CITY OF SHORELINE

SHORELINE CITY COUNCIL

SUMMARY MINUTES OF COMMITTEE-OF-THE-WHOLE WORKSHOP

Thursday, November 12, 1998

6:30 p.m.

Shoreline Conference Center

Mount Rainier Room

PRESENT: Mayor Jepsen, Deputy Mayor Montgomery, Councilmembers Gustafson, Hansen, King, Lee and Ransom

ABSENT: None

1. CALL TO ORDER/ROLL CALL

Mayor Jepsen called the meeting to order at 6:35 p.m. Upon roll call by the City Clerk, all Councilmembers were present with the exceptions of Councilmembers Gustafson, Hansen and Ransom, who arrived later in the meeting.

2. PROPOSED 1999 BUDGET DISCUSSION TOPICS

Robert Deis, City Manager, requested that Council consider item 2 (b), Planning and Development Services Department, before item 2 (a), Parks, Recreation and Cultural Services Department and add a new agenda item, 2 (e), concerning the property tax levy and Referendum 47.

(b) Planning and Development Services Department

Tim Stewart, Planning and Development Services Director, reviewed the summary of 1999 planned activity in his department.

In response to Councilmember King, Mr. Stewart explained that a Building Official will be primarily responsible for administration of the Uniform Building Code, including oversight of building permits and of applicant appeals to staff decisions. He commented that the addition of this position is meant to free Development Services Manager Anna Kolousek to lead the code revision effort.

Councilmember Gustafson arrived at 6:42 p.m.

Referring to page 76 of the proposed budget, Mayor Jepsen questioned the source of department savings in 1998 and the reason the City will not pass these savings into 1999. Mr. Deis explained that the 1998 budget included the entire Aurora Corridor Pre-Design Study; however, much of the work and the related grant funding has extended into 1999.

Councilmember Ransom arrived at 6:50 p.m.

John Hawley, Senior Budget Analyst, mentioned that the General Fund Overhead has increased for Development Services as a result of staff and expenditure increases. Mr. Deis explained that specially-funded departments must reimburse the General Fund for overhead expenses. Mr. Stewart said Development Services transfers building permit application fees to the General Fund for overhead.

Mr. Deis added that staff will move from Planning to Development Services in 1999. This accounts for part of the proposed increases in the "Commercial" and "Residential" categories. It also accounts for proposed decreases in Planning.

Mayor Jepsen expressed his understanding that the $172,732 General Fund Overhead transfer and the $221,000 carried over from the Aurora Corridor Pre-Design Study account for most of the difference between the 1998 projected budget and the 1999 proposed budget for Planning and Development Services.

In response to Councilmember Lee, Mr. Deis advised that staff created the 1998 budget figures for Planning and Development Services by artificially combining the previously separate budgets for the Planning and Community Development Department and the Development Services Group.

Councilmember Lee asked about cost savings from the consolidation of Planning and Development Services. Mr. Stewart pointed out the deployment of the significant expenditure reductions in Planning to support new code enforcement activities and to continue to improve Development Services.

Combining the $1,033,299 in 1998 direct expenditures and the $732,791 in 1998 transfers, Councilmember Ransom questioned whether 1998 total expenditures for Planning and Development Services actually increased to nearly twice the 1997 amount of $910,356. Mayor Jepsen pointed out that the overhead study resulted in the identification and transfer to the General Fund of $688,347 in overhead costs. Previously, the City covered these costs under Citywide Services. Mr. Deis asserted that 1997 expenditures were understated; whereas, 1998 expenditures more accurately reflect total department costs.

In response to Mayor Jepsen, Mr. Hawley referenced page 161 of the proposed budget to explain that the ending fund balance for the Development Service Fund is the Development Services reserve. Mr. Stewart confirmed Mayor Jepsen’s understanding that this amount is meant to cover the staff costs related to building permits the City has already received. He said staff is comfortable that the current amount is sufficient to cover future liabilities.

