CITY OF SHORELINE
SHORELINE CITY COUNCIL
SUMMARY MINUTES OF SPECIAL MEETING
Monday, November 13, 2000
6:00 p.m.
Shoreline Conference Center
Mt. Rainier Room
PRESENT: Mayor Jepsen, Deputy Mayor Hansen, Councilmembers Grossman, Gustafson, Lee, Montgomery and Ransom
ABSENT: None
1. CALL TO ORDER
The meeting was called to order at 6:04 p.m. by Mayor Jepsen, who presided.
2. FLAG SALUTE/ROLL CALL
Mayor Jepsen led the flag salute. Upon roll call by the City Clerk, all Councilmembers were present with the exceptions of Councilmembers Montgomery and Ransom, who arrived later in the meeting.
3. REPORT OF CITY MANAGER
Interim City Manager Larry Bauman introduced Simone Deminch, a seventh grade student videotaping part of tonight’s Council meeting as a school project. He also asked that Council add an executive session at the end of the meeting.
Mr. Bauman provided the Council with preliminary Shoreline voting results on Initiative 722 (I-722) showing 49 percent in favor of the initiative and 51 percent opposing it. He noted that a lawsuit challenging I-722 has been filed, which will be discussed with Council at a later date.
Continuing, Mr. Bauman reported on issues related to Twin Ponds Park and attempts to mediate a dispute between the Cass family and park volunteer John Dixon.
Councilmember Ransom arrived at 6:14 p.m.
Mayor Jepsen stated that Evergreen School has worked to restore the stream and marsh north of the school. Now, Evergreen is hoping to work with Parkwood Elementary School to do an environmental event in Twin Ponds Park on Earth Day.
Continuing, Mr. Bauman responded to comments made last week regarding trash at the Aegis Assisted Living project site, noting a code enforcement action there.
4. WORKSHOP
(a) Public Works Department
(b) Capital Improvement Program
Bill Conner, Public Works Department, reviewed projects planned for 2001 to meet City Council goals three and six. He explained Public Works involvement in the North City Sub-Area Plan and other annual programs, including the overlay program, pedestrian improvements and surface water small projects. He noted that next year, in addition to the stream inventory assessment conducted in conjunction with Council goal six, the department will conduct an infrastructure needs assessment that will be used to develop the Hansen database of the City’s infrastructure. He continued that next year will be the third year of the three-year Transition Plan, which includes hiring seven more Road Maintenance workers and the transfer of certain services from King County to City-managed private contracts. Additionally, the department will continue the facilities support program and implement park improvements at Shoreview Park, Paramount Park, the Richmond Highlands Recreation Center and the Shoreline Pool.
Mr. Conner reviewed Public Works’ 2001 analysis of change, which includes providing localized control of tree maintenance, roadside spraying, vegetation control and sign maintenance. 2001 will also mark the beginning of large scale construction work and the hiring of a new construction inspector. Public Works will also assume responsibility for coordination of utilities franchises through the hiring of a Utilities Coordinator.
Turning to the 2001–2006 Capital Improvement Program (CIP), Mr. Conner provided the caveat that passage of I-722 may impact the City’s ability to move forward on some of these projects as scheduled. He explained that the six-year CIP draws down the balance of $18 million carried forward in 2000 until only $57,000 is anticipated to remain in 2006. He noted the figures do not include the $6 million in federal funds announced by Congressman Jay Inslee a few weeks ago. It assumes $7.7 million in total transfers from the General Fund over this six-year period.
Mr. Conner reviewed Public Works’ 2000 activities and then described the park projects on the 2001 calendar: 1) Paramount School Park; 2) Shoreview Park; 3) the Rec Center; 4) construction at the swimming pool; and 5) erosion control at Richmond Beach Saltwater Park. He pointed out that of the City’s 26 parks, only five meet minimum standards for the particular type of park. It is estimated that it will cost over $10 million to bring all the parks up to a minimum standard. He reminded Council that the approach taken was to complete master plans and construction on selected parks and then come back in 2002 with additional master plans.
