicated Edmonds and Snohomish County PFD revenue sources. • Until the bonds are paid off, the Edmonds PFD and the City will hold title to the property jointly. • Bonds will be issued in fall of 2002 during a time of favorable interest rates. • The City will release the $2 million in REET funds previously pledged for this project. • The Edmonds PFD will commence fund raising activities upon approval of the Interlocal Agreement. • The Edmonds PFD will obtain all necessary permits and development approvals. • This project will include 90 new parking spaces currently not available on the site. • The project does not anticipate any height increases from buildings currently on the site. • Current building tenants will be retained to the extent they are interested. • Tenants, arts organizations and neighborhood groups will be consulted during the architectural design process. Ms. Lund reviewed a summary of the cost of the project including $4,050,000 for acquisition, $6.8 million for renovation and site work, $795,000 for hazardous material cleanup, and $3.8 million for soft costs such as taxes, permit fees, etc. She pointed out the City would benefit from sales tax paid on the purchase of construction materials as well as the taxes paid on the purchase and sale of the building. She explained approximately $850,000 had been removed from the cost of the project for theatrical systems, lighting, sound system, and associated soft costs because the PFD had only approximately half the amount necessary to fund these items. The PFD will prioritize these expenses to fit within the budget as the project proceeds. Ms. Lund explained one of the key assumptions was management of risks associated with such a project, managing the capital budget and the operating budget. With regard to managing the risk of construction, the cost estimates include the following assumptions: payment of prevailing union wages, 15% estimating error, reserve for hazardous materials, project can be phased if fund raising is not as timely or successful as envisioned, and bond debt payments and cash flow will be conservatively managed by the City. With regard to the operating budget, the PFD will obtain funding via rents and leases as well as concessions and fundraising. Further, a reserve will be established to cover any operating deficit. In response to a concern that has been expressed regarding what the PFD would do if the worst case scenario were realized and the operating deficit in the first year was higher than expected, Ms. Lund explained benchmarks and targets would be established to track variances from the budget. In this manner, if the worst happened, a "time out" would be taken to consider changes in operations, lease structure, and increased fund raising. Edmonds City Council Approved Minutes October 8, 2002 Page 3 Ms. Lund summarized that although this report was primarily about money, this was a facility for the arts. A performing arts facility was a place for the community to gather and the City had an opportunity via this project to make that happen here. She concluded the Business Plan found this project was viable if risks were managed well through the course of the project. Councilmember Petso asked whether the $2 million in REET funds were restricted to use for parks by law or by Council policy. Administrative Services Director Peggy Hetzler answered the parks restriction was imposed by the Council. Councilmember Petso observed if the Council approved these funds, it was one less option for addressing the budget shortfall. Ms. Hetzler answered the budget shortfall was not capital costs but operating costs. She explained the REET funds that would provide this contribution to the PFD were restricted to capital by State law, only the dedication to parks capital projects was a Council policy. Councilmember Petso asked whether the City would own the facility when the bonds were paid off. City Attorney Scott Snyder answered the assumption in the Business Plan was that the City would hold title when the bonds were paid off but this would be addressed in the Interlocal Agreement, a four -party agreement between the City, Snohomish County, Snohomish County PFD and Edmonds PFD. He clarified this was an assumption in the Business Plan that the Council was being asked to approve, that the City ultimately would own the property. Councilmember Dawson observed the Council was not being asked to guarantee operating and maintenance deficits. Ms. Lund agreed. Councilmember Dawson noted the $2 million in REET funds could only be used for capital projects and could not be used for Police, Fire, etc. and the Council was not being asked to use any General Fund monies for this project. Ms. Lund agreed. Councilmember Dawson inquired about the projected amount of operating and maintenance cost for the facility per year. Jennifer Hatch, Kymera Industries, answered the operating cost per year was approximately $600,0004700,000 which was offset by revenue with a deficit of approximately $130,000 in year three and $20,000430,000 in remaining years. Councilmember Dawson asked what happened in year one, two or three if it was determined the project did not work whether because of lack of tenants, fund raising, more hazardous materials clean-up, etc., particularly in view of the City guaranteeing the bonds. Ms. Lund answered in the worst case scenario, the City would still have an asset that could be sold, noting there were Comprehensive Plan and/or zoning changes that could increase the resale value. Mr. Snyder suggested the City's bond counsel advise the Council regarding the current position of Snohomish County PFD in the event of abandonment. Lee Voorhees, Foster Pepper & Shefelman, explained last week, the City Attorney and he attended a meeting with representatives of the four parties to the Interlocal Agreement. At that time there was not a Business Plan available such as was provided to the Council tonight, only two sets of financial information, one that showed $6.8 million in bonds issued and another with $7.3 million in bonds. The parties also had a draft Interlocal Agreement. His understanding from that meeting was that if there were capital shortfalls in funding to complete the project, the City might be looked to as an obvious source for those funds. Further, it was indicated that the City might be looked to assist with operating deficits for the facility beyond the first year. He clarified the Interlocal Agreement did not state this but it was not clearly provided in the documents regarding what financial responsibility the parties would have other than the two PFDs would agree that the cash flow from the sales and use tax would come to the issuer of the bonds and used for debt service. In the Interlocal Agreement in its present form, it has not been agreed who will issue the bonds. Edmonds City Council Approved Minutes October 8, 2002 Page 4 Mr. Voorhees explained the Interlocal Agreement was a lengthy, complex document. In order to become effective, it must be approved by the legislative bodies for four local governments including the City Council, Snohomish County Council, and two PFD boards. He pointed out the likelihood that the Interlocal Agreement would not be finalized in a mutually agreeable manner and approved by the four legislative bodies prior to October 31, 2002. Councilmember Dawson asked what would happen if the project were abandoned. Mr. Voorhees answered it was unknown although it may be understood that the Edmonds PFD and the City would jointly own the facility but the Interlocal Agreement was not definitive with regard to that point. He cautioned the Interlocal Agreement must be in a format ready for approval without reservation, condition, or qualification by the four bodies to avoid returning the Interlocal Agreement to the other partners to the agreement. Mr. Snyder explained another piece of value to the Council would be the Snohomish County PFD'S position regarding