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07/26/2011 - Regular - MinutesCity of Port Orchard Council Meeting Minutes Regular Meeting of July 26, 2011 1. CALLTOORDERANDROLLCALL Mayor Lary Coppola called the meeting to order at 7=00 p.m. Mayor Pro-Tern John Clauson and Councilmembers Fred Chang, Jeny Childs, Jim Colebank, Fred Olin, Rob Putaansuu and Carolyn Powers were present and constituted a quorum. City Clerk Kirkpatrick, Public Works Director Dorsey, Treasurer Martin, Office Assistant Dennison, and City Attorney Jacoby were also present. A. Pledge of Allegiance Art Michelson led the audience and Council in the Pledge of Allegiance. 2. CITIZENS COMMENT In response to Patrick Lucas, City Clerk Kirkpatrick explained that the current minutes are done in a summarization style which is contrary to Roberts Rules, which states minutes should be action only; that the Council has not indicated the meetings should be read aloud prior to adoption and that Roberts Rules do allow for the Council to make that rule; and the Council has been vety good about making corrections to the minutes. In response to Bev Yelverton, Pmt Orchard Pawn Shop, Mayor Coppola stated he periodically visits each of the duwntown business, and would make the time to stop by her business on his next walk through of downtown. 3· APPROVALOFAGENDA The following items were moved to the end of Business items: • Adoption of Resolution No. 018-11, Authorizing the Mayor Pro Tern to Execute the Possession and Use Agreement No. 063-11, with Lawrence and Dolores Coppola regarding 321 Tremont Street; • Adoption of Resolution No. 019-11, Authorizing the Mayor Pro Tern to Execute the Commercial Displacee Lease No. 064-11, with Lawrence and Dolores Coppola regarding 321 Tremont Street; • Adoption of Resolution No. 020-11, Authorizing the Mayor Pro Tern to execute Interlocal Agreement No. 065-11 with the Kitsap County Prosecuting Attorney for Legal Services related to the Tremont Street Widening Project; and • Approval of Contract No. 066-11, Authorizing the Mayor Pro Tern to Execute the Memorandum of Agreement with Mae M. Rech relating to the Tremont Street Widening Project Minutes of July 26, 2011 Page 2 of1o Councilmember Colebank MOVED and Councilmember Childs seconded the motion approving the Agenda as amended. Upon vote, the motion passed with six affirmative votes and one dissenting vote. Councilmember Olin cast the dissenting vote. 4.APPROVALOFCONSENTAGENDA A. Approval of Claim Warrants Nos. 55931 through 55994 in the amount of $139,690.06 B. Approval of Public Event Application: Celebrate Life 5K Councilmember Putaansuu MOVED and Councilmember Chang seconded the motion approving the Consent Agenda. Upon vote, the motion passed unanimously. 5· PRESENTATION Public Works Director Dorsey provided a brief presentation on the Proposed Water Rate Increase of $12.00 per month. He stated this is the first of two public hearings on this matter. The following options are being proposed by the Utility Committee: • Option A Increase $12/Month in 2011 • Option B Increase $6/Month in 2011 and an additional $6/Month in 2012 • Option C Increase $6/Month in 2011 and an additional $6/Month in 2014 • Option D Increase $4/Month in 2011, and additional $4/Month in 2013 and an additional $4/Month in 2015 6. PUBLIC HEARING A. First Public Hearing ofthe Proposed 2011 Water Rate Increase Public Works Director Dorsey presented the staff repott, noting that in the PowerPoint presentation seen earlier this evening, and in response to a shottfall between water revenues and water operating expenses, along with the need to fund the City's Water System Capital Improvement Plan (CIP), the City of Port Orchard Utilities Committee is proposing to amend POMC 13.04.010 to include a water rate increase. Based upon the data provided within the Study and the discussions held at the May and June 2011 City Council Work Study Meetings, the Utility Committee is proposing a monthly rate increase of $12.00 with implementation options as follows: • Option A Increase $12/Month in 2011 • Option B Increase $6/Month in 2011 and an additional $6/Month in 2012 • Option C Increase $6/Month in 2011 and an additional $6/Month in 2014 • Option D Increase $4/Month in 2011, and additional $4/Month in 2013 and an additional $4/Month in 2015 Mayor Coppola opened the Public Hearing at 7:32 p.m. Minutes of July 26, 2011 Page 3 of 10 Dana Harmon questioned when the consumption rate would go into effect; and how many gallons of water would you have to use before you are charged. In response to Mr. Patrick