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HomeMy WebLinkAbout01/08/97 TAPE #1432 CITY COUNCIL MEETING MINUTES JANUARY 8, 1997 The regular meeting of the City Council of the City of Bremerton was called to order in the City Council Chambers, 239 4th Street, Bremerton, Washington, Wednesday, January 8, 1997, at 5:30 P.M., with Council President David Farr presiding. Council members present were Bob Winters, Carlos Montgomery, Sherril Huff-Menees, Richard Neville, Lon Overson, John Law, Cecil McConnell, and Al Colvin. Also present were City Attorney Ian Sievers and Deputy City Clerk Paula Johnston. The meeting opened with the Pledge of Allegiance led by Council President Law and Invocation given by Reverend Bill Wambsganss of West Side Baptist Church. President Law announced Council had just concluded an Executive Session where they discussed "Labor Negotiations". MAYOR'8 REPORT Mayor Lynn Horton reported she will be attending a welcoming dinner for Admiral Clemens this evening in Seattle. As an update to the storm damage, she was pleased to report the Warren Avenue Bridge was opened much sooner than originally identified due to the quick response by the State to bring in a contractor to assess the damage and remedy the problem. She thanked the State of Washington and the contractors for doing an admirable job in getting the bridge back in service. she also thanked the National Guard for providing traffic enforcement during the closure of the bridge was closed, and City staff for their effort in coordinating alternate routes. As-far as City damage, road washouts and water damage to the Municipal Court Room and several other offices suffered from the storm. She anticipates the cost to the City will be approximately $150,000 to cover the costs of roadway repairs and other costs incurred due to storm related conditions. She noted that cost is minor compared to the rest of Kitsap County and the City of Bremerton. The totals for damage incurred from the storm in the City of Bremerton exceeds $10 million. She suspects that total may go upward to $15 million. Damage assessments are being gathered County-wide so that they can be forwarded to President Clinton with the hope that he will sign the Emergency Declaration, which will provide FEMA funding for all the governments as well for those who had damages but were uninsured. She expressed her appreciation to City staff, particularly Assistant Fire Chief Al Duke, Bob Tulp, and Riley Thompson. Mayor Horton read a Proclamation recognizing January 20, 1997 as Martin Luther King Jr., Day in the City of Bremerton. Reverend Cleveland Williams, Ebenezer AME Church, accepted the proclamation TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 2 of 17 and invited everyone to celebrate this day at the Kitsap Pavilion 10:30 - 1:00 P.M. (NOTE: Mayor Horton comments on Agenda Item 7A were made during her Report; however, they are listed under that item.) ELECTION OF CITY COUNCIL OFFICERS President Law opened nominations for City Council President/Mayor Pro Tom: Mr. Montgomery nominated David Farr. Mr. Winters nominated John Law. President Law closed the nominations. Vote: David Farr - 5 votes John Law - 4 votes. David Farr was elected City Council President/Mayor Pro Tom. Mr. Montgomery called for a roll call of votes: Paula Johnston, Deputy City Clerk, read the following voting record: Votes for David Farr: Huff-Menees, Overson, Novills, Farr, Montgomery. Votes for Mr. Law: Winters, Law, McConnell, Colvin. Mr. Law thanked Councilman Richard Neville for always being available to fill in as President in his absence and those Council members that came through whenever he asked for help or advice. He extended a special "thank you" to Mrs. Erhart for always being supportive during his year as President. President Farr thanked Councilman Law for putting in a lot of effort in his role as City Council President and he will be counting on him in the turn-over of the Presidency. President Farr opened nominations for City Council Vice President: Mr. Winters nominated Cecil McConnell. Mrs. Huff-Menees nominated Richard Neville. President Farr closed the nominations. Vote: Cecil McConnell - 4 votes Richard Novills - 5 votes. Richard Novills was elected Council Vice President. Mr. Montgomery called for a roll call of votes: Paula Johnston, Deputy City Clerk, read the following voting record: Votes for Richard Neville: Colvin, Farr, Montgomery, Huff-Menees, Neville. Votes for Mr. McConnell: Law, Overson, McConnell, Winters. CONSENT AGENDA A. Minutes - December 18, 1996 #AB97-001 TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 3 of 17 B. Minutes - December 23, 1996 #AB97-002 C. Minutes - December 30, 1996 #AB97-003 #0768 M/S/C(Neville/Montgomery) to approve Consent Agenda as presented. Vote on Motion: In Favor: Montgomery, Huff-Menees, Neville, Farr, Overson, McConnell, Law, Colvin Abstain: Winters Motion carried. CLAIMS/CHECK RE~ISTERS Vouchers audited and certified by the auditing officer as required by RCW 42.24,080, and those expense reimbursement claims certified as required by RCW 42.24.090, have been recorded on a listing that had been made available to the Council. #0793 M/S/C/U(Colvin/Montgomery) on January 8, 1997, the Council does approve for payment those vouchers included and further described as follows: Regular Payroll for the period ending 12/31/96, in the amount of $876,298.71. COUNCIL MEMBER REPORTS Mr. Colvin wished everyone "Happy New Year". He commended Mayor Horton for being so alert during the winter crisis. He thanked Don Atkinson and KITZ for their reporting timely news bulletins during the recent storm. He