Tacoma City Council Meeting - April 14, 2015

CONSENT AGENDA

PROCLAMATIONS/RECOGNITIONS/PRESENTATIONS/ANNOUNCEMENTS

Wednesday, April 14, 2015 was proclaimed as Rock Paper Scissors Foundation Day in the City of Tacoma. The RPS Foundation is a nonprofit organization that raises awareness of mental, physical, and emotional abuse, creates awareness about sex trafficking, and offers support services to survivors of all forms of human trafficking. 

Mayor Strickland read a Recognition of the Stadium High School ProStart Program, which won first place in a recent statewide competition, and will represent Washington State at a national competition for 2015. ProStart is a career preparatory program, providing real world experience and mentoring for young people interested in careers in the restaurant industry.

PUBLIC COMMENT

Monique Trudnowski, owner of Adriatic Grill, offered her congratulations to the students in the Stadium ProStart program, and to all the students working hard in the ProStart program.

REGULAR AGENDA

APPOINTMENTS

Resolution No. 39167 A resolution appointing Sheryl Ellis to the Tacoma Area Commission on Disabilities.

Resolution No. 39168 A resolution appointing Halley Knigge to the Tacoma Arts Commission.

The appointments were unanimously approved.

PURCHASE RESOLUTIONS

Resolution No. 39169 A resolution awarding a contract to 3MW Studio LLP, dba 3Square Blocks, LLP, in the amount of $225,000, sales tax not applicable, budgeted from the NEP Watershed Grant, 1195-BUILD Fund, to provide assistance in the development of the Tacoma Mall Subarea Plan and Environmental Impact Statement, for an initial contract term of approximately 21 months.

Like the processes already completed for the North and South Downtown and Hilltop subareas, the Tacoma Mall Subarea Plan and EIS will lay the groundwork for development in the area covered. The process completes planning and visioning, as well as assessing environmental impacts of development for the area as a whole, rather than on a case-by-case basis. The goal is to create a comprehensive vision for the area, improving certainty and speeding up the process for potential developers.

The Tacoma Mall Subarea goes beyond the boundaries of the Tacoma Mall property, including the entire 485 acres of the Tacoma Mall Regional Growth Center – most of the area roughly between South Tacoma Way to the west and north, and I-5 to the east, south to about South 48th and 49th. Deputy Mayor Boe described the area, particularly the neighborhood to the west of the mall, as having suffered from a lack of planning in the past, and said he looks forward to seeing a plan evolve for the area.

The project is being funded by a $250,000 National Estuaries Program Watershed Protection Grant, and will include a separate stormwater infiltration assessment, which will inform area-wide stormwater strategy, and support an emphasis on Low Impact Development strategies. As with the other subarea plans, you can expect extensive outreach from the City, and the continued involvement of stakeholders and community partners including the Simon Mall group, which helped the City win the grant.

RESOLUTIONS

Resolution No. 39170 A resolution approving the call of $122,135,000 in outstanding Tacoma Power 2005 Series B Bonds; and authorizing their redemption using a combination of cash and a reduction of the bond reserve account.

We won’t claim to be experts in this area, but we’ll do our best to capture what was said. We’ll freely admit we had to listen to it more than once – the first time through, all we heard was “mwah mwah mwah … one hundred million dollars … mwah mwah mwah mwah mwah…,” but on a second listen, it started to make a little more sense.

It’s a new financing plan that would leverage the large amount of reserves Tacoma Power has on hand to pay off a set of bonds issued a decade ago, resulting in significant savings by eliminating the need to service debt on that set of bonds. Also included in the plan is a provision for a couple of loans – one to defer the need to issue more bonds for another two years (more savings), the second to maintain the level of liquidity the utility needs to keep the rating agencies happy. This financing plan was developed to be consistent with the approved budget and with recently approved rate increases.

This first resolution approves the calling of $122 million in existing TPU 2005B bonds, using a combination of cash on hand and excess bond reserve funds. This will result in a 41% reduction in debt service for the utility over the next six years. The graph provided by Tacoma Power illustrates the savings – the orange 2005B bonds disappear from the chart in this proposed plan, significantly reducing the total dollar amount of bonds serviced through 2020.

Resolution No. 39171 A resolution amending the Electric Rate and Financial Policy to address the use of long- and short-term debt to finance capital projects; provide clarification pertaining to use of financial metrics; and provide additional requirements pertaining to the funding of the Rate Stabilization Fund.

