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HomeMy WebLinkAbout2014-12-01 City Council Minutes Approved City Council Minutes—December 1, 2014 At 7:00 p.m. Mayor Laurie Gere called the regularly scheduled Anacortes City Council meeting of December 1, 2014 to order. Councilmembers Eric Johnson, Ryan Walters, Erica Pickett, Brad Adams, Liz Lovelett, John Archibald and Matt Miller were present. The assembly joined in the Pledge of Allegiance. Citizen Hearings No one present wished to speak. Mayor/Council Communication and Committee Reports Mayor Gere introduced Anacortes High School Senior Mackenzie Hallas who had chosen the Mayor and City of Anacortes as the topic of her Senior Project. Mayor Gere encouraged the public to shop in downtown Anacortes during the holiday season and advised that the sidewalk repair between 7th and 8th Streets would be completed on December 5. She announced the dates for upcoming holiday events including Breakfast with Santa, the Christmas parade, and the blessing of the fleet. Ms. Pickett reported from the Port/City Liaison meeting on held November 4, 2014. She announced that the Port and the Parks Department were talking with the small boat center about a maintenance facility for small boats, that the cruise ship would make 24 visits to Anacortes next year starting in April, that Cap Sante Marina had more visitor nights than Roche Harbor last summer, that Port tenant Pacific Dream Seafoods was shipping crab overseas, and that that dredging the north end of the Cap Sante Marina would begin in 2016. She pointed out the new fire alarms being installed in City Hall. Ms. Pickett reported from the Georgetown University Energy Prize Committee. She praised Facilities Manager Russ Pittis for compiling the initial application which won Anacortes a slot in the semi-finals of the competition with 51 other cities. She said the committee then compiled and submitted a more detailed plan and was awaiting the news about the$5M prize early in 2016. Ms. Lovelett referenced national response to what happened in Ferguson and urged people to challenge their biases, seek news from different sources, and reflect on how communities are affected. Mr. Johnson announced that the Salvation Army opened a seasonal cold weather shelter over the weekend and invited community members to contact the Salvation Army if they were interested in volunteering at the shelter. Mr. Miller said that 50% of every dollar spent at a locally owned business stays in town compared to only 10-15% of expenditures at non-locally owned businesses. Mr. Walters reported from the Planning Committee which met earlier in the evening and discussed the new Cap Sante Café coming near the existing Anthony's restaurant, the planned Dakota Creek office building, incentivizing solar photovoltaic, the south Commercial Avenue enhancement project being discussed by the Community Advisory Committee, and a new timeline and process for the Capital Facilities Plan in 2015. Mr. Walters reported that the Lodging Tax Advisory Committee would meet on December 4, 2014 at 4:00 p.m. at the Chamber of Commerce office and hoped to iron out the details of the Chamber contract and bring it back to Council for action. Consent Agenda Mr. Johnson moved, seconded by Mr. Adams, to approve the following Consent Agenda items. Vote: Ayes—Johnson, Walters, Pickett, Adams, Lovelett, Archibald and Miller. Motion carried. Anacortes City Council Minutes December 1, 2014 1 Approval of Vouchers/Cancellation of Checks Council voted unanimously that the following vouchers/checks audited and certified by the City's Auditing Officer(Finance Director) and subsequently reviewed and approved by the Council Finance Committee on November 19, 2014 and November 25, 2014 are approved for payment as of December 1, 2014. Claims Check Numbers 74494 through 74641 in the total amount of$751,675.77 EFT Numbers 74489 through 74493 in the total amount of$12,178.44 Pre-Written Claims Check Numbers 74487 through 74488 in the total amount of$9,679.65 Payroll for November 20, 2014 in the total amount of$609,916.93 Check Numbers 40084 through 40106 in the total amount of$20,066.88 Direct Deposit Numbers from 56401 through 56598 in the total amount of$361,498.80 EFT Numbers from 1736 through 1740 in the total amount of$228,351.25 Cancelled Checks Check Number 74422 in the amount of$75.00 Check Number 74355 in the amount of$2,818.91 In the same motion Council: approved the minutes of November 17, 2014 and November 24, 2014 as if read; accepted as complete the 34th Street Paving Project with Lakeside Industries, Inc.; and approved the Street Fair Application for the Lions Christmas Parade on December 6, 2014. OLD BUSINESS Water Utility: Three Million Gallon Tank Construction and Funding Public Works Director Fred Buckenmeyer reported that during recent high water levels on the Skagit River the new water treatment plant performed very well, requiring no special staffing and experiencing no flooding within the plant