Lucas's questions, Public Works Director Dorsey explained that the City flushes the water mains twice a year as required by the State; and if residents experience dirty water to call right away to the Public Works Department. In response to Mr. Jerry Arnett's concerns, Public Works Director Dorsey noted the City has never had surface water withdrawals; the City of Bremetton's entire watershed is hundreds of acres; well No. 10 was drilled because the Department of Ecology would not let anymore wells to be drilled in the Blackjack Creek Watershed and the Health Depmtment required the City to have another well; and McCormick Woods residents pay for their water and they had built infrastructure, which they then donated to the City; and the water rate increase will be paid by those residents, as well as all residents of the City. Treasurer Martin clarified the City operates its water, sewer and stormwater utilities under the laws of the State of Washington; and those funds are set up as a proprietary fund, which mean they have to be operated as if they were a standalone business. They cannot loan or borrow from other funds for different responsibilities to the public. Bob Geiger inquired if there had been discussion by the Committee to fund system repairs through a Local Improvement District; and that it might be wise to defer the collection of the money to the future. Nicole Vaught voiced her appreciation to City staff in ttying to deal with dirty water in the Tremont area and questioned when the City would have a viable solution to the problem. Diane Huebert voiced her concerns regarding ditty water; and requested the City begin billing residents their utility invoices on a monthly basis. Evelyn Gunderson stated her water is very good and delicious. Gerry Harmon acknowledged that citizens have to pay for their services; and encouraged Staff and the Committee to determine how much a gallon of water costs and base the utility rate on that cost. Maurice Chevaleax voiced suppott of Option D, which he stated was fair; and requested water consumption use by commercial businesses be more transparent. Jeff Braden inquired if the City would receive a loan for the projects; and why residents were funding $10,000 oflow priority items as noted on the Capital Improvement Plan. Minutes of July 26, 2011 Page 4 of10 Deb Truell voiced her opposition to the water rate increase, noting the City should use the depreciation fund for some of the smaller projects; and inquired if there was a way to temporarily help those with the dirty water problem. Dana Harmon voiced her agreement that there should be a basic cost per gallon for all residential and commercial users. In response to Mr. Bob Showers, Public Works Director Dorsey explained that water and sewer is a combined utility while stormwater is its own; the City's reserve fund, which is the Capital Improvement Fund, is a fund used for larger projects; and projects are prioritized with what can be done with available funding. Cliff Macintosh voiced his opposition to a rate increase and monthly billing cycle . • Christine Saters voiced her support of a new Option E, which would be to begin billing like Puget Sound Energy that is based on per gallon usage fee; provide credit to low usage users; and improve water testing processes. Fred Brusco voiced his support of paying for improvements to the water system, but objected to paying a rate increase to cover administrative costs. Micalene Manyan voiced her support of Options C or D; encouraged the Council to provide assistance to fixed income citizens; and stated she understood the need for improvements due to infrastructure age -but was surprised to see how much the rates would go up. Michael Kerrigan voiced his concern with sediment in his dishwasher and water quality; and objected to raising rates as it would negatively impact seniors and those on a fixed income. Gil Michael voiced his appreciation to the Council for holding the public hearing, noting another hearing on this issue would be held on August 9, 2011; and voiced his suppott to find the cost per gallon and charging all rate payers the same rate based on per gallon consumption. There being no further testimony, Mayor Coppola closed the Public Hearing at 9:10p.m. At 9:17p.m. Mayor Coppola reconvened the meeting after a seven-minute recess. 