This second resolution related to the Tacoma Power financing plan approves changes to the electric rate and financial policy to support the implementation of the new financial plan, to create better alignment of financial metrics, and to preserve financial flexibility.

FINAL READING OF ORDINANCES

Ordinance No. 28293 An ordinance repealing and reenacting Chapter 8.122 of the Municipal Code, relating to Noise Enforcement, to update the purpose and add a definition for continuous sound; provide clarification regarding variances and appeals; and revise the penalty section to allow for escalation of penalties for repeat offenses within a 12-month period.

Councilmember Mello asked for clarification on how exemption changes would impact activities in the S-6 and S-7 shoreline districts (specifically activities relating to the Sperry terminal).

The staff response was that Sperry’s activities would not be exempt under the code as proposed, and that the City attorney had reviewed the changes to ensure this. Staff is working with Sperry and the neighbors to find a path to a happier coexistence.

FIRST READING OF ORDINANCES

Ordinance No. 28294 An ordinance amending Title 6 of the Municipal Code, entitled “Tax and License Code,” establishing an amnesty program for taxes imposed under various chapters, and offering a specific time period for application and payment to benefit unlicensed businesses and businesses with delinquent accounts in Tacoma.

The proposal is for a one-time amnesty opportunity for businesses currently licensed with the City with delinquent accounts; and those that are not currently licensed, but should be. The proposal is to encourage these businesses to come forward by reducing the amount owed. The City is offering to decrease late fees and other penalties owed by businesses during a short time period. Councilmember Campbell described it as an opportunity for businesses to make good on their debts before a collection agency comes knocking. Because it is impossible to predict how many businesses would take advantage of such an opportunity, there's no revenue forecast for the program. 

If adopted, the program would begin with a targeted and general outreach campaign in May, followed by a 30-day period for the month of June during which delinquent businesses could apply for the amnesty opportunity. Those businesses would have only until the end of July to pay what they owe. Tacoma has never offered such an amnesty program before, and once the 30-day application period is up, the opportunity would end as well.

Read more about the proposal here.

Ordinance No. 28295 An ordinance authorizing a new issue of bonds to be known as the City of Tacoma Electric System Subordinate Revenue Bonds, and fixing the terms, provisions, and covenants of the City.

This ordinance, related to the new Tacoma Power financing plan, would serve as the umbrella ordinance for the following two loan agreements, which are subordinate to Tacoma Power’s outstanding bonds. This ordinance would provide a consistent structure for the short-term bank agreements with Wells Fargo and Key Bank.

Ordinance No. 28296 An ordinance approving a Supplemental Bond Ordinance; and authorizing Tacoma Power to execute a short-term drawdown direct note purchase agreement with Wells Fargo Bank, in the amount of $100,000,000, to provide funds to finance for refinance costs of capital improvements to the Electrical System.

Two loan agreements are proposed relating to the financing plan for Tacoma Power: one in this ordinance with Wells Fargo, the second in the following ordinance with Key Bank.

The Wells Fargo loan would be $100 million to help fund capital costs. Rather than issue bonds, this loan would allow the utility to cover expenses as needed over the next two years, using the loan with a very low interest rate, anticipated at somewhere around 0.5% interest rate. Bonds would be issued at the end of those two years to pay off the loan. By deferring the issue of $100 million in bonds, this agreement would save the utility roughly $6.5 million in interest on those bonds over the two-year period. The agreement will also allow the utility to better match its financing to its spending needs – allowing it to draw funds as needed for construction costs, to be paid off at the end of the term, resulting in overall savings, while still allowing projects to be financed.

Ordinance No. 28297 An ordinance approving a Supplemental Bond Ordinance; and authorizing Tacoma Power to execute a short-term liquidity note purchase agreement with KeyBank, in an amount not to exceed $50,000,000, to provide general credit, including liquidity, for the Electric System.

This second agreement, with Key Bank, would start out at $25 million, with a provision to double that amount to $50 million with 90 days notice. Unlike the Wells Fargo loan, Tacoma Power doesn’t expect to ever draw down against this loan, but this agreement would allow Tacoma Power to decrease the amount of cash it holds on hand. The utility is required to have a certain amount of liquidity to satisfy the rating agencies. This agreement would allow them to satisfy those requirements without actually having to hold cash.

PUBLIC HEARINGS AND APPEALS

This was the date set for a public hearing by the City Council on the 2015-2019 Consolidated Plan and the 2015-2016 Annual Action Plan for housing and community development.

