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Cm130122EDMONDS CITY COUNCIL APPROVED MINUTES January 22, 2013 The Edmonds City Council meeting was called to order at 6:00 p.m. by Mayor Earling in the Council Chambers, 250 5"' Avenue North, Edmonds. ELECTED OFFICIALS PRESENT Dave Earling, Mayor Strom Peterson, Council President Frank Yamamoto, Councilmember Joan Bloom, Councilmember Kristiana Johnson, Councilmember Lora Petso, Councilmember Adrienne Fraley-Monillas, Councilmember Diane Buckshnis, Councilmember 1. ROLL CALL STAFF PRESENT Stephen Clifton, Community Services/Economic Development Director Phil Williams, Public Works Director Shawn Hunstock, Finance Director Rob Chave, Planning Manager Frances Chapin, Cultural Services Manager Rob English, City Engineer Jeff Taraday, City Attorney Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder City Clerk Sandy Chase called the roll. All elected officials were present. CONVENE IN EXECUTIVE SESSION REGARDING POTENTIAL LITIGATION PER RCW 42.30.110(1)(i). At 6:00 p.m., Mayor Earling announced that the City Council would meet in executive session regarding potential litigation per RCW 42.30.110(1)(i). He stated that the executive session was scheduled to last approximately 45 minutes and would be held in the Jury Meeting Room, located in the Public Safety Complex. He noted that executive sessions are not open to the public. In addition, he stated that it was anticipated action may occur in open session as a result of meeting in executive session. Elected officials present at the executive session were: Mayor Earling, and Councilmembers Yamamoto, Johnson, Fraley- Monillas, Buckshnis, Peterson, Petso and Bloom. Others present were City Attorney Jeff Taraday, Public Works Director Phil Williams, City Engineer Rob English, and City Clerk Sandy Chase. The executive session concluded at 6:47 p.m. Mayor Earling reconvened the regular City Council meeting at 6:48 p.m. MEET WITH CANDIDATE FOR APPOINTMENT TO THE ARTS COMMISSION. At 6:49 p.m., the City Council met with Arts Commission candidate Mami Muir. The meeting took place in the Jury Meeting Room, located in the Public Safety Complex. Mayor Earling and all City Councilmembers were present for the meeting with Ms. Muir. Mayor Earling reconvened the regular City Council meeting at 7:01 p.m. and led the flag salute. APPROVAL OF AGENDA COUNCILMEMBER BUCKSHNIS MOVED, SECONDED BY COUNCILMEMBER PETERSON, TO APPROVE THE AGENDA AS PRESENTED. MOTION CARRIED UNANIMOUSLY. Edmonds City Council Approved Minutes January 22, 2013 Page 1 APPROVAL OF CONSENT AGENDA ITEMS COUNCILMEMBER PETERSON MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO APPROVE THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: A. APPROVAL OF CITY COUNCIL MEETING MINUTES OF JANUARY 15, 2013. B. APPROVAL OF CLAIM CHECKS #200000 THROUGH #200157 DATED JANUARY 17, 2013 FOR $737,713.83. APPROVAL OF PAYROLL DIRECT DEPOSIT & CHECKS #52046 THROUGH #52060 FOR $502,603.28, BENEFIT CHECKS #52061 THROUGH #52069 AND WIRE PAYMENTS OF $214,556.09 FOR THE PERIOD JANUARY 1, 2013 THROUGH JANUARY 15, 2013. C. APPROVAL OF CLAIM CHECK #200158 DATED JANUARY 18, 2013 FOR $10,480.23. D. AUTHORIZATION FOR MAYOR TO SIGN ARTS COMMISSION RECOMMENDED CONTRACTS FOR TOURISM PROMOTION FUNDING FOR LOCAL CULTURAL ORGANIZATIONS. E. AUTHORIZATION FOR THE MAYOR TO SIGN CITY OF EDMONDS LODGING TAX COMMITTEE TOURISM PROMOTION AGREEMENT AWARDING THE SNOHOMISH COUNTY VISITOR'S BUREAU $6,000 FOR TOURISM PROMOTION AND SUPPORT OF VISITOR SERVICES TO PROMOTE EDMONDS. F. AUTHORIZATION FOR THE MAYOR TO SIGN CITY OF EDMONDS LODGING TAX COMMITTEE TOURISM PROMOTION AGREEMENT AWARDING THE EDMONDS CENTER FOR THE ARTS $12,500 TO ATTRACT VISITORS TO EDMONDS THROUGH ADVERTISING AND PROMOTING DOWNTOWN EDMONDS AND ANNUAL CULTURAL EVENTS/FESTIVALS IN THEIR 2013/2014 SEASON BROCHURE. G. AUTHORIZATION FOR THE MAYOR TO SIGN CITY OF EDMONDS LODGING TAX COMMITTEE TOURISM PROMOTION AGREEMENT AWARDING THE EDMONDS VISITOR'S CENTER $2,500 FOR TOURISM PROMOTION AND SUPPORT OF VISITOR SERVICES TO PROMOTE EDMONDS. H. CONFIRMATION OF ARTS COMMISSION CANDIDATE MARNI MUIR. AUDIENCE COMMENTS Donna Breske, Snohomish, relayed Edmonds Code 20.75.100 states preliminary plats will expire five years after the date of preliminary plat approval. The Washington State Legislature recognized due to the economic downturn, the 5 year timeframe was not attainable for many preliminary plat approvals; therefore, RCW 58.17.140 was revised to give local jurisdictions the ability to offer some relief, offering 7 years to complete a preliminary plat if it received preliminary plat approval on or before December 31, 2014. She suggested Edmonds adopt the 7 year time frame for the following reasons: 1) gives investors added time as a result of the recession to successfully complete their project, 2) facilitates construction of additional dwelling units which adds property tax revenue, 3) additional dwelling units means more people living in the City, patronizing City businesses, 4) is consistent with other jurisdictions including Snohomish County who revised their codes to include the seven year timeframe and 5) adding additional dwelling units is consistent with GMA mandates to promote development of additional dwelling units. She is aware of a preliminary plat that expired on January 17, 2013. In a recent meeting with City staff regarding her client's 34ot preliminary plat that will expire on July 25, 2013, she asked why staff had not Edmonds City Council Approved Minutes January 22, 2013 Page 2 recommended to the Council increasing the timeframe to 7 years. Jen Machuga informed her, 1) if the plat expires, her client can simply reapply, and 2) she (Ms. Breske) could attend the next Council meeting and inform them of the 7 year timeframe. She provided Mr. Taraday, Mayor Earling and Councilmembers a copy of Snohomish County's revision to their code to allow a 7 year timeframe. Rich Senderoff, Edmonds, recalled a proposal was submitted to Council that included development agreements. As an Economic Development Commissioner, he supported the concept of development agreements at that time because it was a way for the City to send a message to developers that the City was interested in a certain type of business or use in a certain area. After further consideration and comments made at the public hearing he changed his view until he got an answer to this question: If the Council approves a development agreement on the basis of the use, does the use stay with the property owner or the property? For example, if the Council approved a development agreement for a boutique hotel and after it was built, the owner decided they wanted to change the use; is a public process and Council approval required to change the use. Another example, if the development agreement is approved for a boutique hotel and the property is sold, is a public process and Council approval required to change the use. Al Rutledge, Edmonds, referred to development agreements, pointing out the City needs a residential plan. He stated that a shopping center in Mountlake Terrace is being replaced with a residential complex. He referred to discussion that is occurring in Seattle regarding views. 