20190702 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES
July 2, 2019
ELECTED OFFICIALS PRESENT
Dave Earling, Mayor
Adrienne Fraley-Monillas, Council President
Michael Nelson, Councilmember
Kristiana Johnson, Councilmember
Thomas Mesaros, Councilmember
Diane Buckshnis, Councilmember
Dave Teitzel, Councilmember
Neil Tibbott, Councilmember
CALL TO ORDER/FLAG SALUTE
STAFF PRESENT
Phil Williams, Public Works Director
Carrie Hite, Parks, Rec. & Cult. Serv. Dir.
Patrick Doherty, Econ. Dev & Comm. Serv. Dir.
Scott James, Finance Director
Jeff Taraday, City Attorney
Scott Passey, 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" Avenue North, Edmonds. The meeting was opened with the flag salute.
2. ROLL CALL
City Clerk Scott Passey called the roll. All elected officials were present.
3. APPROVAL OF AGENDA
COUNCILMEMBER TIBBOTT MOVED, SECONDED BY COUNCILMEMBER TEITZEL, TO
APPROVE THE AGENDA IN CONTENT AND ORDER.
Council President Fraley-Monillas requested the order of Items 6.1, Fund Balance / Reserve Policy
Discussion, and 6.2, Civic Park Financing, be reversed. Mayor Earling advised Item 4.7, Lynnwood Mazda
Pedestrian Easement and 4.8, Wassall Pedestrian Easement at the NE Corner of 639 2nd Ave, had been
withdrawn by Public Works.
MOTION CARRIED UNANIMOUSLY.
4. APPROVAL OF CONSENT AGENDA ITEMS
Council President Fraley-Monillas requested Item 10 be removed from the Consent Agenda and reminded
that Items 7 and 8 had been removed from the Consent Agenda.
COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCILMEMBER MESAROS,
TO APPROVE THE REMAINDER OF THE CONSENT AGENDA. MOTION CARRIED
UNANIMOUSLY. The agenda items approved are as follows:
1. APPROVAL OF COUNCIL SPECIAL MEETING MINUTES OF JUNE 25, 2019
Edmonds City Council Approved Minutes
July 2, 2019
Page 1
2. APPROVAL OF COUNCIL SPECIAL JOINT MEETING MINUTES OF JUNE 25, 2019
3. APPROVAL OF COUNCIL MEETING MINUTES OF JUNE 25, 2019
4. APPROVAL OF COUNCIL RETREAT MEETING MINUTES OF JUNE 7, 2019
5. APPROVAL OF CLAIM CHECKS AND WIRE PAYMENT
6. ACKNOWLEDGMENT OF CLAIM FOR DAMAGES
9. POSTPONE PUBLIC HEARING FOR 184TH STREET SW STREET VACATION
5. ITEMS REMOVED FROM CONSENT
ORDINANCE LAND USE PERMIT DECISION-MAKING AND QUASI-JUDICIAL
PROCESS (formerly Item 4.10)
Council President Fraley-Monillas advised she removed this item from the Consent Agenda so she could
vote against it.
COUNCILMEMBER MESAROS MOVED, SECONDED BY COUNCILMEMBER TEITZEL, to
APPROVE ORDINANCE NO. 4154, AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, AMENDING VARIOUS PROCEDURES CONTAINED IN THE EDMONDS
COMMUNITY DEVELOPMENT CODE. UPON ROLL CALL, MOTION CARRIED (4-3),
COUNCILMEMBERS JOHNSON, MESAROS, TEITZEL AND TIBBOTT VOTING YES; AND
COUNCIL PRESIDENT FRALEY-MONILLAS AND COUNCILMEMBERS NELSON AND
BUCKSHNIS VOTING NO.
6. AUDIENCE COMMENTS
Pat Waddell, Edmonds, a resident living close to Civic Park and a member of the Project Advisory
Committee, thanked Carrie Hite for her years of leadership on the Civic Park project. She will be missed
by everyone who worked with her on Civic Park over the last several years. It appears the Council is
considering two choices, 1) seek a bond issue for the $3.5M need to complete the City's budget for the
park, or 2) seek a Bond Anticipation Note (BAN) first. She spoke in favor of moving forward with bond
financing for several reasons. First, the Mayor and existing Councilmembers are familiar with the Civic
Park development history. With upcoming elections, there will be a new Mayor and Councilmembers who
will need to get up to speed on the City's business and study the Civic Park background materials before
they will be comfortable making a decision, which may delay the park schedule. Second, the acquisition
and development of Civic Park has been in the Comprehensive Plan since 1976; bond financing will be the
final action in its long history. The City also has a long history of using bonds for legacy projects such as
Marina Beach, the Frances Anderson Center and Brackett's Landing. It is a natural fit to continue with bond
funding to complete Civic Park. Moving directly to bonding allows the City to lock in low interest rates;
delaying a funding decision with a BAN would add fees to the project and delaying a decision also runs the
risk of higher interest rates in the future. She urged the Council to move directly to a decision in favor of
bonding, giving citizens and neighbors the reassurance that there will be a steady ship during these times
of change.
Joe Malan, Edmonds, relayed his and his wife's concerns, they feel like they are in void with regard to
what will happen next and are interested in communication between the City Council and the person
designated to lead Civic Park development. With all the years of planning such as town meetings, surveys,
etc., he questioned when the public will be informed of the strategy for Civic Park. As a neighbor to the
park, it would be helpful to know who will take the torch and move the project. Second, with regard to the
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July 2, 2019
Page 2
funding gap, he expressed support for the muni process. It is an adequate way to move forward and he
recommend the Council pursue it. They also feel the gift catalog is a great idea to solicit funds from the
public. He summarized this is an unbelievable opportunity to create a special place for citizens, a park in
the heart of the City. With all the effort Ms. Hite has put into the park, he suggested the Council consider
renaming it Hite Park.
Lee Kimmelman, Edmonds, referred to last week's discussion about changing the rules about pets in
public places. He supported some of the changes, noting even with the existing rules there is a lack of
enforcement and education of the public such as off -leash dogs. If the regulations are relaxed, education
and enforcement will be required, acknowledging enforcement affected the budget. Next, he recalled about
the Save the Beach effort and discussions about beach access for emergency vehicles. He also recalled
discussion about Hwy 99 and safety at the beach and his comments about the disconnect between safety
and emergency response. The Council agenda included discussion about emergency access to the beach
and he questioned whether emergency access to the beach was the right discussion. A more important
discussion is the long term solution to address increased train and ferry traffic and getting people across the
tracks. Developing a temporary solution just for emergency services is short sighted. He urged the Council
to set the tone now for the next Council, to focus on long term solutions instead of temporary solutions that
will ultimately need to be replaced.
Jim Landers, Edmonds, member of Edmonds South Snohomish County Historical Society, along with
Board Members Ann Wood and Jerry Freeland, informed the Council about a new public exhibit, a cedar
carving done by Ty Juvenil, a Native American artist with the Tulalip Tribes that represents the Edmonds
Marsh as it looked long ago. He circulated illustrations of the carving that will be located in front of the
museum. The Board has been thinking about how to recognize Edmonds' Native American and appreciates
the Council's similar efforts. They have been working with City staff about size and location and work to
be done on the plaza area in front of the museum to accommodate it.
Dick Van Hollebeke, Edmonds, former Councilmember and a member of Civic Playfield Project Advisory
Committee, on behalf himself and his wife, said as longtime residents, they have seen a lot of things happen.
He referred to stressful occurrences in the past 2-3 weeks regarding the Waterfront Connector and the
resignation of two employees, specifically Ms. Hite for whom he had the highest regard. He referred to
things that were aired in public media, commenting part of the problem was the way electeds treat staff.