In response to Mayor Jepsen, Mr. Hawley said staff maintains an ending fund balance in the Development Service Fund sufficient to cover future liabilities, and transfers any additional remaining funds to the General Fund.

In response to Councilmember Ransom, Mr. Deis explained that government accounting standards require the City to account both the transfer from Development Services to the General Fund for overhead costs and the subsidy from the General Fund to Development Services. Mayor Jepsen commented that the separate transactions are useful for illustrating the true costs of operating Development Services.

Mr. Stewart pointed out that only two of the five Development Services products listed on page 76 of the proposed budget ("Commercial" and "Residential") generate fees.

Mr. Deis confirmed Councilmember Lee’s recollection that the Development Services reserve is made up of revenues from commercial and residential permit fees. He said he directed Finance to create a Development Services Fund. Staff calculated the amount necessary to cover liabilities related to outstanding permits. It then augmented the Development Services Fund with a $44,444 transfer to equal this amount. Staff recently reviewed this amount and confirmed that it remains adequate.

Councilmember Hansen arrived at 7:15 p.m.

Mayor Jepsen suggested that future budgets could show fees as resources, a contribution to the reserve or a carryover and the application of a portion of the reserve or the carryover as a resource. Mr. Deis explained that municipal budgets do not necessarily reflect such accounting adjustments. He said staff could provide a reconciliation. Councilmember Lee commented that staff need only provide a written explanation of what the budget represents regarding the Development Services reserve.

Councilmember Gustafson questioned the proposed increase in expenditures for walk-in services. Mr. Stewart said previous budgets have probably understated expenditures related to walk-in services; whereas, the proposed budget more reasonably reflects these expenditures. Mr. Deis asserted the importance of identifying these expenditures.

In response to Councilmember Gustafson, Mr. Stewart confirmed the potential for the City to obtain additional Intermodal Surface Transportation Efficiency Act (ISTEA) funding in the future. He advised that part of the Capital Improvement Program (CIP) addresses potential grant funding.

In response to Mayor Jepsen, Mr. Deis said the Council policy regarding recovery through fees of Development Services costs did not anticipate implementation of the Comprehensive Plan or code enforcement. Mayor Jepsen asserted the need to revisit the Council policy. Mr. Deis agreed.

Councilmember Ransom noted his assumption that the completion of the Comprehensive Plan will reduce the staffing needs in Planning. Mr. Stewart explained the reallocation of some Planning staff toward the implementation of the Comprehensive Plan and toward code enforcement and short-range planning.

Councilmember Lee questioned the increase in "General Fund Overhead" expenditures. Mr. Deis explained that staff allocates overhead costs based on statistics, such as the number of full-time employees (FTEs) and the percentage of the City budget a department represents. Development Services will have more FTEs, and it will represent a larger percentage of the budget. As a result, staff has increased the "General Fund Overhead" amount.

Noting the expenditures to develop and implement a code enforcement program, Councilmember Ransom mentioned that citizens have complained to him about a loss of property rights. Mr. Deis acknowledged that the City will face challenges as it implements code enforcement.

(a) Parks, Recreation and Cultural Services Department

Lynn Devoir, Parks, Recreation and Cultural Services Director, reviewed the summary of 1999 planned activity in her department.

Councilmember King asked whether the Teen Program will remain in the Parks, Recreation and Cultural Services budget after the City hires a Health and Human Services Manager or return to Health and Human Services. Mr. Deis said it would be appropriate to revisit this at that time. Predicting that the Health and Human Services Manager will be very busy implementing the City’s health and human service strategies and outcomes, he asserted it might be best to leave the Teen Program in Parks, Recreation and Cultural Services where it is established.

In response to Councilmember King, Ms. Devoir confirmed that the master plan for the Shoreline Pool will address the locker rooms at the facility.

In response to Councilmember Ransom, Ms. Devoir clarified that Evergreen Services provides park maintenance services, including ball field maintenance. She noted positive feedback from field users about the maintenance that Evergreen Services provides.

