CITY OF SHORELINE

SHORELINE CITY COUNCIL

SUMMARY MINUTES OF SPECIAL MEETING

Monday, September 19, 2005                                                      Shoreline Conference Center

6:30 p.m.                                                                                                      Mt. Rainier Room

PRESENT:       Mayor Hansen, Councilmembers Chang, Fimia, Grace, Gustafson, and Ransom

ABSENT:        Deputy Mayor Jepsen

1. CALL TO ORDER

The meeting was called to order at 6:32 p.m. by Mayor Hansen, who presided.

2.         FLAG SALUTE/ROLL CALL

Mayor Hansen led the flag salute.  Upon roll call by the City Clerk, all Councilmembers were present with the exception of Councilmember Chang Deputy Mayor Jepsen.who arrived shortly thereafter. Councilmember Chang, prior to the meeting called and stated he would be arriving late.

Upon motion by Councilmember Gustafson, seconded by Councilmember Grace and carried 5-0, Deputy Mayor Jepsen was excused.

3.         CITY MANAGER’S REPORT

Steve Burkett, City Manager, commented that tonight’s agenda includes a revised Ordinance 400, which reduces the gambling tax on social card rooms from 11% to 10%.  He reported on the success of the Employee Appreciation Picnic, noting that Bob Crozier was named Employee of the Year, and the 10^th Avenue Drainage Team was named Team of the Year.  He reported on the ribbon cutting ceremony for the North section of the Interurban Trail.  He concluded his report by commenting on the settlement of the Aegis lawsuit against the City.  The Superior Court judge found that the arguments were unsupported and upheld a motion for summary judgment in favor of the City.

4. COUNCIL REPORTS

Councilmember Gustafson apologized for missing the Council meeting last week.  He congratulated Mr. Burkett for receiving the Award of Excellence by the Washington City Management Association (WCMA).

Councilmember Chang arrived at 6:38 pm.

Councilmember Fimia apologized for not being able to attend the Employee Appreciation Picnic last week.

None.

5.         PUBLIC COMMENT

            (a)        Virginia PaulsenVicki Westberg, Shoreline, said questioned the validity of the summary report generated from the community priorities exercise.  She stated that the demographic characteristics are not representative of Shoreline residents because of the lack of attendance at the March and May sessions.  The purpose of the May long-range planning session focused on what capital budget resources were available to fund various capital projects, but it did not include any data on a new City Hall building.  The financial options were limited to tax levies, bonds, taxes, and LIDs with no mention or discussion of the $10.6 million for City Hall.  She concluded that full information is required to make rational decisions, but citizens were not provided with that.  She felt this process was a waste of the City’s time, energy, and moneythere was a public meeting held at the Dimitiri’s Restaurant by CNH Investment Group, L.L.C. who proposed 18 townhomes or condominiums with 36 parking spaces on three lots at 1234, 1238, and 1242 NE 148^th Street.  She stated the developers were unprofessional and unresponsive to the residents who attended the meeting and they are concerned about the quantity and quality of the project.

(b) Dale Wright, Shoreline, stated he has heard the City is not prudent with its money.  He felt the City should continue to work toward quality projects.  Aurora is an example of quality, he said, as he described the features of the Aurora project.  He named the opponents of the Aurora project and concluded that changing the project plan doesn’t achieve the City’s goals.

(c) Marie Poster, Shoreline, inferred that the City Council allows trees to be cut down to allow multi-unit complexes to be built in neighborhoods. Currently, she said, there are three homes that will be torn down at NE 148^th Avenue and NE 12^th Street to make way for an 18-unit, 36 parking- stall, 50 foot high complex to be built.  These units are going to be sold for $340,000K each.  There will be traffic increases and property tax increases, and.  T there is already overcrowding in the City.  In conclusion, she asked the Council to ensure neighborhood planning meetings are staffed by someone who can answer the inquiries from the residents.

(d) William Hubbell, Shoreline, appreciated the concerns of the City Council and attitudes to save the casinos in Shoreline. He said casinos are the largest private employer and taxpayer in the City and they would appreciate a vote to keep the 10% gambling tax on card rooms in place.

(e) Ken Noreean, Shoreline, stated there are many individual concerns from the residents and the City Council has done a great job to take care of the City as a whole.  He outlined the 4-way test of the Rotary: Is it the truth?  Is it fair to all concerned?  Will it build good will and better friendship among all of us?  Will it be beneficial to all concerned?  He urged the Council to keep these in mind and keep doing a great job for the residents of Shoreline.

(f) Janet Way, Shoreline, commented in sympathy and in solidarity for students that have spoken.  She said she would like to speak for the workers, business owners, casinos, and hard-working residents of Shoreline.  She appreciated the Council vote to extend the 10% gambling tax on card rooms for the casinos.

(b) Councilmember Fimia moved to approve the agenda,. seconded by Councilmember Ransom seconded the motion, which cand carried 6-0, and the agenda was approved.

6.         ACTION ITEMS: OTHER ORDINANCES, RESOLUTIONS, AND MOTIONSWORKSHOP ITEMS

(a) 2005 2^nd Quarter Financial ReportOrdinance No. 400, reducing the City gambling tax

on social card rooms to 10% of gross receipts after

                        September 30, 2005; and amending Shoreline Municipal

                        Code 3.30.020.

Councilmember Grace moved to adopt Ordinance 400.  C, reducing the City gambling tax on social card rooms to 10% of gross receipts after September 30, 2005; and amending Shoreline Municipal Code 3.30.020, seconded by Councilmember Ransom seconded the motion.

Councilmember Gustafson said he was not here for the meeting but is in favor of this oOrdinance.  He suggested an annual profitability review of the casinos.

Councilmember Graceustafson moved to direct the City staff to review the profitability of the casinos annually utilizing the casinos audited financial statements and report the results to the City Council no later than September 30, 2006.  The Mmotion died for a lack of a second.

Mayor Hansen felt that a 1% reduction, or $240,000K, in the gambling tax on social card rooms would not affect the City or the casinos.  He stated, in his opinion, some of the Council may have been influenced.  He asked whether any of the Council wanted to recuse themselves from voting on this Ordinance.

No Councilmember recused themselves.

Mayor Hansen asked whether or not any councilmember received any compensation, expense reimbursement, or political contribution from gambling industry elements in the last two years and if so, how much??  He stated he has never received any such contribution, and the public has a right to .know.

