Councilmembers present: Alan Kiest; Dwight Thompson (6:10 p.m.); Mary Jane Goss (6:25 p.m.); Roger Olstad; Ed Sterner

Councilmembers excused: Carolyn Armanini, Nate Herzog

Staff present: David R. Hutchinson, Mayor; Karen Haines, City Administrator; Dennis Peterson, Police Chief; Sarah Phillips, Government & Community Relations Manager; John Hawley, Finance Director; Frank Zenk, Public Works Operations Director; Neil Jensen, City Engineer; Susan Stine, City Clerk

Others present: Four visitors

Mayor David Hutchinson opened the special study session meeting at 5:40 p.m. He noted that a quorum of council members is not present. Mayor Hutchinson welcomed nominees Julian Andersen and Morgan Kellock and noted that the confirmation review calendar would be delayed until additional council members arrive. There was no objection to beginning the meeting with the presentation by Finance Director John Hawley on the employee benefit review.

City Administrator Karen Haines said that the review of employee health benefits had been undertaken in response to a proviso included in Ordinance 885/Adopting 2003 Budget. She noted that Finance Director has reviewed the benefits and his presentation will provide information on several options.

Hawley said that the intent of the presentation is to provide an overview of benefits, a comparison with other cities, and options for discussion for controlling cost increases. He noted that this information is intended to aid in the discussion of benefits prior to Guild contract negotiations and the 2004 budget process.

Hawley noted that 45 percent of city benefit costs are for non-health care benefits such as unemployment, social security replacement (401A), Medicare, various retirement systems, and Labor and Industries.

Of the total benefit cost, 55 percent goes to health care. These benefits are coordinated through the Association of Washington Cities and must comply with state law. Hawley reviewed the benefits provided by the city for its employees. (Council approved change5/22/03.)

In response to questions from Cmbr. Kiest, Hawley reviewed the Association of Washington Cities benefits plans and costs for represented and non-represented employees and compared the costs to the amount paid by other cities.

Cmbr. Thompson arrived at the meeting at 6:10 p.m.

Hawley reviewed six options for controlling benefit costs and discussed the impacts of each option. Discussion followed regarding various issues related to benefits and costs and the city’s policy or philosophy regarding benefits offered.

Hutchinson noted that a quorum is now present and called the meeting to order.

Hutchinson thanked Julian Andersen and Morgan Kellock for their interest in serving on the Environmental Quality Commission. Hutchinson noted that they would like to share a position on the commission, and he said that position-sharing previously had been authorized for students on the Public Safety Commission.

Cmbr. Goss arrived at the meeting at 6:25 p.m.

Morgan Kellock expressed her interest in serving on the Environmental Quality Commission and reviewed her experience as a volunteer. She noted that she lives in Lake Forest Park because she respects the environment.

Julian Andersen said that he has been involved in the community and has served on the Environmental Quality Commission in the past. He said that sharing a position with Kellock would work well because of business obligations. He noted that he and Morgan share the same values and have agreed how to divide the commission duties.

In response to questions from council members, Kellock and Andersen discussed details of how the commission position would be shared.

Thompson moved to excuse the absence of Cmbr. Nate Herzog and Cmbr. Carolyn Armanini. Cmbr. Kiest seconded. The motion carried unanimously.

Haines noted that the draft franchise agreement with Northshore Utility District is on tonight’s regular meeting agenda for first reading. Haines said that Finance Director Hawley, Public Works Operations Director Frank Zenk and City Engineer Neil Jensen have worked on this project and have met with representatives of the various utility districts. City Attorney Mike Ruark drafted a master franchise agreement, which is being reviewed and negotiated with each utility district.

Hawley suggested that questions pertaining to the draft agreement should be gathered for the city attorney for his response. Councilmembers noted their questions pertaining to the rolling five-year term of the agreement.

Hawley discussed potential revenue from the franchise agreements with the various districts. Discussion followed regarding cost sharing for major capital improvement projects and indemnification language.

In response to a question from Sterner, Zenk discussed issues related to potential grant awards.

There being no objection, the special study session meeting was adjourned at 7:10 p.m.

Susan Stine, City Clerk

David R. Hutchinson, Mayor

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