20190507 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES
May 7,2019
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
1. CALL TO ORDER/FLAG SALUTE
STAFF PRESENT
Carrie Hite, Parks, Rec. & Cult. Serv. Dir.
Patrick Doherty, Econ. Dev & Comm. Serv. Dir.
Shane Hope, Development Services Director
Scott James, Finance Director
Mary Ann Hardie, HR Director
Dave Turley, Assistant Finance Director
Kernen Lien, Environmental Program Mgr.
Frances Chapin, Arts & Culture Program Mgr.
Leif Bjorback, Building Official
Mike Clugston, Planner
Maureen Judge, Council Legislative/Admin. Asst.
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 5t" 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.
6.
APPROVAL OF AGENDA
COUNCILMEMBER TEITZEL MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO
APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY.
APPROVAL OF CONSENT AGENDA ITEMS
COUNCIL PRESIDENT FRALEY-MONILLAS MOVED, SECONDED BY COUNCILMEMBER
BUCKSHNIS, TO REMOVE CONSENT AGENDA ITEMS 4.5, CONFIRMATION OF SALARY
COMMISSION APPOINTMENTS, AND 4.6, CONFIRM APPOINTMENT OF CANDIDATE FOR
A BOARD AND COMMISSION, TO ALLOW COUNCIL AN OPPORTUNITY TO REVIEW
FURTHER APPLICATIONS FOR BOTH THE SALARY COMMISSION AND THE PLANNING
BOARD, AND RETURN TO COUNCIL AT THE NEXT AVAILABLE REGULAR MEETING IN
TWO WEEKS. UPON ROLL CALL, MOTION CARRIED (5-2), COUNCIL PRESIDENT FRALEY-
MONILLAS AND COUNCILMEMBERS JOHNSON, NELSON, BUCKSHNIS AND TEITZEL
VOTING YES; AND COUNCILMEMBERS MESAROS AND TIBBOTT VOTING NO.
Edmonds City Council Approved Minutes
May 7, 2019
Page 1
COUNCIL PRESIDENT FRALEY-MONILLAS MOVED, SECONDED BY COUNCILMEMBER
BUCKSHNIS, TO APPROVE THE CONSENT AGENDA AS AMENDED. MOTION CARRIED
UNANIMOUSLY. The agenda items approved are as follows:
1. APPROVAL OF COUNCIL SPECIAL MEETING MINUTES OF APRIL 23, 2019
2. APPROVAL OF COUNCIL MEETING MINUTES OF APRIL 23, 2019
3. APPROVAL OF CLAIM, PAYROLL AND BENEFIT CHECKS, DIRECT DEPOSIT AND
WIRE PAYMENTS
4. ACKNOWLEDGMENT OF CLAIM FOR DAMAGES
7. SHORELINE MASTER PROGRAM PERIODIC REVIEW ORDINANCE
8. COUNCIL HOUSING COMMISSION RESOLUTION
5. PRESENTATIONS
1. PLANNING BOARD QUARTERLY REPORT
Chair Matt Cheung introduced Vice Chair Dan Robles and reviewed the following:
• Plarininn Reard Memhers,
Member
Started
Phil Lovell (retired)
March 2008
Todd Cloutier
January 2010
Carreen Nordling Rubenkonig
May 2014
Dan Robles
May 2014
Matt Cheung
October 2014
Nathan Monroe
June 2015
Alicia Crank
February 2016
Mike Rosen
June 2017
Connor Bryan (student re)
Aril 2019
• Map of Members' Residences
• Occupations
o Civil Engineer
o Software Designer and Program Manager
o Engineer / Business Owner
o Planner / Business Owner
o Construction Manager
o Corporate Relations Officer Lawyer
o Marketing Executive
o Student
■ Demographics
o Seven male
o Two female
o Age Ranges
■ <30 (1)
■ 30-39 (2)
■ 40-49 (1)
■ 50-59 (2)
■ 60+ (2)
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Page 2
■ Undecided (1)
• Phil Lovell (retired)
o Has lived in Edmonds for 25+ years
o Loves that Edmonds is near the water
o Fun Fact: He lived in Germany for 5 years as a child
• Todd Cloutier
o Has lived in Edmonds for 14 years
o Loves the sense of community in Edmonds
o Fun Fact: He is a former submarine officer
• Carreen Nordling Rubenkonig
o Has lived in Edmonds for 35 years
o Loves the Edmonds sunsets and watching ferries glide across the Sound
o Fun Fact: She has lived in 25 residences in 5 cities in 5 states
• Dan Robles
o Has lived in Edmonds for 14 years
o He loves that Edmonds is quirky
o Fun Fact: He was a prog rock drummer in Hollywood
• Matt Cheung
o Has lived in Edmonds for 6 years
o Loves that Edmonds is an amazing place to raise a family
o Fun Fact: He still uses a Blackberry
• Nathan Monroe
o Has lived in Edmonds for 22 years
o Loves how connected Edmonds is
o Fun Fact: He coaches both his nieces' softball teams
• Alicia Crank
o Has lived in Edmonds for 5 years
o Loves that Edmonds is a ferry town
o Fun Fact: She has been a ghostwriter
• Mike Rosen
o Has lived in Edmonds for 4 years
o Loves Edmonds for the people, the charm, the location, and the potential
o Fun Fact: His grandmother was Betty Crocker
• Connor Bryan (student rep)
o Has lived in Edmonds for 12 years
o Loves Edmonds for its downtown area because of its small town character and close proximity
to the beaches
o Fun Fact: One of his hobbies is making maps of fictitious places
■ Topics This Year
o Small Cell Wireless
o Haines Wharf Amendment
o Update on Planning Board role and improving communication with City Council
Vice Chair Robles encouraged Councilmembers to read the Planning Board's minutes, noting votes that
are not unanimous usually indicate there has been a good discussion.
Chair Cheung reviewed:
• Upcoming Topics
o Non -Conforming Buildings
o Joint City Council / Planning Board Meeting — June 18
• Housing
Edmonds City Council Approved Minutes
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* Communication between City Council and Planning Board
o Planning Board Alternate
Councilmember Buckshnis said she reads the Planning Board's minutes and sometimes watch the meetings
on TV; their discussions are very good and the minutes reflect their discussions. The Urban Forestry
Management Plan and a tree ordinance that includes ways to preserve trees during development are future
Planning Board topics.
Councilmember Johnson commented the Planning Board operates differently than City Council and she
has served on both. At the Planning Board, there is an opportunity for a deep dive into issues and discussion
of all aspects, a process she enjoyed and she assumed other Planning Board members enjoy. She thanked
Planning Board members for their service and encouraged the public to watch/attend meetings.
Councilmember Teitzel thanked Planning Board members for their service, relaying he also reads their
minutes. Several years ago the Council approved a Multi -Family Tax Exemption (MFTE) as a tool to attract
affordable housing development along transit -oriented corridors. There has been some pushback recently
from citizens regarding that program and he asked their personal opinions about that program, whether it
should continue as is, be modified, etc. Vice Chair Robles said the Planning Board's early recommendation
was if other issues like aging in place and unification of families could be solved, that also solves affordable
housing. There is a desire to have teachers, first responders, etc. to live in the City; there is a fairly high
divorce rate in Washington and parent need to live close to their children. If those problems can be solved,
it solves the problem of affordable housing.
Councilmember Teitzel clarified his question was whether the MFTE program should continue as is or be
modified. Chair Cheung said the Planning Board could look at it again if the Council wants. The Planning
Board tries to take its time in reviewing issues and listen to the public. Planning Board members enjoy
discussions when all members do not all disagree as additional issues and perspectives arise leading to a
valuable discussion.
6. AUDIENCE COMMENTS
Bill Keenan, Washington State Council of County and City Employees, the union representative for the
Edmonds Employees Association, highlighted information on a handout provided to the Council. First,
what happens when an employee organization changes representation like what happened in Edmonds?
What happens is the City is notified that there is a change in representation taking place and told they have
to maintain status quo on all wages, benefits and conditions of employment until that process is complete.