Councilmember Chang responded that he has received donations from one contributor on two occasions, in October 2004 and June 2005, donations from one contributor on two occasions.

Councilmember Gustafson responded he has not received any contributions in the past two years.

Councilmember Grace said he had not received any contributions from the gambling establishment while a Council member.

Councilmember Ransom responded that he received campaign contributions two years ago, and it is a part of public record that can be viewed at the PDC (Washington State Public Disclosure Commission (PDC).).

Councilmember Fimia statedfelt the question was inappropriate.

Mayor Hansen responded and said this is a question that the public has a right to know.

Councilmember FimiaShe said she had received campaign contributions two years ago.  She continued and stated this question should be asked before the Council conducts any vote on any Shoreline business because that is the precedent that is being set with this item.

Mayor Hansen stated if she believed that is the precedent he would respond at any question she asked him in the future.  He explained the reason he asked the question is that it was brought to his attention that there was an $8,000K contribution from one of the gambling interests to AIC (the Aurora Improvement Council (AIC)).  The AIC funneled most of the $8K, not all of itit, to local campaign contributionss. He felt $8,000K is awas a lot of money for a business industry that claiming thatclaims they are having financial difficulties they are in financial straits.  He elaborated on this is why he will be voting against this oOrdinance.

Councilmember Chang conveyed that the Mayor is changing the rules and grounds for the Council.  He argued that if a councilmember is voting in favor of this issue because he has received campaign contributions, there is another issue at stake.  Councilmember Chang reiterated he has not received any contributions from the AIC.  He concluded that each councilmember or candidate is responsible for their own actions and accepting campaign contributions is not illegal.

Mayor Hansen stated he did not suggest any illegality occurring.  He stated he wanted to know what may have influenced the Council vote.

Councilmember Ransom thought the subject was inappropriate because AIC consists of up to 80 businesses.  Some businesses contribute more.  He asserted that the Mayor is trying to slant this issue to one business or one industry.  This is unfair because the AIC is not here to respond to this and no one here to respond to yourto the Mayor’s accusatory statements against an industry.

Councilmember Fimia communicatedented that she did not understand how the Mayor’s vote relates to this issue and how it relates to whether or not the Council has or has not received any contributions from the AIC.  She noted that Harley O’Neil contributes thousands of dollars to campaigns for the opponents to this race.  He owns Echo Lake Park, the City Hall Building, and Gateway Plaza.

Councilmember Chang expressed that the Mayor is setting the wrong precedent.  He felt the Mayor was making a clear inference and somewhat of an accusation before the Council vote.  He concluded that asking this type of a question before the Council takes its vote is very unfair.

Councilmember Gustafson notedcommunicated that candidates receive donations from many different sources and when they are elected they must vote based on their conscience and what they believe in, regardless of where a candidate’s donations come from.  Every candidate makes a decision on where they receive contributions and from whom.  Councilmembers must divorce themselves from the contributions and sometimes make decisions that will oppose the person or group the contribution came from.  He understood the Mayor’s concern, but he also preferred thats the Council did not address this issue in the meeting.  The Council should make decisions based on study and community input.  He urged the Council to drop the issue and vote.

A vote was taken on the motion to adopt Ordinance 400, reducing the City gambling tax on social card rooms to 10% of gross receipts after September 30, 2005; and amending Shoreline Municipal Code 3.30.020which carried.  Motion carried 5-1, with Mayor Hansen dissentinged.

Councilmember Gustafson noted he will request a review of the profitability of the casinos next year.

Councilmember Fimia responded she was not opposed to a casino profitability review being conducted next year as long as it was not costly to the City or the casinos. She asserted to the Mayor that if the Mayorhe accuses the Council of anything in the future she will move to have him removed from the Mayor positionas Chair.

Mayor Hansen stated he did not accuse any Councilmember of anything.

Councilmember Ransom interjected and said the Mayor did imply a councilmember was voting based on contributions.

Mayor Hansen communicated that he changed his mind because there was an $8K contribution by one of the entities to the AIC pact.

Councilmember Fimia responded that none of the Council received any of the $8K.

Mayor Hansen stated he did not say anyone on the Council did receive any of the $8K.

Councilmember Fimia restated if the Mayor infers that any councilmember did anything like that she will move to have him removed from the position.

Mayor Hansen stated once again he did not make any accusations or inferences of wrongdoing by the Council.

Debbie Tarry, Finance Director, provided the following statistics for the City’s main operating funds: 

·General Fund revenues are 3.2% ahead of projections, about $384,000.  General Fund expenditures are at about 3% below projections, about $359,000.  General Fund revenue projections have been revised to $838,000 for the year.  Thus, the 2005 budgeted revenues have been added into the $838,000.

·Street Fund revenues are near projections at 0.82% above while expenditures are about 14.6%.

·Surface Water revenues are slightly ahead of projections at $23,000 or 1.7% while expenditures are below at $33,000.

Ms. Tarry stated sales tax revenue projections were increased based on a growing local construction and retail economy.  Revenue projections have been increased in utility and franchise fees.  Natural gas revenue projections have increased, directly related to rate increases that were not approved when the budget adoption took place last fall.  Therefore, projections were raised by $174,000 for this year.  For electricity, there was speculation that Seattle City Light would lower their rates in 2005, so the City anticipated the rates would go down.  However, that has not been the case and Seattle City Light is conducting a rate analysis to be completed in 2006.  Thus, electricity revenue projections were increased by $150,000.  Water utility revenues went up because the City received a payment of approximately $500,000 from Seattle Public Utilities based on an error in the methodology they were using to assess their contract to us.  The funds were distributed into the Capital Fund and the General Fund and projections were increased by $111,000.  Permit activity accounted for increased revenues in the General Fund and projections were increased by $118,000 based on an increased level of permits issued (up by 8%).  Additionally, the average cost per permit issued this year ($2,000 per permit) is higher than in 2004 ($1,600 per permit).    Ms. Tarry stated the investment interest on the General Fund projection has been increased by $98,000 based on rising interest rates, diversification of the City’s portfolio, and lengthening the maturity duration of key investments.  Gambling tax collections of $803,246 are just slightly above the projected revenue by $7,271 or 0.091%.  However, she said, in comparison to 2004, gambling revenues are down by $89,001 and card room revenues are down by $81,350.  Nonetheless, despite the decline in revenue from the previous year, gambling revenue is still tracking to meet budget targets. 

