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City Council Minutes—November 21, 2011
At 7:00 p.m. Mayor Dean Maxwell called the regularly scheduled Anacortes City Council meeting of
November 21, 2011 to order. Roll call found present: Eric Johnson, Erica Pickett, Brad Adams, Bill
Turner, Cynthia Richardson and Brian Geer. Nick Petrish was absent.
Minutes of Previous Meeting
Mr. Turner moved, seconded by Mr. Geer, that the minutes of November 7, 2011 be approved as if read.
Vote: Ayes— Pickett, Adams, Turner, Richardson, Geer and Johnson. Motion carried.
Citizen Hearings
No one present wished to speak on any item not already on the agenda.
Mayor/Council Communication and Committee Reports
Mayor Maxwell thanked volunteers from the Kiwanis Club who attended a recent community work party at
Guemes Channel Kiwanis Waterfront Park and also thanked the Kuhnlein Clan who organized a work
party at N Avenue Park the same weekend.
Mayor Maxwell proclaimed November to be United Way Campaign Month in Anacortes and urged
residents to step forward with vigor and generosity to volunteer and contribute financially to the
community.
Mr. Geer congratulated the Anacortes High School cross country team and the Anacortes Parks
Foundation on a successful first annual 5K Turkey Trot at Washington Park over the weekend.
Consent Agenda
Mr. Johnson moved, seconded by Mrs. Pickett, to approve the following Consent Agenda items. Vote:
Ayes—Adams, Turner, Richardson, Geer, Johnson and Pickett. 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 November 10, 2011 and November 18, 2011 are approved for payment as of this date November 21,
2011.
Claim Checks
November 2011: Check Numbers 62512 through 62684 in the total amount of$644,902.95
EFT
November 2011: EFT Numbers 62501 through 62511 in the total amount of$3,103.59
Payroll for November 18, 2011 in the total amount of$567,695.61
Check Numbers 36677 through 36705 in the total amount of $30,198.42
Direct Deposit Numbers from 42149 through 42330 in the total amount of$347,532.90
EFT Numbers from 1352 through 1356 in the total amount of$189,964.29
Cancelled Checks
Check Number 54222 in the amount of$27.00
Check Number 54649 in the amount of$4.00
Check Number 55887 in the amount of$3.00
Check Number 56189 in the amount of$12.00
Check Number 56978 in the amount of$12.00
Check Number 57368 in the amount of$84.18
Check Number 57970 in the amount of$4.00
Anacortes City Council Minutes November 21, 2011 1
In the same motion Council:
Authorized the mayor to sign an interlocal agreement with the Port of Anacortes regarding the
Depot property;
Adopted Ordinance 2862 vacating a Right-of-Way of certain portions of Third Street and R
Avenue;
Adopted Ordinance 2863 vacating a Right-of-Way of certain portions of S Avenue and Market
Street; and
Authorized the mayor to sign interlocal agreements instituting permanent Reciprocal Library
Borrowing Agreements with Sedro-Woolley and the Upper Skagit Library District.
Ordinance: Adopt 2012 Budget
Finance Director Steve Hoglund advised that following the public hearing on the budget two weeks ago
the final step in the budget process is adopting the budget by ordinance and authorizing the 1% property
tax increase by resolution. Mr. Hoglund presented Council with an ordinance to adopt the budget and a
resolution to adopt the property tax increase. Mr. Geer praised the balanced budget in the difficult
economic climate and moved, seconded by Mr. Turner, to approve Ordinance 2864 adopting the 2012
budget. Mrs. Pickett commented that the budget projects an upswing in sales tax revenue countered by
downswings in other revenue streams. Mr. Hoglund concurred. Vote: Ayes—Turner, Richardson, Geer,
Johnson, Pickett and Adams. Motion carried.
Resolution: 2012 1% Property Tax Increase
Mr. Turner moved, seconded by Mr. Adams, to approve Resolution 1835 adopting a 1% property tax
increase for 2012. Mr. Adams observed that the 1% property tax increase will bring the City approximately
$46,000 and asked how that will affect individual property owner tax bills. Mr. Hoglund replied that all
things being equal all tax bills would go up 1% but in actuality each bill depends on how the property's
assessed valuation has changed relative to other properties in the taxing district. The mayor offered that
the net effect on an average$250,000 home would be around $5. Mr. Adams observed that the minimal
increase for each taxpayer really does help the City maintain a level of service. Mrs. Richardson added
that if the city doesn't take the increase this year it loses that opportunity forever so it is wise to plan
ahead to meet rising costs in the future. Vote: Ayes— Richardson, Geer, Johnson, Pickett, Adams and
Turner. Motion carried.
Finance Update
Mr. Hoglund presented an update on the City's financial condition through October, 2011 (83%through
the year). Regarding revenue, sales tax is already at 104%of budget and is up 11% over the same period
in the prior year. Real Estate Excise Tax (REET), which is restricted for capital projects, is at 75% of
budget and approximately equal to 2009 levels. Impact fees for streets and parks have generated $65K
year to date or 59% of budget, primarily on residential permits. Mr. Hoglund then reviewed other General
Fund revenues including property tax, utility taxes, leasehold tax, licenses and permits, intergovernmental
revenues, fines and forfeits, and interfund transfers. He noted that property taxes to date don't reflect 2nd
half receipts. Mr. Hoglund reported that overall revenue is at 89% of budget 83%through the year and
that revenues are still exceeding expenditures. Mr. Johnson asked what impact is expected from changes
in liquor taxes and profits after the last election. Mr. Hoglund said the state estimated revenues would
increase for both state and local governments following passage of Initiative 1183.
