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HomeMy WebLinkAbout2015-11-23 Committee of the Whole MinutesTukwila City Council Committee of the Whole Meeting City Hall Council Chambers November 23, 2015 — 7:00 P.M. Lh I101�� � 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 David Cline, City Administrator, 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; Chris Flores, Interim Fire Chief; Mike Villa, Police Chief; Bruce Linton, Deputy Police Chief; Eric Drever, Police Commander; Leon Richardson, Police Records Supervisor; Trina Cook, Police Information Analyst; Gail Labanara, Public Works Analyst; Peggy McCarthy, Finance Director; Jack Pace, Community Development Director; Brandon Miles, Economic Development Liaison; Laurel Humphrey, Council Analyst; Melissa Hart, Deputy City Clerk. CITIZEN COMMENTS Brennan Wilson, 4803 South 162nd Street, voiced his concern about the current road construction delays in Tukwila. On November 20, 2015, he experienced significant delays along Interurban Avenue South due to the ongoing project, and feels detours should have been laid out to avoid long lines of stopped traffic. As an alternative, he feels flaggers should have stopped traffic in each direction to allow traffic to move more smoothly. Interurban Avenue South is a main thoroughfare in Tukwila, and the significant congestion needs to be addressed. Councilmember Duffie mentioned that he was also in the traffic backup along Interurban Avenue South, and he did observe flaggers working with the traffic. Mr. Duffie commented that Friday afternoon traffic is normally very heavy in that area. David Cline, City Administrator, thanked Mr. Wilson for bringing this issue to the Council. He will investigate what happened and instruct staff to issue a correction to the contractor to avoid this in the future. Pam Carter, 4115 South 1391h Street, referenced comments she made at a previous City Council meeting relating to the rodent/pest issues within the City's rental housing stock. This issue was first brought to the attention of the City Council by Foster High School Principal Pat Larson, as the rodent/pest issues are affecting the students of the Tukwila School District. Ms. Carter explained that she received a response from the City on the issue, and that response stated the City has a new tool called the Healthy Housing Policies. In addition to the policies referenced, the City will be revising the checklist used for rental housing inspections. However, the letter said that the City is unable to do anything about the pests. The City's Comprehensive Plan was recently adopted and contains goals supporting families and individuals, creating inviting neighborhoods, positive community images and healthy communities. Her opinion is the Council should find direct solutions to issues like communication with citizens and building trust with the residents. She quoted from a letter written by Foster High School Civics Class students, recently published in the Tukwila Reporter regarding deplorable living conditions. Ms. Carter feels the community needs to see action by the Council to know that the issues are being addressed. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 2 of 19 Dennis Martinez, 4660 South 160th Street, stated he is in favor of demolishing all four of the vacant motels and the smoke shop. He feels the bid the City received for the bid alternate to demolish the Traveler's Choice Motel is a fair bid for the scope of the project. He suggested the City utilize the vacant land for multicultural events or a farmers market. A large portion of the City's residents are living on a fixed income, and uses of the land that would benefit the tax base should be the primary focus for the City. PUBLIC HEARING An ordinance amending the 2015 -2016 biennial budget. The 2015 -2016 mid - biennium budget modification amends the 2015 -2016 biennial budget. The Council is being asked to review and approve the draft ordinance authorizing the amendments. 7:20 p.m. Council President Kruller opened the Public Hearing. Peggy McCarthy, Finance Director, explained it has been past practice for the City to review the financial performance for the first three quarters of the year. and based on this review and in conjunction with other new circumstances and events, propose budget amendments to adjust the biennial budget. Pursuant to RCW 35.34.130, "Budget — Mid - biennial review and modification," a mid - biennial review shall be conducted and modifications of the biennial budget shall be made through ordinance. Amendment of the budget is necessary for any fund with anticipated expenditures exceeding budgetary appropriations. Accordingly, certain budget amendments are proposed and they are categorized into the following groups: No Category Name Category Description 1. Existing Service Levels & Plans Adjust budget to reflect changes in budgetary needs to maintain existing service levels and plans, including departmental over expenditures. 2. Revenue Backed Increase both expenditure and revenue budget for new programs or services that have a dedicated funding source. 3. Carryovers Move budget to or from budget years to mirror actual or planned spending and revenue recognition. 4. Initiatives Budget for new programs, enhanced service levels or system improvements. Council President Kruller called for public comments. There were no public comments. 7:22 p.m. Council President Kruller closed the Public Hearing. SPECIAL ISSUES a. An ordinance refunding the 2006 water, sewer, surface water revenue bonds. Councilmember Quinn indicated this item was discussed at the Finance and Safety Committee meeting on November 17, 2015. The committee members were unanimous in recommending approval. Peggy McCarthy, Finance Director, stated staff is seeking Council approval of an ordinance authorizing the refunding of the 2006 Water and Sewer Revenue bonds as proposed by Columbia Bank. Ms. McCarthy explained a few housekeeping items have been addressed in the draft ordinance and an updated draft ordinance in strike - through /underline format has been distributed to the Council for review. The City's Bond Counsel, Marc Greenough, of Foster Pepper, is available to answer Council questions on the draft ordinance. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 3 of 19 Senior Managing Consultant Duncan Brown, of Public Financial Management, Inc., (PFM) utilized a PowerPoint presentation for Council review of the proposed bond refunding. Highlights of the presentation included: OVERVIEW OF TOPICS • Water and Sewer Revenue Bonds, 2006 • Refunding Opportunity • Recommended Plan of Finance • Summary of Proposals and Refunding Results • Next Steps WATER AND SEWER REVENUE BONDS 2006 • In November 2006, the City issued $3,180,000 of Water and Sewer Revenue Bonds to fund Neighborhood Revitalization (Allentown) and the Foster Point Sewer Systems Project o Design and construction of the City's wastewater pumping facilities, force mains and sewer mains, lift stations, and storm drain and water line improvements • Following a payment on December 1, 2015, the 2006 Bonds will have $2,060,000 of principal outstanding o Outstanding interest rate of 4.49% • The 2006 Bonds may be redeemed prior to maturity beginning December 1, 2016 o Until this date, the City does not have the option to prepay the 2006 Bonds REFUNDING OPPORTUNITY • Since 2006, borrowing rates have fallen significantly, providing an opportunity for the City to refund (refinance) its 2006 Bonds and realize savings in annual debt service • Similar to refinancing a mortgage, the City would benefit from refinancing the 2006 Bonds in the current market, lowering the interest rate from 4.49% to approximately 2.39% RECOMMENDED PLAN OF FINANCE • PFM recommends the City approve a "direct placement" refunding bond with a commercial bank • Relatively small size (less than $2 million) and short maturity (11 years) make the proposed refunding bond attractive to prospective bank lenders • Avoids lengthy disclosure and ratings process associated with publicly offered bonds • Lower costs of issuance • A bank purchaser will not require a "debt service reserve account" o The City can apply the reserve account for the 2006 Bonds — approximately $430,000 — towards the refunding, thereby reducing the total size and annual debt service of the refunding bond • Proceeds of the 2015 Refunding Bond, along with the reserve account, would be placed in a refunding escrow account • Invested in U.S. Treasury securities • Amount sufficient to pay interest on the 2006 Bonds through 12/1/16, and redeem all outstanding 2006 Bonds on 12/1/16 • Once escrow is established, the 2006 Bonds will no longer be considered obligations of the City (legal and economic "defeasance ") • Refunding transaction will result in annual savings that can be passed on to ratepayers ESTIMATED REFUNDING RESULTS • Average annual debt service on the new bonds is approximately $183,000, approximately $56,000 less than 2006 Bonds o Results from lower interest rate on the refunding bond and application of the 2006 debt service reserve account towards the refunding plan • Net present value savings of over $130,000, or 6.3% of refunded par amount SUMMARY OF BANK PROPOSALS • PFM distributed a brief request for bids to banks and lending institutions Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 4 of 19 • Five banks submitted proposals to purchase the refunding bond • The most advantageous proposal was submitted by Columbia Bank NEXT STEPS: • November 23, 2015: • December 7, 2015: • December 15, 2015: • December 1, 2016: Discussion on draft ordinance Council to adopt the ordinance Closing date — escrow funding 2006 Bonds redeemed The Councilmembers asked clarifying questions of Mr. Brown on the presentation. Mr. Greenough explained a draft ordinance was presented to the Finance and Safety Committee prior to review by Columbia Bank. After that review, Columbia Bank representatives requested edits to the draft ordinance, as presented this evening. Edits to the draft ordinance were included in the following sections: Section 7. Payment of Bond. Principal of and interest on the Bond shall be payable in lawful money of the United States of America. Principal of and interest on the Bond shall be payable by electronic transfer on the payment date to the Registered Owner at the account appearing on the Bond Register on the Record Date. TIhe-Upon payment of the final installment of principal of the Bend -is payable uper� presentation and surrender of and all accrued interest on the Bondy,, the Registered Owner shall present and surrender the Bond to the Bond Registrar. The Bond is not subject to acceleration under any circumstances. Section 11. Failure To Pay Bond. If any principal of the Bond is not paid when due, the City shall be obligated to pay interest on such principal at the Default Rate indicated on Exhibit A from and after the date such principal payment is due until such principal is paid in full. If the City fails to set aside and pay into the Bond Fund the amounts required by this ordinance so to be set aside and paid, any Registered Owner may bring action against the City to compel the setting aside and payment. Section 21. Approval of Bank Proposal; Delivery of Bond. The Bank has presented the Bank Proposal to the City Wig- proposing to purchase the Bond, which written Bank Proposal is on file with the City Clerk. The City Council finds that accepting the Bank Proposal is in the City's best interest and aGGePtS the Offer contained therein authorizes the Designated Representative to accept a firm offer with substantially the same terms as the Bank Proposal. The Designated Representative is authorized to execute the Bank Proposal on behalf of the City, so long as the terms provided therein are consistent with the terms of this ordinance. Exhibit A: Parameters for Final Terms (d) Interest Rate and Default Rate. The Bond shall bear interest at a fixed rate per annum not to exceed 2.50% (computed on the basis of a 360 -day year of twelve 30 -day months) from the Issue Date or from the most recent date for which interest has been paid or duly provided for, whichever is later. If any oavment of the Bond is not made when due, or if interest on the Bond becomes includable in the rq oss income of the Registered Owner for federal income tax purposes, the interest rate may increase at the discretion of the Registered Owner to the Default Rate of 3.60 %. (e) Payment Dates. Interest shall be payable semi - annually on June 1 and December 1 of each year, commencing June 1, 2016. Principal shall be payable on December 1 of each year from 2016 to 2 1-�, 2026 inclusive using a principal amortization substantially as set forth in the Bank Proposal. (g) Prepayment. The principal of the Bond is subject to prepayment at the option of the City at any time,, but only on or after December 1, 2020, as a whole or in part, at par plus accrued interest to the date of prepayment. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM AS AMENDED TO THE NEXT REGULAR MEETING. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 5 of 19 b. An ordinance amending the 2015 -2016 biennial budget. Councilmember Quinn indicated this item was discussed at the Finance and Safety Committee meeting on November 17, 2015. The committee members forwarded this item to the Committee of the Whole for discussion. City staff is seeking Council approval of an ordinance to authorize the 2015 -2016 mid - biennium budget amendments as required by state law. Proposed amendments are categorized as existing service levels, backed by revenue, carryovers, and new initiatives. Ms. McCarthy utilized a PowerPoint presentation to conduct a detailed review of the proposed biennial budget amendments. Highlights of the presentation included: PURPOSE • RCW 35.34.130, "Budget — Mid - biennial review and modification" • Budget amendments to adjust for new events and circumstances and to ensure sufficient budget exists to cover expenditures on a fund level and, for the General Fund, on a department level as well. FINANCIAL PICTURE City is on track to meet Reserve Policy for 2015. • General Fund balance will equal or exceed 18% of 2014 General Fund ongoing revenue. • Contingency fund balance will equal or exceed 10% of 2014 General Fund ongoing reven ue. • One -time revenue reserve will be funded at 10% of 2014 one -time revenue. For 2016, Reserve Policy expected to be met. o If forecasts shift, Council will be notified in a timely manner and consideration will be given to taking budgetary action. BUDGET AMENDMENT CATEGORIES • Existing service levels and plans • Revenue backed • Carryovers • Initiatives CATEGORY 