Councilmember Ransom expressed his concern that increasing field usage could damage ball fields. Ms. Devoir said the City will eventually begin to "rest" fields to prevent damage from prolonged wear. Mr. Deis mentioned that the Parks Supervisor, currently being recruited, will play a key role in developing a program for "resting" fields. Councilmember Gustafson asserted that this is a good topic for the Parks, Recreation and Cultural Services Advisory Committee to discuss.

Mayor Jepsen reiterated that summary minutes should suffice for meetings of the Parks, Recreation and Cultural Services Advisory Committee. He expressed support for the proposed enhancements in park maintenance. Councilmember Gustafson agreed.

In response to Councilmember Gustafson, Ms. Devoir said the City will receive County subsidies for the Shoreline Pool for two more years, including 1999.

Councilmember Gustafson asserted that the master plan for the Shoreline Pool will promote and develop levels of service and fees at the facility. Nevertheless, he underscored the financial drain that a pool can pose.

Noting his support for the proposed continuation of City funding for the Shoreline-Lake Forest Park Senior Center, the Shoreline Arts Council and the Shoreline Historical Museum, Councilmember Ransom went on to express concern that these City appropriations have not increased. He asserted that it costs these agencies more, over time, to provide the same level of services. Mr. Deis said this is a policy issue for Council. He explained the staff recommendation to consider these appropriations as challenge grants.

Joe Meneghini, Finance Director, distributed and reviewed materials regarding the Shoreline Arts Council 1999 budget request. He asserted the importance of a diversified funding base for the Shoreline Arts Council—including corporate sponsors, fundraising and financial support of the Shoreline School District.

Ros Bird, Executive Director, Shoreline Arts Council, discussed the agency’s budget and the funding it has requested from the City in 1999. She asserted that the school district is a partner, providing materials and staff time, but not a funding partner. She said a City appropriation of $60,000 would represent approximately 41 percent of the agency’s budget. She commented that the Shoreline Arts Council and the Shoreline Historical Museum provide basic City services as part of the Parks, Recreation and Cultural Services Department. She noted that the arts council functions much as a municipal arts commission would in other cities. She reviewed County and State funding for the arts council. She said the citizens of Shoreline have come to appreciate its programs, which may not always be self-supporting.

Councilmember Ransom said the school district provides classroom-specific instruction; whereas, the Shoreline Arts Council provides performing arts that enhance the quality of life in Shoreline. He asserted that this is a responsibility of the City Parks, Recreation and Cultural Services Department. Noting the arts council has nearly tripled the City’s investment, he advocated that Council increase the allocation for the arts council to $60,000.

Ms. Bird clarified that the Shoreline Arts Council pays the professional artist fees for the artist-in-residence programs in the schools.

Councilmember Gustafson asserted that the school district receives direct benefits from arts council programming and that it has some responsibility to support the arts council.

In response to Councilmember Gustafson, Ms. Bird said the Shoreline Arts Council has not requested and has not received funding from the Shoreline Schools Foundation.

Councilmember Gustafson noted that the arts council has requested a 17-percent increase in funding from Shoreline and a .15 percent increase in funding from the City of Lake Forest Park. He reiterated that those who benefit from the programs of the Shoreline Arts Council should support the agency financially.

Councilmember King suggested that the Shoreline Arts Council charge the school district for its services on an hourly basis as any other professional consultant would.

Referring to Ms. Bird’s letter of July 28, 1998 to Mr. Meneghini, Deputy Mayor Montgomery asked whether the Shoreline Arts Council Board of Directors anticipates that the City will fund the full-time salary for the agency’s director. Ms. Bird identified the cost of increasing the director’s salary from three-quarter- to full-time as $10,000. She said the Arts Assistant position is likely to increase as well. (She did not indicate whether the board expects the City to fund these increases.) In response to Deputy Mayor Montgomery, she said the Shoreline Community College provides in-kind services, not financial support, to the arts council.

In response to Deputy Mayor Montgomery, Ms. Bird advised that before Shoreline incorporated she was a full-time volunteer and that the arts council received most of its limited funding from the County.