guarantees and what would occur in the event of abandonment. Mr. Snyder explained that following the meeting Mr. Voorhees referred to, the attorney for the Snohomish County PFD contacted him to clarify Snohomish County PFD's position. Mr. Snyder noted the parties to this Interlocal Agreement were provided with Lynnwood's agreement which did not provide for any guarantee; Lynnwood's obligation was limited to the value of their tax contributions, an income stream obligation. In Lynnwood's case, that income stream fully supports the proposed project and in the Edmonds PFD case, approximately half the funds are anticipated to be raised via contributions or grant funds. For that reason, Snohomish County PFD requested, 1) the City would be obligated to guarantee or issue the bonds but did not require the City guarantee any operating deficits, and 2) in the event the project was abandoned by the City and/or PFD, the Snohomish County PFD funds would be repaid first and the City would be obligated to process an application to rezone the property to its highest and best use. He emphasized this was only a processing obligation and would not limit the Council's quasi judicial or legislative judgment in the review of an application. Mr. Snyder pointed out an asset was being purchased for $4.05 million and the Business Plan assumes two parcels would be sold for approximately $1.75 million, leaving the value of the asset prior to construction of slightly under $3 million. He summarized the remaining asset would be valued at approximately $3 million with a $6 million obligation. Ms. Lund pointed out the Interlocal Agreement was not before the Council tonight and the assumptions in the Business Plan would be addressed in the Interlocal Agreement. With regard to what would occur in the event of abandonment, she noted there were many ways to answer that question including Mr. Snyder's response but consideration must also be given to the value of the improvements made to the building. She did not envision the City having a bond obligation that did not have sufficient assets to back it up. She noted the PFD planned a facility that matched the bond amount the City was guaranteeing (a $6 million facility), but the Snohomish County PFD wanted a facility of a caliber that required private fund raising (a $16 million facility). The result was planning for a phased $16 million facility to ensure the PFD was not committed to a $16 million facility without adequate funding. Councilmember Dawson asked how and to whom the buildings on the site would be sold. Ms. Lund answered there would be a public process to sell the land as required under the City's purchasing laws. She noted the parcels were the Anchor House which is an apartment building, and the library building. Development Services Director Duane Bowman advised the library was zoned Public Use and the Anchor House was zoned multifamily. Councilmember Dawson asked whether there was a buyer for those parcels. Mr. Snyder answered the PFD had not yet purchased the property. He advised there were no active negotiations regarding the sale Edmonds City Council Approved Minutes October 8, 2002 Page 5 of those parcels although the Board had received some expression of interest. Ms. Lund advised the Business Plan showed the sale of those properties in 2003. Councilmember Dawson asked how the $1.75 million amount was determined. Ms. Lund answered it was based on the appraised value. Councilmember Dawson asked the total appraised value of the property. Mr. Snyder answered $4 million for the raw land value after demolition. He clarified his earlier answer regarding what would happen if the project were abandoned was based on the value of the property based on its highest and best use for development purposes as raw land versus Ms. Lund's reference to the added value of the improvements. Councilmember Dawson noted if $6 million in bonds were issued, more would be required to pay off the bonds. Ms. Lund answered there were no costs related to the repayment of the bonds that had not been factored into the budget; the cash flow in the budget was adequate to cover interest and principle payments. She noted there were also funds budgeted to pay for the debt issuance. Councilmember Dawson referred to the indication that the PFD would continue with existing tenants, inquiring who those tenants were. Ms. Lund referred to pages 14-15 of the Business Plan which listed organizations that were surveyed, some of whom were currently using the facility and others who expressed interest in using the facility. She noted agreements had not been finalized with any entities as the PFD did not yet own the building and existing tenants were on a month-to-month lease with PSCC. Councilmember Dawson asked whether the Community Christian Fellowship Church would continue as a tenant. Ms. Lund answered the Business Plan assumed they would stay until the facility became operational and attempts would be made to accommodate their use during renovation. Their continued use would not be the same in the new facility as they currently use the facility for office space as well as meetings on Sundays. Councilmember Dawson recalled Mr. Snyder indicated the Snohomish County PFD requested the City guarantee or issue the bonds and inquired what the difference was with regard to cost and risk. Mr. Voorhees answered the financial risks to the City would be comparable in either case. He noted the Edmonds PFD was a new entity and had never borrowed money in the public marketplace. If the Edmonds PFD undertook the issuance of bonds payable with the same sales and use tax cash flow, they would pay a higher interest rate. However, Edmonds has a good rating and frequently issues Limited Tax General Obligation (LTGO) bonds and a $6-7 million LTGO bond issue would be routinely accepted. The obligation to repay the bonds would lie with the City and although they would be repaid with anticipated repayment sources, if for any reason those repayment sources were inadequate, the City would be required to repay the bonds from any available funding source, not as the guarantor but as the issuer of the bonds. Councilmember Dawson observed that as long as the funds were available from the PFD sales tax rebate, there should never be a need for the City to tap into its own revenue sources. Mr. Voorhees answered if those revenue streams showed that adequate revenue was available to cover the bonds and those projections were realized, there would be no risk to the City. Councilmember Dawson inquired about Mr. Snyder's indication that the City would be obligated to process an application. Mr. Snyder explained that was Snohomish County PFD attorney's indication of their position (although Snohomish County PFD has not yet taken an official position). He explained the requirement would be for the City to process the applications necessary to rezone the property to its highest and best use. The highest and best use may not be for a performing arts center but rather for a Edmonds City Council Approved Minutes October 8, 2002 Page 6 multifamily development. The Snohomish County PFD was seeking a commitment from the City to process the application, not take any specific action. He noted the .City could not contract away its quasi judicial or legislative discretion in making a final determination. Councilmember Dawson acknowledged the Council was not being asked to approve the Interlocal Agreement tonight, only look at the Business Plan and to determine whether it was a realistic plan or not. Ms. Lund agreed, noting the Council was also to consider whether the PFD had responded to the contingencies posed by the Council. Councilmember Dawson observed the Council was also being asked to release $2 million in REET. Ms. Lund agreed, noting that would be contingent on approval of the Interlocal Agreement. Councilmember Dawson emphasized the City was not being asked to guarantee operating and maintenance funds. She thanked