Mayor Bruce Bassett calls the meeting to order and welcomes the public with public appearances.
Linda Todd speaks to the council first. She's here on behalf of the Mercer Island Sister City Association to thank the city for hosting an Oct. 25 reception at City Hall. She presents the city a watercolor painting that is a gift from Mercer Island's sister city, Thonon-les-Bains, France. She also thanked the city for allowing the association to borrow a Mercer Island Youth and Family Services van to pick up the students from SeaTac International Airport.
Todd reported that the French students were treated to a rare sight of an Orca Pod swimming through the Puget Sound on a ferry to Bainbridge Island, and a visit to a Seahawks football game at CenturyLink Field.
The minutes of Nov. 19, payables and payroll are approved. City Finance Director Chip Corder introduces AB 4790, 2013-2014 Final Budget Adoption. City Councilman Mike Cero tees off the discussion for adoption of the budget by calling the $110 million budget in 2013 as an "extreme budget", increasing 14 percent over the previous biennium overall.
Cero laments the "re-interpretation" by the city on budgeting policy of half of revenue cuts and half from revenue increases.
"The difference isn't coming from the citizen's increased wealth, it's coming from their hides."
Deputy Mayor Dan Grausz asks the city staff to respond. City Manager Rich Conrad tells the council that it had told them that the council was advised of the deficit all along.
"I think the characterization that this budget is an "extreme" solution is itself "extreme"," Conrad said.
City Manager Corder cautions that adding up all the funds budget to budget isnt'a an "apples to apples" comparison because of variations in capital projects, which also includes voter-approved projects such as the Fire Station/Truck levy. He also said that the 2011-2012 budget represented a significant expenditure reduction — five staff positions were eliminated in that budget cycle and several other positions were unfilled.
"Revenues coming into local government has been reduced year after year," Conrad said. "We've been balancing expenditures on the expenditure side for so many years now, on the local level and national level."
City Councilwoman Debbie Bertlin responds that she did not take raising tax rates lightly and that she worked hard to scrutinize expendiutures and prioritize spending on projects that the community expects.
Councilman Grady praises the budget for ways the city has cut costs and priortized parks and services and assistance to families whom are on fixed incomes.
Deputy City Mayor Dan Grausz criticizes Cero for "mischaracterizing" increases and the volume of expenditures and that changes he proposed mainly for staff positions that are "critical" to the operations of the city.
"You'll use those wild numbers — in your newsletter, I'm sure," Grausz said. "It undermines the credibility of this institution through misinformation."
Nearly all of the council disagrees with Cero's characterization of an "extreme budget" based on adding together all the city's funds, including infrastructure improvements for the city's utilities.
"We have been pretty darn frugal with the people's money," Mayor Bassett said. "It does do a dis-service to the institution when facts are thrown around lightly."
Councilwoman Jane Meyer Brahm called the process "difficult" and remembered cuts made in previous budgets.
"Those were major cuts that we're still feeling the results from," she said. "But I look around at other cities in our area and I feel very lucky to be in the position we're in."
The council passes the budget 6-1, Cero opposed.
Corder returns to the podium to introduce AB 4789, Fire Station & Fire Apparatus Replacement Limited Tax General Obligation and Refunding Bond Ordinance.
Two lawyers are here, Deanna Gregory with Pacifica Law Group, and financial advisor Annette Sommer of Seattle Northwest Securities.
The city estimates that it can save a net of approximately $153,000 in today's dollars. The levy is scheduled to end in 2022.
The council asks a series of questions about the debt financing, probing the estimated savings offered by the city and it's legal advisors. The city will be refinancing down from just over 4 percent down to 1.38 percent.
Senn moves to adopt ordinances to refinance and consolidate debt for rebuilding Fire Station 92 and a new fire truck, and to repay debt for the land where the Mercer Island Community & Event Center is located.
Both ordinances pass unanimously.
City Attorney Katie Knight introduces the next agenda item, B 4787, Model B&O Tax Ordinance Code Amendments. The amendments are intended to incorporate uniformity among city jurisdictions.
The main changes to Mercer Island's B&O tax laws are small, said city assistant finance director Francie Lake. The city takes in about $360,000 per year in B&O taxes, which is dedicated to the city's beautification fund.
In order to incorporate the ordinance into law, the city council must approve it tonight and suspend rules requiring a second reading.
The motion passes, 5-2, with Cero and Councilwoman Senn opposed.
A motion to approve the ordinance passes unanimously.
The City Council returns from a short break and Corder is back with a status report and budget amendments to the city's current finances for 2012, thrid quarter, AB 4788, 3rd Quarter 2012 Financial Status Report. Corder predicts the city will not need to use any money from the rainy day fund.