Continuing, Mr. Conner described the other capital improvement projects on the 2001 schedule. He concluded by highlighting projects of future years.
Mayor Jepsen supported development of a policy on the placement of signs and mentioned the Lake Forest Park approach of putting the city logo on street signs. He concluded with the hope that it does not take until 2010 to finish the Aurora Corridor Project.
Councilmember Lee was concerned about who will have responsibility for the complicated issues involved in utility franchises. Mr. Conner said the job responsibilities of the new Utility Coordinator will evolve over time. The individual will be hired initially to handle franchises at the permitting level. Contract negotiations and policy discussions will continue to occur at the City Manager’s Office level, with the Utility Coordinator providing technical support.
Councilmember Lee emphasized the importance of predicting project schedules accurately so that public and Council expectations are met.
Councilmember Gustafson asked about the condition of the Shoreline Pool and whether the current repairs will prevent future breakdowns. Mr. Conner responded that "running a pool is like owning a boat." He said the repairs of the pool to date have given staff an understanding of how the pool works. Many parts have been replaced, and he is confident it is in much better shape now than two years ago.
Continuing, Councilmember Gustafson asked for an update on the emergency operations plan and proposed emergency exercise. He also expressed an ongoing concern about unfunded mandates, such as the Endangered Species Act (ESA), which necessitates the hiring of an Environmental Educator.
Responding to Councilmember Gustafson, Mr. Conner explained that the 315 percent increase in professional services reflects the one-time cost of the infrastructure assessment contract, and the transfer of certain activities from King County (previously accounted for under intergovernmental services) to private contracts (professional services).
Councilmember Gustafson asked about resurfacing the tennis courts at Shoreview Park. Mr. Bauman responded that this is being taken care of outside the CIP. Councilmember Gustafson asked that a plan be developed to address the tennis courts at Kellogg and Meridian Park as well, so that all are kept in good repair.
Councilmember Gustafson noted $5,000 was raised by the community to help with Shoreview Park construction and should be collected once construction begins.
Responding to Councilmember Gustafson, Mr. Conner explained the concept of partnering with Shoreline Community College to build sports fields.
Councilmember Gustafson emphasized the importance of linking the Interurban Trail to the Burke-Gilman Trail at both ends. Mr. Conner assured him the plan is for a circular loop.
Councilmember Ransom expressed concern about the magnitude of the projects and wanted to be sure the City could stay on target. He questioned whether I-722 will allow the funding to come in as projected.
Mr. Conner said that if the City is severely impacted by I-722 and has to postpone construction activity to a later date, the cost of projects will certainly increase. He assured Council that staff is now on board to aggressively pursue the projects on the 2001 list. He mentioned the hiring of Ann Tonella-Howe as a very experienced project manager for the Aurora Corridor. He concluded that funding for the projects is the least of the City’s worries in 2001.
Councilmember Ransom commented that when the City assumed the Shoreline Pool, King County provided four years of supplemental funding and warranted the pool and boilers. Mr. Conner concurred that this money is covering most of the repairs to the pool, but he noted that 2000 is the last year for this funding.
Councilmember Grossman observed that there are more projects in the CIP than staff and that many are substantial, even for experienced staff members. He was concerned about burning out a young staff and wished to ensure contingency contracting ability for professional help. Mr. Conner pointed out that the City uses excellent design consultants and that the contracts would need to be managed even with professional help. He said there is now an engineering staff work plan that describes each staff member’s work schedule for 2001.
Responding to Councilmember Grossman, Mr. Conner said that each project contains a contingency of 10 percent or more, with $200,000 in a general contingency fund.
Councilmember Grossman asked about conversations with the School District about capital improvement issues, specifically parks. Mr. Bauman noted that the joint use agreement was recently adopted. The first joint project is Paramount School Park. The City is also considering the Athletic Center project. However, the thought is to focus on the projects on the current list before adding new ones.
