CITY OF SHORELINE
SHORELINE CITY COUNCIL
SUMMARY MINUTES OF REGULAR MEETING
Monday, December 13, 1999
6:30 p.m.
Shoreline Conference Center
Mt. Rainier Room
PRESENT: Mayor Jepsen, Deputy Mayor Montgomery, Councilmembers Gustafson, Hansen, King, Lee and Ransom
ABSENT: None
1. CALL TO ORDER
The meeting was called to order at 7:30 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.
SWEARING-IN CEREMONY
Judge Richard Eadie swore in Rich Gustafson, Kevin Grossman and Robert Ransom for four-year terms beginning January 1, 2000 for Council positions #2, #4, and #6, respectively.
Mayor Jepsen outlined outgoing Councilmember King’s many achievements on the Shoreline City Council and as Shoreline’s first Mayor. He presented her with a plaque in appreciation for her advocacy for Shoreline, particularly for youth, parks, human services and public art.
Dick Nicholson, Chair of the Council of Neighborhoods, listed some of Councilmember King’s accomplishments that were particularly important to neighborhoods, and he presented her with a wall clock.
Nancy Rust, of the Innis Arden Club, also commended Councilmember King and wished her well in her retirement.
Mayor Jepsen reiterated that Councilmember King has been a tireless advocate for Shoreline. He announced the creation of the Connie King Fund to recognize her dedication. The fund will accept donations to benefit City parks and recreation programs. Mayor Jepsen presented Councilmember King with the first donation to the fund from his family.
RECESS
At 7:58 p.m., Mayor Jepsen declared a 15-minute recess. At 8:13 p.m., the meeting reconvened.
3. REPORT OF CITY MANAGER
City Manager Robert Deis reported that King County has reconvened the Emergency Medical Services Financial Task Force. Noting that Shoreline may appoint a member to the task force, he requested Council concurrence to designate Shoreline Fire Chief J. B. Smith. Council supported this suggestion.
4. REPORTS OF BOARDS AND COMMISSIONS: None
5. PUBLIC COMMENT: None
6. APPROVAL OF THE AGENDA
Councilmember Ransom moved approval of the agenda. Councilmember Lee seconded the motion, which carried unanimously, and the agenda was approved.
7. CONSENT CALENDAR
Upon motion by Councilmember Gustafson, seconded by Councilmember Hansen and unanimously carried, the following consent calendar items were approved:
Minutes of Special Meeting of November 22, 1999
Minutes of Special Meeting of November 29, 1999Approval of expenses and payroll as of December 6, 1999 in the amount of $1,101,388.02
Motion to adopt the Proposed 2000 Statement of Legislative Priorities
Motion to authorize the City Manager to execute an Interlocal Agreement with King County to receive funding for Commute Trip Reduction Implementation
Motion to select the Schlotzhauer Firm, PC to provide primary public defense services for the City of Shoreline and to authorize the City Manager to execute a contract in the sum of $9,000/month to provide these services and to execute an agreement to provide in-custody public defense services in the sum of $750/month (both with annual inflation adjustments not to exceed the cost of living adjustment provided to the City’s employees)
Motion to authorize the City Manager to execute the contract for Legal Services with the Kenyon Law Firm for 2000
Motion to authorize the City Manager to execute an agreement for the provision of audio/videotaping services for 2000 with Dwight Edwards, d/b/a FX Video, in an amount not to exceed $29,000
Motion to authorize $5,000 in re-programmed Mini-Grant funds for the Richmond Beach Community Council to complete beautification and gateway signs in its neighborhood
Motion to authorize approval of the Ridgecrest Neighborhood Association Mini-Grant of $5,000 for outlets for holiday lighting and neighborhood identification signs
Motion to authorize approval of $3,250 in 1998 Mini-Grant funds for the Richmond Beach Community Council to add to an existing watering system at Richmond Beach Community Park
Motion to authorize approval of $5,000 in Mini-Grant funds for the Richmond Highlands Neighborhood Association to: 1) create a walking tour guide of neighborhood sites of historic interest; 2) purchase and install granite markers at the sites; and 3) purchase and install neighborhood identification signs at eight locations in the Richmond Highlands neighborhood
Motion to authorize the City Manager to execute an amendment to the Red Carpet Building Maintenance Company contract Ordinance No. 220 to increase the City’s contribution for employee benefits from $509 to $527/month
8. ACTION ITEMS: ORDINANCES, RESOLUTIONS AND MOTIONS
(a) Ordinance No. 219 authorizing the City’s 2000 - 2005 Capital Improvement Program
Bill Conner, Public Works Director, noted that Council has reviewed this item several times. He identified two changes: 1) the City will retain the $700,000 budgeted to construct classrooms at the Shoreline Conference Center in the Recreation Center project budget until the City and the School District have signed a Memorandum of Understanding; and 2) the City will seek additional funding for the North City Improvement Project.