In addition, all previous proposals or discussions with the prior union, SEIU, are null and void, the
negotiation process is literally reset, similar to bargaining a first-time contract. The City was sent two
notices, on 10/30/17 and 12/11/17, advising of the need to maintain status quo on wages, benefits and
conditions of employment. However, on 1/1/18, prior to beginning negotiations, the City implemented
significant changes to the medical insurance with a significant cost increase to employees, violating the
status quo requirement. Contract negotiations are still going forward. On 12/6/18 the union submitted a
public record request to obtain the difference between the medical, dental and vision cost to the City from
2017 to 2018 when the insurance was changed. That information was provided 2/15/19 and it was
discovered for the first time by the City and the Union that in fact there was a significant savings to the
City: $62,000 in 2018, $55,000 in 2019 and $28,000 in 2020, despite the fact that employees had a
significant cost increase which is outlined in the last paragraph of the handout.
Michael McMurray, Edmonds, thanked the City Council for requesting a pause in the gateway sign
process last summer and bringing more public into the discussion. He thanked Mayor Earling and Ms. Hite
for allowing Mack Benek, a local sign artist, to submit his design proposal. He urged the Council to increase
the funds allocated to complete Clayton Moss's design for the sign and consider directing Ms. Hite to locate
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Mr. Benek's design in another location. This is an opportunity to send a message to the artist community
that there is room for their work. He and the community would be happy to fund Mr. Benek's sign and Mr.
Benek would be happy to have his sign located near the ferry or other location downtown. It makes sense
to locate Mr. Benek's sign near the ferry as it represents a ferry arriving in town and includes one of
Edmonds' most iconic images. The existing real estate panel sign by the ferry is very dated and says thank
you on the back. He supported celebrating the three great local artists, Clayton Moss, Andy Eccleshall and
Mack Benek by authorizing both signs at two great locations, giving Edmonds needed upgrades and
supporting local artists. He said Ms. Hite has been open to the idea. He offered to spearhead community
funding for Mr. Benek's sign and personally make up any shortfalls. He requested Ms. Hite reach out to
him with regard to siting of Mr. Benek's sign.
Proposal to Implement a Land Acknowledgement Statement
COUNCILMEMBER TEITZEL MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS, TO
IMPLEMENT A LAND ACKNOWLEDGE STATEMENT TO BE READ AT THE BEGINNING OF
EVERY COUNCIL MEETING HENCEFORTH. THE STATEMENT WOULD SAY, "WE ARE
MEETING TODAY IN THE TRADITIONAL HOMELANDS OF THE COAST SALISH TRIBES.
WE PAY OUR RESPECTS TO TRIBAL ELDERS PAST AND PRESENT."
Council President Fraley-Monillas said this is already in process with Development Services Director Shane
Hope including discussion of alternatives and pros and cons of moving forward. She requested the Council
not support the motion until she and Ms. Hope return to Council with a plan and options.
Councilmember Mesaros appreciated Councilmember Teitzel bringing the, statement forward for the
Council's consideration. In attending other events in the City, other organizations are already beginning
their meetings with a statement honoring our forebearers and the fact that we are the inheritors of the land
and get to enjoy the property as well. He expressed support for the motion, pointing out if Ms. Hope and
Council President Fraley-Monillas provide another recommendation, it could be changed if necessary.
Councilmember Teitzel reread the statement, "We are meeting today in the traditional homelands of the
Coast Salish Tribes. we pay our respects to tribal elders past and present." He explained the statement shows
respect and appreciation to the indigenous people who lived in this area for thousands of years, well before
George Brackett ever set sight on Edmonds. This is coupled with the Council's decision last year to honor
indigenous people by renaming Columbus Day to Indigenous Peoples Day in Edmonds. As Councilmember
Mesaros stated, other organizations are already doing this including the Edmonds School Board and the
Edmonds Center for the Arts (ECA) and he felt it was appropriate for the Council to move forward with
this simple statement of appreciation.
Council President Fraley-Monillas explained she contacted Ms. Hope when this issue arose as
complications have been discovered with making this blanket statement. Ms. Hope explained one of issues
that has arisen is whether the statement should be made only by the Council, whether it should be part of
the other boards and commission meetings, whether it should be printed on the agenda, pros and cons of
each and whether there are other cities doing this. She and Council President Fraley-Monillas have
discussed bringing that information to the Council for consideration.
Council President Fraley-Monillas said they also discussed researching if there are other groups of people
that could potentially be slighted by not being mentioned. She encouraged the Council not to support the
motion until research on the best way to proceed has been completed, to include what other cities are doing.
It was her understanding the statement is only made at School Board meetings and at the ECA. Ms. Hope
advised the statement is not currently made at ECA board meetings, only at special events. Council
President Fraley-Monillas stated her preference was a careful review as there was no urgency and she
preferred to do it right the first time.
Edmonds City Council Approved Minutes
May 7, 2019
Page 5
Councilmember Tibbott did not support the motion as he would like to have more information including
consultation with Native Americans about what level of recognition would be helpful to them.
Councilmember Mesaros said it was appropriate to move forward with this statement and it was important
that the Council make a decision for the Council and when other information is gathered, make amendments
if necessary. Whether all public meetings would be opened with a statement was a separate subject.
Councilmember Teitzel's motion addresses what the Council would do and the procedure at other meetings
could be addressed in the future.
Councilmember Buckshnis acknowledged Councilmember Teitzel for bringing this forward and reading it
tonight. She did not like pushing things on the agenda without figuring them out first. She respected
Councilmember Teitzel's proposal but preferred to go through the process.
UPON ROLL CALL, MOTION FAILED (2-5), COUNCILMEMBERS MESAROS AND TEITZEL
VOTING YES; AND COUNCIL PRESIDENT FRALEY-MONILLAS AND COUNCILMEMBERS
JOHNSON, NELSON, BUCKSHNIS AND TIBBOTT VOTING NO.
ACTION ITEMS
1. NON -REPRESENTED COMPENSATION STUDY
Council President Fraley-Monillas said this item was on the agenda seeking finality to the discussions. She
read the following statement:
"Our Directors do a good job for the city—no one is disputing that—but so do the 50 rank and file
employees who work in represented positions including engineering, finance, IT and others who have
been out of contract since 2017, they have not received a cost to offset their medial and continue to
wait for a 3% COLA and a contract renewal. The Administration is requesting increase to the nine
highest paid members of the staff due to eight of the nine being at the top of the band and will receive
no further increase other than COLAs. Where's the fairness in requesting 8% increases for just theses
few employees?
My concern lies with the Program Coordinator who has been on staff for 33 years and has been at the
top of their band for 10 years. My concerns lie with the 30 year employee of the Edmonds Cemetery
who has been at the top of their salary band for over 10 years. My concern lies with the Program
Manager who has been with the city for 25 years and the only salary increase they have to look forward
to is a COLA? Not every job class has been re-examined.
To exacerbate the situation, HR reports to Council estimating that 50% of our city employees are at the
top of their salary band with a COLA as their only possible increase. My concern lies with parity; when
do those 50% get THEIR salary reviewed?
The Administration wants new salary bands for the highest paid staff, but it is important to note that
not all of the job classes in the city have been afforded the same reallocation or rebanding. Let's look
at all of the jobs at the top of the salary band and decide as a whole what to do next."
COUNCIL PRESIDENT FRALEY-MONILLAS MOVED, SECONDED BY COUNCILMEMBER
BUCKSHNIS, TO NOT SUPPORT THE SALARY INCREASE FOR THE NAMED EMPLOYEES .
IN THE MAYOR'S SALARY INCREASE WHICH INCLUDES THE TWO ASSISTANT POLICE
CHIEFS.
Councilmember Buckshnis agreed the directors do a great job. To her, this was an issue of how it was
processed and presented and a direct conflict of interest. As a former regulator, she saw an HR person, and
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May 7, 2019
Page 6
everyone knows about ethics and conflict of interest, creating new steps and more money for herself. She
did not support how the increase was included in the budget as a placeholder in the non -departmental budget
and she did not support it because it was a direct conflict of interest. She preferred to hire an independent
consultant, similar to what was done seven years ago, to look at everyone's steps including the wonderful
directors. This may appear to be the Council discriminating but they are not. All are great employees and
do a wonderful job, but this process was not handled properly and as a former regulator, she could not
support it.
