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Home My WebLink About2015-03-09 Committee of the Whole MinutesTukwila City Council Committee of the Whole Meeting City Hall Council Chambers March 9, 2015 — 7:00 P.m. MINUTES COMMITTEE OF THE WHOLE CALL TO ORDER/PLEDGE OF ALLEGIANCE Acting Council President Duffie called the Tukwila City Council meeting to order at 7:00 p.m. He explained he is presiding this evening due to the absence of the Council President. Bob Giberson, Public Works Director, led the audience in the Pledge of Allegiance. OFFICIALS Present were Councilmembers Joe Duffie, Dennis Robertson, Allan Ekberg, Kathy Hougardy, De'Sean Quinn. Council President Kruller and Councilmember Seal were not present. CITY OFFICIALS David Cline, City Administrator; Bob Giberson, Public Works Director; Mike Villa, Police Chief; Peggy McCarthy, Finance Director; Vicky Carlsen, Deputy Finance Director; Brandon Miles, Economic Development Liaison; Jack Pace, Community Development Director; Minnie Dhaliwal, Planning Supervisor; Evie Boykan, Human Services Manager; Melissa Hart, Deputy City Clerk. SPECIAL PRESENTATION a. Bond issuance basics and considerations. Susan Musselman, Public Financial Management, Inc. Peggy McCarthy, Finance Director, stated Susan Musselman of Public Financial Management (PFM) is present to update the Council on bond issuance basics and considerations. She explained Council requested a more in -depth discussion on debt during the budget discussions, and staff worked with PFM on that request. Ms. Musselman utilized a PowerPoint presentation to update the Council on bond issuance basics and considerations. Highlights of the presentation included: Overview: 1) Introduction 2) Why Issue Bonds? 3) Debt Profile 4) Overview of Credit 5) Market Update 6) Bond Sale Process & Upcoming Transactions Introduction: The PFM Group — The City's Financial Advisor • PFM's Seattle office first opened in 2001, and the Washington practice expanded in 2013 with the acquisition of SDM Advisors • PFM serves over 80 clients in Washington and Oregon, including: • City of Marysville • City of Redmond • City of Bothell • City of Tukwila • City of Shoreline • City of Oak Harbor Tukwila City Council Committee of the Whole Minutes March 9, 2015 • City of Anacortes • City of Richland • City of Walla Walla • Skagit County • Whatcom County • Kitsap County • Clark County Page 2 of 14 Role of Financial Advisor • Registered "municipal advisor" (financial advisor) with the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB) • Fiduciary responsibility to act in the client's best interest — before, during, and after any transaction • New SEC Municipal Advisor Rule became effective July 1, 2014 • Establishes regulatory regime for municipal advisors (previously unregulated) • Prohibits underwriters /banks from providing "advice" except in very limited circumstances • PFM serves as an independent financial advisor to each one of our clients • Not affiliated with a broker - dealer (underwriter) or bank; no conflicts of interest as a result of such affiliation Why Issue Municipal Bonds? • Fund necessary, long -lived capital projects today, rather than waiting and "saving up" tax revenues Spread the costs of facilities or infrastructure over a long period of time — Taxpayers /customers pay for facilities they currently use — "Inter- generational equity" — Maintain flexibility and liquidity in fund balance Access capital at favorable interest rates - Interest rates generally are near historic lows - Interest on municipal bonds is generally exempt from federal income tax, resulting in lower borrowing rates Outstanding General Obligation Debt rfrrr 'X D �y4 KWfr"q , 1 g,: 25'd r,.,yy R"✓ /'✓ �P 1r 4�xpbyy': `Y . sr YN Ii t c t� qqr 1,` f1',,?'�y i 7 9 #µ i, }N P rf �RvlA. ♦a "1f. Y?�i,.t,aV l'r, ✓ �fp Y` 1 I' V,O Pe4 Yf ySY$�� 5. J}ry /r if .2V 'I 1i.. ,;,t 9,vfi5' , #�1✓ .C'y, ,. 1 j, ✓ 9!1 9 a� ?` r �,:. rf! Riff , r FIR 00 ,7, p1r a LTGO Refunding Bonds, 2008 $3,450,000 n/a Advance refund LTGO Bonds, 1999 4.00-6,00% 12/1/19 LTGO Bonds, 2010A 380,000 n/a ' Acquisition & construction of Southcenter Parkway improvements; 4,00% 12/l/15 LTGO Bonds, 20108 (Taxable 3,970,000 ' 6/1/20 ' emergency preparedness facilities, 3.61 - 5.41 %* 12!1124 BABs - Direct Payment) fixtures, tech. LTGO Refunding Bonds, 2011 4,185,000 12/1/21 Advance refund LTGO Bonds, 003A 1.25 -4.00% 12/1/23 LTGO Bond, 2013 803,221 n/a Park district facility improvements o 2.50/0 12/1/22 (pool) LTGO Bond, 2014 Taxable 3,850,000 12/1/19 Tukwila International Boulevard - property acquisition 10.85 - 4.86 % ** LTGO Note, 2014 (Taxable)*** 2,250,000 anytime ILIBOR + 1.00% 12/1117 Subtotal $18,888,221 SCORE Bonds, 2009A $497,200 1/1/20 SCORE Facility 4,25-5.00% 111/22 SCORE Bonds, 2009B 4.117- (Taxable 5,933,200 1/1/20 SCORE Facility 6.616 %* 1/1/39 BABs- Direct Payment) Valley Corn Refunding Bonds, 220,000 n/a Advance refunding of Valley o 3.75% 12/1/15 2010' Communications Center 2000 Bonds Subtotal $6,650,400 Total - Non -Voted General $25,538,621 Obligations Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 3 of 14 General Obligation Bonds - Security • Limited Tax General Obligation (LTGO) bonds: "full faith and credit" obligations of the City • City has pledged to bondowners that it will levy property taxes in amounts sufficient to pay debt service on bonds - Property tax pledge is limited by constitutional and statutory restrictions - Non -voted (councilmanic) general obligation - Not to be confused with voter - approved general obligation bonds, which carry an unlimited property tax pledge (not subject to constitutional and statutory limits) • Other funding sources can (and often are) used to make debt service payments, but are not specifically pledged as security for the LTGO bonds • Statutory limits on amount of LTGO debt a city may incur: - Limited to 1.5% of assessed valuation - City's current limit is approximately $75.8 million - Outstanding LTGO obligations (including proposed 2015 Bonds) of approximately $30.9 million Water and Sewer Revenue Bonds t '� ; tt frrr 'hr�t ,r y,.f,F „,, �...oaa'�,” ordJ Rim xisO "t � a I k r it n " d✓ N. l f' V i''i a'�r },ig'¢ r�r:If i } }. ►j�r . � ry k ,xn, k' yldi bX r',�i Y .'k+re75J. ., f'� ,f z.