7· BUSINESS ITEMS A. First Reading of Ordinance No. 011-11, Amending the 2011 Budget Minutes of July 26, 2011 Page 5 of 10 City Treasurer Martin presented the staff rep01t, noting the City Budget is written to capture revenue and expense over the fiscal year. During the first half of 2011 the City collected sales tax revenue slightly greater than projected, and Council approved spending priorities that exceed what was anticipated. The Budget Amendment Ordinance recognizes the following; an interfund loan from Cumulative Reserve for Municipal Facilities Fund 302 to the Arterial Street Fund 102 for up to $300,000 authorized in Resolution No. 012- u; Increased General Fund 001 sales tax collections of $74,000 to be used for hiring of an additional police officer authorized by Resolution No. 011-11; Additional appropriation from the Cumulative Reserve for Equipment Replacement Fund 303, $11,166 for a Utility Model Go-4 Interceptor II vehicle authorized on April 26, 2011; An additional $6,500 as requested by the Council Public Propetties Committee from General Fund 001 balance for recreation purposes fully funding new playground equipment at Central Park approved on June 28, 2011; An additional $13,400 for increased lobby contract cost, Contract No. 054-11 paid from increases in the General Fund 001 sales tax collection; and, $26,750 additional Community Events Fund 107 distribution from fund balance approved June 28, 2011. Councilmember Olin MOVED and Councilmember Powers seconded the motion to accept the first reading of Ordinance No. 011-11, Amending the 2011 Budget, and to direct staff to place Ordinance No. 011-11 on the August 9, 2011, Consent Agenda for second reading and final adoption. Upon vote, the motion passed unanimously. B. Approval of Contract No. 067-11, Authorizing the Mayor to Execute Agreement with BHC Consultants for the Marina Pump Station Pre-Design Services Public Works Director Dorsey presented the staff report noting that BHC Consultants, LLC was listed on the City's 2011 Professional Services Roster and was currently working on a number of sanitary sewer related projects for the City. As identified as critical infrastructure in needed up upgrades and/or repairs, the Marina Pump Station Pre-Design project was identified in the 2011 Budget. BHC Consultant, LLC has provided a proposal an amount not to exceed $49,650, for the completion of this project. Councilmember Childs MOVED and Councilmember Colebank seconded the motion to approve Contract No. 067-11, authorizing the Mayor to execute Agreement with BHC Consultants for the Marina Pump Station Pre-Design Services. Upon vote, the motion passed unanimously. C. Approval of Public Event Application: National Night Out City Clerk Kirkpatrick presented the staff rep01t, noting that Maureen Wheeler with the Port Orchard Police Department submitted an application for a National Night Out on Tuesday, August 2, 2011. This event would be located at the Port Orchard Marina, Minutes of July 26, 2011 Page 6 ofw Waterfront Gazebo Park off of Bay Street; and Officer Wheeler has secured permission from the Port of Bremetton to use the Waterfront Gazebo. City Departments, as well as the Fire Depattment, have reviewed the application and have submitted their recommendations and/or comments. Councilmember Powers MOVED and Councilmember Chang seconded the motion to approve the public event application for National Night Out. Upon vote, the motion passed unanimously. D. Approval of the July 12, 2011, Council Meeting Minutes Councilmember Colebank MOVED and Councilmember Clauson seconded the motion to approve the July 12, 2011, Council Meeting Minutes. Upon vote the motion passed with six affirmative votes and one abstention. Councilmember Putaansuu abstained. E. Adoption of Resolution No. 018-11, Authorizing the Mayor Pro Tern to Execute the Possession and Use Agreement No. 063-11, with Lawrence and Dolores Coppola regarding 321 Tremont Street Mayor Coppola and Councilmember Colebank recused themselves from the meeting for this item, each declaring a conflict of interest. City Attorney Jacoby presented the staff report, noting that the City of Pott Orchard is undertaking the Tremont Street Widening Project (the "Project") to widen Tremont Street to provide four continuous lanes between Pott Orchard Boulevard and SR 16; replace two existing signalized intersections with roundabouts; and construct curb, gutter, sidewalk and other improvements. In order to construct the Project, the City must acquire right-of-way along Tremont Street from cettain property owners. One of the larger acquisitions that the City is required to make involves the Coppola property located at 321 Tremont Street. The majority of this parcel is required for the roundabout that will replace the signalized intersection