The Edmonds City Council Tuesday night appointed retired banker Diane Buckshnis to fill the position left vacant with the death of Councilmember Peggy Pritchard Olson last November.

The speedy process took many in the room by surprise, coming on the second ballot when Adrienne Fraley-Monillas, Steve Bernheim, Dave Orvis and Michael Plunkett voted for Buckshnis, giving her a four-vote majority. Councilmembers D.J. Wilson and Strom Peterson voted to appoint former Councilmember Ron Wambolt; Peterson acknowledged that his vote was influenced by a call he received from Olson’s husband, noting it was his late wife’s wish that Wambolt be appointed to finish out her term.

Buckshnis, who narrowly lost to Peterson in her first run for a council seat last November, immediately took the oath of office from Mayor Gary Haakenson.

Shortly after Buckshnis was seated, the council heard from Frank Yamamoto and Michael Bowman, two Edmonds business owners who presented the combined 2009 annual reports from the Citizens Economic Development Commission and the Planning Board. (Yamamoto, owner of Running in Motion, chairs the commission while Bowman, who owns C’est La Vie, sits on both the commission and the board.)

The council appointed the 17-member commission in June 2009 to determine new strategies for economic development within the City of Edmonds, identify new sources of revenue for consideration and develop other ideas for improving commercial viability and tourism development. The full report can be found here, but the executive summary presented by Yamamoto described the financial challenges of the city, which is projecting a cumulative deficit of $30 million by 2020, and the possibility of tax increases or cuts in basic services — or both — to close the gap.

Noting that Edmonds” is not alone in facing economic distress,” Yamamoto told the council that commission and planning board held two joint meetings with representatives of various entities — including the Snohomish County Economic Development Council, the cities of Lynnwood, Mountlake Terrace and Bothell, and the Port of Edmonds — to share recent economic development-related ideas. The common message presented by guest speakers? “Success in the area of economic development requires strong and steady leadership from the City Council,” Yamamoto said.

Bowman was more direct in his communication, telling the council that a major challenge facing the Planning Board in 2009 was trying to determine what direction the council wants to go in terms of economic development.

“You are, as President Bush said, the deciders,” Bowman said, adding that the council needs to provide better guidance on how to encourage development that not only brings new business into town, but retains the businesses that are thinking of leaving.

C’est La Vie recently opened a second store in Renton, and Bowman said it was a positive experience compared to what he has endured as an Edmonds business owner. “Renton has always been the butt of jokes for many years, but they are really together, they are moving forward, they are moving aggressively, ” he said. “You need to understand that the reputation of the City Council of Edmonds is combative…and it’s not really pro-business.”

Councilmember Wilson said that he has heard some of the same criticisms of the Council, but noted that the elected body’s composition has changed significantly in the past few years. “We now have five members in our first term,” Wilson said. “I think there is a new energy on this council and certainly no one is anti-business.”

The commission invited Council members to attend a retreat they are holding in February, to discuss business development ideas in more detail, and Yamamoto will also attend the Council’s upcoming retreat.

In other action, the council — as a follow-up to earlier action Dec. 15, 2009 — approved an ordinance that excludes churches from conforming to the state building code  requiring sprinkler systems when they provide emergency shelter for homeless individuals, as long as the churches agree to:

– monitor for fires or violations of no-smoking prohibitions.

– provide an operational smoke detection system.

– prohibit the smoking of tobacco or similar products on the premises and prohibit the use of any open flame in the area in which the homeless are temporarily housed.

– maintain unobstructed fire exits.