7. DISCUSSION REGARDING INCENTIVE ZONING AND DEVELOPMENT AGREEMENTS. City Attorney Jeff Taraday referred to a memo in the Council packet regarding development agreements and incentive zoning. He was asked to draft a memo regarding how development agreements can be utilized to encourage certain types of economic development, how incentive zoning might also be used to do the same and how potentially they could be used together. Incentive Zoning Mr. Taraday explained incentive zoning is a type of flexible zoning whereby a city obtains public benefits or amenities from private developers in exchange for certain modified zoning requirements. He explained Seattle uses increased height as an incentive; they allow developers to build X feet more height if the developer provides certain public benefits or amenities. Public benefits or amenities can include affordable housing, historic landmark preservation, public open space, hill climb assists, etc. He explained Seattle obtained most of the escalators in downtown skyscrapers that allow people to go from one street to another via incentive zoning. A developer can opt out of incentive zoning as it is not a requirement in the same way development regulations are required. For example, every city has basic development regulations that address mandatory items such as setbacks, lot coverage, building height, etc. Incentive zoning uses the mandatory regulations as a fallback; if a developer does not take advantage of the incentive zoning, they can develop under the base zoning. If the Council is interested in implementing an incentive zoning program, there needs to be the right balance between the incentive and the public benefit. If the City's ask is too high and the incentive to the developer is too low, developers will not use the incentive zoning program and will develop under the existing base zoning. Conversely, if the City's ask is too low and the incentive to the developer too high, citizens will not be happy with the Council. Thus the need for a balance between the right amount of public benefit and the right amount of incentive that makes it pencil for the developer and makes it acceptable to the public. Mr. Taraday referred to a list of benefits or amenities the City could receive (page 179 of the Council packet) through an incentive zoning program that includes parks, plazas and other open space; shopping atriums; overhead weather protection; bicycle parking; outdoor performing arts venues, etc. He Edmonds City Council Approved Minutes January 22, 2013 Page 3 summarized the benefit or amenity can be anything the Council wants to see in the City; things they want for citizens but are difficult to provide in the budget or by the market. The benefits/amenities are only limited by the Council's imagination. He referred to a list of incentives the City could provide (page 180) that include increases in residential or nonresidential unit density, increased lot coverage, changes in setback requirements, changes in height requirements, increases in floor area ratio (FAR), etc. He reiterated the incentives need to be something developers want; if they do not want it, they will not provide what the City wants. Mr. Taraday referred to examples of things that have been implemented through incentive zoning (page 181). Mr. Taraday referred to a process to implement incentive zoning (page 182), noting some are general planning concepts and some may have already taken place in Edmonds in other contexts. To implement incentive zoning, the City would need to determine which steps have already been sufficiently accomplished, which need to be done again, and which have not been done at all. Steps include: 1. Assemble stakeholders 2. Determine what incentives the City should offer 3. Determine what public benefits and/or amenities participating developers will be required to provide 4. Create the incentive zone and amend planning documents such as the zoning ordinance and comprehensive plan. An incentive zone is necessary if the incentive zoning program does not apply on a citywide basis. The City is not required to implement incentive zoning on a citywide basis and it can be limited to specific areas. 5. Adopt the changes 6. Market the new incentives to make the public and development community aware Development Agreements Mr. Taraday explained a development agreement is a tool offered by State law under RCW 36.70B.170. The development agreement is a contract between the city and the developer that specifies the standards and conditions that will apply to a particular development on the property. The development agreement is recorded against the title and is not personal to the developer. If the developer with whom the City negotiates the development agreement sells the property, the development agreement goes with the property. Development agreements can be long, extensive documents that take a long time to negotiate. In some cases development agreements are used in conjunction with a city's regular development regulations. Ultimately State law requires development agreements be consistent with the underlying development regulations. Flexibility can be incorporated by including language in the zoning code or development regulations that specifically state the standard can be modified in conjunction with a development agreement or modified in conjunction with a development agreement up to a certain point. Development agreements are a particularly useful tool and were originally used in Washington for projects that take a very long time to complete such as Redmond Ridge and Snoqualmie Ridge, mammoth subdivisions with thousands of homes. In those situations, a development agreement is important because it provides assurance for a developer to undertake the required infrastructure. The primary reason for a development agreement is it gives a developer vesting to a defined set of regulations for a long period of time to allow extended build -out of a very large project. He explained there are other circumstances where he would recommend the City use a development agreement even if it was not built over a long period of time such as any time the City obtains or imposes any significant project -specific addition. For example, if a project is required to put in a $200,000 traffic light, the City may want to consider using a development agreement to ensure all parties understand the timing of the mitigation. Development agreements are a good tool for high stakes developments. Councilmember Buckshnis asked Mr. Taraday to respond to Dr. Senderoffs question, whether a project stayed with the property. Mr. Taraday answered it depends. Development agreements are recorded on the Edmonds City Council Approved Minutes January 22, 2013 Page 4 property; if the City enters into a development agreement with the expectation that only one use will occur on the property, that language can be included in the development agreement. He was uncertain of the wisdom of including that language because if a future owner's hands are tightly tied to what they can do on the property, it may end up being a vacant space. For example, the development agreement states in exchange for something, the only allowed use on the property will be a