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HomeMy WebLinkAbout2018-11-13 Committee of the Whole MinutesTukwila City Council Committee of the Whole Meeting City Hall Council Chambers November 13, 2018 — 7:00 P.M. MINUTES COMMITTEE OF THE WHOLE CALL TO ORDER/PLEDGE OF ALLEGIANCE Council President Seal called the Tukwila City Council meeting to order at 7:00 p.m. and led the audience in the Pledge of Allegiance. OFFICIALS Present were Council President Seal; Councilmembers Dennis Robertson, Kathy Hougardy, De'Sean Quinn, Kate Kruller, Thomas McLeod, Zak Idan. CITY OFFICIALS David Cline, City Administrator; Rachel Bianchi, Deputy City Administrator; Bruce Linton, Police Chief; Peggy McCarthy, Finance Director; Vicky Carlsen, Deputy Finance Director; Cindy Wilkins, Fiscal Specialist; Bill Kolden, Interim Human Resources Director; Henry Hash, Public Works Director; Gail Labanara, Public Works Analyst; Jack Pace, Community Development Director; Rick Still, Parks and Recreation Director; Chris Flores, Assistant Fire Chief; Derek Speck, Economic Development Administrator; Laurel Humphrey, Council Analyst; Andy Youn, Deputy City Clerk. PUBLIC COMMENTS There were no public comments. PUBLIC HEARING a. Tax Levy Legislation: (1) An ordinance levying the general taxes for the City commencing January 1, 2019. (2) An ordinance increasing the regular tax levy commencing January 1, 2019. 7:01 p.m. Council President Seal opened the public hearing and asked for a staff report. Vicky Carlsen, Deputy Finance Director, explained this item is the City's annual process to set the property tax levy for 2019 and also includes the excess levy related to the Public Safety Plan that was approved by voters in 2016. Council President Seal called for public comments. There were no public comments. 7:02 p.m. Council President Seal closed the public hearing. b. Budget Legislation: (1) An ordinance adopting the 2019-2020 biennial budget. (2) A resolution adopting the 2019-2024 Financial Planning Model and CIP. 7:02 p.m. Council President Seal opened the public hearing and asked for a staff report. Ms. Carlsen explained the proposed 2019-2020 biennial budget and the resolution adopting the 2019- 2024 Capital Improvement Program (CIP) were presented to Council on October 1, 2018. As Council continues their budget deliberations, this is an opportunity for the public to comment on the proposed budget. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 2 of 9 7:03 p.m. 7:04 p.m. Council President Seal closed the public hearing. Council President Seal reopened the public hearing to allow for public comments. Eva De Jesus, 13795 Interurban Avenue South, speaking through an interpreter, relayed she lives in Tukwila and this is her first time attending a Council meeting. She is a Community Connector for the City. She is interested in more public security and police services. 7:05 p.m. Council President Seal closed the public hearing. Council President Seal invited Ms. De Jesus to speak to the City Administrator about any concerns regarding the budget and shared there will be additional time for the public to provide comments as the budget is still under deliberation. SPECIAL ISSUES a. Tax Levy Legislation: (1) An ordinance levying the general taxes for the City commencing January 1, 2019. (2) An ordinance increasing the regular tax levy commencing January 1, 2019. Councilmember Quinn indicated this item was discussed at the Finance Committee meeting on November 6, 2018. The committee members were unanimous in recommending approval. Ms. Carlsen noted this item is part of the annual process. The first ordinance sets the general tax levy and includes the excess levy related to the Public Safety Plan. The second ordinance shows the dollar and percent increase from the previous year. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. b. Budget Legislation: (1) An ordinance adopting the 2019-2020 biennial budget. (2) A resolution adopting the 2019-2024 Financial Planning Model and CIP. Councilmember Quinn indicated this item was discussed at the Finance Committee meeting on November 6, 2018. The committee members unanimously forwarded this item for Council discussion. Council President Seal explained budget deliberations will continue. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO A FUTURE REGULAR MEETING. c. A resolution adopting updated policies related to the Financial Planning Model and other general financial policies. Councilmember Quinn indicated this item was discussed at the Finance Committee meeting on November 6, 2018. The committee members were unanimous in recommending approval. Laurel Humphrey, Council Analyst, highlighted pages 35 and 36 of the agenda packet and explained Financial Policies are adopted by resolution and reviewed on a regular basis. Revisions for the 2019- 2020 biennium are proposed as follows: Policy FP-1 Updates title of referenced document. Policy FP-2 Updates title of referenced document. Policy FP-3 Updates title of referenced document. Policy FP-4 Revises to align with the current Council preferred practice of Council Committees approving capital grant applications requiring a local match. Adds requirement that exceptions to Capital Improvement Program projects require Committee approval. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 3 of 9 Policy FP-7 New policy requested by 2017 Finance Committee to streamline the process required by Tukwila Municipal Code (TMC) Section 3.32.040, "Unbudgeted Equipment or Fixed Asset Items." For the purpose of compliance with this section, "unbudgeted" shall mean when a department's capital asset line has insufficient budget for the desired purchase. Capital equipment or fixed asset purchases between $5,000 - $39,999 are not subject to TMC Section 3.32.040 and do not require Council Committee approval if there is sufficient budget, unless there is a policy implication. Policy FP-8 Renumbered. Policy FP-9 Renumbered and clarifies Enterprise Fund. Policy FP-10 Renumbered and clarifies Enterprise Fund. Policy GF-6 New policy requested by Council on October 15, 2018. The Council shall receive an updated list of all contracts every quarter, including the amount, responsible department, scope of work, and expiration date. Following a request for clarification on Policy FP-7, Ms. Humphrey explained TMC Section 3.32.040 requires Committee approval of certain purchases that are unbudgeted. That section will remain in the code but the definition of "unbudgeted" is being updated to mean when the department's capital asset line item has insufficient budget for the desired purchase. If the department has sufficient appropriation to cover the purchase, it is deemed budgeted and committee approval will not be needed. Councilmember Kruller added the intent is to give some autonomy to departments. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. d. A resolution repealing Resolution No. 1913 and adopting a revised Business License fee schedule. Councilmember Quinn indicated this item was discussed at the Finance Committee meeting on October 16, 2018. The Committee had no recommendation and forwarded this item to the Committee of the Whole for discussion. Ms. Carlsen referenced the charts on page 42 of the agenda packet and said the first chart compares business license fees and Business and Occupation (B&O) taxes for surrounding cities. The second chart lists the outside contractor fee for surrounding cities. City staff conducted outreach to a number of businesses from September 24, 2018 through October 17, 2018. Five businesses did not return calls by staff. In general, there was understanding of the financial circumstances necessitating the fee increase, though some commented that the percentage increase was high. Additionally, staff mailed over 2,000 postcards to all businesses with a physical location in Tukwila inviting them to attend an open house on October 29, 2018. Summarized below are comments made by the 11 businesses that attended the open house: • Representatives appreciated that the City held the open house and gave businesses the opportunity to comment. • A couple of attendees indicated they were disturbed more did not show up to the open house. • Several asked if the City had considered other revenue options. • One specifically asked if the City had considered a B&O tax and was glad to hear that option did not move forward. • At least two commented they appreciated the City reduced costs in addition to increasing revenue. • One business owner was strongly against the increase. • Several expressed concern regarding the overall cost to businesses. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 4 of 9 • At least one business representative stated 60% is a significant increase. • Two businesses asked whether the City would consider stepping in the increase over time. • A Tukwila contractor preferred the former method of computing the business license fee using full-time equivalent (FTE) hours instead of a per employee fee. A comment board was also provided for representatives to leave their comments in writing and is summarized on page 43 of the agenda packet. Ms. Carlsen referenced the November 5, 2018 Regular Meeting at which the Council discussed an increase to the gambling tax. During discussion of this item, the Council considered capping the business license fees at $500 for casinos operating card rooms as modeled in Option B in the Six Year Forecast. She noted that a change in the business license fee for card room establishments will require an amendment to the resolution. If card room establishments are exempted from the business license fee, an amendment to the model ordinance will be necessary. Additionally, a flat fee has been proposed for outside contractors. There are three decisions that need to be made regarding business license fees prior to the adoption of the 2019-2020 biennial budget: 1. What business license fee should be adopted? a. $112 per full-time employee and $56 per part-time employee as currently proposed. b. Stair -stepped implementation of $91 and $45 in 2019; and the full increase in 2020. c. No change in existing fee structure. d. Other. 2. What should the business license fee be for card room establishments? a. Same as other businesses. b. Flat fee of $500. c. Exempt from the business license fee. d. Other. 