HomeMy WebLinkAbout2015-05-11 Committee of the Whole MinutesTukwila City Council Committee of the Whole Meeting
City Hall Council Chambers May 11, 2015 — 7:00 P.M.
MINUTES
COMMITTEE OF THE WHOLE
CALL TO ORDER/PLEDGE OF ALLEGIANCE
Council President Kruller called the Tukwila City Council meeting to order at 7:01 p.m
Councilmember Duffie led the audience in the Pledge of Allegiance.
OFFICIALS
Present were Kate Kruller, Council President; Councilmembers Joe Duffie, Dennis Robertson,
Allan Ekberg, Verna Seal, Kathy Hougardy, De'Sean Quinn.
CITY OFFICIALS
Jim Haggerton, Mayor; David Cline, City Administrator; Bob Giberson, Public Works Director;
Gail Labanara, Public Works Analyst; Ryan Larson, Senior Project Manager; Dave Sorenson, Project
Manager; Bruce Linton, Deputy Police Chief; Todd Rossi, Police Sergeant; Derek Speck, Economic
Development Administrator; Brandon Miles, Economic Development Liaison; Stephanie Brown, Human
Resources Director; Kim Gilman, Human Resources Analyst; Peggy McCarthy, Finance Director;
Mary Miotke, Information Technology Director; Jay Smoot, Information Technology Specialist;
Laurel Humphrey, Council Analyst; Melissa Hart, Deputy City Clerk.
ANNOUNCEMENT
Council President Kruller stated due to a communications issue with scheduling, the Police Department
would like to make their "Life Savings Awards" presentation tonight. If there is Council consensus, we will
add this item under "Special Presentations" as Item 2a.
COUNCIL CONSENSUS EXISTED TO AMEND THE AGENDA TO ADD POLICE DEPARTMENT "LIFE
SAVING AWARDS" AS "SPECIAL PRESENTATION" ITEM 2A.
SPECIAL PRESENTATION
a. Life- saving awards. (Per the above amendment).
Bruce Linton, Deputy Police Chief, explained a patrol officer never knows what to expect at the beginning
of their shift. They must be prepared mentally and physically to deal with the wide range of possibilities of
each shift. Officers Valdez and Zaehler didn't know what to expect on the evening of December 14,
2014. They are here to be awarded the "Life Saving" medals. Deputy Chief Linton introduced Sergeant
Todd Rossi, Officers Valdez and Zaehler supervisor, who updated the Council on an incident from that
night.
Sergeant Rossi explained that in the early morning hours of December 14, 2014, Officer Joseph Zaehler
and Officer Matthew Valdez responded to a 9 -1 -1 call from residents of the 4800 block of South 146th
Street that a vehicle had driven off the roadway, rolled over onto its roof and was on fire. Officer Valdez
was the first officer on scene and made contact with the driver of the vehicle who appeared trapped and
was uncooperative. Officer Zaehler arrived next on scene and their attempt to extinguish the fire was
unsuccessful. The officers worked together to extricate the uncooperative driver from the burning vehicle,
and with the assistance of a third officer, carried the driver away from the burning vehicle. The officers'
quick thinking and selfless actions were crucial to saving the man's life, and their actions exemplify the
City's core values of Caring, Professional and Responsive.
Deputy Chief Linton and Sergeant Rossi presented Officers Zaehler and Valdez with the life- saving
medals for their actions on December 14, 2014.
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May 11, 2015 Page 2 of 8
The officers thanked the Council and City for the recognition and introduced family members in
attendance.
b. State of the City's health care plan. Doug Evans, President, R.L. Evans Company.
Stephanie Brown, Human Resources Director, explained they are here this evening to update the Council
on the status of the City's self- funded health care plan and the future excise tax on premium health care
plan coverage. Ms. Brown stated there are technical issues with the video streaming, restricting to the
viewing audience's ability to see the presentation. A copy of the PowerPoint will be available Tuesday,
May 12, 2015, in the City's Digital Records Center. Ms. Brown introduced Doug Evans, President of R. L.
Evans Company.