in spite of flooding on surrounding properties. Mr. Buckenmeyer distributed his speaking notes for the evening following up on the November 24, 2014 study session discussion of the topic and subsequent questions raised by councilmembers. He then elaborated on a number of points including the alternative methods to fund capital projects (borrowing vs. using capital reserves), the decreasing opportunities for low interest loans for public utilities, and Mayor Gere's support for water rates that will build up a healthy reserve and allow longer range planning for capital projects. He reported that Skagit PUD is increasing its water rates 8% in 2015 to build capital reserves. Mr. Buckenmeyer advised that the 3MG tank project needs to proceed promptly and he recommended developing a funding strategy to complete that project in the very near future while also working on a rate structure to accomplish the longer range funding goals. Mr. Buckenmeyer addressed councilmember requests for a tiered rate structure and water conservation incentives by suggesting that the water conservation program update due for summer of 2015 would be the opportune time to develop such a strategy. He responded to councilmember requests for longer range capital planning by explaining why water rates are most commonly set using a 6-10 year forecast even though projects may be envisioned for a 20-year planning cycle. Mr. Buckenmeyer explained the timing of the 3MG tank project which was both operationally and financially inadvisable until the present. He observed that comments he had received to date had favored minimizing interest costs and increasing water rates less than initially proposed and that some comments even urged funding the project entirely out of the General Fund. Mr. Buckenmeyer said that after further discussions with the mayor, staff proposed funding a substantial amount of the project from General Fund reserves. He requested Council feedback on that idea. Mr. Buckenmeyer noted that the Anacortes ratepayers had built up the General Fund reserve. Anacortes City Council Minutes December 1, 2014 2 Mayor Gere asked Finance Director Steve Hoglund to share his perspective. Mr. Hoglund advised that for decades the water utility had followed a philosophy of borrowing via revenue bonds when a capital project came up rather than building a capital fund ahead of time. Mr. Hoglund said neither method was more correct than the other but that he liked the idea of shifting to building a capital reserve. He acknowledged that building a capital reserve would take time but called it a smart way to do business. Mr. Hoglund added that there is no statutory prohibition against using the General Fund to support the utilities but that General Fund revenues come from property, utility and sales taxes not rates. He observed that General Fund tax revenue is generally thought of as being for basic services whereas charges for services in the utility funds are for running those utilities. He urged caution in making a decision to use General Fund revenue or reserves to support the utilities because the City can raise utility rates but it can't raise tax rates. Ms. Pickett said she had understood that the General Fund would loan cash to the Water Fund for the tank project, not gift it. Mr. Hoglund said that an interfund load was what had been proposed at the November 24 study session but either way was possible and legal. Mayor Gere characterized the distinction as a policy question. Mr. Walters discourage spending General Fund reserves on the water utility, noting that the water utility has its own revenue stream and can raise money via rates but the General Fund doesn't have the same ability to raise money for non-utility needs. He argued that the General Fund reserve should be spent but that it should be spent on general services, not on the water utility. Mr. Walters said borrowing money was appropriate for very large capital projects but that the utility should be able to save up capital reserves for a $5M project ahead of time. He encouraged funding the 3MG tank project with a Drinking Water State Revolving Fund (DWSRF) loan which has very favorable terms. Mr. Adams reported that he had attended an AWC conference session in June on this topic and the cities there all preferred to fund capital projects out of designated reserves rather than borrowing. He observed that the General Fund has a healthy reserve fund and urged using that money directly to fund the 3MG tank project rather than using an interfund loan. Mr. Johnson supported planning and saving ahead for capital projects. He requested a comprehensive list of upcoming capital projects and cautioned against spending a major portion of the City's cash reserves on one project without planning for future projects. He requested a copy of the updated CIP to help make funding decisions. Mr. Johnson suggested that capital projects should be managed as the City manages its Equipment Rental Fund 501 which builds