complimented the Warren Avenue Bridge repair crew for making it possible to open the bridge earlier than anticipated. He announced at the Council meeting on January 15 Jim and Lillian Walker, who were selected to receive the "Citizen of the Century", will be presented a Certificate Of Appreciation. He was personally aware that the Walkers had contributed more than 100 years (combined) of public service. Mr. McConnell announced District #2 will not hold a Neighborhood Meeting in January. He referenced several letters being published in The Sun concerning parking on City right-of-way and blaming Senator Betti Sheldon for the recent action by the City to remove vehicle parking off of planting strips. He pointed out the legislation addressing liability for sidewalks sponsored by Senator Sheldon did not have anything to do the removal of parking on planting strips. The change she sponsored in the law was to assign the responsiblity for the damage to the sidewalk and any other structure resulting from vehicles parking on the planting strip. That legislation was brought about as a result of a lawsuit against the City of Tacoma and the Washington State Supreme Court's decision that if the city did not enforce its ordinances they would be responsible for any and all damages to curbs, sidewalks, etc. Prior to passage of that legislation, cities were holding the TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 4 of 17 abutting property owner responsible. He emphasized what Senator sheldon did was good for the property owners...it removed that responsiblity from the property owner and put it back on the City. He believes the people writing letters to the editor on this issue may have been miss informed. The laws governing parking on the right-of-way portion between the traveled portion of the street and the property line is covered in other RCW's, not the one people have been referencing in their letters. Mr. Law stated it was possible that those writing letters on the removal of parking on planting strips may not be aware of all the facts involved. He announced the next District #3 Neighborhood Meeting will be held January 21, 7:00 P.M., at the Senior Center. The program for that meeting will included talking about all that has happened over the past two months. Mr. Neville announced the following meetings: (1) A public meeting with residents of the Park Avenue area will be held January 14, 6:30 - 8:00 P.M., at the Kitsap Community Action Program building located at 1201 Park Avenue. (2) A public meeting will be held on January 21, at Memorial Lutheran Church located at 10th and Veneta. This is a follow up meeting to the one held in October where the issue of Parking on planting strips was discussed. (3) The Ferry Advisory Board will meet January 27, 1997, 6:30 - 8:30 P.M., in the City Council Chambers, which will be televised on Channel 12. Mr.' Neville thanked the Boy Scouts for the effort they made delivering coffee and donuts to members of the National Guard, who were assisting with traffic control when the Warren Avenue Bridge was closed. He was amazed at the damage to trees along Highway 16 between Gorst and Tacoma, which was caused by the recent snow and ice storm. Seeing that damage, he recalled how fortunate the City was to have Bill McKinney, City Forester, who spearheaded the removal of trees along the Old Belfair Highway before something like the last storm could devastate that area. Lastly, he thanked John Law for his leadership as City Council president this past year...A JOB WELL DONE] Mrs. Huff-Menees congratulated President Farr and Vice President Neville on their being elected and a note of appreciation to Mr. Law. The position of City Council President is one that requires a great deal of time and effort, much of which goes unseen by other members of the Council. In many ways, Mr. Law set some standards that we can all pay close attention. Today she attended the Kitsap County Executive Council where a lengthy presentation was made by TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 5 of 17 Phyllis Mann, Director of the Department of Emergency Management Services for Kitsap County. In her report, Ms. Mann mentioned several times that we, as a community, deserve to feel very good about the way the City, County, Kitsap Transit and a number of community groups responded to recent emergencies. All of the agencies affected came together and formulated an alternate routing system that worked when the Warren Avenue Bridge was closed, which was a remarkable feat considering the short time frame to accomplish that task. The cooperation with which it was completed is what made it such a success, but also an appreciation to the citizens for responding in the manner they did when faced with the bridge closure. The National Guard was recognized at the morning meeting for their participation assisting the community. The community as a whole could feel very good about the way responses were made to emergency situations. Mr. Montgomery stated his daughter and son-in-law were visiting this area from Montana during the recent storm and did not appreciate the inconveniences encountered due to our unpreparedness. He commended the City Street Department for the effort they made to keep the streets passable and making sure the storm drains were working properly to prevent flooding. He also commended the City's Fire Department and Police Department for their efforts helping the citizens during the storm as well as neighbors helping each other. He complimented The Sun on their reporting during the week of the storm even though delivery of the paper was not always