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20181113 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES November 13, 2018 ELECTED OFFICIALS PRESENT Dave Earling, Mayor Michael Nelson, Council President Kristiana Johnson, Councilmember Thomas Mesaros, Councilmember Adrienne Fraley-Monillas, Councilmember (by phone) Diane Buckshnis, Councilmember Dave Teitzel, Councilmember Neil Tibbott, Councilmember 1. CALL TO ORDER/FLAG SALUTE STAFF PRESENT Jim Lawless, Assistant Police Chief Phil Williams, Public Works Director Carrie Hite, Parks, Rec. & Cult. Serv. Dir. Shane Hope, Development Services Director Scott James, Finance Director Mary Ann Hardie, HR Director Kernen Lien, Environmental Program Mgr. Rob English, City Engineer Jeff Taraday, City Attorney Nicholas Falk, Deputy City Clerk Jerrie Bevington, Camera Operator Jeannie Dines, Recorder The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Earling in the Council Chambers, 250 5 t Avenue North, Edmonds. The meeting was opened with the flag salute. 2. ROLL CALL Deputy City Clerk Nicholas Falk called the roll. All elected officials were present. Councilmember Fraley- Monillas participated by phone. 3. APPROVAL OF AGENDA COUNCILMEMBER JOHNSON MOVED, SECONDED BY COUNCILMEMBER TEITZEL, TO MOVE ACTION ITEM 8 AHEAD OF AGENDA ITEM 7. MOTION CARRIED UNANIMOUSLY. 8. ACTION ITEMS 1. RENEWAL OF ILA WITH MILL CREEK PD FOR DV COORDINATOR SERVICES Assistant Police Chief Jim Lawless explained this is the renewal of an ILA for a cost and time share of the Domestic Violence Coordinator with Mill Creek Police Department that originated in 2007. Via the 3 -year agreement, the Domestic Violence Coordinator provides Mill Creek Police Department with Domestic Violence Coordinator services for 6 hours/week of her 20 hour/week schedule. Council President Nelson asked if there was any interest in increasing the Domestic Violence Coordinator's hours for Edmonds or Mill Creek. ACOP Lawless answered staff met with Mill Creek Police Department to discuss that and agreed the hours are meeting both cities' needs at this time. If a need to increase the Domestic Violence Coordinator's hours arose, that would be proposed to the City Council along with a new ILA. Edmonds City Council Approved Minutes November 13, 2018 Page 1 Councilmember Teitzel asked the annual cost. ACOP Lawless estimated the annual cost of salary and benefits for this part-time position at $40,000/year; Mill Creek pays a percentage of both the salary and benefits. COUNCILMEMBER JOHNSON MOVED, SECONDED BY TEITZEL, TO AUTHORIZE THE MAYOR TO SIGN THE ILA RENEWAL FOR DOMESTIC VIOLENCE COORDINATOR SERVICES. MOTION CARRIED UNANIMOUSLY. 2. SNOHOMISH COUNTY DEPARTMENT OF EMERGENCY MANAGEMENT ILA- RF,NF.WAL Assistant Chief Jim Lawless explained when the previous emergency management organization, ESCA, dissolved, the City entered into an ILA with Snohomish County Department of Emergency Management for those services. The current ILA expires at the end of 2018; this item is to renew the ILA for 3 years. Edmonds' 2019 assessment is approximately $53,000 which is based on a formula in the ILA for all participating agencies. Councilmember Teitzel observed most of the Snohomish County cities were accounted for in Schedule D except Everett and Marysville. He asked why those two cities were excluded. ACOP Lawless answered due to their size, those cities provide their own emergency management services. COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCILMEMBER MESAROS, TO AUTHORIZE THE MAYOR TO SIGN THE 2019-2021 AGREEMENT. MOTION CARRIED UNANIMOUSLY. 3. APPIZOVAL OF .AGENDA Coil'# COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCILMEMBER JOHNSON, TO APPROVE THE AGENDA IN CONTENT AND ORDER AS AMENDED. MOTION CARRIED UNANIMOUSLY. 4. APPROVAL OF CONSENT AGENDA ITEMS COUNCILMEMBER TEITZEL MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO APPROVE THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: APPROVAL OF CLAIM CHECKS, WIRE PAYMENTS AND PAYROLL CHECKS 2. APPROVAL OF COUNCIL MEETING MINUTES OF NOVEMBER 5, 2018 3. ACKNOWLEDGE RECEIPT OF CLAIMS FOR AN UNDETERMINED AMOUNT 5. AUDIENCE COMMENTS Eric Soll, Edmonds, urged the Council to pick the strategy that does the most to reject the flawed process that has been implemented which does not acknowledge what residents, especially homeowners in single family residential areas, want for Edmonds. The Highway 99 subarea plan has the potential for thousands of new residences that should meet the requirements of GMA as well as density advocates for decades to come. At last the last town meeting, he urged the Mayor to initiate a process to commission a survey of citizens regarding what they want for the City. Advisory groups are often nothing more than vehicles to confirm desired and favored outcomes. The survey should be a scientific poll that provides the true Edmonds City Council Approved Minutes November 13, 2018 Page 2 alternatives homeowners will face, not have predetermined results and provide real examples of impacts to both the City and pocketbooks. For example, do homeowners desire to reside in neighbors that will have thousands of new residents such as are under consideration in Five Corners; do homeowners desire increased traffic, noise, pollution, and lack of parking as a result of thousands of new units; do single family homeowners wish to have out of proportion buildings such as 3 -story townhouses and apartment buildings adjacent to their homes that overlook their backyards; are homeowners who have oversized buildings constructed next to them willing to lose 10-30% of their homes' value to promote density and subsidized housing for others; and are homeowners and renters willing to pay higher taxes and rents to subsidize new residents and subsidized housing. He suggested using photos and illustrations in the survey to illustrate changes that may occur such as 3 -story townhomes or 5 -story apartment buildings that tower over existing single-family houses and to tabulate survey results by neighborhood; many are enthusiastic supporters until it impacts them directly. For example, wealthy residents residing adjacent to Puget Sound that will never be directly impacted will be less inclined to support increased density, upzoning and subsidized housing if it was implemented adjacent to their residences. The survey should differentiate between homeowners and renters as they have different interests and concerns. He expressed concern that throughout this process staff and City Council have been more interested in the needs of potential future residents than the legitimate issues raised by residents and homeowners. This process has turned the concept of no taxation without representation on its head by representation for non-residents without taxation. He urged the Council to focus on those they are responsible for, the citizens who reside in Edmonds and pay property taxes who have the most to lose via this process and to do that by starting the process over. Jim Van Tighen, Edmonds, on behalf of himself and friends in Edmonds, submitted a revised plan for the Housing Strategy adoption process along with a problem list (sent to City Council earlier today via email). Rather than abandon the adoption of a Housing Strategy or start over from scratch, they have collectively worked on this possible way to move forward. He was hopeful their proposal provided a direction to begin a more detailed, open, collaborate process for drafting and adopting this critical policy direction. They expect it to be modified, further refined and include more detail. Their proposal has been written, reviewed and circulated to members of the community including members of Save Edmonds. There is strong agreement for getting consensus around a vision for Edmonds, how do we want neighborhoods and business districts, the built environment, to look and feel. This is important to establish in light of the attention that has been brought to this critical issue of a Housing Strategy and because it will help find common ground to move forward. While work has been done on individual neighborhoods, there appears to be no over- arching vision for Edmonds as a whole. Simply calling for goals of livable communities is not adequate. While he acknowledged there would never be 100% agreement, community members, council, the mayor and staff should be committed to obtaining consensus around a vision for the City and he offered their help. Lynne Chelius, Edmonds, addressed the issue of process in the Housing Strategy. Although staff and Council tried to be inclusive, they found the following issues with the process: 1. The task force had too may people with special interest in housing or development and not enough interest in impact to the current Edmonds resident population. 2. While the city tried to distribute information about the process to the public, it did not reach enough people. 3. The outside consultant did not instill trust or competency. 4. The foundational question of "what is the problem(s) we are trying to solve" needs to be much more clearly asked and answered. 