Loading...
HomeMy WebLinkAbout2010-10-18 City Council Minutes Approved GST Y Off' MO"41 ooR City Council Minutes—October 18, 2010 At 7:30 p.m. Mayor Maxwell called the regularly scheduled Anacortes City Council meeting of October 18, 2010 to order. The mayor welcomed Scout Pack 4085 to the meeting. Roll call found present: Kevin McKeown, Erica Pickett, Brad Adams, Bill Turner, Cynthia Richardson and Brian Geer. Nick Petrish was excused. Roll call was followed by the Pledge of Allegiance. Minutes of Previous Meeting Mr. Geer moved, seconded by Mr. McKeown, that the minutes of October 4, 2010 be approved as if read. Vote: Ayes— Pickett, Adams, Turner, Richardson, Geer and McKeown. Motion carried. Citizen Hearings No one present wished to speak on any item not already on the agenda. Mayor/Council Communication 2010 Historic Preservation Achievement Award Museum Director Steve Oakley introduced the members of Historic Preservation Board in the audience: Kay O'Connell, Jim Young, Susan Fahey and Board Chair Susan Rooks. Ms. Rooks then introduced the recipients of the annual Historic Preservation Achievement Awards: Bret Lunsford for his book, Images of America:Anacortes, and Elaine Walker for her weekly column "Back in the Day" in the Anacortes American. Ms. Rooks described Mr. Lunsford's book and Ms. Walker's column and their contributions to preserving the story and history of Anacortes. Mrs. Richardson said she was familiar with both works and commended the selection of the awardees. The mayor then presented the awards to Denise Crowe on behalf of Bret Lunsford and to Elaine Walker. Mayor Maxwell thanked the Historic Preservation Board for its work to preserve and share the City's history. Mr. Turner announced that the Friends of the Forest benefit event would be held on Saturday, October 23. Mayor Maxwell advised that the Boys and Girls Club dinner and auction is also happening that evening. Mr. Geer thanked and offered kudos to the Parks and Recreation Department for the very successful annual Mt. Erie Fun Run on Saturday. Mr. McKeown reaffirmed his support of the mayor's signing of the Tethys agreement and said he felt Council was properly informed and advised throughout the process. Mrs. Pickett announced the new Marine Skills Center open house on Thursday, October 21 at 2:00 p.m. Consent Agenda Mr. McKeown moved, seconded by Mr. Geer, to approve the following Consent Agenda items. Vote: Ayes —Adams, Turner, Richardson, Geer, McKeown and Pickett. Motion carried. Approval of Vouchers/Cancellation of Warrants Council voted unanimously that the following vouchers/warrants audited and certified by the City's Auditing Officer (Finance Director) and subsequently reviewed and approved by the Council Finance Committee on October 7, 2010 and October 14, 2010 are approved for payment as of this date October 18, 2010. Claims Warrants October 2010: Warrant Numbers 57618 through 57798 in the total amount of $982,088.92 EFT October 2010: Warrant Numbers 57609 through 57617 in the total amount of $2,476.14 Anacortes City Council Minutes October 18, 2010 1 Prewritten Claims October 2010: Warrant Number 57608 in the total amount of$38,193.49 Payroll for October 5, 2010 in the total amount of$875,122.16 Warrant Numbers 35270 through 35319 in the total amount of$48,934.80 Direct Deposit Numbers from 36977 through 37178 in the total amount of$542,632.48 EFT Numbers from 1185 through 1190 in the total amount of$283,554.88 Grant Agreement: Ace of Hearts/Rotary Park Baseball Field Parks and Forestlands Manager Jonn Lunsford explained that in 2007 Anacortes was an alternate for a grant to build a baseball field at Ace of Hearts Rotary Park and was recently offered the funds in a second round of awards. He said the City would be responsible for approximately$56,000 in matching funds for the $52,000 grant. Mr. Lunsford asked for and received permission from the RCO to take two years to raise the matching funds. Mrs. Pickett complimented Mr. Lunsford for arranging the extension. Mr. Turner praised the City's partnerships with Rotary and other service clubs and Little League. Mr. Geer moved, seconded by Mr. Adams, to approve moving the grant forward. Vote: Ayes—Turner, Richardson, Geer, McKeown, Pickett and Adams. Motion carried. Contract Award: Pennsylvania Avenue, Phase II Public Works Director Fred Buckenmeyer asked Council to approve a contract award for Phase II of the Pennsylvania Avenue improvements. He said this phase will include sidewalk, curb, gutter, storm drainage and asphalt paving for 260 LF south of the intersection with West 12th Street. He said the low bid was from Larry Brown Construction for$155,692 compared to the Engineer's Estimate of$250,000. Mr. Buckenmeyer explained that only the first 265 LF is being bid this year because it is so late in the construction season and also to be sure sufficient funds are in the street improvement budget to cover the contract. He added that Phase III will go out to bid early in 2011 to complete the project. Mr. McKeown requested that the project be referred to as "construction" rather than "reconstruction." Mr. Buckenmeyer agreed. Mr. McKeown asked if staff was concerned about the gap between the low bid and the Engineer's Estimate. Mr. Buckenmeyer said no, the three lowest bids out of six were very close. Mr. McKeown asked what the construction window would be. Mr. Buckenmeyer said construction would begin in two to