replacement reserves for each vehicle each year. He supported funding the 3MG tank project largely out of General Fund reserves with some funding from other sources as well. Mr. Archibald urged taking the same approach as Council recently adopted to fund street maintenance, using some reserve funds in combination with other creative ideas. He discouraged increasing water rates. Mr. Miller said he had opposed using reserves but had become more open to using reserve funds for part of the cost along with a loan or some other funding mechanism. He opposed raising water rates 40%. He said the City needs a capital plan that looks out farther than six years to make decisions about using reserves or taking on loans. Ms. Pickett observed that the City has traditionally viewed the utility enterprise funds as paying their own way and had never subsidized them with general fund taxes. She opposed doing so now. She said she would favor an interfund loan from the General Fund but opposed a subsidy. Ms. Lovelett urged discussion about what water rate structure was appropriate to build a capital reserve to handle projected capital expenditures. She said an $8 increase per household isn't very much but for businesses with high meter equivalents (MEQ) it's a big chunk of change. She asked Mr. Buckenmeyer to explore the option of building a new 100-year 3MG tank on the adjacent cemetery property, then later refurbishing the existing 3MG tank, to achieve true redundancy in that part of the water system. Anacortes City Council Minutes December 1, 2014 3 Mayor Gere invited the public to comment on the topic. No one present wished to speak. Mr. Adams said he would like to hear from the public because the reserve fund under discussion belongs to the citizens and Council needs to know if the community prefers higher rates or spending savings. Mayor Gere observed that the General Fund has a healthy reserve but the utilities don't and asked if the utility rates have been too low or if the utility reserves had been spent on other projects. Mr. Buckenmeyer said that the bulk of the water utility reserve fund, approximately$3M, had been used for a part of the design of the new Water Treatment Plant and an administrative decision was made at that time not to replenish the retail system reserve fund during bonding for the new water treatment plant. Mayor Gere said that the discussion would continue after the first of the year. Sharpes Corner Business Park Wetlands Report Planning Director Don Measamer recalled that at its October 20, 2014 meeting City Council had directed staff to pursue a critical areas report for the City's Sharpes Corner business park. Mr. Measamer advised that the estimated cost for the report had come back higher than anticipated, closer to$11,600. He said that amount was not included in the 2015 budget. Mr. Measamer asked if Council wanted staff to proceed with the report. He said it would be important to know the extent of the wetlands, buffers and actual buildable area. Council discussed that such information would be important to help determine the value of the property, either for lease or sale, prior to an appraisal. Mr. Measamer asked if there was consensus to continue. Mr. Archibald asked if Mr. Meagher was still on contract. Mr. Measamer replied that funds remained on Mr. Meagher's current contract and that he would like to have Mr. Meagher use the critical areas report to help determine the value of the property for various purposes. Mr.Archibald asked if there might be some other way to accomplish the same end more economically. Mr. Measamer said he could present the critical areas report to Council when completed and take direction at that time. Councilmembers generally concurred that staff should proceed to obtain the critical areas report. Mayor Gere invited the public to comment on the topic. Wailen Bennett, 2202 21 st Street, spoke as a potential buyer. He suggested that if the property was going to be sold or leased, it could be put it out on the market without spending more money on studies because any buyer would do its own due diligence anyway. Mr. Walters agreed but said the City would need to know that information itself in case it wanted to divide the property. NEW BUSINESS Ordinance 2936: Adopting Amended Capital Facilities Plan 2015-2020 Finance Director Steve Hoglund presented an ordinance adopting a revised Capital Facilities Plan (CFP) following adoption of the 2015 budget. He reminded Council that the budget includes approximately $200,000 to retrofit street lights with more efficient LED lighting. That project was not included in the 2015-2020 CFP adopted by Ordinance 2930 but could be funded with REET if were included in the CFP, hence the amended CFP added that item. The revised CFP also added a 36" Finished Water Line Meter at the water treatment plant which had been inadvertently left out of the 2015-2020 CFP but was included in the 2015 budget. Mr. Walters asked how much REET was on hand. Mr. Hoglund