Mr. Evans utilized a PowerPoint presentation to update the Council on the City's health care plan, and
highlights of the presentation included the following:
ACTIVE EMPLOYEE PLAN
➢ Self- funded Medical /Prescriptions (Rx), Dental and Vision Program
➢ Healthcare Management Administrators (HMA), a subsidiary of Regence BlueShield, provides
Administrative /Claims Processing services
➢ Stop loss Insurance purchased through Sun Life (2015 Individual Deductible = $175,000)
➢ Roger Burton provides the annual actuarial review to set funding rates; required by Washington
Administrative Code (WAC)
COST DRIVERS
➢ It is expected that claim costs fluctuate year -to -year for the City's plan size /structure
➢ The City purchases stop loss insurance for protection against catastrophic events that could
impact the plan
➢ Recent large claim activity (medical and Rx) has affected utilization costs
➢ High -cost services for the group most recently (2013 versus 2014) were emergency room
( +54 %), surgical facility fees ( +176 %), hospital room and board ( +169 %), and miscellaneous
outpatient services (71 %)
LEOFF I RETIREE (LIR) PLAN
➢ Self- funded: Administration similar to the City's Active Employee Plan
➢ City has liability for non - insured Long Term Care (LTC) Expenses and qualified expenses not
covered under health insurance contract. As members get older, the City is more likely to incur
LTC expenses.
➢ City insures a portion of LTC risk through separate insurance policies
➢ As members turn 65 (and enroll in Medicare), the City's liability for health plan covered expenses
decrease. There are currently 33 out of 39 retirees Medicare - eligible.
COST DRIVERS (LIR)
➢ High -cost services for this group most recently (2013 vs. 2014) were anesthesia ( +120 %),
hospital room and board ( +107 %), intensive care ( +1028 %), and outpatient surgery ( +342 %)
WHAT IS THE CADILLAC TAX?
➢ Effective January 1, 2018 the Affordable Care Act (ACA) imposes a tax on plans offering
premium coverage.
o Goal is to discourage overuse /abuse of healthcare system and help finance uninsured
coverage.
➢ All employer- sponsored plans are potentially affected, regardless of employer size.
➢ Guidance on how the tax will work remains vague
CADILLAC TAX BASICS
➢ 40% excise tax on the cost of insurance (and related benefits) if it exceeds preset thresholds:
o $10,200 annual limit for individual coverage - $27,500 annual limit for family coverage
o $11,850/$30,950 for retirees and high -risk professionals (e.g., police, fire, linemen)
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May 11, 2015 Page 3 of 8
• High risk employees must make up a majority of plan participants for employer to
qualify for higher threshold.
➢ Thresholds may be adjusted for 2018
o Based on inflation factors involving the federal employees' health plan and on age factors
for a specific group versus national average
➢ After 2018 thresholds increase based on the Consumer Price Index
WHAT IS INCLUDED?
➢ Tax calculation will include the value of employer and employee contributions made on a pre -tax
and after -tax basis for ...
• Medical /Rx` ("calculation excludes stand -alone dental and vision coverage)
• Healthcare Flexible Spending Account (FSA)
• Employer and Employee (Section 125) Contributions to Health Savings Account (HSA)
• Health Reimbursement Arrangement (HRA) — including Voluntary Employee Beneficiary
Association (VEBA) programs
o Worksite clinics
CALCULATION EXAMPLE
➢ Tax calculated separately for each employee /retiree
➢ 2015 rate for family coverage = $1,912 x 12 month = $22,944
➢ Medical Inflation at 8% per year:
0 2016 - $24,778
0 2017 - $26,762
0 2018 - $28,903 (Exceeds $27,500 threshold by $1,403)
➢ In 2018, $1,403 subject to 40% excise tax
➢ Total tax owed for this employee = $561
CHALLENGES
➢ ACA and other laws are increasing plan cost:
• Elimination of annual dollar limits and all lifetime limits
• Extending coverage for children to age 26
• Removal of pre- existing condition limitations
• Mental health parity
• New rules on who must be offered coverage (employee eligibility)
• Projected cost shifting by providers to account for increased Medicaid and Medicare
enrollment
• Inclusion of all copays, deductibles and coinsurance in the Out -of- Pocket Maximum (prior
to 2014 only coinsurance applied to OOPM)
➢ Healthcare inflation expected to accelerate in current economic climate
➢ Final regulations will not likely be available until late 2016
➢ Unknown if Congress will change any of the provisions, though it appears unlikely that this will be
repealed
CONSIDERATIONS
➢ No one wants to send money to D.C. for a tax on benefits
➢ Opportunities for lowering current benefit costs (subject to collective bargaining)
➢ Best long -term solutions (Trends):
• High Deductible Health Plan with Health Savings Accounts (consumer- directed health
plan designs)
• Some contributions to HSAs are not included in Cadillac Tax Thresholds
• 'Skin in the game' encourages consumerism
➢ Providing input to Legislature through the Association of Washington Cities and National League
of Cities
The Councilmembers exchanged comments and asked clarifying information on the data presented in the
PowerPoint presentation. There was Council agreement that any future presentation materials for this
type of presentation would be included in the agenda packet for Council review prior to the meeting.