Deputy Mayor Hansen commented that even after three years, the City will have $7 million on hand for CIP projects, so the City is reasonably funded for the next three or four years. Mr. Conner noted that the figures he provided do not include $6 million anticipated from the federal government and a possible state grant for the Aurora Corridor. He noted the City has done a wonderful job of getting grants for projects.
Deputy Mayor Hansen commented on the number of small projects done in the last few years. He was very confident about the department’s ability to accomplish the CIP.
In conclusion, he asked about an additional $500,000 in revenue for the Surface Water Management Fund in 2001. Mr. Conner said he would check on this.
At 7:45 p.m., Councilmember Montgomery arrived.
RECESS
At 7:45 p.m., Mayor Jepsen recessed the meeting. At 7:52 p.m., the meeting reconvened.
5. PUBLIC COMMENT
(a) Charlotte Haines, North City Neighborhood Association, personally thanked the City for its work in improving curb ramps and bus pads. On behalf of the neighborhood association, she supported the redevelopment of North City. She said people’s fears about traffic congestion have calmed and residents are ready to accept increased density on 15th Avenue NE.
(b) Gretchen Atkinson, North City Business Association, also thanked the City for its plans to improve the infrastructure in North City. She said businesses are looking forward to working with the new Economic Development Coordinator to bring new businesses to North City. On another topic, she reminded Council about the Tree Lighting Ceremony to be held in North City on December 2.
(c) Patty Crawford, 2326 N 155th Street, asked about public input in the City Manager hiring process and suggested a local person would know about local problems, such as the Aegis development. She mentioned plans to remove trees at this site. Ms. Crawford alluded to funding in the Planning and Development Services budget for watershed management and questioned whether citizens are getting their money’s worth. She also asked about the vegetation management plan and suggested alternative methods.
(d) Timothy Crawford, 2326 N 155th Street, suggested that citizens be allowed to address department heads directly with budget questions. He commented on money in the Capital Improvement budget for stream rehabilitation, asking if money allocated in 2000 was spent. He suggested cooperation with other entities in dealing with the ESA. He asked the City to take care of natural resources.
(e) Sharon Cass, 2320 N 149th Street, asked when the "deadly nightshade" growing behind her property in Twin Ponds Park will be removed. She provided an example of when park volunteer John Dixon appeared to be giving directions on the City’s behalf to a North Rehabilitation Facility crew working at the park. She reiterated that drainage is a big problem at Twin Ponds.
(f) Bill Ingraham, 19924 Aurora Avenue N, informed the Council of three problems at Twin Ponds Park: 1) presence of poisonous nightshade and futile attempts to kill it by cutting it down; 2) filling the wetlands, which is illegal; and 3) presence of dangerous nettles.
(g) Kelly Swenson, 2308 N 149th Street, said she represented the majority of the Parkwood Neighborhood Association in supporting the work of John Dixon at Twin Ponds Park. She explained his activities and said he has done a lot to clean up the park.
(h) Carol Ingraham, 18568 Densmore Avenue N, emphasized that cutting nightshade does not get rid of it. She said the nightshade growing around the soccer fields at Twin Ponds Park is a real problem, and the City could be fined if it is not addressed.
Mr. Conner explained the stream rehabilitation/habitat enhancement program is hoped to be an annual program with public outreach. In 2001, this money is devoted to the stream assessment contract, which is funded from various sources.
Mayor Jepsen said the City Manager search process will be discussed at the Council of Neighborhoods.
Responding to Mayor Jepsen, Mr. Bauman said staff will return at a later date with information about the City’s noxious weed program and specifically how it is applied at Twin Ponds Park.
6. APPROVAL OF THE AGENDA
Councilmember Montgomery moved to approve the agenda, adding an executive session after Item 10. Councilmember Lee seconded the motion, which carried unanimously and the agenda was approved as amended.
