Council MIN 11-09-2016 SpecialCITY OF
.� Federal Way
CITY COUNCIL
SPECIAL MEETING MINUTES
Council Chambers - City Hall
November 9, 2016 — 5:00 p.m.
1. CALL MEETING TO ORDER
Mayor Ferrell called the Special Meeting to order at 5:31 p.m.
City officials in attendance: Mayor Jim Ferrell, Deputy Mayor Jeanne Burbidge, Councilmember Lydia
Assefa- Dawson, Councilmember Kelly Maloney, Councilmember Susan Honda, Councilmember
Koppang, Councilmember Martin Moore, and Councilmember Dini Duclos.
City staff in attendance: Chief of Staff Brian Wilson, Acting City Attorney Ryan Call, and City Clerk
Stephanie Courtney.
2. PLEDGE OF ALLEGIANCE
Mayor Ferrell led the flag salute.
3. CITIZEN COMMENT
Ron Nowicki, Boardmember of Lakehaven Utility District, spoke as a private citizen (not on behalf of
the board) to urge the Council to not pursue the utility tax option. He highlighted the benefits of the
negotiated contract.
Councilmembers asked clarifying questions regarding figures presented and thanked Mr. Nowicki for
meeting individually with members of the Council, and for attending the this special meeting.
4. STUDY SESSION: 2017 -2018 BIENNIAL BUDGET /2017 PROPERTY TAX RATE
Finance Director Ade Ariwoola gave a staff report to Council regarding Funding Options for the 2017-
2018 Biennial Budget. He noted the Mayor's Proposal included COPS Grant, Business License Fee
Increase, and Adjusted Utility Tax for the total of $1.36M in 2017 and $1.81M in 2018. These
revenues would cover new Police Officers; Equipment Reserves; and Guild Contract with a remaining
$0.22M fund balance (carryover).
Mr. Ariwoola reported on current support both from general funds and in -kind support (use of facility,
storage rental, and other maintenance) to the Historical Society in 2015/2016; and addressed
questions regarding Lodging Tax funding and new restrictions.
He also noted with the passage of ST3, Sound Transit will be hiring additional staff and potentially
pulling from our existing well - qualified employee base. The city will need to make salaries competitive
in this marketplace in order to retain good employees. To accomplish this, he suggested $0.30M in
2017 and $0.31M in 2018 for salary adjustments.
Federal Way City Council Special Minutes Page 1 of 3
November 9, 2016
Mr. Ariwoola reminded Council of property tax levels and how we compare to communities in our
area. He highlighted the city's assessed amount in comparison to the levied amount; and also showed
neighboring cities for reference.
He presented the following options for sustainable funding and explained each item in detail,
including: Transportation Benefit District (TBD) ($1.25M); Implement a B & 0 Tax ; Increase Business
Registration Fees ($0.36M); Apply Equal Application of Utility Tax ($1.00M); Increase Permit Fees;
Implement an Admission Tax ($0.40M)
He also summarized the total long -term expenditures including: Nine (9) Officers ($1.80M) which is
dependent on utility tax or franchise fees increase; COPS Grant (60% for 3 years) and /or other
sources of revenue. Additional expenditures include: Equipment ($0.84M); Guild ($0.34M); Unfunded
Positions ($0.36M); and Job /Salary Market Adjustments ($0.30M).
• Council Discussion /Deliberations
Councilmembers thanked Mr. Ariwoola for his presentation and asked him clarifying questions
regarding the information presented. Councilmembers specifically asked if there have been any
feedback or discussions from the Chamber regarding business impacts with the suggested increases.
Discussion also centered on information not currently tracked in the business license system for
implementation of a B & 0 tax; additional FTE's would need to be added in the Finance Department;
and there was not support for a B & 0 tax.
Council debated the Admissions Tax and discussed a straight 5% versus a 5% with a $.60 per ticket
cap. When asked if residents could be exempt from the tax, Acting City Attorney Ryan Call noted
businesses may give discounts, however a tax would apply to all.
Economic Development Director Tim Johnson answered questions regarding the Economic
Development budget and the Small Business Development Center (SBDC), a national program run by
the State and Highline College which provides technical assistance to small businesses.
At 7:05 p.m. Councilmember Moore announced needed to leave the meeting due to work
obligations; Mayor Ferrell excused his absence for the remainder of the meeting.
Council continued deliberations and discussed the current franchise agreement with Lakehaven Utility
District and the potential of implementing a Utility Tax. Mr. Call reaffirmed if the Council took action to
impose a tax, it would cancel the franchise fee. In response to further questions, Mr. Call also noted it
is not clear what action the Utility District might take or the final outcome if challenged in court. Chief
of Staff Brian Wilson noted both parties worked on the current franchise agreement with estimation of
costs and revenues; he noted there was a discussion for preserving the right to apply a utility tax in
the future.
Council discussed additional ideas of new revenue which had not been discussed previously. They
discussed charging a minimal fee to non - residents for large festivals and events which are currently
fully- funded by the city and sponsorships, such as Red, White and Blues Festival; Movies in the Park;
and Summer Concert Series. However, it was suggested charging for community events may have
unintended consequences and jeopardize the city's recreational immunity. Council also discussed
French Lake Dog Park and the interest by Lakehaven to purchase the land over an extended
timeframe. Councilmember Maloney noted this would give the city revenue right now and allow time to
relocate the dog park.
At 7:28 p.m. Mayor Ferrell announced Council would be taking a brief recess. He reconvened
the meeting at 7:41 p.m.
Federal Way City Council Special Minutes Page 2 of 3
November 9, 2016
Council gave overall feedback on the ideas discussed this evening. Finance Director Ade Ariwoola
noted he will work with the feedback and provide additional options for the Council to select to move
forward at the next regular meeting. Mayor Ferrell thanked Council for the great ideas and productive
discussion.
5. ADJOURNMENT
There being nothing further on the agenda; Mayor Ferrell adjourned the Special Meeting at 8:07 p.m.
Attest:
S a ie Courtney
City Clerk
Approved by Council: 1.2--10(p (2,01(p
Federal Way City Council Special Minutes Page 3 of 3
November 9, 2016