museum for the useful life of the property. If the museum cannot survive financially and closes, it remains vacant because it cannot be used for any other purpose. That could be resolved by the property owner requesting an amendment to the development agreement. Development agreements can always be amended. Councilmember Buckshnis referred to #4 in the implementation steps for incentive zoning (create the incentive zone and amend planning documents such as the zoning ordinance and comprehensive plan), asking whether the Comprehensive Plan set the parameters for an area and zoning sets requirements under the parameters. Mr. Taraday answered yes, as a general rule. Councilmember Buckshnis questioned the proposed process, creating the incentive zoning first and then amending the zoning ordinance and Comprehensive Plan. Mr. Taraday answered not all the steps were necessary. It is intended to identify what the process could look like, not that it is a required process for Edmonds. As a general rule, the Comprehensive Plan is the City's visioning document and the zoning regulations implement the Comprehensive Plan and are required to be consistent. Councilmember Buckshnis provided an example: The Comprehensive Plan is amended to state 90 feet, incentive zoning states to attain 60 feet, a developer must do an environmental thing with a cost of $1 million and the developers says no, can the developer then use the 90 feet in the Comprehensive Plan? Mr. Taraday explained the City may have language in its Comprehensive Plan that would allow implementation of incentive zoning without a Comprehensive Plan amendment. To Councilmember Buckshnis' question, incentive zoning is optional in the sense that there will always be base regulations that apply to the property that specify the height, setback, use, etc. Via incentive zoning, the City may allow a height bonus for providing a benefit/amenity. If the developer does not want to provide that benefit/amenity, they can build to the base height. For Councilmember Buckshnis, Mr. Taraday explained incentive zoning is part of the zoning code but is not the default development regulation. The default is the base regulations. For example, if the default is 35 feet and the bonus height through incentive zoning is 65 feet, if the developer does not want to provide what is required to attain 65 feet, he is stuck with the 35 feet. Or there could be incremental incentive zoning; a developer could attain 35 feet with no benefit/amenity and for every 10 feet of bonus height he is required to provide a significant benefit/amenity. Mr. Taraday provided a hypothesis: if there is no language in the Comprehensive Plan that would allow incentive zoning, the City would first want to propose a Comprehensive Plan amendment either concurrently or prior to zoning that would say something like incentive zoning is an allowable, recognized and valuable zoning tool in Edmonds. Or the language could be more detailed to address areas of the City where incentive zoning was welcomed. The maximum incentive did not need to be included in the Comprehensive Plan. Councilmember Buckshnis asked if a development agreement was similar to a contract rezone. Mr. Taraday agreed it was very similar. Before the statutory authority was provided for development agreements, most were called contract rezones. Contract rezones were never expressly authorized by the legislature; courts have recognized the validity of contract rezones. The development agreement statute states nothing herein invalidates any prior existing contract rezones. A development agreement goes further than a contract rezone; typically a contract rezone is for the purpose of limiting the use for a property. For example, a developer petitions the City to change the zoning to General Commercial and General Commercial has 20 uses, 10 of which would be completely inappropriate for the particular property. Via the contract rezone the property owner agrees to limit his use to the 10 appropriate uses. A contract rezone is typically only a rezone, it does not get into development standards, mitigation, etc., whereas a development agreement would be more comprehensive and specify many of the development Edmonds City Council Approved Minutes January 22, 2013 Page 5 regulations that apply to the property and would also vest the property to the regulations for a specific period of time. If a development agreement is approved for a property, Councilmember Buckshnis asked whether surrounding properties in the same zone were unaffected. Mr. Taraday answered there needed to be a rational basis for distinguishing one area from another. While the approval of a development agreement may only apply to a specific property in the application, it is less clear what happens when a neighboring property asks for a similar type of development. For that reason he discouraged the City from using development agreements to simply negotiate the terms of development on an ad hoc basis. A set of qualifying thresholds could be established for determining what projects could use a development agreement such as related to a particular use or size. He stressed development agreements are not an efficient tool; a substantial amount of time and energy goes into negotiating a development agreement and the City would not want to do it for every single family home. Councilmember Yamamoto observed incentive zoning is for a broader area and development agreements are more site specific. He asked if the list of benefits/amenities could be changed at a developer's request? Mr. Taraday answered it would depend on how the City's zoning code is written. He has not been asked to draft an incentive zoning ordinance and did not know what benefits or amenities would be required or what incentives would be offered. If the City wanted to develop an incentive zoning ordinance that identified the benefits, amenities and incentives in advance, he recommended it be tested before adoption by reaching out to the development community to determine whether it was workable. For example, ask the development community how much an extra 20 feet of height was worth to them and similarly determine how much it would cost to provide certain amenities to ensure there was a rough balance. Without a balance, the program may never be utilized. The amount of flexibility in the implementation stage depends on how much flexibility the Council wants. The ordinance can be drafted with some flexibility or with very little flexibility. For Councilmember Yamamoto, Mr. Taraday explained if incentive zoning is adopted and developers do not use it in its current form, it can be refined by the Council. It may take a couple iterations to strike the right balance. Councilmember Yamamoto asked if a development agreement should be done in conjunction with incentive zoning? Mr. Taraday answered it could; the development agreement must be consistent with the underlying zoning regulations including incentive zoning regulations. Some may have viewed a development agreement as a tool that allowed the City or developer to do whatever they wanted. It is not designed to be used that way and State law states it must be consistent with underlying development regulations. He