Ms. Tarry stated that expenditures are about 3.2% below the budget based on a late police contract invoice from King County which hasn’t been paid yet.  General Capital Fund and Roads Capital Fund revenues are above projections and expenditures are below expectations, partly due to a 25% increase in real estate excise tax funds in 2004.  Expenditures are not occurring at the same rate as originally projected so the expenditure level is below projections.  Roads capital revenues are ahead of projections and expenditures are below but we expect significantly higher expenditures in the 4^th Quarter with the North City Project and Aurora Corridor Project contract payments occurring during that time period.  The Surface Water Capital Fund revenue is close to projections and expenditures are slightly elevated because the projects are ahead of schedule and payments are occurring slightly sooner than anticipated.

Ms. Tarry summarized that operating fund revenues are generally ahead of projections and expenditures are tracking close to projections.  On the capital side the City is able to identify why there are some differences and will monitor them during the third and fourth quarters, especially the Roads Capital Fund, because there will be some significant activity during that time period.

Councilmember Fimia asked whether or not the recent franchise fee lawsuit against Seattle City Light, the City of Shoreline, and other cities is retroactive to fees collected this year.

Ian Sievers, City Attorney, responded that the statute of limitations for claims to seek reimbursement is three years.  However, the City’s first franchise with Seattle City Light was in 1999.  So, he concluded, the worst case would be that the City would have to go back to 1999.  

Councilmember Fimia asked Mr. Burkett if there has been any analysis of what the potential reimbursement would be and how the City would pay for it.

Mr. Burkett said staff has concluded that the City would likely end up paying a significant amount if it loses the case.  He assured the Council that the City plans to vigorously defend itself against the suit.  Mr. Burkett concluded that the Seattle City Light situation is not unique to others that pay a franchise fee to operate within the City.   

Councilmember Fimia commented that she requested a quarterly breakdown on how the money was being spent with each major capital project.  She also asked whether or not she was reading page 6U of the 2005 2^nd Quarter Financial Report correctly, as it says the City has nearly $50 million dollars in investments.

Ms. Tarry responded that the invested amount includes all operating and capital funds.

Mr. Burkett stated that any funds the City does not immediately need are invested.  The total also represents grants the City has received, as well as monies set aside for capital projects or operations. 

Responding to Councilmember Fimia, Ms. Tarry confirmed that the City receives a total of $4.5 to $5 million dollars per year in utility tax and franchise fee revenue.   This revenue source has experienced some growth over the past few years.

Councilmember Paul Grace asked if there is progress on the City’s effort to obtain tax information from the casinos.

Ms. Tarry stated the department has tried to obtain all the financial statements, but the Hideaway and the Golden Nugget are the only two businesses that have not responded as of yet.  Staff intends to have the preliminary information to the Council by the September 12^th meeting.

Councilmember Ransom asked for information on the State Investment Pool.  Ms. Tarry explained that the State Investment Pool is the State’s method for government agencies to invest monies collectively.

Councilmember Fimia inquired how much money would be spent on Moss Adams and staff time to do the analysis.

Ms. Tarry said the contract with Moss Adams is limited to $10,000; to-date expenditures total $3,500.  She was confident the City would stay below the budgeted amount. 

Councilmember Ransom asked whether or not the lawsuit for electric franchise fees applied to those fees received for water and sewer franchise fees as well.

Mr. Sievers responded that the statute which covers this issue limits the lawsuit to electrical, gas, and telecommunication franchise fees.

Deputy Mayor Jepsen stated there are a number of other cities who will be effected by this lawsuit, and the City did a significant amount of negotiations on the behalf of several cities to try and reach an agreement.  At present, the City anticipates a surplus of $800,000 in its budget.  He said ever since he became a Councilmember the City has always maintained a surplus of close to $1 million a year.  He said the surplus is due to the efforts of the Finance department and the Council’s conservative budget approach.   He said the amount of construction going on in North City and Aurora and the economic development and permit activity is very good news.

Councilmember Chang expressed gratitude for Ms. Tarry and the staff, noting that they are doing an excellent job.  He stated the third and fourth quarter reports will be interesting because of all the construction and retail activity going on.  He said he is anticipating a good outcome. 

Mr. Burkett emphasized the need to view construction sales tax revenues as one-time, non-recurring revenues.   He added that the return on the State Investment Pool is 2%, while the return on other City-invested funds is almost 3%.  This is about $400,000 more than if all of the funds were invested in the State Pool.

Responding to Councilmember Fimia, Ms. Tarry explained that while there have only been 11 more real estate sales transactions over the previous year, the value of those transactions is significantly higher than those in 2004. 

Councilmember Ransom noted that $5 million of the projected $32 million in revenue is carried over from last year.  There is $25 to $27 million is new revenue, and the remainder is prior savings.

Ms. Tarry stated that this represents the amount of reserves that the City plans to use in 2005 for one-time capital expenditures.

(b)        Update on 2004 Crime Statistics

Mr. Burkett noted that the Council discussed the 2004 Service Efforts and Accomplishments Report (SEA) at the June 27 meeting.  At that time, the Council requested City staff to analyze the data from 2004 against the data from the first half of 2005 and compare Shoreline’s statistics to other local cities. 

Police Chief Tony Burtt reported that crime categories showing increases included burglary, arson, auto theft, robbery, and rape.  The data used to compare Shoreline with other jurisdictions in the area, namely Mountlake Terrace, Mukilteo, Brier, Edmonds, Bothell, Lake Forest Park, Kenmore, and Woodinville, came from the 2004 FBI Uniform Crime Report.  Overall, he stated, these crimes are regional in scope, as opposed to being specific to Shoreline.  During the first seven months of 2005, arsons in Shoreline are down 63%, robberies are down 53%, rapes are down 42%, burglaries are up 21%, and auto thefts are up 31%.  He outlined crime reduction strategies for auto theft, which include primarily public involvement/education.  He said the department utilizes the public as “the eyes and ears” of the police department.  Additionally, being diligent on where cars are stolen from and where they are recovered also assists in the reduction of auto theft.  At present, City data does not identify a particular area in the City from which cars are being stolen.  The identification of high-impact offenders is also an important part of the auto theft crime reduction strategy.  The department is also targeting enforcement and working with the King County Prosecutor’s Office to ensure that auto thieves receive enhanced sentencing.  He outlined the details of King County’s new car theft initiative, which should help streamline the judicial process for this particular crime.  He said the police are also working to improve in the areas of evidence collection (fingerprinting, DNA analysis, and interviewing) in order to reduce the auto theft rate. 