1. EXISTING SERVICE LEVELS AND PLANS • Police and Fire Departments - added expenditure budget • Other departments — reduction in expenditure budget • Land sale postponement - reduction in revenue budget • Sales tax increase - added revenue budget POLICE DEPARTMENT ADDITIONAL BUDGET • $420K in 2015 and $643K in 2016 • Salaries — special payments • Employee benefits on overtime • SCORE jail costs 2016 • Page 11 for narrative • Pages 41 -42 for 2015 3rd Quarter financial results FIRE DEPARTMENT ADDITIONAL BUDGET • $680K in 2015 and $713K in 2016 • Salaries — special payments • Overtime • Employee benefit on overtime • Pages 11 -12 for narrative • Pages 43 -44 for 2015 3rd Quarter financial results Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 6 of 19 UNDER EXPENDITURE BY OTHER DEPARTMENTS • $1.18M underspending in other departments expected to offset additional Police and Fire budget in 2015. • Page 31 for 2015 3rd Quarter department expenditure summary. • Although not reflected in the 2016 budget amendments, departmental budgetary savings are also expected in 2016. LAND SALES POSTPON • Reduction in one -time revenue budget -- o $1.2M in 2015, Tukwila Village and former Fire Station 53 • $1.6M in 2016, Longacres parcels • General Fund contribution to Arterial Street Fund is reduced by $1.6 million as a result of the Longacres land sale postponement. SALES TAX REVENUE INCREASE • In 2015 revenue budget increased by $1.7 million;' in 2016 by $1 million. • Actual sales tax collections through August 2015 are $1.7M more than budget. CATEGORY 4. INITIATIVES - GENERAL FUND • Police Records Management System 0 2015 $137K 0 2016 $474K • Police COPS grant, City match o 2016 $200K • Recreation Green City Partnership 0 2015 $10K 0 2016 $30K CATEGORY 4. INITIATIVES -- OTHER FUNDS • Residential Streets — Cascade View Safe Routes to School additional grant funding, City match of $89K • Arterial Streets — Strander Extension, $2M to jump start project; General Fund transfer is reduced by $1.6M due to postponement of Longacres land sale SUMMARY • City is on track to meet Reserve Policy goals for 2015. • Reserve Policy requirements are expected to be met in 2016 as well. • Should forecasts shift, Council will be notified in a timely manner and consideration will be given to taking budgetary action. Councilmember Quinn referenced page 3 of the agenda packet, specifically Category 1 which refers to existing service levels. In past years when the Council worked on the budget, the items would be in committee, and questions, concerns and background information would be addressed at that time. In the new process, the budget amendments are brought to Council for discussion. Therefore, the detailed questions must wait until full Council discussion. He commented that he has several detailed questions for staff on this item. As stated in the presentation, the Police Department requires an additional budget of $420,000 for 2015. He asked Chief Villa to provide the details associated with the budget amendment request. Police Chief Mike Villa stated that the most significant issue for the Police Department related to salaries and overtime. Regarding the salaries, there were certain items that were not budgeted by the Police Department in 2015. In years past, the salary savings from position vacancies covered the unbudgeted items. Payment for Kelly days had the most significant impact on the budget. Today, the Police Department is fully staffed, and the community is benefiting from a fully staffed department, as crime continues to decline. Chief Villa stated that the increased level of services does come with a cost. Councilmember Quinn asked if the proposed budget amendment would be the true cost to maintain the level of service to keep citizens safe. Chief Villa answered in the affirmative. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 7 of 19 Councilmember Quinn asked if a conservative approach was taken on the unbudgeted Kelly days, vacation payments and signing bonuses. Ms. McCarthy stated a conservative approach was used for budgeting the projected revenues. Staff tried to use a realistic approach to budget expenditures. There is some pressure on the departments to stay within their budgets and to think creatively when resources are limited. Councilmember Quinn feels the City's goal was to fully staff the Police Department, and the current budget should have reflected filled positions. He asked if the Council should be responsible for monitoring the overtime costs for the departments and comparing those costs with the current budget. Ms. McCarthy responded that she would not consider monitoring overtime to be a Council responsibility. However, the Council should be made aware of what is happening with the budget. Councilmember Quinn asked what the Police Department did to try and mitigate the cost overrun. Chief Villa said the department discussed salaries and decided the best thing was to continue to be fully staffed in order to provide the level of service. It was recognized that in the General Fund this was thought to be affordable. As for the overtime, in the second quarter of this year, it was determined that the department would be over budget by the end of the year. After discussing this issue, Police staff chose to make cuts where possible by rescheduling training and cancelling attendance at events, to name a few, to try and control the budget. In future years, the base budget will be more predictable with a fully staffed department. Councilmember Robertson asked if the budget amount for the Police Department included the new Police Records Management System that is being proposed. Ms. McCarthy clarified that the Police Records Management System is not included in this budget amendment item for the Police Department. That purchase is a separate budget item. Councilmember Robertson feels the administration needs to change budgeting practices to avoid these surprises at the end of the year and relook at the six year plan with the Council. Councilmember Hougardy thanked the Police Department for their service and stated the issues are about the budget. She requested a specific line item be added to the budget for Kelly days and overtime each year for the Police and Fire Departments. Councilmember Ekberg voiced his concern with postponing the trainings due to the budget overruns. He feels the training delay is hindering the department. He asked what will be done differently to monitor these items in 2016. Ms. McCarthy stated that the proposal is to review /analyze the data after every pay period so the data is fresh and the analysis will be more accurate. The Police Department overtime budget is reasonable. However, the issue also involves the Fire Department. Councilmember Ekberg asked what would happen if the Council chose to not adopt the proposed budget amendment ordinance and why the proposed Police Records Management System and COPS Grant are not included within the Police Department budget amendment. Ms. McCarthy stated if the Council chose not to adopt the budget amendment ordinance, the budget would not be amended, and the City would not be in violation of state law because the General Fund expenditures would still be at fund level. Additionally, the Records Management System and COPS Grant are considered initiatives, and have been included on page 19 of the agenda packet. New initiatives are organized by department for review. For the Police Department, the total listed on page 19 includes both the service level request and the two initiatives. The totals for the Police Department in 2015 were $557,000 and the total for 2016 is $1.3 million. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 8 of 19 Councilmember Seal stated that the budget amendments are in addition to the original budget, and she feels the new figures reflect how much it actually costs to run the Police Department fully staffed with the service level that is expected. Councilmember Ekberg asked for clarification on the true cost to fund the training and other items that were postponed as part of the budget saving measures. If the amendment does not include those items, then the amount requested in the amendment would need to be increased to ensure officers receive the necessary training. Mr. Villa concurred with Councilmember Ekberg's statement. However, some of the training and other items were included in the proposed new initiatives. Councilmember Duffie commended the Police Department on the fine job they do. He asked if the Police Department budget includes funding for overtime that would be needed to cover emergencies. He asked for an explanation of some of the recent emergency /call -out type of events, where the response cost was not included within the budget. Chief Villa said the overtime budget does account for some additional call outs, etc. However, those types of instances are difficult to anticipate. The Tukwila Police Department is part of the Valley Disturbance Unit and that unit was called to assist with the protests this past summer relating to the Polar Pioneer (artic drilling rig) leaving Seattle. That was a multi -day event for the department. Council President Kruller voiced her concern about cost management. The taxpayers are asked to hold the line on taxes, and yet there are cost overruns. Ms. Kruller stated she supports the current level of service provided by the Police Department; there is concern about responding to incidents that incur overtime costs that are not budgeted. Chief Villa commented that the response to the incident was provided as part of the City's responsibility under the current interlocal Agreement. The Tukwila Police Department does receive other types of requests for assistance in which the department does not provide assistance. Chief Villa stated those are the difficult conversations to have with neighboring jurisdictions. Ms. McCarthy commented that while the Police and Fire Departments are over budget, the City overall is doing well financially. Department expenditures are within budget. Council President Kruller recalled past financial information that indicated everything was running under budget, including the special projects. However, funding is being distributed from other funds to cover things like information technology. It is her opinion that the budgeting process seems to be different now than in the past. Ms. McCarthy stated there had been one budget line item for overtime that included by overtime salaries and overtime benefits. The reference to the .5 FTE for IT is a new position to support the proposed Police Records Management System. Many City departments have been understaffed, which leaves room within their existing budgets for overages. However, most of those vacancies have now been filled. Councilmember Quinn stated that based on the previous comments, the Council is aware of the budget overruns. The amendment proposes to increase the Fire Department budget in 2015 by $680,000 and $713,000 in 2016. Prepayment of the Kelly days appears to be a good thing; otherwise that payout could become a long term liability that would be required to be paid at the end of the employees' career. He asked Interim Chief Flores if the proposed budget amount is the true cost of operating the Fire Department. Interim Chief Flores stated he believes that statement to be true. He provided some background information to the Council relating to overtime costs for the Fire Department. In reviewing the overtime budget ten years ago, that budget was not exceeded. When employment separations occur without notice, it causes problems for the Department. Beginning in 2013, Tukwila Fire began seeing an increase in long term disabilities; there have been nine absences greater than thirty days to date in 2015. Those types of absences have to be filled, incurring overtime costs. The current labor contract does not include Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 9 of 19 a Kelly day buy -back. However, there is a vacation buy -back clause. Staffing, by policy, is supposed to be at fourteen per shift, and that has been reduced to thirteen. When vacancies occur they have to be staffed with overtime fill until new staff can be hired. The current cost included in the amendment appears to be the new norm needed to maintain staff. Councilmember Quinn said that not receiving proper notice of departure is not lost on the Council. He asked what the Fire Department is doing to mitigate the costs. Interim Chief Flores stated the Fire Department adjusted down the staffing level, and Fire Department staff participates in the South King County Training Consortium. Councilmember Quinn asked how a discussion with the public can be held if the information on the budget amendments is not readily available. Interim Chief Flores stated that this overrun was previously reported in the second quarter (2015) and perhaps the information system needs to be restructured to get this information to Council sooner than a quarterly report. Councilmember Quinn stated that the Council cannot make decisions without information. Previously, staff reported on a $1.2 million surplus, meeting the reserve policy requirements, keeping the City doors open and operations working. He remembers the citizens asking why they are being asked for more money when there is a surplus on record. Ms. McCarthy explained that a surplus meant that revenues exceed expenditures. However, she would need to research that item and report back to the Council at a later time. Councilmember Robertson asked what overtime budget was in 2013 and 2014. 8:44 p.m. Councilmember Quinn exited the Council Chambers. Interim Chief Flores responded that the overtime budget in 2013 and 2014 was $412,000. He stated that part of the reason the overtime budget was not exceeded was due to reimbursements associated with the City's response to the Oso disaster. Councilmember Robertson stated that the proposed amendment for 2015 is $300,000 and $310,000 in 2016. He asked if the proposed amounts are in addition to the current budget of $400,000. Interim Chief Flores answered in the affirmative. Councilmember Robertson asked for the total amount being spent on overtime for the Fire Department in 2015 and the amount budgeted for overtime in 2016. Ms. McCarthy said the overtime budget for 2015 (as listed within the proposed budget amendment) is between $700,000 to $800,000 and the amount would be similar for 2016 with a slight increase. Councilmember Robertson feels there must be a best practice somewhere to figure out how to predict and understand these problems. Since 2015 is really already over, there has to be a better planning tool moving forward, and City Administration needs to figure out how much money the City has to spend in all of the departments. He anticipates spending the next year trying to find ways to solve the City's capital problem relating to Police and Fire facilities. A $1.7 million increase in the budget is going to cause more problems. 