possible in all areas due to snow and icy conditions. However, in the January 6 edition of The Sun, a picture of Kitsap County Commission Phil Best looking over the damage to the Warren Avenue Bridge was printed and the article contained some comments about the damage situation, but also talked about a prior incident involving him and his use of the Internet. Mr. Montgomery felt the latter comments were totally inappropriate for The Sun to report as part of that news article and that Mr. Best should not be continually bashed for a mistake that he acknowledged he made. He questioned is The Sun going to continue such practice as long as Mr. Best is in office? If so, then why didn't they report on actions by other Commissioners for some of the things they did? Mr. Montgomery and Mayor Horton viewed the Warren Avenue Bridge damage on January 2, and was amazed at the amount of dirt that had been moved from the damage area. Mr. Winters stated in January 1996 he made a New Year's resolution to be more active on Council and become better informed on what could help and better the City of Bremerton, which he did. Since this will be his last year on Council, he feels strongly that certain things need to be done in 1997, and he will be more vocal to the public so that they clearly understand that in City Hall Council members are elected by the public. The following issues TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 6 of 17 are "burning desires" for him to pursue: (1) adoption of an ordinance addressing the Telecommunications Act; (2) complete negotiations on TCI Cable's Franchise Agreement; (3) truly telling the public exactly funding source for the Sinclair Land Project; (4) Kitsap Lake's future, i.e. cleanliness and its vegetation condition. He was saddened to report the recent passing of his uncle, Dick Winters. Mr. Farr congratulated Mr. Winters on his ambitious hopes for 1997. He commended all those involved with handling problems related to the recent snow/ice storm, particularly the coordination of moving traffic over the Manette Bridge with the closure of the Warren Avenue Bridge. He expressed condolences to the businesses and individuals in the City that suffered losses due to the storm. PUBLIC RECOGNITION Kal Leitchman, Bremerton resident, acknowledged he was one of those who wrote letters to the newspaper editor regarding the City's action to remove parking on planting strips. He was still not satisfied with the City's response to his earlier inquiry requesting copies of the documentation relating to a lawsuit that involved an injury related to an accident on a planting strip resulting in a settlement of $18,000 to the claimant. The letter he received from the City's Risk Manager stated he would have to contact the City Attorney to obtain copies of the lawsuit. Mr. Leitchman questioned why should he have to contact Mr. Sievers, the City Attorney, when the Risk Manager could have obtained the information and provided it to him. Again, he requested the City provide him with that documentation. He then read a portion of the 14th Amendment to the United States Constitution and referenced its application to what he believed was a "taking" from property owners, if the City prohibits parking on planting strips. President Farr assured Mr. Leichtman that Mr. Sievers was aware of the information he wished to receive. Ian Sievers, City Attorney, stated he would see that Mr. Leitchman received the requested documentation. Ed Pietras, representing the Martin Luther King Scholarship Fund, talked about the selection of Jim and Lillian Walker as the recipients of the "Citizen of the Century" Award. He extended an open invitation to the public to attend the Martin Luther King Jr., Scholarship Fund Luncheon on January 19, 1997, at the Kitsap Golf and Country Club, 1:30 P.M. Tickets for this event are available at a cost of $18.00 pre-sale and $20.00 at the door. Roy McInnis, Bremerton resident, stated most of the comments he made during Council meetings in 1996, were Complaints and he hopes to approach 1997 with a more positive look at what the City is doing. He wished everyone a Happy New Year. Out of all of the TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 7 of 17 effort given by lots of people during the recent snow storm, he singled out Public Works and Utilities employee Donald Sefton to commend for his going out of his way to assist the Sinclair Missionary Baptist Church with a problem that involved flooding on church property. 7A - RESOLUTION NO. 2582, REGARDING FINANCING OF BREMERTON HOUSING AUTHORITY NEW HOUSING PROJECT, #AB97-004 The Bremerton Housing Authority has responded to the City's request to develop new, owner-occupied, moderately priced housing units. The project identified involves the City of Bremerton signing a contingent loan agreement for financing. This resolution approves the proposal in principle and authorizes the Mayor to sign the contingent loan agreement when requested by the Bremerton Housing Authority. MaYor Lynn Horton stated this project is clearly a new role potentially for the City of Bremerton to act as a backup guarantor for the Bremerton Housing Authority's bond to develop 160 single family owner/occupied homes. Over the last several years, the City has identified one of the main issues of importance is to change the demographic of 60% non-owner/occupied housing to something more in line with a more economically healthy community. Not only is owner occupancy good for the City, it helps people get on an economic escalator and if you look at the fact the City of Bremerton has a population comprised of 50% low income, that