Ms. Lund for addressing her concerns and for considering the project in a realistic manner. Mr. Snyder observed that although the final Interlocal Agreement had not yet been drafted, it was important to note that the Business Plan assumed the City would issue the bonds to provide the best interest rate and the lowest cost. He explained most of the Interlocal Agreement was ritual — indemnity clauses, description of process, etc. He pointed out the Interlocal Agreement did not require the City guarantee operating deficits. The major items yet to be determined in negotiations were what would occur in the event of abandonment and how the assets would be allocated. Councilmember Dawson asked whether the sale of the Anchor House and library would require approval of the City Council as the City was a joint owner of the property. Mr. Snyder answered if the Council wished to have that included in the Interlocal Agreement, the Council should indicate it as a condition for inclusion in the Interlocal Agreement. He explained the buildings are assumed to be an asset that would be sold and the Business Plan would be $1.75 million short if the assets were not sold. Councilmember Dawson said not selling the buildings was not her concern but to whom and for what purpose the buildings might be sold concerned her. Mr. Snyder noted that would be an appropriate condition to put on the Council's approval tonight. Ms. Lund advised Snohomish County Councilmember Gary Nelson had been helpful to the Edmonds PFD and was working on the Interlocal Agreement to ensure it was completed in a timely manner. Councilmember Petso asked if the Council approved the Business Plan but made the sale of the property subject to Council approval, would the Council reserve discretion to deny the approval for any reason such as if the fund raising was very successful and the property did not need to be sold and could be used for another purpose. She asked whether the Council had the ability to make that change in the future or whether approval was a commitment to sell those parcels. Mr. Snyder explained the Business Plan assumed the sale of the property at the projected price; the mechanism for defining the operation of the property would be the Interlocal Agreement. Mayor Haakenson opened the public participation portion of this item. Steve Hanson, 4910 1515` Street SW, Edmonds, Vice President for Instruction, Edmonds Community College, advised the College President, Jack Oharah, was unable to attend tonight but has directed Rick Atcher, Dean for Humanities and Social Sciences, and him to develop a 5 -year plan for the arts which could include this facility. He advised Edmonds Community College would be a willing partner in productions at the facility. The College has used the facility in the past and would be interested in doing productions in a first class facility. Edmonds City Council Approved Minutes October 8, 2002 Page 7 Darlene McLellan, 22615 92"d Avenue W, Edmonds, noted that while plans progress for the reality of a larger population and the needs of that population, the arts are what set the community apart and bring people to the City for its quality of life. She emphasized the funding that was being requested was available only for capital projects and was dedicated for the acquisition of park capital projects and did not divert funds from essential City services. She noted this location as a performing arts center was listed as a purchase recommendation in the adopted Edmonds Comprehensive Park Plan and the Citywide Comprehensive Plan. The project would also save a historic structure for future generations. She encouraged the Council to approve the Business Plan and provide the 1" quarter REET in the amount of $2 million for the economic and artistic growth of the community. COUNCIL PRESIDENT EARLING MOVED, SECONDED BY COUNCILMEMBER MARIN, TO EXTEND THIS ITEM FOR 30 MINUTES. MOTION CARRIED UNANIMOUSLY. Rick Steves, 9708 Wharf Street, Edmonds, a business person in Edmonds and a longtime resident, explained he has been giving lectures in other locations for several years because there was not adequate space in the community. Two years ago, his business began renting the PSCC for their travel festival and it was a wonderful experience to lecture from the beautiful, classy old building. He expected to use the facility a great deal in this manner in the future. He pointed out the indirect value to Edmonds and the businesses in the community from holding such an event in the City. He recalled his first memory of the building as a 7d' grader and as an adult, seeing the building everyday, he realized this building had something many neighboring communities don't have, a building with soul. Bob Anderson, 18310 Sunset Way, Edmonds, former Music Director for Edmonds School District and conductor of the Cascade Symphony for 30 years, referred to a letter he wrote to Senator Maria Cantwell (who worked with the Cascade Symphony in 1992-1993) asking for her assistance. He noted Senator Cantwell was in favor of this project and was trying to do something from a federal level. He pointed out the person doing the renovation of the Seattle Opera House indicated how lucky the City was to have such a facility to renovate. He urged the Council to acquire the auditorium, hire an acoustic engineer and put in a new floor and seats. Rowena Miller, 8711 182nd Place SW, Edmonds, commented she has seen the PFD Board work hard for over a year and develop a more realistic plan than was originally presented. However, she was still concerned with mixed messages she receives regarding City business including the library that the City could not afford, a fire station that has yet to be completed, funds provided to the Edmonds Alliance for Economic Development as well as funds previously provided to the PFD Board and their current request for $2 million in REET funds. She acknowledged there were two types of funding, capital and maintenance, but pointed out when capital funds were used for a building, the maintenance and operation costs followed. She expressed concern with Mayor Haakenson's budget predictions for the coming year and future years, anti -tax initiatives from the past and present, and the possibility of employee layoffs. She urged the Council to maintain control as the PFD Board was not elected. Although there was an indication the City would own the building after 25 years, she encouraged the Council to include that in the Interlocal Agreement. She urged the Council to consider what the average citizen could afford and not allow taxes to be added to tickets, parking, etc. that made citizens unable to use the facility. Edwina Baxter, 22124 98th Avenue W, Edmonds, enumerated the committees she participates on including the Edmonds Arts Festival Foundation, The Edmonds Arts Commission, the Advisory Committee for the PFD, and several for the Pacific NW Ballet. She explained if the City did not do this now, it would probably not be done. She said that would be sad because if this performing arts facility was not maintained, Edmonds was not an arts community. She urged the Council to think of Edmonds as a regional draw. Edmonds City Council Approved Minutes October 8, 2002 Page 8 Mr. Voorhees interjected that the City had more than adequate debt capacity to issue $6 - $7 million in LTGO bonds and as of last year, had approximately $32 million in debt capacity. He explained the issue was not debt capacity but the existence of an adequate and reliable source of funds to repay principle and interest on the bonds. He noted there was no realistic possibility that the Interlocal Agreement could be approved by all four bodies by October 31. Therefore, he indicated it was imperative that an extension of the Right of First Refusal to December 31, 2002 be obtained and the purchase and sale agreement for the property be prepared with a closing on or before December 31, 2002. This would provide adequate time to have