Councilmember Mesaros said the City has a policy regarding this issue and in his observation, the
administration's recommendation was following that policy, a policy created by the Council, not the
administration. He found Councilmember Buckshnis' comment regarding conflict of interest interesting,
recalling the same thing was done related to the policy three years ago and that issue was not raised. He did
not find this an Administrative issue, but a City Council issue as several Councilmembers have decided not
to follow the City's policies, introduce new policies or discuss the current policies. He said Council
President Fraley-Monillas brings up good points regarding the salary policies for other employees and those
should also be addressed, but he had not seen any Councilmember present such a proposal. Rather than
punish a group of employees because there is not a policy for other employees, the Council should present
policies for the other staff. He will vote against the motion because he believed it conflicted with the City's
policy and did not fulfill it. The policy needs to be fulfilled for all employees, not just directors.
Councilmember Buckshnis said three years ago a presentation went through extensive executive sessions
to raise salaries that did not create new rungs and it did not have a conflict of interest. A conflict of interest
prohibits municipal officers from using their position to secure special privileges or special exemptions for
themselves or others and from entering into certain contracts or having other personal financial interest with
their jurisdiction. That statement makes it clear there was a conflict of interest and it was handled by putting
a placeholder in the budget; Council approved the budget, only two Councilmembers were made aware of
it and suddenly the Council is at fault. She opined no one was at fault, the process should be done correctly,
the policy should have a conflict of interest statement in it and after seven years, it was time to have an
independent consultant look at the policies and everybody's jobs.
Council President Fraley-Monillas said she appreciated being schooled on the City's policies but this is the
City Council's policy for the Council to do with it as they wish. Just because it's written in policy does not
mean the Council has to follow the policy. This is an issue of funding which firmly falls within the Council's
purview. Her biggest concern was what message did providing an 8% raise to the highest paid staff send to
City employees while other employees have been fighting for a contract for 1'/z years and employees who
have remained at the top band of their salary for many years. As her proposal stated, she has no problem
with looking at the director's salaries in the future, perhaps in three years and between now and then begin
looking at the bands for other employees.
Councilmember Johnson relayed her understanding that a report was due by the HR Director on all Non -
Represented salaries last September. It is now May and she did not think that had been done. It was only
done for the directors, not all the 48 Non -Represented employees. If that job could not be done, the Council
should have been informed and a consultant hired to assist in that task. If the comparisons are only done
every three years, it is not fair to the rank and file employees to wait another three years. There needs to be
some corrective action, do the job that was intended to be done, review all the Non -Represented salaries
and prorate it to get back on track. She was not in favor of increasing steps; as a former government
employee, there were seven steps and employees lived with that and it was not increased to twelve steps
just because people have been there forever. She did not want to send the message that the Council is only
looking at directors' salaries. The objective hasn't been fulfilled and it needs to be done right.
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Page 7
Councilmember Teitzel said he fully supports parity and equity in how employees are treated, the rank and
file employees as well directors. However, he agreed with Councilmember Mesaros, although he did not
necessarily like the policy, it is the City's policy. If the Council consciously votes to deviate from that
policy, it sets a dangerous precedent. The Council spends a lot of time working on and improving policies
and they are typically approved unanimously. He has carefully studied the HR Director's proposals on pay
increase and found they complied with the policy, fitting the letter of the law. He believed the Council
should proceed as proposed and also look at the other salary bands as quickly as possible and take action
to bring them into line. He did not support the motion.
Councilmember Tibbott agreed with the comments about supporting the current policy. The HR Director
has done an excellent job identifying comparables from other cities and he found when the numbers were
presented previously, they were fairly comparable. He was supportive of moving forward with using the
policy but did not support the motion. He disagreed with the notion that there is a special interest and
recognized there was a very objective process to develop numbers. He suggested instead of implementing
the full 5% increase at one time, implementing it over 3 years. He supported both implementing the current
policy and look at further adjustments to the policy that would apply to current directors as well as Non -
Represented employees. He did not support the motion, preferring to fully implement the existing policy
and move forward with the wage adjustments as presented.
Councilmember Mesaros reminded Councilmember Johnson of the process, agreeing the policy should
have been introduced to the Council in September 2018, but traditionally the represented employees are
completed first and at the end of last year, those contracts were still being finalized. This was introduced to
the Public Safety, Personnel & Planning Committee in December and pulled by Council President Fraley-
Monillas, a member of that committee, and it has been on hold since that time which is why it hasn't been
addressed. He concluded the holdup was not the HR Department but the role of Councilmembers.
Councilmember Nelson thanked the HR Director Mary Ann Hardie for putting together the packets and
doing the study and Mayor Earling for making a recommendation which is what the policy states, obtain a
recommendation from City staff. That happens often with many issues, staff provides a recommendation
and the Council makes a decision taking all factors into consideration as the legislative body, not the
executive branch. When he looks at that in its entirety, he found it did not make fiscal responsible sense to
support increasing the wages of the highest paid staff at this time.
Councilmember Teitzel disagreed with Councilmember Buckshnis on the issue of conflict of interest. The
HR Director is a trained expert in evaluating compensation and has followed the policy the Council
established. It is not the HR Director's role to call out her salary; it is her role to recommend bands to
Council for review and action. The Council has the ultimate authority, not Ms. Hardie, so from that
perspective there is no conflict of interest. Ms. Hardie has submitted a recommendation that follows the
policy; the Council evaluates whether the policy has been followed and makes a decision.
Councilmember Buckshnis said she did not want to get into a back and forth, noting two accountants, two
regulators, two engineers, two lawyers, etc. could have different opinions and they would have to agree to
disagree.
Councilmember Mesaros began to speak and Councilmember Johnson raised a point of order, advising
according to Roberts Rules of Order, a Councilmember was only allowed to speak twice on any issue.
Mayor Earling agreed to follow Roberts Rules of Order.
UPON ROLL CALL, MOTION CARRIED (4-3), COUNCIL PRESIDENT FRALEY-MONILLAS
AND COUNCILMEMBERS JOHNSON, NELSON AND BUCKSHNIS VOTING YES; AND
COUNCILMEMBERS MESAROS, TEITZEL AND TIBBOTT VOTING NO.
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May 7, 2019
Page 8
Mayor Earling asked to have floor.
COUNCILMEMBER MESAROS MOVED, SECONDED BY COUNCILMEMBER TIBBOTT,
THAT MAYOR EARLING BE ALLOWED TO SPEAK. UPON ROLL CALL, MOTION FAILED
(3-4) COUNCILMEMBERS MESAROS, TEITZEL AND TIBBOTT VOTING YES; AND COUNCIL
PRESIDENT FRALEY-MONILLAS AND COUNCILMEMBERS JOHNSON, NELSON AND
BUCKSHNIS VOTING NO.