is another major goal that the City has been trying to change over the past several years. The City has been looking at economic development to get people into jobs, we do have good educational systems but we need a greater diversification of job opportunities at all economic levels. In terms of economic dollars to the City, there will be a one time tax advantage in the area of $600,000 that will be coming to the City through construction fees. It also means in excess of $70,000 per year in property taxes. This is an issue that is clearly a major policy issue for the Council to debate and it is her hope they will give their approval. One of the things that makes this proposal attractive to the City, Housing Authority and the developer, is that the City has a First Time Home Buyer Program where over the last year approximately $100,000 in Block Grant funds were offered to the community to act as down payment assistance. As a result of the sale of each unit, the Housing Authority and the City of Bremerton will receive some sort of a profit margin and the City's intention is to roll those funds back into more housing, i.e. down payment assistance. She realizes there is a lot of neighborhood concern as to what 130 housing units would do to the Almira Drive neighborhood, but the property is already zoned so that someone could, at this moment, build 400 low income rental units. That kind of project would not provide the City with as great a tax base, could create other difficulties and TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 8 of 17 it does not help the City achieve the goals that have been set out in trying to change the demographics in homeowner occupancy. She realizes this proposal may be a difficult vote for some members of the council, but she feels strongly that the proposal is a solid project. The Bremerton Housing Authority is very supportive of the project and will be conducting a market analysis to make sure that there is a market for this project before they move forward. If the City is not willing to stand up and say we'll support our principle goals, then maybe we need to re-evaluate what is thought to be the goals of the City. She urged the Council to think seriously about this issue and to vote yes. Rich Hanna, Treasurer, explained the project is a residential real estate development that would consist of 130 units of housing on approximately 10 acres. He noted the City's goal is to promote owner occupied housing at affordable rates within the City; however, this proposal is a project of the Bremerton Housing Authority. The Housing Authority is in the process of and will continue to review the financial viability of the project and it is there intention, based on discussions with the City, to go forward with the project only if it makes sound financial sense and is financially viable. The City's role, as proposed, is to provide the Housing Authority with a credit enhancement through a contingent loan agreement. This would mean the City will provide an additional level of assurance to the bond holders, who would lend money to finance the project. The financial analysis that has been conducted on the project indicates that it does make sense even if it does not sell out, but certainly the intention is to foster owner occupied housing. The project can be financially successful either through rental operation or sales. It would appear the project would comfortably generate adequate income so that the City's role would not be called upon to contribute financial assets. Should that be the case, it would be in the nature of a loan where the City would lend money to the Housing Authority in the amount necessary over and above project income from sales or rent so that the bond payments would be met in a timely manner. The City would be reimbursed at a later date as income from the property was in excess of later bond payments. Merrill Wallace, Executive Director Bremerton Housing Authority, stated the project has been presented quite well by Mayor Horton and Mr. Hanna and he would be available to answer any questions. Gene Kennedy, long time resident and Bremerton businessman, stated he has seen a number of projects proposed for the subject site, but none have been successful in their attempt to develop the site. He was of the impression that either the wrong individuals were trying to develop the property and/or it was the wrong time for such a development. Now, he believes this is a good project as far as its TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 9 of 17 structure in developing single family residences at what he considers a moderate level of cost to the homeowner, but also a very quality group of people that incorporates two local entities and two developers, who have a good track record. He believes the proposed project is an excellent use for the subject site and a fascinating and positive approach to fill a need in the housing market place. Elizabeth Buell, Bremerton resident, asked if the site was level, what is located behind the site, the proposed height of the structures and their sale price? Mr. Winters questioned if there was a bidding process used to find the developer? Mr. Wallace stated no, basically Cobalt, the developer, brought their proposal to the Housing Authority and the City. Originally, the subject site (20 acres) was proposed to be used for 360 units of rental housing. Cobalt came in with the term "work force housing" that is used in other areas and is a home ownership concept, which is something the Housing Authority had not seen before. At that time, the proposal was reduced from 360 units down to a