Council MIN 01-31-2009 - Retreat
,~ Federal Way
City Council Annual Retreat
Federal Way Community Center
January 31st, 2009
MEETING MINUTES
CALL TO ORDER
The meeting was called to order at 9.00 a.m.
Councilmember present:
Mayor Dovey, Deputy Mayor Faison. Councilmembers Ferrell, Kochmar, Burbidge, Duclos
and Park.
Staff present:
City Manager, Neal Beets; Assistant City Manger, Cary Roe; Assistant City Manager Bryant
Enge; Communications and Government Affairs Manager Linda Farmer; Human Resources
Director, Mary McDougal; Finance Director, Tho Kra,us; Public Works Director, Marwan
Salloum; City Attorney, Pat Richardson; Deputy Director of Public Works, Ken Miller;
Economic Development Director, Patrick Doherty; Information Services Director, Mehdi
Sadri; Director of Community Development, Greg Fewins; Interim Parks Director, Steve
Ikerd; Police Chief, Brian Wilson; Deputy Police Chief Andy Hwang; and ICMAFellow, Scott
Pingel.
Retreat Facilitator, Dr. Michael Pendleton, reviewed the ground rules for the meeting and the
items scheduled for discussion.
DISCUSSION ITEMS
The Council discussed the following items;
1. 2008 Accomplishments
2. Performing Arts Center
The meeting recessed from 10:25 a.m. to 10:39 a.m. Once reconvened they continued
discussing the Performing Arts Center
3 Council Protocols and Process:
. -Time management in meetings (sharing air-time in meetings)
. -Roberts Rules
. -Courtesy
. -E-mail use
. -No surprise rule
. -Committee appointment process
. -New initiatives
. -Staff presentations
. -Council vs. Staff setting direction
. -Community outreach strategies
. -Other
The meeting recessed from 12:05 p.m. to 12:47 p.m. for lunch.
4. Economic Development and Downtown
. Downtown Property
. Other
5. Budget Discussions
The meeting recessed from 2:00 p.m. to 2:15 p.m.
6. New Council Goals:
. -Writing of No More Than 2 Goals Per Participant
. -Round Robin Long List of 14 Possible Goals
. -Clarification and Consolidation Discussion
. -Pair Comparison Ranking To Identify Top 4 Goals
ADJOURN
With no additional discussion items, the meeting adjourned at 3:45 p.m.
Approved by Council: March 3, 2009
Along with Retreat Summary Report prepared by Pendleton Consulting LLC
PENDLETON CONSULTING, L.L.c.
MICHAEL R. PENDLETON Ph.D.
34225 BRIDGEVIEW DR. N.E.
KINGSTON, WASHINGTON 98346
Phone (360) 638-1179
Fax (360) 638-1779
Cell (360) 271-0359
e-mail: mpendleton@telebyte.ctl.m
pendletonconsul tingllc@msn.com
www.pendleton-consulting.com
THE
FEDERALWAY CITY COUNCIL
ANNUAL RETREAT
January 31st,
2009
Summary Report
Introduction
The Federal Way City Council held their annual retreat on January 31st,
2009 at the Federal Way Community Center in Federal Way, Washington. As
2009 begins the City of Federal Way like most communities across America is
providing services to its citizens in the context of serious economic challenges.
Sound fiscal policies and a diligent approach to fund management has enabled
the city to avoid many of the problems currently facing other cities. One reason
for this success has been a forward-looking approach to policy leadership by the
City Council. The annual retreat serves as one tool for the City Council to plan
for future demands and opportunities.
The 2009 City Council retreat was based upon pre-treat interviews, to
establish the following agenda to the discussions during the retreat:
1. 2008 Accomplishments
2. The Performing Arts Center
3. Council Protocols and Process
4. Economic Development
5. Budget
6. Council Goals
The following report is a summary of the discussions and outcomes of the
retreat:
1
2008 Accomplishments
The first discussion module focused upon reviewing 2008 and identifying
the City accomplishments during that period. Thirty-one major accomplishments
were identified and are listed in Appendix Two in this report.
Performing Arts Center
The next discussion focused upon a performing arts center (PAC) in
Federal Way. For some time there has been an interest in the Federal Way
community in establishing a performing arts center. Community groups and
citizens have expressed an increasing desire for the city to move forward on this
project. While the City Council has been involved at the individual level in the
discussions and efforts to establish a performing arts center, and has approved as
a Council two legislative agendas seeking PAC funding from the state
legislature, there has yet to be a clear decision to implement a defined process to
come to a decision about a center in Federal Way.