summarized it was difficult to hypothesize without knowing what type of criteria the Council might adopt to allow decision makers to determine whether a developer has earned the incentive. That can be done in the future, once the Council has determined whether it wants to use these tools and if so, what incentives are they most interested in allowing developers to use and what benefits/amenities are they most interest in obtaining. Council President Petso recalled Council referred review of the BC Edmonds Way zone and the RM Edmonds Way zone to the Planning Board; those appear to be incentive zoning provisions such as 10 feet of extra height for providing something. She recalled Mr. Taraday saying the City needed to amend its Comprehensive Plan to allow incentive zoning, but it appears the Comprehensive Plan may already allow it. Mr. Taraday replied he had not concluded that the City's Comprehensive Plan needed to be amended to allow incentive zoning. The memo was a very high level outline of steps that the City may want to take. Council President Petso asked how incentive zoning was enforced? For example, a developer gets 10 feet extra height for providing 1000 square feet of public plaza space. The building is constructed and the plaza is only 600 square feet. Mr. Taraday answered it was the same remedy for any other misapplication Edmonds City Council Approved Minutes January 22, 2013 Page 6 of the zoning code. For example if a height was miscalculated and was 1 foot over the height limit or 1 foot within the setback. The courts have recently ruled if a City does not take steps to fix it within the LUPA appeal period, it may be too late to fix it later. Council President Petso referred to Mr. Taraday's statement that the development agreement must be consistent with development regulations. For example, if the City's development regulations allow 25 + 5 feet, the development agreement may allow 35 feet which would seem to be inconsistent with the development regulations. She asked if the development regulations would need to be amended first. Mr. Taraday answered that may be necessary depending on what the development regulations and the development agreement say. Using Council President Petso's example, the development regulations could be amended to state 25 + 5 feet unless approved through a development agreement in which case the maximum height shall be X. Council President Petso asked how a contract rezone was allowed when it was not complying with the underlying regulations but changing the underlying regulations? Mr. Taraday stated it was complying with the underlying regulations but agreeing to use them in a limited way. The measurement is not against the old zoning but against the new zoning. A separate question is if the rezone should be allowed and if it meets the standards for allowing a rezone. Use of consistency in the land use context does not mean it needs to be identical. Using the example of 20 uses allowed in a zone and 10 are inappropriate; if the contract rezone or development agreement states the property shall only be utilized for the following 10 uses and those are permitted in the zone, it is not an inconsistency. If the contract rezone or development agreement allowed a use that was not a permitted use in the zone, that would be an inconsistency. Councilmember Johnson recalled 1-2 years ago the Planning Board forwarded a recommendation to the City Council regarding development agreements. At that time the strongest argument for development agreements was flexibility and site specificity. It was also felt at that time that there could be a pre- determined set of objectives that were desired for a particular parcel of land and the development agreement could be tailored to that parcel. She asked whether that concept was still current and what had happened to the Planning Board's recommendation. Mr. Taraday answered criteria could be developed to determine when a development agreement could be used. The development agreement portion of his memo is a follow on to the Planning Board's process. The incentive zoning portion of the memo is a new addition but intended to be considered as part of that same analysis because they are related. Councilmember Johnson relayed her understanding at the Planning Board that via a development agreement, a change could be made to any of the development code requirements for a site. Mr. Taraday answered if the City adopted language in its regulations that states except when utilizing a development agreement in which case the standards shall not exceed X. That is how flexibility is built into the code to allow for the ability to use the development agreement to craft something on a property -specific basis. It was difficult to predict all the pitfalls without knowing the qualifying factors that would allow use of a development agreement. He summarized everything Councilmember Johnson learned at the Planning Board level is still applicable to today's analysis but he recommended the Council establish boundaries regarding the amount of flexibility to ensure the Council understands what they will get when they encourage use of a development agreement. Mr. Taraday explained development agreements come to the Council for a quasi judicial land use hearing as well as approval of the agreement. For Councilmembers who like quasi judicial land use hearings and sitting as judges, development agreements may be their tool of choice. For Councilmembers who would rather have a Hearing Examiner or someone similarly qualified be the decision maker, incentive zoning may be a better route. With incentive zoning, the Council has the option of having the Hearing Examiner be the decision maker; with development agreements, by State law the Council must make the decision. Edmonds City Council Approved Minutes January 22, 2013 Page 7 Councilmember Johnson explained the Harbor Square Master Plan was initially developed through a contract rezone and their plans call for a development agreement. She asked whether there were any other major developments in the City that used either a contract rezone or development agreement. Mr. Taraday answered there is a contract rezone on the Harbor Square property that governs the existing development. The Comprehensive Plan amendment the Council is considering regarding Harbor Square contemplates replacing the contract rezone with new zoning. If the Council has no intention of changing the contract rezone, there is no reason to go through the Comprehensive Plan amendment process for Harbor Square. Councilmember Johnson referred to the Port's proposal to make a change. Mr. Taraday answered the Port would like to use the development agreement tool to implement and get approval of their ultimate development. In that situation, a development agreement may make a lot of sense because, 1) it is a redevelopment not a new development, and 2) because it is a redevelopment, it may take longer. Hypothetically, he imagined a redevelopment scenario where part would redevelop in the first five years, part in the second five years and part in the third five years. That long build -out would be a good candidate for a development agreement. If upfront infrastructure were to be