5. Laying out strategies without specific details regarding the effects creates mistrust. Although strategies do not automatically lead to action, they lay a foundation for action. 6. The process and draft were not adequately put in to context regarding how it would fit in with existing documents and codes such as the Comprehensive Plan, Strategic Action Plan, GMA, existing zoning like Westgate, Five Corners and Hwy 99 and others. She supported moving forward with a revised plan and schedule as outlined in these documents. Edmonds City Council Approved Minutes November 13, 2018 Page 3 Erling Hesla, Edmonds, a professional electrical engineer, said the issue of homelessness is very divisive. The problem is very broad, and the solution includes determining how it works into the City's overall plan as well as the cost of addressing the problem as the City has limited resources and those resources must be spent in ways that are the most effective for Edmonds residents. He noted some of the graphics in the Housing Strategy were difficult to understand and could be improved and the data needs to be checked to ensure the background information is correct and up-to-date. Several questions need to be answered including why there is a lack of housing, how broad is the problem, and how to help seniors, an issue that has not been addressed well. He recommended the draft Housing Strategy be checked for inaccuracies and omissions as well as consideration given to how the Housing Strategy fits with other City plans and services. Rebecca Anderson, Edmonds, said previous speakers have identified the problem, concerns with the process and content with the current draft of the Housing Strategy. She relayed next steps that should include the following 1. Start any new rounds of public involvement with a true visioning process that seeks to find common vision for how Edmonds' neighborhoods, commercial centers, public spaces and schools will look and feel in the future. 2. Conduct a thorough review by staff and any new advisory group to identify elements from the last draft that have merit and those that do not. Input into this process should include comments from the public, Councilmembers and Planning Board. 3. Ensure information gets out to the public in a survey or flyer form that allows for input from residents and businesses with questions as the process proceeds and allow opportunity to serve on any new advisory boards. Email signup lists need to be updated and kept current. 4. Develop a new timeline and work plan that extends to 2019. As Mr. Van Tighen stated, a letter, problem statement and draft strategy that includes a new timeline and work plan has been emailed to Councilmembers. She also provided hard copies to the City Clerk. She thanked the City Council, Planning Board, Mayor and staff for working with them and looked forward to a productive and position process during the next year. She assured they were available to help in any way appropriate because they all had a stake in what happens in Edmonds. She was encouraged to find Option 6 available on the sign -in table as it seems to be in line with much of their proposal. Eric Mikkelsen, Edmonds, referred to the Edmonds Lutheran Walkable Housing site, asking why the City wanted to encourage selling off church property to place temporary, box -style, mini units on their land. He acknowledged many churches were experiencing lean times, but unattractive sheds would fill the now open green space of Edmonds Lutheran Church. The manufacturer of the units is Blockables and the church would sell the land to Compass Housing Alliance, a Lutheran non-profit that builds low income housing on large lots of neighborhood churches that are struggling with low attendance. Although this may sound well and good, there will not be enough parking or sidewalks/street infrastructure in the neighborhood on 84th Street and it will be done without considering the neighborhood's safety. He envisioned the daycare at Edmonds Lutheran Church would close because the housing endorsed by the plan would include low barrier tenants which includes and welcomes people with misdemeanor assault, felony backgrounds of auto theft, prostitution, burglary and drug convictions. He referred to the list of task force members selected by the Mayor; the first member on the list is Bill Anderson, a Woodway resident on the Woodway Town Council who secured $3.9 million in federal and county funds for green space reserves in Woodway. He questioned why Mr. Anderson was on the task force; he is a prominent member of Edmonds Lutheran Church and works for Compass Housing. If he is facilitating the sale of his church's land to the company he represents and advising and influencing the Mayor's task force of which he a member, he questioned how this was ethical and not a conflict of interest. He acknowledged more housing options for lower income people were needed, but suggested they be in the form of apartments in multi -family zoned parcels primarily on Highway 99 and not in single family zoned neighborhoods. He spoke in favor of residents' right to be safe Edmonds City Council Approved Minutes November 13, 2018 Page 4 in their neighborhood. He recommended the Edmonds Lutheran/Compass Housing cabal put to an immediate end. Jeff Scherrer, Edmonds, said many people he has spoken with were surprised to learn a new housing advisory committee was formed after last week's City Council meeting. Even after several citizens indicated they felt left out of process and asked for more notice to be given about the Housing Strategy, more questions arise like who formed the committee, how much notice was given to Edmonds citizens, is the committee open to anyone in Edmonds, what was the selection process, are the meetings public and will the public be provided enough notice. He urged the Council to make the process more transparent and open to the public so everyone can be involved. Dave Cooper, Edmonds, said he worked hard to be able to live in Edmonds and has been following the Housing Strategy since April 2017. He emphasized there was no need to rush into this and every reason to do a reboot, slow down and bring more Edmonds residents into the process. He found Kevin Ramsey, BERK Consulting, arrogant, condescending and evasive when pressed for answers. He suggested a different, more Edmonds -friendly consultant be brought in which would eliminate hostility that has developed over the Housing Strategy. He supports the concept of a Housing Strategy and was not opposed to increasing housing supply on Highway 99 but was adamantly to subsidized housing because a subsidy means taking money from one group and giving it to another. Michelle Goodman, Edmonds, thanked the Council for acknowledging citizens' concerns regarding the Housing Strategy, recognizing everyone wants to see a vibrant, safe and inclusive Edmonds, and keep the quality of life in the community. It was her understanding the Housing Strategy started as a response to the City's responsibility to provide a plan detailing how to accommodate growth in Edmonds. She referred to the Westgate Bartell project that predated the Housing Strategy and envisioned the 91 unit housing structure has opened the door to similar projects such as the Five Corners project under consideration. She has yet to receive answers to questions regarding forfeited tax revenue, zoning variances and other incentives given to developers. There has been a lack of transparency in answering questions related to parking, new roads and strategies to address increased traffic. At a meeting she attended, the Bartell group said they were already receiving calls inquiring when the units would be available. In other developments by the Bartell group in Ballard and Bellevue, their smallest studio, 700 square feet, rents for over $2300/month. Bartell will make millions on these projects; to suggest it is for anything else such as an avenue for affordable housing is naive and lacks veracity and respect for Edmonds residents. She encouraged the Council to accept the revised Housing Strategy as others suggested, a transparent plan to accommodate growth that makes sense to most and requires input from all Edmonds citizens. Gerald Bernstein, Edmonds, recommended the Council stop the current process, identify what problems really exist and proceed to solve those problems. Edmonds citizens have become alarmed and resistant due to what they perceive as a lack of transparency. This was aggravated by the BERK report and many people do not understand the need for a Housing Strategy. What people see are problems that Seattle, Portland, and San Francisco are experiencing as a result of some of the concepts in the Housing Strategy. For example, the GMA was held up as a threat, the City must comply immediately because it is a mandate. He questioned how much of a mandate there was and whether there was a timeline. Another conflicting concept is housing people who work in Edmonds; from that, one could draw the conclusion that if someone accepts a job in Edmonds, they must be provided a place to live. He asked how and why the citizens advisory board was formed. While he agreed many of