decisions made, approval of the Interlocal Agreement, and the contractual obligations in place so that the City could undertake this obligation without reservation or concern. Jan Conner, PFD Board Member, described the commitment of the PFD Board to saving this facility for Edmonds and the arts community, noting board members have committed countless hours to ensure the project was feasible and have been conservative in developing revenue projections, expectations for the project, etc. She emphasized if the City lost this facility, it would lose the funding that could not be spent on anything other than this facility. She acknowledged the Council and PFD must be fiscally responsible but pointed out interest in the facility would only increase over time. She urged the Council to approve the Business Plan and the funding. Helen Wilkins, 9029 2401h SW, Edmonds, Artist Director, Olympic Ballet, explained they have been performing arts in the Edmonds area for 21 years and were proud of Edmonds for its arts. She recalled when they came to this area, they researched theaters throughout the area and eventually located at PSCC. She encouraged the Council not to lose the energy put into this project, noting it would be terrible to lose this opportunity, causing them to leave the community. Roger Hertrich, 1020 Puget Drive, Edmonds, commended the members of the PFD Board for their efforts including making one of the best real estate purchases. He noted the PFD had created an opportunity for the economic future of Edmonds as well as to support the arts and save a historic structure. He recalled Mr. Steves' travel festival brought many people to the City, which he envisioned as the economic future of Edmonds. Promoting the Edmonds Centre for the Arts would have economic benefit as numerous people come to the community to attend events. He expressed his appreciation for the questions asked by Councilmembers Dawson and Petso as they indicated the financial liabilities and consequences of this purchase would be protected. Rich Demeroutis, 921 Pine Street, Edmonds, expressed concern due to the City's history with the Public Safety building including the need to appropriate additional funds, additional funds appropriated for the fire station on 196"' and the library roof that will continue to leak for the next year which he thought would be addressed by the annexation to Sno-Isle Library district. He noted concern with the $16 million project funded in a large part by fund raising. Although he supported purchasing the building and renovating it modestly for use by the community, he pointed out the facility would not compete with facilities in larger communities as there were not sufficient hotel rooms. He requested the Business Plan include a traffic mitigation plan for the residents in that area, pointing out parking for events at such a facility would disrupt the neighbors' quality of life. He suggested funds budgeted for renovations be used for a parking garage which could also alleviate parking problems for downtown businesses. He summarized he would like to see a more conservative approach to the facility rather than the $16 million opulent jewel in a residential community. Claudia Papenpus, 16810 16th NE, Shoreline, a member of the Cascade Symphony for 40 years, commented this superb community orchestra was a treasure that Edmonds could continue to be proud of if they had a performance venue. If the facility was lost, she noted the Cascade Symphony would be Edmonds City Council Approved Minutes October 8, 2002 Page 9 forced to perform elsewhere. There would be many residents of the Edmonds area who would not be able to avail themselves of the Olympic Ballet or the Cascade Symphony if they were forced to go elsewhere to find an adequate stage and theater. Gary Nelson, Snohomish County Councilmember, 9710 Wharf Street, Edmonds, commented the Business Plan proposed by the Edmonds PFD was a well thought out, conservative plan. For those who purchase property in Edmonds and pay the REST, he commented there was no other investment more suitable to receive these capital funds. He urged the Council to approve the release of $2 million from the 151 quarter REET. He noted this was the first step; the next step would be to approve the Interlocal Agreement. Tomorrow the Snohomish County Council would approve the Interlocal Agreement between the Snohomish County PFD, Lynnwood, South County PFD and the Snohomish County Council. He anticipated the Interlocal Agreement between Edmonds, Snohomish County PFD, Edmonds PFD, and Snohomish County Council would be done quickly and urged the Council not to seek an extension. He pledged that if the Edmonds Council could act on the Interlocal Agreement on October 15, he would guarantee the Snohomish County Council would approve it on October 23. Charlotte Williams, 1029 8th Avenue S, Edmonds, commented many people may like the status quo but the community didn't have that choice — they could either go backward or forward. She urged the City to go forward. Hearing no further public comment, the Mayor closed the public participation portion of this item. In response to comments, Mr. Snyder explained statutes require the facility to be a regional facility of at least $10 million in value. He acknowledged the facility was more modest in scope, however, one of the conditions for finding viability by the Snohomish County PFD was a requirement that upgrades be such that the facility would serve a regional audience, thus the reason for the proposed phasing. Responding to Councilmember Petso's questions, Mr. Snyder stated the PFD'S Business Plan assumed a cooperative effort with the City and that the PFD would seek assistance from the City. He clarified there would be an ongoing operating partnership between the City and PFD that would require considerable input from the City on an annual basis. He noted larger structural controls were better addressed as conditions in the Interlocal Agreement. Councilmember Dawson asked whether it was realistic for the Council to approve the Interlocal Agreement by next week. Mr. Snyder answered it would be virtually impossible to complete the Interlocal Agreement in time to have it before the Council on Tuesday. He noted it may be possible, with the cooperation of all parties, to have an Interlocal Agreement to the Council by October 22. He noted the Purchase and Sale agreement provided for a closing date of October 31, 2002. On behalf of the PFD, he has been negotiating an extension should it be necessary. He agreed having the Interlocal Agreement approved by October 31, 2002 was preferable as any extensions would be costly. Council President Earling agreed it would be extremely difficult to complete the Interlocal Agreement by next week. He urged the Council to commit to working with the parties to the Interlocal Agreement to get it approved no later than October 29, acknowledging this may require a special Snohomish County Council meeting. COUNCILMEMBER MARIN MOVED, SECONDED BY COUNCILMEMBER ORVIS, TO APPROVE THE EDMONDS PUBLIC FACILITIES DISTRICT BUSINESS PLAN AND RELEASE OF A TWO MILLION DOLLAR CONTRIBUTION FROM THE 1ST QUARTER REAL ESTATE EXCISE TAX TO THE EDMONDS CENTRE FOR THE ARTS PROJECT. Edmonds City Council Approved Minutes October 8, 2002 Page 10 Councilmember Petso added a friendly amendment that the approval be subject to a condition that the sale of the portions of the property be approved by Council. This was acceptable to Councilmember Marin and Councilmember Orvis, the maker and seconder of the motion. Councilmember Marin indicated he was very impressed by the work that has been done. He acknowledged at different points in the process, he was skeptical that the PFD could make this project a reality. Knowing the PSCC building well, he envisioned the proposed improvements would result in a first class facility. Council President Earling expressed his thanks to the citizens who testified, those with passion