Continuing, Chief Burtt outlined the strategies for combating residential and commercial burglaries.   These include public education/awareness and working with Block Watch captains, neighborhood community councils, and the Chamber of Commerce.  He emphasized the need for citizens to report suspicious activity in their neighborhoods.   The police department also conducts complimentary security inspections for business owners and educates business owners on ways to safeguard their businesses.  Chief Burtt concluded his presentation by saying that he is pleased with the statistics he has seen thus far for 2005.  He noted the reductions in some crime categories, pointing out that 95% of surveyed residents feel safe in the City during the day, and 73% feel safe in the City at night.

Councilmember Hansen asked who has investigating authority when a car is recovered in a City the theft did not originate in.  Chief Burtt stated the recovering agency is responsible for processing the crime scene.

Councilmember Ransom expressed concern about the increase in auto thefts.  He stated his opinion that the citizen survey was largely based on past performance.  These numbers, he concluded, are tied to the fact that 185 drug houses were closed in the 1990’s, which led to the 50% decrease in the burglary rate. Based on the report, he said it appears that Lake Forest Park has approximately half the increase in auto thefts that Shoreline has experienced.  He also felt crime has increased due to the reduction of the street crimes unit.  He suggested adding more staff to the street crimes unit and conducting more proactive street crime investigations.  While he is pleased with the decreases in rape and other major crime categories, burglaries and auto theft are still areas of major concern.

Deputy Mayor Jepsen questioned the comparison of Shoreline’s auto theft statistics to Lake Forest Park.  Councilmember Ransom clarified that Shoreline has a 44% increase, whereas Lake Forest Park had only a 24% increase. 

Chief Burtt did not feel Lake Forest Park accurately compares to Shoreline because it does not have the higher crime rates associated with a major traffic corridor such as Aurora Avenue.  He felt Edmonds and Lynnwood would be more accurate comparisons because they both include the Aurora corridor in their jurisdictions.    

Councilmember Chang wondered if there was a correlation between the areas the crimes occur and the age and race of auto theft and burglary offenders.  He asked whether the auto thefts are occurring in the same areas where the burglaries are occurring.  He also asked what age groups were involved in these burglaries and auto thefts.

Police Chief Burtt summarized that he believes the 15 – 25 year-old age group is responsible for most of the auto thefts.

Councilmember Chang stated if most offenders fall into the 15 – 25 age group, then the emphasis needs to be in the schools.  He felt teaching students to have respect for other people’s property is essential, and parents need to be more involved.  Community policing and having approachable police officers, he stated, are crucial to decreasing crime.  He asked if community policing was occurring, and if it was, what the objective is for the program.

Chief Burtt responded that he is proud of the community policing efforts in Shoreline.  The term community policing, he stated, refers to working in a partnership with the community and being responsive to community needs.   The Shoreline Police Department has become a model for other law enforcement agencies in terms of community-oriented policing.  Storefront officers are very involved in community policing initiatives.  The City has many effective programs, including Block Watch, Business Watch, the Neighborhood Traffic Safety Program (NTSP), the Senior Intervention Program, the School Resource Officer, Anti-Bullying, and the Motel Trespass program.   He said his objective is to continue enhancing an already excellent community-based police department and to further develop relationships that have been forged over the last 10 years.

Councilmember Ransom stated that the key to community policing in Shoreline is the accessibility of the police officers to the public.  More reports, he stated, are coming into him saying officers are not available to the public and are indifferent and not approachable.  He said this is the reason there are less calls made to the police to report illegal activity in the City.

Councilmember Fimia appreciated the additional information but was hoping for more analysis of the crime problem.  She said the Council and the City staff should be alarmed about the rise of crime in Shoreline and not turn to citizen surveys or anecdotal evidence for answers.  She stated her opinion that the report is not complete and is internally inconsistent.  She said if crime levels continue to rise, the City will lose its standing as a great place to live.   She requested King County’s statistics for murder, aggravated assault, and domestic violence so she can see what the tendency is for those crimes in Shoreline.  She is also hearing from children and parents who are very concerned about the increase of drug use in schools.  A summit, she stated, needs to occur with the schools and the City’s Human Services Department, the Prosecuting Attorney, and the Attorney General’s Office.  She asked if personal identity thefts, burglaries, and car thefts relate to methamphetamine use.

Chief Burtt responded affirmatively, noting the connection between the rise in identity theft and methamphetamine use.

Councilmember Fimia emphasized the need to hold a summit to discuss why crime is increasing, noting that the City should study other cities that have reduced their crime rates.  She reiterated her interest in reviewing domestic violence statistics.   She concluded that possible reasons for the increased crime rates include poverty, age demographics, lack of solid Block Watch programs, drugs, and/or lack of penalties.

Deputy Mayor Jepsen expressed interest in knowing who is buying stolen property and what is being done about them.  He felt the police should look at not only pursuing the thief, but also pursuing the buyers.  He expressed interest in knowing how much property is being stolen in Shoreline and being recovered in Shoreline, versus how much of it ends up in other jurisdictions.

Councilmember Chang commended the police department for the difficult and stressful job they have. He reiterated the need for community policing and collaboration.  

Councilmember Ransom stated he would like to know what percentage of the cars stolen are refurbished and sold, as opposed to those abandoned and recovered.

Chief Burtt stated that about 95% of all stolen cars in the City of Shoreline are recovered.  He said they are usually recovered within a week and are used primarily for transportation.

Councilmember Hansen asked if speed measuring devices are being used in the City of Shoreline.  He considered them to be very effective enforcement tools and felt the City should encourage residents to use them if they are available.

Councilmember Ransom pointed out that Aurora Avenue, Ballinger, and North City are problem traffic areas in the City. 

7. 7.WORKSHOP ITEMS

There was Council consensus to take the agenda items in reverse order.  The Council, by consensus, revised the agenda.  Item 7(c) became Item 7(a) and Item 7(a) became Item 7(c).