Deputy Mayor Montgomery moved adoption of Ordinance No. 219. Councilmem-ber Hansen seconded the motion, which carried 7 - 0, and Ordinance No. 219 was approved.
(b) Ordinance No. 221 amending SMC 12.25.090 and establishing a fee of 6% of gross revenues for franchises and right-of-way use agreements
Kristoff Bauer, Assistant to the City Manager, explained that this ordinance clarifies the policy that Council adopted in 1996 directing staff to levy franchise fees for all franchises enacted by the City. This ordinance establishes a six-percent franchise fee, which is consistent with City utility taxes and other recent franchises.
Upon motion by Councilmember Ransom, seconded by Councilmember Lee and carried 7 - 0, Ordinance No. 221 was approved.
(c) Ordinance No. 218 adopting revised fees for services for land use and building permit development applications, for parks and recreation, and for public records charges, and repealing previously adopted fee schedules
John Hawley, Senior Budget Analyst, noted that Council discussed the updated fee schedules on November 29 and that it held a public hearing about them last week. He briefly explained the cost recovery policies for development services fees and for parks and recreation fees.
Deputy Mayor Montgomery moved adoption of Ordinance No. 218. Councilmem-ber Hansen seconded the motion.
Councilmember Gustafson asked if Councilmembers were comfortable with the 80-percent cost recovery for development services fees. Councilmember Hansen felt there was total agreement on this. He said the only question is whether to base the fees on historical numbers or on projected costs for 2000.
Councilmember Lee urged staff to seek grant funding for recreation programs. Mr. Deis said staff is well aware of Council’s concerns. He said the $9,000 grant from the office of King County Councilmember Maggi Fimia will be available for 2000. He mentioned that staff will return to Council early next year with a proposed subsidy program.
A vote was taken on the motion, which carried 7 – 0, and Ordinance No. 218 was approved.
(d) Ordinance No. 222 adopting the annual budget for the City of Shoreline for the Year 2000
Before turning to the budget, Mr. Deis presented Council with the Distinguished Budget Presentation Award from the Government Finance Officers Association for the 1999 budget. Mayor Jepsen commended staff for its hard work.
Mr. Deis distributed a memorandum on the legal and political implications of reallocating City gambling tax revenues. In the memorandum, City Attorney Ian Sievers concurred with the comment that Councilmember Ransom made last week: if the City allocates all gambling tax revenues to capital programs, a court could find Shoreline in violation of State statute. Also, Community and Government Relations Manager Joyce Nichols reported that gambling industry representatives advocated the reduction of maximum gambling tax rates at legislative hearings earlier this year and asserted that cities do not need as much revenue for gambling-related enforcement as they are collecting. The allocation of all gambling tax revenues to the capital budget could give credence to this argument.
Turning to the Six-Year Financial Plan, Mr. Deis reviewed the current allocation of gambling tax revenues between the operating and capital budgets. He noted the goal for 2001 and subsequent years to divide the 11-percent tax rate and allocate seven percent to the operating budget and four percent to the capital budget. He emphasized that the ending fund balance, which staff has historically transferred to the capital budget, will begin to decrease dramatically in 2001.
Next, Mr. Deis discussed how fund balances resulted in previous years. He compared budgeted and actual expenditures from 1997 through 1999. He said the City cannot rely upon the factors that generated fund balances in previous years to do so again in the future. He noted that staff revenue and expenditure estimates have both grown more reliable. He said in 2000 the budgeted figure is much closer to the trend line.
Councilmember Ransom noted the short history of Goldie’s Casino. He questioned the reliability of basing the projected gambling tax revenues on one quarter of start-up figures. Mr. Deis agreed that staff based the projections on figures from only one quarter. He asserted that the projections are conservative. He noted the challenge of assessing a new casino within the context of what the larger market can accommodate.