Tukwila City Council Committee of the Whole Minutes
May 11, 2015 Page 4 of 8
Ms. Brown stated that if Councilmembers have questions on the presentation, they can email the
questions to her for a response. Additionally, a hard copy of the PowerPoint will be distributed to the
Council Tuesday morning.
CITIZEN COMMENTS
There were no citizen comments
SPECIAL ISSUES
a. An Interlocal Agreement with Valley View Sewer District.
Councilmember Robertson indicated this item was discussed at the Utilities Committee meeting on
April 28, 2015. The committee members were unanimous in recommending approval.
Bob Giberson, Public Works Director, explained the Interlocal Agreement between Tukwila and the Valley
View Sewer District will allow Valley View Sewer District to plan and construct public sewers to serve the
Loop Area. The Loop Area is bounded by South 160th Steet, 42nd Avenue South, State Route 518, and
51St Avenue South. Prior to construction of the City's 42nd Avenue South Phase III street improvements
project, Valley View Sewer District intends to install a manhole and stub out to the right -of -way line for
future sewer service in 42nd Avenue South to serve the Loop Area. The future installation of sewers
would allow additional growth in the neighborhood.
The Councilmembers asked clarifying questions of staff and exchanged comments on the proposed
Interlocal Agreement.
Sharon Mann, 4452 South 160th Street, stated she is Chairperson for the Valley View Sewer Citizen
Advisory Committee. She clarified that it is not district policy to mandate or enforce sewer connections.
COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE CONSENT AGENDA AT THE
NEXT REGULAR MEETING.
b. A resolution regarding human trafficking.
Councilmember Hougardy indicated this item was discussed at the Finance and Safety Committee
meeting on May 5, 2015. The committee members were unanimous in recommending approval.
Law enforcement and service agencies nationwide have been partnering to increase emphasis on the
demand side of prostitution and human trafficking, acknowledging that children and vulnerable adults
should be considered victims of commercial sexual exploitation. "Buyer Beware," an initiative that is led
by the Organization for Prostitution Survivors and the King County Prosecuting Attorney's Office,
represents a partnership with Police and City Attorney Offices across King County to go after purchasers
of sex and not their victims. Buyers drive the industry and prosecutors estimate that around 27,000 men
in King County are soliciting sex online every day. The Buyer Beware initiative also includes components
relating to public education and an intervention program available to men both convicted of this crime and
self- referred.
Participating community organizations include the Organization for Prostitution Survivors, Businesses
Ending Slavery and Trafficking (BEST), Stolen Youth, and Seattle Against Slavery. Several King County
cities have formally pledged support via a resolution such as this one.
Sharon Mann, 4452 South 160th Street, voiced her support for the proposed resolution, as a member of
the Tukwila International Boulevard Action Committee (TIBAC). Tukwila is the only municipality that has
not supported the Buyer Beware Initiative. Ms. Mann reviewed the initiative for the Council and the
intended outcome of greater prosecution of the 'buyers" of prostitution.
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May 11, 2015 Page 5 of 8
Laurel Humphrey, Council Analyst, stated Police Chief Mike Villa voiced his support for the draft
resolution.
The Councilmembers exchanged comments on the Buyer Beware program and the City's enforcement of
the initiative. The emphasis by the Council was on spreading the word about adoption of the resolution to
combat commercial sexual exploitation through demand enforcement, deterrence and prevention.
COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING.
c. An update on the Washington Place Development.
Councilmember Hougardy indicated this item was discussed at the Finance and Safety Committee
meeting on May 5, 2015. The committee members were unanimous in recommending approval.
Brandon Miles, Economic Development Liaison, explained he is present this evening to update the
Council on the progress of the Washington Place development.
Mr. Miles explained the owners of 223 Andover Park East are proposing to construct the City's first
residential high rise. When constructed, the 19 -story building will be the tallest building between Seattle
and Tacoma and will include multi - family units (apartments or condos) and a full service hotel.
The project is located within the Transit Oriented Development area (TOD) of the City's Southcenter
District. The TOD is envisioned to be a high density area with amenities that encourage walking and
development that benefits from the proximity to the Sounder Station located east of the Green River and
the Metro Transit Center located along Andover Park West, adjacent to Southcenter Mall.