the problems identified are valid, they need to be individually confirmed and investigated. To restore confidence, he recommended stopping the process and starting over with the full support and input of Edmonds residents who will be impacted by the consequences. Roger Hertrich, Edmonds, said this reminds him of the tree issue, recalling the public's negative reaction to the proposed tree ordinance. The Housing Strategy is on the wrong path which he opined was a program Edmonds City Council Approved Minutes November 13, 2018 Page 5 developed by staff, engineered by Mayor, that left the public out. He expressed concern with the way the task force and the latest committee were formed as well as the lack of meeting notice. He urged the Council to take a step back, noting when an issue affects this many people, it was time to start over and do it right. He suggested each Councilmember and the Mayor select committee members. He urged the Council to take a second look at this issue, start over and get the Mayor and Ms. Hope out of process and for the City Council to lead the process. Carol Nordstrom, Edmonds, agreed with most of the comments made by previous speakers. Although she admired what the church was trying to do and recognized it was a ministry, but she did not want to see Seattle's problems spread to Edmonds. If it is the church's ministry, it takes 30 minutes to drive to help the homeless in Seattle. Seattle is working on housing and is quietly moving some camps out of Seattle and she did not want them to end up in Edmonds. She lives in an area where the property behind her was rezoned and several 2 -story homes constructed in a small area which destroyed their privacy. That is an important consideration and higher isn't always better. She recommended restarting the process and trying not to bring Seattle's problems to Edmonds and letting the church participate where the homeless already live. 6. STUDY ITEMS 1. DRAFT AFFORDABLE HOUSING STRATEGY DISCUSSION Councilmember Buckshnis thanked the public for their input and assured their voices are being heard. She explained the legislative branch does not typically not put itself in the middle of an administrative process. She recalled when the tree ordinance was proposed, people were angry, frustrated, anxious and mad that no one was listening to their concerns. There are five options for the Council to consider and a sixth option was recently proposed which she said was very similar to the third option. She suggested each Councilmember provide their opinion regarding how to move forward. She summarized the Council are not City administrators, the Council sets policy. She referred to the legislative options for Council: 1) Accept the Strategy 2) Accept the Strategy with amendments 3) Pause the Strategy and do a major rewrite 4) Reject the Strategy and remove Strategy option from Housing Element of Comprehensive Plan • City's existing Comprehensive Plan has a Housing Element, but it needs to include the issues that are addressed in the Housing Strategy 5) Reboot — Perform a hybrid of the process + Could include the formation of a task force for which citizens could apply that would supplement the existing administrative task force or would be a separate Council task force Councilmember Buckshnis assured the Council is listening to citizens and want to resolve citizens' frustration and anger. She recalled with the tree ordinance, once people get mad, they do not get "unmad." She suggested each Councilmember provide their input and the Council can draft a policy for administration. Councilmember Mesaros found it satisfying as a Councilmember that there has been more public input on this process than any other issue the City has faced in the last four years which is a good thing. He observed that not everyone was operating with same set of facts and he preferred facts, not inuendo enter into the discussion. With regard to the tree ordinance, he recalled policies were developed, citizen input was provided, and changes were made which is how the system is supposed to work. Councilmember Buckshnis pointed out the Council shelved the tree ordinance. Councilmember Mesaros agreed the Council listened to the public and took appropriate action. Councilmember Buckshnis recalled the Urban Forest Management Plan was the result. Councilmember Mesaros clarified his point was the Council was making a change and not ignoring citizen input. He recognized the five options for Council consideration, noting a sixth option Edmonds City Council Approved Minutes November 13, 2018 Page 6 has been proposed as well as a seventh option proposed by a community group. He assured the Council was not rushing, this is a study item and no votes will be taken although hopefully some consensus can be reach on a path forward. The Housing Strategy was still being discussed and citizen input was being sought. There is no firm end date for developing and approving the Housing Strategy and although some would like to have it completed by 2019, it was okay to get it done in 2020. There was time for a dialogue with the community to determine the City's needs. Councilmember Teitzel echoed Councilmember Mesaros' comments, relaying that as a Councilmember he far preferred passionate input from the community rather than apathy because it helps the City Council make better decisions and craft better policies. After reviewing the Council agenda memo, he developed Option 6, which he said differed from Option 3 and included elements of Option 5. He provided the following statement: As we think about housing strategies in our city, I am reminded of the very first goal in the housing element of our Comprehensive Plan, which states "Encourage adequate housing opportunities for all families and individuals in the community regardless of their race, age, sex, religion, disability or economic circumstances." This worthy goal was unanimously approved by Council in 2015 and has provided direction as we've considered next steps toward creating a housing strategy. Unfortunately, economic circumstances have created difficulty for many of our neighbors, friends, relatives and coworkers in obtaining and maintaining affordable housing. These recent facts are revealing: - Snohomish County Assessor data shows homes in Edmonds sold for, on average, 59% more in 2018 than in 2010. - Census data shows Edmonds rental housing rates increased by 60% from 2010 to 2017. - Census data shows the median income of Edmonds residents increased by 13% from 2010 to 2016. This data suggests people living or working in Edmonds are increasingly challenged to find affordable housing, many are being driven toward housing instability and some may be driven into homelessness. It is incumbent on Council to proceed thoughtfully toward setting policies in place that can address this issue. While it is tempting to take an additional year or two beyond 2019 to complete a housing strategy, the housing challenges and pressures on many of our fellow citizens will continue to mount and delays in creating additional housing options are simply not responsive. I strongly believe our city can work collaboratively to create stronger community engagement, improved communications flow and a disciplined process to create a new housing strategy document by the end of 2019, as called for in the Comprehensive Plan. I have developed an additional option for Council's consideration, which I'll call Option 6, which outlines a clear process to achieve that goal. This process calls for significant public input, far better communication and regular check steps with Council and the public as work proceeds toward development of a new housing strategy draft. This improved process will help us achieve common agreement on strategic direction, which will help Council and the administration begin to develop more specific plans in 2020 and beyond for housing in Edmonds. It is important to note that, as future plans evolve for housing after the initial strategy is developed in 2019, the public will be involved every step of the way to help us ensure localized housing plans are consistent with Edmonds' character. In other words, direct public outreach and involvement in development of the city's housing plans will not end in 2019. Councilmember Teitzel submitted Option 6 for Council consideration. Council President Nelson said he has heard a lot of things from citizens and Councilmember about facts, about not rushing and about involving public. Although there has been a lot said about involving public but that is not what is seen. When he talked to the public at the two town halls he held, the public expressed a lot of opinions and he learned citizens care about the City and its future, and they want to be informed and Edmonds City Council Approved Minutes November 13, 2018 Page 7 included. He has not seen that inclusion to date. The administration handpicks a group of people to develop a Housing Strategy who product a draft report that receives massive public concern and outcry and concern with the lack of public involvement. The administration decides to go back to the drawing board and they