(a) Aquatics Program Review

Ms. Lynn Cheeney, Recreation Superintendent, introduced James McCrackin, Pool Manager and Bridget O’Connell, Assistant Pool Manager.  She outlined the organization of the Aquatics Division and stated the pool is a seven day a week operation which is open 105 hours each week.  The Aquatics Program makes up about 20% of the entire Parks, Recreation and Cultural Services budget.

Mr. James McCrackin, Pool Manager reported that the pool is focused on the community.  To stay aligned with this focus, many amenities have been added to the pool to include four tot docks, a tot and deep slide, a rope swing, removable stairs, a disabled lift, bleachers, and a poolside basketball hoop. Resurfacing of the pool occurred in 1998;, 36 parking spaces were added in 1999;, and the poolit was renovated in 2001 which included a locker room and office expansion, making the building ADA accessibilityle, resurfacing floors, repairing roof, and installing a new diving board.  In a survey done in 2003, the pool received a 98% “good to excellent” customer service rating.  Pool staff instructs residents and employees in CPR, First Aid, water rescue, lifeguarding, and water safety instructor courses.  In 2003, he said, the City of Shoreline implemented the AED defibrillators in the workplace.  The pPool sStaff went through and ensured that all staff members wereas current in their defibrillator and CPR training.  Since 1999, the pool has doubled attendance into their safety classes. He concluded and introduced Bridget O’Connell.

Ms. Ms.Bridget O’Connell, Assistant Pool Manager discussed the instructional programs at the pool.  She stated there are instructional swim lessons for all ages and multiple time frames for the classes to meet community needs.  The pool offers online registration for swim lessons and the CLASS registration software system for keeping track of patrons.  The pool also has a swim and dive team to promote youth health and participation in the community.   The coaches for this seven-week program are trained and compete against other local cities.  Additionally, the aquatics program has a summer swim camp and a day camp.  She added there are water aerobics, deep water training, and water therapy classes given by trained instructors. In conclusion, she stated the future goals for the instructional portion of the program are to revampfine the lesson programs, continually invest in staff training, and continue to meet community needs by responding to customer feedback.

Mr. McCrackin concluded the presentation by thanking the City Council and communicating howthe importance oft swimming is to a waterfront community.

Mr. Burkett stated usage of the pool has increased, which means most of these new programs have been funded by user fees, not the General Fund.

PUBLIC COMMENT

            (a) Lisa Clayton, Shoreline, shared her experiences with the Shoreline Pool staff.  She has a disabled child and the staff at the Mount Lake Terrace pool told her they did not have the available staff to work with her daughter.  She told them she wasn’t looking for anything special and she just wanted to sign her daughter up for swimming lessons like anyone else.  She praised the Shoreline pool and staff for opening their doors to her family and working with her disabled daughter.  She said her daughter, Brianna, was shown kindness, patience, compassion, encouragement, and friendship by the staff at the Shoreline pool and now she knows that she is a part of the community for the very first time.  Bridgett is wonderful and the staff has fulfilled a need in the community.  She said she is proud to be a resident and the City has positive role models.

            (b)        Fay Sato-Beland, Lake Forest Park, has been a member of the pool for 5 years.  She said theThe Shoreline pool is “a place that has heart.”  This comes from the staff that works there.  Her mother of 80 years has been swimming there for the past two weeks.  The staff at the pool is reaching out to all.  She concluded statingthat the pool is a safe, fun, and loving place.

Councilmember Ransom inquired how much General Fund support the pool currentlyis receivesing.

Ms. Cheeney stated the pool is supported by 49.4% of the General Fund.

Councilmember Ransom commented on the quick action of the Shoreline pool staff that saved his daughter from a potentially fatal injury.  was on the varsity swim team with the Shoreline School District.  On one occasion she jumped into the pool and hit the bottom.  She broke her nose and was knocked unconscious.  It was the quick action of the staff at the pool that saved her. He said the cooperation from the pool staff was excellent and their service was greatly appreciated.  concluded that the cooperation from the pool staff his family received that day was excellent and we appreciated it.

Councilmember Gustafson thanked the staff.  He said he has watched the pool grow over the years and agrees there is a different attitude;, it has heart there.  The instructors are friendly and the facility and programs are much better than they were three to five years ago.  However, he expressed concerns with the age of the pool. He inquired how long the pool would last and how much will it cost to renovate it for the long-termin the long run.

Ms. Cheeney stated there is no longevity calculator for the pool.  In the next several years she doesn’t believe it will need any attention.  She concluded that it is It iswell-maintained by maintained excellently by the staff and it seems to be in good shape, she concluded.

Councilmember Gustafson suggested the creation of a community advisory board to possibly submit to the voters a bond for building, expanding, or renovating the facility.  the creation of a new pool, renovation of this facility, or the building of a larger aquatic center.  He continued and asked what activities were in the summer camp the pool runs.

Mr. McCrackin responded the summer camp has a program called Sting Ray that consists of swim instruction, crafts and activities. The children also take trips to the beach as a part of this program.  The hours are 10:30 – 4:00 pm each day.

Councilmember Grace appreciated the thoroughness of the report.  He said it seems this place is a great workplace where the staff is focused on the community and the managers ensure that staff members attend regular goes to training opportunities often.  He applauded the staff for their efforts.  He closed by inquiring whether or not a new aquatic center came up with the Bond Advisory Committee.

Councilmember Gustafson responded saying it did come up, but it is just an idea.  It was not discussed as a part of the current Bond Advisory Committee.

Councilmember Chang echoed the Councilmember praise of the pool.  He stated when the delegates from ourShoreline’s Sister City, Boryeong Korea, came to Shoreline they were impressed by our pool.  He thanked and encouraged the pool staff to keep being community-focused and creative.

Mayor Hansen stated the Council was advised not to take over the pool from King County.  He thanked everyone for their testimony and congratulated the staff for being the focal point of the success at the pool.

Councilmember Ransom supported Councilmember Gustafson’s comments and shared that he hoped the Council can propose a bond in the future to expand theour aquatic center.

Councilmember Fimia thanked the pool staff for their service to the citizens of Shoreline and is an advocate for having and keeping pools.  Based on the intangibles, she said, there is a great need for this recreation facility.  There is also a greater need for this type of facility on the east side of Aurora Avenue because there is a higher density of residents.  Therefore, sheI would be in a favor of having another facility on the east side.  She suggested the City put more moniesfunding into the Capital Facilities Replacement Fund in anticipation of having to rennovatedo the existing pool.  She asked if there was a waiting list for usage of the pool.

