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10/16/2012 - Work Study - MinutesCity of Port Orchard Council Meeting Minutes Work Study Session of October 16, 2012 7:00 p.m. Call to Order Mayor Matthes called the meeting to order at 7:00p.m. Councilmembers John Clauson, Fred Chang, Carolyn Powers, Rob Putaansuu, Cindy Lucarelli, and Jim Colebank were present. Public Works Director Dorsey, City Treasurer Martin, City Clerk Rinearson, Deputy City Clerk Fernandez, and City Attorney Jacoby were also present. Mayor Pro-Tem Jerry Childs was absent. 1. Update: Mayor's Report The Mayor provided his quarterly report, which highlighted many of the non-profits in the City of Port Orchard. The report is available online. He also gave a quick summary of his second Town Hall Meeting. A formal summary of the meeting will be available on the website soon. Councilmember Powers thanked the Mayor for his report on the non-profits and what they do. Council Direction: None. 2. Discussion: 2013 Budget Councilmember Clauson, Chair of the Finance Committee, discussed the Finance Committee's meeting held the previous night. The following items are issues raised regarding the draft Budget: • Transportation Impact Fee Study was not funded for $46,ooo. • Intersection improvement in McCormick was not funded for $195,000 • Design money for two major contributors to the step system, Sidney Elementary and the Clubhouse in McCormick Woods, was moved into the supplemental. • Waterfront Plan Committee funds were not in the budget. • Police vehicle repayment was removed. • Reduction of $3,900 for Chimes & Lights. • Set aside for a possible KCCHA bailout not needed, the money could be put back in the budget. • The Budget allocates money to the reserve, but does not set aside funding from Bethel annexation revenues for road improvements. City Treasurer Martin provided a review of the 2013 Budget highlights: • Outsourcing of community service to Kitsap Community Resources • Phase I of McCormick Village Park • Bay Street Pedestrian Path and DeKalb Pier • Current Expense Unrestricted Reserve Fund will be funded $213,000, keeping in line with five percent of General Fund operating • Stabilization arrangement is funded at $78,ooo • Storm drainage continues to be built up according to Council direction • $48,ooo payment made to the equipment fund for the freightliner snowplow • The KCCHA set aside in the amount of $2o,ooo is available. October 16, 2012, Work Study Session Minutes Page 2 of6 • Recreation fund from the State's Admissions Tax has another $6o,ooo in revenue for next year, creating a $237,500 balance • City Hall reserve is $33,610 • Parks money set aside is $83,966 and can be identified for various uses • PERS increased by $83,085 and that does not go into effect until July 1, 2013 • Liquor Excise Tax is reduced by $40,000 due to the initiative process • CenCom increased their fees by $17,000 based on population • Final ILA payment to the County is required, setting aside $63,425 for the final payment of $190,922 • TDR grant reaches closure at the end of the year. This will affect the planning department with a reduction of 1.0 FTE (two part-time staff). • To get the Budget to balance the following items were removed or reduced: McCormick Woods police substation and roundabout, removed; KADA, removed; police vehicle repayment, removed; and KEDA, reduced. City Treasurer Martin said the Budget is balanced and the Department Heads did a good job on identifying our true expenses and revenues. Tuesday, October 23, 2012, will be a Public Hearing to talk about revenues and to set the levy rate, explaining the lower assessed property values has taken a toll on the City. In response to Councilmember Powers, City Treasurer Martin said the parks impact fee is captured at $9,700 for next year; and $6,100 has been collected to date. In response to Councilmember Powers, Councilmember Clauson said the Bay Street Pedestrian Path is one goal funded in the budget, and the committee has a concern about money not being there for the waterfront plan. Sidewalks and streets does not have as much funds in there like this past year, because Real Estate Excise Tax funds were used. In response to Councilmember Chang, Councilmember Clauson said that utility taxes, such as cable fees, go into the general fund and in order to fund the foot ferry service in the summer, it will have to come from something else. In response to Councilmember Powers, City Treasurer Martin said the Bethel annexation revenues are captured in the report, they are not separated out. Council Direction: The Finance Committee will meet with Department Heads on November 2, 2012, to review the budget. 3· Discussion: LTAC Recommendations of 2013 HoteljMotel Fund Distribution Councilmember Chang recapped that the Lodging Tax Advisory Committee met four times, read through and discussed the applications, and the recommendations are before the Council. They weighed a lot of pros and cons, which have been captured in the minutes. The $77,000 the City receives through the hotel-motel tax is equivalent to the amount the City gets in sales tax from lodging. Councilmember Chang feels the money in the hotel-motel should be more protected to go towards tourism instead of operations. Councilmember Chang suggested the Council accept the committee's recommendations. October 16, 2012, Work Study Session Minutes Page 3 of6 Councilmember Lucarelli said we looked at the recommendations, and felt there are some huge diversions in what was historically allocated. Some groups would lose quite a bit from what they have historically been given. She also wants to establish a new way to handle how the Council will vote on the disbursements to remove any conflicts of interest. Councilmember