said he anticipated the City would finish 2014 with approximately$1 M of REET on hand, had budgeted to use approximately$800K of REET in 2015, and had received close to$600K in REET during 2014. Mr. Johnson moved, seconded by Mr. Miller, to adopt Ordinance 2936 adopting the revised Capital Facilities Plan for 2015-2020 and repealing Ordinance 2930. Mayor Gere invited the public to comment on this topic. No one present wished to speak. Vote: Ayes—Walters, Pickett, Adams, Lovelett, Archibald, Miller and Johnson. Motion carried. Anacortes City Council Minutes December 1, 2014 4 Exercise Grant of Option Udd Property Parks and Recreation Director Gary Robinson asked for Council direction on whether to exercise the grant of option to purchase 20 acres on the south side of Mt. Erie from the Udd family. He reminded Council that when the City entered into the agreement in February 2014 it intended to use $130,000 of rock quarry funds from Fund 113 and solicit donations to cover the other half of the estimated $260,000 total cost including fees. Mr. Robinson advised that the City had to exercise the option by the end of 2014 to complete the transaction. He reported that the City would have made payments towards the property totaling $120,000 by the end of 2014, had raised approximately$60,000 of donations so far and that staff was optimistic that the remainder could be raised shortly. He recommended exercising the option to purchase the property and said that any shortfall in donations would come from the quarry fund. Mr. Adams asked the balance of and constraints on the quarry fund. Mr. Robinson replied that the City receives $50,000 per year from the quarry contract and has received about$600,000 so far; he estimated the contract would eventually generate nearly$1.5M in revenue. He added that the quarry revenue can be used for forestland purposes including property acquisition. Mayor Gere invited the public to comment on this topic. Tom Glade, 210 Mansfield Court, supported using quarry funds to conclude the property purchase. Ms. Pickett moved, seconded by Ms. Lovelett, to exercise the option to purchase the Udd property. Vote: Ayes— Pickett, Adams, Lovelett, Archibald, Miller, Johnson and Walters. Motion carried. At approximately 8:10 p.m. Mayor Gere called a five minute recess. At approximately 8:15 p.m. the mayor called the meeting back to order. City Attorney Brad Furlong advised that he would work with staff to provide notice of the intent to purchase the Udd property, pursuant to the grant of option, such that the sale would close in January, 2015. Encroachment Agreement Appeal, 616 I Avenue Ms. Pickett advised that she was a personal friend of the appellant so recused herself from the matter and left the room. Mr. Walters advised that he had received multiple emails regarding the matter prior to the filing of the appeal, had driven by the site and seen things on the ground that were not in the packet, but had formed no opinion on the appeal. Mayor Gere asked if anyone objected to Mr. Walters participating in the decision. No one present objected. Mr. Buckenmeyer presented an encroachment permit appeal for 616 I Avenue. He described the administrative process for applying for, granting and appealing encroachments allowed by the Anacortes Municipal Code and provided some examples. Mr. Buckenmeyer advised that property owners Carlos and Barbara Aguero residing at 616 I Avenue applied for and were granted an encroachment permit and that an appeal was timely filed by Boshie Morris residing at 1618 7th Street. Mr. Buckenmeyer said the appeal centered on the concern that future road right of way improvements might be precluded by the encroachment. Mr. Buckenmeyer said staff recommended denial of the appeal, explaining that granting the encroachment would not impair the City's ability to construct future road improvements. He added that all encroachment permits are temporary and can be revoked by the City at any time so no future improvements would be prevented. Mayor Gere invited the public to comment on this topic. Appellant Boshie Morris, 1618 7th Street, said it took her a long time to decide to appeal this permit in her neighborhood but that it was warranted by mitigating circumstances. She said I Avenue is a major feeder to the Guemes ferry, has a history of problems with ferry traffic and parking and with speeding. She said there is little in the way of sidewalks in this older section of town but that many homes are being redeveloped there. She said space needs to be secured for future sidewalks now and expressed concern that once a fence is cemented into the ground it is not perceived as temporary. Ms. Morris urged Anacortes City Council Minutes December 1, 2014 5 improving the street to handle the ferry traffic and provide safe pedestrian access to Kiwanis Waterfront Park and the Guemes Channel Trail. She suggested it might be appropriate to permit a portion of the encroachment to allow the applicant a bigger front