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HomeMy WebLinkAbout2014-03-24 City Council Minutes Approved OS�Y Off` e.yCp City Council Study Session Minutes— March 24, 2014 At approximately 7:00 p.m. Mayor Laurie Gere called the regularly scheduled Anacortes City Council study session of March 24, 2014 to order. Roll call found present City Councilmembers Eric Johnson, Ryan Walters, Erica Pickett, Brad Adams, Liz Lovelett, John Archibald and Matt Miller. Early Learning Public Library Partnership Interlocal Agreement Library Director Sheri Miklaski presented a proposed Interlocal Agreement for Early Learning Public Library Partnership. Ms. Miklaski provided some background on the early learning movement state and nationwide and described the ELPLP formed in Washington in 2007 to work with state agencies on early learning. She described research on the efficacy of public library story time programs on early learning. Ms. Miklaski said that 29 library systems in the state already belong to the Partnership, including all but three library systems in the northwest region, and added that Anacortes would have an easier time finding resources about early learning including grant opportunities by joining the Partnership. Ms. Miklaski said annual Partnership dues, which are based on a percentage of library budget, would be $320 per year for Anacortes and would be paid by the Anacortes Library Foundation for 2014. She said the proposed agreement had been presented to the Library Board in February and that the Board had voted at its March 18 meeting in favor of signing the agreement. Mrs. Pickett said it was a fabulous idea and that there was no better investment than early learning. Mr. Walters observed that foundations usually fund things the City can't fund and suggested paying the dues out of the regular City budget even if a budget amendment were required. Mr. Johnson observed that the City pays dues in similar amounts for a number of department heads to belong to professional organizations and called the ELPLP dues money well spent. Mayor Gere and other councilmembers agreed. Pavement Management Plan Public Works Director Fred Buckenmeyer presented staff's recommendations for pavement management in Anacortes. He thanked City Engineer Eric Shjarback, Finance Director Steve Hoglund and Senior Accountant Philip Steffen for their assistance in developing the plan. Mr. Buckenmeyer observed that pavement management was one of the top priorities identified in Mayor Gere's Listening Tour. He suggested that members of the public be allowed to comment at the end of the evening's presentation. Mr. Buckenmeyer described the widespread prevalence of deteriorated pavement around the state and nation and the diminishing federal funding for local roads. He then addressed priorities and strategies, the pavement rating report prepared by the City's consultant, existing funding levels for street maintenance and future funding possibilities. Mr. Buckenmeyer described the standard classification of street types which are defined by traffic flow and identified which Anacortes streets fall into each category. He reminded that SR20 is maintained by the State Dept. of Transportation so was not included in the analysis and funding projections. Mr. Buckenmeyer said staff's first priority is the arterial street system which has the most traffic, carries the most freight, drives commerce and retail activity, and bears the heaviest loads. The next priorities would be collector streets, then local streets. He noted that citizens are often most aware of and concerned about their own residential streets but actually spend most of their time on arterials. City Engineer Eric Shjarback recapped the Pavement Management Program report prepared by Capitol Asset& Pavement Services, Inc. and presented in greater detail by the consultant at the January 13, 2014 study session. Mr. Shjarback summarized the Pavement Condition Index (PCI)from the plan, which showed an average PCI of 64 in Anacortes compared to an average of 76 for Washington cities of the same size. He displayed a pavement deterioration curve that predicts when pavement will deteriorate and when investment in infrastructure maintenance is most effective for long term quality at least cost. Mr. Shjarback described how regular investment in basic M&R can prevent extremely costly interventions in the future. He cited the current paving project on Q Avenue and provided comparative pricing for the worst and best portions of that corridor. Anacortes City Council Study Session Minutes March 24, 2014 1 Mr. Buckenmeyer next addressed funding levels. He recapped the amount of money the City spent on street overlays in the last seven years including the 2009-2011 hiatus in funding during the economic downturn and said the annual average was $105,000 over the past seven years. He noted that during the same time the City received $4.8M of grants for street improvements but none of that could be used for street maintenance. Mr. Buckenmeyer then