� uu r u .� -. , :i`. r� U"rf' "�,�r',. p,, ,! 3c �,,,.� 's.. �� r � p nS�9 (��r,, , '3 � S, Seriesr am`„ `�a,{ t Pa %i " <�l�'tQ, 4 3.15 - 5.375% f n/a Water and Sewer Design /construction of wastewater Revenue Bonds, $2,205,000 1211/16 pumping facilities, force mains and 4.00 - 4.50% 12/1/26 FSA 2006 sewer mains, lift stations, and storm drain and water line improvements • Revenue Pledge - Secured by net revenue of the Waterworks Utility and surface water utility system - No pledge of taxes, City taxing authority, or any other City revenue source - Senior pledge, ahead of Public Works Trust Fund or other State loans Additional Bonds Test - The City may issue additional parity Water and Sewer Revenue Bonds if net revenue meets a specific test set forth in the Bond Ordinance • Debt Service Reserve Fund - Additionally secured by a debt service reserve fund equal to the average annual aggregate debt service of all outstanding Water and Sewer Revenue Bonds - At the time the 2006 Bonds were sold, this requirement was $430,444 • Rate Covenant and Coverage Requirement - Covenant to maintain annual net revenues of 1.25x or greater of annual debt service. - In 2012 and 2013, the City maintained aggregate debt service coverage of 7.16x and 9.27x, respectively Local Improvement District Bonds yin Pn/J7 + ,t,� /n �,4y1i"V!p,,P rp,'; �#rl k "' 6''f b� , 3a # <fl;ht?:r;,,r" �a, (jf4 �EaN� � I k r it n " d✓ N. l f' V i''i a'�r },ig'¢ r�r:If i } }. ►j�r . � ry 1 t fm4dN k J {d,t `+�` fi t �I it :. . c o }5 ,,., ., �„ '1L`$3it' }.; �erp x; {n, m�ira k k,l;t, 7 ,�;�?!+td� tr,U"'Im" �s"„ ?t�Ir , ,f,•� ,i dry P>'� !,!,! 4 k"" "1 ' ,. Y , .r Local Improvement District No. 33 Bonds $6,082,500 n/a Public improvements within LID No. 33 3.15 - 5.375% 1/15/29 n/a 2013 Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 4 of 14 Local Improvement District 33: — Formed to improve urban access for the Southcenter area Secured by and payable solely from: — Amounts deposited to LID Bond Fund (assessments made in LID 33, along with interest and penalties) — City's Local Improvement Guaranty Fund — Guaranty Fund funded at closing with $668,750 of bond proceeds — If Guaranty Fund contains insufficient funds to make a payment on the Bonds, the City must issue interest - bearing warrants against the Fund in order to meet such payments — Rated "BBB" by Standard & Poor's Credit Strengths and Concerns — LTGO Bonds • Moody's Investors Service last reviewed the City's general obligation credit on December 18, 2012. Strenqths: • Tax base — Moderately sized for the rating level • Diversified revenue sources — City benefits from creation of the Tukwila (Pool) Metropolitan Park District • Manageable debt levels Challenges: • Tax base concentration • Contraction in assessed valuation and declines in General Fund balances Trend prior to 2011- 2012 Current Moody's "Issuer" Rating for the City is Aa3. Current Moody's LTGO Bond Rating for the City is Al. Moody's Financial Ratio Analysis — Peers • The City's financial and debt ratios are generally in line with its peers in Washington (cities with 15,000- 25,000 population) • The City's outstanding debt per capita is relatively high • However, this is tempered by the City's more modest outstanding debt as a percentage of its assessed value • The City also compares favorably in the size of its budget Moody's Financial Ratio Analysis — Medians • When compared against Washington cities of all sizes, the City's ratios are more obviously in line with "Aa3" medians Credit Strengths and Concerns — Revenue Bonds • Moody's Investors Service last reviewed the City's general obligation credit on November 3, 2006. Strengths: • Stable system Water supply and wastewater treatment contracts with Seattle and King County, respectively • Minimal expected capital needs City expected to reach build -out within several years • Strong financial and debt ratios Operating ratio well above rating median Ample cash balance (targeted at 9 months of operating costs) Health debt service coverage in recent years • Modest growth Approximately 1.2% annually • Competitive rates Challenges: • Outsize reliance on a single customer (Boeing) Diluted somewhat through recent hotel and retail development Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 5 of 14 • Historical rate increases have been sporadic and relatively large Rate policy revised to target more modest rate increases on a more regular basis Bond Sale Process • Identify both the funding need and repayment source /schedule • Identify finance team (both legal and financial professionals) • Develop documentation — Bond ordinance — Preliminary (and, later, final) Official Statements — Ratings presentation — Notice of Sale /Bond purchase agreement • Pass ordinance approving the bonds — Approve bond sale terms by Council ordinance; or — Delegate authority to approve bond sale within key parameters (maximum size, true interest cost, and maturity) • Receive rating(s) • Post Preliminary Official Statement • Sell bonds; sign Bond Purchase Agreement • Closing • A typical bond sale process takes approximately 2 -3 months, depending on the nature of the transaction Methods of Bond Sale • In a competitive sale, the issuer awards the bonds to whichever underwriter offers the lowest True Interest Cost (TIC) at a predetermined bid date and time — The issuer works with its financial advisor and bond counsel to structure the bonds, obtain a credit rating, prepare disclosure, and generally develop the transaction for sale — Bids are received from underwriters nationwide, with most bids arriving electronically within minutes or seconds of one another • In a negotiated sale, the issuer selects an underwriter (or group of underwriters) in advance of the sale date, then negotiates interest rates on the day of sale — Underwriter may be selected through a competitive process (e.g. RFP) — Underwriter may work with other members of the finance team to develop the bond structure, obtain ratings, prepare disclosure, etc. — On the day of sale, the underwriter obtains orders for the bonds from various investors, and in turn prepares a purchase offer for the issuer • In a direct placement, the issuer sells bonds directly to a single investor, typically a bank or other financial institution Potential Upcoming City Financing • Limited Tax General Obligation Bonds, 2015 — Not to exceed par amount of $6.25 million, final maturity December 1, 2035 — Boeing Access Road Bridge retrofit project, Interurban Avenue Improvement project, and other road construction and capital improvement projects as deemed necessary by the City • 2016 capital budget includes $4.4 million in bonds to construct sidewalks and underground utilities on 42nd Avenue South • Potential refunding of Water and Sewer Revenue Bonds, 2006, to achieve debt service savings • Many municipalities consider the potential for issuing bonds ahead of schedule, in order to lock in current market rates and avoid selling bonds in a time of rising interest rates • Question: is it better to issue bonds early (and make additional interest payments) or issue bonds later (and risk higher interest rates)? — How much would rates need to rise between "now" and "then" in order to be indifferent (break even ?) Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 6 of 14 Refundinq Analysis — Water and Sewer Revenue Bonds • On November 1, 2006, the City issued $3,180,000 in Water and Sewer Revenue Bonds to fund the Neighborhood Revitalization — Allentown and Foster Point Sewer Systems Project — Callable Par: $1,910,000 — Call Date: 12/1/2016 — Interest Rates: 4.00 — 4.50% • Based on current market conditions, the City may refund the outstanding 2006 Bonds and realize modest debt service savings. Councilmember Robertson stated that the City only borrows money for long term financial needs like buildings. Councilmember Ekberg had a question concerning Slide 6: Depending on what the Council does, would the graph for 2018, 2019, 2020, and 2021 increase? Ms. Musselman said the plan assumes the property would be sold and the proceeds would be used to retire the debt. Councilmember Ekberg questioned whether Moody could be challenged when it comes to Boeing being a large player in Tukwila. Ms. Musselman stated that Moody can be educated on what the City does. She feels the Boeing influence is outdated and a regional comment. It should not be specifically directed towards Tukwila. In reference to Direct Net, Councilmember Quinn felt the population of Tukwila, unlike the other cities used in comparison, varies greatly from day to night in a unique way and that should be figured into the equation of the financial analysis. Ms. Musselman explained that due to its large retail center, Tukwila does have a larger per capita sales tax and stands alone in comparison with the other cities in the area. Burlington is another city that encounters this phenomenon, but it is a much smaller city; thus it was not used in this comparison. Councilmember Quinn asked how Tukwila is looked at by the rating agencies because on paper it looks different than in reality. Ms. Mussleman said that Moody looks at other factors. In additional to financial data, management and economy also figure into the rating. Acting Council President Duffie thanked Ms. Mussleman for her report and presentation. Acting Council President Duffie also thanked the videographer, Jonah Kozlowski, for recording the Council meeting for TV. CITIZEN COMMENTS Binita Dahal, 1632 Monterey Ct NE, Renton, stated that affordable housing in Tukwila is very difficult to locate for many families who want to live and work in Tukwila. Guadalupe Mahoney, 20155 Bagley Drive North, Shoreline, commented about the condition of low income housing in Tukwila. Many immigrant families live in poor conditions with insects that can harm people and make illnesses worse. Another issue is security for people living in low income housing. The consequence of living in poor conditions is becoming more dangerous for the community. She spoke of two incidents where families lost their housing because the houses were not safe to live in and were condemned. The Councilmembers stated that the citizens are being heard and these issues will be directed to the City and the proper authorities. Kathleen Gantz, Family Support Coordinator, Tukwila School District, in reference to the previous comment about the two families who lost their homes, stated the homes did not meet livable standards and there was no other housing available that met their needs so they had to leave the community. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 7 of 14 Councilmember Hougardy asked Ms. Mahoney about the trailers or manufactured homes that are being purchased that are in bad condition. Is the City missing an inspection when these homes are purchased? Ms. Mahoney stated that it is her understanding these homes are generally purchased under an agreement between the current owner and the new owner. The Latino community would like to live in a safe, clean place. To her knowledge there are no inspections done during these transactions. Councilmember Robertson felt it might be a good idea to have a meeting with these citizens, the Community Affairs and Parks Committee, and Code Enforcement to get a total picture on this issue. Guled Ali, 22247 35th Place South, #D -204, Kent, a former resident of Tukwila, feels the same way about the affordable housing. They want to live in Tukwila, but even with Section 8 vouchers, they cannot find housing. The conditions he has seen in the apartments he has visited is poor, but the residents fear eviction if they complain about the conditions. He complimented the Council on the Tukwila Village project. Acting Council President Duffie stated that one of the purposes of open Council meetings is for the public to bring their input to the Council so that when there are difficulties they can be addressed by the City. Ohn Ohnmar, 18315 SE 263rd Place, Covington, works as a Burmese Community Liaison for the Tukwila School District. She is also frustrated with finding housing for families in Tukwila. Evie Boykan, Human Services Manager, stated that housing and utility costs are the largest issues. These are very complex issues and difficult to solve. There is a steady decline in housing that is eligible for Section 8, which contributes to the shortage of affordable housing. Councilmember Hougardy asked how many units for rent in Tukwila are three- or four - bedroom apartments. Ms. Boykan stated there are very few larger apartments in Tukwila. The rent for those units that are on the market are significantly higher than people who need them can afford. Jack Pace, Community Development Director, stated most of the apartments in Tukwila are one and two bedrooms. Most of the three- bedroom rentals are single family housing. Less than 10% of the rental units have more than two bedrooms. Councilmember Ekberg stated that within the next six or seven months, the Council will be looking at Code Enforcement procedures and how to take all things into account including affordability, housing, rentals and living conditions and come up with possible solutions. David Cline, City Administrator, stated that when the City brought the Strategic Plan to the citizens, one of the goals was to create safe, inviting and livable neighborhoods. Beginning next week, there will be three areas of focus: one is public safety, the second is affordable housing, and the third is pride and ownership in our community. Councilmember Quinn asked Ms. Gantz to give her perspective on what she sees when she interacts with the community. Ms. Gantz said there are two areas of concern that she has seen in her role in the last four years. One area of great concern is that the homeless numbers have grown out of control. At this point, there are over 300 homeless students in the district. There are multiple reasons why these children are homeless. Several are stuck in the motel cycle where the parents have been laid off or they are stuck in the poverty cycle. One of the schools in the district typically hits 25% of their students being homeless by the end of the school year. The other issue is poor living conditions. One of her staff members had to write an L &I claim for bedbug bites she received while doing a home visit. This is what the students are dealing with every day. These people fail to report these conditions due to fear they will be evicted. Some of these issues could be managed by requiring landlords to be accountable to safe living conditions. She and her staff have seen some of these families living in trailers with no running water, no electricity and no sewer hook -ups. These deplorable living conditions not only impact children's health, it impacts their ability to learn. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 8 of 14 SPECIAL ISSUES a. An ordinance providing for the issuance of $6,250,000 Limited Tax General Obligation (LTGO) Bonds for arterial streets. Councilmember Hougardy indicated this item was discussed at the Finance and Safety Committee meeting on March 3, 2015. The committee members were unanimous in recommending approval. Peggy McCarthy, Finance Director, explained the draft ordinance would authorize the issuance of up to $6.25 million in limited tax general obligation bonds for the Boeing Access Road Bridge retrofit project and the Interurban Avenue Improvement project. The 2015 -2020 Capital Improvement Program (CIP) shows the City's share of costs for the two projects as $6.3 million and total anticipated bonding as $5.6 million. Annual debt service for this bond issue has been budgeted at $448,000, and the current estimate is $425,000. The bond issue will fund the majority of the City's share of costs and the annual debt service is expected to be less than that shown in the adopted budget and CIP. The Finance and Safety Committee requested staff update the City's "Schedule of Prior, Existing, and Future Anticipated Long - Term Debt Service" to reflect costs associated with the bonds. She referred to the updated schedule on pages 29 through 31 of the agenda packet. Ms. McCarthy introduced Alice Ostdiek, Bond Counsel with Foster Pepper. Ms. Ostdiek explained the draft ordinance is a straightforward bond issuance. She referenced pages 19- 20 of the agenda packet (Exhibit A) that provides a description of the bonds. This process is the normal bond process the City has used in the past. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. b. An ordinance amending Ordinance Nos. 2464 and 2465 to conform debt service payment dates. Councilmember Hougardy indicated this item was discussed at the Finance and Safety Committee meeting on March 3, 2015. The committee members were unanimous in recommending approval. Ms. McCarthy explained the draft ordinance would amend Ordinance Nos. 2464 and 2465 to conform debt service payment dates stated therein to the dates specified at closing by the purchasers of the Note and the Bonds referenced. The amendment to Ordinance No. 2464, issuance of the Limited Tax General Obligation Bond Anticipation Note, 2014, would accelerate payment from April to March. The amendment to Ordinance No. 2465, issuance of the Limited Tax General Obligation Bonds, 2014, would provide an additional eleven months before a rate reset is required, which is an advantage to the City. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. c. Authorization to spend lodging tax funds for street pole banners. Councilmember Hougardy indicated this item was discussed at the Finance and Safety Committee meeting on March 3, 2015. The committee members were unanimous in recommending approval. Brandon Miles, Economic Development Liaison, explained the City installed pole banners within the City in 2008 -2009. Staff is seeking Council approval of a $6,500 expenditure in lodging tax funds for the manufacture and installation of street pole banners around the Starfire Sports Complex. The banners will be installed along Fort Dent Way and Interurban Avenue to promote the second Sounders team, "S2," whose games are expected to attract many visitors to the City. As required by law, the City's Lodging Tax Advisory Committee considered the funding request at the February 20th meeting and recommended that the Council approve the request. Lodging tax funding is limited to actions that promote tourism. The Councilmembers exchanged comments and asked clarifying questions on the proposed design for the banners. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE CONSENT AGENDA FOR THE NEXT REGULAR MEETING. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 9 of 14 d. An Interlocal Agreement extending animal control services. Councilmember Hougardy indicated this item was discussed at the Finance and Safety Committee meeting on March 3, 2015. The committee members were unanimous in recommending approval. Vicky Carlsen, Deputy Finance Director, explained the proposed agreement would extend the current Animal Services Interlocal Agreement with King County through December 31, 2017. In November 2014 the Council authorized the Mayor to sign a non - binding Indication of Interest to extend the agreement for two years. However, to make that official, all 25 contract cities needed to agree. The City was notified in January that all 25 participating cities signed the non - binding Indication of Interest, and now the official extension is ready for Council approval. At the March 3 Finance and Safety Committee meeting, the Committee requested that a representative from Regional Animal Services of King County attend the meeting this evening to provide the Council with an update. Ms. Carlsen introduced Norm Alberg, Director, King County Records and Licensing. Mr. Alberg stated the goal is to have the 25 participating agencies approve and sign the Interlocal Agreement by the end of June 2015. He provided materials to the Council that highlights the services provided to the City by Regional Animal Services of King County (RASKC). Councilmember Robertson asked if a new agreement will be provided to the City for consideration prior to the (December 31, 2017) expiration of the current agreement for services. Mr. Alberg stated that will be a question for the Joint City /County Committee (JC4) to discuss. All member cities and King County meet once every four months to review the service being provided. He explained that it takes approximately one year to find an alternative service provision. Once the proposed agreement has been signed by all participating cities, the JC4 Committee can move forward with discussions about future service. Councilmember Quinn said in the past there were discussions about the shelter capacity, and the need to increase that space. He asked if those issues have been addressed. Mr. Alberg explained they have made a major investment in the shelter that included upgrades to the kennels. They have noticed with the education and spay and neuter program there has been a decrease in sheltering. In the past, the shelter was over 12,000 animals per year, and that has now dropped to 4,000 animals per