Economic Development staff has estimated that the project will be required to pay the City over $1.5
million in building and impact fees. The City's Building Department estimates the total building
construction costs at approximately $74 million, thus the permit fee represents approximately 1.8% of the
total project costs. The collected building permit fees are used for plan review and inspection to support
the City's oversight of construction standards in the City. Impact fees are used to fund capital projects
related to expanding capacity for traffic, parks, and fire services.
8:47 p.m. Councilmember Hougardy exited the Council Chambers.
Over the last two years the City has taken two actions regarding the Washington Place Development in
order to encourage the project to move forward since it fits the vision of the area. Mr. Miles conducted a
detailed review of the Development Agreement (and amendment) and approval of the Multi - Family Tax
Exemption ordinance (pages 29 and 30 of the agenda packet).
8:49 p.m. Councilmember Hougardy returned to the Council Chambers.
Building Permit Fees: Building permit fees go into the City's general fund and are used to support
construction related services and indirect costs, applied to all projects uniformly. The building permit fees
are based on the valuation of the building. Building fees are adopted by Council resolution and staff does
not have the authority to reduce or waive the fees. The applicant has asked that the building permit fees
be waived. An option for the Council is a new fee schedule. However, revising the City's permit fees
would take staff approximately 12 to 18 months to conduct the necessary research and Council review of
a change in building permit structure.
Impact Fees: Impact fees are used to fund capital projects related to expanding capacity for traffic, parks
and fire services, and staff has authority to adjust these fees on a case -by -case basis. The purpose of
impact fees is growth pays for growth. Following objective analysis in August 2014, a reduction of nearly
$300,000 in impact fees was determined to be applicable to this project and a second round of analysis is
currently underway since this is a new type of development for the City. Even with the approved
reductions, the applicant has requested an additional reduction of the estimated fees.
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May 11, 2015 Page 6 of 8
If the Council desired to amend code or policies leading to a reduction of building and /or impact fees for
this project, the reductions would have to be applied City -wide. Analysis leading to this type of
amendment would require considerable staff time and Council review.
Fee Deferral: A fee deferral program is an option that allows developers to pay certain fees, normally due
upon permit issuance, closer to the time when revenues can be collected from the project. A fee deferral
program in the TOD is consistent with the City's goals in that area. Deferral of impact fees would not
impact the City's ability to move forward with capital projects funded by these fees but instead would
reimburse the City for funds paid via bonds or the General Fund. Establishing a fee deferral program
would require a code amendment, and staff is seeking Council direction on this issue prior to the
development of a draft ordinance. Several potential requirements and terms as described in the
informational memorandum were reviewed with the Council (pages 33 -34 of the agenda packet).
8:58 p.m. Councilmember Duff ie exited the Council Chambers.
Mr. Miles commented that the interest rate on a U.S. 10 -year Treasury Note has increased to 2.19 %, up
from 1.9% at the time of Finance and Safety Committee review.
Councilmember Robertson asked how long staff would need to draft a fee deferral program for Council
review.
Mr. Miles stated he could have the item ready for Finance and Safety Committee review in one month.
Christine Lee, Washington Towers, LP, explained she is present this evening to update the Council on
the status of the Washington Towers project. Mrs. Lee utilized a slideshow to depict the possible views
from the 181h and 19th floors of the proposed development.
9:01 P.M. Councilmember Duffie returned to the Council Chambers.
Highlights of the slideshow included proposed amenities of the residential portion of the development,
naming of the residential units to "AirMark Residence," and the announcement that the Landmark Hotel
will be the hotelier for the development.
Mrs. Lee explained they have been working on the proposed project for many years and she distributed a
letter to the Council with two specific items for consideration. The first was a request to use a 3 -year
Treasury Note in the place of the proposed 10 -year Note. The second request is regarding the
calculation of impact fees. Currently, the City charges $1,200 for Fire and $1,398 for Park Impact Fees
per unit. They are requesting the calculation change from a per unit charge to charges based on actual
square footage of the units. Mrs. Lee referenced the letter she distributed to highlight rental rate
comparisons.
The Councilmember exchanged comments and asked clarifying questions of Mrs. Lee on the project and
voiced their support for continued efforts to work through the issues.
Mr. Miles stated he is seeking clear direction from the Council on what they would like staff to prepare for
review by the Finance and Safety Committee. He clarified that the City's Park and Fire impact fees are
set up such that the Parks and Recreation Director and /or Fire Marshal has the authority to adjust the
fees for a particular development. Originally, the estimated impact fees for the Washington Place
development were calculated at $1.2 million. After review by the Parks and Recreation Director and the
Tukwila Fire Marshal, those fees have been reduced to $690,000.00.