Councilmember Ransom said the school district is legally required to allocate 85 percent of its funds to professional salaries for instructional services. He went on to describe the costs the district covers with the remaining 15 percent of its funds. He noted that the school district provides in-kind services to the Shoreline Arts Council. He asserted that it is the City’s responsibility to provide cultural services in Shoreline.

Councilmember Lee questioned the difference in the sizes of the funding increases that the arts council has requested from Shoreline and from Lake Forest Park. Ms. Bird explained that the City of Lake Forest Park provided most of the funding increase that the arts council requested last year and that the City of Shoreline did not.

Councilmember Lee acknowledged that the Shoreline Arts Council provides a valuable service in the community. However, she said she cannot justify a $10,000 increase in funding given all the other needs in the community.

Commenting that the Shoreline Arts Council is important to the community, Council-member Gustafson expressed support for the $10,000 increase in funding.

Councilmember Hansen said he does not accept the argument against financial support for the arts council from the school district. He supported the $10,000 increase in funding; however, he cautioned against any expectation of automatic annual funding increases. He asserted that the arts council must be self-supporting at some point.

Mayor Jepsen recalled the previous Council policy to support the arts council at a rate of $1 per Shoreline resident. He supported the establishment of a formula that takes into account the growing populations of Shoreline and Lake Forest Park and that recognizes the importance of the arts council to both cities. Mr. Meneghini estimated the population of Shoreline at 52,000 and the population of Lake Forest Park at 13,000. Mayor Jepsen mentioned that, at a rate of $1.10 per resident, Shoreline would provide $57,200 in funding, and Lake Forest Park would provide $14,200.

Continuing, Mayor Jepsen asserted that the City must develop and implement a policy for dealing with services from outside agencies. He expressed discomfort that the City provides funding to the arts council and that the arts council then provides grants to the school district. He noted that the school district charges the City for the use of the Shoreline Center. He advocated that the school district become a partner with other public entities in meeting community needs. He advocated that the arts council use City funds on the Shoreline Arts Festival, concerts in the parks and other activities that reach the general community.

Mayor Jepsen advocated City funding for the arts council at a rate of $1.10 per resident. Councilmember Gustafson supported this proposal. Councilmember King said she could support this proposal for 1999. She advocated that the City reconsider the funding rate next year based on the financial support the arts council receives from Lake Forest Park and the in-kind services it receives from the Shoreline Community College and the school district. She mentioned her preference for the funding rate of $1 per resident. Deputy Mayor Montgomery also preferred the $1 per resident rate of funding. Councilmember Hansen agreed that the City should reconsider the funding rate next year. He reiterated his support of the $10,000 increase in funding. Councilmember Lee strongly supported the establishment of a consistent Council policy for funding outside agencies.

Mayor Jepsen requested that each Councilmember identify the amount of funding for the arts council that he or she could support.

Councilmember Ransom strongly supported the $10,000 increase in funding. He indicated his support of the $1.10 per resident rate of funding as a fallback position. He recalled that the school district donated a building to the historical museum and that the City funded its full-time director. He said the arts council is doing a good job with what it has. He asserted that the agency needs a full-time director to obtain more grant funding.

Councilmember Hansen supported the $10,000 increase in funding. He noted his willingness to consider whatever recommendation Council puts forward.

Councilmember King supported the $1 per resident rate of funding.

Mayor Jepsen supported the $1.10 per resident rate of funding.

Deputy Mayor Montgomery recalled that Council first considered allocating $25,000 to the arts council and that it increased the allocation to $50,000. She noted her support for the arts, but she said the City does not have enough money for everything. She supported the $1 per resident rate of funding.

Councilmember Gustafson advocated a Council goal to insure that funding is worked out with the appropriate partners at the beginning of the year. He supported the $1.10 per resident rate of funding.

Councilmember Lee said she cannot support the $10,000 increase in funding. She expressed her willingness to support a Council consensus of the $1.10 per resident rate of funding. She asserted the need for a formula or guideline.

