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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4.7, Lynnwood Mazda Pedestrian Easement and 4.8, Wassall Pedestrian Easement at the NE Corner of 639 2nd Ave, had been withdrawn by Public Works.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 Edmonds City Council Approved Minutes 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 Edmonds City Council Approved Minutes July 2, 2019 Page 3 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 Edmonds City Council Approved Minutes 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% Edmonds City Council Approved Minutes July 2, 2019 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 July 2, 2019 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. Edmonds City Council Approved Minutes 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. Edmonds City Council Approved Minutes 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 Edmonds City Council Approved Minutes 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 Page 13 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 Edmonds City Council Approved Minutes 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 Edmonds City Council Approved Minutes July 2, 2019 Page 19 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. Edmonds City Council Approved Minutes July 2, 2019 Page 20 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. Edmonds City Council Approved Minutes July 2, 2019 Page 21 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 Edmonds City Council Approved Minutes July 2, 2019 Page 22