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HomeMy WebLinkAbout10-31-2002sp SPECIAL CITY COUNCIL MEETING October 31, 2002 8:30 AM BEST WESTERN PEPPERTREE INN, AUBURN, WASHINGTON COUNCIL RETREAT - VISIONING Minutes I. Call to Order Mayor Lewis called the special meeting of the Auburn City Council to order at 8:45 AM, at the Best Western Peppertree Inn, 401 8th Street SW, Auburn, WA. Mayor Lewis and the following Councilmembers were present: Rich Wagner, Trish Borden, Fred Poe, Sue Singer, Stacey Brothers and Gene Cerino. Councilmember Jeanne Barber arrived at 8:50 AM. Staff members present included: Planning and Community Development Director Paul Krauss, Finance Director Shelley Coleman, Parks and Recreation Director Daryl Faber, City Attorney Daniel B. Held, Police Chief Jim Kelly, Fire Chief Bob Johnson, Public Works Director Christine Engler, Human Resoumes Director Brenda Heineman, Executive Assistant Duanna Richards, and Deputy City Clerk Cathy Richardson. Also present were facilitators Greg Pmthman and Kathie Oeser of Prothman Company. II. Review and Revise Retreat Goals Mayor Lewis explained that the purpose of the meeting is to develop a work-plan and timeline for developing future budgets that will enable significant input from Council. The purpose is also to establiSh a long-term vision for the City of Auburn in view of current financial challenges. Councilmember Barber arrived at this time. Mayor Lewis reviewed impacts of the 1% property tax cap. III. Review City Council Interviews Greg Prothman of Prethman Company reviewed the current economic situation related to loss of revenue and the impact on local governments. Page I City Council Special Meeting October 3t, 200? Mr. Prothman distributed an agenda and interview summary and read the three goals for this morning's exemise, as follows: Considering Auburn's current financial challenges, identify a ten to fifteen year perspective on what services should be provided and begin defining how Auburn will continue to evolve as a community. · Develop Council dialogue on the City's financial challenges. · Solicit Council's direction on next steps in working towards the City's vision and eventual service levels, and potential funding alternatives. Councilmember Wagner referred to the interview summary, last line, and suggested that the following item be added as a goal: · Which issues Council as a whole agrees should go to the voters. Mr. Prothman introduced Kathie Oeser to review Councilmember interview results. Ms. Oeser referred to the interview summary and explained that the intent was to summarize the information gathered during the Councilmember interviews with regard to their visions of Auburn in fifteen years. The results revealed the following: · Population Comments - growth for Auburn in fifteen years ranged from 45,000 to 85,000, averaging 68,000 · Lea Hill Annexation Comments - four Councilmembers said no, and three Councilmembers had no statement City Core Services Comments - o Police - seven Councilmembers stated it is a core service, should not be contracted, and should not be cut unless there are no other alternatives o Fire - six Councilmembers stated it is a core service and one Councilmember suggested the City consider joining a fire district for fire service o Parks - four Councilmembers stated that parks should be maintained but cutbacks in recreation programs might be considered, one Councilmember stated that recreation programs should remain intact as they are part of the Vision Statement, and two did not comment Page 2 City Council Special Meeting October 31,200'~ Roads - most Councilmembers stated that roads are a core service, but maintenance could be cut back Water/Sewer - seven Councilmembers stated it is a core service Contract Services - two Councilmembers said services should not be contracted, one Councilmember said it should be considered as an option, and four did not comment Partnering with Other Agencies - two Councilmembers brought this up as an option General Comments - o Current Financial Status - one Councilmember felt it may not be as serious as predicted, one felt it may be worse than predicted, and five agree with the predicted $2-3 million shortfall o Economic Development - two Councilmembers discussed how it should and should not be used in terms of a solution to the budget crisis Taxes - o Given the worst case scenario, four Councilmembers stated that they would support raising taxes and three stated they would not Retreat Expectations - o All Councilmembers viewed the retreat as an opportunity to discuss issues and ideas among fellow Councilmembers o Majority of Councilmembers want discussion and possible consensus