provided as part of the development agreement, the City needs to provide long term certainty to the developer that they will have the time necessary to go through the redevelopment process. Councilmember Johnson relayed one of the questions she has been pondering is under what circumstances would a development agreement process be preferred over the incentive zoning process, recognizing that the answer depends. Councilmember Johnson recalled the Council recently requested the Planning Board consider design standards for the downtown area. There are design standards for BD1 and there were design guidelines for BD2-4. She asked whether allowing the 25 foot height limit to be extended to 30 feet if certain conditions were met was an example of incentive zoning. Mr. Taraday answered it was. Councilmember Johnson inquired about the timeline to move forward on development agreements or incentive zoning, recognizing there appeared to be a large upfront process for incentive zoning. Mr. Taraday answered it depends on policy guidance provided by the Council. He suggested the Council deliberate on the types of incentives and benefits/amenities. He reiterated it was not necessarily development agreements or incentive zoning and he did not want to scare the Council away from incentive zoning because it was too much work. It would dramatically narrow the picture if the Council could identify three benefits/amenities it wanted to target via an incentive zoning program. With that guidance, staff could think more concretely about how a program could be crafted. Similarly, if the Council provided some guidance regarding incentives it would find acceptable to offer. He cautioned against simply developing a wish list without balancing it with market demands to help pay for it. Councilmember Fraley-Monillas relayed the only thing she has heard that developers might want in exchange is height. She asked whether developers were interested in other incentives. Mr. Taraday acknowledged height is a big one, another is FAR. He explained in Seattle FAR is often the bonus for providing certain amenities. For example a developer with a 100,000 square foot property with an FAR of 2.0 under base zoning equates to a 200,000 square foot building. As an incentive, Seattle might allow an FAR of 2.5 for certain amenities which would allow the developer to build a 250,000 square foot building. He summarized developers want to make money; they must be given something that will allow them to make more money, either height, density, FAR, exemption from parking, etc. If the incentive does not increase the developer's bottom line, the program will not work. Councilmember Peterson asked if there was a fine line between a development agreement and incentive zoning, and spot zoning. He assumed there could not be incentive zoning on a single lot. Mr. Taraday answered there is no fine line. As a general rule if a rational basis can be articulated for distinguishing between allowing a particular use or structure to be built on a parcel and not allow a similar structure/use Edmonds City Council Approved Minutes January 22, 2013 Page 8 on another property, it would meet the test. There needed to be a rational basis for distinguishing between two properties that otherwise might be considered similar. Staff would analyze that in any scenario the Council asked to implement. Councilmember Peterson provided the following example: if the desired use was a boutique hotel and an incentive zone were created that overlaid a certain BD zone, could the number of boutique hotels be limited. Mr. Taraday answered yes if there was a rational basis. Councilmember Peterson assumed the market would also play a role. Councilmember Fraley-Monillas asked if the Council determined the measurement for the incentives? For example, for a rain garden incentive, would it be applied citywide? Mr. Taraday answered the Council would take public input either formally at a public hearing, informally via talking to constituents or utilizing prior land use documents that included an extensive public process. With regard to how large a rain garden would need to be to qualify as a benefit, the ordinance would include measurable criteria. Identifying a short list of possible benefits and amenities would allow staff to begin drafting the ordinance. Councilmember Fraley-Monillas observed the rain garden could be in downtown or on Highway 99; it would depend on citizens' interest. Mr. Taraday answered there was no obligation to do incentive zoning on a citywide basis. The Council could use it only in areas where they wanted to incentivize development and not in other areas. Councilmember Yamamoto inquired about limitations on the city's ability to place conditions on a development agreement and the U.S. Supreme Court case Nollan v. California Coastal Commission where the Commission required the landowner to grant a public easement across private beach property in exchange for a permit to convert a beach bungalow into a 2-story dwelling. The Supreme Court ruled this condition an unconstitutional taking of property. He asked if that could have been accomplished via incentive zoning and if that same issue could arise for a walkway over the tracks. Mr. Taraday answered that was more worrisome in the development agreement context than the incentive zoning context. In incentive zoning, a formula is applied on an area -wide basis for deviation for the underlying zone. With incentive zoning, no one is forced to do anything, developers are allowed to use the base development regulations or the incentive zoning bonus. In a development agreement, the City would need to ensure there was reasonable connection between what the City asks for and the impact on the developer. He was unsure any case had applied Nollan v. California Coastal Commission in this context. He referenced Nollan v. California Coastal Commission to illustrate the City could not just do whatever it wanted through the use of a development agreement. Councilmember Bloom provided the following example: the Comprehensive Plan zoned several parcels General Commercial in an area of the City, and a decision was made to change one lot to Mixed Use and the City entered into a development agreement with that property owner. She recalled Mr. Taraday saying he discouraged ad hoc negotiation of development standards. She asked if a nearby parcel also zoned General Commercial could request the same development agreement. Mr. Taraday answered he did not worry about an ad hoc challenge at the Comprehensive Plan stage; there was really no such thing as spot comprehensive planning. The Comprehensive Plan is such a high level document the City has extremely broad legislative discretion. A development agreement is a project level approval. He clarified not all ad hoc negotiation was a bad thing; it needed to be guided by some standards; it could not be completely unbridled legislative discretion. The higher the planning process, the more legislative discretion the Council has, subject only to rational basis review. The further planning gets toward project level impacts, the more decisions must be guided by standards. Councilmember Bloom clarified her question: the Harbor Square Master