yard, perhaps ten feet, but that fifteen feet was pre- emptive of needed public improvements. Applicant Carlos Aguero, 616 I Avenue, said he was aware that the property inside the encroachment remained the City's property. He said the fence would be built to code unlike many in the neighborhood. Mr. Aguero said that if the City put a sidewalk in he would take out the fence and knew that was his responsibility. William Chagnon, builder for the applicant, said that the fence only encroaches 11 feet on City property. He said the design would be an enhancement to the neighborhood and that the applicant filled in the existing swale so foot traffic and on street parking are improved. Ms. Morris asked for clarification on how much right of way was being asked for by the applicant. Mr. Buckenmeyer referred to the map in the Council packet and said the encroachment was 11.8 feet on the south end of the lot and 14 feet on the north end. Councilmembers confirmed with Mr. Buckenmeyer that fences are allowed in encroachments and must be taken down if the City revokes the encroachment. Mr. Walters asked when an encroachment would ever be denied. Mr. Buckenmeyer replied that denials usually involve a utility conflict. Mr. Archibald observed that encroachment permits allow private citizens to fence City property for a $100 permit application fee and asked why such land would not be sold instead. Mr. Buckenmeyer explained the difference between an encroachment and a vacation. He said staff does not encourage vacating public right of way and that there were no conflicting improvements foreseen for I Avenue currently but that the encroachment preserved the City's options in the future. Mr. Walters agreed with the appellant on the need for planning and constructing street improvements in the neighborhood but said there was no rationale in the code for denying the encroachment or granting the appeal and underscored that the fence was legally a temporary structure. Mr. Archibald objected to effectively giving 572 SF of City property to a private citizen. Mr. Johnson moved, seconded by Mr. Miller, to deny the appeal. Vote: Ayes—Adams, Archibald, Miller, Johnson and Walters. Nays—Lovelett. Motion carried. Ms. Pickett rejoined the proceedings. Street Light LED Conversion Authorizations, Phases 1 through 5 Mr. Buckenmeyer requested Council approval of agreements with Puget Sound Energy Intolight Lighting Services to replace 1002 high pressure sodium street lights with dark sky compliant LED street lights. He advised that the LED lights would save the City over$50,000 per year in energy costs at current electricity prices so the total cost of$205,026.31 would be paid back in under four years. Mr. Buckenmeyer said the project had been budgeted for 2015 and would be performed and paid for in 2015 but he recommended authorizing the mayor to execute the contract as soon as possible in order to get on PSE's schedule for the work. Mr. Miller endorsed the energy savings but encouraged obtaining a warranty on the LED bulbs. Mr. Walters clarified that PSE would continue to own and service the street lights and the City was only paying for the change out. Mr. Buckenmeyer said the project would take about six months to complete. Ms. Lovelett moved, seconded by Mr. Archibald, to authorize the mayor to execute the contract with Intolight Lighting Services in the amount of$205,026.31. Vote: Ayes— Lovelett, Archibald, Miller, Johnson, Walters, Pickett and Adams. Motion carried. Change Order: Guemes Channel Trail Phase VII Construction (13-016-TRN-002) Mr. Buckenmeyer requested Council approval of a change order to the Guemes Channel Trail Segment VII contract with Strandberg Excavation & Commercial Construction. He reported that the project was currently under construction from the east end. Mr. Buckenmeyer advised that the Army Corps of Engineers permit for the project had changed the project design to include more vertical and horizontal Anacortes City Council Minutes December 1, 2014 6 relief, more shore work and other factors that made the project more expensive to construct. He presented the negotiated change order price of$179,270 and observed that even with the change order the new total contract price of$774,383 was still in the range of bids received for the original project design. Mr. Adams asked how the change would be financed. Mr. Buckenmeyer said the Department of Commerce grant would cover much of it but REET, park impact fees and Park Foundation donations would also be used. Mr. Johnson moved, seconded by Ms. Pickett, to authorize the change order to the Guemes Channel Trail contract with Strandberg Excavation & Commercial Construction in the amount of$179,270. Vote: Ayes—Archibald, Miller, Johnson, Walters, Pickett, Adams and Lovelett. Motion carried. There being no further business, at approximately 8:55 p.m. the regularly scheduled Anacortes City Council meeting of December 1, 2014 was adjourned. Anacortes City Council Minutes December 1, 2014 7