8:46 p.m. Councilmember Quinn returned to the Council Chambers. Councilmember Seal concurred with the comments from her fellow Councilmembers. With the current level of service and minimum staffing levels, she does not feel this is the best that can be done. She feels additional /new revenue sources need to be found to cover these costs to provide the high level of service to the community. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 10 of 19 Councilmember Hougardy commented that the separations within the Fire Department appear to be unusual. She asked if the 2015 budget numbers should be used as a baseline to determine the costs associated with operating the Fire Department. She feels there should be other cost saving measures that can be implemented rather than the reduction of staffing. She does not approve of taking funding from other departments. Interim Chief Flores clarified that part of the staffing issue is due to the contractual obligations with the union. During contract negotiations, time was traded for pay increases and that is what has happened over the years with the Kelly days. Councilmember Hougardy asked if contract issues increased the overtime needs. Interim Chief Flores stated that it only increases overtime needs when the department has nine disabilities all lasting longer than thirty days, plus the four separations that have occurred. Councilmember Quinn asked if this is a trend the Council needs to be aware of going forward and commented that receiving the information late in the year does not help the Council. It is known that maintaining a high level of service will increase the budget each year. Council President Kruller is also concerned about the citizens on fixed incomes and seeing all these costs being passed on to them as taxes. Perhaps a legislative option for the City is to require frequent updates to tell the Council what is going on and to require signoffs by Council before overages can happen. Mayor Haggerton stated that perhaps a different reporting system is needed because the City felt the quarterly reports were sufficient in reporting to the Council. During those updates, the Council did not have any of these questions. Mayor Haggerton referred to page 31 of the agenda, which shows that City departments have come up with a $700,000 savings just by a reduction of expenditures. He noted that the Mayor's Office alone reduced their budget by $419,000. Other departments are operating under budget without being asked. Council President Kruller stated the overages were not clear during previous meetings as they are this evening. Perhaps a more rigorous review system is needed. If a department budget is going to be exceeded, perhaps the Director should bring that forward to the Council before it happens and not just in a written report. Councilmember Quinn feels being transparent about these discussions is good for the citizens. He feels the Council has asked about the amendment process, Regional Fire Authority and other items dealing with the budget and requested current information on the status of the budget over several meetings. Perhaps this is a communication issue; the Council needs to have the information in order to be effective when working with the budget. Councilmember Robertson commented about the Strander Boulevard Extension Project funding. Future financing of this project could be done through a Local Improvement District (LID), in the same way that the Klickitat project was done. The primary beneficiaries on the Strander Extension are the property owners. The City is not going to have the money for large projects; therefore, LID funding is a good solution. Council President Kruller feels there should be a work session regarding the issues and questions raised by the Council this evening. The City did not receive the TIGER Grant award for the Strander project. At the county and state level, if there is no funding for a project, the work stops at the design or implementation stage until monies become available. Since the City did not receive funding, she feels there is no urgency on the project. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. 9:17 p.m. Council President Kruller declared a brief recess. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 11 of 19 9:26 p.m. Council President Kruller reconvened the Committee of the Whole meeting. c. Briefing on 2016 lodging tax funding opportunities. Brandon Miles, Economic Development Liaison, explained the creation of the Tourism Promotion Area (TPA) and funding associated with the TPA, frees up the City's lodging tax funds for other potential uses. City staff has been working with various Tukwila businesses on the creation of the Southcenter Marketing Partnership, with a goal of attracting more day tourists to visit the City. The purpose of the briefing this evening is to introduce several of the possible campaigns that could be used to attract more people to the City. BACKGROUND • 1% lodging tax charged to overnight stays in hotels /motels. • 2016 Estimated Revenue $630,000 • Per RCW 67.28.1816, funds can only be "used... for tourism marketing, marketing and promotion of special events to bring in visitors..." • Most lodging tax funding was used to support Seattle Southside Visitor Service (SSVS). • Hoteliers in SeaTac, Tukwila, and Des Moines formed a Tourism Promotion Area (TPA) in 2014. • Additional $2 charge per night per room applied. • Seattle Southside Regional Tourism Authority ( SSRTA), newly formed in 2015, will take over most SSVS operations on January 1, 2016. • SSRTA will focus on overnight stays or "heads in beds." • Opportunities for Tukwila to focus on day visitors, or "feet on the street." F��iCrl�itililb! TPA Fee: $3,574,356 Tukwila Lodging Tax: $337,500 SeaTac Lodging Tax: $715,000 Des Moines Lodging Tax: $20,000 Other Revenue: $20,000 Total: $4.6 million 2015 Funding: $1.2 million 283% increase LODGING TAX COMMITMENTS Estimated Revenue: $630,000 SSRTA Allocation $337,500 Museum of Flight $35,000) Starfire Sports $25,000 Unallocated Revenue $232,500 Note: Lodging Tax Advisory Committee has not yet approved the expenditures above. SOUTHCENTER MARKETING PARTNERSHIP • Focus is on "day tourist ". o Day tourist could be someone who lives, works, stays, or travels within a one hour drive of Tukwila - Southcenter. • Primary goal is to increase revenue at restaurants, entertainment establishments, and retailers. • Increased sales means increase in sales tax for the City. • Secondary goal is to improve the public perception of Tukwila and the Tukwila - Southcenter area. TUKWILA VICINITY • Diversity • Center of it all • One of the busiest freeway intersections in the State • Near the fastest growing airport in the country • Over 100,000 people work within three miles of Tukwila- Southcenter • Light Rail Station Tukwila City Council Committee of the Whole Minutes November 23, 2015 • Home of the Sounders and S2 • Westfield Southcenter • Museum of Flight • Over 200 restaurants WHY DAY TOURISTS 2014 Taxable Retail Sales (Per