Plan asks that the City change the Comprehensive Plan to include mixed use; it is currently General Commercial. If the Comprehensive Edmonds City Council Approved Minutes January 22, 2013 Page 9 Plan is changed to include mixed use for the Harbor Square Master Plan, citizens are concerned if the City enters into a development agreement, surrounding properties could ask for the same thing. Mr. Taraday responded the Port has gone through an extensive planning process; if the City Council were inclined to adopt the Harbor Square Master Plan, and make a corresponding map amendment to designate the Port property from other property in the vicinity, a distinction has been created in the Comprehensive Plan between the Port property and surrounding property. There would not be any need to allow other property in the vicinity to do the same thing because a distinction would be created in the Comprehensive Plan by showing the Port property differently. It would no longer have the same treatment on the map as surrounding properties, particularly if the Master Plan is adopted as a subarea plan. If a development agreement were drafted to implement the Harbor Square Master Plan, Mr. Taraday recommended an intermediate step after the Comprehensive Plan adoption and before development agreement approval where the City Council would establish some standards to guide the negotiation of the development agreement. As illustrated in Anderson v. Issaquah, one of the problems with ad hoc decision making is the developer needs to be provided a roadmap to understand what the City wants so the developer knows how to reach the finish line. Councilmember Bloom questioned whether approving a development agreement for one property could affect the City's entire development picture in terns of what other developers might ask for. Mr. Taraday responded if the Council adopts the Harbor Square Master Plan as a subarea plan and the new Comprehensive Plan land use map shows Harbor Square with a special new map designation, Harbor Square now has a distinguishing characteristic that surrounding properties do not. If the Council later adopted a development agreement for Harbor Square, it would not necessarily have to do the same for a neighboring property because that property would not have the same Comprehensive Plan treatment. Councilmember Bloom referred to Mr. Taraday's comment that development agreements are not an efficient tool and it takes a long time to negotiate the agreement. She asked for an estimate of how long negotiations would take. Mr. Taraday answered he could not estimate it because there were too many factors. It depends on how helpful the other party is being; if the developer's attorney does a lot of the leg work, the City Attorney can be in a reviewing and editing mode; or if he is doing all the legwork and the other attorney does the reviewing and editing. Negotiations can be simple, straightforward and short or complex, drawn out and reach impasse on certain issues. Councilmember Bloom asked who does the negotiations. Mr. Taraday answered the Council ultimately approves the development agreement. The City Attorney would be one of the lead negotiators in conjunction with key staff. The Council may want to appoint Council representatives to assist with negotiations as is done with labor negotiations. A draft development agreement would be provided to the Council and a public hearing held on the draft. Depending on the public hearing, the Council could approve or reject the development agreement or request revisions. Councilmember Bloom referred to Mr. Taraday's comment that there could be three phases for Harbor Square redevelopment. Mr. Taraday answered he was hypothesizing, recognizing that there is existing development at Harbor Square and his hypothesis could be totally wrong and redevelopment of Harbor Square would not be a phased development. The reason for his hypothesis was the useful life of existing development at Harbor Square may vary. The Port may want to stagger redevelopment of the site so that some facilities are redeveloped first and others redeveloped later. That could happen particularly well if a development agreement were utilized to contemplate phasing, identify when infrastructure would be done, and vest the development to regulations so that the Port has assurance regarding the rules that govern redevelopment. Councilmember Bloom referred to Mr. Taraday's comment that a development agreement is not an efficient process and is very time consuming for City staff, the City Attorney, the Council and the public. Edmonds City Council Approved Minutes January 22, 2013 Page 10 Mr. Taraday answered it could be; an incentive zoning process done by the City Council could also be a time consuming process. There are a lot of variables. As a general rule he would expect a development agreement would be more time consuming to implement than incentive zoning. Councilmember Bloom observed incentive zoning would allow the Council less input into what happens because the developer could choose to develop under the base development regulations and not utilize the incentive zoning. Mr. Taraday answered he would not recommend that there be areas of the City where the only way anything could be built on the site was with a development agreement. The main reason development agreements were authorized was to provide extended vesting to developers. Its primary utility is for projects that will take a long time to construct. It is usually the developer who approaches the city asking for a development agreement. Councilmember Bloom asked when the Land Use Petition Act (LUPA) and the 21 day period comes into play with regard to a development agreement. Mr. Taraday answered the State created a statute for judicial review of land use applications. If the City were to approve a development agreement and someone wanted to appeal the development, the 21 days begins upon approval of the development agreement. Anyone who wanted to challenge a development agreement must file a LUPA appeal in Superior Court within the 21 day period; if they do not, the development agreement will be in effect for whatever its term is. Council President Petso relayed her understanding that no property owner could be required to enter into a development agreement, including the Port. Mr. Taraday answered he would not recommend the City adopt zoning for any property that did not allow development on the site without a development agreement. He preferred to provide some base zoning because it protects the City from legal liability. If the Council could not reach agreement on a development agreement, the developer could develop using the base zoning. Council President Petso inquired about nexus, such as if the Council wanted to require a larger buffer for the Edmonds Marsh as part of a development agreement, could the Port say that is not connected to their proposal because they are not developing the property near the Marsh for 20 years. Mr. Taraday answered that was difficult to hypothesize. Nexus issues must consider the impacts of the development throughout all phases. Council President Petso asked whether the Port could redevelop the site and not address the Marsh buffer for 20 years under the nexus requirement in Nollan v. California Coastal Commission. Mr. Taraday anticipated the negotiations on a development agreement would include the timing of a number of issues including an enhanced shoreline buffer. Mayor Earling suggested sending this issue to the Planning Board and Economic Development Commission to get their thoughts and recommendations. Council President Petso suggested since an incentive zoning issue has been referred to the Planning Board, it would be helpful to look at that example in connection with their discussion. Mayor Earling commented that was a separate issue and he did not want to time freeze that issue in conjunction with this discussion. Mayor Earling declared a brief recess. 