at Tremont and Pottety (the "Right-of-Way Property"). The City's right-of-way agent, Universal Field Services, hired an independent third party appraiser to appraise the Right-of-Way Property and determine its fair market value. The appraiser's conclusions were then subject to a second review appraiser's determination of value. Both appraisers determined the value of the Right-of-Way Property is $457,000. The Coppola's requested additional time to evaluate the total just compensation that they believe should be paid for the Right-of-Way propetty. However, in order to allow the City to take possession and use of the Right-of-Way Property so that the Project can stay on schedule, the City and the Coppola's have agreed to enter into this Agreement. Approval of this Agreement will result in the City paying the Coppola's the sum of $457,000 for the possession and use of the Right-of-Way Property. The parties will continue to negotiate the final total just compensation to be paid. Any additional payments to the Coppola's will be occur in the Minutes of July 26, 2011 Page7 of10 context of a condemnation lawsuit to be filed in Kitsap County Superior Court and will be subject to approval by a Superior Coutt judge. It was also contemplated in this Agreement that the Coppola's will lease back a pmtion of the building from the City. Councilmember Putaansuu MOVED and Councilmember Powers seconded the motion to approve Resolution No. 018-11, authorizing the Mayor Pro Tern to Execute the Possession and Use Agreement No. 063-11, with Lawrence and Dolores Coppola Regarding 321 Tremont Street. Upon vote the motion passed unanimously. Councilmember Colebank was recused. F. Adoption of Resolution No. 019-11, Authorizing the Mayor Pro Tern to Execute the Commercial Displacee Lease No. 064-11, with Lawrence and Dolores Coppola Regarding 321 Tremont Street. Mayor Coppola and Councilmember Colebank recused themselves from the meeting for this item, each declaring a conflict of interest. City Attorney Jacoby presented the staff report, noting that earlier this evening the Council approved a Possession and Use Agreement between the City and Lawrence and Dolores Coppola relating to a portion of the real property and improvements located at 321 Tremont Street (the "Right-of-Way Property"). During the period when the City is completing the acquisition of required right-of-way and securing funds for the construction of the Project, the City does not have an immediate need to possess and use the Right-of-Way Property. The Coppola's currently operate a business at the Right-of-Way Property and as part of the Possession and Use negotiations requested the opportunity to lease back a portion of the Right-of-Way Propetty for the same purpose. The City's right-of-way agent, Universal Field Services, has determined a fair rental value of $12 per square foot per year based on an independent third party appraiser's determination of fair market value and also considering the two year lease term and the City's right to terminate the lease upon 45 days written notice. The City Attorney has prepared a lease, which has been reviewed and approved by the Coppolas. If approved, the lease would be effective on the day the City takes possession of the Right-of-Way Property. Councilmember Childs MOVED and Councilmember Powers seconded the motion to approve Resolution No. 019-11, authorizing the Mayor Pro Tern to execute the Commercial Displacee Lease No. 064-11, with Lawrence and Dolores Coppola regarding 321 Tremont Street. Upon vote the motion passed with five consenting votes and one dissenting vote. Councilmember Chang cast the dissenting vote and Councilmember Colebank was J"ecused. G. Adoption of Resolution No. 020-11, Authorizing the Mayor Pro Tern to Execute lnterlocal Agreement No. 065-11, with the Kitsap County Prosecuting Attorney for Legal Services Related to the Tremont Street Widening Project Minutes of July 26, 2011 Page 8 of10 Mayor Coppola and Councilmember Colebank recused themselves from the meeting for this item, each declaring a conflict of interest. City Attorney Jacoby stated that this was intended to eliminate any actual or appearance of conflict of interest if he was to represent the City in what he expects to be a limited condemnation lawsuit with Kitsap Superior Court, and explained that the Kitsap County Commissioners approved of this Interlocal Agreement at their July 25, 2011, meeting. Councilrnernber Powers MOVED and Councilmember Putaansuu seconded the motion to approve Resolution No. 020-11, authorizing the Mayor Pro