2. GATEWAY SIGN RECOMMENDATION
Parks & Recreation Director Carrie Hite introduced Arts & Culture Program Manager Frances Chapin and
members of the Gateway Sign Committee Tanya Sharp and Roger Pence and recognized committee
members in the audience. She recalled when a smaller committee made a recommendation for a gateway
sign in July 2018, there was interest in the community in slowing down the process and including more
public input. The committee was then expanded to include people who expressed interest in being involved
as well as inviting a few people in the community who would be helpful to the process. Several open houses
and online surveys were held. The City engaged Clayton Moss to be the main designer and the committee
guided his process. Mack Benek also wanted to be part of the design process and his designs were
considered in the process. The sign became more about the identify of Edmonds, not necessarily just a sign
saying Welcome to Edmonds. She reviewed:
• Gateway Sign
o The SR 104 & 5th Ave S. sign was identified for replacement in the 2016 CIP
o Discussion of proposed replacement in July 2018 led to a full public process regarding
preferred sign type and specific design
o Public process resulted in unanimous recommendation of new sign concept by Gateway Sign
Committee
• Parameters for Sign
o Location — WSDOT right of way — primary highway function is as a sign for SR 104 in an area
where traffic is moving fast, 30 — 40 mph
o Function — "Welcome" to the downtown/waterfront
o Goal - Create design embraced by public and meet WSDOT requirements
• Gateway Sign Committee
o Stephen Clifton
■ Cascadia Art Museum Board; Landscape & Urban Design
o Sharon Grader
■ Edmonds Arts Festival Board; Artist; Graphic Design; Resident
o Lillyan Hendershot
■ Downtown Business; Graphic Design and Printing
o Mary Monroe
• Economic Development Commission; Tourism; Resident
o Roger Pence
■ Downtown Resident; Retired from Sound Transit
o Tanya Sharp
■ Arts Commission; Downtown Resident; User Experience Design
o Richard Suico
■ Edmonds Library; Chamber Board; Resident
o Juliana Van Buskirk
■ Downtown Business; Chamber Board; Resident
o Mark VonGunten
• Downtown Business Alliance Board; Graphic Design
Edmonds City Council Approved Minutes
May 7, 2019
Page 9
Mr. Pence explained he lives on 5"' Avenue and passes the sign daily either in his car or the bus. As a
newcomer to the City, he noticed the sign was dilapidated and when the issue arose last summer he took an
interest. The original proposal looked more appropriate for a corporate office park or a business and it did
not speak to downtown Edmonds. He spoke with Ms. Chapin and was impressed with her receptivity to his
opinions. A few weeks later he accepted an offer to serve on the advisory committee. He reviewed:
Public Process
o Gateway Sign Committee of nine engaged citizens
o Six committee meetings between November 2018 & April 2019
o Two public open houses, November 2018 and February 2019
o Two online surveys — over 1800 participants:
■ December 2018 Survey regarding preferred sign types — over 500 responses
■ March Survey 2019 regarding preferred design — over 1300 responses
o Collaborative process — committee/designer/public input
Ms. Chapin reviewed
• 1st Open House & Survey (500 responses)
o Preferred General Sign Types
■ Traditional Post & Panel — 47%
■ Freeform Monument— 38%
■ Traditional Monument — 14%
o Most Popular Themes
■ Waterfront
■ Environment and Natural Setting
■ History, Arts & Culture
o Results reviewed by Gateway Sign Committee and incorporated
■ 2nd Open House & Survey — rank the sign types 1 to 5
o 1305 respondents identified a first choice 90% of respondents live or work and live in
Edmonds)
Type A — Post and Panel (Moss) 76
Type D — Post & Panel (Benek) 381
■ Type B — Mon/Concrete 202
■ Type E — Existing Sign 81
■ Type C — Mon/Metal 65
• Survey — indicate the element you like for preferred type A — forma post and penal
o 711 respondents
Colors 73.42%
• Fonts/lettering 58.65%
■ Materials 61.18%
■ Represents Downtown Edmonds 67.93%
■ Style/Design 88.47%
• Additional comments
o Type A — 207 total additional comments volunteered:
• 24% specifically mentioned liking the mountains, view and reference to environment
■ 19% specifically mentioned liking that Type A blends traditional and modern
Ms. Sharp reviewed:
• Results Summary — 2nd Open House & Survey
o Preferred Post & Panel Type A concept design by Forma
o Environment, history, arts & culture elements important
o Blend of traditional and modern.
• Gateway Sign Committee Recommendation
Edmonds City Council Approved Minutes
May 7, 2019
Page 10
Councilmember Mesaros complimented the committee on their work, remarking getting things right takes
time and investment. He referred to the graph of votes, commenting it does not represent majority but a
plurality; a plurality of people liked this sign. He asked what would have happened if the two top designs
were ranked. Ms. Chapin said the top two were ranked and there was exactly the same distribution.
Councilmember Nelson said he attended the second open house and saw the mockups of the signs. Not
wanting to influence the outcome, he did not vote, but there was a clear winner. Unquestionably, this
process produced a better sign. His only concern was the process did not include discussion of the Council's
request to spend $10,000. The budget went from $40,000 in July, $35,000 was requested in the budget, the
Council approved $10,000 and now the request was for an additional $10,000. He asked for a breakdown
on the cost. Ms. Hite reviewed the budget:
• 2016 CIP budget: $40,000
• 2019 approved budget: $10,000
• 2019 estimated cost for final design, WSDOT review, construction and lighting = up to $20,000
+ Request preliminary approval of additional $10,000 budget to complete the sign project to be
brought forward as budget amendment in next cycle
Ms. Hite explained the lighting is proposed to be solar LED which could be excluded from the design.
Councilmember Nelson asked if the existing sign was lit. Ms. Hite advised it was not. She explained the
background of the design includes a mural painted by Andy Eccleshall. Mr. Eccleshall approved the use
but it likely will be need to be valued at some level. Mr. Moss said the sign could be fabricated for $15,000
or less. Adding the WSDOT review and lighting increases the cost. For comparison, Marysville replaced a
similar scale gateway sign in 2010 at a cost of $18,739 (not including tax) and Kenmore spent $14,000 on
a smaller gateway sign that did not include lighting. If the Council directs, staff can ask Mr. Moss what he
can produce for $10,000 and exclude the lighting to reduce the budget.
Councilmember Nelson referred to Mr. McMurray's suggestion for a second sign. He looked at the sign
near the ferry recently and agreed the Welcome to Edmonds sign when exiting the ferry was sad looking.
He inquired about the process for a second sign. Ms. Hite agreed that was another gateway. As there was
an extensive process for the proposed gateway sign, she recommended a public process for the ferry
gateway rather than defaulting to the second place sign. Ms. Chapin, Mr. McMurray and she discussed an
alternate location for Mr. Benek's sign that would preclude a public process and agreed on log cabin where
the sign is due for replacement. The original intent was a general park sign but it is a charming sign, with
older characteristics similar to the log cabin. If the Council was amenable and Mr. McMurray finds
community funding, that could be a win-win.
Councilmember Buckshnis said bravo, recalling the Betty Mueller fire station dedication was funded by
the community funds and she recalled Mr. McMurray's offer to lead a community funding effort. She liked
the proposed sign, the public process, and the solar LED lighting.
Councilmember Tibbott thanked staff and the committee for the public process, a great way to allow people
to voice their opinion that resulted in a better sign than the original concept. He inquired about the location
Edmonds City Council Approved Minutes
May 7, 2019
Page 11
of the sign. Ms. Hite said the existing location is fine and it has a lot of landscaping around it, but the
committee was interested in moving it south closer to the Y and east so it is closer to the ferry/beach lanes.
The next steps in the process including locating the mockup on site and determining where it can best be
seen from both lanes, where it blends with environment, etc. The Park crew will do the landscaping which
will save some money and moving the landscaping will be a big job. Councilmember Tibbott supported
moving it south and east to make it more prominent and he also support the solar LED lighting. He liked
the landscaping around the sign and was pleased that could be done inhouse. He also liked the idea of
finding a location for the alternate design.
Councilmember Johnson said she was not happy with the process because the City Council is supposed to
make decisions, not nine people on a committee. She would have preferred the Council had been provided
three choices and the Council make a decision. The proposed sign is not her favorite but a process was
established that she cannot argue with. The process is supposed to be a recommendation and the Council
makes the decision which requires giving the Council choices. She acknowledged art is personal, the
proposed sign is not her personal taste and she likes the old sign. There were a lot of things about the sign
she liked such as the color, but she did not like the mountain top, it did not include the ferry, it did not look
like downtown Edmonds to her and it looked generic. She said that could have been avoided if the Council
had been provided three choices with an explanation for each. With regard to the cost, she recalled the cost
was shared with the committee. There will be savings with moving the landscaping and not needing
electrical due to the use of solar lighting. She requested staff return with ways to save $10,000 as she did
not want to spend an addition $10,000 unless she knew exactly how it was being spent.
Although he respected Councilmember Johnson's comments, Councilmember Teitzel said he heard loud
and clear from citizens they wanted direct input into this process and other issues. The committee created
a very robust public process that allowed citizens to weigh in and they have spoken. Councilmembers may
have their preferences but the process needs to be respected. He thanked the committee, recognizing it was
a laborious process, the artists Clayton Moss and Mack Benek for producing excellent options for
consideration and the public for their participation in the process.