Mr. McCrackin responded that there was a long waiting list for residents who want to take classes, and 17 to 20 people who have lesson programs they want to give.  He said there is not enough pool space or time to accommodate all of the people who want to offergive new classes.

Councilmember Fimia suggested that maybe it may bewas time to seriously think about adding another facility in Shoreline if the need is there.

Councilmember Gustafson concurred with Councilmember Fimia on the addition of an aquatic center in the City.

(b) North Central Interurban Trail Use Permits

Bob Olander, AssistantDeputy City Manager, stated the Council asked for more information regarding the North Central Interurban Trail.  He continued and saidexplained that the City has received a $1.2 million grant for a part of the trail from the Interagency Committee for Outdoor Recreation (IAC). At present, the City is halfway through the design phase for this section of the trail.  The final design will be brought to the Council in the spring of 2006 for Council review and input with the construction for the North Central section slated to begin next summer.

Continuing, hHe said the Council also requested information on the terms of the permits of the tenants that are on that section of the trail.  At the City’s request, Seattle City Light (SCL) gave the permit holders a one- year notice to vacate, which was sent to the tenants in March 2005. Most of the permits issued through SCL allowedprovided for 30 -days notice.  While all of themHe noted that the permit holders waived relocation assistance and all permit holders are responsible for removing all physical structures and property from the SCL right-of-way upon notice.  He introduced Tom Boydell, Economic Development Manager, who is assumeding the responsibility offor being the outreach representativeactivities to the businesses in Shoreline.

Mr. Boydell explained that Aat present, six businesses have already found locations outside of Shoreline to relocate;, two have declined the City’s assistance;, and the remaining ten will be receiving expanded assistance from the City.  The expanded assistance, he concluded, will involve creating a relocation assistance pamphlet, conducting a needs analysis, identifying possible relocation sites for these businesses to relocate, and holding “brown bag” information sessions.

Upon call of the Mayor, Mayor Hansen called for public comment.

there was no one wishing to provide public comment. 

No public comment given.

Councilmember Ransom stated that businesses are very much interested in relocation assistance.  In the original Aurora Corridor Plan, the City agreed to give themprovide $5,000K to $10,000K per business to assist them in relocation.  Now the City iswe are denying them the funds because there was no grant money for this section of the project.  He urged the Council to direct staff to payassist these businesses that have tomust relocate as itwe committed to do years ago.

Mr. Olander replied that hissaid he recalled recollection was that this allotment was a part of the original commitment to businesses as part of the Aurora Corridor Plan. The Aurora Corridor Project is covered by fFederal regulations, and they will only approve grants to furnish money to business owners who privately own the land from which they are being displaced from.  The land the businesses are being relocated from is owned by SCL, not privately-owned by the relocating businesses.  He askedrequested that Kirk McKinley, Aurora Corridor and Interurban Trail Project Manager, to comment on this issue.  was the $5K to $10K that was to be allotted for the relocation assistance re-routed to fund the assistance on the undergrounding.

Mr. Kirk McKinley, Aurora Corridor and Interurban Trail Project Manager, responded that the original policies and procedures manual for right-of-way acquisition that was adopted in 1999- or 2000 included $5,000K for business assistance along Aurora Avenue if relocating within the City of Shoreline.  In 2003, the provision was eliminated because fFederal guidelines allowed for relocation allowances of up to $50,000K for businesses associated with a federally- funded transportation project.

Councilmember Grace inquired what type of professional services are the ten relocating ten businesses that are relocating askingrequesting for from City staff.

Mr. Boydell stated that these ten businesses are diverse.  Some of them want to grow, some want to stay in Shoreline, and some are struggling and are looking for some assistance. He went on to explain the assistance programs that pools resources and helps businesses withWhat the City has done is reached into the community and worked out a comprehensive approach and gotten assistance from non-profits and large Seattle banks. The City hired a different contractor who could provide real estate and business planning.  advice to address personal business needs as well as pool the resources of the relocating businesses. The City then provides the information and then allows the individual businesses to choosebrings the business to a certain stage and let them chose what level of assistance they desirewant to purchase.  Businesses can also participate in the We have also established an economic development program that these businesses can participate in, which involves non-profits that assists with the cost side of business, environmental issues, and translation services. The other program is called Community Capital Development (CCD) is an additional program which is also a non-profit organization that provides training, technical assistance, business mentoring, and access to loan capital.

Councilmember Gustafson asked if leaseholders have any responsibility to help the business owners.

Mr. Boydell stated he strictly works with the business owners.  A part of this relocation process, he explained, is not just assisting them into another “rental” situation but actually determining if the business owners have the capability to own the new property that they move intothey occupy.  If so, it will give the business owner greater stability and opportunity for growth.

Councilmember Fimia asked whether the affected businesses were told about the Council meeting tonight. She conveyed that the Council has asked in the past that all affected people be notified.  She stressed that this must occur in the future. She said She questioned what our obligation was to the businesses that are being displaced.  She summarized and said it seems the City will help them with business plans and relocation, but not offer financial assistance.  In fact, they need to pay for the relocation expenses and the demolition of the buildings they occupied.  Tthis relocation assistance is a step in the right direction, but the City is not doing enough, she said.  In conclusion, she requested this item be put back on the agenda on a future date with notification to the affected businesses.  She questioned if there wereas any legal problems with the City providing funds for these businesses.

Mr. Olander replied that direct payment to businessesis may constitute a gift of public funds, but more research needs to be done to determine thishas to be done.  The problem, he expressed, is thate permit holders have explicitly waived their right to relocation assistance and that a part of the lease terms was that they had toinclude demolishing the building when the lease endsed.  He felt there may be some legal problems with assisting the permit holders with the cost of demolishing the building, but felt there should notn’t be any problems with helping the sublessees or business owners with funds to assist in their relocation.  He stated, but he would have to verify this with the City Attorney.

Mr. Boydell said the small businesses may have some capital needs and sources for that exist.

Councilmember Fimia felt that the City is displacing these businesses for a trail, which is not a community necessity.  If these businesses were profitable, she felt it wouldas be the City’s obligation to help them with relocation costs.  She stated she would like to see this brought back with a motion or an ordinance to the Council.