Participants discussed numerous issues and themes that surround
constructing and operating a performing arts center. Participants discussed
several examples of PAC's in other communities and how they were configured,
their impact on the community, particularly the role a PAC can play in economic
development. Early in the discussion it was noted that there is a need in Federal
Way for a conference center as well as a PAC and it would be productive to
consider a combined facility otherwise known as a P AC-CC.
While most participants acknowledged the value of a P AC-CC, several
concerns were noted and discussed. The cost and scope of a P AC-CC was raised
and discussed. Various ways to fund such a center were noted and discussed
(See Appendix Four). There was a particular concern with the city's role in the
project particularly as it relates to both funding construction and the operation of
such a facility. Some participants were clear that they did not want the city to
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fund the center but to playa leading role on facilitating the process by which a
center is ultimately constructed through community partnerships.
Participants discussed the potential location of a P AC-CC. It was noted
that the downtown area seemed to be the most favorable location. The need for
downtown development, the impact on economic development and availability
of land was discussed. While it was also noted that other sites in the city might
be available, the majority of participants expressed their interest in locating the
P AC-CC somewhere in the downtown area.
As the discussion progressed it became clear that numerous questions
remained unanswered and that there was a need for additional information.
After a long discussion the participants agreed to the following:
Agreement One: The facility and operation model should include both a
Performing Arts Center and a Conference Center otherwise known as a joint
P AC-CC model.
Agreement Two: The P AC-CC should be located on a downtown site.
Agreement Three: There is a need for more data and information before
the city can fully commit to the construction of a P AC-CC. Such information
includes but is not limited to the role of the city, the costs-financing options,
location(s), operation and maintenance, and potential impact on economic
development.
Agreement Four: The staff will come back to the City Council with a
pre-development process that will reflect agreements one through three above
and will lead the City Council through a decision making process to determine
the what, where, and how of building a PAC-CC in Federal Way.
Council Protocols and Process
The participants next discussed a series of protocols and process used by
the Council to conduct Council business. This discussion module is a common
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area for most Council's to review during an annual retreat to sharpen their
approach to conducting business.
Meeting time management. Participants briefly discussed the importance
of sharing the" air time" during council meetings. It was noted that while the
Council is generally very good about sharing time, during hot issues there can be
a tendency to forget and to dominate discussion.
Roberts Rules. Participants affirmed that the meetings are and shall
continue to be governed by Roberts Rules of Order.
Courtesy. Participants all agreed that this Council is courteous to each
other and the public and feel that is important to stress courtesy as leaders in the
community.
E-mail. Participants discussed the use of e-mail in communicating with
each other and the public. While e-mail is an effective way to communicate
public officials must be aware of the importance following open public meetings
regulations. It was agreed that in general the Council is very good about their
use of e-mail. It was noted that it is important not to use the ureply to all"
function as it can result in deliberation of the full body and therefore fall under
the open public meetings act.
"No surprise agreement". Participants discussed the importance of giving
both each other and staff a "heads-up" on emerging issues as they are
encountered. Participants agreed to give staff a call, when possible, prior to
public meetings if Council Members intend to ask staff to either present and/ or
comment on questions/issues during the meeting.
Commission appointment process. Participants discussed the process the
Council uses to recruit and" appoint citizens to city boards and commissions. It
was noted that there is really little need for the Council to re-interview existing
commission members in advance of routine re-appointment to their existing
position on city commissions. It was also noted that at times there are no new
applicants for open commission positions and there is a need for the Mayor and
4
Council Committee Chair to go out to the community and recruit new
commission members. After a discussion the participants agreed to the
following:
Agreement Five: When there are new applicants for city commission
positions the existing Council interview and appointment process will be
followed.
Agreement Six: If there are open positions and no new applicants the
Mayor and Council Committee Chair are authorized to recruit new members.
The above existing process of interview and appointment will be utilized for
these new members.
Agreement Seven: The Council will not be required to interview those
members of existing city commissions prior to the standard re-appointment
process.
Staff Presentations. Participants next discussed the staff presentations
given at city-sponsored meetings. It was noted that generally the presentations
are very good but on occasion there could be a better use of power point and
bullet points to aid in the presentations. After a discussion the participants
agreed to the following:
Agreement Eight: Staff will regularly use media technology to aid in
presentations such as power points, summary sheets, etc.
Agreement Nine: Council members will make every effort to contact
staff in advance of presentations, meetings etc. to advise of questions and/or
points that Council member expect to be addressed during meetings.