Councilmember Mesaros said the City Council does gets to decide. If the Council doesn't like the proposal,
they can turn it down and pick any design they want. Staff and the committee followed the process the
Council suggested. A design was presented to Council and when there was consternation with the design,
the Council provided a process which was followed. With regard to cost, he said no one likes to spend
money but you get what you pay for. He anticipated not much of a sign could be created for $5,000 and it
appears the City may not get what it wants for $10,000. This sign should last at least 25 years, and amortized
over that period of time, it was not that expensive. He agreed it was important to look at the facts associated
with the cost and decide if this was the type of sign the City wants for that price tag. If so, the Council will
vote for it.
COUNCILMEMBER MESAROS MOVED, SECONDED BY COUNCILMEMBER BUCKSHNIS,
TO APPROVE A BUDGET NOT TO EXCEED $20,000.
COUNCILMEMBER JOHNSON MOVED TO DIVIDE THE QUESTION INTO THE SIGN
DESIGN AND THE COST. MOTION DIED FOR LACK OF A SECOND.
MOTION CARRIED (5-1-1), COUNCILMEMBER JOHNSON VOTING NO AND COUNCIL
PRESIDENT FRALEY-MONILLAS ABSTAINING.
2. FINAL SUBDIVISION APPROVAL FOR JENKINS LANE PLAT AT 720 13TH WAY
Planner Mike Clugston explained Jenkins Lane is a five lot subdivision located at 720 13th Way. The
applicant received preliminary approval for the plat from the Hearing Examiner on November 9, 2017.
Edmonds City Council Approved Minutes
May 7, 2019
Page 12
Civil plans were approved on June 21, 2018. The plat is currently under construction and civil
improvements are being installed. At this time all the improvements have not been installed and the
applicant has provided a bond for their completion. Final plats are Type IV -A decisions made by the City
Council according to Chapters 20.01 and 20.75 ECDC. If the Council finds that the public use and interest
will be served by the proposed subdivision and that all requirements of the preliminary approval have been
met or bonded for, the final plat shall be approved and the Mayor and City Clerk shall sign the statement
of City Council approval on the final plat. All the conditions and requirements of the preliminary plat have
been completed or bonded for, and staff recommends council approve the resolution in Exhibit 2 in
preparation for recording of the plat with the county auditor.
Councilmember Buckshnis inquired about tree cutting, noting the Hearing Examiner said a tree cutting plan
shall be submitted ad approved. She asked if there were critical areas on the property. Mr. Clugston said
the parcel was essentially flat with no critical areas. Councilmember Buckshnis said the applicant has
proposed to keep 9 trees and remove 28. Mr. Clugston said that is correct at this time; there is no guarantee
that those trees will not be removed during individual building permits and individual homeowners can
remove trees. Councilmember Buckshnis referred to the Hearing Examiner's decision that states a tree
cutting plan will be submitted and approved with the civil plans for the removal of trees and asked how it
will impact the subdivision. Mr. Clugston said those trees were retained during the subdivision process;
they do not necessarily have to be retained by the individual homeowners. Councilmember Buckshnis
acknowledged homeowners can cut trees which is the reason for developing an Urban Forestry
Management Plan.
Councilmember Teitzel asked if any neighbors had objected or complained about the proposal. Mr.
Clugston answered there were several comments during the preliminary approval; those are included on
pages 195-196 of the packet. They were primarily regarding trees which is why the Hearing Examiner
included the condition for tree retention during subdivision.
Council President Fraley-Monillas observed there were other complaints such as traffic and parking. Mr.
Clugston said there was a question regarding traffic and parking; any change in the neighborhood raises
that question. The Council already approved a 10 -foot right-of-way dedication on the south side of 13"
Way to widen the street which should improve traffic flow and curbs and gutters will be added. Traffic will
increase with five new houses but not to an extent that would be addressed via traffic impact fees. Council
President Fraley-Monillas asked if there were any other complaints besides traffic and parking. Mr.
Clugston answered the only other issue raised was the trees.
COUNCILMEMBER TEITZEL MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO
APPROVE THE RESOLUTION IN EXHIBIT 2 IN PREPARATION FOR RECORDING THE PLAT
WITH THE SNOHOMISH COUNTY AUDITOR. MOTION CARRIED UNANIMOUSLY.
8. STUDY ITEMS
1. DEVELOPMENT ACTIVITIES UPDATE
Development Services Director Shane introduced Building Official Leif Bjorback. Ms. Hope explained
development activities are related to planning, land use, building construction and other engineering
projects such as parks. She described:
• Customer service staff provides
o Counter service
o Pre -application meetings
o Intake appointments
• Permit Activity
Edmonds City Council Approved Minutes
May 7, 2019
Page 13
o Graph of Permit History (Total Development Services Revenue compared to the number of
Building Permits) 1985-2018
Permits Reviewed by Development Services 2017 vs. 2018
Type of Permit
2017 # Issued
2018#
Issued
2017 Valuation
2018 Valuation
New
Permit Revenue $58,082
$42,806
$58,221
Inspection & Review Revenue $214,337
Single Family
60
57
$21,183,868
$21,063,845
Duplex
2 (4units)
2 (4units)
$788,348
$935,029
Apartment/Condo
1 (9units)
1 ( 4units)
$893,224
$402,926
Commercial
1
1
$7,549,151
$2,619,780
Mixed Use
Office/condo)
2 (111 units)
0
$14,756,385
0
Additions / Alterations
3
2
67%
28.7
Single Fami!Y
159
143
$8,947,055
$9,088,843
Apartment / Condo
21
15
$3,654,817
$785,891
Commercial
63
50
$12,384,817
$10,100,158
Other
Mechanical / Plumbing
431/414
413/442
Demolition
23
24
Miscellaneous
581
482
$17,224,983
$3,051,647
Total
1774
1646
$87,382,648
$48,048,119
Engineering Division
o Right -of way, side sewer, street use, and encroachment activity 2016-2018
2016
2017
2018
Permits Issued 429
415
460
Permit Revenue $58,082
$42,806
$58,221
Inspection & Review Revenue $214,337
$416,959
$249,427
Impact Fees and General Fac* ity Charges GFC's) for 2018
Transportation Impact Fees $201,348.49
Parks Impact Fees
$152,152.79
Water GFC
$196,293.00
Sewer GFC
$400,755.78
Storm GFC
$35,991.22
• Solar Permits 2012-2018
Year
# of Permits
# of Permits Online
% Online
kW
2012
3
0
0%
11
2013
6
5
83%
41
2014
39
35
90%
241
2015
32
29
91%
211
2016
17
16
94%
137
2017
0
0
0%
0
2018
3
2
67%
28.7
Totals
100
1 87
1 87% 1
669.7
• Over 10,500 inspections performed by Development Services staff
0 7,522 building inspections
0 3,158 engineering inspections
Mr. Bjorback reviewed:
• Map of major development projects
• New Development (key projects)
Edmonds City Council Approved Minutes
May 7, 2019
Page 14
o Point Edwards Building #10
■ 68 units
• Pine Street
* Completed
o Beachwalk Apartments
■ 9 Units
■ 3rd Avenue & Edmonds Street
■ Completed
o Northpoint Recovery
■ Tenant Improvement
■ 212" Street
Completed
o Post Office Phase II
■ 28 units + 7,600 square feet new commercial
■ Main Street
First floor tenant — Peoples Bank
■ Construction
o Westgate Village
■ 91 units + 3,100 square feet new commercial
■ Edmonds Way
Construction
o Doug's Mazda
■ 12,000 square feet new commercial
■ Highway 99
■ Construction
■ Future addition/remodel of service building and Hyundai showroom
o Cummings Apartments
■ 4 new residential units
■ 72nd Ave W
■ Construction
o Edmonds Village
■ Tenant improvement
■ Highway 99
■ Issued
o Kids Foundation Academy
■ Change of Use
■ 76th Ave W
■ Issued
o Waterfront Center
■ 26,000 square feet new commercial
■ Railroad Ave
■ Building permit review
o Port Marine Retail
■ 6,650 new commercial
■ Design Review
o Homestreet Bank
■ 6,763 square feet new commercial
■ Former Baskin & Robbins site
■ Design review
o GRE Apartments
■ 192 new residential units
Edmonds City Council Approved Minutes
May 7, 2019
Page 15
■ Highway 99
■ Applied
o Paradise Heights
■ 12 new residential units
■ Paradise Lane
■ Permit review
o Edmonds Crossing
■ 10 new residential units
■ Edmonds Way
■ Design review
o Kisan Apartments
■ 18 new residential units
■ Edmonds Way
■ Design Review
o Graphite Studios
■ Artist studios, art gallery, caf6 + 3 residential units
■ Main Street
■ Design Review
■ Applied
o Civic Field
■ Master Plan
x Funding being arranged
o Main Street Commons
■ Repurpose existing building and construction of new building
■ Retail, restaurant and event space
■ Preliminary Design
o New Downtown Restaurants
■ Future caf6/restaurant
- Kelnero
- Maize & Barley
- Calypso
o New Single -Family Homes
■ 49 active permits for single family under construction
■ Examples
- 184th St SW
- 236' St SW
- Viewland Way
- Pine Street
o Meitzner Plat
■ 11 new residential units
■ 244" Street SW
■ Issued
o Westhaven Plat
■ 10 new residential units
■ 98 Ave SW
■ Subdivision approved
o Single Family Remodels
■ Sea Vista PI
■ Skyline Dr
Edmonds City Council Approved Minutes
May 7, 2019
Page 16
Council President Fraley-Monillas asked the location of two projects on Edmonds Way, Kisan and
Edmonds Crossing. Mr. Bjorback offered to follow up with the addresses.