handpick a second group of people to generate ideas, to provide advice and to get the Housing Strategy off the ground. Seven of the eleven members of this second group serve or have serve in City government in some capacity. The administration hastily arranged a meeting, with no notice until the day of the meeting and no news release or announcement to the media. He learned of the meeting on the day it was held by a colleague who was on the committee and an email to City Council that the new group had been formed. An email was sent to citizens who signed up to be informed about the Housing Strategy but did not mention the new group had been or that a meeting was scheduled although there was a post on the website that the public was welcome. He questioned whether the public was really welcome. Council President Nelson concluded the administration's Housing Strategy process was FUBAR, Fouled Up Beyond All Repair. He has yet to see something that will actual work unless it involves citizens and they are involved and at the table at the beginning in the creation of the strategy. He would support something like that and agreed some sort of Housing Strategy was needed but the City needs to be smart about it, take the time necessary, be deliberate and include everyone. Councilmember Buckshnis said this is the same strategy with a different name. Edmonds has not been successful with strategies in the last eight years she has been on Council. The tree ordinance was not successful, and nothing was changed other drafting an Urban Forest Management Plan which has included hundreds of hours of citizen comments. She recommended rejecting the Housing Strategy, removing it from the Comprehensive Plan, everyone calming down and creating a vision via a process that involves citizens. A strategy could be added to the Comprehensive Plan in the future although the Comprehensive Plan already addresses these issues; the Housing Strategy is basically the Housing Element on steroids. Councilmember Tibbott said when he first heard about the proposed Housing Strategy, he realized it was part of a larger context and conversation. However, when he read the document, he found it short on essential data, was confused why did it did not allude to other zones in the City that already include housing strategies, there was nothing about population trends or the cost of constructing these new homes, it was repetitive and cookie cutter and staff did not seem to recognize that. The recommendations in the Housing Strategy sounded like ideas that should be immediately implemented rather than suggestions, the recommendations were not prioritized, and did not indicate which would work. Some of the suggestions were concepts that have been tried and failed in other cities. In addition, as the Housing Strategy was presented to the public, their questions were not adequately addressed and there was not adequate information provided regarding where the ideas came from. Councilmember Tibbott summarized he was not in the favor of the Housing Strategy as proposed. However, he was in favor of moving forward with some version of the strategy and developing a narrowed vision that focused on the Housing Strategy. He appreciated that Option 6 called for developing a new task force with input from the City Council, greater communication and opportunity for engagement from citizens. Narrowing the focus of the Housing Strategy needs to clearly articulate the problem to be solved and seek input related to the vision for that problem. Although he was weighing the possibility of removing the requirement for a Housing Strategy from the Comprehensive Plan, Councilmember Tibbott said many citizens need housing solutions. The City can do a better job starting with the base that has been provided and including citizen input moving forward. He wanted to harness the momentum, noting there are people involved now who have not been involved in a City process before as well as people who are proposing new ideas. He found Option 6 quite different than Option 3 as it included the formation of a new task force. He looked forward to a robust, citywide process Edmonds City Council Approved Minutes November 13, 2018 Page 8 and to interviewing citizens who would have an active role in the task force. Although the process could be delayed, he preferred to take advantage of the momentum and begin a deliberate process in early 2019. Councilmember Mesaros suggested Ms. Hope describe the purpose, participants and outcome of the first meeting of the advisory committee. Mayor Earling suggested that occur after Council comments. Councilmember Johnson said it was likely all seven Councilmembers have different points of view regarding how to proceed although there are also many similarities. There has been a lot of discussion about the process, what has been done right and what could be done better. As a professional planner, she had a lot of experience working through processes on complex, controversial projects and it was not uncommon to have a small group to work with a consultant or advise staff, but it was essential to include the public in a meaningful way so they have an opportunity to participate in the process, learn the facts and be part of the solution. Somehow that process broke down and comments to the Planning Board and City Council indicated there was a problem with the process. She was open to suggestions regarding how to move forward but it was clear citizens want to participate, the process needs to be transparent and be inclusive of all areas of the city and everyone's concerns including single family homeowners. She was troubled by misinformation but recognized that was an example of the lack of communication which can be approved upon. Councilmember Johnson said the Housing Strategy developed by BERK Consulting is a compendium of all the options in the region that have been tried but it does not focus on Edmonds and not everything applies to Edmonds. For example, Edmonds does not allow 3 -story skinny houses and there are not as many opportunities for urban infill. The City has already rezoned properties to allow greater density which has had the unintended consequence of removing smaller homes and historic buildings. She recalled a statistic that for every 100 homes bulldozed, 500 new units are built. It was her impression that new construction attracts new buyers but that may not be what the community needs. She was most concerned about seniors living on fixed incomes and programs and opportunities to help them stay in their own homes as well as housing for veterans and disabled individuals. The Housing Strategy needs to address that segment of the population, but it does not need to address the demands of the entire region, only what is best for Edmonds. Councilmember Johnson said it was difficult to consider Option 6 when she only received it tonight. She was willing to put off the Housing Strategy and start again in 2020 because a lot of important work needs to be done by the planning department although she was interested in hearing staffs proposed timeline if the strategy proceeds. She was concerned that projects that began 8-10 years ago have not been completed such as the subdivision and Planned Unit Develop ordinances. She was leaning toward Options 3 and 4; if the City moved quickly and effectively, it would be possible to pause the strategy and do a major rewrite, but she questioned why. The 2019 deadline in the Comprehensive Plan is self-imposed; it may be preferable to redefine the City's needs and how to proceed to ensure there is a robust process. She was reluctant to add 7 new people to the existing committee, anticipating it would be difficult for 18 people to be efficient and work together. Councilmember Johnson emphasized the need to discuss next steps and to clarify misinformation. She heard several things during public comment that did not register with her that need to be clarified. She thanked the public who have attended Council meetings and provided comment and she appreciated the community's involvement. Councilmember Fraley-Monillas said in listening for the past several weeks, she was concerned with any Housing Strategy at this point. She preferred to take a timeout because the Council has lost the public's trust. Using GMA as a reason for developing a Housing Strategy is probably inappropriate. Edmonds has primarily mid -income housing and above. What needs to be considered is senior housing, veterans housing, housing for the disabled and low-income housing. The Housing Strategy touched on those but did not Edmonds City Council Approved Minutes November 13, 2018 Page 9 outline a way to address housing for people living in the margins in Edmonds. Highway 99 is a great place to address this via transit -oriented development. Councilmember Teitzel was encouraged by Council President Nelson's comments because Option 6 addressed his concerns. He believed a Housing Strategy could be developed in a disciplined, thoughtful and meaningful way in 2019 as identified in the Comprehensive Plan and include robust and complete public input throughout the process. If he