Councilmember Hansen expressed his support for the $1.10 per resident rate of funding as the mean of the amounts proposed. Including Councilmember Ransom’s willingness to support the $1.10 per resident rate as a fallback position, five Councilmembers supported the $1.10 per resident rate of funding.

(c) Public Works Department

Public Works Director Doug Mattoon reviewed the summary of 1999 planned activity in his department and the analysis of change between the 1998 and 1999 budgets.

Referring to the third sub-bullet under "STREET OPERATIONS" on page 94 of the proposed budget, Mayor Jepsen asserted that road overlays should follow road standards. He said he does not want the City to be paving without long-term road designs. Mr. Mattoon explained that staff will develop road standards over the course of the year and that it will return to Council early in the year to address overlay standards specifically. Mr. Deis stressed the need for Council to discuss and set a policy regarding the acceptable service level.

Referring to page 88 of the proposed budget, Councilmember King questioned City payment to King County "for its portion of debt services for past county surface water bonds." Mr. Deis explained that the covenants of the bonds the County issued cannot be impaired after annexation. Mayor Jepsen asked if the County had refinanced the bond debt.

Councilmember King recalled that the County used four to six acres of park land in Shoreline for a holding pond and that it purchased extra land in another community. She objected that Shoreline lost land and must still service the debt. Mayor Jepsen noted a letter he signed to County Councilmember Larry Phillips requesting the purchase of open space near Paramount Park.

In response to Councilmember Lee, Mr. Mattoon attributed the decrease in expenditures for surface water operations to: 1) the refinement of cost estimates for County services; and 2) the elimination of the $200,000 budgeted in 1998 for professional services to conduct an inventory of City surface water systems. He explained that the decrease is unrelated to the increase in General Fund Overhead for surface water. Mr. Hawley advised that overhead costs lag behind expenditures by one year—the 1999 overhead costs are based on the 1998 budget.

In response to Councilmember Ransom, Mr. Mattoon confirmed that Public Works is receiving the funding for capital projects in parks. In response to another question, Mr. Mattoon said Public Works maintains the buildings within City parks (e.g., janitorial and repair services) and the Parks Supervisor oversees landscape, ball field and recreation equipment maintenance.

Councilmember Gustafson questioned the increased expenditures detailed on page 97 of the proposed budget. Mr. Mattoon explained that many of the increases reflect the annualizing of expenditures that Public Works incurred during only part of 1998 when new employees were joining the department. Also, the street maintenance supplies that make up part of "Operating Supplies" for 1999 were budgeted under a different line item last year.

In response to Mayor Jepsen, Mr. Mattoon explained that "Other Improvements" includes the $100,000 budgeted for the sidewalk repair program.

(d) Capital Improvement Program

Mr. Mattoon provided a brief overview of the 1999 CIP budget and projects.

In response to Councilmember King, Mr. Mattoon said the small surface water management projects the City has completed have resulted in a dramatic reduction in surface water complaints to the City so far this season.

Councilmember Lee questioned the expected completion date of the sidewalk project at 175^th Street and Meridian Avenue N. Mr. Mattoon said the City will undertake its project immediately after King County Metro completes its projects at the intersection in the spring.

In response to Councilmember Hansen, Mr. Mattoon said the turn lane on Dayton Avenue N at St. Luke’s School is not included in the CIP.

Councilmember Ransom questioned the status of the skate park, Shoreview Park and Richmond Beach Saltwater Park. Ms. Devoir noted an "outpouring" of opposition to siting the skate park at Twin Ponds Park when staff met with residents neighboring the park. Mr. Deis said he discussed the Paramount Park site with the Shoreline School District Superintendent, who committed to discuss the issue with the board and report back to him. If the school board does not approve the Paramount Park site, he commented that staff will address the YMCA site.

Regarding Shoreview Park, Mr. Mattoon explained that staff is waiting for the finalization of the environmental impact statement to proceed.

