HomeMy WebLinkAbout11252002CITY OF PORT TOWNSEND
MINUTES OF THE SPECIAL SESSION OF NOVEMBER 25, 2002
The City Council of the City of Port Townsend met in special session this twenty-fifth
day of November, 2002, at 6:30 p.m. in the Port Townsend Council Chambers of City
Hall, Mayor Kees Kolff presiding.
ROLL CALL AND PLEDGE OF ALLEGIANCE
Councilmembers present at roll call were Freida Fenn, Kees Kolff, Geoff Masci,
Catharine Robinson, Michelle Sandoval, and A1 Youse. Joe Finnie and Geoff Masci
notified the Clerk they would not be present. Staff members present were City Manager
David Timmons, City Attorney John Watts, Finance Director Michael Legarsky, Public
Works Director Ken Clow, and City Clerk Pam Kolacy.
PUBLIC COMMENT
There was no general public comment.
PUGET SOUND ENERGY FRANCHISE
Mr. Watts gave an overview of the work to date on negotiations between the City and
Puget Sound Energy. He noted that the City has been operating on a series of extensions
of the franchise through December 31, 2000 and thereafter without any agreed upon
extensions. He stated it is in the best interest of the citizenry and the utility to have an
updated, binding franchise reinstated. The suggested term of the agreement is 10 years
from the date of the last franchise, therefore the franchise would run 8 more years, ending
in 2010. This is longer than the 4-6 years recommended by the committee but is a
comparably short term for a franchise agreement
Mr. Watts added that his work plan for next year includes production of a draft right of
way use ordinance.
The City Manager's recommendation is to adopt the agreement, following council
questions and clarifications. The adoption of the franchise agreement will allow an eight
year period in which the city may determine to explore alternative energy provisions.
Todd McGuire and Dana Roberts of the PSE Franchise Committee and Don McDaniel of
Puget Sound Energy were present to provide information and answer questions.
Mr. Sandoval noted that on page six, under "Service Quality" some blanks were not filled
in regarding average duration of outages, etc. Mr. McGuire stated he believes the
information was in the original report.
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Regarding the section on page 8 entitled "Pilot Project on Competition" Mr. McGuire
stated this has to do with municipalities having the ability to aggregate disparate loads
and then act as a separate agency for procurement purposes. He added this is one of the
least important facets of the recommendation due to the complexities involved.
He added the committee had attempted, as reflected in the table on page 2, to give
relative priority and monetary consideration to the many factors involved in the franchise
negotiation and agreement.
Ms. Fenn asked if PSE is selling generating capacity.
Mr. McDaniel answered that the company will have to vertically integrate, become
involved in conservation measures and either build, buy or partner on new generation.
He stated that PSE is probably better positioned than other utilities on the west coast to
get into the generation business due to its position as the lowest cost provider in the state.
Ms. Fenn asked if the company intends to divest itself. Mr. McDaniel noted that the
marketplace is very volatile but PSE is committed to retain and acquire new generation.
In answer to Ms. Sandoval's question about redundancy, Mr. McDaniel noted PSE is
under contract to build a new line into the county which will back up the existing
transmission. The entire region is working hard to get onto the same voltage, PSE has
upgraded the substation and recircuited the entire city; the last stage is to get a new line in
via contract with other working partners. The project is currently underway and should
be completed in 2004.
Ms. Sandoval stated that since work has been outsourced to Potelco, it has been more
difficult to work with them and there has been a huge jump in cost for installing
underground lines per linear foot.
Mr. McDaniel stated that moving to Potelco has caused a substantial drop in costs for
PSE with generally higher performance. There are actually more crews here than before
in spring and summer; crews can also move among counties as needed. He stated that
there was a transition period which started in the fall of 2001 but the system is now
established and is working well.
Regarding the upcoming Hood Canal Bridge closure, Mr. McDaniel stated the positive
aspect is that we know is coming and the company can prepare just as they would prepare
for a large weather event. More staff will be positioned here than would ordinarily be
and helicopters may be used if necessary in emergency situations.
Regarding consistent quality of service, Mr. McGuire stated that it is important to
develop cooperation now and to develop baselines and schedule regular meetings to
discuss concerns.
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Mr. Kolff asked why PSE is unable to report measures of reliability indices for the city as
well as for Jefferson County (p.6). Mr. McDaniel said he could commit to appear before
the council regularly to update the council on this issue.