Mr. Deis discussed the ramifications of reallocating all gambling tax revenue to the capital budget in 2000. He said operating expenditures will exceed operating revenues by $872,552 under this scenario. He emphasized that ongoing operating expenditures should not exceed ongoing operating revenues, that the balance of expenditures and revenues is the hallmark of a well-managed organization and that this is important to acquiring a good bond rating. He said if the City allocates all gambling tax revenue to the capital budget it would have to reduce the operating budget or identify new sources of operating revenues by 2001.
Deputy Mayor Montgomery moved adoption of Ordinance No. 222. Councilmember Ransom seconded the motion.
Councilmember Hansen commented that the figures presented highlight the City’s current dependence on gambling tax revenues, and he questioned the wisdom of this approach. Mr. Deis agreed that this is correct to an extent. He said the City is dependent on other revenue sources (e.g., sales tax, fees). Councilmember Hansen did not feel gambling taxes were in the same category.
Responding to Councilmember Hansen, Mr. Deis said he was reluctant to tie specific revenues to specific programs. He said placing gambling revenue in the General Fund is close enough to make the argument that it is used for public safety activities.
Councilmember Lee questioned what other cities do with gambling revenues. Mr. Deis said he would be shocked if other cities tie the tax revenues to specific programs rather than allocating it to their general funds. Councilmember Ransom confirmed that the City of Everett allocates gambling tax revenues to its general fund.
Councilmember Hansen mentioned the City’s consideration of options related to regulation of mini-casinos. He asserted that the budget appears to eliminate Option #5, which is to have no casinos in Shoreline. Mr. Deis said the City could phase out casinos, but it would have to develop a financial strategy to make up the lost revenues. He acknowledged that the City does not have a strategy to allow implementation of this option at this time.
Deputy Mayor Montgomery thanked Mr. Deis for the overview. She asserted that Council has no choice but to vote for the budget. She said she shared Councilmember Hansen’s concerns and his desire that Option #5 remain feasible.
Councilmember Lee said the current plan makes sense for now, but the City must recognize that the State can affect the amount of tax the City collects, and the City should be thinking of ways to reduce its dependence to about five percent. Mr. Deis suggested this as a discussion topic at the next Council budget retreat.
Mayor Jepsen concluded that staff followed the direction that Council provided during the last budget retreat. He advocated approval of the budget and continued discussion of this issue at the next budget retreat. He said the City should determine a flat amount, instead of a percentage, of gambling tax revenue to allocate to the operating budget; it could then allocate additional gambling tax revenues to the capital budget.
Councilmember Hansen commended the budget process and felt this is a very good budget despite his concerns about gambling tax revenue.
Councilmember Gustafson said he hated to see the City dependent on gambling taxes. He felt the City should start looking at possible cuts.
A vote was taken on Ordinance No. 222, which carried unanimously, and the annual budget for the year 2000 was adopted.
(e) Proposed Shoreline utility tax relief program, effective December 27, 1999
Joe Meneghini, Finance Director, explained the program criteria for relief from natural gas and sanitation utility taxes. The rationale for the program is that these are core public health service areas. He said the criteria are the same as those of Seattle City Light (SCL), which has agreed to share data regarding Shoreline customers who qualify for the program.
Mr. Deis said it is a sign of the good ongoing relationship with SCL that it has agreed to share its database. He noted that many other cities do not have a utility tax relief program.
Councilmember Lee moved to approve the utility tax relief program. Council-member Gustafson seconded the motion, which carried unanimously.
Responding to Councilmember Lee, Mr. Meneghini said individuals need to apply for this program. The program will be advertised and implemented in conjunction with SCL’s program.
Responding to Councilmember Ransom, Mr. Meneghini estimated that approximately five percent of ratepayers will be eligible for this program, based on 1990 census figures. Councilmember Ransom commented that incomes have changed since then. Mr. Meneghini said this is the best data available.
Responding again to Councilmember Ransom, Mr. Meneghini said the rate is waived, not simply deferred.
A vote was taken on the motion, which carried unanimously, and the utility tax relief program was approved.