year. Councilmember Hougardy asked for clarification on the data provided for "Field Call Counts and Responsiveness" (page 5 of the handout). Mr. Alberg explained the call counts and responsiveness percentages identify the number of calls received for service in the City. Calls are prioritized based on the following: Priority 1 — Immediate threat to life, health, safety of humans — response goal 1 hour Priority 2 — Immediate threat to life, health, safety of animals — response goal 2 hours Priority 3 — Urgent - Potential threat to life, health, safety of humans or animals — response goal 4 hours Priority 4 — Non - emergency — non - severe bite, stray animal confined, supervisor discretion for response Priority 5 - Non - emergency — non - urgent service requests, nuisance, follow -up inspections, supervisor discretion for response Councilmember Robertson commented that the City recently updated the animal control regulations that make it easier for the Police Department to respond to animal control issues. Mr. Alberg stated he has heard great things from the animal control officers relating to the partnership with the Tukwila Police Department. Additionally, the City of Tukwila (City Clerk's Office) hosts RASKC's quarterly marketing meeting to discuss ways to increase pet licensing. He thanked the City for those partnerships. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 10 of 14 e. A consultant contract for the BNSF Intermodal Facility Access Project. Councilmember Hougardy indicated this item was discussed at the Finance and Safety Committee meeting on March 3, 2015. The committee members were unanimous in recommending approval. Bob Giberson, Public Works Director, explained the Council was presented with the consultant selection and draft scope of work for the BNSF Intermodal Facility Access Project on November 24, 2014 for discussion. The Council comments received at that meeting have been addressed in the finalized scope of work and fee schedule. BNSF has committed to 50% funding for the proposed contract (City contract #14 -088), and they have been a great partner on this project. The Council is being asked to approve the proposed contract with David Evans and Associates, the scope of work and fee to perform the analysis required for the project. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE CONSENT AGENDA FOR THE NEXT REGULAR MEETING. f. An ordinance approving a Development Agreement with TSD, LLC for shared use of parking in the public right -of -way of Christensen Road. Councilmember Robertson indicated this item was discussed at the Community Affairs and Parks Committee meeting on February 23, 2015. The committee members were unanimous in recommending approval. Tukwila TSD, LLC is proposing to develop a new five -story hotel at 90 Andover Park East with approximately 90 guest rooms. One parking space per room is required for lodging uses in the Tukwila Urban Center Transit Oriented Development District. The developer has submitted a site plan showing that the required number of parking stalls cannot be accommodated on the project site. Therefore, the developer is proposing shared use of parking in the right -of -way of Christensen Road. In order to help facilitate the discussion on this proposal, the discussion can be broken down into following issues: 1. Does the proposal comply with the City's shoreline regulations? 2. Does the City want to allow use of public right -of -way for shared parking for the hotel? 3. How many parking spaces should be shared between the hotel and trail users and how many should be guaranteed for the trail users? 4. What is the appropriate compensation for sharing parking in the right -of -way? Councilmember Robertson said that during the development discussion with the Community Affairs and Parks Committee the parking issues centered around how much parking is needed and how to enforce violations. It will hard to differentiate between trail users versus hotel users and that, in turn, drives the issue of compensation. Minnie Dhaliwal, Planning Supervisor, stated this item was previously discussed by the Community Affairs and Parks Committee (CAP) on November 12, 2014; Committee of the Whole held a public hearing on November 24, 2014; and it was referred back to the CAP Committee on December 1, 2014. The Council asked staff to provide information on how the proposed development complies with the City's shoreline regulations and asked the CAP Committee to further review the proposal and make a recommendation to the Committee of the Whole. Since that time, the developer has provided options for Council consideration. At the recent CAP meeting the Committee recommended moving forward Options 2 and 3 for Council discussion. 8:49 p.m. Acting Council President Duffie exited the Council Chambers Ms. Dhaliwal reviewed development Options 2 and 3 for the Council relating to shared parking. Option 2: Replace the asphalt in the cul -de -sac area with landscaping, along with a monetary payment of $93,849 to the City. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 11 of 14 Option 3: Convert the cul -de -sac into parking area, with a monetary payment of $145,897 to the City. She stated the Tukwila Park Commission has since reviewed the proposed development and the minutes from those meetings are on pages 127 and 128 of the agenda packet. 