believed there was no pressure in the market to address this issue and to create a strategy to encourage additional housing options for those who need them, he would not be as not concerned but there is pressure. Housing prices are increasing faster than income and more and more people are being pressured out of their homes which he did not want to see happen in Edmonds. He wanted to provide options for seniors, disabled, working wage families, etc. to stay in Edmonds. A good robust, well - thought out policy can be achieved in 2019 if it is done right and Option 6 lays out a process to get there. Councilmember Buckshnis said a code rewrite was started 11 years ago, many economic pressures can be addressed in the code. She referred to the building on 3rd Avenue that was permitted without onsite parking via a loophole in the code. The clearcutting the is occurring in subdivisions is also happening due to loopholes in the code. She questioned what was more important, the Housing Strategy or creating a visionary group and working on the code. Option 6 takes staff time away from the code rewrite. Deficiencies in the code allow 100 -year old trees to be cut down and replaced with houses. She preferred to prioritize what is important and the most important thing is to focus on the code rewrite which can address senior housing, low income housing, etc. Councilmember Fraley-Monillas said she has heard Councilmembers refer to but not actually talk about rent control which is being done in other cities. She suggested the Council looking into what rent control means and how other cities are having success with it to serve people who need housing and cannot afford housing in Edmonds. Council President Nelson asked City Attorney Jeff Taraday what the process would be for the Council to amend the Comprehensive Plan to change the requirement to adopt a Housing Strategy from 2019 to 2021. Mr. Taraday said a Comprehensive Plan amendment on any subject needed to be docketed before the end of 2018. The City Council could do that via adopting a resolution identifying an amendment to be considered in 2019; the Council basically has a month and a half to docket something. Councilmember Johnson asked Councilmember Tibbott to relay the information he shared with her regarding rent control. Councilmember Tibbott said it was his understanding rent control was not allowed in the State of Washington, so it was not an option the Council could consider. Councilmember Fraley-Monillas asked Mr. Taraday for a formal ruling on the legalities of rent control and whether it was legal in Washington. Mr. Taraday said his general understanding was the same as Councilmember Tibbott's, but he will research and report to the Council. Mayor Earling emphasized the Housing Strategy is a draft, it is not a plan, not a finality; it is a strategy that will eventually come forward for discussion. He asked Ms. Hope to summarize the memo she provided the Council. Development Services Director Shane Hope explained the Comprehensive Plan adopted in 2015 includes a statement calling for a Housing Strategy to be developed by 2019 that would address affordable housing for a range of income levels and meet diverse housing needs which she always assumed meant seniors, veterans, people with disabilities, and others with special needs, although it could include artist housing, etc. In 2017, work began on draft a Housing Strategy. Mayor Earling appointed a task force that consisted mainly of housing professional types, about half of whom live in Edmonds and a consultant worked on data Edmonds City Council Approved Minutes November 13, 2018 Page 10 and ideas. The list of ideas included items that were not necessarily appropriate for Edmonds, but some were. The intent was to develop a strategy and framework and go through a public process. Some of that work was done and she acknowledged it could have been done more thoroughly. A draft Housing Strategy was developed with the intent of further revisions and a lot of public input. Ms. Hope advised she developed a Citizens Housing Advisory Committee to advise her on next steps but that is not necessarily the only task force or opportunity for public input; there will be opportunities for a great deal more public input. As Councilmember Johnson mentioned, it is not uncommon to have a small group begin the discussion. She listed the members of the Citizen Housing Advisory Committee: Treg Camper, Alicia Crank, Lindsey Crawford, Brian Goodnight, Pat McDevitt, Marla Miller, Dave Teitzel, Bob Throndsen, Rob Van Tassell, and Diana White. The committee members are all local citizens with concerns about the draft Housing Strategy; the intent of the Advisory Committee was to advise her on the process and keep things moving forward while more public input is sought. The committee's meetings are open to the public and will be advertised in advance. Updates will be posted on the website devoted to housing issues and the Housing Strategy process. She recognized questions and answers and opportunities for people to share their ideas was an important part of the process. She looked forward to working with the public, the City Council and the Mayor. Councilmember Mesaros asked the purpose of the Advisory Committee's November 8 meeting and the outcomes of the meeting. He pointed out the members of the Advisory Committee were selected to advise her, not the Council or the Mayor. Ms. Hope agreed it was intended to be advisory to her so she could continue working on the issues. The purpose of the meeting was to gather initial input from a variety of citizens with different perspectives. She viewed this as only the beginning; she would like to see focus groups on a variety of issues such as seniors' needs, young families' needs, veterans' needs, etc., a single task force cannot adequately resolve or develop answers to all those issues. The intent is to get feedback and then go back to the public. Outcomes of the meeting included discussion of what a strategy is and discussion about the vision for the future, particularly related to housing. She offered to share her notes from the meeting. The goal is housing for a range of people and livable, walkable future. Mayor Earling declared a brief recess. 8:30-8:40 CRITICAL AREAS ORDINANCE REPORT Environmental Program Manager Kernen Lien presented Critical Areas Biannual Report #4 • ECDC 23.40.055 o The director will provide a report to the city council during the first and third quarter each year, summarizing critical area decisions that have been made since the previous report. The report will include information such as the number and type of critical area decisions that have been made, including information on buffers and enhancements approved for each applicable decision, a description of each approved restoration project, and other information specifically requested by the council following the previous report. • A critical area determination is the first review of a property to determine whether a waiver would be issued if there is no critical area and or study required if there is a critical area on the site • Critical area Determinations since May 2018 o Exhibit 1 contains spreadsheet of critical area determinations since May 2018 ■ 94 applications for critical area determinations since September - 47 "Waivers" Determinations - 40 "Study Required" Determinations - 7 Pending o Study Required a 37 - Geo Hazard (erosion, landslide, and seismic) Edmonds City Council Approved Minutes November 13, 2018 Page 11 ■ 7 — Stream ■ 6 — Wetland ■ 2 — Frequently Flooded o Subsequent Critical Area Determinations ■ New critical area determination is required for properties whose previous critical area determination is more than five years old ■ Reduced application fee for subsequent critical area determination ■ 40 Subsequent Critical Area Determinations ■ Six went from "Waiver" to "Study Required" ■ Pre -2005 CAO update determined erosion and landslide hazards differently than current CAO ■ Suggested considering in future CAO update instead of requiring every five years, require if pre -2004 • Critical Area Development Review o Projects on site with a "Study Required" determination requires review for consistency with critical area regulations o Exhibit 2 contains critical area determinations on projects since the May 2018 report • Far right column contains details on the critical area review 0 40 project reviews associated with a study required since May 2018 ■ One Interrupted Buffer Determination — Melody Lane ■ CAO Wetland Amendments o Completed CAO amendments updating wetland regulations consistent with Department of Ecology's 2018 Wetland Guidance Councilmember Buckshnis thanked Mr. Lien for the report, acknowledging it takes a lot of time, but she found it very informative. She asked him to explain why a new critical area determination is required every five years and whether it was because a hazardous area becomes more hazardous in five years. Mr. Lien answered that was one of the code changes. A critical area study is valid for five years; tied to that five years, the code change required critical area determinations