lesser numbers. Members of the Housing Authority felt developing 260 home ownership units might be more of a risk than they wanted to take, so they asked that the property be divided into two phases with Phase I being 130 units. This would basically be a "turn key" project where the specifications will be set up and agreed to beforehand,i e., price of the units. Cobalt and their builders will build the project for a particular price and if it meets the Housing Authorities specifications they will accept the project, which they will then own and in turn will sell it out over a period of time. Mr. Winters questioned if the $9,986,500 to purchase the project was derived by Cobalt as being the cost per square foot? Mr. Wallace explained negotiations were still underway with Cobalt, but they have taken steps to determine if there is a market and if the pricing is correct for an average of $90,000 per home. Mr. Overson acknowledged the data provided; however, he does not support the project because it does not meet the City's goal to reduce the number of rentals or increase the number of home ownerships, and subject neighborhood is already 50% owner occupied. These kinds of projects are needed in areas of the City where there are problems. He pointed out two privately funded projects proposed for the site did not succeed. His major concern has to do with data from the trends that are happening in Kitsap County, i.e. jobs are being eliminated, homes currently on the market for sale are not selling, the Navy is building hundreds of new units for military personnel, etc.. He felt it was unfair to the taxpayers to put such a burden on them. TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 10 of 17 Mrs. Huff-Menees stated she disagreed with Councilman Overson and was delighted with the proposal in its complete concept. She believes it does meet the City's goals, particularly after listening to a presentation by the Health District on the demographics of the County, its growth rate and projected growth rate. This project is exactly what is needed to meet that type of growth. From the time she joined the Council and long before that, an identified deficiency in the City was the lack of homeownership and the high percentage of rentals that present all kinds of problems for law enforcement, health and property management. An added benefit is to provide homeownership to an income segment of the population that current is not met. She would much prefer to have an opportunity that presents homeownership than more apartment rentals. Many times it has been identified by the Navy, Congressman Norm Dicks and people across the Sound, who look to this area for possible residential opportunities, that this is the type of thing they are looking for. She believes the design of the proposed project is excellent and one that is a positive addition to the Almira Drive neighborhood and one she would like to see developed in other areas of the City. Although there is a certain amount of risk, she believes the City must be willing to do what it can to make improvements. Mr. McConnell asked the City Treasurer the highest bond rating allowed for the City? Mr. Hanna stated presently the City has an A-Rating. The highest rating on bonds is "AAA", which is not doable by a City the size of Bremerton anywhere in the Country. Mr. McConnell asked if this proposal is approved, what would it do to the City's A-rating? Mr. Hanna stated it is impossible to predict all possible future scenarios. He has discussed at length with the City's bankers and representatives of Moody's Investor Service the affect, if any, of entering into the contingent loan agreement. Neither he nor the Mayor would be advocating the project if it were not so that it will have no adverse affect on the City's bond rating. Mr. McConnell asked if it would affect the bonding capabilities of the downtown project? Mr. manna stated no, the contingent loan agreement has no affect on the city's statutory limitation of indebtedness, which is another indicator that is reflective that the possibility of this transaction impacting the City in any significant financial way is quite remote. Mr. McConnell referenced a section in the agreement that had to do with the City gaining significant cash flow by purchasing the town homes at an average cost of $76,050 and then selling them on the average of approximately $90,000. That particular statement makes him believe the City is going into the real estate business. Mr. Hanna stated that will be the role of the Housing Authority as described in the documentation. The documentation provided to Council is a proforma, not a contract, due to the fact negotiations have not been completed. What it does contemplate is as the developer TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 11 of 17 completes the project and it is turned over to the Housing Authority, the developer would be compensated at the $76,050 per unit and the average sale price of the units would be $90,000. The differences between those two costs would be shared by the three parties included in the agreement; however, to what proportions has not yet been determined. Mr. McConnell questioned how many bonds are currently outstanding where the City has guaranteed or is responsible for repayment? Mr. Hanna explained at this point of time the City has no contingent loan agreements or any sort of agreement whereby the City has guaranteed any other entities. McConnell questioned not even the Admiral Theater? Mr. Hanna pointed out that project is secured only by the real property...there is no recourse back to the General Fund or any other