Mrs. Lee explained that the Fire Marshal calculated Fire impact fees by utilizing three studio units to equal
one impact fee. She asked that the City increase that to 6 studio units to equal one impact fee.
The Councilmembers exchanged comments and asked clarifying questions of Mrs. Lee and staff to
include the following: The Council sets policy and City Administration deals with operations; A change to
the impact fee calculation mid - project could have legal risks for the City; The request presented appears
to be a negotiation, and that is not the role of the Council; Consideration of fee changes need to be fair
Tukwila City Council Committee of the Whole Minutes
May 11, 2015 Page 7 of 8
and not be at the expense of the City; and the proposed fee deferral program appears to be a win -win
situation for the City and Developer.
Mrs. Lee stated the construction costs have significantly increased, and they have hopes for the project.
They understand that Tukwila is different than downtown Bellevue or Seattle, and the market -rate rent is
lower in Tukwila.
Jerry Lee (MulvannyG2), stated he has been assisting Omar and Christine Lee on the proposed
Washington Place development. While working on this project, he has learned a lot about the City. They
are very excited about the proposed project and he feels it will be a building block for Tukwila and the
region.
Mr. Miles summarized the next steps for staff:
• The City Attorney's office will address the questions raised at the recent Finance and Safety
Committee meeting and provide an electronic (confidential) response to the Council;
• Staff will prepare three draft ordinances for review at a Finance and Safety Committee within one
month;
• The Parks and Recreation Director and Fire Marshal will finalize the decision on the assessment
of impact fees for the project.
Council President Kruller concurred with the next steps outlined by staff. She thanked the Finance and
Safety Committee for their past and future work on this project.
9:47 p.m. Mayor Haggerton exited the Council Chambers.
REPORTS
a. Mayor
David Cline, City Administrator, stated Mayor Haggerton stepped out of the Council Chambers to speak
with Mr. and Mrs. Lee. Mr. Cline, reporting on behalf of Mayor Haggerton, thanked the Councilmembers
for attending the memorial service for Tukwila Fire Captain Mike McCoy on May 5, 2015.
b. City Council
Councilmember Robertson reviewed his meeting schedule for the upcoming week, and stated that the
meetings for Councilmembers have significantly increased.
Councilmember Ekberg attended the Joint School Board meeting and the Allentown Community Meeting.
He announced that his son graduated last week with a double Bachelor's degree.
Councilmember Seal thanked her family for supporting her work for the City. She stated she watched the
memorial service for Captain Mike McCoy via the live streaming from the church.
Councilmember Hougardy a meeting on the Regional Transit Long Range Plan, and she would update
the Council on the plan in the near future. She thanked Mr. Miles for his work on this project. King
County Metro staff expressed appreciation for having City staff participate in the meetings.
Councilmember Quinn attended the memorial service for Capitan McCoy, and stated it was very moving.
He commented that the Councilmembers are committed to doing what is necessary for the City.
Council President Kruller commented on the status of the Thorndyke Safe Routes to School project. She
attended the memorial service for Captain Mike McCoy on May 5, 2015. On May 6, 2015 she attended
the Joint Council /School Board Meeting and the Allentown Community meeting on May 7, 2015. On May
9, 2015 she hosted the Council Coffee Chat as part of the Backyard Wildlife Festival, and she will forward
the comments received to City Administration. She attended the Peace Officers Memorial event today
outside City Hall.
Tukwila City Council Committee of the Whole Minutes
May 11, 2015
Page 8 of 8
c. Staff
David Cline, City Administrator, apologized for the technology difficulties this evening. He announced that
there is activity at the Tukwila Village site and demolition has begun on the Circuit City building.
d. City Attorney
The City Attorney's presence is not required at Committee of the Whole meetings.
e. Intergovernmental
There was no report.
MISCELLANEOUS
Councilmember Robertson commended Mr. Miles on the very detailed informational memorandum that
was included in this agenda packet this evening for the Washington Place item.
Council President Kruller acknowledged written comments the Council received (May 4, 2015) from
Tukwila resident Ellen Gengler relating to the fitness center lease for the Police Department.
ADJOURNMENT
10:06 p.m. COUNCIL PRESIDENT KRULLER DECLARED THE COMMITTEE OF THE WHOLE
MEETING ADJOURNED.
A r er, uncil President
Melissa Hart, Deputy City Clerk
APPROVED AND SIGNED BY THE COUNCIL PRESIDENT ON 05/26/2015
AVAILABLE ON THE CITY'S WEBSITE 05/27/2015