three weeks and the contract calls for approximately 45 working days. He added that the project is expected to finish by end of the year. Mr. McKeown moved, seconded by Mr. Turner, to approve the contract award to Larry Brown Construction. Mr. Turner clarified that the area being worked is in good shape for autumn work. Mrs. Richardson asked if Pennsylvania Avenue will be shut down completely during construction. Mr. Buckenmeyer said the intersection will be closed completely during construction so Jasper Way residents will need to go around. Mr. Adams noted how low the bid was, suggested that was partly due to the time of year, and thanked staff for saving the taxpayers money. Mr. McKeown pointed out Pennsylvania Avenue is classified as a minor arterial per federal standards and needs to be paved for public safety. Mayor Maxwell added that the federal government may eventually allocate funds for the final phase of the project which was ranked first in the County. Vote: Ayes— Richardson, Geer, McKeown, Pickett, Adams and Turner. Motion carried. Resolution: Skagit 911 Excise Tax Police Chief Bonnie Bowers announced that last week the Skagit County Commissioners voted to raise the E911 tax by 20 cents per month and asked all cities to do the same. The Chief explained that in 1987 the County consolidated the 911 center and the E911 tax of 50 cents per land line was established. In 2003 the tax was extended to cell phones but not to Voice over Internet (VOIP) lines. In April this year the legislature allowed a 20 cent increase and extended the tax to VOIP and asked counties to pass resolutions accepting or rejecting the tax. Chief Bowers said the act also discontinues state funding for counties that don't approve the tax. She said the Skagit 911 center receives about$300,000 a year in State funding and the increase will bring in $320,000. This revenue is much needed and thus the County has asked cities to pass an endorsing resolution. Mr. McKeown said he has been a VOIP user since 2003 and asked if he calls 911 from a VOIP line, is his location known? Chief Bowers said she would find out. Noting that ambulance service in Anacortes costs about$2M a year, Mrs. Pickett moved to accept Resolution 1809 recommending to the Skagit County Commissioners changes in the amount of local Anacortes City Council Minutes October 18, 2010 2 excise tax imposed on the use of switched access lines, radio access lines, and interconnected Voice Over Internet Protocol service lines for Enhanced 911 Services. Mrs. Richardson seconded the motion. Mr. Adams, Mr. McKeown and Mr. Turner clarified who will be affected by the VOIP tax. Mr. McKeown said he supported the resolution but would like to know if a VOIP user's location is known at the time of a 911 call. Mrs. Richardson observed that being able to call 911 is still a very important service to VOIP users. Mr. McKeown clarified his concern was public safety and didn't want users who switch to VOIP to misunderstand how much information 911 dispatch gets from a VOIP call. Mrs. Richardson noted that older cell phones have the same problem. Vote: Ayes—Geer, McKeown, Pickett, Adams, Turner and Richardson. Motion carried. Water Treatment Plant Expansion Financing Update Finance Director Steve Hoglund introduced Susan Musselman of SDM Advisors, the City's financial adviser for the bond issue, and Jane Towery of Piper Jaffray, the bond underwriter, to provide an update on the financing for the water treatment plant expansion. Mr. Buckenmeyer first provided a brief summary of the scope of the project. He noted that the City is a regional water provider as well as a municipal water utility. He said the existing plant must remain open and in full operation throughout construction. He reminded that the plant was designed to produce 20 million gallons per day (MGD) and is currently certified by the Department of Health for 30 MGD. The current average demand is 21.4 MGD with a maximum of 29 MGD. The Water System Plan estimates future demand of 27 MGD average (38 MGD maximum) by 2019 and 29 MGD average (41 MGD maximum) by 2029. He emphasized that the project will ensure necessary water quality, reliability and capacity for future projected demand. Regarding water rights, Mr. Buckenmeyer advised that the City has secured water rights to 54.9 MGD on the Skagit River with an additional 21 MGD of interruptible rights and is the largest single source of potable water in Skagit County. He said the average flow calculated since 1941 is 16,580 cubic feet per second (CFS) which equals 10.7 billion gallons per day. Mr. Geer asked to know the highest flow ever recorded. Mr. Buckenmeyer said 152 CFS during the 1990 flood. In response to a question from Mr. Adams, Mr. Buckenmeyer clarified that interruptible means the City agreed not to take that additional 21 MGD during low stream flows but added that the plant has never come anywhere close to using the current uninterruptible right. Mr. Turner added that the instream flow rule is to protect fish. Mr. Buckenmeyer illustrated his comments with a pie chart showing the total river flow and the sliver that represents Anacortes's water rights. Mayor Maxwell pointed out that the City's allocation had the full concurrence of the Department of Fisheries and the Swinomish Tribal Community. Mr. McKeown asked the average flow over last ten years. Mayor Maxwell pointed out the City encourages voluntary water