Staff vs. Council setting direction. Participants discussed the role of
Council and Staff in setting the direction for the city. It was noted that at times it
appears that Staff and not Council is setting agenda's for meetings etc. It was
noted that there are times that staff see things that need to be addressed and/ or
are required to bring things to the Council because of law and or timing on
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projects etc. It was also noted that Council Members who chair committees must
review and approve all agenda's prior to the meeting. It is important for the staff
to check in with committee chairs and/ or Mayor prior to placing any item on
Council agendas.
Community outreach meetings. Participants next discussed the Mayors
past "town meetings". It was noted that these are important efforts but perhaps
they are scheduled to frequently and/ or could be better attended. The Mayor
noted that he has already planned to cut the meetings back to one per quarter.
The Mayor also stressed that any Council Member is invited to attend and
participate as well.
City neighborhoods. Participants next discussed the possibility and
merits of defining specific neighborhoods within the city. Such an approach
might help with emergency preparedness and other issues. After a discussion it
was noted that such an initiative might be a better as a future city goal (see
below).
City newsletter and communication. Participants next discussed the use
of the city newsletter and ways to communicate with citizens. It was noted that it
would be good to include in the newsletter the weekly "Fast Facts" that is
prepared by the City Manager. In addition it was noted that from time to time it
might be good for the City Manager to write an editorial for the newsletter.
Economic Development
The next major discussion module focused on economic development in
Federal Way.
Incubator approach to economic development. It was noted that
economic development has been an important issue for sometime. It was
suggested that while current efforts are good, there might be a need to adjust the
approach to include an "incubator" philosophy. Such an approach would
include a city-led approach to supporting the development of new ideas and
6
start-up support services for businesses. Such an effort could be coordinated with
other community partners such as the community college, banks and other
businesses in the city. The intent would be to encourage the development of new
ideas and innovations to include assistance with initial start-up demands. After a
discussion the participants agreed to the following:
Agreement Ten: Staff will schedule a Council study session on the
"incubator" approach to economic development in the city.
General Economic Development. Participants next discussed a wide
range of economic development topics. It was noted that there are a number of
vacant buildings downtown and that it might be important to understand if
these properties will be coming for sale. The importance of "pocket business
areas" throughout the city was discussed. It was also noted that it would be
important to recruit a public entity downtown that employs people in such areas
as utilities or schools. Finally it was noted that there is little green space or parks
downtown and that purchasing property for a green space area downtown
would contribute greatly to the nature and attractiveness of the downtown area.
Budget
The next discussion module focused on the city budget. Staff presented a
brief overview of key budget issues (See Appendix Five). It was noted that the
books on 2008 were not yet closed making projections into the future difficult. It
as noted that current preliminary data suggest the city revenue for 2008 will be
about six hundred fifty thousand less than projected. However it was quickly
noted that costs for 2008 are estimated to be about two million less than
projected, suggesting an estimated savings of about 1.35 million dollars.
Participants agreed that a conservative approach to budgeting combined with an
emphasis on efficiency has served the city well.
It was noted however, that the national economy is proving to decline in
alarming ways and that it may be a time before improvements in the larger
7
economy will occur. Participants agreed to continue to monitor expenditures and
revenues for 2009 and make adjustments as necessary. The importance of
creating a "soft landing" in 2011 and 2012 was noted along with a hope that and
negative impact on staff can be minimized. After a long discussion the
participants agreed to the following:
Agreement Eleven. The Council finance committee (FEDRAC) will
monitor city projects and the city budget and will report on a frequent basis to
the Council as a whole on the status of both revenues and expenditures to
facilitate immediate action should it be required.
Council Goal Setting
In the last major discussion section the City Council identified their top
goals for the future. The following process was used to set these initiatives:
1. Silent writing of two top initiatives
2. Round robin listing of initiatives
3. Round robin discussion and clarification of initiatives
4. Pair comparison voting methodology
Based upon this process the following top five goals were identified:
1. Expand economic development downtown using innovative
approaches.
2. Develop fiscal management methods to save money for the city.
3. Explore and develop a small business development center.
4. Implement an economic development project downtown by year-end.
5. Take the next steps in the pre-development process for a combined
performing arts center and conference center.
In addition to the above top five goals seven additional goals were identified. See
appendix three.