presented a graphic showing the projected effect on the City's average PCI of eight different potential funding levels for pavement management moving forward. Mr. Buckenmeyer proposed formation of an Anacortes Transportation Benefit District (TBD)which would create a taxing district specifically for transportation improvements with the mayor and City Council serving as its governing body. He described the TBD enabling legislation enacted in 2007 and said most Washington cities began implementing TBDs in 2009 including neighboring Bellingham, Ferndale, Lynden, Stanwood and Arlington. He said TBDs can levy three different types of taxes: property tax, up to 0.2% sales and use tax, and up to $100 annual vehicle fees but most levy only one kind of tax and that the five neighboring TBAs have all used a .2% sales and use tax. He added that 34 Washington TBDs have enacted the vehicle registration option and 24 have enacted the sales and use tax option. Mr. Buckenmeyer provided additional detail on the vehicle registration (car tab)option which allows Council to impose up to $20 tab fees without voter approval, and up to $100 with voter approval. Mr. Buckenmeyer said there are over 14,000 registered vehicles in Anacortes now and said the funding projections are based on 15,000 as a good estimate for the next ten years. Mr. Buckenmeyer then presented spreadsheets summarizing four different 8-year funding scenarios for an Anacortes TBD beginning with the 2015 budget year. Scenario 1 would dedicate $100,000 of property tax to streets in 2015 and increase that 1% each year until 2019 when the public safety building is paid off, then redirect that portion of sales tax to streets as well; dedicate $100,000 of sales tax to streets in 2015 and increase that by 2% each year; dedicate $250,000 of Real Estate Excise Tax (REET)to streets in 2015 and increase that by 2% each year; dedicate $150,000 of the prilled sulfur mitigation payments from the Port of Anacortes each year to streets; and dedicate $300,000 of new car tab revenue each year (15,000 vehicles at$20/vehicle). He said Scenario 1 would dedicate an average of about$1 M per year to streets and would improve all minor arterials and a few collectors up to a PCI of 84 but would allow no investment on local streets. Mr. Buckenmeyer next presented Scenario 2, identical to Scenario 1 but with $100/vehicle car tabs (voter approved) instead of$20 tabs. He said this scenario would raise approximately$2.3M per year for streets and would improve all minor arterials and collectors and allow some work on local residential streets. Mr. Buckenmeyer briefly addressed sales tax but said that a .02% sales and use tax for the TBD would have to be voter approved and would not generate sufficient revenue for the projected capital needs. He said this option is more commonly used in cities whose TBD has a large retail sales tax base including many shoppers from out of area. Mr. Buckenmeyer then presented two more funding scenarios, each involving property tax. Scenario 3 calls for a straight property tax increase of$1.56/$1000 of assessed value for ten years which would raise an estimated $4.8M per year and would get all Anacortes streets up to a PCI of 76 (the statewide average) in ten years. He observed that the current millage rate is $1.75/$1000 so this scenario would nearly double current property taxes and would equate to an additional $50/month for a $373,000 home. Scenario 4 calls for$60M general obligation bond issue which would require a property tax increase of $2.38/$1000 for ten years or an additional $74/month for a $373,000 home. Mr. Buckenmeyer said this scenario would get all Anacortes streets up to a PCI of 85 in ten years which would then be affordable to maintain. Mr. Buckenmeyer added that the City would still have to fund other types of street capital improvements such as safety projects, access projects, widening projects, and the necessary work to upgrade utilities beneath each street before it is paved and that these costs were not included in the projections. Anacortes City Council Study Session Minutes March 24, 2014 2 Mr. Buckenmeyer said at an April Council meeting he would present an ordinance to form the TBD, would solicit input on whether that ordinance should specify a funding mechanism, suggest that Council hold a public hearing, and then present a resolution to authorize the mayor to enact whichever funding scenario is selected. He urged a voter-authorized scenario in order to raise enough funds to make significant, visible improvements and meet voter expectations. At approximately 7:56 p.m. Mayor Gere invited the audience to address questions to Mr. Buckenmeyer. Frank Spargo, 1408 11th Street, said the City should have a plan of how to spend the money before discussing how to raise it. He asked which streets would be addressed and what the spending plan would be. Mr. Spargo asked to have Mr. Buckenmeyer's presentation made available on line. No other members of the public wished to speak. Council then discussed