Councilmember Chang made referredence to three buildings that were demolished by the SGA Corporation Development because the Gateway Development they had to go ahead with their project and could not wait for the business owners to demolish the buildings.  He wondered who would pay for the demolition if the similarame situation occurred in whichand the business owners could not n’t pay for the demolition of theirse buildings.

Mr. Olander explained the SGA dDevelopment approvals and said the permit holders would be responsible for the demolition if this occurred.

City ManagerMr. Steve Burkett statedadded that Gateway and Mr. Alseth negotiated on the demolition of the buildings to get the project started.

Mr. Olander stated he doesn’tdid not foresee any other private developers stepping in to do private demolition.  The permit holders will have the responsibility for the demolition of their buildings.

Mr. Burkett felt because the permit holders were receiving substantially lower lease rates they would comply with the terms of their leases and pay for the demolition of their prospective buildings.

Mr. Olander added that SCL could enforce the terms if they did ignore the terms of their leases in court of the leaseholders ignore their agreements. it would be enforceable in Court from SCL.

Councilmember Gustafson felt that the property owners who entered the 30-day notice leases with the SCL should know and be responsible to do the things that are asked in the lease they signed.  Therefore, he concluded, the City has no obligation because they knew the terms of the lease and is opposed to doing so.  However, the subleases should receive some help. and we are doing that.

Councilmember Ransom expressed concern about public relations., noting that He said the Council originally committed funding money to help the displaced businesses.  The City has received about $11 million, most of it grant money, and. sSupporting these businesses in finding a new location in Shoreline meansis good public relations.  The City needs to go the extra step by paying them $5K to $10K$5,000 to $10,000 for relocation.  The City will lose credibility if they do not receive monetary assistance.  He urged the Council to allocate funds for these businesses.

Councilmember Chang questioned whether or not these businesses would stay in Shoreline if they received monetary assistance from the City.

Mr. Boydell stated he was notn’t sure whether or not $5,000-$10,000 5 to $10K would make any difference or keep the businesses in Shoreline.  The City needs to look at the problems and the entire relocation and what the goals and capabilities are for the relocating businesses relocating.

Mr. Olander also statedsaid whether or not or not a business stays in the City is based on the individual business and several factors which are going to be determined by the business owner.  These businesses will not be able to find theanother low-rent option they were in on inthey experienced on Shoreline on Aurora Avenue.

Councilmember Chang agreed with Councilmember Ransom and athat a commitment was made by the Council to help these businesses years ago and the Council should abide by it.

Mr. Boydell offered an alternative solution to provide additional capital through the Community Capital Program (CCP).  The City could also wait until the consultants have worked with them and see what needs the consultantsare identifiedy.

Councilmember Grace said he prefers a more flexible approach.  A fixed dollar amount is not applicable due this beingbecause there is a wide range of businesses.  He believed if a business needed more than $10,000K for assistance then the Council should be notified.

Mr. Boydell outlined the funding sources available for this effort.  stated Tthere is $8,500.5K committed to one direct service contractor, and the two pilot programs that have been set-upestablished have been allocated $15,000K for a five month pilot.  A sum of and $10,000K is allocated into the Economic Developmentcos Program.  These programs are to cover all of the small businesses in Shoreline as an additional resource.

Mayor Hansen advised that leases work the same way everywhere, so this is not a unique situation. He said tThe Council has no obligation to assist, but would like to help and retain their businesses in Shoreline, he said.

There was Upon Council consensus to, the Council directed the City sStaff to provide follow-up information on the progress of the relocating businesses and the Interurban Project at a future meeting.

Mr. Boydell stated he can come backreturn in eight weeks with a report and he will provide notice to businesses and permit holders of the next meeting discussing this issue.

Councilmember Fimia outlined the various amounts being spent on economic development and asked why Forward Shoreline is not involved in business retention.  She noted the City is spending over $100,000 in economic development, with a large proportion ($25,000) being contracted with Forward Shoreline.   reported there were 18 specific businesses listed and it was easy to notify them.  She wondered what the City contract was with Forward Shoreline.  She guessed it was $25K per year.

Mayor Hansen confirmed it was $25K per year.

Councilmember Fimia continued and stated the consultant is costing $8.5, the pilot projects are $25K, the Economic Development Group is meeting and the City has hired an Economic Development Coordinator.  She asked why Forward Shoreline isn’t doing this retention of small businesses.  This is close to $100K the City has invested in economic development.

Mr. Boydell responded that $100,000K is a small amount to invest on economic development compared to other jurisdictions.

Councilmember Fimia commentedfelt that City staff is making decisions and signing contracts without the consent of, not the Council.  She asserted that said contracts are being signed and the the Council should be making these decisions.  Businesses are being displaced and seeminglyit appears the decision to compensate them is goingwill  to be made by the City staff.  The Council has the final responsibility to establish how these funds get spent and it was given to the Council by the voters.  The Council has set established up a development group whicho has not made any decisions.

Mr. Boydell commented that the amount of money allocated is small.  The City and the counselorCouncil will be looking at ways to use the money more creatively and effectively.  There are some ideas for the 2006 bBudget and they are being tested with this budget.  The recommendations, once the Economic Development Task Force prepares them, will be presented to the Council for consideration.

(c) Preliminary 2006 Budget Briefing

Ms. Debbie Tarry, Finance Director, introduced thise item and stated she will review the budget calendar and give a status on what has been done.  She outlined the 2006 Budget Schedule and reminded the Council of the budget policies that were adopted for the City. She communicated that as of now the City has a half million dollar$500,000 2006 budget surplus without adding any new revenue or any enhanced services sources for 2006.  In April, she stated the City estimated there would be about a $235,000K budget surplus.  Since April, the sales tax trends appear stronger and the utility tax trend is increasing. She reviewed expenditure projections and revenue projections for the budget. Specifically, she outlined that e General Fund operating revenues are expected to increase by 4.6%. The largest source, property taxes, she said would increase by 1.8%.  Sales tax revenue based on the projections would increase 1.5%.  She stated the gambling tax revenues would drop by 2% and the Community Development Block Grant Program could drop by 5%.  As it stands right now the projection for the end of 2005 is that reserves will equal 35% of General Fund revenues.  There will be a drop reflected in the reserves, but that is based on taking $4 million dollars out of reserves and allocating it to the the new City Hall project.  She concluded stating thethat the City remains in good financial position, thate reserves continue to meet or exceed required levels, and that the 2006 Budget will meet Council financial policies and goals.  Staff will produce , and the Council will see a balanced budget from the City Managerfor the Council’s consideration on October 17^th.

