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HomeMy WebLinkAbout2014-05-05 City Council Minutes Approved City Council Minutes—May 5, 2014 At 7:00 p.m. Mayor Laurie Gere called the regularly scheduled Anacortes City Council meeting of May 5, 2014 to order. Roll call found present: Eric Johnson, Ryan Walters, Erica Pickett, Brad Adams, Liz Lovelett, John Archibald and Matt Miller. The assembly joined in the Pledge of Allegiance. Mayor Gere removed the Executive Session and New Business Item 8a from the agenda. She advised that the Samish Indian Nation Service Agreement Presentation would follow in the next couple of weeks. Citizen Hearings Carolyn Gastellum, 14451 Ashley Place, spoke regarding Shell Refinery's crude-by-rail project. Ms. Gastellum said the project would transport highly volatile Bakken crude oil through sensitive areas to the refinery. She said she was concerned about the sudden increase in oil by rail terminals in Washington and Oregon. She said when trains explode and derail, such as the prior week in Virginia, all emergency responders can do is evacuate the area. She said Skagit County and Washington State are unprepared to handle oil train explosions. Ms. Gastellum said Seattle recently voted 9-0 to ask the state to impose a moratorium on oil terminal permitting and that Port of Portland had unilaterally rejected new oil by rail terminals due to lack of information about environmental impacts and physical safety. She said in November the Washington Shorelines Hearings Board reversed permits to two crude oil shipping terminals in Grays Harbor for failure to address public safety and environmental issues. In contrast, she said Skagit County issued a MDNS for two of the permits Shell is seeking. She called that fast tracking and said the County deadline for public comments is Friday, May 9. She acknowledged that the City has no permitting authority in this matter but requested that Council consider calling for a moratorium on all oil-by-rail permitting until rigorous environmental and safety analyses are conducted, and that it ask the County to extend the public comment deadline for the two permits for which it issued an MDNS. Ms. Gastellum provided some additional literature on the issue to Interim Planning Director Don Measamer to share with the Council. Betty Carteret, 14786 Entner Lane, representing Friends of Skagit Beaches, thanked the mayor for declaring May to be Puget Sound Starts Here month. Ms. Carteret said Anacortes is lucky to have many wonderful marine resources critical to the local and state economy and thanked Mrs. Pickett for helping to promote the event. Mayor/Council Communication and Committee Reports Proclamation of Puget Sound Starts Here Month: Mayor Gere read a statement proclaiming May 2014 to be Puget Sound Starts Here Month and urged all citizens to take responsibility for their part in protecting and improving the health of Puget Sound for future generations by participating in a local volunteer cleanup or restoration project and adopting at least one Sound-healthy behavior to help restore and protect Puget Sound and local waterways. Mayor Gere invited any other members of the audience who had not signed up to do so to speak. Tom Glade, 210 Mansfield Court, representing Evergreen Islands, shared media photos from oil train accidents during 2013 and 2014 including Parkers Prairie, Minnesota on March 18, 2013; Lac-Megantic, Quebec on July 6, 2013; Landis, Saskatchewan on September 25, 2013; Aliceville, Alabama in November, 2013; Casselton, North Dakota on December 30, 2013; Philadelphia, Pennsylvania in January; and Lynchburg, Virginia on April 30, 2014. Mr. Glade said this oil is more volatile and more explosive than the crude oils the refineries have been using. He called for strong governmental oversight to prevent these disasters and asked Council to ask for more review of these trains. Mr. Miller reported from the Public Safety Committee that he and Ms. Schuh attended Fire Ops 101 the week before. He said this was by far better than the Navy firefighting training he had attended previously. Mr. Miller said firefighting is time critical, highly technical and labor intensive. Anacortes City Council Minutes May 5, 2014 1 Mr. Archibald said he was not at the April 28, 2014 study session for the Transportation Benefit District discussion but noted that it had been reported at that meeting that in 1998 Anacortes streets had an average Pavement Condition Index (PCI)of 68 and that had only fallen to 64 by 2013 so it appeared the roads were standing up pretty well. He urged Council to look at what really needs to be done when considering asking the voters for money to pay for streets. Mr. Archibald also requested making study sessions more informal, more of a round table format, sooner rather than later and asked his colleagues if they agreed. Councilmembers generally nodded. Mayor Gere observed that the study session agendas have been very full lately due to the amount of work the Council needs to accomplish but that when that is caught up Council could delve into issues more deeply at single-issue study sessions. Mr. Archibald clarified that his request was about the format of the meetings, not the items on the agenda. Mr. Walters reported from the Planning Committee which met earlier in the evening to discuss the schedule for the 2016 Comprehensive Plan Update and the associated Makers contract, the possibility of making a "parklet"to turn on street parking spaces in the CBD into mini seating spaces, the schedule for the Capital Facilities Plan, the Willette Business Park, staff hiring