Chang said that there are many ways the distribution could be made, either by going off of historical averages, or give an equal percentage to every applicants, but the committee considered each application's pros and cons and based their recommendation on the what they felt would bring the most heads in beds. He is open to hearing suggestions. City Attorney Jacoby said the goal is to get consensus on funding the projects to be included in the budget adoption. The Council could go through the list from the LTAC recommendation and see if there is common ground on any of the recommended allocations. If there is a conflict of interest for an individual on a certain application, then the councilmember will not vote. City Attorney Jacoby feels the Festival of Chimes & Lights is different from the other organizations, because it is a policy decision whether the City wants to fund Festival of Chimes & Lights, and if the Chimes & Lights Committee has a conflict, then the whole Council does, and it could never be funded. There is no conflict for the Council to collectively decide to use a portion of the funds for Chimes & Lights or Economic Development/Tourism. Maybe it is bad policy, but that is why we have elections. In regards to the legislative clause that will sunset, City Attorney Jacoby feels the City needs to make sure that agreements for 2013 have a clear provision that says there is a potential that there will not be funding after June 2013, and funding will not be able to be reimbursed relating to operations, it will only be limited to promotion of tourism. Mayor Matthes asked the Council to approve the recommendations provided by the Lodging Tax Advisory Committee. These non-profit groups really set the tone for Port Orchard. This is the only Committee that has been micromanaged. They have done their job with due diligence. A couple of Councilmembers had expressed this is too much debate over such a small amount of money; and it's probably due to the micromanaging of the Committee. Councilmember Lucarelli said she lost a bit of confidence in the Lodging Tax Advisory Committee when they approved applications for the surplus funds when the applicants were not eligible for funding. Given the current budget the City is working with, the Police have to deal with just about every event. There is no funding for police overtime. That line item helps every event. This recommendation is a huge change. She does not feel she can accept every recommendation and feels a few need to be adjusted. Councilmember Chang values the volunteers' time, but he also reminds them their decisions can be changed by the Council. The Council has adjusted the recommendations in the past, but not to the degree as was recommended by the Economic Development/Tourism Committee last month. He hopes that Councilmember Lucarelli is not discounting every volunteer on the Lodging Tax Advisory Committee because of her perception of a mistake they may have made. Councilmember Colebank says the Council is not a rubber stamp. He is willing to look at each recommendation and get a consensus on each one. October 16, 2012, Work Study Session Minutes Page 4of6 Councilmember Clauson supports City Attorney Jacoby's recommendation to review each recommendation. City Attorney Jacoby said that when formal action is taken at a Council Meeting, he recommends voting on each application in a form of a motion, instead of rolling them all into one resolution. There is no statutory requirement to adopt a resolution; rather it has been this City's past practice. Councilmember Powers asked what their decisions would be based on tonight. She questioned if everyone read the application packets and if the Council is setting aside what the Lodging Tax Advisory Committee has said. The Council needs some rationale other than the figures in front of them. It makes the Council do the same job the Lodging Tax Advisory Committee did. If Councilmembers have not read the applications, how can they decide what number is correct. Other than using the historic chart provided by the Economic Development/Tourism committee, the Council should know what the applicants requested and how they were going to spend the money. Who is running the Lodging Tax Advisory Committee? The City Attorney? The Council? Councilmember Powers said looking at the recommendation of the Economic Development/Tourism Committee and looking at the historical data, there could be circumstances under which one year would have warranted a different among based on different activities. The Council does not have the history of what was applied for in previous years. The swing in some of the requests is dramatic, because sometimes there are special events. Councilmember Lucarelli said she was looking for a process that would take care of the concerns regarding conflict of interest and asked the City Attorney for advice. Councilmember Powers said there has always been a process for many years, but this year the Economic Development Committee says they know better than the LTAC committee. Councilmember Lucarelli said they are not starting with the Economic Development/Tourism Committee recommendations but with the Lodging Tax Advisory Committee recommendations. She said the Economic Development/Tourism Committee withdrew that recommendation so as to not have a conflict. Councilmember Powers said if we have a legally established Lodging Tax Advisory Committee and they come forward with their recommendations, she does not feel the Council has to take all of the recommendations, and they have not always been a rubber stamp. But she is still upset that the Economic Development/Tourism Committee came forward with a wholesale change to the recommendation and she is not going to