Tonight's meeting will begin at 6 p.m. with a study session on I-90 tolling, followed by its regular meeting at 7 p.m. when the public will have the opportunity to comment on Mercer Island's proposed 2013-14 budget.
Mercer Island Patch will report the meeting via LiveBlog below, with updates every few minutes appearing near the top of the page.
And with a personal thank you to the audience members remaining, the city council is adjourned.
Deputy Mayor Grausz reminds all to vote tomorrow on Electon Day.
Councilwoman Senn visited her children's schools for career day and arranged a "mock budget meeting for the class". According to Senn, Youth and Family Services and Utilities received the most money from students, followed by fire and police.
Councilwoman Brahm mentions that in honor of the "Elles" show at the Seattle Art Museum, there is a related Mercer Island display at the Mercer Island Chamber of Commerce.
City Manager Rich Conrad said the Town Center parking meeting between the mayor, city officials and private landowners in the Town Center. Is it a problem? Not a problem?
Conrad: "We certainly didn't get to a place where we could strike a deal, but there was a little movement and I certainly think there was a lot of learning on both sides."
Cero responds with an answers from the city Citizen's Survey on a lack of enthusiasm for raising taxes.
Nonetheless, a consensus of councilmembers will allow the Utility Tax creation.
The Council moves on to planning and other business. The city's Holiday Tree Lighting and Firehouse Munch is scheduled for Dec. 7.
"People don't move to Mercer Island for minimal services, I remember that well," said councilwoman Jane Mayer Brahm. "I don't think we should send (the City Manager) to go back and look for another $100,000 in cuts."
Conrad responds with something that sounds like a Jay Inslee political ad: We'll adopt lean management techniques.
"I've asked the staff to suck it up and get trained in lean techniques," he said.
The City Council moves next to consider raising the property tax by the annual maximum of 1 percent.
"People's wages go up, other people's incomes go up and the city's no different," said Grausz.
City Manager Conrad reviews the history of property tax as a funding mechanism of municipal governments. The few places the city can look for revenues, he said, are now limited to utility taxes and the annual property tax increase.
"This council no longer has the tools that they once relied upon," he said.
Councilwoman Bertlin asks about shifting the cost of credit card transaction fees to users. City accountant LaJuan Tuttle says VISA interchange laws don't allow merchants to pass the transaction fees along to customers, but Grausz challenges that saying a recent US Supreme Court case decided that practice was illegal. City Attorney Katie Knight says she'll research the matter and return to the City Council with an update.
City Council reconvenes. City Finance Director Chip Corder says he'll have to remove the Citizen biennial telephone survey from the budget to balance the city budget.
Mayor Bassett turns to Cero's proposal, which he suggests in setting aside.
City Manager Rich Conrad suggests the council reflect on its overall role in government and focus on policy — and not so much the minute level of detail that perhaps Cero's budget reductions suggests.
"There is a certain level of trust that exists (between the city and city council)," said Conrad. "I like to think that we're pretty good at this sort of thing."
City Council takes a 5 minute break.
A unanimous consensus of the council agrees to restore level of service funding to all parks. Mostly Music in the Park and Shakespeare in the Park funding is restored, but the Summer Celebration fireworks program will be left unfunded. Marine Patrol boat #12 will stay online.
A unanimous consensus of the council agrees to restore funding to lifeguards will be restored in to Groveland Beach.
Biennial Survey: Keep it. Performance pay for unrepresented employees: Drop it. Fully Funding Contingency Budget: Not now. Additional Funding for LOEFF 1 Long Term Care: No increase.
"We just kicked the can down the road on some of our utility projects, so ... I'm comfortable with the mayor's recommendation," said Senn.
After a long debate on process, Mayor Bassett starts reviewing Grausz's suggestions. Cero voices opposition to subscription to Suburban Cities Association. The council pauses again to iron out their decision process. The City Council will review each proposal, one at a time and weigh in.
Suburban Cities: Keep it.
Cero floats his own proposal, which would not fund the additional staff requested by City Manager Rich Conrad, in addition to numerous other cuts that amount to over $700,000 over the biennium.
Councilman Mike Grady advocates that the city moves forward on shifting street sweeping into the stormwater fund in anticipation of a legal mandate from Olympia.
A consensus of the City Council decides not to move the street sweeper out of the general fund, and agrees to remove the three capital projects, First Hill Drainage Extension, ICW & 85th Ave water project, and East Mercer Way Sewer Replacement Project from funding for the biennium.
City Manager Conrad responds to a question on increasing the property tax the maximum one percent by saying the city almost always has to assume the increase.