conservation measures as a matter of public policy, not because there is insufficient water. Mr. McKeown asked how much land is available at the treatment plant site. Mr. Buckenmeyer replied 10.9 acres total but most of it is used by the sediment lagoons. Mr. McKeown asked how everything is going to fit. Mayor Maxwell said the 90%design plans are available. Mr. McKeown asked about redundancy at the high capacity pump station. Mr. Buckenmeyer said the plans call for two high- service pumps and a third may be added depending on the bid results. Next Jane Towery discussed the proposed bond issue. She explained that because the final price of the project can't be known until after the bid date the initial bond offering will be for$43-45M to net$40M of project proceeds after debt service reserve. She said the maturity structure will depend on market conditions at the time of bond issuance but it will probably be a 20 to 25 year structure. She explained that the City's utility system includes water, storm water and sanitation utilities (sewer won't be included until 2013) so the bond disclosure will contain information on all those utilities. She emphasized this is a great time to be issuing bonds as interest rates are at historic lows. Ms. Towery said the bond issue may include a combination of tax exempt bonds and taxable Build America Bonds if that is the most beneficial. She showed a graph demonstrating the crossover point in time where tax exempt bonds and Build America Bonds offer better value to the City. She noted that point fluctuates and said the team will structure the bond issue for optimal financial effect on the sale date. She noted the City's excellent Moody's rating of Al and said the City is now pursuing a separate rating from Standard and Poor's because two ratings are required for Build America Bonds. The City will also bid for insurance but depending on the credit rating bond insurance may not be cost beneficial. Mr. Turner clarified that the City is only bonding for$40M now even though it is a good time to issue debt because the final project cost is Anacortes City Council Minutes October 18, 2010 3 not yet known. He asked where the bond proceeds go until they are spent on the project. Ms. Towery said into an interest bearing account. Mr. Turner asked if the Build America Bond program ends in 2010. Ms. Towery said it may be extended another year. Mr. Turner asked how long it takes to sell $40M of bonds. Ms. Towery said the pre-marketing period is 10-14 days but the actual sale takes only a couple of hours. Mr. Adams asked if investors can buy a combination of bonds. Ms. Towery said yes. Susan Musselman addressed Council about the bond issue explaining that since the current project estimate of$48-67M is such a broad range the phased bond issue had been suggested. She added that a Public Works Trust Fund loan, which would be highly advantageous, may be able to fund part of the financing package but that won't be known until mid-2011 so the City is better off not bonding the entire project yet. She reiterated that the financing plan is to issue bonds for$43M to net$40M cash for project in 2010 and then the need for and size of a future bond issue will be determined in 2011 depending on the bids and on the PWTF loan. She said disclosure documents and financing documents are being prepared now. The voluminous bond ordinance is being prepared now which will authorize a bond agreement with Piper Jaffray. She added that Standard and Poor's will be at the City next week to give their rating which will affect bond pricing. She said the bond issue is targeted for November 10, a Wednesday, and said that Council would need to have a special meeting to approve the sale on the day it occurs. Mr. McKeown asked about escalation factors. Mr. Buckenmeyer said it is a 2.5 year project and the engineer estimates cost based on projected wage increases and material cost increases. Mayor Maxwell called the escalation factor a contingency and said 10% is a norm for projects this size but that this project doesn't have the same site variables as a tunnel project and the City will have a full time construction management firm on site to contain costs. He announced that over 80 contractors have requested plans for the project. At approximately 8:44 p.m. Mayor Maxwell called a break until 8:50 p.m. At 8:50 p.m. Mayor Maxwell called the meeting back to order. Ordinance: Third Quarter Budget Amendment Finance Director Steve Hoglund presented Council with an ordinance to amend the 2010 budget. He reviewed the funds affected by the amendment and the housekeeping details involved. He noted that the Pennsylvania Avenue project includes fund transfers into the Street Fund from the Water and Storm Funds as those utilities will also benefit from the project. He added that the retirement of Washington Park Manager Andy Tubbs required a budget amendment in Fund 107. Mr. McKeown moved, seconded by Mr. Geer, to approve Ordinance 2839 amending Ordinance 2813 adopting the 2010 budget. Vote: Ayes— McKeown, Pickett, Adams, Turner, Richardson and Geer. Motion carried. Ordinance: Interfund Loan Mr. Hoglund explained that the design and engineering for the Water Treatment Plant project has thus far been paid out of cash reserves in the Water Fund which are now diminishing so he would like Council to put a plan in place to provide additional short term cash if required before the bond issue