financial resources of the City. Mr. McConnell stated he could not support this proposal because it would place an additional burden on the tax paying citizens. He believed if it was a "positive deal" private investors would be jumping at the chance to get involved. Mr. Law questioned if the houses are not sold or rented, what fund will make up the bond payment? Mr. Hanna stated if the project does not general adequate income to make the debt service, the City would step up and provide that capital. Mr. Law stated he could not support the project. Mr. Colvin asked Mr. Wallace to explain the objective of this project. Mr. Wallace stated it is to provide the community with home ownership for 60% of median income. Currently, rental housing is available to the citizens in that income bracket. It is his belief that new employees will be coming into the area from other areas that are use to 0-lot lines smaller housing. Mr. Colvin questioned for clarification if the homes did not sell would the city be financially responsible? Mr. Wallace explained the City would be responsible for loan funds for the cash flow. He stressed this project is built to sell the units; however, it also has a proforma showing that if the units are not sold they can be rented during that period of time. The Housing Authority has gone through exhaustive discussions over the pros and cons of the project and the Housing Authority Board does support the project. Mr. Colvin stated this project would give people the opportunity for homeownership, who are presently renting properties. Mr. Wallace stated yes, people paying similar rents could actually become homeowners. Mr. Colvin stated he could understand opposition from people, who have vacant rental properties. He had mixed emotions about further obligating the city, but it has not been shown to him that the City will be adversely affected. Mr. Montgomery pointed out the Department of Navy have instituted a new program where members of the military are given the choice TAPE #1432 City Council Reg. Mtg. Minutes January 8, 1997 Page 12 of 17 for "home port" on the east and west coasts. He wished that he had had this type of opportunity and assistance to buy his first home when he was a young sailor. He believes this project will be an asset to the entire City when completed. He is a firm believer that we have to take a gamble once in awhile and you can't always bet on a sure thing, and he will support this project. Mr. Neville stated we set out a task to the Bremerton Housing Authority to find housing in Bremerton and the Growth Management Act also directs in-filling properties inside Bremerton boundaries. The Housing Authority chose this plan and after doing their homework have shown that it gives a young couple the opportunity to become homeowners. He pointed out even in Bremerton where houses are more affordable than in the County homes sell for over $90,000 and on up and new automobiles cost $30,000+. It is difficult for him to understand how young families get a foothold and actually own "a piece of the rock". He believes the downsizing of employment in this area is only a temporary phase, but the creation of the Sinclair Landing project is projected to bring in new jobs and people. And, with Puget Sound naval Shipyard's nuclear capabilities it should be secure well into the future as will the City of Bremerton. TAPE #1433 Mr. Neville stressed we have to look after our future now and that means giving people the opportunity for the first step into homeownership. In the event the units do not sell, the plan is in place allowing them to be rented; and the annual debt service is $625,000, not the total $9 million. He believes the site is a good location where people can become homeowners with a view of the Olympic Mountains. He requested staff to display the conceptual design of the project. He pointed out one of the features of the design that he particularly liked was locating garages in the back of the residences with alley access. He questioned if the City will have the opportunity to review the contingency loan agreement, since the one in the documentation was for the County? Sievers, City Attorney, stated he had a concern whether the proposed Resolution should be the final Council action on the project. Usually, the Council likes to review final documents and this is a little internally inconsistent in that the first "Resolve" says in principle they agree with the plan, but in the "Further Resolve" it says the Mayor is authorized to sign documents that are apparently still under negotiations. The Director of Community Development commented to him that it was to authorize the Mayor to continue negotiating; therefore, he recommended striking the wording giving the Mayor the final authorization, which would allow Council to then have the final decision on the documents for this project. Mr. Hanna pointed out the contingent loan agreement contained in Council's documentation was not offered as a draft TAPE #1433 City Council Reg. Mtg. Minutes January 8, 1997 Page 13 of 17 document to be entered into by the City. It was simply illustrative of the type of loan arrangement that is being contemplated. This type of agreement is new to the City, but not new to the County or other cities throughout the state. In answer to a question raised by Councilman Colvin about the risk being assumed by the City should the project be approved by Council, the City intends to make a condition of the Housing Authority's acceptance of the project from the developer that 10% of the units be sold prior to their acceptance. Therefore, of the total 130 units, 13 would be