7. CONSENT CALENDAR
Councilmember Montgomery moved that Council approve the consent calendar. Councilmember Lee seconded the motion, which carried 7-0, and the following items were approved:
Minutes of Regular Meeting of October 9, 2000
Minutes of Dinner Meeting of October 23, 2000
Minutes of Regular Meeting of October 23, 2000
Approval of expenses and payroll as of October 18, 2000 in the amount of $ 841,933.92
(a) Public hearing to consider citizens’ comments regarding the 2001 revenue sources, including the property tax levy
Debra Tarry, Finance Director, introduced her presentation by noting that it includes additional information from that provided in the Council packet and a change in the staff recommendation. She said the 2001 total resources figure is $80.5 million. Of this, 45 percent is beginning balances and interfund transfers. 48 percent of all the resources in the 2001 budget are designated for capital purposes. Only 33 percent ($26.8 million) is dedicated to the General Fund. Property taxes support 23 percent of this General Fund budget.
Turning to the key resource variables for the 2001 budget, Ms. Tarry said the King County Assessor is proceeding with implementation of I-722 as approved by the voters. Legal action is anticipated, but an injunction would be necessary to change application of I-722 to the 2001 property tax levy process. She explained the impacts of I-722 from a scenario of least impact to that of greatest impact. If I-722 is found to be fully constitutional, the City would experience an annual revenue loss of $2.5 million, with a one-time loss of $2.42 million. She noted that the proposed 2001 budget provided for a limited property tax increase of two percent, but it did not provide for losses from the repeal of fee and tax increases, the rollback to 1999 Assessed Valuations (AV) for property tax purposes or the repayment of fees and taxes collected in 2000 as a result of increases taken in 1999. She outlined the dollars lost as a result of these provisions—a total of $2.42 million. She also outlined annual losses if the Council does not take action to reinstate utility taxes and franchises fees, as well as the fees adopted in 1999 for development services and recreation.
Continuing, Ms. Tarry outlined the Council’s potential responses to I-722. Council could act on the property tax levy ordinance on tonight’s agenda; however, staff does not recommend this because there may be some clarification on certain items, such as the rollback provision in I-722, in the next two weeks. Council has until December 7 to adopt its 2001 property tax levy. Additionally, Council may wish to establish reserve funds for potential repayment of taxes and fees. She noted that utility tax and recreation and development fee increases will become void on December 7 because of I-722. However, Council could re-enact the utility and fees by ordinance, or call for a special election. She pointed out that utility taxes do not become effective until 60 days after passage. If Council adopted utility taxes on November 27, 2000, the estimated revenue loss will be between $334,000 and $404,000. An election in February would result in a revenue loss of approximately $900,000.
Turning to how to create the reserve funds mentioned previously, she said staff believes, based on the number of unknowns related to I-722, that it may be premature to make operational reductions at this time. She noted that over the last few years, a large portion of operational dollars have been set aside for capital. In 2001, this amount is $3.3 million. Staff recommends considering a delay in certain capital projects until the final outcome of I-722 is determined. If no future replacement revenues are forthcoming, operational expenditure reductions will be required in the coming years. These would be approximately equal to those discussed in 1999 in consideration of Initiative 695 discussions (i.e., roughly five percent from the Public Safety budget and 20 percent from the budgets of all other departments). She concluded that the recommended reserve is approximately $3 million.
Turning to the property tax rate, Ms. Tarry said the City’s current tax rate is $1.60/$1,000 AV. This amounts to 10.4 percent of the property owner's tax bill. The big question in terms of property tax calculations this year is where to start. Staff used the previous year's levy to prepare the proposed budget. Historically, the City's "levy limit" (the highest amount of revenue that the City can receive in property taxes) has been based on 1996's levy limit. It now appears the percentage increase must be based on the 1999 levy and AV. She explained a table depicting the revenue generated by various property tax rates. She said the amount the City can levy with I-722 provisions in place would actually be $84,696 less than last year. This represents a reduction in revenue to the 2001 proposed budget of $333,748. She showed the impact of various levy rates on the tax bill of an owner of a $180,000 home.