In response to Councilmember Ransom, Mr. Mattoon confirmed that the $155,220 budgeted for Richmond Beach Saltwater Park is the amount remaining of the $170,000 the County transferred for improvements to the park after the City constructed the stairway there. Mr. Deis said staff will discuss the trail with Council at an upcoming workshop.

In response to Councilmember King, Mr. Mattoon said the $508,000 budgeted for the Interurban Trail represents the grant funding the County received for the project.

In response to Deputy Mayor Montgomery, Mr. Deis committed that staff will return to Council to discuss the scope and cost of the improvements at Shoreview Park prior to implementing the project.

In response to Councilmember Lee, Mr. Mattoon said the $196,345 budgeted for Aurora Avenue N represents the carryover of grant funds for the Aurora Corridor Pre-Design study that Mr. Stewart discussed earlier in the meeting.

In response to Councilmember Ransom, Mr. Mattoon advised that neither the City nor Metro received the grants for which they applied to construct a sidewalk on the west side of Ronald Bog Park. Mayor Jepsen mentioned that State Senator Darlene Fairley was supportive in discussions concerning additional State funding for sidewalks in Shoreline.

Mayor Jepsen summarized Council consideration of the four department budgets that staff presented. For Planning and Development Services, he reiterated the need to revisit the cost recovery ratio for Development Services in the future. Regarding Parks, Recreation and Cultural Services, he noted Councilmember Gustafson’s request for an analysis, separate from the budget, of the cost savings from contracting with businesses to provide parks maintenance services. He also mentioned Council support for an increase in funding for the Shoreline Arts Council to a rate of $1.10 per resident. Regarding Public Works, he reiterated his preference that the City develop road standards before proceeding with the road overlay.

Mr. Deis noted the need for a better explanation of the Development Services reserve in future budgets. He committed that staff will address funding for the Shoreline Arts Council, the Shoreline Historical Museum and the Shoreline-Lake Forest Park Senior Center with Council during the coming year to insure continuity and predictability for future years.

(e) 1999 Property Tax Levy and Referendum 47

Staff distributed, and Mr. Deis reviewed, a handout titled "Referendum 47 and Impact on 1999 Property Tax Levy." Mr. Deis said staff based the proposed 1999 budget on an increase in the property tax levy equal to the implicit price deflator of .85 percent. Mr. Deis explained that the maximum increase in the property tax levy the City is allowed by law is 7.8 percent. The City receives 9.89 percent of the property taxes collected from Shoreline resident. Thus, a City increase of its property tax levy by 7.8 percent will increase the total property taxes for Shoreline residents by less than one percent. Because of the minor impact to residents, and because the City’s CIP needs are so great, staff recommends that Council increase the City property tax levy by the full 7.8 percent.

Councilmember Ransom asserted that the City needs the full increase for capital needs.

Councilmember Hansen advised that the City does not have to declare a need. He asserted the City should levy the same property tax rate as in 1996, 1997 and 1998 ($1.60) and elect the full increase in assessed value (7.8 percent). Deputy Mayor Montgomery and Councilmember King agreed.

In response to Councilmember Gustafson, Councilmember Hansen explained that a Council decision to elect the full increase in assessed value will not increase the City property tax rate. Mr. Deis confirmed that the property tax bill for a Shoreline homeowner will increase because the property has increased in value.

Councilmember Ransom asked if a Council decision to elect the full increase in assessed value will affect other taxing districts (e.g., the Shoreline School District). Mr. Deis said the school district has its own levy separate from the City levy.

Councilmember Hansen commented that the City does not utilize, and does not intend to utilize, all of the taxing avenues available to it. He said Council would be unwise to forego the increase in assessed value only to have to explain to citizens later the need to raise other taxes to meet legitimate City revenue needs. He noted that the City property tax rate of $1.60 replaces the unincorporated roads district tax rate of $1.74 which Shoreline property owners paid before the City incorporated.

3. PUBLIC COMMENT: None

4. ADJOURNMENT

At 10:05 p.m., Mayor Jepsen declared the meeting adjourned.

__________________________
Sharon Mattioli, CMC
City Clerk