8
Appendix One
Retreat Participants
Mayor
Jack Dovey
Deputy Mayor
Eric Faison
Council Member
Jeanne Burbidge
Council Member
Dini Duclos
Council Member
Jim Ferrel
Council Member
Linda Kochmar
Council Member
Mike Park
City Manager
Neal Beets
Note: Numerous City Staff Attended In Support Of The Retreat Discussions
Facilitator
Michael Pendleton
9
Appendix Two
2008 Accomplishments
1. Adopted 2009 Budget to include adding $1 million to the existing $2.1
million rainy day fund
2. Completed and/ or started several public works projects
3. Participated in the regional jail process
4. Moved forward on the downtown development process
5. Participated in numerous regional committees
6. Participated in the Safe Cities program and in acquiring several police
officers pursuant to Proposition 1
7. Engaged in numerous human services collaborations
8. Participated in successful food drive
9. Managed the challenges of numerous snow storms to keep roads cleared
10. Emergency management generator and light system established
11. Hired several new key staff members
12. Continued to be responsive to the community
13. Established a "one stop" permitting center
14. Conducted an annual follow-up with stakeholders on permitting process
15. Was a leader in bringing light rail to Federal Way
16. Successfully lobbied federal and state leaders
17. Enhanced a monthly financial reporting system
18. Acquired state transportation funds to support public works projects
19. Community clean up through effective code enforcement
20. Public safety efforts resulting in a lowering crime rate
21. Conducted city center access studies
22. City Television videos won two awards
23. Established a cold weather voucher program
24. Downtown funds through LIFT
10
25. Appointed an new municipal judge
26. Established the Celebration Park maintenance building
27. Successful collaboration with Historical Society on building
28. Worked successfully with other jurisdictions (water, fire, etc.)
29. Participated in a National Citizen Survey
30. Completed performing arts center study
31. Mountain climb in Korea
11
Appendix Three
Other Goals Nominated In Order of Priority
· Establish a program to prevent youth violence and gangs
· Establish more downtown green space and parkes)
· Recruit a public entity employer for downtown
. Establish If green projects" with city to attract federal funds
· Develop a strategy to implement a neighborhood(s) program
· Establish an urban forestry and community garden(s) program
· Establish a homeless center to provide long term help to homeless
12
Appendix Four
PAC Retreat Handouts
P ACC Project Cost Estimates
& Funding Plan, 1/31/09
Neal Beets
5. PACC Project Total $35M-$55M
[Reasons for range:
. Whether land will be donated or must be paid for and, if paid for, then its
sales price.
. Uncertainty about number of parking spaces required, whether parking
structure is above-ground or below-ground, and whether parking costs.
will be shared with others and, if so, the cost split.
. Uncertainty about how inflation and the health of the economy will affect
construction costs.]
6. Key P ACC Construction Elements (dollars are
approximate):
1. Bricks and Mortar: -$20M-25M (depending on construction bids)
2. Parking Garage: -$10M (depending on number of spaces, whether above-
ground or below-ground, on construction bids, and on whether costs can
be shared)
3. Soft Costs: -$5M (depending on project scope and contractors selected)
4. Fixtures and Furnishings: -$5M (depending on project scope and F&F
selections)
5. Land: -$5M (depending on parcel size, location, and whether donated or
not)
6. Inflation and Other Contingencies: -$5M (depending on national
economy, and quality of design and construction work)
7. Project Funding Plan:
1. City: $15M-$20M.
. Beginning in 2011, $925K REET set aside per year that would support a
bond for $15M-$20M (depending on the lending climate at the time).
. Note: Estimating total REET collected in 2011 to be at least $3.2M, then
$925K would have no impact on other capital programs. (2007 actual
REETwas $4.8M; estimated REET for 2008 is $2.8M.)
2. State: $12M-$15M.
13
· Beginning in 2011, ~$825K per year in repurposed state taxes that are
currently supporting bonds for projects in Seattle that would be used
to support a bond for $12M-15M.
· Note: Depends on outcome of KC Financing Task Force, that Senator
Eide Co-Chairs, and on State Legislature approvaL
3. Grants: $5M-$7M.
. BF A, 4Culture, NEA
4. Private Contributions (individual and corporate): $2M
5. Naming Rights: $lM
6. LIFT: $OM-$10M
14
P ACC Operating Cost Estimates, Funding Plan, Economic Impact, and Sites,
1/31/09
Neal Beets
Estimated Operating Cost Shortfall: $250Kjyr. [Johnson estimate]
Plan Addressing Shortfall:
1. Private Entity Operates P ACC, especially in conjunction with a
Convention Center and Hotel, under City Council direction to operate as
close to balanced as possible given School District needs and other civic
requests that Council mayor may not want to approve to use the P ACC
for reduced rates.
2. Capital Endowment, funded by the City or the grassroots group, the
principal from which endowment is not touched and the annual earnings
from which are dedicated to cover any operating shortfalls.
3. Operating Grants: 4Culture, ArtsFund, foundations.
4. Repurpose Utility Tax dollars currently used for Capital. (Approx. $4M-
$6M per year in utility tax is used for Capital.)