for the project as well as those who expressed concerns with the project. He also thanked the Council for asking the hard questions. He pointed out the need to balance the passion from the arts community with good business decisions which the PFD has done. He noted this project was a community gathering place as well as an economic generator and had enormous potential for generating tax dollars for the community. He noted the Business Plan has had to answer many questions; it was an excellent, conservative plan with checkpoints. He indicated he was proud of the purchase of Marina Beach, Brackett's Landing South and this building as they represented opportunities to make a remarkable difference in the community. He thanked staff for their efforts, including Mr. Clifton, Ms. Cruz, and Ms. Hetzler. Councilmember Wilson agreed this was a great opportunity for the community, a community that prides itself on preserving gems for public use such as the waterfront, Yost Park, etc. He noted the Business Plan took a very conservative approach and addressed the questions that Councilmembers have raised to ensure this was a viable project. He noted the Business Plan addressed only the direct benefit of the project but there were many indirect benefits to the community such as increased trade for downtown businesses as well as the opportunity to walk to an event and restaurant and to stay in the local area. He echoed the thanks expressed to the PFD Board and staff members for their efforts. Councilmember Dawson acknowledged she has been extremely skeptical of this project for a long time. She noted the Business Plan indicated this was a good, realistic project with realistic numbers that made sense. For those who were still skeptical, she encouraged them to contact her. Although she supported the arts as well as preserving this historic building and providing a cultural amenity to the City and providing a draw to bring more visitors to the City, if this project was not financially feasible or the City was asked to guarantee operating and maintenance deficits, she would not support it. She emphasized the City was not being asked to contribute any General Funds, only release a dedicated funding source that could not be used for anything other than capital projects and, by long-standing Council policy, could only be used for cultural and parks projects. She noted this project would serve the art community, preserved a historic building and made financial sense. Council President Earling noted Councilmember Plunkett was absent from the Council meeting but asked him to indicate that he would have supported the motion. Mayor Haakenson restated the motion as follows: APPROVE THE EDMONDS PUBLIC FACILITIES DISTRICT BUSINESS PLAN AND RELEASE OF A TWO MILLION DOLLAR CONTRIBUTION FROM THE 1ST QUARTER REAL ESTATE EXCISE TAX TO THE EDMONDS CENTRE FOR THE ARTS PROJECT SUBJECT TO COUNCIL APPROVAL OF ANY PROPERTY SALE BY THE PFD. MOTION CARRIED UNANIMOUSLY. Mayor Haakenson declared a brief recess. Edmonds City Council Approved Minutes October 8, 2002 Page 11 Public 4. PUBLIC HEARING ON ORDINANCE NO. 3416, A SIX MONTH INTERIM ORDINANCE Hearing on REPEALING EDMONDS COMMUNITY DEVELOPMENT CODE SECTION 20.35.080 IN rd# 3416 ORDER TO CLARIFY THAT THE CITY COUNCIL, INSTEAD OF THE HEARING EXAMINER, Clarifying SHALL MAKE FINAL DECISIONS ON PLANNED RESIDENTIAL DEVELOPMENT that Council APPLICATIONS Shall Make Final Decisions Planning Manager Rob Chave recalled the Council amended the Planned Residential Development n PRD, (PRD) regulations in December 2001, establishing new regulations and process for approving PRDs. On August 13, 2002, the City Council amended that provision with an interim zoning ordinance, modifying the approval process so that the City Council made the final approval on PRD applications. The amendments adopted in December 2001 provided for the Hearing Examiner making a preliminary approval on a PRD and final approval by the Council. Under the interim ordinance, the Hearing Examiner makes a recommendation to the Council and the Council makes final approval. He noted a public hearing was required when the Council adopted an interim zoning ordinance but no action was required tonight. Councilmember Dawson asked what actions the Council could take, other than no action, which would result in the interim ordinance remaining in effect. Mr. Snyder explained the Council could direct staff to prepare a new interim ordinance for Council approval and another public hearing scheduled within 60 days. He noted the Planning Board was currently working on revisions to the PRD regulations. Mr. Chave explained the Planning Board would be reporting to the Council next week on their preliminary findings but have not drafted language at this time. The Planning Board will seek direction from the Council regarding priority, timeframe, etc. Mr. Snyder noted the interim ordinance provided the rules for the PRD applications that were in process for this building season, noting one was on the Council's agenda next week. Councilmember Dawson recalled from a previous discussion that the law was somewhat unclear on this issue and the City may not want to take a calculated risk with regard to who made the final decision. She noted the Council could not adopt an ordinance tonight indicating the Hearing Examiner would make the final decision even if the Council wanted to. Mr. Snyder agreed it would be very risky. He referred to a letter from the Master Builders Association (page 26-28 of the record) which was basically the same opinion he provided. He noted there was potential, if the PRD ordinance was carefully crafted so as to not provide for change in use capabilities, it would not be found to be a rezone. However, the key to taking that position was carefully crafting the PRD ordinance. Given the existing ordinance, his advice was that the Council should consider PRDs rezones as any other position was extremely risky. Mayor Haakenson opened the public participation portion of the public hearing. Tom Sullivan, 17041 Talbot Road, Edmonds, indicated his comments were in rebuttal to the correspondence from the Master Builders Association (MBA). He disagreed with the MBA's inference that the Council could not make proper decisions based on the law. He pointed out in a recent PRD application, the Hearing Examiner recommended approval of the PRD. However, because the ordinance provided for final approval of the PRD by the Council, the Council denied the PRD because the applicant failed to meet several points of law in the existing ordinance. He questioned the MBA's indication that it represented 3,000 members, all who supported the Hearing Examiner having final decision authority, pointing out the likelihood that only a small percentage of the MBA's members had any idea regarding the issue or how they stood on the issue as it specifically applied to Edmonds. He noted citizens who were familiar with the wording of the new ordinance realized how ambiguous and poorly worded it was. The MBA was trying to take advantage of the City and the ambiguity of the ordinance and get as many Edmonds City Council Approved Minutes October 8, 2002 Page 12 PRDs through the system as possible before the ordinance's ambiguous wording was amended. He noted the 3,000 MBA members failed to appreciate the unique character of the City, but all Councilmembers appreciated the uniqueness of the City. He explained the North Talbot Group and Talbot Group supported the ordinance wherein the City Council made final decisions on all PRDs. Ray Martin, 18704 94th Avenue W, Edmonds, commented in the recent past, the Council's decisions have been superior to the Hearing Examiner as illustrated by the Superior Court upholding the Council's decisions. He noted 15 years ago it would not have made much difference whether one chose the Council or the Hearing Examiner, the Hearing Examiner process worked well and the Council was fair- minded and an