8. DISCUSSION REGARDING PARTICIPATION IN A REGIONAL FIRE AUTHORITY Finance Director Shawn Hunstock explained a Regional Fire Authority (RFA) is: • Formed under RCW 52.26. • A multi jurisdictional fire response and emergency medical services (EMS) provider. • A separate, new legal entity. • Formed by more than one jurisdiction. Can be cities and/or fire districts. Edmonds City Council Approved Minutes January 22, 2013 Page 11 Provides the benefits of regionalization: o Decrease duplicative services o Increase efficiencies o Enhance service delivery Can provide a governance structure that includes appointed city/district elected official representation or separately elected RFA Commissioners. Formed by majority vote of all jurisdictions in the proposed RFA (all or nothing). Key issues when deciding to form or join an RFA include: • Boundary — Who is included or excluded? Includes cities/fire districts but they must be contiguous to each other. • Finances — RFAs have two basic options: o A property tax levy of $1.50 per $1,000 of assessed value, OR o A property tax levy of $1.00 plus a Fire Benefit Charge (FBC). o A RFA may also have an EMS levy of up to $0.50 per $1,000. • Governance — Elected officials appointed to RFA Governing Board by the cities/districts, or RFA Commissioners elected at -large or RFA election districts. • Staffing — For stations (service levels) and administrative positions. • Equipment and facilities (sell, lease or give to RFA). Mr. Hunstock provided a map indicating the participants, explaining nine jurisdictions began meeting in March 2011 to explore the concept of an RFA: Brier* Mukilteo Edmonds Woodway * Lynnwood (may withdraw) Fire District 1 Mill Creek * (have withdrawn) Fire District 7 Mountlake Terrace * currently receiving service under contract with either FD 1 or FD7 Mr. Hunstock reviewed the RFA planning process: • Work is organized around four different groups: o Planning Committee: responsible for overall planning process including subcommittee assignments and timeline. (Earling, Peterson, Petso) o Communications Subcommittee: responsible for developing an RFA communications plan, public outreach, public information, etc. (Earling) o Finance Subcommittee: responsible for analysis and recommendations regarding financial issues (finance model, budget, funding options). (Petso) o Level of Service Subcommittee: responsible for making recommendations regarding staffing and level of service. (Peterson) • The committees have met almost every month since the planning effort started in 2011. • A draft planning document and the finance model were reviewed in October 2012 by Citygate Associates. Some of the Findings in that review include: o The finance model represents best practices for regional fire services. o More work needs to be done on administrative and command staffing. o The Plan document needs to address the issue of equipment and facilities (what and how both go to the RFA). o Governance not yet addressed (at that time). Edmonds City Council Approved Minutes January 22, 2013 Page 12 • The Finance Subcomrnittee made recommendations to the Planning Committee on how the Fire Benefit Charge (FBC) is to be calculated. o It would allocate approximately 66% of total FBC to residential properties. o The recommendation was prior to the removal of Mill Creek (and possibly Lynnwood), so changes will more than likely occur. • The Level of Service (staffing) will need to be updated as well as cities decide who is in and who is out. • A draft Governance Plan was developed by the Planning Committee with the following recommendations: o Each city (seven at the time) would have one elected official appointed by Council to participate on the Governing Board. o The two fire districts would share seven Board positions (four for FD 1 and three for FD7). o The recommendation attempts to allocate Board positions roughly by population. • No State requirement (RCW) that representation on the Governing Board be allocated by population. Auburn was the first to form an RFA, with Pacific and Algona. Auburn has one-third the vote on the Governing Board with 88% of the combined population. Mr. Hunstock provided a status report on RFA planning today: • Waiting for changes to the finance model, level of staffing, and possibly other items that will incorporate the following: o Impact of removing Mill Creek, and possibly Lynnwood, from the planning process. o Continued discussion about the components (factors) in the FBC calculation. • No formal agreement yet on the governance structure for the RFA Board. Mr. Hunstock reviewed next steps: • Receive updated finance model from FD1 staff with no Mill Creek, and possibly no Lynnwood. • Update projections for costs/savings for the City, as well as Edmonds taxpayers. • Provide Council with the estimates at the February 5th City Council meeting. • Include Mayor recommendation to continue or not. • Council discussion and adoption of resolution to continue or discontinue. Mr. Hunstock explained if the City decided not to participate in the RFA, the City could join this or another RFA in the future. The State statute was revised to allow cities or fire districts to join after formation of an RFA. The City has a 20-year agreement with FD1 that expires in 2030. The Interlocal Agreement states neither party can withdraw during the first five years and after five years, there is a two year notice for either FD1 or the City to withdraw. The current agreement with FD1 is effective through 2016. Staff has verified with FD1 that if FD1 goes away by virtue of the formation of an RFA, the agreement will be honored through the terms in the Interlocal Agreement. Mayor Earling reported Lynnwood may withdraw at their Council meeting next Monday. With the withdrawal of Mill Creek and now possibly Lynnwood, adjusted numbers need to be provided. Once those numbers are available, Councilmember Peterson, Council President Petso and he will develop a recommendation that will be presented to the Council on February 5. Council President Petso referred to the resolutions in the packet, noting the resolution withdrawing from participation in the Planning Committee states the City plans to continue attending Planning Committee meetings and to continue to evaluate the City's future involvement. Councilmember Peterson thanked Mr. Hunstock, commenting his participation in this process in another city and his knowledge of RFAs has been an incredible resource as well as his knowledge of