Tern to execute lnterlocal Agreement No. 065-11 with the Kitsap County Prosecuting Attorney for Legal Services related to the Tremont Street Widening Project. Upon vote the motion passed with six consenting votes. Councilmember Colebank was recused. H. Approval of Contract No. 066-11, Authorizing the Mayor Pro Tern to Execute the Memorandum of Agreement with Mae M. Rech, Relating to the Tremont Street Widening Project. Mayor Coppola and Councilmember Colebank recused themselves from the meeting for this item, each declaring a conflict of interest. City Attorney Jacoby presented the staff repott, noting that in order to construct the Tremont Street Widening Project, the City must acquire right-of-way and/or slope easements along Tremont Street from certain property owners, including Mae M. Rech, owner of property located at 188 Tremont. Ms. Mae Rech is the mother and legal guardian of Audrey Rech, a legally incapacitated adult who suffers from medical conditions which her doctor believes may be negatively impacted by the construction work associated ·with the Tremont Widening project. This agreement will help to mitigate the impact of the construction for certain improvements to the home which will reduce dust, vibrations, noise, etc. Further, City Attorney Jacoby advised that the documents relating to the Tremont Street Widening and 321 Tremont Street and which had been approved this evening will be available to the public once they have been executed by all patties. Councilrnernber Putaansuu MOVED and Councilrnernber Chang seconded the motion to approve Resolution No. 020-11, authorizing the Mayor Pro Tern to execute the Memorandum of Agreement with Mae M. Rech relating to the Tremont Street Widening Project. Upon vote the motion passed with six consenting votes. Councilmember Colebank was recused. At 9:55p.m. Mayor Coppola assumed the gavel. Minutes of July 26, 2011 Page 9 of10 Councilmember Powers MOVED and Councilmember Childs seconded the motion to extend the meeting by 15 minutes. Upon vote the motion passed with four affirmative votes and two dissenting votes. CouncilmembeJ•s Putaansuu and Chang cast the two dissenting votes. Councilmember Colebank was recused. 8. COMMITIEE REPORTS Jerry Childs reported that the Economic Development Tourism will be meeting Wednesday, August 10, 2011. John Clauson reported that the Bay Street Merchants voiced concerns at their monthly meeting regarding parking signs on Bay Street, which stated parking limitations are until S:oo p.m. and suggested the City look into having the signs reflect when parking is actually being enforced. 9· MAYOR'S REPORT The Mayor Coppola reported on the following: • Met with Lobbyist and City Clerk regarding the 2012 legislative agenda; • Attended the Chamber luncheon where the speaker was James Donaldson, former Seattle Supersonic; • Attended the Executive Director finalist interviews for the Kitsap Economic Development Alliance; • Met with Karen Rogers of Exceltech regarding possible new location of parking garage; • Met with a candidate for the City Council and answered questions about how the City operates; • Met with Attorney General Rob McKenna; • Met with a local business/property owner regarding a lease agreement to start a new business in a landmark location; • Met with department heads regarding their 2011 budget request; • Met with the principals hoping to organize a new pro business organization; • Met with people regarding the new marine industry cluster; • Attended the Kitsap Transit board meeting; • Met with parties concerning the Dekalb Pier with a possibility of a public/private partnership; • Attended a meet and greet for Bruce Titus at the Lighthouse Restaurant; • Attended the Chamber After Hours; and • Met with people regarding the Bethel Avenue Annexation. 10. REPORT OF DEPARTMENT DIRECfORS Minutes of July 26, 2011 Page 10 of 10 Public Works Dir ectory Dors ey st at ed that with t onight's actions, Tremont Widening is at 94 percent right-of-way acquired; the parking lot design is co mpl et e a nd the public works staff would b e d ealing with the physical work in August; the Pottery Force Main project is moving ahead; and at the August 9, 2011, City Council meeting, a contract regarding the Prospect Alley Seattle Slide repair co me before Council. Treasurer All an Mmtin reminded the Mayo r and Councilmember Clauson that they would b e meeting with the State Auditor's Office on Friday, July 29, 2011 , at 8:oo a.m. 11. CITIZENS COMMENTS There were no citizen comments. 12. ADJOURNMENT M a~ r Coppol a adjourned the meeting.