applicant would have approximately a 90% chance of getting a fair decision. However, he felt that today the chances of getting a fair decision from either were only approximately 50%. He urged the Council to retain the Council as the final decision maker on PRD applications. Nancy Brodie, 8209 181" Place SW, Edmonds, commented the voters entrust the Mayor and Council with the operation of the City government and the Hearing Examiner is not elected. She said only elected officials should decide zoning changes and she supported Ordinance No. 3416. Eric Thuesen, 18225 85th Place W, Edmonds, indicated he had been involved in numerous PRDs over the years and found the process in the past to be non -prejudicial and worked well. He expressed concern with the concept of only a Council review on a PRD instead of the Hearing Examiner and a possible rezone requirement. He explained the PRD was designed as a vehicle for property owners to develop properties with issues such as topography or environmental concerns. Via the PRD process, a property owner was not denied their legal zoning rights and could develop the parcel via a good design in accordance with the zoning for the area. Eliminating the PRD process would put property owners into a hardship situation and as a developer, he would be required to not only face the Council but also a mob rule that pushed for his project to be denied even though the zoning and process state that it should be allowed. With regard to whether a PRD was a rezone, he noted there were properties that required PRD development in order to be developed due to unique circumstances. Requiring a rezone to place the same number of units but in a smaller configuration would be denying a property owner some of their rights. He urged the Council to maintain the PRD process as it existed, with the Hearing Examiner making the final decision. This would protect property owners' rights and allow them to develop their land in a predicable, unprejudiced manner. Ben Brodie, 8209 181" Place SW, Edmonds, referred to Mr. Thuesen's concern with mob rule, noting the name for that was democracy. Mr. Brodie supported the Council making decisions regarding PRD's as they were political decisions and seldom simply application of civic rules. He noted a decision by multiple elected officials added authority to a decision that a Hearing Examiner did not have. He summarized in order not to abuse the affected citizens, the decisions needed the authority of elected officials, the City Council. Diane Azar, 8202 Talbot Road, Edmonds, representing the Talbot Group, supported the interim zoning ordinance to clarify that the Council rather than the Hearing Examiner shall make final decisions on PRD applications. She noted the Talbot Group looked forward to their participation in a public hearing before the Planning Board regarding the revised PRD regulations. She referred to a list of concerns she submitted to the Planning Board at its last work session on September 25. She summarized the Council should make the final decision regarding PRD applications and the public should not have to file an appeal as it was a particularly punitive and costly process. She explained PRDs should protect and benefit neighborhoods and the process should be beneficial and equitable and not punitive to the public. She referred to two recent PRD applications in their neighborhood and their pleasure with the decision of Edmonds City Council Approved Minutes October 8, 2002 Page 13 the City Council when they had the opportunity to review the facts. She reiterated the need to retain the final decision in the hands of the City's elected representatives to allow the City to retain and cultivate the quality of life enjoyed in Edmonds. David Toyer, Master Builders Association, 2155 112th Avenue NE, Bellevue, indicated the MBA did not support the interim ordinance and urged the Council to repeal the ordinance. He disagreed with the City Attorney, referring to a brief he provided as well as a brief from their attorney, which outlined their argument relative to RCWs 35.63A.17O and 36.7OB.O2O(4). He noted the logical steps outlined in those two processes concluded the final decision regarding PRDs should be a Hearing Examiner decision. He noted even if a decision regarding a PRD was considered a rezone, which MBA did not concede it was, it still would be subject to a Hearing Examiner decision. He pointed out only 8.6% of the Snohomish County area was within urban growth areas, where the majority of all growth should occur in accordance with GMA. He noted this was an essential public policy debate, whether the City supported PRDs and higher densities within the City to meet the intent of GMA to infill urban densities in the community or the City did not support infill development and allowed lower density, sprawling density. He noted there were a number of arguments that all dealt with compatibility, particularly those in. He acknowledged that development under GMA was different, resulting in a conflict with larger subdivisions developed prior to GMA. He referred to his brief which outlined an essential Growth Management Hearings Board decision where a jurisdiction argued for lower densities in a neighborhood because it was important to protect the neighborhood vitality and character and the Board ruled the requirement to ensure neighborhood vitality and character was neither a mandate or excuse to freeze densities at pre-GMA levels. The Board further concluded that GMA objectives were not mutually exclusive and cities were to be the focal point of new urban growth, well designed compact urban development, and the development process must be timely and equitable to both residents and developers. He concluded the predictability to residents and developers was why the Hearing Examiner process was developed and why the MBA supported retaining the integrity of that process. Janice Noe, 9105 242"d Street SW, Edmonds, a resident adjacent to a property whose PRD application was accepted, expressed her continued concern with the process. She explained she was one of only two neighborhood residents to attend the Hearing Examiner's hearing. She noted their neighborhood is predominantly a working class neighborhood and envisioned it was not feasible for many neighbors to attend a 9:30 a.m. meeting. She found the Hearing Examiner hearing valuable, a process where parties were able to provide testimony and discuss the facts. However, a meeting where only two residents attended seemed to be too few people. For that reason, she supported the interim ordinance that the City Council make the final decision regarding PRDs. She commented on the likelihood if the neighborhood had a better understanding of PRDs and had more money to hire an attorney, they may have contested the application. She noted the reason PRDs were proposed was the existence of property that was undevelopable in the traditional manner. She summarized it was important to have the Hearing Examiner involved but for the City Council to make the final decision. She expressed concern with comments by City planners regarding the need to become partners with developers and hoped the planners were also interested in protecting neighborhoods for the residents. Bob Vick, General Manager, Sundquist Homes, 7127 196th Street SW, Edmonds, commented they looked for consistency and predictability and the Hearing Examiner process was a predicable path as there was criteria under which the Hearing Examiner made his decision. Conversely, the City Council's review is typically a more politicized environment and given a choice, they would choose the Hearing Examiner making the final decision as it was a prescriptive process. He referred to Item 2 on page 2 of the ordinance which indicates the Planning Manager may require an applicant to host a public application neighborhood meeting to discuss the project. He recalled a project in Shoreline that resembled a PRD application and