Mr. Hoglund next reviewed General Fund expenditures by department. He noted that Medic/Fire
expenses are at 98% of budget but some of that is covered by a grant. Regarding non-departmental
expenditures, Mr. Hoglund recapped the second quarter budget amendment that adjusted the way health
insurance premiums are booked.
Mr. Hoglund then looked at revenues and expenditures in all the other funds. He noted that all funds that
receive property tax have not yet received the 2nd half property taxes from the county so appear low at
this point. He noted that Washington Park had higher revenue and expenditures than budgeted reflecting
enthusiastic use of the park. He reported that Fund 200 will balance out after scheduled payments in
December. He explained that Fund 209 has no revenue stream and is budgeted and paid out of cash
reserves. He said Water Fund 401 revenue from bond proceeds for the water plant improvement project
will be posted at year end. He also explained that Storm Drain Fund 445 appears out of balance because
Anacortes City Council Minutes November 21, 2011 2
of dredging project revenues that spanned fiscal years. Equipment Rental Fund 501 appears out of
balance because its spending happens disproportionately early in the year. Mr. Adams asked how
property tax revenue hits each fund. Mr. Hoglund explained that when tax revenue is received it is
allocated among funds according to the adopted budget. Mrs. Richardson asked if the revenue in
Forestland Endowment Fund 602 is interest or donations. Mr. Hoglund said it reflects both ongoing
contributions and investment interest.
Ordinance: Third Quarter Budget Amendment
Mr. Hoglund presented an ordinance amending the 2011 budget and reviewed the ordinance language to
explain each line item. Mr. Hoglund specifically addressed the amendments affecting Ambulance Service
Fund 110. He explained that to ensure GAAP compliance all amounts billed to patients and their insurers
should be recognized as revenue and then the unreimbursed portion should be recognized as
uncollectible debt expense. He added that Fund 110 had to use reserve cash to balance at the end of
2010 leaving that fund cash poor so the General Fund will be subsidizing it in 2011. Mayor Maxwell
underscored that Anacortes is under-reimbursed by the Emergency Medical Commission and is seeking
a higher rate of reimbursement. Mrs. Richardson asked how other service providers are covering costs if
private insurance doesn't cover the full cost. Mayor Maxwell said all providers have the same problem,
the question is how much EMS reimburses of that and how much the city has to make up. Mr. Turner
asked how much of its cash reserves the City will use in 2011 to meet the budget. Mr. Hoglund said those
figures can't be pinpointed until year end but he projected that the City should not have to dip significantly
into cash reserves. Mrs. Richardson moved, seconded by Mr. Turner, to approve Ordinance 2865
amending Ordinance No. 2843 adopted on November 15th of 2010, entitled "An Ordinance Adopting The
Budget And Salary Schedule For All Municipal Purposes And Uses For The Year 2011". Vote: Ayes—
Geer, Johnson, Pickett, Adams, Turner and Richardson. Motion carried.
Public Hearing and Ordinance: Fidalgo Bay Road Right-of-Way Vacation
Public Works Director Fred Buckenmeyer reviewed the location of the proposed right-of-way vacation
which is part of the South Fidalgo Bay Road improvements that will service the proposed new Willette
Business Park. He stated that the City owns all adjacent parcels. Mr. Buckenmeyer reminded that in
September Resolution 1830 set a public hearing date on this vacation and Resolution 1831 revised that
public hearing date to the present meeting. He said all legal notifications had been made as required. At
approximately 7:50 p.m. Mayor Maxwell opened the public hearing. No one wishing to speak, the mayor
closed the public hearing. Mrs. Richardson moved, seconded by Mr. Adams, to approve the vacation and
adopt Ordinance 2866 vacating a right-of-way of certain portions of South Fidalgo Bay Road Short Plat.
Mr. Johnson commented on the useful public hearing schedule on the Planning Department page of the
City website and encouraged a similar display for Public Works. Vote: Ayes—Johnson, Pickett, Adams,
Turner, Richardson and Geer. Motion carried.
2012 Contract: WTP Construction Management Services
Assistant City Engineer Matt Reynolds explained that the City currently has consulting contracts with
MWH Americas, Inc. and HDR Engineering, Inc. for construction management services and engineering
services, respectively, during the construction phase of the water treatment plant improvement project.
Mr. Reynolds said those contracts were set up on an annual basis to help the City manage scope and
costs. He presented proposed annual contracts with those consultants to cover services anticipated
during 2012. Mr. Reynolds explained the nature of those services and levels of staffing. Mr. Geer moved,
seconded by Mr. Johnson, to approve a one-year contract with MWH Americas, Inc. in the amount of
$1,479,500. Vote: Ayes— Pickett, Adams, Turner, Richardson, Geer and Johnson. Motion carried.
2012 Contract: WTP Engineering Services
Mr. Reynolds explained that HDR has already performed in 2011 a lot of the work anticipated for 2012.
Mr. Adams asked how the contractors are performing. Mr. Reynolds said staff is very pleased and that the
contractor is currently ahead of schedule. Mr. Adams moved, seconded by Mrs. Pickett, to approve a
one-year contract with HDR Engineering, Inc. in the amount of$694,017. Vote: Ayes—Adams, Turner,
Richardson, Geer, Johnson and Pickett. Motion carried.
There being no further business, at approximately 8:00 p.m. the regular Anacortes City Council meeting
of November 21, 2011 adjourned.
Anacortes City Council Minutes November 21, 2011 3