in the Planning Department, marijuana regulations currently working through the Planning Commission, and commercial and neighborhood parking regulations soon to come back before Council. Ms. Pickett reported from the Community Emergency Response Team (CERT)training she attended on Saturday led by Rick Wallace where community volunteers were trained how to respond to an earthquake. She said she was very impressed with the training. Mr. Adams reported that the weekly Farmer's Market resumes on Saturday and that the summer event season is beginning. Mayor Gere added that the Town Crier would open the Farmer's Market at 9:00 a.m. on Saturday. In response to citizen comments earlier in the evening Mr. Walters reported that he, Mr. Johnson, Ms. Lovelett and Mayor Gere attended a session with Congressman Rick Larsen earlier in the year about oil train safety and that he and Ms. Lovelett had signed a joint letter to the Legislature asking it to adopt an oil train safety bill, which it failed to do. Consent Agenda Ms. Lovelett moved, seconded by Mr. Johnson, to approve the following Consent Agenda items. Vote: Ayes—Walters, Pickett, Adams, Lovelett, Archibald, Miller and Johnson. Motion carried. 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 April 23, 2014 and April 30, 2014 are approved for payment as of May 5, 2014. Claims Check Numbers 72202 through 72325 in the total amount of$491,094.74 EFT Numbers 72198 through 72201 in the total amount of$11,908.00 Payroll for May 5, 2014 in the total amount of$844,709.13 Check Numbers 39482 through 39530 in the total amount of$35,090.44 Direct Deposit Numbers from 53729 through 53932 in the total amount of$593,057.68 EFT Numbers from 1667 through 1671 in the total amount of$216,561.01 In the same motion Council approved the minutes of April 21, 2014 and April 28, 2014 as if read. Ordinance 2922: Water Capital Reconciled Rates Finance Director Steve Hoglund presented an ordinance to reconcile capital rates for contractual water customers. He reminded that Council had already approved Ordinance 2919 earlier in the year to set the capital rates for the 2014-2016 rate period. He explained that the capital rates in place during 2013 were Anacortes City Council Minutes May 5, 2014 2 based on estimated capital costs and that the contractual customers had been advised that a true up would follow once 2013 actual capital costs were known. Mr. Hoglund said that because the estimated costs had been too low, the true up ordinance resulted in an increase for each contractual customer. Mr. Hoglund said the customers were being given the option of paying the true up amount in a lump sum or spreading it over 36 equal monthly installments. He added that the customers had been billed and paid these true up charges since January but Ordinance 2922 confirmed authority for the rates. Mr. Hoglund addressed a memo sent to the Council Finance Committee by Dan O'Donnell of La Conner expressing concern over the true up rates. Mr. Hoglund explained that the capital rates generate cash that can only be used for water system capital projects but that it is not tied to specific capital projects. Ms. Lovelett asked if Mr. O'Donnell had received a reply to his concerns. Mr. Hoglund said he had responded to Mr. O'Donnell when he had expressed similar concerns several months prior. Mayor Gere invited Mr. O'Donnell, who was in the audience, to address Council if he wished but he declined. Mr. Adams asked if the rates were based on consumption or estimated capital project costs. Mr. Hoglund explained that the total capital charges were based on actual capital costs for 2013 and the split between the customers was based on their committed volumes. Ms. Pickett said the rates are confusing to the public because the water utility runs more like a co-op: at the end of the year the utility gives money back if it has collected more than actual costs and bills extra if it has collected less than actual costs. Mr. Hoglund agreed that Anacortes is the only water utility that operates this way. Mr. Johnson noted that the Council Finance Committee had discussed the possibility of changing how the rates are set. Mr. Hoglund agreed that there had been preliminary discussions and said staff would continue to review the rate structure to make sure it was meeting the needs of the City and the contractual customers. Mr. Walters clarified that the Council Finance Committee position was that the water utility should look hard at getting away from this unique rate structure and get back in the mainstream. Mr. Walters said he had no problem authorizing the rates but said the wording of Ordinance 2922 would make it challenging for the code reviser to codify it. Mr. Hoglund and Mr. Walters discussed the wording of the ordinance at length. Mr. Adams confirmed that the ordinance reconciles capital rates to actual capital costs and that the customers had been advised of the rates, had been billed the rates and had been paying them. Mr. Adams moved, seconded by Ms. Pickett, to approve Ordinance 2922, Water Capital Reconciled Rates. Mayor Gere invited the audience to comment on this issue but no one wished to speak. Mr. Johnson and Mr. Archibald spoke in support of the ordinance. Mr. Walters moved to amend the motion to send the ordinance back to staff and bring it back to the next meeting with revisions to address his concerns. Motion died for lack of a second. Vote on the original motion: Ayes— Pickett, Adams, Lovelett, Archibald, Miller and Johnson. Nays—Walters. Motion carried. Shell Puget Sound Refinery Rail Spur Presentation Tom Rizzo, 4923 Heather