the numbers. Edmonds City Council Approved Minutes January 22, 2013 Page 13 Councilmember Bloom relayed her understanding that revised numbers will be provided with possibly two cities withdrawing, a recommendation provided and the Council vote on the resolution on February 5. Mayor Earling responded that is the plan. If Lynnwood decides to withdraw, the deadline may change. The timeline now is to make a recommendation to the Council and vote on the resolution on February 5 to allow them to report the City's decision to the RFA Planning Committee on February 6. Councilmember Peterson explained the Planning Committee established the February 6 deadline because there is a tight timeline to finalize the numbers and prepare information for the ballot. Councilmember Buckshnis commented she has attended a few meetings; the numbers are always changing and she was not comfortable with it. She explained if the City joined an RFA, it would be similar to the SnoIsle taxing authority. The City currently contracts for service with FDI; if the City joins the RFA, it would be a regional taxing authority that the citizens would have no control over. Councilmember Yamamoto reported he attended a committee meeting in Council President Petso's absence; there is a huge potential savings for Lynnwood by joining the RFA. He asked why they would withdraw? Mayor Earling answered there were a lot of rumors and he did not want to speculate. 9. REPORT ON OUTSIDE BOARD AND COMMITTEE MEETINGS Councilmember Peterson reported the Lake Ballinger Forum meeting included a lively group of citizens due to flooding that occurs at this time of year. There are four projects listed on the CIP but no funding sources. Including the projects on the CIP allows staff to apply for grant funds. The committee also briefly discussed sending a delegation to Washington DC. Congressman McDermott had staff members available and Congressman Larsen attended a meeting last week in Mountlake Terrace. Councilmember Peterson looked forward to securing funds to fix inflow and outflow issues in Lake Ballinger. Councilmember Bloom reported the Tree Board plans to present a summary to the Council in February of their work and their plans for 2013. At the retreat, she hoped to discuss the Tree Board's need for staff support. Councilmember Bloom reported the Economic Development Commission meeting included discussion regarding limiting uses in the BD zones. Councilmember Yamamoto reported SnoCom continues to work through issues with the new dispatch system, New World. SnoCom is in dispute resolution with New World now due to withholding annual maintenance payments because the product is not yet operational. As a member of the budget committee, he will be traveling to Troy, Michigan, regarding the dispute resolution. Councilmember Buckshnis reported WRIA 8 is comprised of 28 cities, 8 large environmental groups, US Corp of Engineers, Washington Department of Ecology, Fish & Wildlife, Natural Resources, and King Conservation District. The WRIA 8 meeting included discussion of plans for this year and the Puget Sound Acquisition and Restoration Fund. Outgoing Governor Gregoire included $80 million in the budget; it is hoped that will be included in Governor Inslee's budget. She is working on funding for the Edmonds Marsh and daylighting Willow Creek. She reported a presentation was made to WRIA 8 regarding a culvert replacement funded in part by a citizen in Sammamish. Councilmember Buckshnis reported Snohomish County Tomorrow meets tomorrow and will be discussing plans for 2013 and 2035 growth targets. Edmonds is tracking well with its growth targets. The meeting will also include an update on the Interjurisdictional Housing Committee. Edmonds City Council Approved Minutes January 22, 2013 Page 14 Councilmember Johnson reported the Historic Preservation Commission's focus this year will be on registering historic properties. Calendars featuring historic Edmonds are available on the second floor of City Hall and at many local businesses. Councilmember Johnson reported the Highway 99 Task Force discussed development opportunity in the corridor. Councilmember Fraley-Monillas reported the South County Cities annual meeting included election of officers. She provided their State Legislative Agenda and asked staff to copy it to Councilmembers. Councilmember Fraley-Monillas reported the Parking Committee plans to make a presentation to the Parks, Planning and Public Works Committee regarding parking tickets. Currently a driver can get half off a parking ticket if it is paid within 48 hours; that creates problems because the parking enforcement staff has 5 days to turn in tickets. Drivers are then making payments at the court before the ticket is filed. Seattle and Everett use handheld electronic parking devices that allow the parking enforcement staff to enter the license plate and the information is forwarded to an outside company. The Police Chief plans to confer with other cities that use the devices. 10. MAYOR'S COMMENTS Mayor Earling commented it was much warmer where he vacationed last week. iIi�0111i1A[ylKM]uIuIDoQIK`! Councilmember Johnson announced the Planning Board and Economic Development Commission will hold a joint meeting on Wednesday, January 23 to discuss the strategic plan. Council President Petso advised a draft retreat agenda was distributed to Council. She asked to be informed of any additional agenda items as soon as possible. As the retreat agenda is very ambitious, she encouraged Councilmembers with items on the agenda to come prepared with a plan for discussing and moving the issue forward. Councilmember Peterson advised he plans to propose language regarding gun control at next week's Council meeting to add to the City's Legislative Agenda. 12. CONVENE IN EXECUTIVE SESSION REGARDING POTENTIAL LITIGATION PER RCW 42.30.110(1)(i). At 9:45 p.m., Mayor Earling announced that the City Council would meet in executive session regarding potential litigation per RCW 42.30.110(1)(i). He stated that the executive session was scheduled to last approximately 15 minutes and would be held in the Jury Meeting Room, located in the Public Safety Complex. Action was anticipated to occur as a result of meeting in executive session. Elected officials present at the executive session were: Mayor Earling, and Councilmembers Yamamoto, Johnson, Fraley- Monillas, Buckshnis, Peterson, Petso and Bloom. Others present were City Attorney Jeff Taraday and City Clerk Sandy Chase. At 10:10 Mayor Earling announced to the public present in the Council Chambers that an additional 10 minutes would be required in executive session. The executive session concluded at 10:17 p.m. 13. RECONVENE IN OPEN SESSION. POTENTIAL ACTION AS A RESULT OF MEETING IN EXECUTIVE SESSION Mayor Earling reconvened the regular City Council meeting at 10:18 p.m. Edmonds City Council Approved Minutes January 22, 2013 Page 15 COUNCIL PRESIDENT PETSO MOVED, SECONDED BY COUNCILMEMBER YAMAMOTO, TO AUTHORIZE THE MAYOR TO EXECUTE THE ENGAGEMENT LETTER FROM BUCHALTER NEMER. MOTION CARRIED UNANIMOUSLY. 14. ADJOURN With no further business, the Council meeting was adjourned at 10:19 p.m. Edmonds City Council Approved Minutes January 22, 2013 Page 16