DOR) Sales Source City of Tukwila City of SeaTac Dining $188.6 million $145.8 million Hotel /Motel $65.8 million $191.5 million 200812009 Comparison, Taxable Retail Sales (Per DOR) Year 2008 2009 Percent Change Tukwila Restaurants $152.1 million $150.8 million -.88% Hotels /Motels $64.2 million $52.9 million -17.64 SeaTac Restaurants $117.8 million $109.6 million -6.95% Hotels /Motels $165.4 million $133.2 million - 19.50% POSSIBLE MARKETING CAMPAIGNS HOW Family Fun Day Meeting and Team Building Great Dining Sport and Event Fans Airport Related Patrons Furnishing Stores Print, Digital, and Social Media Events and Sponsorships Direct Marketing NEXT STEPS • Lodging Tax Advisory Committee Discussion on December 14, 2015. • Lodging Tax Advisory Committee Review of Applications, early 2016. • Council Review of Lodging Tax Funding Requests, early 2016. Page 12 of 19 Mr. Miles distributed a copy of Seattle Met that included an example of a "Holidays in Seattle" guide that provided local holiday event information that could be used as an example for marketing future events in Tukwila. The Councilmembers exchanged comments and asked Mr. Miles clarifying questions on information provided in the presentation. Tukwila City Council Committee of the Whole Minutes November 23, 2015 d. Police Department Records Management System purchase. Page 13 of 19 Councilmember Quinn indicated this item was discussed at the Finance and Safety Committee meeting on November 17, 2015. The committee members were unanimous in recommending approval. Trina Cook, Police Analyst, provided clarification on the one -time costs associated with the proposed Records Management System purchase. She stated the one -time cost would be under $700,000, and the on -going fees would be for staff time and maintenance fees. The Police Department is paying a maintenance fee for the current system and that fee will increase for the new system. This project is the biggest technology project the Police Department has researched to date. The Police Department's records management system has been in place for almost 20 years and is considered inefficient and limited. An updated system is expected to improve effectiveness, efficiency and safety; reduce liability; and falls in alignment with the City and Police Department Strategic Plans. Staff conducted a request for proposal process and after review of the proposals received, recommends the purchase of the Sentryx product from Spillman Technologies, Inc. A department needs assessment and onsite vendor visit were analyzed together, resulting in the !ist of recommended modules and features included within the agreement. The total request includes software, hardware, implementation, training, and a half -time technology support position. The total cost, including one -time and ongoing costs, is $1,070,466.00 through 2018. $350,000 has been set aside in the Contingency Fund for the proposed purchase, and the remainder through 2017 was included as part of the budget amendment that was reviewed earlier this evening. Chief Villa added that one benefit of the proposed system would be the dashboard feature that he and others would use to gather crime data within the City. The Councilmembers exchanged comments and asked clarifying questions of staff on the features and costs of the proposed program. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. e. The 2015 COPS Hiring Grant award. Councilmember Quinn indicated this item was discussed at the Finance and Safety Committee meeting on November 17, 2015. The committee members were unanimous in recommending approval. Eric Drever, Police Commander, stated staff is seeking Council approval to accept a federal Community Oriented Policing Services (COPS) grant award of $250,000 from the United States Department of Justice to help fund two new officers, who will be assigned to residential areas and focus on outreach to the City's immigrant and refugee communities. Summary of Financial Impact: Expenditure Cost Salary and benefits over 4 years for two officers $ 1,038,122 Uniforms and Equipment $ 15,600 Marked Police Vehicle 1 car for the 2 positions) $ 66,000 O &M for Vehicle over four years $ 47,760 Replacement Schedule for vehicle over four years $ 44,000 Grant award $ 250,000 Total City cost over four years: $ 961,482 The Councilmembers exchanged comments and asked clarifying questions of staff on the agenda item. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 14 of 19 f. A discussion on the Council vacancy process. Laurel Humphrey, Council Analyst, explained as a result of the November 3, 2015, General Election there will be a position vacancy on the Tukwila City Council as of January 1, 2016. It is the Council's responsibility to appoint an individual to serve the remainder of Council Position No. 3 through December 31, 2017. City and State law grant the Council's authority to appoint a qualified individual to the vacant office but do not specify how the process must be conducted. According to TMC Section 2.04. 190 In order to fill the vacancy with the most qualified person available until an election is held, the Council will widely distribute and publish a notice of the vacancy, the procedure and any application form for applying. The Council will draw up an application form, which contains relevant information to answer set questions posed by the Council. The application forms will be used in conjunction with an interview of each candidate to aid the Council selection of the new Councilmember. According to the Revised Code of Washington (RCW 42.12.070): Where one position is vacant, the remaining members of the governing body shall appoint a qualified person to fill the vacant position. Additionally, the Council must appoint a qualified person to fill the vacancy within 90 days of the occurrence of the vacancy, or the authority to appoint will be transferred to King County. It is in the best interest of Tukwila for the Council to conduct a fair, reasonable and transparent process to appoint the most qualified individual to Tukwila City Council Position No. 3. Pursuant to Tukwila Municipal Code Section 2.04.190, staff recommends an application and interview process similar to that employed in 2008 when Council last appointed a vacancy. Timeline Monday, November 23, 2015 — Committee of the Whole • Discussion, modification, and /or approval of proposed appointment process and attached documents Monday, November 30, 2015 • Publication of Official Notice of Intent to Fill Vacancy by Appointment • Widespread distribution of notice and application availability (City website, local news outlets, social media, TukTV, etc.) • Applications available at City Hall, on the City website, and by request to citycouncil(@tukwilawa.gov or 206 - 433 -8993 Monday, December 28, 2015 • Applications due to City Hall by close of business (5:00 p.m.) • Applications distributed to Council (by email and hard copies placed in mailboxes) by 6:00 p.m. Wednesday, January 6, 2016 • Qualified candidates invited to participate in interview process Monday, January 11, 2016 — Special Meeting of the Tukwila City Council • Candidate interviews • Possible Executive Session to evaluate candidates' qualifications • Possible nomination and appointment of individual to fill vacancy Tukwila City Council Committee of the Whole Minutes November 23, 