Councilmember Buckshnis asked about the location of People's Bank in Post Office Phase II, recalling
there would also be a restaurant. Mr. Bjorback advised the corner would be the main entrance to the bank;
it may also be used to reach other spaces. Ms. Hope offered to follow up on that question.
Councilmember Buckshnis asked if the commercial space in Westgate Village was vented for a restaurant.
Mr. Bjorback did not know. Ms. Hope advised there were plans to have some type of food establishment,
but she was not sure what type of venting was required. She offered to follow up. Councilmember
Buckshnis said she had heard Ono Poke and Subway were moving into the space but was told it was not
vented. Ms. Hope said the venting depends on the type of food service.
Councilmember Buckshnis referred to the GRE Apartments, recalling the Council's discussion regarding
separating commercial and resident mixed uses. She was glad that project would be all residential with a
courtyard without restaurants, etc. Ms. Hope said it also reflects the Council's discussion about under -
structure parking.
Councilmember Mesaros referred to the graph of permit history, commenting it would be interesting to
look at the impact that annexation has had on the trend line. He suggested adding a demarcation showing
how the City has grown through the years, noting for example the City was much smaller in 1985. He asked
Ms. Hope's sense regarding the trendline in 2019. Ms. Hope anticipated it would be similar to 2018.
Councilmember Johnson said she was struck by the number new apartments and houses and asked the
impact of this year's development on the population and whether it would help the City meet its housing
goals. Ms. Hope answered it would definitely help the City meet its housing targets. She offered to provide
numbers when household averages are determined, noting replacement housing did not increase the
population.
Councilmember Teitzel commented it was amazing to see how much work the Development Services
Department was doing. The permits indicate a lot of new development was occurring , but virtually none
of the existing or new projects were using solar. The City has very aggressive goals for renewable energy
and solar is clearly one of the ways to achieve that goal. He asked what ideas staff had to increase the
number of solar permits. Ms. Hope said clearly having more solar installations is a goal for the Council as
well as many members of the public, the Climate Protection Committee and staff because the kilowatt hours
used transfer to saved greenhouse gas emissions. In the 2-3 years where there were a number of solar
permits, incentives were created via funding from other resources to campaign. Staff is working on a climate
goals project, approved by Council, that will highlight the need for more solar as well as other ways to
reduce greenhouse gases and she expected a recommendation soon as a result of that process.
Councilmember Nelson said the state legislature approved and the governor signed some renewable energy
legislation which he hoped would result in incentives for solar. He thanked staff for the time they took
preparing a visual presentation, commenting it was helpful to see pictures of the developments not just
numbers. He calculated there were 470 new residences and suggested the annual report number cite the
number of new residences built in the year.
Councilmember Tibbott suggested along with the number of units, staff determine the number of bedrooms
to determine a potential number of new residents. Ms. Hope said that data may not be easily available.
Councilmember Tibbott inquired about transportation improvements, recalling the illustration of the GRE
Apartments shows a landscaping strip between Hwy 99 and sidewalk. Ms. Hope said one of the Hwy 99
project goals was more walkable pedestrian areas on Hwy 99. As development occurs, the new standard
Edmonds City Council Approved Minutes
May 7, 2019
Page 17
requires a landscaped area between the sidewalk and the travel lanes, a great safety improvement that makes
it more walkable, friendly and green.
Councilmember Tibbott asked what type of transportation improvements occur with single family
development and how landscaping was addressed. Ms. Hope said there are applicable landscaping
requirements but they are not as rigorous on single family homes as on larger developments due to smaller
sites, individual preferences and some reluctance to tell individual homeowners what they can plant. When
new development is proposed, the site must be brought up to current standards which sometimes includes
improvements to the right-of-way.
Councilmember Tibbott asked if improvements were made to the surrounding streets. Ms. Hope answered
typically not for individual houses, but there may be improvements such as repaving, replacing utilities,
underground utilities, etc. Councilmember Tibbott commented the future new landscaping at the GRE
Apartment site is a benefit on Hwy 99. Ms. Hope recognized although the focus of this presentation was
buildings, there are also infrastructure improvements.
2. FUND BALANCE / RESERVE POLICY DISCUSSION
Finance Director Scott James advised the Long Range Financial Committee initially drafted the policy; it
has been reviewed by the Finance Committee twice and staff is now seeking City Council input. He
reviewed:
During the last recession, the City lost over $13.3 million in revenues
We laid -off 21 employees
Impacts to citizens included the elimination of:
1) Elimination of Block Watch Program
2) Elimination of Police Department's Vacation House Check Program
3) Elimination of Crime Prevention Unit
4) Fewer Police Officers to keep our City safe
5) Staff had to take 10 days of furloughs
6) Stopped Street Preservation Program
7) Staff had to do more with less resources
Tonight we are going to discuss a plan that has a goal to limit future impacts to citizens and staff
Current Policy
o Calls for a total of 18%
1) Contingency Reserve Fund — Target 8 — 16%
2) Risk Management — Target 2%
o Use of Contingency reserves limited to solving imbalances in the General Fund
o Use of Risk Management reserves limited to mitigation of legal matters or natural disasters
Factors to Consider When Setting Your Fund Balance Level
o GASB 54
■ The first factor incorporates the requirements of the Governmental Accounting Standards
Board (GASB)
• For those unfamiliar with GASB, GASB is the body that establishes Generally Accepted
Accounting Principles or (GAAP), the accounting rules we have to follow
* GASB issued Statement 54 requiring Fund Balance Classifications
■ We implemented this rule in 2014 and now updating the policy to include GASB Statement
54 requirement
o RCW 35A.33.145
■ RCW 35A.33.145 establishes authority for Contingency Fund Creation
■ This RCW allows us to create a Contingency Reserve Fund to:
- Meet any municipal expense which could not have been foreseen or for emergencies
Edmonds City Council Approved Minutes
May 7, 2019
Page 18
- The RCW limits the size of the reserve to thirty-seven and one-half cents per thousand
dollars of assessed property valuation or approximately $3,830,000
o GFOA Best Practice Guideline
■ GFOA recommends a fund balance reserve of no less than two months of regular general
fund operating revenue or operating expenditures
• The choice of revenues or expenditures as a basis of comparison may be dictated by what
is more predictable
1. The predictability / volatility of revenues and expenses
a. GFOA states higher levels may be needed if revenues or expenses are
unpredictable or volatile
2. Perceived exposure to significant one-time outlays, e.g., disasters, state budget cuts, or
immediate capital needs
3. The potential drain upon the general fund from other funds
4. The potential impact on the entity's bond rating
■ Past experiences — During last recession
1. Lost Revenues - EMS Levy, Sales Tax & Development Related Revenues
a. Lost EMS Revenue 2009-2017 Totals $4,494,460
b. Lost Sales Tax Revenue 2007-2014 Totals $4,383,724
c. Lost Development Related Revenue 2007-2014 Totals $4,052,843
d. Graph of Cumulative Revenues Lost Due to Recession 2008-2016
• Approximate Reserve Policies in Neighboring Cities
o Marysville 8%
o Shoreline 10%
o Bremerton .12%
o Redmond 12%
o Renton 12%
o Bothell 15%
o Mill Creek '15%
o Average
17%
o Puyallup
19%
o Lynnwood
20%
o Issaquah
20%
o Mukilteo
21%
o Des Moines 22%