Drive, General Manager of Shell Puget Sound Refinery, distributed handouts to accompany his presentation on the refinery's proposed project to bring in crude oil by rail to the refinery. Mr. Rizzo presented a slide summarizing the crude capacity, primary sources of crude, primary products, other products and product logistics of the refinery. He emphasized that the crude rail project would not increase the crude capacity of the refinery, it would displace crude now being brought in by ships from Alaska and via pipeline from Canada. He called the rail project absolutely essential to ensure the competitiveness of the Shell refinery in the future. Mr. Rizzo presented statistics reflecting the very significant economic impact of the refinery in the region including employment, state and local taxes, licenses and fees, and direct financial and volunteer support to the community. Mr. Rizzo then described the crude-by-rail project which would bring in 60,000 barrels a day of crude on one unit train (100 cars) each day. He said the project is located on Shell property just east of the refinery, outside the refinery fence, and would include two tracks that could each handle 50 cars for unloading, thereby keeping intersections clear. He said the crude would be pumped directly from the tank cars to on-site crude storage tanks. Mr. Rizzo said the project site impacts 38 acres of designated wetlands which will be mitigated via purchase of credits from a local wetlands bank. He reported that the Anacortes City Council Minutes May 5, 2014 3 permit applications (17 in all)were submitted in December 2013 and that start up would follow an estimated 12-month construction period after permits were approved. Mr. Rizzo said the reason for the project is that Alaskan North Slope crude production has declined and will continue to decline as the fields are depleted. Meanwhile, the production of Bakken crude is rising and is expected to continue rising for several years. He said the industry is importing less crude because of this new source of domestic crude. He added that all three of the other refineries in Washington State will have crude rail facilities in operation by the end of the year so Shell needs this facility to stay competitive with them. Mr. Walters corrected the slide showing Alaskan Crude Oil Production, pointing out that current production is now 500,000 barrels per day, not 500. Mr. Rizzo then displayed a schematic of the proposed facility showing the rail tracks, detention ponds, construction exclusion zone and emergency vehicle access bridge. He noted the north-south tracks would be about 1.5 miles long so a 50-car train can fit for unloading without blocking the SR20 spur. He said the parallel unloading of two 50-car trains would take about 20 hours using hoses and pumps and that the facility would be staffed 24/7 to allow BNSF flexibility to schedule the trains. Ms. Pickett and Mr. Walters questioned Mr. Rizzo about the wetlands. Mr. Rizzo explained the mitigation with offsets purchased from the Nookachamps Wetlands Bank and added that the portion of the 38 acres that would be disturbed only during construction would be restored even though offsets would also be purchased for those acres. Mr. Rizzo then addressed the safety features of the project which he said addressed the causes of accidents elsewhere in the past. He said the project was designed with a very slight bowl shaped grade so the heavy cars can't roll out of the unloading facility. He said the project will also install a dedicated compressor to keep pressure to the brakes on the rail cars at all times in addition to hand brake protocols. Other safety features include grounding to avoid static electricity, automatic stops on transfer pumps, a pond system to contain runoff from heavy rain or a tank car failure, a fire suppression system with 40 monitors spaced no more than 200 feet apart, and a fleet of refinery emergency response vehicles with a response time of four minutes and multiple roadway accesses. Mr. Rizzo said he had been working with County and City emergency responders to understand how to respond to an emergency and plan for different scenarios and would continue to refine those plans and hold drills and train crews. Mr. Rizzo addressed the rail infrastructure that would carry the rail cars to the facility, owned and operated by BNSF. He said Shell had discussed the rails with BNSF, shared their safety concerns, and explained that BNSF says the swing bridge across the Swinomish Slough is inspected twice a year, once internally and one externally, and on its last inspection said it was structurally sound. Mr. Rizzo added that before Tesoro started its crude by rail project it had its own inspector inspect the swing bridge; he said Shell has asked for the same option. Mr. Rizzo addressed federal regulations being developed regarding rail car safety and design to ensure that the oil can be transported safely. He said he was confident those regulations would be finalized shortly so the industry can put in place the necessary fixes. He reiterated that this project is the key to Shell's competitiveness. He said thousands of people have worked at the refinery over the past 55 years and he would like it to be around to employ people for another 55 years. Mr. Walters reported that the mayor of Burlington was worried about the BNSF bridge over the Skagit River and asked if Mr. Rizzo had more information on that. Mr. Rizzo said that bridge is also inspected twice a year and the last results showed it was structurally sound. Ms. Lovelett said firefighting foam for oil fires is a big