One of the reasons he ran for Council originally was the Council and staff were at cross purposes. The
Council represents 42,000 people who care about the City and want the best to happen. He had no problem
with disagreeing, discussing, and even arguing but encouraged electeds to treat staff and people who come
before them with courtesy and dignity. With regard to Civic Park and the authorization for funding, he
echoed Ms. Waddell and Mr. Malan's comments, relaying it demonstrates to the public a 3 -year process
and a Master Plan unanimously approved by six members of the Council who were present. The issue of
financing has been thoroughly discussed and he urged the Council to get on with it, to authorize a 20 -year
bond which is affordable and allows future citizens to help pay for it which is appropriate. He urged the
Council to move ahead with unanimity and show the citizens they can pull together.
Cam Tripp, Edmonds, thanked Ms. Hite for her work in Edmonds, commenting his kids love Edmonds'
parks and beaches and he has told his friends in Redmond they are lucky she is coming to their city.
Speaking on behalf of the 12,500 people who have signed the petition, thousands of whom are Edmonds'
voters, the petition is the temporary beach insurance to ensure no funny business happens and the Council
does not go back on their commitment not to build on the beach. He referred to a comment by Council
President Fraley-Monillas in October, "I ask you why DOT, State of Washington and the railroad have all
contributed funds to the success of this project. I believe this to be another shell game being played; only a
matter of time before this emergency access will be routinely used for ferry loading and unloading to benefit
DOT, State of Washington and the railroad. All it takes is a change in Council and hundreds of cars running
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July 2, 2019
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through our downtown neighbors, destroying our way of life." He said the promises that are made about
not building on the beach have an expiration date, the upcoming election, and he and others want to ensure
this decision will stick and promises about funding are adhered to. The 12,500 people who signed the
petition will activate if necessary. Next, he referred to the importance of naming things that aren't named,
recalling orcas have scientific names but they also have names like Waverider and Mike. According to the
inventory, the beach does not have a name; things that are named matter more to people than an area
between certain tidelines and street names. Last week the Council discussed land acknowledgement, this is
an opportunity to go beyond acknowledging the people who were here before us and ask for their help in
naming the beach.
Diana White, Edmonds, representing Hazel Miller Foundation as a board member and a private citizen on
the Civic Project Advisory Committee, encouraged the Council to approve one of the bond financing
options presented tonight so that Civic can finally become the crown jewel of Edmonds. The Hazel Miller
Foundation has always been 100% committed to the redevelopment of Civic, so much so that when the
City's grant asked for $1M, the foundation approved $1.5M. That is how much they believe in the strong
and visionary leadership of Parks Director Carrie Hite and Mayor Dave Earling. The planning, process,
public engagement and the work of City staff and Walker Macy that moved the project from an idea to
where it is today should serve as lesson in how public projects should be in the City. She thanked Carrie
Hite, one of the most capable parks directors in the State for her leadership and said she will be dearly
missed. Multiagency projects like this that bridge together state grants, private foundations and City funding
are difficult and time consuming projects. She urged the Council to keep this project moving forward by
approving one of funding options tonight.
7. ACTION ITEMS
2. CIVIC PARK FINANCING
Parks & Recreation Director Carrie Hite explained she presented to the City Council about a month ago
and to the Finance Committee a few weeks ago. Tonight's presentation is regarding Civic Park financing
options. Several speakers mentioned the history of this project, it has been in the Comprehensive Plan since
1976. When she first joined the City 8'/2 years ago she often heard from the community and the Council
about purchasing Civic and making it a park. She met with Edmonds School District many times; the
property was a buy and hold property for them and they were not ready to sell and liked the arrangement
with the City caring for the property and using it for the community. When the District was ready to sell,
they approached the City due to the First Right of Refusal to purchase the property. Mayor Earling and she
negotiated with the District, staff wrote grants, and the City was able to purchase the property for $1.9M,
considerably less than its value. The City acquired $1.5M in grants and the City contributed $400,000.
Ms. Hite explained once the City purchased the property, a robust public process was created for the 8 -acre
legacy park. In all her years as a parks director, deputy director and other municipal positions, she has never
seen so many people voice their opinion about a park. Hundreds attended open houses and there were
thousands of hits on the online open house. She still has people stop her on the street asking about Civic; it
is in everyone's hearts and minds. Over the past year the City worked on the design process with Walker
Macy and submitted several grants to help fund the development. There is a gap of about $3.OM to $3.5M,
although that is a schematic cost estimate; a closer cost estimate will be available by September. If the
Council proceeds with bond financing, a better number will be available before bonds are sold. She
reviewed:
• Civic Park Funding Options
Projected Expenses' $11,885,400
Projected Revenues $8,830,000
Gap in Construction Budget' $3,055,400
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July 2, 2019
Page 4
Stormwater Mitigation' $ 500,000
Project Funding Gap $3,555,400
' See budget sheet in Council packet for breakdown
'Estimated
Finance Director Scott James relayed the Finance Committee's recommendation to request Council
authority to issue a bond or Bond Anticipation Note (BAN). A BAN is a short-term loan issued in advance
of a future bond issue, and is repaid from the proceeds of the bond issuance. He introduced Scott Bauer,
NW Municipal Advisors, who prepared the bond schedules. Mr. James reviewed:
r Pros and Cos of Issuing Bonds vs. Issuing BAN
o Pros for issuing bonds
1. Take advantage of low interest rates
2. Establish funding for project
3. Also positions City to take advantage timely bidding
o Cons for issuing bonds
1. Current cost estimate is only from schematic design
2. Still deciphering Stormwater mitigation costs
o Pros for issuing BAN
1. Gives us time to finalize costs
2. Establishes intent to fund project
3. Also positions City to take advantage timely bidding
4. Provides cushion to pursue private giving options
o Cons for issuing a BAN
1. Interest rates may go up
2. Change in leadership / Council may delay project
3. Additional borrowing cost
■ All -in interest for Cost Scenarios
Bond Amount
20 Year
25 Year
30 Year
$2.5M
2.88%
3.01%
3.12%
$3.OM
2.84%
2.98%
3.09%
$3.5M
2.81%
2.96%
3.06%
■ Comparison of 20, 25 & 30 Year Bond Debt Service Payments
$2.5 Million Debt Service Pa ments
20 Year
25 Year
30 Year
Pa ment Totals
$3,329,650
$3,596,750
$3,894,150
$ over 20 Year Bond
--
$267,100
$564,500
% over 20 Year bond
0.0%
8.0%
17.0%
$3.0 Million Debt Service Payments
20 Year
25 Year
30 Year
Payment Totals
$3,973,200
$4,303,000
$4,647,050
$ over 20 Year Bond
--
$329,800
$673,850
% over 20 Year bond
0.0%
8.3%
17.0%
$2.5 Million Debt Service Pa ments
20 Year
25 Year
30 Year
Payment Totals
$4,619,950
$5,011,600
$5,402,800
$ over 20 Year Bond
--
$381,650
$782,850
% over 20 Year bond
0.0%
8.3%
16.9%
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Page 5
• Estimated annual debt service schedule illustrating principal, interest and total debt service by year
for $2.5, $3.0 and $3.5M for 20, 25 and 30 years
• Comparison of Average 20, 25 and 30 year bond Debt Service payments
$2.5 Million Debt Service Payments
20 Year
25 Year
30 Year
Average Payment
166,483
$143,870
$129,805
$ over 20 Year Bond
--
$(22,613)
$(36,678)
% over 20 Year bond
0.0%
-13.6%
-22.0%
$3.0 Million Debt Service Payments
20 Year
25 Year
30 Year
Average Payment
$198,660
$172,120
$154,902
$ over 20 Year Bond
--
$(26,540)
$(43,758)
% over 20 Year bond
0.0%
-13.4%
-22.0%
$2.5 Million Debt Service Payments
20 Year
25 Year
30 Year
Average Payment
$230,998
$200,064
$180,093
$ over 20 Year Bond
--
$(30,934)
$(50,904)
% over 20 Year bond
0.0%
-13.4%
-22.0%
Ms. Hite reviewed the City's historical pattern of issuing bonds:
• 12/31/19 Outstanding Governmental Debt
0 2012 LTGO Refunding Bonds
■ 1993 Public Works Building
■ 1993 City Hall, Library, Frances Anderson Center, Streets
■ 2001 Marina Beach
■ 2002 Performing Arts Center)
0 2016 Chase Bank Loan
■ 2006 HVAC Project
■ 2007 Frances Anderson Center seismic
■ 2007 Energy Conservation
o Public Works Trust Fund Loan
■ 2003 Street Construction Loans
■ 2004 Street Construction Loans
■ 2006 Street Construction Loans
o Total $5,500,607
Ms. Hite summarized the City has not issued bonds since 2007 and has the capacity. There has been a
tradition to issue bonds every 5-8, interest rates are low and it is timely to consider issuing bonds.
