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HomeMy WebLinkAbout2009-09-14 City Council Minutes Approved OS'2Y off`, co City Council Minutes—September 14, 2009 At 7:30 p.m. Mayor Maxwell called the continued meeting of September 8, 2009 to order for the purpose of authorizing the sale of General Obligation bonds. First, Mayor Maxwell asked Brian Geer to introduce some special guests in the audience who helped with the recent painting project at The Depot. Mr. Geer explained that when Facilities Manager Russ Pittis advised Council that there was not enough money in the budget to perform much needed painting at The Depot Mr. Geer and Mr. Pittis came up with a plan to perform the work with volunteers and donations. To find someone to do the hard work of scraping and prepping Mr. Geer called Coach Jim McNally of Wrestlers for Life. After just one phone call five Anacortes High School wrestlers came down to the Depot and worked for two hours manually scraping and prepping for the volunteer paint crews. Mr. Geer introduced Coach McNally who related how he formed Wrestlers for Life six years ago in honor of wrestler Nathan Estvold who died of cancer in 2002. Coach McNally's idea was to rent out the kids who were always looking for money and had time and strength on their hands. The first year they raised $3500 for the American Cancer Society. Last year, the fifth year, Wrestlers for Life raised $17,000 which they largely donated to Relay for Life, March for Meals, a parent Darla Simpson's cancer treatment. The club kept$4000 to purchase T-shirts and insurance and offer some scholarships. Wrestlers for Life gives to the American Red Cross, the Food Bank, the Senior Center, and always to the American Cancer Society in honor of Nathan Estvold. Many of the Wrestlers for Life have over 200 hours of community service on record. They work with the City to set up and clean up for every large event in town. Coach McNally then introduced the Wrestlers for Life who worked on the Depot painting project:junior Michael Doane,junior Carol Schwarz (scorekeeper),junior Sara Burse (scorekeeper), freshman Blake Mooney, senior Kyle Jones, and senior Isaac Doane. The Councilors thanked the wrestlers and Coach McNally for everything they have done for the community. Mrs. Richardson reported that she has hired the Wrestlers for Life to do yard work at her house and all the money goes back into the community. It is a fantastic program. Ordinance: Authorize Sale of LTGO Bonds to Refund 1999 LTGO Bonds Finance Director Steve Hoglund reported that the Limited Tax General Obligation Refunding Bonds that Council authorized on the Consent Agenda at its August 3, 2009 meeting were priced this morning. The ten year bond has a 3% coupon rate for the first five years and a 4% coupon rate for the second five. $215,993 of interest cost will be saved due to this refunding bond over the existing debt. The bonds were originally issued to build the new police and fire stations. LTGO bonds are paid off with tax money, not service revenue. The reason the City got such good rates was our recent AA rating from Standard & Poor's. Mr. Hoglund requested that Council adopt Ordinance No. 2803 arranging the bond issue and authorizing Mayor Maxwell to execute an agreement with The Bank of New York Mellon Trust Company, N.A., of Seattle, Washington, as refunding trustee. Mr. McKeown moved, seconded by Mr. Geer, to adopt the ordinance. Vote: Ayes— McKeown, Petrish, Pickett, Adams, Turner, Richardson, and Geer. The motion carried at 7:40 p.m. Mayor Maxwell immediately executed the agreement. There being no further business, at approximately 7:42 p.m. the continued City Council meeting of September 8, 2009 was adjourned. Anacortes City Council/Study Session Minutes September 14, 2009 1 Mayor Maxwell immediately called the regularly scheduled study session of September 14, 2009 to order. RCW 84.14-New and Rehabilitated Multi-Unit Dwelling in Urban Center Assistant Planning Director Don Measamer presented an overview of the multi-family residential tax exemption program created by RCW 84.14. A central business district property owner and members of the Planning Committee have expressed interest in the idea so City staff contacted the City of Bellingham to find out how the program has worked there. The RCW is intended to encourage residential opportunities including affordable housing in urban centers. Applicants must meet six criteria: the new or rehabilitated multi-unit housing must be located in a residential targeted area; it must meet guidelines adopted by the governing authority that may include height, density, parking, and/or income limits for occupancy; it must use at least 50% of the space for permanent residential occupancy; the construction or improvements must be completed within three years from date approved; property proposed for rehabilitation must fail to