their process that required the final map to be re -circulated to the neighborhood for Edmonds City Council Approved Minutes October 8, 2002 Page 14 comment, resulting in a very unpredictable process for the developer. He referred to Item 4 of the ordinance which indicates the Hearing Examiner will review the proposed PRD for compliance with the section and make a recommendation to the Council. He noted adding another step, approval by the City Council, added time to the process that was unnecessary. He referred to page 3 of the ordinance where it indicated if a proposal was denied, a similar plan for the site may not be submitted to the development services department for one year. He noted this constituted a penalty, and placed the financial obligation of carrying a project for a year on the applicant. He referred to Section 1 on page 3, objecting to the authority given to the Planning Manager and City Engineer to review and make a final decision regarding the final development plan. Rob Michel, 7907 212th SW, Edmonds, commended staff for their part in developing a new PRD ordinance that could be a model for other communities. He pointed out the new PRD ordinance had a number of safeguards to ensure new PRDs were compatible with the surrounding community including review by two citizen boards, the Architectural Design Board and the Planning Board. He was opposed to any change to the PRD process and supported the testimony of David Toyer, MBA representative, noting he and many other members of the MBA have reviewed the materials. He commented any change in the PRD process would slow the development process and possibly discourage it. If the Council agrees a PRD is a rezone, the future may be that a PRD would be required to meet all rezone criteria in the Community Development Code. He noted the primary criteria that stopped most thoughts of pursuing a rezone was that a rezone must be consistent with the Comprehensive Plan, noting that most properties in the City considered for rezone were not consistent with the Comprehensive Plan, requiring an amendment to the Comprehensive Plan. The process for requesting an amendment to the Comprehensive Plan was a long and onerous process as amendments were accepted only once a year. He noted if a Comprehensive Plan amendment were approved, a rezone process followed. He expressed concern for the property owners whose only hope of developing their property was via the current PRD process and indicated the process discouraged him from proposing a PRD. Developers would be forced to develop property via the conventional subdivision process which resulted in strange shaped lots, houses that were not consistent with existing development, fences that were not parallel, etc. in order for a developer to site as many lots as possible on the property. He reiterated developers were looking for predictability and ways to promote economic development in Edmonds. Morgan Richardson, 17102 Talbot Road, Edmonds, expressed his support for Ordinance No. 3416. He recalled the Council asked the hard questions during the recent review of the PRD in their neighborhood and determined there were errors/issues not considered by the Hearing Examiner or the Planning Board. He agreed the Council should be the final arbiter on PRDs. Roger Hertrich, 1020 Puget Drive, Edmonds, recommended the Council make the final decision on PRDs. He recalled the original PRD ordinance allowed the Hearing Examiner to consider the issues and make a recommendation to the Council and the Council made the final decision. He noted changes that had been made to the PRD necessitated further clarification. In the meantime, he supported the Hearing Examiner developing the record and the Council making the final decision. He recalled the Planning Board had had little citizen participation when developing the revisions to the PRD regulations. He summarized that until a good ordinance was developed, the Council should make the final decision. Hearing no further public comment, Mayor Haakenson closed the public participation portion of the public hearing. Councilmember Petso referred to the argument regarding GMA and asked whether GMA required the City have a PRD ordinance. Mr. Snyder answered no. Edmonds City Council Approved Minutes October 8, 2002 Page 15 Councilmember Orvis asked what GMA required of the City. Mr. Snyder indicated he did not disagree with the comments made by the MBA's representative. He noted most of the comments made tonight related to an ordinance that was not before the Council at this time. Due to an inconsistency in the current code, the question before the Council was how to process applications currently underway as the ordinance that has applications coming to both the Hearing Examiner and Council for a final decision. His concern was ensuring the Council was not in the position of being asked to deny a developer a right to develop his/her property to a density consistent with the Comprehensive Plan because it was not compatible with the surrounding neighborhood which itself was not consistent with the Comprehensive Plan or GMA. He suggested the Council defer any GMA discussion to a future meeting. Councilmember Dawson recalled a comment from the audience that this ordinance made PRDs a rezone. She clarified the discussion regarding rezone was not that an applicant had to seek a rezone in order to do a PRD but the courts have treated PRDs as rezones in their case law. Mr. Snyder agreed, clarifying that because the City's current ordinance allows for density round -up and permits building types that would not otherwise be permissible in the zone, the result was PRDs that courts have defined in all recorded cases as rezones. He did not disagree with the MBA's position that the ordinance could be changed, but that was a discussion for another day. The issue before the Council was an ordinance with inconsistencies and an effort to clarify the rules until the ordinance is revised. For Councilmember Dawson, he explained the interim ordinance kept decisions regarding PRDs at a status quo until the PRD ordinance could be reviewed comprehensively by the Planning Board. Councilmember Dawson observed that comments regarding the requirement for a pre -application meeting or not being allowed to submit an application for one year following a denial were issues to be addressed in the new PRD ordinance and not aspects of the interim ordinance. She noted the only change in the interim ordinance was that the City Council rather than the Hearing Examiner made the final decision. Mr. Snyder agreed. Council President Earling explained he had the opportunity to watch the discussion of PRD issues in his neighborhood from afar. He was respectful of both parties' views that 1) the Council should be the final arbiter or 2) that the Hearing Examiner should be the final arbiter. After watching the process over the last several weeks, he became aware of the enormous political pressure when these issues are reviewed by the Council. He was convinced the Hearing Examiner should be the final decision maker. Councilmember Orvis recalled he opposed the passage of the interim ordinance and was still opposed to it. He pointed out if residents disagreed with the Hearing Examiner's decision, it could be appealed to the Council. The Council's decision could also be appealed to the court. He questioned why the extra step of the Council review was necessary if there was no desire to appeal. He concluded the only result of the Council making the final decision was forcing an extra step for applications with no controversy over the Hearing Examiner's decision. Councilmember Wilson pointed out that although the process was what had been argued tonight, the issue was actually policy. If the Council via participation from citizens at the Planning Board and City Council level adopted good policy, the process should not be an issue because the language should be clear and result in a consistent