Mr. James reviewed
Graph illustrating outstanding governmental debt before bonding for civic park
o Approximately $5.5M outstanding in 2019
o Current issues will be retired in 2030
Spreadsheet illustrating debt service payment costs
o Current Annual Debt Service Requirements (2019-2039) from Fund 001, Fund 126 and Total
o Estimated Debt Service w/$3.5M Civic Bond + current annual debt service
■ With Civic Park bond, debt service costs in 2020 would increase from $523,391 to
$624,067
— In 2021 debt service costs would be $627,066
— In 2022, debt service costs decrease to $459,596
Edmonds City Council Approved Minutes
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Page 6
• Graph of annual debt service comparison before and after Civic Park Bond
• Graph of outstanding governmental before and after Civic Park Bond
Next steps:
1. Council Decision on Bonds vs. BANS
2. Council authorization for Administration to engage Bond Counsel and Financial Advisor
3. Parks Department to determine final costs
4. Parks Department to implement private giving options
Council President Fraley-Monillas asked which two bonds will be paid off in the next few years. Mr. James
answered a portion of the 2016 Chase Bank Loan; when the debt was refinanced, several issues were rolled
into the refinancing so only a portion will be paid off. Council President Fraley-Monillas observed the 2016
Chase Bank Loan is the HVAC Project, Frances Anderson Center Seismic and Energy Conservation. She
asked which of those would be paid off by 2026. Mr. James said the Frances Anderson Center Seismic.
debt will be paid off by 2021. Council President Fraley-Monillas about the HVAC Project and Energy
Conservation. Mr. James said he did not have the payment schedule for other debt with him tonight. He
offered to send it to Council tomorrow.
Councilmember Buckshnis thanked Mr. James for all the work done on this, and was glad to see the cost
comparison on the 25 and 30 year bonds. She pointed out the Performing Arts Center bond is a
receivable/payable between the City and PFD so it is technically a wash. With regard to bond vs. BAN, she
preferred bonds due to the rates and an amount of $3.5M as she anticipated costs will increase due to
unknowns such as the water table and peat.
Councilmember Buckshnis asked if there were plans to refund/refinance any bonds in the near future. Mr.
Bauer said the next call date on the bonds is 2022 so that is the next opportunity. Councilmember Buckshnis
anticipated rates will stay stable or decrease due to the volatility in Washington D.C.
Councilmember Teitzel thanked staff for their work. He also favored bonding because rates are artificially
low and he anticipated they will increase in the not too distant future. With regard to bonding capacity, he
recalled discussion about potentially bonding for other projects such as the pyrolysis upgrade at the WWTP
and asked if the City had plenty of bonding capacity. Mr. James answered yes. Councilmember Teitzel
favored the 20 year bond, not finding it advantageous to drag it out to 30 years and pay the additional
interest. A 20 year bond also allows future citizens to bear the burden of some of the project costs.
Councilmember Mesaros added his thanks/appreciation for the thorough work on this project. He had been
in favor of a BAN to allow an opportunity to seek philanthropic gifts. He referred to the comments from
Ms. White, representing the Hazel Miller Foundation, and their $1.5M contribution. He anticipated there
were others who would consider contributing. However, he has shifted his thinking because of Ms. Hite's
decision to go to Redmond. Her involvement and energy were crucial to the success of philanthropic gifts.
With her departure, the professional equity she brings to the table will be lost and it will take time for the
new parks director to build that same level of equity in the community. He was in favor of a 20 year bond
and asked whether it would be possible to do $3.7M, knowing there could be unanticipated costs. Mr. James
answered yes. Councilmember Mesaros said he would look to Mr. James' professional recommendation
about the amount when the project reaches that point.
Councilmember Tibbott said he mostly concurred with the idea for 20 year bond. He asked whether there
had been a plateau in accelerating construction costs or could costs continue to accelerate. Ms. Hite
responded the cost estimates for Civic take into consideration escalation for construction in 2020. The
City's experience with the Waterfront Redevelopment project indicates construction cost acceleration has
not plateaued; the bids for that project were very high compared to the engineer's estimate. Some allowance
for escalation is built into the budget.
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July 2, 2019
Page 7
Councilmember Tibbott said that is another reason not to put this project off for 2-3 years while funds are
raised because it adds to the potential of higher construction costs. In the event stormwater mitigation
requires more funding, he asked what funding opportunities there would be if the City was already locked
into bonds. Ms. Hite said if there was Council support to bond, the Parks Department would work with the
Finance Department before bonds are sold. Better numbers will be available in September when the
stormwater mitigation has been figured out and more costs determined at the 60% design level. The Council
could move forward with bonds and determine the exact cost in September.
Councilmember Tibbott inquired about the timing of issuance. Mr. Bauer explained the Council can pass a
bond delegation ordinance ahead of time that authorizes staff to complete the sale. The ordinance would
include a not- to -exceed amount, the principal amount, and etc. The bonding process takes approximately
three months; if the Council authorizes the bonds, the bond sale would be late September/early October.
Councilmember Tibbott liked the idea that there were people and/or organizations in the community
interested in contributing to Civic Park and said perhaps there would be opportunities in Phase 1 that either
aren't budgeted or could be enhance with giving options. Phase 2 would be an opportunity for grant funding
and charitable giving.
Councilmember Tibbott commented an aspect that hasn't been discussed is the quality of life surrounding
a dormant/decaying park while funds are raised. That is not the quality of life the Council wants and it could
present some safety issues and opportunity for criminal activity. He saw strong merits in moving forward
with development of the park, especially knowing there were General Fund monies available to cover the
bond. He looked forward to the completed park being a magnet for people, both from a tourism aspect as
well as an economic vitality aspect. He summarized for those reasons he was in favor of bonds.
Councilmember Johnson reminded the Council that the Revised Code of Washington states cities must
provide police, sewer, water and transportation; parks are not required, they are optional. The City may
want a park but parks are not needed for the health, safety and welfare of the community according to state
law. She had several concerns about the proposed bonds, first, the City will need to pay for debt service
and bond counsel. She recalled with the Public Works bonds, for $1 OM in bonds, the City ultimately paid
$15M. She said Edmonds High School was built in 1909 so the park has been there for 110 years; it's not
going anywhere and people use it every day although it may not be optimal.
Councilmember Johnson suggested a pay-as-you-go method, relying on grants and gifts. Using that method,
the City could accomplish what it wants, maybe not all at once but certainly within 110 years. The City
paid $100,000 for the Civic Master Plan. She was a member of the Advisory Committee, everyone worked
in good faith and were happy with the product. Then she learned that Civic Field is prehistoric lake that has
decayed vegetation, peat and turf that is characterized by holding a tremendous amount of ground water,
an aspect she had significant concerns about. First and foremost, planners and architects have learned to
design with nature, not fight it, change it or modify it. She needed to know a lot more about that aspect of
the project. The City has many large projects and she wanted to know how Civic Park was prioritized with
other major parks such as Marina Beach and the Edmonds Marsh which will also require tremendous
funding. She summarized she needed more information; for her it was not about bonds versus BANs, and
she preferred a pay-as-you-go option.
Councilmember Nelson said he attended several of the public open houses. In light of the talk about the
difficulty of government getting along, this project is a textbook example of how to do it the right way, get
public input and use that input to influence the design and garner the support of City staff, Ms. Hite and the
entire Council for the project. He supported moving forward expeditiously and supported issuing bonds.
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July 2, 2019
Page 8
Council President Fraley-Monillas referred to the Projected Expenses slide in the presentation and asked
whether stormwater mitigation was usually funded by the Stormwater Utility. Ms. Hite answered every
construction project has to take care of their own stormwater.
COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCILMEMBER TEITZEL, TO
HAVE ADMINISTRATION CONTINUE DOWN THE PATH OF DOING A $3.5 MILLION TO $3.8
MILLION BOND ISSUE TO OCCUR BASED ON WHAT WE FIND OUT IN THE NEXT COUPLE
MONTHS. MOTION CARRIED (6-1), COUNCILMEMBER JOHNSON VOTING NO.
COUNCILMEMBER MESAROS MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS,
TO AUTHORIZE THE MAYOR TO SIGN A LETTER OF AGREEMENT WITH FOSTER PEPPER
TO SERVE AS THE CITY'S BOND COUNSEL. MOTION CARRIED (6-1), COUNCILMEMBER
JOHNSON VOTING NO.
COUNCILMEMBER MESAROS MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS,
TO AUTHORIZE THE MAYOR TO SIGN A LETTER OF ENGAGEMENT WITH NW
MUNICIPAL ADVISORS TO SERVE AS CITY'S FINANCIAL ADVISOR. MOTION CARRIED (6-
1), COUNCILMEMBER JOHNSON VOTING NO.
1. FUND BALANCE / RESERVE POLICY DISCUSSION
Finance Director Scott James thanked Councilmembers Buckshnis, Mesaros and Teitzel for their input on
the policy during Finance Committee meetings.
• Purpose of Fund Balance/Reserve Policy
o "It is the policy of the City of Edmonds to provide for the continuity of City government by
planning ahead for economic uncertainties and unforeseen or unplanned major expenditures."
• General Fund — Fund Balance Reserve History
Year
Fund Balance
New Policy Fund Balance Assigned Fund Balance
2007
$5,807,8880
$5,124,288
2008
$3,258,421
$5,325,084
2009
$4,138,406
$5,523,316
2010
$4,925,008
$5,723,009
2011
$5,705,633
$5,171,344
2012
$4,635,301
$6,176,017
2013
$6,834,380
$5,532,913
2014
$6,446,091
$6,724,798
2015
$9,359,437
$6,808,069
2016
$9,841,719
$7,600,516
2017
$10,273,342
$7,206,802
2018
$9,124,013
$7,594,249 $2,000,000
Contingency Reserve Fund — Fund Balance Reserve History
Year
Fund Balance
RCW Limited Fund Balance
2012
$5,2823000
$2,172,992
2013
$5,376,796
$2,079,465
2014
$5,445,337
$2,288,404
2015
$4,677,030
$2,540,807
2016
$5,367,841
$2,766,068
2017
$5,447,144
$3,078,163
2018
$5,564,259
$3,415,232
* Proposed Policy
o Article I introduces the purpose and objectives
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July 2, 2019
Page 9
o Article II discusses criteria that should be considered and include:
1. Volatility
2. Fund size
3. Purpose of reserve
4. Bond ratings
o Article III establishes the General Fund Operating Reserve at 16% of General Fund Adopted
Operating Expenditure Budget
■ Limitations of Fund Use
K Reserve replenishment
o Article IV establishes the reserve target for Contingency Reserve Fund
■ The reserve balance cannot exceed RCW mandated limits of $0.375 / $1,000 of assessed
property values in the city, OR
■ 4% of the General Fund Adopted Operating Expenditure Budget
■ Limitations of Fund Use
■ Reserve replenishment
o Article V establishes reporting criteria
During the May 7"' Council meeting, Council requested the following additions to the
Replenishment Report to Council:
1. Must include a discussion of how the reserves were used
2. Whether it is anticipated additional reserves will be needed or not needed in the following
budget cycle
Councilmember Buckshnis thanked Councilmembers Teitzel and Mesaros for assisting Mr. James, Mr.
Turley and she in developing the policy. She assured the City has had reserves that are reflected in the
budget book, they are just not in the right categories. Mr. James has been very conservative for a long time,
there have been General Fund reserves and the City is in good shape. She asked if Mr. James wanted
motions to remove the Risk Management Fund 011. Mr. James recommended Council approve the
resolution adopting the Fund Balance Policy. Staff intends to bring a second quarter budget amendment to
Council later this month that will include transfers from the Risk Management Fund and transferring excess
funds from the Contingency Reserve to the General Fund.
Councilmember Buckshnis recalled the old policy included 4% and 8% and Risk Management at 2% and
8% - 16%. The new policy does not include a "floor;" she expressed interest in including a floor of 8%.
Redmond has 8% for their basic policy reserve but they also have a head tax and plenty of money so she
understood why their reserve was so low. Mr. James said the replenishment section of the policy requires
the administration to present a plan to Council. If the reserves were used for unforeseen expenses,
administration would be required to share a plan with Council regarding how the reserves would be
replenished. He was hopeful the reserves would never go 8% but unforeseen needs cannot be anticipated.
He recalled he significant recession that reduced reserves for three years. It is hoped that can be avoided
which is one of the reasons for a robust Fund Balance policy.
Councilmember Teitzel thanked James and fellow Councilmembers for their input on the policy. He was
comfortable with the policy as proposed. The City needs to have a healthy Reserve Policy to get through
rainy days which will be coming. The region has been riding the crest of an exceptionally long economic
recovery, now at a record level 161 months of recovery, but it will turn at some point and the City needs a
cushion for the time when revenues begin to sag. Two of the City's larger tax revenue sources, sales tax
from car sales and from restaurants/bars, are volatile and when the economy goes sour, those tax revenues
suffer. The City needs reserves in place to weather those storms. He was satisfied that 20% was the right
amount and he supported the policy as presented.
Edmonds City Council Approved Minutes
July 2, 2019
Page 10
Councilmember Mesaros commented it had been good to work with Mr. James and Councilmembers on
this policy. He agreed the floor was self-correcting. There have been 17 recessions since WWII, the 18"'
will come eventually. There have also been 17 recoveries and the 18" recovery will also follow. During
those economic downturns it is prudent to have reserves; this a good step toward accomplishing that.
Councilmember Tibbott agreed with Councilmembers' comments. He asked how volatility affected
releasing or using reserve funds as a certain amount of volatility can be expected in economic cycles and
the City is somewhat dependent on cyclical revenues. He asked how reserve funds are used in the type of
volatility the City is likely to experience. Mr. James recalled when the policy was presented to Council
earlier, he included three slides that showed the volatility of three revenue sources - sales tax, property tax
from EMS and development related revenues. During the recession, those three revenue sources combined
to approximately $13M in declined revenues. With that much volatility, it is prudent to have reserves to
offset it. The reserve fund cannot be expected to solve all the City's financial problems; offsets such as
reduced need for services will have to be considered to help balance the fund. Volatility is a very important
part and it is only a matter of time before there is another recessionary period when revenues from sales tax
and development will decline.
Councilmember Tibbott asked how elastic expenses are during downturn times and how reserve funds are
accessed during those times of volatility. Mr. James answered much of the elasticity of revenues depends
on the revenue to provide those services. For example, eating and drinking are the first to be cut when
people have to tighten their budgets. To access the funds, the Mayor has to present a plan declaring a
financial emergency. A simple majority of Council is required to approve use of the funds. The Mayor's
declaration will include what the emergency is, what funds will be required, etc. Council has to approve the
plan and authorize use of the funds.
Councilmember Johnson explained before The Reserve Policy was brought to the Finance Committee,
Councilmember Teitzel, Mr. James and she discussed it numerous times at the Long Range Financial
Planning meetings. She was confident this was an appropriate reserve policy.
COUNCILMEMBER JOHNSON MOVED, SECONDED BY COUNCILMEMBER TEITZEL, TO
APPROVE RESOLUTION NO. 1433, ADOPTING THE FUND BALANCE / RESERVE POLICY.
Councilmember Buckshnis asked Mr. James if he thought a floor of 8% should be added. She referred to a
statement in the policy, "If the reserve is drawn down by 25-50%," noting 50% would be approximately
8%. Mr. James recommended not including a floor as that is addressed in the policy by the language
regarding replenishment.