buy off on that. She is for the Lodging Tax Advisory Committee recommendations. And maybe a better process can be designed for next year. Councilmember Lucarelli said Councilmember Powers is just one voice and she still wants the option to step down on matters that would cause a conflict of interest, but vote on the others. She wants to be very clear that she is not voting on something that she has a part on. It separates it out, and makes it very clear. Councilmember Putaansuu said he believes there is consensus to move forward with the City Attorney's recommendation of going line-by-line to determine which organization, and their amount, needs to be further discussed. October 16, 2012, Work Study Session Minutes Page 5 of6 The City Attorney asked the following question for each application: "Does there need to be further discussion regarding Lodging Tax Advisory Committee's recommendation for [Applicant]?" • Bremerton Historic Ships -no hands raised; majority agrees discussion is no longer needed. ( Councilmember Clauson recused himself from the vote.) • Cedar Cove Days -one hand raised; majority agrees discussion is no longer needed. (Councilmember Lucarelli recused herself from the vote.) • Economic Development/Tourism Committee -two hands raised; majority agrees discussion is no longer needed. • Festival of Chimes & Lights -four hands raised; majority agrees this needs further discussion. • Sunday Foot Ferry Service -no hands raised; majority agrees discussion is no longer needed. (Councilmember Clauson recused himself from the vote.) • PO Police Overtime-four hands raised; majority agrees this needs further discussion. • Fathoms of Fun -no hands raised; majority agrees discussion is no longer needed. • Concerts by the Bay -no hands raised; majority agrees discussion is no longer needed. • KPVCB -three hands raised; kept on the list for further discussion. • Boater Bags -one hand raised; majority agrees discussion is no longer needed. • POB Kitsap Harbor Festival-Councilmember Powers said the Port was no longer doing the Harbor Festival any longer. City Clerk Rinearson said she believes it is being transferred to another non-profit organization. She will look into the matter. A majority agrees this needs further discussion. • POBSA-two hands raised; majority agrees discussion is no longer needed. • PO Chamber -two hands raised; majority agrees discussion is no longer needed. • Saints Car Club -no hands raised; majority agrees discussion is no longer needed. • Sidney Museum and Arts -no hands raised; majority agrees discussion is no longer needed. The City Attorney reminded the Council this is not binding and next month's discussion may impact other allocations. Council Direction: Council directed staff to put Lodging Tax Advisory Committee Recommendation on the November Work Study to further discuss Festival of Chimes & Lights, PO Police Overtime, KPVCB, and Kitsap Harbor Festival. City Clerk Rinearson will provide further information on who will be running the Kitsap Harbor Festival. 4· Discussion: LTAC Procedures This item was discussed in Agenda Item No. 3. 5· Discussion: Social Media City Clerk Rinearson gave a presentation on social media, highlighting the following things: • What different medias exist and their purpose • Why the city should use social media • Opportunities of social media • How social media will be used October 16, 2012, Work Study Session Minutes Page 6 of 6 • Other local jurisdictions using social media • Setting a policy Councilmember Chang recommended not deleting posts on the Facebook site, but to let them archive on the site. In response to Councilmember Clauson, City Clerk Rinearson said the recommendations from the State have changed in regards to their position on retention of social media sites . Now they feel if the social media site is repurposing information on the City's website, it does not need to be retained. In response to Councilmember Lucarelli, City Clerk Rinearson said she would like to create a policy set by Council that will outline who will be posting to social media and how it is maintained. In response to Councilmember Lucarelli, City Attorney Jacoby said he could not see any greater or lesser liability posting items on Face book that is already posted on the City websit~. Council Direction: Council directed City Clerk Rinearson to develop a draft social media policy and present it to them at a future Work Study Session. At 9:05 p.m. Council moved into Executive Session for ten minutes for the purpose of discussing job performance of a public employee per RCW 42.30.11o(g). At 9:15 Mayor Matthes reconvened Council back into regular session. 6. Discussion City Attorney Contract Mayor Matthes said he presented a contract offer to Greg Jacoby of McGavick Graves. It was to extend his contract for one more year, with no change to the hourly rate or to the cost of living. Mayor Matthes said he is happy with legal services, but there are a couple of things that they are working through right now, but not yet satisfactorily resolved. City Attorney Jacoby responded by stating the firm has not received a rate increase since 2009 and although he understands the financial concerns the City, he wants a fair hourly rate. He is seeking an increase to the hourly rate, which is significantly below market. If the City wants to figure out how to use less hours, he will work the Mayor to reduce the bill. Councilmember Clauson suggested the Finance Committee and the Mayor work with McGavick Graves, Greg Jacoby, on the contract to accurately capture the costs in the 2013 budget. The Committee will be meeting on November 2, 2012 and requested Mr. Jacoby meet with City Treasurer Martin for the details. At 9:27p.m. the meeting was adjourned.