comply with one or more standards of the applicable state and local building or housing codes on or after July 23, 1995; and the applicant must enter into a contract with the City. For a jurisdiction to designate a residential targeted area, it must be within an urban center; that urban center must lack sufficient available, desirable, and convenient residential housing, including affordable housing; and providing additional housing opportunity in the area must assist in achieving one or more of the stated purposes of RCW 84.15. A resolution can designate a targeted area. A targeted area can be small, as small as a single lot, and there can be more than one in a city. The City can specify standards and guidelines for evaluating applications and can make participation conditional on more stringent income eligibility, rent, or sale price limits, including limits that apply to a higher percentage of units. The property tax exemption can run for eight years or it can run for twelve years if at least 20% of the units are required to be -affordable". The value of the land and non-housing related improvements (i.e., commercial space) are not exempt from taxation. At the end of the exemption program, the buildings or improvements are considered new construction for tax purposes. The program is usually adopted by ordinance. The reporting requirements are extensive and may be onerous. It does stimulate mixed use development in downtown cores. Jurisdictions typically require a design review process. Land and commercial improvements continue to be taxed in full. Mr. Measamer advised that staff will begin drafting regulations to address this issue, work with Council's Planning Committee and the Planning Commission, bring a draft back to a Council study session in December or January and look toward a potential February 2010 adoption. The City will have to consider whether it needs design guidelines, where the targeted area(s) will be, whether to require some affordable housing for both the 8 and 12 year exemptions or only the latter, whether to modify parking requirements in the target area(s), and whether to impose plan review fees and costs for these projects. Mr. Petrish asked Mr. Measamer for a brief summary of how the program would work. Mr. Measamer explained that Council would determine where to target a residential area. Then when owners within that district modified buildings or built new ones that included multi-residential units, the residential portion could be exempted from property tax increases for 8 or 12 years. Mrs. Pickett clarified that only residential units that qualify would be exempted. Mr. Measamer continued that Council would establish the conditions owners would have to meet to qualify for the tax exemption—possibly 20% low income units, or placing a limit on sale price, or requiring a certain percentage of rental units. Mr. Measamer suggested that the City look at examples from other jurisdictions and then consider where in Anacortes this program might be appropriate. The program has been successful in Bellingham at creating residential units including low income residential and has increased vibrancy downtown. Mr. Geer asked how long Bellingham has run this program. Mr. Measamer advised about three years. He has copies of Bellingham's ordinance, design standards, etc. Mr. Turner summarized the history of the RCW which the legislature passed about 10 years ago. Anacortes was too small a city then to qualify but the RCW was subsequently modified and now Anacortes can participate. The Council Planning Committee looked at it and found that it really does help stimulate multi-use development in downtown business districts. Mr. Turner suggested this is a perfect way to connect the marina and downtown with multi-use buildings. Mrs. Richardson noted that the Planning Committee has discussed this several times and asked Mr. Measamer to clarify that the property tax on affected residential units is not totally forgiven, it is just based on the price at which an owner buys in and then the assessed value is frozen at that value for the 8 or 12 years of the program. Mr. Measamer agreed and noted that Bellingham says there could Anacortes City Council/Study Session Minutes September 14, 2009 2 be a problem if a bond is tied to future tax increases that are temporarily frozen by the program. Mrs. Richardson also noted that it may look at first glance like some individuals are personally benefiting from the program but without it the development doesn't happen at all and there is no tax base for anyone to benefit from so the net result is quite positive. Mr. McKeown expressed support for the idea which will create a more livable downtown and more retail opportunities and noted that Anacortes could study other jurisdictions besides Bellingham have tried this as well. Mr. Adams clarified that the RCW provides some guidelines