expense for emergency responders and asked how much Anacortes has on hand, how much it costs, how long it lasts, and whether Shell or BNSF would contribute to Anacortes emergency services to foot that bill. Mr. Rizzo said the regional emergency response team is looking at what resources are available in the area. He said they need to figure out what they've all got, if it is sufficient, and if it isn't, how to provide what is sufficient. Anacortes City Council Minutes May 5, 2014 4 Mr. Walters asked what the speed limit would be on the train track between the Shell facility and Mount Vernon. Mr. Rizzo said he didn't know. Mr. Walters said other towns have concerns that Bakken crude rail cars are not marked differently from cars that carry less explosive crude and asked if that would be corrected. Mr. Rizzo said the industry is working with the Pipeline and Hazardous Materials Safety Administration to properly characterize the Bakken crude, which is lighter than some other crude. Depending on the characterization, federal regulations determine the design of the cars that can transport it. He explained the difference between pre-2011 cars and the new beefier cars that came into service after that. He said the federal government is discussing if there should be an even higher rail car standard. He said for this project Shell will purchase or lease several hundred of the post-2011 cars and whenever the new federal standards come out Shell will fully comply with them. Mr. Johnson said that the trains should be slowed below the current 50 mph speed limit through towns but said that overall the safety features Mr. Rizzo had described are pretty far reaching, very commendable, and he urged expanding that out to a wider area. He said buying post-2011 cars in Puget Sound would be a good start. Mr. Adams asked how a 60,000 barrel train compares to a tanker. Mr. Rizzo said tankers carry about 300,000 barrels of crude or the equivalent of five trains at full capacity. Mayor Gere asked if there would be fewer tankers in the bay if the refinery used rail cars. Mr. Rizzo said that was the plan because Alaskan crude production will continue to decline and its cost will continue rising. Mr. Miller asked if all the Shell tankers bring oil from the North Slope. Mr. Rizzo said virtually all of them and that foreign crude is very rare due to market forces. Mr. Archibald commended the safety features designed into the Shell project but said he would like to hear more about the safety discussions outside the project. Mr. Miller thanked Shell for employing so many friends and neighbors, using domestic crude, and paying for local water. Mr. Johnson said getting information from BNSF is difficult at best, that bent or bad rails cause accidents and the railroads said they would inspect more often. He asked if rail groups could address whether two inspections per year is adequate with such an increase in cars on the rails locally. Ms. Lovelett said federal regulation is not typically as stringent as industry regulation and cautioned against putting too much faith in the federal government to regulate. She said Anacortes may need to address safety at the local level with its industrial partners. Mayor Gere asked if anyone else in the audience wished to comment. Betty Carteret, 14786 Entner Lane, President of Friends of Skagit Beaches, said their mission is promoting education and stewardship for marine resources. She said her group would be delivering letter to the County commissioners the next day requesting that they revisit the decision to issue an MDNS in the SEPA process because a lot of the risk lies outside the Shell facility. She said the rail lines run above and beside two protected marine reserves here. She said these are not non-significant issues. Mrs. Carteret said Friends of Skagit Beaches would be asking the County to do a more thorough environmental review. She mentioned the potential cleanup at the Whitmarsh Landfill which is adjacent to the rail line and said increasing the risk of environmental damage on the edge of a cleanup project doesn't make sense. Roger Ridgway, 1218 South 13th Street, Mount Vernon, commented that the railroad cars built to new federal standards won't be available right away and asked if Shell could hold back until it can get the best cars when they are in production. Mr. Ridgway said Shell shouldn't use the cars until they are safe. Sandra Spargo, 1408 11th Street, said the current visioning workshops are defining Anacortes as sustainable, healthy and safe but no one has addressed the transition to Bakken crude at the refineries. She said if the Shell project proceeds, up to 110,000 barrels of Bakken crude may be transported through Skagit County, possibly in outdated DOT-111 cars. Ms. Spargo cited a list of destructive rail car Anacortes City Council Minutes May 5, 2014 5 accidents. She said the refineries impact the character of Anacortes. She asked if Council was willing to ask the refineries to transition with Anacortes to sustainability, health and safety. Mr. Walters reminded that the refineries are outside Council's jurisdiction and that councilmembers' role is as lobbyists, including for federal legislation. Mayor Gere pointed out on the walls in the Council Chamber the information from the community visioning meeting the week before eek and invited the community to feel free to write right on the posters with ideas and feedback. There being no further business, at approximately 8:38 p.m. the regularly scheduled Anacortes City Council meeting of May 5, 2014 was adjourned. Anacortes City Council Minutes May 5, 2014 6