8:51 p.m. Acting Council President Duffie returned to the Council Chambers 1). Does the proposal comply with the City's shoreline regulations? The area of the shoreline is designated as Urban Conservancy and the shoreline buffer ends on the river side of the existing roadway (Christensen Road). The conceptual site plan showing the hotel location and other site improvements meets the shoreline use, site setback and site configuration requirements. Detailed review of the construction plans will be done during the shoreline substantial development permit review process, which is an administrative decision issued after public notification to the interested agencies and surrounding property owners. The staff report of the shoreline permit is then sent to the Department of Ecology for their review. Information on pages 129 -131 of the agenda packet explains the shoreline review process and code criteria, including a map showing the shoreline buffer. 2) Does the city want to allow use of public right -of -way for shared parking for the hotel? The existing site is a former gas station. The fuel canopy and the underground tanks were removed in 2007. In 2008, land use approval was granted for a 12,000- square -foot single -story retail building that was never constructed. The existing lot is only 50,000 square feet and without the shared parking agreement the likely form of development to occur on this site is single story. The current proposal to share the parking in the right -of -way would allow a five -story hotel to be constructed. This form of development fits in with the vision anticipated by the Southcenter Subarea Plan for this area. The previous memo to the City Council (Attachment A on page 121 of the agenda packet) lists the goals and policies of the City's Comprehensive Plan and the Southcenter Subarea Plan that are achieved by the City entering into this development agreement. The proposal includes: • Shared use of parking in the right -of -way. • Initial term of 50 years with an option to extend for 30 additional years. • The agreement shall terminate if any of the following terms are not met a) The applicant fails to submit a complete building permit application for the construction of the hotel within one year; or if the construction is not completed within three years; or if the developer does not comply with maintenance obligations; b) If the property is redeveloped or a change of use occurs; c) If WSDOT widens 1 -405 or should any other project or condition arise that requires reconfiguration of Tukwila Parkway and /or the project parking area; d) If the developer abandons the project; e) The developer shall renegotiate a new agreement or provide documentation showing how the number of parking spaces required by code will be provided if the hotel use is to continue after the expiration of the agreement. Councilmember Ekberg asked for confirmation that should a developer want to bring in a pub, restaurant or anything that would change the parking, that would nullify the development agreement. Ms. Dhaliwal confirmed that was correct. The question before the Council is does the City want to enter into a development agreement and allow shared parking? Councilmembers Ekberg, Hougardy and Quinn are in support of this agreement. After Council discussion there was Council support to allow use of public right -of -way for shared parking for the proposed development. 3) How many parking spaces should be shared and how many should be guaranteed for the trail users? Tukwila Municipal Code requires one parking space per hotel room. The developer has stated that the franchise requires one parking space per hotel room plus two additional spaces. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 12 of 14 Per Smith Travel Research Report for hotels in Tukwila's general market, the occupancy rate for year 2014 varied from 80 to 90 percent during the high season (May through September) with December /January being the lowest at around 60 percent, for an average annual room occupancy of 77 percent. The proposed hotel has 53 on -site parking spaces (hotel use only) and would like to share 45 parking spaces within the right -of -way (hotel and trail users). There are currently only 27 parking spaces in the right -of -way and the developer has proposed to add 18 new parking spaces within the undeveloped right - of -way, resulting in 45 spaces in the right -of -way. 41 out of 45 spaces will be shared between the hotel users and trail users and four spaces will be reserved exclusively for trail users. This allows four guaranteed spaces for the trail users, but they could also park anywhere in the remaining 41 spaces. There is currently no data on the number of spaces used by trail users. However it can be stated that hotel parking spaces are expected to be used primarily in the evening and nighttime hours and parking for the trail access is expected to be used during daylight hours. The proposed hotel has only a small meeting room and no restaurant, therefore the parking demand is anticipated to be less than a hotel with a large meeting room /convention facility. The developer has also provided parking data for the hotels currently operated by them showing that the parking demand is less than one car per occupied room (Attachment D, pages 133 through 135). 