3. What should the fee be for outside contractors? a. $100 flat fee. b. $150 flat fee. c. Same as business with physical presence. d. Other. Andrea Reay, 14220 Interurban Avenue South, is the President of the Seattle Southside Chamber of Commerce which represents approximately 100 businesses in Tukwila. She expressed her appreciation for the work of the Mayor and City staff in outreaching to businesses impacted by the 60% increase in RGRL/Business license fees. While an increase in fees is more palatable than the introduction of a new B&O tax, the scale of the increase and speed of implementation is concerning and is burdensome to local businesses. The Chamber will continue advocating at all levels of government for more equitable systems for revenue generation, accountability for responsible spending and increased mitigation for streamlined sales tax. She encouraged a more robust outreach plan and relayed the Chamber was still receiving calls regarding this issue prior to tonight's meeting. She looks forward to working with the City to ensure policies enacted at the State and local levels do not overburden businesses. David Leuthy, 3215 South 137th Street, is a business owner and resident of Tukwila. He is against the increase in the business license fee. He emphasized that a 60% increase in the business license fee is asking for a lot from businesses. He would appreciate if the City considered other sources of revenue and spread the budget shortfall around. In his experience, budgets always increase in expenses and never go down. Mr. Leuthy asked how much of a budget shortfall remains after the City's reduction in costs and to what extent the increase in fee covers the shortfall. Increasing the license fee by 60% will drive businesses away. He emphasized that it is unacceptable to assume business owners can shoulder the increase. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 5 of 9 Councilmember Hougardy highlighted the following comments that were left on the comment board at the open house: • More predictable increase such as 3% every year instead of 60% in one year. • Biennial payments to reduce impact on businesses. • Reevaluation of the fee if budget gap is smaller. She is in favor of stair -stepped implementation of the fee over the next two years and interested in the possibility of accepting biennial payments. She thanked staff for the clarity of the informational memorandum and presenting the decisions to be made as options that are easy to read. Councilmember Robertson relayed the City's normal operating costs increase 3% annually and is limited in what revenues it can generate and increase. 25% of its revenues come from property taxes and the majority of Tukwila's assessed valuation is in business properties. As property taxes can only be increased 1 % annually, it does not cover the increase in costs for the City. He expressed that the City has looked at all available options to generate revenue. While it could increase the local sales tax, retail sales are fluctuating so the City is being careful and conservative as sales tax is starting to flatten. He spoke in favor of stair -stepped implementation of the business license fee increase, exempting card room establishments, and a $100 fee for outside contractors. Councilmember Quinn shared the Finance Committee has reviewed options to address the structural gap since February. With the statewide change to destination -based sales tax and the cessation of the State's Streamlined Sales Tax Mitigation payments, Tukwila is preparing for a reduction of $1.2 million in revenue. He thanked the Chamber for their representation of local businesses and educational outreach. The relationship between businesses, elected officials and organizations bring value to the community because of the communication about key challenges. He spoke in favor of stair -stepped implementation and exempting card room establishments. He asked if stair -stepped implementation would also apply to the fee for outside contractors. Councilmember Kruller acknowledged receipt of two citizen comments sent to the Council via email earlier today: 1. An email from Tim May, dated November 13, 2018. 2. An email from Andy Bell, dated November 13, 2018. Ms. Kruller relayed Mr. May's concern regarding the proposed increase to the business license fee and its quick implementation. He requested that the Council consider other methods to align revenues with expenditures so the City maintains a business -friendly environment. She relayed Mr. Bell's suggestion to charge based on type of use and square footage. She reiterated comments regarding the cap on increasing property tax, increased City expenses, and reduction in Streamlined Sales Tax Mitigation payments. Administration's direction for departments to achieve a 3% underspend (Police and Fire were given a 1.5% goal) resulted in $1.8 million in savings per year. She supports stair -stepped implementation, a flat fee of $500 for card room establishments, and a $100 fee for outside contractors. Councilmember McLeod understands this increase is a burden to businesses. However, the City will begin seeing reductions in mitigation payments from the State soon. He relayed 70% of the City's budget is geared towards public safety services such as Police and Fire. While he is not in favor of raising fees, cutting services does not seem a viable option. He spoke in favor of a stair -stepped implementation and asked if late fees would be changed. He is in favor of exempting card room establishments and a $100 flat fee for outside contractors. Councilmember Idan appreciates the dialogue and outreach to the business community. He spoke in favor of stair -stepped implementation and asked if a biennial payment as referenced by Ms. Hougardy will be possible. Tobie Platts, with the Department of Revenue's Business Licensing Section, explained she will be working with the City on the processing of general business licenses through the State. At this time, the State does not have the ability to accept biennial payments. There is a statutory requirement that payments are due at the time of annual renewal. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 6 of 9 Ms. Carlsen indicated she would bring forward an ordinance to exempt card room establishments from the business license fee and amendments to the resolution adopting a business license fee schedule. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING WITH AMENDMENTS TO LEGISLATION AS DISCUSSED ABOVE. e. A resolution establishing a compensation policy for City employees and repealing Resolution No. 1796. Councilmember Quinn indicated this item was discussed at several Finance Committee meetings beginning in March and concluded with a majority Committee recommendation at the October 16, 2018 Finance Meeting. David Cline, City Administrator, explained the proposed resolution incorporates feedback given in previous Committee meetings and contains policy items relating to timeliness, comparability, market ranking, and internal equity. He summarized the changes as follows: • A.2 amended to give accountability to Administration and increase timeliness of information. • B.1 amended to update comparability definitions. • B.3 established to include policy direction and process for positions at, below, and above market. • B.4 amended to clarify policy direction and process for cost -of -living adjustments. • B.6 amended to provide a definition and process for compression. • B.7 amended to provide for an annual review of the compensation policy if warranted. Mr. Quinn expressed people will be impacted in different ways by revisions to this policy. The goal was to create consistency and predictability between non -represented and represented staff. He highlighted that the Finance Committee landed on +75/-50% of the City's assessed valuation to create the list of comparable jurisdictions for evaluation of salaries. This allows for a better match with comparable cities. The committee also established a process for positions that are above -market. He explained the Council will be engaged in review and approval processes relating to compensation. Bill Kolden, Interim Human Resources Director, commended the City for having a compensation policy in place. He emphasized the importance of having a regular review. He explained market misalignments will occur over time and are market -driven. During his time at Seattle City Light, there was a shortage of IT professionals due to competition with the technology industry that required the escalation of salaries for those positions to remain competitive. This is currently happening with law enforcement positions. Mr. Kolden stated this policy can also be used as the City moves forward with labor negotiations as it identifies comparable cities and addresses internal equity issues. Having a process of checks and balances will allow the policy to be brought back to the Council for modifications. Using +75/-50% of the City's assessed valuation as a criterion for comparability is more precise than using salaries. The Councilmembers discussed this item as follows: • In general, support existed for this item as presented. • The current decision band method may need review in the future as it does respond well to changes in the market. • Periodic reviews will reduce the potential of unintended impacts. • The Market Competitiveness Standard as provided by Bruce Lawson, compensation consultant, is an objective guide that addresses positions that are out of alignment with the market. Positions 5% below and up to 10% above the market are considered competitive. Council President Seal commended the Finance Committee in completing their review of this item. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 7 of 9 f. Discussion on proposed 2019-2020 biennial budget and 2019-2024 Capital Improvement Program. The Councilmembers continued review of the 2019-2020 biennial budget for Parks & Recreation, Finance, Department of Community Development, and Mayor's Office. Each of these departmental budgets were previously discussed at a Council Committee meeting and a Committee of the Whole meeting. Additional budget review and discussion occurred at the October 24, 2018 Budget Work Session. COUNCIL CONSENSUS EXISTED TO CONTINUE DISCUSSING THIS ITEM AT THE NEXT REGULAR MEETING. g. A resolution adopting the 2019 Legislative Agenda. Councilmember Kruller indicated this item was discussed at the Community Development and Neighborhoods Committee meeting on October 23, 2018. The committee members were unanimous in recommending approval. Rachel Bianchi, Deputy City Administrator, distributed an amended 2019 Legislative Agenda to the Council and explained additional language has been added under 'Shared Revenue' per Councilmember Quinn's request from the Transportation and Infrastructure Committee meeting earlier tonight. The City's Legislative Agenda provides direction to staff and consensus among elected officials as to what policy positions are taken on behalf of the City during the legislative session. The draft agenda includes relevant additions and deletions including: • Transportation and infrastructure projects • Funding the state Housing Trust Fund and continuing to fund human services • Reestablishing the Streamlined Sales Tax Mitigation payments • Increasing funding for education and law enforcement training • Ensuring equitable reimbursements for local facilities such as SCORE • Preserving Lodging Tax flexibility Councilmember Quinn noted Washington Initiative 940, Police Training and Criminal Liability in Cases of Deadly Force, recently passed and the City will need to contribute funding to ensure Police Officers receive the necessary training. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. REPORTS a. Mayor The Mayor was not in attendance. b. City Council Councilmember Robertson is the Chair of the Water Resource Inventory Area 9 (WRIA9) Management Committee and has been following the issue of the orca recovery task force started by Governor Jay Inslee. He relayed there will be changes in the following areas: contamination, vessels, and prey. During the time the orcas are in the Puget Sound, the Green-Duwamish watershed is one of their major sources of chinook salmon. The task force seeks to increase hatchery fish as a short-term solution. However, WRIA9 studies have shown there is a bottleneck in the Green-Duwamish watershed as a result of development. He referenced a "Seattle Times" Opinion article by Will Hall, Mayor of Shoreline, advocating for growth management that minimizes impact on the environment. Mr. Hall serves on the task force created by Governor Jay Inslee to recover local orcas. Climate change is having real and devasting effects in communities. Mr. Robertson emphasized that narrowing the banks of the Green-Duwamish will result in flooding. He stated that as we continually develop, it is important to develop intelligently and comprehensively. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 8 of 9 Councilmember Hougardy encouraged the Council to review the Public Safety Plan monthly update that was recently distributed as there are some project updates through September 2019. She also referenced the November 5, 2018 Public Safety Committee meeting minutes and relayed there was discussion concerning the immediate needs of Fire Station 54. Due to issues such as financial capacity of the City, and scope of work, the Committee has decided to return this item to Committee next spring for review. She attended the National League of Cities (NLC) City Summit in Los Angeles from November 7th through November 10th and attended workshops concerning topics such as infrastructure, equity, affordable housing, and diverse communities. Councilmember Kruller shared there is a Sound Cities Association (SCA) Public Issues Committee meeting on November 14, 2018 at Renton City Hall. She asked the Council to forward any comments about SCA's 2019 Legislative Agenda. Ms. Kruller recently attended an Association of Washington Cities meeting in Lakewood where she received her Advanced Certificate of Municipal Leadership. She attended the National League of Cities (NLC) City Summit in Los Angeles from November 7'h through November 10th where she focused on workshops regarding transportation, budgeting, affordable housing, policy making, race and social justice, and public safety. There was also an exhibit on redlining policies which can result in the exclusion or separation of underrepresented communities. She suggested approaching local policies from an equity lens to ensure communities are not excluded or negatively impacted. Ms. Kruller shared that she participated in an interest group on mobility devices such as electric scooters. She is interested in learning how other jurisdictions have handled similar issues so that Tukwila can be prepared if approached by a company. She relayed international rugby matches will be played in March 2019 at Fort Dent. Councilmember McLeod reported from the Transportation and Infrastructure Committee meeting on November 13, 2018 and stated the 53rd Avenue South Project was projected to be paved by the end of the year. After clarification from the contractor, the project is likely to be paved in February 2019 due to the weather. He also relayed the Committee is bringing forward a resolution adopting a Neighborhood Traffic Calming Program to the next Committee of the Whole meeting. Mr. McLeod attended the National League of Cities (NLC) City Summit in Los Angeles from November 7th through November 10th. He toured the City of Inglewood which has focused on redevelopment after experiencing near -bankruptcy. He relayed he also participated in a budget workshop and learned how "predatory" local governments can negatively impact low-income communities. Councilmember Idan attended the National League of Cities (NLC) City Summit in Los Angeles from November 7th through November 10'h. He appreciated the opportunity to participate in a budget workshop as he is new to local government. Council President Seal thanked the Council for their work this year. c. Staff There was no report. d. Council Analyst Laurel Humphrey, Council Analyst, offered a reminder about the Public Safety Plan Open House on November 17, 2018 at Valley View Sewer District from 10:00 a.m. to 12:00 p.m. ADJOURNMENT 9:44 p.m. COUNCIL PRESIDENT SEAL DECLARED THE COMMITTEE OF THE WHOLE MEETING ADJOURNED. Tukwila City Council Committee of the Whole Minutes November 13, 2018 Page 9 of 9 Verna Seal, Council President Andy Youn, Deputy City Clerk APPROVED BY THE COUNCIL PRESIDENT: AVAILABLE ON THE CITY WEBSITE: 12/03/2018 12/04/2018