proceeds are available. He clarified that the proposed ordinance would allow the General Fund to loan the Water Fund money for the project and then be paid back with interest, if needed. Mr. Turner commended the policy of maintaining cash reserves to allow this sort of cash management. Mr. Hoglund said staff explored other short term loan options but to loan within the City made more sense. Mr. Furlong advised that Council needed to amend the agenda to call the item an ordinance rather than a resolution as was advertised in the published agenda. Mr. McKeown moved, seconded by Mr. Turner, to amend the agenda to refer to this item as an ordinance rather than a resolution and to approve Ordinance 2840 authorizing an interfund loan between the General Fund and the Water Fund. Mr. Adams asked if cash reserves get paid back. Mr. Hoglund said they could. Vote: Ayes— Pickett, Adams, Turner, Richardson, Geer and McKeown. Motion carried. Finance Update Mr. Hoglund summarized the City's financial situation as of the end of the third quarter. He prefaced his remarks by stating that he had previously alerted Council that he planned to bring forward a resolution allowing the use of cash reserves in three funds to balance the 2010 budget but he determined after further analysis that this may not be required and so would be holding off on that resolution for another Anacortes City Council Minutes October 18, 2010 4 month and monitoring the situation until the second half property tax revenues were available. Mr. Hoglund added that the Solid Waste Fund was going to make a loan to the Storm Drain Fund for the Skyline dredging project as described in the 2nd quarter update so an ordinance would be coming before Council in a couple of weeks to authorize that loan. Mrs. Pickett asked if simple interest is a state requirement. Mr. Hoglund replied that it is typical methodology. Mr. Hoglund first reviewed General Fund revenues and expenditures YTD by category and explained line items that appeared off target because either revenue or expenditures were not evenly distributed throughout the calendar year. He noted the $164K collected for liquor profits and taxes so far in 2010. He added that interest rates are very low so interest revenue is below budget. Overall at 75%of the year revenue received is at 75.3%of budget and expenditures are at 76.9%due to insurance premiums paid annually early in the year. Next Mr. Hoglund advised that sales tax revenues are up over last year at this time due to several large projects that are now finishing up or completed and he predicted receipts will continue to taper off. He said real estate excise tax (REET) revenue is up over last year but below recent years. Mr. McKeown asked the REET rate. Mr. Hoglund said there are two separate REET taxes, each '/a%. Mayor Maxwell clarified that REET can be used only for capital projects. Mr. Hoglund continued that impact fees are a another restricted revenue stream for public works projects and are up over last year but like REET are below recent years. Mr. Hoglund then briefly reviewed revenues and expenditures by fund and reported that most funds are where expected once adjusted by the budget amendment passed earlier in the evening. Mr. Turner asked to know the revenue sources for Fund 113, ACFL Management and why they are down. Mr. Hoglund said that fund is primarily fed by quarry rock sales and noted Fund 113 has a healthy cash reserve. Council had no other questions about the update. Resolution: 2010-2012 Collective Bargaining Agreement with Commissioned Police Guild Mayor Maxwell remarked it was nice to have this contract resolved and thanked the Guild for its cooperation. Human Resources Director Emily Schuh then presented the 2010-2011-2012 collective bargaining agreement with the Commissioned Police Guild. She summarized that negotiations began in 2009, later included the services of a mediator, and were scheduled for arbitration in January 2011 but now that the Guild has ratified the agreement that won't be necessary. Mr. Turner asked about the 6.5% wage increase over three years. Ms. Schuh said that part of the proposal had not changed. Mrs. Richardson asked Ms. Schuh to elaborate on some of the key issues. Ms. Schuh listed a 6.5%wage increase over three years, premium adjustments for special assignments, an education incentive program, a new option to cash out a portion of accrued vacation into a deferred compensation plan, incentives for participating in a voluntary physical fitness program, and employee responsibility for a portion of health insurance premiums. Mrs. Pickett and Mr. McKeown praised Ms. Schuh's efforts. Ms. Schuh said she was pleased the City was in a position to be able to offer a wage increase since many other jurisdictions are unable to do so at this time. Mr. McKeown moved, seconded by Mr. Geer, to adopt Resolution 1810 authorizing execution of the 2010-2011-2012 bargaining agreement by and between the City of Anacortes and the Commissioned Police Services Guild. Vote: Ayes—Adams, Turner, Richardson, Geer, McKeown and Pickett. Motion carried. Mayor Maxwell again thanked the Guild for recognizing these are difficult times and working collectively with the City. There being no further business, at approximately 9:20 p.m. Mayor Maxwell adjourned the regularly scheduled Anacortes City Council meeting of October 18, 2010. Anacortes City Council Minutes October 18, 2010 5