o Auburn
22%
o Kent
28%
Draft Policy Overview
o Article I - To provide for the continuity of City government by planning ahead for uncertainties
or unforeseen expenditures
o Article Il - Criteria that should be considered
1. Volatility
2. Fund size
3. Purpose of reserve
4. Bond Ratings
o Article III - General Fund Operating Reserve
■ Policy would set reserve to equal 16% of General Fund Adopted Operating Expenditure
Budget (current policy based on revenues)
• Finance to deliver annual report to Council
■ Limitations of Fund Use
■ Mayor can declare a fiscal emergency based upon:
1. Natural catastrophe
Edmonds City Council Approved Minutes
May 7, 2019
Page 19
2. Threat to health or public safety, or
3. Significant decline in General Fund revenues
■ Fiscal emergency must be approved by a simple majority vote of the Council
o Article IV - Contingency Reserve Fund
■ Primary differences between the two reserves
1. Contingency Reserve limited by RCW
2. The two reserves cannot surpass 20% of the General Fund Adopted Operating
Expenditure Budget
3. If the General Fund Operating Reserve equals 16%, then the Contingency Reserve
cannot exceed 4%
4. General Fund Operating Reserve should be exhausted prior to utilizing the
Contingency Reserve
■ Fiscal emergency must be approved by a simple majority vote of the Council
o Replenishment of the Reserve Funds
1. 0— 10% use of funds be replenished over 3 years
2. 11 — 25% use of funds be replenished over 5 years
3. 26 — 50% use of funds be replenished over 7 years
o Article V - Reporting
■ During month of August, Council to receive comprehensive fund balance reserve report
o Article VI - Five Year Review
o Article VII - Any deviations from policy requires Council approval
o Article VIII - Definitions
• Review / Recommendations
o Current Policy Calls For a total of 18%
o The amended policy calls for a total of 20%
o Finance Committee recommends closing the Risk Management Fund into the General Fund
Councilmember Buckshnis asked staff to explain to Council the General Fund Operating Reserve Fund on
page 17 of the 2019 budget that shows $6,607,639 for 2019 and $955,700 for the Risk Management. Mr.
James explained the beginning of the budget book contains a strategic outlook where staff identifies fund
balances; the General Fund 001 is not really a reserve that is addressed in a policy. Councilmember
Buckshnis commented even though the Council has not established a policy, there are funds in the budget.
Councilmember Buckshnis referred to an article in MSRC News where Mike Bailey states Redmond as an
8.5% minimum fund balance. She noted Edmonds has a floor of 8% which she wanted to retain. Redmond
also has a 4% economic stabilization fund for a total of 12%. She emphasized the City has reserves, it just
needs a policy. She preferred the reserve remain at 16% and eliminate the Risk Management Reserve. If
bonding requires a 20% reserve, she said sometimes an AA rating rather than A rating is sufficient.
Mr. James said the $13.3M in lost revenues was equivalent to 31% of the General Fund Operating budget.
He referred to an article in the packet by Mike Bailey, "Which Financial Policies Work Best? It Depends."
Each city is different and Redmond is different than Edmonds as they have a much larger budget and 20%
would be a large amount of money and likely would not be prudent for them.
Council President Fraley-Monillas observed the current reserve was 16% with a floor of 8%. Mr. James
said the current reserve totals 18%, 2% in Risk Management and a floor of 8% and a maximum of 16% in
the Contingency Reserve Fund. Council President Fraley-Monillas observed the recommendation is to
increase that to 20% and asked where cuts would be made to increase the reserve, noting the City does not
have a lot of money at the end of the year. Mr. James answered the General Fund, the Contingency Reserve
Fund and the Risk Management far exceed 20%. No cuts would be required, in fact funds would be
transferred out of the Contingency Reserve to be in compliance with the RCW which would go into the
Edmonds City Council Approved Minutes
May 7, 2019
Page 20
General Fund. If Council follows the Finance Committee's recommendation and closes the Risk
Management Fund, that 2% would also go into the General Fund.
Council President Fraley-Monillas observed when situations occur that require funds to be paid, the balance
would be decreased. She asked how expenditures from the funds would be replenished. Mr. James referred
to the proposed policy that outlines replenishment of the reserve funds:
■ 0 — 10% use of funds be replenished over 3 years
■ 11 — 25% use of funds be replenished over 5 years
• 26 — 50% use of funds be replenished over 7 years
If an event occurred that required the use of 3%, the fund would need to be replenished within 3 years. A
plan for replenishing the fund would need to be developed and approved by Council and incorporated into
the budget. He referred to a sister policy that has not been vetted by the Finance Committee, a gap closing
plan, that puts the onus on the administration to develop a plan. A gap is when expenses exceed revenues
and requires the administration to develop a plan for closing that gap and present it to Council. The Long
Range Financial Planning Committee discussed that but it has not been fully developed. Council President
Fraley-Monillas suggested that needed to be developed as part of this policy. Mr. James said replenishment
requires a plan be developed. During the recession, numerous expense reductions were enacted the included
not filling positions, furloughs, 4% across-the-board cuts, etc. The plan for replenishment will not be
specified in the reserve policy because it may vary depending on the reason for using reserves.
Council President Fraley-Monillas observed if reserves were used, they would need to be replenished
somehow. She was on Council at the end of the last recession and although some positions were not filled,
most were filled in subsequent years. She asked if it was anticipated cuts would occur, noting salaries were
the most expensive thing in the City. Mr. James said there are two options, 1) cuts and 2) increasing
revenues such as increasing the EMS levy to 50 cents/per $1,000 (currently at 39 cents), councilmanic
authority for an additional 20% TBD vehicle fee, a garbage franchise fee, or enacting other fees.
Council President Fraley-Monillas asked what the reserves could be spent on. Mr. James answered since
he has been in the City, reserves have been used to pay a retro bill from the Fire District; funds were
budgeted to do that again but revenues streams increased and it was not necessary. Council President Fraley-
Monillas clarified the reserve fund can be used for emergency purposes not to fund a park, pave roads or
other everyday expenses. Mr. James agreed, relaying per Article III, the Mayor can declare an emergency
based on three events, 1) natural catastrophe, 2) threat to health or public safety, or 3) significant decline in
General Fund revenues, but any use of the funds must be approved by the City Council. He said a statement
regarding who develops the plan for replenishment could be added to the policy.
Councilmember Tibbott suggested it would be helpful for the administration to have some flexibility in
proposing a plan to fill the gap. He suggested staff outlining ways the administration could bring forward a
plan. If the Council got rid of the Risk Management Fund, he asked what the fund with 20% would be
called. Mr. James said there are two reserves 1) the General Fund Operating Reserve which would be within
General Fund, and the 2) Contingency Reserve. Councilmember Tibbott assumed the General Fund
Operating Reserve would ebb and flow. Mr. James answered the policy calls for a maximum of 20%. The
Contingency Reserve will increase and decrease based on assessed values. Assessed values are increasing
now so the reserve could be increased by a simple transfer. The General Fund Operating Reserve would
ebb and flow based on economic cycles. The idea is to have a minimum fund reserve so when a recession
occurs, the City will have enough funds to get through it and hopefully lessen impacts to staff and citizens.
Councilmember Tibbott inquired about the Contingency Fund versus the RCW Reserve Policy, asking if
those were two different ways of evaluating the amount that should be in the Contingency Reserve. Mr.