4. What is the appropriate compensation for sharing parking in the right -of -way? Since the last meeting the.developer has provided the following options for the City to consider as appropriate compensation for allowing shared use of parking: Option 2: Replace the asphalt in the cul -de -sac area with landscaping, along with a monetary payment of $93,849 to the City. Option 3: Convert the cul -de -sac into parking area with a monetary payment of $145,897 to the City. Councilmember Hougardy prefers either Option 1 or 2. The agreement for parking would extend out 50 years and no one knows what will happen at that time. There could be conflicts in parking during peak season use because the trails are used heavily at those times, and the hotel parking lot could be full. There are several parks and trails that have this parking issue already in the area. She would like to see the option to reserve more parking spaces for the trail in the future as there is minimal access to the trailhead. Councilmember Quinn is in favor of Option 2 because the City retains the flexibility to construct a pocket park in the future. Councilmember Ekberg stated that the struggle is between what is right for the people who use the trail, what is right for the developer and what is right for the environment. He would like to support Option 3 because it has more parking and removes the possibility of overuse of signage. It also provides the largest amount of funds that can be dedicated to shoreline zone interests. Councilmember Robertson feels there should be a statement to the alternative chosen that reads that it is the intention of the City to use the compensation for re- vegetation of the river. Councilmember Quinn stated there are creative ways to solve this problem. The developer brought the City three different options. There is an opportunity for a pocket park in Option 2, and with some small tweaks this development and the parking issue could be resolved successfully. Councilmember Robertson is not in favor of a pocket park in that location. He is in favor of inserting a clause in the motion that will come at a later meeting to state it is the intention of the City to use the compensation for re- vegetation of the river. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 13 of 14 Councilmember Ekberg said there are a limited number of parking spaces in this development and that is why shared parking was agreed upon with the developer. David Kwok, 21109 66th Avenue South, Kent, would like to answer some of the questions the Council is asking about his project. Based on his experience in the field of hotel construction and parking, most people do not spend much time in a hotel room. They are out finding places to explore in the area, so the parking lots do not fill up until later in the evening. This is why the shared parking idea would work well on this site. Councilmember Hougardy asked about the franchise's flexibility in the number of parking spaces if the City would like to have two more designated spots for the people who live in the community to have access to the trailhead. Mr. Kwok responded by saying the franchise is generally not flexible. Councilmember Hougardy asked Ms. Dhaliwal about a contingency plan for parking should the lot become full. Ms. Dhaliwal stated that in terms of planning for the Southcenter area, the 20 -year plan envisions transformation to a more walkable district so people will not be driving everywhere. One of the things the Shoreline Master Program does is require public access through property. As we see new development occurring, this requirement would be enforced. Tom Kennedy, 14180 SE 182nd Street, Renton, stated that his company did the feasibility study for the hotel and his client would be willing to put signage in the hotel lot stating that in the event there is not available parking in the public area, the hotel parking lot is available. That would eliminate the need for specific spaces and the public could utilize it the same as the hotel guests. Dale Sweeney, 5715 143rd Place SE, Bellevue, is the architect for this project and feels it is important to note that there will be a considerable number of guests staying at the hotel who will be shuttled between the airport and the hotel; therefore, parking will not be an issue for those guests. Councilmember Robertson asked Mr. Giberson for an estimated guess on what it would cost to remove the cul -de -sac in question. Bob Giberson, Public Works Director, stated it would cost approximately $20,000 to remove the asphalt. Ms. Dhaliwal stated that exhibit one was not completed at this point because it's a legal description that the surveyor has to prepare. If Council has no objection, administration will put that exhibit in at a later date after the option decision has been made. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. REPORTS a. Mayor Mayor Haggerton was not present. b. City Council Councilmember Hougardy announced that the Equity and Diversity Commission will be hosting a book drive in May. She asked that the Councilmembers provide suggested locations for collection bins. More information will be forthcoming in the near future. c. Staff There was no report. Tukwila City Council Committee of the Whole Minutes March 9, 2015 Page 14 of 14 d. City Attorney The City Attorney's presence is not required at Committee of the Whole meetings. e. Intergovernmental The Council Analyst was not present. ADJOURNMENT 9:44 p.m. ACTING COUNCIL PRESIDENT DUFFIE DECLARED THE COMMITTEE OF THE WHOLE MEETING ADJOURNED. e Duffie, Acting Council President Minutes by Lady of Letters Reviewed /edited by Melissa Hart, Deputy City Clerk APPROVED AND SIGNED BY THE ACTING COUNCIL PRESIDENT ON 03/23/2015 AVAILABLE ON THE CITY'S WEBSITE 03/24/2015