Ms. Fenn asked if that could be formalized in the agreement. She also wants to compare
notes about street lighting which has become a concern in the city, both from individuals
and the Historic Preservation Committee.
Mr. McDaniel stated that the franchise simply gives PSE the right to maintain equipment
in the right of way and does not create an exclusive right to provide service. He stated
his willingness, however, to provide a letter of commitment which would cover some of
the issues raised.
Mr. McGuire added that the committee's recommendation is to create a list of items to be
tracked on a regular basis which would be the basis for regular dialogue and reporting by
PSE.
In regard to a reopener clause, Mr. Watts stated part of the difficulty is to get clear
indicators of what might trigger reopening the franchise. PSE did not consider reopener
clauses in its negotiating position and it is not generally found in franchise agreements.
The city is also in a position of not having options if we can't arrive at an agreement with
PSE. He added that these are some of the factors that influenced the approach of
providing for a relatively short eight year franchise term. Given the current issues
surrounding generation, distribution, outsourcing and cost, the staff felt that an eight year
term would provide an opportunity to monitor within that term and if indicators were
positive, would make a new agreement more likely. If monitoring indicators were
negative, then there would be more impetus on the city to look at alternatives and time to
explore those alternatives.
Mr. McDaniel noted that service quality is regulated by the utility commission in
collaboration with cities and a standard level of service has been determined that is
equitable for all customers. There is nothing in the franchise that prevents the city from
municipalizing and nothing in the franchise that binds the city exclusively to PSE service.
Mr. Kolff asked if a commitment to provide current maps could be added as a condition
of the letter of agreement. He added the council could look through the list for other
items they might wish included in the letter.
Mr. McDaniel stated that most of the issues in the table have been addressed and
completed with the exception of the pilot project on competition.
Ms. Robinson asked Mr. Watts whether he is satisfied that city liability for the right of
way is covered. Mr. Watts noted that the city ended up with very favorable language to
the city on the issue. The language has been reviewed by the city's insurance authority
and received firm approval. He added that there is a provision in the contract for
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termination due to breach of contract; otherwise issues must be worked out as good
neighbors.
Dana Roberts stated that the greatest measure of reliability would be if the reduncancy
line was in place and had a little time for testing and operating before the bridge closures.
He added that he would like indicator reports specific to the city.
Mr. Fenn raised the issue of street lighting, citing HPC concerns about installing new
light fixtures that direct light downward and keep with aesthetics of the historic district.
Mr. Roberts stated that the committee did not have a representative able to work with
HPC; he said that determining objective criteria about provision of publicly paid
illumination. Once standards have been established a group could be formed to engage in
the discussion. The police have expressed interest in taking part in the discussion as well.
The process would include working up criteria for location and determination of how
many street light fixtures have been in place for 25 years or more.
Mr. McDaniel stated there has been some initial discussion and PSE has been approached
on the broad lighting issues; he will provide an update on the progress.
Mr. Watts stated that vegetation plans will be part of the Right of Way Master Ordinance
scheduled for 2003; it would be generic to not just electric, but other utilities or
franchises using the public right of way.
Mr. McDaniel stated that automatic meter reading is in place.
Public comment
Jack Molsness asked if the city could put in a power generator and sell power back to
PSE. Mr. Watts stated this is not precluded by the franchise. Mr. McDaniel stated that
there is currently such an arrangement between the PT Paper Mill and PSE.
Ms. Sandoval asked about the implementation process.
Mr. Watts stated that the administration will bring back concepts, make some
recommendations in terms of things the council might want to consider in terms of
process and substance. He said that the members of the PSE Franchise Committee have
indicated they are willing to follow through and serve on a phase 2 of the committee.
Ms. Fenn asked that the street lighting issues be discussed at the council retreat/advance
in January.
RECESS
At 8:05, the mayor called a recess for the purpose of a break.
RECONVENE
The meeting was reconvened at 8:15 p.m.
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City Manager David Timmons stated the committees have been working steadily and
have made recommendations on most of the budget funds although there are still some
issues to resolve. Committee recommendations to date were itemized and distributed to
the council. He said at this time the projected general fund balance is at 8.4%, a little
above the 8% goal. The Transportation Committee will be discussing possible methods
of funding the $200,000 pavement overlay project.
He added that System Development Charges will be considered when looking at utility
rates, not as part of the BCD fee structure. He added that two elements of the Fire
Department budget which must be addressed are replacement of two defibrillator units at
$25,000 apiece and the annualized cost of replacement of one of the medic units. Both
are factored in to the revised budget projections.