Council President Fraley-Monillas asked if the policy could it be changed by a vote of the Council if it was
not working or there were issues. City Attorney Jeff Taraday answered the policy would be adopted by
resolution, so another resolution would be required to change it. Mr. James said the policy (Article VI) has
a five year review; every five years staff will present the policy to Council for discussion regarding the
merits, whether the reserve needed to be increased or decreased. Council President Fraley-Monillas asked
if the Council could review the policy in a year or change it at any time. Mr. Taraday answered yes.
MOTION CARRIED UNANIMOUSLY.
Mayor Earling declared a brief recess.
8. STUDY ITEMS
1. MULTI -FAMILY TAX EXEMPTION PROGRAM OVERVIEW
Edmonds City Council Approved Minutes
July 2, 2019
Page 11
Economic Development/Community Services Director Patrick Doherty said this is an overview of the
existing program that the Council approved for two areas of the City. Councilmember Buckshnis suggested
he review the program in public to increase its visibility. No action is sought or required tonight. He
reviewed:
History
0 1995 — State Legislature created the Multi -Family Tax Exemption (MFTE) program
■ RCW 84.14
o To help spur redevelopment in lagging urban centers
o Fulfills GMA goals to encourage in -fill development in existing urban centers, thereby
reducing sprawl and promoting "smart growth"
o Provides for affordable housing
How it works
o MFTE provides incentive to developers to invest in "residential targeted areas" and include
affordable housing
o Residential targeted areas — mixed-use centers designated by cities in Comp Plans or Subarea
Plans to receive greater density of multifamily and commercial development
■ Council designated Westgate and Hwy 99 as residential targeted areas
Residential targeted areas
o Often called "urban villages" or "urban centers"
■ Walkable
■ Amenity -rich
■ Transit -supportive
■ Mixed-use areas
o Intended to accommodate future growth in housing and employment
o Designated by cities through Comp Plans or Subarea Plans per GMA
■ Barriers to redevelopment
o Notwithstanding a city's plans, transformation to "urban village" can be fraught with
challenges such as:
■ Competition from higher -rent locales (e.g., Seattle, Bellevue)
■ Complications with urban redevelopment:
- Unwilling property sellers
- Need to aggregate multiple properties
- Existing long-term leases
- Environmental remediation
• Provision of below -market -rate housing requires some subsidy or incentive
o These factors can stall planned -for redevelopment and provision of affordable housing for
decades!
• One small tool
o The MFTE program is one small tool to provide an incentive to developers and investors to
overcome these challenges and encourage development of multifamily and mixed-use projects
that include affordable housing
Program's Reach
o Many cities in Washington have implemented MFTE:
• Near Edmonds
— Seattle
— Lynnwood
— Everett
— Kenmore
— Shoreline
— Marysville
— Mountlake Terrace
Edmonds City Council Approved Minutes
July 2, 2019
Page 12
■ Statewide
Tacoma
Puyallup
Wenatchee
Spokane
SeaTac
Walla Walla
Yakima
Bellin ham
Moses Lake
Bellevue
Auburn
Anacortes
Renton
Olympia
Issaquah
Kirkland
Vancouver
Tukwila
Burien
Federal Way
Des Moines
Bremerton
Kent
Covington
Univers i Place
o In fact, because of program's widespread application Statewide, many developers have come
to consider the MFTE program as a necessary tool to help overcome the challenges of urban
redevelopment in all but the highest -rent housing markets
MFTE in Edmonds
o In July 2016 Edmonds City Council implemented the MFTE in Edmonds
o Starting with Westgate Mixed -Use Zone
o Extended the provision to Highway 99 Corridor in 2017
Program basics
o MFTE Program is applicable to:
■ Projects containing at least 20 dwelling units
■ Exempts residential improvement value ONLY
■ Nonresidential (commercial, e.g.) improvement value is NOT exempt
■ Land value is NOT exempt
12 -year exemption period if the project includes at least 20% of units as affordable to rent
or buy to low and moderate -income households
o Edmonds program provides:
■ 10% for low-income and 10% for moderate -income'
- Low income < 80% of County median income
$53,200 - 1 person
1 $60,800 - 2 person
$1,330/mo. rent + util.
$1,520/mo. rent + util.
— Moderate income < 115% of County median income
$76,475 - 1 person I $87,400 - 2 erson
$1,912/mo. rent + util. I $2 185/mo. rent + util.
NOTES: 1. 10%-10% split and 2. Use of County median income unique to Edmonds, as per 2017
amendments
Tax revenue implications
o Start with review of property tax basics:
■ City property tax rate is product of Council -approved annual tax levy (amount to be raised)
divided by City's total Assessed Valuation (AV).
■ The Council approved 2019 levy amount of $10,548,203
■ The City's AV was $9,107,284,679
■ Therefore, the City's property tax rate is approx. $1.1582 per $1000 of property value.
■ $500,000 house pays $579.10 in City property taxes
o How does partially exempted building fit into the equation?
■ Assume $5,000,000 mixed-use development.
- $1,000,000- land and commercial component
- $4,000,000 - residential component, incl affordable housing
■ MFTE exempts the residential portion for 12 years.
■ This portion is not added to the City's AV and is not taxed.
■ However, increased land value and commercial portion are both added to City's AV and
are taxed.
Edmonds City Council Approved Minutes
July 2, 2019
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o Assuming no other changes (incl. same levy amount):
■ City's AV goes up by $1,000,000 to $9,108,284,679
• City's property tax rate goes down to $1.1581/$1,000
■ $500,000 house pays $579.05 (40.05)
• Project contributes $1,158.1 in property taxes from land and commercial portion
■ Residential portion is not added to the City's AV and is not added to tax rolls. Pays no
property tax for 12 years.
it After 12 years residential portion is added to City's AV and contributes property tax
revenue
o Even during 12 -year partial exemption period, project contributes:
■ Initial impact fees (transpo, parks)
■ Project's residents and businesses/customers pay:
- Sales taxes
- Utility taxes
- Gas taxes
o What if the project were NOT partially exempted?
■ All of new value would be added to AV
• City's AV goes up by $5,000,000 to $9,112,284,679
■ City's property tax rate goes down to $1.1576/$1,000
19 $500,000 house pays $578.80 (40.30)
■ Project contributes $5,788 in property taxes from year 1
o Upshot:
■ $500,000 could theoretically pay $0.30 less in property taxes
■ But new project, incl. affordable hsg., may not occur
Westgate Village Project Example
0 91 total units
0 14 "moderate income" households (< 115% of County median income):
■ $1,445 to $2,250/month rent + util.*
0 5 low "income households" (< 80% of County median income):
■ $1,330 to $1,710/month rent+util.*
0 72 market rate units:
■ $1,490 to $2,380/month NOT including utilities
*Note: HUD utility allowance is $172 to $214 (depending on unit size)
MFTE impact summary
o MFTE is tool to encourage planned -for development and provide affordable housing (80% to
115% AMI)MFTE exempts residential value only for 12 years
o During exemption period project contributes:
— Initial impact fees for transportation and parks
— Property taxes from land and commercial component
— Sales, utility, gas taxes
o After 12 years the project contributes full property taxes
o No additional taxes paid by City taxpayers
Council President Fraley-Monillas relayed her understanding that staff had been contacted by a number of
people trying to figure out the MFTE. The City's portion of the taxes on the units also fund emergency
services such as police and fire. When the City does not collect that, she asked who pays for police and fire
services. Mr. Doherty said the budget is the same, the levy amount is set and taxes are based on that amount.
Council President Fraley-Monillas said in the Westgate example, 91 units and approximately 170 people
will be added but no addition funds are collected toward fire or police services. Mr. Doherty said this is the
part that's difficult to understand about how taxation works; the City always collects the same amount.
When the levy is set, the tax rate times the City's overall assessed value will produce that levy amount. The
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July 2, 2019
Page 14
City never gets less. If the question is does the project contribute on a proportionate basis for those 91 units,
he said for 12 years they are getting a little break to reach other values the City has established such as
affordable housing and growth in areas where development is desired.