(f) Ordinance No. 217 amending operating and premises requirements for panoram establishments to require reconfiguration of panoram booths and investigation of managers; and amending SMC 5.15.010 and 5.15.100
Ian Sievers, City Attorney, explained that this ordinance makes two changes to the current regulations for panorams: 1) the definition of "control person" is expanded to include managers, which allows them to be left in charge of the business; and 2) the configuration of the panoram booth itself is altered. The change is part of a lawsuit settlement agreed to by Council earlier in the year. Mr. Deis added that the Police Department concurs with the reconfiguration of the booths.
Councilmember Ransom moved approval of Ordinance No. 217. Councilmember Gustafson seconded the motion, which carried unanimously, and Ordinance No. 217 was adopted.
9. CONTINUED PUBLIC COMMENT
(a) Bert Golla, PO Box 55371, Seattle, spoke as President and General Manager of Red Carpet Building Maintenance, Inc. He distributed a copy of his Request for Quotations (RFQ) document, and he protested the City’s decision to rebid the janitorial services contract. He commented that Red Carpet has been providing janitorial services to Shoreline since September 1997 and that it presented the lowest cost and most responsive bid. He felt the bid documents were clear, and there was no doubt that supplies had to be provided by the vendor.
(b) Arne Hedeen, 1221 2nd Avenue #460, Seattle, spoke as Red Carpet’s attorney. He asserted that the decision to rebid the janitorial services contract is illegal, and he asked the Council to review and overturn it. He said Red Carpet has done an outstanding job for the City. He noted that the City was to award the new contract on overall qualifications and not on the basis of the lowest price only. He described the point system used to evaluate the bids, and he contested staff’s assertion that all bidders made numerous calculation errors. He concluded that Red Carpet’s bid is complete and that the City should not have decided to rebid because of a few calculation errors.
(c) Tony Espejo, 11905 59th Avenue W, Mukilteo, supported Red Carpet’s position. After stating his credentials for evaluating the situation, he said the RFQ was time consuming to complete. He felt that the City’s stated right "to cancel any and all bids" was too vague and broad. In his work for King County, any reasons for canceling a bid were stated in the bid document. He said staff might be surprised that a Filipino-American is the only bidder to respond to the RFQ completely and in such detail, but he was not, since Mr. Golla is a practicing Certified Public Accountant and President of the Filipino-American Chamber of Commerce. He felt rebidding would unnecessarily penalize Red Carpet, which spent the time and effort to respond to the RFQ.
(d) Dolores Sibonga, 1767 North Bluff Road, Coupeville, provided her credentials for evaluating this issue. As a former Seattle City Councilmember, she understood that staff wants to deliver the best services possible. However, she asserted that Council is the ultimate decision-maker and that it has a responsibility to ensure a fair, credible process. She asked Council to direct staff to award the bid to Red Carpet.
(e) Sam Blaco, 3434 Cascadia Avenue S, Seattle, was disappointed with the City’s decision to reject all bids. He said Red Carpet should have received the award of the janitorial contract, and he asked Council to review this decision.
(f) Dwayne Wright, 1221 Harbor Avenue SW, Seattle, provided his credentials for evaluating this decision and said State law addresses this situation. He felt there was only one responsive bidder because the other two did not bid on supplies, which was part of the package. He referred to the statute related to "minor informalities," and he said the bid should be awarded to Red Carpet.
(g) Art Ceniza, 21607 48th W, Mountlake Terrace, also supported Red Carpet and urged the Council to do what is right. He said that staff made a big mistake in this case because small business owners look to the government to be fair in its bid process. He urged Council to award the bid to Mr. Golla, a leader in the Filipino-American community, and to restore the faith of small businesses in the process.
MEETING EXTENSION
At 9:55 p.m., Councilmember Hansen moved to extend the meeting until 10:15 p.m. Councilmember Ransom seconded the motion, which carried 7 - 0.
(h) Connie Samson, 610 NW 162nd Street, commented that Mr. Golla has a good record in the Filipino-American community and that his company is well respected. She said rebidding the contract is a waste of time, and the City should concentrate on more important matters. She pointed out that Mr. Golla is a minority contractor, the lowest bidder, and that he has been doing the job for two years without any problems. She said he should therefore receive the contract.
Providing background on how he discovered the confusion in this particular process through reading the staff report, Mr. Deis explained the differences between a bid process and an RFQ. The bid process assumes there is one way to do a job, and price is therefore the primary criterion. An RFQ is a new method that was developed by staff to award this particular contract. It functions like a Request For Proposal, in which various qualitative criteria, as well as price, are considered.