every five years which is also valid for five years. The initial critical area determination is $100 and subsequent determinations are $50. He said most of the changes are due to the change from the pre -2004 code so that seemed to be a good timeframe. Councilmember Buckshnis how much a critical area determination cost a property owner. Mr. Lien answered staff does a site visit and makes the initial determination regarding whether there is a critical area. Subsequent determinations are also done by staff. When a development application is submitted for a site with a critical area, further geotechnical studies are required which results in additional cost. Councilmember Buckshnis observed there were quite a few hazardous tree removals. She asked whether hazardous trees were identified by an arborist hired by the property owner. Mr. Lien reviewed the requirements for removal of hazardous tree: • Allowed activity pursuant to ECDC 23.40.220.C.8.2 • Hazard documentation required • Trees must be replaced at a ratio of 2:1 ■ Replacement trees must be native and indigenous • Arborist report not required if a tree is obviously dead Councilmember Buckshnis asked if a staff arborist reviews the arborist report. Mr. Lien answered the City does not have an arborist to review the arborist reports. Edmonds City Council Approved Minutes November 13, 2018 Page 12 Councilmember Teitzel referred to the site assessment and functional analysis for the property at 693 Melody Lane that states a wetland rating was not completed. He asked why a wetland rating was not completed and if it had been, could that have affected the size of the setback. Mr. Lien answered the property owner and the wetland consultant had several options including a wetland determination to classify the wetland and determine the buffer. As the corner was 165 feet from the edge of wetland as measured in the aerial photo, he guessed it was a Category 2 wetland which puts in slightly in the buffer. The wetland consultant chose to do the Interrupted Buffer Determination and the wetland category does not matter for that. Councilmember Johnson asked if the goal of identifying critical areas in project reviews was for the purpose of mitigation if there was a critical area. Mr. Lien said it depends on the critical area; development within 50 feet of a steep slope does not necessarily require mitigation, it requires the geotechnical engineer to determine the development does not impact slope stability. Buffer averaging, buffer width reduction, etc. would require mitigation. In development reviews, the critical area determination and the development proposal determine whether any mitigation is required. Councilmember Johnson asked whether there were any denials in this reporting period. Mr. Lien answered no, everything that was proposed was consistent with the CAO. Councilmember Johnson observed sometimes a hazardous tree will not fall and cause destruction if the height is not in a fall zone and dead/dying tree or snags are often beneficial to the environment. She questioned whether the removal of hazardous trees went too far. Mr. Lien answered snags are encouraged; if a hazardous tree is not next to a house, property owners often turn them into wildlife snags to reduce the hazard. He referred to the Basic Tree Risk Assessment Form that includes identifying the targets. For example, if there is a dead/dying tree 200 feet from the house within a wetland buffer and there are no targets, it is not a hazard tree; that is considered in determining whether a tree is a hazard tree. Councilmember Johnson asked if topping could be considered to avoid the hazard, recalling examples of that in Yost Park. Mr. Lien said creating a snag is an option rather than cutting down a tree. (Councilmember Fraley-Monillas discontinued her participation by phone at 8:52 p.m.) 7. BUDGET PRESENTATIONS 1. PRESENTATION OF THE PROPOSED 2019-2024 CAPITAL FACILITIES PLAN/CAPITAL IMPROVEMENT PROGRAM City Engineer Rob English reviewed: Transportation Capital Pro am • DP 97 — 1,500,000: 2019 pavement preservation program o 3.7 lane miles 0 20 curb ramp upgrades o $900,000 REET 125/126 o $500,000 General Fund o $100,000 Street Fund 112 DP 98 - $251,850 - 2381'' Island and ADA Curb Ramps o $211,000 CDBG grant o $50,000 REET 0 238t' island -ADA compliant walkway and landscaping 0 12 curb ramp upgrades Citywide pedestrian enhancement o $1.49M federal grant ■ DP 99 - $429,000 — Additional funding for replacement of pole and mast arm Edmonds City Council Approved Minutes November 13, 2018 Page 13 - Awaiting decision on TIB grant which would replace DP 99 • DP 110 - $1,181,873 (carry -forward) ■ 9 intersections ■ Signal conversion at SRI 04/232 ■ HAWK Signal at SR524/841h Ave ■ Rectangular Rapid Flashing Beacons ■ 23 curb ramps • DP 100-$50,000: 2019 Ped Safety Program • DP 101-$70,000: Traffic Signal Upgrades • DP 102-$42,500: Audible Pedestrian Signals • DP 103-$20,000: Guardrail Installations • DP 104-$110,000: Admiral Way Ped Crossing • DP 105-$6,043,500: Dayton 3rd Ave to 9th Ave o [$200,000] Dayton Sidewalk west of 8th Ave • Awaiting TIB grant • DP 106-$1,290,870: 84th Ave Overlay (220th -212th) • DP 107-$10,000: 76th Ave/212th Intersection • DP 108-$8,750: 238th St Walkway (Hwy99-SR104) ■ DP 109 - $37,380: Hwy 99 Revitalization Phase 1 (220th -224th) o Begin 30% design/environmental review • DP 111 - $3,000,000: Waterfront Connector o Begin final design/environmental design o $6M State funding to be available in July 2019 ■ Requesting early funding authorization Utility Funds • Five Corners Reservoir Recoating Project o DP 13 - $492,400 and DP 22 - $1,302,600 (carry -forward) ■ 1.5 MG reservoir to be completed by Dec 2018 ■ Working with contractor on extra costs ■ 3.0 MG reservoir to be completed by June 2019 ■ Hoping better condition than 1.5 MG but unknown ■ Additional funds will be required to complete project, reason for two decision packages ■ Repairs are sequenced to ensure one reservoir is always operational Water Utility Capital • DP 19 - $980,000: Swedish & 76th Waterline • DP 20 - $300,000: Waterline Overlays • DP 21 - 15,000: 2019 Waterline Replacement • Dayton Street Pump Station o DP 25 - $500,000 ■ Awaiting notification from FEMA on grant application ■ Also requesting $500,000 from legislature due to benefits to Marsh and to address flooding in ferry holding lanes ■ Decision package will provide stormwater funding in lieu of grant or legislature funding o DP 28 - $907,000 (carry -forward) o $2.4M in sewer capital funds Storm Utility Capital o DP 26 - $375,000 Ballinger Regional Facility Pre -design Edmonds City Council Approved Minutes November 13, 2018 Page 14 ■ If the pre -design identifies a regional detention facility, some of the cost could be recovered by via latecomer agreements from development on Hwy 99 o DP 27 - $1,000,000: Phase 1 replacement project o DP 29 - $76,125: Seaview Infiltration Project o DP 30 - $441,000: Citywide Drainage Improvements o DP 32 - $200,000: Stormwater Comprehensive Plan Mr. Williams reviewed: • DP 35 - $3,670,438 (City's share = $1.25M) o Phase 6 Carbon Recovery Design o Diagram of P -Five Pyrolisis System that will replace incinerator Mr. English reviewed: Sewer Utility Capital • DP 38 - $500,000: Lake Ballinger Trunk Sewer Study • DP 42 - $165,000: Lake Ballinger Trunk Study (CF) • DP 39 - $5,000: 2018 sewer replacement • DP 40 - $706,680: CIPP Sewer rehabilitation ■ DP 41 - $75,000: LS# 1 Metering & Flow Study • DP 43 - $75,000: 2019 Sewer Overlay • DP 44 - $5,000: 2019 Sewer Replacement Project Mr. Williams said there are three big, expensive sewer projects, the pyrolysis project, the LS#1 Metering and Flow Study, and the Lake Ballinger trunk line which is behind the homes, old, has grade issues and likely structural issues. The project funds include a pump -around to dry out the line and identify the problems and design a solution. The LS#1 Metering Flow Study identified a number of options; the best option is to eliminate the pump station due to its proximity to Puget Sound and install a gravity line. Consideration will need to be given to how to sequence and fund these three big sewer projects next year. Councilmember Buckshnis expressed concern staff was giving their presentation with decision packages that did not tie to the CIP/CFP. If the Council approved the CIP/CFP, she asked if it would be giving carte blanche approval to all the projects in the CIP/CFP that are not decision packages. For the past eight years, staff has reviewed the CIP/CFP line by line and now it was presented using decision packages. She requested a copy of staff's PowerPoint presentation. Mr. Williams said there are a lot of projects on the CIP/CFP; for presentational purposes, staff tried to identify projects of interest, but he was happy to delve deeper. Councilmember Buckshnis asked why the review of the CIP/CFP was not done the same way it was done in the past. Parks & Recreation Director Carrie Hite said last year was the first year decision packages were done for capital projects and that continued this year. Recognizing there was some confusion last year with the CIP/CFP