Corder conceeds that the 2012 forecast for REET was too optimistic, due mainly to lower than expected average home price sales (approx. $900,000) — and the city is estimating $1.98 million in revenues for this fund.
Once again, in order to incorporate the ordinance into law, the city council must approve it tonight and suspend rules requiring a second reading.
The motion passes, 6-1, Cero opposed. The amendments also pass unanimously.
City Deputy Manager Noel Treat addresses the council on AB 4791, Discussion of Tenant Relocation for True Value/Legacy Site.
City Manager Rich Conrad said the city has offered help to True Value directly — short of money — to preserve the business on Mercer Island.
Councilman Mike Grady expresses discomfort with a discussion on how to help keep businesses on the Island and says he finds it ironic that he's been asked to help while local store fronts appear empty in Town Center.
Deputy Mayor Grausz said he asked for the discussion because of citizen concern of losing True Value from Mercer Island and the unique goods and services the business provides. Grausz said he disagrees with Grady and said he's responding to those concerns
"I'm not comfortable with saying to our residents that I left it to real estate brokers and landowners," Grausz said.
Cero concurs with Grady and goes further, saying it's inappropriate for the City Manager to go to a particular business and offer help and it was the responsibility of the Mercer Island Chamber of Commerce and "free-market" forces to determine if businesses locate on Mercer Island.
"If we lose our hardware store — which I frequent all the time... That's not our job. That's their job," said Cero. "I think that's very unfortunate, but that's a consequesnce with the development that we have to contend with."
Grady responds to Grausz that the city has provided "an excellent framework" for local businesses to thrive. Grady throws down a challenge to the audience — including Mercer Island Chamber of Commerce Exec. Director Terry Moremon and local developer James Cassan of Dollar Developement — to approach True Value Hardware and offer an attractive rental package.
"Why don't they try and approach them, and lower their rates?" asked Grady.
Councilwoman Bertlin says there's two things that she's heard a lot about from the community at-large: The potential loss of the True Value store and tolling on I-90.
Councilwoman Brahm advocates for city funding and investment in economic development, and said upon hearing that True Value might close, Mercer Island resident Aubrey Davis told her: "You know, you don't have a town unless you have a hardware store."
City Manager Conrad says the council should have a more focused discussion on what role the city should play on economic developement.
"I think it's a fair observation that, if we're going to ratchet up our engagement in development, the city's going to do it," said Conrad.
Grady counters that he does not share that opinon, and says it's the Chamber's responsibility.
Conrad asks the council: "Is this the private sector's job, or the city's job?"
"I want to say, on something like this, I want to say that we tried," Deputy Mayor Grausz said. "We're a small community with an even smaller retail base."
Brahm responds that the Chamber can't be expected to raise dues to offset the cost of economic development by themselves.
Senn says she thinks that economic development can be a role of government, but she envisions her job to help support an "ideal Mercer Island" that involves outreach to attract "ideal businesses that we're looking for ... because I think it's important that we can lend a hand in any way." Senn says she supports the idea of creating a committee on economic development.
Cero says it's not the city's business to be looking for other businesses, and advocates a "free-market" approach.
"We do not need to spend resources and very finite and limited staff resources on this sort of thing," Cero said.
Grady hypothetically asks why the council is considering picking winners and losers.
"Be careful what you wish for," he said. "We need to ensure that we keep the paying field level for everybody."
"I see this as trying to deal with one specific issue that we have, which is dealing with a specific institution on the Island and trying to respond to residents," said Grausz. "It's just to make sure that everyone is talking to each other."
Bertlin asks for similar efforts to be extended to other businesses.
Conrad says he will give "good customer service" no matter the council's decision in telling them what to do.
"In this case, we'll give them a phone call," he said.
Deputy Mayor Grausz said he thinks more than that is required.
"It does mean facilitating a few meetings, making a few phone calls — and there's nothing wrong with that," said Grausz.
Mayor Bassett tries to draw the discussion to a close.
Grausz advocates a continuous line of communication involving outreach to businesses like True Value that are considering moving elsewhere, but a consensus of Mercer Island councilmembers decide they are opposed to that.
The discussion is remanded to the January 2013 planning session.
Mayor Bassett moves the meeting to Other Business. Mayor Bassett asks the council to think about visioning and "leaving a legacy" at the January Planning Session.
City Manager Conrad appears to be advocating the hiring of demographer for some sort of study on Mercer Island.
Councilmember Senn said she's pleased by the appearance of pedestrian crossing signs at 46th Street Southeast. Mayor Bassett cancels the the Dec. 17 meeting and adjourns Mercer Island City Council for 2012.