Council President Fraley-Monillas relayed her understanding that the units do not pay taxes for 12 years
like other residents to the General Fund that pays for police and fire. Technically when they get a break for
12 years, 170 people aren't paying into the City's coffers for those services. Mr. Doherty agreed they would
not be paying property tax, but the City gets revenue from sales tax, utility tax and increased property value.
Until this year, the Westgate Village property was vacant and it was unknown how long it would have
remained vacant and the City would not have received any more revenue from it, no more property taxes
or increased land value. Once the property is occupied next week, the assessor will reassess the value of the
land and it will increase substantially in addition to revenue from the commercial spaces. The residents,
visitors and customers will pay the other taxes. While they are not paying the full amount of taxes that
project could pay during the 12 year period, the project may not have happened without MFTE as an
incentive and it certainly would not have included affordable housing. It is a bit theoretically with regard
to whether the development is not paying.
Council President Fraley-Monillas reiterated there would be 170 more people who are not paying for
infrastructure and for other things that existing citizens pay. Mr. Doherty clarified they won't pay as much.
Council President Fraley-Monillas commented then someone will have to pay their fair share. At some
point, the City will need to add staff. It was her understanding that a number of cities are considering moving
away from MFTE. Mr. Doherty said every city has the option to study it which some cities have done, but
none of them have discontinued it. Council President Fraley-Monillas said Shoreline is considering not
offering MFTE due to costs.
Council President Fraley-Monillas referred to the Westgate Village project example, and asked if the
moderate income rate included utilities. Mr. Doherty said the low and moderate income rents both include
utilities; that allowance is $172/month rent for a studio and $214/month rent for a 2 bedroom. The market
rate renters are charged for utilities. Using the market rate unit as an example, $1490 rent plus $172/month
for a studio, versus $1330/month rent and no utilities.
Council President Fraley-Monillas asked how many of the five low income units were studios. Mr. Doherty
answered two are studios, one 1-bedrom and one 2 -bedroom. The moderate income units include 6-7
studios, five 1 -bedroom and one 2 -bedroom. Council President Fraley-Monillas said most people who have
contacted her cannot afford to pay $1330/month and feel that is really not low income for a studio. She
acknowledged this is a new building so there are amenities that would not be found in a 20 -year old building.
Councilmember Johnson said she was told that people who live in the 19 low and moderate income
households will not pay school taxes. Mr. Doherty said the exemption is for all property taxes. This
incentive was created to encourage developers to include affordable housing as well as encourage
development where a city plans for it. For the 12 years, the residential portion of the building will not
contribute property taxes. The property taxes will be paid because the tax rate for the entire City will
generate the levy amount. If they were paying, the levy would drop so slightly that a $500,000 house would
see about a $0.30 reduction in the City's portion of the property tax. He acknowledged the school tax portion
was larger than the City portion and might be more like $3.00. The building is not contributing directly to
school district via a property tax for the 12 years but they are contributing to utility tax, sales tax, gas tax,
and those residents may not live there without the incentive. Federal Way was one of the first cities in the
state to implement MFTE; the Federal Way Council understood using it to get the ball rolling and agreed
to look at it again in seven years to see if the ball was rolling enough that the incentive was no longer
needed.
Edmonds City Council Approved Minutes
July 2, 2019
Page 15
Councilmember Teitzel relayed his understanding there were five units set aside for "low income"
individuals, people earning < 80% of County median income. He asked what that would be if it were
adjusted to 50% of the AMI. Mr. Doherty said a City Council implementing this program has the authority
to adjust the percentage. If that were done, Edmonds would be only place it was different, other than Seattle,
and could potentially be less competitive to developers if the percentage was higher in an adjacent city.
Councilmember Teitzel said no matter where the threshold is set, someone will view it as not fair and the
rent more than they can afford.
Councilmember Teitzel asked about a phase-out plan at the end of the 12 year period when the rents would
change to market rate. Mr. Doherty said there is not a plan necessarily other than people know about the
exemption period and a long-term renter could save up. The legislature considered allowing cities to add
another 12 years.
Councilmember Mesaros said one of the key items that complicates this issue is the sense that whenever
the school district, a city or county levies, they receive the accumulation of all the dollars. What actually
happens is an aggregate number is set which is divided by the property values. Learning that nuance is
crucial to understanding whether the City collects more or less money. Even small improvements of the
commercial level brings down the tax for all due to the added property value that would not occur if the
project was not built.
Councilmember Tibbott said it's obvious a program like this incentivizes development in the areas of the
City where new development is desired. If the desire is for that new development to occur in a denser
manner where there is transit, it is wise to incentivize development in those areas versus just letting it
happen across the City in wherever manner developers want. This is one of the ways to do good planning
and to incentivize development in those areas. Mr. Doherty provided an example: when the Council
approved the Hwy 99 plan, there was discussion about how to get development to occur and the Council
agreed to apply MFTE to some areas of Hwy 99.
Councilmember Tibbott inquired about impact fees, noting impact fees in a highly developed urban area
are more costly than in a flat dirt field. For example, old sidewalks and curb ramps may need to be upgraded,
etc. He asked how paying impact fees helps with redevelopment of the City in crucial areas. Mr. Doherty
said the cost of development overall is higher per square foot higher in a redevelopment scenario compared
to a green field. In an urban environment, there may need to be aggregation of properties, remediation,
building demolition, etc. In addition, impact fees are often higher due to impacts. He recalled Westgate had
$1M in fees. Councilmember Tibbott observed those fees help improve streets, walkways, and
transportation. Mr. Dougherty agreed.
Councilmember Tibbott recalled when the MFTE was instituted for Hwy 99, a 70% AMI was used. Mr.
Doherty said 70% was discussed but 80% was retained. Councilmember Tibbott relayed his understanding
that if students moved into the Westgate project, there is federal funding paid for those students. Mr.
Doherty did not have facts or figures regarding that.
Council President Fraley-Monillas asked how long ago the Council approved MFTE. Mr. Doherty answered
2016 for Westgate and 2017 for Hwy 99. Council President Fraley-Monillas observed there had been no
other developments other than Westgate. Mr. Doherty said there are two on Hwy 99 in preliminary process.
Council President Fraley-Monillas commented in the last three years there had not been a lot of property
owners interested in utilizing MFTE, like was thought there would be. Mr. Doherty answered he was unsure
a rush of developers was expected. Westgate is still a more difficult place to develop compared to most
commercial areas in the Puget Sound region. The zoning on Hwy 99 is generous which is the reason there
are two projects in some stage of permitting. Westgate only allows up to four stories in two places, the rest
is two and three stories. Most of the Seattle area is 4-6 stories plus. A lot of developers look at opportunities
Edmonds City Council Approved Minutes
July 2, 2019
Page 16
in the region and respond to places where they can build more. Edmonds would not get the rush that some
cities have gotten; for example Lynwood has seen a rush of development due to higher allowable heights.
Council President Fraley-Monillas suggested it may be advantageous on Hwy 99 to consider other
developer bonuses versus MFTE. She pointed out the low income rent, $1330/month for a studio is not low
income for someone on social security like many veterans, disabled and seniors which is $800/month.
Development on Hwy 99 utilizing other developer incentives may provide an opportunity for really low
income housing for people who need transportation and housing on the corridor.
Mr. Doherty said it was unfortunate that the State language calls that low, it is not what many consider low,
but it is lower; below market would be a better way to say it. There are many programs to address the
various levels of income; the next level is 60% which is addressed by the low income tax credits at the state
level. A lot of developers use those tax credits to develop 60% such as SHAG and other private developers.
Lower than that is government or agency -sponsored housing. Tax credits are a state program that provides
cash to developers for 60% AMI housing. Council President Fraley-Monillas suggested that could be
considered along Hwy 99, pointing out the Section 8 housing voucher system is basically closed and has a
lengthy waiting list. She was interested in ways to incentivize development and create rents that are
affordable to those on fixed income. Mr. Doherty looked forward to the new Housing Commission
exploring that.