2015 Wednesday, January 13, 2016 — Special Meeting of the Tukwila City Council (This date held in the event a second meeting is needed) • Continuation of candidate interviews • Possible Executive Session to evaluate candidates' qualifications • Possible nomination and appointment of individual to fill vacancy Tuesday, January 19, 2016 — Tukwila City Council Regular Meeting • Appointed Councilmember sworn into office Page 15 of 19 Interviews Completed applications will be distributed to Councilmembers for review by 6:00 p.m. on Monday, December 28, 2015. All applicants that meet the eligibility requirements and have successfully completed the application in full will be invited to an interview with the City Council. Candidate interviews will be conducted at a Special Meeting tentatively scheduled for Monday, January 11, 2016. Interviews will be limited to 30 minutes each, including five minutes at the beginning for the candidate to provide a brief introduction and overview of qualifications. The remaining time will be spent on questions. Each Councilmember will ask one question of the applicant in order of seniority. Councilmembers will be provided with rating forms (optional) to assist in their individual evaluation of each candidate. Executive Session Upon completion of the interviews, the Council may convene into Executive Session to discuss the qualifications of the applicants. However, all deliberations, nominations and votes taken by the Council must be in open session. The Council will reconvene into a Special Meeting for this purpose. Nominations and Deliberation The Mayor will ask for nominations from the Council for the purpose of creating a group of candidates to consider. No second is needed for a nomination. For simplicity, the Council may wish to create a nomination pool that includes all candidates who have been interviewed. The nomination period must be closed by a motion, second and majority vote of the Council. Following the nomination period, Councilmembers may deliberate on the nomination pool, offering comments about the nominees, the factors they used in deciding whom to support, or any other information they wish to share before voting begins. When deliberative comments have concluded, the Mayor will poll Councilmembers to determine if they are ready to proceed with a vote. Voting The City Clerk or Deputy City Clerk will proceed with a roll call vote. Councilmembers will respond by stating the name of the nominee they wish to appoint. Any nominee receiving a majority of four or more votes will be appointed to Position 3. If a majority vote is not reached in the first round, the roll call vote will repeat. Councilmembers may not change their vote until a new round of voting. The Council may choose by consensus to offer the Mayor the opportunity to cast a tie - breaking vote, pursuant to RCW 35A.12.100. If the interview, nomination and appointment process cannot be completed in one evening, the Council may resume the process at a second meeting tentatively scheduled for Wednesday, January 13, 2016. The newly appointed Councilmember will be sworn in at the Regular Meeting on Tuesday, January 19, 2016. A note on public records: All materials related to the appointment process are considered public records, including but not limited to applications, notes, evaluations, and all written and electronic correspondence. The Councilmembers exchanged comments and asked clarifying questions of staff on the suggested process included within the agenda packet (pages 263 through 278). It was noted that there are a few questions for the City Attorney, and those would be sent directly to her by the Council. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 16 of 19 COUNCIL CONSENSUS EXISTED TO HAVE STAFF MOVE FORWARD WITH THE APPLICATION PROCESS AS PROPOSED ON PAGES 267 -274 OF THE AGENDA PACKET. g. A recommendation from the Regional Fire Authority (RFA) Annexation Steering Committee. In September of 2014, the City Council moved to investigate annexation to the Kent Regional Fire Authority (RFA) and directed the Mayor to organize a committee with broad representation to conduct that review. A Steering Committee was organized that included Council representatives as well as residents, business representatives and firefighters. The Committee has concluded its nine month process and made a recommendation. The majority opinion — though not unanimous — is to recommend annexation into the Kent RFA. The Committee's recommendation includes the positive outcomes as well as potential negatives associated with the proposed annexation were they identified as a result of their investigation. Moira Bradshaw, RFA Project Manager, introduced members of the Regional Fire Authority Annexation Steering Committee members in attendance this evening. Ms. Bradshaw utilized a PowerPoint presentation to update the Council on the RFA Steering Committee process. Highlights of the presentation included: REGIONAL FIRE AUTHORITY (RFA) ANNEXATION STEERING COMMITTEE Councilmembers: • Joe Duffie • Verna Seal Residents: • Jessica Jerwa • Jerry Thornton • Kathleen Wilson Business Representatives: • Roxanne Knowle, Senior Real Estate Manager, CBRE Group, Inc. • Mark Segale, Segale Business Park • Becky Smith, District General Manager, Westfield (Genevieve Christensen, Alternate) Tukwila Firefighters: • Merle Brooks • Alan Codenys • Dawn Judkins, President, International Association of Fire Fighters (IAFF) Local 2088 Non - voting Committee members: • Tukwila City Administrator David Cline • Interim Tukwila Fire Chief Chris Flores • Kent RFA Board member Mike Denbo • Kent RFA Fire Chief Jim Schneider • IAFF Local 1754 President Ray Sherjvan • Kent RFA Attorney Brian Snure COMMITTEE'S SCOPE OF REVIEW • Fire service investigation by the City of Tukwila • History of the Tukwila Fire Department • Governance • Facilities • Municipal budget versus RFA budget • Revenue and expenditures • Level of service Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 17 of 19 • Demand for emergency medical and fire response • Fire facility /equipment needs and conditions • Fire Code and Emergency Management FINDINGS — TUKWILA FIRE • Provides good service and fast response because of the community's investment in station locations • Is well respected and appreciated by the residential and business community • Long history and specialized teams such as Hazardous Materials (HazMat) and Rescue • Needs additional support to replace stations and equipment and leadership certainty FINDINGS — KENT RFA • Nationally accredited and well respected • Innovative in creating partnerships and programs • A regional model where the City would be part owner of the organization with three members on the RFA Governing Board • A more equitable funding model that comes with a higher cost for some QUESTION • Should the City invest in the existing local Fire Department or would it be more efficient to consolidate with the existing regional model? STEERING COMMITTEE RECOMMENDATION • The Committee found that the positives outweigh the negatives and while it was not a unanimous decision, the majority of the Committee members recommend moving forward with annexation to the Kent RFA. NEXT STEPS • The Council is being asked to forward this item to the December 7, 2015 Regular meeting in order to review annexation options