James explained RCW limits the Contingency Reserve to 37.5 cents/$1000 AV, if that were calculated
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tonight, it is approximately to 8.6%, the maximum that can be in the Contingency Reserve. That amount
varies from year to year; with assessed values increasing for the last several years, the fund balance could
grow 10% year to year. Councilmember Tibbott referred to $3.83M in the presentation. Mr. James
explained the RCW limits the Contingency Reserve to 37.5 cents/$1000 AV which in 2019 would be
approximately $3.83M. Councilmember Tibbott asked what happens if the City goes over that and fund
were automatically transferred to the General Fund. Mr. James said the policy does not address that; a
budget amendment would be required to move funds to comply with the RCW. Councilmember Tibbott
asked if that happened very often. Mr. James said at 4% probably not unless there was a significant event
where a lot of assessed value was lost.
Councilmember Teitzel recalled the Finance Committee discussed this policy at length last year and he
appreciated staff streamlining policy as the Finance Committee recommended. The basis of this policy is
whether one believes the City should be more aggressive or more conservative with its finances. The
economy runs in cycles and there will be another downturn at some point. He likes to be more conservative.
There is a nice recovery period currently, revenues are strong, but that will not continue. Now is the time
to be nervous and uneasy and look toward a policy that positions the City for the next downturn which the
proposed policy does. The proposed policy is reasonable, not excessive, midpoint with what other cities are
doing and he supported moving in this direction.
Councilmember Teitzel liked that the Mayor cannot sweep the reserve funds for a large project such as
Civic Field, the Waterfront Connector, etc., and that use of the reserve requires Council approval. The
GFOA recommends at a minimum that general purpose governments maintain unrestricted budgetary fund
balance in their General Fund of no less than two months of regular General Fund operating revenues of
regular General Fund operating expenditures. He said 16% is two months and GFOA recommends that as
a floor. The City has volatile revenue sources and depends heavily on car sales and restaurants, eatery and
bar tax revenue, revenue streams that are at risk during the next economic downturn. For those reasons, he
supported the fund balances as proposed.
Councilmember Mesaros referred to the replenishment of reserve funds and agreed with Mr. James that it
was difficult to know where funds for replenishment would come from without knowing the reason why
the reserve funds were used. The replenishment percentages are a good guide, but there could be a situation
where it may take longer to replenish the funds due to the circumstances. He agreed there will be another
downturn; since WWII there have been 17 recessions in the United States but there have also been 17
recoveries; recovery always comes. If the reserves are based on expenses as recommended, as expenses
decrease, the amount that needs to be in reserves to meet the policy will also decrease so the payback will
not take as long. During the good years there will be a larger reserve and during the lean years, the reserve
will decrease naturally. He concluded it was difficult to plan for replenishment, but with Council and staff
leadership that plan will become apparent.
Councilmember Nelson strongly agreed with Councilmember Teitzel and appreciated his description that
16% represents two months. The amounts proposed, 16%, are the bare minimum for operating and moving
forward, the Council may want to consider whether that needed to be increased.
Councilmember Johnson recalled discussing these topics at length with Mr. James and Mr. Turley and
commended them for condensing those hours of discussion into something simple and easy to understand.
She cited the amounts that the City is limited to by RCW and the amount the policy recommends for the
General Fund Operating Reserve. She thanked staff and the Long Range Planning Committee which
included staff, Councilmembers and members of public. Mr. James said he valued the feedback from the
Long Range Planning Committee. He clarified the Contingency Reserve would be set at 4%; the limit in
the RCW is approximately 8%. The 16% is following the GFOA best practice of 2 months of operating
expenses.
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Councilmember Johnson asked about next steps. Mr. James said based on Council feedback, staff will
incorporate language asking administration to develop a plan for replenishment. It would be similar to the
gap closing policy. He will bring that to the Finance Committee for review and bring the committee's
recommendation to Council in June/July.
Councilmember Buckshnis said the City has plenty of reserves they just need to be moved around and a
policy created. The Finance Committee will discuss decision points and bring it to Council in July/August.
9. MAYOR'S COMMENTS
Mayor Earling hoped Councilmembers had an opportunity to see the fabulous work done by Floretum
Garden Club members and staff in the islands downtown. He reported on fundraisers that he and some other
Councilmembers attended, the Waterfront Center/Senior Center auction broke through $100,000 and
Center Stage at Edmonds Center for the Arts raised over $200,000. These events recognize the quality of
organizations in the City and the importance of the public giving local.
Mayor Earling was pleased the Council finally reached a conclusion on the Non -Represented Director
salaries. He was not happy with the outcome but after waiting five months, he was glad it had been
concluded. He often listened to Councilmembers give great extoling compliments about directors and in a
subsequent meeting demeaning those same directors. Specifically the things the HR Director has gone
through, questioning her integrity and demeaning comments made regarding the Police Chief and Public
Works Director. All those good words ring hollow with the directors. HR has scrupulously followed the
Council's policy in arriving at decisions, yet tonight he heard suggestions that the policy basically be written
on the dais which is not the way policy is crafted in municipal government. He concluded tonight
Councilmembers sent a clear message to the quality and value of the directors and it was not a good one.
10. COUNCIL COMMENTS
Councilmember Johnson relayed a newsworthy event, the UNESCO Director -General's statement that the
findings of a recent UN global assessment has put the world on notice; 1 in 4 species are at risk of extinction,
crop security is threatened long term and marine pollution has increased tenfold since 1980. At the same
time there have been gray whales dying on beaches. Although the whales will be studied, early thoughts
are that they died of starvation. For every 10 whales on beaches, there are 90 others that do not land on
beaches which means nearly 200 large gray whales have been lost, possibly due to starvation. She found
this quite alarming but did not know quite what to do. She recommended the Mayor's Climate Protection
Committee be asked to discuss this and develop recommendations. This is a worldwide challenge that will
be resolved one species at a time.
Councilmember Teitzel reported he toured the new Northpoint Treatment Center, a facility that focuses on
substance abuse, primarily alcohol and drugs, providing a 28 day in-patient program. It is an excellent, high
quality facility that has been sorely needed in South Snohomish County. He recommended all
Councilmembers tour the facility. He is leaving Saturday for California for his youngest daughter's wedding
and he appreciated the accommodation to participate in the next 1-2 Councilmembers by phone.
Councilmember Tibbott reported on a conference held at the Lynnwood Convention Center, Step Up, put
on by Leadership Snohomish County regarding diversity issues. Several members of the City's Diversity
Commission, the Chamber of Commerce and the ECA also attended the conference. He found it interesting
to dialogue with community members between sessions about what diversity might look like in the future
and how to navigate the stream of change. He suggested Councilmembers attend future events, recalling he
learned about it via an email provided to Councilmembers. One of the pieces was recognizing Native
Americans at the beginning. He was interested in moving forward with a statement recognizing Native
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Americans but wanted to consult more broadly before doing so. He looked forward to a great month and a
lot of sunshine.
Council President Fraley-Monillas hoped what staff got out of today's Council discussion and action was
that they are all valued, respected and treated fairly. There was a large contingency of staff at tonight's
meeting and she was glad they heard that they are respected and should be treated fairly.
Councilmember Mesaros reported he also participated in fundraising events, Center Stage at the ECA that
raised $230,000, the largest amount they've raised from that event and a significant increase over last year,
and the Waterfront Center auction that raised $132,000, a record amount. He was glad to see Mayor Earling
and other Councilmembers at both events.
Councilmember Buckshnis was hopeful the Urban Forestry Management Plan will be completed soon. The
Mayor's Climate Protection Committee is working with a consultant who has a dynamic model that the
committee will test. She will be in Washington D.C. next week for Puget Sound Week on behalf of the
Council to discuss the Edmonds Marsh restoration as well as a member of WRIA 8 Salmon Recovery
Council.
11. CONVENE IN EXECUTIVE SESSION REGARDING PENDING OR POTENTIAL LITIGATION
PER RCW 42.30.1100)(i)
This item was not needed.
12. RECONVENE IN OPEN SESSION. POTENTIAL ACTION AS A RESULT OI MEETING IN
EXECUTIVE SESSION
This item was not needed.
13. ADJOURN.
With no further business, the Council meeting was adjourned at 9:55 p.m.
DAVID 0. EARLING, MAYOR
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May 7, 2019
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