outcome. He sympathized with staff and the citizens regarding lack of public involvement. He pointed out the need to educate the community and get them involved in developing policy rather than process because if the policy that was developed was adequate, it would address most process issues. He pointed out the need for the Council to be responsive, and citizens, the Planning Board and staff to be proactive in addressing policy issues as they arise. He agreed with Council President Earling that the Council's review became very political. He noted when conducting a Edmonds City Council Approved Minutes October 8, 2002 Page 16 closed record review, the Council could not change policy to change the outcome because the Council must adhere to the adopted regulations. He supported the use of the Hearing Examiner, pointing out the Hearing Examiner was a professional with more experience than the Council with regard to land use issues. He summarized that problems only arise when the Council has not defined policies and regulations adequately to protect neighborhoods and to give clear guidance to ensure a consistent outcome. He encouraged the public to become involved in the development of policy and to be proactive in making necessary changes. Councilmember Marin also supported the Hearing Examiner making the final decision on PBDs due to the tendency toward emotional or political decisions and away from predictable decisions. Councilmember Petso disagreed with the indication that due to ambiguities in the ordinance, a professional should make decisions in the interim. She supported retaining the interim ordinance until the difficulties in the underlying ordinance could be addressed. She preferred taking the extra step for the time being, noting a good PRD would not be impacted by the extra step but the extra step was necessary to address a bad PRD. She agreed the policy needed to be revised but until it could be, leaving the interim ordinance in place provided protection for citizens and did no harm to processing a good PRD application. Councilmember Dawson questioned why Councilmembers would support the Hearing Examiner process when the Council recently denied a PRD that was approved by the Hearing Examiner. She took umbrage that she voted on items based on a political bias, explaining her vote was based on whether a project complied with the established criteria. She summarized the issue before the Council was to either strike the interim ordinance which resulted in an illegal ordinance with conflicting provisions or leave the interim ordinance in place and discuss revisions when they have been developed by the Planning Board. She agreed with the MBA that the City could craft a PRD ordinance that would allow a Hearing Examiner to make the final decision and whether that was done was a policy decision. However, as long as density was allowed to increase, the courts consider it a rezone. She urged the public to comment on the development of the PRD ordinance. Mr. Snyder explained the Council did not need to take any action as the ordinance would expire in four months and would require renewal or the amendments to the PRD ordinance may be complete by that time. He noted the Council could direct him to prepare an ordinance repealing the interim ordinance and adopting an alternative interim ordinance. He recommended not changing the rules in the middle of the process as the City had applications underway and needed to establish a pattern of consistency. He explained the Planning Board would be seeking direction from the Council regarding the PRD ordinance and if the Council preferred the Hearing Examiner process, that should be stipulated to the Planning Board as it will guide the provisions of the PRD ordinance. Mayor Haakenson suggested when the Planning Board was ready to discuss their early findings of the PRD ordinance, a joint meeting between the Council and the Planning Board be scheduled. Councilmember Wilson asked Mr. Snyder to prepare a thumbnail outline of the difference between a PRD reviewed by only the Hearing Examiner and a PRD also reviewed by the Council. Mr. Snyder indicated he could highlight the provisions of the current ordinance that are problematic such as rounding up, housing type, and calculating easements and road area to provide more developable space under the PRD ordinance than the subdivision ordinance. He summarized he could identify issues that were use changes rather than bulk variances. Edmonds City Council Approved Minutes October 8, 2002 Page 17 5. MAYOR'S COMMENTS Mayor Haakenson had no report. 6. COUNCIL COMMENTS Excused Absence COUNCILMEMBER MARIN MOVED, SECONDED BY COUNCILMEMBER WILSON, TO EXCUSE COUNCIL PRESIDENT EARLING FROM THE LAST TWO MEETINGS. MOTION CARRIED (5-0-1), COUNCIL PRESIDENT EARLING ABSTAINING. With no further business, the Council meeting was adjourned at 10:20 p.m. �w� ,t1. (�6 SANDRA S. CHASE, CITY CLERK Edmonds City Council Approved Minutes October 8, 2002 Page 18 1 1 AGENDA EDMONDS CITY COUNCIL Public Safety Complex, Council Chambers 250 511 Avenue North, Edmonds OCTOBER 8, 2002 Special Meeting Time: The City Council Committee Meetings will be held at 6:00 p.m. followed by a meeting of all City Councilmembers scheduled to begin at 7:00 p.m. The 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 City Council will meet separately as committees in different meeting rooms as indicated below. 1. Finance Committee - 6:00 p.m. (Meeting Location: Jury Meeting Room) (A) Request from the Chamber of Commerce for Tourism Funds from the Lodging Tax (B) Financial Request from Team Edmonds (C) Report on Upcoming Library Projects 2. Community Services/Development Services Committee - 6:00 p.m. (Meeting Location: Council Chambers) (A) Definition of Fence/Hedge (B) Disabled Parking Improvements (C) Report on Parking Consultant and Draft Contract (D) Update on Appeals Board (E) Highway 99 Task Force (F) Discussion on Alliance for Economic Development Questions 3. Public Safety Committee The Public Safety Committee will not meet this evening. CITY COUNCIL MEETING - 7:00 P.M. 7:00 p.m. - Call to Order Flan Salute 1. Approval of Agenda 2. Consent Agenda Items (A) Roll Call Page 1 of 2 CITY COUNCIL MEETING AGENDA OCTOBER 8, 2002 Page 2 of 2 (B) Approval of City Council Meeting Minutes of October 1, 2002 (C) Approval of claim checks #58279 through #58423 for the week of September 30, 2002, in the amount of $328,841.37. Approval of payroll direct deposits and checks #34102 through #34206 for the period September 16 through September 30, 2002, in the amount of $736,572.24. (D) Authorization for Mayor to sign Interlocal Operating Agreement between Sound Transit and the City of Edmonds regarding funding contributions for Tsutakawa Sculpture. (E) Authorization for Mayor to sign Professional Services Agreement with BJY Northwest for on-call Uniform Building and Fire Code review services. 3. (60 Min.) Approval of Edmonds Public Facilities District (PFD) Business Plan, and release of Two Million Dollar contribution from the 1st Quarter Percent Real Estate Excise Tax (REET) to the Edmonds Centre for the Arts Project. The V Quarter Percent REET is dedicated to the acquisition and purchase of park and cultural capital projects through City Council directive.* *The City Council invites public comment on this matter. 4. (30 Min.) Public Hearing on Ordinance No. 3416, a six month interim ordinance repealing Edmonds Community Development Code Section 20.35.080 in order to clarify that the City Council, instead of the Hearing Examiner, shall make final decisions on Planned Residential Development Applications. 5. ( 5 Min.) Mayor's Comments 6. (15 Min.) Council Comments ADJOURN Parking and meeting rooms are accessible for persons with disabilities. Contact the City Clerk at (425) 771-0245 with 24 hours advance notice for special accommodations. The Council Agenda as well as a delayed telecast of the meeting appears on AT&T Cable, Channel 21.