but leaves specifics up to the jurisdiction to determine. Mrs. Pickett observed that to call the program a tax exemption is a wild misnomer because the City would still be collecting the bulk of the property taxes. Mrs. Pickett asked if the value of the property goes down rather than up, is the taxable value still frozen? She requested a summary of the financial implications for various options. Mr. Measamer noted that the City still needs to contact the County Assessor's Office to find out their concerns about implementation. Mayor Maxwell noted that the discussion will continue and that the idea has real potential. Presentation on Transfer Station by Kevin Renz, Skagit County Public Works Mayor Maxwell introduced Kevin Renz, Solid Waste Division Manager for Skagit County. Mr. Renz is making this presentation around the County to report on the planning for the potential new transfer station. The County operates four transfer stations including the household hazardous waste facility located at the main transfer station. Solid waste tonnage in Skagit County had been increasing 4% per year from 1998 through 2007 but in 2008 and 2009 dropped 8% per year which is consistent across the northwest, presumably due to economic contraction. At the County's transfer stations 27% comes from self-haul customers, 27%from Waste Management pick up in rural Skagit County, 18%from Mount Vernon, 10%from Burlington, 7.8%from Anacortes, 5%from Sedro Woolley, and the remainder from the remote stations. All waste containers are loaded onto rail cars which are hauled to a regional landfill in Goldendale near the Oregon border for$52/ton, or$50/ton with discounts. In 1987 the County entered into a 20-year contract for a solid waste incinerator. It opened in 1988 but in 1990 the County had to take over operation from the private contractor and in 1994 the incinerator was closed and the facility was converted into a transfer station. The facility was designed for a 20-year life and is now 21 years old. The crane is past its design life, the compactor needs replacement, the tipping floor is wearing out, the asphalt and scales need replacement, and the $365,000 Cat 963 track loader needs replacement. The current condition and design of the facility limit the ability to recycle materials because there are only three drop off bays so material has to move immediately into the compactor without sorting. There is also an increasing risk of down time and equipment breakdowns. Mr. Renz displayed a series of photos showing the deteriorated nature of the facility and equipment. In 2002 the County contracted with Enviromech to study how the facility could be upgraded. In 2005 the County hired HDR to provide options for upgrades or building a new facility. Then two years ago the County hired URS to recommend a preferred option and provide a conceptual design. The design criteria were to provide for increased recycling, handle the projected waste tonnage for the next 20 years, allow for construction on the existing footprint, separate self-haul and commercial traffic, allow for future expansion, and incorporate a top loading compactor. URS came up with a design for a 23,000 SF transfer station including below grade public drop off area for recyclables and waste, a maintenance shop, and a separate entrance for the trucks and bins to enter and exit. The facility can be expanded to 30,000 SF if required. The design offers six bays with two slots each for self-haul plus three bays with two slots each for the commercial haulers. The new facility would increase recycling, meet community needs for next 20 years, improve efficiency, do away with expensive equipment, reduce customer wait time, and increase reliability and safety. The next step is to proceed with full design so the County can go out for bids in spring 2010. The County would like to proceed with design which would cost about$500,000 and would come out of solid waste fund reserves. The current construction estimate is $7.2M. Debt payments should be consistent with current rates. Mr. Geer asked how recyclables would be separated out on the main floor of the new facility. Mr. Renz explained that staff can work on the floor directing public and commercial haulers where to place things. Mr. Geer asked how much waste is diverted by sorting out recyclables on the floor. Mr. Renz said Mountlake Terrace is pulling out another 6% of recyclables off the floor at their similarly design facility. Mr. Geer asked if the new facility would require additional employees. Mr. Renz said no. Now commercial and Anacortes City Council/Study Session Minutes September 14, 2009 3 public drop off areas are operated separately but they'd be combined in the new facility so staff can be reassigned. Mr. Turner noted that Anacortes already pulls its household recycling out of the stream before it gets to the transfer station and