regarding which services should be protected in any event and the priority of those se~ices o Majority of Councilmembers want to know which issues that the Council as a whole agree should go to the voters IV. Overview of GMA and Auburn's Present Vision of the Future Planning and Community Development Director Paul Krauss stated that the Growth Management Act (GMA) is often referred to as one of the major drivers for cities in Washington. GMA has succeeded in establishing limits to urban growth, especially in King County. There is a rural/urban line that the City has been successful in maintaining, but this means that more intense development will occur within the City and density will increase. Auburn will continue to become more urban than it has been in the past. GMA was also successful in mandating comprehensive planning and coordination of those plans. Director Krauss stated that the State's notion of growth management has proven to be quite na'~'ve for the following reasons: · The State has never funded infrastructure development, yet requires concurrency Page 3 City Council Special Meeting October 31, 2002 · The State has never developed a local funding mechanism for Iow-cost housing development, yet requires that 48% of housing be of Iow to moderate cost · The State has never had funding for central public facilities or downtown redevelopment · The GMA does not mandate true regional planning, only county planning · The GMA allowed much of the decision making to be made by the court system rather than by elected officials · The GMA allowed the initiative and referendum process to decimate public financing Director Krauss stated that Auburn will continue to grow over the next fifteen years. Even without annexations, the City can accommodate approximately 15,000-20,000 additional residents and thousands of jobs. Auburn's population has grown more affluent. They have higher expectations with regard to levels of service and expect more interfacing with local government. Director Krauss reported that the City can expect greatly increased demands from those of Iow to moderate income. They will become more needy as federal, state, and county agencies offer less with regard to social services. Director Krauss noted that, forty years ago, Auburn was considered a full-service community. Auburn provided entertainment, employment, recreation, and education. As suburbia expanded, newer forms of shopping and entertainment located in other areas. As more of the regional and nationally significant shopping chains, specialty shops, medical and other services locate in Auburn, the City will become more of a full-service community once again. Director Krauss reported that as automobile transportation worsens, the transit hub will provide much needed services. Auburn's downtown area sets Auburn apart from other suburban communities. The importance of downtown Auburn should continue to grow as trends move towards traditional values of a central downtown area with focus on community. Director Krauss reported that, as population and jobs increase, Auburn's regional importance and participation will continue to grow. Auburn invented the FAST Corridor, which has become a regional transportation strategy. There will be greater regionalization of services to eliminate duplication. Environmental issues will become more acute. Demands on cities by federal and state agencies will continue to grow. Page 4 City Council Special Meeting October 31,200'~ Councilmember Singer expressed concern with regard to maintaining or upgrading Iow to moderate cost housing areas within the Auburn valley. Director Krauss stated that there are areas within Auburn that require stabilization. The neighborhood revitalization program addresses some of these issues. Code enforcement efforts have been strengthened and coordination between cede enforcement and police will help to preserve neighborhood integrity. V. City Finances - Present and Future Finance Director Shelley Coleman distributed a handout regarding revenues and expenses. Director Coleman referred to a graph on page one and reviewed General Fund revenues versus expenses beginning in 1999 through 2006. The decline in revenues from 2001 to 2002 is 8.5%. Increases in expenses from 2001 to 2002 include large operating transfers to the Capital Projects Fund. Increases from 2000 to 2001 include operating transfers to the Street Fund to support large road projects, such as the 3rd Street overpass, and to the Capital Projects Fund. Director Coleman reviewed estimated fund balance from 1999 to 2006. According to administrative policy, approximately 5% to 12% of revenues are held in reserve when possible. Reserved fund