Ms. Tarry concluded that Council would have to define a substantial need to enable the City to levy an amount in excess of the implicit price deflator (IPD) (the figure used since adoption of Referendum 47 to determine the levy limit). In other words, Council would have to identify specific needs justifying a rate higher than the IPD. In Shoreline’s case, such a finding might be based on the desire for economic development, the fact that grants have yet to be awarded for capital projects totaling $62.5 and the need to backfill revenues lost after passage of I-695.
Ms. Tarry pointed out that comparing an unincorporated area of King County to Shoreline, Shoreline residents appear in all scenarios to pay a lower tax rate than in the unincorporated areas. She emphasized that even with a lower tax rate, the level of services provided has been much better than prior to incorporation.
In conclusion, Ms. Tarry outlined the staff recommendations:
Ms. Tarry alluded to possible 2001 CIP projects that might be put on hold in order to reserve the necessary $3 million. She said the criteria used to develop the list were that the projects not be largely funded by grants or by Surface Water Management funds. The plan would be to proceed through the design phase on these projects so they would be ready for construction, depending on the final outcome of I-722.
Mayor Jepsen opened the public hearing. Seeing no one wishing to address the Council on this topic, Deputy Mayor Hansen moved to close the public hearing. Councilmember Gustafson seconded the motion, which carried unanimously and the public hearing was closed.
Mayor Jepsen commented that, because of the complexity of this issue and the lack of clarity, he supported a delay.
Councilmember Lee commented that the estimated amounts for payback for taxes and fees does not take into consideration the administrative costs involved in doing refunds. Mayor Jepsen asserted his belief that this portion of I-722 will not survive a court challenge.
Responding to Councilmember Gustafson’s question about the feasibility and timing of an injunction, Bob Noe, Acting City Attorney, commented that litigation will proceed at approximately the same speed as that related to I-695. Mr. Bauman added that an injunction may be acted upon within the next two weeks.
Responding to Councilmember Gustafson, Ms. Tarry commented that Council could levy a higher property tax rate than that allowed by I-722, but that it certainly would not be prudent to spend the related revenues prior to decisions on I-722.
Councilmember Gustafson also supported delaying the decision on the property tax.
Councilmember Grossman confirmed that deferring capital projects would not result in staff layoffs.
Deputy Mayor Hansen did not believe there would be a gap in revenues if the utility tax is reaffirmed and I-722 is found unconstitutional. He wished to investigate alternatives, such as submitting the utility tax to a vote. He also asked where resales fit in the AV computations.
Mr. Noe responded that I-722 does not address resales or actual values. Ms. Tarry said the assessor is saying that new construction built in 2000 is being rolled back to what it would have been valued in 1999.
Councilmember Ransom felt that Council will want to reaffirm the utility tax and user fees as quickly as possible to prevent any possible gaps in the revenue stream. He asserted that a finding of substantial need could be made to validate a higher property tax. He suggested that the City pursue the maximum legally-allowed rate, whether it is 102 or 106 percent.
Councilmember Lee suggested that the City start with the level set out in I-722, given passage of the initiative.
Councilmember Ransom asked what would happen if the City levied a higher rate. Ms. Tarry said the assessor will take whatever action is required to obey the law. She reiterated that if Council wishes to levy a higher rate, it would not be prudent to budget those funds until a final decision is made on I-722.
Councilmember Ransom expressed his concern that if the City levies a lower rate (e.g., 102 percent) in 2001, the decision will affect the City in future years. Therefore, he supported a higher rate that could be rolled back later if necessary. He acknowledged that the amount of the difference is not large in 2001, but he said when compounding is considered the amount could be significant in the future, particularly for the projects in the CIP. Noting that the community wants these capital projects, he said Council should take a stand on this.
Noting that the two-percent limit that I-722 imposes falls short of the IPD, Mayor Jepsen said the initiative prevents the City from even keeping up with inflation. He expressed interest in levying an increase equal to the IPD at least, but he asserted the need for greater clarity about when this can be done. He summarized that Council will consider these issues again on November 27.