"You basically have to assume that. Until a Costco is built on Mercer Island, or something else generates a similar amount of sales tax revenue, we will not be able to otherwise make up the difference ... That property tax increase almost has to happen."
Grausz says at least $6 million will be spent on utility improvements in the next biennium, even after deferring the three projects proposed for delay.
"Everything in the political world is a compromise — as it should be," he said.
Councilman Mike Grady: "The cleanest and most legal way to deal with this utility is to keep the street sweeper in the stormwater utility fund."
Councilwoman Senn says investment in the city's capital projects for utilities is needed because the city has double the number of water main breaks and sewer claims as other comparable cities.
"I would encourage us not to go deeper in our cuts in service," said Senn. " Or we'll see some ugly results."
Cero wants to soften the increases on utility rate payers.
"I'd ask staff to defer another stormwater project to minimize the increase in ther rate."
Grausz's proposal will fund a handful of additional projects by removing three projects from each of the utilities and keeping the city's street sweeper function in the general fund. The impacts on the city's utility rates increases would then be: Water: 3.5 percent in 2013, 4% in 2014, Sewer: 4 percent and then 6 percent and Stormwater: 1.2 percent each year. The alternative would create an unusual jump in the city's sewer fund increases of 15 percent in 2015, however.
City Council has reconvened. Before the council is an excel spreadsheet with a number of items awaiting the council's direction.
Deputy Mayor Grausz offers a proposal of funding priorities.
"I think the one item that we have not talked about at any length before tonight was the street sweeper ... my concern very simply is we have significant increases in revenues and a lot of those increases are in stormwater increases ... I was personally looking for ways to reduce the rate increases."
"In this biennium, based on the numbers we've seen, I don't think it's the time to do it, so we don't have to raise utility rates more than we have to."
"I have a hard time saying that we should have a sustainability coordinator while at the same time reducing the level of service to parks. There's a disconnect to me."
City Council takes a 10 minute break. Some major policy decisions coming up here for the city's operating budget.
Corder also tees up items that are to be considered for cuts that are currently funded: membership in the Suburban Cities Association, the biennial citizens survey, pay for performance, new engines for Marine Patrol boat #12 and a new staff member for the Youth and Family Services Thrift Shop.
Corder offers potential service "restorations" that are at this point cut: Lifeguards and Groveland Park, Summer Celebration fireworks, LEOFF 1 long term care (funded only until 2024), and an underfunded contingency fund.
New natural gas rates have come down significantly from PSE and the city will be losing an expected $45,000. That's about a $72/year decrease for the "average" Mercer Island homeowner, said Conrad, but not-so-great news for city revenues.
Conrad warns the council that more regulation is anticipated from Olympia and will drive cities to increase efforts to reduce non-point source pollution, and street sweeping will reduce pollution and help the city comply with stormwater regulations.
Corder offers an alternate scenario with significantly lower rates by removing two projects from the proposed rate hikes. Several city councilmembers appear to be nodding in approval here.
Corder revisits the funing shift of street sweeping, a city project manager support staff person and YFS funding out of the general fund and into utility funds.
Deputy Mayor Dan Grausz says that he asked the city to show how much it would cost in additional general fund costs.
Corder says that other cities have shifted street sweeping to stormwater, and Islands are more justified that other communities because of their proximity to water.
Councilwoman Tana Senn, who is the council's Utility Board liason, said the project stood out as a "nice to have" rather than a "must have" in a list of capital improvements the Utility Board felt were urgently needed.
Councilwoman Jane Mayer Brahm asks about the risks of postponing the project. Yamashita says he's "comfortable in pushing it off for a few years," but said that the lack of drainage is contributing to drainage issues and is discouraging residential development in the neighborhood.
Bertlin asks if there are any other projects that are "non-urgent" or "non-essential".
Treat says that the city has already studied the issue with the utility board, but identified a number of projects that could be delayed until the next biennium, but each delay carries a risk. For example: delaying the proposed water system improvements to Island Crest Way and 85th Avenue ($1.6 million) would delay resurfacing Island Crest Way from Merrimount Drive to SE 40th Street.
City Deputy Manager Noel Treat introduces the city's 2013-2014 Capital Improvements Plan (CIP). City Engineer Patrick Yamashita discusses one project that drew several questions his spring when it was first proposed, the First Hill Drainage System Extension. If the project is cut, the water utility rate could be reduced from 5.1 down to 3 percent in 2013 and 2014.
David Laub, Utility Board Chairman, addresses the council. He says the main reason for increases in the utility rates are due to capital projects.
"Most of the water lines on the North-end of the Island was built in the 1950s and does not meet current standards for water flow and firefighting capacity," he said. "We have a very old system, especially on the North-end of the Island."