TIMELINE • April 2016: Community vote needed for a January 2017 annexation date • April 2017: Community vote needed for a January 2018 annexation date Council consensus existed to extend the Committee of the Whole meeting past 11:00 p.m. Roxanne Knowle, Senior Real Estate Manager with CBRE, stated she created a pro /con list for herself to aid in the decision process, which can be consolidated into three areas: leadership, capital improvements and financial and operational efficiencies. She explained she was impressed with the leadership in the Kent RFA; the plan they have proposed has the ability to accommodate a 20 -year Capital Plan that would address Tukwila's needs. Additionally, the plan allows the combining of forces, which could eliminate or greatly reduce the need for overtime. She feels most of the cons were relatively minor and were outweighed by the pros. She believes if the costs were relatively the same, it would have been a unanimous decision. Any increases in costs for the properties represented by CBRE Group, Inc. would be passed onto the businesses themselves. Ms. Knowle provided the Council with low and high examples of the sample (City) property tax levy rates discussed by the Steering Committee that could result from the City's annexation into the Kent RFA. She voiced support for the minimum rate to be applied. Kathleen Wilson said that she voted yes on the proposed annexation into the Kent RFA. However, the cost is a main concern for her. She believes that having the City annex into the RFA is the best solution for Tukwila and the Tukwila Fire Department. Council President Kruller asked how many members of the committee voted against the plan. Ms. Bradshaw said that two Steering Committee members voted against annexation. Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 18 of 19 Councilmember Hougardy said there are still lots of questions on this issue, mainly relating to the cost of the RFA She suggested a matrix be prepared before the next meeting on December 7t" to include Council and citizen questions. Dennis Martinez, 4660 South 160th Street, said that the new administration should be given time to take over and see if the Department Directors can trim from the department budgets and work towards trying to fix the in -house problem rather than sending it out to the RFA. New people are coming into the City government, and they will have new ideas and ways to trim budgets. Citizens are so happy that these meetings are televised; people are watching and talking to each other about City concerns. He voiced his concern about the make -up of the Steering Committee. The current committee included just three residents, and he feels there should have been an equal number of business and resident representatives. Ms. Wilson stated that money has to be spent. Three of the City's fire stations need major upgrades, and one fire station needs to be relocated. The Committee did consider the option of contracting for services like SeaTac. However, it was determined that contracting for services was not a good solution for Tukwila. The economic benefit of joining the RFA is huge in freeing up firefighters and getting better equipment. She was very impressed with their strategic plan, and the savings portion was a small part of the overall recommendation. Dawn Judkins, Local IAFF 2088 President, explained that she has been involved with the City's RFA process since 2010. She was here when the City was forced to publicize the fact that Engine 52 was reduced to just an aid car. The current staffing is making the Fire Department rely more and more on mutual aid agreements, and the City's Hazardous Materials (HazMat) Team is minimally staffed. The Fire Department has resources, just not the staffing. She feels there needs to be some stability in the department and more budget accountability is needed. The firefighters are working the overtime, but it's a staffing problem, not that the firefighters want to necessarily work the overtime. The Department is supportive overall for this to move forward. Mary Tomaso, 13707 41St Avenue South, stated her immediate neighbors are senior citizens whose houses are almost paid off, and they are worried about the taxes they have to pay every month just to stay in their houses. These people are on fixed incomes, as she will be when she retires in the near future, and she feels the question about the cost is fair and needs to be answered before the issue moves forward. Councilmember Robertson asked if the next step would be for the Council to pass a resolution to put this item on the ballot. Ms. Bradshaw stated the next step is to request the Kent RFA Governing Board to approve the annexation and the plan. If the Board approves the plan, the Kent RFA Board would then send it back to Tukwila, and the City Council would pass a resolution for including the item on a future ballot. Councilmember Robertson asked if the Interlocal Agreement (ILA) development would be part of the resolution that would be forwarded to the RFA Governing Board. Ms. Bradshaw answered in the affirmative. She explained the framework for the ILA is in the Annexation Plan and the ILA implements that plan in detail. There is still some negotiation to be done with Kent. Councilmember Robertson asked if he understood correctly that as part of the process, the negotiation would not begin until the Council decides they want to move forward. Ms. Bradshaw answered yes. The next question for the Council to answer is whether the Council would like to move forward with potential annexation, and at that time, future dates would be discussed. Councilmember Duffie asked when the Council would have a public hearing on this issue Tukwila City Council Committee of the Whole Minutes November 23, 2015 Page 19 of 19 Ms. Bradshaw stated the public hearing date would depend on when the Council would like to have the annexation item placed on the ballot. Councilmember Quinn asked when the information will be available for the public on potential costs to taxpayers, and whether that information will be available at the December 7, 2015 Regular Meeting. Ms. Bradshaw answered in the affirmative. Councilmember Hougardy would like to know if there is consensus from the Council for staff to create a comment matrix so questions can be asked of staff ahead of the December meeting to allow time for staff to gather answers. COUNCIL CONSENSUS EXISTED FOR STAFF TO CREATE A COMMENT MATRIX. 11:34 p.m. Councilmember Hougardy exited the Council Chambers. Councilmember Robertson stated that the cost of running the fire department versus the RFA were pretty equal from what was presented tonight. In his mind, whether the fire service stays in Tukwila or goes to the RFA, property owners still get the bill. He hopes the presentation from staff at the December meeting will cover all the costs. 11:36 p.m. Councilmember Hougardy returned to the Council Chambers. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. Due to the lateness of the hour the Council dispensed with reports. ADJOURNMENT 11:36 p.m. COUNCIL PRESIDENT KRULLER DECLARED THE COMMITTEE OF THE WHOLE MEETING ADJOURNED TO CONVENE A SPECIAL MEETING. Iler, C cil President Minutes by Lady of Letters, edited by Melissa Hart, Deputy City Clerk APPROVED BY THE COUNCIL PRESIDENT: 12/14/15 AVAILABLE ON THE CITY WEBSITE: 12/15/15