sold prior to the Housing Authority accepting the project, and 95% of the units would be leased out. That clearly does not mean there is no financial risk, there is always an element of risk, but it does not mean the City is taking over the mortgage payments on a 130 unit complex that might be sitting empty. Mr. Colvin asked the City Attorney what risks have not been addressed at this point? Mr. 8ievers noted there is financial risk and Mr. Hanna is in the best position to discuss that aspect with Council and is one reason for looking at the contingency, and what is the City guaranteeing, what can the City look to from the Housing Authority for pay back if the City is required to meet some of the debt service. The second reason to see some final documents is what is the City's program or public purpose in providing this guarantee. He felt the public purpose would be to provide affordable first time owner's housing, thereby increasing housing in the City. That may depend on a large degree on what the rent- to-own program looks like. Mrs. Huff-Menees questioned for clarification if the City Attorney was recommending striking the final paragraph in the proposed Resolution and requiring the final documents come back to Council for approval? Mr. Sievers stated that would be required, if the final paragraph was deleted, or as an alternative the word "sign" could be changed to "negotiate" in the final Resolve paragraph. Norm McLaughlin, Executive Director Kitsap County Housing Authority, noted his organization has operated similar programs as that proposed. Currently, the Viking Crest Condominiums in Poulsbo has a County guaranty and 40 units out of 120 have been sold. They feel there is a great need for this type of housing in Kitsap County and that the City has other methods of assessing the risk since the City has its homeownership program available and effectively lowers the cost of the units by offering a subsidy, which when the units are resold is recaptured. Kitsap County has guaranteed other projects similar to the proposed project and there have been no problems. The issues that Mr. Overson made regarding the trends, which they publish, probably deserves some attention. The City of Bremerton has been losing population and an attractive property like what is being proposed will attract people back to the City and will add to its tax base. It is true jobs have been TAPE #1433 City Council Reg. Mtg. Minutes January 8, 1997 Page 14 of 17 lost in Kitsap County over the past year; however the Economic Development Council is trying to diversify the economy and he believes there will be results from their effort as well as the Sinclair landing project. Mr. Montgomery pointed out trends have indicated the attractiveness of Bremerton to people coming from King County based on the fact housing costs are higher in that area. Mr. Winters asked the date of repayment? Mr. Hanna stated what is contemplated is a financing mechanism that will allow prepayment at any time. To the extent the units are not pre-sold during construction, they would be purchased from the developer as described by the Housing Authority. the principle on the debt would then be paid as each individual unit is sold and the proforma is drawn up around a sell out period of 60 months. #0430 M/S/C(Montgomery/Huff-Menees) to adopt Resolution No. 2582, with a modification to the last paragraph striking the word "sign" and changing it to "negotiate" President Farr stated he wholeheartedly supports this proposal in that it emphasizes encouraging in-fill construction of new housing within the City thereby bringing in population to the City, which will increase the tax base and prevent sprawl out into the County. He firmly believes if this project is not built in the City it will be built a short ways outside City limits and the City would suffer another loss of revenue. City officials were at odds with one former County Commissioners for a long time over what they believed was the projected population for Bremerton in the year 2012. This is the City of Bremerton's opportunity to make its projections come true. He calculated the need to increase the City's population by 1,000 per year to meet those goals. With the election of two new Kitsap County Commissioners, the three Commissioners are people who believe and will adhere to the principles of the Growth Management Act, which will direct growth into the City. The project appears to be well designed, user friendly and targeted toward the right people. He believes a vote against this project is saying the Housing Authority doesn't know what they are doing and the work they put into it is for not, and the advise of the Kitsap County Housing Authority, which has experience in this area, should not be considered and that the Mayor and Mr. Hanna, who are paid to lead this City correctly financially aren't making good decisions. Vote on motion: In Favor: Huff-Menees, Neville, Colvin, Winters, Montgomery, Farr Opposed: McConnell, Overson, Law Motion carried. Paula Johnston, Deputy City Clerk, announced Item 8A had been TAPE #1433 City Council Reg. Mtg. Minutes January 8, 1997 Page 15 of 17 pulled off the Agenda. 