Councilwoman Bertlin asks a clarifying question that the rate increases are restricted to funding only the utility and it's infrastructure, and not for general fund increases.
Councilman Cero asks why there seems to be a continual increase in rate hikes. Corder says this is because of the city's aging water, sewer and stormwater infrastructure.
"What drives this is you guys have old stuff under the ground ... some of this stuff is older than I am."
Corder reviews the impacts of proposed tax and utility fee increases.
The following chart demostrates the increase in taxes for the median Mercer Island homeowner in a $700,000 home with a family of four:
Proposed Tax Increase
Levy lid lift ballot measure for fire station & fire rescue truck (if it passes)
1% property tax increase
Utility tax on water, sewer & storm water utilities (3.4% in 2013 and 5.0% in 2014)
Total annual tax impact
Here's a chart for the combined cost of the rate hikes, based on the "typical" homeowner's (in a $700,000 home with a family of four) bi-monthly bill:
Proposed Utility Rate IncreasesDescription 2012 2013 2014 Mercer Island bi-monthly bill $241.19 $262.48 $277.01 Rate increase over prior year 5.9% 8.8% 5.5% Dollar increase over prior year $13.39 $21.29 $14.53
Corder tries to demostrate value to the public by reviewing the property tax bill for the median Mercer Island homeowner: $6,347 is the total annual bill, but just $932 goes to Mercer Island City Hall in taxes — less than 15 percent.
Corder, showing City Hall pride: "What's interesting is you pay a little-bit more for King County, but what do you get? I can think of what you get from the city..."
Corder is advocating a change to the city's investment earnings distribution because current returns are very low and not expected revenues are unrealistic. He wants to reprogram the earnings among several funs, divert all earnings to fund the city's contingency fund or distribute the balance to the general fund. If the City Council wants to spread the earnings across several funds, Corder favors partially funding the LEOFF 1 long-term care pension reserve, the Youth Services endowment fund, the city's contingency fund, water/sewer/stormwater funds, fire apparatus reserve and the firemen's pension fund.
Last year, the city earned between $50-$60,000 on its investments.
City Finance Director Chip Corder is presenting the city's expected budget revenues. A total of a 2 percent increase in property tax increases is expected each year, of new constuction and a 1 percent property tax increase.
Corder is also projecting a 4.1 percent increase in 2013 and a 6 percent increase in sales tax revenues thanks to development activity. Utility taxes will increase 15.5 percent in 2013 and 8.1 percent in 2014 bue to base increases and the newly-proposed 3.5 percent Utility Tax.
EMS revenues will increase 9.8 percent in 2013 and 2.3 percent due to EMS utility fees and the King Council EMS levy.
Licenses and Permits up 9 and 3.5 percent due to development activity.
Recreation programs are up 6.3 and 2.2 percent, due to Mercer Island Community & Event Center rental and recreation program fee increases.
The public hearing is now opened on the city budget. Ira Appelman speaks during the hearing, stating that the city manager's budget is retaliating against the Paralegal. She vocally disagreed with the retaliation against Londi Lindell for which Lindell received a $1,000,000 settlement. The City Manager's budget downgrades the Paralegal's position to a half-time "legal assistant."
Appelman also compares the city's director-level salaries to executives in state government in Olympia. City Manager Rich Conrad's annual salary of $171,000 in 2013, said Appelman, will easily exceed Governor Christine Gregoire's salary in 2012.
The minutes of the city council's meetings on Oct. 15 and 22, payables and payroll are unanimously approved.
City Councilman Mike Cero pulls AB 4781 Interlocal Agreement for Urban Forestry Restoration Project from the consent calendar.
The grant provides no-cost services of a Washington Conservation Corps crew to remove invasive plants in Pioneer Park for up to three weeks in November 2012 as part of the Urban Forestry Restoration Project.
Cero is concerned "with adding bureaucracy when bureaucracy isn't needed," due to reporting requirements of telling the state where money is going.
City Parks & Rec Director Bruce Fletcher says the city will receive 720 hours of labor in exchange for tracking the report.
Cero moves to delete the requirements "Develop and implement a three-year maintenance plan for the project site, to include annual monitoring." and "Report monitoring results to DNR Urban and Community Forestry Program annually for three years," but no one supports the motion.
Councilwoman Jane Mayer Brahm moves to approve the agenda bill unamended. Cero speaks to his motion anyways. Councilwoman Bertlin responds in support of the bill.
Fletcher says that six staff members from the Department of Natural Resources will work for the city of three weeks, a $10,000 value.
The agenda bill is unanimously approved.
Marty Steele of Imagine Housing appears and addressed the council regarding the city's support of ARCH, the affordable housing coalition that Mercer Island is a part of.