8. P ACC + Conference Center Economic Impact [Johnson
estimates]
2. P ACC directly causes $4.3Mj yr in new spending, 60 new jobs, $l.4Mj yr
in new payroll earnings, and $391Kj yr in new sales taxes ($280Kj yr for
state, $74Kjyr for county, $37kjyr for city).
a. In addition, P ACC indirectly causes and induces an additional
$1.7Mjyr in new spending through re-spending of new direct
dollars as they work their way through the local economy.
3. When a Conference Center is factored in, then in addition to #1, the
Conference Center causes $10.lMjyr more in direct spending, 141 more
new jobs, $3.3Mjyr more in new payroll earnings, $921Kjyr more in new
sales taxes ($658Kjyr for state, $116Kjyr for county, and $86Kjyr for
city).
a.
In addition, the Conference Center indirectly causes and induces an
additional $3.9Mjyr more in new spending through re-spending of
new, direct dollars as they work their way through the local
economy.
5.
in no articular order
Not Downtown
1. Federal Way Village
Potential P ACC Sites
Downtown
1. Symphony Project (old AMC
Movie Theater site; City owned
but under contract
2. area around Hillside Plaza
3. area around To Foods
4. area around Paldo Plaza
5. area around the former Azteca
6. Truman Hi h School
2. Dumas Ba
3. Lakota MS
4. Federal Wa
5. Cit ark
HS
15
Appendix Five
Budget Handouts
Direction Staff Is Operating Under regarding the Expenditure of the $500K in
State Funding regarding Pre-Construction Costs for a P ACC
N eat Beets
Background: Under last year's 2008 Legislative Agenda, where a PAC was
identified as a City legislative priority, the Legislature made $500K available for
"pre-construction" work on a Federal Way PAC.
The question has arisen about how and when that money can or must be spent.
First, in the summer of 2008, the Council directed staff not to spend any of the
money until Council approved a PAC site. Since we don't have a Council-
approved PAC site, none of the money has been spent. We have not sought
engineering or architectural firms to perform pre-construction work because we
don't know the site they are to work on.
Second, we have received different advice and direction from CTED about the
expenditure of the $500,000. Here is the most recent and, I think, definitive
word.
Under the City's contract with CTED, the state agency through which such state
money is disbursed, we have until June 30,2011 to spend this money on pre-
construction work. Importantly, this assumes the State Legislature continues to
re-budget and re-appropriate such state grant money to CTED each year because,
technically, such state appropriations expire at the end of each state fiscal year
Gust as city council appropriations expire at the end of our fiscal year unless
renewed in the next budget).
Thus, if the Legislature were not to carry forward these CTED dollars (for the
first time in Washington history), then the $500,000 would go away on June 30,
2009. But, assuming the state Legislature re-appropriates the money in this
legislative session, then we have until June 30, 2010 to spend the money; and if
the money is not spent by June 30,2010, and if the State Legislature re-
appropriates this funding in 2010, then we have until June 30,2011 to spend the
funds. Unless it is revised, our contract with CTED says the $500,000 has to be
spent by June 30, 2011.
16
If the National Economy Worsens.....
Neal Beets
Economic Indicators We Follow
Volatile
Sales tax receipts
REET receipts
Contract bids
Labor costs - esp. wages, health care
Not as Volatile
Property tax receipts
Utility tax receipts
Publications we monitor
Bureau of Labor Statistics
Association of Washington Cities
Government Finance Officers Association
International City Management Association
Washington City Management Association
Budget Strategies To Address Financial Distress (subject to Council
direction, in approximate order of how I think of them)
Reduce, eliminate more program costs - on-going
More stringent than usual Carry-Forward process
Freeze hiring
Unpaid employee furloughs
Freeze or reduce pay (e.g., 32hrj 4day workweek and pay)
Freeze, reduce or eliminate Capital Projects that are supported by Utility Taxes
(approx. $4M-$6M per year)
Lay-off employees
Provide incentives for early retirement
Spend down $3.1M Rainy Day Fund
Spend down $l.3M CM Contingency
Spend down $6.6M Development Fund
Spend down $3M Strategic Reserves
Process To Modify City Budget Outside the Normal BienniumjMid-
Biennium Budget Process
. City Attorney Pat Richardson, CFO Bryant Enge, Finance
Director Tho Kraus: Council can modify the budget by
ordinance and resolution at any time, with appropriate public
notice.
Staff Check-Ins with City Council re Budget, Financial Distress Issues
Monthly Financial Report distributed to all Council members and FEDRAC
reviews and Council approves
Budget Carry-Forward Process
17
Council Retreat Process
Council Study Sessions
Council Approves/Disapproves Contract Awards
Council Approves/Disapproves Capital Project Design Progress
18