9A - PUBLIC HEIrRING, RESOLUTION #2580, REGARDING RECOVERY OF FEES FOR THE ABATEMENT OF THE PROPERTY LOCATED AT 4906 KEAN STREET, OWNER: EVAN BURLEY, #AB97-006 On November 15, 1996, the City demolished the burned house from the property located at 4906 Kean Street after the owner, Evan Burley, failed to do so as ordered by the Building Official. The cost charged to the revolving abatement fund for this action totaled $18,070.05. Council must now decide if the fees are just and reasonable and how they should be collected. President Fare asked the "Appearance Of Fairness/Conflict Of Interest" question. Mr. Montgomery stated he had toured the site several times, but he did not believe that would cloud his judgement. Mr. Winters stated Mr. Burley approached him to purchase a travel trailer from him, which he did not buy. President Farr announced all Council members will be seated. Roland Arper, representing the estate of George Liaset, stated Evan Burley was indebted to George Liaset going back to the 1980's. The last title report he obtained on the Burley property listed about 18 lien holders. They were in the process of foreclosure against Mr. Burley this year, but two days before foreclosure Mr. Burley filed for bankruptcy. They then petitioned the Bankruptcy Court to release them so they could continue their action, which was granted. Mr. Burley then came up with a proposal to sell the property for approximately $375,000. The legal action to foreclose was delayed to allow for the opportunity to sell the property. They are currently scheduled to foreclose on the property on February 7 and it is his understanding that the current sale agreement that they gave an extension to close has now been withdrawn, so the property is on the open market. His attorney, Bruce Buskirk has had various correspondence with the City and essentially their position is that they have worked long and hard to get in first position lien against the property and any liens the City may impose will be below their position as first position. Ian Sievers, City Attorney, stated the primary purpose of the Council is to verify the just and reasonable cost that was expended and to file a lien. The position of that lien and the impact of the prior liens would be subject of discussion at the further action of foreclosure. Mr. Montgomery stated he had viewed the site and reviewed the work order history and was surprised at the cost of clean up considering the debris that had to be removed. #0769 M/S/C/U(Montgomery/Huff-Menees) to adopt Resolution No. 2580, ordering that the fees incurred for the abatement of the house TAPE #1433 City Council Reg. Mtg. Minutes January 8, 1997 Page 16 of 17 located at 4906 Kean Street be collected as reasonable abatement costs and become a lien against the property. 9B - PUBLIC HEARING, RESOLUTION #2581, REGARDING RECOVERY OF FEES FOR THE ABATEMENT OF THE PROPERTY LOCATED AT 3807 6TH STREET, OWNER: ESTHER ALCANTRA, #AB97-007 On December 2, 1996, the City secured the abated house located at 3807 6th Street after the owner, Esther Alcantra failed to do so as ordered by the Building Official. The cost charged to the revolving abatement fund for this action totaled $388.17. Council must now decide if the fees are just and reasonable and how they should be collected. Paula Johnston, Deputy City Clerk, read a letter from Patricio Alcantra Jr.,: "I Patricio C. Alcantra Jr. am writing this letter on behalf of his stepmother Esther Alcantra, who is 73 year old widow of honorable discharged Navy veteran. She lives on fixed income from my father's military and Puget Sound Naval Shipyard's retirement benefits. Esther and I were wondering if those concerned would accept say $300.00 instead of the $388.17." President Farr asked the "Appearance of Fairness/Conflict of Interest" question with all Council members being seated. Patricio Alcantra Jr., stated his stepmother is on a fixed income and he is disabled, so this cost will place a hardship on them. His stepmother confided in him that she was willing to pay the total amount if she had to. They consulted with an attorney, who felt the cost of the labor was a little steep and could possibly be negotiated with the Council. Mr. Winters stated in his three years as a Council member he has not seen such a low charge for an abatement and wondered why they chose to let the City clean up the property rather than do it themselves? Mr. Alcantra stated their reason was not having the time or funds to accomplish the work. Mr. Winters pointed out the city did notify his stepmother and he did recognized the fact that Mr. Alcantra's father served in the military. Mr. Alcentra stated he would throw his mercy on the council and thanked the person who boarded up the windows and doors at the subject property. President Farr asked the City Attorney if Council had the authority to allow part of the fee to be collected now and part later? Ian Sievers stated if Council approves a lien the City will not take foreclose action. The City allows the County to foreclose on the property, such as actions taken for delinquent tax payments. The property owner actually has three years to repay the money. Mr. Colvin asked if the property owner understood they had three years to repay the cost? Mr. Sievers stated no, since it is an internal TAPE #1433 City Council Reg. Mtg. Minutes January 8, 1997 Page 17 of 17 City policy and an automatic collection process. Mr.. Neville stated he believed the subject property could be eligible for Bremerton Housing Rehabilitation loans, which could be used to fix up the house and make it more saleable. #0979 M/S/C/U(Montgomery/Huff-Menees) to adopt Resolution No. 2581, ordering that the fees incurred for the abatement of the house located at 3807 6th Street be collected as reasonable abatement costs and become a lien against the property. President Farr thanked the TV camera crew for their services: Rob Rupe, Jimmy Campbell and James Noble. With no further business meeting adjourned at 7:35 P.M. DAVID D. FARR, Councll President City of Bremerton KLM/DF/me cc: Normal Distribution File/Vault