and decision packages, staff decided to include decision packages in the presentation. Parks' decision packages all align to the CIP for 2019. Mr. English said for the most part, that was also true for Public Works. Councilmember Buckshnis said the decision packages for street paving does not identify the funding source and she did not think REET funds could be used for street paving. Ms. Hite explained both REET 125 and 126 can be used for street paving. Mr. Williams said funding from both sources has been used for several years. Councilmember Buckshnis requested next year staff provide Council their PowerPoint presentation in advance of the meeting. Councilmember Teitzel referred to DP 99, funding pedestrian safety improvements at nine intersections including three on state routes. He recalled Councilmember Fraley-Monillas' interest in a crosswalk on Highway 99 north of 23 81''. He acknowledged DP 99 would not address that and asked if there was a request Edmonds City Council Approved Minutes November 13, 2018 Page 15 for funding for a crosswalk in that area. He agreed there was a safety issue in that area with people running across six lanes of high-speed traffic. Mr. English answered there was no active grant application at this time although it could be pursued in the future. Councilmember Teitzel asked whether the City or the State would pursue funding for such a project. Mr. Williams answered the City would need to pursue the funding. Councilmember Teitzel asked if staff foresees such a request in the not -too -distant future. Mr. English answered staff's recommended focus for the existing funding is on Phase 1 which is 2201h to 224th. There would be challenges with installing a safe pedestrian crosswalk across the seven lane Highway 99. Typically, a crosswalk across that many lanes would be a signalized intersection not a HAWK signal; consideration would need to be given to how to make such a crossing work. Parks & Recreation Director Carrie Hite explained there was more specificity in the decision package narratives in the budget book. She reviewed: Parks CIP/CFP 2019 o DP 114 - $4,298,266: Waterfront Development/Promenade/Walkway ■ $3.1 M carry -forward ■ Other funds sources include REET 125/126, park impact fees and State grants ■ Includes %2 the cost of frontage improvements (other half is in DP 128) • DP 115 - $1,320,000: Civic Design Development, permitting o In process of second phase of geotech due to high water table and peat found during utility line replacement o Designing around the Boys & Girls Club building footprint ■ Expect to return to Council early next year with long-term land lease with the Boys & Girls Club • DP 116 - $100,000: Edmonds Marsh • DP 117 - $40,000: City Park Walkway (along north side of field from 3rd Avenue to spray pad) • DP 118 - $155,000 (carry -forward): Community Garden • DP 119 - $20,000: Fishing Pier Parking Lot ■ DP 120 - $120,000: Seaview Play Area • DP 121 - $35,000 (carry -forward): City Gateway Replacement • DP 122 - $175,000 (Verdant Grant): Outdoor fitness zone at Mathay Ballinger Park ■ DP 123 - $20,000: Flower Pole Replacements • DP 124 - $50,000: 4" Avenue Cultural Corridor • DP 125 - $10,000: Yost Park/Pool • DP 126 - $20,000 (carry -forward): Mathay Ballinger Park Trail • DP 127 - $200,000: Land Acquisition • DP 128 - $250,000: Waterfront Center Support — Parking Lot, frontage improvements Councilmember Buckshnis commented the Park decision packages in the presentation do not match the decision packages in the budget. With regard to the Marsh and land acquisition, she asked if consideration has been given to purchasing some of the Unocal site when it transfers WSDOT. The CIP/CFP shows $1.2M in 2022 for the Marsh. Ms. Hite said that is a discussion the Council can have; the property has not transferred yet and WSDOT is in the process of discussing their long-range plan with the community. Councilmember Buckshnis said Council may want to move the funding from 2022 to 2020. Councilmember Buckshnis observed the balance in park impact fees is $1.8M. Ms. Hite explained a lot of that is programmed in 2019 for the Waterfront Redevelopment and Civic. Councilmember Buckshnis asked who determines how park impact fees are used. Ms. Hite said the current balance in the fund is from the inception of park impact fees and is being programmed via CIP process. She looks at the projects, determines which may be eligible for park impact fees as well as matched with REET and grant funds. Some of the park impact fees need to be spent in 2019 as it is the sixth year since park impact fee were imposed. If those funds are not spent, they must be returned. Edmonds City Council Approved Minutes November 13, 2018 Page 16 Councilmember Buckshnis questioned spending $155,000 for a community garden. Ms. Hite said the budget was originally $200,000 which was reduced to $155,000. Councilmember Buckshnis asked if the $155,000 was to purchase the property. Ms. Hite answered no, it was to create the garden; the site is in poor condition and needs safety fencing, clean up, goats to eat the blackberries, etc. Councilmember Buckshnis recalled the Garden Club did a community garden for $25,000. Ms. Hite said she will revise the decision package description to $155,000. Councilmember Teitzel referred to DP 113 regarding Civic, observing there are substantial funds in the budget for 2019 but none for the existing Boys & Girls Club building. He has heard the building is in poor condition and may have to be removed to make way for a new Boys & Girls Club. He asked if any of that work would occur in 2019 and if so, where those funds were expressed. Ms. Hite explained the Boys & Girls Club building is leased to the Boys & Girls Club through 2020 and their intent is to remain in the building until 2020. There have been discussions with Boys & Girls Club about remaining on site and the Master Plan allocates space to the Boys & Girls Club. It would be the Boys & Girls Club's responsibility to demolish the building and build a new building or rehab the existing building. Civic is being designed around the Boys & Girls Club building and asphalt basketball court and they will remain as an as -in condition. In response to decision packages not matching the CIP/CFP, Mr. Williams said funds are transferred into the Street Construction Fund 112 for the pavement preservation program. In addition, the recommendation is to use 15% of the gas tax revenue supplemented by REET revenues to provide $100,000 for the pavement preservation program. Councilmember Johnson referred to carryover in the land acquisition fund, noting not all the funds were spent in 2018. She asked how much would be left over and whether it could be carried forward into 2019. Ms. Hite estimated the entire $200,000 would be spent in 2018 to purchase the property she mentioned previously. If not, the first budget amendment in January could identify capital carryover that was not spent in 2018 but was projected to be spent in 2019. Ms. Hite displayed a bar chart of grant awards 2012-2018 for Parks and Public Works, noting the CIP includes spending authority for grants as well as City funds. Mr. Williams summarized grants obtained during that period total approximately $55 million. 2. 2019 BUDGET PRESENTATIONS - REVENUE SOURCES Finance Director Scott James reviewed Staff's Recommended Proposed Budget Book Chanaes: Edmonds City Council Approved Minutes November 13, 2018 Page 17 STAFF'S RECOMMENDED PROPOSED BUDGET BOOK CHANGES Item # Budget Book Page # Description Cash Increase Decrease GENERAL FUND 1 New Item 43 City Clerk Benefits Understated 15,125 2 New Item 20 Culture & Recreation — Program Revenue $45,000 3 New Item 57 SnoCo DEM Former ESCA /SERS $5,245) 4 New Item 57 SnoCo 911 former SNOCOM) Merger Savings $169,180 5 New Item DP 95 Reduce Contribution to Sno Health District to $1/ca ita $42,000 Impacts to General Fund Ending Cash 145,810 Fund 017 Marsh Restoration and Preservation 6 124 Add Donation Revenues $6,800 Impacts to Fund 017 Ending Cash $6,800 Fund 112 Street Construction Edmonds City Council Approved Minutes November 13, 2018 Page 17 7 DP 97 Correct pavement preservation expense for General Fund Transfer by increasing Fund 112 expense $500,000 Impacts to Fund 112 Ending Cash $500,000) EDMONDS HOMELESSNESS RESPONSE FUND 018 1 61 Move $250,000 Transitional Housing budget to REET Fund 125 $250,000 Impacts to Fund 018 Endin Cash $250,000 REET 2 FUND 125 1 167 $250,000 for Transitional Housing ($250,000 Impacts to Fund 125 Ending Cash ($250,000) Mr. James reviewed: • Context o The 2019 Proposed Budget acknowledges that the strong national economy is benefiting Edmonds o Our estimated 2018 operating revenues are 4.3% higher than 2017 o The 2019 proposed operating revenues will slow to a 3.1% increase over 2018 o Increasing property values o As 2019 starts to unfold, we will need to closely monitor development related revenues o November marks the 113th month of sustained economic growth • Economic Environment o Puget Sound economy continues to be one of the healthiest in the country o Home values are not seeing increases like we were