balance for cash flow for the 2003 budget is set at 8%. Reserved fund balance for the 2002 budget was set at 10%. Reserved fund balance will be approximately $12 million at the end of 2002, of which $4 million will be used to balance the 2003 budget. Director Coleman reviewed tax dollar losses since 1996 due to legislative or initiative action including the sales tax on manufacturing equipment exemption, sales tax on research and development, Referendum 47, 1-695 and 1-747. Loss of tax dollars from 1995 to 2006 is estimated at $14 to $20 million. Director Coleman directed Councilmembers to page four, regarding potential revenue from utility tax increases. The additional utility tax revenue recently adopted is estimated at $1.5 million. Utility tax revenue is down $1.6 million from 2001 to 2002. Boeing and approximately ten other companies are now brokering out of state for electricity to avoid paying utility taxes. Director Coleman stated that for general obligation bond debt, the City may issue up to 2.5% of assessed value for general purposes, 2.5% for utility purposes, and Page 5 City Council Special Meeting October 31, 2002 2.5% for open space and parks, all with a vote of the people. The annual debt service is 10% of issue for a twenty-year councilmatic bond. Director Coleman reviewed additional revenue available annually on page six, including user fees, utility tax, business and occupation tax (B&O), and property tax levy lid lift. B&O tax can be calculated on gross sales, head tax, or on floor space and is limited to two tenths of one percent. Director Coleman reviewed single-family monthly water rate comparisons with the cities of Puyallup, Renton, and Kent. Cities are allowed to implement a rate adjustment for water service outside the city limits. Auburn currently charges 37%. Discussion followed regarding average monthly water consumption for single- family residences and the City's billing process. VI. Defining the Challenge Councilmembers concurred that Auburn is facing an economic challenge with regard to balancing future budgets due to recent legislative, initiative and referendum actions. Mayor Lewis recessed the meeting at 9:55 AM. MaYor Lewis reconvened the meeting at 10:10 AM. VII. Developing a Guiding Vision Mayor Lewis stated that, although the City of Auburn is facing budgetary challenges, the City has been well managed over the years with regard to budgetary issues. Cities which do not have a commercial tax base are facing the decision of whether to disincorporate due to loss of revenue and increasing expenses. There are cities that are making across the board cuts or are imposing new or additional taxes, and there are cities that are able to fall back on reserves for a time. The City of Auburn has the opportunity to develop a plan to ovemome the financial challenges being faced across the region. Mayor Lewis explained that the purpose of the retreat and the following exercise is to garner Council opinion and desires with regard to developing a long-term guiding vision for the City of Auburn. Page 6 City Council Special Meeting October 31,200'~ Mr. Prothman expounded that one of the outcomes of the retreat is to begin to define and re-examine Council's prior vision in light of the current economic climate. At 10:15 AM, Ms. Oeser requested Council and staff form teams to participate in an exercise to present their visions of the City of Auburn in fifteen years with regard to services, amenities, and population, etc. The presentations will aid in finding commonalities and differences to provide information, which will enable planning for the future of Auburn. At 10:58, Mayor Lewis and Councilmembers began their vision presentations. Mayor Lewis recessed the meeting at 12:00 PM. Mayor Lewis reconvened the meeting at 1:05 PM. VIII. Identify Commonalities and Differences in Vision Presentations Ms. Oeser asked Mayor Lewis and Councilmembers to participate in an exercise on learning styles. After the exercise, Mr. Prothman explained that the exercise displays how groups work as a team to problem solve. Ms. Oeser reviewed the commonalities of the vision presentations as follows: Downtown Vision o Lighting Plan o Pedestrian Friendly o Redevelopment Opportunities o Transportation Routes Leading into Downtown o Urban Center Muckleshoot Indian Tribe Intergovernmental Planning and Partnering Win/Win Opportunities Trails, Parks, Open Space, Tree Plan o Trail System - "The Big Loop" o Parks and Open Space o Treescape - Visualize More Trees o View Rivers and Wetlands as Assets Page 7 City Council Special Meeting October 31,200? · Job Development o Opportunity to Earn Wages to Support Family Sense of Community o