Councilmember Buckshnis said she did not consider the Westgate Village rents low or moderate income;
when utilities are added, they are almost market rate. Mr. Doherty said utilities are included in the low and
moderate income rents. Councilmember Buckshnis said the City is now incentivizing developers to do all
residential, e.g. the GRE apartments on Hwy 99 that are all residential. One of the purposes of MFTE is for
social equity which is difficult to add to a calculation. She asked if GRE was using MFTE. Mr. Doherty
said they have applied for it. Councilmember Buckshnis asked if the AMI could be lower than 80%. Mr.
Doherty said development in Westgate is required to have commercial on the first floor. On Hwy 99, there
is flexibility to have a commercial building and a residential building. With regard to affordability, it is
currently 80% for low income in Westgate and Hwy 99; the Council has the authority to set the AMI
wherever they want. However, if it is too low, developers may not respond.
For Councilmember Buckshnis, Mr. Doherty explained once a developer submitted an application they are
vested to regulations in place at the time. Councilmember Buckshnis suggested using Westgate or GRE as
an example using 50%-77% AMI. She reiterated people may not realize the social equity aspect.
COUNCIL DISCUSSION ON NEXT STEPS FOR EMERGENCY ACCESS TO THE
WATERFRONT
Council President Fraley-Monillas said this item is based on the conversation the Council had last week.
Council is asked to discuss the process for moving forward on an alternative to the emergency crossing in
the event of an emergency on the other side of the tracks. Things to consider during the discussion should
include but are not inclusive:
1. Which alternatives should be considered going forward? Ask the Council to revisit the set of
alternatives that were considered previously but not chosen as a preferred alternative amongst other
alternatives? Or is there a need to start from scratch?
a. Does the Council want to look at short-term solutions, then long-term solutions, or just long-
term solutions?
2. What process does the City Council envision for consideration of the future alternatives?
Opportunity for Councilmembers to offer suggestions for alternatives such as forming a
commission made up of citizens? Police? Fire? Business? Council? Staff? To explore alternatives.
Edmonds City Council Approved Minutes
July 2, 2019
Page 17
3. Does the City Council want to set up a separate inquiry from the alternatives inquiry to better
understand where we are failing in our public outreach process so that we can understand the fatal
flaws in future projects earlier in the process?
4. Information Needed:
a. Review of cancelled project reports
b. Review of community input and how to do better
c. Review of other committees, transportation, safety, climate, etc.
d. Environmental impacts
e. Neighborhood impacts
f. Business impacts
Council President Fraley-Monillas said she has talked to about five Councilmembers and everybody has a
different idea of where and how to start.
Councilmember Mesaros agreed the Council needs to make some choices. He commented there was a very
long process to reach a recommended location and design and then that was determined not to be acceptable
to the community. The City is also in the midst of one of the biggest election years in the City in a long
time. There will be major turnover on the Council and a new Mayor. This may be an appropriate time to
step back. Even if the location were approved and everyone happy, it would be another two years before
the connector was built due the environmental work, planning, fundraising, etc. There is no need to rush
this between now and the beginning of the new year.
Councilmember Mesaros agreed there were things to learn from the process. Councilmember Teitzel and
he are the only two Councilmembers who are voluntarily retiring; others may retire due to election results.
He suggested Councilmember Teitzel and he consider how to engage the public and report back to the
Council. The success of the new Civic Park was due to the positive community engagement by the City.
Other examples include Marina Beach and Hwy 99. The upcoming parking study will be another
opportunity to engage the community. He summarized his suggestion to pause on the connector project
until after election and consider how to best engage the community on other projects that are in process.
Councilmember Tibbott agreed with Councilmember Mesaros' suggestion in general, recognizing it will
take time, energy and investment by Council and staff. He reiterated his suggestion that while the process
for the Waterfront Connector is fresh in everyone's mind, there be some review of what the task force
recommended, with a focus on the short term safety options that were recommended in the report. The
purpose would be to, 1) recollect how we got to this place, and 2) realize there are some good options for
short term remediation that have not been put in place. He did not anticipate the review would that take a
lot of time, maybe no more than '/z hour of Council time. He also wanted to hear from the Police Chief or
other first responders, recalling the Police Chief oversees emergency planning. As Council President
Fraley-Monillas mentioned, police and fire have emergency plans in place to deal with emergencies west
of the railroad tracks. The City is also planning to hire a risk management staff person; one of their priories
could be to examine safety procedures.
Councilmember Tibbott commented it could be a Council driven process, not an administrative process. It
could be done through the Council Legislative Assistant or with an outside facilitator at a half day or 2 -
hour workshop that captures the community sentiment before it's lost. He summarized those are short term
ideas that could be examined and would not require a lot of time or a large investment.
Councilmember Teitzel recalled Councilmember Mesaros and he discussed the fact that although the
Council and City believe they are engaging the public in a meaningful way throughout the process, there
have been a number of issues such as the Waterfront Connector, the Housing Strategy, the Edmonds
entrance sign on SR -104, parking on Civic Field, and the Tree Code where the public has not been happy.
Edmonds City Council Approved Minutes
July 2, 2019
Page 18
As a result, the Council is uncomfortable and frustrated, not productive, not efficient and certainly not cost
efficient. There needs to be a better process to engage the public early and in a meaningful way where they
can provide ideas, be assured their ideas will be fairly and fully vetted and get feedback throughout the
process. That is a bigger problem than the waterfront access and the City needs to work on that larger
problem first.
Councilmember Teitzel said Councilmember Mesaros and he are uniquely positioned because they are not
running for office so their review will not have a political overtone. He suggested Councilmember Mesaros
and he work on a process and once that process is vetted with the Council, the process be tried with the
public. He referred to a letter to the editor of My Edmonds News on June 231, Three Takeaways from the
Connector Controversy, that contains a number of good ideas that should be considered as a way to better
engage the public earlier in the process and in a more meaningful way. He agreed with Councilmember
Mesaros' idea to pause and work on a better communication process.
Councilmember Nelson appreciated the Council's helpful suggestions and ideas. He suggested doing two
things initially, 1) look at short term EMS response, and 2) assemble a group, possibly after the election,
that looks at a long term solution. He explained the options were ranked and scored using four criteria: 1)
improve reliable emergency access, 2) reduce delays at ferry loading and unloading, 3) reduce delays at at -
grade rail crossings, and 4) provide safe efficient intermodal connectivity. The concepts were ranked with
those four criteria weighted equally. If the immediate goal is emergency access to the west side of the tracks,
he suggested isolating that and ranking the options according to what provides immediate, reliable access
to the other side of the tracks. The fire department was not on the task force; the fire department should be
part of whatever short term solutions are considered as an equal partner in suggestions and ideas. He
summarized ultimately the question is what is the best plan for Edmonds.
Councilmember Buckshnis said WRIA 8 uses many different categories in their scoring including social
equity which includes the community and the environment. She has been scoring WRIA 8 grant proposals
for over 7 years. Social equity is just as important as emergency access even though emergency access is
short term and needed. As the Waterfront Connector morphed, it became a transportation issue instead of
an emergency access issue. She suggested looking at the original matrix and adding social equity and
environmental impacts. She relayed her friends at WRIA 8 said the City should have engaged the
Department of Ecology and other environmental groups early in the process. She agreed with
Councilmembers Teitzel and Mesaros' suggestion to pause but she wanted to qualify and quantify the
matrix to include social equity. Obviously that was not excluded and resulted in the community outcry. She
recommended dealing with emergency access first. Trains and ferries are increasing, double tracks are
coming; it should be a WSDOT issue not a City of Edmonds issue.
Councilmember Johnson provided the following statement: "Edmonds has been working on access to the
west side of the railroad tracks since 2012. We have all been working in good faith. The first task force was
co-chaired by Mike Nelson and came up with a preferred alternative after considering 51 suggestions from
the community and expensive public engagement. The preferred alternative was the Waterfront Connector
at Edmonds Street. The City Council gave unanimous support for this project. The next task force was co-
chaired by Tom Mesaros and their job was to refine the bridge design. However, when it was brought back
to the Council, the Council divided in a 4-3 vote in support of the Waterfront Connector. Same people,
different time. Then something unexpected happened. There was an online tsunami of opposition to the
structure in a grassroots protest and the vote shifted. Mike Nelson moved that we should not allow the
Mayor to sign any agreement with the consultant for the Waterfront Connector.