City Manager Conrad says that he is recommending that the current budget be maintained to find ARCH.
Terry Pottmeyer appears on behalf of ARCH as the head of non-profit Friends of Youth. Pottmeyer says that youth homelessness has increased in the last few years on the Easside by 46 percent.
"Youth homelessness is a regional issue and it requires a regional response," she said.
Jonathan Harrington of the city's Sustainability Task Force appears during public comments. He reiterates the task force's recommendation for hiring a sustainability coordinator, and says it's not advisable to also require the coordinator to double as the city's official spokesperson ("communications coordinator").
"Embracing sustainability principles are good for our children, good for our community and good for the future. It's just the right thing to do," Harrington said.
Mayor Bruce Bassett convenes the regular meeting.
Councilwoman Debbie Bertlin asks how precise the measuring will be on traffic data. Stone says the traffic volumes are measured by segment, by every half-mile of highway interstate.
Stone says WSDOT is beginning an environmental study to review possible affects of tolling on I-90 between I-405 and I-5. Tolls on Mercer Island could begin as early as 2015 or 2016.
Stone will return on Jan. 7 with some or most of Mercer Island's legislators to address tolling.
Stone says there's a 1-4 percent drop in trips overall across Lake Washington since tolling began.
Westbound 520 is carrying the same volumes as before tolling, but there's still traffic building in the evening from Redmond to Seattle and on Eastboung 520, Seattle to Redmond is also seeing increased evening traffic.
On westbound I-90, congestion levels in September have bumped up above levels seen in the summer, from 3 to 7 p.m., where there is heavy congestion.
Eastbound I-90 is less congested.
Stone pivots to the discussion of possible tolling on Interstate 90, and WSDOT willl take all of next year (2013) to study proposals on how to raise money to pay for the SR 520 Bridge and better manage congestion.
"The days of 90 percent of federal dollars coming in to finance highways in our state are basically over."
Stone talks about the projected increases in the peak polling costs, which will increase 2.5 percent until 2016. In July 2016, there is planned 15 percent increase that is based on forecasted traffic levels. The commission may adjust any of these anticipated rate increases after their annual review of traffic and revenue — that's just under $4.50 per crossing.
Based on initial traffic results in September 2012, since tolling began, SR 520's toll traffic is generally at or above projected levels and travel times are six minutes shorter on average during the peaks.
On I-90, traffic has increased 13 percent over pre-520 toll levels on average and 1-90 travel times are three minutes longer on average during the peaks.
In Lake Forest Park and Bothell along SR 522, traffic has also increased 13 percent. Travel times have not increased during the morning peak and are
about two minutes longer during the afternoon peak.
Through Seattle on Interstate 5, traffic has increased approximately 3 percent in downtown Seattle and travel times through downtown Seattle are approximately four minutes slower in both directions.
Through Bellevue, traffic has increased approximately 9 percent in downtown Bellevue and travel times through Bellevue are approximately five minutes slower southbound and two minutes slower northbound during the peaks.
Stone responds to complaints of the toll rate being to high with an estimate of the old SR 520 toll rate in 1963 of $.35 equalling $2.55 today (adjusted for inflation), compared to the "average" toll rate currently of $2.65.
Early indications show that 81 percent of tolls trips were made by Good to Go account holders and there were 378,000 account holders by September 2012.
Peak traffic is expected (and tolls rise accordingly) on the SR 520 Bridge between 7-9 am and 3-6 pm.
Stone explains the two primary payment systems for tolling on the SR 520 Bridge: "Good to Go" and "Pay by Mail". Stone says the Good to Go program is working well, but Pay by Mail is generating more reporting in the press because residents aren't immediately paying bills. State vehicle registration for vehicles can be suspended for non-payment.
Cero asks another question about non-labelled billing envelopes. Stone says the current envelopes has the correct marking on them.
Councilman Mike Cero is asking questions about whether the purpose is of the tolling is to raise money or to manage "through-put" or traffic management performance. Stone says the answer is both.
"We knew the question wasn't if we put the tolling on the 520 Bridge, but how," said Stone.
Stone cuts through the funding discussion and addresses the relevant point to Mercer Island — where the state will get the additional money to pay for the SR 520 Bridge replacement:
"The key of the slide is the $1.4 billion, and how that will be funded," said Stone.
Speaking on AB 4783 SR520 Tolling Data, Stone tells the City Council that the unfunded need for the 520 Bridge project is down to $1.4 billion and the overall cost of the project is $4.128 billion, a decline from earlier in the year from $4.6 billion.
Mayor Bassett calls the study session to order and WSDOT Toll Division Director Craig J. Stone is introduced by Mercer Island City Manager Rich Conrad.