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HomeMy WebLinkAbout121321 CITY OF PORT TOWNSEND MINUTES OF THE CITY COUNCIL SPECIAL BUSINESS MEETING OF DECEMBER 13, 2021 CALL TO ORDER/PLEDGE OF ALLEGIANCE The Port Townsend City Council met in special session on the 13th day of December 2021 in Council Chambers at 540 Water Street. Mayor Michelle Sandoval called the meeting to order at 6:30 p.m. ROLL CALL Councilmembers present at roll call were Pam Adams, David Faber, Amy Howard, Monica MickHager, Owen Rowe, Michelle Sandoval, and Ariel Speser. Staff members present were Public Works Director Steve King, City Manager John Mauro, Finance and Administrative Services Director Nora Mitchell, and City Clerk Joanna Sanders. UNFINISHED BUSINESS Ordinance 3279 Relating to Regional Wholesale and Industrial Water Service and Adding Chapter 13.18 to the Port Townsend Municipal Code Public Works Director Steve King gave the staff report. The ordinance allows the City to enter into water supply agreements and adds a new code section at PTMC 13.18 for industrial water rates. Public Comment: Gretchen Brewer asked questions about retail and raw water rates, which staff indicated would be addressed related to Ordinance 3281. Motion: David Faber moved to approve Ordinance 3279 Relating to Regional Wholesale and Industrial Water Service and Adding Chapter 13.18 to the Port Townsend Municipal Code. Pam Adams seconded. Vote: motion carried unanimously, 7-0 by voice vote. Ordinance 3280 Amending Port Townsend Municipal Code Chapter 5.84 Utility Business Tax Mr. King gave a brief report on this amendment that is a companion to the former amendment to Chapter 13.18. In response to questions, Mr. King confirmed the business tax applies on industrial rates, but not when there is a special water supply contract. With Port Townsend Paper, there are applicable administrative fees City Council Special Business Meeting December 13, 2021 Page 1 of 4 versus the tax. Public Comment: There was none. Motion: David Faber moved to approve Ordinance 3280 Amending Port Townsend Municipal Code Chapter 5.84 Utility Business Tax. Owen Rowe seconded. Vote: motion carried unanimously, 7-0 by voice vote. NEW BUSINESS Ordinance 3281 Related to Utility Rates; Amending Chapter 13.05 of the Port Townsend Municipal Code and Establishing an Effective Date Finance and Administrative Services Director Nora Mitchell gave the staff briefing on the new utility rates to begin April 1, 2022. Chris Gonzales of FCS Group gave a presentation reviewing the revenue requirement analysis, water system development charges (SDCs), and utility policy assumptions. Council had questions about how the utilities tax as a gross revenue is calculated. Mr. Gonzales and Mr. King stated the tax is an expense of the utility. In order to raise enough funds for the City to pay the tax on the total revenue of the utility, the tax is built into the utility rates (effectively a rate of 22%). Ms. Mitchell agreed to provide an additional information that better depicts or explains the proposed tax reduction from 22% to 18% at the next meeting. Mr. Gonzales continued his presentation on the change in terminology from "capital surcharge" to "capital rate" of$22 for the costs of operating and maintaining the pipeline. Port Townsend Paper has been paying those operational costs and these would now come into the utility with both the Mill and the City paying their share of the raw water rate as reflected on Exhibit A. He further explained 'other costs" as all operational expenses aside from salaries and benefits and then reviewed the capital needs forecast, system development charges, and summary of recommendations. In response to questions, Mr. King explained the proposal to go with lower SDCs of $5,603 (up from $4,494) versus $7,500 because in mid to late 2022, the City would be bringing back the larger set of fees as part of the sewer plan and comprehensive streets program. Public Comment: Gretchen Brewer asked questions about the raw water rate versus retail rates with Mr. King responding. Mr. Gonzales noted that not all System Development Charges (SDC) are going into the model as there are different methodologies used for charging SDCs. It was City Council Special Business Meeting December 13, 2021 Page 2 of 4 noted that when comparing rates to other jurisdictions, it should be recognized that other cities may have impact fees and SDCs and lower utility rates. The more that is collected in SDCs, the less would be charged to the rate payers. There were Council acknowledgements of the cost to the public of the complex water system and critical infrastructure and a suggestion to find ways to communicate this to the rate payers. Motion: David Faber moved to approve first reading of Ordinance 3281 Related to Utility Rates;Amending Chapter 13.05 of the Port Townsend Municipal Code and Establishing an Effective Date. Pam Adams seconded. Vote: motion carried unanimously, 7-0 by voice vote. Ordinance 3282 Related to Water System Development Charges, Amending Chapter 13.03 of the Port Townsend Municipal Code, and Establishing an Effective Date Mr. King noted that this ordinance sets the system development charge as previously discussed. There was no public comment. There was discussion and clarification that SDCs deferrals are set by the number of deferrals versus the amount. Motion: David Faber moved to approve first reading Ordinance 3282 Related to Water System Development Charges, Amending Chapter 13.03 of the Port Townsend Municipal Code, and Establishing an Effective Date. Owen Rowe seconded. Vote: motion carried unanimously, 7-0 by voice vote. Resolution 21-082 Authorizing the City Manager to Execute a Grant Agreement with the Washington State Department of Commerce for a Property Purchase to Support Affordable Housing in Port Townsend Mr. King gave the staff report on this authorization of the grant agreement necessary to wire the funds for the purchase. Action on the property purchase would be presented next week. He responded to questions about the definition of mixed-income as described in the agenda bill. There was no public comment. Motion: Monica MickHager moved to approve Resolution 21-082 Authorizing the City Manager to Execute a Grant Agreement with the Washington State Department of Commerce for a Property Purchase to Support Affordable Housing in Port Townsend. David Faber seconded. Vote: motion carried unanimously, 7-0 by voice vote. ADJOURN City Council Special Business Meeting December 13, 2021 Page 3 of 4 There being no further business, the meeting adjourned at 7:54 p.m. Attest: Joanna Sanders, MMC City Clerk City Council Special Business Meeting December 13, 2021 Page 4 of 4