(a) Motion to adopt the proposed 2001 Statement of Legislative Priorities
Joyce Nichols, Community and Government Relations Manager, provided Council with an update of the situation in the 2001 legislature. She said the Democrats will probably regain the House by one or two seats and will probably retain control of the Senate by one seat. This will make it very difficult to govern. There will be major issues to deal with, including budget limitations imposed by various initiatives. In the 32nd District, the legislators are all incumbents who have been very helpful to Shoreline in accomplishing Council priorities.
Looking at new items for 2001, Ms. Nichols said the focus will be getting backfill funding for I-695 on a permanent basis and getting sales tax equalization funded, perhaps from sales taxes. She said staff will continue to seek funding for the Aurora Corridor and other capital projects. She mentioned other priorities, including opposing unfunded mandates, protecting local taxing authority, funding for ESA implementation and opposing buildable lands. She concluded that the goal will be to stay focused on top priorities in this challenging session.
Councilmember Gustafson asked for clarification of "Fiscal Notes." Ms. Nichols explained that proposed legislation carries with it an estimate of the proposed cost of the mandate. She said the office that makes this calculation does not do a very good job of figuring out impacts to local governments. This policy calls for the fiscal note to zero in more on impacts to cities.
Councilmember Gustafson also asked for clarification regarding changes to the street vacation statute. Ms. Nichols said this will become important if the City does Aurora Avenue redevelopment projects. Currently, cities cannot recover the full value of the street being vacated. The proposal is to increase the recoverable value to the full amount.
Councilmember Montgomery supported the priorities and commented on the importance of lobbying for Shoreline’s interests. She suggested attendance at the Association of Washington Cities Legislature Conference in February. Ms. Nichols noted that Shoreline has a representative on all the crucial monetary committees, which will be a real benefit.
Councilmember Ransom referred to the local taxing authority policy, pointing out that conditions were very different when the legislature allowed cities to tax social card games at 20 percent. At that time, the card rooms had as few as five tables and needed only one person to supervise the games. The Gambling Commission did not require security cameras. Now, card rooms must have 50 security cameras and an extensive system that requires a minimum of 85 employees. Councilmember Ransom said history has shown that a 20-percent tax rate is too high, causing casinos to fail—it costs a casino 80 percent of its revenues to operate under the Gambling Commission rules. He noted that a rate reduction from 20 percent to 10 percent has twice passed both houses and been vetoed by the governor. He said most cities and counties have gone to 10 percent. He felt it was "ridiculous" for Shoreline not to follow this trend.
Mayor Jepsen observed that no other Councilmembers support a change to this language. Councilmember Ransom responded that he did not expect a change but wished to explain why the tax was 20 percent in the past when the requirements were totally different.
Councilmember Grossman asked to be kept advised on what Councilmembers can do to assist Ms. Nichols, noting the extreme budget difficulties that will be presented by implementation of the various initiatives.
Councilmember Lee asked about requiring a determination of the constitutionality of initiatives before they go on the ballot. Mayor Jepsen said Senator Fairley is working on this.
Councilmember Gustafson concluded that Council must keep in contact with federal legislators as well as State and local ones.
Mayor Jepsen asked that the priorities be shared immediately with King County.
Councilmember Lee moved to adopt the proposed 2001 Statement of Legislative Priorities. Councilmember Gustafson seconded the motion, which carried unanimously.
10. CONTINUED PUBLIC COMMENT
(a) Patty Crawford, 2326 N. 155th Street, asked Council to think about people on fixed incomes when making budget decisions. She felt departments should have to tighten up just as citizens do. She said travel expenses in all departments have gone up this year. She reiterated her concern about tree removal at the Aegis site.
11. EXECUTIVE SESSION
At 9:25 p.m., Mayor Jepsen announced that Council will recess into executive session for 15 minutes to discuss one item concerning property. At 9:54 p.m., the executive session concluded, and the meeting reconvened.
11. ADJOURNMENT
At 9:55 p.m., Mayor Jepsen declared the meeting adjourned.
___________________________
Sharon Mattioli, CMC
City Clerk