Upon call of the Mayor,  Hansen called for public comment.there was no one wishing to

There was noprovide public comments given.

Mayor Hansen advised the City to be cautious when it came toin predicting increases in investment income because for two reasons.  The first reason was he felt the interest rates would either stay the same or fall.decrease.

Ms. Tarry agreed and said based on the investment policies established by the Council, the City invested in some two year investment vehicles that have better interest rates than the State Investment Pool.  Therefore,  so there should be increases.

Councilmember Chang questioned whether there were any initiatives on the ballot that would affect the 2006 bBudget.

Ms. Tarry responded that Initiative 912, the new gas tax, would affect the 2006 bBudget. It would impact it  because the City because we anticipatesd monies from the gas tax.

Councilmember Ransom inquired aboutif a fire district levy increase to $1.50 per thousand assesses value would affect the City’s ability to raise the property tax levy.   the fire district.  If there was a $1.50 property tax reset per accessed value what would that mean to our mean to us if we decided to do something like that.

Ms. Tarry stated thea fire district levy would not directly impact the City’s ability to levy taxes, going to $1.50 wouldn’t have any direct impact on us.  The City can go up to $1.60 but the real issue is how much of a property taxes burden are taxpayers willing to take.pay.

Councilmember Ransom replied stating the projection is $1.21 so does that mean if we voted and raised it up to $1.60 and the City’s revenue would be that $0.39 difference.

Ms. TarryShe added that replied the only way property taxes are raised is by proposing a levy lid lift on the ballot and having the voters approve it.

Mr. Burkett calculated that a levy lid lift to $1.60 represents a total of $6.5 million dollars in revenue.

Councilmember Ransom commented that the budget per capita numbers look very stable.  If the information is accurate, it It seems as if the City has grown more than what is reflected, it this information correct in the numbers..

Ms. Tarry explained the information was in cost and dollars so inflation information is included with it.  This was done to “level the playing field” and make it an “apples-to-apples” comparison.  The City has also eliminated large, one-time expenditures and interfund operating transfers.  She said when preparing the budget the focus is on the operating budget and ways to keep costs down.  By doing this, she concluded, the City staff has learned how to do more with the same or less.

Councilmember Ransom questioned the 17% rate increase in utility tax as represented in the projected revenues.

Ms. Tarry replied that the 17% did not represent a rate increase.  The rates have held steady.  This represents an increase of funds collected than over what was projected.  Cellular phone usage has increased, but the only increases were on natural gas rates.

Councilmember Fimia said she looks for ways to decrease overhead in the budget process. She stated she does notn’t want to see the cost per personcapita be reduced, but she wants to see thea reduction in overhead, or the costs.  of doing business, reducing.  Continuing, she said she will stay aware of the economic picture of the people in Shoreline. Statistics show 19% of the City living in poverty, and there is.  There are a growing number of residents on fixed incomes.  She noted that incremental increases in The amount paid in utility taxes greatly affect low and fixed income people.  in incremental so that it isn’t apparent to us, but the impact is 2/3 of what people are paying in property and sales tax.  She requested to see the swim fees and utility taxes broken out to see those revenues from each of the utility taxes and how they have grown. She also asked to see thefor more detailed information on the police contract figures broken out as far as a reason why the contract is going up, and asked the reason for the contract increase.  . She inquired whether the police contract increase was based on a general increase or is the City utilizing more services from the Sheriff’s Office. She also inquired if she could asked for 10-year projections for the City’s get a chart done for the next 10 years for the general reserves of the City.  She asked staff to said King County was examine King County’sing an incentive-basedized health care program to reduce illness and benefit costs.  She wanted to know what was being done by them and see what the City can do to get information on what more the City can do to lowerdecrease benefit costs.  She said she is opposed to increasing the number of legal full-time employees (FTEs) because the Citywe already spends considerable moniesfunds on outside contracts with outside agencies.  .  She requested comparisons with other cities of how much we arethe City spendsing per capita on per capita legal fees from other comparable cities.  Lastly, she wonderedinquired about what the purpose of the proposed Echo Lake Special Study Area was and how much will be spent on it.

Ms. Tarry responded that the City does have a low-income/seniors exemption program for utility tax through King County.

Councilmember Fimia asked if the threshold for the exemption could be reported to the Council.  She guessed thatassumed it would be low and most people would not qualify for the program.  She concluded that $4 million dollars comes from the public in utility taxes.

Councilmember Grace said it is important to look at comparable employers on a regular basis and keep salaries competitive.  The Small Business Impact Program and the Green Street Tree Initiative are of interest to the Council and will be reviewed.  Finally, he asked what wereabout the revenues in the City Service Fund.

Councilmember Gustafson thanked Ms. Tarry for the thoroughness of her report.  appreciated the throughness of the report given by Ms. Tarry.

Mayor Hansen expressed concern that the 10- year projection would not be meaningful and would include too many assumptions.  He stated he did not want to see a lot of information after year six of the report.

Ms. Tarry concurred that a 10-year projection would simply extend current assumptions.  replied that, yes, the assumptions would be extended.

Mr. Burkett added the goal of the City staff is to keep the reserves between 15 – 20 percent%, including adjusting to changing economic situations.  The revenues the City receives have a direct correlation with the level of service the residents receive. from the staff.  The biggestlargest increase in the $7 million dollar police contract is in health care costs.  Overall, the City staff is fortunate to be able to recommend a balanced budget with some enhancements recommended, as opposed to significant reductions.

Councilmember Fimia noted that the property tax lid reduced the City budget, not Initiative 695.

Mr. Burkett responded that the property tax lid reduced the rate of growth in our property tax revenues.

Ms. Tarry conincluded the City lost the sales tax equalization which was funded by the $3.5 million in motor vehicle excise taxes.

8.         ADJOURNMENT

At 89:4734 p.m., Mayor Hansen declared the meeting adjourned.

_________________________

Scott Passey, CMC

City Clerk