experiencing o Housing sales remain healthy o For 2019, anticipate modest growth now and moderating further over the next couple of years • Graph of Seattle area versus National home price increases (Seattle Times 8/28/18 - Source: S&P/Case-Shiller Home Price Indices) o Seattle -area now nation's No. 2 fastest -rising housing market o Although Seattle -area home price increases no longer lead the nation, they continue to outpace the national average in year -over -year change • Seattle Area: 12.8% increase from June 2017 to July 2018 • National: $6.2% increase from June 2017 to July 2018 ■ Graph of Greater Seattle Area Unemployment Rates September 2008 — September 2018 o April 2008, Greater Seattle Area Unemployment rate hit its lowest pre -recession rate of 2.8% ■ Climbs as high as 9.9% in the beginning of 2010 ■ Current rate is 3.5% as of September 2018 o Since peak unemployment in early 2010, the Greater Seattle Area unemployment rate has been trending significantly better than the national unemployment rate ► Washington State Unemployment by County Sept 2017 versus Sept 2018 o In April 2007 the Washington State Unemployment pre -recession rate was at its lowest at 4.6% • Climbed as high as 10.4% in November 2009 • Current rate is 4.6% as of September 2018 o In September 2017 Snohomish County's unemployment rate was 4.3% and 3.7% in September 2018 • Revenue Trend analysis bar graph (all funds) 2015 — 2018 o Chart tracks movement of revenue between categories • Revenue Trend Analysis (all funds) o Summary: ■ Taxes in 2015 accounted for $32,252,000 and anticipated to increase to $34,419,000 in 2019 Economic condition dependent revenue such as License & Permit revenues experienced growth in 2016 and 2017 but begins to slow in 2018 and 2019 Edmonds City Council Approved Minutes November 13, 2018 Page 18 Total revenues in 2015 were $77M and are projected to increase to $92M in 2019 Taxes account for 42% of total revenue in 2015 and are projected to decrease to 38% in 2019 • Pie chart of Revenues by Type o Charges for Services: 37.53% o Taxes: 37.10% o Fines and Penalties: 0.69% o Miscellaneous: 5.55% o Transfers -In: 5.56% o Other Financing: 0.44% o Licenses and Permits: 2.56% o Intergovernmental: 10.57% • Expenditure Comparison (2017-2019 budget) o Summary: ■ 2019 expenses are anticipated to grow approximately 19% or $17.2M over what the City is projecting to spend this year ■ Compared to the 2018 budget, 2019 increases by $8.8M ■ Majority of this increase is unexpended funds in 2018 that will carry -forward into 2019: - Street Construction Fund - $2.1M - Storm Utility - $2.7M - Sewer - $3M ■ Pie chart of Expenditures by Type o Other Services and Charges: 35.95% o Intergovernmental: 4.85% o Capital Outlays: 22.31% o Debt Service: 4.22% o Salaries and Benefits: 28.61% o Supplies: 4.06% • 2018-2019 Comparison - General Fund Revenues 0 2018 General Fund operating revenues are projected to increase by 3.2% over 2017 0 2019 General Fund operating revenues are projected to increase by 0.3% over 2018 ■ Revenue Trend Analysis bar graph (General Fund) o Tracks movement of revenue between categories o Illustrates the degree of dependency on each source of revenue • Revenue Trend Analysis spreadsheet (General Fund) o Summary: ■ Taxes account for 74% of overall revenues in 2015 and 75% in 2019 ■ Economic condition dependent revenue such as License & Permit revenues increased in 2016 and 2017 and begin moderating in 2018 and 2019 • General Fund Key revenues Revenue YE Estimate Pro9 Variance % Discussion Prove Tax $10,368,000 $10,548,203 $180,203 1.7% Includes 1% Increase EMS Levy Tax $3,975,000 $4,044,220 $69,220 1.7% Includes 1% increase Sales Tax $8,100.2000 $7,825,000 $275,000) 1 -3.4% 1 Record growth moderating • Property Tax Revenues o Summary ■ Total Assessed Value in 2019 is $10,250,720,519 ■ The Snohomish County Assessor's Office is adding nearly $67,202,400 for new construction or $76,510 in regular property tax revenue from new construction • Graph of Sales Tax Revenues Edmonds City Council Approved Minutes November 13, 2018 Page 19 0 2008: $4,852,373 0 2009: $4,425,996 0 2010: $4,468,237 0 2011: $4,690,244 0 2012: $5,007,511 0 2013: $5,429,060 0 2014: $5,976,940 0 2015: $6,811,908 0 2016: $6,905,124 0 2017: $7,409,525 0 2018: $8,100,000 (YE estimate) 0 2019: $7,825,000 (budget) • Pie Chart of General Fund Expenditures o Non-Departmental: $13,402,411 o City Council: $376,647 o Municipal Court: $1,075,638 o Police: $11,703,250 o Community Services & Economic Dev: $666,232 o Development Services: $3,228,156 o Human Resources: $590,331 o Parks & Recreation: $4,276,226 o Public Works: $610,480 o Facilities Maintenance: $2,395,789 o Engineering: $2,713,070 o Mayor's Office: $295,155 o City Clerk: $670,295 o City Attorney: $889,550 o Finance: $1,236,705 • Graph of REET Revenues 0 2008: $1,327,474 0 2009: $1,006,607 0 2010: $1,158,112 0 2011: $1,087,998 0 2012: $1,791,474 0 2013: $1,538,602 0 2014: $1,866,320 0 2015: $2,743,380 0 2016: $2,588,124 0 2017: $3,019,706 0 2018: $3,500,000 (YE Estimate) 0 2019: $3,080,000 (budget) COUNCILMEMBER MESAROS MOVED, SECONDED BY COUNCILMEMBER TEITZEL, TO EXTEND THE MEETING UNTIL 10:15 P.M. MOTION CARRIED UNANIMOUSLY. Councilmember Buckshnis said page 12 of the budget book shows property tax revenue of $14,345,500 which differs from the amount in the presentation. Mr. James advised the amount in the budget book includes property and EMS taxes. Councilmember Buckshnis observed the revenue from the two REET funds are also combined. Mr. James agreed they were. Edmonds City Council Approved Minutes November 13, 2018 Page 20 Councilmember Buckshnis asked how the Council should provide comments/input regarding decision packages. Mr. James said last year the City Council suggested changes from the dais; he recorded the suggested changes and the Council voted on them when the budget neared adoption. Council President Nelson said Councilmembers could submit budget amendments at any time. Beginning next week, he will provide time in the agenda for Councilmembers to begin introducing amendments. Mr. James said suggested amendments could also be emailed to him and he would include them in a list of Council Requested Amendments. Councilmember Teitzel referred to page 13 of the budget book, Strategic Outlook General Fund Fund Balance and expressed concern the 2018 projection is for a 38.1% General Fund Fund Balance which steadily declines to 16.05% in the 2023 outlook. He asked what that was attributed to and what type of risk that presented to the City. Mr. James explained the Strategic Outlook does not assume increases in revenue from sources such as a voted increase in the EMS levy or an increase in the TBD fee which could be used to cover the proposed sidewalk crew. He was cautious about adding an ongoing service such as the sidewalk crew without ongoing revenue. Councilmember Teitzel summarized Mr. James' response, the Strategic Outlook does not assume corrective action to correct the trend. Mr. James agreed, commented it would be unfair to include that in the Strategic Outlook without first having a discussion with the Council and Mayor. 9. MAYOR'S COMMENTS Mayor Earling reported the Holiday Market began last Saturday. There were more vendors and a large turnout; he anticipated great success. 10. COUNCIL COMMENTS Councilmember Teitzel was encouraged by what he saw last week in the uptick in the trend of youth voting. That has been a concern in the past but this year there was a strong performance. He applauded young people for voting. Councilmember Mesaros announced his appointment of Kevin Harris to the Economic Development Commission and described his background which includes working as a senior facilitator with the William D. Ruckelshaus House Center and an assistant professor at the UW and WSU teaching public policy. There were six well-qualified applicants for the position. Councilmember Johnson said communications between Council and staff could be better. She was frustrated that the Council did not know in advance about the Housing Advisory Committee meeting last week and that the Council was not told in advance that committees would not meet tonight. She had a conversation with Councilmember Tibbott and Mr. Williams during the break and they agreed there may need to be a Public Works and Parks Committee meeting prior to the December meeting, possibly next week. She expressed interest in going into greater depth on some of the CIP/CFP projects. Councilmember Buckshnis agreed with Councilmember Teitzel's comment about youth voters, finding it exhilarating to see more women and a very diverse of group of people voted in. 11. CONVENE IN EXECUTIVE SESSION REGARDING PENDING OR POTENTIAL LITIGATION PER RCW 42.30.110(1)(i) This item was not needed. Edmonds City Council Approved Minutes November 13, 2018 Page 21 12. RECONVENE IN OPEN SESSION. POTENTIAL ACTION AS A RESULT OF MEETING IN EXECUTIVE SESSION This item was not needed. 13. ADJOURN With no further business, the Council meeting was adjourned at 10:12 p.m. DAVI O. EAR NG, MAYOR "PASSEY;,,RK Edmonds City Council Approved Minutes November 13, 2018 Page 22