the presentation with Mr. Buckenmeyer. Mr. Adams asked if only one funding mechanism can be selected or more than one. Mr. Buckenmeyer said a TBD can use more than one mechanism but none have. Ms. Lovelett asked how the scenarios can dedicate existing property tax and sales tax revenue streams to streets without impacting other City programs. Mr. Buckenmeyer said the scenarios are based on projected revenue streams. Finance Director Steve Hoglund said these optimistic revenue projections are based on 2013 during which the general fund showed a positive balance, assuming economic recovery and increased revenue. Mr. Miller asked why streets can't be funded with current revenue streams, noting there was $400K in the budget for street maintenance in 2013 and $140,000 for overlays. He asked why staff is prioritizing minor arterials and requested the average PCI for minor arterials vs. collectors, etc. He suggested expressing the cost of pavement rehabilitation in terms of cost per mile rather than per square yard. Mr. Johnson asked which funding mechanism Arlington used for its TBD, how much money it expected to raise and how it would be spent. He asked about the Pavement Deterioration Curve Mr. Shjarback had displayed, noting that Scenario 4 was projected to bring Anacortes streets back to PCI of 76 so that $1 M/year would maintain it. He asked why not bring the pavement up to a PCI of 85 instead of 76. Mr. Walters said it would be beneficial to have packet materials for presentations like this one. He asked the benefit of adopting a TBD without specifying a funding source. Mr. Buckenmeyer said there wasn't one. Mr. Walters asked that each scenario include the PCI that would be achieved for the streets that were treated. He asked the annual maintenance cost after rehabilitating streets to the levels in Scenarios 3 and 4. Mr. Buckenmeyer said many variables affect maintenance cost but that the scenarios are all based on $1 M/year for maintenance and said different categories of streets have different deterioration rates and maintenance costs. Mr. Walters said all the streets should be brought up to at least the state average but should be brought up to a higher PCI if it is then more cost effective to maintain them. Mr. Walters asked how quickly streets will degrade after rehabilitation. Mr. Buckenmeyer said it will require more data over time to predict that. Mr. Shjarback estimated a cost of$15,000 to have the consultant come back and re-evaluate the streets after some rehabilitation. Mr. Buckenmeyer clarified that an Anacortes TBD could not be used for public transit. Mr. Walters requested a formal written strategy adopted by resolution to guide future councils and promote a funding scenario to the voters. Mr. Adams requested more information to consider and to educate voters. Mr. Buckenmeyer said Council can vote to form the TBD and enact$20 vehicle tabs, then adjust the funding mechanisms in the future with voter approval. Ms. Lovelett observed that the school district will be going to the voters with a bond issue in the next year or two so timing will be sensitive. She expressed concern that$100 tabs would be hard on low income families and asked Council to keep that in mind. Anacortes City Council Study Session Minutes March 24, 2014 3 Mr. Johnson asked if undergrounding electric wiring as part of paving projects could be considered in some areas, such as downtown, and asked if PSE might help pay for that. Mr. Walters said that would be of value to his constituents. Mr. Walters said he did not want to adopt a TBD without specifying a funding mechanism. He said Council could hold a public hearing on whatever funding mechanism is proposed and perhaps on larger funding questions as well. He asked if Scenario 4 could bond for longer than 10 years. Mr. Buckenmeyer said yes but that would involve higher financing costs and would divert TBD funding from ongoing maintenance. Mr. Johnson asked which streets would be addressed with $20 car tabs only. Mr. Buckenmeyer said staff would start on minor arterials and then work on collectors but said at that level of funding it might take two years to raise enough just to rehabilitate the D/A Avenue corridor. Mr. Walters said Council needs to know how much more expensive the street rehabilitation will get each year that maintenance and rehabilitation are put off. Mr. Miller suggested that the Q/R Avenue pricing presented by Mr. Shjarback gives an idea of how much it costs to rehabilitate streets at varying levels of deterioration and said that's the level of detail Council needs to determine the best funding mechanism. Mayor Gere asked Mr. Buckenmeyer to put his presentation and the Capitol Assets report on the City website. Mr. Walters asked that all documents relating to pavement management be posted to one page. There being no further business, at approximately 8:30 p.m. the regularly scheduled Anacortes City Council study session of March 24, 2014 adjourned. Anacortes City Council Study Session Minutes March 24, 2014 4