Mr. Deis said when he, the City Attorney, the Finance Director and the Public Works Director started investigating, there was enough confusion among the vendors and on the part of staff that they felt the process should be redone. He pointed out that the City has done many competitive processes over the past four years and that this is the first one to be rejected. He said from a legal standpoint there is more risk in awarding the contract than in rejecting all bids, which is always the right of a municipality.
Mr. Deis said Red Carpet did not offer the lowest price, but neither of the other vendors factored in supplies, which account for 12 to 15 percent of the total cost. He explained that the summary sheet did not refer to the supply detail sheet and that two vendors did not put supplies on the summary sheet. He said the City contributed to this error by not putting a cross-reference to supplies on the summary sheet.
Mr. Deis apologized that poor staff work contributed to the errors and the confusion about the process. He said if the contract is awarded to one vendor, the others could mount a legal challenge. Concluding, he said the City has had an excellent relationship with Red Carpet; its service has been very good, and this action should not be taken as a reflection on Red Carpet. He regretted the time already spent on this process by all the vendors. He concluded that Council passed a three-month extension on the Red Carpet contract earlier in the meeting to provide time for staff to redo the process.
Mr. Sievers explained that one vendor bid lower than Red Carpet and that the City must consider this bid responsive because the vendor responded to all the lines on the summary tally sheet. He reiterated that both of the other bidders were misled by the tally sheet and that both failed to include some supplies and that Red Carpet made errors in calculating labor costs. He said the need to clarify or modify a bid specification is legal grounds for setting aside all bids and rebidding. Acknowledging that both of the other vendors are willing to abide by their bids despite their mistakes, he asserted the concern that a company might cut corners to make up the bid deficit. He said the objectives of bidding are to receive the best value for the public and to provide a fair playing field for the bidders. He asserted that the City wishes to go out for bid again for both reasons.
Reiterating that both of the other vendors have agreed to stand by their bids, Public Works Director Bill Conner said both assert the standard of practice in the industry is for the City to provide the materials. He commented that this misunderstanding indicates "not the best staff work" was done in preparing the quote package. He also noted that the document, which was copied word-for-word from the County, was flawed because in one place it refers to the "best value to the City" and in another to "the best price for the City."
Mayor Jepsen commented that Council needs time to digest what has been presented and to gather all the necessary information.
Councilmember Lee pointed out there was a competitive process when Red Carpet was first awarded the contract. She did not understand why such a complicated process was instituted this time. Mr. Deis responded that staff erred by creating a complicated RFQ process without making sure it was done well.
MEETING EXTENSION
At 10:15 p.m., Councilmember Hansen moved to extend the meeting until 10:30 p.m. Councilmember Ransom seconded the motion, which carried 6 - 1, with Deputy Mayor Montgomery dissenting.
Councilmember Lee expressed her surprise that the other two bidders thought the City would provide the materials. Mr. Conner said the other bidders were national and had no local experience.
Councilmember King had a concern about penalizing Red Carpet because of a staff error. She said Red Carpet followed the rules, and the other bidders did not. She noted that Red Carpet has put out its figures and that another vendor may now undercut them.
Councilmember Gustafson expressed concern about restarting the process, but he said he wanted an opportunity to evaluate all of the documentation before Council makes a recommendation.
Councilmember Hansen agreed with Councilmember King’s comments. However, he said he was not prepared to make a decision because he had not seen the other bid documents.
Councilmember Ransom referred to Red Carpet’s documentation of "man hours," noting that in his experience with federal bidding, the bid process is not reopened for additional information about figures. He commented that the vendor can clarify information, if necessary, and that the City can then make a decision among those who have applied. He said the City should consider only the three vendors who originally responded. He agreed that Council should have all of the information from all three bidders before making a decision.
Councilmember Hansen thought the decision should be between the low bidder and Red Carpet. Assuming the information before him was correct, he recommended not considering a rebid by the third bidder.
Mayor Jepsen stated that he and the Deputy Mayor will work with the City Manager and then get back to Council and the vendors.
10. ADJOURNMENT
At 10:20 p.m., Mayor Jepsen declared the meeting adjourned.
_______________________________
Sharon Mattioli, CMC
City Clerk