Outreach to Citizens o More Citizen Involvement in Community and Government o Pride in Auburn - Beautification o Safe, Secure Place to Live · Golf Course Clubhouse · Public Safety Building/Fire Stations · New Post Office Customer Service o One Stop Services o More Uniform Services o Ease of Availability and Access Partnering Opportunities to Strengthen Governments o Muckleshoot Indian Tribe o School District o Railroads Economic Development o How it Relates to Jobs o How it Relates to Potential Revenue · Annexations · Human Services Corridor Improvements/Links o "A" Street o "M" Street o "1" Street o Highway 167 o Highway 164 o Highway 18 Link Mr. Prothman suggested forming a committee to formulate and establish a fifteen-year plan according to the commonalities listed above. Page 8 City Council Special Meetin.q October 31,200? Councilmembers Borden and Singer and Mayor Lewis volunteered to serve on the Visioning Committee. Mayor Lewis suggested developing a map depicting visual graphics to demonstrate projects and improvements. IX. Identifying Next Steps Mr. Prothman reviewed the estimated budget shortfall for 2003 and potential revenue soumes related to gambling and utility taxes, and user fees, implementing a B&O tax, and possible personnel reductions. Councilmembers discussed benefits and risks to raising fees and taxes and various methods for collecting B&O taxes. Councilmember Borden requested a detailed analysis of comparisons to other cities that currently collect B&O or head taxes. Mayor Lewis cautioned that implementing a B&O tax may discourage new businesses from locating in Auburn and will not encourage long-term economic development. Director Coleman noted that communications, gas, and electricity taxes can be raised to more than 6% with voter approval. Director Heineman suggested that, in the event personnel reductions are necessary, Council consider loss of revenue and services provided by those employees. Discussion followed regarding core services provided by police and fire. Mayor Lewis reported that the City has implemented a soft hiring freeze and has approximately fifteen positions that have been vacated and have not been filled. Between nine to eleven additional non-essential employee positions will have to be eliminated if taxes and user fees are not increased. Councilmembers discussed the current City of Auburn hiring freeze and potential revenue soumes including creating a fire district, ambulance services, and regionalizing other City services. Page 9 City Council Special Meeting October 31,200? The majority of Councilmembers concurred with regard to generating revenue by implementing additional gambling tax, utility taxes, and user fees. The majority of Councilmembers spoke in opposition to implementing a B&O tax. Director Engler noted that recent law provides that cities can create a street enterprise fund for ordinary street maintenance and street lighting maintenance. Rates are based on services provided for each street and may not be added to water and sewer utility billings but would require separate billings. Mayor Lewis recessed the meeting at 2:35 PM. Mayor Lewis reconvened the meeting at 2:45 PM. Mr. Prothman summarized Councils request for additional information from staff as follows: · Percentage options related to gambling and utility taxes and user fees · Information on types of utility taxes · Explore Street Utility options · Explore Fire District information (long-term) · Explore fees for emergency transport (ambulance) · Explore State's efforts on closing the loophole regarding out-of-state energy purchases and taxation Discussion followed regarding the City's current moratorium related to gambling establishments. The majority of Councilmembers were opposed to lifting the moratorium. Councilmember Wagner volunteered to participate in the Visioning Committee with Councilmembers Borden and Singer. Councilmembers agreed to move forward with regard to a bond issue for a public safety facility that might include detention and court facilities, setting a target date of September, 2003. Discussion followed regarding other possible ballot issues including the proposed community center facility and increasing property taxes to maintain current City services. Councilmembers also discussed the importance of educating the public with regard to loss of revenue versus potential loss of services provided by the City. Page 10 City Council Special Meeting October 31,200? X. Adjournment There being no further discuSsion, the meeting adjourned at 3:14 PM. APPROVED THIS ~-~_ DAY OF ~~'~ y'~ ,2002. Peter~. Lewis, Mayor Cathy Rid~ardson, Deputy City~lerk I/clerldcouncil/2002m10-31 Special Retreat Page 11