Emotions were high that night but that motion precluded two important things. It robbed us of hearing the
public comments and it robbed us of a Council discussion. The democratic discussion of opinions and
options did not happen. My experts have told me that it is very unusual to have only a build alternative and
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a no build alternative in an environmental assessment. The Waterfront Connector was not only the preferred
alternative, it was the only alternative. I think it would have been better, in hindsight, to evaluate the top
three alternatives. Clearly people were concerned about impacts to the marine sanctuary and the beach.
Maybe they were right; maybe they were misled, but we won't know without the environmental assessment.
There is a proverb that states it is better to have a bird in the hand than two in the bush. By hoping for
something better, we ignore the four years of interagency work and numerous meetings and hundreds of
citizen participation. What we have given up is over $8.5 million from the state and port. I have been assured
by Senator Liias that the State will not help us review any more alternatives. They gave us the money to do
the Waterfront Connector, the community was behind it and at the last minute we pulled out. He said if we
want to look at any other alternatives, we have to do it on own dime. So what have we learned? We need
to all work together and not have a rush to judgment."
Council President Fraley-Monillas appreciated Councilmember Johnson's view on the Waterfront
Connector, but said it was not appropriate to hash backward although she understood Councilmember
Johnson had supported it from the beginning to the end. She relayed what she has heard Council say is there
are two issues, first a better way of connecting to citizens. She will bring a proposal to Council. It would
be appropriate for Councilmembers Teitzel and Mesaros with her as chair to participate in that effort. The
second issue is people are interested in a short term solution and looking at long term solutions after the
first of year. She offered to draft a proposal to look at short term solutions.
Councilmember Teitzel said it's very important when talking about the Waterfront Connector or any other
large project to understand what problem needs to be solved. He referred to Mr. Kimmelman's comments
that the Council may want to define the problem at the waterfront as a way to move people and vehicles
back and forth over the train tracks. That is a very different problem than solving emergency access to/from
the waterfront. He recommended carefully thinking about the problem and defining it well before attacking
it. The proper solution to accessing the waterfront may be a longer term solution that involves regular on
and off loading of ferries in addition to emergency vehicles, pedestrians, etc.
Councilmember Tibbott appreciated Council President Fraley-Monillas and Councilmembers Teitzel and
Mesaros' offer to devise a way forward and he was interested in what they develop. However, while that is
considered, he also supported having a refresher/review of the current emergency plans. The police and fire
departments may have an adequate response that works now and would be workable for 1-2 years.
Mayor Earling said as he noted in his recent column and has been mentioned several times on the dais, it is
time to step back from the Waterfront Connector issue. The City has been embroiled in it and clearly the
recent decision was in part political. During the next few months, any decisions will also look political and
cause additional controversy in the community. He recommended the Council put themselves in a position
to step away from that. There are Councilmembers running for Council and Mayor and several Council
candidates; staff is busy, yet he understands the need to have Councilmembers and candidates' questions
answered. He referred to an email he sent instituting a time limit of 15 minute for calls to staff for
question/answers and 15 minutes for any research requests related to the Waterfront Connector or
waterfront access. Staff has worked diligently on this issue for 2'/2 -3 years and they need to be able to step
away from it.
Council President Fraley-Monillas said the Council has been charged with looking at the communication
piece and short term emergency access. She understood Mayor Earling is the staff supervisor and keeper of
the information and projects. When she presents to Council she will include a budget proposal to hire
someone to assist the Council if staff is not able to do it.
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Councilmember Nelson expressed concern with comments about delaying discussions about emergency
access until after the election and that decisions were made for political reasons, finding that a disservice
to Councilmembers. He was confident the City Council can work collectively to put together short term
emergency solutions whether it is setting aside funds to purchase an emergency vehicle to park on the other
side of the tracks. That is not political, it is something the Council can and should do and should do sooner
rather than later.
Council President Fraley-Monillas said she spent time over the weekend in Marysville where the long trains
that go through Edmonds go down the middle of the road. She found it interesting to watch how Marysville
managed that. She also spent time this week in the San Juan Islands on a very small island that has ferry
service but no emergency services, no doctor, and no hospital. The residents on the island are well aware
there is some inherent risk should an emergency arise. There is a heliport on the island for taking people
off the island. She summarized there are ways to work through this and the situation is not as desperate as
she saw on the San Juan Islands. She was hopeful the Council could see a vision for moving forward and
getting information to citizens and getting feedback from citizens in a better manner than has occurred in
the last couple years.
9. MAYOR'S COMMENTS
Mayor Earling referred to concern in the community that the Waterfront Connector will be rebirthed. A
letter has been sent to the federal delegation and to the legislative delegation including the chairs of the
Transportation Committee in both the House and Senate advising that the recent Council vote reversed
course for the Waterfront Connector. There has also been contact with BNSF who were planning to bring
executives to Edmonds to consider a contribution to the Waterfront Connector that that was no longer
necessary. He distributed a letter the City received from the Port of Edmonds stating they were withdrawing
their $1.5M pledge for construction. He spoke with some members of the delegation, Councilmember
Johnson spoke with Senator Liias, and he spoke with Representative Peterson; all the delegation knows the
project is over. He assured $7.05M in state funds and $1.5M from the Port are gone and the project is dead.
Mayor Earling announced his appointment of Brooke Roberts as the alternate to the Youth Commission.
He wished everyone a happy and safe 4' of July.
10. COUNCIL COMMENTS
Councilmember Mesaros distributed a memo describing the evaluation of City Attorney services. when the
Council renewed Lighthouse Law Group's contract last year, it was renewed for one year and then -Council
President Nelson asked Councilmember Fraley-Monillas and him to take the lead on preparing an
evaluation process. Since then Councilmember Fraley-Monillas was elected Council President and she
asked him to approach another Councilmember. He and Councilmember Teitzel will be working on a
process to evaluate the services of Lighthouse Law Group and evaluate whether to have an inhouse attorney
or an external firm. They will work on the process first and bring it to Council for approval. Once the
process is approved, they will implement it, complete it by the end of September and the Council can make
a decision in October regarding how to move forward.
Councilmember Buckshnis thanked Jim Landers, Edmonds Historical Museum, for providing the
information about the Native American carving that will be placed in front of the museum. The artist, Ty
Juvenil, has done story telling for the Burke Museum and the Seattle Library.
Councilmember Buckshnis announced a friend and former interpreter and her two children are visiting later
this week; she will be showing them the Pacific NW. She will be absent from the July 9' Council meeting
and there will be a special Finance Committee meeting on July 16' before the City Council meeting.
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Council President Fraley-Monillas thanked Councilmember Mesaros for putting the proposal for evaluating
City Attorney services in writing. She has informed the Council's Legislative/Executive Assistant that she
will be assisting with that process. She announced the Council has a new Student Representative, Zach
Bauder, who lives in Edmonds and will be a senior at Lakeside School in the fall. He will begin attending
Council meetings next week.
Councilmember Teitzel announced his appointment of Jacob Sawyer, a student at Edmonds-Woodway
High School, to the Edmonds Youth Commission. He wished everyone happy and safe 4' of July.
Councilmember Johnson reported she attended the AWC conference last week and found it very
informative, educational and timely. The conference included sessions on small cells and other topics. She
wished everyone a happy and safe 0 of July and good weather.
Councilmember Tibbott said he has reviewed the Housing Commission applications and was impressed
with the applicants' level of expertise. He was thankful for the diversity of owners and renters who will
bring a variety of viewpoints to the commission. He looked forward to conducting interviews in the next
couple of weeks. He wished everyone a happy 4' of July.
11. CONVENE IN EXECUTIVE SESSION REGARDING PENDING OR POTC:NTIAL LITIGATION
PER RCW 42.30.110(1)(i)
This item was not needed.
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 9:50 p.m.
DA O. EARL ING, MAYOR
C5LP ASY, CI CLE K
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