The Consolidated Plan strategically addresses how the City plans to fund housing, homelessness, and community development needs across Tacoma. It establishes funding priorities and objectives, sets goals and performance indicators, and allocates available federal CDBG, HOME, and ESG funds to address priority needs. Those federal funds have been either holding steady or decreasing over the last six years. The plan has CDBG funds going to community development projects like park and sidewalk improvements, economic development projects like support for startup and growth of small businesses in Tacoma, public services, housing programs including affordable housing and the Valhalla Hall demonstration project, and administrative costs.

Human services use CDBG funds to support programs offering services to stabilize households at risk of homelessness, and meet basic needs. ESG funds pay for programs providing shelter services and rapid rehousing, as well as Tacoma’s homeless management information system.

A representative of the William Factory Small Business Incubator spoke about the support his program provides to anyone looking to start a business, saying that historically women, minorities, and immigrants have made up 75% of their client base, and listing some of their success stories. Another commenter made general comments about not seeing money going to homelessness prevention and street outreach.

CITIZENS’ FORUM

In anticipation of public comment on the recent proposal to lease Tacoma’s Click! network to Wave Broadband, Mayor Strickland made some remarks to try to “provide facts” and counter some “bad information” that she said has been going around. The Mayor gave a brief overview of the history of Click!’s efforts to find a workable business model, leading up to the proposal, which she emphasized came from Wave, not the other way around, to let them take over operation of the Click! network. She posed a couple questions to the audience. First: what if the company that came to us wanting a partnership was named Google instead of Wave? Then: Do we want to treat Click! the same as our other utilities? Do we want to allow it to operate in the red because we think it’s too important to let it go?

Following the mayor, four citizens made comments related to Click! Everyone who spoke this week was at the very least skeptical of the proposed deal. At least one commenter raised questions about TPU’s management of Click!, asking why choices to improve its competitiveness have not been made. Several of the commenters made observations that the current proposal seemed rushed, and asked for more opportunity for public input, and greater transparency. One commenter laid out a proposal that included the formation of a citizen committee to review the proposal, with residents from each district, as well as a couple Click! employees. The speakers pointed to the benefits of Click! for customers, and asked that the City look in more depth at other options. One commenter asked the council to consider how history would remember their actions in comparison to what he called the bold, visionary actions that created Click! originally.

Aside from comments on Click! we heard from one citizen who has been before the council repeatedly to speak about Tacoma Police treatment of minorities. We also heard from a representative of the local hospitality workers union that represents workers at the Murano, returning to again ask the City to consider the deal for the proposed new Convention Center hotel, asking that they consider the workers in the deal.

REPORTS BY THE CITY MANAGER

City Manager Broadnax shared that this Saturday the Edison neighborhood will partner for a community clean up at Edison Elementary School. Dumpsters will be available for residents of single family homes and duplexes in the neighborhood to use at no charge .

COMMENTS AND COMMITTEE REPORTS OF THE CITY COUNCIL

Councilmember Ibsen noted that we are just at the beginning of the conversation about paid sick leave in Tacoma, with the extensive rule-making process still before us. Employers, workers, and other interested citizens are invited to join in the process, beginning with a series of public meetings, the first of which will be held next Wednesday, April 22, at the Downtown Library. Find more details here.

Deputy Mayor Boe followed up with the dates and locations of the other two meetings - one on May 14 at Wilson High School, the other on June 10 at the STAR Center. Boe added that there will also be a community workshop on Tacoma's Comprehensive Plan this Thursday, April 16 at Stadium High School and a simultaneous public meeting on the Transportation Master Plan at Jason Lee Middle School. 

Boe also added a couple of arts events.

• Tacoma Musical Playhouse presents Evita on Fridays, Saturdays, and Sundays now through May 3.
• Tacoma Symphony presents Mini Maestros Percussion on Parade at UPS this Sunday, April 19.

Councilmember Campbell gave a save-the-date for Parks Appreciation Day on Saturday, April 25 from 9 to noon, and invited everyone to participate in the day with a major clean-up at McKinley Park.

Councilmember Lonergan announced the upcoming Junior Daffodil Parade in Proctor this weekend. It's the largest children’s parade in the state, with a theme this year of "shine your light." The parade is scheduled for 10 a.m., but you may want to get there early for parking (or take the opportunity to walk or bike). 

ADJOURNMENT

Councilmember Thoms was absent from this week's meeting, and Councilmember Walker participated telephonically.