asked how the rest of the county is being encouraged to recycle. Mr. Renz said there is no county ordinance requiring recycling but the County operates a recycling education program and also operates a curbside recycling program west of Highway 9; he still doesn't know if the density in the eastern half of the county would justify curbside recycling. Mr. Renz said the County is now recycling 40% of its waste, its goal is 50%. This is consistent with rates in the rest of state. There will always be a need to handle the residual waste, however. Mrs. Richardson noted that the Sauk and Clear Lake facilities take recycling for free. Mr. Renz agreed that those facilities do handle a lot of recyclables; Clear Lake took in more recycling than garbage last year. Mr. Adams observed that the new transfer station would be more environmentally friendly than the current one and asked how both the current and the proposed facilities handle stormwater runoff. Mr. Renz clarified that all liquid in the waste itself stays in the waste tanks and ships with it to the landfill, but runoff from the hard surfaces at the station drains into a 30,000 gallon tank and is then trucked to the Mt. Vernon wastewater treatment plant. Mayor Maxwell observed that the Solid Waste Governance Board will be the body that will eventually vote whether to go forward with the proposed new facility. He expects a vote in the next few months after Mr. Renz has had a chance to make this same presentation to the other municipalities. Mrs. Richardson asked how the new facility would be funded. Mayor Maxwell explained that there is some money in reserves and that the bond for the existing facility retires in 2013 so a new bond to fund the new facility in 2013 would not require any additional rate increases. Mr. Renz noted that until the design is complete they don't know the final pricing. Once they have that the Solid Waste Governance Board will vote on whether to proceed. The County's bond consultant advised that the debt service cost will remain consistent with the current rate if it bonds $5M over ten years, $7M over fifteen years or$9M over twenty years. Mr. Turner encouraged bidding the project during the current favorable bidding environment. Mr. Petrish asked how waste will be handled while the new facility is being built. Mr. Renz replied that the existing facility will continue to operate beside the new one while it is built. There may be some transitional traffic patterns but no reduction in service. Mrs. Richardson asked what will happen to the old building after the new one opens. Mr. Renz suggested demolishing it but acknowledged that that decision hasn't been made yet. The old building is not used in the new design so it would be available for other uses. Mayor Maxwell stated he will report back to Council after the Solid Waste Governance Board meets on Wednesday. Budget Workshop: Public Works Council proceeded with its review of the proposed Public Works Department budget for 2010. Mayor Maxwell observed that it is a conservative budget but does include some major projects including design for the Water Treatment Plant, the Pennsylvania Avenue upgrades, and the 6th Street improvements which will receive $700,000 of Tier 2 federal stimulus funding. Finance Director Steve Hoglund summarized the proposed budget, noting that the budget is balanced and all the major funds have positive balances. Mrs. Richardson asked if the budget takes into account the potential passage of 1-1033. Mr. Hoglund stated that the conservative proposed budget will be adequate regardless of whether the initiative passes. Public Works Director Fred Buckenmeyer thanked his staff for their diligent work to trim their budgets and implement cost saving measures. Some capital projects have been postponed to future budget years to accommodate the 2010 revenue forecast. Mr. Buckenmeyer reviewed the proposed budget with the Mayor and Council, answering questions and adjusting as appropriate. Mr. Buckenmeyer observed that the proposed budget does not reflect revenue or costs for the 6th Street improvements. Once the grant funding for that project is received a budget amendment will be prepared to reflect it. Mr. Adams observed that there will be a hiatus in the CBD sidewalk replacement project in 2010. Mr. Buckenmeyer noted that the $2.45M North Texas water line project is being funded by the refineries. He also observed that the Flounder Bay dredging project is not reflected in the budget document as it will be reimbursed by the affected tax parcels. Mrs. Richardson thanked the Mayor and staff for preparing a lean, balanced budget and doing the hard work of paring it back to essentials before bringing it to Council. At approximately 9:18 p.m. Mayor Maxwell adjourned the regularly scheduled study session of September 14, 2009. Anacortes City Council/Study Session Minutes September 14, 2009 4