Because the General Government Committee has not been able to address the Fire Dept.
budget, Chief Edwards was present to brief the council on Fire and EMS for 2003. He
stated that operating expenses have remained much the same and will carry into 2003
without change; however personnel costs and capital expenditures will drive the budget
up.
Mr. Timmons stated a proposed Deputy Chief position will be reconciled during the first
quarter, pending discussion with Fire District 6.
He also stated that providing ambulance service for Jefferson General Hospital could be a
lucrative revenue source but there are several issues to be resolved, including how best to
sustain the current level of service for the city and district 6 while providing the hospital
service; in addition, a new ambulance would have to be purchased.
Chief Edwards noted that the City has received a grant of $112,000 plus a matching
$12,000 for self-contained breathing apparatus and retrofit of existing equipment.
In addition, the FEMA grant for a new facility is in the last stage of approval and the city
will need to budget for matching capital expenses but not in the next budget cycle. Mr.
Timmons stated that there may be some ability to share meeting rooms, etc. with the
Police Department.
Public comment:
Ame Hansen: stated that the city has a shortfall of funds needed to pay for essential
public services and recommended the council increase taxes to pay for street
improvements. He added that property taxes have not increase in four years and the city
is dealing with other funding problems it cannot control. He added that Port Townsend is
the only city in the state which requires voter approval to use the banked capacity tax
percentage but that ordinance could be rescinded. He urged the council to be proactive to
prevent conditions in the city from deteriorating any further.
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Mr. Timmons stated the council will need to discuss addressing the issue of banked
capacity and whether they wish to pursue that as a method of dealing with some expenses
not included in the budget.
Ms. Robinson asked for clarification that the contract fire inspection program has been
cut back by half. Mr. Timmons confirmed the reduction from $60,000 to $30,000. He
also confirmed this is in the latest budget as well as the new L&I rates and a contingency
for the impacts of 1-790 ($85,000). With these additions, the general fund is still within
the target goal.
Mr. Youse stated that he considers streets a basic service and that they should come
before other expenses. There are bigger issues than just the decision about whether to
raise taxes. He stated that he does not necessarily believe the city needs as high a level of
service from the police department as is budgeted. He stated that our geographical
location makes simple comparisons to cities of similar populations unrealistic. He stated
he believes that the $200,000 for the street fund could come from the budget without
increasing revenues.
Ms. Fenn stated that if there are specific ideas about where spending should be cut, she
would be open to considering them.
Mr. Youse replied that the council could simply set a percentage of budget cut and let the
City Manager and staff figure out how to deal with it.
Mr. Kolff stated he is concerned about the process and feels the committee level is where
the questions about level of service should be addressed. If the budget has already been
endorsed at the committee level, it is unfair now to reduce department budgets simply to
avoid raising taxes.
Ms. Sandoval stated that the number of outside visitors coming to Port Townsend also
has a significant impact on the necessary level of service. We are a small community but
the number of people requiring services swells during certain months and we have certain
problems of a much larger town.
Ms. Sandoval stated that the real conversation necessary is how to find a sustainable
fimding source so that we don't have to steal from one fund to give to another;
sustainable, consistent funding must be available for long term planning and protection of
the investment of the citizens.
Ms. Fenn stated that in four years there has not even been an adjustment for inflation but
expenses have been continually cut; however there are need that have been unmet for
many years. Statistics show Port Townsend has some of the cheapest city taxes in
Western Washington and the number of services provided includes library and fire. She
stated she will not support across the board cuts but will listen to any specific proposals
for cutting expenses.
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Ms. Sandoval stated it is apparent now that discussions about library, fire and park
districts may take a long time and in the meantime the city must deal with the level of
service provided versus the amount needed to pay.
CALENDAR UPDATE
Mayor Kolff asked the councilors to consider when they would like to schedule the
beginning year retreat/advance for 2003. A tentative date of Saturday, January 25 was
discussed; final scheduling pending input from Mr. Masci and Mr. Finnie.
He also announced that a meeting of the Council Glen Cove Negotiation team has been
set for 1 pm on Tuesday, Nov. 19, with a meeting with the Board of County
Commissioners to follow at 2:30.
The mayor will attend a meeting with Senator Maria Cantwell tomorrow to promote
support for the city's grant request to Save America's Treasures.
ADJOURN
There being no further business, the meeting was adjourned at 9:20 p.m.
Attest
Pmela Kolacy, CMC .....
City Clerk
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